Core Insights - Carlyle Secured Lending, Inc. reported a record quarter of originations despite market uncertainty, positioning itself well for an expected increase in deal volume in the second half of 2025 [1] - The company achieved a Net Investment Income of $0.39 per common share for the second quarter of 2025 [1] Financial Performance - Net asset value per common share decreased by 1.2% to $16.43 from $16.63 as of March 31, 2025 [2] - The total fair value of investments increased to $2.3 billion as of June 30, 2025 [2] - The Board of Directors declared a quarterly common dividend of $0.40 per share, payable on October 17, 2025 [3] Non-GAAP Financial Measures - Adjusted Net Investment Income Per Common Share is disclosed as a non-GAAP financial measure, providing additional insights into financial performance [5] - The adjustment for the second quarter reflects management's view of economic yield on acquired assets, consistent with internal performance evaluation [6] Company Overview - Carlyle Secured Lending, Inc. is focused on lending to middle-market companies and has invested approximately $9.9 billion since its inception in May 2013 [8] - The company aims to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies [9]

CARLYLE Carlyle Secured Lending, Inc. Quarterly Earnings Presentation June 30, 2025 1 C a r l y l e S e c u r e d L e n d i n g , I n c. Q u a r t e r l y E a rn i n g s P r e s e n t a t i o n J u n e 3 0 , 2 0 2 5 Disclaimer and Forward-Looking Statement This presentation (the "Presentation") has been prepared by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, "we." "us," "our"," "CGBD" or the "Company") (N4SDAQ: CGBD) and may only be used for informational purposes only. This ...

Company Overview - Carlyle Secured Lending, Inc. is a publicly traded business development company (BDC) listed on NASDAQ under the ticker CGBD, which began its investment activities in 2013 [3] - The company focuses on providing directly originated financing solutions, primarily senior secured lending to middle-market companies in the United States [3] - Carlyle Secured Lending is externally managed by Carlyle Global Credit Investment Management L.L.C., a wholly owned subsidiary of Carlyle [3] Upcoming Financial Results - Carlyle Secured Lending will announce its financial results for the second quarter ended June 30, 2025, on August 5, 2025 [1] - A conference call to discuss these results will be held on August 6, 2025, at 11:00 a.m. EST [1] Carlyle Group Overview - Carlyle Group is a global investment firm with $453 billion in assets under management as of March 31, 2025 [4] - The firm operates across three business segments: Global Private Equity, Global Credit, and Carlyle AlpInvest [4] - Carlyle employs over 2,300 people across 29 offices on four continents [4]

Core Insights - Carlyle Secured Lending Inc. (NASDAQ: CGBD) has faced a significant decline in portfolio quality and dividend payout ratio in the first quarter of 2025, raising concerns about the sustainability of its current dividend payments [1] Company Summary - The company has reported a substantial decrease in the quality of its investment portfolio, which may impact its financial stability and future dividend distributions [1]

Group 1 - Carlyle Secured Lending (CGBD) reported Q1 results with a dividend yield of 11.5% and a 16% discount to NAV [1] - The net investment income price yield for CGBD is 11.8%, which aligns with market expectations [1]

Core Viewpoint - Small-cap stocks are currently undervalued, presenting potential investment opportunities, especially those offering high dividend yields ranging from 8.3% to 17.1% [2] Group 1: Small-Cap Stocks Overview - The valuation gap between the S&P 500 and S&P 600 is at its widest since the late 1990s, suggesting small-cap stocks are significantly cheaper [2] - The article discusses five small-cap stocks with attractive dividend yields, indicating a potential for high returns despite their current low valuations [2] Group 2: Playtika Holding (PLTK) - Playtika, a mobile game developer, has a dividend yield exceeding 8% but has not raised its payout recently, indicating a decline in earnings and sales [4][5] - Analysts project a 32% increase in profits for 2024, despite the company's struggles in the competitive mobile gaming market [6] - Playtika's valuation is low at 6 times forward earnings, but there are concerns about its growth prospects [7] Group 3: Carlyle Secured Lending (CGBD) - CGBD is a business development company focused on U.S. middle-market companies, primarily investing in first-lien debt [8][9] - Recent earnings reports have shown disappointing results, with an increase in non-accrual loans and a stagnant base dividend of 40 cents per share [10][11] - CGBD shares are trading at a 16% discount to net asset value, but operational challenges raise concerns about future dividend sustainability [12] Group 4: Bain Capital Specialty Finance (BCSF) - BCSF provides financing solutions to a diverse range of companies, with a significant portion of its investments in first-lien debt [13][14] - The company has maintained its regular dividend but has introduced special dividends, raising concerns about future dividend coverage due to declining net investment income projections [16][17] - Analysts expect BCSF's dividend ratios to be high, leaving little room for error in case of operational difficulties [17] Group 5: Two Harbors Investment Corp. (TWO) - TWO operates in the mortgage REIT sector, focusing on mortgage servicing rights and agency residential mortgage-backed securities [19][22] - The company has faced significant share price declines, resulting in a high yield of over 17%, but recent litigation charges could impact its book value and dividend sustainability [24][25] - TWO's current dividend rate of 45 cents per share is at risk due to the potential impact of litigation on earnings available for distribution [25] Group 6: Franklin BSP Realty Trust (FBRT) - FBRT is a mortgage REIT focused on commercial mortgage-backed securities, with a significant portion of its portfolio in multifamily properties [26][27] - The company is trading at a 28% discount to book value, with a low P/E ratio based on 2026 earnings estimates, indicating potential value [28] - Concerns exist regarding the stability of its dividend, as the payout has not changed since 2021, and market conditions could necessitate a review of the dividend policy [29][30]

Financial Data and Key Metrics Changes - In Q1 2025, the company generated GAAP net investment income of $0.40 per share and adjusted net investment income of $0.41 per share, representing a decline of $0.04 per share from the prior quarter due to tighter yields and lower base rates [7][14] - The net asset value (NAV) as of March 31 was $16.63 per share, down from $16.80 per share as of December 31 [8] - Total investment income for the first quarter was $55 million, consistent with the prior quarter, while total expenses increased to $33 million primarily due to higher interest expenses [13] Business Line Data and Key Metrics Changes - The company added approximately $180 million in organic originations to its portfolio during the quarter, despite muted sponsor M&A activity [8] - The total size of the portfolio increased from $1.9 billion to $2.5 billion, bolstered by the merger with CSL3 and the consolidation of Credit Fund II [9] - The portfolio comprised 195 investments in 138 companies across more than 25 industries, with 94% of investments in senior secured loans [12] Market Data and Key Metrics Changes - The broadly syndicated and private credit markets remained competitive, with recent volatility around tariffs posing a near-term headwind to capital markets and M&A activity [9][10] - Non-accruals increased to 1.6% of total investments at fair value, indicating some underperformance in a handful of names [17] Company Strategy and Development Direction - The strategic merger with CSL3 is expected to improve liquidity and reduce costs while maintaining the existing investment strategy due to the near 100% overlap between the portfolios [11] - The company is focused on overall credit performance and diversification, with a selective underwriting approach to take quality credits at the top of the capital structure [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted minimal direct risk from tariffs, estimating that less than 5% of the portfolio has material direct exposure [10] - The company anticipates a strong pipeline of transactions in the second quarter, aiming to reach its target leverage range of 1.0 [35][36] Other Important Information - The Board of Directors declared a second-quarter dividend of $0.40 per share, representing an attractive yield of about 11% based on the recent share price [15] - The company has $0.85 per share of spillover income generated over the last five years, providing comfort in maintaining the base dividend [15] Q&A Session Summary Question: On the credit fund, what does the dividend look like going forward? - Management indicated that the dividend is expected to be flat in the near term, with overall NII being roughly neutral due to higher ROE on a lower capital base [25] Question: Is there any asset rotation expected post-merger? - Management confirmed that the merger resulted in a reduction in yield by about 15 basis points, with plans to selectively rotate lower spread assets into the current joint venture for better returns [31][32] Question: How does the company plan to drive leverage back into the target range? - Management aims to achieve the target leverage range over the next couple of quarters, with a strong pipeline of transactions anticipated for the second quarter [35][36] Question: How much spillover income is expected to support the dividend? - Management stated that while spillover income may support the dividend, the extent and speed of the impact from the SOFR curve remain uncertain [39][42]

Financial Data and Key Metrics Changes - In Q1 2025, the company generated GAAP net investment income of $0.40 per share and adjusted net investment income of $0.41 per share, reflecting a decline of approximately $0.04 per share from the prior quarter due to tighter yields and increased non-accruals [7][13] - The net asset value (NAV) as of March 31 was $16.63 per share, down from $16.80 per share as of December 31 [7] - Total investment income for the first quarter was $55 million, consistent with the prior quarter, while total expenses increased to $33 million primarily due to higher interest expenses [12] Business Line Data and Key Metrics Changes - The company added approximately $180 million in organic originations to its portfolio during the quarter, despite muted sponsor M&A activity [7] - The total size of the portfolio increased from $1.9 billion to $2.5 billion, bolstered by the merger with CSL3 and the consolidation of Credit Fund II [8] Market Data and Key Metrics Changes - The broadly syndicated and private credit markets remained competitive, with recent volatility around tariffs posing a near-term headwind to overall capital markets and M&A activity [8][9] - The company estimates that less than 5% of its portfolio has material direct exposure to tariffs, indicating minimal potential direct risk [9] Company Strategy and Development Direction - The strategic merger with CSL3 is expected to improve liquidity and reduce costs while maintaining the existing investment strategy due to the near 100% overlap between the portfolios [10] - The company is focused on overall credit performance and diversification, continuing to deploy and increase the size of its portfolio [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while the portfolio remains resilient, there is a focus on sourcing transactions with significant equity cushions and conservative leverage profiles [21] - The company anticipates a strong pipeline of transactions heading into Q2, despite a near-term slowdown in overall activity [36] Other Important Information - The Board of Directors declared a second-quarter dividend of $0.40 per share, representing an attractive yield of about 11% based on the recent share price [14] - The company has $0.85 per share of spillover income generated over the last five years, providing comfort in maintaining the base dividend [14] Q&A Session Summary Question: On the credit fund, what does the dividend look like going forward? - Management indicated that the nominal value outstanding for the credit fund is expected to be flat in the near term, with overall NII being roughly neutral due to higher ROE on a lower capital base [26] Question: Is there any asset rotation expected post-merger? - Management confirmed that the overall yield from the merged portfolio is lower, resulting in a reduction of about 15 basis points for CGBD, with selective rotation of lower spread assets planned [32] Question: How does the company plan to manage portfolio leverage? - The target leverage is set at 1.1, with expectations to reach this range over the next couple of quarters, supported by a strong pipeline of transactions [36] Question: How will spillover income support the dividend? - Management stated that while there are uncertainties, the intention is to remain consistent with the dividend, assessing the situation on a quarter-by-quarter basis [44]

Company Performance - Carlyle Secured Lending, Inc. (CGBD) reported quarterly earnings of $0.41 per share, missing the Zacks Consensus Estimate of $0.43 per share, and down from $0.54 per share a year ago, representing an earnings surprise of -4.65% [1] - The company posted revenues of $36.26 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 15.40%, and down from $44.14 million year-over-year [2] - Over the last four quarters, Carlyle Secured Lending has surpassed consensus EPS estimates three times, but has topped consensus revenue estimates only once [2] Stock Performance - Carlyle Secured Lending shares have declined approximately 20.6% since the beginning of the year, compared to a decline of -3.9% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $53.34 million, and for the current fiscal year, it is $1.71 on revenues of $200.34 million [7] Industry Outlook - The Zacks Industry Rank for Financial - SBIC & Commercial Industry is currently in the bottom 45% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the outlook for the industry can significantly impact stock performance [5][8]

Carlyle Secured Lending, Inc. Quarterly Earnings Presentation March 31, 2025 Disclaimer and Forward-Looking Statement This presentation (the "Presentation") has been prepared by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, "we," "us," "our," "CGBD" or the "Company") (NASDAQ: CGBD) and may only be used for informational purposes only. This Presentation should be viewed in conjunction with the earnings conference call of the Company held on May 7, 2025 and the Company's Quarterl ...