TICC’s Delay in Scheduling its Annual Meeting Demonstrates
TICC’s Appalling Governance Practices
TICC Chairman’s Significant Wealth Accumulation and Failure to
Purchase TICC Shares for Four Years Shows Shocking Lack of
Alignment Between the Board and Stockholder Interests
TPG Specialty Lending, Inc. (“TSLX”; NYSE:TSLX), a specialty
finance company focused on lending to middle-market companies, sent
a letter to the Board of Directors of TICC Capital Corp., (“TICC”;
Nasdaq: TICC) urging the TICC Board to address fundamental issues
regarding the future of TICC on the earnings call scheduled for May
3, 2016.
This Smart News Release features multimedia.
View the full release here:
http://www.businesswire.com/news/home/20160502005607/en/
Net Asset Value per Share Destruction at
TICC (Graphic: Business Wire)
TSLX encourages interested stakeholders to visit the website,
www.changeTICCnow.com, to view other materials relating to TSLX’s
efforts to effect positive change at TICC to maximize stockholder
value.
A copy of the letter follows:
Board of DirectorsTICC Capital Corp.8 Sound Shore Drive, Suite
255Greenwich, CT 06830
Dear Members of the Board,
As one of the largest stockholders of TICC Capital Corp. (“TICC”
or “the Company”), we are troubled by your continued refusal to
even acknowledge our clear and, we believe, widely supported views
on the future of TICC.
It has been 46 days since we last sent a letter expressing our
serious concerns about the continuing destruction of stockholder
value at TICC. During this time, you have refused to engage with us
on our proposals, or present viable alternatives, to address the
long-term underperformance and value destruction that a combination
of TICC Management, LLC’s (the “External Manager”) investment
decisions, and the Board of Directors’ own complacency, have
wrought. Your unwillingness to work collaboratively with your
stockholders is yet another sign of a conscious and dedicated
refusal to respect the Company’s true owners and your duty to
represent our interests.
As we approach the release of the Company’s first quarter
earnings, we feel it is important to raise a number of critical and
fundamental questions regarding the future of TICC. Stockholders
deserve answers. It is crucial that the Board provides a
comprehensive plan of action as to how it will prioritize value
creation for stockholders now and in the future. Specifically, we
request that you address the following questions:
1. What is the Board doing to address the
continuing and rapid deterioration of the value of CLO equity
investments held by TICC?
2. What is the Board doing to reverse the
significant and sustained net asset value (“NAV”) per share
deterioration that TICC has suffered?
3. Why has the Board failed to set the date
of, and file relevant materials for, the 2016 annual meeting of
TICC stockholders consistent with the Company’s past practice in
prior years?
4. What is the Board doing to address the
misalignment of its director and stockholder interests?
RAPID DETERIORATION OF CLO INVESTMENT VALUE
In the hands of TICC’s External Manager and the current Board of
Directors, the total return on the Company’s stock has
underperformed every significant
measure – including relative performance compared to the
BDC Composite1, S&P 500, Investment Grade Debt, High Yield
Debt, and even U.S. Treasuries – over the past 12 years.2
These consistent poor returns and ongoing deterioration of NAV
per share are in part a result of a failed investment strategy into
CLO equity. This not only distorts management fees but also
contributes to the unsustainable nature of TICC’s dividend. As
investors know well, TICC has consistently distributed investor
capital as part of its dividend policy.
The reality of the CLO market debunks TICC’s claim that the
dividend can be supported by the cash flows from the Company’s CLO
investments. The facts are clear: as illustrated in Appendix B,
cash-on-cash distributions have been decreasing on a significant
proportion of the CLO equity portfolio, with an astounding decline
of almost 10% quarter over quarter. Further, over-collateralization
cushions have compressed, creating additional risk to future
distributions. This will only lead to further pressure on TICC and
its dividend.
TICC has failed to follow through on its commitment to pursue a
new investment strategy. However, the External Manager continues to
reap significant fees that remain excessive and inappropriate for
the existing portfolio of assets while simultaneously destroying
the value of the Company. We believe that a change in strategy will
be insufficient and fail to see how the current External Manager
has the resources or capabilities to execute a new strategy given
its poor track record with respect to illiquid private credit. This
is again an instance where TICC makes a weak attempt to appease
stockholders without enacting any real change.
NAV PER SHARE DESTRUCTION AT TICC
Since our first communication with you in September 2015, we
have repeatedly raised our concern that the Company’s NAV per share
has rapidly deteriorated, and will continue to do so under the
Board’s current investment and capital allocation policies. We
first told you in September 2015 that TICC’s strategy of paying a
dividend that greatly exceeds net investment income was imprudent
and not in the best interest of stockholders. NAV per share has
declined from $9.78 in Q1 2014 to $6.40 in Q4 2015, and we
anticipate that this value destruction will continue absent a
meaningful change in the composition of the Board and its
investment strategy. Based on our current analysis of public
information, we believe that TICC’s NAV per share has declined yet
again in the first quarter of 2016. This could be as much as
2.5-5.0% versus just three months ago, which would represent an
astounding NAV per share decrease of approximately 28.0-30.5% since
the first quarter of 2015.
It is no surprise then that stockholders continue to suffer from
a share price that has closed below NAV per share for the past 598
consecutive days3 and now trades at just 80.9% of NAV4 per share.
The Board has yet to offer any credible plan to address this
destruction of NAV per share, while the Company’s stockholders
continue to suffer from this inaction. And yet despite the stock
trading below NAV, the Board has failed to authorize an ongoing
stock repurchase program -- further evidence of the Board’s
unwillingness to directly address the continued destruction of NAV
per share.
FAILURE TO SCHEDULE STOCKHOLDER MEETING
Historically, TICC has held its annual meeting no later than
June 18th and has announced the date of each meeting by May 2nd.
The fact that TICC did not file its proxy statement within 120 days
of the end of its fiscal year (and as a result was obligated to
file a supplement to its annual report) is another blatant abuse of
its stockholders.
TICC is preventing stockholders from having the opportunity to
voice their concerns to management at the annual meeting and to
exercise their right to vote on critical proposals that directly
affect their company. This includes the ability of stockholders to
vote for a much needed change to the Board. Simply put, we believe
that the Board is delaying the annual meeting to prevent
stockholders from voting in favor of TSLX’s highly qualified
director nominee, Mr. T. Kelley Millet, and our proposal to
terminate the investment advisory agreement between TICC and the
failing External Manager that has overseen more than a decade of
stockholder value destruction while collecting over $137.7 million
in management and incentive fees.
The Board is clearly stalling, just as it did when scheduling
its prior special meeting of stockholders to replace the External
Manager, which, after much delay, was finally held in December
2015. This sort of behavior demonstrates that TICC’s Board is
disregarding its most basic of fiduciary duties to stockholders,
while preserving an undeserved income stream to its woefully
underperforming External Manager.
LACK OF ALIGNMENT BETWEEN BOARD AND STOCKHOLDERS
The Board has consistently acted in its own self-interest and is
further entrenching itself by delaying the annual meeting. The lack
of alignment is not surprising – consider that the chairman, Steve
Novak, has limited economic interest in the stock despite
collecting over $1.0 million in Board-related compensation through
his 12-plus year association with the Company.5
We informed Mr. Novak on October 7,
2015 that we would be willing to discontinue our proxy solicitation
efforts if the Board agreed to facilitate change at the Company by
terminating the existing External Managers’ contract and
redirecting the proceeds of the proposed transaction to replace the
External Manager to TICC stockholders. We believe any party willing
to offer a cash payment and future economic interest to the failed
External Manager would have readily offered the same consideration
through reduced fees to stockholders if not required by the
Board to compensate the failed manager. In a definitive move to
protect self-interested directors at the expense of stockholders,
the Board instead elected to defend the income stream that has
enriched Directors and the External Manager alike for over a
decade.
Now we are faced with a second costly proxy contest that will
only be an additional expense to stockholders so TICC can continue
to desperately protect its failing External Manager and
self-interested Directors. We urge stockholders to consider these
simple facts about Mr. Novak:
1. As of April 29, 2016, Mr. Novak owns
14,474 shares of TICC6. Since April 2012 he has purchased
zero shares7 of TICC despite
shares trading well below NAV for a significant portion of that
period. Mr. Novak is not, and has not tried to become, economically
aligned with stockholders.
2. Mr. Novak’s 14,474 shares have a current
market value of approximately $74,975, representing a mere 7.5% of
the more than $1.0 million aggregate compensation he has received
from TICC during his tenure as a Director.
3. Mr. Novak’s annual compensation as a
director at TICC has grown at a compound annual rate of 24.3% since
2010, while over the same period TICC stockholders have seen their
shares underperform the BDC Composite by 9.2% on an annualized
basis.
4. Mr. Novak was even awarded $50,000 for his
role as chairman of the special committee that oversaw the attempt
to pay the failing External Manager, although such action was
overwhelmingly rejected by stockholders while the Board was
admonished by a federal judge for misleading stockholders.
Stockholders should question how Mr. Novak can be entrusted with
the representation of stockholder interests given his incredible
wealth accumulation, astonishing history of acting in the best
interest of the External Manager and total failure to align his
interests with stockholders.
Stockholders deserve answers now more than ever. With poor
financial performance, the deterioration of NAV per share,
declining values in the CLO equity portfolio, and an overall lack
of transparency, TICC needs to begin to prioritize stockholders’
interests and recognize their true ownership of the Company.
We remain steadfast in the belief that terminating the
investment advisory agreement and reconstituting the Board would
bring about the change necessary to unlock stockholder value. We
urge the Board to schedule the annual meeting of stockholders
promptly so that stockholders have the opportunity to vote on a new
Board slate and to terminate the investment advisory agreement
between TICC and its failed External Manager.
As always, we welcome the opportunity to immediately engage in a
constructive dialogue with you and to address any questions or
concerns you may have. Once the aforementioned issues are
addressed, we believe there is a bright path ahead for TICC and its
stockholders.
The time for change and accountability is now.
Very truly yours, TPG SPECIALTY LENDING, INC.
By:
_________________________________
Joshua E. Easterly Chairman and Co-Chief Executive Officer
By:
_________________________________
Michael Fishman Co-Chief Executive Officer
APPENDIX A: TICC Relative
Indexed Total Return
TICC Relative
Underperformance
Since IPO
Since IPO
Total Return (%)8
YTD 1Y 3Y
Since IPO9
Annualized10
YTD 1Y 3Y
Since IPO
Annualized TICC (9.7)% (6.8)%
(20.2)% 39.1% 2.7% - - -
- -
BDC Composite(3)
6.1 % (3.6)% 2.0 % 228.3% 10.2% (15.9)% (3.2)% (22.1)% (189.1)%
(7.5)% S&P 500 1.7 % 0.2 % 38.1% 157.8% 8.1% (11.5)% (7.0)%
(58.2)% (118.7)% (5.3)% U.S. Treasuries 3.2 % 2.4 % 5.6% 66.0% 4.2%
(13.0)% (9.2)% (25.8)% (26.9)% (1.5)% Investment Grade Debt 6.7 %
3.0 % 10.1% 97.5% 5.7% (16.5)% (9.9)% (30.3)% (58.4)% (3.0)% High
Yield Debt 7.1 % (1.8)% 6.0% 109.0% 6.2% (16.8)% (5.1)% (26.2)%
(69.9)% (3.5)%
APPENDIX B: Performance
Statistics, TICC CLO Equity Portfolio (Selected Constituents)11
CLO Equity Position
Q1
Q2
Q3
Q4
Q1
% Change % Change
201512
2015
2015
2015
2016
(Q/Q) (Y/Y) Weighted Average
of Selected Constituents Cash on Cash Distribution (10.9)%
(18.9)% Junior Overcollateralization Cushion
(17.0)%
(20.8)%
AMMC CLO XII, Ltd. - $6,460,715 Fair
Value13
Cash on Cash Distribution14
4.6% 5.2% 5.2% 5.0% 6.5% 29.9% 41.0%
Junior Overcollateralization Cushion15
5.1% 4.9% 4.6% 4.4% 4.6% 3.4% (9.4)%
Ares XXV CLO Ltd. -
$6,975,000 Fair Value Cash on Cash Distribution 4.1% 3.8% 3.4%
3.6% 2.8% (20.9)% (30.7)% Junior Overcollateralization Cushion 4.2%
4.2% 3.7% 3.8% 2.5% (34.0)% (40.0)%
Ares XXVI CLO Ltd. -
$4,229,521 Fair Value Cash on Cash Distribution 5.2% 5.0% 4.4%
4.7% 3.8% (18.5)% (25.9)% Junior Overcollateralization Cushion 4.0%
4.1% 3.6% 3.6% 2.3% (36.7)% (43.0)%
Ares XXIX CLO Ltd. -
$5,284,986 Fair Value Cash on Cash Distribution 5.8% 4.9% 4.6%
4.5% 3.9% (13.7)% (31.8)% Junior Overcollateralization Cushion 3.9%
3.9% 3.3% 3.3% 2.4% (29.3)% (39.1)%
Benefit Street
Partners CLO II, Ltd. - $15,380,095 Fair Value Cash on Cash
Distribution 5.6% 7.5% 6.4% 6.4% 5.1% (19.9)% (9.0)% Junior
Overcollateralization Cushion 4.7% 4.7% 4.7% 4.8% 3.1% (35.7)%
(33.5)%
Carlyle GMS CLO 2013-2, Ltd. - $5,932,128 Fair
Value Cash on Cash Distribution 6.1% 7.0% 5.6% 6.4% 5.5%
(14.3)% (9.5)% Junior Overcollateralization Cushion 5.3% 5.3% 5.3%
5.0% 4.9% (0.4)% (6.1)%
Carlyle GMS CLO 2014-4, Ltd. -
$14,914,501 Fair Value Cash on Cash Distribution 11.7% 5.6%
4.6% 5.2% 4.2% (18.1)% (64.0)% Junior Overcollateralization Cushion
4.5% 4.6% 4.7% 4.8% 4.6% (3.8)% 2.0%
Catamaran CLO 2012-1
Ltd. - $5,500,000 Fair Value Cash on Cash Distribution 5.1%
4.5% 4.8% 4.6% 3.8% (18.1)% (26.2)% Junior Overcollateralization
Cushion 4.8% 4.9% 4.9% 4.3% 2.5% (41.4)% (48.1)%
Catamaran CLO 2013-1 Ltd. - $4,900,000 Fair Value Cash on
Cash Distribution 6.2% 5.9% 5.7% 5.3% 5.4% 0.7% (13.4)% Junior
Overcollateralization Cushion 4.9% 4.9% 5.0% 4.6% 4.7% 2.8% (3.4)%
Cedar Funding II CLO, Ltd. - $10,125,000 Fair Value
Cash on Cash Distribution 3.8% 4.3% 3.3% 3.7% 3.5% (5.6)% (9.9)%
Junior Overcollateralization Cushion 5.4% 5.4% 5.1% 5.0% 4.5%
(11.1)% (17.7)%
CIFC Funding 2012-1, Ltd. - $5,610,000
Fair Value Cash on Cash Distribution 6.0% 6.3% 5.4% 5.2% 5.1%
(2.1)% (15.3)% Junior Overcollateralization Cushion 5.6% 5.3% 5.3%
5.3% 4.9% (7.6)% (13.3)%
Halcyon Loan Advisors Funding 2012-2
Ltd. - $3,450,000 Fair Value Cash on Cash Distribution 7.8%
6.7% 6.6% 7.2% 6.5% (10.6)% (17.4)% Junior Overcollateralization
Cushion 5.6% 5.6% 5.1% 5.2% 3.4% (33.8)% (39.2)%
Hull
Street CLO Ltd. - $2,350,000 Fair Value Cash on Cash
Distribution 8.5% 7.7% 6.8% 6.2% 5.0% (19.2)% (40.7)% Junior
Overcollateralization Cushion 4.7% 4.8% 4.7% 4.2% 2.6% (37.9)%
(45.4)%
Ivy Hill Middle Market Credit Fund VII, Ltd. -
$10,181,692 Fair Value Cash on Cash Distribution 5.1% 5.1% 4.8%
5.3% 4.8% (8.4)% (4.8)% Junior Overcollateralization Cushion 5.3%
5.3% 5.4% 5.4% 5.5% 1.3% 4.6%
Marea CLO, Ltd. -
$4,816,787 Fair Value Cash on Cash Distribution 4.6% 3.1% 4.1%
4.1% 3.3% (20.7)% (29.2)% Junior Overcollateralization Cushion 5.5%
5.3% 4.8% 4.2% 4.2% (0.9)% (24.2)%
MidOcean Credit CLO IV
- $6,840,000 Fair Value Cash on Cash Distribution 3.6% 3.8%
3.2% 3.6% 3.3% (9.1)% (9.1)% Junior Overcollateralization Cushion
5.1% 5.1% 5.2% 4.2% 3.0% (29.7)% (42.5)%
Mountain Hawk
III CLO, Ltd. - $4,530,618 Fair Value Cash on Cash Distribution
4.9% 4.7% 4.8% 4.8% 3.1% (35.9)% (37.8)% Junior
Overcollateralization Cushion 9.7% 9.5% 9.6% 8.0% 6.6% (17.0)%
(32.0)%
Shackleton 2013-IV CLO, Ltd. - $8,269,561 Fair
Value Cash on Cash Distribution 6.5% 6.5% 5.7% 5.5% 4.8%
(13.4)% (25.8)% Junior Overcollateralization Cushion 4.4% 4.5% 4.6%
4.2% 2.8% (33.3)% (36.9)%
Telos CLO 2013-3, Ltd. -
$5,416,666 Fair Value Cash on Cash Distribution 6.0% 5.8% 5.8%
5.6% 5.3% (6.1)% (12.6)% Junior Overcollateralization Cushion 5.0%
5.2% 5.2% 5.3% 4.9% (8.2)% (2.3)%
Telos CLO 2013-4, Ltd.
- $4,600,445 Fair Value Cash on Cash Distribution 5.4% 5.2%
5.1% 4.9% 6.0% 23.0% 10.3% Junior Overcollateralization Cushion
4.8% 4.9% 4.9% 5.0% 4.0% (19.2)% (16.3)%
Windriver 2012-1
CLO, Ltd. - $4,277,998 Fair Value Cash on Cash Distribution
4.8% 5.6% 4.4% 5.0% 4.1% (17.1)% (13.6)% Junior
Overcollateralization Cushion 5.3% 5.4% 5.1% 5.3% 5.4% 2.5% 2.8%
Note on presentation: The 21
selected CLO equity investments represent 75.0% by number and 79.8%
by fair value of TICC’s CLO equity portfolio as of December 31,
2015 (excluding the Windriver 2012-1 CLO Ltd. equity side letter
investment and the Mountain Hawk III CLO, Ltd. M notes).
The following 5 investments (representing 17.9% by number and
13.1% by fair value of TICC’s CLO equity portfolio as of December
31, 2015) were excluded due to lack of information on Q1 payments:
AMMC CLO XI, Ltd. subordinated notes, Halcyon Loan Advisors Funding
2014-2 Ltd. subordinated notes, Newmark Capital Funding 2013-1 CLO
Ltd. income notes, Shackleton 2013-III CLO, Ltd. subordinated
notes, and Telos CLO 2014-5, Ltd. subordinated notes.
The following 2 investments (representing 7.1% by number and
7.1% by fair value of TICC’s CLO equity portfolio as of December
31, 2015) were excluded due to their first payment dates being
after April 30, 2015: Jamestown CLO V Ltd. subordinated notes and
Och Ziff CLO XII, Ltd. subordinated notes.
About TPG Specialty Lending
TPG Specialty Lending, Inc. (“TSLX” or the “Company”) is a
specialty finance company focused on lending to middle-market
companies. The Company seeks to generate current income primarily
in U.S.-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. The Company has elected to be regulated as a
business development company, or BDC, under the Investment Company
Act of 1940 and the rules and regulations promulgated thereunder.
TSLX is externally managed by TSL Advisers, LLC, a Securities and
Exchange Commission (“SEC”) registered investment adviser. TSLX
leverages the deep investment, sector, and operating resources of
TPG Special Situations Partners, the dedicated special situations
and credit platform of TPG, with over $16 billion of assets under
management as of December 31, 2015, and the broader TPG platform, a
global private investment firm with over $74 billion of assets
under management as of December 31, 2015. For more information,
visit the Company’s website at www.tpgspecialtylending.com.
Forward-Looking Statements
Information set forth herein includes forward-looking
statements. These forward-looking statements include, but are not
limited to, statements regarding TSLX’s proposed business
combination transaction with TICC Capital Corp. (“TICC”) (including
any financing required in connection with the proposed transaction
and the benefits, results, effects and timing of a transaction),
all statements regarding TPG Specialty Lending, Inc.’s (“TSLX” or
the “Company”) (and TSLX and TICC’s combined) expected future
financial position, results of operations, cash flows, dividends,
portfolio, financing plans, business strategy, budgets, capital
expenditures, competitive positions, growth opportunities, plans
and objectives of management, and statements containing the words
such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,”
“expect,” “project,” “could,” “would,” “should,” “will,” “intend,”
“may,” “potential,” “upside,” and other similar expressions.
Statements set forth herein concerning the business outlook or
future economic performance, anticipated profitability, revenues,
expenses, dividends or other financial items, and product or
services line growth of TSLX (and the combined businesses of TSLX
and TICC), together with other statements that are not historical
facts, are forward-looking statements that are estimates reflecting
the best judgment of TSLX based upon currently available
information.
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that
actual results may differ materially from TSLX’s expectations as a
result of a variety of factors including, without limitation, those
discussed below. Such forward-looking statements are based upon
management’s current expectations and include known and unknown
risks, uncertainties and other factors, many of which TSLX is
unable to predict or control, that may cause TSLX’s plans with
respect to TICC, actual results or performance to differ materially
from any plans, future results or performance expressed or implied
by such forward-looking statements. These statements involve risks,
uncertainties and other factors discussed below and detailed from
time to time in TSLX’s filings with the Securities and Exchange
Commission (“SEC”).
Risks and uncertainties related to the proposed transaction
include, among others, uncertainty as to whether TSLX will further
pursue, enter into or consummate the transaction on the terms set
forth in the proposal or on other terms, potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the transaction, uncertainties as to
the timing of the transaction, adverse effects on TSLX’s stock
price resulting from the announcement or consummation of the
transaction or any failure to complete the transaction, competitive
responses to the announcement or consummation of the transaction,
the risk that regulatory or other approvals and any financing
required in connection with the consummation of the transaction are
not obtained or are obtained subject to terms and conditions that
are not anticipated, costs and difficulties related to the
integration of TICC’s businesses and operations with TSLX’s
businesses and operations, the inability to obtain, or delays in
obtaining, cost savings and synergies from the transaction,
unexpected costs, liabilities, charges or expenses resulting from
the transaction, litigation relating to the transaction, the
inability to retain key personnel, and any changes in general
economic and/or industry specific conditions.
In addition to these factors, other factors that may affect
TSLX’s plans, results or stock price are set forth in TSLX’s Annual
Report on Form 10-K and in its reports on Forms 10-Q and 8-K.
Many of these factors are beyond TSLX’s control. TSLX cautions
investors that any forward-looking statements made by TSLX are not
guarantees of future performance. TSLX disclaims any obligation to
update any such factors or to announce publicly the results of any
revisions to any of the forward-looking statements to reflect
future events or developments.
Third Party-Sourced Statements and Information
Certain statements and information included herein have been
sourced from third parties. TSLX does not make any representations
regarding the accuracy, completeness or timeliness of such third
party statements or information. Except as expressly set forth
herein, permission to cite such statements or information has
neither been sought nor obtained from such third parties. Any such
statements or information should not be viewed as an indication of
support from such third parties for the views expressed herein. All
information in this communication regarding TICC, including its
businesses, operations and financial results, was obtained from
public sources. While TSLX has no knowledge that any such
information is inaccurate or incomplete, TSLX has not verified any
of that information. TSLX reserves the right to change any of its
opinions expressed herein at any time as it deems appropriate. TSLX
disclaims any obligation to update the data, information or
opinions contained herein.
Proxy Solicitation Information
The information set forth herein is provided for informational
purposes only and does not constitute an offer to purchase or the
solicitation of an offer to sell any securities. TSLX intends to
file a preliminary proxy statement with the SEC to be used to
solicit votes at the 2016 annual meeting of stockholders of TICC in
favor of (a) the election of its nominee to serve as a director of
TICC and (b) TSLX’s proposal to terminate the Investment Advisory
Agreement, dated as of July 1, 2011, by and between TICC and TICC
Management, LLC, as contemplated by Section 15(a) of the Investment
Company Act of 1940, as amended.
TSLX STRONGLY ADVISES ALL STOCKHOLDERS OF TICC TO READ THE TSLX
PROXY STATEMENT AND ITS OTHER PROXY MATERIALS AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH
TSLX PROXY MATERIALS WILL BECOME AVAILABLE AT NO CHARGE ON THE
SEC’S WEB SITE AT HTTP://WWW.SEC.GOV AND ON TSLX’S WEBSITE AT
HTTP://WWW.TPGSPECIALTYLENDING.COM. IN ADDITION, TSLX WILL PROVIDE
COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS
FOR COPIES SHOULD BE DIRECTED TO TSLX’S PROXY SOLICITOR AT
TPG@MACKENZIEPARTNERS.COM.
The participants in the solicitation are TSLX and T. Kelley
Millet, and certain of TSLX’s directors and executive officers may
also be deemed to be participants in the solicitation. As of the
date hereof, TSLX directly beneficially owned 1,633,660 shares of
common stock of TICC. As of the date hereof, Mr. Millet did not
directly or indirectly beneficially own any shares of common stock
of TICC.
Security holders may obtain information regarding the names,
affiliations and interests of TSLX’s directors and executive
officers in TSLX’s Annual Report on Form 10-K for the year ended
December 31, 2015, which was filed with the SEC on February 24,
2016, its proxy statement for the 2016 Annual Meeting, which was
filed with the SEC on April 8, 2016, and certain of its Current
Reports on Form 8-K. These documents can be obtained free of charge
from the sources indicated above. Additional information regarding
the interests of these participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will also be included in any proxy statement
and other relevant materials to be filed with the SEC when they
become available.
1 BDC composite index comprised of ACAS, AINV, ARCC, FSC, GBDC,
HTGC, MAIN, MCC, NMFC, PNNT, PSEC, SLRC, TCAP, TCRD and BKCC
2 See Appendix A for further detail
3 Calculated based on TICC’s daily closing price as a percentage
of the then latest reported net asset value per share. Calculation
includes both trading and non-trading days
4 Calculated based on TICC’s closing price of $5.18 per share on
April 29, 2016 and TICC’s last reported net asset value of $6.40
per share as of December 31, 2015
5 Steven P. Novak has received approximately $1,005,125 in
compensation for his role as a Director of TICC from the Company’s
inception through December 31, 2015. Source: Company filings
6 Form 10-K/A filed on April 29, 2016
7 Mr. Novak has purchased no additional shares on a net basis.
Mr. Novak owned 14,474 shares as of the Form DEF14A filed on April
26, 2012
8 Total return calculation includes share price appreciation and
cumulative dividends paid
9 TICC and benchmark returns indexed to November 21, 2003
10 BDC Composite comprised of ACAS, AINV, ARCC, BKCC, FSC, GBDC,
HTGC, MAIN, MCC, NMFC, PNNT, PSEC, SLRC, TCAP, and TCRD
Note: Market data as of April 29, 2016
Source: Bloomberg, fixed income benchmark data from Markit
iBoxx
11 Source: Intex Solutions
12 Q1 represents CLO distributions made in February, March, or
April, depending on each structure’s payment schedule. Subsequent
periods represent each successive three month increment from Q1
13 Fair value amounts as of December 31, 2015. Source: Company
filings
14 Cash on Cash Distribution calculated as quarterly payment
divided by the original notional balance of the equity tranche
15 Junior overcollateralization cushion represents coverage for
the most junior debt in each CLO as of the test date. The
overcollateralization test measures the principal balance of the
assets held by a CLO against each of the various classes of its
liability structure. A failure to satisfy the overcollateralization
test could result in the redirection of cash flows to the more
senior classes of securities until the tests are satisfied
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160502005607/en/
TPG Specialty LendingInvestorsLucy Lu,
212-601-4753llu@tpg.comorMediaLuke Barrett,
212-601-4752lbarrett@tpg.comorAbernathy MacGregorTom Johnson,
212-371-5999tbj@abmac.comorPat Tucker,
212-371-5999pct@abmac.com
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