Sixth Street Specialty Lending Reports Third-Quarter Net Investment Income of $0.44 a Share

The Tip Desk · November 4, 2026 · 3 min read

GAAP net investment income was $0.44 a share in the third quarter, with net income of $0.36 a share and NAV at $16.19.

Sixth Street Specialty Lending (TSLX), a specialty finance company focused on lending to middle-market companies, reported GAAP net investment income of $0.44 a share for the three months ended September 30, 2026, matching adjusted NII of $0.44 a share. GAAP net income was $0.36 a share, down from $0.43 a share in the second quarter.

Annualized return on equity on NII was 10.7% and on net income 8.9%, versus 10.6% and 10.5% in the prior quarter.

Net asset value per share declined to $16.19 from $16.24 at June 30, 2026, after being unchanged in the prior quarter. The company said the movement was driven by tightening credit spreads, a continued recovery in equity market multiples, the reversal of unrealized gains related to paydowns—most of which was recognized through net investment income—and credit-related declines in a small number of investments.

Investment income was $99.0 million, down from $109.4 million a year earlier. The company said the decrease was primarily the result of a decrease in reference rates. Net expenses were $56.2 million, as the weighted average interest rate on debt outstanding fell to 5.7% from 6.3% for the three months ended September 30, 2025, which the company attributed to a change in the mix of debt financing sources and a change in SOFR rates.

New investment fundings were $247 million and paydowns and sales were $160 million, versus $137 million of fundings and $192 million of paydowns and sales in the three months ended June 30, 2026. New investment commitments totaled $241.7 million, up from $114.6 million. Principal funded was $246.5 million across four new portfolio companies, five upsizes and capital called by Structured Credit Partners, LLC; exits and repayments were $159.6 million.

The company had investments in 1,331 portfolio companies as of September 30, 2026, down from 1,372 at June 30, with an aggregate fair value of $3,393.0 million, up from $3,302.1 million. Average investment size rose to $32.21 million from $30.9 million.

Based on fair value, the portfolio consisted of 86.9% first-lien debt, 0.7% second-lien debt, 1.9% mezzanine debt, 5.7% equity, 2.4% structured credit and 2.4% joint venture investments, versus 88.3% first-lien, 4.7% equity, 2.7% structured credit and 1.6% joint venture at June 30.

Investments on non-accrual represented 1.8% of the portfolio at cost and 1.1% at fair value, versus 1.9% and 1.3% at June 30.

The weighted average total yield of debt and income-producing securities at fair value rose to 11.4% from 11.1% at June 30. As of September 30, 97.6% of debt investments based on fair value bore interest at floating rates, with 100.0% of those subject to reference rate floors.

Total debt outstanding was $1,940.5 million, and debt-to-equity at quarter-end was 1.25x. Cash and cash equivalents were $40.5 million, including $35.4 million of restricted cash, with $811.8 million of undrawn capacity on the revolving credit facility. The funding mix was approximately 64% unsecured and 36% secured debt.

The board declared a fourth-quarter 2026 base dividend of $0.42 a share, payable December 31, 2026, and a third-quarter supplemental dividend of $0.01 a share, payable December 21, 2026.