Thornburg Mortgage Can't Meet Margin Calls, Survival in Doubt

[marmar]

from Bloomberg:



Thornburg Can't Meet Margin Calls, Survival in Doubt (Update4)

By David Mildenberg

March 7 (Bloomberg) -- Thornburg Mortgage Inc., the home lender that's lost 95 percent of its market value in the past year, may go out of business because the provider of ``jumbo'' loans can't meet $610 million of margin calls.

Bankers have agreed to freeze their demands for payment while Thornburg tries to raise enough cash before a deadline of midnight tonight, according to a company statement. Falling prices for mortgage assets and the company's shrinking liquidity ``have raised substantial doubt'' about Thornburg's ability to keep operating, the statement said.

Cash ran short at least twice since August at Santa Fe, New Mexico-based Thornburg, and Citigroup Inc. analyst Donald Fandetti said this week that bankruptcy is possible. Investors are shunning all except the safest debt, driving down prices on mortgage assets, and Thornburg's bankers want more collateral to protect themselves against losses.

``Quite simply the panic that has gripped the mortgage financing market is irrational and has no basis in investment reality,'' Larry Goldstone, chief executive officer of Thornburg, said in the statement.

Thornburg, which fell as much as 35 percent in New York Stock Exchange composite trading, closed officially at $1.79, an 8.5 percent gain, based on three trades at the end of the session. The stock then returned to its previous level, changing hands after hours at $1.33, 19 percent below yesterday's close.

A call to Thornburg spokeswoman Suzanne O'Leary Lopez was not immediately returned. Goldstone said in the statement the company is committed to solving its cash shortage so it can keep operating. ........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=abu461kYcx0Y&refer=home

[puerco-bellies]

1. This assclown must be a Bush-bot.

``Quite simply the panic that has gripped the mortgage financing market is irrational and has no basis in investment reality,'' Larry Goldstone, chief executive officer of Thornburg, said in the statement.

[marmar]

2. .... as he pulls a Jeff Skilling and takes a golden parachute out of his crashing company.

Those pigs are all the same.

[kineneb]

3. uh-oh. many other shoes are waiting to drop.

an entire "Imelda Marcos closet-full" of shoes...