Blackstone Secured Lending Fund (BXSL) Q3 Earnings call transcript Nov 12, 2024

In the latest earnings call for Blackstone Secured Lending Fund (BXSL), executives shared their insights on the fund's performance and future outlook, providing a comprehensive view of the company's financial health and growth prospects. The call, led by Co-CEOs Brad Marshall and Jonathan Bock, along with Carlos Whitaker, President, and Teddy Desloge, Chief Financial Officer, highlighted several key themes and trends that underscore the strength and resilience of the fund.

Strong Financial Performance

BXSL reported a robust third quarter with a strong increase in net investment income and net asset value per share. The fund's net investment income of $0.91 per share represents a 13.4% annualized return on equity, while the net asset value per share increased by $0.08 to $27.27. These results underscore the fund's ability to generate consistent returns for investors, thanks to its disciplined investment strategy and focus on first lien senior secured debt in lower default rate industries.

Economic Outlook and Growth Opportunities

The outlook for the broader economy and private credit market was also discussed in detail. With a continued optimism for a soft landing, the company expects the current economic expansion to continue until the support from the Federal Reserve's rate cuts has been felt throughout the market. This positive outlook is reflected in the increased deal flow and the expectation of a pickup in M&A activity, which should support both deployment and repayments.

Diversified Portfolio and Competitive Advantage

The call also highlighted the strength of BXSL's portfolio, with 99% of investments in first lien senior secured loans and a strong liquidity position. The company's ability to maintain its disciplined investment approach, combined with its scale and platform, positions it well for future growth and competitive advantage in the private credit market. Additionally, the recent upgrade of BXSL and its nontraded BDC from BAA3 to BAA2 by Moody's underscores the firm's strong creditworthiness and potential for further growth.

Conclusion

Overall, the Blackstone Secured Lending Fund's strong third quarter results, coupled with a positive outlook for the broader economic landscape and private credit market, paint a picture of a company well-positioned for continued growth and success. The disciplined investment strategy, focus on first lien senior secured debt, and robust liquidity position are key strengths that will support the fund's future performance and deliver attractive returns for investors.