Fri, May 9, 7:31 PM (8 days ago)
### FS Specialty Lending Fund (FSSL) Q1 2025 Financial Summary **Ticker:** FSSL **Quarterly Financial Health:** - **Revenue:** $48,538,000 (down from $69,250,000 in Q1 2024) - **Profit Margins:** Net investment income of $27,123,000 (down from $46,420,000 in Q1 2024) - **Cash Flow:** Net increase in net assets from operations was $34,431,000 (up from $18,111,000 in Q1 2024) - **Earnings Changes:** Net realized loss on investments was $(9,047,000) (down from a gain of $4,190,000 in Q1 2024) - **Quarterly Performance:** Net asset value per share increased to $3.37 (from $3.30 in Q1 2024) **Trends and Uncertainties:** - **Investment Portfolio:** Diversification into broader credit markets, reducing reliance on energy investments. - **Future Operations Impact:** Transition to a closed-end fund structure and potential listing on a national securities exchange. **Key Metrics:** - **Total Assets:** $1,953,478,000 (down from $2,131,236,000 in Q1 2024) - **Total Liabilities:** $418,688,000 (down from $627,780,000 in Q1 2024) - **Net Assets:** $1,534,790,000 (up from $1,503,456,000 in Q1 2024) **Investment Portfolio:** - **Senior Secured Loans—First Lien:** $1,440,091,000 (79% of total investments) - **Senior Secured Loans—Second Lien:** $50,277,000 (3% of total investments) - **Senior Secured Bonds:** $89,579,000 (5% of total investments) - **Unsecured Debt:** $40,109,000 (2% of total investments) - **Asset Based Finance:** $61,594,000 (3% of total investments) - **Equity/Other:** $145,911,000 (8% of total investments) **Financial Condition and Liquidity:** - **Cash and Cash Equivalents:** $95,265,000 - **Borrowings Available:** $100,000,000 under the Barclays Facility **Future Outlook:** - **Reorganization:** Plan to list common shares on a national securities exchange and convert to a closed-end fund. - **Reverse Share Split:** Effective around May 15, 2025, combining every six shares into one. - **Distribution:** Enhanced quarterly distributions to shareholders until a long-term liquidity event. **Risks and Uncertainties:** - **Market Risks:** Exposure to interest rate changes and foreign currency fluctuations. - **Operational Risks:** Dependence on FS/EIG Advisor for investment decisions and management. - **Regulatory Risks:** Compliance with SEC regulations and potential changes in tax legislation. **Conclusion:** FS Specialty Lending Fund is transitioning its investment strategy to diversify away from energy investments and enhance liquidity. The fund's financial health shows a mixed performance with increased net assets but decreased revenue and profit margins. The future outlook includes significant structural changes and potential market risks that could impact financial performance.