Carlyle's shares suspended by watchdog

7 March 2008

Carlyle Capital Corporation's shares have been suspended by the Dutch stock markets watchdog AFM after the firm received substantial margin calls and default notices from its creditors.

Since filing its annual report at the end of February, investment firm Carlyle had been subject to margin calls and additional collateral requirements of more than $60 million.

But on March 5th seven more parties asked it to produce capital of more than $37 million in total, only three of which it was able to satisfy.

One of the four financing parties whose margin calls were frustrated issued a default notice and another is expected to be posted shortly.

John Stomber, chief executive officer of Carlyle, said: "The last few days have created a market environment where the repo counterparties' margin prices for our AAA-rated US government agency floating rate capped securities issued by Fannie Mae and Freddie Mac are not representative of the underlying recoverable value of these securities.

"Unfortunately, this disconnect has created instability and variability in our repo financing arrangements. Management is actively working with the company's repo counterparties to develop more stable financing terms."

Shares in Carlyle Capital were suspended in the Netherlands after dropping 58 per cent of their value to reach a low of $5.

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