The Carlyle Group Closes $400 Million High Yield Fund, CHYP VI; Leveraged Finance Group Now Manages $3 Billion in High Yield Assets

Washington, DC - Global private equity firm The Carlyle Group today announced the close of its sixth high yield fund, Carlyle High Yield Partners VI (CHYP VI), at $400 million. The fund will invest a minimum of 95 percent of its assets in bank loans and a maximum of 5 percent in high yield bonds.

Michael Zupon, Carlyle Managing Director and head of the Leveraged Finance Group, said, “The excellent track record of our existing loan portfolio drove strong demand for our sixth high yield fund, leading to an upsizing of the fund size to $400 million. The fund’s liabilities priced lower than any collateralized loan obligation (CLO) since 1998 due to the low default rate in our high yield loan portfolio. Our equity investors will benefit from this favorable cost of capital and the increase in returns as interest rates rise.”

CHYP VI will be the second Carlyle fund to employ the proprietary APEX structure. Wachovia Bank, N.A. will provide a $32 million revolving credit line – APEX Revolver – to advance against credit losses. CHYP IV also employs the APEX structure.

Linda Pace, Carlyle Managing Director and Leveraged Loan Portfolio Manager, said, “The APEX revolver preserves the principal collateral value of the fund and provides greater management flexibility. APEX results in more stable returns for preferred share investors than traditional CLO structures.”

Carlyle’s Leveraged Finance Group now manages $3 billion of leveraged loans, high yield bonds, and special situation investments in six collateralized debt obligations (CDOs):

• Carlyle High Yield Partners, L.P. - $900 million market value CDO (May 1999)


• Carlyle High Yield Partners II, Ltd. - $550 million cash-flow CDO (Dec. 1999)


• Carlyle High Yield Partners III, Ltd. - $450 million cash-flow CDO (Dec. 2000)


• Carlyle High Yield Partners IV, Ltd. - $400 million cash-flow CDO (Apr. 2002)


• Carlyle Loan Opportunity Fund - $300 million cash-flow CDO (Sept. 2003)


• Carlyle High Yield Partners VI, Ltd. - $400 million cash-flow CDO (July 2004)