ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 000-54899
Carlyle Secured Lending, Inc.
(Exact name of Registrant as specified in its charter)
Maryland
80-0789789
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
One Vanderbilt Avenue,Suite 3400,New York,NY10017
(212) 813-4900
(Address of principal executive office) (Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
CGBD
The Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
x
Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No☒
The aggregate market value of the registrant’s common stock at June 30, 2025, based on the closing price of the common stock on that date of $13.68 on The Nasdaq Global Select Market, held by those persons deemed by the registrant to be non-affiliates was approximately $947,175,156.
The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at February 23, 2026 was 70,676,923.
Documents Incorporated by Reference:Portions of the registrant’s Proxy Statement for its 2026 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part III of this Form 10-K.
We have included or incorporated by reference in this Form 10-K, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CGBD” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-K and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:
•our, or our portfolio companies’, future business, operations, operating results or prospects, including our and their ability to achieve our respective objectives;
•the return or impact of current and future investments;
•the general economy and its impact on the industries in which we invest;
•the impact of any protracted decline in the liquidity of credit markets on our business;
•the impact of fluctuations in interest rates on our business;
•the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
•the impact of supply chain constraints on our portfolio companies and the global economy;
•the level of inflation, and its impact on our portfolio companies and on the industries in which we invest;
•the impact on our business of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies, including those caused by tariffs and trade disputes with other countries;
•our ability to recover unrealized losses;
•market conditions and our ability to access alternative debt markets and additional debt and equity capital;
•our contractual arrangements and relationships with third parties;
•uncertainty surrounding the financial stability of the United States, Europe and China, including a possible shutdown of the U.S. federal government;
•uncertainty surrounding Russia’s military invasion of Ukraine and the impact of geopolitical tensions in other regions such as the Middle East, the imposition of tariffs and developing tensions between China and the United States;
•competition with other entities and our affiliates for investment opportunities;
•the speculative and illiquid nature of our investments;
•the use of borrowed money to finance a portion of our investments;
•our expected financings and investments;
•the adequacy of our cash resources and working capital;
•the timing, form and amount of any dividend distributions;
•the timing of cash flows, if any, from the operations of our portfolio companies;
•the ability to consummate acquisitions;
•the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;
•the ability of Carlyle Global Credit Investment Management L.L.C., the investment adviser (the “Investment Adviser”), to locate suitable investments for us and to monitor and administer our investments;
•currency fluctuations and the adverse effect such fluctuations could have on the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
•the ability of The Carlyle Group Employee Co., L.L.C. to attract and retain highly talented professionals that can provide services to the investment adviser and administrator;
•our ability to maintain our status as a business development company (“BDC”); and
•our intent to satisfy the requirements of a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”);
•the expected synergies and savings associated with the CSL III Merger (as defined below);
•the ability to realize the benefits of the CSL III Merger;
•the combined company’s plans, expectations, objectives and intentions, as a result of the CSL III Merger.
We use words 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. Our actual results and condition could differ materially from those implied or expressed in the forward-looking information for any reason, including the factors set forth in “Risk Factors” in Part I, Item 1A of and elsewhere in this Form 10-K.
We have based the forward-looking statements included in this Form 10-K on information available to us on the date of this Form 10-K, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.
In this Annual Report on Form 10-K, except where the context suggests otherwise:
•the terms “we,” “us,” “our,” “Company” and “CGBD” refer to Carlyle Secured Lending, Inc. (formerly TCG BDC, Inc.), a Maryland corporation, and its consolidated subsidiaries;
•the term “SPV” refers to TCG BDC SPV LLC, a wholly owned and consolidated subsidiary;
•the term “2015-1 Issuer” refers to Carlyle Direct Lending CLO 2015-1R LLC, a wholly owned and consolidated subsidiary;
•the term “Carlyle” refers to The Carlyle Group Inc. (NASDAQ: CG) and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds);
•the term “Administrator” refers to Carlyle Global Credit Administration L.L.C., our administrator, a wholly owned and consolidated subsidiary of Carlyle;
•the term “Investment Adviser” refers to Carlyle Global Credit Investment Management L.L.C., a Delaware limited liability company and an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and a wholly owned and consolidated subsidiary of Carlyle, which serves as the investment adviser;
•the term “Credit Fund” refers to Middle Market Credit Fund, LLC, an unconsolidated limited liability company, in which we own a 50% economic interest and co-manage with Credit Partners USA LLC, and its wholly owned and consolidated subsidiaries;
•the term “Credit Fund II” refers to Middle Market Credit Fund II, LLC, a wholly owned and consolidated subsidiary as of December 31, 2025;
•the term “CSL III SPV” refers to Carlyle Secured Lending III SPV, L.L.C., a wholly owned and consolidated subsidiary as of December 31, 2025;
•the term “Structured Credit Partners” refers to Structured Credit Partners JV, LLC, the joint venture with Sixth Street Partners and Carlyle Credit Solutions Inc. (“CARS”), in which we own 25% of the voting interests; and
•references to “this Form 10-K” are to our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 1. Business
Carlyle Secured Lending, Inc., a Maryland corporation, is a specialty finance company that is a closed-end, externally managed, non-diversified management investment company. We have elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act” or the “1940 Act”). For U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Code. We were formed in February 2012, commenced investment operations in May 2013 and began trading on the Nasdaq Global Select Market, under the symbol “CGBD,” upon completion of our initial public offering in June 2017. Our principal executive offices are located at One Vanderbilt Avenue, Suite 3400, New York, New York 10017.
Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. Our core investment strategy focuses on lending to U.S. middle market companies, which we define as companies with approximately $25.0 million or greater of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. We seek to achieve our investment objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of our assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities and structured products). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms.
We invest primarily in loans to middle market companies whose debt has been rated below investment grade, or would likely be rated below investment grade if such debt was rated. These securities, which are often referred to as “junk,” have
predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. See Part I, Item 1A of this Form 10-K “Risk Factors— Risks Related to Our Investments— Our investments are risky and speculative.”
Our investment approach is focused on capital preservation based on long-term fundamental credit performance. The Investment Adviser’s investment team utilizes a rigorous, systematic, and consistent investment process, refined over Carlyle’s 38-year history investing in private markets across multiple cycles, designed to achieve enhanced risk-adjusted returns. In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including the Investment Adviser and its affiliates.
On March 27, 2025, we completed our acquisition of Carlyle Secured Lending III (“CSL III”), a Maryland corporation, pursuant to the Agreement and Plan of Merger (as amended the “Merger Agreement”), dated as of August 2, 2024, by and among us, CSL III, Blue Fox Merger Sub Inc., a Maryland corporation and our wholly owned subsidiary (“Merger Sub”), and, solely for the limited purposes set forth therein, CSL III Advisor, LLC, a Delaware limited liability company and investment adviser to CSL III (“CSL III Advisor”), and the Investment Adviser (together with CSL III Advisor, the “Advisors”), pursuant to which, Merger Sub first merged with and into CSL III, with CSL III continuing as the surviving company and as our wholly owned subsidiary (the “Merger”) and immediately thereafter, CSL III merged with and into us, with us continuing as the surviving company (together with the Merger, the “CSL III Merger”).
The Investment Adviser
The Investment Adviser manages our investment activities, including sourcing potential investments, conducting research and due diligence on prospective investments, analyzing and structuring our investments and monitoring our investments on an ongoing basis.
The Investment Adviser is part of Carlyle’s Global Credit segment, and benefits from the more than 205 experienced investment professionals across the origination, capital markets, underwriting and portfolio management teams. The Investment Adviser’s investment committee that oversees our investment activities comprises several of the most senior credit professionals within the Global Credit segment, with backgrounds and expertise across multiple asset classes with significant industry experience and tenure. The investment committee is responsible for reviewing and approving our investment opportunities. The members of the investment committee have experience investing through different credit cycles. The investment committee is led by Mark Jenkins, a Managing Director and Co-President and Head of Global Credit & Insurance at Carlyle.
The Investment Adviser also serves, and may in the future serve, as investment adviser to other existing and future affiliated BDCs that have investment objectives similar to our investment objectives.
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The Original Investment Advisory Agreement was amended on September 15, 2017, August 6, 2018, and February 20, 2025, after the approval of the Company’s Board of Directors, including a majority of the Independent Directors, at in-person meetings of the Board of Directors held on May 30, 2017, August 6, 2018, and February 18, 2025, and the approval of the Company’s stockholders at special meetings of stockholders held on September 15, 2017 and August 6, 2018 (as amended, the “Investment Advisory Agreement”).
Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On April 29, 2025, the Company’s Board of Directors, including a majority of the Independent Directors, approved at an in-person meeting the continuance of the Investment Advisory Agreement with the Investment Adviser for an additional one year term. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company. For providing these services, the Investment Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
Our base management fee is calculated at an annual rate of 1.50% of the average value of the Company’s gross assets at the end of the two most recently completed fiscal quarters; provided, however, the base management fee is calculated at an annual rate of 1.00% of the Company’s gross assets as of the end of the two most recently completed calendar quarters that
exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters. “Gross assets” is determined on a consolidated basis in accordance with generally accepted accounting principles in the United States, includes assets acquired through the incurrence of debt (see Note 9, Borrowings, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K), and excludes cash and any temporary investments in cash-equivalents, including U.S. government securities and other high-quality investment grade debt investments that mature in 12 months or less from the date of investment. The base management fee is payable quarterly in arrears, will be appropriately adjusted for any share issuances or repurchases during such applicable fiscal quarters, and will be appropriately pro-rated for any partial month or quarter.
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income excludes any amortization or accretion of purchase premiums or purchase discounts to interest income resulting solely from merger-related or acquisition-related accounting adjustments in connection with the assets acquired in the CSL III Merger, Credit Fund II Purchase (as defined below), or in any similar asset acquisition transaction, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related or acquisition-related accounting adjustments, in the aggregate, would result in an increase in Pre-Incentive Fee Net Investment Income.
Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to a “hurdle rate” of 1.50% per quarter (6.00% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.
Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
•no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;
•100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and
•17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.
The calculation of cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, and aggregate unrealized capital depreciation also excludes any amounts that result solely from merger-related or acquisition-related
accounting adjustments in connection with assets acquired in the CSL III Merger and Credit Fund II Purchase or any similar asset acquisition transaction, including any premium or discount paid for the acquisition of such assets, solely to the extent that inclusion of such adjustments would, in the aggregate, result in an increase in the second part of the incentive fees.
Our Administrator
On April 3, 2013, the Company’s Board of Directors approved an administration agreement (the “Administration Agreement”) between the Company and the Administrator, a Delaware limited liability company. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including its Chief Financial Officer and Chief Compliance Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.
Unless terminated earlier, the Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On April 29, 2025, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
On April 3, 2013, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides our Administrator with access to Carlyle’s finance, operations, legal, compliance and administrative professionals.
On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street”), which was amended on March 11, 2015 (as amended, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”). Pursuant to the State Street Sub-Administration Agreement, State Street provides certain administrative and professional services. State Street also serves as our custodian. Unless terminated earlier, the State Street Sub-Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On April 29, 2025, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the State Street Sub-Administration Agreement for a one year period. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
Carlyle
The Investment Adviser and Administrator are affiliates of Carlyle. Carlyle is one of the world’s largest global investment firms that deploys private capital across three business segments: Global Private Equity, Global Credit, and Carlyle AlpInvest. With $477 billion of assets under management (“AUM”) as of December 31, 2025, Carlyle’s teams invest across a range of strategies that leverage its deep industry expertise, local insights, and global resources to deliver attractive returns throughout an investment cycle. Carlyle employs more than 2,500 employees, including 770 investment professionals in 27 offices across four continents, and serves more than 3,200 active carry fund investors from 87 countries.
Carlyle’s Global Credit segment, which had $211 billion in AUM as of December 31, 2025, advises products that pursue investment strategies across the credit spectrum, including liquid credit, opportunistic credit, direct lending, asset-backed finance, aviation finance, infrastructure credit, and cross-platform credit products. Global Credit, which also includes the insurance solutions and global capital markets businesses, has been Carlyle’s fastest-growing segment in the past five years, with total AUM nearly quadrupling in that period. Since the establishment of Global Credit in 1999, these various capital sources have provided the opportunity for Carlyle to offer highly customizable and creative financing solutions to borrowers to meet their specific capital needs. Carlyle draws on the expertise and underwriting capabilities of its more than 205 investment professionals and leverages the resources and industry expertise of Carlyle’s global network to provide creative solutions for borrowers.
We have established, and may in the future establish, strategic relationships that may diversify our product offering, increase our scale, enhance our origination capabilities or provide other benefits.
To this end, in February 2016, we and Credit Partners USA LLC (“Credit Partners”), a wholly owned subsidiary of PSP Investments Holding USA LLC, an affiliate of a large Canadian pension fund, agreed to co-invest through Credit Fund, a joint venture primarily focused on investing in senior secured loans to middle market companies. Since its inception and through December 31, 2025, Credit Fund has invested in over $4.0 billion, before any repayments or exits, of senior secured loans. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $175.0 million each as of December 31, 2025, which was subsequently increased to $250.0 million each on February 11, 2026.
Additionally, in November 2020, we and Cliffwater Corporate Lending Fund (“CCLF”), an investment vehicle managed by Cliffwater LLC, agreed to co-invest through Credit Fund II, a joint venture primarily focused on investing in senior secured loans of middle market companies. Since the inception of Credit Fund II through December 31, 2024, the Company and CCLF made capital contributions of $78.1 million and $12.7 million in members’ equity, respectively, and owned 84.13% and 15.87% of Credit Fund II. On February 10, 2025, we and CCLF entered into an amendment to the Credit Fund II limited liability company agreement (as so amended, the “Amended Credit Fund II LLCA”). Pursuant to the terms of the Amended Credit Fund II LLCA, Credit Fund II distributed $2.7 million to CCLF, and we contributed $140.0 million in cash to Credit Fund II. Such distributions and contributions were accounted for as a reduction in CCLF's membership interest based on the net asset value of Credit Fund II as of December 31, 2024. On February 11, 2025, we entered into a membership interest purchase agreement, (“Credit Fund II Purchase”) to purchase CCLF's remaining membership interest for cash at the net asset value thereof as of December 31, 2024, after which Credit Fund II became our wholly owned subsidiary and in connection therewith the CCLF board members resigned.
In December 2025, we, together with Carlyle Credit Solutions, Inc. (“CARS”), an affiliated BDC, and certain affiliates of Sixth Street Partners, LLC, Sixth Street Lending Partners and Sixth Street Specialty Lending, Inc. (together, “Sixth Street”) (collectively with us and CARS, the “SCP Members”), agreed to co-invest through Structured Credit Partners JV, LLC (“Structured Credit Partners”), a joint venture that will primarily invest in broadly syndicated loans and will be co-managed by Carlyle and Sixth Street. The broadly syndicated loans will be financed by financing subsidiaries that include warehouses and collateralized loan obligations. We and CARS each own 25% of the voting interest in Structured Credit Partners, with the remaining 50% ownership held by Sixth Street. As of December 31, 2025, Structured Credit Partners had not commenced operations, and no capital had been contributed to the joint venture. Each Carlyle SCP Member’s initial capital commitment to Structured Credit Partners is up to $150.0 million, if and when requested, and the total initial capital commitments of all SCP Members to Structured Credit Partners are up to $600.0 million, if and when requested. Each SCP Member has equal representation on the board of managers of Structured Credit Partners.
Board of Directors
The Company’s Board of Directors currently consists of seven members, four of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Nominating and Governance Committee of the Board of Directors, and a Compensation Committee. In 2024, the Board of Directors established a Special Committee, consisting solely of Independent Directors, to evaluate the terms of the CSL III Merger, which was completed in 2025. The Special Committee is no longer active. In the future, the Board of Directors, in its discretion, may establish additional committees as it deems necessary or appropriate.
Competitive Strengths
Carlyle Global Credit’s key competitive strengths are based on Carlyle’s integrated platform – with a breadth of capabilities, scale of capital and depth of expertise – which Carlyle believes allows it to mitigate competition and thereby improve our ability to deliver on the expectations of stockholders. We believe the following characteristics distinguish Carlyle’s capabilities in private credit:
•Proven Direct Origination Approach. The Carlyle Direct Lending platform is Carlyle’s direct lending business unit that operates within the broader Carlyle Global Credit Segment. Carlyle Direct Lending’s business directly originates nearly 100% of its investments, sourced from both the dedicated direct lending origination team as well as from the many adjacent capabilities across the Carlyle Global Credit platform. This origination approach has resulted in a strong and diversified flow of opportunities, approximately 1,500 per annum, from which Carlyle believes it can select investments with the best potential risk/reward characteristics.
•Breadth of Capabilities. Carlyle believes it has one of the broadest credit investment capabilities in the market today. As a global private credit platform, Carlyle has the ability to invest across the capital structure in first lien, unitranche, second lien, junior debt and preferred equity. Carlyle Global Credit can potentially serve as a one-stop shop, providing creative and holistic solutions for borrowers across the capital structure, which allows it to pursue investment opportunities with limited competition.
•Scale of Capital. With $211 billion of AUM as of December 31, 2025 across its platform, Carlyle Global Credit maintains a significant capital base that can provide a full capital solution, delivering certainty of execution for borrowers and mitigating opportunities for competitive disintermediation.
•Depth of Expertise. Carlyle is a market leading global platform with $477 billion of AUM, an experienced and tenured bench of 770 investment professionals with well-established, long-standing relationships with sponsors, management teams, and industry experts, as of December 31, 2025. Carlyle believes that it brings differentiated diligence insights and extensive experience to inform credit selection. As a firm, Carlyle seeks to bring the collective power of the global platform with respect to individual investments, including sector credit analysts, Carlyle Private Equity’s deep knowledge and relationships with potential customers, suppliers or competitors of a given company, and internal dedicated diligence groups (e.g., government affairs and environment, social and corporate governance (“ESG”)). Carlyle believes this integrated and collaborative approach allows it to move faster and with higher conviction than its competitors in many scenarios.
•Rigorous Credit Selection. Carlyle employs a robust, iterative and heavily documented underwriting process for its Direct Lending business, which consists of four “gates” where a credit is reviewed and requires sign-off, including (i) at the point of origination, (ii) by the underwriting team, (iii) by Carlyle Direct Lending’s screening committee (the “Direct Lending Screening Committee” or the “Screening Committee”) and finally (iv) by Carlyle’s Private Credit Investment Committee at the Investment Adviser that oversees our investment activities. This rigorous diligence approach has allowed for a less than 5% closing rate on new transactions that were reviewed by the deal team over the past 12 months.
•Defensive Approach. Carlyle approaches the direct lending business with a defensive mindset that permeates all aspects of investment selection. On a strategic level, Carlyle seeks to construct well diversified portfolios, heavily weighted towards non-cyclical industries, and applies only moderate leverage at the portfolio level in order to seek to generate sustainable income levels. In addition, in individual asset selection, Carlyle favors sponsored over non-sponsored borrowers, seeks to transact with sponsors it knows well (approximately 80% of Carlyle Direct Lending’s business is with repeat sponsors), works with companies it knows well via its significant incumbencies, seeks opportunities at the top of the capital structure, and primarily invests in transactions where Carlyle maintains leadership or roles with significant influence (approximately 75% of originations having a titled role in recent years).
Market Opportunity
We believe the middle market lending environment provides attractive investment opportunities as a result of a combination of the following factors:
•Favorable Market Environment. We believe the middle market remains one of the most attractive investment areas due to its large size, superior value relative to the broadly syndicated loan market, and supply-demand imbalance that continues to favor non-bank lenders. We believe market yields remain attractive and leverage levels at middle market companies are stable, creating a favorable investment environment.
•Large and Growing U.S. Middle Market. The middle market direct lending asset class has undergone tremendous growth and maturation over the past decade and is one of the largest sub-segments of private credit, a now $1,950+ billion market.Carlyle believes this growth has been driven by fundamentally sound, secular drivers, including the expansion of private market activity, increased bank regulation and consolidation and structural changes in liquid credit markets, all of which we believe creates a significant opportunity for private credit investing.
•Benefits of Traditional Middle Market Focus. Carlyle believes that there are meaningful benefits to investing in middle market directly originated assets, which allows the strategy to generate excess return as compared to traditional fixed income asset classes, with comparable risk performance. The excess return is generated by prudently taking incremental complexity and illiquidity risk. Traditional middle market companies offer more attractive economics in the form of upfront fees, spreads and prepayment penalties. In addition, senior secured middle market loans typically have strong defensive characteristics and structural protections, including priority in the capital structure and covenants. Many of the middle market loans are structured with financial covenants in
contrast to broadly syndicated markets, where financial covenants are comparatively rare. Additional protection may be gained through better credit documentation and control, enhanced management and diligence access, monitoring of assets, and significantly more influence in the instance of a workout scenario.
•Market Environment Favors Non-Traditional Lenders. The direct lending asset class has also benefited from an ongoing secular trend in the banking industry. Post Great Financial Crisis in 2008, as tougher regulations have reshaped the landscape, traditional banks have reduced their lending capabilities. As banks have retreated due to a number of new laws, regulations and regulatory guidance, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Basel III regulatory capital framework, institutional investors have increased their lending capabilities to fill the void.
•Favorable Capital Markets Trends. Over the past two decades, Carlyle has witnessed a secular trend with respect to the shift in economic activity from public to privately owned businesses due to less appetite for public market exposure. The number of public companies in the U.S. has dropped by nearly 50% from its peak, with a mirror image increase in the rise of private equity-backed companies. Overall public listing activity has declined by approximately two-thirds over the past forty years. These privately owned companies often prefer to finance themselves through the private markets, which has allowed for a natural expansion of the market opportunity for direct lenders on a secular basis for over a decade. Given current market dynamics, Carlyle believes that the asset class will continue to expand.
Investment Strategy
We primarily target loans to U.S.-based middle market companies that require capital for growth, acquisitions, recapitalizations, and refinancings, with a focus on companies controlled by private equity investment firms. In addition, we may also make investments in non-private equity owned public or private companies of various sizes, as well as invest in certain non-U.S.-based borrowers. We seek to partner with strong management teams executing long-term, value-maximizing strategies. Target investments typically exhibit some or all of the following characteristics:
•Borrowers with EBITDA of $25–$100 million;
•Leading market positions;
•Defensible business strategies with significant barriers to entry;
•Diversified product offerings, customer bases and supplier profiles;
•Experienced management teams with successful track records;
•Significant valuation cushion, typically expressed as a significant equity investment from a financial sponsor;
•Demonstrated stability and/or growth of revenue;
•Predictable cash flows with limited risks of disruption;
•Low capital expenditures requirements; and
•A North American base of operations.
While we believe that the criteria listed above are important in identifying and investing in prospective portfolio companies, not all of these criteria will be necessarily met by each prospective portfolio company. In addition, we may change our investment objective, investment strategy and/or investment criteria over time without notice to or consent from our investors.
The Investment Adviser’s investment team intends to use a disciplined, credit-driven investment strategy, including:
•pursuing investments in senior secured loans, and aiming to maintain the appropriate allocation among the various types of senior secured loans, as well as junior debt to allow us to achieve its return while maintaining its desired credit risk profile;
•performing in-depth due diligence on companies, management teams and sponsors and conducting fundamental credit and valuation analyses;
•seeking to structure investments to provide us with security, current cash pay interest and additional upside through original issuance discount or other fees; and
•active management of portfolio investments through ongoing dialogue with equity owners and management, monitoring of operational results, financial reports and compliance with covenants, company visits and periodic evaluation of potential exit alternatives for part or all of each investment.
Investment Criteria and Transactional Structures
We invest primarily in transactions supported by private equity sponsors. We seek to invest in the following types of assets, with an emphasis on senior debt:
•traditional cash flow senior secured debt;
•unitranche senior secured debt financings;
•“last out” unitranche debt;
•second lien senior debt;
•traditional subordinated debt;
•preferred and common equity co-investments;
•secondary and other opportunistic asset purchases; and
•structured products.
As noted above, we may also from time to time participate in traditional subordinated debt financings and preferred and common equity co-investments. We may also make secondary purchases of all of the above types of investments and other securities on an opportunistic basis.
Investment Process
Origination
The Carlyle Direct Lending investment team’s multi-channel origination model generates attractive investment opportunities through a variety of sources, including over 250 private equity firms, financial institutions, other middle market lenders, strategic relationships and arrangements, financial advisors, and experienced management teams. The origination team supplements these relationships through personal visits and marketing campaigns focused on maximizing investment deal flow. It is their responsibility to identify specific opportunities, refine opportunities through candid exploration of the underlying facts and circumstances and to apply creative and flexible solutions to solve a borrower or sponsor’s financing needs. The team of origination professionals is located in New York and Los Angeles. Each originator maintains long-standing relationships with potential sources of deal flow and is responsible for covering a specified target list of accounts, organized by geography and secondarily by sector. Carlyle believes the originators’ strengths and breadth of relationships across a wide range of markets generate numerous financing opportunities, which enable it to be highly selective through its diligence and investment process, with 5% of new investment opportunities screened over the past 12 months closing. The investment team of Carlyle Direct Lending has cultivated very strong relationships with private equity sponsors with whom it works closely in sourcing and executing transactions. Carlyle believes that borrowers benefit from full financing solutions, access to the vast Carlyle network, and reliable execution.
Underwriting
The underwriting process is led by an experienced team of senior underwriters that are organized by sector and benefit from a deep base of shared information enabled by platform integration, as well as Carlyle resources. The typical deal timeline is sixty to ninety days and follows a multi-faceted four-step process:
1.Screening. The deal team reviews marketing materials and industry reports, compiles debt and equity comparables, reaches out to industry experts within the Carlyle network, identifies key credit strengths and risks and formulates a view on structure. The deal team then presents an initial analysis through a screening memo to the Screening Committee for high-level feedback and a decision to move forward with additional credit work. The Screening Committee is comprised of senior members of the direct lending leadership team. Based on feedback from the committee, the deal team will prepare and disseminate an outcomes email that documents the takeaways from the meeting, including preferred financing structure as well as terms, key diligence items and next steps.
2.Formal Review. Following an indication from the Screening Committee to move forward in the diligence process, the deal team will compile a detailed diligence list and prepare for in-depth credit analysis. During this process, the deal team works closely with the private equity sponsor / borrower in all aspects of due diligence.
Formal due diligence includes meeting with the management team, reviewing the data room and performing key financial analyses, creating a detailed financial model with sensitivities assuming various market environments, reviewing sell-side and third-party research, which includes industry reports and financial diligence, following up with industry experts within the Carlyle network for additional feedback, and drafting the commitment papers and term sheet.
As part of the extensive due diligence process, the deal team fully leverages all internal Carlyle resources to aid in investment decisions. In addition, the deal team may utilize third-party expert networks to supplement their work to gain further insight into company and industry factors from various thought leaders across the company’s markets.
The Investment Adviser incorporates formal ESG reviews into its investment process. All deals are thoroughly vetted leveraging sector- and sub-sector-specific Sustainability Accounting Standards Board standards. ESG diligence incorporates country risk assessments for corruption and anti-money laundering concerns as well. The underwriters are responsible for assessing these ESG risks and including their assessment in the deal memo that the Screening and Investment Committees will review.
The formal review part of the process is iterative and involves re-screening with members of the Screening Committee, typically two to four times over the course of the deal, to produce a fulsome investment memo and provide a full term sheet and commitment papers, subject to outstanding diligence items.
3.Final Investment Committee Approval. After the Screening Committee has signed off on the investment memo, the deal team prepares for the Investment Committee approval process. The deal team reviews and summarizes final third-party industry work, performs outstanding ESG and regulatory due diligence, and begins drafting the definitive legal documentation for the transaction. Once the credit work for the transaction has been finalized, the deal team will finalize the investment memo and present the investment to the Investment Committee, where approval by a majority of the committee is required to approve a transaction. The Investment Committee has delegated approval of certain amendments, follow-on investments with existing borrowers, investments below certain size thresholds (existing or new platforms), and other matters as determined by the Investment Committee to the Screening Committee.
4.Closing. Once the investment has been approved and prior to funding, the deal team will prepare a closing memo documenting any updates since approval, changes to key legal terms, and the final financial covenant analysis. Once the sponsor / borrower legal diligence, and the know your customer, anti-money laundering and legal documentation have been finalized, the transaction will close and fund.
The deal team focuses on lending to companies that it believes are performing, high quality businesses with a focus on strong fundamentals, market leadership with unique competitive advantages and high barriers to entry, positive cash flow generation on a historical and pro-forma basis including downside scenarios, and modest loan-to-value across economic cycles. The deal team crafts a fulsome memo with pages including diligence completed on a variety of topics. This includes, but is not limited to, information on the industry, financial and legal topics and company-specific considerations.
Portfolio and Risk Management
The investment team views proactive portfolio monitoring as a vital part of its investment process, which includes the ongoing review of a borrower by portfolio management, underwriting and workout professionals, with multiple layers of risk review and oversight. The investment team follows a rigorous monitoring strategy that utilizes a proprietary dashboard template for each transaction, which tracks financial performance, covenant compliance, follow-on transactions and amendments, and real-time updates to internal risk ratings based on qualitative and quantitative factors. The portfolio management process involves a variety of ongoing and scheduled reviews that allow for early detection of issues and escalation to the Investment Committee and workout team to avoid credit losses. This process includes detailed portfolio dashboard updates, weekly credit events meetings, quarterly meetings to conduct formal portfolio reviews, focused on technical analysis of financial performance and portfolio diversification, and ongoing ad-hoc meetings to handle borrower-specific requests, including follow-on transactions and amendments.
In connection with the quarterly portfolio reviews, the investment team also compiles a quarterly risk report that examines, among other things, migration in the portfolio and loan level investment mix, industry diversification, internal risk ratings, revenue, EBITDA, and leverage.
Frequency of review of individual loans is determined on a case-by-case basis, based on internal risk ratings as laid out below, total exposure and other criteria set forth by the Investment Committee. The Carlyle Direct Lending team has developed
an internal risk policy which regularly assesses the risk profile of each investment and rates them based on the following categories, which are referred to as internal risk ratings.
Rating
Definition
1
Borrower is operating above expectations, and the trends and risk factors are generally favorable.
2
Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost basis is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.
3
Borrower is operating below expectations and level of risk to our cost basis has increased since the time of origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.
4
Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.
5
Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.
Beyond the policies detailed above, the Investment Adviser’s investment team performs analyses and projections to assess potential exposure of the portfolio to variable macroeconomic factors and market conditions. Sample analyses include assessing (i) the impact of rising operating costs on our borrowers and end consumers due to inflationary pressures, particularly in food and energy, (ii) volatility in foreign exchange rates, (iii) impact of geopolitical tensions, (iv) interest rate sensitivity and (v) disruptions in our supply chain. These analyses can take the form of periodic (weekly/monthly/quarterly) reports as well as ad hoc analysis based on current market conditions.
Portfolio Composition
As of December 31, 2025, the fair value of our investments was approximately $2.5 billion in 165 portfolio companies/investment funds. The type, geography and industry composition of our investments, each as a percentage of the fair value of our investments as of December 31, 2025, were as follows:
As of
Type—% of Fair Value
December 31, 2025
First Lien Debt
83.7
%
Second Lien Debt
3.9
Equity Investments
5.8
Investment Funds
6.6
Total
100.0
%
As of
Type—% of Fair Value of First and Second Lien Debt
See the Consolidated Schedule of Investments as of December 31, 2025 in our consolidated financial statements included in Part II, Item 8 of this Form 10-K for more information on these investments, including a list of companies and type, cost and fair value of investments.
Allocation of Investment Opportunities and Potential Conflicts of Interest
The Investment Adviser, its investment professionals, our executive officers and directors, and other current and future principals of the Investment Adviser serve or may serve as investment advisers, officers, directors or principals of entities or investment funds that operate in the same line of business as we do or a related line of business and/or investment funds, accounts and other similar arrangements advised by Carlyle.
An affiliated investment fund, account or other similar arrangement currently formed or formed in the future and managed by the Investment Adviser or its affiliates may have overlapping investment objectives and strategies with our own and, accordingly, may invest in asset classes similar to those targeted by us. This creates potential conflicts in allocating investment opportunities among us and such other investment funds, accounts and similar arrangements, particularly in circumstances where the availability or liquidity of such investment opportunities is limited or where co-investments by us and other funds, accounts or similar arrangements are not permitted under applicable law, as discussed below.
For example, Carlyle sponsors several investment funds, accounts and other similar arrangements, including, without limitation, structured credit funds, closed-end registered investment companies, BDCs, carry funds, and managed accounts and it may sponsor others in the future. The SEC has granted us exemptive relief that permits us and certain of our affiliates to co-invest in suitable negotiated investments (the “Exemptive Relief”). If Carlyle is presented with investment opportunities that generally fall within our investment objective and other board-established criteria and those of other Carlyle funds, accounts or other similar arrangements (including other existing and future affiliated BDCs), whether focused on a debt strategy or otherwise, Carlyle allocates such opportunities among us and such other Carlyle funds, accounts or other similar arrangements in a manner consistent with the Exemptive Relief, the Investment Adviser’s allocation policies and procedures and Carlyle’s other allocation policies and procedures, where applicable, as discussed below. More specifically, investment opportunities in suitable negotiated investments for investment funds, accounts and other similar arrangements managed by the Investment Adviser, and other funds, accounts or similar arrangements managed by affiliated investment advisers that seek to co-invest with us or other Carlyle BDCs, are allocated in accordance with the Exemptive Relief. Investment opportunities for all other investment funds, accounts and other similar arrangements not managed by the Investment Adviser are allocated in accordance with their respective investment advisers’ and Carlyle’s other allocation policies and procedures. Such policies and procedures may result in certain investment opportunities that are attractive to us being allocated to other funds that are not managed by the Investment Adviser. Carlyle’s, including the Investment Adviser’s, allocation policies and procedures are designed to allocate investment opportunities fairly and equitably among its clients over time, taking into account a variety of factors which may include the sourcing of the transaction, the nature of the investment focus of each such other Carlyle fund, accounts or other similar arrangements, each fund’s, account’s or similar arrangement’s desired level of investment, the relative amounts of capital available for investment, the nature and extent of involvement in the transaction on the part of the respective teams of investment professionals, any requirements contained in the limited partnership agreements and other governing agreements of the Carlyle funds, accounts or other similar arrangements and other considerations deemed relevant by Carlyle in good faith, including suitability considerations and reputational matters. The application of these considerations may cause differences in the performance of different Carlyle funds, accounts and similar arrangements that have similar strategies.
Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle. We are also not permitted to make any co-investments with clients of the Investment Adviser or its affiliates (including any fund managed by Carlyle) without complying with our Exemptive Relief, subject to certain exceptions, including with respect to our downstream affiliates. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable laws and regulations, existing regulatory guidance, and the Investment Adviser’s and Carlyle’s other allocation policies and procedures.
While Carlyle and the Investment Adviser seek to implement their respective allocation processes in a fair and equitable manner under the particular circumstances, there can be no assurance that it will result in equivalent allocation of or participation in investment opportunities or equivalent performance of investments allocated to us as compared to the other entities. In some cases, due to information barriers that are in place, we and other Carlyle investment funds, accounts or other similar arrangements may compete with each other for specific investment opportunities without being aware that they are competing with each other. Carlyle has a conflict system in place above these information barriers to identify potential conflicts early in the process and determine if an allocation decision needs to be made or if an investment is precluded. If the conflict
system detects a potential conflict, the legal and compliance departments of Carlyle assess investment opportunities to determine whether a particular investment opportunity is required to be allocated to a particular investment fund, account or other similar arrangement (including us) or is prohibited from being allocated to a particular investment fund, account or similar arrangement. Subject to a determination by the legal and compliance departments (if applicable), portfolio management teams and, as applicable, the Investment Adviser's allocation committees, are then charged with ensuring that investment opportunities are allocated to the appropriate investment fund, account or similar arrangement in accordance with the Investment Adviser's allocation policies and procedures. In addition, in some cases Carlyle and the Investment Adviser may make investment recommendations to investment funds, accounts and other similar arrangements where the investment funds, accounts and other similar arrangements make the investment independently of Carlyle and the Investment Adviser. As a result, there are circumstances where investments appropriate for us are instead allocated, in whole or in part, to such other investment funds, accounts or other similar arrangements irrespective of the Investment Adviser’s and Carlyle’s other policies and procedures regarding allocation of investments. Where Carlyle otherwise has discretion to allocate investment opportunities among various funds, accounts and other similar arrangements, it should be noted that Carlyle may determine to allocate such investment opportunities away from us.
During periods of unusual market conditions, the Investment Adviser may deviate from its normal trade allocation practices. For example, this may occur with respect to the management of unlevered and/or long-only investment funds, accounts or similar arrangements that are typically managed on a side-by-side basis with levered and/or long-short investment funds, accounts or similar arrangements.
For potential conflicts of interest in allocating investment opportunities among the Company and other investment funds, accounts or similar arrangements advised by Carlyle, see Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to Our Business and Structure—There are significant potential conflicts of interest, including the management of other investment funds and accounts by the Investment Adviser, which could impact our investment returns and the holders of our common stock.”
Regulation
General - Election to be Taxed as a RIC
We have elected to be treated, and intend to continue to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. As a RIC, we generally will not pay corporate-level U.S. federal income taxes on any net ordinary income or capital gains that we timely distribute to our stockholders as dividends. Instead, dividends we distribute generally will be taxable to the holders of our common stock, and any net operating losses, foreign tax credits and other tax attributes may not pass through to the holders of our common stock. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, we must distribute to our stockholders on an annual basis at least 90% of our investment company taxable income (generally, our net ordinary income plus the excess of our realized net short-term capital gains over realized net long-term capital losses, determined without regard to the dividends paid deduction) for any taxable year (the “Annual Distribution Requirement”). The following discussion assumes that we qualify as a RIC and have satisfied the Annual Distribution Requirement. If we (1) qualify as a RIC, and (2) satisfy the Annual Distribution Requirement, then we are not subject to U.S. federal income tax on the portion of our net taxable income we distribute (or are deemed to distribute) to stockholders. We are subject to U.S. federal income tax at regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our stockholders.
In addition, if we fail to distribute in a timely manner an amount at least equal to the sum of (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year (the “Excise Tax Distribution Requirements”), we are liable for a 4% excise tax on the portion of the undistributed amounts of such income that are less than the amounts required to be distributed based on the Excise Tax Distribution Requirements. For this purpose, however, any ordinary income or capital gain net income retained by us that is subject to corporate income tax for the tax year ending in that calendar year is considered to have been distributed by year end (or earlier if estimated taxes are paid).
In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:
•continue to qualify as a BDC under the Investment Company Act at all times during each taxable year;
•derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities or foreign currencies, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities or foreign currencies (the “90% Gross Income Test”); and
•diversify our holdings so that at the end of each quarter of the taxable year:
◦at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and
◦no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, or two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses, or of certain “qualified publicly traded partnerships” (the “Diversification Tests”).
Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our qualification as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Distribution Requirements, we may make such dispositions at times that, from an investment standpoint, are not advantageous. If we are prohibited from making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions, we may not be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of ordinary income rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions as described below. We intend to monitor our transactions, make the appropriate tax elections and make the appropriate entries in our books and records when we make any such investments in order to mitigate the effect of these rules.
A RIC is limited in its ability to deduct expenses in excess of its “investment company taxable income” (which is, generally, ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If our expenses in a given year exceed gross taxable income, we would have a net operating loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent years. In addition, expenses can be used only to offset investment company taxable income, not net capital gain. Due to these limits on the deductibility of expenses, we may for U.S. federal income tax purposes have aggregate taxable income for several years that we distribute and that is taxable to our stockholders even if such income is greater than the aggregate net income we actually earned during those years. Such distributions may be made from our cash assets or by liquidation of investments, if necessary. We may realize gains or losses from such liquidations. In the event we realize net capital gains from such transactions, a holder may receive a larger capital gain distribution than the holder would have received in the absence of such transactions.
General—Regulation as a Business Development Company
We have elected to be regulated as a BDC under the Investment Company Act. A BDC must be organized in the United States for the purpose of investing in or lending to primarily private companies and must offer, and must provide upon request, significant managerial assistance available to them. A BDC may use capital provided by public stockholders and from other sources to make long-term, private investments in businesses. A publicly-traded BDC provides stockholders with the ability to retain the liquidity of a publicly traded stock while sharing in the possible benefits, if any, of investing in primarily privately owned companies.
We may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority of the outstanding voting securities, as required by the Investment Company Act. A majority of the outstanding voting securities of a company is defined under the Investment Company Act as the lesser of: (a) 67% or more of such company’s voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (b) more than 50% of the outstanding voting securities of such company. We do not anticipate any substantial change in the nature of our business.
As with other companies regulated by the Investment Company Act, a BDC must adhere to certain substantive regulatory requirements. A majority of our directors must be persons who are not “interested persons,” as that term is defined in Section 2(a)(19) of the Investment Company Act (such directors are referred to as the “Independent Directors” and the directors who are not Independent Directors are referred to as the “Interested Directors”). We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.
The Investment Company Act contains prohibitions and restrictions relating to certain transactions between BDCs and certain affiliates (including any investment advisers or sub-advisers), principal underwriters and certain affiliates of those affiliates or underwriters. Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle. We are also not permitted to make any co-investments with the Investment Adviser or its affiliates (including any fund managed by Carlyle) without complying with our Exemptive Relief, subject to certain exceptions, including with respect to our downstream affiliates. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and the Investment Adviser’s allocation policies and procedures.
As a BDC, we are generally required to meet a minimum “asset coverage” ratio after each issuance of senior securities. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock. On April 9, 2018 and June 6, 2018, our Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and our stockholders, respectively, approved the application to us of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the 1940 Act. As a result, the minimum asset coverage ratio applicable to us was reduced from 200% to 150%, effective as of June 7, 2018, the first day after our 2018 annual meeting of stockholders.
We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an “underwriter” as that term is defined in the Securities Act of 1933, as amended (the “Securities Act”). Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities of our portfolio companies. We may enter into hedging transactions to manage the risks associated with interest rate and currency fluctuations. We may purchase or otherwise receive warrants or options to purchase the common stock of our portfolio companies in connection with acquisition financings or other investments. In connection with such an acquisition, we may acquire rights to require the issuers of acquired securities or their affiliates to repurchase them under certain circumstances.
We do not intend to acquire securities issued by any investment company that exceed the limits imposed by the Investment Company Act. Under these limits, except for registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company (unless certain conditions are satisfied), invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate. The portion of our portfolio invested in securities issued by investment companies ordinarily will subject our stockholders to additional indirect expenses. Our investment portfolio is also subject to diversification requirements by virtue of our intended status to be a RIC for U.S. tax purposes. See Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to Our Business and Structure” for more information.
On April 12, 2022, we changed our name from TCG BDC, Inc. to Carlyle Secured Lending, Inc. In connection therewith, we have adopted a policy to invest, under normal circumstances, at least 80% of our total assets (net assets plus borrowings for investment purposes) in secured debt investments or instruments that provide investment exposure to secured debt investments, including through investment vehicles that typically invest at least 80% of their total assets in secured debt investments. This policy may be changed with 60 days’ prior notice to our stockholders. None of our investment policies are fundamental, and thus may be changed without stockholder approval.
In addition, investment companies registered under the Investment Company Act and private funds that are excluded from the definition of “investment company” pursuant to either Section 3(c)(1) or 3(c)(7) of the Investment Company Act may not acquire directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition), unless the funds comply with an exemption under the Investment Company Act. As a result, certain of our investors may hold a smaller position in our shares than if they were not subject to these restrictions.
We are generally not able to issue and sell our common stock at a price below net asset value (“NAV”) per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current NAV of our common stock if our Independent Directors determine that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. In any such case, the price at which our common stock is to be issued and sold may not be less than a price that, in the determination of our Independent Directors, closely approximates the market value of such shares (less any distributing commission or discount). In addition, we may generally issue new shares of our common stock at a price below NAV in rights offerings to existing stockholders, in payment of dividends and in certain
other limited circumstances. Pursuant to approval granted at a special meeting of stockholders held on June 9, 2025, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on June 9, 2026. See Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to Our Business and Structure—Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage” and “—The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.”
We are subject to periodic examination by the SEC for compliance with the Investment Company Act.
As a BDC, we are subject to certain risks and uncertainties. See Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to Our Business and Structure.”
Qualifying Assets
As a BDC, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies and certain public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. Specifically, as part of this 30% basket, we may invest in entities that are not considered “eligible portfolio companies” (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act.
Managerial Assistance to Portfolio Companies
As a BDC, we must offer, and must provide, upon request from our portfolio companies, significant managerial assistance to certain of our portfolio companies. This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. The Investment Adviser may provide all or a portion of this assistance pursuant to the Investment Advisory Agreement, the costs of which will be reimbursed by us. We may receive fees for these services.
Temporary Investments
Pending investment in other types of “qualifying assets,” as described above, our investments may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as “temporary investments,” so that 70% of our assets are qualifying assets. We may also invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price which is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our gross assets constitute repurchase agreements from a single counterparty, we would not meet the diversification tests in order to qualify as a RIC. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. The Investment Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.
Indebtedness and Senior Securities
We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 150% immediately after each such issuance. In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see Part I, Item 1A of this Form 10-K “Risk Factors—Risks Relating to Our Business and Structure—Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of
raising additional capital may expose us to risks, including the typical risks associated with leverage” and “—We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.”
Codes of Ethics
We have adopted a code of ethics pursuant to Rule 17j-1 under the Investment Company Act and the Investment Adviser has adopted a code of ethics pursuant to Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the Advisers Act (collectively, the “Rule 17j-1 Codes of Ethics”), which establish procedures for personal investments and restricts certain transactions and apply to, among others, our Chief Executive Officer and Chief Financial Officer. The Rule 17j-1 Codes of Ethics generally do not permit investments by personnel subject to them in securities that may be purchased or sold by us. The Rule 17j-1 Codes of Ethics are filed with the SEC (www.sec.gov).
We have also adopted a Code of Ethics for Principal Executive and Senior Financial Officers under the Sarbanes-Oxley Act of 2002 (the “SOX Code of Ethics”), which applies to, among others, our Chief Executive Officer and Chief Financial Officer. The SOX Code of Ethics is available free of charge on our website (http://www.carlylesecuredlending.com).
There have been no material changes to the Rule 17j-1 Codes of Ethics or the SOX Code of Ethics or material waivers of the codes that apply to our Chief Executive Officer or Chief Financial Officer.
Compliance Policies and Procedures
We and the Investment Adviser have each adopted and implemented written policies and procedures reasonably designed to detect and prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation. Our Chief Compliance Officer is responsible for administering these policies and procedures.
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. Many of these requirements affect us. For example:
•pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports;
•pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;
•pursuant to Rule 13a-15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting and must obtain an audit of the effectiveness of internal control over financial reporting performed by our independent registered public accounting firm; and
•pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to material weaknesses.
The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.
Proxy Voting Policies and Procedures
We have delegated our proxy voting responsibility to the Investment Adviser. The proxy voting policies and procedures of the Investment Adviser are set forth below. These guidelines are reviewed periodically by the Investment Adviser and our Independent Directors, and, accordingly, are subject to change.
An investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, the Investment Adviser recognizes that it must vote portfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.
These policies and procedures for voting proxies are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.
The Investment Adviser will vote proxies relating to our portfolio securities in what it perceives to be the best interest of our stockholders. The Investment Adviser will review on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us. Although the Investment Adviser will generally vote against proposals that may have a negative impact on our portfolio securities, it may vote for such a proposal if there exist compelling long-term reasons to do so.
The Investment Adviser’s proxy voting decisions will be made by its investment committee. To ensure that the vote is not the product of a conflict of interest, the Investment Adviser will require that: (1) anyone involved in the decision making process discloses to the Investment Committee, and Independent Directors, any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision making process or vote administration are prohibited from revealing how the Investment Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties.
Stockholders may obtain information regarding how we voted proxies by making a written request for proxy voting information to: Carlyle Secured Lending, Inc., c/o Carlyle Global Credit Investment Management L.L.C., One Vanderbilt Avenue, Suite 3400, New York, New York 10017.
Privacy Principles
We endeavor to maintain the privacy of our stockholders and to safeguard their non-public personal information. The following information is provided to help stockholders understand what non-public personal information we collect, how we protect that information and why, in certain cases, we may share that information with select other parties.
We may collect non-public personal information about stockholders from our subscription agreements or other forms, such as name, address, account number and the types and amounts of investments, and information about transactions with us or our affiliates, such as participation in other investment programs, ownership of certain types of accounts or other account data and activity. We may disclose the non-public personal information that we collect from our stockholders or former stockholders, as described above, to our affiliates and service providers and as allowed by applicable law or regulation. Any party that receives this information from us is permitted to use it only for the services required by us and as allowed by applicable law or regulation, and is not permitted to share or use this information for any other purpose. We permit access only by authorized personnel who need access to that non-public personal information to provide services to us and our stockholders. We also maintain physical, electronic and procedural safeguards for non-public personal information that are designed to comply with applicable law.
Compliance with Listing Requirements
Our shares of common stock are trading on the Nasdaq Global Select Market under the symbol “CGBD”. As a listed company on the Nasdaq Global Select Market, we are subject to various listing standards including corporate governance listing standards. We monitor our compliance with all listing standards and take actions necessary to ensure that we are in compliance therewith.
Reporting Obligations and Available Information
We furnish our stockholders with annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we determine to be appropriate or as may be required by law. We are required to comply with all periodic reporting, proxy solicitation and other applicable requirements under the Exchange Act.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Definitive Proxy Statement on Schedule 14A, as well as reports on Forms 3, 4 and 5 regarding directors, officers or 10% beneficial owners of us, filed or furnished pursuant to section 13(a), 15(d) or 16(a) of the Exchange Act, are available free of charge on our website (http://www.carlylesecuredlending.com).
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us, which can be accessed at www.sec.gov.
Our primary competitors in providing financing to middle market companies include public and private funds, other BDCs, commercial and investment banks, CLOs, commercial finance companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our potential competitors are substantially larger and may have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that will not be available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. We cannot assure you that the competitive pressures we will face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.
We expect to use the expertise of the members of the Investment Committee and its investment team to assess investment risks and determine appropriate pricing for our investments. In addition, we expect that extensive direct origination resources, broad product capabilities, ability to commit capital in scale and the depth of expertise of the Investment Adviser’s investment team will enable us to learn about and compete effectively for, financing opportunities with attractive middle market companies in the industries in which we seek to invest. For additional information concerning the competitive risks we face, see Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to Our Investments—We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.”
Staffing
We do not currently have any employees. Our President and Chief Financial Officer, a Partner of Carlyle, our Principal Accounting Officer, a Principal of Carlyle, and our Chief Compliance Officer and Secretary, a Partner of Carlyle, are retained by our Administrator pursuant to the Carlyle Sub-Administration Agreement. Each of these professionals performs their respective functions for us under the terms of our Administration Agreement.
Our day-to-day investment operations are managed by the Investment Adviser. The Investment Adviser has entered into a personnel agreement with Carlyle Employee Co., pursuant to which the Investment Adviser has access to the members of its investment committee, and a team of additional experienced investment professionals who, collectively, comprise the Investment Adviser’s investment team. The Investment Adviser may hire additional investment professionals to provide services to us.
The following is only a summary of the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The following should be read in conjunction with the complete discussion of risk factors we face, which are set forth below under “—Risk Factors”.
Risks Related to Our Business and Structure
•We are currently operating in a period of capital markets disruption and economic uncertainty, and capital markets may experience periods of disruption and instability in the future. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations.
•Inflation has adversely affected and may continue to adversely affect the business, results of operations and financial condition of our portfolio companies.
•Economic recessions or downturns could impair our portfolio companies and harm our operating results.
•We are dependent upon the Investment Adviser for our future success, and there are significant potential conflicts of interest that could impact our investment returns.
•Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively.
•We may need to raise additional capital to grow because we must distribute most of our income.
•Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation.
•Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.
•The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.
•We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.
•We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code.
•If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, certain U.S. stockholders will be treated as having received a dividend from us.
•Provisions of the Maryland General Corporation Law (“MGCL”) and of our Charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
•Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval.
•We are highly dependent on information systems, and systems failures could significantly disrupt our business.
•Cybersecurity risks and cyber incidents may adversely affect our business, results of operations or those of our portfolio companies.
•Use of artificial intelligence technology by us could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal, and regulatory risks in ways that we cannot predict.
•Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies.
•We are subject to certain risks as a result of our direct interest in the 2015-1 Issuer Preferred Interests (as defined below).
•Our investments are risky and speculative, generally illiquid and typically do not have a readily available market price.
•We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.
•Our portfolio companies may be highly leveraged and may incur debt that ranks equally with, or senior to, some of our investments in such companies, and our investment portfolio may be concentrated in a limited number of portfolio companies and industries.
•Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our NAV through increased net unrealized depreciation.
•To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies.
•The financial projections of our portfolio companies could prove inaccurate, and the due diligence investigation that the Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity.
•Our portfolio companies prepay loans from time to time, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields.
•Our ability to enter into transactions with Carlyle and our other affiliates is restricted.
•Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies.
•There are certain risks associated with holding debt obligations that have original issue discount or payment-in-kind interest.
•Tariffs may adversely affect us or our portfolio companies.
Risks Related to an Investment in Our Securities
•Investing in our securities involves a high degree of risk and the market price of our securities may fluctuate significantly.
•Our shares of common stock have traded at a discount to NAV and may do so again.
•Holders of any preferred stock we may issue may have the right to elect members of the board of directors and class voting rights on certain matters.
•Purchases of our common stock under our stock repurchase program, including the Company 10b5-1 Plan (as defined below), may have resulted in the price of our common stock being higher than the price that otherwise might have existed in the open market.
•Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.
•If current economic and market conditions continue to contribute to capital market disruption and instability, there is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to our stockholders may be a return of capital for U.S. federal income tax purposes.
•We cannot assure that an active trading market for the 2030 Notes (as defined below) and 2031 Notes (as defined below) will develop or be maintained.
•We may not be able to repurchase the 2030 Notes or 2031 Notes upon a Change of Control Repurchase Event (as defined below).
•We may choose to redeem the 2030 Notes and 2031 Notes when prevailing interest rates are relatively low.
An investment in the Company involves a high degree of risk. You should carefully consider these risk factors, together with all of the other information included in this report, before you decide whether to make an investment in the Company. There can be no assurance that the Company’s investment objective will be achieved or that an investor will receive a return of its capital. In addition, there will be occasions when the Investment Adviser and its affiliates may encounter potential conflicts of interest in connection with the Company. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. The following considerations, in addition to the considerations set forth elsewhere herein, should be carefully evaluated before making an investment in the Company. If any of the following events occur, our business, financial condition and operating results could be materially and adversely affected. In such case, the NAV and the trading price of our common stock and the trading price, if any, of any other securities that we have issued could decline, and you may lose all or part of your investment.
Risks Related to Our Business and Structure
We are currently operating in a period of capital markets disruption and economic uncertainty, and capital markets may experience periods of disruption and instability in the future. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations.
U.S. capital markets continue to experience disruptions and volatility. Over the last several years, markets have been affected by an elevated interest rate environment as a result of inflation and continued geopolitical tensions (including the Israeli-Palestinian conflict and the ongoing military conflict between Russia and Ukraine). These events, as well as broader political uncertainty related to tariffs and global trade negotiations, geopolitical tensions, dissemination of misinformation and the use of new technologies, such as AI, and the risk of a global health pandemic,have contributed to unpredictable general economic conditions that are materially and adversely impacting the broader financial and credit markets. These and future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows, as well as the businesses of our portfolio companies, and the broader financial and credit markets.
At various times, such disruptions have resulted in, and may in the future result in, a lack of liquidity in parts of the debt capital markets, significant write-offs in the financial services sector and the repricing of credit risk. Such conditions may occur for a prolonged period of time again, and may materially worsen in the future, including as a result of U.S. government shutdowns, or future downgrades to the U.S. government's sovereign credit rating, including as a result of a default or the threat of default on its debt, or the perceived credit worthiness of the U.S. or other large global economies. In addition, the current U.S. political environment and the resulting uncertainties regarding actual and potential shifts in U.S. foreign investment, trade, taxation, economic, environmental and other policies under the current Administration, as well as the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the U.S. and China or in the ongoing conflict between Russia and Ukraine, could lead to disruption, instability and volatility in the global markets. While the current U.S. administration has signaled a reduced emphasis on regulation, past U.S. administrations supported an enhanced regulatory agenda. Changes in regulation can impose greater costs on certain sectors, including financial services, or otherwise impact the competitive environment for obligors, which could adversely impact us. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events have limited and could continue to limit our investment originations, and limit our ability to grow and could have a material negative impact on our operating results, financial condition, results of operations and cash flows and the fair values of our debt and equity investments. Geopolitical events can lead to military or other conflicts or sanctions that could adversely impact obligors who are sanctioned persons, are located in a sanctioned country or a country that is involved in a conflict, or who do business with a sanctioned person or country or with a country that is involved in a conflict. Conversely, changes in enforcement priorities could impact the ability or cost of doing business in particular jurisdictions.
In addition, the U.S. and global capital markets have in the past, and may in the future, experience periods of extreme volatility and disruption during economic downturns and recessions. The impact of downgrades by rating agencies to the U.S. government’s sovereign credit rating or its perceived creditworthiness as well as actual or potential government shutdowns and uncertainty surrounding transfers of power could adversely affect the U.S. and global financial markets and economic conditions. In addition, the fiscal policy of large foreign nations may have a severe impact on the worldwide and U.S. financial markets. Trade wars, tariffs and volatility in the U.S. repo market, the U.S. high yield bond markets, the Chinese stock markets and global markets for commodities may affect other financial markets worldwide. Increases to budget deficits or direct and contingent sovereign debt may create concerns about the ability of certain nations to service their sovereign debt obligations
and any risks resulting from any such debt crisis in Europe, the U.S. or elsewhere could have a detrimental impact on the global economy, sovereign and non-sovereign debt in certain countries and the financial condition of financial institutions generally. Austerity measures that certain countries may agree to as part of any debt crisis or disruptions to major financial trading markets may adversely affect world economic conditions, our business and the businesses of our portfolio companies. We cannot predict the effects of these or similar events in the future on the U.S. and global economies and securities markets or on our investments. We monitor developments in economic, political and market conditions and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so.
The Federal Reserve raised the Federal Funds Rate throughout 2022 and 2023 before it cut the Federal Funds Rate multiple times in 2024 and 2025. The Federal Reserve could again raise the Federal Funds Rate if inflation exceeds certain levels in the United States. These developments, along with the United States government’s credit and deficit concerns, global economic uncertainties and market volatility, have caused and could continue to cause interest rates to be volatile, which may negatively impact our ability to access the capital markets on favorable terms.
Inflation has adversely affected and may continue to adversely affect the business, results of operations and financial condition of our portfolio companies.
Certain of our portfolio companies are in industries that have been impacted by inflation. Recent inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and out portfolio companies’ operations. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results and impact their ability to pay interest and principal on our loans, particularly if interest rates were to continue to rise in response to inflation. In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future realized or unrealized losses and therefore reduce our net assets resulting from operations. Additionally, the Federal Reserve has raised, and could raise again, certain benchmark interest rates in an effort to combat inflation. See “—Changes in interest rates have increased and may in the future increase our cost of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.”
Economic recessions or downturns could impair our portfolio companies and harm our operating results.
Many of the portfolio companies in which we make investments may be susceptible to economic slowdowns or recessions and may be unable to repay the loans we made to them during these periods or pay interest payments. Rising interest rates, inflation and supply chain disruptions heighten these risks. Therefore, our non-performing assets may increase and the value of our portfolio may decrease during these periods as we are required to record our investments at their current fair value. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our and our portfolio companies’ funding costs, limit our and our portfolio companies’ access to the capital markets or result in a decision by lenders not to extend credit to us or our portfolio companies. These events could prevent us from increasing investments and harm our operating results.
Any deterioration of general economic conditions may lead to significant declines in corporate earnings or loan performance, and the ability of corporate borrowers to service their debt, any of which could trigger a period of global economic slowdown, and have an adverse impact on our performance and financial results, and the value and the liquidity of our investments. In an economic downturn, we could have non-performing assets or an increase in non-performing assets, and we would anticipate that the value of our portfolio would decrease during these periods.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we will actually provide significant managerial assistance to that portfolio company, a bankruptcy court might subordinate all or a portion of our claim to that of other creditors.
We are dependent upon the Investment Adviser for our future success.
We do not have any employees. We depend on the diligence, skill, judgment and network of business contacts of the Investment Adviser’s investment professionals and the Carlyle Direct Lending platform to source appropriate investments for us. We depend on members of the Investment Adviser’s investment team to appropriately analyze our investments and the Investment Committee to approve and monitor our middle market portfolio investments. The Investment Committee, together with the other members of its investment team, evaluate, negotiate, structure, close and monitor our investments. Our future success will depend on the continued availability of the members of the Investment Committee and the other investment professionals available to the Investment Adviser. Neither we nor the Investment Adviser has employment agreements with these individuals or other key personnel, and we cannot provide any assurance that unforeseen business, medical, personal or other circumstances would not lead any such individual to terminate his or her relationship with us. The loss of any senior investment professionals to which the Investment Adviser has access, including members of the Investment Committee, or a significant number of the investment professionals of the Investment Adviser, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results of operations. The market for qualified professionals is extremely competitive across levels and areas of expertise, and the Investment Adviser may not be successful in its efforts to recruit, retain and motivate these professionals. In addition, the Investment Adviser has seen increased focus by prospective candidates on hybrid work arrangements and arrangements providing more flexibility, including around location. If the Investment Adviser’s approach to in-office and remote-work arrangements is not perceived as favorable as compared to the arrangements offered by competitors, it may experience an even further increase in competition for talent and it may be difficult to recruit and retain investment professionals. The Investment Adviser has experienced upward pressure on compensation packages given the increased competition to hire and retain talented personnel. Even when the Investment Adviser offers top-of-market compensation packages, it may not be able to attract and retain all of their desired personnel due to shifting workforce priorities.
In addition, we cannot assure you that the Investment Adviser will remain the investment adviser or that we will continue to have access to Carlyle’s investment professionals or its information and deal flow. If, due to extraordinary market conditions or other reasons, we and other funds managed by the Investment Adviser or its affiliates were to incur substantial losses, the revenues of the Investment Adviser and its affiliates may decline substantially. Such losses may hamper the Investment Adviser's and its affiliates' ability to provide the same level of service to us as it would have. Further, there can be no assurance that the Investment Adviser will replicate Carlyle’s historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other Carlyle-managed funds.
There are significant potential conflicts of interest, including the management of other investment funds and accounts by the Investment Adviser, which could impact our investment returns and the holders of our common stock.
Our executive officers and directors, other current and future principals of the Investment Adviser and certain members of the Investment Committee currently serve, and may continue to serve, as officers, directors or principals of other entities and affiliates of the Investment Adviser and funds managed by our affiliates that operate in the same or a related line of business as we do. Currently, our executive officers, as well as the other principals of the Investment Adviser manage other funds affiliated with Carlyle, including other existing and future affiliated BDCs. In addition, the Investment Adviser’s investment team has responsibilities for sourcing and managing investments for certain other investment funds and accounts. Accordingly, they have obligations to investors in those entities, the fulfillment of which may not be in the best interests of, or may be adverse to the interests of, us or our stockholders. Although the professional staff of the Investment Adviser will devote as much time to our management as appropriate to enable the Investment Adviser to perform its duties in accordance with the Investment Advisory Agreement, the investment professionals of the Investment Adviser may have conflicts in allocating their time and services among us, on the one hand, and investment vehicles managed by Carlyle or one or more of its affiliates on the other hand.
The Investment Adviser and its affiliated investment managers may face conflicts in allocating investment opportunities between us and affiliated investment vehicles that have overlapping objectives with ours. For example, certain affiliated investment vehicles may have arrangements that provide for higher management or incentive fees, greater expense reimbursements or overhead allocations, or permit the Investment Adviser and its affiliates to receive transaction fees not permitted under the Investment Company Act, all of which may contribute to this conflict of interest and create an incentive for the Investment Adviser or its affiliated investment managers to favor such other accounts. Furthermore, the Investment Adviser and its affiliated investment managers may form vehicles for the benefit of third-party investors that will be entitled to a portion of the allocation with respect to an investment. Such co-investment rights could result in us being allocated a smaller share of an investment than would otherwise be the case in the absence of such co-investment rights. Although the Investment Adviser will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by
investment funds managed by the Investment Adviser or an investment manager affiliated with the Investment Adviser, including Carlyle.
We and our affiliates own, and may continue to own, investments at different levels of a portfolio company’s capital structure or otherwise own different classes of a portfolio company’s securities, which may give rise to conflicts of interest or perceived conflicts of interest. Conflicts may also arise because portfolio decisions regarding our portfolio may benefit our affiliates. Our affiliates may pursue or enforce rights with respect to one of our portfolio companies, and those activities may have an adverse effect on us.
It is possible that Carlyle or an affiliated investment vehicle will invest in a company that is or becomes a competitor of a portfolio company of ours. Such investment could create a conflict between us, on the one hand, and Carlyle or the affiliated investment vehicle, on the other hand. In such a situation, Carlyle or the Investment Adviser may also have a conflict in the allocation of its own resources to our portfolio company. In addition, certain affiliated investment vehicles will be focused primarily on investing in other funds that may have strategies that overlap and/or directly conflict and compete with us.
As a result of the expansion of Carlyle’s platform into various lines of business in the alternative asset management industry, Carlyle is subject to a number of actual and potential conflicts of interest and subject to greater regulatory oversight than that to which it would otherwise be subject if it had just one line of business. In addition, as Carlyle expands its platform, the allocation of investment opportunities among its investment funds, including us, is expected to become more complex. In addressing these conflicts and regulatory requirements across Carlyle’s various businesses, Carlyle has implemented, and may continue to implement, certain policies and procedures. For example, Carlyle has established an information barrier between Carlyle Global Credit, on the one hand, and the rest of Carlyle, on the other, which generally restricts the communications of Carlyle Global Credit with other Carlyle investment professionals pursuant to the information barrier policy. In addition, we may come into possession of material non-public information with respect to issuers in which we may be considering making an investment. As a consequence, we may be precluded from providing such information or other ideas to other funds affiliated with Carlyle that may benefit from such information or we may be precluded from otherwise consummating a contemplated investment. To the extent we or any other funds affiliated with Carlyle fail to appropriately deal with any such conflicts, it could negatively impact our reputation or Carlyle’s reputation and our ability to raise additional funds and the willingness of counterparties to do business with us or result in potential litigation against us.
In the ordinary course of business, we enter, and may continue to enter, into transactions with affiliates and portfolio companies that may be considered related party transactions. We have implemented certain policies and procedures whereby certain of our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us and other affiliated persons, including the Investment Adviser, stockholders that own more than 5% of us, employees, officers and directors of us and the Investment Adviser and certain persons directly or indirectly controlling, controlled by or under common control with the foregoing persons. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the Investment Company Act or, if such concerns exist, we have taken appropriate actions to seek Board of Directors review and approval or SEC exemptive relief for such transactions.
In the course of our investing activities, we pay management and incentive fees to the Investment Adviser and reimburse the Investment Adviser for certain expenses it incurs in accordance with our Investment Advisory Agreement. The base management fee is based on our gross assets and the incentive fee is paid on income, both of which include leverage. As a result, investors in our common stock invest on a “gross” basis and receive distributions on a “net” basis after expenses, resulting in a lower rate of return than an investor might achieve through direct investments. Because the management fee is based on gross assets, the Investment Adviser benefits to the extent we incur debt or use leverage. Accordingly, there may be times when the senior management team of the Investment Adviser has interests that differ from those of our stockholders, giving rise to a conflict.
In addition, we pay our Administrator, an affiliate of the Investment Adviser, its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including, compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer, Chief Financial Officer and Principal Accounting Officer) and their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff in their role of performing our Sarbanes-Oxley Act internal control assessment. These arrangements create conflicts of interest that our Board of Directors monitors. Despite Carlyle’s good faith judgment to arrive at a fair and reasonable expense allocation methodology, the use of any particular methodology may lead us to bear relatively more expense in certain instances and relatively less in other instances compared to what we would have borne if a different methodology had been used. However, Carlyle seeks to make allocations that are equitable on an overall basis in its good faith judgment.
Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively.
Our ability to achieve our investment objective and to grow depends on our ability to acquire suitable investments and monitor and administer those investments, which depends, in turn, on the Investment Adviser’s ability to identify, invest in and monitor companies that meet our investment criteria.
Accomplishing this result on a cost-effective basis is largely a function of the Investment Adviser’s structuring of the investment process, its ability to provide competent, attentive and efficient services to us and its ability to access financing for us on acceptable terms. The Investment Adviser’s investment team has substantial responsibilities under the Investment Advisory Agreement and in connection with managing us and certain other investment funds and accounts advised by the Investment Adviser or its affiliates, and may also be called upon to provide managerial assistance to our portfolio companies. These demands on their time, which will increase as the number of investments grow, may distract them or slow the rate of investment. In order for us to grow, Carlyle will need to hire, train, supervise, manage and retain new employees. However, we can offer no assurance that any such investment professionals will contribute effectively to the work of the Investment Adviser. Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.
We may need to raise additional capital to grow because we must distribute most of our income.
We may need to raise additional capital to fund growth in our investments, and a reduction in the availability of new capital could limit our ability to grow. If we fail to obtain funds from such sources or from other sources to fund our investments, it could limit our ability to grow, which may have an adverse effect on the value of our securities. We have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. To maintain our status as a RIC, among other requirements, we must distribute on a timely basis at least 90% of our investment company taxable income to our stockholders. As a result, any such cash earnings may not be available to fund investment originations or repay maturing debt.
We expect to issue additional debt and equity securities to fund our growth. We may pursue growth through acquisitions or strategic investments in new businesses. Completion and timing of any such acquisitions or strategic investments may be subject to a number of contingencies and risks. There can be no assurance that the integration of an acquired business will be successful or that an acquired business will prove to be profitable or sustainable.
We have borrowed under the credit facility and through the issuance of debt securities and in the future may borrow under additional debt facilities from financial institutions. As of December 31, 2025, we had issued and outstanding $1,543.7 million aggregate principal amount of indebtedness. In addition, as a BDC, our ability to borrow or issue preferred stock may be restricted if our total assets are less than 150% of our total borrowings and preferred stock. Furthermore, equity capital may be difficult to raise because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price per share less than NAV without first obtaining approval for such issuance from our stockholders and our Independent Directors. Pursuant to approval granted at a special meeting of stockholders held on June 9, 2025, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on June 9, 2026.
Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation.
The Investment Company Act and the Code impose numerous constraints on the operations of BDCs and RICs, respectively, that do not apply to other types of investment vehicles. For example, under the Investment Company Act, we are required as a BDC to invest at least 70% of our total assets in specified types of “qualifying assets,” primarily in private U.S. companies or thinly-traded U.S. public companies, cash, cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. In addition, in order to continue to qualify as a RIC for U.S. federal income tax purposes, we are required to satisfy certain source-of-income, diversification and distribution requirements. These constraints, among others, may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective. See Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC” for additional information.
Furthermore, any failure to comply with the requirements imposed on us as a BDC by the Investment Company Act could cause the SEC to bring an enforcement action against us and/or expose us to claims of private litigants. In addition, upon approval of a majority of our outstanding voting securities as required by the Investment Company Act, we may elect to withdraw our status as a BDC. If we decide to withdraw our election, or if we otherwise fail to qualify, or maintain our qualification, as a BDC, we might be regulated as a closed-end investment company that is required to register under the Investment Company Act, which would subject us to additional regulatory restrictions, significantly decrease our operating flexibility and could significantly increase our cost of doing business. In addition, any such failure could cause an event of default under our outstanding indebtedness, which could have a material adverse effect on our business, financial condition or results of operations.
Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.
We may issue additional debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the Investment Company Act. In addition, we may continue to securitize certain of our loans. Under the provisions of the Investment Company Act, we are permitted, as a BDC, to issue senior securities only in amounts such that our asset coverage ratio, as defined in the Investment Company Act, equals at least 150% of total assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test, which may prohibit us from paying dividends and could prevent us from maintaining our status as a RIC or may prohibit us from repurchasing shares of our common stock. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Accordingly, any failure to satisfy this test could have a material adverse effect on our business, financial condition or results of operations. As of December 31, 2025, our asset coverage calculated in accordance with the Investment Company Act was 175.6%. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders. Furthermore, as a result of issuing senior securities, our common stockholders would also be exposed to typical risks associated with increased leverage, including an increased risk of loss resulting from increased indebtedness.
Any preferred stock that we issue would rank senior to our common stock in our capital structure. Holders of preferred stock may have separate voting rights on certain matters and other rights, preferences, or privileges that are more favorable than those of our common stockholders. The issuance of preferred stock could delay, defer, or prevent a transaction or change of control that might otherwise be in the best interests of our common stockholders or involve a premium price for our common stock.
We are not generally able to issue and sell our common stock at a price below the NAV per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current NAV per share of our common stock if our Independent Directors determine that such sale is in the best interests of us and our stockholders and our stockholders approve such sale. In any such case, the price at which our common stock is to be issued and sold may not be less than a price that, in the determination of our Independent Directors, closely approximates the market value of such shares (less any distributing commission or discount). We are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations. See “—The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.”
If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease, and holders of our common stock might experience dilution.
The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.
Pursuant to approval granted at a special meeting of stockholders held on June 9, 2025, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on June 9, 2026.
Any sale or other issuance of shares of our common stock at a price below NAV per share would result in immediate dilution to our common stock and a reduction of our NAV per share. This dilution would occur as a result of the sale of shares
at a price below the then current NAV per share of our common stock and a proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted.
We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.
As part of our business strategy, we, including through our wholly owned subsidiaries, borrow from and issue senior debt securities to banks, insurance companies and other lenders. Holders of these loans or senior securities would have fixed-dollar claims on our assets that are superior to the claims of our stockholders. If the value of our assets decreases, leverage will cause our NAV to decline more sharply than it otherwise would have without leverage. Similarly, any decrease in our income would cause our net income to decline more sharply than it would have if we had not borrowed. This decline could negatively affect our ability to make dividend payments on our common stock.
Our ability to service our borrowings depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. In addition, our management fees are payable based on our gross assets, including assets acquired through the use of leverage (but excluding cash and any temporary investments in cash-equivalents), which may give the Investment Adviser an incentive to use leverage to make additional investments. See “—We may be obligated to pay the Investment Adviser incentive compensation even if we incur a loss.” The amount of leverage that we employ will depend on the Investment Adviser’s and our Board of Directors’ assessment of market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to continue to obtain credit at all or on terms acceptable to us.
In addition to having fixed-dollar claims on our assets that are superior to the claims of our common stockholders, obligations to lenders may be secured by a first priority security interest in our portfolio of investments and cash. In the case of a liquidation event, those lenders would receive proceeds to the extent of their security interest before any distributions are made to our stockholders under certain circumstances. In addition, as the holder of the preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization (as defined in Note 1, Organization, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K) in exchange for our contribution to the 2015-1 Issuer of the initial closing date loan portfolio (i.e., the subordinated class of the 2015-1 Securitization), we may be required to absorb losses with respect to the 2015-1 Debt Securitization. The 2015-1 Debt Securitization and the related preferred interests have been subsequently refinanced as part of the 2015-1 Debt Securitization Refinancing and 2015-1R Refinancing (each as defined in Note 1, Organization, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K).
Our Credit Facility, the Senior Notes and the 2015-1N Debt (each as defined in Note 1, Organization, or Note 9, Borrowings, as applicable to the consolidated financial statements included in Part II, Item 8 of this Form 10-K) impose financial and operating covenants that restrict our business activities, remedies on default and similar matters. As of December 31, 2025, we were in material compliance with the operating and financial covenants of our Credit Facility, the Senior Notes and the 2015-1N Debt. However, our continued compliance with these covenants depends on many factors, some of which are beyond our control. Accordingly, although we believe we will continue to be in compliance, we cannot assure you that we will continue to comply with the covenants in our Credit Facility, the Senior Notes and the 2015-1N Debt. Failure to comply with these covenants could result in a default. If we were unable to obtain a waiver of a default from the lenders or holders of that indebtedness, as applicable, those lenders or holders could accelerate repayment under that indebtedness, which may result in cross-acceleration of other indebtedness. An acceleration could have a material adverse impact on our business, financial condition and results of operations. Lastly, we may be unable to obtain additional leverage, which would, in turn, affect our return on capital. The number of leverage providers and the total amount of financing available could decrease or remain static. We could, directly or through subsidiaries, have concentrated exposure to a small number of commercial lenders or other financing providers, which could result in us being dependent on the continued availability of capital from such financing providers. Consequently, available financing could be more expensive or on terms that are less desirable than in an environment with a larger number of leverage providers. As a business development company, we generally are required to meet the asset coverage ratio of total assets to total borrowings and other senior securities, which include our borrowings and any preferred stock that we could issue in the future, that is applicable to us under the 1940 Act.
As of December 31, 2025, we had a combined $1,543.7 million of outstanding consolidated indebtedness under our Credit Facility, the Senior Notes and 2015-1N Debt. As of December 31, 2025, our weighted average effective annualized interest rate was 6.02% excluding fees (such as fees on unused amounts and amortization of upfront fees). Since we generally
pay interest at a floating rate on our Credit Facility and 2015-1N Debt and the effective rate of our Senior Notes is floating due to our interest rate swap, an increase in interest rates will generally increase our borrowing costs.
The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns on our portfolio, net of expenses. The calculations in the table below are hypothetical, and actual returns may be higher or lower than those appearing in the table below.
Assumed Return on OurPortfolio(Net of Expenses)
Assumed annual returns on the Company's portfolio (net of expenses)
(10)%
(5)%
0%
5%
10%
Corresponding return to common stockholder(1)
(31.87)%
(19.92)%
(7.96)%
3.99%
15.94%
(1)Assumes, as of December 31, 2025, (i) $2,790.2 million in total assets, (ii) $1,543.7 million in outstanding indebtedness, (iii) $1,167.4 million in net assets and (iv) weighted average effective annual interest rate, excluding fees (such as fees on unused amounts and amortization of financing costs), of 6.02%.
Based on an outstanding indebtedness of $1,543.7 million as of December 31, 2025, and the weighted average effective annual interest rate, excluding fees (such as fees on unused amounts and amortization of financing costs), of 6.02% as of that date, our investment portfolio at fair value would have had to produce an annual return of approximately 3.33% to cover annual interest payments on the outstanding debt. For more information on our indebtedness, see Part II, Item 7 of this Form 10-K “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources.”
Our indebtedness could adversely affect our business, financial conditions or results of operations.
We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our credit facilities or otherwise in an amount sufficient to enable us to repay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before it matures. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets or seeking additional equity. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would not be disadvantageous to our stockholders or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements.
Changes in interest rates have affected, and may in the future affect, our cost of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.
General interest rate fluctuations and changes in credit spreads on floating rate loans may have a substantial negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income and our NAV. Substantially all of our debt investments have variable interest rates that reset periodically based on benchmarks such as the Secured Overnight Financing Rate (“SOFR”) and the U.S. Prime Rate (“Prime Rate” or “P”), so an increase in interest rates from their historically low levels may make it more difficult for our portfolio companies to service their obligations under the debt investments that we hold. Rising interest rates could also cause portfolio companies to shift cash from other productive uses to the payment of interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. To address concerns about inflation, the Federal Reserve increased interest rates throughout 2022 and 2023 before it cut interest rates multiple times in 2024 and 2025. It is a possibility that the Federal Reserve could increase rates in 2026 if inflation levels exceed certain levels in the United States.
Furthermore, because we typically borrow money to make investments, our net investment income depends, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income to the extent we use debt to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income.
In general, rising interest rates will negatively impact the price of a fixed rate debt instrument and falling interest rates will have a positive impact on price. Adjustable rate instruments also react to interest rate changes in a similar manner, although generally to a lesser degree (depending, however, on the characteristics of the reset terms, including the index chosen, frequency of reset and reset caps or floors, among other factors). Interest rate sensitivity is generally more pronounced and less predictable in instruments with uncertain payment or prepayment schedules.
In addition, a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt investments. Accordingly, the increases in interest rates during 2022 and 2023 made it easier for us to meet or exceed the incentive fee hurdle rate in our Investment Advisory Agreement and have resulted in increases in the amount of incentive fees payable to the Investment Adviser with respect to our pre-incentive fee net investment income. Also, an increase in interest rates available to investors could make an investment in our common stock less attractive if we are not able to increase our distribution rate, which could reduce the value of our common stock. We have entered and may continue to enter into certain hedging transactions, such as interest rate swap agreements, to mitigate our exposure to adverse fluctuations in interest rates, and we may do so again in the future. However, we cannot assure you that such transactions will be successful in mitigating our exposure to interest rate risk.
Conversely, in a period of declining interest rates, which has happened more recently, the probability that loans will be prepaid increases as borrowers tend to refinance their debt to reduce their borrowing costs. In such periods, there is a risk that we might not be able to invest in new loans on the same terms, or at all. If we cannot invest in new loans on terms that are the same or better than the investments that are repaid, our operations and financial conditions could be adversely affected. In addition, falling interest rates could lead to loans generating lower returns for the same level of risk. We could therefore need to invest in riskier loans to achieve the same level of returns.
We may experience fluctuations in our quarterly results.
We could experience fluctuations in our quarterly operating results due to a number of factors, including, the pace at which investments are made, the interest rate payable on the debt securities we acquire, the default rate on such securities, rates of repayment, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses and changes in unrealized appreciation or depreciation, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
We may be obligated to pay the Investment Adviser incentive compensation even if we incur a loss.
The Investment Adviser is entitled to incentive compensation for each calendar quarter in an amount equal to a percentage of the excess of our pre-incentive fee net investment income for that quarter (before deducting incentive compensation) above a performance threshold for that quarter. In calculating our performance threshold, we use net assets which results in a lower hurdle rate than if we used gross assets like we do for determining our base management fee. Our pre-incentive fee net investment income for incentive compensation purposes excludes realized and unrealized capital losses and depreciation that we may incur in the calendar quarter, even if such capital losses or depreciation result in a net loss on our statement of operations for that quarter. Thus, we may be required to pay the Investment Adviser incentive compensation for a calendar quarter even if there is a decline in the value of our portfolio or we incur a net loss for that quarter.
Our fee structure may induce the Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.
The incentive fees payable by us to the Investment Adviser may create an incentive for the Investment Adviser to pursue investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The incentive fees payable to the Investment Adviser are calculated based on a percentage of our return on invested capital. This may encourage the Investment Adviser to use leverage to increase the return on our investments. In particular, a portion of the incentive fees payable to the Investment Adviser is calculated based on the Company’s pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, subject to a “hurdle rate” of 1.50% per quarter (6.00% annualized) and a “catch-up rate” of 1.82% per quarter (7.28% annualized). See Note 4, Related Party Transactions, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K. Accordingly, an increase in leverage may make it easier for the Company to meet or exceed the hurdle rate applicable to the income-based incentive fee and may result in an increase in the amount of income-based incentive fee payable to the Investment Adviser.
Under certain circumstances, the use of leverage may increase the likelihood of default, which would impair the value of our securities. In addition, the Investment Adviser receives the incentive fees based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fees based on income, there is no hurdle rate applicable to the portion of the incentive fees based on net capital gains. As a result, the Investment Adviser may have incentive to invest more capital in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.
The “catch-up” portion of the incentive fees may encourage the Investment Adviser to accelerate or defer interest payable by portfolio companies from one calendar quarter to another, potentially resulting in fluctuations in timing and dividend amounts.
Additionally, the incentive fees payable by us to the Investment Adviser may create an incentive for the Investment Adviser to cause us to realize capital gains or losses that may not be in the best interests of us or our stockholders. Under the incentive fee structure, the Investment Adviser benefits when we recognize capital gains and, because the Investment Adviser determines when an investment is sold, the Investment Adviser controls the timing of the recognition of such capital gains. Our Board of Directors is charged with protecting our stockholders’ interests by monitoring how the Investment Adviser addresses these and other conflicts of interest associated with its management services and compensation.
We may invest, to the extent permitted by law, in the securities and instruments of other investment companies, including private funds, and, to the extent we so invest, bear our ratable share of any such investment company’s expenses, including management and performance fees. We also remain obligated to pay management and incentive fees to the Investment Adviser with respect to the assets invested in the securities and instruments of other investment companies. With respect to each of these investments, each of our stockholders bears his or her share of the management and incentive fees of the Investment Adviser as well as indirectly bearing the management and performance fees and other expenses of any investment companies in which we invest.
We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code.
Although we have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code, we cannot assure you that we will be able to maintain RIC status. To maintain RIC status and be relieved of U.S. federal income taxes on income and gains distributed to our stockholders, we must, among other things, have in effect an election to be treated, and continue to qualify, as a BDC under the Investment Company Act at all times during each taxable year and meet the Annual Distribution Requirement, the 90% Gross Income Test and the Diversification Tests (each as defined and explained more fully in Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC.”).
If we fail to maintain our RIC status for any reason, and we do not qualify for certain relief provisions under the Code, we would be subject to corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes) regardless of whether we make any distributions to our stockholders. In this event, the resulting taxes and any resulting penalties could substantially reduce our net assets, the amount of our income available for distribution and the amount of our distributions to our stockholders, which would have a material adverse effect on our financial performance. For additional discussion regarding the tax implications of a RIC, see Part I, Item 1 of this Form 10-K “Business—General—Regulation—Election to be Taxed as a RIC”for additional information.
A portion of our income and fees may not be qualifying income for purposes of the income source requirement.
Some of the income and fees that we may recognize will not satisfy the income source requirement applicable to RICs. In order to ensure that such income and fees do not disqualify us as a RIC for a failure to satisfy such requirement, we may be required to recognize such income and fees indirectly through one or more entities treated as corporations for U.S. federal income tax purposes. Such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce the amount of income available for distribution.
If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, certain U.S. stockholders will be treated as having received a dividend from us in the amount of such U.S. stockholders’ allocable share of the management and incentive fees paid to the Investment Adviser and certain of our other expenses.
We expect to be treated as a “publicly offered regulated investment company” as a result of shares of our common stock being treated as regularly traded on an established securities market. However, we cannot assure you that we will be treated as a publicly offered regulated investment company for all years. If we are not treated as a publicly offered regulated investment company for any calendar year, each U.S. stockholder that is an individual, trust or estate will be treated as having received a dividend from us in the amount of such U.S. stockholder’s allocable share of the management and incentive fees paid to the Investment Adviser and certain of our other expenses for the calendar year, and these fees and expenses will be treated as miscellaneous itemized deductions of such U.S. stockholder. Miscellaneous itemized deductions generally are deductible by a U.S. stockholder that is an individual, trust or estate only to the extent that the aggregate of such U.S. stockholder’s miscellaneous itemized deductions exceeds 2% of such U.S. stockholder’s adjusted gross income for U.S. federal income tax
purposes, are not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under the Code. See Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC” for additional information.
If we fail to maintain the adequacy of our internal controls over financial reporting, we may not be able to accurately report our financial results, which may adversely affect investor confidence in us and, as a result, the value of the securities we issue.
Effective internal controls over financial reporting are necessary for us to provide reliable financial reports. Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, and result in a breach of the covenants under the agreements governing any of our financing arrangements. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Additionally, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports. This could materially adversely affect us and lead to a decline in the price of the securities we issue.
Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our operations, financial reporting or financial results could be harmed and we could fail to meet our financial reporting obligations.
Certain investors are limited in their ability to make significant investments in us.
Private funds that are excluded from the definition of “investment company” either pursuant to Section 3(c)(1) or 3(c)(7) of the Investment Company Act are restricted from acquiring directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition), unless certain conditions are satisfied. Investment companies registered under the Investment Company Act and BDCs are also subject to this restriction as well as other limitations under the Investment Company Act that would restrict the amount that they are able to invest in our securities. As a result, certain investors will be limited in their ability to make significant investments in us at a time that they might desire to do so.
Our Board of Directors is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.
Under the MGCL and our Charter, our Board of Directors is authorized to classify and reclassify any authorized but unissued shares of stock into one or more classes of stock, including preferred stock. Prior to the issuance of shares of each class or series, the Board of Directors is required by Maryland law and our Charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the Board of Directors could authorize the issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. The cost of any such reclassification would be borne by our existing common stockholders. Certain matters under the Investment Company Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. In addition, the Investment Company Act provides that holders of preferred stock are entitled to vote separately from holders of common stock to elect two preferred stock directors. We currently have no plans to issue preferred stock, but may determine to issue preferred stock in the future. The issuance of preferred stock convertible into shares of common stock might also reduce the net income per common share and NAV per share of our common stock upon conversion, provided, that we will only be permitted to issue such convertible preferred stock to the extent we comply with the requirements of Section 61 of the Investment Company Act. In addition, under the Investment Company Act, participating preferred stock and preferred stock constitutes a “senior security” for purposes of the 150% asset coverage test. These effects, among others, could have an adverse effect on an investment in our common stock.
Provisions of the MGCL and of our Charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
The MGCL and our Charter and bylaws contain provisions that may discourage, delay or make more difficult a change in control of us or the removal of our directors. We are subject to the Maryland Business Combination Act (“MBCA”), subject to any applicable requirements of the Investment Company Act. Our Board of Directors has adopted a resolution exempting from the MBCA any business combination between us and any other person, subject to prior approval of such business combination by our Board of Directors, including approval by a majority of our Independent Directors. If the resolution exempting business combinations is repealed or our Board of Directors does not approve a business combination, the MBCA may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer. Our bylaws exempt from the Maryland Control Share Acquisition Act (“Control Share Act”) acquisitions of our stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Act, the Control Share Act also may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such a transaction. However, we will amend our bylaws to be subject to the Control Share Act only if our Board of Directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the Investment Company Act.
We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our Charter classifying our Board of Directors in three classes serving staggered three-year terms, and authorizing our Board of Directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, to amend our Charter without stockholder approval and to increase or decrease the number of shares of stock or the number of shares of stock of any class or series that we have authority to issue. These provisions, as well as other provisions of our Charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.
Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval.
Our Board of Directors has the authority to modify or, if applicable, waive our investment objectives, operating policies and strategies without prior notice (except as required by the Investment Company Act) and without stockholder approval. In addition, none of our investment policies is fundamental and any of them may be changed without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current investment objectives, operating policies or strategies would have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.
We are highly dependent on information systems, and systems failures could significantly disrupt our business.
Our business is highly dependent on the communications and information systems of the Investment Adviser, its affiliates and third parties. Any failure or interruption of those systems or services, including as a result of the termination or suspension of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:
•sudden electrical or telecommunications outages;
•natural disasters such as earthquakes, tornadoes and hurricanes;
•disease pandemics;
•events arising from local or larger scale political or social matters, including terrorist acts; and
•cyber-attacks.
These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our stockholders.
Cybersecurity risks and cyber incidents may adversely affect our business or those of our portfolio companies by causing a disruption to our operations, a compromise or corruption of confidential information and/or damage to business relationships, or those of our portfolio companies, all of which could negatively impact our business, results of operations or financial condition.
Cyber incidents and cyber-attacks have been occurring globally at a more frequent and severe level and are expected to continue to increase in frequency and severity in the future. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to, use, alteration or destruction of our information systems for purposes of misappropriating assets, obtaining ransom payments, stealing confidential information, corrupting data or causing operational disruption, or may involve phishing. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen information, misappropriation of assets, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships. This could result in significant losses, reputational damage, litigation, regulatory investigation, intervention, fines or penalties, or otherwise adversely affect our business, financial condition or results of operations. In addition, we may be required to expend significant additional resources to modify our protective measures and to investigate and remediate vulnerabilities or other exposures arising from operational and security risks. We may face difficulty obtaining or maintaining sufficient insurance coverage, including cyber insurance, against potential liabilities. Insurance and other safeguards may only partially reimburse us for our losses, if at all, and if a claim is successful and exceeds or is not covered by our insurance policies, we would be responsible for any shortfall, which could be substantial. As our and our portfolio companies’ reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by the Investment Adviser and third-party service providers, and the information systems of our portfolio companies. We, the Investment Adviser and its affiliates have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, may be ineffective and do not guarantee that a cyber incident will not occur or that our financial results, operations or confidential information will not be negatively impacted by such an incident.
Third parties with which we do business (including, but not limited to, service providers, such as accountants, custodians, transfer agents and administrators, and the issuers of securities in which we invest) may also be sources or targets of cybersecurity or other technological risks. We outsource certain functions and these relationships allow for the storage and processing of our information and assets, as well as certain investor, counterparty, employee and borrower information. While we engage in actions to reduce our exposure resulting from outsourcing, we cannot control the cybersecurity plans and systems put in place by these third parties and ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with increased costs and other consequences, including those described above. Privacy and information security laws and regulation changes, and compliance with those changes, may also result in cost increases due to system changes and the development of new administrative processes.
Use of artificial intelligence technology by us could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal, and regulatory risks in ways that we cannot predict.
The use of artificial intelligence and machine learning technologies (collectively, “AI Technologies”), and the overall adoption of AI Technologies throughout society, create opportunities for us and our portfolio companies, as well as new and unpredictable competitive, operational, legal, and regulatory risks. We use and plan to expand our use of AI Technologies in connection with our business and investment activities, and our portfolio companies and investments also use such technologies, including but not limited to automation of operational tasks, identification of investment opportunities, investment due diligence, and investment decision-making. We and our portfolio companies continue to evaluate the rapidly evolving landscape of AI Technologies. Actual use of AI Technologies varies across our business, funds and portfolio companies, and investments. While we expect, from time to time, to adopt and adjust usage policies and procedures governing the use of AI Technologies by our personnel, there is a risk of misuse of such AI Technologies, failure of such AI Technologies to be available or to perform, and data leakage on account of use of such AI Technologies, any of which could cause a material harm to us or our portfolio companies. In addition, some of our competitors may be more successful than we are in the development and implementation of new technologies, including services and platforms based on artificial intelligence to address investor demands or improve operations. If we are unable to adequately advance our capabilities in these areas, or do so at a slower pace than others in our industry, we may be at a competitive disadvantage. Similarly, if our portfolio companies are unable to effectively adopt or implement AI Technologies, or lag behind their competitors in doing so, their competitive positions and business prospects may be negatively affected, which could adversely impact the value of our investments.
In addition, AI Technologies are reliant on the collection and analysis of large amounts of data and complex algorithms. In this respect, it is not possible or practicable to incorporate all relevant data into models that AI Technologies
utilize to operate. Therefore, it is expected that the data in such models will contain a degree of inaccuracy and error, potentially to a material degree, and that such data and algorithms could otherwise be inadequate or flawed, which would likely degrade the effectiveness of AI Technologies and could adversely impact us and our portfolio companies and investments to the extent we or they rely on AI Technologies. Our portfolio companies may face heightened exposure to these risks to the extent they do not have sufficient expertise or infrastructure to adequately validate AI-generated outputs or identify inaccuracies in the models they deploy. We expect to be involved in the collection of such data only in the context of limited custom development of tools supporting bespoke AI product developments, but these tools are likely to contain and produce inaccurate information from time to time that will be difficult to identify and mitigate. In this respect, reliance on AI-generated data or analysis that contains “hallucinations” or errors could lead to flawed investment decisions, valuation errors, or regulatory reporting inaccuracies.
The volume and reliance on data and algorithms also make AI Technologies, and in turn us and our portfolio companies and investments, more susceptible to cybersecurity threats, including data poisoning and the compromise of underlying models, training data, or other intellectual property. We and our portfolio companies could be exposed to risks to the extent third-party service providers, or any counterparties use AI Technologies in their business activities. In this respect, we are not able to control the way third-party products are developed or maintained or the way third-party services utilizing AI Technologies are provided to us. In addition, AI Technologies may be competitive with the business of our portfolio companies or increase the potential for obsolescence of a portfolio company’s products or services (particularly as the capabilities of AI Technologies improve) and, accordingly, the increased adoption and use of AI Technologies may have an adverse effect on our portfolio companies or their respective businesses. Portfolio companies that fail to adapt to AI-driven changes in their industries may experience declining revenues, loss of market share, or business model disruption, which would negatively impact the value of our investments in such companies. See Part I, Item 1A of this Form 10-K “Risk Factors—Cybersecurity risks and cyber incidents may adversely affect our business or those of our portfolio companies by causing a disruption to our operations, a compromise or corruption of confidential information and/or damage to business relationships, or those of our portfolio companies, all of which could negatively impact our business, results of operations or financial condition.”
Moreover, use of AI Technologies may include the input of sensitive personal information, trade secrets, and other protected data by both us and third parties and could result in the exposure of such information, for example, by becoming part of a dataset that is generally accessible by AI Technologies applications and users. Data sources such as those we license and those we obtain via our business operations may become unavailable, limiting our ability to establish or maintain AI Technologies. Alternatively, data sources may seek to enjoin our use of data or receive a portion of related revenue, which would result in losses and limit our growth. Our portfolio companies face similar risks with respect to data exposure and availability and may have fewer resources or less sophisticated data protection measures than we do, potentially increasing their vulnerability to such issues. We may use and market our use of AI Technologies in a manner that changes over time due to model error rates, staffing issues, compute limitations, or other developments that make prior marketing of our use of AI Technologies inaccurate, and given the speed of these changes, not inform investors of these changes before they go into effect.
AI Technologies and their current and potential future applications, including in the private investment and financial sectors, continue to rapidly evolve, and our use of AI Technologies may require compliance with legal or regulatory frameworks that are not fully developed or tested and which may subject us to litigation and regulatory actions. For example, the EU enacted the Artificial Intelligence Act, and various other jurisdictions have proposed or finalized laws that create regulatory risk around the use of AI Technologies or threaten to limit or eliminate our ability to use AI Technologies. Compliance costs and operational restrictions imposed by such regulations could be particularly burdensome for our smaller or less-established portfolio companies, potentially limiting their ability to compete effectively or requiring significant capital investments that could affect their financial performance and, consequently, our investment returns. It is impossible to predict the full extent of current or future risks related thereto.
Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies.
We and our portfolio companies are subject to laws and regulations at the U.S. federal, state and local levels and, in some cases, foreign levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws, regulations and interpretations may also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business or the business of our portfolio companies. Changes in regulation or regulatory interpretations could increase the costs and risks to which we are subject. The legal, tax and regulatory environment for BDCs, investment advisers and the instruments that they utilize (including derivative instruments) is continuously evolving. The Investment Adviser is a registered investment adviser and, as such, is subject to the provision of the Advisers Act, the rules adopted thereunder and the SEC or SEC staff interpretations thereof, all of which are subject to change. Unpublished or changing SEC staff interpretations could contradict the advice of our outside counsel, which could expose us and the Investment Adviser to regulatory scrutiny. There can be no assurance that we and our affiliates will avoid regulatory
investigations or enforcement actions. In addition, there is significant uncertainty regarding recently enacted legislation and the regulations that have recently been adopted and future regulations that may or may not be adopted pursuant to such legislation and, consequently, the full impact that such legislation will ultimately have on us and the markets in which we trade and invest is not fully known. Such uncertainty and any resulting confusion may itself be detrimental to the efficient functioning of the markets and the success of certain investment strategies.
In addition, as private equity firms become more influential participants in the U.S. and global financial markets and economy generally, there recently has been pressure for greater governmental scrutiny and/or regulation of the private equity industry. It is uncertain as to what form and in what jurisdictions such enhanced scrutiny and/or regulation, if any, on the private equity industry may ultimately take. Therefore, there can be no assurance as to whether any such scrutiny or initiatives will have an adverse impact on the private equity industry, including our ability to effect operating improvements or restructurings of our portfolio companies or otherwise achieve our objectives.
Over the last several years, there also has been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector will be subject to new regulation. While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could negatively impact our operating results or financial condition, impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business.
Our ability to continue to operate depends on the services provided by the Investment Adviser, Administrator and sub-administrators. Each is able to resign upon 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.
Our ability to continue to operate depends on the services provided by the Investment Adviser, Administrator and sub-administrators. The Investment Adviser, our Administrator, and our sub-administrators each have the right to resign under the Investment Advisory Agreement, the Administration Agreement and the Sub-Administration Agreements, respectively, upon 60 days’ written notice, whether a replacement has been found or not. If any of them resigns, it may be difficult to find a replacement with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If a replacement is not found quickly, our business, results of operations and financial condition as well as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by the Investment Adviser, our Administrator and their affiliates, including certain of our sub-administrators. Even if a comparable service provider or individuals performing such services are retained, whether internal or external, their integration into our business and lack of familiarity with our investment objective may result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition. Moreover, it will be an event of default under the Credit Facility if the Investment Adviser or an affiliate of the Investment Adviser ceases to manage us, which could result in the immediate acceleration of the amounts due under the Credit Facility.
The Investment Adviser’s liability is limited under the Investment Advisory Agreement, and we are required to indemnify the Investment Adviser against certain liabilities, which may lead the Investment Adviser to act in a riskier manner on our behalf than it would when acting for its own account.
The Investment Adviser has not assumed any responsibility to us other than to render the services described in the Investment Advisory Agreement, and it will not be responsible for any action of our Board of Directors in declining to follow the Investment Adviser’s advice or recommendations. Pursuant to the Investment Advisory Agreement, the Investment Adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other person or entities affiliated with it will not be liable to us for their acts under the Investment Advisory Agreement, absent willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. We have agreed to indemnify, defend and protect the Investment Adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other person or entities affiliated with it with respect to all damages, liabilities, costs and expenses arising out of or otherwise based upon the performance of any of the Investment Adviser’s duties or obligations under the Investment Advisory Agreement or otherwise as an Investment Adviser for us, and not arising out of willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties under the Investment Advisory Agreement. These protections may lead the Investment Adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account. See — “Our fee structure may induce the Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.” for additional information.
We are subject to certain risks as a result of our direct interest in the 2015-1 Issuer Preferred Interests.
Because the 2015-1 Issuer is disregarded as an entity separate from its owner for U.S. federal income tax purposes, the sale or contribution by us to the 2015-1 Issuer, as part of the 2015-1 Debt Securitization, 2015-1 Debt Securitization Refinancing (as defined in Part II, Item 7 of this Form 10-K “Portfolio and Investment Activity-Securitizations”) and 2015-1R Refinancing (as defined in Note 1, Organization, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K), did not constitute a taxable event for U.S. federal income tax purposes. If the U.S. Internal Revenue Service were to take a contrary position, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.
The 2015-1 Issuer Preferred Interests are subordinated obligations and therefore we may not receive cash from the 2015-1 Issuer.
The 2015-1 Issuer is the residual claimant on funds, if any, remaining after holders of all classes of the 2015-1N Debt have been paid in full on each payment date or upon maturity of the 2015-1N Debt under the 2015-1R Refinancing documents. The 2015-1 Issuer Preferred Interests represent all of the equity interest in the 2015-1 Issuer and, as the holder of the 2015-1 Issuer Preferred Interests, we may receive distributions, if any, only to the extent that the 2015-1 Issuer makes distributions out of funds remaining after holders of all classes of the 2015-1N Debt have been paid in full on each payment date any amounts due and owing on such payment date or upon maturity of the 2015-1N Debt. There is no guarantee that we will receive any distributions as the holders of the 2015-1 Issuer Preferred Interests.
In addition, if the 2015-1 Issuer does not meet the asset coverage tests or the interest coverage test set forth in the documents governing the 2015-1R Refinancing, cash would be diverted to first pay the 2015-1N Debt in amounts sufficient to cause such tests to be satisfied.
The interests of holders of the 2015-1N Debt issued by the 2015-1 Issuer may not be aligned with our interests.
The 2015-1N Debt ranks senior in right of payment to our interests. As such, there are circumstances in which the interests of holders of the 2015-1N Debt may not be aligned with our interests. For example, under the terms of the 2015-1 Issuer, holders of the 2015-1N Debt have the right to receive payments of principal and interest prior to distribution to our interests.
For as long as the 2015-1N Debt remains outstanding, holders of the 2015-1N Debt have the right to act, in certain circumstances, with respect to the portfolio loans in ways that may benefit their interests but not the interests of holders of the 2015-1 Issuer Preferred Interests, including by exercising remedies under the indenture governing the 2015-1N Debt (the “2015-1 Indenture”).
If an event of default has occurred and acceleration occurs in accordance with the terms of the 2015-1 Indenture, the 2015-1N Debt then outstanding will be paid in full before any further payment or distribution to the 2015-1 Issuer Preferred Interests. In addition, if an event of default occurs, holders of a majority of the 2015-1N Debt then outstanding will be entitled to determine the remedies to be exercised under the 2015-1 Indenture, subject to the terms of the 2015-1 Indenture. For example, upon the occurrence of an event of default with respect to the notes issued by the 2015-1 Issuer, the trustee or holders of a majority of the 2015-1N Debt then outstanding may declare the principal, together with any accrued interest, of all the 2015-1N Debt to be immediately due and payable. This would have the effect of accelerating the principal on such notes, triggering a repayment obligation on the part of the 2015-1 Issuer. If at such time the portfolio loans of the 2015-1 Issuer were not performing well, the 2015-1 Issuer may not have sufficient proceeds available to enable the trustee under the 2015-1 Indenture to pay a distribution to holders of the 2015-1 Issuer Preferred Interests.
Remedies pursued by the holders of the 2015-1N Debt could be adverse to the interests of the holders of the 2015-1 Issuer Preferred Interests, and the holders of the 2015-1N Debt have no obligation to consider any possible adverse effect on such other interests. Thus, any remedies pursued by the holders of the 2015-1N Debt may not be in our best interests and we may not receive payments or distributions upon an acceleration of the 2015-1N Debt. Any failure of the 2015-1 Issuer to make distributions on the 2015-1 Issuer Preferred Interests we hold, directly or indirectly, whether as a result of an event of default or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows and may result in an inability of us to make distributions sufficient to allow for us to qualify as a RIC for U.S. federal income tax purposes.
The 2015-1 Issuer may fail to meet certain asset coverage tests.
Under the documents governing the 2015-1R Refinancing, there are two coverage tests applicable to the 2015-1N Debt.
The first such test compares the amount of interest received on the portfolio loans held by the 2015-1 Issuer to the amount of interest payable in respect of the 2015-1N Debt. To meet this first test, interest received on the portfolio loans must equal at least 110% of the interest payable in respect of the 2015-1N Debt issued by the 2015-1 Issuer.
The second such test compares the adjusted collateral principal amount of the portfolio loans of the 2015-1R Refinancing to the aggregate outstanding principal amount of the 2015-1N Debt. To meet this second test at any time, the adjusted collateral principal amount of the portfolio loans must equal at least 116.0% of the outstanding principal amount of the 2015-1N Debt.
If any coverage test with respect to the 2015-1N Debt is not met, proceeds from the portfolio of loans that otherwise would have been distributed to the holders of the 2015-1 Issuer Preferred Interests will instead be used to redeem first the 2015-1N Debt, to the extent necessary to satisfy the applicable asset coverage tests on a pro forma basis after giving effect to all payments made in respect of the 2015-1N Debt, which we refer to as a mandatory redemption, or to obtain the necessary ratings confirmation. There is no guarantee that the 2015-1N Debt will meet either of these coverage tests, and thus, we may not receive distributions as the holders of the 2015-1 Issuer Preferred Interests. Even if we do not receive cash directly from the 2015-1 Issuer, such amount will still be treated as income subject to our requirement to distribute 90% of our net investment income to our stockholders. Therefore, in the event that we fail to receive cash directly from the 2015-1 Issuer, we could be unable to make such distributions in amounts sufficient to maintain our status as a RIC for U.S. federal income tax purposes, or at all.
We may be required to assume liabilities of the 2015-1 Issuer and are indirectly liable for certain representations and warranties in connection with the 2015-1R Refinancing.
Pursuant to the contribution agreement we entered into with the 2015-1 Issuer, we are required to repurchase any loan (or participation interest therein) which was sold to the 2015-1 Issuer in breach of any representation or warranty made by us with respect to such loan on the date such loan was sold. To the extent we fail to satisfy any such repurchase obligation, the trustee of the 2015-1R Refinancing may, on behalf of the 2015-1 Issuer, bring an action against us to enforce these repurchase obligations.
The structure of the 2015-1R Refinancing is intended to prevent, in the event of our bankruptcy, the consolidation of the 2015-1 Issuer with our operations. If the true sale of the assets in the 2015-1R Refinancing were not respected in the event of our insolvency, a trustee or debtor-in-possession might reclaim the assets of the 2015-1 Issuer for our estate. However, in doing so, we would become directly liable for all of the indebtedness then outstanding under the 2015-1R Refinancing, which would equal the full amount of debt of the 2015-1 Issuer reflected on our consolidated balance sheet.
In addition, in connection with 2015-1R Refinancing, the Company has made customary representations, warranties and covenants to the 2015-1 Issuer. We remain liable for any breach of such representations for the life of the 2015-1R Refinancing.
Risks Related to Our Investments
Our investments are risky and speculative.
We invest primarily in loans to middle market companies whose debt, if rated, is rated below investment grade and, if not rated, would likely be rated below investment grade if it were rated. Investments rated below investment grade are generally considered higher risk than investment grade instruments. Bonds that are rated below investment grade are sometimes referred to as “high yield bonds” or “junk bonds.” Exposure to below investment grade instruments involves certain risks, including speculation with respect to the borrower’s capacity to pay interest and repay principal. In our first lien loans, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies. To the extent we hold second lien senior secured loans and junior debt investments, holders of first lien loans may be repaid before us in the event of a bankruptcy or other insolvency proceeding. This may result in an above average amount of risk and loss of principal. Unitranche loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a heightened risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. When we invest
in loans, we have acquired and may in the future acquire equity securities as well. However, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.
Some of the loans in which we may invest may be “covenant-lite” loans, which means the loans contain fewer covenants than other loans (in some cases, none) and may not include terms that could be considered protective to the lender, such as maintenance or financial covenants and terms that allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached. An investment by us in a covenant-lite loan may potentially expose us to greater liquidity risks compared to loans that contain financial maintenance requirements and other covenants, hinder the ability to reprice credit risk associated with the issuer and reduce the ability to restructure a problematic loan and mitigate potential loss. We may also experience delays in enforcing our rights under covenant-lite loans. In the event of default, covenant-lite loans could result in diminished recovery values where the lender did not have the opportunity to negotiate with the borrower or restructure the loan prior to default. As a result of these risks, our exposure to losses may be increased, which could result in an adverse impact on our net income and net asset value.
In addition, investing in middle market companies involves a number of significant risks, including:
•these companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing on any guarantees or security we may have obtained in connection with our investment;
•they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;
•they are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on us;
•there is generally little public information about these companies. These companies and their financial information are usually not subject to the Exchange Act and other regulations that govern public companies, and we may be unable to uncover all material information about these companies, which may prevent us from making a fully informed investment decision and cause us to lose money on our investments;
•they generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers, directors and the Investment Adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in the portfolio companies;
•changes in laws and regulations, as well as their interpretations, may adversely affect their business, financial structure or prospects; and
•they may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.
Our portfolio securities are generally illiquid and typically do not have a readily available market price and, in such a case, we will value these securities at fair value as determined in good faith under procedures adopted by our Board of Directors or its designee, which valuation is inherently subjective and may not reflect what we may actually realize from the sale of the investment.
Substantially all of our portfolio investments are in the form of debt investments that are not publicly traded and are illiquid compared to publicly traded securities, and there can be no assurance that we will be able to realize returns on such investments in a timely manner. The fair value of these illiquid portfolio securities is not readily determinable, and the due diligence process that the Investment Adviser undertakes in connection with our investments may not reveal all the facts that may be relevant in connection with such investment. The Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of our investment portfolio for which market quotations are not readily available. The Investment Adviser values these investments on at least a quarterly basis in accordance with our valuation policy, which is at all times consistent with accounting principles generally accepted in the United States (“U.S. GAAP”). The Investment Adviser utilizes the services of a third-party valuation firm to aid it in reviewing the determinations of the Investment Adviser’s investment professionals, which are based upon the most recent portfolio company
financial statements available and projected financial results of each portfolio company. The participation of the Investment Adviser in our valuation process, and the indirect pecuniary interest in the Investment Adviser by the Interested Directors on our Board of Directors, could result in a conflict of interest, because the management fee is based on our gross assets and also because the Investment Adviser is receiving performance-based incentive fees.
The factors that are considered in the fair value pricing of our investments include the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in which the portfolio company does business, comparisons to publicly traded companies, discounted cash flow, relevant credit market indices, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate our valuation. Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, the Investment Adviser’s determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Also, since these valuations are, to a large extent, based on estimates, comparisons and qualitative evaluations of private information, it could make it more difficult for investors to value accurately our investments and could lead to undervaluation or overvaluation of our securities. In addition, the valuation of these types of securities may result in substantial write-downs and earnings volatility. If the Investment Adviser is unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Also, privately held companies frequently have less diverse product lines and smaller market presence than larger competitors.
Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. The effect of all of these factors on our portfolio can reduce our NAV by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer unrealized losses, which could have a material adverse impact on our business, financial condition and results of operations.
Our NAV as of a particular date may be materially greater than or less than the value that would be realized if our assets were to be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of our assets on a particular date, the actual price that we would realize upon the disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in our NAV. Volatile market conditions could also cause reduced liquidity in the market for certain assets, which could result in liquidation values that are materially less than the values of such assets as reflected in our NAV.
We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.
The activity of identifying, completing and realizing attractive investments is highly competitive and involves a high degree of uncertainty. The availability of investment opportunities generally will be subject to market conditions. In particular, in light of changes in such conditions, including changes in long-term interest rates, certain types of investments may not be available to us on terms that are as attractive as the terms on which opportunities were available to previous investment programs sponsored by Carlyle. A number of entities, including BDCs managed by the Investment Adviser or an affiliate, compete with us to make the types of investments that we target in middle market companies. We compete with other BDCs, public and private funds, commercial and investment banks, commercial finance companies, and, to the extent they provide an alternative form of financing, private equity funds, some of which are affiliates of us. Furthermore, over the past several years, an ever-increasing number of debt and credit opportunities funds have been formed and many such existing funds have grown substantially in size. Additional funds with similar objectives may be formed in the future by Carlyle or by other unrelated parties. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. Consequently, it is possible that competition for appropriate investment opportunities may increase, thus reducing the number of investment opportunities available to us and adversely affecting the terms upon which investments can be made. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. The competitive pressures we face may have a material adverse effect on our business, financial condition and results of operations. As a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and, accordingly, we may incur legal, due diligence and other costs on investments which may not be successful and we may not recover all of our costs, which would adversely affect returns. We can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.
We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors may make loans with interest rates that are comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss.
Some of our portfolio companies are highly leveraged, which may have adverse consequences to these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used. Moreover, rising interest rates may significantly increase a company's or project's interest expense, or a significant industry downturn may affect a company's ability to generate positive cash flow, in either case causing an inability of a leveraged company to service outstanding debt. In the event such leveraged company cannot generate adequate cash flow to meet debt obligations, the company may default on its loan agreements or be forced into bankruptcy resulting in a restructuring or liquidation of the company. Leveraged companies may enter into bankruptcy proceedings at higher rates than companies that are not leveraged.
Depending on the facts and circumstances of our investments and the extent of our involvement in the management of a portfolio company, upon the bankruptcy of a portfolio company, a bankruptcy court may recharacterize our debt investments as equity interests and subordinate all or a portion of our claim to that of other creditors. This could occur even though we may have structured our investment as senior debt.
Our portfolio companies may incur debt that ranks equally with, or senior to, some of our investments in such companies and if there is a default, we may experience a loss on our investment.
To the extent we invest in second lien, mezzanine or other instruments, our portfolio companies typically may be permitted to incur other debt that ranks equally with, or senior to, such debt instruments. By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest or principal on or before the dates on which we will be entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. In such cases, after repaying such senior creditors, such portfolio company may not have sufficient remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.
The rights we may have with respect to the collateral securing the debt investments we make in our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.
We may also make unsecured loans to portfolio companies. Liens on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.
Our portfolio may be concentrated in a limited number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.
We are classified as a non-diversified investment company within the meaning of the Investment Company Act, which means that we are not limited by the Investment Company Act with respect to the proportion of our assets that we may invest in
securities of a single issuer, excluding limitations on investments in other investment companies. Although we do not intend to focus our investments in any specific industries, our portfolio may be concentrated in a limited number of portfolio companies and industries. Beyond the asset diversification requirements associated with our qualification as a RIC under Subchapter M of the Code and under the Credit Facility, Senior Notes and 2015-1N Debt, we do not have fixed guidelines for diversification, and while we do not target any specific industries, our investments may be concentrated in relatively few industries. As a result, the aggregate returns we will realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write down the value of one or more investments. Additionally, a downturn in any particular industry in which we are invested could also significantly impact our aggregate returns.
Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our NAV through increased net unrealized depreciation.
As a BDC, we are required to account for our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by or under the direction of our Board of Directors, which has appointed the Investment Adviser as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. Depending on market conditions, we could incur substantial realized losses and suffer additional unrealized losses, which would reduce our NAV and have a material adverse impact on our business, financial condition and results of operations.
To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies.
We have in the past and may in the future make investments in restructurings that involve, or otherwise invest in the debt securities of, companies that are experiencing or are expected to experience severe financial difficulties. These severe financial difficulties may never be overcome and may cause such companies to become subject to bankruptcy proceedings. As such, these investments could subject us to certain additional potential liabilities that may exceed the value of our original investment therein. The level of analytical sophistication, both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties is unusually high.
The financial projections of our portfolio companies could prove inaccurate.
We generally evaluate the capital structure of portfolio companies on the basis of financial projections prepared by the management of such portfolio companies. These projected operating results are normally based primarily on judgments of the management of the portfolio companies. In all cases, projections are only estimates of future results that are based upon assumptions made at the time that the projections are developed. General economic conditions, which are not predictable with accuracy, along with other factors may cause actual performance to fall short of the financial projections that were used to establish a given portfolio company’s capital structure. Because of the leverage that is typically employed by our portfolio companies, this could cause a substantial decrease in the value of our investment in the portfolio company. The inaccuracy of financial projections could thus cause our performance to fall short of our expectations.
In addition, when sourcing debt investments, we expect to rely significantly upon representations made to us by the borrower. There can be no assurance that such representations are accurate or complete, or that any due diligence undertaken would identify any misrepresentation or omission. Such inaccuracy or incompleteness could adversely affect, among other things, the valuation of collateral underlying loans or other debt obligations, our ability to perfect or effectuate a lien on the collateral securing a loan or other debt obligation, the financial condition of the issuer or the business prospects of the issuer. We will rely upon the accuracy and completeness of representations made by the underlying obligors or issuers to the extent reasonable.
The due diligence investigation that the Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity.
Before we make investments, the Investment Adviser will typically conduct due diligence that it deems reasonable and appropriate based on the facts and circumstances applicable to each investment. Due diligence may entail evaluation of important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants, credit rating agencies, investment banks and other third parties may be involved in the due diligence process to varying degrees depending on the type of investment. When conducting due diligence and making an assessment regarding an investment, the Investment Adviser will rely on the resources available to it, including information provided by the portfolio companies and, in some circumstances, third-party investigations. In addition, investment analyses and decisions by the Investment Adviser may be required to be undertaken on an expedited basis to take advantage of certain investment
opportunities. In such cases, the information available to the Investment Adviser at the time of making an investment decision may be limited. The due diligence investigation that the Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Moreover, the due diligence investigation does not ensure that such investment will be successful. In addition, Carlyle's Environmental, Social and Governance program may cause us not to make an investment we otherwise would have made or impact other action taken or refrained from.
Our portfolio companies prepay loans from time to time, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields.
Loans are generally prepayable at any time, most of them at no premium to par. We are generally unable to predict the rate and frequency of such repayments. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such portfolio company the ability to replace existing financing with less expensive capital. In periods of falling interest rates, the risk of prepayment of floating rate loans may increase if other financing sources are available. As market conditions change frequently, we will often be unable to predict when, and if, this may be possible for each of our portfolio companies. In the case of some of these loans, having the loan called early may have the effect of reducing our actual investment income below our expected investment income if the capital returned cannot be invested in transactions with equal or greater yields.
We invest through joint ventures, partnerships or other special purpose vehicles and our investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly.
We make indirect investments in portfolio companies through joint ventures, partnerships or other special purpose vehicles (“Investment Vehicles”) including Credit Fund and Structured Credit Partners. In general, the risks associated with indirect investments in portfolio companies through an Investment Vehicle are similar to those associated with a direct investment in a portfolio company. While we intend to analyze the credit and business of a potential portfolio company in determining whether to make an investment through an Investment Vehicle, we will nonetheless be exposed to the creditworthiness of the Investment Vehicle. In the event of a bankruptcy proceeding against the portfolio company, the assets of the portfolio company would typically be used to satisfy its obligations prior to the satisfaction of our investment in the Investment Vehicle (i.e., our investment in the Investment Vehicle would be structurally subordinated to the obligations of the portfolio company). In addition, if we are to invest in an Investment Vehicle, we may be required to rely on our partners in the Investment Vehicle when making decisions regarding such Investment Vehicle’s investments, accordingly, the value of the investment could be adversely affected if our interests diverge from those of our partners in the Investment Vehicle.
Our ability to enter into transactions with Carlyle and our other affiliates is restricted.
As a BDC, we are required to comply with certain regulatory requirements. We and any company controlled by us, on the one hand, and our upstream affiliates, or the Investment Adviser and its affiliates, on the other hand, are prohibited under the Investment Company Act from knowingly participating in certain transactions without the prior approval of our Independent Directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities is our upstream affiliate for purposes of the Investment Company Act, and we or a company controlled by us are generally prohibited from buying or selling any security (other than our securities) from or to such affiliate, absent the prior approval of our Independent Directors and so long as such person does not own more than 25% of our outstanding voting securities or otherwise control us. We or a company controlled by us are prohibited from buying or selling any security from or to the Investment Adviser or its affiliates, or any person who owns more than 25% of our voting securities or is otherwise deemed to control, be controlled by, or be under common control with, us, with such persons, absent the prior approval of the SEC.
The Investment Company Act also prohibits certain “joint” transactions with our upstream affiliates, or the Investment Adviser or its affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our Independent Directors and, in some cases, the SEC (other than in certain limited situations pursuant to current regulatory guidance as described below). The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts and circumstances then existing. The SEC has granted us Exemptive Relief that permits us and certain present and future funds advised by the Investment Adviser and certain other present and future investment advisers controlling, controlled by or under common control with the Investment Adviser to co-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. In addition to co-investing pursuant to our Exemptive Relief, we may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, the
Investment Adviser’s allocation procedures and Carlyle’s other allocation policies and procedures, where applicable. For example, we may invest alongside such investors consistent with guidance promulgated by the SEC staff permitting us and an affiliated person to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that we negotiate no term other than price. We may, in certain cases, also make investments in securities owned by affiliates that we acquire from non-affiliates. In such circumstances, our ability to participate in any restructuring of such investment or other transaction involving the issuer of such investment may be limited, and as a result, we may realize a loss on such investments that might have been prevented or reduced had we not been restricted in participating in such restructuring or other transaction.
Our failure to make follow-on investments in our portfolio companies could impair the value of our investments.
Following an initial investment in a portfolio company, we have made, and may continue to make, additional investments in that portfolio company as “follow-on” investments to:
•increase or maintain in whole or in part our equity ownership percentage;
•exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
•attempt to preserve or enhance the value of our investment.
We may elect not to make follow-on investments, may be constrained in our ability to employ available funds, or otherwise may lack sufficient funds to make those investments. We have the discretion to make any follow-on investments, subject to the availability of capital resources. However, doing so could be placing even more capital at risk in existing portfolio companies.
The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful investment. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other opportunities or because we are inhibited by compliance with BDC requirements or the desire to maintain our tax status.
The disposition of our investments may result in contingent liabilities.
A significant portion of our investments involve private securities. In connection with the disposition of an investment in private securities, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that any such representations turn out to be inaccurate or with respect to potential liabilities. These arrangements may result in contingent liabilities that ultimately result in funding obligations that we must satisfy through our return of distributions previously made to us.
Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.
Although we may do so in the future, currently we do not intend to hold controlling equity positions in our portfolio companies. Accordingly, we may not be able to control decisions relating to a minority equity investment, including decisions relating to the management and operation of the portfolio company and the timing and nature of any exit. As a result, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity of the investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company and may therefore suffer a decrease in the value of our investments. If any of the foregoing were to occur, our financial condition, results of operations and cash flow could suffer as a result.
Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.
Our investment strategy contemplates that a portion of our investments may be in securities of foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs,
less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. These risks are likely to be more pronounced for investments in companies located in emerging markets and particularly for middle-market companies in these economies.
Although most of our investments are denominated in U.S. dollars, our investments that are denominated in a foreign currency are subject to the risk that the value of a particular currency may change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments. We have and may in the future employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk or that, if we do, such strategies will be effective.
We may expose ourselves to risks if we engage in hedging transactions.
We have and may in the future enter into hedging transactions, which may expose ourselves to risks associated with such transactions. We may utilize instruments such as forward contracts, credit default swaps, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates, credit risk premiums, and market interest rates.
Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. It may not be possible to hedge against an exchange rate or interest rate fluctuation at an acceptable price.
The success of our hedging transactions will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the effect of the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations. Income derived from hedging transactions is generally not eligible to be distributed to non-U.S. stockholders free from U.S. withholding tax. We may be unable or determine not to hedge against particular risks, including if we determine that available hedging transactions are not available at an appropriate price.
In August 2022, Rule 18f-4 under the Investment Company Act, regarding the ability of a BDC (or a registered investment company) to use derivatives and other transactions that create future payment or delivery obligations (except reverse repurchase agreements and similar financing transactions), became effective. Under the rule, BDCs that make significant use of derivatives are required to operate subject to a value-at-risk leverage limit, adopt a derivatives risk management program and appoint a derivatives risk manager, and comply with various testing and board reporting requirements. These requirements apply unless the BDC qualifies as a “limited derivatives user,” as defined in the rule. Under an exemption in the rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due. We currently operate as a “limited derivatives user” which may limit our ability to use derivatives and/or enter into certain other financial contracts.
There are certain risks associated with holding debt obligations that have original issue discount or payment-in-kind interest.
Original issue discount (“OID”) may arise if we hold securities issued at a discount or in certain other circumstances. OID and payment-in-kind (“PIK”) interest create the risk that incentive fees will be paid to the Investment Adviser based on non-cash accruals that ultimately may not be realized, while the Investment Adviser will be under no obligation to reimburse us for these fees. We hold investments that result in OID interest and PIK interest.
The higher interest rates of OID instruments reflect the payment deferral and increased credit risk associated with these instruments, and OID instruments generally represent a significantly higher credit risk than coupon loans. Even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation.
OID instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. OID income may also create uncertainty about the source of our cash dividends.
For accounting purposes, any cash dividends to stockholders representing OID income are not treated as coming from paid-in capital, even if the cash to pay them comes from the proceeds of issuances of our common stock. As a result, despite the fact that a dividend representing OID income could be paid out of amounts invested by our stockholders, the Investment Company Act does not require that stockholders be given notice of this fact by reporting it as a return of capital.
PIK interest has the effect of generating investment income at a compounding rate, thereby further increasing the incentive fees payable to the Investment Adviser. Similarly, all things being equal, the deferral associated with PIK interest also increases the loan-to-value ratio at a compounding rate.
Our investments may be affected by force majeure events.
Our investments may be affected by force majeure events (e.g. events beyond the control of the party claiming that the event has occurred, including, without limitation, acts of God, fire, flood, earthquakes, outbreaks of infectious disease, pandemic or any other serious public health concern, war, trade war, cyber security breaches, terrorism and labor strikes). Some force majeure events may adversely affect the ability of a party (including a portfolio company or a counterparty to us or a portfolio company) to perform its obligations until it is able to remedy the force majeure event. In addition, the cost to a portfolio company or us of repairing or replacing damaged assets resulting from such force majeure event could be considerable. Certain force majeure events (such as war or an outbreak of an infectious disease) could have a broader negative impact on the world economy and international business activity generally, or in any of the countries in which we may invest specifically.
Tariffs may adversely affect us or our portfolio companies.
In recent years, the U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made proposals and taken actions related thereto. For example, the U.S. government has imposed, and may in the future further increase, tariffs on certain foreign goods, including from China, such as steel and aluminum. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods. Most recently, the current U.S. presidential administration has imposed or sought to impose significant increases to tariffs on goods imported into the U.S., including from China, Canada and Mexico. Tariffs on imported goods could further increase costs, decrease margins, reduce the competitiveness of products and services offered by current and future portfolio companies and adversely affect the revenues and profitability of portfolio companies whose businesses rely on goods imported from such impacted jurisdictions. There is uncertainty as to further actions that may be taken under the current U.S. presidential administration with respect to U.S. trade policy. Further governmental actions related to the imposition of tariffs or other trade barriers, or changes to international trade agreements or policies, could further increase costs, decrease margins, reduce the competitiveness of products and services offered by current and future portfolio companies and adversely affect the revenues and profitability of companies whose businesses rely on goods imported from outside of the United States. We cannot predict whether, or to what extent, any tariff or other trade protections may affect us or our portfolio companies.
Risks Related to an Investment in Our Securities
Investing in our securities involves a high degree of risk.
The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive, and therefore an investment in our securities may not be suitable for someone with lower risk tolerance.
The market price of our securities may fluctuate significantly.
The market price and liquidity of the market for our common stock and any other securities that we may issue may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:
•changes or perceived changes in the value of our portfolio investments as a result of changes in market factors, such as interest rate shifts, and also portfolio specific performance, such as portfolio company defaults, among other reasons;
•significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which are not necessarily related to the operating performance of these companies;
•price and volume fluctuations in the overall stock market from time to time;
•the inclusion or exclusion of our securities from certain indices;
•changes in law, regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;
•any loss of RIC status;
•changes in our earnings or perceived changes or variations in our operating results;
•changes in accounting guidelines governing valuation of our investments;
•any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;
•the inability of the Investment Adviser to employ additional experienced investment professionals or the departure of any of the Investment Adviser’s key personnel;
•short-selling pressure with respect to shares of our common stock or BDCs generally;
•future sales of our securities convertible into or exchangeable or exercisable for our common stock or the conversion of such securities;
•uncertainty surrounding the strength of the U.S. economy and where the debt market is in the credit cycle;
•uncertainty between the U.S. and other countries with respect to trade policies, treaties, and tariffs;
•the occurrence of one or more natural disasters, pandemic outbreaks or other health crises;
•fluctuations in base interest rates, such as SOFR, EURIBOR, the Federal Funds Rate or the Prime Rate;
•operating performance of companies comparable to us;
•general economic trends and other external factors, including the current interest rate environment and geopolitical tensions; and
•loss of a major funding source.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price fluctuates significantly, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
Our shares of common stock have traded at a discount to NAV and may do so again, which could limit our ability to raise additional equity capital.
We cannot assure you that a trading market for our common stock can be sustained. In addition, we cannot predict the prices at which our common stock will trade. Shares of closed-end investment companies, including BDCs, frequently trade at a discount to NAV and our common stock may also be discounted in the market. This characteristic of closed-end investment companies is separate and distinct from the risk that our NAV per share may decline. We cannot predict whether our common stock will trade at, above or below NAV. The risk of loss associated with this characteristic of closed-end management investment companies may be greater for investors expecting to sell shares of common stock purchased in the offering soon after an offering. See “Risk Factors—Risks Related to Our Business and Structure—We are currently operating in a period of capital markets disruption and economic uncertainty, and capital markets may experience periods of disruption and instability
in the future. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations.”
In addition, when our common stock is trading below its NAV, we will generally not be able to sell additional shares of our common stock to the public at its market price without, among other things, first obtaining the requisite approval of our stockholders. Pursuant to approval granted at a special meeting of stockholders held on June 9, 2025, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current net asset value per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on June 9, 2026.
Holders of any preferred stock we may issue may have the right to elect members of the board of directors and class voting rights on certain matters.
In May 2020, we issued 2,000,000 shares of preferred stock in a private placement to an affiliate of Carlyle, which ranked senior to our common stock with respect to dividends and liquidation and provided certain conversion and economic rights (the “Preferred Stock”). The Preferred Stock was exchanged for shares of common stock in connection with the completion of the CSL III Merger, and no preferred stock remains outstanding. We may, however, determine to issue preferred stock in the future, and any such issuance could adversely affect the market value of our common stock by subordinating common stockholders’ rights to dividends and distributions, creating differing interests between preferred and common stockholders, and constituting a “senior security” for purposes of the Investment Company Act asset coverage requirements.
Holders of any preferred stock we might issue, voting separately as a single class, would have the right to elect two members of the board of directors at all times and, in the event dividends become two full years in arrears, would have the right to elect a majority of the directors until such arrearage is completely eliminated. In addition, preferred stockholders have class voting rights on certain matters, including changes in fundamental investment restrictions and conversion to open-end status, and accordingly can veto any such changes. Restrictions imposed on the declarations and payment of dividends or other distributions to the holders of our common stock and preferred stock, both by the Investment Company Act and by requirements imposed by rating agencies or the terms of our credit facilities, might impair our ability to maintain our qualification as a RIC for federal income tax purposes. While we would intend to redeem our preferred stock to the extent necessary to enable us to distribute our income as required to maintain our qualification as a RIC, there can be no assurance that such actions could be effected in time to meet the tax requirements. See Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC.”
Purchases of our common stock under our stock repurchase program, including the Company 10b5-1 Plan, may have resulted in the price of our common stock being higher than the price that otherwise might have existed in the open market.
On October 29, 2025, the Company’s Board of Directors authorized the continuation of the Company’s $200.0 million stock repurchase program (the “Company Stock Repurchase Program”) until November 5, 2026, or until the approved dollar amount has been used to repurchase shares of common stock. Pursuant to the Program, the Company is authorized to repurchase its outstanding common stock in the open market and/or through privately negotiated transactions at prices not to exceed the Company’s net asset value per share as reported in its most recent financial statements, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. Effective February 18, 2026, our Board of Directors approved an increase in the authorized amount available for repurchases under the Company Stock Repurchase Program to up to $300.0 million. The Company is authorized to determine, in its discretion, the timing, manner, price and amount of any repurchases, based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal and regulatory requirements and other factors, which may include purchases pursuant to Rule 10b5-1 of the Exchange Act. The Program does not require the Company to repurchase any specific number of shares and there can be no assurance as to the amount of shares repurchased under the Program. The Program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law.
Pursuant to the authorization described above, the Company has adopted a 10b5-1 plan (the “Company 10b5-1 Plan”). The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rule 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict.
These activities may have had the effect of maintaining the market price of our common stock or slowing a decline in the market price of the common stock, and, as a result, the price of our common stock may have been higher than the price that otherwise might have existed in the open market.
Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.
As of February 23, 2026, we had 70,676,923 shares of common stock outstanding. Sales of substantial amounts of our common stock, or the availability of such shares for sale, could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of equity securities should we desire to do so.
Our stockholders will experience dilution in their ownership percentage if they opt out of our dividend reinvestment plan.
Our dividend reinvestment plan is an “opt out” dividend reinvestment plan, pursuant to which all dividends declared in cash payable to stockholders that do not elect to receive their distributions in cash are automatically reinvested in shares of our common stock, rather than receiving cash. As a result, our stockholders that “opt out” of our dividend reinvestment plan may experience dilution in their ownership percentage of our common stock over time. See Part II, Item 5 of this Form 10-K “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Common Stock” and “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Distribution Policy” for a description of our dividend policy and obligations.
If current economic and market conditions continue to contribute to capital market disruption and instability, there is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to our stockholders may be a return of capital for U.S. federal income tax purposes.
We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. It is not assured that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this Form 10-K. If we declare a dividend and if enough stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash dividend payments. In addition, due to the asset coverage test applicable to us as a BDC, we may be limited in our ability to make distributions. Any preferred stock we might issue would be entitled to be paid dividends in full prior to the declaration or payment of a dividend on our common stock. In addition, the Credit Facility may also limit our ability to declare dividends if we default under certain provisions or fail to satisfy certain conditions. Further, if we invest a greater amount of assets in equity securities that do not pay current dividends, it could reduce the amount available for distribution. See Part II, Item 5 of this Form 10-K “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Common Stock.” Investing a greater amount of assets in equity securities that do not pay current dividends may also inhibit our ability to make required interest payments to holders of our debt, which may cause a default under the terms of our debt agreements. Such a default could materially increase our cost of raising capital, as well as cause us to incur penalties under the terms of our debt agreements.
The distributions we pay to our stockholders in a year may exceed our taxable income for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes that would reduce a stockholder’s adjusted tax basis in its shares of our common stock or preferred stock and correspondingly increase such stockholder’s gain, or reduce such stockholder’s loss, on disposition of such shares. Distributions in excess of a stockholder’s adjusted tax basis in its shares of our common stock or preferred stock will constitute capital gains to such stockholder.
Our stockholders may receive shares of our common stock as dividends, which could result in adverse tax consequences to them.
In order to satisfy the Annual Distribution Requirement applicable to RICs, we will have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash and certain requirements are met, the entire distribution generally will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally would be taxed on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the trading price (if any) of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our stockholders were to determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price (if any) of our common stock. It is unclear whether and to what extent we will be able to pay taxable dividends of the type described in this paragraph.
Non-U.S. stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.
Distributions of our “investment company taxable income” to a non-U.S. stockholder that are not effectively connected with the non-U.S. stockholder’s conduct of a trade or business within the United States may be subject to withholding of U.S. federal income tax at a 30% rate (or lower rate provided by an applicable income tax treaty) to the extent of our current or accumulated earnings and profits. Certain properly designated dividends are generally exempt from withholding of U.S. federal income tax, including certain dividends that are paid in respect of our (i) “qualified net interest income” (generally, our U.S.-source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we or the non-U.S. stockholder are at least a 10% stockholder, reduced by expenses that are allocable to such income) or (ii) “qualified short-term capital gains” (generally, the excess of our net short-term capital gain over our long-term capital loss for such taxable year), and certain other requirements were satisfied. No assurance can be given as to whether any of our distributions will be eligible for this exemption from withholding of U.S. federal income tax or, if eligible, will be designated as such by us. See Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC.” for additional information.
We may have difficulty paying our required distributions if we recognize taxable income before or without receiving cash representing such income.
For U.S. federal income tax purposes, we will include in our taxable income certain amounts that we have not yet received in cash, such as OID or accruals on a contingent payment debt instrument, which may occur if we receive warrants in connection with the origination of a loan or possibly in other circumstances or contracted PIK interest, which generally represents contractual interest added to the loan balance and due at the end of the loan term. Any such income would be treated as income earned by us and therefore would be subject to the Annual Distribution Requirement (as defined and explained more fully in Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC”). We also may be required to include in our taxable income certain other amounts that we will not receive in cash. The credit risk associated with the collectability of deferred payments may be increased as and when a portfolio company increases the amount of interest on which it is deferring cash payment through deferred interest features. Our investments with a deferred interest feature may represent a higher credit risk than loans for which interest must be paid in full in cash on a regular basis. For example, even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is scheduled to occur upon maturity of the obligation.
Because in certain cases we may recognize taxable income before or without receiving cash representing such income, we may have difficulty making distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement necessary for us to maintain our status as a RIC. Accordingly, we may need to sell some of our assets at times and/or at prices that we would not consider advantageous, we may need to raise additional equity or debt capital, or we may need to forego new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business) to enable us to make distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement. However, under the Investment Company Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless an “asset coverage” test is met. See Part I, Item 1 of this Form 10-K “Business—Regulation—General—Indebtedness and Senior Securities” for additional information.
If we are unable to obtain cash from other sources to meet the Annual Distribution Requirement, we may fail to qualify for the U.S. federal income tax benefits allowable to RICs and, thus, become subject to a corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes). Additionally, we may make investments that result in the recognition of ordinary income rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions. See Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC” for additional information.
Alternatively, we may, with the consent of all our stockholders, designate an amount as a consent dividend (i.e., a deemed dividend). In that case, although we would not distribute any actual cash to our stockholders, the consent dividend would be treated like an actual dividend under the Code for all U.S. federal income tax purposes. This would allow us to deduct the amount of the consent dividend and our stockholders would be required to include that amount in income as if it were actually distributed. For additional discussion regarding the tax implications of a RIC, see Part I, Item 1 of this Form 10-K “Business—Regulation—General—Election to be Taxed as a RIC.”
We cannot assure that an active trading market for the 2030 Notes or 2031 Notes will develop or be maintained.
Both the 2030 Notes and 2031 Notes are a new issue of debt securities and there currently is no trading market for the 2030 Notes and 2031 Notes. We have not listed, and do not intend to list in the future, the 2030 Notes and 2031 Notes on any securities exchange or for quotation of the Notes on any automated dealer quotation system. If the 2030 Notes and 2031 Notes are traded after their initial issuance, they may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, general economic conditions, our financial condition, performance and prospects and other factors. Certain of the underwriters have advised us that they currently intend to make a market in the 2030 Notes and 2031 Notes but they are not obligated to do so. The underwriters may discontinue any market-making in the 2030 Notes and 2031 Notes at any time at their sole discretion. In addition, any market-making activity will be subject to limits imposed by law. Accordingly, we cannot assure you that a liquid trading market will develop or will be maintained for the 2030 Notes and 2031 Notes, that you will be able to sell your 2030 Notes and 2031 Notes at a particular time or that the price you receive when you sell will be favorable. To the extent an active trading market is not maintained, the liquidity and trading price for the 2030 Notes and 2031 Notes may be harmed. Accordingly, the holders of 2030 Notes and 2031 Notes may be required to bear the financial risk of an investment in the 2030 Notes and 2031 Notes for an indefinite period of time.
The indenture under which the 2030 Notes and 2031 Notes were issued contain limited protection for holders of the 2030 Notes and 2031 Notes, respectively.
The indenture under which the 2030 Notes and 2031 Notes were issued offers limited protection to holders of the 2030 Notes and 2031 Notes, respectively. The terms of the indenture and the 2030 Notes and 2031 Notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have a material adverse impact on your investment in the 2030 Notes and 2031 Notes. In particular, the terms of the indenture and the 2030 Notes and 2031 Notes do not place any restrictions on our or our subsidiaries’ ability to:
•issue securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be pari passu equal in right of payment to the 2030 Notes or 2031 Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the 2030 Notes or 2031 Notes to the extent of the value of the assets securing such debt, (3) indebtedness or other obligations of ours that are guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the 2030 Notes or 2031 Notes and (4) securities, indebtedness or obligations (including trade payables) issued or incurred by our subsidiaries, financing vehicles or similar facilities that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the 2030 Notes or 2031 Notes with respect to the assets of our subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would cause a violation of Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, which generally prohibit us incurring additional debt or issuing additional debt or preferred securities, unless our asset coverage, as defined in the 1940 Act, equals at least 150% after such incurrence or issuance;
•pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities ranking junior in right of payment to the 2030 Notes or 2031 Notes, any preferred stock we may issue in the future and any subordinated indebtedness, in each case other than dividends, purchases, redemptions or payments that would cause our asset coverage to fall below the threshold specified in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions thereto, whether or not we are subject to such provisions of the 1940 Act, giving effect to any no-action relief granted by the SEC to another BDC and upon which we may reasonably rely (or to us if we determine to seek such similar SEC no-action or other relief) permitting the BDC to declare any cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act in order to maintain our status as a RIC under Subchapter M of the Code;
•sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
•enter into transactions with affiliates;
•create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;
•make investments; or
•create restrictions on the payment of dividends or other amounts to us from our subsidiaries.
Furthermore, the terms of the indenture and the 2030 Notes and 2031 Notes do not protect holders of the 2030 Notes or 2031 Notes, respectively, in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, if any, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity.
Our ability to recapitalize, incur additional debt (including additional debt that matures prior to the maturity of the 2030 Notes or 2031 Notes) and take a number of other actions that are not limited by the terms of the 2030 Notes or 2031 Notes may have important consequences for you as a holder of the 2030 Notes or 2031 Notes, including making it more difficult for us to satisfy our obligations with respect to the 2030 Notes or 2031 Notes or negatively affecting the trading value of the 2030 Notes or 2031 Notes.
Certain of our debt instruments include more protections for their holders than the indenture and the Senior Notes
(as defined in Part II, Item 7 of this Form 10-K “Portfolio and Investment Activity—Portfolio Financing—Unsecured Debt”). In addition, other debt we issue or incur in the future could contain more protections for its holders than the indenture and the 2030 Notes or 2031 Notes, including additional covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for, trading levels, and prices of the 2030 Notes or 2031 Notes.
The 2030 Notes and 2031 Notes are unsecured and therefore are effectively subordinated to any secured indebtedness we have incurred and may incur in the future and rank pari passu with, or equal to, all outstanding and future unsecured indebtedness issued by us, including our general liabilities, including liabilities of our subsidiaries.
The 2030 Notes and 2031 Notes are not secured by any of our assets or any of the assets of our subsidiaries. As a result, the 2030 Notes and 2031 Notes are effectively subordinated to any secured indebtedness we have outstanding or that we may incur in the future to the extent of the value of the assets securing such indebtedness. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the 2030 Notes and 2031 Notes. In addition, the 2030 Notes and 2031 Notes rank pari passu with, or equal to, all outstanding and future unsecured indebtedness issued by us, including our general liabilities.
The 2030 Notes and 2031 Notes are obligations exclusively of the Company and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the 2030 Notes or 2031 Notes and the 2030 Notes and 2031 Notes are not required to be guaranteed by any subsidiaries we may acquire or create in the future. Any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the 2030 Notes or 2031 Notes. Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the 2030 Notes or 2031 Notes) with respect to the assets of such subsidiaries. Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims. Consequently, the 2030 Notes and 2031 Notes are structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish, including the SPV and the 2015-1 Issuer. Borrowings under the 2015-1N Debt are the obligation of 2015-1 Issuer, a wholly owned subsidiary of ours, and are structurally senior to the 2030 Notes and 2031 Notes. In addition, our subsidiaries may incur substantial additional indebtedness in the future, all of which would be structurally senior to the 2030 Notes and 2031 Notes.
If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the 2030 Notes or the 2031 Notes.
Any default under the agreements governing our indebtedness, including a default under the Credit Facility, the terms of our other indebtedness to which we may be a party, that is not waived by the required lenders or holders, and the remedies sought by the lenders or holders of such indebtedness, could make us unable to pay principal, premium, if any, and interest on the 2030 Notes or 2031 Notes and substantially decrease the market value of the 2030 Notes or 2031 Notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, as applicable, in the instruments governing our indebtedness, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under the Credit Facility or other debt we may incur in the future could elect to terminate their commitments, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation.
Our ability to generate sufficient cash flow in the future is, to some extent, subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control. We cannot assure you that our business will generate cash flow from operations, or that future borrowings will be available to us under the Credit Facility or otherwise, in an amount sufficient to enable us to meet our payment obligations under the 2030 Notes or 2031 Notes and our other indebtedness, and to fund other liquidity needs.
If our operating performance declines and we are not able to generate sufficient cash flow to service our debt obligations, we may in the future need to refinance or restructure our debt, including the 2030 Notes and 2031 Notes, sell assets, reduce or delay capital investments, seek to raise additional capital or seek to obtain waivers from the required lenders under the Credit Facility or the holders of other debt that we may incur in the future to avoid being in default. If we are unable to implement one or more of these alternatives, we may not be able to meet our payment obligations under the 2030 Notes or 2031 Notes or our other debt. If we breach our covenants under the Credit Facility or other debt and seek a waiver, we may not be able to obtain a waiver from the required lenders or holders. If this occurs, we would be in default under the Credit Facility or other debt, the lenders or holders could exercise their rights as described above, and we could be forced into bankruptcy or liquidation. If we are unable to repay debt, lenders having secured obligations, including the lenders under the Credit Facility, could proceed against the collateral securing the debt. Because the Credit Facility and Senior Notes have, and any future credit facilities or other indebtedness will likely have, customary cross-default provisions, if the indebtedness under the Senior Notes, the Credit Facility or any future credit facility or other indebtedness is accelerated, we may be unable to repay or finance the amounts due.
We may not be able to repurchase the 2030 Notes or 2031 Notes upon a Change of Control Repurchase Event.
We may not be able to repurchase the 2030 Notes or 2031 Notes upon a Change of Control Repurchase Event because we may not have sufficient funds. A Change of Control Repurchase Event means the occurrence of a Change of Control (defined as either the direct or indirect disposition of all or substantially all of the assets of the Company and its controlled subsidiaries, the consummation of any transaction where one person becomes the beneficial owner, directly or indirectly, of more than 50% of the Company’s outstanding voting stock, or the approval of any plan or proposal to liquidate or dissolve the Company) and a Below Investment Grade Rating Event (defined as the downgrade of the 2030 Notes or 2031 Notes below BBB- by Fitch Ratings Inc. and below Baa3 by Moody’s Investors Service). Upon the occurrence of a Change of Control Repurchase Event, subject to certain conditions, we will be required to offer to repurchase all outstanding 2030 Notes or 2031 Notes at 100% of their principal amount, plus accrued and unpaid interest. The source of funds for that purchase of 2030 Notes or 2031 Notes will be our available cash or cash generated from our operations or other potential sources, including borrowings, investment repayments, sales of assets or sales of equity. We cannot assure the holders of 2030 Notes that sufficient funds from such sources will be available at the time of any Change of Control Repurchase Event to make required repurchases of 2030 Notes or 2031 Notes tendered. The terms of the Credit Facility provide that certain change of control events will constitute an event of default thereunder entitling the lenders to accelerate any indebtedness outstanding under the Credit Facility at that time and to terminate the Credit Facility.
Any failure to comply with these Change of Control provisions would constitute an event of default under each of the other agreements governing our indebtedness, including the indenture. Our future debt instruments also may contain similar
restrictions and provisions. If the holders of the 2030 Notes or 2031 Notes exercise their right to require us to repurchase all the 2030 Notes or 2031 Notes upon a Change of Control Repurchase Event, the financial effect of this repurchase could cause a default under our future debt instruments, even if the Change of Control Repurchase Event itself would not cause a default. It is possible that we will not have sufficient funds at the time of the Change of Control Repurchase Event to make the required repurchase of the 2030 Notes or 2031 Notes or our other debt.
We may choose to redeem the 2030 Notes and 2031 Notes when prevailing interest rates are relatively low.
Both the 2030 Notes and 2031 Notes are redeemable in whole or in part upon certain conditions at any time or from time to time at our option. Refer to the redemption terms of the 2030 Notes and 2031 Notes described in Note 2, Significant Accounting Policies, and in Note 9, Borrowings, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K. We may choose to redeem the 2030 Notes and 2031 Notes at times when prevailing interest rates are lower than the interest rate paid on the 2030 Notes and 2031 Notes In this circumstance, a holder of 2030 Notes and 2031 Notes may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as that of the 2030 Notes and 2031 Notes being redeemed.
We, the Investment Adviser and its affiliates regularly assess risks from cybersecurity threats, monitor our information systems for potential vulnerabilities, and test those systems pursuant to our cybersecurity policies, standards, processes, and practices, which are integrated into our overall risk management system. To protect our information systems from cybersecurity threats, we use various security tools that help us identify, protect against, detect, respond to, and recover from security incidents. These efforts are implemented by Carlyle’s Global Technology & Solutions (“GTS”) team in partnership with other stakeholders and are essential for Carlyle’s operations. Our systems, data, network, and infrastructure are monitored and administered by formal controls and risk management processes that log events and help protect our data. In addition, our business continuity plans are designed to allow critical business functions to continue in an orderly manner in the event of an emergency. The GTS team works closely with Carlyle’s business segment teams, including the Investment Adviser, to maintain operational resilience through business continuity planning and annual information technology disaster recovery and incident response plan testing. These efforts are underpinned by the implementation of security best practices, where possible, such as:
•Multi-factorauthenticationforremoteaccess,privilegedaccessmanagementforsystemadministrators, application whitelisting, laptop encryption, mobile device management software, and advanced malware defenses on endpoints;
•Incident preparedness and response planning and risk mitigation;
•Independent and continuous security testing, assessment and third-party risk management;
•Regular security awareness training, including phishing simulations;
•Restrictions on access to personal email accounts, cloud storage, social media, risk-based categories of websites, and USB storage devices;
•Device and system access management policies and procedures that restrict access upon employee or contractor separation from the Company; and
•Attestations by Carlyle personnel to abide by firm policies, such as Carlyle’s acceptable use policy, upon hire and annually.
In addition, Carlyle partners with third parties to assess the effectiveness of its cybersecurity program, including audits and assessments performed under the direction of Carlyle’s Internal Audit team, which co-sources with third-party cybersecurity experts in conducting its reviews. GTS also administers Carlyle’s cyber third-party risk management program, which assesses external service providers before onboarding and provides ongoing monitoring in accordance with certain risk-based cybersecurity criteria.
To our knowledge cybersecurity threats, including as a result of any previous detected or undetected cybersecurity incidents, have not materially affected us, including our business strategy, results of operations, or financial condition, however, we may learn new facts about these detected or undetected incidents and these facts may lead us to change this materiality assessment. The sophistication of cyber threats continues to increase and there can be no assurance that the various procedures and controls we utilize to mitigate these threats will be sufficient to prevent disruptions to our systems. Consequently, given that the magnitude of cybersecurity incidents or threats are difficult to predict, we are unable to determine at this time whether risks from cybersecurity threats are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. For an additional description of cybersecurity risk and potential related impacts on us, see Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to Our Business and Structure—Cybersecurity risks and cyber incidents may adversely affect our business or those of our portfolio companies by causing a disruption to our operations, a compromise or corruption of confidential information and/or damage to business relationships, or those of our portfolio companies, all of which could negatively impact our business, results of operations or financial condition.”
Governance
Our Board of Directors oversees our enterprise risk management strategy, including our strategy on cybersecurity risks, directly and through its committees. In this respect, the Audit Committee of the Board of Directors (the “Audit Committee”) oversees our risk management program, which focuses on the most significant risks we face in the short-, intermediate-, and long-term timeframe. Audit Committee meetings include discussions of specific risk areas throughout the year, including, among others, those relating to cybersecurity, and reports from Carlyle on our enterprise risk profile on an annual basis. In addition, Carlyle’s Chief Information Security Officer (“CISO”) leads our cybersecurity program, chairs
Carlyle’s Information Security Committee (“ISC”), and provides cybersecurity status reporting to our Audit Committee at least annually. The ISC meets quarterly and ensures that cybersecurity initiatives are in alignment with Carlyle’s strategic priorities.
We take a risk-based approach to cybersecurity and have implemented cybersecurity policies, standards, processes, and practices throughout our operations that are designed to address cybersecurity threats, events, and incidents. In particular, our cybersecurity program supports security governance, security awareness and training, security engineering and architecture, security risk management, vulnerability management, security monitoring, and incident response capabilities. In addition, our incident response plan contains escalation and reporting protocols, including reporting to our disclosure committee to consider materiality of cybersecurity incidents. Policies and procedures are in place to assist the disclosure committee with these materiality assessments and any resulting reporting requirements.
Carlyle’s CISO, in coordination with our Chief Financial Officer, Chief Compliance Officer, and Carlyle’s Chief Information Officer, among certain other senior executives of the Investment Adviser, is responsible for leading the assessment and management of cybersecurity risks.The current Carlyle CISO has over 20 years of experience in information security and that includes key roles managing cybersecurity risk in both government and the private sector. As described above, Carlyle’s CISO leads our cybersecurity program, chairs Carlyle’s ISC that is comprised of senior management and other sector representatives, and provides cybersecurity status reporting to our Audit Committee as necessary and at least annually.
Item 2. Properties
We maintain our principal executive office at One Vanderbilt Avenue, Suite 3400, New York, NY 10017. We do not own any real estate.
Item 3. Legal Proceedings
The Company may become party to certain lawsuits in the ordinary course of business. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 14, Litigation, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (dollar amounts in thousands, except share and per share data)
Common Stock
Our common stock is traded on the Nasdaq Global Select Market under the symbol “CGBD.” Our common stock has historically traded at prices both above and below our NAV per share. It is not possible to predict whether our common stock will trade at, above or below NAV. See Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to an Investment in Our Securities— Our shares of common stock have traded at a discount to NAV and may do so again, which could limit our ability to raise additional equity capital.”
On February 23, 2026, the last reported closing sales price of our common stock on the Nasdaq Global Select Market was $11.10 per share, which represented a discount of approximately 31.7% to the NAV per share reported by us as of December 31, 2025.
Holders
As of February 23, 2026, there were approximately 25 holders of record of our common stock (including Cede & Co.).
Distributions
To the extent that we have taxable income available, we intend to distribute quarterly dividends to our stockholders. The amount of our dividends, if any, will be determined by our Board of Directors. Any dividends to our stockholders will be declared out of assets legally available for distribution. We anticipate that our distributions will generally be paid from taxable earnings, including interest and capital gains generated by our investment portfolio, and any other income, including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees, that we receive from portfolio companies. However, if we do not generate sufficient taxable earnings during a year, all or part of a distribution may constitute a return of capital. The specific tax characteristics of our dividends and other distributions will be reported to stockholders after the end of each calendar year.
We have elected to be treated, and intend to continue to qualify annually, as a RIC. To maintain our qualification as a RIC, we must, among other things, distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, to our stockholders on an annual basis. In order to avoid certain excise taxes imposed on RICs and when reasonable, we intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of our ordinary income for the calendar year; (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year; and, (3) any undistributed ordinary income and capital gain net income for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax less certain over-distributions in prior years. In addition, although we currently intend to distribute realized net capital gains (i.e., net long term capital gains in excess of short-term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment, pay U.S. federal income tax on such amounts at regular corporate tax rates, and elect to treat such gains as deemed distributions to stockholders. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.
We intend to make distributions in cash unless a stockholder elects to receive dividends and/or long-term capital gains distributions in additional shares of common stock. See “—Dividend Reinvestment Plan” below. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.
Dividend Reinvestment Plan
Prior to July 5, 2017, we had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, we converted our “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our common stockholders, other than those stockholders who have “opted out” of the plan. As a result of adopting the plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution, our common stockholders who have not elected to “opt out” of our dividend reinvestment plan will have their cash dividends or distributions
automatically reinvested in additional shares of our common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, our plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. We intend to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.
Recent Sales of Unregistered Securities and Use of Proceeds
The Company did not sell any securities during the period covered by this Form 10-K that were not registered under the Securities Act.
Stock Performance Graph
This graph depicts the stockholder return on our common stock from December 31, 2020 to December 31, 2025 relative to that of the Standard & Poor’s BDC Index (the “S&P BDC Index”) and the Standard & Poor’s 500 Stock Index (the “S&P 500 Index”). This graph assumes that on December 31, 2020, $100 was invested in our common stock, the S&P BDC Index and the S&P 500 Index. The graph also assumes the reinvestment of all cash dividends prior to any tax effect.
The graph and other information furnished under this Part II, Item 5 of this Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of, the Exchange Act. The stock price performance included in the below graph is not necessarily indicative of future stock performance.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table provides information regarding purchases of our common stock made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the fourth quarter of 2025.
Period
Total Number of Shares Purchased(1)
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)(2)
Maximum (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
October 1, 2025 through October 31, 2025
—
$
—
—
$
42,263
November 1, 2025 through November 30, 2025
227,859
12.15
227,859
39,494
December 1, 2025 through December 31, 2025
867,932
12.80
867,932
28,389
Total
1,095,791
1,095,791
(1)On trade date basis.
(2)On October 29, 2025, the Company's Board of Directors approved the continuation of the Company's $200.0 million Stock Repurchase Program until November 5, 2026, or until the date the approved dollar amount has been used to repurchase shares. Pursuant to the program, the Company is authorized to repurchase up to $200.0 million in the aggregate of the Company’s outstanding stock in the open market and/or through privately negotiated transactions at prices not to exceed the Company’s net asset value per share as reported in its most recent financial statements, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. Effective February 18, 2026, our Board of Directors approved an increase in the authorized amount available for repurchases under the Stock Repurchase Program to up to $300.0 million. The timing, manner, price and amount of any repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal and regulatory requirements and other factors, and may include purchases pursuant to Rule 10b5-1 of the Exchange Act. The program does not require the Company to repurchase any specific number of shares and there can be no assurance as to the amount of shares repurchased under the program. The program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. Pursuant to the authorization described above, the Company has adopted the Company 10b5-1 Plan. The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except share and per share data, unless otherwise indicated)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in “Risk Factors” in Part I, Item 1A of this Form 10-K. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.
Overview
Carlyle Secured Lending, Inc., a Maryland corporation, is a specialty finance company that is a closed-end, externally managed, non-diversified management investment company. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act and have operated our business as a BDC since we began our investment activities. For U.S. federal income tax purposes, we have elected to be treated as a registered investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”). We were formed in February 2012, commenced investment operations in May 2013 and began trading on the Nasdaq Global Select Market, under the symbol “CGBD,” upon completion of our initial public offering in June 2017. Our principal executive offices are located at One Vanderbilt Avenue, Suite 3400, New York, New York 10017.
Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. Our core investment strategy focuses on lending to U.S. middle market companies, which we define as companies with approximately $25.0 million or greater of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. We seek to achieve our investment objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of our assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities and structured products). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms.
We invest primarily in loans to middle market companies whose debt is rated below investment grade, or would likely be rated below investment grade if it was rated. These securities, which are often referred to as “junk,” have predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
We are externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Adviser Act”) and a subsidiary of Carlyle. We benefit from the Investment Adviser’s investment team of over 205 investment professionals with the deep knowledge and expertise across multiple asset classes who are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle. In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including the Investment Adviser and its affiliates.
2025 Highlights
2025 Annual Results
•Net investment income was $100.7 million or $1.48 per common share.
•Adjusted for one-time income or expense events and purchase accounting adjustments, the adjusted net investment income per common share (a non-GAAP financial measure) was $1.51. Refer to the Adjusted Net Investment Income and Adjusted Net Income discussion within this section for further details.
•Dividends declared on common shares were $110.0 million, or $1.65 per share.
•Net investment income for the year ended December 31, 2025 declined from the prior year primarily due to a lower weighted average yield on the portfolio, a higher average margin on our debt and the net impact of
investments on non-accrual status. These impacts were partially offset by a higher average outstanding investment balance driven by net investment activity during 2025, including assets acquired in the CSL III Merger and the Credit Fund II Purchase in the first quarter of 2025.
•The NAV per common share decreased to $16.26 as of December 31, 2025 from $16.80 as of December 31, 2024.
Portfolio and Investment Activity
•On February 11, 2025, we completed a series of transactions with CCLF that resulted in our 100% ownership in Credit Fund II, which is now a wholly owned subsidiary of CGBD (the “Credit Fund II Purchase”). See Note 6. Middle Market Credit Fund II, LLC, to our consolidated financial statements for more details included in Part II, Item 8 of this Form 10-K.
•As of December 31, 2025, we held 229 investments across 165 portfolio companies and 31 industries for a total fair value of $2.5 billion.
•During the year ended December 31, 2025, our investment balance increased from $1.8 billion to $2.5 billion driven by net investment activity, including assets acquired in the CSL III Merger and the Credit Fund II Purchase in the first quarter of 2025.
•As of December 31, 2025, non-accrual investments represented 1.8% and 1.2% of our portfolio based on cost and fair value, respectively.
•In December 2025, we, together with Carlyle Credit Solutions, Inc. (“CARS”), an affiliated BDC, and certain affiliates of Sixth Street Partners, LLC, Sixth Street Lending Partners and Sixth Street Specialty Lending, Inc. (together, “Sixth Street”) (collectively with us and CARS, the “SCP Members”), agreed to co-invest through Structured Credit Partners JV, LLC (“Structured Credit Partners”), a joint venture that will primarily invest in broadly syndicated loans and will be co-managed by Carlyle and Sixth Street. The broadly syndicated loans will be financed by financing subsidiaries that include warehouses and collateralized loan obligations. We and CARS each own 25% of the voting interest in Structured Credit Partners, with the remaining 50% ownership held by Sixth Street. As of December 31, 2025, Structured Credit Partners had not commenced operations, and no capital had been contributed to the joint venture. Each Carlyle SCP Member’s initial capital commitment to Structured Credit Partners is up to $150.0 million, if and when requested, and the total initial capital commitments of all SCP Members to Structured Credit Partners are up to $600.0 million, if and when requested. Each SCP Member has equal representation on the board of managers of Structured Credit Partners.
Liquidity and Capital Activity
•On March 12, 2025, we amended and restated the Credit Facility. As a result of the amendment, total commitments under the Credit Facility increased to $935.0 million and the maturity date was extended to March 12, 2030.
•On March 27, 2025, we completed the previously announced merger with CSL III. In accordance with the terms of the Merger Agreement, we issued an aggregate of 18,935,108 shares of our common stock to former CSL III shareholders and paid cash in lieu of fractional shares. Commencing on the completion of the merger, all activity is consolidated in these consolidated financial statements. Refer to Note 15, Merger with CSL III, to the consolidated financial statements included in Part II, Item 8 of this Form 10-Kfor additional information regarding the CSL III Merger.
•On March 27, 2025, all 2,000,000 shares of our Preferred Stock were exchanged for 3,004,808 shares of our common stock, based on an aggregate $50,000 liquidation preference and our net asset value per share of $16.64 as of March 25, 2025.
•On March 28, 2025, we entered into an equity distribution agreement with certain placement agents. The agreement provides for the offer and sale of up to $150.0 million in aggregate offering amount of our common stock from time to time through an “at-the-market” (“ATM”) offering, as defined in Rule 415 under the Securities Act of 1933. The minimum price per share on any day at which our common stock may be sold under the ATM program will not be below the then-current net asset value per share. Refer to Note 10, Net Assets, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information regarding the ATM program.
•On July 10, 2025, we increased the total commitments under the Credit Facility by $25.0 million, resulting in total commitments increasing to $960.0 million.
•On October 2, 2025, we repaid in full all outstanding borrowings of the CSL III SPV Credit Facility, totaling $175.0 million.
•On October 7, 2025, we completed a public offering of $300.0 million aggregate principal of 2031 Notes. In connection with the issuance of the 2031 Notes, we entered into an interest rate swap agreement with JP Morgan for a total notional amount of $300.0 million. Under the interest rate swap agreement, we will receive a fixed interest rate of 5.75% and pay a floating interest rate based on the compounded average daily SOFR plus 2.312%.
•On December 1, 2025, we redeemed the 2028 Notes (as defined below) at a redemption price equal to 100% of the principal amount redeemed, plus accrued and unpaid interest. In connection with the redemption of the 2028 Notes, the interest rate swap agreement with Morgan Stanley was terminated by Morgan Stanley on December 1, 2025.
•Total liquidity as of December 31, 2025 was $472.8 million in cash and unused debt capacity.
•During the year ended December 31, 2025, we repurchased 1,095,791 shares of our common stock for an aggregate purchase price of approximately $13.9 million, resulting in accretion to NAV per common share of approximately $0.06.
Recent Developments
•On February 11, 2026, we, together with Credit Partners, entered into a second amendment to the Sixth Amended and Restated Limited Liability Company Agreement. As a result of the amendment, each member’s capital commitment increased to $250.0 million.
•On February 18, 2026, we declared common stock dividends of $0.40 per share to be paid on April 16, 2026.
•On February 18, 2026, our Board of Directors approved an $100.0 million increase in the authorized amount available for repurchases under the Stock Repurchase Program to up to $300.0 million.
•On February 18, 2026, our Board of Directors appointed Alex Chi as Director and Chief Executive Officer and Thomas Hennigan as President, effective February 18, 2026, following the resignation of Justin Plouffe as Director and President and Chief Executive Officer.
•From January 1, 2026 through February 23, 2026, we repurchased 1,130,267 shares of our common stock for an aggregate purchase price of approximately $14.0 million resulting in $0.06 per common share of NAV accretion.
Key Components of Our Results of Operations
As a BDC, we believe that the key components of our results of operations for our business are earnings per share, dividends declared, net investment income and net asset value per common share. For the three months ended December 31, 2025, we recorded basic earnings per common share of $0.24, declared a dividend of $0.40 per common share and earned $0.33 of net investment income per common share. For the year ended December 31, 2025, we recorded basic earnings per common share of $1.02, declared a dividend of $1.65 per common share and earned $1.48 of net investment income per common share.
The following table sets forth the calculation of basic and diluted earnings per share (dollar amounts in thousands, except share and per share data):
For the years ended December 31,
2025
2024
Basic
Diluted
Basic
Diluted
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders
$
69,146
$
69,972
$
85,478
$
88,978
Weighted-average common shares outstanding
67,718,284
69,038,337
50,831,205
56,468,099
Earnings per share
$
1.02
$
1.01
$
1.68
$
1.58
For the years ended December 31, 2025 and 2024, we declared dividends per common share of $1.65 and $1.87, respectively. As of December 31, 2025 and 2024, our NAV per share was $16.26 and $16.80, respectively.
We generate investment income primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as SOFR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. At times, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity reflects the proceeds of sales of securities. We may also generate investment income in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include: (i) investment advisory fees, including base management fees and incentive fees, to the Investment Adviser pursuant to the Investment Advisory Agreement; (ii) debt service and other costs of borrowings or other financing arrangements; (iii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement; and (iv) other operating expenses summarized below:
•administration fees payable under our Administration Agreement and Sub-Administration Agreements, including related expenses;
•the costs of any offerings of our common stock and other securities, if any;
•calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);
•expenses, including travel expenses, incurred by the Investment Adviser, or members of the Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies;
•the allocated costs incurred by the Investment Adviser in providing managerial assistance to those portfolio companies that request it;
•amounts payable to third parties relating to, or associated with, making or holding investments;
•the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
•transfer agent and custodial fees;
•commissions and other compensation payable to brokers or dealers;
•U.S. federal, state and local taxes;
•independent director fees and expenses;
•costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including federal and state registration and any applicable listing fees;
•the costs of any reports, proxy statements or other notices to our stockholders and the costs of any stockholders’ meetings;
•the costs of specialty and custom software for monitoring risk, compliance and overall portfolio;
•fidelity bond, liability insurance, and any other insurance premiums;
•indemnification payments;
•direct fees and expenses associated with independent audits, agency, consulting and legal costs; and
•all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.
The following table summarizes our net investment income and net investment income per common share:
Year Ended December 31,
2025
2024
Total investment income
$
255,567
$
232,590
Total expenses (including excise tax expense)
154,821
127,338
Net investment income
$
100,746
$
105,252
Preferred stock dividend
826
3,500
Net investment income, net of the preferred stock dividend
$
99,920
$
101,752
Weighted-average common shares outstanding
67,718,284
50,831,205
Net investment income per common share
$
1.48
$
2.00
Adjusted Net Investment Income and Adjusted Net Income
On a supplemental basis, we are disclosing Adjusted Net Investment Income, Adjusted Net Investment Income Per Common Share, Adjusted Net Income and Adjusted Net Income Per Common Share each of which is calculated and presented on a basis other than in accordance with GAAP (“non-GAAP”). We use these non-GAAP financial measures internally to analyze and evaluate financial results and performance, and we believe these non-GAAP financial measures are useful to investors as an additional tool to evaluate our ongoing results and trends and to review our performance without giving effect to (i) the amortization/accretion resulting from the new cost basis of the investments acquired and accounted for under the acquisition method of accounting in accordance with ASC 805 and (ii) the one-time purchase or non-recurring investment income and expense events, including the effects on incentive fees. The presentation of these non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.
We believe that excluding the financial impact of the purchase premium in the above non-GAAP financial measures is useful for investors as this is a non-cash expense/loss and is one method we use to measure our operations. In addition, we use the non-GAAP financial measures described above internally to analyze and evaluate financial results and performance and to compare our financial results with those of other business development companies that do not have similar financial impacts from asset acquisitions and have not had similar one-time or non-recurring events. We believe “Adjusted Net Investment Income”, “Adjusted Net Investment Income Per Common Share”, “Adjusted Net Income” and “Adjusted Net Income Per Common Share” are useful to investors as an additional tool to evaluate our ongoing results and trends without giving effect these considerations and these metrics are used to evaluate our economic earnings.
The following table summarizes our Adjusted Net Investment Income, Adjusted Net Investment Income Per Common Share, Adjusted Net Income, and Adjusted Net Income Per Common Share:
Year Ended December 31,
2025
2024
Net investment income, net of the preferred stock dividend
$
99,920
$
101,752
Acceleration of debt issuance costs, net of incentive fee impact (1)
1,691
1,011
Amortization of premium/discount on acquired assets(2)
825
—
Adjusted Net Investment Income
$
102,436
$
102,763
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders
$
69,146
$
85,478
Acceleration of debt issuance costs, net of incentive fee impact (1)
1,691
1,011
Amortization of premium/discount on acquired assets(2)
825
—
Reversal of unrealized appreciation from the amortization of premium/discount on acquired assets
Acceleration of debt issuance costs, net of incentive fee impact (1)
0.02
0.02
Amortization of premium/discount on acquired assets(2)
0.01
—
Adjusted Net Investment Income Per Common Share
$
1.51
$
2.02
Net Income Per Share
$
1.02
$
1.68
Acceleration of debt issuance costs, net of incentive fee impact (1)
0.02
0.02
Amortization of premium/discount on acquired assets(2)
0.01
—
Reversal of unrealized appreciation from the amortization of premium/discount on acquired assets
(0.01)
—
Adjusted Net Income Per Common Share
$
1.04
$
1.70
Weighted-average common shares outstanding
67,718,284
50,831,205
(1)On July 2, 2024, Carlyle Direct Lending CLO 2015-1R LLC, a wholly owned and consolidated subsidiary of the Company, completed the refinancing of its outstanding notes by redeeming the notes in full and issuing new notes and loans (the “2015-1R Refinancing”). On December 1, 2025, the 2028 Notes were redeemed. In connection with the 2015-1R Refinancing and the redemption of the 2028 Notes, debt issuance costs were accelerated in accordance with GAAP. Refer to Note 9, Borrowings, in the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K for more information on the 2015-1R Refinancing and the redemption of the 2028 Notes.
(2)This adjustment represents the difference between GAAP amortization under the asset acquisition method of accounting, in accordance with ASC 805 and management’s non-GAAP measure of amortization related to assets acquired in connection with the CSL III Merger on March 27, 2025, and the Credit Fund II Purchase on February 11, 2025. This adjustment reflects management’s view of the economic yield on the acquired assets and is consistent with the internal evaluation of performance.
Portfolio and Investment Activity
Portfolio Overview
The following tables summarize certain characteristics of our investment portfolio as of December 31, 2025:
First Lien Debt
Second Lien Debt
Equity Investments
Investment Funds
Total Investments
Count of investments
183
8
36
2
229
Investments, at amortized cost
$
2,082,022
$
97,765
$
118,608
$
171,001
$
2,469,396
Investments, at fair value
$
2,061,847
$
95,130
$
143,331
$
163,614
$
2,463,922
Percentage of total investments at fair value
83.7
%
3.9
%
5.8
%
6.6
%
100.0
%
Weighted Average Yields at
Amortized Cost
Fair Value
First Lien Debt(1)
9.6
%
9.6
%
Second Lien Debt(1)
12.5
%
12.9
%
Total Debt and Income Producing Investments(1)(2)
10.1
%
10.1
%
(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2025. Weighted average yield at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount (“OID”) and market discount earned, divided by (b) total fair value included in such securities. Weighted average yield at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned, divided by (b) total amortized cost included in such securities. Weighted average yields exclude investments on non-accrual status. Actual yields earned over the life of each investment could differ materially from the yields presented above. Inclusive of all debt and income producing investments and investments on non-accrual status, the weighted average yield on amortized cost was 9.9% as of December 31, 2025.
(2)Weighted average yield for total debt and income producing investments includes Credit Fund, as well as income producing equity investments.
Our investment activity for the years ended December 31, 2025 and 2024 is presented below (information presented herein is at amortized cost unless otherwise indicated):
Year Ended December 31,
2025
2024
Investments:
Total investments, beginning of year
$
1,848,212
$
1,904,895
New investments purchased
1,416,347
500,998
Transfer in - CSL III Merger
485,673
—
Transfer in - Credit Fund II Purchase
191,201
—
Net accretion of discount on investments
10,877
11,003
Net realized gain (loss) on investments
(58,090)
(38,317)
Investments sold or repaid
(1,424,824)
(530,367)
Total Investments, end of year
$
2,469,396
$
1,848,212
Principal amount of investments funded:
First Lien Debt
$
1,193,962
$
469,069
Second Lien Debt
4,341
9,320
Equity Investments(1)
29,384
30,658
Investment Funds
40,500
—
Transfer in - CSL III Merger
487,879
—
Transfer in - Credit Fund II Purchase
198,824
—
Total
$
1,954,890
$
509,047
Principal amount of investments sold or repaid:
First Lien Debt
$
(1,116,437)
$
(478,876)
Second Lien Debt
(47,431)
(71,691)
Equity Investments(1)
(19,600)
(18,735)
Investment Funds
(62,500)
—
Total
$
(1,245,968)
$
(569,302)
Number of new investment commitments(2)(3)
96
72
Average new investment commitment amount
$
13,871
$
7,090
(1)Based on cost paid/proceeds received from equity activity.
(2)Represents commitments to a portfolio company as part of an individual transaction.
(3)For the years ended December 31, 2025 and 2024, 100.0% and 99.0% of new funded debt investments were at floating interest rates.
See the Consolidated Schedules of Investments as of December 31, 2025 and 2024 to the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K for more information on these investments, including a list of companies and type and amount of investments.
Portfolio Credit
As part of the monitoring process, the Investment Adviser has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of our first lien and second lien debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”. Key drivers of internal risk ratings include financial metrics, financial covenants, liquidity and enterprise value coverage. Pursuant to these risk policies, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each first lien and second lien debt investment in our portfolio.
Borrower is operating above expectations, and the trends and risk factors are generally favorable.
2
Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost basis is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.
3
Borrower is operating below expectations and level of risk to our cost basis has increased since the time of
origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.
4
Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.
5
Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.
The Investment Adviser monitors and, when appropriate, changes the risk ratings assigned to each first lien and second lien debt investment in our portfolio. The Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The below table summarizes the Internal Risk Ratings as of December 31, 2025 and 2024.
December 31, 2025
December 31, 2024
Fair Value
% of Fair Value
Fair Value
% of Fair Value
Internal Risk Rating 1
$
—
—
%
$
380
0.0
%
Internal Risk Rating 2
2,011,980
93.3
1,258,072
87.4
Internal Risk Rating 3
114,456
5.3
172,840
12.0
Internal Risk Rating 4
20,240
0.9
7,756
0.5
Internal Risk Rating 5
10,301
0.5
1,116
0.1
Total
$
2,156,977
100.0
%
$
1,440,164
100.0
%
As of December 31, 2025 and 2024, the weighted average Internal Risk Rating of our first lien and second lien debt investment portfolio was 2.1. As of December 31, 2025 and 2024, six and three of our first lien and second lien debt investments were assigned an Internal Risk Rating of 4 or 5, respectively.
The following table summarizes the fair value of our performing and non-accrual/non-performing investments as of December 31, 2025 and 2024:
December 31, 2025
December 31, 2024
Number of Investments
Fair Value
% of Fair Value
Number of Investments
Fair Value
% of Fair Value
Performing
222
$
2,433,381
98.8
%
185
$
1,793,150
99.4
%
Non-accrual(1)
7
30,541
1.2
4
10,393
0.6
Total
229
$
2,463,922
100.0
%
189
$
1,803,543
100.0
%
(1)For information regarding our non-accrual policy, see Note 2, Significant Accounting Policies, to the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K.
Our primary sources of financing consist of secured debt, unsecured debt, and securitizations, which are presented on the Consolidated Statements of Assets and Liabilities as Debt and secured borrowings. Refer to Note 9, Borrowings, to the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K for additional information regarding our financing. The following table details those sources of financing:
Outstanding Principal Balance as of December 31,
2025
2024
Secured Debt
Credit Facility
$
563,660
$
213,439
Unsecured Debt
2028 Notes
—
85,000
2030 Notes
300,000
300,000
2031 Notes
300,000
—
Securitizations
2015-1N Debt
380,000
380,000
Total
$
1,543,660
$
978,439
Weighted average interest rate
6.02
%
6.65
%
Credit Facilities
On March 21, 2014, we closed on a senior secured revolving credit facility (the “Credit Facility”), which was most recently amended and restated on March 12, 2025, and may be further amended from time to time. On July 10, 2025, we increased the total commitments under the Credit Facility by $25,000, resulting in total commitments increasing to $960,000 ($935,000 prior to the July 10, 2025 increase), pursuant to the terms of the agreement, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of our portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that we may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $1,402,500 through the exercise by us of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $75,000 limit for swingline loans and a $30,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by us. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, stockholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
The Credit Facility consisted of the following as of December 31, 2025 and 2024:
Total Facility
Borrowings Outstanding
Unused
Portion(1)
Amount Available(2)
Weighted Average Interest Rate
December 31, 2025
$
960,000
$
563,660
$
396,340
$
396,340
5.28
%
December 31, 2024
$
790,000
$
213,439
$
576,561
$
509,121
6.18
%
(1)The unused portion is the amount upon which commitment fees are based.
(2)The amount available is based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
Effective March 27, 2025, as a result of the completion of the CSL III Merger, we succeeded to the obligations of CSL III under a senior secured revolving credit facility (as amended, the “CSL III SPV Credit Facility” and together with the Credit Facility, the “Credit Facilities”) previously entered into by CSL III SPV on September 30, 2022. On October 2, 2025, all outstanding borrowings of the CSL III SPV Credit Facility were repaid in full. Upon such repayment, the CSL III SPV Credit Facility was terminated and all commitments and obligations of the lenders were cancelled.
On December 30, 2019, we closed a private offering of $115.0 million in aggregate principal amount of 4.75% senior unsecured notes due December 31, 2024 and on December 11, 2020, we issued an additional $75.0 million aggregate principal amount of 4.50% senior unsecured notes due December 31, 2024 (together the “2024 Notes”). The 2024 Notes were repaid in full at maturity on December 31, 2024.
On November 20, 2023, we completed a public offering of $85.0 million in aggregate principal of 8.20% senior unsecured notes due December 1, 2028 (the “2028 Notes”). On December 1, 2025, we redeemed the 2028 Notes at a redemption price equal to 100% of the principal amount redeemed, plus accrued and unpaid interest otherwise payable for the then-current quarterly interest period accrued to, but excluding, the December 1, 2025 (the “Redemption Date”). In connection with the redemption, the 2028 Notes were delisted from the Nasdaq Global Select Market (“Nasdaq”).
On October 18, 2024, we completed a public offering of $300.0 million aggregate principal of 6.75% senior unsecured notes due February 18, 2030 (the “2030 Notes”). We may redeem the 2030 Notes in whole or in part at our option at any time or from time to time at a redemption price equal to the greater of (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the notes matured on January 18, 2030) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 45 basis points less (b) interest accrued to the date of redemption, or (2) 100% of the principal amount of the 2030 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to, but excluding, the redemption date. At any time on or after January 18, 2030, we may redeem the 2030 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding the redemption date.
On October 7, 2025, we completed a public offering of $300.0 million aggregate principal of 5.75% senior unsecured notes due February 15, 2031 (the “2031 Notes” and together with the 2024 Notes, 2028 Notes, and 2030 Notes, the “Senior Notes”). We may redeem the 2031 Notes, in whole or in part at our option at any time or from time to time, at a redemption price equal to the greater of (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the notes matured on January 15, 2031) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points, less (b) interest accrued to the date of redemption, or (2) 100% of the principal amount of the 2031 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to, but excluding, the redemption date. At any time on or after January 15, 2031, we may redeem the 2031 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date.
The following table details the carrying value of our Senior Notes as of December 31, 2025 and 2024:
As of December 31,
2025
2024
2028 Notes
$
—
$
85,000
2030 Notes
300,000
300,000
2031 Notes
300,000
—
Total principal amount
$
600,000
$
385,000
Less: unamortized debt issuance costs
(9,240)
(8,572)
Effective interest rate swap hedge
(1,184)
(6,700)
Total carrying value
$
589,576
$
369,728
Weighted average interest rate
6.84
%
6.95
%
In November 2023, in connection with the issuance of the 2028 Notes, we entered into a five-year interest rate swap agreement with Morgan Stanley Capital Services LLC (“Morgan Stanley”) to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $85.0 million, maturing on December 1, 2028. Morgan Stanley had the ability to exercise an early termination commencing on December 1, 2025, subject to providing written notice thirty days prior. Under the interest rate swap agreement, we received a fixed interest of 8.20% and paid a floating rate based on the compounded average daily SOFR rate plus 3.139%. We designated this interest rate swap agreement as a hedging instrument to the 2028 Notes. In connection with the redemption of the 2028 Notes, Morgan Stanley elected to exercise the early termination right, and the interest rate swap agreement was terminated effective December 1, 2025.
In October 2024, in connection with the issuance of the 2030 Notes, we entered into an interest rate swap agreement with JP Morgan Chase Bank N.A. (“JP Morgan”) to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $300.0 million, maturing on February 18, 2030. Under the interest rate agreement, commencing on the effective date of August 18, 2025, we receive a fixed interest rate of 6.75% and pay a floating interest rate based on the compounded average daily SOFR plus 3.235%. We designated this interest rate swap agreement as a hedging instrument to the 2030 Notes.
In October 2025, in connection with the issuance of the 2031 Notes, we entered into an interest rate swap agreement with JP Morgan to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $300.0 million, maturing on February 15, 2031. The interest rate swap agreement was executed on September 30, 2025 and became effective on October 7, 2025. Under the interest rate swap agreement, we receive a fixed interest rate of 5.75% and pay a floating interest rate based on the compounded average daily SOFR plus 2.312%. We designated this interest rate swap agreement as a hedging instrument to the 2031 Notes.
Securitizations
On June 26, 2015, we completed the 2015-1 Debt Securitization (as defined in Note 1, Organization, to the consolidated financial statements included in Part II, Item 8 of this Form 10-K), which was refinanced on August 30, 2018 (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the previously issued securitized notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes were issued by Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of us. The 2015-1R Notes were secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.
We received 100% of the $125,900 in nominal value of the non-interest bearing preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for our contribution to the 2015-1 Issuer of the initial closing date loan portfolio. Following the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer Preferred Interests were reduced by approximately $21,375 to approximately $104,525.
On July 2, 2024, we and the 2015-1 Issuer completed a refinancing of the 2015-1R Notes (the “2015-1R Refinancing”), which resulted in the issuance of a $410.0 million collateralized loan obligation (the “2015-1N Debt”). On the closing date of the 2015-1R Refinancing, the 2015-1 Issuer refinanced the 2015-1R Notes with the 2015-1N Debt, issued additional 2015-1 Issuer Preferred Interests to us in the aggregate notional amount of $13,500, increasing the 2015-1 Issuer Preferred Interests held by us to approximately $118,054 and extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to July 15, 2028 and July 1, 2036, respectively.
Following the 2015-1R Refinancing, we retained the 2015-1 Issuer Preferred Interests. The 2015-1N Debt in the 2015-1R Refinancing was issued by the 2015-1 Issuer and is secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. As of the closing date, we retained the $30.0 millionClass C-R Notes. The following table summarizes the terms of the 2015-1N Debt tranches and their principal amount:
As of
2015-1N Debt Tranche (1)
Credit Rating
Reference Rate
Spread
December 31, 2025
December 31, 2024
Class A-1-1-A Notes
AAA
SOFR
1.80%
$
240,000
$
240,000
Class A-L Loans
AAA
SOFR
1.80%
50,000
50,000
Class A-1-2-B Notes
AAA
SOFR
2.00%
20,000
20,000
Class A-2-RR Notes
AA
SOFR
2.15%
30,000
30,000
Class B-R Notes
Single A
SOFR
2.75%
40,000
40,000
Total Principal Amount Outstanding
$
380,000
$
380,000
Less: unamortized debt issuance costs
(2,026)
(2,218)
Total Carrying Value
$
377,974
$
377,782
Weighted average interest rate
5.84
%
6.59
%
(1)Excludes $30.0 million of Class C-R notes, which are rated BBB-, accrue interest at SOFR plus spread of 3.75%, and are retained by the Company.
On February 29, 2016, we and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, as amended from time to time, to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in our consolidated financial statements. Credit Fund is managed by a six-member board of managers, on which we and Credit Partners each have equal representation. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $175,000 each as of December 31, 2025, which was subsequently increased to $250.0 million each on February 11, 2026. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by us. By virtue of our respective membership interests, we and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Credit Fund primarily invests in first lien loans of middle market companies sourced primarily by us and our affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of us and Credit Partners. Therefore, although we own more than 25% of the voting securities of Credit Fund, we do not believe that we have control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (“Credit Fund Sub”), a Delaware limited liability company is a wholly owned subsidiary of Credit Fund and is consolidated in Credit Fund’s consolidated financial statements.
Since inception of Credit Fund and through December 31, 2025, we and Credit Partners each made capital contributions of $1 in members’ equity and $216,000 in subordinated loans to Credit Fund. On March 24, 2025, we and Credit Partners each received an aggregate return of capital on subordinated loans of $62,500. Since inception, we and Credit Partners each have received an aggregate return of capital on subordinated loans of $85,500. The cost and fair value of our investment in Credit Fund was $171,001 and $163,614, respectively, as of December 31, 2025 and $193,001 and $182,636, respectively, as of December 31, 2024.
Our share of the dividends declared by Credit Fund was $20,500 and $22,000 for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, our annualized dividend yield from Credit Fund was 15.3% and 11.4%, respectively. Below is a summary of Credit Fund’s portfolio as of December 31, 2025 and 2024:
As of December 31,
2025
2024
Senior secured loans(1)
$
978,828
$
547,672
Weighted average yields of senior secured loans based on amortized cost(2)
9.1
%
10.3
%
Weighted average yields of senior secured loans based on fair value(2)
9.1
%
10.5
%
Number of portfolio companies in Credit Fund
55
33
Average amount per portfolio company(1)
$
17,797
$
16,596
Number of loans on non-accrual status
2
2
Fair value of loans on non-accrual status
$
6,297
$
4,787
Percentage of loans at floating interest rates(3)(4)
100.0
%
100.0
%
Fair value of loans with PIK provisions
$
36,618
$
39,712
Percentage of portfolio with PIK provisions(4)
3.8
%
7.5
%
(1)At par/principal amount.
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2025 and 2024. Weighted average yield on debt at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount (“OID”) and market discount earned, divided by (b) total fair value included in such securities. Weighted average yield on debt at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned, divided by (b) total amortized cost included in such securities. Weighted average yields exclude investments on non-accrual status. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(3)Floating rate debt investments are generally subject to interest rate floors.
On December 23, 2025, we together with CARS, an affiliated BDC, and Sixth Street (collectively, the “SCP Members”), entered into an amended and restated limited liability company agreement, as amended from time to time, to co-manage Structured Credit Partners, a Delaware limited liability company that is not consolidated in our consolidated financial
statements. Structured Credit Partners is managed by a board consisting of eight members, on which each Member has equal representation. The SCP Members each hold 25% voting interests through non-economic Class A membership interests. Economic interests are based on funded capital contributions and capital commitments through Class B and Class C membership as follows:
Class B Capital Commitment
Class C Capital Commitment
Carlyle Secured Lending, Inc.
$
135,000
$
15,000
Carlyle Credit Solutions, Inc.
$
15,000
$
135,000
Sixth Street Lending Partners
$
50,000
$
50,000
Sixth Street Specialty Lending, Inc.
$
100,000
$
100,000
Funding of capital commitments generally requires board approval. In accordance with their respective economic interests, the SCP Members indirectly bear an allocable share of all expenses and other obligations of Structured Credit Partners.
Structured Credit Partners will invest in the equity and debt of financing subsidiaries that will act as warehouses for the acquisition of broadly syndicated loans and issue debt securities collateralized by such loans, with investment opportunities expected to be sourced primarily by affiliates of the SCP Members. Portfolio and investment decisions with respect to Structured Credit Partners must be unanimously approved by a quorum of Structured Credit Partners’ investment committee consisting of an equal number of representatives appointed by the Carlyle-affiliated SCP Members and the Sixth Street-affiliated SCP Members. Therefore, because we do not own more than 25% of the voting interests of Structured Credit Partners, we do not believe that we have control over Structured Credit Partners for accounting purposes or for purposes of the Investment Company Act.
As of December 31, 2025, Structured Credit Partners had not commenced operations, and no capital had been contributed to the joint venture.
The following table sets forth information regarding our consolidated results of operations for the years ended December 31, 2025 and 2024. For information regarding results of operations for the year ended December 31, 2023, see the Company’s Form 10-K for the fiscal year ended December 31, 2023.
Year Ended December 31,
2025 vs 2024
2025
2024
$
Investment income:
Interest income
$
205,589
$
171,581
$
34,008
PIK income
23,115
21,425
1,690
Dividend income
21,554
34,905
(13,351)
Other income
5,309
4,679
630
Total investment income
255,567
232,590
22,977
Expenses:
Base management fees
34,644
26,908
7,736
Incentive fees
21,076
21,647
(571)
Professional fees
3,761
3,048
713
Administrative service fees
1,841
1,589
252
Interest expense and credit facility fees
88,086
68,485
19,601
Directors’ fees and expenses
735
601
134
Other general and administrative
2,772
2,321
451
Excise tax expense
1,906
2,739
(833)
Total expenses
154,821
127,338
27,483
Net investment income (loss)
100,746
105,252
(4,506)
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments
(58,090)
(38,317)
(19,773)
Net realized currency gain (loss) on non-investment assets and liabilities
(815)
(1,436)
621
Net realized gain (loss) on forward currency contracts
313
—
313
Net change in unrealized appreciation (depreciation) on investments
39,195
18,345
20,850
Net change in unrealized currency gain (loss) on non-investment assets and liabilities
(9,680)
3,437
(13,117)
Net change in unrealized gain (loss) on forward currency contracts
(1,697)
1,697
(3,394)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments, non-investment assets and liabilities, and forward currency contracts
(30,774)
(16,274)
(14,500)
Net increase (decrease) in net assets resulting from operations
$
69,972
$
88,978
$
(19,006)
Investment Income
The increase in investment income for the year ended December 31, 2025 from the comparable period in 2024 was primarily driven by a higher average outstanding investment balance due to net investment activity in 2025, including assets acquired in the CSL III Merger and the Credit Fund II Purchase, partially offset by a lower weighted average yield on the portfolio. The size of the portfolio at amortized cost was $2,469,396, $1,848,212, and $2,049,975 as of December 31, 2025, December 31, 2024, and December 31, 2023, respectively. As of December 31, 2025, the weighted average yield of our total debt and income producing assets decreased to 10.1% from 11.7% as of December 31, 2024, based on amortized cost.
Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of December 31, 2025 and 2024, seven and four of our debt and preferred equity investments, respectively, were on non-accrual status. As of December 31, 2025 and 2024, non-accrual investments had a fair value of $30,541 and $10,393, which represented approximately 1.2% and 0.6% of total investments at fair value, respectively. The remaining income producing investments were performing and current on their interest payments as of December 31, 2025 and 2024.
The decrease in dividend income for the year ended December 31, 2025 from the comparable period in 2024 was primarily driven by a decrease in dividend income from Credit Fund II due to the Credit Fund II Purchase.
The increase in other income for the year ended December 31, 2025 from the comparable period in 2024 was primarily driven by an increase in prepayment fees and unused fees, partially offset by a decrease in amendment fees.
Expenses
The increase in interest expense and credit facility fees for the year ended December 31, 2025 from the comparable period in 2024 was primarily driven by a higher average outstanding debt balance, partially offset by a lower weighted average cost of debt due to lower base rates.
The increase in base management fees for the year ended December 31, 2025 from the comparable period in 2024 was driven by higher average gross assets as a result of the assets acquired in the CSL III Merger and the Credit Fund II Purchase during the year.
The decrease in incentive fees for the year ended December 31, 2025 from the comparable period in 2024 was driven by lower pre-incentive fee net investment income.
For the years ended December 31, 2025 and 2024, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2025 and 2024. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4, Related Party Transactions, to the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K for more information on our incentive and base management fees.
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation)
The amount of and number of investments with realized gain (loss) and change in appreciation (depreciation) for the years ended December 31, 2025 and 2024 were as follows:
Year Ended December 31,
2025
2024
Realized gains on investments
$
1,715
$
22,474
Number of investments with realized gains
37
20
Realized losses on investments
$
(59,805)
$
(60,791)
Number of investments with realized losses
30
17
Change in unrealized appreciation on investments
$
82,039
$
69,673
Number of investments with unrealized appreciation
111
105
Change in unrealized depreciation on investments
$
(42,844)
$
(51,328)
Number of investments with unrealized depreciation
131
111
Net realized gain (loss) on investments during the year ended December 31, 2025 was primary driven by a net realized loss related to the restructuring of our investments in Aimbridge Acquisition Co., Inc. and Align Precision Group, LLC (formerly known as Maverick Acquisition, Inc.), the sale of Comar Holding Company, LLC, the consolidation of our investment in Credit Fund II as a result of the Credit Fund II Purchase, and the sale of our investment in iRobot Corporation.
The net change in unrealized appreciation (depreciation) is driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.
For the three months ended December 31, 2025 and September 30, 2025
The following table sets forth information regarding our consolidated results of operations for the three months ended December 31, 2025 and September 30, 2025:
Three Months Ended
Change
December 31, 2025
September 30, 2025
$
Investment income:
Interest income
$
54,638
$
53,330
$
1,308
PIK income
6,083
6,464
(381)
Dividend income
5,000
5,000
—
Other income
1,192
1,715
(523)
Total investment income
66,913
66,509
404
Expenses:
Base management fees
9,231
9,139
92
Incentive fees
5,130
5,612
(482)
Professional fees
1,253
778
475
Administrative service fees
425
512
(87)
Interest expense and credit facility fees
25,450
22,306
3,144
Directors’ fees and expenses
208
191
17
Other general and administrative
838
632
206
Excise tax expense
350
500
(150)
Total expenses
42,885
39,670
3,215
Net investment income (loss)
24,028
26,839
(2,811)
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments
(19,777)
(16,427)
(3,350)
Net realized currency gain (loss) on non-investment assets and liabilities
(470)
22
(492)
Net change in unrealized appreciation (depreciation) on investments
14,087
11,923
2,164
Net change in unrealized currency gain (loss) on non-investment assets and liabilities
(483)
1,546
(2,029)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities
(6,643)
(2,936)
(3,707)
Net increase (decrease) in net assets resulting from operations
$
17,385
$
23,903
$
(6,518)
Investment Income
The increase in investment income for the three months ended December 31, 2025, as compared to the three months ended September 30, 2025, was primarily driven by a higher average outstanding investment balance due to net investment activity in the fourth quarter of 2025, partially offset by a lower weighted average yield on the portfolio. As of December 31, 2025, the size of our portfolio increased to $2,469,396 from $2,442,191 as of September 30, 2025, at amortized cost. As of December 31, 2025 and September 30, 2025, the weighted average yield of our total debt and income producing investments was 10.1% and 10.6%, respectively, based on amortized cost.
Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of December 31, 2025 and September 30, 2025, sevenand six of our debt and preferred equity investments, respectively, were on non-accrual status. As of December 31, 2025 and September 30, 2025, non-accrual investments had a fair value of $30,541 and $23,508, which represented approximately 1.2% and 1.0% of total investments at fair value, respectively. The remaining income producing investments were performing and current on their interest payments as of December 31, 2025 and September 30, 2025.
The decrease in other income for the three months ended December 31, 2025, compared to the three months ended September 30, 2025, was primarily driven by a decrease in prepayment fees, offset by an increase in amendment fees.
Expenses
The increase in interest expense and credit facility fees was primarily driven by the acceleration of debt issuance costs as a result of the redemption of the 2028 Notes and a higher average outstanding debt balance, partially offset by a lower weighted average cost of debt after accounting for the repayment of CSL III SPV Credit Facility and the 2028 Notes during the three months ended December 31, 2025.
The increase in base management fees was driven by higher average gross assets for the three months ended December 31, 2025 compared to the three months ended September 30, 2025.
The decrease in incentive fees was driven by lower pre-incentive fee net investment income for the three months ended December 31, 2025 compared to the three months ended September 30, 2025.
For the three months ended December 31, 2025, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2025. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4, Related Party Transactions, to the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K for more information on the incentive and base management fees.
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation)
The amount of and number of investments with realized gain (loss) and change in unrealized appreciation (depreciation) for the three months ended December 31, 2025 and September 30, 2025 were as follows:
Three Months Ended
December 31, 2025
September 30, 2025
Realized gains on investments
$
424
$
206
Number of investments with realized gains
12
13
Realized losses on investments
$
(20,201)
$
(16,633)
Number of investments with realized losses
12
8
Change in unrealized appreciation on investments
$
30,489
$
30,483
Number of investments with unrealized appreciation
93
117
Change in unrealized depreciation on investments
$
(16,402)
$
(18,560)
Number of investments with unrealized depreciation
120
84
During the three months ended December 31, 2025, we recognized a realized net loss related to the sale of Comar Holding Company, LLC and the sale of our investment in iRobot Corporation. During the three months ended September 30, 2025, we recognized a realized net loss related to the restructuring of Align Precision Group, LLC (formerly known as Maverick Acquisition, Inc.).
The net change in unrealized appreciation (depreciation) is driven by changes in various inputs used in our valuation methodology, including but not limited to enterprise value multiples, borrower leverage ratios, borrower ratings, and the impact of exits.
Financial Condition, Liquidity and Capital Resources
Capitalization
We have capitalized our business to date primarily through the issuance and sale of our common stock, asset-level financing, and the issuance of unsecured senior debt. As of December 31, 2025, we had $1,543,660 of outstanding consolidated indebtedness under the Credit Facility, the 2015-1N Debt, the 2030 Notes, and the 2031 Notes as previously discussed within Portfolio and Investment Activity - Portfolio Financing. As of December 31, 2025, we had $472,833 of liquidity that can be used to satisfy our short-term cash requirements and working capital for our business. As of December 31, 2025 and December 31, 2024, the statutory debt to equity ratio was 1.32x and 1.20x, respectively. Refer to Note 9, Borrowings, to the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K for additional information regarding our financing.
Sources of Liquidity
Our primary sources of liquidity include cash and cash equivalents and available borrowings under our Credit Facility.
As of
December 31, 2025
December 31, 2024
Cash, cash equivalents and restricted cash
$
76,493
$
56,575
Available borrowings under Credit Facility
396,340
509,121
Total Liquidity
$
472,833
$
565,696
We generate cash from cash flows from operations, including investment sales and repayments, income earned on investments and cash equivalents, and through the net proceeds of offerings of our common stock sold through our at-the-market program. We may also fund a portion of our investments through borrowings under the Credit Facility, the issuance of debt, and through securitization of a portion of our existing investments. The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders, repurchases of our common stock and for other general corporate purposes. We believe our current cash position, available capacity on our Credit Facility, which is well in excess of our unfunded commitments, and net cash provided by operating activities will provide us with sufficient resources to meet our obligations and continue to support our investment objectives, including reserving for the capital needs which may arise at our portfolio companies.
Liquidity Needs
Our primary liquidity needs include our funding of new and existing portfolio investments, payment of operating expenses and interest and principal payments under the Credit Facility, the 2015-1N Debt, the 2030 Notes, and the 2031 Notes. From time to time, we may also repurchase our outstanding debt or shares of our common stock.
Contractual Obligations and Contingencies
In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made for any such exposure in the consolidated financial statements as of December 31, 2025 and December 31, 2024, included in Part II, Item 8 of this Form 10-K.
We have in the past, currently are and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments. We had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of December 31, 2025 and 2024:
Pursuant to an undertaking by us in connection with the 2015-1 Debt Securitization, we agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remains outstanding. As of December 31, 2025 and December 31, 2024, we were in compliance with this undertaking.
Cash Flows
The following table details the net change in our cash and cash equivalents:
Year Ended December 31,
2025
2024
Cash flows provided by (used in) operating activities
$
(204,560)
$
104,265
Cash flows provided by (used in) financing activities
224,478
(108,137)
Net increase (decrease) in cash, cash equivalents and restricted cash
$
19,918
$
(3,872)
During the year ended December 31, 2025, we paid $1,332,102 related to cost of investments purchased and received $997,546 in proceeds from sales and repayments on our investments. During the year ended December 31, 2025, we had net borrowings of $134,562 on our Credit Facilities, issued $300,000 aggregate principal amount of 2031 Notes, redeemed all issued and outstanding 2028 Notes for $85,000, and paid $104,038 of dividends in cash.
Asset Coverage
In accordance with the Investment Company Act, a BDC is only allowed to borrow amounts such that its “asset coverage,” as defined in the Investment Company Act, satisfies the minimum asset coverage ratio specified in the Investment Company Act after such borrowing. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock.
Prior to March 23, 2018, BDCs were required to maintain a minimum asset coverage ratio of 200%. On March 23, 2018, an amendment to Section 61(a) of the Investment Company Act was signed into law to permit BDCs to reduce the minimum asset coverage ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. Under the 200% minimum asset coverage ratio, BDCs are permitted to borrow up to one dollar for investment purposes for every one dollar of investor equity, and under the 150% minimum asset coverage ratio, BDCs are permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity. In other words, Section 61(a) of the Investment Company Act, as amended, permits BDCs to potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1.
On April 9, 2018 and June 6, 2018, the Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and the stockholders of the Company, respectively, approved the application to the Company of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the Investment Company Act, as amended. As a result, the minimum asset coverage ratio applicable to the Company was reduced from 200% to 150%, effective as of June 7, 2018.
As of December 31, 2025 and 2024, the Company had total senior securities of $1,543,660 and $1,028,439, respectively, consisting of secured borrowings under the Credit Facility, the 2030 Notes, the 2031 Notes, the 2015-1N Debt, and, as of December 31, 2024 only, the Preferred Stock and the 2028 Notes, and had asset coverage ratios of 175.6% and 183.2%, respectively. For a discussion of the principal risk factors associated with these senior securities, see Part I, Item 1A of this Form 10‑K “Risk Factors”. For the purposes of the asset coverage ratio as of December 31, 2024, the Preferred Stock was classified as a senior security.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and judgments are based on historical information, information currently available to us and on various other assumptions management believes to be reasonable under the circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations. Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. We believe the critical accounting policies discussed below affect our more
significant judgments and estimates used in the preparation of our consolidated financial statements and should be read in conjunction with our consolidated financial statements and related notes in Part II, Item 8, as well as with our “Risk Factors” included in Part I, Item 1A of this Form 10-K.
Fair Value Measurements
The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained, or alternative pricing sources may be utilized, including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid, or for which the pricing source does not provide a valuation or methodology, or provides a valuation or methodology that, in the judgment of the Investment Adviser, does not represent fair value, shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of personnel of Investment Adviser; and (iii) the Investment Adviser engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
•the nature and realizable value of any collateral;
•call features, put features and other relevant terms of debt;
•the portfolio company’s leverage and ability to make payments;
•the portfolio company’s public or private credit rating;
•the portfolio company’s actual and expected earnings and discounted cash flow;
•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
•the markets in which the portfolio company does business and recent economic and/or market events; and
•comparisons to comparable transactions and publicly traded securities.
Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date, which, in many cases, may reflect a lag in information.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of December 31, 2025 and 2024 included in Part II, Item 8 of this Form 10-K.
U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
For further information on the fair value measurements, including the fair value hierarchies, our framework for determining fair value, and the composition of our portfolio, see Note 3, Fair Value Measurements to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment at the time of exit using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments written off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the Consolidated Statements of Operations included in Part II, Item 8 of this Form 10-K reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Revenue Recognition - Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are current or there is no longer any reasonable doubt that such principal or interest will be collected in full and, in management’s judgment, are likely to remain current. Management may determine not to place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.
The SPV, 2015-1 Issuer, CSL III SPV, and Credit Fund II are disregarded entities for tax purposes and are consolidated with the tax return of the Company.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.
Valuation Risk
Our investments generally do not have a readily available market price. The Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, values our investments for which market quotations are not readily available in good faith at fair value in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. In addition, because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.
Interest Rate Risk
As of December 31, 2025, on a fair value basis, approximately 99.4% of our debt investments bear interest at floating rates, which primarily are subject to interest rate floors. The Credit Facility and the 2015-1N Debt are also subject to floating interest rates and are primarily paid based on floating SOFR rates. The 2028 Notes, which bear a fixed rate, were hedged by entering into fixed to floating interest rate swaps, in order to align the interest rates of our liabilities in our investment portfolio. In addition, commencing on August 18, 2025, the 2030 Notes, and commencing on October 7, 2025, the 2031 Notes, each which bear fixed rates, were hedged through fixed to floating interest rate swaps, in order to align the interest rates of our liabilities in our investment portfolio.
Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.
The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. These hypothetical interest income calculations are based on a model of the settled debt investments in our portfolio, excluding structured finance obligations and our investments in Credit Fund and Credit Fund II, held as of December 31, 2025 and 2024, and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings and notes payable as of December 31, 2025 and 2024 and based on the terms of our Credit Facility and notes payable. Interest expense on our credit facilities and notes payable is calculated using the stated interest rate as of December 31, 2025 and 2024, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may significantly impact our net interest income.
We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.
Based on our Consolidated Statements of Assets and Liabilities as of December 31, 2025 and 2024, the following table shows the annual impact on net investment income of base rate changes in interest rates for our settled debt investments (considering interest rate floors for variable rate instruments), excluding our investments in Credit Fund and Credit Fund II, and outstanding secured borrowings and notes payable assuming no changes in our investment and borrowing structure:
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Carlyle Secured Lending, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of assets and liabilities of Carlyle Secured Lending, Inc. (the “Company”), including the consolidated schedules of investments, as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Companyat December 31, 2025 and 2024, and the results of its operations, changes in its net assets, and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 24, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 2025 and 2024, by correspondence with the custodian, debt agents, and the underlying investees; when replies were not received from the debt agents and the underlying investees, we performed other auditing procedures.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Valuation of investments using significant unobservable inputs
Description of the Matter
At December 31, 2025, the fair value of the Company's investments categorized in Level III of the fair value hierarchy (Level III investments) totaled $2.464 billion. As discussed in Note 3 to the consolidated financial statements (Note 3), management determined the fair value of the Company’s Level III investments by using valuation techniques such as discounted cash flow analyses, consensus pricing, and market and income approaches and using inputs which were significant to the valuation of these investments, such as observable market inputs, updated credit statistics, and significant unobservable inputs (significant inputs). The significant unobservable inputs used to determine fair value required significant management judgment or estimation and, as disclosed in Note 3, included discount rates, comparable multiples, recovery rates, default rates, and indicative quotes.
Auditing the fair value of the Company's Level III investments was complex and judgmental due to the valuation techniques and significant unobservable inputs used by the Company to determine fair value.
How We Addressed the Matter in our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's investment valuation process. This included controls over management’s assessment of the valuation techniques and significant inputs used by management to determine the fair value measurements. To test the valuation of the Company’s Level III investments, our audit procedures included, among others, evaluating the valuation techniques and significant inputs used by the Company. For each Level III investment, we gained an understanding of the valuation technique(s) and significant inputs used to value the investment and reviewed the information considered by the Company’s valuation designee, under the oversight of the Board of Directors, relating to the valuation. Our procedures also included testing, for a sample of Level III investments, significant inputs and the mathematical accuracy of the Company's valuation models. For example, we compared market spreads, market value (EBITDA) multiples of publicly traded comparable companies, available precedent sales transactions of comparable companies, default rates and recovery rates to information available from third-party market research providers. We also compared certain of the significant inputs to underlying sources like public and private credit ratings and the most recently available portfolio company financial statements and compliance certificates provided by management. To evaluate the reasonableness of the unobservable inputs, we assessed whether these inputs were developed in a manner consistent with the Company’s valuation policies and in some instances, with the assistance of our valuation specialists, we independently developed fair value estimates using portfolio company and market information and compared them to the Company's estimates. We searched for and evaluated information that corroborated or contradicted the Company's significant inputs. We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the Company's year-end valuations.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2012.
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Carlyle Secured Lending, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Carlyle Secured Lending, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Carlyle Secured Lending, Inc. (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of assets and liabilities of the Company, including the consolidated schedules of investments, as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 24, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
(amounts in thousands, except share and per share data)
December 31, 2025
December 31, 2024
ASSETS
Investments, at fair value
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $2,202,028 and $1,510,256, respectively)
$
2,197,244
$
1,485,049
Investments—non-controlled/affiliated, at fair value (amortized cost of $96,367 and $66,859, respectively)
103,064
71,861
Investments—controlled/affiliated, at fair value (amortized cost of $171,001 and $271,097, respectively)
163,614
246,633
Total investments, at fair value (amortized cost of $2,469,396 and $1,848,212, respectively)
2,463,922
1,803,543
Cash, cash equivalents and restricted cash
76,493
56,575
Receivable for investments sold
214,757
25,407
Interest and dividend receivable
24,678
32,436
Derivative assets, at fair value (Note 8)
298
1,863
Prepaid expenses and other assets
10,019
6,169
Total assets
$
2,790,167
$
1,925,993
LIABILITIES
Debt and secured borrowings (Note 9)
$
1,531,210
$
960,949
Payable for investments purchased
21,547
1,353
Interest and credit facility fees payable (Note 9)
19,092
10,853
Dividend payable (Note 11)
28,723
22,908
Base management and incentive fees payable (Note 4)
14,360
11,908
Administrative service fees payable (Note 4)
1,261
885
Derivative liabilities, at fair value (Note 8)
1,436
6,875
Other accrued expenses and liabilities
5,150
5,058
Total liabilities
1,622,779
1,020,789
Commitments and contingencies (Notes 10 and 14)
NET ASSETS
Cumulative convertible preferred stock, $0.01 par value; 0 and 2,000,000 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively
—
50,000
Common stock, $0.01 par value; 198,000,000 shares authorized; 71,807,190 and 50,906,262 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively
718
509
Paid-in capital in excess of par value
1,363,998
1,014,308
Offering costs
(1,633)
(1,633)
Total distributable earnings (loss)
(195,695)
(157,980)
Total net assets
$
1,167,388
$
905,204
NET ASSETS PER COMMON SHARE
$
16.26
$
16.80
The accompanying notes are an integral part of these consolidated financial statements.
(amounts in thousands, except share and per share data)
Year Ended December 31,
2025
2024
2023
Investment income:
From non-controlled/non-affiliated investments:
Interest income
$
200,471
$
164,221
$
177,315
PIK income
21,385
20,733
19,819
Other income
5,301
4,671
4,995
Total investment income from non-controlled/non-affiliated investments
227,157
189,625
202,129
From non-controlled/affiliated investments:
Interest income
5,008
7,360
5,713
PIK income
1,730
692
672
Other income
8
8
8
Total investment income from non-controlled/affiliated investments
6,746
8,060
6,393
From controlled/affiliated investments:
Interest income
110
—
—
Dividend income
21,554
34,905
33,104
Total investment income from controlled/affiliated investments
21,664
34,905
33,104
Total investment income
255,567
232,590
241,626
Expenses:
Base management fees (Note 4)
34,644
26,908
28,515
Incentive fees (Note 4)
21,076
21,647
22,622
Professional fees
3,761
3,048
2,688
Administrative service fees (Note 4)
1,841
1,589
1,280
Interest expense and credit facility fees (Note 9)
88,086
68,485
71,711
Directors’ fees and expenses
735
601
444
Other general and administrative
2,772
2,321
1,960
Total expenses
152,915
124,599
129,220
Net investment income (loss) before taxes
102,652
107,991
112,406
Excise tax expense
1,906
2,739
2,435
Net investment income (loss)
100,746
105,252
109,971
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments:
Non-controlled/non-affiliated investments
(43,588)
(42,330)
(21,426)
Non-controlled/affiliated investments
—
4,013
—
Controlled/affiliated investments
(14,502)
—
188
Net realized currency gain (loss) on non-investment assets and liabilities
(815)
(1,436)
385
Net realized gain (loss) on forward currency contracts
313
—
—
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliated investments
20,423
22,434
15,123
Non-controlled/affiliated investments
1,695
(1,343)
5,604
Controlled/affiliated investments
17,077
(2,746)
(13,643)
Net change in unrealized currency gain (loss) on non-investment assets and liabilities
(9,680)
3,437
(3,922)
Net change in unrealized gain (loss) on forward currency contracts
(1,697)
1,697
—
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments, non-investment assets and liabilities, and forward currency contracts
(30,774)
(16,274)
(17,691)
Net increase (decrease) in net assets resulting from operations
Net increase (decrease) in cash, cash equivalents and restricted cash
$
19,918
$
(3,872)
$
29,941
Cash, cash equivalents and restricted cash, beginning of year
56,575
60,447
30,506
Cash, cash equivalents and restricted cash, end of year
$
76,493
$
56,575
$
60,447
Supplemental disclosures:
Interest and credit facility fees paid during the year
$
77,327
$
63,627
$
68,357
Taxes, including excise tax, paid during the year
$
2,726
$
2,432
$
1,839
Dividends declared on preferred and common stock during the year
$
110,802
$
98,589
$
92,898
Dividends reinvested during the year
$
949
$
2,003
$
—
Supplemental disclosures of non-cash financing activities:
Common stock issued in Preferred Stock Exchange
$
50,000
$
—
$
—
Acquisition of CSL III(1)
Non-cash assets acquired:
Investments, at fair value
$
483,736
$
—
$
—
Interest receivable
7,909
—
—
Other assets
9,907
—
—
Total non-cash assets acquired
$
501,552
$
—
$
—
Liabilities assumed:
Debt
$
206,000
$
—
$
—
Interest payable
2,666
—
—
Incentive fee payable
1,413
—
—
Derivative liabilities, at fair value
812
—
—
Other liabilities
12,839
—
—
Total liabilities assumed
$
223,730
$
—
$
—
Issuance of common stock pursuant to CSL III Merger
$
315,838
$
—
$
—
Merger costs capitalized into purchase price
$
1,650
$
—
$
—
Acquisition of Credit Fund II(2)
Non-cash assets acquired:
Investments, at fair value
$
191,097
$
—
$
—
Interest receivable
2,737
—
—
Total non-cash assets acquired
$
193,834
$
—
$
—
Liabilities assumed:
Other liabilities
$
227
$
—
$
—
Total liabilities assumed:
$
227
$
—
$
—
Consolidation of investments in Credit Fund II
$
193,614
$
—
$
—
Transaction costs capitalized into purchase price
$
103
$
—
$
—
(1)Refer to Note 16, Merger with CSL III, to these consolidated financial statements for details of the CSL III Merger.
(2)Refer to Note 6, Middle Market Credit Fund II, to these consolidated financial statements for details of the Credit Fund II Purchase.
The accompanying notes are an integral part of these consolidated financial statements.
95
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
First Lien Debt (80.8% of fair value)
1251 Insurance Distribution Platform Payco, LP
(a) (b)
(2)(3)(15)
Diversified Financial Services
SOFR
4.50%
8.18%
3/31/2025
3/31/2031
$
20,145
$
19,938
$
19,912
1.70
%
AAH Topco., LLC
(a)
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
5.00%
8.72%
3/31/2025
12/31/2027
2,242
2,173
2,200
0.19
AArete Investment, LLC
(a) (b)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.25%
7.92%
6/5/2025
6/5/2031
3,304
3,238
3,274
0.28
Addev Group (France)
(a)
(2)(7)(15)
Chemicals, Plastics & Rubber
EURIBOR
5.75%
7.77%
10/28/2025
10/28/2032
€
259
293
295
0.03
ADPD Holdings, LLC
(a) (c)
(2)(3)(11)
Consumer Services
SOFR
6.00%
9.80%
8/16/2022
8/16/2028
21,287
20,487
19,104
1.64
Advanced Web Technologies Holding Company
(a) (b)
(2)(3)(15)
Containers, Packaging & Glass
SOFR
4.25%, 2.25% PIK
10.33%
12/17/2020
12/17/2027
15,693
15,584
15,488
1.33
AGS Health BCP LLC
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.50%
8.32%
7/31/2025
7/31/2032
—
(11)
15
0.00
AI Grace AUS Bidco Pty LTD (Australia)
(b)(c)
(2)(3)(7)
Consumer Goods: Non-Durable
SOFR
5.25%
9.01%
12/5/2023
12/5/2029
4,571
4,507
4,537
0.39
Allied Benefit Systems Intermediate LLC
(a) (b)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.00%
8.73%
10/31/2023
10/31/2030
36,631
36,571
36,401
3.12
Alpine Acquisition Corp II
(a) (c)
(2)(3)(8)(15)
Transportation: Cargo
SOFR
6.00%
9.65%
4/19/2022
11/30/2029
23,667
19,680
10,301
0.88
AmpersCap LLC
(a)
(2)(3)(7)(15)
Diversified Financial Services
SOFR
5.25%
8.92%
12/17/2024
12/17/2032
8,852
8,681
8,664
0.74
AP Plastics Acquisition Holdings, LLC
(a)
(2)(3)(15)
Chemicals, Plastics & Rubber
SOFR
4.75%
8.58%
3/28/2025
8/10/2030
9,452
9,413
9,440
0.81
Apex Companies Holdings, LLC
(a) (b)(c)
(2)(3)(15)
Environmental Industries
SOFR
5.00%
8.82%
1/31/2023
1/31/2028
19,448
19,328
19,259
1.65
Applied Technical Services, LLC
(a) (b)
(2)(3)(15)
Business Services
SOFR
5.25%
8.92%
4/8/2025
4/8/2031
18,329
18,117
18,137
1.55
Artifact Bidco, Inc.
(a)
(2)(3)(15)
Software
SOFR
4.15%
7.82%
7/26/2024
7/26/2031
1,409
1,397
1,409
0.12
Ascend Buyer, LLC
(a) (b)(c)
(2)(3)(15)
Containers, Packaging & Glass
SOFR
5.25%
8.92%
9/30/2021
9/30/2028
28,863
28,880
28,783
2.47
Associations, Inc.
(a) (b)
(2)(3)(11)(15)
Construction & Building
SOFR
6.50%
10.40%
5/3/2024
7/2/2028
20,060
20,102
20,171
1.73
Athlete Buyer, LLC
(a) (b)(c)
(2)(3)(11)(15)
Construction & Building
SOFR
6.00%
9.67%
3/29/2024
4/26/2029
14,724
14,516
12,931
1.11
Atlas US Finco, Inc.
(a) (b)
(2)(3)(7)(15)
High Tech Industries
SOFR
4.75%
8.61%
12/15/2022
12/12/2029
5,220
5,138
5,225
0.45
Auditboard, Inc.
(a) (c)
(2)(3)(15)
Software
SOFR
4.50%
8.19%
7/12/2024
7/12/2031
13,286
13,179
13,272
1.14
Auditboard, Inc.
(a)
(2)(3)
Software
SOFR
4.50%
8.24%
12/10/2025
7/12/2031
3,143
3,119
3,141
0.27
Azurite Intermediate Holdings, Inc.
(a) (b)(c)
(2)(3)(15)
Software
SOFR
6.00%
9.72%
3/19/2024
3/19/2031
7,870
7,898
7,914
0.68
Bamboo Health Holdings, LLC
(a) (b)
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
4.75%
8.47%
5/6/2021
5/6/2028
28,361
28,187
28,526
2.44
96
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Barnes & Noble, Inc.
(a) (b)
(2)(3)(10)(11)
Retail
SOFR
7.16%
10.88%
5/7/2025
5/7/2030
$
16,216
$
15,884
$
16,011
1.37
%
Bayside OPCP, LLC
(a)
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
7.00%
10.65%
5/31/2023
5/31/2026
—
—
—
—
Bayside OPCP, LLC
(a)
(2)(3)(11)
Healthcare & Pharmaceuticals
SOFR
7.25%
10.92%
5/31/2023
5/31/2026
4,862
4,862
4,862
0.42
Bayside OPCP, LLC
(a)
(2)(3)(11)
Healthcare & Pharmaceuticals
SOFR
7.25%
10.92%
5/31/2023
5/31/2026
13,743
13,743
13,743
1.18
Bianalisi S.p.A. (Italy)
(a)
(2)(7)(15)
Healthcare & Pharmaceuticals
EURIBOR
6.00%
8.02%
2/26/2025
2/26/2032
€
15,524
16,437
17,837
1.53
Big Bus Tours Group Limited (United Kingdom)
(a) (c)
(2)(7)
Leisure Products & Services
EURIBOR
8.10%, 0.50% PIK
10.67%
6/4/2024
6/4/2031
€
6,778
7,190
7,746
0.66
Big Bus Tours Group Limited (United Kingdom)
(a) (c)
(2)(7)
Leisure Products & Services
EURIBOR
8.10%, 0.50% PIK
10.67%
7/17/2025
6/4/2031
€
464
538
530
0.04
Big Bus Tours Group Limited (United Kingdom)
(a) (c)
(2)(7)(15)
Leisure Products & Services
SOFR
8.10%, 0.50% PIK
12.44%
6/4/2024
6/4/2031
605
574
569
0.05
Big Bus Tours Group Limited (United Kingdom)
(b)(c)
(2)(7)
Leisure Products & Services
SOFR
8.10%, 0.50% PIK
12.44%
6/4/2024
6/4/2031
10,960
10,700
10,658
0.91
Bingo Group Buyer, Inc.
(a) (b)(c)
(2)(3)(15)
Environmental Industries
SOFR
4.75%
8.48%
7/10/2024
7/10/2031
8,990
8,900
8,872
0.76
Birsa S.p.A. (Italy)
(a)
(2)(7)(15)
Healthcare & Pharmaceuticals
EURIBOR
5.25%
7.27%
7/2/2024
6/30/2031
€
8,882
9,399
10,257
0.88
BlueCat Networks, Inc. (Canada)
(a) (b)(c)
(2)(3)(7)
High Tech Industries
SOFR
5.75%
9.48%
8/8/2022
8/8/2028
19,344
19,189
18,913
1.62
BMS Holdings III Corp.
(a)(b)
(2)(3)(11)
Construction & Building
SOFR
5.50%
9.17%
9/30/2019
9/30/2026
7,828
7,760
7,317
0.63
Businessolver.com, Inc.
(a)
(2)(3)(15)
Business Services
SOFR
4.50%
8.17%
12/3/2025
12/3/2032
—
(20)
(20)
—
Celerion Buyer, Inc.
(a) (b)(c)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.00%
8.89%
11/3/2022
11/3/2029
22,165
22,072
22,051
1.89
CircusTrix Holdings, LLC
(a) (b)
(2)(3)(15)
Leisure Products & Services
SOFR
6.75%
10.47%
7/18/2023
7/14/2028
14,213
14,003
14,128
1.21
Cliffwater LLC
(a)
(2)(3)(7)(15)
Diversified Financial Services
SOFR
4.75%
8.72%
4/22/2025
4/22/2032
11,324
11,187
11,313
0.97
CoreWeave Compute Acquisition Co. II, LLC
(a)
(2)(3)
High Tech Industries
SOFR
9.62%
13.41%
7/30/2023
7/30/2028
2,189
2,184
2,211
0.19
CoreWeave Compute Acquisition Co. IV, LLC
(a)
(2)
High Tech Industries
SOFR
6.00%
9.83%
5/22/2024
5/22/2029
26,511
26,221
26,181
2.24
Cority Software Inc. (Canada)
(a)
(2)(3)(7)(15)
Software
SOFR
4.50%
8.34%
10/31/2025
10/31/2032
34,617
34,428
34,424
2.95
Cornerstone Building Brands, Inc.
(a) (c)
(2)(3)
Construction & Building
SOFR
5.63%
9.38%
1/29/2025
8/1/2028
7,876
7,541
6,183
0.53
Cornerstone Building Brands, Inc.
(a)
(2)(3)
Construction & Building
SOFR
4.50%
8.25%
2/18/2025
5/15/2031
3,128
2,851
2,200
0.19
Coupa Holdings, LLC
(a) (b)
(2)(3)(15)
Software
SOFR
5.25%
9.34%
2/27/2023
2/28/2030
10,635
10,500
10,698
0.92
97
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
CST Holding Company
(a) (c)
(2)(3)(11)(15)
Consumer Goods: Non-Durable
SOFR
5.00%
8.72%
11/1/2022
11/1/2028
$
—
$
(6)
$
5
—
%
Dance Midco S.a.r.l. (United Kingdom)
(a) (c)
(2)(7)(15)
Media: Diversified & Production
EURIBOR
5.00%
7.06%
10/25/2024
10/25/2031
€
11,625
12,388
13,500
1.16
DCA Investment Holding LLC
(a)
(2)(3)(8)
Healthcare & Pharmaceuticals
SOFR
6.41%
10.06%
3/11/2021
4/3/2028
13,993
13,916
12,255
1.05
Deerfield Dakota Holding, LLC
(a)
(2)(3)(15)
Diversified Financial Services
SOFR
3.00%, 2.75% PIK
9.42%
9/12/2025
9/12/2032
25,963
25,675
25,658
2.20
Denali Intermediate Holdings, Inc.
(a)
(2)(3)(15)
Media: Broadcasting & Subscription
SOFR
5.50%
9.23%
8/26/2025
8/26/2032
—
(14)
(14)
0.00
Denali Midco 2, LLC
(a) (b)(c)
(2)(3)
Consumer Services
SOFR
5.25%
8.97%
9/15/2022
12/22/2028
16,881
16,764
16,782
1.44
Diligent Corporation
(a) (b)
(2)(3)(15)
Telecommunications
SOFR
5.00%
8.82%
8/4/2020
8/4/2030
8,032
8,090
7,886
0.68
Divisions Holding Corporation
(a)
(2)(3)(15)
Business Services
SOFR
4.50%
8.17%
4/17/2025
4/17/2032
—
(21)
16
0.00
Dwyer Instruments, Inc.
(a) (b)(c)
(2)(3)(15)
Capital Equipment
SOFR
4.75%
8.43%
7/21/2021
7/21/2029
26,426
26,360
26,426
2.26
Einstein Parent, Inc.
(a) (c)
(2)(3)(15)
Software
SOFR
6.50%
10.36%
1/22/2025
1/22/2031
30,371
29,678
30,019
2.57
Eliassen Group, LLC
(a) (b)(c)
(2)(3)
Business Services
SOFR
5.75%
9.42%
4/14/2022
4/14/2028
10,712
10,615
10,439
0.89
Ellkay, LLC
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
3.25%, 3.50% PIK
10.60%
5/14/2025
9/14/2030
34,933
34,601
34,678
2.97
Embark Intermediate Holdings, LLC
(a)
(2)(3)(15)
Business Services
SOFR
4.50%
8.22%
9/2/2025
9/2/2032
1,995
1,957
1,956
0.17
Enkindle Limited (United Kingdom)
(a)
(2)(3)(7)(15)
Diversified Financial Services
SONIA
3.75%, 3.50% PIK
11.22%
4/16/2025
4/16/2031
£
1,556
1,871
2,023
0.17
Enkindle Limited (United Kingdom)
(a)
(2)(3)(7)(10)
Diversified Financial Services
SONIA
3.88%, 4.43% PIK
12.28%
4/16/2025
4/16/2031
£
4,128
5,312
5,453
0.47
Enverus, Inc.
(a)
(2)(3)(15)
Energy: Oil & Gas
SOFR
4.50%
8.19%
12/18/2025
12/18/2032
—
(15)
(16)
—
Espresso Bidco Inc.
(a)
(2)(3)(15)
Software
SOFR
2.63%, 3.13% PIK
9.42%
3/25/2025
3/25/2032
21,780
21,394
21,740
1.86
Essential Services Holding Corporation
(a) (c)
(2)(3)(15)
Consumer Services
SOFR
5.00%
8.88%
6/17/2024
6/17/2031
1,591
1,585
1,585
0.14
Excel Fitness Holdings, Inc.
(a) (c)
(2)(3)(15)
Leisure Products & Services
SOFR
4.75%
8.48%
4/29/2022
4/29/2030
816
806
810
0.07
Excel Fitness Holdings, Inc.
(a) (b)(c)
(2)(3)(15)
Leisure Products & Services
SOFR
4.75%
8.42%
5/13/2024
4/29/2030
13,375
13,290
13,308
1.14
Excelitas Technologies Corp.
(a) (c)
(2)(3)
Capital Equipment
EURIBOR
5.25%
7.15%
8/12/2022
8/12/2029
€
3,372
3,572
3,964
0.34
Excelitas Technologies Corp.
(a) (b)(c)
(2)(3)(15)
Capital Equipment
SOFR
5.25%
8.97%
8/12/2022
8/12/2029
10,556
10,514
10,556
0.90
Flexera Software LLC
(a)
(2)(3)
Software
EURIBOR
4.50%
6.68%
8/15/2025
8/15/2032
€
1,968
2,298
2,307
0.20
Flexera Software LLC
(a)
(2)(3)(15)
Software
SOFR
4.50%
8.60%
8/15/2025
8/15/2032
8,408
8,387
8,385
0.72
FPG Intermediate Holdco, LLC
(a)
(2)(3)(15)
Consumer Services
SOFR
5.00%
8.75%
7/25/2025
6/30/2029
43
42
43
0.00
FPG Intermediate Holdco, LLC
(a)
(2)(3)
Consumer Services
SOFR
5.00%
8.70%
7/25/2025
6/30/2029
90
90
90
0.01
Fullsteam Operations LLC
(a)
(2)(3)(15)
High Tech Industries
SOFR
5.25%
9.11%
8/8/2025
8/8/2031
6,531
6,442
6,437
0.55
98
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Galileo Parent, Inc.
(a) (b)(c)
(2)(3)(15)
Telecommunications
SOFR
5.75%
9.42%
11/26/2024
5/3/2030
$
35,067
$
35,044
$
35,250
3.02
%
Generator US Buyer, Inc.
(a) (c)
(2)(3)(7)
Energy: Electricity
SOFR
4.50%
8.17%
10/1/2024
7/22/2030
2,271
2,246
2,254
0.19
Greenhouse Software, Inc.
(a) (b)
(2)(3)(15)
Software
SOFR
5.75%
9.42%
3/1/2021
9/1/2028
32,796
32,401
32,796
2.81
GS AcquisitionCo, Inc.
(a) (b)(c)
(2)(3)(15)
Software
SOFR
5.25%
8.92%
3/26/2024
5/25/2028
5,545
5,571
5,545
0.47
Guidehouse LLP
(a) (c)
(2)(3)
Sovereign & Public Finance
SOFR
4.75%
8.47%
9/30/2022
12/16/2030
6,162
6,199
6,146
0.53
Gymspa (France)
(a)
(2)(7)(15)
Leisure Products & Services
EURIBOR
6.00%, 2.00% PIK
10.05%
5/14/2025
5/14/2031
€
9,781
10,606
11,343
0.97
Hadrian Acquisition Limited (United Kingdom)
(a)
(2)(3)(7)
Diversified Financial Services
SONIA
5.15%, 3.15% PIK
12.19%
2/28/2022
2/28/2029
£
22,745
29,852
30,735
2.63
Heartland Home Services, Inc.
(a) (b)
(2)(3)(11)
Consumer Services
SOFR
5.75%
9.42%
2/10/2022
12/15/2026
10,016
9,993
9,768
0.84
Heartland Home Services, Inc.
(a)
(2)(3)(11)(15)
Consumer Services
SOFR
6.00%
9.67%
12/15/2020
12/15/2026
7,246
7,230
7,073
0.61
Hercules Borrower LLC
(a) (b)
(2)(3)(11)(15)
Environmental Industries
SOFR
4.75%
8.42%
12/14/2020
12/14/2028
17,759
17,612
17,769
1.52
Higginbotham Insurance Agency, Inc.
(a)
(2)(3)(15)
Diversified Financial Services
SOFR
4.50%
8.22%
12/11/2025
6/11/2031
—
(103)
(104)
(0.01)
Hyphen Solutions, LLC
(a)
(2)(3)(15)
Construction & Building
SOFR
4.50%
8.22%
8/6/2025
8/6/2032
—
(10)
(11)
0.00
Holding Argon (France)
(a)
(2)(7)(15)
Business Services
EURIBOR
5.75%
7.75%
4/16/2025
4/16/2032
€
14,102
15,605
16,144
1.38
Hoosier Intermediate, LLC
(a) (b)
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
5.00%
8.85%
11/15/2021
11/15/2028
15,865
15,759
15,865
1.36
Horizon Avionics Buyer, LLC
(a)
(2)(3)(15)
Aerospace & Defense
SOFR
4.75%
8.42%
10/25/2025
3/28/2032
812
744
742
0.06
HS Spa Holdings Inc.
(a) (c)
(2)(3)(15)
Consumer Services
SOFR
5.25%
9.07%
6/2/2022
6/2/2029
9,464
9,502
9,345
0.80
HS Spa Holdings Inc.
(a)
(2)(3)
Consumer Services
SOFR
5.25%
9.09%
3/12/2024
6/2/2029
750
746
742
0.06
Icefall Parent, Inc.
(a) (b)(c)
(2)(3)(15)
Software
SOFR
4.50%
8.17%
1/26/2024
1/26/2030
10,088
9,960
10,088
0.86
IEM New Sub 2, LLC
(a)
(2)(3)(15)
Energy: Electricity
SOFR
4.75%
8.27%
12/3/2025
12/3/2031
—
(19)
(19)
—
iCIMS, Inc.
(a) (b)
(2)(3)(15)
Software
SOFR
5.75%
9.61%
8/18/2022
8/18/2028
28,278
28,052
27,740
2.38
IG Investments Holdings, LLC
(a) (c)
(2)(3)(15)
Business Services
SOFR
5.00%
8.84%
11/1/2024
9/22/2028
4,398
4,405
4,398
0.38
Infront Luxembourg Finance S.À R.L. (Luxembourg)
(a)
(2)(7)
Leisure Products & Services
EURIBOR
10.00%
12.07%
5/28/2021
5/28/2027
€
8,599
10,316
10,105
0.87
IQN Holding Corp.
(a) (c)
(2)(3)(15)
Business Services
SOFR
2.63%, 3.13% PIK
9.42%
5/2/2022
5/2/2029
11,876
11,838
11,827
1.01
Iron Infinity Buyer Sub, Inc.
(a)
(2)(3)(15)
Utilities: Oil & Gas
SOFR
4.75%
8.42%
10/16/2025
10/16/2032
14,908
14,836
14,828
1.27
Jeg's Automotive, LLC
(a)
(2)(3)(8)
Auto Aftermarket & Services
SOFR
7.00% (100% PIK)
10.65%
12/22/2021
12/31/2029
1,133
1,042
1,133
0.10
Jeg's Automotive, LLC
(a)
(2)(3)(8)
Auto Aftermarket & Services
SOFR
8.90% (100% PIK)
12.55%
12/22/2021
12/31/2029
6,816
6,263
6,816
0.58
Kona Buyer, LLC
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.50%
8.15%
6/27/2025
7/23/2031
—
(96)
71
0.01
99
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
LDS Intermediate Holdings, L.L.C.
(a) (c)
(2)(3)(15)
Transportation: Cargo
SOFR
5.00%
8.72%
2/7/2025
2/7/2032
$
7,084
$
6,892
$
7,024
0.60
%
Leo BuyerCo, LLC
(a)
(2)(3)(15)
Capital Equipment
SOFR
4.75%
8.42%
11/25/2025
11/25/2032
8,571
8,426
8,425
0.72
Lifelong Learner Holdings, LLC
(a)
(2)(3)(11)(15)
Business Services
SOFR
1.00%, 7.75% PIK
12.59%
10/18/2019
3/31/2027
4,393
4,384
3,873
0.33
Material Holdings, LLC
(a)
(2)(3)(11)
Business Services
SOFR
4.62%, 1.38% PIK
9.67%
8/19/2021
8/19/2027
14,582
14,584
11,245
0.96
Material Holdings, LLC
(a)
(2)(3)(8)(11)
Business Services
SOFR
6.00% (100% PIK)
9.65%
8/19/2021
8/19/2027
3,655
909
—
—
Material Holdings, LLC
(a)
(2)(3)(11)(15)
Business Services
SOFR
6.00% (100% PIK)
9.67%
6/25/2025
8/19/2027
499
499
499
0.04
McQueen Bidco PTY LTD. (Australia)
(a)
(2)(3)(7)(15)
Auto Aftermarket & Services
SOFR
4.50%
8.17%
11/20/2025
11/28/2032
—
(21)
(21)
—
Medical Manufacturing Technologies, LLC
(a) (b)(c)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.75%
9.44%
12/23/2021
12/23/2027
42,561
42,177
42,552
3.65
Merative L.P.
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.50%
8.17%
9/30/2025
9/30/2032
41,176
40,933
41,176
3.53
Modernizing Medicine, Inc.
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
2.50%, 2.25% PIK
8.92%
4/30/2025
4/30/2032
11,925
11,807
11,941
1.02
Monarch Buyer, Inc.
(a)
(2)(3)(15)
Business Services
SOFR
4.50%
8.32%
6/2/2025
6/2/2032
3,796
3,638
3,621
0.31
More Cowbell II, LLC
(a)
(2)(3)(15)
Diversified Financial Services
SOFR
4.50%
8.24%
9/3/2025
9/1/2030
—
—
(1)
—
NEFCO Holding Company LLC
(a) (b)(c)
(2)(3)(15)
Construction & Building
SOFR
5.00%
8.97%
8/5/2022
8/5/2028
25,660
25,541
25,660
2.20
NMI AcquisitionCo, Inc.
(a) (b)
(2)(3)(11)(15)
High Tech Industries
SOFR
4.50%
8.22%
9/6/2017
9/6/2028
46,994
46,986
46,936
4.02
North Haven Fairway Buyer, LLC
(a) (b)(c)
(2)(3)(15)
Consumer Services
SOFR
5.00%
8.77%
5/17/2022
5/17/2028
30,819
30,631
30,578
2.62
Nuzoa Bidco, S.L.U. (Spain)
(a)
(2)(7)(15)
Healthcare & Pharmaceuticals
EURIBOR
5.50%
8.02%
6/24/2025
6/24/2032
€
6,657
7,531
7,663
0.66
Oak Purchaser, Inc.
(a) (b)(c)
(2)(3)(15)
Business Services
SOFR
5.50%
9.35%
4/28/2022
5/31/2028
17,391
17,238
17,341
1.48
Oak Purchaser, Inc.
(a) (c)
(2)(3)
Business Services
SOFR
5.50%
9.37%
2/1/2024
5/31/2028
1,981
1,959
1,960
0.17
OEConnection, LLC
(a)
(2)(3)(15)
Auto Aftermarket & Services
SOFR
4.50%
8.23%
12/23/2025
12/23/2032
1,137
1,128
1,127
0.10
OEI, Inc.
(a)
(2)(3)(15)
Construction & Building
SOFR
4.50%
8.19%
12/29/2025
12/29/2032
23,432
23,144
23,144
1.98
Optimizely North America Inc.
(a)
(2)(3)
High Tech Industries
EURIBOR
5.25%
7.15%
10/30/2024
10/30/2031
€
2,406
2,584
2,782
0.24
Optimizely North America Inc.
(a) (b)
(2)(3)(15)
High Tech Industries
SOFR
5.00%
8.72%
10/30/2024
10/30/2031
7,122
7,064
6,988
0.60
Optimizely North America Inc.
(a)
(2)(3)
High Tech Industries
SONIA
5.50%
9.22%
10/30/2024
10/30/2031
£
962
1,236
1,278
0.11
Orthrus Limited (United Kingdom)
(a) (c)
(2)(7)
Diversified Financial Services
EURIBOR
3.50%, 2.75% PIK
8.28%
12/4/2024
12/4/2031
€
1,855
1,966
2,159
0.18
100
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Orthrus Limited (United Kingdom)
(a) (c)
(2)(3)(7)
Diversified Financial Services
SOFR
3.50%, 2.75% PIK
10.02%
12/4/2024
12/4/2031
$
4,902
$
4,849
$
4,853
0.42
%
Orthrus Limited (United Kingdom)
(a) (c)
(2)(7)(15)
Diversified Financial Services
SONIA
3.50%, 2.75% PIK
10.22%
12/4/2024
12/4/2031
£
2,077
2,655
2,766
0.24
Orthrus Limited (United Kingdom)
(a) (c)
(2)(3)(7)
Diversified Financial Services
SOFR
3.50%, 2.75% PIK
10.15%
7/24/2025
12/4/2031
708
708
701
0.06
PAM Bidco Limited (United Kingdom)
(a) (c)
(7)(15)
Utilities: Water
FIXED
10.75%
10.75%
10/29/2024
10/29/2031
£
78
99
104
0.01
PAM Bidco Limited (United Kingdom)
(a) (c)
(2)(7)(15)
Utilities: Water
SONIA
7.30%
11.26%
10/29/2024
10/29/2031
£
6,619
8,399
8,782
0.75
PDI TA Holdings, Inc
(a) (c)
(2)(3)(15)
Software
SOFR
5.50%
9.34%
2/1/2024
2/1/2031
16,714
16,758
16,242
1.39
PF Atlantic Holdco 2, LLC
(a) (b)
(2)(3)(11)(15)
Leisure Products & Services
SOFR
5.50%
9.23%
11/12/2021
11/12/2027
20,996
20,901
20,996
1.80
PF Atlantic Holdco 2, LLC
(c)
(2)(3)(11)(15)
Leisure Products & Services
SOFR
6.00%
9.86%
3/27/2025
11/12/2027
1,366
1,380
1,366
0.12
PPV Intermediate Holdings, LLC
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.25%
9.07%
8/7/2024
8/31/2029
5,104
5,046
5,104
0.44
PPV Intermediate Holdings, LLC
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.75%
9.82%
8/7/2024
8/31/2029
15,581
15,539
15,539
1.33
PPV Intermediate Holdings, LLC
(a)
(2)(3)
Healthcare & Pharmaceuticals
SOFR
6.00%
9.57%
8/7/2024
8/31/2029
207
206
206
0.02
Project Castle, Inc.
(b)(c)
(2)(3)
Capital Equipment
SOFR
5.50%
9.36%
6/24/2022
6/1/2029
8,224
7,652
5,294
0.45
Prophix Software Inc. (Canada)
(a)
(2)(3)(7)(15)
Software
SOFR
6.00%
9.80%
2/1/2021
2/1/2027
1,350
1,345
1,347
0.11
Prophix Software Inc. (Canada)
(a) (b)
(2)(3)(7)(15)
Software
SOFR
6.00%
9.72%
11/21/2023
2/1/2027
17,834
17,754
17,804
1.52
Propio LS, LLC
(a) (b)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.75%
8.46%
5/12/2025
5/12/2030
12,138
12,028
12,070
1.03
PROS Parent, Inc.
(a)
(2)(3)(15)
Transportation: Consumer
SOFR
4.75%
8.49%
12/9/2025
12/9/2032
22,988
22,924
22,923
1.96
PXO Holdings I Corp.
(a) (b)
(2)(3)(15)
Chemicals, Plastics & Rubber
SOFR
5.50%
9.20%
3/8/2022
3/8/2028
22,836
22,689
22,457
1.92
QBS Parent, Inc.
(a)
(2)(3)(15)
Energy: Oil & Gas
SOFR
4.50%
8.17%
11/7/2024
6/3/2032
1,168
1,116
1,251
0.11
Radwell Parent, LLC
(a) (b)
(2)(3)(15)
Wholesale
SOFR
5.50%
9.17%
12/1/2022
4/1/2029
20,469
20,194
20,469
1.75
Rialto Management Group, LLC
(a) (b)(c)
(2)(3)(7)(15)
Diversified Financial Services
SOFR
5.00%
8.72%
12/5/2024
12/5/2030
14,993
14,866
15,003
1.29
Rotation Buyer, LLC
(a) (c)
(2)(3)(15)
Capital Equipment
SOFR
4.75%
8.43%
12/27/2024
12/27/2031
4,780
4,726
4,708
0.40
Saguaro Buyer, LLC
(a)
(2)(3)(15)
Leisure Products & Services
SOFR
4.50%
8.23%
7/3/2025
7/3/2032
5,025
4,955
5,010
0.43
SCHP Purchaser, INC
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.50%
8.37%
10/24/2025
10/24/2032
—
(30)
(30)
—
SCP Eye Care HoldCo, LLC
(a) (b)(c)
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
5.50%
9.23%
10/7/2022
10/7/2029
10,755
10,787
10,755
0.92
101
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Seahawk Bidco, LLC
(a) (b)(c)
(2)(3)(15)
Consumer Services
SOFR
4.75%
8.47%
12/19/2024
12/19/2031
$
24,628
$
24,372
$
24,752
2.12
%
Secretariat Advisors LLC
(a)
(2)(15)
Construction & Building
SOFR
4.00%
7.67%
2/28/2025
3/1/2032
—
(10)
—
—
Sigma Irish Acquico Limited (Ireland)
(a)
(2)(7)
Diversified Financial Services
EURIBOR
5.25%
7.27%
3/19/2025
3/19/2032
€
6,766
7,302
7,852
0.67
Sigma Irish Acquico Limited (Ireland)
(a)
(2)(7)(15)
Diversified Financial Services
SOFR
5.25%
8.91%
3/19/2025
3/19/2032
—
(34)
(24)
0.00
SitusAMC Holdings Corporation
(a) (b)
(2)(3)
Diversified Financial Services
SOFR
5.50%
9.17%
5/14/2025
5/14/2031
27,623
27,496
27,419
2.35
Smarsh Inc.
(a) (b)
(2)(3)(15)
Software
SOFR
4.75%
8.42%
2/18/2022
2/18/2029
9,044
8,939
9,045
0.77
Summit Bidco, Inc. (Canada)
(a)
(2)(3)(7)(15)
Diversified Financial Services
CORRA
4.75%
7.21%
10/1/2025
10/1/2032
C$
556
393
399
0.03
Specialty Pharma III, Inc.
(a)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.75%
8.40%
12/23/2025
12/23/2032
15,500
15,413
15,413
1.32
Speedstar Holding LLC
(a) (b)
(2)(3)(15)
Auto Aftermarket & Services
SOFR
6.00%
9.84%
7/2/2024
7/22/2027
17,988
17,850
17,222
1.48
Spotless Brands, LLC
(a)
(2)(3)
Consumer Services
SOFR
5.50%
9.36%
8/30/2024
7/25/2028
9,022
8,961
9,066
0.78
Spotless Brands, LLC
(a) (b)(c)
(2)(3)(15)
Consumer Services
SOFR
5.75%
9.62%
6/21/2022
7/25/2028
46,947
46,657
47,187
4.04
UFT Buyer LLC
(a)
(2)(3)(15)
Environmental Industries
SOFR
4.50%
8.27%
12/4/2025
12/4/2032
956
943
942
0.08
Tank Holding Corp.
(a) (b)
(2)(3)(11)(15)
Capital Equipment
SOFR
5.75%
9.47%
3/31/2022
3/31/2028
24,731
24,549
22,455
1.92
Tank Holding Corp.
(a)
(2)(3)(11)
Capital Equipment
SOFR
6.00%
9.72%
9/26/2024
3/31/2028
3,522
3,498
3,217
0.28
TCFI Aevex LLC
(a)(b)
(2)(3)(11)
Aerospace & Defense
SOFR
6.00%
9.72%
3/18/2020
3/18/2028
12,339
12,331
12,038
1.03
The Chartis Group, LLC
(a) (c)
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.25%
7.95%
9/17/2024
9/17/2031
795
744
866
0.07
Total Power Limited (Canada)
(a) (c)
(2)(3)(7)(15)
Energy: Electricity
CORRA
4.50%
6.76%
7/22/2024
7/22/2030
C$
13,604
9,611
9,814
0.84
Tufin Software North America, Inc.
(a) (b)(c)
(2)(3)(11)(15)
Software
SOFR
4.93%
8.65%
8/17/2022
8/17/2028
38,555
38,224
38,387
3.29
Turbo Buyer, Inc.
(a)
(2)(3)(15)
Auto Aftermarket & Services
SOFR
6.00%
9.62%
12/2/2019
6/1/2026
13,442
13,357
13,442
1.15
U.S. Legal Support, Inc.
(a) (b)
(2)(3)(11)(15)
Business Services
SOFR
5.50%
9.22%
11/30/2018
5/31/2026
23,338
23,327
23,254
1.99
US INFRA SVCS Buyer, LLC
(a)
(2)(3)(11)
Environmental Industries
SOFR
2.50%, 4.75% PIK
11.13%
4/13/2020
4/13/2027
11,384
11,195
9,112
0.78
USR Parent Inc.
(a) (b)(c)
(2)(3)(10)
Retail
SOFR
7.60%
11.32%
4/22/2022
4/25/2027
4,320
4,298
4,288
0.37
Vensure Employer Services, Inc.
(a) (b)(c)
(2)(15)
Business Services
SOFR
5.00%
8.70%
9/27/2024
9/27/2031
31,037
30,879
30,726
2.63
Victors Purchaser, LLC
(a)
(2)(3)(15)
High Tech Industries
SOFR
4.50%
8.19%
12/23/2025
12/23/2032
216
196
204
0.02
Vienna Bidco Limited (United Kingdom)
(a)
(2)(3)(7)
Healthcare & Pharmaceuticals
SONIA
5.65%
9.62%
8/20/2025
8/20/2030
£
7,264
9,513
9,571
0.82
VRC Companies, LLC
(a)
(2)(3)(11)(15)
Business Services
SOFR
5.25%
9.09%
7/29/2025
6/29/2027
—
(2)
—
—
102
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Whitney Merger Sub, Inc.
(a)
(2)(3)(15)
Leisure Products & Services
SOFR
4.75%
8.42%
7/3/2025
7/3/2032
$
24,266
$
23,990
$
23,976
2.05
%
Wineshipping.com LLC
(a)
(2)(3)(11)(15)
Beverage & Food
SOFR
6.25% (100% PIK)
9.92%
10/29/2021
12/29/2028
17,691
16,448
12,342
1.06
World 50, Inc.
(a) (b)
(2)(3)(15)
Business Services
SOFR
4.50%
8.70%
3/22/2024
3/22/2030
18,805
18,507
18,823
1.61
Yellowstone Buyer Acquisition, LLC
(a)
(2)(3)(11)
Consumer Goods: Durable
SOFR
5.75%
9.62%
9/13/2021
9/13/2027
433
430
397
0.03
YLG Holdings, Inc.
(a) (b)
(2)(3)(15)
Consumer Services
SOFR
4.75%
8.72%
9/30/2020
12/23/2030
6,474
6,456
6,494
0.56
First Lien Debt Total
$
2,012,358
$
1,992,112
170.65
%
Second Lien Debt (3.9% of fair value)
11852604 Canada Inc. (Canada)
(a)
(2)(3)(7)
Healthcare & Pharmaceuticals
SOFR
9.50% (100% PIK)
13.32%
9/30/2021
9/30/2028
$
11,701
$
11,629
$
11,702
1.00
%
AQA Acquisition Holdings, Inc.
(a) (b)
(2)(3)
High Tech Industries
SOFR
6.25%
10.09%
3/3/2021
3/3/2029
40,000
39,557
39,151
3.36
Associations, Inc.
(a)
(9)
Construction & Building
FIXED
14.25% (100% PIK)
14.25%
5/3/2024
5/3/2030
9,498
9,496
9,525
0.82
Bayside OPCP, LLC
(a)
(2)(3)(9)(11)
Healthcare & Pharmaceuticals
SOFR
10.00% (100% PIK)
13.67%
5/31/2023
5/31/2026
6,538
6,371
6,539
0.56
Denali Midco 2, LLC
(a)
(3)
Consumer Services
FIXED
13.00% (100% PIK)
13.00%
10/4/2024
12/22/2029
3,016
2,980
2,970
0.25
FPG Intermediate Holdco, LLC
(a)
(2)(3)(8)
Consumer Services
SOFR
5.00%
8.65%
7/25/2025
6/30/2029
36
35
36
0.00
PAI Holdco, Inc.
(a)
(2)(3)
Auto Aftermarket & Services
SOFR
5.50%, 2.00% PIK
11.32%
10/28/2020
10/28/2028
14,995
14,818
13,223
1.13
TruGreen Limited Partnership
(a) (b)
(2)(3)(11)
Consumer Services
SOFR
8.50%
12.34%
11/16/2020
11/2/2028
13,000
12,879
11,984
1.03
Second Lien Debt Total
$
97,765
$
95,130
8.15
%
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
All-In Rate
Acquisition Date
Shares/ Units
Cost
Fair
Value (5)
% of Net Assets
Common and Preferred Equity Investments (4.5% of fair value)
48forty Intermediate Holdings, Inc.
(a) (b)(c)
(6)(12)
Transportation: Cargo
11/5/2024
3
$
—
$
—
—
%
Aimbridge Acquisition Co., Inc.
(a)
(6)(12)
Leisure Products & Services
3/11/2025
23
1,142
1,135
0.10
Ampersand Partners Feeder AIV LP
(a)
(6)(7)(12)
Diversified Financial Services
7/9/2025
170
3,530
3,592
0.31
ANLG Holdings, LLC
(a)
(6)(12)
Capital Equipment
6/22/2018
592
592
1,133
0.10
Atlas Ontario LP (Canada)
(a)
(6)(7)(12)
Business Services
4/7/2021
5,114
5,114
9,818
0.84
Bayside HoldCo, LLC
(a)
(6)(12)
Healthcare & Pharmaceuticals
5/31/2023
6
—
9,768
0.84
Blackbird Holdco, Inc.
(a)
(6)
Capital Equipment
12.50% (100% PIK)
12/14/2021
16
15,938
15,915
1.36
Buckeye Group Holdings, L.P.
(a)
(6)(8)
Auto Aftermarket & Services
10.65% (100% PIK)
12/31/2024
5,118
1,521
—
—
103
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
All-In Rate
Acquisition Date
Shares/ Units
Cost
Fair
Value (5)
% of Net Assets
Buckeye Group Holdings, L.P.
(a)
(6)(12)
Auto Aftermarket & Services
12/31/2024
9,417
$
—
$
—
—
%
Buckeye Group Holdings, L.P.
(a)
(6)(12)
Auto Aftermarket & Services
12/31/2024
5,118
—
—
—
CIP Revolution Holdings, LLC
(a)
(6)(12)
Media: Advertising, Printing & Publishing
8/19/2016
318
318
241
0.02
Comar Aggregator Co, LLC
(a)
(6)(12)
Containers, Packaging & Glass
10/31/2025
21
10,674
11,247
0.96
Cority Software Inc. (Canada)
(a)
(6)(7)(12)
Software
7/2/2019
250
250
1,075
0.09
Diligent Corporation
(a)
(6)
Telecommunications
10.50% (100% PIK)
4/5/2021
16
15,937
15,937
1.37
ECP Parent, LLC
(a)
(6)(12)
Healthcare & Pharmaceuticals
3/29/2018
268
—
16
—
EvolveIP, LLC
(a)
(6)(12)
Telecommunications
10/30/2024
107
215
383
0.03
FPG Intermediate Holdco, LLC
(a)
(6)(12)
Consumer Services
7/25/2025
1
48
43
0.00
FS NU Investors, LP
(a)
(6)
Consumer Services
20.00% (100% PIK)
8/9/2024
2
209
253
0.02
GB Vino Parent, L.P.
(a)
(6)(12)
Beverage & Food
10/29/2021
4
274
—
—
HIG Intermediate, Inc.
(a)
(6)
Diversified Financial Services
10.50%
12/10/2024
2
1,508
1,509
0.13
Integrity Marketing Group, LLC
(a)
(6)
Diversified Financial Services
10.50% (100% PIK)
12/21/2021
22,850
22,859
22,397
1.92
NearU Holdings LLC
(a)
(6)(12)
Consumer Services
8/16/2022
30
2,598
472
0.04
NEFCO Holding Company LLC
(a)
(6)
Construction & Building
8.00%
8/5/2022
1
761
761
0.07
Pascal Ultimate Holdings, L.P
(a)
(6)(12)
Capital Equipment
7/21/2021
36
346
915
0.08
Profile Holdings I, LP
(a)
(6)(12)
Chemicals, Plastics & Rubber
3/8/2022
5
523
390
0.03
Project Carbo S.a.r.l. (Luxemburg)
(a)
(6)(7)
High Tech Industries
14.30% (100% PIK)
1/27/2025
—
2,172
2,409
0.21
Sinch AB (Sweden)
(a)
(6)(7)(12)
High Tech Industries
3/26/2019
106
1,168
363
0.03
Summit K2 Midco, Inc.
(a)
(6)(12)
Diversified Financial Services
4/27/2023
212
164
313
0.03
Talon MidCo 1 Limited
(a)
(6)(12)
Software
8/17/2022
1,154
1,718
2,626
0.22
Tank Holding Corp.
(a)
(6)(12)
Capital Equipment
3/26/2019
850
—
2,599
0.22
Turbo Buyer, Inc.
(a)
(6)(12)
Auto Aftermarket & Services
12/2/2019
1,925
933
1,685
0.15
TW LRW Holdings, LLC
(a) (b)
(6)(12)
Business Services
6/14/2024
—
—
—
—
U.S. Legal Support Investment Holdings, LLC
(a)
(6)(12)
Business Services
11/30/2018
640
641
983
0.08
Zenith American Holding, Inc.
(a)
(6)(12)
Business Services
12/13/2017
1,564
752
2,024
0.17
Equity Investments Total
$
91,905
$
110,002
9.42
%
Total investments—non-controlled/non-affiliated
$
2,202,028
$
2,197,244
188.22
%
104
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/affiliated
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount *
Amortized Cost (4)
Fair
Value (5)
% of Net
Assets
First Lien Debt (2.8% of fair value)
Align Precision Group, LLC
(a)
(2)(3)(14)
Aerospace & Defense
SOFR
6.75% (100% PIK)
10.75%
7/3/2025
7/3/2030
$
20,306
$
20,306
$
20,306
1.74
%
Align Precision Group, LLC
(a)
(2)(3)(14)(15)
Aerospace & Defense
SOFR
6.75% (100% PIK)
10.42%
7/3/2025
7/3/2030
2,886
2,815
2,886
0.24
SPF Borrower, LLC
(a)(b)
(2)(3)(11)(14)(15)
Healthcare & Pharmaceuticals
SOFR
6.25%
9.92%
2/1/2024
2/1/2028
31,372
31,372
31,372
2.69
SPF Borrower, LLC
(a)
(2)(3)(11)(14)
Healthcare & Pharmaceuticals
SOFR
9.50%
13.17%
2/1/2024
2/1/2028
15,171
15,171
15,171
1.30
First Lien Debt Total
$
69,664
$
69,735
5.97
%
Investments—non-controlled/affiliated
Footnotes
Industry
All-In Rate
Acquisition Date
Shares/ Units
Cost
Fair Value (5)
% of Net Assets
Equity Investments (1.4% of fair value)
Align Precision Group, LLC
(a)
(6)(12)(14)
Aerospace & Defense
7/3/2025
10
$
5,875
$
5,452
0.47
%
SPF HoldCo LLC
(a)
(6)(12)(14)
Healthcare & Pharmaceuticals
2/1/2024
15,440
20,828
27,877
2.39
Equity Investments Total
$
26,703
$
33,329
2.86
%
Total investments—non-controlled/affiliated
$
96,367
$
103,064
8.83
%
Investments—controlled/affiliated
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par Amount/ LLC Interest
Cost
Fair Value (5)
% of Net
Assets
Investment Funds (6.6% of fair value)
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest
(a)
(7)(13)
Investment Funds
FIXED
15.33%
15.33%
2/29/2016
12/31/2030
$
130,500
$
130,501
$
123,114
10.55
%
Middle Market Credit Fund, LLC, Mezzanine Loan
(a)
(2)(7)(9)(13)
Investment Funds
SOFR
5.50%
9.15%
6/30/2016
5/21/2028
40,500
40,500
40,500
3.47
Investment Funds Total
$
171,001
$
163,614
14.02
%
Total investments—controlled/affiliated
$
171,001
$
163,614
14.02
%
Total investments
$
2,469,396
$
2,463,922
211.07
%
Derivative Instrument**
Counterparty
Company Pays
Company Receives
Maturity Date
Notional Amount
Fair Value(5)
Change in Unrealized Appreciation / (Depreciation)
Upfront Payments / Receipts
Interest Rate Swap
JP Morgan Chase Bank N.A.
SOFR + 3.235%(d)
6.75%
February 18, 2030
$
300,000
$
298
$
7,173
$
—
Interest Rate Swap
JP Morgan Chase Bank N.A.
SOFR + 2.312%(e)
5.75%
February 15, 2031
300,000
(1,436)
(1,436)
—
Total
$
600,000
$
(1,138)
$
5,737
$
—
105
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
(a) Denotes that all or a portion of the assets are owned by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CGBD” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 9, Borrowings to these consolidated financial statements). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”) and Carlyle Secured Lending III SPV, L.L.C (the “CSL III SPV”).
(b) Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization most recently issued on July 2, 2024 (see Note 9, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of the Company and CSL III SPV.
(c) Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, CSL III SPV. Accordingly, such assets are not available to creditors of the Company and 2015-1 Issuer.
(d) Commencing on the effective date of August 18, 2025, the interest rate paid by the Company for each interest period is calculated on the basis of a compounded average daily SOFR rate plus 3.235%. The interest rate swap settles semi-annually on each of February 18 and August 18. Refer to Note 8, Derivative Instruments, to these consolidated financial statements for further details.
(e) The interest rate paid by the Company for each interest period is calculated on the basis of a compounded average daily SOFR rate plus 2.312%. The interest rate swap settles semi-annually on each of February 15 and August 15. Refer to Note 8, Derivative Instruments, to these consolidated financial statements for further details.
* Par amount is denominated in USD (“$”) unless otherwise noted, as denominated in Canadian Dollar (“C$”), Euro (“€”) or British Pound (“£”).
** Refer to Note 8, Derivative Instruments, to these consolidated financial statements for further information.
(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2025, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2025, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2025. As of December 31, 2025, the reference rates for variable rate loans were the 30-day SOFR at 3.69%, the 90-day SOFR at 3.65%, the 180-day SOFR at 3.57%, the daily SONIA at 3.73%, the 30-day EURIBOR at 1.94%, the 90-day EURIBOR at 2.03%, the 180-day EURIBOR at 2.11%, and the 30-day CORRA at 2.30%.
(3)Loan includes interest rate floor feature, which ranges from 0.50% to 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment funds was determined using significant unobservable inputs.
(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of December 31, 2025, the aggregate fair value of these securities is $143,331, or 12.28% of the Company’s net assets.
(7)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
(8)Represents an investment on non-accrual status as of December 31, 2025.
(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.
(10)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.
(11)Loans include a credit spread adjustment that typically ranges from 0.10% to 0.43%.
(12)Represents a non-income producing security as of December 31, 2025.
106
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
(13)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC and Note 6. Middle Market Credit Fund II, LLC, to these consolidated financial statements for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2025, were as follows:
Investments—controlled/affiliated
Fair Value as of December 31, 2024
Additions/Purchases
Reductions/Sales/ Paydowns
Net Realized Gain (Loss)
Net Change in Unrealized Appreciation (Depreciation)
Fair Value as of December 31, 2025
Dividend and Interest Income
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest
$
182,636
$
—
$
(62,500)
$
—
$
2,978
$
123,114
$
20,500
Middle Market Credit Fund, LLC, Mezzanine Loan
—
40,500
—
—
—
40,500
110
Middle Market Credit Fund II, LLC, Member’s Interest
63,997
149,404
(212,998)
(14,502)
14,099
—
1,054
Total investments—controlled/affiliated
$
246,633
$
189,904
$
(275,498)
$
(14,502)
$
17,077
$
163,614
$
21,664
(14)Under the Investment Company Act, the Company is deemed an “affiliated person” of the portfolio companies because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to the portfolio companies during the year ended December 31, 2025 were as follows:
Investments—non-controlled/affiliated
Fair Value as of December 31, 2024
Additions/Purchases
Reductions/Sales/ Paydowns
Net Realized Gain (Loss)
Net Change in Unrealized Appreciation (Depreciation)
Fair Value as of December 31, 2025
Interest and PIK Income
Align Precision Group, LLC
$
—
$
20,306
$
—
$
—
$
—
$
20,306
$
1,073
Align Precision Group, LLC
—
2,818
(3)
—
71
2,886
169
Align Precision Group, LLC (Equity)
—
5,875
—
—
(423)
5,452
—
SPF Borrower, LLC
31,372
—
—
—
—
31,372
3,379
SPF Borrower, LLC
14,659
512
—
—
—
15,171
2,117
SPF HoldCo, LLC (Equity)
25,830
—
—
—
2,047
27,877
—
Total investments—non-controlled/affiliated
$
71,861
$
29,511
$
(3)
$
—
$
1,695
$
103,064
$
6,738
(15)As of December 31, 2025, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount *
Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
1251 Insurance Distribution Platform Payco, LP
Revolver
0.50%
$
2,843
$
(29)
AAH Topco., LLC
Delayed Draw
1.00
5,599
(30)
AArete Investment, LLC
Delayed Draw
1.00
1,628
(9)
AArete Investment, LLC
Revolver
0.50
651
(4)
Addev Group (France)
Delayed Draw
1.50
€
148
(3)
Advanced Web Technologies Holding Company
Delayed Draw
1.00
1,707
(19)
Advanced Web Technologies Holding Company
Revolver
0.50
1,406
(15)
AGS Health BCP LLC
Delayed Draw
1.00
3,152
11
107
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount *
Fair Value
AGS Health BCP LLC
Revolver
0.50%
$
1,119
$
4
Align Precision Group, LLC
Delayed Draw
1.00
1,122
—
Allied Benefit Systems Intermediate LLC
Delayed Draw
1.00
3,278
(19)
Alpine Acquisition Corp II
Revolver
0.50
1,042
(564)
AmpersCap LLC
Delayed Draw
1.00
10,082
(100)
AP Plastics Acquisition Holdings, LLC
Delayed Draw
1.00
892
(1)
AP Plastics Acquisition Holdings, LLC
Revolver
0.50
339
—
Apex Companies Holdings, LLC
Delayed Draw
1.00
9,917
(65)
Applied Technical Services, LLC
Delayed Draw
2.00
495
(4)
Applied Technical Services, LLC
Delayed Draw
1.00
1,649
(13)
Applied Technical Services, LLC
Revolver
0.50
3,034
(25)
Artifact Bidco, Inc.
Delayed Draw
0.50
345
—
Artifact Bidco, Inc.
Revolver
0.25
246
—
Ascend Buyer, LLC
Revolver
0.50
2,199
(6)
Associations, Inc.
Delayed Draw
—
867
4
Associations, Inc.
Revolver
0.50
1,221
6
Athlete Buyer, LLC
Revolver
0.50
307
(37)
Atlas US Finco, Inc.
Revolver
0.50
2,594
2
Auditboard, Inc.
Revolver
0.50
1,714
(2)
Azurite Intermediate Holdings, Inc.
Revolver
0.50
874
4
Bamboo Health Holdings, LLC
Revolver
0.50
4,542
23
Bayside OPCP, LLC
Revolver
0.50
1,974
—
Bianalisi S.p.A. (Italy)
Delayed Draw
1.25
€
1,848
(43)
Big Bus Tours Group Limited (United Kingdom)
Delayed Draw
1.50
700
(19)
Bingo Group Buyer, Inc.
Delayed Draw
0.75
4,040
(35)
Bingo Group Buyer, Inc.
Revolver
0.50
636
(5)
Birsa S.p.A. (Italy)
Delayed Draw
1.25
€
1,428
(25)
Businessolver.com, Inc.
Delayed Draw
—
2,825
(14)
Businessolver.com, Inc.
Revolver
0.50
1,258
(6)
Celerion Buyer, Inc.
Revolver
0.50
499
(2)
CircusTrix Holdings, LLC
Revolver
0.50
484
(3)
Cliffwater LLC
Revolver
0.38
3,465
(3)
Cority Software Inc. (Canada)
Revolver
0.38
4,025
(20)
Coupa Holdings, LLC
Delayed Draw
1.00
964
5
Coupa Holdings, LLC
Revolver
0.50
738
4
CST Holding Company
Revolver
0.50
940
5
108
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount *
Fair Value
Dance Midco S.a.r.l. (United Kingdom)
Delayed Draw
1.00%
€
2,036
$
(24)
Deerfield Dakota Holding, LLC
Revolver
0.50
4,273
(43)
Denali Intermediate Holdings, Inc.
Revolver
0.50
1,437
(14)
Diligent Corporation
Delayed Draw
1.00
1,158
(17)
Diligent Corporation
Revolver
0.50
591
(9)
Divisions Holding Corporation
Revolver
0.50
2,400
16
Dwyer Instruments, Inc.
Revolver
0.50
2,593
—
Einstein Parent, Inc.
Revolver
0.50
3,142
(33)
Ellkay, LLC
Revolver
0.50
2,460
(17)
Embark Intermediate Holdings, LLC
Delayed Draw
1.00
1,587
(16)
Embark Intermediate Holdings, LLC
Revolver
0.50
381
(4)
Enkindle Limited (United Kingdom)
Delayed Draw
1.00
£
923
(28)
Enverus, Inc.
Delayed Draw
1.00
3,013
(11)
Enverus, Inc.
Revolver
0.50
1,130
(4)
Espresso Bidco Inc.
Delayed Draw
0.50
5,887
(8)
Espresso Bidco Inc.
Revolver
0.50
2,616
(3)
Essential Services Holding Corporation
Delayed Draw
1.00
297
(1)
Essential Services Holding Corporation
Revolver
0.50
112
—
Excel Fitness Holdings, Inc.
Delayed Draw
1.00
2,642
(11)
Excel Fitness Holdings, Inc.
Revolver
0.50
668
(3)
Excelitas Technologies Corp.
Delayed Draw
1.00
565
—
Excelitas Technologies Corp.
Revolver
0.38
2,069
—
Flexera Software LLC
Revolver
0.25
607
(2)
FPG Intermediate Holdco, LLC
Delayed Draw
—
24
0
Fullsteam Operations LLC
Delayed Draw
1.00
2,177
(22)
Fullsteam Operations LLC
Revolver
0.50
726
(7)
Galileo Parent, Inc.
Revolver
0.50
1,732
9
Greenhouse Software, Inc.
Revolver
0.50
2,204
—
GS AcquisitionCo, Inc.
Delayed Draw
0.50
1,127
—
GS AcquisitionCo, Inc.
Delayed Draw
1.00
116
—
GS AcquisitionCo, Inc.
Revolver
0.50
162
—
Gymspa (France)
Delayed Draw
1.80
€
554
(8)
Heartland Home Services, Inc.
Revolver
0.50
343
(8)
Hercules Borrower LLC
Revolver
0.38
2,160
1
Higginbotham Insurance Agency, Inc.
Delayed Draw
0.50
20,825
(104)
Holding Argon (France)
Delayed Draw
1.00
€
4,094
(96)
109
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount *
Fair Value
Hoosier Intermediate, LLC
Revolver
0.38%
$
2,401
$
—
Horizon Avionics Buyer, LLC
Delayed Draw
—
9,222
(46)
Horizon Avionics Buyer, LLC
Revolver
0.50
3,800
(19)
HS Spa Holdings Inc.
Revolver
0.50
1,058
(12)
Hyphen Solutions, LLC
Delayed Draw
1.00
1,256
(7)
Hyphen Solutions, LLC
Revolver
0.50
754
(4)
Icefall Parent, Inc.
Revolver
0.25
992
0
iCIMS, Inc.
Revolver
0.50
1,630
(29)
IEM New Sub 2, LLC
Delayed Draw
—
3,842
(19)
IG Investments Holdings, LLC
Revolver
0.50
350
—
IQN Holding Corp.
Revolver
0.38
342
(1)
Iron Infinity Buyer Sub, Inc.
Delayed Draw
—
10,232
(28)
Iron Infinity Buyer Sub, Inc.
Revolver
0.50
4,213
(10)
Kona Buyer, LLC
Delayed Draw
0.50
20,324
67
Kona Buyer, LLC
Revolver
0.50
902
3
LDS Intermediate Holdings, L.L.C.
Delayed Draw
1.00
7,844
(25)
LDS Intermediate Holdings, L.L.C.
Revolver
0.50
3,809
(12)
Leo BuyerCo, LLC
Delayed Draw
—
3,429
(34)
Leo BuyerCo, LLC
Revolver
0.50
2,743
(27)
Lifelong Learner Holdings, LLC
Revolver
0.50
17
(2)
Material Holdings, LLC
Delayed Draw
—
1,420
—
Material Holdings, LLC
Revolver
—
192
—
McQueen Bidco PTY LTD. (Australia)
Revolver
0.50
4,111
(21)
Medical Manufacturing Technologies, LLC
Revolver
0.50
3,000
(1)
Merative L.P.
Delayed Draw
0.50
4,706
—
Merative L.P.
Revolver
0.50
4,118
—
Modernizing Medicine, Inc.
Revolver
0.50
1,099
1
Monarch Buyer, Inc.
Delayed Draw
0.50
8,897
(91)
Monarch Buyer, Inc.
Revolver
0.38
4,328
(44)
More Cowbell II, LLC
Delayed Draw
0.50
1,483
—
More Cowbell II, LLC
Revolver
0.50
2,966
(1)
NEFCO Holding Company LLC
Revolver
0.50
3,107
—
NMI AcquisitionCo, Inc.
Revolver
0.50
1,281
(2)
North Haven Fairway Buyer, LLC
Revolver
0.50
1,180
(9)
Nuzoa Bidco, S.L.U. (Spain)
Delayed Draw
1.25
€
2,401
(42)
Oak Purchaser, Inc.
Delayed Draw
0.50
2,618
(6)
110
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount *
Fair Value
Oak Purchaser, Inc.
Revolver
0.50%
$
1,621
$
(4)
OEConnection, LLC
Delayed Draw
0.50
667
(3)
OEConnection, LLC
Revolver
0.50
176
(1)
OEI, Inc.
Delayed Draw
0.50
10,651
(80)
OEI, Inc.
Revolver
0.50
4,260
(32)
Optimizely North America Inc.
Revolver
0.50
1,091
(18)
Orthrus Limited (United Kingdom)
Delayed Draw
0.50
£
421
(6)
PAM Bidco Limited (United Kingdom)
Delayed Draw
2.19
£
1,752
(29)
PDI TA Holdings, Inc
Revolver
0.50
319
(9)
PF Atlantic Holdco 2, LLC
Delayed Draw
1.00
2,137
—
PF Atlantic Holdco 2, LLC
Revolver
0.50
2,759
—
PPV Intermediate Holdings, LLC
Delayed Draw
1.00
7,901
—
PPV Intermediate Holdings, LLC
Revolver
0.50
1,155
(3)
Prophix Software Inc. (Canada)
Delayed Draw
—
680
(1)
Prophix Software Inc. (Canada)
Revolver
0.50
643
(1)
Propio LS, LLC
Revolver
0.50
182
(1)
PROS Parent, Inc.
Revolver
0.38
2,665
(7)
PXO Holdings I Corp.
Revolver
0.50
980
(16)
QBS Parent, Inc.
Delayed Draw
—
8,275
52
QBS Parent, Inc.
Revolver
0.50
3,745
24
Radwell Parent, LLC
Revolver
0.38
2,035
0
Rialto Management Group, LLC
Revolver
0.38
1,506
1
Rotation Buyer, LLC
Delayed Draw
1.00
2,369
(21)
Rotation Buyer, LLC
Revolver
0.50
1,066
(9)
Saguaro Buyer, LLC
Delayed Draw
1.00
1,893
(4)
Saguaro Buyer, LLC
Revolver
0.50
574
(1)
SCHP Purchaser, INC
Revolver
0.50
3,100
(30)
SCP Eye Care HoldCo, LLC
Delayed Draw
1.00
75
—
SCP Eye Care HoldCo, LLC
Revolver
0.50
1,148
—
Seahawk Bidco, LLC
Delayed Draw
1.00
1,320
3
Seahawk Bidco, LLC
Delayed Draw
0.50
21,591
54
Seahawk Bidco, LLC
Revolver
0.50
1,866
5
Secretariat Advisors LLC
Delayed Draw
4.00
2,151
—
Sigma Irish Acquico Limited (Ireland)
Delayed Draw
0.50
1,930
(24)
Smarsh Inc.
Delayed Draw
1.00
1,633
—
Smarsh Inc.
Revolver
0.50
751
—
111
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount *
Fair Value
Specialty Pharma III, Inc.
Revolver
0.50%
$
2,000
$
(10)
Speedstar Holding LLC
Delayed Draw
1.00
1,789
(69)
SPF Borrower, LLC
Revolver
0.50
1,544
—
Spotless Brands, LLC
Revolver
0.50
1,242
6
Summit Bidco, Inc. (Canada)
Delayed Draw
0.50
C$
189
(1)
Summit Bidco, Inc. (Canada)
Revolver
0.50
C$
96
(1)
Tank Holding Corp.
Revolver
0.38
1,655
(143)
The Chartis Group, LLC
Delayed Draw
1.00
3,983
40
The Chartis Group, LLC
Revolver
0.50
2,390
24
Total Power Limited (Canada)
Delayed Draw
1.00
C$
1,237
(7)
Total Power Limited (Canada)
Revolver
0.50
C$
1,667
(10)
Tufin Software North America, Inc.
Revolver
0.50
3,738
(15)
Turbo Buyer, Inc.
Revolver
0.50
312
—
U.S. Legal Support, Inc.
Revolver
0.50
775
(3)
UFT Buyer LLC
Delayed Draw
0.50
351
(4)
UFT Buyer LLC
Revolver
0.50
132
(1)
Vensure Employer Services, Inc.
Delayed Draw
0.50
497
(5)
Victors Purchaser, LLC
Delayed Draw
—
1,330
(4)
Victors Purchaser, LLC
Revolver
0.50
2,313
(7)
VRC Companies, LLC
Revolver
0.50
833
—
Whitney Merger Sub, Inc.
Revolver
0.50
4,895
(49)
Wineshipping.com LLC
Delayed Draw
—
1,384
(384)
Wineshipping.com LLC
Revolver
0.50
213
(59)
World 50, Inc.
Revolver
0.50
860
1
YLG Holdings, Inc.
Delayed Draw
1.00
454
1
YLG Holdings, Inc.
Revolver
0.50
503
1
Total unfunded commitments
$
431,606
$
(2,800)
112
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
The type of investments as of December 31, 2025 consisted of the following:
Type
Amortized Cost
Fair Value
% of Fair Value
First Lien Debt
$
2,082,022
$
2,061,847
83.7
%
Second Lien Debt
97,765
95,130
3.9
Equity Investments
118,608
143,331
5.8
Investment Funds
171,001
163,614
6.6
Total
$
2,469,396
$
2,463,922
100.0
%
The rate type of debt investments as of December 31, 2025 was as follows:
Rate Type
Amortized Cost
Fair Value
% of Fair Value of First and Second Lien Debt
Floating Rate
$
2,207,712
$
2,184,878
99.4
%
Fixed Rate
12,575
12,599
0.6
Total
$
2,220,287
$
2,197,477
100.0
%
The industry composition of investments as of December 31, 2025 was as follows:
Industry
Amortized Cost
Fair Value
% of Fair Value
Aerospace & Defense
$
42,071
$
41,424
1.7
%
Auto Aftermarket & Services
56,891
54,627
2.2
Beverage & Food
16,722
12,342
0.5
Business Services
184,925
187,064
7.6
Capital Equipment
106,173
105,607
4.3
Chemicals, Plastics & Rubber
32,918
32,582
1.3
Construction & Building
111,692
107,881
4.4
Consumer Goods: Durable
430
397
—
Consumer Goods: Non-Durable
4,501
4,542
0.2
Consumer Services
202,265
198,367
8.1
Containers, Packaging & Glass
55,138
55,518
2.3
Diversified Financial Services
190,675
192,592
7.8
Energy: Electricity
11,838
12,049
0.5
Energy: Oil & Gas
1,101
1,235
0.1
Environmental Industries
57,978
55,954
2.3
Healthcare & Pharmaceuticals
457,916
477,306
19.4
High Tech Industries
160,137
159,078
6.5
Investment Funds
171,001
163,614
6.6
Leisure Products & Services
120,391
121,680
4.9
Media: Advertising, Printing & Publishing
318
241
0.0
Media: Broadcasting & Subscription
(14)
(14)
0.0
113
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2025
(amounts in thousands)
Industry
Amortized Cost
Fair Value
% of Fair Value
Media: Diversified & Production
$
12,388
$
13,500
0.5
%
Retail
20,182
20,299
0.8
Software
293,250
296,004
12.0
Sovereign & Public Finance
6,199
6,146
0.2
Telecommunications
59,286
59,456
2.4
Transportation: Cargo
26,572
17,325
0.7
Transportation: Consumer
22,924
22,923
0.9
Utilities: Oil & Gas
14,836
14,828
0.6
Utilities: Water
8,498
8,886
0.4
Wholesale
20,194
20,469
0.8
Total
$
2,469,396
$
2,463,922
100.0
%
The geographical composition of investments as of December 31, 2025 was as follows:
Geography
Amortized Cost
Fair Value
% of Fair Value
Australia
$
4,486
$
4,516
0.2
%
Canada
99,713
105,296
4.3
France
26,504
27,782
1.1
Ireland
7,268
7,828
0.3
Italy
25,836
28,094
1.1
Luxembourg
12,488
12,514
0.5
Spain
7,531
7,663
0.3
Sweden
1,168
363
0.0
United Kingdom
96,614
100,150
4.1
United States
2,187,788
2,169,716
88.1
Total
$
2,469,396
$
2,463,922
100.0
%
The accompanying notes are an integral part of these consolidated financial statements.
114
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net Assets
First Lien Debt (70.8% of fair value)
Accession Risk Management Group, Inc.
^*
(2)(3)(15)
Diversified Financial Services
SOFR
4.75%
9.28%
11/1/2019
11/1/2029
$
10,063
$
9,997
$
10,165
1.12
%
ADPD Holdings, LLC
^
(2)(3)(11)(15)
Consumer Services
SOFR
6.00%
10.79%
8/16/2022
8/15/2028
11,555
11,245
10,398
1.15
Advanced Web Technologies Holding Company
^*
(2)(3)(15)
Containers, Packaging & Glass
SOFR
4.00%, 2.25% PIK
10.56%
12/17/2020
12/17/2027
15,037
14,860
15,029
1.66
AI Grace AUS Bidco Pty LTD (Australia)
*
(2)(3)(7)
Consumer Goods: Non-Durable
SOFR
5.25%
9.62%
12/5/2023
12/5/2029
2,286
2,226
2,286
0.25
Allied Benefit Systems Intermediate LLC
^
(2)(3)
Healthcare & Pharmaceuticals
SOFR
5.25%
9.63%
10/31/2023
10/31/2030
1,572
1,552
1,588
0.18
Alpine Acquisition Corp II
^
(2)(3)(11)(15)
Transportation: Cargo
SOFR
2.00%, 8.55% PIK
10.55%
4/19/2022
11/30/2029
8,861
8,738
6,726
0.74
AmpersCap LLC
^
(2)(3)(15)
Diversified Financial Services
SOFR
5.25%
9.54%
12/17/2024
12/17/2032
742
697
653
0.07
Apex Companies Holdings, LLC
^*
(2)(3)(15)
Environmental Industries
SOFR
5.25%
9.78%
1/31/2023
1/31/2028
23,910
23,431
23,735
2.62
Applied Technical Services, LLC
*
(2)(3)(11)
Business Services
SOFR
6.00%
10.37%
9/18/2023
12/29/2026
474
468
470
0.05
Applied Technical Services, LLC
^*
(2)(3)(11)(15)
Business Services
SOFR
5.75%
10.12%
12/29/2020
12/29/2026
1,272
1,249
1,247
0.14
Appriss Health, LLC
^*
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
7.00%
11.70%
5/6/2021
5/6/2027
36,093
35,716
35,836
3.96
Ardonagh Midco 3 PLC (United Kingdom)
^
(2)(3)(7)
Diversified Financial Services
SOFR
4.75%
9.90%
3/1/2024
2/15/2031
235
232
237
0.03
Artifact Bidco, Inc.
^
(2)(3)(15)
Software
SOFR
4.50%
8.83%
7/26/2024
7/26/2031
704
695
697
0.08
Ascend Buyer, LLC
^*
(2)(3)(11)(15)
Containers, Packaging & Glass
SOFR
5.75%
10.17%
9/30/2021
9/30/2028
3,779
3,726
3,773
0.42
Associations, Inc.
^*
(2)(3)(11)(15)
Construction & Building
SOFR
6.50%
11.05%
5/3/2024
7/2/2028
13,648
13,635
13,784
1.52
Athlete Buyer, LLC
^*
(2)(3)(11)(15)
Construction & Building
SOFR
5.75%
10.08%
3/29/2024
4/26/2029
7,597
7,381
7,399
0.82
Atlas US Finco, Inc.
^*
(2)(3)(7)(15)
High Tech Industries
SOFR
5.00%
9.63%
12/15/2022
12/12/2029
2,883
2,810
2,887
0.32
Atlas US Finco, Inc.
^
(2)(3)(7)
High Tech Industries
SOFR
5.00%
9.63%
12/18/2023
12/10/2029
1,335
1,312
1,337
0.15
Auditboard, Inc.
^
(2)(3)(15)
Software
SOFR
4.75%
9.07%
7/12/2024
7/12/2031
6,000
5,905
5,941
0.66
Aurora Lux FinCo S.Á.R.L. (Luxembourg)
^
(2)(3)(7)(11)
Software
SOFR
3.00%, 4.00% PIK
11.33%
12/24/2019
12/24/2026
33,650
33,376
32,580
3.60
Avalara, Inc.
^*
(2)(3)(15)
Diversified Financial Services
SOFR
6.25%
10.58%
10/19/2022
10/19/2028
23,853
23,418
23,853
2.64
Azurite Intermediate Holdings, Inc.
^*
(2)(3)(15)
Software
SOFR
6.50%
10.86%
3/19/2024
3/19/2031
3,577
3,524
3,654
0.40
Barnes & Noble, Inc.
^*
(2)(3)(10)(11)
Retail
SOFR
8.81%
13.17%
8/7/2019
12/20/2026
20,133
19,814
20,000
2.21
Bayside OPCP, LLC
^
(2)(3)(11)
Healthcare & Pharmaceuticals
SOFR
7.25%
11.73%
5/31/2023
5/31/2026
4,906
4,906
4,906
0.54
Bayside OPCP, LLC
^
(2)(3)(11)
Healthcare & Pharmaceuticals
SOFR
7.25%
11.73%
5/31/2023
5/31/2026
13,869
13,869
13,869
1.53
Bayside OPCP, LLC
^
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
7.00%
11.29%
5/31/2023
5/31/2026
—
—
—
—
Big Bus Tours Group Limited (United Kingdom)
^
(2)(7)(15)
Leisure Products & Services
SOFR
8.25%
12.54%
6/4/2024
6/4/2031
—
(38)
(38)
(0.00
)
Big Bus Tours Group Limited (United Kingdom)
^
(2)(7)
Leisure Products & Services
EURIBOR
8.25%
11.21%
6/4/2024
6/4/2031
€
4,955
5,238
4,991
0.55
115
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Big Bus Tours Group Limited (United Kingdom)
*
(2)(7)
Leisure Products & Services
SOFR
8.25%
12.75%
6/4/2024
6/4/2031
$
8,012
$
7,784
$
7,792
0.86
%
Bingo Group Buyer, Inc.
^*
(2)(3)(15)
Environmental Industries
SOFR
5.00%
9.33%
7/10/2024
7/10/2031
3,446
3,389
3,496
0.39
Birsa S.p.A. (Italy)
^
(2)(7)(15)
Healthcare & Pharmaceuticals
EURIBOR
6.00%
8.58%
7/2/2024
6/30/2031
€
3,172
3,190
3,094
0.34
BlueCat Networks, Inc. (Canada)
^*
(2)(3)(7)
High Tech Industries
SOFR
5.00%, 1.00% PIK
10.40%
8/8/2022
8/8/2028
7,368
7,268
7,250
0.80
BMS Holdings III Corp.
*
(2)(3)(11)
Construction & Building
SOFR
5.50%
9.83%
9/30/2019
9/30/2026
4,735
4,699
4,570
0.50
Bradyifs Holdings, LLC
^*
(2)(3)(15)
Wholesale
SOFR
5.00%
9.52%
10/31/2023
10/31/2029
8,996
8,839
9,026
1.00
Celerion Buyer, Inc.
^*
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.00%
9.53%
11/3/2022
11/3/2029
4,568
4,481
4,527
0.50
Chemical Computing Group ULC (Canada)
^*
(2)(3)(7)(11)(15)
Software
SOFR
4.50%
8.96%
8/30/2018
8/30/2025
380
380
380
0.04
CircusTrix Holdings, LLC
^*
(2)(3)(15)
Leisure Products & Services
SOFR
6.50%
10.86%
7/18/2023
7/14/2028
14,513
14,232
14,712
1.63
Comar Holding Company, LLC
^
(2)(3)(11)
Containers, Packaging & Glass
SOFR
2.00%, 4.75% PIK
11.23%
6/18/2018
6/18/2026
30,732
30,705
27,794
3.07
CoreWeave Compute Acquisition Co. II, LLC
^
(2)(3)
High Tech Industries
SOFR
9.62%
14.10%
7/30/2023
7/30/2028
1,774
1,750
1,791
0.20
CoreWeave Compute Acquisition Co. IV, LLC
^
(2)(15)
High Tech Industries
SOFR
6.00%
10.54%
5/22/2024
5/22/2029
15,173
14,773
14,724
1.63
Cority Software Inc. (Canada)
^*
(2)(3)(7)(15)
Software
SOFR
4.75%
9.34%
7/2/2019
7/2/2026
12,748
12,680
12,717
1.40
Coupa Holdings, LLC
^*
(2)(3)(15)
Software
SOFR
5.50%
10.09%
2/27/2023
2/28/2030
8,595
8,397
8,728
0.96
CST Holding Company
^*
(2)(3)(11)(15)
Consumer Goods: Non-Durable
SOFR
5.00%
9.36%
11/1/2022
11/1/2028
4,885
4,772
4,890
0.54
Dance Midco S.a.r.l. (United Kingdom)
^
(2)(15)
Media: Diversified & Production
EURIBOR
5.50%
8.54%
10/25/2024
10/25/2031
€
3,456
3,632
3,509
0.39
DCA Investment Holding LLC
^*
(2)(3)
Healthcare & Pharmaceuticals
SOFR
6.41%
10.73%
3/11/2021
4/3/2028
14,147
14,048
13,573
1.50
Denali Midco 2, LLC
^*
(2)(3)
Consumer Services
SOFR
5.25%
9.61%
9/15/2022
12/22/2028
8,423
8,265
8,359
0.92
Diligent Corporation
*
(2)(3)
Telecommunications
SOFR
5.00%
10.09%
8/4/2020
8/4/2030
636
627
642
0.07
Dwyer Instruments, Inc.
^*
(2)(3)(11)(15)
Capital Equipment
SOFR
4.75%
9.14%
7/21/2021
7/21/2029
13,098
12,914
13,098
1.45
Eliassen Group, LLC
^*
(2)(3)
Business Services
SOFR
5.75%
10.10%
4/14/2022
4/14/2028
2,184
2,163
2,148
0.24
Ellkay, LLC
^
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
5.50%, 2.00% PIK
12.55%
9/14/2021
9/14/2027
14,032
13,883
12,278
1.36
Essential Services Holding Corporation
^
(2)(3)(15)
Consumer Services
SOFR
5.00%
9.65%
6/17/2024
6/17/2031
758
749
756
0.08
Excel Fitness Holdings, Inc.
^
(2)(3)(15)
Leisure Products & Services
SOFR
5.50%
9.83%
5/13/2024
4/29/2029
346
324
346
0.04
Excel Fitness Holdings, Inc.
^*
(2)(3)(11)(15)
Leisure Products & Services
SOFR
5.25%
9.58%
4/29/2022
4/29/2029
6,141
6,046
6,095
0.67
Excelitas Technologies Corp.
^
(2)
Capital Equipment
EURIBOR
5.25%
8.11%
8/12/2022
8/12/2029
€
1,792
1,871
1,843
0.20
Excelitas Technologies Corp.
^*
(2)(3)(15)
Capital Equipment
SOFR
5.25%
9.61%
8/12/2022
8/12/2029
3,328
3,292
3,305
0.37
FPG Intermediate Holdco, LLC
^
(2)(3)(11)(15)
Consumer Services
SOFR
1.00%, 5.75% PIK
11.10%
8/5/2022
3/5/2027
387
383
250
0.03
Galileo Parent, Inc.
^
(2)(3)(15)
Telecommunications
SOFR
5.75%
10.08%
11/26/2024
5/3/2030
24,558
24,558
24,558
2.71
116
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Generator US Buyer, Inc.
^
(2)(3)
Energy: Electricity
SOFR
5.25%
9.58%
10/1/2024
7/22/2030
$
1,530
$
1,504
$
1,512
0.17
%
Greenhouse Software, Inc.
^*
(2)(3)(15)
Software
SOFR
6.25%
10.58%
3/1/2021
9/1/2028
32,796
32,276
33,003
3.65
GS AcquisitionCo, Inc.
^*
(2)(3)(15)
Software
SOFR
5.25%
9.58%
3/26/2024
5/25/2028
1,095
1,093
1,102
0.12
Guidehouse LLP
^
(2)(3)
Sovereign & Public Finance
SOFR
3.75%, 2.00% PIK
10.11%
9/30/2022
12/16/2030
80
79
81
0.01
Hadrian Acquisition Limited (United Kingdom)
^
(2)(3)(7)(10)
Diversified Financial Services
SONIA
5.16%, 3.20% PIK
13.08%
2/28/2022
2/28/2029
£
21,641
28,313
27,363
3.02
Heartland Home Services, Inc.
^
(2)(3)(11)(15)
Consumer Services
SOFR
6.00%
10.33%
12/15/2020
12/15/2026
7,205
7,172
6,855
0.76
Heartland Home Services, Inc.
^*
(2)(3)(11)
Consumer Services
SOFR
5.75%
10.08%
2/10/2022
12/15/2026
10,119
10,074
9,615
1.06
Hercules Borrower LLC
^*
(2)(3)(11)(15)
Environmental Industries
SOFR
5.50%
9.83%
12/14/2020
12/14/2026
17,895
17,682
17,895
1.98
Hoosier Intermediate, LLC
^*
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
5.00%
9.52%
11/15/2021
11/15/2028
9,709
9,563
9,709
1.07
HS Spa Holdings Inc.
^
(2)(3)(15)
Consumer Services
SOFR
5.25%
9.76%
6/2/2022
6/2/2029
247
233
255
0.03
HS Spa Holdings Inc.
^
(2)(3)(15)
Consumer Services
SOFR
5.25%
9.54%
3/12/2024
6/2/2029
313
308
313
0.03
Icefall Parent, Inc.
^*
(2)(3)(15)
Software
SOFR
6.50%
10.86%
1/26/2024
1/26/2030
7,811
7,660
7,803
0.86
iCIMS, Inc.
^*
(2)(3)(15)
Software
SOFR
5.75%
10.38%
8/18/2022
8/18/2028
27,962
27,662
27,420
3.03
iCIMS, Inc.
^
(2)(3)(15)
Software
SOFR
5.75%
10.38%
8/18/2022
8/18/2028
—
—
(82)
(0.01)
IG Investments Holdings, LLC
^
(2)(3)(15)
Business Services
SOFR
5.00%
9.57%
11/1/2024
9/22/2028
2,777
2,777
2,777
0.31
Infront Luxembourg Finance S.À R.L. (Luxembourg)
^
(2)(7)
Leisure Products & Services
EURIBOR
4.50%, 5.50% PIK
12.91%
5/28/2021
5/28/2027
€
8,481
10,139
8,785
0.97
IQN Holding Corp.
^
(2)(3)(15)
Business Services
SOFR
5.25%
9.76%
5/2/2022
5/2/2029
7,026
6,977
7,026
0.78
iRobot Corporation
^
(2)(3)(7)(11)
Consumer Goods: Durable
SOFR
6.50%, 2.50% PIK
13.63%
7/25/2023
7/31/2026
4,404
4,404
4,260
0.47
Jeg's Automotive, LLC
^
(2)(3)(8)
Auto Aftermarket & Services
SOFR
7.00% (100% PIK)
11.29%
12/22/2021
12/31/2029
7,303
7,305
7,303
0.81
Kaseya, Inc.
^*
(2)(3)(15)
High Tech Industries
SOFR
5.50%
10.08%
6/23/2022
6/23/2029
36,846
36,303
36,846
4.07
Lifelong Learner Holdings, LLC
^
(2)(3)(11)(15)
Business Services
SOFR
7.75%
12.44%
10/18/2019
10/18/2025
4,117
4,093
3,770
0.42
LVF Holdings, Inc.
^*
(2)(3)(11)(15)
Beverage & Food
SOFR
5.50%
9.83%
6/10/2021
6/10/2027
19,960
19,757
19,960
2.21
Material Holdings, LLC
^
(2)(3)(11)(15)
Business Services
SOFR
1.35%, 4.65% PIK
10.33%
8/19/2021
8/19/2027
7,258
7,258
7,258
0.80
Material Holdings, LLC
^
(2)(3)(8)(11)
Business Services
SOFR
6.00% (100% PIK)
10.29%
8/19/2021
8/19/2027
1,746
677
453
0.05
Maverick Acquisition, Inc.
^
(2)(3)(11)
Aerospace & Defense
SOFR
6.25%
10.58%
6/1/2021
6/1/2027
34,991
34,664
25,459
2.81
Medical Manufacturing Technologies, LLC
^*
(2)(3)(11)(15)
Healthcare & Pharmaceuticals
SOFR
5.75%
10.09%
12/23/2021
12/23/2027
20,586
20,350
20,261
2.24
NEFCO Holding Company LLC
^*
(2)(3)(15)
Construction & Building
SOFR
5.75%
10.31%
8/5/2022
8/5/2028
15,638
15,345
15,584
1.72
NMI AcquisitionCo, Inc.
^*
(2)(3)(11)(15)
High Tech Industries
SOFR
5.00%
9.36%
9/6/2017
9/6/2028
37,714
37,696
37,682
4.16
North Haven Fairway Buyer, LLC
^*
(2)(3)(15)
Consumer Services
SOFR
6.50%
10.90%
5/17/2022
5/17/2028
16,182
15,967
16,182
1.79
North Haven Fairway Buyer, LLC
^
(2)(3)(15)
Consumer Services
SOFR
5.25%
9.66%
6/26/2024
5/17/2028
3,479
3,313
3,390
0.37
117
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Oak Purchaser, Inc.
^*
(2)(3)(15)
Business Services
SOFR
5.50%
9.81%
4/28/2022
4/28/2028
$
7,475
$
7,426
$
7,353
0.81
%
Oak Purchaser, Inc.
^
(2)(3)(15)
Business Services
SOFR
5.50%
9.82%
2/1/2024
4/28/2028
1,039
1,000
997
0.11
Optimizely North America Inc.
^
(2)(3)
High Tech Industries
EURIBOR
5.25%
8.11%
10/30/2024
10/30/2031
€
1,515
1,629
1,560
0.17
Optimizely North America Inc.
^
(2)(3)(15)
High Tech Industries
SOFR
5.00%
9.36%
10/30/2024
10/30/2031
4,485
4,434
4,454
0.49
Optimizely North America Inc.
^
(2)(3)
High Tech Industries
SONIA
5.50%
10.20%
10/30/2024
10/30/2031
£
606
778
755
0.08
Oranje Holdco, Inc.
^*
(2)(3)(15)
Business Services
SOFR
7.75%
12.32%
2/1/2023
2/1/2029
8,052
7,883
8,116
0.90
Oranje Holdco, Inc.
*
(2)(3)
Business Services
SOFR
7.25%
11.82%
6/26/2024
2/1/2029
3,374
3,312
3,343
0.37
Orthrus Limited (United Kingdom)
^
(2)
Diversified Financial Services
EURIBOR
3.50%, 2.75% PIK
9.13%
12/4/2024
12/4/2031
€
602
627
614
0.07
Orthrus Limited (United Kingdom)
^
(2)(3)
Diversified Financial Services
SOFR
3.50%, 2.75% PIK
10.72%
12/4/2024
12/4/2031
1,589
1,566
1,565
0.17
Orthrus Limited (United Kingdom)
^
(2)(15)
Diversified Financial Services
SONIA
3.50%, 2.75% PIK
10.95%
12/4/2024
12/4/2031
£
674
840
825
0.09
PAM Bidco Limited (United Kingdom)
^
(15)
Utilities: Water
FIXED
10.75%
10.75%
10/29/2024
10/29/2031
23
29
28
0.00
PAM Bidco Limited (United Kingdom)
^
(2)(15)
Utilities: Water
SONIA
7.30%
12.24%
10/29/2024
10/29/2031
£
1,894
2,390
2,302
0.25
Park County Holdings, LLC
^*
(2)(3)(10)
Media: Diversified & Production
SOFR
7.28%
11.62%
11/29/2023
11/29/2029
28,759
28,249
28,615
3.16
PDI TA Holdings, Inc
^
(2)(3)(15)
Software
SOFR
5.50%
10.08%
2/1/2024
2/1/2031
514
509
514
0.06
Performance Health Holdings, Inc.
*
(2)(3)(11)
Healthcare & Pharmaceuticals
SOFR
5.75%
10.11%
7/12/2021
7/12/2027
6,444
6,381
6,444
0.71
Pestco Intermediate, LLC
^*
(2)(3)(11)(15)
Environmental Industries
SOFR
6.25%
10.78%
2/6/2023
2/17/2028
5,025
4,915
5,079
0.56
Pestco Intermediate, LLC
^*
(2)(3)(15)
Environmental Industries
SOFR
5.25%
9.50%
10/2/2024
2/17/2028
1,916
1,872
1,880
0.21
PF Atlantic Holdco 2, LLC
^*
(2)(3)(11)(15)
Leisure Products & Services
SOFR
5.50%
10.04%
11/12/2021
11/12/2027
11,459
11,312
11,459
1.27
PPV Intermediate Holdings, LLC
^
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.25%
9.54%
8/7/2024
8/31/2029
—
(80)
—
—
Project Castle, Inc.
*
(2)(3)
Capital Equipment
SOFR
5.50%
10.09%
6/24/2022
6/1/2029
7,331
6,777
6,389
0.71
Prophix Software Inc. (Canada)
^
(2)(3)(7)(15)
Software
SOFR
6.00%
10.36%
2/1/2021
2/1/2027
—
(10)
(8)
0.00
Prophix Software Inc. (Canada)
^*
(2)(3)(7)(15)
Software
SOFR
6.00%
10.35%
11/21/2023
2/1/2027
17,194
17,046
17,125
1.89
Pushpay USA Inc.
*
(2)
Diversified Financial Services
SOFR
4.50%
8.83%
8/16/2024
8/16/2031
1,000
990
1,000
0.11
PXO Holdings I Corp.
^*
(2)(3)(11)(15)
Chemicals, Plastics & Rubber
SOFR
5.50%
9.90%
3/8/2022
3/8/2028
9,500
9,364
9,497
1.05
QBS Parent, Inc.
^
(2)(3)(15)
Energy: Oil & Gas
SOFR
4.75%
9.27%
11/7/2024
11/7/2031
—
(5)
(5)
0.00
QNNECT, LLC
^*
(2)(3)(15)
Aerospace & Defense
SOFR
5.25%
10.26%
11/2/2022
11/2/2029
6,109
5,972
6,134
0.68
Quantic Electronics, LLC
^
(2)(3)(11)(15)
Aerospace & Defense
SOFR
6.00%
10.33%
11/19/2020
11/19/2026
14,919
14,794
14,919
1.65
Quantic Electronics, LLC
^
(2)(3)(11)
Aerospace & Defense
SOFR
6.00%
10.33%
3/1/2021
3/1/2027
9,625
9,544
9,625
1.06
Radwell Parent, LLC
^*
(2)(3)(15)
Wholesale
SOFR
5.50%
9.83%
12/1/2022
4/1/2029
11,059
10,772
10,951
1.21
Regency Entertainment, Inc.
^
(2)(3)(11)
Media: Advertising, Printing & Publishing
SOFR
6.75%, 2.25% PIK
13.33%
7/5/2023
6/23/2028
15,000
14,714
15,450
1.71
Rialto Management Group, LLC
^
(2)(3)(15)
Diversified Financial Services
SOFR
5.00%
9.53%
12/5/2024
12/5/2030
13,084
12,950
12,948
1.43
118
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Rotation Buyer, LLC
^
(2)(3)(15)
Capital Equipment
SOFR
4.75%
9.08%
12/27/2024
12/27/2031
$
9,041
$
8,920
$
8,919
0.98
%
SCP Eye Care HoldCo, LLC
^*
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
5.50%
9.90%
10/7/2022
10/7/2029
157
154
157
0.02
Seahawk Bidco, LLC
^
(2)(3)(15)
Consumer Services
SOFR
4.75%
9.10%
12/19/2024
12/19/2031
12,441
12,310
12,310
1.36
Smarsh Inc.
^*
(2)(3)(15)
Software
SOFR
5.75%
10.08%
2/18/2022
2/18/2029
7,509
7,396
7,509
0.83
SPay, Inc.
^
(2)(3)(11)
Leisure Products & Services
SOFR
2.88%, 6.38% PIK
13.84%
6/15/2018
6/15/2026
29,238
29,195
25,109
2.77
Speedstar Holding LLC
^*
(2)(3)(15)
Auto Aftermarket & Services
SOFR
6.00%
10.59%
7/2/2024
7/22/2027
18,170
17,951
17,942
1.98
Spotless Brands, LLC
^*
(2)(3)(15)
Consumer Services
SOFR
5.75%
10.03%
6/21/2022
7/25/2028
28,372
27,869
28,442
3.14
Spotless Brands, LLC
^
(2)(3)(15)
Consumer Services
SOFR
5.50%
10.06%
8/30/2024
7/25/2028
21
(63)
(25)
0.00
Tank Holding Corp.
^*
(2)(3)(11)(15)
Capital Equipment
SOFR
5.75%
10.00%
3/31/2022
3/31/2028
21,214
20,956
21,213
2.34
Tank Holding Corp.
^
(2)(3)(11)(15)
Capital Equipment
SOFR
6.00%
10.35%
9/26/2024
3/31/2028
3,395
3,361
3,395
0.38
TCFI Aevex LLC
*
(2)(3)(11)
Aerospace & Defense
SOFR
6.00%
10.36%
3/18/2020
3/18/2026
10,821
10,771
10,820
1.19
The Chartis Group, LLC
^
(2)(3)(15)
Healthcare & Pharmaceuticals
SOFR
4.50%
8.85%
9/17/2024
9/17/2031
10,410
10,263
10,321
1.14
Total Power Limited (Canada)
^
(2)(3)(7)(15)
Energy: Electricity
CORRA
5.25%
10.16%
7/22/2024
7/22/2030
C$
8,022
5,706
5,486
0.61
Tufin Software North America, Inc.
^*
(2)(3)(11)(15)
Software
SOFR
6.95%
11.29%
8/17/2022
8/17/2028
28,328
27,943
28,202
3.12
Turbo Buyer, Inc.
^*
(2)(3)(15)
Auto Aftermarket & Services
SOFR
6.00%
10.47%
12/2/2019
12/2/2025
2,289
2,275
2,096
0.23
U.S. Legal Support, Inc.
^*
(2)(3)(11)(15)
Business Services
SOFR
5.75%
10.08%
11/30/2018
5/31/2026
17,476
17,453
17,417
1.92
United Flow Technologies Intermediate Holdco II, LLC
^*
(2)(3)(15)
Environmental Industries
SOFR
5.25%
9.59%
6/21/2024
6/21/2031
5,289
5,171
5,269
0.58
US INFRA SVCS Buyer, LLC
^
(2)(3)(11)
Environmental Industries
SOFR
2.50%, 4.75% PIK
12.04%
4/13/2020
4/13/2027
8,197
8,152
7,403
0.82
USR Parent Inc.
^*
(2)(3)(10)
Retail
SOFR
7.60%
12.15%
4/22/2022
4/25/2027
3,333
3,315
3,290
0.36
Vensure Employer Services, Inc.
^*
(2)(15)
Business Services
SOFR
5.00%
9.34%
9/27/2024
9/27/2031
18,140
17,927
18,114
2.00
Wineshipping.com LLC
^
(2)(3)(11)(15)
Beverage & Food
SOFR
5.75%
10.29%
10/29/2021
10/29/2027
5,854
5,791
4,796
0.53
World 50, Inc.
^*
(2)(3)(15)
Business Services
SOFR
5.75%
10.11%
3/22/2024
3/22/2030
18,996
18,638
18,786
2.08
Yellowstone Buyer Acquisition, LLC
^
(2)(3)(11)
Consumer Goods: Durable
SOFR
5.75%
10.48%
9/13/2021
9/13/2027
435
431
402
0.04
YLG Holdings, Inc.
^*
(2)(3)(15)
Consumer Services
SOFR
4.75%
9.32%
9/30/2020
12/23/2030
6,350
6,319
6,271
0.69
First Lien Debt Total
$
1,296,904
$
1,277,666
141.15
%
Second Lien Debt (6.5% of fair value)
11852604 Canada Inc. (Canada)
^
(2)(3)(7)(11)
Healthcare & Pharmaceuticals
SOFR
9.50% (100% PIK)
13.98%
9/30/2021
9/30/2028
$
10,185
$
10,092
$
9,956
1.10
%
Aimbridge Acquisition Co., Inc.
^
(2)(8)(11)
Leisure Products & Services
SOFR
7.50%
11.79%
2/1/2019
2/1/2027
9,241
9,116
1,116
0.12
AP Plastics Acquisition Holdings, LLC
^*
(2)(3)(11)
Chemicals, Plastics & Rubber
SOFR
7.25%
11.61%
8/10/2021
8/10/2029
33,680
33,053
33,680
3.73
AQA Acquisition Holdings, Inc.
^*
(2)(3)
High Tech Industries
SOFR
6.25%
10.84%
3/3/2021
3/3/2029
35,000
34,454
34,913
3.86
Associations, Inc.
^
(9)
Construction & Building
FIXED
14.25% (100% PIK)
14.25%
5/3/2024
5/3/2030
5,494
5,471
5,469
0.60
119
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net Assets
Bayside OPCP, LLC
^
(2)(3)(9)(11)
Healthcare & Pharmaceuticals
SOFR
10.00% (100% PIK)
14.48%
5/31/2023
5/31/2026
$
5,667
$
5,131
$
5,667
0.63
%
Denali Midco 2, LLC
^
(2)
Consumer Services
FIXED
13.00%, (100% PIK)
13.00%
10/4/2024
12/22/2029
1,320
1,296
1,295
0.14
PAI Holdco, Inc.
^
(2)(3)
Auto Aftermarket & Services
SOFR
5.50%, 2.00% PIK
12.09%
10/28/2020
10/28/2028
14,672
14,442
12,888
1.42
TruGreen Limited Partnership
^*
(2)(3)(11)
Consumer Services
SOFR
8.50%
13.09%
11/16/2020
11/2/2028
13,000
12,846
11,483
1.27
Second Lien Debt Total
$
125,901
$
116,467
12.87
%
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
All-In Rate
Acquisition Date
Shares/ Units
Cost
Fair
Value (5)
% of Net Assets
Common and Preferred Equity Investments (5.0% of fair value)
48forty Intermediate Holdings, Inc.
^*
(6)(12)
Transportation: Cargo
11/5/2024
1
$
—
$
—
—
%
ANLG Holdings, LLC
^
(6)(12)
Capital Equipment
6/22/2018
592
592
1,035
0.11
Appriss Health, LLC
^
(6)
Healthcare & Pharmaceuticals
11.00% (100% PIK)
5/6/2021
6
6,268
6,144
0.68
Atlas Ontario LP (Canada)
^
(6)(7)(12)
Business Services
4/7/2021
5,114
5,114
5,114
0.57
Bayside HoldCo, LLC
^
(6)(12)
Healthcare & Pharmaceuticals
5/31/2023
6
—
2,240
0.25
Blackbird Holdco, Inc.
^
(6)
Capital Equipment
12.50% (100% PIK)
12/14/2021
14
14,008
14,005
1.55
Buckeye Group Holdings, L.P.
^
(6)(8)
Auto Aftermarket & Services
11.29% (100% PIK)
12/31/2024
5,117
1,521
1,521
0.17
Buckeye Group Holdings, L.P.
^
(6)(12)
Auto Aftermarket & Services
12/31/2024
9,415
—
—
—
Buckeye Group Holdings, L.P.
^
(6)(12)
Auto Aftermarket & Services
12/31/2024
5,117
—
—
—
CIP Revolution Holdings, LLC
^
(6)(12)
Media: Advertising, Printing & Publishing
8/19/2016
318
318
267
0.03
Cority Software Inc. (Canada)
^
(6)(7)(12)
Software
7/2/2019
250
250
735
0.08
Diligent Corporation
^
(6)
Telecommunications
10.50% (100% PIK)
4/5/2021
14
14,326
14,321
1.58
ECP Parent, LLC
^
(6)(12)
Healthcare & Pharmaceuticals
3/29/2018
268
—
197
0.02
EvolveIP, LLC
^
(6)(12)
Telecommunications
10/30/2024
45
153
45
—
FS NU Investors, LP
^
(6)
Consumer Services
20.00% (100% PIK)
8/9/2024
1
137
145
0.02
GB Vino Parent, L.P.
^
(6)(12)
Beverage & Food
10/29/2021
4
274
86
0.01
HIG Intermediate, Inc.
^
(6)
Diversified Financial Services
10.50%
12/10/2024
1
751
751
0.08
Integrity Marketing Group, LLC
^
(6)
Diversified Financial Services
10.50% (100% PIK)
12/21/2021
20,577
20,496
19,942
2.20
NearU Holdings LLC
^
(6)(12)
Consumer Services
8/16/2022
25
2,470
625
0.07
NEFCO Holding Company LLC
^
(6)
Construction & Building
8.00%
8/5/2022
1
608
608
0.07
120
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated (1)
Footnotes
Industry
All-In Rate
Acquisition Date
Shares/ Units
Cost
Fair
Value (5)
% of Net Assets
North Haven Goldfinch Topco, LLC
^
(6)(12)
Containers, Packaging & Glass
6/18/2018
2,315
$
2,315
$
—
—
%
Pascal Ultimate Holdings, L.P
^
(6)(12)
Capital Equipment
7/21/2021
36
346
766
0.08
Profile Holdings I, LP
^
(6)(12)
Chemicals, Plastics & Rubber
3/8/2022
5
523
474
0.05
Sinch AB (Sweden)
^
(6)(7)(12)
High Tech Industries
3/26/2019
106
1,168
199
0.02
Summit K2 Midco, Inc.
^
(6)(12)
Diversified Financial Services
4/27/2023
121
99
177
0.02
Talon MidCo 1 Limited
^
(6)(12)
Software
8/17/2022
1,018
1,456
1,955
0.22
Tank Holding Corp.
^
(6)(12)
Capital Equipment
3/26/2019
850
—
3,485
0.38
Titan DI Preferred Holdings, Inc.
^
(6)
Energy: Oil & Gas
13.50% (100% PIK)
2/11/2020
12,031
11,933
12,031
1.33
Turbo Buyer, Inc.
^
(6)(12)
Auto Aftermarket & Services
12/2/2019
1,925
933
1,274
0.14
TW LRW Holdings, LLC
^*
(6)(12)
Business Services
6/14/2024
2
—
—
—
U.S. Legal Support Investment Holdings, LLC
^
(6)(12)
Business Services
11/30/2018
641
640
819
0.09
Zenith American Holding, Inc.
^
(6)(12)
Business Services
12/13/2017
1,564
752
1,955
0.22
Equity Investments Total
$
87,451
$
90,916
10.04
%
Total investments—non-controlled/non-affiliated
$
1,510,256
$
1,485,049
164.06
%
Investments—non-controlled/affiliated
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair
Value (5)
% of Net
Assets
First Lien Debt (2.6% of fair value)
SPF Borrower, LLC
^
(2)(3)(11)(14)(15)
Healthcare & Pharmaceuticals
SOFR
6.25%
10.58%
2/1/2024
2/1/2028
$
31,372
$
31,372
$
31,372
3.47
%
SPF Borrower, LLC
^
(2)(3)(11)(14)
Healthcare & Pharmaceuticals
SOFR
9.50%
13.83%
2/1/2024
2/1/2028
14,659
14,659
14,659
1.62
First Lien Debt Total
$
46,031
$
46,031
5.09
%
Investments—non-controlled/affiliated
Footnotes
Industry
All-In Rate
Acquisition Date
Shares/ Units
Cost
Fair Value (5)
% of Net Assets
Equity Investments (1.4% of fair value)
SPF HoldCo LLC
^
(6)(12)(14)
Healthcare & Pharmaceuticals
2/1/2024
15,440
$
20,828
$
25,830
2.85
%
Equity Investments Total
$
20,828
$
25,830
2.85
%
Total investments—non-controlled/affiliated
$
66,859
$
71,861
7.94
%
121
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—controlled/affiliated
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par Amount/ LLC Interest
Cost
Fair Value (5)
% of Net
Assets
Investment Funds (13.7% of fair value)
Middle Market Credit Fund II, LLC, Member's Interest
^
(7)(13)
Investment Funds
FIXED
20.86%
20.86%
11/3/2020
12/31/2030
$
78,122
$
78,096
$
63,997
7.07
%
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest
^
(7)(13)
Investment Funds
FIXED
11.40%
11.40%
2/29/2016
12/31/2027
193,000
193,001
182,636
20.18
Middle Market Credit Fund, LLC, Mezzanine Loan
^
(2)(7)(9)(13)
Investment Funds
SOFR
5.50%
9.79%
6/30/2016
5/21/2025
—
—
—
—
Investment Funds Total
$
271,097
$
246,633
27.25
%
Total investments—controlled/affiliated
$
271,097
$
246,633
27.25
%
Total investments
$
1,848,212
$
1,803,543
199.25
%
Derivative Instrument
Counterparty
Company Pays***
Company Receives
Maturity Date
Notional Amount
Fair Value(5)
Change in Unrealized Appreciation / (Depreciation)
Upfront Payments / Receipts
Interest Rate Swap
Morgan Stanley Capital Services LLC
SOFR + 3.139%
8.20%
December 1, 2028
$
85,000
$
164
$
(821)
$
—
Interest Rate Swap
JP Morgan Chase Bank N.A.
SOFR + 3.2345%
6.75%
February 18, 2030
$
300,000
$
(6,875)
$
(6,875)
$
—
Total
$
385,000
$
(6,711)
$
(7,696)
$
—
Derivative Instruments***
Counterparty
Notional Amount to be Purchased
Notional Amount to be Sold
Maturity Date
Unrealized Appreciation (Depreciation)
Forward Currency Contract
Barclays Bank PLC
$
29,984
£
23,100
1/15/2025
$
1,089
Forward Currency Contract
Barclays Bank PLC
$
5,831
C$
8,000
1/15/2025
269
Forward Currency Contract
Barclays Bank PLC
$
846
£
674
1/15/2025
3
Forward Currency Contract
Barclays Bank PLC
$
632
€
602
1/15/2025
9
Forward Currency Contract
Barclays Bank PLC
$
1,630
€
1,500
2/4/2025
75
Forward Currency Contract
Barclays Bank PLC
$
777
£
600
2/4/2025
27
Forward Currency Contract
Barclays Bank PLC
$
3,233
€
2,978
2/4/2025
146
Forward Currency Contract
Barclays Bank PLC
$
2,419
£
1,869
2/4/2025
81
Total Derivative Instruments
$
1,699
^ Denotes that all or a portion of the assets are owned by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CGBD” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 9, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”).
* Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 9, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of the Company.
122
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
** Par amount is denominated in USD (“$”) unless otherwise noted, as denominated in Canadian Dollar (“C$”), Euro (“€”) or British Pound (“£”).
***Refer to Note 8, Derivative Instruments, to these consolidated financial statements for further information.
(a) The interest rate paid by the Company for each interest period is calculated on the basis of a compounded average daily SOFR rate plus 3.139%. The interest rate swap settles quarterly on each of March 1, June 1, September 1, and December 1. Refer to Note 8, Derivative Instruments, to these consolidated financial statements for further details.
(b) Commencing on the effective date of August 18, 2025, the interest rate paid by the Company for each interest period is calculated on the basis of a compounded average daily SOFR rate plus 3.235%. The interest rate swap settles semi-annually on each of February 18 and August 18. Refer to Note 8, Derivative Instruments, to these consolidated financial statements for further details.
(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2024, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2024, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either the Secured Overnight Financing Rate (“SOFR”), or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2024. As of December 31, 2024, the reference rates for variable rate loans were the 30-day SOFR at 4.30%, the 90-day SOFR at 4.29%, the 180-day SOFR at 4.25%, the daily SONIA at 4.70%, the 90-day EURIBOR at 2.79%, the 180-day EURIBOR at 2.63%, and the 30-day CORRA at 4.97%.
(3)Loan includes interest rate floor feature, which ranges from 0.50% to 3.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment funds was determined using significant unobservable inputs.
(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of December 31, 2024, the aggregate fair value of these securities is $116,746, or 12.90% of the Company’s net assets.
(7)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
(8)Represents an investment on non-accrual status as of December 31, 2024.
(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.
(10)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.
(11)Loans include a credit spread adjustment that typically ranges from 0.10% to 0.43%.
(12)Represents a non-income producing security as of December 31, 2024.
(13)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC and Note 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2024, were as follows:
Investments—controlled/affiliated
Fair Value as of December 31, 2023
Additions/Purchases
Reductions/Sales/ Paydowns
Net Realized Gain (Loss)
Net Change in Unrealized Appreciation (Depreciation)
Fair Value as of December 31, 2024
Dividend and Interest Income
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest
$
181,960
$
—
$
—
$
—
$
676
$
182,636
$
22,000
Middle Market Credit Fund, Mezzanine Loan
—
—
—
—
—
—
—
Middle Market Credit Fund II, LLC, Member's Interest
67,419
—
—
—
(3,422)
63,997
12,905
Total investments—controlled/affiliated
$
249,379
$
—
$
—
$
—
$
(2,746)
$
246,633
$
34,905
123
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
(14)Under the Investment Company Act, the Company is deemed an “affiliated person” of the portfolio companies because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to the portfolio companies during the year ended December 31, 2024 were as follows:
Investments—non-controlled/affiliated
Fair Value as of December 31, 2023
Additions/Purchases
Reductions/Sales/ Paydowns
Net Realized Gain (Loss)
Net Change in Unrealized Appreciation (Depreciation)
Fair Value as of December 31, 2024
Interest and PIK Income
SPF Borrower, LLC
$
—
$
31,372
$
—
$
—
$
—
$
31,372
$
3,354
SPF Borrower, LLC
—
14,659
—
—
14,659
1,982
SPF HoldCo, LLC (Equity)
—
20,828
—
5,002
25,830
—
Direct Travel, Inc.
44,407
—
(43,341)
—
(1,066)
—
2,352
Direct Travel, Inc.
3,772
—
(3,696)
—
(76)
—
364
Direct Travel, Inc. (Equity)
5,203
—
(4,013)
4,013
(5,203)
—
—
Total investments—non-controlled/affiliated
$
53,382
$
66,859
$
(51,050)
$
4,013
$
(1,343)
$
71,861
$
8,052
(15)As of December 31, 2024, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount **
Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
Accession Risk Management Group, Inc.
Revolver
0.50%
$
462
$
4
ADPD Holdings, LLC
Delayed Draw
1.00
1,709
(146)
ADPD Holdings, LLC
Revolver
0.50
284
(24)
Advanced Web Technologies Holding Company
Delayed Draw
1.00
2,371
(1)
Advanced Web Technologies Holding Company
Revolver
0.50
1,205
(1)
Alpine Acquisition Corp II
Revolver
0.50
1,965
(387)
AmpersCap LLC
Delayed Draw
1.00
3,709
(74)
Apex Companies Holdings, LLC
Delayed Draw
1.00
4,915
(30)
Applied Technical Services, LLC
Delayed Draw
1.00
512
(7)
Applied Technical Services, LLC
Revolver
0.50
19
—
Appriss Health, LLC
Revolver
0.50
3,212
(21)
Artifact Bidco, Inc.
Delayed Draw
0.50
172
(1)
Artifact Bidco, Inc.
Revolver
0.35
123
(1)
Ascend Buyer, LLC
Revolver
0.50
856
(1)
Associations, Inc.
Delayed Draw
—
846
8
Associations, Inc.
Revolver
0.50
407
4
Athlete Buyer, LLC
Delayed Draw
1.00
4,950
(79)
Atlas US Finco, Inc.
Revolver
0.50
268
0
Auditboard, Inc.
Delayed Draw
0.75
2,857
(17)
Auditboard, Inc.
Revolver
0.50
1,143
(7)
Avalara, Inc.
Revolver
0.50
2,250
—
124
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount **
Fair Value
Azurite Intermediate Holdings, Inc.
Revolver
0.50%
$
397
$
8
Bayside OPCP, LLC
Revolver
0.50
1,974
—
Big Bus Tours Group Limited (United Kingdom)
Delayed Draw
1.50
1,370
(38)
Bingo Group Buyer, Inc.
Delayed Draw
0.75
1,066
11
Bingo Group Buyer, Inc.
Revolver
0.50
397
4
Birsa S.p.A. (Italy)
Delayed Draw
1.25
€
5,076
(110)
Bradyifs Holdings, LLC
Delayed Draw
1.00
206
1
Celerion Buyer, Inc.
Delayed Draw
1.00
499
(4)
Celerion Buyer, Inc.
Revolver
0.50
249
(2)
Chemical Computing Group ULC (Canada)
Revolver
0.50
29
—
CircusTrix Holdings, LLC
Delayed Draw
1.00
323
4
CoreWeave Compute Acquisition Co. IV, LLC
Delayed Draw
0.50
14,827
(222)
Cority Software Inc. (Canada)
Revolver
0.50
3,000
(6)
Coupa Holdings, LLC
Delayed Draw
1.50
771
10
Coupa Holdings, LLC
Revolver
0.50
591
8
CST Holding Company
Revolver
0.50
470
0
Dance Midco S.a.r.l. (United Kingdom)
Delayed Draw
1.00
€
1,099
(15)
Dwyer Instruments, Inc.
Delayed Draw
1.00
1,680
—
Dwyer Instruments, Inc.
Revolver
0.50
3,194
—
Ellkay, LLC
Revolver
0.50
1,071
(124)
Essential Services Holding Corporation
Delayed Draw
1.00
149
(0
)
Essential Services Holding Corporation
Revolver
0.50
93
(0
)
Excel Fitness Holdings, Inc.
Delayed Draw
1.00
1,386
—
Excel Fitness Holdings, Inc.
Revolver
0.50
891
(6)
Excelitas Technologies Corp.
Delayed Draw
1.00
25
—
Excelitas Technologies Corp.
Revolver
0.50
692
(4)
FPG Intermediate Holdco, LLC
Delayed Draw
—
6
(2)
Galileo Parent, Inc.
Revolver
0.50
1,959
—
Greenhouse Software, Inc.
Revolver
0.50
2,204
13
GS AcquisitionCo, Inc.
Delayed Draw
0.50
29
0
GS AcquisitionCo, Inc.
Revolver
0.50
52
0
Heartland Home Services, Inc.
Revolver
0.50
457
(21)
Hercules Borrower LLC
Revolver
0.50
2,160
—
Hoosier Intermediate, LLC
Revolver
0.50
2,400
—
HS Spa Holdings Inc.
Delayed Draw
0.50
326
—
HS Spa Holdings Inc.
Revolver
0.50
988
6
125
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount **
Fair Value
Icefall Parent, Inc.
Revolver
0.50%
$
744
$
(1)
iCIMS, Inc.
Revolver
0.50
1,946
(35)
IG Investments Holdings, LLC
Revolver
0.50
219
—
IQN Holding Corp.
Revolver
0.50
297
—
Kaseya, Inc.
Delayed Draw
1.00
853
—
Kaseya, Inc.
Revolver
0.50
1,541
—
Lifelong Learner Holdings, LLC
Revolver
0.50
42
(4)
LVF Holdings, Inc.
Revolver
0.38
1,733
—
Material Holdings, LLC
Revolver
1.00
192
—
Medical Manufacturing Technologies, LLC
Revolver
0.50
558
(9)
NEFCO Holding Company LLC
Delayed Draw
1.00
1,545
(4)
NEFCO Holding Company LLC
Revolver
0.50
3,352
(8)
NMI AcquisitionCo, Inc.
Revolver
0.50
1,280
(1)
North Haven Fairway Buyer, LLC
Delayed Draw
1.00
6,036
(57)
North Haven Fairway Buyer, LLC
Revolver
0.50
853
—
Oak Purchaser, Inc.
Delayed Draw
0.50
1,349
(23)
Oak Purchaser, Inc.
Revolver
0.50
584
(9)
Optimizely North America Inc.
Revolver
0.50
682
(4)
Oranje Holdco, Inc.
Revolver
0.50
1,006
7
Orthrus Limited (United Kingdom)
Delayed Draw
0.50
£
314
(4)
PAM Bidco Limited (United Kingdom)
Delayed Draw
3.23
£
10
—
PAM Bidco Limited (United Kingdom)
Delayed Draw
2.19
£
890
(14)
PDI TA Holdings, Inc
Delayed Draw
0.50
47
(0
)
PDI TA Holdings, Inc
Revolver
0.50
46
(0
)
Pestco Intermediate, LLC
Delayed Draw
1.00
1,223
(14)
Pestco Intermediate, LLC
Revolver
0.50
442
4
PF Atlantic Holdco 2, LLC
Revolver
0.50
2,759
—
PPV Intermediate Holdings, LLC
Delayed Draw
1.00
8,696
—
Prophix Software Inc. (Canada)
Delayed Draw
—
1,320
(5)
Prophix Software Inc. (Canada)
Revolver
0.50
1,994
(7)
PXO Holdings I Corp.
Revolver
0.50
920
(0
)
QBS Parent, Inc.
Revolver
0.38
1,010
(5)
QNNECT, LLC
Delayed Draw
1.00
376
1
Quantic Electronics, LLC
Revolver
0.50
644
—
Radwell Parent, LLC
Delayed Draw
0.50
2,020
(15)
Radwell Parent, LLC
Revolver
0.38
1,116
(8)
126
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Investments—non-controlled/non-affiliated
Type
Unused Fee
Par/ Principal Amount **
Fair Value
Rialto Management Group, LLC
Revolver
0.50%
$
451
$
(5)
Rotation Buyer, LLC
Delayed Draw
1.00
2,254
(22)
Rotation Buyer, LLC
Revolver
0.50
874
(9)
SCP Eye Care HoldCo, LLC
Revolver
0.50
19
0
Seahawk Bidco, LLC
Delayed Draw
1.00
3,888
(29)
Seahawk Bidco, LLC
Revolver
0.50
1,166
(9)
Smarsh Inc.
Delayed Draw
1.00
816
—
Smarsh Inc.
Revolver
0.50
245
—
Speedstar Holding LLC
Delayed Draw
1.00
1,789
(20)
SPF Borrower, LLC
Revolver
0.50
1,544
—
Spotless Brands, LLC
Delayed Draw
1.00
9,029
(46)
Spotless Brands, LLC
Revolver
0.50
1,096
3
Tank Holding Corp.
Delayed Draw
1.00
162
—
Tank Holding Corp.
Revolver
0.38
1,655
—
The Chartis Group, LLC
Delayed Draw
1.00
3,187
(19)
The Chartis Group, LLC
Revolver
0.50
1,593
(9)
Total Power Limited (Canada)
Delayed Draw
0.50
C$
1,958
(35)
Total Power Limited (Canada)
Revolver
0.50
C$
1,111
(20)
Tufin Software North America, Inc.
Revolver
0.50
1,339
(6)
Turbo Buyer, Inc.
Revolver
0.50
609
(40)
U.S. Legal Support, Inc.
Revolver
0.50
816
(3)
United Flow Technologies Intermediate Holdco II, LLC
Delayed Draw
1.00
2,520
(6)
United Flow Technologies Intermediate Holdco II, LLC
Revolver
0.50
559
(1)
Vensure Employer Services, Inc.
Delayed Draw
0.50
3,767
(4)
Wineshipping.com LLC
Revolver
0.50
238
(41)
World 50, Inc.
Revolver
0.50
860
(9)
YLG Holdings, Inc.
Delayed Draw
0.50
626
(7)
YLG Holdings, Inc.
Revolver
0.38
503
(5)
Total unfunded commitments
$
179,247
$
(1,827)
127
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
The type of investments as of December 31, 2024 consisted of the following:
Type
Amortized Cost
Fair Value
% of Fair Value
First Lien Debt
$
1,342,935
$
1,323,697
73.4
%
Second Lien Debt
125,901
116,467
6.4
Equity Investments
108,279
116,746
6.5
Investment Funds
271,097
246,633
13.7
Total
$
1,848,212
$
1,803,543
100.0
%
The rate type of debt investments as of December 31, 2024 was as follows:
Rate Type
Amortized Cost
Fair Value
% of Fair Value of First and Second Lien Debt
Floating Rate
$
1,463,336
$
1,434,667
99.6
%
Fixed Rate
5,471
5,469
0.4
Total
$
1,468,807
$
1,440,136
100.0
%
The industry composition of investments as of December 31, 2024 was as follows:
Industry
Amortized Cost
Fair Value
% of Fair Value
Aerospace & Defense
$
75,745
$
66,957
3.7
%
Auto Aftermarket & Services
44,427
43,024
2.4
Beverage & Food
25,822
24,842
1.4
Business Services
105,807
107,163
5.9
Capital Equipment
73,037
77,453
4.3
Chemicals, Plastics & Rubber
42,940
43,651
2.4
Construction & Building
47,139
47,414
2.6
Consumer Goods: Durable
4,835
4,662
0.2
Consumer Goods: Non-Durable
6,998
7,176
0.4
Consumer Services
120,893
116,919
6.5
Containers, Packaging & Glass
51,606
46,596
2.6
Diversified Financial Services
100,976
100,093
5.5
Energy: Electricity
7,210
6,998
0.4
Energy: Oil & Gas
11,928
12,026
0.7
Environmental Industries
64,612
64,757
3.6
Healthcare & Pharmaceuticals
226,626
232,628
12.9
High Tech Industries
144,375
144,398
8.0
Investment Funds
271,097
246,633
13.7
Leisure Products & Services
93,348
80,367
4.5
Media: Advertising, Printing & Publishing
15,032
15,717
0.9
128
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2024
(amounts in thousands)
Industry
Amortized Cost
Fair Value
% of Fair Value
Media: Diversified & Production
$
31,881
$
32,124
1.8
%
Retail
23,129
23,290
1.3
Software
188,238
189,975
10.5
Sovereign & Public Finance
79
81
0.0
Telecommunications
39,664
39,566
2.2
Transportation: Cargo
8,738
6,726
0.4
Utilities: Water
2,419
2,330
0.1
Wholesale
19,611
19,977
1.1
Total
$
1,848,212
$
1,803,543
100.0
%
The geographical composition of investments as of December 31, 2024 was as follows:
Geography
Amortized Cost
Fair Value
% of Fair Value
Australia
$
2,226
$
2,286
0.1
%
Canada
58,526
58,755
3.3
Italy
3,190
3,094
0.2
Luxembourg
43,515
41,365
2.3
Sweden
1,168
199
0.0
United Kingdom
50,613
49,188
2.7
United States
1,688,974
1,648,656
91.4
Total
$
1,848,212
$
1,803,543
100.0
%
The accompanying notes are an integral part of these consolidated financial statements.
(amounts in thousands, except share and per share data, unless otherwise indicated)
1. ORGANIZATION
Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “CGBD” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).
The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. The Company's core investment strategy focuses on lending to U.S. middle market companies, which the Company defines as companies with approximately $25.0 million or greater of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle’s Global Credit platform while offering risk-diversifying portfolio benefits. The Company seeks to achieve its objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of its assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities and structured products). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms.
The Company invests primarily in loans to middle market companies whose debt has been rated below investment grade, or would likely be rated below investment grade if it was rated. These securities, which are often referred to as “junk,” have predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.” On June 19, 2017, the Company closed its initial public offering, issuing 9,454,200 shares of its common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, the Company received cash proceeds of $169,488. Shares of common stock of the Company began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017. Effective April 12, 2022, the Company changed its name from “TCG BDC, Inc.” to “Carlyle Secured Lending, Inc.”
The Company is externally managed by its investment adviser, Carlyle Global Credit Investment Management L.L.C. (the “Investment Adviser”), a wholly owned subsidiary of The Carlyle Group Inc. and an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle Global Credit Administration L.L.C. (the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C. (“CIM”), a wholly owned subsidiary of The Carlyle Group Inc. “Carlyle” refers to The Carlyle Group Inc. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global investment firm publicly traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.
TCG BDC SPV LLC (“SPV”) is a Delaware limited liability company that was formed on January 3, 2013. Prior to the termination of its senior secured credit facility on December 11, 2020, SPV invested in first and second lien senior secured loans. SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation.
On June 26, 2015, the Company completed a $400,000 term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the
2015-1 Notes and issuing $449,000 in new notes (the “2015-1R Notes”). The 2015-1R Notes were secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. On July 2, 2024, the 2015-1 Issuer completed a refinancing of the 2015-1R Notes (the “2015-1R Refinancing”) by redeeming in full the 2015-1R Notes and issuing $410,000 in new notes and loans (the “2015-1N Debt” and together with the 2015-1R Notes, the “Securitizations"), which was inclusive of $30,000 in Class C-R Notes retained by the Company as of both July 2, 2024 and December 31, 2025. The Class C-R Notes are eliminated in consolidation. Refer to Note 9, Borrowings, to these consolidated financial statements for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation.
On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, as amended from time to time, to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $175,000 each as of December 31, 2025, which was subsequently increased to $250,000 each on February 11, 2026. Refer to Note 5, Middle Market Credit Fund, LLC, to these consolidated financial statements for details.
On November 3, 2020, the Company and Cliffwater Corporate Lending Fund (“CCLF”), an investment vehicle managed by Cliffwater LLC, entered into a limited liability company agreement to co-manage Middle Market Credit Fund II, LLC, and its wholly owned subsidiary Middle Market Credit Fund II SPV, LLC (together, “Credit Fund II”). Prior to the completion of the Credit Fund II Purchase (as defined below), Credit Fund II was managed by a four-member board of managers, on which the Company and CCLF each had equal representation, and the Company and CCLF held approximately 84.13% and 15.87% economic ownership of Credit Fund II, respectively. Credit Fund II invests in senior secured loans of middle market companies.
On February 10, 2025, the Company and CCLF entered into an amendment to the Credit Fund II limited liability company agreement (as so amended, the “Amended Credit Fund II LLCA”). Pursuant to the terms of the Amended Credit Fund II LLCA, Credit Fund II distributed $2,667 to CCLF, and the Company contributed $140,000 in cash to Credit Fund II. Such distributions and contributions were accounted for as a reduction in CCLF's membership interest based on the net asset value of Credit Fund II as of December 31, 2024. On February 11, 2025, the Company entered into a membership interest purchase agreement to purchase CCLF's remaining membership interest for cash at the net asset value thereof as of December 31, 2024 (the “Credit Fund II Purchase”), after which Credit Fund II became a wholly owned subsidiary of the Company and in connection therewith the CCLF board members resigned. See Note 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements for details.
On May 5, 2020, the Company issued and sold 2,000,000 shares of cumulative convertible preferred stock, par value $0.01 per share (the “Preferred Stock”), to an affiliate of Carlyle in a private placement at a price of $25 per share. On March 27, 2025, in connection with the CSL III Merger (as defined below), the Company entered into a preferred stock exchange agreement (the “ Preferred Stock Exchange Agreement”) with CIM, the holder of record of shares of the Preferred Stock. Pursuant to the Preferred Stock Exchange Agreement, CIM surrendered all 2,000,000 outstanding shares of Preferred Stock in exchange for a number of shares of the Company’s common stock equal to the aggregate liquidation preference of the Preferred Stock divided by the net asset value per share of the Company as of March 25, 2025 (the “Preferred Stock Exchange”). Immediately prior to the Preferred Stock Exchange, the Company paid all accrued and unpaid dividends on the Preferred Stock. Following the Preferred Stock Exchange, the Preferred Stock was cancelled and is no longer outstanding. See Note 11, Net Assets, to these consolidated financial statements for additional information regarding the Preferred Stock and the Preferred Stock Exchange.
On March 27, 2025, the Company completed its acquisition of Carlyle Secured Lending III (“CSL III”), a Maryland corporation, pursuant to the Agreement and Plan of Merger (as amended the “Merger Agreement”), dated as of August 2, 2024, by and among the Company, CSL III, Blue Fox Merger Sub Inc., a Maryland corporation and wholly owned subsidiary of the Company (“Merger Sub”), and, solely for the limited purposes set forth therein, CSL III Advisor, LLC, a Delaware limited liability company and investment adviser to CSL III (“CSL III Advisor”), and the Investment Adviser (together with CSL III Advisor, the “Advisors”), pursuant to which, Merger Sub first merged with and into CSL III, with CSL III continuing as the surviving company and as a wholly owned subsidiary of the Company (the “Merger”) and immediately thereafter, CSL III merged with and into the Company, with the Company continuing as the surviving company (together with the Merger, the “CSL III Merger”). Commencing on the completion of the CSL III Merger, all activity is consolidated in these consolidated financial statements. Refer to Note 16, Merger with CSL III, to these consolidated financial statements for additional information regarding the CSL III Merger.
Carlyle Secured Lending III SPV, L.L.C. (the “CSL III SPV”) is a Delaware limited liability company formed on August 31, 2022, that became a wholly owned and consolidated subsidiary of the Company as a result of the CSL III Merger. CSL III SPV invests in first and second lien senior secured loans and is consolidated in these consolidated financial statements commencing on the completion of the CSL III Merger.
On December 23, 2025, the Company and Carlyle Credit Solutions, Inc. (“CARS”), an affiliated BDC of the Company, together with certain affiliates of Sixth Street Partners, LLC, Sixth Street Lending Partners and Sixth Street Specialty Lending, Inc. (together, “Sixth Street”) (collectively with the Company and CARS, the “SCP Members”), entered into an amended and restated limited liability company agreement, as amended from time to time, to co-manage Structured Credit Partners JV, LLC (“Structured Credit Partners”). The SCP Members each hold 25% voting interests through non-economic Class A membership interests. As of December 31, 2025, Structured Credit Partners had not commenced operations, and no capital had been contributed to the joint venture. Each Carlyle SCP Member’s initial capital commitment to Structured Credit Partners is up to $150,000, if and when requested, and the total initial capital commitments of all SCP Members to Structured Credit Partners are up to $600,000, if and when requested. Each SCP Member has equal representation on the board of managers of Structured Credit Partners.
Funding of capital commitments generally requires board approval. In accordance with their respective economic interests, the SCP Members indirectly bear an allocable share of all expenses and other obligations of Structured Credit Partners. Structured Credit Partners will primarily invest in broadly syndicated loans and will be co-managed by Carlyle and Sixth Street. The broadly syndicated loans will be financed by financing subsidiaries that include warehouses and collateralized loan obligations. It is the intention of the SCP Members that Structured Credit Partners’ capital be allocated over time approximately equally among financing subsidiaries managed by affiliates of the Company and affiliates of Sixth Street. Structured Credit Partners is managed by eight board members, with each member having equal representation. Refer to Note 7, Structured Credit Partners, to these consolidated financial statements for additional information regarding Structured Credit Partners.
As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).
To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPV, the 2015-1 Issuer, the CSL III SPV, and the Credit Fund II. All significant intercompany balances and transactions have been eliminated. U.S. GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.
The annual financial statements have been prepared in accordance with U.S. GAAP for annual financial information and pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the years presented have been included. These adjustments are of a normal, recurring nature.
Certain prior period disclosures within the Note 3, Fair Value Measurements, have been amended to conform to the current period presentation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment at the time of exit using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3, Fair Value Measurements, to these consolidated financial statements for further information about fair value measurements.
Derivative Instruments
The Company follows the guidance in Topic 815, Derivatives and Hedging (“ASC 815”), when accounting for derivative instruments. The Company recognizes all derivative instruments at fair value as either assets or liabilities in its consolidated financial statements. Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process.
The Company has in the past and may in the future use forward currency contracts to economically hedge the currency exposure associated with certain foreign-denominated investments. The use of forward currency contracts does not eliminate fluctuations in the price of the underlying securities the Company owns or intends to acquire but establishes a rate of exchange in advance. Until the contracts are closed, fluctuations in the value of these contracts are measured by the difference in the exchange rates on the contract date and reporting date and are recorded as net change in unrealized gain (loss) on forward currency contracts within the Consolidated Statements of Operations. When the contracts are closed, realized gains (losses) are recorded as realized gain (loss) on forward currency contracts within the Consolidated Statements of Operations. The forward currency contracts are recorded at fair value on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. The change in fair value of the forward currency contracts is reflected as net unrealized (gain) loss on forward currency contracts within the Consolidated Statements of Cash Flows. Refer to Note 8, Derivative Instruments, to these consolidated financial statements for further information.
The Company uses interest rate swaps to hedge some of the Company's fixed rate debt. The Company designated the interest rate swaps as the hedging instrument in an effective hedge accounting relationship and therefore the periodic payments and receipts are recognized as components of interest expense and credit facility fees within the accompanying Consolidated Statements of Operations. Depending on the nature of the balance at the end of the period, the fair value of the interest rate swap is either an asset and included in derivative assets, at fair value on the accompanying Consolidated Statements of Assets and Liabilities or a liability and included in derivative liabilities, at fair value on accompanying Consolidated Statements of Assets and Liabilities. The change in fair value of the interest rate swap is offset by a change in the carrying value of the fixed rate debt. The change in fair value of the interest rate swap is reflected as net unrealized gain (loss) on derivative instruments within the Consolidated Statements of Cash Flows.
Any amounts held by the Company in a separate account to cover collateral obligations to the counterparty under the terms of the ISDA Master Agreement (as defined in Note 8, Derivative Instruments, to these consolidated financial statements) and interest rate swap agreements are included in cash, cash equivalents, and restricted cash on the accompanying Consolidated Statements of Assets and Liabilities. Any amounts paid to and held by the counterparty to cover collateral obligations under the terms of the interest rate swap agreement are included in prepaid expenses and other assets on the accompanying Consolidated Statements of Assets and Liabilities. Any amounts paid from the counterparty due to market value fluctuations to cover collateral under the terms of the interest rate swap agreement are included in other accrued expenses and liabilities on accompanying Consolidated Statements of Assets and Liabilities.
Cash, cash equivalents and restricted cash consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash, cash equivalents and restricted cash are held with three large financial institutions and cash held at each financial institution may, at times, exceed the Federal Deposit Insurance Corporation insured limit. As of December 31, 2025 and 2024, the Company held restricted cash balances of $31,474 and $26,904, respectively. Restricted cash balances represent amounts that are collected and held by trustees appointed by the Company for payment of interest expense and principal on the outstanding borrowings and reinvestment into new assets. Restricted cash balances also include amounts held by the Company in a separate account to cover collateral obligations under the terms of any interest rate swap agreements. The amounts are held by the trustees as custodians of the assets securing certain of the Company’s financing transactions. There was no restricted cash denominated in a foreign currency as of December 31, 2025. As of December 31, 2024, the Company held $6 of restricted cash denominated in a foreign currency. As of December 31, 2025 and 2024, the cost of foreign currencies was $3,453 and $2,710, respectively. As of December 31, 2025 and 2024, the fair value of foreign currencies was $3,467 and $2,716, respectively.
Revenue Recognition
Interest from Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any.
The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK income represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. As of December 31, 2025 and 2024, the fair value of the loans in the portfolio with PIK provisions was $305,090 and $235,895, respectively, which represents approximately 12.4% and 13.1%, respectively, of total investments at fair value. For the years ended December 31, 2025, 2024, and 2023 the Company earned $23,115, $21,425 and $20,491 in PIK income, respectively.
Dividend Income
Dividend income from the investment funds, Credit Fund and Credit Fund II, and other investments funds, if any, is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment funds and are expected to be collected.
Other Income
Other income may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the years ended December 31, 2025, 2024, and 2023, the Company earned $5,309, $4,679 and $5,003, respectively, in other income, primarily from amendment fees, prepayment fees and unused commitment fees.
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are current or there is no longer any reasonable doubt that such principal or interest will be collected in full and, in management’s judgment, are likely to remain current. Management may determine not to place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2025 and 2024, the fair value of investments on non-accrual status was $30,541 and $10,393, respectively. The remaining income producing investments were performing and current on their interest payments as of December 31, 2025 and 2024 and for the periods then ended.
Credit Facilities, Senior Notes, and Debt Securitization – Related Costs, Expenses and Deferred Financing Costs
The Credit Facilities, the 2015-1N Debt, and the Senior Notes, each as defined within Note 9, Borrowings, to these consolidated financial statements, are recorded at carrying value, which approximates fair value. Interest expense and unused commitment fees on the Credit Facilities are recorded on an accrual basis. Unused commitment fees are included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.
Deferred financing costs include capitalized expenses related to the closing or amendments of the Credit Facilities. Amortization of deferred financing costs for the Credit Facilities is computed on the straight-line basis over the respective term of each Credit Facility. The unamortized balance of such costs is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.
Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1N Debt and Senior Notes. Amortization of debt issuance costs for the notes is computed on the effective yield method over the term of the notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations. Refer to Note 9, Borrowings, to these consolidated financial statements for additional information regarding the Company’s financing activity.
Asset Acquisition
The CSL III Merger and Credit Fund II Purchase were accounted for under the asset acquisition method of accounting in accordance with ASC 805 – Business Combinations – Related Issues (“ASC Topic 805”), also referred to as “purchase accounting.” Under the asset acquisition method of accounting, acquiring assets in groups not only requires ascertaining the cost of the asset (or net assets), but also allocating that cost to the individual assets (or individual assets and liabilities) that make up the group. Per ASC Topic 805, assets are recognized based on their cost to the acquiring entity, which generally includes transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of non-cash assets given as consideration differs from the assets’ carrying amounts on the acquiring entity’s books.
The cost of the group of assets acquired in an asset acquisition is allocated to the individual assets acquired or liabilities assumed based on the relative fair values of net identifiable assets acquired other than “non-qualifying” assets (for example, cash), and does not give rise to goodwill. To the extent that the consideration paid to the CSL III shareholders or the members of acquired entities exceeded the relative fair values of the net identifiable assets acquired, other than “non-qualifying” assets, any such premium paid by the Company was further allocated to the cost of the assets acquired by the Company pro-rata to their relative fair value, other than “non-qualifying” assets, which are investments in loans, equity securities and forward currency contracts. Immediately following the completion of the CSL III Merger and the Credit Fund II Purchase, the Company recorded the acquired assets at their respective fair values and, as a result, the purchase premium or discount allocated to the cost basis of the assets acquired was immediately recognized as unrealized depreciation or appreciation on the Company’s Consolidated Statement of Operations. The purchase premium or discount allocated to investments in loan securities will amortize over the life of the loans through interest income, with a corresponding reversal of the unrealized depreciation/appreciation on the loans acquired through their ultimate disposition. Net increase (decrease) to investment income from the amortization of purchase premiums and discounts relating to asset acquisitions for the year ended December 31, 2025 was $(825). The purchase premium or discount allocated to investments in equity securities and forward currency contracts will not amortize through interest income and, assuming no subsequent change to the fair value of such equity securities and disposition at fair value, the Company will recognize a realized loss or a reduction in realized gains with a corresponding reversal of the unrealized depreciation or appreciation upon disposition of the CSL III equity securities and forward currency contracts acquired.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next
tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. For the years ended December 31, 2025, 2024, and 2023, the Company incurred $1,906, $2,739 and $2,435 in excise tax expense, respectively.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. The SPV, CSL III SPV, Credit Fund II and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company. All penalties and interest associated with income taxes, if any, are included in income tax expense.
Dividends and Distributions to Common Stockholders
To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed, if any, is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.
Prior to July 5, 2017, the Company had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, the Company converted the “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of dividends and other distributions on behalf of the common stockholders, other than those common stockholders who have “opted out” of the plan. As a result of adopting the plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the common stockholders who have not elected to “opt out” of the dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, the Company’s plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. The Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
Functional Currency
The functional currency of the Company is the U.S. Dollar. Investments are generally made in the local currency of the country in which the investments are domiciled and are translated into U.S. Dollars with foreign currency translation gains or losses recorded within net change in unrealized appreciation (depreciation) on investments in the accompanying Consolidated Statements of Operations. Foreign currency translation gains and losses on non-investment assets and liabilities are separately reflected in the accompanying Consolidated Statements of Operations.
Earnings Per Common Share
The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Basic earnings per common share is calculated by dividing the net increase (decrease) in net assets resulting from operations attributable to common stock by the weighted average number of shares of common stock outstanding. Diluted earnings per common share reflects the assumed conversion of all dilutive securities.
Segment Reporting
In accordance with ASC Topic 280 - Segment Reporting (“ASC 280”), the Company has determined that it has a single operating and reporting segment. As a result, the Company’s segment accounting policies are the same as described herein and the Company does not have any intra-segment sales and transfers of assets.
In December 2023, the FASB issued ASU 2023-09, which requires additional disaggregated disclosures on the entity’s effective tax rate reconciliation and additional details on income taxes paid. The amendments are effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. The Company determined this guidance to have a material impact on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expense for public entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. In January 2025, the FASB issued ASU 2025-01, which revises the effective date of ASU 2024-03. The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance.
In November 2024, the FASB issued ASU 2024-04, which amends ASC 470-20 to clarify the requirements related to accounting for the settlement of a debt instrument as an induced conversion. The amendments are effective for fiscal years and interim periods within fiscal years beginning after December 15, 2025. The Company does not expect this guidance to have a material impact on its consolidated financial statements.
3. FAIR VALUE MEASUREMENTS
The Company applies fair value accounting in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of personnel of the Investment Adviser; and (iii) the Investment Adviser engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
•the nature and realizable value of any collateral;
•call features, put features and other relevant terms of debt;
•the portfolio company’s leverage and ability to make payments;
•the portfolio company’s public or private credit rating;
•the portfolio company’s actual and expected earnings and discounted cash flow;
•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
•the markets in which the portfolio company does business and recent economic and/or market events; and
•comparisons to comparable transactions and publicly traded securities.
Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date, which in many cases may reflect a lag in information.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the audited consolidated financial statements as of December 31, 2025 and 2024.
U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
•Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. Financial instruments in this category generally include unrestricted securities, including equities and derivatives, listed in active markets. The Investment Adviser does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
•Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.
•Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments in this category generally include investments in privately-held entities, structured credit investments, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Investments in Credit Fund and Credit Fund II are valued based on the legal form of investment. For those structured through LLC membership interests, the practical expedient, or net asset value method, is used. For those structured through subordinated notes, a discounted cash flow method is used.
Transfers between levels, if any, are recognized at the beginning of the year in which the transfers occur. For the years ended December 31, 2025 and 2024, there were no transfers between levels.
The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2025 and 2024:
December 31, 2025
Level 1
Level 2
Level 3
Total
Assets
First Lien Debt
$
—
$
—
$
2,061,847
$
2,061,847
Second Lien Debt
—
—
95,130
95,130
Equity Investments
—
—
143,331
143,331
Investment Funds
—
—
163,614
163,614
Total Investments
$
—
$
—
$
2,463,922
$
2,463,922
Derivative assets(1)
—
298
—
298
Liabilities
Derivative liabilities(1)
—
(1,436)
—
(1,436)
Total
$
2,462,784
December 31, 2024
Level 1
Level 2
Level 3
Total
Assets
First Lien Debt
$
—
$
—
$
1,323,697
$
1,323,697
Second Lien Debt
—
—
116,467
116,467
Equity Investments
—
—
116,746
116,746
Investment Funds
—
—
182,636
182,636
Total
$
—
$
—
$
1,739,546
$
1,739,546
Investments measured at net asset value(2)
$
63,997
Total Investments
$
1,803,543
Derivative assets(1)
—
1,863
—
1,863
Liabilities
Derivative liabilities(1)
—
(6,875)
—
(6,875)
Total
$
1,798,531
(1)As of December 31, 2025, derivative assets and liabilities consisted of interest rate swaps. As of December 31, 2024, derivative assets and liabilities consisted of interest rate swaps and forward currency contracts.
(2)Amount represents the Company’s investment in Credit Fund II. The Company, as a practical expedient, estimates the fair value of this investment using the net asset value of the Company’s member’s interest in Credit Fund II. As such, the fair value of the Company’s investment in Credit Fund II has not been categorized within the fair value hierarchy.
The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:
Financial Assets
Year Ended December 31, 2025
First Lien Debt
Second Lien Debt
Equity Investments
Investment Funds
Total
Balance, beginning of year
$
1,323,697
$
116,467
$
116,746
$
182,636
$
1,739,546
Purchases
1,192,715
4,344
29,384
40,500
1,266,943
Transfer In - CSL III Merger
479,124
4,117
2,432
—
485,673
Transfer In - JV2 Acquisition
181,645
9,493
63
—
191,201
Sales
(560,922)
(1,137)
(19,600)
(62,500)
(644,159)
Paydowns
(529,477)
(38,190)
—
—
(567,667)
Accretion of discount
9,384
1,217
276
—
10,877
Net realized gains (losses)
(33,382)
(7,980)
(2,226)
—
(43,588)
Net change in unrealized appreciation (depreciation)
(937)
6,799
16,256
2,978
25,096
Balance, end of year
$
2,061,847
$
95,130
$
143,331
$
163,614
$
2,463,922
Net change in unrealized appreciation (depreciation) relating to Level 3 investments still held at the reporting date and included within the Consolidated Statements of Operations
$
(14,262)
$
(574)
$
13,915
$
2,978
$
2,057
Financial Assets
Year Ended December 31, 2024
First Lien Debt
Second Lien Debt
Equity Investments
Investment Funds
Total
Balance, beginning of year
$
1,311,503
$
188,175
$
92,824
$
181,960
$
1,774,462
Purchases
460,654
9,686
30,658
—
500,998
Sales
(87,772)
(22,530)
(15,997)
—
(126,299)
Paydowns
(349,640)
(51,690)
(2,738)
—
(404,068)
Accretion of discount
9,472
1,237
294
—
11,003
Net realized gains (losses)
(45,991)
(2,459)
10,133
—
(38,317)
Net change in unrealized appreciation (depreciation)
25,471
(5,952)
1,572
676
21,767
Balance, end of year
$
1,323,697
$
116,467
$
116,746
$
182,636
$
1,739,546
Net change in unrealized appreciation (depreciation) relating to Level 3 investments still held at the reporting date and included within the Consolidated Statements of Operations
$
(674)
$
(7,877)
$
6,342
$
676
$
(1,533)
The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Investment Adviser carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value the Company’s portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in Credit Fund’s mezzanine loan are valued using collateral analysis with the expected recovery rate of principal and interest. Investments in Credit Fund’s subordinated loan and member’s interest are valued using discounted cash flow analysis with the expected discount rate, default rate and recovery rate of principal and interest.
The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of December 31, 2025 and 2024:
The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.
The significant unobservable input used in the fair value measurement of the Company’s investment in the mezzanine loan of Credit Fund is the recovery rate of principal and interest. A significant decrease in the recovery rate would result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are the discount rate, default rate and recovery rate. Significant increases in the discount rate or default rate in isolation would result in a significantly lower fair value measurement. A significant decrease in the recovery rate in isolation would result in a significantly lower fair value measurement.
Financial instruments disclosed but not carried at fair value
The following table presents the principal amount and fair value of the Credit Facility, the Senior Notes, and the 2015-1N Debt as of December 31, 2025 and 2024:
December 31, 2025
December 31, 2024
Principal Amount
Fair Value
Principal Amount
Fair Value
Secured borrowings
$
563,660
$
563,660
$
213,439
$
213,439
2028 Notes
—
—
85,000
84,836
2030 Notes
300,000
299,749
300,000
306,864
2031 Notes
300,000
301,436
—
—
2015-1N Aaa/AAA Class A-1-1-A Notes
240,000
240,118
240,000
240,273
2015-1N Aaa/AAA Class A-L Loans
50,000
50,025
50,000
50,057
2015-1N Aaa/AAA Class A-1-2-B Notes
20,000
20,001
20,000
20,019
2015-1N AA Class A-2-RR Notes
30,000
29,858
30,000
30,059
2015-1N A Class B-R Notes
40,000
39,799
40,000
40,147
Total
$
1,543,660
$
1,544,646
$
978,439
$
985,694
The carrying values of the secured borrowings generally approximate their respective fair values due to their variable interest rates. Secured borrowings are categorized as Level 3 within the hierarchy.
The carrying values of the Senior Notes approximate their respective fair values due to their inclusion of the effective portion of the fair value of the interest rate swap, as further discussed in Note 8, Derivative Instruments, to these consolidated financial statements. The Senior Notes are categorized as Level 3 within the hierarchy.
The carrying value of the 2015-1N Debt approximates their fair value. The 2015-1N Debt is categorized as Level 3 within the hierarchy and is valued generally using market quotation(s) received from broker/dealer(s), which are significant unobservable inputs.
The carrying value of other financial assets and liabilities approximates their fair value based on the short-term nature of these items.
4. RELATED PARTY TRANSACTIONS
Investment Advisory Agreement
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The Original Investment Advisory Agreement was amended on September 15, 2017, August 6, 2018, and February 20, 2025 after receipt of requisite Board and stockholders' approvals, as applicable (as amended, the “Investment Advisory Agreement”).
Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On April 29, 2025, the Company’s Board of Directors, including a majority of the Independent Directors, approved at an in-person meeting the continuance of the Company’s Investment Advisory Agreement with the Adviser for an additional one year term. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Adviser provides investment advisory services to the Company. For providing these services, the Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
The base management fee is calculated at an annual rate of 1.50% of the average value of the Company’s gross assets at the end of the two most recently completed fiscal quarters; provided, however, the base management fee is calculated at an
annual rate of 1.00% of the Company’s gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters. “Gross assets” is determined on a consolidated basis in accordance with U.S. GAAP, includes assets acquired through the incurrence of debt (see Note 9, Borrowings, to these consolidated financial statements), and excludes cash and any temporary investments in cash equivalents. For purposes of this calculation, cash and cash equivalents includes U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment. The base management fee is payable quarterly in arrears, will be appropriately adjusted for any share issuances or repurchases during such the applicable fiscal quarters, and will be appropriately pro-rated for any partial month or quarter.
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
Under the Third Amended and Restated Investment Advisory Agreement, dated February 20, 2025, the calculation of “Pre-Incentive Fee Net Investment Income” was amended to exclude any amortization or accretion of purchase premiums or purchase discounts to interest income resulting solely from merger-related or acquisition-related accounting adjustments in connection with the assets acquired in the CSL III Merger, Credit Fund II Purchase, or in any similar asset acquisition transaction, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related or acquisition-related accounting adjustments, in the aggregate, would result in an increase in Pre-Incentive Fee Net Investment Income.
Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, has been compared to a “hurdle rate” of 1.50% per quarter (6.00% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.
Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
•no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;
•100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and
•17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee net investment income thereafter is allocated to the Investment Adviser.
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period
of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.
Under the Third Amended and Restated Investment Advisory Agreement, the calculation of cumulative aggregate realized capital gains, cumulative aggregate realized capital losses, and aggregate unrealized capital depreciation also excludes any amounts that result solely from merger-related or acquisition-related accounting adjustments in connection with assets acquired in the CSL III Merger and Credit Fund II Purchase or any similar asset acquisition transaction, including any premium or discount paid for the acquisition of such assets, solely to the extent that inclusion of such adjustments would, in the aggregate, result in an increase in the second part of the incentive fees.
Below is a summary of the base management fees and incentive fees incurred during the years ended December 31, 2025, 2024, and 2023.
Year Ended December 31,
2025
2024
2023
Base management fees
$
34,644
$
26,908
$
28,515
Incentive fees
21,076
21,647
22,622
Total base management fees and incentive fees
$
55,720
$
48,555
$
51,137
Accrued capital gains incentive fees are based upon the cumulative net realized and unrealized appreciation (depreciation) from inception. Accordingly, the accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. For the years ended December 31, 2025, 2024, and 2023, there were no accrued or realized capital gains incentive fees.
As of December 31, 2025 and 2024, $14,360 and $11,908, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.
Administration Agreement
On April 3, 2013, the Company’s Board of Directors approved the Administration Agreement (the “Administration Agreement”) between the Company and the Administrator. Unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. On April 29, 2025, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period.
Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Financial Officer and Chief Compliance Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s internal control assessment under the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”). Reimbursement under the Administration Agreement occurs quarterly in arrears.
For the years ended December 31, 2025, 2024, and 2023, the Company incurred $1,841, $1,589 and $1,280 in fees under the Administration Agreement, respectively. These fees are included in administrative service fees in the accompanying Consolidated Statements of Operations. As of December 31, 2025 and 2024, $1,261 and $885, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
On April 3, 2013, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator with access to personnel.
On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”). Unless terminated earlier, the State Street Sub-Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On April 29, 2025, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of each Sub-Administration Agreement for a one year period. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
For the years ended December 31, 2025, 2024, and 2023, the Company incurred $782, $682 and $669 in fees under the State Street Sub-Administration Agreement, respectively. These fees are included in other general and administrative expenses in the accompanying Consolidated Statements of Operations. As of December 31, 2025 and 2024, $333 and $223, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.
License Agreement
The Company has entered into a royalty free license agreement with CIM, which wholly owns the Investment Adviser and is a wholly owned subsidiary of Carlyle, pursuant to which CIM has granted the Company a non-exclusive, revocable and non-transferable license to use the name and mark “Carlyle.”
Board of Directors
The Company’s Board of Directors currently consists of seven members, four of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Pricing Committee, a Nominating and Governance Committee, and a Compensation Committee. The members of Audit, Nominating and Governance and Compensation committees consist entirely of Independent Directors. In 2024, the Board of Directors established a Special Committee, consisting solely of Independent Directors, to evaluate the terms of the CSL III Merger. The Special Committee is no longer active. The Board of Directors may establish additional committees in the future. For the years ended December 31, 2025, 2024, and 2023, the Company incurred $735, $601 and $444, respectively, in fees and expenses associated with its directors' services on the Company's Board of Directors and its committees. These fees are included in directors’ fees and expenses in the accompanying Consolidated Statements of Operations. As of December 31, 2025 and 2024, no fees or expenses associated with its directors were payable.
Transactions with Investment Funds
At times, the Company will engage in purchase and sale transactions with Credit Fund, as detailed below. See Note 5, Middle Market Credit Fund, LLC, to these consolidated financial statements for further information about Credit Fund.
Prior to the Credit Fund II Purchase in February 2025, the Company engaged in purchase and sale transactions with Credit Fund II, as detailed below. See Note 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements for further information about Credit Fund II.
Year Ended December 31,
2024
2023
Number of investments purchased
—
1
Cost of investments purchased
$
—
$
6,581
Number of investments sold
3
11
Proceeds from investments
$
13,217
$
51,231
Realized gain (loss) from investments
$
28
$
(66)
Cumulative Convertible Preferred Stock
On May 5, 2020, the Company issued and sold 2,000,000 shares of the cumulative convertible preferred stock, par value $0.01 per share (the “Preferred Stock”), to an affiliate of Carlyle in a private placement at a price of $25 per share.
In connection with the completion of the CSL III Merger, on March 27, 2025, and in a transaction exempt from registration under the Securities Act, CIM exchanged all 2,000,000 outstanding shares of the Company’s Preferred Stock for 3,004,808 shares of the Company’s common stock based on the aggregate $50,000 liquidation preference of the Preferred Stock and the Company’s net asset value per share as of March 25, 2025, equal to $16.64. All accrued and unpaid dividends on the Preferred Stock were paid in cash immediately prior to the exchange. The Preferred Stock was cancelled upon exchange, and CIM now holds only the Company’s common stock. See Note 11, Net Assets, to these consolidated financial statements for further information about the Preferred Stock and Preferred Stock Exchange.
For the period from January 1, 2025 to the Preferred Stock Exchange on March 27, 2025, the Company declared and paid dividends on the Preferred Stock of $826. For both the years ended December 31, 2024 and 2023, the Company declared and paid dividends on the Preferred Stock of $3,500.
Transactions with Carlyle
On November 13, 2023, the Company paid an affiliate of Carlyle a fee for underwriting services rendered in connection with the issuance of the 2028 Notes in the amount of 3.15% of the $6.4 million in aggregate principal of the notes underwritten by the affiliate. On October 18, 2024, the Company paid an affiliate of Carlyle a fee for underwriting services rendered in connection with the issuance of the 2030 Notes in the amount of 1.00% of the $9.0 million in aggregate principal of the notes underwritten by the affiliate. See Note 9, Borrowings, to these consolidated financial statements for further information about the 2028 Notes and the 2030 Notes.
CSL III Merger
During the year ended December 31, 2025, the Company paid $1,413 in incentive fees to CSL III Advisor pursuant to the investment advisory agreement between CSL III and CSL III Advisor, which had been accrued by CSL III prior to the completion of the CSL III Merger and assumed by the Company upon the merger’s completion. The investment advisory agreement between CSL III and CSL III Advisor was terminated upon completion of the CSL III Merger.
During the year ended December 31, 2025, the Company received $1,998 in reimbursable expenses, which were outstanding and payable by CSL III Advisor to CSL III prior to the completion of the CSL III Merger pursuant to its expense support and conditional reimbursement agreement with CSL III Advisor (the “CSL III Reimbursement Agreement”). This amount was assumed by the Company upon completion of the CSL III Merger. The CSL III Reimbursement Agreement was terminated upon the completion of the CSL III Merger.
In connection with the completion of the CSL III Merger, the Investment Adviser and CSL III Advisor paid $5,000 in merger-related expenses on behalf of the Company and CSL III. All merger-related expenses incurred above $5,000 were borne by the Company and CSL III in accordance with the Merger Agreement.
On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability company agreement, which was most recently amended on February 11, 2026 to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $175,000 each as of December 31, 2025, which was subsequently increased to $250,000 each on February 11, 2026. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act).
Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), a Delaware limited liability company, was formed on April 5, 2016. Credit Fund Sub is a wholly owned subsidiary of Credit Fund and is consolidated in Credit Fund’s consolidated financial statements commencing from the date of its formation. Credit Fund Sub primarily invests in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiary follow the same Internal Risk Rating System as the Company. Refer to “Debt” below in this Note 5 for discussions regarding the credit facility entered into and the notes issued by such wholly owned subsidiaries.
Credit Fund, the Company, and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Credit Fund Administrative Agent”), pursuant to which the Credit Fund Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Credit Fund Administrative Agent in performing its obligations thereunder.
Selected Financial Data
Since inception of Credit Fund and through December 31, 2025 and 2024, the Company and Credit Partners each made capital contributions of $1 in members’ equity and $216,000 in subordinated loans to Credit Fund. On March 24, 2025, the Company and Credit Partners each received an aggregate return of capital on subordinated loans of $62,500. Since inception, the Company and Credit Partners each have received an aggregate return of capital on subordinated loans of $85,500. Below is certain summarized consolidated financial information for Credit Fund as of December 31, 2025 and 2024.
Investments, at fair value (amortized cost of $970,522 and $541,053, respectively)
$
957,830
$
529,909
Cash, cash equivalents and restricted cash(1)
90,283
48,046
Other assets
17,302
22,932
Total assets
$
1,065,415
$
600,887
LIABILITIES AND MEMBERS’ EQUITY
Secured borrowings
$
589,000
$
189,221
Mezzanine loans (2)
40,500
—
Other liabilities
229,032
71,301
Subordinated loans and members’ equity (3)
206,883
340,365
Total liabilities and members’ equity
$
1,065,415
$
600,887
(1)As of December 31, 2025 and 2024, $88,417 and $10,428, respectively, of Credit Fund’s cash and cash equivalents was restricted.
(2)As of December 31, 2025, the fair value of the Company's ownership interest in the mezzanine loan was $40,500. There was no interest in the mezzanine loans as of December 31, 2024.
(3)As of December 31, 2025 and 2024, the fair value of the Company's ownership interest in the subordinated loans and members' equity was $123,114 and $182,636, respectively.
Year Ended December 31,
2025
2024
2023
Selected Consolidated Statements of Operations Information:
Total investment income
$
66,324
$
72,407
$
90,448
Expenses
Interest expense and credit facility fees
28,839
29,654
41,457
Other expenses
2,123
1,676
1,939
Total expenses
30,962
31,330
43,396
Net investment income (loss)
35,362
41,077
47,052
Net realized gain (loss) on investments
(1,296)
(5,618)
(25,619)
Net change in unrealized appreciation (depreciation) on investments
(1,548)
22,643
16,960
Net increase (decrease) resulting from operations
$
32,518
$
58,102
$
38,393
Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of December 31, 2025 and 2024:
As of December 31,
December 31, 2025
December 31, 2024
Senior secured loans(1)
$
978,828
$
547,672
Number of portfolio companies in Credit Fund
55
33
Average amount per portfolio company(1)
$
17,797
$
16,596
Number of loans on non-accrual status
2
2
Fair value of loans on non-accrual status
$
6,297
$
4,787
Percentage of loans at floating interest rates(2)(3)
100.0
%
100.0
%
Percentage of portfolio at fixed interest rates (4)
—
%
—
%
Fair value of loans with PIK provisions
$
36,618
$
39,712
Percentage of portfolio with PIK provisions(3)
3.8
%
7.5
%
(1)At par/principal amount.
(2)Floating rate debt investments are generally subject to interest rate floors.
Consolidated Schedule of Investments as of December 31, 2025
Investments (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity Date
Par/ Principal Amount
Amortized Cost (4)
Fair Value (5)
Output Services Group, Inc.
+
(2)(3)(6)
Media: Advertising, Printing & Publishing
SOFR
6.25%
10.41%
11/30/2028
$
4,160
$
2,960
$
3,755
PF Atlantic Holdco 2, LLC
+
(2)(3)(6)
Leisure Products & Services
SOFR
5.50%
9.23%
11/12/2027
14,929
14,832
14,929
Pushpay USA Inc.
+
(2)
Diversified Financial Services
SOFR
3.75%
7.62%
8/18/2031
23,483
23,505
23,568
QBS Parent, Inc.
+
(2)(3)
Energy: Oil & Gas
SOFR
4.50%
8.17%
6/3/2032
26,744
26,656
26,913
Radwell Parent, LLC
+
(2)(3)
Wholesale
SOFR
5.50%
9.17%
4/1/2029
13,535
13,472
13,535
Ranpak B.V. (Netherlands)
+
(2)
Containers, Packaging & Glass
SOFR
4.50%
8.22%
12/19/2031
7,727
7,650
7,727
Ranpak Corp.
+
(2)
Containers, Packaging & Glass
SOFR
4.50%
8.22%
12/19/2031
12,073
11,953
12,073
Rialto Management Group, LLC
+
(2)(3)
Diversified Financial Services
SOFR
5.00%
8.72%
12/5/2030
15,289
15,259
15,298
Rotation Buyer, LLC
+
(2)(3)
Capital Equipment
SOFR
4.75%
8.43%
12/27/2031
8,723
8,667
8,647
SCHP Purchaser, INC
+
(2)(3)
Healthcare & Pharmaceuticals
SOFR
4.50%
8.37%
10/24/2032
18,601
18,423
18,420
Secretariat Advisors LLC
+
(2)
Construction & Building
SOFR
4.00%
7.67%
3/1/2032
17,716
17,635
17,716
Sigma Irish Acquico Limited (Ireland)
+
(2)
Diversified Financial Services
SOFR
5.25%
8.91%
3/19/2032
10,222
10,036
10,094
Solarwinds Corporation
+
(2)
Software
SOFR
4.00%
7.70%
3/15/2032
2,887
2,761
2,880
Spotless Brands, LLC
+
(2)(3)
Consumer Services
SOFR
5.50%
9.36%
7/25/2028
10,756
10,674
10,808
Striper Buyer, LLC
+
(2)(3)
Containers, Packaging & Glass
SOFR
5.50%
9.22%
12/30/2026
14,250
14,221
12,812
Tank Holding Corp.
+
(2)(3)(6)
Capital Equipment
SOFR
5.75%
9.47%
3/31/2028
19,348
19,091
17,680
The Chartis Group, LLC
+
(2)(3)
Healthcare & Pharmaceuticals
SOFR
4.25%
7.95%
9/17/2031
15,459
15,347
15,613
Turbo Buyer, Inc.
^+
(2)(3)(9)
Auto Aftermarket & Services
SOFR
6.00%
9.62%
6/1/2026
33,997
33,997
33,997
U.S. TelePacific Holdings Corp.
^
(2)(3)(6)(7)
Telecommunications
SOFR
1.00%, 7.00% PIK
11.65%
5/2/2026
4,286
2,817
1,645
Victors Purchaser, LLC
+
(2)(3)
High Tech Industries
SOFR
4.50%
8.19%
12/23/2032
16,975
16,933
16,925
VRC Companies, LLC
+
(2)(3)(6)
Business Services
SOFR
5.25%
9.09%
6/29/2027
23,019
22,916
23,012
Whitney Merger Sub, Inc.
+
(2)(3)
Leisure Products & Services
SOFR
4.75%
8.42%
7/3/2032
10,000
9,902
9,901
Yellowstone Buyer Acquisition, LLC
+
(2)(3)(6)
Consumer Goods: Durable
SOFR
5.75%
9.62%
9/13/2027
38,300
38,039
35,120
First Lien Debt Total
$
969,463
$
956,714
Equity Investments (0.1% of fair value)
48forty Intermediate Holdings, Inc.
^
(8)
Transportation: Cargo
1
$
—
$
—
EvolveIP, LLC
^
(8)
Telecommunications
311
1,059
1,116
Output Services Group, Inc.
^
(8)
Media: Advertising, Printing & Publishing
205
—
—
Equity Investments Total
$
1,059
0
$
1,116
Total Investments
$
970,522
$
957,830
^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility with the Company (the “Credit Fund Facility”). Accordingly, such assets are not available to creditors of Credit Fund Sub.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub 2025 Facility”). The lenders of the Credit Fund Sub 2025 Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.
(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2025, the geographical composition of investments as a percentage of fair value was 2.5% in Australia, 1.1% in Ireland, 2.6% in Luxembourg, 0.8% in the Netherlands, and 93.0% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either SOFR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2025. As of December 31, 2025, the reference rates for Credit Fund’s variable rate loans were the 30-day SOFR at 3.69%, the 90-day SOFR at 3.65% and the 180-day SOFR at 3.57%.
(3)Loan includes interest rate floor feature, which ranges from 0.75% to 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.
(6)Loans include a credit spread adjustment that typically ranges from 0.10% to 0.43%.
(7)Represents an investment on non-accrual status as of December 31, 2025.
(8)Represents a non-income producing security as of December 31, 2025.
(9)As of December 31, 2025, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt – unfunded delayed draw and revolving term loans commitments
Type
Unused Fee
Par/ Principal Amount
Fair Value
Enverus, Inc.
Delayed Draw
1.00%
$
1,608
$
(6)
Heartland Home Services, Inc.
Revolver
0.50%
428
(10)
North Haven Fairway Buyer, LLC
Delayed Draw
0.50%
2,316
(17)
Turbo Buyer, Inc.
Revolver
0.50%
233
0
Total unfunded commitments
$
4,585
$
(33)
Consolidated Schedule of Investments as of December 31, 2024
Consolidated Schedule of Investments as of December 31, 2024
Investments (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity Date
Par/ Principal Amount
Amortized Cost (4)
Fair Value (5)
LVF Holdings, Inc.
+
(2)(3)(6)
Beverage & Food
SOFR
5.50%
9.83%
6/10/2027
$
9,898
$
9,791
$
9,898
NEFCO Holding Company LLC
+
(2)(3)
Construction & Building
SOFR
5.75%
10.31%
8/5/2028
10,830
10,722
10,806
North Haven Fairway Buyer, LLC
+
(2)(3)
Consumer Services
SOFR
6.50%
10.90%
5/17/2028
6,632
6,513
6,632
Output Services Group, Inc.
^
(2)(3)(6)(7)
Media: Advertising, Printing & Publishing
SOFR
6.25%
10.54%
11/30/2028
4,160
2,910
3,262
PF Atlantic Holdco 2, LLC
+
(2)(3)(6)
Leisure Products & Services
SOFR
5.50%
10.04%
11/12/2027
15,085
14,940
15,085
Pushpay USA Inc.
+
(2)
Diversified Financial Services
SOFR
4.50%
8.83%
8/16/2031
15,650
15,498
15,650
QBS Parent, Inc.
+
(2)(3)
Energy: Oil & Gas
SOFR
4.75%
9.27%
11/7/2031
9,569
9,522
9,521
Radiology Partners, Inc.
+
(2)(6)
Healthcare & Pharmaceuticals
SOFR
3.50%, 1.50% PIK
9.51%
1/31/2029
18,450
18,435
18,181
Ranpak B.V. (Netherlands)
+
(2)
Containers, Packaging & Glass
SOFR
4.50%
8.79%
12/19/2031
7,805
7,727
7,727
Ranpak Corp.
+
(2)
Containers, Packaging & Glass
SOFR
4.50%
8.79%
12/19/2031
12,195
12,073
12,073
Striper Buyer, LLC
+
(2)(3)
Containers, Packaging & Glass
SOFR
5.50%
9.86%
12/30/2026
14,400
14,343
13,811
Spotless Brands, LLC
+
(2)(3)
Consumer Services
SOFR
5.50%
10.06%
7/25/2028
10,864
10,756
10,809
Tank Holding Corp.
+
(2)(3)(6)
Capital Equipment
SOFR
5.75%
10.00%
3/31/2028
19,549
19,189
19,549
Turbo Buyer, Inc.
+
(2)(3)(9)
Auto Aftermarket & Services
SOFR
6.00%
10.47%
12/2/2025
34,015
33,944
31,728
U.S. TelePacific Holdings Corp.
^
(2)(3)(6)(7)
Telecommunications
SOFR
1.00%, 6.00% PIK
11.29%
5/2/2026
4,014
2,993
1,525
VRC Companies, LLC
^+
(2)(3)(6)(9)
Business Services
SOFR
5.50%
10.35%
6/29/2027
23,260
23,087
23,250
Yellowstone Buyer Acquisition, LLC
+
(2)(3)(6)
Consumer Goods: Durable
SOFR
5.75%
10.48%
9/13/2027
38,700
38,299
35,768
First Lien Debt Total
$
539,994
$
529,595
Equity Investments (0.1% of fair value)
48forty Intermediate Holdings, Inc.
^
(8)
Transportation: Cargo
1
$
—
$
—
EvolveIP, LLC
^
(8)
Telecommunications
311
1,059
314
Output Services Group, Inc.
^
(8)
Media: Advertising, Printing & Publishing
205
—
—
Equity Investments Total
$
1,059
$
314
Total Investments
$
541,053
$
529,909
^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility with the Company (the “Credit Fund Facility”). Accordingly, such assets are not available to creditors of Credit Fund Sub.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub 2016 Facility”). The lenders of the Credit Fund Sub 2016 Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.
(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2024, the geographical composition of investments as a percentage of fair value was 2.1% in Canada, 1.5% in Netherlands, and 96.4% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either SOFR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2024. As of December 31, 2024, the reference rates for Credit Fund's variable rate loans were the 30-day SOFR at 4.30%, the 90-day SOFR at 4.29% and the 180-day SOFR at 4.25%.
(3)Loan includes interest rate floor feature, which ranges from 0.75% to 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.
(6)Loans include a credit spread adjustment that typically ranges from 0.10% to 0.43%.
The Credit Fund and Credit Fund Sub are party to separate credit facilities, as described below. As of December 31, 2025 and 2024, Credit Fund and Credit Fund Sub were in compliance with all covenants and other requirements of their respective credit facility agreements. Below is a summary of the borrowings and repayments under the credit facilities for the respective periods.
Credit Fund Facility
Credit Fund Sub 2016 Facility
Credit Fund Sub 2025 Facility
Outstanding balance as of December 31, 2022
$
—
$
588,621
$
—
Borrowings
—
20,000
—
Repayments
—
(161,400)
—
Outstanding balance as of December 31, 2023
—
447,221
—
Borrowings
—
57,000
—
Repayments
—
(315,000)
—
Outstanding balance as of December 31, 2024
—
189,221
—
Borrowings
40,500
29,000
687,000
Repayments
—
(218,221)
(98,000)
Outstanding balance as of December 31, 2025
$
40,500
$
—
$
589,000
Credit Fund Facility. On June 24, 2016, Credit Fund closed on the Credit Fund Facility, which has been amended from time to time, most recently on March 18, 2025, pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $100,000 ($175,000 prior to the May 21, 2023 amendment), subject to availability under the Credit Fund Facility, which is based on certain advance rates multiplied by the value of Credit Fund’s portfolio investments net of certain other indebtedness that Credit Fund may incur in accordance with the terms of the Credit Fund Facility. Proceeds of the Credit Fund Facility may be used for general corporate purposes, including the funding of portfolio investments. Amounts drawn under the Credit Fund Facility bear interest at the greater of zero and SOFR (LIBOR prior to the May 21, 2023 amendment) plus an applicable spread of 5.50% (9.00% prior to the March 26, 2024 amendment) and such interest payments are made quarterly. The availability period under the Credit Fund Facility will terminate on May 21, 2028, (May 21, 2025 prior to the March 18, 2025 amendment), which is also its maturity date upon which Credit Fund is obligated to repay any outstanding borrowings.
Credit Fund Sub 2016 Facility.On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub 2016 Facility with lenders, which had been amended from time to time, most recently on November 4, 2024. The Credit Fund Sub 2016 Facility provided up to an amount equal to $465,000 ($640,000 prior to the May 29, 2024 amendment) in secured borrowings during the applicable revolving period (the borrowing base as calculated pursuant to the terms of the Credit Fund Sub 2016 Facility). The aggregate maximum credit commitment could have been increased up to an amount not to exceed $1,400,000, subject to certain restrictions and conditions set forth in the Credit Fund Sub 2016 Facility, including adequate collateral to support such borrowings. The Credit Fund Sub 2016 Facility had a revolving period through May 23, 2025 (May 23, 2023 prior to the April 20, 2023 amendment) and a maturity date of May 23, 2026, (May 23, 2025 prior to the April 20, 2023 amendment), which could have been extended by mutual agreement of the parties to the Credit Fund Sub 2016 Facility. Borrowings under the Credit Fund Sub 2016 Facility bore interest initially at the applicable commercial paper rate (if the lender was a conduit lender) or SOFR plus 2.30% (2.70% and 2.35% prior to the November 4, 2024 and April 20, 2023 amendments, respectively). The Credit Fund Sub was also required to pay an unused commitment fee of between 0.00% to 1.75% (0.50% and 0.75% prior to the November 4, 2024 amendment) per year depending on the usage of the Credit Fund Sub 2016 Facility. Payments under the Credit Fund Sub 2016 Facility were made quarterly. Subject to certain exceptions, the Facility was secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Sub. The outstanding borrowings on the Credit Fund Sub 2016 Facility were repaid in full on March 20, 2025.
Credit Fund Sub 2025 Facility. On March 20, 2025, Credit Fund Sub closed on the Credit Fund Sub 2025 Facility. On October 28, 2025, the Company increased the total commitments under the Credit Sub facility by $200,000 pursuant to the terms of the agreement, resulting in total commitments increasing to $800,000, ($600,000 prior to the October 28, 2025 amendment). The aggregate commitment may be increased up to an amount not to exceed $800,000, subject to certain conditions as set forth in the Credit Fund Sub 2025 Facility. The Credit Fund Sub 2025 Facility has a revolving period through March 20, 2028 and maturity date of March 20, 2035. Borrowings under the Credit Fund Sub 2025 Facility bear interest at a rate equal to SOFR plus 1.60%. In addition, Credit Fund Sub is required to pay an unused commitment fee of 0.50% depending
on the usage of the Credit Fund Sub 2025 Facility. Payments under the Credit Fund Sub 2025 Facility are made quarterly. Subject to certain exceptions, the Credit Fund Sub 2025 Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Sub.
6. MIDDLE MARKET CREDIT FUND II, LLC
Overview
On November 3, 2020, the Company and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company. Prior to the completion of the Credit Fund II Purchase, the Company and CCLF had approximately 84.13% and 15.87% economic ownership of Credit Fund II, respectively, and Credit Fund II was managed by a four-member board of managers, on which the Company and CCLF each had equal representation. Prior to the Credit Fund II Purchase, the Company’s membership interest in Credit Fund II was included within Investments–Controlled/Affiliated within the accompanying Consolidated Statements of Assets and Liabilities and Consolidated Schedules of Investments.
On February 10, 2025, the Company and CCLF entered into the Amended Credit Fund II LLCA. Pursuant to the terms of the Amended Credit Fund II LLCA, Credit Fund II distributed $2,667 to CCLF, and the Company contributed $140,000 in cash to Credit Fund II. Such distributions and contributions were accounted for as a reduction in CCLF's membership interest based on the net asset value of Credit Fund II as of December 31, 2024. On February 11, 2025, the Company completed the Credit Fund II Purchase, after which Credit Fund II became a wholly owned subsidiary of the Company and in connection therewith the CCLF board members resigned.
Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, was formed on September 4, 2020. Credit Fund II Sub is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements commencing from the date of its formation. Credit Fund II Sub primarily holds investments in first lien loans of middle market companies, which were pledged as security for the Credit Fund II Senior Notes.
On November 3, 2020, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the “Credit Fund II Senior Notes”) with lenders, which has been amended from time to time, most recently on August 4, 2023. The Credit Fund II Senior Notes provided for secured borrowings totaling $157,500. On February 11, 2025, in connection with the Credit Fund II Purchase, Credit Fund II Sub repaid the remaining principal balance of the Credit Fund II Senior Notes in full.
Credit Fund II, the Company and CCLF entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund II (in such capacity, the “Credit Fund II Administrative Agent”), pursuant to which the Credit Fund II Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund II with the approval of the board of managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund II’s allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder. As of February 11, 2025, the Credit Fund II Administrative Agreement was effectively terminated.
7. STRUCTURED CREDIT PARTNERS JV, LLC
On December 23, 2025, the Company and CARS, an affiliated BDC of the Company, together with Sixth Street (collectively, the “SCP Members”), entered into an amended and restated limited liability company agreement, as amended from time to time, to co-manage Structured Credit Partners, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Structured Credit Partners will primarily invest in broadly syndicated loans and will be co-managed by Carlyle and Sixth Street. The broadly syndicated loans will be financed by financing subsidiaries that include warehouses and collateralized loan obligations. It is the intention of the SCP Members that Structured Credit Partners’ capital be allocated over time approximately equally among financing subsidiaries managed by affiliates of the Company and affiliates of Sixth Street.
Structured Credit Partners is managed by eight board members, with each SCP Member having equal representation. Establishing a quorum for Structured Credit Partners’ board of managers requires at least four members to be present, including at least one representative appointed by each SCP Member, and actions of the board generally require unanimous approval of all members present at a meeting at which a quorum is established. The SCP Members hold equal voting interests through non-economic Class A membership interests, and economic interests are held through Class B and Class C membership interests, with economic ownership determined based on funded capital contributions and capital commitments. Capital contributions are made pursuant to board-approved capital calls, and no SCP Member is required to fund capital in excess of its capital
commitment. In accordance with their respective economic interests, the SCP Members indirectly bear their allocable share of all expenses and other obligations of Structured Credit Partners.
Together with the other SCP Members, the Company co-invests through Structured Credit Partners. Investment opportunities for Structured Credit Partners are sourced primarily by affiliates of the SCP Members. Portfolio and investment decisions with respect to Structured Credit Partners must be unanimously approved by a quorum of Structured Credit Partners’ investment committee consisting of an equal number of representatives appointed by the Carlyle-affiliated SCP Members and the Sixth Street-affiliated SCP Members. Therefore, because the Company does not own more than 25% of the voting interests of Structured Credit Partners, the Company does not believe that it has control over Structured Credit Partners for accounting purposes or for purposes of the Investment Company Act.
Structured Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Structured Credit Partners, pursuant to which the administrative agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Structured Credit Partners with board approval, and is reimbursed by Structured Credit Partners for its costs, expenses, and allocable overhead incurred in performing its obligations thereunder. Economic interests are based on funded capital contributions and capital commitments through Class B and Class C membership as follows:
Class B Capital Commitment
Class C Capital Commitment
Carlyle Secured Lending, Inc.
$
135,000
$
15,000
Carlyle Credit Solutions, Inc.
$
15,000
$
135,000
Sixth Street Lending Partners
$
50,000
$
50,000
Sixth Street Specialty Lending, Inc.
$
100,000
$
100,000
As of December 31, 2025, Structured Credit Partners had not commenced operations, and no capital had been contributed to the joint venture.
8. DERIVATIVE INSTRUMENTS
The Company enters into derivatives from time to time to help mitigate its foreign currency and interest rate risk exposures. Below is a summary of the outstanding forward currency contracts as of December 31, 2024. There were no outstanding forward currency contracts as of December 31, 2025.
As of December 31, 2024
Counterparty
Notional Amount to be Purchased
Notional Amount to be Sold
Unrealized Appreciation (Depreciation)
Barclays Bank PLC
$
5,831
C$
8,000
$
269
Barclays Bank PLC
$
5,495
€
5,080
230
Barclays Bank PLC
$
34,026
£
26,243
1,200
$
1,699
In order to better define its contractual rights and to secure rights that would help the Company mitigate its counterparty risk, with respect to forward currency contracts, the Company had previously entered into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) with the derivative counterparty, Barclays Bank PLC (“Barclays”). Each ISDA Master Agreement was a bilateral agreement between the Company and Barclays that governs over the counter derivatives, including forward currency contracts, and contained, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of each ISDA Master Agreement with Barclays permitted a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of Barclays. The Company minimizes counterparty credit risk by only entering into agreements with counterparties that it believes to be of good standing and by monitoring the financial stability of those counterparties.
The following table is intended to provide additional information about the effect of the forward currency contracts on the consolidated financial statements of the Company, including the fair value of derivatives by risk category and the Company’s gross and net amount of assets and liabilities available for offset under netting arrangements, as well as any related
collateral received or pledged by the Company as of December 31, 2024. Refer to Note 3, Fair Value Measurements, to these consolidated financial statements for details related to the fair value measurement of derivatives instruments.
As of December 31, 2024
Counterparty
Risk Exposure
Unrealized Appreciation on Forward Currency Contracts
Unrealized Depreciation on Forward Currency Contracts
Net Amount
Collateral (Received) Pledged
Net Amount
Barclays Bank PLC
Foreign Currency
$
1,699
$
—
$
1,699
$
—
$
1,699
On March 27, 2025, in connection with the CSL III Merger, the Company assumed the forward currency contracts held by CSL III under its ISDA Master Agreement with each of its derivative counterparties, Barclays and Macquarie Bank Limited (“Macquarie” and together with Barclays, the “Counterparties” and each a “Counterparty). Below is a summary of the outstanding forward currency contracts assumed as of March 27, 2025. All the forward currency contracts assumed from the CSL III Merger were closed on March 31, 2025.
Counterparty
Notional Amount to be Purchased
Notional Amount to be Sold
Unrealized Appreciation (Depreciation)
Macquarie Bank Limited
$
3,081
€
2,827
$
(14)
Macquarie Bank Limited
$
3,678
C$
4,967
90
Barclays Bank PLC
$
21,877
€
20,525
(601)
Barclays Bank PLC
$
6,781
£
5,485
(288)
Barclays Bank PLC
€
18
$
19
1
$
(812)
In November 2023, in connection with the issuance of the 2028 Notes, the Company entered into a five-year interest rate swap agreement with Morgan Stanley Capital Services LLC (“Morgan Stanley”) to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $85.0 million, maturing on December 1, 2028. Morgan Stanley had the ability to exercise an early termination commencing on December 1, 2025, subject to providing written notice thirty days prior. Under the interest rate swap agreement, the Company received a fixed interest of 8.20% and paid a floating rate based on the compounded average daily SOFR rate plus 3.139%. The Company designated this interest rate swap agreement as a hedging instrument to the 2028 Notes. In connection with the redemption of the 2028 Notes, Morgan Stanley elected to exercise the early termination right, and the interest rate swap agreement was terminated effective December 1, 2025.
In October 2024, in connection with the issuance of the 2030 Notes, the Company entered into an interest rate swap agreement with JP Morgan Chase Bank N.A. (“JP Morgan”) to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $300.0 million, maturing on February 18, 2030. Under the interest rate swap agreement, commencing on the effective date of August 18, 2025, the Company receives a fixed interest rate of 6.75% and pays a floating interest rate based on the compounded average daily SOFR plus 3.235%. The Company designated this interest rate swap agreement as a hedging instrument to the 2030 Notes.
In October 2025, in connection with the issuance of the 2031 Notes, the Company entered into an interest rate swap agreement with JP Morgan to mitigate the exposure to adverse fluctuations in interest rates for a total notional amount of $300.0 million, maturing on February 15, 2031. The interest rate swap agreement was executed on September 30, 2025 and became effective on October 7, 2025. Under the interest rate swap agreement, the Company receives a fixed interest rate of 5.75% and pays a floating interest rate based on the compounded average daily SOFR plus 2.312%. The Company designated this interest rate swap agreement as a hedging instrument to the 2031 Notes.
Refer to Note 3, Fair Value Measurements, to these consolidated financial statements for details related to the fair value measurement of derivatives instruments and Note 9, Borrowings, to these consolidated financial statements for details related to the Company’s 2028 Notes.
The following table details our interest rate swap contracts outstanding as of December 31, 2025 and 2024.
As of December 31, 2025
Counterparty
Maturity Date
Notional Amount
Fair Value
Financial Statement Location of Net Amounts
JP Morgan Chase Bank N.A.
2/18/2030
$
300,000
$
298
Derivative assets, at fair value
JP Morgan Chase Bank N.A.
2/15/2031
$
300,000
$
(1,436)
Derivative liabilities, at fair value
As of December 31, 2024
Counterparty
Maturity Date
Notional Amount
Fair Value
Financial Statement Location of Net Amounts
Morgan Stanley Capital Services LLC
12/1/2028
$
85,000
$
164
Derivative assets, at fair value
JP Morgan Chase Bank N.A.
2/18/2030
$
300,000
$
(6,875)
Derivative liabilities, at fair value
As a result of the Company’s designation of an interest rate swap as a hedging instrument in a qualifying hedge accounting relationship, the Company is required to record the hedging instrument and the related hedged item at their respective fair values, with all associated changes in those fair values recorded in interest expense and credit facility fees. For the years ended December 31, 2025, 2024, and 2023, the net increase (decrease) recorded in interest expense and credit facility fees was $(519), $220, and $48, respectively.
The Company’s interest rate swaps and forward currency contracts are subject to master netting agreements. These agreements include provisions to offset positions with the same counterparty in the event of default by one of the parties. The Company’s unrealized appreciation and depreciation on derivative instruments are reported net in the accompanying Consolidated Statements of Assets and Liabilities.
The following tables present the Company’s assets and liabilities related to derivatives by counterparty, net of amounts available for offset under a master netting arrangement and net of any collateral received or pledged by the Company for such assets and liabilities as of December 31, 2025 and 2024:
As of December 31, 2025
Counterparty
Derivative Assets subject to Master Netting Agreement
Derivatives available for Offset
Non-cash Collateral Received
Cash Collateral Received
Net amount of Derivative Assets
Morgan Stanley Capital Services LLC
$
—
$
—
$
—
$
—
$
—
JP Morgan Chase Bank N.A.
298
(298)
—
—
—
Total
$
298
$
(298)
$
—
$
—
$
—
As of December 31, 2025
Counterparty
Derivative Liabilities subject to Master Netting Agreement
Derivatives available for Offset
Non-cash Collateral Pledged
Cash Collateral Pledged
Net amount of Derivative Liabilities
Morgan Stanley Capital Services LLC
$
—
$
—
$
—
$
—
$
—
JP Morgan Chase Bank N.A.
1,436
(298)
—
(1,138)
—
Total
$
1,436
$
(298)
$
—
$
(1,138)
$
—
As of December 31, 2024
Counterparty
Derivative Assets subject to Master Netting Agreement
Derivative Liabilities subject to Master Netting Agreement
Derivatives available for Offset
Non-cash Collateral Pledged
Cash Collateral Pledged
Net amount of Derivative Liabilities
Morgan Stanley Capital Services LLC
$
—
$
—
$
—
$
—
$
—
JP Morgan Chase Bank N.A.
6,875
—
—
(6,875)
—
Barclays Bank PLC
—
—
—
—
—
Total
$
6,875
$
—
$
—
$
(6,875)
$
—
9. BORROWINGS
The Company is a party to the Credit Facility, as described below. In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 150% after such borrowing. For the purposes of the asset coverage ratio under the Investment Company Act, the Preferred Stock, as defined in Note 1, Organization, to these consolidated financial statements is considered a senior security and is included in the denominator of the calculation as of December 31, 2024. As of December 31, 2025 and 2024, asset coverage was 175.6% and 183.2%, respectively, and the Company was in compliance with all covenants and other requirements of the respective agreements of the Credit Facility.
The following table details the principal amount and carrying amount of the Company’s debt and secured borrowings as of December 31, 2025 and 2024.
As of December 31,
2025
2024
Credit Facility
$
563,660
$
213,439
2028 Notes
—
85,000
2030 Notes
300,000
300,000
2031 Notes
300,000
—
2015-1N Debt
380,000
380,000
Total principal amount outstanding
1,543,660
978,439
Less: unamortized debt issuance costs
(11,266)
(10,790)
Effective interest rate swap hedge
(1,184)
(6,700)
Total carrying value
$
1,531,210
$
960,949
Credit Facility
On March 21, 2014, the Company entered into a senior secured revolving credit facility (as amended, the “Credit Facility”), which was most recently amended and restated on March 12, 2025, and may be further amended from time to time. On July 10, 2025, the Company increased the total commitments under the Credit Facility by $25,000 pursuant to the terms of the agreement, resulting in total commitments increasing to $960,000 ($935,000 prior to the July 10, 2025 increase), subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $1,402,500 ($1,185,000 prior to the March 12, 2025 amendment), through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $75,000 ($50,000 prior to the March 12, 2025 amendment) limit for swingline loans and a $30,000 ($20,000 prior to the March 12, 2025 amendment) limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either (i) a term benchmark rate of the Adjusted Term SOFR Rate, the Adjusted Euribor Rate, or the applicable Local Rate, as the case may be, or (ii) an Alternate Base Rate (which is the highest of (a) the Prime Rate, (b) the NYFRB Rate plus 0.50%, or (c) the Adjusted Term SOFR Rate for one month plus 1.00%) plus an applicable margin, each capitalized term as defined in the Credit Facility. The applicable margin for a term benchmark rate loan will be up to 1.875% and for an Alternate Base Rate loan will be up to 0.875%, in each case depending on the level of the gross borrowing base compared to the combined debt amount. The Company may elect either the term benchmark rate or the Alternative Base Rate at
the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on unused amounts under the Credit Facility and, in respect of each unused letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding.
The availability period under the Credit Facility will terminate on March 12, 2029 (August 31, 2027 prior to the March 12, 2025 amendment). The maturity date for $825,000 of the $960,000 of commitments is March 12, 2030 (May 25, 2027 prior to the August 31, 2023 amendment). On May 25, 2026, the availability period of the remaining $135,000 of commitments will terminate. For a one year period commencing at the end of each respective availability period, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, stockholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature. As of December 31, 2025 and 2024, the Company was in compliance with all covenants and other requirements of the Credit Facility.
Below is a summary of the borrowings and repayments under the Credit Facility for the years ended December 31, 2025, 2024, and 2023, and the outstanding balances under the Credit Facility for the respective periods.
Year Ended December 31,
2025
2024
2023
Outstanding borrowings, beginning of year
$
213,439
$
260,356
$
440,441
Borrowings
1,372,331
490,567
166,792
Repayments
(1,031,769)
(535,525)
(350,408)
Foreign currency translation
9,659
(1,959)
3,531
Outstanding borrowings, end of year
$
563,660
$
213,439
$
260,356
The Credit Facility consisted of the following as of December 31, 2025 and 2024:
Total Facility
Borrowings Outstanding
Unused
Portion (1)
Amount Available (2)
December 31, 2025
$
960,000
$
563,660
$
396,340
$
396,340
December 31, 2024
$
790,000
$
213,439
$
576,561
$
509,121
(1)The unused portion is the amount upon which commitment fees are based.
(2)The amount available is based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
For the years ended December 31, 2025, 2024, and 2023, the components of interest expense and credit facility fees of the Credit Facility were as follows:
Year Ended December 31,
2025
2024
2023
Interest expense
$
18,599
$
13,195
$
27,189
Facility unused commitment fee
2,277
2,370
1,297
Amortization of deferred financing costs and debt issuance costs
1,025
856
763
Total interest expense and credit facility fees
$
21,901
$
16,421
$
29,249
Cash paid for interest expense and credit facility fees
$
20,391
$
15,446
$
28,645
Weighted average debt principal outstanding
$
330,110
$
186,517
$
391,923
Weighted average interest rate(1)
5.56
%
6.96
%
6.84
%
(1)Excludes facility unused commitment fee and amortization of deferred financing costs and debt issuance costs.
As of December 31, 2025 and 2024, the components of interest and credit facility fees payable of the Credit Facility were as follows:
As of December 31,
2025
2024
Interest expense payable
$
877
$
88
Unused commitment fees payable
558
699
Interest and credit facility fees payable
$
1,435
$
787
Weighted average interest rate
5.28
%
6.18
%
CSL III SPV Credit Facility
Effective March 27, 2025, as a result of the completion of the CSL III Merger, the Company succeeded to the obligations of CSL III under a senior secured revolving credit facility (as amended, the “CSL III SPV Credit Facility” and together with the Credit Facility, the “Credit Facilities”) previously entered into by CSL III SPV on September 30, 2022. The CSL III SPV Credit Facility was most recently amended on March 27, 2025. The CSL III SPV Credit Facility provided for secured borrowings of up to $250,000, subject to availability under the CSL III SPV Credit Facility and borrowing restrictions under the Investment Company Act. The CSL III SPV Credit Facility had a revolving period through September 30, 2025 and a stated maturity date of September 30, 2030, with a one-year extension option available at the election of CSL III SPV. Borrowings may have been made in U.S. Dollars and bore interest initially at a rate equal to three-month SOFR (or, if applicable, a base rate comprised of the prime rate or the federal funds rate plus 0.50%) plus 2.85%. The SPV also paid an unused commitment fee of 0.30% per annum on unused amounts under the CSL III SPV Credit Facility. Payments of interest and fees were made quarterly.
The CSL III SPV Credit Facility was secured by a first lien security interest on substantially all of the assets of CSL III SPV. The CSL III SPV Credit Facility included customary covenants, limitations on the incurrence of additional indebtedness and liens, and other maintenance requirements, as well as standard events of default for senior secured revolving credit facilities of this nature.
On October 2, 2025, all outstanding borrowings of the CSL III SPV Credit Facility were repaid in full. Upon such repayment, the CSL III SPV Credit Facility was terminated and all commitments and obligations of the lenders were cancelled.
Below is a summary of the borrowings and repayments under the CSL III SPV Credit Facility for the period from March 27, 2025 through October 2, 2025, and the outstanding balance under the CSL III SPV Credit Facility for the period.
For the period from March 27, 2025 through October 2, 2025
Outstanding borrowings, beginning of year
$
—
CSL III Merger
206,000
Borrowings
—
Repayments
(206,000)
Outstanding borrowings, end of year
$
—
For the period from March 27, 2025 through October 2, 2025, the components of interest expense and credit facility fees of the CSL III SPV Credit Facility were as follows:
For the period from March 27, 2025 through October 2, 2025
Interest expense
$
6,632
Facility unused commitment fee
118
Total interest expense and credit facility fees
$
6,750
Cash paid for interest expense and credit facility fees
$
9,264
Weighted average debt principal outstanding
$
175,984
Weighted average interest rate(1)
7.18
%
(1)Excludes facility unused commitment fee and amortization of deferred financing costs and debt issuance costs.
On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.75% senior unsecured notes due December 31, 2024 (the “2019 Notes”). Interest was payable quarterly, beginning March 31, 2020. On December 11, 2020, the Company issued an additional $75.0 million aggregate principal amount of 4.50% senior unsecured notes due December 31, 2024 (the “2020 Notes” and together with the 2019 Notes, the “2024 Notes”). Interest was payable quarterly, beginning December 31, 2020. The 2024 Notes were repaid in full at maturity on December 31, 2024.
On November 20, 2023, the Company completed a public offering of $85.0 million aggregate principal of its 8.20% senior unsecured notes due December 1, 2028 (the “2028 Notes”), pursuant to an indenture dated November 20, 2023 (the “CGBD Base Indenture”), as supplemented by a first supplemental indenture thereto, dated November 20, 2023 (together, the “2028 Notes Indenture”). The 2028 Notes previously traded on Nasdaq under the symbol CGBDL. On December 1, 2025, the Company redeemed the 2028 Notes at a redemption price equal to 100% of the principal amount redeemed, plus accrued and unpaid interest otherwise payable for the then-current quarterly interest period accrued to, but excluding, December 1, 2025 (the “Redemption Date”). In connection with the redemption, the 2028 Notes were delisted from Nasdaq.
On October 18, 2024, the Company completed a public offering of $300.0 million aggregate principal of its 6.75% senior unsecured notes due February 18, 2030 (the “2030 Notes”), pursuant to the CGBD Base Indenture, as supplemented by a second supplemental indenture thereto, dated October 18, 2024 (together, the “2030 Notes Indenture”). The 2030 Notes may be redeemed in whole or in part at the Company’s option at any time or from time to time at a redemption price equal to the greater of (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the notes matured on January 18, 2030) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 45 basis points less (b) interest accrued to the date of redemption, or (2) 100% of the principal amount of the 2030 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to, but excluding, the redemption date. At any time on or after January 18, 2030, the Company may redeem the 2030 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding the redemption date.
On October 7, 2025, the Company completed a public offering of $300.0 million aggregate principal of its 5.75% senior unsecured notes due February 15, 2031 (the “2031 Notes” and together with the 2024 Notes, 2028 Notes, and 2030 Notes, the “Senior Notes”), pursuant to the CGBD Base Indenture, as supplemented by a third supplemental indenture thereto, dated October 7, 2025 (together, the “2031 Notes Indenture”). The 2031 Notes may be redeemed, in whole or in part, at the Company’s option at any time or from time to time, at a redemption price equal to the greater of (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the notes matured on January 15, 2031) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points, less (b) interest accrued to the date of redemption, or (2) 100% of the principal amount of the 2031 Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to, but excluding, the redemption date. At any time on or after January 15, 2031, the Company may redeem the 2031 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2031 Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date.
The 2030 Notes and 2031 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
The following table details the Company’s Senior Notes as of December 31, 2025 and 2024:
For the years ended December 31, 2025, 2024, and 2023, the components of interest expense and credit facility fees on the Senior Notes were as follows:
Year Ended December 31,
2025
2024
2023
Interest expense(1)
$
31,458
$
20,144
$
9,660
Amortization of deferred financing costs and debt issuance costs
4,047
1,088
199
Total interest expense and credit facility fees
$
35,505
$
21,232
$
9,859
Cash paid for interest expense and credit facility fees
$
23,315
$
16,345
$
8,837
Weighted average debt principal outstanding
$
448,466
$
335,956
$
199,574
Weighted average interest rate(1)(2)
6.92
%
5.90
%
4.77
%
(1)Inclusive of net interest expense related to interest rate swaps, as applicable.
(2)Excludes amortization of deferred financing costs and debt issuance costs.
As of December 31, 2025 and December 31, 2024, $12,847 and $4,637, respectively, of interest expense related to the Senior Notes was included in interest and credit facility fees payable. As of December 31, 2025 and 2024, the weighted average interest rates were 6.84% and 6.95%, respectively, inclusive of the effect of the interest rate swaps.
The 2030 Notes Indenture and 2031 Notes Indenture each contain certain covenants, including certain covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC; to comply with Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, and subject to certain other exceptions. These covenants are subject to important limitations and exceptions that are described in the 2030 Notes Indenture and 2031 Notes Indenture. None of the 2030 Notes Indenture or the 2031 Notes Indenture limits the amount of debt (including secured debt) that may be issued by us or our subsidiaries under the indenture or otherwise. As of December 31, 2025 and 2024, the Company was in compliance with these terms and conditions.
Securitizations
On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly owned and consolidated subsidiary of the Company. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $273,000 in notes that were issued at par and were scheduled to mature on July 15, 2027. The Company received 100% of the $125,900 in nominal value of the non-interest bearing preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the 2015-1 Issuer of the initial closing date loan portfolio. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement.
On August 30, 2018, the Company and the 2015-1 Issuer closed the 2015-1 Debt Securitization Refinancing. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, refinanced the 2015-1 Notes with the 2015-1R Notes, reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 to approximately $104,525 and extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively.
Following the 2015-1 Debt Securitization Refinancing, the Company retained the 2015-1 Issuer Preferred Interests. The 2015-1R Notes in the 2015-1 Debt Securitization Refinancing were issued by the 2015-1 Issuer and were secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.
On June 30, 2023, the 2015-1R Notes were amended to transition the benchmark rate to the Term SOFR Rate plus a Term SOFR adjustment (LIBOR prior to the 2015-1R Effective Date, as defined). The amendment was effective at the commencement of the next succeeding interest accrual period following the date of the amendment (the “2015-1R Effective Date”).
On July 2, 2024, the Company and the 2015-1 Issuer completed the 2015-1R Refinancing, which resulted in the issuance of a $410,000 collateralized notes and loan obligation. On the closing date of the 2015-1R Refinancing, the 2015-1 Issuer refinanced the 2015-1R Notes with the 2015-1N Debt, issued additional 2015-1 Issuer Preferred Interests to the Company in the aggregate notional amount of $13,500, increasing the 2015-1 Issuer Preferred Interest held by the Company to
approximately $118,054 and extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to July 15, 2028 and July 1, 2036, respectively. As of December 31, 2025, the Company retains the $30,000 Class C-R Notes, which are eliminated in consolidation.
The following table summarizes the terms of the 2015-1N Debt and the principal amount and carrying value as of December 31, 2025 and December 31, 2024:
As of December 31,
2015-1N Debt Tranche (1)
Credit Rating
Reference Rate
Spread
December 31, 2025
December 31, 2024
Class A-1-1-A Notes
AAA
SOFR
1.80%
$
240,000
$
240,000
Class A-L Loans
AAA
SOFR
1.80%
50,000
50,000
Class A-1-2-B Notes
AAA
SOFR
2.00%
20,000
20,000
Class A-2-RR Notes
AA
SOFR
2.15%
30,000
30,000
Class B-R Notes
Single A
SOFR
2.75%
40,000
40,000
Total Principal Amount Outstanding
$
380,000
$
380,000
Less: unamortized debt issuance costs
(2,026)
(2,218)
Total Carrying Value
$
377,974
$
377,782
(1)Excludes $30 million of Class C-R notes, which are rated BBB-, accrue interest at SOFR plus spread of 3.75%, and are retained by the Company.
The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1R Notes and 2015-1N Debt, the Company made customary representations, warranties and covenants in the purchase agreement.
During the reinvestment period, pursuant to the indenture governing the 2015-1R Notes and 2015-1N Debt, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager under a collateral management agreement (the “Collateral Management Agreement”) of the 2015-1 Issuer and in accordance with the Company’s investment strategy.
Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the 2015-1 Issuer Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the 2015-1 Issuer Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the years ended December 31, 2025 and 2024. Any such waived fees may not be recaptured by the Investment Adviser.
Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization Refinancing, the Company has agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of December 31, 2025, the Company was in compliance with its undertaking.
As of December 31, 2025, the 2015-1N Debt was secured by 67 investments with a total fair value of approximately $487,820, including $13,004 of net purchases that were unsettled as of December 31, 2025, and cash of $29,764. The pool of investments in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1N Debt.
For the years ended December 31, 2025, 2024, and 2023, the components of interest expense and credit facility fees on the Securitizations were as follows:
Year Ended December 31,
2025
2024
2023
Interest expense
$
23,738
$
29,373
$
32,356
Amortization of deferred financing costs and debt issuance costs
192
1,459
247
Total interest expense and credit facility fees
$
23,930
$
30,832
$
32,603
Cash paid for interest expense and credit facility fees
$
24,357
$
31,836
$
30,875
Weighted average debt principal outstanding
$
380,000
$
398,459
$
449,200
Weighted average interest rate(1)
6.21
%
7.61
%
7.16
%
(1)Includes amortization of deferred financing costs and debt issuance costs.
As of December 31, 2025 and 2024, $4,810 and $5,429, respectively, of interest expense related to securitizations was included in interest and credit facility fees payable. As of December 31, 2025 and 2024, the weighted average interest rates were 5.84% and 6.59%, respectively, based on benchmark rates.
10. COMMITMENTS AND CONTINGENCIES
A summary of significant contractual payment obligations was as follows as of December 31, 2025 and 2024:
As of December 31,
Payment Due by Period
2025
2024
Less than one year
$
—
$
—
1-3 years
75,327
36,319
3-5 years
788,333
262,120
More than 5 years
680,000
680,000
Total
$
1,543,660
$
978,439
In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the audited consolidated financial statements as of December 31, 2025 and 2024 for any such exposure.
The Company has in the past, currently is and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments. The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:
Par/Principal Amount as of
2025
2024
Unfunded delayed draw commitments
$
256,926
$
105,485
Unfunded revolving loan commitments
174,680
73,762
Total unfunded commitments
$
431,606
$
179,247
11. NET ASSETS
The Company has the authority to issue 198,000,000 shares of common stock, par value $0.01 per share, of which 71,807,190 and 50,906,262 shares were issued and outstanding as of December 31, 2025 and 2024, respectively. The Company had 2,000,000 shares of preferred stock, par value $0.01 per share, which were fully issued and outstanding as of December 31, 2024. On March 27, 2025, all outstanding preferred shares were exchanged for common stock in connection with the CSL III Merger. As of December 31, 2025, there were no preferred shares outstanding.
166
Cumulative Convertible Preferred Stock
On May 5, 2020, the Company issued and sold 2,000,000 shares of Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share. The Preferred Stock had a liquidation preference equal to $25 per share (the “Liquidation Preference”) plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends were payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at the Company’s option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock.
In connection with the completion of the CSL III Merger on March 27, 2025, and in a transaction exempt from registration under the Securities Act, CIM exchanged all 2,000,000 shares of the Company’s Preferred Stock for 3,004,808 shares of the Company’s common stock based on the aggregate $50,000 Liquidation Preference of the Preferred Stock and the Company’s net asset value per share as of March 25, 2025, equal to $16.64. Following the completion of the Preferred Stock Exchange and the issuance of the related common shares, the Preferred Stock was cancelled, ceased to be outstanding, and no longer exists. Thereafter, CIM, the former holder of Preferred Stock, holds only the Company’s common stock.
In connection with the completion of the CSL III Merger on March 27, 2025, CIM, as the holder of record of the Preferred Stock, entered into a Lock-Up Agreement with the Company (the “Lock-Up Agreement”) and an amended and restated registration rights agreement (the “Registration Rights Agreement”). The Lock-Up Agreement restricts CIM from transferring, assigning, pledging, or otherwise disposing of or encumbering any of the Company’s common stock received in the Preferred Stock Exchange during the applicable lock-up periods, unless such transfer is approved by the Company’s Board of Directors and is in compliance with applicable securities and other laws.
Under the terms of the Lock-Up Agreement, the restricted period commenced on March 27, 2025 and will end on (i) March 22, 2026 for one-third of the shares of the Company’s common stock issued to CIM as a result of the Preferred Stock Exchange, (ii) September 18, 2026 for one-third of the shares of the Company’s common stock issued to CIM as a result of the Preferred Stock Exchange and (iii) March 17, 2027 for one-third of the shares of Company’s common stock issued to CIM as a result of the Preferred Stock Exchange.
The following table summarizes the Company’s dividends declared on the Preferred Stock during the three most recent fiscal years. Unless otherwise noted, dividends were declared and paid, or are payable, in cash.
Date Declared
Record Date
Payment Date
Per Share Amount
2023
March 23, 2023
March 31, 2023
March 31, 2023
$
0.438
June 27, 2023
June 30, 2023
June 30, 2023
0.438
September 19, 2023
September 29, 2023
September 29, 2023
0.438
December 19, 2023
December 29, 2023
December 29, 2023
0.438
Total
$
1.752
2024
March 26, 2024
March 29, 2024
March 29, 2024
$
0.438
June 25, 2024
June 28, 2024
June 28, 2024
0.438
September 26, 2024
September 30, 2024
September 30, 2024
0.438
December 11, 2024
December 31, 2024
December 31, 2024
0.438
Total
$
1.752
2025
March 12, 2025
March 26, 2025
March 27, 2025
$
0.413
Total
$
0.413
Share Issuances
CSL III Merger
On March 27, 2025, the Company completed its previously announced merger with CSL III. Pursuant to the terms of the CSL III Merger, the Company issued an aggregate of 18,935,108 shares of its common stock to former CSL III
167
shareholders. Refer to Note 16, Merger with CSL III, to these consolidated financial statements for additional information regarding the CSL III Merger.
In connection with the completion of the CSL III Merger, and in a transaction exempt from registration under the Securities Act, CIM exchanged all 2,000,000 shares of the Company’s Preferred Stock for 3,004,808 shares of the Company’s common stock.
Dividend Reinvestment
Prior to July 5, 2017, the Company had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, the Company converted the “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of dividends and other distributions on behalf of the common stockholders, other than those common stockholders who have “opted out” of the plan. The Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
The following table summarizes the shares of the Company’s common stock issued under the dividend reinvestment plan during the year ended December 31, 2025 and 2024:
Shares Issued
Total Consideration
Year Ended December 31, 2024
July 17, 2024
53,517
$
977
October 17, 2024
57,805
$
1,026
Total
111,322
$
2,003
Year Ended December 31, 2025
January 17, 2025
50,728
$
949
Total
50,728
$
949
No shares were issued under the dividend reinvestment plan during the year ended December 31, 2023.
At-The-Market (“ATM”) Program
On March 28, 2025, the Company entered into an equity distribution agreement with Oppenheimer & Co. Inc., B. Riley Securities, Inc., Citizens JMP Securities, LLC, Keefe, Bruyette & Woods, Inc., and Raymond James & Associates, Inc. (collectively, the “Placement Agents”). The agreement provides for the offer and sale of up to $150,000 in aggregate offering amount of the Company’s common stock from time to time through an ATM offering, as defined in Rule 415 under the Securities Act of 1933. The minimum price per share on any day at which common stock may be sold under the ATM program will not be below the then-current net asset value per share.
The following table summarizes the shares of the Company’s common stock issued under the ATM offering during the year ended December 31, 2025:
Shares Issued
Gross Proceeds
Net Proceeds(1)
Year Ended December 31, 2025
March 28, 2025
6,075
$
102
$
101
Total
6,075
$
102
$
101
(1)Represents the proceeds received after deducting the Placement Agents’ commissions and offering related expenses.
Company Stock Repurchase Program
On October 29, 2025, the Company's Board of Directors approved the continuation of the Company's $200 million stock repurchase program (the “Stock Repurchase Program”) until November 5, 2026, or until the approved dollar amount has been used to repurchase shares of common stock. On February 18, 2026, the Company’s Board of Directors approved a $100 million increase in the authorized amount available for repurchases under the Stock Repurchase Program to up to
168
$300 million. This program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. Pursuant to this authorization, the Company has adopted a 10b5-1 plan (the “Company 10b5-1 Plan”). The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rule 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which the Company cannot predict.
The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018. Since the inception of the Company’s Stock Repurchase Program through December 31, 2025, the Company has repurchased 12,869,509 shares of the Company's common stock at an average cost of $13.33 per share, or $171,611 in the aggregate, resulting in accretion to NAV per common share of $0.73.
Changes in Net Assets
For the year ended December 31, 2025 the Company repurchased and extinguished 1,095,791 shares for $13,874. For the year ended December 31, 2024 there were no shares repurchased. For the year ended December 31, 2023, the Company repurchased and extinguished 265,195 shares for $3,993. There were 21,996,719 shares of common stock issued for $366,888 during the year ended December 31, 2025. There were 111,321 shares of common stock issued for $2,003 related to capital activity during the year ended December 31, 2024. No shares were issued during the year ended December 31, 2023.
The following table summarizes capital activity during the year ended December 31, 2025:
Preferred Stock
Common Stock
Capital in Excess of Par Value
Offering Costs
Accumulated Net Investment Income (Loss)
Accumulated Net Realized Gain (Loss)
Accumulated Net Unrealized Appreciation (Depreciation)
Total Net Assets
Shares
Amount
Shares
Amount
Balance, January 1, 2025
2,000,000
$
50,000
50,906,262
$
509
$
1,014,308
$
(1,633)
$
68,440
$
(185,346)
$
(41,074)
$
905,204
Repurchase of common stock
—
—
(1,095,791)
(11)
(13,863)
—
—
—
—
(13,874)
Common stock issued, net of offering and underwriting costs
—
—
6,075
0
101
—
—
—
—
101
Common stock issued - CSL III Merger
—
—
18,935,108
189
315,649
—
—
—
—
315,838
Common stock issued - Preferred Stock Exchange
(2,000,000)
(50,000)
3,004,808
30
49,970
—
—
—
—
—
Dividend reinvestment
—
—
50,728
1
948
—
—
—
—
949
Net investment income (loss)
—
—
—
—
—
—
100,746
—
—
100,746
Net realized gain (loss)
—
—
—
—
—
—
—
(58,592)
—
(58,592)
Net change in unrealized appreciation (depreciation)
—
—
—
—
—
—
—
—
27,818
27,818
Dividends declared on common stock and preferred stock
—
—
—
—
—
—
(110,802)
—
—
(110,802)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP
—
—
—
—
(3,115)
—
(8,461)
11,576
—
—
Balance, December 31, 2025
—
$
—
71,807,190
$
718
$
1,363,998
$
(1,633)
$
49,923
$
(232,362)
$
(13,256)
$
1,167,388
169
The following table summarizes capital activity during the year ended December 31, 2024:
Preferred Stock
Common Stock
Capital in Excess of Par Value
Offering Costs
Accumulated Net Investment Income (Loss)
Accumulated Net Realized Gain (Loss)
Accumulated Net Unrealized Appreciation (Depreciation)
Total Net Assets
Shares
Amount
Shares
Amount
Balance, January 1, 2024
2,000,000
$
50,000
50,794,941
$
508
$
1,015,681
$
(1,633)
$
62,563
$
(149,754)
$
(64,553)
$
912,812
Dividend reinvestment
—
—
111,321
1
2,002
—
—
—
—
2,003
Net investment income (loss)
—
—
—
—
—
—
105,252
—
—
105,252
Net realized gain (loss)
—
—
—
—
—
—
—
(39,753)
—
(39,753)
Net change in unrealized appreciation (depreciation)
—
—
—
—
—
—
—
—
23,479
23,479
Dividends declared on common stock and preferred stock
—
—
—
—
—
—
(98,589)
—
—
(98,589)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP
—
—
—
—
(3,375)
—
(786)
4,161
—
—
Balance, December 31, 2024
2,000,000
$
50,000
50,906,262
$
509
$
1,014,308
$
(1,633)
$
68,440
$
(185,346)
$
(41,074)
$
905,204
The following table summarizes capital activity during the year ended December 31, 2023:
Preferred Stock
Common Stock
Capital in Excess of Par Value
Offering Costs
Accumulated Net Investment Income (Loss)
Accumulated Net Realized Gain (Loss)
Accumulated Net Unrealized Appreciation (Depreciation)
Total Net Assets
Shares
Amount
Shares
Amount
Balance, January 1, 2023
2,000,000
$
50,000
51,060,136
$
511
$
1,022,224
$
(1,633)
$
43,097
$
(129,061)
$
(67,715)
$
917,423
Repurchase of common stock
—
—
(265,195)
(3)
(3,990)
—
—
—
—
(3,993)
Net investment income (loss)
—
—
—
—
—
—
109,971
—
—
109,971
Net realized gain (loss)
—
—
—
—
—
—
—
(20,853)
—
(20,853)
Net change in unrealized appreciation (depreciation)
—
—
—
—
—
—
—
—
3,162
3,162
Dividends declared on common stock and preferred stock
—
—
—
—
—
—
(92,898)
—
—
(92,898)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP
—
—
—
—
(2,553)
—
2,393
160
—
—
Balance, December 31, 2023
2,000,000
$
50,000
50,794,941
$
508
$
1,015,681
$
(1,633)
$
62,563
$
(149,754)
$
(64,553)
$
912,812
Earnings Per Share
The Company calculates earnings per share in accordance with ASC 260. Basic earnings per share is calculated by dividing the net increase (decrease) in net assets resulting from operations, less preferred dividends, by the weighted average number of common shares outstanding for the period. Diluted earnings per share gives effect to all dilutive potential common
170
shares outstanding using the if-converted method for the convertible Preferred Stock. Diluted earnings per share excludes all dilutive potential common shares if their effect is anti-dilutive.
Basic and diluted earnings per common share were as follows:
Year Ended December 31,
2025
2024
2023
Basic
Diluted
Basic
Diluted
Basic
Diluted
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders
$
69,146
$
69,972
$
85,478
$
88,978
$
88,780
$
92,280
Weighted average common shares outstanding
67,718,284
69,038,337
50,831,205
56,468,099
50,817,659
56,311,555
Basic and diluted earnings per share
$
1.02
$
1.01
$
1.68
$
1.58
$
1.75
$
1.64
The following table summarizes updates to the Company’s dividend policy as of December 31, 2025. The dividend policy is subject to change by the Board of Directors in its sole discretion at any time.
Record Date
Base Dividend Per Share
September 30, 2020
$
0.32
September 30, 2022
$
0.34
December 30, 2022
$
0.36
March 31, 2023
$
0.37
March 29, 2024
$
0.40
The following table summarizes the Company’s dividends declared on its common stock during the three most recent fiscal years:
Date Declared
Record Date
Payment Date
Per Common Share Amount
February 21, 2023
March 31, 2023
April 14, 2023
$
0.37
February 21, 2023
March 31, 2023
April 14, 2023
$
0.07
(1)
May 4, 2023
June 30, 2023
July 18, 2023
$
0.37
May 4, 2023
June 30, 2023
July 18, 2023
$
0.07
(1)
August 3, 2023
September 29, 2023
October 17, 2023
$
0.37
August 3, 2023
September 29, 2023
October 17, 2023
$
0.07
(1)
November 2, 2023
December 29, 2023
January 18, 2024
$
0.37
November 2, 2023
December 29, 2023
January 18, 2024
$
0.07
(1)
February 20, 2024
March 29, 2024
April 17, 2024
$
0.40
February 20, 2024
March 29, 2024
April 17, 2024
$
0.08
(1)
May 2, 2024
June 28, 2024
July 17, 2024
$
0.40
May 2, 2024
June 28, 2024
July 17, 2024
$
0.07
(1)
August 1, 2024
September 30, 2024
October 17, 2024
$
0.40
August 1, 2024
September 30, 2024
October 17, 2024
$
0.07
(1)
November 4, 2024
December 31, 2024
January 17, 2025
$
0.40
November 4, 2024
December 31, 2024
January 17, 2025
$
0.05
(1)
February 18, 2025
March 24, 2025
April 17, 2025
$
0.40
February 18, 2025
March 24, 2025
April 17, 2025
$
0.05
(1)
April 29, 2025
June 30, 2025
July 17, 2025
$
0.40
July 29, 2025
September 30, 2025
October 17, 2025
$
0.40
October 29, 2025
December 31, 2025
January 16, 2026
$
0.40
(1)Represents a special/supplemental dividend.
171
12. CONSOLIDATED FINANCIAL HIGHLIGHTS
The following is a schedule of consolidated financial highlights for the years ended December 31, 2025, 2024, 2023, 2022 and 2021:
Year Ended December 31,
2025
2024
2023
2022
2021
Per Common Share Data:
Net asset value per common share, beginning of year
$
16.80
$
16.99
$
16.99
$
16.91
$
15.39
Net investment income (loss)(1)
1.48
2.00
2.10
1.93
1.53
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments, non-investment assets and liabilities, and forward currency contracts
(0.46)
(0.32)
(0.35)
(0.35)
1.36
Net increase (decrease) in net assets resulting from operations
1.02
1.68
1.75
1.58
2.89
Dividends declared(2)
(1.65)
(1.87)
(1.76)
(1.64)
(1.50)
Other(3)
—
—
—
0.01
0.03
Accretion due to issuance of common stock(4)
0.03
—
—
—
—
Accretion due to share repurchases
0.06
—
0.01
0.13
0.10
Net asset value per common share, end of year
$
16.26
$
16.80
$
16.99
$
16.99
$
16.91
Market price per common share, end of year
$
12.49
$
17.93
$
14.96
$
14.31
$
13.73
Number of common shares outstanding, end of year
71,807,190
50,906,262
50,794,941
51,060,136
53,142,454
Total return based on net asset value(5)
8.50
%
10.21
%
12.59
%
13.00
%
19.62
%
Total return based on market price(6)
(21.91)
%
33.59
%
17.71
%
17.22
%
48.44
%
Net assets attributable to Common Stockholders, end of year
$
1,167,388
$
855,204
$
862,812
$
867,423
$
898,804
Ratio to average net assets attributable to Common Stockholders:
Expenses before incentive fees
11.89
%
12.28
%
12.66
%
9.23
%
7.62
%
Expenses after incentive fees
13.76
%
14.80
%
15.29
%
11.65
%
9.63
%
Expenses gross of waiver, after incentive fees
13.76
%
14.80
%
15.29
%
11.65
%
9.63
%
Net investment income (loss)
8.95
%
12.23
%
12.77
%
11.75
%
9.91
%
Interest expense and credit facility fees
7.83
%
7.96
%
8.33
%
4.96
%
3.51
%
Ratios/Supplemental Data:
Asset coverage, end of year
175.62
%
183.16
%
183.40
%
176.79
%
181.94
%
Portfolio turnover
62.14
%
27.90
%
12.05
%
30.00
%
45.44
%
Weighted-average common shares outstanding
67,718,284
50,831,205
50,817,659
52,112,420
54,244,432
(1)Net investment income (loss) per common share was calculated as net investment income (loss) less the preferred dividend for the year divided by the weighted average number of common shares outstanding for the year.
(2)Dividends declared per common share was calculated as the sum of dividends on common stock declared during the year divided by the number of common shares outstanding at each respective quarter-end date (refer to Note 11, Net Assets, to these consolidated financial statements).
(3)Includes the impact of different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding and certain per share data based on the shares outstanding as of a period end or transaction date.
(4)Represents accretion from shares issued upon completion of the CSL III Merger, dividend reinvestment plan and the ATM program, net of underwriting and issuance costs incurred in the ATM program.
(5)Total return based on net asset value (not annualized) is based on the change in net asset value per common share during the year plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year.
(6)Total return based on market value (not annualized) is calculated as the change in market value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning market price for the period.
172
The following is a schedule of consolidated financial highlights for the years ended December 31, 2020, 2019, 2018, 2017 and 2016 :
For the years ended December 31,
2020
2019
2018
2017
2016
Per Common Share Data:
Net asset value per common share, beginning of year
$
16.56
$
17.09
$
18.12
$
18.32
$
18.14
Net investment income (loss)(1)
1.54
1.79
1.73
1.74
1.65
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities
(1.46)
(0.75)
(1.10)
(0.19)
0.20
Net increase (decrease) in net assets resulting from operations
0.08
1.04
0.63
1.55
1.85
Dividends declared(2)
(1.47)
(1.74)
(1.68)
(1.64)
(1.68)
Accretion due to share repurchases
0.22
0.17
0.02
—
—
Effect of offering price of subscriptions and the offering price of common stock in the IPO, net of underwriting and offering costs
—
—
—
(0.11)
0.01
Net asset value per common share, end of year
$
15.39
$
16.56
$
17.09
$
18.12
$
18.32
Market price per common share, end of year
$
10.26
$
13.38
$
12.40
$
20.04
n/a
Number of common shares outstanding, end of year
55,320,309
57,763,811
62,230,251
62,207,603
41,702,318
Total return based on net asset value(3)
1.81
%
7.08
%
3.59
%
7.86
%
10.25
%
Total return based on market price(4)
(12.33)
%
21.94
%
(29.74)
%
14.97
%
n/a
Net assets attributable to Common Stockholders, end of year
$
851,363
$
956,471
$
1,063,218
$
1,127,304
$
764,137
Ratio to average net assets attributable to Common Stockholders:
Expenses before incentive fees
8.48
%
8.79
%
6.77
%
5.25
%
5.46
%
Expenses after incentive fees
10.59
%
11.05
%
8.81
%
7.39
%
7.69
%
Expenses gross of waiver, after incentive fees
10.59
%
11.05
%
8.81
%
7.97
%
8.62
%
Net investment income (loss)
10.08
%
10.47
%
9.64
%
9.35
%
8.93
%
Interest expense and credit facility fees
4.49
%
5.22
%
3.57
%
2.69
%
2.85
%
Ratios/Supplemental Data:
Asset coverage, end of period
182.09
%
181.01
%
210.31
%
234.86
%
209.97
%
Portfolio turnover
33.06
%
38.97
%
45.88
%
49.18
%
32.39
%
Weighted-average common shares outstanding
56,421,137
60,189,502
62,533,614
52,997,450
36,152,390
(1)Net investment income (loss) per common share was calculated as net investment income (loss) less the preferred dividend for the year divided by the weighted average number of common shares outstanding for the year.
(2)Dividends declared per common share was calculated as the sum of dividends on common stock declared during the year divided by the number of common shares outstanding at each respective quarter-end date (refer to Note 11, Net Assets, to these consolidated financial statements).
(3)Total return based on net asset value (not annualized) is based on the change in net asset value per common share during the year plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year.
(4)Total return based on market value (not annualized) is calculated as the change in market value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning market price for the period.
Senior Securities
Information about the Company’s senior securities is shown in the following table as of the end of each fiscal year ended December 31 since the Company commenced operations on May 2, 2013.
Class and Year/Period
Total Amount Outstanding
Exclusive of Treasury
Securities(1) ($ in millions)
Asset Coverage
Per Unit(2)
Involuntary
Liquidating
Preference Per Unit(3)
Average
Market Value
Per Unit(4)
Total Senior Securities
December 31, 2025
$
1,543.7
$
1,756.0
—
N/A
December 31, 2024
$
1,028.4
$
1,832.0
—
N/A
173
Class and Year/Period
Total Amount Outstanding
Exclusive of Treasury
Securities(1) ($ in millions)
Asset Coverage
Per Unit(2)
Involuntary
Liquidating
Preference Per Unit(3)
Average
Market Value
Per Unit(4)
December 31, 2023
$
1,034.6
$
1,834.0
—
N/A
December 31, 2022
$
1,129.6
$
1,768.0
—
N/A
December 31, 2021
$
1,096.9
$
1,819.0
—
N/A
December 31, 2020
$
1,037.1
$
1,821.0
—
N/A
December 31, 2019
$
1,180.8
$
1,810.0
—
N/A
December 31, 2018
$
963.8
$
2,103.0
—
N/A
December 31, 2017
$
835.9
$
2,349.0
—
N/A
December 31, 2016
$
694.9
$
2,100.0
—
N/A
SPV Credit Facility(5)
December 31, 2019
$
232.5
$
356.0
—
N/A
December 31, 2018
$
224.1
$
489.0
—
N/A
December 31, 2017
$
287.4
$
808.0
—
N/A
December 31, 2016
$
252.9
$
764.0
—
N/A
Credit Facility(6)
December 31, 2025
$
563.7
$
641.0
—
N/A
December 31, 2024
$
213.4
$
381.0
—
N/A
December 31, 2023
$
260.4
$
462.0
—
N/A
December 31, 2022
$
440.4
$
689.0
—
N/A
December 31, 2021
$
407.7
$
676.0
—
N/A
December 31, 2020
$
347.9
$
611.0
—
N/A
December 31, 2019
$
384.1
$
589.0
—
N/A
December 31, 2018
$
290.5
$
634.0
—
N/A
December 31, 2017
$
275.5
$
774.0
—
N/A
December 31, 2016
$
169.0
$
511.0
—
N/A
2015-1N Debt(7)
December 31, 2025
$
380.0
$
432.0
N/A
December 31, 2024
$
380.0
$
677.0
—
N/A
2015-1R Notes(7)
December 31, 2023
$
449.2
$
796.0
—
N/A
December 31, 2022
$
449.2
$
703.0
—
N/A
December 31, 2021
$
449.2
$
745.0
—
N/A
December 31, 2020
$
449.2
$
789.0
—
N/A
December 31, 2019
$
449.2
$
689.0
—
N/A
December 31, 2018
$
449.2
$
980.0
—
N/A
2015-1 Notes(7)
December 31, 2017
$
273.0
$
767.0
—
N/A
December 31, 2016
$
273.0
$
825.0
—
N/A
2019 Notes(8)
December 31, 2023
$
115.0
$
204.0
—
N/A
December 31, 2022
$
115.0
$
180.0
—
N/A
December 31, 2021
$
115.0
$
191.0
—
N/A
December 31, 2020
$
115.0
$
202.0
—
N/A
December 31, 2019
$
115.0
$
176.0
—
N/A
2020 Notes(9)
December 31, 2023
$
75.0
$
133.0
—
N/A
December 31, 2022
$
75.0
$
117.0
—
N/A
December 31, 2021
$
75.0
$
124.0
—
N/A
December 31, 2020
$
75.0
$
132.0
—
N/A
2028 Notes(10)
December 31, 2024
$
85.0
$
151.0
—
$
25.64
December 31, 2023
$
85.0
$
151.0
—
$
25.47
2030 Notes(11)
December 31, 2025
$
300.0
$
341.0
—
N/A
174
Class and Year/Period
Total Amount Outstanding
Exclusive of Treasury
Securities(1) ($ in millions)
Asset Coverage
Per Unit(2)
Involuntary
Liquidating
Preference Per Unit(3)
Average
Market Value
Per Unit(4)
December 31, 2024
$
300.0
$
534.0
—
N/A
2031 Notes(12)
December 31, 2025
$
300.0
$
341.0
—
N/A
Preferred Stock(13)
December 31, 2024
$
50.0
$
89.0
—
N/A
December 31, 2023
$
50.0
$
89.0
—
N/A
December 31, 2022
$
50.0
$
78.0
—
N/A
December 31, 2021
$
50.0
$
83.0
—
N/A
December 31, 2020
$
50.0
$
88.0
—
N/A
(1)Total amount of each class of senior securities outstanding at the end of the period presented.
(2)Asset coverage per unit is the ratio of the carrying value of the Company’s total assets, less all liabilities excluding indebtedness represented by senior securities in this table, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.
(3)The amount to which such class of senior security would be entitled upon the Company’s involuntary liquidation in preference to any security junior to it. The “—” in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.
(4)Not applicable because the senior securities (except the 2028 Notes) are not registered for public trading. For the 2028 Notes, the amount represents the average of the daily closing prices on Nasdaq, for (a) the period from November 14, 2023 through December 31, 2023, (b) the entire 2024 fiscal year, with respect to the year end December 31, 2024.
(5)On May 24, 2013, the SPV closed on a senior secured credit facility (the “SPV Credit Facility”). On December 11, 2020, the SPV repaid all outstanding amounts under the SPV Credit Facility and the facility was terminated.
(6)On March 21, 2014, the Company closed on the Credit Facility.
(7)On June 26, 2015, the Company completed a $400.0 million term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by the 2015-1 Issuer. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing the 2015-1R Notes. On July 2, 2024, the 2015-1 Issuer refinanced the 2015-1R Notes with the 2015-1N Debt.
(8)On December 30, 2019, the Company closed a private offering of the 2019 Notes. On December 31, 2024, the 2019 Notes were repaid in full at maturity.
(9)On December 11, 2020, the Company closed a private offering of the 2020 Notes. On December 31, 2024, the 2020 Notes were repaid in full at maturity.
(10)On November 20, 2023, the Company completed a public offering of the 2028 Notes. On December 1, 2025 the 2028 Notes were repaid in full at the earliest redemption date.
(11)On October 18, 2024, the Company completed a public offering of the 2030 Notes.
(12)On October 7, 2025 the Company completed a public offering of the 2031 Notes.
(13)On May 5, 2020, the Company issued the Preferred Stock. On March 27, 2025 all shares of the Preferred Stock were exchanged for shares of common stock.
13. SEGMENT REPORTING
The Company operates through a single operating and reporting segment with an investment objective to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. The chief operating decision maker (“CODM”) is the Company’s chief financial officer. The CODM assesses the performance of the Company and makes operating decisions on a consolidated basis, primarily based on the Company’s net increase in net assets resulting from operations (“net income”). The CODM utilizes net income as a key metric in determining the amount of dividends to be distributed to the Company’s stockholders, implementing investment policy decisions, strategic initiatives, and managing and assessing the Company’s portfolio. The CODM assesses performance for the segment and determines how to allocate resources based on net income. As the Company’s operations comprise of a single reporting segment, the segment assets are reflected on the accompanying Consolidated Statements of Assets and Liabilities as Total Assets and the significant segment expenses are listed on the accompanying Consolidated Statements of Operations.
14. LITIGATION
The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of December 31, 2025 and 2024, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.
In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements.
175
15. TAX
The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of December 31, 2025 and 2024.
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of December 31, 2025 and 2024, the Company had filed tax returns. The Company’s federal tax returns are generally subject to examination by the Internal Revenue Service for a period of three years after they are filed.
Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified among the Company’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP. As of December 31, 2025 and 2024, permanent differences primarily due to non-deductible excise tax, non-deductible offering costs, and the tax treatment of partnership investments resulted in a net increase in distributable earnings (loss) by $3,115 and $3,375, respectively, and net decrease in additional paid-in capital in excess of par by $3,115 and $3,375, respectively, on the Consolidated Statements of Assets and Liabilities. Total earnings and NAV were not affected.
The tax character of the distributions paid for the fiscal years ended December 31, 2025, 2024, and 2023 was as follows:
Year Ended December 31,
2025
2024
2023
Ordinary income
$
110,802
$
98,589
$
92,898
Tax return of capital
$
—
$
—
$
—
Income Tax Information and Distributions to Stockholders
As of December 31, 2025 and 2024, the components of accumulated earnings (deficit) on a tax basis were as follows:
As of December 31,
2025
2024
Undistributed ordinary income
$
53,410
$
72,785
Other book/tax temporary differences(1)
58
(10)
Capital loss carryforwards
(252,003)
(199,701)
Net unrealized appreciation (depreciation) on investments and currency unrealized appreciation (depreciation) on non-investment assets and liabilities(2)
2,840
(31,054)
Total accumulated earnings (deficit)
$
(195,695)
$
(157,980)
(1)Consists of the unamortized portion of organization costs as of December 31, 2025 and 2024, respectively.
(2)The difference between the book-basis and tax-basis unrealized appreciation (depreciation) on investments is attributable primarily to the tax treatment of partnership investments, the tax treatment of material modifications, and the tax treatment of corporate restructuring.
As of December 31, 2025 and 2024, the cost of investments for federal income tax purposes and gross unrealized appreciation and depreciation on investments and currency unrealized appreciation (depreciation) on non-investment
assets and liabilities were as follows:
As of December 31,
2025
2024
Cost of investments
$
2,453,300
$
1,839,769
Gross unrealized appreciation
112,647
35,757
Gross unrealized (depreciation)
(109,807)
(66,811)
Net unrealized appreciation (depreciation)
$
2,840
$
(31,054)
For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of December 31, 2025 and 2024, the Company had $252,003 and $199,701, of capital loss carryforwards, respectively, of which $66,883 and $52,879 were short-term capital loss carryforwards and $185,120 and $146,822 were long-term capital loss carryforwards.
176
16. MERGER WITH CSL III
On March 27, 2025, the Company completed its previously announced merger with CSL III. In accordance with the terms of the Merger Agreement, at the effective time of the CSL III Merger, each outstanding common share of beneficial interest, $0.001 par value per share, of CSL III was converted into the right to receive 1.2137 shares of the Company’s common stock and, if applicable, cash (without interest) in lieu of fractional shares of the Company’s common stock. As a result of the CSL III Merger, the Company issued an aggregate of 18,935,108 shares of its common stock to former CSL III shareholders.
The CSL III Merger was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC Topic 805. The fair value of the merger consideration paid and transaction costs incurred to complete the CSL III Merger were allocated to the assets acquired and liabilities assumed, based on their relative fair values as of the acquisition date, and did not give rise to goodwill. The excess of merger consideration paid over the fair value of net assets acquired is considered the purchase premium. Immediately following the acquisition of CSL III, the Company recorded the acquired assets at their respective fair values. As a result, the purchase premium allocated to the cost basis of the CSL III assets acquired was immediately recognized as unrealized depreciation on the Company’s Consolidated Statement of Operations. The purchase premium allocated to investments in loan securities will amortize over the life of the loans through interest income, with a corresponding reversal of the unrealized depreciation upon ultimate disposition of those loans. The purchase premium allocated to investments in equity securities and forward currency contracts will not amortize through interest income and, assuming no subsequent change to the fair value of such equity securities and disposition at fair value, the Company will recognize a realized loss or a reduction in realized gains with a corresponding reversal of the unrealized depreciation upon disposition of the CSL III equity securities and forward currency contracts acquired.
The CSL III Merger was considered a tax-free reorganization, and the Company has elected to carry forward the historical cost basis of the CSL III investments for tax purposes.
The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the CSL III Merger:
Common stock issued by the Company(1)
$
315,838
Cash paid in lieu of fractional shares
4
Transaction costs
1,650
Total purchase price
$
317,492
Assets acquired:
Investments, at fair value
$
483,736
Cash and cash equivalents(2)
37,751
Interest receivable
7,909
Other assets
9,907
Total assets acquired
$
539,303
Liabilities assumed:
Debt
$
206,000
Derivative liabilities, at fair value
812
Other liabilities(3)
16,918
Total liabilities assumed
$
223,730
Net assets acquired
$
315,573
Total purchase premium
$
1,919
(1)Based on a market price at closing of $16.68 per share and 18,935,108 shares of common stock issued by the Company in conjunction with the CSL III Merger to former CSL III shareholders.
(2)Includes all unrestricted and restricted cash and cash equivalents acquired at closing.
(3)Includes accrued expenses, incentive fees, and other liabilities assumed as part of the merger.
17. SUBSEQUENT EVENTS
Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below and elsewhere in these consolidated financial statements.
177
On February 18, 2026, the Board of Directors declared a quarterly common stock dividend of $0.40 per share, which is payable on April 16, 2026 to common stockholders of record on March 31, 2026.
178
Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Exchange Act.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). The Company’s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the Company’s assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that the Company’s internal control over financial reporting as of December 31, 2025 was effective.
Attestation Report of the Registered Public Accounting Firm
Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the effectiveness of the Company’s internal control over financial reporting, which is contained in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.”
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
During the three months ended December 31, 2025, no director or Section 16 officer of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
179
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.
Not applicable.
180
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2026 annual meeting of stockholders. The Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Exchange Act.
Information relating to our codes of ethics, which apply to, among others, our Chief Executive Officer and Chief Financial Officer, is included in Part I, Item 1 of this Form 10-K “Business-Regulation-Code of Ethics.”
Item 11. Executive Compensation
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2026 annual meeting of stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2026 annual meeting of stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2026 annual meeting of stockholders.
Item 14. Principal Accountant Fees and Services
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2026 annual meeting of stockholders.
181
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Documents filed as part of this annual report
The following reports and consolidated financial statements are set forth in Part II, Item 8 of this Form 10-K:
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document*
Cover Page Interactive Data File (embedded within the Inline XBRL document)*
* Filed herewith.
(c) Consolidated Financial Statement Schedules
Separate financial statements of subsidiaries not consolidated:
None.
Item 16. Form 10-K Summary
None.
185
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CARLYLE SECURED LENDING, INC.
Dated: February 24, 2026
By
/s/ Alex Chi
Alex Chi
Director and Chief Executive Officer (principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: February 24, 2026
By
/s/ Alex Chi
Alex Chi
Director and Chief Executive Officer (principal executive officer)
Dated: February 24, 2026
By
/s/ Thomas M. Hennigan
Thomas M. Hennigan
Director, President and Chief Financial Officer (principal financial officer)
