says a return to normalcy is within reach.
Shares rallied 6% in heavy action Thursday after the company raised $500 million by selling high-yielding preferred shares to the public. The sale, announced and completed within hours this morning, eased pressures tied to credit that have been ravaging mortgage companies. But is the half a billion cash infusion sufficient to keep it afloat?
Thornburg CFO Clarence Simmons tells
that the lender's latest move should help fund new loan commitments and help the company complete more securitizations to get warehoused debt off its balance sheet.
The Santa Fe, N.M., jumbo-loan-focused mortgage lender, which has seen its lending business seize up as of late amid dislocation in the mortgage lending industry, sold the preferred stock to one or more unidentified investors. Simmons declined to disclose details about the deal.
The offering was seen by many as a desperate attempt to stay afloat. The move comes just a week after
sold $2 billion of preferred shares yielding 7.25% to
Bank of America
"We think this is sufficient -- we have more than shored up our liquidity. We think this is going to allow us to return to normal operations," Simmons tells
. "Half a billion in this market for us is a lot," he adds.
How sufficient that number turns out to be will play out over the next several weeks and months. BofA's cash injection into Countrywide served as a vote of confidence in the ailing mortgage lender but has done little by most accounts to unlock the short-term debt markets. That's where these lenders have typically turned to help fund new loans, but they haven't been able to tap those funds in the last month after investors started fleeing subprime loans gone bad.
Simmons point out that opportunities abound for players who are able to survive the distress that has overtaken the market. He says the key is getting to the other side of the mess.
"This move allows us to be a player in this marketplace, which from our perspective has a lot of opportunities imbedded in it and solidifies the dividend," which is set to be paid out Sept. 17, Simmons notes.