Sixth Street Specialty Lending, Inc. · NYSE:TSLX
Sixth Street Specialty Lending — Q1 2024 Earnings Presentation
20 slides from Sixth Street Specialty Lending's earnings presentation, May 2, 2024
Slide 1: Sixth Street Specialty Lending Earnings Presentation
SIXTH STREET SPECIALTY LENDING EARNINGS PRESENTATION Quarter Ended March 31, 2024
Slide 2: Disclaimer and Forward-Looking Statement
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. Th
Slide 3: Overview
OVERVIEW Specialty Lending Company Focused on Providing Financing Solutions $40.32 $39.65 $39.05 $38.30 $37.65 $36.99 $36.42 $35.50 $35.66 $35.10 $34.46 $33.70 $32.85 $31.83 $31.03 $29.58 $29.22 20.90 $28.64 $28.17 $28.41 19.8320.36 $27.43 19.31 18.81 $26.61$26.83 17.8118.26 $26.03 16.0116.5316.98 $
Slide 4: Highlights
HIGHLIGHTS • Core focus on investing in middle-market loans to US based companies – Target EBITDA: $10 million to $250 million Broadly Distributed, – Portfolio weighted average EBITDA: $92.5 million1 Scaled Senior Floating • Target investment hold size of $30 million to $100 million Rate-focused Por
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS DOLLAR AMOUNTS IN THOUSANDS Except Per Share Data; Per Share Data is Based on Weighted Average Shares Outstanding During the Period, Except as Otherwise Noted Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Net Investment Income Per Share $0.53 $0.58 $0.57 $0.62 $0.59 Net Income (Loss)
Slide 6: Portfolio Highlights – Selected Metrics
PORTFOLIO HIGHLIGHTS – SELECTED METRICS DOLLAR AMOUNTS IN THOUSANDS March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 Investments at Fair Value $2,918,584 $3,088,987 $3,113,277 $3,283,065 $3,380,009 Number of Portfolio Companies 127 130 131 136 124 Average Investment S
Slide 7: Quarterly Statements of Financial Condition
QUARTERLY STATEMENTS OF FINANCIAL CONDITION DOLLAR AMOUNTS IN THOUSANDS Except Per Share Data; Per Share Data is Based on Ending Shares Outstanding March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 Assets Investments at Fair Value $2,918,584 $3,088,987 $3,113,277 $3,28
Slide 8: Net Asset Value Bridge – Q1'24
NET ASSET VALUE BRIDGE – Q1’24 $0.01 ($0.03) $0.58 ($0.46) $0.03 $17.17 $17.11 $17.04 $17.05 $16.96 $0.09 ($0.14) $0.14 ($0.06) ($0.08) 12/31/23 Q4'23 12/31/23 Q1'24 Q1'24 Q1'24 Q1'24 NAV Q1'24 Q1'24 Q1'24 Q1'24 3/31/24 Q1'24 3/31/24 NAV Supplemental Adjusted NAV1 Adjusted Net Reversal of Reversal o
Slide 9: Operating Results Detail
OPERATING RESULTS DETAIL DOLLAR AMOUNTS IN THOUSANDS Except Per Share Data; Per Share Data is Based on Weighted Average Shares Outstanding During the Period, Except as Otherwise Noted For Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 Investment I
Slide 10: Portfolio Highlights – Funding Activity
PORTFOLIO HIGHLIGHTS – FUNDING ACTIVITY Q1’24 Commitments and Net Funding • New investment commitments and fundings totaled $263.6 million and $162.8 million, respectively. The fundings were distributed across 9 new portfolio companies and 5 upsizes to existing portfolio companies • Paydowns and sal
Slide 11: Portfolio Highlights – Asset Mix
PORTFOLIO HIGHLIGHTS – ASSET MIX New Investment Fundings End of Period Investments $ Millions by Par Value $ Millions by Fair Value First Lien Second Lien Structured Credit First Lien Second Lien Structured Credit Mezzanine Equity & Other Mezzanine Equity & Other $139 $240 $152 $278 $163 $2,788 $2,9
Slide 12: Portfolio Highlights – Diversification Across Borrowers & Industries
PORTFOLIO HIGHLIGHTS – DIVERSIFICATION ACROSS BORROWERS & INDUSTRIES Top 10 Borrower Diversification Industry Diversification ReliaQuest, LLC IBM Watson (Merative LP) Business Services Internet Services TRP Assets LLC BCTO Ace Purchaser, Inc. Human Resource Support Services Financial Services PaySca
Slide 13: Portfolio Highlights – Net Interest Margin Analysis
PORTFOLIO HIGHLIGHTS – NET INTEREST MARGIN ANALYSIS Net Interest Margin Weighted Average Total Yield on Debt and Income Producing Securities at Amortized Cost 1 Weighted Average Interest Rate of Debt and Income Producing Securities at Fair Value Weighted Average Spread Over Reference Rate of All Flo
Slide 14: Liquidity Management
LIQUIDITY MANAGEMENT CASH AND CASH EQUIVALENTS Unrestricted Cash Totaled $6.8 Million as of March 31, 2024. Restricted Cash Related to Interest Rate Swaps Totaled $29.1 Million 1,2 Revolving Credit Facility Unsecured Notes $1.7 Billion Committed; Uncommitted Accordion Size: $348 Million $300 Million
Slide 15: Strong Liquidity and Funding Profile
STRONG LIQUIDITY AND FUNDING PROFILE CAPITAL & LIQUIDITY ROBUST BALANCE SHEET 2 LIQUIDITY VS. NEAR-TERM OBLIGATIONS 2 ($ in Millions) As of March 31, 2024 / $ Millions $6.8 $1,126 Near-term Obligations Cash $348 Total Undrawn Revolver $260 Liquidity: $ 1,120 $1,1263 Capacity1 $580 Secured Revolver 3
Slide 16: Distribution Information Since IPO
DISTRIBUTION INFORMATION SINCE IPO Date Declared Record Date Payment Date Amount Per Share March 26, 2014 March 31, 2014 April 30, 2014 $0.38 May 6, 2014 June 30, 2014 July 31, 2014 $0.38 August 4, 2014 September 30, 2014 October 31, 2014 $0.38 November 3, 2014 December 31, 2014 January 30, 2015 $0.
Slide 17: Distribution Information Since IPO (Continued)
DISTRIBUTION INFORMATION SINCE IPO (CONTINUED) Date Declared Record Date Payment Date Amount Per Share February 17, 2021 (Q4’20 Supplemental) February 26, 2021 March 31, 2021 $0.05 February 17, 2021 March 15, 2021 April 15, 2021 $0.41 February 17, 2021 (Special) March 25, 2021 April 8, 2021 $1.25 Ma
Slide 18: Footnotes
FOOTNOTES Slide 3: Overview 1. Reflects NAV per share adjusted for the supplemental dividend per share related to Q1 2024 earnings 2. Moody’s rating updated 9/18/2023; S&P rating affirmed on 3/12/2024; Fitch rating updated on 3/26/2024; KBRA affirmed 5/26/2023 Slide 4: Highlights 1. Represents our c
Slide 19: Footnotes
FOOTNOTES Slide 13: Portfolio Highlights – Net Interest Margin Analysis 1. Total yield on investments is calculated based on the interest rate and the accretion of OID, exclusive of investments on non-accrual status 2. Interest rate on debt outstanding includes the swap-adjusted interest expense rel
Slide 20: Contact Us
CONTACT US: TSLX Investor Relations IRTSLX@sixthstreet.com (469) 621-2033 VISIT US: www.sixthstreetspecialtylending.com 20 SIXTH STREET SPECIALTY LENDING
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