Focus of Article: The focus of this two-part article is a very detailed analysis comparing Blackstone Secured Lending (BXSL) to some of the company’s business development company (“BDC”) peers (all sector peers I currently fully cover). I am writing this two-part article due to the continued requests that such an analysis be specifically performed on BXSL and some of the company’s BDC peers at periodic intervals. For readers who just want the summarized conclusions/results, I would suggest to scroll down to ...

Over the past couple of months, I have been quite vocal about how the fears of lower interest rates and their effects on the BDC earnings have been overblown.Roberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work includes the developm ...

Group 1 - The article highlights the risk of dividend cuts looming over the Business Development Company (BDC) industry due to falling interest rates, which many BDCs are sensitive to [1] - It identifies a specific BDC that is considered to be insulated from the risks associated with declining interest rates [1] Group 2 - The article does not provide any additional relevant content regarding companies or the industry beyond the points mentioned above [2][3]

Core Insights - The current market environment is favorable for income investors, particularly as the focus shifts towards AI stocks with high valuations, suggesting a potential opportunity for defensive investment strategies [2]. Group 1: Investment Focus - iREIT+HOYA Capital specializes in income-producing asset classes, aiming to provide sustainable portfolio income, diversification, and inflation hedging [1][2]. - The investment group offers high-yield, dividend growth ideas, targeting dividend yields up to 10% across various asset classes including REITs, ETFs, closed-end funds, and preferred stocks [2]. Group 2: Market Context - The market is characterized by a significant interest in AI stocks, which are currently trading at elevated valuations, indicating a potential misalignment in investment focus that could benefit income-oriented strategies [2].

Focus of Article: The focus of PART 1 of this article is to analyze Blackstone Secured Lending’s (BXSL) recent results and compare a handful of the company’s metrics to 11 business development company (“BDC”) peers. This analysis will show past and current data with supporting documentation. Table 1 will compare BXSL’s recent net asset value (“NAV”) economic return (loss), adjusted net investment income (“NII”), stock price to annualized NII ratio, and percentage of total investment income attributable to c ...

Core Insights - The article analyzes Blackstone Secured Lending's (BXSL) recent performance and compares it with 11 business development company (BDC) peers, focusing on key financial metrics and investment portfolio characteristics [1][2][3]. Group 1: Financial Metrics Analysis - BXSL's net asset value (NAV) per share decreased from $27.33 at the end of Q2 2025 to $27.15 at the end of Q3 2025, reflecting a quarterly decrease of 0.66% [10]. - The economic return for BXSL in Q3 2025 was $0.59 per share, or 2.16%, with trailing 12-month and 24-month economic returns of 10.85% and 25.51%, respectively [10][11]. - BXSL's adjusted net investment income (NII) for Q3 2025 was $0.882 per share, with a stock price to annualized NII ratio of 8.39x, which is below the peer average of 9.87x [21][25]. Group 2: Investment Portfolio Composition - As of September 30, 2025, BXSL's investment portfolio consisted of 97% in senior secured first-lien loans and 2% in second-lien loans, indicating a conservative investment strategy [15][16]. - The fair market value (FMV) versus cost ratio for BXSL was 0.9912x, slightly below the mean of 1.0164x among peers, indicating a minor negative trend [17]. - BXSL had only 0.1% of its portfolio on non-accrual status, which is below the peer average of 2.9%, suggesting a healthier credit profile [18]. Group 3: Comparative Performance - BXSL's cumulative realized loss per share since its IPO was ($0.13), which is more favorable compared to the peer average loss of ($0.89) [19]. - The company has a low exposure to the oil and gas sector, with only 0.75% of its portfolio in this area, which is below the peer average of 1.45% [20]. - BXSL's performance metrics indicate it continues to outperform many of its BDC peers, particularly in terms of adjusted NII and non-accrual percentages [27].

Core Insights - Blackstone Secured Lending Fund (BXSL) is distributing a well-covered near-record dividend while trading at a rare discount to net asset value (NAV) [1] - The current discount to NAV is expected to be transient if the Federal Reserve makes a final decision in December [1] - The equity market serves as a powerful mechanism for wealth creation or destruction over the long term [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1] Summary by Category Company Performance - BXSL is paying out a near-record dividend that is well-covered, indicating strong financial health [1] - The fund is currently trading at a discount to its NAV, which is an unusual situation that may not last long [1] Market Dynamics - The equity market's daily price fluctuations contribute significantly to long-term wealth creation or destruction [1] - The potential actions of the Federal Reserve in December could influence the current market conditions and BXSL's valuation [1] Investment Strategy - Pacifica Yield aims to create long-term wealth by investing in undervalued yet high-growth companies, high-dividend stocks, REITs, and firms in the green energy sector [1]

Analyst’s Disclosure:I/we have a beneficial long position in the shares of BXSL, ARCC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether ...

Core Viewpoint - The current market environment poses significant challenges for income-focused investors, with declining bond yields and high valuations in the S&P 500 index. Business Development Companies (BDCs) are highlighted as a viable option for achieving high returns, particularly Blackstone Secured Lending (BXSL) and Morgan Stanley Direct Lending (MSDL), both offering yields exceeding 11% [1][3][20]. Group 1: Market Environment - The past year has been difficult for income investors due to falling interest rates and declining bond yields, making it challenging to find attractive dividend yields [1]. - BDCs are becoming increasingly attractive as they provide direct loans to private market companies, typically yielding double-digit returns [1][2]. Group 2: Company Analysis - BXSL and MSDL are favored BDCs, both investing primarily in first-lien debt, which offers strong security and predictable cash flows. Their stock prices are currently below book value, presenting a potential long-term buying opportunity for income investors [3][20]. - BXSL has invested 97.5% of its total capital in first-lien debt, while MSDL has allocated 96% to the same, ensuring high stability even in bankruptcy scenarios [4][8]. Group 3: Portfolio Quality - BXSL's loan portfolio consists of loans to 311 underlying companies, with the top ten loans accounting for only 19% of the overall risk exposure, indicating a well-diversified risk profile [6]. - MSDL has provided loans to 218 companies, with the largest outstanding loan representing only 2% of total capital, making it more diversified than BXSL [11]. Group 4: Dividend Safety and Yield - Both BXSL and MSDL maintain stable quarterly dividends, with BXSL paying $0.77 per share and MSDL $0.50 per share, translating to annualized yields of approximately 11.5% and 12%, respectively [14][16]. - The cost-to-income ratio for both companies has remained stable, indicating responsible dividend payments supported by actual earnings [16][17]. Group 5: Valuation - Over the past year, BXSL's stock price has decreased by about 16%, while MSDL's has fallen nearly 20%, primarily due to lower interest rates affecting their fair value [18][19]. - MSDL is currently trading at a significant discount of approximately 20% to its fair value, while BXSL's discount is only 2.5%, suggesting that MSDL offers better value for investors [19]. Group 6: Investment Recommendation - Overall, both BXSL and MSDL are considered excellent choices for income investors due to their high-quality portfolios and attractive dividend yields. However, MSDL is preferred due to its higher yield and greater discount, indicating substantial upside potential if its stock price aligns with fair value [20].

Market Overview - As interest rates decline, bond yields are also decreasing, leading to a perception of an expensive market with the S&P 500 trading at 25 times blended earnings [1] Investment Strategy - PropNotes focuses on identifying high-yield investment opportunities for individual investors, simplifying complex concepts, and providing actionable insights to enhance returns [1]