Thornburg Mortgage seeking 1.35 billion dollar in funds
( dpa ) - Another US finance company, Thornburg Mortgage Inc, Tuesday was trying to avoid bankruptcy by raising 1.35 billion dollars to cover margin calls from its bankers.
Like Bears Stearns Corp now being bailed out by JPMorgan Chase, Thornburg got caught up in the worsening US subprime mortgage crisis, but its problems represents a broadening of the crisis.
Thornburg's problem was not that it bought up mortgage securities but rather that falling home sales have cut into demand for its product and that fixed-income investors have been avoiding its securities, Bloomberg financial news service reported.
Thornburg has avoided the subprime loans to risky investors that have led to the country's worst financial crisis since the Great Depression of 1929, with 2 million foreclosure notices sent out last year alone.
Instead, the company specializes in jumbo mortgages of more than 417,000 dollars needed by people with strong credit records to buy larger homes.
MatlinPatterson Global Opportunities Partners III agreed to buy 450 million dollars of Thornburg's notes, the company said Tuesday.
Thornburg needs to raise almost 1 billion dollars this week to meet margin calls from its bankers. With the deadline looming, Thornburg had to accept an interest rate about 4 percentage points higher than the lowest-rated companies, Bloomberg financial news service reported.