The crisis at Carlyle Capital Corporation (CCC), the $22 billion (£9.9 billion) Dutch affiliate of America's Carlyle Group, dramatically escalated on Friday after the fund said it had overnight received "substantial additional margin calls" linked to its souring investments in US mortgages.

CCC's shares were suspended in Amsterdam as it disclosed it had received more default notices from its lenders and that some of those lenders had been forced to sell CCC's mortgage assets in an effort to recover their loans. CCC also gave warning of further likely default notices from its banks.

The dire forecast came just 24 hours after CCC on Thursday said it had been issued with $37 million worth of margin calls from lenders, having just satisfied $60 million of calls the week before.

And CCC warned things could get rapidly worse. It said: "The company believes these additional margin calls and increased collateral requirements could quickly deplete its liquidity and impair its capital".

It added: "Management is closely monitoring the situation and considering all available options for the company".

The AMF, the Dutch market regulator, said shares in CCC would remain suspended from the Euronext Amsterdam index until the group makes a statement. The shares were suspended at $5.00 today.

John Stomber, CCC's president and chief executive, said yesterday that the fund was in talks with its banks. Neither CCC nor Carlyle would comment further on Friday.

CCC, which floated in Amsterdam in July, invests in long-term asset-backed securities, such as investment grade mortgages issued by Fannie Mae and Freddie Mac, the US mortgage specialists.

Although the assets are highly rated, their value has been hit hard by reverberations from the American sub-prime credit crisis.

As the values have fallen, its banks - including Bank of America, Bear Stearns, BNP Paribas, Calyon, Citigroup, Credit Suisse, Deutsche Bank and ING - have demanded more collateral as guarantees for their loans.

CCC's problems echo those of Peloton Capital, the London-based hedge fund that collapsed last week after failing to meet margin calls to repay loans used to buy mortage-backed securities.

CCC's crisis is potentially a lot worse, however, given the fund's size. It raised $670 million of equity from its float and private individuals - including Carlyle partners - which it then geared up 32 times to finance a $21.7 billion portfolio of assets.

Carlyle's founders, David Rubenstein, and his colleagues Daniel D'Aniello and William Conway, were last summer twice forced to bail out the fund for a total of $200 million.

It is understood that $100 million was repaid in November and CCC has borrowed another $50 million since then.

Mr Stomber said the environment over the past few days had created a situation where the margin prices of its AAA-rated securities, issued by Fannie Mae and Freddie Mac, were not representative of their underlying value.

CCC has been selling off assets since August and said yesterday it had so far sold almost $1 billion in non-mortgage backed assets.

Observers have said the bad news was obvious from the start when CCC's flotation was scaled back because of choppy credit markets.

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