TPG Specialty Lending, Inc. Announces Quarter and Fiscal Year Ended December 31, 2017 Financial Results
Feb 21, 2018
|
Board Declares Quarterly Base Dividend of
The Company announced that its Board of Directors has declared a first
quarter 2018 base dividend of $0.39 per share for stockholders of record
as of March 15, 2018, payable on
The Company’s Board of Directors also approved an extension of its stock repurchase plan (“Company 10b5-1 Plan”) to acquire up to $50 million in the aggregate of TSLX’s common stock at prices just below TSLX’s net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. Unless extended or terminated by its Board of Directors, the Company expects that the stock repurchase plan will be in effect through the earlier of August 31, 2018, or such time as the approved $50 million repurchase amount has been fully utilized, subject to certain conditions. Under the Company 10b5-1 Plan, no shares were repurchased during the fiscal year ended December 31, 2017.
In
| FINANCIAL HIGHLIGHTS: | |||||||||
|
(amounts in millions, except per share amounts) |
|||||||||
| Three Months Ended | |||||||||
| (unaudited) | |||||||||
| December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||
| Investments at Fair Value | $ | 1,693.7 | $ | 1,550.3 | $ | 1,657.4 | |||
| Total Assets | $ | 1,720.2 | $ | 1,581.1 | $ | 1,675.5 | |||
| Net Asset Value Per Share | $ | 16.09 | $ | 16.09 | $ | 15.95 | |||
| Variable Supplemental Dividend Per Share | $ | 0.03 | $ | 0.06 | $ | 0.00 | |||
| Pro Forma Net Asset Value Per Share (1) | $ | 16.06 | $ | 16.03 | $ | 15.95 | |||
| Investment Income | $ | 48.8 | $ | 52.3 | $ | 49.7 | |||
| Net Investment Income | $ | 26.9 | $ | 30.9 | $ | 28.1 | |||
| Net Income | $ | 26.7 | $ | 24.8 | $ | 32.7 | |||
| Net Investment Income Per Share | $ | 0.45 | $ | 0.51 | $ | 0.47 | |||
| Net Realized and Unrealized Gains (and Losses) Per Share | ($ | 0.01 | ) | ($ | 0.10 | ) | $ | 0.08 | |
| Net Income Per Share | $ | 0.44 | $ | 0.41 | $ | 0.55 | |||
| Weighted Average Yield of Debt and Income Producing Securities at Fair Value | 10.7 |
% |
10.7 |
% |
10.4 |
% |
|||
| Weighted Average Yield of Debt and Income Producing Securities at Amortized Cost | 10.8 |
% |
10.8 |
% |
10.4 |
% |
|||
| Percentage of Debt Investment Commitments at Floating Rates (2) | 100.0 |
% |
100.0 |
% |
98.4 |
% |
|||
|
(1) |
Pro Forma Net Asset Value Per Share gives effect to the supplemental dividend declared related to earnings in the applicable period. |
|
|
(2) |
Includes one or more fixed rate investments for which the Company entered into an interest rate swap agreement to swap to floating rate. |
|
Conference Call and Webcast
Conference Call Information:
The conference call will be broadcast live at
Participants are also invited to access the conference call by dialing one of the following numbers:
Domestic: (877) 359-9508
International: +1 (253) 237-1122
Conference
ID: 2777197
All callers will need to enter the Conference ID followed by the # sign and reference “TPG Specialty Lending” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.
Replay Information:
An archived replay will be available from approximately
Domestic: (855) 859-2056
International: +1 (404) 537-3406
Conference
ID: 2777197
Portfolio and Investment Activity
For the three months ended December 31, 2017, gross originations totaled
For the three months ended December 31, 2017, the Company made new
investment commitments of
For the three months ended December 31, 2016, the Company made new
investment commitments of
For the year ended
For the year ended
As of December 31, 2017 and
As of December 31, 2017, the portfolio based on fair value consisted of 93.4% first-lien debt investments, 3.6% second-lien debt investments, and 3.0% equity and other investments. 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, 2017, 100.0% of debt investments based on fair value
in the portfolio bore interest at floating rates (when including
investment specific hedges), with 93.3% 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 and 2023 Notes (issued in
As of December 31, 2017 and
As of December 31, 2017, 100% of the portfolio at fair value was meeting all payment and covenant requirements.
Results of Operations for the Three Months Ended December 31, 2017 compared to the Three Months Ended December 31, 2016
Investment Income
For the three months ended December 31, 2017 and 2016, investment income
totaled
Expenses
Net expenses totaled
Liquidity and Capital Resources
As of December 31, 2017, the Company had
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) | ||||||||
| December 31, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Assets | ||||||||
| Investments at fair value | ||||||||
|
Non-controlled, non-affiliated investments (amortized cost of
$1,523,844
and $1,567,673, respectively) |
$ | 1,557,803 | $ | 1,591,544 | ||||
|
Controlled, affiliated investments (amortized cost of $162,406 and
$100,014,
respectively) |
135,920 | 65,859 | ||||||
|
Total investments at fair value (amortized cost of $1,686,250 and
$1,667,687,
respectively) |
1,693,723 | 1,657,403 | ||||||
| Cash and cash equivalents (restricted cash of $3,150 and $1,088, respectively) | 6,665 | 5,954 | ||||||
| Interest receivable | 6,762 | 9,678 | ||||||
| Receivable for interest rate swaps | — | 69 | ||||||
| Prepaid expenses and other assets | 13,088 | 2,428 | ||||||
| Total Assets | $ | 1,720,238 | $ | 1,675,532 | ||||
| Liabilities | ||||||||
| Debt (net of deferred financing costs of $11,770 and $11,019, respectively) | $ | 703,428 | $ | 680,709 | ||||
| Management fees payable to affiliate | 6,219 | 6,269 | ||||||
| Incentive fees payable to affiliate | 5,628 | 5,889 | ||||||
| Dividends payable | 23,488 | 23,289 | ||||||
| Other payables to affiliate | 1,901 | 1,555 | ||||||
| Other liabilities | 10,290 | 5,609 | ||||||
| Total Liabilities | 750,954 | 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,
60,336,281 and
59,805,285 shares issued, respectively; and 60,247,201 and 59,716,205 shares outstanding, respectively |
603 | 598 | ||||||
| Additional paid-in capital | 906,521 | 898,868 | ||||||
| Treasury stock at cost; 89,080 and 89,080 shares held, respectively | (1,359 | ) | (1,359 | ) | ||||
| Undistributed net investment income | 61,790 | 50,142 | ||||||
| Net unrealized gains | 6,718 | 1,422 | ||||||
| Undistributed net realized gains (losses) | (4,989) | 2,541 | ||||||
| Total Net Assets | 969,284 | 952,212 | ||||||
| Total Liabilities and Net Assets | $ | 1,720,238 | $ | 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) | ||||||||||||
| Year Ended | Year Ended | Year Ended | ||||||||||
| December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
| Income | ||||||||||||
| Investment income from non-controlled, non-affiliated investments: | ||||||||||||
| Interest from investments | $ | 191,288 | $ | 167,819 | $ | 157,964 | ||||||
| Dividend income | 345 | 1,727 | 948 | |||||||||
| Other income | 9,617 | 12,685 | 7,625 | |||||||||
| Total investment income from non-controlled, non-affiliated investments | 201,250 | 182,231 | 166,537 | |||||||||
| Investment income from controlled, affiliated investments: | ||||||||||||
| Interest from investments | 9,443 | 9,975 | 6,638 | |||||||||
| Other income | 204 | 204 | 240 | |||||||||
| Total investment income from controlled, affiliated investments | 9,647 | 10,179 | 6,878 | |||||||||
| Total Investment Income | 210,897 | 192,410 | 173,415 | |||||||||
| Expenses | ||||||||||||
| Interest | 27,441 | 23,108 | 22,010 | |||||||||
| Management fees | 24,287 | 24,253 | 21,276 | |||||||||
| Incentive fees | 25,497 | 22,703 | 20,180 | |||||||||
| Professional fees | 5,431 | 8,446 | 8,166 | |||||||||
| Directors’ fees | 405 | 390 | 381 | |||||||||
| Other general and administrative | 4,827 | 4,382 | 4,830 | |||||||||
| Total expenses | 87,888 | 83,282 | 76,843 | |||||||||
| Management and incentive fees waived | (85 | ) | (430 | ) | (226 | ) | ||||||
| Net Expenses | 87,803 | 82,852 | 76,617 | |||||||||
| Net Investment Income Before Income Taxes | 123,094 | 109,558 | 96,798 | |||||||||
| Income taxes, including excise taxes | 2,835 | 2,225 | 1,500 | |||||||||
| Net Investment Income | 120,259 | 107,333 | 95,298 | |||||||||
| Unrealized and Realized Gains (Losses) | ||||||||||||
| Net change in unrealized gains (losses): | ||||||||||||
| Non-controlled, non-affiliated investments | 10,090 | 44,676 | (17,008 | ) | ||||||||
| Controlled, affiliated investments | 7,668 | (10,994 | ) | (17,217 | ) | |||||||
| Translation of other assets and liabilities in foreign currencies | (11,432 | ) | (3,547 | ) | 6,275 | |||||||
| Interest rate swaps | (1,031 | ) | (333 | ) | (618 | ) | ||||||
| Total net change in unrealized gains (losses) | 5,295 | 29,802 | (28,568 | ) | ||||||||
| Realized gains (losses): | ||||||||||||
| Non-controlled, non-affiliated investments | 7,481 | (772 | ) | (5,042 | ) | |||||||
| Controlled, affiliated investments | (21,776 | ) | — | — | ||||||||
| Interest rate swaps | — | — | 1,851 | |||||||||
| Foreign currency transactions | 350 | 644 | 29 | |||||||||
| Total realized losses | (13,945 | ) | (128 | ) | (3,162 | ) | ||||||
| Total Unrealized and Realized Gains (Losses) | (8,650 | ) | 29,674 | (31,730 | ) | |||||||
| Increase in Net Assets Resulting from Operations | $ | 111,609 | $ | 137,007 | $ | 63,568 | ||||||
| Earnings per common share—basic and diluted | $ | 1.86 | $ | 2.34 | $ | 1.18 | ||||||
| Weighted average shares of common stock outstanding—basic and diluted | 59,995,387 | 58,591,380 | 54,006,322 | |||||||||
The Company’s investment activity for the years ended December 31, 2017, 2016, and 2015 is presented below (information presented herein is at par value unless otherwise indicated).
| For the Year Ended December 31, | ||||||||||||
| ($ in millions) | 2017 | 2016 | 2015 | |||||||||
| New investment commitments: | ||||||||||||
| Gross originations | $ | 2,251.5 | $ | 761.5 | $ | 964.2 | ||||||
| Less: Syndications/sell downs | 1,178.9 | 198.8 | 245.5 | |||||||||
| Total new investment commitments | $ | 1,072.6 | $ | 562.7 | $ | 718.7 | ||||||
| Principal amount of investments funded: | ||||||||||||
| First-lien | $ | 958.9 | $ | 518.0 | $ | 581.3 | ||||||
| Second-lien | — | — | 40.6 | |||||||||
| Mezzanine and unsecured | — | 2.1 | 23.3 | |||||||||
| Equity and other | 30.4 | — | 18.8 | |||||||||
| Total | $ | 989.3 | $ | 520.1 | $ | 664.0 | ||||||
| Principal amount of investments sold or repaid: | ||||||||||||
| First-lien | $ | 906.0 | $ | 316.2 | $ | 353.3 | ||||||
| Second-lien | 15.7 | 72.1 | 27.0 | |||||||||
| Mezzanine and unsecured | 11.5 | 23.7 | 4.9 | |||||||||
| Equity and other | 18.3 | 4.5 | — | |||||||||
| Total | $ | 951.5 | $ | 416.5 | $ | 385.2 | ||||||
| Number of new investment commitments in new portfolio companies |
22 | 14 | 20 | |||||||||
| Average new investment commitment amount in new portfolio companies |
$ | 39.2 | $ | 35.2 | $ | 31.6 | ||||||
| Weighted average term for new investment commitments in new portfolio companies (in years) |
4.8 | 4.3 | 5.0 | |||||||||
| Percentage of new debt investment commitments at floating rates (1) |
100.0 | % | 99.6 | % | 95.2 | % | ||||||
| Percentage of new debt investment commitments at fixed rates |
— | 0.4 | % | 4.8 | % | |||||||
| Weighted average interest rate of new investment commitments |
9.5 | % | 9.1 | % | 8.9 | % | ||||||
| Weighted average spread over LIBOR of new floating rate investment commitments |
8.3 | % | 8.3 | % | 8.3 | % | ||||||
| Weighted average interest rate on investments sold or paid down |
9.5 | % | 8.6 | % | 10.0 | % | ||||||
| (1) | Includes one or more fixed rate investments for which the Company entered into an interest rate swap agreement to swap to floating rate. | |
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/20180221006382/en/
Source:
Investors:
TPG Specialty Lending, Inc.
Lucy Lu, 212-601-4753
IRTSL@tpg.com
or
Media:
TPG
Specialty Lending, Inc.
Luke Barrett, 212-601-4752
lbarrett@tpg.com
or
Press:
Owen
Blicksilver PR, Inc.
Jennifer Hurson, 845-507-0571
jennifer@blicksilverpr.com