Blackstone Inc. · NYSE:BX
Blackstone — Blackstone Loan Financing — Q3 2024 Earnings Presentation
47 slides from Blackstone's earnings presentation, Sep 30, 2024
Slide 1: Blackstone Loan Financing Limited
This is a marketing communication. Please refer to the Prospectus of the Company before making a final investment decision. Blackstone Loan Financing Limited AS OF 30 SEPTEMBER 2024 FOR PROFESSIONAL INVESTORS/QUALIFIED INVESTORS USE ONLY. NOT FOR DISTRIBUTION TO RETAIL OR UNQUALIFIED INVESTORS.
Slide 2: Table of Contents
TABLE OF CONTENTS I. Overview 2 II. Third Quarter 2024 Results and Market Commentary 6 III. Performance 13 IV. Portfolio Activity 17 V. Market Themes 19 VI. Appendix 24 VII. Key Risk Factors 31 VIII. Important Disclosure Information 34 Blackstone | 1
Slide 3: I. Overview
I. Overview Blackstone | 2
Slide 4: BGLF has provided investors with robust income and total NAV returns since inception
BLACKSTONE LOAN FINANCING LIMITED (“BGLF”) BGLF has provided investors with robust income and total NAV returns since inception BGLF € NAV Total Return Components(1) 16.0% Total Return(1): BGLF € NAV Euro Loan Index US Loan Index 3 Months 2.2% 2.0% 2.1% 11.2% 1 Year 11.2% 8.1% 9.7% 12.0% 9.7% 9.5% 3
Slide 5: BGLF and Blackstone Corporate Funding DAC (BCF) Highlights
BGLF AND BLACKSTONE CORPORATE FUNDING DAC (“BCF”) HIGHLIGHTS 46 10 +2.2% -€1.1M CLO Positions CLO vintage years BGLF 3Q’24 NAV BGLF 3Q’24 change in total return(7) net assets(8) 650+ 0.09% 2.7x 14.1% underlying issuers(2) since inception default BGLF LTM BGLF LTM loss rate(3) dividend cover(9) divid
Slide 6: Investment Opportunity Overview
INVESTMENT OPPORTUNITY OVERVIEW Access to Blackstone’s ▪ Strategic partnership to the well-recognised Blackstone Credit & Insurance CLO platform CLO Platform ▪ Over 20 years of experience investing across multiple cycles(1) ▪ Low-cost levered exposure to portfolio of secured loans with diversified f
Slide 7: II. Third Quarter 2024 Results and Market Commentary
II. Third Quarter 2024 Results and Market Commentary Blackstone | 6
Slide 8: Portfolio and Market Commentary
PORTFOLIO AND MARKET COMMENTARY Portfolio and Market Commentary ▪ Global markets brushed off macro and rate volatility to deliver solid returns in the third quarter, amidst a strengthening case for a soft landing, healthy corporate and household balance sheets, rising real incomes, global monetary e
Slide 9: Third Quarter 2024 Results
THIRD QUARTER 2024 RESULTS ▪ 3Q’24 total return of 2.2% and LTM return of 11.2%. BGLF declared a dividend of 2.25c in 3Q’24, resulting in a LTM dividend BGLF Earnings, yield of 14.1% Distributions, ▪ The Board have announced a 2024 Dividend Policy targeting a total annual dividend of at least €0.09
Slide 10: BGLF Earnings & Distributions
BGLF EARNINGS & DISTRIBUTIONS ▪ BGLF LTM distribution yield of 14.1%(1), supported by uninterrupted cash flows from each CLO since inception ▪ The Board declared a 3Q’24 dividend of 2.25c, the third and final flat payment before a final variable payment to be determined at the end of the year. The B
Slide 11: BCF – Loan Portfolio Activity
BCF – LOAN PORTFOLIO ACTIVITY 3Q ’24 Portfolio Activity Highlights(1) 3Q ’24 Underlying Loan Portfolio Activity(2) (€ in billions) Added 27 new issuers, sold 20 issuers Gross purchases 0.9 WA spread flat at 3.68% B2 average facility rating Gross sales 1.3 Diversification among issuers, sectors, and
Slide 12: Diversified CLO Liabilities
DIVERSIFIED CLO LIABILITIES CLO Positions By Year of Reinvestment Period End(1) (€ par millions / # CLOs) € 400 € 350 € 300 € 250 €164 / 6 € 200 € 150 €87 / 6 € 100 €157 / 9 €92 / 5 €132 / 7 € 50 €109 / 6 €15 / 1 €58 / 2 €34 / 2 €25 / 1 €17 / 1 €0 Out of RP as of Q4 2024 2025 2026 2027 2028 Static 3
Slide 13: BCF CLO Financing and Net Interest Margins
BCF CLO FINANCING AND NET INTEREST MARGINS Portfolio Financing Cost CLO Net Interest Margins (“NIM”) (rolling 3 month) Weighted Average Cost (“WAC”) 4Q ’23 1Q ’24 2Q ’24 3Q ’24 of Liabilities 2.8% 2.4% EUR CLOs 5.87% 5.87% 5.77% 5.51% 2.0% 1.6% US CLOs 7.18% 7.13% 7.19% 7.06% 1.2% 0.8% Directly Held
Slide 14: III. Performance
III. Performance Blackstone | 13
Slide 15: BGLF Return Analysis
BGLF RETURN ANALYSIS BCF NAV Return Components Blackstone Corporate Funding (“BCF”) 3Q’24 Return Component (%) YTD Return Component (%) NAV Return Components MTM Income FX Total MTM Income FX Total EUR CLOs (0.51) 3.77 - 3.26 (4.32) 13.12 - 8.80 US CLOs (2.32) 3.31 (1.87) (0.87) (6.86) 8.33 (1.49) (
Slide 16: Indicative Forward Looking Cashflows
INDICATIVE FORWARD LOOKING CASHFLOWS BGLF indicative forward-looking CLO portfolio cashflows 450 100% 90% 400 % of Total CLO Cashflows 80% 350 70% Cashflows (€mm) 300 60% 250 50% 200 40% 150 30% 100 20% 50 10% 0 0% 2023 2024 2025 2026 2027 2028 2029 2030 US CLOs - RR Compliant (€mm) US CLOs - Non RR
Slide 17: BGLF Supplementary Valuation Information
BGLF SUPPLEMENTARY VALUATION INFORMATION MtModel vs MtMarket Valuations & Assumptions Mark to Model (Published NAV) Mark to Market (IFRS NAV) Q2 2024 Q3 2024 Q2 2024 Q3 2024 BGLF NAV/share €0.9072 €0.9045 €0.8078 €0.8451 Constant Default Rate 2.0% 2.0% 2.0% 2.0% Constant Prepayment Rate 25% 25% 20%
Slide 18: IV. Portfolio Activity
IV. Portfolio Activity Blackstone | 17
Slide 19: Summary of BCF Investment Portfolio
SUMMARY OF BCF INVESTMENT PORTFOLIO ▪ CLO portfolio weighting remained broadly unchanged ▪ Average CLO reinvestment period remained flat at 1.1 years as post reinvestment CLOs were redeemed, balanced out by natural ageing of the portfolio BCF Portfolio: June 2024(1) BCF Portfolio: September 2024(1)
Slide 20: V. Market Themes
V. Market Themes Blackstone | 19
Slide 21: Global Loan Spreads and Prices
GLOBAL LOAN SPREADS AND PRICES Spread to Maturity Yield to Maturity (S+ / E+) 1,000 11% 9.54% 800 9% 8.07% 600 7% E+467 400 S+423 5% 200 3% Sep-19 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 Sep-19 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 S&P LL Index S&P Euro LL Index S&P LL Index S&P Euro LL Index Average Bid Pr
Slide 22: Default Forecasts - Global
DEFAULT FORECASTS - GLOBAL Default rates ticked up in both regions, although remain within long-term historical averages Historical Loan Default Rates 16% 12% As of Forecast Q3 2024 YE 2024 8% US 2.9% 1.9% Europe 1.0% 1.1% 4% 0% Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 D
Slide 23: Global CLO Arbitrage
GLOBAL CLO ARBITRAGE Average quarterly arbitrage improved in 3Q’24 as CLO cost of capital continued to decrease while loan spreads remained wide US WA Spread and Cost of Capital European WA Spread and Cost of Capital (bp) (bp) 450 450 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0
Slide 24: CLO Issuance - Global
CLO ISSUANCE - GLOBAL CLO new issuance in the first three quarters of 2024 has already surpassed full year 2023 volumes US and European CLO New Issue Volume ($/€ in billions) $200 $187 €50 €45 $160 €40 $142 €35 $129 $118 €30 $116 €28 $120 €28 €30 $94 €22 $84 €19 $80 €20 $40 €10 $0 €0 2019 2020 2021
Slide 25: VI. Appendix
VI. Appendix Blackstone | 24
Slide 26: BCF Look Through Portfolio Details
BCF LOOK THROUGH PORTFOLIO DETAILS Total Par Moody’s Portfolio Par Moody’s WA WA Coupon WA Maturity # Facilities Outstanding Moody’s Industry Country Corporate WA Spread (€M) Facility Rating Price (All-In Rate) (Years) (€M) Rating Issuer 1 11 195 13,858 Media Broadcasting and Subscription France Caa
Slide 27: European CLO Risk Retention Investments
EUROPEAN CLO RISK RETENTION INVESTMENTS Refi / BCF Position Valuation as Cashflow Highest of Closing Remaining RI Non-Call Deal Size BCF Cost Ann. Cash- Cum. Cash- WA Cost of Gross Defaulted Reset Date Position as % of % of BCF NIM Diversion Caa / CCC Date Period (Yrs) End (€m) (€m) on-Cash(2) on-Ca
Slide 28: US CLO Risk Retention Investments
US CLO RISK RETENTION INVESTMENTS Refi / Reset Remaining Position Valuation Cashflow Highest of Defaulted Closing Non-Call Deal Size BCF Position BCF Cost Ann. Cash- Cum. Cash- WA Cost of Gross Date RI Period as % of as % of BCF NIM Diversion Caa / CCC Assets % of Date End (€m) (€m) (€m) on-Cash(2)
Slide 29: Redeemed or Fully Sold CLOs
REDEEMED OR FULLY SOLD CLOs Sale/Redemption BCF Position Prior Current Valuation as % WA Ann. Distribution Region Vintage Exit Method Realised IRR To Date(2) Date To Exit (m) of BCF NAV(1) Through Last Payment(3) Myers Park US 2018 Sale Mar-21 $26.4 N/A 11.1%* 16.4% Greenwood Park US 2018 Sale Mar-2
Slide 30: BGLF Monthly € NAV Total Return Performance
BGLF MONTHLY € NAV TOTAL RETURN PERFORMANCE Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD BGLF € NAV 0.92% -0.43% 2.61% 2.29% 0.07% 0.09% 0.98% 1.31% -0.09% 7.98% 2024 European Loan Index 1.32% 0.51% 0.19% 0.78% 1.14% 0.09% 0.97% 0.58% 0.41% 6.15% US Loan Index 0.78% 0.89% 0.83% 0.68% 0.91% 0.
Slide 31: VII. Key Risk Factors
VII. Key Risk Factors Blackstone | 30
Slide 32: Key Risk Factors
KEY RISK FACTORS AS DETERMINED BY THE ENTITIES DISTRIBUTING THIS COMMUNICATION All investments are subject to risk, including the loss of the principal amount invested. Past performance does not predict future returns, and there can be no assurance that BGLF will achieve comparable results, will mee
Slide 33: Key Risk Factors (continued)
KEY RISK FACTORS AS DETERMINED BY THE ENTITIES DISTRIBUTING THIS COMMUNICATION Conflicts of Interest. There may be occasions when the Company and their affiliates will encounter potential conflicts of interest in connection with Blackstone’s activities including, without limitation, the allocation o
Slide 34: VIII. Important Disclosure Information
VIII. Important Disclosure Information Blackstone | 33
Slide 35: Notes to BGLF and BCF Highlights
NOTES TO ‘BGLF AND BLACKSTONE CORPORATE FUNDING DAC (“BCF”) HIGHLIGHTS’ Portfolio stats and performance is reflective of the continuing BCF Fund, unless stated otherwise. 1) As of 30 September 2024. The debt tranches of four CLOs were redeemed in Q3 2024 (please see page 7 for more details), and the
Slide 36: BGLF Monthly € NAV Total Return Performance
BGLF MONTHLY € NAV TOTAL RETURN PERFORMANCE Trailing 12 months ending: September ’24 September ’23 September ’22 September ’21 September ’20 Discrete Performance BGLF € NAV 11.22% 9.15% 7.51% 24.38% (2.88%) European Loan Index 8.09% 13.68% (5.38%) 7.58% (0.33%) US Loan Index 9.65% 12.47% (2.62%) 8.4
Slide 37: Important Disclosure Information
IMPORTANT DISCLOSURE INFORMATION Important notice in relation to Blackstone Loan Financing Limited (“The Company” or "BGLF") This document has been issued by Blackstone Loan Financing Limited (the “Company”), and should not be taken as an inducement to engage in any investment activity and is for th
Slide 38: Important Disclosure Information
IMPORTANT DISCLOSURE INFORMATION Important notice from the entities distributing this communication BGLF has engaged Blackstone Ireland Fund Management Limited to produce this report and BGLF (including its directors) has not been involved in the production of the report or verified the accuracy of
Slide 39: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Any targets, forecasts, estimates, or similar returns set forth herein are based on Blackstone Credit & Insurance’s belief about the returns that may be achievable on investments that the Fund intends to pursue. Targets, forecasts, and estimates are necessar
Slide 40: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Prospective investors should be aware that an investment in the Fund involves a high degree of risk. There may be occasions when the management company of the Fund, the principals, Blackstone Credit & Insurance, Blackstone and their affiliates will encounter
Slide 41: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Blackstone Ireland Limited and Blackstone Ireland Fund Management Limited are authorised and regulated by the Central Bank of Ireland. Blackstone Ireland Limited, Blackstone Ireland Fund Management Limited, the funds they manage, or specific investments made
Slide 42: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) AUSTRALIA The provision of this document to any person does not constitute an offer of securities or financial products of any kind to that person or an invitation to that person to apply for securities or financial products of any kind. Any such offer or in
Slide 43: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) CANADA Blackstone Securities Partners L.P. (“BSP”) will serve as a placement agent for the Fund in Canada. BSP relies on the International Dealer Exemption in each province of Canada pursuant to section 8.18 of National Instrument 31‐103 Registration Require
Slide 44: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) CERTAIN EEA COUNTRIES AND THE UK Blackstone Europe LLP (“BELL”) of 40 Berkeley Square, London, W1J 5AL (registration number OC352581) is authorised and regulated by the Financial Conduct Authority (the “FCA”) (firm reference number 520839) in the United King
Slide 45: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) HONG KONG The foregoing document contains information about complex products and is not an offer to sell any Securities other than: (i) to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (“SFO”) and any rul
Slide 46: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) JAPAN THE SHARES OF THE COMPANY MAY NOT BE OFFERED FOR A PUBLIC OFFERING IN JAPAN UNLESS A SECURITIES REGISTRATION STATEMENT PURSUANT TO ARTICLE 4, PARAGRAPH 1 OF THE FINANCIAL INSTRUMENTS AND EXCHANGE ACT OF JAPAN (INCLUDING ANY AMENDMENTS OR SUCCESSOR LAWS
Slide 47: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) PEOPLE’S REPUBLIC OF CHINA This document and the related documents do not and are not intended to constitute a sale, an offer to sell or a solicitation of an offer to buy, directly or indirectly, any securities in the People’s Republic of China (for the purp
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