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

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR