Carlyle Secured Lending, Inc. (CGBD) Stock Analysis and Metrics

Carlyle Secured Lending

NASDAQ: CGBD

$10.05 ▲ +0.04 (+0.40%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap712.62 Mn

P/E13.78

P/S2.69

Div. Yield0.15

Total Debt (Qtr)1.38 Bn

Revenue Growth (1y) (Qtr)16.80

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About

Carlyle Secured Lending, Inc. is a specialty finance company focused on providing secured debt investments to U. S. middle market companies. Operating as a business development company (BDC), it primarily assembles a portfolio of senior secured loans, including first and second lien debt, to generate current income and, to a lesser extent, capital appreciation. The company targets middle market firms with earnings before interest, taxes, depreciation, and amortization (EBITDA) of $25 million or greater, often backed by private equity sponsors. Its investment strategy is supplemented by opportunistic lending and structured products, leveraging the broader capabilities of Carlyle’s Global Credit platform.

The company generates revenue through interest income, fees, and capital gains from its debt investments. Primary income streams include cash pay interest on senior secured loans, origination fees, structuring fees, and prepayment penalties. Carlyle Secured Lending also earns incentive fees based on net investment income and realized capital gains, structured under its investment advisory agreement. The base management fee is calculated at an annual rate of 1.5% of gross assets, with adjustments for leverage, while the incentive fee comprises two components: a quarterly performance-based fee and an annual capital gains fee.

The company operates through a single investment strategy, with no distinct operational segments reported.

Carlyle Secured Lending occupies a competitive position within the middle market direct lending industry, leveraging the scale and resources of Carlyle’s Global Credit platform. With $211 billion in assets under management (AUM) as of December 31, 2025, Carlyle’s Global Credit segment provides a significant advantage in sourcing, underwriting, and managing investments. Key competitors include other BDCs, commercial banks, collateralized loan obligations (CLOs), and private credit funds. The company’s competitive strengths include a proven direct origination approach, a broad range of credit capabilities, and a rigorous, multi-layered underwriting process. Its defensive investment strategy, which prioritizes non-cyclical industries and repeat sponsor relationships, further enhances risk-adjusted returns. The integration of Carlyle’s global network, including sector-specific analysts and private equity insights, allows the company to execute transactions with greater conviction and speed than many competitors.

The company’s customer base consists primarily of U. S.-based middle market companies, most of which are controlled by private equity firms. These borrowers operate across diverse industries, including healthcare, software, business services, and diversified financial services. Carlyle Secured Lending targets companies with strong market positions, predictable cash flows, and experienced management teams, often providing capital for growth, acquisitions, recapitalizations, or refinancing. While specific borrower names are not disclosed, the portfolio includes firms in sectors such as aerospace, consumer services, and high technology, reflecting a focus on defensible business models and stable revenue streams.

Investment Thesis

▲ Bull case

The company’s revitalized origination platform generated $217 million of funded investments in the quarter while platform originations rose 14% year over year despite a 25% decline in broader US private equity deal activity. This outperformance indicates the platform is gaining market share and able to source deals on more favorable terms as capital supply among direct lenders rebalances. The pipeline is heavily weighted toward old economy sectors such as industrials aerospace and defense healthcare and consumer products which tend to exhibit more stable cash flows and lower sensitivity to technological disruption. By concentrating on these areas Carlyle Secured Lending can achieve sustainable growth even when technology focused borrowers face headwinds. The disciplined underwriting approach that focuses on significant equity cushions and conservative leverage profiles further enhances the risk adjusted return profile of new originations. As the investment environment becomes more lender friendly the platform is positioned to capture incremental spread widening and origination fees that will flow through to net investment income over the medium term.
The Middle Market Credit Fund joint venture received an equity upsize to $250 million per partner and a credit facility increase to $1.2 billion creating ample dry powder for continued asset growth and delivering a 15% dividend yield on over $1 billion of investments. Concurrently the new Structured Credit Partners joint venture is capitalized with $600 million of equity and will invest in broadly syndicated first lien senior secured loans financed through fee free CLOs managed by Carlyle and Sixth Street. The absence of management or incentive fees on the underlying assets is expected to provide a 400 to 500 basis point uplift to total returns as the vehicle ramps toward managing approximately $67 billion of assets over time. These joint ventures position Carlyle Secured Lending to capture incremental income streams that are not diluted by fee drag and to enhance shareholder returns as the investment environment improves. The fee free structure also reduces the cost of capital for the underlying loans allowing the joint ventures to offer competitive pricing while still generating attractive spreads for the parent company. Over time the growing scale of the joint ventures could become a meaningful contributor to earnings offsetting any drag from the core portfolio’s lower yielding legacy assets.
During the first quarter Carlyle Secured Lending repurchased $19 million of shares at an average discount of 26% to net asset value generating $0.09 of accretion per share and continued repurchases in the second quarter added another $0.05 per share of accretion. The board approved an upsize of the repurchase program to $300 million signalling confidence in the intrinsic value of the stock and providing flexibility to capitalize on further price dislocations. By buying back shares at a deep discount the company effectively increases its net asset value per share without needing to grow the underlying investment portfolio. This accretive effect can support the share price and provide a cushion against any short term earnings volatility while management focuses on longer term growth initiatives. The repurchase program also demonstrates that management believes the current market price undervalues the company’s earnings power and asset quality. As the portfolio is rebalanced toward higher yielding assets the accretive benefit from buybacks could be complemented by organic growth creating a dual engine for shareholder value creation.
The base dividend was reset to $0.35 per share for 2026 representing a sustainable payout based on the current earnings power of the portfolio while maintaining a supplemental dividend policy that targets at least 50% of excess earnings above the base level. This structure provides a floor for income distribution while allowing upside participation as new investments generate higher yields and the joint ventures begin to contribute fee free income. The reset dividend yields 8.8% on net asset value offering an attractive income stream that can help support the share price even if market spreads remain volatile. Combined with a low leverage profile and strong credit metrics the dividend policy enhances downside protection and signals management’s commitment to returning capital to shareholders. The supplemental dividend creates a mechanism for shareholders to benefit from any outperformance in the joint ventures or from improved spreads on new originations without jeopardizing the base payout. Should the investment environment continue to improve the company could gradually increase the base dividend while still maintaining a conservative payout ratio that preserves capital for future growth opportunities.

The company’s revitalized origination platform generated $217 million of funded investments in the quarter while platform originations rose 14% year over year despite a 25% decline in broader US private equity deal activity. This outperformance indicates the platform is gaining market share and able to source deals on more favorable terms as capital supply among direct lenders rebalances. The pipeline is heavily weighted toward old economy sectors such as industrials aerospace and defense healthcare and consumer products which tend to exhibit more stable cash flows and lower sensitivity to technological disruption. By concentrating on these areas Carlyle Secured Lending can achieve sustainable growth even when technology focused borrowers face headwinds. The disciplined underwriting approach that focuses on significant equity cushions and conservative leverage profiles further enhances the risk adjusted return profile of new originations. As the investment environment becomes more lender friendly the platform is positioned to capture incremental spread widening and origination fees that will flow through to net investment income over the medium term.
The Middle Market Credit Fund joint venture received an equity upsize to $250 million per partner and a credit facility increase to $1.2 billion creating ample dry powder for continued asset growth and delivering a 15% dividend yield on over $1 billion of investments. Concurrently the new Structured Credit Partners joint venture is capitalized with $600 million of equity and will invest in broadly syndicated first lien senior secured loans financed through fee free CLOs managed by Carlyle and Sixth Street. The absence of management or incentive fees on the underlying assets is expected to provide a 400 to 500 basis point uplift to total returns as the vehicle ramps toward managing approximately $67 billion of assets over time. These joint ventures position Carlyle Secured Lending to capture incremental income streams that are not diluted by fee drag and to enhance shareholder returns as the investment environment improves. The fee free structure also reduces the cost of capital for the underlying loans allowing the joint ventures to offer competitive pricing while still generating attractive spreads for the parent company. Over time the growing scale of the joint ventures could become a meaningful contributor to earnings offsetting any drag from the core portfolio’s lower yielding legacy assets.
During the first quarter Carlyle Secured Lending repurchased $19 million of shares at an average discount of 26% to net asset value generating $0.09 of accretion per share and continued repurchases in the second quarter added another $0.05 per share of accretion. The board approved an upsize of the repurchase program to $300 million signalling confidence in the intrinsic value of the stock and providing flexibility to capitalize on further price dislocations. By buying back shares at a deep discount the company effectively increases its net asset value per share without needing to grow the underlying investment portfolio. This accretive effect can support the share price and provide a cushion against any short term earnings volatility while management focuses on longer term growth initiatives. The repurchase program also demonstrates that management believes the current market price undervalues the company’s earnings power and asset quality. As the portfolio is rebalanced toward higher yielding assets the accretive benefit from buybacks could be complemented by organic growth creating a dual engine for shareholder value creation.
The base dividend was reset to $0.35 per share for 2026 representing a sustainable payout based on the current earnings power of the portfolio while maintaining a supplemental dividend policy that targets at least 50% of excess earnings above the base level. This structure provides a floor for income distribution while allowing upside participation as new investments generate higher yields and the joint ventures begin to contribute fee free income. The reset dividend yields 8.8% on net asset value offering an attractive income stream that can help support the share price even if market spreads remain volatile. Combined with a low leverage profile and strong credit metrics the dividend policy enhances downside protection and signals management’s commitment to returning capital to shareholders. The supplemental dividend creates a mechanism for shareholders to benefit from any outperformance in the joint ventures or from improved spreads on new originations without jeopardizing the base payout. Should the investment environment continue to improve the company could gradually increase the base dividend while still maintaining a conservative payout ratio that preserves capital for future growth opportunities.

▼ Bear case

Despite spread widening of roughly 50 basis points on new originations the weighted average yield of those loans remains below the average yield of the existing portfolio indicating that the incremental assets are lower yielding than the current book. The overall portfolio continues to experience pressure from lower base rates and the tight market spreads that prevailed in recent years which drags down total investment income even as the company originates new deals. Management acknowledged that earnings are expected to trough in the second quarter due to lower average assets and the loss of atypical fee income that boosted the first quarter result. Until the portfolio can be rebalanced toward higher yielding assets the net investment income per share may stay constrained limiting the ability to grow the dividend beyond the base level. The persistent yield drag could force the company to rely more heavily on fee income or on the ramp of joint ventures to meet earnings expectations. If the expected improvement in new investment yields does not materialize the company may face a prolonged period of stagnant or declining net investment income which could pressure the share price and constrain future dividend growth.
Prepayments remained elevated at $216 million during the quarter and an additional $153 million of loans were sold to the Middle Market Credit Fund joint venture reducing the average size of the balance sheet and directly cutting interest income. The company’s growth outlook now depends heavily on the successful ramp of both the Middle Market Credit Fund and the Structured Credit Partners joint ventures which may encounter delays due to market conditions or syndication timelines. If the joint ventures fail to scale as quickly as anticipated the company will lack a sufficient reinvestment pipeline to offset the drag from prepayments and sales. This reliance introduces execution risk that could keep the investment portfolio flat or even shrinking in the near term. The timing of CLO closures for the Structured Credit Partners venture is subject to market volatility and any slowdown in CLO issuance would delay the fee free income stream. Moreover the integration of new joint venture assets into the parent company’s reporting could create operational complexity that distracts from core lending activities.
Although the portfolio shows stable credit stats with non accruals representing less than one% of investments at fair value the software borrower exposure continues to be a point of concern given the potential for rapid AI driven disruption that could impair earnings and cash flows of those companies. The fair value of loans utilizing PIK provisions increased during the quarter and while much of this PIK is considered good PIK any shift toward non performing PIK would raise credit losses and affect net investment income. The four remaining non accrual borrowers represent a small fraction of total investments but a deterioration in a few larger credits could have an outsized impact on portfolio performance. Management’s comfort with software exposure may be premature if macroeconomic or technological headwinds intensify. Additionally the reliance on PIK structures introduces uncertainty around cash flow timing as accrued interest may not be received in cash until maturity or restructuring. A rise in non performing PIK could erode the perceived quality of the portfolio and lead to higher provisioning requirements that would depress earnings.
The company’s debt structure is entirely floating rate which matches its largely floating rate assets but leaves it vulnerable to a sudden increase in short term rates that could raise funding costs faster than the yields on existing loans reset. While statutory leverage was 1.25 times and net financial leverage was 1.06 times at quarter end providing a low leverage buffer any rapid rise in rates would compress net interest margins and could pressure net asset value. The current discount to net asset value may reflect market skepticism about the company’s ability to sustain earnings growth in a higher rate environment. Until the portfolio can be re priced toward higher spreads the floating rate liability profile poses a material risk to profitability. In a scenario where base rates rise sharply the company may need to deleverage or seek additional equity to maintain compliance with covenants which could dilute existing shareholders. Furthermore the dependence on floating rate financing reduces the predictability of earnings making it harder for investors to model future cash flows with confidence.

Despite spread widening of roughly 50 basis points on new originations the weighted average yield of those loans remains below the average yield of the existing portfolio indicating that the incremental assets are lower yielding than the current book. The overall portfolio continues to experience pressure from lower base rates and the tight market spreads that prevailed in recent years which drags down total investment income even as the company originates new deals. Management acknowledged that earnings are expected to trough in the second quarter due to lower average assets and the loss of atypical fee income that boosted the first quarter result. Until the portfolio can be rebalanced toward higher yielding assets the net investment income per share may stay constrained limiting the ability to grow the dividend beyond the base level. The persistent yield drag could force the company to rely more heavily on fee income or on the ramp of joint ventures to meet earnings expectations. If the expected improvement in new investment yields does not materialize the company may face a prolonged period of stagnant or declining net investment income which could pressure the share price and constrain future dividend growth.
Prepayments remained elevated at $216 million during the quarter and an additional $153 million of loans were sold to the Middle Market Credit Fund joint venture reducing the average size of the balance sheet and directly cutting interest income. The company’s growth outlook now depends heavily on the successful ramp of both the Middle Market Credit Fund and the Structured Credit Partners joint ventures which may encounter delays due to market conditions or syndication timelines. If the joint ventures fail to scale as quickly as anticipated the company will lack a sufficient reinvestment pipeline to offset the drag from prepayments and sales. This reliance introduces execution risk that could keep the investment portfolio flat or even shrinking in the near term. The timing of CLO closures for the Structured Credit Partners venture is subject to market volatility and any slowdown in CLO issuance would delay the fee free income stream. Moreover the integration of new joint venture assets into the parent company’s reporting could create operational complexity that distracts from core lending activities.
Although the portfolio shows stable credit stats with non accruals representing less than one% of investments at fair value the software borrower exposure continues to be a point of concern given the potential for rapid AI driven disruption that could impair earnings and cash flows of those companies. The fair value of loans utilizing PIK provisions increased during the quarter and while much of this PIK is considered good PIK any shift toward non performing PIK would raise credit losses and affect net investment income. The four remaining non accrual borrowers represent a small fraction of total investments but a deterioration in a few larger credits could have an outsized impact on portfolio performance. Management’s comfort with software exposure may be premature if macroeconomic or technological headwinds intensify. Additionally the reliance on PIK structures introduces uncertainty around cash flow timing as accrued interest may not be received in cash until maturity or restructuring. A rise in non performing PIK could erode the perceived quality of the portfolio and lead to higher provisioning requirements that would depress earnings.
The company’s debt structure is entirely floating rate which matches its largely floating rate assets but leaves it vulnerable to a sudden increase in short term rates that could raise funding costs faster than the yields on existing loans reset. While statutory leverage was 1.25 times and net financial leverage was 1.06 times at quarter end providing a low leverage buffer any rapid rise in rates would compress net interest margins and could pressure net asset value. The current discount to net asset value may reflect market skepticism about the company’s ability to sustain earnings growth in a higher rate environment. Until the portfolio can be re priced toward higher spreads the floating rate liability profile poses a material risk to profitability. In a scenario where base rates rise sharply the company may need to deleverage or seek additional equity to maintain compliance with covenants which could dilute existing shareholders. Furthermore the dependence on floating rate financing reduces the predictability of earnings making it harder for investors to model future cash flows with confidence.

Peer Comparison

Companies in the Asset Management

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	BN	BROOKFIELD Corp /ON/	1,251.90 Bn	1,035.48	16.53	15.06 Bn
2	BLK	BlackRock, Inc.	163.76 Bn	26.19	6.39	20.18 Bn
3	BX	Blackstone Inc.	101.88 Bn	16.71	6.89	13.28 Bn
4	APO	Apollo Global Management, Inc.	73.13 Bn	69.84	2.74	14.22 Bn
5	STT	State Street Corp	51.60 Bn	18.27	3.57	-
6	AMP	Ameriprise Financial Inc	49.37 Bn	12.67	1.77	0.20 Bn
7	NTRS	Northern Trust Corp	33.59 Bn	18.37	6.53	7.84 Bn
8	RJF	Raymond James Financial Inc	33.19 Bn	15.49	2.41	4.66 Bn

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Investment Thesis

Investment, Issuer Affiliation Breakdown of Revenue (2025)

Peer Comparison

Research Tools

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Investment Thesis

Investment, Issuer Affiliation Breakdown of Revenue (2025)

Peer Comparison

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