American Home Mortgage Reopens For Trading, Under $2.00 (AHM)

American Home Mortgage (NYSE:AHM) has finally repoened after being closed for a day and a half.  Indications were going around the street have been noted as lows as an implied $1.00 to $2.50, but shares are under $2.00… Shares were halted all of Monday, but it had traded down 45% in pre-market activity yesterday morning after the news release.

Yesterday the shares were halted because it said that margin calls were going to prevent it from being able to pay a dividend.  Today the news is that the secondary mortgage market disruption and credit risk concerns are preventing it from being able to borrow.

The Company said it has received and paid very significant margin calls in the last three weeks and has substantial unpaid margin calls pending.  American Home saidf it is now unable to borrow on its credit facilities and was unable to fund its lending obligations yesterday of approximately $300 million. It does not anticipate funding approximately $450 to $500 million today.  It also retained Milestone Advisors and Lazard to assist in evaluating its strategic options and advising with respect to the sourcing of additional liquidity including the orderly liquidation of its assets.

Yesterday we even noted how this may bury the company, but you never know who may step up to the plate.  It wouldn’t be too much of a shock if the company gets an NYSE delisting notice soon.  Subprime woes continue, and then some.

Jon C. Ogg
July 31, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.