Blackstone Secured Lending Fund

Please stand by, we're about to begin. Good day and welcome to the Blackstone Secured Lending Second Quarter 2025 earnings call. Today's conference is being recorded. All participants are in a listen-only mode. If you require operator assistance at any time, please press star zero. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. 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 Ms. Stacey Wong, head of stakeholder relations. Please go ahead.

Good morning and welcome to Blackstone Secured Lending Fund Second Quarter Conference call. Joining me today are Brad Marshall, Co-Chief Executive Officer, Jonathan Bach, Co-Chief Executive Officer, Carlos Whitaker, President, Eddie DeLauge, 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, .bxsl.com. We will be referring to that presentation throughout today's call. I'd like to remind you that the call names move 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 refer to the risk factors section of our form 10-Q filed earlier today. The 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.

Thank you for joining us for our second quarter earnings call. Before we begin our call today, I want to address the tragic events on Monday, July 28th, where four innocent people were killed in a census act of violence at our 345 Park Avenue headquarters. This included our beloved colleague, Wesley Lepatner. Our thoughts and prayers are with Wesley and the other victims' families and friends and all those who are impacted in one way or another by this awful event. With this type of tragedy so recent, it's hard to shift to discussing the quarter, but if you knew Wesley, who had a seamlessly impossible mix of fierce drive, warmth, and care for all those around her, she would find a way to lead through this. So with that heavy transition, I will begin with some thoughts on the current environment and our views heading into the second half of 2025. From the start of the quarter until now, we can all agree that a lot has changed. Just rewinding back to April, volatility hit across asset classes. BXSL stock saw nearly five times its average trading volume. Public credit markets temporarily shut down and investor sentiment collapsed due in part to tariffs and geopolitical instability. Despite this short period of heightened uncertainty, we have seen positive trends reemerge over the past few months. Markets are back to being open. Equities have hit all-time highs. Inflation has remained muted, and we are seeing signs of macro clarity. You saw some of this materialized towards the end of the second quarter as we saw our net deployment increase compared to the first quarter. Although some of that activity came from existing portfolio companies looking to grow, we have seen a nearly 50% increase in new Blackstone Credit Insurance or BXCI global private credit deal screenings this past quarter versus the fourth quarter of last year. And while not every BXCI deal that comes through BXCI screening is suitable for investments by BXSL, this is consistent with our general view from last year that deal activity would pick up meaningfully in 2025. The drivers we believe are rooted with the prospect of lower short-term interest rates, tighter credit spreads in the public and private markets, mitigated economic uncertainty, and continued revenue growth combined, of course, with a pent-up desire to transact. Now let's turn to slide four. BXSL reported another strong quarter amidst the volatility in April. Our net investment income or NAI of 77 cents per share this quarter represented an .2% annualized return on equity and is made up overwhelmingly of interest income rather than income from pick or dividend. We believe the quality of BXSL's income has historically created a robust income stream for our investors. Net asset value per share decreased slightly by six cents quarter over quarter to $27.33. Our distribution of 77 cents per share was 100% covered by our net investment income per share and represented an .3% annualized distribution yield, one of the highest among our traded BDC peers with as much of their portfolio invested in firstly senior secured assets. Finally, credit quality remains strong. The .3% of investments are non-aggrurl at cost and at .1% at fair market value. We had no new names added to the non-aggrurl list this quarter and since BXSL's inception, our non-aggrurl rate has never exceeded 30 basis points at cost. Moving to slide five, as mentioned earlier, we've continued to prepare ourselves for what we believe will be a period of heightened deal activity with a focus on active activity within our existing portfolio companies as well as new assets. We're also spending a large amount of time on making sure we maximize the efficiency of our operating costs and our liabilities. And while the overall pipeline investment activity has picked up, there continues to be a range in the quality of deals being offered to the market. As such, we will seek to continue our disciplined approach and use our cost advantage to continue to focus on quality and not reach for risk. Leading the market with lower fees and expenses compared to our trade at BDC peers is a top priority for us as it can potentially create a stronger portfolio over time. And yes, despite a more positive outlook on the economy, which can be good time to take on risk, not all sectors and businesses will perform equally. So we will still share a healthy amount of caution going into the second half of the year. At BXCI, we have a team of 113 people in our CIO office, larger than most credit platforms in their entirety. They spend all their time reviewing data, identifying insights across the 5,000 companies we are investing across our platform, and then using that information to help our portfolio managers identify themes and build portfolios for our investors. You'll hear many of the same themes from the team this morning, but I would highlight that the quarter was supported by consistency in both performance with no new assets on our payroll and yield with a healthy pickup in deal activity as indicated by the BXCI pipeline and increase in net deployment post-liberation day. With that, I'll pass over to my colleague, Jonathan.