Carlyle Secured Lending Completes Acquisition of CSL III

The merger adds significant scale and a $250 million credit facility to Carlyle’s lending platform.

March 31, 2025

Merger Adds Scale and Streamlines Platform

Carlyle Secured Lending has officially closed its acquisition of Carlyle Secured Lending III, following through on a plan that’s been in motion since mid-2024. The two-step merger finalized on March 27 now brings CSL III fully into the CGBD structure, expanding the company’s footprint in direct lending and adding meaningful scale to its operations.

As part of the transaction, CGBD issued just under 19 million new shares of common stock to former CSL III shareholders. The conversion ratio—1.2137 shares of CGBD stock for each CSL III share—was based on net asset values measured as of March 25. With NAVs falling within the agreed range, the terms of the merger agreement held steady, and the deal moved forward as planned.

Preferred Stock Exchange and Lock-Up Agreements

The merger triggered a key structural shift. Carlyle Investment Management, the sole holder of CGBD’s convertible preferred stock, exchanged its entire position—two million preferred shares—for just over three million common shares. This exchange was exempt from registration and priced based on CGBD’s NAV per share.

To manage how these new shares enter the market, a lock-up agreement was put in place. CIM won’t be able to transfer any of the shares received in the conversion without board approval during the lock-up periods. The restrictions lift in thirds over:

• 360 days – one-third of shares become transferable


• 540 days – an additional third is released


• 720 days – full transfer rights are restored

CGBD also agreed to provide CIM with registration rights, allowing for future resale of the common shares—pending standard terms and conditions.

Credit Facility Shift and Borrowing Terms

The transaction also shifted CGBD into a new credit facility role. With CSL III’s operations now under the CGBD umbrella, the company stepped into CSL III’s $250 million loan and servicing agreement. The facility, which has gone through several amendments since it was first established in 2022, gives CGBD additional capacity to finance its portfolio.

The borrowing terms are structured as follows:

• Borrowing in U.S. dollars or permitted currencies


• Interest based on three-month SOFR, prime rate, or federal funds rate plus 2.85%


• 0.30% annual fee on undrawn amounts


• Quarterly payment schedule

As of the merger date, $206 million was outstanding. The facility is backed by a first-lien security interest on CSL III’s assets and includes typical covenants and debt restrictions.

Shareholder Approval and Forward Steps

Shareholders signed off on the transaction at a special meeting held the day before the merger closed. More than 56% of eligible votes were represented, and the proposal passed with a clear majority.

The new structure brings together two entities already under the same investment adviser. The combined platform is expected to operate more efficiently, with expanded balance sheet flexibility and greater capacity to support growth. Between the added credit facility and the newly issued equity, CGBD is positioned to move forward with a stronger foundation.

Both parties used NAV estimates tailored to the merger process: $20.22 per share for CSL III and a slightly lower figure for CGBD. These valuations were not audited and may not match the final reported NAVs for the quarter.

A joint press release was issued on March 26 confirming the vote results. With the merger complete and the integration underway, CGBD is now operating with an updated capital structure and an expanded lending platform.