GUERNSEY, England, August 28 /PRNewswire/ -- Carlyle Capital Corporation Limited (Amsterdam: CCC; GG00B1VYV826) (the "Company") today announced that it has taken several steps to create additional liquidity in the event of continued market volatility. The Company sold certain assets and has strengthened its credit lines with its repurchase agreement counterparties.
John Stomber, Chief Executive Officer of Carlyle Capital Corporation, said, "This additional liquidity will help us better weather the market conditions we are facing. We have determined that it is in the best interest of our investors to maximize our liquidity by selling certain assets, following careful consideration with our Investment Committee and Board of Directors. We intend to keep our high quality AAA-rated U.S. agency mortgage backed securities issued by Fannie Mae or Freddie Mac, representing approximately 95% of our assets, and benefit from their substantial inherent value, but sold certain non-mortgage backed investments to help sustain a suitable liquidity position."
To provide additional liquidity, the Company has taken the following actions:
-- We sold our interests in four collateral loan obligations sponsored by The Carlyle Group at our cost to certain affiliates of The Carlyle Group.
-- We sold our interests in mezzanine debt securities at our cost to certain affiliates of The Carlyle Group.
-- We sold a substantial portion of our bank loans at or above our book value.
-- The Company was released from its commitment to fund US$75 million to one of The Carlyle Group's distressed debt investment funds.
-- We have affirmed with certain of our lenders collateral levels that reflect the high quality of our AAA-rated U.S. agency issued floating rate capped mortgage backed securities.
As announced on August 20, The Carlyle Group committed to lend the Company US$100 million for one-year on an unsecured, subordinated basis. The Company has fully drawn on that commitment.
The Carlyle Group has also agreed to lend the Company up to an additional US$100 million, at such time and in such amounts as agreed to at the time between the parties, which will be repaid upon receipt of the proceeds from the asset sales. This loan from The Carlyle Group may be drawn in installments, is secured by assets including the excess proceeds from the sale of a portion of the bank loan portfolio, and bears interest at 7%. The loan is due on September 27, 2007, but may be extended for an additional 30 days with mutual consent of the parties, and may be prepaid without penalty. This loan has no fees associated with it.
The asset sales total approximately US$900 million, or less than 5% of total assets, and will provide between approximately US$140 million and US$150 million after meeting all our obligations for the associated debt. We estimate a realized loss from asset sales of between approximately US$30 million and US$40 million. This loss will be partially offset by net interest income, but will result in a loss for the third quarter. Net income for the six months ended June 30, 2007 was approximately US$33.4 million. Given the expectation of a net loss in the third quarter, it is unlikely the Company will pay a dividend for the third quarter of 2007, as the Board believes the Company should focus on preserving capital and rebuilding its liquidity cushion.
As announced last week, the Company has scheduled an analyst call for Wednesday August 29, 2007 at 9:00 A.M. (EDT) (2:00 P.M. London) to discuss current market conditions. The call may be accessed by dialing 800-263-8506 (North America) or +1-719-457-2681 (International); a pass code is not required but callers should reference "CCC's Quarterly Results Call." A replay of the call will be available until midnight (EDT), August 31, 2007 by dialing 888-203-1112 (North America) or +1-719-457-0820 and using passcode 5122249.
(Correction: The press release published yesterday erroneously reported the due date of the Carlyle Group loan as September 27, 2008. This has been corrected to read September 27, 2007. In addition, the dial-in information for Wednesday's call has been updated.)
About Carlyle Capital Corporation
The Company is a Guernsey limited company that was formed on August 29, 2006. The Company's objective is to achieve attractive risk-adjusted returns for shareholders through current income and, to a lesser extent, capital appreciation. Management seeks to achieve this objective by investing in a diversified portfolio of fixed income assets consisting of mortgage products and leveraged finance assets. Management employs leverage to finance the Company's investments. Income is generated primarily from the difference between the interest income earned on the Company's assets and the costs of financing those assets as well as from capital gains generated when the Company disposes of assets.
Carlyle Investment Management L.L.C. ("CIM") manages the Company pursuant to a management agreement. CIM is a registered investment adviser under the U.S. Investment Advisers Act of 1940 and is an affiliate of TC Group, L.L.C. (TC Group, L.L.C. and its affiliates, collectively, "The Carlyle Group").
This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities of Carlyle Capital Corporation Limited. Certain of the information contained in this press release represents or is based upon forward looking statements or information. Forward-looking statements are inherently uncertain, and changing factors, such as those affecting the markets generally, or those affecting particular industries or issuers, may cause events or results to differ from those discussed. Therefore, undue reliance should not be placed on such statements or the conclusions drawn therefrom, which in no event shall be construed as a guarantee of future performance, results or courses of action. The Carlyle Group and the Company expressly disclaim any obligation or undertaking to update or revise any such forward-looking statements. No statement in this press release is intended to be nor may be construed as a profit or dividend forecast and there can be no assurance that the assumptions described herein, the returns and targets indicated herein will be achieved.
The Class B shares and the related restricted depositary shares of the Company are subject to a number of ownership and transfer restrictions, including restrictions that limit the ability of U.S. persons to acquire or hold such securities.
Contact: Emma Thorpe +44-207-894-1630