Carlyle Capital Corporation (OOTC: CARYF) received a $1.45 billion dollar loan from
ING Group (NYSE:ING) in January according to a Dutch news site. The site found a reference to the loan in Carlyle Capital's annual report, but since the story has broke neither ING nor Carlyle have commented.
Carlyle Capital shares were suspended in trading on the Amsterdam Euronext stock exchange, where it is listed, on the news.
Carlyle Capital was floated from its parent, the private-equity firm Carlyle Group, just this last July. Washington, D.C.-based Carlyle Group has more than $74 billion in equity under its management. Founded in 1987, the firm became known for leveraged buyouts in the defense, automotive, and telecommunications sectors. Carlyle Capital was a branch designed to invest in mortgage backed securities using large amounts of leverage. Investing is such securities with leverage, combined with its distinction from Carlyle Group, meaning the parent is not responsible for its debts, immediately raised eyebrows.
It seems as though the fears have become reality as the subprime mortgage crisis has put Carlyle Capital on the brink. The only real financial connection Carlyle Group has to Carlyle Capital is a $150 million credit line, which presumably Carlyle Capital has already exhausted.
'The company believes these additional margin calls and increased collateral requirements could quickly deplete its liquidity and impair its capital,' Carlyle Capital released in a statement. It looks like Carlyle Capital's coming debacle will have to serve as another stern reminder of the seriousness of the remaining mortgage fallout. Only time will tell who's next.
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