Good day and thank you for standing by. Welcome to the Carlyle Credit Income Fund 4th Quarter 2025 Financial Results and Investor Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Joseph Castilla. Please go ahead.

Good morning and welcome to Carlyle Credit Income Fund's fourth quarter 2025 earnings call. With me on the call today is Nishal Mehta, CCIF's principal executive officer and president, Lauren Bazmagin, CCIF's Chair and Carlisle's Global Head of Liquid Credit, and Nelson Joseph, CCIF's Principal Financial Officer. Last night, we issued our Q4 financial statements and a corresponding press release and earnings presentation discussing our results, which are available on the Investor Relations section of our website. Following our remarks today, we will hold a question and answer session for analysts and institutional investors. This call is being webcast and a replay will be available on our website. Any forward-looking statements made today do not guarantee future performance and any undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the risk factors section of our annual report on the Form N-CSR. These risks and uncertainties could cause actual results to differ materially from those indicated. Carlyle Credit Income Fund assumes no obligation to update any forward-looking statements at any time. During the conference call, we may discuss adjusted net investment income per common share and core net investment income per common share, which are calculated and presented on a basis other than in accordance with GAAP. We use these non-GAAP financial measures internally to analyze and evaluate financial results and performance, and we believe these non-GAAP financial measures are useful to investors gauging the quality of the fund's financial performance, identifying trends in the results, and providing meaningful period-to-period comparison. The presentation of this non-GAAP measure is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation. With that, I'll turn the call over to Nishal. Thanks, Joe. Good

Good morning everyone and thank you all for joining CCIF's quarterly earnings call. I'd like to start by reviewing the funds activities over the last quarter. We maintain our monthly dividend at 10.5 cents per share for 24.1% annualized based on the share price as of November 12, 2025, which is now declared through February of 2026. The monthly dividend is supported by 51 cents of recurring cash flows for the quarter, providing 162% of dividend coverage. New SEAL investments during the quarter totaled $34.9 million with the weighted average gap yield of 13.7%. The aggregate portfolio weighted average gap yield was 14.4% as of September 30th. We continued to optimize the portfolio and rotate out of 10 SEAL investments for total proceeds of $36.5 million. Within CCI's portfolio, we completed seven refinancings and resets in Q4 2025, reducing the cost of liabilities, extending the reinvestment periods, and bolstering equity cash flows across these CLOs. We've stiked refinancing and reset activity to continue, taking advantage of historically tight CLO liability spreads. We continue to leverage Carlyle's standing presence in the CLO market as one of the world's largest sealer managers, with a 15-year track record of investing in third-party sealers to manage a diversified portfolio of sealer equity investments. While lower liability costs and extended reinvestment periods have continued support sealer structures, tighter loan spreads continue to weigh on portfolio yields and valuations during the quarter. Repricing activity remains driven by the persistent supply-demand imbalance in the loan market, with limited net loan issuance over the past three years set against continued record levels of sealer formation. The weight average spread on the underlying loan portfolio was 3.12%, a decline of 10 basis points over the past three months, and 34 basis points over the past 12 months. As a result, quarterly payments declined, with CSAF producing an average cash yield of 21.8% for the quarter. Loan spreads have historically followed multi-year cycles, and current levels are similar to those observed in 2018 when loan spreads tightened to the lowest level post-financial crisis, falling a record amount of loan rate pricings in 2017 and the first half of 2018. This was followed by meaningful spread widening in the following two and a half years due to a better supply-demand balance and market volatility. We believe steel equity today's position to benefit from a similar dynamic. We expect loan activity will increase in 2026, supported by declining base rates, normalization of tariff and regulatory policy, and continued economic growth. We are starting to see the beginning of this trend as LBO issuance and the broadly syndicated loan market in October 2025 was the highest in over three and a half years. And CarL's capital markets and private equity teams are also seeing an increase in deal activity. CLOs are locking in historically low funding costs, and any loan spread widening can significantly increase returns for SOLIO as of September 30th. The portfolio generates a gap yield of 14.44% on a cost basis, supported by cash-on-cash yields of 21.8% on CLO investment quarterly payments received during the quarter. The wait-average years left in reinvestment period remain flat at 3.3 years. This provides CLO managers the opportunity to capitalize on periods of volatility through active management. There are also zero CLOs in the portfolio that are post-reinvestment period. We believe the portfolio weight average junior over-collateralization cushion of 4.59% is healthy and offsets potential defaults and losses in the underlying loan portfolios. The weight average spread of the underlying loan portfolio was 3.12%. The average percentage of loans rated CCC by S&P was 4.3%, below the 7.5% CCC limit in SEAL is. As a reminder, once a SEAL has more than 7.5% of its portfolio rated CCC, the excess over 7.5% is marked at the lower fair market value, or radiancy recovery rates, and reduces the over-cloudization cushion. And the percentage of loans trading below 80 decreased from 3.1% to 2.6%. We continue to leverage the depth of the Carlisle Liquid Credit Platform and our collaborative OneCarlisle platform to source and invest in high-quality CILO portfolios through a disciplined, bottom-up, 15-step investment process. With that, I will now hand the call over to Lauren to discuss the current market environment.

Thank you, Nishal. I'd now like to provide an update on the recent developments across both the loan and CLO markets. CLO issuance totaled $52 billion for the quarter, up from $49 billion in the prior quarter, reflecting a meaningful pickup in activity. CLOs continued to serve as a key source of demand for the loan market, absorbing steady primary issuance and supporting secondary liquidity. CLO liability spreads tightened across the capital stack, with AAAs moving approximately 10 basis points tighter and BBs compressing 40 basis points during the quarter, approaching the post-financial crisis tights we saw earlier in 2025. Reset and refinancing activity remain robust, with $38 billion of refinancings and $66 billion of resets pricing during the quarter as managers extended reinvestment periods and lowered financing costs. The share of U.S. CLOs out of their reinvestment period has declined to roughly 13 percent, down from about 40 percent in 2023, reflecting a market with expanded reinvestment capacity. Moving to the loan market, U.S. leveraged loans delivered another resilient quarter supported by steady investor demand and stable credit conditions. The LSTA loan index returned 1.7 percent, and the index ended the quarter a little over $97, with nearly half of loans trading over par. Moderating inflation and steady economic conditions provided additional support for the asset class. Credit fundamentals across the U.S. leveraged loan market remained stable during the quarter. Within Carlyle's portfolio of nearly 600 borrowers in Carlyle's CLO management platform, which we view as a representative proxy for third-party managed CLO portfolios, borrowers reported year-over-year revenue growth of 5% and EBITDA growth of 4.6% during the quarter. The average borrower's interest coverage ratio increased to 3.6 times quarter-over-quarter, reflecting the impact of growing EBITDA and shrinking base rates. Overall, borrower credit quality and performance remain consistent with historical averages, supporting a stable outlook heading into year-end. From a default perspective, though recent bankruptcies have raised questions about the health of the leveraged borrowers in our market, we do not believe these events reflect current underwriting trends. While we will continue to see defaults both in and out of court, we do not forecast a meaningful increase from today's default rate of 3.5%, which is below the cycle's peak of 4.5% reached in the fourth quarter of 2024. CCIF's underlying loan portfolio experienced a default rate of just 1.1%, inclusive of out-of-court restructurings, less than a third of a broader market. CCIF has been able to achieve a lower default rate by leveraging our in-house credit expertise from over 20 U.S. credit analysts to complete bottom-up fundamental analysis on underlying loan portfolios. I will now turn the call back to Nelson, our CFO, to discuss the financial results.

Thank you, Lauren. Today, I will begin with a review of our fourth quarter earnings. The cash-on-cash yield of 21.8% on CLO investment quarterly payments resulted in 51 cents per share of recurring cash flow. Total investment income for the fourth quarter was 7.7 million or 37 cents per share. Total expenses for the quarter was $4.6 million. Total net investment income for the fourth quarter was $3.2 million, or 15 cents per share. Adjusted net investment income for the fourth quarter was $3.6 million, or 17 cents per share. Adjusted NII adjusts for the 2 cents per share impact from the amortization of the OID and issuance costs for the fund's preferred shares and credit facility. Core net investment income for the fourth quarter was $0.32 per share, providing dividend coverage of 102% of our monthly dividend of $0.105 per share. We believe core net investment income is a more accurate representation of CCIS distribution requirement. Net asset value for September 30th was $6.13 per share. Our net asset value and valuations are based on the bid side mark we receive from a third party on 100% of the CLO portfolio. We continue to hold one legacy real estate asset in the portfolio. The fair market value of the loan is $2.2 million. The third party we engage to sell our position continues to work through the sales process. Now turning to the funding side of CSIF. During the quarter, we entered into a $30 million credit facility. The credit facility allows for borrowings at a rate of SOFR plus 3.25% with no unused fees and can be upsized to $50 million. Additionally, on October 30th, we issued 7.375% Series D term preferred shares that generated net proceeds before expenses of approximately $29.4 million. The Series D term preferred shares are listed on the New York Stock Exchange under the symbol CCID. Also on October 30th, we completed a private placement of five-year 7.25% Series E convertible preferred shares that generated net proceeds before expenses of approximately $16.3 million. The holders of the Series E convertible preferred shares have the option after six months to convert the shares into common stock at the greater of NAV, or the average closing price of the five previous trading days. The fund used to proceed from both offerings to redeem all $52 million of 8.75% Series A term preferred shares on November 3rd, reducing the cost of capital by approximately 1.42%. With that, I will turn it back to initial.

Thanks, Nelson. We remain confident in the fundamentals of CCI's portfolio, which is diversified across high-quality managers and structure it to withstand involving market conditions. We've positioned the portfolio defensively, emphasizing experienced managers in transactions that demonstrate strong power build and credit discipline. CCIF continues to deliver competitive dividend yield that remains fully covered by core net investment income, reflecting the strength and stability of the underlying cash flows in the portfolio. We continue to deploy capital selectively focusing on opportunities that offer compelling relative value across both new and

seasoned transactions. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from Gaurav Mehta with Alliance Global Partners. Your line is open. Thank you. Good morning.

I was hoping to get some more color on the investment opportunities you're seeing in the market between primary and secondary.

Good morning. It's Nishal here. So we continue to see opportunities across both the secondary and primary markets. We think the relative value between the two markets is relatively similar. So it's not that we're focusing on one market versus the other. We're seeing unique and interesting opportunities in both today.

Okay. And during the quarter, the investments that you made, can you provide details on the breakdown between primary and secondary?

I don't have the breakdown at the top of my head, and we'll come back to you on that. But I think this quarter was probably more secondary focused, but we continue to look at primary as well.

Okay. As a follow-up on the investments that you sold, do you think you have more opportunities to recycle?

in the next few quarters? Yeah, look, we're always looking to optimize the portfolio. And so a couple of things that we've been focused on in the last six months is really looking at positions that unfortunately have underperformed expectations and as a result have low gap yields. And so most of that is obviously driven by the spread compression and loan repricings we've seen. And so we continue to look at the portfolio, and we continue to do kind of rotation trades, even post-quarter end. So I expect that to continue, maybe to a lesser extent to what we've done over the past six months, though.

Okay. Thank you. That's all I have.

Thank you. Our next question comes from Eric Zwick with Lucid Capital Markets. Your line is open.

Thank you. Good morning, everyone. I wanted to start, if I look at the portfolio and look at the number of investments that are out of their non-call period and still have relatively wide spreads on them, it looks like the potential opportunity for resets and refis is maybe smaller than it was three months ago. Does that agree with your assessment as well?

Yeah, Erica, I agree with that. Because if you think about it, our portfolio today is about 54 positions. we've completed about 30 resets and refinancings in the fiscal year. So just the pool continues to shrink. With that being said, I would say there's probably at least another 25% of the portfolio today that could be refinancing or reset candidates. And then that pool will continue to expand as deals that were previously refinanced and reset come off their non-call period, which can be accretive just because as debt spreads continue to tighten and we approach post-GFC tights again, that can create significant value in the portfolio.

Got it. Yep. And I know you've been very successful over the past few quarters in capitalizing on those opportunities. And so that kind of leads me, I guess, to my next question. I noted that 7% of the portfolio did not make a distribution in the most recent quarter due to refis, resets, as well as some that haven't made their first distribution. So if I look at, you know, recurring cash flow for the most recent quarter at 51 cents per share, just slightly under, you know, my calculation for dividend plus operating expenses. So if there's going to be a lower volume of resets and refis and you get some of those making those first distributions, it would seem that, you know, at least directionally the, you know, recurring cash flow could be moving in the direction, if not, not even exceed the dividends and expenses going forward? Is that a fair characterization? Yeah, I think it's fair to say that the number

of deals making distributions should increase if the pace of refis and resets slows down,

just given what we've done over the past year. And then last one, just looking at where the stock trades today relative to NAB. Tracy, your thoughts of using any capital for share buybacks or if that's not as an attractive relative to the investment opportunities you see in front of you?

Yeah, it's a great question. It's something that we are constantly discussing internally within senior management and our board as well. And it's something that we do consider. The one thing that we are concerned about is given we continue to think the fund overall is subscale. And by buying back shares, that just further reduces the size of the fund. And so we are focused on really growing the fund. Obviously, we're not able to do that today. But if the fund continues to trade at these considerable discounts, it's something that we will consider in the future.

Thanks, Mitchell. Appreciate all the comments. That's all for me.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question. Our next question comes from Timothy D'Agostino with B-Riley Securities. Your line is open.

Yeah, hi. Thank you. Good morning. In the prepared remarks, you talked about working through the sales process of the one real estate asset. I was just wondering if you have any timing on when that could be done and how you plan to kind of recycle that capital. Thanks.

Yeah, it's a good question because we've been holding on to that asset for about two years now. it's a piece of land that's open for development and outside of Austin we've been working with various number of brokers to try to sell sell that property it's just I'm by no means a real estate expert I've been surprised by just the the time period it takes to sell these types of properties so it's something that we continue to focus on on the near term and just able to recycle that into kind of our existing focus on sealer equity. So hopefully we'll have a more material update on the next call.

Okay, great. And then just kind of touching on the last question, you had mentioned that, you know, the platforms under scale and it's kind of a difficult period to grow it. But I was just wondering, you know, looking over the next 12 to 24 months, what are some like the leverage you could pull in order to see some growth in the platform and maybe get to the

size that you would like to be at? Thanks. Yeah, look, I think the number one focus right now is obviously making sure or trying to get the stock to trade above NAV. We obviously have no control of that. So focus right now is optimizing, one, the portfolio. I've talked about doing kind of the portfolio rotation. Two, completing kind of the creative refinancings and resets. And even on the liability side, Nelson just talked about kind of the refinancing that we did to reduce the cost of capital. So what we can control is really how the fund performs. And so really just focusing on that and hopefully over time, the fund trades above NAV. Once that does, I think we'd go back to kind of raising capital through the ATM. We think that's a very efficient and accretive way to raise capital, and then we have our existing convertible preferreds that can convert into common stock at the higher of NAV or the five-day average closing price, so that would help grow the fund as well, but right now, we're just focused on making sure that we're optimizing both the portfolio and the liabilities.

Okay, great. Thank you so much for the time today.

Thank you. I'm showing no further questions at this time I would now like to turn it back to

initial meta for closing remarks thank you everyone we look forward to speaking to everyone next quarter if not sooner please feel free to reach out if you have any questions and thank you for all your support this concludes today's

conference call thank you for participating you may now disconnect