International Herald Tribune- Carlyle Group’s mortgage-bond fund said creditors may liquidate as much as $16 billion of securities unless the two sides reach agreement on debt repayments.
The fund has asked lenders to refrain from further sales after they liquidated collateral securing $5 billion of debt, Carlyle Capital Corp. said in a statement Monday. It is meeting lenders to discuss more than $400 million of margin calls and is "evaluating all options," the fund, which is based in Guernsey, Britain, said.
Carlyle Capital used loans to buy about $22 billion of AAA rated mortgage debt issued by Fannie Mae and Freddie Mac, which the firm says have an "implied guarantee" from the U.S. government. Even those bonds have slumped following the collapse of the subprime-mortgage market, leading to the failure of hedge funds led by Peloton Partners.
