CGBD - Earnings call 3 2023 | Carlyle Secured Lending, Inc.

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Operator

Hello, and welcome to the Carlyle Secured Lending, Inc.

Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. It is now my pleasure to introduce Daniel Hahn, Shareholder Relations.

Daniel Hahn

Good morning, and welcome to Carlyle Secured Lending's Third Quarter 2023 Earnings Call. call and is Financial Tom the Chief LeeKong, Officer. on Officer; Executive Hennigan, me this Aren morning our With our Chief press on the Last and Relations section of our filed website. Investor results, release our a our available night, presentation with are Form which of the we issued XX-Q

Form uncertainties, in Any we today Secured uncertainties hold be those question-and-answer call With identified and are and not replay to that, I'll will session and expectations being our to section management could performance. undue is to analysts at the cause risks and the forward-looking Following actual and of over webcast, and given time. materially made has will including on based update Carlyle These report be Aren. indicated. reliance XX-K. any from remarks for on forward-looking those our guarantee future statements should call website. available results risks involve current Factors today, inherent statements obligation do on placed This no a statements differ Lending institutional Risk our investors. turn any annual them. These on any a not

Aren LeeKong

joining. Good and you Dan. thank Thanks, all everyone, for morning,

has for As on I my X focus today's remarks custom, become will topics call.

of First, results. I'll quarter third overview provide an financial the

comments touch I'll earnings. quarter's the on investment few I'll on off activity a with Next, the portfolio with current finally, market And conclude and positioning. Starting environment.

on from of trend XX.X%, portfolio quarter the yield share, NII third of year per our XX% to from of LTM see the core increase last quarter, period. continuing upward annualized represents rate an prior is to continue and total In an from which the return and higher generated equity We benefit the base we environment. $X.XX

of of prior of supplemental, $X.XX, line Board Directors of dividend were dividend plus fourth $X.XX which the quarter. declared a $X.XX both a base consisting of in quarter Our total with

$X.XX our and or share, approximately XX, as as in of outpacing June movement Our XX period, positive was result X% of a dividend value, $XX.XX the net September earnings net from up per valuations. asset QX our

to of leaned credit credit to BSL the current which the space. majority number new being now the activity finance private we've quarter, during a BSL to the market the drove quarters, Turning LBO private included share pricing transactions. Refinancing credit favorably limited of during prior lenders. terms to seen to the to by take sponsors third number market, favor and of quarter the private Similar the high-profile refinanced transactions names from environment. continue and continued

money book spread selective However, repayments continue quarter's to are for to remain row. fifth we ROE. The of outpaced CSL's a improve third putting spread investments in new weighted on look average new to the the and of the credit quarter the quality our highly new in to accretive for work transactions and

U.S. X%, continue decreased We Carlyle leverage improve. platform turn originations Europe. from X On both LTVs and a approximately originations see new by the benefited average the to trend platform, basis, and LTVs on on for in respectively. One in in the year-to-date Originations leverage

improvements incremental the pipeline quarter, we deals, transactions. Outside in traditional As to last of and generated current structure provide with momentum our companies. continue that discussed cap and focused of see we Carlyle economics nonsponsored new allowed of add-on complementing the on in including portfolio sources flow, portfolio sponsor transaction are mining for transactions other existing for

to current like I'd spend on positioning. minutes Lastly, a few

senior The over investments portfolio are XX in comprised industries. Our XX% XXX average XXX portfolio diversified less is of our X% in is loans. companies secured and and remains company any across single in highly exposure than investments of

our credit overall up EBITDA quarter-over-quarter and origination. the with existing pleased be portfolio, and since revenue to continue performance We of with

EBITDA EBITDA portfolio increase in across margin persistent the meaningful we've despite pressures, at any end addition, quarter seen noncash Hennigan. hand was the The the borrowers our of to CFO, call importantly, million, median our Tom our not $XX generally core and stable. level In inflationary add-backs. over have the of now remained I'll

Thomas Hennigan

begin performance, a Aren. you, sheet earnings quarter positioning. I'll our review conclude of balance Today, I'll detail discuss then and our third with Thank on with portfolio

income a million, quarter per The investment share, of another investment As higher to prior also was $XX again, million interest for with in from on up inched Aren was impact balance. the rising prior of third continued million offset expenses strong Total due previewed, result the $XX rates. we third line prior the of base versus quarter, the was had Total earnings partially quarter quarter. The front. from quarter investment base positive for income total higher lower $X.XX modestly expense by average or $XX rates quarter. up

recent level above this materially is XXXX. earnings Importantly, earnings quarterly from of our

allows $X.XX an is the of which Similar quarter on environment. base $X.XX $X.XX for Our a quarters, comprised dividend fourth plus $X.XX bolster Directors of total macroeconomic the level increasingly Board of supplemental, to of XXXX this close complex shareholders payable the per record of per at to share. That's declared of dividends at a NAV prior level of to us share dividend the in December total business XX. face of a

BDC price same of XXX% mid-XXXX. At also we've represents share level the over nearly by September the the dividend the And attractive the XX% among time, is as base over dividend set. of dividend total highest grown the XX. on Our peer coverage base an since XX% of in yield

economics us curve stability the to deals. environments, believe a consistent continue that terms rates when based earnings, enable will and in current we've see forward the rate variety we the rates, a on payouts Despite the on $X.XX dividend for of disciplined In new approach conservative interest maintained combination of level we of plus rising attractive outlook normalize. in including forward rate

unrealized valuations NAV and increasing market and our net highly from realized each our in about names. paying improvement in gain tightening dividend dividend, with increase quarter. $X.XX of our confident $XX.XX was healthcare our total supplemental million in our So out to in QX the ability the spreads in continue valuations, meet exceeding and we $XX.XX part based valuations, in to and earnings $X remain resulted This comfortably per exceed share. aggregate dividends On some combined quarter, supported by for

to the Turning portfolio.

We continue across the book. stability quality credit overall in see to

there Importantly, nonaccruals no valuation in were watch as like continue financial additions were X this and and see or nonaccruals investments improvement effectively Total to no with quarter, positive rating migration performance Dermatology. new deals we risk to which flat quarter-over-quarter our X. list,

in companies of I'll our which environment remain facilities Bayside, leverage. finish and touching as PT. And on to credit overall weather and Aren our our most Pro formally very the inflationary by is strength Associates portfolio. of as and we portfolio confident continue the known noted, financing well,

sheet. be maintain to to leverage financial market in leverage Leverage right for ended lowest yields opportunistically turn current a down at attractive we're allows range continue the side us was intentionally running Aren. and deploy invest opportunities. our net the positioning I'll is the of investments the of terms With over and in capital about This the on to quarter lower to at We available X.XXx, back levels in balance quarter-over-quarter, year. environment. flexibility given Statutory it X.Xx conservatively that, new modestly over target the leverage the to lower and well positioned our end attractive

Aren LeeKong

management. floating to risk primarily our Thanks, approach investment companies Tom. prudent investments focused utilize overall the construction consistency to senior and on by mid backed We're secured making and would portfolio like underwriting, strategy. sponsors, reiterate conservative high-quality on approach rigorous rate by I finish the based of primarily U.S. our market. We in highlighting a disciplined

sourcing While lending for over I'd like focused the differentiated breadth operator changed. market take demand private questions. and opportunities not remain remains the the via to to our high, to your hand the scope Carlyle of on approach credit has now One And we call platform.

Operator

further [Operator Instructions] no questions. I'm showing

So with the hand for that, closing over Aren call back to any remarks. I'll CEO, LeeKong,

Aren LeeKong

to forward you you so and day. you scheduled Have in the all calls, much, for everyone. thank Thank great your Look a speaking support. to

Operator

thank and may Ladies participating. disconnect. gentlemen, concludes today's now This for and program, you you

Carlyle Secured Lending (CGBD) 8 Nov 232023 Q3 Earnings call transcript