Blackstone Secured Lending Fund (NYSE:BXSL) Q1 2024 Earnings Call Transcript May 8, 2024

Blackstone Secured Lending Fund misses on earnings expectations. Reported EPS is $0.888 EPS, expectations were $0.92. Blackstone Secured Lending Fund isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day and welcome to the Blackstone Secured Lending First Quarter 2024 Investor Call. Today's conference is being recorded. [Operator Instructions] At this time, I'd like to turn the conference over to Stacy Wang, Head of Shareholder (sic) [Stakeholder] Relations. Please go ahead.

Stacy Wang: Thank you, Katie. Good morning and welcome to Blackstone Secured Lending Fund's first quarter conference call. Joining me today are Brad Marshal; and Jonathan Bock, Co-Chief Executive Officers; Carlos Whitaker, President; and Teddy Desloge, Chief Financial Officer. Earlier this morning, we issued a press release and slide presentation of our results and filed our 10-Q, both of which are available on the shareholder section of our website, www.bxsl.com. We will be referring to that presentation throughout today's call. I'd like to remind you that today's call may include forward-looking statements, which are uncertain and outside of the firm's control and may differ materially from actual results. We do not undertake any duty in updating these statements.

For some of the risks that could affect results, please see the risk factors section of our most recent annual report on Form 10-K. This audio cast is copyright material of Blackstone and may not be duplicated without consent. With that, I'd like to turn over the call to Brad Marshall.

A finance executive with a satisfied smile reviewing a pile of documents in their office.

Brad Marshall: Thank you, Stacy, and good morning, everyone. Thanks for joining our call this morning. So turning to this morning's agenda, I'm going to start with some high-level thoughts before Jon, Carlos and Teddy go into some more details around our portfolio and this quarter's results. BXSL reported another strong quarter of results, including net investment income or NII of $0.87 per share, representing a 13.1% annualized return on equity. Our NII per share was impacted by $0.02 per share from accrued capital gains incentive fees. These results reflect continued strong credit performance with a minimal nonaccrual rate of 0.1% at cost, and a robust 11.8% weighted average yield on debt investments, benefiting from the current elevated rate environment.

We also have the second best quarter since our IPO from an earnings standpoint, with net income of $0.96 per share, which resulted in a NAV per share increase to $26.87. Our distribution of $0.77 per share is well covered at a 113% and represents a 11.5% annualized distribution yields, one of the highest among our traded BDC peers with as much of their portfolio invested in first lien senior secured assets with BXSL at 98.5%. Moving to Slide 5. As we discussed last quarter, we’ve been positioning BXSL for an anticipated ramp up in deal activity. We saw the start of that cycle in the fourth quarter, which has continued into the fourth quarter of this year, we had nearly $1.2 billion in new investments, commitments at par, which was the most active quarter since 2021.

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