Sixth Street Specialty Lending(TSLX) - 2024 Q2 - Quarterly Results

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]