Replies to post #260899 on Mr Cooper Group Inc (COOP)

[MasterBlastr]

I tend to say that commons will get a chance to get more *after* preferreds are paid on full. Preferreds cannot get more than their full face, plus dividends, possibly. Commons have no ceiling on potential recovery.

[gophilipgo]

True, but it's much more likely that preferreds are paid in full before commons receive anything significant. I'm not trying to suggest your scenario can't happen, but the odds are clearly in favor of preferreds being paid full or near before commons see much. The absolute priority rule is there for a reason. In the majority of cases, this is how it works. That's why many, many people recommend hedging some with preferreds.

Ultimately though, we are all on the same side, so I'd rather not argue this point to death.

[Zalviny]

you are wrong! preferred must be paid first before common receive anything.

[NASCOW]

Without arguing the point into oblivion because we have had numerous discussions about this before,depending on which direction this BK turns, the preferred stock cannot 'agree' to take a haircut so commons get paid anything. It would set a precedent and make buying 'preferred' stock in a company questionable.

The prospectus states it, the law states it. 3.5 Billion will go to pay off the preferred stock first if we get to that point.