The mortgage lender is in the process of completing a plan announced in March to recapitalize the company.

Thornburg said it is in negotiations with counterparties to amend an agreement tied to the recapitalization so it can pay the $12.2 million interest on the 8 percent senior notes.

Thornburg was among the hardest hit mortgage lenders by the downturn in mortgage and credit markets over the past year and a half. Not only has mortgage lending volume declined, Thornburg has been forced to drastically reduce the value of its investments in mortgage securities as investors have shied away from purchasing all but the safest forms of debt.

Losses tied to write-downs on its mortgage-backed bonds led to margin calls in 2007 and again early in 2008. In turn, Thornburg was forced to look for new ways to raise capital and reached an agreement with MatlinPatterson to recapitalize the company and raise $1.35 billion.