UPDATE: JMP Securities Initiates Coverage on TPS Specialty Lending on Fair Valuation

In a report published Tuesday, JMP Securities analyst Christopher York initiated coverage on

with a Market Perform rating. In the report, JMP Securities noted, “We are initiating coverage of shares of TPG Specialty Lending Inc. (TSLX) with a Market Perform rating, as we believe shares are fairly valued after providing a total return close to 18% since the IPO. In our opinion, there is a lot to like about this newly public business development company (BDC) that completed a 7.0 million share IPO on March 20, 2014 and represents the 49th publicly traded issue in the emerging BDC investment vehicle within the alternative investment space. "Through its advisory relationship with TPG, access to a global investment platform, and some of the largest investment hold sizes among BDCs, we believe TPG Lending should be a leading beneficiary of reduced bank lending competition in the middle market from the flexibility to act as either a first lien lender or to be a lead/agent in structuring a UniTranche loan and potentially arranging a ‘last out' structure. TPG Lending's almost exclusive focus on senior secured credits should provide investors with attractive, risk-adjusted returns at current cash yields of ~10 -11% through ample subordination, meaningful call protection, and enhanced risk mitigation.” TPG Specialty Lending closed on Monday at $18.43.