Sixth Street Specialty Lending, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Sixth Street Specialty Lending, Inc. (TSLX) filed its Q1 2024 10-Q, detailing its investment portfolio and financial status.</b>

AI Summary

Sixth Street Specialty Lending, Inc. (TSLX) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. The company reported on its financial position as of March 31, 2024. Key investments include debt and equity in companies like ForeScout Technologies, Inc. and IntelePeer Holdings, Inc. The filing details various loan agreements with specific interest rates and maturity dates. An interest rate swap agreement is in place with a maturity date of November 1, 2024. The company's business address is 2100 McKinney Avenue, Suite 1500, Dallas, TX 75201.

Why It Matters

For investors and stakeholders tracking Sixth Street Specialty Lending, Inc., this filing contains several important signals. This filing provides a detailed look into TSLX's current investment holdings, including specific debt and equity instruments, which is crucial for investors assessing the company's asset quality and risk exposure. The disclosure of loan terms, interest rates (e.g., SOFR + 8.10% for ForeScout), and maturity dates offers transparency into the income-generating potential and credit risk associated with TSLX's debt investments.

Risk Assessment

Risk Level: medium — Sixth Street Specialty Lending, Inc. shows moderate risk based on this filing. The company's investment in debt instruments, such as the first-lien loan for ForeScout Technologies, Inc. with an interest rate of 13.41%, carries inherent credit risk and interest rate sensitivity.

Analyst Insight

Investors should review the detailed breakdown of TSLX's investment portfolio, particularly the terms and conditions of its debt and equity holdings, to understand the associated risks and potential returns.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed Period of Report)
• 2024-05-01 — Filing Date (Filed as of Date)
• 13.41% — Interest Rate (ForeScout Technologies, Inc. first-lien loan)
• SOFR + 8.10% — Reference Rate and Spread (ForeScout Technologies, Inc. first-lien loan)
• 11.84% — Interest Rate (Ares CLO Ltd, Series 2021-59A Structured Product)
• SOFR+6.51% — Reference Rate and Spread (Ares CLO Ltd, Series 2021-59A Structured Product)
• 12.46% — Interest Rate (PrimeRevenue, Inc. first-lien loan)
• SOFR + 7.10% — Reference Rate and Spread (PrimeRevenue, Inc. first-lien loan)

Key Players & Entities

• Sixth Street Specialty Lending, Inc. (company) — Filer name
• TSLX (company) — Ticker symbol
• 2024-03-31 (date) — Reporting period end date
• ForeScout Technologies, Inc. (company) — Investment in debt
• IntelePeer Holdings, Inc. (company) — Investment in equity
• SOFR + 8.10% (dollar_amount) — Interest rate for ForeScout loan
• 13.41% (dollar_amount) — Interest rate for ForeScout loan
• 2100 McKinney Avenue, Suite 1500, Dallas, TX 75201 (address) — Business address

FAQ

Risk Factors

• Credit Risk of Investments [high — financial]: The company is exposed to credit risk on its debt investments, which could result in realized losses if borrowers default.
• Interest Rate Risk [medium — financial]: Changes in interest rates can affect the fair value of the company's investments and its net investment income.
• Market Volatility [medium — market]: Adverse market conditions could impact the value of the company's equity and debt investments.

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share TSLX The New York Stock E

Filing Documents

• tslx-20240331.htm (10-Q) — 8182KB
• tslx-ex10_1.htm (EX-10.1) — 1575KB
• tslx-ex31_1.htm (EX-31.1) — 15KB
• tslx-ex31_2.htm (EX-31.2) — 15KB
• tslx-ex32.htm (EX-32) — 12KB
• 0000950170-24-051235.txt (&nbsp;) — 35565KB
• tslx-20240331.xsd (EX-101.SCH) — 1745KB
• tslx-20240331_htm.xml (XML) — 7723KB

Financial Statements

Financial Statements 4 Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023 4 Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (Unaudited) 5 Consolidated Schedules of Investments as of March 31, 2024 (Unaudited) and December 31, 2023 6 Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2024 and 2023 (Unaudited) 21 Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (Unaudited) 22

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 23 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 45 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 64 Item 4.

Controls and Procedures

Controls and Procedures 65 PART II. OTHER INFORMATION 66 Item 1.

Legal Proceedings

Legal Proceedings 66 Item 1A.

Risk Factors

Risk Factors 66 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 66 Item 3. Defaults Upon Senior Securities 66 Item 4. Mine Safety Disclosures 66 Item 5. Other Information 66 Item 6. Exhibits 67

SIGNATURES

SIGNATURES 68 2 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "would," "should," "targets," "projects," and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. In addition to factors previously identified elsewhere in the reports and other documents Sixth Street Specialty Lending, Inc. (the "Company", "we", "us" or "our") has filed with the Securities and Exchange Commission, or SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: an economic downturn, which could impair our portfolio companies' abilities to continue to operate, and could lead to the loss of some or all of our investments in those portfolio companies; such an economic downturn could disproportionately impact the companies in which we have invested and others that we intend to target for investment, potentially causing us to experience a decrease in investment opportunities and diminished demand for capital from these companies; such an economic downturn could also impact availability and pricing of our financing; an inability to access the capital markets could impair our ability to raise capital and our

FINANCI AL INFORMATION

PART I. FINANCI AL INFORMATION

Financi al Statements

Item 1. Financi al Statements Sixth Street Specialty Lending, Inc. Consolidated Ba lance Sheets (Amounts in thousands, except share and per share amounts) (Unaudited) March 31, December 31, 2024 2023 Assets Investments at fair value Non-controlled, non-affiliated investments (amortized cost of $ 3,279,013 and $ 3,172,853 , respectively) $ 3,319,997 $ 3,223,152 Controlled, affiliated investments (amortized cost of $ 80,639 and $ 78,159 , respectively) 60,012 59,913 Total investments at fair value (amortized cost of $ 3,359,652 and $ 3,251,012 , respectively) 3,380,009 3,283,065 Cash and cash equivalents (restricted cash of $ 29,100 and $ 23,979 , respectively) 35,890 25,196 Interest receivable 31,258 27,969 Prepaid expenses and other assets 4,865 7,578 Total Assets $ 3,452,022 $ 3,343,808 Liabilities Debt (net of deferred financing costs of $ 25,258 and $ 21,930 , respectively) $ 1,804,347 $ 1,780,307 Management fees payable to affiliate 12,199 11,962 Incentive fees on net investment income payable to affiliate 10,928 11,451 Incentive fees on net capital gains accrued to affiliate 9,601 10,446 Other payables to affiliate 2,701 2,802 Other liabilities 30,240 30,465 Total Liabilities 1,870,016 1,847,433 Commitments and contingencies (Note 8) Net Assets Preferred stock, $ 0.01 par value; 100,000,000 shares authorized; no shares issued and outstanding — — Common stock, $ 0.01 par value; 400,000,000 shares authorized, 92,785,806 and 88,493,749 shares issued, respectively; and 92,121,556 and 87,829,499 shares outstanding, respectively 928 885 Additional paid-in capital 1,492,511 1,405,173 Treasury stock at cost; 664,250 and 664,250 shares held, respectively ( 10,459 ) ( 10,459 ) Distributable earnings 99,026 100,776 Total Net Assets 1,582,006 1,496,375 Total Liabilities and Net Assets $ 3,452,022 $ 3,3

View Full Filing

View this 10-Q filing on SEC EDGAR