A company that private equity firm Blackstone was aiming to buy for $1.8bn (£908m) has ended the deal on the basis that its suitors could not raise funds.
Blackstone and industrial giant General Electric (GE) agreed in March last year to buy PHH, a US provider of mortgages and fleet management services.
But PHH said the sale had been terminated because it could not be completed by 31 December as agreed.
In the wake of the credit crisis, funding deals has become much harder.
In recent years, firms such as Blackstone have used cheap credit from banks to fund a takeover spree that has pushed up stock markets and thrust the private equity sector into the spotlight.
"We regret that the banks are now unwilling to provide financing under the terms they originally agreed to"
But higher interest rates and record mortgage defaults in the US sub-prime sector means cheap credit is now harder to access.
PHH has requested a $50m termination fee from Blackstone, citing the terms of the arrangement.
Disappointment
A successful deal would have seen GE buying PHH, retaining its fleet management services business, and then selling its residential home loan unit to Blackstone.
Mr. AB Krongard, non-executive chairman of PHH, said he was "disappointed" that the transaction could not be completed.
Blackstone expressed similar sentiments, blaming the banks, which included JP Morgan and Lehman Brothers.
According to Blackstone, the lenders had previously agreed to provide loans to support the deal but reneged on the terms of the financing arrangement.
"Blackstone was prepared to close its end of the transaction using the financing that in March was originally committed to be made available," spokesman John Ford said in an email to Reuters.
"We regret that the banks are now unwilling to provide financing under the terms they originally agreed to."
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