NYSE moves to delist NovaStar shares

NEW YORK, Oct 17 (Reuters) - NYSE Regulation Inc said on Wednesday it was taking steps to delist shares of NovaStar Financial Inc NFI.N, citing the troubled mortgage lender's decision to not pay a dividend related to its 2006 taxable income, a move that would end its REIT status.

NYSE Regulation said the move affects NovaStar’s common shares as well as its 8.90 percent Series C Cumulative Redeemable Preferred Stock. Both securities will continue to trade on the New York Stock Exchange until its regulation arm announces a suspension date.

NovaStar said earlier Wednesday it would not declare a dividend on 2006 taxable income. That decision will cause the lender’s tax-advantage status as a real estate investment trust to be terminated, retroactive to Jan. 1, 2006, NYSE Regulation said.

The lender “does not meet original listing standards as a result of this action.” NovaStar can appeal the decision to a committee of NYSE Regulation’s board of directors. (Reporting by Joseph A. Giannone)