Blackstone Secured Lending Fund

Please stand by, we're about to begin. Good day and welcome to the Blackstone Secured Lending Second Quarter 2024 Investor Call. Today's conference is being recorded. At this time, all participants are in a listen-only mode. If you require operator assistance, please press star zero. If you'd like to ask a question, please signal by pressing star one. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. At this time, I'd like to turn the conference over to Stacey Wong, Head of Stakeholder Relations. Please go ahead.

Thank you, Jennifer. Good morning, and welcome to Blackstone Secure Lending Fund's second quarter conference call. Joining me today are Brad Marshall and Jonathan Bach, Co-Chief Executive Officers, Carlos Whitaker, President, and Teddy Deloach, 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 to update 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 the call over to Brad Marshall.

Thank you, Stacey, and good morning, everyone. Thanks for joining our call this morning. Turning to the agenda, I'll start with some high-level thoughts before turning over to John, Carlos, and Teddy to go into details of our portfolio and second quarter results. Turning to slide four of the presentation, In my view, these results reflect the strength of our platform, leveraging the advantages of Blackstone's scale across our $1.1 trillion ecosystem and putting it to work for our investors. We're pleased that BXSL reported the best quarter of earnings on a dollar basis and the highest net asset value per share since our IPO, as well as increases in net investment income per share and net income per share compared to last quarter. Our NAI of 89 cents per share, representing a 13.2% annualized return on equity, is up from 87 cents per share in the prior quarter, and net income of $1.01 per share is up from 96 cents per share in the prior quarter. Further, net asset value per share increased by 32 cents, or 1.2%, to $27.19 from $26.87 per share last quarter. Our dividend of 70 cents per share is well covered at 116% and represents an 11.3% annualized dividend yield, 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 98.6%. Return drivers remain strong. As of quarter end, BXSL had an 11.6% weighted average yield on debt investments with less than 0.3% investments on non-incurral at cost. And we were able to amend our corporate revolver post-quarter end, leveraging the tighter market environment as you will hear later from Teddy. Moving to slide five. The second quarter was our most active quarter for originations for both committed and funded investments since 2021. With $1.3 billion in new commitments and $891 million in funding, this also marks the third consecutive quarter of over $1 billion in commitments. As a result of our broad coverage model and Blackstone's global reach, we get to see a broad range of deals that come to market, large, medium, small, and we seek to offer investors exposure to what we believe are compelling risk-adjusted opportunities at any given point in time. This quarter, we funded more middle market companies compared to recent quarters. And what we believe were high-quality transactions at lower LTVs and attractive spreads. Overall, our new fundings into new portfolio companies for the quarter were nearly 100% first-lane senior secured debt with an average, weighted average spread of approximately 524 basis points, an average OID of 1.3%, in nearly 1.5 years of call protection, and an average LTM EVDA of $119 million. Importantly, these assets had an average LTV of 37.9%, well below that of the portfolio in prior years. So while we have seen some spread compression in the private markets, these new deals funded in the quarter had a greater spread to LTV ratio or what we would call spread per unit of risk. And while we have a large team focused on our assets, we also strive to minimize the company's expenses. We start with a lower headline for fee structure compared to the average of our traded BDC peer set, which we believe investors recognize. We then further aim to minimize other expenses and the cost of our liabilities. Teddy will talk about our liabilities a bit later. But since quarter end, we negotiated lowering the spread of our nearly $2.1 billion revolving credit facility to the lowest among our traded BDC peers. At the same time, we further diversified our lender base by adding additional banks to our revolver group with now over 15 participants. Finally, with recent market volatility, we believe private capital solutions will remain attractive to scale borrowers given uncertainty of execution by private lenders. I'm very pleased with this quarter's progress in every regard. We had robust origination at what we view overall as attractive spread per unit of risk. We continue to see strong earnings as measured by income and NAV. And we have repriced our cost of our capital after quarter end to position BXSL to operate an environment where rates are likely to come in. For us, it's about seeking to maximize results in every area of BXSL for the benefit of our shareholders. With that, I will pass over to my colleague, Jonathan.