TCG BDC II 10Q 2022 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period to

Commission File No. 814-01248

Carlyle Credit Solutions, Inc.

(Exact name of Registrant as specified in its charter)


Maryland						81-5320146
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

One Vanderbilt Avenue, Suite 3400, New York, NY 10017						(212) 813-4900
(Address of principal executive office) (Zip Code)						(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
N/A	N/A	N/A

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

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at November 14, 2022 was 60,509,022.

CARLYLE CREDIT SOLUTIONS, INC.

INDEX



Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of September 30, 2022 (unaudited) and December 31, 2021	1
	Consolidated Statements of Operations for the three and nin e month periods ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited)	2
	Consolidated Statements of Changes in Net Assets for the nine month periods ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited)	3
	Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited)	4
	Consolidated Schedules of Investments as of September 30, 2022 (unaudited) and December 31, 2021	5
	Notes to Consolidated Financial Statements (unaudited)	27
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	64
Part II.	Other Information
Item 1.	Legal Proceedings	66
Item 1A.	Risk Factors	66
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	66
Item 6.	Exhibits	67
	Signatures	68

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollar amounts in thousands, except per share data)


	September 30, 2022		December 31, 2021
ASSETS	(unaudited)
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $2,139,002 and $2,070,975, respectively)	$	2,092,584	$	2,070,083
Cash, cash equivalents and restricted cash	64,963		65,838
Deferred financing costs	8,334		5,962
Receivable for investment sold/repaid	2,777		5,424

Interest receivable from non-controlled/non-affiliated investments	25,229		24,410
Prepaid expenses and other assets	2,618		1,427
Receivable for issuance of common stock	389		3,846
Total assets	$	2,196,894	$	2,176,990
LIABILITIES
Secured borrowings (Note 5)	$	930,423	$	966,947
Payable for investments purchased	14,050		93
Due to Investment Adviser	170		448
Interest and credit facility fees payable (Note 5)	9,320		5,576
Dividend payable (Note 7)	29,700		27,362
Management and incentive fees payable (Note 4)	7,485		7,763
Administrative service fees payable (Note 4)	902		239
Other accrued expenses and liabilities	2,566		2,321
Total liabilities	994,616		1,010,749
Commitments and contingencies (Notes 6 and 9)
NET ASSETS
Common stock, $0.01 par value; 200,000,000 shares authorized; 60,509,022 and 57,005,057 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	605		570
Paid-in capital in excess of par value	1,230,674		1,160,819


Total distributable earnings (loss)	(29,001)		4,852
Total net assets	$	1,202,278	$	1,166,241
NET ASSETS PER SHARE	$	19.87	$	20.46

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts in thousands, except per share data)

(unaudited)


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$	46,150	$	39,692	$	125,599	$	112,137
PIK income	2,618		1,746		7,667		5,030
Other income	2,767		632		6,350		4,505
Total investment income from non-controlled/non-affiliated investments	51,535		42,070		139,616		121,672
Total investment income	51,535		42,070		139,616		121,672
Expenses:


Management fees (Note 4)	3,020		3,240		8,847		9,502
Net investment income incentive fees (Note 4)	4,461		4,559		13,184		13,287

Professional fees	610		479		2,649		1,317
Administrative service fees (Note 4)	331		275		1,050		598
Interest expense (Note 5)	10,214		6,757		23,650		18,907
Credit facility fees (Note 5)	753		422		2,180		1,176
Directors’ fees and expenses	98		96		300		237
Other general and administrative	794		462		1,948		1,374
Total expenses	20,281		16,290		53,808		46,398
Net investment income (loss) before taxes	31,254		25,780		85,808		75,274
Excise tax expense	—		—		—		100
Net investment income (loss)	31,254		25,780		85,808		75,174
Net realized gain (loss) and change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments:
Non-controlled/non-affiliated investments	(4,341)		4,546		(55)		6,456
Currency gains (losses) on non-investment assets and liabilities	(191)		(44)		(416)		(85)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliated investments	(873)		(930)		(45,526)		22,441
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	7,718		3,186		17,511		4,493
Net realized and unrealized gain (loss) on investments and non-investment assets and liabilities	2,313		6,758		(28,486)		33,305
Net increase (decrease) in net assets resulting from operations	$	33,567	$	32,538	$	57,322	$	108,479
Basic and diluted earnings per common share (Note 7)	$	0.57	$	0.63	$	0.99	$	2.17
Weighted-average shares of common stock outstanding—Basic and Diluted (Note 7)	58,896,914		51,725,278		57,654,450		49,977,840

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollar amounts in thousands)

(unaudited)


	For the nine month periods ended
	September 30, 2022		September 30, 2021
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)	$	85,808	$	75,174
Net realized gain (loss) on investments and non-investment assets and liabilities	(471)		6,371
Net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	(28,015)		26,934
Net increase (decrease) in net assets resulting from operations	57,322		108,479
Capital transactions:
Common stock issued	109,868		100,000
Repurchase of common stock	(39,674)		—
Dividends declared (Note 10)	(91,479)		(74,674)
Net increase (decrease) in net assets resulting from capital share transactions	(21,285)		25,326
Net increase (decrease) in net assets	36,037		133,805
Net assets at beginning of period	1,166,241		963,136
Net assets at end of period	$	1,202,278	$	1,096,941

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands)

(unaudited)


	For the nine month periods ended
	September 30, 2022		September 30, 2021
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	57,322	$	108,479
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Amortization of deferred financing costs	1,289		936

Net accretion of discount on investments	(9,346)		(7,369)
Paid-in-kind interest	(9,996)		(5,136)
Net realized (gain) loss on investments and non-investment assets and liabilities	471		(6,371)
Net change in unrealized (appreciation) depreciation on investments	45,526		(22,441)
Net change in unrealized currency (gains) losses on non-investment assets and liabilities	(17,511)		(4,493)
Cost of investments purchased and change in payable for investments purchased	(449,566)		(542,910)
Proceeds from sales and repayments of investments and change in receivable for investments sold/repaid	416,972		297,693
Changes in operating assets:
Interest receivable	(819)		(8,440)
Prepaid expenses and other assets	(1,191)		(631)
Changes in operating liabilities:

Due to Investment Adviser	(278)		(71)
Interest and credit facility fees payable	3,744		825
Management and incentive fees payable	(278)		366
Administrative service fees payable	663		231

Other accrued expenses and liabilities	245		66
Net cash provided by (used in) operating activities	37,247		(189,266)
Cash flows from financing activities:
Proceeds from issuance of common stock, inclusive of change in receivable for issuance of common stock	113,325		100,947
Repurchase of common stock	(39,674)		—
Borrowings on the Credit Facilities	321,777		345,811
Repayments of the Credit Facilities	(340,748)		(196,533)
Dividends paid in cash	(89,141)		(72,031)
Debt issuance costs paid	(3,661)		(2,162)

Net cash provided by (used in) financing activities	(38,122)		176,032
Net increase (decrease) in cash, cash equivalents and restricted cash	(875)		(13,234)
Cash, cash equivalents and restricted cash, beginning of period	65,838		50,217
Cash, cash equivalents and restricted cash, end of period	$	64,963	$	36,983
Supplemental disclosures:

Interest paid during the period	$	20,855	$	18,796
Dividends declared during the period	$	91,479	$	74,674

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


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 (84.1% of fair value)
ADPD Holdings, LLC	^+#	(2)(3)(6)(13)	Consumer Services	SOFR	6.00%	8.69%	8/16/2022	8/15/2028	$	19,875	$	19,328	$	19,319	1.61	%
Advanced Web Technologies Holding Company	^+	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	6.00%	8.99%	12/17/2020	12/17/2026	17,142		16,846		16,933		1.41
Airnov, Inc.	^#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	5.00%	8.58%	12/20/2019	12/19/2025	25,313		25,074		25,211		2.10
Allied Universal Holdco LLC	^	(2)(3)	Business Services	LIBOR	4.25%	7.37%	2/17/2021	7/10/2026	494		496		433		0.04
Alpine Acquisition Corp II	^+	(2)(3)(6)(13)	Transportation: Cargo	SOFR	5.50%	8.42%	4/19/2022	11/30/2026	23,354		22,908		22,473		1.87
American Physician Partners, LLC	+#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	6.75%, 3.50% PIK	13.39%	1/7/2019	10/21/2022	40,746		40,746		40,613		3.38
Analogic Corporation	^+#	(2)(3)(6)	Capital Equipment	LIBOR	5.25%	8.07%	6/22/2018	6/22/2024	27,143		26,977		26,429		2.20
Applied Technical Services, LLC	^	(2)(3)(6)	Business Services	LIBOR	5.75%	9.50%	12/29/2020	12/29/2026	529		520		527		0.04
Appriss Health, LLC	^+#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	7.25%	9.93%	5/6/2021	5/6/2027	44,389		43,624		43,293		3.60
Apptio, Inc.	^+#	(2)(3)(6)	Software	LIBOR	6.00%	8.46%	1/10/2019	1/10/2025	36,487		36,152		36,487		3.03
Ascend Buyer, LLC	#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	5.75%	9.42%	9/30/2021	9/30/2028	12,700		12,458		12,469		1.04
Associations, Inc.	^#	(2)(3)(6)	Construction & Building	LIBOR	4.00%, 2.50% PIK	9.88%	7/2/2021	7/2/2027	12,770		12,665		12,446		1.04
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	+#	(2)(3)(7)	Software	LIBOR	6.00%	8.78%	12/24/2019	12/24/2026	36,563		35,954		34,383		2.86
Barnes & Noble, Inc.	+#	(2)(3)(10)	Retail	LIBOR	6.50%	11.36%	8/7/2019	12/20/2026	28,210		27,418		27,468		2.28
BlueCat Networks (USA) Inc.	^+	(2)(3)(6)	High Tech Industries	SOFR	5.75%	8.77%	8/8/2022	8/8/2028	12,659		12,357		12,351		1.03
BMS Holdings III Corp.	+#	(2)(3)	Construction & Building	LIBOR	5.50%	9.17%	9/30/2019	9/30/2026	29,132		28,675		28,722		2.39
Bubbles Bidco S.P.A. (Italy)	^	(2)(3)(6)(7)	Consumer Goods: Non-Durable	LIBOR	9.25% (100% PIK)	10.42%	10/20/2021	10/20/2028	€	4,700	5,315		4,451		0.37
Bubbles Bidco S.P.A. (Italy)	^	(2)(3)(6)(7)	Consumer Goods: Non-Durable	LIBOR	6.25%	7.42%	10/20/2021	10/20/2028	€	—	—		(91)		(0.01)
Chartis Holding, LLC	^+#	(2)(3)(6)	Business Services	LIBOR	5.25%	6.38%	5/1/2019	5/1/2025	38,864		38,458		38,645		3.21
Chemical Computing Group ULC (Canada)	^+	(2)(3)(6)(7)	Software	LIBOR	4.50%	7.64%	8/30/2018	8/30/2024	14,268		14,222		14,031		1.17
CircusTrix Holdings, LLC	^+	(2)(3)	Leisure Products & Services	LIBOR	5.50%	8.62%	2/2/2018	1/16/2024	10,579		10,551		10,454		0.87
CircusTrix Holdings, LLC	^	(2)(3)	Leisure Products & Services	LIBOR	5.50%	8.62%	1/8/2021	7/16/2023	558		501		558		0.05

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


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
Comar Holding Company, LLC	+#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	5.75%	9.39%	6/18/2018	6/18/2024	$	41,039	$	40,733	$	39,139	3.26	%
Cority Software Inc. (Canada)	^+#	(2)(3)(6)(7)	Software	SOFR	5.50%	7.78%	7/2/2019	7/2/2026	55,782		55,073		55,264		4.60
Cority Software Inc. (Canada)	#	(2)(3)(7)	Software	SOFR	7.50%	9.78%	9/3/2020	7/2/2026	1,864		1,825		1,855		0.15
DCA Investment Holding LLC	+	(2)(3)(6)	Healthcare & Pharmaceuticals	SOFR	6.00%	9.97%	3/11/2021	4/3/2028	11,842		11,698		11,401		0.95
Denali Midco 2, LLC	#	(2)(3)(6)(13)	Consumer Services	SOFR	6.50%	9.45%	9/15/2022	12/22/2027	7,143		6,845		6,843		0.57
Dermatology Associates	^	(2)(3)(13)	Healthcare & Pharmaceuticals	SOFR	6.25% (100% PIK)	9.95%	2/15/2018	12/31/2022	8,902		8,955		8,873		0.74
Dermatology Associates	^	(2)(3)(9)(10)	Healthcare & Pharmaceuticals	SOFR	9.50% (100% PIK)	12.77%	2/15/2018	12/31/2022	10,096		5,871		6,223		0.52
Diligent Corporation	^	(2)(3)(6)	Telecommunications	LIBOR	6.25%	9.11%	8/4/2020	8/4/2025	670		657		648		0.05
Dwyer Instruments, Inc.	#	(2)(3)(6)	Capital Equipment	LIBOR	6.00%	9.38%	7/21/2021	7/21/2027	13,799		13,557		13,585		1.13
Eliassen Group, LLC	^+	(2)(3)(6)	Business Services	SOFR	5.75%	9.30%	4/14/2022	4/14/2028	21,008		20,667		20,701		1.72
Ellkay, LLC	#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	6.25%	9.52%	9/14/2021	9/14/2027	14,142		13,871		13,157		1.09
EPS Nass Parent, Inc.	#	(2)(3)(6)	Utilities: Electric	LIBOR	5.75%	9.42%	4/19/2021	4/19/2028	914		897		888		0.07
Excel Fitness Holdings, Inc.	^+	(2)(3)(6)(13)	Leisure Products & Services	SOFR	5.25%	8.08%	4/29/2022	4/29/2029	6,297		6,162		6,044		0.50
Excel Fitness Holdings, Inc.	#	(2)(3)(13)	Leisure Products & Services	SOFR	5.75%	9.13%	8/11/2022	4/29/2029	2,875		2,790		2,807		0.23
Excelitas Technologies Corp.	^+#	(2)(3)(6)(13)	Capital Equipment	SOFR	5.75%	8.58%	8/12/2022	8/12/2029	6,234		6,097		6,095		0.51
Excelitas Technologies Corp.	+	(2)(3)	Capital Equipment	EURIBOR	5.75%	6.08%	8/12/2022	8/12/2029	€	2,551	2,566		2,450		0.20
FPG Intermediate Holdco, LLC	^	(2)(3)(6)(13)	Consumer Services	SOFR	6.50%	9.20%	8/5/2022	3/5/2027	856		686		680		0.06
Greenhouse Software, Inc.	^+#	(2)(3)(6)	Software	SOFR	7.00%	9.95%	3/1/2021	9/1/2028	32,796		32,040		31,816		2.65
Guidehouse LLP	^	(2)(3)	Sovereign & Public Finance	LIBOR	6.25%	9.37%	9/30/2022	10/16/2028	80		78		78		0.01
Hadrian Acquisition Limited (United Kingdom)	+	(2)(3)(7)	Diversified Financial Services	SONIA	5.26%, 3.47% PIK	10.92%	2/28/2022	2/28/2029	£	7,275	9,466		7,900		0.66
Hadrian Acquisition Limited (United Kingdom)	+	(2)(3)(6)(7)	Diversified Financial Services	SONIA	5.00%, 2.75% PIK	9.94%	2/28/2022	2/28/2029	£	1,658	1,887		1,765		0.15
Harbour Benefit Holdings, Inc.	+#	(2)(3)(6)	Business Services	LIBOR	5.25%	8.79%	12/13/2017	12/13/2024	10,935		10,892		10,893		0.91
Heartland Home Services, Inc	^	(2)(3)(6)	Consumer Services	LIBOR	5.75%	8.80%	2/10/2022	12/15/2026	3,267		3,222		3,185		0.26

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


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
Heartland Home Services, Inc	+#	(2)(3)(6)	Consumer Services	LIBOR	6.00%	9.12%	12/15/2020	12/15/2026	$	31,694	$	31,204	$	31,426	2.61	%
Hercules Borrower LLC	^+	(2)(3)(6)	Environmental Industries	LIBOR	6.50%	10.62%	12/14/2020	12/14/2026	18,544		18,163		18,064		1.50
Hoosier Intermediate, LLC	#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	5.50%	8.56%	11/15/2021	11/15/2028	17,197		16,860		16,244		1.35
HS Spa Holdings Inc.	^+	(2)(3)(6)	Consumer Services	SOFR	5.75%	7.51%	6/2/2022	6/2/2029	8,627		8,437		8,348		0.69
iCIMS, Inc.	^+#	(2)(3)(6)	Software	SOFR	6.75%	9.48%	8/18/2022	8/18/2028	25,719		25,234		25,107		2.09
Individual FoodService Holdings, LLC	#	(2)(3)(6)	Wholesale	LIBOR	6.25%	9.48%	2/21/2020	11/22/2025	19,487		19,220		19,249		1.60
Infront Luxembourg Finance S.À R.L. (Luxembourg)	+#	(2)(3)(7)	Leisure Products & Services	LIBOR	9.00%	9.54%	5/28/2021	5/28/2027	€	33,000	39,197		31,695		2.64
Integrity Marketing Acquisition, LLC	+#	(2)(3)	Diversified Financial Services	LIBOR	5.75%	8.85%	1/15/2020	8/27/2025	24,414		24,202		23,275		1.94
Integrity Marketing Acquisition, LLC	#	(2)(3)	Diversified Financial Services	LIBOR	5.50%	8.00%	8/7/2020	8/27/2025	7,853		7,798		7,465		0.62
IQN Holding Corp.	^+	(2)(3)(6)	Business Services	SOFR	5.50%	8.41%	5/2/2022	5/2/2029	6,783		6,707		6,734		0.56
Jeg's Automotive, LLC	#	(2)(3)(6)	Automotive	LIBOR	5.75%	9.34%	12/22/2021	12/22/2027	16,016		15,661		15,377		1.28
K2 Insurance Services, LLC	^+#	(2)(3)(6)	Diversified Financial Services	LIBOR	5.00%	8.63%	7/3/2019	7/1/2026	25,115		24,816		25,013		2.08
Kaseya, Inc.	+	(2)(3)(6)	High Tech Industries	SOFR	5.75%	8.28%	6/23/2022	6/23/2029	35,453		34,703		34,594		2.88
Lifelong Learner Holdings, LLC	^+#	(2)(3)(6)	Business Services	LIBOR	5.75%	8.56%	10/18/2019	10/18/2026	52,052		51,400		49,126		4.09
LinQuest Corporation	#	(2)(3)	Aerospace & Defense	LIBOR	5.75%	9.10%	7/28/2021	7/28/2028	9,900		9,729		9,219		0.77
Liqui-Box Holdings, Inc.	#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	4.50%	8.76%	6/3/2019	6/3/2024	2,086		2,074		1,919		0.16
LVF Holdings, Inc.	^+#	(2)(3)(6)	Beverage & Food	LIBOR	6.25%	9.91%	6/10/2021	6/10/2027	41,629		40,862		38,542		3.21
Material Holdings, LLC	#	(2)(3)(6)(13)	Business Services	SOFR	6.00%	9.64%	8/19/2021	8/19/2027	16,021		15,728		15,227		1.27
Maverick Acquisition, Inc.	^+#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.25%	9.92%	6/1/2021	6/1/2027	43,632		42,826		38,300		3.19
Medical Manufacturing Technologies, LLC	#	(2)(3)(6)(13)	Healthcare & Pharmaceuticals	SOFR	5.75%	9.40%	12/23/2021	12/23/2027	11,345		11,068		11,038		0.92
MMIT Holdings, LLC	#	(2)(3)(6)	High Tech Industries	LIBOR	6.25%	9.92%	9/15/2021	9/15/2027	11,053		10,851		11,005		0.91
NEFCO Holding Company LLC	+#	(2)(3)(6)(13)	Construction & Building	SOFR	6.50%	9.22%	8/5/2022	8/5/2028	11,051		10,768		10,762		0.89
NES Global Talent Finance US, LLC (United Kingdom)	+#	(2)(3)(7)	Energy: Oil & Gas	LIBOR	5.50%	8.31%	5/9/2018	5/11/2023	9,612		9,587		9,592		0.80
North Haven Fairway Buyer, LLC	^+	(2)(3)(6)	Consumer Services	LIBOR	5.75%	8.65%	5/17/2022	5/17/2028	21,320		20,863		20,824		1.73
Oak Purchaser, Inc.	^+	(2)(3)(6)	Business Services	SOFR	5.50%	9.48%	4/28/2022	4/28/2028	5,851		5,776		5,810		0.48
Performance Health Holdings, Inc.	#	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	6.00%	9.75%	7/12/2021	7/12/2027	6,444		6,337		6,377		0.53

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


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
PF Atlantic Holdco 2, LLC	^#	(2)(3)(6)	Leisure Products & Services	LIBOR	5.50%	8.77%	11/12/2021	11/12/2027	$	27,515	$	26,822	$	26,826	2.23	%
PF Growth Partners, LLC	+	(2)(3)	Leisure Products & Services	LIBOR	5.00%	7.71%	7/1/2019	7/11/2025	7,977		7,916		7,900		0.66
Project Castle, Inc.	#	(2)(3)	Capital Equipment	SOFR	5.50%	9.05%	6/24/2022	6/1/2029	7,500		6,730		6,319		0.53
Prophix Software Inc. (Canada)	^+	(2)(3)(6)(7)	Software	LIBOR	6.50%	9.31%	2/1/2021	2/1/2026	14,618		14,347		14,685		1.22
PXO Holdings I Corp.	^+	(2)(3)(6)(13)	Chemicals, Plastics & Rubber	SOFR	5.25%	8.21%	3/8/2022	3/8/2028	8,556		8,378		8,247		0.69
Quantic Electronics, LLC	#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.25%	9.91%	11/19/2020	11/19/2026	15,067		14,815		14,481		1.20
Quantic Electronics, LLC	#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.25%	9.89%	3/1/2021	3/1/2027	9,854		9,664		9,413		0.78
Regency Entertainment, Inc.	+	(2)(3)	Media: Diversified & Production	LIBOR	6.75%	9.75%	5/22/2020	10/22/2025	40,000		39,494		39,493		3.27
Riveron Acquisition Holdings, Inc.	+#	(2)(3)	Diversified Financial Services	LIBOR	5.75%	9.42%	5/22/2019	5/22/2025	19,424		19,236		19,424		1.62
RSC Acquisition, Inc.	+#	(2)(3)(6)(13)	Diversified Financial Services	SOFR	5.50%	8.38%	11/1/2019	11/1/2026	33,640		33,199		32,167		2.67
Sapphire Convention, Inc.	^+#	(2)(3)(6)	Telecommunications	LIBOR	6.25%	9.77%	11/20/2018	11/20/2025	28,462		28,158		26,729		2.22
Smarsh Inc.	^+	(2)(3)(6)	Software	SOFR	6.50%	10.05%	2/18/2022	2/18/2029	3,265		3,186		3,054		0.25
SPay, Inc.	^+	(2)(3)	Leisure Products & Services	LIBOR	5.75%, 3.50% PIK	12.34%	6/15/2018	6/17/2024	24,252		24,118		21,683		1.80
Speedstar Holding, LLC	+#	(2)(3)	Automotive	LIBOR	7.00%	10.07%	1/22/2021	1/22/2027	26,763		26,353		26,697		2.22
Spotless Brands, LLC	^+#	(2)(3)(6)(13)	Consumer Services	SOFR	6.50%	9.09%	6/21/2022	7/25/2028	31,467		30,792		30,465		2.53
Tank Holding Corp.	^+	(2)(3)(6)(13)	Capital Equipment	SOFR	5.75%	8.88%	3/31/2022	3/31/2028	18,918		18,550		18,288		1.52
TCFI Aevex LLC	+#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.00%	8.69%	3/18/2020	3/18/2026	28,631		28,253		23,717		1.97
The Carlstar Group LLC	#	(2)(3)(6)(13)	Automotive	SOFR	6.50%	9.15%	7/8/2022	7/8/2027	14,629		14,252		14,266		1.19
TIBCO Software Inc.	+	(2)(3)	High Tech Industries	SOFR	4.50%	8.09%	9/30/2022	3/31/2029	15,000		13,650		13,441		1.12
Trafigura Trading LLC	^	(2)(3)(6)(12)(13)	Metals & Mining	SOFR	8.35%	12.11%	7/26/2021	10/5/2022	6,871		6,765		6,796		0.56
Tufin Software North America, Inc.	^+#	(2)(3)(6)(13)	Software	SOFR	7.00%	10.06%	8/17/2022	8/17/2028	26,851		26,296		26,281		2.19
Turbo Buyer, Inc.	+#	(2)(3)(6)	Automotive	LIBOR	6.00%	8.88%	12/2/2019	12/2/2025	42,105		41,466		41,229		3.43
U.S. Legal Support, Inc.	^+	(2)(3)(6)(13)	Business Services	SOFR	5.75%	9.29%	11/30/2018	11/30/2024	21,561		21,380		21,183		1.76
Unifrutti Financing PLC (Cyprus)	+	(7)	Beverage & Food	FIXED	7.50%, 1.00% PIK	8.50%	9/15/2019	9/15/2026	€	18,722	19,988		18,119		1.51
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage & Food	FIXED	11.00% (100% PIK)	11.00%	10/22/2020	9/15/2026	€	3,293	3,723		3,348		0.28
US INFRA SVCS Buyer, LLC	+#	(2)(3)	Environmental Industries	LIBOR	6.50%, 0.25% PIK	8.78%	4/13/2020	4/13/2026	56,660		55,938		53,820		4.48

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


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
USALCO, LLC	#	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	6.00%	9.67%	10/19/2021	10/19/2027	$	993	$	975	$	954	0.08	%
USR Parent Inc.	+	(2)(3)	Retail	SOFR	7.60%	10.11%	4/22/2022	4/25/2027	4,333		4,293		4,148		0.34
Westfall Technik, Inc.	^+#	(2)(3)(13)	Chemicals, Plastics & Rubber	SOFR	6.25%	9.80%	9/13/2018	9/13/2024	27,982		27,800		27,419		2.28
Westfall Technik, Inc.	#	(2)(3)(13)	Chemicals, Plastics & Rubber	SOFR	6.25%	9.80%	7/1/2021	9/13/2024	4,970		4,888		4,870		0.41
Wineshipping.com LLC	#	(2)(3)(6)	Beverage & Food	LIBOR	5.75%	7.63%	10/29/2021	10/29/2027	14,574		14,265		13,698		1.14
Yellowstone Buyer Acquisition, LLC	^	(2)(3)	Consumer Goods: Durable	LIBOR	5.75%	8.80%	9/13/2021	9/13/2027	446		438		427		0.03
YLG Holdings, Inc.	+	(2)(3)	Consumer Services	LIBOR	5.00%	7.78%	9/30/2020	11/1/2025	9,827		9,603		9,807		0.82









First Lien Debt Total											$	1,803,582	$	1,759,621	146.36	%
Second Lien Debt (12.5% of fair value)
11852604 Canada Inc. (Canada)	^	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	9.50% (100% PIK)	13.17%	9/30/2021	9/30/2028	$	7,343	$	7,201	$	7,141	0.59	%
AI Convoy S.A.R.L (United Kingdom)	+#	(2)(3)	Aerospace & Defense	LIBOR	8.25%	9.80%	1/17/2020	1/17/2028	30,327		29,824		31,540		2.62
Aimbridge Acquisition Co., Inc.	+	(2)(3)	Leisure Products & Services	LIBOR	7.50%	10.06%	2/1/2019	2/1/2027	21,047		20,697		18,460		1.54
AP Plastics Acquisition Holdings, LLC	+#	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	7.50%	10.49%	8/10/2021	8/10/2029	38,180		37,239		37,380		3.11
AQA Acquisition Holdings, Inc.	+	(2)(3)	High Tech Industries	LIBOR	7.50%	10.57%	5/14/2021	3/3/2029	5,538		5,418		5,365		0.45
Blackbird Purchaser, Inc.	^+	(2)(3)(7)	Capital Equipment	LIBOR	7.50%	10.62%	12/14/2021	4/8/2027	9,194		8,981		8,738		0.73
Brave Parent Holdings, Inc.	+	(2)(3)	Software	LIBOR	7.50%	10.62%	10/3/2018	4/19/2026	18,197		17,964		17,704		1.47
Drilling Info Holdings, Inc.	^	(11)	Energy: Oil & Gas	LIBOR	8.25%	11.37%	2/11/2020	7/30/2026	18,600		18,266		18,693		1.54
Jazz Acquisition, Inc.	+	(8)	Aerospace & Defense	LIBOR	8.00%	11.12%	6/13/2019	6/18/2027	23,450		23,217		21,544		1.79
Outcomes Group Holdings, Inc.	#	(8)	Business Services	LIBOR	7.50%	11.17%	10/23/2018	10/26/2026	1,731		1,728		1,731		0.14
PAI Holdco, Inc.	+	(7)(8)	Automotive	LIBOR	5.50%, 2.00% PIK	10.31%	10/28/2020	10/28/2028	14,016		13,688		13,889		1.16
Peraton Corp.	+	(8)	Aerospace & Defense	LIBOR	7.75%	10.57%	2/24/2021	2/1/2029	11,941		11,785		11,394		0.95
Quartz Holding Company	+	(8)	Software	LIBOR	8.00%	11.12%	4/2/2019	4/2/2027	11,900		11,748		11,824		0.98
Stonegate Pub Company Bidco Limited (United Kingdom)	^	(8)	Beverage & Food	SONIA	8.50%	9.44%	3/12/2020	3/12/2028	£	20,000	24,830		20,377		1.69
TruGreen Limited Partnership	+	(8)	Consumer Services	LIBOR	8.50%	11.62%	11/16/2020	11/2/2028	13,000		12,788		12,117		1.01

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


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
World 50, Inc.	#	(7)(8)	Business Services	FIXED	11.50%	11.50%	1/10/2020	1/9/2027	24,017	23,643		22,943		1.91



Second Lien Debt Total										$	269,017	$	260,840	21.68	%


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		Percentage of Net Assets
Equity Investments (3.4% of fair value)
ANLG Holdings, LLC	^	(8)	Capital Equipment	6/22/2018	592	$	592	$	649	0.05	%
Appriss Health, LLC	^	(8)	Healthcare & Pharmaceuticals	5/6/2021	—	486		484		0.04
Atlas Ontario LP (Canada)	^	(8)	Business Services	4/7/2021	5,114	5,114		5,114		0.43
Avenu Holdings, LLC	^	(7)(8)	Sovereign & Public Finance	9/28/2018	172	104		548		0.05
Blackbird Holdco, Inc.	^	(8)	Capital Equipment	12/14/2021	7	6,957		6,984		0.58
Buckeye Parent, LLC	^	(8)	Automotive	12/22/2021	442	442		406		0.03
Chartis Holding, LLC	^	(8)	Business Services	5/1/2019	433	433		639		0.05
Cority Software Inc. (Canada)	^	(8)	Software	7/2/2019	250	250		606		0.05
ECP Parent, LLC	^	(8)	Healthcare & Pharmaceuticals	3/29/2018	268	—		290		0.02
GB Vino Parent, L.P.	^	(7)(8)	Beverage & Food	10/29/2021	4	351		261		0.02
Integrity Marketing Group, LLC	^	(7)(8)	Diversified Financial Services	12/21/2021	16,244	15,993		16,086		1.34
K2 Insurance Services, LLC	^	(8)	Diversified Financial Services	7/3/2019	433	306		903		0.08
NearU Holdings LLC	^	(8)	Consumer Services	8/16/2022	25	2,470		2,470		0.21
NEFCO Holding Company LLC	^	(8)	Construction & Building	8/5/2022	1	615		615		0.05
North Haven Goldfinch Topco, LLC	^	(8)	Containers, Packaging & Glass	6/18/2018	2,315	2,315		1,523		0.13
Pascal Ultimate Holdings, L.P	^	(8)	Capital Equipment	7/21/2021	36	364		638		0.05
Picard Parent, Inc.	^	(8)	High Tech Industries	9/30/2022	8	8,189		8,189		0.68
Profile Holdings I, LP	^	(8)	Chemicals, Plastics & Rubber	3/8/2022	3	262		262		0.02
Sinch AB (Sweden)	^	(7)(8)	High Tech Industries	3/26/2019	104	1,168		142		0.01
Talon MidCo 1 Limited	^	(8)	Software	8/17/2022	145,631	1,456		1,456		0.12
Tank Holding Corp.	^	(8)	Capital Equipment	3/26/2019	850	—		2,595		0.22
Titan DI Preferred Holdings, Inc.	^	(8)	Energy: Oil & Gas	2/11/2020	14,183	13,949		13,829		1.15
Turbo Buyer, Inc.	^	(8)	Automotive	12/2/2019	1,925	933		2,416		0.20
U.S. Legal Support Investment Holdings, LLC	^	(8)	Business Services	11/30/2018	641	641		841		0.07
Unifrutti Financing PLC (Cyprus)	^	(7)(8)	Beverage & Food	10/22/2020	2	2,078		2,444		0.20
Unifrutti Financing PLC (Cyprus)	^	(7)(8)	Beverage & Food	10/22/2020	1	532		700		0.06
W50 Parent LLC	^	(8)	Business Services	1/10/2020	500	190		733		0.06

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		Percentage of Net Assets
Zenith American Holding, Inc.	^	(8)	Business Services	12/13/2017	439	213		300		0.03

Equity Investments Total						$	66,403	$	72,123	6.00	%
Total investments—non-controlled/non-affiliated						$	2,139,002	$	2,092,584	174.04	%
Total investments						$	2,139,002	$	2,092,584	174.04	%

^ Denotes that all or a portion of the assets are owned by Carlyle Credit Solutions, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CARS” or the “Company”). Accordingly, such assets are not available to creditors of Carlyle Credit Solutions SPV LLC (the “SPV”) or Carlyle Credit Solutions SPV2 LLC ("SPV2").

+ Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the SPV. The SPV has entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 5, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of the Company or SPV2.

# Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, SPV2. SPV2 has entered into a senior secured revolving credit facility (as amended, the “SPV2 Credit Facility”). The lenders of the SPV2 Credit Facility have a first lien security interest in substantially all of the assets of SPV2 (see Note 5, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of the Company or the SPV.

(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 September 30, 2022, 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 September 30, 2022, 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 LIBOR (“L”), 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 September 30, 2022. As of September 30, 2022, the reference rates for our variable rate loans were the 30-day LIBOR at 3.14%, the 90-day LIBOR at 3.75%, the 180-day LIBOR rate at 4.23%, the 30-day SOFR at 3.04%, and the 90-day SOFR at 3.59%.

(3)Loan includes interest rate floor feature, generally 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 Carlyle Global Credit Investment Management L.L.C., the Company’s 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 and equity investments was determined using significant unobservable inputs.

(6)As of September 30, 2022, 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
ADPD Holdings, LLC	Delayed Draw	—	%	$	598	$	(12)
ADPD Holdings, LLC	Delayed Draw	—		2,166		(43)
ADPD Holdings, LLC	Delayed Draw	—		3,902		(78)
ADPD Holdings, LLC	Revolver	0.50		1,243		(25)
Advanced Web Technologies Holding Company	Revolver	0.50		1,708		(18)
Advanced Web Technologies Holding Company	Delayed Draw	1.00		1,000		(11)
Airnov, Inc.	Revolver	0.50		2,292		(8)
Alpine Acquisition Corp II	Revolver	0.50		1,034		(37)
American Physician Partners, LLC	Revolver	0.50		550		(2)

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount		Fair Value
Analogic Corporation	Revolver	0.50	%	$	441	$	(11)
Applied Technical Services, LLC	Revolver	0.50		42		—
Appriss Health, LLC	Revolver	0.50		2,963		(69)
Apptio, Inc.	Revolver	0.50		1,420		—
Ascend Buyer, LLC	Revolver	0.50		1,113		(19)
Associations, Inc.	Revolver	0.50		723		(17)
Blackbird Purchaser, Inc.	Delayed Draw	1.00		3,065		(114)
BlueCat Networks (USA) Inc.	Delayed Draw	0.50		1,786		(36)
BlueCat Networks (USA) Inc.	Delayed Draw	0.50		958		(19)
Bubbles Bidco S.P.A. (Italy)	Delayed Draw	2.80		873		(4)
Bubbles Bidco S.P.A. (Italy)	Revolver	—		537		(3)
Chartis Holding, LLC	Revolver	0.50		2,401		(13)
Chemical Computing Group ULC (Canada)	Revolver	0.50		903		(14)
Comar Holding Company, LLC	Revolver	0.50		2,935		(127)
Cority Software Inc. (Canada)	Revolver	0.50		3,000		(26)
DCA Investment Holding LLC	Delayed Draw	1.00		404		(15)
Denali MidCo 2, LLC	Delayed Draw	1.00		2,857		(86)
Diligent Corporation	Revolver	0.50		23		(1)
Dwyer Instruments, Inc.	Revolver	0.50		994		(14)
Dwyer Instruments, Inc.	Delayed Draw	1.00		161		(2)
Eliassen Group, LLC	Delayed Draw	1.00		3,310		(42)
Ellkay, LLC	Revolver	0.50		1,786		(111)
EPS Nass Parent, Inc.	Revolver	0.50		40		(1)
EPS Nass Parent, Inc.	Delayed Draw	1.00		37		(1)
Excel Fitness Holdings, Inc.	Revolver	0.50		828		(29)
Excelitas Technologies Corp.	Revolver	0.50		434		(9)
Excelitas Technologies Corp.	Delayed Draw	—		303		(6)
FPG Intermediate Holdco, LLC	Delayed Draw	1.00		7,946		(159)
Greenhouse Software, Inc.	Revolver	0.50		1,471		(41)
Greenhouse Software, Inc.	Revolver	0.50		733		(21)
Hadrian Acquisition Limited (United Kingdom)	Delayed Draw	2.33		£	1,163	(29)
Harbour Benefit Holdings, Inc.	Revolver	0.50		1,219		(4)
Heartland Home Services, Inc	Delayed Draw	0.75		1,864		(30)
Heartland Home Services, Inc	Revolver	0.50		2,780		(22)
Hercules Borrower LLC	Revolver	0.50		1,929		(45)
Hoosier Intermediate, LLC	Revolver	0.50		1,600		(81)

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount		Fair Value
HS Spa Holdings Inc.	Revolver	0.50	%	$	1,235	$	(35)
iCIMS, Inc.	Delayed Draw	—		6,831		(120)
iCIMS, Inc.	Revolver	0.50		2,449		(43)
Individual FoodService Holdings, LLC	Revolver	0.50		2,539		(27)
IQN Holding Corp.	Revolver	0.50		489		(3)
IQN Holding Corp.	Delayed Draw	1.00		753		(5)
Jeg's Automotive, LLC	Revolver	0.50		542		(17)
Jeg's Automotive, LLC	Delayed Draw	1.00		3,333		(107)
K2 Insurance Services, LLC	Revolver	0.50		2,290		(8)
Kaseya, Inc.	Delayed Draw	0.50		1,146		(25)
Kaseya, Inc.	Revolver	0.50		2,054		(46)
Lifelong Learner Holdings, LLC	Revolver	0.50		4		—
Liqui-Box Holdings, Inc.	Revolver	0.50		544		(35)
LVF Holdings, Inc.	Revolver	0.50		759		(50)
LVF Holdings, Inc.	Delayed Draw	1.00		4,670		(306)
Material Holdings, LLC	Delayed Draw	—		977		(44)
Material Holdings, LLC	Revolver	1.00		499		(23)
Maverick Acquisition, Inc.	Delayed Draw	1.00		4,679		(503)
Maverick Acquisition, Inc.	Delayed Draw	1.00		1,290		(139)
Medical Manufacturing Technologies, LLC	Revolver	0.50		723		(14)
Medical Manufacturing Technologies, LLC	Delayed Draw	1.00		3,554		(70)
MMIT Holdings, LLC	Revolver	0.50		808		(3)
NEFCO Holding Company LLC	Revolver	0.50		1,527		(31)
NEFCO Holding Company LLC	Delayed Draw	1.00		760		(15)
NEFCO Holding Company LLC	Delayed Draw	1.00		1,106		(22)
North Haven Fairway Buyer, LLC	Delayed Draw	0.50		432		(9)
North Haven Fairway Buyer, LLC	Revolver	0.50		2,404		(49)
Oak Purchaser, Inc.	Revolver	0.50		584		(3)
Oak Purchaser, Inc.	Delayed Draw	0.50		1,623		(8)
PF Atlantic Holdco 2, LLC	Delayed Draw	0.75		9,517		(165)
PF Atlantic Holdco 2, LLC	Revolver	0.50		2,759		(48)
Prophix Software Inc. (Canada)	Revolver	0.50		2,658		10
PXO Holdings I Corp.	Delayed Draw	1.00		443		(14)
PXO Holdings I Corp.	Revolver	0.50		657		(21)
Quantic Electronics, LLC	Revolver	0.50		829		(31)
Quantic Electronics, LLC	Delayed Draw	1.00		2,126		(78)

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount		Fair Value
RSC Acquisition, Inc.	Revolver	0.50	%	$	1,096	$	(46)
Sapphire Convention, Inc.	Revolver	0.50		3,849		(206)
Smarsh Inc.	Delayed Draw	1.00		816		(40)
Smarsh Inc.	Revolver	0.50		204		(10)
Spotless Brands, LLC	Revolver	0.50		303		(9)
Spotless Brands, LLC	Delayed Draw	1.00		2,214		(64)
Spotless Brands, LLC	Delayed Draw	1.00		944		(27)
Tank Holding Corp.	Revolver	0.38		828		(26)
TCFI Aevex LLC	Delayed Draw	1.00		417		(69)
TCFI Aevex LLC	Delayed Draw	1.00		521		(87)
The Carlstar Group LLC	Revolver	0.50		3,657		(72)
Trafigura Trading LLC	Revolver	0.50		3,127		(23)
Tufin Software North America, Inc.	Delayed Draw	—		304		(6)
Tufin Software North America, Inc.	Revolver	0.50		1,339		(27)
Turbo Buyer, Inc.	Revolver	0.50		2,151		(43)
U.S. Legal Support, Inc.	Revolver	0.50		922		(16)
Wineshipping.com LLC	Delayed Draw	1.00		1,609		(79)
Wineshipping.com LLC	Revolver	0.50		1,589		(78)



Total unfunded commitments				$	165,124	$	(4,490)

(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)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, unless otherwise noted. As of September 30, 2022, the aggregate fair value of these securities is $72,123, or 6% of the Company's net assets.

(9)Loan was on non-accrual status as of September 30, 2022.

(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. 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)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.

(12)The investment is secured by receivables purchased from the portfolio company, with an implied discount of 12.11%. The investment was made via a tranched participation arrangement between the purchaser of such receivables and the Company. The investment has a secondary priority behind the rights of such purchaser.

(13)Loans include a credit spread adjustment that ranges from 0.10% to 0.26%.

As of September 30, 2022, investments at fair value consisted of the following:


Type	Amortized Cost		Fair Value		% of Fair Value


First Lien Debt	$	1,803,582	$	1,759,621	84.1	%
Second Lien Debt	269,017		260,840		12.5
Equity Investments	66,403		72,123		3.4
Total	$	2,139,002	$	2,092,584	100.0	%

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)

The rate type of debt investments at fair value as of September 30, 2022 was as follows:


Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	2,025,245	$	1,976,051	97.8	%
Fixed Rate	47,354		44,410		2.2	%
Total	$	2,072,599	$	2,020,461	100.0	%

The industry composition of investments at fair value as of September 30, 2022 was as follows:


Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	170,113	$	159,608	7.6	%
Automotive	112,795		114,280		5.5
Beverage & Food	106,629		97,489		4.7
Business Services	203,986		201,580		9.6
Capital Equipment	91,371		92,770		4.4
Chemicals, Plastics & Rubber	79,542		79,132		3.8
Construction & Building	52,723		52,545		2.5
Consumer Goods: Durable	438		427		—
Consumer Goods: Non-Durable	5,315		4,360		0.2
Consumer Services	146,238		145,484		7.0
Containers, Packaging & Glass	99,500		97,194		4.7
Diversified Financial Services	136,903		133,998		6.4
Energy: Oil & Gas	41,802		42,114		2.0
Environmental Industries	74,101		71,884		3.4
Healthcare & Pharmaceuticals	166,717		165,134		7.9
High Tech Industries	86,336		85,087		4.1
Leisure Products & Services	138,754		126,427		6.1

Media: Diversified & Production	39,494		39,493		1.9
Metals & Mining	6,765		6,796		0.3
Retail	31,711		31,616		1.5
Software	275,747		274,553		13.1
Sovereign & Public Finance	182		626		—
Telecommunications	28,815		27,377		1.3
Transportation: Cargo	22,908		22,473		1.1
Utilities: Electric	897		888		—
Wholesale	19,220		19,249		0.9
Total	$	2,139,002	$	2,092,584	100.0	%

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of September 30, 2022

(dollar amounts in thousands)

(unaudited)

The geographical composition of investments at fair value as of September 30, 2022 was as follows:


Geography	Amortized Cost		Fair Value		% of Fair Value
Canada	$	98,032	$	98,696	4.7	%
Cyprus	26,321		24,611		1.2
Italy	5,315		4,360		0.2

Luxembourg	75,151		66,078		3.2
Sweden	1,168		142		—
United Kingdom	75,594		71,174		3.4
United States	1,857,421		1,827,523		87.3
Total	$	2,139,002	$	2,092,584	100.0	%

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2021

(dollar 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 (80.9% of fair value)
Advanced Web Technologies Holding Company	^+	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	5.75%	6.75%	12/17/2020	12/17/2026	$	14,357	$	14,014	$	14,555	1.25	%
Airnov, Inc.	^#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	5.00%	6.00%	12/20/2019	12/19/2025	24,869		24,578		24,869		2.13
Allied Universal Holdco LLC	^	(2)(3)	Business Services	LIBOR	4.25%	4.46%	2/17/2021	7/10/2026	497		500		498		0.04
American Physician Partners, LLC	+#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	6.75%, 1.50% PIK	9.25%	1/7/2019	2/21/2022	38,097		38,093		38,097		3.27
Analogic Corporation	^+#	(2)(3)(6)	Capital Equipment	LIBOR	5.25%	6.25%	6/22/2018	6/22/2024	26,675		26,441		26,395		2.26
Applied Technical Services, LLC	^	(2)(3)(6)	Business Services	LIBOR	5.75%	6.75%	12/29/2020	12/29/2026	536		525		534		0.05
Appriss Health, LLC	^+#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	7.25%	8.25%	5/6/2021	5/6/2027	44,444		43,581		44,493		3.82
Apptio, Inc.	^+#	(2)(3)(6)	Software	LIBOR	7.25%	8.25%	1/10/2019	1/10/2025	36,488		36,053		36,488		3.13
Ascend Buyer, LLC	#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	5.75%	6.50%	9/30/2021	9/30/2028	12,838		12,569		12,618		1.08
Associations, Inc.	#	(2)(3)(6)	Construction & Building	LIBOR	4.00%, 2.50% PIK	7.50%	7/2/2021	7/2/2027	11,570		11,457		11,599		0.99
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	+#	(2)(3)(7)	Software	LIBOR	6.00%	7.00%	12/24/2019	12/24/2026	36,844		36,142		33,192		2.85
Avenu Holdings, LLC	+#	(2)(3)	Sovereign & Public Finance	LIBOR	5.25%	6.25%	9/28/2018	9/28/2024	37,882		37,621		37,880		3.25
Barnes & Noble, Inc.	+#	(2)(3)(10)	Retail	LIBOR	6.50%	7.50%	8/7/2019	12/20/2026	28,933		27,917		28,146		2.41
BlueCat Networks, Inc. (Canada)	+	(2)(3)(7)	High Tech Industries	LIBOR	6.25%	7.25%	10/30/2020	10/30/2026	22,936		22,540		23,165		1.99
BMS Holdings III Corp.	+#	(2)(3)	Construction & Building	LIBOR	5.50%	6.50%	9/30/2019	9/30/2026	29,357		28,826		28,906		2.48
Bubbles Bidco S.P.A. (Italy)	^	(2)(3)(7)(6)	Consumer Goods: Non-Durable	LIBOR	9.25% (100% PIK)	9.25%	10/20/2021	10/20/2028	€	4,700	5,312		5,167		0.44
Bubbles Bidco S.P.A. (Italy)	^	(2)(3)(7)(6)	Consumer Goods: Non-Durable	LIBOR	6.25%	6.25%	10/20/2021	10/20/2028	€	—	(9)		(9)		—
Chartis Holding, LLC	^+#	(2)(3)(6)	Business Services	LIBOR	5.50%	6.50%	5/1/2019	5/1/2025	39,165		38,647		39,165		3.36
Chemical Computing Group ULC (Canada)	^+	(2)(3)(7)(6)	Software	LIBOR	4.50%	5.50%	8/30/2018	8/30/2024	14,378		14,297		14,309		1.23
Chudy Group, LLC	#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	5.75%	6.75%	6/30/2021	6/30/2027	826		812		842		0.07
CircusTrix Holdings, LLC	^+	(2)(3)	Hotel, Gaming & Leisure	LIBOR	5.50%, 2.50% PIK	9.00%	2/2/2018	1/16/2024	10,528		10,492		9,401		0.81
CircusTrix Holdings, LLC	^	(2)(3)	Hotel, Gaming & Leisure	LIBOR	5.50%, 2.50% PIK	9.00%	1/8/2021	7/16/2023	697		640		697		0.06
Cobblestone Intermediate Holdco LLC	#	(2)(3)	Consumer Services	LIBOR	5.50%	6.25%	1/29/2020	1/29/2026	723		718		712		0.06
Comar Holding Company, LLC	+#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	5.75%	6.75%	6/18/2018	6/18/2024	41,358		40,925		40,472		3.47

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar 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
Cority Software Inc. (Canada)	^+#	(2)(3)(7)(6)	Software	LIBOR	5.00%	6.00%	7/2/2019	7/2/2026	$	56,209	$	55,372	$	56,180	4.82	%
Cority Software Inc. (Canada)	#	(2)(3)(7)	Software	LIBOR	7.00%	8.00%	9/3/2020	7/2/2026	1,879		1,833		1,902		0.16	%
DCA Investment Holding, LLC	+	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	6.25%	7.00%	3/11/2021	3/12/2027	10,841		10,678		10,777		0.92
Derm Growth Partners III, LLC	^	(2)(3)(9)	Healthcare & Pharmaceuticals	LIBOR	6.25%	7.25%	2/15/2018	5/31/2022	16,140		14,730		10,836		0.93
Designer Brands Inc.	+#	(2)(3)(7)	Retail	LIBOR	8.50%	9.75%	8/7/2020	8/7/2025	34,090		33,436		33,691		2.88
Diligent Corporation	^	(2)(3)(6)	Telecommunications	LIBOR	6.25%	7.25%	8/4/2020	8/4/2025	603		587		616		0.05
DTI Holdco, Inc.	#	(2)(3)	High Tech Industries	LIBOR	4.75%	5.75%	12/18/2018	9/30/2023	1,934		1,883		1,907		0.16
Dwyer Instruments, Inc	#	(2)(3)(6)	Capital Equipment	LIBOR	5.50%	6.25%	7/21/2021	7/21/2027	12,463		12,206		12,427		1.07
Ellkay, LLC	#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	5.75%	6.75%	9/14/2021	9/14/2027	14,249		13,943		13,923		1.19
EPS Nass Parent, Inc.	#	(2)(3)(6)	Utilities: Electric	LIBOR	5.75%	6.75%	4/19/2021	4/19/2028	887		869		879		0.08
Ethos Veterinary Health LLC	+#	(2)(3)	Consumer Services	LIBOR	4.75%	4.85%	5/17/2019	5/15/2026	10,720		10,652		10,720		0.92
Greenhouse Software, Inc.	^+#	(2)(3)(6)	Software	LIBOR	6.50%	7.50%	3/1/2021	3/1/2027	15,196		14,858		14,870		1.28
Harbour Benefit Holdings, Inc.	+#	(2)(3)(6)	Business Services	LIBOR	5.25%	6.25%	12/13/2017	12/13/2024	11,487		11,425		11,365		0.97
Heartland Home Services, Inc	+#	(2)(3)(6)	Consumer Services	LIBOR	6.00%	7.00%	12/15/2020	12/15/2026	30,096		29,538		30,233		2.59
Hercules Borrower LLC	^+	(2)(3)(6)	Environmental Industries	LIBOR	6.50%	7.50%	12/14/2020	12/14/2026	18,453		18,012		18,865		1.62
Hoosier Intermediate, LLC	#	(2)(3)(6)	Healthcare & Pharmaceuticals	LIBOR	5.50%	6.50%	11/15/2021	11/15/2028	16,479		16,108		16,101		1.38
iCIMS, Inc.	+#	(2)(3)	Software	LIBOR	6.50%	7.50%	9/12/2018	9/12/2024	29,019		28,693		29,019		2.49
Individual FoodService Holdings, LLC	#	(2)(3)(6)	Wholesale	LIBOR	6.25%	7.25%	2/21/2020	11/22/2025	18,952		18,623		18,958		1.63
Infront Luxembourg Finance S.À R.L. (Luxembourg)	+#	(2)(3)(7)	Hotel, Gaming & Leisure	LIBOR	9.00%	9.00%	5/28/2021	5/28/2027	€	33,000	39,110		36,537		3.13
Integrity Marketing Acquisition, LLC	+#	(2)(3)	Banking, Finance, Insurance & Real Estate	LIBOR	5.75%	6.75%	1/15/2020	8/27/2025	24,601		24,345		24,476		2.10
Integrity Marketing Acquisition, LLC	#	(2)(3)	Banking, Finance, Insurance & Real Estate	LIBOR	5.50%	6.25%	8/7/2020	8/27/2025	7,913		7,844		7,832		0.67
Jeg's Automotive, LLC	#	(2)(3)(6)	Automotive	LIBOR	5.75%	6.75%	12/22/2021	12/22/2027	15,000		14,602		14,602		1.25
K2 Insurance Services, LLC	^+#	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	LIBOR	5.00%	6.00%	7/3/2019	7/1/2026	25,305		25,010		25,261		2.17
Kaseya, Inc.	^+#	(2)(3)(6)	High Tech Industries	LIBOR	5.50%, 1.00% PIK	7.50%	5/3/2019	5/3/2025	28,064		27,705		27,886		2.39
Lifelong Learner Holdings, LLC	^+#	(2)(3)(6)	Business Services	LIBOR	5.75%	6.75%	10/18/2019	10/18/2026	52,420		51,662		48,069		4.12
LinQuest Corporation	#	(2)(3)	Aerospace & Defense	LIBOR	5.75%	6.50%	7/28/2021	7/28/2028	9,975		9,785		9,816		0.84

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar 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
Liqui-Box Holdings, Inc.	#	(2)(3)(6)	Containers, Packaging & Glass	LIBOR	4.50%	5.50%	6/3/2019	6/3/2024	$	1,490	$	1,474	$	1,229	0.11	%
LVF Holdings, Inc.	^+#	(2)(3)(6)	Beverage, Food & Tobacco	LIBOR	6.25%	7.25%	6/10/2021	6/10/2027	41,227		40,357		40,056		3.43
Material Holdings, LLC	#	(2)(3)(6)	Business Services	LIBOR	5.75%	6.50%	8/19/2021	8/19/2027	14,886		14,552		14,692		1.26
Maverick Acquisition, Inc.	^+#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.00%	7.00%	6/1/2021	6/1/2027	43,942		43,025		42,869		3.68
Medical Manufacturing Technologies, LLC	#	(2)(3)(6)	Healthcare & Pharmaceuticals	SOFR	6.00%	7.00%	12/23/2021	12/23/2027	10,640		10,327		10,327		0.89
MMIT Holdings, LLC	#	(2)(3)(6)	High Tech Industries	LIBOR	6.25%	7.25%	9/15/2021	9/15/2027	11,087		10,858		10,853		0.93
NES Global Talent Finance US, LLC (United Kingdom)	+#	(2)(3)(7)	Energy: Oil & Gas	LIBOR	5.50%	6.50%	5/9/2018	5/11/2023	9,688		9,634		9,424		0.81
Performance Health Holdings, Inc.	#	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	6.00%	7.00%	7/12/2021	7/12/2027	7,182		7,048		7,083		0.61
PF Atlantic Holdco 2, LLC	^#	(2)(3)(6)	Hotel, Gaming & Leisure	LIBOR	6.00%	7.00%	11/12/2021	11/12/2027	27,723		26,941		26,923		2.31
PF Growth Partners, LLC	+	(2)(3)	Hotel, Gaming & Leisure	LIBOR	5.50%	6.50%	7/1/2019	7/11/2025	8,039		7,962		7,922		0.68
Prophix Software Inc. (Canada)	^+	(2)(3)(7)(6)	Software	LIBOR	6.50%	7.50%	2/1/2021	2/1/2026	14,618		14,313		14,791		1.27
Quantic Electronics, LLC	#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.25%	7.25%	11/19/2020	11/19/2026	14,625		14,333		14,418		1.24
Quantic Electronics, LLC	#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.25%	7.25%	3/1/2021	3/1/2027	8,882		8,663		8,727		0.75
Redwood Services Group, LLC	+#	(2)(3)	High Tech Industries	LIBOR	6.00%	7.00%	11/13/2018	6/6/2024	40,864		40,370		40,863		3.50
Regency Entertainment, Inc.	+#	(2)(3)	Media: Diversified & Production	LIBOR	6.75%	7.75%	5/22/2020	10/22/2025	70,000		68,949		68,832		5.90
Riveron Acquisition Holdings, Inc.	+#	(2)(3)	Banking, Finance, Insurance & Real Estate	LIBOR	5.75%	6.75%	5/22/2019	5/22/2025	19,574		19,337		19,574		1.68
RSC Acquisition, Inc.	+#	(2)(3)(6)	Banking, Finance, Insurance & Real Estate	LIBOR	5.50%	6.25%	11/1/2019	11/1/2026	34,486		33,970		34,622		2.97
Sapphire Convention, Inc.	^+#	(2)(3)(6)	Telecommunications	LIBOR	6.25%	7.25%	11/20/2018	11/20/2025	29,906		29,528		25,528		2.19
SPay, Inc.	^+	(2)(3)	Hotel, Gaming & Leisure	LIBOR	2.30%, 6.95% PIK	10.25%	6/15/2018	6/17/2024	23,005		22,809		20,218		1.73
Speedstar Holding, LLC	+#	(2)(3)(6)	Automotive	LIBOR	7.00%	8.00%	1/22/2021	1/22/2027	27,225		26,687		27,536		2.36
TCFI Aevex LLC	+#	(2)(3)(6)	Aerospace & Defense	LIBOR	6.00%	7.00%	3/18/2020	3/18/2026	28,867		28,414		24,601		2.11
The Leaders Romans Bidco Limited (United Kingdom) Term Loan B	+	(2)(3)(7)	Banking, Finance, Insurance & Real Estate	SONIA	6.25%, 2.50% PIK	9.50%	7/23/2019	6/30/2024	£	21,299	26,332		28,830		2.47
The Leaders Romans Bidco Limited (United Kingdom) Term Loan C	+	(2)(3)(7)(6)	Banking, Finance, Insurance & Real Estate	SONIA	6.25%, 2.50% PIK	9.50%	7/23/2019	6/30/2024	£	6,164	7,778		9,848		0.84
Trafigura Trading LLC	^	(2)(3)(6)(12)	Metals & Mining	LIBOR	8.40%	8.75%	7/26/2021	7/18/2022	2,236		2,234		2,086		0.18
Turbo Buyer, Inc.	+#	(2)(3)(6)	Automotive	LIBOR	6.00%	7.00%	12/2/2019	12/2/2025	42,428		41,652		41,537		3.56
Unifrutti Financing PLC (Cyprus)	+	(7)	Beverage, Food & Tobacco	FIXED	7.50%, 1.00% PIK	8.50%	9/15/2019	9/15/2026	€	18,536	19,701		21,473		1.84

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar 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
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage, Food & Tobacco	FIXED	11.00% PIK	11.00%	10/22/2020	9/15/2026	€	3,036	3,439		3,559		0.31	%
US INFRA SVCS Buyer, LLC	+#	(2)(3)(6)	Environmental Industries	LIBOR	6.50%	7.50%	4/13/2020	4/13/2026	$	58,708	$	57,673	$	57,068	4.89
USALCO, LLC	#	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	6.00%	7.00%	10/19/2021	10/19/2027	1,000		981		980		0.08
USLS Acquisition, Inc.	^+	(2)(3)(6)	Business Services	LIBOR	5.50%	6.50%	11/30/2018	11/30/2024	21,513		21,271		21,263		1.82
Westfall Technik, Inc.	^+#	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	5.75%	6.75%	9/13/2018	9/13/2024	27,920		27,673		27,661		2.37
Westfall Technik, Inc.	#	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	6.25%	7.25%	7/1/2021	9/13/2024	4,958		4,865		4,929		0.42
Wineshipping.com LLC	#	(2)(3)(6)	Beverage, Food & Tobacco	LIBOR	5.75%	6.75%	10/29/2021	10/29/2027	14,459		14,110		14,111		1.21
Yellowstone Buyer Acquisition, LLC	^	(2)(3)	Consumer Goods: Durable	LIBOR	5.75%	6.75%	9/13/2021	9/13/2027	449		440		440		0.04
YLG Holdings, Inc.	+	(2)(3)	Consumer Services	LIBOR	5.25%	6.25%	9/30/2020	11/1/2025	9,903		9,650		9,903		0.85




First Lien Debt Total											$	1,683,550	$	1,674,715	143.60	%
Second Lien Debt (16.3% of fair value)
11852604 Canada Inc. (Canada)	^	(2)(3)(7)	Healthcare & Pharmaceuticals	LIBOR	9.50% (100% PIK)	10.50%	9/30/2021	9/30/2028	$	6,590	$	6,432	$	6,425	0.55	%
AI Convoy S.A.R.L (United Kingdom)	+#	(2)(3)(7)	Aerospace & Defense	LIBOR	8.25%	9.25%	1/17/2020	1/17/2028	30,327		29,771		31,464		2.69
Aimbridge Acquisition Co., Inc.	+	(2)(3)	Hotel, Gaming & Leisure	LIBOR	7.50%	7.60%	2/1/2019	2/1/2027	21,047		20,647		19,600		1.68
AP Plastics Acquisition Holdings, LLC	+#	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	7.50%	8.25%	8/10/2021	8/10/2029	38,180		37,168		38,394		3.29
AQA Acquisition Holdings, Inc.	^	(2)(3)	High Tech Industries	LIBOR	7.50%	8.00%	5/14/2021	3/3/2029	5,538		5,409		5,543		0.48
Blackbird Purchaser, Inc.	^	(2)(3)(6)	Capital Equipment	LIBOR	7.50%	8.25%	12/14/2021	4/8/2027	9,195		8,949		8,949		0.77
Brave Parent Holdings, Inc.	+	(2)(3)	Software	LIBOR	7.50%	7.60%	10/3/2018	4/19/2026	18,197		17,923		18,197		1.56
Drilling Info Holdings, Inc.	^	(2)(3)	Energy: Oil & Gas	LIBOR	8.25%	8.35%	2/11/2020	7/30/2026	18,600		18,212		18,786		1.61
Jazz Acquisition, Inc.	+	(2)(3)	Aerospace & Defense	LIBOR	8.00%	8.10%	6/13/2019	6/18/2027	23,450		23,188		20,826		1.79
Outcomes Group Holdings, Inc.	#	(2)(3)	Business Services	LIBOR	7.50%	7.85%	10/23/2018	10/26/2026	1,731		1,728		1,731		0.15
PAI Holdco, Inc.	+	(2)(3)	Automotive	LIBOR	5.50%, 2.00% PIK	8.50%	10/28/2020	10/28/2028	13,806		13,446		13,806		1.18
Peraton Corp.	^	(2)(3)	Aerospace & Defense	LIBOR	7.75%	8.50%	2/24/2021	2/1/2029	12,300		12,126		12,345		1.06
Quartz Holding Company	+	(2)(3)	Software	LIBOR	8.00%	8.10%	4/2/2019	4/2/2027	11,900		11,728		11,900		1.02
Stonegate Pub Company Bidco Limited (United Kingdom)	^	(2)(3)(7)	Beverage, Food & Tobacco	SONIA	8.50%	8.60%	3/12/2020	3/12/2028	£	20,000	24,787		22,263		1.91
Tank Holding Corp.	+#	(2)(3)	Capital Equipment	LIBOR	8.25%	8.35%	3/26/2019	3/26/2027	41,479		40,905		41,894		3.59
TruGreen Limited Partnership	^	(2)(3)	Consumer Services	LIBOR	8.50%	9.25%	11/16/2020	11/2/2028	13,000		12,769		13,260		1.14
World 50, Inc.	#	(11)	Business Services	FIXED	11.50%	11.50%	1/10/2020	1/9/2027	24,017		23,595		23,827		2.04

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar 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
WP CPP Holdings, LLC	+	(2)(3)	Aerospace & Defense	LIBOR	7.75%	8.75%	7/18/2019	4/30/2026	$	29,500	$	29,293	$	28,689	2.46	%





Second Lien Debt Total											$	338,076	$	337,899	28.97	%


Investments—non-controlled/non-affiliated (1)			Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		Percentage of Net Assets
Equity Investments (2.8% of fair value)
ANLG Holdings, LLC	^		(8)	Capital Equipment	6/22/2018	592	$	592	$	821	0.07	%
Appriss Health, LLC	^		(8)	Healthcare & Pharmaceuticals	5/6/2021	—	445		466		0.04
Atlas Ontario LP (Canada)	^		(7)(8)	Business Services	4/7/2021	5,114	5,114		5,114		0.44
Avenu Holdings, LLC	^		(8)	Sovereign & Public Finance	9/28/2018	172	172		491		0.04
Blackbird Holdco, Inc.	^		(8)	Capital Equipment	12/14/2021	6	6,308		6,308		0.54
Buckeye Parent, LLC	^		(8)	Automotive	12/22/2021	442	442		442		0.04
Chartis Holding, LLC	^		(8)	Business Services	5/1/2019	433	433		690		0.06
Cority Software Inc. (Canada)	^		(8)	Software	7/2/2019	250	250		454		0.04
ECP Parent, LLC	^		(8)	Healthcare & Pharmaceuticals	3/29/2018	268	—		290		0.02
GB Vino Parent, L.P.	^		(8)	Beverage, Food & Tobacco	10/29/2021	4	351		351		0.03
Integrity Marketing Group, LLC	^		(8)	Banking, Finance, Insurance & Real Estate	12/21/2021	15,038	14,738		14,738		1.26
K2 Insurance Services, LLC	^		(8)	Banking, Finance, Insurance & Real Estate	7/3/2019	433	306		651		0.06
Mailgun Technologies, Inc.	^		(8)	High Tech Industries	3/26/2019	104	—		1,328		0.11
North Haven Goldfinch Topco, LLC	^		(8)	Containers, Packaging & Glass	6/18/2018	2,315	2,315		2,411		0.21
Pascal Ultimate Holdings, L.P	^		(8)	Capital Equipment	7/21/2021	36	364		364		0.03
Tank Holding Corp.	^		(8)	Capital Equipment	3/26/2019	850	482		1,260		0.12
Titan DI Preferred Holdings, Inc.	^		(8)	Energy: Oil & Gas	2/11/2020	12,843	12,587		12,969		1.11
Turbo Buyer, Inc.	^		(8)	Automotive	12/2/2019	1,925	933		2,774		0.24
Unifrutti Financing PLC (Cyprus)	^		(8)	Beverage, Food & Tobacco	10/22/2020	3	1,934		2,600		0.22
Unifrutti Financing PLC (Cyprus)	^	^	(8)	Beverage, Food & Tobacco	10/22/2020	—	532		837		0.07
USLS Acquisition, Inc.	^	^	(8)	Business Services	11/30/2018	641	641		940		0.08
W50 Parent LLC	^		(8)	Business Services	1/10/2020	500	190		762		0.07
Zenith American Holding, Inc.	^		(8)	Business Services	12/13/2017	440	220		408		0.03



Equity Investments Total							$	49,349	$	57,469	4.93	%
Total investments—non-controlled/non-affiliated							$	2,070,975	$	2,070,083	177.50	%
Total investments							$	2,070,975	$	2,070,083	177.50	%

^ Denotes that all or a portion of the assets are owned by Carlyle Credit Solutions, Inc. (together with its consolidated subsidiary, “we,” “us,” “our,” “CARS” or the “Company”). Accordingly, such assets are not available to creditors of Carlyle Credit Solutions SPV LLC (the “SPV”) or Carlyle Credit Solutions SPV2 LLC (“SPV2”).

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar amounts in thousands)

+ Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the SPV. The SPV has entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 5, Borrowings to these consolidated financial statements). Accordingly, such assets are not available to creditors of the Company or SPV2.

# Denotes that all or a portion of the assets are owned by the Company's wholly-owned subsidiary, SPV2. SPV2 has entered into a senior secured revolving credit facility (the "SPV2 Credit Facility", and together with the Subscription Facility and the SPV Credit Facility, the "Credit Facilities"). The lenders of the SPV2 Credit Facility have a first lien security interest in substantially all of the assets of SPV2 (see Note 5, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of the Company or the SPV.

(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, 2021, 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, 2021, 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 LIBOR (“L”) 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, 2021. As of December 31, 2021, the reference rates for all LIBOR loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.22% and the 180-day LIBOR rate at 0.33%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(5)Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (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 and equity investments was determined using significant unobservable inputs.

(6)As of December 31, 2021, 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
Advanced Web Technologies Holding Company	Delayed Draw	1.00	%	$	1,700	$	17
Advanced Web Technologies Holding Company	Delayed Draw	1.00		2,102		21
Advanced Web Technologies Holding Company	Revolver	0.50		1,813		18
Airnov, Inc.	Revolver	0.50		2,917		—
American Physician Partners, LLC	Revolver	0.50		550		—
Analogic Corporation	Revolver	0.50		1,102		(11)
Applied Technical Services, LLC	Revolver	0.50		40		—
Appriss Health, LLC	Revolver	0.50		2,963		3
Apptio, Inc.	Revolver	0.50		1,420		—
Ascend Buyer, LLC	Revolver	0.50		1,070		(17)
Associations, Inc.	Revolver	0.50		723		2
Blackbird Purchaser, Inc.	Delayed Draw	1.00		3,065		(61)
Bubbles Bidco S.P.A. (Italy)	Delayed Draw	2.80		€	873	(30)
Bubbles Bidco S.P.A. (Italy)	Revolver	—		€	537	(9)
Chartis Holding, LLC	Revolver	0.50		2,401		—
Chemical Computing Group ULC (Canada)	Revolver	0.50		903		(4)
Chudy Group, LLC	Delayed Draw	1.00		138		2
Chudy Group, LLC	Revolver	0.50		34		1
Comar Holding Company, LLC	Revolver	0.50		2,935		(59)

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount		Fair Value
Cority Software Inc. (Canada)	Revolver	0.50	%	$	3,000	$	(1)
DCA Investment Holding, LLC	Delayed Draw	1.00		1,495		(8)
Diligent Corporation	Delayed Draw	1.00		110		2
Diligent Corporation	Revolver	0.50		47		1
Dwyer Instruments, Inc	Delayed Draw	1.00		1,003		(3)
Dwyer Instruments, Inc	Revolver	0.50		411		(1)
Ellkay, LLC	Revolver	0.50		1,786		(37)
EPS Nass Parent, Inc.	Delayed Draw	1.00		85		(1)
EPS Nass Parent, Inc.	Revolver	0.50		25		—
Greenhouse Software, Inc.	Revolver	0.50		1,471		(29)
Harbour Benefit Holdings, Inc.	Revolver	0.50		813		(8)
Heartland Home Services, Inc	Delayed Draw	1.00		2,072		8
Heartland Home Services, Inc	Revolver	0.50		2,687		10
Hercules Borrower LLC	Revolver	0.50		2,160		43
Hoosier Intermediate, LLC	Revolver	0.50		2,400		(48)
Individual FoodService Holdings, LLC	Delayed Draw	1.00		48		—
Individual FoodService Holdings, LLC	Delayed Draw	1.00		750		—
Individual FoodService Holdings, LLC	Revolver	0.50		2,426		—
Jeg's Automotive, LLC	Delayed Draw	1.00		3,333		(67)
Jeg's Automotive, LLC	Revolver	0.50		1,667		(33)
K2 Insurance Services, LLC	Revolver	0.50		2,290		(4)
Kaseya, Inc.	Delayed Draw	1.00		585		(3)
Kaseya, Inc.	Revolver	0.50		1,542		(9)
Lifelong Learner Holdings, LLC	Revolver	0.50		4		—
Liqui-Box Holdings, Inc.	Revolver	0.50		1,140		(113)
LVF Holdings, Inc.	Delayed Draw	1.00		4,670		(116)
LVF Holdings, Inc.	Revolver	0.50		1,459		(36)
Material Holdings, LLC	Delayed Draw	—		1,916		(21)
Material Holdings, LLC	Revolver	1.00		806		(9)
Maverick Acquisition, Inc.	Delayed Draw	1.00		4,679		(101)
Maverick Acquisition, Inc.	Delayed Draw	1.00		1,290		(28)
Medical Manufacturing Technologies, LLC	Delayed Draw	1.00		4,132		(83)
Medical Manufacturing Technologies, LLC	Revolver	0.50		930		(19)
MMIT Holdings, LLC	Revolver	0.50		857		(17)
PF Atlantic HoldCo 2, LLC	Revolver	0.50		2,759		(55)
PF Atlantic HoldCo 2, LLC	Delayed Draw	0.75		9,517		(190)
Prophix Software Inc. (Canada)	Revolver	0.50		2,657		27

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount		Fair Value
Quantic Electronics, LLC	Revolver	0.50	%	$	557	$	(7)
Quantic Electronics, LLC	Delayed Draw	1.00		3,164		(41)
Quantic Electronics, LLC	Revolver	0.50		824		(11)
RSC Acquisition, Inc.	Revolver	0.50		510		2
Sapphire Convention, Inc.	Revolver	0.50		2,560		(345)
Speedstar Holding, LLC	Delayed Draw	1.00		3,775		38
TCFI Aevex LLC	Delayed Draw	1.00		521		(75)
TCFI Aevex LLC	Delayed Draw	1.00		417		(60)
The Leaders Romans Bidco Limited (United Kingdom)	Delayed Draw	1.56		£	1,902	399
Trafigura Trading LLC	Revolver	0.50		7,762		(133)
Turbo Buyer, Inc.	Revolver	0.50		2,151		(43)
US INFRA SVCS Buyer, LLC	Delayed Draw	1.00		9,972		(236)
US INFRA SVCS Buyer, LLC	Revolver	0.50		525		(12)
USLS Acquisition, Inc.	Revolver	0.50		1,134		(12)
Wineshipping.com LLC	Delayed Draw	1.00		1,986		(39)
Wineshipping.com LLC	Revolver	0.50		1,430		(28)








Total unfunded commitments				$	136,365	$	(1,679)

(8)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, unless otherwise noted. As of December 31, 2021, the aggregate fair value of these securities is $57,469, or 4.93% of the Company’s net assets.

(9)Loan was on non-accrual status as of December 31, 2021.

(11)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.

(12)The investment is secured by receivables purchased from the portfolio company, with an implied discount of 8.75%. The investment was made via a tranched participation arrangement between the purchaser of such receivables and the Company. The investment has a secondary priority behind the rights of such purchaser.

As of December 31, 2021, investments at fair value consisted of the following:


Type	Amortized Cost		Fair Value		% of Fair Value


First Lien Debt	$	1,683,550	$	1,674,715	80.9	%
Second Lien Debt	338,076		337,899		16.3
Equity Investments	49,349		57,469		2.8
Total	$	2,070,975	$	2,070,083	100.0	%

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar amounts in thousands)

The rate type of debt investments at fair value as of December 31, 2021 was as follows:


Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	1,974,891	$	1,963,755	97.6	%
Fixed Rate	46,735		48,859		2.4
Total	$	2,021,626	$	2,012,614	100.0	%

The industry composition of investments at fair value as of December 31, 2021 was as follows:


Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	198,598	$	193,755	9.4	%
Automotive	97,762		100,697		4.9
Banking, Finance, Insurance & Real Estate	159,660		165,832		8.0
Beverage, Food & Tobacco	105,211		105,250		5.1
Business Services	170,503		169,058		8.1
Capital Equipment	96,247		98,418		4.8
Chemicals, Plastics & Rubber	70,687		71,964		3.5
Construction & Building	40,283		40,505		2.0
Consumer Goods: Durable	440		440		—
Consumer Goods: Non-Durable	5,303		5,158		0.2
Consumer Services	63,327		64,828		3.1
Containers, Packaging & Glass	95,875		96,154		4.6
Energy: Oil & Gas	40,433		41,179		2.0
Environmental Industries	75,685		75,933		3.7
Healthcare & Pharmaceuticals	162,197		159,660		7.7
High Tech Industries	108,765		111,545		5.4
Hotel, Gaming & Leisure	128,601		121,298		5.9

Media: Diversified & Production	68,949		68,832		3.3
Metals & Mining	2,234		2,086		0.1
Retail	61,353		61,837		3.0
Software	231,462		231,302		11.1
Sovereign & Public Finance	37,793		38,371		1.9
Telecommunications	30,115		26,144		1.3

Utilities: Electric	869		879		—
Wholesale	18,623		18,958		0.9
Total	$	2,070,975	$	2,070,083	100.0	%

CARLYLE CREDIT SOLUTIONS, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2021

(dollar amounts in thousands)

The geographical composition of investments at fair value as of December 31, 2021 was as follows:


Geography	Amortized Cost		Fair Value		% of Fair Value
Canada	$	120,151	$	122,340	5.9	%
Cyprus	25,606		28,469		1.4
Italy	5,303		5,158		0.2

Luxembourg	75,252		69,729		3.4
United Kingdom	98,302		101,829		4.9
United States	1,746,361		1,742,558		84.2
Total	$	2,070,975	$	2,070,083	100.0	%

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE CREDIT SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of September 30, 2022

(dollar amounts in thousands, except per share data)

1. ORGANIZATION

Carlyle Credit Solutions, Inc. (“CARS” or the “Company”) was formed on February 10, 2017 as a Maryland corporation with the name Carlyle Private Credit, Inc. Its name was changed to TCG BDC II, Inc. on March 3, 2017, and was changed again to Carlyle Credit Solutions, Inc. on March 29, 2022. The Company is structured as an externally managed, non-diversified closed-end investment company. The Company is managed by its investment adviser, Carlyle Global Credit Investment Management L.L.C. (“Investment Adviser”), a wholly owned subsidiary of The Carlyle Group Inc. 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 attractive risk adjusted returns and current income primarily by investing in senior secured term loans to U.S. middle market companies in which private equity sponsors hold, directly or indirectly, a financial interest in the form of debt and/or equity. The Company's core investment strategy focuses on lending to U.S. middle market companies, which the Company defines as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which the Company believes is a useful proxy for cash flow. This core strategy is supplemented with the Company’s complementary specialty lending strategy, which takes advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. Generally, the Company expects its core strategy and its complementary strategy to be 70-85% and 15-30%, respectively, of the portfolio. The Company seeks to achieve its investment objective primarily through direct originations 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 the balance of its assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities).

The Company invests 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 (that is, below BBB- or Baa3, which is often referred to as "junk"). Exposure to below investment grade instruments involves certain risks, including speculation with respect to the borrower's capacity to pay interest and repay principal.

On September 11, 2017 ("Commencement"), the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. On January 21, 2022, stockholders approved the Company's conversion from a finite life private BDC with no interim liquidity to a private BDC with a perpetual life and a regular quarterly liquidity program. The conversion extends indefinitely the Company's finite term and finite investment period and permits the Company to accept new subscriptions for shares of its common stock in a new continuous private offering (the “New Continuous Offering”).

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

The Company is externally managed by the Investment Adviser, 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., a 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 under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.

Carlyle Credit Solutions SPV LLC (the “SPV”, formerly TCG BDC II SPV LLC) is a Delaware limited liability company that was formed on January 28, 2019. The SPV invests in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation, January 28, 2019.

Carlyle Credit Solutions SPV 2 LLC (“SPV2”, formerly TCG BDC II SPV 2 LLC, and collectively with the SPV, the “SPVs”) is a Delaware limited liability company that was formed on March 10, 2020. SPV2 is a wholly owned subsidiary of

the Company and is consolidated in these consolidated financial statements commencing from the date of its formation, March 10, 2020.

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 SPVs. 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 interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the interim periods presented have been included. These adjustments are of a normal, recurring nature. This Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2021. The results of operations for the three month and nine month periods ended September 30, 2022 are not necessarily indicative of the operating results to be expected for the full year.

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 consolidated 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 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 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.

Cash, Cash Equivalents and Restricted Cash

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 two large financial institutions and cash held in such financial institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit. As of September 30, 2022 and December 31, 2021, the Company had restricted cash balances of $39,671 and $31,553, respectively, which represent amounts that are collected by trustees who have been appointed as custodians of the assets securing certain of the Company's financing transactions, and held for payment of interest expense and principal on the outstanding borrowings, or reinvestment into new assets. As of September 30, 2022 and December 31, 2021, approximately $690 and $269, respectively, of the restricted cash balances were denominated in a foreign currency.

Revenue Recognition

Interest from Investments and Realized Gain/Loss on 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. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.

The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK 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 September 30, 2022 and December 31, 2021, the fair value of the loans in the portfolio with PIK provisions was $194,048 and $197,006, respectively, which represented approximately 9.3% and 9.5% of total investments at fair value, respectively. For the three and nine month periods ended September 30, 2022, the Company earned $2,618 and $7,667, respectively, in PIK income. For the three and nine month periods ended September 30, 2021, the Company earned $1,746 and $5,030, respectively, in PIK income. Prior to September 30, 2022, PIK income was included in interest income in the accompanying Consolidated Statements of Operations. Prior periods have been conformed to the current presentation.

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 three and nine month periods ended September 30, 2022, the Company earned $2,767 and $6,350, respectively, in other income, primarily from amendment, underwriting, and prepayment fees. For the three and nine month periods ended September 30, 2021, the Company earned $632 and $4,505, respectively, in other income, primarily from amendment and underwriting fees.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more 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 paid current 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 September 30, 2022 and December 31, 2021, the fair value of loans on non-accrual status was $6,223 and $10,836, respectively, which represented approximately 0.3% and 0.5%, respectively, of the total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of September 30, 2022 and December 31, 2021 and for the periods then ended.

Credit Facilities – Related Costs, Expenses and Deferred Financing Costs

The Company, the SPV and SPV2 have each entered into a senior secured revolving credit facility (as amended, the "Subscription Facility", "SPV Credit Facility" and "SPV2 Credit Facility", respectively, and together, the "Credit Facilities").

Interest expense and unused commitment fees on the Credit Facilities are recorded on an accrual basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.

The Credit Facilities are recorded at carrying value, which approximates fair value.

Deferred financing costs include capitalized expenses related to the closing or amendments of the Credit Facilities. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility. The unamortized balance of such costs is included in deferred financing costs in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of Operations.

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 years. 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 did not incur excise tax for the three and nine month periods ended September 30, 2022. For the three and nine month periods ended September 30, 2021 the Company incurred $0 and $100, respectively, in excise tax.

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 SPVs 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 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.

Dividends and distributions, if any, are paid in cash to common stockholders, and may then be reinvested in shares of common stock at the election of the common stockholder pursuant to the Company’s dividend reinvestment plan.

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.

Recent Accounting Standards Updates

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the FASB. ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of adopting ASU 2020-04 and 2021-01 on its consolidated financial statements. The Company does not expect this guidance to impact 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 or the Company’s Board of Directors, 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 members of the Investment Adviser; (iii) the Board of Directors 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 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; (iv) if applicable, prior to September 8, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) reviewed the assessments of the Investment Adviser and the third-party valuation firm; and (v) if applicable, prior to September 8, 2022, the Board of Directors discussed the valuation recommendations of the Audit Committee and determined the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

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 September 30, 2022 and December 31, 2021.

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, 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.

Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur. For the three month and nine month periods ended September 30, 2022 and 2021, 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 September 30, 2022 and December 31, 2021:


	September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	1,759,621	$	1,759,621
Second Lien Debt	—		—		260,840		260,840
Equity Investments	—		—		72,123		72,123
Total	$	—	$	—	$	2,092,584	$	2,092,584


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	1,674,715	$	1,674,715
Second Lien Debt	—		—		337,899		337,899
Equity Investments	—		—		57,469		57,469
Total	$	—	$	—	$	2,070,083	$	2,070,083

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
	For the three month period ended September 30, 2022
	First Lien Debt		Second Lien Debt		Equity Investments		Total
Balance, beginning of period	$	1,646,689	$	281,152	$	58,849	$	1,986,690
Purchases	227,917		285		13,877		242,079
Sales	(20,142)		(19,691)		—		(39,833)
Paydowns	(94,016)		—		—		(94,016)
Accretion of discount	2,668		181		29		2,878
Net realized gains (losses)	318		(4,659)		—		(4,341)
Net change in unrealized appreciation (depreciation)	(3,813)		3,572		(632)		(873)
Balance, end of period	$	1,759,621	$	260,840	$	72,123	$	2,092,584
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(3,310)	$	(683)	$	(632)	$	(4,625)



	Financial Assets
	For the nine month period ended September 30, 2022
	First Lien Debt		Second Lien Debt		Equity Investments		Total
Balance, beginning of period	$	1,674,715	$	337,899	$	57,469	$	2,070,083
Purchases	455,742		963		16,356		473,061
Sales	(37,147)		(23,703)		—		(60,850)
Paydowns	(310,512)		(41,838)		(1,125)		(353,475)
Accretion of discount	8,129		1,134		83		9,346
Net realized gains (losses)	3,820		(5,615)		1,740		(55)
Net change in unrealized appreciation (depreciation)	(35,126)		(8,000)		(2,400)		(45,526)
Balance, end of period	$	1,759,621	$	260,840	$	72,123	$	2,092,584
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(28,303)	$	(7,615)	$	(1,072)	$	(36,990)


	Financial Assets
	For the three month period ended September 30, 2021
	First Lien Debt		Second Lien Debt		Equity Investments		Total
Balance, beginning of period	$	1,588,370	$	300,212	$	35,231	$	1,923,813
Purchases	163,002		57,359		825		221,186
Sales	—		—		(6,010)		(6,010)
Paydowns	(46,196)		(20,643)		(429)		(67,268)
Accretion of discount	1,956		542		—		2,498
Net realized gains (losses)	—		—		4,546		4,546
Net change in unrealized appreciation (depreciation)	(1,186)		(496)		752		(930)
Balance, end of period	$	1,705,946	$	336,974	$	34,915	$	2,077,835
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(903)	$	(377)	$	1,602	$	322



	Financial Assets
	For the nine month period ended September 30, 2021
	First Lien Debt		Second Lien Debt		Equity Investments		Total
Balance, beginning of period	$	1,523,542	$	260,258	$	27,735	$	1,811,535
Purchases	453,537		87,076		7,253		547,866
Sales	(74,606)		—		(7,137)		(81,743)
Paydowns	(210,628)		(24,039)		(1,421)		(236,088)
Accretion of discount	6,485		866		17		7,368
Net realized gains (losses)	1,229		—		5,227		6,456
Net change in unrealized appreciation (depreciation)	6,387		12,813		3,241		22,441
Balance, end of period	$	1,705,946	$	336,974	$	34,915	$	2,077,835
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Statements of Operations	$	6,928	$	12,540	$	3,914	$	23,382

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 its 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 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.

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 September 30, 2022 and December 31, 2021:


	Fair Value as of September 30, 2022		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	1,593,936	Discounted Cash Flow	Discount Rate	4.82	%	14.90	%	8.24	%
	156,812		Consensus Pricing	Indicative Quotes	97.00	%	100.00	%	98.24	%
	8,873		Income Approach	Discount Rate	11.85	%	11.85	%	11.85	%

Total First Lien Debt	1,759,621
Investments in Second Lien Debt	260,840		Discounted Cash Flow	Discount Rate	9.05	%	13.25	%	9.95	%

Total Second Lien Debt	260,840
Investments in Equity	72,123		Income Approach	Discount Rate	7.22	%	10.97	%	8.38	%
			Market Approach	Comparable Multiple	9.07x		18.47x		11.26x
Total Equity Investments	72,123
Total Level 3 Investments	$	2,092,584


	Fair Value as of December 31, 2021		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	1,430,227	Discounted Cash Flow	Discount Rate	3.90	%	13.99	%	7.13	%
	233,652		Consensus Pricing	Indicative Quotes	98.00	%	100.00	%	98.17	%
	10,836		Income Approach	Discount Rate	11.55	%	11.55	%	11.55	%

Total First Lien Debt	1,674,715
Investments in Second Lien Debt	300,262		Discounted Cash Flow	Discount Rate	7.11	%	15.83	%	9.55	%
	37,637		Consensus Pricing	Indicative Quotes	97.25	%	98.00	%	97.43	%
Total Second Lien Debt	337,899
Investments in Equity	57,469		Income Approach	Discount Rate	7.22	%	10.19	%	8.31	%
			Market Approach	Comparable Multiple	9.10x		16.43x		11.86x
Total Equity Investments	57,469
Total Level 3 Investments	$	2,070,083

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. 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 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 comparable EBITDA multiples 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 carrying value and fair value of the Company’s secured borrowings disclosed but not carried at fair value as of September 30, 2022 and December 31, 2021:


	September 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Secured borrowings	$	930,423	$	930,423	$	966,947	$	966,947
Total	$	930,423	$	930,423	$	966,947	$	966,947

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 significant unobservable inputs used in the fair value measurement of the Company’s secured borrowings are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement.

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 June 26, 2017, the Company entered into an investment advisory agreement (the “Investment Advisory Agreement”) with the Investment Adviser. The initial term of the Investment Advisory Agreement was two years from June 26, 2017 and, unless terminated earlier, the Investment Advisory Agreement renewed automatically for successive annual periods, provided that such continuance was specifically approved at least annually by the vote of the Board of Directors and by the vote of 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”). On May 26, 2021, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Company’s Investment Advisory Agreement with the Investment Adviser for an

additional one year term. Pursuant to relief granted by the SEC in light of the COVID-19 pandemic (the "Order") and a determination by the Board of Directors that reliance on the order was appropriate due to circumstances related to the current or potential side-effects of COVID-19, the May 26 meeting was held by video- and telephone-conference. On October 11, 2021, the Board, including all of its Independent Directors, reviewed and approved the terms of an amended and restated investment advisory agreement for an initial term of two years, conditional upon stockholders’ approval of the proposal to convert the Company to a perpetual life BDC as discussed above. Pursuant to the Order and a determination by the Board that reliance on the Order was appropriate due to circumstances related to the current or potential side effects of COVID-19, the October 11, 2021 meeting was held by video- and telephone-conference.

Pursuant to the Investment Advisory Agreement, which was amended and restated effective as of January 21, 2022 as discussed below, and 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 management fee and an incentive fee.

Under the Investment Advisory Agreement, the management fee was calculated and payable quarterly in arrears at an annual rate of 1.00% of the Company’s average Capital Under Management (as defined below) at the end of the then-current quarter and the prior calendar quarter (and, in the case of the Company’s first quarter, the Company’s Capital Under Management as of such quarter-end). “Capital Under Management” means cumulative capital called, less cumulative distributions categorized as Returned Capital. “Returned Capital” means unused capital commitments increased by the aggregate amount of (i) any portion of distributions made by the Company to an investor during the Original Investment Period (as defined below) which represents (A) proceeds realized from the sale or repayment of any investment (as opposed to investment income) during the Investment Period (but not in excess of the cost of any such investment) or (B) a return of such investor’s capital contributions to the Company, as determined by the Board of Directors, and (ii) any amount drawn down by the Company from unused capital commitments to pay management fees, incentive fees, organizational expenses or Company expenses, to the extent such investor receives subsequent distributions. The “Original Investment Period” commenced on September 11, 2017 and was scheduled to expire September 11, 2021. On January 11, 2021, the Board of Directors extended the Investment Period for one additional one-year period through September 11, 2022. On January 11, 2021, the Company, in connection with the extension of the Investment Period to September 11, 2022, entered into a letter agreement with the Investment Adviser, under which the Investment Adviser agreed that effective September 12, 2021 the annual rate of its management fee would decrease from a rate of 1.25% to 1.00% of the Company's average Capital Under Management. For the avoidance of doubt, Capital Under Management does not include capital acquired through the use of leverage, and Returned Capital does not include distributions of the Company’s investment income (i.e., proceeds received in respect of interest payments, dividends or fees, net of expenses) or net realized capital gains to the investors.

Under the Investment Advisory Agreement, the incentive fee consisted of two parts. The first part was calculated and payable quarterly in arrears and equaled 15% of pre-incentive fee net investment income for the immediately preceding calendar quarter, subject to a preferred return of 1.75% per quarter (7% annualized), or “hurdle rate,” and a “catch-up” feature. The second part was determined and payable in arrears as of the end of each calendar year in an amount equal to 15% of realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, 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 no incentive fee on capital gains is payable to the Investment Adviser unless cumulative total return exceeded a 7% annual return on weighted average cumulative capital called less cumulative distributions categorized as Returned Capital.

On January 21, 2022, stockholders approved the amended and restated investment advisory agreement, which the Company entered into effective as of the date of such approval (the “Amended and Restated Investment Advisory Agreement”). Pursuant to the Amended and Restated Investment Advisory Agreement, (i) the income-based incentive fee rate was reduced from 15.0% to 12.5%, and the "hurdle rate" was reduced from 1.75% (7.0% annualized) to 1.25% (5.0% annualized); (ii) the capital gains incentive fee was reduced from 15.0% to 12.5%; and (iii) the calculation of the annual base management fee was changed to 1.00% of the Company's net asset value as of the end of the immediately preceding calendar quarter (as adjusted for capital called, dividends reinvested, distributions paid and issuer share repurchases made during the current calendar quarter) from 1.00% of the Company's average capital under management. The terms of the Amended and Restated Investment Advisory Agreement were effective upon execution of the agreement, except for the change to the income-based incentive fee which became effective for the calendar quarter ending June 30, 2022. The Amended and Restated Investment Advisory Agreement will continue in effect until January 21, 2024 and, unless terminated earlier, will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board and by the vote of a majority of the Independent Directors. The Amended and Restated 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.

Below is a summary of the base management fees and incentive fees incurred during the three month and nine month periods ended September 30, 2022 and 2021:


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Base management fees	$	3,020	$	3,240	$	8,847	$	9,502
Incentive fees on pre-incentive fee net investment income	4,461		4,559		13,184		13,287
Realized capital gains incentive fees	—		—		—		—
Accrued capital gains incentive fees	—		—		—		—
Total capital gains incentive fees	—		—		—		—
Total incentive fees	4,461		4,559		13,184		13,287
Total base management fees and incentive fees	$	7,481	$	7,799	$	22,031	$	22,789

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.

As of September 30, 2022 and December 31, 2021, $7,485 and $7,763, respectively, were included in management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

On June 26, 2017, 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 18, 2017, the Company entered into the “Administration Agreement” with 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 May 9, 2022, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Company’s Administration Agreement with the Administrator for an additional one year term.

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 Compliance Officer, Chief Financial Officer, and Treasurer) 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 (the “Sarbanes-Oxley Act”). Reimbursement under the Administration Agreement occurs quarterly in arrears.

For the three and nine month periods ended September 30, 2022, the Company incurred $331 and $1,050, respectively, in fees under the Administration Agreement. For the three and nine month periods ended September 30, 2021, the Company incurred $275 and $598, respectively, in fees under the Administration Agreement. Fees incurred under the Administration Agreement are included in administrative service fees in the accompanying Consolidated Statements of Operations. As of September 30, 2022 and December 31, 2021, $902 and $239, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

Sub-Administration Agreements

On June 26, 2017, the Administrator entered into sub-administration agreements 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 June 22, 2017, 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 Agreements, the “Sub-Administration Agreements”).

On May 9, 2022, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Company’s Sub-Administration Agreements for an additional one year term.

For the three and nine month periods ended September 30, 2022, fees incurred in connection with the State Street Sub-Administration Agreement amounted to $212 and $698, respectively. For the three and nine month periods ended September 30, 2021, fees incurred in connection with the State Street Sub-Administration Agreement amounted to $192 and $556, respectively. These fees are included in other general and administrative expenses in the accompanying Consolidated Statements of Operations. As of September 30, 2022 and December 31, 2021, $630 and $726, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

Placement Fees

On June 26, 2017, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (“TCG”), a licensed broker-dealer and an affiliate of the Investment Adviser, which may require stockholders to pay a placement fee to TCG for TCG’s services.

For the three and nine month periods ended September 30, 2022, TCG received $0 and $1,554, respectively, in placement fees from the Company's stockholders in connection with the issuance or sale of the Company's common stock. For the three and nine month periods ended September 30, 2021, TCG earned $687 and $2,039, respectively, in placement fees from the Company's stockholders in connection with the issuance or sale of the Company's common stock. TCG paid these amounts as placement fees to sub-placement agents.

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 and a pricing committee of the Board of Directors, and may establish additional committees in the future. For the three and nine month periods ended September 30, 2022, the Company incurred $98 and $300, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. For the three and nine month periods ended September 30, 2021, the Company incurred $96 and $237, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. As of September 30, 2022 and December 31, 2021, $1 and $99, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

5. BORROWINGS

The Company, the SPV and SPV2 are party to the Credit Facilities 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 200% after such borrowing. As of September 30, 2022 and December 31, 2021, asset coverage was 229.22% and 220.61%, respectively, and the Company and the SPVs were in compliance with all covenants and other requirements under the Credit Facilities as of September 30, 2022 and December 31, 2021. Below is a summary of the borrowings and repayments under the Credit Facilities for the three month and nine month periods ended September 30, 2022 and 2021.


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Outstanding borrowing, beginning of period	$	884,609	$	988,018	$	966,947	$	880,956
Borrowings	166,799		145,450		321,777		345,811
Repayments	(113,225)		(104,500)		(340,748)		(196,533)
Foreign currency translation	(7,760)		(3,142)		(17,553)		(4,408)
Outstanding borrowing, end of period	$	930,423	$	1,025,826	$	930,423	$	1,025,826

Subscription Facility

The Company entered into the Subscription Facility with a lender on October 3, 2017, which was subsequently amended on March 14, 2018, November 16, 2018, May 12, 2020 and October 2, 2020. The Subscription Facility provides for secured borrowings of $10,000 as of September 30, 2022. The maximum principal amount is subject to availability under the Subscription Facility, which is based on certain of the Company’s unfunded investor equity capital commitments, and restrictions imposed on borrowings under the Investment Company Act. The Subscription Facility was terminated and repaid in full on October 3, 2022. The Company may borrow amounts in U.S. Dollars or certain other permitted currencies. Borrowings under the Subscription Facility bear interest currently at LIBOR plus an applicable spread of 1.95% per year, subject to a 0.50% floor on LIBOR. The Company also pays a fee of 0.25% per year on undrawn amounts under the Subscription Facility.

Subject to certain exceptions, the Subscription Facility is secured by a first lien security interest in the Company’s unfunded investor equity capital commitments. The Subscription Facility includes customary covenants, 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.

SPV Credit Facility

The SPV entered into the SPV Credit Facility with a lender on April 1, 2019, which was subsequently amended October 25, 2019, February 7, 2020, December 4, 2020, June 2, 2021, December 28, 2021 and March 28, 2022. The SPV Credit Facility provides for secured borrowings of $700,000, subject to availability under the SPV Credit Facility and restrictions imposed on borrowings under the Investment Company Act. The SPV Credit Facility has a revolving period through October 15, 2024 (October 15, 2022 prior to the March 2022 amendment), and a maturity date of April 1, 2026 (April 1, 2025 prior to the March 2022 amendment), with one one-year extension option, subject to the SPV's and lender's consent. The SPV may borrow amounts in U.S. Dollars or certain other permitted currencies. Borrowings under the SPV Credit Facility bear interest initially at SOFR (LIBOR prior to the March 2022 amendment) (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.50% per year (2.40% prior to the March 2022 amendment). The SPV also pays a fee of between 0.50% and 0.75% per year on undrawn amounts under the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The lender has a first lien security interest on substantially all of the assets of the SPV.

SPV2 Credit Facility

SPV2 entered into the SPV2 Credit Facility with a lender on May 13, 2020, which was subsequently amended on February 11, 2021, August 13, 2021, March 7, 2022, and September 20, 2022. The SPV2 Credit Facility provides for secured borrowings during the applicable revolving period up to a principal amount of $550,000 as of September 30, 2022, which was increased by $100,000 effective September 20, 2022, subject to availability under the SPV2 Credit Facility and restrictions imposed on borrowings under the Investment Company Act. The SPV2 Credit Facility has a revolving period through March 7, 2025 (May 13, 2023 prior to the March 2022 amendment), and a maturity date of March 7, 2030 (May 13, 2028 prior to the March 2022 amendment). Borrowings under the SPV2 Credit Facility bear interest initially at LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate plus 0.50%) plus 2.40% (2.66% prior to the March 2022 amendment). SPV2 pays a fee of 0.25% per year on undrawn amounts under the SPV2 Credit Facility. Payments under the SPV2 Credit Facility are made quarterly. The lender has a security interest on substantially all of the assets of SPV2.

Short Term Liabilities

In order to finance certain investment transactions, the Company may, from time to time, enter into repurchase agreements with Macquarie US Trading LLC (“Macquarie”), whereby the Company sells to Macquarie an investment that it holds and concurrently enters into an agreement to repurchase the same investment at an agreed-upon price at a future date, generally not to exceed 90-days from the date it was sold (the “Macquarie Transaction”).

In accordance with ASC 860, Transfers and Servicing, these Macquarie Transactions meet the criteria for secured borrowings. Accordingly, the investment financed by the Macquarie Transaction remains on the Company’s Consolidated Statements of Assets and Liabilities as an asset, and the Company records a liability to reflect its repurchase obligation to Macquarie (the “Repurchase Obligation”). The Repurchase Obligation is secured by the respective investment that is the subject of the repurchase agreement. Interest expense associated with the Repurchase Obligation is reported on the Company’s Consolidated Statements of Operations within Other expenses.

As of September 30, 2022 and December 31, 2021, the Company had no outstanding Repurchase Obligations. For the three and nine month periods ended September 30, 2022, the Company did not enter into any repurchase agreements. For the three and nine month periods ended September 30, 2021, the Company entered into $35,500 and $58,921 of repurchase agreements, respectively, with a weighted average interest rate of 2.72% and 3.00%, respectively.

Summary of Credit Facilities

The Credit Facilities consisted of the following as of September 30, 2022 and December 31, 2021:


	September 30, 2022
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)
Subscription Facility	$	10,000	$	—	$	10,000	$	—
SPV Credit Facility	700,000		610,123		89,877		46,626
SPV2 Credit Facility	550,000		320,300		229,700		111,410
Total	$	1,260,000	$	930,423	$	329,577	$	158,036

	December 31, 2021
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)
Subscription Facility	$	50,000	$	30,190	$	19,810	$	1,744
SPV Credit Facility	700,000		594,357		105,643		30,961
SPV2 Credit Facility	450,000		342,400		107,600		107,600
Total	$	1,200,000	$	966,947	$	233,053	$	140,305

(1)The unused portion is the amount upon which commitment fees are based.

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

For the three and nine month periods ended September 30, 2022 and 2021, the components of interest expense and credit facility fees were as follows:


	For the three month periods ended						For the nine month periods ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Interest expense	$	10,214		$	6,757		$	23,650		$	18,907
Facility unused commitment fee	294			77			890			240
Amortization of deferred financing costs	459			345			1,290			936

Total interest expense and credit facility fees	$	10,967		$	7,179		$	25,830		$	20,083
Cash paid for interest expense	$	7,402		$	6,377		$	20,855		$	18,796

Average principal debt outstanding	$	895,591		$	990,672		$	900,108		$	936,405
Weighted average interest rate	4.41		%	2.67		%	3.46		%	2.66		%

As of September 30, 2022 and December 31, 2021, the components of interest and credit facility fees payable were as follows:


	As of
	September 30, 2022			December 31, 2021
Interest expense payable	$	9,037		$	5,506
Unused commitment fees payable	283			70
Total interest expense and credit facility fees payable	$	9,320		$	5,576
Weighted average interest rate (1)	4.60		%	2.63		%

(1) Based on floating benchmark rates.

6. COMMITMENTS AND CONTINGENCIES

A summary of significant contractual payment obligations was as follows as of September 30, 2022 and December 31, 2021:


	As of
Payment Due by Period	September 30, 2022		December 31, 2021
Less than 1 Year	$	—	$	30,190
1-3 Years	—		—
3-5 Years	610,123		594,357
More than 5 Years	320,300		342,400
Total	$	930,423	$	966,947

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 consolidated financial statements as of September 30, 2022 and December 31, 2021 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 Value as of
	September 30, 2022		December 31, 2021
Unfunded delayed draw commitments	$	82,576	$	66,093
Unfunded revolving commitments	82,548		70,272
Total unfunded commitments	$	165,124	$	136,365

7. NET ASSETS

The Company has the authority to issue 200,000,000 shares of common stock, $0.01 per share par value.

For both the three and nine months ended September 30, 2022, the Company repurchased and extinguished 2,003,723 shares for $39,674, in connection with the tender offers as discussed below.

The following table summarizes capital activity during the three month period ended September 30, 2022:


	Common Stock			Capital in Excess of Par Value		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount
Balance, beginning of period	60,238,425	$	602	$	1,225,183	$	1,205	$	1,942	$	(36,015)	$	1,192,917
Common stock issued	2,274,320	23		45,145		—		—		—		45,168
Repurchase of common stock	(2,003,723)	(20)		(39,654)		—		—		—		(39,674)
Net investment income (loss)	—	—		—		31,254		—		—		31,254
Net realized gain (loss)	—	—		—		—		(4,532)		—		(4,532)
Net change in unrealized appreciation (depreciation) on investments	—	—		—		—		—		(873)		(873)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	—	—		—		—		—		7,718		7,718
Dividends declared	—	—		—		(29,700)		—		—		(29,700)

Balance, end of period	60,509,022	$	605	$	1,230,674	$	2,759	$	(2,590)	$	(29,170)	$	1,202,278

The following table summarizes capital activity during the nine month period ended September 30, 2022:



	Common Stock			Capital in Excess of Par Value		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount
Balance, beginning of period	57,005,057	$	570	$	1,160,819	$	2,212	$	3,795	$	(1,155)	$	1,166,241
Common stock issued	5,507,688	55		109,813		—		—		—		109,868
Repurchase of common stock	(2,003,723)	(20)		(39,654)		—		—		—		(39,674)
Net investment income (loss)	—	—		—		85,808		—		—		85,808
Net realized gain (loss)	—	—		—		—		(471)		—		(471)
Net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	—	—		—		—		—		(45,526)		(45,526)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	—	—		—		—		—		17,511		17,511
Dividends declared	—	—		—		(85,565)		(5,914)		—		(91,479)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP	—	—		(304)		304				—		—
Balance, end of period	60,509,022	$	605	$	1,230,674	$	2,759	$	(2,590)	$	(29,170)	$	1,202,278

The following table summarizes capital activity during the three month period ended September 30, 2021:


	Common Stock			Capital in Excess of Par Value		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount
Balance, beginning of period	51,490,006	$	515	$	1,045,874	$	2,349	$	(5,022)	$	(2,904)	$	1,040,812
Common stock issued	2,405,003	24		49,976		—		—		—		50,000


Net investment income (loss)	—	—		—		25,780		—		—		25,780
Net realized gain (loss)	—	—		—		—		4,502		—		4,502
Net change in unrealized appreciation (depreciation) on investments	—	—		—		—		—		2,256		2,256

Dividends declared	—	—		—		(26,409)		—		—		(26,409)

Balance, end of period	53,895,009	$	539	$	1,095,850	$	1,720	$	(520)	$	(648)	$	1,096,941

The following table summarizes capital activity during the nine month period ended September 30, 2021:



	Common Stock			Capital in Excess of Par Value		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount
Balance, beginning of period	49,062,820	$	491	$	996,001	$	1,117	$	(6,891)	$	(27,582)	$	963,136
Common stock issued	4,832,189	48		99,952		—		—		—		100,000


Net investment income (loss)	—	—		—		75,174		—		—		75,174
Net realized gain (loss)	—	—		—		—		6,371		—		6,371
Net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	—	—		—		—		—		26,934		26,934

Dividends declared	—	—		—		(74,674)		—		—		(74,674)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP	—	—		(103)		103				—		—
Balance, end of period	53,895,009	$	539	$	1,095,850	$	1,720	$	(520)	$	(648)	$	1,096,941

The following table summarizes total shares of common stock issued and proceeds related to capital activity during the nine month period ended September 30, 2022.



	Shares Issued	Proceeds
June 30, 2022	3,233,368	$	64,700
September 28, 2022	2,274,320	45,168


Total	5,507,688	$	109,868

Subscription and share issuance transactions during the nine month period ended September 30, 2022 were executed at an offering price at a premium to net asset value in order to effect a reallocation of organizational costs to subsequent investors. For the nine month period ended September 30, 2022, there was no increase to net asset value per share resulting from such subscription.

The following table summarizes total shares of common stock issued and proceeds related to capital activity during the nine month period ended September 30, 2021



	Shares Issued	Proceeds
June 29, 2021	2,427,186	$	50,000
September 22, 2021	2,405,003	50,000


Total	4,832,189	$	100,000

Subscription and share issuance transactions during the nine month period ended September 30, 2021 were executed at an offering price at a premium to net asset value in order to effect a reallocation of organizational costs to subsequent investors. For the nine month period ended September 30, 2021, there was no increase to net asset value per share resulting from such subscription.

The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per common share were calculated by dividing net increase (decrease) in net assets resulting from operations attributable to the Company by the weighted-average number of common shares outstanding for the period.

Basic and diluted earnings per common share were as follows:


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net increase (decrease) in net assets resulting from operations	$	33,567	$	32,538	$	57,322	$	108,479
Weighted-average common shares outstanding	58,896,914		51,725,278		57,654,450		49,977,840
Basic and diluted earnings per common share	$	0.57	$	0.63	$	0.99	$	2.17

The following table summarizes the Company’s dividends declared during the two most recent fiscal years and the current fiscal year-to-date:

Date Declared

Record Date

Payment Date

Per Share Amount

March 4, 2020

April 17, 2020

0.53

June 30, 2020

July 17, 2020

0.45

September 28, 2020

October 16, 2020

0.46

December 14, 2020

January 15, 2021

0.50

March 30, 2021

April 16, 2021

0.48

June 29, 2021

July 16, 2021

0.48

September 29, 2021

October 15, 2021

0.49

December 20, 2021

December 30, 2021

January 18, 2022

0.48

March 25, 2022

April 18, 2022

0.50

March 25, 2022

April 18, 2022

0.10

(1)

June 15, 2022

July 19, 2022

0.48

September 14, 2022

October 19, 2022

0.51

(1) Represents a capital gain distribution of $0.103745 per share.

Special Tender Offer

On April 5, 2022, CDL Tender Fund 2022-1, L.P. (the “Purchaser”) launched a tender offer (the “Special Tender Offer”) to purchase up to $100,000,000 in aggregate amount of shares of the Company’s common stock at a purchase price of $20.13 per share (the “Special Tender Offer Purchase Price”), which represented the net asset value per share of the Company’s common stock as determined by the Company on March 29, 2022. The Special Tender Offer expired on May 3, 2022. The Purchaser accepted for purchase $100,000,000 in aggregate amount of the Company’s common stock at the Special Tender Offer Purchase Price, which represented approximately 8.71% of the total number of the Company’s outstanding shares of common stock as of May 6, 2022. As of the date of the Special Tender Offer, the Purchaser was wholly owned by its limited partners, the Investment Adviser, Cliffwater Corporate Lending Fund, a Delaware statutory trust, and AlpInvest Indigo I CI-A, L.P., a Delaware limited partnership which is advised by an affiliate of the Investment Adviser. These limited partners contributed approximately $28.6 million, $50.0 million and $21.4 million, respectively, in cash to the Purchaser to fund the purchase of the shares. Effective as of June 15, 2022, the Investment Adviser assigned its entire interest in the Purchaser to a third party for $28.4 million and as of that date no longer owns shares indirectly through the Purchaser. In August 2022, the Board of Directors of the Company approved the repurchase of 8,547 shares of the Company, which had been tendered by an investor in the Special Tender Offer. These shares were not repurchased in the Special Tender Offer and instead were repurchased by the Company at a price per share of $19.80, or $170.

Quarterly Tender Offers

In the second quarter of 2022, the Company commenced a quarterly liquidity program pursuant to which the Company expects to conduct quarterly tender offers (the “Quarterly Tender Offer”) to repurchase up to 3.5% of the number of shares of its common stock outstanding as of the end of the calendar quarter immediately prior to the quarter in which the Quarterly Tender Offer is conducted, at a per share price based on the net asset value per share as of the last date of the quarter in which the Quarterly Tender Offer is conducted. However, the Board of Directors has the discretion to determine whether or not the Company will purchase common stock from stockholders, and the Company is not required to conduct tender offers on a quarterly basis or at all. If during any consecutive 24-month period, the Company does not engage in a quarterly tender offer in which the Company accepts for purchase 100% of properly tendered shares (a “Qualifying Tender”), the Company will not make commitments for new portfolio investments (excluding short-term cash management investments under 30 days in duration) and will reserve available assets to satisfy future tender requests until a Qualifying Tender occurs, subject to the Company continuing to use available funds and liquidity for certain purposes.

On August 12, 2022, the Company completed a Quarterly Tender Offer which commenced on June 30, 2022 (the “Q2 2022 Tender Offer”). In the Q2 2022 Tender Offer, 1,995,176 shares were repurchased for a purchase price of $19.80 per share, or $39,504.

On September 29, 2022, the Company commenced a Quarterly Tender Offer (the “Q3 2022 Tender Offer”) for up to 2,108,344 shares tendered on or prior to October 27, 2022. Stockholders whose tendered shares in the Q3 2022 Tender Offer were purchased received, at the expiration of the Q3 2022 Tender Offer, a non-interest bearing, non-transferable promissory note entitling such stockholders to an amount in cash equal to the number of shares accepted for purchase, multiplied by the net asset value per share as of September 30, 2022 (the “Q3 2022 Purchase Price”), reduced by an early repurchase fee of 2.0% of the Q3 2022 Purchase Price, if applicable. The Q3 2022 Purchase Price was $19.87 per share.

8. CONSOLIDATED FINANCIAL HIGHLIGHTS

The following is a schedule of consolidated financial highlights for the nine month periods ended September 30, 2022 and 2021:


	For the nine month periods ended
	September 30, 2022			September 30, 2021
Per Share Data:
Net asset value per share, beginning of period	$	20.46		$	19.63
Net investment income (loss) (1)	1.49			1.50
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	(0.50)			0.67
Net increase (decrease) in net assets resulting from operations	0.99			2.17
Dividends declared (2)	(1.59)			(1.45)
Other	0.01			—

Net asset value per share, end of period	$	19.87		$	20.35
Number of shares outstanding, end of period	60,509,022			53,895,009
Total return based on net asset value (3)	4.89		%	11.05		%
Net assets, end of period	$	1,202,278		$	1,096,941
Ratio to average net assets (4):
Expenses before incentive fees	3.45		%	3.26		%
Expenses after incentive fees	4.57		%	4.56		%
Net investment income (loss)	7.29		%	7.37		%
Interest expense and credit facility fees	2.19		%	1.97		%
Ratios/Supplemental Data:
Asset coverage, end of period	229.22		%	206.93		%
Portfolio turnover	20.43		%	17.53		%
Total committed capital, end of period	$	1,232,806		$	1,227,312
Ratio of total contributed capital to total committed capital, end of period	100.00		%	89.43		%
Weighted-average shares outstanding	57,654,450			49,977,840

(1)Net investment income (loss) per share was calculated as net investment income (loss) for the period divided by the weighted average number of shares outstanding for the period.

(2)Dividends declared per share was calculated as the sum of dividends declared during the period divided by the number of shares outstanding at the date of the relevant transactions (refer to Note 7, 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 share during the period plus the declared dividends divided by the beginning net asset value for the period.

(4)These ratios to average net assets have not been annualized.

9. 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 September 30, 2022 and December 31, 2021, 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.

10. TAX

The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of September 30, 2022 and September 30, 2021.

In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. The Company elected a tax year-end of June 30.

The Company's taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income earned in each period and carried forward for distribution in the following period may be different than this estimate. The tax character of the distributions paid for the period from July 1, 2022 to September 30, 2022 and for the period from July 1, 2021 to September 30, 2021 was as follows:


	For the period from July 1, 2022 to September 30, 2022		For the period from July 1, 2021 to September 30, 2021
Ordinary income	$	29,700	$	26,409
Long-term capital gains	$	—	$	—
Tax return of capital	—		—

11. 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.

Upon expiration of the Q3 2022 Tender Offer, the Company accepted for purchase 2,108,344 shares of common stock. See Note 7, Net Assets, to these consolidated financial statements for additional information regarding the Q3 2022 Tender Offer.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollar amounts in thousands, except per share data, unless otherwise indicated)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Form 10-Q, 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 Credit Solutions, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CARS” 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-Q 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 as a result of the COVID-19 pandemic;

•the return or impact of current and future investments;

•the general economy and its impact on the industries in which we invest, and the impact of the COVID-19 pandemic thereon;

•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, including from the discontinuation of LIBOR and the implementation of alternatives to LIBOR;

•the valuation of our investments in portfolio companies, particularly those having no liquid trading market, and the impact of the COVID-19 pandemic thereon;

•the impact of supply chain constraints on our portfolio companies and the global economy;

•the elevating levels 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;

•our ability to recover unrealized losses;

•market conditions and our ability to access alternative debt markets and additional debt and equity capital, and the impact of the COVID-19 pandemic thereon;

•our contractual arrangements and relationships with third parties;

•uncertainty surrounding the financial stability of the United States, Europe and China;

•the social, geopolitical, financial, trade and legal implications of the exit of the United Kingdom from the European Union, or Brexit;

•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;

•our intention to conduct recurring quarterly tender offers for a limited number of shares of our common stock, subject to market and other conditions (the "Quarterly Tender Offer");

•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, and the impact of the COVID-19 pandemic thereon;

•the ability to consummate acquisitions;

•the ability of Carlyle Global Credit Investment Management L.L.C. (the "Investment Adviser") to locate suitable investments for us and to monitor and administer our investments;

•currency fluctuations could adversely affect 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 impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;

•the ability of The Carlyle Group Employee Co., L.L.C. to attract and retain highly talented professionals that can provide services to our Investment Adviser and Carlyle Global Credit Administration L.L.C. (the "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”).

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 statements for any reason, including the factors set forth in “Risk Factors” in Part I, Item 1A of our annual report for the year ended December 31, 2021 (our “2021 Form 10-K”).

We have based the forward-looking statements included in this Form 10-Q on information available to us on the date of this Form 10-Q, 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, quarterly reports on Form 10-Q and current reports on Form 8-K.

OVERVIEW

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1 of this Form 10-Q “Financial Statements.” 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 our 2021 Form 10-K. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” in our 2021 Form 10-K and “Cautionary Statements Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-Q.

We were incorporated on February 10, 2017 as a Maryland corporation with the name Carlyle Private Credit, Inc. Our name was changed to TCG BDC II, Inc. on March 3, 2017, and was changed again to Carlyle Credit Solutions, Inc. on March 29, 2022. We are structured as an externally managed, non-diversified closed-end investment company. On September 11, 2017, we completed our initial closing of capital commitments (together with subsequent closings, the “Initial Private Offering”) and subsequently commenced substantial investment operations. On January 21, 2022, stockholders approved our conversion from a finite life private BDC with no interim liquidity to a private BDC with a perpetual life and a regular quarterly liquidity program. The conversion extends indefinitely our finite term and finite investment period and permits us to accept new subscriptions for shares of our common stock in a new continuous private offering (the “New Continuous Offering”). We conducted the Initial Private Offering and are conducting the New Continuous Offering of our shares of common stock to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended. 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"). We have elected to be treated, and intend to continue to comply with the requirements to qualify annually, as a RIC under Subchapter M of the of the Code. We have an indefinite term.

Our investment objective is to generate attractive risk adjusted returns and current income primarily by investing in senior secured term loans to U.S. middle market companies in which private equity sponsors hold, directly or indirectly, a financial interest in the form of debt and/or equity. Our core investment strategy focuses on lending to U.S. middle market companies supported by financial sponsors, which we define as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which we believe is a useful proxy for cash flow. This core strategy is supplemented with our complementary specialty lending strategy, which takes advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. Generally, we expect our

core strategy and our complementary strategy to be 70-85% and 15-30%, respectively, of the portfolio. 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 investments that are typically higher yielding than Middle Market Senior Loans (which may include unsecured debt, mezzanine debt and investments in equities).

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 (that is, below BBB- or Baa3, which is often referred to as "junk"). Exposure to below investment grade instruments involves certain risks, including speculation with respect to the borrower's capacity to pay interest and repay principal.

We are externally managed by our Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Our Administrator provides the administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle. As of September 30, 2022, our Investment Adviser’s investment team included a team of more than 180 investment professionals across the Carlyle Global Credit segment. Subject to certain delegated authorities, our Investment Adviser’s investment committee (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 comprises several of the most senior credit professionals within the Carlyle Global Credit segment, with backgrounds and expertise across multiple asset classes with significant industry experience and tenure. 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 a screening committee. In addition, our Investment Adviser and its investment team 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 and resources of Carlyle, including our Investment Adviser and its affiliates.

KEY COMPONENTS OF OUR CONSOLIDATED RESULTS OF OPERATIONS

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of investments we make.

Revenue

We generate revenue 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 LIBOR. 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. In addition, 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 also reflects the proceeds of sales of securities. We may also generate revenue 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 the payment of: (i) investment advisory fees, including management fees and incentive fees, to our Investment Adviser pursuant to the Amended and Restated Investment Advisory Agreement between us and our Investment Adviser; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under an administration agreement between us and our Administrator (the “Administration Agreement”); (iii) debt service and other costs of borrowings or other financing arrangements; and (iv) other operating expenses as detailed below:

•administration fees payable under our sub-administration agreements, including related expenses;

•the costs of any other 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 our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;

•certain costs and expenses relating to distributions paid on our shares;

•the allocated costs incurred by our 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;

•costs of hedging;

•commissions and other compensation payable to brokers or dealers;

•federal and state registration fees;

•any U.S. federal, state and local taxes, including any excise 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 registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;

•the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;

•the costs of specialty and custom software for monitoring risk, compliance and overall portfolio, including any development costs incurred prior to the filing of our election to be regulated as a BDC;

•our fidelity bond;

•directors and officers/errors and omissions 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.

We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.

PORTFOLIO AND INVESTMENT ACTIVITY

Below is a summary of certain characteristics of our investment portfolio as of September 30, 2022 and December 31, 2021.


	As of
	September 30, 2022		December 31, 2021
Number of investments	148		126
Number of portfolio companies	113		97
Number of industries	26		25

Percentage of total investment fair value:


First Lien Debt	84.1	%	80.9	%
Second Lien Debt	12.5	%	16.3	%
Total secured debt	96.6	%	97.2	%
Equity investments	3.4	%	2.8	%
Percentage of debt investment fair value:
Floating rate (1)	97.8	%	97.6	%
Fixed interest rate	2.2	%	2.4	%

(1) Primarily subject to interest rate floors.

Our investment activity for the three month periods ended September 30, 2022 and 2021 is presented below (information presented herein is at amortized cost unless otherwise indicated):


	For the three month periods ended
	September 30, 2022			September 30, 2021
Investments:
Total investments, beginning of period	$	2,032,235		$	1,922,292
New investments purchased	242,079			221,186
Net accretion of discount on investments	2,878			2,498
Net realized gain (loss) on investments	(4,341)			4,546
Investments sold or repaid	(133,849)			(73,278)
Total Investments, end of period	$	2,139,002		$	2,077,244
Principal amount of investments funded:


First Lien Debt	$	234,383		$	186,979
Second Lien Debt	285			77,457
Equity Investments	13,861			432
Total	$	248,529		$	264,868
Principal amount of investments sold or repaid:


First Lien Debt	$	(115,223)		$	(67,258)
Second Lien Debt	(24,500)			(39,243)
Equity Investments	—			(1,115)
Total	$	(139,723)		$	(107,616)
Number of new funded investments	17			15
Average amount of new funded investments	$	17,129		$	10,319
Percentage of new funded debt investments at floating interest rates	100		%	96		%
Percentage of new funded debt investments at fixed interest rates	—		%	4		%

As of September 30, 2022 and December 31, 2021, investments consisted of the following:


	September 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value


First Lien Debt	$	1,803,582	$	1,759,621	$	1,683,550	$	1,674,715
Second Lien Debt	269,017		260,840		338,076		337,899
Equity Investments	66,403		72,123		49,349		57,469
Total	$	2,139,002	$	2,092,584	$	2,070,975	$	2,070,083

The weighted average yields (1) for our first and second lien debt, based on the amortized cost and fair value as of September 30, 2022 and December 31, 2021, were as follows:


	September 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value


First Lien Debt Total	9.71	%	9.95	%	7.71	%	7.75	%
Second Lien Debt	11.17	%	11.52	%	9.11	%	9.12	%
First and Second Lien Debt Total	9.90	%	10.16	%	7.95	%	7.98	%

(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of September 30, 2022 and December 31, 2021. Weighted average yield on debt and income producing securities 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 on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities 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 on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first and second lien debt investments as measured on an amortized cost basis increased from 7.95% to 9.90% from December 31, 2021 to September 30, 2022.

As of both September 30, 2022 and December 31, 2021, one of our debt investments was on non-accrual status. The remaining first and second lien debt investments were performing and current on their interest payments as of September 30, 2022 and December 31, 2021. The following table summarizes the fair value of our performing and non-accrual/non-performing investments as of September 30, 2022 and December 31, 2021:


	September 30, 2022				December 31, 2021
	Fair Value		Percentage		Fair Value		Percentage
Performing	$	2,086,361	99.7	%	$	2,059,247	99.5	%
Non-accrual (1)	6,223		0.3	%	10,836		0.5	%
Total	$	2,092,584	100.0	%	$	2,070,083	100.0	%

(1) For information regarding our non-accrual policy, see Note 2, Significant Accounting Policies, to our consolidated financial statements in Part I, Item 1 of this Form 10-Q.

As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”. Pursuant to these risk policies, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each debt investment in our portfolio. Key drivers of internal risk ratings include financial metrics, financial covenants, liquidity and enterprise value coverage.

Internal Risk Ratings Definitions


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 bases 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.

Our Investment Adviser monitors and, when appropriate, changes the risk ratings assigned to each debt investment in our portfolio. Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The below table summarizes the Internal Risk Ratings as of September 30, 2022 and December 31, 2021.


	September 30, 2022				December 31, 2021
	Fair Value		% of Fair Value		Fair Value		% of Fair Value
(dollar amounts in millions)
Internal Risk Rating 1	$	85.4	4.2	%	$	39.6	2.0	%
Internal Risk Rating 2	1,696.5		84.0		1,671.7		83.1
Internal Risk Rating 3	232.4		11.5		290.5		14.4
Internal Risk Rating 4	6.2		0.3		—		—
Internal Risk Rating 5	—		—		10.8		0.5
Total	$	2,020.5	100.0	%	$	2,012.6	100.0	%

As of both September 30, 2022 and December 31, 2021, the weighted average Internal Risk Rating of our debt investment portfolio was 2.1. As of September 30, 2022 and December 31, 2021, one and one of our debt investments, with an aggregate fair value of $6.2 million and $10.8 million, respectively, was assigned an Internal Risk Rating of 4.

See the Consolidated Schedules of Investments as of September 30, 2022 and December 31, 2021 in our consolidated financial statements in Part I, Item 1 of this Form 10-Q for more information on our investments, including a list of companies and type and amount of investments.

CONSOLIDATED RESULTS OF OPERATIONS

For the three and nine month periods ended September 30, 2022 and 2021

The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.

Investment Income

Investment income for the three and nine month periods ended September 30, 2022 and 2021 was as follows:


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
First Lien Debt	$	42,727	$	34,796	$	113,579	$	101,401
Second Lien Debt	7,250		7,273		22,011		19,362
Equity Investments	1,558		—		4,026		906
Cash	—		1		—		3
Total investment income	$	51,535	$	42,070	$	139,616	$	121,672

The increase in investment income for the three month and nine month periods ended September 30, 2022 from the comparable periods in 2021 was primarily driven by a higher average loan balance and higher weighted average interest rates. The size of our portfolio increased to $2,139,002 as of September 30, 2022 from $2,077,244 as of September 30, 2021 at amortized cost. As of September 30, 2022, the weighted average yield of our first and second lien debt investments increased to 9.90% from 7.95% as of September 30, 2021, on amortized cost primarily due to higher benchmark rates.

Interest income on our first and second lien debt investments is 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 September 30, 2022, 1 first lien debt investment was on non-accrual status. The fair value of the debt investment on non-accrual status was $6,223, which represents approximately 0.3% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments. As of September 30, 2021, 1 first lien debt investment was on non-accrual status. The fair value of the debt investment on non-accrual status was $10,078, which represents approximately 0.5% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments.

Net investment income for the three and nine month periods ended September 30, 2022 and 2021 was as follows:


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Total investment income	$	51,535	$	42,070	$	139,616	$	121,672
Total expenses	20,281		16,290		53,808		46,498
Net investment income (loss)	$	31,254	$	25,780	$	85,808	$	75,174

Expenses

Expenses for the three and nine month periods ended September 30, 2022 and 2021 comprised the following:


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021


Management fees	$	3,020	$	3,240	8,847		9,502
Net investment income incentive fees	4,461		4,559		13,184		13,287

Professional fees	610		479		2,649		1,317
Administrative service fees	331		275		1,050		598
Interest expense	10,214		6,757		23,650		18,907
Credit facility fees	753		422		2,180		1,176
Directors’ fees and expenses	98		96		300		237
Other general and administrative	794		462		1,948		1,374
Excise tax expense	—		—		—		100
Total expenses	$	20,281	$	16,290	$	53,808	$	46,498

Interest expense and credit facility fees for the three and nine month periods ended September 30, 2022 and 2021 comprised the following:


	For the three month periods ended						For the nine month periods ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Interest expense	$	10,214		$	6,757		$	23,650		$	18,907
Facility unused commitment fee	294			77			890			240
Amortization of deferred financing costs	459			345			1,290			936

Total interest expense and credit facility fees	$	10,967		$	7,179		$	25,830		$	20,083
Cash paid for interest expense	$	7,402		$	6,377		$	20,855		$	18,796

Average principal debt outstanding	$	895,591		$	990,672		$	900,108		$	936,405
Average interest rate	4.41		%	2.67		%	3.46		%	2.66		%

The increase in interest expense for the three month and nine month periods ended September 30, 2022 compared to the comparable periods in 2021 was driven primarily by higher weighted average interest rates due to higher benchmark rates.

Below is a summary of the base management fees and incentive fees during the three and nine month periods ended September 30, 2022 and 2021:


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Base management fees	$	3,020	$	3,240	$	8,847	$	9,502
Incentive fees on pre-incentive fee net investment income	4,461		4,559		13,184		13,287
Realized capital gains incentive fees	—		—		—		—
Accrued capital gains incentive fees	—		—		—		—
Total capital gains incentive fees	—		—		—		—
Total incentive fees	4,461		4,559		13,184		13,287
Total base management fees and incentive fees	$	7,481	$	7,799	$	22,031	$	22,789

The decrease in management fees and incentive fees for the three month and nine month periods ended September 30, 2022 from the comparable periods in 2021 was driven by a reduction in our management fee and incentive fee rates. 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. See Note 4, Related Party Transactions, to the consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information on the incentive and 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, sub-administrative fees and other costs.

Net Change in Unrealized Appreciation (Depreciation) on Investments

During the three month period ended September 30, 2022, we recorded realized gain of approximately $318 on 1 investment and realized loss of approximately $4,659 on 1 investment. We recorded unrealized appreciation on 55 investments totaling approximately $16,336 and unrealized depreciation on 92 investments of approximately $17,209. During the three month period ended September 30, 2021, we recorded realized gain of approximately $4,546 on 2 investments and no realized loss. We recorded unrealized appreciation on 60 investments totaling approximately $10,514 and unrealized depreciation on 65 investments of approximately $11,444.

During the nine month period ended September 30, 2022, we recorded realized gain of approximately $5,571 on 8 investments and realized loss of approximately $5,626 on 3 investments. We recorded unrealized appreciation on 116 investments totaling approximately $27,237 and unrealized depreciation on 287 investments of approximately $72,763. During the nine month period ended September 30, 2021, we recorded realized gain of approximately $6,456 on 8 investments and no realized loss. We recorded unrealized appreciation on 213 investments totaling approximately $47,431 and unrealized depreciation on 155 investments of approximately $24,990.

Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the three and nine month periods ended September 30, 2022 and 2021 were as follows:


	For the three month periods ended				For the nine month periods ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net realized gain (loss) on investments	$	(4,341)	$	4,546	$	(55)	$	6,456
Net change in unrealized appreciation (depreciation) on investments	(873)		(930)		(45,526)		22,441
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	$	(5,214)	$	3,616	$	(45,581)	$	28,897

Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three and nine month periods ended September 30, 2022 and 2021 were as follows:


	For the three month periods ended								For the nine month periods ended
	September 30, 2022				September 30, 2021				September 30, 2022				September 30, 2021
	Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)
First Lien Debt	$	318	$	(3,813)	$	—	$	(1,186)	$	3,820	(35,126)		$	1,229	$	6,387
Second Lien Debt	(4,659)		3,572		—		(496)		(5,615)		(8,000)		—		12,813
Equity Investments	—		(632)		4,546		752		1,740		(2,400)		5,227		3,241
Total	$	(4,341)	$	(873)	$	4,546	$	(930)	$	(55)	$	(45,526)	$	6,456	$	22,441

Net change in unrealized depreciation in our investments for the three and nine month periods ended September 30, 2022 as compared to the comparable period in 2021 was primarily due to negative impact of widening market yields. Net change in unrealized appreciation (depreciation) is also 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.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Credit Facilities, as well as 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, the repurchase of our shares through the Quarterly Tender Offer, and for other general corporate purposes. We believe our current cash position, available capacity on our revolving credit facilities 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.

We entered into a senior secured revolving credit facility with a lender on October 3, 2017, which was subsequently amended on March 14, 2018, November 16, 2018, May 12, 2020 and October 2, 2020 (as amended, the “Subscription Facility”). As of September 30, 2022, the maximum principal amount of the Subscription Facility was $10,000. The maximum principal amount is subject to availability under the Subscription Facility, which is based on certain of the Company's unfunded investor equity capital commitments, and restrictions imposed on borrowings under the Investment Company Act. The Subscription Facility has a maturity date of October 3, 2022. The Company may borrow amounts in U.S. Dollars or certain

other permitted currencies. Borrowings under the Subscription Facility bear interest currently at LIBOR plus an applicable spread of 1.95% per year, subject to a 0.50% floor on LIBOR. The Company is also required to pay an undrawn commitment fee of 0.25% per year. Subject to certain exceptions, the Subscription Facility is secured by a first lien security interest in our equity investors’ unfunded capital commitments.

We entered into a senior secured revolving credit facility with a lender on April 1, 2019 (the “SPV Credit Facility”), which was subsequently amended on October 25, 2019, February 7, 2020, December 4, 2020, June 2, 2021, December 28, 2021, and March 28, 2022. As of September 30, 2022, the maximum principal amount of the SPV Credit Facility was $700,000, and is subject to availability under the SPV Credit Facility and restrictions imposed on borrowings under the Investment Company Act. The SPV Credit Facility has a maturity date of April 1, 2026 (April 1, 2025 prior to the March 2022 amendment), with one one-year extension option, subject to the SPV's and the lender's consent. The SPV may borrow amounts in U.S. Dollars or certain other permitted currencies. Borrowings under the SPV Credit Facility bear interest initially at SOFR (LIBOR prior to the March 2022 amendment) (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.50% per year with a step-up based on collateral coverage and asset mix (2.40% prior to the March 2022 amendment). The SPV also pays a fee of between 0.50% and 0.75% per year on undrawn amounts under the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The SPV Credit Facility is secured by a first lien security interest on substantially all of the assets of the SPV.

We entered into a senior secured revolving credit facility with a lender on May 13, 2020 (the “SPV2 Credit Facility”, together with the Subscription Facility and SPV Credit Facility, the "Credit Facilities"), which was subsequently amended on February 11, 2021, August 13, 2021, March 7, 2022, and September 20, 2022. The SPV2 Credit Facility provides for secured borrowings during the applicable revolving period up to a principal amount of $550,000, which was increased by $100,000 effective September 20, 2022, subject to availability under the SPV2 Credit Facility and restrictions imposed on borrowings under the Investment Company Act. The SPV2 Credit Facility has a revolving period through March 7, 2025 (May 13, 2023 prior to the March 2022 amendment), and a maturity date of March 7, 2030 (May 13, 2028 prior to the March 2022 amendment). Borrowings under the SPV2 Credit Facility bear interest initially at LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate plus 0.50%) plus 2.40% per year (2.66% prior to the March 2022 amendment). SPV2 is also required to pay an undrawn commitment fee of 0.25% per year. Payments under the SPV2 Credit Facility are made quarterly. The lenders have a security interest on substantially all of the assets of SPV2.

Although we believe that we, the SPV and SPV2 will remain in compliance, there are no assurances that we, the SPV and SPV2 will continue to comply with the covenants in the respective Credit Facilities, as applicable. Failure to comply with these covenants could result in a default under the Subscription Facility, the SPV Credit Facility and/or the SPV2 Credit Facility that, if we were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the respective facility, and thereby have a material adverse impact on our business, financial condition and results of operations. Moreover, to the extent that we cannot meet our financing obligations, we risk the loss of some or all of our assets to liquidation or sale to satisfy the obligations. In such an event, we may be forced to sell assets at significantly depressed prices due to market conditions or otherwise, which may result in losses.

For more information on the Credit Facilities, see Note 5, Borrowings, to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

As of September 30, 2022 and December 31, 2021, the Company had $64,963 and $65,838, respectively, in cash and cash equivalents. The Secured Borrowings consisted of the following as of September 30, 2022 and December 31, 2021:


	September 30, 2022
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)
Subscription Facility	$	10,000	$	—	$	10,000	$	—
SPV Credit Facility	700,000		610,123		89,877		46,626
SPV2 Credit Facility	550,000		320,300		229,700		111,410
Total	$	1,260,000	$	930,423	$	329,577	$	158,036


	December 31, 2021
	Total Facility		Borrowings Outstanding		Unused Portion (1)		Amount Available (2)
Subscription Facility	$	50,000	$	30,190	$	19,810	$	1,744
SPV Credit Facility	700,000		594,357		105,643		30,961
SPV2 Credit Facility	450,000		342,400		107,600		107,600
Total	$	1,200,000	$	966,947	$	233,053	$	140,305

(1)The unused portion is the amount upon which commitment fees are based.

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

Equity Activity

Shares issued and outstanding as of September 30, 2022 and December 31, 2021 were 60,509,022 and 57,005,057, respectively.

The following table summarizes activity in the number of shares of our common stock outstanding during the nine month periods ended September 30, 2022 and 2021:


	For the nine month periods ended
	September 30, 2022	September 30, 2021
Shares outstanding, beginning of period	57,005,057	49,062,820
Common stock issued	5,507,688	4,832,189
Repurchase of common stock	(2,003,723)	—
Shares outstanding, end of period	60,509,022	53,895,009

On April 5, 2022, CDL Tender Fund 2022-1, L.P. (the “Purchaser”) launched a tender offer (the “Special Tender Offer”) to purchase up to $100,000,000 in aggregate amount of shares of our common stock at a purchase price of $20.13 per share (the “Special Tender Offer Purchase Price”), which represented the net asset value per share of our common stock as determined by the Company on March 29, 2022. The Special Tender Offer expired on May 3, 2022. The Purchaser accepted for purchase $100,000,000 in aggregate amount of our common stock at the Special Tender Offer Purchase Price, which represented approximately 8.71% of the total number of our outstanding shares of common stock as of May 6, 2022. At the time of the Special Tender Offer, the Purchaser was wholly owned by its limited partners, the Investment Adviser, Cliffwater Corporate Lending Fund, a Delaware statutory trust, and AlpInvest Indigo I CI-A, L.P., a Delaware limited partnership which is advised by an affiliate of the Investment Adviser. These limited partners contributed approximately $28.6 million, $50.0 million and $21.4 million, respectively, in cash to the Purchaser to fund the purchase of the shares. Effective as of June 15, 2022, the Investment Adviser assigned its entire interest in the Purchaser to a third party for $28.4 million and as of that date no longer owns shares indirectly through the Purchaser. In August 2022, the Board of Directors of the Company approved the repurchase of 8,547 shares of the Company, which had been tendered by an investor in the Special Tender Offer. These shares were not repurchased in the Special Tender Offer and instead were repurchased by the Company at a price per share of $19.80, or $170.

On August 12, 2022, the Company completed a Quarterly Tender Offer which commenced on June 30, 2022 (the "Q2 2022 Tender Offer"). In the Q2 2022 Tender Offer, 1,995,176 shares were repurchased for a purchase price of $19.80 per share, or $39,504.

On September 29, 2022, the Company commenced a Quarterly Tender Offer (the “Q3 2022 Tender Offer”) for up to 2,108,344 shares tendered on or prior to October 28, 2022. Stockholders whose tendered shares in the Q3 2022 Tender Offer were purchased received, at the expiration of the Q3 2022 Tender Offer, a non-interest bearing, non-transferable promissory note entitling such stockholders to an amount in cash equal to the number of shares accepted for purchase, multiplied by the net asset value per share as of September 30, 2022 (the “Purchase Price”), reduced by an early repurchase fee of 2.0% of the Purchase Price, if applicable. The Purchase Price was $19.87 per share.

OFF BALANCE SHEET ARRANGEMENTS

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 in

these consolidated financial statements as of September 30, 2022 and December 31, 2021 included in Part I, Item 1 of this Form 10-Q for any such exposure.

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 the indicated dates:


	Par Value as of
	September 30, 2022		December 31, 2021
Unfunded delayed draw commitments	$	82,576	$	66,093
Unfunded revolving commitments	82,548		70,272
Total unfunded commitments	$	165,124	$	136,365

DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS

The following table summarizes our dividends declared during the two most recent fiscal years and the current fiscal year to date:

Date Declared

Record Date

Payment Date

Per Share Amount

2020

March 4, 2020

April 17, 2020

0.53

June 30, 2020

July 17, 2020

0.45

September 28, 2020

October 16, 2020

0.46

December 14, 2020

January 15, 2021

0.50

1.94

2021

March 30, 2021

April 16, 2021

0.48

June 29, 2021

July 16, 2021

0.48

September 29, 2021

October 15, 2021

0.49

December 20, 2021

December 30, 2021

January 18, 2022

0.48

Total

1.93

2022

March 25, 2022

April 18, 2022

0.50

March 25, 2022

April 18, 2022

0.10

(1)

June 15, 2022

July 19, 2022

0.48

September 14, 2022

October 19, 2022

0.51

Total

1.59

(1) Represents a capital gain distribution of $0.103745 per share.

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 note in Part I, Item 1 of this Form 10-Q and in Part II, Item 8 of the Company’s annual report on Form 10-K for the year ended December 31, 2021.

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 members of the Investment Adviser; (iii) the Board of Directors 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 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; (iv) if applicable, prior to September 8, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) reviewed the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) if applicable, prior to September 8, 2022, the Board of Directors discussed the valuation recommendations of the Audit Committee and determined the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

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.

For further information on 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 in Part I, Item 1 of this Form 10-Q.

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 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 Consolidated Statements of Operations in Part I, Item 1 of this Form 10-Q 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

Income Taxes

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 SPV and SPV 2 are disregarded entities for tax purposes and are consolidated with the tax return of the Company.

Item 3. 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, and our 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. 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 September 30, 2022, on a fair value basis, approximately 2.2% of our debt investments bear interest at a fixed rate and approximately 97.8% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors. Interest rates on the investments held within our portfolio of investments are typically based on floating LIBOR or SOFR, with many of these investments also having a reference rate floor. Additionally, our Credit Facilities are subject to floating interest rates and are typically paid based on floating LIBOR or SOFR rates.

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, held as of September 30, 2022 and December 31, 2021, 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 as of September 30, 2022 and December 31, 2021 and based on the terms of our Credit Facilities. Interest expense on our Credit Facilities is calculated using the interest rate as of September 30, 2022 and 2021, 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 impact significantly 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 September 30, 2022 and December 31, 2021, 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) and outstanding secured borrowings assuming no changes in our investment and borrowing structure:


	September 30, 2022						December 31, 2021
Basis Point Change	Interest Income		Interest Expense		Net Investment Income		Interest Income		Interest Expense		Net Investment Income
Up 300 basis points	$	61,609	$	(27,913)	$	33,696	$	46,242	$	(28,722)	$	17,520
Up 200 basis points	$	41,073	$	(18,608)	$	22,465	$	26,312	$	(19,024)	$	7,288
Up 100 basis points	$	20,536	$	(9,304)	$	11,232	$	6,396	$	(9,326)	$	(2,930)
Down 100 basis points	$	(19,700)	$	8,851	$	(10,849)	$	(178)	$	1,870	$	1,692
Down 200 basis points	$	(36,263)	$	17,488	$	(18,775)	$	(178)	$	1,870	$	1,692
Down 300 basis points	$	(41,798)	$	23,668	$	(18,130)	$	(178)	$	1,870	$	1,692

Item 4. 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 Securities Exchange Act of 1934, as amended (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.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the three month period ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The Company may become party to certain lawsuits in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. 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 9, Litigation, to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors.

In addition to the other information set forth within this Form 10-Q, consideration should be given to the information disclosed in “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Except as previously reported by the Company on a Current Report on Form 8-K, we did not sell any equity securities during the period covered in this report that were not registered under the Securities Act of 1933, as amended.

Share Repurchases

In the second quarter of 2022, we commenced a quarterly liquidity program pursuant to which we expect to conduct quarterly tender offers (the “Quarterly Tender Offer”) to repurchase up to 3.5% of the number of shares of our common stock outstanding as of the end of the calendar quarter immediately prior to the quarter in which the Quarterly Tender Offer is conducted, at a per share price based on the net asset value per share as of the last day of the quarter in which the Quarterly Tender Offer is conducted. However, the Board of Directors has the discretion to determine whether or not we will purchase common stock from stockholders, and we are not required to conduct tender offers on a quarterly basis or at all. If during any consecutive 24-month period, we do not engage in a quarterly tender offer in which we accept for purchase 100% of properly tendered shares (a “Qualifying Tender”), we will not make commitments for new portfolio investments (excluding short-term cash management investments under 30 days in duration) and will reserve available assets to satisfy future tender requests until a Qualifying Tender occurs, subject to our continuing to use available funds and liquidity for certain purposes.

During the three months ended September 30, 2022, we repurchased in July 2022, upon completion of our tender offer that commenced June 30, 2022, 1,995,176 shares for a purchase price of $19.80 per share, or $39,504. In August 2022, our Board of Directors approved the repurchase of 8,547 shares of our common stock from an investor that tendered such shares in the previously announced special tender offer. These shares were not repurchased in the special tender offer and were instead repurchased in August at a price per share of $19.80, or $170.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.


10.1						Fourth Amendment, dated as of September 20, 2022, to the Loan and Servicing Agreement among Carlyle Credit Solutions SPV 2 LLC, as borrower, the lenders from time to time party thereto, and U.S. Bank National Association as administrative agent.*†

31.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*

31.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

32.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

* Filed herewith

† Information in this exhibit (indicated by brackets) has been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

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 CREDIT SOLUTIONS, INC.

Dated: November 14, 2022	By	/s/ Thomas M. Hennigan
		Thomas M. Hennigan Chief Financial Officer (principal financial officer)

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TCG BDC II 10-Q2022 Q3 Quarterly report

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