Carlyle Credit Income Fund

Good day and thank you for standing by. Welcome to the Carlyle Credit Income Fund third quarter 2026 financial results and investor conference call. At this time, all participants are in 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 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Again, please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Joseph Castilla, Managing Director, Product Specialist. Please go ahead.

Good morning and welcome to Carlyle Credit Income Fund third quarter 2026 earnings call. With me on the call today is Nishil Mehta, CCIS Principal Executive Officer and President, Lauren Basmadjian, CCIS Chair and Carlyle's Global Head of Liquid Credit, and Nelson Joseph, CCIS Principal Financial Officer. Last night, we issued our Q3 financial statement and a corresponding press release and earnings presentation discussing our results, which are available on the investor relations section of our website. Following our remarks today, we will hold a question and answer session for analysts and institutional investors. This call is being webcast and a replay will be available on our website. Any forward-looking statements made today do not guarantee future performance and any undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the risk factor section of our annual report on the form NCSR. These risks and uncertainties could cause actual results to differ materially from those indicated. Carlyle Credit Income Fund assumes no obligation to update any forward-looking statements at any time. During the conference call, we may discuss adjusted net investment income per common share and core net investment income per common share, which are calculated and presented on a basis other than in accordance with GAAP. We use these non-GAAP financial measures internally to analyze and evaluate financial results and performance, and we believe these non-GAAP financial measures are useful to investors gauging the quality of the fund's financial performance, identifying trends in its results, and providing meaningful period-to-period comparisons. The presentation of this non-GAAP measure is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation. With that, I'll turn the call over to Nishil.

Thanks, Joe. Good morning, everyone, and thank you all for joining CCIF's quarterly earnings call. The SEAL equity market was fairly stable during the second quarter, following considerable volatility in the first quarter. As a result, CCIF's NAV remained largely flat during the quarter, and earn line credit fundamentals remained broadly stable. We are encouraged by early signs that the pace of spread compression may be moderating, as repricing activity has slowed from the elevated levels seen over the past two years. We also continue to monitor loans maturing over the next few years. We expect continued amend and extend activity to address the maturity wall, which we believe could result in wider spreads and other lender-friendly protections that benefits the equity holders over time. On balance, we believe the pressure on spreads is now more two-sided than it has been. rather than a continuation of one-way compression. CCAS portfolios saw its weight average spread remain relatively flat last quarter, driven primarily by rotation into CLO portfolios with slightly higher spread collateral, partially offset by slowing loan repricings. We continue to believe recent CLO equity performance industry-wide has been driven by more valuation and technical factors than broad-based credit deterioration. Navigate this market environment, we continue to focus on optimizing the portfolio. including selectively competing refinancing and resets, and defensively positioning CSIF with experienced COO managers and transactions with longer reinvestment periods. I would like to highlight the fund activities over the last quarter and key stats on the portfolio as of June 30th. We maintain our monthly dividend at $0.06 per share, or 24.9% annualized, based on the share price as of August 17, 2026, which is now declared through November of 2026. CCS Underlying Investments generated an annualized cash-on-cash yield of approximately 20% for the quarter, which resulted in $0.37 of recurring cash flows and $0.25 of core net investment income for the quarter at the fund level. Core net investment income provided dividend coverage of 139% on our monthly dividend of $0.06 per share. New seal investments during the quarter totaled $11.9 million with a weighted average gap yield of 13%. and Total Sales Proceeds during the quarter totaled $12.5 million as we continue to optimize our portfolio. Within CSAT's portfolio, we completed three refinancings and resets this quarter, increasing the total number of refinancing and resets in the fiscal year to 10. The refinancings and resets reduce the cost of liabilities and extend the reinvestment periods across these silos, bolstering equity cash flows. We expect to continue to refinance and reset the portfolio to enhance returns. The weighted average years left in the reinvestment period increased slightly from approximately 3.3 years to 3.5 years. This provides COO and managers the opportunity to capitalize on periods of volatility through active management. The increase was due to a combination of resets and new investments with longer time left in the reinvestment period. We believe the portfolio weighted average junior over-collarization cushion of 4.24% is healthy and offsets potential defaults and losses in the underlying loan portfolios. The average percent of loans rated CCC by S&P was 4.1%, below the 7.5% CCC limit in CLOs. We remain confident in the resilience of our portfolio, which is diversified across high-quality managers and structured to navigate evolving market conditions. Equity distributions have moderated industry-wide as the compression of loan spreads has outpaced the tightening in CLO liability costs, narrowing excess spread. However, we believe resilient credit fundamentals and continued demand for floating-rate assets will support CELA performance over time. Now I will discuss our CELA equity outlook. CELA equity continues to benefit from historically attractive liability costs. We also continue to see a broadening and maturing base of demand for CELA liabilities across investor types and geographies, which we expect to further support liability spread tightening over time. Any normalization in loan spreads or increase in loan supply could improve excess spread generation particularly for deals with longer reinvestment runway. Looking ahead, we believe steel equity performance will continue to depend on manager selection, reinvestment discipline, and active credit management. We continue to position CCIF conservatively while selectively deploying capital into opportunities where we believe valuations appropriately compensate investors for underlying risk. We also continue to leverage Carl's in-house credit research platform to conduct detailed bottom-up analysis across our underlying loan portfolios including software-related exposures and involving AI-related risks. CSAT's portfolio remains highly diversified with exposure to approximately 1,900 underlying loans across roughly 1,400 unique obligors, with exposure to any single issuer representing less than 1% of the portfolio. In addition, the portfolio remains predominantly comprised of first and senior secured loans, representing over 97% of exposure, which we believe continues to provide meaningful downside protection and structural resilience. With that, I will now hand the call over to Lauren to discuss the current market environment.