Thornburg Posts $3.3B Loss

Thornburg Mortgage Inc., Santa Fe, N.M., lost $3.3 billion in the first quarter, but the company's chief executive says most of the loss related to unrealized mark-to-market valuation adjustments and writedowns of asset values. The loss, which came to $20.64 per common share, reflected weak housing market conditions and secondary-market turmoil in the first quarter, CEO and president Larry Goldstone said. As a result of margin calls from the company's creditors, Thornburg had to sell assets and seek alternative financing for assets that remained in portfolio, he noted. "Even in this difficult overall market, we were able to raise new capital to provide further liquidity to meet our borrower obligations," he said. The company had received $1.8 billion worth of margin calls since Dec. 31, but was only able to satisfy $1.2 billion of the total by early March. The company was forced to arrange alternative financing and sell assets at a loss to meet its additional margin calls and reduce its reverse repurchase agreement obligations. The new financing arrangement required Thornburg to raise an additional $1 billion of capital and was significantly dilutive to existing shareholders, but it provided a one-year reprieve from new margin calls, the company said. Thornburg can be found online at http://www.thornburgmortgage.com.