Annual Statements Open main menu
  1. Annual Statements
  2. » Companies
  3. » Carlyle Secured Lending, Inc.
  4. » Annual Report: 2022 (Form 10-K)

Carlyle Secured Lending, Inc. - Annual Report: 2022 (Form 10-K)


Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to            
Commission File No. 000-54899
Carlyle Secured Lending, Inc.
(Exact name of Registrant as specified in its charter)
Maryland 80-0789789
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification Number)
One Vanderbilt Avenue, Suite 3400, New York, NY 10017
(Address of principal executive office) (Zip Code)
(212) 813-4900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareCGBDThe Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ☐    No  ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer 
x
  Accelerated filer ☐
Non-accelerated filer ☐   Smaller reporting company ☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
The aggregate market value of the registrant’s common stock at June 30, 2022, based on the closing price of the common stock on that date of $12.70 on The Nasdaq Global Select Market, held by those persons deemed by the registrant to be non-affiliates was approximately $658,013,822.
The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at February 24, 2023 was 50,820,785.
Documents Incorporated by Reference: Portions of the registrant’s Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference into Part III of this Form 10-K.


Table of Contents
CARLYLE SECURED LENDING, INC.
INDEX
 
Part I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Part II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Part IV
Item 15.
Item 16.


Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
We have included or incorporated by reference in this Form 10-K, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-K and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:
•our, or our portfolio companies’, future business, operations, operating results or prospects, including our and their ability to achieve our respective objectives, including as a result of large scale global events such as the COVID-19 pandemic;
•the return or impact of current and future investments;
•the general economy and its impact on the industries in which we invest;
•the impact of any protracted decline in the liquidity of credit markets on our business;
•the impact of fluctuations in interest rates on our business, including from the discontinuation of LIBOR and the implementation of alternatives to LIBOR;
•the valuation of our investments in portfolio companies, particularly those having no liquid trading market;
•the impact of supply chain constraints on our portfolio companies and the global economy;
•the current inflationary environment, and its impact on our portfolio companies and on the industries in which we invest;
•the impact on our business of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;
•our ability to recover unrealized losses;
•market conditions and our ability to access alternative debt markets and additional debt and equity capital;
•our contractual arrangements and relationships with third parties;
•uncertainty surrounding the financial stability of the United States, Europe and China;
•uncertainty surrounding Russia’s military invasion of Ukraine and the impact of geopolitical tensions, such as between China and the United States;
•competition with other entities and our affiliates for investment opportunities;
•the speculative and illiquid nature of our investments;
•the use of borrowed money to finance a portion of our investments;
•our expected financings and investments;
•the adequacy of our cash resources and working capital;
•the timing, form and amount of any dividend distributions;
•the timing of cash flows, if any, from the operations of our portfolio companies;
•the ability to consummate acquisitions;
•the ability of Carlyle Global Credit Investment Management L.L.C., our investment adviser (the “Investment Adviser”), to locate suitable investments for us and to monitor and administer our investments;
•currency fluctuations and the adverse effect such fluctuations could have on the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
•the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;
•the ability of The Carlyle Group Employee Co., L.L.C. to attract and retain highly talented professionals that can provide services to our investment adviser and administrator;
1

Table of Contents
•our ability to maintain our status as a business development company; and
•our intent to satisfy the requirements of a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.
We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” in Part I, Item 1A of and elsewhere in this Form 10-K.
We have based the forward-looking statements included in this Form 10-K on information available to us on the date of this Form 10-K, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.

2

Table of Contents
PART I
In this annual report, except where the context suggests otherwise:
•the terms “we,” “us,” “our,” “Company” and “CSL” refer to Carlyle Secured Lending, Inc. (formerly TCG BDC, Inc.), a Maryland corporation and its consolidated subsidiaries;
•the term “SPV” refers to TCG BDC SPV LLC, a wholly owned and consolidated subsidiary;
•the term “2015-1 Issuer” refers to Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC), a wholly owned and consolidated subsidiary;
•the term “Carlyle” refers to The Carlyle Group Inc. (formerly known as The Carlyle Group L.P.) (NASDAQ: CG) and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds);
•the term “CDL” refers to the Carlyle Direct Lending platform, which is Carlyle’s direct lending business unit that operates within the broader Carlyle Global Credit segment;
•the terms “CGCA” and “Administrator” refer to Carlyle Global Credit Administration L.L.C., our administrator, a wholly owned and consolidated subsidiary of Carlyle;
•the terms “CGCIM” and “Investment Adviser” refer to Carlyle Global Credit Investment Management L.L.C., a Delaware limited liability company and an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and a wholly owned and consolidated subsidiary of Carlyle, which serves as our investment adviser;
•the term “Credit Fund” refers to Middle Market Credit Fund, LLC, an unconsolidated limited liability company, in which we own a 50% economic interest and co-manage with Credit Partners USA LLC, and its wholly owned and consolidated subsidiary;
•the term “Credit Fund II” refers to Middle Market Credit Fund II, LLC, an unconsolidated limited liability company, in which we own an 84.13% economic interest and co-manage with Cliffwater Corporate Lending Fund ("CCLF"), and its wholly owned and consolidated subsidiary; and
•references to “this Form 10-K” are to our Annual Report on Form 10-K for the year ended December 31, 2022.
Item 1. Business
Carlyle Secured Lending, Inc., a Maryland corporation, is a specialty finance company that is a closed-end, externally managed, non-diversified management investment company. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). For U.S. federal income tax purposes, we have elected to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”). We were formed in February 2012, commenced investment operations in May 2013 and began trading on the Nasdaq Global Select Market, under the symbol “CGBD,” upon completion of our initial public offering in June 2017. Our principal executive offices are located at One Vanderbilt Avenue, Suite 3400, New York, New York 10017.
Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. Our core investment strategy focuses on lending to U.S. middle market companies, which we define as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. We seek to achieve our investment objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of our assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities).
We invest primarily in loans to middle market companies whose debt has been rated below investment grade, or would likely be rated below investment grade if such debt was rated. These securities, which are often referred to as “junk,” have
3

Table of Contents
predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. See Item 1A. “Risk Factors— Risks Related to Our Investments— Our investments are risky and speculative.”
Our investment approach is focused on capital preservation based on long-term fundamental credit performance. Our Investment Adviser’s investment team utilizes a rigorous, systematic, and consistent investment process, refined over Carlyle’s 35-year history investing in private markets across multiple cycles, designed to achieve enhanced risk-adjusted returns. In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including our Investment Adviser and its affiliates.
Our Investment Adviser
CGCIM, our Investment Adviser, manages our investment activities, including sourcing potential investments, conducting research and due diligence on prospective investments, analyzing and structuring our investments and monitoring our investments on an ongoing basis.
Our Investment Adviser is part of Carlyle’s Global Credit segment, and benefits from the more than 230 experienced investment professionals across the origination, capital markets, underwriting and portfolio management teams. Our Investment Adviser’s investment committee that oversees our investment activities comprises several of the most senior credit professionals within the Global Credit segment, with backgrounds and expertise across multiple asset classes with significant industry experience and tenure. The investment committee is responsible for reviewing and approving our investment opportunities. The members of the investment committee have experience investing through different credit cycles. The investment committee is led by Mark Jenkins, a Managing Director and Head of Global Credit at Carlyle.
Our Investment Adviser also serves, and may in the future serve, as investment adviser to other existing and future affiliated BDCs that have investment objectives similar to our investment objectives.
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act.
The Original Investment Advisory Agreement was amended on September 15, 2017 (as amended, the “First Amended and Restated Investment Advisory Agreement”) after the approval of the Company’s Board of Directors, including a majority of the Independent Directors, at an in-person meeting of the Board of Directors held on May 30, 2017 and the approval of the Company’s stockholders at a special meeting of stockholders held on September 15, 2017 and August 6, 2018 (as amended, the “Investment Advisory Agreement”). Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On May 9, 2022, the Company’s Board of Directors, including a majority of the Independent Directors, approved at an in-person meeting the continuance of the Company’s Investment Advisory Agreement with the Adviser for an additional one year term. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Adviser provides investment advisory services to the Company. For providing these services, the Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
Our base management fee is calculated at an annual rate of 1.50% of the average value of the Company’s gross assets at the end of the two most recently completed fiscal quarters; provided, however, the base management fee is calculated at an annual rate of 1.00% of the Company’s gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters. “Gross assets” is determined on a consolidated basis in accordance with generally accepted accounting principles in the United States, includes assets acquired through the incurrence of debt (see Note 7, Borrowings, and Note 8, Notes Payable, to the consolidated financial statements in Part II, Item 8 of this Form 10-K), and excludes cash and any temporary investments in cash-equivalents. For purposes of this calculation, cash and cash equivalent includes U.S. government securities and other high-quality investment grade debt investments that mature in 12 months or less from the date of investment. The base management fee is payable quarterly in arrears, will be appropriately adjusted for any share issuances or repurchases during such the applicable fiscal quarters, and will be appropriately pro-rated for any partial month or quarter.
4

Table of Contents
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.
Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
 
•no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;
•100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and
•17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.
Our Administrator
On April 3, 2013, the Company’s Board of Directors approved an administration agreement (the “Administration Agreement”) between the Company and CGCA, a Delaware limited liability company, (the “Administrator”). Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Compliance Officer and Chief Financial Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.
Unless terminated earlier, the Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On
5

Table of Contents
May 9, 2022, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
On April 3, 2013, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator ), provides our Administrator with access to Carlyle’s finance, operations, legal, compliance and administrative professionals..
On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street”), which was amended on March 11, 2015 (as amended, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”). Pursuant to the State Street Sub-Administration Agreement, State Street provides certain administrative and professional services. State Street also serves as our custodian Unless terminated earlier, the State Street Sub-Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On May 9, 2022, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the State Street Sub-Administration Agreement for a one year period. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
Carlyle
Our Investment Adviser and Administrator are affiliates of Carlyle. Carlyle is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $373 billion of assets under management (“AUM”) as of December 31, 2022, Carlyle’s teams invest across a range of strategies that leverage its deep industry expertise, local insights, and global resources to deliver attractive returns throughout an investment cycle. Carlyle employs nearly 2,100 employees, including more than 770 investment professionals in 29 offices across five continents, and serves more than 2,900 active carry fund investors from 88 countries.
Carlyle’s Global Credit segment, which had $146.3 billion in AUM as of December 31, 2022, advises products that pursue investment strategies across the credit spectrum, including: liquid credit, illiquid credit, and real assets credit, as well as platform initiatives such as Carlyle Tactical Private Credit Fund (“CTAC,” or the “Interval Fund”). Global Credit, which also includes Carlyle’s Insurance Solutions and Global Capital Markets businesses, has been Carlyle’s fastest-growing segment in the past four years, with total AUM nearly doubling in 2022 alone. Since the establishment of Global Credit in 1999, these various capital sources provide the opportunity for Carlyle to offer highly customizable and creative financing solutions to borrowers to meet their specific capital needs. Carlyle draws on the expertise and underwriting capabilities of 233 investment professionals dedicated to the Global Credit segment and leverages the resources and industry expertise of Carlyle’s global network to provide creative solutions for borrowers.
Primary areas of focus for Carlyle’s Global Credit segment include:
Liquid Credit
•Loans and Structured Credit. The structured credit funds invest primarily in performing senior secured bank loans through collateralized loan obligations (“CLOs”) and other investment vehicles. In 2022, in addition to the acquisition of the management contracts for the CBAM CLO portfolio, Carlyle closed six new U.S. CLOs and three CLOs in Europe with an aggregate size of $2.7 billion and $1.2 billion, respectively. As of December 31, 2022, Carlyle’s loans and structured credit team advised structured credit funds totaling approximately $50.4 billion in AUM.
Illiquid Credit
•Direct Lending. Carlyle’s direct lending business includes Carlyle’s BDCs that invest primarily in middle market first-lien loans (which include unitranche, “first out” and “last out” loans) and second-lien loans of middle-market companies, typically defined as companies with annual EBITDA ranging from $25 million to $100 million, that lack access to the broadly syndicated loan and bond markets. As of December 31, 2022, Carlyle’s direct lending investment team advised AUM totaling approximately $9.4 billion.
6

Table of Contents
•Opportunistic Credit. Carlyle’s opportunistic credit team invests primarily in highly-structured and privately-negotiated capital solutions supporting corporate borrowers through secured loans, senior subordinated debt, mezzanine debt, convertible notes, and other debt-like instruments, as well as preferred and common equity. The team will also look to invest in real estate and special situations (i.e., event-driven opportunities that exhibit hybrid credit and equity features) as well as market dislocations (i.e., primary and secondary market investments in liquid debt instruments that arise as a result of temporary market volatility). In certain investments, our funds may seek to restructure pre-reorganization debt claims into controlling positions in the equtiy of the reorganized companies. As of December 31, 2022, Carlyle’s opportunistic credit team advised products totaling approximately $12.8 billion in AUM.
Real Assets Credit
•Aircraft Finance. Carlyle Aviation Partners is Carlyle's multi-strategy investment platform that is engaged in commercial aviation aircraft financing and investment throughout commercial aviation industry. As of December 31, 2022, Carlyle Aviation Partners had approximately $11.5 billion in AUM across active carry funds, securitization vehicles, liquid strategies, and other vehicles.
•Infrastructure Debt. Carlyle’s Infrastructure debt team invests primarily in directly originated and privately negotiated debt instruments related to global infrastructure projects, primarily in the power, energy, transportation, water/waste, telecommunications and social infrastructure sectors. The team focuses primarily on senior, subordinated, and mezzanine debt and seeks to invest primarily in developed markets within the Organization for Economic Cooperation and Development (“OECD”). As of December 31, 2022, Carlyle’s infrastructure debt team managed approximately $3.7 billion in AUM.
Other Credit
•Platform Initiatives. Carlyle’s platform initiatives include CTAC, its closed-end interval fund which invests across Carlyle’s entire credit platform, as well as cross-platform separately managed accounts which are tailored to invest across Carlyle’s credit platform based on the specific needs of individual investors. These products also include structured solutions which focus on private, primarily investment-grade investments, backed by assets with contractual cash flows. As of December 31, 2022, the Global Credit platform initiatives represented $6.1 billion in AUM.
•Insurance Solutions. Carlyle Insurance Solutions (“CIS”) combines Carlyle’s deep insurance expertise with portfolio construction capabilities, capital sourcing and asset origination strengths to provide comprehensive liability funding/reinsurance, asset management and advisory solutions for (re)insurance companies and fund investors. The CIS team oversees Carlyle’s investment in Fortitude Re, as well as the strategic advisory services agreement with certain subsidiaries of Fortitude Re. As of December 31, 2022, AUM related to capital raised from third-party investors to acquire a controlling interest in Fortitude Re was $5.7 billion. As of December 31, 2022, AUM related to the strategic advisory services agreement was $45.2 billion, including the net asset value of investments in Carlyle products, which is also reflected in the AUM and fee-earning AUM of the strategy in which they are invested. Fortitude Re and certain Fortitude Re reinsurance counterparties have committed approximately $9.2 billion of capital to-date to various Carlyle strategies.
•Global Capital Markets. Carlyle Global Capital Markets (“GCM”) is a loan syndication and capital markets business that launched in 2018. The primary focus of GCM is to arrange, place, underwrite, originate and syndicate loans and underwrite securities of third parties and Carlyle portfolio companies through TCG Capital Markets L.L.C. and TCG Senior Funding L.L.C.. TCG Capital Markets L.L.C. is a FINRA registered broker dealer. GCM may also act as the initial purchaser of such loans and securities. GCM receives fees, including underwriting, placement, structuring, transaction and syndication fees, commissions, underwriting and original issue discounts, interest payments and other compensation, which may be payable in cash or securities or loans, in respect of the activities described above and may elect to waive such fees.

Strategic Relationships
We have established, and may in the future establish, strategic relationships that may diversify our product offering, increase our scale, enhance our origination capabilities or provide other benefits. To this end, in February 2016, we and Credit Partners USA LLC (“Credit Partners”), a wholly owned subsidiary of PSP Investments Holding USA LLC, an affiliate of a large Canadian pension fund, agreed to co-invest through Credit Fund, a joint venture primarily focused on investing in first lien loans to middle market companies. Since its inception and through December 31, 2022, Credit Fund has invested in over $3.2 billion (before any repayments or exits) of senior secured loans. We and Credit Partners each have 50% economic
7

Table of Contents
ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250 million each. Additionally, in November 2020, we and Cliffwater Corporate Lending Fund (“CCLF”), an investment vehicle managed by Cliffwater LLC, agreed to co-invest through Credit Fund II, a joint venture primarily focused on investing in senior secured loans of middle market companies. Since its inception and through December 31, 2022, Credit Fund II has invested in over $490.9 million (before any repayments or exits) of senior secured loans, including the initial portfolio of senior secured loans contributed by CSL. We and CCLF have 84.13% and 15.87% ownership in Credit Fund II, respectively.

Board of Directors
The Company’s Board of Directors currently consists of seven members, four of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Nominating and Governance Committee of the Board of Directors and a Compensation Committee, and may establish additional committees in the future.
Competitive Strengths
Carlyle Global Credit’s key competitive strengths are based on Carlyle’s integrated platform – with a breadth of capabilities, scale of capital and depth of expertise – which Carlyle believes allows it to mitigate competition and thereby improve our ability to deliver on the expectations of shareholders. We believe the following characteristics distinguish Carlyle’s capabilities in private credit:
•Proven Direct Origination Approach. Carlyle Direct Lending’s business directly originates nearly 100% of its investments, sourced from both the dedicated direct lending origination team as well as from the many adjacent capabilities across the Carlyle Global Credit platform. This origination approach has resulted in a strong and diversified flow of opportunities, approximately 1,500 per annum, from which Carlyle believes it can select investments with the best potential risk/reward characteristics.
•Breadth of Capabilities. Carlyle believes it has one of the broadest credit investment capabilities in the market today. As a global private credit platform, Carlyle has the ability to invest across the capital structure in first lien, unitranche, second lien, junior debt and preferred equity. Carlyle Global Credit can potentially serve as a one-stop shop, providing creative and holistic solutions for borrowers across the capital structure, which allows it to pursue investment opportunities with limited competition.
•Scale of Capital. With $146.3 billion of AUM as of December 31, 2022 across its platform, Carlyle Global Credit maintains a significant capital base that can provide a full capital solution, delivering certainty of execution for borrowers and mitigating opportunities for competitive disintermediation.
•Depth of Expertise. Carlyle is a market leading global platform with $373 billion of AUM, an experienced and tenured bench of more than 770 investment professionals with well-established, long-standing relationships with sponsors, management teams, and industry experts, as of December 31, 2022. Carlyle believes that it brings differentiated diligence insights and extensive experience to inform credit selection. As a firm, Carlyle seeks to bring the collective power of the global platform with respect to individual investments, including sector credit analysts, Carlyle Private Equity’s deep knowledge and relationships with potential customers, suppliers or competitors of a given company, and internal dedicated diligence groups (e.g., government affairs and environment, social and corporate governance (“ESG”)). Carlyle believes this integrated and collaborative approach allows it to move faster and with higher conviction than its competitors in many scenarios.
•Rigorous Credit Selection. Carlyle employs a robust, iterative and heavily documented underwriting process for its Direct Lending business, which consists of four “gates” where a credit is reviewed and requires sign-off, including (i) at the point of origination, (ii) by the underwriting team, (iii) by Carlyle Direct Lending’s screening committee (the “Direct Lending Screening Committee” or the “Screening Committee”) and finally (iv) by Carlyle’s illiquid credit investment committee at our Investment Adviser that oversees our investment activities (“Illiquid Credit Investment Committee” or “Investment Committee”). This rigorous diligence approach has allowed for a less than 3% closing rate on the approximately 1,500 transactions that were reviewed by the deal team over the past 12 months.
•Defensive Approach. Carlyle approaches the direct lending business with a defensive mindset that permeates all aspects of investment selection. On a strategic level, Carlyle seeks to construct well diversified portfolios, heavily weighted towards non-cyclical industries, and applies only moderate leverage at the portfolio level in order to seek to generate sustainable income levels. In addition, in individual asset selection, Carlyle favors sponsored over non-sponsored borrowers, seeks to transact with sponsors it knows well (approximately 80% of Carlyle Direct
8

Table of Contents
Lending’s business is with repeat sponsors), works with companies it knows well via its significant incumbencies, seeks opportunities at the top of the capital structure, and primarily invests in transactions where Carlyle maintains leadership or roles with significant influence (approximately 90% of originations having a titled role in recent years).
Market Opportunity
We believe the middle market lending environment provides attractive investment opportunities as a result of a combination of the following factors:
•Favorable Market Environment. We believe the middle market remains one of the most attractive investment areas due to its large size, superior value relative to the broadly syndicated loan market, and supply-demand imbalance that continues to favor non-bank lenders. We believe market yields remain attractive and leverage levels at middle market companies are stable, creating a favorable investment environment.
•Large and Growing U.S. Middle Market. The middle market direct lending asset class has undergone tremendous growth and maturation over the past decade and is one of the largest sub-segments of private credit, a now $1,400+ billion market. Carlyle believes this growth has been driven by fundamentally sound, secular drivers, including the expansion of private market activity, increased bank regulation and consolidation and structural changes in liquid credit markets, all of which create a significant opportunity for private credit investing.
•Benefits of Traditional Middle Market Focus. Carlyle believes that there are meaningful benefits to investing in middle market directly originated assets, which allows the strategy to generate excess return as compared to traditional fixed income asset classes, with comparable risk performance. The excess return is generated by prudently taking incremental complexity and illiquidity risk. Traditional middle market companies offer more attractive economics in the form of upfront fees, spreads and prepayment penalties. In addition, senior secured middle market loans typically have strong defensive characteristics and structural protections, including priority in the capital structure and covenants, with a majority of middle market loans structured with financial covenants relative to the broadly syndicated markets. Additional protection may be gained through better credit documentation and control, enhanced management and diligence access, monitoring of assets, and significantly more influence in the instance of a workout scenario.
•Market Environment Favors Non-Traditional Lenders. The direct lending asset class has also benefited from an ongoing secular trend in the banking industry. Post Great Financial Crisis (“GFC”) in 2008, as tougher regulations have reshaped the landscape, traditional banks have reduced their lending capabilities by nearly 50% over the past ten years. As banks have retreated due to a number of new laws, regulations and regulatory guidance, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the federal bank regulatory agencies’ leveraged lending guidelines and Basel III regulatory capital framework, institutional investors have increased their lending capabilities to fill the void. Post-GFC, institutional investors now originate over 80% of primary leveraged loan issuances in the U.S., generating an incremental capital opportunity for the asset class.
•Favorable Capital Markets Trends. Over the past two decades, Carlyle has witnessed a secular trend with respect to the shift in economic activity from public to privately owned businesses due to less appetite for public market exposure. The number of public companies in the U.S. has dropped by over 50% from its peak, with a mirror image increase in the rise of private equity-backed companies. Overall public listing activity has declined by approximately two-thirds over the past forty years. These privately owned companies often prefer to finance themselves through the private markets, which has allowed for a natural expansion of the market opportunity for direct lenders on a secular basis for over a decade. Given current market dynamics, Carlyle believes that the asset class will continue to expand.
Investment Strategy
We primarily target loans to U.S.-based middle market companies that require capital for growth, acquisitions, recapitalizations, and refinancings, with a focus on companies controlled by private equity investment firms. In addition, we may also make investments in non-private equity owned public or private companies of various sizes; as well as invest in certain non-U.S.-based borrowers. We seek to partner with strong management teams executing long-term, value-maximizing strategies. Target investments typically exhibit some or all of the following characteristics:
•Borrowers with EBITDA of $25–$100 million;
•Leading market positions;
9

Table of Contents
•Defensible business strategies with significant barriers to entry;
•Diversified product offerings, customer bases and supplier profiles;
•Experienced management teams with successful track records;
•Significant valuation cushion, typically expressed as a significant equity investment from a financial sponsor;
•Demonstrated stability and/or growth of revenue;
•Predictable cash flows with limited risks of disruption;
•Low capital expenditures requirements; and
•A North American base of operations.
While we believe that the criteria listed above are important in identifying and investing in prospective portfolio companies, not all of these criteria will be necessarily met by each prospective portfolio company. In addition, we may change our investment objective, investment strategy and/or investment criteria over time without notice to or consent from our investors.
Investment Criteria and Transactional Structures
We invest primarily in transactions supported by private equity sponsors. We seek to invest in the following types of assets, with an emphasis on senior debt:
•traditional cash flow senior secured debt;
•unitranche senior secured debt financings;
•“last out” unitranche debt;
•second lien senior debt;
•traditional subordinated debt;
•preferred and common equity co-investments; and
•secondary and other opportunistic asset purchases.
As noted above, we may also from time to time participate in traditional subordinated debt financings, preferred and common equity co-investments. We may also make secondary purchases of all of the above types of investments and other securities on an opportunistic basis.
Investment Process
Origination
The direct lending investment team’s multi-channel origination model generates attractive investment opportunities through a variety of sources, including over 250 private equity firms, financial institutions, other middle market lenders, strategic relationships and arrangements, financial advisors, and experienced management teams. The origination team supplements these relationships through personal visits and marketing campaigns focused on maximizing investment deal flow. It is their responsibility to identify specific opportunities, refine opportunities through candid exploration of the underlying facts and circumstances and to apply creative and flexible solutions to solve a borrower or sponsor’s financing needs. The team of origination professionals are located in New York, Chicago, Boston and Los Angeles. Each originator maintains long-standing relationships with potential sources of deal flow and is responsible for covering a specified target market, organized by geography and secondarily by sector. Carlyle believes the originators’ strengths and breadth of relationships across a wide range of markets generate numerous financing opportunities, which enable it to be highly selective through its diligence and investment process, with less than 3% of total deals screened over the past 12 months closing. The direct lending investment team has cultivated very strong relationships with private equity sponsors with whom it works closely in sourcing and executing transactions. Carlyle believes that borrowers benefit from full financing solutions, access to the vast Carlyle network, and reliable execution.
Underwriting
The underwriting process is led by an experienced team of senior underwriters that are organized by sector and benefit from a deep base of shared information enabled by platform integration, as well as Carlyle resources. The typical deal timeline is sixty to ninety days and follows a multi-faceted four-step process:
10

Table of Contents

1.Screening. The deal team reviews marketing materials and industry reports, compiles debt and equity comparables, reaches out to industry experts within the Carlyle network, identifies key credit strengths and risks and formulates a view on structure. The deal team then presents an initial analysis through a screening memo to the Screening Committee for high-level feedback and a decision to move forward with additional credit work. The Screening Committee is comprised of the Head of Direct Lending, Chief Investment Officer, Chief Risk Officer, Head of Sponsor Coverage, Deputy Chief Investment Officer, and two additional senior Managing Directors. Based on feedback from the committee, the deal team will prepare and disseminate an outcomes email that documents the takeaways from the meeting, including preferred financing structure as well as terms, key diligence items and next steps.
2.Formal Review. Following an indication from the Screening Committee to move forward in the diligence process, the deal team will compile a detailed diligence list and prepare for in-depth credit analysis. During this process, the deal team works closely with the private equity sponsor / borrower in all aspects of due diligence. Formal due diligence includes meeting with the management team, reviewing the data room and performing key financial analyses, creating a detailed financial model with sensitivities assuming various market environments, reviewing sell-side and third-party research, which includes industry reports and financial diligence, following up with industry experts within the Carlyle network for additional feedback, and drafting the commitment papers and term sheet.
As part of the extensive due diligence process, the deal team fully leverages all internal Carlyle resources to aid in investment decisions. In addition, the deal team may utilize third-party expert networks to supplement their work to gain further insight into company and industry factors from various thought leaders across the company’s markets.
Our Investment Adviser incorporates formal ESG reviews into its investment process. All deals are thoroughly vetted leveraging sector- and sub-sector-specific Sustainability Accounting Standards Board standards. ESG diligence incorporates country risk assessments for corruption and anti-money laundering concerns as well. The underwriters are responsible for assessing these ESG risks and including their assessment in the deal memo that the Screening and Investment Committees will review.
The formal review part of the process is iterative and involves re-screening with members of the Screening Committee, typically two to four times over the course of the deal, to produce a fulsome investment memo and provide a full term sheet and commitment papers, subject to outstanding diligence items.
3.Final Investment Committee Approval. After the Screening Committee has signed off on the investment memo, the deal team prepares for the Investment Committee approval process. The deal team reviews and summarizes final third-party industry work, performs outstanding ESG and regulatory due diligence, and begins drafting the definitive legal documentation for the transaction. Once the credit work for the transaction has been finalized, the deal team will finalize the investment memo and present the investment to the Investment Committee, where approval by a majority of the committee is required to approve a transaction. The Investment Committee has delegated approval of certain amendments, follow-on investments with existing borrowers, investments below certain size thresholds (existing or new platforms), and other matters as determined by the Investment Committee to the Screening Committee.
4.Closing. Once the investment has been approved and prior to funding, the deal team will prepare a closing memo documenting any updates since approval, changes to key legal terms, and the final financial covenant analysis. Once the sponsor / borrower legal diligence, and the know your customer, anti-money laundering and legal documentation have been finalized, the transaction will close and fund.
The deal team focuses on lending to companies that it believes are performing, high quality businesses with a focus on strong fundamentals, market leadership with unique competitive advantages and high barriers to entry, positive cash flow generation on a historical and pro-forma basis including downside scenarios, and modest loan-to-value across economic cycles. The deal team crafts a fulsome memo with pages including, but not limited to, diligence completed on a variety of industry, company-specific, financial and legal topics.
Portfolio and Risk Management
The investment team views proactive portfolio monitoring as a vital part of its investment process, which includes the ongoing review of a borrower by portfolio management, underwriting and workout professionals, with multiple layers of risk review and oversight. The investment team follows a rigorous monitoring strategy that utilizes a proprietary dashboard template for each transaction, which tracks financial performance, covenant compliance, follow-on transactions and amendments, and real-time updates to internal risk ratings based on qualitative and quantitative factors. The portfolio management process
11

Table of Contents
involves a variety of ongoing and scheduled reviews that allow for early detection of issues and escalation to the Investment Committee and workout team to avoid credit losses. This process includes detailed portfolio dashboard updates, monthly reviews of certain investments, quarterly meetings to conduct formal portfolio reviews, focused on technical analysis of financial performance and portfolio diversification, and ongoing ad-hoc meetings to handle borrower-specific requests, including follow-on transactions and amendments.
In connection with the quarterly portfolio reviews, the investment team also compiles a quarterly risk report that examines, among other things, migration in the portfolio and loan level investment mix, industry diversification, internal risk ratings, revenue and EBITDA and leverage.
Frequency of review of individual loans is determined on a case-by-case basis, based on internal risk ratings as laid out below, total exposure and other criteria set forth by the Investment Committee. The direct lending team has developed an internal risk policy which regularly assesses the risk profile of each investment and rates them based on the following categories, which are referred to as internal risk ratings.
Rating  Definition
1
Borrower is operating above expectations, and the trends and risk factors are generally favorable.
2
Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost basis is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.
3
Borrower is operating below expectations and level of risk to our cost basis has increased since the time of origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.
4
Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.
5
Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.
Beyond the policies detailed above, our Investment Adviser’s investment team performs analyses and projections to assess potential exposure of the portfolio to variable macroeconomic factors and market conditions. Sample analyses include assessing (i) the impact of rising operating costs on our borrowers and end consumers due to elevated inflation, particularly in food and energy, (ii) volatility in foreign exchange rates, (iii) Russia’s military invasion of Ukraine, (iv) interest rate sensitivity, (v) disruptions in our supply chain and (vi) the ongoing effects of the COVID-19 pandemic. These analyses can take the form of periodic (weekly/monthly/quarterly) reports as well as ad hoc analysis based on current market conditions.
Portfolio Composition
As of December 31, 2022 and 2021, the fair value of our investments was approximately $1,980 million and $1,913 million, respectively, in 134 and 117 portfolio companies/investment funds, respectively. The type, geography and industry
12

Table of Contents
composition of our investments, each as a percentage of the fair value of our investments as of December 31, 2022 and 2021, were as follows:
 As of December 31,
Type—% of Fair Value20222021
First Lien Debt68.6 %64.4 %
Second Lien Debt13.3 17.9 
Equity Investments4.8 4.0 
Investment Funds13.3 13.7 
Total100.0 %100.0 %
 As of December 31,
Type—% of Fair Value of First and Second Lien Debt20222021
Floating Rate98.5 %98.4 %
Fixed Rate1.5 1.6 
Total100.0 %100.0 %
 As of December 31,
Geography—% of Fair Value20222021
Australia0.1 %— %
Canada2.4 2.5 
Cyprus0.4 0.4 
Italy0.3 0.3 
Luxembourg2.0 2.0 
Sweden— — 
United Kingdom3.5 5.0 
United States91.3 89.8 
Total100.0 %100.0 %
13

Table of Contents
 As of December 31,
Industry—% of Fair Value20222021
Aerospace & Defense6.9 %8.7 %
Automotive4.4 4.9 
Beverage & Food3.6 4.4 
Business Services4.7 5.4 
Capital Equipment3.1 3.5 
Chemicals, Plastics & Rubber3.9 3.2 
Construction & Building1.2 0.6 
Consumer Goods: Durable— — 
Consumer Goods: Non-Durable0.5 0.3 
Consumer Services5.7 1.4 
Containers, Packaging & Glass2.2 2.7 
Diversified Financial Services3.9 5.1 
Energy: Oil & Gas1.7 2.2 
Environmental Industries2.9 3.6 
Healthcare & Pharmaceuticals11.9 12.0 
High Tech Industries6.9 7.9 
Investment Funds13.3 13.7 
Leisure Products & Services5.7 5.9 
Media: Advertising, Printing & Publishing— 0.4 
Media: Diversified & Production1.0 1.0 
Metals & Mining0.4 0.1 
Retail1.6 2.4 
Software8.9 5.5 
Sovereign & Public Finance— 0.7 
Telecommunications3.6 4.0 
Transportation: Cargo0.4 — 
Utilities: Electric— — 
Wholesale1.6 0.4 
Total100.0 %100.0 %
See the Consolidated Schedules of Investments as of December 31, 2022 and 2021 in our consolidated financial statements in Part II, Item 8 of this Form 10-K for more information on these investments, including a list of companies and type, cost and fair value of investments.
Allocation of Investment Opportunities and Potential Conflicts of Interest
Our Investment Adviser, its investment professionals, our executive officers and directors, and other current and future principals of our Investment Adviser serve or may serve as investment advisers, officers, directors or principals of entities or investment funds that operate in the same line of business as we do or a related line of business and/or investment funds, accounts and other similar arrangements advised by Carlyle.
An affiliated investment fund, account or other similar arrangement currently formed or formed in the future and managed by our Investment Adviser or its affiliates may have overlapping investment objectives and strategies with our own and, accordingly, may invest in asset classes similar to those targeted by us. This creates potential conflicts in allocating investment opportunities among us and such other investment funds, accounts and similar arrangements, particularly in circumstances where the availability or liquidity of such investment opportunities is limited or where co-investments by us and other funds, accounts or arrangements are not permitted under applicable law, as discussed below.
For example, Carlyle sponsors several investment funds, accounts and other similar arrangements, including, without limitation, structured credit funds, closed-end registered investment companies, BDCs, carry funds, and managed accounts and
14

Table of Contents
structured credit funds it may sponsor in the future. The SEC has granted us exemptive relief that permits us and certain of our affiliates to co-invest in suitable negotiated investments (the “Exemptive Relief”). If Carlyle is presented with investment opportunities that generally fall within our investment objective and other board-established criteria and those of other Carlyle funds, accounts or other similar arrangements (including other existing and future affiliated BDCs), whether focused on a debt strategy or otherwise, Carlyle allocates such opportunities among us and such other Carlyle funds, accounts or other similar arrangements in a manner consistent with the Exemptive Relief, our Investment Adviser’s allocation policies and procedures and Carlyle’s other allocation policies and procedures, where applicable, as discussed below. More specifically, investment opportunities in suitable negotiated investments for investment funds, accounts and other similar arrangements managed by our Investment Adviser, and other funds, accounts or similar arrangements managed by affiliated investment advisers that seek to co-invest with us or other Carlyle BDCs, are allocated in accordance with the Exemptive Relief. Investment opportunities for all other investment funds, accounts and other similar arrangements not managed by our Investment Adviser are allocated in accordance with their respective investment advisers’ and Carlyle’s other allocation policies and procedures. Such policies and procedures may result in certain investment opportunities that are attractive to us being allocated to other funds that are not managed by our Investment Adviser. Carlyle’s, including our Investment Adviser’s, allocation policies and procedures are designed to allocate investment opportunities fairly and equitably among its clients over time, taking into account a variety of factors which may include the sourcing of the transaction, the nature of the investment focus of each such other Carlyle fund, accounts or other similar arrangements, each fund’s, account’s or similar arrangement’s desired level of investment, the relative amounts of capital available for investment, the nature and extent of involvement in the transaction on the part of the respective teams of investment professionals, any requirements contained in the limited partnership agreements and other governing agreements of the Carlyle funds, accounts or other similar arrangements and other considerations deemed relevant by Carlyle in good faith, including suitability considerations and reputational matters. The application of these considerations may cause differences in the performance of different Carlyle funds, accounts and similar arrangements that have similar strategies.
Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle.
We are also not permitted to make any co-investments with clients of our Investment Adviser or its affiliates (including any fund managed by Carlyle) without complying with our Exemptive Relief, subject to certain exceptions, including with respect to our downstream affiliates. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Adviser’s and Carlyle’s other allocation policies and procedures.
While Carlyle and our Investment Adviser seek to implement their respective allocation processes in a fair and equitable manner under the particular circumstances, there can be no assurance that it will result in equivalent allocation of or participation in investment opportunities or equivalent performance of investments allocated to us as compared to the other entities. In some cases, due to information barriers that are in place, we and other Carlyle investment funds, accounts or other similar arrangements may compete with each other for specific investment opportunities without being aware that they are competing with each other. Carlyle has a conflict system in place above these information barriers to identify potential conflicts early in the process and determine if an allocation decision needs to be made or if an investment is precluded. If the conflicts system detects a potential conflict, the legal and compliance departments of Carlyle assess investment opportunities to determine whether a particular investment opportunity is required to be allocated to a particular investment fund, account or other similar arrangement (including us) or is prohibited from being allocated to a particular investment fund, account or similar arrangement. Subject to a determination by the legal and compliance departments (if applicable), portfolio management teams and, as applicable, the Investment Adviser's allocation committees, are then charged with ensuring that investment opportunities are allocated to the appropriate investment fund, account or similar arrangement in accordance with our Investment Adviser's allocation policies and procedures. In addition, in some cases Carlyle and our Investment Adviser may make investment recommendations to investment funds, accounts and other similar arrangements where the investment funds, accounts and other similar arrangements make the investment independently of Carlyle and our Investment Adviser. As a result, there are circumstances where investments appropriate for us are instead allocated, in whole or in part, to such other investment funds, accounts or other similar arrangements irrespective of our Investment Adviser’s and Carlyle’s other policies and procedures regarding allocation of investments. Where Carlyle otherwise has discretion to allocate investment opportunities among various funds, accounts and other similar arrangements, it should be noted that Carlyle may determine to allocate such investment opportunities away from us.
During periods of unusual market conditions, our Investment Adviser may deviate from its normal trade allocation practices. For example, this may occur with respect to the management of unlevered and/or long-only investment funds,
15

Table of Contents
accounts or similar arrangements that are typically managed on a side-by-side basis with levered and/or long-short investment funds, accounts or similar arrangements.
For potential conflicts of interest in allocating investment opportunities among the Company and other investment funds, accounts or similar arrangements advised by Carlyle, see Item 1A. “Risk Factors—Risks Related to Our Business and Structure—There are significant potential conflicts of interest, including the management of other investment funds and accounts by our Investment Adviser, which could impact our investment returns and the holders of our common stock.”
Election to be Taxed as a RIC
We have elected to be treated, and intend to continue to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. As a RIC, we generally will not pay corporate-level U.S. federal income taxes on any net ordinary income or capital gains that we timely distribute to our stockholders as dividends. Instead, dividends we distribute generally will be taxable to the holders of our common stock, and any net operating losses, foreign tax credits and other tax attributes may not pass through to the holders of our common stock. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, we must distribute to our stockholders on an annual basis at least 90% of our investment company taxable income (generally, our net ordinary income plus the excess of our realized net short-term capital gains over realized net long-term capital losses, determined without regard to the dividends paid deduction) for any taxable year (the “Annual Distribution Requirement”). The following discussion assumes that we qualify as a RIC and have satisfied the Annual Distribution Requirement. If we (1) qualify as a RIC, and (2) satisfy the Annual Distribution Requirement, then we are not subject to U.S. federal income tax on the portion of our net taxable income we distribute (or are deemed to distribute) to stockholders. We are subject to U.S. federal income tax at regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our stockholders.
In addition, if we fail to distribute in a timely manner an amount at least equal to the sum of (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year (the “Excise Tax Distribution Requirements”), we are liable for a 4% excise tax on the portion of the undistributed amounts of such income that are less than the amounts required to be distributed based on the Excise Tax Distribution Requirements. For this purpose, however, any ordinary income or capital gain net income retained by us that is subject to corporate income tax for the tax year ending in that calendar year is considered to have been distributed by year end (or earlier if estimated taxes are paid).
In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:
 
•continue to qualify as a BDC under the Investment Company Act at all times during each taxable year;
•derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities or foreign currencies, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities or foreign currencies (the “90% Gross Income Test”); and
•diversify our holdings so that at the end of each quarter of the taxable year:
◦at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and
◦no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, or two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses, or of certain “qualified publicly traded partnerships” (the “Diversification Tests”).
Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our qualification as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Distribution Requirements, we may make such dispositions at times that, from an investment standpoint, are not advantageous. If we are prohibited from making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions, we may not be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of ordinary income rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from
16

Table of Contents
making capital gain distributions as described below. We intend to monitor our transactions, make the appropriate tax elections and make the appropriate entries in our books and records when we make any such investments in order to mitigate the effect of these rules.
A RIC is limited in its ability to deduct expenses in excess of its “investment company taxable income” (which is, generally, ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If our expenses in a given year exceed gross taxable income, we would have a net operating loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent years. In addition, expenses can be used only to offset investment company taxable income, not net capital gain. Due to these limits on the deductibility of expenses, we may for U.S. federal income tax purposes have aggregate taxable income for several years that we distribute and that is taxable to our stockholders even if such income is greater than the aggregate net income we actually earned during those years. Such distributions may be made from our cash assets or by liquidation of investments, if necessary. We may realize gains or losses from such liquidations. In the event we realize net capital gains from such transactions, a holder may receive a larger capital gain distribution than the holder would have received in the absence of such transactions.
Regulation
General—Regulation as a Business Development Company
We have elected to be regulated as a BDC under the Investment Company Act and have elected to be treated as a RIC under the Code. A BDC must be organized in the United States for the purpose of investing in or lending to primarily private companies and must offer, and must provide upon request, significant managerial assistance available to them. A BDC may use capital provided by public stockholders and from other sources to make long-term, private investments in businesses. A publicly-traded BDC provides stockholders with the ability to retain the liquidity of a publicly traded stock while sharing in the possible benefits, if any, of investing in primarily privately owned companies.
We may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority of the outstanding voting securities, as required by the Investment Company Act. A majority of the outstanding voting securities of a company is defined under the Investment Company Act as the lesser of: (a) 67% or more of such company’s voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (b) more than 50% of the outstanding voting securities of such company. We do not anticipate any substantial change in the nature of our business.
As with other companies regulated by the Investment Company Act, a BDC must adhere to certain substantive regulatory requirements. A majority of our directors must be persons who are not “interested persons,” as that term is defined in Section 2(a)(19) of the Investment Company Act (such directors are referred to as the “Independent Directors” and the directors who are not Independent Directors are referred to as the “Interested Directors”). We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.
The Investment Company Act contains prohibitions and restrictions relating to certain transactions between BDCs and certain affiliates (including any investment advisers or sub-advisers), principal underwriters and certain affiliates of those affiliates or underwriters. Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle. We are also not permitted to make any co-investments with our Investment Adviser or its affiliates (including any fund managed by Carlyle) without complying with our Exemptive Relief, subject to certain exceptions, including with respect to our downstream affiliates. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Adviser’s allocation policies and procedures.
As a BDC, we are generally required to meet a minimum “asset coverage” ratio after each issuance of senior securities. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock. On April 9, 2018 and June 6, 2018, our Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and our stockholders, respectively, approved the application to us of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the 1940 Act. As a result, the minimum asset coverage
17

Table of Contents
ratio applicable to us was reduced from 200% to 150%, effective as of June 7, 2018, the first day after our 2018 annual meeting of stockholders.
We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an “underwriter” as that term is defined in the Securities Act of 1933, as amended (the “Securities Act”). Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities of our portfolio companies. We may enter into hedging transactions to manage the risks associated with interest rate and currency fluctuations. We may purchase or otherwise receive warrants or options to purchase the common stock of our portfolio companies in connection with acquisition financings or other investments. In connection with such an acquisition, we may acquire rights to require the issuers of acquired securities or their affiliates to repurchase them under certain circumstances.
We do not intend to acquire securities issued by any investment company that exceed the limits imposed by the Investment Company Act. Under these limits, except for registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company (unless certain conditions are satisfied), invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate. The portion of our portfolio invested in securities issued by investment companies ordinarily will subject our stockholders to additional indirect expenses. Our investment portfolio is also subject to diversification requirements by virtue of our intended status to be a RIC for U.S. tax purposes. See Item 1A. “Risk Factors—Risks Related to Our Business and Structure” for more information.
On April 12, 2022, we changed our name from TCG BDC, Inc. to Carlyle Secured Lending, Inc. In connection therewith, we have adopted a policy to invest, under normal circumstances, at least 80% of our total assets (net assets plus borrowings for investment purposes) in secured debt investments or instruments that provide investment exposure to secured debt investments, including through investment vehicles that typically invest at least 80% of their total assets in secured debt investments. This policy may be changed with 60 days’ prior notice to our shareholders. None of our investment policies are fundamental, and thus may be changed without shareholder approval.
In addition, investment companies registered under the Investment Company Act and private funds that are excluded from the definition of “investment company” pursuant to either Section 3(c)(1) or 3(c)(7) of the Investment Company Act may not acquire directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition), unless the funds comply with an exemption under the Investment Company Act. As a result, certain of our investors may hold a smaller position in our shares than if they were not subject to these restrictions.
We are generally not able to issue and sell our common stock at a price below net asset value ("NAV") per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current NAV of our common stock if our Independent Directors determine that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. In any such case, the price at which our common stock is to be issued and sold may not be less than a price that, in the determination of our Independent Directors, closely approximates the market value of such shares (less any distributing commission or discount). In addition, we may generally issue new shares of our common stock at a price below NAV in rights offerings to existing stockholders, in payment of dividends and in certain other limited circumstances. Pursuant to approval granted at a special meeting of stockholders held on August 3, 2022, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on August 3, 2023. See Item 1A. “Risk Factors—Risks Related to Our Business and Structure—Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage” and “—The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.”
We are subject to periodic examination by the SEC for compliance with the Investment Company Act.
As a BDC, we are subject to certain risks and uncertainties. See Item 1A. “Risk Factors—Risks Related to Our Business and Structure.”
18

Table of Contents
Qualifying Assets
As a BDC, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies and certain public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. Specifically, as part of this 30% basket, we may invest in entities that are not considered “eligible portfolio companies” (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act.
Managerial Assistance to Portfolio Companies
    As a BDC, we must offer, and must provide, upon request from our portfolio companies, significant managerial assistance to certain of our portfolio companies. This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. Our Investment Adviser may provide all or a portion of this assistance pursuant to our administration agreement, the costs of which will be reimbursed by us. We may receive fees for these services.
Temporary Investments
Pending investment in other types of “qualifying assets,” as described above, our investments may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as “temporary investments,” so that 70% of our assets are qualifying assets. We may also invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price which is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our gross assets constitute repurchase agreements from a single counterparty, we would not meet the diversification tests in order to qualify as a RIC. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our Investment Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.
Indebtedness and Senior Securities
We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 150% immediately after each such issuance. In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see Item 1A. “Risk Factors—Risks Relating to Our Business and Structure—Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage” and “—We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.”
Codes of Ethics
We have adopted a code of ethics pursuant to Rule 17j-1 under the Investment Company Act and our Investment Adviser has adopted a code of ethics pursuant to Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the Advisers Act, respectively (collectively, the “Rule 17j-1 Codes of Ethics”), which establish procedures for personal investments and restricts certain transactions and apply to, among others, our Chief Executive Officer and Chief Financial Officer. The Rule 17j-1Codes of Ethics generally do not permit investments by personnel subject to them in securities that may be purchased or sold by us. The Rule 17j-1 Codes of Ethics are filed with the SEC (www.sec.gov).
We have also adopted a Code of Ethics for Principal Executive and Senior Financial Officers under the Sarbanes-Oxley Act of 2002 (the “SOX Code of Ethics”), which applies to, among others, our Chief Executive Officer and Chief Financial Officer. The SOX Code of Ethics is available free of charge on our website (http://www.tcgbdc.com).
19

Table of Contents
There have been no material changes to the Rule 17j-1 Codes of Ethics or the SOX Code of Ethics or material waivers of the codes that apply to our Chief Executive Officer or Chief Financial Officer.
Compliance Policies and Procedures
We and our Investment Adviser have each adopted and implemented written policies and procedures reasonably designed to detect and prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation. Our Chief Compliance Officer is responsible for administering these policies and procedures.
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. Many of these requirements affect us. For example:
 
•pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports;
•pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;
•pursuant to Rule 13a-15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting and must obtain an audit of the effectiveness of internal control over financial reporting performed by our independent registered public accounting firm; and
•pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to material weaknesses.
The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.
Proxy Voting Policies and Procedures
We have delegated our proxy voting responsibility to our Investment Adviser. The proxy voting policies and procedures of our Investment Adviser are set forth below. These guidelines are reviewed periodically by our Investment Adviser and our Independent Directors, and, accordingly, are subject to change.
An investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, our Investment Adviser recognizes that it must vote portfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.
These policies and procedures for voting proxies are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.
Our Investment Adviser will vote proxies relating to our portfolio securities in what it perceives to be the best interest of our stockholders. Our Investment Adviser will review on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us. Although our Investment Adviser will generally vote against proposals that may have a negative impact on our portfolio securities, it may vote for such a proposal if there exist compelling long-term reasons to do so.
Our Investment Adviser’s proxy voting decisions will be made by its investment committee. To ensure that the vote is not the product of a conflict of interest, our Investment Adviser will require that: (1) anyone involved in the decision making process disclose to the Investment Committee, and Independent Directors, any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision
20

Table of Contents
making process or vote administration are prohibited from revealing how our Investment Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties.
Stockholders may obtain information regarding how we voted proxies by making a written request for proxy voting information to: Carlyle Secured Lending, Inc., c/o Carlyle Global Credit Investment Management L.L.C., One Vanderbilt Avenue, Suite 3400, New York, New York 10017.
Privacy Principles
We endeavor to maintain the privacy of our stockholders and to safeguard their non-public personal information. The following information is provided to help stockholders understand what non-public personal information we collect, how we protect that information and why, in certain cases, we may share that information with select other parties.
We may collect non-public personal information about stockholders from our subscription agreements or other forms, such as name, address, account number and the types and amounts of investments, and information about transactions with us or our affiliates, such as participation in other investment programs, ownership of certain types of accounts or other account data and activity. We may disclose the non-public personal information that we collect from our stockholders or former stockholders, as described above, to our affiliates and service providers and as allowed by applicable law or regulation. Any party that receives this information from us is permitted to use it only for the services required by us and as allowed by applicable law or regulation, and is not permitted to share or use this information for any other purpose. We permit access only by authorized personnel who need access to that non-public personal information to provide services to us and our stockholders. We also maintain physical, electronic and procedural safeguards for non-public personal information that are designed to comply with applicable law.
Compliance with Listing Requirements
Our shares of common stock began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017. As a listed company on the Nasdaq Global Select Market, we are subject to various listing standards including corporate governance listing standards. We monitor our compliance with all listing standards and take actions necessary to ensure that we are in compliance therewith.
Reporting Obligations and Available Information
We furnish our stockholders with annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we determine to be appropriate or as may be required by law. We are required to comply with all periodic reporting, proxy solicitation and other applicable requirements under the Exchange Act.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Definitive Proxy Statement on Schedule 14A, as well as reports on Forms 3, 4 and 5 regarding directors, officers or 10% beneficial owners of us, filed or furnished pursuant to section 13(a), 15(d) or 16(a) of the Exchange Act, are available free of charge on our website (http://www.carlylesecuredlending.com).
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us, which can be accessed at www.sec.gov.
Competition
Our primary competitors in providing financing to middle market companies include public and private funds, other BDCs, commercial and investment banks, CLOs, commercial finance companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our potential competitors are substantially larger and may have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that will not be available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. We cannot assure you that the competitive pressures we will face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.
21

Table of Contents
We expect to use the expertise of the members of the Investment Committee and its investment team to assess investment risks and determine appropriate pricing for our investments. In addition, we expect that extensive direct origination resources, broad product capabilities, ability to commit capital in scale and the depth of expertise of our Investment Adviser’s investment team will enable us to learn about and compete effectively for, financing opportunities with attractive middle market companies in the industries in which we seek to invest. For additional information concerning the competitive risks we face, see Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to Our Investments—We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.”
Staffing
We do not currently have any employees. Our Chief Financial Officer, a Managing Director of Carlyle, our Treasurer and Principal Accounting Officer, a Vice President of Carlyle, and our Chief Compliance Officer and Secretary, a Managing Director of Carlyle, are retained by our Administrator pursuant to the Carlyle Sub-Administration Agreement. Each of these professionals performs their respective functions for us under the terms of our Administration Agreement.
Our day-to-day investment operations are managed by our Investment Adviser. Our Investment Adviser has entered into a personnel agreement with Carlyle Employee Co., pursuant to which our Investment Adviser has access to the members of its investment committee, and a team of additional experienced investment professionals who, collectively, comprise the Investment Adviser’s investment team. Our Investment Adviser may hire additional investment professionals to provide services to us.
22

Table of Contents
Item 1A. Risk Factors
Summary of Risk Factors
The following is only a summary of the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The following should be read in conjunction with the complete discussion of risk factors we face, which are set forth below under "—Risk Factors".
Risks Related to Our Business and Structure
•We are currently operating in a period of capital markets disruption and economic uncertainty, and capital markets may experience periods of disruption and instability in the future. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations.
•Inflation has adversely affected and may continue to adversely affect the business, results of operations and financial condition of our portfolio companies.
•Economic recessions or downturns could impair our portfolio companies and harm our operating results.
•We are dependent upon our Investment Adviser for our future success, and there are significant potential conflicts of interest that could impact our investment returns.
•Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively.
•We may need to raise additional capital to grow because we must distribute most of our income.
•Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation.
•Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.
•The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.
•We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.
•Our indebtedness could adversely affect our business, financial conditions or results of operations.
•Changes in interest rates have increased and may in the future increase our cost of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.
•The discontinuation of LIBOR and the adoption of alternative reference rates may adversely affect our business and results of operations.
•We may experience fluctuations in our quarterly results.
•We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code.
•If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, certain U.S. stockholders will be treated as having received a dividend from us.
•Our Board of Directors is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.
•Provisions of the Maryland General Corporation Law (“MGCL”) and of our Charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
•Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval.
•We are highly dependent on information systems, and systems failures could significantly disrupt our business.
•Cybersecurity risks and cyber incidents may adversely affect our business, results of operations or those of our portfolio companies.
23

Table of Contents
•Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies.
•We are subject to certain risks as a result of our direct interest in the 2015-1 Issuer Preferred Interests.
Risks Related to Our Investments
•Our investments are risky and speculative, generally illiquid and typically do not have a readily available market price.
•We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.
•Our portfolio companies may be highly leveraged and may incur debt that ranks equally with, or senior to, some of our investments in such companies, and our investment portfolio may be concentrated in a limited number of portfolio companies and industries.
•Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our NAV through increased net unrealized depreciation.
•To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies.
•The financial projections of our portfolio companies could prove inaccurate, and the due diligence investigation that our Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity.
•Our portfolio companies prepay loans from time to time, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields.
•We invest through joint ventures, partnerships or other special purpose vehicles and our investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly.
•Our ability to enter into transactions with Carlyle and our other affiliates is restricted.
•Our failure to make follow-on investments in our portfolio companies could impair the value of our investments.
•Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies.
•There are certain risks associated with holding debt obligations that have original issue discount or payment-in-kind interest.
Risks Related to an Investment in Our Common Stock and Other Securities That We May Issue
•Investing in our securities involves a high degree of risk.
•The market price of our securities may fluctuate significantly.
•Our shares of common stock have traded at a discount to NAV and may do so again.
•We issued the Preferred Stock (as defined below) in May 2020 and we may in the future determine to issue additional preferred stock, which could adversely affect the market value of our common stock.
•Holders of the Preferred Stock have the right to elect members of the board of directors and class voting rights on certain matters.
•Purchases of our common stock under our stock repurchase program, including a Company 10b5-1 Plan, may have resulted in the price of our common stock being higher than the price that otherwise might have existed in the open market.
•Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.
•Our stockholders will experience dilution in their ownership percentage if they opt out of our dividend reinvestment plan.
•If current economic and market conditions continue to contribute to capital market disruption and instability, there is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to our stockholders may be a return of capital for U.S. federal income tax purposes.
•Our stockholders may receive shares of our common stock as dividends, which could result in adverse tax consequences to them. Non-US stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.
•We may have difficulty paying our required distributions if we recognize taxable income before or without receiving cash representing such income.
24

Table of Contents
Risk Factors
An investment in the Company involves a high degree of risk. You should carefully consider these risk factors, together with all of the other information included in this report, before you decide whether to make an investment in the Company. There can be no assurance that the Company’s investment objective will be achieved or that an investor will receive a return of its capital. In addition, there will be occasions when the Investment Adviser and its affiliates may encounter potential conflicts of interest in connection with the Company. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. The following considerations, in addition to the considerations set forth elsewhere herein, should be carefully evaluated before making an investment in the Company. If any of the following events occur, our business, financial condition and operating result could be materially and adversely affected. In such case, the NAV and the trading price of our common stock and the trading price, if any, of any other securities that we may issue could decline, and you may lose all or part of your investment.
Risks Related to Our Business and Structure
We are currently operating in a period of capital markets disruption and economic uncertainty, and capital markets may experience periods of disruption and instability in the future. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations.
U.S. capital markets continue to experience disruptions and volatility, including as a result of inflation, a rising interest rate environment, Russia’s military invasion of Ukraine and the ongoing effects of the COVID-19 pandemic. In addition, in January 2023, the outstanding debt of the U.S. reached its statutory limit and the U.S. Treasury Department commenced taking extraordinary measures to prevent the U.S. from defaulting on its obligations. These events have contributed to unpredictable general economic conditions that are materially and adversely impacting the broader financial and credit markets. These and future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows, as well as the businesses of our portfolio companies, and the broader financial and credit markets.
At various times, such disruptions have resulted in, and may in the future result in, a lack of liquidity in parts of the debt capital markets, significant write-offs in the financial services sector and the repricing of credit risk. Such conditions may occur for a prolonged period of time again, and may materially worsen in the future, including as a result of U.S. government shutdowns, or future downgrades to the U.S. government's sovereign credit rating, including as a result of a default or the threat of default on its debt, or the perceived credit worthiness of the U.S. or other large global economies. In addition, the current U.S. political environment and the resulting uncertainties regarding actual and potential shifts in U.S. foreign investment, trade, taxation, economic, environmental and other policies under the current Administration, as well as the impact of geopolitical tension, such as a deterioration in the bilateral relationship between the U.S. and China or in the ongoing conflict between Russia and Ukraine, could lead to disruption, instability and volatility in the global markets. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events have limited and could continue to limit our investment originations, and limit our ability to grow and could have a material negative impact on our operating results, financial condition, results of operations and cash flows and the fair values of our debt and equity investments.
In addition, the U.S. and global capital markets have in the past, and may in the future, experience periods of extreme volatility and disruption during economic downturns and recessions. Trade wars and volatility in the U.S. repo market, the U.S. high yield bond markets, the Chinese stock markets and global markets for commodities may affect other financial markets worldwide. Increases to budget deficits, which have been exacerbated by the COVID-19 pandemic, or direct and contingent sovereign debt may create concerns about the ability of certain nations to service their sovereign debt obligations and any risks resulting from any such debt crisis in Europe, the U.S. or elsewhere could have a detrimental impact on the global economy, sovereign and non-sovereign debt in certain countries and the financial condition of financial institutions generally. Austerity measures that certain countries may agree to as part of any debt crisis or disruptions to major financial trading markets may adversely affect world economic conditions, our business and the businesses of our portfolio companies.
The COVID-19 outbreak has led, and for an unknown period of time may continue to lead, to disruptions in local, regional, national and global economic activity, adverse effects on the functioning of financial markets, impacts on market interest rates, increases in economic and market uncertainty, and disruptions to trade and supply chains. While economic
25

Table of Contents
activity has improved, disruptions to supply chains may continue and significant inflation has been seen in many segments of the global economy. Recurring COVID-19 outbreaks and the spread of new COVID-19 variants may lead to the re-introduction of public health restrictions. Ineffectual vaccines and treatment options could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. Even after the COVID-19 pandemic subsides, the U.S. economy and most other major global economies may experience an economic downturn, and we anticipate our business and operations could be materially adversely affected by a prolonged economic downturn and uncertainty in the U.S. and other major markets.
Additionally, the Federal Reserve raised the Federal Funds Rate several times over the course of 2022 and early 2023 and is expected to continue to do so while inflation remains above historical levels in the United States. These developments, along with the United States government’s credit and deficit concerns, global economic uncertainties and market volatility and the ongoing impacts of COVID-19, have caused and could continue to cause interest rates to be volatile, which may negatively impact our ability to access the capital markets on favorable terms.
Inflation has adversely affected and may continue to adversely affect the business, results of operations and financial condition of our portfolio companies.
Certain of our portfolio companies are in industries that have been impacted by inflation. Recent inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and out portfolio companies’ operations. If such portfolio companies are unable to pass any increases in their costs of operations along to their customers, it could adversely affect their operating results and impact their ability to pay interest and principal on our loans, particularly if interest rates rise in response to inflation. In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments. Any decreases in the fair value of our investments could result in future realized or unrealized losses and therefore reduce our net assets resulting from operations. Additionally, the Federal Reserve has raised, and has indicated its intent to continue raising, certain benchmark interest rates in an effort to combat inflation. See “—Changes in interest rates have increased and may in the future increase our cost of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.”
Economic recessions or downturns could impair our portfolio companies and harm our operating results.
Many of the portfolio companies in which we make investments may be susceptible to economic slowdowns or recessions and may be unable to repay the loans we made to them during these periods or pay interest payments. Rising interest rates, inflation, the ongoing effects of the COVID-19 pandemic, and supply chain disruptions heighten these risks. Therefore, our non-performing assets may increase and the value of our portfolio may decrease during these periods as we are required to record our investments at their current fair value. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our and our portfolio companies’ funding costs, limit our and our portfolio companies’ access to the capital markets or result in a decision by lenders not to extend credit to us or our portfolio companies. These events could prevent us from increasing investments and harm our operating results.
Any deterioration of general economic conditions may lead to significant declines in corporate earnings or loan performance, and the ability of corporate borrowers to service their debt, any of which could trigger a period of global economic slowdown, and have an adverse impact on our performance and financial results, and the value and the liquidity of our investments. In an economic downturn, we could have non-performing assets or an increase in non-performing assets, and we would anticipate that the value of our portfolio would decrease during these periods.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we will actually provide significant managerial assistance to that portfolio company, a bankruptcy court might subordinate all or a portion of our claim to that of other creditors.
26

Table of Contents
We are dependent upon our Investment Adviser for our future success.
We do not have any employees. We depend on the diligence, skill, judgment and network of business contacts of our Investment Adviser’s investment professionals and CDL to source appropriate investments for us. We depend on members of our Investment Adviser’s investment team to appropriately analyze our investments and the Investment Committee to approve and monitor our middle market portfolio investments. The Investment Committee, together with the other members of its investment team, evaluate, negotiate, structure, close and monitor our investments. Our future success will depend on the continued availability of the members of the Investment Committee and the other investment professionals available to the Investment Adviser. Neither we nor the Investment Adviser has employment agreements with these individuals or other key personnel, and we cannot provide any assurance that unforeseen business, medical, personal or other circumstances would not lead any such individual to terminate his or her relationship with us. The loss of any senior investment professionals to which our Investment Adviser has access, including members of the Investment Committee, or a significant number of the investment professionals of our Investment Adviser, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results of operations. The market for qualified professionals is extremely competitive across levels and areas of expertise, and our Investment Adviser may not be successful in its efforts to recruit, retain and motivate these professionals. In connection with the COVID-19 pandemic, there has been a shift to a hybrid work model and, in recruiting efforts, our Investment Adviser has seen increased focus by prospective candidates on remote and hybrid work arrangements and arrangements providing more flexibility, including around location. If there is a permanent shift to a longer-term fully remote model that does not require maintaining close proximity to a company’s offices in the markets in which our Investment Adviser competes for talent, it may experience an even further increase in competition for talent and it may be difficult to recruit and retain investment professionals.
In addition, we cannot assure you that our Investment Adviser will remain our investment adviser or that we will continue to have access to Carlyle’s investment professionals or its information and deal flow. If, due to extraordinary market conditions or other reasons, we and other funds managed by our Investment Adviser or its affiliates were to incur substantial losses, the revenues of our Investment Adviser and its affiliates may decline substantially. Such losses may hamper our Investment Adviser's and its affiliates' ability to provide the same level of service to us as it would have. Further, there can be no assurance that our Investment Adviser will replicate Carlyle’s historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other Carlyle-managed funds.
Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively.
Our ability to achieve our investment objective and to grow depends on our ability to acquire suitable investments and monitor and administer those investments, which depends, in turn, on our Investment Adviser’s ability to identify, invest in and monitor companies that meet our investment criteria.
Accomplishing this result on a cost-effective basis is largely a function of our Investment Adviser’s structuring of the investment process, its ability to provide competent, attentive and efficient services to us and its ability to access financing for us on acceptable terms. Our Investment Adviser’s investment team has substantial responsibilities under the “Investment Advisory Agreement” and in connection with managing us and certain other investment funds and accounts advised by our Investment Adviser, and may also be called upon to provide managerial assistance to our portfolio companies. These demands on their time, which will increase as the number of investments grow, may distract them or slow the rate of investment. In order for us to grow, Carlyle will need to hire, train, supervise, manage and retain new employees. However, we can offer no assurance that any such investment professionals will contribute effectively to the work of our Investment Adviser. Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.
We may need to raise additional capital to grow because we must distribute most of our income.
We may need to raise additional capital to fund growth in our investments, and a reduction in the availability of new capital could limit our ability to grow. If we fail to obtain funds from such sources or from other sources to fund our investments, it could limit our ability to grow, which may have an adverse effect on the value of our securities. We have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. To maintain our status as a RIC, among other requirements, we must distribute on a timely basis at least 90% of our investment company taxable income to our stockholders to maintain our RIC status. As a result, any such cash earnings may not be available to fund investment originations or repay maturing debt.
27

Table of Contents
We expect to issue additional debt and equity securities to fund our growth. We may pursue growth through acquisitions or strategic investments in new businesses. Completion and timing of any such acquisitions or strategic investments may be subject to a number of contingencies and risks. There can be no assurance that the integration of an acquired business will be successful or that an acquired business will prove to be profitable or sustainable.
We have borrowed under the credit facility and through the issuance of debt securities and in the future may borrow under additional debt facilities from financial institutions. As of December 31, 2022, we had issued and outstanding $1,079.6 million aggregate principal amount of indebtedness, and $50.0 million aggregate liquidation preference of the Preferred Stock. In addition, as a BDC, our ability to borrow or issue preferred stock may be restricted if our total assets are less than 150% of our total borrowings and preferred stock. Furthermore, equity capital may be difficult to raise because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price per share less than NAV without first obtaining approval for such issuance from our stockholders and our Independent Directors. Pursuant to approval granted at a special meeting of stockholders held on August 3, 2022, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on August 3, 2023.
Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation.
The Investment Company Act imposes numerous constraints on the operations of BDCs and RICs that do not apply to other types of investment vehicles. For example, under the Investment Company Act, we are required as a BDC to invest at least 70% of our total assets in specified types of “qualifying assets,” primarily in private U.S. companies or thinly-traded U.S. public companies, cash, cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. In addition, in order to continue to qualify as a RIC for U.S. federal income tax purposes, we are required to satisfy certain source-of-income, diversification and distribution requirements. These constraints, among others, may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective. See Item 1 “Business—Election to be Taxed as a RIC” for additional information.
Furthermore, any failure to comply with the requirements imposed on us as a BDC by the Investment Company Act could cause the SEC to bring an enforcement action against us and/or expose us to claims of private litigants. In addition, upon approval of a majority of our outstanding voting securities as required by the Investment Company Act, we may elect to withdraw our status as a BDC. If we decide to withdraw our election, or if we otherwise fail to qualify, or maintain our qualification, as a BDC, we might be regulated as a closed-end investment company that is required to register under the Investment Company Act, which would subject us to additional regulatory restrictions, significantly decrease our operating flexibility and could significantly increase our cost of doing business. In addition, any such failure could cause an event of default under our outstanding indebtedness, which could have a material adverse effect on our business, financial condition or results of operations.
Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.
We may issue additional debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the Investment Company Act. In addition, we may continue to securitize certain of our loans. Under the provisions of the Investment Company Act, we are permitted, as a BDC, to issue senior securities only in amounts such that our asset coverage ratio, as defined in the Investment Company Act, equals at least 150% of total assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test, which may prohibit us from paying dividends and could prevent us from maintaining our status as a RIC or may prohibit us from repurchasing shares of our common stock. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Accordingly, any failure to satisfy this test could have a material adverse effect on our business, financial condition or results of operations. As of December 31, 2022, our asset coverage calculated in accordance with the Investment Company Act was 176.79%. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders. Furthermore, as a result of issuing senior securities, our common stockholders would also be exposed to typical risks associated with increased leverage, including an increased risk of loss resulting from increased indebtedness.
28

Table of Contents
On May 5, 2020, we issued and sold 2,000,000 shares of preferred stock to an affiliate of Carlyle in a private placement at a price of $25 per share (“Preferred Stock”). The Preferred Stock ranks “senior” to common stock in our capital structure, and preferred stockholders have separate voting rights on certain matters and have other rights, preferences, or privileges more favorable than those of our common stockholders. The issuance of the Preferred Stock and any additional preferred stock could have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for holders of our common stock or otherwise be in their best interest.
We are not generally able to issue and sell our common stock at a price below the NAV per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current NAV per share of our common stock if our Independent Directors determine that such sale is in the best interests of us and our stockholders and our stockholders approve such sale. In any such case, the price at which our common stock is to be issued and sold may not be less than a price that, in the determination of our Independent Directors, closely approximates the market value of such shares (less any distributing commission or discount). Pursuant to approval granted at a special meeting of stockholders held on August 3, 2022, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on August 3, 2023. See “—The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.”
If we raise additional funds by issuing more common stock, or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease, and holders of our common stock might experience dilution.
The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock.
Pursuant to approval granted at a special meeting of stockholders held on August 3, 2022, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current NAV per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on August 3, 2023.
Any sale or other issuance of shares of our common stock at a price below NAV per share, including upon conversion of the Preferred Stock, would result in immediate dilution to our common stock and a reduction of our NAV per share. This dilution would occur as a result of the sale of shares at a price below the then current NAV per share of our common stock and a proportionately greater decrease in the stockholders’ interest in our earnings and assets and their voting interest in us than the increase in our assets resulting from such issuance. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect cannot be predicted.
We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.
As part of our business strategy, we, including through our wholly owned subsidiaries, borrow from and issue senior debt securities to banks, insurance companies and other lenders. Holders of these loans or senior securities would have fixed-dollar claims on our assets that are superior to the claims of our stockholders. If the value of our assets decreases, leverage will cause our NAV to decline more sharply than it otherwise would have without leverage. Similarly, any decrease in our income would cause our net income to decline more sharply than it would have if we had not borrowed. This decline could negatively affect our ability to make dividend payments on our common stock.
Our ability to service our borrowings depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. In addition, our management fees are payable based on our gross assets, including assets acquired through the use of leverage (but excluding cash and any temporary investments in cash-equivalents), which may give our Investment Adviser an incentive to use leverage to make additional investments. See “—We may be obligated to pay our Investment Adviser incentive compensation even if we incur a loss.” The amount of leverage that we employ will depend on our Investment Adviser’s and our Board of Directors’ assessment of market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to continue to obtain credit at all or on terms acceptable to us.
29

Table of Contents
In addition to having fixed-dollar claims on our assets that are superior to the claims of our common stockholders, obligations to lenders may be secured by a first priority security interest in our portfolio of investments and cash. In the case of a liquidation event, those lenders would receive proceeds to the extent of their security interest before any distributions are made to our stockholders under certain circumstances. In addition, as the holder of the preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for our contribution to the 2015-1 Issuer of the initial closing date loan portfolio (i.e., the subordinated class of the 2015-1 Securitization), we may be required to absorb losses with respect to the 2015-1 Debt Securitization.
Our Credit Facility, the Senior Notes and the 2015-1R Notes impose financial and operating covenants that restrict our business activities, remedies on default and similar matters. As of December 31, 2022, we were in material compliance with the operating and financial covenants of our Credit Facility, the Senior Notes and the 2015-1R Notes. However, our continued compliance with these covenants depends on many factors, some of which are beyond our control. Accordingly, although we believe we will continue to be in compliance, we cannot assure you that we will continue to comply with the covenants in our Credit Facility, the Senior Notes and the 2015-1R Notes. Failure to comply with these covenants could result in a default. If we were unable to obtain a waiver of a default from the lenders or holders of that indebtedness, as applicable, those lenders or holders could accelerate repayment under that indebtedness, which may result in cross-acceleration of other indebtedness. An acceleration could have a material adverse impact on our business, financial condition and results of operations. Lastly, we may be unable to obtain additional leverage, which would, in turn, affect our return on capital.
As of December 31, 2022, we had a combined $1,079.6 million of outstanding consolidated indebtedness under our Credit Facility, Senior Notes and 2015-1R Notes. For the year ended December 31, 2022, our annualized interest cost was 3.99% excluding fees (such as fees on undrawn amounts and amortization of upfront fees). Since we generally pay interest at a floating rate on our Credit Facility and 2015-1R Notes, an increase in interest rates will generally increase our borrowing costs.
The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns on our portfolio, net of expenses. The calculations in the table below are hypothetical, and actual returns may be higher or lower than those appearing in the table below.
Assumed Return on Our Portfolio (Net of Expenses)
Assumed annual returns on the Company's portfolio (net of expenses)
(10)%(5)%0%5%10%
Corresponding return to common stockholder(1)
(29.06)%(17.93)%(6.80)%4.33 %15.45 %
(1)    Assumes, as of December 31, 2022, (i) $2,041.7 million in total assets, (ii) $1,079.6 million in outstanding indebtedness, (iii) $917.4 million in net assets and (iv) weighted average effective annual interest rate, excluding fees (such as fees on undrawn amounts and amortization of financing costs), of 5.78%.
Based on an outstanding indebtedness of $1,079.6 million as of December 31, 2022, and the weighted average effective annual interest rate, excluding fees (such as fees on undrawn amounts and amortization of financing costs), of 5.78% as of that date, our investment portfolio at fair value would have had to produce an annual return of approximately 3.06% to cover annual interest payments on the outstanding debt. For more information on our indebtedness, see Part II, Item 7 of this Form 10-K “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources.”
Our indebtedness could adversely affect our business, financial conditions or results of operations.
We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our credit facilities or otherwise in an amount sufficient to enable us to repay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before it matures. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets or seeking additional equity. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would not be disadvantageous to our stockholders or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements.
30

Table of Contents
Changes in interest rates have increased and may in the future increase our cost of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.
General interest rate fluctuations and changes in credit spreads on floating rate loans may have a substantial negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income and our NAV. Substantially all of our debt investments have variable interest rates that reset periodically based on benchmarks such as the London Interbank Offered Rate (“LIBOR” or “L”), the Secured Overnight Financing Rate (“SOFR”) and the U.S. Prime Rate (“Prime Rate” or “P”), so an increase in interest rates from their historically low present levels may make it more difficult for our portfolio companies to service their obligations under the debt investments that we hold. Rising interest rates could also cause portfolio companies to shift cash from other productive uses to the payment of interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. To address ongoing concerns about inflation, the Federal Reserve has increased interest rates over the course of 2022 and currently is expected to do so in 2023.
Furthermore, because we typically borrow money to make investments, our net investment income depends, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income to the extent we use debt to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income.
In general, rising interest rates will negatively impact the price of a fixed rate debt instrument and falling interest rates will have a positive impact on price. Adjustable rate instruments also react to interest rate changes in a similar manner, although generally to a lesser degree (depending, however, on the characteristics of the reset terms, including the index chosen, frequency of reset and reset caps or floors, among other factors). Interest rate sensitivity is generally more pronounced and less predictable in instruments with uncertain payment or prepayment schedules.
In addition, a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt investments. Accordingly, the recent increases in interest rates have made it easier for us to meet or exceed the incentive fee hurdle rate in our Investment Advisory Agreement and have resulted in increases in the amount of incentive fees payable to our Investment Adviser with respect to our pre-incentive fee net investment income. Also, an increase in interest rates available to investors could make an investment in our common stock less attractive if we are not able to increase our distribution rate, which could reduce the value of our common stock.
The discontinuation of LIBOR and the adoption of alternative reference rates may adversely affect our business and results of operations.
The UK Financial Conduct Authority and the administrator of LIBOR have announced that the publication of the most commonly used U.S. dollar LIBOR settings will cease to be provided or cease to be representative after June 30, 2023. The Adjustable Interest Rate (LIBOR) Act enacted in March 2022 provides a statutory framework to replace USD LIBOR with a benchmark rate based on SOFR for contracts governed by U.S. law that have no fallbacks or fallbacks that would require the use of a poll or LIBOR-based rate. As the transition from LIBOR is ongoing, there continues to be uncertainty as to the ultimate effect of the transition on the financial markets for LIBOR-linked financial instruments.
SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions. Although SOFR appears to be the preferred replacement rate for U.S. dollar LIBOR, it is unclear if other benchmarks may emerge or if other rates will be adopted outside the U.S. The Bank of England’s current nominated replacement for GBP-LIBOR is the Sterling Overnight Interbank Average Rate (“SONIA”). Given the inherent differences between LIBOR and SOFR, or any other alternative benchmark rate that may be established, including SONIA, there remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate.
In any event, LIBOR, to the extent it is published, is likely to perform differently than in the past and, ultimately, cease to exist as a global benchmark going forward. Until an alternative benchmark rate(s) becomes generally accepted and regularly implemented in the market, the uncertainty as to the future of LIBOR, its eventual phase-out, the transition to one or more alternate benchmark rate(s), and the implementation of such new benchmark rate(s) may impact a number of factors, which, either alone or in the aggregate, may cause a material adverse effect on our performance and our ability to achieve its investment objective. The Investment Adviser does not have prior experience in investing during a period of benchmark rate transition and there can be no assurance that the Investment Adviser will be able to manage our business in a profitable manner before, during or after such transition.
31

Table of Contents
The discontinuance of LIBOR will require us to renegotiate credit agreements entered into prior to the discontinuation of LIBOR with our portfolio companies that utilize LIBOR as a factor in determining the interest rate, in order to replace LIBOR with the new standard that is established, which may have an adverse effect on our ability to receive attractive returns.
If we are unable to do so, amounts outstanding under the Credit Facility may bear interest at a higher rate, which would increase the cost of our borrowings and, in turn, affect our return on capital.
Depending on several factors, including those set forth above, and the related costs of negotiating and documenting necessary changes to documentation, our business, financial condition and results of operations could be materially adversely impacted by the market transition or reform of certain reference rates and benchmarks. Other factors include the pace of the transition to replacement or reformed rates, the specific terms and parameters for and market acceptance of any alternative reference rates, prices and liquidity of trading markets for products based on alternative reference rates, and our ability to transition and develop appropriate systems and analytics for one or more alternative reference rates.
We may experience fluctuations in our quarterly results.
We could experience fluctuations in our quarterly operating results due to a number of factors, including, the pace at which investments are made, the interest rate payable on the debt securities we acquire, the default rate on such securities, rates of repayment, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses and changes in unrealized appreciation or depreciation, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
There are significant potential conflicts of interest, including the management of other investment funds and accounts by our Investment Adviser, which could impact our investment returns and the holders of our common stock.
Our executive officers and directors, other current and future principals of our Investment Adviser and certain members of the Investment Committee currently serve, and may continue to serve, as officers, directors or principals of other entities and affiliates of our Investment Adviser and funds managed by our affiliates that operate in the same or a related line of business as we do. Currently, our executive officers, as well as the other principals of our Investment Adviser manage other funds affiliated with Carlyle, including other existing and future affiliated BDCs. In addition, our Investment Adviser’s investment team has responsibilities for sourcing and managing investments for certain other investment funds and accounts. Accordingly, they have obligations to investors in those entities, the fulfillment of which may not be in the best interests of, or may be adverse to the interests of, us or our stockholders. Although the professional staff of our Investment Adviser will devote as much time to our management as appropriate to enable our Investment Adviser to perform its duties in accordance with the Investment Advisory Agreement, the investment professionals of our Investment Adviser may have conflicts in allocating their time and services among us, on the one hand, and investment vehicles managed by Carlyle or one or more of its affiliates on the other hand.
Our Investment Adviser and its affiliated investment managers may face conflicts in allocating investment opportunities between us and affiliated investment vehicles that have overlapping objectives with ours. For example, certain affiliated investment vehicles may have arrangements that provide for higher management or incentive fees, greater expense reimbursements or overhead allocations, or permit the Investment Adviser and its affiliates to receive transaction fees not permitted under the Investment Company Act, all of which may contribute to this conflict of interest and create an incentive for our Investment Adviser or its affiliated investment managers to favor such other accounts. Furthermore, our Investment Adviser and its affiliated investment managers may form vehicles for the benefit of third-party investors that will be entitled to a portion of the allocation with respect to an investment. Such co-investment rights could result in us being allocated a smaller share of an investment than would otherwise be the case in the absence of such co-investment rights. Although our Investment Adviser will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by investment funds managed by our Investment Adviser or an investment manager affiliated with our Investment Adviser, including Carlyle.
We and our affiliates own, and may continue to own, investments at different levels of a portfolio company’s capital structure or otherwise own different classes of a portfolio company’s securities, which may give rise to conflicts of interest or perceived conflicts of interest. Conflicts may also arise because portfolio decisions regarding our portfolio may benefit our affiliates. Our affiliates may pursue or enforce rights with respect to one of our portfolio companies, and those activities may have an adverse effect on us.
32

Table of Contents
It is possible that Carlyle or an affiliated investment vehicle will invest in a company that is or becomes a competitor of a portfolio company of ours. Such investment could create a conflict between us, on the one hand, and Carlyle or the affiliated investment vehicle, on the other hand. In such a situation, Carlyle or our Investment Adviser may also have a conflict in the allocation of its own resources to our portfolio company. In addition, certain affiliated investment vehicles will be focused primarily on investing in other funds that may have strategies that overlap and/or directly conflict and compete with us.
As a result of the expansion of Carlyle’s platform into various lines of business in the alternative asset management industry, Carlyle is subject to a number of actual and potential conflicts of interest and subject to greater regulatory oversight than that to which it would otherwise be subject if it had just one line of business. In addition, as Carlyle expands its platform, the allocation of investment opportunities among its investment funds, including us, is expected to become more complex. In addressing these conflicts and regulatory requirements across Carlyle’s various businesses, Carlyle has implemented, and may continue to implement, certain policies and procedures. For example, Carlyle has established an information barrier between Carlyle Global Credit, on the one hand, and the rest of Carlyle, on the other, which generally restricts the communications of Carlyle Global Credit with other Carlyle investment professionals pursuant to the information barrier policy. In addition, we may come into possession of material non-public information with respect to issuers in which we may be considering making an investment. As a consequence, we may be precluded from providing such information or other ideas to other funds affiliated with Carlyle that may benefit from such information or we may be precluded from otherwise consummating a contemplated investment. To the extent we or any other funds affiliated with Carlyle fail to appropriately deal with any such conflicts, it could negatively impact our reputation or Carlyle’s reputation and our ability to raise additional funds and the willingness of counterparties to do business with us or result in potential litigation against us.
In the ordinary course of business, we enter, and may continue to enter, into transactions with affiliates and portfolio companies that may be considered related party transactions. We have implemented certain policies and procedures whereby certain of our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us and other affiliated persons, including our Investment Adviser, stockholders that own more than 5% of us, employees, officers and directors of us and our Investment Adviser and certain persons directly or indirectly controlling, controlled by or under common control with the foregoing persons. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the Investment Company Act or, if such concerns exist, we have taken appropriate actions to seek Board of Directors review and approval or SEC exemptive relief for such transactions.
In the course of our investing activities, we pay management and incentive fees to our Investment Adviser and reimburse our Investment Adviser for certain expenses it incurs in accordance with our Investment Advisory Agreement. The base management fee is based on our gross assets and the incentive fee is paid on income, both of which include leverage. As a result, investors in our common stock invest on a “gross” basis and receive distributions on a “net” basis after expenses, resulting in a lower rate of return than an investor might achieve through direct investments. Because the management fee is based on gross assets, our Investment Adviser benefits to the extent we incur debt or use leverage. Accordingly, there may be times when the senior management team of our Investment Adviser has interests that differ from those of our stockholders, giving rise to a conflict.
In addition, we pay our Administrator, an affiliate of our Investment Adviser, its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including, compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer, Chief Financial Officer and Treasurer) and their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff in their role of performing our Sarbanes-Oxley Act internal control assessment. These arrangements create conflicts of interest that our Board of Directors monitors. Despite Carlyle’s good faith judgment to arrive at a fair and reasonable expense allocation methodology, the use of any particular methodology may lead us to bear relatively more expense in certain instances and relatively less in other instances compared to what we would have borne if a different methodology had been used. However, Carlyle seeks to make allocations that are equitable on an overall basis in its good faith judgment.
In May 2020, we issued the Preferred Stock to an affiliate of Carlyle in a private placement. The interests of Carlyle as the holder of the Preferred Stock may conflict with the interests of the holders of our common stock (see “--We issued the Preferred Stock in May 2020 and we may in the future determine to issue additional preferred stock, which could adversely affect the market value of our common stock”).
We may be obligated to pay our Investment Adviser incentive compensation even if we incur a loss.
Our Investment Adviser is entitled to incentive compensation for each calendar quarter in an amount equal to a percentage of the excess of our pre-incentive fee net investment income for that quarter (before deducting incentive compensation) above a performance threshold for that quarter. In calculating our performance threshold, we use net assets
33

Table of Contents
which results in a lower hurdle rate than if we used gross assets like we do for determining our base management fee. Our pre-incentive fee net investment income for incentive compensation purposes excludes realized and unrealized capital losses and depreciation that we may incur in the calendar quarter, even if such capital losses or depreciation result in a net loss on our statement of operations for that quarter. Thus, we may be required to pay our Investment Adviser incentive compensation for a calendar quarter even if there is a decline in the value of our portfolio or we incur a net loss for that quarter.
Our fee structure may induce our Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.
The incentive fees payable by us to our Investment Adviser may create an incentive for our Investment Adviser to pursue investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The incentive fees payable to our Investment Adviser are calculated based on a percentage of our return on invested capital. This may encourage our Investment Adviser to use leverage to increase the return on our investments. In particular, a portion of the incentive fees payable to the Investment Adviser is calculated based on the Company’s pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, subject to a “hurdle rate” of 1.50% per quarter (6% annualized) and a “catch-up rate” of 1.82% per quarter (7.28% annualized). See Note 4 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K. Accordingly, an increase in leverage may make it easier for the Company to meet or exceed the hurdle rate applicable to the income-based incentive fee and may result in an increase in the amount of income-based incentive fee payable to the Investment Adviser.
Under certain circumstances, the use of leverage may increase the likelihood of default, which would impair the value of our securities. In addition, our Investment Adviser receives the incentive fees based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fees based on income, there is no hurdle rate applicable to the portion of the incentive fees based on net capital gains. As a result, our Investment Adviser may have incentive to invest more capital in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.
The “catch-up” portion of the incentive fees may encourage our Investment Adviser to accelerate or defer interest payable by portfolio companies from one calendar quarter to another, potentially resulting in fluctuations in timing and dividend amounts.
Additionally, the incentive fees payable by us to our Investment Adviser may create an incentive for our Investment Adviser to cause us to realize capital gains or losses that may not be in the best interests of us or our stockholders. Under the incentive fee structure, our Investment Adviser benefits when we recognize capital gains and, because our Investment Adviser determines when an investment is sold, our Investment Adviser controls the timing of the recognition of such capital gains. Our Board of Directors is charged with protecting our stockholders’ interests by monitoring how our Investment Adviser addresses these and other conflicts of interest associated with its management services and compensation.
We may invest, to the extent permitted by law, in the securities and instruments of other investment companies, including private funds, and, to the extent we so invest, bear our ratable share of any such investment company’s expenses, including management and performance fees. We also remain obligated to pay management and incentive fees to our Investment Adviser with respect to the assets invested in the securities and instruments of other investment companies. With respect to each of these investments, each of our stockholders bears his or her share of the management and incentive fees of our Investment Adviser as well as indirectly bearing the management and performance fees and other expenses of any investment companies in which we invest.
We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code.
Although we have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code, we cannot assure you that we will be able to maintain RIC status. To maintain RIC status and be relieved of U.S. federal income taxes on income and gains distributed to our stockholders, we must, among other things, have in effect an election to be treated, and continue to qualify, as a BDC under the Investment Company Act at all times during each taxable year and meet the Annual Distribution Requirement, the 90% Gross Income Test and the Diversification Tests (each as defined and explained more fully in Item 1. “Business—Election to be Taxed as a RIC.”).
34

Table of Contents
If we fail to maintain our RIC status for any reason, and we do not qualify for certain relief provisions under the Code, we would be subject to corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes) regardless of whether we make any distributions to our stockholders. In this event, the resulting taxes and any resulting penalties could substantially reduce our net assets, the amount of our income available for distribution and the amount of our distributions to our stockholders, which would have a material adverse effect on our financial performance. For additional discussion regarding the tax implications of a RIC, see Item 1. “Business—Election to be Taxed as a RIC” for additional information.
A portion of our income and fees may not be qualifying income for purposes of the income source requirement.
Some of the income and fees that we may recognize will not satisfy the income source requirement applicable to RICs. In order to ensure that such income and fees do not disqualify us as a RIC for a failure to satisfy such requirement, we may be required to recognize such income and fees indirectly through one or more entities treated as corporations for U.S. federal income tax purposes. Such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce the amount of income available for distribution.
If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, certain U.S. stockholders will be treated as having received a dividend from us in the amount of such U.S. stockholders’ allocable share of the management and incentive fees paid to our Investment Adviser and certain of our other expenses.
We expect to be treated as a “publicly offered regulated investment company” as a result of shares of our common stock being treated as regularly traded on an established securities market. However, we cannot assure you that we will be treated as a publicly offered regulated investment company for all years. If we are not treated as a publicly offered regulated investment company for any calendar year, each U.S. stockholder that is an individual, trust or estate will be treated as having received a dividend from us in the amount of such U.S. stockholder’s allocable share of the management and incentive fees paid to our Investment Adviser and certain of our other expenses for the calendar year, and these fees and expenses will be treated as miscellaneous itemized deductions of such U.S. stockholder. Miscellaneous itemized deductions generally are deductible by a U.S. stockholder that is an individual, trust or estate only for tax years of such U.S. stockholder beginning after 2025 and only to the extent that the aggregate of such U.S. stockholder’s miscellaneous itemized deductions exceeds 2% of such U.S. stockholder’s adjusted gross income for U.S. federal income tax purposes, are not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under the Code. See Part I, Item 1 of this Form 10-K “Business—Election to be Taxed as a RIC.”
If we fail to maintain the adequacy of our internal controls over financial reporting, we may not be able to accurately report our financial results, which may adversely affect investor confidence in us and, as a result, the value of the securities we issue.
Effective internal controls over financial reporting are necessary for us to provide reliable financial reports. Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, and result in a breach of the covenants under the agreements governing any of our financing arrangements. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Additionally, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports. This could materially adversely affect us and lead to a decline in the price of the securities we issue.
Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our operations, financial reporting or financial results could be harmed and we could fail to meet our financial reporting obligations.
Certain investors are limited in their ability to make significant investments in us.
Private funds that are excluded from the definition of “investment company” either pursuant to Section 3(c)(1) or 3(c)(7) of the Investment Company Act are restricted from acquiring directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition), unless certain conditions are satisfied. Investment companies registered under the Investment Company Act and BDCs are also subject to this restriction as well as other
35

Table of Contents
limitations under the Investment Company Act that would restrict the amount that they are able to invest in our securities. As a result, certain investors will be limited in their ability to make significant investments in us at a time that they might desire to do so.
Our Board of Directors is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.
Under the MGCL and our Charter, our Board of Directors is authorized to classify and reclassify any authorized but unissued shares of stock into one or more classes of stock, including preferred stock. Prior to the issuance of shares of each class or series, the Board of Directors is required by Maryland law and our Charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the Board of Directors could authorize the issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. The cost of any such reclassification would be borne by our existing common stockholders. Certain matters under the Investment Company Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. In addition, the Investment Company Act provides that holders of preferred stock are entitled to vote separately from holders of common stock to elect two preferred stock directors. We currently have no plans to issue additional preferred stock, but may determine to issue additional preferred stock in the future. The issuance of preferred stock convertible into shares of common stock might also reduce the net income per share and NAV per share of our common stock upon conversion, provided, that we will only be permitted to issue such convertible preferred stock to the extent we comply with the requirements of Section 61 of the Investment Company Act. In addition, under the Investment Company Act, participating preferred stock and preferred stock constitutes a “senior security” for purposes of the 150% asset coverage test. These effects, among others, could have an adverse effect on an investment in our common stock.
On May 5, 2020 we issued the Preferred Stock. See “—We issued the Preferred Stock in May 2020 and we may in the future determine to issue additional preferred stock, which could adversely affect the market value of our common stock,” “—Our stockholders may experience dilution upon the conversion of the Preferred Stock,” and “—Holders of the Preferred Stock have the right to elect members of the board of directors and class voting rights on certain matters.”
Provisions of the MGCL and of our Charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
The MGCL and our Charter and bylaws contain provisions that may discourage, delay or make more difficult a change in control of us or the removal of our directors. We are subject to the Maryland Business Combination Act (“MBCA”), subject to any applicable requirements of the Investment Company Act. Our Board of Directors has adopted a resolution exempting from the MBCA any business combination between us and any other person, subject to prior approval of such business combination by our Board of Directors, including approval by a majority of our Independent Directors. If the resolution exempting business combinations is repealed or our Board of Directors does not approve a business combination, the MBCA may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer. Our bylaws exempt from the Maryland Control Share Acquisition Act (“Control Share Act”) acquisitions of our stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Act, the Control Share Act also may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such a transaction. However, we will amend our bylaws to be subject to the Control Share Act only if our Board of Directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the Investment Company Act.
We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our Charter classifying our Board of Directors in three classes serving staggered three-year terms, and authorizing our Board of Directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, to amend our Charter without stockholder approval and to increase or decrease the number of shares of stock or the number of shares of stock of any class or series that we have authority to issue. These provisions, as well as other provisions of our Charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.
Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval.
36

Table of Contents
Our Board of Directors has the authority to modify or, if applicable, waive our investment objectives, operating policies and strategies without prior notice (except as required by the Investment Company Act) and without stockholder approval. In addition, none of our investment policies is fundamental and any of them may be changed without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current investment objectives, operating policies or strategies would have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.
We are highly dependent on information systems, and systems failures could significantly disrupt our business.
Our business is highly dependent on the communications and information systems of our Investment Adviser, its affiliates and third parties. Any failure or interruption of those systems or services, including as a result of the termination or suspension of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:
•sudden electrical or telecommunications outages;
•natural disasters such as earthquakes, tornadoes and hurricanes;
•disease pandemics;
•events arising from local or larger scale political or social matters, including terrorist acts; and
•cyber-attacks.
These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our stockholders.
Cybersecurity risks and cyber incidents may adversely affect our business or those of our portfolio companies by causing a disruption to our operations, a compromise or corruption of confidential information and/or damage to business relationships, or those of our portfolio companies, all of which could negatively impact our business, results of operations or financial condition.
Cyber incidents and cyber-attacks have been occurring globally at a more frequent and severe level and are expected to continue to increase in frequency and severity in the future. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to, use, alteration or destruction of our information systems for purposes of misappropriating assets, obtaining ransom payments, stealing confidential information, corrupting data or causing operational disruption, or may involve phishing. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen information, misappropriation of assets, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships. This could result in significant losses, reputational damage, litigation, regulatory fines or penalties, or otherwise adversely affect our business, financial condition or results of operations. In addition, we may be required to expend significant additional resources to modify our protective measures and to investigate and remediate vulnerabilities or other exposures arising from operational and security risks. The costs related to cybersecurity incidents may not be fully insured or indemnified. As our and our portfolio companies’ reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by our Investment Adviser and third-party service providers, and the information systems of our portfolio companies. We, our Investment Adviser and its affiliates have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, may be ineffective and do not guarantee that a cyber incident will not occur or that our financial results, operations or confidential information will not be negatively impacted by such an incident.
Third parties with which we do business (including, but not limited to, service providers, such as accountants, custodians, transfer agents and administrators, and the issuers of securities in which we invest) may also be sources or targets of cybersecurity or other technological risks. We outsource certain functions and these relationships allow for the storage and processing of our information and assets, as well as certain investor, counterparty, employee and borrower information. While we engage in actions to reduce our exposure resulting from outsourcing, we cannot control the cybersecurity plans and systems
37

Table of Contents
put in place by these third parties and ongoing threats may result in unauthorized access, loss, exposure or destruction of data, or other cybersecurity incidents, with increased costs and other consequences, including those described above. Privacy and information security laws and regulation changes, and compliance with those changes, may also result in cost increases due to system changes and the development of new administrative processes.
Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies.
We and our portfolio companies are subject to laws and regulations at the U.S. federal, state and local levels and, in some cases, foreign levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws, regulations and interpretations may also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business or the business of our portfolio companies. The legal, tax and regulatory environment for BDCs, investment advisers and the instruments that they utilize (including derivative instruments) is continuously evolving. In addition, there is significant uncertainty regarding recently enacted legislation and the regulations that have recently been adopted and future regulations that may or may not be adopted pursuant to such legislation and, consequently, the full impact that such legislation will ultimately have on us and the markets in which we trade and invest is not fully known. Such uncertainty and any resulting confusion may itself be detrimental to the efficient functioning of the markets and the success of certain investment strategies.
In addition, as private equity firms become more influential participants in the U.S. and global financial markets and economy generally, there recently has been pressure for greater governmental scrutiny and/or regulation of the private equity industry. It is uncertain as to what form and in what jurisdictions such enhanced scrutiny and/or regulation, if any, on the private equity industry may ultimately take. Therefore, there can be no assurance as to whether any such scrutiny or initiatives will have an adverse impact on the private equity industry, including our ability to effect operating improvements or restructurings of our portfolio companies or otherwise achieve our objectives.
Over the last several years, there also has been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector will be subject to new regulation. While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could negatively impact our operating results or financial condition, impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business.
Our ability to continue to operate depends on the services provided by our Investment Adviser, Administrator and sub-administrators. Each is able to resign upon 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.
Our ability to continue to operate depends on the services provided by our Investment Adviser, Administrator and sub-administrators. Our Investment Adviser, our Administrator, and our sub-administrators each have the right to resign under the Investment Advisory Agreement, the Administration Agreement and the Sub-Administration Agreements, respectively, upon 60 days’ written notice, whether a replacement has been found or not. If any of them resigns, it may be difficult to find a replacement with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If a replacement is not found quickly, our business, results of operations and financial condition as well as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by our Investment Adviser, our Administrator and their affiliates, including certain of our sub-administrators. Even if a comparable service provider or individuals performing such services are retained, whether internal or external, their integration into our business and lack of familiarity with our investment objective may result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition. Moreover, it will be an event of default under the Credit Facility if our Investment Adviser or an affiliate of our Investment Adviser ceases to manage us, which could result in the immediate acceleration of the amounts due under the Credit Facility.
38

Table of Contents
Our Investment Adviser’s liability is limited under the Investment Advisory Agreement, and we are required to indemnify our Investment Adviser against certain liabilities, which may lead our Investment Adviser to act in a riskier manner on our behalf than it would when acting for its own account.
Our Investment Adviser has not assumed any responsibility to us other than to render the services described in the Investment Advisory Agreement, and it will not be responsible for any action of our Board of Directors in declining to follow our Investment Adviser’s advice or recommendations. Pursuant to the Investment Advisory Agreement, our Investment Adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other person or entities affiliated with it will not be liable to us for their acts under the Investment Advisory Agreement, absent willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. We have agreed to indemnify, defend and protect our Investment Adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other person or entities affiliated with it with respect to all damages, liabilities, costs and expenses arising out of or otherwise based upon the performance of any of our Investment Adviser’s duties or obligations under the Investment Advisory Agreement or otherwise as an Investment Adviser for us, and not arising out of willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties under the Investment Advisory Agreement. These protections may lead our Investment Adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account. See “Our fee structure may induce our Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.” for additional information.
We are subject to certain risks as a result of our direct interest in the 2015-1 Issuer Preferred Interests.
Because each of the SPV and the 2015-1 Issuer is disregarded as an entity separate from its owner for U.S. federal income tax purposes, the sale or contribution by the SPV to us, and the sale or contribution by us to the 2015-1 Issuer, as part of the 2015-1 Debt Securitization and 2015-1 Debt Securitization Refinancing, did not constitute a taxable event for U.S. federal income tax purposes. If the U.S. Internal Revenue Service were to take a contrary position, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.
The 2015-1 Issuer Preferred Interests are subordinated obligations of the 2015-1 Issuer.
The 2015-1 Issuer is the residual claimant on funds, if any, remaining after holders of all classes of the 2015-1R Notes have been paid in full on each payment date or upon maturity of the 2015-1R Notes under the 2015-1 Debt Securitization Refinancing documents. The 2015-1 Issuer Preferred Interests represent all of the equity interest in the 2015-1 Issuer and, as the holder of the 2015-1 Issuer Preferred Interests, we may receive distributions, if any, only to the extent that the 2015-1 Issuer makes distributions out of funds remaining after holders of all classes of the 2015-1R Notes have been paid in full on each payment date any amounts due and owing on such payment date or upon maturity of the 2015-1R Notes. There is no guarantee that we will receive any distributions as the holders of the 2015-1 Issuer Preferred Interests.
The interests of holders of the 2015-1R Notes issued by the 2015-1 Issuer may not be aligned with our interests.
The 2015-1R Notes are the debt obligations ranking senior in right of payment to our interests. As such, there are circumstances in which the interests of holders of the 2015-1R Notes may not be aligned with our interests. For example, under the terms of the 2015-1 Issuer, holders of the 2015-1R Notes have the right to receive payments of principal and interest prior to distribution to our interests.
For as long as the 2015-1R Notes remain outstanding, holders of the 2015-1R Notes have the right to act, in certain circumstances, with respect to the portfolio loans in ways that may benefit their interests but not the interests of holders of the 2015-1 Issuer Preferred Interests, including by exercising remedies under the indenture governing the 2015-1R Notes (the “2015-1 Indenture”).
If an event of default has occurred and acceleration occurs in accordance with the terms of the 2015-1 Indenture, the 2015-1R Notes then outstanding will be paid in full before any further payment or distribution to the 2015-1 Issuer Preferred Interests. In addition, if an event of default occurs, holders of a majority of the 2015-1R Notes then outstanding will be entitled to determine the remedies to be exercised under the 2015-1 Indenture, subject to the terms of the 2015-1 Indenture. For example, upon the occurrence of an event of default with respect to the notes issued by the 2015-1 Issuer, the trustee or holders of a majority of the 2015-1R Notes then outstanding may declare the principal, together with any accrued interest, of all the 2015-1R Notes to be immediately due and payable. This would have the effect of accelerating the principal on such notes, triggering a repayment obligation on the part of the 2015-1 Issuer. If at such time the portfolio loans of the 2015-1 Issuer were
39

Table of Contents
not performing well, the 2015-1 Issuer may not have sufficient proceeds available to enable the trustee under the 2015-1 Indenture to pay a distribution to holders of the 2015-1 Issuer Preferred Interests.
Remedies pursued by the holders of the 2015-1R Notes could be adverse to the interests of the holders of the 2015-1 Issuer Preferred Interests, and the holders of the 2015-1R Notes have no obligation to consider any possible adverse effect on such other interests. Thus, any remedies pursued by the holders of the 2015-1R Notes may not be in our best interests and we may not receive payments or distributions upon an acceleration of the 2015-1R Notes. Any failure of the 2015-1 Issuer to make distributions on the 2015-1 Issuer Preferred Interests we hold, directly or indirectly, whether as a result of an event of default or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows and may result in an inability of us to make distributions sufficient to allow for us to qualify as a RIC for U.S. federal income tax purposes.
The 2015-1 Issuer may fail to meet certain asset coverage tests.
Under the documents governing the 2015-1 Debt Securitization Refinancing, there are two coverage tests applicable to the 2015-1R Notes.
The first such test compares the amount of interest received on the portfolio loans held by the 2015-1 Issuer to the amount of interest payable in respect of the 2015-1R Notes. To meet this first test, interest received on the portfolio loans must equal at least 110% of the interest payable in respect of the 2015-1R Notes issued by the 2015-1 Issuer.
The second such test compares the adjusted collateral principal amount of the portfolio loans of the 2015-1 Debt Securitization Refinancing to the aggregate outstanding principal amount of the 2015-1R Notes. To meet this second test at any time, the adjusted collateral principal amount of the portfolio loans must equal at least 116.4% of the outstanding principal amount of the 2015-1R Notes.
If any coverage test with respect to the 2015-1R Notes is not met, proceeds from the portfolio of loans that otherwise would have been distributed to the holders of the 2015-1 Issuer Preferred Interests will instead be used to redeem first the 2015-1R Notes, to the extent necessary to satisfy the applicable asset coverage tests on a pro forma basis after giving effect to all payments made in respect of the 2015-1R Notes, which we refer to as a mandatory redemption, or to obtain the necessary ratings confirmation. There is no guarantee that the 2015-1R Notes will meet either of these coverage tests, and thus, we may not receive distributions as the holders of the 2015-1 Issuer Preferred Interests.
We may not receive cash from the 2015-1 Issuer.
We receive cash from the 2015-1 Issuer only to the extent of payments on the distributions, if any, with respect to the 2015-1 Issuer Preferred Interests as permitted under the 2015-1 Debt Securitization Refinancing. The 2015-1 Issuer may only make payments on the 2015-1 Issuer Preferred Interests to the extent permitted by the payment priority provisions of the 2015-1 Indenture, as applicable, which generally provide, distribution to Preferred Interests holder may not be made on any payment date unless all amounts owing under the 2015-1R Notes are paid in full. There is no guarantee that we will receive any distributions as the holders of the 2015-1 Issuer Preferred Interests.
In addition, if the 2015-1 Issuer does not meet the asset coverage tests or the interest coverage test set forth in the documents governing the 2015-1 Debt Securitization Refinancing, cash would be diverted to first pay the 2015-1R Notes in amounts sufficient to cause such tests to be satisfied. Even if we do not receive cash directly from the 2015-1 Issuer, such amount will still be treated as income subject to our requirement to distribute 90% of our net investment income to our stockholders. Therefore, in the event that we fail to receive cash directly from the 2015-1 Issuer, we could be unable to make such distributions in amounts sufficient to maintain our status as a RIC for U.S. federal income tax purposes, or at all.
We may be required to assume liabilities of the 2015-1 Issuer and are indirectly liable for certain representations and warranties in connection with the 2015-1 Debt Securitization Refinancing.
As part of the 2015-1 Debt Securitization Refinancing, we entered into a contribution agreement under which we are required to repurchase any loan (or participation interest therein) which was sold to the 2015-1 Issuer in breach of any representation or warranty made by us with respect to such loan on the date such loan was sold. To the extent we fail to satisfy any such repurchase obligation, the trustee of the 2015-1 Debt Securitization Refinancing may, on behalf of the 2015-1 Issuer, bring an action against us to enforce these repurchase obligations.
40

Table of Contents
The structure of the 2015-1 Debt Securitization Refinancing is intended to prevent, in the event of our bankruptcy, the consolidation of the 2015-1 Issuer with our operations. If the true sale of the assets in the 2015-1 Debt Securitization Refinancing were not respected in the event of our insolvency, a trustee or debtor-in-possession might reclaim the assets of the 2015-1 Issuer for our estate. However, in doing so, we would become directly liable for all of the indebtedness then outstanding under the 2015-1 Debt Securitization Refinancing, which would equal the full amount of debt of the 2015-1 Issuer reflected on our consolidated balance sheet.
In addition, in connection with 2015-1 Debt Securitization Refinancing, the Company has made customary representations, warranties and covenants to the 2015-1 Issuer. We remain liable for any breach of such representations for the life of the 2015-1 Debt Securitization Refinancing.
Risks Related to Our Investments
Our investments are risky and speculative.
We invest primarily in loans to middle market companies whose debt, if rated, is rated below investment grade and, if not rated, would likely be rated below investment grade if it were rated. Investments rated below investment grade are generally considered higher risk than investment grade instruments. Bonds that are rated below investment grade are sometimes referred to as “high yield bonds” or “junk bonds.” Exposure to below investment grade instruments involves certain risks, including speculation with respect to the borrower’s capacity to pay interest and repay principal. In our first lien loans, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies. To the extent we hold second lien senior secured loans and junior debt investments, holders of first lien loans may be repaid before us in the event of a bankruptcy or other insolvency proceeding. This may result in an above average amount of risk and loss of principal. Unitranche loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a heightened risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. When we invest in loans, we have acquired and may in the future acquire equity securities as well. However, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.
Some of the loans in which we may invest may be “covenant-lite” loans, which means the loans contain fewer covenants than other loans (in some cases, none) and may not include terms which allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached. An investment by us in a covenant-lite loan may potentially hinder the ability to reprice credit risk associated with the issuer and reduce the ability to restructure a problematic loan and mitigate potential loss. We may also experience delays in enforcing our rights under covenant-lite loans. As a result of these risks, our exposure to losses may be increased, which could result in an adverse impact on our net income and net asset value.
In addition, investing in middle market companies involves a number of significant risks, including:
•these companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing on any guarantees or security we may have obtained in connection with our investment;
•they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;
•they are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on us;
•there is generally little public information about these companies. These companies and their financial information are usually not subject to the Exchange Act and other regulations that govern public companies, and we may be unable to uncover all material information about these companies, which may prevent us from making a fully informed investment decision and cause us to lose money on our investments;
41

Table of Contents
•they generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers, directors and our Investment Adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in the portfolio companies;
•changes in laws and regulations, as well as their interpretations, may adversely affect their business, financial structure or prospects; and
•they may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.
Our portfolio securities are generally illiquid and typically do not have a readily available market price and, in such a case, we will value these securities at fair value as determined in good faith under procedures adopted by our Board of Directors or its designee, which valuation is inherently subjective and may not reflect what we may actually realize from the sale of the investment.
Substantially all of our portfolio investments are in the form of debt investments that are not publicly traded and are illiquid compared to publicly traded securities, and there can be no assurance that we will be able to realize returns on such investments in a timely manner. The fair value of these illiquid portfolio securities is not readily determinable, and the due diligence process that our Investment Adviser undertakes in connection with our investments may not reveal all the facts that may be relevant in connection with such investment. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of our investment portfolio for which market quotations are not readily available. The Investment Adviser values these investments on at least a quarterly basis in accordance with our valuation policy, which is at all times consistent with accounting principles generally accepted in the United States (“U.S. GAAP”). Our Board of Directors utilizes the services of a third-party valuation firm to aid it in reviewing the determinations of our Investment Adviser’s investment professionals, which are based upon the most recent portfolio company financial statements available and projected financial results of each portfolio company. The participation of our Investment Adviser in our valuation process, and the indirect pecuniary interest in our Investment Adviser by the Interested Directors on our Board of Directors, could result in a conflict of interest, because the management fee is based on our gross assets and also because our Investment Adviser is receiving performance-based incentive fees.
The factors that are considered in the fair value pricing of our investments include the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in which the portfolio company does business, comparisons to publicly traded companies, discounted cash flow, relevant credit market indices, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate our valuation. Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, the Investment Adviser’s determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Also, since these valuations are, to a large extent, based on estimates, comparisons and qualitative evaluations of private information, it could make it more difficult for investors to value accurately our investments and could lead to undervaluation or overvaluation of our securities. In addition, the valuation of these types of securities may result in substantial write-downs and earnings volatility. If our Investment Adviser is unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Also, privately held companies frequently have less diverse product lines and smaller market presence than larger competitors.
Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. The effect of all of these factors on our portfolio can reduce our NAV by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer unrealized losses, which could have a material adverse impact on our business, financial condition and results of operations.
Our NAV as of a particular date may be materially greater than or less than the value that would be realized if our assets were to be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of our assets on a particular date, the actual price that we would realize upon the disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in our NAV. Volatile market conditions could also cause reduced liquidity in the market for certain assets, which could result in liquidation values that are materially less than the values of such assets as reflected in our NAV.
42

Table of Contents
We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.
The activity of identifying, completing and realizing attractive investments is highly competitive and involves a high degree of uncertainty. The availability of investment opportunities generally will be subject to market conditions. In particular, in light of changes in such conditions, including changes in long-term interest rates, certain types of investments may not be available to us on terms that are as attractive as the terms on which opportunities were available to previous investment programs sponsored by Carlyle. A number of entities, including BDCs managed by our Investment Adviser or an affiliate, compete with us to make the types of investments that we target in middle market companies. We compete with other BDCs, public and private funds, commercial and investment banks, commercial finance companies, and, to the extent they provide an alternative form of financing, private equity funds, some of which are affiliates of us. Furthermore, over the past several years, an ever-increasing number of debt and credit opportunities funds have been formed and many such existing funds have grown substantially in size. Additional funds with similar objectives may be formed in the future by Carlyle or by other unrelated parties. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. Consequently, it is possible that competition for appropriate investment opportunities may increase, thus reducing the number of investment opportunities available to us and adversely affecting the terms upon which investments can be made. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. The competitive pressures we face may have a material adverse effect on our business, financial condition and results of operations. As a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and, accordingly, we may incur legal, due diligence and other costs on investments which may not be successful and we may not recover all of our costs, which would adversely affect returns. We can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.
We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors may make loans with interest rates that are comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss.
Our portfolio companies may be highly leveraged.
Some of our portfolio companies are highly leveraged, which may have adverse consequences to these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used. Moreover, rising interest rates may significantly increase a company's or project's interest expense, or a significant industry downturn may affect a company's ability to generate positive cash flow, in either case causing an inability of a leveraged company to service outstanding debt. In the event such leveraged company cannot generate adequate cash flow to meet debt obligations, the company may default on its loan agreements or be forced into bankruptcy resulting in a restructuring or liquidation of the company. Leveraged companies may enter into bankruptcy proceedings at higher rates than companies that are not leveraged.
Depending on the facts and circumstances of our investments and the extent of our involvement in the management of a portfolio company, upon the bankruptcy of a portfolio company, a bankruptcy court may recharacterize our debt investments as equity interests and subordinate all or a portion of our claim to that of other creditors. This could occur even though we may have structured our investment as senior debt.
Our portfolio companies may incur debt that ranks equally with, or senior to, some of our investments in such companies and if there is a default, we may experience a loss on our investment.
To the extent we invest in second lien, mezzanine or other instruments, our portfolio companies typically may be permitted to incur other debt that ranks equally with, or senior to, such debt instruments. By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest or principal on or before the dates on which we will be entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. In such cases, after repaying such senior creditors, such portfolio company may not have sufficient remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in which we invest, we
43

Table of Contents
would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.
The rights we may have with respect to the collateral securing the debt investments we make in our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.
We may also make unsecured loans to portfolio companies. Liens on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.
Our portfolio may be concentrated in a limited number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.
    We are classified as a non-diversified investment company within the meaning of the Investment Company Act, which means that we are not limited by the Investment Company Act with respect to the proportion of our assets that we may invest in securities of a single issuer, excluding limitations on investments in other investment companies. Although we do not intend to focus our investments in any specific industries, our portfolio may be concentrated in a limited number of portfolio companies and industries. Beyond the asset diversification requirements associated with our qualification as a RIC under Subchapter M of the Code and under the Credit Facility, Senior Notes and 2015-1R Notes, we do not have fixed guidelines for diversification, and while we do not target any specific industries, our investments may be concentrated in relatively few industries. As a result, the aggregate returns we will realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write down the value of one or more investments. Additionally, a downturn in any particular industry in which we are invested could also significantly impact our aggregate returns.
Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our NAV through increased net unrealized depreciation.
As a BDC, we are required to account for our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by or under the direction of our Board of Directors, which has appointed our Investment Adviser as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. Depending on market conditions, we could incur substantial realized losses and suffer additional unrealized losses, which would reduce our NAV and have a material adverse impact on our business, financial condition and results of operations.
To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies.
We have in the past and may in the future make investments in restructurings that involve, or otherwise invest in the debt securities of, companies that are experiencing or are expected to experience severe financial difficulties. These severe financial difficulties may never be overcome and may cause such companies to become subject to bankruptcy proceedings. As such, these investments could subject us to certain additional potential liabilities that may exceed the value of our original investment therein. The level of analytical sophistication, both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties is unusually high.
The financial projections of our portfolio companies could prove inaccurate.
44

Table of Contents
We generally evaluate the capital structure of portfolio companies on the basis of financial projections prepared by the management of such portfolio companies. These projected operating results are normally based primarily on judgments of the management of the portfolio companies. In all cases, projections are only estimates of future results that are based upon assumptions made at the time that the projections are developed. General economic conditions, which are not predictable with accuracy, along with other factors may cause actual performance to fall short of the financial projections that were used to establish a given portfolio company’s capital structure. Because of the leverage that is typically employed by our portfolio companies, this could cause a substantial decrease in the value of our investment in the portfolio company. The inaccuracy of financial projections could thus cause our performance to fall short of our expectations.
In addition, when sourcing debt investments, we expect to rely significantly upon representations made to us by the borrower. There can be no assurance that such representations are accurate or complete, or that any due diligence undertaken would identify any misrepresentation or omission.
The due diligence investigation that our Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity.
    Before we make investments, our Investment Adviser will typically conduct due diligence that it deems reasonable and appropriate based on the facts and circumstances applicable to each investment. Due diligence may entail evaluation of important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants, credit rating agencies, investment banks and other third parties may be involved in the due diligence process to varying degrees depending on the type of investment. When conducting due diligence and making an assessment regarding an investment, our Investment Adviser will rely on the resources available to it, including information provided by the portfolio companies and, in some circumstances, third-party investigations. In addition, investment analyses and decisions by our Investment Adviser may be required to be undertaken on an expedited basis to take advantage of certain investment opportunities. In such cases, the information available to our Investment Adviser at the time of making an investment decision may be limited. The due diligence investigation that our Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Moreover, the due diligence investigation does not ensure that such investment will be successful. In addition, Carlyle's Environmental, Social and Governance program may cause us not to make an investment we otherwise would have made or impact other action taken or refrained from.
Our portfolio companies prepay loans from time to time, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields.
Loans are generally prepayable at any time, most of them at no premium to par. We are generally unable to predict the rate and frequency of such repayments. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such portfolio company the ability to replace existing financing with less expensive capital. In periods of rising interest rates, the risk of prepayment of floating rate loans may increase if other financing sources are available. As market conditions change frequently, we will often be unable to predict when, and if, this may be possible for each of our portfolio companies. In the case of some of these loans, having the loan called early may have the effect of reducing our actual investment income below our expected investment income if the capital returned cannot be invested in transactions with equal or greater yields.
We invest through joint ventures, partnerships or other special purpose vehicles and our investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly.
We make indirect investments in portfolio companies through joint ventures, partnerships or other special purpose vehicles (“Investment Vehicles”) including Credit Fund and Credit Fund II. In general, the risks associated with indirect investments in portfolio companies through an Investment Vehicle are similar to those associated with a direct investment in a portfolio company. While we intend to analyze the credit and business of a potential portfolio company in determining whether to make an investment through an Investment Vehicle, we will nonetheless be exposed to the creditworthiness of the Investment Vehicle. In the event of a bankruptcy proceeding against the portfolio company, the assets of the portfolio company would typically be used to satisfy its obligations prior to the satisfaction of our investment in the Investment Vehicle (i.e., our investment in the Investment Vehicle would be structurally subordinated to the obligations of the portfolio company). In addition, if we are to invest in an Investment Vehicle, we may be required to rely on our partners in the Investment Vehicle when making decisions regarding such Investment Vehicle’s investments, accordingly, the value of the investment could be adversely affected if our interests diverge from those of our partners in the Investment Vehicle.
45

Table of Contents
Our ability to enter into transactions with Carlyle and our other affiliates is restricted.
As a BDC, we are required to comply with certain regulatory requirements. We and any company controlled by us, on the one hand, and our upstream affiliates, or our Investment Adviser and its affiliates, on the other hand, are prohibited under the Investment Company Act from knowingly participating in certain transactions without the prior approval of our Independent Directors (as defined below) and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities is our upstream affiliate for purposes of the Investment Company Act, and we or a company controlled by us are generally prohibited from buying or selling any security (other than our securities) from or to such affiliate, absent the prior approval of our Independent Directors and so long as such person does not own more than 25% of our outstanding voting securities or otherwise control us. We or a company controlled by us are prohibited from buying or selling any security from or to our Investment Adviser or its affiliates, or any person who owns more than 25% of our voting securities or is otherwise deemed to control, be controlled by, or be under common control with, us, with such persons, absent the prior approval of the SEC.
The Investment Company Act also prohibits certain “joint” transactions with our upstream affiliates, or our Investment Adviser or its affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our Independent Directors and, in some cases, the SEC (other than in certain limited situations pursuant to current regulatory guidance as described below). The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts and circumstances then existing. The SEC has granted us Exemptive Relief that permits us and certain present and future funds advised by our Investment Adviser and certain other present and future investment advisers controlling, controlled by or under common control with our Investment Adviser to co-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. In addition to co-investing pursuant to our Exemptive Relief, we may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, our Investment Adviser’s allocation procedures and Carlyle’s other allocation policies and procedures, where applicable. For example, we may invest alongside such investors consistent with guidance promulgated by the SEC staff permitting us and an affiliated person to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that we negotiate no term other than price. We may, in certain cases, also make investments in securities owned by affiliates that we acquire from non-affiliates. In such circumstances, our ability to participate in any restructuring of such investment or other transaction involving the issuer of such investment may be limited, and as a result, we may realize a loss on such investments that might have been prevented or reduced had we not been restricted in participating in such restructuring or other transaction.
Our failure to make follow-on investments in our portfolio companies could impair the value of our investments.
Following an initial investment in a portfolio company, we have made, and may continue to make, additional investments in that portfolio company as “follow-on” investments to:
•increase or maintain in whole or in part our equity ownership percentage;
•exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
•attempt to preserve or enhance the value of our investment.
We may elect not to make follow-on investments, may be constrained in our ability to employ available funds, or otherwise may lack sufficient funds to make those investments. We have the discretion to make any follow-on investments, subject to the availability of capital resources. However, doing so could be placing even more capital at risk in existing portfolio companies.
The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful investment. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other opportunities or because we are inhibited by compliance with BDC requirements or the desire to maintain our tax status.
46

Table of Contents
The disposition of our investments may result in contingent liabilities.
A significant portion of our investments involve private securities. In connection with the disposition of an investment in private securities, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that any such representations turn out to be inaccurate or with respect to potential liabilities. These arrangements may result in contingent liabilities that ultimately result in funding obligations that we must satisfy through our return of distributions previously made to us.
Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.
Although we may do so in the future, currently we do not intend to hold controlling equity positions in our portfolio companies. Accordingly, we may not be able to control decisions relating to a minority equity investment, including decisions relating to the management and operation of the portfolio company and the timing and nature of any exit. As a result, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity of the investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company and may therefore suffer a decrease in the value of our investments. If any of the foregoing were to occur, our financial condition, results of operations and cash flow could suffer as a result.
Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.
Our investment strategy contemplates that a portion of our investments may be in securities of foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. These risks are likely to be more pronounced for investments in companies located in emerging markets and particularly for middle-market companies in these economies.
Although most of our investments are denominated in U.S. dollars, our investments that are denominated in a foreign currency are subject to the risk that the value of a particular currency may change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments. We may employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk or, that if we do, such strategies will be effective.
We may expose ourselves to risks if we engage in hedging transactions.
If we engage in hedging transactions, we may expose ourselves to risks associated with such transactions. We may utilize instruments such as forward contracts, credit default swaps, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates, credit risk premiums, and market interest rates. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. It may not be possible to hedge against an exchange rate or interest rate fluctuation at an acceptable price. The success of any hedging transactions we may enter into will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the effect of the intended hedge and expose us to risk of loss. In addition, it may not be possible to
47

Table of Contents
hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations. Income derived from hedging transactions is generally not eligible to be distributed to non-U.S. stockholders free from U.S. withholding tax. We may be unable or determine not to hedge against particular risks, including if we determine that available hedging transactions are not available at an appropriate price.
There are certain risks associated with holding debt obligations that have original issue discount or payment-in-kind interest.
Original issue discount (“OID”) may arise if we hold securities issued at a discount or in certain other circumstances. OID and payment-in-kind (“PIK”) interest create the risk that incentive fees will be paid to the Investment Adviser based on non-cash accruals that ultimately may not be realized, while the Investment Adviser will be under no obligation to reimburse us for these fees. We hold investments that result in OID interest and PIK interest.
The higher interest rates of OID instruments reflect the payment deferral and increased credit risk associated with these instruments, and OID instruments generally represent a significantly higher credit risk than coupon loans. Even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation.
OID instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. OID income may also create uncertainty about the source of our cash dividends.
For accounting purposes, any cash dividends to stockholders representing OID income are not treated as coming from paid-in capital, even if the cash to pay them comes from the proceeds of issuances of our common stock. As a result, despite the fact that a dividend representing OID income could be paid out of amounts invested by our stockholders, the Investment Company Act does not require that stockholders be given notice of this fact by reporting it as a return of capital.
PIK interest has the effect of generating investment income at a compounding rate, thereby further increasing the incentive fees payable to the Investment Adviser. Similarly, all things being equal, the deferral associated with PIK interest also increases the loan-to-value ratio at a compounding rate.
Our investments may be affected by force majeure events.
    Our investments may be affected by force majeure events (e.g. events beyond the control of the party claiming that the event has occurred, including, without limitation, acts of God, fire, flood, earthquakes, outbreaks of infectious disease, pandemic or any other serious public health concern, war, trade war, cyber security breaches, terrorism and labor strikes). Some force majeure events may adversely affect the ability of a party (including a portfolio company or a counterparty to us or a portfolio company) to perform its obligations until it is able to remedy the force majeure event. In addition, the cost to a portfolio company or us of repairing or replacing damaged assets resulting from such force majeure event could be considerable. Certain force majeure events (such as war or an outbreak of an infectious disease) could have a broader negative impact on the world economy and international business activity generally, or in any of the countries in which we may invest specifically.
Risks Related to an Investment in Our Common Stock and Other Securities That We May Issue
Investing in our securities involves a high degree of risk.
The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive, and therefore an investment in our securities may not be suitable for someone with lower risk tolerance.
48

Table of Contents
The market price of our securities may fluctuate significantly.
The market price and liquidity of the market for our common stock and any other securities that we may issue may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:
•changes or perceived changes in the value of our portfolio investments as a result of changes in market factors, such as interest rate shifts, and also portfolio specific performance, such as portfolio company defaults, among others reasons;
•significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which are not necessarily related to the operating performance of these companies;
•price and volume fluctuations in the overall stock market from time to time;
•the inclusion or exclusion of our securities from certain indices;
•changes in law, regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;
•any loss of RIC status;
•changes in our earnings or perceived changes or variations in our operating results;
•changes in accounting guidelines governing valuation of our investments;
•any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;
•the inability of our Investment Adviser to employ additional experienced investment professionals or the departure of any of our Investment Adviser’s key personnel;
•short-selling pressure with respect to shares of our common stock or BDCs generally;
•future sales of our securities convertible into or exchangeable or exercisable for our common stock or the conversion of such securities;
•uncertainty surrounding the strength of the U.S. economy and where the debt market is in the credit cycle;
•uncertainty between the U.S. and other countries with respect to trade policies, treaties, and tariffs;
•the occurrence of one or more natural disasters, pandemic outbreaks or other health crises (including, but not limited to, the COVID-19 outbreak);
•fluctuations in base interest rates, such as LIBOR, SOFR, EURIBOR, the Federal Funds Rate or the Prime Rate, and the discontinuation of LIBOR;
•operating performance of companies comparable to us;
•general economic trends and other external factors, including inflation, the rising interest rate environment, Russia’s military invasion of Ukraine and the ongoing COVID-19 pandemic; and
•loss of a major funding source.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price fluctuates significantly, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
49

Table of Contents
Our shares of common stock have traded at a discount to NAV and may do so again, which could limit our ability to raise additional equity capital.
We cannot assure you that a trading market for our common stock can be sustained. In addition, we cannot predict the prices at which our common stock will trade. Shares of closed-end investment companies, including BDCs, frequently trade at a discount to NAV and our common stock may also be discounted in the market. This characteristic of closed-end investment companies is separate and distinct from the risk that our NAV per share may decline. We cannot predict whether our common stock will trade at, above or below NAV. The risk of loss associated with this characteristic of closed-end management investment companies may be greater for investors expecting to sell shares of common stock purchased in the offering soon after an offering. See “Risk Factors—Risks Related to Our Business and Structure—We are currently operating in a period of capital markets disruption and economic uncertainty, and capital markets may experience periods of disruption and instability in the future. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations.”
In addition, when our common stock is trading below its NAV, we will generally not be able to sell additional shares of our common stock to the public at its market price without, among other things, first obtaining the requisite approval of our stockholders. Pursuant to approval granted at a special meeting of stockholders held on August 3, 2022, we are authorized, with the approval of the Board of Directors, to sell or otherwise issue shares of our common stock at a price below the then-current net asset value per share, subject to certain limitations (including that the number of shares issued does not exceed 25% of our then-outstanding common stock immediately prior to each such offering). Such stockholder approval expires on August 3, 2023.
We issued the Preferred Stock in May 2020 and we may in the future determine to issue additional preferred stock, which could adversely affect the market value of our common stock.
On May 5, 2020 we issued 2,000,000 shares of the Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share. The Preferred Stock ranks senior to our common stock with respect to the payment of dividends and distribution of assets upon liquidation. The Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference”) plus any accumulated but unpaid dividends up to but excluding the date of distribution.
The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the articles supplementary (the “Articles Supplementary”) that established the terms of the Preferred Stock. The conversion price as of December 31, 2022 was $9.31. As a result of the terms of the Preferred Stock, there may be times when Carlyle as the holder of the Preferred Stock has interests that differ from those of the holders of common stock, giving rise to conflict. See Note 10, Net Assets, to the consolidated financial statements in Part II, Item 8 of this Form 10-K for further information about the Preferred Stock.
Each holder of Preferred Stock is entitled to one vote on each matter submitted to a vote of our stockholders. In addition, for so long as we are subject to the Investment Company Act, the holders of Preferred Stock, voting separately as a single class, have the right to elect two members of the Board of Directors at all times, and the balance of the directors will be elected by the holders of the common stock and the Preferred Stock voting together.
The issuance of the Preferred Stock and any shares of additional preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive. In addition, the dividends on the Preferred Stock and on any additional preferred stock we issue must be cumulative. Payment of dividends and repayment of the liquidation preference of the Preferred Stock and any additional preferred stock must take preference over any dividends or other payments to our common stockholders, and holders of the Preferred Stock or any additional preferred stock are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference (other than convertible preferred stock that converts into common stock). In addition, under the Investment Company Act, the Preferred Stock and any additional preferred stock constitute a “senior security” for purposes of the 150% asset coverage test.
Our stockholders may experience dilution upon the conversion of the Preferred Stock.
If we deliver shares of common stock upon a conversion of the Preferred Stock at a time our NAV per share exceeds the conversion price in effect at such time, our stockholders may incur dilution. Our stockholders will also experience dilution in their ownership percentage of common stock upon our issuance of common stock in connection with the conversion of the
50

Table of Contents
Preferred Stock. In addition, any dividends paid on our common stock will also be paid on shares of our common stock issued in connection with a conversion of the Preferred Stock after such issuance.
Holders of the Preferred Stock have the right to elect members of the board of directors and class voting rights on certain matters.
Holders of the Preferred Stock and of any additional preferred stock we might issue, voting separately as a single class, would have the right to elect two members of the board of directors at all times and in the event dividends become two full years in arrears would have the right to elect a majority of the directors until such arrearage is completely eliminated. In addition, preferred stockholders have class voting rights on certain matters, including changes in fundamental investment restrictions and conversion to open-end status, and accordingly can veto any such changes. Restrictions imposed on the declarations and payment of dividends or other distributions to the holders of our common stock and preferred stock, both by the Investment Company Act and by requirements imposed by rating agencies or the terms of our credit facilities, might impair our ability to maintain our qualification as a RIC for federal income tax purposes. While we would intend to redeem our preferred stock to the extent necessary to enable us to distribute our income as required to maintain our qualification as a RIC, there can be no assurance that such actions could be effected in time to meet the tax requirements. See Part I, Item 1 of this Form 10-K, "Business—Election to be Taxed as a RIC."
Purchases of our common stock under our stock repurchase program, including a Company 10b5-1 Plan, may have resulted in the price of our common stock being higher than the price that otherwise might have existed in the open market.
On August 1, 2022, the Company’s Board of Directors authorized the continuation of the Company’s stock repurchase program (the “Company Stock Repurchase Program”) until November 5, 2023, or until the approved dollar amount has been used to repurchase shares of common stock, and increased the size of the Company Stock Repurchase Program by $50 million to an aggregate amount of $200 million. Pursuant to the Program, the Company is authorized to repurchase its outstanding common stock in the open market and/or through privately negotiated transactions at prices not to exceed the Company’s net asset value per share as reported in its most recent financial statements, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act, and the Company is authorized to determine, in its discretion, the timing, manner, price and amount of any repurchases, based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal and regulatory requirements and other factors, which may include purchases pursuant to Rule 10b5-1 of the Exchange Act. The Program does not require the Company to repurchase any specific number of shares and there can be no assurance as to the amount of shares repurchased under the Program. The Program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law.
Pursuant to the authorization described above, the Company adopted a 10b5-1 plan (the “Company 10b5-1 Plan”). The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rule 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict.
These activities may have had the effect of maintaining the market price of our common stock or retarding a decline in the market price of the common stock, and, as a result, the price of our common stock may have been higher than the price that otherwise might have existed in the open market.
Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.
As of February 24, 2023, we had 50,820,785 shares of common stock outstanding. Sales of substantial amounts of our common stock, or the availability of such shares for sale, including as a result of the sale of our common stock issued upon conversion of the Preferred Stock, could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of equity securities should we desire to do so.
Our stockholders will experience dilution in their ownership percentage if they opt out of our dividend reinvestment plan.
Our dividend reinvestment plan is an “opt out” dividend reinvestment plan, pursuant to which all dividends declared in cash payable to stockholders that do not elect to receive their distributions in cash are automatically reinvested in shares of our common stock, rather than receiving cash. As a result, our stockholders that “opt out” of our dividend reinvestment plan may experience dilution in their ownership percentage of our common stock over time. See Part II, Item 5 of this Form 10-K “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Common
51

Table of Contents
Stock” and “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Distribution Policy” for a description of our dividend policy and obligations.
If current economic and market conditions continue to contribute to capital market disruption and instability, there is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to our stockholders may be a return of capital for U.S. federal income tax purposes.
We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. It is not assured that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this Form 10-K. If we declare a dividend and if enough stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash dividend payments. In addition, due to the asset coverage test applicable to us as a BDC, we may be limited in our ability to make distributions. The Preferred Stock is entitled to be paid dividends in full prior to the declaration or payment of a dividend on our common stock. In addition, the Credit Facility may also limit our ability to declare dividends if we default under certain provisions or fail to satisfy certain conditions. Further, if we invest a greater amount of assets in equity securities that do not pay current dividends, it could reduce the amount available for distribution. See Part II, Item 5 of this Form 10-K “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Common Stock.” Investing a greater amount of assets in equity securities that do not pay current dividends may also inhibit our ability to make required interest payments to holders of our debt, which may cause a default under the terms of our debt agreements. Such a default could materially increase our cost of raising capital, as well as cause us to incur penalties under the terms of our debt agreements.
The distributions we pay to our stockholders in a year may exceed our taxable income for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes that would reduce a stockholder’s adjusted tax basis in its shares of our common stock or preferred stock and correspondingly increase such stockholder’s gain, or reduce such stockholder’s loss, on disposition of such shares. Distributions in excess of a stockholder’s adjusted tax basis in its shares of our common stock or preferred stock will constitute capital gains to such stockholder.
Our stockholders may receive shares of our common stock as dividends, which could result in adverse tax consequences to them.
In order to satisfy the Annual Distribution Requirement applicable to RICs, we will have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash. As long as a portion of such dividend is paid in cash and certain requirements are met, the entire distribution generally will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally would be taxed on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of our common stock. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the trading price (if any) of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our stockholders were to determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price (if any) of our common stock. It is unclear whether and to what extent we will be able to pay taxable dividends of the type described in this paragraph.
We may have difficulty paying our required distributions if we recognize taxable income before or without receiving cash representing such income.
For U.S. federal income tax purposes, we will include in our taxable income certain amounts that we have not yet received in cash, such as OID or accruals on a contingent payment debt instrument, which may occur if we receive warrants in connection with the origination of a loan or possibly in other circumstances or contracted PIK interest, which generally represents contractual interest added to the loan balance and due at the end of the loan term. Any such income would be treated as income earned by us and therefore would be subject to the Annual Distribution Requirement (as defined and explained more fully in Item 1. “Business—Election to be Taxed as a RIC.”). We also may be required to include in our taxable income certain other amounts that we will not receive in cash. The credit risk associated with the collectability of deferred payments may be increased as and when a portfolio company increases the amount of interest on which it is deferring cash payment through deferred interest features. Our investments with a deferred interest feature may represent a higher credit risk than loans for which interest must be paid in full in cash on a regular basis. For example, even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is scheduled to occur upon maturity of the obligation.
52

Table of Contents
Because in certain cases we may recognize taxable income before or without receiving cash representing such income, we may have difficulty making distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement necessary for us to maintain our status as a RIC. Accordingly, we may need to sell some of our assets at times and/or at prices that we would not consider advantageous, we may need to raise additional equity or debt capital, or we may need to forego new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business) to enable us to make distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement. However, under the Investment Company Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless an “asset coverage” test is met. See Item 1. “Business—Regulation—Indebtedness and Senior Securities” for additional information.
If we are unable to obtain cash from other sources to meet the Annual Distribution Requirement, we may fail to qualify for the U.S. federal income tax benefits allowable to RICs and, thus, become subject to a corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes). Additionally, we may make investments that result in the recognition of ordinary income rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions. See Item 1. “Business—Election to be Taxed as a RIC” for additional information.
Alternatively, we may, with the consent of all our stockholders, designate an amount as a consent dividend (i.e., a deemed dividend). In that case, although we would not distribute any actual cash to our stockholders, the consent dividend would be treated like an actual dividend under the Code for all U.S. federal income tax purposes. This would allow us to deduct the amount of the consent dividend and our stockholders would be required to include that amount in income as if it were actually distributed. For additional discussion regarding the tax implications of a RIC, see Item 1. “Business—Election to be Taxed as a RIC.”
Non-U.S. stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.
Distributions of our “investment company taxable income” to a non-U.S. stockholder that are not effectively connected with the non-U.S. stockholder’s conduct of a trade or business within the United States may be subject to withholding of U.S. federal income tax at a 30% rate (or lower rate provided by an applicable income tax treaty) to the extent of our current or accumulated earnings and profits. Certain properly designated dividends are generally exempt from withholding of U.S. federal income tax, including certain dividends that are paid in respect of our (i) “qualified net interest income” (generally, our U.S.-source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we or the non-U.S. stockholder are at least a 10% shareholder, reduced by expenses that are allocable to such income) or (ii) “qualified short-term capital gains” (generally, the excess of our net short-term capital gain over our long-term capital loss for such taxable year), and certain other requirements were satisfied. No assurance can be given as to whether any of our distributions will be eligible for this exemption from withholding of U.S. federal income tax or, if eligible, will be designated as such by us. See Item 1. “Business—Election to be Taxed as a RIC.” for additional information.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We maintain our principal executive office at One Vanderbilt Avenue, Suite 3400, New York, NY 10017. We do not own any real estate.
Item 3. Legal Proceedings
The Company may become party to certain lawsuits in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 11 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
Item 4. Mine Safety Disclosures
Not applicable.
53

Table of Contents
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (dollar amounts in thousands, except per share data)
Common Stock
Our common stock is traded on The Nasdaq Global Select Market under the symbol “CGBD.” Our common stock has historically traded at prices both above and below our NAV per share. It is not possible to predict whether our common stock will trade at, above or below NAV. See Part I, Item 1A of this Form 10-K “Risk Factors—Risks Related to an Investment in Our Common Stock and Other Securities That We May Issue—Our shares of common stock have traded at a discount to NAV and may do so again, which could limit our ability to raise additional equity capital.”
On February 24, 2023, the last reported closing sales price of our common stock on The Nasdaq Global Select Market was $15.67 per share, which represented a discount of approximately 7.8% to the NAV per share reported by us as of December 31, 2022.
Holders
As of February 24, 2023, there were approximately 22 holders of record of our common stock (including Cede & Co.).
Distributions
To the extent that we have taxable income available, we intend to distribute quarterly dividends to our stockholders. The amount of our dividends, if any, will be determined by our Board of Directors. Any dividends to our stockholders will be declared out of assets legally available for distribution. We anticipate that our distributions will generally be paid from taxable earnings, including interest and capital gains generated by our investment portfolio, and any other income, including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees, that we receive from portfolio companies. However, if we do not generate sufficient taxable earnings during a year, all or part of a distribution may constitute a return of capital. The specific tax characteristics of our dividends and other distributions will be reported to stockholders after the end of each calendar year.
We have elected to be treated, and intend to continue to qualify annually, as a RIC. To maintain our qualification as a RIC, we must, among other things, distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, to our stockholders on an annual basis. In order to avoid certain excise taxes imposed on RICs and when reasonable, we intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of our ordinary income for the calendar year; (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year; and, (3) any undistributed ordinary income and capital gain net income for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax less certain over-distributions in prior years. In addition, although we currently intend to distribute realized net capital gains (i.e., net long term capital gains in excess of short term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment, pay U.S. federal income tax on such amounts at regular corporate tax rates, and elect to treat such gains as deemed distributions to stockholders. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.
We intend to make distributions in cash unless a stockholder elects to receive dividends and/or long-term capital gains distributions in additional shares of common stock. See “—Dividend Reinvestment Plan” below. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.
Dividend Reinvestment Plan
Prior to July 5, 2017, we had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, we converted our “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our common stockholders, other than those stockholders who have “opted out” of the plan. As a result of adopting the plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution, our common stockholders who have not elected to “opt out” of our dividend reinvestment plan will have their cash dividends or distributions
54

Table of Contents
automatically reinvested in additional shares of our common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, our plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. We intend to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.
Recent Sales of Unregistered Securities and Use of Proceeds
The Company did not sell any securities during the period covered by this Form 10-K that were not registered under the Securities Act.
Stock Performance Graph
This graph depicts the stockholder return on our common stock from June 14, 2017 (the date our common stock commenced trading on The Nasdaq Global Select Market) to December 31, 2022 relative to that of the Standard & Poor’s BDC Index (the “S&P BDC Index”) and the Standard & Poor’s 500 Stock Index (the “S&P 500 Index”). This graph assumes that on June 14, 2017, $100 was invested in our common stock, the S&P BDC Index and the S&P 500 Index. The graph also assumes the reinvestment of all cash dividends prior to any tax effect.
The graph and other information furnished under this Part II, Item 5 of this Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under, or to the liabilities of Section 18 of, the Exchange Act. The stock price performance included in the below graph is not necessarily indicative of future stock performance.
csl-20221231_g1.jpg


55

Table of Contents
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table provides information regarding purchases of our common stock made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the fourth quarter of 2022.
Period
Total Number of Shares Purchased(1)
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)(2)
Maximum (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
(Dollars in millions, except share and per share data)
October 1, 2022 through October 31, 2022252,973 $11.86 252,973 $50.6 
November 1, 2022 through November 30, 202283,966 $14.29 83,966 $49.4 
December 1, 2022 through December 31, 2022219,697 $14.28 219,697 $46.3 
Total556,636 556,636 
(1)On trade date basis.
(2)On August 1, 2022, the Company's Board of Directors approved the continuation of the Company's Stock Repurchase Program until November 5, 2023, or until the date the approved dollar amount has been used to repurchase shares of common stock. Pursuant to the program, the Company is authorized to repurchase up to $200 million in the aggregate of its outstanding common stock in the open market and/or through privately negotiated transactions at prices not to exceed the Company’s net asset value per share as reported in its most recent financial statements, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The timing, manner, price and amount of any repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal and regulatory requirements and other factors, and may include purchases pursuant to Rule 10b5-1 of the Exchange Act. The program does not require the Company to repurchase any specific number of shares and there can be no assurance as to the amount of shares repurchased under the program. The program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. As of December 31, 2022, the Company has repurchased an aggregate of $153.7 million pursuant to the Company Stock Repurchase Program. Pursuant to the authorization described above, the Company adopted the Company 10b5-1 Plan. The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except per share data, unless otherwise indicated)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of this Form 10-K “Risk Factors.” Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.
OVERVIEW
Carlyle Secured Lending, Inc., a Maryland corporation, is a specialty finance company that is a closed-end, externally
managed, non-diversified management investment company. We have elected to be regulated as a BDC under the Investment Company Act and have operated our business as a BDC since we began our investment activities. For U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Code. We were formed in February 2012, commenced investment operations in May 2013 and began trading on the Nasdaq Global Select Market, under the symbol “CGBD,” upon completion of our initial public offering in June 2017. Our principal executive offices are located at One Vanderbilt Avenue, Suite 3400, New York, New York 10017.
56

Table of Contents
Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through
assembling a portfolio of secured debt investments in U.S. middle market companies. Our core investment strategy focuses on lending to U.S. middle market companies, which we define as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. We seek to achieve our investment objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of our assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities).
We are externally managed by our Investment Adviser, an investment adviser registered under the Advisers Act. Our Administrator provides the administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle. The Investment Committee is responsible for reviewing and approving our investment opportunities. The members of the Investment Committee include several of the most senior credit professionals within the Global Credit segment, with backgrounds and expertise across multiple asset classes with significant industry experience and tenure. As of December 31, 2022, our Investment Adviser’s investment team included a team of more than 230 investment professionals across the Carlyle Global Credit segment. The Investment Committee has delegated approval of certain amendments, follow-on investments with existing borrowers, investments below certain size thresholds (existing or new platforms), and other matters as determined by the Investment Committee to the Screening Committee. In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle. In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including our Investment Adviser and its affiliates.
KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Investments
Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of investments we make.
Revenue
We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR or SOFR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement between us and our Investment Adviser; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement between us and our Administrator; and (iii) other operating expenses as detailed below:
•administration fees payable under our Administration Agreement and Sub-Administration Agreements, including related expenses;
•the costs of any offerings of our common stock and other securities, if any;
•calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);
57

Table of Contents
•expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;
•certain costs and expenses relating to distributions paid on our shares;
•debt service and other costs of borrowings or other financing arrangements;
•the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;
•amounts payable to third parties relating to, or associated with, making or holding investments;
•the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;
•transfer agent and custodial fees;
•costs of hedging;
•commissions and other compensation payable to brokers or dealers;
•federal and state registration fees;
•any U.S. federal, state and local taxes, including any excise taxes;
•independent director fees and expenses;
•costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;
•the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;
•the costs of specialty and custom software for monitoring risk, compliance and overall portfolio, including any development costs incurred prior to the filing of our election to be regulated as a BDC;
•our fidelity bond;
•directors and officers/errors and omissions liability insurance, and any other insurance premiums;
•indemnification payments;
•direct fees and expenses associated with independent audits, agency, consulting and legal costs; and
•all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.
We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.
58

Table of Contents
PORTFOLIO AND INVESTMENT ACTIVITY
    Below is a summary of certain characteristics of our investment portfolio as of December 31, 2022 and 2021.
As of December 31,
20222021
Count of investments173 154 
Count of portfolio companies / investment funds134 117 
Count of industries28 27 
Percentage of total investments at fair value:
First lien debt68.6 %64.4 %
Second lien debt13.3 %17.9 %
Total secured debt81.9 %82.3 %
Investment Funds13.3 %13.7 %
Equity investments4.8 %4.0 %
Percentage of debt investments at fair value:
Floating rate(1)
98.5 %98.4 %
Fixed interest rate1.5 %1.6 %
(1) Primarily subject to interest rate floors.
59

Table of Contents
Our investment activity for the years ended December 31, 2022 and 2021 is presented below (information presented herein is at amortized cost unless otherwise indicated):
 For the years ended December 31,
 20222021
Investments:
Total investments, beginning of year$1,957,553 $1,922,966 
New investments purchased660,786 851,422 
Net accretion of discount on investments9,990 9,383 
Net realized gain (loss) on investments965 19,038 
Investments sold or repaid(579,319)(845,256)
Total investments, end of year$2,049,975 $1,957,553 
Principal amount of investments funded:
First Lien Debt$702,881 $696,018 
Second Lien Debt1,282 137,465 
Equity Investments(1)
20,165 47,513 
Investment Funds— — 
Total$724,328 $880,996 
Principal amount of investments sold or repaid:
First Lien Debt$(532,843)$(718,114)
Second Lien Debt(72,825)(92,370)
Equity Investments(1)
(6,177)(23,923)
Investment Funds— (23,000)
Total$(611,845)$(857,407)
Number of new funded investments46 48 
Average amount of new funded investments$11,636 $11,278 
Percentage of new funded debt investments at floating interest rates100.0 %98.0 %
Percentage of new funded debt investments at fixed interest rates— %2.0 %
(1)Based on cost/proceeds of equity activity. The prior period has been conformed to the current presentation.
As of December 31, 2022 and 2021, investments consisted of the following:
 December 31, 2022December 31, 2021
 Amortized CostFair ValueAmortized CostFair Value
First Lien Debt$1,416,343 $1,359,962 $1,271,794 $1,232,084 
Second Lien Debt271,266 262,703 341,538 341,776 
Equity Investments91,269 94,190 73,125 77,093 
Investment Funds271,097 263,022 271,096 262,099 
Total$2,049,975 $1,979,877 $1,957,553 $1,913,052 
The weighted average yields(1) for our first and second lien debt, based on the amortized cost and fair value as of December 31, 2022 and 2021, were as follows:
 December 31, 2022December 31, 2021
 Amortized CostFair ValueAmortized CostFair Value
First Lien Debt10.9 %11.4 %7.3 %7.6 %
Second Lien Debt12.8 13.2 9.0 9.0 
First and Second Lien Debt Total11.2 %11.7 %7.7 %7.9 %
(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2022 and 2021. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt
60

Table of Contents
at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first and second lien debt investments as measured on an amortized cost basis increased from 7.7% to 11.2% from December 31, 2021 to December 31, 2022. The increase in weighted average yields was primarily due to rising benchmark interest rates as well as restoring non-accrual loans to accrual status during the year.
The following table summarizes the fair value of our performing and non-accrual/non-performing investments as of December 31, 2022 and 2021:
 December 31, 2022December 31, 2021
 Fair ValuePercentageFair ValuePercentage
Performing$1,921,945 97.1 %$1,836,501 96.0 %
Non-accrual(1)
57,932 2.9 76,551 4.0 
Total$1,979,877 100.0 %$1,913,052 100.0 %
 
(1)For information regarding our non-accrual policy, see Note 2 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
As part of the monitoring process, our Investment Adviser has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on categories, which we refer to as “Internal Risk Ratings”. Pursuant to these risk policies, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each debt investment in our portfolio. Key drivers of internal risk ratings include financial metrics, financial covenants, liquidity and enterprise value coverage.
Internal Risk Ratings Definitions
RatingDefinition
1 Borrower is operating above expectations, and the trends and risk factors are generally favorable.
2 Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost basis is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.
3 
Borrower is operating below expectations and level of risk to our cost basis has increased since the time of
origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.
4 Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.
5 Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.
Our Investment Adviser monitors and, when appropriate, changes the risk ratings assigned to each debt investment in our portfolio. Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The below table summarizes the Internal Risk Ratings assigned as of December 31, 2022 and 2021.
61

Table of Contents
 December 31, 2022December 31, 2021
(dollar amounts in millions)Fair Value% of Fair ValueFair Value% of Fair Value
Internal Risk Rating 1$30.7 1.9 %$3.8 0.2 %
Internal Risk Rating 21,280.1 78.8 1,205.5 76.6 
Internal Risk Rating 3254.0 15.7 299.5 19.0 
Internal Risk Rating 448.6 3.0 27.6 1.8 
Internal Risk Rating 59.3 0.6 37.5 2.4 
Total$1,622.7 100.0 %$1,573.9 100.0 %
As of December 31, 2022 and 2021, the weighted average Internal Risk Rating of our debt investment portfolio was 2.2 and 2.3, respectively. As of December 31, 2022 and 2021, three and two of our debt investments with an aggregate fair value of $57.9 million and $65.1 million, respectively, were assigned an Internal Risk Rating of 4-5. As of December 31, 2022 and 2021, three and five first lien debt investments in the portfolio with a fair value of $57.9 million and $76.6 million, respectively, were on non-accrual status, which represented approximately 2.9% and 4.0%, respectively, of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2022 and 2021. 
See the Consolidated Schedules of Investments as of December 31, 2022 and 2021, in our consolidated financial statements in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data” for more information on our investments, including a list of companies and type and amount of investments.
CONSOLIDATED RESULTS OF OPERATIONS
For the years ended December 31, 2022, 2021 and 2020
The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.
Net investment income (loss) for the years ended December 31, 2022, 2021 and 2020 was as follows:
 For the years ended December 31,
 202220212020
Total investment income$207,256 $171,238 $182,118 
Net expenses (including Excise tax expense)(103,214)(84,387)(93,311)
Net investment income (loss)$104,042 $86,851 $88,807 
Investment Income
Investment income for the years ended December 31, 2022, 2021 and 2020, was as follows:
 For the years ended December 31,
 202220212020
Investment income:
First Lien Debt$139,712 $108,345 $125,958 
Second Lien Debt30,605 29,189 29,851 
Equity Investments6,091 3,640 1,978 
Investment Funds30,848 30,064 24,277 
Cash— — 54 
Total investment income$207,256 $171,238 $182,118 
The increase in investment income for the year ended December 31, 2022 from the comparable period in 2021 was primarily driven by an increase in interest income from higher weighted average interest rates, a higher average investment balance, one-time income from restoring our debt investments in Direct Travel, Inc. to accrual status, and income from the exit of our investments in SolAero Technologies Corp. As of December 31, 2022, the size of our portfolio increased to $2,049,975 from $1,957,553 as of December 31, 2021 at amortized cost. As of December 31, 2022, the weighted average yield of our first
62

Table of Contents
and second lien debt increased to 11.2% from 7.7% as of December 31, 2021, on amortized cost, primarily due to rising benchmark interest rates on existing investments as well as restoring non-accrual loans to accrual status during the year.
The decrease in investment income for the year ended December 31, 2021 from the comparable period in 2020 was primarily driven by a lower average investment balance, partially offset by higher dividend income from the Investment Funds. The size of our portfolio increased to $1,957,553 as of December 31, 2021 from $1,922,966 as of December 31, 2020, at amortized cost. As of December 31, 2021, the weighted average yield of our first and second lien debt increased to 7.7% from 7.6% as of December 31, 2020, on amortized cost, primarily due to new fundings being originated at a higher weighted average yield than the yield of positions that repaid or were sold.
Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement.    
Expenses
 For the years ended December 31,
 202220212020
Base management fees$28,803 $28,343 $28,648 
Incentive fees21,414 17,680 18,555 
Professional fees3,059 3,165 3,082 
Administrative service fees1,636 1,338 679 
Interest expense and credit facility fees43,961 30,753 39,581 
Directors’ fees and expenses640 561 398 
Other general and administrative1,872 1,765 1,795 
Excise tax expense1,829 782 573 
Net expenses$103,214 $84,387 $93,311 
Interest expense and credit facility fees for the years ended December 31, 2022, 2021 and 2020 were comprised of the following:
 For the years ended December 31,
 202220212020
Interest expense$41,977 $28,829 $35,820 
Facility unused commitment fee1,129 1,161 1,766 
Amortization of deferred financing costs855 763 1,886 
Other fees— — 109 
Total interest expense and credit facility fees$43,961 $30,753 $39,581 
Cash paid for interest expense$38,483 $29,355 $33,149 
Average principal debt outstanding$1,039,077 $1,021,326 $1,111,397 
Weighted average interest rate3.99 %2.76 %3.15 %
The increase in interest expense for the year ended December 31, 2022 compared to the comparable period in 2021 was primarily driven by higher weighted average interest rates. The decrease in interest expense for the year ended December 31, 2021 compared to the comparable period in 2020 was primarily driven by lower weighted average interest rates and lower average debt outstanding.
63

Table of Contents
Below is a summary of the base management fees and incentive fees incurred during the years ended December 31, 2022, 2021 and 2020:
For the years ended December 31,
202220212020
Base management fees$28,803 $28,343 $28,648 
Incentive fees on pre-incentive fee net investment income21,414 17,680 18,555 
Realized capital gains incentive fees— — — 
Accrued capital gains incentive fees— — — 
Total capital gains incentive fees— — — 
Total incentive fees21,414 17,680 18,555 
Total base management fees and incentive fees$50,217 $46,023 $47,203 
The increase in base management fees for the year ended December 31, 2022 from the comparable period in 2021 was driven by higher average fair value of investments during the year. The increase in incentive fees for the year ended December 31, 2022 from the comparable period in 2021 was driven by higher pre-incentive fee net investment income. The decrease in base management fees for the year ended December 31, 2021 from the comparable period in 2020 was driven by lower average fair value of investments during the year. The decrease in incentive fees for the year ended December 31, 2021 from the comparable period in 2020 was driven by lower pre-incentive fee net investment income.
For the years ended December 31, 2022, 2021 and 2020, we recorded no accrued capital gains incentive fees based upon our cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2022, 2021 and 2020, respectively. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for more information on our incentive and base management fees.
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of us. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments
During the years ended December 31, 2022, 2021 and 2020, we had realized gains on 20, 34, and 9 investments, respectively, totaling approximately $8,022, $19,381, and $1,473, respectively, which were offset by realized losses on 13, 9, and 20 investments, respectively, totaling approximately $7,057, $343, and $59,946, respectively. During the years ended December 31, 2022, 2021 and 2020, we had a change in unrealized appreciation on 43, 110, and 78 investments, respectively, totaling approximately $48,588, $71,264, and $65,851, respectively, which was offset by a change in unrealized depreciation on 144, 76, and 97 investments, respectively, totaling approximately $74,185, $18,583, and $85,507, respectively.
During October 2020, Direct Travel completed a restructuring whereby the lenders received the majority of the equity in Direct Travel, but maintained the principal balance in the existing debt. As part of the transaction, the lenders also provided a delayed draw term loan facility to support ongoing liquidity of the business. As part of the restructuring, we received an approximate 9% ownership stake in Direct Travel.

During October 2020, Central Security Group, Inc. completed a restructuring whereby a portion of the first lien debt held by us was exchanged into common equity. As a result, $8,566 of unrealized depreciation was reversed and we
realized a loss of $8,562 during the year ended December 31, 2020.
64

Table of Contents
Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the years ended December 31, 2022, 2021 and 2020 were as follows:
 For the years ended December 31,
 202220212020
Net realized gain (loss) on investments$965 $19,038 $(58,473)
Net change in unrealized appreciation (depreciation) on investments(25,597)52,681 (19,656)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments$(24,632)$71,719 $(78,129)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the years ended December 31, 2022, 2021 and 2020 were as follows:
 For the years ended December 31,
 202220212020
TypeNet realized gain (loss)Net change in unrealized appreciation (depreciation)Net realized gain (loss)Net change in unrealized appreciation (depreciation)Net realized gain (loss)Net change in unrealized appreciation (depreciation)
First Lien Debt$2,626 $(16,672)$2,413 $34,383 $(58,766)$(8,557)
Second Lien Debt(5,615)(8,802)(125)13,677 (228)(13,965)
Equity Investments3,954 (1,046)16,750 2,845 522 1,697 
Investment Funds— 923 — 1,813 — (3,104)
Total$965 $(25,597)$19,038 $52,718 $(58,472)$(23,929)
Net change in unrealized appreciation (depreciation) in our investments for the year ended December 31, 2022 compared to the comparable period in 2021 was primarily driven by wider market yields partially offset by improving credit fundamentals in certain 4 and 5 risk rated investments. Net change in unrealized depreciation in our investments for the year ended December 31, 2021 compared to the comparable period in 2020 was primarily driven by improving credit fundamentals and tightening market yields in 2021. Net change in unrealized appreciation (depreciation) is also driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.
Middle Market Credit Fund, LLC (“Credit Fund”)
On February 29, 2016, we and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended and restated on June 24, 2016 and February 22, 2021 and May 16, 2022 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in our consolidated financial statements. Credit Fund is managed by a six-member board of managers, on which we and Credit Partners each have equal representation. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by us. By virtue of our respective membership interests, we and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Credit Fund primarily invests in first lien loans of middle market companies sourced primarily by us and our affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of us and Credit Partners. Therefore, although we own more than 25% of the voting securities of Credit Fund, we do not believe that we have control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (“Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer”), MMCF CLO 2019-2, LLC (the "2019-2 Issuer") and MMCF Warehouse II, LLC (“Credit Fund Warehouse II”), each a Delaware limited liability company are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements
Since inception of Credit Fund and through December 31, 2022 and 2021, we and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $216,000 in subordinated loans, respectively, to Credit Fund. On May 25, 2021, the Company and Credit Partners received an aggregate return of capital on the subordinated loans of $46,000, of which the Company received $23,000. The cost and fair value of our investment in Credit Fund was $193,001 and $190,065, respectively, as of December 31, 2022 and $193,000 and $184,141, respectively, as of December 31,
65

Table of Contents
2021. Our portion of the dividend declared by Credit Fund was $20,500, $20,000 and $19,750 for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022 and 2021, our annualized dividend yield from Credit Fund was 11.4% and 10.4%, respectively.
Below is a summary of Credit Fund’s portfolio as of December 31, 2022 and 2021:
As of December 31,
 20222021
Senior secured loans(1)
$955,605 $942,930 
Weighted average yields of senior secured loans based on amortized cost (2)
10.0 %6.0 %
Weighted average yields of senior secured loans based on fair value (2)
10.5 %6.1 %
Number of portfolio companies in Credit Fund45 45 
Average amount per portfolio company(1)
$21,236 $20,954 
Number of loans on non-accrual status— — 
Percentage of loans at floating interest rates(3)(4)
100.0 %100.0 %
(1)At par/principal amount.
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2022 and 2021. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(3)Floating rate debt investments are generally subject to interest rate floors.
(4)Percentages based on fair value.
During the years ended December 31, 2022, 2021 and 2020, the Company sold 8, 8 and 4 investments, respectively, to Credit Fund for proceeds of $113,509, $118,204 and $62,754, respectively, and realized gains (losses) of $(439), $1,075 and $(2,289), respectively. See Note 5, Middle Market Credit Fund, LLC, to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
Middle Market Credit Fund II, LLC (“Credit Fund II”)
On November 3, 2020, we and Cliffwater Corporate Lending Fund (“CCLF”) entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in our consolidated financial statements. Credit Fund II is managed by a four-member board, on which we and CCLF have equal representation. We and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of our respective membership interests, we and CCLF each indirectly bear an allocable share of all expenses and other obligations of Credit Fund II.
Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II's initial portfolio was funded in November 2020 with existing senior secured debt investments contributed by us and as part of the transaction, we determined that the contribution met the requirements under ASC 860, Transfers and Servicing. Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of our representatives and one of CCLF's representatives. Therefore, although we own more than 25% of the voting securities of Credit Fund II, we do not believe that we have control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements.
Since inception of Credit Fund II and through December 31, 2022, we and CCLF made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. The cost and fair value of our investment in Credit Fund II was $78,096 and $72,957, respectively, as of December 31, 2022 and $78,096 and $77,958, respectively, as of December 31, 2021. Our portion of the dividend declared by Credit Fund II was $10,348, $10,096 and $1,446 for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022 and 2021, our annualized dividend yield from Credit Fund II was 14.2% and 12.9%, respectively.
66

Table of Contents
Below is a summary of Credit Fund II’s portfolio as of December 31, 2022 and 2021:
As of December 31,
 20222021
Senior secured loans(1)
$253,310 $240,878 
Weighted average yields of senior secured loans based on amortized cost (2)
11.1 %7.3 %
Weighted average yields of senior secured loans based on fair value (2)
11.3 %7.2 %
Number of portfolio companies in Credit Fund II35 36 
Average amount per portfolio company(1)
$7,237 $6,691 
Number of loans on non-accrual status— — 
Percentage of portfolio at floating interest rates(3)(4)
97.9 %97.7 %
Percentage of portfolio at fixed interest rates(4)
2.1 %2.3 %
(1)At par/principal amount.
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2022 and 2021. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(3)Floating rate debt investments are generally subject to interest rate floors.
(4)Percentages based on fair value.

During the year ended December 31, 2022, we sold 10 investments to Credit Fund II for proceeds of $68,167 and realized gains (losses) of $(840). During the year ended December 31, 2021, we sold 17 investments to Credit Fund II for proceeds of $84,554 and realized gains (losses) of $468. We did not sell any investments to Credit Fund II during the year ended December 31, 2020. On November 3, 2020, pursuant to a contribution agreement by and between us and Credit Fund II, we contributed 45 senior secured debt investments with an aggregate principal balance of approximately $250 million to Credit Fund II in exchange for approximately 84.13% of Credit Fund II’s membership interests and gross cash proceeds of approximately $170 million. There were no subsequent transfers during December 31, 2020. See Note 6, Middle Market Credit Fund II, LLC, to the consolidated financial statements in Part II, Item 8 of this Form 10-K for further information about Credit Fund II.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Credit Facility, as defined below, the issuance of debt, and through securitization of a portion of our existing investments. The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes. We believe our current cash position, available capacity on our revolving credit facilities – which is well in excess of our unfunded commitments – and net cash provided by operating activities will provide us with sufficient resources to meet our obligations and continue to support our investment objectives, including reserving for the capital needs which may arise at our portfolio companies.
Credit Facility, Senior Notes, and 2015-1R Notes
On March 21, 2014, we closed on a senior secured revolving credit facility (“the Credit Facility”), as amended from time to time. The maximum principal amount of the Credit Facility is $688,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional
67

Table of Contents
indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
Although we believe that we will remain in compliance, there are no assurances that we will continue to comply with the covenants in the Credit Facility. Failure to comply with these covenants could result in a default under the Credit Facility that, if we were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the Credit Facility, and thereby have a material adverse impact on our business, financial condition and results of operations.
For more information on the Credit Facility, see Note 7 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
On December 30, 2019, we closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024 (the “2019 Notes”). On December 11, 2020, we issued an additional $75.0 million aggregate principal amount of senior unsecured notes due December 31, 2024 (the "2020 Notes,” together with the 2019 Notes, the “Senior Notes”). The 2020 Notes bear interest at an interest rate of 4.500%. We paid an affiliate of Carlyle a fee of $562 for underwriting services rendered in connection with the issuance of the 2020 Notes in the amount of 0.75% of the aggregate principal amount of the 2020 Notes. The interest rates of the Senior Notes are subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event, subject to certain exceptions, the Senior Notes cease to have an investment grade rating. The Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. For more information on the Senior Notes, see Note 8 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
On June 26, 2015, we completed the 2015-1 Debt Securitization, which was refinanced on August 30, 2018 (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes were issued by Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of us. The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. The 2015-1R Notes consist of:
(a) $234,800 AAA Class A-1-1-R Notes, which bear interest at the three-month LIBOR plus 1.55%;
(b) $50,000 AAA Class A-1-2-R Notes, which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter;
(c) $25,000 AAA Class A-1-3-R Notes, which bear interest at 4.56%;
(d) $66,000 Class A-2-R Notes, which bear interest at the three-month LIBOR plus 2.20%;
(e) $46,400 single-A Class B Notes, which bear interest at the three-month LIBOR plus 3.15%;
(f) $27,000 BBB- Class C Notes , which bear interest at the three-month LIBOR plus 4.00%; and
(g) 2015-1 Issuer Preferred Interests with a nominal value of $104,525 at close of the refinancing.
The 2015-1R Notes have a reinvestment period end date and maturity date of October 15, 2023 and October 15, 2031, respectively. In connection with the initial financing, we made customary representations, warranties and covenants to the 2015-1 Issuer. The Class A-1-1-R, Class A-1-2-R, Class A-1-3-R, Class A-2-R, Class B and Class C Notes are included in the consolidated financial statements included in Part II, Item 8 of this Form 10-K. The 2015-1 Issuer Preferred Interests were eliminated in consolidation.
For more information on the 2015-1R Notes, see Note 8 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
68

Table of Contents
As of December 31, 2022 and 2021, we had $30,506 and $93,074, respectively, in cash, cash equivalents and restricted cash. The Credit Facility consisted of the following as of December 31, 2022 and 2021:
 December 31, 2022
 Total
Facility		Borrowings
Outstanding
Unused
Portion(1)
Amounts Available(2)
Credit Facility$688,000 $440,441 $247,559 $247,902 
Total$688,000 $440,441 $247,559 $247,902 
 
 December 31, 2021
 Total
Facility		Borrowings
Outstanding
Unused
Portion(1)
Amounts Available(2)
Credit Facility$688,000 $407,655 $280,345 $280,706 
Total$688,000 $407,655 $280,345 $280,706 
(1)The unused portion is the amount upon which commitment fees are based.
(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
The following were the carrying values (before debt issuance costs) for the Senior Notes disclosed but not carried at fair value as of December 31, 2022 and 2021:
Carrying value as of December 31,
 20222021
2019 Notes$115,000 $115,000 
2020 Notes75,000 75,000 
Total$190,000 $190,000 
The following were the carrying values (before debt issuance costs) of the Company's 2015-1R Notes disclosed but not carried at fair value as of December 31, 2022 and 2021:
Carrying value as of December 31,
2015-1R Notes20222021
Aaa/AAA Class A-1-1-R Notes$234,800 $234,800 
Aaa/AAA Class A-1-2-R Notes50,000 50,000 
Aaa/AAA Class A-1-3-R Notes25,000 25,000 
AA Class A-2-R Notes66,000 66,000 
A Class B Notes46,400 46,400 
BBB- Class C Notes27,000 27,000 
Total$449,200 $449,200 

As of December 31, 2022 and 2021, we had a combined $1,079,641 and $1,046,855, respectively, of outstanding consolidated indebtedness under the Credit Facility, the 2015-1R Notes and the Senior Notes. Our annualized interest cost as of December 31, 2022 and 2021, was 5.78% and 2.75%, excluding fees (such as fees on undrawn amounts and amortization of upfront fees). For the years ended December 31, 2022, 2021 and 2020, we incurred $41,977, $28,829 and $35,820, respectively, of interest expense and $1,129, $1,161 and $1,766, respectively, of unused commitment fees.

Equity Activity
Common stock issued and outstanding as of December 31, 2022 and 2021 was 51,060,136 and 53,142,454, respectively.
69

Table of Contents
The following table summarizes activity in the number of shares of our common stock outstanding during the years ended December 31, 2022, 2021 and 2020:
 For the years ended December 31,
 202220212020
Common stock outstanding, beginning of year53,142,454 55,320,309 57,763,811 
Repurchase of common stock(2,082,318)(2,177,855)(2,443,502)
Common stock outstanding, end of year51,060,136 53,142,454 55,320,309 
On May 5, 2020, we issued and sold 2,000,000 shares of Preferred Stock, par value $0.01, to an affiliate of Carlyle in a private placement at a price of $25 per share. Shares of Preferred Stock issued and outstanding as of both December 31, 2022 and 2021 were 2,000,000. For more information on the Preferred Stock, see Note 10 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
Dividends and Distributions
Effective with the third quarter 2020 dividend, we updated our dividend policy such that the base dividend was $0.32 per share of common stock. Effective with the third quarter 2022 dividend, we updated our dividend policy such that the base dividend was $0.34 per share of common stock. Effective with the fourth quarter 2022 dividend, we updated our dividend policy such that the base dividend is $0.36 per share of common stock. Our dividend policy is subject to change by the Board of Directors in its sole discretion at any time.
The following table summarizes our dividends declared per share of common stock during the three most recent fiscal years:
Date DeclaredRecord DatePayment DatePer Share Amount 
2020
February 24, 2020March 31, 2020April 17, 2020$0.37 
May 4, 2020June 30, 2020July 17, 20200.37 
August 3, 2020September 30, 2020October 16, 20200.37 (1)
November 2, 2020December 31, 2020January 15, 20210.36 (1)
Total$1.47 
2021
February 22, 2021March 31, 2021April 16, 2021$0.37 (1)
May 3, 2021June 30, 2021July 15, 20210.36 (1)
August 2, 2021September 30, 2021October 15, 20210.38 (1)
November 1, 2021December 31, 2021January 14, 20220.39 (1)
Total$1.50 
2022
February 18, 2022March 31, 2022April 15, 2022$0.40 (1)
May 2, 2022June 30, 2022July 15, 20220.40 (1)
August 8, 2022September 30, 2022October 14, 20220.40 (1)
October 31, 2022December 30, 2022January 16, 20230.44 (1)
Total$1.64 
(1)Per Share Amount includes the base dividend and a special/supplemental dividend. For more information on the base dividend and special/supplemental dividend, see Note 10 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
Our Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference) plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends on our Preferred Stock are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at our option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock.
The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by
70

Table of Contents
an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's Articles Supplementary. The conversion price as of December 31, 2022 was $9.31.
The following table summarizes the Company’s dividends declared per share of Preferred Stock during the three most recent fiscal years. Unless otherwise noted, dividends declared were paid in cash.
Date DeclaredRecord DatePayment DatePer Share Amount
2020
June 30, 2020June 30, 2020September 30, 2020$0.277 
September 30, 2020September 30, 2020September 30, 20200.423 
December 31, 2020December 31, 2020December 31, 20200.438 
Total$1.138 
2021
March 31, 2021March 31, 2021March 31, 2021$0.438 
June 30, 2021June 30, 2021June 30, 20210.438 
September 30, 2021September 30, 2021September 30, 20210.438 
December 29, 2021December 31, 2021December 31, 20210.438 
Total$1.752 
2022
March 25, 2022March 31, 2022March 31, 2022$0.438 
June 27, 2022June 30, 2022June 30, 20220.438 
September 22, 2022September 30, 2022September 30, 20220.438 
December 16, 2022December 30, 2022December 31, 20220.438 
Total$1.752 
OFF BALANCE SHEET ARRANGEMENTS
In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of December 31, 2022 and 2021, in Part II, Item 8 of this Form 10-K, for any such exposure.
We have in the past, currently are and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.
We had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:
 Principal Amount as of December 31,
 20222021
Unfunded delayed draw commitments$83,743 $112,985 
Unfunded revolving term loan commitments74,463 67,513 
Total unfunded commitments$158,206 $180,498 
Pursuant to an undertaking by us in connection with the 2015-1 Debt Securitization, we agreed to hold, on an ongoing basis, the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for as long as any securities of the 2015-1 Issuer remains outstanding. As of December 31, 2022 and 2021, we were in compliance with this undertaking.
ASSET COVERAGE
In accordance with the Investment Company Act, a BDC is only allowed to borrow amounts such that its “asset coverage,” as defined in the Investment Company Act, satisfies the minimum asset coverage ratio specified in the Investment
71

Table of Contents
Company Act after such borrowing. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock.
Prior to March 23, 2018, BDCs were required to maintain a minimum asset coverage ratio of 200%. On March 23, 2018, an amendment to Section 61(a) of the Investment Company Act was signed into law to permit BDCs to reduce the minimum asset coverage ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. Under the 200% minimum asset coverage ratio, BDCs are permitted to borrow up to one dollar for investment purposes for every one dollar of investor equity, and under the 150% minimum asset coverage ratio, BDCs are permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity. In other words, Section 61(a) of the 1940 Act, as amended, permits BDCs to potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1.
On April 9, 2018 and June 6, 2018, the Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and the stockholders of the Company, respectively, approved the application to the Company of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the 1940 Act. As a result, the minimum asset coverage ratio applicable to the Company was reduced from 200% to 150%, effective as of June 7, 2018.
As of December 31, 2022 and 2021, the Company had total senior securities of $1,129,641 and $1,096,855, respectively, consisting of secured borrowings under the Credit Facility, the Senior Notes, the 2015-1R Notes and the Preferred Stock, and had asset coverage ratios of 176.79% and 181.94%, respectively. For a discussion of the principal risk factors associated with these senior securities, see Part I, Item 1A of this Form 10‑K. For purposes of the asset coverage ratio, the Preferred Stock is classified as a senior security.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and judgments are based on historical information, information currently available to us and on various other assumptions management believes to be reasonable under the circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations. Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. We believe the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our consolidated financial statements and should be read in conjunction with our consolidated financial statements and related notes in Part II, Item 8, as well as with our “Risk Factors” in Part I, Item 1A of this Form 10-K.
Fair Value Measurements
The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained, or alternative pricing sources may be utilized, including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid, or for which the pricing source does not provide a valuation or methodology, or provides a valuation or methodology that, in the judgment of the Investment Adviser, does not represent fair value, shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to
72

Table of Contents
approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) if applicable, prior to September 8, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm; and (v) if applicable, prior to September 8, 2022, the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
•the nature and realizable value of any collateral;
•call features, put features and other relevant terms of debt;
•the portfolio company’s leverage and ability to make payments;
•the portfolio company’s public or private credit rating;
•the portfolio company’s actual and expected earnings and discounted cash flow;
•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
•the markets in which the portfolio company does business and recent economic and/or market events; and
•comparisons to comparable transactions and publicly traded securities.
Investment performance data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which, in many cases, may reflect a lag in information.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of December 31, 2022 and 2021.
U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
For further information on the fair value hierarchies, our framework for determining fair value, and the composition of our portfolio, see Note 3 to the consolidated financial statements in Part II, Item 8 of this Form 10-K for further information on fair value measurements.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the Consolidated Statements of Operations in Part II, Item 8 of this Form 10-K reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
73

Table of Contents

Revenue Recognition
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are current or there is no longer any reasonable doubt that such principal or interest will be collected in full and, in management’s judgment, are likely to remain current. Management may determine not to place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.
The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.
Valuation Risk
Our investments generally do not have a readily available market price. Our Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, values our investments for which market quotations are not readily available in good faith at fair value in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. In addition, because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.
74

Table of Contents
Interest Rate Risk
As of December 31, 2022, on a fair value basis, approximately 1.5% of our debt investments bear interest at a fixed rate and approximately 98.5% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors. Additionally, the Credit Facility is also subject to floating interest rates and is currently paid based on floating SOFR rates.
Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.
The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. These hypothetical interest income calculations are based on a model of the settled debt investments in our portfolio, excluding structured finance obligations and our investments in Credit Fund and Credit Fund II, held as of December 31, 2022 and 2021, and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings and notes payable as of December 31, 2022 and 2021 and based on the terms of our Credit Facility and notes payable. Interest expense on our Credit Facility and notes payable is calculated using the stated interest rate as of December 31, 2022 and 2021, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our net interest income.

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.
Based on our Consolidated Statements of Assets and Liabilities as of December 31, 2022 and 2021, the following table shows the annual impact on net investment income of base rate changes in interest rates for our settled debt investments (considering interest rate floors for variable rate instruments), excluding our investments in Credit Fund and Credit Fund II, and outstanding secured borrowings and notes payable assuming no changes in our investment and borrowing structure:
 As of December 31, 2022As of December 31, 2021
Basis Point ChangeInterest
Income		Interest
Expense		Net
Investment
Income		Interest
Income		Interest
Expense		Net
Investment
Income
Up 300 basis points$48,535 $(25,939)$22,596 $34,923 $(24,832)$10,091 
Up 200 basis points$32,357 $(17,293)$15,064 $19,935 $(16,513)$3,422 
Up 100 basis points$16,178 $(8,646)$7,532 $4,954 $(8,195)$(3,241)
Down 100 basis points$(16,178)$8,646 $(7,532)$(147)$1,083 $936 
Down 200 basis points$(32,249)$17,287 $(14,962)$(147)$1,083 $936 
Down 300 basis points$(48,089)$25,744 $(22,345)$(147)$1,083 $936 
75

Table of Contents
Item 8. Financial Statements and Supplementary Data
CARLYLE SECURED LENDING, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
Consolidated Schedules of Investments as of December 31, 2022 and 2021
Notes to Consolidated Financial Statements
76

Table of Contents
Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of
Carlyle Secured Lending, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of assets and liabilities of Carlyle Secured Lending, Inc. (the “Company”), including the consolidated schedules of investments, as of December 31, 2022 and 2021, the related consolidated statements of operations, changes in net assets, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations, changes in its net assets, and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 2022 and 2021, by correspondence with the custodian, debt agents, and the underlying investees; when replies were not received from the debt agents and the underlying investees, we performed other auditing procedures.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
77

Table of Contents
Valuation of investments using significant unobservable inputs
Description of the MatterAt December 31, 2022, the fair value of the Company's investments categorized in Level III of the fair value hierarchy (Level III investments) totaled $1.907 billion. As discussed in Note 3 to the consolidated financial statements (Note 3), management determined the fair value of the Company’s Level III investments by using valuation techniques such as comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses and using inputs which were significant to the valuation of these investments, such as observable market inputs, updated credit statistics, and significant unobservable inputs (significant inputs). The significant unobservable inputs used to determine fair value required significant management judgment or estimation and, as disclosed in Note 3, included discount rates, comparable multiples, recovery rates, default rates, and indicative quotes.

Auditing the fair value of the Company's Level III investments was complex and judgmental due to the valuation techniques and significant unobservable inputs used by the Company to determine fair value.
How We Addressed the Matter in our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's investment valuation process. This included controls over management’s assessment of the valuation techniques and significant inputs used by management to determine the fair value measurements.

To test the valuation of the Company’s Level III investments, our audit procedures included, among others, evaluating the valuation techniques and significant inputs used by the Company. For each Level III investment, we gained an understanding of the valuation technique(s) and significant inputs used to value the investment and reviewed the information considered by the Company’s valuation designee, under the oversight of the Board of Directors, relating to the valuation. Our procedures also included testing, for a sample of Level III investments, significant inputs and the mathematical accuracy of the Company's valuation models.

For example, we compared market spreads, market value (EBITDA) multiples of publicly traded comparable companies, available precedent sales transactions of comparable companies, default rates and recovery rates to information available from third-party market research providers. We also compared certain of the significant inputs to underlying sources like public and private credit ratings and the most recently available portfolio company financial statements and compliance certificates provided by management. To evaluate the reasonableness of the unobservable inputs, we assessed whether these inputs were developed in a manner consistent with the Company’s valuation policies and in some instances, with the assistance of our valuation specialists, we independently developed fair value estimates using portfolio company and market information and compared them to the Company's estimates. We searched for and evaluated information that corroborated or contradicted the Company's significant inputs. We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the Company's year-end valuations.
/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2012.

Tysons, VA
February 27, 2023
78

Table of Contents
Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of
Carlyle Secured Lending, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Carlyle Secured Lending, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Carlyle Secured Lending, Inc. (the “Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of assets and liabilities of the Company, including the consolidated schedules of investments, as of December 31, 2022 and 2021, and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 27, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Ernst & Young LLP

Tysons, VA
February 27, 2023
79

Table of Contents
CARLYLE SECURED LENDING, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollar amounts in thousands, except per share data)
December 31, 2022December 31, 2021
ASSETS
Investments, at fair value
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,734,252 and $1,631,067, respectively)
$1,671,488 $1,607,731 
Investments—non-controlled/affiliated, at fair value (amortized cost of $44,626 and $38,462, respectively)
45,367 30,286 
Investments—controlled/affiliated, at fair value (amortized cost of $271,097 and $288,024, respectively)
263,022 275,035 
Total investments, at fair value (amortized cost of $2,049,975 and $1,957,553, respectively)
1,979,877 1,913,052 
Cash, cash equivalents and restricted cash30,506 93,074 
Receivable for investments sold1,528 530 
Interest and dividend receivable24,023 20,144 
Prepaid expenses and other assets5,763 4,550 
Total assets$2,041,697 $2,031,350 
LIABILITIES
Debt and Secured Borrowings, net of unamortized debt issuance costs of $2,449 and $2,833, respectively (Notes 7 and 8)
$1,077,192 $1,044,022 
Payable for investments purchased287 323 
Interest and credit facility fees payable (Notes 7 and 8)6,749 2,467 
Dividend payable (Note 10)22,446 20,705 
Base management and incentive fees payable (Note 4)12,681 11,819 
Administrative service fees payable (Note 4)1,711 482 
Other accrued expenses and liabilities3,208 2,728 
Total liabilities1,124,274 1,082,546 
Commitments and contingencies (Notes 9 and 12)
NET ASSETS
Cumulative convertible preferred stock, $0.01 par value; 2,000,000 shares issued and outstanding as of December 31, 2022 and December 31, 2021
50,000 50,000 
Common stock, $0.01 par value; 198,000,000 shares authorized; 51,060,136 and 53,142,454 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively
511 532 
Paid-in capital in excess of par value1,022,224 1,052,427 
Offering costs(1,633)(1,633)
Total distributable earnings (loss)(153,679)(152,522)
Total net assets$917,423 $948,804 
NET ASSETS PER COMMON SHARE$16.99 $16.91 
The accompanying notes are an integral part of these consolidated financial statements.
80

Table of Contents
CARLYLE SECURED LENDING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share data)
 For the years ended December 31,
 202220212020
Investment income:
From non-controlled/non-affiliated investments:
Interest income$138,598 $125,074 $140,815 
PIK income16,258 9,346 5,476 
Other income7,302 6,366 10,974 
Total investment income from non-controlled/non-affiliated investments162,158 140,786 157,265 
From non-controlled/affiliated investments:
Interest income3,287 173 14 
PIK income6,809 — — 
Other income9 10 — 
Total investment income from non-controlled/affiliated investments10,105 183 14 
From controlled/affiliated investments:
Interest income3,873 185 3,611 
Dividend income30,848 30,063 21,228 
Other income272 21 — 
Total investment income from controlled/affiliated investments34,993 30,269 24,839 
Total investment income207,256 171,238 182,118 
Expenses:
Base management fees (Note 4)28,803 28,343 28,648 
Incentive fees (Note 4)21,414 17,680 18,555 
Professional fees3,059 3,165 3,082 
Administrative service fees (Note 4)1,636 1,338 679 
Interest expense and credit facility fees (Notes 7 and 8)43,961 30,753 39,581 
Directors’ fees and expenses640 561 398 
Other general and administrative1,872 1,765 1,795 
Total expenses101,385 83,605 92,738 
Net investment income (loss) before taxes105,871 87,633 89,380 
Excise tax expense1,829 782 573 
Net investment income (loss)104,042 86,851 88,807 
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) from:
Non-controlled/non-affiliated investments(1,050)19,035 (58,473)
Non-controlled/affiliated investments— 3 — 
Controlled/affiliated investments2,015 — — 
Currency gains (losses) on non-investment assets and liabilities(442)(177)497 
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliated investments(39,431)41,541 (11,629)
Non-controlled/affiliated investments8,918 3,215 (900)
Controlled/affiliated investments4,916 7,925 (7,127)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities6,669 1,960 (4,346)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities(18,405)73,502 (81,978)
Net increase (decrease) in net assets resulting from operations85,637 160,353 6,829 
Preferred stock dividend3,500 3,500 2,275 
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders$82,137 $156,853 $4,554 
Basic and diluted earnings per common share (Note 10)
Basic$1.58 $2.89 $0.08 
Diluted$1.49 $2.69 $0.08 
Weighted-average shares of common stock outstanding (Note 10)
81

Table of Contents
 For the years ended December 31,
 202220212020
Basic52,112,420 54,244,432 56,421,137 
Diluted57,482,099 59,531,683 56,421,137 
The accompanying notes are an integral part of these consolidated financial statements.
82

Table of Contents
CARLYLE SECURED LENDING, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(dollar amounts in thousands)
 For the years ended December 31,
 202220212020
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)$104,042 $86,851 $88,807 
Net realized gain (loss)523 18,861 (57,976)
Net change in unrealized appreciation (depreciation) on investments(25,597)52,681 (19,656)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities6,669 1,960 (4,346)
Net increase (decrease) in net assets resulting from operations85,637 160,353 6,829 
Capital transactions:
Preferred stock issued— — 50,000 
Repurchase of common stock(28,457)(28,439)(27,254)
Dividends declared (Note 10)(88,561)(84,473)(84,683)
Net increase (decrease) in net assets resulting from capital share transactions(117,018)(112,912)(61,937)
Net increase (decrease) in net assets(31,381)47,441 (55,108)
Net assets at beginning of year948,804 901,363 956,471 
Net assets at end of year$917,423 $948,804 $901,363 
The accompanying notes are an integral part of these consolidated financial statements.
83

Table of Contents
CARLYLE SECURED LENDING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
 For the years ended December 31,
 202220212020
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations$85,637 $160,353 $6,829 
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Amortization of deferred financing costs1,378 1,342 2,133 
Net accretion of discount on investments(9,990)(9,383)(8,186)
Paid-in-kind interest(26,019)(9,178)(6,145)
Net realized (gain) loss on investments(965)(19,038)58,473 
Net realized currency (gain) loss on non-investment assets and liabilities442 177 (497)
Net change in unrealized (appreciation) depreciation on investments25,597 (52,681)19,656 
Net change in unrealized currency (gains) losses on non-investment assets and liabilities(6,669)(1,960)4,346 
Cost of investments purchased and change in payable for investments purchased(635,278)(842,981)(620,829)
Proceeds from contribution of investments to Credit Fund II— — 168,897 
Proceeds from sales and repayments of investments and change in receivable for investments sold578,321 849,039 688,798 
Changes in operating assets:
Interest receivable(1,465)1,581 (3,741)
Dividend receivable(2,414)(2,042)365 
Prepaid expenses and other assets(916)(668)(96)
Changes in operating liabilities:
Interest and credit facility fees payable4,282 28 (4,325)
Base management and incentive fees payable862 270 (1,687)
Administrative service fees payable1,229 397 8 
Other accrued expenses and liabilities480 175 1,160 
Net cash provided by (used in) operating activities14,512 75,431 305,159 
Cash flows from financing activities:
Proceeds from issuance of preferred stock— — 50,000 
Repurchase of common stock(28,457)(28,439)(27,254)
Borrowings on SPV Credit Facility and Credit Facility372,246 419,205 452,833 
Repayments of SPV Credit Facility and Credit Facility(332,758)(357,500)(725,469)
Proceeds from issuance of Senior Notes, net of unamortized debt issuance costs— — 74,438 
Debt issuance costs paid(1,291)(382)(1,488)
Dividends paid in cash(86,820)(83,660)(96,551)
Net cash provided by (used in) financing activities(77,080)(50,776)(273,491)
Net increase (decrease) in cash and cash equivalents(62,568)24,655 31,668 
Cash, cash equivalents and restricted cash, beginning of year93,074 68,419 36,751 
Cash, cash equivalents and restricted cash, end of year$30,506 $93,074 $68,419 
Supplemental disclosures:
Interest paid during the year$38,483 $29,355 $33,149 
Taxes, including excise tax, paid during year$774 $641 $391 
Dividends declared during the year$88,561 $84,473 $84,683 
Credit Fund II members’ interest received in consideration of contribution of investments (Note 6)$— $— $78,096 
The accompanying notes are an integral part of these consolidated financial statements.
84
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
First Lien Debt (66.3% of fair value)
ADPD Holdings, LLC^*(2)(3)(14)(15)Consumer ServicesSOFR
6.00%
10.37%8/16/20228/15/2028$9,913 $9,651 $9,571 1.04 %
Advanced Web Technologies Holding Company^*(2)(3)(14)Containers, Packaging & GlassLIBOR
6.25%
10.67%12/17/202012/17/20269,315 9,144 9,196 1.00 
Airnov, Inc.^*(2)(3)(14)Containers, Packaging & GlassLIBOR
5.00%
9.75%12/20/201912/19/20252,035 2,013 2,019 0.22 
Allied Universal Holdco LLC^(2)(3)(15)Business ServicesLIBOR
3.75%
8.17%2/17/20215/14/2028493 494 467 0.05 
Alpine Acquisition Corp II^*(2)(3)(14)(15)Transportation: CargoSOFR
5.50%
9.76%4/19/202211/30/20267,597 7,406 7,188 0.78 
American Physician Partners, LLC^*(2)(3)(15)Healthcare & PharmaceuticalsSOFR
6.75%, 3.50% PIK
14.67%1/7/20198/5/202230,121 30,125 26,002 2.83 
American Physician Partners, LLC^(2)(3)(14)(15)Healthcare & PharmaceuticalsSOFR
6.75%, 3.50% PIK
14.67%12/16/20222/15/20237997647510.08 
Analogic Corporation^*(2)(3)(14)Capital EquipmentLIBOR
5.25%
9.67%6/22/20186/22/20242,462 2,449 2,402 0.26 
Applied Technical Services, LLC^(2)(3)(14)Business ServicesLIBOR
5.75%
10.52%12/29/202012/29/2026533 524 531 0.06 
Appriss Health, LLC^(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
7.25%
11.54%5/6/20215/6/202736,831 36,218 35,303 3.85 
Apptio, Inc.^(2)(3)(14)SoftwareLIBOR
6.00%
9.94%1/10/20191/10/20256,604 6,544 6,604 0.72 
Ascend Buyer, LLC^*(2)(3)(14)(15)Containers, Packaging & GlassSOFR
6.25%
10.67%9/30/20219/30/20283,420 3,342 3,338 0.36 
Associations, Inc.^(2)(3)(14)Construction & BuildingSOFR
4.00%, 2.50% PIK
11.04%7/2/20217/2/202712,854 12,754 12,451 1.36 
Atlas AU Bidco Pty Ltd (Australia)^(2)(3)(7)(14)High Tech IndustriesSOFR
7.25%
11.48%12/15/202212/12/20292,890 2,796 2,796 0.31 
Aurora Lux FinCo S.Á.R.L. (Luxembourg)^*(2)(3)(7)SoftwareLIBOR
6.00%
10.32%12/24/201912/24/202632,158 31,649 30,389 3.31 
Avalara, Inc.^(2)(3)(14)Diversified Financial ServicesSOFR
7.25%
11.83%10/19/202210/19/202822,500 21,898 21,752 2.37 
Barnes & Noble, Inc.^(2)(3)(11)(15)RetailSOFR
8.31%
12.73%8/7/201912/20/202627,848 27,073 26,771 2.92 
BlueCat Networks, Inc. (Canada)^(2)(3)(7)(14)High Tech IndustriesSOFR
4.00%, 2.00% PIK
10.46%8/8/20228/8/20283,198 3,126 3,092 0.34 
BMS Holdings III Corp.^(2)(3)(14)Construction & BuildingLIBOR
5.50%
10.23%9/30/20199/30/20264,832 4,688 4,658 0.51 
Bradyifs Holdings, LLC^*(2)(3)(14)(15)WholesaleSOFR
6.25%
10.83%2/21/202011/22/202512,884 12,650 12,720 1.39 
Bubbles Bidco S.P.A. (Italy)^(2)(7)(14)Consumer Goods: Non-DurableLIBOR
9.25% (100% PIK)
11.38%10/20/202110/20/2028€5,189 5,815 5,505 0.60 
Bubbles Bidco S.P.A. (Italy)^(2)(7)(14)Consumer Goods: Non-DurableLIBOR
6.25%
8.38%10/20/202110/20/2028€— — (40)— 
85
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
Celerion Buyer, Inc.^*(2)(3)(14)Healthcare & PharmaceuticalsSOFR
6.50%
10.64%11/3/202211/3/2029$3,152 $3,056 $3,054 0.33 %
Chartis Holding, LLC^*(2)(3)(14)Business ServicesLIBOR
5.00%
9.77%5/1/20195/1/2025687 679 680 0.07 
Chemical Computing Group ULC (Canada)^*(2)(3)(7)(14)
(15)		SoftwareSOFR
4.50%
8.57%8/30/20188/30/2024462 461 455 0.05 
CircusTrix Holdings, LLC^*(2)(3)Leisure Products & ServicesLIBOR
5.50%
9.88%2/2/20181/16/202410,555 10,542 10,476 1.14 
CircusTrix Holdings, LLC^(2)(3)Leisure Products & ServicesLIBOR
5.50%
9.88%1/8/20217/16/2023557 500 557 0.06 
Comar Holding Company, LLC^*(2)(3)(14)Containers, Packaging & GlassLIBOR
5.75%
10.47%6/18/20186/18/202427,638 27,461 26,671 2.91 
Cority Software Inc. (Canada)^*(2)(3)(7)(14)SoftwareSOFR
5.50%
9.17%7/2/20197/2/202610,409 10,266 10,277 1.12 
Cority Software Inc. (Canada)^(2)(3)(7)SoftwareSOFR
7.50%
11.06%9/3/20207/2/20261,860 1,823 1,848 0.20 
CPI Intermediate Holdings, Inc.^*(2)(3)(14)TelecommunicationsSOFR
5.50%
9.68%10/6/202210/6/20293,872 3,790 3,776 0.41 
CST Holding Company^*(2)(3)(14)(15)Consumer Goods: Non-DurableSOFR
6.75%
10.97%11/1/202211/1/20285,031 4,871 4,868 0.53 
DCA Investment Holding LLC^*(2)(3)(14)Healthcare & PharmaceuticalsSOFR
6.41%
10.46%3/11/20214/3/202814,288 14,137 13,523 1.47 
Denali Midco 2, LLC^(2)(3)(14)(15)Consumer ServicesSOFR
6.50%
10.92%9/15/202212/22/20277,696 7,411 7,317 0.80 
DermaRite Industries, LLC^*(2)(3)(8)Healthcare & PharmaceuticalsLIBOR
7.00%
8.00%3/3/20176/30/202320,767 20,202 9,261 1.01 
Dermatology Associates^(2)(3)(15)Healthcare & PharmaceuticalsSOFR
6.25% (100% PIK)
10.80%5/31/20163/31/202327,548 27,548 27,523 3.00 
Dermatology Associates^(2)(3)(8)(11)Healthcare & PharmaceuticalsSOFR
11.40% (100% PIK)
12.77%5/31/20163/31/202338,724 24,963 27,526 3.00 
Diligent Corporation^(2)(3)(14)TelecommunicationsLIBOR
6.25%
10.63%8/4/20208/4/2025659 647 630 0.07 
Dwyer Instruments, Inc.^*(2)(3)(14)Capital EquipmentLIBOR
6.00%
10.74%7/21/20217/21/20273,851 3,777 3,774 0.41 
Eliassen Group, LLC^*(2)(3)(14)Business ServicesSOFR
5.50%
10.07%4/14/20224/14/20281,580 1,515 1,523 0.17 
Ellkay, LLC^*(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
6.25%
11.00%9/14/20219/14/202714,107 13,849 13,540 1.48 
Emergency Communications Network, LLC^*(2)(3)TelecommunicationsSOFR
2.50%, 5.25% PIK
11.84%6/1/20176/1/202426,559 26,522 22,753 2.48 
EPS Nass Parent, Inc.^(2)(3)(14)Utilities: ElectricLIBOR
5.75%
10.48%4/19/20214/19/2028922 906 877 0.10 
EvolveIP, LLC^*(2)(3)(14)(15)TelecommunicationsSOFR
5.50%
10.09%11/26/20196/7/20255,556 5,554 5,447 0.59 
Excel Fitness Holdings, Inc.^*(2)(3)(14)(15)Leisure Products & ServicesSOFR
5.25%
10.25%4/29/20224/29/20296,671 6,541 6,344 0.69 
Excelitas Technologies Corp.^(2)(3)(14)(15)Capital EquipmentSOFR
5.75%
10.12%8/12/20228/12/20293,174 3,107 3,046 0.33 
Excelitas Technologies Corp.^(2)Capital EquipmentEURIBOR
5.75%
7.55%8/12/20228/12/2029€1,275 1,284 1,317 0.14 
86
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
FPG Intermediate Holdco, LLC^(2)(3)(14)(15)Consumer ServicesSOFR
6.50%
10.92%8/5/20223/5/2027$427 $347 $235 0.03 %
Greenhouse Software, Inc.^(2)(3)(14)SoftwareSOFR
7.00%
11.58%3/1/20219/1/202832,796 32,066 31,504 3.43 
Guidehouse LLP^(2)(3)Sovereign & Public FinanceLIBOR
6.25%
10.63%9/30/202210/16/202880 78 78 0.01 
Hadrian Acquisition Limited (United Kingdom)^(2)(3)(7)Diversified Financial ServicesSONIA
5.26%, 3.47% PIK
12.16%2/28/20222/28/2029£14,676 19,100 17,343 1.89 
Hadrian Acquisition Limited (United Kingdom)^(2)(3)(7)(14)Diversified Financial ServicesSONIA
5.00%, 2.75% PIK
11.18%2/28/20222/28/2029£3,580 4,094 4,171 0.45 
Harbour Benefit Holdings, Inc.^*(2)(3)(14)Business ServicesLIBOR
5.25%
9.95%12/13/201712/13/20243,000 2,977 2,963 0.32 
Heartland Home Services, Inc.^*(2)(3)(14)Consumer ServicesLIBOR
5.75%
10.10%2/10/202212/15/20269,538 9,414 9,275 1.01 
Heartland Home Services, Inc.^*(2)(3)(14)Consumer ServicesLIBOR
6.00%
10.38%12/15/202012/15/20267,189 7,125 7,114 0.78 
Hercules Borrower LLC^*(2)(3)(14)Environmental IndustriesLIBOR
6.50%
10.67%12/14/202012/14/202618,497 18,097 17,818 1.94 
Higginbotham Insurance Agency, Inc.^(2)(3)Diversified Financial ServicesLIBOR
5.25%
9.63%11/25/202011/25/2026451 446 441 0.05 
Hoosier Intermediate, LLC^*(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
5.50%
10.11%11/15/202111/15/202810,709 10,497 10,037 1.09 
HS Spa Holdings Inc.^(2)(3)(14)Consumer ServicesSOFR
5.75%
10.45%6/2/20226/2/20298,605 8,422 8,336 0.91 
iCIMS, Inc.^(2)(3)(14)SoftwareSOFR
7.25%
11.52%8/18/20228/18/202825,540 25,075 24,272 2.65 
Infront Luxembourg Finance S.À R.L. (Luxembourg)^(2)(7)Leisure Products & ServicesLIBOR
9.00%
10.95%5/28/20215/28/2027€8,250 9,804 8,677 0.95 
Integrity Marketing Acquisition, LLC^(2)(3)Diversified Financial ServicesLIBOR
6.02%
10.57%12/3/20218/27/2025429 425 414 0.05 
IQN Holding Corp.^(2)(3)(14)Business ServicesSOFR
5.25%
9.64%5/2/20225/2/20296,823 6,749 6,699 0.73 
Jeg's Automotive, LLC^*(2)(3)(14)AutomotiveLIBOR
6.00%
10.75%12/22/202112/22/202720,624 20,200 19,131 2.09 
K2 Insurance Services, LLC^*(2)(3)(14)Diversified Financial ServicesLIBOR
5.00%
9.73%7/3/20197/1/20263,330 3,283 3,288 0.36 
Kaseya, Inc.^(2)(3)(14)High Tech IndustriesSOFR
5.75%
10.33%6/23/20226/23/202935,453 34,726 34,323 3.74 
Lifelong Learner Holdings, LLC^*(2)(3)(14)Business ServicesLIBOR
5.75%
10.16%10/18/201910/18/202625,965 25,657 24,347 2.65 
LinQuest Corporation*(2)(3)Aerospace & DefenseLIBOR
5.75%
9.10%7/28/20217/28/20289,875 9,710 8,927 0.97 
Liqui-Box Holdings, Inc.^(2)(3)(14)Containers, Packaging & GlassLIBOR
4.50%
8.35%6/3/20196/3/20242,034 2,025 2,034 0.22 
LVF Holdings, Inc.^*(2)(3)(14)Beverage & FoodLIBOR
6.25%
10.98%6/10/20216/10/202741,295 40,564 38,735 4.22 
Material Holdings, LLC^*(2)(3)(14)Business ServicesSOFR
6.00%
10.67%8/19/20218/19/20278,082 7,944 7,655 0.83 
Maverick Acquisition, Inc.^*(2)(3)Aerospace & DefenseLIBOR
6.25%
10.98%6/1/20216/1/202735,622 35,069 29,595 3.24 
Medical Manufacturing Technologies, LLC^*(2)(3)(14)(15)Healthcare & PharmaceuticalsSOFR
5.50%
10.18%12/23/202112/23/202728,900 28,368 28,308 3.09 
NEFCO Holding Company LLC^*(2)(3)(14)(15)Construction & BuildingSOFR
6.50%
10.95%8/5/20228/5/20285,525 5,389 5,385 0.59 
87
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
NMI AcquisitionCo, Inc.^*(2)(3)(14)High Tech IndustriesLIBOR
5.75%
10.13%9/6/20179/6/2025$39,913 $39,860 $38,845 4.23 %
North Haven Fairway Buyer, LLC^*(2)(3)(14)Consumer ServicesSOFR
6.50%
11.08%5/17/20225/17/202822,970 22,530 22,535 2.46 
North Haven Stallone Buyer, LLC^(2)(3)(14)Consumer ServicesSOFR
5.75%
10.34%10/11/20225/24/2027— (4)(4)— 
Oak Purchaser, Inc.^(2)(3)(14)Business ServicesSOFR
5.50%
9.48%4/28/20224/28/20285,851 5,779 5,663 0.62 
Performance Health Holdings, Inc.*(2)(3)Healthcare & PharmaceuticalsLIBOR
6.00%
10.73%7/12/20217/12/20276,444 6,342 6,276 0.68 
PF Atlantic Holdco 2, LLC^(2)(3)(14)Leisure Products & ServicesLIBOR
5.50%
10.25%11/12/202111/12/20274,170 3,932 3,918 0.43 
PF Growth Partners, LLC*(2)(3)Leisure Products & ServicesLIBOR
5.00%
9.48%7/1/20197/11/20257,957 7,901 7,902 0.86 
PPT Management Holdings, LLC^(2)(3)(8)(14)Healthcare & PharmaceuticalsLIBOR
8.50% (100% PIK)
9.50%12/15/20161/31/202329,446 29,437 21,145 2.30 
Project Castle, Inc.*(2)(3)Capital EquipmentSOFR
5.50%
10.08%6/24/20226/1/20297,481 6,742 6,013 0.67 
Prophix Software Inc. (Canada)^(2)(3)(7)(14)SoftwareLIBOR
6.50%
10.67%2/1/20212/1/202610,963 10,771 10,963 1.19 
PXO Holdings I Corp.^*(2)(3)(14)(15)Chemicals, Plastics & RubberSOFR
5.50%
9.05%3/8/20223/8/202817,068 16,728 16,715 1.82 
QNNECT, LLC^*(2)(3)(14)Aerospace & DefenseSOFR
7.00%
11.11%11/2/202211/2/20295,281 5,085 5,081 0.55 
Quantic Electronics, LLC^*(2)(3)(14)Aerospace & DefenseLIBOR
6.25%
10.97%11/19/202011/19/202615,582 15,344 14,768 1.61 
Quantic Electronics, LLC^*(2)(3)(14)Aerospace & DefenseLIBOR
6.25%
10.95%3/1/20213/1/20279,832 9,652 9,218 1.00 
QW Holding Corporation^*(2)(3)Environmental IndustriesLIBOR
5.50%
9.64%8/31/20168/31/202632,276 32,232 31,718 3.46 
Radwell Parent, LLC^(2)(3)(14)(15)WholesaleSOFR
6.75%
11.33%12/1/20224/1/202918,605 18,011 18,005 1.96 
Regency Entertainment, Inc.^(2)(3)Media: Diversified & ProductionLIBOR
6.75%
11.13%5/22/202010/22/202520,000 19,765 19,760 2.15 
Riveron Acquisition Holdings, Inc.*(2)(3)Diversified Financial ServicesLIBOR
5.75%
10.48%5/22/20195/22/20251,676 1,648 1,676 0.18 
RSC Acquisition, Inc.^(2)(3)(14)(15)Diversified Financial ServicesSOFR
5.50%
9.83%11/1/201911/1/202611,010 10,886 10,447 1.14 
Sapphire Convention, Inc.^(2)(3)(14)TelecommunicationsLIBOR
5.25%
9.80%11/20/201811/20/202528,051 27,773 27,341 2.98 
SCP Eye Care HoldCo, LLC^(2)(3)(14)(15)Healthcare & PharmaceuticalsSOFR
5.75%
9.47%10/7/202210/7/2029122 117 118 0.01 
Smarsh Inc.^(2)(3)(14)SoftwareSOFR
6.50%
11.29%2/18/20222/18/20297,347 7,192 6,987 0.76 
SPay, Inc.^*(2)(3)Leisure Products & ServicesLIBOR
5.75%, 3.50% PIK
13.73%6/15/20186/17/202424,292 24,176 21,332 2.33 
Speedstar Holding, LLC^*(2)(3)AutomotiveLIBOR
7.00%
11.73%1/22/20211/22/202726,694 26,305 26,510 2.89 
Spotless Brands, LLC^*(2)(3)(14)(15)Consumer ServicesSOFR
6.50%
10.80%6/21/20227/25/202833,832 33,179 32,779 3.57 
Tank Holding Corp.^*(2)(3)(14)(15)Capital EquipmentSOFR
5.75%
10.16%3/31/20223/31/202818,067 17,718 17,552 1.91 
88
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
TCFI Aevex LLC^*(2)(3)Aerospace & DefenseLIBOR
6.00%
10.38%3/18/20203/18/2026$11,047 $10,927 $10,096 1.10 %
The Carlstar Group LLC^*(2)(3)(14)(15)AutomotiveSOFR
6.50%
10.92%7/8/20227/8/202714,446 14,087 14,210 1.55 
TIBCO Software Inc.*(2)(3)High Tech IndustriesSOFR
4.50%
9.18%9/30/20223/31/202915,000 13,681 13,369 1.46 
Trader Corporation (Canada)^(2)(3)(7)(14)AutomotiveCDOR
6.75%
11.61%12/22/202212/22/2029C$12,081 8,643 8,686 0.95 
Trafigura Trading LLC^(2)(3)(13)(14)(15)Metals & MiningSOFR
8.35%
12.89%7/26/20211/13/20238,250 8,076 8,185 0.89 
Tufin Software North America, Inc.^(2)(3)(14)(15)SoftwareSOFR
7.69%
12.01%8/17/20228/17/202827,040 26,502 26,162 2.85 
Turbo Buyer, Inc.^(2)(3)(14)AutomotiveLIBOR
6.00%
11.15%12/2/201912/2/20251,714 1,628 1,609 0.18 
U.S. Legal Support, Inc.^*(2)(3)(14)(15)Business ServicesSOFR
5.75%
10.33%11/30/201811/30/202415,844 15,692 15,504 1.69 
Unifrutti Financing PLC (Cyprus)^(7)Beverage & FoodFIXED
7.50%, 1.00% PIK
8.50%9/15/20199/15/2026€4,611 4,935 4,998 0.55 
Unifrutti Financing PLC (Cyprus)^(7)Beverage & FoodFIXED
11.00% (100% PIK)
11.00%10/22/20209/15/2026€843 953 961 0.10 
US INFRA SVCS Buyer, LLC^(2)(3)Environmental IndustriesLIBOR
6.50%, 0.25% PIK
11.47%4/13/20204/13/20269,083 8,977 8,619 0.94 
USALCO, LLC*(2)(3)Chemicals, Plastics & RubberLIBOR
6.00%
10.73%10/19/202110/19/2027990 973 941 0.10 
USR Parent Inc.^(2)(3)RetailSOFR
7.60%
11.72%4/22/20224/25/20274,222 4,185 4,025 0.44 
Westfall Technik, Inc.^*(2)(3)Chemicals, Plastics & RubberSOFR
6.25%
10.83%9/13/20189/13/202421,502 21,396 21,046 2.29 
Westfall Technik, Inc.^(2)(3)Chemicals, Plastics & RubberSOFR
6.25%
10.79%7/1/20219/13/20244,957 4,881 4,852 0.53 
Wineshipping.com LLC^*(2)(3)(14)Beverage & FoodLIBOR
5.75%
10.15%10/29/202110/29/20274,668 4,539 4,051 0.44 
Yellowstone Buyer Acquisition, LLC^(2)(3)Consumer Goods: DurableLIBOR
5.75%
10.07%9/13/20219/13/2027444 437 427 0.05 
YLG Holdings, Inc.^(2)(3)Consumer ServicesLIBOR
5.00%
9.53%9/30/202011/1/20251,960 1,918 1,957 0.21 
First Lien Debt Total$1,371,717 $1,314,595 143.29 %
Second Lien Debt (13.3% of fair value)
11852604 Canada Inc. (Canada)^(2)(3)(7)Healthcare & PharmaceuticalsLIBOR
9.50% (100% PIK)
13.70%9/30/20219/30/2028$7,587 $7,452 $7,398 0.81 %
AI Convoy S.A.R.L (United Kingdom)^(2)(3)(7)Aerospace & DefenseLIBOR
8.25%
12.92%1/17/20201/17/202824,814 24,416 25,558 2.80 
Aimbridge Acquisition Co., Inc.^(2)Leisure Products & ServicesLIBOR
7.50%
11.62%2/1/20192/1/20279,241 9,142 8,353 0.91 
89
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
AP Plastics Acquisition Holdings, LLC^(2)(3)Chemicals, Plastics & RubberLIBOR
7.50%
11.85%8/10/20218/10/2029$33,680 $32,871 $32,320 3.52 %
AQA Acquisition Holdings, Inc.^*(2)(3)High Tech IndustriesLIBOR
7.50%
12.23%3/3/20213/3/202935,000 34,275 33,312 3.63 
Blackbird Purchaser, Inc.^(2)(3)(14)Capital EquipmentLIBOR
7.50%
11.88%12/14/20214/8/202713,791 13,486 12,736 1.39 
Brave Parent Holdings, Inc.^*(2)SoftwareLIBOR
7.50%
11.88%10/3/20184/19/202618,197 17,973 17,504 1.91 
Drilling Info Holdings, Inc.^(2)Energy: Oil & GasLIBOR
8.25%
12.64%2/11/20207/30/202618,600 18,283 18,740 2.04 
Jazz Acquisition, Inc.^(2)Aerospace & DefenseLIBOR
8.00%
12.38%6/13/20196/18/202723,450 23,227 21,875 2.38 
Outcomes Group Holdings, Inc.^*(2)Business ServicesLIBOR
7.50%
12.23%10/23/201810/26/20261,731 1,728 1,690 0.18 
PAI Holdco, Inc.^(2)(3)AutomotiveLIBOR
5.50%, 2.00% PIK
11.91%10/28/202010/28/202814,089 13,771 13,874 1.51 
Peraton Corp.^*(2)(3)Aerospace & DefenseLIBOR
7.75%
12.09%2/24/20212/1/202911,941 11,790 11,550 1.26 
Quartz Holding Company^*(2)SoftwareLIBOR
8.00%
12.38%4/2/20194/2/20277,048 6,963 6,764 0.74 
Stonegate Pub Company Bidco Limited (United Kingdom)^(2)(7)Beverage & FoodSONIA
8.50%
11.74%3/12/20203/12/2028£20,000 24,831 22,281 2.43 
TruGreen Limited Partnership^(2)(3)Consumer ServicesLIBOR
8.50%
13.43%11/16/202011/2/202813,000 12,791 11,120 1.21 
World 50, Inc.^(9)Business ServicesFIXED
11.50%
11.50%1/10/20201/9/202718,552 18,267 17,628 1.92 
Second Lien Debt Total$271,266 $262,703 28.63 %
Investments—non-controlled/non-affiliated (1)
FootnotesIndustryAcquisition DateShares/ UnitsCost
Fair
Value (5)
% 
of Net Assets
Equity Investments (4.8% of fair value)
ANLG Holdings, LLC^(6)Capital Equipment6/22/2018592 $592 $675 0.07 %
Appriss Health, LLC^(6)Healthcare & Pharmaceuticals5/6/20215 5,002 4,821 0.53 
Atlas Ontario LP (Canada)^(6)(7)Business Services4/7/20215,114 5,114 5,114 0.56 
Avenu Holdings, LLC^(6)Sovereign & Public Finance9/28/2018172 104 545 0.06 
Blackbird Holdco, Inc.^(6)Capital Equipment12/14/202111 10,809 10,210 1.11 
Buckeye Parent, LLC^(6)Automotive12/22/2021885 885 576 0.06 
Chartis Holding, LLC^(6)Business Services5/1/2019433 428 595 0.07 
CIP Revolution Holdings, LLC^(6)Media: Advertising, Printing & Publishing8/19/2016318 318 257 0.03 
Cority Software Inc. (Canada)^(6)(7)Software7/2/2019250 250 641 0.07 
Derm Growth Partners III, LLC^(6)Healthcare & Pharmaceuticals5/31/20161,000 1,000 — — 
Diligent Corporation^(6)Telecommunications4/5/202112 11,509 10,960 1.19 
ECP Parent, LLC^(6)Healthcare & Pharmaceuticals3/29/2018268 — 290 0.03 
GB Vino Parent, L.P.^(6)Beverage & Food10/29/20214 351 249 0.03 
Integrity Marketing Group, LLC^(6)Diversified Financial Services12/21/202116,705 16,472 16,597 1.81 
K2 Insurance Services, LLC^(6)Diversified Financial Services7/3/2019433 306 867 0.09 
90
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustryAcquisition DateShares/ UnitsCost
Fair
Value (5)
% 
of Net Assets
Legacy.com, Inc.^(6)High Tech Industries3/20/20171,500 $1,500 $1,079 0.12 %
NearU Holdings LLC^(6)Consumer Services8/16/202225 2,470 2,470 0.27 
NEFCO Holding Company LLC^(6)Construction & Building8/5/20221 628 628 0.07 
North Haven Goldfinch Topco, LLC^(6)Containers, Packaging & Glass6/18/20182,315 2,315 1,300 0.14 
Pascal Ultimate Holdings, L.P^(6)Capital Equipment7/21/202136 364 850 0.09 
Picard Parent, Inc.^(6)High Tech Industries9/30/20229 8,520 8,520 0.93 
Profile Holdings I, LP^(6)Chemicals, Plastics & Rubber3/8/20225 523 673 0.07 
Sinch AB (Sweden)^(6)(7)High Tech Industries3/26/2019104 kr1,168 382 0.04 
Tailwind HMT Holdings Corp.^(6)Energy: Oil & Gas11/17/201722 1,558 1,454 0.16 
Talon MidCo 1 Limited^(6)Software8/17/2022145,631 1,456 1,611 0.18 
Tank Holding Corp.^(6)Capital Equipment3/26/2019850 — 2,687 0.29 
Titan DI Preferred Holdings, Inc.^(6)Energy: Oil & Gas2/11/202014,666 14,439 14,263 1.55 
Turbo Buyer, Inc.^(6)Automotive12/2/20191,925 933 2,307 0.25 
U.S. Legal Support Investment Holdings, LLC^(6)Business Services11/30/2018641 641 551 0.06 
Unifrutti Financing PLC (Cyprus)^(6)(7)Beverage & Food10/22/20201 €531 702 0.08 
Unifrutti Financing PLC (Cyprus)^(6)(7)Beverage & Food10/22/2020— €133 306 0.03 
W50 Parent LLC^(6)Business Services1/10/2020500 190 698 0.08 
Zenith American Holding, Inc.^(6)Business Services12/13/20171,565 760 1,312 0.14 
Equity Investments Total$91,269 $94,190 10.27 %
Total investments—non-controlled/non-affiliated$1,734,252 $1,671,488 182.19 %
Investments—non-controlled/affiliatedFootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair
Value (5)
% of Net 
Assets
First Lien Debt (2.3% of fair value)
Direct Travel, Inc.^*(2)(3)(12)(15)Leisure Products & ServicesSOFR
8.50%
13.23%10/14/201610/1/2025$43,520 $42,012 $42,636 4.65 %
Direct Travel, Inc.^(2)(3)(12)(14)(15)Leisure Products & ServicesSOFR
6.00%
9.79%10/1/202010/1/20252,731 2,614 2,731 0.30 
First Lien Debt Total$44,626 $45,367 4.95 %
91
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/affiliatedFootnotesIndustryAcquisition DateShares/ UnitsCost
Fair
Value (5)
% of Net 
Assets
Equity Investments (0.0% of fair value)
Direct Travel, Inc.^(6)(12)Leisure Products & Services10/1/202043 $— $— — %
Equity Investments Total43$— $— — %
Total investments—non-controlled/affiliated$44,626 $45,367 4.95 %
First Lien Debt Total000#DIV/0!
Investments—controlled/affiliated
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par Amount/ LLC Interest
Cost
Fair Value (5)
% of Net 
Assets
Investment Funds (13.3% of fair value)
Middle Market Credit Fund II, LLC, Member's Interest^(7)(10)Investment Funds
    
13.00%11/3/202012/31/2030$78,122 $78,096 $72,957 7.96 %
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest^(7)(10)Investment Funds
    
10.40%2/29/201612/31/2024193,000 193,001 190,065 20.72 
Middle Market Credit Fund, Mezzanine Loan(2)(7)(9)(10)Investment FundsLIBOR
9.00%
13.77%6/30/20165/21/2023— — — — 
Investment Funds Total$271,097 $263,022 28.67 %
Total investments—controlled/affiliated$271,097 $263,022 28.67 %
Total investments$2,049,975 $1,979,877 215.81 %
^ Denotes that all or a portion of the assets are owned by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 7, Borrowings). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”).
* Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 8, Notes Payable). Accordingly, such assets are not available to the creditors of the Company.
** Par amount is denominated in USD ("$") unless otherwise noted, as denominated in Euro (“€”) or British Pound (“£”)
(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2022, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2022, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”), the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2022. As of December 31, 2022, the reference rates for variable rate loans were the 30-day LIBOR at 4.39%, the 90-day LIBOR at 4.77%, the 180-day LIBOR at 5.14%, the 30-day SOFR at 4.36%, and the 90-day SOFR at 4.59%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
92
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
(5)Fair value is determined in good faith by or under the direction of the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs.
(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of December 31, 2022, the aggregate fair value of these securities is $94,190, or 10.27% of the Company’s net assets.
(7)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
(8)Loan was on non-accrual status as of December 31, 2022.
(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.
(10)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Notes 5, Middle Market Credit Fund, LLC and 6. Middle Market Credit Fund II, LLC, for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2022, were as follows:
Investments—controlled/affiliatedFair Value as of December 31, 2021Additions/PurchasesReductions/Sales/ PaydownsNet Realized Gain (Loss)Net Change in Unrealized Appreciation (Depreciation)Fair Value as of December 31, 2022Dividend and Interest Income
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest
$184,141 $— $— $— $5,924 $190,065 $20,500 
Middle Market Credit Fund, LLC, Mezzanine Loan— — — — — — — 
Middle Market Credit Fund II, LLC, Member’s Interest77,958 — — — (5,001)72,957 10,348 
Total investments—controlled/affiliated$262,099 $— $— $— $923 $263,022 $30,848 
Investments—controlled/affiliatedFair Value as of December 31, 2021Additions/PurchasesReductions/Sales/ PaydownsNet Realized Gain (Loss)Net Change in Unrealized Appreciation (Depreciation)Fair Value as of December 31, 2022Dividend and Interest Income
SolAero Technologies Corp. (Priority Term Loan)$2,251 $— $(2,240)$— $(11)$— $8 
SolAero Technologies Corp. (A1 Term Loan)2,850 — (3,166)— 316 — 1,031 
SolAero Technologies Corp. (A2 Term Loan)7,835 — (8,707)— 872 — 2,834 
Solaero Technology Corp. (Equity)
— — (4,830)2,015 2,815 — — 
Total investments—controlled/affiliated$12,936 $— $(18,943)$2,015 $3,992 $— $3,873 
(11)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.
(12)Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related the portfolio company during the year ended December 31, 2022 were as follows:
93
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/affiliatedFair Value as of December 31, 2021Additions/PurchasesReductions/Sales/ PaydownsNet Realized Gain (Loss)Net Change in Unrealized Appreciation (Depreciation)Fair Value as of December 31, 2022Dividend and Interest Income
Direct Travel, Inc.$27,555 $7,330 $(1,177)$— $8,928 $42,636 $9,864 
Direct Travel, Inc.2,731 11 — — (11)2,731 232 
Direct Travel, Inc. (Equity)— — — — — — — 
Total investments—non-controlled/affiliated$30,286 $7,341 $(1,177)$— $8,917 $45,367 $10,096 
(13)The investment is secured by receivables purchased from the portfolio company, with an implied discount of 12.10%. The investment was made via a tranched participation arrangement between the purchaser of such receivables and the Company. The investment has a secondary priority behind the rights of such purchaser.
(14)As of December 31, 2022, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
Investments—non-controlled/non-affiliatedTypeUnused FeePar/ Principal AmountFair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
ADPD Holdings, LLCDelayed Draw0.50%$1,083 $(27)
ADPD Holdings, LLCRevolver0.50621 (15)
ADPD Holdings, LLCDelayed Draw0.50299 (7)
ADPD Holdings, LLCDelayed Draw0.501,951 (48)
Advanced Web Technologies Holding CompanyRevolver0.50854 (9)
Advanced Web Technologies Holding CompanyDelayed Draw1.001,602 (16)
Airnov, Inc.Revolver0.50688 (4)
Alpine Acquisition Corp IIRevolver0.503,447 (128)
American Physician Partners, LLCDelayed Draw1.001,596 (32)
Analogic CorporationRevolver0.5019 — 
Applied Technical Services, LLCRevolver0.5037 — 
Appriss Health, LLCRevolver0.502,963 (114)
Apptio, Inc.Revolver0.50947 — 
Ascend Buyer, LLCRevolver0.501,284 (23)
Associations, Inc.Revolver0.50723 (21)
Atlas AU Bidco Pty Ltd (Australia)Revolver0.50268 (8)
Avalara, Inc.Revolver0.502,250 (68)
Blackbird Purchaser, Inc.Delayed Draw1.004,597 (264)
BlueCat Networks, Inc. (Canada)Delayed Draw0.50240 (7)
BlueCat Networks, Inc. (Canada)Delayed Draw0.50405 (11)
BMS Holdings III Corp.Delayed Draw2.654,844 (87)
Bradyifs Holdings, LLCRevolver0.50739 (7)
Bradyifs Holdings, LLCDelayed Draw1.002,634 (27)
Bubbles Bidco S.P.A. (Italy)Delayed Draw2.80€873 — 
Bubbles Bidco S.P.A. (Italy)Revolver—€537 — 
94
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliatedTypeUnused FeePar/ Principal AmountFair Value
Celerion Buyer, Inc.Revolver0.50%$249 $(6)
Celerion Buyer, Inc.Delayed Draw1.00499 (12)
Chartis Holding, LLCRevolver0.50217 (1)
Chemical Computing Group ULC (Canada)Revolver0.5029 — 
Comar Holding Company, LLCRevolver0.501,467 (49)
Cority Software Inc. (Canada)Revolver0.503,000 (29)
CPI Intermediate Holdings, Inc.Delayed Draw—927 (19)
CST Holding CompanyRevolver0.50423 (13)
DCA Investment Holding LLCDelayed Draw1.00169 (9)
Denali Midco 2, LLCDelayed Draw1.002,286 (87)
Diligent CorporationRevolver0.5033 (1)
Direct Travel, Inc.Delayed Draw0.501,657 — 
Dwyer Instruments, Inc.Revolver0.50994 (15)
Dwyer Instruments, Inc.Delayed Draw1.00161 (2)
Eliassen Group, LLCDelayed Draw1.003,310 (38)
Ellkay, LLCRevolver0.501,786 (64)
EPS Nass Parent, Inc.Revolver0.5030 (1)
EPS Nass Parent, Inc.Delayed Draw1.0037 (2)
EvolveIP, LLCRevolver0.50655 (12)
Excel Fitness Holdings, Inc.Revolver0.50438 (20)
Excelitas Technologies Corp.Revolver0.50160 (6)
Excelitas Technologies Corp.Delayed Draw0.50152 (6)
FPG Intermediate Holdco, LLCDelayed Draw1.003,973 (174)
Greenhouse Software, Inc.Revolver0.501,471 (54)
Greenhouse Software, Inc.Revolver0.50733 (27)
Hadrian Acquisition Limited (United Kingdom)Delayed Draw2.33£2,086 (39)
Harbour Benefit Holdings, Inc.Revolver0.503,180 (19)
Heartland Home Services, Inc.Delayed Draw0.755,469 (96)
Heartland Home Services, Inc.Revolver0.50619 (6)
Hercules Borrower LLCRevolver0.501,929 (64)
Hoosier Intermediate, LLCRevolver0.501,600 (87)
HS Spa Holdings Inc.Revolver0.501,235 (34)
iCIMS, Inc.Revolver0.502,432 (89)
iCIMS, Inc.Delayed Draw—6,784 (247)
IQN Holding Corp.Delayed Draw1.00696 (11)
IQN Holding Corp.Revolver0.50489 (8)
95
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliatedTypeUnused FeePar/ Principal AmountFair Value
Jeg's Automotive, LLCDelayed Draw1.00%$4,167 $(251)
K2 Insurance Services, LLCRevolver0.501,120 (11)
Kaseya, Inc.Revolver0.502,054 (60)
Kaseya, Inc.Delayed Draw0.501,146 (33)
Lifelong Learner Holdings, LLCRevolver0.502 — 
Liqui-Box Holdings, Inc.Revolver0.50596 — 
LVF Holdings, Inc.Revolver0.50992 (54)
LVF Holdings, Inc.Delayed Draw1.004,670 (254)
Material Holdings, LLCDelayed Draw—977 (44)
Material Holdings, LLCRevolver1.00499 (22)
Medical Manufacturing Technologies, LLCRevolver0.501,446 (27)
Medical Manufacturing Technologies, LLCDelayed Draw1.00826 (16)
NEFCO Holding Company LLCDelayed Draw1.00380 (7)
NEFCO Holding Company LLCDelayed Draw1.00553 (11)
NEFCO Holding Company LLCRevolver0.50763 (15)
NMI AcquisitionCo, Inc.Revolver0.501,280 (33)
North Haven Fairway Buyer, LLCRevolver0.501,154 (21)
North Haven Stallone Buyer, LLCDelayed Draw1.00200 (4)
Oak Purchaser, Inc.Delayed Draw0.501,623 (38)
Oak Purchaser, Inc.Revolver0.50584 (14)
PF Atlantic Holdco 2, LLCDelayed Draw1.007,448 (130)
PF Atlantic Holdco 2, LLCRevolver0.502,759 (48)
PPT Management Holdings, LLCRevolver0.50587 (162)
Prophix Software Inc. (Canada)Revolver0.501,993 — 
PXO Holdings I Corp.Delayed Draw1.00885 (16)
PXO Holdings I Corp.Revolver0.501,315 (24)
QNNECT, LLCDelayed Draw1.001,386 (42)
Quantic Electronics, LLCRevolver0.50276 (14)
Quantic Electronics, LLCDelayed Draw1.002,126 (109)
Radwell Parent, LLCRevolver0.381,395 (42)
RSC Acquisition, Inc.Revolver0.50462 (21)
RSC Acquisition, Inc.Delayed Draw1.00950 (43)
Sapphire Convention, Inc.Revolver0.504,188 (92)
SCP Eye Care HoldCo, LLCRevolver0.5017 — 
SCP Eye Care HoldCo, LLCDelayed Draw1.0039 (1)
Smarsh Inc.Revolver0.50408 (17)
96
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
Investments—non-controlled/non-affiliatedTypeUnused FeePar/ Principal AmountFair Value
Smarsh Inc.Delayed Draw1.00%$816 $(34)
Spotless Brands, LLCRevolver0.501,096 (33)
Tank Holding Corp.Revolver0.381,379 (37)
The Carlstar Group LLCRevolver0.503,657 (48)
Trader Corporation (Canada)Revolver0.50C$906 (31)
Trafigura Trading LLCRevolver0.50388 (3)
Tufin Software North America, Inc.Revolver0.501,339 (41)
Tufin Software North America, Inc.Delayed Draw—115 (4)
Turbo Buyer, Inc.Delayed Draw1.002,967 (53)
Turbo Buyer, Inc.Revolver0.501,217 (22)
U.S. Legal Support, Inc.Delayed Draw0.502,032 (37)
U.S. Legal Support, Inc.Revolver0.50735 (13)
Wineshipping.com LLCDelayed Draw1.001,609 (127)
Wineshipping.com LLCRevolver0.501,509 (120)
Total unfunded commitments$158,206 $(4,549)
(15) Loans include a credit spread adjustment that ranges from 0.10% to 0.26%.
97
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
As of December 31, 2022, investments at fair value consisted of the following:
TypeAmortized CostFair Value% of Fair Value
First Lien Debt$1,416,343 $1,359,962 68.6 %
Second Lien Debt271,266 262,703 13.3 
Equity Investments91,269 94,190 4.8 
Investment Funds271,097 263,022 13.3 
Total$2,049,975 $1,979,877 100.0 %
The rate type of debt investments at fair value as of December 31, 2022 was as follows:
Rate TypeAmortized CostFair Value% of Fair Value of First and Second Lien Debt
Floating Rate$1,663,454 $1,599,078 98.5 %
Fixed Rate24,155 23,587 1.5 
Total$1,687,609 $1,622,665 100.0 %

98
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
The industry composition of investments at fair value as of December 31, 2022 was as follows:
IndustryAmortized CostFair Value% of Fair Value
Aerospace & Defense$145,220 $136,668 6.9 %
Automotive86,452 86,903 4.4 
Beverage & Food76,837 72,283 3.6 
Business Services95,138 93,620 4.7 
Capital Equipment60,328 61,262 3.1 
Chemicals, Plastics & Rubber77,372 76,547 3.9 
Construction & Building23,459 23,122 1.2 
Consumer Goods: Durable437 427 — 
Consumer Goods: Non-Durable10,686 10,333 0.5 
Consumer Services115,254 112,705 5.7 
Containers, Packaging & Glass46,300 44,558 2.2 
Diversified Financial Services78,558 76,996 3.9 
Energy: Oil & Gas34,280 34,457 1.7 
Environmental Industries59,306 58,155 2.9 
Healthcare & Pharmaceuticals259,077 234,876 11.9 
High Tech Industries139,652 135,718 6.9 
Investment Funds271,097 263,022 13.3 
Leisure Products & Services117,164 112,926 5.7 
Media: Advertising, Printing & Publishing318 257 — 
Media: Diversified & Production19,765 19,760 1.0 
Metals & Mining8,076 8,185 0.4 
Retail31,258 30,796 1.6 
Software178,991 175,981 8.9 
Sovereign & Public Finance182 623 — 
Telecommunications75,795 70,907 3.6 
Transportation: Cargo7,406 7,188 0.4 
Utilities: Electric906 877 — 
Wholesale30,661 30,725 1.6 
Total$2,049,975 $1,979,877 100.0 %
99
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2022
(dollar amounts in thousands)
The geographical composition of investments at fair value as of December 31, 2022 was as follows:
GeographyAmortized CostFair Value% of Fair Value
Australia$2,796 $2,796 0.1 %
Canada47,906 48,474 2.4 
Cyprus6,552 6,967 0.4 
Italy5,815 5,465 0.3 
Luxembourg41,453 39,066 2.0 
Sweden1,168 382 — 
United Kingdom72,441 69,353 3.5 
United States1,871,844 1,807,374 91.3 
Total$2,049,975 $1,979,877 100.0 %

The accompanying notes are an integral part of these consolidated financial statements.

100
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
First Lien Debt (62.1% of fair value)
Advanced Web Technologies Holding Company^*(2)(3)(14)Containers, Packaging & GlassLIBOR
5.75%
6.75%12/17/202012/17/2026$7,177 $6,970 $7,297 0.77 %
Airnov, Inc.^*(2)(3)(14)Containers, Packaging & GlassLIBOR
5.00%
6.00%12/20/201912/19/20251,862 1,833 1,862 0.20 
Allied Universal Holdco LLC^(2)(3)Business ServicesLIBOR
4.25%
4.46%2/17/20217/10/2026497 500 498 0.04 
American Physician Partners, LLC^*(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
6.75%, 1.50% PIK
9.25%1/7/20192/21/202227,908 27,886 27,908 2.94 
Analogic Corporation^*(2)(3)(14)Capital EquipmentLIBOR
5.25%
6.25%6/22/20186/22/20242,434 2,412 2,408 0.25 
Applied Technical Services, LLC^(2)(3)(14)Business ServicesLIBOR
5.75%
6.75%12/29/202012/29/2026536 525 536 0.06 
Appriss Health, LLC^(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
7.25%
8.25%5/6/20215/6/202743,247 42,406 43,295 4.56 
Apptio, Inc.^(2)(3)(14)SoftwareLIBOR
7.25%
8.25%1/10/20191/10/20256,131 6,044 6,130 0.65 
Ascend Buyer, LLC^(2)(3)(14)Containers, Packaging & GlassLIBOR
5.75%
6.50%9/30/20219/30/202812,838 12,569 12,618 1.33 
Associations, Inc.^(2)(3)(14)Construction & BuildingLIBOR
4.00%, 2.50% PIK
7.50%7/2/20217/2/202711,570 11,457 11,599 1.22 
Aurora Lux FinCo S.Á.R.L. (Luxembourg)^*(2)(3)(7)SoftwareLIBOR
6.00%
7.00%12/24/201912/24/202632,488 31,870 29,269 3.08 
Avenu Holdings, LLC*(2)(3)Sovereign & Public FinanceLIBOR
5.25%
6.25%9/28/20189/28/202413,545 13,451 13,545 1.43 
Barnes & Noble, Inc.^(2)(3)(11)RetailLIBOR
6.50%
7.50%8/7/201912/20/202628,932 27,926 28,146 2.97 
BlueCat Networks, Inc. (Canada)*(2)(3)(7)High Tech IndustriesLIBOR
6.25%
7.25%10/30/202010/30/202611,468 11,270 11,583 1.22 
BMS Holdings III Corp.^(2)(3)(14)Construction & BuildingLIBOR
5.50%
6.50%9/30/20199/30/2026— (180)(149)(0.02)
Bubbles Bidco S.P.A. (Italy)^(2)(3)(7)(14)Consumer Goods: Non-DurableLIBOR
9.25% (100% PIK)
9.25%10/20/202110/20/2028€4,700 5,312 5,167 0.54 
Bubbles Bidco S.P.A. (Italy)^(2)(3)(7)(14)Consumer Goods: Non-DurableLIBOR
6.25%
6.25%10/20/202110/20/2028€— (9)(9)— 
Captive Resources Midco, LLC^*(2)(3)(14)Banking, Finance, Insurance & Real EstateLIBOR
5.50%
6.25%6/30/20155/31/202710,223 10,104 10,152 1.07 
Chartis Holding, LLC^*(2)(3)(14)Business ServicesLIBOR
5.50%
6.50%5/1/20195/1/2025694 686 694 0.07 
Chemical Computing Group ULC (Canada)^*(2)(3)(7)(14)SoftwareLIBOR
4.50%
5.50%8/30/20188/30/2024466 465 464 0.05 
Chudy Group, LLC^(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
5.75%
6.75%6/30/20216/30/2027826 812 841 0.09 
CircusTrix Holdings, LLC^*(2)(3)Hotel, Gaming & LeisureLIBOR
5.50%, 2.50% PIK
9.00%2/2/20181/16/202410,544 10,523 9,415 0.99 
CircusTrix Holdings, LLC^(2)(3)Hotel, Gaming & LeisureLIBOR
5.50%, 2.50% PIK
9.00%1/8/20217/16/2023697 640 697 0.07 
Cobblestone Intermediate Holdco LLC^(2)(3)Consumer ServicesLIBOR
5.50%
6.25%1/29/20201/29/2026723 718 712 0.08 
101
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
Comar Holding Company, LLC^*(2)(3)(14)Containers, Packaging & GlassLIBOR
5.75%
6.75%6/18/20186/18/2024$26,443 $26,152 $25,855 2.73 %
Cority Software Inc. (Canada)^*(2)(3)(7)(14)SoftwareLIBOR
5.00%
6.00%7/2/20197/2/202610,515 10,334 10,510 1.11 
Cority Software Inc. (Canada)^(2)(3)(7)SoftwareLIBOR
7.00%
8.00%9/3/20207/2/20261,879 1,833 1,900 0.20 
DCA Investment Holding, LLC^*(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
6.25%
7.00%3/11/20213/12/202710,841 10,680 10,777 1.14 
Derm Growth Partners III, LLC^(2)(3)(8)Healthcare & PharmaceuticalsLIBOR
6.25%
7.25%5/31/20165/31/202255,808 50,996 37,471 3.95 
DermaRite Industries, LLC^*(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
7.00%
8.00%3/3/20173/3/202219,558 19,546 15,961 1.68 
Designer Brands Inc.^(2)(3)(7)RetailLIBOR
8.50%
9.75%8/7/20208/7/202517,046 16,718 16,846 1.78 
Diligent Corporation^(2)(3)(14)TelecommunicationsLIBOR
6.25%
7.25%8/4/20208/4/2025603 588 615 0.06 
DTI Holdco, Inc.^(2)(3)High Tech IndustriesLIBOR
4.75%
5.75%12/18/20189/30/20231,934 1,883 1,907 0.20 
Dwyer Instruments, Inc^*(2)(3)(14)Capital EquipmentLIBOR
5.50%
6.25%7/21/20217/21/20272,463 2,383 2,452 0.26 
Ellkay, LLC^(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
5.75%
6.75%9/14/20219/14/202714,249 13,943 13,923 1.47 
Emergency Communications Network, LLC^*(2)(3)TelecommunicationsLIBOR
2.63%, 5.13% PIK
8.75%6/1/20176/1/202325,261 25,201 21,814 2.30 
EPS Nass Parent, Inc.^(2)(3)(14)Utilities: ElectricLIBOR
5.75%
6.75%4/19/20214/19/2028887 869 878 0.09 
Ethos Veterinary Health LLC^(2)(3)Consumer ServicesLIBOR
4.75%
4.85%5/17/20195/15/20262,586 2,569 2,586 0.27 
EvolveIP, LLC^*(2)(3)(14)TelecommunicationsLIBOR
5.50%
6.50%11/26/20196/7/20255,468 5,461 5,436 0.57 
Frontline Technologies Holdings, LLC^*(2)(3)SoftwareLIBOR
5.25%
6.25%9/18/20179/18/20233,068 3,056 3,068 0.32 
Greenhouse Software, Inc.^(2)(3)(14)SoftwareLIBOR
6.50%
7.50%3/1/20213/1/202715,196 14,858 14,870 1.57 
Harbour Benefit Holdings, Inc.^*(2)(3)(14)Business ServicesLIBOR
5.25%
6.25%12/13/201712/13/20249,451 9,377 9,336 0.98 
Heartland Home Services, Inc^*(2)(3)(14)Consumer ServicesLIBOR
6.00%
7.00%12/15/202012/15/20267,314 7,169 7,371 0.78 
Hercules Borrower LLC^*(2)(3)(14)Environmental IndustriesLIBOR
6.50%
7.50%12/14/202012/14/202618,453 17,987 18,865 1.99 
Higginbotham Insurance Agency, Inc.^(2)(3)Banking, Finance, Insurance & Real EstateLIBOR
5.50%
6.25%11/25/202011/25/20264,978 4,916 4,978 0.52 
Hoosier Intermediate, LLC^*(2)(3)(14)Healthcare & PharmaceuticalsLIBOR
5.50%
6.50%11/15/202111/15/202816,479 16,108 16,101 1.70 
iCIMS, Inc.^(2)(3)SoftwareLIBOR
6.50%
7.50%9/12/20189/12/20241,671 1,652 1,670 0.18 
Individual FoodService Holdings, LLC^*(2)(3)(14)WholesaleLIBOR
6.25%
7.25%2/21/202011/22/20258,129 7,958 8,143 0.86 
Infront Luxembourg Finance S.À R.L. (Luxembourg)^(2)(3)(7)Hotel, Gaming & LeisureLIBOR
9.00%
9.00%5/28/20215/28/2027€8,250 9,777 9,134 0.96 
Integrity Marketing Acquisition, LLC*(2)(3)Banking, Finance, Insurance & Real EstateLIBOR
5.75%
6.75%1/15/20208/27/20254,920 4,864 4,896 0.52 
Integrity Marketing Acquisition, LLC^(2)(3)(14)Banking, Finance, Insurance & Real EstateLIBOR
5.50%
6.25%12/3/20218/27/2025— (75)(51)(0.01)
102
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
Jeg's Automotive, LLC^*(2)(3)(14)AutomotiveLIBOR
5.75%
6.75%12/22/202112/22/2027$30,000 $29,203 $29,200 3.08 %
K2 Insurance Services, LLC^*(2)(3)(14)Banking, Finance, Insurance & Real EstateLIBOR
5.00%
6.00%7/3/20197/1/20263,364 3,305 3,357 0.35 
Kaseya, Inc.^(2)(3)(14)High Tech IndustriesLIBOR
5.50%, 1.00% PIK
7.50%5/3/20195/3/202518,972 18,716 18,848 1.99 
Lifelong Learner Holdings, LLC^(2)(3)(14)Business ServicesLIBOR
5.75%
6.75%10/18/201910/18/202626,210 25,830 24,035 2.53 
LinQuest Corporation*(2)(3)Aerospace & DefenseLIBOR
5.75%
6.50%7/28/20217/28/20289,975 9,785 9,816 1.03 
Liqui-Box Holdings, Inc.^(2)(3)(14)Containers, Packaging & GlassLIBOR
4.50%
5.50%6/3/20196/3/20241,490 1,475 1,229 0.13 
LVF Holdings, Inc.^*(2)(3)(14)Beverage, Food & TobaccoLIBOR
6.25%
7.25%6/10/20216/10/202741,227 40,356 40,056 4.22 
Material Holdings, LLC^*(2)(3)(14)Business ServicesLIBOR
5.75%
6.50%8/19/20218/19/20276,906 6,741 6,800 0.72 
Maverick Acquisition, Inc.^*(2)(3)(14)Aerospace & DefenseLIBOR
6.00%
7.00%6/1/20216/1/202735,962 35,192 35,061 3.70 
Medical Manufacturing Technologies, LLC^(2)(3)(14)Healthcare & PharmaceuticalsSOFR
6.00%
7.00%12/23/202112/23/202721,280 20,654 20,652 2.18 
MMIT Holdings, LLC^(2)(3)(14)High Tech IndustriesLIBOR
6.25%
7.25%9/15/20219/15/202711,087 10,858 10,853 1.14 
National Technical Systems, Inc.^(2)(3)(14)Aerospace & DefenseLIBOR
5.50%
6.50%10/28/20206/12/20231,167 1,151 1,167 0.12 
NES Global Talent Finance US, LLC (United Kingdom)^(2)(3)(7)Energy: Oil & GasLIBOR
5.50%
6.50%5/9/20185/11/20239,688 9,634 9,424 0.99 
NMI AcquisitionCo, Inc.^*(2)(3)(14)High Tech IndustriesLIBOR
5.75%
6.50%9/6/20179/6/202540,335 40,206 39,822 4.20 
Performance Health Holdings, Inc.*(2)(3)Healthcare & PharmaceuticalsLIBOR
6.00%
7.00%7/12/20217/12/20277,182 7,048 7,083 0.75 
PF Atlantic Holdco 2, LLC^*(2)(3)(14)Hotel, Gaming & LeisureLIBOR
6.00%
7.00%11/12/202111/12/202727,723 26,941 26,923 2.84 
PF Growth Partners, LLC^*(2)(3)Hotel, Gaming & LeisureLIBOR
5.50%
6.50%7/1/20197/11/20258,039 7,962 7,922 0.83 
PPT Management Holdings, LLC^(2)(3)Healthcare & PharmaceuticalsLIBOR
6.00%, 2.00% PIK
9.00%12/15/201612/16/202228,366 28,326 24,166 2.55 
Product Quest Manufacturing, LLC^(2)(3)(8)Containers, Packaging & GlassLIBOR
6.75%
10.00%9/21/20173/31/2021840 840 840 0.09 
Prophix Software Inc. (Canada)^(2)(3)(7)(14)SoftwareLIBOR
6.50%
7.50%2/1/20212/1/202610,963 10,735 11,093 1.17 
Quantic Electronics, LLC^*(2)(3)(14)Aerospace & DefenseLIBOR
6.25%
7.25%11/19/202011/19/202614,625 14,333 14,418 1.52 
Quantic Electronics, LLC^*(2)(3)(14)Aerospace & DefenseLIBOR
6.25%
7.25%3/1/20213/1/20278,882 8,662 8,727 0.92 
QW Holding Corporation^*(2)(3)Environmental IndustriesLIBOR
6.25%
7.25%8/31/20168/31/202442,671 42,530 41,933 4.42 
Redwood Services Group, LLC^*(2)(3)High Tech IndustriesLIBOR
6.00%
7.00%11/13/20186/6/202430,885 30,562 30,884 3.26 
Regency Entertainment, Inc.^(2)(3)Media: Diversified & ProductionLIBOR
6.75%
7.75%5/22/202010/22/202520,000 19,700 19,666 2.07 
Riveron Acquisition Holdings, Inc.*(2)(3)Banking, Finance, Insurance & Real EstateLIBOR
5.75%
6.75%5/22/20195/22/202511,401 11,262 11,401 1.20 
103
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
RSC Acquisition, Inc.^(2)(3)(14)Banking, Finance, Insurance & Real EstateLIBOR
5.50%
6.25%11/1/201911/1/2026$8,533 $8,395 $8,577 0.90 %
Sapphire Convention, Inc.^*(2)(3)(14)TelecommunicationsLIBOR
6.25%
7.25%11/20/201811/20/202529,906 29,530 25,528 2.69 
SPay, Inc.^*(2)(3)(14)Hotel, Gaming & LeisureLIBOR
2.30%, 6.95% PIK
10.25%6/15/20186/17/202423,005 22,809 20,218 2.13 
Speedstar Holding, LLC^*(2)(3)(14)AutomotiveLIBOR
7.00%
8.00%1/22/20211/22/202727,225 26,686 27,535 2.90 
Superior Health Linens, LLC^*(2)(3)(14)Business ServicesLIBOR
6.50%
7.50%9/30/20163/31/202216,211 16,205 16,211 1.71 
TCFI Aevex LLC^*(2)(3)(14)Aerospace & DefenseLIBOR
6.00%
7.00%3/18/20203/18/202611,168 10,979 9,276 0.98 
The Leaders Romans Bidco Limited (United Kingdom) Term Loan B^(2)(3)(7)Banking, Finance, Insurance & Real EstateSONIA
6.25%, 2.50% PIK
9.50%7/23/20196/30/2024£21,299 26,328 28,830 3.04 
The Leaders Romans Bidco Limited (United Kingdom) Term Loan C^(2)(3)(7)(14)Banking, Finance, Insurance & Real EstateSONIA
6.25%, 2.50% PIK
9.50%7/23/20196/30/2024£6,164 7,855 9,847 1.04 
Trafigura Trading LLC^(2)(3)(13)(14)Metals & MiningLIBOR
8.40%
8.75%7/26/20217/18/20222,236 2,237 2,086 0.22 
Turbo Buyer, Inc.^*(2)(3)(14)AutomotiveLIBOR
6.00%
7.00%12/2/201912/2/202520,377 20,002 19,945 2.10 
Unifrutti Financing PLC (Cyprus)^(7)Beverage, Food & TobaccoFIXED
7.50%, 1.00% PIK
8.50%9/15/20199/15/2026€4,621 4,917 5,353 0.56 
Unifrutti Financing PLC (Cyprus)^(7)Beverage, Food & TobaccoFIXED
11.00% (100% PIK)
11.00%10/22/20209/15/2026€756 858 887 0.09 
US INFRA SVCS Buyer, LLC^*(2)(3)(14)Environmental IndustriesLIBOR
6.50%
7.50%4/13/20204/13/20269,137 8,677 8,387 0.88 
USALCO, LLC*(2)(3)Chemicals, Plastics & RubberLIBOR
6.00%
7.00%10/19/202110/19/20271,000 981 981 0.10 
USLS Acquisition, Inc.^(2)(3)(14)Business ServicesLIBOR
5.50%
6.50%11/30/201811/30/202415,279 15,101 15,098 1.59 
Westfall Technik, Inc.^*(2)(3)Chemicals, Plastics & RubberLIBOR
5.75%
6.75%9/13/20189/13/202421,477 21,313 21,277 2.24 
Westfall Technik, Inc.^(2)(3)Chemicals, Plastics & RubberLIBOR
6.25%
7.25%7/1/20219/13/20244,958 4,865 4,929 0.52 
Wineshipping.com LLC^*(2)(3)(14)Beverage, Food & TobaccoLIBOR
5.75%
6.75%10/29/202110/29/202714,459 14,111 14,111 1.49 
Yellowstone Buyer Acquisition, LLC^(2)(3)Consumer Goods: DurableLIBOR
5.75%
6.75%9/13/20219/13/2027449 440 440 0.05 
YLG Holdings, Inc.^(2)(3)Consumer ServicesLIBOR
5.25%
6.25%9/30/202011/1/20251,980 1,930 1,980 0.21 
First Lien Debt Total$1,219,219 $1,188,862 125.30 %
Second Lien Debt (17.9% of fair value)
11852604 Canada Inc. (Canada)^(2)(3)(7)Healthcare & PharmaceuticalsLIBOR
9.50% (100% PIK)
10.50%9/30/20219/30/2028$6,590 $6,432 $6,425 0.68 %
AI Convoy S.A.R.L (United Kingdom)^(2)(3)(7)Aerospace & DefenseLIBOR
8.25%
9.25%1/17/20201/17/202824,814 24,359 25,744 2.71 
Aimbridge Acquisition Co., Inc.^(2)(3)Hotel, Gaming & LeisureLIBOR
7.50%
7.60%2/1/20192/1/20279,241 9,123 8,606 0.92 
104
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition DateMaturity DatePar/ Principal Amount **
Amortized Cost (4)
Fair Value (5)
% of Net
 Assets
AP Plastics Acquisition Holdings, LLC^(2)(3)Chemicals, Plastics & RubberLIBOR
7.50%
8.25%8/10/20218/10/2029$33,680 $32,786 $33,868 3.57 %
AQA Acquisition Holdings, Inc.^*(2)(3)High Tech IndustriesLIBOR
7.50%
8.00%3/3/20213/3/202935,000 34,190 35,027 3.69 
Blackbird Purchaser, Inc.^(2)(3)(14)Capital EquipmentLIBOR
7.50%
8.25%12/14/20214/8/202713,790 13,423 13,423 1.41 
Brave Parent Holdings, Inc.^*(2)(3)SoftwareLIBOR
7.50%
7.60%10/3/20184/19/202618,197 17,916 18,197 1.92 
Drilling Info Holdings, Inc.^(2)(3)Energy: Oil & GasLIBOR
8.25%
8.35%2/11/20207/30/202618,600 18,212 18,786 1.98 
Jazz Acquisition, Inc.^*(2)(3)Aerospace & DefenseLIBOR
8.00%
8.10%6/13/20196/18/202723,450 23,188 20,828 2.20 
Outcomes Group Holdings, Inc.^*(2)(3)Business ServicesLIBOR
7.50%
7.85%10/23/201810/26/20261,731 1,728 1,731 0.18 
PAI Holdco, Inc.^(2)(3)AutomotiveLIBOR
5.50%, 2.00% PIK
8.50%10/28/202010/28/202813,806 13,446 13,806 1.46 
Peraton Corp.^*(2)(3)Aerospace & DefenseLIBOR
7.75%
8.50%2/24/20212/1/202912,300 12,126 12,345 1.30 
Quartz Holding Company^(2)(3)SoftwareLIBOR
8.00%
8.10%4/2/20194/2/20277,048 6,945 7,048 0.74 
Stonegate Pub Company Bidco Limited (United Kingdom)^(2)(3)(7)Beverage, Food & TobaccoSONIA
8.50%
8.60%3/12/20203/12/2028£20,000 24,787 22,263 2.35 
Tank Holding Corp.^*(2)(3)Capital EquipmentLIBOR
8.25%
8.35%3/26/20193/26/202735,965 35,600 36,325 3.83 
TruGreen Limited Partnership^(2)(3)Consumer ServicesLIBOR
8.50%
9.25%11/16/202011/2/202813,000 12,769 13,260 1.40 
Watchfire Enterprises, Inc.^(2)(3)Media: Advertising, Printing & PublishingLIBOR
8.25%
9.25%10/2/201310/2/20247,000 7,000 7,000 0.74 
World 50, Inc.^(9)Business ServicesFIXED
11.50%
11.50%1/10/20201/9/202718,552 18,215 18,405 1.94 
WP CPP Holdings, LLC^(2)(3)Aerospace & DefenseLIBOR
7.75%
8.75%7/18/20194/30/202629,500 29,293 28,689 3.02 
Second Lien Debt Total$341,538 $341,776 36.02 %
Investments—non-controlled/non-affiliated (1)
FootnotesIndustryAcquisition DateShares/ UnitsCost
Fair
Value (5)
% 
of Net Assets
Equity Investments (4.0% of fair value)
ANLG Holdings, LLC^(6)Capital Equipment6/22/2018592 $592 $821 0.09 %
Appriss Health, LLC^(6)Healthcare & Pharmaceuticals5/6/20215 4,457 4,662 0.49 
Atlas Ontario LP (Canada)^(6)(7)Business Services4/7/20215,114 5,114 5,114 0.54 
Avenu Holdings, LLC^(6)Sovereign & Public Finance9/28/2018172 172 491 0.05 
Blackbird Holdco, Inc.^(6)Capital Equipment12/14/202110 9,461 9,461 1.00 
Buckeye Parent, LLC^(6)Automotive12/22/2021885 885 885 0.09 
Chartis Holding, LLC^(6)Business Services5/1/2019433 430 691 0.07 
CIP Revolution Holdings, LLC^(6)Media: Advertising, Printing & Publishing8/19/2016318 318 205 0.02 
Cority Software Inc. (Canada)^(6)Software7/2/2019250 250 454 0.05 
Derm Growth Partners III, LLC^(6)Healthcare & Pharmaceuticals5/31/20161,000 1,000 — — 
Diligent Corporation^(6)Telecommunications4/5/202111 10,269 10,256 1.08 
ECP Parent, LLC^(6)Healthcare & Pharmaceuticals3/29/2018268 — 290 0.03 
105
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliated (1)
FootnotesIndustryAcquisition DateShares/ UnitsCost
Fair
Value (5)
% 
of Net Assets
GB Vino Parent, L.P.^(6)Beverage, Food & Tobacco10/29/20214 $351 $351 0.04 %
Integrity Marketing Group, LLC^(6)Banking, Finance, Insurance & Real Estate12/21/202115,039 14,739 14,738 1.55 
K2 Insurance Services, LLC^(6)Banking, Finance, Insurance & Real Estate7/3/2019433 306 652 0.07 
Legacy.com, Inc.^(6)High Tech Industries3/20/20171,500 1,500 1,178 0.12 
Mailgun Technologies, Inc.^(6)High Tech Industries3/26/2019104 — 1,328 0.14 
North Haven Goldfinch Topco, LLC^(6)Containers, Packaging & Glass6/18/20182,315 2,315 2,412 0.25 
Pascal Ultimate Holdings, L.P^(6)Capital Equipment7/21/202136 364 364 0.04 
Tailwind HMT Holdings Corp.^(6)Energy: Oil & Gas11/17/201722 1,558 1,719 0.18 
Tank Holding Corp.^(6)Capital Equipment3/26/2019850 482 1,261 0.13 
Titan DI Preferred Holdings, Inc.^(6)Energy: Oil & Gas2/11/202012,843 12,587 12,971 1.37 
Turbo Buyer, Inc.^(6)Automotive12/2/20191,925 933 2,773 0.29 
Unifrutti Financing PLC (Cyprus)^(6)Beverage, Food & Tobacco10/22/2020— 481 648 0.07 
Unifrutti Financing PLC (Cyprus)^(6)Beverage, Food & Tobacco10/22/20201 133 209 0.02 
USLS Acquisition, Inc.^(6)Business Services11/30/2018641 641 940 0.10 
W50 Parent LLC^(6)Business Services1/10/2020500 190 763 0.08 
Zenith American Holding, Inc.^(6)Business Services12/13/20171,564 782 1,456 0.15 
Equity Investments Total$70,310 $77,093 8.13 %
Total investments—non-controlled/non-affiliated$1,631,067 $1,607,731 169.45 %
Investments—non-controlled/affiliatedFootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair
Value (5)
% of Net 
Assets
First Lien Debt (1.6% of fair value)
Direct Travel, Inc.^*(2)(3)(8)(12)Hotel, Gaming & LeisureLIBOR
1.00% (7.50% PIK)
9.50%10/14/201610/1/2023$36,711 $35,859 $27,555 2.9 %
Direct Travel, Inc.^(2)(3)(12)(14)Hotel, Gaming & LeisureLIBOR
6.00%
7.00%10/1/202010/1/20232,731 2,603 2,731 0.29 
First Lien Debt Total$38,462 $30,286 3.19 %
Investments—non-controlled/affiliatedFootnotesIndustryAcquisition DateShares/ UnitsCost
Fair
Value (5)
% of Net 
Assets
Equity Investments (0.0% of fair value)
Direct Travel, Inc.^(6)(12)Hotel, Gaming & Leisure10/1/202043 $— $— — %
Equity Investments Total43$— $— — %
Total investments—non-controlled/affiliated$38,462 $30,286 3.19 %
106
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—controlled/affiliated
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par/ Principal Amount **
Amortized Cost (4)
Fair
Value (5)
% of Net 
Assets
First Lien Debt (0.7% of fair value)
SolAero Technologies Corp. (A1 Term Loan)^(2)(3)(8)(10)TelecommunicationsLIBOR
8.00% (100% PIK)
9.00%4/12/201910/12/2022$3,166 $3,166 $2,850 0.30 %
SolAero Technologies Corp. (A2 Term Loan)^(2)(3)(8)(10)TelecommunicationsLIBOR
8.00% (100% PIK)
9.00%4/12/201910/12/20228,707 8,707 7,835 0.83 
SolAero Technologies Corp. (Priority Facilities)^(2)(3)(10)(14)TelecommunicationsLIBOR
6.00%
7.00%4/12/201910/12/20222,251 2,240 2,251 0.24 
First Lien Debt Total$14,113 $12,936 1.36 %
Investments—controlled/affiliatedFootnotesIndustryAcquisition DateShares/ UnitsCost
Fair
Value (5)
% of Net 
Assets
Equity Investments (0.0% of fair value)
SolAero Technologies Corp. (Equity)^(6)(10)Telecommunications4/12/20193 $2,815 $— — %
Equity Investments Total$2,815 $— — %
Investments—controlled/affiliated
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Acquisition Date
Maturity Date
Par Amount/ LLC Interest
Cost
Fair Value (7)
% of Net 
Assets
Investment Funds (13.7% of fair value)
Middle Market Credit Fund II, LLC, Member's Interest^(7)(10)Investment FundsN/A—%11/3/202012/31/2030$78,122 $78,096 $77,958 8.22 %
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest^(7)(10)Investment FundsN/A—%2/29/201612/31/2024193,000 193,000 184,141 19.41 
Middle Market Credit Fund, Mezzanine Loan^(2)(7)(9)(10)Investment FundsLIBOR
9.00%
9.210%6/30/20165/21/2022— — — — 
Investment Funds Total$271,096 $262,099 27.62 %
Total investments—controlled/affiliated$288,024 $275,035 29.00 %
Total investments$1,957,553 $1,913,052 201.63 %
^ Denotes that all or a portion of the assets are owned by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 7, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”).
* Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 8, Notes Payable, to these consolidated financial statements). Accordingly, such assets are not available to the creditors of the Company.
** Par amount is denominated in USD (“$”) unless otherwise noted, as denominated in Euro (“€”) or British Pound (“£”)
(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting
107
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2021, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2021, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2021. As of December 31, 2021, the reference rates for variable rate loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.22% and the 180-day LIBOR at 0.33%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs.
(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of December 31, 2021, the aggregate fair value of these securities is $77,093, or 8.13% of the Company’s net assets.
(7)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.
(8)Loan was on non-accrual status as of December 31, 2021.
(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.
(10)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Notes 5, Middle Market Credit Fund, LLC and 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2021, were as follows:
Investments—controlled/affiliatedFair Value as of December 31, 2020Additions/PurchasesReductions/Sales/ PaydownsNet Realized Gain (Loss)Net Change in Unrealized Appreciation (Depreciation)Fair Value as of December 31, 2021Dividend and Interest Income
Middle Market Credit Fund, LLC, Mezzanine Loan
$— $— $— $— $— $— $— 
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest
205,891 — (23,000)— 1,250 184,141 20,000 
Middle Market Credit Fund II, LLC, Member’s Interest77,395 — — — 563 77,958 10,063 
Total investments—controlled/affiliated$283,286 $— $(23,000)$— $1,813 $262,099 $30,063 
Investments—controlled/affiliatedFair Value as of December 31, 2020Additions/PurchasesReductions/Sales/ PaydownsNet Realized Gain (Loss)Net Change in Unrealized Appreciation (Depreciation)Fair Value as of December 31, 2021Dividend and Interest Income
SolAero Technologies Corp. (Priority Term Loan)2,460 — (189)— (20)2,251 185 
SolAero Technologies Corp. (A1 Term Loan)1,214 — — — 1,636 2,850 — 
SolAero Technologies Corp. (A2 Term Loan)3,338 — — — 4,497 7,835 — 
Solaero Technology Corp. (Equity)
— — — — — — — 
Total investments—controlled/affiliated$7,012 $— $(189)$— $6,113 $12,936 $185 
(11)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.
108
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
(12)Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio company because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to the portfolio company during the year ended December 31, 2021 were as follows:
Investments—non-controlled/affiliatedFair Value as of December 31, 2020Additions/PurchasesReductions/Sales/ PaydownsNet Realized Gain (Loss)Net Change in Unrealized Appreciation (Depreciation)Fair Value as of December 31, 2021Dividend and Interest Income
Direct Travel, Inc.$24,949 $— $(484)$3 $3,087 $27,555 $— 
Direct Travel, Inc.1,231 1,372 — — 128 2,731 173 
Direct Travel, Inc. (Equity)— — — — — — — 
Total investments—non-controlled/affiliated$26,180 $1,372 $(484)$3 $3,215 $30,286 $173 
(13)The investment is secured by receivables purchased from the portfolio company, with an implied discount of 8.75%. The investment was made via a tranched participation arrangement between the purchaser of such receivables and the Company. The investment has a secondary priority behind the rights of such purchaser.
(14)As of December 31, 2021, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
Investments—non-controlled/non-affiliatedTypeUnused FeePar/ Principal AmountFair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
Advanced Web Technologies Holding CompanyDelayed Draw1.00%$2,723 $27 
Advanced Web Technologies Holding CompanyDelayed Draw1.001,051 11 
Advanced Web Technologies Holding CompanyRevolver0.50906 9 
Airnov, Inc.Revolver0.50875 — 
American Physician Partners, LLCRevolver0.50550 — 
Analogic CorporationRevolver0.5072 (1)
Applied Technical Services, LLCRevolver0.5040 — 
Appriss Health, LLCRevolver0.502,963 3 
Apptio, Inc.Revolver0.501,420 — 
Ascend Buyer, LLCRevolver0.501,070 (17)
Associations, Inc.Revolver0.50723 2 
Blackbird Purchaser, Inc.Delayed Draw1.004,597 (92)
BMS Holdings III Corp.Delayed Draw1.009,688 (149)
Bubbles Bidco S.P.A. (Italy)Delayed Draw2.80€873 (30)
Bubbles Bidco S.P.A. (Italy)Delayed Draw—€537 (9)
Captive Resources Midco, LLCRevolver0.502,143 (12)
Chartis Holding, LLCRevolver0.50217 — 
Chemical Computing Group ULC (Canada)Revolver0.5029 — 
Chudy Group, LLCDelayed Draw1.00138 2 
Chudy Group, LLCRevolver0.5034 1 
Comar Holding Company, LLCRevolver0.502,935 (59)
Cority Software Inc. (Canada)Revolver0.503,000 (1)
DCA Investment Holding, LLCDelayed Draw1.001,495 (8)
109
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliatedTypeUnused FeePar/ Principal AmountFair Value
DermaRite Industries, LLCRevolver0.50%$579 $(103)
Diligent CorporationDelayed Draw1.00110 2 
Diligent CorporationRevolver0.5047 1 
Direct Travel, Inc.Delayed Draw0.501,657 — 
Dwyer Instruments, IncDelayed Draw1.001,003 (3)
Dwyer Instruments, IncRevolver0.50411 (1)
Ellkay, LLCRevolver0.501,786 (36)
EPS Nass Parent, Inc.Delayed Draw1.0085 (1)
EPS Nass Parent, Inc.Revolver0.5025 — 
EvolveIP, LLCRevolver0.50798 (4)
Greenhouse Software, Inc.Revolver0.501,471 (29)
Harbour Benefit Holdings, Inc.Revolver0.502,120 (21)
Heartland Home Services, IncDelayed Draw1.006,902 27 
Heartland Home Services, IncRevolver0.50598 2 
Hercules Borrower LLCRevolver0.502,160 43 
Hoosier Intermediate, LLCRevolver0.502,400 (48)
Individual FoodService Holdings, LLCDelayed Draw1.0048 — 
Individual Foodservice Holdings, LLCDelayed Draw1.00890 3 
Individual FoodService Holdings, LLCDelayed Draw1.00188 — 
Individual FoodService Holdings, LLCRevolver0.50706 — 
Integrity Marketing Acquisition, LLCDelayed Draw—5,000 (51)
Jeg's Automotive, LLCDelayed Draw1.006,667 (133)
Jeg's Automotive, LLCRevolver0.503,333 (67)
K2 Insurance Services, LLCRevolver0.501,120 (2)
Kaseya, Inc.Delayed Draw1.00585 (3)
Kaseya, Inc.Revolver0.501,543 (9)
Lifelong Learner Holdings, LLCRevolver0.502 — 
Liqui-Box Holdings, Inc.Revolver0.501,140 (113)
LVF Holdings, Inc.Delayed Draw1.004,670 (116)
LVF Holdings, Inc.Revolver0.501,459 (36)
Material Holdings, LLCDelayed Draw—1,916 (21)
Material Holdings, LLCRevolver1.00806 (9)
Maverick Acquisition, Inc.Delayed Draw1.004,679 (101)
Maverick Acquisition, Inc.Delayed Draw1.001,290 (28)
Medical Manufacturing Technologies, LLCDelayed Draw1.008,264 (165)
Medical Manufacturing Technologies, LLCRevolver0.501,859 (37)
MMIT Holdings, LLCRevolver0.50857 (17)
110
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
Investments—non-controlled/non-affiliatedTypeUnused FeePar/ Principal AmountFair Value
National Technical Systems, Inc.Revolver0.50%$835 $— 
NMI AcquisitionCo, Inc.Revolver0.501,280 (16)
PF Atlantic HoldCo 2, LLCDelayed Draw0.759,517 (190)
PF Atlantic HoldCo 2, LLCRevolver0.502,759 (55)
Prophix Software Inc. (Canada)Revolver0.501,993 20 
Quantic Electronics, LLCRevolver0.50557 (7)
Quantic Electronics, LLCDelayed Draw1.003,164 (41)
Quantic Electronics, LLCRevolver0.50824 (11)
RSC Acquisition, Inc.Delayed Draw0.502,435 9 
RSC Acquisition, Inc.Revolver0.50215 1 
Sapphire Convention, Inc.Revolver0.502,561 (345)
SolAero Technologies Corp. (Priority Facilities)Revolver0.50984 — 
SolAero Technologies Corp. (Priority Facilities)Revolver0.501,084 — 
Speedstar Holding, LLCDelayed Draw1.003,775 38 
Superior Health Linens, LLCRevolver0.50417 — 
TCFI Aevex LLCDelayed Draw1.001,835 (263)
TCFI Aevex LLCDelayed Draw1.00214 (31)
The Leaders Romans Bidco Limited (United Kingdom)Delayed Draw1.60£1,902 399 
Trafigura Trading LLCRevolver0.507,762 (133)
Turbo Buyer, Inc.Revolver0.501,217 (24)
US INFRA SVCS Buyer, LLCDelayed Draw1.0022,234 (527)
US INFRA SVCS Buyer, LLCRevolver0.50263 (6)
USLS Acquisition, Inc.Revolver0.501,135 (12)
Wineshipping.com LLCDelayed Draw1.001,986 (39)
Wineshipping.com LLCRevolver0.501,430 (28)
Total unfunded commitments$180,498 $(2,660)
111
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
As of December 31, 2021, investments at fair value consisted of the following:
TypeAmortized CostFair Value% of Fair Value
First Lien Debt$1,271,794 $1,232,084 64.4 %
Second Lien Debt341,538 341,776 17.9 
Equity Investments73,125 77,093 4.0 
Investment Funds271,096 262,099 13.7 
Total$1,957,553 $1,913,052 100.0 %
The rate type of debt investments at fair value as of December 31, 2021 was as follows:
Rate TypeAmortized CostFair Value% of Fair Value of First and Second Lien Debt
Floating Rate$1,589,342 $1,549,215 98.4 %
Fixed Rate23,990 24,645 1.6 
Total$1,613,332 $1,573,860 100.0 %

112
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
The industry composition of investments at fair value as of December 31, 2021 was as follows:
IndustryAmortized CostFair Value% of Fair Value
Aerospace & Defense$169,068 $166,071 8.7 %
Automotive91,155 94,144 4.9 
Beverage & Food91,999 97,377 5.1 
Business Services85,994 83,878 4.4 
Capital Equipment102,065 102,308 5.4 
Chemicals, Plastics & Rubber64,717 66,515 3.5 
Construction & Building59,945 61,055 3.2 
Consumer Goods: Durable11,277 11,450 0.6 
Consumer Goods: Non-Durable440 440 — 
Consumer Services5,303 5,158 0.3 
Containers, Packaging & Glass25,155 25,909 1.4 
Diversified Financial Services52,154 52,113 2.7 
Energy: Oil & Gas41,991 42,900 2.2 
Environmental Industries69,194 69,185 3.6 
Healthcare & Pharmaceuticals250,294 229,555 12.0 
High Tech Industries149,185 151,430 7.9 
Investment Funds126,237 113,201 5.9 
Leisure Products & Services271,096 262,099 13.7 
Media: Advertising, Printing & Publishing7,318 7,205 0.4 
Media: Diversified & Production19,700 19,666 1.0 
Metals & Mining2,237 2,086 0.1 
Retail44,644 44,992 2.4 
Software105,958 104,673 5.5 
Sovereign & Public Finance13,623 14,036 0.7 
Telecommunications87,977 76,585 4.0 
Utilities: Electric869 878 — 
Wholesale7,958 8,143 0.4 
Total$1,957,553 $1,913,052 100.0 %
113
CARLYLE SECURED LENDING, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2021
(dollar amounts in thousands)
The geographical composition of investments at fair value as of December 31, 2021 was as follows:
GeographyAmortized CostFair Value% of Fair Value
Canada$46,433 $47,543 2.5 %
Cyprus6,389 7,097 0.4 
Italy5,303 5,158 0.3 
Luxembourg41,647 38,403 2.0 
United Kingdom92,963 96,108 5.0 
United States1,764,818 1,718,743 89.8 
Total$1,957,553 $1,913,052 100.0 %

The accompanying notes are an integral part of these consolidated financial statements.

114

Table of Contents
CARLYLE SECURED LENDING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2022
(dollar amounts in thousands, except per share data)

1. ORGANIZATION
Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “CSL” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company is managed by its investment adviser, Carlyle Global Credit Investment Management L.L.C. (“CGCIM” or “Investment Adviser”), a wholly owned subsidiary of The Carlyle Group Inc. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).
The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. The Company's core investment strategy focuses on lending to U.S. middle market companies, which the Company defines as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. The Company invests primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of its assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms.
The Company invests primarily in loans to middle market companies whose debt has been rated below investment grade, or would likely be rated below investment grade if it was rated. These securities, which are often referred to as “junk,” have predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.
On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.” On June 19, 2017, the Company closed its initial public offering (“IPO”), issuing 9,454,200 shares of its common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, the Company received cash proceeds of $169,488. Shares of common stock of CSL began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017.
Effective April 12, 2022, the Company changed its name from “TCG BDC, Inc.” to “Carlyle Secured Lending, Inc.”
Until December 31, 2017, the Company was an “emerging growth company,” as that term is used in the Jumpstart Our Business Startups Act of 2012. As of June 30, 2017, the market value of the common stock held by non-affiliates exceeded $700,000. Accordingly, the Company ceased to be an emerging growth company as of December 31, 2017.
The Company is externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940 (“Advisers Act”), as amended. Carlyle Global Credit Administration L.L.C. (“CGCA” or the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C. (“CIM”), a subsidiary of The Carlyle Group Inc. “Carlyle” refers to The Carlyle Group Inc. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global alternative asset manager publicly traded on the Nasdaq Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.
TCG BDC SPV LLC (the “SPV”) is a Delaware limited liability company that was formed on January 3, 2013. Prior to the termination of its senior secured credit facility on December 11, 2020, the SPV invested in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial
115

Table of Contents
statements commencing from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from “Carlyle GMS Finance SPV LLC” to “TCG BDC SPV LLC”.
On June 26, 2015, the Company completed a $400,000 term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 8, Notes Payable, for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015.
On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 and February 22, 2021 (as amended, the “Limited Liability Company Agreement”) to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, for details.
On May 5, 2020, the Company issued and sold 2,000,000 shares of cumulative convertible preferred stock, par value $0.01 per share (the "Preferred Stock"), to an affiliate of Carlyle in a private placement at a price of $25 per share. See Note 10, Net Assets, for further information about the Preferred Stock.
On November 3, 2020, the Company and Cliffwater Corporate Lending Fund ("CCLF"), an investment vehicle managed by Cliffwater LLC, entered into a limited liability company agreement to co-manage Middle Market Credit Fund II, LLC ("Credit Fund II"). Credit Fund II invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board of managers, on which the Company and CCLF each have equal representation. The Company and CCLF have approximately 84.13% and 15.87% economic ownership of Credit Fund II, respectively. The Company contributed certain senior secured debt investments with an aggregate principal balance of approximately $250 million to Credit Fund II in exchange for its 84.13% economic interest and gross cash proceeds of approximately $170 million. See Note 6, Middle Market Credit Fund II, LLC, to these consolidated financial statements for details.
As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).
To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPVs and the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. U.S. GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.
The annual financial statements have been prepared in accordance with U.S. GAAP for annual financial information and pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the years presented have been included.
116

Table of Contents
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3 for further information about fair value measurements.
Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash, cash equivalents and restricted cash are held with one large financial institution and cash held in such financial institution may, at times, exceed the Federal Deposit Insurance Corporation insured limit. As of December 31, 2022 and 2021, the Company had restricted cash balances of $14,412 and $70,081, respectively, which represent amounts that are collected by trustees who have been appointed as custodians of the assets securing certain of the Company's financing transactions, and held for payment of interest expense and principal on the outstanding borrowings, or reinvestment into new assets.
Revenue Recognition
Interest from Investments and Realized Gain/Loss on Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK income represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. As of December 31, 2022 and 2021, the fair value of the loans in the portfolio with PIK provisions was $176,773 and $243,220, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company earned $23,067, $9,346, and $5,476 in PIK income, respectively. In 2022, the Company began presenting PIK income as a separate financial statement line item in the accompanying Consolidated Statements of Operations, which had previously been included in interest income. Prior periods have been conformed to the current presentation.
In 2021, the Company separately presented interest receivable from non-controlled/non-affiliated investments, interest receivable from non-controlled/affiliated investments, and interest and dividend receivable from controlled/affiliated investments on the Consolidated Statements of Assets and Liabilities. In 2022, the amounts are presented collectively on the Consolidated Statements of Assets and Liabilities as interest and dividend receivable. There was no change to total net assets as a result of these reclassifications. Prior periods have been conformed to the current presentation.
117

Table of Contents
Dividend Income
Dividend income from each investment fund, Credit Fund and Credit Fund II, and other investments funds, if any, is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.
Other Income
Other income may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the years ended December 31, 2022, 2021 and 2020, the Company earned $7,583, $6,397 and $10,974, respectively, in other income, primarily from amendment, underwriting, and prepayment fees.
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are current or there is no longer any reasonable doubt that such principal or interest will be collected in full and, in management’s judgment, are likely to remain current. Management may determine not to place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2022 and 2021, the fair value of the loans in the portfolio on non-accrual status was $57,932 and $76,551, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2022 and 2021.
Credit Facility, Senior Notes, 2015-1R Notes – Related Costs, Expenses and Deferred Financing Costs
The Company entered into a senior secured revolving credit facility (as amended, the “Credit Facility,” and the SPV entered into a senior secured credit facility (together with the Credit Facility, the “Facilities”), the latter of which was terminated on December 11, 2020. Interest expense and unused commitment fees on the Credit Facility are recorded on an accrual basis. Unused commitment fees are included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.
On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024 (the “2019 Notes”). On December 11, 2020, the Company issued $75.0 million in aggregate principal amount of 4.500% Senior Unsecured Notes due December 31, 2024 (the "2020 Notes, and together with the 2019 Notes, the “Senior Notes”). The Credit Facility, the 2015-1R Notes and the Senior Notes are recorded at carrying value, which approximates fair value.
Deferred financing costs include capitalized expenses related to the closing or amendments of the Credit Facility. Amortization of deferred financing costs for the Credit Facility is computed on the straight-line basis over its term. The unamortized balance of such costs is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.
Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1R Notes and Senior Notes. Amortization of debt issuance costs for the notes is computed on the effective yield method over the term of the notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.
In 2021, the Company separately presented secured borrowings, 2015-1R Notes payable, and Senior Notes on the Consolidated Statements of Assets and Liabilities. In 2022, the amounts are presented collectively in the accompanying Consolidated Statements of Assets and Liabilities as debt and secured borrowings. There was no change to total net assets as a result of these reclassifications. Prior periods have been conformed to the current presentation.
118

Table of Contents
In 2021, the Company separately presented deferred financing costs on the Consolidated Statements of Assets and Liabilities and credit facility fees on the Consolidated Statements of Operations. In 2022, these amounts are presented as a component of prepaid expenses and other assets and interest expense and credit facility fees on their respective statements. Prior periods have been conformed to the current presentation.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year, although depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of the current year distribution into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements as reasonable.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company. All penalties and interest associated with income taxes, if any, are included in income tax expense. For the years ended December 31, 2022, 2021 and 2020, the Company incurred $1,829, $782 and $573, respectively, in excise tax expense.

Dividends and Distributions to Common Stockholders
To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.

Prior to July 5, 2017, the Company had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, the Company converted the “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of dividends and other distributions on behalf of the common stockholders, other than those common stockholders who have “opted out” of the plan. As a result of adopting the plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the common stockholders who have not elected to “opt out” of the dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, the Company’s plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. The Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the NAV per share on the relevant valuation date. If the market value per share is less than the NAV per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
119

Table of Contents
Functional Translations
The functional currency of the Company is the U.S. Dollar. Investments are generally made in the local currency of the country in which the investment is domiciled and are translated into U.S. Dollars with foreign currency translation gains or losses recorded within net change in unrealized appreciation (depreciation) on investments in the accompanying Consolidated Statements of Operations. Foreign currency translation gains and losses on non-investment assets and liabilities are separately reflected in the accompanying Consolidated Statements of Operations.
Earnings Per Common Share
The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Basic earnings per common share is calculated by dividing the net increase (decrease) in net assets resulting from operations attributable to common stock by the weighted average number of shares of common stock outstanding. Diluted earnings per common share reflects the assumed conversion of all dilutive securities.
Recent Accounting Standards Updates
In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848), which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04, 2021-01 and 2022-06 on its consolidated financial statements. The Company does not expect this guidance to impact its consolidated financial statements.
3. FAIR VALUE MEASUREMENTS
The Company applies fair value accounting in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed
120

Table of Contents
by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) if applicable, prior to September 8, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) reviewed the assessments of the Investment Adviser and the third-party valuation firm; and (v) if applicable, prior to September 8, 2022, the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
•the nature and realizable value of any collateral;
•call features, put features and other relevant terms of debt;
•the portfolio company’s leverage and ability to make payments;
•the portfolio company’s public or private credit rating;
•the portfolio company’s actual and expected earnings and discounted cash flow;
•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;
•the markets in which the portfolio company does business and recent economic and/or market events; and
•comparisons to comparable transactions and publicly traded securities.
Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of December 31, 2022, 2021 and 2020.
U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
 
•Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments in Level 1 generally include unrestricted securities, including equities and derivatives, listed in active markets. The Investment Adviser does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.
•Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.
•Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
121

Table of Contents
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Investments in Credit Fund and Credit Fund II are valued based on the legal form of investment. For those structured through LLC membership interests, the practical expedient, or net asset value method is used. For those structured through subordinated notes, a discounted cash flow method is used.
Transfers between levels, if any, are recognized at the beginning of the year in which the transfers occur. For the years ended December 31, 2022 and 2021, there were no transfers between levels.
The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2022 and 2021:
 December 31, 2022
 Level 1Level 2Level 3Total
Assets
First Lien Debt$— $— $1,359,962 $1,359,962 
Second Lien Debt— — 262,703 262,703 
Equity Investments— — 94,190 94,190 
Investment Fund
Mezzanine Loan— — — — 
Subordinated Loan and Member's Interest— — 190,065 190,065 
Subtotal$— $— $1,906,920 $1,906,920 
Investments measured at net asset value(1)
$72,957 
Total$1,979,877 
 December 31, 2021
 Level 1Level 2Level 3Total
Assets
First Lien Debt$— $— $1,232,084 $1,232,084 
Second Lien Debt— — 341,776 341,776 
Equity Investments— — 77,093 77,093 
Investment Fund
Mezzanine Loan— — — — 
Subordinated Loan and Member's Interest— — 184,141 184,141 
Subtotal$— $— $1,835,094 $1,835,094 
Investments measured at net asset value(1)
$77,958 
Total$1,913,052 
 
(1) Amount represents the Company’s investment in Credit Fund II. The Company, as a practical expedient, estimates the fair value of this investment using the net asset value of the Company’s member’s interest in Credit Fund II. As such, the fair value of the Company’s investment in Credit Fund II has not been categorized within the fair value hierarchy.

122

Table of Contents
The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:
Financial Assets
 For the year ended December 31, 2022
 First Lien DebtSecond Lien DebtEquity InvestmentsInvestment Fund - Mezzanine LoanInvestment Fund - Subordinated Loan and Member's InterestTotal
Balance, beginning of year$1,232,084 $341,776 $77,093 $— $184,141 $1,835,094 
Purchases639,337 1,284 20,165 — — 660,786 
Sales(216,259)(23,703)(5,094)— — (245,056)
Paydowns(289,855)(43,325)(1,083)— — (334,263)
Accretion of discount8,701 1,088 201 — — 9,990 
Net realized gains (losses)2,626 (5,615)3,954 — — 965 
Net change in unrealized appreciation (depreciation)(16,672)(8,802)(1,046)— 5,924 (20,596)
Balance, end of year$1,359,962 $262,703 $94,190 $— $190,065 $1,906,920 
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations$(12,385)$(8,680)$(2,534)$— $5,924 $(17,675)
Financial Assets
 For the year ended December 31, 2021
 First Lien DebtSecond Lien DebtEquity InvestmentsInvestment Fund - Mezzanine LoanInvestment Fund - Subordinated LoanTotal
Balance, beginning of year$1,224,063 $284,523 $33,877 — 205,891 $1,748,354 
Purchases669,737 134,170 47,513 — — 851,420 
Sales(322,486)(22,123)(23,338)— — (367,947)
Paydowns(383,954)(69,770)(585)— (23,000)(477,309)
Accretion of discount7,928 1,424 31 — — 9,383 
Net realized gains (losses)2,413 (125)16,750 — — 19,038 
Net change in unrealized appreciation (depreciation)34,383 13,677 2,845 — 1,250 52,155 
Balance, end of year$1,232,084 $341,776 $77,093 $— $184,141 $1,835,094 
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations$28,184 $13,657 $4,539 $— $1,250 $47,630 

The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Investment Adviser carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value the Company’s portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
123

Table of Contents
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in Credit Fund’s mezzanine loan are valued using collateral analysis with expected recovery rate of principal and interest. Investments in Credit Fund’s subordinated loan and member’s interest are valued using discounted cash flow analysis with expected discount rate, default rate and recovery rate of principal and interest.
The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of December 31, 2022 and 2021:
 Fair Value asValuation TechniquesSignificant Unobservable InputsRangeWeighted Average
 of December 31, 2022LowHigh
Investments in First Lien Debt$1,157,414 Discounted Cash FlowDiscount Rate4.84 %17.96 %9.09 %
74,457 Consensus PricingIndicative Quotes97.00 100.00 97.95 
128,091 Income ApproachDiscount Rate9.03 %19.31 %13.34 %
Market ApproachComparable Multiple5.21x10.51x9.81x
Total First Lien Debt1,359,962 
Investments in Second Lien Debt262,703 Discounted Cash FlowDiscount Rate8.96 %13.33 %10.12 %
Total Second Lien Debt262,703 
Investments in Equity94,190 Income ApproachDiscount Rate7.22 %12.69 %9.89 %
Market ApproachComparable Multiple8.40x17.24x10.41x
Total Equity Investments94,190 
Investments in Credit Fund
Mezzanine Loan— Collateral AnalysisRecovery Rate— %— %— %
Subordinated Loan and Member's Interest190,065 Discounted Cash FlowDiscount Rate10.25 %10.25 %10.25 %
Discounted Cash FlowDefault Rate3.00 %3.00 %3.00 %
Discounted Cash FlowRecovery Rate65.00 %65.00 %65.00 %
Total Investments in Credit Fund190,065 
Total Level 3 Investments$1,906,920 
124

Table of Contents
 Fair Value asValuation TechniquesSignificant
Unobservable
Inputs		RangeWeighted Average
 of December 31, 2021LowHigh
Investments in First Lien Debt$981,627 Discounted Cash FlowDiscount Rate3.90 %14.21 %7.70 %
185,432 Consensus PricingIndicative Quotes90.00 100.00 97.69 
65,025 Income ApproachDiscount Rate11.55 %13.18 %12.24 %
Market ApproachComparable Multiple6.68x8.16x7.53x
Total First Lien Debt1,232,084 
Investments in Second Lien Debt299,664 Discounted Cash FlowDiscount Rate7.11 %15.83 %9.46 %
42,112 Consensus PricingIndicative Quotes97.25 98.00 97.49 
Total Second Lien Debt341,776 
Investments in Equities77,093 Income ApproachDiscount Rate7.22 %11.55 %8.38 %
Market ApproachComparable Multiple8.16x16.43x11.26x
Total Equity Investments77,093 
Investments in Investment Fund
Mezzanine Loan— Collateral AnalysisRecovery Rate— %— %— %
Subordinated Loan184,141 Discounted Cash FlowDiscount Rate8.50 %8.50 %8.50 %
Discounted Cash FlowDefault Rate3.00 %3.00 %3.00 %
Discounted Cash FlowRecovery Rate65.00 %65.00 %65.00 %
Total Investment Fund184,141 
Total Level 3 Investments$1,835,094 
The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation may result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.
The significant unobservable input used in the fair value measurement of the Company’s investments in the mezzanine loan of Credit Fund are recovery rates of principal and interest. Significant decreases in recovery rates would result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are discount rates, default rates and recovery rates. Significant increases in the discount rates or default rates in isolation would result in a significantly lower fair value measurement. A significant decreases in recovery rates in isolation would result in a significantly lower fair value measurement.
Financial instruments disclosed but not carried at fair value
The following table presents the carrying value and fair value of the Company’s secured borrowings and senior unsecured notes disclosed but not carried at fair value as of December 31, 2022 and 2021:
 December 31, 2022December 31, 2021
 Carrying ValueFair ValueCarrying ValueFair Value
Secured borrowings$440,441 $440,441 $407,655 $407,655 
2019 Notes115,000 105,496 115,000 117,300 
2020 Notes75,000 69,180 75,000 75,530 
Total$630,441 $615,117 $597,655 $600,485 
The carrying values of the secured borrowings generally approximate their respective fair values due to their variable interest rates. Secured borrowings are categorized as Level 3 within the hierarchy.
125

Table of Contents
The carrying values of the Senior Notes approximate their respective fair values. The Senior Notes are categorized as Level 3 within the hierarchy and are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s Senior Notes are discount rates. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement.
The following table represents the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1R Notes disclosed but not carried at fair value as of December 31, 2022 and 2021:
 December 31, 2022December 31, 2021
2015-1R NotesCarrying ValueFair ValueCarrying ValueFair Value
Aaa/AAA Class A-1-1-R Notes$234,800 $232,170 $234,800 $234,941 
Aaa/AAA Class A-1-2-R Notes50,000 49,655 50,000 50,075 
Aaa/AAA Class A-1-3-R Notes25,000 24,013 25,000 24,680 
AA Class A-2-R Notes66,000 63,802 66,000 66,003 
A Class B Notes46,400 44,465 46,400 46,430 
BBB- Class C Notes27,000 25,920 27,000 26,714 
Total$449,200 $440,025 $449,200 $448,843 
The fair value determination of the Company’s notes payable was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement.
The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.
4. RELATED PARTY TRANSACTIONS
Investment Advisory Agreement
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The Original Investment Advisory Agreement was amended on September 15, 2017 and August 6, 2018 after receipt of requisite Board and stockholders' approvals, as applicable (as amended, the “Investment Advisory Agreement”). Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On May 9, 2022, the Company's Board of Directors, including a majority of the Independent Directors, approved at an in-person meeting the continuance of the Company’s Investment Advisory Agreement with the Adviser for an additional one year term. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Adviser provides investment advisory services to the Company. For providing these services, the Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
The Base Management Fee is calculated at an annual rate of 1.50% of the average value of the Company’s gross assets at the end of the two most recently completed fiscal quarters; provided, however, the Base Management Fee is calculated at an annual rate of 1.00% of the Company’s gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters. “Gross assets” is determined on a consolidated basis in accordance with generally accepted accounting principles in the United States, includes assets acquired through the incurrence of debt (see Note 7, Borrowings, and Note 8, Notes Payable), and excludes cash and any temporary investments in cash-equivalents. For purposes of this calculation, cash and cash equivalent includes U.S. government securities and other high-quality investment grade debt investments that mature in 12 months or less from the date of investment. The Base Management Fee is payable quarterly in arrears, will be appropriately adjusted for any share issuances or repurchases during such the applicable fiscal quarters, and will be appropriately pro-rated for any partial month or quarter.
126

Table of Contents
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, has been compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.
Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
 
•no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;
•100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and
•17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.
Below is a summary of the base management fees and incentive fees incurred during the years ended December 31, 2022, 2021 and 2020.
For the years ended December 31,
202220212020
Base management fees$28,803 $28,343 $28,648 
Incentive fees on pre-incentive fee net investment income21,414 17,680 18,555 
Realized capital gains incentive fees— — — 
Accrued capital gains incentive fees— — — 
Total capital gains incentive fees— — — 
Total incentive fees21,414 17,680 18,555 
Total base management fees and incentive fees$50,217 $46,023 $47,203 
127

Table of Contents
Accrued capital gains incentive fees are based upon the cumulative net realized and unrealized appreciation (depreciation) from inception. Accordingly, the accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.

As of December 31, 2022 and 2021, $12,681 and $11,819, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.
Administration Agreement
On April 3, 2013, the Company’s Board of Directors approved the Administration Agreement (the “Administration Agreement”) between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Financial Officer, Chief Compliance Officer and Treasurer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.
Unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On May 9, 2022, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
For the years ended December 31, 2022, 2021 and 2020, the Company incurred $1,636, $1,338 and $679, respectively, in fees under the Administrative Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of December 31, 2022 and 2021, $1,711 and $482, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
Sub-Administration Agreements
On April 3, 2013, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator with access to personnel.
On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street and, such agreement, the "State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”). Unless terminated earlier, the State Street Sub-Administration Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On May 9, 2022, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the State Street Sub-Administration Agreement for a one year period. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
For the years ended December 31, 2022, 2021 and 2020, fees incurred in connection with the State Street Sub-Administration Agreement, which amounted to $807, $684 and $659, respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. As of December 31, 2022 and 2021, $298 and
128

Table of Contents
$682, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.
License Agreement
The Company has entered into a royalty free license agreement with CIM, which wholly owns the Investment Adviser and is a wholly owned subsidiary of Carlyle, pursuant to which CIM has granted the Company a non-exclusive, revocable and non-transferable license to use the name and mark “Carlyle.”
Board of Directors
The Company’s Board of Directors currently consists of seven members, four of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Pricing Committee, a Nominating and Governance Committee and a Compensation Committee, the members of each of which consist entirely of the Company’s Independent Directors. The Board of Directors may establish additional committees in the future. For the years ended December 31, 2022, 2021 and 2020, the Company incurred $640, $561 and $398, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. As of December 31, 2022, no fees or expenses associated with its Independent Directors were payable. As of December 31, 2021, $142 in fees or expenses associated with its Independent Directors were payable, and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.
Transactions with Investment Funds
During the years ended December 31, 2022, 2021 and 2020, the Company sold 8, 8 and 4 investments, respectively, to Credit Fund for proceeds of $113,509, $118,204 and $62,754, respectively, and realized gains (losses) of $(439), $1,075 and $(2,289), respectively. See Note 5, Middle Market Credit Fund, LLC, to these consolidated financial statements.
During the year ended December 31, 2022, the Company sold 10 investments to Credit Fund II for proceeds of $68,167 and realized (losses) of $(840). During the year ended December 31, 2021, the Company sold 17 investments to Credit Fund II for proceeds of $84,554 and realized gains of $468. The Company did not sell any investments to Credit Fund II during the years ended December 31, 2020. On November 3, 2020, pursuant to a contribution agreement by and between the Company and Credit Fund II, the Company contributed 45 senior secured debt investments with an aggregate principal balance of approximately $250 million to Credit Fund II in exchange for approximately 84.13% of Credit Fund II’s membership interests and gross cash proceeds of approximately $170 million. There were no subsequent transfers through December 31, 2020. See Note 6, Middle Market Credit Fund II, LLC, for further information about Credit Fund II.
Transactions with Carlyle
On May 5, 2020, the Company issued and sold 2,000,000 shares of the cumulative convertible preferred stock, par value $0.01 per share, to an affiliate of Carlyle in a private placement at a price of $25 per share (the “Preferred Stock”). See Note 10, Net Assets, for further information about the Preferred Stock.
In December 2020, the Company paid an affiliate of Carlyle a fee for underwriting services rendered in connection with the issuance of the 2020 Notes in the amount of 0.75% of the aggregate principal amount of the 2020 Notes. See Note 8, Notes Payable, for further information about the 2020 Notes.
5. MIDDLE MARKET CREDIT FUND, LLC
Overview
On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended and restated on June 24, 2016, February 22, 2021 and May 16, 2022 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund,
129

Table of Contents
including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), MMCF CLO 2019-2, LLC (the “2019-2 Issuer”) and MMCF Warehouse II, LLC (the “Credit Fund Warehouse II”), each a Delaware limited liability company, were formed on April 5, 2016, November 26, 2018 and August 16, 2019, respectively. Credit Fund Sub, the 2019-2 Issuer, and Credit Fund Warehouse II are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations. In August 2021, the 2019-2 Notes, as defined below, were redeemed and repaid in full. Credit Fund Sub and Credit Fund Warehouse II primarily invest in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company. Refer to “Debt” below in this Note 5 for discussion regarding the Credit Facility entered into and the notes issued by such wholly-owned subsidiaries.
Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Credit Fund Administrative Agent”), pursuant to which the Credit Fund Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Credit Fund Administrative Agent in performing its obligations thereunder.
Selected Financial Data
Since inception of Credit Fund and through December 31, 2022 and 2021, the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $216,000 in subordinated loans, respectively, to Credit Fund. On May 25, 2021, the Company and Credit Partners received an aggregate return of capital on the subordinated loans of $46,000, of which the Company received $23,000. Below is certain summarized consolidated information for Credit Fund as of December 31, 2022 and 2021.
As of December 31,
20222021
ASSETS
Investments, at fair value (amortized cost of $953,467 and $940,092, respectively)
$902,720 $926,959 
Cash and cash equivalents(1)
28,030 54,041 
Other assets9,681 7,698 
Total assets$940,431 $988,698 
LIABILITIES AND MEMBERS’ EQUITY
Secured borrowings$588,621 $600,651 
Other liabilities19,940 19,828 
Subordinated loans and members’ equity (2)
331,870 368,219 
Total liabilities and members’ equity$940,431 $988,698 
(1) As of December 31, 2022 and 2021, $14,393 and $10,816, respectively, of Credit Fund’s cash and cash equivalents was restricted.
(2) As of December 31, 2022 and 2021, the fair value of the Company's ownership interest in the subordinated loans and members' equity was $190,065 and $184,141, respectively.
130

Table of Contents
For the Years Ended December 31,
20222021
Total investment income$69,779 $68,397 
Expenses
Interest and credit facility expenses25,195 21,763 
Other expenses2,050 1,992 
Total expenses27,245 23,755 
Net investment income (loss)42,534 44,642 
Net realized gain (loss) on investments(269)(1,440)
Net change in unrealized appreciation (depreciation) on investments(37,614)11,024 
Net increase in members’ equity resulting from operations$4,651 $54,226 
Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of December 31, 2022 and 2021:
As of December 31,
 20222021
Senior secured loans(1)
$955,605 $942,930 
Weighted average yields of senior secured loans based on amortized cost(2)
10.0 %6.0 %
Weighted average yields of senior secured loans based on fair value(2)
10.5 %6.1 %
Number of portfolio companies in Credit Fund45 45 
Average amount per portfolio company(1)
$21,236 $20,954 
Number of loans on non-accrual status— — 
Percentage of portfolio at floating interest rates(3)(4)
100.0 %100.0 %
Fair value of loans with PIK provisions$49,950 $— 
Percentage of portfolio with PIK provisions(4)
5.5 %— %
(1)At par/principal amount.
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2022 and 2021. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(3)Floating rate debt investments are generally subject to interest rate floors.
(4)Percentages based on fair value.
131

Table of Contents
Consolidated Schedule of Investments as of December 31, 2022
Investments (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity Date
Par/ Principal Amount
Amortized Cost (4)
Fair Value (5)
First Lien Debt (100.0% of fair value)
ACR Group Borrower, LLC^+(2)(3)(7)Aerospace & DefenseLIBOR
4.50%
9.22%3/31/2028$36,965 $36,488 $36,015 
Acrisure, LLC+(2)Diversified Financial ServicesLIBOR
3.50%
7.88%2/13/202725,118 25,099 23,485 
Alpine Acquisition Corp II+(2)(3)(6)Transportation: CargoSOFR
5.50%
9.76%11/30/202610,000 9,527 9,630 
Analogic Corporation+(2)(3)(7)Capital EquipmentLIBOR
5.25%
9.67%6/22/202420,226 20,217 19,725 
Anchor Packaging, Inc.+(2)Containers, Packaging & GlassLIBOR
4.00%
8.38%7/18/202622,221 22,157 21,360 
API Technologies Corp.+(2)Aerospace & DefenseLIBOR
4.25%
8.98%5/9/202614,475 14,436 13,127 
Aptean, Inc.+(2)(6)SoftwareSOFR
4.25%
8.98%4/23/202612,031 11,997 11,475 
Avalign Technologies, Inc.+(2)(6)Healthcare & PharmaceuticalsSOFR
4.50%
9.03%12/22/202514,294 14,227 13,382 
BMS Holdings III Corp.+(2)(3)Construction & BuildingLIBOR
5.50%
10.23%9/30/202611,131 11,049 10,931 
Chartis Holding, LLC^+(2)(3)(7)Business ServicesLIBOR
5.00%
9.77%5/1/20256,893 6,893 6,832 
Chemical Computing Group ULC (Canada)^+(2)(3)(6)
(7)		SoftwareSOFR
4.50%
8.57%8/30/202413,769 13,559 13,564 
Diligent Corporation^+(2)(3)(7)TelecommunicationsLIBOR
6.25%
10.63%8/4/20259,880 9,706 9,449 
Divisions Holding Corporation+(2)(3)Business ServicesLIBOR
4.75%
9.13%5/27/202824,688 24,488 24,009 
DTI Holdco, Inc.+(2)(3)High Tech IndustriesSOFR
4.75%
8.84%4/26/202929,925 29,373 27,363 
Eliassen Group, LLC+(2)(3)Business ServicesSOFR
5.50%
10.07%4/14/202819,375 19,148 19,150 
EPS Nass Parent, Inc.^+(2)(3)(7)Utilities: ElectricLIBOR
5.75%
10.48%4/19/202834,104 33,524 32,432 
EvolveIP, LLC^+(2)(3)(6)
(7)		TelecommunicationsSOFR
5.50%
10.09%6/7/202540,392 40,361 39,633 
Exactech, Inc.+(2)(3)Healthcare & PharmaceuticalsLIBOR
3.75%
8.13%2/14/202521,081 21,022 17,002 
GSM Acquisition Corp.+(2)(3)(6)Leisure Products & ServicesSOFR
5.00%
9.83%11/16/202630,958 30,709 29,636 
Heartland Home Services, Inc.+(2)(3)Consumer ServicesLIBOR
5.75%
10.10%12/15/20267,242 7,158 7,114 
Heartland Home Services, Inc.+(2)(3)(7)Consumer ServicesLIBOR
6.00%
10.38%12/15/202624,255 24,176 24,014 
Higginbotham Insurance Agency, Inc.+(2)(3)Diversified Financial ServicesLIBOR
5.25%
9.63%11/25/20264,477 4,418 4,377 
HMT Holding Inc.^+(2)(3)(6)
(7)		Energy: Oil & GasSOFR
5.75%
10.15%11/17/202532,148 32,013 30,654 
Integrity Marketing Acquisition, LLC+(2)(3)Diversified Financial ServicesLIBOR
6.05%
10.57%8/27/202536,943 36,622 35,614 
Integrity Marketing Acquisition, LLC^+(2)(3)Diversified Financial ServicesLIBOR
6.02%
10.57%8/27/20256,949 6,873 6,699 
Jensen Hughes, Inc.^+(2)(3)(7)Utilities: ElectricLIBOR
4.50%
9.43%3/22/202434,584 34,559 33,323 
K2 Insurance Services, LLC^+(2)(3)(7)Diversified Financial ServicesLIBOR
5.00%
9.73%7/1/202612,799 12,799 12,665 
KAMC Holdings, Inc.+(2)Energy: ElectricityLIBOR
4.00%
8.73%8/14/202613,545 13,507 10,881 
KBP Investments, LLC+(2)(3)(7)Beverage & FoodSOFR
5.50%,0.50% PIK
10.53%5/25/202737,241 37,055 34,326 
Odyssey Logistics & Technology Corp.^+(2)(3)Transportation: CargoLIBOR
4.00%
8.38%10/12/20249,505 9,489 9,277 
Output Services Group^+(2)(3)Media: Advertising, Printing & PublishingSOFR
5.25%,1.50% PIK
11.30%6/27/202619,190 19,169 13,097 
PF Atlantic Holdco 2, LLC+(2)(3)Leisure Products & ServicesLIBOR
5.50%
10.25%11/12/202715,396 15,168 15,126 
Premise Health Holding Corp.+(2)Healthcare & PharmaceuticalsLIBOR
3.75%
7.92%7/10/202513,306 13,280 13,199 
132

Table of Contents
Consolidated Schedule of Investments as of December 31, 2022
Investments (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity Date
Par/ Principal Amount
Amortized Cost (4)
Fair Value (5)
QW Holding Corporation^+(2)(3)(7)Environmental IndustriesLIBOR
5.50%
9.64%8/31/2026$21,574 $21,437 $21,105 
Radiology Partners, Inc.+(2)Healthcare & PharmaceuticalsLIBOR
4.25%
8.64%7/9/202527,686 27,625 23,201 
RevSpring Inc.+(2)Media: Advertising, Printing & PublishingLIBOR
4.00%
8.73%10/11/202528,848 28,737 27,719 
Riveron Acquisition Holdings, Inc.+(2)(3)Diversified Financial ServicesLIBOR
5.75%
10.48%5/22/202511,284 11,284 11,284 
Striper Buyer, LLC+(2)(3)Containers, Packaging & GlassLIBOR
5.50%
9.88%12/30/202614,700 14,593 14,604 
Tank Holding Corp.+(2)(3)(6)Capital EquipmentSOFR
5.75%
10.16%3/31/202819,950 19,410 19,421 
Turbo Buyer, Inc.+(2)(3)(7)AutomotiveLIBOR
6.00%
11.13%12/2/202534,251 34,044 33,625 
U.S. TelePacific Holdings Corp.+(2)(3)(6)TelecommunicationsSOFR
1.00%,7.25% PIK
11.57%5/2/20267,086 7,073 2,527 
USALCO, LLC+(2)(3)Chemicals, Plastics & RubberLIBOR
6.00%
10.73%10/19/202714,845 14,598 14,118 
VRC Companies, LLC^+(2)(3)(7)Business ServicesLIBOR
5.50%
10.59%6/29/202728,767 28,418 28,059 
Welocalize, Inc.^+(2)(3)(7)Business ServicesLIBOR
4.75%
9.13%12/23/202433,853 33,615 32,677 
WRE Holding Corp.^+(2)(3)(6)
(7)		Environmental IndustriesSOFR
5.00%
9.84%1/3/20258,155 8,152 7,892 
Yellowstone Buyer Acquisition, LLC+(2)(3)Consumer Goods: DurableLIBOR
5.75%
10.07%9/13/202739,500 38,851 37,922 
First Lien Debt Total$948,103 $902,720 
Equity Investments (0.0% of fair value)
DBI Holding, LLC^Transportation: Cargo2,961 $— $— 
DBI Holding, LLC^Transportation: Cargo13,996 5,364 — 
Equity Investments Total$5,364 $— 
Total Investments
$953,467 $902,720 
^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility (the "Credit Fund Facility"). Accordingly, such assets are not available to creditors of Credit Fund Sub.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.
(1)    Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2022, the geographical composition of investments as a percentage of fair value was 1.5% in Canada and 98.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR, SOFR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2022. As of December 31, 2022, the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 4.39%, the 90-day LIBOR at 4.77%, the 180-day LIBOR at 5.14%, the 30-day SOFR at 4.36%, and the 90-day SOFR at 4.59%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.
(6)Loans include a credit spread adjustment that ranges from 0.10% to 0.26%.
133

Table of Contents
(7)As of December 31, 2022, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
First Lien Debt – unfunded delayed draw and revolving term loans commitmentsTypeUnused FeePar/ Principal AmountFair Value
ACR Group Borrower, LLCRevolver0.38%$4,515 $(103)
Analogic CorporationRevolver0.50226 (6)
Chartis Holding, LLCRevolver0.502,183 (15)
Chemical Computing Group ULC (Canada)Revolver0.50873 (12)
Diligent CorporationRevolver0.50492 (20)
EPS Nass Parent, Inc.Delayed Draw1.001,380 (63)
EPS Nass Parent, Inc.Revolver0.501,111 (51)
EvolveIP, LLCRevolver0.502,757 (49)
Heartland Home Services, Inc.Revolver0.50771 (7)
HMT Holding Inc.Revolver0.506,173 (241)
Jensen Hughes, Inc.Revolver0.501,455 (51)
K2 Insurance Services, LLCRevolver0.501,170 (11)
KBP Investments, LLCDelayed Draw1.00565 (44)
QW Holding CorporationRevolver0.505,498 (95)
Turbo Buyer, Inc.Revolver0.50933 (17)
VRC Companies, LLCRevolver0.50833 (20)
Welocalize, Inc.Revolver0.503,375 (101)
Welocalize, Inc.Revolver0.502,250 (67)
WRE Holding Corp.Revolver0.501,123 (32)
Total unfunded commitments$37,683 $(1,005)
134

Table of Contents
Consolidated Schedule of Investments as of December 31, 2021
Investments (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity DatePar/ Principal Amount
Amortized Cost (4)
Fair Value (5)
First Lien Debt (100.0% of fair value)
ACR Group Borrower, LLC^+(2)(3)(6)Aerospace & DefenseLIBOR4.25%5.50%3/31/2028$34,477 $33,913 $34,477 
Acrisure, LLC+#(2)(3)Banking, Finance, Insurance & Real EstateLIBOR3.50%3.78%2/13/202725,376 25,353 25,203 
Acrisure, LLC+(2)(3)Banking, Finance, Insurance & Real EstateLIBOR4.25%4.75%2/13/20276,700 6,650 6,687 
Analogic Corporation^+(2)(3)(6)Capital EquipmentLIBOR5.25%6.25%6/22/202419,796 19,781 19,587 
Anchor Packaging, Inc.+#(2)(3)Containers, Packaging & GlassLIBOR4.00%4.10%7/18/202624,472 24,385 24,215 
API Technologies Corp.+#(2)(3)Aerospace & DefenseLIBOR4.25%4.35%5/9/202614,625 14,575 14,251 
Aptean, Inc.+#(2)(3)SoftwareLIBOR4.25%4.35%4/23/202612,157 12,113 12,087 
Avalign Technologies, Inc.+#(2)(3)Healthcare & PharmaceuticalsLIBOR4.50%4.63%12/22/202514,443 14,354 14,320 
Avenu Holdings, LLC+(2)(3)Sovereign & Public FinanceLIBOR5.25%6.25%9/28/202423,350 23,350 23,350 
BMS Holdings III Corp.+(2)(3)Construction & BuildingLIBOR5.50%6.50%9/30/202611,244 11,143 11,071 
Chartis Holding, LLC+(2)(3)(6)Business ServicesLIBOR5.50%6.50%5/1/20256,964 6,964 6,964 
Chemical Computing Group ULC (Canada)^+(2)(3)(6)SoftwareLIBOR4.50%5.50%8/30/202413,912 13,480 13,845 
Chudy Group, LLC^+(2)(3)(6)Healthcare & PharmaceuticalsLIBOR5.75%6.75%6/30/202733,021 32,465 33,657 
Diligent Corporation^+(2)(3)(6)TelecommunicationsLIBOR6.25%7.25%8/4/20259,049 8,816 9,228 
Divisions Holding Corporation+#(2)(3)Business ServicesLIBOR4.75%5.50%5/27/202824,938 24,706 24,953 
DTI Holdco, Inc.+(2)(3)High Tech IndustriesLIBOR4.75%5.75%9/30/202318,495 18,442 18,237 
Eliassen Group, LLC+(2)(3)Business ServicesLIBOR4.50%4.60%11/5/202415,159 15,103 15,152 
EPS Nass Parent, Inc.^+(2)(3)(6)Utilities: ElectricLIBOR5.75%6.75%4/19/202832,846 32,169 32,507 
EvolveIP, LLC^+(2)(3)(6)TelecommunicationsLIBOR5.50%6.50%6/7/202540,196 40,126 39,973 
Exactech, Inc.+#(2)(3)Healthcare & PharmaceuticalsLIBOR3.75%4.75%2/14/202521,307 21,221 21,073 
Excel Fitness Holdings, Inc.+#(2)(3)Hotel, Gaming & LeisureLIBOR5.25%6.25%10/7/202524,500 24,336 24,500 
Frontline Technologies Holdings, LLC+(2)(3)SoftwareLIBOR5.25%6.25%9/18/202314,736 14,269 14,736 
GSM Acquisition Corp.^+(2)(3)(6)Hotel, Gaming & LeisureLIBOR5.00%6.00%11/16/202625,623 25,331 25,396 
Heartland Home Services, Inc+(2)(3)(6)Consumer ServicesLIBOR6.00%7.00%12/15/202617,664 17,664 17,735 
HMT Holding Inc.^+(2)(3)(6)Energy: Oil & GasLIBOR5.75%6.75%11/17/202332,484 32,245 31,086 
Integrity Marketing Acquisition, LLC^+(2)(3)(6)Banking, Finance, Insurance & Real EstateLIBOR5.50%6.25%8/27/202532,853 32,309 32,403 
Jensen Hughes, Inc.+(2)(3)(6)Utilities: ElectricLIBOR4.50%5.50%3/22/202434,392 34,347 33,395 
K2 Insurance Services, LLC+(2)(3)(6)Banking, Finance, Insurance & Real EstateLIBOR5.00%6.00%7/1/202612,929 12,929 12,906 
KAMC Holdings, Inc.+#(2)(3)Energy: ElectricityLIBOR4.00%4.18%8/14/202613,685 13,638 11,450 
KBP Investments, LLC+(2)(3)(6)Beverage, Food & TobaccoLIBOR5.00%5.75%5/25/202736,973 36,599 36,570 
Odyssey Logistics & Technology Corp.+#(2)(3)Transportation: CargoLIBOR4.00%5.00%10/12/20249,605 9,580 9,509 
135

Table of Contents
Consolidated Schedule of Investments as of December 31, 2021
Investments (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity DatePar/ Principal Amount
Amortized Cost (4)
Fair Value (5)
Output Services Group^+(2)(3)Media: Advertising, Printing & PublishingLIBOR4.50%5.50%3/27/2024$19,222 $19,194 $16,467 
Premise Health Holding Corp.+#(2)(3)Healthcare & PharmaceuticalsLIBOR3.50%3.72%7/10/202513,445 13,409 13,419 
Q Holding Company+#(2)(3)AutomotiveLIBOR5.00%6.00%12/31/202321,515 21,421 21,098 
QW Holding Corporation^+(2)(3)(6)Environmental IndustriesLIBOR6.25%7.25%8/31/202414,116 13,887 13,645 
Radiology Partners, Inc.+#(2)(3)Healthcare & PharmaceuticalsLIBOR4.25%4.36%7/9/202527,686 27,603 27,245 
RevSpring Inc.+#(2)(3)Media: Advertising, Printing & PublishingLIBOR4.25%4.47%10/11/202529,149 29,001 29,067 
Striper Buyer, LLC+(2)(3)Containers, Packaging & GlassLIBOR5.50%6.25%12/30/202614,850 14,720 14,850 
Turbo Buyer, Inc.+(2)(3)(6)AutomotiveLIBOR6.00%7.00%12/2/202513,960 13,960 13,661 
U.S. TelePacific Holdings Corp.+(2)(3)TelecommunicationsLIBOR5.50%6.50%5/2/20236,660 6,643 4,995 
USALCO, LLC+(2)(3)Chemicals, Plastics & RubberLIBOR6.00%7.00%10/19/202714,995 14,704 14,704 
VRC Companies, LLC^+(2)(3)(6)Business ServicesLIBOR5.50%6.25%6/29/202726,520 26,103 26,162 
Welocalize, Inc.+(2)(3)(6)Business ServicesLIBOR4.75%5.75%12/23/202434,201 33,868 33,444 
WRE Holding Corp.^+(2)(3)(6)Environmental IndustriesSOFR5.50%6.50%1/3/20258,740 8,724 8,584 
Yellowstone Buyer Acquisition, LLC+(2)(3)Consumer Goods: DurableLIBOR5.75%6.75%9/13/202739,900 39,135 39,095 
First Lien Debt Total$934,728 $926,959 
Equity Investments (0.0% of fair value)
DBI Holding, LLC^Transportation: Cargo2,961 $— $— 
DBI Holding, LLC^Transportation: Cargo13,996 5,364 — 
Equity Investments Total$5,364 $— 
Total Investments$940,092 $926,959 
^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility (the “Credit Fund Facility”). Accordingly, such assets are not available to creditors of Credit Fund Sub or Credit Fund Warehouse II.
+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund or Credit Fund Warehouse II.
# Denotes that all or a portion of the assets are owned by the Credit Fund Warehouse II. Credit Fund Warehouse II has entered into a revolving credit facility (the “Credit Fund Warehouse II Facility”). The lenders of the Credit Fund Warehouse II Facility have a first lien security interest in substantially all of the assets of the Credit Fund Warehouse II. Accordingly, such assets are not available to creditors of Credit Fund or Credit Fund Sub.

(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2021, the geographical composition of investments as a percentage of fair value was 1.5% in Canada and 98.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2021. As of December 31, 2021, the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.22% and the 180-day LIBOR at 0.33%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.
(6)As of December 31, 2021, Credit Fund and Credit Fund Sub had the following unfunded commitments to fund delayed draw and revolving senior secured loans:
136

Table of Contents
First Lien Debt—unfunded delayed draw and revolving term loans commitmentsTypeUnused FeePar/ Principal AmountFair Value
ACR Group Borrower, LLCRevolver0.38 %$7,350 $— 
Analogic CorporationRevolver0.50 847 (9)
Chartis Holding, LLCRevolver0.50 2,183 — 
Chemical Computing Group ULC (Canada)Revolver0.50 873 (4)
Chudy Group, LLCDelayed Draw1.00 5,517 88 
Chudy Group, LLCRevolver0.50 1,379 22 
Diligent CorporationDelayed Draw1.00 1,653 26 
Diligent CorporationRevolver0.50 703 11 
EPS Nass Parent, Inc.Delayed Draw1.00 3,136 (29)
EPS Nass Parent, Inc.Revolver0.50 941 (9)
EvolveIP, LLCRevolver0.50 3,360 (17)
GSM Acquisition Corp.Delayed Draw1.00 4,313 (33)
Heartland Home Services, IncRevolver0.50 746 3 
HMT Holding Inc.Revolver0.50 6,173 (223)
Integrity Marketing Acquisition, LLCDelayed Draw— 7,000 (71)
Integrity Marketing Acquisition, LLCDelayed Draw1.00 4,453 (45)
Jensen Hughes, Inc.Revolver0.50 2,000 (55)
K2 Insurance Services, LLCRevolver0.50 1,170 (2)
KBP Investments, LLCDelayed Draw1.00 503 (5)
KBP Investments, LLCDelayed Draw1.00 2,415 (24)
QW Holding CorporationDelayed Draw1.00 9,338 (162)
QW Holding CorporationRevolver0.50 3,794 (66)
Turbo Buyer, Inc.Revolver0.50 933 (19)
VRC Companies, LLCDelayed Draw0.75 2,521 (30)
VRC Companies, LLCRevolver0.50 833 (10)
Welocalize, Inc.Revolver0.50 3,375 (64)
Welocalize, Inc.Revolver0.50 2,250 (43)
WRE Holding Corp.Revolver0.50 624 (10)
Total unfunded commitments$80,383 $(780)

Debt
The Credit Fund, Credit Fund Sub and Credit Fund Warehouse II are party to separate credit facilities as described below. As of December 31, 2022 and 2021, Credit Fund, Credit Fund Sub, and Credit Fund Warehouse II were in compliance with all covenants and other requirements of their respective credit facility agreements. Below is a summary of the borrowings and repayments under the credit facilities for the respective periods.
Credit Fund
Facility		Credit Fund Sub
Facility		Credit Fund Warehouse II Facility
Outstanding balance as of December 31, 2020$— $420,859 $93,402 
Borrowings— 444,000 52,250 
Repayments— (350,238)(59,622)
Outstanding balance as of December 31, 2021— 514,621 86,030 
Borrowings— 170,000 — 
Repayments— (96,000)(86,030)
Outstanding balance as of December 31, 2022$— $588,621 $— 
Credit Fund Facility. On June 24, 2016, Credit Fund closed on the Credit Fund Facility, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018, June 29, 2018, February 21, 2019, March 20, 2020, February 22, 2021 and May 19, 2022, pursuant to which Credit Fund may from time to time request mezzanine loans from CSL. The maximum principal amount of the Credit Fund Facility is $175,000, subject to availability under the Credit Fund Facility, which is based on certain advance rates multiplied by the value of Credit Fund’s portfolio investments net of certain other indebtedness that Credit Fund may incur in accordance with the terms of the Credit Fund Facility. Proceeds of the
137

Table of Contents
Credit Fund Facility may be used for general corporate purposes, including the funding of portfolio investments. Amounts drawn under the Credit Fund Facility bear interest at the greater of zero and LIBOR plus an applicable spread of 9.00% and such interest payments are made quarterly. The availability period under the Credit Fund Facility will terminate on May 21, 2023, which is also its maturity date upon which Credit Fund is obligated to repay any outstanding borrowings.
    Credit Fund Sub Facility. On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017, August 24, 2018, December 12, 2019, March 11, 2020, May 3, 2021, and May 3, 2022. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $640,000 (the borrowing base as calculated pursuant to the terms of the Credit Fund Sub Facility). The aggregate maximum credit commitment can be increased up to an amount not to exceed $1,400,000, subject to certain restrictions and conditions set forth in the Credit Fund Sub Facility, including adequate collateral to support such borrowings. The Credit Fund Sub Facility has a revolving period through May 23, 2023 and a maturity date of May 23, 2025, which may be extended by mutual agreement of the parties to the Credit Fund Sub Facility. Borrowings under the Credit Fund Sub Facility bear interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or SOFR plus 2.35%. The Credit Fund Sub is also required to pay an undrawn commitment fee of between 0.50% and 0.75% per year depending on the usage of the Credit Fund Sub Facility. Payments under the Credit Fund Sub Facility are made quarterly. Subject to certain exceptions, the Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Sub.
    Credit Fund Warehouse II Facility. On August 16, 2019, Credit Fund Warehouse II closed on a revolving credit facility (the "Credit Fund Warehouse II Facility") with lenders. The Credit Fund Warehouse II Facility provided for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse II Facility was secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse II Facility. The maturity date of the Credit Fund Warehouse II Facility was August 16, 2022 and Credit Fund Warehouse II repaid all outstanding amounts on June 28, 2022. Amounts borrowed under the Credit Fund Warehouse II Facility during the first 12 months bore interest at a rate of LIBOR plus 1.05%, and amounts borrowed in the second 12 months bore interest at LIBOR plus 1.15%. Other amounts borrowed under the Credit Fund Warehouse II Facility bore interest at a rate of LIBOR plus 1.50%.
2019-2 Notes
On May 21, 2019, Credit Fund completed the 2019-2 Debt Securitization. The notes offered in the 2019-2 Debt Securitization (the “2019-2 Notes”) were issued by the 2019-2 Issuer, a wholly owned and consolidated subsidiary of Credit Fund, and were secured by a diversified portfolio of the 2019-2 Issuer consisting primarily of first and second lien senior secured loans. The 2019-2 Debt Securitization was executed through a private placement of the 2019-2 Notes, consisting of:
•$233,000 of Aaa/AAA Class A-1 Notes, which bore interest at the three-month LIBOR plus 1.50%;
•$48,000 of Aa2/AA Class A-2 Notes, which bore interest at the three-month LIBOR plus 2.40%;
•$23,000 of A2/A Class B Notes, which bore interest at the three-month LIBOR plus 3.45%;
•$27,000 of Baa2/BBB- Class C Notes which bore interest at the three-month LIBOR plus 4.55%; and
•$21,000 of Ba2/BB- Class D Notes which bore interest at the three-month LIBOR plus 8.03%.
    The 2019-2 Notes were scheduled to mature on April 15, 2029. Credit Fund received 100% of the preferred interests issued by the 2019-2 Issuer (the “2019-2 Issuer Preferred Interests”) on the closing date of the 2019-2 Debt Securitization in exchange for Credit Fund’s contribution to the 2019-2 Issuer of the initial closing date loan portfolio. The 2019-2 Issuer Preferred Interests did not bear interest and had a nominal value of $48,300 at closing.
The 2019-2 Notes were fully redeemed during the year ended December 31, 2021. As of the redemption date and December 31, 2021, the 2019-2 Issuer was in compliance with all covenants and other requirements of the indenture.

6. MIDDLE MARKET CREDIT FUND II, LLC
Overview
On November 3, 2020, the Company and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in the Company's consolidated financial statements. Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II is managed by
138

Table of Contents
a four-member board, on which the Company and CCLF have equal representation. Establishing a quorum for Credit Fund II's board requires at least one of the Company's representatives and one of CCLF's representatives. The Company and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of its membership interest, each of the Company and CCLF indirectly bears an allocable share of all expenses and other obligations of Credit Fund II.
Credit Fund II's initial portfolio consists of 45 senior secured loans of middle market companies with an aggregate principal balance of approximately $250 million. Credit Fund II's initial portfolio was funded on November 3, 2020 with existing senior secured debt investments contributed by the Company and as part of the transaction, the Company determined that the contribution met the requirements under ASC 860, Transfers and Servicing.
Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of the Company's representatives and one of CCLF's representatives. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund II, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act).
Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, was formed on September 4, 2020. Credit Fund II Sub is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements commencing from the date of its formation. Credit Fund II Sub primarily holds investments in first lien loans of middle market companies, which are pledged as security for the Credit Fund II Senior Notes (see below).
Credit Fund II, the Company and CCLF entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund II (in such capacity, the “Credit Fund II Administrative Agent”), pursuant to which the Credit Fund II Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund II with the approval of the board of managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund II’s allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder.
Credit Fund II Senior Notes
On November 3, 2020 and as amended on December 29, 2021 and June 30, 2022, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the “Credit Fund II Senior Notes”) with lenders. The Credit Fund II Senior Notes provides for secured borrowings totaling $157,500 with two tranches, A-1 and A-2 outstanding. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund II Sub. The maturity date of the Credit Fund II Senior Notes Sub Facility is November 3, 2030. Amounts issued for the Class A-1 notes totaled $147,500 and bear interest at a rate of Term SOFR plus 2.85% (LIBOR plus 2.70% prior to the June 30, 2022 amendment), and amounts issued for the Class A-2 notes totaled $10,000 and bear interest at Term SOFR plus 3.35% (LIBOR plus 3.20% prior to the June 30, 2022 amendment). The A-1 Notes were rated AAA, and the A-2 Notes were rated AA by DBRS Morningstar. The terms of the Credit Fund II Senior Notes provide that as loans pay down, up to $100,000 is available from principal proceeds for reinvestment ($50,000 prior to the June 30, 2022 amendment), and then the investment principal proceeds are used to directly pay down the principal balance on the Credit Fund II Senior Notes. As of December 31, 2022 and 2021, Credit Fund II Sub was in compliance with all covenants and other requirements of its respective credit agreements.
Selected Financial Data
Since inception of Credit Fund II and through December 31, 2022, the Company and CCLF each made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. Below is certain summarized consolidated information for Credit Fund II as of December 31, 2022 and 2021.
139

Table of Contents
As of December 31,
20222021
ASSETS
Investments, at fair value (amortized cost of $250,134 and $238,615, respectively)
$244,739 $239,289 
Cash and cash equivalents(1)
2,078 10,092 
Other assets5,825 5,606 
Total assets$252,642 $254,987 
LIABILITIES AND MEMBERS’ EQUITY
Notes payable, net of unamortized debt issuance costs of $783 and $802, respectively
$156,717 $156,698 
Other liabilities9,212 5,557 
Total members' equity (2)
86,713 92,732 
Total liabilities and members’ equity$252,642 $254,987 
(1) As of December 31, 2022 and 2021, all of Credit Fund II’s cash and cash equivalents was restricted.
(2) As of December 31, 2022 and 2021, the fair value of Company's ownership interest in the members' equity was $72,957 and $77,958, respectively.
For the Year Ended December 31,
20222021
Total investment income$20,595 $18,822 
Expenses
Interest and credit facility expenses7,403 4,695 
Other expenses842 897 
Total expenses8,245 5,592 
Net investment income (loss)12,350 13,230 
Net change in unrealized appreciation (depreciation) on investments(6,069)(440)
Net increase in members’ equity resulting from operations$6,281 $12,790 
Below is a summary of Credit Fund II’s portfolio, followed by a listing of the loans in Credit Fund II’s portfolio as of December 31, 2022 and 2021:
As of December 31,
 20222021
Senior secured loans(1)
$253,310 $240,878 
Weighted average yields of senior secured loans based on amortized cost(2)
11.1 %7.3 %
Weighted average yields of senior secured loans based on fair value(2)
11.3 %7.2 %
Number of portfolio companies in Credit Fund II35 36 
Average amount per portfolio company(1)
$7,237 $6,691 
Number of loans on non-accrual status$— $— 
Percentage of portfolio at floating interest rates(3)(4)
97.9 %97.7 %
Percentage of portfolio at fixed interest rates(4)
2.1 %2.3 %
Fair value of loans with PIK provisions$10,787 $17,453 
Percentage of portfolio with PIK provisions(4)
4.4 %7.3 %
(1)At par/principal amount.
(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2022 and 2021. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and
140

Table of Contents
second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(3)Floating rate debt investments are generally subject to interest rate floors.
(4)Percentages based on fair value.

141

Table of Contents

Consolidated Schedule of Investments as of December 31, 2022
Investments (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity Date
Par/ Principal Amount
Amortized Cost (4)
Fair Value (5)
First Lien Debt (89.9% of fair value)
Airnov, Inc.^(2)(3)Containers, Packaging & GlassLIBOR
5.00%
9.75%12/19/2025$9,844 $9,833 $9,787 
Alpine Acquisition Corp II^(2)(3)(7)Transportation: CargoSOFR
5.50%
9.76%11/30/20263,292 3,188 3,170 
American Physician Partners, LLC^(2)(3)Healthcare & PharmaceuticalsSOFR
6.75%,
3.50% PIK
14.67%2/15/20239,074 9,074 7,833 
Appriss Health, LLC^(2)(3)Healthcare & PharmaceuticalsLIBOR
7.25%
11.54%5/6/20277,502 7,375 7,214 
Apptio, Inc.^(2)(3)SoftwareLIBOR
6.00%
9.94%1/10/20255,357 5,314 5,357 
Ascend Buyer, LLC^(2)(3)(7)Containers, Packaging & GlassSOFR
6.25%
10.67%9/30/20289,077 8,924 8,917 
Aurora Lux FinCo S.Á.R.L. (Luxembourg)^(2)(3)SoftwareLIBOR
6.00%
10.32%12/24/20264,311 4,243 4,074 
BMS Holdings III Corp.^(2)(3)Construction & BuildingLIBOR
5.50%
10.23%9/30/20263,241 3,194 3,183 
Chartis Holding, LLC^(2)(3)Business ServicesLIBOR
5.00%
9.77%5/1/20259,822 9,810 9,757 
Comar Holding Company, LLC^(2)(3)Containers, Packaging & GlassLIBOR
5.75%
10.47%6/18/20248,621 8,573 8,334 
Cority Software Inc. (Canada)^(2)(3)SoftwareSOFR
5.50%
9.17%7/2/20268,623 8,527 8,539 
Dwyer Instruments, Inc.^(2)(3)Capital EquipmentLIBOR
6.00%
10.74%7/21/20279,914 9,863 9,761 
EvolveIP, LLC^(2)(3)(7)TelecommunicationsSOFR
5.50%
10.09%6/7/20258,621 8,617 8,469 
Harbour Benefit Holdings, Inc.^(2)(3)Business ServicesLIBOR
5.25%
9.95%12/13/20249,848 9,828 9,789 
Hoosier Intermediate, LLC^(2)(3)Healthcare & PharmaceuticalsLIBOR
5.50%
10.11%11/15/20286,447 6,261 6,094 
Integrity Marketing Acquisition, LLC^(2)(3)Diversified Financial ServicesLIBOR
6.05%
9.95%8/27/20254,870 4,717 4,708 
Integrity Marketing Acquisition, LLC^(2)(3)Diversified Financial ServicesLIBOR
6.02%
10.57%8/27/20254,534 4,369 4,371 
K2 Insurance Services, LLC^(2)(3)Diversified Financial ServicesLIBOR
5.00%
9.73%7/1/20268,922 8,833 8,836 
Material Holdings, LLC^(2)(3)Business ServicesSOFR
6.00%
10.67%8/19/20277,900 7,829 7,547 
Maverick Acquisition, Inc.^(2)(3)Aerospace & DefenseLIBOR
6.25%
10.98%6/1/20277,900 7,760 6,563 
NMI AcquisitionCo, Inc.^(2)(3)High Tech IndustriesLIBOR
5.75%
10.13%9/6/20258,617 8,617 8,394 
PF Atlantic Holdco 2, LLC^(2)(3)Leisure Products & ServicesLIBOR
5.50%
10.25%11/12/20279,950 9,657 9,776 
QW Holding Corporation^(2)(3)Environmental IndustriesLIBOR
5.50%
9.64%8/31/20269,947 9,808 9,775 
Riveron Acquisition Holdings, Inc.^(2)(3)Diversified Financial ServicesLIBOR
5.75%
10.48%5/22/20258,090 8,018 8,090 
RSC Acquisition, Inc.^(2)(3)(7)Diversified Financial ServicesSOFR
5.50%
9.83%11/1/20268,315 8,215 7,938 
TCFI Aevex LLC^(2)(3)Aerospace & DefenseLIBOR
6.00%
10.38%3/18/20261,684 1,664 1,539 
Turbo Buyer, Inc.^(2)(3)AutomotiveLIBOR
6.00%
11.15%12/2/20258,009 7,901 7,866 
U.S. Legal Support, Inc.^(2)(3)(7)Business ServicesSOFR
5.75%
10.33%11/30/20246,170 6,163 6,057 
US INFRA SVCS Buyer, LLC^(2)(3)Environmental IndustriesLIBOR
6.50%,
0.25% PIK
11.47%4/13/20263,113 3,075 2,954 
Westfall Technik, Inc.^(2)(3)Chemicals, Plastics & RubberSOFR
6.25%
10.83%9/13/20246,416 6,364 6,280 
Wineshipping.com LLC^(2)(3)Beverage & FoodLIBOR
5.75%
10.15%10/29/20279,950 9,608 9,161 
First Lien Debt Total
$225,222 $220,133 
Second Lien Debt (10.1% of fair value)
142

Table of Contents
Consolidated Schedule of Investments as of December 31, 2022
Investments (1)
Footnotes
Industry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity Date
Par/ Principal Amount
Amortized Cost (4)
Fair Value (5)
AI Convoy S.A.R.L (United Kingdom)^(2)(3)Aerospace & DefenseLIBOR
8.25%
12.92%1/17/2028$5,514 $5,425 $5,679 
AP Plastics Acquisition Holdings, LLC^(2)(3)Chemicals, Plastics & RubberLIBOR
7.50%
11.85%8/10/20294,500 4,419 4,318 
AQA Acquisition Holdings, Inc.^(2)(3)High Tech IndustriesLIBOR
7.50%
12.23%3/3/20295,000 4,893 4,760 
Quartz Holding Company^(2)SoftwareLIBOR
8.00%
12.38%4/2/20274,850 4,792 4,656 
World 50, Inc.^(6)Business ServicesFIXED
11.50%
11.50%1/9/20275,465 5,383 5,193 
Second Lien Debt Total
$24,912 $24,606 
Total Investments
$250,134 $244,739 
^ Denotes that all or a portion of the assets are owned by Credit Fund II Sub. Credit Fund II Sub has entered into the Credit Fund II Sub Notes. The lenders of the Credit Fund II Sub Notes have a first lien security interest in substantially all of the assets of Credit Fund II Sub. Accordingly, such assets are not available to creditors of Credit Fund II.
(1)    Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2022, the geographical composition of investments as a percentage of fair value was 3.5% in Canada, 1.7% in Luxembourg, 2.3% in the United Kingdom and 92.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR, SOFR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2022. As of December 31, 2022, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 4.39%, the 90-day LIBOR at 4.77%, the 180-day LIBOR at 5.14%, the 30-day SOFR at 4.36%, and the 90-day SOFR at 4.59%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund II, pursuant to Credit Fund II’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to the consolidated financial statements.
(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.
(7)Loans include a credit spread adjustment that ranges from 0.10% to 0.26%.

143

Table of Contents

Consolidated Schedule of Investments as of December 31, 2021
Investments (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity DatePar/ Principal Amount
Amortized Cost (4)
Fair Value (5)
First Lien Debt (87.0% of fair value)
Airnov, Inc.^(2)(3)Containers, Packaging & GlassLIBOR5.00%6.00%12/19/2025$9,946 $9,930 $9,946 
American Physician Partners, LLC^(2)(3)Healthcare & PharmaceuticalsLIBOR
6.75%, 1.50% PIK
9.25%2/21/20228,415 8,415 8,415 
Appriss Health, LLC^(2)(3)Healthcare & PharmaceuticalsLIBOR7.25%8.25%5/6/20271,197 1,178 1,198 
Apptio, Inc.^(2)(3)SoftwareLIBOR7.25%8.25%1/10/20255,357 5,295 5,357 
Aurora Lux FinCo S.Á.R.L. (Luxembourg)^(2)(3)SoftwareLIBOR6.00%7.00%12/24/20264,355 4,273 3,924 
Avenu Holdings, LLC^(2)(3)Sovereign & Public FinanceLIBOR5.25%6.25%9/28/2024987 980 987 
BMS Holdings III Corp.^(2)(3)Construction & BuildingLIBOR5.50%6.50%9/30/20263,275 3,216 3,224 
Captive Resources Midco, LLC^(2)(3)Banking, Finance, Insurance & Real EstateLIBOR5.50%6.25%5/31/20278,193 8,108 8,147 
Chartis Holding, LLC^(2)(3)Business ServicesLIBOR5.50%6.50%5/1/20259,924 9,907 9,924 
Comar Holding Company, LLC^(2)(3)Containers, Packaging & GlassLIBOR5.75%6.75%6/18/20248,710 8,632 8,536 
Cority Software Inc. (Canada)^(2)(3)SoftwareLIBOR5.00%6.00%7/2/20268,712 8,591 8,707 
Dwyer Instruments, Inc^(2)(3)Capital EquipmentLIBOR5.50%6.25%7/21/202710,000 9,939 9,974 
Ethos Veterinary Health LLC^(2)(3)Consumer ServicesLIBOR4.75%4.85%5/15/20268,134 8,080 8,134 
EvolveIP, LLC^(2)(3)TelecommunicationsLIBOR5.50%6.50%6/7/20258,710 8,701 8,666 
Harbour Benefit Holdings, Inc.^(2)(3)Business ServicesLIBOR5.25%6.25%12/13/20244,717 4,707 4,669 
K2 Insurance Services, LLC^(2)(3)Banking, Finance, Insurance & Real EstateLIBOR5.00%6.00%7/1/20269,012 8,914 8,998 
Kaseya, Inc.^(2)(3)High Tech IndustriesLIBOR
5.50%, 1.00% PIK
7.50%5/3/20259,092 8,987 9,038 
Material Holdings, LLC^(2)(3)Business ServicesLIBOR5.75%6.50%8/19/20277,980 7,896 7,891 
Maverick Acquisition, Inc.^(2)(3)Aerospace & DefenseLIBOR6.00%7.00%6/1/20277,980 7,814 7,808 
National Technical Systems, Inc.^(2)(3)Aerospace & DefenseLIBOR5.50%6.50%6/12/20238,733 8,720 8,733 
NMI AcquisitionCo, Inc.^(2)(3)High Tech IndustriesLIBOR5.75%6.50%9/6/20258,708 8,680 8,601 
Redwood Services Group, LLC^(2)(3)High Tech IndustriesLIBOR6.00%7.00%6/6/20248,736 8,724 8,737 
Riveron Acquisition Holdings, Inc.^(2)(3)Banking, Finance, Insurance & Real EstateLIBOR5.75%6.75%5/22/20258,173 8,074 8,173 
RSC Acquisition, Inc.^(2)(3)Banking, Finance, Insurance & Real EstateLIBOR5.50%6.25%11/1/20268,401 8,277 8,434 
Superior Health Linens, LLC^(2)(3)Business ServicesLIBOR6.50%7.50%3/31/20226,875 6,875 6,875 
TCFI Aevex LLC^(2)(3)Aerospace & DefenseLIBOR6.00%7.00%3/18/20261,701 1,676 1,458 
Turbo Buyer, Inc.^(2)(3)AutomotiveLIBOR6.00%7.00%12/2/20258,091 7,950 7,929 
US INFRA SVCS Buyer, LLC^(2)(3)Environmental IndustriesLIBOR6.50%7.50%4/13/20263,267 3,217 3,189 
144

Table of Contents
Consolidated Schedule of Investments as of December 31, 2021
Investments (1)
FootnotesIndustry
Reference Rate (2)
Spread (2)
Interest Rate (2)
Maturity DatePar/ Principal Amount
Amortized Cost (4)
Fair Value (5)
USLS Acquisition, Inc.^(2)(3)Business ServicesLIBOR5.50%6.50%11/30/2024$6,234 $6,223 $6,165 
Westfall Technik, Inc.^(2)(3)Chemicals, Plastics & RubberLIBOR5.75%6.75%9/13/20246,418 6,337 6,359 
First Lien Debt Total$208,316 $208,196 
Second Lien Debt (13.0%) of fair value)
AI Convoy S.A.R.L (United Kingdom)^(2)(3)Aerospace & DefenseLIBOR8.25%9.25%1/17/2028$5,514 $5,413 $5,720 
AP Plastics Acquisition Holdings, LLC^(2)(3)Chemicals, Plastics & RubberLIBOR7.50%8.25%8/10/20294,500 4,410 4,526 
AQA Acquisition Holdings, Inc.^(2)(3)High Tech IndustriesLIBOR7.50%8.00%3/3/20295,000 4,881 5,004 
Quartz Holding Company^(2)(3)SoftwareLIBOR8.00%8.10%4/2/20274,852 4,781 4,852 
Tank Holding Corp.^(2)(3)Capital EquipmentLIBOR8.25%8.35%3/26/20275,514 5,446 5,569 
World 50, Inc.^(6)Business ServicesFIXED11.50%11.50%1/9/20275,465 5,368 5,422 
Second Lien Debt Total$30,299 $31,093 
Total Investments$238,615 $239,289 
^ Denotes that all or a portion of the assets are owned by Credit Fund II Sub. Credit Fund II Sub has entered into the Credit Fund II Sub Notes. The lenders of the Credit Fund II Sub Notes have a first lien security interest in substantially all of the assets of Credit Fund II Sub. Accordingly, such assets are not available to creditors of Credit Fund II.
(1)    Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2021, the geographical composition of investments as a percentage of fair value was 3.6% in Canada, 1.6% in Luxembourg, 2.4% in the United Kingdom and 92.4% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.
(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2021. As of December 31, 2021, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 0.10%, the 90-day LIBOR at 0.22% and the 180-day LIBOR at 0.33%.
(3)Loan includes interest rate floor feature, which is generally 1.00%.
(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.
(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund II, pursuant to Credit Fund II’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.
(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.
7. BORROWINGS
The Company is party to the Credit Facility and, until its termination on December 11, 2020, the SPV was party to the SPV Credit Facility, as described below. In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 150% after such borrowing. For the purposes of the asset coverage ratio under the Investment Company Act, the Preferred Stock, as defined in Note 1, is considered a senior security and is included in the denominator of the calculation. As of December 31, 2022, asset coverage was 176.79% and the Company was in compliance with all covenants and other requirements of the Credit Facility. As of December 31, 2021, asset coverage was 181.94%, and the Company and the SPV were in compliance with all covenants and other requirements of their respective credit facility agreements.
145

Table of Contents
Below is a summary of the borrowings and repayments under the credit facilities for the years ended December 31, 2022, 2021 and 2020, and the outstanding balances under the credit facilities for the respective periods.
For the Year Ended and as of December 31,
202220212020
Outstanding borrowing, beginning of period$407,655 $347,949 $616,543 
Borrowings372,246 419,205 452,833 
Repayments(332,758)(357,500)(725,469)
Foreign currency translation(6,702)(1,999)4,042 
Outstanding borrowing, end of period$440,441 $407,655 $347,949 

SPV Credit Facility
On May 24, 2013, the SPV closed on the SPV Credit Facility, which was subsequently amended on June 30, 2014, June 19, 2015, June 9, 2016, May 26, 2017 and August 9, 2018. On December 11, 2020, the SPV repaid all outstanding amounts under the SPV Credit Facility and the facility was terminated. The SPV Credit Facility provided for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $275,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit Facility had a revolving period through May 21, 2021 and a maturity date of May 23, 2023. Borrowings under the SPV Credit Facility bore interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.00% per year. The SPV was also required to pay an undrawn commitment fee of between 0.50% and 0.75% per year depending on the drawings under the SPV Credit Facility. Payments under the SPV Credit Facility were made quarterly. The lenders had a first lien security interest on substantially all of the assets of the SPV.
Credit Facility
The Company closed on the Credit Facility on March 21, 2014, which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018, June 14, 2019, November 8, 2019, October 28, 2020, October 11, 2021 and May 25, 2022. The maximum principal amount of the Credit Facility is $688,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either (i) a term benchmark rate of the Adjusted Term SOFR Rate, the Adjusted Euribor Rate, or the applicable Local Rate, as the case may be, or (ii) an Alternate Base Rate (which is the highest of (a) the Prime Rate, (b) the NYFRB Rate plus 0.50%, or (c) the Adjusted Term SOFR Rate for one month plus 1.00%) plus an applicable margin, each capitalized term as defined in the Credit Facility. The applicable margin for a term benchmark rate loan will be up to 1.875% and for an Alternate Base Rate loan will be up to 0.875%, in each case depending on the level of the Gross Borrowing Base compared to the Combined Debt Amount. Prior to the May 25, 2022 amendment, amounts drawn under the Credit Facility bore interest at either LIBOR plus an applicable spread of 2.25%, or an alternative base rate (which is the highest of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the term benchmark rate or the Alternative Base Rate at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on May 25, 2026 (October 28, 2024 prior to the May 25, 2022 amendment) and the Credit Facility will mature on May 25, 2027 (October 28, 2025 prior to the May 25, 2022 amendment). During the period from May 25, 2026 to May 25, 2027, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial
146

Table of Contents
covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature. As of December 31, 2022 and December 31, 2021, the Company was in compliance with all covenants and other requirements of the Credit Facility.
Summary of the Credit Facility
The Credit Facility consisted of the following as of December 31, 2022 and 2021:
 December 31, 2022
 Total
Facility		Borrowings
Outstanding
Unused 
Portion (1)
Amount Available (2)
Credit Facility$688,000 $440,441 $247,559 $247,902 
Total$688,000 $440,441 $247,559 $247,902 
 December 31, 2021
 Total
Facility		Borrowings
Outstanding
Unused 
Portion (1)
Amount Available (2)
Credit Facility$688,000 $407,655 $280,345 $280,706 
Total$688,000 $407,655 $280,345 $280,706 
(1)The unused portion is the amount upon which commitment fees are based.
(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.
For the years ended December 31, 2022, 2021 and 2020, the components of interest expense and credit facility fees were as follows:
 For the years ended December 31,
 202220212020
Interest expense$15,463 $9,219 $16,127 
Facility unused commitment fee1,129 1,161 1,766 
Amortization of deferred financing costs855 763 1,886 
Other fees— — 109 
Total interest expense and credit facility fees$17,447 $11,143 $19,888 
Cash paid for interest expense$15,528 $9,890 $17,759 
Average principal debt outstanding$399,877 $382,126 $543,099 
Weighted average interest rate3.81 %2.38 %2.92 %
    As of December 31, 2022 and 2021, the components of interest and credit facility fees payable were as follows:
As of December 31,
20222021
Interest expense payable$1,131 $264 
Unused commitment fees payable— 3 
Other credit facility fees payable— — 
Interest and credit facility fees payable$1,131 $267 
Weighted average interest rate
(based on floating benchmark rates)		6.04 %2.39 %
147

Table of Contents
8. NOTES PAYABLE
    Senior Notes
    On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.750% Senior Unsecured Notes due December 31, 2024. Interest is payable quarterly, beginning March 31, 2020. On December 11, 2020, the Company issued an additional $75.0 million aggregate principal amount of senior unsecured notes due December 31, 2024. The 2020 Notes bear interest an interest rate of 4.500% and interest is payable quarterly, beginning December 31, 2020. The carrying value of the Senior Notes (after debt issuance costs) as of December 31, 2022 and 2021 are $189,722 and $189,584, respectively. The carrying value is presented net of unamortized debt issuance costs of $278 and $416 as of December 31, 2022 and 2021, respectively.
The interest rate on the Senior Notes is subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event that, subject to certain exceptions, the Senior Notes cease to have an investment grade rating. The Company is obligated to offer to repay the notes at par if certain change in control events occur. The Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. Interest expense on the Senior Notes during the years ended December 31, 2022 and 2021 was $8,838 and $8,837, respectively.
    The note purchase agreement, as supplemented by the first supplement, for the Senior Notes contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act and a regulated investment company under the Code, minimum asset coverage ratio and interest coverage ratio, and prohibitions on certain fundamental changes at the Company or any subsidiary guarantor, as well as customary events of default with customary cure and notice, including, without limitation, nonpayment, breach of covenant, material breach of representation or warranty under the note purchase agreement, cross-acceleration under other indebtedness of the Company or certain significant subsidiaries, certain judgments and orders, and certain events of bankruptcy. As of December 31, 2022 and 2021, the Company was in compliance with these terms and conditions.
    2015-1R Notes
On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly-owned and consolidated subsidiary of the Company. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of:
•$160,000 of Aaa/AAA Class A-1A Notes;
•$40,000 of Aaa/AAA Class A-1B Notes;
•$27,000 of Aaa/AAA Class A-1C Notes; and
•$46,000 of Aa2 Class A-2 Notes.
    The 2015-1 Notes were issued at par and were scheduled to mature on July 15, 2027. The Company received 100% of the preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the 2015-1 Issuer of the initial closing date loan portfolio. The 2015-1 Issuer Preferred Interests do not bear interest and had a nominal value of $125,900 at closing. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in these consolidated financial statements. The 2015-1 Issuer Preferred Interests were eliminated in consolidation.
On the closing date of the 2015-1 Debt Securitization, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1 Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility (which terminated on December 11, 2020) and the Credit Facility. As part of the 2015-1 Debt Securitization, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement.
On August 30, 2018, the Company and the 2015-1 Issuer closed the 2015-1 Debt Securitization Refinancing. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, among other things:
(a) refinanced the issued Class A-1A Notes by redeeming in full the Class A-1A Notes and issuing new AAA Class A-1-1-R Notes in an aggregate principal amount of $234,800 which bear interest at the three-month LIBOR plus 1.55%;
148

Table of Contents
(b) refinanced the issued Class A-1B Notes by redeeming in full the Class A-1B Notes and issuing new AAA Class A-1-2-R Notes in an aggregate principal amount of $50,000 which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter;
(c) refinanced the issued Class A-1C Notes by redeeming in full the Class A-1C Notes and issuing new AAA Class A-1-3-R Notes in an aggregate principal amount of $25,000 which bear interest at 4.56%;
(d) refinanced the issued Class A-2 Notes by redeeming in full the Class A-2 Notes and issuing new Class A-2-R Notes in an aggregate principal amount of $66,000 which bear interest at the three-month LIBOR plus 2.20%;
(e) issued new single-A Class B Notes and BBB- Class C Notes in aggregate principal amounts of $46,400 and $27,000, respectively, which bear interest at the three-month LIBOR plus 3.15% and the three-month LIBOR plus 4.00%, respectively;
(f) reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 from a nominal value of $125,900 to approximately $104,525 at close; and
(g) extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively.
Following the 2015-1 Debt Securitization Refinancing, the Company retained the 2015-1 Issuer Preferred Interests. The 2015-1R Notes in the 2015-1 Debt Securitization Refinancing were issued by the 2015-1 Issuer and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.
On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1R Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization Refinancing, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1R Notes, the Company made customary representations, warranties and covenants in the purchase agreement.
During the reinvestment period, pursuant to the indenture governing the 2015-1R Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager of the 2015-1 Issuer and in accordance with the Company’s investment strategy.
The Investment Adviser serves as collateral manager to the 2015-1 Issuer under a collateral management agreement (the “Collateral Management Agreement”). Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the 2015-1 Issuer Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the 2015-1 Issuer Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the year ended December 31, 2022 and 2021. Any such waived fees may not be recaptured by the Investment Adviser.
Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization Refinancing, the Company has agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of December 31, 2022, the Company was in compliance with its undertaking.
The 2015-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2015-1 Issuer.    
As of December 31, 2022, there were 78 first lien and second lien senior secured loans with a total fair value of approximately $555,338 and cash of $14,412 securing the 2015-1R Notes. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1R Notes.
149

Table of Contents
The carrying value of the 2015-1R Notes as of December 31, 2022 and 2021 are $447,029 and $446,783, respectively. The carrying value is presented net of unamortized debt issuance costs of $2,171 and $2,417 as of December 31, 2022 and 2021, respectively.
For the years ended December 31, 2022 and 2021, the effective annualized weighted average interest rates, which include amortization of debt issuance costs on the 2015-1R Notes, were 3.91% and 2.37%, respectively, based on floating LIBOR rates. As of December 31, 2022 and 2021, the weighted average interest rates were 6.00% and 2.27%, respectively, based on floating LIBOR rates.
As of December 31, 2022 and 2021, $5,618 and $2,200, respectively, of interest expense was included in interest and credit facility fees payable. For the years ended December 31, 2022, 2021 and 2020, the components of interest expense on the 2015-1R Notes were as follows:
 For the years ended December 31,
 202220212020
Interest expense$17,535 $10,526 $13,802 
Amortization of deferred financing costs141 247 247 
Total interest expense $17,676 $10,773 $14,049 
Cash paid for interest expense$14,117 $10,628 $15,390 
9. COMMMITMENTS AND CONTINGENCIES
A summary of significant contractual payment obligations was as follows as of December 31, 2022 and 2021:
As of December 31,
Payment Due by Period20222021
Less than 1 Year$— $— 
1-3 Years190,000 190,000 
3-5 Years440,441 407,655 
More than 5 Years449,200 449,200 
Total$1,079,641 $1,046,855 
In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial statements as of December 31, 2022 and 2021 for any such exposure.
The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:
 Par Value as of December 31,
 20222021
Unfunded delayed draw commitments$83,743 $112,985 
Unfunded revolving term loan commitments74,463 67,513 
Total unfunded commitments$158,206 $180,498 
10. NET ASSETS
The Company has the authority to issue 198,000,000 shares of common stock, $0.01 per share par value.
Cumulative Convertible Preferred Stock
On May 5, 2020, the Company issued and sold 2,000,000 shares of Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share. The Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference”) plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable
150

Table of Contents
in cash, or at the Company’s option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock. After May 5, 2027, the dividend rate will increase annually, in each case by 1.00% per annum.
    The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's Articles Supplementary. The conversion price as of December 31, 2022 was $9.31. At any time after May 5, 2023, the Company, with the approval of the Board of Directors, including a majority of the Independent Directors, will have the option to redeem all of the Preferred Stock for cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends. The holders of the Preferred Stock will have the right to convert all or a portion of their shares of Preferred Stock prior to the date fixed for such redemption. At any time after May 5, 2027, the holders of the Preferred Stock will have the option to require the Company to redeem any or all of the then-outstanding Preferred Stock upon 90 days’ notice. The form of consideration used in any such redemption is at the option of the Board of Directors, including a majority of the Independent Directors, and may be cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends, or shares of common stock. Holders also have the right to redeem the Preferred Stock upon a Change in Control (as defined in the Article Supplementary).
The following table summarizes the Company’s dividends declared on its preferred stock for the years ended December 31, 2022 and 2021. Unless otherwise noted, dividends were declared and paid, or are payable, in cash.
Date DeclaredRecord DatePayment DatePer Share Amount
March 31, 2021March 31, 2021March 31, 2021$0.438 
June 30, 2021June 30, 2021June 30, 20210.438 
September 30, 2021September 30, 2021September 30, 20210.438 
December 29, 2021December 31, 2021December 31, 20210.438 
Total$1.752 
March 25, 2022March 31, 2022March 31, 20220.438 
June 27, 2022June 30, 2022June 30, 20220.438 
September 22, 2022September 30, 2022September 30, 20220.438 
December 16, 2022December 30, 2022December 31, 20220.438 
Total$1.752 

Company Stock Repurchase Plan
On August 1, 2022, the Company's Board of Directors approved the continuation of the Company's stock repurchase program (the “Company Stock Repurchase Program”) until November 5, 2023, or until the approved dollar amount has been used to repurchase shares of common stock, and increased the size of the Company Stock Repurchase Program by $50 million to an aggregate amount of $200 million. This program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018. Since the inception of the Company Stock Repurchase Program through December 31, 2022, the Company has repurchased 11,508,523 shares of the Company's common stock at an average cost of $13.36 per share, or $153,744 in the aggregate, resulting in accretion to net assets per share of $0.64.
151

Table of Contents
The following table summarizes capital activity during the year ended December 31, 2022:
 Preferred Stock
 
Common Stock
Capital in Excess of Par ValueOffering CostsAccumulated Net Investment Income (Loss)Accumulated Net Realized Gain (Loss)Accumulated Net Unrealized Appreciation (Depreciation)Total Net Assets
 SharesAmountSharesAmount
Balance, January 1, 20222,000,000 $50,000 53,142,454 $532 $1,052,427 $(1,633)$19,562 $(123,297)$(48,787)$948,804 
Repurchase of common stock— — (2,082,318)(21)(28,436)— — — — (28,457)
Net investment income (loss)— — — — — — 104,042 — — 104,042 
Net realized gain (loss)— — — — — — — 523 — 523 
Net change in unrealized appreciation (depreciation)— — — — — — — — (18,928)(18,928)
Dividends declared on common stock and preferred stock— — — — — — (88,561)— — (88,561)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP— — — — (1,767)— 8,054 (6,287)— — 
Balance, December 31, 20222,000,000 $50,000 51,060,136 $511 $1,022,224 $(1,633)$43,097 $(129,061)$(67,715)$917,423 
The following table summarizes capital activity during the year ended December 31, 2021:
 Preferred Stock
 
Common Stock
Capital in Excess of Par ValueOffering CostsAccumulated Net Investment Income (Loss)Accumulated Net Realized Gain (Loss)Accumulated Net Unrealized Appreciation (Depreciation)Total Net Assets
 SharesAmountSharesAmount
Balance, January 1, 20212,000,000 $50,000 55,320,309 $553 $1,081,436 $(1,633)$14,568 $(140,133)$(103,428)$901,363 
Repurchase of common stock— — (2,177,855)(21)(28,418)— — — — (28,439)
Net investment income (loss)— — — — — — 86,851 — — 86,851 
Net realized gain (loss)— — — — — — — 18,861 — 18,861 
Net change in unrealized appreciation (depreciation)— — — — — — — — 54,641 54,641 
Dividends declared on common stock and preferred stock— — — — — — (84,473)— — (84,473)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP— — — — (591)— 2,616 (2,025)— — 
Balance, December 31, 20212,000,000 $50,000 53,142,454 $532 $1,052,427 $(1,633)$19,562 $(123,297)$(48,787)$948,804 
152

Table of Contents

The following table summarizes capital activity during the year ended December 31, 2020:
Preferred Stock
 
Common Stock
Capital in Excess of Par ValueOffering CostsAccumulated 
Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)Accumulated Net Unrealized Appreciation (Depreciation)Total Net Assets
SharesAmountSharesAmount
Balance, January 1, 2020— $— 57,763,811 $578 $1,109,238 $(1,633)$10,368 $(82,654)$(79,426)$956,471 
Issuance of Preferred Stock2,000,000 50,000 — — — — — — — 50,000 
Net investment income (loss)— — — — — — 88,807 — — 88,807 
Net realized gain (loss)— — — — — — — (57,976)— (57,976)
Net change in unrealized appreciation (depreciation)— — — — — — — — (24,002)(24,002)
Dividends declared on common stock and preferred stock— — — — — — (84,683)— — (84,683)
Repurchase of common stock— — (2,443,502)(25)(27,229)— — — — (27,254)
Tax reclassification of stockholders’ equity in accordance with U.S. GAAP— — — — (573)— 76 497 — — 
Balance, December 31, 20202,000,000 $50,000 55,320,309 $553 $1,081,436 $(1,633)$14,568 $(140,133)$(103,428)$901,363 

There were no shares of common stock issued related to capital activity during the years ended December 31, 2022, 2021 and 2020.
The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per common share were calculated by dividing net increase (decrease) in net assets resulting from operations, less preferred dividends, by the weighted-average number of shares of common stock outstanding for the year. Diluted earnings per share gives effect to all dilutive potential shares of common stock outstanding using the if-converted method for the convertible Preferred Stock. Diluted earnings per share excludes all dilutive potential shares of common stock if their effect is anti-dilutive. The convertible Preferred Stock was not included in the calculation of diluted earnings per share for the year ended December 31, 2021 or for the year ended December 31, 2020 because it would have had an anti-dilutive effect.
153

Table of Contents
Basic and diluted earnings per common share were as follows:
For the years ended December 31,
202220212020
BasicDilutedBasicDilutedBasicDiluted
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders$82,137 $85,637 $156,853 $160,353 $4,554 $4,554 
Weighted-average shares of common stock outstanding52,112,420 57,482,099 54,244,432 59,531,683 56,421,137 56,421,137 
Basic and diluted earnings per share$1.58 $1.49 $2.89 $2.69 $0.08 $0.08 
Effective with the third quarter 2020 dividend, the Company updated its dividend policy such that the base dividend was $0.32 per share of common stock. Effective with the third quarter 2022 dividend, the Company updated its dividend policy such that the base dividend was $0.34 per share of common stock. Effective with the fourth quarter 2022 dividend, the Company updated its dividend policy such that the base dividend is $0.36 per share of common stock. The Company's dividend policy is subject to change by the Board of Directors in its sole discretion at any time.
The following table summarizes the Company’s dividends declared during the three most recent fiscal years:
Date DeclaredRecord DatePayment DatePer Share Amount 
February 24, 2020March 31, 2020April 17, 2020$0.37 
May 4, 2020June 30, 2020July 17, 2020$0.37 
August 3, 2020September 30, 2020October 16, 2020$0.32 
August 3, 2020September 30, 2020October 16, 2020$0.05 (1)
November 2, 2020December 31, 2020January 15, 2021$0.32 
November 2, 2020December 31, 2020January 15, 2021$0.04 (1)
February 22, 2021March 31, 2021April 16, 2021$0.32 
February 22, 2021March 31, 2021April 16, 2021$0.05 (1)
May 3, 2021June 30, 2021July 15, 2021$0.32 
May 3, 2021June 30, 2021July 15, 2021$0.04 (1)
August 2, 2021September 30, 2021October 15, 2021$0.32 
August 2, 2021September 30, 2021October 15, 2021$0.06 (1)
November 1, 2021December 31, 2021January 14, 2022$0.32 
November 1, 2021December 31, 2021January 14, 2022$0.07 (1)
February 18, 2022March 31, 2022April 15, 2022$0.32 
February 18, 2022March 31, 2022April 15, 2022$0.08 (1)
May 2, 2022June 30, 2022July 15, 2022$0.32 
May 2, 2022June 30, 2022July 15, 2022$0.08 (1)
August 8, 2022September 30, 2022October 14, 2022$0.34 
August 8, 2022September 30, 2022October 14, 2022$0.06 (1)
October 31, 2022December 30, 2022January 16, 2023$0.36 
October 31, 2022December 30, 2022January 16, 2023$0.08 (1)
(1)Represents a special/supplemental dividend.

154

Table of Contents
11. CONSOLIDATED FINANCIAL HIGHLIGHTS
The following is a schedule of consolidated financial highlights for the years ended December 31, 2022, 2021, 2020, 2019 and 2018:
 For the years ended December 31,
 20222021202020192018
Per Common Share Data:
Net asset value per common share, beginning of year$16.91 $15.39 $16.56 $17.09 $18.12 
Net investment income (loss)(1)
1.93 1.53 1.54 1.79 1.73 
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities(0.35)1.36 (1.46)(0.75)(1.10)
Net increase (decrease) in net assets resulting from operations1.58 2.89 0.08 1.04 0.63 
Dividends declared(2)
(1.64)(1.50)(1.47)(1.74)(1.68)
Other(3)
0.01 0.03 — — — 
Accretion due to share repurchases0.13 0.10 0.22 0.17 0.02 
Net asset value per common share, end of year$16.99 $16.91 $15.39 $16.56 $17.09 
Market price per common share, end of year$14.31 $13.73 $10.26 $13.38 $12.40 
Number of shares of common stock outstanding, end of year51,060,136 53,142,454 55,320,309 57,763,811 62,230,251 
Total return based on net asset value(4)
13.00 %19.62 %1.81 %7.08 %3.59 %
Total return based on market price(5)
17.22 %48.44 %(12.33)%21.94 %(29.74)%
Net assets attributable to Common Stockholders, end of year$867,423 $898,804 $851,363 $956,471 $1,063,218 
Ratio to average net assets attributable to Common Stockholders:
Expenses net of waiver, before incentive fees9.23 %7.62 %8.48 %8.79 %6.77 %
Expenses net of waiver, after incentive fees11.65 %9.63 %10.59 %11.05 %8.81 %
Expenses gross of waiver, after incentive fees11.65 %9.63 %10.59 %11.05 %8.81 %
Net investment income (loss)(6)
11.75 %9.91 %10.08 %10.47 %9.64 %
Interest expense and credit facility fees4.96 %3.51 %4.49 %5.22 %3.57 %
Ratios/Supplemental Data:
Asset coverage, end of period176.79 %181.94 %182.09 %181.01 %210.31 %
Portfolio turnover30.00 %45.44 %33.06 %38.97 %45.88 %
Weighted-average shares of common shares outstanding
52,112,420 54,244,432 56,421,137 60,189,502 62,533,614 
(1)Net investment income (loss) per share was calculated as net investment income (loss) less the preferred dividend for the year divided by the weighted-average number of shares of common stock outstanding for the year.
(2)Dividends declared per common share was calculated as the sum of dividends on common stock declared during the year divided by the number of shares of common stock outstanding at each respective quarter-end date (refer to Note 10 to these consolidated financial statements).
(3)Includes the impact of different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding and certain per share data based on the shares outstanding as of a period end or transaction date
(4)Total return is based on the change in net asset value per common share during the year plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year.
(5)Total return based on market value (not annualized) is calculated as the change in market value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning market price for the period.
(6)The net investment income ratio is net of the waiver of base management fees.






155

Table of Contents
Senior Securities
Information about the Company’s senior securities is shown in the following table as of the end of each fiscal year ended December 31 since the Company commenced operations on May 2, 2013.
Class and Year/Period
Total Amount Outstanding
Exclusive of Treasury
Securities(1) ($ in millions)
Asset Coverage
Per Unit(2)
Involuntary
Liquidating
Preference Per Unit(3)
Average
Market Value
Per Unit(4)
Total Senior Securities
December 31, 2022$1,129.6 $1,768.0 — N/A
December 31, 2021$1,096.9 $1,819.0 — N/A
December 31, 2020$1,037.1 $1,821.0 — N/A
December 31, 2019$1,180.8 $1,810.0 — N/A
December 31, 2018$963.8 $2,103.0 — N/A
December 31, 2017$835.9 $2,349.0 — N/A
December 31, 2016$694.9 $2,100.0 — N/A
December 31, 2015$507.3 $2,127.0 — N/A
December 31, 2014$308.4 $2,097.0 — N/A
December 31, 2013$66.8 $3,784.0 — N/A
SPV Credit Facility(5)
December 31, 2020$— $— — N/A
December 31, 2019$232.5 $356.0 — N/A
December 31, 2018$224.1 $489.0 — N/A
December 31, 2017$287.4 $808.0 — N/A
December 31, 2016$252.9 $764.0 — N/A
December 31, 2015$170.3 $714.0 — N/A
December 31, 2014$246.4 $1,675.0 — N/A
December 31, 2013$66.8 $3,784.0 — N/A
Credit Facility(6)
December 31, 2022$440.4 $689.0 — N/A
December 31, 2021$407.7 $676.0 — N/A
December 31, 2020$347.9 $611.0 — N/A
December 31, 2019$384.1 $589.0 — N/A
December 31, 2018$290.5 $634.0 — N/A
December 31, 2017$275.5 $774.0 — N/A
December 31, 2016$169.0 $511.0 — N/A
December 31, 2015$64.0 $268.0 — N/A
December 31, 2014$62.0 $421.0 — N/A
2015-1 Notes(7)
December 31, 2017$273.0 $767.0 — N/A
December 31, 2016$273.0 $825.0 — N/A
December 31, 2015$273.0 $1,145.0 — N/A
2015-1R Notes(7)
December 31, 2022$449.2 $703.0 — N/A
December 31, 2021$449.2 $745.0 — N/A
December 31, 2020$449.2 $789.0 — N/A
December 31, 2019$449.2 $689.0 — N/A
December 31, 2018$449.2 $980.0 — N/A
2019 Notes(8)
December 31, 2022$115.0 $180.0 — N/A
December 31, 2021$115.0 $191.0 — N/A
December 31, 2020$115.0 $202.0 — N/A
December 31, 2019$115.0 $176.0 — N/A
2020 Notes(9)
December 31, 2022$75.0 $117.0 — N/A
December 31, 2021$75.0 $124.0 — N/A
December 31, 2020$75.0 $132.0 — N/A
156

Table of Contents
Class and Year/Period
Total Amount Outstanding
Exclusive of Treasury
Securities(1) ($ in millions)
Asset Coverage
Per Unit(2)
Involuntary
Liquidating
Preference Per Unit(3)
Average
Market Value
Per Unit(4)
Preferred Stock(10)
December 31, 2022$50.0 $78.0 — N/A
December 31, 2021$50.0 $83.0 — N/A
December 31, 2020$50.0 $88.0 — N/A
(1)    Total amount of each class of senior securities outstanding at the end of the period presented.
(2)    Asset coverage per unit is the ratio of the carrying value of the Company’s total assets, less all liabilities excluding indebtedness represented by senior securities in this table, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.
(3)    The amount to which such class of senior security would be entitled upon the Company’s involuntary liquidation in preference to any security junior to it. The “—” in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.
(4)    Not applicable because the senior securities are not registered for public trading.
(5)    On May 24, 2013, the SPV closed on a senior secured credit facility (the “SPV Credit Facility”). On December 11, 2020, the SPV repaid all outstanding amounts under the SPV Credit Facility and the facility was terminated.
(6)    On March 21, 2014, the Company closed on the Credit Facility.
(7)    On June 26, 2015, the Company completed a $400 million term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by the 2015-1 Issuer. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing the 2015-1R Notes.
(8)    On December 30, 2019, the Company closed a private offering of the 2019 Notes.
(9)    On December 11, 2020, the Company closed a private offering of the 2020 Notes.
(10)    On May 5, 2020, the Company issued the Preferred Stock.
12. LITIGATION
The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of December 31, 2022 and 2021, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.
In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements.
13. TAX
The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of December 31, 2022 and 2021.
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of December 31, 2022 and 2021, the Company had filed tax returns and therefore is subject to examination.
Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified among the Company’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from U.S. GAAP. As of December 31, 2022 and 2021, permanent differences primarily due to non-deductible excise tax, non-deductible offering costs, and the tax treatment of partnership investments resulted in a net increase in distributable earnings (loss) by $1,767 and $591, respectively, and net decrease in additional paid-in capital in excess of par by $1,767 and $591, respectively, on the Consolidated Statements of Assets and Liabilities. Total earnings and NAV were not affected.
157

Table of Contents
The tax character of the distributions paid for the fiscal years ended December 31, 2022, 2021 and 2020 was as follows:
 For the years ended
December 31,
 202220212020
Ordinary income$88,561 $84,473 $84,683 
Tax return of capital$— $— $— 
Income Tax Information and Distributions to Stockholders
As of December 31, 2022 and 2021, the components of accumulated earnings (deficit) on a tax basis were as follows:
20222021
Undistributed ordinary income$48,149 $21,197 
Other book/tax temporary differences(1)
(530)(641)
Capital loss carryforwards(130,222)(121,046)
Net unrealized appreciation (depreciation) on investments and currency unrealized appreciation (depreciation) on non-investment assets and liabilities(2)
(71,076)(52,032)
Total accumulated earnings (deficit)$(153,679)$(152,522)
 
(1)Consists of the unamortized portion of organization costs as of December 31, 2022 and 2021, respectively.
(2)The difference between the book-basis and tax-basis unrealized appreciation (depreciation) on investments is attributable primarily to the tax treatment of partnership investments, the tax treatment of defaulted securities, the tax treatment of passive foreign investment companies, the tax treatment of earnings from a controlled foreign corporation, and material modifications of investments.    
As of December 31, 2022 and 2021, the cost of investments for federal income tax purposes and gross unrealized
appreciation and depreciation on investments and currency unrealized appreciation (depreciation) on non-investment
assets and liabilities were as follows:
20222021
Cost of investments$1,979,816 $1,960,798 
Gross unrealized appreciation23,216 26,534 
Gross unrealized depreciation(94,292)(78,566)
Net unrealized appreciation (depreciation)$(71,076)$(52,032)
For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of December 31, 2022 and 2021, the Company had $130,222 and $121,046, of capital loss carryforwards, respectively, of which $18,006 and $19,470 were short-term capital loss carryforwards, respectively, and $112,216 and $101,576 were long-term capital loss carryforwards, respectively.

14. SUBSEQUENT EVENTS     
Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below and elsewhere in these consolidated financial statements.
On February 21, 2023, the Board of Directors declared a base quarterly common stock dividend of $0.37 per share plus a supplemental common stock dividend of $0.07, which are payable on April 14, 2023 to common stockholders of record on March 31, 2023.
158

Table of Contents
Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Exchange Act.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). The Company’s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the Company’s assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that the Company’s internal control over financial reporting as of December 31, 2022 was effective.
Attestation Report of the Registered Public Accounting Firm

Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the effectiveness of the Company’s internal control over financial reporting, which is contained in Part II, Item 8 of this Form 10-K, “Financial Statements and Supplementary Data.”
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
    None.
159

Table of Contents
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.
Not applicable.
160

Table of Contents
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2023 annual meeting of stockholders. The Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Exchange Act.
Information relating to our codes of ethics, which apply to, among others, our Chief Executive Officer and Chief Financial Officer, is included in Part I, Item 1 of this Form 10-K “Business-Regulation-Code of Ethics.”
Item 11. Executive Compensation
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2023 annual meeting of stockholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2023 annual meeting of stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2023 annual meeting of stockholders.
Item 14. Principal Accountant Fees and Services
Information in response to this item is incorporated by reference from our Proxy Statement relating to our 2023 annual meeting of stockholders.
161

Table of Contents
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Documents filed as part of this annual report
The following reports and consolidated financial statements are set forth in Part II, Item 8 of this Form 10-K:
Notes to Consolidated Financial Statements
(b) Exhibits
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously field with the SEC:
2.1
3.1
3.2
3.3
3.4
3.5
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5
10.6
162

Table of Contents
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
21.1
163

Table of Contents
31.1
31.2
32.1
32.2
99.1
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document*
101.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
104Cover Page Interactive Data File (embedded within the Inline XBRL document)*
*    Filed herewith.
(1)    Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)
(2)    Incorporated by reference to Exhibit 3.2 to the Company’s Form 10-K filed by the Company on March 22, 2017 (File No. 000-54899)
(3)    Incorporated by reference to Exhibit 3.2 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)
(4)    Incorporated by reference to Exhibit 3.4 to the Company’s Form 10-K filed by the Company on March 22, 2017 (File No. 000-54899)
(5)    Incorporated by reference to Exhibit 4.1 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)
(6)    Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)
(7)    Incorporated by reference to Exhibit (e)(1) to the Company’s Form N-2 filed by the Company on June 5, 2017 (File No. 333-218114)
(7)    Incorporated by reference to Exhibit (e)(2) to the Company’s Form N-2 filed by the Company on June 5, 2017 (File No. 333-218114)
(8)    Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on November 6, 2018 (File No. 814-00995)
(9)    Incorporated by reference to Exhibit (j) to the Company’s Registration Statement on Form N-2 filed by the Company on May 19, 2017 (File No. 333-218114)
(10)    Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)
(11)    Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)
(12)    Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on July 31, 2013 (File No. 814-00995)
(13)    Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed by the Company on August 6, 2019 (File No. 814-00995)
(14)    Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on August 13, 2014 (File No. 814-00995)
(15)    Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)
164

Table of Contents
(16)    Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)
(17)    Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)
(18)    Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed by the Company on August 8, 2016 (File No. 814-00995)
(19)    Incorporated by reference to Exhibit (k)(13) to the Company’s Form N-2 filed by the Company on June 5, 2017 (File No. 333-218114)
(20)    Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed by the Company on May 9, 2017 (File No. 814-00995)
(21)    Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed by the Company on November 6, 2018 (File No. 814-00995)
(22)    Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed by the Company on November 6, 2018 (File No. 814-00995)
(23)    Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed by the Company on December 30, 2019 (File No. 814-00995)
(24)    Incorporated by reference to Exhibit 14.1 to the Company’s Form 10-K filed by the Company on February 26, 2019 (File No. 814-00995)
(25)     Incorporated by reference to Exhibit 14.2 to the Company’s Form 10-K filed by the Company on February 26, 2019 (File No. 814-00995)
(26)     Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed by the Company on November 4, 2020 (File No. 814-00995)
(27)     Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q filed by the Company on May 5, 2020 (File No. 814-00995)
(28)     Incorporated by reference to Exhibit 4.1 to the Company’s Form 10-Q filed by the Company on May 5, 2020 (File No. 814-00995)
(29)     Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed by the Company on December 11, 2020 (File No. 814-00995)
(30)     Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on May 4, 2021 (File No. 814-00995)
(31)    Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed by the Company on June 1, 2022 (File No. 814-00995)
(32)    Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed by the Company on June 1, 2022 (File No. 814-00995)
(c) Consolidated Financial Statement Schedules
Separate financial statements of subsidiaries not consolidated:
Consolidated Financial Statements of Middle Market Credit Fund, LLC for the years ended December 31, 2022 and 2021 are filed as Exhibit 99.1 hereto.
Item 16. Form 10-K Summary
None.
165

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 CARLYLE SECURED LENDING, INC.
Dated: February 27, 2023By/s/ Aren C. LeeKong
Aren C. LeeKong
President and Chief Executive Officer
(principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: February 27, 2023By/s/ Aren C. LeeKong
Aren C. LeeKong
President and Chief Executive Officer
(principal executive officer)
Dated: February 27, 2023 By /s/ Thomas M. Hennigan
  Thomas M. Hennigan
  Chief Financial Officer
(principal financial officer)
Dated: February 27, 2023By/s/ Desiree Annunziato
Desiree Annunziato
Treasurer
(principal accounting officer)
Dated: February 27, 2023 By /s/ Nigel D.T. Andrews
  Nigel D.T. Andrews
  Director
Dated: February 27, 2023 By /s/ Leslie E. Bradford
  Leslie E. Bradford
  Director
Dated: February 27, 2023 By /s/ Mark Jenkins
  Mark Jenkins
  Director
Dated: February 27, 2023 By /s/ John G. Nestor
  John G. Nestor
  Director
Dated: February 27, 2023By/s/ Linda Pace
Linda Pace
Director and Chair of the Board
Dated: February 27, 2023By/s/ William H. Wright II
William H. Wright II
Director
166