Carlyle Secured Lending, Inc.

Second-quarter total investment income was $62 million, down from the prior quarter, while total expenses were $38 million. Net investment income was $24 million, or $0.35 per share, on both a GAAP and adjusted basis. The company reported a total aggregate realized and unrealized net loss of about $24 million, or $0.35 per share, and NAV was $15.61 per share at June 30 versus $15.89 at March 31. For the quarter, CGBD generated $0.35 per share of NII, declared a third-quarter dividend of $0.35 per share, and said it currently estimates about $0.70 per share of spillover income. Looking ahead, management said it expects the second quarter to be the near-term earnings trough and anticipates an increase in earnings and supplemental dividends over the next four to six quarters as MMCF and SCP continue to ramp.

Alex Chi said the firm stayed disciplined in a complicated macro and geopolitical backdrop, but still found attractive originations and held pricing steady versus the first quarter. He emphasized that Carlyle’s platform is gaining share, with selectivity rising and the pipeline concentrated in more defensive, non-software sectors like industrials, aerospace and defense, healthcare, and consumer products. His tone was cautious on the M&A backdrop but constructive on the company’s positioning, underwriting discipline, and long-term opportunity.

Tom Hennigan focused on the earnings bridge and balance sheet support. He said total investment income was $62 million and expenses were $38 million, producing $0.35 per share of NII, which fully covers the base dividend; he also pointed to approximately $0.70 per share of spillover income and a supplemental dividend policy targeting at least 50% of excess earnings. He noted $12.5 million of share repurchases at a 29% average discount, $0.07 per share of NAV accretion, total realized/unrealized net loss of about $24 million, and low non-accruals of 0.6% of fair value and 1.2% of amortized cost. He also highlighted leverage at 1.2x, a 100% floating-rate debt stack, and JV growth, including MMCF’s $400 million facility upsize to $1.2 billion and SCP’s ramp to $1.7 billion of investments.

Analysts pressed management on whether the muted M&A backdrop and macro uncertainty might delay deal activity, and Alex said a clearer view on inflation, rates, and geopolitical risk is still needed before a fuller M&A rebound. On pricing, he said spreads held steady and documentation standards improved, while Tom added that the team is balancing new deployment with share repurchases. Questions also focused on SCP’s CLO cadence, and Tom said the intent is to maintain vintage diversification and a roughly four-CLO-per-year rhythm, though timing could shift slightly. Management also explained that the quarter-over-quarter decline in other income was because the prior quarter had an unusually large repayment fee.