Line's Loss May Mean Bankruptcy for NCFC

Morgan Stanley has pulled a $265 million line of credit from ailing subprime giant New Century Financial Corp., a decision that likely will force the company to file for bankruptcy protection.The LOC was made just last week. According to documents filed with the Securities and Exchange Commission Monday morning, the Irvine-based NCFC also revealed that several of its financiers -- Bank of America, Citigroup, Credit Suisse, Deutsche Bank -- had declared the non-depository in default on warehouse lines or other financial obligations. Documents show that NCFC owes Credit Suisse almost $1 billion due to a repurchase obligation. Meanwhile, some Wall Street firms are terminating NCFC's servicing rights, which could reduce cashflow at the company's servicing unit. According to the just-released Quarterly Data Report, NCFC has $40 billion in servicing rights on its books, ranking 14th nationwide. Among subprime funders it ranks second. Its stock had been halted in trading as MortgageWirewent to press. A spokeswoman did not return telephone calls.