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Carlyle Group said creditors plan to seize the assets of its mortgage-bond fund after it failed to meet more than $400 million of margin calls on mortgage- backed collateral that plunged in value.
Carlyle Capital Corp., which began to buckle a week ago from the strain of shrinking home-loan assets, said in a statement it defaulted on about $16.6 billion of debt as of yesterday.
The fund fell 87 percent in Amsterdam trading.
The industry is reeling from its worst crisis because bankers -- staggered by almost $190 billion of asset writedowns and credit losses -- are raising borrowing rates and demanding extra collateral for loans.
"This is not only a problem for Carlyle,'' Jochen Felsenheimer, the Munich-based head of credit strategy at UniCredit SpA, wrote in a note to clients today. "We expect a further flood of downgrades especially of higher-rated securities, putting enormous pressure on the system.''