In This Article:
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Adjusted Net Investment Income (Q4 2024): $0.61 per share.
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Annualized Operating Return on Equity (Q4 2024): 14.2%.
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Adjusted Net Income (Q4 2024): $0.54 per share.
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Annualized Return on Equity (Q4 2024): 12.5%.
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Net Asset Value per Share (Dec 31, 2024): $17.16.
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Base Dividend Coverage (Q4 2024): Adjusted net investment income exceeded base quarterly dividend by $0.15 per share or 33%.
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Adjusted Net Investment Income (Full Year 2024): $2.33 per share.
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Operating Return on Equity (Full Year 2024): 13.8%.
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Adjusted Net Income (Full Year 2024): $1.97 per share.
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Return on Equity (Full Year 2024): 11.6%.
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Net Asset Value Increase (2024): 70 basis points from $17.04 to $17.16.
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Total Investments (Year-End 2024): $3.5 billion.
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Total Principal Debt Outstanding (Year-End 2024): $1.9 billion.
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Net Assets (Year-End 2024): $1.6 billion.
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Debt-to-Equity Ratio (Year-End 2024): 1.22x.
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Total Investment Income (Q4 2024): $123.7 million.
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Interest and Dividend Income (Q4 2024): $113.8 million.
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Other Fees (Q4 2024): $5.1 million.
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Other Income (Q4 2024): $4.8 million.
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Net Expenses (Q4 2024): $65.9 million.
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Weighted Average Interest Rate on Debt (Q4 2024): 7%.
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Base Quarterly Dividend Declared: $0.46 per share.
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Supplemental Dividend Declared: $0.07 per share.
Release Date: February 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sixth Street Specialty Lending Inc (NYSE:TSLX) reported strong fourth-quarter results with adjusted net investment income of $0.61 per share, representing an annualized operating return on equity of 14.2%.
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The company achieved a significant increase in activity-based fees, earning $0.15 per share in Q4, the highest in seven quarters.
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TSLX's net asset value per share increased from $17.12 as of September 30, 2024, to $17.16 as of December 31, 2024.
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The company maintained a well-covered base dividend, with adjusted net investment income exceeding the base quarterly dividend by $0.15 per share or 33%.
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TSLX demonstrated strong portfolio performance with a weighted average rating of 1.10, indicating improvement from the previous quarter.
Negative Points
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The company experienced credit deterioration in two portfolio companies, Astra Acquisition Corp and Lithium Technologies, which were added to nonaccrual status, impacting net investment income by $0.07 per share.
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New investment spreads tightened throughout the year, reducing net investment income by approximately $0.07 per share compared to forecasts.
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The weighted average yield on debt and income-producing securities decreased from 13.4% to 12.5% quarter-over-quarter.
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TSLX's debt-to-equity ratio increased slightly to 1.22x, indicating higher leverage compared to the previous quarter.
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The company faces a competitive direct lending market with historical tight spreads, potentially challenging future earnings.