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

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…