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.

In addition, the firms have agreed to buy any unsold shares left over from NovaStar’s forthcoming offering of about $101 million in convertible preferred stock.

MassMutual and Jefferies each will get a seat on NovaStar’s board of directors. The total number of directors will expand to 8, from 6.

MassMutual and Jefferies each may get another director on the NovaStar board, depending on the ultimate value of each firm’s stake in NovaStar.

The share purchase “fits our focus on strategically investing in business opportunities, particularly in the financial services industry, where we have significant experience and expertise,” says MassMutual Capital President Larry Port. “We view NovaStar as a well-managed company with long-term potential.”