Carlyle Secured Lending, Inc. · NASDAQ:CGBD
Carlyle Secured Lending — Q2 2024 Earnings Presentation
37 slides from Carlyle Secured Lending's earnings presentation, Aug 5, 2024
Slide 1: Quarterly Earnings Presentation June 30, 2024
Exhibit 99.2 Carlyle Secured Lending, Inc. Quarterly Earnings Presentation June 30, 2024 1
Slide 2: Disclaimer and Forward-Looking Statement
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,” “CGBD” or the “Company”) (NASDAQ: CGBD) and may only be used for informational purposes only. This Prese
Slide 3: Disclaimer and Forward-Looking Statement
Disclaimer and Forward-Looking Statement 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
Slide 4: Q2 2024 Quarterly Highlights
Q2 2024 Quarterly Highlights • Net investment income per share was $0.51 per common share, representing 128% of our base dividend of $0.40 per share Second • NAV per share was $16.95, down 0.7% compared to our 1Q24 NAV of $17.07 per share Quarter • The change in NAV in 2Q24 was primarily driven by n
Slide 5: Quarterly Operating Results Detail
Quarterly Operating Results Detail (Dollar amounts in thousands, except per share data) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 SUMMARY INCOME STATEMENT Total investment income $ 60,065 $ 60,501 $ 62,685 $ 62,007 $ 58,264 (1) Total expenses (33,765) (34,265) (34,445) (34,433) (32,266) (1) Net Invest
Slide 6: Origination Activity Detail
Origination Activity Detail (Dollar amounts in thousands and based on par) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 (1) NEW INVESTMENT FUNDINGS BY ASSET TYPE $ 44,511 $ 56,025 $ 75,004 $ 71,581 $ 77,431 First lien debt Second lien debt 4,825 613 578 406 5,915 (2) Equity 1,630 2,166 1,349 22,892 1,445
Slide 7: Portfolio Highlights
Portfolio Highlights Total investments at fair value ($mm) $1,726 (3) Senior Secured Exposure Floating Rate Weighted Average Yield on Income Producing 12.7% 94% (1) 99.6% Investments at Amortized Cost Number of investments 180 (4) Number of portfolio companies 126 Company EBITDA Sponsored (2) (Media
Slide 8: Overview of Investment Funds
Overview of Investment Funds Key Statistics - Credit Fund Key Statistics - Credit Fund II $193 $78 CGBD Investment at cost ($mm) CGBD Investment at cost ($mm) CGBD ownership 5 0.0 % CGBD ownership 84.1 % (1) (1) Yield of debt investments at cost 11.2 % Yield of debt investments at cost 11.7 % Levera
Slide 9: -,>0/:9,8:@9?:@?>?,9/492 '0;=0>09?>?30=0/4?,.474?D >,=0.,7.@7,?0/:?0>4> +0423?0/,A0=,208,?@=4?D,9/;=4.492,8:@9?049?0=…
-,>0/:9,8:@9?:@?>?,9/492 '0;=0>09?>?30=0/4?,.474?D >,=0.,7.@7,?0/:?0>4> +0423?0/,A0=,208,?@=4?D,9/;=4.492,8:@9?049?0=0>?=,?0>B,;,2=00809? )3049?0=0>?=,?0:1?30 9?>?3017:,?49249?0=0>?=,?0;,4/-D?30:8;,9D,>;,=?:1?384774:9:17,>> '#:?0>=0?,490/-D?30:8;,9D'0;=0>09 4:99:?0?3,?3,>,14C0/49?0=0>?=,?0:1 8:@9?>0
Slide 10: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge Q2 2024 YTD Q2 2024 $1.05 $0.51 $(0.47) $17.07 $(0.95) $16.99 $(0.16) $(0.14) $16.95 $16.95 March 31, 2024 Net Investment Dividend Net Realized June 30, 2024 December 31, Net Investment Dividend Net Realized June 30, 2024 NAV Income Declared and NAV 2023 NAV Income D
Slide 11: Risk Rating Distribution
Risk Rating Distribution • As of June 30, 2024, three borrowers were on non-accrual status, representing 1.8% of total investments at fair value and 2.8% at amortized cost. PORTFOLIO RISK RATINGS (Dollar amounts in millions) March 31, 2024 June 30, 2024 Internal Risk Rating Fair Value % of Fair Valu
Slide 12: Stock and Dividend Information
Stock and Dividend Information Annualized Base Dividend ITD (1) Ticker Exchange Market Cap Dividend Yield Coverage Repurchases CGBD NASDAQ $891M 11.1% 128% $158M Historical Dividend Data HISTORICAL DIVIDEND DATA 171% 151% 147% 141% 141% 135% 135% 133% 128% 125% 125% 122% 122% 119% 119% 116% 114% 113
Slide 13: Appendix
CARLYLE Appendix
Slide 14: Carlyle Firm Overview
1 Carlyle Firm Overview Firm Overview 3 4 Global Credit $190 bn AUM 200+ Investment professionals Founded: 1987 AUM: $435 bn Global $164 bn AUM 400+ Investment professionals Private Equity Employees: 2,200+ 2 Investment Professionals: 700+ Global Investment $81 bn AUM 90+ Investment professionals So
Slide 15: Carlyle Global Credit Platform
Carlyle Global Credit Platform 1 CARLYLE GLOBAL CREDIT - $190BN AUM LIQUID CREDIT PRIVATE CREDIT REAL ASSETS CREDIT PLATFORM INITIATIVES AUM: $51.6 billion AUM: $27.1 billion AUM: $18.4 billion AUM: $13.4 billion Closed-end interval fund Commercial Carlyle managed Directly CARLYLE investment aircraf
Slide 16: Carlyle Direct Lending Investment Philosophy & Overview
Carlyle Direct Lending Investment Philosophy & Overview Carlyle Direct Lending seeks to operate in the middle market, utilizing an integrated platform sourcing approach Focus on performing, non-cyclical companies with EBITDA of $25mm or greater, primarily backed by high-quality financial sponsors Em
Slide 17: Quarterly Balance Sheet Detail
Quarterly Balance Sheet Detail (Dollar amounts in thousands, except per share data) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 ASSETS Investments—non-controlled/non-affiliated, at fair value $ 1,588,732 $ 1,556,390 $ 1,539,120 $ 1,472,096 $ 1,411,590 51,668 52,670 53,382 64,199 66,492 Investments—non-c
Slide 18: Quarterly Income Statement Detail
Quarterly Income Statement Detail (Dollar amounts in thousands, except per share data) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 INVESTMENT INCOME (1) Interest income $ 50,870 $ 51,457 $ 52,056 $ 51,949 $ 48,710 8,276 8,276 8,276 8,276 8,781 Dividend income from credit funds 919 768 2,353 1,782 773 Ot
Slide 19: Overview of Proposed Merger between CGBD and CSL III
Exhibit 99.4 CARLYLE Overview of Proposed Merger between Carlyle Secured Lending, Inc. (“CGBD”) and Carlyle Secured Lending III (“CSL III”) August 2024
Slide 20: Disclaimer and Forward-Looking Statement
Disclaimer and Forward-Looking Statement “Pre hi swe, -?°CGBD" or the ipany”) (NASDAQ: CGBD) and may on) junc 102. 1023. -ed, referenced, quoted. linked by website, or ficitati i hold or sell, or an offer ipany, or as legal, ie aril Secured Lending (CSL with andinto ae (Gatccively the ‘Mergers’ The
Slide 21: Disclaimer and Forward-Looking Statement
Disclaimer and Forward-Looking Statement isticali i 3EC filing: . ise, from time to time, gem (the vent LLC. (the “I or CCIM), js is ly ‘owned subsidiary of The Carlyle Group Inc. (together with its affiliates, "Carlyle". ok pa Additional Information and Where to Find It i fl “Proxy Statement’), CSL
Slide 22: Merger Overview
CARLYLE SECTION OI Merger Overview
Slide 23: Carlyle Secured Lending oh;
+ Carlyle Secured Lending oh; (NASDAQ: CGBD), a business _Establishing a scaled, development company diversified middle-market focused on directly-originated BDC with $2.5B-+ in total lending to sponsor-backed assets through an accretive, U.S. middle market companies, stockholder-friendly has entere
Slide 24: Executive Summary
Executive Summary Situation Overview + Carlyle Secured Lending, Inc. (*CGBD’) is the flagship vehicle for Carlyle Direct Lending, focused on directly- originated lending to sponsor-backed US. middle market companies Carlyle Secured Lending Ill (“CSL III’) is an SEC-registered private BDC managed by
Slide 25: Merger Delivers Strategic Growth Benefits to Stockholders
Merger Delivers Strategic Growth Benefits to Stockholders The transaction is expected to be accretive to stockholders, and increased scale and efficiency are expected to drive long-term vehicle optimization Key Merger Benefit Drives Efficiency and Debt Markets Access Eliminates Increases Scale and D
Slide 26: Summary of Proposed Transaction
Summary of Proposed Transaction Merger Structure Combined Company Balance Sheet Transaction Benefits and Advisor Support Sum CGBD to acquire 100% of CSL Ill in a stock-for-stock merger, with CSL Ill Gens shares to be exchanged for shares of C stock based ratio determined shortly before the merger cl
Slide 27: Summary of Proposed Transaction (Cont'd)
Summary of Proposed Transaction (Cont'd) Clo: + Affirmative vote of a majority of voting CGBD stockholders where a quorum is Raoul present Conditions Certain regulatory approval and satisfaction or waiver of other closing conditions Management * Carlyle will continue to serve as the investment advis
Slide 28: CGBD Overview and Highlights
CGBD Overview and Highlights Total investments at fair value ($mm) $1726 Weighted Average Yield on Income Producing 27% Investments at Amortized Cos Number of investments. 180 Number of portfolio companies 126 Average exposure by portfolio company? 08% 18% Non-accrual investments? Asset Mix? 1 First
Slide 29: CSL III Overview and Highlights
CSL III Overview and Highlights Total investments at fair value ($mm) Weighted Average Yield on Income Producing Investments at Amortized Cos Number of investments. Number of portfolio companies Average exposure by portfolio company? Non-accrual investments? $369 12.2% Asset Mix? 1 First Lien Debt =
Slide 30: Transaction Benefits
CARLYLE SECTION 02 Transaction Benefits
Slide 31: Potential Transaction Benefit: Scale and Market Visibility
Potential Transaction Benefit: Scale and Market Visibility Historically, BDCs with larger asset bases consistently trade with increased volume and improved price-to-NAV levels compared to smaller BDCs tock Liquidit Increased Scale and $261 35 325 30 s20 a (ss) wo & 3 20 & a? _ TotolAssets! ADT? . ws
Slide 32: Carlyle Transaction Support
Carlyle Transaction Support Preferred Stock Exchange Current Preferred Dilution Carlyle to exchange CGBD cumulative ior p from Conversion NAV (compared ice Convertible P J $50.0 of $8.98) shortly before the closing of CBD / Camcxaniiteoer $8.98 sh Darang! Shares Issued, if Converted (mm) 5.6 + CGBD
Slide 33: Potential Transaction Benefit: Cost Savings
Potential Transaction Benefit: Cost Savings Operational Costs Financing Costs . expected perational + Increased scale expected to provide CGBD greater synergies by duplicati Pr access pit ith i + Scale expected to reduce expense ratio to target market depth and a lower cost of capital % of NAV!2 $12
Slide 34: Overview of Proposed Merger Consideration
Overview of Proposed Merger Consideration + CGBD to acqui CSL Illina stock *k merger, with CSL Ill common shares to be exchanged for CGBD ket Pri (’P/NAV’) ill i ) ly before the merger closes. This allows CGBD and CSL II its i is i Ib A * If CGBD P/NAV below I.00x, merger exchange +f CGBD P/NAV abov
Slide 35: Combined Entity Overview
CARLYLE SECTION 03 Combined Entity Overview
Slide 36: Near 100% CSL III Asset Overlap Facilitates Portfolio Integration
Near 100% CSL III Asset Overlap Facilitates Portfolio Integration As of 6/50/24 Summary Statistics Investments at FV $i726M $369M $2,095M rae es yent!2 2 Investments! 10.4% tp 0 Investments? 19.4% Number of Investmer 180 Number of Portfolio eareas 26 Non-Accruals, % of FV 18% Asset Mix? ™ First Lien
Slide 37: Standalone and Pro Forma Risk Ratings
Standalone and Pro Forma Risk Ratings (As of 6/30/24, $mm) Internal Risk Rating FairValue %ofFairValue | FairValue of Fair Value 1 $0.4 0.0% “| 2 4142.4 83.3% 3529 95.9%) 3 198.8 145% 150 41% 4 127 09% 0.0 0.0%! 5 75 13% -| Total $13718 100.0% $367.9 100.0% | Rating Definition 1 Borrower i Borrower
Carlyle Secured Lending — Q2 2024 Earnings Presentation on 6ix