In This Article:
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GAAP Net Investment Income: $0.40 per share.
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Adjusted Net Investment Income: $0.41 per share.
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Annualized Yield: Approximately 10% on March 31 NAV.
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Net Asset Value (NAV): $16.63 per share as of March 31, down from $16.80 per share as of December 31.
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Organic Originations: Approximately $180 million added to the portfolio.
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Total Assets: Increased from $1.9 billion to $2.5 billion this quarter.
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Total Investment Income: $55 million for the first quarter.
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Total Expenses: $33 million, increased due to higher interest expense.
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Dividend Declared: $0.40 per share for the second quarter of 2025.
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Spillover Income: $0.85 per share.
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Nonaccruals: Increased to 1.6% of total investments at fair value.
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Revolving Credit Facility: Increased total commitments by $145 million to $935 million.
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Statutory Leverage: About one turn at quarter end.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Carlyle Secured Lending Inc (NASDAQ:CGBD) reported a GAAP net investment income of $0.40 per share and adjusted net investment income of $0.41 per share, representing an annualized yield of approximately 10% on their NAV.
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The company declared a second quarter dividend of $0.40 per share, maintaining an attractive yield of about 11% based on the recent share price.
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CGBD successfully completed a merger with CSL 3, which increased their portfolio size and eliminated the preferred stock dilution overhang.
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The consolidation of Credit Fund 2 and the merger with CSL 3 increased total assets from $1.9 billion to $2.5 billion.
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CGBD's portfolio is diversified across 195 investments and 138 companies in more than 25 industries, with 94% of investments in senior secured loans.
Negative Points
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The company experienced a decline in net asset value from $16.80 per share as of December 31 to $16.63 per share as of March 31.
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There was a $0.04 per share decline in earnings from the prior quarter, attributed to tighter yields and a modest uptick in nonaccruals.
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CGBD faced headwinds from declining base rates and historically tight market spreads, which could impact near-term earnings.
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The company reported a total aggregate realized and unrealized net loss of about $8 million for the quarter.
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Nonaccruals increased to 1.6% of total investments at fair value, indicating some underperformance in a handful of portfolio names.
Q & A Highlights
Q: On the credit fund, Tom, you mentioned it would enhance ROE. Does that mean on a nominal basis, and what does the credit fund dividend look like going forward? A: Thomas Hennigan, CFO: The nominal value outstanding and cost for both JVs have changed, with JV 2 going to zero and a return of capital in JV 1. In the near term, we expect the dividend to remain flat. Over time, on an overall NII basis, we anticipate it being roughly neutral due to higher ROE on a lower capital base, with proceeds deployed in regular assets.