Earnings call transcript Q1 2023

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Operator

Good day, and welcome to the Blackstone Secured Lending’s First Quarter 2023 Investor Call. Today’s conference is being recorded. [Operator Instructions] All participants are in listen-only mode.

We will conduct a question and answer session after our prepared remarks. [Operator Instructions]

would Head turn of I to conference time, Tucker, Weston Blackstone this like the to over At Shareholder Relations. ahead. go Please

Weston Tucker

Thank with the of XX-Q, a both and shareholder morning of our first section today, and which filed Blackstone presentation issued Katie, our and we release Lendings’ Earlier quarter www.bxsl.com. are welcome press our a of website results Secured call. you, to good available on

referring be throughout that to will We today’s presentation call.

may materially include remind and not to would results. update call to are firm’s that I these We duty Statements you uncertain Forward-Looking today’s outside control like which and from do the of any statements. may undertake differ actual

most of affect without audio that could This the of the cast results, is some copyrighted risk and risks duplicated Form of be recent may not material XX-K. see For our Blackstone consent. please factors section

that, With Marshall. over BXSL’s Brad co-Chief turn Officer, Executive call I will to the

Brad Marshall

everyone. Thank John morning you, Teddy today Executive of Financial joined newly be excited Desloge, Weston, Co-Chief Officer, and by our is of appointed Bock, and we business close as to Chief are good With effective me today. Officer,

as you credit XXXX, investing with business. on been Many know since manager lending in he team our the Blackstone direct a then lending direct of first and portfolio Teddy for has capacity

excited to team. Management are We have him BXSL officially joined

to into some high with results. John go would level start first Teddy of the detail Turning like to our I morning’s this before and portfolio agenda, quarter perspective and

strong all a marked uncertainty failures quarter income, high commercial net in ranging investment to was X, Slide higher performance by inflation. with another the in and significant value, from to BXSL growth that core meaningful bank strong Turning reported stubbornly period asset net credit

primarily annualized debt on increased Net quarter inception, XX.X% X% $X.XX investments XX% per by last share, quarter that have average or and investment NII at yield rising our to which the on increased quarter rates equity our represented since NII driven XX.X% interest a quarter-over-quarter return highest per income to from end.

quality a of XXst below was cost of non-accrual X.XX% XX% X.XX% market and value X% of using earning to measure further on the This are less strength the to value, portfolio, which a as investments basis cost. and XX.X% than or well-sourced reflects of basis, first loan less marked our senior at a lien, secured assets are fair power XX March than

quarter Our net per asset which further portfolio from increased value stability. to previous $XX.XX X.X% share, $XX.XX the reflects

XX% quarter dividend again exceeded increased has $X.XX per over fund’s IPO of in XXXX. late and increased share, Earnings since our XX% power quarterly the last which was

Our current represents dividend We represents much yield its a for NAV any of highest $XX.XX share. dividend this for senior first invested in assets. secured the portfolio shareholders with lien on quarter first the of yield per XX.X% listed BDC annualized based as higher believe

Slide liquidity our X in additional highlights provides portfolio position. on activity stability in our

lower equity and $XXX period million activity, a rate -- a million of adjust were as lower $XXX overall new net was both to of sales quarter sponsors for investment commitments. and seasonally First repayments well market as result volume in The to slow deal selectively deal the origination new tied level dynamics. new matched private as by

the debt in to to an beginning to NII more Subsequent may and to expect see our we per than be of we market $X.XX portfolio activity, end, lead more realize investments impact are quarter accretive equity we said, share. which increase to Westland, which That turnover. by in

positioned defense with well terms also believe we undrawn our balance growth liquidity from both continued and for X.X In our and of we lines. of billion remain cash sheet, lending

less Republic than with are to now direct ago high Bank, First Silicon Bank two-years market of regional We below up secure and set counterparties. exposure Signature general. X% were in we Valley all had and lines lending debt quality commitments what banks have from prices Our at zero Bank,

of and X, investments Slide which the billion X.XX X.X from the ended to with of quarter Turning we is times, quarter. times down previous leverage X.XX

Importantly, XXX XX XX% months. rate, is basis portfolio, debt floating the the expanded last over over ending which points our yield of

I Taking a witness the want to that liabilities. fixed earnings of moment to associated outline on floating quarter increased and continues the rate attractive nature this rate market slide, each power loans, with our

is However, for more I defensive demand times. these to believe growing during that positioning its a BXSL due there volatile

BXSL’s consistent debt, by which returns XX In measured composition, fact, class you fixed Index or look credit top has Direct as the second at if generated in ranking of private performer first the portfolio is secure in as senior XX% over Cliffwater which in asset Lending was the XX% only loan the year, to crisis. then financial XX-years down value GSO the since Blackstone, private during and XX% BXSL. is launches GFC, one average versus prior income strategy, and past in great to And XX% XXXX the credit

is focus to Part larger of on portfolio limiting our deals. on risk the focus in

outcome in BXSL to defense, as where right consider to returns private solid control led line we which have sole lender one been of deals may approximately first lending to lending generate transactions, be direct in these right is leadership credit have over the deals Our large important shareholders. continues businesses, we some plus in or the for XX% the of building that the a billion focus on

in benchmarks, leverage X% John and market balance. a Comparing in more return for investment quarter BXSL the for the later call. to yield total X.X% X.X% public loans, of X.X% bonds, will speak to to grade our portfolio returns compared the high NAV for generated

add but the portfolio as often just is Additionally, can there important protect the the potential made. line bring to a second a after investments investors. is to recognized of manager value That are defense first, by goes less capital, as

our professionals team, Credit. with portfolio work Credit us have numbers you behind put Blackstone heard we value team of to Many a would over including an the add. I like companies, have but XX professionals benefits credit this internal value Blackstone Blackstone outline Advantage, XXX of formally Blackstone Recall, of few who in

and the We the scale value of are to synergies equity cost portfolio the benefit private our these capabilities offers unique Blackstone benefits both believe companies Credit and This portfolio they shareholders. our substantial Network of to operating and Blackstone provide sponsor. company and drive to the that revenue the to team

me equity. held leading realized Virtual never of Let BXSL invested services Last summer, where which some we a called. examples provider a detail the commitment, in the debt Room, position we VDR, called or share warrants had Site, was equity with in alongside our in which two company Data and Data

able are help on data Blackstone and we team meaningful opportunities Value used and Recall identify site share leveraging highly platforms cost the workflows. host the to and cross-sell By and VDR execute files Creation Blackstone Network, independent were manage to and confidential savings. broader

including element Blackstone’s teams, Blackstone’s site advisors, assist to important the Blackstone private the was One and across portfolio equity introductions companies, XX internal data partners. over Blackstone ecosystem,

sale Westland, Subsequent investment helped brokerage the in of based with its into to regional national XXXX capital debt I quarter Canadian from provided business realized operating that equity and them we end, turn in in and a Broad broker a profit. nearly have Partners. combination as insurance invest player We growth our mentioned twice first Street a of a scale earlier, in Westland

that transformation Across IT a a of accretive our NII be more on expertise, we to by payoff we support expect their advisor help share. the culminating on growth proceeds to to than million the support on provided $XXX With and during initial BXSL investments addition sales, and invested increase investment in $XXX the period. interest we our received million two our XX% received million hold of a these in $XX $X.XX

capital while, additional to no of because de-risk fee, debt portfolio invest Remember, two allows advisory the and our upside are very case we investments, understand first status boards we overwhelmingly companies or at that of portfolio. opportunities lien we lender us offer senior truly additional be And cross can the with partner unique for all in and sale, end studies help first our loans, of a operating benefits recent our are cost insured site realize investment our and saving, we with. platform a the platform how successful equity to investment our

creation that the one actively across we And to business, large the majority team Generally, direct in companies participate substantial lending have portfolio introduced is program. team monitoring our that the of outcomes. a benefit are shareholders portfolio portfolio in resources That valuation own go real the of our the also a credit, tangible ways. our but largest private beyond our companies, in infrastructure drive world to we only not while and in with

will that, to With turn I Jon about the it to speak over portfolio.

Jonathan Bock

Thank defensive periods you, what Brad. and of like. on And strength uncertainty, echoing see comments your portfolio looks again let’s a

Slide So jump X. to

it first XX% capital portfolio is just two is financial or to have BXSL private of in to the over sponsors are and senior support senior owned access average an their investments to with But capital equity those loan-to-value Let’s are XX% we equitized in secured that other seniority, of firms highly companies. XX%. equity The of additional by not loans structure. lean start companies who up with are

we are on importantly, of industries. in right the with size More focused the companies right and seniority

to Focusing more first the XXXX, weighted XXX quarter a we of companies million on of portfolio have to size, the average larger, of as EBITDA portfolio to orient million our XXX as durable relative continue businesses.

Slide Let’s jump X. to

than EBITDA per is rooted a middle area that million of our that middle the belief maintain recent out. on bears data greater suggests provides focus the in this that spread data end with and unit to upper market value middle this the credit leverage from Our upper of XXX of compared Lincoln businesses. market compelling market Note similar opportunity, companies a

BXSL its and twice than since historically for But higher companies reference, in of of smaller those have the rates. XXXX which default portfolios had of had more substantially companies default have EBITDA, companies larger in covenant grew than earning million less X% XXXX. less rate rates XX And lower than had

private credit a and BDC of X,XXX review each the provider over they leading investments value Lincoln credit valuation know many you private to Now, in space quarter. as is

default services investing which providers Now, focusing our sustained over the in healthcare neighborhoods key sectors low such believe companies Slide and time. services, of requirements, means portfolio. CapEx in professional This drives where for account we returns as X better industry investment rates, focuses on low and over software, with on better exposure, XX%

further into quality XX. jump to portfolio Slide the Now diving

double BXSL to XX Here our portfolio the million. you Market of more we can average compare than and EBITDA see that International market Lincoln the Private database, million average XXX is the weighted

profitability, our our that EBITDA XX EBITDA companies of months triple Last are portfolio higher. have importantly, portfolio margins that and on XX% companies the growth benchmark, was for nearly

coverage. Now, interest let’s talk

on quarter, earnings calls, is mentioned calculated have by that gets BDC widely. As mentioned way is it last the listed we previously, varies as stat widely a this shared managers but other BDC

loans some transparency. In excluded and sectors other companies, or managers exclude leave the types both for obscure negative decisions in certain better EBITDA averages are that of looking cases, cases, investors

may that companies we that interest amended pick their calculate loan companies coverage, initial to we companies all some borrowed revenue of when on include obligations So, recurring have after private have interest EBITDA, a underwriting. and including

Next, to entire compare we for we portfolio believe credit representative our database, which market. that is the proxy a Lincoln

currently through X.X sit higher today, rates brings interest difference of to last times the market While coverage X.X our interest is at of to X.X average we And stability remains resilient slightly this XX-months X% the compared average which more interest profitable when at market at higher portfolio, run attribute we focus the to times Lincoln. average growth This than our via businesses. we coverage X.X. larger, on which

coverage portfolio higher Yet, it is on namely the the below and the exclusions particularly base one’s market of obscured using and basis interest averages, that percent of that we averages investors about forward also about are a an tails, from participants one more times hear rates. much by ratio other less

of If funds reflecting with see that can an private lower today, the flow to database market, or ICR target range one had portfolio end approximately BXSL Fed X% the its twice amount. compared interest would’ve roughly which we is rates through we that the credit X% below of

its portfolio given estimated the our company we And of generation profit X% coverage, a times the or to one initially and below interest perform X% that of ramp structured rates, a transaction X% a is in margin. single low anticipated that, interest the continues example expand to X% ICR that EBITDA related with of

for be performance, tails and and the averages risk tail of tell with So while seek better more lending always capital. structural foundation to And favorable continue this Blackstone do a protection still we focus we businesses right, story our a direct discerning stable conservative will larger on credit transactions. on on see investors will the results. not we culture of to will, focusing larger, sectors. limit investor And is

for collateral the majority uncapped than none the Blackstone EBITDA they lease that package. assets market. Note our deals, against of leverage prevent materially almost allow And asset structural compared of any loan all when our leads have or vast out better stripping, protections add shifting co-leads of to to when collateral backs

constructively turn idea with just to regular our a in work moment. We Now an companies the amendments course for scope. provide to let’s

requests this to such where that benign reporting. SOFR and have did interest We situations so related And activity immediate XX or of any add-on were received pay to we M&A amendment the not flexibility principle. as quarter, technical inability to rate other pick XX% amendments or the provided we hedging due have

to Slide about that. XX, sorry turn Now

fund’s we mentioned, a $X.XX Brad current increased And last to at the quarters quarter, up IPO in our XX% has quarter. late with As increased ago distribution over to in NAV last clear two that XXXX. XX% approximately yield it dividend the and dividend from XX.X% to share the was relative be

yield you is further view that and to policy income a can growth. when compare supported both long-term dividend a support the importantly, XX%. stable XX.X% distribution best And our margin So safety, believe we it NAV yield at net of by and of BXSL it steady NAV reflects high this dividend

I that, to turn with And will it Teddy. over

Teddy Desloge

to color Thanks, more to activity, be coming in the thanks on a time into of months. investment here John, with will some introduction, look team pipeline on on minutes today. the forward excited activity summarize spending give we the operating spend the I’m I for our the phone results, see part few and Brad. ground and management our and folks the

million income lien higher $X.XX with per continued start we flow year-over-year, to on portfolio. of highest $XXX In which XX. the earnings rate invested we results net our first quarter our floating will first of rates of XX% see was or to-date share, a up XXXX, operating quarterly I predominantly benefit the as generated through Slide base on

$XXX income investment approximately income quarter. million was net to quarter the first $XX million XX% was yield year-over-year up in Our in or XX%. the Total investment

the no fees paid which we particular are by Importantly, maintain mitigating any a transaction. origination associated originating policy conflicts to manager with

fees fees origination a origination is the repayment XXX% of income addition, recognizing life more of a particularly an In in upfront, our stable results where and over loan. This upfront lower. are environment versus amortized activity in picture

average Yet To income our flat investment below million PIK income generated quarter Kind due and was the was to that less repayment $X first represented than X% or million. coverage of still to dividend. in fee earnings about represented quarter-over-quarter end we volume income. In XXX% than total that $XXX Payment less of

no we mentioned, rates for providing far thus encouraged quarter manage amendments costs by to are higher in ability John financing our higher borrower’s PIK through As at base new and we flexibility. the had

the expenses Moving was income a quarter, the share interest XXX $X.XX higher $X.XX first driven by up XX million from year’s per GAAP down net share quarter primarily in or year-ago. net last P&L, were compared per expense. up to million

or $X XX income. million the net approximately reversal gains were of the of million driver approximately $X.XX markdowns investment share incentive fee to benefit Unrealized in quarter a primary per capital

end floating The X.X loans of the of investments rate of billion which our on portfolio average XX.X%. total a approximately sheet XX. first Turning yield weighted balance Slide XX%, to of with with the quarter

X.X just of low average between compares rates impact This with of a cost billion This rate mostly weighted debt. average X.XX%. assets fixed of rate has outstanding and spread our rising debt on liabilities our cost helped floating offset of the to cost

new by XXX portfolio investment repayment to incumbency. XX% As we was which volume where million, was of related million activity and XXX Brad matched sales previously have of mentioned, of activity

which opportunities scale some activity context activity in competitive where it to have we from recent an both and the and retain in advantage portfolio the presence relates our a give significant we market. for To seen incumbency, represents weeks, pipeline, as new increasing

foundation extent to for a strong the represents capacity new share BXSL volume from this originations increases for new repayment believe issuance. or We

share a the up as Lastly, quarter. in strong dividend to of last result the of earnings per first excess in NAV from $XX.XX quarter, $XX.XX increased

XXX points an of we unsecured outlines debt key the diverse of rate been which rate a increased Slide in our as drawn policy less includes beginning fixed than its since which XX bonds view Next, XXXX. profile, by and and of basis having X%, attractive advantage the while XX% liability Fed average

cash billion Additionally, liquidity BXSL undrawn secured the and X.X available, immediately quarter and capacity. ended with but of leverage

down ratio times was equity X.XX X.XX times to debt last from Our quarter.

will our Additional deleveraging in ends support subsequent quarter approximately times. repayments a towards to one help realize target quarter

credit Importantly, a rate our we the non-accrual the market and X.XX% with investment of quarter BDC as ratings. ended X.X% March of cost corporate at XX, grade maintain three versus average we

our just Sky average near-term maturities X.X Additionally, years. an overall of we Big pricing of have with XXXX. commitments within expanded until level which March, in that revolving maturing no debt Bank of America, by weighted with of amended our a we the up step low two-years end, with XXX September, maturity To next period two-years further X% facility and million

of We is deposits. different model leverage. turn one We that little BXSL’s have do of regional Importantly, from hold banks the very issues. some had run over not a

banks run cover do not the manage match assets duration duration to exceed of to and funding rate assets. leverage, hold liabilities liquid the turns we While obligations, our expected above fixed our typically XX of or we of

As mentioned, if million July ample end of repay forward end, of $XXX liquidity will we commitments, capacity billion to this maturing quarter have at so, sufficient believe million unfunded leverage for approximately maintain available quarter do to by we year. XX% which this $XXX expiring at is in choose pro the with end we Should this over unused. totaled year the which bond X.X of

leverage. times market balance sheet pipeline a with target We on balance our of quality focus our opportunity and approximately and attractiveness our the one managing of quarter the toward the continue of lending to today, indirect

new million the further additional of deleveraging We end which may support for subsequent first the quarter, approximately would to repayments and the capacity see deployment. materialized XXX realized beyond

Brad. I back to pass it will over at With that,

Brad Marshall

Blackstone has over Thanks. navigating credit cycles, as cycles years, investing loss beginning, been through Blackstone lending and investment of very XXst. has credit working committee been and and through Since record direct in a delivered XX XX-years. rate private Teddy. realized points the together, for annualized XX track basis have for our in our we March

We over and have professionals industry and across credit underwriting. we offices. specialized XX cover private XXX have XXX our across liquid support globally advisors XXXX investment strategies, companies We that

one XX in we the in industry believe specialized of management. active to the at what CIO largest And portfolio in our teams office

macro dynamics and uncertain positive lending direct an a in the the once shareholders a disciplined in outlook as highly a remain result. opportunity remain we environment, play for for generation believe we create While about at BXSL

that, with And I up Thank questions. you. ask will open it operator to the for

Operator

Thank you. from [Operator Finian take with Instructions] our question Fargo. O’Shea We will Wells first

Finian O’Shea

cetera morning. Question for general repay is noted can good for the and I lien you everyone for potential to flow Is one Hi that syndicated, Brad. post then out guess performing, your large, in et being channel? the BSL on presentation? quarter first the touch into portfolio while the you going

Brad Marshall

sure. Yes,

first, your I to the hasn’t is recovered. the point buying they debt using public would fully question are Westland, second a the be to on acquisition. around So answer asset syndicated fund that say yes, your markets, On continues corporate asset. on that that And to a market that

there But larger outperform those assets. is turnover would capital, of some lower look protection cost on there portfolio opportunity in as to and we the get for assets and their of the be our call more to an

about we in pipeline assets across look of $XX I and as opportunity now. sets our have But the billion right

from replace very a so us as easily that potential I able the will large pipeline we an to IC earning because think, the So it. standpoint positive be turnover for is

Finian O’Shea

pretty advisor answer. a any is are remind if up full touched follow-up, has apologize I helpful. would this, and Okay the if you us I didn’t this great pick retained eventually of then And fee the think on Can fees anemic. relatedly at that level The income expect the for you to been I the hear BDC? Teddy

Teddy Desloge

question the market to Thanks. I’m question, to retained I your at on answer second happy No the your advisor that Finn. are somewhat and first to take fees volumes. answer think depends it level

As pipeline. Brad in activity an across increase mentioned, we seeing are our

more the last fee repayment been OID I case income could volume, as would And has well. and couple think that the which for months. lead that drive to accelerated

Brad Marshall

manager. Teddy So a fee when the does OID I we scrape not the gets will over highlighted, generate a Teddy, the do which emphatic be goes upfront benefit life Every and -. that of fees Finn, that manager for little deal more we than to of loan, amortized the the

Finian O’Shea

much. so thanks Yes,

Operator

Thank you.

Casey We our from will take with Alexander question Compass next Point.

Casey Alexander

Hi good morning.

resets off, earnings this quarters portfolio, there past Have bit in that a the had what that the time chart all earnings additional be. all we the point is you First flowed resets pretty little of or have discussed higher? captured punch through much might when a at power flow through could that

Teddy Desloge

Casey. Thanks

it. So, put numbers to some we just

the of X.X% is base the average versus Our rate X.X%. XXX earned rate LBR at month was That three our around to quarter spot close in right across portfolio.

$X.XX see So If is still from on what rates. we earnings extra today, have our just is would just where rates based say or up that is some, we that juice of analysis run base some we shown that there an to Historically, potential so today. left chart. are through

Casey Alexander

you. Alright great, thank

Secondly, value I trying right statistic to the that now? know you across the accretion be your at the repayments just XX% priced NAV portfolio portfolio. might what what get X% to you to the on when there only trading Do potential that how much is at get portfolio, discount is the portfolio cost. par start I’m average of well appreciate below at

Teddy Desloge

quarter at was average first XX.X. So Mark end of the of has par percentage the a

Casey Alexander

you very questions. thank appreciate I you taking my Great. much.

Operator

will Lee RBC. We with from question take next our Ken

Kenneth Lee

good Hi thanks and for taking morning. m question

little the if you expand of year up, picking from Thanks. talked rest more market M&A activity bonds do just on think? dependent be you recently You seeing the are remarks going to prepared a Granted upon origination for you to more incumbency How going the is out in and further are help. coming wanted, about further looking that seeing where bit activity activity,

Brad Marshall

it. Yes, thanks Ken. will I take

we equity taken are financings. activity private seeing public So so where companies private private, to seeing sponsors, to looking by be are public add-on we

we seeing in a pickup carve actually outs are seeing sponsor-to-sponsor activity. and are corporate We

the as Anytime a period to in the tends volatility, of with passage are is that fairly wide. And time down. you spread of bit come

and So as because is more we have and a large us we XXXX pipeline reason the is transactions why valuations big for down seeing that, incumbency of such result our come so and credits. are

will Blackstone come to complicated such as through carve Anything credit, have as anything large outs that is well.

And we don’t so, to kind continue market I we to dependent that on deal the a BXSL is it out think invest as what seeing of about funnel think as is. are broader XXX% our because investing and is busy as

Kenneth Lee

helpful Very wondering any you and you. is dividend been Thanks. follow-up thoughts earning may, I over Got dividend have common trend it there the could if there. near-term. And one out your if coverage how meaningfully updated around

Jonathan Bock

The defined this Ken steady are steady really dividend by profile, the of best is and valuations would be it two stable and at Bock. kind look a slowly I BDC things, NAV. way and increasing

have that We seen decades. over the

flow of And continue that And will build NAV. approach steady a to and a NAV you a that then earnings see time, of is but the watching excess excess over level of so excess to result NAV earnings. and and on of here, there’d clearly focus level special, maintaining extent our we some grow application terms as through our be stable then accretion dividend cap, can approach to of into spill in over and

Kenneth Lee

Got you, very again. there. helpful Thanks

Operator

next will to James. with Robert Raymond We go Dodd

Robert Dodd

of guys. Couple questions. Hi

you more $X.XX to said Brad, one reconcile an than I Westland. First number accretive think, on Can a me? NII. for you

fees looks the to X.X fair prepayment value the in embedded mark in the be million in about at Looking quarter. that

$X.XX, about that half So cents. a would two and be

indication quarter appreciated. prepaid the is dividend So the you loans there with or the along the your is exit the mark fees on of are could between and Westland reconcile a that where embedded this and about difference

Brad Marshall

Yes.

maybe debt both increased debt not when to remember, we or with discount. had we attached remember but gave our them that did deal, warrants the and that So, equity we debt the

our was bit a of but protection. So we fair call lower, OID had also

So between act. the accelerated an cents the the $X.XX in that OID results approximate call of protection,

Robert Dodd

known this problem. value proceeds fair for didn’t the the quarter. So mark no up No, you to

BBC as On mature take If to take just the is with out? have drop just you that July, perfectly unsecured rating that you remain time, an conceptually? agencies going which I can markets unsecured in ahead the of how that. mixed unsecured low remain over like to usually comfortable percentage liquidity XX is are obviously well on down beyond going increasingly up adequate, the the period of that markets but for be obviously disrupted it low mean long unsecured Avol how you plus, how would if you is a XX%, mix

Teddy Desloge

I’m to hit happy that.

if you bond at million we maturing. give is the So first, maturity XXX our that profiles, look

floating earliest the that, after know, in facility maturity You a is rate XXXX.

structure So was financing we the capital to prior in benefit the I last the cost of and would say really year. widening then place is put have pretty saw set rock until solid dislocation low in that spread that we

bit will so we those When right. it, good at bonds. potentially we then the do be spread a pay We starting a up with have proceeds quite and back cushions certainly is XX%. issue of see on opportunistic opens average XXX opportunity, point, the your we FFR to we use and plus revolver Our won’t to market But could bond. our

Brad Marshall

as manage well. want We rating to the Robert

risk So, minimize XXXX be with whole it will XXXX, we is our this and and will do earnings. everything maximize we goal so is be consistent do in that. And, whatever in

Robert Dodd

thank it, you. Got

Operator

We KBW. question Ryan will take with from Lynch next our

Ryan Lynch

morning. good Hey

underperforming expectations get environment? look those this your and are going opinion had portfolio each depend that in because individual’s I is your in question to and top-XX you know those on I look then tough composition industries, at your just maybe top-XX companies on to will are are environment do it But maybe this was are at is We outperforming there if First maybe that probably when Slide you any conversely, any performance. industries industries this on industries current X, that. overall original your

Teddy Desloge

in portfolio exceeding is line or of so their Ryan. Yes, XX% budget, our

So high professional a would healthcare, services. insurance outperforming percentage. probably will say that that pretty are software most the is be IT, I And the areas

have - see headwinds. market sectors been to each good the be Those those very that we a in of largest would could and to But performers expect on are some nine be continue outperformers. page

Maybe be market low Those question heavy be rates feel and expect across challenges cyclical, where arguably full higher sectors in to the will in more I as in well the answer margin the the will economy. be we industrial inflation not differently slowing surprisingly be to of retail, businesses. will rising will in impact as will see businesses,

tech cycles, you were could face thought sectors that these don’t is markets We we stage that have we into. set grow that they very we in or have if costs. challenges notice out earlier capital in type be managers BXSL don’t economic the to and some when deliberate very, could of Those built through the negative EBITDA accordingly, was they access the can’t that lot got profile a portfolio cut

software larger year-over-year. growing EBITDA are are Our and at positive businesses XX%

Ryan Lynch

growth We expectations healthcare your performing those far participants about from to that thus What some pressure particularly the your relative up overall and that -. businesses? is with have your sector wage expectation that what keeping facing and heard sector is which industry how other is with for costs,

Brad Marshall

reliant these to rollups in add The mask have on we non-accrual and lack issues seen some flow of areas which you and of more have have generation. offices, cash practice others were their doctor very assets been seen acquisitions

user. slowed And up those pass plus, down right, seeing on XX% a have of businesses nurses, cash acquisitions from are businesses. not of and as you pressure or those the that are been has So to pressure flow kind increases adjustments the price you you that ended, wage lot those technicians the end consumer to in have as able got are have to

of types And so our exposure is low. those businesses very, very to

below unperforming that XX, are we that are is called assets [Axia] on have that the entire We watching closely, our the is marked It called but WHCG plan (Ph). that it And and one one is is actually portfolio. purchaser. really across business only

Ryan Lynch

it. questions my today. Got appreciate I you taking

Brad Marshall

Thanks Ryan.

Operator

JP take will Melissa from Wedel last We our question with Morgan.

Melissa Wedel

questions thanks and morning for our Good today. taking

the just of to you. Look say to First Stacy rest today. forward to Teddy wanted and the congrats team and with working named

in forward the on already couple at rate I XX-months, lot was hundred looking rates. sort asked curve. points, questions over and your been answered, implications of the hoping but of a decline basis think of Certainly, get have a my forward to thoughts the next I

implying stressing You you think forward what what of to of terms do that what spread environment? Thanks so terms declines of about much. see sustainable portfolio expect But in for X% trends have kind in talked might is rates. about the investments curve in and you

Brad Marshall

Yes, under are that. so control. clearly be is economic do And higher reflecting the bit way, period, inflation we the forward entering curve more a a slower may view rates designed a is that by to little

So surprise. a it not is

companies help them that that And so for business the cash is paying more one on flow the us. versus retain positive will portfolio in the hand

hand, other been environment. you the see an is may On that environment for. planning a we have economic It slower certainly

think, portfolio standpoint, economic period. our I a good are very to we in slower into from So shape head

I they think to relates feel have spreads it spreads, As like have topped out.

environment, what in starting sort this in is are be marks tend over compression, first. slower see which And quality higher think to assets businesses the the what to market that M&A spread existing for We is to of tends a driving to good come environment, will some on by happen way time. I

to expect businesses you tighter of those would spreads type businesses. have than And other

bit bias And striving now. were right quality so couple little spreads past where over we seeing quarters. than are a you is that of the a the in And tighter market

Melissa Wedel

Thanks so much.

Brad Marshall

Thanks Melissa.

Operator

time, like for to over back question our session. to call additional would any answer turn conclude remarks. will I That closing Mr. the and or At Tucker this

Weston Tucker

a the Have good for day. everyone available Thanks team joining after the any today Great. for us questions. and call is follow-up

Operator

appreciate conclude your today’s We That participation. call. will

Blackstone Secured Lending Fund (BXSL) 10 May 232023 Q1 Earnings call transcript