Accredited Home Lenders Holding Co., a U.S. subprime mortgage lender, said on Tuesday it needed to raise cash after paying $190 million demanded by its lenders, sending its shares down as much as 53.5 percent to a record low.
The San Diego-based company said it also will cut jobs and seek other ways to cut costs. It also said it is seeking waivers of some financial covenants from its lenders, and is ”exploring various strategic options.”
Accredited’s announcement, issued shortly after midnight Eastern time, is the latest blow in the subprime lending sector, which makes loans to people with poor credit histories.
Lenders have been battered by rising defaults and increasing demands by their own lenders to take back soured loans at a loss. More than two dozen have quit the industry in the last year.
Larger rival New Century Financial Corp. is widely considered by analysts to be on the brink of bankruptcy, after receiving notices of default from several lenders.
Shares of Accredited fell sharply on the news.
Accredited said it has paid $190 million in margin calls on loan facilities since January 1 as lenders demand more collateral. It said it received two-thirds of those margin calls since February 15.
The company ended 2006 with $345 million of available liquidity. It didn’t say how much it now has. Accredited said it may try to raise additional capital.
In addition, the company said it is unlikely to meet the extended March 16 deadline to file its annual report with the U.S. Securities and Exchange Commission.
It is still determining whether to write down some of the value of Aames Investment Corp., a Los Angeles subprime lender it bought last October 1.
Accredited in the fourth quarter posted a net loss of $37.8 million, or $1.49 per share, as revenue declined 60 percent.