Luminent Mortgage (LUM) Raises Money and Repays Debts

October 2, 2007 7:48 AM EDT

Luminent Mortgage (NYSE: LUM) said after the close on Monday that it repaid much of its debt, limiting the risk that it will run out of cash. The Company has also entered into an amended definitive credit agreement with Arco Capital Corporation, providing the Company with a revolving liquidity line of credit of up to $60 million to be used to stabilize existing repurchase agreements, to meet financing maturities and to provide working capital.

Jay Johnston, CEO of Arco, said, "We at Arco are impressed with the ability of the Company to navigate through the difficult events of the past months, including the precipitous decline in prime asset valuations, all while negotiating a new infusion of capital into the Company. Luminent's progress speaks to the strength of CEO Trez Moore and his management team.

Deutsche Bank raised its price target on Luminent to $2.25 from $1.50. While the price target is still discounted to the value of the company's assets, the smaller discount is now warranted because Luminent's balance sheet is safer.

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