Sixth Street Specialty Lending Inc
For the period ended Dec 31, 2024. Filed Feb 13, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 13, 2025
TSLX$17.65-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-15.
0000950170-24-015845
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0000950170-25-019845
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 278 previous paragraphs and 274 current paragraphs.
217 unchanged; 51 reworded; 4 added; 7 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
For the year ended December 31, 2024, we had $48.9 million in unrealized gains on 70 portfolio company investments, which was offset by $101.7 million in unrealized losses on 100 portfolio company investments. Unrealized gains for the year ended December 31, 2024 resulted from tightening credit spreads and positive portfolio company specific developments. Unrealized losses for the year ended December 31, 2024 resulted from negative portfolio company specific developments and the reversal of prior period unrealized gains due to realizations.
Current report
As of December 31, 2024, we had a deferred tax liability of $5.2 million pertaining to net unrealized gains, related to eight of our investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.6 million pertaining to operating losses. We recorded a current tax expense of $0.2 million and a deferred tax expense of $2.6 million for the year ended December 31, 2024.
Current report
As of December 31, 2024, we had $27.3 million in cash and cash equivalents, including $22.4 million of restricted cash. During the year ended December 31, 2024, cash used in operating activities was $45.5 million, primarily attributable to funding portfolio investments of $1,096.1 million, which was partially offset by repayments and proceeds from investments of $863.4 million, an increase in net assets resulting from operations of $186.6 million and other operating activity of $0.7 million. Cash provided by financing activities was $47.6 million during the period due to borrowings of $1,784.9 million and proceeds from issuance of common stock, net of offering and underwriting costs of $93.3 million, which was partially offset by paydowns on our Revolving Credit Facility of $1,653.1 million, dividends paid of $168.7 million and deferred financing costs of $8.8 million.
Current report
As of December 31, 2024 and December 31, 2023, the Company was in compliance with the terms of the Revolving Credit Facility.
Removed paragraphs (7)
Previous report
For the year ended December 31, 2021, we had $97.7 million in unrealized gains on 47 portfolio company investments, which was offset by $48.0 million in unrealized losses on 44 portfolio company investments. Unrealized gains for the year ended December 31, 2021 resulted from an increase in fair value, primarily due to positive valuation adjustments, unwind of prior period unrealized losses, and changes in credit spreads. Unrealized losses for the year ended December 31, 2021 resulted from the reversal of prior period unrealized gains due to realizations and negative credit-related adjustments.
Previous report
As of December 31, 2021, we had a deferred tax liability of $2.8 million pertaining to net unrealized gains, related to six of its investments. Given the unrealized gains generated by the entity, the deferred tax liability has been offset by a deferred tax asset of $0.9 million pertaining to operating losses. We carried back a portion of its operating losses to the previous tax years generating a $0.3 million tax refund.
Previous report
As of December 31, 2021, we had $16.0 million in cash and cash equivalents, including $14.4 million of restricted cash. During the year ended December 31, 2021, we provided $2.5 million in cash from operating activities as a result of repayments and proceeds from investments of $1,088.8 million and an increase in net assets resulting from operations of $211.8 million, which was partially offset by funding portfolio investments of $1,198.9 million, and other operating activity of $99.2 million. Lastly, cash provided by financing activities was $0.2 million during the period, consisting of borrowings of $1,616.7 million (including net proceeds of $293.7 million from the issuance of our 2026 Notes), proceeds from the issuance of common stock, net of offering and underwriting costs, of $85.9 million, and proceeds from the issuance of common stock for the settlement of a portion of the 2022 Convertible Notes of $42.3 million, which was partially offset by paydowns on our Revolving Credit Facility of $1,472.0 million, dividends paid of $221.9 million, settlement of $42.8 million of principal on the 2022 Convertible Notes, and deferred financing costs of $8.0 million.
Previous report
In December 2021, we issued a total of 2,324,820 shares of common stock, or $42.3 million, as settlement for the conversion of $42.8 million principal amount of the 2022 Convertible Notes.
Previous report
In August 2022, we issued a total of 4,360,125 share of common stock, or $77.6 million, as settlement for the conversion of $79.2 million principal amount of the 2022 Convertible Notes.
Previous report
In connection with the 2024 Notes offering and reopening of the 2024 Notes, we entered into interest rate swaps to align the interest rates of our liabilities with our investment portfolio, which consists of predominately floating rate loans. The notional amount of the two interest rates swaps is $300.0 million and $50.0 million, respectively, each of which matures on November 1, 2024, matching the maturity date of the 2024 Notes. As a result of the swaps, our effective interest rate on the 2024 Notes is three-month SOFR plus 2.54% (on a weighted average basis).
Previous report
The amount available may be subject to limitations related to the borrowing base under the Revolving Credit Facility, outstanding letters of credit issued and asset coverage requirements.
Reworded paragraphs (51)
Previous wording
We are a specialty finance company focused on lending to middle-market companies. Since we began our investment activities in July 2011, through December 31, 2023, we have originated more than $31.5 billion aggregate principal amount of investments and retained approximately $10.0 billion aggregate principal amount of these investments on our balance sheet prior to any subsequent exits and repayments. We seek to generate current income primarily in U.S.-domiciled middle-market companies through direct investment originations of senior secured loans and, to a lesser extent, originations of mezzanine and unsecured loans and investments in corporate bonds, equity securities, and other instruments.
Current wording
We are a specialty finance company focused on lending to middle-market companies. Since we began our investment activities in July 2011, through December 31, 2024, we have originated more than $46.2 billion aggregate principal amount of investments and retained approximately $10.9 billion aggregate principal amount of these investments on our balance sheet prior to any subsequent exits and repayments. We seek to generate current income primarily in U.S.-domiciled middle-market companies through direct investment originations of senior secured loans and, to a lesser extent, originations of mezzanine and unsecured loans and investments in corporate bonds, equity securities, and other instruments.
Previous wording
By “middle-market companies,” we mean companies that have annual EBITDA, which we believe is a useful proxy for cash flow, of $10 million to $250 million, although we may invest in larger or smaller companies on occasion. As of December 31, 2023, our core portfolio companies, which exclude certain investments that fall outside of our typical borrower profile and represent 95.3% of our total investments based on fair value, had weighted average annual revenue of $230.3 million and weighted average annual EBITDA of $79.3 million.
Current wording
By “middle-market companies,” we mean companies that have annual EBITDA, which we believe is a useful proxy for cash flow, of $10 million to $250 million, although we may invest in larger or smaller companies on occasion. As of December 31, 2024, our core portfolio companies, which exclude certain investments that fall outside of our typical borrower profile and represent 95.4% of our total investments based on fair value, had weighted average annual revenue of $336.0 million and weighted average annual EBITDA of $110.2 million. As of December 31, 2024, our core portfolio companies had a median annual revenue of $146.9 million and a median annual EBITDA of $53.1 million.
Previous wording
The companies in which we invest use our capital to support organic growth, acquisitions, market or product expansion and recapitalizations (including restructurings). As of December 31, 2023, the largest single investment based on fair value represented 2.6% of our total investment portfolio.
Current wording
The companies in which we invest use our capital to support organic growth, acquisitions, market or product expansion and recapitalizations (including restructurings). As of December 31, 2024, the largest single investment based on fair value represented 2.3% of our total investment portfolio.
Previous wording
As of December 31, 2023, the average investment size in each of our portfolio companies was approximately $24.1 million based on fair value. Portfolio companies includes investments in structured credit investments, which include each series of collateralized loan obligation as a portfolio company investment. When excluding investments in structured credit investments, the average investment in our remaining portfolio companies was approximately $34.3 million as of December 31, 2023.
Current wording
As of December 31, 2024, the average investment size in each of our portfolio companies was approximately $30.3 million based on fair value. Portfolio companies includes investments in structured credit investments, which include each series of collateralized loan obligation as a portfolio company investment. When excluding investments in structured credit investments, the average investment in our remaining portfolio companies was approximately $30.6 million as of December 31, 2024.
Previous wording
As of December 31, 2023, the largest industry represented 18.0% of our total investment portfolio based on fair value.
Current wording
As of December 31, 2024, the largest industry represented 16.4% of our total investment portfolio based on fair value.
Previous wording
Investment Structuring. We focus on investing at the top of the capital structure and protecting that position. As of December 31, 2023, approximately 92.4% of our portfolio was invested in secured debt, including 91.3% in first-lien debt investments. We carefully perform diligence and structure investments to include strong investor covenants. As a result, we structure investments with a view to creating opportunities for early intervention in the event of non-performance or stress. In addition, we seek to retain effective voting control in investments over the loans or particular class of securities in which we invest through maintaining affirmative voting positions or negotiating consent rights that allow us to retain a blocking position. We also aim for our loans to mature on a medium term, between two to six years after origination. For the year ended December 31, 2023, the weighted average term on new investment commitments in new portfolio companies was 6.0 years.
Current wording
Investment Structuring. We focus on investing at the top of the capital structure and protecting that position. As of December 31, 2024, approximately 94.5% of our portfolio was invested in secured debt, including 93.9% in first-lien debt investments. We carefully perform diligence and structure investments to include strong investor covenants. As a result, we structure investments with a view to creating opportunities for early intervention in the event of non-performance or stress. In addition, we seek to retain effective voting control in investments over the loans or particular class of securities in which we invest through maintaining affirmative voting positions or negotiating consent rights that allow us to retain a blocking position. We also aim for our loans to mature on a medium term, between two to seven years after origination. For the year ended December 31, 2024, the weighted average term on new investment commitments in new portfolio companies was 6.2 years.
Previous wording
Risk Mitigation. We seek to mitigate non-credit-related risk on our returns in several ways, including call protection provisions to protect future interest income. As of December 31, 2023, we had call protection on 75.1% of our debt investments based on fair value, with weighted average call prices of 106.5% for the first year, 103.2% for the second year and 101.0% for the third year, in each case from the date of the initial investment. As of December 31, 2023, 99.7% of our debt investments based on fair value bore interest at floating rates, with 100% of these subject to interest rate floors, which we believe helps act as a portfolio-wide hedge against inflation.
Current wording
Risk Mitigation. We seek to mitigate non-credit-related risk on our returns in several ways, including call protection provisions to protect future interest income. As of December 31, 2024, we had call protection on 73.9% of our debt investments based on fair value, with weighted average call prices of 107.8% for the first year, 104.3% for the second year and 101.7% for the third year, in each case from the date of the initial investment. As of December 31, 2024, 97.2% of our debt investments based on fair value bore interest at floating rates, with 100.0% of these subject to interest rate floors, which we believe helps act as a portfolio-wide hedge against inflation.
Previous wording
Sixth Street is a global investment business with over $75 billion of assets under management as of December 31, 2023. Sixth Street’s direct lending platforms include Sixth Street Specialty Lending, Sixth Street Lending Partners, which is aimed at U.S. upper middle-market loan originations, Sixth Street Specialty Lending Europe, which is aimed at European middle-market loan originations. Additional Sixth Street core platforms include Sixth Street TAO, which has the flexibility to invest across all of Sixth Street’s private credit market investments, Sixth Street Opportunities, which focuses on actively managed opportunistic investments across the credit cycle, Sixth Street Credit Market Strategies, which is the firm’s “public-side” credit investment platform focused on investment opportunities in broadly syndicated leveraged loan markets, Sixth Street Growth, which provides financing solutions to growing companies, Sixth Street Fundamental Strategies, which primarily invests in secondary credit, and Sixth Street Agriculture, which invests in niche agricultural opportunities. Sixth Street has a long-term oriented, highly flexible capital base that allows it to invest across industries, geographies, capital structures and asset classes. Sixth Street has extensive experience with highly complex, global public and private investments executed through primary originations, secondary market purchases and restructurings, and has a team of over 580 investment and operating professionals. As of December 31, 2023, seventy (70) of these personnel are dedicated to direct lending, including fifty-five (55) investment professionals.
Current wording
Sixth Street is a global investment business with over $100 billion of assets under management as of December 31, 2024. Sixth Street’s direct lending platforms include Sixth Street Specialty Lending and Sixth Street Lending Partners, which are aimed at U.S. upper middle-market loan originations, Sixth Street Specialty Lending Europe, which is aimed at European middle-market loan originations. Additional Sixth Street core platforms include Sixth Street TAO, which has the flexibility to invest across all of Sixth Street’s private credit market investments, Sixth Street Opportunities, which focuses on actively managed opportunistic investments across the credit cycle, Sixth Street Credit Market Strategies, which is the firm’s “public-side” credit investment platform focused on investment opportunities in broadly syndicated leveraged loan markets, Sixth Street Growth, which provides financing solutions to growing companies, Sixth Street Fundamental Strategies, which primarily invests in secondary credit, and Sixth Street Agriculture, which invests in niche agricultural opportunities. Sixth Street has a long-term oriented, highly flexible capital base that allows it to invest across industries, geographies, capital structures and asset classes. Sixth Street has extensive experience with highly complex, global public and private investments executed through primary originations, secondary market purchases and restructurings, and has a team of over 650 investment and operating professionals. As of December 31, 2024, seventy-two (72) of these personnel are dedicated to direct lending, including fifty-seven (57) investment professionals.
Previous wording
We generate revenues primarily in the form of interest income from the investments we hold. In addition, we may generate income from dividends on direct equity investments, capital gains on the sale of investments and various loan origination and other fees. Our debt investments typically have a term of two to six years, and, as of December 31, 2023, 99.7% of these investments based on fair value bore interest at a floating rate, with 100% of these subject to interest rate floors. Interest on debt investments is generally payable monthly or quarterly. Some of our investments provide for deferred interest payments or PIK interest. For the years ended December 31, 2023, 2022 and 2021, 4.5%, 4.1% and 3.6%, respectively, of our total investment income was comprised of PIK interest.
Current wording
We generate revenues primarily in the form of interest income from the investments we hold. In addition, we may generate income from dividends on direct equity investments, capital gains on the sale of investments and various loan origination and other fees. Our debt investments typically have a term of two to seven years, and, as of December 31, 2024, 97.2% of these investments based on fair value bore interest at a floating rate, with 100.0% of these subject to interest rate floors. Interest on debt investments is generally payable monthly or quarterly. Some of our investments provide for deferred interest payments or PIK interest. For the years ended December 31, 2024, 2023 and 2022, 6.1%, 4.5% and 4.1%, respectively, of our total investment income was comprised of PIK interest.
Previous wording
As of December 31, 2023, our portfolio based on fair value consisted of 91.3% first-lien debt investments, 1.1% second-lien debt investments, 1.2% mezzanine debt investments, 4.7% equity and other investments and 1.7% structured credit investments. As of December 31, 2022, our portfolio based on fair value consisted of 90.3% first-lien debt investments, 1.5% second-lien debt investments, 0.4% mezzanine debt investments, 6.0% equity and other investments and 1.8% structured credit investments.
Current wording
As of December 31, 2024, our portfolio based on fair value consisted of 93.9% first-lien debt investments, 0.6% second-lien debt investments, 1.1% mezzanine debt investments, 4.4% equity and other investments and less than 0.1% structured credit investments. As of December 31, 2023, our portfolio based on fair value consisted of 91.3% first-lien debt investments, 1.1% second-lien debt investments, 1.2% mezzanine debt investments, 4.7% equity and other investments and 1.7% structured credit investments.
Previous wording
As of December 31, 2023 and December 31, 2022, our weighted average total yield of debt and income producing securities at fair value (which includes interest income and amortization of fees and discounts) was 14.1% and 13.5%, respectively, and our weighted average total yield of debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 14.2% and 13.4%, respectively.
Current wording
As of December 31, 2024 and December 31, 2023, our weighted average total yield of debt and income producing securities at fair value (which includes interest income and amortization of fees and discounts) was 12.3% and 14.1%, respectively, and our weighted average total yield of debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 12.5% and 14.2%, respectively.
Previous wording
As of December 31, 2023 and December 31, 2022, we had investments in 136 portfolio companies (including 42 structured credit investments, which include each series of collateralized loan obligation as a separate portfolio company investment) and 121 portfolio companies (including 43 structured credit investments, which include each series of collateralized loan obligation as a separate portfolio company investment), respectively, with an aggregate fair value of $3,283.1 million and $2,787.9 million, respectively.
Current wording
As of December 31, 2024 and December 31, 2023, we had investments in 116 portfolio companies (including one structured credit investment, which include each series of collateralized loan obligation as a separate portfolio company investment) and 136 portfolio companies (including 42 structured credit investments, which include each series of collateralized loan obligation as a separate portfolio company investment), respectively, with an aggregate fair value of $3,518.4 million and $3,283.1 million, respectively.
Previous wording
For the year ended December 31, 2022, the principal amount of new investments funded was $864.0 million in 65 new portfolio companies and 20 existing portfolio companies. For this period, we had $653.8 million aggregate principal amount in exits and repayments.
Current wording
For the year ended December 31, 2024, the principal amount of new investments funded was $838.9 million in thirty-four new portfolio companies and twenty-one existing portfolio companies. For this period, we had $793.7 million aggregate principal amount in exits and repayments.
Previous wording
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when management has reasonable doubt that the borrower will pay principal or interest in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Non-accrual loans are restored to accrual status when past due principal and interest has been paid and, in management’s judgment, the borrower is likely to make principal and interest payments in the future. Management may determine to not place a loan on non-accrual status if, notwithstanding any failure to pay, the loan has sufficient collateral value and is in the process of collection. See“–Critical Accounting Policies – Interest and Dividend Income Recognition.”
Current wording
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when management has reasonable doubt that the borrower will pay principal or interest in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Non-accrual loans are restored to accrual status when past due principal and interest has been paid and, in management’s judgment, the borrower is likely to make principal and interest payments in the future. Management may determine to not place a loan on non-accrual status if, notwithstanding any failure to pay, the loan has sufficient collateral value and is in the process of collection. See“–Critical Accounting Estimates – Interest and Dividend Income Recognition.”
Previous wording
Weighted average total portfolio yield at fair value was 13.4% at December 31, 2023 and 12.8% at December 31, 2022.
Current wording
Weighted average total portfolio yield at fair value was 11.6% at December 31, 2024 and 13.4% at December 31, 2023.
Previous wording
Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $266.7 million for the year ended December 31, 2021 to $297.6 million for the year ended December 31, 2022, primarily due to an increase in interest rates and total assets outstanding for the year ended December 31, 2022 compared to the same period in 2021. Dividend income decreased from $4.2 million for the year ended December 31, 2021 to $2.2 million for the year ended December 31, 2022 due to decreased investment in dividend yielding securities in 2022. Other income increased from $7.7 million for the year ended December 31, 2021 to $9.5 million for the year ended December 31, 2022, primarily due to increased amendment and other miscellaneous fees earned during 2022.
Current wording
Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $399.1 million for the year ended December 31, 2023 to $423.0 million for the year ended December 31, 2024. The increase in interest from investments was primarily the result of a larger average portfolio size for the year ended December 31, 2024 compared to the same period in 2023. Paid-in-kind interest income increased from $19.7 million for the year ended December 31, 2023 to $29.3 million for the year ended December 31, 2024 due to increased PIK election. Dividend income increased from $4.2 million for the year ended December 31, 2023 to $11.7 million for the year ended December 31, 2024 due to increased investments in dividend yielding securities in 2024. Other income increased from $15.1 million for the year ended December 31, 2023 to $18.5 million for the year ended December 31, 2024, primarily due to increased amendment and other miscellaneous fees earned during 2024.
Previous wording
Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $297.6 million for the year ended December 31, 2022 to $418.8 million for the year ended December 31, 2023. The increase in interest from investments was primarily the result of an increase in interest earned due to an increase in reference rates for the year ended December 31, 2023 compared to the same period in 2022 and a larger average portfolio size for the year ended December 31, 2023 compared to the same period in 2022. Dividend income increased from $2.2 million for the year ended December 31, 2022 to $4.2 million for the year ended December 31, 2023 due to increased investments in dividend yielding securities in 2023. Other income increased from $9.5 million for the year ended December 31, 2022 to $15.1 million for the year ended December 31, 2023, primarily due to increased amendment and other miscellaneous fees earned during 2023.
Current wording
Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $285.0 million for the year ended December 31, 2022 to $399.1 million for the year ended December 31, 2023. The increase in interest from investments was primarily the result of an increase in interest earned due to an increase in reference rates for the year ended December 31, 2023 compared to the same period in 2022 and a larger average portfolio size for the year ended December 31, 2023 compared to the same period in 2022. Paid-in-kind interest income increased from $12.6 million for the year ended December 31, 2023 to $19.7 million for the year ended December 31, 2023 due to increased PIK election. Dividend income increased from $2.2 million for the year ended December 31, 2022 to $4.2 million for the year ended December 31, 2023 due to increased investments in dividend yielding securities in 2023. Other income increased from $9.5 million for the year ended December 31, 2022 to $15.1 million for the year ended December 31, 2023, primarily due to increased amendment and other miscellaneous fees earned during 2023.
Previous wording
Interest expense, including other debt financing expenses, increased from $38.8 million for the year ended December 31, 2021 to $63.0 million for the year ended December 31, 2022. This increase was primarily due to an increase in the average interest rate on our debt outstanding and an increase in the average debt outstanding from $1,223.4 million for the year ended December 31, 2021 to $1,342.0 million for the year ended December 31, 2022. The average interest rate on our debt outstanding increased from 2.3% for the year ended December 31, 2021 to 3.9% for the year ended December 31, 2022 due to a change in the mix of our debt financing sources and a change in SOFR rates.
Current wording
Interest expense, including other debt financing expenses, increased from $133.7 million for the year ended December 31, 2023 to $154.1 million for the year ended December 31, 2024. This increase was primarily due to an increase in the average interest rate on our debt outstanding and an increase in the average debt outstanding from $1,705.6 million for the year ended December 31, 2023 to $1,882.7 million for the year ended December 31, 2024. The average interest rate on our debt outstanding increased from 7.3% for the year ended December 31, 2023 to 7.5% for the year ended December 31, 2024 due to a change in the mix of our debt financing sources.
Previous wording
Management Fees (gross of waivers) increased from $37.1 million for the year ended December 31, 2021 to $39.9 million for the year ended December 31, 2022 due to an increase in average total assets. Management Fees (net of waivers) increased from $36.9 million for the year ended December 31, 2021 to $39.5 million for the year ended December 31, 2022. Management Fees waived were $0.4 million for the year ended December 31, 2022, pursuant to the Leverage Waiver. Management Fees waived were $0.2 million for the year ended December 31, 2021.
Current wording
Management Fees (gross of waivers) increased from $46.4 million for the year ended December 31, 2023 to $51.8 million for the year ended December 31, 2024 due to an increase in average assets. Management Fees (net of waivers) increased from $45.2 million for the year ended December 31, 2023 to $50.3 million for the year ended December 31, 2024. Management Fees waived were $1.5 million for the year ended December 31, 2024, pursuant to the Leverage Waiver. Management Fees waived were $1.2 million for the year ended December 31, 2023 pursuant to the Leverage Waiver. Any waived management fees are not subject to recoupment by the Adviser.
Previous wording
For the years ended December 31, 2023, 2022 and 2021, Incentive Fees were $47.0 million, $24.5 million and $46.6 million, respectively, of which $42.6 million, $33.4 million, and $33.1 million, respectively, were realized and payable to the Adviser. The increase in Incentive Fees from 2022 to 2023 was primarily due to an increase in reference rates and a larger average portfolio size for the year ended December 31, 2023 compared to the same period in 2022. For the years ended December 31, 2023, 2022 and 2021, $4.4 million, $(8.9) million, and $13.5 million, respectively, of Incentive Fees were accrued related to Capital Gains Fees. As of December 31, 2023, these accrued Incentive Fees are not contractually payable to the Adviser.
Current wording
For the years ended December 31, 2024, December 31, 2023 and December 31, 2022, Incentive Fees were $40.2 million, $47.0 million and $24.5 million, respectively, of which $45.5 million, $42.6 million, and $33.4 million, respectively, were realized and payable to the Adviser. The increase in Incentive Fees from 2023 to 2024 was primarily due to a larger average portfolio size for the year ended December 31, 2024 compared to the same period in 2023. For the years ended December 31, 2024, December 31, 2023 and December 31, 2022, $(5.4) million, $4.4 million, and $(8.9) million, respectively, of Incentive Fees were accrued related to Capital Gains Fees. As of December 31, 2024, these accrued Incentive Fees are not contractually payable to the Adviser.
Previous wording
Professional fees increased from $6.6 million for the year ended December 31, 2021 to $7.2 million for the year ended December 31, 2022 due to higher legal fees and higher independent third-party valuation firm and sub-agent administration costs due to a larger portfolio. Other general and administrative fees decreased from $6.2 million for the year ended December 31, 2021 to $5.5 million for the year ended December 31, 2022 primarily driven by a decrease in administrative services incurred under the Administration Agreement.
Current wording
Professional fees increased from $7.3 million for the year ended December 31, 2023 to $7.5 million for the year ended December 31, 2024 due to higher legal fees, higher independent third-party valuation firm fees and higher sub-agent administration costs due to a larger portfolio. Other general and administrative fees increased from $5.3 million for the year ended December 31, 2023 to $5.5 million for the year ended December 31, 2024.
Previous wording
Professional fees increased from $7.2 million for the year ended December 31, 2022 to $7.3 million for the year ended December 31, 2023 due to higher legal fees and higher independent third-party valuation firm and sub-agent administration costs due to a larger portfolio. Other general and administrative fees decreased from $5.5 million for the year ended December 31, 2022 to $5.3 million for the year ended December 31, 2023 primarily driven by a decrease in administrative services incurred under the Administration Agreement.
Current wording
Professional fees increased from $7.2 million for the year ended December 31, 2022 to $7.3 million for the year ended December 31, 2023 due to higher legal fees, higher independent third-party valuation firm fees and higher sub-agent administration costs due to a larger portfolio. Other general and administrative fees decreased from $5.5 million for the year ended December 31, 2022 to $5.3 million for the year ended December 31, 2023 primarily driven by a decrease in administrative services incurred under the Administration Agreement.
Previous wording
For the calendar years ended December 31, 2023, 2022 and 2021 we recorded a net expense of $2.4 million, $2.6 million and $0.4 million, respectively, for U.S. federal excise tax and other taxes.
Current wording
For the calendar years ended December 31, 2024, December 31, 2023 and December 31, 2022 we recorded a net expense of $3.9 million, $2.4 million and $2.6 million, respectively, for U.S. federal excise tax and other taxes.
Previous wording
Value sums to less than $0.1 million.
Current wording
Value sums to less than 0.1 million
Previous wording
For the years ended December 31, 2023, 2022, and 2021, we had net realized gains on investments of $12.2 million, net realized gains on investments of $14.7 million and net realized gains on investments of $28.8 million, respectively. For the year ended December 31, 2023, we had net realized gains of $0.2 million, and for the years ended December 31, 2022 and 2021, we had net realized losses of $0.1 million and net realized gains of $0.1 million, respectively, on foreign currency transactions, primarily as a result of translating foreign currency related to our non-USD denominated investments. For the years ended December 31, 2023, 2022 and 2021, we had net realized losses on foreign currency investments of $0.5 million, $0.7 million and $3.4 million, respectively. For the years ended December 31, 2023, 2022, and 2021, we had net realized gains on foreign currency borrowings of $0.5 million, $0.5 million and $3.4 million, respectively. The net realized gains on foreign currency borrowings were a result of payments on our revolving credit facility. For the years ended December 31, 2023, 2022 and 2021, there was no net realized gain or loss, a net realized gain of $2.3 million and no net realized gain or loss, respectively, on interest rate swaps.
Current wording
For the years ended December 31, 2024, December 31, 2023, and December 31, 2022, we had net realized gains on investments of $9.0 million, $12.2 million and $14.7 million, respectively. For the year ended December 31, 2024, we had net realized losses of $1.2 million, for the year ended December 31, 2023, we had net realized gains of $0.2 million and for the year ended December 31, 2022, we had net realized losses of $0.1 million, respectively, on foreign currency transactions, primarily as a result of translating foreign currency related to our non-USD denominated investments. For the years ended December 31, 2024, December 31, 2023 and December 31, 2022, we had net realized losses on foreign currency investments of $4.3 million, $0.5 million and $0.7 million, respectively. For the years ended December 31, 2024, December 31, 2023, and December 31, 2022, we had net realized gains on foreign currency borrowings of $5.1 million, $0.5 million and $0.5 million, respectively. The net realized gains on foreign currency borrowings were a result of payments on our revolving credit facility. For the years ended December 31, 2024 and December 31, 2023 there was no net realized gain or loss on interest rate swaps, respectively, and for the year ended December 31, 2022 there was a net realized gain of $2.3 million on interest rate swaps.
Previous wording
For the year ended December 31, 2023, we had unrealized losses on foreign currency borrowings of $6.0 million, primarily as a result of fluctuations in the AUD, CAD, GBP and EUR exchange rates. For the years ended December 31, 2022 and 2021, we had an unrealized gain on foreign currency borrowings of $8.4 million and an unrealized loss on foreign currency borrowings of $0.6 million, respectively, primarily as a result of fluctuations in the AUD, CAD, GBP and EUR exchange rates. For the years ended December 31, 2023, 2022 and 2021, we had unrealized losses of $0.3 million, an unrealized gain of $0.3 million, and an unrealized gain of less than $0.1 million, respectively, on foreign currency cash. For the year ended December 31, 2023, 2022 and 2021, we had unrealized gains on interest rate swaps of $0.1 million, an unrealized loss on interest swaps of $6.7 million and an unrealized loss on interest swaps of $6.7 million, respectively, due to fluctuations in interest rates.
Current wording
For the year ended December 31, 2024, we had unrealized gains on foreign currency borrowings of $13.4 million, primarily as a result of fluctuations in the AUD, CAD, SEK, GBP and EUR exchange rates. For the years ended December 31, 2023 and 2022, we had an unrealized loss on foreign currency borrowings of $6.0 million and an unrealized gain on foreign currency borrowings of $8.4 million, respectively, primarily as a result of fluctuations in the AUD, CAD, GBP and EUR exchange rates. For the years ended December 31, 2024, December 31, 2023 and December 31, 2022, we had unrealized losses of less than $0.1 million, unrealized loss of $0.3 million, and an unrealized gain of $0.3 million, respectively, on foreign currency cash. For the year ended December 31, 2024, December 31, 2023 and December 31, 2022, we had no unrealized gains or losses on interest rate swaps, an unrealized gain on interest swaps of $0.1 million and an unrealized loss on interest swaps of $6.6 million, respectively, due to fluctuations in interest rates.
Previous wording
As of December 31, 2023, we had a deferred tax liability of $2.8 million pertaining to net unrealized gains, related to seven of its investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.9 million pertaining to operating losses. We recorded a current tax expense of $0.1 million and a deferred tax benefit of $0.6 million for the year ended December 31, 2023.
Current wording
As of December 31, 2023, we had a deferred tax liability of $2.8 million pertaining to net unrealized gains, related to seven of our investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.9 million pertaining to operating losses. We recorded a current tax expense of $0.1 million and a deferred tax benefit of $0.6 million for the year ended December 31, 2023.
Previous wording
As of December 31, 2022, we had a deferred tax liability of $3.3 million pertaining to net unrealized gains, related to eight of its investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.8 million pertaining to operating losses.
Current wording
As of December 31, 2022, we had a deferred tax liability of $3.3 million pertaining to net unrealized gains, related to eight of our investments. Given the unrealized gains generated by this entity, the deferred tax liability has been offset by a deferred tax asset of $0.8 million pertaining to operating losses.
Previous wording
Since we began investing in 2011 through December 31, 2023, weighted by capital invested, our exited investments have generated an average realized gross internal rate of return to us of 17.4% (based on total capital invested of $7.0 billion and total proceeds from these exited investments of $8.9 billion). Ninety percent of these exited investments resulted in a realized gross internal rate of return to us of 10% or greater.
Current wording
Since we began investing in 2011 through December 31, 2024, weighted by capital invested, our exited investments have generated an average realized gross internal rate of return to us of 17.1% (based on total capital invested of $7.9 billion and total proceeds from these exited investments of $10.0 billion). Ninety-two percent of these exited investments resulted in a realized gross internal rate of return to us of 10% or greater.
Previous wording
Our current approach to hedging the foreign currency exposure in our non-U.S. dollar denominated investments is primarily to borrow the par amount in local currency under our Revolving Credit Facility to fund these investments. For the years ended December 31, 2023, 2022 and 2021, we had $6.0 million of unrealized losses, $8.4 million of unrealized gains and $0.6 million of unrealized losses, respectively, on the translation of our non-U.S. dollar denominated debt into U.S. dollars; such amounts approximate the corresponding unrealized gains and losses on the translation of our non-U.S. dollar denominated investments into U.S. dollars for the years ended December 31, 2023, 2022 and 2021. See Note 2 for additional disclosure regarding our accounting for foreign currency. See Note 7 for additional disclosure regarding the amounts of outstanding debt denominated in each foreign currency at December 31, 2023. See our Consolidated Schedule of Investments for additional disclosure regarding the foreign currency amounts (in both par and fair value) of our non-U.S. dollar denominated investments.
Current wording
Our current approach to hedging the foreign currency exposure in our non-U.S. dollar denominated investments is primarily to borrow the par amount in local currency under our Revolving Credit Facility to fund these investments. For the years ended December 31, 2024, December 31, 2023 and December 31, 2022, we had $13.4 million of unrealized gains, $6.0 million of unrealized losses and $8.4 million of unrealized gains, respectively, on the translation of our non-U.S. dollar denominated debt into U.S. dollars; such amounts approximate the corresponding unrealized gains and losses on the translation of our non-U.S. dollar denominated investments into U.S. dollars for the years ended December 31, 2024, December 31, 2023 and December 31, 2022. See Note 2 for additional disclosure regarding our accounting for foreign currency. See Note 7 for additional disclosure regarding the amounts of outstanding debt denominated in each foreign currency at December 31, 2024. See our Consolidated Schedule of Investments for additional disclosure regarding the foreign currency amounts (in both par and fair value) of our non-U.S. dollar denominated investments.
Previous wording
We intend to continue to generate cash primarily from cash flows from operations, future borrowings and future offerings of securities. We may from time to time enter into additional debt facilities, increase the size of existing facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock if immediately after the borrowing or issuance our ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. For more information, see “Key Components of Our Results of Operations — Leverage” above. As of December 31, 2023, 2022 and 2021, our asset coverage ratio was 181.6%, 188.6%, and 205.4%, respectively. We carefully consider our unfunded commitments for the purpose of planning our capital resources and ongoing liquidity, including our financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation under the 1940 Act and the asset coverage limitation under our credit facilities to cover any outstanding unfunded commitments we are required to fund.
Current wording
We intend to continue to generate cash primarily from cash flows from operations, future borrowings and future offerings of securities. We may from time to time enter into additional debt facilities, increase the size of existing facilities or issue debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock if immediately after the borrowing or issuance our ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. For more information, see “Key Components of Our Results of Operations — Leverage” above. As of December 31, 2024, December 31, 2023 and December 31, 2022, our asset coverage ratio was 182.5%, 181.6%, and 188.6%, respectively. We carefully consider our unfunded commitments for the purpose of planning our capital resources and ongoing liquidity, including our financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation under the 1940 Act and the asset coverage limitation under our credit facilities to cover any outstanding unfunded commitments we are required to fund.
Previous wording
Cash and cash equivalents as of December 31, 2023, taken together with cash available under our credit facilities, is expected to be sufficient for our investing activities and to conduct our operations in the near term. As of December 31, 2023, we had approximately $0.8 billion of availability on our Revolving Credit Facility, subject to asset coverage limitations.
Current wording
Cash and cash equivalents as of December 31, 2024, taken together with cash available under our credit facilities, is expected to be sufficient for our investing activities and to conduct our operations in the near term. As of December 31, 2024, we had approximately $0.7 billion of availability on our Revolving Credit Facility, subject to asset coverage limitations.
Previous wording
As of December 31, 2023, we had $24.0 million restricted cash pledged as collateral under our interest rate swap agreements, compared to $15.4 million for the year ended December 31, 2022.
Current wording
As of December 31, 2024, we had $22.4 million restricted cash pledged as collateral under our interest rate swap agreements, compared to $24.0 million for the year ended December 31, 2023.
Previous wording
In February 2021, we issued a total of 4,000,000 shares of common stock at $21.30 per share. Net of underwriting fees and offering costs, we received total cash proceeds of $84.9 million. Subsequent to the offering we issued an additional 49,689 shares on March 24, 2021 pursuant to the overallotment option granted to underwriters and received, net of underwriting fees, total cash proceeds of $1.0 million.
Current wording
On March 5, 2024, we issued a total of 4,000,000 shares of common stock at $20.52 per share. Net of underwriting fees and offering costs, we received total cash proceeds of $81.5 million. Subsequent to the offering, the Company issued an additional 600,000 shares on April 1, 2024 pursuant to the overallotment option granted to underwriters and received, net of offering and underwriting fees, additional total cash proceeds of $11.9 million.
Previous wording
During the years ended December 31, 2023 and 2022, we issued 1,265,212 and 1,625,826 shares of our common stock, respectively, to investors who have not opted out of our dividend reinvestment plan for proceeds of $23.5 million and $30.5 million, respectively.
Current wording
During the years ended December 31, 2024 and December 31, 2023, we issued 1,231,937 and 1,265,212 shares of our common stock, respectively, to investors who have not opted out of our dividend reinvestment plan for proceeds of $24.7 million and $23.5 million, respectively.
Previous wording
For the year ended December 31, 2023, no shares were repurchased. For the year ended December 31, 2022, we repurchased 368,206 shares at a weighted average share price of $16.75 inclusive of commissions, for a total cost of $6.2 million.
Current wording
For the year ended December 31, 2024 and December 31, 2023, no shares were repurchased.
Previous wording
As of April 25, 2022, aggregate commitments under the facility were $1.585 billion. Pursuant to an amendment to the Revolving Credit Facility dated as of June 12, 2023 (the “Fourteenth Amendment”), the aggregate commitments under the facility were increased to $1.710 billion. The facility includes an uncommitted accordion feature that allows us, under certain circumstances, to increase the size of the facility to up to $2.0 billion.
Current wording
As of December 31, 2024, aggregate commitments under the facility were $1.7 billion. The facility includes an uncommitted accordion feature that allows the Company, under certain circumstances, to increase the size of the facility to up to $2.0 billion.
Previous wording
We may borrow amounts in U.S. dollars or certain other permitted currencies. As of December 31, 2023, we had outstanding debt denominated in Australian dollars (AUD) of 66.4 million, British pounds (GBP) of 32.3 million, Canadian dollars (CAD) of 96.8 million, and Euro (EUR) of 57.2 million on our Revolving Credit Facility, included in the Outstanding Principal amount in the table above. As of December 31, 2022, we had outstanding debt denominated in Australian dollars (AUD) of 69.0 million, British pounds (GBP) of 12.9 million, Canadian dollars (CAD) of 96.6 million, and Euro (EUR) of 23.4 million on its Revolving Credit Facility, included in the Outstanding Principal amount in the table above.
Current wording
We may borrow amounts in U.S. dollars or certain other permitted currencies. As of December 31, 2024, we had outstanding debt denominated in Australian dollars (AUD) of 63.0 million, British pounds (GBP) of 62.4 million, Canadian dollars (CAD) of 5.0 million, Swedish Krona (SEK) of 80.2 million and Euro (EUR) of 167.2 million on our Revolving Credit Facility, included in the Outstanding Principal amount in the table below. As of December 31, 2023, we had outstanding debt denominated in Australian dollars (AUD) of 66.4 million, British pounds (GBP) of 32.3 million, Canadian dollars (CAD) of 96.8 million, and Euro (EUR) of 57.2 million on our Revolving Credit Facility, included in the Outstanding Principal amount in the table above.
Previous wording
The Revolving Credit Facility also provides for the issuance of letters of credit up to an aggregate amount of $75 million. As of December 31, 2023 and December 31, 2022, we had $0.2 million and less than $0.1 million respectively in outstanding letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit issued through the Revolving Credit Facility.
Current wording
The Revolving Credit Facility also provides for the issuance of letters of credit up to an aggregate amount of $75 million. As of December 31, 2024 and December 31, 2023, we had $21.8 million and $0.2 million respectively in outstanding letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit issued through the Revolving Credit Facility.
Previous wording
stockholders’ equity of at least $500 million plus 25% of the net proceeds of the sale of equity interests after January 31, 2020;
Current wording
stockholders’ equity of at least $650 million plus 25% of the net proceeds of the sale of equity interests after April 24, 2024;
Showing the first 40 of 51 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Pursuant to the Fifteenth Amendment dated April 24, 2024, aggregate commitments were increased to $1.7 billion. With respect to $1.505 billion of commitments, the revolving period was extended to April 24, 2028 and the stated maturity was extended to April 24, 2029. For the remaining $195.0 million of commitments, (A) with respect to $25.0 million of commitments, the revolving period ends on February 4, 2025 and the stated maturity is February 4, 2026 and (B) with respect to $170.0 million of commitments, the revolving period ends April 24, 2026 and the stated maturity is April 23, 2027.
Current report — wording carried from elsewhere
The Company's 2024 Notes matured on November 1, 2024 and were fully repaid. The corresponding swap transaction associated with the issuance of the 2024 Notes also matured on November 1, 2024.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
guarantors (including certain limitations on the contribution of equity in financing subsidiaries) to (ii) the secured debt of the
Previous report — wording carried elsewhere
Company and its subsidiary guarantors (the “Obligor Asset Coverage Ratio”).
Previous report — wording carried elsewhere
to use the “Sixth Street” and “TPG” trademarks and certain variations thereof.