Q4 2025 Carlyle Secured Lending Inc Earnings Call Transcript
Key Points
- Carlyle Secured Lending Inc (CGBD) achieved a record year of originations in 2025, deploying over $1.2 billion and closing over $7 billion of commitments at the platform level.
- The fourth quarter of 2025 was a record for CGBD with over $400 million of investment fundings, resulting in net investment activity of $193 million after accounting for repayments.
- CGBD's software portfolio has shown strong performance, with zero defaults on over $6 billion in commitments over the last five years.
- The formation of the new joint venture, Structured Credit Partners (SCP), is expected to increase diversification and portfolio yield at CGBD, with no management or incentive fees at the underlying CLOs or at the joint venture.
- CGBD repurchased $14 million of shares at a significant discount during the fourth quarter, resulting in $0.06 of accretion to NAV per share, and continued repurchases in the first quarter of 2026.
- CGBD was impacted by lower investment yields due to lower base rates and historically tight spreads on new originations.
- The net asset value per share decreased from $16.36 as of September 30 to $16.26 as of December 31.
- Total expenses increased in the fourth quarter, primarily due to higher interest expense and the acceleration of debt issuance costs.
- CGBD experienced a total aggregate realized and unrealized net loss of about $7 million or $0.09 per share for the quarter, primarily due to unrealized markdowns on select underperforming investments.
- There is an expectation of earnings trough in the first half of 2026 due to the impact of base rate cuts, although an increase in earnings is anticipated thereafter.
Hello, and thank you for standing by. Welcome to the Carlyle Secured Lending fourth quarter 2025 earnings conference call. (Operator Instructions) I would now like to hand the call over to Nishil Mehta. Sir, you may begin.
Good morning, and welcome to Carlyle Secured Lending's fourth quarter 2025 earnings call. I'm joined by Justin Plouffe, our former Chief Executive Officer; Alex Chi, CGBD's newly appointed Chief Executive Officer; and Tom Hennigan, our President and Chief Financial Officer.
Last night, we filed our Form 10-K and issued a press release with the presentation of our results, which are available on the investor relations section of our website. Following our remarks today, we will hold a question-and-answer session for analysts and institutional investors.
This call is being webcast, and a replay will be available on our website. Any forward-looking statements made today do not guarantee future performance, and any undue reliance should not be placed on them.
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