NEW YORK—February 13, 2025— Sixth Street Specialty Lending, Inc. (NYSE: TSLX, or the “Company”) today reported net investment income of $2.39 per share and net income of $2.03 per share, for the year ended December 31, 2024. For the quarter ended December 31, 2024 net investment income and net income per share were $0.62 and $0.55, respectively. The Company’s net investment income for Q4 continues to reflect the impact from the higher interest rate environment combined with an increase in activity-based fee income. In the fourth quarter, the Company earned $0.15 per share of activity-based fees, including dividend income, representing the highest amount recognized in seven quarters. Return on equity (ROE) for the full year 2024 was 14.1% and 12.0% on a net investment income and a net income basis, respectively. Annualized ROE for the fourth quarter 2024 was 14.4% and 12.8% on a net investment income and a net income basis, respectively.

Both net investment income per share and net income per share for the year include approximately $0.06 per share of unwind of previously accrued capital gains incentive fee expenses. Excluding the impact of the accrued capital gains incentive fee expenses, the Company’s adjusted net investment income and adjusted net income for the year ended December 31, 2024 were $2.33 per share and $1.97 per share, respectively. For the quarter ended December 31, 2024, adjusted net investment income per share was $0.61 and adjusted net income per share was $0.54. Return on equity (ROE) for the full year 2024 was 13.8% and 11.6% on an adjusted net investment income and an adjusted net income basis, respectively. Annualized ROE for the fourth quarter 2024 was 14.2% and 12.5% on an adjusted net investment income and an adjusted net income basis, respectively.

Reported net asset value (NAV) per share was $17.16 at December 31, 2024 as compared to $17.12 at September 30, 2024. The Company’s base dividend remained well covered with adjusted net investment income of $0.61 per share exceeding the base quarterly dividend by $0.15 per share, or 33%. The Company announced that its Board of Directors has declared a first quarter 2025 base dividend of $0.46 per share to shareholders of record as of March 14, 2025 and payable on March 31, 2025. The Board also announced a fourth quarter supplemental dividend of $0.07 per share to shareholders of record as of February 28, 2025, payable on March 20, 2025. Adjusted for the impact of the supplemental dividend related to this quarter’s earnings, the Company’s Q4 adjusted NAV per share was $17.09. The primary drivers of this year’s NAV per share growth were the over-earning of our base dividend through net investment income, accretive capital markets transactions, and realized gains on investments. Over the last twelve months, reported NAV per share has increased from $17.04 to $17.16.

Post quarter-end, the Company began the annual process of amending and extending its revolving credit facility. The Company has historically extended the maturity on an annual basis driven by its asset-liability matching principle of maintaining a weighted average duration on its liabilities that meaningfully exceeds the weighted average life of its assets funded by debt. The Company anticipates marginally lowering the drawn spread and undrawn fee on the facility upon closing of the amendment in Q1 2025.

Net Investment Income Per Share

2024:

Q4 2024:

$2.39

$0.62

2024 (adjusted):

Q4 2024 (adjusted):

$2.33

$0.61

Net Income Per Share

2024:

Q4 2024:

$2.03

$0.55

2024 (adjusted):

Q4 2024 (adjusted):

$1.97

$0.54

Return on Equity

2024 (NII):

Q4 2024 (NII):

14.1%

14.4%

2024 (NI):

Q4 2024 (NI):

12.0%

12.8%

2024 (Adj. NII):

Q4 2024 (Adj. NII):

13.8%

14.2%

2024 (Adj. NI):

Q4 2024 (Adj. NI):

11.6%

12.5%

NAV

Q4 2024 ($MM):

$1,607.5

Q4 2024 (per share):

$17.16

Q4 2024 (per share, adj):

$17.09

Dividends Declared (per share)

Q4 2024 (Base):

$0.46

2024 (Base):

$1.84

2024 (Supplemental):

$0.25

2024 (Total):

$2.09

For the year ended December 31, 2024, new investment commitments totaled $1,242.9 million. This compares to $958.6 million for the year ended December 31, 2023.

For the year ended December 31, 2024, the principal amount of new investments funded was $838.9 million in 34 new portfolio companies and 21 existing portfolio companies. For this period, the Company had $793.7 million aggregate principal amount in exits and repayments.

For the year ended December 31, 2023, the principal amount of new investments funded was $808.4 million in 29 new portfolio companies, 16 existing portfolio companies and 1 structured credit investments. For this period, the Company had $469.1 million aggregate principal amount in exits and repayments.

Fourth Quarter

For the quarter ended December 31, 2024, new investment commitments totaled $479.0 million. This compares to $269.3 million for the quarter ended September 30, 2024

For the quarter ended December 31, 2024, the principal amount of new investments funded was $323.5 million across nine new portfolio companies and seven upsizes to existing portfolio companies. For this period, the Company had $304.7 million aggregate principal amount in exits and repayments. For the quarter ended September 30, 2024, the principal amount of new investments funded was $189.0 million across eight new portfolio companies and four upsizes to existing portfolio companies. For this period, the Company had $90.2 million aggregate principal amount in exits and repayments.

As of December 31, 2024 and September 30, 2024, the Company had investments in 1151 and 1122 portfolio companies, respectively, with an aggregate fair value of $3,518.4 million and $3,441.1 million, respectively. As of December 31, 2024, the average investment size in each portfolio company was $30.61 million based on fair value.

As of December 31, 2024, the Company’s portfolio based on fair value consisted of 93.9% first-lien debt investments, 0.6% second-lien debt investments, 0.1% structured credit investments, 1.1% mezzanine debt investments, and 4.4% equity and other investments. As of September 30, 2024, the Company’s portfolio based on fair value consisted of 93.2% first-lien debt investments, 0.8% second-lien debt investments, 0.1% structured credit investments, 1.1% mezzanine debt investments, and 4.8% equity and other investments.

As of December 31, 2024, 97.2% of debt investments3 based on fair value in the portfolio bore interest at floating rates, with 100.0% of these subject to reference rate floors. The Company’s credit facilities also bear interest at floating rates. In connection with the Company’s Unsecured Notes, which bear interest at fixed rates, the Company has entered into fixed-to-floating interest rate swaps in order to align the nature of the interest rates of its liabilities with its investment portfolio.

For the period ended December 31, 2024 and September 30, 2024, the 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 13.1%, respectively, and the 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 13.4%, respectively.

As of December 31, 2024, non-accrual investments represented 1.4% of the portfolio at fair value. No new investments were added to non-accrual status during the quarter.

2024 Origination Activity

Commitments:

$1,242.9MM

Fundings:

$838.9MM

Net Fundings:

$45.2MM

Q4 2024 Origination Activity

Commitments:

$479.0MM

Fundings:

$323.5MM

Net Fundings:

$18.8MM

Average Investment Size1

$30.6MM

(0.9% of the portfolio at fair value)

First Lien Debt Investments (% FV)

93.9%

Floating Rate Debt Investments3

(% FV)

97.2%

Weighted Average Yield of Debt and Incoming-Producing Securities

Yield at Fair Value:

12.3%

Yield at Amortized Cost:

12.5%

Full Year

2024

For the years ended December 31, 2024 and 2023, investment income totaled $482.5 million and $438.1 million, respectively. The increase in investment income was primarily the result of net funding activity.

Net expenses totaled $258.6 million and $239.3 million for the years ended December 31, 2024 and 2023, respectively. The increase in net expenses was primarily due to higher reference rates which increased the Company’s weighted average interest rate on average debt outstanding.

Investment Income:

$482.5MM

Net Expenses:

$258.6MM

Fourth Quarter

Q4 2024

For the three months ended December 31, 2024 and 2023, total investment income was $123.7 million and $119.5 million, respectively. The increase in total investment income was primarily from an increase in total interest from investments and other income.

Net expenses totaled $64.9 million and $64.3 million for the three months ended December 31, 2024 and 2023, respectively. The increase in expenses was primarily driven by higher management fees due to an increase in average assets and higher incentive fees due to an increase in pre-incentive fee net investment income.

Investment Income:

$123.7MM

Net Expenses:

$64.9MM

Debt and Capital Resources

As of December 31, 2024, the Company had $27.3 million in cash and cash equivalents (including $22.4 million of restricted cash), total principal value of debt outstanding of $1,954.1 million, and $674.2 million of undrawn capacity on its revolving credit facility, subject to borrowing base and other limitations. At year end, aggregate commitments under the Company’s revolving credit facility were $1,700 million, in accordance with the accordion feature.

The Company’s weighted average interest rate on debt outstanding was 7.0% and 7.7% for the three months ended December 31, 2024 and September 30, 2024, respectively. At December 31, 2024, the Company’s debt to equity ratio was 1.22x, compared to 1.19x at September 30, 2024. Average debt to equity was 1.23x and 1.14x during the three months ended December 31, 2024 and September 30, 2024, respectively.

Total Principal Debt Outstanding

$1,954.1MM

Debt-to-Equity Ratio

Q4 2024 Quarter End:

1.22x

2024 Average1:

1.19x

Q4 2024 Average1:

1.23x

Revolving Credit Facility1

Unfunded Commitment Activity

Revolver Capacity

$1,675

Unfunded Commitments (See Note 8 in 9/30/24 10-Q)

$351

Drawn on Revolver

($1,004)

Extinguished Unfunded Commitments

($15)

Unrestricted Cash Balance

$5

New Unfunded Commitments

$111

Issued Letters of Credit

($22)

Net Drawdown of Unfunded Commitments

($81)

Total Liquidity (Pre-Unfunded Commitments)

$654

Total Unfunded Commitments

$367

Available Unfunded Commitments2

($205)

Unavailable Unfunded Commitments2

($161)

Total Liquidity (Burdened for Unfunded Commitments)

$449

Available Unfunded Commitments2

$205

Three Months Ended

(unaudited)

December 31, 2024

September 30, 2024

December 31, 2023

Investments at Fair Value

$

3,518.4

$

3,441.1

$

3,283.1

Total Assets

$

3,582.2

$

3,529.9

$

3,343.8

Net Asset Value Per Share

$

17.16

$

17.12

$

17.04

Supplemental Dividend Per Share

$

0.07

$

0.05

$

0.08

Adjusted Net Asset Value Per Share (1)

$

17.09

$

17.07

$

16.96

Investment Income

$

123.7

$

119.2

$

119.5

Net Investment Income

$

57.6

$

54.9

$

54.7

Net Income

$

51.0

$

40.7

$

51.2

Accrued Capital Gains Incentive Fee Expense

$

(1.0

)

$

(2.2

)

$

(0.7

)

Adjusted Net Investment Income (2)

$

56.6

$

52.7

$

54.0

Adjusted Net Income (2)

$

50.0

$

38.4

$

50.5

Net Investment Income Per Share

$

0.62

$

0.59

$

0.62

Net Income Per Share

$

0.55

$

0.44

$

0.58

Accrued Capital Gains Incentive Fee Expense Per Share

$

(0.01

)

$

(0.02

)

$

(0.01

)

Adjusted Net Investment Income Per Share (2)

$

0.61

$

0.57

$

0.62

Adjusted Net Income Per Share (2)

$

0.54

$

0.41

$

0.58

Annualized Return on Equity (Net Investment Income) (3)

14.4

%

13.7

%

14.7

%

Annualized Return on Equity (Net Income) (3)

12.8

%

10.2

%

13.8

%

Annualized Return on Equity (Adjusted Net Investment Income) (2)(3)

14.2

%

13.2

%

14.5

%

Annualized Return on Equity (Adjusted Net Income) (2)(3)

12.5

%

9.6

%

13.6

%

Weighted Average Yield of Debt and Income Producing Securities at Fair Value

12.3

%

13.1

%

14.1

%

Weighted Average Yield of Debt and Income Producing Securities at Amortized Cost

12.5

%

13.4

%

14.2

%

Percentage of Debt Investment Commitments at Floating Rates

97.2

%

98.8

%

99.7

%

December 31,

December 31,

2024

2023

Assets

Investments at fair value

Non-controlled, non-affiliated investments (amortized cost of $3,450,644 and $3,172,853, respectively)

$

3,453,317

$

3,223,152

Controlled, affiliated investments (amortized cost of $88,509 and $78,159, respectively)

65,095

59,913

Total investments at fair value (amortized cost of $3,539,153 and $3,251,012, respectively)

3,518,412

3,283,065

Cash and cash equivalents (restricted cash of $22,362 and $23,979, respectively)

27,328

25,196

Interest receivable

30,518

27,969

Prepaid expenses and other assets

5,967

7,578

Total Assets

$

3,582,225

$

3,343,808

Liabilities

Debt (net of deferred financing costs of $23,837 and $21,930, respectively)

$

1,901,142

$

1,780,307

Management fees payable to affiliate

12,953

11,962

Incentive fees on net investment income payable to affiliate

12,013

11,451

Incentive fees on net capital gains accrued to affiliate

5,071

10,446

Other payables to affiliate

3,635

2,802

Other liabilities

39,882

30,465

Total Liabilities

1,974,696

1,847,433

Commitments and contingencies (Note 8)

Net Assets

Preferred stock, $0.01 par value; 100,000,000 shares authorized; no shares
   issued and outstanding

—

—

Common stock, $0.01 par value; 400,000,000 shares authorized, 94,325,686
   and 88,493,749 shares issued, respectively; and 93,661,436 and 87,829,499
   shares outstanding, respectively

943

885

Additional paid-in capital

1,519,337

1,405,173

Treasury stock at cost; 664,250 and 664,250 shares held, respectively

(10,459

)

(10,459

)

Distributable earnings

97,708

100,776

Total Net Assets

1,607,529

1,496,375

Total Liabilities and Net Assets

$

3,582,225

$

3,343,808

Net Asset Value Per Share

$

17.16

$

17.04

Year Ended

Year Ended

Year Ended

December 31, 2024

December 31, 2023

December 31, 2022

Income

Investment income from non-controlled, non-affiliated investments:

Interest from investments

$

413,547

$

391,343

$

279,857

Paid-in-kind interest income

29,335

19,679

12,585

Dividend income

11,678

4,181

2,159

Other income

18,525

15,122

9,502

Total investment income from non-controlled, non-affiliated investments

473,085

430,325

304,103

Investment income from non-controlled, affiliated investments:

Interest from investments

—

—

133

Total investment income from non-controlled, affiliated investments

—

—

133

Investment income from controlled, affiliated investments:

Interest from investments

9,428

7,756

5,064

Other income

13

6

5

Total investment income from controlled, affiliated investments

9,441

7,762

5,069

Total Investment Income

482,526

438,087

309,305

Expenses

Interest

154,145

133,731

62,991

Management fees

51,786

46,382

39,900

Incentive fees on net investment income

45,530

42,590

33,401

Incentive fees on net capital gains

(5,375

)

4,382

(8,864

)

Professional fees

7,546

7,323

7,192

Directors’ fees

877

806

736

Other general and administrative

5,522

5,280

5,427

Total expenses

260,031

240,494

140,783

Management and incentive fees waived (Note 3)

(1,466

)

(1,171

)

(427

)

Net Expenses

258,565

239,323

140,356

Net Investment Income Before Income Taxes

223,961

198,764

168,949

Income taxes, including excise taxes

3,944

2,365

2,622

Net Investment Income

220,017

196,399

166,327

Unrealized and Realized Gains (Losses)

Net change in unrealized gains (losses):

Non-controlled, non-affiliated investments

(47,625

)

40,571

(70,085

)

Non-controlled, affiliated investments

—

—

(14,350

)

Controlled, affiliated investments

(5,169

)

(21,717

)

8,054

Translation of other assets and liabilities in foreign currencies

13,379

(6,393

)

8,721

Interest rate swaps

—

174

(6,748

)

Income tax provision

(2,609

)

556

(561

)

Total net change in unrealized gains (losses)

(42,024

)

13,191

(74,969

)

Realized gains (losses):

Non-controlled, non-affiliated investments

9,037

12,095

1,072

Non-controlled, affiliated investments

—

158

13,608

Controlled, affiliated investments

—

—

55

Interest rate swaps

—

—

2,251

Foreign currency transactions

(464

)

180

(291

)

Total net realized gains (losses)

8,573

12,433

16,695

Total Net Unrealized and Realized Gains (Losses)

(33,451

)

25,624

(58,274

)

Increase (Decrease) in Net Assets Resulting from Operations

$

186,566

$

222,023

$

108,053

Earnings per common share—basic and diluted

$

2.03

$

2.61

$

1.38

Weighted average shares of common stock outstanding—basic and diluted

92,035,165

85,131,264

78,197,826

Year Ended

($ in millions)

December 31, 2024

December 31, 2023

December 31, 2022

New investment commitments:

Gross originations (1)

$

15,354.7

$

6,516.6

$

4,240.9

Less: Syndications/sell downs (1)

14,111.8

5,558.0

3,156.7

Total new investment commitments

$

1,242.9

$

958.6

$

1,084.2

Principal amount of investments funded:

First-lien

$

823.9

$

753.4

$

761.7

Second-lien

2.1

8.4

—

Mezzanine

1.1

32.2

—

Equity and other

10.8

12.8

44.8

Structured Credit

1.0

1.6

57.5

Total

$

838.9

$

808.4

$

864.0

Principal amount of investments sold or repaid:

First-lien

$

717.3

$

460.3

$

645.4

Second-lien

—

—

—

Mezzanine

4.9

—

—

Equity and other

13.6

6.0

4.3

Structured Credit

57.9

2.8

4.1

Total

$

793.7

$

469.1

$

653.8

Number of new investment commitments in
   new portfolio companies

34

30

65

Average new investment commitment amount in
   new portfolio companies

$

30.4

$

29.2

$

14.6

Weighted average term for new investment
   commitments in new portfolio companies
   (in years)

6.2

6.0

6.1

Percentage of new debt investment commitments
   at floating rates

87.6

%

99.5

%

98.9

%

Percentage of new debt investment commitments
   at fixed rates

12.4

%

0.5

%

1.1

%

Weighted average interest rate of new
   investment commitments

10.9

%

12.9

%

11.9

%

Weighted average spread over reference rate of new
   floating rate investment commitments

6.4

%

7.6

%

7.8

%

Weighted average interest rate on investments
   fully sold or paid down

13.0

%

13.7

%

9.9

%