SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

TMA (Cayman) L.P.

(Last)

(First)

(Middle)

520 MADISON AVENUE

(Street)

NEW YORK

10022

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
THORNBURG MORTGAGE INC [ TMA ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
12/23/2008

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock, par value $0.01 per share	12/23/2008		X⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾		112,268,405⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	A	⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	112,268,405⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	I	See footnotes⁽⁸⁾⁽⁹⁾⁽¹⁰⁾⁽¹¹⁾⁽¹²⁾⁽¹³⁾⁽¹⁴⁾
Common Stock, par value $0.01 per share	12/24/2008		J⁽⁸⁾⁽⁹⁾⁽¹⁰⁾⁽¹¹⁾⁽¹²⁾⁽¹³⁾⁽¹⁴⁾		112,268,405⁽⁸⁾⁽⁹⁾⁽¹⁰⁾⁽¹¹⁾⁽¹²⁾⁽¹³⁾⁽¹⁴⁾	D	$0⁽⁸⁾⁽⁹⁾⁽¹⁰⁾⁽¹¹⁾⁽¹²⁾⁽¹³⁾⁽¹⁴⁾	0⁽⁸⁾⁽⁹⁾⁽¹⁰⁾⁽¹¹⁾⁽¹²⁾⁽¹³⁾⁽¹⁴⁾	I	See footnotes⁽⁸⁾⁽⁹⁾⁽¹⁰⁾⁽¹¹⁾⁽¹²⁾⁽¹³⁾⁽¹⁴⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Class B Warrants	$0.01	12/23/2008		X⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾			119,285,180⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	11/26/2008	03/31/2015	Common Stock, par value $0.01 per share	119,285,180⁽¹⁾⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	0⁽²⁾⁽³⁾⁽⁴⁾⁽⁵⁾⁽⁶⁾⁽⁷⁾	I	see footnotes⁽⁸⁾⁽⁹⁾⁽¹⁰⁾⁽¹¹⁾⁽¹²⁾⁽¹³⁾⁽¹⁴⁾

1. Name and Address of Reporting Person^*

TMA (Cayman) L.P.

(Last)

(First)

(Middle)

520 MADISON AVENUE

(Street)

NEW YORK

10022

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

TMA Ltd.

(Last)

(First)

(Middle)

520 MADISON AVENUE

(Street)

NEW YORK

10022

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

Explanation of Responses:

1. All share figures contained in this Form 4 have been adjusted to reflect Thornburg Mortgage, Inc.'s (the "Issuer") one-for-ten reverse split of its common stock, par value $0.01 per share (the "Common Stock"), that was effected on September 26, 2008.

2. On March 31, 2008, the Issuer raised an aggregate of $1.15 billion from the sale of Senior Subordinated Secured Notes due 2015 ("Senior Subordinated Notes"), detachable Class B warrants exercisable for 16,860,705 shares of Common Stock ("Initial Warrants") and interests in the Principal Participation Agreement, dated March 31, 2008 ("Principal Participation Agreement"), in a private placement to qualified institutional buyers under Section 4(2) of the Securities Act of 1933, as amended, with MP TMA L.P. and MP TMA (Cayman) L.P. and their affiliates (collectively, "MatlinPatterson") as the lead investor. In addition, $200 million was originally placed in escrow by investors, of which approximately $11.4 million was withdrawn on June 30, 2008 (the "Escrowed Funds") and the Issuer placed detachable Class B Warrants exercisable into 2,932,336 shares of Common Stock (the "Escrowed Warrants") (prior to giving effect to any anti-dilution adjustments pursuant (cont'd)

3. (cont'd) to the Warrant Agreement dated as of March 31, 2008, among the Issuer and the warrantholders party thereto (the "Warrant Agreement")) in escrow with the Wilmington Trust Company on behalf of such purchasers. Pursuant to the Purchase Agreement (as defined below), for an aggregate purchase price of $475 million, (i) MP TMA L.P. and MP TMA (Cayman) L.P. acquired 5,365,882 and 1,598,303, respectively, of the 16,860,705 Initial Warrants (which have been fully exercised into shares of Common Stock), (ii) TMA Ltd., MP TMA L.P. and MP TMA (Cayman) L.P. acquired rights to receive certain additional warrants, including the Escrowed Warrants and the Additional Warrants (as defined below), as provided in the Purchase Agreement, (iii) TMA Ltd. received interests in the Principal Participation Agreement, and (iv) MP TMA L.P. and MP TMA (Cayman) L.P. acquired $475 million aggregate principal amount of Senior Subordinated Notes.

4. On October 1, 2008, due to failure to satisfy certain conditions in the Purchase Agreement, dated March 31, 2008 ("Purchase Agreement") on or prior to September 30, 2008, the remaining $188.6 million of Escrowed Funds was released to the escrow subscribers and, in connection with the release of the Escrowed Funds, the holders of the Senior Subordinated Notes became entitled to receive the Escrowed Warrants. MP TMA L.P. and MP TMA (Cayman) L.P. received 1,024,161 and 305,061 shares of Common Stock, respectively, upon the exercise of their Escrowed Warrants on November 19, 2008. The Escrowed Warrants were exercised at $0.01 per share of Common Stock received for an aggregate purchase price of $10,241.61 paid by MP TMA L.P. and $3,050.61 paid by MP TMA (Cayman) L.P. for the underlying shares of Common Stock.

5. On November 26, 2008, pursuant to the Purchase Agreement, the Issuer issued 276,519,943 detachable Class B Warrants exercisable for 276,519,943 (prior to giving effect to any anti-dilution adjustments pursuant to the Warrant Agreement) shares of Common Stock (the "Additional Warrants") to certain participants, with TMA Ltd. receiving 114,249,521 of such Additional Warrants. On December 18, 2008, pursuant to the Override Agreement dated March 17, 2008 between the Issuer and the other parties thereto (as amended, the "Override Agreement"), the Issuer issued warrants exercisable for 14,176,464 shares of Common Stock (the "Override Warrants") to the Counterparties (as defined in the Override Agreement, which definition does not include MatlinPatterson), resulting in an anti-dilution increase of 6,470,645 in the aggregate number of Additional Warrants outstanding. This anti-dilution adjustment was made on a pro-rata basis to all holders of Additional Warrants.

6. Taking into consideration the issuance of such anti-dilution Additional Warrants and the exercises of some of the Additional Warrants following November 24, 2008, a total of 153,277,110 Additional Warrants were outstanding following such anti-dilution adjustments. On December 23, 2008, TMA Ltd. exercised on a cashless basis the Additional Warrants it held, which were exercisable for 119,285,180 shares of Common Stock with a market value of $0.17 per share at an exercise price of $0.01 per share. Pursuant to such cashless exercise, TMA Ltd. received a net number of 112,268,405 shares of Common Stock.

7. The transactions above are collectively referred to herein as the "Financing Transaction." Each of the Purchase Agreement, the Warrant Agreement and the Escrow Agreement was filed as an exhibit to the Issuer's Current Report on Form 8-K/A dated April 4, 2008, and the amendments to each of the Purchase Agreement, the Warrant Agreement and the Escrow Agreement was filed as an exhibit to the Issuer's Current Report on Form 8-K on July 3, 2008. Each of these agreements is hereby incorporated herein by reference.

8. On December 23, 2008, TMA Ltd., prior to exercise, held a direct interest in Additional Warrants exercisable for 119,285,180 shares of Common Stock. After such cashless exercise, TMA Ltd. directly held a total of 112,268,405 shares of Common Stock. TMA (Cayman) L.P. held approximately 77.05 percent of the ownership interests in TMA Ltd. On December 24, 2008, TMA Ltd. distributed on a pro rata basis for no consideration all of its assets to its shareholders: TMA (Cayman) L.P. and MatlinPatterson Global Opportunities Partners (Cayman) III L.P. As a result, TMA (Cayman) L.P. became the direct owner of an additional 86,504,469 shares of Common Stock and MatlinPatterson Global Opportunities Partners (Cayman) III L.P. became the direct owner of an additional 25,765,936 shares of Common Stock (collectively, the "Additional Warrant Shares").

9. Subsequently, on December 24, 2008, (i) TMA Ltd. was dissolved, (ii) MatlinPatterson Global Opportunities Partners (Cayman) III L.P. contributed all of its Additional Warrant Shares to MP TMA (Cayman) L.P. in return for additional equity interests therein, (iii) TMA (Cayman) L.P. distributed all of its interest in the Additional Warrant Shares to TMA (Cayman) L.P.'s limited partners, (iv) TMA (Cayman) L.P.'s limited partners contributed all of their Additional Warrant Shares to MatlinPatterson Global Opportunities Partners III L.P. in return for additional equity interests therein, (v) TMA (Cayman) L.P. was dissolved and (vi) MatlinPatterson Global Opportunities Partners III L.P. contributed all of its Additional Warrant Shares to MP TMA L.P. in return for equity interests therein (collectively, the "Reorganization"). As a result of the Reorganization, TMA Ltd. and TMA (Cayman) L.P. ceased to be 10% owners of the Common Stock.

10. As of the date hereof, MP TMA L.P. was the direct owner of 92,892,512 shares of Common Stock and MP TMA (Cayman) L.P. was the direct owner of 27,669,300 shares of Common Stock. MatlinPatterson Global Opportunities Partners III L.P. holds 100 percent of the ownership interests in MP TMA L.P. MatlinPatterson Global Opportunities Partners (Cayman) III L.P. (together with MatlinPatterson Global Opportunities Partners III L.P., the "Funds") holds 100 percent of the ownership interests in MP TMA (Cayman) L.P. MatlinPatterson Global Partners III LLC is the general partner of each of the Funds, (cont'd)

11. (cont'd) MP TMA L.P. and MP TMA (Cayman) L.P. and, as a result, has the power to vote or to direct the vote, and to dispose or to direct the disposition, of the shares of Common Stock beneficially owned by MP TMA L.P. and MP TMA (Cayman) L.P. MatlinPatterson Global Advisers LLC (the "Adviser") is the investment adviser to the Funds and, as a result, has the power to vote or to direct the vote, and to dispose or to direct the disposition, of the shares of Common Stock beneficially owned by MP TMA L.P. and MP TMA (Cayman) L.P. MatlinPatterson Asset Management LLC holds 100 percent of the voting interest in and equity of the Adviser and holds 100 percent of the voting interest in MatlinPatterson Global Partners III LLC. MatlinPatterson LLC holds 100 percent of the equity of MatlinPatterson Asset Management LLC.

12. David J. Matlin and Mark R. Patterson serve as members of the board of directors of the Issuer pursuant to MatlinPatterson's rights to designate up to three directors to the board of directors of the Issuer if it meets certain ownership requirements. MatlinPatterson retains the right to designate a third director at any time during which it meets the relevant ownership requirement. David J. Matlin and Mark R. Patterson each is a holder of 50 percent of the membership interests in MatlinPatterson LLC.

13. They also may be deemed to have indirect pecuniary interests in the Common Stock held by MP TMA L.P. and MP TMA (Cayman) L.P. Their exact pecuniary interests therein are not readily determinable because they are subject to several variables, including without limitation, the internal rates of return of the Funds overall and with respect to their indirect investment in the Issuer. David J. Matlin and Mark R. Patterson disclaim beneficial ownership of any of the reported securities except to the extent of their pecuniary interests therein.

14. Each of MatlinPatterson Global Partners III LLC, the Adviser, MatlinPatterson Asset Management LLC, MatlinPatterson LLC, MatlinPatterson Global Opportunities Partners III L.P., MP TMA L.P., David J. Matlin and Mark R. Patterson have made separate filings pursuant to Section 16 of the Securities Exchange Act of 1934, as amended ("Section 16"). MatlinPatterson Global Opportunities Partners (Cayman) III L.P. and MP TMA (Cayman) L.P. are not required to file under Section 16.

	TMA (CAYMAN) L.P., By MATLINPATTERSON GLOBAL PARTNERS III LLC, its General Partner /s/ Lawrence M. Teitelbaum (Authorized Person)	12/24/2008
	TMA LTD. /s/ Lawrence M. Teitelbaum (Authorized Person)	12/24/2008
	** Signature of Reporting Person	Date
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