Blackstone Secured Lending Fund · NYSE:BXSL
Blackstone Secured Lending Fund — Q3 2023 Earnings Presentation
38 slides from Blackstone Secured Lending Fund's earnings presentation, December 2023
Slide 1: Blackstone Secured Lending Fund (BXSL)
Secured Lending Blackstone Secured Lending Fund (BXSL) DECEMBER 2023 Note: All data as of September 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 intended as an offer to sell, o
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: Value of Blackstone Platform
VALUE OF BLACKSTONE PLATFORM World’s largest alternative asset manager with broad capabilities and biggest individual investor platform(1) $1T $237B AUM individual investor AUM BUSINESS AUM Private Equity $299B World’s largest private equity platform(2) Incumbency $332B Real Estate World’s largest o
Slide 4: Backed by Blackstone Credit Platform
BACKED BY BLACKSTONE CREDIT PLATFORM One of the world’s largest alternative credit managers(1) $297B AUM >3,150 across Blackstone Credit & Insurance corporate issuers covered(2) Private Credit Liquid Credit Other Credit and Direct lending, sustainable resources, mezzanine, and opportunistic strategi
Slide 5: Expansive Global Footprint
EXPANSIVE GLOBAL FOOTPRINT 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 Abu Dhabi Hong Kong Mumbai Singapo
Slide 6: Scale & Experience: BXC's Differentiated Capabilities
SCALE & EXPERIENCE: BXC’S DIFFERENTIATED CAPABILITIES We believe Blackstone Credit’s platform drives connections and deal flow Scaled Player & Incumbency Global Franchise ▪ 3,150+ issuers covered (2) ▪ 17 global BXC offices ▪ Sole/lead lender on ~80% of deals (3) ▪ BX brand and platform ▪ Proven tra
Slide 7: BXC Value Creation
BXC VALUE CREATION Portfolio companies have full access to Blackstone’s Value Creation program 90%+ $3.5B+ $500M+ of BXC portfolio companies illustrative enterprise value revenue generated(3) through introduced actively participate in created across BXC portfolio Blackstone portfolio connections the
Slide 8: High-Quality Portfolio: BXSL Highlights
HIGH-QUALITY PORTFOLIO: BXSL HIGHLIGHTS ▪ Powerful earnings capacity as 98.8%(1) floating rate debt continues to benefit from the higher interest rate environment. Net investment income of $0.95 per share in the quarter. ▪ Portfolio is well positioned with investments in companies with solid fundame
Slide 9: BXSL Is Positioned as a Premier BDC
BXSL IS POSITIONED AS A PREMIER BDC BXSL has led peer BDCs across many key metrics BXSL Rankings Among Peer BDCs on Key Metrics As of September 30, 2023 Category Key Metrics BXSL Peer Rank Interest Income (excl. PIK, dividend, fee and other Earnings Quality 96.0% Highest income) as % Total Income(1)
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 four other peers have a lookback(1) ▪ Blackstone Credit does not scrape fees for itself from investment fees owed to BXSL(2); 100% of those fees earned
Slide 11: BXSL Fundamentals
BXSL Fundamentals Blackstone | 11
Slide 12: BXSL Dividend Coverage History
BXSL DIVIDEND COVERAGE HISTORY Growing dividend well-covered by NII ▪ Regular dividend of $0.77 per share, an increase of 10% quarter over quarter, representing an annualized dividend yield of 11.6%(1) Quarterly Dividend, NII Per Share and Leverage $1.06 11.6% $0.95 3Q’23 dividend yield(1) $0.93 $0.
Slide 13: Historical NAV Trend
HISTORICAL NAV TREND Growth in NAV per share since inception and strong quarterly dividend payout ▪ $12.95 per share of value created for investors since inception, representing a 65% total return(1) Net Asset Value and Cumulative Dividends Per Share Since Inception(2) $37.95 $35.17 $32.60 $29.50 $1
Slide 14: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS 98.4% 98.8% $9.5B of investments in first lien, of investments are floating rate(1) investments at fair value senior secured debt(1) 46.9% 188 <0.1% average loan to value portfolio companies non-accrual debt (LTV)(2)(3) investments(4) Portfolio Predominantly Portfolio Compa
Slide 15: Portfolio Construction
PORTFOLIO CONSTRUCTION ▪ Broad industry representation with largest exposures in software, health care providers & services, commercial services & supplies, and professional services ▪ Diversified portfolio across issuers with no single issuer accounting for more than 4% of the portfolio Top Ten Por
Slide 16: Portfolio Company Fundamentals
PORTFOLIO COMPANY FUNDAMENTALS ▪ BXSL portfolio companies are generally larger, growing faster, and more profitable than the average private credit borrower 2x the Scale 2x the Growth 20% More Profitable LTM EBITDA LTM EBITDA Growth LTM EBITDA Margin ($ in millions) (Year-over-Year %) (%) $185M 28%
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 97% 2.4% 85% < 0.1% (2) (3) (
Slide 18: BXSL Funding Profile
BXSL FUNDING PROFILE ▪ Well positioned for current environment with 56% of liabilities unsecured, at a 2.88%(5) fixed rate and a low level of debt maturities with only 6% maturing within the next 2 years, as of September 30, 2023 ▪ In September 2023, Moody’s revised BXSL’s outlook to positive Fundin
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 Dividend Coverage regular dividend for the last seventeen quarters 123% 3Q’23 dividend coverage(2) ▪ Lower management fees, cost of leverag
Slide 20: Historical Share Price
HISTORICAL SHARE PRICE BXSL has delivered steady and increasing dividends with a stock price currently trading at a premium to NAV(1) ▪ BXSL is one of five BDCs in its peer set(2) trading above NAV 6/20/23: Base dividend increased 10%(5) 14.0% 9/7/22: total annualized Base dividend market return sin
Slide 21: Appendix
Appendix Blackstone | 21
Slide 22: Key BXSL Highlights
KEY BXSL 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), (3) (at cost)(2), (4) 14.5% 11.6% 98.4% <0.1% vs. 10.9% BDC peers vs. 10.1% BDC peers vs. 65.6% BDC peers vs. 2.4% BDC pe
Slide 23: Detailed Overview of BDC Peer Fees
DETAILED OVERVIEW OF BDC PEER FEES 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 Fees (% Pre-Fee NII)(2) 20.0% 20.0%
Slide 24: Private Credit Market Opportunity
Private Credit Market Opportunity Blackstone | 24
Slide 25: Private Credit Market Opportunity
PRIVATE CREDIT MARKET OPPORTUNITY As public markets remain dislocated, private credit has gained market share Buyers Are Choosing Private Lenders More (1) (% of LBOs based on count) 2021 YTD 2023 Bank Led Syndicated Market Bank Led 14% Syndicated Market 35% Private Credit Private 65% Credit 86% For
Slide 26: Capitalize on Private Credit Trend
CAPITALIZE ON PRIVATE CREDIT TREND Record levels of dry powder coupled with upward trend of high- quality companies seeking private financing Growth of Private Credit Private Equity (PE) Buyout Dry Powder(1) Private Credit Increasing as a Segment of the Total Addressable ($ in billions) Sub-Investme
Slide 27: 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) 12.2% 7.6% 7.0% +460bps 6.8% 5.2% 0.8% New Investments New Investments in 4Q 2021 in 3Q 2023 Base Rate / Floor(2) Spread and Origination Fees(3) Note: As o
Slide 28: Private Credit Market Trends by Size
PRIVATE CREDIT MARKET TRENDS BY SIZE ▪ 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 fewer defaults than those for smaller
Slide 29: Footnotes and Important Disclosure Information
I. Footnotes and Important Disclosure Information Blackstone | 29
Slide 30: Footnotes
Footnotes Blackstone | 30
Slide 31: Notes
NOTES Notes to Page 2 Data as of September 30, 2023. For illustrative purposes only. 1) Largest global alternative asset manager reflects Preqin data as of September 30, 2023. 2) Source: Based on Blackstone Credit analysis of company earnings presentations and calls, as of June 30, 2023 or latest av
Slide 32: Notes (Cont'd)
NOTES (CONT’D) Notes to Page 6 Data as of September 30, 2023 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 Blac
Slide 33: Notes (Cont'd)
NOTES (CONT’D) Notes to Page 22 Note: Data is as of September 30, 2023, unless otherwise indicated. This is not an offer or sale of any security or investment product. Past performance is not a guarantee of future results and there is no assurance that any Blackstone fund will achieve its objectives
Slide 34: Important Disclosure Information
Important Disclosure Information Blackstone | 34
Slide 35: 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 36: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Conflicts of Interest. There may be occasions when a Fund’s investment advisor, and its affiliates will encounter potential conflicts of interest in connection with such Fund’s activities including, without limitation, the allocation of investment opportunit
Slide 37: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Material, Non-Public Information. In connection with other activities of Blackstone, certain Blackstone personnel may acquire confidential or material non-public information or be restricted from initiating transactions in certain securities, including on a
Slide 38: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Trends. There can be no assurances that any of the trends described herein will continue or will not reverse. Past events and trends do not imply, predict or guarantee, and are not necessarily indicative of, future events or results. The "Lincoln Internation
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