Sixth Street (TSLX) came out with quarterly earnings of $0.57 per share, missing the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.60 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.72%. A quarter ago, it was expected that this business development company would post earnings of $0.57 per share when it actually produced earnings of $0.58, delivering a surprise of 1.75%.Over the last four quart ...

Our investment activity for the three months ended September 30, 2024 and 2023 is presented below (information presented herein is at par value unless otherwise indicated). As of September 30, 2024 and December 31, 2023, our investments consisted of the following: The weighted average yields and interest rates of our performing debt investments at fair value as of September 30, 2024 and December 31, 2023 were as follows: 55 Results of Operations | --- | --- | --- | --- | --- | --- | --- | --- | --- | |----- ...

Sixth Street Specialty Lending (NYSE: TSLX ) positions itself as one of the safest business development companies regarding portfolio structure and regular dividend safety. As we will later review the numbers, that's not an unreasonable stance given its regular (base) dividend coverage, which ensures its resilience Welcome to Cash Flow Venue, where dividends do the heavy lifting! Blending my financial chops with the timeless wisdom of value investing (and love for steady income), I've built a rock-solid pil ...

S I X T H S T R E E T S P E C I A L T Y L E N D I N G Quarter Ended June 30, 2024 EARNINGS PRESENTATION DISCLAIMER AND FORWARD-LOOKING STATEMENT References in this presentation ("Presentation") to "TSLX," "we," "us," "our" and "the Company" refer to Sixth Street Specialty Lending, Inc. This Presentation includes forward-looking statements about TSLX that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estim ...

Sixth Street (TSLX) reported $121.82 million in revenue for the quarter ended June 2024, representing a yearover-year increase of 13.2%. EPS of $0.58 for the same period compares to $0.58 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $120.33 million, representing a surprise of +1.23%. The company delivered an EPS surprise of +1.75%, with the consensus EPS estimate being $0.57. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- a ...

Financial Performance - Sixth Street Specialty Lending, Inc. reported net investment income of $0.59 per share and net income of $0.51 per share for Q2 2024, reflecting annualized ROE of 13.9% and 11.9% respectively[1][2] - Adjusted net investment income and adjusted net income for Q2 2024 were $53.8 million ($0.58 per share) and $46.1 million ($0.50 per share), with annualized ROE of 13.5% and 11.6% respectively[2] - Total investment income for Q2 2024 was $121.8 million, up from $107.6 million in Q2 2023, primarily due to net funding activity and increased reference rates[18] - Net investment income for the three months ended June 30, 2024, was $55.1 million, compared to $48.8 million for the same period in 2023, reflecting a year-over-year increase of 12.8%[28] - Earnings per common share for the three months ended June 30, 2024, were $0.51, down from $0.63 in the same quarter of 2023[28] Dividends - The company declared a third quarter 2024 base dividend of $0.46 per share and a supplemental dividend of $0.06 per share[3][9] Investment Activity - New investment commitments for Q2 2024 amounted to $231.0 million, with $163.6 million funded across eight new portfolio companies[10][15] - New investment commitments for the quarter ended June 30, 2024, totaled $231.0 million, a decrease of 11.3% from $260.4 million in the same quarter of 2023[30] - The principal amount of investments funded during the quarter was $163.6 million, a decrease from $240.0 million in the same quarter of 2023[30] - The gross originations for the quarter were $1,858.8 million, compared to $1,522.9 million in the previous year, indicating a significant increase in investment activity[30] Assets and Liabilities - Total assets reached $3,387.0 million, an increase from $3,343.8 million, reflecting a growth of 1.30%[24] - Total liabilities decreased to $1,787.9 million from $1,847.4 million, a reduction of 3.22%[26] - As of June 30, 2024, the company had total principal debt outstanding of $1,785.0 million and a debt-to-equity ratio of 1.12x[16][20] Portfolio Composition - The company's portfolio consisted of 92.8% first-lien debt investments, with 99.6% of debt investments bearing interest at floating rates[11][12] - Total investments at fair value increased to $3,317.1 million as of June 30, 2024, compared to $3,283.1 million as of December 31, 2023, reflecting a growth of 1.04%[24] Expenses - Net expenses for Q2 2024 totaled $65.4 million, an increase from $57.9 million in Q2 2023, mainly due to rising reference rates affecting the weighted average interest rate on debt[18] - Total expenses for the three months ended June 30, 2024, were $65.7 million, an increase of 12.5% from $58.2 million in the same quarter of 2023[28] Net Asset Value - The reported net asset value (NAV) per share increased to $17.19 as of June 30, 2024, compared to $17.17 at March 31, 2024, driven by overearning of the base quarterly dividend[3][5] - Net asset value per share rose to $17.19 from $17.04, indicating an increase of 0.88%[26] Yield and Interest Rates - The weighted average total yield of debt and income-producing securities at fair value was 13.8% as of June 30, 2024[12][14] - Weighted average yield of debt and income-producing securities at fair value was 13.8%, down from 14.1%[24] - The weighted average interest rate of new investment commitments was 11.6%, down from 12.6% in the same quarter of 2023[30] Unrealized Gains and Losses - The company reported a net change in unrealized gains (losses) of $(9.5) million for the quarter, compared to a gain of $2.8 million in the same period of 2023[28]

Darrin Hughes/iStock via Getty Images Business development companies often invest in middle-market business debt. These are companies that are too small to make offerings on the bond markets but too large for a typical business loan. The typical loan that a BDC makes yields about prime plus 2 - 3%. On the liabilities side, BDCs use leverage to earn more, and the debt that BDCs incur is typically in the form of a bond, note, or baby bond. By law, BDCs are required to stay below a debt-to-equity ratio of 2. H ...

marchmeena29 My Rating History Sixth Street Lending's investment portfolio as of March 31, 2024 consisted primarily of First Lien investments that accounted for 92% of the business development company's portfolio, representing a 1 percentage point increase compared to the prior quarter. In terms of new investment fundings, 95% of new investments were once again made in First Liens, showing no deviation from second quarter origination levels. As a First Lien-centric BDC, I will compare Sixth Street Lending t ...

H97 ng are Buying stocks doesn't have to be a popularity contest. While not participating in the latest hot trends like NVIDIA (NVDA) or highly speculative GameStop (GME) won't make you the center of a party conversation, it's important to keep in mind that the turtle is the one that ends up winning the race over the hare. That's why I remain humble picking up undervalued names that don't necessarily scream as being 'hot stocks' of the moment. In the words of Jerry Rice: "Today I will do what others won't, ...

Financial Data and Key Metrics - Net asset value per share pro forma for the impact of the supplemental dividend was $17.11, with spillover income per share estimated at $1.06 [4] - Total commitments in Q1 were $264 million, with total fundings of $163 million across 9 new portfolio companies and upsizes to 5 existing investments [7] - Net funding activity was $54 million after $109 million of repayments [7] - Weighted average revenue and EBITDA of core portfolio companies were $275.5 million and $92.5 million, respectively [9] - Net asset value per share grew by 5.6% since the start of the rate hiking cycle, reaching $17.17 at quarter-end [10] - Total investment income for Q1 was $117.8 million, down 1.5% compared to $119.5 million in the prior quarter [12] - Adjusted net investment income per share was $0.58, with an annualized return on equity of 13.6% [95] - Total investments were $3.4 billion, up 3% from the prior quarter [101] Business Line Data and Key Metrics - 95% of total fundings in Q1 were in new investments, with 5% supporting upsizes to existing portfolio companies [7] - The weighted average rating of the portfolio improved to 1.15 from 1.16 last quarter [9] - 95% of fundings in Q1 were in first lien loans, bringing total first lien exposure to 92% across the portfolio [104] - New Q1 investments in Lane 1 had a weighted average yield at amortized cost of 11.3%, compared to 14.0% for Lane 2 assets [100] Market Data and Key Metrics - Fitch Ratings revised the company's outlook from stable to positive, with a BBB flat rating [5] - The company participated in several cross-platform deals, including the $4.4 billion acquisition of Alteryx [38] - The weighted average yield on debt and income-producing securities decreased slightly from 14.2% to 14.0% [106] Company Strategy and Industry Competition - The company emphasized its omnichannel sourcing capabilities and the value proposition of private credit [6] - The company is rotating out of the structured credit portfolio to crystallize returns and will opportunistically return to this theme [8] - The company highlighted its ability to access additional equity capital to generate attractive risk-adjusted returns [11] - The company amended its $1.7 billion secured credit facility, extending the final maturity on $1.5 billion of commitments through April 2029 [11] - The company is focused on maintaining a weighted average duration on liabilities that exceeds the weighted average life of assets funded by debt [42] - The company is selective in sector exposure, avoiding cyclical businesses and leaning into specific sector themes [90] Management Commentary on Operating Environment and Future Outlook - The company noted the increase in demand for financing solutions in public and private debt markets [32] - The company expects M&A activity to strengthen due to better financing costs and more parity between buyers and sellers [121] - The company remains optimistic about the ability of private credit portfolios to withstand macroeconomic headwinds [89] - The company anticipates the current environment will drive a dispersion between operating and GAAP earnings [88] - The company expects portfolio churn to increase with higher activity levels, driving additional economics [149] Other Important Information - The company declared a supplemental dividend of $0.06 per share and a base quarterly dividend of $0.46 per share [3][35] - The company added one new company to nonaccrual status, resulting in two portfolio companies on nonaccrual across the entire portfolio [107] - The company completed several capital markets transactions, including a bond offering, an equity raise, and a revolving credit facility extension [108] Q&A Session Summary Question: Trajectory of adjusted NII and impact of tighter spreads [46] - Adjusted NII stepped down $2.5 million sequentially, driven by a 5 basis point decline in base rates and tighter spreads [115] - The company remains comfortable with its guidance on adjusted NII for the year [47] Question: Competition and its impact on spreads and structure [157] - Competition has increased, primarily manifesting in compressed spreads, but the company remains selective to ensure it over-earns its cost of capital [33] - The weighted average number of covenants per credit agreement is 1.8%, consistent over time [157] Question: M&A activity and its impact on the portfolio [21] - The company expects M&A activity to strengthen, driven by better financing costs and more parity between buyers and sellers [121] - The company is seeing more opportunities in larger companies with bigger capital structures [126] Question: Portfolio churn and net portfolio growth [66] - The company expects portfolio churn to increase, driven by higher activity levels, but net portfolio growth may remain stable [67] - The company is focused on maintaining a stable balance sheet, with potential for slight growth [67] Question: Capital structure and liquidity [68] - The company has ample liquidity, with $764 million available after adjusting for unfunded commitments [139] - The company is not planning to issue additional bonds unless it can grow assets through an equity raise [82] Question: Opportunity set and complex investments [135] - The company is seeing opportunities in larger companies with complicated capital structures, such as Equinox [122] - The company expects more opportunities in good companies with bad balance sheets due to the higher-for-longer rate environment [151]