Hedge fund desparation

The FT has noted that:

Carrington Capital Management, a $1bn hedge fund specialising in mortgages, is trying to persuade its investors to lend it up to $200m to replace bank loans, in the latest sign of concern about banks pulling credit lines to hedge funds.

Carrington, part-owned by New Century, the failed US subprime lender, has offered investors an 18 per cent interest rate on new preferred shares it plans to issue.

18%? Is anyone that mad?