Carlyle Crunch, Ambac Salvation Sale

last updated 11 January 2015

NEWS AT A GLANCE

New problems for Carlyle

Carlyle Capital Corp., a Netherlands-based investment fund run by private equity giant Carlyle Group, was suspended in Amsterdam trading after creditors forced the fund to sell some holdings. Before trading was suspended, Carlyle Capital shares fell 58 percent, to $5. The fund was unable to meet “substantial” bank margin calls, and was hit by several default notices yesterday. (AP in CNNMoney.com) The defaulted loans were on AAA-rated home-mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac, which gives them the “implicit guarantee” of the U.S. government, Carlyle said. (Bloomberg)

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Embattled bond insurer Ambac raised $1.5 billion by selling stock and convertible bonds, in a bid to keep its top-notch AAA credit rating. The $6.75-a-share price for Ambac’s common shares was 9 percent lower than Thursday’s closing price. (Reuters) Ambac faces enormous claims over collateralized debt obligations and other complex securities it agreed to insure. Financial markets had called for Ambac to raise as much as $3 billion in new capital. “They might be able to maintain the ratings at Moody’s and S&P for the time being, but it’s a Band-Aid,” said analyst Robert Haines at bond research firm CreditSights Inc. (Bloomberg)

Fortis, Belgium’s largest financial services firm, reported a greater-than-expected 48 percent drop in quarterly profits, to $637 million, after writing down $2.3 billion in assets tied to U.S. subprime mortgages. Its shares rose as much as 3.6 percent early today, however, after CEO Jean-Paul Votron said it is reducing its risk exposure and negotiating an unspecified transaction that will “strengthen our solvency substantially.” (Bloomberg) “Reported earnings were much lower than expected,” said KBC Securities analyst Dirk Peeters, “but we welcome the fact that Fortis has opted for the worse case scenario when taking out subprime losses.” (Reuters)

Sex sells, and nowhere more than on TV. But while the much-sought-after 18-to-34-year-old demographic may love ever-steamier sex scenes, the Federal Communications Commission and even some advertisers get upset when it gets too sexy. Even with the FCC’s recent crackdown on profanity and nudity, though, new shows like CW’s Gossip Girl and NBC’s Lipstick Jungle have pushed the limits—and been rewarded with viewers. That leaves many producers trying to walk a pretty narrow, ill-defined line. But “suggested sex is always much more powerful than the actual thing,” said TV writer Peter Tolan. “I’m a big fan of underwear, too.” (The Wall Street Journal)