8-K: Carlyle Secured Lending Announces Q1 2025 Results and Declares $0.40 Dividend

Carlyle Secured Lending, Inc. (CGBD) reports its financial results for the first quarter ended March 31, 2025, and declares a second quarter dividend of $0.40 per common share.

Summary

• Carlyle Secured Lending, Inc. (CGBD) announced its financial results for the first quarter ended March 31, 2025.
• Net investment income for Q1 2025 was $0.40 per common share.
• Adjusted Net Investment Income Per Common Share (non-GAAP) was $0.41 for the same period.
• Net asset value per common share decreased by 1.0% to $16.63 from $16.80 as of December 31, 2024.
• The total fair value of investments increased to $2.2 billion, primarily due to the merger with Carlyle Secured Lending III (CSL III).
• A base quarterly common dividend of $0.40 per share was declared on April 29, 2025, payable on July 17, 2025, to stockholders of record on June 30, 2025.
• The company completed the merger with CSL III on March 27, 2025, issuing 18.9 million shares to CSL III shareholders.
• The company amended its Credit Facility in March, increasing total commitments to $935.0 million and extending the maturity to March 2030.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the merger completion and dividend declaration are positive, the decrease in NAV per share and increase in non-accrual investments temper the overall outlook.

Positives

• The merger with CSL III was successfully completed, increasing the fair value of investments to $2.2 billion.
• The company declared a base dividend of $0.40 for 2Q25, equating to an annualized dividend yield of 9.6% on the NAV as of 03/31/25.
• The Credit Facility was amended to increase total commitments to $935.0 million and extend the maturity to March 2030.
• Total liquidity as of 3/31/25 was $858.5 million in cash and undrawn debt capacity.

Negatives

• Net asset value per common share decreased by 1.0% for the first quarter to $16.63 from $16.80 as of December 31, 2024.
• As of March 31, 2025, non-accrual investments represented 2.2% and 1.6% of the total portfolio based on amortized cost and fair value, respectively, compared to 1.0% and 0.6%, respectively, as of 12/31/24.

Risks

• The company acknowledges tariffand trade-driven uncertainty in the market.
• There are risks and uncertainties identified in the sections entitled 'Risk Factors' and 'Cautionary Statement Regarding Forward-Looking Statements' in filings with the SEC.
• An investment in securities of the type described herein presents certain risks.

Future Outlook

CGBD remains focused on driving stable income, consistent credit performance, and disciplined execution of its strategy, while optimizing its capital structure.

Management Comments

• Justin Plouffe, CGBD's Chief Executive Officer, said, 'Following successful completion of the merger with CSL III at the end of March, CGBD remains focused on driving stable income, consistent credit performance, and disciplined execution of our strategy.'
• Justin Plouffe also stated, 'Complementing our conservative investing approach, we continue to optimize the capital structure of CGBD, increasing total commitments on our credit facility and exchanging the preferred stock for common stock in the first quarter.'
• Justin Plouffe added, 'Despite tariffand trade-driven uncertainty, we believe the quality of our existing portfolio positions us to deliver attractive returns in this environment while maintaining a dynamic approach to origination in response to market volatility.'

Industry Context

CGBD operates as an externally managed specialty finance company focused on lending to middle-market companies, regulated as a business development company (BDC) under the Investment Company Act of 1940.

Comparison to Industry Standards

• CGBD's NAV per share has increased over the past 5 years while BDC peers experienced an average decline of 7.1%.
• BDC Peers include all externally managed, publicly traded BDCs with market capitalizations over $750 million with pre-COVID IPO dates and excludes BDCs with material merger-related NAV adjustments.

Stakeholder Impact

• Shareholders will receive a dividend of $0.40 per share.
• The company's performance impacts investors, portfolio companies, and the communities in which it invests.

Next Steps

• The company will host a conference call on May 7, 2025, to discuss the quarterly financial results.
• The company will continue to execute its strategy of driving stable income, consistent credit performance, and disciplined investment.

Key Dates

Keywords

Carlyle Secured Lending, CGBD, Financial Results, Dividend, Merger, Credit Facility, Net Investment Income, Net Asset Value, Investments, Middle Market