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What does Sixth Street Specialty Lending do and what are its main business segments?

**Key Takeaways**
- **Leadership Evolution**: Co-CEO transition formalizes existing collaboration, maintaining Sixth Street's investor-first culture.
- **Financial Resilience**: Q3 NII of $0.53 per share (12.3% ROE) with 114% dividend coverage, outperforming peers with NAV stability.
- **Strategic Differentiation**: Thematic investments (e.g., Walgreens ABL, Velocity Clinical) drive alpha, with 700bps new floaters vs. peers' 549bps.
- **Market Outlook**: BDC sector facing capital misallocation; SLX poised to benefit from disciplined underwriting and thematic sourcing.
- **Liquidity & Capital Management**: 1.15x debt-to-equity, $1.1B unfunded capacity, and $1.30 per share undistributed income for accretive deployment.

**【CEO Summary Section】**
- **Leadership Transition**: Robert Stanley named Co-CEO, effective immediately, with Joshua Easterly stepping down as CEO at year-end. Sixth Street's 25-year partnership ensures continuity.
- **Q3 Financials**: Adjusted NII of $0.53 per share (12.3% annualized ROE) and adjusted net income of $0.46 per share (10.8% annualized ROE). Base dividend of $0.46 and supplemental dividend of $0.03 declared.
- **Performance vs. Peers**: NAV grew 1.9% since 2022 rate hikes vs. 8.5% decline for peers. 22% of portfolio pre-2022 vintage vs. 56% for peers, positioning for rate cycle.
- **Market Outlook**: BDC sector facing capital misallocation, with dividend cuts likely. SLX maintains 114% dividend coverage, outperforming peers with NAV stability.

**【CFO Financial Commentary】**
- **Balance Sheet**: Total investments $3.4B, net assets $1.6B ($17.11 per share). Debt-to-equity ratio 1.15x, down from 1.2x. Unfunded revolver capacity $1.1B.
- **Liquidity & Capital Management**: No ATM issuance; disciplined approach to retain capital for accretive deployment. Undistributed income $1.30 per share, managed to avoid excise taxes.
- **Expense Management**: Interest expense decline to 6.1% WAC, benefiting from floating-rate liability structure. Operating expenses down 5% YoY.

**【Q&A Highlights】**
- **Investment Strategy**: 4 thematic off-the-run transactions ($388M commitments), including Walgreens ABL and Velocity Clinical Research. CLO liabilities ($100M) deployed at 554bps spread, liquid and accretive.
- **Credit Quality**: 1.12 average credit rating (1-5 scale), 0.6% of portfolio on non-accrual. Conservative covenants (0.3x attach, 5.2x detach) and 2.3x interest coverage.
- **Prepayment Activity**: $303M repayments Q3, 75% via refinancing at 325-525bps spreads. Activity-based fee income $0.14 per share vs. 3-year average $0.08.
- **Market Trends**: Elevated competition, spread compression (700bps new floaters vs. peers' 549bps). Structured credit team deploys $16B+ in CLOs with 27.1% IRR track record.
- **AI Impact**: Software portfolio unaffected; AI reduces dev costs but doesn't erode data/moat-based competitive advantages. Thematic focus on durable data moats continues.

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