Financial Data and Key Metrics Changes - The company reported a net investment income of $161 million or $0.95 per share, representing a 25% year-over-year increase in total investment income driven by higher interest rates [38][46] - GAAP net income for the quarter was $171 million or $1.01 per share, up from $0.58 per share a year ago, aided by $21 million of net unrealized appreciation [38][46] - The net asset value (NAV) per share increased to $26.54 from $26.30 in the previous quarter, indicating portfolio stability [47][62] Business Line Data and Key Metrics Changes - The company ended the quarter with $656 million in new investment commitments and $390 million in investment funding, compared to $144 million and $117 million in the previous quarter [24] - Over 98% of the portfolio is invested in first lien senior secured loans, with an average loan-to-value of 46.9% [16][47] - The weighted average yield on debt investments at fair value increased to 11.9% from 11.8% in the previous quarter, primarily due to higher base rates [27][62] Market Data and Key Metrics Changes - The investment pipeline doubled since the first quarter, with a resurgence in transactions valued over $1 billion [13] - The company noted a minimal non-accrual rate below 0.1% at both amortized cost and fair market value, with approximately 1% of debt investments marked below 90% of fair value [47] - The average EBITDA of portfolio companies increased to $185 million from $162 million year-over-year, reflecting a focus on larger, more resilient businesses [50] Company Strategy and Development Direction - The company is optimistic about new investment opportunities driven by a more active M&A environment and the integration of corporate credit, asset-based finance, and insurance groups into a single unit [25] - The focus remains on building a healthy and defensive portfolio, emphasizing investments in historically lower default rate sectors [28] - The integration of the Blackstone credit and insurance platform is expected to enhance capabilities and create a more seamless experience for clients and borrowers [25][71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the portfolio and the ability to maintain earnings in excess of dividends despite macroeconomic headwinds [64] - The company anticipates that higher interest rates will remain for an extended period, which may lead to a more favorable environment for returns [75] - There is an expectation of increased dispersion in the market, with potential default rates rising in certain sectors such as healthcare and industrial manufacturing [94] Other Important Information - The company distributed an increased dividend of $0.70 per share, representing an 11.6% annualized distribution, covered by earnings at a ratio of 123% [23][56] - The company maintained its investment-grade corporate credit ratings and ended the quarter with approximately $1.5 billion in liquidity [39][62] Q&A Session All Questions and Answers Question: Did the fee waiver lapse pursuant to the 2-year anniversary last week? - Yes, the fee waiver ended on October 28, 2023 [5] Question: Do you expect to see some structural changes in the deals getting done with rates being elevated? - Yes, companies are being set up with less leverage to service their debt appropriately, leading to lower loan-to-value ratios [84] Question: How do you think about potential changes in the portfolio mix or originations over time based on the integration? - The integration provides a larger team with more exposure to sponsors and corporates, enhancing the relevance of the company in the market [71] Question: What are your thoughts on the evolution of AI and its impact on the software sector? - The company has been integrating AI into its investment process and does not foresee significant issues for its selected portfolio in this space [104]

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of assets, operations, net assets, cash flows, and investment schedules with notes [Condensed Consolidated Statements of Assets and Liabilities](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets were $9.80 billion, liabilities decreased to $5.20 billion, and net assets increased to $4.60 billion, with NAV per share rising to $26.54 Condensed Consolidated Statements of Assets and Liabilities (in thousands) | Metric | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Investments at Fair Value** | $9,500,000 | $9,617,248 | | **Total Assets** | $9,802,235 | $9,908,995 | | **Total Liabilities** | $5,199,640 | $5,750,029 | | **Total Net Assets** | $4,602,595 | $4,158,966 | | **NAV Per Share** | $26.54 | $25.93 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total investment income increased by 40% to $839.3 million, resulting in a net increase in net assets from operations of $454.6 million, or $2.77 per share Key Operational Data (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Total Investment Income** | $839,263 | $599,379 | | **Net Investment Income** | $481,454 | $340,113 | | **Net Increase in Net Assets** | $454,643 | $282,777 | | **Earnings Per Share (basic and diluted)** | $2.77 | $1.68 | [Condensed Consolidated Statements of Changes in Net Assets](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets increased from $4.16 billion to $4.60 billion, driven by operations and share issuances, partially offset by dividends declared Changes in Net Assets for the Nine Months Ended September 30, 2023 (in thousands) | Description | Amount | | :--- | :--- | | **Balance, December 31, 2022** | $4,158,966 | | Net increase from operations | $454,643 | | Issuance of common shares, net | $335,515 | | Reinvestment of dividends | $15,206 | | Dividends declared | ($361,735) | | **Balance, September 30, 2023** | $4,602,595 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was $586.8 million, while financing activities used $584.4 million, resulting in cash and cash equivalents of $145.8 million Cash Flow Summary for the Nine Months Ended (in thousands) | Activity | September 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $586,760 | $505,132 | | **Net Cash from Financing Activities** | ($584,383) | ($476,827) | | Net Increase in Cash | $2,377 | $28,306 | | **Cash and Cash Equivalents, End of Period** | $145,784 | $131,185 | [Condensed Consolidated Schedules of Investments](index=11&type=section&id=Condensed%20Consolidated%20Schedules%20of%20Investments) The total investment portfolio at fair value was $9.50 billion, primarily concentrated in first lien debt (98.4%), diversified across various industries Investment Portfolio Composition by Type (Fair Value, in thousands) | Investment Type | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | First lien debt | $9,347,664 | $9,419,963 | | Second lien debt | $40,715 | $46,336 | | Equity investments | $111,621 | $150,949 | | **Total** | **$9,500,000** | **$9,617,248** | - As of September 30, 2023, the company had total unfunded commitments of **$760.6 million**, primarily consisting of delayed draw term loans and revolvers[53](index=53&type=chunk)[353](index=353&type=chunk) - The investment portfolio is geographically concentrated in the United States, representing **94.75%** of the total portfolio at fair value as of September 30, 2023[192](index=192&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=46&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, financial results, organization as a BDC and RIC, investment portfolio, fair value measurements, and subsequent events [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=76&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operations, focusing on investment framework, income growth from rising interest rates, liquidity, and macroeconomic factors - The company's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation, primarily through originated and syndicated loans to private U.S. companies[132](index=132&type=chunk)[374](index=374&type=chunk) - For the nine months ended September 30, 2023, total investment income increased by **40%** year-over-year to **$839.3 million**, primarily driven by higher reference interest rates on the floating-rate loan portfolio[434](index=434&type=chunk) - As of September 30, 2023, the company had **$145.8 million** in cash and **$1.31 billion** of undrawn capacity under its credit facilities, deemed sufficient for near-term investing activities and operations[478](index=478&type=chunk) - Management notes that continued inflation has prompted monetary policy tightening, which could adversely affect borrowers' credit quality despite favorably impacting the company's income, also acknowledging risks from recent bank closures and potential financial market instability[504](index=504&type=chunk)[463](index=463&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=87&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to market risks, including valuation, interest rate, and inflation risk, remains materially unchanged from prior disclosures - The company's exposure to market risk has not materially changed from what was previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022[508](index=508&type=chunk) [Controls and Procedures](index=87&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation, the Co-Chief Executive Officers and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[509](index=509&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[510](index=510&type=chunk) [PART II - OTHER INFORMATION](index=88&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits [Legal Proceedings](index=88&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings and does not anticipate future proceedings to materially affect its financial condition - As of the reporting date, the company is not a party to any material legal proceedings[332](index=332&type=chunk)[511](index=511&type=chunk) [Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes have been made to the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2022[512](index=512&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company authorized a new $250 million share repurchase plan in February 2023, but no shares were repurchased during the nine months ended September 30, 2023 - In February 2023, the Board authorized a new share repurchase plan for up to **$250 million** of outstanding common shares at prices below NAV per share[513](index=513&type=chunk) - The company did not repurchase any of its shares under its repurchase plans during the nine months ended September 30, 2023[495](index=495&type=chunk) [Defaults Upon Senior Securities](index=88&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults on its senior securities during the reporting period - None[496](index=496&type=chunk) [Mine Safety Disclosures](index=88&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[497](index=497&type=chunk) [Other Information](index=88&type=section&id=Item%205.%20Other%20Information) This section includes a disclosure pursuant to Section 13(r) of the Exchange Act, provided as an exhibit to the report - The report incorporates by reference Exhibit 99.1, which includes disclosures required under Section 13(r) of the Exchange Act regarding activities at Mundys S.p.A., a potential affiliate[498](index=498&type=chunk) [Exhibits](index=89&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including certifications and XBRL data files - Exhibits filed with the report include officer certifications (31.1, 31.2, 31.3, 32.1, 32.2, 32.3), a Section 13(r) Disclosure (99.1), and various Inline XBRL documents[517](index=517&type=chunk)

Blackstone Secured Lending Fund (NYSE:BXSL) Q2 2023 Results Conference Call August 9, 2023 9:30 AM ET Company Participants Stacy Wang - Head, Stakeholder Relations Brad Marshall - Co-CEO Jon Bock - Co-CEO Teddy Desloge - CFO Conference Call Participants Arren Cyganovich - Citi Casey Alexander - Compass Point Kenneth Lee - RBC Capital Markets Melissa Wedel - JP Morgan\ Robert Dodd - Raymond James Ryan Lynch - KBW Operator Good day, and welcome to the Blackstone Secured Lending Second Quarter 2023 Investor C ...

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the company's financial statements, management's discussion, and market risk disclosures [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including key financial positions, operational results, and cash flow activities [Condensed Consolidated Statements of Assets and Liabilities](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets decreased to **$9.57 billion** from **$9.91 billion** at year-end 2022, while net assets increased to **$4.35 billion** from **$4.16 billion** Condensed Consolidated Statements of Assets and Liabilities (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Total investments at fair value | $9,288,531 | $9,617,248 | | Cash and cash equivalents | $147,383 | $131,272 | | **Total assets** | **$9,572,449** | **$9,908,995** | | **Liabilities** | | | | Debt (net) | $4,977,981 | $5,527,715 | | **Total liabilities** | **$5,222,178** | **$5,750,029** | | **Total Net Assets** | **$4,350,271** | **$4,158,966** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2023, total investment income rose to **$290.4 million** from **$187.0 million** in the prior-year period, driven by higher interest income Key Operational Data (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total investment income | $290,365 | $186,991 | $555,303 | $372,588 | | Net expenses | $113,901 | $81,725 | $227,042 | $163,233 | | Net investment income | $171,485 | $105,266 | $320,660 | $207,969 | | Net realized and unrealized gain (loss) | $(26,635) | $(25,675) | $(37,012) | $(21,138) | | **Net increase in net assets** | **$144,850** | **$79,591** | **$283,648** | **$186,831** | | **Earnings per share (basic and diluted)** | **$0.90** | **$0.47** | **$1.76** | **$1.10** | [Condensed Consolidated Statements of Changes in Net Assets](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) For the six months ended June 30, 2023, net assets increased from **$4.16 billion** to **$4.35 billion**, driven by operations and share issuance, partially offset by dividends Changes in Net Assets for the Six Months Ended June 30, 2023 (in thousands) | Description | Amount | | :--- | :--- | | **Balance, December 31, 2022** | **$4,158,966** | | Issuance of common shares, net | $124,933 | | Reinvestment of dividends | $10,571 | | Net increase from operations | $283,648 | | Dividends declared | $(228,183) | | **Balance, June 30, 2023** | **$4,350,271** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, net cash provided by operating activities significantly increased to **$677.1 million**, while net cash used in financing activities was **$673.3 million** Net Cash Flows for the Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $677,142 | $17,162 | | Net cash provided by (used in) financing activities | $(673,289) | $48,607 | | **Net increase in cash and cash equivalents** | **$3,853** | **$65,769** | [Condensed Consolidated Schedules of Investments](index=9&type=section&id=Condensed%20Consolidated%20Schedules%20of%20Investments) As of June 30, 2023, the total investment portfolio had a fair value of **$9.29 billion**, primarily concentrated in first lien senior secured debt across 180 companies Portfolio Composition by Investment Type | Investment Type | Fair Value (June 30, 2023) | % of Total | Fair Value (Dec 31, 2022) | % of Total | | :--- | :--- | :--- | :--- | :--- | | First lien debt | $9,138,278 | 98.38% | $9,419,963 | 97.95% | | Second lien debt | $40,086 | 0.43% | $46,336 | 0.48% | | Equity investments | $110,167 | 1.19% | $150,949 | 1.57% | | **Total** | **$9,288,531** | **100.00%** | **$9,617,248** | **100.00%** | - The portfolio consisted of investments in **180 companies** as of June 30, 2023, up from 176 at year-end 2022[417](index=417&type=chunk) - **99.9%** of performing debt investments bore interest at a floating rate[417](index=417&type=chunk)[306](index=306&type=chunk) Portfolio Composition by Geography (Fair Value) | Geography | June 30, 2023 | % of Total | | :--- | :--- | :--- | | United States | $8,755,784 | 94.26% | | Canada | $319,080 | 3.44% | | Europe | $213,667 | 2.30% | | **Total** | **$9,288,531** | **100.00%** | [Notes to Condensed Consolidated Financial Statements](index=42&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information on the company's organization, accounting policies, investment portfolio specifics, fair value measurements, borrowings, and shareholder distributions - The company is an externally managed BDC that has elected to be treated as a RIC for tax purposes, managed by Blackstone Credit BDC Advisors LLC[180](index=180&type=chunk)[148](index=148&type=chunk) - The Adviser voluntarily waived management and incentive fees to maintain the pre-IPO fee structure, resulting in a **$6.1 million** management fee waiver and a **$4.9 million** incentive fee waiver for Q2 2023[260](index=260&type=chunk)[262](index=262&type=chunk)[246](index=246&type=chunk) - As of June 30, 2023, **97.8%** of the investment portfolio, or **$9.09 billion**, was classified as Level 3 in the fair value hierarchy, indicating reliance on unobservable inputs for valuation[283](index=283&type=chunk) - Total debt outstanding was **$5.01 billion** as of June 30, 2023, with an asset coverage ratio of **186.9%**, well above the regulatory requirement of 150%[336](index=336&type=chunk)[346](index=346&type=chunk) - The company had unfunded commitments of **$551.3 million** as of June 30, 2023[340](index=340&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=71&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results, highlighting investment strategy, portfolio activity, operational performance, liquidity, and capital resources [Portfolio and Investment Activity](index=76&type=section&id=Portfolio%20and%20Investment%20Activity) In Q2 2023, new investment commitments decreased significantly to **$118.6 million**, while the weighted average yield on debt increased to **11.64%** due to rising interest rates Portfolio Activity for the Three Months Ended June 30 | Metric | 2023 | 2022 | | :--- | :--- | :--- | | New investments purchased (at cost) | $116,888 | $296,343 | | Investments sold or repaid (at cost) | $(464,777) | $(214,000) | | Number of portfolio companies | 180 | N/A | | Weighted avg. yield on debt (at cost) | 11.64% | N/A | [Results of Operations](index=77&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2023, total investment income grew **49%** year-over-year to **$555.3 million**, driven by higher interest rates, despite increased expenses and unrealized losses - Investment income for H1 2023 increased by **$182.7 million (49%)** year-over-year, mainly due to rising reference interest rates, with non-recurring interest income also increasing to **$13.4 million** from **$1.4 million**[424](index=424&type=chunk) - Total interest expense for H1 2023 increased by **$47.5 million (55.6%)** year-over-year, as the weighted average interest rate on borrowings rose to **4.80%** from **2.94%**[428](index=428&type=chunk) - Management fees for H1 2023 decreased by **5%** year-over-year to **$49.0 million** due to a smaller asset base, with the Adviser waiving **$12.2 million** in management fees during this period[430](index=430&type=chunk) - Net unrealized losses for H1 2023 were **$52.0 million**, driven by a **0.2%** decrease in the fair value of debt investments as a percentage of principal, attributed to changes in the economic outlook[490](index=490&type=chunk)[466](index=466&type=chunk) [Liquidity and Capital Resources](index=81&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2023, the company maintained strong liquidity with **$147.4 million** in cash and **$1.69 billion** in undrawn credit, exceeding regulatory asset coverage requirements - Primary sources of liquidity are cash flows from operations, credit facilities, and debt/equity offerings, with **$147.4 million** in cash and **$1.69 billion** in undrawn borrowing capacity as of June 30, 2023[469](index=469&type=chunk)[494](index=494&type=chunk) - The company's asset coverage ratio was **186.9%** as of June 30, 2023, exceeding the **150%** requirement under the 1940 Act[470](index=470&type=chunk) - The company declared total distributions of **$1.40 per share** for the six months ended June 30, 2023[473](index=473&type=chunk)[344](index=344&type=chunk) - No shares were repurchased during the six months ended June 30, 2023, under the authorized share repurchase plans[474](index=474&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is subject to valuation, interest rate, and inflation risks, with no material changes reported since the 2022 Annual Report - The company's primary market risks are valuation risk, interest rate risk, and inflation risk[482](index=482&type=chunk) - There have been no material changes in the company's exposure to market risk since its 2022 Annual Report[482](index=482&type=chunk) [Item 4. Controls and Procedures](index=82&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting - Based on an evaluation as of the end of the period, the Co-CEOs and CFO concluded that the company's disclosure controls and procedures are effective[508](index=508&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[509](index=509&type=chunk) [PART II - OTHER INFORMATION](index=82&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity sales, defaults, and other required disclosures [Item 1. Legal Proceedings](index=82&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not currently subject to any material legal proceedings - As of the reporting date, the company is not a party to any material legal proceedings[529](index=529&type=chunk) [Item 1A. Risk Factors](index=82&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes have been made to the risk factors disclosed in the 2022 Form 10-K[530](index=530&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the company's share repurchase plans, including a new **$250 million** authorization in February 2023, with no shares repurchased during the period - In February 2023, the Board authorized a new share repurchase plan for up to **$250 million** of common shares at prices below NAV per share[498](index=498&type=chunk)[379](index=379&type=chunk) - The company did not repurchase any of its shares during the six months ended June 30, 2023[84](index=84&type=chunk)[474](index=474&type=chunk) [Item 3. Defaults Upon Senior Securities](index=83&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None[534](index=534&type=chunk) [Item 5. Other Information](index=83&type=section&id=Item%205.%20Other%20Information) This section includes disclosures related to Section 13(r) of the Exchange Act and confirms no Rule 10b5-1 trading arrangement changes by directors or officers - The report incorporates by reference an exhibit related to Section 13(r) of the Exchange Act concerning Iran and Syria[516](index=516&type=chunk) - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during Q2 2023[517](index=517&type=chunk) [Item 6. Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including credit agreements, equity distribution agreements, and officer certifications - A list of exhibits filed with the report is provided, including credit agreements, certifications, and XBRL data files[518](index=518&type=chunk)

Financial Data and Key Metrics Changes - Net investment income (NII) increased 3% quarter-over-quarter to $0.93 per share, representing a 14% annualized return on equity and the highest NII per quarter since inception, driven by rising interest rates that increased the average yield on debt investments from 10.7% to 11.4% [28][71] - Net asset value (NAV) per share increased 0.7% to $26.10 from $25.93 in the previous quarter, reflecting portfolio stability [33][77] - The current dividend was increased by 17% to $0.70 per share, representing a 10.7% annualized yield based on the higher first quarter NAV [34][67] Business Line Data and Key Metrics Changes - First quarter sales and repayments were $109 million, matched by $108 million in new investment commitments, indicating a seasonally slow period for new deal activity [29][76] - The portfolio composition remains strong with 98% in senior secured first lien loans and a weighted average loan-to-value of 45% [33][52] Market Data and Key Metrics Changes - The company reported a significant increase in market activity, particularly in public-to-private transactions and sponsor-to-sponsor activity, indicating a potential for increased origination and repayment volume [108][109] - The average spread on the company's revolver is SOFR plus 175, with a focus on maintaining a stable income picture despite lower origination and repayment activity [112][80] Company Strategy and Development Direction - The company aims to maintain a stable and steady dividend while focusing on NAV growth through excess earnings [5][34] - The strategy includes a focus on larger deals, with approximately 50% of direct lending deals being $1 billion or more, which allows for better control over outcomes [40][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience amid a slowing economic environment, highlighting that 90% of the portfolio is performing in line or exceeding expectations [116][127] - The management noted that sectors such as software, healthcare, and professional services are expected to continue performing well despite potential market headwinds [123][116] Other Important Information - The company has $1.2 billion in liquidity from cash and undrawn lending lines, positioning it well for both defense and growth [36][78] - Unrealized markdowns of approximately $15 million in the quarter were the primary driver of a $2 million capital gains incentive fee reversal [82] Q&A Session Summary Question: What is the potential for your portfolio being large, first lien while performing? - Management indicated that larger assets outperforming could lead to more turnover in the portfolio, with call protection on those assets [99] Question: Have all resets flowed through the portfolio? - Management noted that there is still potential for additional earnings from base rates, estimating an extra $0.04 of earnings potential from current rates [103] Question: Where is the market activity coming from? - Activity is seen in public-to-private transactions, add-on financings, and corporate carve-outs, with a busy deal funnel independent of broader market conditions [108][109] Question: How is the dividend coverage expected to trend? - Management emphasized the importance of a steady and stable dividend profile, with a focus on increasing NAV over time [110] Question: Are there any industries outperforming or underperforming? - Management highlighted that software and healthcare sectors are outperforming expectations, while some doctor practice offices are facing challenges [124][116]

[FORM 10-Q Quarterly Report](index=1&type=section&id=FORM%2010-Q) [PART I FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This chapter provides unaudited consolidated financial statements, schedules, and comprehensive notes [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) The company's total net assets slightly increased due to a larger decrease in liabilities than in assets Financial Position Summary | Metric | March 31, 2023 ($ thousands) | December 31, 2022 ($ thousands) | |:---|:---|:---| | Total investments at fair value | 9,626,202 | 9,617,248 | | Cash and cash equivalents | 103,025 | 131,272 | | Total assets | 9,847,992 | 9,908,995 | | Debt (net) | 5,451,854 | 5,527,715 | | Total liabilities | 5,657,496 | 5,750,029 | | Total net assets | 4,190,496 | 4,158,966 | | Net asset value per share | 26.10 | 25.93 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Higher interest income drove a significant increase in total investment income and net assets from operations Quarterly Operating Results | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Total investment income | 264,938 | 185,597 | | Net expenses | 113,141 | 81,508 | | Net investment income before excise tax | 151,797 | 104,089 | | Excise tax expense | 2,622 | 1,386 | | Net investment income after excise tax | 149,175 | 102,703 | | Net unrealized appreciation (depreciation) | (14,544) | (1,412) | | Net realized gain (loss) | 4,167 | 5,949 | | Net increase (decrease) in net assets from operations | 138,798 | 107,240 | | Net investment income per share (basic and diluted) | 0.93 | 0.61 | | Earnings per share (basic and diluted) | 0.86 | 0.63 | [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net investment income drove an increase in net assets, partially offset by distributions and unrealized depreciation Quarterly Changes in Net Assets | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Balance, beginning of period | 4,158,966 | 4,447,479 | | Reinvestment of dividends | 5,132 | 11,469 | | Net investment income | 149,175 | 102,703 | | Net realized gain (loss) on investments | 4,167 | 5,949 | | Net change in unrealized appreciation (depreciation) | (14,544) | (1,412) | | Dividends declared and payable | (112,400) | (132,318) | | Balance, end of period | 4,190,496 | 4,433,870 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities provided significant cash in Q1 2023, a reversal from the prior year, while financing activities used cash Quarterly Cash Flow Summary | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Net cash provided by (used in) operating activities | 155,864 | (19,171) | | Net cash provided by (used in) financing activities | (186,761) | 57,221 | | Net increase (decrease) in cash and cash equivalents | (30,897) | 38,050 | | Cash and cash equivalents, beginning of period | 131,272 | 102,879 | | Cash and cash equivalents, end of period | 103,025 | 140,929 | - Supplemental information for Q1 2023 includes **$88,513 thousand in interest paid**, **$112,400 thousand in distribution payable**, and **$5,132 thousand in reinvestment of distributions**[169](index=169&type=chunk) [Consolidated Schedules of Investments](index=9&type=section&id=Consolidated%20Schedules%20of%20Investments) The investment portfolio primarily consists of first lien debt with floating interest rates and significant unfunded commitments Investment Portfolio (March 31, 2023) | Investment Type | Cost ($ thousands) | Fair Value ($ thousands) | % of Net Assets | |:---|:---|:---|:---| | First Lien Debt | 9,508,358 | 9,425,003 | 225.05% | | Second Lien Debt | 49,200 | 46,678 | 1.12% | | Equity Investments | 111,548 | 154,521 | 2.44% | | Total Investment Portfolio | 9,669,106 | 9,626,202 | 229.85% | Investment Portfolio (December 31, 2022) | Investment Type | Cost ($ thousands) | Fair Value ($ thousands) | % of Net Assets | |:---|:---|:---|:---| | First Lien Debt | 9,497,570 | 9,419,963 | 226.49% | | Second Lien Debt | 48,753 | 46,336 | 1.11% | | Equity Investments | 111,549 | 150,949 | 2.30% | | Total Investment Portfolio | 9,657,872 | 9,617,248 | 231.26% | Unfunded Commitments (March 31, 2023) | Unfunded Commitments | Unfunded Commitment ($ thousands) | Fair Value ($ thousands) | |:---|:---|:---| | Total unfunded commitments | 598,825 | (3,549) | Unfunded Commitments (December 31, 2022) | Unfunded Commitments | Unfunded Commitment ($ thousands) | Fair Value ($ thousands) | |:---|:---|:---| | Total unfunded commitments | 690,256 | (3,057) | - As of March 31, 2023, **99.9% of performing debt investments bore interest at a floating rate**, consistent with December 31, 2022 figures[369](index=369&type=chunk) [Notes to Consolidated Financial Statements](index=39&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details accounting policies, agreements, and financial instruments in the consolidated statements - The consolidated financial statements are prepared in accordance with **GAAP for interim financial information** and **ASC Topic 946**[242](index=242&type=chunk)[272](index=272&type=chunk) - Management makes estimates and assumptions, particularly for **investment valuation**, which involve a high degree of judgment and complexity[243](index=243&type=chunk)[274](index=274&type=chunk)[430](index=430&type=chunk) - The Company consolidates its **wholly-owned investment company subsidiaries**: BGSL Jackson Hole Funding LLC, BGSL Breckenridge Funding LLC, BGSL Big Sky Funding LLC, and BGSL Investments LLC[245](index=245&type=chunk) [Note 1. Organization](index=41&type=section&id=Note%201.%20Organization) The Company is an externally managed, non-diversified, closed-end investment company regulated as a BDC - The Company is a Delaware statutory trust, externally managed by Blackstone Credit BDC Advisors LLC, and regulated as a **Business Development Company (BDC)**[240](index=240&type=chunk)[270](index=270&type=chunk) - The Company commenced its loan origination and investment activities on **November 20, 2018**[241](index=241&type=chunk) - The Company priced its **initial public offering (IPO)** on October 28, 2021, and its shares began trading on the NYSE[271](index=271&type=chunk) [Note 2. Significant Accounting Policies](index=41&type=section&id=Note%202.%20Significant%20Accounting%20Policies) This note outlines key accounting policies for financial statements, including valuation and revenue recognition [Use of Estimates](index=41&type=section&id=Use%20of%20Estimates) Financial statement preparation requires management estimates, particularly for the fair value of investments - The preparation of consolidated financial statements in conformity with GAAP requires management to make **estimates and assumptions**[274](index=274&type=chunk) - Assumptions and estimates regarding the **valuation of investments** involve a higher degree of judgment and complexity[274](index=274&type=chunk)[430](index=430&type=chunk) [Consolidation](index=42&type=section&id=Consolidation) The Company consolidates its wholly-owned investment company subsidiaries as per ASC 946 - The Company consolidated the results of its **wholly-owned subsidiaries**: BGSL Jackson Hole Funding LLC, BGSL Breckenridge Funding LLC, BGSL Big Sky Funding LLC, and BGSL Investments LLC[245](index=245&type=chunk) - As provided under ASC 946, the Company will not consolidate its investment in a company other than an **investment company subsidiary** or a controlled operating company[275](index=275&type=chunk) [Cash and Cash Equivalents](index=42&type=section&id=Cash%20and%20Cash%20Equivalents) Cash and cash equivalents include demand deposits and highly liquid investments with short original maturities - Cash and cash equivalents consist of demand deposits and highly liquid investments with original maturities of **three months or less**[246](index=246&type=chunk) - Deposits with financial institutions may at times **exceed the Federal Deposit Insurance Corporation insured limit**[246](index=246&type=chunk) [Investments](index=42&type=section&id=Investments) Investments are recorded at fair value using a hierarchy that prioritizes observable market prices - Investments are recorded at fair value in accordance with **ASC 820** and **Rule 2a-5** under the 1940 Act[277](index=277&type=chunk) - The fair value hierarchy prioritizes unadjusted quoted prices in active markets (**Level 1**), followed by observable inputs (**Level 2**), and unobservable inputs (**Level 3**)[250](index=250&type=chunk) - For illiquid debt investments, fair value is determined using a **market interest rate yield analysis**[279](index=279&type=chunk) - **Enterprise value (EV) analysis** is generally performed for equity investments, control debt investments, and credit-impaired non-control debt investments[304](index=304&type=chunk)[305](index=305&type=chunk) [Derivative Instruments](index=44&type=section&id=Derivative%20Instruments) All derivative instruments are recognized at fair value, with changes recorded as current period gains or losses - The Company recognizes all derivative instruments as assets or liabilities at **fair value** in its consolidated financial statements[281](index=281&type=chunk) - Derivative contracts are **not designated in hedge accounting relationships**, and all changes in fair value are recognized through current period gains or losses[281](index=281&type=chunk) - Derivative instruments are subject to various risks including **market, credit, liquidity, and operational risks**[432](index=432&type=chunk) [Forward Purchase Agreement](index=44&type=section&id=Forward%20Purchase%20Agreement) Forward purchase agreements are recognized and subsequently re-measured at fair value - Forward purchase agreements are recognized at **fair value through current period gains or losses** on the contract entry date[309](index=309&type=chunk) - All forward purchase agreements are carried as assets when fair value is positive and as liabilities when fair value is negative[309](index=309&type=chunk) [Receivables/Payables From Investments Sold/Purchased](index=44&type=section&id=Receivables%2FPayables%20From%20Investments%20Sold%2FPurchased) This covers amounts for investment transactions that have not settled by the reporting date - Receivables/payables from investments sold/purchased consist of amounts for transactions that have **not settled at the reporting date**[252](index=252&type=chunk) [Foreign Currency Transactions](index=44&type=section&id=Foreign%20Currency%20Transactions) Foreign currency amounts are translated into U.S. dollars using period-end or transaction-date exchange rates - Investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon **currency exchange rates effective on the last business day of the period**[310](index=310&type=chunk) - Purchases, sales, borrowings, and expenses in foreign currencies are translated based upon **currency exchange rates prevailing on the transaction dates**[310](index=310&type=chunk) - Net changes in fair values from foreign exchange rate fluctuations are included in the **Consolidated Statements of Operations**[254](index=254&type=chunk) [Revenue Recognition](index=44&type=section&id=Revenue%20Recognition) Revenue is recognized from interest, dividends, and various fees, with non-accrual status for doubtful loans [Interest Income](index=44&type=section&id=Interest%20Income) Interest income is accrued, including accretion of discounts and amortization of premiums - Interest income is recorded on an **accrual basis** and includes accretion of discounts and amortization of premiums[283](index=283&type=chunk) - Upon prepayment, any prepayment premiums and unamortized fees are recorded as **interest income** in the current period[284](index=284&type=chunk) - For Q1 2023 and Q1 2022, the Company recorded **$0.4 million** and **$1.0 million**, respectively, in non-recurring interest income[284](index=284&type=chunk) [PIK Income](index=45&type=section&id=PIK%20Income) Payment-in-kind (PIK) interest is accrued as income and increases the loan principal - PIK represents interest that is **accrued and recorded as interest income** at contractual rates, increasing the loan principal[285](index=285&type=chunk) - If PIK is not expected to be realized, the investment is placed on **non-accrual status**[285](index=285&type=chunk) [Dividend Income](index=45&type=section&id=Dividend%20Income) Dividend income is accrued for preferred equity and recorded on the record or ex-dividend date for common equity - Dividend income on preferred equity securities is recorded on the **accrual basis** to the extent it is expected to be collected[314](index=314&type=chunk) - Dividend income on common equity securities is recorded on the **record date** for private companies or the **ex-dividend date** for public companies[314](index=314&type=chunk) [Fee Income](index=45&type=section&id=Fee%20Income) The Company recognizes various fees, such as structuring and syndication fees, as income when earned - The Company may receive various fees such as **structuring, consent, waiver, and syndication fees**[315](index=315&type=chunk) - Such fees are recognized as income **when earned or the services are rendered**[315](index=315&type=chunk) [Non-Accrual Income](index=45&type=section&id=Non-Accrual%20Income) Loans are placed on non-accrual status when principal or interest collection is doubtful - Loans are generally placed on **non-accrual status** when there is reasonable doubt about full collection[286](index=286&type=chunk) - Accrued interest is generally **reversed** when a loan is placed on non-accrual status[286](index=286&type=chunk) - Interest payments received on non-accrual loans may be recognized as income or applied to principal based on **management's judgment**[286](index=286&type=chunk) [Organization Expenses and Offering Expenses](index=45&type=section&id=Organization%20Expenses%20and%20Offering%20Expenses) Public equity offering expenses are recorded as a reduction of capital, while shelf renewal costs are expensed - Expenses related to public equity offerings are recorded as a **reduction of capital** upon completion[287](index=287&type=chunk) - The costs associated with any renewals of a shelf registration statement will be **expensed as incurred**[287](index=287&type=chunk) [Deferred Financing Costs and Debt Issuance Costs](index=45&type=section&id=Deferred%20Financing%20Costs%20and%20Debt%20Issuance%20Costs) Borrowing costs are deferred and amortized into interest expense over the debt instrument's life - Deferred financing and debt issuance costs represent fees and other direct incremental costs incurred for **borrowings**[288](index=288&type=chunk) - These expenses are **deferred and amortized** into interest expense over the life of the related debt instrument[288](index=288&type=chunk) - Costs for revolving credit facilities are separate assets, while costs for installment debt are **netted against the outstanding debt balance**[288](index=288&type=chunk) [Income Taxes](index=46&type=section&id=Income%20Taxes) As a RIC, the Company generally avoids corporate-level U.S. federal income taxes by distributing taxable income - The Company has elected to be treated as a **RIC**, generally avoiding corporate-level U.S. federal income taxes on distributed income[289](index=289&type=chunk) - To maintain RIC status, the Company must distribute at least **90% of its investment company taxable income** annually[290](index=290&type=chunk) - The Company is subject to a **4% nondeductible federal excise tax** on undistributed income if certain distribution requirements are not met[319](index=319&type=chunk) - For Q1 2023 and Q1 2022, the Company incurred **$2.6 million** and **$1.4 million**, respectively, of U.S. federal excise tax[291](index=291&type=chunk) [Distributions](index=46&type=section&id=Distributions) The Company intends to make quarterly distributions to shareholders, subject to Board discretion - The Company intends to make **quarterly distributions** to its shareholders, recorded on the record date[292](index=292&type=chunk) - All distributions are paid at the **discretion of the Board** and depend on earnings, financial condition, and regulatory compliance[292](index=292&type=chunk) [Recent Accounting Pronouncements](index=46&type=section&id=Recent%20Accounting%20Pronouncements) The FASB issued guidance on Reference Rate Reform, providing optional expedients for contracts affected by LIBOR discontinuation - The FASB issued **ASU No. 2020-04** and **ASU No. 2021-01** on Reference Rate Reform, providing optional expedients for contracts affected by reference rate reform[293](index=293&type=chunk) - ASU 2022-06 deferred the sunset date of this guidance to **December 31, 2024**[293](index=293&type=chunk) - The Company is currently **evaluating the impact** of these ASUs on its consolidated financial statements[293](index=293&type=chunk) [Note 3. Agreements and Related Party Transactions](index=47&type=section&id=Note%203.%20Agreements%20and%20Related%20Party%20Transactions) This note details agreements with related parties, including management and incentive fee structures - The Company has an Investment Advisory Agreement with **Blackstone Credit BDC Advisors LLC** and an Administration Agreement with **Blackstone Alternative Credit Advisors LP**[270](index=270&type=chunk)[322](index=322&type=chunk)[363](index=363&type=chunk) - The Investment Advisory Agreement was most recently renewed on **May 2, 2023**, for a one-year period[323](index=323&type=chunk) - The Adviser voluntarily waived management and incentive fees above **0.75%** and **15.0%** respectively, for a two-year 'Waiver Period' post-IPO[295](index=295&type=chunk)[327](index=327&type=chunk)[352](index=352&type=chunk)[353](index=353&type=chunk)[361](index=361&type=chunk) [Investment Advisory Agreement](index=47&type=section&id=Investment%20Advisory%20Agreement) The agreement governs the Adviser's management of the Company and includes a two-year post-IPO fee waiver - The Company entered into an amended and restated investment advisory agreement on **October 18, 2021**, with the Adviser[294](index=294&type=chunk) - The Adviser implemented a waiver to extend the Company's **pre-IPO fee structure** for two years, maintaining management fees at 0.75% and incentive fees at 15.0%[295](index=295&type=chunk) - The Investment Advisory Agreement was most recently renewed and approved by the Board on **May 2, 2023**[323](index=323&type=chunk) [Base Management Fees](index=47&type=section&id=Base%20Management%20Fees) The management fee is 1.0% annually of average gross assets, voluntarily waived to 0.75% during the Waiver Period - The management fee is payable quarterly at an annual rate of **1.0%** of the average value of the Company's gross assets[296](index=296&type=chunk) - The Adviser voluntarily waived the management fee in excess of **0.75%** during the Waiver Period, with waived amounts not subject to recoupment[352](index=352&type=chunk)[353](index=353&type=chunk) Quarterly Management Fees | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Base management fees | 24,696 | 25,636 | | Management fees waived | (6,174) | (6,409) | | Payable to Adviser | 18,522 | 18,595 | [Incentive Fees](index=48&type=section&id=Incentive%20Fees) Incentive fees consist of independent income-based and capital gains-based components, subject to voluntary waivers - The incentive fees consist of two components: one based on **income** and the other on **capital gains**[354](index=354&type=chunk) - The income-based fee is calculated quarterly based on net investment income over the **'Trailing Twelve Quarters'**, exceeding a 1.5% hurdle rate[298](index=298&type=chunk)[299](index=299&type=chunk)[354](index=354&type=chunk)[355](index=355&type=chunk) - The capital gains fee is determined annually on a cumulative basis, equal to **17.5%** (or 15% during waiver) of realized gains net of losses and depreciation[333](index=333&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk) [Income Based Incentive Fees](index=48&type=section&id=Income%20Based%20Incentive%20Fees) The income-based fee is calculated on pre-incentive fee net investment income over a hurdle and subject to a cap - The income-based incentive fee is **15%** (or 17.5% post-waiver) of pre-incentive fee net investment income that exceeds the Catch-up Amount[330](index=330&type=chunk) - The fee is subject to an **'Incentive Fee Cap'** based on the 'Cumulative Net Return' during the relevant Trailing Twelve Quarters[302](index=302&type=chunk)[331](index=331&type=chunk) Quarterly Income Based Incentive Fees | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Income based incentive fees | 30,393 | 21,284 | | Incentive fees waived | (4,342) | (3,040) | | Payable to Adviser | 26,051 | 24,773 | [Capital Gains Incentive Fees](index=49&type=section&id=Capital%20Gains%20Incentive%20Fees) The capital gains fee is 17.5% of cumulative realized gains, net of losses and unrealized depreciation, payable annually - The capital gains incentive fee is **17.5%** of realized capital gains (or 15.0% during the Waiver Period) on a cumulative basis, net of all realized losses and unrealized depreciation[333](index=333&type=chunk)[361](index=361&type=chunk) - The accrual for Q1 2023 was **$(1.6) million**, primarily due to net realized and unrealized losses, a reversal from the $0.7 million accrued in Q1 2022[102](index=102&type=chunk)[362](index=362&type=chunk) Quarterly Capital Gains Incentive Fees | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Capital gains incentive fees | (1,556) | 681 | [Administration Agreement](index=50&type=section&id=Administration%20Agreement) The agreement outlines the Administrator's role in providing services, for which the Company reimburses costs - The Company entered into an Administration Agreement with the Administrator on **October 1, 2018**, which was most recently renewed on May 2, 2023[363](index=363&type=chunk) - The Administrator provides administrative and compliance services, and the Company **reimburses its costs, expenses, and allocable overhead**[337](index=337&type=chunk)[363](index=363&type=chunk) - The Administrator elected to **forgo reimbursement for rent and other occupancy costs** for Q1 2023 and Q1 2022[337](index=337&type=chunk) Quarterly Administrative Expenses | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Administrative service expenses incurred | 378 | 840 | | Unpaid and included in Due to affiliates | 300 | 1,200 | [Sub-Administration and Custody Agreement](index=50&type=section&id=Sub-Administration%20and%20Custody%20Agreement) The Administrator has a Sub-Administration Agreement with State Street Bank and Trust Company, which also serves as Custodian - The Administrator entered into a sub-administration agreement with **State Street Bank and Trust Company**, which provides various accounting and administrative services[365](index=365&type=chunk) - The Sub-Administrator also serves as the Company's **custodian**[365](index=365&type=chunk) [Expense Support and Conditional Reimbursement Agreement](index=51&type=section&id=Expense%20Support%20and%20Conditional%20Reimbursement%20Agreement) The Expense Support Agreement terminated in October 2021, with no outstanding reimbursement obligations as of March 31, 2023 - The Expense Support and Conditional Reimbursement Agreement allowed the Adviser to elect to pay **certain expenses of the Company**[340](index=340&type=chunk) - The Expense Support Agreement **terminated by its own terms on October 28, 2021**[341](index=341&type=chunk) - As of March 31, 2023 and 2022, there were **no amounts subject to the Reimbursement Payment obligation**[341](index=341&type=chunk) [Note 4. Investments](index=51&type=section&id=Note%204.%20Investments) This note details the investment portfolio's composition by type, industry, and geography - The Company's investment portfolio primarily consists of **first lien debt**, followed by equity and second lien debt[367](index=367&type=chunk) - As of March 31, 2023, **99.9% of performing debt investments bore interest at a floating rate**, consistent with December 31, 2022[369](index=369&type=chunk) - As of March 31, 2023, **one borrower was on non-accrual status**, compared to none as of December 31, 2022[345](index=345&type=chunk) [Investment Portfolio Composition](index=51&type=section&id=Investment%20Portfolio%20Composition) The portfolio is predominantly composed of first lien debt, with smaller allocations to equity and second lien debt Portfolio Composition (March 31, 2023) | Investment Type | Cost ($ thousands) | Fair Value ($ thousands) | % of Total Investments at Fair Value | |:---|:---|:---|:---| | First lien debt | 9,508,358 | 9,425,003 | 97.91 % | | Second lien debt | 49,200 | 46,678 | 0.48 | | Equity investments | 111,548 | 154,521 | 1.61 | | Total | 9,669,106 | 9,626,202 | 100.00 % | Portfolio Composition (December 31, 2022) | Investment Type | Cost ($ thousands) | Fair Value ($ thousands) | % of Total Investments at Fair Value | |:---|:---|:---|:---| | First lien debt | 9,497,570 | 9,419,963 | 97.95 % | | Second lien debt | 48,753 | 46,336 | 0.48 | | Equity investments | 111,549 | 150,949 | 1.57 | | Total | 9,657,872 | 9,617,248 | 100.00 % | [Industry Composition](index=52&type=section&id=Industry%20Composition) The portfolio is diversified across industries, with Health Care, Software, and Professional Services as top concentrations Industry Diversification | Industry | March 31, 2023 (% of Fair Value) | December 31, 2022 (% of Fair Value) | |:---|:---|:---| | Health Care Providers & Services | 11.78 % | 11.66 % | | Software | 14.77 % | 14.72 % | | Professional Services | 8.84 % | 8.76 % | | Insurance | 7.67 % | 8.10 % | | Commercial Services & Supplies | 7.67 % | 7.69 % | | Diversified Financial Services | 1.35 % | 1.36 % | | Diversified Telecommunication Services | 1.34 % | 1.13 % | | Electrical Equipment | 1.68 % | 1.70 % | | Electronic Equipment, Instruments & Components | 1.08 % | 1.10 % | | Energy Equipment & Services | 0.49 % | 0.57 % | | Health Care Equipment & Supplies | 0.59 % | 0.58 % | | Health Care Technology | 3.90 % | 3.92 % | | Industrial Conglomerates | 0.09 % | 0.09 % | | Internet & Direct Marketing Retail | 3.31 % | 3.32 % | | IT Services | 2.90 % | 2.84 % | | Machinery | 0.05 % | 0.05 % | | Marine | 0.26 % | 0.26 % | | Media | 0.07 % | 0.07 % | | Oil, Gas & Consumable Fuels | 1.19 % | 1.18 % | | Paper & Forest Products | 0.08 % | 0.08 % | | Pharmaceuticals | 0.02 % | 0.02 % | | Real Estate Management & Development | 0.74 % | 0.74 % | | Road & Rail | 0.16 % | 0.17 % | | Specialty Retail | 1.77 % | 1.77 % | | Technology Hardware, Storage & Peripherals | 0.87 % | 0.84 % | | Trading Companies & Distributors | 1.02 % | 1.01 % | | Transportation Infrastructure | 3.71 % | 3.64 % | | Total | 100.00 % | 100.00 % | [Geographic Composition](index=53&type=section&id=Geographic%20Composition) The majority of investments are in the United States, followed by Canada and Europe Geographic Diversification (March 31, 2023) | Region | Cost ($ thousands) | Fair Value ($ thousands) | % of Total Investments at Fair Value | |:---|:---|:---|:---| | United States | 8,983,241 | 8,929,026 | 92.76 % | | Canada | 470,555 | 486,555 | 5.05 | | Europe | 215,310 | 210,621 | 2.19 | | Total | 9,669,106 | 9,626,202 | 100.00 % | Geographic Diversification (December 31, 2022) | Region | Cost ($ thousands) | Fair Value ($ thousands) | % of Total Investments at Fair Value | |:---|:---|:---|:---| | United States | 8,934,926 | 8,893,051 | 92.47 % | | Canada | 510,599 | 520,368 | 5.41 | | Europe | 212,347 | 203,829 | 2.12 | | Total | 9,657,872 | 9,617,248 | 100.00 % | [Note 5. Fair Value Measurements](index=53&type=section&id=Note%205.%20Fair%20Value%20Measurements) This note details the fair value hierarchy of financial instruments, categorizing them based on input observability - The fair value hierarchy categorizes financial instruments into **Level 1** (quoted prices), **Level 2** (observable inputs), and **Level 3** (unobservable inputs)[250](index=250&type=chunk) - As of March 31, 2023, the majority of investments were classified as **Level 3 ($9,426,489 thousand)**[370](index=370&type=chunk) - The fair value of the Company's SPV Financing Facilities and Revolving Credit Facility approximates their carrying value due to **variable interest rates**[375](index=375&type=chunk) [Fair Value Hierarchy](index=53&type=section&id=Fair%20Value%20Hierarchy) Most of the Company's investments, particularly first lien debt, were categorized as Level 3 Fair Value Hierarchy (March 31, 2023) | Investment Type | Level 1 ($ thousands) | Level 2 ($ thousands) | Level 3 ($ thousands) | Total ($ thousands) | |:---|:---|:---|:---|:---| | First lien debt | — | 199,713 | 9,225,290 | 9,425,003 | | Second lien debt | — | — | 46,678 | 46,678 | | Equity investments | — | — | 154,521 | 154,521 | | Total | — | 199,713 | 9,426,489 | 9,626,202 | Fair Value Hierarchy (December 31, 2022) | Investment Type | Level 1 ($ thousands) | Level 2 ($ thousands) | Level 3 ($ thousands) | Total ($ thousands) | |:---|:---|:---|:---|:---| | First lien debt | — | 144,452 | 9,275,511 | 9,419,963 | | Second lien debt | — | — | 46,336 | 46,336 | | Equity investments | — | — | 150,949 | 150,949 | | Total | — | 144,452 | 9,472,796 | 9,617,248 | - Transfers into or out of Level 3 were primarily due to **decreased or increased price transparency**[371](index=371&type=chunk) [Changes in Level 3 Fair Value](index=54&type=section&id=Changes%20in%20Level%203%20Fair%20Value) Level 3 fair value changed due to purchases, repayments, and unrealized appreciation/depreciation Level 3 Fair Value Changes (Q1 2023) | Metric | First Lien Debt ($ thousands) | Second Lien Debt ($ thousands) | Equity Investments ($ thousands) | Total Investments ($ thousands) | |:---|:---|:---|:---|:---| | Fair value, beginning of period | 9,275,511 | 46,336 | 150,949 | 9,472,796 | | Purchases of investments | 114,229 | 411 | — | 114,640 | | Proceeds from principal repayments and sales | (71,040) | — | — | (71,040) | | Accretion of discount/amortization of premium | 8,407 | 36 | — | 8,443 | | Net realized gain (loss) | 46 | — | — | 46 | | Net change in unrealized appreciation (depreciation) | (14,862) | (105) | 3,572 | (11,395) | | Transfers into Level 3 | 4,938 | — | — | 4,938 | | Transfers out of Level 3 | (91,939) | — | — | (91,939) | | Fair value, end of period | 9,225,290 | 46,678 | 154,521 | 9,426,489 | Level 3 Fair Value Changes (Q1 2022) | Metric | First Lien Debt ($ thousands) | Second Lien Debt ($ thousands) | Equity Investments ($ thousands) | Total Investments ($ thousands) | |:---|:---|:---|:---|:---| | Fair value, beginning of period | 9,288,184 | 42,880 | 170,265 | 9,501,329 | | Purchases of investments | 253,310 | 265 | 7,264 | 260,839 | | Proceeds from principal repayments and sales | (35,031) | — | (10,687) | (45,718) | | Accretion of discount/amortization of premium | 9,212 | 19 | — | 9,231 | | Net realized gain (loss) | (62) | — | 5,920 | 5,858 | | Net change in unrealized appreciation (depreciation) | 428 | 79 | 2,384 | 2,891 | | Transfers into Level 3 | 25,772 | — | — | 25,772 | | Transfers out of Level 3 | — | — | — | — | | Fair value, end of period | 9,541,813 | 43,243 | 175,146 | 9,760,202 | [Quantitative Information on Level 3 Inputs](index=55&type=section&id=Quantitative%20Information%20on%20Level%203%20Inputs) This section details significant unobservable inputs for Level 3 instruments, including discount rates and performance multiples Level 3 Unobservable Inputs (March 31, 2023) | Investment Type | Fair Value ($ thousands) | Valuation Technique | Unobservable Input | Range Low | Range High | Weighted Average | |:---|:---|:---|:---|:---|:---|:---| | Investments in first lien debt | 9,219,940 | Yield analysis | Discount rate | 6.39 % | 20.62 % | 10.03 % | | | 5,350 | Market quotations | Broker quoted price | 96.50 % | 96.50 % | 96.50 % | | Investments in second lien debt | 46,678 | Yield analysis | Discount rate | 10.15 % | 13.98 % | 12.53 % | | Investments in equity | 105,862 | Market approach | Performance multiple | 5.70x | 39.66x | 12.66x | | | 25,566 | Option model | Expected volatility | 30.00 % | 50.00 % | 41.80 % | | | 23,093 | Yield analysis | Discount rate | 11.67 % | 13.55 % | 12.88 % | Level 3 Unobservable Inputs (December 31, 2022) | Investment Type | Fair Value ($ thousands) | Valuation Technique | Unobservable Input | Range Low | Range High | Weighted Average | |:---|:---|:---|:---|:---|:---|:---| | Investments in first lien debt | 9,037,133 | Yield analysis | Discount rate | 6.83 % | 19.84 % | 10.13 % | | | 238,378 | Market quotations | Broker quoted price | 82.00 % | 96.75 % | 94.19 % | | Investments in second lien debt | 46,336 | Yield analysis | Discount rate | 10.43 % | 14.25 % | 12.60 % | | Investments in equity | 105,782 | Market approach | Performance multiple | 5.50x | 29.00x | 13.41x | | | 22,481 | Option pricing model| Expected volatility | 30.00 % | 50.00 % | 43.46 % | | | 22,686 | Yield analysis | Discount rate | 11.31 % | 13.75 % | 12.74 % | - Significant increases in discount rates or decreases in quoted prices/performance multiples would result in a **significantly lower fair value measurement**[350](index=350&type=chunk) [Financial Instruments Not Carried at Fair Value](index=56&type=section&id=Financial%20Instruments%20Not%20Carried%20at%20Fair%20Value) The fair value of financing facilities approximates their carrying value due to variable interest rates - The fair value of the Company's SPV Financing Facilities and Revolving Credit Facility **approximates their carrying value** as they have variable interest rates[375](index=375&type=chunk) - These financial instruments would be categorized as **Level 3** within the hierarchy[375](index=375&type=chunk)[376](index=376&type=chunk) - The carrying amounts of the Company's other assets and liabilities also **approximate fair value** and are categorized as Level 3[376](index=376&type=chunk) [Note 6. Borrowings](index=56&type=section&id=Note%206.%20Borrowings) This note details the Company's various secured and unsecured borrowing arrangements and covenants - The Company is allowed to borrow amounts such that its **asset coverage is at least 150%** after such borrowing[377](index=377&type=chunk) - The Company was in **compliance with all covenants** of its financing facilities and unsecured notes as of March 31, 2023, and December 31, 2022[389](index=389&type=chunk)[401](index=401&type=chunk)[412](index=412&type=chunk) Asset Coverage | Metric | March 31, 2023 | December 31, 2022 | |:---|:---|:---| | Asset coverage ratio | 176.4% | 174.8% | | Senior securities outstanding | $5,484.6 million | $5,563.0 million | [SPV Financing Facilities](index=56&type=section&id=SPV%20Financing%20Facilities) The Company's subsidiaries have secured financing facilities collateralized by their portfolio investments - Jackson Hole Funding, Breckenridge Funding, and Big Sky Funding have entered into **secured financing facilities**[378](index=378&type=chunk) - The obligations of each SPV are secured by a **first priority security interest** in all of the applicable SPV's portfolio investments and cash, and are non-recourse to the Company[400](index=400&type=chunk) - Each SPV Financing Facility contains **customary events of default**[379](index=379&type=chunk) [Jackson Hole Funding Facility](index=57&type=section&id=Jackson%20Hole%20Funding%20Facility) The facility has a maximum commitment of $400 million, expandable to $900 million, and matures in May 2025 - The Jackson Hole Funding Facility has a maximum commitment amount of **$400 million**, with an accordion feature allowing up to **$900 million**[403](index=403&type=chunk) - Advances bear interest at **SOFR plus 2.375% to 2.525%** per annum, and a commitment fee of 0.60% on the unused amount[381](index=381&type=chunk) - The borrowing period expires on November 16, 2023, and the facility matures on **May 16, 2025**[403](index=403&type=chunk) [Breckenridge Funding Facility](index=57&type=section&id=Breckenridge%20Funding%20Facility) The facility bears interest at three-month Term SOFR plus 1.70%-2.30% and matures in December 2026 - Advances under the Breckenridge Funding Facility bear interest at **three-month Term SOFR plus 1.70%, 2.05% or 2.30%** per annum[382](index=382&type=chunk) - Commitment fees are **0.70%** or **0.35%** per annum based on the unused facility amount[382](index=382&type=chunk) - The borrowing period expires on December 21, 2024, and the facility matures on **December 21, 2026**[405](index=405&type=chunk) [Big Sky Funding Facility](index=57&type=section&id=Big%20Sky%20Funding%20Facility) The facility's advances bear interest at one-month Term SOFR plus 1.80% and it matures in September 2026 - Advances under the Big Sky Funding Facility bear interest at **one-month Term SOFR plus 1.80%** per annum (until September 2024) and 2.10%-2.45% (thereafter)[383](index=383&type=chunk) - The facility requires a **minimum utilization of 80%** of financing commitments[383](index=383&type=chunk) - The borrowing period expires on March 30, 2026, and the facility matures on **September 30, 2026**[408](index=408&type=chunk) [Revolving Credit Facility](index=58&type=section&id=Revolving%20Credit%20Facility) The facility allows borrowings in multiple currencies, secured by Company assets, and terminates in June 2026 - The Revolving Credit Facility provides for borrowings in U.S. dollars and certain foreign currencies, secured by a **first priority security interest** in substantially all of the Company's assets[384](index=384&type=chunk)[385](index=385&type=chunk) - Loans bear interest at a base rate option plus **0.75%-0.875%**, or an applicable benchmark rate plus **1.75%-1.875%**[410](index=410&type=chunk) - The Company pays an unused fee of **0.375%** per annum on the daily unused amount[410](index=410&type=chunk) - The facility terminates on **June 28, 2026**, and requires maintaining a **150% asset coverage ratio**[384](index=384&type=chunk)[411](index=411&type=chunk) [Unsecured Notes](index=58&type=section&id=Unsecured%20Notes) The Company has issued several series of unsecured notes with varying maturities and interest rates - The Company issued unsecured notes (**2023, 2026, New 2026, 2027, and 2028 Notes**) with various maturities and interest rates[413](index=413&type=chunk) - These notes are **general unsecured obligations**, effectively junior to secured debt and structurally junior to subsidiary indebtedness[2](index=2&type=chunk)[416](index=416&type=chunk)[418](index=418&type=chunk)[436](index=436&type=chunk)[438](index=438&type=chunk) - The Unsecured Notes contain covenants requiring compliance with the **asset coverage requirements** of the 1940 Act[413](index=413&type=chunk) [2023 Notes](index=59&type=section&id=2023%20Notes) The $400 million notes mature in July 2023 and bear interest at 3.650% annually - The Company issued **$400 million** aggregate principal amount of 3.650% notes due 2023[415](index=415&type=chunk) - The 2023 Notes mature on **July 14, 2023**, and bear interest at a rate of **3.650%** per year[2](index=2&type=chunk) - They are general unsecured obligations and may be redeemed at the **Company's option**[2](index=2&type=chunk) [2026 Notes](index=59&type=section&id=2026%20Notes) The $800 million notes mature in January 2026 and bear interest at 3.625% annually - The Company issued **$800 million** aggregate principal amount of 3.625% notes due 2026[435](index=435&type=chunk) - The 2026 Notes mature on **January 15, 2026**, and bear interest at a rate of **3.625%** per year[416](index=416&type=chunk) - They are general unsecured obligations and may be redeemed at the **Company's option**[416](index=416&type=chunk) [New 2026 Notes](index=59&type=section&id=New%202026%20Notes) The $700 million notes mature in September 2026 and bear interest at 2.750% annually - The Company issued **$700 million** aggregate principal amount of 2.750% notes due 2026[391](index=391&type=chunk)[436](index=436&type=chunk) - The New 2026 Notes mature on **September 16, 2026**, and bear interest at a rate of **2.750%** per year[436](index=436&type=chunk) - They are general unsecured obligations and may be redeemed at the **Company's option**[436](index=436&type=chunk) [2027 Notes](index=60&type=section&id=2027%20Notes) The $650 million notes mature in February 2027 and bear interest at 2.125% annually - The Company issued **$650 million** aggregate principal amount of 2.125% notes due 2027[437](index=437&type=chunk) - The 2027 Notes mature on **February 15, 2027**, and bear interest at a rate of **2.125%** per year[418](index=418&type=chunk) - They are general unsecured obligations and may be redeemed at the **Company's option**[418](index=418&type=chunk) [2028 Notes](index=60&type=section&id=2028%20Notes) The $650 million notes mature in September 2028 and bear interest at 2.850% annually - The Company issued **$650 million** aggregate principal amount of 2.850% notes due 2028[393](index=393&type=chunk)[438](index=438&type=chunk) - The 2028 Notes mature on **September 30, 2028**, and bear interest at a rate of **2.850%** per year[438](index=438&type=chunk) - They are general unsecured obligations and may be redeemed at the **Company's option**[438](index=438&type=chunk) [Outstanding Debt Obligations](index=60&type=section&id=Outstanding%20Debt%20Obligations) As of March 31, 2023, total outstanding principal was $5,484.6 million with $1,065.4 million available Debt Summary (March 31, 2023) | Facility/Notes | Aggregate Committed Principal ($ thousands) | Outstanding Principal ($ thousands) | Carrying Value ($ thousands) | Unamortized Debt Issuance Costs ($ thousands) | Unused Portion (1) ($ thousands) | Amount (2) Available ($ thousands) | |:---|:---|:---|:---|:---|:---|:---| | Jackson Hole Funding (3) Facility | 400,000 | 360,019 | 360,019 | — | 39,981 | 39,981 | | Breckenridge Funding Facility | 825,000 | 809,500 | 809,500 | — | 15,500 | 15,500 | | Big Sky Funding Facility | 500,000 | 499,606 | 499,606 | — | 394 | 394 | | (4) Revolving Credit Facility | 1,625,000 | 615,469 | 615,469 | — | 1,009,531 | 1,009,531 | | 2023 Notes | 400,000 | 400,000 | 399,381 | 619 | — | — | | 2026 Notes | 800,000 | 800,000 | 795,001 | 4,999 | — | — | | New 2026 Notes | 700,000 | 700,000 | 693,868 | 6,132 | — | — | | 2027 Notes | 650,000 | 650,000 | 639,346 | 10,654 | — | — | | 2028 Notes | 650,000 | 650,000 | 639,664 | 10,336 | — | — | | Total | 6,550,000 | 5,484,594 | 5,451,854 | 32,740 | 1,065,406 | 1,065,406 | - As of March 31, 2023, the Revolving Credit Facility had borrowings denominated in **Canadian Dollars (CAD) 274.9 million**, **Euros (EUR) 97.9 million**, and **British Pounds (GBP) 65.4 million**[439](index=439&type=chunk) [Note 7. Commitments and Contingencies](index=61&type=section&id=Note%207.%20Commitments%20and%20Contingencies) This note outlines the Company's unfunded loan commitments and other potential liabilities - As of March 31, 2023, the Company had unfunded delayed draw term loans and revolvers totaling **$598.8 million**[110](index=110&type=chunk)[473](index=473&type=chunk) - As of March 31, 2023, the Company estimates that **$2.4 million** of investments were committed but not yet funded[35](index=35&type=chunk)[495](index=495&type=chunk) - At March 31, 2023, management is **not aware of any pending or threatened litigation**[454](index=454&type=chunk)[496](index=496&type=chunk) [Note 8. Net Assets](index=62&type=section&id=Note%208.%20Net%20Assets) This note details changes in net assets, including shares issued, distributions, and share repurchase plans - The Company has the authority to issue an **unlimited number of shares** at $0.001 par value per share[433](index=433&type=chunk) - The Company priced its IPO on October 28, 2021, issuing **9,180,000 common shares at $26.15 per share**[458](index=458&type=chunk) - The Company has adopted an **'opt out' dividend reinvestment plan (DRIP)**, where cash dividends are automatically reinvested[23](index=23&type=chunk)[469](index=469&type=chunk) [Shares Issued](index=62&type=section&id=Shares%20Issued) The Company issued 9.18 million shares during its IPO, with no new shares issued in Q1 2023 outside of the DRIP - On October 28, 2021, the Company priced its IPO, issuing **9,180,000 common shares at $26.15 per share**, resulting in $230.6 million net cash proceeds[458](index=458&type=chunk) - On November 4, 2021, underwriters exercised their option to purchase an additional **1,377,000 shares**, generating $33.8 million net cash proceeds[458](index=458&type=chunk) - There have been **no shares issued** for Q1 2023 and Q1 2022, other than through the dividend reinvestment program[20](index=20&type=chunk)[468](index=468&type=chunk) [Distributions](index=62&type=section&id=Distributions) The Company declared a distribution of $0.7000 per share in Q1 2023, totaling $112.4 million Distributions Declared (Q1 2023) | Date Declared | Record Date | Payment Date | Per Share Amount | Total Amount ($ thousands) | |:---|:---|:---|:---|:---| | February 27, 2023 | March 31, 2023| April 27, 2023| 0.7000 | 112,400 | | Total | | | 0.7000 | 112,400 | Distributions Declared (Q1 2022) | Date Declared | Record Date | Payment Date | Per Share Amount | Total Amount ($ thousands) | Note | |:---|:---|:---|:---|:---|:---| | October 18, 2021| January 18, 2022| May 13, 2022 | 0.1000 | 16,927 | (1) | | October 18, 2021| March 16, 2022| May 13, 2022 | 0.1500 | 25,454 | (1) | | February 23, 2022| March 31, 2022| May 13, 2022 | 0.5300 | 89,937 | | | Total | | | 0.7800 | 132,318 | | - (1) Represents a **special distribution**[21](index=21&type=chunk) [Dividend Reinvestment Plan (DRIP)](index=62&type=section&id=Dividend%20Reinvestment%20Plan%20(DRIP)) The DRIP automatically reinvests cash dividends into additional shares for non-opting-out shareholders - The Company has adopted a dividend reinvestment plan (DRIP) where cash dividends are **automatically reinvested** for shareholders who do not opt out[23](index=23&type=chunk) - The number of shares issued is determined by dividing the cash dividend amount by the **market price per common share** on the payment date[23](index=23&type=chunk)[461](index=461&type=chunk) - Shareholders receiving distributions in shares are subject to the **same U.S. federal, state, and local tax consequences** as if they received cash[462](index=462&type=chunk)[469](index=469&type=chunk) DRIP Activity (Q1 2023) | Payment Date | DRIP Shares Value ($ thousands) | DRIP Shares Issued | |:---|:---|:---| | January 31, 2023| 5,132 | 208,510 | | Total | 5,132 | 208,510 | DRIP Activity (Q1 2022) | Payment Date | DRIP Shares Value ($ thousands) | DRIP Shares Issued | |:---|:---|:---| | January 31, 2022| 11,469 | 417,379 | | Total | 11,469 | 417,379 | [Share Repurchase Plan](index=63&type=section&id=Share%20Repurchase%20Plan) A new $250 million share repurchase plan was authorized in February 2023, with no shares repurchased in Q1 2023 - The Company's initial share repurchase plan for up to **$262 million** terminated in November 2022[27](index=27&type=chunk)[470](index=470&type=chunk) - In February 2023, the Board authorized a new share repurchase plan to repurchase up to **$250 million** of common shares below NAV[32](index=32&type=chunk)[492](index=492&type=chunk) - For Q1 2023 and Q1 2022, the Company **did not repurchase any of its shares** under the Share Repurchase Plans[33](index=33&type=chunk)[471](index=471&type=chunk)[484](index=484&type=chunk) [Shareholder Transfer Restrictions](index=63&type=section&id=Shareholder%20Transfer%20Restrictions) Pre-IPO shareholders were subject to phased transfer restrictions, which fully lifted after July 1, 2022 - Shareholders who held common shares **prior to the IPO** were subject to transfer restrictions without the consent of the Adviser[34](index=34&type=chunk) - Restrictions were phased, with all shares becoming transferable **after July 1, 2022**[34](index=34&type=chunk)[36](index=36&type=chunk)[46](index=46&type=chunk) - The Company's trustees and executive officers also agreed not to transfer their shares for **180 days after the IPO**[46](index=46&type=chunk) [Note 9. Earnings Per Share](index=64&type=section&id=Note%209.%20Earnings%20Per%20Share) Earnings per share increased to $0.86 in Q1 2023 from $0.63 in the prior year, driven by higher net assets from operations Quarterly Earnings Per Share | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |:---|:---|:---| | Net increase (decrease) in net assets from operations | 138,798 | 107,240 | | Weighted average shares outstanding (basic and diluted) | 160,501,868 | 169,556,923 | | Earnings (loss) per common share (basic and diluted) | $0.86 | $0.63 | [Note 10. Financial Highlights](index=65&type=section&id=Note%2010.%20Financial%20Highlights) This note presents key financial highlights, including per share data, total returns, and key ratios Financial Highlights | Per Share Data (Three Months Ended March 31) | 2023 | 2022 | |:---|:---|:---| | Net asset value, beginning of period | $25.93 | $26.27 | | Net investment income | 0.93 | 0.61 | | Net unrealized and realized gain (loss) | (0.06) | 0.03 | | Net increase (decrease) in net assets from operations | 0.87 | 0.64 | | Distributions declared | (0.70) | (0.78) | | Total increase (decrease) in net assets | 0.17 | (0.14) | | Net asset value, end of period | $26.10 | $26.13 | | Shares outstanding, end of period | 160,571,371 | 169,691,412 | | Total return based on NAV | 3.36 % | 2.44 % | | Total return based on market value | 14.26 % | (15.67)%| | Ratio of net expenses to average net assets | 11.69 % | 7.39 % | | Ratio of net investment income to average net assets | 13.36 % | 9.15 % | | Portfolio turnover rate | 1.06 % | 1.34 % | | Net assets, end of period | $4,190,496| $4,433,870| | Asset coverage ratio | 176.4 % | 178.1 % | - **Asset coverage per unit** is the ratio of total assets (less liabilities excluding senior securities) to the aggregate amount of senior securities[40](index=40&type=chunk) - The Subscription Facility was **terminated on November 3, 2020**[40](index=40&type=chunk) [Note 11. Subsequent Events](index=67&type=section&id=Note%2011.%20Subsequent%20Events) The Board declared a distribution of $0.70 per share on May 10, 2023, with no other material subsequent events identified - The Company's management evaluated subsequent events through the **date of issuance** of the consolidated financial statements[52](index=52&type=chunk) - On May 10, 2023, the Board declared a distribution of **$0.70 per share**, payable on July 27, 2023[41](index=41&type=chunk) - There have been **no other subsequent events** that would require disclosure or recognition[52](index=52&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the Company's investment objectives, results, portfolio, and financial condition - The Company's investment objectives are to generate **current income** and, to a lesser extent, **long-term capital appreciation**[83](index=83&type=chunk)[429](index=429&type=chunk) - The Company generally invests at least **80% of its total assets in secured debt investments**, primarily first lien senior secured and unitranche loans[54](index=54&type=chunk)[55](index=55&type=chunk)[429](index=429&type=chunk) - The discussion contains **forward-looking statements** and involves numerous risks and uncertainties[82](index=82&type=chunk) [Overview and Investment Framework](index=68&type=section&id=Overview%20and%20Investment%20Framework) The Company operates as a BDC and RIC, aiming for current income and capital appreciation through secured debt investments - The Company is a non-diversified, closed-end management investment company regulated as a **BDC** and treated as a **RIC**[43](index=43&type=chunk) - Investment objectives are to generate **current income** and, to a lesser extent, **long-term capital appreciation**[83](index=83&type=chunk) - The Company invests at least **80% of its total assets in secured debt investments**, focusing on private U.S. companies[54](index=54&type=chunk)[55](index=55&type=chunk) [Key Components of Our Results of Operations](index=68&type=section&id=Key%20Components%20of%20Our%20Results%20of%20Operations) Operating results are influenced by investment activity, with revenues from interest and fees, and expenses from advisory and administrative costs - The level of investment activity varies depending on factors such as **capital availability, M&A activity, and economic environment**[84](index=84&type=chunk) - Revenues are generated from **interest income from debt securities**, dividends, and various fees[57](index=57&type=chunk)[85](index=85&type=chunk) - Expenses include **investment advisory fees** to the Adviser, allocable overhead to the Administrator, and other operational costs[58](index=58&type=chunk) [Revenues](index=68&type=section&id=Revenues) Revenues are primarily derived from interest on floating-rate debt securities, dividends, and various fees - The Company generates revenues in the form of **interest income** from debt securities and dividends[85](index=85&type=chunk) - Debt investments typically have a term of **five to eight years** and bear interest at floating rates[85](index=85&type=chunk) - Additional revenue is generated from various fees such as **commitment, loan origination, and structuring fees**[57](index=57&type=chunk) [Expenses](index=69&type=section&id=Expenses) The Company bears all operational costs, including advisory fees and administrative expenses - The Company bears all costs of its operations, including **investment advisory fees** to the Adviser[58](index=58&type=chunk) - The Company also bears its allocable portion of **compensation, overhead, and other expenses** incurred by the Administrator[58](index=58&type=chunk) - The Administrator has elected to **forgo any reimbursement for rent and other occupancy costs** for Q1 2023 and Q1 2022[88](index=88&type=chunk) [Portfolio and Investment Activity](index=70&type=section&id=Portfolio%20and%20Investment%20Activity) In Q1 2023, the Company acquired $114.6 million in new investments, with the number of portfolio companies increasing to 181 Quarterly Investment Activity | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Total investments, beginning of period | 9,657,872 | 9,745,126 | | New investments purchased | 114,636 | 288,423 | | Investments sold or repaid | (109,051) | (133,142) | | Total investments, end of period | 9,669,106 | 9,916,379 | | Number of new investment commitments in new portfolio companies | 5 | 8 | | Average new investment commitment amount | 21,649 | 41,779 | | Weighted average yield of new investment commitments | 12.58 % | 7.00 % | | Number of portfolio companies (end of period) | 181 | 176 | | Weighted average yield on debt and income producing investments, at amortized cost | 11.30 % | 10.64 % | | Weighted average yield on debt and income producing investments, at fair value | 11.40 % | 10.73 % | | Percentage of debt investments bearing a floating rate | 99.92 % | 99.90 % | | Percentage of assets on non-accrual | 0.14 % | 0.00 % | - For Q1 2023, the Company acquired **$108.2 million** aggregate principal amount of investments, all of which was first lien debt[60](index=60&type=chunk) - As of March 31, 2023, the Company's portfolio companies had a weighted average annual revenue of **$703.5 million** and EBITDA of **$178.9 million**[63](index=63&type=chunk) [Results of Operations](index=71&type=section&id=Results%20of%20Operations) Total investment income increased significantly in Q1 2023 due to higher interest rates, leading to a rise in net assets from operations Quarterly Operating Results Summary | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Total investment income | 264,938 | 185,597 | | Net expenses | 113,141 | 81,508 | | Net investment income before excise tax | 151,797 | 104,089 | | Excise tax expense | 2,622 | 1,386 | | Net investment income after excise tax | 149,175 | 102,703 | | Net unrealized appreciation (depreciation) | (14,544) | (1,412) | | Net realized gain (loss) | 4,167 | 5,949 | | Net increase (decrease) in net assets from operations | 138,798 | 107,240 | - Net increase in net assets from operations can vary due to **acquisitions, new commitments, realized gains/losses, and changes in unrealized appreciation/depreciation**[65](index=65&type=chunk) [Investment Income](index=71&type=section&id=Investment%20Income) Total investment income increased by 43% in Q1 2023, primarily due to higher reference interest rates Quarterly Investment Income | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Interest income | 254,221 | 170,989 | | Payment-in-kind interest income | 9,841 | 8,686 | | Dividend income | — | 5,908 | | Fee income | 876 | 14 | | Total investment income | 264,938 | 185,597 | - Total investment income **increased by $79.3 million, or 43%**, for Q1 2023 compared to the prior year, primarily due to increased reference interest rates[66](index=66&type=chunk) - This increase was partially offset by a decrease in the size of the investment portfolio at fair value to **$9,626.2 million** at March 31, 2023[66](index=66&type=chunk) - Payment-in-kind interest income represented **3.7%** and **4.7%** of investment income for Q1 2023 and Q1 2022, respectively[67](index=67&type=chunk) [Expenses](index=72&type=section&id=Expenses) Total expenses increased in Q1 2023, driven by higher interest expense and income-based incentive fees Quarterly Expenses | Metric | Three Months Ended March 31, 2023 ($ thousands) | Three Months Ended March 31, 2022 ($ thousands) | |:---|:---|:---| | Interest expense | 66,728 | 40,301 | | Management fees | 24,696 | 25,636 | | Income based incentive fees | 30,393 | 21,284 | | Capital gains incentive fees | (1,556) | 681 | | Professional fees | 1,188 | 707 | | Board of Trustees' fees | 225 | 181 | | Administrative service expenses | 378 | 840 | | Other general and administrative | 1,605 | 1,327 | | Excise tax expense | 2,622 | 1,386 | | Total expenses (including excise tax expense) | 126,279 | 92,343 | | Management fees waived | (6,174) | (6,409) | | Incentive fees waived | (4,342) | (3,040) | | Net expenses (including excise tax expense) | 115,763 | 82,894 | - Rising interest rates have favorably impacted investment income but could **negatively impact borrowers' free cash flow and credit quality**[97](index=97&type=chunk) [Interest Expense](index=72&type=section&id=Interest%20Expense) Total interest expense increased by 66% in Q1 2023 due to increased borrowings and higher interest rates - Total interest expense increased to **$66.7 million** for Q1 2023, an increase of **$26.4 million or 66%**[111](index=111&type=chunk) - This increase was driven by increased borrowings and a higher weighted average interest rate (**4.68% in Q1 2023 vs. 2.79% in Q1 2022**)[111](index=111&type=chunk) - The average principal debt outstanding remained stable at approximately **$5,619.0 million** in Q1 2023[111](index=111&type=chunk) [Management Fees](index=72&type=section&id=Management%20Fees) Management fees decreased by 4% in Q1 2023 due to a smaller average asset base, with voluntary waivers applied - Management fees decreased to **$24.7 million** for Q1 2023, a decrease of **$0.9 million, or 4%**[70](index=70&type=chunk) - This decrease was primarily due to a decrease in **average quarter-end gross assets**[70](index=70&type=chunk)[112](index=112&type=chunk) - Voluntary waivers by the Adviser resulted in **$6.2 million** and **$6.4 million** in waived management fees for Q1 2023 and Q1 2022, respectively[70](index=70&type=chunk) [Income Based Incentive Fees](index=73&type=section&id=Income%20Based%20Incentive%20Fees) Income-based incentive fees increased in Q1 2023, driven by higher pre-incentive fee net investment income - Income-based incentive fees increased to **$30.4 million** for Q1 2023, from $21.3 million in the prior year[101](index=101&type=chunk) - This increase was due to a rise in **pre-incentive fee net investment income** to $173.7 million in Q1 2023[72](index=72&type=chunk)[101](index=101&type=chunk) - The Adviser voluntarily waived incentive fees of **$4.3 million** and **$3.0 million** for Q1 2023 and Q1 2022, respectively[101](index=101&type=chunk) [Capital Gains Incentive Fees](index=73&type=section&id=Capital%20Gains%20Incentive%20Fees) Capital gains incentive fees reversed to $(1.6) million in Q1 2023 due to net realized and unrealized losses - The Company accrued capital gains incentive fees of **$(1.6) million** for Q1 2023, compared to $0.7 million for the prior year[102](index=102&type=chunk) - This change was primarily due to **net realized and unrealized losses** in Q1 2023[102](index=102&type=chunk) - The reversal of previously accrued incentive fees was attributable to **net realized and unrealized losses** in the current year[102](index=102&type=chunk) [Other Expenses](index=73&type=section&id=Other%20Expenses) Total other expenses increased in Q1 2023, mainly driven by higher professional and administrative expenses - Total other expenses increased to **$3.4 million** for Q1 2023, from $3.1 million in the prior year[103](index=103&type=chunk) - This increase was primarily driven by an increase in **Professional fees** and **Other general and administrative expenses**[103](index=103&type=chunk) - The increase was partially offset by a decrease in **Administrative service expenses**[103](index=103&type=chunk) [Income Taxes, Including Excise Taxes](index=73&type=section&id=Income%20Taxes,%20Including%20Excise%20Taxes) As a RIC, the Company avoids corporate-level taxes by distributing income, but accrues a 4% excise tax on undistributed amounts - The Company elected to be treated as a **RIC**, generally relieving it from corporate-level U.S. federal income taxes[114](index=114&type=chunk) - The Company accrues a nondeductible **4% U.S. federal excise tax** on estimated excess taxable income not distributed[104](index=104&type=chunk) - For Q1 2023 and Q1 2022, the Company accrued **$2.6 million** and **$1.4 million**, respectively, of U.S. federal excise tax[75](index=75&type=chunk) [Net Unrealized Gain (Loss)](index

1 _______________________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 PART III Item 10. Directors, Executive Officers and Corporate Governance 185 Item 11. Executive Compensation 192 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 193 Item 13. Certain Relationships and Related Transactions, and Director Independence 194 Item 14. Principal Accounting Fe ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchange on which registered Common Shares of Beneficial Interest, $0.001 par value per share BXSL New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________ FORM 10-Q _______________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUA ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchange on which registered Common Shares of Beneficial Interest, $0.001 par value per share BXSL New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________ FORM 10-Q _______________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUA ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchange on which registered Common Shares of Beneficial Interest, $0.001 par value per share BXSL New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________ FORM 10-Q _______________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUA ...