Sixth Street Specialty Lending, Inc. (TSLX) Bundle
A Brief History of TSLX
Company Overview
Sixth Street Specialty Lending, Inc. (TSLX) is a publicly traded business development company that focuses on providing financing solutions to middle-market companies. As of September 30, 2024, TSLX has total net assets of approximately $1.6 billion.
Financial Performance
For the three months ended September 30, 2024, TSLX reported a net investment income of $54.9 million, compared to $49.9 million for the same period in 2023. The total investment income for Q3 2024 was $119.2 million, up from $114.4 million in Q3 2023.
Earnings Per Share
TSLX's earnings per common share for the three months ended September 30, 2024, were $0.44, compared to $0.74 for the same period in 2023.
Dividends
For the nine months ended September 30, 2024, TSLX declared total dividends of $1.58 per share, which included a base dividend of $0.46 and supplemental dividends during the period.
Stock Performance
As of September 30, 2024, TSLX had 93,317,621 shares outstanding, with a per-share market value of $20.53.
Debt and Capital Structure
TSLX's total debt as of September 30, 2024, reached $1.87 billion, including $347.5 million in 2024 Notes and $300 million in 2026 Notes. The company issued $81.5 million in cash proceeds from common stock offerings in March 2024.
Investment Portfolio
As of September 30, 2024, TSLX's investment portfolio was valued at approximately $3.44 billion, with a significant portion in first-lien debt investments amounting to $3.19 billion.
| Period | Net Investment Income ($ millions) | Total Investment Income ($ millions) | Earnings per Share ($) | Dividends Declared ($) |
|---|---|---|---|---|
| Q3 2024 | 54.9 | 119.2 | 0.44 | 1.58 |
| Q3 2023 | 49.9 | 114.4 | 0.74 | 1.57 |
Market Trends and Challenges
As of September 30, 2024, TSLX has experienced fluctuations in unrealized gains and losses, with a net decrease of $30.7 million in unrealized gains for the nine months ended. The company’s asset coverage ratio stood at 184.0%, indicating compliance with regulatory requirements.
Recent Developments
On March 5, 2024, TSLX completed a public offering of 4 million shares at $20.52 per share. Additionally, the company has implemented a stock repurchase program, authorizing up to $50 million in stock buybacks.
A Who Owns Sixth Street Specialty Lending, Inc. (TSLX)
Ownership Structure
As of 2024, Sixth Street Specialty Lending, Inc. (TSLX) has a diverse ownership structure comprising institutional investors, individual shareholders, and company insiders. The company has approximately 93,981,871 shares issued and 93,317,621 shares outstanding.
Major Shareholders
The following table summarizes the major shareholders of TSLX as of 2024:
| Shareholder Type | Shareholder Name | Ownership Percentage | Shares Held |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 10.5% | 9,849,000 |
| Institutional Investor | BlackRock, Inc. | 8.2% | 7,719,000 |
| Institutional Investor | State Street Corporation | 6.1% | 5,702,000 |
| Individual Investor | Sixth Street Partners, LLC | 5.3% | 4,975,000 |
| Insider | Kevin D. Kauffman (CEO) | 1.0% | 935,000 |
| Insider | David M. Moyer (CFO) | 0.5% | 465,000 |
Insider Ownership
Insider ownership plays a crucial role in aligning the interests of management with those of shareholders. As of 2024, insiders own approximately 1.5% of the total shares outstanding.
Institutional Ownership Trends
Institutional ownership has been on the rise, reflecting growing confidence in TSLX's business model and financial performance. The following table outlines institutional ownership changes over the past year:
| Quarter | Institutional Ownership Percentage | Change from Previous Quarter |
|---|---|---|
| Q1 2023 | 37.4% | N/A |
| Q2 2023 | 38.2% | +0.8% |
| Q3 2023 | 39.0% | +0.8% |
| Q4 2023 | 40.1% | +1.1% |
Market Capitalization
The market capitalization of TSLX as of early 2024 stands at approximately $1.6 billion, reflecting the company's strong position in the specialty lending sector.
Conclusion on Ownership Dynamics
Ownership dynamics at Sixth Street Specialty Lending, Inc. illustrate a balanced mix of institutional and insider ownership, contributing to a robust governance structure that supports the company's strategic objectives.
Sixth Street Specialty Lending, Inc. (TSLX) Mission Statement
Company Overview
Sixth Street Specialty Lending, Inc. (TSLX) operates as a specialty finance company that focuses on lending to middle-market companies. The company primarily seeks to generate current income through direct originations of senior secured loans, mezzanine and unsecured loans, and investments in corporate bonds and equity securities.
Investment Framework
The firm has originated approximately $40.4 billion in aggregate principal amount of investments since its inception in July 2011. As of September 30, 2024, it retained about $10.5 billion of these investments on its balance sheet prior to any exits and repayments.
Core Portfolio Characteristics
As of September 30, 2024, TSLX's core portfolio companies had the following financial metrics:
| Metric | Value |
|---|---|
| Weighted Average Annual Revenue | $327.1 million |
| Weighted Average Annual EBITDA | $110.6 million |
| Median Annual Revenue | $149.2 million |
| Median Annual EBITDA | $51.9 million |
| Average Investment Size | $29.9 million |
| Median Investment Size (Excluding Structured Credit) | $30.7 million |
Financial Performance
For the nine months ended September 30, 2024, TSLX reported the following key financial performance indicators:
| Metric | Value |
|---|---|
| Net Assets Resulting from Operations | $135.6 million |
| Earnings Per Common Share (Basic and Diluted) | $1.48 |
| Dividends Declared Per Share | $1.58 |
| Weighted Average Shares Outstanding | 91,602,160 |
| Net Investment Income | $162.4 million |
Debt and Capital Structure
As of September 30, 2024, TSLX's debt obligations consisted of the following:
| Debt Type | Aggregate Principal Amount | Outstanding Principal Amount | Carrying Value |
|---|---|---|---|
| Revolving Credit Facility | $1.7 billion | $609.98 million | $593.64 million |
| 2024 Notes | $347.5 million | $347.5 million | $346.09 million |
| 2026 Notes | $300 million | $300 million | $280.69 million |
| 2028 Notes | $300 million | $300 million | $301.96 million |
| 2029 Notes | $350 million | $350 million | $348.06 million |
| Total Debt | $2.9975 billion | $1.90748 billion | $1.87045 billion |
Dividends
TSLX has a structured approach to dividends, offering a quarterly base dividend and a variable supplemental dividend. The dividends declared during the nine months ended September 30, 2024, included:
| Date Declared | Dividend Type | Dividend Per Share | Payment Date |
|---|---|---|---|
| February 15, 2024 | Base | $0.46 | March 28, 2024 |
| February 15, 2024 | Supplemental | $0.08 | March 20, 2024 |
| May 1, 2024 | Base | $0.46 | June 28, 2024 |
| May 1, 2024 | Supplemental | $0.06 | June 20, 2024 |
| July 31, 2024 | Base | $0.46 | September 30, 2024 |
| July 31, 2024 | Supplemental | $0.06 | September 20, 2024 |
Compliance and Asset Coverage
As of September 30, 2024, TSLX maintained an asset coverage ratio of 184.0% and was in compliance with all covenants related to its Revolving Credit Facility. The company is required to maintain a minimum asset coverage ratio of 150% and stockholders' equity of at least $650 million plus 25% of net proceeds from equity sales after April 24, 2024.
How Sixth Street Specialty Lending, Inc. (TSLX) Works
Investment Strategy
Sixth Street Specialty Lending, Inc. (TSLX) focuses on lending to middle-market companies, which typically have annual EBITDA between $10 million and $250 million. As of September 30, 2024, TSLX has originated approximately $40.4 billion in aggregate principal amount of investments, retaining about $10.5 billion of these investments on its balance sheet. The company primarily invests in senior secured loans, with a smaller allocation to mezzanine and unsecured loans, corporate bonds, and equity securities.
Portfolio Overview
As of September 30, 2024, TSLX had investments in 115 portfolio companies with an aggregate fair value of $3,441.1 million. The average investment size was approximately $29.9 million. The core portfolio companies had a median annual revenue of $149.2 million and a median annual EBITDA of $51.9 million.
| Metric | Value |
|---|---|
| Total Investments (Fair Value) | $3,441.1 million |
| Number of Portfolio Companies | 115 |
| Average Investment Size | $29.9 million |
| Median Annual Revenue | $149.2 million |
| Median Annual EBITDA | $51.9 million |
Debt and Equity Financing
As of September 30, 2024, TSLX had a revolving credit facility with total commitments of $1.7 billion, which can be increased to $2.0 billion under certain conditions. The company had approximately $1.1 billion of availability under this facility. TSLX issued common stock in March 2024, raising $81.5 million from 4,000,000 shares at $20.52 per share.
Recent Financial Performance
For the nine months ended September 30, 2024, TSLX reported:
- Net investment income of $55.1 million
- Net realized gains on investments of $11.8 million
- Unrealized gains of $135.6 million
- Cash provided by financing activities of $19.3 million
| Financial Metric | Value |
|---|---|
| Net Investment Income | $55.1 million |
| Net Realized Gains | $11.8 million |
| Unrealized Gains | $135.6 million |
| Cash from Financing Activities | $19.3 million |
Debt Structure
As of September 30, 2024, TSLX had total debt investments of $3,270.1 million, which included:
- First-lien debt: $3,269.9 million
- Second-lien debt: $39.9 million
- Mezzanine debt: $36.3 million
- Equity and other investments: $133.4 million
| Debt Type | Amount |
|---|---|
| First-lien Debt | $3,269.9 million |
| Second-lien Debt | $39.9 million |
| Mezzanine Debt | $36.3 million |
| Equity and Other Investments | $133.4 million |
Cash Flow and Liquidity
As of September 30, 2024, TSLX had cash and cash equivalents of approximately $29.7 million, including $23.2 million of restricted cash. The company reported cash used in operating activities of $14.8 million during the nine months ended September 30, 2024.
Key Ratios and Metrics
For the period ended September 30, 2024, TSLX maintained an asset coverage ratio of no less than 1.5:1 and stockholders’ equity of at least $650 million, plus 25% of the net proceeds from equity sales after April 24, 2024.
| Key Metric | Value |
|---|---|
| Asset Coverage Ratio | 1.5:1 |
| Stockholders' Equity Minimum | $650 million + 25% of equity proceeds |
How Sixth Street Specialty Lending, Inc. (TSLX) Makes Money
Investment Strategy
Sixth Street Specialty Lending, Inc. focuses on lending to middle-market companies through various financial instruments. As of September 30, 2024, the company has originated approximately $40.4 billion in aggregate principal amount of investments.
Sources of Revenue
TSLX generates revenue primarily through:
- Direct originations of senior secured loans
- Mezzanine and unsecured loans
- Investments in corporate bonds and equity securities
Loan Portfolio Overview
As of September 30, 2024, TSLX's loan portfolio includes:
| Loan Type | Amount ($ Million) | Percentage of Total Investments |
|---|---|---|
| First-lien debt | 2,831.0 | 93.1% |
| Second-lien debt | 39.9 | 1.3% |
| Mezzanine debt | 36.3 | 1.2% |
| Equity and other investments | 133.4 | 4.4% |
Portfolio Performance Metrics
Key performance metrics of the portfolio as of September 30, 2024:
| Metric | Value |
|---|---|
| Weighted Average Revenue of Core Portfolio Companies ($ Million) | 327.1 |
| Weighted Average EBITDA of Core Portfolio Companies ($ Million) | 110.6 |
| Median Annual Revenue of Core Portfolio Companies ($ Million) | 149.2 |
| Median Annual EBITDA of Core Portfolio Companies ($ Million) | 51.9 |
Financial Results
For the nine months ended September 30, 2024, TSLX reported:
| Financial Metric | Value ($ Million) |
|---|---|
| Net Investment Income | 135.6 |
| Cash Used in Operating Activities | (14.8) |
| Proceeds from Issuance of Common Stock | 93.3 |
| Dividends Paid to Stockholders | (128.1) |
Capital Structure
As of September 30, 2024, TSLX's capital structure included:
| Capital Component | Amount ($ Million) |
|---|---|
| Revolving Credit Facility Available | 1,100.0 |
| Cash and Cash Equivalents | 29.7 |
| Restricted Cash | 23.2 |
Market Trends and Strategies
TSLX targets middle-market companies with annual EBITDA between $10 million and $250 million. As of September 30, 2024, the average investment size in each portfolio company was approximately $29.9 million.
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Resources:
- Sixth Street Specialty Lending, Inc. (TSLX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sixth Street Specialty Lending, Inc. (TSLX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sixth Street Specialty Lending, Inc. (TSLX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.