Carlyle Credit Income Fund Announces First Quarter 2024 Financial Results and Declares 5.63% Increase to Monthly Common Dividends
- Successful deployment of over $40 million in CLO equity positions with a weighted average GAAP yield of 26%.
- Increased monthly dividend to 10.5 cents per share through May 2024, equating to a 15.91% annualized dividend based on share price as of February 28, 2024.
- Issued 8.75% Series A Term Preferred Stock due 2028 to meet target leverage of 0.25x – 0.40x, totaling $52 million through multiple issuances.
- Net investment income for the first quarter of 2024 was $0.24 per common share, with a net asset value per common share of $7.99 on December 31, 2023.
- Total fair value of investments was $127.3 million as of December 31, 2023.
- Declared monthly dividends on common stock and 8.75% Series A Term Preferred Shares for March, April, and May 2024.
- Hosting a conference call on March 1, 2024, to discuss first quarter financial results.
- None.
The Carlyle Credit Income Fund's (CCIF) announcement of its first quarter financial results and portfolio reallocation into equity tranches of Collateralized Loan Obligations (CLOs) signifies a strategic shift that could potentially enhance its risk-return profile. The increase in the monthly common dividend to 10.5 cents per share, supported by a net investment income, reflects a strong performance and a commitment to deliver shareholder value. This is particularly notable given the high annualized dividend yield of 15.91%, which is substantially above the average for fixed-income investments, indicating a robust income-generating capability of the fund.
CCIF's leverage strategy, with a target leverage of 0.25x – 0.40x, is conservative relative to some industry standards, which could imply a cautious approach to risk management. The issuance of 8.75% Series A Term Preferred Stock is an interesting move, as it locks in a fixed cost of capital, which could be advantageous if interest rates decline or remain stable. However, investors should be mindful of the interest rate risk and the potential impact on the fund's net asset value (NAV), especially in a rising rate environment.
The deployment of over $40 million into CLO equity positions by CCIF and the increase in portfolio weighted average GAAP yield to 20.3% as of December 31, 2023, indicates an aggressive pursuit of high-yield assets. This strategy can be attractive to investors seeking higher returns in a low-interest-rate environment, but it also carries inherent risks associated with CLOs, such as credit risk and liquidity risk. The fund's ability to achieve a weighted average GAAP yield of 26% on the newly deployed capital signifies a strong performance against the backdrop of the current credit market conditions.
Investors should also consider the fund's NAV of $7.99 per common share when evaluating the investment's attractiveness. The total fair value of investments at $127.3 million provides a snapshot of the fund's underlying assets and should be weighed against the potential volatility of the high-yield debt market. The fund's strategy and performance metrics will be of interest to those monitoring the credit markets and seeking insights into the behavior of income funds in this segment.
The issuance of the 8.75% Series A Term Preferred Stock due 2028 by CCIF requires careful consideration of the terms and regulatory implications. The 'green shoe' option partially exercised by underwriters indicates a provision that allows the increase in the number of shares offered, which can be a sign of healthy demand for the fund's preferred shares. However, investors should be aware of the covenants and rights associated with these preferred shares, as they can affect the overall return profile of the investment.
The fund's adherence to its mandate and strategy, as highlighted by the CEO, is critical for investor confidence. Compliance with regulatory requirements, especially in terms of leverage and dividend distributions, is essential for maintaining the fund's reputation and avoiding potential legal and financial repercussions. The legal framework governing CLOs and preferred shares issuance should be transparent to investors, ensuring that they are fully informed of their rights and the risks associated with their investment.
Lauren Basmadjian, CCIF's Chief Executive Officer said, "We are pleased with our results over the past quarter and the completion of the reallocation of the portfolio into equity tranches of CLOs, which is in alignment with Carlyle's strategy and the fund's mandate. With the successful deployment of the portfolio, we are increasing the monthly common dividend to
Over the past quarter, the Fund has successfully:
- Deployed over
$40 million 26% , increasing portfolio weighted average GAAP yield to20.3% as of December 31, 2023; - Declared and increased the monthly dividend to
10.5 cents through May 2024, equating to a15.91% annualized dividend based on share price as of February 28, 2024; - Leveraged the fund to meet target leverage of 0.25x – 0.40x through the issuance of
8.75% Series A Term Preferred Stock due 2028. CCIF issued$52 million $30 million $2 million $20 million
Net investment income for the first quarter of 2024 was
Dividends
CCIF is declaring a monthly dividend on shares of the Fund's common stock of
Security | Amount per Share | Record Dates | Payable Dates |
Common Stock | March 18, 2024 | March 28, 2024 | |
April 18, 2024 | April 30, 2024 | ||
May 20, 2024 | May 31, 2024 |
CCIF is also pleased to announce the declaration of dividends on shares of the Fund's
Security | Amount per Share | Record Dates | Payable Dates |
Series A Preferred Shares | March 18, 2024 | March 28, 2024 | |
April 18, 2024 | April 30, 2024 | ||
May 20, 2024 | May 31, 2024 |
Conference Call
The Fund will host a conference call at 10:00 a.m. EDT on Friday, March 1, 2024 to discuss its first quarter financial results. Please register for the conference call here. The conference call information will also be available via a link on Carlyle Credit Income Fund's website and the recording will be available on our website soon after the call's completion.
About Carlyle Credit Income Fund
Carlyle Credit Income Fund (NYSE: CCIF) is an externally managed closed-end fund focused on investing in primarily equity and junior debt tranches of collateralized loan obligations ("CLOs"). The CLOs are collateralized by a portfolio consisting primarily of
Web: www.carlylecreditincomefund.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.
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SOURCE Carlyle Credit Income Fund
FAQ
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