Exhibit 99.1

 

third Quarter 2020 Earnings Results

 

Sixth Street Specialty Lending, Inc. Reports Third Quarter Net Investment Income Per Share of $0.61 and NAV Per Share of $16.87; Declares a Fourth Quarter Base Dividend Per Share of $0.41 and a Third Quarter Supplemental Dividend Per Share of $0.10

 

 

NEW YORK—November 4, 2020— Sixth Street Specialty Lending, Inc. (NYSE: TSLX, or the “Company”) today reported net investment income of $41.1 million, or $0.61 per share, and net income of $81.9 million, or $1.21 per share, for the third quarter ended September 30, 2020. These results correspond to an annualized return on equity (ROE) on net investment income and net income of 15.1% and 30.1%, respectively, and an annualized year-to-date ROE on net investment income and net income of 13.5% and 14.7%, respectively. The Company’s strong net investment income this quarter was

a function of both robust interest and fee income, as well as lower interest expense attributed to the 100% floating rate nature of the Company’s liability structure. The Company’s net income this quarter was supported by unrealized gains related to portfolio company-specific events, spread-related unrealized gains from the continued tightening of credit risk premiums during Q3, and realized gains from the sale of its AFS equity position at a price of $16.2 million, compared to a prior quarter fair value of $7.3 million.

Reported net asset value (NAV) per share was $16.87 at September 30, 2020 as compared to reported NAV per share of $16.08 at June 30, 2020. As mentioned, the drivers of this quarter’s NAV per share growth were the Company’s continued overearning of its base quarterly dividend, net realized and unrealized gains related to portfolio-company specific events, and unrealized gains from the impact of Q3 credit spread tightening on the valuation of the Company’s investments.

The Company announced that its Board of Directors has declared a fourth quarter 2020 base dividend of $0.41 per share to shareholders of record as of December 15, 2020, payable on January 15, 2021, and a third quarter supplemental dividend of $0.10 per share to shareholders of record as of November 30, 2020, payable on December 31, 2020. Adjusted for the impact of the supplemental dividend related to this quarter’s earnings, the Company’s Q3 pro forma NAV per share was $16.77.

As of September 30, 2020, 99.1% of the portfolio at fair value was meeting all payment and covenant requirements. The slight increase in this quarter’s non-accruals was driven by the addition of the Company’s 1st lien loan in MD America, partially offset by the removal of its Neiman Marcus prepetition term loan and the partial roll-up of its J.C. Penney prepetition 1st lien term loan into the DIP loan. On MD America, the Company received its regularly scheduled cash interest payment during the quarter but applied those proceeds to the amortized cost of the position given the Company’s view of an imminent reorganization of the company’s capital structure. Post quarter end, MD America made a voluntary paydown of $1.4 million and subsequently filed for protection under Chapter 11. In Q4, the Company expects to put $9 million of its loan, or ~70% of its remaining prepetition loan at 9/30/20 fair value, back on accrual status upon MD America’s emergence from Chapter 11. The Company’s remaining investment will be restructured into an equity position.

Net Investment Income

Q3 2020 ($MM):

$41.1

Q3 2020 (per share):

$0.61

 

Net Income

Q3 2020 ($MM):

$81.9

Q3 2020 (per share):

$1.21

 

NAV

Q3 2020 ($MM):

$1,141

Q3 2020 (per share):

$16.87

PF Q3 2020 (per share):

$16.77

 

Dividends (per share)

Q3 2020 (Base):

$0.41

LTM Q3’20 (Base):

$1.62

LTM Q3’20 (Supp/Special):

$0.66

LTM Q3’20 (Total):

$2.28

 

 

1


The following information was filed by Tpg Specialty Lending, Inc. (TSLX) on Wednesday, November 4, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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