A unit of Massachusetts Mutual Life Insurance Company has joined with an investment bank to spend about $49 million on shares of NovaStar Financial Inc.
NovaStar, Kansas City, Mo., a company that manages subprime home loans, has suffered financial setbacks due to rising mortgage delinquencies.
Shares of NovaStar stock were selling for more than $30 throughout most of 2006. Since February, when news of rising delinquencies began attracting investor attention, the company’s shares have been selling for less than $10.
Under the financing agreement announced Monday, MassMutual Capital Partners L.L.C., a subsidiary of MassMutual, Springfield, Mass., teamed with a unit of Jefferies & Company Inc., New York, to invest in NovaStar convertible preferred stock.
Each firm will get convertible shares with a value of about $25 million, a MassMutual spokesman says.