Sixth Street Specialty Lending, Inc. (TSLX) SEC Filings & Earnings Calls

Credit deterioration in portfolio

“Non-accrual investments increased from 0.6% of fair value at December 31, 2025 to 1.3% at June 30, 2026.”

Declining net investment income

“Net investment income decreased from $50.8 million for Q2 2025 to $40.9 million for Q2 2026, a decline of 19.6%.”

Concentration in floating rate assets with falling rates

“Interest from investments decreased primarily due to a decrease in reference rates for the three months ended June 30, 2026 compared to the same period in 2025.”

Decrease in investment income due to lower reference rates.

“decrease in investment income was primarily the result of a decrease in reference rates” · word for word

Net unrealized losses from credit spread movements partially offset by gains.

“$0.04 per share of net unrealized losses attributable to credit spread movements” · word for word

NAV decline of $0.58 per share due to credit spread widening and lower equity valuations

“The main driver of this quarter's NAV per share decline was $0.58 per share attributable to movement in fair value from market inputs. This included $0.40 per share from unrealized losses in the debt portfolio tied to credit spread widening seen in the broader market and $0.18 per share from lower market valuations in the Company's limited equity portfolio.” · word for word

Non-accrual percentage increased from 0.6% to 1.4% of portfolio at fair value

“1.4% and 0.6% of the portfolio at fair value was on non-accrual status, respectively. There was one addition and one removal from non-accrual status during the quarter, resulting in no change to the total number of investments on non-accrual at three names.” · word for word

Credit quality deterioration

“Non-accrual investments increased from 0.6% to 1.4% of fair value QoQ.”

Interest rate sensitivity

“Decrease in reference rates reduced interest income significantly.”

Realized losses on investments

“Net realized losses on investments of $39.3 million in Q1 2026.” · word for word

Key man / CEO transition risk

“Joshua Easterly informed the Company of his intention to retire from the Board, effective as of the close of business on May 21, 2026.” · word for word

Dilution from below-NAV issuance

“Any sale of common stock at a price below NAV would result in an immediate dilution to existing common stockholders who do not participate in such sale on at least a pro rata basis.” · word for word

NAV decline due to reversal of unrealized gains and portfolio company specific events

“The primary drivers of this year’s change in NAV were the over-earning of the base dividend through net investment income, offset by the reversal of net unrealized gains from investment realizations during the year and portfolio company specific events.” · word for word

Elevated interest rate environment may impact portfolio valuations and borrowing costs

“net investment income for Q4 continues to reflect the impact from the elevated interest rate environment combined with strong activity-based fee income.” · word for word

Credit risk from second-lien debt investments

“Second-lien debt investments: Amortized Cost $69.6M, Fair Value $30.7M, Net Unrealized Gain (Loss) ($38.9)”

Interest rate risk from floating rate debt

“The majority of our debt investments are based on floating rates, such as Euro Interbank Offer Rate (“EURIBOR”), Term Secured Overnight Financing Rate (“SOFR”), Sterling Overnight Index Average (“SONIA”), the Federal Funds Rate or the Prime Rate.” · word for word

Competition from other capital providers

“We compete for investments with a number of capital providers, including BDCs, other investment funds (including private debt and equity funds and venture capital funds), special purpose acquisition company sponsors, investment banks with underwriting activities, hedge funds that invest in private investments in public equities, traditional financial service” · word for word

Interest Rate Compression

“The decrease in interest from investments was primarily the result of a decrease in reference rates for the three months ended September 30, 2025 compared to the same period in 2024.” · word for word

Geopolitical and Trade Policy Uncertainty

“To date, 2025 has been marked by continued uncertainty in global markets, driven by investor concerns over inflation, elevated interest rates, ongoing political and regulatory uncertainty, including potential shifts in U.S. trade policy and the imposition of new tariffs.” · word for word

Credit Risk from Portfolio Companies

“Unrealized losses for the three months ended September 30, 2025 resulted from negative credit-related adjustments and widening credit spreads.” · word for word

CEO transition may cause short-term uncertainty, but insider appointment and continued board role mitigate risk.

“CEO resignation effective Dec 31, 2025; Co-CEO appointed; no disagreement cited.”