Not only they would be able to convert the Trups but also the accrued interest on them. With the 20 mills converted and another 220 mils of principle and interest you are looking for 240 mils of fresh new capital. Also, close to 12 million in interest expense will get whipped out. Cutting corners little bit here and there, they could have profitable 2011.
Sometimes in Q3, expect them to start reversing the Loss Allocations given that their reserves are way too big for the amount of NPSs. For the comparaison, on the other extreme, DRL has 100 mils set aside to cover 600 mils of NPA. As a rule of thumb, the NPS should be covered with 35%. So that's 40 mils that eventually will be reversed.
And of course the 190 mils of Tax Allocations that's close to 1$ per share earnings should the prefs accept the conversion
You are preaching to the choir. I am doing the same thing. Just talking to myself on a message board basically.
I like to think things out, and put them into words in posts. It actually is good practice for the investing mind,since you can go back and check what you were thinking/saying at given price points and see how right or wrong you were.
the only unanswered question I have is what is taking so long for the trups to realize that the conversion is the only way out. Sadly or luckily, given the current situation they have to spill the first blood, others will follow.