Sixth Street Specialty Lending Reports Strong Q2 Earnings with $0.56 Per Share Adjusted Net Investment Income

Sixth Street Specialty Lending Inc (TSLX) reported strong Q2 2025 earnings with adjusted net investment income of $0.56 per share, an annualized return on equity of 13.1%, and net income of $0.64 per share, with an annualized return on equity of 15.1%. Net asset value per share increased by 70 basis points to $17.17, and total economic return was 42.6%, outperforming public BDC peers. The company's weighted average spread on new first lien investments was 6.5%, higher than the public BDC sector average. Total commitments and fundings were $289 million and $209 million, respectively, and total repayments were $389 million, contributing to strong activity-based fee income.

Sixth Street Specialty Lending Inc. (TSLX) has reported robust financial results for the second quarter of 2025, underscoring its strong performance in the specialty lending sector. The company's adjusted net investment income per share stood at $0.56, representing an annualized return on equity of 13.1%, and net income per share reached $0.64, with an annualized return on equity of 15.1% [1].

The company's net asset value per share increased by 70 basis points to $17.17, reflecting a total economic return of 42.6% during the quarter. This performance significantly outperformed public business development companies (BDCs) [1].

Notably, the weighted average spread on new first lien investments was 6.5%, which is higher than the average spread in the public BDC sector. Total commitments and fundings for the quarter amounted to $289 million and $209 million, respectively, while total repayments were $389 million, contributing to strong activity-based fee income [1].

The company's management has highlighted the stabilization of credit quality, allowing it to focus on maintaining strong dividend coverage and differentiated investment sourcing. This strategic shift is evident in the company's continued disciplined approach to capital allocation and robust fee income from elevated repayment activity [1].

In contrast, OFS Capital Corporation (Nasdaq: OFS) reported a decrease in net investment income and net asset value per share in the second quarter of 2025, with net investment income decreasing to $0.25 per share and net asset value per share decreasing to $10.91 [2].

Despite the challenges in the muted M&A environment and potential for declining portfolio yields, Sixth Street Specialty Lending Inc. remains confident in its ability to maintain strong performance and outperform peers in the sector [1].

References:
[1] https://seekingalpha.com/news/4476269-sixth-street-specialty-lending-signals-robust-dividend-coverage-and-anticipates-sustained
[2] https://www.marketscreener.com/news/ofs-capital-corporation-announces-second-quarter-2025-financial-results-ce7c5fddd08eff21