CARLYLE SECURED LENDING, INC. Carlyle Secured Lending, Inc. Quarterly Earnings Presentation
June 30, 2023
Disclaimer and Forward-Looking Statement
This presentation (the "Presentation") has been prepared by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, "we," "us," "our," "CSL" or the "Company") (NASDAQ: CGBD) and may only be used for informational purposes only. This Presentation should be viewed in conjunction with the earnings conference call of the Company held on August 9, 2023 and the Company's Annual Report on Form 10-K for the year ended December 31, 2022. The information contained herein may not be used, reproduced, referenced, quoted, linked by website, or distributed to others, in whole or in part, except as agreed in writing by the Company.
This Presentation does not constitute a prospectus and should under no circumstances be understood as an offer to sell or the solicitation of an offer to buy our common stock or any other securities nor will there be any sale of the common stock or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.
This Presentation provides limited information regarding the Company and is not intended to be taken by, and should not be taken by, any individual recipient as investment advice, a recommendation to buy, hold or sell, or an offer to sell or a solicitation of offers to purchase, our common stock or any other securities that may be issued by the Company, or as legal, accounting or tax advice. An investment in securities of the type described herein presents certain risks.
This Presentation may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward- looking terminology such as "anticipates," "believes," "expects," "intends," "will," "should," "may," "plans," "continue," "believes," "seeks," "estimates," "would," "could," "targets," "projects," "outlook," "potential," "predicts" and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. There may be events in the future, however, that we are not able to predict accurately or control. You should not place undue reliance on these forward-looking statements, which speak only as of the date on which we make them. Factors or events that could cause our actual results to differ, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in filings we make with the Securities and Exchange Commission (the "SEC"), and it is not possible for us to predict or identify all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Information throughout the Presentation provided by sources other than the Company (including information relating to portfolio companies) has not been independently verified and, accordingly, the Company makes no representation or warranty in respect of this information.
The following slides contain summaries of certain financial and statistical information about the Company. The information contained in this Presentation is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. We undertake no duty or obligation to publicly update or revise the information contained in this Presentation.
CSL is managed by Carlyle Global Credit Investment Management L.L.C. (the "Investment Adviser"), an SEC-registered investment adviser and a wholly owned subsidiary of The Carlyle Group Inc. (together with its affiliates, "Carlyle").
This Presentation contains information about the Company and certain of its affiliates and includes the Company's historical performance. You should not view information related to the past performance of the Company as indicative of the Company's future results, the achievement of which is dependent on many factors, many of which are beyond the control of the Company and the Investment Adviser and cannot be assured. There can be no assurances that future dividends will match or exceed historical rates or will be paid at all. Further, an investment in the Company is discrete from, and does not represent an interest in, any other Carlyle entity. Nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance of the Company or any other Carlyle entity.
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Q2 2023 Quarterly Highlights
Second
Quarter
Results
Portfolio &
Investment
Activity
Liquidity &
Capital
Activity
- Net investment income per share was $0.52 per common share, up $0.02 compared to our 1Q23 core earnings due primarily to the continued rise in benchmark interest rates
- NAV per share was $16.73, down 2.1% compared to our 1Q23 NAV of $17.09 per share
- The change in NAV in 2Q23 was primarily driven by net unrealized losses from our watchlist names offset by NII generated in excess of our 2Q23 dividend
- Declared a $0.37 base dividend plus a $0.07 supplemental for 3Q23, equating to an annualized dividend yield of 10.5% on our 2Q23 NAV
- 2Q23 portfolio included total commitments of $2.2 billion across 130 portfolio companies
- New investment fundings during the quarter were $51.0 million with a weighted average yield of 12.4%
- Total repayments and sales during the quarter were $107.5 million with a weighted average yield of 11.5%
- Non-accrualinvestments in 2Q23 decreased to 3.2% and 1.8% of the total portfolio based on amortized cost and fair value, respectively, aided by closing the restructuring of Bayside OPCP (f.k.a. PPT Management Holdings)
- The annualized dividend yield on our Investment Funds was 12.2% in 2Q23
- Paid the 2Q23 base dividend of $0.37 plus a supplemental dividend of $0.07 per share
- Completed a $57 million upsize on our credit facility bringing total commitments to $745 million
- Net financial leverage decreased to 1.11x, comfortably within our target range
- Total liquidity at 2Q23 was $396.9 million in cash and undrawn debt capacity
Note: Per share amounts within this presentation apply to common shares of the Company unless otherwise noted.
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Quarterly Operating Results Detail
(Dollar amounts in thousands, except per share data) | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | |||||
SUMMARY INCOME STATEMENT | ||||||||||
Total investment income | $ | 44,568 | $ | 59,143 | $ | 56,036 | $ | 58,375 | $ | 60,065 |
Total expenses(1) | (23,573) | (28,865) | (31,411) | (32,680) | (33,765) | |||||
Net Investment Income(2) | $ | 20,995 | $ | 30,278 | $ | 24,625 | $ | 25,695 | $ | 26,300 |
Net realized and change in unrealized gains (losses) | (17,205) | 6,677 | (13,041) | 1,417 | (22,462) | |||||
Net Income (Loss)(2) | $ | 3,790 | $ | 36,955 | $ | 11,584 | $ | 27,112 | $ | 3,838 |
Weighted average shares of common stock outstanding | 52,421 | 51,863 | 51,310 | 50,887 | 50,795 | |||||
Net Investment Income per Share(2) | $ | 0.40 | $ | 0.58 | $ | 0.48 | $ | 0.50 | $ | 0.52 |
Net Income (Loss) per Share(2) | $ | 0.07 | $ | 0.71 | $ | 0.23 | $ | 0.53 | $ | 0.08 |
SUMMARY BALANCE SHEET | ||||||||||
Total investments, at fair value | $ | 1,889,276 | $ | 1,948,957 | $ | 1,979,877 | $ | 1,973,565 | $ | 1,896,420 |
Cash, cash equivalents and restricted cash | 39,291 | 68,644 | 30,506 | 42,873 | 54,150 | |||||
Other assets | 117,386 | 36,431 | 31,314 | 38,969 | 32,027 | |||||
Total Assets | $ | 2,045,953 | $ | 2,054,032 | $ | 2,041,697 | $ | 2,055,407 | $ | 1,982,597 |
Debt and secured borrowings(3) | 1,079,954 | 1,060,615 | 1,077,192 | 1,092,707 | 1,037,185 | |||||
Accrued expenses and liabilities | 39,506 | 57,766 | 47,082 | 44,507 | 45,731 | |||||
Preferred stock | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | |||||
Total Liabilities and Preferred Stock | $ | 1,169,460 | $ | 1,168,381 | $ | 1,174,274 | $ | 1,187,214 | $ | 1,132,916 |
Net Assets | $ | 926,493 | $ | 935,651 | $ | 917,423 | $ | 918,193 | $ | 899,681 |
Preferred stock | (50,000) | (50,000) | (50,000) | (50,000) | (50,000) | |||||
Net Assets | $ | 876,493 | $ | 885,651 | $ | 867,423 | $ | 868,193 | $ | 849,681 |
Common shares outstanding at end of period | 52,148 | 51,617 | 51,060 | 50,795 | 50,795 | |||||
Net Asset Value per Common Share | $ | 16.81 | $ | 17.16 | $ | 16.99 | $ | 17.09 | $ | 16.73 |
LEVERAGE | ||||||||||
Net Financial Leverage (4) | 1.05x | 1.09x | 1.16x | 1.16x | 1.11x | |||||
Statutory Debt to Equity (5) | 1.29x | 1.26x | 1.30x | 1.32x | 1.28x |
Please refer to the Company's Form 10-Q for more information.
- Includes the preferred stock dividend. (2) Presented net of the preferred stock dividend for the period. (3) Includes deferred financing costs. (4) Reflects cumulative convertible preferred securities as equity, net of excess cash held at period end, which was $34.5 million on June 30, 2023. (5) Reflects cumulative convertible preferred securities as debt. These securities are considered "senior securities" for the purposes of calculating asset coverage pursuant to the Investment Company Act.
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Origination Activity Detail
(Dollar amounts in thousands and based on par) | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Q2 2023 | |||||
NEW INVESTMENT FUNDINGS BY ASSET TYPE (1) | ||||||||||
First lien debt | $ | 198,625 | $ | 267,262 | $ | 126,400 | $ | 53,164 | $ | 44,511 |
Second lien debt | 430 | 285 | 318 | 325 | 4,825 | |||||
Equity(2) | 1,287 | 14,623 | 1,868 | 2,361 | 1,630 | |||||
Total | $ | 200,342 | $ | 282,170 | $ | 128,586 | $ | 55,850 | $ | 50,966 |
Weighted Average Yield at Amortized Cost | 8.3% | 10.0% | 11.8% | 12.7% | 12.4% | |||||
SALES & REPAYMENTS BY ASSET TYPE (1) | ||||||||||
First lien debt | $ | (156,301) | $ | (180,937) | $ | (87,352) | $ | (68,505) | $ | (106,038) |
Second lien debt | (5,000) | (31,500) | - | (6,954) | - | |||||
Equity(2) | (1,031) | - | (60) | (829) | (1,495) | |||||
Total | $ | (162,332) | $ | (212,437) | $ | (87,412) | $ | (76,288) | $ | (107,533) |
Weighted Average Yield at Amortized Cost | 7.9% | 8.8% | 10.1% | 10.1% | 11.5% |
Net Investment Activity | $ | 38,010 | $ | 69,733 | $ | 41,174 | $ (20,438) |
- (56,567)
TOTAL INVESTMENT PORTFOLIO BY ASSET TYPE (3)(4) | |||||
First lien debt | 66.5% | 68.2% | 68.6% | 68.5% | 67.1% |
Second lien debt | 15.4% | 13.5% | 13.3% | 13.1% | 14.0% |
Equity | 4.2% | 4.7% | 4.8% | 5.2% | 5.4% |
Investment funds | 13.9% | 13.6% | 13.3% | 13.2% | 13.5% |
Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
Weighted Average Yield on Debt Investments at | 8.8 % | 10.4 % | 11.7 % | 12.0 % | 12.6% |
Amortized Cost(5) | |||||
Weighted Average Yield on Debt and Income | 9.3 % | 10.6 % | 11.8 % | 12.1 % | 12.6% |
Producing Investments at Amortized Cost(5) | |||||
Please refer to the Company's Form 10-Q for more information. No assurance is given that the Company will continue to achieve comparable results.
- Excludes activity related to the Investment Funds. (2) Based on cost/proceeds of equity activity. (3) At quarter end. (4) As a percentage of fair value. (5) Weighted average yields exclude investments placed on non-accrual status. Weighted average yields of income producing investments include Credit Fund and Credit Fund II, as well as income producing equity investments.
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Carlyle Secured Lending Inc. published this content on 08 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 August 2023 22:25:02 UTC.
