Form 4: Carlyle Group Entities Receive Payment-in-Kind Dividend of CommScope Convertible Preferred Stock

Carlyle Group entities received 16,646 shares of CommScope Holding Company's Series A Convertible Preferred Stock as a payment-in-kind dividend on December 31, 2024.

Summary

• On December 31, 2024, several entities associated with The Carlyle Group received a payment-in-kind dividend in the form of 16,646 shares of CommScope Holding Company's Series A Convertible Preferred Stock.
• These shares were issued as a dividend on existing holdings of the Series A Convertible Preferred Stock.
• The Series A Convertible Preferred Stock is convertible into common stock at an initial rate of 36.3636 shares of common stock per share of preferred stock, subject to anti-dilution adjustments.
• The preferred stock pays a cumulative dividend at a rate of 5.5% per year, payable quarterly in arrears.
• The Carlyle Group Inc. and related entities may be deemed to share beneficial ownership of the securities, but each disclaims beneficial ownership except to the extent of their pecuniary interest.

Sentiment

Score: 5

Explanation: This is a neutral disclosure of a routine transaction. It doesn't inherently indicate positive or negative sentiment towards CommScope.

Positives

• The receipt of the payment-in-kind dividend increases Carlyle Group's holdings in CommScope.
• The preferred stock provides a steady income stream through its cumulative dividend.

Future Outlook

The Series A Convertible Preferred Stock will remain outstanding indefinitely unless converted, repurchased, or redeemed by the Issuer. The Issuer may mandatorily convert the Preferred Stock into Common Stock at any time after the three-year anniversary of the issuance, if certain conditions are met.

Management Comments

• Each of the Carlyle Group entities disclaims any beneficial ownership of the securities except to the extent of their pecuniary interest therein.

Industry Context

This filing reflects changes in beneficial ownership as required by the SEC for major shareholders. It's a routine disclosure related to dividend payments and doesn't necessarily indicate a change in the overall investment strategy of Carlyle Group in CommScope.

Comparison to Industry Standards

• Form 4 filings are standard practice for reporting changes in beneficial ownership by company insiders and major shareholders, aligning with SEC regulations.
• Payment-in-kind dividends are a relatively common mechanism for companies to conserve cash while still providing returns to investors, particularly in situations where the company is managing its cash flow.

Stakeholder Impact

• The dividend payment provides a return to Carlyle Group as a major shareholder.
• The transaction itself is unlikely to have a significant immediate impact on other stakeholders.

Key Dates