The mortgage company is facing margin calls as mortgage market conditions continue to deteriorate.
March 3 2008: 8:25 AM EST
NEW YORK (AP) -- Credit rating agency Standard & Poor's late Friday cut its rating on Thornburg Mortgage Inc. because it is facing margin calls.
S&P cut the rating to "B-" from "B." Both the new and the old ratings are considered non-investment grade.
On Thursday, Thornburg Mortgage said in a regulatory filing it has recently been the subject of margin calls, which force borrowers to repay loans or put up more collateral to secure them.
The margin calls come amid "a sudden adverse change in mortgage market conditions in general" that began on Feb. 14, Thornburg said in the filing with the Securities and Exchange Commission.
Thornburg (TMA) faced similar margin calls in 2007 as the mortgage markets weakened.
S&P said further margin calls could force Thornburg Mortgage to sell some of its assets at losses to generate cash. If Thornburg is forced to shed assets, it could weaken the company's traditional profitability levels.
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