Carlyle Capital Corporation Reports Third Quarter Results

GUERNSEY, England, Nov. 15 /PRNewswire/ -- Carlyle Capital Corporation Limited (Amsterdam: CCC) (Amsterdam: GG00B1VYV826) (the "Company") today released its results for the third quarter ended September 30, 2007.

    Third Quarter 2007 Highlights and Update

    -- Net loss for the third quarter of 2007 was $34.2 million, compared to
       net income of $21.8 million in the second quarter of 2007.  Basic loss
       per Class B share was $0.74 in the third quarter, compared to basic and
       diluted earnings per Class B share of $0.73 in the second quarter of
       2007.  Net loss for the nine months ended September 30, 2007 was $0.8
       million, or $0.03 per Class B share.

    -- Adjusted Net Income (net income excluding non-cash share-based
       compensation expense) for the nine months ended September 30, 2007 was
       approximately $11 million.

    -- As of the date of this announcement, the Company's $22.2 billion
       investment portfolio is comprised exclusively of AAA-rated floating
       rate capped residential mortgage backed securities issued by Fannie Mae
       and Freddie Mac, which are considered to have the implied guarantee of
       the U.S. government and are expected to pay at par at maturity.

    -- During the third quarter, The Carlyle Group committed to lend the
       Company up to $100 million in the form of a secured "bridge" loan in
       order to provide the Group with immediate access to the net proceeds
       from the Company's bank loan sales (as opposed to waiting until the
       settlement of such trades).  The Company ultimately did not have a need
       for the bridge financing and it expired in October 2007.

    -- On November 13, 2007, the Company repaid $100 million borrowed from The
       Carlyle Group pursuant to an unsecured and subordinated term loan.  On
       the same date, the Company entered into a revolving credit agreement
       with The Carlyle Group, permitting the Company to borrow, re-pay and
       re-borrow up to $100 million.  The revolving credit agreement expires
       on January 2, 2009, amounts outstanding accrue interest at 10% per
       annum, and is subject to a commitment fee of $1 million payable in
       quarterly installments.  As of the date of this announcement, the
       Company had borrowed $20 million under the revolving credit agreement
       for cash management purposes.

    -- As of the date of this announcement, two of the Company's repurchase
       agreement counterparties had agreed to provide, or had increased their
       commitment to provide, financing of up to $3 billion for the Company's
       investments in AAA-rated floating rate capped residential mortgage
       backed securities issued by Fannie Mae and Freddie Mac.  The Company
       has begun using a portion of the $3 billion of additional financing to
       reduce its concentration of borrowings.  The Company has also obtained
       an additional $2 billion of additional repurchase agreement financing
       for its mortgage backed securities that it expects to begin using later
       in November 2007.  Finally, the Company has entered negotiations for a
       $2 billion 364 day "term" repurchase agreement.

    -- As of September 30, 2007 the Company's "Liquidity Cushion" was $90.8
       million and was comprised of cash and cash equivalents and unencumbered
       AAA-rated mortgage backed securities.  As of November 13, 2007, our
       "Liquidity Cushion" was approximately $119.9 million comprised of cash
       and cash equivalents and unencumbered AAA-rated mortgage backed
       securities and available committed borrowings from The Carlyle Group.

    -- The Board of Directors expects to approve a dividend payment based on
       fourth quarter earnings, which would be paid in the first quarter of
       next year. This reflects the Company's long-term focus of providing
       shareholders with a stable rate of return.  However, the Board of
       Directors does not anticipate that any such dividend will meet the
       Company's previously stated dividend targets.  Unforeseen market
       disruptions or other factors may affect the Board's decision to pay a
       dividend, which will be made during the Board's year-end performance
       review. Thereafter, subject to having sufficient liquidity, reasonably
       stable market conditions and profits or reserves available, and with
       approval of the Company's board of directors, the Company intends to
       pay a quarterly cash dividend on each Class B share of approximately
       90% of our Adjusted Net Income.

"During this quarter we were successful in our near-term focus of preserving the long term equity of our shareholders during a period of volatility," said John Stomber, President, Chief Executive Officer, and Chief Investment Officer. "Specifically, during the quarter we took actions to stabilize our investment portfolio, which is now composed exclusively of AAA- rated floating rate capped residential mortgage backed securities issued by Fannie Mae and Freddie Mac that pay at par at maturity. We are confident that these actions have preserved shareholder value."

Stomber continued, "Moving forward, we plan to operate with increased liquidity and to gradually reduce leverage and to diversify our investments. We remain confident in our strategy and believe it will enable us to move towards our stated targeted returns in 2008."

Conference Call

Carlyle Capital Corporation will host a conference call November 15, at 10:00 a.m. (ET) to discuss the Company's quarterly results. Investors can participate in the conference call by dialing (877) 296-2302 (U.S. and Canada) or (706) 634-9628 (International). The call will also be broadcast live via the Internet at the Company's web site, http://www.carlylecapitalcorp.com. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.

For your convenience, the conference call can be replayed in its entirety beginning at 11:00 a.m. Eastern Time on November 15, 2007 through November 22, 2007. If you wish to listen to the replay of this conference call, please dial 973-645-9291 and enter passcode "22707788".

About Carlyle Capital Corporation

Carlyle Capital Corporation Limited is a Guernsey limited company that was formed on August 29, 2006. The Company's long-term objective is to achieve attractive risk-adjusted returns for shareholders through current income and, to a lesser extent, capital appreciation. In the future, the Company will seek to achieve this objective by investing in a diversified portfolio of fixed income assets consisting of mortgage products and leveraged finance assets. The Company employs leverage to finance its investments and its income is generated primarily from the difference between the interest income earned on its 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 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. Each of The Carlyle Group and the Company expressly disclaims 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 any assumptions described herein or any returns or targets indicated herein will be achieved.

    The Class B shares and the related restricted depository 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.



    Results of Operations

                             Three Months   Nine Months   For the Period
                                Ended          Ended      Ended September
                              September      September   16, 2006 through
                              30, 2007       30, 2007      30-Sep-2006

    (in thousands, except
     per share data)
    Income
    Interest income           $343,179       $769,004            $18
    Interest expense
     (including amortization
     and write-off of debt
     issuance costs of $4,509,
     $4,752, and $0 for the
     three months and nine
     months ended September 30,
     2007 and for the period
     ended September 30,
     2006)                     313,667        693,962             16
      Net interest income       29,512         75,042              2
    Net change in fair value
     on financial instruments
     at fair value through
     profit and loss           (45,549)       (44,797)          (307)
      Total income (loss)
       before operating
       expenses                (16,037)        30,245           (305)

    Operating expenses
    Management fee               3,918          8,339              -
    Incentive fee                    -          4,681              -
    Professional services          646          1,844              -
    Related party operating
     expenses                      581          1,710              -
    Other operating expenses     1,192          2,629              -
    Share-based compensation    11,840         11,840              -
      Total operating expenses  18,177         31,043              -
      Net (loss)              $(34,214)         $(798)         $(305)

    Net income attributable
     to
    Minority interest               $-              6              -
    Class B shares            $(34,214)          (804)             -
      Total net income        $(34,214)         $(798)            $-
    Basic (loss) per Class B
     share                      $(0.74)        $(0.03)