Sixth Street Specialty Lending, Inc. Debt Disclosure
7. Debt
Revolving Credit Facility
On August 23, 2012, the Company entered into a senior secured revolving credit agreement with Truist Bank (as a successor by merger to SunTrust Bank), as administrative agent, and J.P. Morgan Chase Bank, N.A., as syndication agent, and certain other lenders (as amended and restated, the “Revolving Credit Facility”).
As of December 31, 2025, aggregate commitments under the Revolving Credit Facility were $1.675 billion. The Revolving Credit Facility includes an uncommitted accordion feature that allows the Company, under certain circumstances, to increase the size of the Revolving Credit Facility to up to $2.5 billion.
Pursuant to the Fifteenth Amendment dated April 24, 2024, aggregate commitments were increased to $1.7 billion. With respect to $1.505 billion of commitments, the revolving period was extended to April 24, 2028 and the stated maturity was extended to April 24, 2029. For the remaining $195.0 million of commitments, (A) with respect to $25.0 million of commitments, the revolving period ended on February 4, 2025 and the stated maturity is February 4, 2026 and (B) with respect to $170.0 million of commitments, the revolving period ends April 24, 2026 and the stated maturity is April 23, 2027.
Pursuant to the Sixteenth Amendment dated March 4, 2025, with respect to $1.525 billion of commitments, the revolving period, during which period we, subject to certain conditions, may make borrowings under the Revolving Credit Facility, was extended to March 2, 2029 and the stated maturity was extended to March 4, 2030. For the remaining $150.0 million of commitments the revolving period ends April 24, 2026 and the stated maturity is April 23, 2027.
The Company may borrow amounts in U.S. dollars or certain other permitted currencies. As of December 31, 2025, the Company had outstanding debt denominated in Australian dollars (AUD) of 3.0 million, British pounds (GBP) of 48.5 million, Canadian dollars (CAD) of 5.0 million, Swedish Krona (SEK) of 218.0 million and Euro (EUR) of 245.9 million on its Revolving Credit Facility, included in the Outstanding Principal amount in the table below. As of December 31, 2024, the Company had outstanding debt denominated in Australian dollars (AUD) of 63.0 million, British pounds (GBP) of 62.4 million, Canadian dollars (CAD) of 5.0 million, Swedish Krona (SEK) of 80.2 million and Euro (EUR) of 167.2 million on its Revolving Credit Facility, included in the Outstanding Principal amount in the table below.
The Revolving Credit Facility also provides for the issuance of letters of credit up to an aggregate amount of $75 million. As of December 31, 2025 and December 31, 2024 the Company had $21.7 million and $21.8 million outstanding letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit issued through the Revolving Credit Facility.
For the $1.525 billion of commitments, amounts drawn under the Revolving Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either the applicable reference rate plus an applicable credit spread adjustment, plus a margin of either 1.525%, 1.65% or 1.775%, or the base rate plus a margin of either 0.525%, 0.65% or 0.775%, in each case, based on the total amount of the borrowing base relative to the sum of the total commitments (or, if greater, the total exposure) under the Revolving Credit Facility plus certain other designated secured debt. For the remaining $150.0 million of commitments, amounts drawn under the
Revolving Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either the applicable reference rate plus an applicable credit spread adjustment, plus a margin of either 1.75% or 1.875% or the base rate plus a margin of either 0.75% or 0.875%, in each case, based on the total amount of the borrowing base relative to the sum of the total commitments (or, if greater, the total exposure) under the Revolving Credit Facility plus certain other designated secured debt. The Company may elect either the applicable reference rate or base rate at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.325% on undrawn amounts and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then applicable margin while the letter of credit is outstanding.
The Revolving Credit Facility is guaranteed by Sixth Street SL SPV, LLC, TC Lending, LLC and Sixth Street SL Holding, LLC. The Revolving Credit Facility is secured by a perfected first-priority security interest in substantially all the portfolio investments held by the Company and each guarantor. Proceeds from borrowings may be used for general corporate purposes, including the funding of portfolio investments.
The Revolving Credit Facility includes customary events of default, as well as customary covenants, including restrictions on certain distributions and financial covenants. In accordance with the terms of the Sixteenth Amendment, the financial covenants require:
The Revolving Credit Facility also contains certain additional concentration limits in connection with the calculation of the borrowing base, based on the Obligor Asset Coverage Ratio.
Net proceeds received from the Company’s issuance of the 2030 Notes were used to pay down borrowings on the Revolving Credit Facility.
As of December 31, 2025 and December 31, 2024, the Company was in compliance with the terms of the Revolving Credit Facility.
2023 Notes
In January 2018, the Company issued $150.0 million aggregate principal amount of unsecured notes that matured on January 22, 2023 (the “2023 Notes”). The principal amount of the 2023 Notes was payable at maturity. The 2023 Notes bore interest at a rate of 4.50% per year, payable semi-annually commencing on July 22, 2018, and were redeemable in whole or in part at the Company’s option at any time at par plus a “make whole” premium. Total proceeds from the issuance of the 2023 Notes, net of underwriting discounts and offering costs, were $146.9 million. The Company used the net proceeds of the 2023 Notes to repay outstanding indebtedness under the Revolving Credit Facility. The 2023 Notes matured on January 22, 2023 and were fully repaid in cash. The swap transaction associated with the issuance of the 2023 Notes also matured on January 22, 2023.
2024 Notes
In November 2019, the Company issued $300.0 million aggregate principal amount of unsecured notes that matured on November 1, 2024 (the “2024 Notes”). The principal amount of the 2024 Notes was payable at maturity. The 2024 Notes bear interest at a rate of 3.875% per year, payable semi-annually commencing on May 1, 2020, and may be redeemed in whole or in part at our option at any time at par plus a “make whole” premium. Total proceeds from the issuance of the 2024 Notes, net of underwriting discounts, offering costs and original issue discount were $292.9 million. The Company used the net proceeds of the 2024 Notes to repay outstanding indebtedness under the Revolving Credit Facility.
In February 2020, the Company issued an additional $50.0 million aggregate principal amount of unsecured notes that mature on November 1, 2024. The additional 2024 Notes are a further issuance of, fungible with, rank equally in right of payment with and have the same terms (other than the issue date and the public offering price) as the initial issuance of 2024 Notes. Total proceeds from the issuance of the additional 2024 Notes, net of underwriting discounts, offering costs and original issue premium were $50.1 million. The Company used the net proceeds of the 2024 Notes to repay outstanding indebtedness under the Revolving Credit Facility.
During the year ended December 31, 2020, the Company repurchased on the open market and extinguished $2.5 million in aggregate principal amount of the 2024 Notes for $2.4 million. These repurchases resulted in a gain on extinguishment of debt of less than $0.1 million. This gain is included in the extinguishment of debt in the accompanying Consolidated Statements of Operations.
The Company’s 2024 Notes matured on November 1, 2024 and were fully repaid. The corresponding swap transaction associated with the issuance of the 2024 Notes also matured on November 1, 2024.
2026 Notes
In February 2021, the Company issued $300.0 million aggregate principal amount of unsecured notes that mature on August 1, 2026 (the “2026 Notes”). The principal amount of the 2026 Notes is payable at maturity. The 2026 Notes bear interest at a rate of 2.50% per year, payable semi-annually commencing on August 1, 2021, and may be redeemed in whole or in part at the Company’s option at any time at par plus a “make whole” premium. Total proceeds from the issuance of the 2026 Notes, net of underwriting discounts and estimated offering costs, were $293.7 million. The Company used the net proceeds of the 2026 Notes to repay outstanding indebtedness under the Revolving Credit Facility.
In connection with the issuance of the 2026 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $300.0 million, which matures on August 1, 2026, matching the maturity date of the 2026 Notes. As a result of the swap, the Company’s effective interest rate on the 2026 Notes is SOFR plus 2.17%. The interest expense related to the 2026 Notes is offset by proceeds received from the interest rate swaps designated as a hedge. The swap adjusted interest expense is included as a component of interest expense on the Company’s Consolidated Statements of Operations. As of December 31, 2025 and December 31, 2024, the effective hedge interest rate swaps had a fair value of $(5.8) million and $(17.6) million, respectively, which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2026 Notes.
2028 Notes
In August 2023, the Company issued $300.0 million aggregate principal amount of unsecured notes that mature on August 14, 2028 (the “2028 Notes”). The principal amount of the 2028 Notes is payable at maturity. The 2028 Notes bear interest at a rate of 6.95% per year, payable semi-annually commencing on February 14, 2024, and may be redeemed in whole or in part at the Company’s option at any time at par plus a “make whole” premium. Total proceeds from the issuance of the 2028 Notes, net of underwriting discounts, offering costs and original issue discount, were $293.9 million. The Company used the net proceeds of the 2028 Notes to repay outstanding indebtedness under the Revolving Credit Facility.
In connection with the issuance of the 2028 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $300.0 million, which matures on August 14, 2028, matching the maturity date of the 2028 Notes. As a result of the swap, the Company’s effective interest rate on the 2028 Notes is SOFR plus 2.99%. The interest expense related to the 2028 Notes is offset by proceeds received from the interest rate swaps designated as a hedge. The swap adjusted interest expense is included as a component of interest expense on the Company’s Consolidated Statements of Operations. As of December 31, 2025 and December 31, 2024, the effective hedge interest rate swaps had a fair value of $4.5 million and $(1.4) million, respectively, which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2028 Notes.
2029 Notes
In January 2024, the Company issued $350.0 million aggregate principal amount of unsecured notes that mature on March 1, 2029 (the “2029 Notes”). The principal amount of the 2029 Notes is payable at maturity. The 2029 Notes bear interest at a rate of 6.125% per year, payable semi-annually commencing on September 1, 2024, and may be redeemed in whole or in part at the Company’s option at any time at par plus a “make whole” premium. Total proceeds from the issuance of the 2029 Notes, net of underwriting discounts, offering costs and original issue discount, were $341.6 million. The Company used the net proceeds of the 2029 Notes to repay outstanding indebtedness under the Revolving Credit Facility.
In connection with the issuance of the 2029 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $350.0 million, which matures on March 1, 2029, matching the maturity date of the 2029 Notes. As a result of the swap, the Company’s effective interest rate on the 2029 Notes is SOFR plus 2.44%. The interest expense related to the 2029 Notes is offset by proceeds received from the interest rate swaps designated as a hedge. The swap adjusted interest expense is included as a component of interest expense on the Company’s Consolidated Statements of Operations. As of December 31, 2025 and December 31, 2024, the effective hedge interest rate swaps had a fair value of $3.3 million and $(5.2) million, respectively, which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2029 Notes.
2030 Notes
In February 2025, the Company issued $300.0 million aggregate principal amount of unsecured notes that mature on August 15, 2030 (the “2030 Notes”). The principal amount of the 2030 Notes is payable at maturity. The 2030 Notes bear interest at a rate of 5.625% per year, payable semi-annually commencing on August 15, 2025, and may be redeemed in whole or in part at our option at any time at par plus a “make whole” premium. Total proceeds from the issuance of the 2030 Notes, net of underwriting discounts, offering costs and original issue discount, were $293.4 million. The Company used the net proceeds of the 2030 Notes to repay outstanding indebtedness under the Revolving Credit Facility.
In connection with the issuance of the 2030 Notes, the Company entered into an interest rate swap to align the interest rates of its liabilities with the Company’s investment portfolio, which consists of predominately floating rate loans. The notional amount of the interest rate swap is $300.0 million, which matures on August 15, 2030, matching the maturity date of the 2030 Notes. As a result of the swap, the Company’s effective interest rate on the 2030 Notes is SOFR plus 1.53%. The interest expense related to the 2030 Notes is offset by proceeds received from the interest rate swaps designated as a hedge. The swap adjusted interest expense is included as a component of interest expense on the Company’s Consolidated Statements of Operations. As of December 31, 2025, the effective hedge interest rate swaps had a fair value of $8.3 million which is offset within interest expense by an equal, but opposite, fair value change for the hedged risk on the 2030 Notes.
For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the components of interest expense related to the 2023 Notes, 2024 Notes, 2026 Notes, 2028 Notes, 2029 Notes and 2030 Notes were as follows:
|
|
For the Year Ended |
|
|||||||||
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
|
December 31, 2023 |
|
|||
Interest expense |
|
$ |
64,131 |
|
|
$ |
60,116 |
|
|
$ |
29,294 |
|
Accretion of original issue discount |
|
|
1,857 |
|
|
|
1,614 |
|
|
|
899 |
|
Amortization of deferred financing costs |
|
|
3,229 |
|
|
|
3,409 |
|
|
|
2,131 |
|
Total Interest Expense |
|
$ |
69,217 |
|
|
$ |
65,139 |
|
|
$ |
32,324 |
|
Total interest expense in the table above does not include the effect of the interest rate swaps related to the 2023 Notes, 2024 Notes, 2026 Notes, 2028 Notes, 2029 Notes and 2030 Notes. During the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company received $63.9 million, $60.2 million, and $29.5 million, respectively, and paid $80.3 million, $96.7 million and $58.5 million, respectively, related to the settlements of its interest rate swaps related to the 2023 Notes, 2024 Notes, 2026 Notes, 2028 Notes, 2029 Notes and 2030 Notes. These net amounts are included in interest expense in the Company’s Consolidated Statements of Operations. Please see Note 5 for further information about the Company’s interest rate swaps.
As of December 31, 2025, the components of the carrying value of the 2026 Notes, 2028 Notes, 2029 Notes and 2030 Notes and the stated interest rates were as follows:
|
|
December 31, 2025 |
|
|||||||||||||
|
|
2026 Notes |
|
|
2028 Notes |
|
|
2029 Notes |
|
|
2030 Notes |
|
||||
Principal amount of debt |
|
$ |
300,000 |
|
|
$ |
300,000 |
|
|
$ |
350,000 |
|
|
$ |
300,000 |
|
Original issue discount, net of accretion |
|
|
(249 |
) |
|
|
(1,015 |
) |
|
|
(2,207 |
) |
|
|
(3,099 |
) |
Deferred financing costs |
|
|
(436 |
) |
|
|
(2,264 |
) |
|
|
(3,115 |
) |
|
|
(3,461 |
) |
Fair value of an effective hedge |
|
|
(5,785 |
) |
|
|
4,495 |
|
|
|
3,307 |
|
|
|
8,284 |
|
Carrying value of debt |
|
$ |
293,530 |
|
|
$ |
301,216 |
|
|
$ |
347,985 |
|
|
$ |
301,724 |
|
Stated interest rate |
|
|
2.50 |
% |
|
|
6.95 |
% |
|
|
6.13 |
% |
|
|
5.63 |
% |
As of December 31, 2024, the components of the carrying value of the 2026 Notes, 2028 Notes and 2029 Notes and the stated interest rates were as follows:
|
|
December 31, 2024 |
|
|||||||||
|
|
2026 Notes |
|
|
2028 Notes |
|
|
2029 Notes |
|
|||
Principal amount of debt |
|
$ |
300,000 |
|
|
$ |
300,000 |
|
|
$ |
350,000 |
|
Original issue discount, net of accretion |
|
|
(666 |
) |
|
|
(1,357 |
) |
|
|
(2,819 |
) |
Deferred financing costs |
|
|
(1,182 |
) |
|
|
(3,127 |
) |
|
|
(4,093 |
) |
Fair value of an effective hedge |
|
|
(17,618 |
) |
|
|
(1,377 |
) |
|
|
(5,243 |
) |
Carrying value of debt |
|
$ |
280,534 |
|
|
$ |
294,139 |
|
|
$ |
337,845 |
|
Stated interest rate |
|
|
2.50 |
% |
|
|
6.95 |
% |
|
|
6.13 |
% |
The stated interest rate in the table above does not include the effect of the interest rate swaps. As of December 31, 2025, the Company’s swap-adjusted interest rate on the 2026 Notes, 2028 Notes, 2029 Notes and 2030 Notes was SOFR plus 2.17%, 2.99%, 2.44% and 1.53% respectively. As of December 31, 2024, the Company’s swap-adjusted interest rate on the 2026 Notes, 2028 Notes and 2029 Notes was SOFR plus 2.17%, 2.99% and 2.44%, respectively.
As of December 31, 2025, the Company was in compliance with the terms of the indentures governing the 2026 Notes, 2028 Notes, 2029 Notes and 2030 Notes. As of December 31, 2024, the Company was in compliance with the terms of the indentures governing the 2026 Notes, 2028 Notes and 2029 Notes.
In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. As of December 31, 2025 and December 31, 2024, the Company’s asset coverage was 191.5% and 182.5% respectively.
Debt obligations consisted of the following as of December 31, 2025 and December 31, 2024:
|
|
December 31, 2025 |
|
|||||||||||||
|
|
Aggregate |
|
|
Outstanding |
|
|
Amount |
|
|
Carrying |
|
||||
Revolving Credit Facility |
|
$ |
1,675,000 |
|
|
$ |
513,915 |
|
|
$ |
1,139,337 |
|
|
$ |
498,779 |
|
2026 Notes |
|
|
300,000 |
|
|
|
300,000 |
|
|
|
— |
|
|
|
293,530 |
|
2028 Notes |
|
|
300,000 |
|
|
|
300,000 |
|
|
|
— |
|
|
|
301,216 |
|
2029 Notes |
|
|
350,000 |
|
|
|
350,000 |
|
|
|
— |
|
|
|
347,985 |
|
2030 Notes |
|
|
300,000 |
|
|
|
300,000 |
|
|
|
— |
|
|
|
301,724 |
|
Total Debt |
|
$ |
2,925,000 |
|
|
$ |
1,763,915 |
|
|
$ |
1,139,337 |
|
|
$ |
1,743,234 |
|
|
|
December 31, 2024 |
|
|||||||||||||
|
|
Aggregate |
|
|
Outstanding |
|
|
Amount |
|
|
Carrying |
|
||||
Revolving Credit Facility |
|
$ |
1,700,000 |
|
|
$ |
1,004,058 |
|
|
$ |
674,190 |
|
|
$ |
988,624 |
|
2026 Notes |
|
|
300,000 |
|
|
|
300,000 |
|
|
|
— |
|
|
|
280,534 |
|
2028 Notes |
|
|
300,000 |
|
|
|
300,000 |
|
|
|
— |
|
|
|
294,139 |
|
2029 Notes |
|
|
350,000 |
|
|
|
350,000 |
|
|
|
— |
|
|
|
337,845 |
|
Total Debt |
|
$ |
2,650,000 |
|
|
$ |
1,954,058 |
|
|
$ |
674,190 |
|
|
$ |
1,901,142 |
|
For the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the components of interest expense were as follows:
|
|
Year Ended |
|
|
Year Ended |
|
|
Year Ended |
|
|||
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
|
December 31, 2023 |
|
|||
Interest expense |
|
$ |
100,995 |
|
|
$ |
105,155 |
|
|
$ |
95,496 |
|
Commitment fees |
|
|
3,629 |
|
|
|
4,006 |
|
|
|
2,852 |
|
Amortization of deferred financing costs |
|
|
6,743 |
|
|
|
6,903 |
|
|
|
5,245 |
|
Accretion of original issue discount |
|
|
1,857 |
|
|
|
1,614 |
|
|
|
899 |
|
Swap settlement |
|
|
16,333 |
|
|
|
36,467 |
|
|
|
29,239 |
|
Total Interest Expense |
|
$ |
129,557 |
|
|
$ |
154,145 |
|
|
$ |
133,731 |
|
Average debt outstanding (in millions) |
|
$ |
1,880.3 |
|
|
$ |
1,882.7 |
|
|
$ |
1,705.6 |
|
Weighted average interest rate |
|
|
6.2 |
% |
|
|
7.5 |
% |
|
|
7.3 |
% |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.