Monday, August 06, 2007

LUM Announcement

by Tanta on 8/06/2007 05:41:00 PM

Luminent, a mortgage REIT, halted trading this morning after a 30% drop in the share price on "news pending." Here's the release:

SAN FRANCISCO, CA., August 6, 2007 — Luminent Mortgage Capital, Inc. (NYSE: LUM) announced today that, since August 3, 2007, the mortgage industry, and the financing methods that the mortgage industry relies upon, have deteriorated significantly and in an unprecedented fashion. Effectively, the secondary market for mortgage loans and mortgage-backed securities has seized-up. As a result, Luminent is simultaneously experiencing a significant increase in margin calls on its highest quality assets and a decrease on the financing advance rates provided by its lenders.
In a Board of Directors meeting today, Luminent’s Board unanimously voted to take the following actions:
• The Board of Directors suspended payment of Luminent’s second quarter cash dividend of 32 cents per share on Luminent’s common stock.

• The Board of Directors extended the maturity of the outstanding commercial paper issued by Luminent Star Funding Trust I, a special purpose subsidiary of Luminent, by 110 days.

• The Board of Directors cancelled Luminent’s second quarter 2007 earnings release conference call, scheduled for Thursday, August 9, 2007, at 10:00 a.m. PDT, to discuss its second quarter of 2007 results of operations.

• The Board of Directors delayed the filing of Luminent’s quarterly report on form 10-Q for the second quarter of 2007. Luminent’s second quarter of 2007 unaudited condensed financial information is attached to this press release. Luminent’s independent registered public accounting firm has not completed a review of the financial information for the three and six months ended June 30, 2007.

• The Board of Directors authorized Luminent’s senior management to inform the New York Stock Exchange of these unfolding events and, as a result, trading was halted in Luminent’s common stock.

The Board of Directors currently is considering the full range of strategic alternatives to enhance Luminent’s liquidity and preserve shareholder value during this period of market volatility.

LUM issued a PR on July 30 "reaffirming" its dividend after the AHM fiasco.