Blackstone Secured Lending Fund · NYSE:BXSL
Blackstone Secured Lending Fund — Q1 2024 Earnings Presentation
42 slides from Blackstone Secured Lending Fund's earnings presentation, May 8, 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) MAY 2024 Note: All data as of March 31, 2024, unless otherwise noted. The sole purpose of this material is to inform, a
Slide 2: BXSL Executive Summary
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: Value of Blackstone Platform
VALUE OF BLACKSTONE PLATFORM World’s largest alternative asset manager with broad capabilities and biggest individual investor platform(1) $1.1T+ $241B AUM individual investor AUM BUSINESS AUM Private Equity $310B World’s largest private equity platform(2) Incumbency $339B Real Estate World’s larges
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) 4,500+ AUM (2) across Blackstone Credit & Insurance corporate issuers invested in(3) Private Corporate Liquid Corporate Infrastructure and Asset Credit(4) Credit Based Credit(5) S
Slide 5: Expansive Global Footprint
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: Scale & Experience: 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 ▪ 4,500+ corporate issuers invested in (2) ▪ 18 global BXCI offices ▪ Sole/lead lender on ~80% of deals (3) ▪ BX bra
Slide 7: BXCI Value Creation
BXCI VALUE CREATION Portfolio companies have full access to Blackstone’s Value Creation Program 90%+ ~$5.0B $225M+ of BXCI portfolio companies total illustrative value created revenue generated(3) by BXCI introduced actively participate in across BXCI portfolio portfolio companies the program(1) com
Slide 8: High-Quality Portfolio: 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: We Believe BXSL Is Positioned as a Premier BDC
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 March 31, 2024 Category Key Metrics BXSL Traded BDC Peer Rank Interest Income (excl. PIK, dividend, fee and other Earnings Qual
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 other peers have a lookback(1) ▪ Blackstone Credit & Insurance does not scrape fees for itself from investment fees owed to BXSL(2); 100% of those
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 11.5%(1) Quarterly Dividend, NII Per Share and Leverage 11.5% $1.06 1Q’24 dividend yield(1) $0.95 $0.96 $0.93 $0.90 $0.87 $0.80 $0.67 50%+ $0.63 $0.61 $0.
Slide 13: Historical NAV Trend
HISTORICAL NAV TREND Growth in NAV per share since inception and strong quarterly dividend payout ▪ $14.82 per share of value created for investors since inception, representing a 44% unannualized total return(1) Net Asset Value and Cumulative Dividends Per Share Since Inception(2) $39.82 $38.84 $35
Slide 14: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS 98.5% 98.8% $10.4B of investments are first lien, of investments are floating rate debt(1) investments at fair value senior secured debt(1) 47.8% 210 0.1% 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 %) (%) 2
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 94% 3.0% 84% 0.1% (1) (2) (3)
Slide 18: BXSL Funding Profile
BXSL FUNDING PROFILE ▪ Well-structured, diversified, efficient capital structure with significant available liquidity ▪ Well positioned for the current environment with 53% of liabilities unsecured, at a 2.88% fixed coupon and only $800 million of debt maturing prior to the end of 1Q’26 ▪ BXSL maint
Slide 19: Financial Overview
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 113% Dividend Coverage 1Q’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) 6/20/23: Base dividend 1.14x Price/Book increased 10%(5) 9/7/22: Ratio(6) 18.1% total annualized Base dividend market return since increased 13%(5) IPO(3) 0.98x Price/Book Ratio(6)
Slide 21: Illustrative Current 2024 Total Value Bridge
ILLUSTRATIVE CURRENT 2024 TOTAL VALUE BRIDGE (1) $1.87 $39.82 $3.85 $12.95 Market price premium to NAV as of May 22, 2024 $25.00 NAV at Cumulative NAV Total Market Price (1) (2) (3) (4) (5) Inception Dividends Paid Appreciation Value Premium to NAV Note: Data is as of March 31, 2024, unless otherwis
Slide 22: Appendix
Appendix Blackstone | 22
Slide 23: Key Highlights
KEY HIGHLIGHTS BXSL leads across many key metrics Earnings Momentum Capital Protection % First Lien Senior Non-accruals LTM Return(1) ,(2) Dividend Yield(2), (3) Secured(2), (4) (at cost)(2), (5) 14.6% 11.5% 98.5% 0.1% vs. 12.5% vs. 10.1% vs. 68.7% vs. 3.0% Traded BDC Peers Traded BDC Peers Traded B
Slide 24: Detailed Overview of Traded BDC Peer Fees
DETAILED OVERVIEW OF TRADED BDC PEER FEES BXSL and peers’ fee structures(1) Full Management Fees (% GAV)(2) 2.0% 1.8% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.3% 1.3% 1.0% 1.0% 1.0% (3) PSEC MFIC ARCC SLRC TSLX OBDC FSK OCSL CGBD BCSF NMFC BBDC GSBD GBDC BXSL Full Income Incentive Fees (% Pre-Fee N
Slide 25: Private Credit Market Opportunity
Private Credit Market Opportunity Blackstone | 25
Slide 26: Private Credit Market Opportunity and Demand for Private Solutions
PRIVATE CREDIT MARKET OPPORTUNITY AND DEMAND FOR PRIVATE SOLUTIO NS Dry powder and increased market share drives opportunities for private credit Private Equity Dry Powder (1) Borrowers Are Choosing Private Lenders North America only ($ in billions) More (2) % of LBOs based on count ~$1,500 21% 86%
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: As of March 31, 2024, unless
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) 11.4% 6.0% 7.6% +380bps 6.8% 5.4% 0.8% New Investments New Investments in Q4 2021 in Q1 2024 Base Rate or Floor(2) Spread and Origination Fees(3) Note: As
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 3/31/2024 Return Metrics Total Return YTD ( 1) -1.7% 14.4% 6.5% 12.6% 10.3% 14.7% 3.4% Past performance does not predict future returns. 1) Total return is calculated as the change in NAV per share during the perio
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 March 31, 2024. For illustrative purposes only. 1) Based on Blackstone analysis of company earnings presentations and calls, as of December 31, 2023 or latest publicly available data. 2) Reflects Blackstone Credit & Insurance segment AUM. 3) As of March 31, 2024.
Slide 34: Endnotes (Cont'd)
ENDNOTES (CONT’D) Notes to Page 6 Data as of March 31, 2024 unless otherwise noted. AUM is estimated and unaudited. 1) Reflects Blackstone Credit & Insurance segment AUM. 2) Reflects unique corporate issuers across funds and accounts managed by Liquid Credit Strategies, Private Credit Strategies, In
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 BCRED portfolio companies, which may have a lower participation rate or be significantly lower. “Actively Parti
Slide 36: Endnotes (Cont'd)
ENDNOTES (CONT’D) Notes to Page 23 Note: Data is as of March 31, 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 ob
Slide 37: Risk Factors and Important Disclosure Information
Risk Factors and Important Disclosure Information Blackstone | 37
Slide 38: Blackstone Secured Lending Fund 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
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: Important Disclosure Information
IMPORTANT DISCLOSURE INFORMATION This document (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, accountin
Slide 41: 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 42: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) EEA & UK. In the UK, Belgium, Denmark, The Republic Of Ireland, Lichtenstein, the Netherlands and Sweden, this communication is issued by Blackstone Europe LLP ("BELL") of 40 Berkeley Square, London, W1J 5AL (registration number OC352581), which is authorise
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