do not underestimate wall street and hedge fund forcing a fire sale of TMA assets. is this a realistic scenario?
Form 8-K for THORNBURG MORTGAGE INC -------------------------------------------------------------------------------- 5-Mar-2008 Triggering Events That Accelerate or Increase a Direct Financial Obligatio Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement. Thornburg Mortgage, Inc. (the "Company") has entered into reverse repurchase agreements, a form of collateralized short-term borrowing, with various counterparties. The Company received a letter from JPMorgan Chase Bank, N.A. ("JPMorgan"), dated February 28, 2008, after failing to meet a margin call of approximately $28 million. The letter states that an Event of Default as defined under that certain Master Repurchase Agreement, dated as of August 3, 2006, as amended on February 7, 2007 by and between the Company and JPMorgan (the "Agreement") exists. The letter also notified the Company that JPMorgan will exercise its rights under the Agreement. The aggregate amount of proceeds lent to the Company under the Agreement was approximately $320 million. The Company's receipt of the notice of an event of default has triggered cross-defaults under all of the Company's other reverse repurchase agreements and its secured loan agreements. The Company's obligations under those agreements are material.
and what other dominos does this event push over? Nasty time to be force selling assets - right at the bottom.
the credit facilities they have demand profitability, the firesale will count as gaap losses so it will be up to the facilities to decide to shut them down then they will file for bankruptcy