Thornburg receives majority consent to amend preferred stock tender offer minimum condition

By Jennifer Lanning Drey

Portland, Ore., July 10 - Thornburg Mortgage, Inc. said a majority of the participants in the principal participation agreement component of its March 31 financing transaction approved an amendment to change the requirement that the tender offer for the preferred stock result in the tender of at least 90% of the aggregate liquidation preference of the company's outstanding preferred stock.

To successfully complete the tender offer, the company must instead complete a tender of at least 66 2/3% of the aggregate liquidation preference of each series of its outstanding preferred stock, according to a company news release.

Under the terms of the tender offer, holders of Thornburg Mortgage series C, D, E and F preferred stock will receive $5.0 in cash and about 3.5 shares of common stock for each share of preferred stock.

Upon successful completion of the tender offer, the annual interest rate on the company's senior subordinated notes due 2015 will be lowered to 12% from 18%, resulting in savings of about $69 million per year in interest payments until maturity or until the company's senior subordinated secured notes are earlier redeemed or repurchased.

Additionally, the successful completion of the tender offer will result in the termination of the principal participation agreement, which would allow the company to retain the monthly principal payments on the mortgage-backed securities collateralizing its reverse repurchase agreement borrowings once the override agreement terminates in March 2009, after deducting payments due under those reverse repurchase agreements.

Thornburg is a Santa Fe, N.M., lender specializing in jumbo mortgages.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.