CGBD

MKT CAP $703.2MP/E 20.4DIV YIELD —FCF YIELD —REV TTM —NET INCOME $37M −46.9%NET DEBT $1.2B52W 9.99 – 13.13SEC XBRL · TTM TO Invalid Date

How CGBD rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

49%

of sentences unchanged

Added

266

new sentences

Dropped

286

sentences removed

Length

−710

words, now 30,050

New in FY2025

These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations. • Inflation has adversely affected and may continue to adversely affect the business, results of operations and financial condition of our portfolio companies. • Economic recessions or downturns could impair our portfolio companies and harm our operating results. • We are dependent upon the Investment Adviser for our future success, and there are significant potential conflicts of interest that could impact our investment returns. • Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively. • We may need to raise additional capital to grow because we must distribute most of our income. • Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation. • Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital.
As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage. • The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock. • We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us. • We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. • If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, certain U.S. stockholders will be treated as having received a dividend from us. • Provisions of the Maryland General Corporation Law (“MGCL”) and of our Charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock. • Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval. • We are highly dependent on information systems, and systems failures could significantly disrupt our business. • Cybersecurity risks and cyber incidents may adversely affect our business, results of operations or those of our portfolio companies. • Use of artificial intelligence technology by us could lead to the exposure of our data or other adverse effects and increase competitive, operational, legal, and regulatory risks in ways that we cannot predict. • Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies. • We are subject to certain risks as a result of our direct interest in the 2015-1 Issuer Preferred Interests (as defined below).
Table of C ontents Risks Related to Our Investments • Our investments are risky and speculative, generally illiquid and typically do not have a readily available market price. • We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates. • Our portfolio companies may be highly leveraged and may incur debt that ranks equally with, or senior to, some of our investments in such companies, and our investment portfolio may be concentrated in a limited number of portfolio companies and industries. • Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our NAV through increased net unrealized depreciation. • To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies. • The financial projections of our portfolio companies could prove inaccurate, and the due diligence investigation that the Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. • Our portfolio companies prepay loans from time to time, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields. • Our ability to enter into transactions with Carlyle and our other affiliates is restricted. • Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies. • There are certain risks associated with holding debt obligations that have original issue discount or payment-in-kind interest. • Tariffs may adversely affect us or our portfolio companies.
Risks Related to an Investment in Our Securities • Investing in our securities involves a high degree of risk and the market price of our securities may fluctuate significantly. • Our shares of common stock have traded at a discount to NAV and may do so again. • Holders of any preferred stock we may issue may have the right to elect members of the board of directors and class voting rights on certain matters. • Purchases of our common stock under our stock repurchase program, including the Company 10b5-1 Plan (as defined below), may have resulted in the price of our common stock being higher than the price that otherwise might have existed in the open market. • Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock. • If current economic and market conditions continue to contribute to capital market disruption and instability, there is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to our stockholders may be a return of capital for U.S. federal income tax purposes. • We cannot assure that an active trading market for the 2030 Notes (as defined below) and 2031 Notes (as defined below) will develop or be maintained. • We may not be able to repurchase the 2030 Notes or 2031 Notes upon a Change of Control Repurchase Event (as defined below). • We may choose to redeem the 2030 Notes and 2031 Notes when prevailing interest rates are relatively low.
Table of C ontents Risk Factors An investment in the Company involves a high degree of risk.
Over the last several years, markets have been affected by an elevated interest rate environment as a result of inflation and continued geopolitical tensions (including the Israeli-Palestinian conflict and the ongoing military conflict between Russia and Ukraine).
These events, as well as broader political uncertainty related to tariffs and global trade negotiations, geopolitical tensions, dissemination of misinformation and the use of new technologies, such as AI, and the risk of a global health pandemic, have contributed to unpredictable general economic conditions that are materially and adversely impacting the broader financial and credit markets.
While the current U.S. administration has signaled a reduced emphasis on regulation, past U.S. administrations supported an enhanced regulatory agenda.
Changes in regulation can impose greater costs on certain sectors, including financial services, or otherwise impact the competitive environment for obligors, which could adversely impact us.
Geopolitical events can lead to military or other conflicts or sanctions that could adversely impact obligors who are sanctioned persons, are located in a sanctioned country or a country that is involved in a conflict, or who do business with a sanctioned person or country or with a country that is involved in a conflict.
Conversely, changes in enforcement priorities could impact the ability or cost of doing business in particular jurisdictions.
The impact of downgrades by rating agencies to the U.S. government’s sovereign credit rating or its perceived creditworthiness as well as actual or potential government shutdowns and uncertainty surrounding transfers of power could adversely affect the U.S. and global financial markets and economic conditions.
In addition, the fiscal policy of large foreign nations may have a severe impact on the worldwide and U.S. financial markets.
Increases to budget deficits or direct and contingent sovereign debt may create concerns about the ability of certain nations to service their sovereign debt obligations Table of C ontents and any risks resulting from any such debt crisis in Europe, the U.S. or elsewhere could have a detrimental impact on the global economy, sovereign and non-sovereign debt in certain countries and the financial condition of financial institutions generally.
We cannot predict the effects of these or similar events in the future on the U.S. and global economies and securities markets or on our investments.
We monitor developments in economic, political and market conditions and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so.
The Federal Reserve raised the Federal Funds Rate throughout 2022 and 2023 before it cut the Federal Funds Rate multiple times in 2024 and 2025.
Table of C ontents We are dependent upon the Investment Adviser for our future success.
We depend on the diligence, skill, judgment and network of business contacts of the Investment Adviser’s investment professionals and the Carlyle Direct Lending platform to source appropriate investments for us.
We depend on members of the Investment Adviser’s investment team to appropriately analyze our investments and the Investment Committee to approve and monitor our middle market portfolio investments.
The loss of any senior investment professionals to which the Investment Adviser has access, including members of the Investment Committee, or a significant number of the investment professionals of the Investment Adviser, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results of operations.
The market for qualified professionals is extremely competitive across levels and areas of expertise, and the Investment Adviser may not be successful in its efforts to recruit, retain and motivate these professionals.
In addition, the Investment Adviser has seen increased focus by prospective candidates on hybrid work arrangements and arrangements providing more flexibility, including around location.
If the Investment Adviser’s approach to in-office and remote-work arrangements is not perceived as favorable as compared to the arrangements offered by competitors, it may experience an even further increase in competition for talent and it may be difficult to recruit and retain investment professionals.
The Investment Adviser has experienced upward pressure on compensation packages given the increased competition to hire and retain talented personnel.
Even when the Investment Adviser offers top-of-market compensation packages, it may not be able to attract and retain all of their desired personnel due to shifting workforce priorities.
In addition, we cannot assure you that the Investment Adviser will remain the investment adviser or that we will continue to have access to Carlyle’s investment professionals or its information and deal flow.
If, due to extraordinary market conditions or other reasons, we and other funds managed by the Investment Adviser or its affiliates were to incur substantial losses, the revenues of the Investment Adviser and its affiliates may decline substantially.
Such losses may hamper the Investment Adviser's and its affiliates' ability to provide the same level of service to us as it would have.
Further, there can be no assurance that the Investment Adviser will replicate Carlyle’s historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other Carlyle-managed funds.
There are significant potential conflicts of interest, including the management of other investment funds and accounts by the Investment Adviser, which could impact our investment returns and the holders of our common stock.
Our executive officers and directors, other current and future principals of the Investment Adviser and certain members of the Investment Committee currently serve, and may continue to serve, as officers, directors or principals of other entities and affiliates of the Investment Adviser and funds managed by our affiliates that operate in the same or a related line of business as we do.
Currently, our executive officers, as well as the other principals of the Investment Adviser manage other funds affiliated with Carlyle, including other existing and future affiliated BDCs.
In addition, the Investment Adviser’s investment team has responsibilities for sourcing and managing investments for certain other investment funds and accounts.
Although the professional staff of the Investment Adviser will devote as much time to our management as appropriate to enable the Investment Adviser to perform its duties in accordance with the Investment Advisory Agreement, the investment professionals of the Investment Adviser may have conflicts in allocating their time and services among us, on the one hand, and investment vehicles managed by Carlyle or one or more of its affiliates on the other hand.
The Investment Adviser and its affiliated investment managers may face conflicts in allocating investment opportunities between us and affiliated investment vehicles that have overlapping objectives with ours.
For example, certain affiliated investment vehicles may have arrangements that provide for higher management or incentive fees, greater expense reimbursements or overhead allocations, or permit the Investment Adviser and its affiliates to receive transaction fees not permitted under the Investment Company Act, all of which may contribute to this conflict of interest and create an incentive for the Investment Adviser or its affiliated investment managers to favor such other accounts.
Furthermore, the Investment Adviser and its affiliated investment managers may form vehicles for the benefit of third-party investors that will be entitled to a portion of the allocation with respect to an investment.
Although the Investment Adviser will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by Table of C ontents investment funds managed by the Investment Adviser or an investment manager affiliated with the Investment Adviser, including Carlyle.
In such a situation, Carlyle or the Investment Adviser may also have a conflict in the allocation of its own resources to our portfolio company.

and 226 more.

Gone since FY2024

These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which have had and may continue to have a negative impact on our business and operations. • Inflation has adversely affected and may continue to adversely affect the business, results of operations and financial condition of our portfolio companies. • Economic recessions or downturns could impair our portfolio companies and harm our operating results. • We are dependent upon our Investment Adviser for our future success, and there are significant potential conflicts of interest that could impact our investment returns. • Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively. • We may need to raise additional capital to grow because we must distribute most of our income. • Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation. • Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital.
As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage. • The NAV per share of our common stock may be diluted if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock. • We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us. • We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. • If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, certain U.S. stockholders will be treated as having received a dividend from us. • Provisions of the Maryland General Corporation Law (“MGCL”) and of our Charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock. • Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval. • We are highly dependent on information systems, and systems failures could significantly disrupt our business. • Cybersecurity risks and cyber incidents may adversely affect our business, results of operations or those of our portfolio companies. • Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies. • We are subject to certain risks as a result of our direct interest in the 2015-1 Issuer Preferred Interests.
Risks Related to Our Investments • Our investments are risky and speculative, generally illiquid and typically do not have a readily available market price. • We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates. • Our portfolio companies may be highly leveraged and may incur debt that ranks equally with, or senior to, some of our investments in such companies, and our investment portfolio may be concentrated in a limited number of portfolio companies and industries. • Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our NAV through increased net unrealized depreciation. • To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies. • The financial projections of our portfolio companies could prove inaccurate, and the due diligence investigation that our Investment Adviser carries out with respect to an investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. • Our portfolio companies prepay loans from time to time, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields. • Our ability to enter into transactions with Carlyle and our other affiliates is restricted. • Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies. • There are certain risks associated with holding debt obligations that have original issue discount or payment-in-kind interest.
Risks Related to an Investment in Our Securities • Investing in our securities involves a high degree of risk and the market price of our securities may fluctuate significantly. • Our shares of common stock have traded at a discount to NAV and may do so again. • Purchases of our common stock under our stock repurchase program, including a Company 10b5-1 Plan, may have resulted in the price of our common stock being higher than the price that otherwise might have existed in the open market. • Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock. • If current economic and market conditions continue to contribute to capital market disruption and instability, there is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to our stockholders may be a return of capital for U.S. federal income tax purposes. • We cannot assure that an active trading market for the 2028 Notes (as defined below) or the 2030 Notes (as defined below) will develop or be maintained. • We may not be able to repurchase the 2030 Notes upon a Change of Control Repurchase Event.
(as defined below) • We may choose to redeem the 2028 Notes and 2030 Notes when prevailing interest rates are relatively low.
Risks Relating to the Mergers • Sales of shares of our common stock after the completion of the Mergers may cause the trading price of our common stock to decline. • Most of our stockholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Mergers. • We may be unable to realize the benefits anticipated by the Mergers, including estimated cost savings, or it may take longer than anticipated to achieve such benefits. • The Mergers are subject to closing conditions, including stockholder approvals, that, if not satisfied or (to the extent legally allowed) waived, will result in the Mergers not being completed, which may result in material adverse consequences to our business and operations. • We may, to the extent legally allowed, waive one or more conditions to the Mergers without resoliciting stockholder approval. • We will be subject to operational uncertainties and contractual restrictions while the Mergers are pending. • The market price of our common stock after the Mergers may be affected by factors different from those affecting our common stock currently. • Litigation against us, CSL III, or the members of our Board of Directors and CSL III’s board of trustees, could prevent or delay the completion of the Mergers or result in the payment of damages following completion of the Mergers.
Risk Factors An investment in the Company involves a high degree of risk.
Over the last several years, markets have been affected by an elevated interest rate environment as a result of inflation and continued geopolitical tensions (including Russia’s military invasion of Ukraine and the war between Israel and Hamas).
These events have contributed to unpredictable general economic conditions that are materially and adversely impacting the broader financial and credit markets.
Increases to budget deficits or direct and contingent sovereign debt may create concerns about the ability of certain nations to service their sovereign debt obligations and any risks resulting from any such debt crisis in Europe, the U.S. or elsewhere could have a detrimental impact on the global economy, sovereign and non-sovereign debt in certain countries and the financial condition of financial institutions generally.
Additionally, the Federal Reserve raised the Federal Funds Rate throughout 2022, 2023 and part of 2024 before it cut the Federal Funds Rate multiple times at the end of 2024.
We are dependent upon our Investment Adviser for our future success.
We depend on the diligence, skill, judgment and network of business contacts of our Investment Adviser’s investment professionals and the Carlyle Direct Lending platform to source appropriate investments for us.
We depend on members of our Investment Adviser’s investment team to appropriately analyze our investments and the Investment Committee to approve and monitor our middle market portfolio investments.
The loss of any senior investment professionals to which our Investment Adviser has access, including members of the Investment Committee, or a significant number of the investment professionals of our Investment Adviser, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results of operations.
The market for qualified professionals is extremely competitive across levels and areas of expertise, and our Investment Adviser may not be successful in its efforts to recruit, retain and motivate these professionals.
In addition, our Investment Adviser has seen increased focus by prospective candidates on hybrid work arrangements and arrangements providing more flexibility, including around location.
If our Investment Adviser’s approach to in-office and remote-work arrangements is not perceived as favorable as compared to the arrangements offered by competitors, it may experience an even further increase in competition for talent and it may be difficult to recruit and retain investment professionals.
Our Investment Adviser has experienced upward pressure on compensation packages given the increased competition to hire and retain talented personnel.
Even when our Investment Adviser offers top-of-market compensation packages, it may not be able to attract and retain all of their desired personnel due to shifting workforce priorities.
In addition, we cannot assure you that our Investment Adviser will remain our investment adviser or that we will continue to have access to Carlyle’s investment professionals or its information and deal flow.
If, due to extraordinary market conditions or other reasons, we and other funds managed by our Investment Adviser or its affiliates were to incur substantial losses, the revenues of our Investment Adviser and its affiliates may decline substantially.
Such losses may hamper our Investment Adviser's and its affiliates' ability to provide the same level of service to us as it would have.
Further, there can be no assurance that our Investment Adviser will replicate Carlyle’s historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other Carlyle-managed funds.
There are significant potential conflicts of interest, including the management of other investment funds and accounts by our Investment Adviser, which could impact our investment returns and the holders of our common stock.
Our executive officers and directors, other current and future principals of our Investment Adviser and certain members of the Investment Committee currently serve, and may continue to serve, as officers, directors or principals of other entities and affiliates of our Investment Adviser and funds managed by our affiliates that operate in the same or a related line of business as we do.
Currently, our executive officers, as well as the other principals of our Investment Adviser manage other funds affiliated with Carlyle, including other existing and future affiliated BDCs.
In addition, our Investment Adviser’s investment team has responsibilities for sourcing and managing investments for certain other investment funds and accounts.
Although the professional staff of our Investment Adviser will devote as much time to our management as appropriate to enable our Investment Adviser to perform its duties in accordance with the Investment Advisory Agreement, the investment professionals of our Investment Adviser may have conflicts in allocating their time and services among us, on the one hand, and investment vehicles managed by Carlyle or one or more of its affiliates on the other hand.
Our Investment Adviser and its affiliated investment managers may face conflicts in allocating investment opportunities between us and affiliated investment vehicles that have overlapping objectives with ours.
For example, certain affiliated investment vehicles may have arrangements that provide for higher management or incentive fees, greater expense reimbursements or overhead allocations, or permit the Investment Adviser and its affiliates to receive transaction fees not permitted under the Investment Company Act, all of which may contribute to this conflict of interest and create an incentive for our Investment Adviser or its affiliated investment managers to favor such other accounts.
Furthermore, our Investment Adviser and its affiliated investment managers may form vehicles for the benefit of third-party investors that will be entitled to a portion of the allocation with respect to an investment.
Although our Investment Adviser will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by investment funds managed by our Investment Adviser or an investment manager affiliated with our Investment Adviser, including Carlyle.
In such a situation, Carlyle or our Investment Adviser may also have a conflict in the allocation of its own resources to our portfolio company.
We have implemented certain policies and procedures whereby certain of our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us and other affiliated persons, including our Investment Adviser, stockholders that own more than 5% of us, employees, officers and directors of us and our Investment Adviser and certain persons directly or indirectly controlling, controlled by or under common control with the foregoing persons.
In the course of our investing activities, we pay management and incentive fees to our Investment Adviser and reimburse our Investment Adviser for certain expenses it incurs in accordance with our Investment Advisory Agreement.
Because the management fee is based on gross assets, our Investment Adviser benefits to the extent we incur debt or use leverage.
Accordingly, there may be times when the senior management team of our Investment Adviser has interests that differ from those of our stockholders, giving rise to a conflict.
In addition, we pay our Administrator, an affiliate of our Investment Adviser, its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including, compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer, Chief Financial Officer and Principal Accounting Officer) and their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff in their role of performing our Sarbanes-Oxley Act internal control assessment.
In May 2020, we issued the Preferred Stock to an affiliate of Carlyle in a private placement.

and 246 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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