Investment group Carlyle Capital Corp. today said its lenders have issued more than $400 million in margin calls, informed the company it is in default and sold mortgage-backed collateral as a result. In a statement, Carlyle Capital also said it is still negotiating with other lenders who hold $16 billion in securities that they may liquidate as well, if a mutually beneficial agreement is not reached.
Lenders have significantly reduced the amount they are willing to lend against the companys (Carlyle Capital) portfolio of U.S. government agency AAA-rated residential mortgage-backed securities, Carlyle said in its statement. Lenders have advised the company that they believe the company is in default under financing agreements. The company believes that certain lenders may have liquidated in the open market the collateral securing approximately $5 billion in indebtedness.
Carlyle Capital is an investment company managed by Carlyle Investment Management, a unit of the Carlyle Group. Carlyle Capital went public in July. Trading in its shares, which are listed on NYSE Euronext Amsterdam, was suspended on Friday.