Carlyle Credit Solutions Vote Oct 27: Costs Rise to 9.16%
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Quick Answer
Carlyle Credit Solutions, Inc. (CARS, SEC CIK 1702510), a privately offered business development company with $1.7 billion of net assets and a tender offer every quarter, asks its stockholders to vote on October 27, 2026 to merge into a new Delaware trust that may borrow twice as much against its equity. Holders receive one share of the new fund for each share they hold, at the same NAV (NAV was $18.05 per share on August 31, 2026), and the shares will not be listed. What changes is the debt limit: the asset coverage requirement falls from 200% to 150%, the proxy's table assumes debt of 52% of gross assets against 35% today, and total annual expenses go from 6.47% to 9.16% of average net assets. Approval needs a majority of all shares entitled to vote, abstentions count as votes against, and shares tendered in the open offer still vote. That offer, for up to 4,775,077 shares, was scheduled to close on October 19, 2026 and is priced at the September 30 NAV; no extension and no result is on EDGAR as of October 22, 2026.
Key Takeaways
- The vote: a virtual special meeting on October 27, 2026 at 10:00 a.m. Eastern, record date September 22, 2026. The board recommends FOR unanimously. There are no appraisal rights, and the closing is expected in the fourth quarter of 2026. The adviser, not the fund, pays for the reorganization.
- The real change is leverage, not the legal form. The fund must keep 200% asset coverage today (256.6% at June 30, 2026, debt to equity 0.64x). The successor will operate at 150%, which allows debt of up to 2 times equity. The proxy's pro forma capitalization adds $794,164 thousand of debt, taking it from $1,096,502 thousand to $1,890,666 thousand, or 1.10 times net assets (our arithmetic).
- The cost: pro forma total annual expenses are 9.16% of average net assets against 6.47% now, because interest goes from 2.76% to 5.25% and the incentive fee from 1.25% to 1.48%. The proxy's own example puts the 10-year cost of $1,000 at $671 against $502. Management and incentive fee rates do not change, and the proxy gives no projected income or distribution figure.
- Holder rights shrink: no annual meetings, trustees removable only for cause, a derivative suit needs holders of 10% of the shares, direct suits are eliminated (federal securities claims excepted), disputes go to Delaware courts with a jury waiver, and shareholders do not vote on a liquidation. The board itself says the effects of its broader powers “cannot be predicted and might be adverse.”
- Who decides: The Saudi National Bank holds 22.07% and three Nomura trust accounts hold 37.54% together, and Nomura has agreed to vote its shares in the same proportion as all other holders. At the June 11, 2026 annual meeting 54,913,782 of 97,563,051 shares were present (56.3%, our arithmetic), and the reorganization needs a majority of all shares, not of the shares voted.
- The money signals before the vote: NAV fell from $18.82 on December 31, 2025 to $18.05 on August 31, 2026, the monthly dividend was cut from $0.16 and $0.17 to $0.14 from the May 2026 record date, and the three 2026 tender offers bought 12,299,118 shares against 4,478,525 in all of 2025 (our arithmetic).
CSV · 245 rows
Carlyle Credit Solutions: reorganization vote terms, pro forma expenses and leverage, governance changes, ownership, monthly NAV and dividends, and 15 tender offers, 2023-2026
245 rows from the joint proxy statement/prospectus, the June 30, 2026 Form 10-Q, the 2025 Form 10-K, nine monthly 8-Ks and the Schedule TO filings: vote terms, expense and capitalization tables, governance, 5% holders, NAV, dividends, sales and tender results. One accession number per row.
What the fund is, and what the vote does
Carlyle Credit Solutions, Inc. is a Maryland corporation organized on February 10, 2017 that has elected to be regulated as a business development company. It lends mostly to private-equity-backed middle market companies. At June 30, 2026 it held 292 investments with a fair value of $2,749,666 thousand, 90.5% of it first lien debt, and a weighted average yield of 9.4% on debt and income-producing investments at amortized cost. Eight investments with a fair value of $24,089 thousand, 0.9% of the portfolio, were on non-accrual. It is not listed. It sells Class I shares monthly in a continuous private offering under Regulation D and Regulation S, and its 8-K of September 18, 2026 counts 129,108,120 shares issued since the start for about $2.6 billion (dividend reinvestment excluded). Its adviser, Carlyle Global Credit Investment Management L.L.C., is a subsidiary of The Carlyle Group Inc. (for the group's own economics see Carlyle Group (CG) stock: fees, credit and evergreen funds).
On September 8, 2026 the board approved a merger of the fund into New Carlyle Credit Solutions, a Delaware statutory trust formed on July 8, 2026 that has also elected to be a BDC. The trust will take the fund's name after the merger and the fund will cease to exist. The explanation in the filings is governance and flexibility; the proxy also says the board considered that the change “could be accretive to net investment income,” and the first reason it gives is the ability to access greater leverage under a 150% asset coverage ratio. That is why this page spends most of its space on leverage, cost and rights, and less on the legal form.
The vote, point by point
| Item | What the filings say (joint proxy statement/prospectus unless noted) |
|---|---|
| Meeting | October 27, 2026, 10:00 a.m. Eastern, held virtually at www.virtualshareholdermeeting.com/CARSSM2026 |
| Who votes | Holders of record at the close of business on September 22, 2026; 96,642,336 shares were outstanding on September 21, 2026 |
| Approval needed | At least a majority of the votes entitled to be cast on the proposal, not a majority of the votes cast |
| Quorum | A majority of all votes entitled to be cast must be present |
| Abstentions | “Each abstention will have the same effect as a vote against the Reorganization Proposal.” |
| Shares in a brokerage account | The broker may not vote them without your instructions, so there are no broker non-votes |
| Unmarked proxy | Voted FOR the proposal |
| If you tender | Shares outstanding on the record date can be voted at the meeting even if tendered in the open offer (Schedule TO) |
| Appraisal rights | None under Maryland law, the governing documents or the plan |
| Exchange | One share of the successor for each share of the same class, with equal aggregate NAV; the board says there is no dilution |
| Cost | The adviser bears the costs of the reorganization and the proxy; the estimated cost to the fund is zero |
| Tax | Intended to be a tax-free reorganization under section 368(a)(1)(F) of the Code; an opinion from Sullivan & Cromwell LLP is a closing condition |
| Closing | Expected in the fourth quarter of 2026 if approved and the other conditions are met |
| Result | Final voting results are to be disclosed in a Form 8-K after the meeting |
The meeting is five days after this page's date. The final results go in a Form 8-K; Item 5.07 of that form is due four business days after the meeting, which is November 2, 2026 (our reading of the form's instructions).
What changes: the debt limit
A BDC that meets the disclosure and approval conditions can drop its asset coverage requirement from 200% to 150% under section 61(a)(2) of the Investment Company Act. In the proxy's words this “permits a BDC to have a ratio of total outstanding indebtedness to equity of 2:1 as compared to a maximum of 1:1.” The fund operates under 200% and the successor will operate under 150%. The 425 filing of September 9, 2026 and the proxy both state the consequence: “the Successor Fund will have increased borrowing risk.”
| Measure | Fund today | Successor, pro forma |
|---|---|---|
| Asset coverage requirement | 200% | 150% |
| Largest debt to equity the 1940 Act allows | 1 to 1 | 2 to 1 |
| Asset coverage reported at June 30, 2026 | 256.6% (275.2% at December 31, 2025) | not stated |
| Debt to equity at June 30, 2026 | 0.64x (0.57x at December 31, 2025) | 1.10x (our arithmetic) |
| Debt less issuance costs, June 30, 2026 | $1,096,502 thousand | $1,890,666 thousand (adds $794,164 thousand) |
| Net assets | $1,720,457 thousand | $1,720,457 thousand |
| Leverage assumed in the expense table, share of gross assets | 35% (average of the June 2026 quarter) | 52% (“the Adviser's expected target leverage profile”) |
| Asset coverage on the pro forma figures | 256.6% reported | 191% (our arithmetic), below the 200% the fund must keep today |
The last row is the point of the vote. On the proxy's own pro forma capitalization the successor would hold less than 200% asset coverage, which the fund cannot do as it stands. Its borrowing capacity also falls short of the pro forma debt: at June 30, 2026 the fund had two revolving facilities with commitments of $500,000 thousand and $550,000 thousand, $289,000 thousand of 2024-1 securitization notes, and available borrowings of $240,662 thousand which, with cash, gave total liquidity of $308,055 thousand. Commitments and notes add to $1,339,000 thousand against the $1,890,666 thousand pro forma debt (our arithmetic), so reaching the 52% target needs new borrowing capacity that the filings do not describe.
What it costs
The proxy's expense table assumes the reorganization took place on the first day of the June 2026 quarter, annualizes that quarter and expresses everything as a share of average net assets.
| Annual expense, percent of average net assets | Fund | Pro forma successor | Change (our arithmetic) |
|---|---|---|---|
| Base management fee | 0.94% | 0.94% | 0.00 |
| Incentive fee | 1.25% | 1.48% | +0.23 |
| Interest payments on borrowed funds | 2.76% | 5.25% | +2.49 |
| Other expenses | 1.33% | 1.30% | -0.03 |
| Acquired fund fees and expenses | 0.20% | 0.20% | 0.00 |
| Total annual expenses | 6.47% | 9.16% | +2.69 |
| Total expense ratio excluding interest | 3.44% | 3.64% | +0.20 |
The management fee is 1.00% of net assets, so extra leverage does not raise it. The incentive fee is a different matter: it pays the adviser 100% of income above a hurdle of 1.25% per quarter (5.00% annually) up to 1.43% per quarter (5.72% annualized), then 12.5%, and the board notes that more leverage “may make it easier” to clear the hurdle. The fee rates themselves are identical in the successor. The proxy puts the first-year increase at about 249 basis points of interest and 23 basis points of incentive fee.
| Cost of a $1,000 investment, 5% annual return (proxy example) | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| Fund, no return from capital gains | $50 | $151 | $251 | $502 |
| Pro forma successor, no return from capital gains | $75 | $219 | $356 | $671 |
| Fund, all return from capital gains | $57 | $168 | $279 | $549 |
| Pro forma successor, all return from capital gains | $81 | $236 | $381 | $707 |
The ten-year figure is $169 higher, or 34% more (our arithmetic: $671 against $502). The 425 Q&A of September 9, 2026 describes the structure as “potentially reducing certain ongoing costs over time”; the proxy, which is the document you vote on, says the successor “is expected to have higher total expenses per share” because of leverage. The proxy offers an upside, not a number: the successor “is expected to benefit from accretion to net investment income, and a corresponding potential for higher distributions.” It gives no projected net investment income and no projected distribution, so the table above is the only quantified effect.
What happens to your rights
The fund is a Maryland corporation with a staggered board; the successor is a Delaware statutory trust with no annual meeting. The proxy's comparison of governing documents shows these differences.
| Right | Fund today (Maryland corporation) | Successor (Delaware trust) |
|---|---|---|
| Annual meeting and elections | Annual meeting; directors elected in classes (the June 2026 meeting elected two Class I directors for three-year terms) | Not required to hold annual meetings; trustees serve until removed, replaced or a retirement age set by the board |
| Removing a director or trustee | For cause only, by two-thirds of the votes entitled to be cast | For cause only, by a majority of the other trustees and then 51% of the common shares |
| Quorum at a shareholder meeting | A majority of the votes entitled to be cast | One-third of the shares entitled to vote |
| Calling a meeting and proposals | Advance-notice window of 150 to 120 days before the anniversary of the prior year's proxy statement | The board or CEO calls meetings; a shareholder request must be signed by holders of at least 51% of the shares |
| Changing the governing document | 80% vote for open-ending, liquidation, merger and certain charter sections, unless the Continuing Directors approve (then a majority) | The trustees may amend the Declaration of Trust without a shareholder vote, except four listed categories |
| Liquidation | Included in the 80% list above | Shareholders do not vote on a liquidation plan, except as the 1940 Act requires |
| Derivative suits | Not addressed in the proxy's comparison (N/A) | Holders of at least 10% of the shares must join, after a demand on the board |
| Direct suits | Not addressed in the proxy's comparison (N/A) | Right to bring them eliminated, with narrow exceptions |
| Forum and jury | Not addressed in the proxy's comparison | Delaware Court of Chancery exclusively, and a waiver of jury trial; federal securities claims are carved out of this clause and the direct-suit bar |
The proxy is candid that it narrows access: for shareholder-requested meetings it says these provisions “will have the effect of significantly reducing the ability of shareholders to be able to have proposals considered at a meeting of shareholders.” Among the board's own considerations it lists that the broader trustee powers “might be adverse.” One provision touches the question of an eventual listing. If the shares were ever listed on an exchange, the trustees could amend the Declaration of Trust without a shareholder vote, including to classify the board or add supermajority votes. The proxy says the successor is expected to stay non-traded and privately offered, and that stockholders should not expect a public market.
Who decides the vote
| Holder of 5% or more (July 31, 2026) | Shares | Share of the fund |
|---|---|---|
| The Saudi National Bank (directly and through a Cayman vehicle) | 20,980,376 | 22.07% |
| Nomura Trust and Banking Co, Ltd. as trustee of 311266, Nomura Private Series | 15,765,678 | 16.58% |
| Nomura Trust and Banking Co, Ltd. as trustee of 311289, Nomura Private Series | 13,974,251 | 14.70% |
| Nomura Trust and Banking Co, Ltd. as trustee of 311265, Nomura Private Series | 5,949,496 | 6.26% |
| All directors and executive officers as a group (10 persons) | 20,837 | under 1% |
Together the three Nomura accounts hold 37.54% (our arithmetic). The proxy footnotes say Nomura “has contractually agreed with the Fund that, for so long as it owns more than 3% of the total outstanding shares of the Fund's common stock, it will vote such shares in the same proportion as the vote of all other stockholders of the Fund.” Read literally, Nomura's 37.54% adds no independent view: it is voted FOR to the extent the other holders who vote are FOR (our reading; the proxy does not apply the clause to this vote in so many words). The fund needs more FOR votes than half of all shares, about 48.3 million on the 96.6 million outstanding. If every other voting holder were FOR, the 50% line would be crossed once the other holders' own turnout reached 20% of their 62.46% (our arithmetic). At the annual meeting of June 11, 2026, 54,913,782 of 97,563,051 shares were present, 56.3% (our arithmetic), so the reorganization needs FOR votes equal to about 88% of that turnout (48.3 million of 54.9 million, our arithmetic). The adviser itself owned 919,600 shares on September 21, 2026, under 1%.
The numbers around the vote
Each month the fund files an 8-K with its NAV, the dividend it declared and its private-offering sales.
| NAV date | NAV per Class I share | Dividend declared in the same 8-K (record date) | Shares sold effective the next day (aggregate consideration) |
|---|---|---|---|
| December 31, 2025 | $18.82 | $0.16 (January 30, 2026) | 6,511,297 ($122.5 million) |
| January 31, 2026 | $18.81 | $0.16 (February 27, 2026) | 801,534 ($15.1 million) |
| February 28, 2026 | $18.54 | $0.17 (March 31, 2026) | 353,591 ($6.6 million) |
| March 31, 2026 | $18.39 | $0.16 (April 30, 2026) | 2,074,963 ($38.2 million) |
| April 30, 2026 | $18.39 | $0.14 (May 29, 2026) | 637 ($0.01 million) |
| May 31, 2026 | $18.20 | $0.14 (June 30, 2026) | 322,258 ($5.9 million) |
| June 30, 2026 | $18.01 | $0.14 (July 31, 2026) | 2,904,955 ($52.3 million) |
| July 31, 2026 | $18.04 | $0.14 (August 31, 2026) | 920,180 ($16.6 million) |
| August 31, 2026 | $18.05 | $0.14 (September 30, 2026) | 569,592 ($10.3 million) |
Each row is one monthly 8-K: the NAV as of the date shown, the dividend the board declared that month, and the private-offering sales effective on the first day of the following month. NAV fell 4.1% from December 31, 2025 to August 31, 2026 (our arithmetic), after a net unrealized loss on investments in the first half of 2026. The $0.14 monthly dividend is $1.68 a year, 9.3% of the August 31 NAV (our arithmetic).
The 10-Q for the quarter to June 30, 2026 puts the dividend in context. Net investment income was $37,088 thousand, or $0.39 per share, in the June quarter and $0.40 in the March quarter; dividends declared in the June quarter were $41,887 thousand, 113% of net investment income (our arithmetic). Over six months distributions were $89,410 thousand against net investment income of $76,181 thousand, 117% (our arithmetic). At $0.14 a month the dividend is $0.42 a quarter against $0.39 of income per share in the June quarter. Interest expense and facility fees were $15,222 thousand in the June quarter against $11,910 thousand a year earlier, before any move to the 150% limit. The proxy's argument is that more leverage can close that gap; it does not quantify it.
The tender offers: what the successor promises
The fund offers to repurchase shares every quarter at NAV. Through the offer that closed on January 21, 2026 the size was 3.5% of shares; on February 18, 2026 the board raised it to 5.0%. Shares held under one year pay a 2% early repurchase fee, and a partial tender must leave a balance of at least $20,000. If the fund goes 24 months without an offer that buys 100% of tendered shares, it may make no new investment commitments until one does. The 10-Q names the offer that began June 22, 2026 as the most recent such offer.
| Cash payment date | Offered | Shares repurchased | Share of shares outstanding | Price per share | Amount |
|---|---|---|---|---|---|
| January 31, 2025 | 3.5% | 826,938 | 1.1% | $19.43 | $16,063 thousand |
| April 28, 2025 | 3.5% | 659,197 | 0.8% | $19.23 | $12,674 thousand |
| July 29, 2025 | 3.5% | 1,782,012 | 2.3% | $19.10 | $34,036 thousand |
| October 29, 2025 | 3.5% | 1,210,378 | 1.6% | $19.03 | $23,033 thousand |
| January 30, 2026 | 3.5% | 4,180,330 (includes 1,471,222 extra) | 4.5% | $18.82 | $78,674 thousand |
| April 29, 2026 | 5.0% | 4,712,598 (includes 21,964 extra) | 4.8% | $18.39 | $86,643 thousand |
| July 30, 2026 | 5.0% | 3,406,190 | 3.6% | $18.01 | $61,265 thousand |
| Offer open September 21 to October 19, 2026 | 5.0% (up to 4,775,077 shares) | result not filed | not filed | NAV at September 30, 2026 | not filed |
The three 2026 offers bought 12,299,118 shares for $226,582 thousand, against 4,478,525 shares and $85,806 thousand in all four 2025 offers (our arithmetic): 2.7 times the shares and 2.6 times the cash. The filings do not say how many shares were tendered in each offer, only that in January and April the fund bought shares beyond the offer size, using its right to take up to 2% more. At the January 2026 offer it bought 4.5% of shares against an offer of 3.5%. In the first six months of 2026 the fund issued 10,064,280 shares for $188,210 thousand and repurchased 8,892,928 shares for $165,316 thousand, so sales still exceeded repurchases. For where this sits among its peers, see non-traded BDC tender offer results, Q3 2026 and the non-traded BDC list.
The proxy says the successor is “expected to continue the Fund's quarterly tender offer program on the same terms and at the same frequency,” that tenders are at the discretion of the successor's board, and that a successor share tendered will be credited with the holding period of the fund share it replaced, so the 2% fee does not restart. The open offer is a separate matter: it is made by the fund, was scheduled to close on October 19, 2026 and pays in promissory notes after the September 30 NAV is struck. If holders tendered more than 4,775,077 shares the fund can take up to 2% more, and otherwise it pro-rates, with priority for death or disability. At the August 31 NAV of $18.05, a full 4,775,077-share offer would be about $86.2 million (our arithmetic; the price is the September 30 NAV).
What a holder can do with this
- Find out how you hold the shares. Shares held through a broker cannot be voted by the broker on this proposal; you must send instructions, and an abstention counts as a vote against. The 425 filing of September 30, 2026 points to proxyvote.com and your control number. The meeting is the morning of October 27, 2026.
- A tender does not take away your vote. Shares outstanding on the record date can be voted even if tendered in the offer that was scheduled to close on October 19, 2026.
- Read the cost line, not the headline. The headline fee rates do not change. The 2.69 points of extra annual expense come from interest and the incentive fee; they are paid out of the fund's income before distributions. Compare them with the list of non-traded BDCs, where the median liabilities to net assets across 66 funds was 1.03 (a looser measure than the debt to equity above), and with the private credit non-accruals page for what leverage did when loans slipped.
- Watch the next filings. The Form 8-K with the vote (due by November 2, 2026), the 8-K with the September 30 NAV, the final amendment to the tender offer, and any announcement of the next offer. The filing dates of the last four offers (December 22, 2025, March 23, June 22 and September 21, 2026) point to one opening around December 21, 2026; no filing says so yet.
- Tax. The merger is intended to be tax-free and a counsel opinion is a closing condition; a later sale below cost goes on Form 8949 (see Form 8949 and Schedule D for REIT, BDC and interval fund sales). Quarter-end deadlines for all your funds are in the Q4 2026 tender and redemption calendar.
- Compare other Carlyle exits. Carlyle's interval funds have a different mechanism; see Carlyle Tactical Private Credit Fund repurchases.
A holder with a six- or seven-figure position in a fund that is about to raise its debt limit has choices that no proxy statement can settle: whether to vote and how, whether to tender in December or wait to see the first post-merger quarter, and how much of the portfolio sits in one leveraged private credit vehicle. That is a conversation for an adviser who sees the whole picture.
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All figures are from SEC filings read on EDGAR on October 21 and 22, 2026: the joint proxy statement/prospectus of Carlyle Credit Solutions, Inc. and New Carlyle Credit Solutions filed under Rule 424(b)(3) on September 24, 2026 (accession 0001193125-26-399990); the Form 8-K of September 9, 2026 (0001193125-26-385584) and Rule 425 filings of September 9 and 30, 2026 (0001193125-26-385590, 0001193125-26-408203); the DEFA14A of September 30, 2026 (0001193125-26-408200); the Form 10-Q for the quarter ended June 30, 2026 (0001702510-26-000084); the Form 10-K for 2025 (0001702510-26-000021); the Schedule TO-I of September 21, 2026 (0001702510-26-000098) and its offer to purchase; Schedule TO-I/A final amendments of January 30, April 29 and July 30, 2026 (0001702510-26-000009, -000038, -000076); the Form 8-K on the June 11, 2026 annual meeting (0001702510-26-000057); and the monthly 8-Ks of January 28 to September 18, 2026 (0001702510-26-000008, -000016, -000025, -000034, -000052, -000061, -000073, -000089, -000095). Page 'our arithmetic' lines are our calculations from those figures. This is analysis of public documents, not investment, legal or tax advice.
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