Carlyle Secured Lending, Inc.

What they do

CGBD is a closed-end, non-diversified BDC that invests mainly in first lien senior secured loans (including unitranche) and second lien loans to U.S. middle-market companies with EBITDA of approximately $25 million or more, often backed by private equity sponsors. It is managed by Carlyle Global Credit Investment Management L.L.C., part of Carlyle's Global Credit platform, and seeks current income and some capital appreciation. A minority of assets may be in higher-yielding investments such as unsecured debt, subordinated debt, equities, and structured products. Since inception through June 30, 2026, CGBD has invested approximately $11.2 billion in aggregate principal amount of debt and equity investments before exits or repayments.

Revenue drivers

• First lien senior secured loans — Core of the portfolio, generating interest income; the largest asset class by fair value.
• Second lien senior secured loans — Higher-yielding secured debt that supplements first lien originations.
• Fee-free joint venture complex — Company is ramping this segment; management noted high-teens returns at both investment funds in Q2 2026.

Recent performance

For Q2 2026, net investment income was $0.35 per common share, with adjusted net investment income also $0.35 per share, fully covering the quarterly dividend. Net asset value per share fell 1.8% to $15.61 from $15.89 at March 31, 2026. Total investment fair value was $2.4 billion as of June 30, 2026. For fiscal 2025, net income was $70.0 million, diluted EPS was $1.01, and operating cash flow was negative $204.6 million. The company completed the CSL III merger on March 27, 2025, which affected cost basis and amortization calculations.

Strategy

CGBD aims to generate current income and capital appreciation by originating secured debt to sponsor-backed U.S. middle-market companies. The strategy leverages Carlyle's Global Credit platform for sourcing, underwriting, and risk monitoring, with a focus on capital preservation and long-term fundamental credit performance. Management plans to continue ramping the fee-free joint venture complex to achieve high-teens returns. The company also expects to take market share in direct lending by leveraging the OneCarlyle platform, while maintaining stable income and consistent credit performance.

Risks

• Credit risk on below-investment-grade loans — Portfolio primarily consists of speculative-grade debt, exposing CGBD to elevated default and loss risk.
• Leverage and financing risk — Borrowings magnify gains and losses; long-term debt stood at $1.29 billion against $1.08 billion equity at June 30, 2026.
• Dependence on the Investment Adviser — CGBD relies on Carlyle Global Credit Investment Management for sourcing, due diligence, and monitoring; key person or conflicts could harm returns.
• Capital markets disruption and economic uncertainty — Disruptions, inflation, or recession could impair portfolio companies and reduce investment income.

Outlook

Management focuses on delivering stable income and consistent credit performance, while taking share in direct lending. They highlighted continued ramp of the fee-free joint venture complex with high-teens returns. Dividend declared for Q3 2026 is $0.35 per share, payable October 16, 2026. Forward-looking statements caution about risks including market conditions, interest rates, and geopolitical tensions.