Sixth Street Specialty Lending, Inc. · NYSE:TSLX
Sixth Street Specialty Lending — Q3 2020 Earnings Presentation
19 slides from Sixth Street Specialty Lending's earnings presentation, Nov 5, 2020
Slide 1: Earnings Presentation, Quarter Ended September 30, 2020
S I X T H S TR EET S P ECI A LTY L E N DIN G EARNINGS PRESENTATION Quarter Ended September 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 $31.03 $29.83 $29.22 $28.64 $28.41 $28.17 $27.43 $26.61$26.83 $26.03 $25.49 $24.89 $24.44 $24.02 $23.48 $23.00 $14.16 $22.44 $12.39 $21.82 $13.75 $11.49 $11.92 $20.99 $11.09 $12.84 $20.55$20.72$20.64 $10.14 $10.58 $19.9
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: $36 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 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Net Investment Income Per Share $0.55 $0.51 $0.51 $0.59 $0.61 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 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 Investments at Fair Value $2,047,520 $2,245,928 $2,045,572 $1,983,844 $2,100,765 Number of Portfolio Companies 55
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 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 Assets Investments at Fair Value $2,047,520 $2,245,928 $2,045
Slide 8: Net Asset Value Bridge – Q3'20
NET ASSET VALUE BRIDGE – Q3’20 $16.87 ($0.10) $16.77 $0.46 ($0.41) ($0.02) $0.61 $16.21 $0.22 $16.08 ($0.07) 6/30/20 Q3'20 Q3'20 Q3'20 NAV Q3'20 Q3'20 Q3'20 9/30/20 Q3'20 Declared 9/30/2020 Pro NAV Reversal of Net Net Base Dividend Before Net Unreali zed Net Unreali zed Other Changes NAV Variable Fo
Slide 9: Net Asset Value Bridge – Year to Date
NET ASSET VALUE BRIDGE – YEAR TO DATE ($1.23) $16.87 $16.77 $1.70 $16.77 $0.11 $0.12 ($0.10) $16.51 ($0.50) $0.23 ($0.09) ($0.23) 12/31/19 Special 2020 YTD 2020 YTD 2020 YTD NAV 2020 YTD 2020 YTD 2020 YTD 2020 YTD 9/30/20 Q3'20 Declared 9/30/2020 Pro Pro Forma NAV* Dividend Reversal of Net Net Base
Slide 10: Operating Results Detail
OPERATING RESULTS DETAIL DOLLAR AMOUNTS IN THOUSANDS Except Per Share Data; Per Share Data is Based on Ending Shares Outstanding For Nine Months Ended Fo r Three Months Ended September 30, 2019 September 30, 2020 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 Investment Income: In
Slide 11: Portfolio Highlights – Funding Activity
PORTFOLIO HIGHLIGHTS – FUNDING ACTIVITY (Dollar amounts in millions) Q3’20 COMMITMENTS AND NET FUNDING • New investment commitments and fundings totaled $435.5 and $332.3, respectively. The fundings were distributed across 12 new portfolio companies and 4 upsizes to existing portfolio companies • Pa
Slide 12: 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 $309 $289 $80 $77 $332 $2,048 $2,246 $2,046 $1,984 $2,101 3% <1% 6%
Slide 13: Portfolio Highlights – Diversification Across Borrowers & Industries
PORTFOLIO HIGHLIGHTS – DIVERSIFICATION ACROSS BORROWERS & INDUSTRIES TOP 10 BORROWER DIVERSIFICATION INDUSTRY DIVERSIFICATION Centric Brands Nintex Business services Financial services Intapp PayLease Retail and consumer products Human resource support services Motus Frontline Healthcare Education I
Slide 14: 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 15: Liquidity Management
LIQUIDITY MANAGEMENT CASH AND CASH EQUIVALENTS Unrestricted Cash Totaled $3.8 Million as of September 30, 2020. Restricted Cash Related to Our Interest Rate Swaps Totaled $11.8 Million * Revolving Credit Facility Unsecured Notes $1.315 Billion; Uncommitted Accordion Feature Convertible Notes Unsecur
Slide 16: Funding Profile
FUNDING PROFILE Stable Funding Profile DEBT PORTFOL IO COMPOSITION DEBT FUN DIN G COMPOSITION Fixed Rate 1.1% (16) Floating Rate 100% Floating Rate* 98.9% PORTFOL IO FUN DIN G IN VESTMEN TS FUN DED REMAIN IN G DURATION OF DEBT PROFIL E ( 3 ) WITH DEBT 2024 Unsecured Notes (4-5 Years) 18% 3-4 Years D
Slide 17: Distribution Information Since IPO
DISTRIBUTION INFORMATION SINCE IPO Distribution Data(18) Date Declared Record Date Payment Date Amount Per Share Total Amount ($ Thousands) March 26, 2014 March 31, 2014 April 30, 2014 $0.38 $19,717 May 6, 2014 June 30, 2014 July 31, 2014 $0.38 $20,272 August 4, 2014 September 30, 2014 October 31, 2
Slide 18: Endnotes
ENDNOTES Note: Figures are as of 9/30/20 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 19: Contact Us: TSLX Investor Relations
CONTACT US: TSLX Investor Relations IRTSLX@sixthstreet.com (212) 601-4753 VISIT US: www.sixthstreetspecialtylending.com 19 S I X T H S TR EET S P ECI A LTY L E N DIN G
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