8-K: Carlyle Credit Income Fund Secures $30 Million Credit Facility with Expansion Potential

Carlyle Credit Income Fund has entered into a new credit agreement providing access to up to $30 million, with an option to expand to $50 million, for general corporate purposes.

Summary

• Carlyle Credit Income Fund (the Fund) entered into a Credit Agreement on July 11, 2025, to enable borrowing for general corporate purposes and other permitted uses.
• The Credit Agreement provides for loans up to an aggregate amount of $30 million.
• An accordion feature allows the Fund to increase the facility size up to a maximum of $50 million under certain circumstances.
• Each loan under the Credit Agreement accrues interest at an annual rate equal to a reference rate (either the Secured Overnight Financing Rate or the U.S. Prime Rate) plus 3.25%.
• The agreement contains customary covenants that limit the Fund's ability to incur additional debt, incur certain types of liens, make certain distributions, and engage in certain transactions, including mergers and consolidations.
• The Fund's ability to borrow under the Credit Agreement is subject to the limitations of the 1940 Act and various other conditions.

Sentiment

Score: 6

Explanation: The securing of a new credit facility provides the Fund with additional liquidity and financial flexibility, including an accordion feature for future expansion, which is generally positive. However, it also introduces new debt obligations and customary covenants that limit certain corporate actions.

Positives

• Secured a new credit facility providing access to up to $30 million in capital, enhancing financial flexibility.
• Includes an accordion feature allowing for an increase in the facility size to $50 million, providing potential for future capital access.
• The facility is designated for general corporate purposes, offering broad utility for the Fund's operations and strategic initiatives.

Negatives

• Incurrence of new debt, which will accrue interest at a variable rate of a reference rate plus 3.25%, impacting future interest expenses.
• The Credit Agreement contains customary covenants that limit the Fund's ability to incur additional debt, incur certain types of liens, make certain distributions, and engage in specific transactions, including mergers and consolidations, potentially restricting operational and strategic flexibility.

Risks

• The Fund's ability to borrow under the Credit Agreement is subject to the limitations of the 1940 Act and various other conditions, which could restrict access to the full facility.
• Customary covenants in the Credit Agreement limit the Fund's ability to incur additional debt, incur certain types of liens, make certain distributions, and engage in certain transactions, including mergers and consolidations, posing potential constraints on future financial and strategic actions.
• Exposure to interest rate risk due to the variable interest rate (reference rate plus 3.25%) on loans, which could increase borrowing costs if reference rates rise.

Future Outlook

The Credit Agreement includes an accordion feature allowing the Fund to increase the facility size up to a maximum of $50 million under certain circumstances, indicating potential for future capital access and financial flexibility.

Management Comments

• Nelson Joseph, Principal Financial Officer, signed the report on behalf of the Registrant.

Industry Context

Securing credit facilities is a common practice for investment funds like Carlyle Credit Income Fund to manage liquidity, fund operations, and potentially capitalize on investment opportunities, aligning with standard financial management strategies in the asset management industry.

Comparison to Industry Standards

• NA

Corporate Governance

Stakeholder Impact

• Shareholders: The new credit facility provides financial flexibility for the Fund, potentially supporting operations and investment strategies, which could indirectly benefit shareholders by enhancing stability or growth prospects. However, the associated interest expense will impact profitability.
• Creditors: The new debt facility introduces a new class of creditors and imposes covenants that may affect the Fund's ability to incur additional debt or make certain distributions, potentially impacting existing creditors' positions.

Next Steps

• The Fund will be able to draw on the credit facility for general corporate purposes and other permitted uses, subject to the terms and conditions of the Credit Agreement and limitations of the 1940 Act.

Key Dates

Recommendation

Keywords

Carlyle Credit Income Fund, Credit Agreement, Debt Facility, Corporate Finance, SEC Filing, 8-K, Investment Fund, SOFR, U.S. Prime Rate, Financial Covenants, 1940 Act