Blackstone Secured Lending Fund · NYSE:BXSL
Blackstone Secured Lending Fund — Investor Presentation (September 2023)
37 slides from Blackstone Secured Lending Fund's investor presentation, September 2023
Slide 1: Blackstone Secured Lending Fund (BXSL)
HIGHLY CONFIDENTIAL & TRADE SECRET Secured Lending Blackstone Secured Lending Fund (BXSL) SEPTEMBER 2023 Note: All data as of June 30, 2023, unless otherwise noted. The sole purpose of this material is to inform, and it in no way is intended to attract any funds or deposits. These materials are not
Slide 2: BXSL is a premier BDC focused on originating senior secured loans
BLACKSTONE SECURED LENDING FUND EXECUTIVE SUMMARY HIGHLY CONFIDENTIAL & TRADE SECRET BXSL is a premier BDC designed to protect capital and focused on originating senior secured loans to U.S. companies ▪ $1T AUM marking Blackstone as the world’s largest alternative asset manager(1) Premier Platform ▪
Slide 3: World’s largest alternative asset manager with broad capabilities
VALUE OF BLACKSTONE PLATFORM HIGHLY CONFIDENTIAL & TRADE SECRET World’s largest alternative asset manager with broad capabilities and biggest individual investor platform(1) $1T $239B AUM individual investor AUM BUSINESS AUM Private Equity $295B World’s largest private equity platform(2) Incumbency
Slide 4: Backed by Blackstone Credit platform
BACKED BY BLACKSTONE CREDIT PLATFORM HIGHLY CONFIDENTIAL & TRADE SECRET One of the world’s largest alternative credit managers(1) $295B AUM >3,100 across Blackstone Credit & Insurance corporate issuers covered(2) Private Credit Liquid Credit Other Credit and Direct lending, sustainable resources, me
Slide 5: Expansive global footprint
EXPANSIVE GLOBAL FOOTPRINT HIGHLY CONFIDENTIAL & TRADE SECRET Scale and geographic footprint drive our strong origination engine Dublin London Frankfurt San Paris Luxembourg Toronto Francisco Milan Beijing Chicago New York City Madrid Seoul Baltimore Tokyo Los Angeles Tel Aviv Shanghai Houston Miami
Slide 6: Scale & Experience: BXC’s differentiated capabilities
SCALE & EXPERIENCE: BXC’S DIFFERENTIATED CAPABILITIES HIGHLY CONFIDENTIAL & TRADE SECRET We believe Blackstone Credit’s platform drives connections and deal flow Scaled Player & Incumbency Global Franchise ▪ 3K+ issuers covered (2) ▪ 17 global BXC offices ▪ Sole/lead lender on 80%+ of deals (3) ▪ BX
Slide 7: BXC Value Creation
BXC VALUE CREATION HIGHLY CONFIDENTIAL & TRADE SECRET Portfolio companies have full access to Blackstone’s Value Creation program 90%+ ~$3B $500M+ of BXC portfolio companies implied enterprise value created revenue generated(3) through introduced actively participate in across BXC portfolio companie
Slide 8: High-Quality Portfolio: BXSL Highlights
HIGH-QUALITY PORTFOLIO: BXSL HIGHLIGHTS HIGHLY CONFIDENTIAL & TRADE SECRET ▪ Powerful earnings expansion as 98.7%(1) floating rate portfolio benefited from higher interest rates. Net investment income of $1.06 per share in the quarter, up 14% from the prior quarter ▪ Portfolio is well positioned wit
Slide 9: BXSL is positioned as a premier BDC
BXSL IS POSITIONED AS A PREMIER BDC HIGHLY CONFIDENTIAL & TRADE SECRET BXSL leads peer BDCs across many key metrics BXSL Rankings Among Peer BDCs on Key Metrics Median of Category Key Metrics BXSL Peer BDCs(1) BXSL Rank NII per Share(2) Year-over-Year Growth +71% +13% Highest Returns(3) LTM Total Re
Slide 10: Shareholder alignment
SHAREHOLDER ALIGNMENT HIGHLY CONFIDENTIAL & TRADE SECRET High degree of shareholder alignment ▪ 3-year lookback/total return hurdle on incentive fees on income 3-year lookback ▪ Only four other peers have a lookback(1) ▪ Blackstone Credit does not scrape fees for itself from investment fees owed to
Slide 11: BXSL Fundamentals
HIGHLY CONFIDENTIAL & TRADE SECRET BXSL Fundamentals Blackstone | 11
Slide 12: BXSL Dividend Coverage History
BXSL DIVIDEND COVERAGE HISTORY HIGHLY CONFIDENTIAL & TRADE SECRET Growing dividend well-covered by NII ▪ Announced 10% increase of regular dividend from $0.70 per share for 2Q’23 to $0.77 per share for 3Q’23, representing annualized dividend yields of 10.6% and 11.7%, respectively(1) Quarterly Divid
Slide 13: Historical NAV Trend
HISTORICAL NAV TREND HIGHLY CONFIDENTIAL & TRADE SECRET Growth in NAV per share since inception and strong quarterly dividend payout ▪ $11.94 per share of value created for investors since inception, representing a 59% total return(1) Net Asset Value and Cumulative Dividends Since Inception(2) $36.9
Slide 14: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS HIGHLY CONFIDENTIAL & TRADE SECRET 98.4% 98.7% $9.3B of investments in first lien, of investments are floating rate(1) investments at fair value senior secured debt(1) 46.5% 180 0.1% Average loan to value portfolio companies non-accrual debt investments(4) (LTV)(2)(3) Portf
Slide 15: Portfolio Construction
PORTFOLIO CONSTRUCTION HIGHLY CONFIDENTIAL & TRADE SECRET ▪ Broad industry representation with largest exposures in software, health care providers & services, professional services, and commercial services & supplies ▪ Diversified portfolio across issuers with no single issuer accounting for more t
Slide 16: Portfolio Company Fundamentals
PORTFOLIO COMPANY FUNDAMENTALS HIGHLY CONFIDENTIAL & TRADE SECRET ▪ BXSL portfolio companies are generally larger, growing faster, and more profitable than the average private credit borrower 2x the Scale 2x the Growth 30% More Profitable LTM EBITDA LTM EBITDA Growth LTM EBITDA Margin ($ in millions
Slide 17: BXSL’s Strong Credit Performance
BXSL’S STRONG CREDIT PERFORMANCE HIGHLY CONFIDENTIAL & TRADE SECRET BXSL’s defensive positioning continues to deliver strong credit performance Strong Ability to Service Debt vs. Private Low Non-Accruals vs. Peers Credit Market Non-accruals as a Percentage of Cost % of Portfolio with Interest Covera
Slide 18: BXSL Funding Profile
BXSL FUNDING PROFILE HIGHLY CONFIDENTIAL & TRADE SECRET ▪ Well positioned for current environment with 64% of liabilities unsecured, fixed rate at 2.97% and a low level of debt maturities with only 12% maturing within the next 2 years, as of June 30, 2023 ▪ In September 2023, Moody’s revised BXSL’s
Slide 19: Financial Overview
FINANCIAL OVERVIEW HIGHLY CONFIDENTIAL & TRADE SECRET Strong financial profile with dividends covered by NII and lower expense ratios ▪ Net investment income has exceeded BXSL’s History of Strong Dividend Coverage regular dividend for the last seventeen quarters 151% 2Q’23 dividend coverage ▪ Lower
Slide 20: Historical Share Price
HISTORICAL SHARE PRICE HIGHLY CONFIDENTIAL & TRADE SECRET BXSL has delivered steady and increasing dividends with a stock price currently trading at a premium to NAV(1) ▪ BXSL is one of four BDCs in its peer set(2) trading above NAV 6/20/23: Base dividend increased 10%(5) 14.5% 9/7/22: total annuali
Slide 21: Appendix
HIGHLY CONFIDENTIAL & TRADE SECRET Appendix Blackstone | 21
Slide 22: Strong Shareholder Alignment: Lower Fees and Expenses
STRONG SHAREHOLDER ALIGNMENT: LOWER FEES AND EXPENSES HIGHLY CONFIDENTIAL & TRADE SECRET Fund fees and expenses below BDC peers’(1) Lower Management Fees(2) Lower G&A Expenses as % of NAV(3) 0.7% 1.5% 1.0% 0.4% BXSL Peer Median BXSL Peer Median Lower Incentive Fees(2) Lower Cost of Leverage(4) 20.0%
Slide 23: Detailed Overview of BDC Peer Fees
DETAILED OVERVIEW OF BDC PEER FEES HIGHLY CONFIDENTIAL & TRADE SECRET BXSL and Peers’ Fee Structures(1) Full Management Fees (% GAV)(2) 2.00% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.40% 1.25% 1.00% 1.00% 1.00% PSEC ARCC BCSF FSK OBDC OCSL SLRC TSLX NMFC BBDC GBDC GSBD BXSL Full Income Incentive
Slide 24: Private Credit Market Opportunity
HIGHLY CONFIDENTIAL & TRADE SECRET Private Credit Market Opportunity Blackstone | 24
Slide 25: Private Credit Market Opportunity
PRIVATE CREDIT MARKET OPPORTUNITY HIGHLY CONFIDENTIAL & TRADE SECRET As public markets remain dislocated, private credit has gained market share Buyers Are Choosing Private Lenders More (1) (% of LBOs based on count) 2021 First Half 2023 Bank Led Syndicated Market 10% Bank Led Syndicated Market 35%
Slide 26: Capitalize on Private Credit Trend
CAPITALIZE ON PRIVATE CREDIT TREND HIGHLY CONFIDENTIAL & TRADE SECRET Record levels of dry powder coupled with upward trend of high- quality companies seeking private financing Private Equity (PE) Buyout Dry Powder(1) Growth of Private Credit ($ in billions) Private Credit Increasing as a Segment of
Slide 27: Higher Asset Yields
HIGHER ASSET YIELDS HIGHLY CONFIDENTIAL & TRADE SECRET Base rates and spreads have widened, creating more attractive yields in private credit BXSL Asset-Level Yields Have Increased(1) 12.1% 7.6% 6.9% +450bps 6.8% 5.3% 0.8% New Investments New Investments in Q4 2021 in Q2 2023 Base Rate / Floor(2) Sp
Slide 28: Private Credit Market Trends by Size
PRIVATE CREDIT MARKET TRENDS BY SIZE HIGHLY CONFIDENTIAL & TRADE SECRET ▪ BXSL invests in larger companies because we believe they provide better risk-adjusted returns ▪ Private credit market data from Lincoln International shows similar pricing trends for larger borrowers, yet greater growth and fe
Slide 29: Footnotes and Important Disclosure Information
HIGHLY CONFIDENTIAL & TRADE SECRET I. Footnotes and Important Disclosure Information Blackstone | 29
Slide 30: Footnotes
HIGHLY CONFIDENTIAL & TRADE SECRET Footnotes Blackstone | 30
Slide 31: Notes
NOTES HIGHLY CONFIDENTIAL & TRADE SECRET Notes to Page 2 Data as of June 30, 2023. For illustrative purposes only. 1) Largest global alternative asset manager reflects Preqin data as of June 30, 2023. 2) Source: Based on Blackstone Credit analysis of company earnings presentations and calls as of Ju
Slide 32: Notes (Cont’d)
NOTES (CONT’D) HIGHLY CONFIDENTIAL & TRADE SECRET Notes to Page 6 Data as of June 30, 2023 unless otherwise noted. Assets under management (“AUM”) are estimated and unaudited. 1) Credit & Insurance AUM is a combined figure that includes Blackstone Credit (“BXC”), Asset Based Finance, Harvest Fund Ad
Slide 33: Important Disclosure Information
HIGHLY CONFIDENTIAL & TRADE SECRET Important Disclosure Information Blackstone | 33
Slide 34: Important Disclosure Information
IMPORTANT DISCLOSURE INFORMATION HIGHLY CONFIDENTIAL & TRADE SECRET This document (together with any attachments, appendices, and related materials, the “Materials”) may not be relied on in any manner as legal, tax, investment, accounting or other advice or as an offer to sell, or a solicitation of
Slide 35: Important Disclosure Information (Cont’d)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) HIGHLY CONFIDENTIAL & TRADE SECRET Conflicts of Interest. There may be occasions when a Fund’s general partner and/or the investment advisor, and their affiliates will encounter potential conflicts of interest in connection with such Fund’s activities includ
Slide 36: Important Disclosure Information (Cont’d)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) HIGHLY CONFIDENTIAL & TRADE SECRET Index Comparison. The volatility and risk profile of the indices presented is likely to be materially different from that of a Fund. In addition, the index employs different investment guidelines and criteria than a Fund an
Slide 37: Important Disclosure Information (Cont’d)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) HIGHLY CONFIDENTIAL & TRADE SECRET Realized and Unrealized Returns. Realized or partially realized returns represent both (i) proceeds from investments that are realized and have been disposed of and (ii) realized proceeds from unrealized investments, such a
Blackstone Secured Lending Fund — Investor Presentation (September 2023) on 6ix