Exhibit 99.1

TPG Specialty Lending, Inc. Announces Quarter and Fiscal Year Ended December 31, 2017 Financial Results; Board Declares Quarterly Base Dividend of $0.39 Per Share for the First Fiscal Quarter of 2018 and a Quarterly Variable Supplemental Dividend of $0.03 Per Share

NEW YORK—(BUSINESS WIRE)—February 21, 2018— TPG Specialty Lending, Inc. (NYSE: TSLX, or the “Company”) today reported net investment income of $26.9 million, or $0.45 per share, for the quarter ended December 31, 2017. Net asset value per share was $16.09 at December 31, 2017 as compared to $16.09 at September 30, 2017. The Company’s Board of Directors previously declared a third quarter variable supplemental dividend of $0.06 per share and a fourth quarter base dividend of $0.39 per share, payable to stockholders of record as of November 30, 2017 and December 15, 2017, respectively, that was paid on December 29, 2017 and January 12, 2018, respectively.

The Company announced that its Board of Directors has declared a first quarter 2018 base dividend of $0.39 per share for stockholders of record as of March 15, 2018, payable on April 13, 2018. The Company’s Board of Directors also declared a fourth quarter variable supplemental dividend of $0.03 per share for stockholders of record as of February 28, 2018, payable on March 30, 2018.

The Company’s Board of Directors also approved an extension of its stock repurchase plan (“Company 10b5-1 Plan”) to acquire up to $50 million in the aggregate of TSLX’s common stock at prices just below TSLX’s net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Unless extended or terminated by its Board of Directors, the Company expects that the stock repurchase plan will be in effect through the earlier of August 31, 2018, or such time as the approved $50 million repurchase amount has been fully utilized, subject to certain conditions. Under the Company 10b5-1 Plan, no shares were repurchased during the fiscal year ended December 31, 2017.

In February 2018, the Company entered into an amendment to the Revolving Credit Facility. Under the terms of the amendment, aggregate commitments under the facility were increased to $990 million. With respect to $895 million in commitments, amounts drawn under the facility bear interest at a rate of LIBOR plus a margin of either 1.75% or 1.875% and the stated maturity date has been extended to February 2023. Under the terms of the Revolving Credit Facility, the Company may at any time determine to cancel the commitments that were not extended.


 

 

 

FINANCIAL HIGHLIGHTS:

(amounts in millions, except per share amounts)

  

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

 

 

September 30, 2017

 

 

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments at Fair Value

 

$

 

1,693.7

 

 

 

$

 

1,550.3

 

 

 

$

 

1,657.4

 

 

Total Assets

 

$

 

1,720.2

 

 

 

$

 

1,581.1

 

 

 

$

 

1,675.5

 

 

Net Asset Value Per Share

 

$

 

16.09

 

 

 

$

16.09

 

 

 

$

15.95

 

 

Variable Supplemental Dividend Per Share

 

$

 

0.03

 

 

 

$

 

0.06

 

 

 

$

 

0.00

 

 

Pro Forma Net Asset Value Per Share (1)

 

$

 

16.06

 

 

 

$

16.03

 

 

 

$

15.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income

 

$

48.8

 

 

 

$

52.3

 

 

 

$

 

49.7

 

 

Net Investment Income

 

$

26.9

 

 

 

$

30.9

 

 

 

$

28.1

 

 

Net Income

 

$

26.7

 

 

 

$

24.8

 

 

 

$

32.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income Per Share

 

$

0.45

 

 

 

$

0.51

 

 

 

$

0.47

 

 

Net Realized and Unrealized Gains (and Losses) Per Share

 

($

 

0.01

 

)

 

($

 

0.10

 

)

 

$

0.08

 

 

Net Income Per Share

 

$

0.44

 

 

 

$

0.41

 

 

 

$

0.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

10.7

 

%

 

 

10.7

 

%

 

 

10.4

 

%

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

 

 

10.8

 

%

 

 

10.8

 

%

 

 

10.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage of Debt Investment Commitments at Floating Rates (2)

 

 

 

100.0

 

%

 

 

 

100.0

 

%

 

 

 

98.4

 

%

 

(1)

 

(2)

Pro Forma Net Asset Value Per Share gives effect to the supplemental dividend declared related to earnings in the applicable period.

 

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

2


Conference Call and Webcast

Conference Call Information:

The conference call will be broadcast live at 8:30 a.m. Eastern Time on February 22, 2018. 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: 2777197

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 February 22 through February 28 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: 2777197

Portfolio and Investment Activity

 

For the three months ended December 31, 2017, gross originations totaled $1,066.7 million. This compares to $501.2 million for the three months ended September 30, 2017 and $79.2 million for the three months ended December 31, 2016.  For the twelve months ended December 31, 2017, gross originations totaled $2,251.5 million. This compares to gross originations of $761.5 million for the year ended December 31, 2016.

For the three months ended December 31, 2017, the Company made new investment commitments of $296.7 million in five new portfolio companies and two existing portfolio companies. For this period, the Company had $136.4 million aggregate principal amount in exits and repayments.

For the three months ended December 31, 2016, the Company made new investment commitments of $54.3 million in one new portfolio company and two existing portfolio companies. For this period, the Company had $56.8 million aggregate principal amount in exits and repayments.

 

For the year ended December 31, 2017, the Company made new investment commitments of $1,072.6 million in 22 new portfolio companies and 12 existing portfolio companies. For this period, the Company had $951.5 million aggregate principal amount in exits and repayments.

For the year ended December 31, 2016, the Company made new investment commitments of $562.7 million in 14 new portfolio companies and 9 existing portfolio companies. For this period, the Company had $416.5 million aggregate principal amount in exits and repayments.

As of December 31, 2017 and September 30, 2017, the Company had investments in 45 and 44 portfolio companies, respectively, with an aggregate fair value of $1,693.7 million and $1,550.3 million, respectively.

As of December 31, 2017, the portfolio based on fair value consisted of 93.4% first-lien debt investments, 3.6% second-lien debt investments, and 3.0% equity and other investments. 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, 2017, 100.0% of debt investments based on fair value in the portfolio bore interest at floating rates (when including investment specific hedges), with 93.3% 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 and 2023 Notes (issued in January 2018), 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 December 31, 2017 and September 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

3


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.

 

4


As of December 31, 2017, 100% of the portfolio at fair value was meeting all payment and covenant requirements.

Results of Operations for the Three Months Ended December 31, 2017 compared to the Three Months Ended December 31, 2016

Investment Income

For the three months ended December 31, 2017 and 2016, investment income totaled $48.8 million and $49.7 million, respectively. The decrease in investment income was primarily driven by lower syndication and amendment fees, partially offset by higher accelerated amortization of upfront fees and prepayment fees from unscheduled paydowns.

Expenses

Net expenses totaled $21.4 million and $21.0 million for the three months ended December 31, 2017 and 2016, respectively. This increase was primarily due to an increase in the average 1-month LIBOR rate, partially offset by a decrease in professional fees and other general and administrative expenses.

Liquidity and Capital Resources

As of December 31, 2017, the Company had $6.7 million in cash and cash equivalents, total principal value of debt outstanding of $716.8 million, and $488.2 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 3.4% and 2.8% for the three months ended December 31, 2017 and December 31, 2016, respectively.

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

 

5


Financial Statements and Tables

TPG Specialty Lending, Inc.

Consolidated Balance Sheets

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

 

 

 

 

December 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments (amortized cost of $1,523,844

   and $1,567,673, respectively)

 

$

1,557,803

 

 

$

1,591,544

 

Controlled, affiliated investments (amortized cost of $162,406 and $100,014,

   respectively)

 

 

135,920

 

 

 

65,859

 

Total investments at fair value (amortized cost of $1,686,250 and $1,667,687,

   respectively)

 

 

1,693,723

 

 

 

1,657,403

 

Cash and cash equivalents (restricted cash of $3,150 and $1,088, respectively)

 

 

6,665

 

 

 

5,954

 

Interest receivable

 

 

6,762

 

 

 

9,678

 

Receivable for interest rate swaps

 

 

 

 

 

69

 

Prepaid expenses and other assets

 

 

13,088

 

 

 

2,428

 

Total Assets

 

$

1,720,238

 

 

$

1,675,532

 

Liabilities

 

 

 

 

 

 

 

 

Debt (net of deferred financing costs of $11,770 and $11,019, respectively)

 

$

703,428

 

 

$

680,709

 

Management fees payable to affiliate

 

 

6,219

 

 

 

6,269

 

Incentive fees payable to affiliate

 

 

5,628

 

 

 

5,889

 

Dividends payable

 

 

23,488

 

 

 

23,289

 

Other payables to affiliate

 

 

1,901

 

 

 

1,555

 

Other liabilities

 

 

10,290

 

 

 

5,609

 

Total Liabilities

 

 

750,954

 

 

 

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, 60,336,281 and

   59,805,285 shares issued, respectively; and 60,247,201 and 59,716,205 shares

   outstanding, respectively

 

 

603

 

 

 

598

 

Additional paid-in capital

 

 

906,521

 

 

 

898,868

 

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

 

 

(1,359

)

 

 

(1,359

)

Undistributed net investment income

 

 

61,790

 

 

 

50,142

 

Net unrealized gains

 

 

6,718

 

 

 

1,422

 

Undistributed net realized gains (losses)

 

 

(4,989)

 

 

 

2,541

 

Total Net Assets

 

 

969,284

 

 

 

952,212

 

Total Liabilities and Net Assets

 

$

1,720,238

 

 

$

1,675,532

 

Net Asset Value Per Share

 

$

16.09

 

 

$

15.95

 

 

6


TPG Specialty Lending, Inc.

Consolidated Statements of Operations

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

 

 

 

 

Year Ended

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31, 2017

 

 

December 31, 2016

 

 

December 31, 2015

 

Income

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments

 

$

191,288

 

 

$

167,819

 

 

$

157,964

 

Dividend income

 

 

345

 

 

 

1,727

 

 

 

948

 

Other income

 

 

9,617

 

 

 

12,685

 

 

 

7,625

 

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

 

 

201,250

 

 

 

182,231

 

 

 

166,537

 

Investment income from controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments

 

 

9,443

 

 

 

9,975

 

 

 

6,638

 

Other income

 

 

204

 

 

 

204

 

 

 

240

 

Total investment income from controlled, affiliated investments

 

 

9,647

 

 

 

10,179

 

 

 

6,878

 

Total Investment Income

 

 

210,897

 

 

 

192,410

 

 

 

173,415

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

27,441

 

 

 

23,108

 

 

 

22,010

 

Management fees

 

 

24,287

 

 

 

24,253

 

 

 

21,276

 

Incentive fees

 

 

25,497

 

 

 

22,703

 

 

 

20,180

 

Professional fees

 

 

5,431

 

 

 

8,446

 

 

 

8,166

 

Directors’ fees

 

 

405

 

 

 

390

 

 

 

381

 

Other general and administrative

 

 

4,827

 

 

 

4,382

 

 

 

4,830

 

Total expenses

 

 

87,888

 

 

 

83,282

 

 

 

76,843

 

Management and incentive fees waived

 

 

(85

)

 

 

(430

)

 

 

(226

)

Net Expenses

 

 

87,803

 

 

 

82,852

 

 

 

76,617

 

Net Investment Income Before Income Taxes

 

 

123,094

 

 

 

109,558

 

 

 

96,798

 

Income taxes, including excise taxes

 

 

2,835

 

 

 

2,225

 

 

 

1,500

 

Net Investment Income

 

 

120,259

 

 

 

107,333

 

 

 

95,298

 

Unrealized and Realized Gains (Losses)

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

10,090

 

 

 

44,676

 

 

 

(17,008

)

Controlled, affiliated investments

 

 

7,668

 

 

 

(10,994

)

 

 

(17,217

)

Translation of other assets and liabilities in foreign currencies

 

 

(11,432

)

 

 

(3,547

)

 

 

6,275

 

Interest rate swaps

 

 

(1,031

)

 

 

(333

)

 

 

(618

)

Total net change in unrealized gains (losses)

 

 

5,295

 

 

 

29,802

 

 

 

(28,568

)

Realized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

7,481

 

 

 

(772

)

 

 

(5,042

)

Controlled, affiliated investments

 

 

(21,776

)

 

 

 

 

Interest rate swaps

 

 

 

 

 

 

1,851

 

Foreign currency transactions

 

 

350

 

 

 

644

 

 

 

29

 

Total realized losses

 

 

(13,945

)

 

 

(128

)

 

 

(3,162

)

Total Unrealized and Realized Gains (Losses)

 

 

(8,650

)

 

 

29,674

 

 

 

(31,730

)

Increase in Net Assets Resulting from Operations

 

$

111,609

 

 

$

137,007

 

 

$

63,568

 

Earnings per common share—basic and diluted

 

$

1.86

 

 

$

2.34

 

 

$

1.18

 

Weighted average shares of common stock outstanding—basic and diluted

 

 

59,995,387

 

 

 

58,591,380

 

 

 

54,006,322

 

 

7


The Company’s investment activity for the years ended December 31, 2017, 2016, and 2015 is presented below (information presented herein is at par value unless otherwise indicated).

 

 

 

For the Year Ended December 31,

 

($ in millions)

 

2017

 

 

2016

 

 

2015

 

New investment commitments:

 

 

 

 

 

 

 

 

 

 

 

 

Gross originations

 

$

2,251.5

 

 

$

761.5

 

 

$

964.2

 

Less: Syndications/sell downs

 

 

1,178.9

 

 

 

198.8

 

 

 

245.5

 

Total new investment commitments

 

$

1,072.6

 

 

$

562.7

 

 

$

718.7

 

Principal amount of investments funded:

 

 

 

 

 

 

 

 

 

 

 

 

First-lien

 

$

958.9

 

 

$

518.0

 

 

$

581.3

 

Second-lien

 

 

 

 

 

 

 

 

40.6

 

Mezzanine and unsecured

 

 

 

 

2.1

 

 

 

23.3

 

Equity and other

 

 

30.4

 

 

 

 

 

 

18.8

 

Total

 

$

989.3

 

 

$

520.1

 

 

$

664.0

 

Principal amount of investments sold or repaid:

 

 

 

 

 

 

 

 

 

 

 

 

First-lien

 

$

906.0

 

 

$

316.2

 

 

$

353.3

 

Second-lien

 

 

15.7

 

 

 

72.1

 

 

 

27.0

 

Mezzanine and unsecured

 

 

11.5

 

 

 

23.7

 

 

 

4.9

 

Equity and other

 

 

18.3

 

 

 

4.5

 

 

 

Total

 

$

951.5

 

 

$

416.5

 

 

$

385.2

 

Number of new investment commitments in

   new portfolio companies

 

 

22

 

 

 

14

 

 

 

20

 

Average new investment commitment amount in

   new portfolio companies

 

$

39.2

 

 

$

35.2

 

 

$

31.6

 

Weighted average term for new investment

   commitments in new portfolio companies

   (in years)

 

 

4.8

 

 

 

4.3

 

 

 

5.0

 

Percentage of new debt investment commitments

   at floating rates (1)

 

 

100.0

%

 

 

99.6

%

 

 

95.2

%

Percentage of new debt investment commitments

   at fixed rates

 

 

 

 

0.4

%

 

 

4.8

%

Weighted average interest rate of new

   investment commitments

 

 

9.5

%

 

 

9.1

%

 

 

8.9

%

Weighted average spread over LIBOR of new

   floating rate investment commitments

 

 

8.3

%

 

 

8.3

%

 

 

8.3

%

Weighted average interest rate on investments

   sold or paid down

 

 

9.5

%

 

 

8.6

%

 

 

10.0

%

 

 

(1)

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

8


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 approximately $20 billion of assets under management as of September 30, 2017 and the broader TPG platform, a global private investment firm with over $79 billion of assets under management as of September 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

 

9

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Download Annual and Quarterly Reports as PDF, Word and Excel Documents
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Intrinsic Value Calculator


Intrinsic Value Calculator
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Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
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Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

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