Sixth Street Specialty Lending, Inc.

Good morning, and welcome to 6th Street Specialty Lending, Inc.' 's third quarter ended September 30th, 2024 earnings conference call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded on Wednesday, November 6th, 2024. I will now turn the call over to Ms. Kami Van Horn, Head of Investor Relations.

Thank you. Before we begin today's call, I would like to remind our listeners that remarks made during the call may contain forward-looking statements. Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Sixth Street Specialty Lending Inc's filings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements. Yesterday, after the market closed, we issued our earnings press release for the third quarter ended September 30, 2024, and posted a presentation to the Investor Resources section of our website, www.sixthstreetspecialtylending.com. The presentation should be reviewed in conjunction with our Form 10-Q filed yesterday with the SEC. Sixth Street Specialty Lending Inc.' 's earnings release is also available on our website under the Investor Resources section. Unless noted otherwise, all performance figures mentioned in today's prepared remarks are as of and for the third quarter ended September 30th, 2024. As a reminder, this call is being recorded for replay purposes. I will now turn the call over to Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc.

Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty Lending, Inc. Joshua Easterly, Chief Executive Officer at Sixth Street Specialty of this quarter's results, then pass it over to Beau to discuss activity in the portfolio. Ian will review our quarterly financial results in detail, and I will conclude with final remarks before opening the call to Q&A. After the market closed yesterday, we reported third quarter financial results with adjusted net investment income per share of 57 cents, corresponding to an annualized return on equity of 13.2%, and adjusted net income per share of 41 cents, corresponding to an annualized return on equity of 9.6%. As presented in our financial statements, our Q3 net investment income and net income per share, inclusive of the unwind of the non-cash accrued capital gain incentive fee expense, were $0.59 and $0.44, respectively. Our net investment income this quarter continues to reflect impacts on the higher interest rate environment combined with a small increase in activity-based fees. Adjusted net investment income of 57 cents per share exceeded our base quarterly dividend by 11 cents per share, or 23%. Five cents per share was specifically related to activity, which is up from the average of four cents per share that we've experienced since the start of the tightening cycle. Since our last earnings call, the shape of the forward interest rate curve has declined in the near term following the rate cut in September and now bottoms out at a slightly higher terminal rate in 20, in 2026. Based on the latest curve, our base dividend level remains well supported through that terminal rate. As a reminder, our dividend policy is based on the, on our through the cycle earnings power, inclusive of credit losses and absent any activity-based fee income. Rounding out the earnings summary, the 15 cents per share difference between this quarter's net investment income and net income was due to net unrealized losses, primarily from the markdown of our investment in lithium technologies. Consistent with our valuation policy, we have marked this name, taking into account a range of outcomes. We believe the distribution of outcomes has skewed lower since last quarter, and our fairer value mark as of 9-30 reflects the updated view. Given the continued underperformance of this name, we've also added a tonal full status at the beginning of Q3. As for the economic impact, the lithium technology position represents less than 1 percent of our total portfolio fair value. To illustrate the impact on earnings, we assume we were earning approximately 11 percent return on equity on the 30 million of unrealized losses we've recognized to date. This return on equity number is based on the cost of equity from Bloomberg of roughly 9% and our valuation on book value of 1.2 times. An 11% assumed return on equity on 30 million implies less than a penny per share of loss on income on a quarterly basis or 15 basis points annually of ROE. Credit losses are incorporated as part of our base case assumption in our unit economic model. To be clear, the capital we put to work will continue to earn in excess of our cost of equity, inclusive of the potential for losses. This requires discipline in our investment decisions despite the tireless spread environment that persists. According to data published by the LCD, the portion of BDC portfolios based on count was spread below 550 basis points, reached 24% as of Q2 2020. This compares with 7% of our portfolio by count and less than 5% of our portfolio on a weighted average basis as of 9-30, which we view as a more meaningful way to analyze the data. We believe the drastically lower percentage of sub-550 deals in our portfolio underscores our disciplined capital allocation approach. We are confident that our asset selection will continue to drive best-in-class returns for our investors. Our quarter end net asset value was $17.12, down seven cents per share compared to $17.19 per share as of June 30th. Over the last 12 months, reported NAV per share has grown from $16.97 to $17.12. Ian will walk through the net asset bridge in more detail. Yesterday, our board approved a base quarterly dividend of $0.46 per share to shareholders of record as of December 16th, payable on December 31st. Our board also declared a supplemental dividend of 5 cents per share related to our Q3 earnings that shareholders will record as of November 29th, payable on December 20th. Our Q3 2024 net asset value per share adjusted for the impact of the supplemental dividend is $1,707. With that, I'll pass it over to Bo to discuss this board's investment activities.