Carlyle Secured Lending Inc
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
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-K
Period ended 2023-12-31; filed 2024-02-26.
0001544206-24-000012
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0001544206-25-000011
Item 7. 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 172 previous paragraphs and 204 current paragraphs.
116 unchanged; 48 reworded; 37 added; 7 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 24 previous and 27 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 (37)
Current report
We invest primarily in loans to middle market companies whose debt is rated below investment grade, or would likely be rated below investment grade if it was rated. These securities, which are often referred to as “junk,” have predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
Current report
•Adjusted for one-time income or expense events, the adjusted net investment income per common share (a non-GAAP financial measure) was $2.02. Refer to the Adjusted Net Investment Income and Adjusted Net Income discussion within this section for further details.
Current report
•Net investment income for the year ended December 31, 2024, after adjusting for the acceleration of debt issuance costs related to the reset of the 2015-R Notes, declined slightly from the comparable period in the prior year driven by a decrease in the average outstanding investment balance due to total repayment and sales of our investments in excess of new originations and lower spreads across the loan portfolio.
Current report
•The NAV per common share decreased to $16.80 as of December 31, 2024, from $16.99 as of December 31, 2023.
Current report
•As of December 31, 2024, non-accrual investments represented 1.0% and 0.6% of our portfolio based on cost and fair value, respectively.
Current report
•On August 2, 2024, we entered into the Merger Agreement with Carlyle Secured Lending III. In connection with the Merger Agreement, all shares of Preferred Stock issued and outstanding will be exchanged for shares of our common stock in a private placement transaction at a rate equal to the quotient of (i) the aggregate liquidation preference of the Preferred Stock and (ii) the Closing CGBD Net Asset Value per share. Refer to Note 15, Merger with CSL III, to the consolidated financial statements as of December 31, 2024 and December 31, 2023, included in Part II, Item 8 of this Form 10-K for additional information regarding the Merger Agreement, the Mergers and the Preferred Stock Exchange.
Current report
•On October 18, 2024, we completed a public offering of $300.0 million aggregate principal of 6.75% senior unsecured notes due February 18, 2030 (the “2030 Notes”). In connection with the issuance of the 2030 Notes, we entered into an interest rate swap agreement with JP Morgan Chase Bank N.A. for a total notional amounts of $300.0 million. Under the interest rate agreement, commencing on the effective date of August 18, 2025, we will receive a fixed interest rate of 6.75% and pay a floating interest rate based on the compounded average daily SOFR plus 3.235%.
Current report
•During the year ended December 31, 2024, we issued 111,321 shares for a total consideration of $2.0 million under the dividend reinvestment plan.
Current report
•On December 31, 2024, we repaid at par the $190.0 million aggregate principal of 4.50% and 4.75% unsecured notes.
Current report
Recent Developments
Current report
•On February 10, 2025, we and Cliffwater Corporate Lending Fund (“CCLF”) entered into an amendment to the Credit Fund II limited liability company agreement (as so amended, the “Amended Credit Fund II LLCA”). Pursuant to the terms of the Amended Credit Fund II LLCA, Credit Fund II distributed $2.7 million to CCLF, and we contributed $140.0 million in cash to Credit Fund II. Such distributions and contributions were accounted for as a reduction in CCLF's membership interest based on the net asset value of Credit Fund II as of December 31, 2024. On February 11, 2025, we entered into a membership interest purchase agreement to purchase CCLF's remaining membership interest for cash at the net asset value thereof as of December 31, 2024, after which Credit Fund II became a wholly owned subsidiary of CGBD and in connection therewith the CCLF board members resigned. See Note 6, Middle Market Credit Fund II, LLC, to the consolidated financial statements included in Part II, Item 8 in the Form 10-K.
Current report
•On February 18, 2025, we declared common stock dividends of $0.45 per share to be paid on April 17, 2025.
Current report
Adjusted Net Investment Income and Adjusted Net Income
Current report
On a supplemental basis, we are disclosing Adjusted Net Investment Income, Adjusted Net Investment Income Per Common Share, Adjusted Net Income and Adjusted Net Income Per Common Share each of which is calculated and presented on a basis other than in accordance with GAAP (“non-GAAP”). We use these non-GAAP financial measures internally to analyze and evaluate financial results and performance, and we believe these non-GAAP financial measures are useful to investors as an additional tool to evaluate our ongoing results and trends and to review our performance without giving effect to one-time or non-recurring investment income and expense events, including the effects on incentive fees. The presentation of these non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.
Current report
We use the non-GAAP financial measures described above internally to analyze and evaluate financial results and performance and to compare our financial results with those of other business development companies that have not had similar one-time or non-recurring events. We believe “Adjusted Net Investment Income”, “Adjusted Net Investment Income Per Common Share”, “Adjusted Net Income” and “Adjusted Net Income Per Common Share” are useful to investors as an additional tool to evaluate our ongoing results and trends without giving effect to one-time or non-recurring events and are used to evaluate our economic earnings.
Current report
The following table summarizes our Adjusted Net Investment Income, Adjusted Net Investment Income Per Common Share, Adjusted Net Income, and Adjusted Net Income Per Common Share:
Current report
(1)On July 2, 2024, Carlyle Direct Lending CLO 2015-1R LLC, a wholly owned and consolidated subsidiary of us, completed the refinancing of its outstanding notes by redeeming the notes in full and issuing new notes and loans. In connection with the refinancing, the debt issuance costs were accelerated in accordance with GAAP. Refer to Note 8, Borrowings, in the consolidated financial statements as of December 31, 2024 and December 31, 2023, included in Part II, Item 8 of this Form 10-K for more information on the refinancing.
Current report
(2)Represents commitments to a portfolio company as part of an individual transaction.
Current report
On October 18, 2024, we completed a public offering of $300.0 million aggregate principal of 6.75% senior unsecured notes due February 18, 2030 (the “2030 Notes” and together with the 2024 Notes and 2028 Notes, the “Senior Notes”). We may redeem the 2030 Notes in whole or in part at our option at any time or from time to time at a redemption price equal to the greater of (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the notes matured on January 18, 2030) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 45 basis points less (b) interest accrued to the date of redemption, or (2) 100% of the principal amount of the 2030 Notes to be redeemed, plus, in either case accrued and unpaid interest thereon. The 2030 Notes are general unsecured obligations of ours that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.
Current report
In November 2023, in connection with the issuance of the 2028 Notes, the Company entered into a five-year interest rate swap agreement with Morgan Stanley Capital Services LLC (“Morgan Stanley”) to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $85.0 million, maturing on December 1, 2028. Morgan Stanley has the ability to exercise an early termination commencing on December 1, 2025, subject to providing written notice thirty days prior. Under the interest rate swap agreement, the Company receives a fixed interest of 8.20% and pays a floating rate based on the compounded average daily SOFR rate plus 3.139%. The Company designated this interest rate swap as a hedging instrument to the 2028 Notes.
Current report
In October 2024, in connection with the issuance of the 2030 Notes, the Company entered into an interest rate swap agreement with JP Morgan Chase Bank N.A. (“JP Morgan”) to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $300.0 million, maturing on February 18, 2030. Under the interest rate agreement, commencing on the effective date of August 18, 2025, the Company receives a fixed interest rate of 6.75% and pays a floating interest rate based on the compounded average daily SOFR plus 3.235%. The Company designated this interest rate swap as a hedging instrument to the 2030 Notes.
Current report
On July 2, 2024, the Company and the 2015-1 Issuer completed a refinancing of the 2015-1R Notes (the “2015-1R Refinancing”), which resulted in the issuance of a $410.0 million collateralized loan obligation (“the “2015-1N Debt”). On the closing date of the 2015-1R Refinancing, the 2015-1 Issuer refinanced the 2015-1R Notes with 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 $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 was issued by the 2015-1 Issuer and is 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 $30 million Class C-R Notes. The following table summarizes the terms of the 2015-1N Debt tranches and their principal amount:
Current report
(1)Excludes $30 million of Class C-R notes, which are rated BBB-, accrue interest at SOFR plus spread of 3.75%, and are retained by the Company.
Current report
The following table summarizes the terms and principal amount of the 2015-1R Notes:
Current report
(1)Floating rate tranches bear interest at three-month SOFR plus a Term SOFR adjustment.
Current report
Forward Currency Contracts
Current report
In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company has entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) with the derivative counterparty, Barclays Bank PLC (the “Counterparty”), in respect of forward currency contracts. Each ISDA Master Agreement is a bilateral agreement between the Company and the Counterparty that governs over the counter derivatives, including forward currency contracts, and contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of each ISDA Master Agreement with the Counterparty permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty. As of December 31, 2024, the total unrealized appreciation (depreciation) related to forward currency contracts governed by these agreements was $1,699.
Current report
On February 10, 2025, we and CCLF entered into an amendment to the Credit Fund II limited liability company agreement (as so amended, the “Amended Credit Fund II LLCA”). Pursuant to the terms of the Amended Credit Fund II LLCA, Credit Fund II distributed $2.7 million to CCLF, and we contributed $140.0 million in cash to Credit Fund II. Such distributions and contributions were accounted for as a reduction in CCLF's membership interest based on the net asset value of Credit Fund II as of December 31, 2024. On February 11, 2025, we entered into a membership interest purchase agreement to purchase CCLF's remaining membership interest for cash at the net asset value thereof as of December 31, 2024, after which Credit Fund II became a wholly owned subsidiary of CGBD and in connection therewith the CCLF board members resigned.
Current report
Consolidated Results of Operations
Current report
The increase in base management fees was driven by higher average gross assets as a result of net purchases of new investments for the three months ended December 31, 2024 compared to the three months ended September 30, 2024.
Current report
During the three months ended December 31, 2024, we recognized a realized loss after the restructure of our investment in Jeg’s Automotive, LLC. During the three months ended September 30, 2024, we recognized a realized loss after the sale of our investments in Emergency Communications Network, LLC and Stonegate Pub Company Bidco Limited partially offset by a realized gain from the sale of our equity investment in Chartis Holding, LLC.
Current report
The net change in unrealized appreciation (depreciation) is driven by changes in various inputs used in our valuation methodology, including but not limited to enterprise value multiples, borrower leverage ratios, borrower ratings, and the impact of exits. The net change in unrealized appreciation (depreciation) is also driven by the reversal of prior period unrealized depreciation related to Jeg’s Automotive, LLC., an increase in fair value of investments in SPF Borrower, LLC and an increase in value of our investment in the Credit Fund, partially offset by a decrease in value of our investment in Aimbridge Acquisition Co., Inc. and our investment in Credit Fund II.
Current report
On May 5, 2020, the Company issued and sold 2,000,000 shares of Preferred Stock to an affiliate of
Current report
the Preferred Stock for common stock pursuant to the Preferred Stock Exchange. Refer to Note 15, Merger with CSL III, to the consolidated financial statements as of December 31, 2024 and December 31, 2023, included in Part II, Item 8 of this Form 10-K for additional information regarding the Merger Agreement, the Mergers and the Preferred Stock Exchange.
Current report
(1)Reflects cumulative convertible preferred securities as equity, net of excess cash held at period end, which was $61.5 million and $38.5 million as of December 31, 2024 and December 31, 2023, respectively.
Current report
(2)Reflects cumulative convertible preferred securities as debt. These securities are considered "senior securities" for the purposes of calculating asset coverage pursuant to the Investment Company Act.
Removed paragraphs (7)
Previous report
•The NAV per common share was $16.99 as of December 31, 2023 and $16.99 as of December 31, 2022, as the net investment income in excess of our dividends was offset by net losses on our portfolio.
Previous report
•We completed the issuance and sale of $85.0 million in aggregate principal amount of 8.20% notes due December 1, 2028, listed on the Nasdaq Global Select Market, under the trading symbol “CGBDL”.
Previous report
•We closed $102.0 million in total upsize on our credit facility bringing total commitments to $790.0 million.
Previous report
The following table details the 2015-1R Notes:
Previous report
(1)With the exception of the Aaa/AAA Class A-1-3-R Notes, the benchmark rate on the 2015-1R Notes is 3 month SOFR plus a Term SOFR adjustment as of December 31, 2023 and 3 month LIBOR as of December 31, 2022. The Aaa/AAA Class A-1-3-R Notes accrue interest at a fixed rate.
Previous report
Net change in unrealized appreciation in our investments for the year ended December 31, 2023 compared to the comparable period in 2022 was primarily driven by improving credit fundamentals in certain 4 and 5 risk rated investments as well as reversals of prior period unrealized losses on our investments in DermaRite Industries, LLC and PPT Management Holdings, LLC. The net change in unrealized depreciation for the year ended December 31, 2023 compared to the comparable period in 2022 was primarily driven by depreciation in the value of our investments in American Physician Partners, LLC.
Previous report
Net change in unrealized appreciation (depreciation) in our investments for the three months ended December 31, 2023 was primarily driven by improving credit fundamentals in certain 4 risk rated investments and positive impact of FX rates.
Reworded paragraphs (48)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of this Form 10-K “Risk Factors.” Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.” 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 this Form 10-K. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.
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 professionally 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.
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 190 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 $106.5 million or $2.10 per common share. Dividends declared on common shares were $89.4 million, or $1.76 per share. Net investment income for the year ended December 31, 2023 included a $34.4 million increase in total investment income from the comparable period in 2022.
Current wording
•Net investment income, inclusive of the preferred dividend, was $101.8 million or $2.00 per common share.
Previous wording
•As of December 31, 2023, we held 173 investments across 128 portfolio companies and 26 industries for a total fair value of $1.8 billion.
Current wording
•As of December 31, 2024, we held 189 investments across 135 portfolio companies and 28 industries for a total fair value of $1.8 billion.
Previous wording
•During the year ended December 31, 2023, we had investment fundings of $242.6 million and investment repayments of $369.0 million.
Current wording
•During the year ended December 31, 2024, we had investment fundings of $509.0 million and investment repayments of $569.3 million.
Previous wording
•Total liquidity as of December 31, 2023 was $420.1 million in cash and undrawn debt capacity.
Current wording
•Total liquidity as of December 31, 2024 was $565.7 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 December 31, 2023, we recorded basic earnings per common share of $0.57, declared a dividend of $0.44 per common share and earned $0.56 of net investment income per common share. For the year ended December 31, 2023, we recorded basic earnings per common share of $1.75, declared dividends of $1.76 per common share and earned $2.10 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 December 31, 2024, we recorded basic earnings per common share of $0.40, declared a dividend of $0.45 per common share and earned $0.47 of net investment income per common share. For the year ended December 31, 2024, we recorded basic earnings per common share of $1.68, declared dividends of $1.87 per common share and earned $2.00 of net investment income per common share.
Previous wording
The following table sets forth the calculation of basic and diluted earnings per share (dollar amounts in thousands, except per share data):
Current wording
The following table sets forth the calculation of basic and diluted earnings per share (dollar amounts in thousands, except share and per share data):
Previous wording
For the years ended December 31, 2023, 2022 and 2021, we declared dividends per common share of $1.76, $1.64 and $1.50, respectively. For the years ended December 31, 2023 and 2022, our NAV per share was $16.99 and $16.99, respectively.
Current wording
For the years ended December 31, 2024 and 2023, we declared dividends per common share of $1.87 and $1.76, respectively. As of December 31, 2024 and 2023, our NAV per share was $16.80 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 December 31, 2023. 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. Actual yields earned over the life of each investment could differ materially from the yields presented above. Effective March 31, 2023, weighted average yields exclude investments placed on non-accrual status. Prior periods were conformed to the current presentation. 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 December 31, 2023.
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 December 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 11.6% as of December 31, 2024.
Previous wording
(2)For the years ended December 31, 2023 and 2022, 100.0% of new funded debt investments were at floating interest rates.
Current wording
(3)For the years ended December 31, 2024 and 2023, 99.0% and 100.0% of new funded debt investments were at floating interest rates, respectively.
Previous wording
See the Consolidated Schedules of Investments as of December 31, 2023 and 2022 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for more information on these investments, including a list of companies and type and amount of investments.
Current wording
See the Consolidated Schedules of Investments as of December 31, 2024 and 2023 to the consolidated financial statements as of December 31, 2024 and December 31, 2023, included in Part II, Item 8 of this Form 10-K for more information on these investments, including a list of companies and type and amount of investments.
Previous wording
As of December 31, 2023 and 2022, the weighted average Internal Risk Rating of our debt investment portfolio was 2.2. As of December 31, 2023 and 2022, four and three of our debt investments were assigned an Internal Risk Rating of 4-5, respectively.
Current wording
As of December 31, 2024 and 2023, the weighted average Internal Risk Rating of our debt investment portfolio was 2.1 and 2.2, respectively. As of December 31, 2024 and 2023, three and four of our debt investments were assigned an Internal Risk Rating of 4 or 5, respectively.
Previous wording
(1)For information regarding our non-accrual policy, see Note 2, Significant Accounting Policies, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Current wording
(1)For information regarding our non-accrual policy, see Note 2, Significant Accounting Policies, to the consolidated financial statements as of December 31, 2024 and December 31, 2023, included in Part II, Item 8 of this Form 10-K.
Previous wording
Our primary sources of financing consist of Secured Debt, Unsecured Debt, and Securitizations, which are presented on the Consolidated Statements of Assets and Liabilities as Debt and secured borrowings. Refer to Note 8, Borrowings, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information regarding our financing. The following table details those sources of financing:
Current wording
Our primary sources of financing consist of secured debt, unsecured debt, and securitizations, which are presented on the Consolidated Statements of Assets and Liabilities as Debt and secured borrowings. Refer to Note 8, Borrowings, to the
Previous wording
On December 30, 2019, we closed a private offering of $115.0 million in aggregate principal amount of 4.75% senior unsecured notes due December 31, 2024 and on December 11, 2020, we issued an additional $75.0 million aggregate principal amount of 4.50% senior unsecured notes due December 31, 2024 (together the “2024 Notes”). The interest rates of the 2024 Notes are subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event, subject to certain exceptions, the 2024 Notes cease to have an investment grade rating. The 2024 Notes are general unsecured obligations of ours that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.
Current wording
On December 30, 2019, we closed a private offering of $115.0 million in aggregate principal amount of 4.75% senior unsecured notes due December 31, 2024 and on December 11, 2020, we issued an additional $75.0 million aggregate principal amount of 4.50% senior unsecured notes due December 31, 2024 (together the “2024 Notes”). The interest rates of the 2024 Notes were subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event, subject to certain exceptions, the 2024 Notes ceased to have an investment grade rating. The 2024 Notes were general unsecured obligations of ours that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us. The 2024 Notes were repaid in full at maturity on December 31, 2024.
Previous wording
On November 20, 2023, we completed a public offering of $85.0 million in aggregate principal of 8.20% senior unsecured notes due December 1, 2028 (the “2028 Notes” and together with the 2024 Notes, the “Senior Notes”). We may redeem the 2028 Notes in whole or in part at our option on our after December 1, 2025. The 2028 Notes are general unsecured obligations of ours that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.
Current wording
On November 20, 2023, we completed a public offering of $85.0 million in aggregate principal of 8.20% senior unsecured notes due December 1, 2028 (the “2028 Notes”). We may redeem the 2028 Notes in whole or in part at our option on or after December 1, 2025 at a redemption price of 100% of the outstanding principal amount of 2028 Notes to be redeemed plus accrued and unpaid interest thereon. The 2028 Notes are general unsecured obligations of ours that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by us.
Previous wording
The following table details the carrying value of our 2024 Notes and 2028 Notes as of December 31, 2023 and 2022:
Current wording
The following table details the carrying value of our 2024 Notes, 2028 Notes, and 2030 Notes as of December 31, 2024 and 2023:
Previous wording
On June 26, 2015, we completed the 2015-1 Debt Securitization, which was refinanced on August 30, 2018 (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the previously issued securitized notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes were issued by Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of us. The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.
Current wording
On June 26, 2015, we completed the 2015-1 Debt Securitization, which was refinanced on August 30, 2018 (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the previously issued securitized notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes were issued by Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of us. The 2015-1R Notes were secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.
Previous wording
We received 100% of the $125,900 in nominal value of the non-interest bearing preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the our contribution to the 2015-1 Issuer of the initial closing date loan portfolio. Following the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer Preferred Interests were reduced by approximately $21,375 to approximately $104,525.
Current wording
We received 100% of the $125,900 in nominal value of the non-interest bearing preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for our contribution to the 2015-1 Issuer of the initial closing date loan portfolio. Following the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer Preferred Interests were reduced by approximately $21,375 to approximately $104,525.
Previous wording
On June 30, 2023, the 2015-1R Notes were amended to transition the benchmark rate to the Term SOFR Rate plus a Term SOFR adjustment (LIBOR prior to the amendment). The 2015-1R Notes reinvestment period ended October 15, 2023 and have a maturity date of October 15, 2031. In connection with the initial financing, we have made customary representations, warranties and covenants to the 2015-1 Issuer.
Current wording
On June 30, 2023, the 2015-1R Notes were amended to transition the benchmark rate to the Term SOFR Rate plus a Term SOFR adjustment (LIBOR prior to the amendment). The 2015-1R Notes reinvestment period ended October 15, 2023 and had a maturity date of October 15, 2031. In connection with the initial financing, we made customary representations, warranties and covenants to the 2015-1 Issuer.
Previous wording
Since inception of Credit Fund and through December 31, 2023, 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 $181,960, respectively, as of December 31, 2023 and $193,001 and $190,065, respectively, as of December 31, 2022.
Current wording
Since inception of Credit Fund and through December 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 $182,636, respectively, as of December 31, 2024 and $193,001 and $181,960, respectively, as of December 31, 2023.
Previous wording
Our portion of the dividends declared by Credit Fund was $22,000 and $20,500 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, our annualized dividend yield from Credit Fund was 11.4%.
Current wording
Our portion of the dividends declared by Credit Fund was $22,000 and $22,000 for the years ended December 31, 2024 and 2023, respectively. As of both December 31, 2024 and 2023, our annualized dividend yield from Credit Fund was 11.4%.
Previous wording
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2023 and 2022. Weighted average yield on debt 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 on debt 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. Actual yields earned over the life of each investment could differ materially from the yields presented above. Effective March 31, 2023, weighted average yields exclude investments placed on non-accrual status. Prior periods were conformed to the current presentation.
Current wording
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2024 and 2023. Weighted average yield on debt 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 on debt 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.
Previous wording
On November 3, 2020, we and Cliffwater Corporate Lending Fund (“CCLF”) entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in our consolidated financial statements. Credit Fund II is managed by a four-member board, on which we and CCLF have equal representation. We and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of our respective membership interests, we and CCLF each indirectly bear an allocable share of all expenses and other obligations of Credit Fund II.
Current wording
On November 3, 2020, we and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in our consolidated financial statements. Credit Fund II is managed by a four-member board, on which we and CCLF have equal representation. As of December 31, 2024, we and CCLF had 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of our respective membership interests, we and CCLF each indirectly bear an allocable share of all expenses and other obligations of Credit Fund II.
Previous wording
Since inception of Credit Fund II and through December 31, 2023, 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 $67,419, respectively, as of December 31, 2023 and $78,096 and $72,957, respectively, as of December 31, 2022. Our portion of the dividends declared by Credit Fund II was $11,105 and $10,348 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, our annualized dividend yield from Credit Fund II was 14.2%.
Current wording
Since inception of Credit Fund II and through December 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 $63,997, respectively, as of December 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 $12,906 and $11,105 for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, our annualized dividend yield from Credit Fund II was 20.9% and 14.2%, respectively.
Previous wording
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2023 and 2022. Weighted average yield on debt 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 on debt 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. Actual yields earned over the life of each investment could differ materially from the yields presented above. Effective March 31, 2023, weighted average yields exclude investments placed on non-accrual status. Prior periods were conformed to the current presentation.
Current wording
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2024 and 2023. Weighted average yield on debt 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 on debt 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.
Previous wording
The increase in investment income for the year ended December 31, 2023 from the comparable period in 2022 was primarily driven by an increase in interest income from higher weighted average interest rates partially offset by a decrease in other income primarily due to lower underwriting, amendment and prepayment fees. As of December 31, 2023, the size of our portfolio decreased to $1,904,895 from $2,049,975 as of December 31, 2022 at amortized cost. As of December 31, 2023, the weighted average yield of our total debt and income producing assets increased to 12.7% from 11.8% as of December 31, 2022, on amortized cost, primarily due to higher benchmark interest rates.
Current wording
The decrease in investment income for the year ended December 31, 2024 from the comparable period in 2023 was primarily driven by a decrease in the average outstanding investment balance due to total repayments and sales of our investments in excess of new originations and lower spreads across the loan portfolio. The size of the portfolio at amortized cost was $1,848,212, $1,904,895, and $2,049,975 as of December 31, 2024, December 31, 2023, and December 31, 2022, respectively. As of December 31, 2024, the weighted average yield of our total debt and income producing assets decreased to 11.7% from 12.7% as of December 31, 2023, 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 December 31, 2023 and September 30, 2023, four of our debt investments were on non-accrual status. Non-accrual investments had a fair value of $38,061 and $36,600, respectively, which represented approximately 2.1% and 2.0% of total investments at fair value, respectively, as of December 31, 2023 and September 30, 2023. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2023 and September 30, 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 December 31, 2024 and 2023, four and four of our income producing investments, respectively, were on non-accrual status. Non-accrual investments had a fair value of $10,393 and $38,061, respectively, which represented approximately 0.6% and 2.1% of total investments at fair value, respectively, as of December 31, 2024 and 2023. The remaining income producing investments were performing and current on their interest payments as of December 31, 2024 and 2023.
Previous wording
The increase in dividend income for the year ended December 31, 2023 from the comparable period in 2022 was primarily driven by an increase in dividends declared by the investment funds as a result of higher net investment income earned by each investment fund.
Current wording
The increase in dividend income for the year ended December 31, 2024 from the comparable period in 2023 was primarily driven by an increase in dividends declared by Credit Fund II for the quarter ended December 31, 2024 to distribute previously retained net investment income.
Previous wording
The decrease in other income for the year ended December 31, 2023 from the comparable period in 2022 was primarily driven by lower underwriting, amendment and prepayment fees.
Current wording
The decrease in other income for the year ended December 31, 2024 from the comparable period in 2023 was primarily driven by lower prepayment fees partially offset by higher amendment fees.
Previous wording
The increase in interest expense and credit facility fees for the year ended December 31, 2023 compared to the comparable period in 2022 was primarily driven by higher benchmark interest rates.
Current wording
The decrease in interest expense and credit facility fees for the year ended December 31, 2024 compared to the comparable period in 2023 was primarily driven by the lower average principal balance of borrowings outstanding, partially offset by the acceleration of debt issuance costs as a result of the refinancing of the 2015-1R Notes.
Previous wording
The decrease in base management fees for the year ended December 31, 2023 from the comparable period in 2022 was driven by lower average fair value of investments during the year.
Current wording
The decrease in base management fees for the year ended December 31, 2024 from the comparable period in 2023 was driven by lower average gross assets during the year.
Previous wording
The increase in incentive fees for the year ended December 31, 2023 from the comparable period in 2022 was driven by higher pre-incentive fee net investment income.
Current wording
The decrease in incentive fees for the year ended December 31, 2024 from the comparable period in 2023 was driven by lower pre-incentive fee net investment income.
Previous wording
For the years ended December 31, 2023 and 2022, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2023 and 2022, respectively. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“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 consolidated financial statements included in Part II, Item 8 of this Form 10-K for more information on our incentive and base management fees.
Current wording
For the years ended December 31, 2024 and 2023, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2024 and 2023, respectively. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“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 consolidated financial statements as of December 31, 2024 and December 31, 2023, included in Part II, Item 8 of this Form 10-K for more information on our incentive and base management fees.
Previous wording
Net change in unrealized appreciation (depreciation) is driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.
Current wording
Net realized gain (loss) on investments during the year ended December 31, 2024 was primary driven by realized losses after the write-off of our investment in American Physician Partners, the sale of our investment in Emergency Communications Network, LLC, and the restructure of our investment in Jeg’s Automotive, LLC, partially offset by realized gains from the recapitalization of our investment in Dermatology Associates and the sale of our equity investment in Legacy.com. Net change in unrealized appreciation (depreciation) is driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits. The net change in unrealized appreciation (depreciation) for the year ended December 31, 2024 was mainly driven by the reversal of prior period unrealized depreciation related to American Physician Partners, partially offset by the reversal of prior period unrealized appreciation related to Dermatology Associates, and unrealized depreciation related to Aimbridge Acquisition Co., Inc.
Previous wording
The increase in investment income for the three months ended December 31, 2023 as compared to the three months ended September 30, 2023 was primarily driven an increase in other income, including increased amendment and prepayment fees. As of December 31, 2023, the size of our portfolio decreased to $1,904,895 from $1,926,884 as of September 30, 2023, at amortized cost. As of December 31, 2023 and September 30, 2023, the weighted average yield of our total debt and income producing investments was 12.7% based on amortized cost.
Current wording
The increase in investment income for the three months ended December 31, 2024, as compared to the three months ended September 30, 2024, was primarily driven by an increase in dividends declared by Credit Fund II and an increase in the average outstanding investment balance, partially offset by lower benchmark rates and lower spreads across the loan portfolio. As of December 31, 2024, the size of our portfolio increased to $1,848,212 from $1,757,621 as of September 30, 2024, at amortized cost. As of December 31, 2024 and September 30, 2024, the weighted average yield of our total debt and income producing investments was 11.7% and 11.9%, 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 December 31, 2023 and 2022, four and three of our debt investments, respectively, were on non-accrual status. Non-accrual investments had a fair value of $38,061 and $57,932, respectively, which represented approximately 2.1% and 2.9% of total investments at fair value, respectively, as of December 31, 2023 and 2022. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2023 and 2022.
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 December 31, 2024 and September 30, 2024, four and two of our income producing investments were on non-accrual status, respectively. Non-accrual investments had a fair value of $10,393 and $10,472, which represented approximately 0.6% and 0.6% of total investments at fair value as of December 31, 2024 and
Previous wording
The increase in other income for the three months ended December 31, 2023 from the three months ended September 30, 2023 was primarily driven by higher amendment and prepayment fees.
Current wording
The increase in other income for the three months ended December 31, 2024 as compared to the three months ended September 30, 2024 was primarily driven by an increase in amendment fees, partially offset by a decrease in prepayment fees.
Previous wording
The increase in interest expense and credit facility fees for the three months ended December 31, 2023 from the three months ended September 30, 2023 was primarily driven by the issuance of the 2028 Notes during the three months ended December 31, 2023.
Current wording
The increase in interest expense and credit facility fees was primarily driven by the issuance of the 2030 Notes during the three months ended December 31, 2024.
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•Dividends declared on common shares were $95.1 million, or $1.87 per share.
Current report — wording carried from elsewhere
September 30, 2024, respectively. The remaining income producing investments were performing and current on their interest payments as of December 31, 2024 and September 30, 2024.
Current report — wording carried from elsewhere
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net change in unrealized appreciation (depreciation) is driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.