4:53PM Novastar Fin announces investment of $48.8 mln by MassMutual and Jefferies Capital Partners as part of commitment to raise $150 mln in new equity (NFI) 7.51 -0.12 : Co announces that it has entered into a definitive securities purchase agreement, a standby purchase agreement and other agreements pursuant to which affiliates of MassMutual Capital Partners along with funds managed by Jefferies Capital Partners have purchased $48.8 mln of convertible preferred stock and are committed, subject to certain conditions, to purchase up to $101.2 mln of any unsubscribed shares of an upcoming Shareholder Rights Offering for a similar series of convertible preferred stock. These transactions, including the Rights Offering, will raise $150 mln in equity for NovaStar. Today's announcement completes the previously announced formal process of exploring strategic alternatives. Scott Hartman, Chairman and CEO said, "Our review of strategic alternatives looked at many options, and the Board concluded that the best way to maximize long-term shareholder value is to move forward with a stronger balance sheet and a commitment to continuing to meet the mortgage needs of America's homeowners."
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getting slight lift in ah on this news now 7.56/7.62 last 7.60
NovaStar Financial, Inc., a specialty finance company, engages in the origination, purchase, securitization, sale, investment in, and service of residential nonconforming loans and mortgage-backed securities in the United States. It operates through three segments: Mortgage Portfolio Management, Mortgage Lending, and Loan Servicing. The Mortgage Portfolio Management segment invests in a portfolio of mortgage securities, which includes interest-only, prepayment penalty, and overcollateralization securities retained from its securitizations of nonconforming, single-family residential mortgage loans; and subordinated mortgage securities retained from its securitizations and subordinated home equity loan asset-backed securities. The Mortgage Lending segment originates and purchases nonconforming, single-family residential mortgage loans through its loan origination network, including wholesale loan brokers, mortgage lenders, and correspondent institutions, as well as direct to consumer operations. It also underwrites, processes, funds, and services the nonconforming mortgage loans sourced through its network of wholesale loan brokers and mortgage lenders; and direct to consumer operations in centralized facilities. The Loan Servicing segment retains the servicing rights with respect to the loans it securitizes. The company has elected to be taxed as a real estate investment trust (REIT). As a REIT, the company is not subject to federal income tax to the extent that it distributes at least 90% of its taxable income to its shareholders. NovaStar Financial was founded in 1996 and is based in Kansas City, Missouri.
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