Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, March 13, 2007

NYSE Suspends Trading in New Century Financial Corp.

NYSE Regulation, Inc. announced today that it determined that trading in the common stock of New Century Financial Corp. (the “Company”)and its Preferred Stock should be suspended immediately.  The Company expects its common stock to be quoted on the Pink Sheets following suspension.  The NYSE has determined that the Company's common stock and preferred securities are no longer suitable for continued listing on the NYSE. In this regard, NYSE noted the disclosures included in Form 8-K filings on March 12 and March 13, 2007 with the Securities and Exchange Commission (“SEC”) that all of the Company’s lenders under its short-term repurchase agreements and aggregation credit facilities had discontinued their financing with the company or had notified the Company of their intent to do so.  Certain of these lenders had also purported to terminate the Company’s servicing rights under the respective financing arrangement.

The Company has received notices from certain of its lenders asserting that the Company and/or its subsidiaries have violated their respective obligations under certain of these financing arrangements and that such violations amount to events of default.  Certain of these lenders have further advised the Company that they are accelerating the Company’s obligation to repurchase all outstanding mortgage loans financed under the applicable agreements. The Company and its subsidiaries do not have sufficient liquidity to satisfy their outstanding repurchase obligations under the Company’s existing financing arrangements. In addition, the NYSE noted the overall uncertainty surrounding the Company’s previously announced restatement of its 2006 interim results and the delay in the completion of its current financial statement filing requirements with the SEC.

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