Carlyle Secured Lending Inc (CGBD) 2024 Q2 法說會逐字稿

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.

美好的一天，感謝您的耐心等待，歡迎參加凱雷擔保貸款 2024 年第二季收益電話會議。（操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Nishil Mehta, Head of Shareholder Relations. Please go ahead.

現在我想將會議交給今天的發言人、股東關係主管尼希爾·梅塔 (Nishil Mehta)。請繼續。

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.

早安，歡迎參加凱雷擔保貸款電話會議，討論 2024 年第二季的盈利結果以及 CGBD 與凱雷擔保貸款 III 的擬議合併。我們的執行長賈斯汀·普洛夫 (Justin Plouffe) 也加入了我的行列。以及我們的財務長 Tom Hennigan。

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.

今天早上，我們發布了一份新聞稿，介紹了我們的業績，可在我們網站的投資者關係部分查看。除了季度收益新聞稿外，我們還發布了一份新聞稿，宣布 Carlyle Secured Lending 已與 Carlyle Secured Lending III 簽訂合併協議。

Throughout today's call, Carlyle Secured Lending will be referred to as CGBD and Carlyle Secured Lending III will be referred to as CSL III. CGBD has posted a presentation outlining the transaction on the Investor Relations section of its website, which has also been filed with the SEC and which will be referenced on today's call. 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.

在今天的電話會議中，凱雷擔保貸款將被稱為 CGBD，凱雷擔保貸款 III 將被稱為 CSL III。CGBD 已在其網站的投資者關係部分發布了一份概述該交易的演示文稿，該演示文稿也已向 SEC 備案，並將在今天的電話會議中引用。在今天的演講之後，我們將為分析師和機構投資者舉行問答會。該電話會議正在網路直播，我們的網站上將提供重播。

Any forward-looking statements made today do not guarantee future performance and any undue reliance should not be placed on them. Today's conference call may include forward-looking statements reflecting our views with respect to, among other things, the timing or likelihood of the closing of the proposed merger, the expected synergies associated with the proposed merger, the ability to realize the anticipated benefits of the proposed merger, and our future operating results and financial performance.

今天做出的任何前瞻性陳述並不保證未來的業績，不應過度依賴它們。今天的電話會議可能包括前瞻性陳述，反映我們對擬議合併完成的時間或可能性、與擬議合併相關的預期協同效應、實現合併預期效益的能力等方面的看法。經營業績及財務業績。

These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our 10-K and our 10-Q, which will be filed for the quarter following the market closed today. These risks and uncertainties could cause actual results to differ materially from those indicated. CGBD assumes no obligation to update any forward-looking statements at any time.

這些聲明是基於目前管理層的預期，涉及固有風險和不確定性，包括我們的10-K 和10-Q 的風險因素部分中確定的風險和不確定性，這些風險和不確定性將在今天收市後的季度提交。這些風險和不確定性可能導致實際結果與所示結果有重大差異。CGBD 不承擔隨時更新任何前瞻性聲明的義務。

Please note that any additional information regarding the proposed merger and the solicitation of proxies in connection with matters requiring CGBD stockholder approval will be available in the proxy statement and prospectus that CGBD intends to file with the SEC in the coming weeks.

請注意，有關擬議合併以及與需要 CGBD 股東批准的事項相關的委託書徵集的任何其他資訊將在 CGBD 打算在未來幾週內向 SEC 提交的委託書和招股說明書中提供。

With that, I'll turn the call over to Justin, CGBD's Chief Executive Officer.

接下來，我會將電話轉給 CGBD 執行長賈斯汀 (Justin)。

Thanks Nishil, good morning everyone. Thank you all for joining. I'm Justin Plough, the CEO of the Carlyle BDCs and Deputy CIO of the Global Credit at Carlyle.

謝謝尼希爾，大家早安。感謝大家的加入。我是賈斯汀·普拉夫 (Justin Plough)，凱雷 BDC 執行長兼凱雷全球信貸部副首席資訊長。

On today's call, I will give an overview of our second quarter 2024 results and discuss our proposed merger between CGBD and CSL III, including the ways in which Carlyle will support the transaction to make it especially compelling for CGBD shareholders. I'll finish with a few comments on the quarter's investment activity and portfolio positioning before handing the call over to our CFO, Tom Hennigan.

在今天的電話會議上，我將概述我們 2024 年第二季度的業績，並討論我們擬議的 CGBD 和 CSL III 合併，包括凱雷將如何支持該交易，以使其對 CGBD 股東特別有吸引力。最後，我將對本季的投資活動和投資組合定位發表一些評論，然後將電話轉交給我們的財務長 Tom Hennigan。

In the second quarter, our financial performance continued to benefit from the higher base rate environment, with some headwinds from spread compression on new deals. Both of these trends were largely consistent with the broader direct lending market.

第二季度，我們的財務表現繼續受益於較高的基本利率環境，但新交易的利差壓縮帶來了一些阻力。這兩種趨勢與更廣泛的直接貸款市場基本一致。

During the quarter, we generated net investment income of $0.51 per share, which represents an annualized yield of more than 12% based on our [6/30] mark. Our Board of Directors declared a total third quarter dividend of $0.47 per share consisting of our base dividend of $0.40 plus $0.07 supplemental dividend.

本季度，我們產生了每股 0.51 美元的淨投資收益，根據我們的 [6/30] 標記，年化收益率超過 12%。我們的董事會宣布第三季股息總額為每股 0.47 美元，其中包括 0.40 美元的基本股息和 0.07 美元的補充股息。

Our net asset value as of June 30 was $16.95 per share, down $0.12, or approximately 0.7% from March 31 because of unrealized depreciation from some of our watchlist names.

截至 6 月 30 日，我們的淨資產值為每股 16.95 美元，較 3 月 31 日下降 0.12 美元，約 0.7%，原因是我們的一些觀察名單名稱未實現折舊。

Following another strong quarter, we are excited to announce that CGBD has entered into a merger agreement to acquire Carlyle Secured Lending III. We believe this transaction will deliver a number of strategic benefits, including an increase in scale and liquidity, elimination of the preferred stock held by Carlyle, a reduction in costs and an increase in operational efficiencies, and accretion to both earnings and NAV per share.

繼又一個強勁的季度之後，我們很高興地宣布 CGBD 已簽訂合併協議，收購 Carlyle Secured Lending III。我們相信，此次交易將帶來許多戰略利益，包括擴大規模和流動性、取消凱雷持有的優先股、降低成本和提高營運效率，以及增加每股收益和資產淨值。

Now, I'd like to dive a little bit deeper into each attribute that this merger brings.

現在，我想更深入地探討這次合併帶來的每個屬性。

First, scale and liquidity. With an anticipated market capitalization of over $1 billion as a combined company, we expect this transaction to provide increased scale and liquidity to shareholders, creating potential for increased institutional ownership, a broader investor base, and enhanced trading liquidity.

第一，規模和流動性。合併後的公司預計市值將超過 10 億美元，我們預計此交易將為股東提供更大的規模和流動性，為增加機構所有權、擴大投資者基礎和增強交易流動性創造潛力。

Second, I'll touch on the convertible preferred shares held by Carlyle. Now, as many of you know, these shares were issued by CGBD as part of an investment Carlyle made to support the BDC during the market dislocation resulting from the COVID pandemic. These shares have a current conversion price of $8.98 compared to quarter end's NAV of $16.95 and therefore, could be dilutive if exercised.

其次，我將談談凱雷持有的可轉換優先股。現在，正如你們許多人所知，這些股票是由 CGBD 發行的，作為凱雷在新冠疫情導致的市場混亂期間支持 BDC 的投資的一部分。這些股票的當前轉換價格為 8.98 美元，而季度末的資產淨值為 16.95 美元，因此，如果行使，可能會被稀釋。

As part of this transaction Carlyle will exchange its convertible preferred shares at NAV as determined shortly before merger close. This will avoid 5% to 8% dilution for CGBD shareholders. We believe that this is a significant value for CGBD shareholders that could lead to improved trading prices.

作為本次交易的一部分，凱雷將按照合併結束前不久確定的資產淨值交換其可轉換優先股。這將避免 CGBD 股東稀釋 5% 至 8%。我們相信，這對 CGBD 股東來說具有重大價值，可以提高交易價格。

Third, we expect this merger to reduce costs and drive operational efficiencies by eliminating duplicative expenses. We estimate total annual cost savings to be approximately $2.5 million on an LTM basis through increased scale as well as streamlining certain processes compared to the two entities continuing to operate separately.

第三，我們預計此次合併將透過消除重複開支來降低成本並提高營運效率。我們估計，與繼續單獨運營的兩個實體相比，透過擴大規模以及簡化某些流程，按 LTM 計算，每年可節省總成本約 250 萬美元。

The larger combined asset base will also improve our expense ratio to approximately 70 basis points on net assets, while also potentially providing CGBD with greater access to the debt capital markets and a lower cost of capital.

更大的合併資產基礎也將把我們的淨資產費用率提高到大約 70 個基點，同時也有可能為 CGBD 提供更多進入債務資本市場的機會和更低的資本成本。

Finally, we believe that this transaction is accretive to both NAV per share and net investment income per share on a fully diluted basis. This is due both to the preferred stock exchange and the substantial overlap in strategy and portfolio composition between the two vehicles.

最後，我們認為，此交易將增加每股資產淨值和完全稀釋後的每股淨投資收益。這是由於首選證券交易所以及兩種工具之間的策略和投資組合構成存在大量重疊所致。

We also expect the transaction to be accretive to net investment income per share in the long-term with improved combined portfolio metrics, a lower expense ratio and increased investment capacity. Given our recent trading levels, we have structured the merger to enable potential NAV accretion if CGBD is trading at a premium to NAV shortly before the merger close. Tom will discuss that more later in this call.

我們也預計，從長遠來看，該交易將透過改善綜合投資組合指標、降低費用率和提高投資能力，增加每股淨投資收益。鑑於我們最近的交易水平，如果 CGBD 在合併結束前不久的交易價格高於資產淨值，我們對合併進行了架構，以實現潛在的資產淨值增值。湯姆將在本次電話會議稍後討論這一點。

Carlyle is committed to the long-term success of CGBD, and we believe that this transaction will benefit shareholders of both CGBD and CSL III. To further support the merger, an affiliate of Carlyle will cover certain merger related expenses up to a total cap of $5 million, which we believe should cover all transaction costs.

凱雷致力於 CGBD 的長期成功，我們相信此交易將使 CGBD 和 CSL III 的股東受益。為了進一步支持合併，凱雷的一家附屬公司將承擔某些合併相關費用，總額上限為 500 萬美元，我們認為這應該涵蓋所有交易成本。

Now, before I turn the call over to Tom, I want to briefly discuss the market environment. Activity continued to pick up in the second quarter of 2024 as sponsored direct lending volumes reached recent highs driven by strong refinancing, recapitalization, and M&A activity.

現在，在將電話轉給湯姆之前，我想先簡單討論一下市場環境。2024 年第二季度，在強勁的再融資、資本重組和併購活動的推動下，贊助直接貸款量達到近期高點，活動持續回升。

Spreads and covenants continue to face pressure from borrowers, but the core middle market where we operate continues to see comparatively less pressure than the large cap market. Originations in the second quarter were up significantly year over year and our pipeline continues to expand with both core cash flow and differentiated deal flow.

利差和契約繼續面臨來自借款人的壓力，但我們經營的核心中間市場的壓力仍然比大盤市場小。第二季的發起量較去年同期顯著增加，我們的管道繼續擴大，核心現金流和差異化交易流。

Our goal is to drive performance with a consistent approach to direct lending anchored in disciplined credit selection and conservative portfolio management. We continue to benefit from the One Carlyle platform which differentiates us in the core middle market. While increasing origination activity is a positive for our strategy, we are most focused on the overall credit performance of our existing portfolio.

我們的目標是透過以嚴格的信貸選擇和保守的投資組合管理為基礎的一致的直接貸款方法來提高績效。我們繼續受益於 One Carlyle 平台，該平台使我們在核心中間市場中脫穎而出。雖然增加發起活動對我們的策略是正面的，但我們最關注的是現有投資組合的整體信用表現。

Our portfolio remains highly diversified and is comprised of 180 investments in 126 companies across more than 25 industries. The median EBITDA across our core portfolio at quarter end was $82 million. The average exposure in any single portfolio company is less than 1% and 94% of our investments are in senior secured loans.

我們的投資組合仍然高度多元化，由超過 25 個行業的 126 家公司的 180 項投資組成。截至季末，我們核心投資組合的 EBITDA 中位數為 8,200 萬美元。任何單一投資組合公司的平均風險敞口均低於 1%，我們 94% 的投資是優先擔保貸款。

As always, discipline and consistency drove performance in the second quarter. We expect these tenants to drive performance in future quarters.

與往常一樣，紀律和一致性推動了第二季度的業績。我們預計這些租戶將在未來幾季推動業績成長。

With that, I'll now hand the call over to our Chief Financial Officer, Tom Hennigan.

現在，我將把電話轉交給我們的財務長 Tom Hennigan。

Thank you, Justin. Today I'll begin with an overview of the terms and structure of the proposed merger. I'll then discuss second quarter financial results and portfolio performance before concluding with detail on our balance sheet positioning.

謝謝你，賈斯汀。今天，我將首先概述擬議合併的條款和結構。然後，我將討論第二季的財務表現和投資組合表現，然後詳細介紹我們的資產負債表定位。

First, I want to point all of our shareholders to the additional materials we've posted to CGBD's Investor Relations website. I'll note we expect to file a proxy and registration statement in the upcoming weeks to begin the process of soliciting merger approval from CGBD shareholders.

首先，我想提醒所有股東注意我們在 CGBD 投資者關係網站上發布的其他資料。我要指出的是，我們預計在未來幾週內提交一份委託書和註冊聲明，以開始徵求 CGBD 股東合併批准的流程。

As Justin previewed, we're excited to announce we've entered into an agreement with CSL II to merge in a stock for stock transaction, with a floating exchange rate that has the potential to be accretive to shareholders.

正如賈斯汀所預見的那樣，我們很高興地宣布，我們已與 CSL II 達成協議，以股票合併進行股票交易，浮動匯率有可能為股東帶來增值。

To reiterate Carlyle's support for the merger, it has agreed to exchange its existing convertible preferred shares for common stock, which will occur shortly before close of the proposed merger. Based on the current conversion price of $8.98 per share, this crystallizes accretion to both NAV per share and quarterly net investment income per share on a fully diluted basis.

為了重申凱雷對合併的支持，它已同意將其現有的可轉換優先股換成普通股，這將在擬議合併結束前不久進行。根據目前每股 8.98 美元的轉換價格，這將在完全稀釋的基礎上具體反映每股資產淨值和每股季度淨投資收益的增加。

Carlyle will be subject to a two-year tiered lockup following the exchange, reinforcing Carlyle's continued long-term commitment to CGBD. An affiliate of Carlyle has also agreed to bear up to $5 million in transaction fees and expenses in certain circumstances, which is expected to mitigate any potential dilution from merger expenses for shareholders.

交易後，凱雷將受到為期兩年的分級禁售，強化了凱雷對 CGBD 的持續長期承諾。凱雷的一家附屬公司也同意在某些情況下承擔高達 500 萬美元的交易費用和開支，預計這將減輕股東合併費用帶來的潛在稀釋。

The transaction has been structured with a floating exchange rate construct that enables the potential for additional NAV per share accretion at close. In our merger presentation, slide 16 outlines three potential scenarios and how they would impact CGBD. As you'll see on the slide, if CGBD is trading at or below one times NAV per share, the merger will be conducted offering on a NAV for NAV exchange.

該交易採用浮動匯率結構，有可能在交易結束時增加每股資產淨值。在我們的合併簡報中，投影片 16 概述了三種潛在情境以及它們將如何影響 CGBD。正如您將在幻燈片中看到的那樣，如果 CGBD 的交易價格等於或低於每股資產淨值的一倍，則合併將以資產淨值換資產淨值交換的方式進行。

But if CGBD is trading above one times NAV per share, CGBD and CSL III shareholders will equally split the premium at merger close up to 1.11 times, with all premium thereafter going to CGBD shareholders. This construct ensures the transaction is at a minimum NAV neutral while allowing CSL III shareholders to participate in upside if CGBD is trading above NAV shortly before the close of the merger.

但如果 CGBD 的交易價格高於每股資產淨值一倍，則 CGBD 和 CSL III 股東將在合併時平分溢價，接近 1.11 倍，此後所有溢價將歸 CGBD 股東所有。這種結構確保交易在最低資產淨值上保持中性，同時如果 CGBD 在合併結束前不久的交易價格高於資產淨值，則允許 CSL III 股東參與上漲。

Our core investment strategy will remain unchanged. The combined company will continue to focus on directly originated, primarily first lien sponsor backed loans to US companies in the middle market.

我們的核心投資策略將保持不變。合併後的公司將繼續專注於向中間市場的美國公司提供直接起源的、主要是第一留置權發起人支持的貸款。

Turning to the portfolio, total assets for the pro forma combined company are expected to increase to over $2.5 billion by transaction close. Based on current portfolio data, CSL III has near 100% overlap with CGBD, and the combined company on a pro forma basis as of June 30 has 127 portfolio companies and 183 investments and total senior secured exposure of over 90%.

至於投資組合，預計交易結束時合併後公司的總資產將增至超過 25 億美元。根據目前的投資組合數據，CSL III 與 CGBD 幾乎 100% 重疊，截至 6 月 30 日，合併後的公司擁有 127 家投資組合公司和 183 項投資，優先擔保風險敞口總額超過 90%。

Key portfolio diversification and risk metrics all will improve. Concentration of CGBD's top 1, 5, and 10 investments were all improved from current levels. We expect nonaccruals as a percentage of fair value and also debt investments with risk ratings 3 to 5 representing investments that have been downgraded on our internal risk rating scale, all to improve as you can see on slides 18 and 19 of the merger presentation.

關鍵的投資組合多元化和風險指標都將得到改善。CGBD排名前1、5、10的投資集中度均較目前水準有所提升。我們預計非應計費用佔公允價值的百分比，以及風險評級為3 至5 的債務投資（代表我們內部風險評級等級已被下調的投資），所有這些都會有所改善，正如您在合併演示文稿的幻燈片18 和19 中看到的那樣。

Given the significant portfolio overlap, we believe the merger will result in cost synergies for shareholders, with annual cost savings expected to be about $2.5 million. The elimination of duplicative expenses should result in over a 20% decrease in operating expenses from the second quarter combined levels, which implies a pro forma target expense ratio of under 70 basis points on net assets.

鑑於投資組合存在重大重疊，我們相信此次合併將為股東帶來成本綜效，預計每年可節省約 250 萬美元的成本。消除重複費用應導致營運費用較第二季綜合水準下降 20% 以上，這意味著預計淨資產目標費用率低於 70 個基點。

Increased scale also has the potential to provide a wider and more efficient array of financing alternatives, which could reduce our cost of debt through improved access to the institutional debt capital markets. Leading up to merger close, we also anticipate calling all remaining uncalled capital from CSL III shareholders and will seek to return CGBD to the midpoint of our target leverage range.

規模的擴大還有可能提供更廣泛、更有效的融資選擇，這可以透過改善機構債務資本市場的進入來降低我們的債務成本。在合併完成之前，我們也預計將收回 CSL III 股東的所有剩餘未繳資本，並將尋求將 CGBD 恢復到我們目標槓桿範圍的中點。

Given the increased level of deal activity Justin mentioned, we're confident we can deploy this capital into attractive investments. All of CGBD's financing facilities will continue in regular course, and we expect CSL III's existing asset-based credit facility will transfer over to CGBD at closing of the merger.

鑑於賈斯汀提到的交易活動水準的增加，我們有信心可以將這筆資金部署到有吸引力的投資中。CGBD 的所有融資便利性將繼續正常進行，我們預期 CSL III 現有的資產為基礎的信貸便利將在合併結束時轉移至 CGBD。

The transaction has been unanimously approved by the CGBD Board of Directors and the CSL III Board of Trustees at the recommendation of the special committees of both CGBD and CSL III.

根據CGBD和CSL III專門委員會的推薦，本交易已獲得CGBD董事會和CSL III董事會的一致批准。

I want to highlight that in addition to the benefits for CGBD shareholders we've been focused on, the transaction also enables CSL III investors to retain access to the proven investment strategy they sought exposure to with the benefits of the greater scale of the combined entity, liquidity of a listed BDC, and the potential to trade at a premium to NAV. Taken together, we think this is a compelling value proposition for these new CGBD investors.

我想強調的是，除了我們一直關注的 CGBD 股東的利益外，此次交易還使 CSL III 投資者能夠保留他們尋求接觸的經過驗證的投資策略，並享受合併後實體規模更大的好處、上市BDC 的流動性以及以高於資產淨值的溢價進行交易的潛力。總而言之，我們認為這對這些新的 CGBD 投資者來說是一個令人信服的價值主張。

Finally, CGBD's adviser will remain unchanged, and we anticipate the transaction closing in Q1 of 2025, subject to approval from CGBD shareholders, certain regulatory approval, and satisfaction or waiver of other customary closing conditions.

最後，CGBD 的顧問將保持不變，我們預計交易將於 2025 年第一季完成，但須獲得 CGBD 股東的批准、某些監管部門的批准以及其他慣例成交條件的滿足或豁免。

Now moving on to a more detailed review of this quarter's results. CGBD had another strong quarter on the earnings front. Total investment income for the second quarter was $58 million, down slightly from prior quarter due to a lower average portfolio balance and a decrease in prepayment and amendment fees.

現在我們將更詳細地回顧本季的業績。CGBD 在獲利方面又經歷了一個強勁的季度。第二季的總投資收入為 5,800 萬美元，較上一季略有下降，原因是平均投資組合餘額下降以及預付款和修改費用減少。

Total expenses of $31 million also decreased versus prior quarter, primarily due to reduced total interest expense from a lower average outstanding debt balance. The result with net investment income for the second quarter of $26 million or $0.51 per share, which is generally in line with the prior year comparable period.

總支出也比上一季減少了 3,100 萬美元，這主要是由於平均未償債務餘額較低導致總利息支出減少。第二季淨投資收益為 2,600 萬美元，即每股 0.51 美元，與去年同期基本一致。

Our Board of Directors declared the dividends for the third quarter of 2024 at a total level of $0.47 per share, that's comprised of the $0.40 base dividend plus a $0.07 supplemental dividend, which is payable to shareholders of record as of the close of business on September 30. This total dividend level reflects our variable supplemental dividend policy of paying out at least 50% of excess earnings, which allows us to be flexible as the portfolio evolves and base rates fluctuate.

我們的董事會宣布 2024 年第三季的股息總額為每股 0.47 美元，其中包括 0.40 美元的基本股息和 0.07 美元的補充股息，該股息將支付給截至 9 月營業結束時在冊的股東30.這一總股息水準反映了我們支付至少 50% 超額收益的可變補充股息政策，這使我們能夠隨著投資組合的發展和基本利率的波動而保持靈活性。

Our base dividend coverage of 128% for the quarter remains above the BDC peer set average, and we've grown the base dividend 25% since 2022. At the same time, this total dividend level also represents an attractive yield of 11% based on the recent share price. Looking ahead, we remain highly confident in our ability to comfortably meet and exceed our $0.40 base dividend and continue paying out supplemental dividends each quarter.

本季我們的基本股利覆蓋率為 128%，仍高於 BDC 同業設定的平均水平，並且自 2022 年以來我們已將基本股利增加了 25%。同時，根據近期股價計算，這一總股息水準也代表了 11% 的有吸引力的收益率。展望未來，我們仍然對能夠輕鬆滿足並超過 0.40 美元的基本股息並繼續每季支付補充股息的能力充滿信心。

On valuations, out total aggregate realized and unrealized net loss was about $8 million for the quarter. The largest contributor was a $7 million loss in our position in Emergency Communications Network, ECN. So a majority of that $8 million loss from that one position, and we actually exited that investment last week at a level slightly better than our 6/30 mark.

就估值而言，本季已實現和未實現的淨虧損總額約為 800 萬美元。最大的貢獻是我們在緊急通訊網路 (ECN) 的部位損失了 700 萬美元。因此，800 萬美元的大部分損失來自該頭寸，而我們實際上上週以略高於 6/30 標記的水平退出了該投資。

So the full downside for that position is already reflected in our 6/30 NAV. This decrease in valuations, partially offset by Q2 earnings exceeding the dividend resulted in our NAV decreasing modestly from $17.07 to $16.95 per share.

因此，該頭寸的全部缺點已反映在我們的 6/30 資產淨值中。估值的下降部分被第二季獲利超過股利所抵消，導致我們的淨值從每股 17.07 美元小幅下降至 16.95 美元。

Turning to credit performance, we continue to see overall stability in credit quality across the portfolio. Nonaccruals increased this quarter to 1.8% of total investments at fair value as we added a net two borrowers nonaccrual status.

談到信貸表現，我們繼續看到整個投資組合的信貸品質整體穩定。由於我們增加了兩個淨借款人的非應計項目，本季度非應計項目增加至以公允價值計算的總投資的 1.8%。

However, we exited ECN and we've been working towards a favorable solution with the other borrowers. To that end, for the upcoming quarter, we expect investments on nonaccrual to drop back below 1% as a percentage of fair value.

然而，我們退出了 ECN，並且一直在與其他借款人共同尋求有利的解決方案。為此，在下個季度，我們預期非應計投資佔公允價值的百分比將回落至 1% 以下。

I'll finish by touching on our financing facilities and leverage. We continue to be well positioned on the right side of our balance sheet. In early July, we closed a reset of the 2015-I CLO extending the reinvestment period and maturity date by four years and reducing the cost of debt by more than 20 basis points within that vehicle.

最後我將談談我們的融資設施和槓桿。我們繼續處於資產負債表右邊的有利位置。7 月初，我們完成了 2015-I CLO 的重置，將再投資期限和到期日延長了四年，並將工具內的債務成本降低了 20 個基點以上。

Leverage is down quarter over quarter, and we have capacity to deploy capital into attractive opportunities in accelerating deal environment as we've been operating conservatively at the lower end of our target range.

槓桿率逐季下降，而且我們有能力將資本部署到加速交易環境中有吸引力的機會，因為我們一直在目標範圍的下限保守運作。

Statutory leverage was about 1.1 times and net financial leverage ended the quarter modestly lower at 0.90 times. This positioning allows us to remain opportunistic as the macroeconomic environment evolves and deal activity looks to pick up in the second half of 2024.

法定槓桿約 1.1 倍，本季末淨財務槓桿小幅下降至 0.90 倍。隨著宏觀經濟環境的變化以及交易活動預計在 2024 年下半年回升，這種定位使我們能夠保持機會主義。

With that, I'll turn the call back over to Justin.

這樣，我會將電話轉回給賈斯汀。

Thanks Tom. Before we move to Q&A, I want to reemphasize the compelling merger proposal for CGPD. This merger is between two entities that are wholly aligned. We're adding meaningful scale without increasing risk through combining with a known Carlyle managed portfolio.

謝謝湯姆。在我們進行問答之前，我想再次強調 CGPD 引人注目的合併提案。此次合併是兩個完全一致的實體之間的合併。透過與凱雷管理的知名投資組合相結合，我們在不增加風險的情況下擴大了有意義的規模。

The consistency of our investment approach between the two BDCs positions us for a smooth integration process. We expect the transaction will be significantly beneficial to shareholders with accretion to both NII and NAV per share.

我們兩個 BDC 之間投資方法的一致性使我們能夠順利進行整合過程。我們預計該交易將為股東帶來顯著利益，增加每股 NII 和 NAV。

Market demand for private credit remains high. We continue to focus on sourcing transactions with significant equity cushions, conservative leverage levels, and attractive spreads relative to market levels. With attractive new originations, a stable portfolio and low levels of nonaccruals, CGBD shareholders are benefiting from the continued execution of our strategy.

市場對民間信貸的需求仍然很高。我們繼續專注於尋找具有顯著股權緩衝、保守槓桿水平以及相對於市場水平有吸引力的利差的交易。憑藉著有吸引力的新產品、穩定的投資組合和較低的非應計費用水平，CGBD 股東正從我們策略的持續執行中受益。

As always, we remain committed to delivering a resilient, stable cash flow stream to our investors through consistent income and solid credit performance.

一如既往，我們仍然致力於透過穩定的收入和穩健的信用表現，為投資者提供有彈性、穩定的現金流。

I'd like to now hand the call over to the operator to take your questions. Thank you.

我現在想將電話轉接給接線員回答您的問題。謝謝。

(Operator Instructions) Finian O'Shea, WFS.

（操作員說明）Finian O'Shea，WFS。

Hey, thank you. Good morning, everyone. How are you? On the merger I think it's ['25] expected close. Does that mean you're anticipating like an extended sort of outreach campaign? And can you remind us of the shareholder base profile of Carlyle III? Thanks.

嘿，謝謝你。大家早安。你好嗎？關於合併，我認為['25]預計會完成。這是否意味著您正在期待更廣泛的外展活動？您能否提醒我們凱雷三世的股東基礎概況？謝謝。

Sure. So we do have to get shareholder vote from CGBD shareholders. So that is a legal process and that's part of the reason why it will take a bit of time. The CSL III shareholders do not have a vote here because they've sort of signed up for this when they initially invested in that fund.

當然。因此，我們確實必須獲得 CGBD 股東的投票。所以這是一個法律程序，這也是需要一些時間的部分原因。CSL III 股東在這裡沒有投票權，因為他們在最初投資該基金時就已經簽署了這項協議。

So there shouldn't be too much of a delay on that end of things. The CSL III shareholder base are people that Carlyle plays to, but there's not significant concentration, but again, without a vote, we wouldn't expect that to impact the merger process at all.

因此，事情的結束不應該有太多的延遲。CSL III 的股東基礎是凱雷的對手，但集中度並不高，但同樣，在沒有投票的情況下，我們預期這根本不會影響合併過程。

And Finn we'd expect, although it's a very compelling transaction for CGBD shareholders, it always just takes so much time to gather up such a diverse base of investors for any of these votes. So we'd anticipate the process to take normal courses as other BDC mergers.

我們預計，儘管這對 CGBD 股東來說是一項非常有吸引力的交易，但我們總是需要花費大量時間來收集如此多樣化的投資者基礎來進行任何投票。因此，我們預計該流程將像其他 BDC 合併一樣採取正常課程。

Okay. That's helpful, thanks. And I guess, Justin, I thought I'd ask, looking at the screen today and this week if you have any views on how the current volatility we're in might impact the bank's positioning to compete on sponsored finance transactions if it's too early to tell or if you think they would be still in a strong position to lean in or whatnot.

好的。這很有幫助，謝謝。我想，賈斯汀，我想我應該問一下，今天和本週你看著螢幕，如果現在還為時過早，我們當前的波動可能會如何影響銀行在讚助金融交易方面的競爭地位，你有什麼看法嗎？

Yeah, certainly early to tell how this all plays out in the second half of the year, but we've been focused for a long time now on making sure the credit quality of the portfolio is excellent, because we've seen the pressure on spreads.

是的，當然現在談論這一切在下半年會如何發展還為時過早，但我們長期以來一直專注於確保投資組合的信貸品質優良，因為我們已經看到了壓力傳播。

So we feel very well positioned if we're heading into a more volatile environment and it does stand to reason, Fin, that in more volatile environments, our capital becomes more valuable to borrowers. So I think we're well positioned if it does turn out to be a volatile second half of the year, but we'll have to see.

因此，如果我們進入一個更加不穩定的環境，我們感覺自己處於非常有利的位置，芬，在更加不穩定的環境中，我們的資本對借款人來說確實變得更有價值，這確實是有道理的。因此，我認為，如果下半年確實出現波動，我們已經處於有利位置，但我們必須拭目以待。

Okay, one final, if I may, on if there's any -- based on the transaction exchange ratio at close, that's obviously into the future, but if the incentive fee will account for merger accretion.

好吧，最後，如果可以的話，關於是否有任何——基於結束時的交易交換比率，這顯然是未來的事情，但激勵費用是否會考慮到合併的增加。

If the incentive fee will account for merger accretion? Sorry, I'm not sure I quite follow the question.

激勵費是否會計入合併加值？抱歉，我不確定我是否完全理解了這個問題。

Yeah, that's due to the, maybe better for Tom, based on where the stock is, there might be a -- I don't know, I think, I can't even explain it too well, but it's very common in a BDC merger due to the accounting and that will elevate or reduce, depending on where Carlyle trades, when it presumably goes NAV for NAV. And that could change the GAAP revenue and NOI. So like will you accrue -- sorry, go ahead.

是的，這是因為，也許對湯姆來說更好，根據股票的位置，可能會有——我不知道，我想，我什至不能很好地解釋它，但這在股票中很常見由於會計原因，BDC 合併將會增加或減少，具體取決於凱雷交易的地點，以及何時可能將資產淨值變為資產淨值。這可能會改變 GAAP 收入和 NOI。所以就像你會累積一樣——抱歉，繼續吧。

We wouldn't expect any impact from the merger math on our incentive fees.

我們預期合併計算不會對我們的激勵費用產生任何影響。

Okay, thanks so much. That's all from me.

好的，非常感謝。這就是我的全部。

Melissa Wedel, JPMorgan.

梅麗莎‧韋德爾，摩根大通。

Good morning. Thanks for taking my questions today. I wanted to talk about the merger and combining the portfolios. I understand that's a couple quarters out, but at a high level, would you view the smaller portfolio, that the loans in that portfolio as being brought onto CGBD's balance sheet or would those be appropriate to put into the credit fund?

早安.感謝您今天回答我的問題。我想談談合併和組合投資組合。我知道這需要幾個季度的時間，但從總體上看，您是否會認為較小的投資組合，即該投資組合中的貸款是否會納入 CGBD 的資產負債表，或者是否適合放入信貸基金？

Hey, Melissa, it's Tom. There's substantial overlap between the two funds in terms of the borrowers. In fact, almost every single position at CSL III is also held at CGBD obviously varying levels.

嘿，梅麗莎，我是湯姆。就借款人而言，這兩個基金之間存在大量重疊。事實上，中超三級聯賽中幾乎每個位置的等級也明顯不同。

So we'd anticipate looking at keeping in place our current facilities and allocating the loans primarily to our existing credit facilities, and potentially based on some of the lower spread transactions, potentially allocating those we're thinking as good investments down the road for the JV.

因此，我們預計會考慮保持現有的設施，並將貸款主要分配給我們現有的信貸設施，並可能基於一些較低利差的交易，可能會分配那些我們認為是良好投資的未來合資企業。

So that we'd be looking at, based on the investment profile, the yield profile is spreading them across the vehicle. But I think for the most part, though, the yield profile is in line with the BDC, is that most of those we'd anticipate would be held directly by the BDC.

因此，我們會根據投資情況來研究收益率情況是否將它們分散到整個工具中。但我認為，在很大程度上，收益率狀況與 BDC 一致，我們預計其中大部分將由 BDC 直接持有。

Okay. And then can you remind us when you think about the credit fund and sort of the runway there, how much -- I guess that's the question. How much runway is there to grow that JV? I assume that's another avenue where you would look to explore NAV -- I'm sorry, NII accretion?

好的。然後你能否提醒我們，當你想到信貸基金和那裡的跑道時，有多少——我想這就是問題所在。該合資企業還有多少跑道可以發展？我認為這是您探索 NAV 的另一條途徑——對不起，NII 增長？

Look, I think currently we're probably looking to maintain the JV level. Certainly we're always looking at the best ways to improve our ROE. Right now, I think we're looking to maintain the JV size and dividends coming from those JVs.

看，我認為目前我們可能正在尋求維持合資企業的水平。當然，我們一直在尋找提高 ROE 的最佳方法。目前，我認為我們正在尋求維持合資企業的規模和這些合資企業的股利。

Not a huge growth.

並不是一個巨大的成長。

Got it. Final question from me, just around the fee structure, we've seen a number of these transactions before. And I think as we've seen portfolios shift increasingly, firstly, sometimes we've seen managers make adjustments to the fee structure. Just curious if that's something that's been a topic of discussion with the Board. Thank you.

知道了。我的最後一個問題是關於費用結構，我們之前已經見過很多這樣的交易。我認為，隨著我們看到投資組合不斷變化，首先，有時我們會看到管理者在調整費用結構。只是好奇這是否是董事會討論的話題。謝謝。

Yeah. We don't anticipate changing our fee structure as part of the merger. We think our fees are in line with market, given the performance that we've had. But I do want to emphasize Carlyle is paying all transaction expenses and we're getting out of our preferred shares at NAV, which avoids a something like a 5% to 8% potential dilution to CGPD shareholders. So those are really the two areas where Carlyle is contributing to the transaction.

是的。作為合併的一部分，我們預計不會改變我們的費用結構。考慮到我們的表現，我們認為我們的費用與市場相符。但我確實想強調的是，凱雷正在支付所有交易費用，我們將按資產淨值出售優先股，這避免了 CGPD 股東可能被稀釋 5% 至 8% 的情況。因此，這些確實是凱雷為交易做出貢獻的兩個領域。

Thank you.

謝謝。

(Operator Instructions) I'm showing no further questions at this time, and I would like to hand the conference back over to Justin Plouffe for closing remarks.

（操作員指示）我現在不會再提出任何問題，我想將會議交還給賈斯汀·普洛夫（Justin Plouffe）做閉幕詞。

Well, thank you, everyone. We really appreciate your joining. Sure we'll be speaking to you in the future. That will conclude today's call.

嗯，謝謝大家。我們非常感謝您的加入。當然，我們將來會與您交談。今天的電話會議到此結束。

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。大家，祝你有美好的一天。