Friday March 7
Shares in the fund, a listed mortgage-bond fund managed by private equity firm the Carlyle Group, were suspended Friday. The stock closed down Thursday almost 60 percent at $5.00 on Euronext Amsterdam.
The fund said it was unable to meet margin calls from four banks Thursday, raising fears that its entire portfolio could be unwound.
Carlyle Capital leverages its $670 million equity 32 times to finance a $21.7 billion portfolio of residential mortgage-backed securities issued by U.S. housing agencies Freddie Mac and Fannie Mae.
To do this, it enters into repurchase agreements with banks, which involve posting the mortgage securities as collateral in exchange for cash.
The fund is managed by a unit of Washington D.C.-based Carlyle Group. It initially was launched as a private fund in 2006, then floated on Euronext Amsterdam in July.
Net asset value per share sank 30 percent last year, to $13.11 at Dec. 31 from $18.65 shortly before the listing. The stock had been offered at $19.
http://biz.yahoo.com/ap/080307/britain_carlyle_capital.html
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