Blackstone Secured Lending Fund · NYSE:BXSL
Blackstone Secured Lending Fund — Q1 2023 Earnings Presentation
26 slides from Blackstone Secured Lending Fund's earnings presentation, May 10, 2023
Slide 1: Blackstone Secured Lending Fund (BXSL)
Secured Lending Blackstone Secured Lending Fund (BXSL) MAY 2023 Note: All data as of March 31, 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 intended as an offer to sell, or the sol
Slide 2: BXSL is a premier BDC focused on originating senior secured loans to U.S. companies
BXSL IS A PREMIER BDC FOCUSED ON ORIGINATING SENIOR SECURED LOAN S TO U.S. COMPANIES 0.75% 10.7% 10.3% 97.9% 0.14% management fee regular annual total net return first lien assets on for initial 2 years dividend yield(2) since inception(3) senior secured non-accrual(4) post-IPO, then 1%(1) Sharehold
Slide 3: BXSL Competitive Advantages
BXSL COMPETITIVE ADVANTAGES Differentiated BDC backed by the largest alternative asset manager globally(1) Blackstone Blackstone Value Creation deal flow, advisory network, operating partners, program makes Blackstone more than just a capital and trusted reputation provider, partnering with firms to
Slide 4: Backed by Blackstone
BACKED BY BLACKSTONE Blackstone has a long-standing 17-year track record in North America Direct Lending and BDCs Preeminent Alt Scale and Large Expertise & Blackstone Value Manager Transactions Sector Focus Creation $991B 30 503 109 AUM including $291B $1B+ private deals credit professionals intern
Slide 5: BXSL Highlights
BXSL HIGHLIGHTS ▪ Powerful earnings expansion as ~98% floating rate portfolio benefits from higher interest rates. Net investment income of $0.93 per share in the quarter, up 3% from the prior quarter ▪ Portfolio is well-positioned with investments in companies with solid fundamentals and only 1 iss
Slide 6: BXSL is Positioned as a Premier BDC
BXSL IS POSITIONED AS A PREMIER BDC BXSL leads public BDC sector across many key metrics BXSL Rankings Among Large BDCs We Believe BXSL is Well-Positioned on Key Metrics for the Current Environment Median of BXSL Category Key Metrics BXSL Large BDCs(1) Rank Interest rates have provided significant u
Slide 7: BXSL Dividends
BXSL DIVIDENDS Growing dividend well-covered by NII ▪ Regular dividend increased to $0.70 per share quarter over quarter Quarterly Dividend, NII Per Share and Leverage $0.90 $0.93 10.7% $0.80 1Q’23 regular $0.78 dividend yield(1) $0.67 $0.67 $0.63 $0.61 $0.62 $0.20 $0.30 $0.58 $0.55 $0.51 $0.53 $0.2
Slide 8: Shareholder Alignment
SHAREHOLDER ALIGNMENT High degree of shareholder alignment ▪ 3-year lookback/total return hurdle on incentive fees on income 3-year lookback ▪ Management fee rate 0.75% for two years following public listing, then 2-year fee waiver post-IPO steps up to 1%; 15% incentive fee rate steps up to 17.5% in
Slide 9: Low Fees and Expenses
LOW FEES AND EXPENSES Manager fees significantly below peers Low Management Fees(1) Low G&A Expenses as % of NAV(1)(2) 1.5% 0.7% 1.0% 0.3% BXSL Peer Median BXSL Peer Median Low Incentive Fees(1) Low Cost of Leverage(1)(3) 20.0% 5.5% 17.5% 4.7% BXSL Peer Median BXSL Peer Median Note: Further notes ar
Slide 10: BXSL Portfolio Characteristics
BXSL PORTFOLIO CHARACTERISTICS 97.9% 99.9% $9.6B 45.2% of investments in first of debt investments investments at fair Average loan to value lien, senior secured are floating rate(1) value (LTV)(2)(3) debt(1) Portfolio Predominantly Portfolio Company Weighted Average Revenue, First Lien Debt(1) EBIT
Slide 11: BXSL Portfolio Construction
BXSL PORTFOLIO CONSTRUCTION 181 2% 1% portfolio companies weighted average of portfolio marked issuer concentration below 90% of par Top Ten Portfolio Companies(1,2) Top Ten Industries(1,3) Broad Diversity of Issuers Portfolio Focused on “Good Neighborhoods” Medallia, 4% Guidehouse, 3% Donuts, 3% So
Slide 12: Private Credit Market Trends by Size
PRIVATE CREDIT MARKET TRENDS BY SIZE ▪ BXSL invests in the Upper Middle Market because we believe it provides the best risk-adjusted return ▪ Private credit market data from Lincoln International shows similar pricing trends for larger borrowers, yet greater growth and fewer defaults than that for s
Slide 13: Portfolio Company Fundamentals
PORTFOLIO COMPANY FUNDAMENTALS BXSL portcos are generally larger, growing faster, and more profitable than the typical private credit borrower ~2x the Scale ~3x the Growth ~25% More Profitable LTM EBITDA LTM EBITDA Growth Year-over-Year LTM EBITDA Margin $179M 14% 29% 23% $80M 5% Private Credit BXSL
Slide 14: Blackstone Credit is Driving the Trend of $1B+ Private Transactions
BLACKSTONE CREDIT IS DRIVING THE TREND OF $1B+ PRIVATE TRANSACTI ONS $1B+ private deals led by Blackstone Credit 30 ≈$2B ≈$5B ≈42% deals led(1) which is ≈50% weighted average weighted average weighted average of the $1B+ deals closed tranche size(2) enterprise value(2) loan-to-value(2) Increasing tr
Slide 15: BXC Value Creation - Key Highlights
BXC VALUE CREATION - KEY HIGHLIGHTS Blackstone network adds value to its portfolio companies 330+ cross-sell introductions made across the BXC portfolio in Enhance Revenue 2022 ≈$265M cost reduction opportunities identified across Optimize Costs all BXC portfolio companies 42 proprietary cyber asses
Slide 16: Historically Stable Low-Cost Financing Sources
HISTORICALLY STABLE LOW-COST FINANCING SOURCES Flexible and efficient liability management Diversified Financing Sources with Significant Liquidity ($ in millions) $103 Available Cash 75% of assets funded by $1,065 Excess Borrowing Capacity unsecured debt and equity $3,200 Unsecured Notes 4.68% weig
Slide 17: Financial Overview
FINANCIAL OVERVIEW Strong financial profile with dividends covered by NII and industry-low expense ratios ▪ Net investment income has exceeded BXSL’s History of Strong regular dividend for the last sixteen quarters 133% Dividend Coverage 1Q’23 dividend coverage ▪ Low manager fees, including a two-ye
Slide 18: Historical NAV Trend
HISTORICAL NAV TREND Growth in NAV per share since inception and strong quarterly dividend payout ▪ $11.04 per share of value created for investors since inception, representing a 54% total return (1) Net Asset Value and Cumulative Dividends Since Inception(2) $36.04 $35.17 $32.60 $29.50 $9.94 $28.0
Slide 19: Footnotes
Footnotes Blackstone | 19
Slide 20: Notes
NOTES Notes to Page 2 Data as of March 31, 2023. For illustrative purposes only. 1) Post IPO, manager fee step ups waived for two years. 0.75% management fee will increase to 1.0% and 15% incentive fee will increase to 17.5% two years following BXSL’s initial public offering, which occurred on Octob
Slide 21: Notes (Cont'd)
NOTES (CONT’D) Notes to Page 4 As of December 31, 2022 unless otherwise noted. Assets under management (“AUM”) are estimated and unaudited. 1) Blackstone Credit & Insurance AUM is a combined figure inclusive of Blackstone Credit (“BXC”), Harvest Fund Advisors LLC, Asset Based Finance, and Blackstone
Slide 22: Important Disclosure Information
Important Disclosure Information Blackstone | 22
Slide 23: Important Disclosure Information
IMPORTANT DISCLOSURE INFORMATION 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 an offer to buy, any security or in
Slide 24: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) 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 including, without limitation, the alloca
Slide 25: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) 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 and do not employ leverage; as a resu
Slide 26: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) 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 as current income, financing proceed
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