Carlyle Capital Going Under

Carlyle Capital Corporation Limited today announced that, although it has been working diligently with its lenders, the Company has not been able to reach a mutually beneficial agreement to stabilize its financing. The Company expects that its lenders will promptly take possession of substantially all of the Company’s remaining assets.

…….

Overall, it has become apparent to the Company that the basis on which lenders are willing to provide financing against the Company’s collateral has changed so substantially that a successful refinancing is not possible.

– Carlyle Capital Statement (subscription required – bold and italics added)

A couple things. 

First, Carlyle Capital’s entire $21 billion portfolio is made up of AAA mortgage backed securities guaranteed by Fannie Mae and Freddie Mac. 

Two, and on the other hand, they were extremely leveraged with only $670 million in equity on its $21.7 billion portfolio (“Carlye Capital Nears Collapse As Accord Can’t Be Reached” (subscription required), The Wall Street Journal, Thursday March 13, C2).