Skip to main content

Carlyle Capital, the mortgage debt investment fund of the Carlyle Group (where Bush Sr. and James Baker were top advisers and presumably still large shareholders) is getting hammered by margin calls. Banks that have loaned them money are calling in their debts and the fund is struggling to stave off liquidation of all of its assets.

From the NYT

The Carlyle Group’s troubled mortgage-debt investment fund, Carlyle Capital, said on Monday that it had asked lenders to halt further liquidation of collateral worth as much as $16 billion while the two sides discuss ways to repay debt.

The fund, which invests mainly in triple-A rated mortgage securities issued by Fannie Mae and Freddie Mac, has received $400 million in margin calls, and some of its lenders started to liquidate collateral for $5 billion of debt. Banks are asking for their money back amid concerns the economic climate may deteriorate further.

The Carlyle fund said on Monday that it "requested a standstill agreement whereby its lenders would refrain from foreclosing and liquidating their collateral, and we are awaiting responses."

The Carlyle fund just went public last summer and the Carlyle Group got a huge cash infusion from Abu Dhabi last fall.

Perhaps they'll have to sell their copy of the Magna Carta.

Somehow, I think Carlyle will come out a lot better than a few million homeowners who got caught up in the subprime mess.  What backroom deals will be cut to save Carlyle? We will probably never know but this is certainly a story to watch.  I'm trying to keep the schadenfreude to a minimum, given the seriousness of the mortgage crisis but it's kind of nice to see the piper being paid by such a nice bunch of sharks.

Originally posted to Blue Intrigue on Mon Mar 10, 2008 at 10:17 AM PDT.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site