Carlyle Secured Lending, Inc. reported Net Investment Income (NII) of $0.51 per common share for the second quarter ended June 30, 2024. The company's Net Asset Value (NAV) per common share was $16.95 as of June 30, 2024, a decrease of 0.7% from $17.07 at March 31, 2024, primarily due to unrealized depreciation from certain watch list names. The Board of Directors declared a third-quarter 2024 dividend of $0.47 per share, consisting of a $0.40 base dividend and a $0.07 supplemental dividend.
CGBD announced a definitive merger agreement to acquire Carlyle Secured Lending III (CSL III), a strategic move expected to significantly increase the combined company's scale and liquidity. The transaction is anticipated to result in a market capitalization exceeding $1 billion and is structured to eliminate the dilutive overhang from Carlyle's convertible preferred stock by exchanging it at Net Asset Value. This exchange is projected to avoid 5% to 8% dilution for CGBD shareholders.
The merger is also expected to generate approximately $2.5 million in annual cost savings and improve the overall expense ratio. Carlyle has committed to covering up to $5 million in merger-related expenses, further demonstrating its support for the transaction. The pro forma combined company is expected to have over $2.5 billion in assets, with more than 90% senior secured exposure, enhancing portfolio diversification and risk metrics. Origination activity picked up in the second quarter of 2024, with sponsor-direct lending volumes reaching recent highs.
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