TPG Specialty Lending, Inc. Announces Quarter Ended September 30, 2017 Financial Results; Board Declares Quarterly Base Dividend of $0.39 Per Share for the Fourth Fiscal Quarter of 2017 and a Quarterly Variable Supplemental Dividend of $0.06 Per Share
Nov 07, 2017
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The Company announced that its Board of Directors has declared a fourth
quarter base dividend of $0.39 per share for stockholders of record as
of December 15, 2017, payable on January 12, 2018. The Company’s Board
of Directors also declared a third quarter variable supplemental
dividend of
| FINANCIAL HIGHLIGHTS: | ||||||||||||||||||
|
(amounts in millions, except per share amounts) |
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| Three Months Ended | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| September 30, 2017 | June 30, 2017 | September 30, 2016 | ||||||||||||||||
| Investments at Fair Value | $ | 1,550.3 | $ | 1,554.5 | $ | 1,643.6 | ||||||||||||
| Total Assets | $ | 1,581.1 | $ | 1,589.1 | $ | 1,665.2 | ||||||||||||
| Net Asset Value Per Share | $ | 16.09 | $ | 16.15 | $ | 15.78 | ||||||||||||
| Investment Income | $ | 52.3 | $ | 58.8 | $ | 53.9 | ||||||||||||
| Net Investment Income | $ | 30.9 | $ | 33.9 | $ | 30.6 | ||||||||||||
| Net Income | $ | 24.8 | $ | 31.8 | $ | 36.9 | ||||||||||||
| Net Investment Income Per Share | $ | 0.51 | $ | 0.57 | $ | 0.51 | ||||||||||||
| Net Realized and Unrealized Gains (and Losses) Per Share | ($ | 0.10 | ) | ($ | 0.04 | ) | $ | 0.11 | ||||||||||
| Net Income Per Share | $ | 0.41 | $ | 0.53 | $ | 0.62 | ||||||||||||
| Weighted Average Yield of Debt and Income Producing Securities at Fair Value | 10.7 | % | 10.7 | % | 10.3 | % | ||||||||||||
| Weighted Average Yield of Debt and Income Producing Securities at Amortized Cost | 10.8 | % | 10.8 | % | 10.3 | % | ||||||||||||
| Percentage of Debt Investment Commitments at Floating Rates (1) | 100.0 | % | 100.0 | % | 97.9 | % | ||||||||||||
| (1) | Includes one or more fixed rate investments for which the Company entered into an interest rate swap agreement to swap to a floating rate. | |
Conference Call and Webcast
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International: +1 (253) 237-1122
Conference
ID: 83689623
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International: +1 (404) 537-3406
Conference
ID: 83689623
Portfolio and Investment Activity
For the three months ended
For the three months ended September 30, 2017, the Company made new
investment commitments of
For the three months ended September 30, 2016, the Company made new
investment commitments of
As of September 30, 2017 and
As of September 30, 2017, the portfolio based on fair value consisted of 93.2% first-lien debt investments, 4.0% second-lien debt investments, and 2.8% equity and other investments. As of December 31, 2016, the portfolio based on fair value consisted of 96.5% first-lien debt investments, 1.2% second-lien debt investments, 0.6% mezzanine and unsecured debt investments, and 1.7% equity and other investments.
As of September 30, 2017, 100.0% of debt investments based on fair value in the portfolio bore interest at floating rates (when including investment specific hedges), with 92.4% of these subject to interest rate floors. The Company’s credit facilities also bear interest at floating rates. In connection with the Company’s Convertible Senior Notes, which bear interest at fixed rates, the Company 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.
As of
As of
Results of Operations for the Three Months Ended September 30, 2017 compared to the Three Months Ended September 30, 2016
Investment Income
For the three months ended September 30, 2017 and 2016, investment
income totaled
Expenses
Net expenses totaled
Liquidity and Capital Resources
As of
The Company is rated BBB- with stable outlook by both
Financial Statements and Tables
| TPG Specialty Lending, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (Amounts in thousands, except share and per share amounts) | ||||||||
| (Unaudited) | ||||||||
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Assets | ||||||||
| Investments at fair value | ||||||||
|
Non-controlled, non-affiliated investments (amortized cost of
$1,386,657
and $1,567,673, respectively) |
$ | 1,417,358 | $ | 1,591,544 | ||||
|
Controlled, affiliated investments (amortized cost of $158,460 and
$100,014,
respectively) |
132,922 | 65,859 | ||||||
|
Total investments at fair value (amortized cost of $1,545,117 and
$1,667,687,
respectively) |
1,550,280 | 1,657,403 | ||||||
| Cash and cash equivalents (restricted cash of $2,647 and $1,088, respectively) | 8,118 | 5,954 | ||||||
| Interest receivable | 7,918 | 9,678 | ||||||
| Receivable for interest rate swaps | 674 | 69 | ||||||
| Prepaid expenses and other assets | 14,076 | 2,428 | ||||||
| Total Assets | $ | 1,581,066 | $ | 1,675,532 | ||||
| Liabilities | ||||||||
| Debt (net of deferred financing costs of $12,587 and $11,019, respectively) | $ | 564,558 | $ | 680,709 | ||||
| Management fees payable to affiliate | 5,995 | 6,269 | ||||||
| Incentive fees payable to affiliate | 6,561 | 5,889 | ||||||
| Dividends payable | 23,428 | 23,289 | ||||||
| Other payables to affiliate | 3,572 | 1,555 | ||||||
| Other liabilities | 10,209 | 5,609 | ||||||
| Total Liabilities | 614,323 | 723,320 | ||||||
| Commitments and contingencies | ||||||||
| 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,
60,188,435 and
59,805,285 shares issued, respectively; and 60,099,355 and 59,716,205 shares outstanding, respectively |
602 | 598 | ||||||
| Additional paid-in capital | 905,725 | 898,868 | ||||||
| Treasury stock at cost; 89,080 and 89,080 shares held, respectively | (1,359 | ) | (1,359 | ) | ||||
| Undistributed net investment income | 58,866 | 50,142 | ||||||
| Net unrealized gains | 7,116 | 1,422 | ||||||
| Undistributed net realized gains (losses) | (4,207 | ) | 2,541 | |||||
| Total Net Assets | 966,743 | 952,212 | ||||||
| Total Liabilities and Net Assets | $ | 1,581,066 | $ | 1,675,532 | ||||
| Net Asset Value Per Share | $ | 16.09 | $ | 15.95 | ||||
| TPG Specialty Lending, Inc. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (Amounts in thousands, except share and per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
|
September 30, |
September 30, |
September 30, |
September 30, |
|||||||||||||
| Income | ||||||||||||||||
| Investment income from non-controlled, non-affiliated investments: | ||||||||||||||||
| Interest from investments | $ | 45,354 | $ | 44,088 | $ | 148,023 | $ | 124,931 | ||||||||
| Dividend income | — | 474 | — | 1,421 | ||||||||||||
| Other income | 3,502 | 6,767 | 7,982 | 8,909 | ||||||||||||
| Total investment income from non-controlled, non-affiliated investments | 48,856 | 51,329 | 156,005 | 135,261 | ||||||||||||
| Investment income from controlled, affiliated investments: | ||||||||||||||||
| Interest from investments | 3,398 | 2,537 | 5,914 | 7,288 | ||||||||||||
| Other income | 51 | 51 | 153 | 152 | ||||||||||||
| Total investment income from controlled, affiliated investments | 3,449 | 2,588 | 6,067 | 7,440 | ||||||||||||
| Total Investment Income | 52,305 | 53,917 | 162,072 | 142,701 | ||||||||||||
| Expenses | ||||||||||||||||
| Interest | 5,498 | 6,102 | 20,017 | 17,029 | ||||||||||||
| Management fees | 5,995 | 6,212 | 18,043 | 17,953 | ||||||||||||
| Incentive fees | 6,561 | 6,467 | 19,808 | 16,761 | ||||||||||||
| Professional fees | 1,211 | 3,029 | 4,268 | 6,923 | ||||||||||||
| Directors’ fees | 100 | 98 | 302 | 290 | ||||||||||||
| Other general and administrative | 1,371 | 897 | 3,984 | 3,211 | ||||||||||||
| Total expenses | 20,736 | 22,805 | 66,422 | 62,167 | ||||||||||||
| Management and incentive fees waived | — | (149 | ) | — | (346 | ) | ||||||||||
| Net Expenses | 20,736 | 22,656 | 66,422 | 61,821 | ||||||||||||
| Net Investment Income Before Income Taxes | 31,569 | 31,261 | 95,650 | 80,880 | ||||||||||||
| Income taxes, including excise taxes | 640 | 690 | 2,270 | 1,615 | ||||||||||||
| Net Investment Income | 30,929 | 30,571 | 93,380 | 79,265 | ||||||||||||
| Unrealized and Realized Gains (Losses) | ||||||||||||||||
| Net change in unrealized gains (losses): | ||||||||||||||||
| Non-controlled, non-affiliated investments | (564 | ) | 13,660 | 6,831 | 28,657 | |||||||||||
| Controlled, affiliated investments | (4,680 | ) | (6,898 | ) | 8,617 | (7,048 | ) | |||||||||
| Translation of other assets and liabilities in foreign currencies | (1,701 | ) | (1,367 | ) | (10,359 | ) | 436 | |||||||||
| Interest rate swaps | (1,682 | ) | (462 | ) | 605 | 1,103 | ||||||||||
| Total net change in unrealized gains (losses) | (8,627 | ) | 4,933 | 5,694 | 23,148 | |||||||||||
| Realized gains (losses): | ||||||||||||||||
| Non-controlled, non-affiliated investments | 2,413 | 1,516 | 7,008 | 1,920 | ||||||||||||
| Controlled, affiliated investments | — | — | (21,776 | ) | — | |||||||||||
| Foreign currency transactions | 44 | (145 | ) | 557 | (49 | ) | ||||||||||
| Total realized gains (losses) | 2,457 | 1,371 | (14,211 | ) | 1,871 | |||||||||||
| Total Unrealized and Realized Gains (Losses) | (6,170 | ) | 6,304 | (8,517 | ) | 25,019 | ||||||||||
| Increase in Net Assets Resulting from Operations | $ | 24,759 | $ | 36,875 | $ | 84,863 | $ | 104,284 | ||||||||
| Earnings per common share—basic and diluted | $ | 0.41 | $ | 0.62 | $ | 1.42 | $ | 1.79 | ||||||||
| Weighted average shares of common stock outstanding—basic and diluted | 60,057,567 | 59,523,695 | 59,923,323 | 58,229,549 | ||||||||||||
The Company’s investment activity for the three months ended
| Three Months Ended | ||||||||
| ($ in millions) | September 30, 2017 | September 30, 2016 | ||||||
| New investment commitments: | ||||||||
| Gross originations | $ | 501.2 | $ | 318.1 | ||||
| Less: Syndications/sell downs | 142.2 | 123.9 | ||||||
| Total new investment commitments | $ | 359.0 | $ | 194.2 | ||||
| Principal amount of investments funded: | ||||||||
| First-lien | $ | 325.4 | $ | 190.4 | ||||
| Second-lien | — | — | ||||||
| Mezzanine and unsecured | — | — | ||||||
| Equity and other | 3.5 | — | ||||||
| Total | $ | 328.9 | $ | 190.4 | ||||
| Principal amount of investments sold or repaid: | ||||||||
| First-lien | $ | 330.1 | $ | 174.9 | ||||
| Second-lien | — | 7.8 | ||||||
| Mezzanine and unsecured | — | 16.3 | ||||||
| Equity and other | 0.8 | 0.2 | ||||||
| Total | $ | 330.9 | $ | 199.2 | ||||
|
Number of new investment commitments in new portfolio companies |
7 | 6 | ||||||
|
Average new investment commitment amount in new portfolio companies |
$ | 40.9 | $ | 32.4 | ||||
|
Weighted average term for new investment commitments in new portfolio companies (in years) |
5.0 | 5.3 | ||||||
|
Percentage of new debt investment commitments at floating rates |
100.0 | % | 100.0 | % | ||||
|
Percentage of new debt investment commitments at fixed rates |
— | — | ||||||
|
Weighted average interest rate of new investment commitments |
9.2 | % | 9.7 | % | ||||
|
Weighted average spread over LIBOR of new floating rate investment commitments |
7.9 | % | 8.7 | % | ||||
|
Weighted average interest rate on investments sold or paid down |
9.2 | % | 8.0 | % | ||||
About
TSLX is a specialty finance company focused on lending to middle-market
companies. The Company seeks 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 and equity
securities. The Company has elected to be regulated as a business
development company, or a BDC, under the Investment Company Act of 1940
and the rules and regulations promulgated thereunder. TSLX is externally
managed by
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements,”
which relate to future events or the Company’s future performance or
financial condition. These statements are not guarantees of future
performance, conditions or results and involve a number of risks and
uncertainties. Actual results may differ materially from those in the
forward-looking statements as a result of a number of factors, including
those described from time to time in the Company’s filings with the
View source version on businesswire.com: http://www.businesswire.com/news/home/20171107006746/en/
Source:
TPG Specialty Lending, Inc.
Investors:
Lucy Lu, 212-601-4753
IRTSL@tpg.com
or
Media:
Luke
Barrett, 212-601-4752
lbarrett@tpg.com
or
Press:
Owen
Blicksilver PR, Inc.
Jennifer Hurson, 845-507-0571
jennifer@blicksilverpr.com