Thornburg's Future in Doubt
Thornburg Mortgage, Inc. (TMA) continued to reel from the nation's mortgage crisis on Tuesday and Wednesday, announcing that it had reduced staff by 29 sales and support positions in its home lending division. The ailing lender also was forced to revise its seemingly never-ending tender offer for preferred shareholders, critical to a $1.35 rescue it lined up with MatlinPatterson Global Advisors LLC in March that kept the company out of bankruptcy, after it was unable to resolve a string of recent margin calls. "This was a difficult but necessary decision we were forced to make as we adjust our operations to navigate through this environment," said Larry Goldstone, Thornburg president and chief executive officer. "Today's announcement is no way a reflection on the ability of these individuals; rather, it is a sign of just how prolonged and extensive the mortgage crisis has become." Thornburg's Santa Fe-based operation took the hardest hit -- of the 29 positions cut, about half were from Santa Fe. The other half were from various locations across the country. Thornburg's Santa Fe operations employ 156 people. In the midst of continued mayhem amongst mortgage financing and credit markets, Goldstone said his focus is to ensure the company's long-term survival. That survival may well depend on the revised tender offer, which will allow preferred shareholders the right to tender each of their shares, valued at $25 each, for three common shares, taking into account a 1-for-10 reverse common stock split that took effect on Friday, according to a Reuters report. Golstone has said that if the tender offer fails, Thornburg's future will likely be cast into doubt. Thornburg Mortgage is (was?) a residential mortgage lender that works primarily with prime and super-prime borrowers seeking jumbo and super-jumbo adjustable-rate morgages. Cuts made by a lender with this target audience, obviously, shows just how far-reaching the mortgage crisis has been; the company's loan portfolio has nary a default in it, as well. Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade. Editor's note: To contact the reporter on this story, email email@example.com.