Sixth Street Specialty Lending has put in place a program that allows it to sell up to $100 million of common stock over time through five investment banks. The arrangement gives the lender a way to raise equity when it chooses; it does not commit the company to sell shares or raise the full amount.
The company can use proceeds for general corporate purposes, including making investments or paying down borrowings.
Key details
- Maximum size: The company may sell up to $100 million of stock in total under the program.
- Sales agents: RBC Capital Markets, Truist Securities, Citizens JMP Securities, Keefe, Bruyette & Woods, and Raymond James will handle sales. The company may sell shares through the banks or to them as buyers.
- Price floor: For sales through the at-the-market program, the price after sales-agent commissions or discounts must be at least the company’s net asset value per share at the time of sale.
- Fees: The banks may receive commissions of up to 1.5% of the gross sale price.
- Use of proceeds: Net proceeds may go toward investments consistent with the company’s objectives, other general corporate needs, or repayment of outstanding debt. Debt repayments may be reborrowed.
- No required sales: The company can decide whether and when to sell shares, based in part on market conditions, its stock price and its need for capital. It can also suspend the program.
Plain-English implications
The program adds a potential source of equity capital, but it does not itself change the company’s outstanding share count: shares are issued only if and when sales occur. The NAV-based price floor means the company cannot make at-the-market sales for net proceeds below NAV per share.