Exhibit 99.1

TPG Specialty Lending, Inc. Announces Quarter Ended September 30, 2017 Financial Results; Board Declares Quarterly Base Dividend of $0.39 Per Share for the Fourth Fiscal Quarter of 2017 and a Quarterly Variable Supplemental Dividend of $0.06 Per Share

NEW YORK—(BUSINESS WIRE)—November 7, 2017— TPG Specialty Lending, Inc. (NYSE: TSLX, or the “Company”) today reported net investment income of $30.9 million, or $0.51 per share, for the quarter ended September 30, 2017. Net asset value per share was $16.09 at September 30, 2017 as compared to $16.15 at June 30, 2017. The Company’s Board of Directors previously declared a second quarter variable supplemental dividend of $0.09 per share and a third quarter base dividend of $0.39 per share, payable to stockholders of record as of August 31, 2017 and September 15, 2017, respectively, that was paid on September 29, 2017 and October 13, 2017, respectively.

The Company announced that its Board of Directors has declared a fourth quarter base dividend of $0.39 per share for stockholders of record as of December 15, 2017, payable on January 12, 2018. The Company’s Board of Directors also declared a third quarter variable supplemental dividend of $0.06 per share for stockholders of record as of November 30, 2017, payable on December 29, 2017.

FINANCIAL HIGHLIGHTS:

(amounts in millions, except per share amounts)

  

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

September 30, 2017

 

 

 

June 30, 2017

 

 

 

 

September 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments at Fair Value

 

$

 

1,550.3

 

 

 

$

 

1,554.5

 

 

 

$

 

1,643.6

 

 

Total Assets

 

$

 

1,581.1

 

 

 

$

 

1,589.1

 

 

 

$

 

1,665.2

 

 

Net Asset Value Per Share

 

$

16.09

 

 

 

$

16.15

 

 

 

$

15.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income

 

$

52.3

 

 

 

$

58.8

 

 

 

$

 

53.9

 

 

Net Investment Income

 

$

30.9

 

 

 

$

33.9

 

 

 

$

30.6

 

 

Net Income

 

$

24.8

 

 

 

$

31.8

 

 

 

$

36.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income Per Share

 

$

0.51

 

 

 

$

0.57

 

 

 

$

0.51

 

 

Net Realized and Unrealized Gains (and Losses) Per Share

 

($

 

0.10

 

)

 

($

0.04

 

)

 

$

0.11

 

 

Net Income Per Share

 

$

0.41

 

 

 

$

0.53

 

 

 

$

0.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Yield of Debt and Income Producing Securities at Fair Value

 

 

10.7

 

%

 

 

10.7

 

%

 

 

10.3

 

%

Weighted Average Yield of Debt and Income Producing Securities at Amortized Cost

 

 

10.8

 

%

 

 

10.8

 

%

 

 

10.3

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of Debt Investment Commitments at Floating Rates (1)

 

 

 

100.0

 

%

 

 

 

100.0

 

%

 

 

 

97.9

 

%

 

(1)

Includes one or more fixed rate investments for which the Company entered into an interest rate swap agreement to swap to a floating rate.


Conference Call and Webcast

Conference Call Information:

The conference call will be broadcast live at 8:30 a.m. Eastern Time on November 8, 2017. Please visit TSLX’s webcast link located on the Events & Presentation page of the Investor Resources section of TSLX’s website http://www.tpgspecialtylending.com for a slide presentation that complements the Earnings Conference Call. Please visit the website to test your connection before the webcast.

Participants are also invited to access the conference call by dialing one of the following numbers:

Domestic: (877) 359-9508

International: +1 (253) 237-1122

Conference ID: 83689623

All callers will need to enter the Conference ID followed by the # sign and reference “TPG Specialty Lending” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.

Replay Information:

An archived replay will be available from approximately 12:00 p.m. Eastern Time on November 8 through November 15 via a webcast link located on the Investor Resources section of TSLX’s website, and via the dial-in numbers listed below:

Domestic: (855) 859-2056

International: +1 (404) 537-3406

Conference ID: 83689623

Portfolio and Investment Activity

For the three months ended September 30, 2017, gross originations totaled $501.2 million. This compares to $397.7 million for the three months ended June 30, 2017 and $318.1 million for the three months ended September 30, 2016.

For the three months ended September 30, 2017, the Company made new investment commitments of $359.0 million in seven new portfolio companies and five existing portfolio companies. For this period, the Company had $330.9 million aggregate principal amount in exits and repayments.

For the three months ended September 30, 2016, the Company made new investment commitments of $194.2 million in six new portfolio companies. For this period, the Company had $199.2 million aggregate principal amount in exits and repayments.

As of September 30, 2017 and June 30, 2017, the Company had investments in 44 and 46 portfolio companies, respectively, with an aggregate fair value of $1,550.3 million and $1,554.5 million, respectively.

As of September 30, 2017, the portfolio based on fair value consisted of 93.2% first-lien debt investments, 4.0% second-lien debt investments, and 2.8% equity and other investments. As of December 31, 2016, the portfolio based on fair value consisted of 96.5% first-lien debt investments, 1.2% second-lien debt investments, 0.6% mezzanine and unsecured debt investments, and 1.7% equity and other investments.

As of September 30, 2017, 100.0% of debt investments based on fair value in the portfolio bore interest at floating rates (when including investment specific hedges), with 92.4% of these subject to interest rate floors. The Company’s credit facilities also bear interest at floating rates. In connection with the Company’s Convertible Senior Notes, which bear interest at fixed rates, the Company entered into fixed-to-floating interest rate swaps in order to align the nature of the interest rates of its liabilities with its investment portfolio.

As of September 30, 2017 and June 30, 2017, the weighted average total yield of debt and income-producing securities at fair value (which includes interest income and amortization of fees and discounts) was 10.7% and 10.7%, respectively, and the weighted average total yield of debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 10.8% and 10.8%, respectively.

 

2


As of September 30, 2017, 100% of the portfolio at fair value was meeting all payment and covenant requirements.

Results of Operations for the Three Months Ended September 30, 2017 compared to the Three Months Ended September 30, 2016

Investment Income

For the three months ended September 30, 2017 and 2016, investment income totaled $52.3 million and $53.9 million, respectively. The decrease in investment income was primarily driven by a decrease in the average size of the investment portfolio and lower syndication and amendment fees, partially offset by higher prepayment fees and accelerated amortization of upfront fees from unscheduled paydowns.

Expenses

Net expenses totaled $20.7 million and $22.6 million for the three months ended September 30, 2017 and 2016, respectively. This decrease was primarily due to lower interest expense and a decrease in professional fees.

Liquidity and Capital Resources

As of September 30, 2017, the Company had $8.1 million in cash and cash equivalents, total principal value of debt outstanding of $578.9 million, and $626.1 million of undrawn capacity on its revolving credit facility, subject to borrowing base and other limitations. The Company’s weighted average interest rate on debt outstanding was 2.7% and 2.7% for the three months ended September 30, 2017 and September 30, 2016, respectively.

The Company is rated BBB- with stable outlook by both Fitch Ratings and Standard and Poor’s.

 

3


Financial Statements and Tables

TPG Specialty Lending, Inc.

Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments (amortized cost of $1,386,657

   and $1,567,673, respectively)

 

$

1,417,358

 

 

$

1,591,544

 

Controlled, affiliated investments (amortized cost of $158,460 and $100,014,

   respectively)

 

 

132,922

 

 

 

65,859

 

Total investments at fair value (amortized cost of $1,545,117 and $1,667,687,

   respectively)

 

 

1,550,280

 

 

 

1,657,403

 

Cash and cash equivalents (restricted cash of $2,647 and $1,088, respectively)

 

 

8,118

 

 

 

5,954

 

Interest receivable

 

 

7,918

 

 

 

9,678

 

Receivable for interest rate swaps

 

 

674

 

 

 

69

 

Prepaid expenses and other assets

 

 

14,076

 

 

 

2,428

 

Total Assets

 

$

1,581,066

 

 

$

1,675,532

 

Liabilities

 

 

 

 

 

 

 

 

Debt (net of deferred financing costs of $12,587 and $11,019, respectively)

 

$

564,558

 

 

$

680,709

 

Management fees payable to affiliate

 

 

5,995

 

 

 

6,269

 

Incentive fees payable to affiliate

 

 

6,561

 

 

 

5,889

 

Dividends payable

 

 

23,428

 

 

 

23,289

 

Other payables to affiliate

 

 

3,572

 

 

 

1,555

 

Other liabilities

 

 

10,209

 

 

 

5,609

 

Total Liabilities

 

 

614,323

 

 

 

723,320

 

Commitments and contingencies

 

 

 

 

 

 

 

 

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, 60,188,435 and

   59,805,285 shares issued, respectively; and 60,099,355 and 59,716,205 shares

   outstanding, respectively

 

 

602

 

 

 

598

 

Additional paid-in capital

 

 

905,725

 

 

 

898,868

 

Treasury stock at cost; 89,080 and 89,080 shares held, respectively

 

 

(1,359

)

 

 

(1,359

)

Undistributed net investment income

 

 

58,866

 

 

 

50,142

 

Net unrealized gains

 

 

7,116

 

 

 

1,422

 

Undistributed net realized gains (losses)

 

 

(4,207

)

 

 

2,541

 

Total Net Assets

 

 

966,743

 

 

 

952,212

 

Total Liabilities and Net Assets

 

$

1,581,066

 

 

$

1,675,532

 

Net Asset Value Per Share

 

$

16.09

 

 

$

15.95

 

 

4


TPG Specialty Lending, Inc.

Consolidated Statements of Operations

(Amounts in thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2017

 

 

September 30, 2016

 

 

September 30, 2017

 

 

September 30, 2016

 

 

Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income from non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments

 

$

45,354

 

 

$

44,088

 

 

$

148,023

 

 

$

124,931

 

 

Dividend income

 

 

 

 

474

 

 

 

 

 

1,421

 

 

Other income

 

 

3,502

 

 

 

6,767

 

 

 

7,982

 

 

 

8,909

 

 

Total investment income from non-controlled, non-affiliated investments

 

 

48,856

 

 

 

51,329

 

 

 

156,005

 

 

 

135,261

 

 

Investment income from controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments

 

 

3,398

 

 

 

2,537

 

 

 

5,914

 

 

 

7,288

 

 

Other income

 

 

51

 

 

 

51

 

 

 

153

 

 

 

152

 

 

Total investment income from controlled, affiliated investments

 

 

3,449

 

 

 

2,588

 

 

 

6,067

 

 

 

7,440

 

 

Total Investment Income

 

 

52,305

 

 

 

53,917

 

 

 

162,072

 

 

 

142,701

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

5,498

 

 

 

6,102

 

 

 

20,017

 

 

 

17,029

 

 

Management fees

 

 

5,995

 

 

 

6,212

 

 

 

18,043

 

 

 

17,953

 

 

Incentive fees

 

 

6,561

 

 

 

6,467

 

 

 

19,808

 

 

 

16,761

 

 

Professional fees

 

 

1,211

 

 

 

3,029

 

 

 

4,268

 

 

 

6,923

 

 

Directors’ fees

 

 

100

 

 

 

98

 

 

 

302

 

 

 

290

 

 

Other general and administrative

 

 

1,371

 

 

 

897

 

 

 

3,984

 

 

 

3,211

 

 

Total expenses

 

 

20,736

 

 

 

22,805

 

 

 

66,422

 

 

 

62,167

 

 

Management and incentive fees waived

 

 

 

 

 

(149

)

 

 

 

 

 

(346

)

 

Net Expenses

 

 

20,736

 

 

 

22,656

 

 

 

66,422

 

 

 

61,821

 

 

Net Investment Income Before Income Taxes

 

 

31,569

 

 

 

31,261

 

 

 

95,650

 

 

 

80,880

 

 

Income taxes, including excise taxes

 

 

640

 

 

 

690

 

 

 

2,270

 

 

 

1,615

 

 

Net Investment Income

 

 

30,929

 

 

 

30,571

 

 

 

93,380

 

 

 

79,265

 

 

Unrealized and Realized Gains (Losses)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(564

)

 

 

13,660

 

 

 

6,831

 

 

 

28,657

 

 

Controlled, affiliated investments

 

 

(4,680

)

 

 

(6,898

)

 

 

8,617

 

 

 

(7,048

)

 

Translation of other assets and liabilities in foreign currencies

 

 

(1,701

)

 

 

(1,367

)

 

 

(10,359

)

 

 

436

 

 

Interest rate swaps

 

 

(1,682

)

 

 

(462

)

 

 

605

 

 

 

1,103

 

 

Total net change in unrealized gains (losses)

 

 

(8,627

)

 

 

4,933

 

 

 

5,694

 

 

 

23,148

 

 

Realized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

2,413

 

 

 

1,516

 

 

 

7,008

 

 

 

1,920

 

 

Controlled, affiliated investments

 

 

 

 

 

 

 

 

(21,776

)

 

 

 

 

Foreign currency transactions

 

 

44

 

 

 

(145

)

 

 

557

 

 

 

(49

)

 

Total realized gains (losses)

 

 

2,457

 

 

 

1,371

 

 

 

(14,211

)

 

 

1,871

 

 

Total Unrealized and Realized Gains (Losses)

 

 

(6,170

)

 

 

6,304

 

 

 

(8,517

)

 

 

25,019

 

 

Increase in Net Assets Resulting from Operations

 

$

24,759

 

 

$

36,875

 

 

$

84,863

 

 

$

104,284

 

 

Earnings per common share—basic and diluted

 

$

0.41

 

 

$

0.62

 

 

$

1.42

 

 

$

1.79

 

 

Weighted average shares of common stock outstanding—basic and diluted

 

 

60,057,567

 

 

 

59,523,695

 

 

 

59,923,323

 

 

 

58,229,549

 

 

 

5


The Company’s investment activity for the three months ended September 30, 2017 and 2016 is presented below (information presented herein is at par value unless otherwise indicated).

 

 

 

Three Months Ended

 

($ in millions)

 

September 30, 2017

 

 

September 30, 2016

 

New investment commitments:

 

 

 

 

 

 

 

 

Gross originations

 

$

501.2

 

 

$

318.1

 

Less: Syndications/sell downs

 

 

142.2

 

 

 

123.9

 

Total new investment commitments

 

$

359.0

 

 

$

194.2

 

Principal amount of investments funded:

 

 

 

 

 

 

 

 

First-lien

 

$

325.4

 

 

$

190.4

 

Second-lien

 

 

 

 

 

 

Mezzanine and unsecured

 

 

 

 

 

Equity and other

 

 

3.5

 

 

 

 

Total

 

$

328.9

 

 

$

190.4

 

Principal amount of investments sold or repaid:

 

 

 

 

 

 

 

 

First-lien

 

$

330.1

 

 

$

174.9

 

Second-lien

 

 

 

 

 

7.8

 

Mezzanine and unsecured

 

 

 

 

 

16.3

 

Equity and other

 

 

0.8

 

 

 

0.2

 

Total

 

$

330.9

 

 

$

199.2

 

Number of new investment commitments in

   new portfolio companies

 

 

7

 

 

 

6

 

Average new investment commitment amount in

   new portfolio companies

 

$

40.9

 

 

$

32.4

 

Weighted average term for new investment

   commitments in new portfolio companies

   (in years)

 

 

5.0

 

 

 

5.3

 

Percentage of new debt investment commitments

   at floating rates

 

 

100.0

%

 

 

100.0

%

Percentage of new debt investment commitments

   at fixed rates

 

 

 

 

Weighted average interest rate of new

   investment commitments

 

 

9.2

%

 

 

9.7

%

Weighted average spread over LIBOR of new

   floating rate investment commitments

 

 

7.9

%

 

 

8.7

%

Weighted average interest rate on investments

   sold or paid down

 

 

9.2

%

 

 

8.0

%

 

 

6


About TPG Specialty Lending, Inc.

TSLX is a specialty finance company focused on lending to middle-market companies. The Company seeks to generate current income primarily in U.S.-domiciled middle-market companies through direct originations of senior secured loans and, to a lesser extent, originations of mezzanine and unsecured loans and investments in corporate bonds and equity securities. The Company has elected to be regulated as a business development company, or a BDC, under the Investment Company Act of 1940 and the rules and regulations promulgated thereunder. TSLX is externally managed by TSL Advisers, LLC, a Securities and Exchange Commission (“SEC”) registered investment adviser. TSLX leverages the deep investment, sector, and operating resources of TPG Sixth Street Partners, the dedicated special situations and credit platform of TPG, with over $19 billion of assets under management as of June 30, 2017 and the broader TPG platform, a global private investment firm with over $73 billion of assets under management as of June 30, 2017. For more information, visit the Company’s website at www.tpgspecialtylending.com.

Forward-Looking Statements

Statements included herein may constitute “forward-looking statements,” which relate to future events or the Company’s future performance or financial condition. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in the Company’s filings with the Securities and Exchange Commission. The Company assumes no obligation to update any such forward-looking statements. TSLX undertakes no duty to update any forward-looking statements made herein.

Source: TPG Specialty Lending, Inc.

Investors:

Lucy Lu

212-601-4753

IRTSL@tpg.com

Media:

Luke Barrett, 212-601-4752

lbarrett@tpg.com

Press:

Owen Blicksilver PR, Inc.

Jennifer Hurson, 845-507-0571

jennifer@blicksilverpr.com

 

7

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