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Carlyle Fund's Assets Seized
Leaders Fail to Stop Securities Sell-Off
By Thomas Heath
Washington Post Staff Writer
Thursday, March 13, 2008; Page D01
A publicly traded affiliate of the Carlyle Group said yesterday that lenders were seizing its assets, sending the fund, Carlyle Capital, into insolvency.
The collapse of Carlyle Capital is the first time a Carlyle Group fund has failed and is a stinging embarrassment for the District private-equity powerhouse, which has built an international reputation with a client list that reaches around the world.
The high-profile downfall, part of the broad turmoil in credit markets worldwide, followed a week of frantic negotiations between the Carlyle Group and a number of lenders. Carlyle Group's three founders as recently as Monday were considering injecting cash into the fund as a way to usher it through the credit crisis.
By yesterday the fund had defaulted on $16.6 billion of debt and said it expected to default soon on its remaining debt. The fund's $21.7 billion in assets were exclusively in AAA mortgage-backed securities issued by Fannie Mae and Freddie Mac, traditionally considered secure and conservative investments, which it was using as collateral against its loans.
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/13/AR2008031300061.html
Leaders Fail to Stop Securities Sell-Off
By Thomas Heath
Washington Post Staff Writer
Thursday, March 13, 2008; Page D01
A publicly traded affiliate of the Carlyle Group said yesterday that lenders were seizing its assets, sending the fund, Carlyle Capital, into insolvency.
The collapse of Carlyle Capital is the first time a Carlyle Group fund has failed and is a stinging embarrassment for the District private-equity powerhouse, which has built an international reputation with a client list that reaches around the world.
The high-profile downfall, part of the broad turmoil in credit markets worldwide, followed a week of frantic negotiations between the Carlyle Group and a number of lenders. Carlyle Group's three founders as recently as Monday were considering injecting cash into the fund as a way to usher it through the credit crisis.
By yesterday the fund had defaulted on $16.6 billion of debt and said it expected to default soon on its remaining debt. The fund's $21.7 billion in assets were exclusively in AAA mortgage-backed securities issued by Fannie Mae and Freddie Mac, traditionally considered secure and conservative investments, which it was using as collateral against its loans.
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/13/AR2008031300061.html