8-K: Carlyle Credit Income Fund Announces Q1 2025 Financial Results and Declares Monthly Dividends

Carlyle Credit Income Fund (CCIF) reports its first quarter 2025 financial results, highlighting a stable monthly dividend and strong momentum in the CLO market.

Summary

• Carlyle Credit Income Fund (CCIF) announced its Q1 2025 financial results, with net investment income of $0.26 per common share and core net investment income of $0.44 per common share.
• The fund maintained its monthly dividend of $0.105 per share through May 2025, equating to a 16.45% annualized dividend based on the February 24, 2025 share price.
• CCIF funded $12.0 million in new CLO investments with a weighted average GAAP yield of 16.8%.
• The aggregate portfolio weighted average GAAP yield was 17.2% as of December 31, 2024.
• The fund sold 1,370,000 common shares through its ATM offering program, generating net proceeds of $11.0 million.
• Net asset value per common share was $7.44 as of December 31, 2024.
• The total fair value of investments was $177.9 million as of December 31, 2024.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The fund is maintaining its dividend and has a high yield, but the NAV has decreased slightly. The management's comments are optimistic about the CLO market.

Positives

• The fund maintained a stable monthly dividend of $0.105 per share.
• CCIF achieved a high weighted average GAAP yield of 17.2% on its portfolio.
• The ATM offering program generated $11.0 million in net proceeds.
• The fund completed a private placement of convertible preferred shares in January, providing net proceeds for investment activity.
• Underlying CLOs maintain healthy overcollateralization cushions with a weighted average cushion of 4.18%.

Negatives

• Net asset value per common share decreased to $7.44 as of December 31, 2024, from $7.64 in the previous quarter.
• Net realized and change in unrealized losses was $(2.967) million.

Risks

• The press release contains forward-looking statements that involve substantial risks and uncertainties.
• Factors or events could cause actual results to differ materially from expectations, including risks and uncertainties identified in SEC filings.

Future Outlook

The fund expects a strong year of investment activity, fueled by net proceeds from a private placement of convertible preferred shares completed in January.

Management Comments

• Lauren Basmadjian, CCIF's Chief Executive Officer, stated that the first quarter results reflect strong momentum following a record year of issuance in the CLO market.
• Management has maintained a stable monthly dividend as they continue to scale the fund.
• Management believes fundamentals in the CLO market remain strong.

Industry Context

The announcement highlights the fund's focus on CLOs, a significant segment within the asset-backed finance industry, and its ability to capitalize on opportunities within the CLO market.

Comparison to Industry Standards

• CCIF's strategy of investing in CLO equity and junior debt tranches is common among closed-end funds seeking higher yields.
• Ares Capital Corporation (ARCC) and Owl Rock Capital Corporation (ORCC) are other BDCs that invest in similar assets, though they may have broader investment mandates.
• The reported GAAP yield of 17.2% is relatively high, suggesting a focus on higher-risk, higher-reward CLO tranches compared to funds investing primarily in senior debt.
• The fund's diversity score of 71-100 is a measure to estimate the diversification in a portfolio.

Stakeholder Impact

• Shareholders will continue to receive monthly dividends of $0.105 per share through May 2025.
• The fund's investment activity will impact the CLO market and the underlying borrowers.

Next Steps

• The Fund will host a conference call on February 27, 2025, to discuss its first quarter financial results.
• Investors can view the full detailed presentation of the Fund's first quarter 2025 financial results on the Fund's website.

Key Dates