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• Adjusted Net Investment Income per Share: $0.57

• Adjusted Net Income per Share: $0.41

• Net Investment Income per Share: $0.59

• Net Income per Share: $0.44

• Annualized Return on Equity (Adjusted Net Investment Income): 13.2%

• Annualized Return on Equity (Adjusted Net Income): 9.6%

• Net Asset Value per Share: $17.12

• Base Quarterly Dividend: $0.46 per share

• Supplemental Dividend: $0.05 per share

• Total Investments: $3.4 billion

• Debt-to-Equity Ratio: 1.19 times

• Weighted Average Yield on Debt and Income-Producing Securities: 13.4%

• Weighted Average Interest Rate on Average Debt Outstanding: 7.7%

• Unfunded Revolver Capacity: Nearly $1.1 billion

• Nonaccruals: 1.9% of the portfolio at fair value

• Weighted Average Revenue for Core Portfolio Companies: $327 million

• Weighted Average EBITDA for Core Portfolio Companies: $111 million

• Warning! GuruFocus has detected 8 Warning Signs with TSLX.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sixth Street Specialty Lending Inc (NYSE:TSLX) reported an adjusted net investment income per share of $0.57, exceeding the base quarterly dividend by $0.11 per share or 23%.

• The company maintained a strong portfolio composition with 93% of its Q3 fundings in first lien positions, demonstrating a disciplined capital allocation approach.

• The weighted average interest coverage on the core portfolio of companies improved quarter over quarter, indicating better cash flow profiles for borrowers.

• Sixth Street Specialty Lending Inc (NYSE:TSLX) has significant liquidity with nearly $1.1 billion of unfunded revolver capacity, providing flexibility for future investments.

• The company declared a supplemental dividend of $0.05 per share related to Q3 earnings, reflecting strong financial performance and shareholder returns.

Negative Points

• Net asset value per share decreased from $17.19 as of June 30 to $17.12 as of September 30, indicating a slight decline in shareholder equity.

• The company experienced net unrealized losses primarily from the markdown of its investment in Lithium Technologies, reflecting challenges in certain portfolio investments.

• Nonaccruals represent 1.9% of the portfolio at fair value, with one new investment added to nonaccrual status in Q3, indicating some credit quality concerns.

• The weighted average yield on debt and income-producing securities at amortized costs decreased from 13.9% in the prior quarter to 13.4%, suggesting a decline in income generation potential.

• The debt-to-equity ratio increased from 1.12 times as of June 30 to 1.19 times as of September 30, indicating higher leverage and potential risk.