Thornburg Mortgage Latest Casualty in Mortgage Crisis
Thornburg mortgage is just the latest wall street lender on the brink of collapse as mortgage backed securities continue to lose all value. As of Wednesday morning, Thornburg stock had dropped 49% to only $1.50 a share after the company announced that it needed to raise at least $948 million dollars to stay afloat. The plan entails using convertible bonds that will give investors a 27% share in the company, further diluting the already worthless shares for the current share holders. The deal has yet to materialize as investors may be wary after the recent Bear Sterns debacle. Originally scheduled for a Thursday release, the convertible bonds have been pushed back till Monday as Thornburg works to attract potential investors.
Experts say that Thornburg mortgages are not defaulting in large numbers but the current credit crisis has lessened their value as an asset and in turn, Thornburg’s overall equity.
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