Carlyle Capital in subprime crisis

10 March 2008

Carlyle Capital is currently in a deepening subprime crisis, it has been claimed.

The mortgage-bond fund owned by the Carlyle private equity group has said that lenders holding $16 billion in securities as collateral may be forced to sell if a repayment deal for this debt can not be agreed, the Times reports.

In a statement released this morning, the fund noted that lenders have issued over £400 million in margin calls and already liquidated $5 billion of debt.

"The company is in ongoing negotiations with the remaining lenders, who hold approximately $16 billion in securities and, if a mutually beneficial agreement is not reached, some of these lenders may also liquidate their securities," the statement read.

It added that the fund is now awaiting responses following its request for a standstill agreement while talks are ongoing.

Earlier this month, Carlyle Capital announced that the managers of the global offering of its class B shares had exercised in full the option to purchase an additional 2,394,400 of these shares from the company.

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