Lenders Balk At Refinancing Carlyle Capital

Mar 13 2008 | 10:43am ET

The end is near for Carlyle Capital Corporation. The mortgage hedge fund yesterday said that although it has been working diligently with its lenders, it has not been able to reach a “mutually beneficial agreement” to stabilize its financing. 

Therefore, it expects that its lenders will promptly take possession of almost all of the Company’s remaining assets, which are U.S. government agency AAA-rated residential mortgage-backed securities.

During the past week, Carlyle received margin calls in excess of $400 million and in total, through March 12, the Carlyle Group affiliate has defaulted on approximately $16.6 billion.

The hedge fund’s parent pumped in $250 million in credit and loan facilities and was prepared to provide substantial additional capital if the fund could successfully refinance with its lenders. But the fund said negotiations deteriorated late yesterday when, among other things, the pricing service utilized by certain lenders reported a drop in the value of the RMBS collateral, which is expected to result in additional margin calls today of approximately $97.5 million.

“Overall, it has become apparent…that the basis on which lenders are willing to provide financing against the company’s collateral has changed so substantially that a successful refinancing is not possible,” according to the firm.

Carlyle Group management has a 15% stake in the hedge fund.


In Depth

Steinbrugge: Top 10 Hedge Fund Industry Trends for 2017

Jan 3 2017 | 9:03pm ET

Each year, Agecroft Partners' Don Steinbrugge predicts the top hedge fund industry...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

Securities and Exchange Commission Chair Mary Jo White will step down as chair of the nation’s Wall Street overseer in January, setting the stage for a potential conservative shift in the regulator’s leadership under the incoming Donald Trump administration.