TSLX - Earnings call transcript Q3 2024 | Sixth Street Specialty Lending, Inc.

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Operator

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 may be recorded on Wednesday, November 6, 2024. I will now turn the call over to Ms. Cami VanHorn, Head of Investor Relations.

Cami VanHorn

Thank you.

call, made like contain during today's listeners remind forward-looking begin remarks that the we I to would our statements. Before call may this and statements than may results of and other statements number historical or made Statements of a risks of future performance constitute are and during forward-looking involve not uncertainties. guarantees facts call Street including statements Specialty Commission. time of a result Actual differ from materially a with to filings results Inc.'s time those of Lending, as those factors, the may in Exchange from Sixth in the forward-looking and described number Securities company any The assumes forward-looking no update obligation such to statements.

the website, ended Inc.'s our earnings September www.sixthstreetspecialtylending.com. figures Street be on reviewed all The section. XX, after SEC. Resources with presentation performance Sixth ended our press quarter and closed, XXXX, with and Investor third as a presentation September today's Form posted for should the the under XXXX. Yesterday, yesterday of we conjunction XX-Q Specialty Unless filed the XX, to in website market available third the release our Resources quarter release mentioned our remarks prepared of issued Investor Lending, is the are for section also otherwise, in noted earnings

purposes. this being reminder, call As a recorded for is replay

call Executive to Specialty Chief I Street will now turn the of Officer over Sixth Joshua Easterly, Lending, Inc.

Joshua Easterly

With our joining Thank partner President, and and you, everyone, Cami. Stanley; us Simmonds. Ian CFO, is my us. morning, you for thank our Bo Good and

quarterly in opening to For and and Bo discuss portfolio. with to the today, conclude review Ian the our will to before financial over Q&A. remarks detail, results pass activity it call results I call will quarter's our of highlights I final provide in this will

quarter income return an to we return net on X.X%. XX.X% of market reported of equity with to share net per equity $X.XX, per on financial the an adjusted After and annualized annualized of $X.XX, share corresponding corresponding yesterday, results closed of income adjusted investment third

capital QX our and net respectively. net inclusive were unwind statements, per share, financial the our in incentive of income accrued and $X.XX investment presented As gains income expense, noncash the $X.XX, of

investment Our higher from quarter fees. combined interest increase activity-based to the impact net reflect with income a rate in the this small environment, continued

exceeded of per by cycle. dividend income share we've per $X.XX $X.XX or $X.XX investment quarterly activity, up average per the statistically share the related share per tightening net from that our of XX%. base of start Adjusted share $X.XX which is experienced since the to was

in of interest our the Since curve, curve as following our shape higher last now on Based near bottoms that terminal out a has rate. at term, terminal the rate through call, September cut rate the remains level latest forward well in supported in the and the earnings declined dividend XXXX. rate base slightly

through-the-cycle -- our earnings As on policy inclusive a and and based fee credit is dividend the on losses reminder, power, asset activity-based of the our income.

we earnings income of investment the marked fair per Consistent markdown our $X.XX taking net The -- skewed net name policy, mark the between this believe We since of value Rounding lower a outcomes. income account losses, the share as difference quarter market out in the summary. of to due view. and our distribution outcomes have X/XX to fair in of reflects range last has with our and quarter's net unrealized from our Technologies. was Lithium valuation primarily this investment updated

continued nonaccrual cash QX. the this of the added also beginning name, to we've of at Given underperformance

assumed to XX% or equity on valuation basis $XX of quarterly on on million losses illustrate lost million the number is represents return As implies roughly X.Xx. of fair a recognized impact cost of value. income book we Lithium equity for basis on the earnings, X% total date. our Bloomberg position Technology An of we on X% per economic than and on on on $X.XX impact, were unrealized net earning To equity XX% assume XX less we our of approximately than on of the share the return This equity return points value portfolio less $XX from ROE. the based of annual

basis of data basis XXX LCD, below as a spread our the our the disciplined capital published of of unit and of and as on of This drastically losses. BDC put incorporated earn as as are believe that in portion base portfolio count weighted will excess percentage losses part average our of by cost This was tighter compares points work XX% our X% more the investment our to XXXX. portfolios view Credit way to less assumption reached According be We count QX To we X/XX, despite on equity, allocation underscores our of portfolio by inclusive our capital for which data. to decisions clear, X% potential lower than a meaningful persists. model. deals spread analyze sub-XXX case to in the economic of the our requires environment portfolio discipline based of of approach. the we to continue in

$XX.XX are will June investors. We best-in-class returns share share our continue confident that At to for as per $XX.XX, value quarter of compared $X.XX asset end, selection our down per drive was XX. to net asset

through grown months, will detail. walk in from NAV net $XX.X origin per XX has last more the to Over $XX.X. asset Ian reported share

XX, approved shareholders Board December XX. base to record quarterly December of our of dividend of $X.XX a payable share as on Yesterday, per

to declared also of related payable Our dividend as XX, our share record earnings supplemental $X.XX QX December of November shareholders to per a Board on XX.

supplemental the share impact per value for asset net XXXX the of $XX.XX. QX dividend is Our adjusted

over discuss pass this activity. to to that, it Bo investment quarter's With I'll

Robert Stanley

the sharing economic broader to deal backdrop like by start on thoughts by I'd observations current followed on Josh. the environment. some Thanks,

after the forward expect out improve across as of rate should play corporate this portfolio in to period As shape policy. own the coverage on levels weighted rates and economic We've interest portfolio credit, of average cost borrowers of On quarter-over-quarter. from the benefit companies our profile credit core flow continue growth to improved started a interest the the generally on decline to based slower see of of our the rates. and we prolonged curve, lower cash corporate capital activity interest higher shift

In terms anticipate environment, levels, will started a that we active level as rates BSL the see in already support we M&A QX to in LBOs to of which highest X.X unlocking more years. reached activity volumes finance

generally era to to will XXXX. prices the see it's flow we interest significant encouraging paid below today's more money the purchase in remain increase rate deal the While prior this time believe a activity, take valuations free as low in in

activity. our now investment Turning to

of quarter, entire our investments existing new During our with across of positions companies. the $XXX commitments asset portfolio capital and to third first X portfolio. were the of long-term upsizes at approach X fundings we mix in contributing structure, investing closed across our QX lien of lien top million to XX% the XXX% the on Consistent first of

X industry across for X new industries. end user were exposures, investments our different As diversified

top our and industry remains Cyclical our base exposure, X.X% retail limited software loan services. excluding of Our exposure continues and to portfolio. at asset be business

relationships coincide During focusing QX, capital. capabilities to we This our expertise platform and our investment deep continued differentiate themes to leveraging sector Street underwriting lean in includes to our unique source platform's opportunities. with that Sixth across on on our the

is senior were expertise where a development attractive company $XXX Arrowhead during Street's the alongside of care range secured The sector Pharmaceuticals, the facility scale, platform and which clinical-stage drugs Street for conditions. combination team the one focused and a SLX worked to for funded long-term sourcing provide Sixth Sixth development. with opportunity quarter, active to wide credit our closed on We investment we themes of to of company this contributed highlight shareholders. and biotech the of million capital and of health To sector a the for fund execution R&D flexibility

to store to collateral restructuring portfolio Belk, retail asset followers The in that sheet part transaction retailer the profile our is our above-market our investment a during theme financial a allowing Belk added largest business track SLX. yield the and our regional funding of has contributed also delever ABL with a strong We its balance a the was the through and quarter. ultimately know which over Longtime to base. level positioning. spans of is record for decade QX this company for in department improve

value create years weighted highlighted, value average for by and Both built yield cannot XX.X% increasingly in and investments in active a new investing resources, relationships, The opportunistic quarter. fair Belk, of of funded drive compared Arrowhead We've channel team been during theme the the XX% total of represent XX.X% investments comprised has number at in which to investments nonsponsored the over new QX. to in and other shareholders investments ability was Our to which this these been returns. on I transactions, be for nonsponsored replicated overnight. shareholder

exit increase largest X credit moment million had X QX. totaling I'll we quarter, in refinancing in vintage on in well do side, the were not pass activity to the repayments business. risk do newer with during On Consistent portfolio IntelePeer, the willingness repayment that new of present the investment spend our two not our as realizations a refinancings. investment and driven and by appropriate the the demonstrates Bestpass for return partial $XX that an to best as full markets, shareholders our our the path benefit highlight represent to this as deals --

an November. support initial the continue Best in investment in to Pass in of made our May We XXXX through and company upside

IRR of and of short of call MOM, the and X.X Over we acceleration X.Xx the income including activity-based of unlevered protection $X.XX the upfront generated fees. fee share XX% from period crystallization of per years, amortization

ability XXXX, in to higher increase expect to income, should of wider the first see declining rate in interest the our we in environment. in deploy experience environment portfolio spread our Given fee-based the activity velocity capital half in XXXX an

of standpoint, change X our to of QX. average of represent prior performance in new remains the credit no at with scale representing portfolio investment nonaccrual the X.X% X.XX with overall of a strongest weighted X, on From fair Nonaccruals rating a with a X rating to the being value X strong, quarter. added status quality from portfolio

decreased are relevant, and weighted quarter-over-quarter. weighted to our average conservative cover average of from and average X.Xx composition. the to XX.X%. X.Xx, amortized prior X.X X.Xx our respectively, portfolio on we for their borrowers and detach on portfolio's continue have and Moving producing quarter our XX.X% yield core for In in metrics QX, income to loans Across these attach at securities whom debt increased weighted costs to interest from points

As of this and also and will and million, was borrowers, Beginning revenue $XXX million, portfolio which forward quarter, the same going EBITDA $XXX million our core respectively, the EBITDA QX for QX. revenue those $XXX of and companies XXXX, note was million for average $XX respectively. for we weighted median

to turn to like I'd detail. more in cover Ian that, performance it over financial to With our

Ian Simmonds

Bo. you, Thank

$X.X were adjusted we income net billion Total investments funding net prior $X.X share outstanding investment income the to billion, generated per prior by that share billion, X.X% adjusted declared per from For up debt or $X.X the share activity. in $X.X driven was and QX, quarter, dividend net $X.XX. of and of principal net per billion the yesterday. were supplemental $X.XX impact quarter was of end at $XX.XX assets Total

from debt-to-equity and September June X.XXx XX was Our for X.XXx ratio weighted debt-to-equity QX ratio increased as our of to X.XXx. XX average as of

balance We our with capacity quarter of of continue unfunded against $XXX have to unfunded at revolver of be $X.X commitments drawn. significant company end liquidity portfolio eligible nearly billion to the million size for sheet

revolving weighted capacity almost through credit As of average quarterly XX% positive of our no in notes mix marginally cost in XXXX. Post November settlement on million we utilization our decreases by $XXX.X of our quarter funding impact a per debt. was end, debt XXXX and maturity satisfied a X, the undrawn prospective represented unsecured economic of resulting September of $X.XX share The XX, leverage facility. on impact had our unsecured

maturity, representing After capacity, Pro unutilized unfunded forma to have is more Xx commitments of for approximately unsecured maturity, the XX% our $XXX be represented we our than by drawn. satisfying this portfolio mix company million funding continue debt. to eligible revolver

dividend $X.XX of drivers Slide net NAV X against from our Moving per income Walking quarter's movement, adjusted we this to $X.XX contains added our per through presentation of share. main investment share materials. NAV base the bridge.

of asset by reduction $X.XX finally, resulted mentioned, Josh accrued gains realizations increased unwind incentive were gains impact there capital to fee $X.XX portfolio per noncash share was As the in NAV. investments share. per of And valuation $X.XX spreads of losses net the tightening investment expenses, on per there amounting The a sheet on unrealized balance reversal related the net $X.XX unrealized share on net credit value share. to per of our to

the in down of and detailed $XXX.X $XXX.X $XXX.X Shifting million, income, million, income We our Slide generated slightly to quarter. the million quarter of income third results operating the total on components prior X. was to dividend accelerated compared million QX, interest were through experienced investment prepayment $XXX.X in compared for income million upfront million to the fees quarter. amortization this slight quarter. representing given Other at fees activity-based $X in down increase paydowns and of the $X.X fees prior higher unscheduled from from in we Walking

$X prior the from quarter was incentive prior the accrual in million income quarter. compared down was in $XX.X Other $X.X Net million capital seasonal impact May. of annual noncash held gains $XX.X million, and shareholder meetings the excluding to expenses was related in expenses, primarily incurred due to to million special quarter. This a the last for fees

X.X%. average remained flat Our weighted outstanding on average at interest debt rate

not due rates interest did lagged quarter we a on expected a the experience structure impact falling rates average the interest weighted As of reminder, outstanding. X interest see liability which decrease a decline. means of our to roughly will in to entirely cost We on our as floating decrease this average rate debt are rate, debt is quarter

We per share approximately of undistributed estimate at income end. $X.XX quarter

shareholders. As equity with distribution direct to always, we returns on excise the requirements, and return from will minimize year to drag the income review our as tax the taxes of we progresses undistributed ensure to prioritize level comply potential continue

full annualized be adjusted net within that asset consistent of $X.XX our on on year, XX.X% our Before performance an range. with turning ROE this provide income cost generated on expectations it term we adjusted to ROEs. the and of our ROE yields, funds for QX, NII per the year At investment to we've beginning back an to the Based XX.X% we on Year-to-date, previously target through Josh, range this year XX.X%, to expect our like I'd of the range $X.XX. annualized over leverage. intermediate of an communicated briefly financial to target to based stated net for level continue share update of

concluding With that, remarks. it I'll turn back Josh to for

Joshua Easterly

to Ian. you, to ROEs. like on I'd regarding add Thank your comments

many in investment you heard say the net income. past, As can't me of eat shareholders

unrealized and For that and realized net losses reason, we focus after income. on earnings or net gains

LTM equity quarter. significantly net recognized losses of unrealized that a an income generated of of for XX%, cost earned we on On our we exceed equity inclusive We the return this approximately return of basis, X%. estimated shareholders

of than our base losses our result of cost that return in a assume assets a of As equity, investing inclusive we that generate in greater model. credit case

to to us, like to focus important I'd shareholder the is closing, most a In on moment which experience. take what's

Sixth are returns We risk-adjusted built an and to Street first best investor have platform firm the our shareholders. the architecture of for the deliver

talent in across lending. including XXX invested have We resources, including the with direct and and sector capabilities, investment professionals

allow platform, This range have SLX, the selective, this we investment have We resources the way scale, of our that long balance For capital while across results in to constrained structuring will sheet access to remain operating of business deliver to top-tier the over relative intellectual evaluate us we $X.X for assets. term. roughly available total shareholders and that to believe to the us our entire strongly allows capital wide the invest. billion a opportunities we to given highly continue of

time you please thank your the for open that, Operator, line With questions. for today.

Operator

[Operator Instructions]

Our from McKenna line with JMP. first comes the Brian question Citizens of

Brian Mckenna

a see your the all great So business the question during quarter. to here start. activity on It to nonsponsored was

then on ability well to best of pivot would the detail how of it think shareholders. size platform? And capabilities is a bit from market speaks perspective? cover a you're rest for I yield big the how team, we parts to deliver Sixth is as business, notable. incremental the to getting get then the be these little here, do the they to move forward it different deals your Street and this quite they the great of as do how sector types Sixth But as broad just the the across just more And from market collaborate Street with of returns

the these transactions next So nonsponsored lean should into you'll expect continue over of quarters? couple we to

Joshua Easterly

thanks parked the people I'm last interesting of for it. night sure Brian, in we appreciate had I night an question. front really TV. Yes. while the

for call. early appreciate you earnings I getting So up

sponsored level a nonsponsored. just quick, been on XX% set, XX% historically, real business our Just sponsored, the side, has

was This approximately. XX-XX quarter, it

I'll largest which a I actually that publicly X of Arrowhead, nonsponsored X and out pharma in spec transactions is deals. think our put were quarter category Belk business. this traded

who and We those those deal the So business to sponsored can the our add platform business. the relationship. today sponsored business sponsor our sponsors not same every themes with -- and trying even industries. do is bid way, industry focus that value based tilted where by on think which not to the -- not those typical understand we're models is we have more we thematic, we're It's trying

So go-to-market sponsored sponsored business, our traditional say business. not I it's a even would kind of

XXX like in a of professionals approximately in business and so have strategy for investment lack as direct in teams grouped of then our ABS industry and both, better well. they're word, team, grouped kind also they're We it call lending,

And big so care, us, retail, software for one infrastructure. is health a energy consumer,

efficient and focus -- company, have go And they're capital for model big and like been toggle to sponsor-driven. to We shareholder tech. a example, between that direct care, given health like so being returns. return the big not able our driver the historical And allocating And we of typically then a of our way. in those that that's most we model. Those in risk

that. think volatility, there's in But quite hopefully, maybe a we world, gives to So frankly, platform and that think have opportunities more be -- to higher complexity navigate for there's a where that going there's and to it rates, that where I is and going you're you is world little in probably built flavor. a the

Brian Mckenna

think a in focus forward There's clarity for lot here the great. clearly a of on I waiting then on moving just sponsors bit have on transacting. before little sponsored that M&A. election. And been And been some That's Okay. follow-up a

looking sponsors were quantify just related sense as on the post deal election could until many flow your just companies your of is magnitude deal we And sidelines sponsors to see pipeline, across trying year. waiting a and there they network sat more on So way acceleration as I'm clarity election? in of and get have well how to any the the the

Joshua Easterly

they given rates tricky traditional now, much So of administration. as The down think What to growth. the policies is in are may have slightly to you, inflationary, which and way, that it's wisdom with come early of And I which visibility change and keep higher, kind this the although come I'll on economic probably it's rates that Bo. think separate over honest I the say down the in would conventional as is turn not administration peaking markets -- by rates market I is, probably future. the for that more you see equity new better might or be

that it's M&A rates So to I you've I traditional as pipeline that of bit seen was down, hard think I little gets thinking would that. say what think a come the unlocked. tell we've and the seen --

the that I is issue X assets lot time need were rate a generate return. environment of valuations purchased through at a high think bigger in and a to work

XXXX And a money, need they It's sponsored middle just XXXX. of so high of given to valuations. sitting got portion private that's the and through because way equity vintages slower you NAV your time in the work those are to large transactions,

valuations a given to all know leverage private and the see rates. businesses, I anything if see the side, put have of change the change Bo, So can don't environment in unlock. on on bit amount add you'll structural given you'll of you of the you do the the in given little rate an I think there? unlock,

Robert Stanley

that coming there, an a really of time hard typical perspective. by a some year. that's see you every spot-on. cycle, overall, I to tone and an Anecdotally, driven which I rates of But interest to in that And years, Josh that But more would more M&A out -- smoothed I unlock It's There valuation was from bit I into the were results. election think be more alluded is in busiest the it's to and the think calibrate. think QX is folks earlier. cycle. there's QX election the expect waiting see this to what that's cautious it's QX. generally little going year election

Joshua Easterly

market the going longer mean, free offsetting dynamic. take math XXx you I I going earnings, it's for that's the to you're creditors, to to now if to you asset the is And Yes. limited XX cash simple or -- have is hold to XXx that that that's there's kind going think something flow, and bought of longer. given

Operator

next Mark line comes Truist of from Securities. Our Hughes question the with

Mark Hughes

know the numbers, I base growth this improved of think, you and much mentioned might rates You those been then any improvement how gave don't specific I how if have but that interest had that sense of sequentially. or in coverage, much EBITDA? lower

Joshua Easterly

And to think on X.X X.X. you if it's election, get which from don't reset rates, XX because little went both that a longer take days it So I you're to immediately. bit base SOFR benefit

that our earnings then the You of saw was interest, delay. obviously given there And in growth portfolio. the cost in

of help So it's with little bit mostly think growth I rates. a from earning

Mark Hughes

Yes. quarter, then the And noteworthy activity broader outlook on a about the then comment how in there? up? credit your And coming just anything amendment

Joshua Easterly

Yes.

the amendments. actually low. amendment activity So very, credit of amendments were positive Most was very

like amendments. amendments, some they I were positive repricing credit were total all But X positive, repricing, spread all compression. upsizes think slightly, real there X

So credit was And amendment a at in is indicator kind an the leading outlook book, of all-time the credit activity. really of the low. that activity

it was think X.X% the quarter. in I

So that should be a quality. of leading credit indicator

we've below I what worked credit, no credit in been kind through XX%. On I think, talking like about of and our is book -- would feels say generally, It There's, tails. dispersion we've names that.

book our thing something or I lien below a that's is $XXX,XXX the only XX% at equity not below thing like name like that. XX% an nonaccrual, second or small the on think in only

vantage dispersion, constructive intact or core kind got of the have interest from fees, And you the we're business. kind stuff the other believe like at tailings So $X you on you we're credit. Like X fees $X.XX from rate this Then that pretty I activity if on is point, curve the through probably are think my annualized. of NII plus to activity-based of and fundamentals positive of spot the quarter, least $X.XX NII. the x

so it the good feels business. the And -- and of pretty fundamentals on

Mark Hughes

that investments What's quarter, of of section new Appreciate seeing I'm rate. those question, fixed about mix, in the that? detail. other the nonsponsored? driving it that sponsored, XX% One the were properly, Is

Joshua Easterly

That was which the out X fixed was a just think. which million, and -- was XX the of security. rate Arrowhead, I XXX rate fixed

Operator

Instructions] [Operator James. comes line of from Robert question Our with next Raymond Dodd the

Robert Dodd

A couple of questions.

the you caveat is obviously, bought On companies BD the on every traditional coverage, X.X BDC it's a flow i.e., and it interest to X.X, for where for basis. relevant, other underwritten but as always that's how cash straight

actually could percentage of you does the portfolio apply what to? interest metric that So us coverage give

Joshua Easterly

Yes. Rob, I come to the think on of think have -- most it's back that. to it's But you I -- Robert. portfolio, we might

GAAP software, the on the software of one look, is growth. before, a is on costs, kind on industries of kind -- acquisition names, don't only is of just all think, capitalize which of talked Like where the I software it. this of about you So lot only a customer there's where growth, basis your expense normalize we've one to you of

you the basis, earnings GAAP on But earnings. cash So flows, a to you if acquisition were the the worse at cost. your capitalize the customer steady-state faster are grow,

the of it's -- adjustment of that, I that. the is software them think of outside all But some that were based names. on so on And

Robert Dodd

the to nonsponsored mix. going so sponsored, the On --

necessarily XX%. to like a not a nonsponsored, nonsponsored, to traditional it's cash are just mean buyout sponsor with not mean, On right? that I it's I them, -- even the flow company mean Belk. a things behind I loan

kind loan, a of sponsor industry, much how isn't perhaps So would the nonsponsored the it's mix and rest cash there i.e., flow it's versus else? the to of the nonsponsored is of something but what

Joshua Easterly

-- too, of Arrowhead I or of ABL collateral pharma this more and IP think were portfolio. like is spec is deal else, the they because less quarter, well, that on the something on value deal, an all the and

-- of so I mean, run. And off all what it's the we kind

that flow, a, nonsponsored can no all we of, was we mind, there to there's kind and quarter, it's get this traditional of my we're can, a cash underwrite. that can asset-based, For collateral in where kind we

Robert Stanley

is note whether I'd or that regardless cash underwritten ABL coverage it's is thing flowing coat one of The not. to

So and that's coverage it. how about We values oftentimes we are liquidation collateral not. asset recoveries think for and underwrite

Joshua Easterly

call that because actually on previous assets out rate, liquidation turned on basis. $XXX the XX can funding of $XX there's Because the be said million total. One million need I XX correction make I Arrowhead was $XX is XXX, cash said of XXX, into a was million out a I fixed it on to the versus which

So $XX correct needed that. to million, said I I

your about Robert. -- question was question, It that. the not was That here Sorry was that bank.

Robert Dodd

doing high, Just like risk higher kind a for if -- a that I advance the okay. stay then stay that that the pulled business had kind rate What's longer? Lithium Sponsor to some if Lithium, election of been of there's -- it's you mean, identify multiple of of results environment surprises noncore like plug. What's a high in just situation. rates surprised, is with during and the there And supportive now, the in risk for been others rates still. not been obviously, the you more hard talked these a gap has valuation are in in industry, it's obviously,

Joshua Easterly

Yes. Look, a look I -- great think when you at question. it's

there tough don't negative So really a -- sponsor or at has But you're kind an social in and between in, of was been $XX and I think ago thing in because a the before. et fundamentals supportive, kind know, we've I as wrong, that earnings growth COVID, actually it and we Lithium talked got opportunity right we negatively were improved about that impacted about million fundamentals And was about on if got was Lithium thought means was sat that. -- I one also revenue cetera. $XX of month them that this were to calls, one previous had of set, pressure. Lithium names it put year but -- The million think media,

is but challenged -- fundamentally so was Lithium fundamentally or challenged. And

names overlap the the nonaccrual. basically our think at that look growth are through are like revenue you have think, I I this, that XXX% i.e., we have or, name book, When with went fundamentally negative challenged, just

So more names. it doesn't feel fundamentally like there are challenged

growing faster. feels I But we're it some like are some Now think kind are slower, like through growing that. of

Operator

next Our line with comes of question B. from Bryce Rowe the Riley.

Bryce Rowe

relative spread to do here. originations here was we made the and to there about square taking from perspective? But post some comments with and trying some velocity growth where question you today. maybe obviously, how see think they might wanted I Josh, up election. portfolio are puts Appreciate net what you've are you your ask, I'm outlook And to mean, for portfolio takes. about And prospects repayments that a the I

Joshua Easterly

It's look, things. able so a the like was One would think that we say of good one capital to post cycle. are the the I industry some in invested Yes. lot we people And -- few is were in I a of invest had rate 'XX hike really there -- book. couple capital,

will kind the we're there's XX% some what to you those and that idiosyncratic keep it's level fees. well. My feels come that It They're And some gauge. the of then them markets were just at hard of we'll the because But they is very our portfolio investments do. It's hard in so of like that things option, will or provides really -- the good X/XX. And that incumbency better, portfolio are because have activity of to net usually book invested sold. turn I of but to the think And past we'll off bottom cetera. decide got by the churn. to guess is et being gauge nature option performed

for -- level fees But that from things coming tooth, to You saw I money stuff in margin, a as sure? on because has the people have curve pickup per down. on No. share. moving true And coming $X.XX feels Do are longer rates of start like it that's increase. quarter-over-quarter the velocity is know the to and of get to activity the so and assets $X.XX XX%

it's hard tell to But for sure.

good numbers? I on, trying manage, Every have get So we if underwriting right. do -- get put think to up about No. exact our assets day, risk

business. the slightly front. probably the high care And We of everything that on lack done bar itself. take credit we've I the else too set think in that of will for ourselves losses through

loans thing other losses. got we is include perfection, to like price but a on one theme we hit the think credit new that I -- that price not they you've

to But kind will world. we which think tell that's We velocity -- to control. macro, it's don't because we And we continue don't the that. hard by so the often how gauge about that's do of --

Bryce Rowe

Yes.

Okay. me. One more for

a dividend curve up rate perspective, As might least you about of a terminal all, we continues kind a to the for at kind you I bit certainly of think, end if credit forward That's coverage noted higher. thing, good the from being and think hold.

to base You've quarters, point can the had for here $X.XX you the take. set give where X dividend again? you What the gets dividend or at base increase

Joshua Easterly

option to to is they think business I think the discount that way think capital the by that's do to to about Look, plan. where have aligned we shareholders. get reasons, valuable the world we're reinvestment back least we We the of Yes. in back want is different reinvest the that for way, in the we the at a -- obvious lot that a

is super option valuable that people. to So

to to losses, But curve, make the we on as We want covered. credit want low reduce back. want But to post to good do a we half feel tax, to liability, really about the will is our always dividend excise on tax. which to we And comfortable have business. post capital is And back we which base dividend, that we base economic the where be view of that use reduce the fees, was which think the which to activity real this quarter, a think capital really the excise the overearning. $X.XX we is continue was a which which specials, through set get supplemental, drag the sure I through and get we quarterly, shareholders $X.XX, is mechanism

Operator

hand showing Thank further you. no remarks. this I'd to time. And call questions Easterly at Joshua over I'm to for currently the like closing back

Joshua Easterly

with thank everybody's all, really everybody a talk you, after holiday participation. our QX If We of to great you a first you we to Well, don't we'll great earnings. has hope their appreciate We for Great. season talk family. it. Thanksgiving,

Operator

Thank call. participation. conference today's you your concludes This for

disconnect. may now You

Sixth Street Specialty Lending (TSLX) 6 Nov 242024 Q3 Earnings call transcript