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Margin calls threaten Thornburg, Carlyle Capital

Creditors demand cash, collateral
Published on Mar 10, 2008

Margin calls from creditors are once again threatening the existence of alt-A lender Thornburg Mortgage Inc., and a highly leveraged private equity fund, Carlyle Capital, is in similar straights as it faces margin calls from creditors worried about the declining value of the fund’s investments in highly-rated mortgage backed securities backed by Fannie Mae and Freddie Mac.The problems at Thornburg and Carlyle are the latest examples of how fears about declining home prices and rising delinquencies and foreclosures are affecting credit markets.Thornburg's margin call problems began Feb. 14, when Swiss bank UBS AG wrote down by $2 billion the value of $26.6 billion in alt-A mortgages. That prompted Thornburg's creditors to press the company to put up more cash or collateral for its debts, which are backed by similar alt-A loans.While Thornburg was able to raise enough cash and collateral to meet more than $300 million in margin calls it received in February, the lender has...

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