UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period                      to                     

Commission File No. 814-01410

Carlyle Secured Lending III

(Exact name of Registrant as specified in its charter)

Delaware	86-6498423
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
One Vanderbilt Avenue, Suite 3400, New York, NY 10017	(212) 813-4900
(Address of principal executive office) (Zip Code)	(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	o
Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x

The number of the registrant’s common shares of beneficial interest, $0.001 par value per share, outstanding at May 13, 2024 was 10,892,568.

CARLYLE SECURED LENDING III

INDEX

Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of March 31, 2024 (unaudited) and December 31, 2023	2
	Consolidated Statements of Operations for the three month periods ended March 31, 2024 and 2023 (unaudited)	3
	Consolidated Statements of Changes in Net Assets for the three month periods ended March 31, 2024 and 2023 (unaudited)	4
	Consolidated Statements of Cash Flows for the three month periods ended March 31, 2024 and 2023 (unaudited)	5
	Consolidated Schedules of Investments as of March 31, 2024 (unaudited) and December 31, 2023	7
	Notes to Consolidated Financial Statements (unaudited)	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57
Item 4.	Controls and Procedures	59
Part II.	Other Information
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
	Signatures	62

1

CARLYLE SECURED LENDING III

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(amounts in thousands, except share and per share data)

	March 31, 2024		December 31, 2023
ASSETS	(unaudited)
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $341,709 and $311,762, respectively)	$	347,261	$	316,342
Cash, cash equivalents and restricted cash	29,893		37,131
Deferred offering costs	4		9
Receivable for investments sold	40		67
Due from Investment Adviser	1,271		972
Interest and other income receivable from investments	3,278		3,438
Receivable for issuance of common shares of beneficial interest	2,820		3,760
Prepaid expenses and other assets	3,664		2,543
Total assets	$	388,231	$	364,262
LIABILITIES
Secured borrowings (Note 5)	$	148,189	$	152,512
Interest and credit facility fees payable (Note 5)	2,404		1,494
Dividend payable (Note 7)	5,275		4,464
Incentive fees payable (Note 4)	1,399		1,167
Administrative service fees payable (Note 4)	304		278
Other accrued expenses and liabilities	707		628
Total liabilities	158,278		160,543
Commitments and contingencies (Notes 4, 6 and 9)
NET ASSETS
Common shares of beneficial interest, $0.001 par value; unlimited shares authorized; 10,783,726 and 9,666,829 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	11		10
Paid-in capital in excess of par value	218,312		194,681
Total distributable earnings (loss)	11,630		9,028
Total net assets	$	229,953	$	203,719
NET ASSETS PER SHARE	$	21.32	$	21.07

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2

CARLYLE SECURED LENDING III

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except share and per share data) (unaudited)

	For the three month periods ended
	March 31, 2024		March 31, 2023
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$	10,190	$	6,502
PIK income	164		139
Other income	798		226
Total investment income	11,152		6,867
Expenses:
Organizational expenses (Note 2)	—		10
Offering costs (Note 2)	5		33
Net investment income incentive fees (Note 4)	1,399		769
Professional fees	115		245
Administrative service fees (Note 4)	287		140
Interest expense and credit facility fees (Note 5)	2,930		2,405
Trustees’ fees and expenses (Note 4)	86		67
Other general and administrative	321		160
Total expenses	5,143		3,829
Less waivers and reimbursements of expenses	(609)		(574)
Expenses after waivers and reimbursements of expenses	4,534		3,255
Net investment income (loss) before taxes	6,618		3,612
Excise tax expense	35		9
Net investment income (loss)	6,583		3,603
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments:
Non-controlled/non-affiliated investments	3		9
Net realized currency gain (loss) on non-investment assets and liabilities	(4)		(3)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliated investments	972		1,028
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	320		(158)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	1,291		876
Net increase (decrease) in net assets resulting from operations	$	7,874	$	4,479
Basic and diluted earnings per Share (Note 7)	$	0.80	$	0.79
Weighted-average common shares of beneficial interest outstanding — Basic and Diluted (Note 7)	9,799,475		5,665,083

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

CARLYLE SECURED LENDING III

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(amounts in thousands) (unaudited)

	For the three month periods ended
	March 31, 2024		March 31, 2023
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	$	6,583	$	3,603
Net realized gain (loss) on investments and non-investment assets and liabilities	(1)		6
Net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	1,292		870
Net increase (decrease) in net assets resulting from operations	7,874		4,479
Capital share transactions:
Common shares of beneficial interest issued	21,636		25,319
Dividend reinvestment	1,996		1,351
Dividends declared (Note 7)	(5,272)		(2,819)
Net increase (decrease) in net assets resulting from capital share transactions	18,360		23,851
Net increase (decrease) in net assets	26,234		28,330
Net assets at beginning of period	203,719		109,672
Net assets at end of period	$	229,953	$	138,002

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

CARLYLE SECURED LENDING III

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands) (unaudited)

	For the three month periods ended
	March 31, 2024		March 31, 2023
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	7,874	$	4,479
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Amortization of deferred financing costs	167		165
Amortization of deferred offering costs	5		33
Net accretion of discount on investments	(500)		(246)
Paid-in-kind interest	(172)		(116)
Net realized (gain) loss on investments	(3)		(9)
Net realized currency (gain) loss on non-investment assets and liabilities	4		3
Net change in unrealized (appreciation) depreciation on investments	(972)		(1,028)
Net change in unrealized currency (gain) loss on non-investment assets and liabilities	(320)		158
Cost of investments purchased	(33,136)		(37,610)
Proceeds from sales and repayments of investments and change in receivable for investments sold	3,884		1,756
Changes in operating assets:
Interest and other income receivable from investments	160		(367)
Prepaid expenses and other assets	(136)		—
Due from Investment Adviser	(299)		846
Changes in operating liabilities:
Interest and credit facility fees payable	910		570
Incentive fees payable	232		262
Administrative service fees payable	26		(119)
Accrued organizational expenses	—		(157)
Deferred income	—		(81)
Other accrued expenses and liabilities	79		(130)
Net cash provided by (used in) operating activities	(22,197)		(31,591)
Cash flows from financing activities:
Proceeds from issuance of common shares of beneficial interest, net of change in receivable for issuance of common shares of beneficial interest	22,576		25,346
Borrowings on Credit Facilities	27,000		44,720
Repayments of Credit Facilities	(31,000)		(16,400)
Dividends paid in cash	(2,465)		(601)
Debt issuance costs paid	(1,152)		(30)
Deferred financing cost payable	—		(548)
Deferred offering costs payable	—		(278)
Net cash provided by (used in) financing activities	14,959		52,209
Net increase (decrease) in cash, cash equivalents and restricted cash	(7,238)		20,618
Cash, cash equivalents and restricted cash, beginning of period	37,131		6,761
Cash, cash equivalents and restricted cash, end of period	$	29,893	$	27,379
Supplemental disclosures:
Interest and credit facility fees paid during the period	$	1,854	$	1,776
Taxes, including excise tax, paid during the period	$	176	$	33

5

Dividends declared during the period	$	5,272	$	2,819
Dividends reinvested during the period	$	1,996	$	1,351

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (99.8% of fair value)
ADPD Holdings, LLC	#^	(2)(3)(9)(11)	Consumer Services	SOFR	6.00%	11.50%	8/16/2022	8/15/2028	$	7,773	$	7,555	$	6,260	2.72	%
AI Grace AUS Bidco Pty LTD (Australia)	^	(2)(3)(7)	Consumer Goods: Non-Durable	SOFR	6.50%	11.83%	12/5/2023	12/5/2029	2,286		2,220		2,235		0.97
Allied Benefit Systems Intermediate LLC	^	(2)(3)(11)	Healthcare & Pharmaceuticals	SOFR	5.25%	10.58%	10/31/2023	10/31/2030	5,183		5,095		5,226		2.27
Alpine Acquisition Corp II	#^	(2)(3)(9)(11)	Transportation: Cargo	SOFR	6.00%	11.45%	4/19/2022	11/30/2026	9,633		9,507		9,027		3.93
Apex Companies Holdings, LLC	#^	(2)(3)	Environmental Industries	SOFR	6.25%	11.57%	1/31/2023	1/31/2028	12,320		12,044		12,325		5.36
Applied Technical Services, LLC	#	(2)(3)(9)	Business Services	SOFR	6.00%	11.45%	9/18/2023	12/29/2026	376		370		374		0.16
Applied Technical Services, LLC	#	(2)(3)(9)(11)	Business Services	SOFR	5.75%	11.20%	1/16/2024	12/29/2026	483		466		473		0.21
Ardonagh Midco 3 PLC (United Kingdom)	^	(2)(3)(7)(11)	Diversified Financial Services	SOFR	4.75%	10.04%	3/1/2024	2/15/2031	4,395		4,324		4,323		1.88
Ascend Buyer, LLC	#^	(2)(3)(9)(11)	Containers, Packaging & Glass	SOFR	6.40%	11.86%	9/30/2021	9/30/2028	14,712		14,353		14,544		6.32
Associations, Inc.	#^	(2)(3)(9)(11)	Construction & Building	SOFR	4.00%, 2.50% PIK	12.09%	7/2/2021	7/2/2027	5,840		5,800		5,840		2.54
Associations, Inc.	^	(2)(3)(9)	Construction & Building	SOFR	4.00%, 2.50% PIK	12.09%	10/10/2023	7/2/2027	1,264		1,253		1,264		0.55
Athlete Buyer, LLC	#^	(2)(3)(9)(11)	Construction & Building	SOFR	6.25%	11.65%	3/29/2024	4/26/2029	891		731		731		0.32
Atlas US Finco, Inc.	#	(2)(3)(7)(11)	High Tech Industries	SOFR	7.25%	12.55%	12/15/2022	12/12/2029	723		702		729		0.32
Atlas US Finco, Inc.	#	(2)(3)(7)	High Tech Industries	SOFR	6.75%	12.05%	12/18/2023	12/10/2029	334		328		330		0.14
Avalara, Inc.	#^	(2)(3)(11)	Diversified Financial Services	SOFR	7.25%	12.56%	10/19/2022	10/19/2028	13,500		13,198		13,723		5.97
Azurite Intermediate Holdings, Inc.	^	(2)(3)(11)	Software	SOFR	6.50%	11.83%	3/19/2024	3/19/2031	1,312		1,240		1,240		0.54
BlueCat Networks, Inc. (Canada)	#^	(2)(3)(7)(11)	High Tech Industries	SOFR	4.00%, 2.00% PIK	11.24%	8/8/2022	8/8/2028	7,423		7,256		7,260		3.16
Bradyifs Holdings, LLC	^	(2)(3)(11)	Wholesale	SOFR	6.00%	11.31%	10/31/2023	10/31/2029	4,630		4,528		4,580		1.99
CD&R Madison Parent Ltd (United Kingdom)	^	(2)(7)	Business Services	EURIBOR	5.75%, 2.00% PIK	11.70%	2/27/2023	2/27/2030	€	1,224	1,262		1,344		0.58
CD&R Madison Parent Ltd (United Kingdom)	#^	(2)(7)(11)	Business Services	SONIA	6.25%, 2.00% PIK	13.44%	2/27/2023	2/27/2030	£	2,597	3,031		3,345		1.45
Celerion Buyer, Inc.	^	(2)(3)(11)	Healthcare & Pharmaceuticals	SOFR	6.50%	11.77%	11/3/2022	11/3/2029	3,113		3,031		3,151		1.37
CoreWeave Compute Acquisition Co. II, LLC	#	(2)(3)	High Tech Industries	SOFR	8.75%	14.06%	7/30/2023	7/30/2028	1,216		1,197		1,198		0.52
Coupa Holdings, LLC	#	(2)(3)(11)	Software	SOFR	7.50%	12.81%	2/27/2023	2/28/2030	2,159		2,104		2,209		0.96
CPI Intermediate Holdings, Inc.	^	(2)(3)(11)	Telecommunications	SOFR	5.50%	10.82%	10/6/2022	10/6/2029	11,500		11,292		11,371		4.94

7

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
CST Holding Company	^	(2)(3)(9)(11)	Consumer Goods: Non-Durable	SOFR	6.75%	12.18%	11/1/2022	11/1/2028	$	4,969	$	4,837	$	5,072	2.21	%
DCA Investment Holding LLC	#	(2)(3)	Healthcare & Pharmaceuticals	SOFR	6.41%	11.71%	2/25/2022	4/3/2028	2		2		2		0.00
Denali Midco 2, LLC	#^	(2)(3)(9)	Consumer Services	SOFR	6.50%	11.93%	9/15/2022	12/22/2027	9,917		9,695		9,917		4.31
Dwyer Instruments, Inc.	#^	(2)(3)(9)(11)	Capital Equipment	SOFR	5.75%	11.15%	7/21/2021	7/21/2027	13,774		13,582		13,774		5.99
Eliassen Group, LLC	#^	(2)(3)(11)	Business Services	SOFR	5.50%	10.81%	4/14/2022	4/14/2028	8,706		8,580		8,675		3.77
Ellkay, LLC	#	(2)(3)(9)(11)	Healthcare & Pharmaceuticals	SOFR	5.50%, 2.00% PIK	12.96%	9/14/2021	9/14/2027	3		3		3		0.00
Excel Fitness Holdings, Inc.	^	(2)(3)(9)(11)	Leisure Products & Services	SOFR	5.50%	10.81%	8/3/2023	4/29/2029	1,741		1,682		1,741		0.76
Excel Fitness Holdings, Inc.	^	(2)(3)(9)(11)	Leisure Products & Services	SOFR	5.25%	10.70%	4/29/2022	4/29/2029	4,094		4,021		4,077		1.77
Excelitas Technologies Corp.	^	(2)(3)(9)(11)	Capital Equipment	SOFR	5.75%	11.16%	8/12/2022	8/12/2029	5,503		5,404		5,565		2.42
Excelitas Technologies Corp.	^	(2)	Capital Equipment	EURIBOR	5.75%	9.65%	8/12/2022	8/12/2029	€	1,175	1,187		1,281		0.56
FPG Intermediate Holdco, LLC	#	(2)(3)(9)	Consumer Services	SOFR	2.75%, 4.00% PIK	12.08%	8/5/2022	3/5/2027	36		35		33		0.01
GS AcquisitionCo, Inc.	^	(2)(3)(11)	Software	SOFR	5.00%	10.30%	3/26/2024	5/25/2028	4,082		4,066		4,082		1.78
Guidehouse LLP	#^	(2)(3)	Sovereign & Public Finance	SOFR	3.75%, 2.00% PIK	11.08%	9/30/2022	12/16/2030	5,969		5,968		6,018		2.62
Hercules Borrower LLC	#	(2)(3)(9)	Environmental Industries	SOFR	5.50%	10.91%	9/10/2021	12/14/2026	1		1		1		0.00
Hoosier Intermediate, LLC	#	(2)(3)(9)(11)	Healthcare & Pharmaceuticals	SOFR	5.00%	10.46%	11/15/2021	11/15/2028	4		4		4		0.00
HS Spa Holdings Inc.	^	(2)(3)(11)	Consumer Services	SOFR	5.75%	11.09%	6/2/2022	6/2/2029	869		854		869		0.38
HS Spa Holdings Inc.	#	(2)(3)(11)	Consumer Services	SOFR	5.25%	10.55%	3/12/2024	6/2/2029	—		(1)		(1)		0.00
Icefall Parent, Inc.	^	(2)(3)(11)	Software	SOFR	6.50%	11.80%	1/26/2024	1/26/2030	2,604		2,548		2,554		1.11
IQN Holding Corp.	^	(2)(3)(11)	Business Services	SOFR	5.25%	10.59%	5/2/2022	5/2/2029	3,033		2,993		3,033		1.32
iRobot Corporation	#	(2)(3)(7)(9)	Consumer Goods: Durable	SOFR	6.50%, 2.50% PIK	14.45%	7/25/2023	7/31/2026	4,321		4,321		4,191		1.82
Jeg's Automotive, LLC	#	(2)(3)(9)	Automotive	SOFR	6.00%	11.47%	12/22/2021	12/22/2027	4		4		4		0.00
Kaseya, Inc.	#	(2)(3)(11)	High Tech Industries	SOFR	3.50%, 2.50% PIK	11.31%	6/23/2022	6/23/2029	1,416		1,325		1,416		0.62
LVF Holdings, Inc.	#	(2)(3)(9)(11)	Beverage & Food	SOFR	5.75%	11.21%	6/10/2021	6/10/2027	19		19		19		0.01
Material Holdings, LLC	#	(2)(3)(9)	Business Services	SOFR	6.00%	11.41%	8/19/2021	8/19/2027	5		5		4		0.00
Maverick Acquisition, Inc.	#	(2)(3)(9)	Aerospace & Defense	SOFR	6.25%	11.55%	6/1/2021	6/1/2027	21		21		16		0.01
Medical Manufacturing Technologies, LLC	#^	(2)(3)(9)(11)	Healthcare & Pharmaceuticals	SOFR	5.75%	11.21%	12/23/2021	12/23/2027	1,833		1,795		1,797		0.78
NEFCO Holding Company LLC	#^	(2)(3)(9)(11)	Construction & Building	SOFR	6.50%	12.06%	8/5/2022	8/5/2028	9,663		9,462		9,783		4.25
North Haven Fairway Buyer, LLC	#^	(2)(3)(11)	Consumer Services	SOFR	6.50%	11.81%	5/17/2022	5/17/2028	15,149		14,915		15,308		6.67

8

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
North Haven Stallone Buyer, LLC	#	(2)(3)	Consumer Services	SOFR	5.50%	11.18%	10/11/2022	5/24/2027	$	199	$	196	$	195	0.08	%
North Haven Stallone Buyer, LLC	#	(2)(3)(9)(11)	Consumer Services	SOFR	6.00%	11.66%	11/3/2023	5/24/2027	1,877		1,775		1,825		0.79
Oak Purchaser, Inc.	#^	(2)(3)(11)	Business Services	SOFR	5.50%	10.81%	4/28/2022	4/28/2028	6,725		6,673		6,599		2.87
Oak Purchaser, Inc.	^	(2)(3)(11)	Business Services	SOFR	5.50%	10.81%	2/1/2024	4/28/2028	758		716		717		0.31
Oranje Holdco, Inc.	#^	(2)(3)(11)	Business Services	SOFR	7.50%	12.81%	2/1/2023	2/1/2029	8,052		7,859		8,137		3.54
Park County Holdings, LLC	^	(2)(3)(8)	Media: Advertising, Printing & Publishing	SOFR	7.28%	12.61%	11/29/2023	11/29/2029	11,503		11,277		11,388		4.95
PDI TA Holdings, Inc	^	(2)(3)(11)	Software	SOFR	5.50%	10.83%	2/1/2024	2/1/2031	4,907		4,836		4,834		2.10
Pestco Intermediate, LLC	^	(2)(3)(9)(11)	Environmental Industries	SOFR	6.00%	11.46%	2/6/2023	2/17/2028	6,039		5,845		6,096		2.65
PF Atlantic Holdco 2, LLC	#	(2)(3)(9)(11)	Leisure Products & Services	SOFR	5.50%	11.06%	11/12/2021	11/12/2027	5		5		4		0.00
PF Atlantic Holdco 2, LLC	^	(2)(3)(9)(11)	Leisure Products & Services	SOFR	6.00%	11.31%	11/21/2023	11/12/2027	319		253		328		0.14
Project Castle, Inc.	^	(2)(3)	Capital Equipment	SOFR	5.50%	10.83%	6/24/2022	6/1/2029	985		900		891		0.39
Pushpay USA Inc.	#^	(2)(3)(9)(11)	Diversified Financial Services	SOFR	6.75%	12.21%	5/10/2023	5/10/2030	11,977		11,625		12,089		5.26
PXO Holdings I Corp.	#	(2)(3)(9)(11)	Chemicals, Plastics & Rubber	SOFR	5.50%	10.96%	3/8/2022	3/8/2028	4		4		4		0.00
QNNECT, LLC	^	(2)(3)(11)	Aerospace & Defense	SOFR	7.00%	12.17%	11/2/2022	11/2/2029	5,289		5,120		5,421		2.36
Quantic Electronics, LLC	#	(2)(3)(9)	Aerospace & Defense	SOFR	6.25%	11.66%	8/17/2021	3/1/2027	7		7		7		0.00
Radwell Parent, LLC	#^	(2)(3)(11)	Wholesale	SOFR	6.75%	12.05%	12/1/2022	4/1/2029	13,988		13,615		14,230		6.20
RSC Acquisition, Inc.	^	(2)(3)(9)	Diversified Financial Services	SOFR	5.50%	10.96%	5/31/2022	11/1/2029	10,202		10,136		10,096		4.39
SCP Eye Care HoldCo, LLC	#^	(2)(3)(9)(11)	Healthcare & Pharmaceuticals	SOFR	5.75%	11.18%	10/7/2022	10/7/2029	9,415		9,149		9,415		4.09
Smarsh Inc.	#	(2)(3)(11)	Software	SOFR	5.75%	11.06%	2/18/2022	2/18/2029	1		1		1		0.00
Spotless Brands, LLC	#^	(2)(3)(9)(11)	Consumer Services	SOFR	6.50%	11.97%	6/21/2022	7/25/2028	13,937		13,714		14,101		6.14
Summit Acquisition, Inc.	^	(2)(3)(11)	Diversified Financial Services	SOFR	6.75%	12.06%	5/4/2023	5/1/2030	4,444		4,282		4,544		1.98
TIBCO Software Inc.	#	(2)(3)	High Tech Industries	SOFR	4.50%	9.91%	9/30/2022	3/31/2029	2,475		2,288		2,462		1.07
Trader Corporation (Canada)	#^	(2)(3)(7)(11)	Automotive	CDOR	6.75%	12.04%	12/22/2022	12/22/2029	C$	11,960	8,588		9,020		3.92
Tufin Software North America, Inc.	^	(2)(3)(9)(11)	Software	SOFR	7.69%	13.12%	8/17/2022	8/17/2028	7,465		7,346		7,427		3.23
USALCO, LLC	#	(2)(3)(9)	Chemicals, Plastics & Rubber	SOFR	6.00%	11.56%	10/19/2021	10/19/2027	5		5		5		0.00
USR Parent Inc.	^	(2)(3)(8)	Retail	SOFR	7.60%	12.93%	4/22/2022	4/25/2027	3,667		3,642		3,649		1.59
Vensure Employee Services, Inc.	#	(2)(3)(11)	Business Services	SOFR	5.25%	10.57%	12/15/2023	3/26/2027	719		684		702		0.31
Wineshipping.com LLC	#	(2)(3)(9)(11)	Beverage & Food	SOFR	5.75%	11.24%	10/29/2021	10/29/2027	4		4		4		0.00

9

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
Yellowstone Buyer Acquisition, LLC	#	(2)(3)(9)	Consumer Goods: Durable	SOFR	5.75%	11.15%	9/13/2021	9/13/2027	$	2	$	2	$	2	0.00	%
First Lien Debt Total											$	340,762	$	346,533	150.70	%
Second Lien Debt (0.0% of fair value)
11852604 Canada Inc. (Canada)	#	(2)(3)(7)(9)	Healthcare & Pharmaceuticals	SOFR	9.50% (100% PIK)	14.95%	9/30/2021	9/30/2028	$	4	$	4	$	4	0.00	%
AP Plastics Acquisition Holdings, LLC	#	(2)(3)(9)	Chemicals, Plastics & Rubber	SOFR	7.50%	12.93%	8/10/2021	8/10/2029	10		10		10		0.00
Second Lien Debt Total											$	14	$	14	0.00	%

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		%  of Net  Assets
Equity Investments (0.2% of fair value)
Blackbird Holdco, Inc.	#	(6)	Capital Equipment	12/14/2021	0	$	2	$	2	0.00	%
Buckeye Parent, LLC	#	(6)(10)	Automotive	12/22/2021	0	0		0		0.00
GB Vino Parent, L.P.	#	(6)(10)	Beverage & Food	10/29/2021	0	0		0		0.00
NearU Holdings LLC	#	(6)(10)	Consumer Services	8/16/2022	5	494		228		0.10
NEFCO Holding Company LLC	#	(6)	Construction & Building	8/5/2022	0	152		152		0.07
Pascal Ultimate Holdings, L.P	#	(6)(10)	Capital Equipment	7/21/2021	0	0		0		0.00
Profile Holdings I, LP	#	(6)(10)	Chemicals, Plastics & Rubber	3/8/2022	0	0		0		0.00
Summit K2 Midco, Inc.	#	(6)(10)	Diversified Financial Services	4/27/2023	91	91		121		0.05
Talon MidCo 1 Limited	#	(6)(10)	Software	8/17/2022	136	194		211		0.09
Equity Investments Total						$	933	$	714	0.31	%
Total investments—non-controlled/non-affiliated						$	341,709	$	347,261	151.01	%
Total investments						$	341,709	$	347,261	151.01	%

# Denotes that all or a portion of the assets are owned by Carlyle Secured Lending III (together with its consolidated subsidiary, “we,” “us,” “our,” “CSL III,” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Subscription Facility”). The lenders of the Subscription Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 5, Borrowings, to these unaudited consolidated financial statements). Accordingly, such assets are not available to creditors of the Company's wholly owned subsidiary, Carlyle Secured Lending III SPV, L.L.C. (the “SPV”).

^ Denotes that all or a portion of the assets are owned by the Company’s wholly owned subsidiary, the SPV. The SPV has entered into a senior secured revolving credit facility (the “SPV Credit Facility” and, together with the Subscription Facility, the “Credit Facilities”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 5, Borrowings, to these unaudited consolidated financial statements). Accordingly, such assets are not available to creditors of the Company.

** Par amount is denominated in USD (“$”) unless otherwise noted, as denominated in Canadian Dollar (“C$”), Euro (“€”) or British Pound (“£”).

(1)    Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of March 31, 2024, the Company does not “control” any of these portfolio companies. Under

10

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of March 31, 2024, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of March 31, 2024. As of March 31, 2024, the reference rates for variable rate loans were the 30-day SOFR at 5.33%, the 90-day SOFR at 5.30%, the 180-day SOFR at 5.22%, the daily SONIA at 5.19%, the 90-day EURIBOR at 3.89% and the 30-day CDOR at 5.30%.

(3)Loan includes interest rate floor feature, which ranges from 0.50% to 3.00%.

(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.

(5)Fair value is determined in good faith by or under the direction of CSL III Advisor, LLC, the Company’s investment adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these unaudited consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments and equity investments was determined using significant unobservable inputs.

(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of March 31, 2024, the aggregate fair value of these securities is $714, or 0.31%, of the Company's net assets.

(7)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(8)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.

(9)Loans include a credit spread adjustment that ranges from 0.10% to 0.43%.

(10)Represents a non-income producing security as of March 31, 2024.

(11)As of March 31, 2024, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:

Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount **		Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
ADPD Holdings, LLC	Delayed Draw	1.00	%	$	6,354	$	(671)
ADPD Holdings, LLC	Revolver	0.50		189		(20)
Allied Benefit Systems Intermediate LLC	Delayed Draw	1.00		948		7
Alpine Acquisition Corp II	Revolver	0.50		517		(31)
Applied Technical Services, LLC	Delayed Draw	1.00		387		(4)
Applied Technical Services, LLC	Revolver	0.50		72		(1)
Ardonagh Midco 3 PLC (United Kingdom)	Delayed Draw	1.00		405		(6)
Ascend Buyer, LLC	Revolver	0.50		0		(0		)
Associations, Inc.	Delayed Draw	1.00		48		—
Associations, Inc.	Revolver	0.50		0		—
Athlete Buyer, LLC	Delayed Draw	1.00		7,128		(143)
Atlas US Finco, Inc.	Revolver	0.50		67		1
Avalara, Inc.	Revolver	0.50		1,350		20
Azurite Intermediate Holdings, Inc.	Delayed Draw	0.50		2,981		(45)
Azurite Intermediate Holdings, Inc.	Revolver	0.50		477		(7)
BlueCat Networks, Inc. (Canada)	Delayed Draw	1.00		3,699		(54)
Bradyifs Holdings, LLC	Delayed Draw	1.00		376		(3)
Bradyifs Holdings, LLC	Revolver	0.50		383		(4)

11

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount **		Fair Value
CD&R Madison Parent Ltd (United Kingdom)	Delayed Draw	1.50	%	£	429	$	6
Celerion Buyer, Inc.	Delayed Draw	2.00		$	499	5
Celerion Buyer, Inc.	Revolver	0.50		249		2
Coupa Holdings, LLC	Delayed Draw	1.00		193		4
Coupa Holdings, LLC	Revolver	0.50		148		3
CPI Intermediate Holdings, Inc.	Delayed Draw	1.00		2,783		(25)
CST Holding Company	Revolver	0.50		423		8
Dwyer Instruments, Inc.	Revolver	0.50		847		—
Eliassen Group, LLC	Delayed Draw	1.00		3,015		(8)
Ellkay, LLC	Revolver	0.50		0		(0		)
Excel Fitness Holdings, Inc.	Delayed Draw	1.00		875		—
Excel Fitness Holdings, Inc.	Revolver	0.50		594		(2)
Excelitas Technologies Corp.	Delayed Draw	1.00		389		4
Excelitas Technologies Corp.	Revolver	0.50		288		3
GS AcquisitionCo, Inc.	Delayed Draw	0.50		450		—
GS AcquisitionCo, Inc.	Revolver	0.50		206		—
Hoosier Intermediate, LLC	Revolver	0.50		1		(0		)
HS Spa Holdings Inc.	Delayed Draw	0.50		116		(1)
HS Spa Holdings Inc.	Revolver	0.50		104		—
Icefall Parent, Inc.	Revolver	0.50		248		(4)
IQN Holding Corp.	Delayed Draw	1.00		1,688		—
IQN Holding Corp.	Revolver	0.50		489		—
Kaseya, Inc.	Delayed Draw	1.00		4,211		—
Kaseya, Inc.	Revolver	0.50		385		—
LVF Holdings, Inc.	Revolver	0.38		2		(0		)
Medical Manufacturing Technologies, LLC	Revolver	0.50		108		(2)
NEFCO Holding Company LLC	Delayed Draw	1.00		1,543		15
NEFCO Holding Company LLC	Revolver	0.50		795		8
North Haven Fairway Buyer, LLC	Revolver	0.50		703		7
North Haven Stallone Buyer, LLC	Delayed Draw	1.00		3,223		(33)
Oak Purchaser, Inc.	Delayed Draw	0.50		1,408		(27)
Oak Purchaser, Inc.	Revolver	0.50		584		(10)
Oranje Holdco, Inc.	Revolver	0.50		1,007		10
PDI TA Holdings, Inc	Delayed Draw	0.50		1,854		(19)
PDI TA Holdings, Inc	Revolver	0.50		556		(6)
Pestco Intermediate, LLC	Delayed Draw	1.00		1,546		11

12

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount **		Fair Value
Pestco Intermediate, LLC	Revolver	0.50	%	$	357	$	3
PF Atlantic Holdco 2, LLC	Delayed Draw	1.00		3,193		(8		)
PF Atlantic Holdco 2, LLC	Revolver	0.50		0		(0		)
Pushpay USA Inc.	Revolver	0.50		926		8
PXO Holdings I Corp.	Revolver	0.50		0		(0		)
QNNECT, LLC	Delayed Draw	1.00		1,325		26
Radwell Parent, LLC	Revolver	0.38		837		14
SCP Eye Care HoldCo, LLC	Delayed Draw	1.00		849		—
SCP Eye Care HoldCo, LLC	Revolver	0.50		358		—
Smarsh Inc.	Delayed Draw	1.00		0		—
Smarsh Inc.	Revolver	0.50		0		—
Spotless Brands, LLC	Revolver	0.50		457		5
Summit Acquisition, Inc.	Delayed Draw	1.00		1,031		17
Summit Acquisition, Inc.	Revolver	0.50		515		9
Trader Corporation (Canada)	Revolver	0.50		C$	906	25
Tufin Software North America, Inc.	Delayed Draw	—		52		(0		)
Tufin Software North America, Inc.	Revolver	0.50		357		(2)
Vensure Employee Services, Inc.	Delayed Draw	1.00		1,779		(12)
Wineshipping.com LLC	Revolver	0.50		0		(0		)
Total unfunded commitments				$	70,157	$	(911)

As of March 31, 2024, investments at amortized cost and fair value consisted of the following:

Type	Amortized Cost		Fair Value		% of Fair Value
First Lien Debt	$	340,762	$	346,533	99.8	%
Second Lien Debt	14		14		0.0
Equity Investments	933		714		0.2
Total	$	341,709	$	347,261	100.0	%

The rate type of debt investments at amortized cost and fair value as of March 31, 2024 was as follows:

Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	340,776	$	346,547	100.0	%
Fixed Rate	—		—		—
Total	$	340,776	$	346,547	100.0	%

13

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

The industry composition of investments at amortized cost and fair value as of March 31, 2024 was as follows:

Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	5,148	$	5,444	1.6	%
Automotive	8,592		9,024		2.6
Beverage & Food	23		23		0.0
Business Services	32,639		33,403		9.6
Capital Equipment	21,075		21,513		6.2
Chemicals, Plastics & Rubber	19		19		0.0
Construction & Building	17,398		17,770		5.1
Consumer Goods: Durable	4,323		4,193		1.2
Consumer Goods: Non-Durable	7,057		7,307		2.1
Consumer Services	49,232		48,735		14.0
Containers, Packaging & Glass	14,353		14,544		4.2
Diversified Financial Services	43,656		44,896		12.9
Environmental Industries	17,890		18,422		5.3
Healthcare & Pharmaceuticals	19,083		19,602		5.6
High Tech Industries	13,096		13,395		3.9
Leisure Products & Services	5,961		6,150		1.8
Media: Advertising, Printing & Publishing	11,277		11,388		3.3
Retail	3,642		3,649		1.1
Software	22,335		22,558		6.5
Sovereign & Public Finance	5,968		6,018		1.7
Telecommunications	11,292		11,371		3.3
Transportation: Cargo	9,507		9,027		2.6
Wholesale	18,143		18,810		5.4
Total	$	341,709	$	347,261	100.0	%

14

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2024

(amounts in thousands) (unaudited)

The geographical composition of investments at amortized cost and fair value as of March 31, 2024 was as follows:

Geography	Amortized Cost		Fair Value		% of Fair Value
Australia	$	2,922	$	2,964	0.8	%
Canada	15,848		16,284		4.7
United Kingdom	8,617		9,012		2.6
United States	314,322		319,001		91.9
Total	$	341,709	$	347,261	100.0	%

The accompanying notes are an integral part of these unaudited consolidated financial statements.

15

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (99.5% of fair value)
ADPD Holdings, LLC	#^	(2)(3)(8)(10)	Consumer Services	SOFR	6.00%	11.68%	8/16/2022	8/15/2028	$	7,151	$	6,922	$	5,802	2.85	%
AI Grace AUS Bidco Pty LTD (Australia)	^	(2)(3)(6)	Consumer Goods: Non-Durable	SOFR	6.50%	11.85%	12/5/2023	12/5/2029	2,286		2,218		2,217		1.09
Allied Benefit Systems Intermediate LLC	^	(2)(3)(10)	Healthcare & Pharmaceuticals	SOFR	5.25%	10.63%	10/31/2023	10/31/2030	5,183		5,093		5,091		2.50
Alpine Acquisition Corp II	#^	(2)(3)(8)(10)	Transportation: Cargo	SOFR	6.00%	11.46%	4/19/2022	11/30/2026	9,482		9,345		9,033		4.43
Apex Companies Holdings, LLC	#^	(2)(3)(10)	Environmental Industries	SOFR	6.25%	11.63%	1/31/2023	1/31/2028	10,015		9,726		10,040		4.93
Applied Technical Services, LLC	#	(2)(3)(8)	Business Services	SOFR	6.00%	11.43%	9/18/2023	12/29/2026	378		370		380		0.19
Ascend Buyer, LLC	#^	(2)(3)(8)(10)	Containers, Packaging & Glass	SOFR	6.40%	11.91%	9/30/2021	9/30/2028	14,749		14,374		14,380		7.06
Associations, Inc.	#^	(2)(3)(8)(10)	Construction & Building	SOFR	4.00%, 2.50% PIK	12.16%	7/2/2021	7/2/2027	5,817		5,775		5,794		2.84
Associations, Inc.	^	(2)(3)(8)	Construction & Building	SOFR	4.00%, 2.50% PIK	12.16%	10/10/2023	7/2/2027	1,259		1,247		1,254		0.62
Atlas AU Bidco Pty Ltd (Australia)	#	(2)(3)(6)(10)	High Tech Industries	SOFR	7.25%	12.58%	12/15/2022	12/12/2029	723		701		731		0.36
Atlas US Finco, Inc.	#	(2)(3)	High Tech Industries	SOFR	6.75%	12.40%	12/18/2023	12/10/2029	335		328		328		0.16
Avalara, Inc.	#^	(2)(3)(10)	Diversified Financial Services	SOFR	7.25%	12.60%	10/19/2022	10/19/2028	13,500		13,186		13,723		6.74
BlueCat Networks, Inc. (Canada)	#^	(2)(3)(6)(10)	High Tech Industries	SOFR	4.00%, 2.00% PIK	11.39%	8/8/2022	8/8/2028	7,420		7,244		7,181		3.53
Bradyifs Holdings, LLC	^	(2)(3)(10)	Wholesale	SOFR	6.00%	11.38%	10/31/2023	10/31/2029	4,641		4,536		4,533		2.23
CD&R Madison Parent Ltd (United Kingdom)	#^	(2)(6)(10)	Business Services	SONIA	6.25%, 2.00% PIK	13.44%	2/27/2023	2/27/2030	€	2,585	3,015		3,352		1.65
CD&R Madison Parent Ltd (United Kingdom)	^	(2)(6)	Business Services	EURIBOR	5.75%, 2.00% PIK	11.71%	2/27/2023	2/27/2030	£	1,218	1,254		1,365		0.67
Celerion Buyer, Inc.	^	(2)(3)(10)	Healthcare & Pharmaceuticals	SOFR	6.50%	11.93%	11/3/2022	11/3/2029	3,120		3,036		3,159		1.55
CoreWeave Compute Acquisition Co. II, LLC	#	(2)(3)(10)	High Tech Industries	SOFR	8.75%	14.13%	7/30/2023	7/30/2028	727		707		706		0.35
Coupa Holdings, LLC	#	(2)(3)(10)	Software	SOFR	7.50%	12.86%	2/27/2023	2/28/2030	2,160		2,103		2,210		1.08
CPI Intermediate Holdings, Inc.	^	(2)(3)(10)	Telecommunications	SOFR	5.50%	10.87%	10/6/2022	10/6/2029	11,529		11,313		11,408		5.60
CST Holding Company	^	(2)(3)(8)(10)	Consumer Goods: Non-Durable	SOFR	6.50%	11.86%	11/1/2022	11/1/2028	4,981		4,844		5,027		2.47
DCA Investment Holding LLC	#	(2)(3)	Healthcare & Pharmaceuticals	SOFR	6.41%	11.75%	2/25/2022	4/3/2028	2		2		2		0.00
Denali Midco 2, LLC	#^	(2)(3)(8)(10)	Consumer Services	SOFR	6.50%	11.96%	9/15/2022	12/22/2027	7,636		7,402		7,636		3.75
Dwyer Instruments, Inc.	#^	(2)(3)(8)(10)	Capital Equipment	SOFR	5.75%	11.20%	7/21/2021	7/21/2027	13,809		13,604		13,809		6.78
Eliassen Group, LLC	#^	(2)(3)(10)	Business Services	SOFR	5.50%	10.85%	4/14/2022	4/14/2028	8,728		8,595		8,584		4.21

16

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
Ellkay, LLC	#	(2)(3)(8)(10)	Healthcare & Pharmaceuticals	SOFR	6.00%	11.28%	9/14/2021	9/14/2027	$	3	$	3	$	3	0.00	%
Excel Fitness Holdings, Inc.	^	(2)(3)(8)(10)	Leisure Products & Services	SOFR	5.50%	10.85%	8/3/2023	4/29/2029	1,745		1,684		1,737		0.85
Excel Fitness Holdings, Inc.	^	(2)(3)(8)(10)	Leisure Products & Services	SOFR	5.25%	10.75%	4/29/2022	4/29/2029	4,104		4,028		4,041		1.98
Excelitas Technologies Corp.	^	(2)(3)(8)(10)	Capital Equipment	SOFR	5.75%	11.23%	8/12/2022	8/12/2029	5,375		5,272		5,287		2.60
Excelitas Technologies Corp.	^	(2)	Capital Equipment	EURIBOR	5.75%	9.74%	8/12/2022	8/12/2029	€	1,178	1,189		1,284		0.63
FPG Intermediate Holdco, LLC	#	(2)(3)(8)(10)	Consumer Services	SOFR	6.75%	12.29%	8/5/2022	3/5/2027	36		(137)		(72)		(0.04)
Guidehouse LLP	#^	(2)(3)	Sovereign & Public Finance	SOFR	3.75%, 2.00% PIK	11.11%	9/30/2022	12/16/2030	5,940		5,938		5,923		2.91
Hercules Borrower LLC	#	(2)(3)(8)(10)	Environmental Industries	SOFR	5.50%	10.95%	9/10/2021	12/14/2026	1		1		1		0.00
Hoosier Intermediate, LLC	#	(2)(3)(8)(10)	Healthcare & Pharmaceuticals	SOFR	5.00%	10.53%	11/15/2021	11/15/2028	4		4		4		0.00
HS Spa Holdings Inc.	^	(2)(3)(10)	Consumer Services	SOFR	5.75%	11.12%	6/2/2022	6/2/2029	861		846		862		0.42
IQN Holding Corp.	^	(2)(3)(10)	Business Services	SOFR	5.25%	10.64%	5/2/2022	5/2/2029	3,040		3,000		3,060		1.50
iRobot Corporation	#	(2)(3)(8)	Consumer Goods: Durable	SOFR	6.50%, 2.50% PIK	14.42%	7/25/2023	7/31/2026	4,939		4,939		5,125		2.52
Jeg's Automotive, LLC	#	(2)(3)(8)	Automotive	SOFR	6.00%	11.46%	12/22/2021	12/22/2027	5		5		3		0.00
Kaseya, Inc.	#	(2)(3)(10)	High Tech Industries	SOFR	3.50%, 2.50% PIK	11.38%	6/23/2022	6/23/2029	1,408		1,313		1,409		0.69
LVF Holdings, Inc.	#	(2)(3)(8)(10)	Beverage & Food	SOFR	5.75%	11.25%	6/10/2021	6/10/2027	20		19		19		0.01
Material Holdings, LLC	#	(2)(3)(8)	Business Services	SOFR	6.00%	11.45%	8/19/2021	8/19/2027	5		5		5		0.00
Maverick Acquisition, Inc.	#	(2)(3)(8)	Aerospace & Defense	SOFR	6.25%	11.60%	6/1/2021	6/1/2027	21		21		17		0.01
Medical Manufacturing Technologies, LLC	#	(2)(3)(8)(10)	Healthcare & Pharmaceuticals	SOFR	5.50%	11.01%	12/23/2021	12/23/2027	4		3		4		0.00
NEFCO Holding Company LLC	#^	(2)(3)(8)(10)	Construction & Building	SOFR	6.50%	12.14%	8/5/2022	8/5/2028	7,083		6,961		7,102		3.49
NEFCO Holding Company LLC	#	(2)(3)(8)(10)	Construction & Building	SOFR	6.50%	12.03%	12/1/2023	8/5/2028	444		389		451		0.22
North Haven Fairway Buyer, LLC	#^	(2)(3)(10)	Consumer Services	SOFR	6.50%	11.85%	5/17/2022	5/17/2028	14,965		14,719		15,124		7.42
North Haven Stallone Buyer, LLC	#	(2)(3)	Consumer Services	SOFR	5.50%	11.29%	10/11/2022	5/24/2027	199		196		194		0.10
North Haven Stallone Buyer, LLC	#	(2)(3)(8)(10)	Consumer Services	SOFR	6.00%	11.14%	11/3/2023	5/24/2027	323		213		232		0.11
Oak Purchaser, Inc.	#^	(2)(3)(10)	Business Services	SOFR	5.50%	10.87%	4/28/2022	4/28/2028	6,422		6,367		6,217		3.05
Oranje Holdco, Inc.	#^	(2)(3)(10)	Business Services	SOFR	7.50%	12.88%	2/1/2023	2/1/2029	8,052		7,852		8,123		3.99
Park County Holdings, LLC	^	(2)(3)(9)	Media: Advertising, Printing & Publishing	SOFR	7.11%	12.47%	11/29/2023	11/29/2029	12,000		11,756		11,754		5.77

17

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
Pestco Intermediate, LLC	^	(2)(3)(8)(10)	Environmental Industries	SOFR	6.50%	12.03%	2/6/2023	2/17/2028	$	5,518	$	5,313	$	5,450	2.68	%
PF Atlantic Holdco 2, LLC	#	(2)(3)(8)(10)	Leisure Products & Services	SOFR	5.50%	11.12%	11/12/2021	11/12/2027	5		5		4		0.00
PF Atlantic Holdco 2, LLC	^	(2)(3)(8)(10)	Leisure Products & Services	SOFR	6.00%	11.37%	11/21/2023	11/12/2027	319		250		290		0.14
Project Castle, Inc.	^	(2)(3)	Capital Equipment	SOFR	5.50%	10.89%	6/24/2022	6/1/2029	988		900		871		0.43
Pushpay USA Inc.	#^	(2)(3)(8)(10)	Diversified Financial Services	SOFR	6.75%	12.28%	5/10/2023	5/10/2030	12,007		11,644		11,953		5.87
PXO Holdings I Corp.	#	(2)(3)(8)(10)	Chemicals, Plastics & Rubber	SOFR	5.50%	11.00%	3/8/2022	3/8/2028	5		5		5		0.00
QNNECT, LLC	^	(2)(3)(10)	Aerospace & Defense	SOFR	7.00%	12.38%	11/2/2022	11/2/2029	5,302		5,128		5,420		2.66
Quantic Electronics, LLC	#	(2)(3)(8)	Aerospace & Defense	SOFR	6.25%	11.70%	8/17/2021	3/1/2027	7		7		7		0.00
Radwell Parent, LLC	#^	(2)(3)(10)	Wholesale	SOFR	6.75%	12.10%	12/1/2022	4/1/2029	14,023		13,635		14,112		6.93
RSC Acquisition, Inc.	^	(2)(3)(8)	Diversified Financial Services	SOFR	5.50%	10.93%	5/31/2022	11/1/2029	10,228		10,159		10,162		4.99
SCP Eye Care HoldCo, LLC	#^	(2)(3)(8)(10)	Healthcare & Pharmaceuticals	SOFR	5.75%	11.21%	10/7/2022	10/7/2029	9,436		9,161		9,347		4.59
Smarsh Inc.	#	(2)(3)(10)	Software	SOFR	5.75%	11.10%	2/18/2022	2/18/2029	1		1		1		0.00
Spotless Brands, LLC	#^	(2)(3)(8)(10)	Consumer Services	SOFR	6.50%	12.03%	6/21/2022	7/25/2028	14,095		13,860		14,104		6.92
Summit Acquisition, Inc.	^	(2)(3)(10)	Diversified Financial Services	SOFR	6.75%	12.10%	5/4/2023	5/1/2030	4,455		4,288		4,482		2.20
TIBCO Software Inc.	#	(2)(3)	High Tech Industries	SOFR	4.50%	9.95%	9/30/2022	3/31/2029	2,481		2,287		2,419		1.19
Trader Corporation (Canada)	#^	(2)(3)(6)(10)	Automotive	CDOR	6.75%	12.19%	12/22/2022	12/22/2029	C$	11,990	8,604		9,156		4.49
Tufin Software North America, Inc.	^	(2)(3)(8)(10)	Software	SOFR	7.69%	13.20%	8/17/2022	8/17/2028	7,414		7,289		7,348		3.61
USALCO, LLC	#	(2)(3)(8)	Chemicals, Plastics & Rubber	SOFR	6.00%	11.61%	10/19/2021	10/19/2027	5		5		5		0.00
USR Parent Inc.	^	(2)(3)(9)	Retail	SOFR	7.60%	12.94%	4/22/2022	4/25/2027	3,778		3,751		3,740		1.84
Vensure Employee Services, Inc.	#	(2)(3)(10)	Business Services	SOFR	5.25%	10.63%	12/15/2023	3/26/2027	305		268		267		0.13
Wineshipping.com LLC	#	(2)(3)(8)(10)	Beverage & Food	SOFR	5.75%	11.29%	10/29/2021	10/29/2027	3		3		3		0.00
Yellowstone Buyer Acquisition, LLC	#	(2)(3)(8)	Consumer Goods: Durable	SOFR	5.75%	11.18%	9/13/2021	9/13/2027	2		2		2		0.00
First Lien Debt Total											$	310,091	$	314,802	154.54	%
Second Lien Debt (0.0% of fair value)
11852604 Canada Inc. (Canada)	#	(2)(3)(6)(8)	Healthcare & Pharmaceuticals	SOFR	9.50% (100% PIK)	15.04%	9/30/2021	9/30/2028	4		4		4		0.00

18

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
AP Plastics Acquisition Holdings, LLC	#	(2)(3)(8)	Chemicals, Plastics & Rubber	SOFR	7.50%	12.96%	8/10/2021	8/10/2029	$	10	$	10	$	10	—	%
Second Lien Debt Total											$	14	$	14	—	%

Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (0.5% of fair value)
Blackbird Holdco, Inc.	#	(7)	Capital Equipment	12/14/2021	0	$	2	$	2	0.00	%
Buckeye Parent, LLC	#	(7)(11)	Automotive	12/22/2021	0	0		0		0.00
GB Vino Parent, L.P.	#	(7)(11)	Beverage & Food	10/29/2021	0	0		0		0.00
NearU Holdings LLC	#	(7)(11)	Consumer Services	8/16/2022	5	494		228		0.11
NEFCO Holding Company LLC	#	(7)	Construction & Building	8/5/2022	0	152		152		0.07
Pascal Ultimate Holdings, L.P	#	(7)(11)	Capital Equipment	7/21/2021	0	0		0		0.00
Picard Parent, Inc.	#	(7)	High Tech Industries	9/30/2022	1	724		797		0.39
Profile Holdings I, LP	#	(7)(11)	Chemicals, Plastics & Rubber	3/8/2022	0	0		0		0.00
Summit K2 Midco, Inc.	#	(7)(11)	Diversified Financial Services	4/27/2023	91	91		121		0.06
Talon MidCo 1 Limited	#	(7)(11)	Software	8/17/2022	136	194		226		0.11
Equity Investments Total						$	1,657	$	1,526	0.74	%
Total investments—non-controlled/non-affiliated						$	311,762	$	316,342	155.28	%
Total investments						$	311,762	$	316,342	155.28	%

# Denotes that all or a portion of the assets are owned by Carlyle Secured Lending III (together with its consolidated subsidiary, “we,” “us,” “our,” “CSL III,” or the “Company”). The Company has entered into a senior secured revolving credit facility ( as amended, the “Subscription Facility”). The lenders of the Subscription Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 5, Borrowings, to these unaudited consolidated financial statements). Accordingly, such assets are not available to creditors of the Company's wholly owned subsidiary, Carlyle Secured Lending III SPV, L.L.C. (the “SPV”).

^ Denotes that all or a portion of the assets are owned by the Company’s wholly owned subsidiary, the SPV. The SPV has entered into a senior secured revolving credit facility (the “SPV Credit Facility” and, together with the Subscription Facility, the “Credit Facilities”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 5, Borrowings, to these unaudited consolidated financial statements). Accordingly, such assets are not available to creditors of the Company.

** Par amount is denominated in USD (“$”) unless otherwise noted, as denominated in Canadian Dollar (“C$”), Euro (“€”) or British Pound (“£”).

(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2023, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2023, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2023. As of December 31, 2023, the reference rates for variable rate loans were the 30-day SOFR at 5.35%, the 90-day SOFR at 5.33%, the 180-day SOFR at 5.16%, the daily SONIA at .5.19%, the 90-day EURIBOR at 3.91% and the 30-day CDOR at 5.45%.

(3)Loan includes interest rate floor feature, which ranges from 0.50% to 3.00%.

(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.

19

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

(5)Fair value is determined in good faith by or under the direction of CSL III Advisor, LLC, the Company’s investment adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these unaudited consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments and equity investments was determined using significant unobservable inputs.

(6)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(7)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of December 31, 2023, the aggregate fair value of these securities is $1,526, or 0.74%, of the Company's net assets.

(8)Loans include a credit spread adjustment that ranges from 0.10% to 0.43%.

(9)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.

(10)As of December 31, 2023, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:

Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount **		Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
ADPD Holdings, LLC	Delayed Draw	1.00	%	$	6,354	$	(598)
ADPD Holdings, LLC	Revolver	0.50		828		(78)
Allied Benefit Systems Intermediate LLC	Delayed Draw	1.00		948		(14)
Alpine Acquisition Corp II	Revolver	0.50		689		(30)
Apex Companies Holdings, LLC	Delayed Draw	1.00		2,305		5
Ascend Buyer, LLC	Revolver	0.50		0		(0		)
Associations, Inc.	Delayed Draw	1.00		48		(0		)
Associations, Inc.	Revolver	0.50		0		(0		)
Atlas AU Bidco Pty Ltd (Australia)	Revolver	0.50		67		1
Avalara, Inc.	Revolver	0.50		1,350		20
BlueCat Networks, Inc. (Canada)	Delayed Draw	1.00		3,699		(79)
Bradyifs Holdings, LLC	Delayed Draw	1.00		376		(8)
Bradyifs Holdings, LLC	Revolver	0.50		383		(8)
CD&R Madison Parent Ltd (United Kingdom)	Delayed Draw	0.50		£	429	5
Celerion Buyer, Inc.	Delayed Draw	2.00		499		5
Celerion Buyer, Inc.	Revolver	0.50		249		2
CoreWeave Compute Acquisition Co. II, LLC	Delayed Draw	1.00		489		(9)
Coupa Holdings, LLC	Delayed Draw	1.00		193		4
Coupa Holdings, LLC	Revolver	0.50		148		3
CPI Intermediate Holdings, Inc.	Delayed Draw	1.00		2,783		(24)
CST Holding Company	Revolver	0.50		423		4
Denali Midco 2, LLC	Delayed Draw	1.00		2,300		—
Dwyer Instruments, Inc.	Revolver	0.50		847		—
Eliassen Group, LLC	Delayed Draw	1.00		3,015		(37)
Ellkay, LLC	Revolver	0.50		1		(0		)
Excel Fitness Holdings, Inc.	Delayed Draw	1.00		875		(3)

20

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount **		Fair Value
Excel Fitness Holdings, Inc.	Revolver	0.50	%	$	594	$	(8)
Excelitas Technologies Corp.	Delayed Draw	1.00		389		(6)
Excelitas Technologies Corp.	Revolver	0.50		429		(6)
FPG Intermediate Holdco, LLC	Delayed Draw	1.00		12,317		(108)
Hercules Borrower LLC	Delayed Draw	1.00		1		0
Hoosier Intermediate, LLC	Revolver	0.50		1		0
HS Spa Holdings Inc.	Revolver	0.50		114		0
IQN Holding Corp.	Delayed Draw	1.00		1,688		6
IQN Holding Corp.	Revolver	0.50		489		2
Kaseya, Inc.	Delayed Draw	1.00		4,211		1
Kaseya, Inc.	Revolver	0.50		385		—
LVF Holdings, Inc.	Revolver	0.38		2		(0		)
Medical Manufacturing Technologies, LLC	Revolver	0.50		0		—
NEFCO Holding Company LLC	Delayed Draw	1.00		2,401		6
NEFCO Holding Company LLC	Revolver	0.50		538		1
North Haven Fairway Buyer, LLC	Revolver	0.50		923		9
North Haven Stallone Buyer, LLC	Delayed Draw	1.00		4,781		(86)
Oak Purchaser, Inc.	Delayed Draw	0.50		303		(8)
Oak Purchaser, Inc.	Revolver	0.50		584		(16)
Oranje Holdco, Inc.	Revolver	0.50		1,007		8
Pestco Intermediate, LLC	Delayed Draw	2.00		2,081		(18)
Pestco Intermediate, LLC	Revolver	0.50		357		(3)
PF Atlantic Holdco 2, LLC	Delayed Draw	1.00		3,193		(27)
PF Atlantic Holdco 2, LLC	Revolver	0.50		0		(0		)
Pushpay USA Inc.	Revolver	0.50		926		(4)
PXO Holdings I Corp.	Delayed Draw	1.00		0		(0		)
PXO Holdings I Corp.	Revolver	0.50		0		(0		)
QNNECT, LLC	Delayed Draw	1.00		1,325		24
Radwell Parent, LLC	Revolver	0.38		837		5
SCP Eye Care HoldCo, LLC	Delayed Draw	1.00		849		(7)
SCP Eye Care HoldCo, LLC	Revolver	0.50		358		(3)
Smarsh Inc.	Delayed Draw	1.00		0		(0		)
Smarsh Inc.	Revolver	0.50		0		(0		)
Spotless Brands, LLC	Revolver	0.50		358		0
Summit Acquisition, Inc.	Delayed Draw	0.50		1,031		5
Summit Acquisition, Inc.	Revolver	0.50		515		2
Trader Corporation (Canada)	Revolver	1.00		C$	906	13

21

CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

Investments—non-controlled/non-affiliated	Type	Unused Fee		Par/ Principal Amount **		Fair Value
Tufin Software North America, Inc.	Delayed Draw	—	%	$	35	$	(0)
Tufin Software North America, Inc.	Revolver	0.50		357		(3)
Vensure Employe Services, Inc.	Delayed Draw	1.00		2,195		(33)
Wineshipping.com LLC	Revolver	0.50		0		(0)
				$	75,674	$	(1,093)

(11)Represents a non-income producing security as of December 31, 2023.     

As of December 31, 2023, investments at amortized cost and fair value consisted of the following:

Type	Amortized Cost		Fair Value		% of Fair Value
First Lien Debt	$	310,091	$	314,802	99.5	%
Second Lien Debt	14		14		0.0
Equity Investments	1,657		1,526		0.5
Total	$	311,762	$	316,342	100.0	%

The rate type of debt investments at amortized cost and fair value as of December 31, 2023 was as follows:

Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	310,105	$	314,816	100.0	%
Fixed Rate	—		—		—
Total	$	310,105	$	314,816	100.0	%

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CARLYLE SECURED LENDING III

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2023

(amounts in thousands)

The industry composition of investments at amortized cost and fair value as of December 31, 2023 was as follows:

Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	5,156	$	5,444	1.7	%
Automotive	8,609		9,159		2.9
Beverage & Food	22		22		0.0
Business Services	30,726		31,353		9.9
Capital Equipment	20,967		21,253		6.7
Chemicals, Plastics & Rubber	20		20		0.0
Construction & Building	14,524		14,753		4.7
Consumer Goods: Durable	4,941		5,127		1.6
Consumer Goods: Non-Durable	7,062		7,244		2.3
Consumer Services	44,515		44,110		13.9
Containers, Packaging & Glass	14,374		14,380		4.5
Diversified Financial Services	39,368		40,441		12.8
Environmental Industries	15,040		15,491		4.9
Healthcare & Pharmaceuticals	17,306		17,614		5.6
High Tech Industries	13,304		13,571		4.3
Leisure Products & Services	5,967		6,072		1.9
Media: Advertising, Printing & Publishing	11,756		11,754		3.7
Retail	3,751		3,740		1.2
Software	9,587		9,785		3.1
Sovereign & Public Finance	5,938		5,923		1.9
Telecommunications	11,313		11,408		3.6
Transportation: Cargo	9,345		9,033		2.9
Wholesale	18,171		18,645		5.9
Total	$	311,762	$	316,342	100.0	%

The geographical composition of investments at amortized cost and fair value as of December 31, 2023 was as follows:

Geography	Amortized Cost		Fair Value		% of Fair Value
Australia	$	2,919	$	2,948	0.9	%
Canada	15,852		16,341		5.2
United Kingdom	4,269		4,717		1.5
United States	288,722		292,336		92.4
Total	$	311,762	$	316,342	100.0	%

The accompanying notes are an integral part of these unaudited consolidated financial statements.

23

CARLYLE SECURED LENDING III

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of March 31, 2024

(amounts in thousands, except share and per share data, unless otherwise indicated)

1. ORGANIZATION

Carlyle Secured Lending III (together with its consolidated subsidiary, the “Company” or “CSL III”) is a Delaware statutory trust formed on February 8, 2021 and structured as an externally managed, non-diversified closed-end investment company. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”) beginning with the year ending December 31, 2022 as well as maintain such election in future taxable years. However, there is no guarantee that the Company will qualify to make such an election for any taxable year. For the initial tax year ended December 31, 2021, the Company was taxed as a regular C Corporation.

The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments with favorable risk-adjusted returns. The Company’s investment strategy seeks to extract enhanced yield from a directly originated, and defensively constructed, portfolio of credit investments. The strategy’s core focus is U.S. middle market cash flow finance, principally in companies supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle’s Global Credit platform while offering risk diversifying portfolio benefits. In describing the Company’s business, the Company uses the term “middle market” to refer generally to companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company seeks to achieve its investment objective primarily through a portfolio weighted towards first lien loans or unitranche loans (including last out portions of such loans), while a minority of our portfolio may also include, but not be limited to, assets such as second lien loans, unsecured debt, subordinated debt and select investments in preferred and common equities and structured products with loans that typically have a contractual maturity of six to seven years and typically do not preclude early repayment.

The Company invests primarily in loans to middle market companies whose debt has been rated below investment grade or would likely be rated below investment grade if it was rated. These securities, which are often referred to as “junk,” have predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

The Company commenced operations on May 28, 2021 (“Commencement”). On February 24, 2022, the Company completed its initial closing of capital commitments from unaffiliated investors in the Company’s private offering (the “Initial Closing Date”). Up to and including August 24, 2023, the Company has held additional closings subsequent to the Initial Closing Date.

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

The Company is externally managed by CSL III Advisor, LLC (together with its successors, the “Investment Adviser”), an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle Global Credit Administration L.L.C. (the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are consolidated subsidiaries of Carlyle Investment Management L.L.C., a wholly owned subsidiary of The Carlyle Group Inc. “Carlyle” refers to The Carlyle Group Inc. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global investment firm publicly traded on the Nasdaq Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.

Carlyle Secured Lending III SPV, L.L.C. (the “SPV”) is a Delaware limited liability company that was formed on August 31, 2022. The SPV, which invests in first and second lien senior secured loans, is a wholly owned subsidiary of the Company and is consolidated in these unaudited consolidated financial statements commencing from the date of its formation.

As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).

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To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its shareholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to shareholders, provided that the Company satisfies those requirements.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”). The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, the SPV. All significant intercompany balances and transactions have been eliminated. U.S. GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.

The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the interim periods presented have been included. These adjustments are of a normal, recurring nature. This Form 10-Q should be read in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 2023. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results to be expected for the full year.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the unaudited consolidated financial statements. Actual results could differ from these estimates and such differences could be material.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment at the time of exit using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3, Fair Value Measurements, to these unaudited consolidated financial statements for further information about fair value measurements.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash, cash equivalents and restricted cash are held with two large financial institutions and cash held in such financial institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit. As of March 31, 2024 and December 31, 2023, the Company held restricted cash balances of $9,367 and $5,120, respectively, which represent amounts that are collected and held by trustees appointed by the Company for payment of interest expense and principal on the outstanding borrowings, or reinvestment into new assets. The amounts are held by the trustees as custodians of the assets securing certain of the Company’s financing transactions. As of March 31, 2024 and December 31,

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2023, approximately $466 and $254, respectively, of the restricted cash balances were denominated in a foreign currency. As of March 31, 2024 and December 31, 2023, the cost of foreign currencies was $481 and $257, respectively.

Revenue Recognition

Interest from Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any.

The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK income represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. As of March 31, 2024 and December 31, 2023, the fair value of the loans in the portfolio with PIK provisions was $30,718 and $31,407, respectively, which represents approximately 8.8% and 9.9%, respectively, of total investments at fair value. For the three months ended March 31, 2024 and 2023, the Company earned $164 and $139, in PIK income, respectively.

Other Income

Other income may include income such as consent, waiver, amendment, unused, underwriting and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the three months ended March 31, 2024 and 2023, the Company earned $798 and $226, respectively, in other income, primarily from amendment, prepayment, and commitment fees.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past due or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are current or there is no longer any reasonable doubt that such principal or interest will be collected in full and, in management’s judgment, are likely to remain current. Management may determine not to place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2024 and December 31, 2023, there were no first and second lien debt investments on non-accrual status.

Organizational Expenses and Offering Costs

The Company bears, among other expenses and costs, organizational expenses and offering costs relating to the offering of the common shares of beneficial interest of the Company incurred on or prior to the final closing date (collectively, the “Organizational and Offering Costs”) up to a maximum aggregate amount of 0.15% of the Company’s total capital commitments. The Company’s final closing date was extended on February 21, 2023 by the Board of Trustees to permit the Company to accept shares up to and on August 24, 2023 ( the “Final Closing Date”). In order to more fairly allocate the organizational expenses in connection with the Company’s formation among all shareholders, investors subscribing after the initial capital drawdown from investors in the Company’s private offering (the “Initial Drawdown” and the date on which the Initial Drawdown occurs, the “Initial Drawdown Date”) are required to bear a pro rata portion of such expenses at the time of their first investment in the Company. To the extent the Company’s total capital commitments later increased from the Initial Drawdown Date, the Investment Adviser or its affiliates will be reimbursed by the Company for past payments of excess Organizational and Offering Costs made on the Company’s behalf up to 0.15% of total capital commitments, subject to the Reimbursement Agreement (as defined below); provided, further, that the Investment Adviser or its affiliates may not be reimbursed for payment of excess Organizational and Offering Costs that were incurred more than three years prior to the proposed reimbursement.

The Company’s offering costs will be amortized over the twelve months beginning on the closing date for all closings occurring after the Initial Closing Date. As of both March 31, 2024 and December 31, 2023, the Investment Advisor has incurred $2,196 of Organizational and Offering Costs, of which $467 would be reimbursable by the Company subject to the

26

Reimbursement Agreement (as defined below). For the three months ended March 31, 2024, there were no organizational expenses incurred by the Company. The Company incurred $5 in offering costs for the three months ended March 31, 2024. For the three months ended March 31, 2023, the Company incurred $10 and $33 in organizational expenses and offering costs, respectively.

Credit Facilities – Related Costs, Expenses and Deferred Financing Costs

The Company and the SPV have each entered into a senior secured revolving credit facility (the “Subscription Facility” and, as amended, the “SPV Credit Facility,” respectively, and together, the “Credit Facilities”). Interest expense and unused commitment fees on the Credit Facilities are recorded on an accrual basis. Unused commitment fees are included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.

The Credit Facilities are recorded at carrying value, which approximates fair value.

Deferred financing costs include capitalized expenses related to the closing or amendments of the Credit Facilities. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility. The unamortized balance of such costs is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.

Income Taxes

The Company was taxed as a regular C Corporation for the initial tax year ended December 31, 2021. Beginning with the year ending December 31, 2022, for federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its shareholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements applicable to RICs require the Company to distribute to its shareholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. For the three months ended March 31, 2024 and 2023, the Company incurred $35 and $9, respectively, in excise tax expense.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. The SPV is a disregarded entity for tax purposes and is consolidated with the tax return of the Company. All penalties and interest associated with income taxes, if any, are included in income tax expense.

Dividends and Distributions to Shareholders

To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its shareholders. Dividends and distributions to shareholders are recorded on the record date. The amount to be distributed, if any, is determined by the Board of Trustees each quarter. Any dividends to the Company’s shareholders will be declared out of assets legally available for distribution.

The Company has adopted a dividend reinvestment plan, pursuant to which the Company will reinvest all cash dividends declared by the Board of Trustees on behalf of the Company’s shareholders unless the investors opt out of the dividend reinvestment plan.

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Functional Currency

The functional currency of the Company is the U.S. Dollar. Investments are generally made in the local currency of the country in which the investments are domiciled and are translated into U.S. Dollars with foreign currency translation gains or losses recorded within net change in unrealized appreciation (depreciation) on investments in the accompanying Consolidated Statements of Operations. Foreign currency translation gains and losses on non-investment assets and liabilities are separately reflected in the accompanying Consolidated Statements of Operations.

Earnings Per Common Share

The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Basic earnings per common share is calculated by dividing the net increase (decrease) in net assets resulting from operations attributable to common shares by the weighted average number of common shares outstanding. Diluted earnings per common share reflects the assumed conversion of all dilutive securities.

Recent Accounting Standards Updates

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim period within fiscal years beginning after December 15, 2024. The Company does not expect this guidance to impact its consolidated financial statements.

3. FAIR VALUE MEASUREMENTS

The Company applies fair value accounting in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.

Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of personnel of the Investment Adviser; (iii) the Board of Trustees engages a third-party valuation firm to provide positive assurance on portions of first lien senior secured loans, “unitranche” loans and second lien senior secured loans each quarter (such that each non-traded investment is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) if applicable, prior to September 8, 2022, the Audit Committee of the Board of Trustees (the “Audit Committee”) reviewed the assessments of the Investment Adviser and the third-party valuation firm; and (v) if applicable, prior to September 8, 2022, the Board of Trustees discussed the valuation recommendations of the Audit Committee and determined the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant: 

•the nature and realizable value of any collateral;

28

•call features, put features and other relevant terms of debt;

•the portfolio company’s leverage and ability to make payments;

•the portfolio company’s public or private credit rating;

•the portfolio company’s actual and expected earnings and discounted cash flow;

•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;

•the markets in which the portfolio company does business and recent economic and/or market events; and

•comparisons to comparable transactions and publicly traded securities.

Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the unaudited consolidated financial statements as of March 31, 2024 and audited consolidated financial statements as of December 31, 2023.

U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows: 

•Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. Financial instruments in this category generally include unrestricted securities, including equities and derivatives, listed in active markets. The Investment Adviser does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

•Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

•Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur. For the three months ended March 31, 2024 and 2023, there were no transfers between levels.

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The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of March 31, 2024 and December 31, 2023:

	March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	346,533	$	346,533
Second Lien Debt	—		—		14		14
Equity Investments	—		—		714		714
Total	$	—	$	—	$	347,261	$	347,261

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	314,802	$	314,802
Second Lien Debt	—		—		14		14
Equity Investments	—		—		1,526		1,526
Total	$	—	$	—	$	316,342	$	316,342

The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:

	Financial Assets
	For the three months ended March 31, 2024
	First Lien Debt		Second Lien Debt		Equity Investments		Total
Balance, beginning of period	$	314,802	$	14	$	1,526	$	316,342
Purchases	33,301		—		—		33,301
Sales	(490)		—		(741)		(1,231)
Paydowns	(2,626)		—		—		(2,626)
Accretion of discount	483		—		17		500
Net realized gains (losses)	3		—		—		3
Net change in unrealized appreciation (depreciation)	1,060		—		(88)		972
Balance, end of period	$	346,533	$	14	$	714	$	347,261
Net change in unrealized appreciation (depreciation) relating to Level 3 investments still held at the reporting date and included within the Consolidated Statements of Operations	$	1,060	$	—	$	(15)	$	1,045

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	Financial Assets
	For the three months ended March 31, 2023
	First Lien Debt		Second Lien Debt		Equity Investments		Total
Balance, beginning of period	$	197,068	$	15	$	2,998	$	200,081
Purchases	37,637		—		81		37,718
Sales	25		—		—		25
Paydowns	(1,635)		—		—		(1,635)
Accretion of discount	244		1		1		246
Net realized gains (losses)	9		—		—		9
Net change in unrealized appreciation (depreciation)	1,000		—		28		1,028
Balance, end of period	$	234,348	$	16	$	3,108	$	237,472
Net change in unrealized appreciation (depreciation) relating to Level 3 investments still held at the reporting date and included within the Consolidated Statements of Operations	$	1,000	$	—	$	28	$	1,028

The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:

Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Investment Adviser carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value the Company’s portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.

Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.

Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.

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The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of March 31, 2024 and December 31, 2023:

	Fair Value as of March 31, 2024		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	327,970	Discounted Cash Flow	Discount Rate	8.74	%	21.00	%	11.40	%
	18,563		Consensus Pricing	Indicative Quotes	90.50	%	100.00	%	98.68	%
Total First Lien Debt	346,533
Investments in Second Lien Debt	14		Discounted Cash Flow	Discount Rate	12.45	%	17.94	%	14.16	%
Total Second Lien Debt	14
Investments in Equity	2		Income Approach	Discount Rate	14.47	%	14.47	%	14.47	%
	712		Market Approach	Comparable Multiple	6.00x		18.00x		12.87x
Total Equity Investments	714
Total Level 3 Investments	$	347,261

	Fair Value as of December 31, 2023		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	287,321	Discounted Cash Flow	Discount Rate	8.79	%	18.80	%	10.76	%
	27,481		Consensus Pricing	Indicative Quotes	88.25	%	98.50	%	97.64	%
Total First Lien Debt	314,802
Investments in Second Lien Debt	14		Discounted Cash Flow	Discount Rate	12.22	%	17.29	%	13.77	%
Total Second Lien Debt	14
Investments in Equity	799		Income Approach	Discount Rate	13.54	%	14.47	%	13.54	%
	727		Market Approach	Comparable Multiple	6.25x		18.00x		12.62x
Total Equity Investments	1,526
Total Level 3 Investments	$	316,342

The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates and indicative quotes. The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.

Financial instruments disclosed but not carried at fair value

The carrying values of the secured borrowings generally approximate their respective fair values due to their variable interest rates. Secured borrowings are categorized as Level 3 within the hierarchy. The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.

4. RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On June 21, 2021, the Company’s Board of Trustees, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Trustees”) approved an investment advisory agreement (the “Investment Advisory Agreement”) between the Company and Carlyle Global Credit Investment Management L.L.C. (the “Initial Investment Adviser”). On November 2, 2021, the Board of Trustees approved a novation agreement, which was executed by the Company, the Investment Adviser and the Initial Investment Adviser, on November 11, 2021, pursuant to which a novation of the Investment Advisory Agreement was effected so that the Investment Adviser was substituted for the Initial Investment Adviser and the Initial Investment Adviser was released from its obligations under the Investment Advisory Agreement. In connection therewith, the Board of Trustees approved an amended and restated investment advisory agreement, which was executed by the Company and the Investment Adviser on November 11, 2021, the terms of

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which are substantially identical to the terms of the Investment Advisory Agreement, except for (1) the substitution of the Investment Adviser for the Initial Investment Adviser as a party thereto, (2) associated changes relating to the legal forms of such parties, and (3) a limited number of non-material changes to the existing Investment Advisory Agreement.

Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Trustees and by the vote of a majority of the Independent Trustees. On May 2, 2024, the Company’s Board of Trustees, including a majority of the Independent Trustees approved at an in-person meeting the continuance of the Company’s Investment Advisory Agreement with the Investment Adviser for an additional one year term. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Pursuant to the Investment Advisory Agreement and subject to the overall supervision of the Board of Trustees, the Investment Adviser provides investment advisory services to the Company. For providing these services, the Investment Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.

The base management fee is calculated and payable quarterly in arrears at an annual rate of 1.50% of the average value of the Company's gross assets at the end of the two most recently completed fiscal quarters; provided, however, that the annual rate shall be 1.00% with respect to the amount of such average value of the gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average of the Company’s net asset value (“NAV”) at the end of the two most recently completed calendar quarters. The base management fee will be appropriately adjusted for any share issuances or repurchases during such fiscal quarter and the base management fees for any partial month or quarter will be pro-rated. The Company’s gross assets exclude any cash, cash equivalents and restricted cash and include assets acquired through the incurrence of debt from the use of leverage.

The Investment Adviser has irrevocably agreed to waive its rights to receive any base management fee for quarterly periods ending on or prior to the date of the closing of a Liquidity Event, which means (i) a quotation or listing of the Company’s securities on a stock exchange, including through an initial public offering (an “Exchange Listing”), (ii) a transaction or series of transactions, including, but not limited to, by way of merger, division, consolidation, share exchange (including by way of an optional exchange of the Company’s shares for shares of a publicly traded BDC), recapitalization, reorganization, or sale of shares, in each case for consideration of either cash and/or publicly listed securities, or (iii) the sale of all or substantially all of the Company’s assets to, or other liquidity event with, another entity. Potential transactions for purposes of clauses (ii) and (iii) of the definition of “Liquidity Event” could include counterparties, including but not limited to other BDCs, that are advised by the Investment Adviser or its affiliates.

The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears and equals 17.5% of pre-incentive fee net investment income for the immediately preceding calendar quarter, subject to a preferred return of 1.5% per quarter (6.0% annualized), or “hurdle rate,” and a “catch-up” feature. The second part is determined and payable in arrears as of the end of each calendar year in an amount equal to 17.5% of cumulative realized capital gains, if any, from inception through the end of each calendar year, computed net of all cumulative realized capital losses and unrealized capital depreciation less the aggregate amount of any previously paid capital gain incentive fees; provided, that the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation. The Investment Adviser irrevocably agreed to waive its rights to receive any incentive fee for quarterly periods ending on or prior to the date on which the value of the Company’s gross assets first exceeds $150 million, which occurred in 2022.

For the three months ended March 31, 2024 and 2023, the Company incurred $1,399 and $769, respectively, in incentive fee on pre-incentive fee net investment income. As of March 31, 2024 and December 31, 2023, $1,399 and $1,167, respectively, was unpaid and included incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

Accrued capital gains incentive fees are based upon the cumulative net realized and unrealized appreciation (depreciation) from inception. Accordingly, the accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. For the three months ended March 31, 2024 and 2023, there were no accrued or realized capital gains incentive fees.

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Expense Support and Conditional Reimbursement Agreement

On May 13, 2022, the Company entered into an Expense Support and Conditional Reimbursement Agreement (the “Reimbursement Agreement”) with the Investment Adviser. Under the Reimbursement Agreement, the Investment Adviser shall pay other operating expenses of the Company on the Company’s behalf (the “Required Expense Payment”) such that other operating expenses of the Company do not exceed 0.125% (0.50% on annualized basis) (the “Expense Limitation”) (i) of the Company’s total investments at amortized cost, excluding cash, cash equivalents and restricted cash, as of the end of the applicable calendar quarter with respect to any such quarter after the first calendar quarter for which the total investments at amortized cost exceeds $150 million, and (ii) of the average of the Company’s total investments at amortized cost, excluding cash, cash equivalents and restricted cash, as of the beginning of the applicable calendar quarter and as of the end of such calendar quarter with respect to any calendar quarter up to and including the first calendar quarter for which the total investments at amortized cost exceeds $150 million. For any calendar quarter prior to March 31, 2022 (the “Effective Date” and any such quarter, a “Prior Quarter”), the Investment Adviser shall make a Required Expense Payment as if the Expense Limitation had been in effect for such quarter. The Investment Adviser’s obligation to make a Required Expense Payment with respect to a Prior Quarter shall become a liability of the Investment Adviser and the Company’s right to receive a Required Expense Payment shall be an asset of the Company commencing only on and as of the Effective Date.

Other operating expenses means the Company’s organization and offering expenses, professional fees, trustee fees, administration fees, and other general and administrative expenses, all as determined in accordance with U.S. GAAP, and shall include the Company’s allocable portion of compensation, overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement (as defined below). Other operating expenses shall include disbursements made by the Investment Adviser that if made by the Company would constitute an other operating expense and does not include management fees, incentive fees and interest expense.

The Company has agreed to reimburse the Investment Adviser in the amount of all Required Expense Payments made by the Investment Adviser subject to the limitation that a reimbursement will be made by the Company only if and to the extent that (i) it is made not more than three years from the date on which the applicable Required Expense Payment became an obligation of the Investment Adviser; and (ii) the Investment Adviser reimbursement does not cause the Company’s total other operating expenses during the applicable quarter to exceed the Expense Limitation.

For the three months ended March 31, 2024 and 2023, $609 and $574, respectively, of other operating expenses were reimbursable by the Investment Adviser under the agreement relating to other operating expenses incurred during the respective periods. As of March 31, 2024 and December 31, 2023, the Company has incurred other operating expenses of $6,991 and $6,382, respectively, that are subject to reimbursement by the Investment Adviser under the agreement, of which $1,271 and $972, respectively, are included in Due from Investment Adviser on the Consolidated Statements of Assets and Liabilities. All amounts eligible for recovery by the Investment Adviser at March 31, 2024 will expire three years after the first Required Expense Payment. Amounts eligible for recovery as of March 31, 2024 and December 31, 2023 expire as follows:

	As of
Reimbursement Expiration Date	March 31, 2024		December 31, 2023
Less than one year	$	—	$	—
1-3 years	6,991		6,382
Total	$	6,991	$	6,382

Administration Agreement

On June 21, 2021, the Company’s Board of Trustees approved an administration agreement (the “Administration Agreement”) between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator furnishes the Company with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities. Under the Administration Agreement, the Administrator also performs, or oversees the performance of, our required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, operations, technology and investor relations, and being responsible for the financial records that the Company is required to maintain and preparing reports to the Company’s shareholders and reports filed with the SEC. Payments under the Administration Agreement are equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Financial Officer and Chief Compliance Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit

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performs a role in the Company’s internal control assessment under the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”). Reimbursement under the Administration Agreement occurs quarterly in arrears.

Unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Trustees or by a majority vote of the outstanding voting securities of the Company, and (ii) the vote of a majority of the Company’s Independent Trustees. On May 2, 2024, the Company’s Board of Trustees, including a majority of the Independent Trustees, approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.

For the three months ended March 31, 2024 and 2023, the Company incurred $287 and $140, respectively, in fees under the Administration Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of March 31, 2024 and December 31, 2023, $304 and $278, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

Sub-Administration Agreements

On June 21, 2021, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator with access to personnel. The Company will ultimately bear the costs of the Carlyle Sub-Administration Agreement and any additional sub-administration agreements that the Administrator enters into.

On March 17, 2021, the Administrator entered into a transfer agency agreement with DST Asset Manager Solutions, Inc. (“DST” and, such agreement, the “DST Transfer Agency Agreement”).

On June 30, 2021, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreements and the DST Transfer Agency Agreement, the “Sub-Administration Agreements”).

Unless terminated earlier, the State Street Sub-Administration Agreement and DST Transfer Agency Agreement renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Trustees or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Trustees. On May 2, 2024, the Company’s Board of Trustees, including a majority of the Independent Trustees, approved the continuance of the Company’s Sub-Administration Agreements for an additional one year term.

For the three months ended March 31, 2024 and 2023, fees incurred in connection with the State Street Sub-Administration Agreement and the DST Transfer Agency Agreement amounted to $237 and $77, respectively, which were included in other general and administrative expenses in the accompanying Consolidated Statements of Operations. As of March 31, 2024 and December 31, 2023, $392 and $199, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

Placement Fees

On June 21, 2021, the Company entered into a placement fee arrangement with TCG Capital Markets L.L.C. (“TCG”), a licensed broker dealer and an affiliate of the Investment Adviser, which may require shareholders to pay a placement fee to TCG for TCG’s services.

For the three months ended March 31, 2024 and 2023, TCG did not earn placement fees from the Company’s shareholder in connection with the issuance or sale of common shares of beneficial interest of the Company, par value $0.001 per Share.

Board of Trustees

The Company’s Board of Trustees currently consists of seven members, four of whom are Independent Trustees. The Board of Trustees has established an audit committee and a pricing committee of the Board of Trustees, and may establish additional committees in the future. For the three months ended March 31, 2024 and 2023, the Company incurred $86 and $67, respectively, in fees and expenses associated with its Independent Trustees’ services on the Company's Board of Trustees and its committees. These fees are included in trustees’ fees and expenses in the accompanying Consolidated Statements of

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Operations. As of March 31, 2024 and December 31, 2023, no fees or expenses associated with the Board of Trustees were payable.

5. BORROWINGS                         

The Company and the SPV are party to the Credit Facilities as described below. In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 150% after such borrowing. As of March 31, 2024 and December 31, 2023, asset coverage was 255.2% and 233.6%, respectively, and the Company and the SPV were in compliance with all covenants and other requirements under the Credit Facilities as of March 31, 2024. Below is a summary of the borrowings and repayments under the Credit Facilities for the three months ended March 31, 2024 and 2023, and the outstanding balances under the Credit Facilities for the respective periods.

	For the three months ended
	March 31, 2024		March 31, 2023
Outstanding borrowing, beginning of period	$	152,512	$	98,631
Borrowings	27,000		44,720
Repayments	(31,000)		(16,400)
Foreign currency translation	(323)		153
Outstanding borrowing, end of period	$	148,189	$	127,104

Subscription Facility

The Company entered into a senior secured revolving credit facility (as amended, the “Subscription Facility”) on April 22, 2022, which was subsequently amended on March 1, 2024. The Subscription Facility provides for secured borrowings of $45,000 as of March 31, 2024, which decreased to $30,000 effective April 22, 2024, per the March 1, 2024 amendment. The maximum principal amount is subject to availability under the Subscription Facility, which is based on certain of the Company’s investor equity capital commitments and a percentage determined in the lender’s reasonable discretion to account for foreign exchange volatility. The Subscription Facility has a maturity date of April 22, 2025 (April 22, 2024 prior to the March 1, 2024 amendment). The Company may borrow amounts in U.S. Dollars or certain other permitted currencies. Borrowings under the Subscription Facility bear interest at a spread to the applicable benchmark rate of 2.50% to 2.60% (2.30% to 2.55% prior to the March 1, 2024 amendment) and Canadian Overnight Repo Rate Average adjustment (“CORRA”) of 0.30%. The Company also pays a fee of 0.30% per year on undrawn amounts under the Subscription Facility.

Subject to certain exceptions, the Subscription Facility is secured by a first lien security interest in the Company’s unfunded investor equity capital commitments. The Subscription Facility includes customary covenants, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

SPV Credit Facility

The SPV entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility” and together with the Subscription Facility, the “Credit Facilities”) with a lender on September 30, 2022, which was subsequently amended on May 11, 2023 and March 29, 2024. The SPV Credit Facility provides for secured borrowings of $250,000 ($150,000 prior to the March 29, 2024 amendment), subject to availability under the SPV Credit Facility and restrictions imposed on borrowings under the Investment Company Act. The SPV Credit Facility has a revolving period through September 30, 2025 and a maturity date of September 30, 2030, with one one-year extension option, at the SPV’s election. The SPV may borrow amounts in U.S. Dollars. Borrowings under the SPV Credit Facility bear interest initially at the annual rate of three month SOFR (or, if applicable, a rate based on the prime rate or federal funds rate plus 0.50%) plus 2.85%. The SPV also pays a fee of 0.30% per year on undrawn amounts under the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly.

The SPV Credit Facility is secured by a first lien security interest on substantially all of the assets of the SPV. The SPV Credit Facility includes customary covenants, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

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Summary of Credit Facilities

The Credit Facilities consisted of the following as of March 31, 2024 and December 31, 2023:

	March 31, 2024
	Total Facility		Borrowings Outstanding		Unused  Portion (1)		Amount Available (2)
Subscription Facility	$	45,000	$	16,189	$	28,811	$	13,404
SPV Credit Facility	250,000		132,000		118,000		36,378
Total	$	295,000	$	148,189	$	146,811	$	49,782
	December 31, 2023
	Total Facility		Borrowings Outstanding		Unused  Portion (1)		Amount Available (2)
Subscription Facility	$	45,000	$	16,512	$	28,488	$	21,151
SPV Credit Facility	150,000		136,000		14,000		14,000
Total	$	195,000	$	152,512	$	42,488	$	35,151

(1)The unused portion is the amount upon which commitment fees are based.

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

For the three months ended March 31, 2024 and 2023, the components of interest expense and credit facility fees were as follows:

	For the three month periods ended
	March 31, 2024			March 31, 2023
Interest expense	$	2,708		$	2,184
Facility unused commitment fee	55			56
Amortization of deferred financing costs	167			165
Total interest expense and credit facility fees	$	2,930		$	2,405
Cash paid for interest expense and credit facility fees	$	1,854		$	1,776
Weighted average principal debt outstanding	$	132,980		$	121,011
Weighted average interest rate(1)	8.07		%	7.23		%

(1)Excludes facility unused commitment fee and amortization of deferred financing costs and debt issuance costs.

As of March 31, 2024 and December 31, 2023, the components of interest and credit facility fees payable were as follows:

	As of
	March 31, 2024			December 31, 2023
Interest expense payable	$	2,350		$	1,454
Unused commitment fees payable	54			40
Total interest and credit facility fees payable	$	2,404		$	1,494
Weighted average interest rate	8.10		%	8.15		%

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6. COMMITMENTS AND CONTINGENCIES

A summary of significant contractual payment obligations was as follows as of March 31, 2024 and December 31, 2023:

	As of
Payment Due by Period	March 31, 2024		December 31, 2023
Less than one year	$	—	$	16,512
1-3 years	16,189		—
3-5 years	—		—
More than 5 years	132,000		136,000
Total	$	148,189	$	152,512

In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the unaudited consolidated financial statements as of March 31, 2024 and audited consolidated financial statements as of December 31, 2023 for any such exposure.

As of March 31, 2024 and December 31, 2023, the Company had $311,291 in total capital commitments from shareholders, of which $102,061 and $123,697, respectively, was unfunded. As of March 31, 2024 and December 31, 2023, current officers had $76 and $96, respectively, in unfunded capital commitments to the Company.

The Company has in the past, currently is and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments. The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:

	Par/Principal Amount as of
	March 31, 2024		December 31, 2023
Unfunded delayed draw commitments	$	54,889	$	61,231
Unfunded revolving loan commitments	15,268		14,443
Total unfunded commitments	$	70,157	$	75,674

7. NET ASSETS

In connection with its formation, the Company has the authority to issue an unlimited number of common shares of beneficial interest of the Company, par value $0.001 per share (“Shares”).

The following tables summarize capital activity for the three months ended March 31, 2024 and 2023:

	Common Shares of Beneficial Interest			Capital in Excess of Par Value		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount
Balance, January 1, 2024	9,666,829	$	10	$	194,681	$	4,749	$	345	$	3,934	$	203,719
Common shares of beneficial interest issued	1,021,511	1		21,635		—		—		—		21,636
Dividend reinvestment	95,386	0		1,996		—		—		—		1,996
Net investment income (loss)	—	—		—		6,583		—		—		6,583
Net realized gain (loss)	—	—		—		—		(1)		—		(1)
Net change in unrealized appreciation (depreciation)	—	—		—		—		—		1,292		1,292
Dividends declared	—	—		—		(5,272)		—		—		(5,272)
Balance, March 31, 2024	10,783,726	$	11	$	218,312	$	6,060	$	344	$	5,226	$	229,953

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	Common Shares of Beneficial Interest			Capital in Excess of Par Value		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount
Balance, January 1, 2023	5,568,950	$	6	$	110,873	$	955	$	—	$	(2,162)	$	109,672
Common Shares of Beneficial Interest issued	1,269,130	1		25,318		—		—		—		25,319
Dividend reinvestment	68,233	0		1,351		—		—		—		1,351
Net investment income (loss)	—	—		—		3,603		—		—		3,603
Net realized gain (loss)	—	—		—		—		6		—		6
Net change in unrealized appreciation (depreciation)	—	—		—		—				870		870
Dividends declared	—	—		—		(2,819)		—		—		(2,819)
Balance, March 31, 2023	6,906,313	$	7	$	137,542	$	1,739	$	6	$	(1,292)	$	138,002

    The following table summarizes total Shares issued and proceeds related to capital activity during the two most recent fiscal years and the current fiscal year to date:

	Shares Issued	Proceeds
2022
March 31, 2022	761,040	$	15,221
June 30, 2022	1,528,780	30,545
September 28, 2022	1,066,889	21,188
December 14, 2022	2,145,380	42,607
Total	5,502,089	$	109,561
2023
March 29, 2023	1,269,130	$	25,319
September 27, 2023	1,120,349	23,292
December 28, 2023	1,404,292	29,322
Total	3,793,771	$	77,933
2024
March 27, 2024	1,021,511	$	21,636
	1,021,511	$	21,636

The Company has adopted a dividend reinvestment plan, pursuant to which the Company will reinvest all cash dividends declared by the Board of Trustees on behalf of the Company’s shareholders who do not elect to receive their dividends in cash. The following table summarizes the Shares issued under the dividend reinvestment plan since Commencement:

	Shares Issued	Share Value
2022
July 15, 2022	17,171	$	346
October 17, 2022	44,690	889
Total	61,861	$	1,235
2023
January 20, 2023	68,233	$	1,351
April 20, 2023	68,670	1,352
July 21, 2023	81,429	1,627
October 20, 2023	85,776	1,740
Total	304,108	$	6,070
2024
January 19, 2024	95,386	$	1,996
Total	95,386	$	1,996

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Earnings Per Share

The Company calculates earnings per Share in accordance with ASC 260. Basic earnings per Share was calculated by dividing the net increase (decrease) in net assets resulting from operations attributable to the Company by the weighted-average number of Shares outstanding for the period. Basic and diluted earnings per Share were as follows:

	For the three month periods ended
	March 31, 2024		March 31, 2023
Net increase (decrease) in net assets resulting from operations	$	7,874	$	4,479
Weighted-average Shares outstanding	9,799,475		5,665,083
Basic and diluted earnings per Share	$	0.80	$	0.79

The following table summarizes the Company’s dividends declared since Commencement:

Date Declared	Record Date	Payment Date	Per Share Amount
2022
June 15, 2022	June 15, 2022	July 15, 2022	$	0.51
September 14, 2022	September 14, 2022	October 19, 2022	0.51
December 23, 2022	December 23, 2022	January 20, 2023	0.35
Total			$	1.37
2023
March 15, 2023	March 15, 2023	April 20, 2023	$	0.50
June 30, 2023	June 30, 2023	July 21, 2023	0.51
September 13, 2023	September 13, 2023	October 20, 2023	0.53
December 13, 2023	December 13, 2023	January 19, 2024	$	0.54
Total			$	2.08
2024
March 13, 2024	March 13, 2024	April 19, 2024	$	0.54
Total			$	0.54

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8. CONSOLIDATED FINANCIAL HIGHLIGHTS

The following is a schedule of consolidated financial highlights for the three months ended March 31, 2024 and 2023: 

	For the three month periods ended
	March 31, 2024			March 31, 2023
Per Share Data:
Net asset value per Share, beginning of period	$	21.07		$	19.69
Net investment income (loss) (1)	0.67			0.64
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	0.13			0.15
Net increase (decrease) in net assets resulting from operations	0.80			0.79
Dividends declared (2)	(0.54)			(0.50)
Effect of offering price of subscriptions (3)	(0.01)			—
Net asset value per Share, end of period	$	21.32		$	19.98
Number of Shares outstanding, end of period	10,783,726			6,906,313
Total return based on net asset value (4)	3.80		%	3.25		%
Net assets, end of period	$	229,953		$	138,002
Ratio to average net assets(5):
Expenses before incentive fees and waivers and reimbursements of expenses	1.74		%	2.48		%
Expenses before incentive fees, after waivers and reimbursements of expenses	1.46		%	2.01		%
Expenses after incentive fees, before waivers and reimbursements of expenses	2.39		%	3.10		%
Expenses after incentive fees and waivers and reimbursements of expenses	2.11		%	2.64		%
Net investment income (loss)	3.04		%	2.91		%
Interest expense and credit facility fees	1.35		%	1.94		%
Ratios/Supplemental Data:
Asset coverage, end of period	255.18		%	208.57		%
Portfolio turnover	1.18		%	0.73		%
Total committed capital, end of period	$	311,291		$	296,361
Ratio of total contributed capital to total committed capital, end of period	67.21		%	45.55		%
Weighted-average Shares outstanding	9,799,475			5,665,083

(1)Net investment income (loss) per Share was calculated as net investment income (loss) for the period divided by the weighted average number of Shares outstanding for the period.

(2)Dividends declared per Share was calculated as the sum of dividends declared during the period divided by the number of Shares outstanding at the date of the relevant transactions (refer to Note 7, Net Assets, to these unaudited consolidated financial statements).

(3)Decrease is due to the offering price of subscriptions during the period (See Note 7, Net Assets, to these unaudited consolidated financial statements).

(4)Total return is based on the change in net asset value per Share during the year plus the declared dividends on Shares, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year.

(5)These ratios to average net assets have not been annualized.

9. LITIGATION

The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of March 31, 2024 and December 31, 2023, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.

In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these unaudited consolidated financial statements.

10. TAX

The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of March 31, 2024 and December 31, 2023.

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In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. The Company’s federal tax returns are generally subject to examination by the Internal Revenue Service for a period of three years after they are filed.

The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate. The estimated tax character of dividends declared on shares of beneficial interest for the three months ended March 31, 2024 and 2023 was as follows:

	For the three month periods ended
	March 31, 2024		March 31, 2023
Ordinary income	$	5,272	$	2,819
Tax return of capital	$	—	$	—

11. SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed elsewhere in these unaudited consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (amounts in thousands, except per share data, unless otherwise indicated)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Form 10-Q, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle Secured Lending III (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL III” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-Q and the documents incorporated by reference herein involve a number of risks and uncertainties, including statements concerning:

•our, or our portfolio companies’, future business, operations, operating results or prospects, including our and their ability to achieve our respective objectives;

•the return or impact of current and future investments;

•the general economy and its impact on the industries in which we invest;

•the impact of any protracted decline in the liquidity of credit markets on our business;

•the impact of fluctuations in interest rates on our business;

•the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

•the impact of supply chain constraints on our portfolio companies and the global economy;

•the current inflationary environment, and its impact on our portfolio companies and on the industries in which we invest;

•the impact on our business of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;

•our ability to recover unrealized losses;

•market conditions and our ability to access alternative debt markets and additional debt and equity capital;

•our contractual arrangements and relationships with third parties;

•uncertainty surrounding the financial stability of the United States, Europe and China, including a possible shutdown of the U.S. federal government;

•uncertainty surrounding Russia’s military invasion of Ukraine and the impact of geopolitical tensions in other regions such as the Middle East, and developing tensions between China and the United States;

•competition with other entities and our affiliates for investment opportunities;

•the speculative and illiquid nature of our investments;

•the use of borrowed money to finance a portion of our investments;

•our expected financings and investments;

•the adequacy of our cash resources and working capital;

•the timing, form and amount of any dividend distributions;

•the timing of cash flows, if any, from the operations of our portfolio companies;

•the ability to consummate acquisitions;

•the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;

•the ability of CSL III Advisor, LLC, our investment adviser (the “Investment Adviser”), to locate suitable investments for us and to monitor and administer our investments;

•currency fluctuations and the adverse effect such fluctuations could have on the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

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•the ability of The Carlyle Group Employee Co., L.L.C. to attract and retain highly talented professionals that can provide services to our investment adviser and administrator;

•our ability to maintain our status as a business development company (“BDC”); and

•our intent to satisfy the requirements of a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).

We use words 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. Our actual results and condition could differ materially from those implied or expressed in the forward-looking information for any reason, including the factors set forth in “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2023 (our “2023 Form 10-K”).

We have based the forward-looking statements included in this Form 10-Q on information available to us on the date of this Form 10-Q, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Overview

Carlyle Secured Lending III, a Delaware statutory trust, is a specialty finance company that is a closed-end, externally managed, non-diversified management investment company. We have elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act” or the “1940 Act”). For U.S. federal income tax purposes, we have elected to be treated as a registered investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986. We were formed on February 8, 2021 and commenced our operations on May 28, 2021. We conducted our private offering (the “Private Offering”) of Shares to investors in reliance on exemptions from the registration requirements provided by Section 4(a)(2) of the Securities Act, Regulation D promulgated thereunder and Regulation S under the Securities Act, and completed our initial closing of capital commitment on February 24, 2022 (“Initial Closing Date”). We have held additional closings subsequent to the Initial Closing Date, with our final closing occurring on August 24, 2023 (the “Final Closing Date”). We commenced our loan origination and investment activities shortly after our initial capital drawdown from our investors in the Private Offering. Our principal executive offices are located at One Vanderbilt Avenue, Suite 3400, New York, New York 10017.

Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments with favorable risk-adjusted returns. Our investment strategy seeks to extract enhanced yield from a directly originated, and defensively constructed, portfolio of credit investments. The strategy’s core focus is U.S. middle market cash flow finance, principally in companies supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle’s Global Credit platform while offering risk-diversifying portfolio benefits. In describing our business, we use the term “middle market” to refer generally to companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”). We seek to achieve our investment objective primarily through a portfolio weighted towards first lien loans or unitranche loans (including last out portions of such loans), while a minority of our portfolio may also include, but not be limited to, assets such as second lien loans, unsecured debt, subordinated debt and select investments in preferred and common equities with loans and structured products that typically have a contractual maturity of six to seven years and typically do not preclude early repayment.

We are externally managed by our Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”) and a subsidiary of Carlyle. We benefit from our Investment Adviser’s investment team of over 200 investment professionals with the deep knowledge and expertise across multiple asset classes who are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle. In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including our Investment Adviser and its affiliates.

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First Quarter 2024 Highlights

Quarterly Results

•Net investment income was $6.6 million or $0.67 per Share. Dividends declared on Shares were $5.3 million, or $0.54 per Share.

•Net investment income for the three months ended March 31, 2024 was aided by a $1.1 million increase in total investment income, compared to the three months ended December 31, 2023, primarily driven by a higher average outstanding investment balance.

•The NAV per Share increased to $21.32 as of March 31, 2024, up from $21.07 as of December 31, 2023, primarily driven by net investment income in excess of our dividend for the quarter, plus net unrealized appreciation on the portfolio.

Portfolio and Investment Activity

•As of March 31, 2024, we held 92 investments across 74 portfolio companies and 23 industries for a total fair value of $347.3 million.

•During the three months ended March 31, 2024, we had investment fundings of $33.9 million and investment repayments of $3.9 million.

Liquidity and Capital Activity

•During the three months ended March 31, 2024, we called capital resulting in 1,021,511 Shares issued for total proceeds of $21.6 million.

•We had net repayments of $4.0 million on our Credit Facilities. Total borrowing capacity under our Credit Facilities as of March 31, 2024 was $295.0 million.

•Total liquidity as of March 31, 2024 was $79.7 million in cash and undrawn debt capacity.

Key Components of Our Results of Operations

As a BDC, we believe that the key components of our results of operations for our business are earnings per Share, dividends declared, net investment income and net asset value per Share. For the three months ended March 31, 2024, we recorded basic and diluted earnings per Share of $0.80, declared a dividend of $0.54 per Share and earned $0.67 of net investment income per Share.

The following table sets forth the calculation of basic and diluted earnings per Share (dollar amounts in thousands, except per share data):

	For the three months ended
	March 31, 2024		December 31, 2023
Net increase (decrease) in net assets resulting from operations	$	7,874	$	5,958
Weighted-average Shares outstanding	9,799,475		8,305,879
Earnings per Share - Basic and Diluted	$	0.80	$	0.72

For the three months ended March 31, 2024 and December 31, 2023, we declared dividends per Share of $0.54 and $0.54, respectively. As of March 31, 2024 and December 31, 2023, our NAV per share was $21.32 and $21.07, respectively.

Investment Income

We generate investment income primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as SOFR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. At times, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity reflects the proceeds of sales of securities. We may also generate investment income in the form of

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commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.

Expenses

Our primary operating expenses include: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement; (ii) debt service and other costs of borrowings or other financing arrangements; (iii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement; and (iv) other operating expenses summarized below:

•administration fees payable under our Administration Agreement and Sub-Administration Agreements, including related expenses;

•the costs of any offerings of our Shares and other securities, if any;

•calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);

•expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies;

•the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;

•amounts payable to third parties relating to, or associated with, making or holding investments;

•the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;

•transfer agent and custodial fees;

•commissions and other compensation payable to brokers or dealers;

•U.S. federal, state and local taxes;

•independent trustee fees and expenses;

•costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including federal and state registration and any applicable listing fees;

•the costs of any reports, proxy statements or other notices to our shareholders and the costs of any shareholders’ meetings;

•the costs of specialty and custom software for monitoring risk, compliance and overall portfolio;

•fidelity bond, liability insurance, and any other insurance premiums;

•indemnification payments;

•direct fees and expenses associated with independent audits, agency, consulting and legal costs; and

•all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.

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Net Investment Income

The following table summarizes our net investment income and net investment income per common share:

	For the three months ended
	March 31, 2024		December 31, 2023
Total investment income	$	11,152	$	10,032
Total expenses (including excise tax expense)	5,178		5,302
Net investment income before waivers and reimbursements of expenses	5,974		4,730
Waivers and reimbursements of expenses	609		748
Net investment income (loss)	6,583		5,478
Weighted-average Shares outstanding	9,799,475		8,305,879
Net investment income per Share	$	0.67	$	0.66

Portfolio and Investment Activity

Portfolio Overview

The following tables summarize certain characteristics of our investment portfolio as of March 31, 2024:

	First Lien Debt			Second Lien Debt			Equity Investments			Total Investments
Count of investments	81			2			9			92
Investments, at amortized cost	$	340,762		$	14		$	933		$	341,709
Investments, at fair value	$	346,533		$	14		$	714		$	347,261
Percentage of total investments at fair value	99.8		%	0.0		%	0.2		%	100.0		%

	Weighted Average Yields at
	Amortized Cost	Fair Value
First Lien Debt(1)	12.3 %	12.1 %
Second Lien Debt(1)	14.2 %	14.0 %
Total Debt and Income Producing Investments(1)(2)	12.3 %	12.1 %

(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of March 31, 2024. Weighted average yield at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount (“OID”) and market discount earned, divided by (b) total fair value included in such securities. Weighted average yield at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned, divided by (b) total amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.

(2)Weighted average yield for total investments includes income producing equity investments.

The geographical composition of investments at fair value as of March 31, 2024 were as follows:

	As of
Geography—% of Fair Value	March 31, 2024
Australia	0.8	%
Canada	4.7
United Kingdom	2.6
United States	91.9
Total	100.0	%

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The industry composition of investments at fair value as of March 31, 2024 were as follows:

	As of
Industry—% of Fair Value	March 31, 2024
Aerospace & Defense	1.6	%
Automotive	2.6
Beverage & Food	0.0
Business Services	9.6
Capital Equipment	6.2
Chemicals, Plastics & Rubber	0.0
Construction & Building	5.1
Consumer Goods: Durable	1.2
Consumer Goods: Non-Durable	2.1
Consumer Services	14.0
Containers, Packaging & Glass	4.2
Diversified Financial Services	12.9
Environmental Industries	5.3
Healthcare & Pharmaceuticals	5.6
High Tech Industries	3.9
Leisure Products & Services	1.8
Media: Advertising, Printing & Publishing	3.3
Retail	1.1
Software	6.5
Sovereign & Public Finance	1.7
Telecommunications	3.3
Transportation: Cargo	2.6
Wholesale	5.4
Total	100.0	%

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Our investment activity for the three months ended March 31, 2024 is presented below (information presented herein is at amortized cost unless otherwise indicated):

	For the three months ended
	March 31, 2024
Investments:
Total investments, beginning of period	$	311,762
New investments purchased	33,301
Net accretion of discount on investments	500
Net realized gain (loss) on investments	3
Investments sold or repaid	(3,857)
Total Investments, end of period	$	341,709
Principal amount of investments funded:
First Lien Debt	$	33,868
Second Lien Debt	—
Equity Investments(1)	—
Total	$	33,868
Principal amount of investments sold or repaid:
First Lien Debt	$	(3,116)
Second Lien Debt	—
Equity Investments(1)	(741)
Total	$	(3,857)
Number of new funded debt investments(2)	9
Average amount of new funded debt investments	$	2,159

(1)Based on cost/proceeds of equity activity.

(2)For the three months ended March 31, 2024, 100.0% of new funded debt investments were at floating interest rates.

See the Consolidated Schedules of Investments as of March 31, 2024 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on these investments, including a list of companies and type and amount of investments.

Portfolio Credit

As part of the monitoring process, our Investment Adviser has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”. Key drivers of internal risk ratings include financial metrics, financial covenants, liquidity and enterprise value coverage. Pursuant to these risk policies, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each debt investment in our portfolio.

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Rating	Definition
1	Borrower is operating above expectations, and the trends and risk factors are generally favorable.
2	Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost basis is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.
3	Borrower is operating below expectations and level of risk to our cost basis has increased since the time of origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.
4	Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.
5	Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.

Our Investment Adviser monitors and, when appropriate, changes the risk ratings assigned to each debt investment in our portfolio. Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The below table summarizes the Internal Risk Ratings as of March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
	Fair Value		% of Fair Value	Fair Value		% of Fair Value
Internal Risk Rating 1	$	—	—%	$	—	—%
Internal Risk Rating 2	331,192		95.6	300,018		95.3
Internal Risk Rating 3	15,355		4.4	14,798		4.7
Internal Risk Rating 4	—		—	—		—
Internal Risk Rating 5	—		—	—		—
Total	$	346,547	100.0%	$	314,816	100.0%

As of March 31, 2024 and December 31, 2023, the weighted average Internal Risk Rating of our debt investment portfolio was 2.0 and none of our debt investments were assigned an Internal Risk Rating of 4-5, respectively. 

As of March 31, 2024 and December 31, 2023, there were no first and second lien debt investments on non-accrual status. For information regarding our non-accrual policy, see Note 2, Significant Accounting Policies, to the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Portfolio Financing    

Our primary source of financing consist of secured debt, which are presented on the Consolidated Statements of Assets and Liabilities as Secured borrowings. Refer to Note 5, Borrowings, to the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our financing. The following table details those sources of financing:

	Outstanding Principal Balance, as of
	March 31, 2024			December 31, 2023
Subscription Facility	$	16,189		$	16,512
SPV Credit Facility	132,000			136,000
Total	$	148,189		$	152,512
Weighted average interest rate	8.10		%	8.15		%

Subscription Facility

On April 22, 2022, we entered into a senior secured revolving credit facility (the “Subscription Facility”), as amended from time to time. The Subscription Facility provides for secured borrowings of $45,000 as of March 31, 2024, which decreased to $30,000 in connection with the March 1, 2024 amendment. The maximum principal amount is subject to

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availability under the Subscription Facility, which is based on certain of our investor equity capital commitments and a percentage determined in the lender’s reasonable discretion to account for foreign exchange volatility. The Subscription Facility has a maturity date of April 22, 2025. We may borrow amounts in U.S. Dollars or certain other permitted currencies. Borrowings under the Subscription Facility bear interest at a spread to the applicable benchmark rate of 2.50% to 2.60% and Canadian Overnight Repo Rate Average adjustment (“CORRA”) of 0.29547%. The Company also pays a fee of 0.30% per year on undrawn amounts under the Subscription Facility. Subject to certain exceptions, the Subscription Facility is secured by a first lien security interest in the Company’s unfunded investor equity capital commitments. The Subscription Facility includes customary covenants, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

The Subscription Facility consisted of the following as of March 31, 2024 and December 31, 2023:

	Total Facility		Borrowings Outstanding		Unused  Portion (1)		Amount Available (2)		Weighted Average Interest Rate
March 31, 2024	$	45,000	$	16,189	$	28,811	$	13,404	7.49	%
December 31, 2023	$	45,000	$	16,512	$	28,488	$	21,151	7.38	%

(1)The unused portion is the amount upon which commitment fees are based

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

SPV Credit Facility

The SPV entered into a senior secured revolving credit facility (the “SPV Credit Facility” and together with the Subscription Facility, the “Credit Facilities”) with a lender on September 30, 2022, which was subsequently amended May 11, 2023 and March 29, 2024. The SPV Credit Facility provides for secured borrowings of 250,000, subject to availability under the SPV Credit Facility and restrictions imposed on borrowings under the Investment Company Act. The SPV Credit Facility has a revolving period through September 30, 2025 and a maturity date of September 30, 2030, with one one-year extension option, at the SPV’s election. The SPV may borrow amounts in U.S. Dollars or certain other permitted currencies. Borrowings under the SPV Credit Facility bear interest initially at the annual rate of three month SOFR (or, if applicable, a rate based on the prime rate or federal funds rate plus 0.50%) plus 2.85%. The SPV also pays a fee of 0.30% per year on undrawn amounts under the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The SPV Credit Facility is secured by a first lien security interest on substantially all of the assets of the SPV. The SPV Credit Facility includes customary covenants, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

The SPV Credit Facility consisted of the following as of March 31, 2024 and December 31, 2023:

	Total Facility		Borrowings Outstanding		Unused  Portion (1)		Amount Available (2)		Weighted Average Interest Rate
March 31, 2024	$	250,000	$	132,000	$	118,000	$	36,378	8.18	%
December 31, 2023	$	150,000	$	136,000	$	14,000	$	14,000	8.24	%

(1)The unused portion is the amount upon which commitment fees are based

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

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Consolidated Results of Operations

For the three months ended March 31, 2024 and December 31, 2023

The following table sets forth information regarding our consolidated results of operations for the three month periods ending March 31, 2024 and December 31, 2023, respectively:

	Three Months Ended				Change
	March 31, 2024		December 31, 2023		$
Investment income:
Interest income	$	10,190	$	9,360	$	830
PIK income	164		152		12
Other income	798		520		278
Total investment income	11,152		10,032		1,120
Expenses:
Offering costs	5		9		(4)
Net investment income incentive fees	1,399		1,167		232
Professional fees	115		189		(74)
Administrative service fees	287		393		(106)
Interest expense and credit facility fees	2,930		3,002		(72)
Trustees’ fees and expense	86		67		19
Other general and administrative	321		325		(4)
Excise tax expense	35		150		(115)
Total expenses	5,178		5,302		(124)
Less waivers and reimbursements of expenses	(609)		(748)		139
Expenses after waivers and reimbursements of expenses	4,569		4,554		15
Net investment income (loss)	6,583		5,478		1,105
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments	3		—		3
Net realized currency gain (loss) on non-investment assets and liabilities	(4)		(15)		11
Net change in unrealized appreciation (depreciation) on investments	972		1,005		(33)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	320		(510)		830
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	1,291		480		811
Net increase (decrease) in net assets resulting from operations	$	7,874	$	5,958	$	1,916

Investment Income

The increase in investment income for the three months ended March 31, 2024 as compared to the three months ended December 31, 2023 was primarily driven by an increase in interest income due to a higher average outstanding investment balance and an increase in other income. As of March 31, 2024, the size of our portfolio increased to $341,709 from $311,762 as of December 31, 2023, at amortized cost. As of March 31, 2024, the weighted average yield of our total debt and income producing investments decreased to 12.3% from 12.5% as of December 31, 2023 on amortized cost.

Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of March 31, 2024 and December 31, 2023, there were no first or second lien debt investments on non-accrual status.

The increase in other income for the three months ended March 31, 2024 from the three months ended December 31, 2023 was primarily driven by an increase in amendment fees.

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Expenses

The decrease in interest expense and credit facility fees was primarily driven by lower weighted outstanding principal balance on the Credit Facilities during the three months ended March 31, 2024.

The increase in incentive fees was driven by higher pre-incentive fee net investment income for the three months ended March 31, 2024 compared to the three months ended December 31, 2023.

For the three months ended March 31, 2024, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of March 31, 2024. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4, Related Party Transactions, to the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the incentive and base management fees.

Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation)

The amount of and number of investments with realized gain (loss) and change in unrealized appreciation (depreciation) for the three months ended March 31, 2024 and December 31, 2023 were as follows:

	Three Months Ended
	March 31, 2024		December 31, 2023
Realized gains on investments	$	3	$	0
Number of investments with realized gains	4		2
Realized losses on investments	$	—	$	—
Number of investments with realized losses	—		—
Change in unrealized appreciation on investments	$	2,207	$	2,182
Number of investments with unrealized appreciation	40		38
Change in unrealized depreciation on investments	$	(1,235)	$	(1,177)
Number of investments with unrealized depreciation	29		28

Net change in unrealized appreciation (depreciation) in our investments for the three months ended March 31, 2024 was primarily driven by improving credit fundamentals and positive impact of foreign currency exchange rates.

Net change in unrealized appreciation (depreciation) is driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.

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For the three months ended March 31, 2024 and March 31, 2023

The following table sets forth information regarding our consolidated results of operations for the three month periods ending March 31, 2024 and March 31, 2023:

	Three Months Ended				Change
	March 31, 2024		March 31, 2023		$
Investment income:
Interest income	$	10,190	$	6,502	$	3,688
PIK income	164		139		25
Other income	798		226		572
Total investment income	11,152		6,867		4,285
Expenses:
Organizational expenses	—		10		(10)
Offering costs	5		33		(28)
Net investment income incentive fees	1,399		769		630
Professional fees	115		245		(130)
Administrative service fees	287		140		147
Interest expense and credit facility fees	2,930		2,405		525
Trustees’ fees and expense	86		67		19
Other general and administrative	321		160		161
Excise tax expense	35		9		26
Total expenses	5,178		3,838		1,340
Less waivers and reimbursements of expenses	(609)		(574)		(35)
Expenses after waivers and reimbursements of expenses	4,569		3,264		1,305
Net investment income (loss)	6,583		3,603		2,980
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments	3		9		(6)
Net realized currency gain (loss) on non-investment assets and liabilities	(4)		(3)		(1)
Net change in unrealized appreciation (depreciation) on investments	972		1,028		(56)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	320		(158)		478
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	1,291		876		415
Net increase (decrease) in net assets resulting from operations	$	7,874	$	4,479	$	3,395

    

Investment Income

The increase in investment income for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by an increase in interest income due to a higher average outstanding investment balance and higher weighted average interest rates. As of March 31, 2024, the size of our portfolio increased to $341,709 from $238,478 as of March 31, 2023, at amortized cost. As of March 31, 2024, the weighted average yield of our total debt and income producing investments increased to 12.3% from 12.0% as of March 31, 2023 based on amortized cost.

Interest income and PIK income on our first and second lien debt investments are dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of March 31, 2024 and March 31, 2023, there were no first or second lien debt investments on non-accrual status.

The increase in other income for the three months ended March 31, 2024 from the three months ended March 31, 2023 was primarily driven by higher amendment and prepayment fees.

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Expenses

The increase in interest expense and credit facility fees for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by higher weighted average interest rates due to higher benchmark rates.

The increase in incentive fees was driven by higher pre-incentive fee net investment income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

For the three months ended March 31, 2024, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of March 31, 2024. The accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4, Related Party Transactions, to the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the incentive and base management fees.

Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation)

The amount of and number of investments with realized gain (loss) and change in unrealized appreciation (depreciation) for the three months ended March 31, 2024 and March 31, 2023 were as follows:

	Three Months Ended
	March 31, 2024		March 31, 2023
Realized gains on investments	$	3	$	9
Number of investments with realized gains	4		1
Realized losses on investments	$	—	$	—
Number of investments with realized losses	—		—
Change in unrealized appreciation on investments	$	2,207	$	1,563
Number of investments with unrealized appreciation	40		53
Change in unrealized depreciation on investments	$	(1,235)	$	(535)
Number of investments with unrealized depreciation	29		19

Net change in unrealized appreciation (depreciation) in our investments for the three months ended March 31, 2024 was primarily driven by improving credit fundamentals and positive impact of foreign currency exchange rates.

Net change in unrealized appreciation (depreciation) is driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.

Financial Condition, Liquidity and Capital Resources

Capitalization

We have capitalized our business to date primarily through the issuance and sale of our Shares and asset-level financing. We may also fund a portion of our investments through borrowings under the Credit Facilities, as well as through securitization of a portion of our existing investments. As of March 31, 2024, we had $148,189 of outstanding consolidated indebtedness under the Credit Facilities, as previously discussed within Portfolio and Investment Activity - Portfolio Financing. As of March 31, 2024, we had $79,675 of liquidity that can be used to satisfy our short-term cash requirements and working capital for our business. Refer to Note 5, Borrowings, to the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our financing. As of March 31, 2024 and December 31, 2023, net financial leverage was 0.53x and 0.57x, respectively.

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Sources of Liquidity

Our primary sources of liquidity include cash and cash equivalents and available borrowings under our Credit Facilities.

	March 31, 2024		December 31, 2023
Cash, cash equivalents and restricted cash	$	29,893	$	37,131
Available borrowings under Credit Facilities	49,782		35,151
Total Liquidity	$	79,675	$	72,282

We generate cash from the net proceeds of offerings of our Shares and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Credit Facilities, the issuance of debt, and through securitization of a portion of our existing investments. The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our shareholders, repurchases of our Shares and for other general corporate purposes. We believe our current cash position, available capacity on our revolving credit facilities, which is well in excess of our unfunded commitments, and net cash provided by operating activities will provide us with sufficient resources to meet our obligations and continue to support our investment objectives, including reserving for the capital needs which may arise at our portfolio companies.

Liquidity Needs

Our primary liquidity needs include our funding of new and existing portfolio investments, payment of operating expenses and interest and principal payments under the Credit Facilities.

Contractual Obligations and Contingencies

In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q as of March 31, 2024 and December 31, 2023 for any such exposure.

We have in the past, currently are and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments. We had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of March 31, 2024 and December 31, 2023:

	Par / Principal Amount as of
	March 31, 2024		December 31, 2023
Unfunded delayed draw commitments	$	54,889	$	61,231
Unfunded revolving commitments	15,268		14,443
Total unfunded commitments	$	70,157	$	75,674

Cash Flows

The following table details the net change in our cash and cash equivalents:

	For the three months ended
	March 31, 2024
Cash flows provided by (used in) operating activities	$	(22,197)
Cash flows provided by (used in) financing activities	14,959
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(7,238)

During the three months ended March 31, 2024, we paid $33,136 related to cost of investments purchased and received $3,884 in repayments on our investments. During the three months ended March 31, 2024, we had net repayments of $4,000 on the Credit Facilities. During the three months ended March 31, 2024, we issued 1,021,511 Shares for an aggregate offering price of approximately $21,636.

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Asset Coverage

In accordance with the Investment Company Act, a BDC is only allowed to borrow amounts such that its “asset coverage,” as defined in the Investment Company Act, satisfies the minimum asset coverage ratio specified in the Investment Company Act after such borrowing. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock.

Prior to March 23, 2018, BDCs were required to maintain a minimum asset coverage ratio of 200%. On March 23, 2018, an amendment to Section 61(a) of the Investment Company Act was signed into law to permit BDCs to reduce the minimum asset coverage ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. Under the 200% minimum asset coverage ratio, BDCs are permitted to borrow up to one dollar for investment purposes for every one dollar of investor equity, and under the 150% minimum asset coverage ratio, BDCs are permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity. In other words, Section 61(a) of the Investment Company Act, as amended, permits BDCs to potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1.

On June 21, 2021, the Board of Trustees, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and the shareholders of the Company, respectively, approved the application to the Company of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the Investment Company Act, as amended. As a result, the minimum asset coverage ratio applicable to the Company was reduced from 200% to 150%, effective as of June 21, 2021.

As of March 31, 2024 and December 31, 2023, the Company had total senior securities of $148,189 and $152,512, respectively, consisting of secured borrowings under the Credit Facilities, and had asset coverage ratios of 255.2% and 233.6%, respectively.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and judgments are based on historical information, information currently available to us and on various other assumptions management believes to be reasonable under the circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations. Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. There have been no material changes in the critical accounting estimates since those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.

Valuation Risk

Our investments generally do not have a readily available market price. Our Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, values our investments for which market quotations are not readily available in good faith at fair value in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. In addition, because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.

Interest Rate Risk

As of March 31, 2024, on a fair value basis, all of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors. The Credit Facilities are subject to floating interest rates and are primarily paid based on floating SOFR rates.

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Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.

The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. These hypothetical interest income calculations are based on a model of the settled debt investments in our portfolio, held as of March 31, 2024 and December 31, 2023, and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings as of March 31, 2024 and December 31, 2023 and based on the terms of our Credit Facilities. Interest expense on our Credit Facilities is calculated using the stated interest rate as of March 31, 2024 and December 31, 2023, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may significantly impact our net interest income.

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

Based on our Consolidated Statements of Assets and Liabilities as of March 31, 2024 and December 31, 2023, the following table shows the annual impact on net investment income of base rate changes in interest rates for our settled debt investments (considering interest rate floors for variable rate instruments) and outstanding secured borrowings assuming no changes in our investment and borrowing structure:

	As of March 31, 2024						As of December 31, 2023
Basis Point Change	Interest Income		Interest Expense		Net Investment Income		Interest Income		Interest Expense		Net Investment Income
Up 300 basis points	$	10,446	$	(4,446)	$	6,000	$	9,523	$	(4,575)	$	4,948
Up 200 basis points	$	6,964	$	(2,964)	$	4,000	$	6,349	$	(3,050)	$	3,299
Up 100 basis points	$	3,482	$	(1,482)	$	2,000	$	3,174	$	(1,525)	$	1,649
Down 100 basis points	$	(3,482)	$	1,482	$	(2,000)	$	(3,174)	$	1,525	$	(1,649)
Down 200 basis points	$	(6,964)	$	2,964	$	(4,000)	$	(6,349)	$	3,050	$	(3,299)
Down 300 basis points	$	(10,422)	$	4,446	$	(5,976)	$	(9,495)	$	4,575	$	(4,920)

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Exchange Act.

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The Company may become party to certain lawsuits in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 9, Litigation, to the unaudited consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors

In addition to the other information set forth within this Form 10-Q, consideration should be given to the information disclosed in “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Except as previously reported by the Company on a Current Report on Form 8-K, we did not sell any equity securities during the period covered in this report that were not registered under the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended March 31, 2024, no director, trustee or Section 16 officer of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

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Item 6. Exhibits.

10.1	Loan and Servicing Agreement, dated as of September 30, 2022, and conformed through Amendment No.2 dated as of March 29, 2024, among Carlyle Secured Lending III, as Holdings, Carlyle Secured Lending III SPV, L.L.C., as the Borrower, Massachusetts Mutual Life Insurance Company and the other Lenders from time to time party hereto, Wilmington Trust National Association, as the Administrative Agent, Massachusetts Mutual Life Insurance Company, as the Calculation Agent, Carlyle Secured Lending III, as the Portfolio Asset Servicer, Wilmington Trust, National Association, as the Collateral Custodian, and Wilmington Trust, National Association, as the Account Bank.*
10.2	First Amendment to the Senior Secured Revolving Credit Agreement, dated as of March 1, 2024, among Carlyle Secured Lending III, the other borrower parties thereto, Morgan Stanley Senior Funding, Inc., and Morgan Stanley Bank, N.A.*
31.1	Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*
31.2	Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
32.1	Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document*
101.SCH	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)*

* Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CARLYLE SECURED LENDING III
Dated: May 13, 2024	By	/s/ Thomas M. Hennigan
		Thomas M. Hennigan Chief Financial Officer (principal financial officer)

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