Core Points - Sixth Street Specialty Lending, Inc. reported its financial results for the third quarter ended September 30, 2025 [1] - A conference call to discuss the financial results is scheduled for 8:30 a.m. Eastern Time on November 5, 2025 [1] - The conference call will be available in listen-only mode on the Investor Resources section of TSLX's website [1]

Financial Performance - For Q3 2025, Sixth Street Specialty Lending reported net investment income of $0.54 per share and net income of $0.47 per share, reflecting an annualized return on equity (ROE) of 12.5% and 11.0%, respectively[2]. - The adjusted net investment income and adjusted net income for Q3 2025 were $0.53 per share and $0.46 per share, corresponding to an annualized ROE of 12.3% and 10.8%[3]. - Total investment income for Q3 2025 was $109.4 million, a decrease from $119.2 million in Q3 2024, attributed to lower interest rates[14]. - Net investment income for the three months ended September 30, 2025, was $50.7 million, down from $57.6 million in the previous quarter, a decrease of 15.0%[29]. - Net income for the same period was $44.6 million, compared to $51.0 million in the prior quarter, reflecting a decline of 12.8%[29]. - Adjusted net investment income per share was $0.53 for the three months ended September 30, 2025, down from $0.61 in the previous quarter, a decrease of 13.1%[29]. - Annualized return on equity based on net investment income was 12.5% for the quarter, compared to 14.4% in the previous quarter, indicating a decline of 1.9 percentage points[29]. - Total investment income for the three months ended September 30, 2025, was $109.4 million, down from $119.2 million in the same period last year, a decrease of 8.8%[34]. Investment Activity - New investment commitments for Q3 2025 totaled $387.7 million, up from $297.7 million in Q2 2025[7]. - The principal amount of new investments funded was $351.8 million, with exits and repayments totaling $302.8 million during the same period[8]. - Total new investment commitments increased to $387.7 million in Q3 2025, up from $269.3 million in Q3 2024, representing a 43.9% year-over-year growth[36]. - Gross originations rose to $3,735.0 million in Q3 2025, compared to $2,502.0 million in Q3 2024, marking a 49.4% increase[36]. - The number of new investment commitments in new portfolio companies surged to 41 in Q3 2025, up from 8 in Q3 2024[36]. - The principal amount of investments funded totaled $351.8 million in Q3 2025, up from $189.0 million in Q3 2024[36]. - The principal amount of investments sold or repaid increased to $302.8 million in Q3 2025, compared to $90.2 million in Q3 2024[36]. Asset and Debt Management - The reported net asset value (NAV) per share was $17.14, a slight decrease from $17.17 at the end of Q2 2025, primarily due to the reversal of net unrealized gains[4]. - The Company had $83.2 million in cash and cash equivalents and a total principal value of debt outstanding of $1,858.7 million as of September 30, 2025[16]. - The debt-to-equity ratio increased to 1.15x at the end of Q3 2025, compared to 1.09x at the end of Q2 2025[18]. - Total assets decreased to $3,509.3 million as of September 30, 2025, from $3,582.2 million as of December 31, 2024, representing a decline of 2.0%[29]. - Total net assets increased to $1,619.7 million as of September 30, 2025, compared to $1,607.5 million as of December 31, 2024, an increase of 0.8%[32]. - Cash and cash equivalents increased to $83.2 million as of September 30, 2025, from $27.3 million as of December 31, 2024[32]. Yield and Interest Rates - The weighted average total yield of debt and income-producing securities at fair value was 11.4% for Q3 2025, down from 11.7% in Q2 2025[10]. - Weighted average yield of debt and income-producing securities at fair value was 11.4%, down from 12.3% in the previous quarter, a decrease of 0.9 percentage points[29]. - The weighted average interest rate of new investment commitments decreased to 10.3% in Q3 2025 from 12.0% in Q3 2024[36]. - The percentage of debt investment commitments at floating rates was 96.3%, slightly down from 97.2% in the previous quarter[29]. - The percentage of new debt investment commitments at floating rates reached 100.0% in Q3 2025, compared to 75.9% in Q3 2024[36]. - The weighted average spread over the reference rate of new floating rate investment commitments was 6.6% in Q3 2025, slightly down from 6.8% in Q3 2024[36]. Company Management - Sixth Street Specialty Lending is externally managed by Sixth Street Specialty Lending Advisers, LLC, an affiliate of Sixth Street, which manages over $115 billion in assets[37].

Investment Portfolio - As of September 30, 2025, the company has originated approximately $51.8 billion in aggregate principal amount of investments, retaining about $11.6 billion on its balance sheet[205] - The core portfolio companies had a weighted average annual revenue of $375.9 million and a weighted average annual EBITDA of $113.3 million, with 87.8% of total investments based on fair value[206] - Approximately 90.1% of the portfolio was invested in secured debt, including 89.2% in first-lien debt investments as of September 30, 2025[213] - As of September 30, 2025, the portfolio consisted of 89.2% first-lien debt investments, 0.9% second-lien debt investments, 1.8% mezzanine debt investments, 5.2% equity investments, and 2.9% structured credit investments[241] - The average investment size in each portfolio company was approximately $23.3 million based on fair value, increasing to $30.3 million when excluding structured credit investments[209] - The largest single investment based on fair value represented 2.3% of the total investment portfolio as of September 30, 2025[208] - The company had investments in 145 portfolio companies with an aggregate fair value of $3,376.3 million as of September 30, 2025, compared to 116 portfolio companies valued at $3,518.4 million as of December 31, 2024[243] Investment Income and Expenses - Total investment income for the three months ended September 30, 2025 was $109.4 million, a decrease from $119.2 million in the same period of 2024, while for the nine months, it was $340.8 million compared to $358.8 million[252] - Net investment income for the three months ended September 30, 2025 was $50.7 million, down from $54.9 million in 2024, and for the nine months, it was $159.5 million compared to $162.4 million[252] - Interest from investments decreased from $105.8 million for the three months ended September 30, 2024 to $94.9 million for the same period in 2025, primarily due to lower reference rates[256] - Total net expenses for the three months ended September 30, 2025 were $57.4 million, down from $63.6 million in 2024, and for the nine months, they were $177.3 million compared to $193.6 million[258] - Management fees (net of waivers) increased from $12.7 million for the three months ended September 30, 2024 to $12.8 million for the same period in 2025, reflecting an increase in average assets[261] - Professional fees increased from $1.9 million for the three months ended September 30, 2024 to $2.0 million for the same period in 2025 due to higher legal and audit-related fees[265] Debt and Financing - As of September 30, 2025, total debt amounted to $1,858.7 million, with a carrying value of $1,834.3 million[326] - The company issued a total of 4,600,000 shares of common stock at $20.52 per share in March and April 2024, receiving total cash proceeds of $93.4 million[295] - The company issued $300.0 million of unsecured notes in August 2023, maturing on August 14, 2028, with an interest rate of 6.95% per year[319] - The net proceeds from the 2029 Notes issuance were $341.6 million, used to repay outstanding indebtedness under the Revolving Credit Facility[321] - The company had approximately $1.0 billion of availability on its Revolving Credit Facility as of September 30, 2025[291] - Total contractual obligations are $1,858.7 million, with $300 million due within one year and $1,258.7 million due after five years[340] Market Conditions and Outlook - Market trends indicate a favorable environment for middle-market lending due to limited capital availability from traditional lenders and strong demand for debt capital[236] - The company anticipates that the large amount of uninvested capital held by private equity firms will continue to drive deal activity, creating additional demand for debt capital[237] - The company focuses on direct origination of loans to middle-market companies, with investment activity varying based on market conditions[225] Risk Management - The company is subject to financial market risks, including valuation risk, interest rate risk, and currency risk[350] - The company may hedge against interest rate fluctuations using instruments such as interest rate swaps and options[357] - The company may employ hedging techniques to minimize currency risk associated with foreign investments[358] Tax and Compliance - The company intends to maintain its status as a RIC by distributing at least 90% of its investment company taxable income to stockholders[267] - The company accrued excise tax on estimated excess taxable income when current year annual taxable income exceeds current year dividend distributions[268] - The company recorded a net expense of $1.4 million for U.S. federal excise tax for the three months ended September 30, 2025, compared to $0.7 million for the same period in 2024[269] Performance Metrics - The weighted average total yield of debt and income-producing securities at fair value was 11.4% as of September 30, 2025, down from 12.3% as of December 31, 2024[242] - As of September 30, 2025, 90.8% of investments were rated 1, totaling $3,062.8 million, compared to 95.1% rated 1, totaling $3,345.8 million as of December 31, 2024[251] - A hypothetical increase of 300 basis points in interest rates would result in an increase of $36.5 million in net interest income[356] - The average realized gross internal rate of return on exited investments since 2011 is 17.1%, based on total capital invested of $8.8 billion and total proceeds of $11.4 billion[280]

Core Viewpoint - The equity market serves as a significant mechanism for wealth creation or destruction over the long term, with Pacifica Yield focusing on undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1] Group 1 - Pacifica Yield aims to pursue long-term wealth creation [1] - The strategy includes a focus on undervalued yet high-growth companies [1] - High-dividend tickers, REITs, and green energy firms are also key areas of interest [1]

Core Insights - The equity market serves as a significant mechanism for wealth creation or destruction over the long term through daily price fluctuations [1] Group 1: Investment Focus - Pacifica Yield aims to create long-term wealth by focusing on undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Core Viewpoint - Kering SA is in advanced discussions to sell its beauty division to L'Oréal, with the deal potentially valuing the unit at approximately $4 billion [1] Company Summary - Kering SA is a French luxury conglomerate and the parent company of Gucci [1] - The beauty division being sold is a significant part of Kering's portfolio [1] Industry Summary - The luxury beauty market is experiencing consolidation, as evidenced by Kering's potential sale to L'Oréal [1] - L'Oréal is a major player in the beauty industry, and this acquisition could enhance its market position [1]

Core Viewpoint - Sixth Street Specialty Lending, Inc. (TSLX) is set to release its financial results for the third quarter ended September 30, 2025, on November 4, 2025, after market close [1] Financial Results Announcement - The financial results will be discussed in a webcast/conference call scheduled for November 5, 2025, at 8:30 a.m. Eastern Time [1]

Group 1 - The BDC (BIZD) segment is experiencing challenges with key variables negatively impacting player earnings and dividend coverage levels [1] - There is currently no significant headwind affecting the sector, yet dividend coverage remains extremely thin [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, focusing on corporate financial strategies and large-scale financings [1] - Berzins has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] - His policy-level work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [1]

Group 1 - The BDC (Business Development Company) sector has experienced strong performance in recent years due to sustained high interest rates [1] - Capital Southwest (CSWC) was highlighted as a top performer in the portfolio before the position was sold [1] Group 2 - The article emphasizes the importance of quality dividend-paying investments for building retirement income [2] - The author aims to assist lower and middle-class workers in creating investment portfolios focused on high-quality, dividend-paying companies [2]

Core Insights - The article emphasizes the importance of dividend investing as a pathway to financial freedom, highlighting its accessibility and potential for steady income [1]. Group 1: Investment Philosophy - The company combines financial expertise with value investing principles to create a strong financial foundation through dividend investing [1]. - The focus is on sectors such as technology, real estate, software, finance, and consumer staples, which are integral to both the company's advisory work and personal investment portfolio [1]. Group 2: Professional Background - The company has extensive experience in mergers and acquisitions (M&A) and business valuation, having evaluated numerous businesses and facilitated buy-side and sell-side transactions [1]. - Daily activities include financial modeling, conducting commercial and financial due diligence, negotiating deal terms, and participating in numerous meetings [1].