NEW YORK, NY – Carlyle Secured Lending, Inc. (NASDAQ:CGBD), a specialty finance company, has entered into an agreement to issue $300 million in 6.750% unsecured notes due February 18, 2030, according to a recent SEC filing. The company executed the Second Supplemental Indenture with U.S. Bank Trust Company, National Association, as successor trustee, which supplements the existing indenture agreements from November 20, 2023.
The notes were made available through a registered public offering and commenced interest accrual on Friday, October 18, 2024. Interest payments are scheduled semi-annually with the first payment due on February 18, 2025. Carlyle Secured Lending specified that the proceeds from the sale would be used to repay existing debt, including its senior secured revolving credit and senior unsecured notes due at the end of 2024, as well as to fund new investments and for other corporate purposes.
The notes rank pari passu with the company's other unsecured and unsubordinated debt. The Indenture includes covenants requiring the company to comply with certain sections of the Investment Company Act of 1940, as amended, and to provide financial information if it is no longer subject to SEC reporting requirements. In the event of a change of control coupled with a downgrade of the notes below investment grade by Fitch Ratings, Inc., or Moody's (NYSE:MCO) Investor Service, Carlyle Secured Lending must offer to repurchase the notes at par plus accrued interest.
In other recent news, Carlyle Secured Lending has reported a net investment income of $0.51 per share for Q2 2024, although the company has not disclosed its revenue for this period. The net asset value per common share experienced a slight decrease of 0.7% to $16.95, down from $17.07 in the previous quarter. Carlyle's investments' total fair value stood at $1.7 billion as of June 30, 2024. The company has declared a base quarterly common dividend of $0.40 per share, with an additional supplemental dividend of $0.07 per share.
In another significant development, Carlyle Secured Lending has announced a merger agreement with Carlyle Secured Lending III. This transaction is expected to close during the first fiscal quarter of 2025, given that all customary closing conditions are met. This merger is a part of the recent developments within the company. According to analysts, these events are a reflection of the company's dynamic approach to origination in a competitive market.
InvestingPro Insights
Carlyle Secured Lending's recent $300 million note issuance aligns with its financial strategy, as reflected in recent InvestingPro data. The company's market capitalization stands at $897.48 million, with a P/E ratio of 8.61, indicating a potentially attractive valuation relative to earnings. This issuance could be viewed in the context of CGBD's strong dividend policy, with InvestingPro Tips highlighting that the company "has raised its dividend for 3 consecutive years" and "pays a significant dividend to shareholders." The current dividend yield is an impressive 10.48%, which may appeal to income-focused investors.
The company's profitability over the last twelve months, as noted in another InvestingPro Tip, supports its ability to service this new debt. With liquid assets exceeding short-term obligations, CGBD appears well-positioned to manage its financial commitments, including this new issuance.
Investors considering CGBD should note that InvestingPro offers 8 additional tips for a more comprehensive analysis of the company's financial health and market position. These insights could be particularly valuable given the company's recent debt issuance and its potential impact on future financial performance.
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