The troubled Irvine, Calif., lender to customers with weak credit histories said Morgan Stanley, which had provided it with $265 million in new financing last Thursday, sent New Century a letter Friday saying it was discontinuing the financing. Morgan Stanley cited "certain purported defaults," New Century said in a
Securities and Exchange Commission
New Century also got default letters from Citigroup, Bank of America, Barclays and Credit Suisse.
The company said it won't be able to file its 10-K for 2006 on time.
New Century lost more than 80% of its value last week as lenders said they were cutting off the company's access to financing. The news comes just over a week after the company said it was under investigation by the Justice Department over its accounting and trading in its securities. Last month, New Century reported steep losses that put it in jeopardy of losing its funding, as players throughout the subprime mortgage industry move belatedly to tighten their standards.