Market Overview

KBRA Publishes Rating Report for TPG Specialty Lending, Inc.


On June 28, 2018, Kroll Bond Rating Agency (KBRA) assigned BBB+ issuer
and senior unsecured debt ratings to TPG Specialty Lending, Inc.
("TSLX", "The Company"). The Outlook is Stable.

The BBB+ issuer and senior unsecured debt ratings reflect TPG Specialty
Lending's (NYSE:TSLX) ties to TPG Sixth Street Partners ("TSSP"), the
$24 billion credit and special situations alternative asset manager of
TPG Global ("TPG"), a global asset manager with roughly $84 billion of
assets under management inclusive of TSSP, an investment portfolio
comprised almost exclusively of first lien senior secured investments
and appropriate leverage. Furthermore, the Company has a solid
eight-year historical track record with minimal non-accruals and a
strong management team with decades of experience in middle market
lending and solid risk management practices. These strengths are
counterbalanced by the illiquid nature of the assets and retained
earnings constraints as a Regulated Investment Company (RIC).

Formed in 2010, TPG Specialty Lending is a publicly traded, externally
managed closed-end business development company (BDC) listed on the NYSE
under the symbol TSLX with a market capitalization of $1.2 billion. The
Company's $1.9 billion investment portfolio consists almost entirely of
senior secured first lien debt of private middle-market companies. The
Company benefits from its ability to leverage the scale of its external
manager's $24 billion credit platform.

As of March 31, 2018, TSLX's leverage was 0.8x, within the current
guidelines and appropriate given the investment portfolio's high
percentage of first lien loans. The Company is considering but has not
yet indicated any specific plans to lower asset coverage requirements
following the changes introduced under the Small Business Credit
Availability Act that allows BDCs to effectively double their leverage
limit. KBRA believes if TSLX avails itself to the lower asset coverage,
TSLX will act prudently in increasing its leverage moderately over
several years with a continued emphasis on investing in first lien
loans, the highest debt in the capital structure.

The ratings are based on KBRA's Global
Finance Company Rating Methodology
, published November 28, 2017.

To access the full report, click here.

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
recognized by the National Association of Insurance Commissioners as a
Credit Rating Provider and a certified Credit Rating Agency (CRA) by the
European Securities and Markets Authority (ESMA). Kroll Bond Rating
Agency Europe Limited is registered with ESMA as a CRA.

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