NEW YORK – Carlyle Credit Income Fund (NYSE: CCIF), a closed-end fund specializing in investments in collateralized loan obligations (CLOs), announced a private placement of its 7.125% Series B convertible preferred stock due August 2029. The Fund has entered into a purchase agreement with select institutional investors for the sale of approximately 11,517 shares of preferred stock, each with a liquidation preference of $1,000.00. The transaction is expected to provide net proceeds of approximately $10.6 million before expenses. The offering is expected to close today, subject to customary closing conditions.

The preferred shares pay a fixed annual dividend of 7.125%, which is equal to $71.25 per share. The Fund is obligated to repurchase all outstanding convertible preferred shares on August 27, 2029, at the liquidation price plus any accrued unpaid dividends. Beginning on February 27, 2025, the Fund may repurchase all or a portion of these shares.

Holders of the convertible preferred shares have the option to convert their shares into common shares of the Fund six months after the date of issuance and before the date of redemption. The conversion price will be the greater of the market price or the Fund’s net asset value per common share prior to conversion. The preferred shares will not be listed on any stock exchange and are not transferable without the consent of the Fund.

Concurrently, Carlyle Credit Income Fund has agreed to a registered direct offering of 1,444,865 common shares at a price of $7.9592 per share, with an expected closing date of June 30, 2022. This separate offering is expected to generate net proceeds before expenses of approximately $11.5 million.

Proceeds from both offerings are intended for investments consistent with the Fund’s objectives, distributions to shareholders and general working capital. The offerings are detailed in the Fund’s filings with the U.S. Securities and Exchange Commission (SEC), including a Current Report on Form 8-K.

The securities mentioned have not been registered under the Securities Act of 1933 and are being issued pursuant to an exemption from registration and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements.

This news is based on a press release from the Carlyle Credit Income Fund.

In other recent news, the Carlyle Credit Income Fund (CCIF) maintained its quarterly dividend at $0.105 per share through November 2024, demonstrating strong performance in the collateralized loan obligation (CLO) market. The fund recorded a 16.5% dividend increase based on its net asset value as of July 31, 2024, and reported a robust loan portfolio with notable EBITDA growth and moderate default rates. Investments in new CLOs reached $12.2 million during the quarter, with a significant weighted average GAAP yield of 19.5%. The fund’s total investment income for the third quarter was $7.4 million, and it successfully raised $5.5 million through an at-the-market (ATM) program. These are some of the recent developments that underscore the fund’s robust activity in the CLO market and its commitment to maintaining its dividend. The Fund’s portfolio delivered a GAAP yield of 20.26% on a cost basis and a weighted average junior overcollateralization buffer of 4.17%. The firm remains positive on the CLO market and targets an attractive dividend yield and total return.

InvestingPro Insights

As the Carlyle Credit Income Fund (NYSE: CCIF) goes through its latest offerings, investors are closely monitoring the fund’s performance and potential. According to real-time data from InvestingPro, the fund has a market cap of $116.14 million and is trading near its 52-week high, with the price at 98.75% of that peak. This indicates strong market confidence in the fund’s performance and stability.

Tips from InvestingPro point out that while CCIF pays a sizeable dividend to shareholders, with a robust 14.5% yield, it suffers from weak gross profit margins. This could be a cause for concern for investors looking for long-term profitability beyond the dividend yield. In addition, the fund’s valuation implies a poor free cash flow yield, which could suggest that it may struggle to maintain its high dividend payments in the future. However, it is worth noting that CCIF has paid dividends for 13 consecutive years, demonstrating its commitment to returning value to shareholders.

Those interested in a more in-depth analysis can find more tips for CCIF at https://www.investing.com/pro/CCIF, which can provide further insight into the fund’s financial health and investment potential.

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