Carlyle Credit Income Fund Announces First Quarter 2024 Financial Results and Declares 5.63% Increase to Monthly Common Dividends

Rhea-AI Summary

Carlyle Credit Income Fund (CCIF) announces strong financial results for the first quarter of 2024, including a successful deployment of over $40 million in CLO equity positions, an increased monthly dividend to 10.5 cents per share, and the issuance of 8.75% Series A Term Preferred Stock.

Positive

• 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.

Negative

• None.

Insights

Financial Analyst

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.

Market Research Analyst

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.

Legal Expert

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.

NEW YORK, Feb. 29, 2024 /PRNewswire/ -- Carlyle Credit Income Fund ("we," "us," "our," "CCIF" or the "Fund") (NYSE: CCIF) today announced its financial results for its first quarter ending December 31, 2023. The full detailed presentation of the Fund's first quarter 2024 financial results can be viewed on the Fund's website carlylecreditincomefund.com/investor-dashboard.

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 10.5 cents per share. We expect the higher monthly dividend will be fully covered by net investment income. Carlyle remains highly committed to the success of CCIF with a 41% ownership in the Fund."

Over the past quarter, the Fund has successfully:

• Deployed over $40 million in CLO equity positions with a weighted average GAAP yield of 26%, increasing portfolio weighted average GAAP yield to 20.3% as of December 31, 2023;
  
  
• Declared and increased the monthly dividend to 10.5 cents through May 2024, equating to a 15.91% 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 total through the initial issuance of $30 million on October 18, an incremental $2 million through underwriters partially exercising the green shoe, and a $20 million add-on priced on November 21.

Net investment income for the first quarter of 2024 was $0.24 per common share and net asset value per common share was $7.99 on December 31, 2023. Net investment income in the first quarter was suppressed as the Fund did not achieve its target leverage until late November. Proceeds from the preferred offering were deployed through the end of the quarter. The total fair value of investments was $127.3 million as of December 31, 2023.

Dividends

CCIF is declaring a monthly dividend on shares of the Fund's common stock of $0.1050 per share for March, April, and May 2024. The monthly dividend represents an annualized yield of 15.91% based on closing share price of $7.92 on February 28, 2024.

Security	Amount per Share	Record Dates	Payable Dates
Common Stock	$0.1050	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 8.75% Series A Term Preferred Shares of $0.1823 per share for March, April, and May 2024.

Security	Amount per Share	Record Dates	Payable Dates
Series A Preferred Shares	$0.1823	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 U.S. senior secured loans with a large number of distinct underlying borrowers across various industry sectors. CCIF is externally managed by Carlyle Global Credit Investment Management L.L.C. ("CGCIM"), an SEC-registered investment adviser and wholly owned subsidiary of Carlyle. CCIF draws upon the significant scale and resources of Carlyle as one of the world's largest CLO managers.

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

What was the weighted average GAAP yield of CLO equity positions deployed by CCIF?

CCIF deployed CLO equity positions with a weighted average GAAP yield of 26%.

What is the increased monthly dividend per share announced by CCIF?

CCIF increased the monthly dividend to 10.5 cents per share through May 2024.

How much Series A Term Preferred Stock did CCIF issue to meet target leverage?

CCIF issued $52 million in 8.75% Series A Term Preferred Stock to meet target leverage.

What was the net investment income per common share for the first quarter of 2024?

The net investment income per common share for the first quarter of 2024 was $0.24.

What was the net asset value per common share of CCIF on December 31, 2023?

The net asset value per common share of CCIF was $7.99 on December 31, 2023.

What was the total fair value of investments held by CCIF as of December 31, 2023?

The total fair value of investments held by CCIF was $127.3 million as of December 31, 2023.

What are the record and payable dates for the monthly dividend on CCIF's common stock?

The monthly dividend on CCIF's common stock of $0.1050 per share will be payable on March 28, April 30, and May 31, 2024.

When will CCIF host a conference call to discuss its first quarter financial results?

CCIF will host a conference call on March 1, 2024, at 10:00 a.m. EDT to discuss its first quarter financial results.