Core Points - Carlyle Secured Lending, Inc. has announced a public offering of $300 million in unsecured notes with a 5.750% interest rate, maturing on February 15, 2031 [1] - The net proceeds from the offering will be used to repay outstanding debt, fund new investment opportunities, and for general corporate purposes [2] - The offering is managed by several financial institutions, including J.P. Morgan Securities LLC and Barclays Capital Inc. [3] Company Overview - Carlyle Secured Lending, Inc. is a closed-end, non-diversified investment company regulated as a business development company, focusing on senior secured debt investments in U.S. middle-market companies [7] - The company is managed by Carlyle Global Credit Investment Management L.L.C., a subsidiary of Carlyle, which has significant resources and expertise [7] - Carlyle, as a global investment firm, manages $465 billion in assets across various segments, including Global Private Equity and Global Credit [8][9]

Group 1 - The equity market serves as a mechanism for significant wealth creation or destruction over the long term through daily price fluctuations [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Financial Data and Key Metrics Changes - The company generated $0.39 per share of net investment income for the quarter on both a GAAP basis and after adjusting for asset acquisition accounting [6][12] - Total investment income for the second quarter was $67 million, significantly up from the prior quarter due to a higher investment portfolio balance [11] - Net asset value as of June 30 was $16.43 per share, down from $16.63 per share as of March 31 [6] Business Line Data and Key Metrics Changes - CGBD funded $376 million of investments into new and existing borrowers, the highest level since its IPO in 2017 [7] - Total investments at CGBD increased from $2.2 billion to $2.3 billion during the quarter after adjusting for $150 million of investments sold to a joint venture [7] Market Data and Key Metrics Changes - The company noted that spreads in the private credit space remain at historically tight levels, which may present a headwind to near-term earnings [9] - Less than 5% of the portfolio has material direct risk from tariffs, indicating a stable exposure to trade policy changes [8][9] Company Strategy and Development Direction - The company remains focused on overall credit performance and portfolio diversification while maintaining target leverage [9] - The management is optimistic about rebuilding the pipeline for a busier end of the year and remains focused on sourcing transactions with significant equity cushions and conservative leverage profiles [8][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about increased deal activity in the second half of the year, particularly in Q4 and into 2026 [23][45] - The company is confident in its ability to invest in quality companies despite current market uncertainties [25][26] Other Important Information - The Board of Directors declared a third-quarter dividend of $0.40 per share, representing an attractive yield of over 11% based on the recent share price [12] - The company has an estimated $0.89 per share of spillover income generated over the last five years, supporting its ability to maintain the quarterly dividend [12] Q&A Session Summary Question: What has driven the tighter spreads over the past year? - Management indicated that deal activity was not as robust in the first half as hoped, but they are optimistic about increased deal activity in the second half of the year [22] Question: Are there concerns about the US economic environment going forward? - Management noted that certainty in tariff policy would be positive for the markets, and they are happy with the companies they are investing in [25][26] Question: What about the unrealized losses recorded in the quarter? - The unrealized losses were primarily company-specific, with a mix of credit issues and market technical factors [28][29] Question: How does the company view potential share buybacks? - Management is considering share buybacks based on stock trading relative to NAV but remains focused on growth [30] Question: What is the timeline for fully deploying the current credit fund? - The goal is to fully utilize the current credit fund within the next two to three quarters [56] Question: Is there a change in the quality of opportunities entering the pipeline? - Management stated that there has not been a material change in the quality of the companies they are able to invest in [62]

Financial Performance - The company generated net investment income of $0.39 per common share on a GAAP basis and after adjusting for asset acquisition accounting[10] - The company declared a quarterly dividend of $0.40 for 3Q25, equating to an annualized dividend yield of 9.7% on its NAV as of 06/30/25[10] - Total investment income increased to $67.281 million in Q2 2025 from $54.864 million in Q1 2025[11] - Net asset value (NAV) per share was $16.43 as of June 30, 2025, compared to $16.63 as of March 31, 2025[10] Portfolio & Investment Activity - The total fair value of the portfolio increased to $2.3 billion across 148 portfolio companies with a weighted average yield of 10.9%[10] - Record originations resulted in $375.7 million of fundings with a weighted average yield of 10.0%[10] - Total repayments and sales during the quarter were $138.0 million with a weighted average yield of 10.9%[10] - Non-accrual investments represented 3.0% and 2.1% of the total portfolio based on amortized cost and fair value, respectively, as of June 30, 2025[10] Liquidity & Capital - Statutory leverage was 1.10x as of June 30, 2025, compared to 1.04x as of March 31, 2025[10] - Total liquidity as of June 30, 2025, was $613.1 million in cash and undrawn debt capacity[10]

Financial Performance - Carlyle Secured Lending, Inc. (CGBD) reported quarterly earnings of $0.39 per share, matching the Zacks Consensus Estimate, but down from $0.51 per share a year ago [1] - The company posted revenues of $45.55 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 1.68% and up from $41.65 million year-over-year [2] - Over the last four quarters, Carlyle Secured Lending has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Carlyle Secured Lending shares have declined approximately 23.5% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $45.54 million, and for the current fiscal year, it is $1.60 on revenues of $171.82 million [7] Industry Outlook - The Financial - SBIC & Commercial Industry, to which Carlyle Secured Lending belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Carlyle Secured Lending's stock performance [5][6]

Financial Performance - For the three months ended June 30, 2025, Carlyle Secured Lending, Inc. recorded basic earnings per common share of $0.20, a decrease from $0.25 in the previous quarter [322]. - Net investment income for the same period was $28.3 million, or $0.39 per common share, reflecting an increase from $21.6 million in the prior quarter [321]. - Total investment income for the quarter was $67.3 million, compared to $54.9 million in the previous quarter [325]. - Adjusted Net Investment Income for the three months ended June 30, 2025, was $28,136, compared to $21,124 for the previous quarter, reflecting a 33.1% increase [329]. - Adjusted Net Income for the same period was $14,630, up from $13,228, representing a 10.6% increase [329]. - The net investment income for the three months ended June 30, 2025, was $28,250, an increase of 30.6% from $21,629 for the three months ended March 31, 2025 [368]. - Total investment income for the three months ended June 30, 2025, was $67,281, an increase of 15.5% from $58,264 in the same period of 2024 [1]. - Interest income rose to $55,641 for the three months ended June 30, 2025, compared to $42,949 in 2024, marking a 29.5% increase [1]. - Net investment income for the three months ended June 30, 2025, was $28,250, a 5.1% increase from $26,873 in 2024 [1]. Liquidity and Capital Structure - Total liquidity as of June 30, 2025, was $613.1 million, consisting of cash and undrawn debt capacity [319]. - The company had $613,076 in liquidity as of June 30, 2025, compared to $565,696 as of December 31, 2024 [2]. - As of June 30, 2025, total unfunded commitments amounted to $332,012, an increase from $179,247 as of December 31, 2024 [397]. - The statutory debt to equity ratio was 1.10x as of June 30, 2025, down from 1.20x as of December 31, 2024 [2]. - The company is permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity under the amended minimum asset coverage ratio of 150% [400]. Investment Portfolio - Carlyle Secured Lending, Inc. held 202 investments across 148 portfolio companies with a total fair value of $2.3 billion as of June 30, 2025 [321]. - The fair value of total investments was $2,334,961, with 97.9% classified as performing investments [341]. - The geographical composition of investments showed that 87.6% were in the United States, with the next highest being Canada at 3.8% [333]. - The industry composition revealed that Healthcare & Pharmaceuticals accounted for 15.3% of the fair value of investments [334]. - The weighted average yield on total debt and income-producing investments at fair value was 11.1% as of June 30, 2025 [331]. - The company made 27 new investment commitments during the three months ended June 30, 2025, with an average commitment amount of $16,066 [335]. - The weighted average Internal Risk Rating of the investment portfolio was 2.1, with 89.7% of fair value rated as Internal Risk Rating 2 [340]. - The number of portfolio companies in Credit Fund increased to 40 as of June 30, 2025, from 33 as of December 31, 2024 [365]. Debt and Financing - As of June 30, 2025, the total outstanding principal balance of the company's debt was $1,318.615 million, an increase from $978.439 million as of December 31, 2024, representing a growth of approximately 34.8% [343]. - The weighted average interest rate on the total debt decreased to 6.34% as of June 30, 2025, from 6.65% as of December 31, 2024 [343]. - The Credit Facility was increased by $25 million on July 10, 2025, raising total commitments to $960 million, with a maximum capacity potentially increasing to $1,402.5 million [344]. - The company completed a public offering of $85 million in 8.20% senior unsecured notes due December 1, 2028, and $300 million in 6.75% senior unsecured notes due February 18, 2030 [351][352]. - The carrying value of the 2028 Notes and 2030 Notes as of June 30, 2025, was $378.026 million, compared to $369.728 million as of December 31, 2024 [353]. - The 2015-1N Debt, resulting from the refinancing of the 2015-1R Notes, amounted to $410 million, with a total principal amount outstanding of $380 million as of June 30, 2025 [359]. - The weighted average interest rate for the 2015-1N Debt tranches was 6.19% as of June 30, 2025, down from 6.59% as of December 31, 2024 [360]. - The company retained $30 million of Class C-R Notes, which accrue interest at SOFR plus a spread of 3.75% [360]. - The company had net borrowings of $123,456 on its Credit Facilities during the six months ended June 30, 2025 [398]. Expenses - Total expenses for the quarter, including excise tax expense, were $39.0 million, up from $33.2 million in the prior quarter [325]. - Total expenses for the three months ended June 30, 2025, were $39,031, an increase of 17.4% from $33,235 for the three months ended March 31, 2025 [368]. - Total expenses increased to $39,031 for the three months ended June 30, 2025, up 24.4% from $31,391 in 2024 [1]. - Interest expense and credit facility fees rose to $21,727 for the three months ended June 30, 2025, compared to $16,616 in 2024, a 30.5% increase [1]. Risk and Accounting - The company recognized a net realized loss on investments of $357 for the three months ended June 30, 2025, compared to a loss of $21,529 for the three months ended March 31, 2025 [368]. - The company recognized a realized loss related to the restructuring of its investment in Aimbridge Acquisition Co., Inc. during the six months ended June 30, 2025 [2]. - The company regularly measures exposure to interest rate risk and assesses whether hedging transactions are necessary [409]. - There have been no material changes in critical accounting estimates since the last annual report [403].

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]

Financial Performance - Net investment income per common share was $0.39 for Q2 2025, consistent with GAAP and adjusted for asset acquisition accounting[13] - Adjusted Net Income per Common Share for Q2 2024 was $0.35, compared to $0.39 in Q3 2024 and $0.40 in Q4 2024[18] - Adjusted net investment income (NII) for Q2 2025 is reported at $0.39 per share, compared to $0.79 per share for the year-to-date[37] - Net Investment Income for Q2 2025 was $28,250 thousand, a rise from $25,998 thousand in Q2 2024, reflecting an increase of approximately 4.8%[74] - Interest income in Q2 2025 was $60,830 thousand, up from $48,710 thousand in Q2 2024, indicating a growth of around 24.8%[74] Asset and Portfolio Valuation - NAV per share decreased to $16.43 as of June 30, 2025, down from $16.63 as of March 31, 2025[13] - Total investments at fair value increased to $2,335 million by Q2 2025, up from $1,726 million in Q2 2024[19] - The fair value of the portfolio increased to $2.088 billion as of June 30, 2025, up from $2.002 billion at the end of the previous quarter[39] - The net asset value (NAV) per share as of June 30, 2025, is $16.63, reflecting an increase from $16.43 at the end of the previous quarter[38] - Non-accrual investments represented 3.0% of the total portfolio based on amortized cost as of June 30, 2025[13] Investment Activity - Record originations resulted in $375.7 million of fundings at CGBD, with a weighted average yield of 10.0%[13] - Total repayments and sales during the quarter were $138.0 million, with a weighted average yield of 10.9%[13] - New investment fundings in first lien debt totaled $372,335 thousand in Q2 2025, a significant increase from $77,431 thousand in Q2 2024[22] - First lien debt represented 85.6% of the total investment portfolio by Q2 2025, up from 70.9% in Q2 2024[19] Liquidity and Debt - Total liquidity as of June 30, 2025, was $613.1 million in cash and undrawn debt capacity[13] - Statutory leverage increased to 1.10x as of June 30, 2025, compared to 1.04x as of March 31, 2025[13] - The company upsized total commitments at its senior secured Credit Facility by $25.0 million, bringing total commitments to $960.0 million[14] - As of June 30, 2025, total commitments for balance sheet financing facilities amounted to $1.950 billion, with outstanding debt of $1.319 billion[34] - The weighted average maturity of the outstanding debt is 6.4 years, with a weighted average pricing of 6.34%[35] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.40 for Q3 2025, equating to an annualized dividend yield of 9.7%[13] - The company has an estimated $0.89 per share of spillover income available to support its quarterly dividend[45] - The company’s market capitalization is approximately $999 million, with a dividend yield of 9.7%[45] Management and Strategy - Carlyle Direct Lending targets middle market companies with EBITDA of $25 million or greater, focusing on non-cyclical firms backed by high-quality financial sponsors[64] - The company employs a disciplined underwriting process to deliver sustainable current cash income from predominantly first lien, secured, floating rate instruments[64] - Carlyle's investment strategy includes opportunistic credit solutions for non-sponsored companies, focusing on CLO tranches and structured equity[62] - The company emphasizes a defensive approach to lending, aiming to mitigate risks associated with market volatility[64] Non-GAAP Measures - Carlyle's non-GAAP measures, including Adjusted Net Investment Income, are used to evaluate financial results and performance, excluding one-time or non-recurring events[67] - The management emphasized the usefulness of non-GAAP financial measures for analyzing and evaluating financial results and performance[70] - The company uses non-GAAP financial measures to compare its financial results with those of other business development companies that do not have similar one-time or non-recurring events[70] - The presentation of non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP[70] - The company believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing results and trends[70]

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]