"Going forward, it gives Thornburg a bit of working capital, but the model of business is still under pressure," said Bose George, an analyst at Keefe, Bruyette & Woods Inc.

The capital raising efforts, coupled with recent Federal Reserve actions to help improve liquidity in the credit markets, could provide some stability to Thornburg, George said. But those benefits could be offset by the company's corporate structure as a real estate investment trust and continued weakness in the mortgage securities market, he added.

REITs are required to pay out 90 percent of profits to shareholders.

Thornburg could be forced into a run-off scenario because of its REIT status and the weak market, George said. That would entail Thornburg no longer originating new loans or purchasing new securities. Instead it would only collect payments on securities currently in its portfolio.

The private placement of senior subordinated notes will carry an initial interest rate of 18 percent, which can be reduced to 12 percent depending on certain requirements. The requirements were not disclosed.

Thornburg will also offer the investors in the new debt an option to purchase future shares of common stock for 1 cent per share. The exact number of new shares offered to the investors will be determined based on the number of shares outstanding at the time of the offer, but will equal about 48 percent of all outstanding shares at the time.

The dilution of stock makes the current shareholders' equity worth nearly nothing, George said, though he added there were no real alternatives.

"If the deal doesn't go through, lenders will liquidate the company, so shareholders presumably would end up with nothing," he said.

Tuesday's deal replaces a previous plan whereby Thornburg tried to raise about $1 billion in convertible notes with an interest rate of 12 percent. That offering was unsuccessful.

Facing potential bankruptcy, Thornburg raised the money to help alleviate margin calls and demands for more collateral from its creditors. Thornburg's creditors agreed to suspend any future margin calls for about a year if the company raises $948 million by Thursday.

Had Thornburg faced more demands from its creditors, it's unlikely it would have been able to stay in business.

In early March, Thornburg disclosed it has faced nearly $1.8 billion in margin calls since the beginning of the year. The lender said it was unable to meet $610 million in calls, which led it to look for new ways to raise capital.

Thornburg faced a similar round of margin calls in August, but was able to meet them.

As delinquencies and defaults across certain types of mortgages have risen, investors have shied away from purchasing nearly all types of loans in the secondary market.

The thin market for debt backed by mortgages has caused prices to plummet. As those prices fell, companies like Thornburg have been forced to reduce the value of their holdings, regardless of actual performance. Those declining prices also have lenders making margin calls.

Thornburg is seeking a waiver from the New York Stock Exchange to complete the deal without shareholder approval in an attempt to ensure it meets the creditors' deadline.

Shares of Thornburg rose 46 cents, or 36.4 percent to close at $1.73.