Carlyle Secured Lending Reports Q1 2025 Financial Results with Decreased Net Investment Income

Carlyle Secured Lending, Inc. reported its financial results for the first quarter of 2025, revealing a net investment income of $21.6 million, or $0.40 per common share, a decrease from $28.4 million, or $0.56 per share, in the same period last year. The decline in net investment income was attributed to lower yields on the portfolio, driven by reduced base rates, lower new issue spreads, and an increase in non-accruals. Total investment income for the quarter was $54.9 million, down from $62.0 million year-over-year, primarily due to decreased dividend income and other income.

The company’s total assets increased significantly to $2.5 billion as of March 31, 2025, compared to $1.9 billion at the end of 2024. This growth was largely driven by the acquisition of Carlyle Secured Lending III (CSL III) and the Credit Fund II Purchase, which added $487.9 million and $198.8 million in investments, respectively. The total investments at fair value reached $2.2 billion, with non-accrual investments representing 2.2% of the portfolio based on cost and 1.6% based on fair value.

Carlyle Secured Lending also completed a merger with CSL III on March 27, 2025, which resulted in the issuance of approximately 18.9 million shares of common stock to former CSL III shareholders. Additionally, the company exchanged its cumulative convertible preferred stock for common stock, effectively eliminating the preferred shares from its capital structure. The company’s net asset value per share decreased to $16.63 from $16.80 at the end of 2024.

In terms of operational metrics, Carlyle Secured Lending reported a weighted average yield on total debt and income-producing investments of 10.9% as of March 31, 2025, down from 12.6% a year earlier. The company’s liquidity position improved significantly, with total liquidity of $858.5 million, including cash and undrawn debt capacity. The company’s asset coverage ratio stood at 196.3%, indicating compliance with regulatory requirements for business development companies.

Looking ahead, Carlyle Secured Lending anticipates continued challenges in the market, particularly regarding interest rates and portfolio performance. The company plans to leverage its recent acquisitions to enhance its investment strategy and maintain its focus on generating current income while managing risks associated with its portfolio.