Thornburg Mortgage seeks $1 billion to insure survival

Discussion in 'Wall St. News' started by S2007S, Mar 19, 2008.

  1. S2007S


    Raise $1,000,0000,000

    BSC just sold for $250,000,000,


    just when you thought we were nearing a bottom TMA has to raise $1,000,000,000...if they dont, maybe the federal reserve will bailout them too....

    Thornburg Mortgage seeks $1 billion to insure survival
    Wednesday March 19, 10:49 am ET

    NEW YORK (Reuters) - Thornburg Mortgage Inc (NYSE:TMA - News) said on Wednesday that it would try to quickly raise nearly $1 billion of capital to keep five lenders at bay and avoid a collapse for the struggling "jumbo" home loan provider.

    The planned capital-raising, however, would dilute existing shareholders' stakes, said Thornburg, whose stock fell 44 percent to $1.67 in morning trading.

    The Santa Fe, New Mexico-based company had previously said its survival was in question after being unable to meet lender demands for more than $600 million of cash or collateral.

    Thornburg said the new, 364-day agreement with affiliates of Bear Stearns Cos (NYSE:BSC - News), Citigroup Inc (NYSE:C - News), Credit Suisse Group (VTX:CSGN.VX - News), Royal Bank of Scotland Group Plc (LSE:RBS.L - News) and UBS AG (VTX:UBSN.VX - News) would reduce margin requirements and free it from further margin calls and other obligations. It said the lenders were providing about $5.8 billion of financing.

    As a condition of the agreement, Thornburg said it must raise a net $948 million within seven business days.

    The company said it planned to do so by selling at least $1 billion of convertible debt and use much of the proceeds for margin calls. These subordinated notes would carry a 12 percent interest rate and be convertible into stock at 75 cents per share.

    Thornburg also plans to issue five-year warrants to the lenders to buy 47 million shares, equal to about a 27 percent stake, and to suspend its dividend for a year.

    Chief Executive Larry Goldstone said the plan was "highly dilutive," but in Thornburg's long-term interest.

    "By placing a one-year moratorium on margin calls and raising the required amount of capital specified in this agreement, we believe we will have the necessary liquidity and staying power to manage through this highly volatile and uncertain mortgage market environment," Goldstone said.

    Thornburg specializes in adjustable-rate mortgages of more than $417,000, which typically go to buyers of more expensive homes. Many investors stopped buying these loans as credit markets tightened. Until recently, mortgage financiers Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News) also could not buy them.

    Friedman Billings Ramsey & Co; Jefferies & Co; JMP Securities; Keefe, Bruyette & Woods Inc; and UBS Investment Bank are arranging the convertible offering, Thornburg said.
  2. AH HA! It's not over yet. If this piece of shit company goes under, which bank will suffer most. Hopefully WM and whoever else is on the brink.

    Go go gadget printing press to the rescue.
  3. S2007S


    they will just print more money and bail this one out too, by that time the DOW will be around 11700-11900 and guess what, they will lower rates to 1.5% and keep the economy from going into a recession (which already is in a recession)
  4. 2 bad we cant just let all these ponzi schemers drown in their own excrement.

    2 painful for everyone if we allow it
  5. Just another mortgage company going under hey, seems like the market is ignoring it.

    Only down another 30% and trading at it's lows.

    TMA is the next domino
  6. what's the risk to reward ratio on this stock at this point?