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Mortgage REIT pays off $1 billion in lines of credit
Luminent also says 15 employees cut since August as loan originations slow
By Murray Coleman, MarketWatch
Last Update: 1:06 PM ET Sep 11, 2007Print E-mail Subscribe to RSS Disable Live Quotes
SAN FRANCISCO (MarketWatch) -- Weeks after turning to hedge funds for an infusion of capital, Luminent Mortgage Capital Inc. says it has repaid some $1 billion in warehouse lines of credit.
The beleaguered mortgage REIT also has reduced its payroll by 15 employees, said Trez Moore, the company's chief executive, in a statement on Tuesday.
"Luminent is moving forward with strategic initiatives designed to capitalize on investment opportunities in this changed market environment," she said.
On Aug. 23, the San Francisco-based Luminent (LUM:luminent mtg cap inc com
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LUM1.62, +0.33, +25.6%) said it had agreed to terms with Arco Capital Corp. to provide a $65 million infusion into the firm so it could repurchase mortgage security portfolios.
Analysts predicted such securities from the fund company would basically serve as collateral to pump Luminent with needed cash. It had to seek outside help due to lack of demand for its portfolio of high quality mortgage securities.
"These initiatives are designed to resolve Luminent's liquidity issues and, over the longer term, create opportunities for enhancing the value of Luminent," Moore said.
At the end of June, Luminent had assets of $9.5 billion. The company's stock, which was down more than 85% this year, has been rising. In the past month, it had gained more than 31%. After the latest news of its paying down debt was released, prices were up 25% to $1.62 per share on more than twice the stock's average daily volume.
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