Tpg Specialty Lending Stock Earnings Reports

Sixth Street Specialty Lending (SLX) reported Q3 2025 adjusted net investment income (NII) of $0.53/share (annualized ROE 12.3%) and adjusted net income of $0.46/share (annualized ROE 10.8%). The Board declared a base quarterly dividend of $0.46/share (record Dec 15, payable Dec 31) and a supplemental dividend of $0.03/share (record Nov 28, payable Dec 19). NAV per share, after adjusting for the supplemental dividend, was $17.11. Leadership: Joshua Easterly announced he will step down from the CEO seat at year-end and Bo (Robert) Stanley was named Co-CEO immediately; Joshua will remain Chairman of SLX and Co-President/Co-CIO of the broader Sixth Street platform. Portfolio and origination: SLX deployed $352M in Q3 across thematic “off-the-run” deals and upsizes, with total commitments of $388M. Notable deal activity included serving as administrative agent/joint lead arranger on a $2.5B term loan for Walgreens in the Sycamore take-private and a thematic investment in Velocity Clinical Research. SLX also opportunistically invested $100M in BB-rated CLO liabilities (weighted average spread ~554 bps) while emphasizing this is not a permanent strategic shift. Yields and credit: Weighted average yield on debt/income-producing securities at amortized cost was 11.7% (down from 12.0% in Q2) due largely to lower base rates and higher-payoff activity. Repayments were elevated ($303M), driven mostly by refinancings at lower spreads. Portfolio credit metrics remain strong: weighted average rating of 1.12 (scale 1–5), two nonaccruals representing 0.6% of fair value, weighted average interest coverage 2.3x, conservative attachment/detach metrics. Capital and liquidity: Total investments of $3.4B, net assets ~$1.6B, average debt-to-equity 1.1x, ending D/E 1.15x. Significant liquidity with ~$1.1B unfunded revolver capacity and only one near-term debt maturity (Aug 2026). Capital allocation: Management stressed disciplined use of the ATM and equity issuance only when accretive; undistributed income estimated at ~$1.30/share. Guidance: Management reiterated the annual ROE target (11.5%–12.5%) and expects full-year adjusted NII to be at the top end of the previously stated range ($1.97–$2.14/share). Market view: Management characterized recent BDC share-price weakness as a market repricing driven by forward-looking concerns on yield sustainability and capital misallocation across the sector—not credit deterioration for SLX—and expects the repricing to constrain capital flows to lower-quality product types over time. Overall tone: continued emphasis on thematic sourcing, investor-first culture, disciplined underwriting, strong liquidity and conservative portfolio construction; leadership transition framed as orderly and long-planned.