Thornburg Mortgage to Shut Down, Sell/Liquidate Assets

Thornburg Mortgage Inc., Santa Fe, N.M., has made plans to discontinue operations after winding down through a bankruptcy filing and a series of asset sales and liquidations, ending a struggle to survive the non-agency liquidity crisis that started in 2007. Remaining assets are slated to be sold or liquidated with the assistance of Houlihan Lokey Howard & Zukin Capital Inc. The company already has agreed to transfer its mortgage servicing rights, which were granted to certain Wall Street firm counterparties as security for TM's obligations under their respective financing agreements. The counterparties are JPMorgan Chase Funding Inc. (formerly Bear Stearns Investment Products Inc.), Citigroup Global Markets Ltd., Credit Suisse Securities (USA) LLC, Credit Suisse International, Greenwich Capital Markets Inc., Greenwich Capital Derivatives Inc., The Royal Bank of Scotland plc and UBS AG. The counterparties have agreed to grant the company additional forbearance from demanding payment on deficiency claims under their various financing agreements through April 30, or earlier if certain events occur. But in exchange for the continued forbearance TM has agreed that the remaining counterparties who have not previously taken possession of their collateral under their respective financing agreements may do so at their discretion. The company said it will not be able to make certain senior subordinated notes payments but has a 30-day grace period before it defaults on these. It does not expect to file its 10-K annual report with the Securities and Exchange Commission. Thornburg Investment Management, which is co-located with TM and has the same chairman as TM, is a separate legal entity and said it would not be affected by TM's situation.