Q2 2024 Carlyle Secured Lending Inc Earnings Call Transcript
Key Points
- Carlyle Secured Lending Inc (CGBD) generated net investment income of $0.51 per share, representing an annualized yield of over 12%.
- The proposed merger with Carlyle Secured Lending III is expected to increase scale and liquidity, potentially enhancing trading liquidity and institutional ownership.
- The merger will eliminate convertible preferred shares, avoiding 5% to 8% dilution for CGBD shareholders.
- Cost savings from the merger are estimated to be approximately $2.5 million annually, improving operational efficiencies.
- The transaction is expected to be accretive to both NAV per share and net investment income per share, benefiting shareholders in the long term.
- Net asset value decreased by $0.12 per share due to unrealized depreciation from some watchlist names.
- Nonaccruals increased to 1.8% of total investments at fair value, indicating some credit quality concerns.
- Total investment income for the second quarter was $58 million, slightly down from the prior quarter.
- The merger process requires shareholder approval, which could delay the transaction until Q1 2025.
- The market environment remains volatile, with pressure on spreads and covenants from borrowers.
Good day and thank you for standing by and welcome to the Carlyle Secured Lending second quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Nishil Mehta, Head of Shareholder Relations. Please go ahead.
Good morning, and welcome to Carlyle Secured Lending's conference call to discuss the earnings result for the second quarter 2024 and the proposed merger of CGBD with Carlyle Secured Lending III. I'm joined by Justin Plouffe, our Chief Executive Officer; and Tom Hennigan, our Chief Financial Officer.
This morning, we issued a press release with our presentation of our results, which are available on the Investor Relations section of our website. In addition to our quarterly earnings press release, we issued a release announcing that Carlyle Secured Lending has entered into a merger agreement with Carlyle Secured Lending III.
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