Sixth Street Specialty Lending, Inc. · NYSE:TSLX
Sixth Street Specialty Lending — Proxy Contest (April 2024)
16 slides from Sixth Street Specialty Lending's proxy contest presentation, Apr 12, 2024
Slide 1: Expanding Tools for Value Creation and Financial Flexibility
EXPANDING TOOLS FOR VALUE CREATION AND FINANCIAL FLEXIBILITY April 2024 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
Slide 2: Disclaimer and Forward-Looking Statements
DISCLAIMER AND FORWARD-LOOKING STATEMENTS G E N E R A L D I S CL A I M E R The information contained in this presentation (the ʺPresentationʺ) is preliminary, may not be complete and may be changed. By acceptance hereof, you agree that the information contained herein may not be used, reproduced or
Slide 3: Special Meeting of TSLX Stockholders
SPECIAL MEETING OF TSLX STOCKHOLDERS To Our Stockholders: We will be holding a Special Meeting of Stockholders of Sixth Street Specialty Lending, Inc. on May 23, 2024, at 10:00 AM, Eastern Time, at the offices of Simpson Thacher & Bartlett LLP located at 425 Lexington Avenue, 30th Floor, New York, N
Slide 4: Market Conditions May Create Attractive Investment Opportunities
MARKET CONDITIONS MAY CREATE ATTRACTIVE INVESTMENT OPPORTUNITIES • From time to time, there may be volatility in the CREDIT MARKET DISLOCATION (LATE 2015 – EARLY 2016) broader capital markets, disruption in liquidity in 1 2 Average BDC Peer P/NAV BAML HY Index (OAS) the debt capital markets, signifi
Slide 5: Common Stock Below NAV: Track Record of Strong Performance
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 1 Track Record of Strong Performance 2 2 NI RETURN ON EQUITY NII RETURN ON EQUITY TSLX BDC Peers (Mean) BDC Peers Top Quartile¹ TSLX BDC Peers (Mean) BDC Peers Top Quartile¹ LTM Since TSLX IPO LTM Since TSLX IPO TSLX > Top Quartile
Slide 6: Track Record of Strong Performance: Total Returns Since IPO
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 1 Track Record of Strong Performance TOTAL RETURNS (SINCE TSLX IPO) TSLX Total Returns Performance (Since IPO) Versus: High Yield: +228 percentage points $3.83 Leveraged Loans: +227 percentage points BDC Peers: +182 percentage point
Slide 7: Track Record of Strong Performance: Annual Net Income ROE
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 1 Track Record of Strong Performance 1 ANNUAL NET INCOME RETURN ON EQUITY (CALENDAR YEAR BASIS) 2 TSLX BDC Peers (Mean) 19.7% 16.2% 15.9% 15.4% 14.9% 14.5% 11.7% 11.6% 10.8% 9.0% 8.7% 8.2% 7.7% 7.6% 7.6% 6.9% 6.5% 5.4% 4.0% 2.9% 201
Slide 8: Disciplined Capital Allocation: Equity Raise Discipline
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 2 Disciplined Capital Allocation EQUITY RAISE DISCIPLINE 1 1.60x TSLX BDC Peers TSLX Average: 1.19x 1.40x 31% 1.20x Average Multiple 1.00x Premium to Peers 0.80x 0.60x BDC Peers Average: 0.91x 0.40x 0.20x Mar '14 Jan '15 Nov '15 Sep
Slide 9: Disciplined Capital Allocation: Follow-On Equity Raises
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 2 Disciplined Capital Allocation TSLX FOLLOW-ON EQUITY RAISES POST IPO FOLLOW-ON OFFERING SIZE AS % OF MARKET CAP TSLX March 2018 TSLX March 2016 TSLX February 2021 TSLX May 2023 TSLX February 2024 9% 7% 6% 6% 4% 1 BDC Peers (mean)
Slide 10: Potential ROE Accretive Opportunities
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 3 Potential ROE Accretive Opportunities Flexibility for the Company to sell its common stock below NAV is in the Company’s best interests and the best interests of its stockholders as it would provide: Access to the capital markets
Slide 11: Analysis Framework: Illustrative NAV Dilution
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 3 Potential ROE Accretive Opportunities ANALYSIS FRAMEWORK (2) Illustrative NAV Dilution (%) Issuance Amount (0.0) 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 2.5% (0.1%) (0.2%) (0.2%) (0.3%) (0.3%) (0.4%) 5.0% (0.2%) (0.3%) (0.5%) (0.6%) (0.
Slide 12: Analysis Framework: Illustrative Annual ROE Accretion
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 3 Potential ROE Accretive Opportunities ANALYSIS FRAMEWORK (2) Illustrative Annual ROE Accretion (%) All-in-Yield on New Investments 0.0 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 2.5% 2.0% 2.0% 4.0% 4.0% 6.0% 6.0% 5.0% 1.9% 1.9% 3.9% 3.9%
Slide 13: Analysis Framework: Illustrative Payback Period on Equity Raise
REASONS FOR TSLX TO HAVE FLEXIBILITY TO SELL COMMON STOCK BELOW NAV 3 Potential ROE Accretive Opportunities ANALYSIS FRAMEWORK (2) Illustrative Payback Period on Equity Raise (years) All-in-Yield on New Investments 3.9 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% 2.5% 0.8 0.8 0.4 0.4 0.2 0.2 5.0% 1.8 1.8 0.8
Slide 14: To Vote
TO VOTE The proxy statement is now available. You may use one of the following methods to provide your voting instructions: Online at www.proxyvote.com. Have your control number listed VOTE BY on the proxy card or voting instruction form ready and follow INTERNET the instructions VOTE BY Call 1-800-
Slide 15: Footnotes
FOOTNOTES Slide 4: 1. BDC Peers consist of 25 externally managed BDCs in the S&P BDC Index with total assets greater than $1.0 billion measured as of 6/30/2023 2. BofA Merrill Lynch Option-Adjusted Spreads are the calculated spreads between the BofA Merrill Lynch US High Yield Master II Index value
Slide 16: Contact Us
CONTACT US For Assistance Voting Your TSLX Shares: D.F. King Toll-free at (866) 207-2356 or Collect at (212) 269-5550 For other questions: TSLX Investor Relations (469) 621-2033 (212) 601-4739 IRTSLX@sixthstreet.com 16 16 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
Sixth Street Specialty Lending — Proxy Contest (April 2024) on 6ix