TPG Specialty Lending, Inc. (NYSE:TSLX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 – Entry into a Material Definitive Agreement

On June14, 2018, TPG Specialty Lending, Inc. (“the Company”) issued $50million aggregate principal amount of 4.50% Convertible Notes due 2022 (the “Notes”). The Notes have identical terms, are fungible with and are a part of a single series with the outstanding $115million aggregate principal amount of the Company’s 4.50% Convertible Notes due 2022 issued in February 2017 in a private offering (the “Existing Notes”). The Notes were issued to an indenture, dated February1, 2017 (the “Base Indenture”), as supplemented by a First Supplemental Indenture, dated June19, 2018 (the “First Supplemental Indenture” and together with the Base Indenture, the “Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”). The sale of the Notes generated net proceeds of approximately $49.1million.

The Company has also granted the underwriters an option to purchase up to an additional $7.5million aggregate principal amount of the Notes to cover over-allotments, if any.

The Company today used the net proceeds of this offering to pay down debt under its revolving credit facility.

The Notes mature on August1, 2022 (the “Maturity Date”), unless previously converted or repurchased in accordance with their terms. The Notes bear interest at a rate of 4.50%per year payable semiannually in arrears on February1 and August1 of each year, commencing on August1, 2018. The Notes are the Company’s senior unsecured obligations and rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to the Company’s existing and future indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

Prior to the close of business on the business day immediately preceding February1, 2022, holders may convert their Notes only under certain circumstances set forth in the Indenture. On or after February1, 2022 until the close of business on the scheduled trading day immediately preceding the Maturity Date, holders may convert their Notes at any time. Upon conversion, the Company will pay or deliver, as the case may be, at its election, cash, shares of its common stock or a combination of cash and shares of its common stock. The conversion rate on the Existing Notes when issued in February 2017 was initially 46.8516 shares of common stock per $1,000 principal amount of Existing Notes (equivalent to an initial conversion price of approximately $21.34 per share of common stock). After giving effect to certain adjustments, as of the date hereof, the conversion rate on the Notes is 47.5093 shares of common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $21.05 per share of common stock). The conversion rate will be subject to further adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, if certain corporate events occur prior to the Maturity Date, the conversion rate will be increased for converting holders.

It is the Company’s current intent and policy to settle conversions through a combination of cash and shares of its common stock with a specified dollar amount of $1,000, and the Company expects to account for the Notes using the treasury stock method, the effect of which is that the shares issuable upon conversion of the Notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Notes exceeds their principal amount.

The Company may not redeem the Notes at its option prior to maturity. No sinking fund is provided for the Notes. In addition, if certain corporate events occur in respect of the Company, holders of the Notes may require the Company to repurchase for cash all or part of their Notes at a repurchase price equal to 50% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the required repurchase date.

The Indenture contains certain covenants, including covenants requiring the Company to comply with Section18(a)(1)(A) as modified by Section61(a)(1) of the Investment Company Act of 1940, as amended, and to provide financial information to the holders of the Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.

The Notes were offered and sold to the Registration Statement on Form N-2 (File No.333-223986), the preliminary prospectus supplement filed with the Securities and Exchange Commission on June14, 2018 and the pricing term sheet filed with the Securities and Exchange Commission on June14, 2018. The transaction closed on June19, 2018.

The foregoing description of the Base Indenture, the First Supplemental Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Base Indenture (including the Form of the 4.50% Notes due 2022), filed as an exhibit to the Company’s Current Report on Form 8-K filed on February1, 2017, and the full text of the First Supplemental Indenture, filed as an exhibit hereto, and in each case incorporated by reference herein.

Item 1.01 – Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant

The information set forth under Item 1.01 of this Form 8-K is incorporated herein by reference.

Item 1.01 – Financial Statements and Exhibits

TPG Specialty Lending, Inc. Exhibit
EX-4.1 2 d612351dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 FIRST SUPPLEMENTAL INDENTURE between TPG SPECIALTY LENDING,…
To view the full exhibit click here

About TPG Specialty Lending, Inc. (NYSE:TSLX)

TPG Specialty Lending, Inc. (TSL) is an externally managed, closed-end, non-diversified management investment company. The Company is a specialty finance company focused on lending to middle-market companies. It seeks to generate current income primarily in the United States domiciled middle-market companies through direct originations of senior secured loans and, to a lesser extent, originations of mezzanine loans and investments in corporate bonds and equity securities. It is engaged in direct equity investments, sale of loans and debt and equity securities, and loan origination. The companies in which TSL invests use its capital to support organic growth, acquisitions, market or product expansion and recapitalizations. Its portfolio is invested in over 20 different industries, including healthcare, pharmaceuticals, manufacturing, retail and consumer products, electronics, hotel, gaming and leisure, and financial services. TSL is managed by TSL Advisers, LLC (the Adviser).