Earnings call transcript: Carlyle Secured Lending Q2 2025 misses EPS forecast, revenue up

Carlyle Secured Lending Inc. (CGBD) reported its second-quarter 2025 earnings, revealing a mixed financial performance. The company missed earnings per share (EPS) expectations, reporting $0.20 against a forecast of $0.3925, marking a 49.04% surprise on the downside. However, revenue came in stronger than anticipated at $67.28 million, surpassing the forecast of $60.61 million by 11%. The company maintains an impressive 21.62% dividend yield, having raised its dividend for four consecutive years. Following the earnings announcement, the stock price declined by 1.46% to $13.54, reflecting investor concerns over the earnings miss.

InvestingPro analysis reveals 8 additional key insights about CGBD’s performance and outlook. Subscribers can access these exclusive tips and comprehensive financial metrics to make more informed investment decisions.

Key Takeaways

• Carlyle Secured Lending’s EPS fell short of expectations, while revenue exceeded forecasts.
• The company’s net asset value decreased slightly from the previous quarter.
• Carlyle reported the highest level of new and existing borrower investments since 2017.
• Market conditions are expected to tighten, with anticipated deal activity increasing in late 2025 and 2026.

Company Performance

Carlyle Secured Lending demonstrated resilience in its core operations despite a challenging environment. The company’s total investment income rose significantly to $67 million, driven by strategic investments and restructuring efforts. However, the net asset value per share decreased to $16.43 from $16.63 in the previous quarter, reflecting some pressure on asset valuations.

Financial Highlights

• Revenue: $67.28 million, up from the previous quarter and above forecasts.
• Earnings per share: $0.20, below the expected $0.3925.
• Net investment income: $28 million or $0.39 per share.
• Quarterly dividend: $0.40 per share, maintaining an 11% yield.
• Unrealized net loss: $14 million or $0.19 per share.

Earnings vs. Forecast

The company reported an EPS of $0.20, missing the forecast of $0.3925 by 49.04%. Despite this, revenue surpassed expectations by 11%, coming in at $67.28 million against a forecast of $60.61 million. This mixed performance highlights the challenges Carlyle faces in balancing profitability with growth.

Market Reaction

Following the earnings release, Carlyle’s stock price dropped by 1.46% to $13.54. The stock is trading closer to its 52-week low of $13.12, indicating investor caution. Analyst price targets range from $13.50 to $15.00, suggesting potential upside from current levels. The decline reflects concerns over the earnings miss despite strong revenue performance.

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Outlook & Guidance

Looking ahead, Carlyle anticipates a seasonal slowdown in origination activities during the third quarter, but remains optimistic about a robust deal pipeline in the fourth quarter and 2026. The company aims for mid-teens return on equity for its credit fund and is exploring additional joint venture opportunities. The quarterly dividend target of $0.40 per share is expected to be maintained.

Executive Commentary

CEO Justin Plough emphasized the company’s focus on core middle market investments in the U.S., stating, "We are focused on originating in the core middle market in The US." He expressed optimism about future investments, noting, "We see great companies coming to market, and we’re very optimistic about our ability to continue to invest with great companies."

Risks and Challenges

• Interest Rate Fluctuations: Potential headwinds from Federal Reserve rate cuts could impact investment returns.
• Market Spreads: Historically tight market spreads may limit profitability.
• Tariff Risks: Although exposure is less than 5%, tariff risks remain a concern.
• Asset Valuation: Decrease in net asset value per share indicates potential valuation pressures.

Q&A

During the earnings call, analysts questioned the impact of tight market spreads and market uncertainty on Carlyle’s operations. The management confirmed that there has been no material change in deal quality and discussed potential share buyback strategies. The company maintains a positive outlook on credit market opportunities despite current challenges.

Full transcript - Carlyle Secured Lending Inc (CGBD) Q2 2025:

Conference Operator: Thank you for standing by and welcome to Carlisle Secured Lending’s Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. I would now like to hand the call over to Nishal Mehta, Head of Investor Relations. Please go ahead.

Nishal Mehta, Head of Investor Relations, Carlisle Secured Lending: Good morning, and welcome to Carla Secured Lending’s conference call to discuss the earnings results for the 2025. I’m joined by Justin Plough, our Chief Executive Officer and Tom Hennigan, our Chief Financial Officer. Last night, we filed our Form 10 Q and issued a press release with a 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. Today’s conference call may include forward looking statements reflecting our views with respect to, among other things, the expected synergies associated with the merger, the ability to realize the anticipated benefits of the merger and our future operating results and financial performance. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors sections of our 10 ks and 10 Qs. 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.

During this conference call, the company may discuss certain non GAAP measures as defined by SEC Regulation G, such as adjusted net investment income or adjusted NII. The company’s management believes adjusted net investment income, adjusted net investment income per share, adjusted net income, and adjusted net income per share are useful to investors as an additional tool to evaluate ongoing results and trends and to review our performance without giving effect to the amortization or accretion resulting from a new cost basis on the investments acquired and accounted for under the acquisition method of accounting in accordance with ASC eight zero five and the one time purchase or non recurring investment income and expense events, including the effects on incentive fees and are used by management to evaluate the economic earnings of the company. A reconciliation of GAAP net investment income, the most directly comparable GAAP financial measure to adjusted NII per share can be found in the accompanying slide presentation for this call. In addition, a reconciliation of these measures may also be found in our earnings release filed last night with the SEC on Form eight ks. With that, I’ll turn the call over to Justin, CGVD’s Chief Executive Officer.

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Thanks, Nishal. Good morning, everyone, and thank you all for joining. I’m Justin Pluff, the CEO of the Carlyle BDCs and Deputy CIO for Carlyle Global Credit. On today’s call, I’ll give an overview of our second quarter twenty twenty five results, including the quarter’s investment activity and portfolio positioning. I’ll then hand the call over to our CFO, Tom Hennigan.

During the second quarter, CGBD benefited from growth in the overall portfolio, but was also impacted by historically tight market spreads. We generated $0.39 per share of net investment income for the quarter on both a GAAP basis and after adjusting for asset acquisition accounting. Our Board of Directors declared a third quarter dividend of $0.40 per share. Our net asset value as of June 30 was $16.43 per share compared to $16.63 per share as of March 31. Despite muted sponsor M and A activity, Carlyle Direct Lending achieved a platform wide deployment record with $2,000,000,000 in originations closed during the quarter.

At the CGBD level, we funded $376,000,000 of investments into new and existing borrowers, the highest level since our IPO in 2017, resulting in net investment activity of two thirty eight million dollars after accounting for repayments. Total investments at CGBD increased from $2,200,000,000 to $2,300,000,000 during the quarter after adjusting for $150,000,000 of investments sold to MMCF, our joint venture. Looking ahead, CGBD origination activity is expected to be somewhat slower in the third quarter due to the seasonal summer slowdown and delayed transaction timelines resulting from the market uncertainty that began in April. However, we see our pipeline rebuilding to a busier end of the year and remain optimistic for the fourth quarter. As trade policy evolves, we continue to monitor our portfolio for tariff exposure.

In line with last quarter, we believe that less than 5% of the portfolio has material direct risk from tariffs. Spreads in the private credit space remain at historically tight levels and when combined with potential Fed rate cuts, may present a headwind to near term earnings. Overall, we remain selective in our underwriting approach, seeking quality credits at the top of the capital structure. We remain focused on overall credit performance and portfolio diversification while maintaining target leverage in growing the credit fund. As of June 30, our portfolio was comprised of two zero two investments in 148 companies across more than 25 industries.

The average exposure to any single portfolio company was less than 1% of total investments and 94% of our investments were in senior secured loans. The median EBITDA across our portfolio was $92,000,000 As always, discipline and consistency drove performance in the second quarter. We expect these tenants to drive performance in future quarters. With that, I’ll now hand the call over to our CFO, Tom Hennigan.

Tom Hennigan, Chief Financial Officer, Carlisle Secured Lending: Thank you, Justin. Today, I’ll begin with an overview of our second quarter financial results. Then I’ll discuss portfolio performance before concluding with detail on our balance sheet position. Total investment income for the second quarter was $67,000,000 up significantly from prior quarter as a result of a higher investment portfolio balance attributable to the merger with CSL3, which closed at the end of Q1 and the purchase of Credit Fund II in mid February. Total expenses of $39,000,000 also increased versus prior quarter, primarily as a result of higher interest expense from a higher average outstanding debt balance, along with higher management and incentive fees, driven by growth in the size of the portfolio.

The result was net investment income for the second quarter of $28,000,000 or $0.39 per share on both the GAAP basis and after adjusting for asset acquisition account, which excludes the amortization of the purchase price premium from the CSL-three merger and the purchase price discount associated with the consolidation of Credit Fund II. This quarter’s earnings, which demonstrate the first full quarter of the combined CGBD and CSL-three portfolios, decreased by about $01 per share, as we continue to work towards achieving our target leverage levels at both CGBD and the NMCF JV. As previewed last quarter, the earnings power of the combined portfolio remains in the same range as pre combination Q1 CGBD earnings. Our Board of Directors declared the dividend for the 2025 at a level of $0.40 per share, which is payable to stockholders of record as of the close of business on September 30. This dividend level represents an attractive yield of over 11% based on the recent share price.

In addition, we currently estimate we have $0.89 per share of spillover income generated over the last five years. So we feel comfortable in our ability to maintain the quarterly dividend. On valuations, our total aggregate realized and unrealized net loss for the quarter was about $14,000,000 or $0.19 per share, partially attributable to unrealized markdowns on select underperforming investments. Turning to credit performance, we continue to see overall stability in credit quality across the portfolio, with some underperformance in a handful of names. On the metrics, the risk rating distribution remained relatively stable, with one name added to nonaccrual during the quarter, increasing nonaccruals to 2.1% of total investments at fair value.

At the July, we closed the successful restructuring of Maverick, which all else equal, decreases nonaccruals to 1% of total investments at fair value on a pro form a basis. And while our nonaccrual rates may fluctuate from period to period, we’re confident in our ability to leverage the broader Carlyle network to achieve maximum recoveries for underperforming borrowers. Moving to our credit fund. As previewed last quarter, we’ve been focused on maximizing both asset growth and returns at the MMCF JV over the last few quarters. As you can see from our investment activity, we continue to bolster the asset base, and we expect the MMCF JV dividend to achieve a run rate of mid teens ROE.

Separately, we continue to work on optimizing our non qualifying asset capacity and anticipate using this flexibility going forward for other strategic partnerships. I’ll finish by touching on our financing facilities and leverage. In July, we closed a small upsize to our primary revolving credit facility, increasing total commitments to $960,000,000 in total. At quarter end, statutory leverage was about 1.1 times, towards the midpoint of our target range. And given our current strong liquidity profile and targeted incremental sales to the MMCF JV, we’re well positioned to benefit from the expected pickup in deal volume in future quarters.

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

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Thanks, Tom. As we approach the middle of the third quarter, our portfolio remains resilient. We continue to focus on sourcing transactions with significant equity cushions, conservative leverage profiles and attractive spreads relative to market levels. Our pipeline of new originations is active. With a stable, high quality portfolio, CGBD stockholders are benefiting from the continued execution of our strategy.

As always, we remain committed to delivering resilient, stable cash flow stream to our investors through consistent income and solid credit performance. Finally, I’d like to conclude with some comments on a recently announced leadership addition. We are thrilled that Alex Chi will join Carlyle as partner, Deputy Chief Investment Officer for Global Credit and Head of Direct Lending in early twenty twenty six. Alex will lead Carlyle’s direct lending team and will work alongside global credit leadership to drive strategic decisions for Carlyle’s global credit business and the Carlyle Direct Lending platform. Alex joins Carlyle from Goldman Sachs where he spent more than thirty years serving in a variety of roles, most recently as co head of private credit within Goldman Sachs Asset Management and co chief executive officer and co president of the Goldman Sachs BDC Complex.

With Alex’s deep experience, proven leadership, and strong industry relationships, we are confident he will help us further accelerate the growth of our global credit business, including CGPD. I’d like to now hand the call over to the operator to take your questions. Thank you.

Conference Operator: Thank you. Our first question comes from the line of Eric Zwick of Lucid Capital Markets. Your line is open, Eric.

Eric Zwick, Analyst, Lucid Capital Markets: Thanks. Good morning. Thanks for taking my questions this morning. I wanted to start with maybe just a kind of a bigger picture question first and with regard to kind of the tighter spread environment that that you’re currently operating in, not just you, but the, you know, the entire sector. And curious from your seat, you know, what’s driven the tighter spreads over the past, you know, year or so and, what would it take to return to income maybe a more normal relative to historical level environment or do you think this is something that is likely to persist for the near to midterm?

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Eric, thanks for the question. Look, I think a couple of things. One, deal activity probably wasn’t as robust in the first half as we hoped it would be across the market. Now, we had a record deployment quarter for the second quarter, so we’re taking more market share. But I think what we’d really like to see across the market is increased deal activity.

Anecdotally, we’re optimistic about that for the rest of the year and into 2026, just from what we hear in people’s pipelines. But I also think that part of this is the fact that in 2022 and 2023, spreads were probably wider than you would expect in a mature market. I don’t think that this is necessarily about spreads going back to that level, but more just having them normalize with normal amount of deal activity with private equity sponsors entering the market in a more robust fashion the second half of the year. As I said, we’re optimistic about that deal activity coming to the market in Q4 and in 2026. I think there’ll be plenty of opportunities for us to invest.

Eric Zwick, Analyst, Lucid Capital Markets: I appreciate the commentary there. Just kind of following on the theme there with had a very strong quarter of originations in 2Q, but still remain very optimistic. It sounds like the pipeline remains robust. There’s a lot of kind of broader market uncertainty or concern about the trajectory of the economy. But it sounds like based on what you’re seeing, you’re seeing more opportunities, finding deals that you’re comfortable underwriting.

So I guess from your seat, is there anything that gives you any pause or concern about US economic environment going forward?

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Yeah. Look, I think that certainty is what our markets like to see. And any certainty that we get on things like tariff policy is a positive for our markets. But we’re very happy with the companies we’re investing in. As a BDC, of course, we’d like to see spreads be a little bit more in our favor.

But the real key to our long term performance is investing in great companies. And we’ve continued to be able to do that. We see great companies coming to market, and we’re very optimistic about our ability to continue to invest with great companies going forward.

Eric Zwick, Analyst, Lucid Capital Markets: That’s good to hear. And I think you addressed it in the prepared remarks, but just wanted to make sure I heard it correctly. With respect to the unrealized losses that were kind of recorded in the quarter. That sounds like those are more company specific and and not something broader. And if so, if you could just maybe, you know, add a little color to, you know, what what developed at those particular companies that resulted in the unrealized marks?

Tom Hennigan, Chief Financial Officer, Carlisle Secured Lending: Hey, Eric. Yeah, that was really, I’d say, when you look at that unrealized, it was probably 60%, 65% credit and then 30%, 35% just marketstechnical factors like deals repaying. I’d say really idiosyncratic, there were a handful, no specific very large movers, but just a handful of company specific credit situations where there’s underperformance, they were marked down. But we’re engaged, we’re appropriate with our workout team, with other lenders, with the sponsors, where we see stability in those names and or looking to get the companies in the right position that will have ultimate reasonable recoveries on those situations relative to where we’re marked today.

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Yeah, we certainly haven’t seen broader reasons to worry about credit in the market. They’re very specific situations in the book.

Eric Zwick, Analyst, Lucid Capital Markets: Got it. And then last one for me. In terms of the buyback authorization that you do have, and I know you’re very focused on growth, that’d be the preferred use of the capital today. But just how do you think about the opportunity given where the stock trades relative to NAV to potentially buy back shares?

Tom Hennigan, Chief Financial Officer, Carlisle Secured Lending: Yeah, Yeah, it’s something we didn’t have to think about last year. Over the last few months, it’s definitely something, as a management team, we’ve had more regular conversations. We’re in dialogue with our board of directors. You mentioned the last couple of years, we’ve been very focused on growth of our equity base, and culminated with the merge that we closed last quarter. So we get all benefits of scale, whether it be better liquidity in the stock, leveraging our expense base, better liability.

So we’re still very much focused on growth and focused on getting that share price back up to NAV, so we’re in position to grow. But certainly something we’re considering in terms of potential buybacks. Right now, there’s nothing in the imminent plan, but we’re certainly considering just based on where the stock has been trading.

Eric Zwick, Analyst, Lucid Capital Markets: Thanks for taking my questions today.

Conference Operator: Thank you. Our next question comes from the line of Finian O’Shea of Wells Fargo Securities. Your line is open Finian.

Finian O’Shea, Analyst, Wells Fargo Securities: Hey, everyone. Good morning. Tom, first question on the credit fund mid teens ROE. Does that indicate the $5,000,000 dividend or a different level?

Tom Hennigan, Chief Financial Officer, Carlisle Secured Lending: That indicates roughly we’ll see is we’ll be deploying more capital, and then we’ll be able to be in the range of, let’s say, 4.5 to 5.5 if we were utilized, perhaps a little bit higher when we utilized the full equity commitments. Right now, the fund has about $700,000,000 of total investments. With the current equity committed by both partners, we can not quite double that, but that’s certainly our plan longer term. So we think that we’ll see that dividend rate inch up some, probably not too much movement in the absolute dividend level from the JV one. What we are very focused on is potential other JVs and utilizing that non asset capacity.

Nothing imminent right now on that front, but we’re in dialogue with other partners for other JVs. And what I’d say is that that’s likely to be something leveraging the broader parallel network, not a great deviation for what we’ve been doing. But we’re looking at that as that asset capacity and the JVs in the aggregate certainly have a great stable base with JV one and looking to add to that. Was the second one.

Finian O’Shea, Analyst, Wells Fargo Securities: Yeah, it’s helpful. Thanks. I guess just a follow-up bigger picture. You talked about Alex coming on, growing the credit business, including the BDC, seeing if this suggests any sort of style drift, like do you want to get back to where you were? I know you were just at a premium, grow a little bit, of remain more specialty.

I know a lot of the origination this quarter looks pretty interesting. And as you just said, there are plans on the 30% bucket or do you want to go more into overdrive like some of the large market peers and issue maybe a lot on the ATM or secondary every quarter, which the flip side of that is it might ask that you go with a more modernized or lower fee. So seeing if you’re weighing those two items against each other and how we should think about that.

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Sure, Fin. No change to our strategy. We are focused on originating in the core middle market in The US. That’s going to continue to be the case. Alex brings tremendous experience in that area.

So this is just adding strength to strength. And as Tom mentioned, we certainly are considering adding to the JV program, but no change in overall strategy between now and when Alex comes or after Alex comes. We’re going to continue to provide the same type of investment exposure that we have in the past. And of course, we’d love to trade at a premium. But we’re in this for the long term investment returns and we think core middle market investing is where we could do the best for our investors.

Finian O’Shea, Analyst, Wells Fargo Securities: Awesome. All for me. Thanks so much.

Conference Operator: Thank you. Our next question comes from the line of Melissa Wedel of JPMorgan. Please go ahead, Melissa.

Melissa Wedel, Analyst, JPMorgan: Good morning. Thanks for taking my questions. I wanted to circle back to your comments about optimism for deployment in the second half. I want to make sure I heard you right. I got the impression from what you said that you’re particularly optimistic about 4Q versus 3Q.

Is that fair?

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Yes, that’s fair, Melissa. The 3Q is always a little bit muted in terms of closings on origination just because it’s the summer. But what we’re looking at is the pipeline of deals we have today. And we think for the rest of the year, we feel pretty good about it.

Melissa Wedel, Analyst, JPMorgan: Okay. And then sort of the flip side of that, as you see a pickup in activity, should we are you expecting proportionate pickup in repayments as well? So maybe sort of looking towards the net deployment back half, but maybe a little bit muted.

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: I’m not expecting or I don’t see reason in the market, I should say, to expect a significant change in prepayments in the second half. I think this is just more about new deal activity in the private equity space and the pipelines we’re seeing. And we’ll to see if it actually materializes. But right now, our pipelines are looking pretty good.

Melissa Wedel, Analyst, JPMorgan: Okay, appreciate that. And then I guess the final question for me, when you think about all of the growth plans that you have and potentially doing additional joint ventures and things like that, which can enhance the earnings profile. I’m also curious about how you think about the earnings power offset from potentially lower rates and what that might mean for your dividend, or the base dividend I should specify of $0.40 a share. Thanks.

Tom Hennigan, Chief Financial Officer, Carlisle Secured Lending: Yeah, sure. And we achieved the $0.39 penny shy. Right now, our crystal ball for the third quarter, we’re already a month in, is we’re going be in the same general territory. When you look at the potential pluses, on an average, our statutory leverage at quarter end was in the middle of our range, but on an average asset basis, on a daily basis, it was lower. So I think we’ve got just an upside in terms of leverage.

We mentioned non accruals, Maverick Arch, a large position, although that was restructured and will be a lower debt balance that we back on accrual. So there’s some potential positive, just on all non accruals. Our cost of debt, we’re going have some moving pieces with our baby bond, we’re likely going to issue another index eligible deal over the next few quarters. We have a higher priced legacy facility from CSL3 that we’re likely to repay. So net net on liabilities will probably be neutral all in.

And then we’ve got potential upside from the JVs, which we’re very focused on. And the one big headwind is obviously rates. And then although spreads have stabilized, when you look at overall portfolio spread, it continues to inch down a little bit, we feel okay on the overall spread side. So I think really it will be those various factors, a number of positives, but the JVs being in the longer term, a large growth driver in terms of our comfort with achieving that $0.40 Okay,

Melissa Wedel, Analyst, JPMorgan: I appreciate your candor there. One follow-up, I guess, one last follow-up for me on MAVERICK. I would assume, but I guess I’m asking this question, is it fair for us to think that the mark that you had there at 06:30 was very reflective of the July 3 restructuring economics?

Tom Hennigan, Chief Financial Officer, Carlisle Secured Lending: Yes. So our anticipation is, you’re gonna have a different capital structure. So you’re gonna have a lower debt quantum, you’re gonna have an equity holding, and the total fair value dollars will be equivalent, roughly the same. That’s our current dollars.

Melissa Wedel, Analyst, JPMorgan: Got it. Thanks so much.

Conference Operator: Thank you. Our next question comes from the line of Robert Dodd of Raymond James. Please go ahead, Robert.

Robert Dodd, Analyst, Raymond James: Hi, guys. Good morning. On the the kind of two things tied to kind of credit fund and the nonqual bucket, on what what do you think is a feasible timeline to kind of fully, relatively fully deploy the the or utilize the full equity in the current credit fund, particularly in light of the fact that you seem quite optimistic about the second half of the year and kind of q four, which obviously would be would create positive environment for kind of fully utilizing that vehicle. Mean, so if can give us any idea of what the the the the timeline is for for kind of maxing that one, the first one out.

Tom Hennigan, Chief Financial Officer, Carlisle Secured Lending: Based on the current equity base, our target, our goal was the next two or three quarters. Having worked on the first JV and realized we had an agreement inked and then took us nine months to negotiate, think we’ll be less than nine months. But in terms of actual economic benefit from any second JV, it would likely be a 2026 event just because they’re very complex structures and negotiating with the other partner, getting everything in the ground.

Robert Dodd, Analyst, Raymond James: Got Got it. Yeah. And to that to that point on on, like, another JV, would you be looking at kind of the same kind of conceptual structure? Right? Basically, the same kind of same kind of loans, different partner?

Or are you looking at at at slightly different? Like, I mean, obviously, you know, you can hold a lot international assets in a JV somewhat easier than on balance sheet sometimes, etcetera. I mean, is there any is is it just gonna be a, you know, for lack of a better term, a carbon copy of the first one just with a different partner or are you looking to do anything different with the second one?

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Yeah. Look, I’m not necessarily decided yet. What I will tell you is that we’re going to lean into our strengths within Carlyle Global Credit overall. So we have a lot of tools at our disposal in what we do with that JV or with that basket. And in some way, shape or form, I think it benefits our investors greatly to use all of the experience and the origination engine we have on our 200,000,000,000 global credit platform.

But right now, for the second JV, we’re considering options and we’ll just go with where we think we can produce the best value for the entity.

Robert Dodd, Analyst, Raymond James: Got it. Thank you. And then one one more if I can. On on the obviously, you know, deal flow, you you you seem quite quite positive. That’s that’s kind of a theme for for not just you.

And and quality wise, right, we’ve heard that there’s there’s been you know, there’s there’s a a significant mix in in the type of the quality of deals that are coming to market right now. I mean, how would you characterize? Obviously, were high enough quality for you in in in q two. So but looking looking forward, I mean, the the a plus kind of deals have been able to get done even during, you know, ’23, ’24. Right?

So is there there any mix shift in in terms of, like, the quality of of opportunities that are starting to enter the pipeline and maybe getting rejected, but starting to enter the flow in the ’25 and heading into ’26, do you think there’s going to be a mix, a quality mix shift?

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: No, we have not seen a material change in quality. The quality of the companies we’ve able to invest in has continued to be strong and the quality of the overall pipeline has continued to be strong. Certainly, we would prefer spreads to be a little wider than they are, and we’d prefer more deals in the market rather than less. But so far, I think quality has remained good, both in our pipeline and certainly in the investments we’re doing.

Robert Dodd, Analyst, Raymond James: Got it. Thank you.

Conference Operator: Thank you. I would now like to turn the conference back to Justin Pliffler for closing remarks. Sir?

Justin Plough, Chief Executive Officer, Deputy CIO for Global Credit, Carlyle BDCs: Well, thank you everyone for joining Hope it was helpful and we will talk to you next quarter.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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