Luminent's repurchase agreement lender declares event of default, demands repayment of $182.6 million

By Jennifer Lanning Drey

Portland, Ore., July 11 - A Luminent Mortgage Capital, Inc. repurchase agreement lender has declared an event of default and demanded immediate payment related to the alleged failure by the company to deliver additional purchased securities or cash necessary to fulfill its obligations under a September 1996 master repurchase agreement, according to an 8-K filed with the Securities and Exchange Commission.

The lender is an affiliate of Arco Capital Corp., Ltd.

As a result of the alleged default, the repurchase date for reverse repurchase transactions by the company and its affiliates was deemed by the lender to have occurred. The lender demanded immediate payment of the repurchase price, which was $182.6 million at July 11, according to the release.

An event of default was also declared under a September 2007 amended and restated credit agreement. As a result of that declaration of default, the lender has terminated the commitment under the credit agreement and declared the $29.9 million outstanding under the agreement to be immediately due and payable, including interest.

In addition, the event of default declared under the master repurchase agreement caused a default to occur under the indenture relating to $90 million of the company's 8.125% convertible senior notes due 2027. These notes may also be declared immediately due and payable.

Due to the defaults on the senior securities, the company is prohibited from making interest payments on its $92.8 million of junior subordinated notes.

Directors resign

Luminent also reported in the 8-K that directors Craig Cohen, Jay A. Johnston and Francesco N. Piovanetti resigned from the positions on Friday.

Luminent is a San Francisco-based real estate investment trust that invests in mortgage-backed securities and loans.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.