CGBD

CGBD is a Carlyle-managed BDC whose investment case rests almost entirely on income, not growth. The numbers reflect a business in transition: total assets jumped 44.9% to $2.79B and long-term debt 59.3% to $1.53B in FY2025, driven by the CSL III merger and the Credit Fund II Purchase completed February 2025 — the MD&A confirms this is acquired balance-sheet, not organic origination. Liabilities/equity of 1.39x is within BDC norms but the trajectory is one-directional. Share count rose 38.7% to 70.7M as merger consideration, and that dilution shows up brutally in diluted EPS, which fell 36.1% to $1.01 even as net income fell only 21.4% to $70.0M.

Management is candid in the MD&A that NII declined due to 'a lower weighted average yield on the portfolio, a higher average margin on our debt and the net impact of investments on non-accrual status' — three headwinds that all point the same way as base rates normalize and credit dispersion widens in middle-market direct lending. Management's own non-GAAP NII per share of $1.48 ($1.51 adjusted) against declared dividends of $1.65/share means the dividend is being paid out of more than current-period earnings, and retained earnings sit at -$196M and getting more negative. Operating cash flow of -$205M is an artifact of net investment deployment (normal for a growing BDC) rather than a quality signal, so it shouldn't be over-weighted.