Carlyle Capital margin calls reach $400 million as lender talks continue

By Angela McDaniels

Tacoma, Wash., March 10 - Carlyle Capital Corp. Ltd.'s lenders have issued more than $400 million of margin calls, and the company believes that some lenders may have liquidated collateral securing $5 billion of debt.

Carlyle said it continues to discuss its financing situation with its lenders, who hold $16 billion in securities. If a mutually beneficial agreement is not reached, the company warned, some of these lenders may also liquidate their securities.

While these talks continue, the company has requested a standstill agreement aimed at preventing its lenders from foreclosing and liquidating their collateral. Carlyle is waiting for responses, according to a company news release.

Last week, the company received one notice of default in connection with its inability to meet four of seven margin calls received on March 5 from repo financing counterparties and began discussions with its lenders after receiving additional margin calls and default notices.

As previously reported, Carlyle said the additional margin calls and increased collateral requirements could quickly deplete its liquidity and impair its capital.

According to a previous news release, there has been a rapid and severe deterioration in the market for U.S. government agency AAA-rated residential mortgage-backed securities in recent days.

Based on the weakened market, several of Carlyle's lenders marked down the value of its RMBS securities and informed the company that they would increase their collateral requirements.

The company said its management is closely monitoring the situation and considering all available options.

Carlyle Capital is a Guernsey investment company managed by Carlyle Group affiliate Carlyle Investment Management LLC.

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