In This Article:
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Net Investment Income: $0.51 per share, representing an annualized yield of over 12%.
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Dividend: Total third quarter dividend of $0.47 per share, including a base dividend of $0.40 and a supplemental dividend of $0.07.
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Net Asset Value (NAV): $16.95 per share as of June 30, down $0.12 from March 31.
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Total Investment Income: $58 million for the second quarter.
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Total Expenses: $31 million for the second quarter.
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Net Investment Income (Quarterly): $26 million or $0.51 per share.
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Realized and Unrealized Net Loss: Approximately $8 million for the quarter.
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Nonaccruals: Increased to 1.8% of total investments at fair value.
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Statutory Leverage: Approximately 1.1 times.
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Net Financial Leverage: Ended the quarter at 0.90 times.
Release Date: August 05, 2024
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) generated net investment income of $0.51 per share, representing an annualized yield of over 12%.
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The proposed merger with Carlyle Secured Lending III is expected to increase scale and liquidity, potentially enhancing trading liquidity and institutional ownership.
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The merger will eliminate convertible preferred shares, avoiding 5% to 8% dilution for CGBD shareholders.
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Cost savings from the merger are estimated to be approximately $2.5 million annually, improving operational efficiencies.
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The transaction is expected to be accretive to both NAV per share and net investment income per share, benefiting shareholders in the long term.
Negative Points
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Net asset value decreased by $0.12 per share due to unrealized depreciation from some watchlist names.
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Nonaccruals increased to 1.8% of total investments at fair value, indicating some credit quality concerns.
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Total investment income for the second quarter was $58 million, slightly down from the prior quarter.
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The merger process requires shareholder approval, which could delay the transaction until Q1 2025.
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The market environment remains volatile, with pressure on spreads and covenants from borrowers.
Q & A Highlights
Q: On the merger, it's expected to close in 2025. Does this mean an extended outreach campaign is anticipated? Can you remind us of the shareholder base profile of Carlyle III? A: We need a shareholder vote from CGBD shareholders, which is a legal process and part of the reason for the timeline. CSL III shareholders do not have a vote as they agreed to this when they initially invested. The CSL III shareholder base is diverse, and we don't expect it to impact the merger process.