| Item 1.01 | Entry into a Material Definitive Agreement. |
The information set forth in Item 2.03 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On October 3, 2024 (the “Effective Date”), an affiliate of Blackstone Private Equity Strategies Fund L.P. (“BXPE”) entered into a revolving credit agreement (the “Agreement”) pursuant to which the lenders and letter of credit issuers thereunder agreed to provide loans and letters of credit for up to an aggregate initial principal amount of $375 million subject to customary conditions. The available capacity under the Agreement may be increased on a permanent or a temporary basis up to an amount agreed by the Joint Lead Arrangers (as defined below) and the increasing lenders, provided that the Borrower (as defined below) may not incur new loans or letters of credit in excess of the applicable loan to value ratio (which may be between 10% and 20%) and maintains a loan to value ratio of not more than 30%, where “value” equals the sum of the adjusted net asset values of Eligible Investments (as defined in the Agreement) and certain other items specified therein.
The parties to the Agreement include BXPE US Aggregator (CYM) L.P., the entity through which BXPE conducts its investment activities, as borrower (the “Borrower”), Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent (in such capacity, the “Administrative Agent”), Wells Fargo and Citibank, N.A., as joint lead arrangers (in such capacities, the “Joint Lead Arrangers”) and co-structuring agents, and certain other lenders and the letter of credit issuers as identified in the Agreement. The Agreement matures on October 1, 2027, subject to a one-year extension option requiring approval by the Administrative Agent and extending lenders and the satisfaction of customary conditions.
Under the Agreement, borrowings denominated in U.S. dollars will bear interest, at the Borrower’s discretion, at a rate of the (i) one-month term Secured Overnight Financing Rate (“SOFR”) plus a spread of 3.50% per annum, (ii) daily simple SOFR plus a spread of 3.50% per annum, or (iii) Base Rate (as defined in the Agreement) plus a spread of 2.50%. Such rates may be increased by up to 2.50% per annum during a continuing event of default and/or a cash sweep event.
The Agreement contains customary representations and warranties, events of default, cash sweep events, and affirmative and negative covenants. The Borrower’s obligations under the Agreement are non-recourse to BXPE and secured by the Borrower’s distributions received from investments and the equity interest in certain of its indirect subsidiaries. Under the Agreement, the Borrower will bear customary expenses for a credit facility of this size and type, including closing fees, arrangement fees, administration fees, and unused fees.
The foregoing summary description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which is included as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
In connection with the Agreement, the Borrower was released as a borrower under the line of credit agreement previously entered into with Blackstone Holdings Finance Co. L.L.C. described in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.
