UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
(Rule
13d-101)
_________
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INFORMATION
TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT
TO
RULE
13d-2(a)
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NovaStar
Financial, Inc.
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(Name
of Issuer)
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Common
Stock ($0.01 par value per share)
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(Title
of Class of Securities)
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669947400
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(CUSIP
Number)
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Rodney
J. Dillman
Massachusetts
Mutual Life Insurance Company
1295
State Street
Springfield,
Massachusetts 01111
(800)
767-1000
|
with
a copy to:
Larry
A. Barden, Esq.
Sidley
Austin LLP
1
South Dearborn
Chicago,
Illinois 60603
(312)
853-7000
|
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
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July
16, 2007
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(Date
of Event which Requires Filing of this Statement)
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If
the filing person has previously filed a statement on Schedule 13G
to
report the acquisition that is the subject of this Schedule
13D, and is filing
this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
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Note: Schedules
filed in paper format shall include a signed original and five copies
of
the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
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(Continued
on following pages)
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1
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NAME
OF REPORTING PERSONS
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Massachusetts
Mutual Life Insurance Company
I.R.S.
Identification No. 04-1590850
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2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
¨
(b)
¨
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3
|
SEC
USE ONLY
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4
|
SOURCE
OF FUNDS
WC
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5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT
TO
ITEM 2(d) or 2(e)
|
Not
Applicable
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6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Massachusetts
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NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE
VOTING POWER
0
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8
|
SHARED
VOTING POWER
4,521,800
(1)(2)
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9
|
SOLE
DISPOSITIVE POWER
0
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||||
10
|
SHARED
DISPOSITIVE POWER
4,521,800
(1)(2)
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11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,521,800
(1)(2)
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12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|
Not
Applicable
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|||
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW
(11) –
10.0%
(3)
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14
|
TYPE
OF REPORTING PERSON
CO
|
1
|
NAME
OF REPORTING PERSONS
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Babson
Capital Management LLC
I.R.S.
Identification No. 51-0504477
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2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a)
¨
(b)
¨
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|||
3
|
SEC
USE ONLY
|
||||
4
|
SOURCE
OF FUNDS
WC
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||||
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT
TO
ITEM 2(d) or 2(e)
|
Not
Applicable
|
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6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware
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||||
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE
VOTING POWER
0
|
|||
8
|
SHARED
VOTING POWER
4,521,800
(1)
|
||||
9
|
SOLE
DISPOSITIVE POWER
0
|
||||
10
|
SHARED
DISPOSITIVE POWER
4,521,800
(1)
|
||||
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,521,800
(1)
|
||||
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|
Not
Applicable
|
|||
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW
(11) –
10.0%
(2)
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14
|
TYPE
OF REPORTING PERSON
IA
|
|
1
|
Joint
Filing Agreement between MassMutual and Babson
Capital.
|
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2
|
Securities
Purchase Agreement dated as of July 16, 2007, by and among
NovaStar
Financial, Inc., Massachusetts Mutual Life Insurance Company,
Jefferies
Capital Partners IV L.P., Jefferies Employee Partners IV LLC,
and JCP
Partners IV LLC, incorporated by reference to Exhibit 10.1
to the Current
Report on Form 8-K, dated July 20, 2007, as filed by NovaStar
Financial,
Inc. with the Securities and Exchange Commission on July 20,
2007.
|
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3
|
Articles
Supplementary 9.00% Series D 1 Mandatory Convertible Preferred
Stock (Par
Value $0.01 Per Share), incorporated by reference to Exhibit
4.1 to the
Current Report on Form 8-K, dated July 20, 2007, as filed by
NovaStar
Financial, Inc. with the Securities and Exchange Commission
on July 20,
2007.
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4
|
Standby
Purchase Agreement, dated as of July 16, 2007, by and among
NovaStar
Financial, Inc., Massachusetts Mutual Life Insurance Company,
Jefferies
Capital Partners IV L.P., Jefferies Employee Partners IV LLC,
and JCP
Partners IV LLC, incorporated by reference to Exhibit 10.2
to the Current
Report on Form 8-K, dated July 16, 2007, as filed by NovaStar
Financial,
Inc. with the Securities and Exchange Commission on July 20,
2007.
|
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5
|
Registration
Rights and Shareholders Agreement, dated as of July 16, 2007,
by and among
NovaStar Financial, Inc., Massachusetts Mutual Life Insurance
Company,
Jefferies Capital Partners IV L.P., Jefferies Employee Partners
IV LLC,
and JCP Partners IV LLC, incorporated by reference to Exhibit
10.3 to the
Current Report on Form 8-K, dated July 16, 2007, as filed by
NovaStar
Financial, Inc. with the Securities and Exchange Commission
on July 20,
2007.
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July
25, 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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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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