Forbes  Apr 17  Comment 
Jason Brady: I think the most important thing about the Thornburg Strategic Income Fund (NASDAQ: TSIAX) is to understand why we started it in 2007 and what we are trying to accomplish, both for our retail and institutional clients. Thornburg was...
Yahoo  Feb 3  Comment 
The U.S. Securities and Exchange Commission on Friday dropped its case against two former executives at now-defunct home lender Thornburg Mortgage Inc in a lawsuit brought in the wake of the 2008 financial ...
MarketWatch  Jan 31  Comment 
Ben Kirby talk about‘s about the Thornburg Investment Income Builder Fund’s outstanding 2016 and newer income-stock plays.
Insurance Journal  Nov 22  Comment 
Philadelphia Insurance Companies (PHLY) has created new insurance coverage for museums and cultural institutions through a partnership with its sister company, Tokio Marine America (TMA). The partnership gives PHLY increased capacity up to $100...
Insurance Journal  Oct 31  Comment 
Tokio Marine America (TMA), a commercial property and casualty insurer to large and middle-market companies and a subsidiary of Tokio Marine Holdings, is expanding its ocean marine offering to include hull and liability insurance. This new...
Benzinga  Oct 20  Comment 
Cantor Fitzgerald analysts maintain their Buy rating on Omeros Corporation (NASDAQ: OMER) after promising OMS721 data in kidney disorders and associated improvement of thrombotic microangiopathies (TMA) blood markers. Following promising...
Reuters  Sep 26  Comment 
The U.S. Securities and Exchange Commission has dropped several claims against two former executives at now-defunct home lender Thornburg Mortgage Inc in a lawsuit brought in the wake of the 2008 financial crisis.
Insurance Journal  Sep 26  Comment 
Tokio Marine Management Inc. (TMM), a commercial property/casualty insurer for large- and middle-market companies and a U.S. subsidiary of Tokio Marine Holdings in Japan, is rebranding as Tokio Marine America (TMA). The company says its new brand...
Insurance Journal  Jul 27  Comment 
Barnes & Thornburg LLP has added David Wood and Joshua Rosenberg to the firm’s litigation department and insurance recovery and counseling practice group. The firm also added John Corbett, of counsel, in Dallas, Texas. The trio arrives from...


Thornburg Mortgage (TMA) is a residential mortgage lender that originates, acquires, and makes investments in ARM (adjustable-rate mortgage) assets. The company elects to be treated as a REIT (Real Estate Investment Trust) for federal income tax purposes. The company's ARM assets consist of purchased ARM assets and ARM loans. Purchased ARM assets are mortgage-backed securities that represent interests in pools of ARM loans. The company's ARM loans are either loans that were originated by TMA, loans used as collateral to support the issuance of CDO's (collateralized debt obligations) or loans pending securitization. The company finances its loan purchases and originations through various sources including equity issuance, unsecured debt, CDO's and short term borrowings. When the company borrows short-term funds, they generally enter into interest hedging transactions to mitigate the impact of fluctuations in short-term rates.

Thornburg, which caters to borrowers with strong credit, specializes in "jumbo" mortgages - loans that exceed $417,000. It avoids subprime loans, generally. Until Feb 2008, Thornburg’s loans were too big to be purchased by Federal National Mortgage Association (FNM) and Freddie Mac (FRE).

The company originates its mortgage loans through 313 correspondent lenders and directly to consumers in all 50 states. The company also has 18 field executives and 541 brokerage firms to facilitate its wholesale business. TMA outsources most of its standardized origination functions, loan processing, closing, and servicing, to third-party providers. As a result, the company does not have a nationwide branch network.

Business Financials

The company makes money from the net spread, or the difference between income from interest on ARM assets and the cost of borrowings. As of September 30, 2007, the company had total assets of $36.3 billion, short-term borrowings in the form of commercial paper, reverse repurchase agreements and whole loan financing of $12.2 billion, and permanent mortgage debt, in collaterals, of $21.1 billion. The company concentrates it business on larger balance high credit loans, which decreases default risk. As of September 30, 2007, the company's portfolio consisted of 94.8% AAA-rated assets and 5.2% below AAA-rated assets.

Subprime Crisis

Thornburg Mortgage Inc. (TMA) said on 25th March 2008 that it would raise $1.35 billion through a private-placement deal to help keep the company in business and avoid bankruptcy. It avoided subprime loans, which have had the highest rates of default, but ran short on cash after falling home sales reduced demand and investors wary of mortgage-backed assets retreated from the company’s securities.

Thornburg has lost 95% of its value in the past year, and is desperately fighting to stay afloat. It needs approximately $1 billion this week to meet margin calls from bankers. A previous plan to raise about $1 billion in convertible notes with an interest rate of 12% failed and was subsequently terminated.

Having suspended its preferred dividends and offered to buy back 90% of its preferred stock, Thornburg is now seeking to raise $1.35 billion using debt that pays an 18% interest rate. If the New York Stock Exchange grants its approval, Thornburg will issue senior subordinated secured notes due in 2015 without shareholder approval, which the company says would take too long.

An infusion of fresh capital is the centerpiece of a recent agreement Thornburg struck with its creditors, who agreed to freeze their demands for more collateral, so long as the company can raise at least $948 million in seven business days. If this offer fails, and the company’s creditors withdraw from the agreement, Thornburg will likely be forced into bankruptcy.


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