Moody’s gives Sixth Street Lending Baa3

Moody's Investors Service said it gave a first-time Baa3 long-term issuer rating to Sixth Street Lending Partners. The outlook is stable. S

SSLP is a business development company that is externally managed by Sixth Street Lending Partners Advisers LLC. This entity is affiliated with the same advisor as Sixth Street Specialty Lending, Inc.

“The Baa3 issuer rating reflects the company's low leverage and largely first-lien-oriented portfolio (94% of the portfolio as of Sept. 30, 2023), which should help limit the company's downside risks and enhance the stability of the company's profitability. SSLP has a leverage target of 0.9x-1.25x debt to equity, which translates into an expected asset coverage ratio (ACR) cushion of at least 20%, based on a minimum required coverage of 150%. This is comparable to most rated BDC peers,” Moody’s said in a press release.

However, SSLP has a short track record since it started doing business in August 2022.

The agency said the stable outlook reflects a forecast for SSLP's portfolio to grow over the next 12 months as it draws down on its outstanding equity commitments at a measured rate.

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