Is Thornburg Mortgage Common Really Worth $3.88B?

Thornburg Mortgage (TMA) announced on March 31 completion of a new debt offering for $1.35 billion, which includes warrants to buy some 2.75 billion new common shares at 0.01/share; 47 million additional warrants issued to repo lenders and some 155 million more warrants to be issued to preferred shareholders, all with 0.01 exercise price. <!--more-->The bulk of the new warrants are tied to shareholder approval of an increase in total shares and buy back of the preferred at $5/ share. If either of these do not occur, debt interest rate stays at 18% and the debt holders get the benefit of a 7 year participation agreement that is structured as a strangle hold and essentially guarantees that any remaining capital will be paid to the debt holders and the company will be bankrupt.