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CUSIP
No. 669947400
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1
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NAME
OF REPORTING PERSON
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S.S.
OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON
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Massachusetts
Mutual Life Insurance Company
I.R.S.
Identification No.
04-1590850
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2
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a)
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o
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(b)
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o
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3
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SEC
USE ONLY
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4
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SOURCE
OF FUNDS
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WC
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5
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
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Not
Applicable
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6
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CITIZENSHIP
OR PLACE OF ORGANIZATION
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Massachusetts
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7
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SOLE
VOTING POWER
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-0-
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8
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SHARED
VOTING POWER
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NUMBER
OF
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SHARES
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1,130,450
(1)(2)(4)
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BENEFICIALLY
OWNED
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9
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SOLE
DISPOSITIVE POWER
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BY
EACH REPORTING
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PERSON
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-0-
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WITH
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10
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SHARED
DISPOSITIVE POWER
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1,130,450
(1)(2)(4)
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11
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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1,130,450
(1)(2)(4)
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12
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
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Not
Applicable
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13
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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10.0%
(3)
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14
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TYPE
OF REPORTING PERSON
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CO
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(1) On
July 16, 2007, Massachusetts Mutual Life Insurance Company, a Massachusetts
corporation (“MassMutual”), entered into a Securities Purchase Agreement (the
“Securities Purchase Agreement”) with Jefferies Capital Partners IV L.P.,
Jefferies Employee Partners IV LLC, and JCP Partners IV LLC (collectively,
“Jefferies” and, together with MassMutual, the “Investors”) and NovaStar
Financial, Inc., a Maryland corporation (the “Company”) pursuant to which
MassMutual purchased 1,050,000 shares of the Company’s 9.00% Series D 1
Mandatory Convertible Preferred Stock, par value $0.01 per share (“Series D 1
Preferred Stock”). The shares of Series D 1 Preferred Stock purchased
by MassMutual under the Securities Purchase Agreement are initially convertible
into 937,500 shares of the Company’s common stock, par value $0.01 per share
(“Common Stock”).
(2) MassMutual
is the beneficial owner of two private investment partnerships which hold
in the
aggregate 192,950 shares of Common Stock. Babson Capital Management
LLC, a Delaware limited liability company (“Babson Capital”) acts as investment
adviser to the two private investment companies, and as such may also be
deemed
to be the beneficial owner of the 192,950 shares.
(3) Based
on 9,469,031 shares of Common Stock outstanding as of July 31, 2007, as
reported
in the Company’s Quarterly Report on Form 10-Q for the period ended June 30,
2007, plus 1,875,000 shares of Common Stock on an as-converted basis based
on
the 2,100,000 shares of Series D 1 Preferred Stock issued by the Company
pursuant to the Securities Purchase Agreement. The percentage that
appears in row 13 has been rounded up from 9.96% to the nearest tenth of
a
percent in accordance with the instruction to Rule 13d-101.
(4) Common
Stock share amounts have been adjusted to reflect the one-for-four reverse
stock
split effected by the Company on July 30, 2007.
This
Amendment No. 1 to Schedule 13D relating to the Company is being filed on
behalf
of the undersigned to amend the Schedule 13D filed with the Securities and
Exchange Commission on July 26, 2007 (the “Schedule
13D”). Capitalized terms not otherwise defined herein have the
meanings given them in the Schedule 13D.
Item
4.
Purpose of Transaction
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The
information in Item 4 is hereby
amended and supplemented as follows:
On
September 4, 2007, the Company
announced the cancellation of the Rights Offering. On September 17, 2007,
the
Company announced that it will not declare and pay the REIT
Dividend. As a result of the cancellation of the Rights Offering
and/or the failure by the Company to declare the REIT Dividend, MassMutual
will
not be required to purchase any shares of Series D 2 Preferred Stock as
previously contemplated by the Standby Purchase Agreement. In
addition, as a result of the Company’s failure to declare and pay the REIT
Dividend, MassMutual will not receive any shares of Series E Preferred Stock
that were previously contemplated to be distributed by the Company in connection
with the REIT Dividend.
Item
5.
Interest in Securities of the Issuer
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The
information in Item 5 is hereby
amended and supplemented as follows:
(a) On
July 30, 2007, the Company effected a one-for-four reverse stock split of
the
Common Stock. As of October 5, 2007, MassMutual was the holder of 1,050,000
shares of Series D 1 Preferred Stock. These shares of Series D 1
Preferred Stock are now convertible into an aggregate of 937,500 shares of
Common Stock, or approximately 8.3% of the Common Stock, based upon 9,469,031
shares of Common Stock outstanding as of July 31, 2007, as reported in the
Company’s Quarterly Report on Form 10-Q for the period ended June 30,
2007. In addition, as of October 5, 2007, certain affiliates of
MassMutual for which Babson Capital acts as investment adviser owned 192,950
shares of Common Stock, or approximately 1.7% of the Common Stock, based
upon
9,469,031 shares of Common Stock outstanding as of July 31, 2007, as reported
in
the Company’s Quarterly Report on Form 10-Q for the period ended June 30,
2007. As of October 5, 2007, MassMutual and Babson Capital may each
be deemed to have beneficially owned in the aggregate 1,130,450 shares of
Common
Stock, or approximately 9.96% of the Common Stock deemed issued and outstanding
as of that date.
(b) MassMutual
has shared power with Babson Capital to vote and dispose of 1,130,450 shares
of
Common Stock for which it is deemed the beneficial owner. Babson Capital
has
shared power with MassMutual to vote and dispose of 1,130,450 shares of Common
Stock for which it is deemed the beneficial owner.
Item
6.
Contracts, Arrangements, Understandings or Relationships With Respect
to
Securities of the Issuer
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The
information in Item 6 is hereby amended and supplemented as
follows:
On
September 4, 2007, the Company
announced the cancellation of the Rights Offering. On September 17, 2007,
the
Company announced that it will not declare and pay the REIT
Dividend. As a result of the cancellation of the Rights Offering
and/or the failure by the Company to declare the REIT Dividend, MassMutual
will
not be required to purchase any shares of Series D 2 Preferred Stock as
previously contemplated by the Standby Purchase Agreement. In
addition, as a result of the Company’s failure to declare and pay the REIT
Dividend, MassMutual will not receive any shares of Series E Preferred Stock
that were previously contemplated to be distributed by the Company in connection
with the REIT Dividend.
CUSIP
No. 669947400
Item
7.
Material to be Filed as Exhibits
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Exhibit
Number
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Description
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1
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Joint
Filing Agreement relating to Amendment No. 1 to Schedule 13D between
MassMutual and Babson Capital.
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CUSIP
No. 669947400
SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify
that
the information set forth in this statement is true, complete and
correct.
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October
9, 2007
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MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY
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By:
/s/ Rodney J. Dillman
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Name:
Rodney J. Dillman
Title:
Corporate Vice President and Associate General Counsel
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BABSON
CAPITAL MANAGEMENT LLC
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By:
/s/ Larry N. Port
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Name:
Larry N. Port
Title:
Managing Director
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