Spread Tightness
Q: Will spreads remain tight with revived activity?
A: Management believes that as demand picks up, the current tight spreads will largely remain stable due to market equilibrium, though any corrective adjustments will likely be gradual. "

Imbalance Correction
Q: Can market imbalance quickly fix spread compression?
A: They expect the adjustment to be gradual as market signals work through excess capital supply and low M&A activity, with guidance kept conservatively. "

Capital Raising
Q: Is additional capital raising anticipated this year?
A: They plan cautious deployment of new funds and will only raise capital if it meets attractive ROE targets, maintaining leverage around 1.2x. "

Call Protection
Q: Has call protection changed recently?
A: Management reported that call protection remains stable at approximately 93.6%, reflecting consistent structure and underwriting practices across deals. "

Origination Driver
Q: Is TRP Energy a major origination driver?
A: They clarified that TRP Energy was handled as a first lien deal and is not part of a capital solutions strategy, while similar opportunities in the 600–850 basis point range are separately progressing. "

Earnings Model
Q: Why does your model succeed across environments?
A: The strength of their model lies in disciplined credit management, a broad deal funnel, and lower loss rates which consistently keep asset yields high. "

Borrower Preference
Q: Why do borrowers choose Sixth Street?
A: Borrowers favor their offering for its speed, certainty, and flexible capital, making them a trusted partner in both sponsor and non-sponsor markets. "

BDC Expansion
Q: Will the BDC platform expand significantly?
A: The focus remains on growing the overall direct lending business within a diversified platform, rather than aggressively expanding the BDC component alone. "

Portfolio Overlap
Q: What drives the lower portfolio overlap?
A: A greater use of non-sponsored transactions reduces similarity with peers, resulting in significantly lower portfolio overlap. "

Loan Documentation
Q: Are loan documentation standards changing?
A: Documentation and underwriting standards have remained largely consistent over the past 18 months, ensuring a stable credit process. "

Health Risk
Q: Is there health care reimbursement risk present?
A: Their exposure is concentrated in health care tech and pharma, and they do not expect any additional reimbursement risks in the portfolio. "

Borrower Mix
Q: How will borrower mix evolve in 2025?
A: The mix is expected to include both longstanding and new borrowers, balancing existing relationships with fresh market opportunities. "

Partnership Flow
Q: Will partnerships boost TSLX deal flow?
A: Although partnerships like that with First Citizens are in place, management does not expect them to significantly change TSLX’s deal funnel. "

Non-Sponsor Financing
Q: How often is non-sponsored financing expanded?
A: Expansion in non-sponsored financing occurs on a mixed basis, with some opportunities being transitory and others reflecting longer-term relationship enhancements. "

IRG Update
Q: Any update on the IRG asset process?
A: They are actively working on selling the IRG assets and expect to resolve the situation within the next one to two quarters. "