Voiding the SPS is also bad for the JPS because it is bad precedent which could be used to turn the JPS into a zero coupon type of cash flow structure in a consent decree.
My fear is that FHFA and UST enter into a Utility Model focused Consent Decree and leave the JPS in place with no divs until ultimate exit many years forward. Do you think that is possible.
If UST just has to rely on the warrants then it puts pressure on UST to honor the existing capital structure. Otherwise the SPS could be used to capture cash flows that should be used to pay divs to the JPS.
Crazy concern? It seems like something is up as Glenn has mentioned but JPS keep on trading down? Thoughts?
The Golden Rule is always best especially if you want a fair treatment for your self. JPS and Common should want fair treatment for both.
You talk about off-balance sheet SPS as if it could really be possible.
another $100B is off balance sheet
$103.1 billion SPS increased for free since December 2017 is missing on their balance sheets. You don't see the financial aspect behind what you write. Each company presents its financial statements on a consolidated basis. The "off-balance sheet SPS" is called financial statement fraud because they must appear, including the SPS scheduled for June 30, and the objective is to don't post the offset with reduction of Retained Earnings, for the lie: "FnF continue to build capital". This is also why you want to fix the regulatory capital holes with a conversion SPS to common stock, when the objective of CET1 is to force the financial companies to build a Retained Earnings account that really absorbs losses, not to accumulate capital stocks, making all financial companies issue common stocks like mad or a swap JPS (Additional Tier 1 capital) for common stocks.
What SPS? You are covering up the law, where we can see that the SPS were repaid under the guise of dividend payments (fully repaid at the end of 2013/2014), because any dividend is restricted by law (a capital distribution, like today's gifted SPS as compensation to UST. Exceptions: reduce the SPS and recap in the CFR1237.12) and can only be distributed out of available funds (none with deficit in the Retained Earnings account all along) Besides, the SPS can't be declared void as if by magic. There must be a reason, which is that they were repaid with capital distributions to UST and thus, it prevented FnF from recording the Retained Earnings (core capital) in the first place. The SPS are repaid with cash, not with regulatory capital (Cash/Retained Earnings: double-entry accounting) Also, "legacy commons" doesn't exist. They are always called "existing" common shareholders. Legacy is for legacy portfolio at a determined date in the past. A word repeated by other plotters, like Pagliara or Bloomberg News. You are juggling with ideas without financial grounds. No wonder why you have recommended to other users here, to don't read my posts.
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