Joshua Easterly - Chairman and Co-Chief Executive Officer Michael Fishman - Co-Chief Executive Officer Alan Kirshenbaum - Chief Financial Officer.

Derek Hewett - Bank of America Merrill Lynch Rick Shane - JPMorgan Jonathan Bock - Wells Fargo Securities Terry Ma - Barclays Capital Doug Mewhirter - SunTrust Robinson Humphrey.

Good morning and welcome to the TPG Specialty Lending, Inc. September 30, 2014 Quarterly Earnings Conference Call. Before we begin today’s call, I’d like to remind our listeners that remarks made during the call may contain forward-looking statements.

Statements other than statements of historical facts made during this call may constitute forward-looking statements and are not guarantees of the future performance or results and involve a number of risks and uncertainties.

Actual results may differ materially from those in forward-looking statements as a result of numbers of factors, including those described from time-to-time in the TPG Specialty Lending Inc.’s filings with the Securities and Exchange Commission. The Company assumes no obligation to update any such forward-looking statements.

For a slide presentation that the Company intends to refer to on the earnings conference call, please visit the Events and Presentation link on the Investor Resource section of the Company’s website, www.tpgspecialtylending.com and click the Investor Presentation link.

TPG Specialty Lending Inc.'s earnings release is also available on the Company’s website under the Investor Resource section. As a reminder, this call is being recorded for replay purposes. I'll now turn the call over to Joshua Easterly, Co-Chief Executive Officer and Chairman of the Board of TPG Specialty Lending. Please go ahead..

Thank you, Ashley. First of all, let me apologize. I'm kind of fighting a cold this morning. But good morning everyone and thank you for joining us today. I’m joined here by Mike Fishman, my partner and Co-Chief Executive Officer; Alan Kirshenbaum, our CFO, and our Investor Relations team.

Yesterday, after the market closed, we issued our quarterly earnings press release for the third quarter ending September 30, 2014 and we posted a supplemental earnings slide presentation in the Investor Resources section of our website. The earnings presentation should be reviewed in connection with our Form 10-Q filed yesterday with the SEC.

We will refer to the earnings presentation throughout the call today. I’ll begin today with a brief overview of our quarterly highlights and then turn the call over to Mike to discuss our origination and portfolio metrics. Alan will then discuss our quarterly financial results in more detail.

Then I’ll conclude with final remarks and our outlook for market conditions before we open the call to Q&A. With that, I’m pleased to report strong originations and financial results for the third quarter. Net investment income per share was $0.43 for the third quarter 2014 as compared to $0.55 per share for the second quarter 2014.

The quarter-over-quarter difference in net investment income of $0.12 per share was largely attributable to an elevated level of revenues during the prior quarter period related to full investment paydowns.

As we discussed on last quarter’s call, we do expect some level of these revenues on a recurring basis, although not at the level seen in the second quarter. Net income per share was $0.35 for the third quarter of 2014 as compared to $0.51 per share for the second quarter.

Net asset value per share as of September 30, was $15.56 as compared to $15.70 as of June 30, 2014.

Alan will walk you through these quarter-over-quarter differences in great detail, but at a high level, these variances were largely attributable to the impact on the fair value of our investment portfolio of widening market spreads and changes in credit risk asset prices during the quarter.

As we announced on the last quarter’s call, our Board of Directors declared a third quarter dividend of $0.38 per share payable to shareholders of record as of September 30th, which we paid on October 31st. During the third quarter, we over-earned our dividend on a net investment income basis by $0.05 per share.

On a year-to-date basis, we’ve over-earned our dividends on a net investment income basis by $0.28 per share and on net income basis by $0.22 per share based on weighted average shares outstanding during the nine-month period. We over-earned our dividend for the full year ended September 31, 2013 and 2012 as well.

As a result, I’m pleased to announce that our Board of Directors have declared a fourth quarter dividend of $0.39 per share, a $0.01 per share increase versus the prior quarter to shareholders of record as of December 31, 2014 payable on or about January 31, 2015.

As discussed on our last quarterly call, our Board established a dividend policy reflective of the high quality earnings power of our franchise over the intermediate term and a level that can be consistently earned and which maximizes cash dividends to our investors.

Finally, subsequent to quarter end, we favorably amended the terms of our revolving credit facility, including reducing pricing and extending the final maturity, which Alan will detail. Diversifying and enhancing our liabilities remains a key strategic focus.

As of September 30th, TSL had over 675 million of undrawn commitments under its existing credit facility for future investments. We believe this liquidity positions the Company well into 2015 in light of a strong pipeline of new investment opportunities coupled with our high degree of investment flexibility.

With those highlights, I’d like to turn the call over to Mike who will walk you through our origination and portfolio metrics in more detail..

Thanks, Josh. Q3 was a strong originations quarter for us with gross originations over 288 million. We syndicated 40 million of these originations resulting in new investment commitments of approximately 248 million. These investments were distributed across four new portfolio companies and four upsizings of existing portfolio companies.

Of the 248 million of new investment commitments made during the quarter, 224 million was funded. Over the last four quarters we have generated average quarterly fundings of over 196 million.

We believe that our ability to provide flexible, fully underwritten financing solutions and to hold sizable positions is a key competitive advantage benefiting both our borrowers and our investors. Through our direct originations efforts, we’ve originated over 96% of investments through non-intermediated channels.

This enables us to control the documentation and investment structuring process and to maintain effective voting control in over 90% of our investments. During the third quarter we exited commitments totaling 110 million due to the full paydowns of four investments.

This level of repayments is consistent with our average quarterly repayments over the past four quarters of 100 million. Since inception through September 30th, we've generated a gross unlevered IRR of 16.2% and fully exited investments totaling over 730 million of cash invested.

And as Alan will discuss in greater detail, during the third quarter we generated economics as a result of these full paydowns. Our average quarterly net funded activity is approximately 96 million based upon the past four quarters. As of September 30th, our portfolio totaled 1.23 billion at fair value compared to 1.13 billion at June 30.

86% of investments by fair value were first lien and 99% of the investments by fair value were secured. Our investment process is predicated on mitigating both credit and non-credit risks. Non-credit risks include interest rate, foreign currency and reinvestment risk.

On the last quarterly call we discussed at length the reinvestment protection embedded in our portfolio in the form of call protection on over 99% of investments. We mitigate interest [risk] [Ph] and foreign currency risk by match funding our assets and liabilities.

Approximately 98% of our investments are floating rate subject to interest rate floors. And because we’ve swapped our convertible notes from fixed to floating, 100% of our liabilities are floating rate with no floors. When we fund investments and currencies other than U.S.

dollars, we borrow on our credit facilities in local currency as this provides a natural hedge against foreign currency fluctuations. The weighted average total yield on our debt and other income producing securities at amortized cost at September 30th was 10.6% versus 10.5% at June 30th and 10.6% at September 30, 2013.

The weighted average yield on new investments in new portfolio companies made during the quarter was 11.5% at amortized cost. These stable portfolio yields are attributable to our ability to originate and structure non-intermediated investment opportunities. The portfolio is broadly distributed across 31 portfolio companies and 19 industries.

Our average investment size is approximately 40 million and our largest position accounts for 6.3% of the portfolio at fair value.

Our largest industry exposures were to healthcare and pharmaceutical, primarily healthcare information technology with no direct reimbursement risk which accounted for 16.2% of the portfolio at fair value, and oil and gas and consumable fuels which accounted for 9.9% of the portfolio at fair value.

More specifically, oil, gas and consumable fuels represented two investments in upstream exploration and production companies, with strong collateral coverage on long-lived proven reserves without development risk that are significantly hedged against commodity price risk.

At this later point in the economic cycle we continue to target industries with low exposure to cyclicality and the ability to perform throughout credit cycles. Consistent with the last quarter, as of September 30th, we had no investments on non-accrual status.

At quarter end over 97% of our investments by fair value were meeting all covenant and payment requirements. As was made public in October, our single Category 4 investment was acquired by a strategic investor that valued the company at over 157 million, implying a loan to value on our investment of approximately 22%.

TSL received 100% of our principal plus a call premium upon full repayment of our investment. With that, I'd like to turn it over to Alan to discuss our quarterly results in more detail..

Alan Kirshenbaum:.

Thanks, Alan. And again, I apologize, I'm fighting a cold. But Q3 was a strong quarter from an originations and earnings perspective. And as Alan discussed, we continue to focus on the liabilities side of our balance sheet, favorably amending the terms of our revolving credit facility last month.

During the third quarter, the [liquid] [Ph] market began to see a reversal of inflows that have characterized the last three years. While 96% of our portfolio is classified as Level III, illiquid investments, for which there is no observer or market price, our illiquid portfolio is not isolated from broader changes in risk premiums.

In compliance with BDC, and [RIC] [Ph] requirements, we fair value the portfolio on a quarterly basis taking into account, among other inputs, changes in credit spreads and other risk asset prices. Q3 was the first quarter in over two years in which both first lien and second lien loan spreads widened meaningfully quarter-over-quarter.

During the quarter, LCD first lien composite spreads increased by 34 basis points and LCD second lien composite spreads increased by 33 basis points. That being said, given that we are a control lender with operating and financial covenants, we believe the expected duration of our portfolio mitigates some of the broader risk premium volatility.

We believe that our pipeline for directly originated investments and investment opportunities with strong risk-adjusted return characteristics is robust.

And while we are not changing our investment focus or a disciplined portfolio construction, during periods of market dislocation such as what we've seen here in early part of Q4, we will opportunistically invest in on-the-run credits with favorable risk/reward characteristics.

These are opportunities in which our ability to navigate complexity by leveraging our platform and significant resources for sector and market expertise enables us to form a differentiated view on intrinsic value.

As Mike discussed, we believe that our practice for match funding our assets and liabilities, coupled with our late-cycle sector perspective, positions the portfolio well throughout economic cycles, consistent with our long-term focus.

We remain steadfast in our portfolio construction discipline and believe that our focus on downside protection and generating a high quality of risk-adjusted returns is ever important.

As previously stated, we believe that return on equity coupled with the quality and risk profile of our portfolio, both based where we invest in the capital structure and interest rate risk as the appropriate measure for our ability to generate high quality risk adjusted returns over the long-term.

For the three months ended September 30, 2014, we generated an annualized ROE of 11% based on net investment income and an annualized ROE of 8.9% based on net income. And for the nine months ended September 30, 2014 we generated an annualized ROE based on net investment income of 12.8% and an annualized ROE based on net income of 12.6%.

Based on our current asset level yields, as we continue to leg in our target leverage ratio, supported by a strong pipeline of new investment opportunities, our target return on equity is 10.5% to 12% over the intermediate term.

This compares to our annualized dividend yield at book value of 9.7% for September 30th and 10% annualizing the recently announced Q4 dividend level. A few final points in closing.

In August we filed a shelf registration statement and completed secondary offering on behalf of a subset of our pre-IPO shareholders who have owned shares of the Company since our initial private capital phase. No shares of the Company’s common stock were sold by the Company or its affiliates and we did not receive any proceeds from this offering.

Prior to this offering in August, we solicited interest from over 95% of our pre-IPO investors who agreed to trading restrictions. These investors collectively held approximately 40 million pre-IPO shares, 20 million of which would have come off lock-up in September per the terms of the IPO lock-up.

Of the 20 million shares, only 5 million were tendered for sale in August at a market price [$19.01 [Ph].

Importantly, in connection with the offering, all selling shareholders and the majority of non-selling pre-IPO shareholders including our 19 largest pre-IPO shareholders have modified and extended the lock-up periods for certain of their pre-IPO shares.

Officers and directors of the company and the Adviser have also extended the terms of their lock-ups.

As a result of these new lock-ups, 4.2 million pre-IPO shares became tradable in September 2014, 1.7 million became tradable in October and the remaining 34 million shares held by pre-IPO shareholders remain under various staggered lock-up periods through April 2015.

Including the secondary offering and subsequent share lock-up releases, nearly 11 million pre-IPO shares have become tradable.

We’ve seen minimal increases in average daily trading volume as a result of these releases and believe at the current price level, the perceived overhang associated with the release and lock-up of pre-IPO shares has effectively been addressed.

Lastly, although we currently trade above book value, given the volatility in stock price of the BDC sector, much of which currently trades below book value, our Board has approved the Company to buy back up to 50 million of our common stock over a six-month period through a 10b5-1 stock repurchase plan.

This Company 10b5-1 plan, which will be effectuated on an algorithmic basis at threshold prices beginning just below our net asset value, for example this quarter $15.65.

And in addition at the time of our IPO my TPG partners and I through TSL Advisers agreed to purchase up to 25 million of common stock through a 10b5-1 stock repurchase plan on an algorithmic basis based on threshold prices beginning just below net asset value.

The Adviser’s 10b5-1 plan, which doesn’t reduce the share count, remains in place through December 31, 2014 and will be administered by the agent in tandem with the Company’s stock repurchase program at identical threshold price levels.

In certain periods of market dislocation, and if we were to trade below book value, the marginal returns from re-investing in our existing portfolio may exceed the reinvestment yields and return on capital that can be obtained in the prevailing investment environment.

In those circumstances, we believe it is in the best interest of our investors as well as the Company to reinvest through share repurchases in our existing portfolio which we believe to be appropriate fair valued and of high quality and gets us to our target leverage ratio quicker.

In a different market environment in which we can earn higher multiples of return on invested capital via non-call features or warrants, we may conclude that even if we were to trade below book value, there is greater value growing the portfolio by making new investments rather than reinvesting in our existing portfolio.

To be clear, we do not believe that we are in this latter market environment. On behalf of myself, Mike and Alan and our Investor Relations team, thank you for your continued interest in TSL and for your time today. Ashley, you can open up the line for questions..

Thank you. (Operator Instructions) Our first question comes from Ken Bruce of Bank of America Merrill Lynch. Your line is open..

Derek Hewett for Ken Bruce. I guess, for a start-off, another strong quarter. But could you guys talk a little bit about credit spreads that were on new originations? Looks like they were meaningfully higher than the existing portfolio.

And my question is, was the spread variance more macro related to what we're seeing in the leverage lending loan market at this time or was it more Company specific? And then, more importantly, kind of, what is your outlook for spreads over the next eight to 12 months or so?.

So I’ll take a shot at it and then I’ll turn it over to the team. Look, we've said this many times. We do three to five new deals a quarter. They’re idiosyncratic and so you can’t extrapolate new origination spread across the environment.

My sense is that in the middle market spreads widening in broader market kind of – or tightening are slow to flow through to the middle market, so my sense is it wasn't a -- based on broader risk premiums across other asset classes because we compete against funds who raise private capital, who are less sensitive to broader market spreads and BDCs who’ve raised capital that feel like they may need to put it to work.

So the new investment spreads, I think which were about 11.5% on the amortized cost, which was higher than the existing portfolio at 10.5% at amortized cost, was just really a function of the idiosyncratic nature of this quarter's origination..

And I think to add to what Josh said, many of the investments that we funded in Q3 we've been working on three months, maybe up to six months. Obviously there is a lag, credit spreads were different back then.

So it's hard to say in any given quarter the yield reflecting what's going on at that every moment especially when it's compared to the liquid loan market.

And also given the fact and I'll just reiterate that ultimately we look at a lot of opportunities every quarter and we do search what we believe are the best risk returns and those risk returns are distilled down to a very small handful of deals, three to five, as Josh mentioned, where we believe we can get very good risk returns..

I think your second question was about what we perceive as the spread environment going forward. Spreads have come in since the beginning of Q4. In Q4 they widened. They've kind of come in a little bit.

My sense is, when you look at the BDC space with a lot of people trading below book value and having an implied higher cost of equity, hopefully that flows through to the spread environment, act as a rational as it relates to the cost of capital. I'm not completely wedded to that, but hopefully that does.

So, if the current spread environment continues to prevail, and a lot of our competitors are trading at below book value and have higher cost of capital, I would hope to see that would flow through to higher asset level prices for issuers.

Although again in the middle market, things are kind of slower to develop, both when things widen and both when things tighten.

Is that helpful Derek?.

Thank you. Our next question comes from Rick Shane of JP Morgan. Your line is open..

My primary question is about what you guys are seeing with spreads.

But I'd love to hear what you think about the new CLO rules and how that may impact the competitive environment as well?.

So I think like everybody, we're working through [indiscernible] example. For us the CLO rules don't affect us in the sense that we don't have a captive CLO manager in a drop down structure under our BDC.

And when we use CLO technology, we use CLO technology only as a financing mechanism where we’d meet the risk retention rules anyways because we would hold all the equity. I think the rules now would require the effectively [manager][Ph] hold 51% or a strip of 5% across the capital structure.

I think the rules are -- I'm probably going to get in trouble for saying this, unfortunately, I think the regulators probably got the rules slightly wrong in that when you look at the asset class of CLOs and liabilities they perform very, very well over the cycle versus other structured products in RMBS or resi.

So I think generally they got the rules wrong, but I think it was probably a function of the regulatory environment and what people perceived to be a leverage lending bubble and how to slow that bubble down. It surely wasn't related to the performance of those underlying assets in the 2008 cycle.

I think the rules generally people are going to work through, I think BDCs who have captive capital will be easier to meet the risk retention rules.

So I think it might on the margin be an opportunity -- it really depends on how do traditional CLO managers figure out how to navigate those rules and those risk retention rules which I think is still early stage.

Is that helpful, Rick?.

It is and I appreciate your candor on your comment about the [Inaudible] – your interpretation as well, so thank you..

Thank you. Our next question comes from Jonathan Bock of Wells Fargo Securities. Your line is open..

Good morning and thank you for taking my questions and congratulations on a outstanding quarter. So maybe a few questions as it relates to the income statement. When we look at other income from non-controlled, non-affiliated entities, generally, Josh, you've mentioned this is part of a syndication maybe fees you'd get from selling assets to others.

And I believe last quarter you sold roughly $42 million worth of or syndicated $42 million worth of assets and generated fees of roughly around $800,000. Yet today, I think the same amount of syndication, $40 million or so and please correct me if I'm wrong, and that number is now over $3.3 million.

Can you give us a sense of the volatility and/or the stability in that amount and in that syndication revenue coming off from selling your assets or portions of your assets to others?.

Alan, syndication revenue in Q2 - was the syndication revenue in Q2, was that related to other fees or amendment fees?.

1Q and 3Q..

So there was no syndication revenue in Q2, Jonathan. So generally what you – so that was probably other revenue related to amendment fees or agency fees or other type of fees like that. Generally we are not in the distribution business, right. So we are in the buy and hold business.

There’s opportunities where we can distribute paper and generally we originate at a cost basis somewhere between 97 and 98 and able to sell between 99 and par.

And so on $140 million because you have to take it - the rules require you to take it across your entire position if it's an arm's length trade at close, effectively that's 2 points across $140 million, that’s $2.8 million for example. And so that revenue will be I would say lumpy.

But we've only generated, we've only kind of done four or five of those transactions, and as our balance sheet gets bigger my guess is that will be a [growth] [Ph] line item in the future that shareholders get the benefit of given our origination platform.

So if you don't have a direct origination platform, you don't have the ability to capture any of those revenue line items for your shareholders. And all such fees and revenue line items go to our shareholders..

I guess maybe another question to ask is given that it was a good $0.06, thereabouts, which was rather meaningful in relation to dividend, how do you think about the dividend policy that you've set the new one relative to some of these, we'll call them recurring, but non-recurring types of line items similar to syndication fees.

How is that, and is it baked into a steady run rate view of what you'll be earning off the portfolio?.

Yes. So the better way to do it is go bottoms up basis. Just to talk about portfolio, right. When you think about our portfolio, let's take our portfolio amortized cost at 10.6%. And at 10.6%, that is our cash earnings portfolio ex-LIBOR curve, so no LIBOR curve, and on a full maturity.

So our average life portfolio, our average life is really only probably two and a half years or three years when you work all the way through it.

So if that 10.6% reflects 2 points upfront, which typically is more in our portfolio, and the portfolio is not five years but two and half years, that means the yield at amortized cost -- the yield ex-fees, ex-prepayment fees is about 11.6%.

So no syndication fees, no prepayment fees and no -- and this is how we think about the kind of the earnings power of our business on an ongoing basis, about 11.6%. At 11.6% at a target debt to equity ratio of 0.6% to 0.75%, what you find is that the portfolio will generate a net levered return between 15.5% and 17% pre-fees.

Post fees, that's about 10.5% to 11.5%. So that's excluding -- that's just basically pure normal course upfront fees, normal course spread at our target leverage excluding our prepayment fees and the syndication fees. And at that level, we are over-earning our dividend, which is 10% of book value.

What you've seen this year, just to continue to go through, and the unit economics page can be found on our website on, I think maybe even on Wells Fargo presentation that we made, which is -- but what you will find about this year is that we ran historically under-levered because we've had more churn in our portfolio.

More churn in our portfolio -- it creates accelerated amortized OID and prepayment fees and those additional embedded economics that are in our existing portfolio, even though we have ran under-levered, we have actually been able to generate a 12.6% return on equity based on that investment income.

And so the portfolio is a little interesting, at least how we're set up is, if we don’t have churn in our portfolio, it makes it easier to get to our target leverage ratio given our $150 million to $200 million in gross origination. If we do have churn in our portfolio, the embedded economics are realized, which means we out-earn ROE.

So we kind of get there one way or another. The other way to look at this is on the earnings debt, you can look at fair value of our portfolio based on the current call price for an issuer and you see that on Page 6 and that fair value is about 93.8%. And so, as our portfolio gets called away, we generate significantly outsized economics.

If our portfolio doesn’t get called away, we’re able to run close or above our optimized leverage, then the spread economics of the business we out-earn our dividend yield at book value.

Is that helpful?.

That's more than helpful. That's excellent. And then just a small addition to it, when we think about earnings and then we also translate to, maybe we'll call it tangible cash. I believe there's roughly $6 million worth or so -- and, Alan, please correct me if I'm wrong -- of DRIP that's occurring to-date.

And I would imagine from a cash -- I'm sorry -- about $4 million. So I'd imagine that there's an inherent cash benefit given that on a $19 million, $20 million dividend stream, having $4 million of which now is being paid in cash is actually something that's meaningful.

How do you see that number trending? And how do you view the operating unit - the operations of the business from a cash perspective in the event that more of those shareholders will be looking to convert DRIP to cash or if that's -- I'm just curious how you're thinking about that because that's a benefit that you have.

And I'm wondering if it will stay similar or what your plans are if it's not at that same level?.

There is obviously two benefits in the DRIP. The first benefit is, that cash dividend is being financed through a DRIP, so it’s not a source of cash or effectively it round trips because it comes back into equity.

That’s a marginal benefit to us and quite frankly it’s a little bit of a yield as it relates to our unit economics a little as a hindrance because we’re effectively issuing new equity which allows us -- it puts more pressure on us slowly legging into our leverage. $4 million is not a big deal.

The bigger benefit of that, because we’ve been trading above book value, is that it is accretive to existing shareholders and added about penny to NAV. So, my sense is, you probably have industry stats better than us, 25 – 4 million out of $20 million was in the DRIP.

That effectively is probably higher than everybody else, so probably on a higher range. We have a benefit of I think that reflects our long term shareholders, some of them that are institutional that are no longer liabilities and are not cash taxpayers, so they don’t have phantom income.

So, I think that, and quite frankly there is a benefit for those holders of the DRIP as well because they effectively get stock issued at 95% of the prevailing price just as long as it's above book value. So, liquidity doesn’t make that much of an impact. It impacts our ability to get -- we're effectively issuing $4 million worth of shares.

So it impacts our ability to get leg in the leverage on a marginal basis and on margin basis it adds net asset value per share..

Thank you. (Operator Instructions) Our next question comes from Terry Ma of Barclays. Your line is open..

I think most of my questions have been answered already.

But, can you maybe just talk about how the investment environment in fourth quarter is shaping up in the context of the two scenarios you just outlined, either reaching your optimal leverage range and achieving your target ROE or maybe having outsized returns from increased churn? And also, can you just comment on whether or not the recent dislocation in the credit markets have changed your approach to underwriting investments?.

The recent dislocation hasn’t changed our approach to underwriting investments. As we’ve said, we were a little bit opportunistic at the beginning of Q4 where on companies we knew and people were looking [derisk] [Ph] we took advantage of that price as we liked. That was a very, very small portion of what we do in our portfolio.

But that dislocation at the beginning of Q4, I think, wasn’t consistent with our backdrop of the macro. And when you look at the macro, 60% plus of company’s beat earnings estimates, GDP for Q3 was 3.5% versus 3% and so the macro backdrop in the U.S. was still pretty good. So, we leaned in a little bit where we could take advantage.

I think Q4, we’re what, one month into Q4? It's probably going to be a pretty consistent quarter for us, which is we'll have, it seems like, again, we're early but it feels like we have a nice pipeline in that when you look at historically what we've done, we've added about $100 million of net portfolio growth per quarter and that's usually $200 million of gross originations and $100 million of payouts.

And that $100 million payout does provide additional embedded economics. So I think it's probably a little bit more of what people have seen..

Thank you. Our next question comes from Doug Mewhirter of SunTrust. Your line is open..

Most of my questions have been answered. Just have two - one broader, one more specific. It appears that there was a little bit of a ripple that went through the leverage funding market and maybe the upper middle market.

Has that, I guess, changed The, and I know you cast a very, very wide net when you look for opportunities and you really only need four or five loans every quarter to sort of make your budget, so to speak.

But has that changed the types of opportunities that you've seen sponsored versus un-sponsored or various sectors where maybe companies are more amenable to financing or actually they've actually pulled back because spreads have widened? Any color on that would be appreciated..

I mean, again, these things are slower to ripple through the middle market, generally speaking. But we haven't changed our investment process or our approach to market, our approach is to predominantly originate and find our own transactions where we can control the underwriting and control economics that flow through the benefit of our shareholders.

And so our approach hasn't changed. Again, we're a little opportunistic at the beginning of Q4 on things we knew very well or the franchise has known very well given the breadth and depth of the TPG franchise. But we really haven't changed our process or strategy and you really haven’t seen companies pull financings in the marketplace.

And to put this in real context, spreads were out 30 to 50 basis points, broader loans were down somewhere between 1 point and 3 points. It surely wasn't the end of the world, but there was a little bit of fear and we took a little bit advantage of that at the beginning of Q4..

And the only thing I'd add just on the general investing environment, I think from our perspective, we see a subset of what's going on, but we see given where the equity markets are and the valuation, we're seeing on a weighted basis less new money platform acquisitions, more either sponsor or non-sponsor owned strategic acquisitions and we've seen them as new money deals where a strategic is making an acquisition.

Also, we've seen a lot of activity in our existing portfolio where there are opportunities to do additional acquisitions and our portfolio is becoming -- continues to become a very good source of the originations activity for us..

My second question actually deals with a specific company. In early October, Metalico put out a press release that showed how they had restructured their debt. They issued a new convert and it looked like -- and they had unnamed senior lenders who sort of changed the terms of the loan and gained extra fees and warrants and such.

And I realized that there is some sensitivity around the fact this is a public company and that you may know more than other people may know. But was this sort of -- I guess first of all, I assume that the loan is still performing and they never missed a payment.

And the second question was, was this sort of in the range of your scenarios or expectations when you originally financed the company?.

So Metalico, and look, we're really obviously sensitive given that we're subject to confi so I'll speak on what's in the public domain. It was in the range of our outcomes. Metalico, when you look at their balance sheet, they're very asset rich.

We feel very comfortable where we fit in the capital structure and the amount of assets, both working capital assets and quite frankly we only need a limited amount of other assets which, machine and equipment, to repay us. We feel very comfortable. Obviously the balance sheet is public. We're a senior secured lender.

And what we received in the Metalico restructuring, which was we received a fee, effectively a fee note that was convertible -- a secured fee note that was convertible at our option into equity with a strike price of I think around $0.91 or something like that. And so there is a lot of embedded optionality given the cyclical nature of that business.

And then on the downside, you can look at the company's balance sheet and you can look at the amount of assets they have. And so we feel very comfortable and it was never in a -- there was never a liquidity or payment concern..

Thank you. I am not showing any further questions in queue. I'd like to turn the call back over to management for any further remarks..

Great. Once again, thank you for your interest and support in TSLX. We look forward to speaking with you again next quarter and hope to see many of you at upcoming industry conferences. And if I don’t connect with people before then, I wish people a happy Thanksgiving and a holiday season. I think today is vote day.

So, if you're inclined, get out and vote or exercise your right not to vote. But I think it’s the second Tuesday in November or the first Tuesday in November. So I appreciate your time. Thanks..

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day..