Sixth Street Specialty Lending, Inc.

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 September 30, 2024, we have originated approximately $40.4 billion aggregate principal amount of investments and retained approximately $10.5 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 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 March 31, 2025, we have originated approximately $47.5 billion aggregate principal amount of investments and retained more than $11.0 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.

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 September 30, 2024, our core portfolio companies, which exclude certain investments that fall outside of our typical borrower profile and represent 95.5% of our total investments based on fair value, had weighted average annual revenue of $327.1 million and weighted average annual EBITDA of $110.6 million. As of September 30, 2024, our core portfolio companies had a median annual revenue of $149.2 million and a median annual EBITDA of $51.9 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 March 31, 2025, our core portfolio companies, which exclude certain investments that fall outside of our typical borrower profile and represent 94.8% of our total investments based on fair value, had weighted average annual revenue of $383.0 million and weighted average annual EBITDA of $111.8 million. As of March 31, 2025, our core portfolio companies had a median annual revenue of $138.6 million and a median annual EBITDA of $51.8 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 September 30, 2024, the largest investment in a single issuer based on fair value represented 2.3% 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 March 31, 2025, the largest single investment based on fair value represented 2.3% of our total investment portfolio.

Previous wording

As of September 30, 2024, the average investment size in each of our portfolio companies was approximately $29.9 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 $30.7 million as of September 30, 2024.

Current wording

As of March 31, 2025, the average investment size in each of our portfolio companies was approximately $29.7 million based on fair value.

Previous wording

As of September 30, 2024, the largest industry represented 16.0% of our total investment portfolio based on fair value.

Current wording

As of March 31, 2025, the largest industry represented 15.6% 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 September 30, 2024, approximately 94.0% of our portfolio was invested in secured debt, including 93.2% 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 three months ended September 30, 2024, the weighted average term on new investment commitments in new portfolio companies was 6.3 years.

Current wording

Investment Structuring. We focus on investing at the top of the capital structure and protecting that position. As of March 31, 2025, approximately 93.8% of our portfolio was invested in secured debt, including 92.9% 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 three months ended March 31, 2025, the weighted average term on new investment commitments in new portfolio companies was 5.2 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 September 30, 2024, we had call protection on 74.1% of our debt investments based on fair value, with weighted average call prices of 107.3% for the first year, 104.1% for the second year and 101.6% for the third year, in each case from the date of the initial investment. As of September 30, 2024, 98.8% 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.

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 March 31, 2025, we had call protection on 79.7% of our debt investments based on fair value, with weighted average call prices of 108.2% for the first year, 104.4% for the second year and 101.6% for the third year, in each case from the date of the initial investment. As of March 31, 2025, 97.0% 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 $80 billion of assets under management as of September 30, 2024. 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 650 investment and operating professionals. As of September 30, 2024, sixty-nine (69) of these personnel are dedicated to direct lending, including fifty-four (54) investment professionals.

Current wording

Sixth Street is a global investment business with over $100 billion of assets under management as of March 31, 2025. 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 March 31, 2025, seventy-three (73) of these personnel are dedicated to direct lending, including fifty-eight (58) investment professionals.

Previous wording

Under the terms of the Investment Advisory Agreement and Administration Agreement, the Adviser’s services are not exclusive, and the Adviser is free to furnish similar or other services to others, so long as its services to us are not impaired. Under the terms of the Investment Advisory Agreement, we will pay the Adviser the base management fee, or the Management Fee, and may also pay certain incentive fees, or the Incentive Fees.

Current wording

Under the terms of the Investment Advisory Agreement and Administration Agreement, the Adviser’s services are not exclusive, and the Adviser is free to furnish similar or other services to others, so long as its services to us are not impaired. Under the terms of the Investment Advisory Agreement, we will pay the Adviser the base management fee (the “Management Fee”), and may also pay certain incentive fees (the “Incentive Fees”).

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 seven years, and, as of September 30, 2024, 98.8% 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 three and nine months ended September 30, 2024, 5.2% and 6.6% 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 March 31, 2025, 97.0% 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 three months ended March 31, 2025 and 2024, 4.6% and 6.9%, respectively, of our total investment income was comprised of PIK interest.

Previous wording

Changes in our net investment income are primarily driven by the spread between the payments we receive from our investments in our portfolio companies against our cost of funding, rather than by changes in interest rates. Our investment portfolio primarily consists of floating rate loans, and our credit facilities, 2024 Notes, 2026 Notes, 2028 Notes and 2029 Notes, after taking into account the effect of the interest rate swaps we have entered into in connection with these securities, all bear interest at floating rates. Macro trends in base interest rates like SOFR or other reference rates may affect our net investment income over the long term. However, because we generally originate loans to a limited number of portfolio companies each quarter, and those investments also vary in size, our results in any given period—including the interest rate on investments that were sold or repaid in a period compared to the interest rate of new investments made during that period—often are idiosyncratic, and reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business.

Current wording

Changes in our net investment income are primarily driven by the spread between the payments we receive from our investments in our portfolio companies against our cost of funding, rather than by changes in interest rates. Our investment portfolio primarily consists of floating rate loans, and our Revolving Credit Facility, 2026 Notes, 2028 Notes, 2029 Notes, and 2030 Notes after taking into account the effect of the interest rate swaps we have entered into in connection with these securities, all bear interest at floating rates. Macro trends in base interest rates like SOFR or other reference rates may affect our net investment income over the long term. However, because we generally originate loans to a limited number of portfolio companies each quarter, and those investments also vary in size, our results in any given period—including the interest rate on investments that were sold or repaid in a period compared to the interest rate of new investments made during that period—often are idiosyncratic, and reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business.

Previous wording

As of September 30, 2024, our portfolio based on fair value consisted of 93.2% first-lien debt investments, 0.8% second-lien investments, 1.1% mezzanine debt investments, 4.8% equity and other investments and 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.

Current wording

As of March 31, 2025, our portfolio based on fair value consisted of 92.9% first-lien debt investments, 1.0% second-lien debt investments, 1.5% mezzanine debt investments and 4.6% equity investments. 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.

Previous wording

As of September 30, 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 13.1% 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 13.4% and 14.2%, respectively.

Current wording

As of March 31, 2025 and December 31, 2024, 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 12.1% and 12.3%, 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 12.3% and 12.5%, respectively.

Previous wording

As of September 30, 2024 and December 31, 2023, we had investments in 115 portfolio companies (including 3 structured credit investments, 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 $3,441.1 million and $3,283.1 million, respectively.

Current wording

As of March 31, 2025, we had investments in 115 portfolio companies with an aggregate fair value of $3,412.0 million. As of December 31, 2024, we had 116 portfolio companies (including one structured credit investment, which include each series of collateralized loan obligation as a separate portfolio company investment) with an aggregate fair value of $3,518.4 million.

Previous wording

For the three months ended September 30, 2024, the principal amount of new investments funded was $189.0 million in eight new portfolio companies and four existing portfolio companies. For this period, we had $90.2 million aggregate principal amount in exits and repayments.

Current wording

For the three months ended March 31, 2025, the principal amount of new investments funded was $136.8 million in six new portfolio companies and four existing portfolio companies. For this period, we had $269.6 million aggregate principal amount in exits and repayments.

Previous wording

For the three months ended September 30, 2023, the principal amount of new investments funded was $151.6 million in eight new portfolio companies and two existing portfolio companies. For this period, we had $158.9 million aggregate principal amount in exits and repayments.

Current wording

For the three months ended March 31, 2024, the principal amount of new investments funded was $162.8 million in nine new portfolio companies and five existing portfolio companies. For this period, we had $108.6 million aggregate principal amount in exits and repayments.

Previous wording

Weighted average total portfolio yield at fair value was 12.3% at September 30, 2024 and 13.4% at December 31, 2023.

Current wording

Weighted average total portfolio yield at fair value was 11.4% at March 31, 2025 and 11.6% at December 31, 2024.

Previous wording

Operating results for the three and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

Operating results for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $104.1 million for the three months ended September 30, 2023 to $105.8 million for the three months ended September 30, 2024. The increase in interest from investments was primarily the result of a larger average portfolio size for the period ended September 30, 2024 compared to the same period in 2023. Paid-in-kind interest income increased from $5.2 million for the three months ended September 30, 2023 to $6.2 million for the three months ended September 30, 2024 due to increased PIK election. Dividend income increased from $0.8 million for the three months ended September 30, 2023 to $3.3 million for the three months ended September 30, 2024 due to increased investments in dividend yielding securities compared to the same period in 2023. Other income decreased from $4.3 million for the three months ended September 30, 2023 to $3.9 million for the three months ended September 30, 2024, primarily due to decreased amendment fees during the three months ended September 30, 2024 compared to the same period in 2023.

Current wording

Interest from investments, which includes amortization of upfront fees and prepayment fees, increased from $104.6 million for the three months ended March 31, 2024 to $106.6 million for the three months ended March 31, 2025. The increase in interest from investments was primarily the result of a larger average investment size of $29.7 million for the three months ended March 31, 2025 compared to the same period in 2024 of $27.3 million. Paid-in-kind interest income decreased from $8.1 million for the three months ended March 31, 2024 to $5.4 million for the three months ended March 31, 2025 due to decreased PIK election. Dividend income increased from $0.8 million for the three months ended March 31, 2024 to $0.9 million for the three months ended March 31, 2025 due to increased investments in dividend yielding securities in 2025. Other income decreased from $4.3 million for the three months ended March 31, 2024 to $3.4 million for the three months ended March 31, 2025, primarily due to decreased arranger and amendments fees earned during 2025.

Previous wording

Operating expenses for the three and nine months ended September 30, 2024 and 2023 were as follows:

Current wording

Operating expenses for the three months ended March 31, 2025 and 2024 were as follows:

Previous wording

Interest expense, including other debt financing expenses, increased from $35.0 million for the three months ended September 30, 2023 to $38.5 million for the three months ended September 30, 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 $1,730.8 million for the three months ended September 30, 2023 to $1,817.2 million for the three months ended September 30, 2024. The average interest rate on our debt outstanding increased from 7.5% for the three months ended September 30, 2023 to 7.7% for the three months ended September 30, 2024.

Current wording

Interest expense, including other debt financing expenses, decreased from $39.0 million for the three months ended March 31, 2024 to $33.0 million for the three months ended March 31, 2025. This decrease was primarily due to a decrease in the average interest rate on our debt outstanding, which decreased from 7.6% for the three months ended March 31, 2024 to 6.4% for the three months ended March 31, 2025 due to a change in the mix of our debt financing sources and a change in SOFR rates.

Previous wording

Management Fees (gross of waivers) increased from $11.9 million for the three months ended September 30, 2023 to $13.0 million for the three months ended September 30, 2024 due to an increase in average assets for the three months ended September 30, 2024 compared to the same period in 2023. Management Fees (net of waivers) increased from $11.7 million for the three months ended September 30, 2023 to $12.7 million for the three months ended September 30, 2024. The Adviser waived Management Fees of $0.3 million for the three months ended September 30, 2024 pursuant to the Leverage Waiver. The Adviser waived Management Fees of $0.3 million for the three months ended September 30, 2023 pursuant to the Leverage Waiver.

Current wording

Management Fees (gross of waivers) increased from $12.6 million for the three months ended March 31, 2024 to $13.1 million for the three months ended March 31, 2025 due to an increase in average assets. Management Fees (net of waivers) increased from $12.2 million for the three months ended March 31, 2024 to $12.7 million for the three months ended March 31, 2025. Management Fees waived were $0.4 million for the three months ended March 31, 2025 and $0.4 million for the three months ended March 31, 2024, pursuant to the Leverage. Any waived management fees are not subject to recoupment by the Adviser.

Previous wording

Incentive Fees related to pre-Incentive Fee net investment income were $11.2 million for the three months ended September 30, 2023 and $11.2 million for the three months ended September 30, 2024. The Adviser did not waive any Incentive Fees related to pre-Incentive Fee net investment income for the three months ended September 30, 2024 or 2023. For the three months ended September 30, 2024, $(2.2) million of Incentive Fees were accrued related to the reversal of Capital Gains Fees. For the three months ended September 30, 2023, $2.6 million of Incentive Fees were accrued related to Capital Gains Fees. As of September 30, 2024, these accrued Incentive Fees are not contractually payable to the Adviser.

Current wording

For the three months ended March 31, 2025 and 2024, Incentive Fees were $7.8 million and $10.1 million, respectively, of which $11.5 million and $10.9 million, respectively, were realized and payable to the Adviser. The increase in Incentive Fees on net investment income from 2024 to 2025 was primarily due to a larger average portfolio size for the three months ended March 31, 2025 compared to the same period in 2024. For the three months ended March 31, 2025 and 2024, $(3.7) million and $(0.8) million, respectively, of Incentive Fees were accrued related to Capital Gains Fees. As of March 31, 2025, these accrued Incentive Fees are not contractually payable to the Adviser.

Previous wording

For the three and nine months ended September 30, 2024, we recorded a net expense of $0.7 million and $2.8 million, respectively, for U.S. federal excise tax and other taxes. For the three and nine months ended September 30, 2023, we recorded a net expense of $0.5 million and $1.8 million, respectively, for U.S. federal excise tax and other taxes.

Current wording

For the three months ended March 31, 2025 and 2024, we recorded a net expense of $1.4 million and $0.8 million, respectively, for U.S. federal excise tax and other taxes.

Previous wording

The following table summarizes our net realized and unrealized gains (losses) for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table summarizes our net realized and unrealized gains (losses) for the three months ended March 31, 2025 and 2024:

Previous wording

For the three and nine months ended September 30, 2024, we had net realized gains on investments of $0.1 million and $3.9 million, respectively, primarily driven by one investment and thirty-seven investments, respectively. For the three and nine months ended September 30, 2024, we had net realized losses of less than $0.1 million and net realized losses of $0.8 million, respectively on foreign currency transactions, primarily as a result of translating foreign currency related to our non-USD denominated investments. For the three and nine months ended September 30, 2024, we had net realized gains of less than $0.1 million and net realized losses of $2.3 million, respectively, on foreign currency investments. For the three and nine months ended September 30, 2024, we had net realized losses of $0.1 million and net realized gains of $3.1 million on foreign currency borrowings. The net realized gains and losses on foreign currency borrowings were a result of payments on our revolving credit facility.

Current wording

For the three months ended March 31, 2025 and 2024, we had net realized gains on investments of $1.1 million and $2.2 million, respectively. For the three months ended March 31, 2025 and 2024, we had net realized losses of $0.2 million and $0.6 million, respectively, on foreign currency transactions, primarily as a result of translating foreign currency related to our non-USD denominated investments. For the three months ended March 31, 2025, we had net realized gains on foreign currency investments of less than $0.1 million and for the three months ended March 31, 2024, we had net realized losses on foreign currency investments of $0.6 million. For the three months ended March 31, 2025, we had net realized losses on foreign currency borrowings of $0.1 million and for the three months ended March 31, 2024, we had net realized gains on foreign currency borrowings of $1.1 million. The net realized losses on foreign currency borrowings were a result of payments on our revolving credit facility.

Previous wording

For the three months ended September 30, 2024, we had $25.0 million in unrealized gains on 68 portfolio company investments, which was offset by $27.4 million in unrealized losses on 48 portfolio company investments. Unrealized gains primarily resulted from tightening credit spreads and positive portfolio company specific developments. Unrealized losses primarily resulted from negative portfolio company specific developments and the reversal of prior period unrealized gains due to realizations. For the nine months ended September 30, 2024, we had $42.4 million in unrealized gains on 81 portfolio company investments, which was offset by $64.4 million in unrealized losses on 82 portfolio company investments. Unrealized gains primarily resulted from tightening credit spreads and positive portfolio company specific developments. Unrealized losses primarily resulted from negative portfolio company specific developments and the reversal of prior period unrealized gains due to realizations.

Current wording

For the three months ended March 31, 2025, we had $23.7 million in unrealized gains on 53 portfolio company investments, which was offset by $34.5 million in unrealized losses on 68 portfolio company investments. Unrealized gains for the three months ended March 31, 2025 resulted from positive portfolio company specific developments. Unrealized losses for the three months ended March 31, 2025 resulted from widening credit spreads, negative credit-related adjustments and the reversal of prior period unrealized gains due to realizations.

Previous wording

For the three months ended September 30, 2023, we had $24.6 million in unrealized gains on 97 portfolio company investments, which was offset by $20.3 million in unrealized losses on 40 portfolio company investments. Unrealized gains resulted from an increase in fair value, primarily due to tightening credit spreads and positive portfolio company specific developments. Unrealized losses primarily resulted from the reversal of prior period unrealized gains due to realizations and negative portfolio company specific developments. For the nine months ended September 30, 2023, we had $56.3 million in unrealized gains on 117 portfolio company investments, which was offset by $41.6 million in unrealized losses on 25 portfolio company investments. Unrealized gains resulted from an increase in fair value, primarily due to tightening credit spreads and positive portfolio company specific developments. Unrealized losses primarily resulted from the reversal of prior period unrealized gains due to realizations and negative portfolio company specific developments.

Current wording

For the three months ended March 31, 2024, we had $15.4 million in unrealized gains on 75 portfolio company investments, which was offset by $27.1 million in unrealized losses on 69 portfolio company investments. Unrealized gains for the three months ended March 31, 2024 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 three months ended March 31, 2024 resulted from the reversal of prior period unrealized gains due to realizations, negative credit-related adjustments and changes in credit spreads.

Previous wording

For the three and nine months ended September 30, 2024, we had unrealized losses on foreign currency borrowings of $10.3 million and unrealized losses of $7.2 million, respectively, on foreign currency borrowings, as a result of fluctuations in the AUD, CAD, EUR, SEK and GBP exchange rates. For the three and nine months ended September 30, 2024, we had unrealized losses on foreign currency cash of less than $0.1 million and unrealized losses of less than $0.1 million, respectively. For the three and nine months ended September 30, 2024, we had no unrealized gains or losses on interest rate swaps, respectively. For the three and nine months ended September 30, 2024, we had unrealized losses of $1.5 million and $1.5 million, respectively, related to a deferred tax expense.

Current wording

For the three months ended March 31, 2025 we had unrealized losses on foreign currency borrowings of $11.0 million and for the three months ended March 31, 2024 we had unrealized gains on foreign currency borrowings of $4.7 million, primarily as a result of fluctuations in the AUD, CAD, SEK, GBP and EUR exchange rates. For the three months ended March 31, 2025, we had unrealized losses of less than $0.1 million and for the three months ended March 31, 2024, we had unrealized gains of less than $0.1 million on foreign currency transactions.

Previous wording

Since we began investing in 2011 through September 30, 2024, weighted by capital invested, our exited investments have generated an average realized gross internal rate of return to us of 17.2% (based on total capital invested of $7.5 billion and total proceeds from these exited investments of $9.6 billion). Ninety two 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 March 31, 2025, weighted by capital invested, our exited investments have generated an average realized gross internal rate of return to us of 17.0% (based on total capital invested of $8.2 billion and total proceeds from these exited investments of $10.5 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 three and nine months ended September 30, 2024, we had unrealized losses of $10.3 million and $7.2 million, respectively, and for the three and nine months ended September 30, 2023, we had unrealized gains of $5.6 million and $2.8 million, 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 three and nine months ended September 30, 2024 and 2023. 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 September 30, 2024. In the determination of the second component of the Incentive Fee, any unrealized gains/(losses) specifically related to the foreign currency denominated borrowings of non-US dollar denominated investments is offset against any associated unrealized gains/(losses) related to foreign currency denominated investments. 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 three months ended March 31, 2025 and 2024, we had $11.0 million of unrealized losses and $4.7 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 three months ended March 31, 2025 and 2024. 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 March 31, 2025. 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 the 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 September 30, 2024 and December 31, 2023, our asset coverage ratio was 184.0% and 181.6%, 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.

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 March 31, 2025 and December 31, 2024, our asset coverage ratio was 185.1% and 182.5%, 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 September 30, 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 September 30, 2024, we had approximately $1.1 billion of availability on our Revolving Credit Facility, subject to asset coverage limitations.

Current wording

Cash and cash equivalents as of March 31, 2025, 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 March 31, 2025, we had approximately $1.0 billion of availability on our Revolving Credit Facility, subject to asset coverage limitations.

Previous wording

As of September 30, 2024, we had $29.7 million in cash and cash equivalents, including $23.2 million of restricted cash. During the nine months ended September 30, 2024, cash used in operating activities was $14.8 million, primarily attributable to funding portfolio investments of $680.0 million and other operating activity of $10.6 million which was offset by an increase in net assets resulting from operations of $135.6 million and repayments and proceeds from investments of $540.3 million. Cash provided by financing activities was $19.3 million during the period, primarily attributable to borrowings of $1,107.1 million and proceeds from the issuance of common stock $93.3 million which was offset by paydowns on our Revolving Credit Facility of $1,044.2 million, dividends paid to stockholders of $128.1 million and deferred financing costs of $8.8 million.

Current wording

As of March 31, 2024, we had $35.9 million in cash and cash equivalents, including $29.1 million of restricted cash. During the three months ended March 31, 2024, cash used in operating activities was $65.5 million, primarily attributable to funding portfolio investments of $211.3 million and other operating activities of $17.1 million, which was offset by repayments and proceeds from investments of $115.4 million and an increase in net assets resulting from operations of $47.5 million. Cash provided by financing activities was $76.2 million during the period due to borrowings of $621.9 million and proceeds from the issuance of common stock $81.5 million, which was offset by paydowns on our debt of $578.9 million, dividends paid to stockholders of $43.3 million and deferred financing costs of $5.0 million.

Previous 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.

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, we 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 nine months ended September 30, 2024 and 2023, we also issued 888,122 and 982,211 shares of our common stock, respectively, to investors who have not opted out of our dividend reinvestment plan for proceeds of $17.8 million and $17.8 million, respectively.

Current wording

During the three months ended March 31, 2025 and 2024, we issued 302,922 and 292,057 shares of our common stock, respectively, to investors who have not opted out of our dividend reinvestment plan for proceeds of $6.4 million and $5.9 million, respectively.

Previous wording

On August 4, 2015, our Board authorized us to acquire up to $50 million in aggregate of our common stock from time to time over an initial six month period, and has continued to authorize the refreshment of the $50 million amount authorized under and extension of the stock repurchase program prior to its expiration since that time, most recently as of May 1, 2024. The amount and timing of stock repurchases under the program may vary depending on market conditions, and no assurance can be given that any particular amount of common stock will be repurchased.

Current wording

On August 4, 2015, our Board authorized us to acquire up to $50 million in aggregate of our common stock from time to time over an initial six month period, and has continued to authorize the refreshment of the $50 million amount authorized under and extension of the stock repurchase program prior to its expiration since that time, most recently as of November 5, 2024 (effective November 15, 2024). The amount and timing of stock repurchases under the program may vary depending on market conditions, and no assurance can be given that any particular amount of common stock will be repurchased.

Previous wording

No shares were repurchased for the three and nine months ended September 30, 2024 and 2023.

Current wording

No shares were repurchased for the three months ended March 31, 2025 and 2024.

Previous wording

In August 2012, we entered into a senior secured revolving credit agreement with Truist Bank (as a successor by merger to SunTrust Bank), as administrative agent, and J.P. Morgan Chase Bank, N.A., as syndication agent, and certain other lenders (as amended and restated, the “Revolving Credit Facility”).

Current wording

On August 23, 2012, we entered into a senior secured revolving credit agreement with Truist Bank (as a successor by merger to SunTrust Bank), as administrative agent, and J.P. Morgan Chase Bank, N.A., as syndication agent, and certain other lenders (as amended and restated, the “Revolving Credit Facility”).

Previous wording

As of September 30, 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.

Current wording

As of March 31, 2025, aggregate commitments under the Revolving Credit Facility were $1.675 billion. The Revolving Credit Facility includes an uncommitted accordion feature that allows us, under certain circumstances, to increase the size of the Revolving Credit Facility to up to $2.5 billion.