Delta Financial Corp., Woodbury, N.Y., says it has raised an additional $70 million in capital from two sources.Delta obtained a $60 million financing facility from Angelo, Gordon & Co., collateralized by all its securitization cash-flow certificates. Angelo, Gordon also received warrants to purchase 10 million shares of Delta common stock at an exercise price of $5 per share. Delta also issued $10 million in convertible notes to funds managed by Mohnish Pabrai, one of the company's largest stockholders. Those notes can convert into 2 million shares of Delta common stock at $5 per share. "Liquidity has become one of the most important issues facing lending institutions today as the credit disruption widens and rating agencies modify their reserve level requirements," explained Hugh Miller, Delta's president and chief executive. "This has created a capital-intensive environment in which it is increasingly more costly to operate. While our adherence to Delta's proven business model, with a focus on fixed-rate loans and a diversified wholesale/retail origination platform, provided some insulation and helped us generate positive earnings during the second quarter, it became apparent this current environment would unduly strain our liquidity." The announcement came in Delta's formal second-quarter earnings release, which confirmed results previously announced in a Securities and Exchange Commission filing on Aug. 9. The company can be found on the Web at http://www.deltafinancial.com.

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