KANSAS CITY, Mo., Oct. 17 /PRNewswire-FirstCall/ -- NovaStar Financial,
Inc. (NYSE: NFI), a residential mortgage portfolio manager, today announced
that it has been advised by the staff of NYSE Regulation, Inc. that the
company's Common Stock (ticker symbol: NFI) and its 8.90% Class C
Cumulative Redeemable Preferred Stock (ticker symbol: NFI PR C) no longer
meet applicable standards for continued listing on the New York Stock
Exchange due to a previously announced change in the company's corporate
structure. NovaStar intends to request a review of this determination and
will explore alternative arrangements for the listing or quoting of its
common and preferred stock. The company's securities are expected to
continue to trade on the NYSE pending review of the NYSE's determination.
There can be no assurances that the company will receive a favorable review
of the staff's determination or, if its securities are delisted from the
NYSE, that they will trade in another securities marketplace.
On September 17, 2007, NovaStar announced a decision not to declare a
dividend related to its 2006 taxable income, causing the company's status
as a Real Estate Investment Trust (REIT) to terminate, retroactive to
January 1, 2006. NovaStar now operates as a C corporation, and this change
in corporate structure requires the Company to satisfy the criteria for
original listing as a corporation. Given the current market capitalization
of NovaStar and other factors, the NYSE has advised the company that it
does not meet the original listing requirements for a corporation.
Under NYSE procedures, a listed company has the right to a review of a
staff determination by a Committee of the Board of Directors of NYSE. The
request for review must be filed in writing within 10 business days after
receiving the notice of the staff's determination. The company's
understanding is that a suspension date will be announced by the NYSE if
the company fails to properly request a review within the applicable 10-day
period, if the Committee's review upholds the staff's determination, or if
the Company is approved to begin trading in another securities marketplace.
The NYSE has indicated that it may, at any time, suspend a security if it
believes that continued dealings in the security on the NYSE are not
advisable.
About NovaStar
NovaStar Financial, Inc. (NYSE: NFI) is a specialty finance company
that focuses on single-family mortgage loans and mortgage-backed
securities. NovaStar is headquartered in Kansas City, Missouri.
For more information, please reference our website at
http://www.novastarmortgage.com.
This Press Release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
regarding management's beliefs, estimates, projections, and assumptions
with respect to, among other things, our future operations, business plans
and strategies, as well as industry and market conditions, all of which are
subject to change at any time without notice. Actual results and operations
for any future period may vary materially from those projected herein and
from past results. Some important factors that could cause actual results
to differ materially from those anticipated include: our ability to
consummate the sale of substantially all of our mortgage servicing rights
and servicing advances; our ability to continue the operation of our
mortgage servicing business pending the sale of substantially all of our
mortgage servicing rights and servicing advances; our ability to manage and
operate our business during this difficult period for the subprime
industry; our ability to effectively manage our portfolio and our brokering
business in light of recent changes to our business and the subprime
industry; our ability to continue as a "going concern"; the effect of our
inability to consummate our recently announced transactions with MassMutual
and Jefferies on our business; our ability to generate and maintain
sufficient liquidity on favorable terms or at all; the impact of the loss
of our REIT status as of January 1, 2006, on our financial statements,
liquidity and covenants under certain of our financing agreements; our
ability to obtain necessary waivers of, or amendments to, covenants
contained in our financing agreements; the impact of the sale of our
mortgage servicing rights and servicing advances on our financial
statements; our ability to recommence our wholesale business or expand our
retail business if market conditions improve; our ability to remain listed
on the NYSE; our ability to originate and sell loans at a profit and under
favorable terms, or at all, under the current circumstances; impairments on
our mortgage assets; increases in prepayment or default rates on our
mortgage assets; increases in loan repurchase requests; our ability to use
our net loss carryforwards and net unrealized built-in losses; changes in
the types of products we offer; inability of potential borrowers to meet
our underwriting guidelines; changes in assumptions regarding estimated
loan losses and fair value amounts; our ability to improve and maintain
effective internal control over financial reporting and disclosure controls
and procedures in the future; our ability to operate effectively with a
reduced workforce; finalization of the amount and terms of any severance
provided to terminated employees; finalization of the accounting impact of
our previously announced reductions in workforce; events impacting the
subprime mortgage industry in general, including events impacting our
competitors and liquidity available to the industry; the initiation of
margin calls under our credit facilities; the ability of our servicing
operations to maintain high performance standards and maintain appropriate
ratings from rating agencies; our ability to generate acceptable income
while maintaining an acceptable level of overhead; residential property
values; interest rate fluctuations on our assets that differ from our
liabilities; the outcome of litigation or regulatory actions pending
against us or other legal contingencies, including the outcome of the
previously disclosed California case; our compliance with applicable local,
state and federal laws and regulations or opinions of counsel relating
thereto and the impact of new local, state or federal legislation or
regulations or opinions of counsel relating thereto or court decisions on
our operations; our ability to adapt to and implement technological
changes; compliance with new accounting pronouncements; the impact of
general economic conditions; and the risks that are from time to time
included in our filings with the SEC, including our Annual Report on Form
10-K for the year ended December 31, 2006, our quarterly reports on Form
10-Q for the periods ending March 31, 2007, and June 30, 2007. Other
factors not presently identified may also cause actual results to differ.
Words such as "believe," "expect," "anticipate," "promise," "plan,"
"intend" and other expressions or words of similar meanings, as well as
future or conditional verbs such as "will," "would," "should," "could," or
"may" are generally intended to identify forward-looking statements. This
press release speaks only as of its date and we expressly disclaim any duty
to update the information herein.
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SOURCE NovaStar Financial, Inc.
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Related links:
http://www.novastarmortgage.com
CONTACT:
Media Relations, Richard M. Johnson,
+1-913-649-8885, or Investor Relations, Jeffrey A. Gentle,
+1-816-237-7424, both of NovaStar Financial, Inc.
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