UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 22, 2022
TCG BDC, INC.
(Exact name of registrant as specified in charter)
| Maryland | No. 814-00995 | 80-0789789 | ||||||||||||
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| One Vanderbilt Avenue, Suite 3400 New York, New York | 10017 | |||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: (212) 813-4900
| N/A | ||
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||||||
| Common stock, $0.01 per share | CGBD | The Nasdaq Global Select Market | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ☐ | ||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||
Item 2.02 – Results of Operations and Financial Condition.
On February 22, 2022, TCG BDC, Inc. (the “Company”) issued a press release announcing its fourth quarter 2021 financial results and a detailed earnings presentation. Copies of the press release and the earnings presentation are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively.
The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933 (the "Securities Act") or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 7.01 – Regulation FD Disclosure.
On February 22, 2022, the Company issued a press release, included herewith as Exhibit 99.1, announcing its fourth quarter 2021 financial results and the declaration of a first quarter 2022 base dividend of $0.32 per share, plus a supplemental dividend of $0.08 per share, payable on April 15, 2022 to stockholders of record as of March 31, 2022.
The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any filing made under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 – Financial Statements and Exhibits.
Exhibits 99.1 and 99.2 shall be deemed furnished herewith.
(d)Exhibits:
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
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 hereunto duly authorized.
| TCG BDC, INC. | ||||||||||||||
| (Registrant) | ||||||||||||||
| Dated: February 22, 2022 | By: | /s/ Thomas M. Hennigan | ||||||||||||
| Name: Thomas M. Hennigan | ||||||||||||||
| Title: Chief Financial Officer | ||||||||||||||
Exhibit 99.1
For Immediate Release
February 22, 2022
TCG BDC, Inc. Announces Fourth Quarter 2021 Financial Results and Declares First Quarter 2022 Base Dividend of $0.32 Per Common Share and Supplemental Dividend of $0.08 per Common Share
New York - TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) (NASDAQ: CGBD) today announced its financial results for its fourth quarter ended December 31, 2021.
Linda Pace, TCG BDC’s Chief Executive Officer said, “Our fourth quarter results were strong across the board, capping off an exceptional year for CGBD which demonstrated sustained income delivery, positive NAV growth, and outstanding stock performance. While the macroeconomic environment is getting more complex, we are confident in our positioning and expect another solid year of performance in 2022.”
Selected Financial Highlights
| (dollar amounts in thousands, except per share data) | December 31, 2021 | September 30, 2021 | |||||||||
| Total investments, at fair value | $ | 1,913,052 | $ | 1,948,206 | |||||||
| Total assets | 2,031,350 | 2,044,170 | |||||||||
| Total debt | 1,044,022 | 1,061,815 | |||||||||
| Total net assets | $ | 948,804 | $ | 944,394 | |||||||
| Net assets per common share | $ | 16.91 | $ | 16.65 | |||||||
| For the three month periods ended | ||||||||||||||
| December 31, 2021 | September 30, 2021 | |||||||||||||
| Total investment income | $ | 43,972 | $ | 43,762 | ||||||||||
| Net investment income (loss) | 22,449 | 22,086 | ||||||||||||
| Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities | 11,512 | 25,534 | ||||||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 33,961 | $ | 47,620 | ||||||||||
| Per weighted-average common share—Basic: | ||||||||||||||
| Net investment income (loss), net of preferred dividend | $ | 0.40 | $ | 0.39 | ||||||||||
| Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities | 0.22 | 0.48 | ||||||||||||
| Net increase (decrease) in net assets resulting from operations attributable to common stockholders | $ | 0.62 | $ | 0.87 | ||||||||||
| Weighted-average shares of common stock outstanding—Basic | 53,466,003 | 53,955,338 | ||||||||||||
| Base dividends declared per common share | $ | 0.32 | $ | 0.32 | ||||||||||
| Supplemental dividends declared per common share | $ | 0.07 | $ | 0.06 | ||||||||||
Fourth Quarter 2021 Highlights
(dollar amounts in thousands, except per share data)
•Net investment income, net of the preferred dividend, for the three month period ended December 31, 2021 was $21,574, or $0.40 per common share, as compared to $21,211, or $0.39 per common share, for the three month period ended September 30, 2021;
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•Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities for the three month period ended December 31, 2021 was $11,512, or $0.22 per share, as compared to $25,534, or $0.48 per share, for the three month period ended September 30, 2021;
•Net increase (decrease) in net assets resulting from operations attributable to common stockholders for the three month period ended December 31, 2021 was $33,086, or $0.62 per common share, as compared to $46,745, or $0.87 per common share, for the three month period ended September 30, 2021;
•Net asset value per common share for the quarter ended December 31, 2021 increased 1.6% to $16.91 from $16.65 as of September 30, 2021, and is 2.2% higher than the $16.56 reported as of December 31, 2019, prior to the onset of the global pandemic.
•During the three month period ended December 31, 2021, the Company repurchased and extinguished 0.6 million shares of the Company's common stock pursuant to the Company’s previously announced $150 million stock repurchase program at an average cost of $13.88 per share, or $7.9 million in the aggregate, resulting in accretion to net assets per share of $0.03. As of December 31, 2021, there was $24.7 million remaining under the stock repurchase program.
•On February 18, 2022, the Board of Directors declared a base quarterly common dividend of $0.32 plus a supplemental common dividend of $0.08, which are payable on April 15, 2022 to common stockholders of record on March 31, 2022.
Portfolio and Investment Activity
(dollar amounts in thousands, except per share data, unless otherwise noted)
As of December 31, 2021, the fair value of our investments was approximately $1,913,052, comprised of 154 investments in 117 portfolio companies/investment funds across 27 industries. This compares to the Company’s portfolio as of September 30, 2021, as of which date the fair value of our investments was approximately $1,948,206, comprised of 163 investments in 123 portfolio companies/investment funds across 28 industries.
As of December 31, 2021 and September 30, 2021, investments consisted of the following:
| December 31, 2021 | September 30, 2021 | ||||||||||||||||||||||
Type—% of Fair Value | Fair Value | % of Fair Value | Fair Value | % of Fair Value | |||||||||||||||||||
| First Lien Debt | $ | 1,232,084 | 64.4 | % | $ | 1,275,553 | 65.5 | % | |||||||||||||||
| Second Lien Debt | 341,776 | 17.9 | 352,570 | 18.1 | |||||||||||||||||||
| Equity Investments | 77,093 | 4.0 | 52,665 | 2.7 | |||||||||||||||||||
| Investment Funds | 262,099 | 13.7 | 267,418 | 13.7 | |||||||||||||||||||
| Total | $ | 1,913,052 | 100.0 | % | $ | 1,948,206 | 100.0 | % | |||||||||||||||
The following table shows our investment activity for the three month period ended December 31, 2021:
| Funded | Sold/Repaid | ||||||||||||||||||||||
| Principal amount of investments: | Amount | % of Total | Amount | % of Total | |||||||||||||||||||
| First Lien Debt | $ | 196,311 | 83.1 | % | $ | (243,762) | 89.4 | % | |||||||||||||||
| Second Lien Debt | 13,591 | 5.8 | (26,744) | 9.8 | |||||||||||||||||||
| Equity Investments | 26,108 | 11.1 | (2,023) | 0.7 | |||||||||||||||||||
| Investment Funds | — | — | — | — | |||||||||||||||||||
| Total | $ | 236,010 | 100.0 | % | $ | (272,529) | 99.9 | % | |||||||||||||||
Overall, total investments at fair value decreased by 1.8%, or $35,154, during the three month period ended December 31, 2021 after factoring in repayments, sales, net fundings on revolvers and delayed draws and net change in unrealized appreciation (depreciation).
As of December 31, 2021, the total weighted average yield for our first and second lien debt investments on an amortized cost basis was 7.68%, which includes the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2021. As of December 31, 2021, on a fair value basis, approximately 1.6% of our debt investments bear interest at a fixed rate and approximately 98.4% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors.
The Company has investments in two credit funds, Middle Market Credit Fund, LLC (“Credit Fund”) and Middle Market Credit Fund II, LLC (“Credit Fund II”), which represented 13.7% of the Company's total investments at fair value.
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Total investments at fair value held by Credit Fund, which is not consolidated with the Company, decreased by 14.0%, or $151,306, during the three month period ended December 31, 2021 after factoring in repayments, sales, net fundings on revolvers and delayed draws and net change in unrealized appreciation (depreciation). As of December 31, 2021, Credit Fund had total investments at fair value of $926,959, which were comprised of 100.0% first lien senior secured loans at fair value. As of December 31, 2021, on a fair value basis, 100.0% of Credit Fund’s debt investments bear interest at a floating rate, which primarily are subject to interest rate floors.
Total investments at fair value held by Credit Fund II, which is not consolidated with the Company, decreased by 2.1%, or $5,099, during the three month period ended December 31, 2021 after factoring in repayments, sales, and net change in unrealized appreciation (depreciation). As of December 31, 2021, Credit Fund II had total investments at fair value of $239,289, which were comprised of 87.0% first lien senior secured loans and 13.0% second lien senior secured loans at fair value. As of December 31, 2021, on a fair value basis, approximately 2.3% of Credit Fund II’s debt investments bear interest at a fixed rate and approximately 97.7% of Credit Fund II’s debt investments bear interest at a floating rate, which primarily are subject to interest rate floors.
As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”. Key drivers of internal risk ratings include financial metrics, financial covenants, liquidity and enterprise value coverage.
Internal Risk Ratings Definitions
| 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 bases 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 investment ratings assigned to each debt investment in our portfolio. Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The following table summarizes the Internal Risk Ratings of our debt portfolio as of December 31, 2021 and September 30, 2021:
| December 31, 2021 | September 30, 2021 | ||||||||||||||||||||||
| Fair Value | % of Fair Value | Fair Value | % of Fair Value | ||||||||||||||||||||
| (dollar amounts in millions) | |||||||||||||||||||||||
| Internal Risk Rating 1 | $ | 3.8 | 0.2 | % | $ | 3.8 | 0.2 | % | |||||||||||||||
| Internal Risk Rating 2 | 1,205.5 | 76.6 | 1,245.1 | 76.5 | |||||||||||||||||||
| Internal Risk Rating 3 | 299.5 | 19.0 | 311.8 | 19.2 | |||||||||||||||||||
| Internal Risk Rating 4 | 27.6 | 1.8 | 28.1 | 1.7 | |||||||||||||||||||
| Internal Risk Rating 5 | 37.5 | 2.4 | 39.4 | 2.4 | |||||||||||||||||||
| Total | $ | 1,573.9 | 100.0 | % | $ | 1,628.1 | 100.0 | % | |||||||||||||||
As of December 31, 2021 and September 30, 2021, the weighted average Internal Risk Rating of our debt investment portfolio was 2.3 and 2.3, respectively.
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Consolidated Results of Operations
(dollar amounts in thousands, except per share data)
Total investment income for the three month periods ended December 31, 2021 and September 30, 2021 was $43,972 and $43,762, respectively. This $210 net increase was primarily due to an increase in prepayment fees and OID accretion from higher repayment activity. This was partially offset by lower interest income from a lower average investment balance which was primarily due to higher repayment activity during the quarter.
Total expenses for the three month periods ended December 31, 2021 and September 30, 2021 were $21,523 and $21,676, respectively. This $153 net decrease during the three month period ended December 31, 2021 was mainly due to a decrease in interest expense in the three month period ended December 31, 2021.
During the three month period ended December 31, 2021, the Company recorded a net realized and unrealized gain (loss) of $11,512. This was primarily driven by increases in the fair value of SolAero Technologies Corp. and Derm Growth Partners III, LLC and realized gains on equity co-investments. This was partially offset by a decrease in value of the Company's investment in Credit Fund.
Liquidity and Capital Resources
(dollar amounts in thousands, except per share data)
As of December 31, 2021, the Company had cash, cash equivalents and restricted cash of $93,074, notes payable and senior unsecured notes (before debt issuance costs) of $449,200 and $190,000, respectively, and secured borrowings outstanding of $407,655. As of December 31, 2021, the Company had $280,345 of remaining unfunded commitments and $280,706 available for additional borrowings under its revolving credit facilities, subject to leverage and borrowing base restrictions.
Dividends
On February 18, 2022, the Board of Directors declared a base quarterly common dividend of $0.32 plus a supplemental common dividend of $0.08, which are payable on April 15, 2022 to common stockholders of record on March 31, 2022.
On December 29, 2021, the Company declared and paid a cash dividend on the Preferred Stock for the period from October 1, 2021 to December 31, 2021 in the amount of $0.438 per Preferred Share to the holder of record on December 31, 2021.
Conference Call
The Company will host a conference call at 11:00 a.m. EST on Wednesday, February 23, 2022 to discuss these quarterly financial results. The call and webcast will be available on the TCG BDC website at tcgbdc.com. The call may be accessed by dialing +1 (866) 394-4623 (U.S.) or +1 (409) 350-3158 (international) and referencing “TCG BDC Financial Results Call.” The conference call will be webcast simultaneously via a link on TCG BDC’s website and an archived replay of the webcast also will be available on the website soon after the live call for 21 days.
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollar amounts in thousands, except per share data)
| December 31, 2021 | September 30, 2021 | ||||||||||
| (unaudited) | (unaudited) | ||||||||||
| ASSETS | |||||||||||
| Investments, at fair value | |||||||||||
| Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,631,067 and $1,669,617, respectively) | $ | 1,607,731 | $ | 1,643,584 | |||||||
| Investments—non-controlled/affiliated, at fair value (amortized cost of $38,462 and $38,582, respectively) | 30,286 | 30,410 | |||||||||
| Investments—controlled/affiliated, at fair value (amortized cost of $288,024 and $288,056, respectively) | 275,035 | 274,212 | |||||||||
| Total investments, at fair value (amortized cost of $1,957,553 and $1,996,255, respectively) | 1,913,052 | 1,948,206 | |||||||||
| Cash, cash equivalents and restricted cash | 93,074 | 46,164 | |||||||||
| Receivable for investment sold/repaid | 530 | 23,235 | |||||||||
Deferred financing costs | 3,066 | 3,256 | |||||||||
Interest receivable from non-controlled/non-affiliated investments | 11,011 | 13,486 | |||||||||
Interest receivable from non-controlled/affiliated investments | 611 | 581 | |||||||||
Interest and dividend receivable from controlled/affiliated investments | 8,522 | 7,866 | |||||||||
Prepaid expenses and other assets | 1,484 | 1,376 | |||||||||
Total assets | $ | 2,031,350 | $ | 2,044,170 | |||||||
| LIABILITIES | |||||||||||
Secured borrowings | $ | 407,655 | $ | 425,545 | |||||||
| 2015-1R Notes, net of unamortized debt issuance costs of $2,417 and $2,479, respectively | 446,783 | 446,721 | |||||||||
| Senior Notes, net of unamortized debt issuance costs of $416 and $451, respectively | 189,584 | 189,549 | |||||||||
Payable for investments purchased | 323 | 68 | |||||||||
Interest and credit facility fees payable | 2,467 | 3,045 | |||||||||
Dividend payable | 20,705 | 20,388 | |||||||||
Base management and incentive fees payable | 11,819 | 11,752 | |||||||||
Administrative service fees payable | 482 | 661 | |||||||||
Other accrued expenses and liabilities | 2,728 | 2,047 | |||||||||
Total liabilities | 1,082,546 | 1,099,776 | |||||||||
| NET ASSETS | |||||||||||
Cumulative convertible preferred stock, $0.01 par value; 2,000,000 and 2,000,000 shares issued and outstanding as of December 31, 2021 and September 30, 2021, respectively | 50,000 | 50,000 | |||||||||
| Common stock, $0.01 par value; 198,000,000 shares authorized; 53,142,454 and 53,714,444 shares issued and outstanding at December 31, 2021 and September 30, 2021, respectively | 532 | 537 | |||||||||
Paid-in capital in excess of par value | 1,052,427 | 1,060,955 | |||||||||
Offering costs | (1,633) | (1,633) | |||||||||
Total distributable earnings (loss) | (152,522) | (165,465) | |||||||||
Total net assets | $ | 948,804 | $ | 944,394 | |||||||
| NET ASSETS PER COMMON SHARE | $ | 16.91 | $ | 16.65 | |||||||
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share data)
(unaudited)
| For the three month periods ended | ||||||||||||||
| December 31, 2021 | September 30, 2021 | |||||||||||||
| Investment income: | ||||||||||||||
| From non-controlled/non-affiliated investments: | ||||||||||||||
| Interest income | $ | 34,616 | $ | 35,387 | ||||||||||
| Other income | 1,748 | 750 | ||||||||||||
| Total investment income from non-controlled/non-affiliated investments | 36,364 | 36,137 | ||||||||||||
| From non-controlled/affiliated investments: | ||||||||||||||
| Interest income | 43 | 47 | ||||||||||||
| Other income | 2 | 2 | ||||||||||||
| Total investment income from non-controlled/affiliated investments | 45 | 49 | ||||||||||||
| From controlled/affiliated investments: | ||||||||||||||
| Interest income | 28 | 46 | ||||||||||||
| Dividend income | 7,524 | 7,523 | ||||||||||||
| Other income | 11 | 7 | ||||||||||||
| Total investment income from controlled/affiliated investments | 7,563 | 7,576 | ||||||||||||
| Total investment income | 43,972 | 43,762 | ||||||||||||
| Expenses: | ||||||||||||||
| Base management fees | 7,319 | 7,233 | ||||||||||||
| Incentive fees | 4,487 | 4,516 | ||||||||||||
| Professional fees | 721 | 836 | ||||||||||||
| Administrative service fees | 281 | 400 | ||||||||||||
| Interest expense | 7,280 | 7,519 | ||||||||||||
| Credit facility fees | 465 | 435 | ||||||||||||
| Directors’ fees and expenses | 141 | 154 | ||||||||||||
| Other general and administrative | 473 | 420 | ||||||||||||
| Total expenses | 21,167 | 21,513 | ||||||||||||
| Net investment income (loss) before taxes | 22,805 | 22,249 | ||||||||||||
| Excise tax expense | 356 | 163 | ||||||||||||
| Net investment income (loss) | 22,449 | 22,086 | ||||||||||||
| Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities: | ||||||||||||||
| Net realized gain (loss) from: | ||||||||||||||
| Non-controlled/non-affiliated investments | 7,854 | 7,565 | ||||||||||||
| Non-controlled/affiliated investments | 3 | — | ||||||||||||
| Controlled/affiliated investments | (2) | — | ||||||||||||
| Currency gains (losses) on non-investment assets and liabilities | (30) | (9) | ||||||||||||
| Net change in unrealized appreciation (depreciation) on investments: | ||||||||||||||
| Non-controlled/non-affiliated | 2,713 | 4,574 | ||||||||||||
| Non-controlled/affiliated | (4) | 1,683 | ||||||||||||
| Controlled/affiliated | 838 | 9,730 | ||||||||||||
| Net change in unrealized currency gains (losses) on non-investment assets and liabilities | 140 | 1,991 | ||||||||||||
| Net realized and unrealized gain (loss) on investments and non-investment assets and liabilities | 11,512 | 25,534 | ||||||||||||
| Net increase (decrease) in net assets resulting from operations | 33,961 | 47,620 | ||||||||||||
| Preferred stock dividend | 875 | 875 | ||||||||||||
| Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders | $ | 33,086 | $ | 46,745 | ||||||||||
| Basic and diluted earnings per common share: | ||||||||||||||
| Basic | $ | 0.62 | $ | 0.87 | ||||||||||
| Diluted | $ | 0.58 | $ | 0.80 | ||||||||||
| Weighted-average shares of common stock outstanding: | ||||||||||||||
| Basic | 53,466,003 | 53,955,338 | ||||||||||||
| Diluted | 58,753,254 | 59,230,725 | ||||||||||||
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About TCG BDC, Inc.
TCG BDC is an externally managed specialty finance company focused on lending to middle-market companies. TCG BDC is managed by Carlyle Global Credit Investment Management L.L.C., an SEC-registered investment adviser and a wholly owned subsidiary of The Carlyle Group Inc. Since it commenced investment operations in May 2013 through December 31, 2021, TCG BDC has invested approximately $7.1 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. TCG BDC’s investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies. TCG BDC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended.
Web: tcgbdc.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology 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. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. There may be events in the future, however, that we are not able to predict accurately or control. You should not place undue reliance on these forward-looking statements, which speak only as of the date on which we make it. Factors or events that could cause our actual results to differ, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in filings we make with the Securities and Exchange Commission, and it is not possible for us to predict or identify all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Contacts:
Investors: | Media: | ||||
| L. Allison Rudary | Brittany Berliner | ||||
| +1-212-813-4756 allison.rudary@carlyle.com | +1-212-813-4839 brittany.berliner@carlyle.com | ||||
Page | 7
1 TCG BDC, Inc. Quarterly Earnings Presentation DECEMBER 31, 2021
Disclaimer and Forward-Looking Statement This presentation (the “Presentation”) has been prepared by TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) (NASDAQ: CGBD) and may only be used for informational purposes only. This Presentation should be viewed in conjunction with the earnings conference call of the Company held on February 23, 2022 and the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The information contained herein may not be used, reproduced, referenced, quoted, linked by website, or distributed to others, in whole or in part, except as agreed in writing by the Company. This Presentation does not constitute a prospectus and should under no circumstances be understood as an offer to sell or the solicitation of an offer to buy our common stock or any other securities nor will there be any sale of the common stock or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction. This Presentation provides limited information regarding the Company and is not intended to be taken by, and should not be taken by, any individual recipient as investment advice, a recommendation to buy, hold or sell, or an offer to sell or a solicitation of offers to purchase, our common stock or any other securities that may be issued by the Company, or as legal, accounting or tax advice. An investment in securities of the type described herein presents certain risks. This Presentation may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward- looking terminology 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. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. There may be events in the future, however, that we are not able to predict accurately or control. You should not place undue reliance on these forward-looking statements, which speak only as of the date on which we make them. Factors or events that could cause our actual results to differ, possibly materially from our expectations, include, but are not limited to, the risks, uncertainties and other factors we identify in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in filings we make with the Securities and Exchange Commission (the “SEC”), and it is not possible for us to predict or identify all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Information throughout the Presentation provided by sources other than the Company (including information relating to portfolio companies) has not been independently verified and, accordingly, the Company makes no representation or warranty in respect of this information. The following slides contain summaries of certain financial and statistical information about the Company. The information contained in this Presentation is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. We undertake no duty or obligation to publicly update or revise the information contained in this Presentation. TCG BDC is managed by Carlyle Global Credit Investment Management L.L.C. (the “Investment Adviser”), an SEC-registered investment adviser and a wholly owned subsidiary of The Carlyle Group Inc. (together with its affiliates, “Carlyle”). This Presentation contains information about the Company and certain of its affiliates and includes the Company’s historical performance. You should not view information related to the past performance of the Company as indicative of the Company’s future results, the achievement of which is dependent on many factors, many of which are beyond the control of the Company and the Investment Adviser and cannot be assured. There can be no assurances that future dividends will match or exceed historical rates or will be paid at all. Further, an investment in the Company is discrete from, and does not represent an interest in, any other Carlyle entity. Nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance of the Company or any other Carlyle entity. 2
TCG BDC Highlights Source: The Carlyle Group. As of December 31, 2021 unless otherwise stated. (1) TCG BDC is externally managed by the Investment Adviser, which is a wholly-owned subsidiary of The Carlyle Group. (2) As of February 18, 2022. 3 TCG BDC OVERVIEW • Middle-market lending oriented BDC externally managed by The Carlyle Group (1) • Current market capitalization of $727 million (2) (NASDAQ listed; ticker: CGBD) • Consistent track record of delivering sustainable income to shareholders, with earnings well in excess of base dividend and upside provided by regular recurring supplemental dividends INVESTMENT STRATEGY • Directly originate private credit investments with a focus on U.S. private equity finance • Maintain appropriately diversified, defensively constructed portfolio of primarily senior secured debt instruments • Utilize Carlyle's extensive platform resources to generate differentiated results for shareholders DEFENSIVELY POSITIONED PORTFOLIO • Well-diversified by issuer and industry: top 10 borrowers and top 3 industries are 20% and 29% of exposure, respectively • Heavily concentrated in first lien loans, of which ~90% contain a financial covenant • Approximately half the exposure of broader markets to cyclical industries BENEFITS OF CARLYLE • Founded in 1987, Carlyle is a leading global alternative asset manager with $301 billion of AUM • Carlyle’s Global Credit segment, with $73 billion of AUM, has a 21-year track record of successful leveraged finance market investing • Carlyle’s broad capabilities, scaled capital base, and depth of expertise create sustainable competitive advantages across market environments
• Net investment income was $0.40 per common share, again comfortably covering the base dividend of $0.32 • Continued improvement in watchlist names plus successful exits on equity co- investments resulted in net realized/unrealized gains of $11.5 million, or $0.22 per share • NAV per common share increased 1.6% to $16.91 per share at 4Q21, from $16.65 at 3Q21, and is 2.2% higher than the 4Q19 NAV of $16.56 prior to the onset of the pandemic • Overall credit performance remains strong and valuations of SolAero Technologies Corp. and Derm Growth Partners III showed significant improvement during 4Q21 • Total investments at fair value was $1.9 billion at 4Q21, down 1.8% compared to 3Q21 • Active deal environment resulted in new investment activity of $217 million with a weighted average yield on debt investments of 7.8% • Repayments of $222 million and strategic sales of $44 million, with a combined weighted average yield on debt investments of 7.7% • Subsequent to year end, exited our investment in SolAero Technologies Corp. at a level well in excess of 12/31 fair value Portfolio & Investment Activity Fourth Quarter Results • Paid 4Q21 base dividend of $0.32 plus a supplemental dividend of $0.07 per share, resulting in a LTM dividend yield of 8.9% based on quarter-end NAV • Declared 1Q22 base dividend of $0.32 plus a supplemental dividend of $0.08 per share • Share repurchases in 4Q21 totaled 0.6 million shares for $7.8 million, contributing $0.03 per share of accretion to net asset value • 4Q21 net financial leverage of 1.02x, down slightly from 3Q21 and at the lower end of 1.0x-1.4x target range Dividend & Capital Activity Q4 2021 Quarterly Results 4
Healthcare & Pharmaceuticals Aerospace & Defense High Tech Industries Hotel, Gaming & Leisure Software Business Services Banking, Finance, Insurance & Real Estate Investment Funds All Others Top 10 Investments Next 11-25 Investments Remaining Investments Investment Funds Portfolio Highlights Note: Totals may not sum due to rounding. (1) Excludes the Company’s commitments to fund capital to Middle Market Credit Fund, LLC ("Credit Fund"), which is not consolidated with the Company. (2) Weighted average yields of the debt investments include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of period end. Actual yields earned over the life of each investment could differ materially from the yields presented above. Weighted average yields for TCG BDC do not include TCG BDC’s investment in Credit Fund or Credit Fund II. (3) % of fair value of first and second lien debt. Total Investments and Commitments ($mm) $2,094 Unfunded Commitments (1) ($mm) $180 Total Investments at Fair Value ($mm) $1,913 Yield of Debt Investments at Cost (2) (%) 7.68 % Yield of Debt Investments at Fair Value (2) (%) 7.87 % Number of Investments 154 Number of Portfolio Companies 117 Floating / Fixed (3) (%) 98.4% / 1.6% 5 KEY STATISTICS ASSET MIX DIVERSIFICATION BY BORROWER INDUSTRY First Lien Debt Second Lien Debt Equity Investments Investment Funds
Financial Performance Summary Note: The net asset value per share and dividends declared per share are based on the common shares outstanding at each respective quarter-end. Net investment income per common share and net change in realized and unrealized appreciation (depreciation) per common share are based on the weighted average number of common shares outstanding for the period. Totals may not sum due to rounding. (1) Net of the preferred dividend. (2) Excludes equity investments. (3) Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of each respective period end. Actual yields earned over the life of each investment could differ materially from the yields presented above. (4) Reflects cumulative convertible preferred securities as equity, net of excess cash held at period end, which was $76.2 million on December 31, 2021. (5) Reflects cumulative convertible preferred securities as debt. These securities are considered "senior securities" for the purposes of calculating asset coverage pursuant to the Investment Company Act. (Dollar amounts in thousands, except per share data) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Key Metrics per Common Share Net Investment Income (1) $ 0.38 $ 0.36 $ 0.38 $ 0.39 $ 0.40 Net Realized & Unrealized Gains (Losses) 0.28 0.29 0.39 0.48 0.22 Net Income (Loss) 0.66 0.65 0.77 0.87 0.62 Dividends Paid 0.36 0.37 0.36 0.38 0.39 Impact of Share Repurchases 0.08 0.03 0.02 0.02 0.03 Net Asset Value $ 15.39 $ 15.70 $ 16.14 $ 16.65 $ 16.91 Common Shares Outstanding (in thousands) Weighted Average Shares Outstanding for the Period 55,961 55,039 54,538 53,955 53,466 Shares Outstanding at End of Period 55,320 54,809 54,210 53,714 53,142 Portfolio Highlights Total Investments at Fair Value $ 1,825,749 $ 1,841,634 $ 1,872,311 $ 1,948,206 $ 1,913,052 Number of Portfolio Companies 117 119 118 123 117 Average Size of Investment in Portfolio Company (Notional) (2) $ 16,200 $ 16,389 $ 16,533 $ 16,358 $ 16,800 Weighted Average all-in Yield on Debt Investments at Amortized Cost (3) 7.57 % 7.63 % 7.73 % 7.69 % 7.68 % Weighted Average all-in Yield on Debt Investments at Fair Value (3) 8.01 % 7.99 % 8.01 % 7.92 % 7.87 % Financial Position (at Quarter End) Net Assets $ 901,363 $ 910,520 $ 924,831 $ 944,394 $ 948,804 Debt $ 983,923 $ 945,475 $ 1,001,234 $ 1,061,815 $ 1,044,022 Net Financial Leverage (4) 1.06x 1.04x 1.03x 1.07x 1.02x Statutory Debt To Equity (5) 1.21x 1.16x 1.21x 1.25x 1.22x 6
Please refer to the Company’s Form 10-K for the year ended December 31, 2021 (“Form 10-K”) for more information. No assurance is given that the Company will continue to achieve comparable results. (1) Excludes activity related to the Investment Funds. (2) At quarter end. (3) Includes sales of $247 million to Credit Fund II at its formation. Origination Activity Detail (Dollar amounts in thousands and based on par/principal) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Originations and Net Investment Activity Investment Fundings $ 256,675 $ 151,422 $ 215,426 $ 276,955 $ 236,010 Unfunded Commitments, Net Change 24,184 (356) 27,255 6,582 (2,491) Sales and Repayments (400,016) (3) (149,050) (202,624) (215,120) (272,529) Net Investment Activity $ (119,157) $ 2,016 $ 40,057 $ 68,417 $ (39,010) Originations by Asset Type (1) First Lien Debt 82.3 % 65.0 % 85.2 % 78.6 % 83.1 % Second Lien Debt 17.2 % 34.6 % 5.8 % 21.3 % 5.8 % Equity Investments 0.5 % 0.4 % 9.0 % 0.2 % 11.1 % Total Investment Portfolio at Fair Value (2) First Lien Debt 67.0 % 66.6 % 66.5 % 65.5 % 64.4 % Second Lien Debt 15.6 % 16.3 % 16.7 % 18.1 % 17.9 % Equity Investments 1.9 % 1.9 % 2.9 % 2.7 % 4.0 % Investment Funds 15.5 % 15.2 % 13.9 % 13.7 % 13.7 % 7
Quarterly Operating Results Detail (1) Beginning October 1, 2017, the base management fee is calculated at an annual rat fee is calculated at an annual rate of 1.50% of the Company’s gross assets, excluding cash and cash equivalents but including assets acquired through the use of leverage. In addition, on August 6, 2018, the Company's Board of Directors approved a one-third (0.50%) reduction in the 1.50% annual base management fee rate charged by the Investment Adviser on assets financed using leverage in excess of 1.0x debt to equity. Effective July 1, 2018, the reduced annual fee of 1.00% applies to the average value of the Company's gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (i) 200% and (ii) the average value of the Company's net asset value at the end of the two most recently completed calendar quarters. (2) Effective October 1, 2017, the Investment Adviser agreed to charge 17.5% instead of 20% with respect to the entire calculation of the incentive fee. Note: There can be no assurance that we will continue to earn income at this rate and our income may decline. If our income declines, we may reduce the dividend we pay and the yield you earn may decline. Refer to the consolidated financial statements included in Part II, Item 8 of the Company’s Form 10-K for additional details. (Dollar amounts in thousands, except per share data) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Investment Income Interest income $ 32,242 $ 29,725 $ 30,443 $ 33,039 $ 32,225 Payment-In-Kind interest income 1,821 2,125 2,318 2,441 2,462 Income from Credit Funds 6,478 7,528 7,488 7,523 7,524 Other income 2,973 1,470 2,407 759 1,761 Total investment income $ 43,514 $ 40,848 $ 42,656 $ 43,762 $ 43,972 Expenses Management fees (1) $ 7,063 $ 6,800 $ 6,991 $ 7,233 $ 7,319 Incentive fees (2) 4,480 4,257 4,420 4,516 4,487 Interest expense and credit facility fees 8,562 7,494 7,560 7,954 7,745 Other expenses 1,466 1,494 1,909 1,810 1,616 Excise tax expense 34 124 139 163 356 Net expenses $ 21,605 $ 20,169 $ 21,019 $ 21,676 $ 21,523 Net investment income $ 21,909 $ 20,679 $ 21,637 $ 22,086 $ 22,449 Net realized and change in unrealized gains (losses) 16,254 15,225 21,231 25,534 11,512 Net income (loss) $ 38,163 $ 35,904 $ 42,868 $ 47,620 $ 33,961 Net investment income per Common Share $ 0.38 $ 0.36 $ 0.38 $ 0.39 $ 0.40 Net income (loss) per Common Share $ 0.66 $ 0.65 $ 0.77 $ 0.87 $ 0.62 8
Quarterly Balance Sheet Detail Please refer to the Company’s Form 10-K for more information. (Dollar amounts in thousands, except per share data) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Assets Investments—non-controlled/non-affiliated, at fair value $ 1,509,271 $ 1,528,400 $ 1,579,256 $ 1,643,584 $ 1,607,731 Investments—non-controlled/affiliated, at fair value 26,180 27,650 28,562 30,410 30,286 Investments—controlled/affiliated, at fair value 290,298 285,584 264,493 274,212 275,035 Total investments, at fair value 1,825,749 1,841,634 1,872,311 1,948,206 1,913,052 Cash, cash equivalents and restricted cash 68,419 35,493 59,404 46,164 93,074 Receivable for investment sold/repaid 4,313 1,192 5,769 23,235 530 Deferred financing costs 3,633 3,502 3,386 3,256 3,066 Interest Receivable from non-controlled/non-affiliated Investments 12,634 12,948 11,388 13,486 11,011 Interest Receivable from non-controlled/affiliated Investments 569 580 578 581 611 Interest and Dividend Receivable from controlled/affiliated Investments 6,480 7,925 7,961 7,866 8,522 Prepaid expenses and other assets 816 813 1,369 1,376 1,484 Total assets $ 1,922,613 $ 1,904,087 $ 1,962,166 $ 2,044,170 $ 2,031,350 Liabilities & Net Assets Secured borrowings $ 347,949 $ 309,397 $ 365,060 $ 425,545 $ 407,655 2015-1R Notes payable, net of unamortized debt issuance costs 446,536 446,598 446,659 446,721 446,783 Senior Notes, net of unamortized debt issuance costs 189,438 189,480 189,515 189,549 189,584 Payable for investments purchased 809 12,818 875 68 323 Interest and credit facility fees payable 2,439 2,427 2,463 3,045 2,467 Dividend payable 19,892 20,280 19,502 20,388 20,705 Base management and incentive fees payable 11,549 11,047 11,391 11,752 11,819 Administrative service fees payable 85 202 373 661 482 Other accrued expenses and liabilities 2,553 1,318 1,497 2,047 2,728 Total liabilities $ 1,021,250 $ 993,567 $ 1,037,335 $ 1,099,776 $ 1,082,546 Net assets $ 901,363 $ 910,520 $ 924,831 $ 944,394 $ 948,804 Total liabilities & net assets $ 1,922,613 $ 1,904,087 $ 1,962,166 $ 2,044,170 $ 2,031,350 Net Asset Value Per Common Share $ 15.39 $ 15.70 $ 16.14 $ 16.65 $ 16.91 9
Portfolio Composition - Credit FundCredit Fund Key Statistics - Credit Fund Diversification by Borrower Investment Funds Update (14% of TCG BDC Portfolio) (1) Weighted average yields at cost of the debt investments include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of period end. Actual yields earned over the life of each investment could differ materially from the yields presented above. (2) First lien, excluding loans categorized as first lien last out, as a % of fair value. (3) % of fair value of first and second lien debt. Total Investments and Commitments ($mm) $1,007 Unfunded Commitments ($mm) $80 Total Investments at Fair Value ($mm) $927 Yield of Debt Investments (%) (1) 6.0 % Number of Investments 47 First Lien Exposure (%) 100% Floating / Fixed (%) (2) 100.0% / 0.0% Dividend Yield to TCG BDC 10 % Industry 10 Credit Fund Key Statistics - Credit Fund II Portfolio Composition - Credit Fund II Diversification by Borrower Industry Total Investments and Commitments ($mm) $239 Unfunded Commitments ($mm) $0 Investments at Fair Value ($mm) $239 Yield of Debt Investments (%) (1) 7.3 % Number of Investments 44 First Lien Exposure (%) (2) 87% Floating / Fixed (%) (3) 97.7% / 2.3% Dividend Yield to TCG BDC 13 % Key Statistics - Credit Fund
Note: The net asset value per share and dividends declared per share are based on the shares outstanding at each respective quarter-end. Net investment income per share and net change in realized and unrealized appreciation (depreciation) per share are based on the weighted average number of shares outstanding for the period. Net investment income is also net of the preferred dividend. Totals may not sum due to rounding. Net Asset Value Per Share Bridge Full Year 2021Q4 2021 11 $16.65 $0.40 $(0.39) $0.22 $0.03 $16.91 September 30, 2021 NAV Net Investment Income Dividend Declared Net Realized and Unrealized Gain (Loss) Impact of Share Repurchases December 31, 2021 NAV $15.39 $1.53 $(1.50) $1.36 $0.10 $16.91 December 31, 2020 NAV Net Investment Income Dividend Declared Net Realized and Unrealized Gain (Loss) Impact of Share Repurchases December 31, 2021 NAV
• As of December 31, 2021, four borrowers were on non-accrual status, representing 4.0% of total investments at fair value and 5.1% at amortized cost. Risk Rating Distribution 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 bases 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. Portfolio Risk Ratings (Dollar amounts in millions) June 30, 2021 September 30, 2021 December 31, 2021 Internal Risk Rating Fair Value % of Fair Value Fair Value % of Fair Value Fair Value % of Fair Value 1 $6.0 0.4 % $3.8 0.2 % $3.8 0.2 % 2 1,157.7 74.3 % 1,245.1 76.5 % 1,205.5 76.6 % 3 333.7 21.4 % 311.8 19.2 % 299.5 19.0 % 4 26.5 1.7 % 28.1 1.7 % 27.6 1.8 % 5 35.2 2.3 % 39.4 2.4 % 37.5 2.4 % Total $1,559.1 100.0 % $1,628.1 100.0 % $1,573.9 100.0 % 12
(1) Refer to Notes 7 and 8 to the consolidated financial statements included in Part II, Item 8 of the Company's Form 10-K for additional details. (2) Size represents maximum principal amount of the facility and is subject to availability under the facility, which is based on certain advance rates multiplied by the value of certain portfolio investments of the Company or Credit Fund (subject to certain concentration limitations) and may be net of certain other indebtedness that the Company, Credit Fund or Credit Fund II may incur in accordance with the terms of the facility. Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”) is a wholly-owned subsidiary of Credit Fund and is consolidated in Credit Fund’s consolidated financial statements. (3) Weighted average interest rate, including amortization of debt issuance costs on the 2015-1R Notes and 2019-2 Notes, respectively, for the quarter ended December 31, 2021. (4) Carlyle Direct Lending CLO 2015-1R LLC, the issuer, is a wholly-owned and consolidated subsidiary of the Company. (5) MMCF Warehouse II, LLC, is a wholly-owned and consolidated subsidiary of Credit Fund. (6) Middle Market Credit Fund II SPV, LLC (the "Credit Fund II Sub") is a wholly-owned and consolidated subsidiary of Credit Fund II. (7) Pricing varies by class under the terms of the facility agreement. (8) Refer to Note 10 to the consolidated financial statements included in Part II, Item 8 of the Company's Form 10-K for additional details. Funding and Capital Management Overview Size Original Tenor / Maturity Date Pricing Credit Facility (2) $688 million 5 years (4 year revolving); maturity date 10/28/25 L+2.25% / 37.5 bps unused fee 2015-1R Notes (2) (4) $449 million 10/15/2031 2.27% (3) 2019 Senior Unsecured Notes $115 million 12/31/2024 4.75% Fixed 2020 Senior Unsecured Notes $75 million 12/31/2024 4.50% Fixed Credit Fund Sub Facility (2) $640 million 6 years (3 years revolving); maturity date 5/22/2024 L+2.25% / 50-75 bps unused fee Credit Fund Warehouse II Facility(5) $150 million 3 years (2 years revolving); maturity date 8/16/2022 L+1.50% Credit Fund II Sub Facility (6) $158 million 11/3/2030 L+2.73% (7) Overview of Financing Facilities (1) 13 79% 39% % of Committed Balance Sheet Leverage Utilized % of Utilized Balance Sheet Leverage Mark-To-Market Cumulative Convertible Preferred Stock (8) Price Shares Outstanding Dividend Convertible Feature $25 per share / $50 million total 2,000,000 7.0% Cash or 9.0% PIK Convertible at the option of the holder at the Liquidation Preference divided by $9.46