Carlyle Secured Lending, Inc.

Good day and thank you for standing by. Welcome to the Carlisle Secured Lending First Quarter 2022 Earnings Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you're requiring further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Daniel Hahn. Please go ahead.

Good morning and welcome to Carlyle Secured Lending's first quarter 2022 earnings call. Last night, we issued an earnings press release and detailed earnings presentation with our quarterly results, a copy of which is available on the investor relations section of our website. Following our remarks today, we will hold a question and answer session for analysts and institutional investors. This call is being webcast and a replay will be available on our website. Any forward-looking statements made today do not guarantee future performance and undue reliance should not be placed on that. These statements are based on the current management expectations and involve inherent risks and uncertainties, including those identified in the risk factors section of our annual report on Form 10-K that could cause actual results to differ materially than those indicated. Carlyle Secured Lending assumes no obligation to update forward-looking statements at any time. With that, I'll turn the call over to our Chief Executive Officer, Linda Pace.

Linda Pace Thank you, Dan, and good morning, everyone. And thank you all for joining us to discuss Carlyle Secured Lending's first quarter 2022 results. Joining me on this call are our Chief Investment Officer and newly appointed President, Taylor Boswell, and our Chief Financial Officer, Tom Hennigan. Today, I'm going to focus my remarks on three topics. First, I'll provide an overview of this quarter's financial results. Second, I'll touch on investment activity and the current environment. And finally, I'll conclude with a few thoughts around our current positioning. Let me begin with an overview of our financial results. Despite an increasingly complex market backdrop, we once again generated strong earnings this quarter. Our total net investment income was 47 cents per common share, which included 7 cents of non-recurring income derived from the successful exit of our investment in Solero. We declared a total dividend of 40 cents per share, representing an annualized yield on our stock of over 11 percent. The dividend payments are comprised of our 32-cent base dividend plus 8 cents of our regular supplemental dividend of recurring earnings above the base dividend. As Tom will detail later, we expect dividends which have landed between 38 and 40 cents in recent quarters to remain in that range with the potential for upside as we progress through the rest of the year. Net asset value per share of $17.11 saw positive progression for the eighth consecutive quarter, up 1.2% from Q4-21. As Tom will discuss further, strengthening credit performance, especially in our watch list names, drove our first quarter's results and outpaced any negative valuation impact from widening market yields, or inflation-driven earnings impacts. This allowed us to deliver a NAV which now stands 3.3% above our pre-COVID level and higher than our NAV in Q2 2019 when Taylor and I joined the leadership team. We repurchased an additional $7 million of our common stock in the quarter, resulting in $0.03 of accretion to our net asset value. As we have consistently said, We remain active repurchasers of our stock at its current valuation levels, given the attractiveness of the returns for our shareholders. In total, we have repurchased almost 10 million shares, or 16% of our float since the commencement of our share repurchase program, demonstrating our firm and continued commitment to shareholders. I'll now turn to this quarter's investment activity in the current environment. We funded $114 million of new investments in the first quarter, almost all of which were in a first lien position. This compares with repayments and strategic sales of $159 million during the first quarter. As a result, we ended the quarter with just under $1.9 billion of investments, essentially flat versus last quarter. As Taylor will describe later, the investment environment is changing and becoming more complicated. With competition remaining intense, we will continue our approach of being highly credit-selective and defensively oriented. In this moment of higher uncertainty, we are comfortably operating at a funded asset level closer to the bottom of our target leverage range as our income generation prospects remain solid. Finally, a couple of organizational items to note. As you no doubt saw, we've changed our name in the quarter from TCG BDC to Carlyle Secured Lending. As you've heard from us before and will continue to say, our strategy is to leverage Carlyle's integrated investment platform to derive edge at each step of our investment process, from origination to underwriting to portfolio management. We believe this new name better connects the company to the inherent strengths of our manager as well as to the fundamental nature of our underlying investment activity. For the avoidance of doubt, our ticker, CGBD, will remain the same. I'd like to conclude by taking a moment to congratulate some members of our large and capable team who assumed formal roles at Carlyle Secured Lending in the quarter. Taylor Boswell, who I mentioned was appointed to president, has also joined the company's board of directors. He has been integral to the success of the company over the past three years, and his new title and role on the board are reflective of his outstanding leadership. In addition, you will note we admitted Jonathan Pearl, vice president and head of sponsor coverage, Michael Hadley, vice president and head of underwriting, and Alex Popov, vice president and head of illiquid credit, as newly elected officers of the company. Each of these professionals are long-tenured members of the Carlyle team. We're fortunate to have such a deep bench of talent here, and we welcome their more prominent role at Carlyle Secured Lending. Thanks for joining us this morning. I'd like to hand the call over to our president, Taylor Boswell.