The company "had defaulted on approximately $16.6 billion of its indebtedness", the company said in a statement, adding, "the remaining indebtedness is expected soon to go into default."

"Overall, it has become apparent to the Company that the basis on which lenders are willing to provide financing against the Company's collateral has changed so substantially that a successful refinancing is not possible," the company said.

Its assets included $21.7 billion in AAA mortgage backed securities backed by Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE), The Wall Street Journal reported.

Lenders sent margin calls "in excess of $400 million last week" the company said. It has been "working diligently with lenders" since, but had not stabilized its financing.

Carlyle Capital pumped $150 million into the fund last summer, The Journal reported. This week, lenders Deutsche Bank and J.P. Morgan Chase began selling its securities, The Journal reported.

Carlyle Group began in 2006 with a startup that included $670 million from owners David M. Rubenstein, William E. Conway Jr. and Daniel D'Aniello, all listed on the Forbes Magazine list as among the world's richest men.