As Margin Calls Mount, Carlyle Holds 'Crisis Talks'

The Carlyle Group is holding emergency talks with lenders to try to save its drowning Carlyle Capital division, the Washington Post reports. Creditors have decided that Carlyle’s portfolio of traditionally safe mortgage-backed securities holdings isn’t good enough in the current market, and they're demanding $400 million more in collateral. Some have declared Carlyle Capital in default and may have sold $5 billion in assets.

That $5 billion represents almost 25% of the subsidiary’s holdings. Carlyle Capital is asking for a “standstill agreement” to prevent further bleeding while talks are under way. It has also suspended trading on its stock, which fell 60% on Friday, to $5 a share. If a deal isn’t reached, the group will have to liquidate $16 billion in securities. (More credit market stories.)