On November 2, 2023, Sixth Street Specialty Lending Inc (TSLX, Financial) released its Q3 2023 earnings report. The company reported net investment income of $0.57 per share and net income of $0.74 per share for the quarter ended September 30, 2023. These results correspond to an annualized return on equity (ROE) on net investment income and net income of 13.7% and 17.8%, respectively.
Financial Performance
The company's adjusted net investment income and adjusted net income for Q3 2023 were $52.3 million, or $0.60 per share, and $67.4 million, or $0.77 per share, respectively. These results correspond to an annualized ROE on adjusted net investment income and adjusted net income of 14.4% and 18.5%, respectively. The reported net asset value (NAV) per share was $16.97 at September 30, 2023, compared to NAV per share of $16.74 or an adjusted NAV per share of $16.68 at June 30, 2023.
Dividends and Investment Activity
The company's Board of Directors declared a Q4 2023 base dividend of $0.46 per share and a Q3 2023 supplemental dividend of $0.07 per share. For Q3 2023, new investment commitments totaled $205.8 million, compared to $260.4 million for the quarter ended June 30, 2023. The principal amount of new investments funded was $151.6 million across 8 new portfolio companies and 2 upsizes to existing portfolio companies.
Debt and Capital Resources
As of September 30, 2023, the company had $29.9 million in cash and cash equivalents, total principal value of debt outstanding of $1,705.7 million, and $951.8 million of undrawn capacity on its revolving credit facility. The company's debt to equity ratio was 1.15x, compared to 1.16x at June 30, 2023.
Liquidity and Funding Profile
The company's total liquidity (pre-unfunded commitments) was $955 million, and total liquidity (burdened for unfunded commitments) was $758 million. As of September 30, 2023, the company's funding mix was comprised of approximately 56% unsecured and 44% secured debt.
Outlook
Sixth Street Specialty Lending Inc (TSLX, Financial) continues to focus on lending to middle-market companies, seeking to generate current income primarily through direct originations of senior secured loans and, to a lesser extent, originations of mezzanine loans and investments in corporate bonds and equity securities.
Explore the complete 8-K earnings release (here) from Sixth Street Specialty Lending Inc for further details.
