Sixth Street Specialty Lending, Inc. TSLX
New risk paragraphs, branching off last year
Each branch is a paragraph in Risk Factors with nothing like it in the 10-K filed Feb 13, 2025. A box jumps to the paragraph as filed, below.
Paragraphs with nothing like them in last year's 10-K
24 paragraphs in Risk Factors of the 10-K filed Feb 12, 2026 with nothing like them in the 10-K filed Feb 13, 2025. Quoted exactly. Paragraphs that were only edited are under 10-K change.
common stock and the rights of holders of shares of preferred stock to receive dividends would be senior to those of holders of shares of our common stock.
In the event we default under a credit facility or other borrowings, our business could be adversely affected as we may be forced to sell a portion of our investments quickly and prematurely at what may be disadvantageous prices to us in order to meet our outstanding payment obligations and/or support working capital requirements under such credit facility, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, following any such default, the agent for the lenders under such borrowing facility could assume control of the disposition of any or all of our assets, including the selection of such assets to be disposed and the timing of such disposition, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
A credit facility may be backed by all or a portion of our loans and securities on which the lenders will have a security interest. We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms of any debt instrument we enter into with lenders. We expect that any security interests we grant will be set forth in a pledge and security agreement and evidenced by the filing of financing statements by the agent for the lenders. In addition, we expect that the custodian for our securities serving as collateral for such loan would include in its electronic systems notices indicating the existence of such security interests and, following notice of occurrence of an event of default, if any, and during its continuance, will only accept transfer instructions with respect to any such securities from the lender or its designee. If we were to default under the terms of any debt instrument, the agent for the applicable lenders would be able to assume control of the timing of disposition of any or all of our assets securing such debt, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.
In addition, any security interests and/or negative covenants required by a credit facility may limit our ability to create liens on assets to secure additional debt and may make it difficult for us to restructure or refinance indebtedness at or prior to maturity or obtain additional debt or equity financing. In addition, if our borrowing base under a credit facility were to decrease, we may be required to secure additional assets in an amount sufficient to cure any borrowing base deficiency. In the event that all of our assets are secured at the time of such a borrowing base deficiency, we could be required to repay advances under a credit facility or make deposits to a collection account, either of which could have a material adverse impact on our ability to fund future investments and to make distributions.
In addition, we may be subject to limitations as to how borrowed funds may be used, which may include restrictions on geographic and industry concentrations, loan size, payment frequency and status, average life, collateral interests and investment ratings, as well as regulatory restrictions on leverage which may affect the amount of funding that may be obtained. There may also be certain requirements relating to portfolio performance, including required minimum portfolio yield and limitations on delinquencies and charge-offs, a violation of which could limit further advances and, in some cases, result in an event of default. An event of default under a credit facility could result in an accelerated maturity date for all amounts outstanding thereunder, which could have a material adverse effect on our business and financial condition. This could reduce our liquidity and cash flow and impair our ability to grow our business.
We may invest through joint ventures, partnerships or other special purpose vehicles and our investments through these vehicles may entail greater risks, or risks that we otherwise would not incur, if we otherwise made such investments directly.
We may indirectly invest in broadly syndicated first lien senior secured loans, financed with long-term, non-mark-to-market, and predominantly investment grade rated CLO debt through joint ventures, partnerships or other special purpose vehicles (“Investment Vehicles”), including SCP. Investments in structured credit vehicles, including equity and junior debt instruments issued by CLOs, involve risks, including credit risk and market risk. Changes in interest rates and credit quality may cause significant price fluctuations. Additionally, changes in the underlying leveraged corporate loans held by a CLO may cause payments on the instruments that we indirectly hold to be reduced, either temporarily or permanently. Structured credit investments, particularly the subordinated interests in which we intend to invest, may be less liquid than many other types of securities and may be more volatile than the leveraged corporate loans underlying the CLOs we intend to target. Fluctuations in interest rates may also cause payments on the tranches of CLOs that we hold to be reduced, either temporarily or permanently. In addition, if we are to invest in an Investment Vehicle, we may be required to rely on our partners in the Investment Vehicle when making decisions regarding such
Investment Vehicle’s investments, and accordingly, the value of the investment could be adversely affected if our interests diverge from those of our partners in the Investment Vehicle.
On May 6, 2025, we, the Adviser and certain of our affiliates were granted an exemptive order from the SEC that allows us to co-invest, subject to certain conditions, with certain of our affiliates (including affiliates of Sixth Street) in middle-market loan origination activities for companies domiciled in the United States.
The Company may be restricted from initiating transactions as a result of the receipt of material non-public information.
Sixth Street funds and investment platforms regularly obtain non-public information regarding various target companies and other investment opportunities. In general, Sixth Street imputes non-public information received by one investment team within Sixth Street to all other investment professionals. As Sixth Street and affiliated professionals may acquire confidential or material nonpublic information (“MNPI”), the Company and/or other affiliated funds may be restricted from initiating transactions in certain securities, including, as a result of the receipt of MNPI by another investment team or professional within Sixth Street.
Non-public information received by one investment team within Sixth Street is likely to restrict trading on a firm-wide basis. As a result, the Company may, in certain circumstances, decline to receive non-public information regarding a company.
Further, non-disclosure agreements associated with transactions (including transactions entered into by other affiliated funds) often contain contractual trading restrictions, including standstill and non-circumvent provisions, which could prevent the Company from acquiring or disposing of investments in an issuer, potentially for extended periods. Such agreements could also restrict the Company's ability to share certain information with stockholders relevant to the Company or its portfolio investments. Separately, certain counterparties may disqualify the Company from transacting with such counterparties or their affiliates as a result of the activities of other businesses of Sixth Street and its affiliates.
Legislation has been proposed in the past that could result in significant tax increases and various other changes to U.S. tax rules. It is unclear whether any future legislation will be enacted into law or, if enacted, what form it would take, and it is also unclear whether there could be regulatory or administrative action that could affect U.S. tax rules. The impact of any potential tax changes on an investment in the Company is uncertain. Prospective investors should consult their own tax advisors regarding potential changes in tax laws and the impact on their investment in the Company and the impact on the Company and any potential investments.
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In the current period of technological and commercial innovation, startup and other companies have found success disrupting traditional approaches to industry or market practices, and the frequency of such disruptions is expected to increase. Such disruptions could negatively impact us and our investments, alter market practices on which our investment strategy depends to create investment returns, significantly disrupt the market in which we operate or subject us to increased competition.
Trade negotiations and related government actions may create global supply chain issues and regulatory uncertainty for our portfolio companies and our investment strategy and adversely affect the profitability of our portfolio companies.
The U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made proposals and taken actions related thereto. For example, the U.S. government has imposed, and may in the future further increase, tariffs on certain foreign goods, including from China, such as steel and aluminum. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods. Most recently, the current U.S. presidential administration has imposed or sought to impose significant increases to tariffs on goods imported into the U.S., including from China, Canada and Mexico. Tariffs on imported goods could further increase costs, decrease margins, reduce the competitiveness of products and services offered by
current and future portfolio companies and adversely affect the revenues and profitability of portfolio companies whose businesses rely on goods imported from such impacted jurisdictions.
If we were to create a CLO or other securitization vehicle, we would depend on distributions from the vehicle to pay dividends to our stockholders. The ability of a CLO or other securitization vehicle to make distributions will be subject to various limitations,
movements in the portfolio positions being hedged may vary, as may the time period in which the hedge is effective relative to the time period of the related exposure.
disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:
Rules, regulations and stakeholder expectations concerning sustainability matters have been subject to increased attention and shifting focus in recent years. Some of these changes have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. If we fail or are perceived to fail to comply with applicable rules, regulations and stakeholder expectations, it could negatively impact our reputation and our business results.
In evaluating potential investments, the Adviser considers opportunities and risk related to material sustainability factors. In particular, this analysis includes risks associated with climate change including risks related to the impact of climate-and sustainability-related legislation and regulation (both domestically and internationally), risks related to climate-related business trends, and risks stemming from the physical impacts of climate change. Although the Adviser’s consideration of sustainability factors is intended to aid the Adviser in evaluating the return and risk profile of a given investment and is not expected to by itself determine an investment decision for us, the Adviser’s consideration of sustainability factors could, to the extent material economic risks or opportunities associated with an investment are identified, cause the Adviser to consider taking a different action than may have been taken in the absence of such consideration, which could cause us to perform differently compared to funds or other investors that do not consider such risks and opportunities. Further, although the Adviser views application of its sustainability framework to be an opportunity to potentially enhance or protect the performance of investments over the long-term, the Adviser cannot guarantee that any consideration of sustainability factors or engagement with portfolio companies on sustainability, which depends in part on skill and qualitative judgments, will positively impact the performance of any individual portfolio company or us.
If our practices with respect to our business and the businesses of our portfolio investments do not meet the standards set by investors, they may choose not to invest in our Common Shares. Relatedly, adverse performance or incidents with respect to sustainability matters or negative ratings or assessments could impact the value of our brand, or the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations. Conversely, some stakeholders and regulators have increasingly expressed or pursued opposing views, legislation and investment expectations with respect to sustainability initiatives. This divergence increases the risk that any action or lack thereof with respect to sustainability matters will be perceived negatively by at least some stakeholders and adversely impact our reputation and business.
Paragraphs in the 10-Q filed Nov 3, 2026 that were not in the one before
New in the latest 10-Q
8 paragraphs in the 10-Q filed Nov 3, 2026 with nothing like them in the 10-Q filed Aug 4, 2026 (at least half the words must differ; new numbers alone do not count). Quoted exactly, grouped by the item heading above them. This is text that changed, not a judgement of how serious it is.
Financial statements and notes
5. Derivatives Interest Rate Swaps The Company enters into interest rate swap transactions from time to time to hedge fixed rate debt obligations and certain fixed rate debt investments. The Company’s interest rate swaps are all with one counterparty and are centrally cleared through a registered
Read in the 10-Q
commodities exchange. Refer to the Consolidated Schedule of Investments for additional disclosure regarding these interest rate swaps.
Read in the 10-Q
Cash flows related to the Company's derivatives are included within operating activities on the Consolidated Statements of Cash Flows. The following tables present the amounts paid and received on the Company’s interest rate swap transactions for the three and nine months ended September 30, 2026 and 2025:
Read in the 10-Q
The geographic composition of SCP’s portfolio at fair value as of September 30, 2026 is as follows: September 30, 2026 Amortized Cost Fair Value % of Fair Value ───────────────────────────────────────────────────────────────────────────────────────────────────────────── Australia $ 1,981 $ 2,006 0.1% Austria 2,054 2,044 0.1% Canada 21,334 21,171 1.0% France 10,609 10,619 0.5% Germany 13,422 13,518 0.6% Ireland (1) 885 843 0.0% Luxembourg 24,574 24,686 1.2% Netherlands 23,521 23,636 1.1% United Kingdom 31,300 30,834 1.5% United States 2,008,590 2,006,466 93.9% Total $ 2,138,270 $ 2,135,823 100.0% (1) Value sums to less than 0.1 %. Financial Instruments Not Carried at Fair Value Debt The fair value of the Company’s Revolving Credit Facility, which is categorized as Level 3 within the fair value hierarchy, as of September 30, 2026 and December 31, 2025, approximates its carrying value as the outstanding balance is callable at carrying value. The following table presents the fair value of the Company’s 2026 Notes, 2028 Notes, 2029 Notes, 2030 Notes and 2031 Notes as of September 30, 2026 and December 31, 2025. September 30, 2026 December 31, 2025 Outstanding Fair Outstanding Fair
Read in the 10-Q
The Company's 2026 Notes matured on August 1, 2026 and were fully repaid. The corresponding swap transaction associated with the issuance of the 2026 Notes also matured on August 1, 2026.
Read in the 10-Q
Show the other 3
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 September 30, 2026 and December 31, 2025, the Company’s asset coverage was 180.2% and 191.5%, respectively.
Read in the 10-Q
For the three months ended September 30, 2025, includes 37 structured credit investments with a total principal amount of $98.7 million and a weighted average term of 12.2 years.
Read in the 10-Q
The Company's 2026 Notes matured on August 1, 2026 and were fully repaid. The corresponding swap transaction associated with the issuance of the 2026 Notes also matured on August 1, 2026.
Read in the 10-Q
The 10-Q's risk factors against the 10-K
Item 1A of the 10-Q filed Nov 3, 2026 against Item 1A of the 10-K filed Feb 12, 2026.
A 10-Q repeats only the risks that changed, so a 10-K paragraph that is missing from it is not counted as removed.
Added is a paragraph with nothing like it in the 10-K, Reworded a sentence that is in both with several words changed,
Quiet changes a sentence in both where one to four words changed and one is a hedge or a modal
(cut words struck through, new words highlighted).
Text on the page, not a score; each links to the filing at sec.gov.
This 10-Q has no Item 1A (Risk Factors) text of its own, so there is nothing to compare. Many companies leave it out when their risks have not changed.
Phrases used for the first time
Two-word phrases in Risk Factors of the 10-K filed Feb 12, 2026 that are in none of the 1 earlier 10-Ks stored, back to Feb 13, 2025
Where each one is used
- non-public information: The Company may be restricted from initiating transactions as a result of the receipt of material non-public information.
- sustainability factors: In evaluating potential investments, the Adviser considers opportunities and risk related to material sustainability factors. In particular, this analysis includes risks associated with climate change including risks related to the impact of climate-and sustainability-related legislation and regulation (both...
- borrowing base: In addition, any security interests and/or negative covenants required by a credit facility may limit our ability to create liens on assets to secure additional debt and may make it difficult for us to restructure or refinance indebtedness at or prior to maturity or obtain additional debt or equity financing. In...
- goods imported: The U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made proposals and taken actions related thereto. For...
- sustainability matters: Rules, regulations and stakeholder expectations concerning sustainability matters have been subject to increased attention and shifting focus in recent years. Some of these changes have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time...
- assume control: In the event we default under a credit facility or other borrowings, our business could be adversely affected as we may be forced to sell a portion of our investments quickly and prematurely at what may be disadvantageous prices to us in order to meet our outstanding payment obligations and/or support working...
- debt instrument: A credit facility may be backed by all or a portion of our loans and securities on which the lenders will have a security interest. We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms of any debt instrument we enter into with lenders. We expect that any...
- secure additional: In addition, any security interests and/or negative covenants required by a credit facility may limit our ability to create liens on assets to secure additional debt and may make it difficult for us to restructure or refinance indebtedness at or prior to maturity or obtain additional debt or equity financing. In...
Used at least twice, small words left out. Counted, not picked: a phrase can be new because the company renamed something.
What was taken out
13 paragraphs of last year's Risk Factors with nothing like them now. The longest are quoted.
Sources
Item 1A of each 10-K and 10-Q on EDGAR, quoted exactly. Each paragraph links to the filing at sec.gov.
Also
10-K change: what was reworded or cut, section by section.
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