Thornburg's Preferred Stock Downgraded

The preferred stock of Thornburg Mortgage Inc., Santa Fe, N.M., has been downgraded from BB-minus to B-plus by Fitch Ratings, and its rating outlook has been revised from Positive to Negative.Fitch also affirmed Thornburg's BB issuer default and senior unsecured notes ratings and assigned a BB-minus rating to its unsecured subordinate notes. The downgrade was attributed to "the priority position of the subordinate debt in relation to the preferred stock in the event of default and the widening gap between the first dollar of rated senior unsecured debt and the last dollar of preferred stock resulting from the recent $100 million offering of series D preferred stock." The Negative outlook resulted from several factors, including management's "aggressive use of leverage," declining "coverage metrics," and spread compression, Fitch said. The rating agency can be found online at http://www.fitchratings.com.