Blackstone Secured Lending Fund

Good day and welcome to the Blackstone Secured Lending Third Quarter 2024 Investor Call. Today's conference is being recorded. If you require operator assistance at any time, please press star zero. At this time, all participants are in a listen-only mode. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're 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 Wonk. head of stakeholder relations. Please go ahead.

Thank you, Katie. Good morning and welcome to Blackstone Secure Lending Fund's third quarter conference call. Joining me today are Brad Marshall, co-chief executive officer, Jonathan Bach, co-chief executive officer, Carlos Whitaker, president, and Teddy Deloach, chief financial officer, and other members of the management team. 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 factor section of our most recent annual report on Form 10-K. This audio cast is copyrighted material of Blackstone and may not be duplicated with outcome fit. With that, I'll turn the call over to Brad Marshall.

Thank you, Stacey, and good morning, everyone. Thanks for joining our call this morning. Before we dive into details with John, Carlos, and Teddy, I'd like to begin with some high-level thoughts related to our third quarter results. DXSL reported another strong quarter of results with active deployment, growth in net investment income, increased net asset value, and continued solid credit performance. These strong results, quarter over quarter, reflect the significant power and the scale of the Blackstone platform, one of the many differentiating factors we have in private credit space. In addition to being the largest third-party private credit business, Blackstone is the world's largest private equity platform, the world's largest owner of commercial real estate, and the largest discretionary allocator to hedge funds. The interconnectivity we have as a firm has allowed us to grow our credit platform into the largest business unit of Blackstone, further helping us make disciplined and timely investment decisions which ultimately benefit our shareholders. Let's turn to our results. Our NII of $0.91 per share represents a 13.4% annualized return on equity and is up from $0.89 per share in the prior quarter. Further, net asset value per share increased by $0.08 to $27.27 from $27.19 per share last quarter. Our dividend of $0.77 per share is well covered at 118%. 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 98.7%. Return drivers also remain strong. As of quarter end, BXSL has an 11.2% weighted average yield on performing debt investments with 0.2% of investments on non-accrual at cost. The third quarter also marked another first for both the BDC industry and BXSL. In September, Moody's upgraded the credit ratings for both BXSL and our non-traded BDC from BAA3 to BAA2, making Blackstone the only manager with two BDCs with that distinction. These ratings, along with our investing discipline, may help us to further drive down the lower cost of capital and focus on investing in what we believe are higher quality assets in BXSL. We continue to ramp up our origination for both committed and funded investments. We ended the quarter with $1.1 billion in new commitments and $956 million in fundings, marking our fourth consecutive quarter of over a billion dollars in commitments and our highest quarter of funding since 2021. Last quarter, we discussed our broad coverage model and the prospect for increased deal flow as short-term rates were projected to fall. We have seen a pickup in BXCI's investment pipeline as well. Since Q1 of last year, we have seen an over two times increase in the number of deals in our BXCI pipeline. BXCI was sole or lead lender in over 70% of our deals this quarter, putting us in a position to control deal structures and documentation. BXCI's scale allows us to be relevant for the full range of midsize to larger businesses that are looking to grow. Looking at the broad macro environment, we've continued optimism for a soft landing. The other week, we saw the lowest level of initial jobless clients CLAIMS SINCE MAY, AND REPEATED JOBLESS CLAIMS ALSO APPEAR TO BE LEVELING OFF. Q3 GDP GROWTH CAME IN AT 2.8% ANNUALIZED. WITH WHAT WE VIEW AS CURRENT STRONG GROWTH AND AT LEAST A PAUSE IN LABOR MARKET WEAKENING, WE BELIEVE THERE'S MOMENTUM TO CARRY THE CURRENT ECONOMIC EXPANSION FORWARD UNTIL THE SUPPORT FROM FED RATE CUTS IS FELT THROUGHOUT THE MARKET. FOR PRIVATE CREDIT, We believe this means that 2025 may look a lot like 2021 from a deal activity standpoint. Economic growth is sufficient. Private equity dry powder is high. Market clearing prices moved higher. And as such, we expect a pickup in the M&A activity, which should be supportive for both deployment and repayments, which we believe to be positive for our investors. With that, I will pass over to my colleague, Jonathan.