Carlyle Secured Lending Inc
For the period ended Jun 30, 2024. Filed Aug 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 5, 2024
CGBD$11.17+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001544206-24-000036
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0001544206-24-000054
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 199 current paragraphs.
139 unchanged; 36 reworded; 24 added; 2 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (amounts in thousands, except per share data, unless otherwise indicated)
Current report
•the ability of the parties to consummate the Mergers on the expected timeline, or at all;
Current report
•the expected synergies and savings associated with the Mergers;
Current report
•the ability to realize the anticipated benefits of the Mergers, including the expected elimination of certain expenses and costs due to the Mergers;
Current report
•the percentage of our stockholders voting in favor of the proposals submitted for their approval;
Current report
•the possibility that competing offers or acquisition proposals will be made;
Current report
•the possibility that any or all of the various conditions to the consummation of the Mergers may not be satisfied or waived;
Current report
•risks related to diverting management’s attention from ongoing business operations;
Current report
•risk that stockholder litigation in connection with the Mergers may result in significant costs of defense and liability;
Current report
•the combined company’s plans, expectations, objectives and intentions, as a result of the Mergers; and
Current report
•any potential termination of the Merger Agreement.
Current report
Second Quarter 2024 Highlights
Current report
•As of June 30, 2024, non-accrual investments represented 2.8% and 1.8% of our portfolio based on cost and fair value, respectively.
Current report
Recent Developments
Current report
•On August 1, 2024, we declared common stock dividends of $0.47 per share to be paid in October 2024.
Current report
•On August 2, 2024, we entered into an Agreement and Plan of Merger with Carlyle Secured Lending III, a Delaware statutory trust (“CSL III”), Blue Fox Merger Sub, Inc., a Maryland corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and, solely for the limited purposes set forth therein, CSL III Advisor, LLC, a Delaware limited liability company and investment adviser to CSL III (“CSL III Advisor”), and the Investment Adviser (together with CSL III Advisor, the “Advisors”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, (i) Merger Sub will merge with and into CSL III, with CSL III continuing as the surviving company and as a wholly-owned subsidiary of the Company (the “Merger”) and (ii) immediately thereafter, CSL III will merge with and into the Company, with the Company continuing as the surviving company (together with the Merger, the “Mergers”). Refer to Note 14, Subsequent Events, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the Merger Agreement and the Mergers.
Current report
•In connection with the entry into the Merger Agreement, upon the terms and subject to the conditions contained in the Preferred Stock Exchange Documents (as defined in the Merger Agreement) by and between us and the holder of Preferred Stock, all shares of Preferred Stock issued and outstanding immediately prior to the effective time of the Merger will be exchanged for such number of shares of our common stock in a transaction exempt from registration under the Securities Act, as is equal to the quotient of (i) the aggregate liquidation preference of the Preferred Stock and (ii) the Closing CGBD Net Asset Value.
Current report
•On July 2, 2024, we completed a $410.0 million refinancing of the 2015-1R Notes, including $30.0 million retained by the Company. The refinancing extended the reinvestment period by four years and reduced the cost of debt by 22 basis points.
Current report
(2)Represents commitments to a portfolio company as part of an individual transaction.
Current report
On July 2, 2024, the Company and the 2015-1 Issuer completed the 2015-1R Refinancing, which resulted in the 2015-1N Debt, a $410.0 million collateralized loan obligation. On closing date of the 2015-1R Refinancing, the 2015-1 Issuer refinanced the 2015-1R Notes to the 2015-1N Debt, issued additional 2015-1 Issuer Preferred Interests to the Company in the aggregate notional amount of $13,500, increasing the 2015-1 Issuer Preferred Interests held by the Company to approximately
Current report
$118,054 and extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to July 15, 2028 and July 1, 2036, respectively.
Current report
Following the 2015-1R Refinancing, the Company retained the 2015-1 Issuer Preferred Interests. The 2015-1N Debt in the 2015-1R Refinancing were issued by the 2015-1 Issuer and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. As of the closing date, the Company retained the Class C-R Notes. The following table summarizes the terms of the 2015-1N Debt tranches and their principal amount:
Current report
During the three months ended June 30, 2024, we recognized a realized gain after the sale of our equity investment in Legacy.com, Inc. partially offset by a realized loss from the restructuring of our investment in Material Holdings, LLC.
Current report
For the three and six months ended June 30, 2024 and June 30, 2023
Removed paragraphs (2)
Previous report
First Quarter 2024 Highlights
Previous report
•In February 2024, we completed the successful recapitalization of Dermatology Associates, which contributed to non-accrual investments decreasing to 0.2% and 0.2% of the total portfolio based on amortized cost and fair value, respectively, as of March 31, 2024.
Reworded paragraphs (36)
Previous wording
We have included or incorporated by reference in this Form 10-Q, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-Q and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:
Current wording
We have included or incorporated by reference in this Form 10-Q, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CGBD” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-Q and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:
Previous wording
We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking information for any reason, including the factors set forth in “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2023 (our “2023 Form 10-K”).
Current wording
We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking information for any reason, including the factors set forth in “Risk Factors” set forth in this report and in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2023 (our “2023 Form 10-K”).
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1 of this Form 10-Q “Financial Statements.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in “Risk Factors” in Part I, Item 1A of our 2023 Form 10-K. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” in our 2023 Form 10-K and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-Q.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1 of this Form 10-Q “Financial Statements.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in “Risk Factors” set forth in this report and in Part I, Item 1A of our 2023 Form 10-K. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” in our 2023 Form 10-K and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-Q.
Previous wording
We are externally managed by our Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”) and a subsidiary of Carlyle. We benefit from our Investment Adviser’s investment team of over 200 investment professionals with the deep knowledge and expertise across multiple asset classes who are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of
Current wording
We are externally managed by our Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”) and a subsidiary of Carlyle. We benefit from our Investment Adviser’s investment team of over 200 investment professionals with the deep knowledge and expertise across multiple asset classes who are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle. In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including our Investment Adviser and its affiliates.
Previous wording
•Net investment income, inclusive of the preferred dividend, was $27.6 million or $0.54 per common share. Dividends declared on common shares were $24.4 million, or $0.48 per share.
Current wording
•Net investment income, inclusive of the preferred dividend, was $26.0 million or $0.51 per common share. Dividends declared on common shares for the second quarter of 2024 totaled $23.9 million, or $0.47 per share.
Previous wording
•Net investment income for the three months ended March 31, 2024 included a $3.6 million increase in total investment income from the comparable period in the prior year primarily driven by an increase in benchmark interest rates.
Current wording
•Net investment income for the three months ended June 30, 2024 declined slightly from the comparable period in the prior year primarily due to a decrease in portfolio size.
Previous wording
•The NAV per common share increased to $17.07 as of March 31, 2024, up from $16.99 as of December 31, 2023, primarily driven by net investment income in excess of our dividend for the quarter.
Current wording
•The NAV per common share decreased to $16.95 as of June 30, 2024, from $17.07 as of March 31, 2024, primarily driven by net unrealized depreciation from our watchlist names partially offset by earnings in excess of our dividend for the quarter.
Previous wording
•As of March 31, 2024, we held 174 investments across 131 portfolio companies and 26 industries for a total fair value of $1.8 billion.
Current wording
•As of June 30, 2024, we held 180 investments across 126 portfolio companies and 25 industries for a total fair value of $1.7 billion.
Previous wording
•During the three months ended March 31, 2024, we had investment fundings of $94.9 million and investment repayments of $173.4 million.
Current wording
•During the three months ended June 30, 2024, we had investment fundings of $84.8 million and investment repayments of $135.9 million.
Previous wording
•Total liquidity as of March 31, 2024 was $334.9 million in cash and undrawn debt capacity.
Current wording
•Total liquidity as of June 30, 2024 was $399.1 million in cash and undrawn debt capacity.
Previous wording
As a BDC, we believe that the key components of our results of operations for our business are earnings per share, dividends declared, net investment income and net asset value per common share. For the three months ended March 31, 2024, we recorded basic earnings per common share of $0.56, declared a dividend of $0.48 per common share and earned $0.54 of net investment income per common share.
Current wording
As a BDC, we believe that the key components of our results of operations for our business are earnings per share, dividends declared, net investment income and net asset value per common share. For the three months ended June 30, 2024, we recorded basic earnings per common share of $0.35, declared a dividend of $0.47 per common share and earned $0.51 of net investment income per common share.
Previous wording
For the three months ended March 31, 2024 and December 31, 2023, we declared dividends per common share of $0.48 and $0.44, respectively. As of March 31, 2024 and December 31, 2023, our NAV per share was $17.07 and $16.99, respectively.
Current wording
For the three months ended June 30, 2024 and March 31, 2024, we declared dividends per common share of $0.47 and $0.48, respectively. As of June 30, 2024 and December 31, 2023, our NAV per share was $16.95 and $16.99, respectively.
Previous wording
(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of March 31, 2024. Weighted average yield at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount (“OID”) and market discount earned, divided by (b) total fair value included in such securities. Weighted average yield at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned, divided by (b) total amortized cost included in such securities. Weighted average yields exclude investments on non-accrual status. Actual yields earned over the life of each investment could differ materially from the yields presented above. Inclusive of all debt and income producing investments and investments on non-accrual status, the weighted average yield on amortized cost was 12.6% as of March 31, 2024.
Current wording
(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2024. Weighted average yield at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount (“OID”) and market discount earned, divided by (b) total fair value included in such securities. Weighted average yield at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned, divided by (b) total amortized cost included in such securities. Weighted average yields exclude investments on non-accrual status. Actual yields earned over the life of each investment could differ materially from the yields presented above. Inclusive of all debt and income producing investments and investments on non-accrual status, the weighted average yield on amortized cost was 12.3% as of June 30, 2024.
Previous wording
(2)For the three months ended March 31, 2024, 100.0% of new funded debt investments were at floating interest rates.
Current wording
(3)For the three months ended June 30, 2024, 95.2% of new debt investment commitments were at floating interest rates.
Previous wording
As of March 31, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our debt investment portfolio was 2.2. As of March 31, 2024 and December 31, 2023, one and four of our debt investments were assigned an Internal Risk Rating of 4-5, respectively.
Current wording
As of June 30, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our debt investment portfolio was 2.2. As of June 30, 2024 and December 31, 2023, three and four of our debt investments were assigned an Internal Risk Rating of 4-5, respectively.
Previous wording
Since inception of Credit Fund and through March 31, 2024, we and Credit Partners each made capital contributions of $1 in members’ equity and $216,000 in subordinated loans to Credit Fund. On May 25, 2021, we and Credit Partners each received an aggregate return of capital on the subordinated loans of $23,000. The cost and fair value of our investment in Credit Fund was $193,001 and $180,648, respectively, as of March 31, 2024 and $193,001 and $181,960, respectively, as of December 31, 2023.
Current wording
Since inception of Credit Fund and through June 30, 2024, we and Credit Partners each made capital contributions of $1 in members’ equity and $216,000 in subordinated loans to Credit Fund. On May 25, 2021, we and Credit Partners each received an aggregate return of capital on the subordinated loans of $23,000. The cost and fair value of our investment in Credit Fund was $193,001 and $180,301, respectively, as of June 30, 2024 and $193,001 and $181,960, respectively, as of December 31, 2023.
Previous wording
Since inception of Credit Fund II and through March 31, 2024, we and CCLF made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. The cost and fair value of our investment in Credit Fund II was $78,096 and $67,950, respectively, as of March 31, 2024 and $78,096 and $67,419, respectively, as of December 31, 2023. Our portion of the dividends declared by Credit Fund II was $2,776 and $2,776 for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, our annualized dividend yield from Credit Fund II was 14.2%.
Current wording
Since inception of Credit Fund II and through June 30, 2024, we and CCLF made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. The cost and fair value of our investment in Credit Fund II was $78,096 and $67,667, respectively, as of June 30, 2024 and $78,096 and $67,419, respectively, as of December 31, 2023. Our portion of the dividends declared by Credit Fund II was $3,281 and $2,776 for the three months ended June 30, 2024 and 2023, respectively. As of June 30, 2024 and December 31, 2023, our annualized dividend yield from Credit Fund II was 16.8% and 14.2%, respectively.
Previous wording
The decrease in investment income for the three months ended March 31, 2024 as compared to the three months ended December 31, 2023 was primarily driven by a decrease in average outstanding investment balance due to sales and repayments of our investments and a decrease in other income. As of March 31, 2024, the size of our portfolio decreased to $1,829,575 from $1,904,895 as of December 31, 2023, at amortized cost. As of March 31, 2024 and December 31, 2023, the weighted average yield of our total debt and income producing investments was 12.6% and 12.7%, respectively, based on amortized cost.
Current wording
The decrease in investment income for the three months ended June 30, 2024 as compared to the three months ended March 31, 2024 was primarily driven by a decrease in average outstanding investment balance due to sales and repayments of our investments and a decrease in other income. As of June 30, 2024, the size of our portfolio decreased to $1,783,219 from $1,829,575 as of March 31, 2024, at amortized cost. As of June 30, 2024 and March 31, 2024, the weighted average yield of our total debt and income producing investments was 12.7% and 12.6%, respectively, based on amortized cost.
Previous wording
Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of March 31, 2024 and March 31, 2023, one and three of our debt investments were on non-accrual status, respectively. Non-accrual investments had a fair value of $3,792 and $68,890, which represented approximately 0.2% and 3.5% of total investments at fair value as of March 31, 2024 and March 31, 2023, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of March 31, 2024 and March 31, 2023.
Current wording
Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of June 30, 2024 and March 31, 2024, three and one of our debt investments were on non-accrual status, respectively. Non-accrual investments had a fair value of $30,209 and $3,792, which represented approximately 1.8% and 0.2% of total investments at fair value as of June 30, 2024 and March 31, 2024, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2024 and March 31, 2024.
Previous wording
The decrease in interest expense and credit facility fees was primarily driven by lower average borrowings outstanding on the Credit Facility during the three months ended March 31, 2024.
Current wording
The decrease in interest expense and credit facility fees was primarily driven by repayments on the 2015-1R Notes during the three months ended June 30, 2024.
Previous wording
The following table sets forth information regarding our consolidated results of operations for the three month periods ending March 31, 2024 and March 31, 2023:
Current wording
The following table sets forth information regarding our consolidated results of operations for the three and six month periods ending June 30, 2024 and June 30, 2023:
Previous wording
The increase in investment income for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by an increase in interest income, PIK income and other income. As of March 31, 2024, the size of our portfolio decreased to $1,829,575 from $2,027,648 as of March 31, 2023, at amortized cost. As of March 31, 2024 and March 31, 2023, the weighted average yield of our total debt and income producing investments was 12.6% and 12.1%, respectively, based on amortized cost.
Current wording
The decrease in investment income for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily driven by a decrease in interest income and other income. The increase in investment income for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by higher benchmark rates and an increase in other income. As of June 30, 2024, the size of our portfolio decreased to $1,783,219 from $1,963,144 as of June 30, 2023, at amortized cost. As of June 30, 2024 and June 30, 2023, the weighted average yield of our total debt and income producing investments was 12.7% and 12.6%, respectively, based on amortized cost.
Previous wording
Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of March 31, 2024 and December 31, 2023, one and four of our debt investments were on non-accrual status, respectively. Non-accrual investments had a fair value of $3,792 and $38,061, which represented approximately 0.2% and 2.1% of total investments at fair value as of March 31, 2024 and December 31, 2023, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of March 31, 2024 and December 31, 2023.
Current wording
Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of June 30, 2024 and June 30, 2023, three and four of our debt investments were on non-accrual status, respectively. Non-accrual investments had a fair value of $30,209 and $34,661, which represented approximately 1.8% and 1.8% of total investments at fair value as of June 30, 2024 and June 30, 2023, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2024 and June 30, 2023.
Previous wording
The increase in other income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily driven by higher amendment fees.
Current wording
The increase in other income for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily driven by higher amendment and prepayment fees.
Previous wording
The increase in interest expense and credit facility fees for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by higher weighted average interest rates due to higher benchmark rates, partially offset by a lower average principal balance during the three months ended March 31, 2024.
Current wording
The decrease in interest expense and credit facility fees for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily driven by lower average principal balance, partially offset by higher weighted average interest rates due to higher benchmark rates during the three and six months ended June 30, 2024.
Previous wording
The increase in incentive fees was driven by higher pre-incentive fee net investment income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
The change in incentive fees for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 is driven by changes in pre-incentive fee net investment income.
Previous wording
The decrease in base management fees for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was driven by lower average gross assets as a result of net repayments on our investments.
Current wording
The decrease in base management fees for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was driven by lower average gross assets as a result of net repayments on our investments.
Previous wording
For the three months ended March 31, 2024, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of March 31, 2024. The accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4, Related Party Transactions, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on the incentive and base management fees.
Current wording
For the three and six months ended June 30, 2024, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of June 30, 2024. The accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4, Related Party Transactions, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on the incentive and base management fees.
Previous wording
The amount of and number of investments with realized gain (loss) and changes in unrealized appreciation (depreciation) for the three months ended March 31, 2024 and March 31, 2023 were as follows:
Current wording
The amount of and number of investments with realized gain (loss) and change in unrealized appreciation (depreciation) for the three and six months ended June 30, 2024 and June 30, 2023 were as follows:
Previous wording
During the three months ended March 31, 2024, we recognized a realized loss after the write-off of our investment in American Physician Partners partially offset by a realized gain from the recapitalization of our investment in Dermatology Associates. The net change in unrealized appreciation (depreciation) for the three months ended March 31, 2024 was mainly driven by the reversal of prior period unrealized appreciation (depreciation) related to these two borrowers.
Current wording
During the six month ended June 30, 2024, we recognized a realized loss after the write-off of our investment in American Physician Partners partially offset by a realized gains from the recapitalization of our investment in Dermatology Associates and from our exit of the equity investment in Legacy.com, Inc. The net change in unrealized appreciation (depreciation) for the six months ended June 30, 2024 was mainly driven by the reversal of prior period unrealized appreciation (depreciation) related to American Physician Partners and Dermatology Associates.
Previous wording
We have capitalized our business to date primarily through the issuance and sale of our common stock, asset-level financing, and the issuance of unsecured senior debt. As of March 31, 2024, we had $935,257 of outstanding consolidated indebtedness under the Credit Facility, the 2015-1R Notes and the Senior Notes as previously discussed within Portfolio and
Current wording
We have capitalized our business to date primarily through the issuance and sale of our common stock, asset-level financing, and the issuance of unsecured senior debt. As of June 30, 2024, we had $911,230 of outstanding consolidated indebtedness under the Credit Facility, the 2015-1R Notes and the Senior Notes as previously discussed within Portfolio and Investment Activity - Portfolio Financing. As of June 30, 2024, we had $399,149 of liquidity that can be used to satisfy our short-term cash requirements and working capital for our business. Refer to Note 8, Borrowings, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding our financing.
Previous wording
The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's articles supplementary (the “Articles Supplementary”). The conversion price as of March 31, 2024 was $9.03. Effective as of May 5, 2023, the Company, with the approval of the Board of Directors, including a majority of the Independent Directors, has the option to redeem all of the Preferred Stock for cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends. The holders of the Preferred Stock have the right to convert all or a portion of their shares of Preferred Stock prior to the date fixed for such redemption. Effective as of May 5, 2027, the holders of the Preferred Stock have the option to require the Company to redeem any or all of the then-outstanding Preferred Stock upon 90 days’ notice. The form of consideration used in any such redemption is at the option of the Board of Directors, including a majority of the Independent Directors, and may be cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends, or shares of common stock. Holders also have the right to redeem the Preferred Stock upon a Change in Control (as defined in the Articles Supplementary).
Current wording
The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's articles supplementary (the “Articles Supplementary”). The conversion price as of June 30, 2024 was $8.98. Effective as of May 5, 2023, the Company, with the approval of the Board of Directors, including a majority of the Independent Directors, has the option to redeem all of the Preferred Stock for cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends. The holders of the Preferred Stock have the right to convert all or a portion of their shares of Preferred Stock prior to the date fixed for such redemption. Effective as of May 5, 2027, the holders of the Preferred Stock have the option to require the Company to redeem any or all of the then-outstanding Preferred Stock upon 90 days’ notice. The form of consideration used in any such redemption is at the option of the Board of Directors, including a majority of the Independent Directors, and may be cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends, or shares of common stock. Holders also have the right to redeem the Preferred Stock upon a Change in Control (as defined in the Articles Supplementary).
Previous wording
In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q as of March 31, 2024 and December 31, 2023 in this Quarterly Report on Form 10-Q for any such exposure.
Current wording
In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q as of June 30, 2024 and December 31, 2023 for any such exposure.
Previous wording
During the three months ended March 31, 2024, we paid $66,911 related to cost of investments purchased and received $132,614 in repayments on our investments. During the three months ended March 31, 2024, we had net repayments of $25,000 on the Credit Facility and repaid $23,274 of principal on the 2015-1R Notes.
Current wording
During the six months ended June 30, 2024, we paid $142,537 related to cost of investments purchased and received $258,427 in repayments on our investments. During the six months ended June 30, 2024, we had net repayments of $22,942 on the Credit Facility and repaid $49,216 of principal on the 2015-1R Notes.
Previous wording
As of March 31, 2024 and December 31, 2023, the Company had total senior securities of $985,257 and $1,034,556, respectively, consisting of secured borrowings under the Credit Facility, the Senior Notes, the 2015-1R Notes and the Preferred
Current wording
As of June 30, 2024 and December 31, 2023, the Company had total senior securities of $961,230 and $1,034,556, respectively, consisting of secured borrowings under the Credit Facility, the Senior Notes, the 2015-1R Notes and the Preferred
Previous wording
Stock, and had asset coverage ratios of 188.0% and 183.4%, respectively. For the purposes of the asset coverage ratio, the Preferred Stock is classified as a senior security.
Current wording
Stock, and had asset coverage ratios of 189.6% and 183.4%, respectively. For the purposes of the asset coverage ratio, the Preferred Stock is classified as a senior security.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Carlyle. In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including our Investment Adviser and its affiliates.
Previous report — wording carried elsewhere
For the three months ended March 31, 2024 and March 31, 2023
Previous report — wording carried elsewhere
During the three months ended March 31, 2024, we recognized a realized loss after the write-off of our investment in American Physician Partners partially offset by a realized gain from the recapitalization of our investment in Dermatology Associates. The net change in unrealized appreciation (depreciation) for the three months ended March 31, 2024 was mainly driven by the reversal of prior period unrealized appreciation (depreciation) related to these two borrowers.
Previous report — wording carried elsewhere
Investment Activity - Portfolio Financing. As of March 31, 2024, we had $334,881 of liquidity that can be used to satisfy our short-term cash requirements and working capital for our business. Refer to Note 8, Borrowings, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding our financing.