Blackstone Secured Lending Fund(BXSL) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed consolidated financial statements for Blackstone Secured Lending Fund as of June 30, 2025, covering assets, operations, net assets, cash flows, and investment schedules Condensed Consolidated Statements of Assets and Liabilities Total assets and net assets increased by June 30, 2025, driven by investment growth, though Net Asset Value per share slightly decreased Condensed Consolidated Statements of Assets and Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total investments at fair value | $13,252,800 | $13,092,518 | | Total assets | $13,710,955 | $13,472,224 | | Total liabilities | $7,422,659 | $7,395,703 | | Total net assets | $6,288,296 | $6,076,521 | | NET ASSET VALUE PER SHARE | $27.33 | $27.39 | Condensed Consolidated Statements of Operations Q2 2025 saw increased total investment income and net investment income, but net assets from operations decreased due to realized and unrealized losses Q2 2025 vs Q2 2024 Performance (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total investment income | $344,803 | $327,064 | | Net investment income after tax | $175,902 | $173,098 | | Net increase in net assets | $155,042 | $196,186 | | Net investment income per share | $0.77 | $0.89 | | Earnings per share | $0.68 | $1.01 | Six Months 2025 vs 2024 Performance (in thousands, except per share amounts) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total investment income | $702,567 | $631,024 | | Net investment income after tax | $364,697 | $338,946 | | Net increase in net assets | $304,851 | $379,941 | | Net investment income per share | $1.60 | $1.76 | | Earnings per share | $1.34 | $1.98 | Condensed Consolidated Statements of Changes in Net Assets Net assets increased for the six months ended June 30, 2025, primarily due to share issuances and investment income, partially offset by dividends and losses Changes in Net Assets for the Six Months Ended June 30, 2025 (in thousands) | Description | Amount | | :--- | :--- | | Balance, December 31, 2024 | $6,076,521 | | Issuance of Common Shares, net | $248,842 | | Reinvestment of dividends | $10,510 | | Net investment income | $364,697 | | Net realized gain (loss) | ($4,672) | | Net change in unrealized depreciation | ($55,174) | | Dividends declared | ($352,428) | | Balance, June 30, 2025 | $6,288,296 | Condensed Consolidated Statements of Cash Flows Operating activities generated significant cash for the six months ended June 30, 2025, improving from the prior year and increasing cash and equivalents Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $203,604 | ($1,104,710) | | Net cash provided by (used in) financing activities | ($161,743) | $1,241,128 | | Net increase (decrease) in cash and cash equivalents | $41,861 | $136,418 | | Cash and cash equivalents, end of period | $273,678 | $291,292 | Condensed Consolidated Schedules of Investments The June 30, 2025, investment portfolio is primarily first lien debt, diversified across industries with Software as the largest sector, and largely US-concentrated Investment Portfolio Composition as of June 30, 2025 | Investment Type | Fair Value (in thousands) | % of Total | | :--- | :--- | :--- | | First lien debt | $13,015,201 | 98.2% | | Second lien debt | $122,942 | 0.9% | | Unsecured debt | $13,721 | 0.1% | | Equity | $100,936 | 0.8% | | Total | $13,252,800 | 100.0% | Top 5 Industry Concentrations as of June 30, 2025 | Industry | % of Total Fair Value | | :--- | :--- | | Software | 20.3% | | Professional Services | 8.8% | | Commercial Services & Supplies | 8.2% | | Insurance | 8.2% | | Health Care Providers & Services | 9.6% | - As of June 30, 2025, the company had unfunded commitments totaling approximately $1.87 billion[109] Notes to Condensed Consolidated Financial Statements Provides detailed explanations of accounting policies, investment valuation, related party agreements, portfolio specifics, borrowings, net assets, and subsequent events - The company is an externally managed BDC that has elected to be treated as a RIC for tax purposes, with investment objectives focused on current income and long-term capital appreciation[202][204] - The company pays a management fee at an annual rate of 1.0% of average gross assets and a two-part incentive fee based on income (17.5% over a 1.5% quarterly hurdle with a lookback and cap) and capital gains (17.5%)[255][256][258] - As of June 30, 2025, the company's asset coverage ratio was 188.5%, exceeding the required 150% minimum for BDCs[307] - Subsequent to quarter end, on August 6, 2025, the Board declared a distribution of $0.77 per share, and on August 4, 2025, the Revolving Credit Facility was amended to increase commitment to $2.4 billion and extend maturity[399][400] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, including investment income, expenses, portfolio activity, net assets, liquidity, borrowings, and macroeconomic impacts - For Q2 2025, total investment income increased by 5% YoY to $344.8 million, primarily due to a 20% increase in average investments at fair value[418] - Total interest expense for Q2 2025 rose 17% YoY to $92.3 million, driven by a higher average principal of debt outstanding, which increased from $5.8 billion to $7.2 billion[426] - The company had $273.7 million in cash and $2.7 billion available to borrow under its credit facilities as of June 30, 2025, expected to be sufficient for near-term operations and investing activities[450][452] - Management notes that while elevated interest rates have favorably impacted investment income, they also pose a risk to portfolio companies' credit quality and could lead to nonperformance if economic conditions weaken[424] Item 3. Quantitative and Qualitative Disclosures About Market Risk Details the company's market risk exposure, primarily interest rate risk, with a sensitivity analysis on net income due to floating-rate debt investments - As of June 30, 2025, 99.8% of the company's debt investments by fair value bore floating interest rates, making net investment income sensitive to changes in benchmark rates[472] Hypothetical Annualized Impact of Interest Rate Changes on Net Income (in thousands) | Basis Point Change | Impact on Net Income | | :--- | :--- | | Up 300 bps | $322,883 | | Up 200 bps | $215,255 | | Up 100 bps | $107,628 | | Down 100 bps | ($107,621) | | Down 200 bps | ($214,477) | | Down 300 bps | ($317,228) | Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The Co-Chief Executive Officers and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period[475] - No changes in internal control over financial reporting occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[476] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings - As of the filing date, the company is not a party to any material legal proceedings[479] Item 1A. Risk Factors No material changes to risk factors from the latest Annual Report on Form 10-K are reported - No material changes to risk factors from the latest Annual Report on Form 10-K are reported[480] Item 5. Other Information Discloses an amendment to the Revolving Credit Facility, increasing commitment and extending maturity, and a change in executive officers - On August 4, 2025, the company amended its Revolving Credit Facility, increasing the aggregate committed principal to $2.4 billion and extending the maturity date to August 4, 2030[484] - Effective August 4, 2025, Lucie Enns was appointed as the Chief Legal Officer and Secretary, following the resignation of Oran Ebel[485][486]