Carlyle Secured Lending, Inc.
For the period ended Mar 31, 2025. Filed May 6, 2025.
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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.
Mar 31, 2025 · Filed May 6, 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-Q
Period ended 2024-09-30; filed 2024-11-05.
0001544206-24-000067
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001544206-25-000047
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 209 previous paragraphs and 196 current paragraphs.
106 unchanged; 68 reworded; 17 added; 28 removed; 7 previous and 5 current paragraphs rearranged.
Tables are not compared: 26 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 (17)
Current report
•the ability to realize the benefits of the CSL III Merger;
Current report
First Quarter 2025 Highlights
Current report
•During the three months ended March 31, 2025, our investments balance increased from $1.8 billion to $2.2 billion. The main components of the increase in the investment balance were (i) $178.3 million in new investments, (ii) $198.8 million assumed from the Credit Fund II Purchase, and (iii) $487.9 million assumed from the CSL III Merger. These components were partially offset by $277.0 million in principal sales and repayments and a $62.5 million return of capital distribution from Credit Fund.
Current report
•On March 12, 2025, the Company amended and restated the Credit Facility. As a result of the amendment, total commitments of the Credit Facility increased to $935.0 million and the maturity date was extended to March 12, 2030.
Current report
•On March 27, 2025, we completed the previously announced merger with CSL III. In accordance with the terms of the Merger Agreement, we issued an aggregate of 18,935,108 shares of our common stock to former CSL III shareholders and paid cash in lieu of fractional shares. Commencing on the completion of the merger, all activity is consolidated in these unaudited consolidated financial statements. Refer to Note 15, Merger with CSL III, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the CSL III Merger.
Current report
•On March 27, 2025, all 2,000,000 shares of the Company’s Preferred Stock were exchanged for 3,004,808 shares of the Company’s common stock, based on an aggregate $50,000 liquidation preference and a closing net asset value per share of $16.64.
Current report
•On March 28, 2025, the Company entered into an equity distribution agreement with certain placement agents. The agreement provides for the offer and sale of up to $150.0 million in aggregate offering amount of the Company’s common stock from time to time through an “at-the-market” (“ATM”) offering, as defined in Rule 415 under the Securities Act of 1933. The minimum price per share on any day at which common stock may be sold under the ATM program will not be below the then-current net asset value per share. Refer to Note 10, Net Assets, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the ATM program.
Current report
(1)Represents the difference between GAAP amortization under the asset acquisition method of accounting in accordance with ASC 850 and management’s non-GAAP measure of amortization related to assets acquired in connection with the CSL III Merger on March 27, 2025, and the Credit Fund II Purchase on February 11, 2025. This adjustment reflects management’s view of the economic yield on the acquired assets and is consistent with the internal evaluation of performance.
Current report
(1)Excludes principal amounts relating to the funding/purchase and subsequent consolidation of the investment in Credit Fund II as a result of the Credit Fund II Purchase.
Current report
Credit Facilities
Current report
Effective March 27, 2025, as a result of the completion of the CSL III Merger, we succeeded to the obligations of CSL III under a senior secured revolving credit facility (as amended, the “CSL III SPV Credit Facility” and together with the Credit Facility, the “Credit Facilities”) previously entered into by CSL III SPV on September 30, 2022. The CSL III SPV Credit Facility was most recently amended on March 27, 2025, and may be further amended from time to time. The CSL III SPV Credit Facility provides for secured borrowings of up to $250,000, subject to availability under the CSL III SPV Credit Facility and borrowing restrictions under the Investment Company Act. The CSL III SPV Credit Facility has a revolving period through September 30, 2025 and a stated maturity date of September 30, 2030, with a one-year extension option available at the election of CSL III SPV. Borrowings may be made in U.S. Dollars and bear interest initially at a rate equal to three-month SOFR (or, if applicable, a base rate comprised of the prime rate or the federal funds rate plus 0.50%) plus 2.85%. CSL III SPV also pays an unused commitment fee of 0.30% per annum on undrawn amounts under the CSL III SPV Credit Facility. Payments of interest and fees are made quarterly.
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”). 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
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 March 31, 2025, the total unrealized appreciation (depreciation) related to forward currency contracts governed by these agreements was $(1,495).
Current report
(1)At par/principal amount.
Current report
During the three months ended March 31, 2025, we recognized a realized loss related to the restructuring of our investment in Aimbridge Acquisition Co., Inc. from debt to equity and the consolidation of our investment in Credit Fund II as a result of the Credit Fund II Purchase. During the three months ended December 31, 2024, we recognized a realized loss related to the restructuring of our investment in Jeg’s Automotive, LLC.
Removed paragraphs (28)
Previous report
•the ability of the parties to consummate the Mergers on the expected timeline, or at all;
Previous report
•the ability to realize the anticipated benefits of the Mergers, including the expected elimination of certain expenses and costs due to the Mergers;
Previous report
•the percentage of our stockholders voting in favor of the proposals submitted for their approval;
Previous report
•the possibility that competing offers or acquisition proposals will be made;
Previous report
•the possibility that any or all of the various conditions to the consummation of the Mergers may not be satisfied or waived;
Previous report
•risks related to diverting management’s attention from ongoing business operations;
Previous report
•risk that stockholder litigation in connection with the Mergers may result in significant costs of defense and liability;
Previous report
•any potential termination of the Merger Agreement.
Previous report
Third Quarter 2024 Highlights
Previous report
•During the three months ended September 30, 2024, we had investment fundings of $143.4 million and investment repayments of $171.2 million.
Previous report
•On August 2, 2024, we entered into a 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 14, Merger with CSL III, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the Merger Agreement, the Mergers and the Preferred Stock Exchange.
Previous 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 unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on the refinancing.
Previous report
Credit Facility
Previous report
(1)The unused portion is the amount upon which commitment fees are based.
Previous report
(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
Previous report
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.
Previous report
The following table summarizes the terms and principal amount of the 2015-1R Notes:
Previous report
(1)Floating rate tranches bear interest at three-month SOFR plus a Term SOFR adjustment.
Previous report
Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II's initial portfolio was funded in November 2020 with existing senior secured debt investments contributed by us and as part of the transaction, we determined that the contribution met the requirements under ASC 860, Transfers and Servicing. Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of our representatives and one of CCLF's representatives. Therefore, although we own more than 25% of the voting securities of Credit Fund II, we do not believe that we have control over Credit Fund II (other than for purposes of the Investment Company Act). Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements.
Previous report
Since inception of Credit Fund II and through September 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 $67,107, respectively, as of September 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 $2,776 and $2,776 for the three months ended
Previous report
The increase in other income for the three months ended September 30, 2024 as compared to the three months ended June 30, 2024 was primarily driven by an increase in prepayment fees.
Previous report
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.
Previous report
For the three and nine months ended September 30, 2024 and September 30, 2023
Previous report
Our Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference”) plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends on our Preferred Stock are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at our option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock.
Previous report
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 September 30, 2024 was $8.92. 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). Refer to Note 14, Merger with CSL III, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the Merger Agreement, the Mergers and the Preferred Stock Exchange.
Previous report
The following table presents our certain capitalization ratios:
Previous report
(1)Reflects cumulative convertible preferred securities as equity, net of excess cash held at period end, which was $38.5 million as of September 30, 2024.
Previous 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.
Reworded paragraphs (68)
Previous wording
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 wording
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except share and per share data, unless otherwise indicated)
Previous wording
•the current inflationary environment, and its impact on our portfolio companies and on the industries in which we invest;
Current wording
•the level of inflation, and its impact on our portfolio companies and on the industries in which we invest;
Previous wording
•the impact on our business of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;
Current wording
•the impact on our business of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies, including those caused by tariffs and trade disputes with other countries;
Previous wording
•uncertainty surrounding Russia’s military invasion of Ukraine and the impact of geopolitical tensions in other regions such as the Middle East, and developing tensions between China and the United States;
Current wording
•uncertainty surrounding Russia’s military invasion of Ukraine and the impact of geopolitical tensions in other regions such as the Middle East, the imposition of tariffs and developing tensions between China and the United States;
Previous wording
•the expected synergies and savings associated with the Mergers;
Current wording
•the expected synergies and savings associated with the CSL III Merger;
Previous wording
•the combined company’s plans, expectations, objectives and intentions, as a result of the Mergers; and
Current wording
•the combined company’s plans, expectations, objectives and intentions, as a result of the CSL III Merger.
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” 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”).
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” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2024 (our “2024 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” 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.
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 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 our 2024 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-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 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 $24.0 million or $0.47 per common share.
Current wording
•Net investment income, inclusive of the preferred dividend, was $20.8 million or $0.40 per common share.
Previous wording
•Adjusted for one-time expenses related to the reset of the 2015-1R Notes, the adjusted net investment income per share (a non-GAAP financial measure) was $0.49. Refer to the Adjusted Net Investment Income and Adjusted Net Income discussion within this section for further details.
Current wording
•Adjusted for the financial impact of the purchase premium attributed to the CSL III Merger and purchase discount attributed to the Credit Fund II Purchase, the adjusted net investment income per common share (a non-GAAP financial measure) was $0.41. Refer to the Adjusted Net Investment Income and Adjusted Net Income discussion within this section for further details.
Previous wording
•Dividends declared on common shares for the third quarter of 2024 totaled $23.9 million, or $0.47 per share.
Current wording
•Dividends declared on common shares were $22.9 million, or $0.45 per share.
Previous wording
•Net investment income for the three months ended September 30, 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 primarily due to a decrease in portfolio size, partially offset by lower non-accruals.
Current wording
•Net investment income for the three months ended March 31, 2025 declined from the comparable period in the prior year, primarily due to lower yields on the portfolio driven by the combination of lower base rates, lower new issue spreads, the repricing of existing loans and an increase in non-accruals.
Previous wording
•The NAV per common share decreased to $16.85 as of September 30, 2024, from $16.95 as of June 30, 2024.
Current wording
•The NAV per common share decreased to $16.63 as of March 31, 2025, from $16.80 as of December 31, 2024.
Previous wording
•As of September 30, 2024, we held 175 investments across 128 portfolio companies and 26 industries for a total fair value of $1.7 billion.
Current wording
•As of March 31, 2025, we held 195 investments across 138 portfolio companies and 28 industries for a total fair value of $2.2 billion.
Previous wording
•As of September 30, 2024, non-accrual investments represented 1.2% and 0.6% of our portfolio based on cost and fair value, respectively.
Current wording
•As of March 31, 2025, non-accrual investments represented 2.2% and 1.6% of our portfolio based on cost and fair value, respectively.
Previous wording
Middle Market Credit Fund II, LLC (“Credit Fund II”)
Current wording
•On February 11, 2025, we completed a series of transactions with CCLF that resulted in our 100% ownership in Credit Fund II, which is now a wholly owned subsidiary of CGBD (the “Credit Fund II Purchase”). See Note 6, Middle Market Credit Fund II, LLC, to the unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
Previous wording
•On July 17, 2024, we issued 53,517 shares for a total consideration of $1.0 million under the dividend reinvestment plan.
Current wording
•During the three months ended March 31, 2025, we issued 56,803 shares for a total consideration of $1.1 million through the dividend reinvestment plan and the ATM program.
Previous wording
•Total liquidity as of September 30, 2024 was $354.8 million in cash and undrawn debt capacity.
Current wording
•Total liquidity as of March 31, 2025 was $858.5 million in cash and undrawn debt capacity.
Previous wording
•On November 4, 2024, we declared common stock dividends of $0.45 per share to be paid on January 17, 2025.
Current wording
•On April 29, 2025, we declared common stock dividends of $0.40 per share to be paid on July 17, 2025.
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 September 30, 2024, we recorded basic earnings per common share of $0.37, declared a dividend of $0.47 per common share and earned $0.47 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 March 31, 2025, we recorded basic earnings per common share of $0.25, declared a dividend of $0.45 per common share and earned $0.40 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 three months ended September 30, 2024 and June 30, 2024, we declared dividends per common share of $0.47 and $0.47, respectively. As of September 30, 2024 and December 31, 2023, our NAV per share was $16.85 and $16.99, respectively.
Current wording
For the three months ended March 31, 2025 and December 31, 2024, we declared dividends per common share of $0.45 and $0.45, respectively. As of March 31, 2025 and December 31, 2024, our NAV per share was $16.63 and $16.80, respectively.
Previous wording
Our primary operating expenses include: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement; (ii) debt service and other costs of borrowings or other financing arrangements; (iii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement; and (iv) other operating expenses summarized below:
Current wording
Our primary operating expenses include: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement; (ii) debt service and other costs of borrowings or other financing arrangements; (iii) costs and other expenses and our allocable portion of overhead incurred by our
Previous wording
On a supplemental basis, we are disclosing Adjusted Net Investment Income, Adjusted Net Investment Income Per Share, Adjusted Net Income and Adjusted Net Income Per 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 wording
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 (i) the amortization/accretion resulting from the new cost basis of the investments acquired and accounted for under the acquisition method of accounting in accordance with ASC 805 and (ii) the purchase 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.
Previous wording
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 Share”, “Adjusted Net Income” and “Adjusted Net Income Per 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 wording
We believe that excluding the financial impact of the purchase premium in the above non-GAAP financial measures is useful for investors as this is a non-cash expense/loss and is one method we use to measure our operations. In addition, 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 do not have similar financial impacts from asset acquisitions and 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 these considerations and are used to evaluate our economic earnings.
Previous wording
The following table summarizes our Adjusted Net Investment Income, Adjusted Net Investment Income Per Share, Adjusted Net Income, and Adjusted Net Income Per Share:
Current wording
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:
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 September 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 11.8% as of September 30, 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 March 31, 2025. 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 10.7% as of March 31, 2025.
Previous wording
(2)Weighted average yield for total investments includes Credit Fund and Credit Fund II, as well as income producing equity investments.
Current wording
(2)Weighted average yield for total investments includes Credit Fund, as well as income producing equity investments.
Previous wording
(1)Based on cost/proceeds of equity activity.
Current wording
(2)Based on cost/proceeds of equity activity.
Previous wording
(2)Represents commitments to a portfolio company as part of an individual transaction.
Current wording
(3)Represents commitments to a portfolio company as part of an individual transaction.
Previous wording
(3)For the three months ended September 30, 2024, 100.0% of new funded debt investments were at floating interest rates.
Current wording
(4)For the three months ended March 31, 2025, 100.0% of new funded debt investments were at floating interest rates.
Previous wording
As of September 30, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our debt investment portfolio was 2.2. As of September 30, 2024 and December 31, 2023, two and four of our debt investments were assigned an Internal Risk Rating of 4-5, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, the weighted average Internal Risk Rating of our debt investment portfolio was 2.1. As of March 31, 2025 and December 31, 2024, four and three of our debt investments were assigned an Internal Risk Rating of 4 or 5, respectively.
Previous wording
On March 21, 2014, we closed on a senior secured revolving credit facility (the “Credit Facility”), as amended from time to time. The maximum principal amount of the Credit Facility is $790,000, pursuant to the terms of the agreement, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of our portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that we may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $1,185,000 through the exercise by us of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by us. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
Current wording
On March 21, 2014, we closed on a senior secured revolving credit facility (the “Credit Facility”), which was most recently amended and restated on March 12, 2025, and may be further amended from time to time. The maximum principal amount of the Credit Facility is $935,000, pursuant to the terms of the agreement, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of our portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that we may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $1,402,500 through the exercise by us of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $75,000 limit for swingline loans and a $30,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by us. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, stockholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
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
•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 pays a floating interest rate based on the compounded average daily SOFR plus 3.23%.
Current wording
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.
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
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
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 $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 wording
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.
Previous wording
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 wording
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:
Showing the first 40 of 68 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Administrator in performing its administrative obligations under the Administration Agreement; and (iv) other operating expenses summarized below:
Current report — wording carried from elsewhere
The CSL III SPV Credit Facility is secured by a first lien security interest on substantially all of the assets of CSL III SPV. The CSL III SPV Credit Facility includes customary covenants, limitations on the incurrence of additional indebtedness and liens, and other maintenance requirements, as well as standard events of default for senior secured revolving credit facilities of this nature.
Current report — wording carried from elsewhere
The CSL III SPV Credit Facility consisted of the following as of March 31, 2025:
Current report — wording carried from elsewhere
$10,393, which represented approximately 1.6% and 0.6% of total investments at fair value as of March 31, 2025 and December 31, 2024, respectively. The remaining income producing investments were performing and current on their interest payments as of March 31, 2025 and December 31, 2024.
Current report — wording carried from elsewhere
For the three months ended March 31, 2025 and March 31, 2024
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Below is a summary of Credit Fund’s portfolio as of September 30, 2024 and December 31, 2023:
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, our annualized dividend yield from Credit Fund II was 14.2% and 16.8%, respectively.
Previous report — wording carried elsewhere
Below is a summary of Credit Fund II’s portfolio as of September 30, 2024 and December 31, 2023:
Previous report — wording carried elsewhere
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of September 30, 2024 and December 31, 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 report — wording carried elsewhere
(3)Floating rate debt investments are generally subject to interest rate floors.
Previous report — wording carried elsewhere
(4)Percentages based on fair value.