Sixth Street Specialty Lending Income Drops on Lower Reference Rates
Net investment income per share fell to $0.43 in the second quarter of 2026.
Sixth Street Specialty Lending (TSLX), the specialty finance company, reported a decline in net investment income per share to $0.43 for the second quarter of 2026.
The result followed a downward trend in earnings and a slowdown in new capital deployment. Net investment income per share had been $0.53 in the prior quarter and $0.54 in the same period a year ago.
Total investment income fell to $97.8 million, down from $108.2 million in the prior quarter and $115.0 million in the second quarter of 2025. The decline was primarily due to a decrease in reference rates compared to the prior year.
Investment activity slowed during the period. New investment commitments totaled $114.6 million, a decrease from the $338.1 million committed in the first quarter of 2026. First-lien debt investments as a percentage of fair value also decreased to 88.3% from 89.3% as of March 31.
Annualized return on equity on net investment income declined to 10.6%. This compared to 12.5% in the prior quarter and 12.7% in the second quarter of 2025. Net asset value per share remained unchanged at $16.24.
The company's leverage increased as the debt-to-equity ratio rose to 1.27x from 1.18x at the end of the prior quarter. The weighted average interest rate on outstanding debt rose slightly to 5.6% from 5.5%.
Credit quality remained stable, with non-accrual status as a percentage of the portfolio at fair value decreasing to 1.3% from 1.4%.
Sixth Street completed an amendment to its Revolving Credit Facility on May 1, 2026, extending the maturity date to May 1, 2031, for $1.525 billion of commitments. Subsequent to the quarter-end, the company repaid $300 million of unsecured notes due August 1, 2026.