Blackstone Secured Lending Fund

and welcome to the Blackstone Secured Lending First Quarter 2025 Earnings Call. Today's call is being recorded. At this time, all participants are in 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'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 Justin Farshidi, Principal for Blackstone Credit and Insurance. Please go ahead.

Thank you. Good morning and welcome to Blackstone Secured Lending Fund's first quarter conference call. Joining me today are Brad Marshall, Co-Chief Executive Officer, Jonathan Bock, Co-Chief Executive Officer, Carlos Whitaker, President, Teddy Deloge, Chief Financial Officer, and other members of the management team. Earlier today, we issued a press release with a presentation of our results and filed our 10-Q, both of which are available on the shareholder resources 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 this 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 Form 10-Q filed earlier today. This audio cast is copyright material of Blackstone and may not be duplicated without consent. With that, I'll turn the call over to Brad Marshall.

Great. Thank you, Justin, and good morning, everyone. Thanks for joining our call. Before I dive into some details with John, Carlos, and Teddy, I do want to hit on some high-level views of the current environment and thoughts around our first quarter. Since the start of the year, uncertainty around tariffs and their potential impact on economic growth and inflation has certainly impacted investor sentiment. While we believe it's too early to assess the full implications of tariffs, the complex nature of the situation means that patience and discipline are key, tenets we have had since BXSL's inception. On the broader economy, it's important to remember we entered this period in a fundamentally strong position, and we believe those fundamentals remain intact. Blackstone has lived through multiple cycles in its four-decade history, and we've used the firm's significant scale and data insights to benefit both our clients and portfolio companies. This includes investing in sectors that we think are more resilient in periods of volatility, and it also includes using resources like our value creation program to add value. For example, we have identified a relatively small group of companies in our portfolio that may be impacted by tariffs. And our team is actively helping these companies, whether it be through our procurement and e-sourcing programs or supply chain consulting. Of course, it's one thing to highlight tariff exposure. It is certainly another thing to have the resources to potentially manage its impact. Despite the near-term market volatility, BXSL reported another strong quarter. Our net investment income, or NAI, of 83 cents per share this quarter represented a 12.1% annualized return on equity and is made up overwhelmingly of interest income rather than income from PIC or dividends. Net asset value per share remained flat at $27.39 quarter over quarter. Our distribution of 77 cents per share was covered by our net investment income per share by 108% and represents an 11.2% annualized distribution yield, one of the highest among our traded BDC peers, with as much of their portfolio invested in first-lane senior secured assets. BXSL still has among the lowest management fee and lowest G&A costs as a percentage of NAV across our traded BDC peers, which allows us to focus on high-quality assets. Finally, Credit quality remains strong with 0.3% of investments on non-accrual at cost and 0.1% at fair market value, well below the average of our traded BDC peers of 2.7% and 1.2% respectively in the fourth quarter. Last quarter, we discussed positioning BXSL for an anticipated ramp up in deal activity in the back portion of 2025. And despite market uncertainty, we've been building our investment firepower to take advantage of opportunities that arise. For example, this quarter, we issued $500 million of new debt at a coupon of 5.3% or a spread of 147 basis points over the relevant benchmark treasury rate, the tightest spread compared to traded BDC peers in 2025. Our liability stack continues to be diverse with floating rate components allowing us to help offset the reduced base rates on the asset side this quarter. In fact, the total weighted average interest rate on drawn debt decreased to 5.01% in Q1. In Q1, we had over $750 million of investment commitments, our sixth consecutive quarter of $750 million or above in total commitments. We also had nearly $700 million in new investments. This was offset by an increased repayment of $900 million during the quarter. We believe the fund's capitalization positions it well for potential future opportunities amidst market volatility. And with that, I will pass over to my colleague, Jonathan.

Thank you, Brad. And let's turn to slide six. We ended the quarter with $12.8 billion of investments at fair value, over a 20% increase from the $10.4 billion year-over-year. In Q1, BXSL also added 14 new borrowers to our portfolio while exiting six positions, netting a total of 284 companies. ending leverage and average leverage ticked up slightly compared to prior quarters at 1.19 times and 1.16 times, respectively, remaining near the middle of our average target range of 1 to 1.25 times. Our weighted average yield on performing debt investments at fair value was 10.2% this quarter end compared to 10.4% last quarter. The yields on new debt investment fundings and assets sold and repaid during the quarter averaged 9.5% and 10.3% respectively. I jumped to slide seven. 98% of BXSL investments are in first lien senior secured loans, and 99% of those loans are to companies owned by financial sponsors who generally have significant equity value in these capital structures demonstrated by an average loan-to-value of 47.4%. Our portfolio also has an LTM EBITDA base averaging $210 million, with year-over-year EBITDA growth at nearly 10%. This growth percentage is nearly two times larger than that of companies in the Lincoln International Private Market Database. And while we evaluate opportunities across the size spectrum, we continue to see strength of performance from larger companies, which is the majority of our portfolio. Now, while we continue to emphasize these stats on every earnings call, the recent tariff announcement and subsequent market volatility are strong reminders on why we choose to focus on first-linked new secured lending to larger companies in what we believe are good investment neighborhoods. Turn to slide eight, which focuses on our industry exposure. On tariffs, we believe there's a potential material credit impact to a relatively small group of our portfolio companies. Now, recall, we focus on domestic businesses in less capital-intensive sectors with our highest exposures in software, professional services, and healthcare provider services in those industries. Now, this quarter, nearly 100% of the new private debt investments during the quarter were first-linked senior secured positions with an average LTV at 40%. meaning there's significant amount of capital beneath our loans. Our first lien, senior secured debt in lower default rate industries, is what we view as a very defensive place for investors, and that's further evidenced by our low non-accrual rate of 0.3% at cost compared to our traded BDC peer average of 2.7% from last quarter. Now, we remain consistent in our focus on strength of documentation and amendment activities. And as a reminder, we remain highly focused on control and lender protections when we negotiate our credit agreements. Amendment activity was up slightly quarter over quarter by count with 48 of BXSL's private borrowers amending documents in Q1. Now, nearly all these amendments weighted by position size were associated with add-ons, M&As, DDTL extensions, immaterial technical matters, or slight changes to terms. Beyond these amendments, only one amendment accounting for fewer than 15 basis points of the portfolio cost was associated with an underperforming investment marked below 85 and featured additional document tightening as well as incremental economics. With that, let me turn it over to Carlos.

Thanks, John. Turn to slide nine. BXSL maintained its dividend distribution of 77 cents per share as we remain focused on delivering high-quality yield to shareholders. During the quarter, we had another equity realization. Over the past few years, we've had several successful exits highlighting ways that can potentially positively impact returns through our selective equity investments. And while this has not been more than 1% to 2% of our portfolio historically, it has the ability to add value. This quarter, for instance, we realized our equity in frontline, where we made a $2.9 million equity investment and realized a gain of over $7 million. Although this is smaller than some of our other exits, we believe it is important to have these in our portfolio. I echo the point on the strength of BXSL's portfolio owed to the scale and platform of Blackstone that Brad emphasized earlier. Our BXCI platform allows us to be active with existing companies. We can expand a portfolio with newer borrowers and aim to enhance the quality of our assets. But our ongoing involvement with our portfolio companies is now more important than ever. Recall, once we make an investment, we try to be more than capital providers. In an uncertain economic environment, not only does our CIO office leverage Blackstone's scaled insights to help identify and proactively mitigate portfolio risks, but our BXCI value creation program also supports our portfolio companies by seeking to enhance revenue and lower costs. For example, As mentioned earlier, it's one thing to highlight tariff exposure, and it's another thing to have the resources to potentially help manage their impact. This program is used by over 90% of BXDI's portfolio companies who are offered the service and can help create equity value either by plugging borrowers into the Blackstone ecosystem or by simply saving them capital through our group procurement system. truly a differentiated offering in the private credit space. Even better, it is offered at no charge to eligible participants and at no expense to BXSL. And it has created $5 billion in illustrative value for BXCI portfolio companies since its inception. And more specifically right now, portfolio companies are looking for guidance on how to price products given tariff impacts. In response, we have made more introductions to our consulting partners who provide pricing expertise and facilitate the development of tailored, industry-specific pricing strategies. We have been actively utilizing our Blackstone Sourcing Center, where we have over 57,000 supplier contracts in 106 countries that have been included in our e-sourcing events. This sourcing center supports bids across multiple geographies and languages. Further, as an added bonus, BXCI's Value Creation Program and Blackstone's market-leading scale provide us with real-time insights from other Blackstone business units and proprietary views from our portfolio companies' CEOs. This, in turn, can support our investment expertise as we selectively deploy capital into new opportunities we see in this market. And with that, I'll turn it over to Teddy.

Thanks, Carlos. I'll start with our operating results on slide 10. In the first quarter, BXSL's net investment income was 189 million, or 83 cents per share, in dollar terms up over 14% year over year, and the highest dollar amount since inception. Total investment income for the quarter, a record for the fund, was up 54 million, or 18% year-over-year, driven by increased interest income. As a reminder, we amortized 100% of OID earned over the life of each loan versus recognizing OID upfront as a fee at close, which we believe leads to greater stability over the long term. As Brad noted, we did see elevated repayments in the first quarter, which accounted for nearly 13 million of accelerated OID prepayment premiums, and unamortized discounts in the first quarter. This, in turn, flows through interest income, representing about $0.06 per share. Interest income excluding PIC, fees, and dividends represented approximately 94% of our total investment income in the quarter. Turning to the balance sheet on slide 11, we ended the quarter with $12.8 billion of total portfolio investments at fair value, Nearly $7.4 billion of outstanding debt and over $6.2 billion of total net assets. NAV per share at quarter end was $27.39, flat since the fourth quarter of last year. NAV per share was supported by $0.06 per share of excess earnings to our dividend, $0.11 from share issuance from our ATM program at a premium to NAV, However, offsetting this was 17 cents of unrealized losses in the portfolio, primarily concentrated to a small handful of larger positions. We continue to see stable fundamentals across the majority of our portfolio companies, with only 0.7% of debt investments at cost marked below 80. Further, while we are focused on maintaining a senior secured portfolio, we also had a realization on an equity position, as Brad noted earlier, receiving proceeds of over a 2.5x the original investment contributing 3 cents of positive impact to NAV. BXSL funded approximately 700 million in the quarter and committed over 750 million and held an estimated additional 59 million committed by BXCI and earmarked for BXSL as of March 31st. Net funded investment activity was negative 289 million, as deployment activity was offset by 978 million of repayments, primarily due to a few larger repayments during the quarter. This represented an annualized repayment rate of 28% of the portfolio at fair value, up from 6% from the prior quarter. Note, in periods of public market volatility, and or slower M&A volumes, as we've seen in recent periods, we would expect more muted repayment volumes. Next, slide 13 outlines our attractive and diverse liability profile, which includes 38% of drawn debt in unsecured bonds that are not swapped. These unsecured bonds have a weighted average fixed coupon of less than 3%, which we view as a key advantage in an elevated rate environment and contributed to an overall weighted average interest rate on our borrowings of 5.01%, down from 5.17% last quarter. This also compares to a weighted average yield at fair value on our performing debt investments of 10.2%, down from 10.4% in the fourth quarter. We have $2.2 billion of debt maturities within the next two years, and our debt and funding facilities have an overall weighted average maturity of three and a half years. Further, we continue to optimize our cost of capital. As Brad noted, in February, we issued a $500 million, 5.3% year bond, which priced at 147 basis points over the relevant benchmark treasuring. As we have noted previously, as spreads have tightened across liabilities since 2023, we have been highly focused on bringing down our cost of capital through both new issuance at tighter levels and amendments to existing facilities. Today, we have one of the lowest cost revolvers across traded BDCs at SOFR plus 152.5 basis points at the tightest tier. We've issued 1.6 billion of new bonds since the start of the second quarter of last year, which included the tightest new issue spread in the last two years within our traded BDC peer set. We are one of the highest rated BDCs with a BAA2 and stable outlook by Moody's and BBB- and positive outlook by S&P. We issued our inaugural private credit CLO in the fourth quarter, with senior most tranche pricing at SOFR plus 155, 151, one of the tightest spreads on the senior most notes of any middle market private credit CLO among 200 plus issued since 2021. As a result of these actions, the first quarter 2025 weighted average spread on our floating rate committed liabilities was just SOFR plus 167, 30 basis points tighter than a year ago. BXSL's overall cost of debt of 5.01% is among the lowest we see across the traded BDC peer set last quarter. Additionally, total liquidity was 3.4 billion of cash and undrawn debt available to borrow at these low financing costs, while ending leverage as of March 31st was 1.19 turns, slightly up from 1.17 turns in the first quarter. and near the midpoint of our target range of one to one and a quarter turns. With that, I'll ask the operator to open it up for questions. Thank you.

Thank you. If you would like to ask a question, you may do so by pressing star one on your telephone keypad. We ask you limit yourself to one question and one follow-up to allow as many callers to join the queue as possible. Once again, star one for questions. We'll go first to Finian O'Shea with Wells Fargo Securities.

Hey everyone, good morning. First question on dividend coverage. If you strip out the prepay fee and look back support, it looks like you're right at the dividend. So understanding there's perhaps some leverage headroom and whatnot, but assuming the SOFR curve puts you under the dividend, curious as to your policy on spillover, if you'll use that or adjust the base dividend as needed. Thanks.

Thanks, Ben. It's Brad. Why don't I start and then John may touch on the spillover. So I think since rates peaked last year, we've seen three cuts, about 100 basis points. I think we're, as you point out, the curve would suggest that there's more cuts. And obviously that then has an impact on earnings. Earnings will come down. So there's kind of three ways you can offset that, Finn, as you know. You can see more turnover in your portfolio, which creates fees, which you saw this quarter. We had more turnover. Challenge with that, as you point out, is a little less predictable. So the second way you can manage falling rates is you can lower your expenses. We talked, Teddy talked a little bit about what we did in the liability front with issuing bonds that are 147 basis points over, which we think are pretty low. We continue to focus on bringing down our G&A fees as much as possible. And as you know, our overall fee structure is the lowest, among the lowest in the BDC space. So that's in works. We'll continue to focus on that. And then the third is we can take more risk. We can put more junior assets in the portfolio. We could look at harder sectors, harder credits, and try and offset lower base rates with more spread. But that's not us. So we know how that movie ends. So we're going to continue to focus on quality. Today, this dividend is 11.2%. And if earnings then we'll reflect that in the dividend going forward as it relates to rates.

And on spillover, I'd say that if you look at it, there's some benefits. And just as a quick reminder, understand that the cost of the underlying spillover at roughly 4%, right, that's a very cheap cost of capital as you think about retained equity. And it also builds an earnings base, right? It builds an earnings base because your equity has grown but you've not issued new shares to do so. So you have a level of additional earnings impact as a result of spillover retention, which is positive. I'd say when you think about management, it's return of capital. Our view is simply, if we think about where the shares trade and the valuation impact of having additional earnings, I'd say as opposed to a BDC that might be below book value, Certainly returning spillover in that case makes complete sense because you're giving people whole dollars as opposed to owning shares at a discount. And so for us, we'll always look at it, but at a positive earnings profile, continued strength of the portfolio, and an attractive valuation, it makes sense to have a level of retention, but we'll always revisit it. It's a good question.

Okay, thanks. And as a follow-up, I wanted to ask about donuts, the large refi. Wondering how hard did you fight to keep that and where maybe you lost out? Obviously, there's the value creation program. You've been a pioneer in repricing technology. But just to get a sense on the limitations of those approaches and perhaps the outlook for higher repays on the go forward.

Thanks. Yeah, that deal was refinanced, the whole business securitization then, so not much for us to do there. Great credit. It was a good asset in our portfolio. We saw two other larger repayments that went to strategics, so not a lot we could do there either, but our policy will remain the same. Try and hold on to good assets as much as possible and let the less good assets get repaid over time.

Thanks so much. Thank you. We'll take our next question from Mark Hughes, Tourist Securities. Mr. Hughes, please go ahead. Your line is open. Go ahead, Mark. Please check your mute function. Hearing no response. Let's jump to the next one.

We'll go to Melissa Waddell with JP Morgan.

Good morning. Thanks for taking my questions today. When we think about sort of the amount of leverage in the portfolio, when you, on a growth basis, it seems towards the higher end of the range, but when we back out the amount of cash, on the balance sheet, it takes you down towards the low end of the range. By our math, it's about 103 net debt to equity. Assuming that you would sort of agree with this, it looks like you might be sitting on some dry powder. And as you think about deploying capital in this environment, curious about how you pace that. Obviously, you've got access to additional capital through the at-the-market program, In terms of the environment and the spread environment that you're seeing, given the amount of uncertainty from policy, how eager are you to deploy additional capital?

Yeah, I'm happy to take that. Thanks, Melissa. So, you're right. We did have a little bit of excess cash in the end of the quarter. That was really tied to timing of some repayments towards the end of the quarter. You know, backing that out, we're, you know, closer to the lower end of the range from a leverage perspective. I think from our perspective, as we think about periods of volatility, uncertainty, what we've seen really in the liquid markets in the last month or so has been a bit of a shift from a deal flow from the liquid markets to the private market, right? We saw that play out in certainly in 2023. That led to fairly material spread widening in that period. From our perspective, we want to be well capitalized to take advantage of that. We are seeing a bit of a pickup in the pipeline in the near term. We'll see how that translates to deal activity in the next quarter, but we feel very good about how we are capitalized today. I mentioned our low-cost financing at 5.01% interest rate. interest rate across our funded liabilities. We have unfunded liabilities at low cost as well. So we'll lean into that as we see the market opportunity.

And Melissa, what I'd add to that is our pass rate in the first quarter was probably among the highest it's been in a long time. Just as you think about wanting a little bit more clarity in the direction of travel in the U.S. and global economy. We were pretty cautious. We built up some capital to invest into the dislocation, and we found a few things, but we probably were more on the past side. As I sit here today, we have our kind of heads-up meeting. We have 20 deals going through that heads-up. review process, which is pretty high. We're obviously doing this instead of sitting in that meeting, so we don't know the quality. But in terms of the number of deals coming through, it's actually pretty steady. In terms of spreads, what we have seen, clearly the public markets, you saw some spread widening. mostly in the more tariff impacted sectors. And I would say similarly in the private markets, the lower quality assets, you've seen spreads widen by 50 to 100 basis points. The higher quality assets, less. So there's definitely still a quality bias, and that's probably somewhere around, you know, maybe it's up 25 basis points. but not much more than that. So we'll, you know, continue to see, you know, the markets evolve here and hopefully get more clarity and M&A will pick up. But as Teddy said, in the meantime, more deals are shifting to the private markets away from the public market.

I appreciate all that color that you gave there. I wanted to follow up also on Finn's question too. When we back out the six cents a share of NII that came from the repayment activity, would you say that most of the decline in base rates is effectively fully running through the income statement at this point? I know there tends to be a little bit of a lag, but just curious if that's fully caught up now. Thank you.

Yeah, thanks Melissa. I'm happy to take that. Yes, we would expect the current base rate environment to be fully reflective of earnings in the quarter.

Thank you. We'll go next to Hallie Sheath with Raymond James.

Good morning. Thanks for the question. We've heard from other VDCs this earnings season who are shifting largely down market while your shift is moving further up market. Can you expand on your strategy there?

Yeah, I can hit on that, Ali.

So it's a little bit what I was saying earlier with Ben's question on where we want to be investing. And I think in market times of volatility, uncertainty, you definitely want to be shifting to higher quality assets. And for more expensive BDCs, that's really hard to do because their expense load is really high. But as you know, with BXSL, the management fees, the G&A fees, the liabilities are low. And so that allows us to look at higher quality assets. And we think those are just more resilient. We think their bigger companies are better. We think that the sectors we're picking are more resilient. And so that will remain our strategy. We do not want to reach for risk. in periods of volatility, we think it's a much better strategy to maintain quality, even if spreads, you know, compress or don't widen as much as some of the lower quality assets.

Got it. Understood. Thanks. And then a real quick follow-up. Have you received any specific feedback from portfolio companies on tariff impacts and seen any emerging patterns or trends with specific industries seeing stress? And accordingly, has your investment strategy shifted going forward in terms of targeting certain industries or de-emphasizing exposure in other industries?

Yeah, thanks. Thanks, Holly. I can take that. So I think overall, our view is it's still very early to tell. As we look at our portfolio, what are we not doing? We're not financing foreign companies selling physical goods in the U.S., so we feel pretty good about where we're positioned. The industries that you see on the page, predominantly U.S.-based software services and healthcare, these are business models that are and should be less impacted as a result of tariffs. As we characterize that, it's about 90% of the portfolio that's in those less impacted areas. Now, John mentioned it, but we did do a name-by-name analysis actually across 2,000 sub-investment grade and investment grade companies across our platform. That included all 284 companies in BXSL and found a relatively small group of companies that may be materially impacted. So, again, I think it's a little bit too early to tell, but overall feel very good about positioning, not changing how we're thinking about investing, right? As Brad mentioned, we've taken a defensive first strategy that's leaning into first lean exposure, that's leaning into more stable growing sectors in the U.S. You know, we do think Some parts of direct lending may be tested as a result of tariffs. If you think about the more fragile parts of the economy, junior exposure, non-sponsor exposure where there's limited junior capital support potentially could be under stress and may have been, you know, less tested in recent environments. So we feel very good about our position, continue to take more of a defensive approach.

And, Ali, Carlos hit on this, but, and I did as well, It is, and I mean this quite sincerely, it is one thing to talk about tariffs and their impact, but then to have the ability to go and try and do something about it, and the Blackstone Value Creation Program, this is what it's designed for. It's designed to help with procurement. It's designed to run e-sourcing programs to lower costs of goods or get better deals on services or products. We have a consulting effort. So this team that sits in credit, all they do is call our companies and say, hey, we noticed that potentially your costs are up because of tariffs. What can we do to help? And it's kept, since Liberation Day, kept that team quite busy seeing where we can indeed help.

Got it. Appreciate the caller. Thank you. We'll take our next question from Paul Johnson with KBW. Yeah, good morning.

Thanks for taking my question. I'm just curious if you can maybe kind of parse out a little bit just as, you know, the 17 cents or 60 basis points, so kind of from that decline on the portfolio this quarter, how much may have been driven to more credit-specific stuff versus market markets?

Yeah, I'm happy to take that. Thanks, Paul. So just to summarize, as we mentioned, you know, NAV flat quarter over quarter, 6 cents benefit from out earnings, 11 cents benefit from ATM issuance, and then 17 cents unrealized losses. As we dig into that 17 cents, there are really two primary drivers of it. The first was about 30% of the net impact was actually repayments. That's a reversal of unrealized gains in the quarter tied to that repayment activity. Just under half of that impact was one company, and that's Medallia, which we talked about last quarter. That was now marked down to 89 in the quarter, down from 94. Without getting into too much detail, you know, that mark reflects a more competitive pricing environment. We are backing a sponsor here who is highly specialized in this space with significant cash equity. We've been supportive of management and sponsor actions. We're actually using Blackstone resources to also help where possible. Product quality there actually remains very high. You know, Gartner recently rated Medallia as a leader in their voice of customer's platform. So one will continue to watch. I think if you look across the portfolio overall seeing healthy trends, 75% of our companies were either marked up or flat over the prior quarter. And if you strip out Medallia, the vast majority of markdowns were one point or less, predominantly performing names marked above 95. So overall, we feel good about the portfolio. 70 basis points of assets marked below 80, and it's well below the average of the traded BDC pure set, and non-accrual is just 30 basis points.

Thanks for that.

That's really good color. And I also appreciate all the detail that you guys provide on amendments and amendment activity during the quarter. It would be great to hear that same kind of information from some of your peers, but just going to one specific credit during the quarter, Navigator. Looks like it may have been kind of mucked up just marginally, but that was another loan that was kind of in the 80s. Last quarter, maturity was pushed out with a little bit of a pick in there. Just wondering if that was the one company you'd mentioned regarding the kind of the negative amendments in the quarter and any kind of color you might be able to provide there.

Yeah, just on that company, you're right.

They underperformed last year. They started this year stronger than anticipated, so we did mark that up during the quarter. I think we probably had more than a dozen names that ended up getting marked up just because they came out, started the year much stronger than they ended the year.

Okay, thanks for that.

And then lastly, for me, just on kind of the equity co-investment, you know, that you'd kind of mentioned on the call, I was just wondering, you know, how, you know, it's obviously a very small percent of the portfolio, but, you know, how frequently, I guess, are you able to, you know, get any sort of equity co-investment, you know, in the fields? knowing that you're obviously competing in the larger end of the market, one would think that it's very competitive there and a little bit harder to come by, but just wondering how frequently you're able to see that and that's all for me. Thank you.

Yeah, actually, just because of some of the things that the value that we can kind of add to many of these companies because we can plug them into the Blackstone Network, we do have a little bit more ability to get equity in the businesses where we want to get equity. So despite us focusing on the mid to larger end of the market, I think it's available to us where and when we want it. Not all great credit stories are great equity stories in our mind, so we pick our spots. And we do want to highlight when we do have realizations like Frontline and some of the previous ones we've had, because they're nice kind of offsets to any potential kind of credit losses. And we do have a more strategic contribution when we make those equity investments. It'll never be a big part of the portfolio, though, Paul. We want to make sure we stick to kind of what we've

advertised and so it's going to be very selective.

Thank you. As a reminder, star one, if you would like to ask a question. We'll go next to Maxwell Fritcher with Truist.

Hi, good morning. I'm on for Mark Hughes. Sorry for the earlier confusion. Given the current macro backdrop, had there been any Been any change in your credit evaluation process on new deals?

Yeah, I mentioned earlier that the first quarter was a pretty – it was actually a busy quarter from an underwriting standpoint, but we ended up passing on a lot. of deals, especially on the larger end, primarily because of just the backdrop, which is a little bit uncertain, and as tariff diplomacy takes a little bit of time to get sorted out. But our underwriting standards haven't changed. We continue to be focused on sectors that we ultimately think will be less impacted by economic weakness, so sectors that tend to outgrow the broader economy, like software, technology, healthcare, IT, business services, and underweight, more product-heavy, consumer-focused businesses. So that remains true. It remains, I guess, especially true right now, just given what's potentially going to happen companies are potentially going to be impacted by tariffs. But I think we're underwriting a little less growth in the economy, and that will be reflected in leverage.

That will be reflected in the sectors we invest in and the companies we choose.

Understood. Thank you. Sorry if I missed this and it was touched on, but was there any commonality among the larger repayments in the quarter, if there were any large repayments? And then maybe how have repayments trended thus far into 2Q? Thanks.

I'm happy to take that, Max. So I wouldn't say there was any specific commonality. It was a relatively small handful of companies that were repaid. A couple of them were larger positions. Brad mentioned two were refinanced via the securitization markets. We view those as success stories, right? Companies that were smaller, we grew with, we grew exposure, and then had access to a much lower cost market that even the public market had a hard time competing with. You know, two were sold to strategic, a couple of sponsors, sponsor sales. We actually had very limited, if any, exposure refinanced by the syndicated market. You know, I don't want to give forward-looking guidance, but I think generally speaking, as it relates to repayment in periods of excess volatility, combination with low M&A, we would expect repayment volumes to be quite muted. And those are those two things we are seeing this quarter.

Very good. Thank you. Thank you.

We'll take our final question from Finian O'Shea with Wells Fargo Securities.

Hey, everyone. Thanks for the follow-up. I wanted to ask about growth. It looks like you hit the brakes on the ATM early in the quarter and just with a lot of the talk that came out on the Q&A and on being more selective. you know, what we should expect, say, this year, or at least for the outlook as you can see it, you know, say starting, you know, now or tomorrow as you're out of the blackout window on equity growth for the ATM. Thanks.

I think you can expect it to be tied with originations, and so clearly as we're slowly ramping, and Brad outlined kind of the build in the portfolio, You can expect that to be a part of it. However, if you look back, when we saw that deal activity would be muted, you can see that early on it ceased. So answers as a part of it, I'd say it's probably a little less emphasized now as a result of the slow markets, but to the extent deal activity picks up, so too with ATM issuance, always a creative and designed to drive an attractive return for our end investors.

Okay. Thanks so much.

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

Thank you, and thanks to all of you for joining today's call. We look forward to our follow-up discussions, and we'll reconvene again next quarter.