Carlyle Capital Asks for Standstill from Lenders

AMSTERDAM (Reuters) - Carlyle Capital Corp CARC.AS, an affiliate of private equity firm Carlyle Group [CYL.UL], said on Monday it has asked lenders for a standstill agreement as it faces more than $400 million in margin calls.

Dutch-listed Carlyle Capital Corp (CCC), 15 percent owned by the private equity group's managers, said earlier on Monday it was still in talks with its lenders who believe the company is in default under financing agreements.

CCC said its lenders had significantly reduced the amount they were willing to lend against the company's portfolio of U.S. government agency AAA-rated residential mortgage-backed securities due to recent turmoil in that market.

CCC warned on Friday that its cash could run out, and its shares were suspended on Amsterdam's stock exchange after closing at $5, having lost more than half their value.

Regulators said on Monday trade in CCC would resume pending further material information from the company.

Some lenders may have liquidated collateral securing approximately $5 billion of CCC's debt, it said, but added that it did not receive any deficiency notices from those lenders who sold collateral to cover the borrowings.

"The company is in ongoing negotiations with the remaining lenders, who hold approximately $16 billion in securities, and, if a mutually beneficial agreement is not reached, some of these lenders may also liquidate their securities," Carlyle said.

"While these talks continue, the company has discussed and requested a standstill agreement whereby its lenders would refrain from foreclosing and liquidating their collateral, and we are awaiting responses."

Parent Carlyle Group has a $150 million exposure to CCC through a credit facility. A spokeswoman for the buyout firm on Friday refused to say whether Carlyle would provide more support to CCC.