Thornburg Needs To Raise $610 Million - Fast

On Friday, Thornburg Mortgage (TMA), the mortgage REIT that has been in the eye of the storm last two days, issued a press release updating the situation (TMA Press Release).

Since December 31, 2007 it has received $1.777 billion in margin calls, of which it has been able to meet $1.167 billion. That leaves the company with a $610 million shortfall as of the close of business Thursday.

The company has entered into an agreement with its repurchase agreement counterparties to freeze additional margin calls through the end of business Friday, while the company searches for solutions.

The announcement has led to a renewed frenzy in Thornburg shares, which have lost about 30% in the last 15 minutes on a pickup in volume (TMA Intraday Chart).

Disclosure: Top Gun is long Thornburg Mortgage (TMA) shares.

Comments

[Rational:]

The sad thing is that daily operations are profitable, they have rapidly growing origination volume in spite of an industry-wide slowdown, and their new loans can be packaged for CMO financing without a problem. All of the Alt-A losses are only on paper and totally unrealized... .47% delinquency rate. You'd think someone would loan them $1B or more at, say, 15% via commercial paper for 3 years non-callable. With margin calls out of the way, limited risk but high return.

2008 Mar 10 09:09 AM

[Short seller:]

This company is done Ch. 11 by mid-week if not sooner. Jp morgan wins again.

2008 Mar 10 10:43 AM

[Short seller:]

Investor relations no longer taking calls. Ch. 11 may happen today. what a shame what the big banks can do to the American spirit.

2008 Mar 10 11:23 AM

[gebby:]

with the fed action company has chance to recover. lenders may give them some breathing room

2008 Mar 11 06:32 PM