Luminent lenders declare default – demand $1.6 billion

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Immediately. That’s not a fun way to wake up on a Tuesday morning. According to Market Watch, Luminent Mortgage Capitial is facing $1.6 billion in demands from 8 lenders who have declared the company in default of its lending agreements. Surprisingly, shares are getting hammered down 41% today. More from Market Watch:

Luminent said the lenders alleged that the company has failed to meet margin calls or repurchase financial assets under these agreements. The lenders are now demanding immediate payment of roughly $1.6 billion, the company also noted in its filing with the Securities and Exchange Commission. That, in turn, caused a default under the indenture relating to $90 million of Luminent’s 8.125% Convertible Senior Notes due 2027. They also triggered a default on the asset-backed commercial paper issued by Luminent Star Funding Statutory Trust I, an affiliate, the company added. The agent for the holders of that commercial paper has demanded immediate payment of roughly $580 million, Luminent said.

Can’t you just hear the Luminent executives? “Let me just get out my checkbook…who do I make that out to?”

We’ll keep an eye on them.