Sixth Street Specialty Lending, Inc. · NYSE:TSLX
Sixth Street Specialty Lending — Q2 2020 Earnings Presentation
18 slides from Sixth Street Specialty Lending's earnings presentation, Aug 5, 2020
Slide 1: Earnings Presentation, Quarter Ended June 30, 2020
S I X T H S TR EET S P ECI A LTY L E N DIN G EARNINGS PRESENTATION Quarter Ended June 30, 2020
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 Finance Company Focused on Lending to Middle-market Companies $30.24 $29.61 $29.03 $28.82 $28.56 $27.82 $27.00$27.22 $26.42 $25.88 $25.28 $24.83 $24.41 $23.87 $23.39 $22.83 $22.21 $12.78 $14.16 $21.38 $11.88 $12.31 $13.25 $20.94$21.11$21.03 $10.53 $10.97 $11.48 $20.31 $9.61 $10.06
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: $35 million (1) Scaled Senior Floating • Target investment hold size of $30 million to $100 million Rate-focused Po
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 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Net Investment Income Per Share $0.47 $0.55 $0.51 $0.51 $0.59 Net Realized and U
Slide 6: Portfolio Highlights – Selected Metrics
PORTFOLIO HIGHLIGHTS – SELECTED METRICS DOLLAR AMOUNTS IN THOUSANDS As of and For Three Months Ended June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Investments at Fair Value $2,060,533 $2,047,520 $2,245,928 $2,045,572 $1,983,844 Number of Portfolio Companies 56 55 63
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 As of June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Assets Investments at Fair Value $2,060,533 $2,047,520 $2,245,928
Slide 8: Net Asset Value Bridge – Q2'20
NET ASSET VALUE BRIDGE – Q2’20 $16.08 $0.01 $0.25 $15.57 $15.10 $0.72 ($0.50) $15.07 $0.59 ($0.41) ($0.15)) 3/31/20 Q1'20 3/31/20 Q2'20 Q2'20 Q2'20 NAV Q2'20 Q2'20 Q2'20 6/30/20 NAV Special Pro Forma Reversal of Net Net Base Dividend Before Net Unreali zed Net Unreali zed Other Changes NAV Dividends
Slide 9: Operating Results Detail
OPERATING RESULTS DETAIL DOLLAR AMOUNTS IN THOUSANDS Except Per Share Data; Per Share Data is Based on Ending Shares Outstanding For Sixth Months Ended Fo r Three Months Ended June 30, 2019 June 30, 2020 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Investment Income: Interest Fr
Slide 10: Portfolio Highlights – Funding Activity
PORTFOLIO HIGHLIGHTS – FUNDING ACTIVITY (Dollar amounts in millions) Q2’20 COMMITMENTS AND NET FUNDING • Gross originations were $441.4 for the quarter • New investment commitments and fundings totaled $89.2 and $76.5, respectively. The fundings were distributed across 6 new portfolio companies and
Slide 11: Portfolio Highlights – Asset Mix
PORTFOLIO HIGHLIGHTS – ASSET MIX NEW INVESTMENT FUNDINGS END OF PERIOD INVESTMENTS At Par Value | $ Millions At Fair Value | $ Millions First Lien Second Lien Mezzanine Equity & Other First Lien Second Lien Mezzanine Equity & Other $344 $309 $289 $80 $77 $2,061 $2,048 $2,246 $2,046 $1,984 <1% 3% <1%
Slide 12: Portfolio Highlights – Diversification Across Borrowers & Industries
PORTFOLIO HIGHLIGHTS – DIVERSIFICATION ACROSS BORROWERS & INDUSTRIES TOP 10 BORROWER DIVERSIFICATION INDUSTRY DIVERSIFICATION Neiman Marcus Nintex Business services Financial services Intapp PayLease Healthcare Retail and consumer products Frontline Illuminate Human resource support services Educati
Slide 13: Portfolio Highlights – Net Interest Margin Analysis
PORTFOLIO HIGHLIGHTS – NET INTEREST MARGIN ANALYSIS Weighted Average Total Yield on Debt and Income Producing Securities at Amortized Cost (6) Weighted Average Interest Rate of Debt and Income Producing Securities at Fair Value Weighted Average Spread Over LIBOR of All Floating Rate Investments at F
Slide 14: Liquidity Management
LIQUIDITY MANAGEMENT CASH AND CASH EQUIVALENTS Unrestricted Cash Totaled $3.1 Million as of June 30, 2020. Restricted Cash Related to Our Interest Rate Swaps Totaled $12.8 Million * Revolving Credit Facility Unsecured Notes $1.315 Billion; Uncommitted Accordion Feature Convertible Notes Unsecured No
Slide 15: Funding Profile
FUNDING PROFILE Stable Funding Profile DEBT PORTFOL IO COMPOSITION DEBT FUN DIN G COMPOSITION Fixed Rate 1.2% Floating Rate (16) 100% Floating Rate* 98.8% PORTFOL IO FUN DIN G IN VESTMEN TS FUN DED REMAIN IN G DURATION OF DEBT PROFIL E ( 3 ) WITH DEBT 2024 Unsecured Notes (4-5 Years) 18% Debt <2 yea
Slide 16: Distribution Information
DISTRIBUTION INFORMATION Distribution Data (18) Date Declared Record Date Payment Date Amount Per Share Total Amount ($ Thousands) December 31, 2011 December 31, 2011 January 30, 2012 $0.06 $649 March 20, 2012 March 31, 2012 May 7, 2012 $0.16 $3,100 May 9, 2012 June 30, 2012 August 3, 2012 $0.32 $7,
Slide 17: Endnotes
ENDNOTES Note: Figures are as of 6/30/20 quarter end unless otherwise noted (1) Represents our core portfolio, which excludes certain investments that fall outside of our typical borrower profile. EBITDA is defined as earnings before interest, tax, depreciation and amortization. This calculation may
Slide 18: Contact Us: TSLX Investor Relations
CONTACT US: TSLX Investor Relations IRTSL@tssp.com (212) 601-4753 VISIT US: www.sixthstreetspecialtylending.com 18 S I X T H S TR EET S P ECI A LTY L E N DIN G
Sixth Street Specialty Lending — Q2 2020 Earnings Presentation on 6ix