Blackstone Secured Lending Fund · NYSE:BXSL
Blackstone Secured Lending Fund — FY2023 Earnings Presentation
37 slides from Blackstone Secured Lending Fund's earnings presentation, Feb 28, 2024
Slide 1: Blackstone Secured Lending Fund (BXSL)
Secured Lending Blackstone Secured Lending Fund (BXSL) MARCH 2024 Note: All data as of December 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 th
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+ $238B AUM individual investor AUM BUSINESS AUM Private Equity $304B World’s largest private equity platform(2) Incumbency $337B Real Estate World’s largest
Slide 4: Backed by Blackstone Credit & Insurance Platform
BACKED BY BLACKSTONE CREDIT & INSURANCE PLATFORM One of the world’s largest alternative credit managers(1) $319B AUM >4,500 across Blackstone Credit & Insurance corporate issuers invested in(2) Private Corporate Liquid Corporate Infrastructure and Asset Credit(3) Credit Based Credit(4) Senior direct
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: BXCI's Differentiated Capabilities
SCALE & EXPERIENCE: BXCI’S DIFFERENTIATED CAPABILITIES We believe Blackstone Credit’s platform drives connections and deal flow Scaled Player & Incumbency Global Franchise ▪ 4,500+ issuers invested in (2) ▪ 18 global BXCI offices ▪ Sole/lead lender on ~80% of deals (3) ▪ BX brand and platform ▪ Prov
Slide 7: BXCI Value Creation
BXCI VALUE CREATION Portfolio companies have full access to Blackstone’s Value Creation Program 90%+ $3.5B+ $220M+ of BXCI portfolio companies illustrative enterprise value revenue generated(3) through introduced actively participate in created across BXCI portfolio Blackstone portfolio connections
Slide 8: BXSL Highlights: High-Quality Portfolio
HIGH-QUALITY PORTFOLIO: BXSL HIGHLIGHTS ▪ Powerful earnings capacity as the portfolio of 98.9%(1) floating rate debt continued to benefit from an elevated interest rate environment. Net investment income of $0.96 per share in the quarter. ▪ Portfolio is well positioned with investments in companies
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 BDC Peers(8) on Key Metrics Quarterly figures as of December 31, 2023 Category Key Metrics BXSL Peer Rank Interest Income (excl. PIK, dividend, fee and other Earnings Quality 94.8% 2nd Highest inco
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 & 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: BXSL Dividend Coverage History
BXSL DIVIDEND COVERAGE HISTORY Strong dividend well-covered by NII ▪ Regular dividend of $0.77 per share, representing an annualized dividend yield of 11.6%(1) Quarterly Dividend, NII Per Share and Leverage $1.06 11.6% $0.95 $0.96 4Q’23 dividend yield(1) $0.93 $0.90 $0.78 $0.80 $0.58 $0.63 $0.67 $0.
Slide 13: Historical NAV Trend
HISTORICAL NAV TREND Growth in NAV per share since inception and strong quarterly dividend payout ▪ $13.84 per share of value created for investors since inception, representing a 71% unannualized total return(1) Net Asset Value and Cumulative Dividends Per Share Since Inception(2) $38.84 $35.17 $32
Slide 14: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS 98.5% 98.9% $9.9B of investments in first lien, of investments are floating rate(1) investments at fair value senior secured debt(1) 48.2% 196 <0.1% average loan to value portfolio companies non-accrual debt (LTV)(2)(3) investments(4) Portfolio Predominantly Portfolio Compa
Slide 15: Portfolio Construction
PORTFOLIO CONSTRUCTION ▪ Broad industry representation with largest exposures in software, health care providers & services, professional services and commercial services & supplies ▪ Diversified portfolio across issuers with no single issuer accounting for more than 4% of the portfolio Top Ten Port
Slide 16: Portfolio Company Fundamentals
PORTFOLIO COMPANY FUNDAMENTALS ▪ BXSL portfolio companies are generally larger, growing faster, and more profitable than the average private credit borrower ~2x the Growth 15% More Profitable LTM EBITDA Growth LTM EBITDA Margin (Year-over-Year %) (%) 27% 9% 23% 5% (1) (2) Private Credit Market BXSL
Slide 17: BXSL's Strong Credit Performance
BXSL’S STRONG CREDIT PERFORMANCE BXSL’s defensive positioning continues to deliver strong credit performance Strong Ability to Service Debt vs. Private Low Non-Accruals vs. Peers Credit Market Non-Accruals as a % of Cost % of Portfolio with Interest Coverage Ratio >1.0x 94% 3.3% 85% < 0.1% BXSL (1)
Slide 18: BXSL Funding Profile
BXSL FUNDING PROFILE ▪ Well positioned for the current environment with 57% of liabilities unsecured, at a 2.88% fixed coupon and no debt maturities within the next two years, as of December 31, 2023 ▪ In September 2023, Moody’s revised BXSL’s outlook to positive Funding Profile ($ in millions) 76%
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 18 quarters 125% 4Q’23 dividend coverage(2) ▪ Lower management fees, cost of leverage and G
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 six BDCs in its peer set(2) trading above NAV 6/20/23: Base dividend 9/7/22: increased 10%(5) 1.14x Price/Book 18.1% Base dividend Ratio(6) total ann
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), (4) (at cost)(2), (5) 14.7% 11.6% 98.5% <0.1% vs. 11.7% BDC Peers vs. 10.4% BDC Peers vs. 66.6% BDC Peers vs. 3.3% 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 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 26: Significant White Space
SIGNIFICANT WHITE SPACE The addressable market for private credit is significant ~ $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 December 31, 202
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) 11.7% 7.6% 6.3% +410bps 6.8% 5.4% 0.8% New Investments New Investments in 4Q 2021 in 4Q 2023 Base Rate or Floor(2) Spread and Origination Fees(3) Note: As
Slide 28: 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 29: Endnotes and Important Disclosure Information
I. Endnotes and Important Disclosure Information Blackstone | 29
Slide 30: Endnotes
Endnotes Blackstone | 30
Slide 31: Endnotes
ENDNOTES Notes to Page 2 Data as of December 31, 2023. 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) Assets under management (“AUM”) is estimated and unaudited as of December
Slide 32: Endnotes (Cont'd)
ENDNOTES (CONT’D) Notes to Page 6 Data as of December 31, 2023 unless otherwise noted. AUM is estimated and unaudited. 1) AUM is estimated and unaudited as of December 31, 2023. The AUM for Blackstone, Blackstone Credit & Insurance or any specific fund, account or investment strategy presented in th
Slide 33: Endnotes (Cont'd)
ENDNOTES (CONT’D) Notes to Page 22 Note: Data is as of December 31, 2023, 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
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) Images. The Materials contain select images of certain investments that are provided for illustrative purposes only and may not be representative of an entire asset or portfolio or of a Fund's entire portfolio. Such images may be digital renderings of invest
Slide 37: Important Disclosure Information (Cont'd)
IMPORTANT DISCLOSURE INFORMATION (CONT’D) Performance Calculations. Past performance is not necessarily indicative of future results, 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 investm
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