Stock Analysis & Valuation Carlyle Secured Lending, Inc. 8.20% Notes due 2028 (CGBDL)

• Previous Close: $0.00
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	47.22	n/a
Intrinsic value (DCF)	9.89	n/a
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Carlyle Secured Lending, Inc. (NASDAQ: CGBDL) is a specialized finance company focused on providing flexible lending solutions to middle-market companies in the U.S., particularly those backed by private equity sponsors. Operating within the Financial Services sector, the company targets industries with defensive strategies and long-term market leadership, offering secured debt instruments such as its 8.20% Notes due 2028. With a market capitalization exceeding $1 billion, Carlyle Secured Lending leverages its affiliation with The Carlyle Group to source and manage high-quality credit opportunities. The company’s disciplined underwriting and focus on sponsor-backed businesses position it as a key player in middle-market lending. Investors are drawn to its stable revenue streams, strong dividend yield, and exposure to the growing private credit market.

Investment Summary

Carlyle Secured Lending presents an attractive fixed-income investment opportunity with its 8.20% Notes due 2028, offering a high yield in a low-interest-rate environment. The company benefits from its affiliation with The Carlyle Group, providing access to a robust pipeline of middle-market lending opportunities. However, risks include exposure to credit defaults in its middle-market portfolio and interest rate sensitivity. The company’s strong dividend payout (currently $2.05 per share) and stable cash flows mitigate some risks, but investors should weigh the trade-off between yield and credit risk. With a negative beta (-0.017), the stock exhibits low correlation to broader equity markets, making it a potential hedge in volatile conditions.

Competitive Analysis

Carlyle Secured Lending differentiates itself through its affiliation with The Carlyle Group, which provides proprietary deal flow and deep industry expertise in middle-market lending. The company’s focus on sponsor-backed businesses enhances underwriting quality, as private equity sponsors often provide additional oversight and capital support. Its secured lending approach reduces risk compared to unsecured lenders, while its defensive industry focus (e.g., healthcare, business services) provides resilience in economic downturns. However, competition is intense from both traditional BDCs (e.g., Ares Capital, FS KKR Capital) and private credit funds. Carlyle’s ability to offer flexible, bespoke financing solutions gives it an edge, but its reliance on floating-rate loans exposes it to margin compression if interest rates decline. The company’s low beta suggests it is less sensitive to market swings, appealing to risk-averse investors.

Major Competitors

• Ares Capital Corporation (ARCC): Ares Capital is the largest BDC by market cap, with a diversified portfolio and strong access to capital markets. It benefits from scale and a lower cost of funding but may lack the niche focus of Carlyle’s sponsor-backed strategy. Its larger size can lead to less flexibility in structuring deals.
• FS KKR Capital Corp. (FSK): FS KKR is another major BDC with a focus on middle-market lending. It has a broad portfolio but faces higher leverage ratios than Carlyle. Its partnership with KKR provides deal flow, though Carlyle’s tighter sponsor relationships may offer better underwriting selectivity.
• Hercules Capital, Inc. (HTGC): Hercules specializes in venture debt and growth-stage lending, differing from Carlyle’s focus on mature, sponsor-backed companies. Its tech-heavy portfolio offers higher growth potential but carries greater volatility compared to Carlyle’s defensive industries.