Blackstone Secured Lending Fund(US:BXSL)2023-11-07 16:00PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Financial Statements 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 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 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 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 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 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 revolvers53353 - The investment portfolio is geographically concentrated in the United States, representing 94.75% of the total portfolio at fair value as of September 30, 2023192 Notes to Condensed Consolidated Financial Statements 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 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. companies132374 - 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 portfolio434 - 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 operations478 - 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 instability504463 Quantitative and Qualitative Disclosures About Market Risk 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, 2022508 Controls and Procedures 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 period509 - 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 controls510 PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits Legal Proceedings 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 proceedings332511 Risk Factors 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, 2022512 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 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 share513 - The company did not repurchase any of its shares under its repurchase plans during the nine months ended September 30, 2023495 Defaults Upon Senior Securities The company reports no defaults on its senior securities during the reporting period - None496 Mine Safety Disclosures This section is not applicable to the company's operations - Not applicable497 Other Information 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 affiliate498 Exhibits 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 documents517