Carlyle Capital on the Ropes - " substantial margin calls" & "default notices" to them!

[autorank]

The world is truly turning upside down. Carlyle Capital has been the insiders firm for almost
three of decades. Through a mix of high leverage through retired Prime Ministers and such and
aggressive tactics, this group has been a big money maker. Now they can't even meet a margin call.
AND they're not suffering due to the sub prime collapse. They're not invested in that "product."

What's going on? What will Tony Blair do when he doesn't get offered a huge pay check from these
characters?

Bush family private equity fund in deep trouble as Financial Tsunami rolls on

By F. William Engdahl

URL of this article: www.globalresearch.ca/index.php?context=va&aid=8295

Global Research, March 10, 2008

Carlyle Capital Corp. Ltd., a subsidiary of one of the most influential USA private equity funds and closely tied to the Bush family, is in default on several of its securities. Carlyle is an offshore subsidiary of the Washington-based Carlyle Group, one of the most politically powerful private equity firms of the past two decades. The severity of its liquidity problems indicates that the unfolding financial crisis is taking major parts of the US financial and political elite down with it. Among the leading partners of the Carlyle Group in recent years have been George H.W. Bush, father of the President; James Baker III, the Bush family’s attorney and ‘fixer;’ former UK Prime Minister John Major.

Carlyle Capital reports it is attempting to convince lenders holding $16 billion in securities not to liquidate the company's remaining collateral. The company is a listed mortgage-bond fund managed by the Carlyle Group. The Carlyle Group already has loaned Carlyle Capital $150 million to cover debt obligations since July 2007. In the past several days it failed to meet margin calls with four banks. The fear in the market according to informed reports is that its entire portfolio, recently valued at $21 billion, could be sold off in a distress sale, putting major downward pressure on all mortgage bonds globally. A collapse at Carlyle would hit the value of all fixed-income securities, which have already dropped sharply as banks pull back on their lending, and force a new global round of asset sales.

Margin calls

In the past days Carlyle Capital had admitted it had received "substantial additional margin calls and additional default notices from its lenders." It said lenders are selling off securities held as collateral. Margin calls are demanded when a creditor questions the ability of the borrower to repay.

Snip

More worrisome is the fact that the Carlyle crisis does not owe to so-called sub-prime or bad grade mortgage debt. The company held US government agency AAA-rated residential mortgage-backed securities (RMBS). Now Carlyle’s lenders have issued margin calls in excess of $400 million. At the onset of the sub-prime crisis in September 2007 Carlyle was forced to go to Abu Dhabi’s sovereign wealth fund to get capital. Mubadala, the arm of Abu Dhabi which has invested in sectors as diverse as Libyan oil exploration and Ferrari, the Italian motor company, paid $1.35bn for a 10% Carlyle stake.

And...

The Guardian - "Ex-presidents club" gets fat on conflict
High-flying venture capital firm Carlyle Group cashes in when the tanks roll...">

"It is the sort of thing they really could have done without. For 15 years one of America's most powerful venture capital groups has tried to play down suggestions that its multi-billion dollar funds get fat on the back of global conflict. But now, with the invasion of Iraq under way, a new book chronicling the relatively short history of the Carlyle Group threatens to draw attention to the company's close links with the Pentagon."

[Mountainman]

1. I'm looking to see if Lieberman turns back to being a Dem again since there won't be any pie left

for him in Carlyle.

[roguevalley]

24. it would serve them right to be foreclosed on, all of these warmongering

assholes. BWAAHAHA! Proof that there is a god, that irony lives. :)

[WCGreen]

2. I saw that this morning on CNBC...

No wonder the Bushies are so pumped to bail out the mortgage companies...

Fucking loan sharks...

[bobthedrummer]

3. Fwiw, anyone else notice this March 4, 2008 CNBC.com posting

"UBS investment bank director Olivier Sarkozy set to join Carlyle Group"
http://www.cnbc.com/id/23459406/for/cnbc

[Donnachaidh]

29. that whole Masters of the Universe Club --

I hope he and his half-brother go down with the Carlyle Group.

[bobthedrummer]

31. They certainly got a piece of Emperors Club VIP too Donnachaidh imo

Never forget these are not small thinkers-privatizing the universe is only a beginning for them.

[Robbien]

4. Carlyle Capital is just one small part of the huge Carlyle Group

The loss of CC is barely noticeable in the total CG picture.

[natrat]

8. yea, isnt it a public fund? as in they sold it and it's other people's losses

[Robbien]

11. Yup. Carlyle Group only loaned Carlyle Capital about $150 mil. Peanuts

Carlyle Group's worth is probably in the trillions by now I'm guessing.

[autorank]

12. It's a chink in the armor.

How could they let this happen in a world where, by their own efforts and those on their board, etc., it's all about image. And the Group just lets it's sub flounder without bailing it out. Not good business imho. This should have been as quiet as possible. But these are the people who brought
us Bush & Co. so what else do you expect other than bad business decisions.

But leter in the OP link:

And Blackstone Group too?

Carlyle is by no means the only elite US private capital group in serious trouble. Blackstone Group, manager of the world's largest buyout fund, said fourth-quarter profit plunged 89 percent after a ``meltdown'' in the credit markets and warned that getting loans for takeovers will be difficult in 2008. Profit declined to $88 million from $808.1 million a year earlier.

Blackstone decided to list the private equity company on the stock market in June 2007 in a move some date as the last gasp of the huge securitization and private equity buyout mania of the past decade. Since June its stock has fallen 53 percent. More serious, it hasn't completed a takeover of more than $2 billion in five months and is struggling to close the $6.6 billion buyout of Dallas-based Alliance Data Systems Corp., a credit-card processor, announced in May 2007.

Blackstone and Carlyle led the recent “locust capitalism” (Heuschrecke) hostile takeover binge which triggered a major political backlash in Germany and elsewhere. That debt-financed takeover binge came to a halt with the eruption of the sub-prime securitization crisis last fall. Blackstone has $102 billion in assets under management at present. The value of Leveraged or debt-financed Buyout (LBO) deals announced in the second half of 2007 plunged two-thirds from the first six months, according to data by Bloomberg.

[Robbien]

13. Carlyle Group just cutting its losses. Other people are left holding the bag.

Blackstone is another story altogether. It has real problems.

[C_U_L8R]

5. "Margin call, gentlemen"

You know the rules. All accounts to be settled at the end of the day's trading, without exception.

You know perfectly well, we don't have $ 394 million in cash.

I'm sorry, boys. Put the Duke brothers' seats on the exchange up for sale at once.

Seize all assets of Duke & Duke Commodity Brokers,
as well as all personal holdings of Randolph and Mortimer Duke

We're ruined!

This is an outrage, I demand an investigation.

You can't sell our seats. A Duke has been on this exchange since it was founded.

We founded this exchange. It's ours. It belongs to us.

We'd better call your brother an ambulance.

Fuck him! I want trading reopened, right now.

Get those brokers back in here. Turn those machines back on.

Turn those machines back on !!!!!!!!!!!!!!!!!!!!!!!!

[autorank]

9. Perfect...

These guys may start looking like the "Dukes of Hazzard" if this spreads throughout their little empire.

[C_U_L8R]

18. A little matinee for your viewing pleasure

the coming attractions
http://www.youtube.com/watch?v=9ABAhOTofK4


the feature (minus the last scene)
http://www.youtube.com/watch?v=RAXdie_gifI

[CatholicEdHead]

28. One of my favorite movies :D

[Mountainman]

6. If Carlyle goes down, and since I feel they are a big part in the neocon's war

mongering, should I be happy?

[quadriga]

7. I'll bet they already exist somewhere else

in some other form, "Global Market Strategy Group" or something along those lines. It's like whack-a-mole with these people.

[autorank]

17. Good angle - dump the debt and start new...quite a savings! n/t

[mike_c]

10. I wonder if it's a bit premature to start a countdown on the demise...

...of the Carlyle Group. I mean, Carlyle Capital Corporation IS most definitely on the ropes, but aside from being a real embarrassment, how badly does that actually affect the Carlyle Group itself? IIRC the CCC is only one of 55 hedge funds the CG operates, and I would assume that the tremendous assets of the CG are somewhat protected from the failure of any single fund. I'm just wondering out loud, though-- I don't know that much about the CG's broader financial status or exposure.

[JuniperLea]

14. I paid these margin calls for a former boss...

She was in all the big groups like this, and Thomas H. Lee, etc. In one hand and out the other... I always thought they knew when to get off the bull and onto the bear... strange this is happening... this could get interesting. Perhaps the upper 3% are whittling down to 1%?

[reprehensor]

15. I bet Carlucci got his out...

Before the shizzle hit the fu-sizzle.

[formercia]

20. Frank is one of the boys.

Those pirates always gets their loot.

Long John Silver.

[bobthedrummer]

16. I predict that no one will open a Black Budget Network World Bank-yet everyone has an account...

[formercia]

19. A Pox on all their houses.

It could not happen to a bigger bunch of assholes.


I hope they lose everything.

[xiamiam]

21. not a chance in hell...since they are part of those that ultimately own everything...bwwahhhaha..nt

[spanone]

22. follow the money....

[Fireweed247]

23. Could this be connected?

"The focus of Governor Spitzer’s investigation, these reports state, revolve around the growing crisis embroiling the Carlyle Group as it nears total collapse and is facing insolvency due to Larry Silverstein’s withdrawal of over $14 billion from the embattled groups coffers, and which could see the loss to New York States already troubled massive pension fund of over $10 billion."

Spitzer ‘Destroyed’ Over Threat To Probe 9/11 Attacks On US??
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=125x197731

[autorank]

26. That's very interesting. Greg Palast needs to cover this. He'd be perfect! n/t

[bobthedrummer]

30. "Follow the money? God forbid. Why was the cashing out of billions of dollars

just before the 9/11 attacks never investigated?" by Jim Hogue (1-29-2008 Baltimore Chronicle)
http://baltimorechronicle.com/2008/012808Hogue.shtml

"Spitzer taken down by Mossad?" by Jerry Mazza (3-14-2008 OnlineJournal)
http://onlinejournal.com/artman/publish/article_3065.shtml

Well we all know that Alvin "Buzzy" Krongard made a few prescient trades before the 9/11 attacks, among others.

[NightWatcher]

25. Um, Carlyle hedges it's bets against themselves

they wheel and deal between 'sister companies' and subsidiaries. I assure you that they only use these "apparent losses" to write off billions that they shift between projects.

[Crabby Appleton]

27. Your mixing up Carlyle Capital with Carlyle Group

Not true that "Carlyle Capital has been the insiders firm for almost three of decades", Carlyle Capital was formed as a subsidiary of Carlyle Group less than two years ago, with shares of CCC sold to investors. Carlyle Capital is merely an equity fund whose parent company is Carlyle Group, if Carlyle Capital goes bankrupt it has little effect on Carlyle Group.

[Me.]

32. Isn't The Mother Group (and I mean that in the most unkind way)

in trouble too because of Hawaii Telecom?

[BeFree]

33. Hey!

I know how to fix this..... Attack Iraq!

Anyways, couldn't happen to a nicer bunch of folks, eh?

How ya doing Admiral?

[autorank]

34. I'm hoisting the main sail and heading for calmer seas;)

More later.

Yourself?

[mnhtnbb]

35. You mean attack Iran, don't you?