Irvine-based subprime lender New Century Financial Corp. saw trading of its plummeting stock suspended on Monday, as the company said its lenders have or plan to halt financing.
A number of New Century’s largest lenders have notified the company that it is in default with its financing agreements, the company said.
New Century could be forced to repurchase as much as $8.4 billion in loans, if all of its lenders were to press obligations to buy back outstanding loans.
The development is likely to push the embattled lender closer to bankruptcy.
“The company and its subsidiaries do not have sufficient liquidity to satisfy their outstanding repurchase obligations under the company’s existing financing arrangements,” New Century said in a filing with the Securities and Exchange Commission Monday.
The company’s shares were trading at $3.21 at the close of the market on Friday. That’s down more than 90% since February.
Shares fell another 40%, to $1.92, in premarket trading.
