Q3 2024 Sixth Street Specialty Lending Inc Earnings Call Transcript
Key Points
- Sixth Street Specialty Lending Inc (TSLX) reported an adjusted net investment income per share of $0.57, exceeding the base quarterly dividend by $0.11 per share or 23%.
- The company maintained a strong portfolio composition with 93% of its Q3 fundings in first lien positions, demonstrating a disciplined capital allocation approach.
- The weighted average interest coverage on the core portfolio of companies improved quarter over quarter, indicating better cash flow profiles for borrowers.
- Sixth Street Specialty Lending Inc (TSLX) has significant liquidity with nearly $1.1 billion of unfunded revolver capacity, providing flexibility for future investments.
- The company declared a supplemental dividend of $0.05 per share related to Q3 earnings, reflecting strong financial performance and shareholder returns.
- Net asset value per share decreased from $17.19 as of June 30 to $17.12 as of September 30, indicating a slight decline in shareholder equity.
- The company experienced net unrealized losses primarily from the markdown of its investment in Lithium Technologies, reflecting challenges in certain portfolio investments.
- Nonaccruals represent 1.9% of the portfolio at fair value, with one new investment added to nonaccrual status in Q3, indicating some credit quality concerns.
- The weighted average yield on debt and income-producing securities at amortized costs decreased from 13.9% in the prior quarter to 13.4%, suggesting a decline in income generation potential.
- The debt-to-equity ratio increased from 1.12 times as of June 30 to 1.19 times as of September 30, indicating higher leverage and potential risk.
Good morning, and welcome to Sixth Street Specialty Lending, Inc.'s third quarter ended September 30, 2024, earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded on Wednesday, November 6, 2024.
I will now turn the call over to Ms. Cami VanHorn, Head of Investor Relations.
Thank you. Before we begin today's call, I would like to remind our listeners that remarks made during the call may contain forward-looking statements. Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance 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 Sixth Street Specialty Lending, Inc.'s filings with the Securities and Exchange Commission. The company assumes no
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