Thornburg Advised to Restate Earnings

Thornburg Mortgage Inc.'s auditors have advised it to restate its 2006 and 2007 earnings due to deteriorating mortgage-related securities prices and partly unmet margin calls that may affect its ability to hold its purchased adjustable-rate mortgages to maturity. The company said it may have trouble holding the ARMs to maturity because the partly unmet calls "have raised substantial doubt about the company's ability to continue as a going concern." The restatement is slated to result in a $427.8 million charge for impairment on its purchased ARM assets as of Dec. 31, a move the company said it believes will not have a "material" effect on its book value. The company had gotten counterparties involved in the margin calls to agree to temporarily freeze additional calls on March 7 and said the freeze might be extended.