Blackstone Secured Lending Fund · NYSE:BXSL
Blackstone Secured Lending Fund — Investor Presentation (September 2024)
43 slides from Blackstone Secured Lending Fund's investor presentation, September 2024
Slide 1: Blackstone Secured Lending Fund (BXSL)
Secured EEA, UK and Swiss Notice: Lending For professional/qualified investor use only. Not for distribution to retail/unqualified investors. Blackstone Secured Lending Fund (BXSL) SEPTEMBER 2024 Note: All data as of June 30, 2024, unless otherwise noted. The sole purpose of this material is to info
Slide 2: BXSL is a premier BDC designed to protect capital
BLACKSTONE SECURED LENDING FUND EXECUTIVE SUMMARY 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 ▪ Wide origination coverage that ge
Slide 3: World's largest alternative asset manager with broad capabilities
VALUE OF BLACKSTONE PLATFORM World’s largest alternative asset manager with broad capabilities and biggest individual investor platform(1) $1.1T+ $243B AUM individual investor AUM(7) BUSINESS AUM Private Equity $331B World’s largest private equity platform(2) Incumbency $336B (6) Real Estate World’s
Slide 4: Backed by Blackstone Credit & Insurance platform
BACKED BY BLACKSTONE CREDIT & INSURANCE PLATFORM One of the world’s largest alternative credit managers(1) $330B AUM (2) 4,700+ across Blackstone Credit & Insurance corporate issuers invested in(3) Private Corporate Liquid Corporate Infrastructure & Asset Credit(4) Credit Based Credit(5) Senior dire
Slide 5: Scale and geographic footprint drive our strong origination engine
EXPANSIVE GLOBAL FOOTPRINT Scale and geographic footprint drive our strong origination engine Dublin London Frankfurt San Paris Luxembourg Denver Toronto Francisco Milan Beijing Chicago New York City Madrid Seoul Baltimore Tokyo Los Angeles Tel Aviv Shanghai Houston Miami Abu Dhabi Hong Kong Mumbai
Slide 6: BXCI's differentiated capabilities
SCALE & EXPERIENCE: BXCI’S DIFFERENTIATED CAPABILITIES We believe Blackstone Credit & Insurance’s platform drives connections and deal flow Scaled Player & Incumbency Global Franchise ▪ 4,700+ corporate issuers invested in (2) ▪ 18 global BXCI offices ▪ Sole/lead lender on ~80% of deals (3) ▪ Benefi
Slide 7: BXCI Value Creation
BXCI VALUE CREATION Portfolio companies have full access to Blackstone’s Value Creation Program 90%+ ~$5B $238M+ of BXCI portfolio companies total illustrative revenue generated(3) by BXCI introduced actively participate in value created across BXCI portfolio companies the program(1) portfolio compa
Slide 8: BXSL highlights
HIGH-QUALITY PORTFOLIO: BXSL HIGHLIGHTS ▪ BXSL is designed with the aim to protect capital with a senior secured debt focus ▪ Powerful earnings capacity as the portfolio of 98.8%(1) floating rate debt continued to benefit from an elevated interest rate environment ▪ Portfolio is well positioned with
Slide 9: BXSL has led peer BDCs across many key metrics
WE BELIEVE BXSL IS POSITIONED AS A PREMIER BDC BXSL has led peer BDCs across many key metrics BXSL Rankings Among Traded BDC Peers(8) on Key Metrics Quarterly figures as of June 30, 2024 Category Key Metrics BXSL Traded BDC Peer Rank Interest Income (excl. PIK, dividend, fee and other Earnings Quali
Slide 10: Shareholder alignment
SHAREHOLDER ALIGNMENT High degree of shareholder alignment ▪ 3-year lookback/total return hurdle on incentive fees on income 3-year lookback ▪ Only five Traded BDC Peers have a lookback(1) ▪ Blackstone Credit & Insurance does not scrape fees for itself from investment fees owed to BXSL(2); 100% of t
Slide 11: BXSL Fundamentals
BXSL Fundamentals Blackstone | 11
Slide 12: Dividend coverage history
DIVIDEND COVERAGE HISTORY Strong dividend well-covered by NII ▪ Regular dividend of $0.77 per share, representing an annualized dividend yield of 11.3%(1) Quarterly Dividend, NII Per Share and Leverage 11.3% 2Q’24 dividend yield(1) $1.0 $0.9 $0.9 $0.93 $0.90 $0.89 $0.87 $0.80 $0. 7 50%+ $0. 3 $0. 1
Slide 13: Historical NAV trend
HISTORICAL NAV TREND Growth in NAV per share since inception and strong quarterly dividend payout ▪ $15.91 per share of value created for investors since inception, representing a 64% unannualized total return (1) Net Asset Value and Cumulative Dividends Per Share Since Inception(2) $40.91 $38.84 $3
Slide 14: Portfolio characteristics
PORTFOLIO CHARACTERISTICS 98.6% 98.8% $11.3B of investments are first lien, of investments are floating rate debt(1) investments at fair value senior secured debt(1) 47.4% 231 0.3% average loan-to-value portfolio companies non-accrual debt investments(4) (LTV)(2)(3) Portfolio Predominantly Portfolio
Slide 15: Portfolio construction
PORTFOLIO CONSTRUCTION ▪ 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 than 4% of the portfolio Top Ten Port
Slide 16: Portfolio company fundamentals
PORTFOLIO COMPANY FUNDAMENTALS ▪ BXSL portfolio companies have grown in-line with the broader market over the past year while also being more profitable than the average private credit borrower Similar Growth as Market 15%+ More Profitable LTM EBITDA Growth LTM EBITDA Margin (Year-over-Year %) (%) 6
Slide 17: BXSL's strong credit performance
BXSL’S STRONG CREDIT PERFORMANCE 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 % of Cost % of Portfolio with Interest Coverage Ratio >1.0x 93% 2.8% 80% 0.3% (1) (2) (3)
Slide 18: Funding profile
FUNDING PROFILE ▪ Well-structured, diversified, efficient capital structure with significant available liquidity ▪ Well positioned for the current environment with 46% of fixed rate unsecured liabilities, at a weighted average coupon of 2.88%(1) and only $800 million of debt maturities within the ne
Slide 19: Strong financial profile with dividends covered by NII
FINANCIAL OVERVIEW Strong financial profile with dividends covered by NII and lower expense ratios ▪ Net investment income has exceeded BXSL’s History of Strong regular dividend for the last 19 quarters 116% Dividend Coverage 2Q’24 dividend coverage(2) ▪ Lower management fees, cost of leverage and G
Slide 20: Historical share price
HISTORICAL SHARE PRICE BXSL has delivered steady dividends with a stock price currently trading at a premium to NAV(1) ▪ BXSL is one of four BDCs in its traded peer set(2) trading above NAV 6/20/23: 1.09x 9/7/22: Base dividend Base dividend Price/Book 16.1% increased 10%(5) Ratio(6) total annualized
Slide 21: Illustrative current 2024 total value bridge
ILLUSTRATIVE CURRENT 2024 TOTAL VALUE BRIDGE (1) $2.19 $40.91 $2.58 $13.72 Market price premium to NAV as of August 21, 2024 $25.00 NAV at (1) Cumulative (2) NAV (3) Total (4) Market Price (5) Inception Dividends Paid Appreciation Value Premium to NAV Note: Data is as of June 30, 2024, unless otherw
Slide 22: Appendix
Appendix Blackstone | 22
Slide 23: Key highlights
KEY HIGHLIGHTS BXSL leads across many key metrics Earnings Momentum Capital Protection % First Lien Senior Non-accruals LTM Return(1) ,(2) Dividend Yield(2), (3) Secured(2), (4) (at cost)(2), (5) 15.1% 11.3% 98.6% 0.3% vs. 11.9% vs. 10.2% vs. 70.9% vs. 2.8% Traded BDC Peers Traded BDC Peers Traded B
Slide 24: Detailed overview of traded BDC peer fees
DETAILED OVERVIEW OF TRADED BDC PEER FEES BXSL and peers’ fee structures(1) Full Management Fees (% GAV)(2) 2.0% 1.8% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.3% 1.3% 1.0% 1.0% 1.0% (3) PSEC MFIC ARCC SLRC TSLX OBDC FSK OCSL CGBD BCSF NMFC BBDC GSBD GBDC BXSL Full Income Incentive Fees (% Pre-Fee N
Slide 25: Private Credit Market Opportunity
Private Credit Market Opportunity Blackstone | 25
Slide 26: Demand for private solutions
DEMAND FOR PRIVATE SOLUTIONS Dry powder has driven increased opportunities for private credit Private Equity Dry Powder(1) Buyers are Increasingly Choosing Private North America only ($ in billions) Lenders(2) % of LBOs based on count (LTM Q2’24) ~$1,500 86% 6x as more demand than supply 72% higher
Slide 27: Significant white space
SIGNIFICANT WHITE SPACE The addressable market for private credit is large ~$4T Total Addressable Market $1.6T Companies with >$1B debt $ 2.9T Potential Opportunity $1.3T Set Companies with <$1B debt $1.0T US Private Credit Market(1) US Leveraged Finance Market(2) Note: There can be no guarantee tre
Slide 28: Higher asset yields
HIGHER ASSET YIELDS Base rates and spreads have widened, which has increased BXSL's asset-level yields BXSL Asset-Level Yields Have Increased(1) 10.9% 6.0% 5.7% 7.6% +330bps 6.8% 5.2% 5.4% 0.8% New Investments Investments New NewInvestments Investments in in Q4 2021 ininQ2 Q1 2024 2024 Base Rate or
Slide 29: Private credit market trends by size
PRIVATE CREDIT MARKET TRENDS BY SIZE ▪ BXSL invests in larger companies because we believe they provide the opportunity for better risk-adjusted returns ▪ Private credit market data from Lincoln International shows larger borrowers experienced greater growth over the last year and fewer defaults his
Slide 30: BXSL return metrics
BXSL RETURN METRICS 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 6/30/2024 Return Metrics Total Return YTD (1) -1.7% 14.4% 6.5% 12.6% 10.3% 14.7% 7.3% Past performance does not predict future returns. There can be no assurance that any Blackstone fund or investment will achieve
Slide 31: Endnotes, Risk Factors and Important Disclosure Information
I. Endnotes, Risk Factors and Important Disclosure Information Blackstone | 31
Slide 32: Endnotes
Endnotes Blackstone | 32
Slide 33: Endnotes
ENDNOTES Notes to Page 2 Data as of June 30, 2024. For illustrative purposes only. 1) Based on Blackstone Credit & Insurance analysis of company earnings presentations and calls, as of March 31, 2024, or latest available publicly available data published by Blackstone Credit & Insurance peers. 2) AU
Slide 34: Endnotes (cont'd)
ENDNOTES (CONT’D) Notes to Page 6 Data as of June 30, 2024 unless otherwise noted. AUM is estimated and unaudited. 1) Reflects Blackstone Credit & Insurance segment AUM. AUM is estimated and unaudited as of June 30, 2024. The AUM for Blackstone, Blackstone Credit & Insurance or any specific fund, ac
Slide 35: Endnotes (cont'd)
ENDNOTES (CONT’D) Notes to Page 7 1) This number represents the amount of introductions across Blackstone Credit & Insurance portfolio companies and is not limited to introductions made to BXSL portfolio companies, which may have a lower participation rate or be significantly lower. All Blackstone C
Slide 36: Endnotes (cont'd)
ENDNOTES (CONT’D) Notes to Page 23 Note: Data is as of June 30, 2024, unless otherwise indicated. This is not an offer or sale of any security or investment product. Past performance does not predict future returns and there is no assurance that any Blackstone fund or investment will achieve its obj
Slide 37: Risk Factors and Important Disclosure Information
Risk Factors and Important Disclosure Information Blackstone | 37
Slide 38: Risk and Reward Disclosure
BLACKSTONE SECURED LENDING FUND (“BXSL” OR THE “FUND”) - RISK AND REWARD DISCLOSURE Set out below is a summary of the rewards and associated risks of an investment in the Fund. This summary does not purport to be a comprehensive statement of all such rewards and risks and investors should refer to t
Slide 39: Other Risk Factors
OTHER RISK FACTORS A detailed summary of the risks to which the Fund is subject is available in the Fund’s Offering Documents. Capitalized terms used herein but not otherwise defined have the meanings set forth in the "Important Disclosure Information" section or in the Fund’s Offering Documents. Co
Slide 40: Other Risk Factors (Cont'd)
OTHER RISK FACTORS (CONT’D) No Assurance of Investment Return. An investment in the Fund is speculative and involves a high degree of risk. There can be no assurance that the Fund will achieve comparable results, implement its investment strategy, achieve its objectives, or avoid substantial losses,
Slide 41: Important Disclosure Information
IMPORTANT DISCLOSURE INFORMATION This presentation (together with any attachments, appendices, and related materials, the “Materials”) is provided on a confidential basis for informational due diligence purposes only and is not, and may not be relied on in any manner as legal, tax, investment, accou
Slide 42: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Performance Calculations. Past performance does not predict future returns, and there can be no assurance that such returns will be achieved, that the Fund will achieve comparable results or that the Fund will be able to implement its investment strategy or
Slide 43: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) NOTICE TO INVESTORS IN THE UK AND THE EEA Blackstone Europe LLP ("BELL") of 40 Berkeley Square, London, W1J 5AL (registration number OC352581) is authorized and regulated by the Financial Conduct Authority (the “FCA”) (firm reference number 520839) in the Un
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