Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 7, 2007
Date of Report (Date of earliest event reported)
NOVASTAR FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Maryland 001-13533 74-2830661
---------------------------------- ------------------ ---------------------
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
8140 Ward Parkway, Suite 300, Kansas City, MO 64114
---------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(816) 237-7000
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
Item 1.01 Entry into a Material Definitive Agreement
On September 7, 2007, Wachovia Bank, National Association ("Wachovia"), NFI
Repurchase Corporation ("NRC"), HomeView Lending, Inc. ("HLI"), NMI Property
Financing, Inc. ("NPF"), NovaStar Financial, Inc. ("NFI"), NovaStar Mortgage,
Inc. ("NMI") and NFI Holding Corporation ("NHC"), executed Amendment Number One
to the Master Repurchase Agreement (2007 Whole Loan), dated as of May 9, 2007
(the "Whole Loan Amendment"), Wachovia, Wachovia Capital Markets, LLC ("WCM"),
NMI, NovaStar Certificates Financing LLC ("NCF"), NovaStar Certificates
Financing Corporation ("NCFC"), NFI and NHC, executed Amendment Number One to
the Master Repurchase Agreement (Investment Grade Securities), dated as of May
31, 2007 (the "Investment Securities Amendment"), Wachovia Investment Holdings,
LLC ("WIH"), WCM, NMI, NCF, NCFC, NFI and NHC, executed Amendment Number One to
the Master Repurchase Agreement (Non-Investment Grade Securities), dated as of
May 31, 2007 (the "Non-Investment Securities Amendment"), Wachovia, WCM, NMI,
NFI, NHC and HLI, executed Amendment Number Two to the Master Repurchase
Agreement (2007 Servicing Rights), dated as of April 25, 2007 (the "Servicing
Rights Amendment"), and WIH, WCM, NMI, NCF and NCFC executed Amendment Number
Two to the Master Repurchase Agreement (Residual Securities), dated as of April
18, 2007 (the "Residual Securities Amendment" and together with the Whole Loan
Amendment, Investment Securities Amendment, Non-Investment Securities Amendment
and Servicing Rights Amendment, the "Amendments").
Under the Amendments, the adjusted tangible net worth to required equity ratio
requirements are eliminated and the amount of adjusted consolidated tangible net
worth that NFI is required to maintain is decreased from $517 million to $150
million.
The Servicing Rights Amendment changes the minimum required servicer ratings to
SQ4 (Moody's), "Average" (S&P) and RPS4 (Fitch).
In addition, the Servicing Rights Amendment and Whole Loan Amendment allow
Wachovia at any time and for any reason the right to appoint a back-up servicer
to service some or all of the securitization deals and loans currently serviced
by NFI.
In addition to the financing agreements listed above, Wachovia and certain of
its affiliates routinely engage in other ordinary course financial transactions
with NFI and its affiliates, including but not limited to acting as an
underwriter for certain securitizations sponsored by NFI.
The foregoing is a summary of the terms of the Amendments. This summary is
qualified in its entirety by reference to the full text of the Amendments, which
are attached hereto as Exhibit 10.1, 10.2, 10.3, 10.4 and 10.5, respectively,
and are incorporated herein by reference.
2
Item 9.01 Financial Statement and Exhibits
(d) Exhibits.
Exhibit No. Document
10.1 Amendment Number One, dated as of September 7, 2007, to the
Master Repurchase Agreement (2007 Whole Loan), dated as of
May 9, 2007, between Wachovia, NRC, HLI, NPF, NFI, NMI and
NHC.
10.2 Amendment Number One, dated as of September 7, 2007, to the
Master Repurchase Agreement (Investment Grade Securities),
dated as of May 31, 2007, between Wachovia, WCM, NMI, NCF,
NCFC, NFI and NHC.
10.3 Amendment Number One, dated as of September 7, 2007, to the
Master Repurchase Agreement (Non-Investment Grade
Securities), dated as of May 31, 2007, between WIH, WCM,
NMI, NCF, NCFC, NFI and NHC.
10.4 Amendment Number Two, dated as of September 7, 2007, to the
Master Repurchase Agreement (2007 Servicing Rights), dated
as of April 25, 2007, between Wachovia, WCM, NMI, NFI, NHC
and HLI.
10.5 Amendment Number Two, dated as of September 7, 2007, to the
Master Repurchase Agreement (Residual Securities), dated as
of April 18, 2007, between WIH, WCM, NMI, NCF and NCFC.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NOVASTAR FINANCIAL, INC.
DATE: September 12, 2007 /s/ GREGORY S. METZ
-----------------------------------------
Gregory S. Metz
Chief Financial Officer
4
Index to Exhibits
Exhibit No. Document
10.1 Amendment Number One, dated as of September 7, 2007, to the
Master Repurchase Agreement (2007 Whole Loan), dated as of
May 9, 2007, between Wachovia, NRC, HLI, NPF, NFI, NMI and
NHC.
10.2 Amendment Number One, dated as of September 7, 2007, to the
Master Repurchase Agreement (Investment Grade Securities),
dated as of May 31, 2007, between Wachovia, WCM, NMI, NCF,
NCFC, NFI and NHC.
10.3 Amendment Number One, dated as of September 7, 2007, to the
Master Repurchase Agreement (Non-Investment Grade
Securities), dated as of May 31, 2007, between WIH, WCM,
NMI, NCF, NCFC, NFI and NHC.
10.4 Amendment Number Two, dated as of September 7, 2007, to the
Master Repurchase Agreement (2007 Servicing Rights), dated
as of April 25, 2007, between Wachovia, WCM, NMI, NFI, NHC
and HLI.
10.5 Amendment Number Two, dated as of September 7, 2007, to the
Master Repurchase Agreement (Residual Securities), dated as
of April 18, 2007, between WIH, WCM, NMI, NCF and NCFC.