Blackstone Inc. · NYSE:BX
Blackstone — Blackstone Loan Financing — Q1 2024 Earnings Presentation
48 slides from Blackstone's earnings presentation, Mar 31, 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 31 MARCH 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. First Quarter 2024 Results and Market Commentary 6 III. Performance 13 IV. Portfolio Activity 18 V. Market Themes 20 VI. Appendix 25 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 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 3.1% 2.0% 2.5% 12.0% 1 Year 10.6% 10.8% 12.4% 12.0% 10.6% 9.4
Slide 5: BGLF and BCF Highlights
BGLF AND BCF HIGHLIGHTS 53 10 +3.1% -€1.0M CLO positions, all actively CLO vintage years BGLF 1Q’24 NAV BGLF 1Q’24 change in managed by BXCI(1) total return(6) net assets(7) 650+ 0.08% 1.5x 15.9% underlying issuers(2) since inception default BGLF LTM BGLF LTM loss rate(3) dividend cover(8) dividend
Slide 6: Investment Opportunity Overview
INVESTMENT OPPORTUNITY OVERVIEW Access to Blackstone ▪ Strategic partnership to the well-recognised Blackstone Credit & Insurance CLO platform Credit’s CLO Platform ▪ Over 20 years of experience investing across multiple cycles(1) ▪ Low-cost levered exposure to portfolio of secured loans with divers
Slide 7: II. First Quarter 2024 Results and Market Commentary
II. First Quarter 2024 Results and Market Commentary Blackstone | 6
Slide 8: Portfolio and Market Commentary
PORTFOLIO AND MARKET COMMENTARY Portfolio and Market Commentary ▪ Global credit markets started the year off strongly against a backdrop of supportive corporate earnings, robust economic data and generally easing inflation. The previous market view of ‘higher for longer’ rates rotated into a dovish
Slide 9: First Quarter 2024 Results
FIRST QUARTER 2024 RESULTS ▪ 1Q’24 total return of 3.1% and LTM return of 10.6%. BGLF declared a dividend of 2.25c in 1Q’24, resulting in a LTM dividend BGLF Earnings yield of 15.9% & Distributions ▪ The target annual dividend for 2024 is at least 9 cents per share, which represents a total target d
Slide 10: BGLF Earnings & Distributions
BGLF EARNINGS & DISTRIBUTIONS ▪ BGLF LTM distribution yield of 15.9%(1), supported by uninterrupted cash flows from each CLO since inception ▪ The Board declared a 1Q’24 dividend of 2.25c, the first of three flat payments before a final variable payment to be determined at the end of the year(2). Th
Slide 11: BCF – Loan Portfolio Activity
BCF – LOAN PORTFOLIO ACTIVITY 1Q ’24 Portfolio Activity Highlights(1) 1Q ’24 Underlying Loan Portfolio Activity (2) (€ in billions) Added 42 new issuers, sold 18 issuers Gross purchases 1.7 WA spread up by 1bp to 3.71% B2 average facility rating Gross 1.4 Diversification among issuers, sales sectors
Slide 12: Diversified CLO Liabilities
DIVERSIFIED CLO LIABILITIES ▪ Diversified portfolio of 53 CLOs spanning 10 vintage years CLO Positions By Year of Reinvestment Period End(1) (€ par millions / # CLOs) € 500 € 450 € 400 € 350 €271 / 9 € 300 € 250 € 200 € 150 €96 / 6 € 100 €101 / 5 €184 / 10 €17 / 1 €132 / 7 € 50 €109 / 6 €60 / 3 €57
Slide 13: BCF Investment Activity
BCF INVESTMENT ACTIVITY ▪ European CLO WAC remained flat quarter on quarter while US CLO WAC decreased minimally as European and US base rates have started to plateau ▪ Globally, CLO net interest margins were broadly flat over the quarter as both CLO WAC and asset all-in rates fell slightly Portfoli
Slide 14: III. Performance
III. Performance Blackstone | 13
Slide 15: BGLF Return Analysis
BGLF RETURN ANALYSIS BCF NAV Return Components Blackstone Corporate Funding (“BCF”) BCF 1Q’24 Return Component (%) BCF YTD Return Component (%) NAV Return Components MTM(5) Income FX Total MTM(5) Income FX Total EUR CLOs (0.43) 3.06 - 2.63 (0.43) 3.06 - 2.63 US CLOs (1.59) 2.03 0.28 0.72 (1.59) 2.03
Slide 16: Indicative Forward Looking Cashflows
INDICATIVE FORWARD LOOKING CASHFLOWS BGLF indicative forward-looking CLO portfolio cashflows 100% 500 90% % iof Total CLO Cashflows 80% CLO Cashflows (€mm) 400 70% 60% 300 50% 200 40% 30% 100 20% 10% 0 0% 2023 2024 2025 2026 2027 2028 2029 2030 US CLOs - RR Compliant (€mm) US CLOs - Non RR Compliant
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) Q4 2023 Q1 2024 Q4 2023 Q1 2024 BGLF NAV/share €0.9098 €0.9074 €0.7250 €0.7521 Constant Default Rate 2.0% 2.0% 2.0% 2.0% Constant Prepayment Rate 25% 25% 20%
Slide 18: 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 2024 BGLF € NAV 0.92% -0.43% 2.61% 3.12% European Loan Index 1.32% 0.51% 0.19% 2.04% US Loan Index 0.78% 0.89% 0.83% 2.52% 2023 BGLF € NAV 1.53% 0.57% 0.80% 0.87% -1.15% -0.42% 1.46% 1.32% 2.00% 1.11% -0.
Slide 19: IV. Portfolio Activity
IV. Portfolio Activity Blackstone | 18
Slide 20: Summary of BCF Investment Portfolio
SUMMARY OF BCF INVESTMENT PORTFOLIO ▪ CLO portfolio weighting remained broadly similar due to no new issue deals. Note that leverage has been removed from the Directly Held Loans bucket ▪ Remaining CLO reinvestment period decreased by 0.3 years to 1.2 years due to no new CLO investments and natural
Slide 21: V. Market Themes
V. Market Themes Blackstone | 20
Slide 22: Global Loan Spreads and Prices
GLOBAL LOAN SPREADS AND PRICES Spread to Maturity Yield to Maturity (S+ / E+) 1,000 11% 9.82% 800 9% 8.78% 600 7% E+477 400 S+436 5% 200 3% Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 S&P LL Index S&P Euro LL Index S&P LL Index S&P Euro LL Index Average Bid Pr
Slide 23: Default Forecasts - Global
DEFAULT FORECASTS - GLOBAL Default rates across both regions, although remain within long- term historical averages Loan Historical Default Rates 16% 12% As of Forecast Q1 2024 YE 2024 8% US 2.40% 2.50% Europe 1.20% 1.75% 4% 0% Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 De
Slide 24: Global CLO Arbitrage
GLOBAL CLO ARBITRAGE Average quarterly arbitrage improved in 1Q’24 as CLO cost of capital decreased while loan spreads remained relatively 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 25: CLO Issuance - Global
CLO ISSUANCE - GLOBAL CLO new issuance in 1Q’24 has significantly outpaced the same period last year U.S. and European CLO New Issue Volume ($/€ in billions) $200 $187 €50 €45 €40 $150 $129 $118 €30 $116 €28 €28 €30 $100 $94 €22 €20 $49 $50 €11 $34 €10 €7 $0 €0 2019 2020 2021 2022 2023 2023 2024 201
Slide 26: VI. Appendix
VI. Appendix Blackstone | 25
Slide 27: BCF Look Through Portfolio Details
BCF LOOK THROUGH PORTFOLIO DETAILS Total Par Moody’s Portfolio Par Moody’s WA WA Coupon WA Maturity # Facilities Outstanding Moody’s Industry Country Corporate WA Spread (€M) Facility Rating Price (All-In Rate) (Years) (€M) Rating Issuer 1 12 224 14,372 Media Broadcasting and Subscription France Caa
Slide 28: European Horizontal CLO Risk Retention Investments
EUROPEAN HORIZONTAL CLO RISK RETENTION INVESTMENTS Refi / BCF Position Valuation as Cashflow Highest of Closing Reset Remaining RI Non-Call Deal Size BCF Cost Ann. Cash- Cum. Cash- WA Cost of Gross Defaulted Position as % of % of BCF NIM Diversion Caa / CCC Date Date Period (Yrs) End (€m) (€m) on-Ca
Slide 29: US Horizontal CLO Risk Retention Investments
US HORIZONTAL CLO RISK RETENTION INVESTMENTS Refi / Remaining BCF Position as Valuation as Cum. Cashflow Highest of Closing Non-Call Deal Size BCF Cost Ann. Cash- WA Cost Gross Defaulted Reset Date RI Period Position % of % of BCF (2) Cash-on- of Debt (2) Coupon(2) NIM Diversion Caa / CCC Date End (
Slide 30: US Vertical CLO Risk Retention Investments
US VERTICAL CLO RISK RETENTION INVESTMENTS Highest of Refi / Remaining BCF Position Cum. Cashflow Closing Non-Call Deal Size BCF Cost Valuation as % Ann. Cash- WA Cost of Gross Caa / CCC / Defaulted Reset Date RI Period Position as % of (2) Cash-on- NIM Diversion Date End ($m) ($m) (1) of BCF NAV on
Slide 31: 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 U.S. 2018 Sale Mar-21 $26.4 N/A 11.1%* 16.4% Greenwood Park U.S. 2018 Sale M
Slide 32: VII. Key Risk Factors
VII. Key Risk Factors Blackstone | 31
Slide 33: 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 34: Key Risk Factors
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 35: VIII. Important Disclosure Information
VIII. Important Disclosure Information Blackstone | 34
Slide 36: Notes to BGLF and BCF Highlights
NOTES TO ‘BGLF AND BCF HIGHLIGHTS’ Portfolio stats and performance is reflective of the continuing BCF Fund, unless stated otherwise. 1) As of 31 March 2024. 2) Data as of 31 March 2024 using internal Blackstone Credit & Insurance data calculated on 15 April 2024. Reflects directly held loans and lo
Slide 37: BGLF Monthly € NAV Total Return Performance
BGLF MONTHLY € NAV TOTAL RETURN PERFORMANCE Trailing 12 months ending: March ’24 March ’23 March ’22 March ’21 March ’20 Discrete Performance BGLF € NAV 10.59% 2.89% 23.66% 20.67% (6.02%) European Loan Index 10.82% 0.69% 2.31% 21.13% (11.49%) US Loan Index 12.40% 2.12% 3.22% 20.77% (9.51%) LTM Divid
Slide 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) CERTAIN EEA COUNTRIES AND THE UK In the UK, Denmark, Finland, The Republic Of Ireland, 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
Slide 46: 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 47: 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 48: 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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