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December 4, 2008 3:48:27 PM CST

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As Margin Calls Mount, Carlyle Holds 'Crisis Talks'

Posted Mar 10, 08 12:40 PM CDT in Business 

(Newser) – The Carlyle Group is holding emergency talks with lenders to try to save its drowning Carlyle Capital division, the Washington Post reports. Creditors have decided that Carlyle’s portfolio of traditionally safe mortgage-backed securities holdings isn’t good enough in the current market, and they're demanding $400 million more in collateral. Some have declared Carlyle Capital in default and may have sold $5 billion in assets.

That $5 billion represents almost 25% of the subsidiary’s holdings. Carlyle Capital is asking for a “standstill agreement” to prevent further bleeding while talks are under way. It has also suspended trading on its stock, which fell 60% on Friday, to $5 a share. If a deal isn’t reached, the group will have to liquidate $16 billion in securities.

Sources: Washington Post, MarketWatch, Bloomberg

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Bruce Rosenblum, managing director, The Carlyle Group, testifies on Capitol Hill in this file photo. (AP Photo/Gerald Herbert)   (Associated Press)
Bruce Rosenblum, managing director, The Carlyle Group, right, testifies on Capitol Hill in this Tuesday, July 31, 2007 file photo. (AP Photo/Gerald Herbert)   (Associated Press)
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subprime crisis • housing crisis • credit market • private equity • mortgage backed securities • Carlyle Group • mortgage loans


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