Carlyle Capital Corp.s debt renegotiation talks with lenders collapsed and debtors are liquidating its remaining assets, all U.S. government agency AAA-rated residential mortgage-backed securities, according to a statement today from Carlyle Capital.
The statement said Carlyle Capital has not been able to reach a mutually beneficial agreement to stabilize its financing, and that it expects that its lenders will promptly take possession of substantially all of the companys remaining assets.
The investment company, a subsidiary of the Carlyle Group, also said it failed to meet $400 million in margin calls and that its lenders proceeded to foreclose on the RMBS collateral. In total, through March 12, the company has defaulted on approximately $16.6 billion of its indebtedness. The remaining indebtedness is expected soon to go into default.
The debt talks collapsed due to a drop in the value of its RMBS collateral, which will trigger another $97.5 million margin call, according to the statement. Carlyle Capital went public on NYSE Euronext Amsterdam in July 2007 at $19 a share and last traded at 80 cents.
Carlyle Group had extended its subsidiary a $150 million subordinated line of credit and tried to negotiate financing to help Carlyle Capital keep part of its portfolio, Carlyle Group executives said in a statement today. The line of credit was extended by the Carlyle Groups general partners; neither its 59 investment funds nor portfolio companies are invested in Carlyle Capital, according to Carlyle Group.
Since Carlyle Capital is a separate legal and business entity, we believe it will not have a measurable impact on any of our other funds, investments and portfolio companies, the statement noted.