Financial Data and Key Metrics Changes - The net investment income (NII) for Q1 2025 was $189 million or $0.83 per share, representing a year-over-year increase of over 14% and the highest dollar amount since inception [23] - Total investment income for the quarter reached a record $354 million, up $54 million or 18% year-over-year, driven by increased interest income [23] - The net asset value (NAV) per share remained flat at $27.39 quarter over quarter, supported by $0.06 per share of excess earnings and $1.01 from share issuance at a premium to NAV [24][25] Business Line Data and Key Metrics Changes - BXSL ended the quarter with $12.8 billion of investments at fair value, a 20% increase from $10.4 billion year-over-year [13] - The weighted average yield on performing debt investments at fair value was 10.2%, down from 10.4% in the previous quarter [14] - 98% of BXSL's investments are in first lien senior secured loans, with an average loan-to-value (LTV) of 47.4% [14][16] Market Data and Key Metrics Changes - The company issued $500 million of new debt at a coupon of 5.3%, the tightest spread compared to traded BDC peers in 2025 [11] - The total weighted average interest rate on drawn debt decreased to 5.01% in Q1, down from 5.17% in the previous quarter [27] - The repayment rate for the portfolio was 28% annualized, up from 6% in the prior quarter, indicating increased repayments during the quarter [27] Company Strategy and Development Direction - The company continues to focus on investing in sectors that are more resilient during periods of volatility, emphasizing first lien senior secured lending to larger companies [15][59] - The management highlighted the importance of maintaining high-quality assets and avoiding riskier investments during uncertain economic conditions [59] - The value creation program is utilized to support portfolio companies, helping them manage tariff impacts and enhance revenue [20][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong fundamentals despite market volatility and uncertainty surrounding tariffs [6][8] - The company is positioned well for potential future opportunities amidst market volatility, with a focus on maintaining a defensive approach [16][64] - Management noted that while there is uncertainty in the market, they are seeing a steady pipeline of deals and are prepared to capitalize on opportunities as they arise [51][54] Other Important Information - The company maintained its dividend distribution of $0.77 per share, representing an 11.2% annualized distribution yield [18] - The company realized a gain of over $7 million from an equity investment in Frontline, contributing positively to NAV [19] - The company has a diverse liability profile, with 38% of drawn debt in unsecured bonds that have a weighted average fixed coupon of less than 3% [27] Q&A Session Summary Question: Dividend coverage and spillover policy - Management discussed the potential impact of falling rates on earnings and the strategies to manage dividend coverage, including turnover in the portfolio and lowering expenses [36][39] Question: Refinance of a large asset - Management indicated that a large asset was refinanced through a securitization, limiting their ability to retain it, but they aim to hold onto good assets [43][45] Question: Leverage in the portfolio - Management acknowledged the presence of excess cash and indicated a cautious approach to deploying capital in the current environment, focusing on high-quality assets [48][50] Question: Strategy on credit evaluation - Management confirmed that their underwriting standards remain unchanged, focusing on sectors less impacted by economic weakness, such as software and healthcare [80][81] Question: Commonality among larger repayments - Management noted that repayments were from a small number of companies, with some being refinanced in the securitization markets, and they expect muted repayment volumes in the current quarter [84][86] Question: Growth outlook and ATM program - Management indicated that ATM issuance would be tied to originations and would be emphasized as market activity picks up [89][91]

Financial Data and Key Metrics Changes - Adjusted net investment income (NII) per share was $0.39, corresponding to a return on equity of 10.4% [6] - Adjusted net income per share was $0.30, with a return on equity of 8%, including $0.09 per share of adjusted net realized and unrealized losses [6][20] - Net asset value (NAV) per share decreased by $0.09 to $15.04, primarily due to net unrealized and realized losses [20][24] - Debt to equity ratio remained stable at 1.16 times, with average net leverage at 1.17 times, within the targeted range [20][32] Business Line Data and Key Metrics Changes - Gross originations for the quarter were $298.9 million, with $159.5 million funded at close, reflecting a conservative approach to new investments [13] - The investment income yield was robust at 10.8%, despite a sequential decline of about 40 basis points [12][28] - The weighted average spread on new originations increased by 30 basis points compared to previous quarters [15][24] Market Data and Key Metrics Changes - The company experienced a challenging macro environment characterized by policy uncertainty and decreased consumer confidence [5][8] - The portfolio remains highly diversified, with 90% of investments in the highest performing internal rating categories [11][25] - Nonaccrual investments increased slightly to 70 basis points of total investments at fair value, with nine total nonaccrual investments [16][29] Company Strategy and Development Direction - The investment strategy focuses on providing first lien senior secured loans to resilient middle market companies backed by strong private equity sponsors [3][36] - The company aims to navigate uncertainty by selectively looking for new loans and focusing on early detection and intervention for underperforming borrowers [8][39] - The management emphasizes the importance of maintaining a resilient strategy and preparing for multiple economic scenarios [35][36] Management's Comments on Operating Environment and Future Outlook - Management noted that previous macroeconomic predictions have often proven incorrect, emphasizing the need for resilience and adaptability [34][35] - The company believes its portfolio is relatively insulated from direct impacts of tariffs and trade-related issues due to the nature of its borrowers [36][37] - Management is actively monitoring the portfolio for tariff-related risks and engaging with sponsors to mitigate potential vulnerabilities [38][39] Other Important Information - Total distributions paid in the quarter were $0.39 per share, representing an annualized dividend yield of 10.3% based on NAV [19] - The company has a strong liquidity position with approximately $1.2 billion available from unrestricted cash and undrawn commitments [32] Q&A Session Summary Question: How should we think about the base payout going forward? - Management acknowledged the challenges of spread and base rate compression but expressed confidence in potential near-term levers to support the dividend [42][44] Question: Are repayments trending low, and what is the focus on defending names? - Management noted a significant deceleration in deal activity and emphasized a cautious approach to new investments while defending existing credits [50][51] Question: What is the status of the portfolio at risk for tariffs? - Management identified a small portion of the portfolio with potential exposure to tariffs but believes the impact will be manageable [55][66] Question: How is refinancing activity affecting the portfolio? - Management observed a shift from a borrower-friendly to a lender-friendly market, reducing concerns about significant refinancing activity in the near term [68][69] Question: Is there any noticeable trend in lender scale during recent market volatility? - Management indicated that the current environment plays to their strengths, with sponsors showing a preference for working with established lenders [70]

Financial Data and Key Metrics Changes - The fourth quarter net investment income (NII) was $0.47 per share, with a full year NII totaling $1.89 per share [6][24] - The return on equity (ROE) for the quarter was 12.4%, marking the eighth consecutive quarter of double-digit ROE, while the full year ROE was 12.2% [7] - The net asset value (NAV) per share at quarter end was $15.26, approximately in line with the prior quarter [7][24] - Record dividends paid out in 2024 totaled $1.72 per share, reflecting a nearly 10% year-over-year increase [8] Business Line Data and Key Metrics Changes - In 2024, the company originated a record $27 billion in direct investments, doubling from 2023 [16] - In the fourth quarter, approximately $1.2 billion in new investment commitments were deployed, with over 97% consisting of first lien investments [17][18] - First lien investments increased from 68% to 76% of the portfolio, and combined with OBDE's portfolio, first lien investments rose to 78% [18] Market Data and Key Metrics Changes - The average hold size on new direct lending deals grew from $200 million in 2021 to roughly $350 million in 2024, while total deal sizes nearly doubled from $600 million to over $1 billion [13] - The non-accrual rate remained low at 40 basis points of the portfolio at fair value, decreasing to 30 basis points when combined with OBDE's portfolio [21] Company Strategy and Development Direction - The merger with OBDE positioned the company as the second largest publicly traded BDC by total assets, enhancing trading liquidity and operational synergies [14] - The company aims to optimize its portfolio and asset mix for improved yield, potentially increasing investments in strategic equity and joint ventures [33] - The strategic focus includes expanding into alternative and investment-grade credit, as well as data centers, to augment the origination funnel [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the portfolio despite economic pressures, noting solid underlying financial performance from borrowers [20][78] - The expectation for 2025 includes potential synergies from the merger and a focus on optimizing the combined portfolio for better returns [31][33] - Management indicated that while headwinds from lower rates and spreads may persist, the company is well-positioned to capitalize on opportunities regardless of M&A activity [31] Other Important Information - The company reported total portfolio investments exceeding $17 billion and total net assets nearing $8 billion following the merger [24] - The company established a joint venture across all BDCs to create a more efficient investment structure [29] Q&A Session Summary Question: What can OBDC deliver in terms of ROEs in 2025 and beyond? - Management indicated that ROE could be in the low 10s due to headwinds from lower rates and spreads, but potential synergies from the merger could add 50 to 75 basis points to ROE [36][39][40] Question: Where is the portfolio in terms of recognizing Fed rate cuts? - The portfolio is about 70% through recognizing the resets from Fed rate cuts [54] Question: What proportion of the portfolio is still above legacy assets with higher spreads? - Approximately 10% to 15% of the portfolio could still be at risk of opportunistic refinancing at lower spreads [63][64] Question: Will there be significant new portfolio company creations in 2025? - No immediate plans for new portfolio company creations, but the company remains open to opportunities that align with its investment strategy [69] Question: How is the ATM program expected to be utilized? - The ATM program will be used to issue above book value, ensuring it is accretive and not dilutive [99] Question: What was the nature of the multi-billion dollar deals closed during the quarter? - The deals included public-to-private transactions and were new borrowers, not refinancings [100][101]