Carrington Seeks Share Sale To Pay Off Debt

Mar 24 2008 | 8:03am ET

With financing for hedge funds drying up, one London mortgage shop is looking to tap a new “lender”: its clients.

Carrington Capital Management is asking investors to buy as much as US$200 million in new preferred shares, which will pay an 18% interest rate. The firm said it wants to replace US$161 million in short-term repurchase financing with the newly-raised capital, the Financial Times reports.

“While our relationships with our remaining counterparties, Citigroup and JPMorgan, are good, we continue to be wary of any remaining balance of short-term borrowings from an aggressively delivering dealer community,” Carrington, which missed a planned repayment last year, wrote investors. “We still view repo and mark-to-market financing as a lingering risk.”

Carrington, which manages US$1 billion, has already suspended redemptions in an effort to pay off debt.

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