PJC Journal :: Carlyle Capital Corporation go bust

Carlyle Capital Corporation go bust - US$16.6 BN ++++ down the tubes...more to follow

Postman Patel posted about the woes of Carlyle Capital Corporation last Friday, March 07, 2008 - Carlyle leads the way with Triple A mortage Fire Sales as margin calls cannot be met.

Now today they have issued notice that effectively they have gone bust - Carlyle Capital Corporation (CCC) Unable To Reach Agreement With Lenders; Lenders Likely to Take Possession of Remaining Assets Carlyle Capital Corporation Limited listed on Euronext Amsterdam ticker symbol: CCC; ISIN: GG00B1VYV826 it is a Guernsey investment company that was formed on August 29, 2006 and completed its initial offering in July 2007. Carlyle Investment Management L.L.C. (“CIM”) manages the Company pursuant to a management agreement. - CCC has not been able to reach a mutually beneficial agreement to stabilize its financing.

Which means they have run out of money.

The only assets held in the Company’s portfolio as of today are U.S. government agency AAA-rated residential mortgage-backed securities (RMBS). (There are of course avariety of views as to whether these actually represent assets - ie they have actually no tradeable value - like Lord Patel's 600 Vinyl LP's)

In the last week Company received margin (and could not meet margin calls of more than US$400 million.

Unable to meet them the lenders proceeded to foreclose on the RMBS collateral.

Beware - adjust your clothing before reading the next sentence.

In total, by last night, the Company has defaulted on approximately $16.6 billion of its indebtedness. The remaining indebtedness (?) is expected soon to go into default.

Today we expect margin calls tomorrow of approximately US$97.5 million.

CCC IPO'd last July at US$ 20 a share , today they are worthless. Carlyle Gropup are said to own 15% of CC .Says something about the management skills of Carlyle Investment Management L.L.C.

According to CCC's annual report, counterparties for its repurchasing agreements as of the end of 2007 (ie the folks who are left holding those wonderful AAA-rated residential mortgage-backed securities (RMBS)) were Bank of America, Bear Stearns, BNP Paribas, Calyon, Citigroup, Credit Suisse, Deutsche Bank, ING, JP Morgan, Lehman Brothers, Merrill Lynch and UBS.

Now we all know how many friends in Government the Carlyle groups has, so can we expect the ever vigilant Chancellor Darling to begin nationalisation talks......oops, forgot...there's no money left in the Treasury.....

Carlyle Capital was formed in August 2006. It is managed by Carlyle Investment Management LLC, which is an affiliate of Carlyle Group. Carlyle Capital invests in various things, such as residential mortgage-backed securities and asset-backed securities.

Carlyle Group said in a statement on Thursday that Carlyle Capital "is a separate legal and business entity, and we believe it will not have a measurable impact on any of our other funds, investments and portfolio companies."

Carlyle Capital's "defaults under its repurchase agreements with its lenders do not trigger cross-defaults for any borrowings by the Carlyle Group, any of its other investment funds or any of The Carlyle Group's portfolio companies," the statement read.

Dont know anything about the Carlyle Group.

The Carlyle Group is a private investment bank which doesn't come to the public's attention very often but it is one of the biggest American (ed: USA) investors of the defence industry, Telecom, property and financial services. On their payroll are people like : George Bush (Sr.), James Baker III and old premier John Major.
See more at the Information Clearing House.