TSLX issues 5m shares

TPG Specialty Lending is selling at an offer price of $16.42 to pay back credit facilities and write new loans.  

Alternative investment firm TPG’s business development company (BDC) has closed on a public offering of five million shares of common stock.

TPG Specialty Lending (TSLX) announced on Tuesday that it would be selling at $16.42 per share, with the proceeds paying down outstanding debt under its revolving credit facility.

It also wants to re-borrow under this credit facility and use the money to make new investments, the firm said.

BofA Merrill Lynch, Wells Fargo Securities, Goldman, Sachs, Barclays and Citigroup were the joint book-running managers for the share offering. The TPG Capital broker-dealer, Ladenburg Thalmann, Comerica Securities, Houlihan Lokey and Santander acted as co-managers.

TSLX is one of few BDCs still trading at a premium to book value. As of Wednesday, the BDC’s stock was trading at about 1.04x to its net asset value (NAV). BDCs trading below book value are usually constrained on issuing new stock, as it dilutes its existing shareholders.

The Ares Capital Corporation (ARCC) sought shareholder permission to issue new equity via a proxy statement filed with the Securities and Exchange Commission last month. The Ares BDC has been trading at a discount to NAV, though ARCC seeks this permission every year. The BDC’s management recently said it would likely use any equity raises to make acquisitions.