Blackstone Secured Lending Fund Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2024

There are 11 speakers on the call.

Operator

Good day, and welcome to the Blackstone Secured Lending Second Quarter 2024 Investor Call. Today's conference is being recorded. At this time, all participants are in a listen only mode. At this time, I'd like to turn the conference over to Stacy Wong, Head of Stakeholder Relations. Please go ahead.

Speaker 1

Thank you, Jennifer. Good morning, and welcome to Blackstone Secure Lending Fund's 2nd quarter conference call. Joining me today are Brad Marshall and Jonathan Bach, Co Chief Executive Officers Carlos Whitaker, President and Teddy Deloge, Chief Financial Officer. Earlier this morning, we issued a press release and slide presentation of our results and filed our 10 Q, both of which are available on the Shareholders section of our website, www.bxsl.com. We will be referring to that presentation throughout today's call.

Speaker 1

I'd like to remind you that today's call may include forward looking statements, which are uncertain and outside of the firm's control and may differ materially from actual results. We do not undertake any duty to update these statements. For some of the risks that could affect results, please see the Risk Factors section of our most recent Annual Report on Form 10 ks. This audiocaps is copyright material of Blackstone and may not be duplicated without consent. With that, I'd like to turn the call over to Brad Marshall.

Speaker 2

Thank you, Stacy, and good morning, everyone. Thanks for joining our call this morning. Turning to the agenda, I'll start with some high level thoughts before turning over to John, Carlos and Teddy to go into details of our portfolio and second quarter results. Turning to Slide 4 of the presentation. In my view, these results reflect the strength of our platform, leveraging the advantages of Blackstone's scale across our $1,100,000,000,000 ecosystem and putting it to work for our investors.

Speaker 2

We're pleased that BXSL reported the best quarter of earnings on a dollar basis and the highest net asset value per share since our IPO, as well as increases in net investment income per share and net income per share compared to last quarter. Our NII of $0.89 per share representing a 13.2% annualized return on equity is up from $0.87 per share in the prior quarter and net income of $1.01 per share is up from $0.96 per share in the prior quarter. Further, net asset value per share increased by $0.32 or 1.2 percent to $27.19 from $26.87 per share last quarter. Our dividend of $0.70 per share is well covered at 116% and represents an 11.3% annualized dividend yield, one of the highest among our traded BDC peers with as much of their portfolio invested in 1st lien senior secured assets with BXSL at 98.6%. Return drivers remain strong.

Speaker 2

As of quarter end, BXSL had an 11.6% weighted average yield on debt investments with less than 0.3% investment on non accrual at cost. And we were able to amend our corporate revolver post quarter end leveraging the tighter market environment as you will hear later from Teddy. Moving to Slide 5. The second quarter was our most active quarter for originations for both committed and funded investments since 2021. With $1,300,000,000 in new commitments and $891,000,000 in fundings, this also marks the 3rd consecutive quarter of over $1,000,000,000 in commitments.

Speaker 2

As a result of our broad coverage model and Blackstone's global reach, we get to see a broad range of deals that come to market, large, medium, small and we seek to offer investors exposure to what we believe are compelling risk adjusted opportunities at any given point in time. This quarter, we funded more middle market companies compared to recent quarters. And what we believe were high quality transactions at lower LTVs and attractive spreads. Overall, our new fundings into new portfolio companies for the quarter were nearly 100 percent 1st lien senior secured debt with an average weighted average spread of approximately 5 24 basis points, an average OID of 1.3% and nearly 1.5 years of call protection and an average LTM EBITDA of $119,000,000 Importantly, these assets had an average LTV of 37.9 percent, well below that of the portfolio in prior years. So while we have seen some spread compression in the private markets, these new deals funded in the quarter had a greater spread to LTV ratio or what we would call spread per unit of risk.

Speaker 2

And while we have a large team focused on our assets, we also strive to minimize the company's expenses. We start with a lower headline for our fee structure compared to the average of our traded BDC peer set, which we believe investors recognize. We then further aim to minimize other expenses and the cost of our liabilities. Teddy will talk about our liabilities a bit later, but since quarter end, we negotiated lowering the spread of our nearly $2,100,000,000 revolving credit facility to the lowest among our traded BDC peers. At the same time, we further diversified our lender base by adding additional banks to our revolver group with now over 15 participants.

Speaker 2

Finally, with recent market volatility, we believe private capital solutions will remain attractive to scale borrowers given certainty of execution by private lenders. I'm very pleased with this quarter's progress in every regard. We had robust origination at what we view overall as attractive spread per unit of risk. We continue to see strong earnings as measured by income and NAV and we have repriced our cost of our capital after quarter end to position VXSL to operate in an environment where rates are likely to come in. For us, it's about seeking to maximize results in every area of BXSL for the benefit of our shareholders.

Speaker 2

With that, I will pass over to my colleague, Jonathan.

Speaker 3

Thank you, Brad. And let's jump to Slide 6. We ended the quarter with 11 point of investments, over an 8% increase from the $10,400,000,000 in Q1 across 231 portfolio companies. This resulted in an increase in ending leverage to 1.13 times and an average leverage of 1.09 times given the timing of some of our investment fundings, moving up to the middle of our target range of 1 to 1.25 times debt to equity. We maintain our strong liquidity position at $1,200,000,000 and that's comprised of cash available borrowing capacity across our revolving credit facilities, and that's including ABLs to lean into that expanded pipeline.

Speaker 3

Now our weighted average yield on debt investments at fair value held steady at 11.6% this quarter compared to 11.8% last quarter. The yields on new debt investment fundings and assets sold and repaid during quarter averaged 10.9% and 11.7% respectively. And let's take a look at the portfolio and turn to Slide 7. Approximately 99% of BXSL Investments are in 1st lien senior secured loans and 99% of those loans are the companies owned by financial sponsors who generally have significant equity value in these capital structures demonstrated by an average loan to value of 47.4%. That's worth noting the average single sponsor concentration in our portfolio is approximately 1% of fair value.

Speaker 3

Now our portfolio also has what we believe is a strong LTM EBITDA base that's averaging $206,000,000 and it's a 13% increase from last year. This is more than 2 times larger than the private credit market, where we also see continued strength and performance from larger companies, the bedrock of our portfolio relative to their smaller EBITDA counterparts on both growth and default. But however, Brad mentioned this, we continue to see a broad range of deals as we invested more this past quarter across the EBITDA spectrum with that $119,000,000 weighted average LTM EBITDA. Now BXSL's portfolio companies have seen growth rates in line with the broader private credit market as measured by the Lincoln International Private Markets Database and over 15% more profitability on an LTM EBITDA margin basis. Now since BXSL's inception, we believe we've been disciplined in building our portfolio to focus on 1st lien senior secured debt and do so in lower default rate industries as we believe that's a defensive place for investors, especially in an elevated or uncertain interest rate environment.

Speaker 3

Now despite a slight uptick this quarter, non accruals were at 0.3% at cost and they remain minimal compared to our traded BDC peer average of nearly 3% and that's compared to last quarter. Now we continue to emphasize the importance of interest coverage. The LTM EBITDA coverage based on average LTM EBITDA for BXSL portfolio companies over the last 12 months was 1.7 times in the second quarter, which again compares favorably to the Lincoln database for the broader private credit market at 1.4 times average coverage in the second quarter. Now looking at the share of those private credit portfolio of our private credit portfolio below 1 times interest coverage excluding recurring revenue loans, BXSL is at 5% of fair value versus the Lincoln Private Credit Market Index being over 3x larger at nearly 18. And we've seen some increase in this figure for BXSL quarter over quarter and that's because growth has slowed for some portfolio companies and additional companies' interest coverage has come in just below one times.

Speaker 3

However, interest coverage is only one screen that we use to identify credits with which to be proactive. Our interest coverage analysis helps us to identify companies that we believe could benefit from, for instance, an early discussion with the sponsor or an introduction to the operations focused professionals on our BXCI value creation team. And so when we think about stress in our portfolio, instead in our view better represented by those assets that are marked below 80, which constitute less than 1% of the book at cost. Now looking now at how we're growing the portfolio and designing it top down, Slide 8 focuses on our industry exposure. And as I mentioned earlier, in the Q2, the number of portfolio companies in BXSL increased to 231, while we maintained nearly 90% of our exposure to historically lower default rate industries.

Speaker 3

And this is similarly reflected in our investment activity this quarter, as Brad mentioned, with 70% of our new funded portfolio companies being in historically lower default rate industries such as software, healthcare providers and services, etcetera. Now I'll conclude with a point on amendment activity. Amendment activity continues to be relatively benign as performance of the portfolio remains strong. In the Q2 amendments affected roughly 65 private borrowers, over 95% of which were associated with add ons, M and A, DDTL extension and immaterial technical matters on changes to terms. Now 3 issuers that saw amendments related to the portfolio, we had occurred with 3 portfolio companies, all of which were marked below 80 and in total represent less than 80 basis points of the portfolio at cost.

Speaker 3

And with that, I'd like to turn over to my colleague, Carlos.

Speaker 4

Thanks, Shavon. Turning to Slide 9. PXSL maintained its dividend distribution of $0.77 per share. As you can see, we have continued to focus on delivering yield to shareholders, building a level of confidence through steady regular dividends, while also growing NAV per share. We expect this approach to continue as we believe we are heading into a heightened period for deal activity.

Speaker 4

For instance, helping to meet this quarter's portfolio growth, we issued $190,000,000

Speaker 5

of additional

Speaker 4

equity under our ATM or at the market program this quarter at a premium to NAV. And we raised a $400,000,000 bond that was swapped to sulfur +138, which we observed was well inside the price of new secured debt capacity. As we often discuss, after we make investments, we aim to add value by driving operational improvements and revenue generating opportunities for our portfolio companies. We have outlined our BXCI value creation program on prior calls And we believe a partnership with BXCI is valued by private equity sponsors. And with increased competition in the private credit market, we seek to distinguish ourselves by providing more than just capital to our portfolio companies.

Speaker 4

For instance, Park Place, a name we have discussed in the past, won 2 new clients through our BX preferred program in the 2nd quarter, resulting in the borrower increasing its annual recurring revenue by $1,100,000 We also continue to work with Park Place's business development team on additional opportunities with Blackstone Invested Companies that have meaningful spend on data centers. As a reminder, BXSL borrowers are offered full access to BXCI's value creation program, which provides borrowers with revenue generating opportunities, cost savings procurement and capabilities including cybersecurity and data science, all at no additional cost because we understand the potential benefit to both BXSL's investment portfolio and shareholder returns. And with that, I'll turn

Speaker 6

it over to Teddy. Thanks Carlos. I'll start with our operating results on Slide 10. In the Q2, BXSL's net investment income was $173,000,000 or $0.89 per share. DXSL recorded its highly quarterly GAAP net income on a dollar basis and tied its highly quarterly earnings per share since IPO at $196,000,000 and $1.01 per share respectively, up 12% from a year ago.

Speaker 6

Total investment income for the quarter was up $37,000,000 or 11% year over year driven by increased interest income on primarily due to higher interest rates. As a reminder, we amortize 100 percent of OID earned over the life of each loan versus taking fees upfront, which we believe leads to greater stability over the long term. Interest income excluding PIK fees and dividends represented nearly 93% of our total investment income in the quarter. Turning to our balance sheet on Slide 11, we ended the quarter with $11,300,000,000 of total portfolio investments at fair value, dollars 6,100,000,000 of outstanding debt and $5,400,000,000 of total net assets. NAV per share increased to $27.19 up 1.2%, up from $26.87 last quarter, driven by excess earnings, stable portfolio fundamentals and share issuance above NAV.

Speaker 6

This represents the 7th consecutive quarter of NAV per share growth. Moving to Slide 12, in addition, we saw the 5th consecutive quarter of commitment growth as Brad outlined with BXSL committing to approximately 1 point $3,000,000,000 in the quarter, funding nearly $900,000,000 and an estimated additional $261,000,000 committed by BXCI and earmarked for BXSL as of June 30. Net funded investment activity in the quarter was $800,000,000 up over 50% sequentially over the Q1. Further, despite the spread tightening cycle across fixed income markets so far this year and an increase in broadly syndicated activity, we continue to experience muted repayment activity as Brad outlined. In the Q2, we saw 89,000,000 dollars of repayments or 3% annualized repayment rate, bringing our year to date repayment rate to 4%, which compares to 10% for all of 2023.

Speaker 6

In fact, we did not have any exposure refinanced out by the syndicated market in the 2nd quarter. It is all worth noting that in the declining rate environment, one may naturally expect an increase in portfolio turnover, but our portfolio had few realizations in the quarter. Next, Slide 13 outlines what we believe to be an attractive and diverse liability profile, which includes 46% of drawn debt in unsecured fixed bonds that are not swapped. Our unsecured fixed rate bonds have a weighted average fixed coupon of just under 3%, which we view as a key advantage in this elevated rate environment and contributed to an overall weighted average interest rate on our borrowings of 5.26%. This compares to a weighted average yield at fair value on our debt investments of 11.6%.

Speaker 6

As a reminder, we have a 16 person team within our CIO office that focuses on our liabilities and has access to diverse financing sources. As spreads have tightened across secured and unsecured markets, our team has been focused on driving down financing costs and further improving our balance sheet. To that end, on the heels of a full notch upgrade by Fitch to BBB Flat in the Q1, we issued a new $400,000,000 3.5 year bond in the second quarter, which priced at 140 basis points over treasuries and swapped to 138 basis points over SOFR. In addition, post Q2, we upsized our corporate revolver by $300,000,000 and simultaneously dropped the drawn spread by 22.5 basis points to 152.5 basis points, while bringing in our unused fee rate as well. We have no maturities on our funded liabilities until 2026 and our debt and funded facilities have an overall weighted average maturity of 2.9 years.

Speaker 6

We continue to explore means of further optimizing our cost of capital. Total liquidity at quarter end was $1,200,000,000 in cash and undrawn debt available to borrow and ending leverage as of June 30 was 1.13 turns, up sequentially from 1.03 turns in the Q1, near the midpoint of our target range of 1 to 1.25 times. We have positioned our balance sheet with significant excess capacity to support continued pipeline momentum we see through year end as rates may begin to fall. In closing, we are moving forward from what we believe is a position of strength with underlying earnings power, credit performance and liabilities that distinguish us in the market, we will strive to remain laser focused on delivering returns and protecting investors' capital. With that, I'll ask the operator to open it up for questions.

Speaker 6

Thank you.

Operator

Thank We'll go first to Finian O'Shea with Wells Fargo Securities.

Speaker 7

Hey, everyone. Good morning. So first question in the wake of the Pluralsight restructuring for a lot of BDCs. I know you're not in there, but we're trying to get a picture of issuers or portfolio companies that would be below interest coverage, but where you have the sponsor putting in money. So is that would that be included in your below 1 interest coverage provided metric or otherwise?

Speaker 7

How prevalent is that set up in the portfolio?

Speaker 2

Hey, Fin, it's Brad. So, I'll just give a high level comment. Teddy can give the statistics on the portfolio. So Pluralsight, you're right, we're not in it. So we're not super close to that asset.

Speaker 2

I will make the comment though on the positive, which is the handover of Pluralsight to its lenders was actually quite orderly, which is one of the advantages of private credit. This was in the public markets. I think it would have languished, would have been stuck in bankruptcy. So it was nice to see kind of the private markets working fairly well. In terms of kind of overall credit and coverage, maybe Teddy, you can hit on the kind of what's kind of captured in our statistics.

Speaker 2

Yes.

Speaker 6

I think your question has been directly is a percentage of exposure below one times coverage and then specifically what we're seeing in terms of equity investments. Bakken went through it, but we had 65 amendments, 95% benign or positive. We had 3 issuers that had material amendments. Those 3 represented less than 1% of the overall portfolio. Generally speaking, in situations that are underperforming, that is our first response is to work consensually with the company to see equity come into the structure.

Speaker 6

I can't speak specifically to those 3 companies, but it is something that we do ask in those types of situations.

Speaker 7

Okay. That's helpful. Thanks. And as a follow-up with the WHCG, it looks like you're joining the partial accrual movement. Can you talk about your policy there and if this will be commonplace going forward?

Speaker 6

Yes, I'm happy to start. Again, can't speak to that situation specifically. Generally speaking, Fin, I think as you've probably noticed historically, we haven't put assets on partial nonaccrual unless there's a very clear potential restructuring that reflects that in facts. More to come on that situation in the next quarter.

Speaker 3

I'd also say if you're going to make kind of the reference of how we think about both non accruals, etcetera, Fin. If you start to see assets that have traded clearly below 80 or in some discounted mark territory, you can see that as an indicator of stress and we outline it. Maybe perhaps what you don't see here is an asset that is marked close to par that goes on non accrual the next quarter. So I'd say that you'll see the page turn, but also in terms of that movement, you kind of have to reflect that if we have operating knowledge to have that mark and see where that mark is post restructuring that could give you some indication of how we think about non accruals.

Speaker 2

So just to put those two comments together, Fin. So equity, we'll always try and negotiate equity to come into the businesses, I think, in most of our restructurings that has happened. Secondly, marks, you'll see a steady decline and that's probably what analysts and investors should focus on is kind of what marks are, as John said, below 80 because that indicates that there's real headwinds in the business and those will improve or get worse between quarters. And but what's most important is we are it's an asset is in that zip code. We are absolutely in front of the sponsor asking for equity.

Speaker 2

We have a CIO team of 80 people, which I think is bigger than most investment platforms and all they do is spend time on making sure that we can improve the value of our investment, whether it's through the value added program, which Carlos went through or by being early and proactive in any sort of restructuring. Thanks everybody.

Operator

We'll go next to Todd with Raymond James.

Speaker 8

Hi guys. Hopefully you can hear. First, on the size that you did do, you mentioned you live more middle market company for smaller companies. $100,000,000 in EBITDA didn't used to be middle market or anything. But can you give us any color on when you're looking at a smaller company like that, what industries are you more focused on doing there?

Speaker 8

Because you've talked about bigger is better on size, but also neighborhoods matter, which industries, etcetera. So can you give us color on like what industry would you do for say a $250,000,000 EBITDA company, but you wouldn't do for 100,000,000 dollars EBITDA company. Any color on like how that shifts by size in industry appeal?

Speaker 2

Yes. Thanks, Robert. It's Brad. I'll take that one. And again, it's not just sector, but obviously it's capital structure.

Speaker 2

When we're looking at any deal, it is looking at the senior part of the capital structure, as you're aware. We're looking at the quality of the business, which is we've historically highlighted that larger companies tend to be better businesses. And then of course we're looking at you're pointing out which sectors, which neighborhoods and we're going maybe a layer deeper than that. We're trying to be in the best blocks and in the best neighborhoods. And so

Speaker 3

I would

Speaker 2

say in looking at these $100,000,000 type EBITDA businesses, they're going to be in 3 primary sectors where we have our sector teams built out technology and software, healthcare and life science and business services. And in those areas, we characterize those neighborhoods as being historically low default sectors. They're good cash flow generators. They tend to grow, outgrow the economy, which in this environment is quite important. So that's what I would say about kind of where we're investing.

Speaker 2

And I wouldn't say they're small. I would say the upper end of the middle market. And then on my last point around capital structure, as we said in our prepared remarks, the investments we made in the quarter were at 37.9 percent loan to value. So the risk profile that where we're setting these companies up is quite low relative to where we've invested in some of these larger businesses, which has been more in the mid-40s.

Speaker 8

Got it. Thank you. Follow-up, Pluralsight already came up. Fin brought it up. You're not involved.

Speaker 8

It was originated in the Q2 of '21 and you guys were $7,000,000,000 at AUM back then and 'twenty one was a really active year. So to assume, and we know what assuming means, that you had the opportunity to participate in Pluralsight. So can you correct me if I'm wrong? Did you not see the deal? Or did you see the deal and decline to participate?

Speaker 8

And if you did decline, any recollection of what the reason was back then? It wasn't that long ago.

Speaker 2

Yes. Well, we've seen it twice actually, and we passed both times based on just our own view of the credit was maybe different than others. One of the nice things about our platform is we have 900 technologists across kind of the Blackstone platform that we can kind of tap into and get very good insights into these technology businesses and we do that in every single deal that we're invested in as well as we use the 50 data scientists that are part of the platform as well. So and this will happen in many instances where we just take a different view than the market. I'd rather not get into the specific reasons and why we passed on it, but nonetheless we did see it twice in past both times.

Speaker 2

Got it. Thank you.

Operator

And at this time, we will go next to Paul Johnson, KBW.

Speaker 9

Yes, good morning. Thanks for taking my questions here. Just wanted to squeeze in. I just wanted to know about a specific credit in the portfolio and just kind of get your thoughts on performance, but maybe a little bit of an explanation of what the company is. Snoopy BIDCO, large loan in the portfolio, I believe it's on full pick at this point, but, seems to be marked fairly well.

Speaker 9

Just wondering to get some ideas on how that company is performing and that's all?

Speaker 2

Yes. So, unfortunately, the private company, so we can't say much about the business. The business is a vet care business. We can talk about the mark, which is around 97 in a quarter across the securities, which would reflect that it's performing in line with expectations. I think when we did the deal, we were through the senior debt, which were that's our investment, we were through 32% loan to value.

Speaker 2

So a lot of equity kind of beneath us the sponsors continue to kind of support that business and it's generally performing fine.

Speaker 9

Got it. And would you say is that the majority of the PIK income in the portfolio or are there other

Speaker 6

Yes. I'm happy to take that. No real change quarter over quarter in terms of PIK income It represents 7% of income. 80% of our pick is from the top 5 assets similar to last quarter. Those, as Brad said, are all performing all marked above 97 and there were no new pick amendments in the quarter.

Speaker 9

Got it. Appreciate it and congrats on a good quarter. Thanks guys.

Speaker 8

Thanks, Paul.

Operator

We'll go next to Mark Hughes with Truist.

Speaker 10

Yes. Thank you. Good morning. Sorry if I missed this, I joined late, but the repayments were pretty low this quarter. Is that just an idiosyncratic quarter?

Speaker 10

Or is there some broader theme, something about your portfolio? And kind of do you have any expectations you can share regarding how you expect that to play out?

Speaker 6

Yes, I'm happy to take that. You're right, annualized repayment rate was 3%, I think lower than we would expect in sort of a normalized M and A environment. I think a couple of things driving that. Number 1, M and A volumes overall have well have increased are still relatively muted. So we've been driving deployment really through incumbency around half of what we're deploying are into assets where we do have incumbency.

Speaker 6

I think it is possible that we see repayments pick up over time as M and A picks up and as rates come down. But for now, you're right, they've remained relatively low.

Speaker 3

Mark, I'd just add that's also a function of an item we mentioned last quarter, which is a proactive view on effective defense. So here in the quarter, we had re pricing activity where what we have is a company that's effectively coming close to moving off call protection and you have the ability to work with a company that you know and do so at a market price that's well above your current cost of capital and end up earning or extending the life of that loan and its current benefit to ROE. So if you look across the board, give or take, our focus there in those active defense is also what will keep assets on the books for longer, allowing us to grow accretively as we also issue equity and low cost debt.

Speaker 10

Is that process becoming a little more competitive, the repricing? Is there more negotiation around spreads as others maybe as the company is maybe checking the current market dynamic?

Speaker 3

It's all a market dynamic, right? And it's clearly in an environment where you have a good amount of capital looking at a finite amount of deals that's simply a market phenomenon. Overall, it's around if you look at some of the repricing scores about 70 ish basis points of, we'll call it, tightening, if you will, which is in line with where we've started to see kind of market trends move overall. But I'd say, clear to my colleagues here, but it does find itself kind of just natural as it relates to where the broadly syndicated loan market is today. And that perhaps can change with current volatility.

Speaker 2

Mark, we have call protection in these deals, so it gives us a lot of leverage. And certainly as repayments as the market gets more active, you'll probably see more repayments and that will either give us the opportunity to stay with the credit or take our call protection and accelerated fee income, to help drive earnings. So for us, it's a little bit of a win win. Investors either in a more active environment will get more fee income or we get to kind of hold on to our better assets at market spreads.

Speaker 10

Understood. Thank you.

Operator

We'll go next to Kenneth Lee with RBC Capital Markets.

Speaker 5

Hey, good morning. Thanks for taking my question. And I just been jumping around from call to call, so I apologize if this was covered already. But could you go over some of the key drivers for the unrealized gains that were reported in the quarter? Thanks.

Speaker 6

Yes, I'm happy to take that. We did have unrealized gains of $23,000,000 in the quarter. I wouldn't there are a few markups and a couple of markdowns. I wouldn't necessarily say there's anything notable. We did see spreads come in a little bit in the quarter, which helped drive marks overall, given what we're seeing in the markup in the market, but nothing really to call out here.

Speaker 5

Got you. And then one follow-up, if I may. In terms of recent deal activity, you talked about some of the spreads that you're seeing. But just wondering in terms of terms and documentation, what are you seeing in terms of some of the more recent activity, any timing or changes there? Thanks.

Speaker 2

Yes, I would say no specific trends. There's I would say on the back of Cloralsight, the provision in the document that allowed the sponsor to move around kind of assets, that's actually been tightened up. So lenders have pointed to that as a weakness in documents and for new deals have tightened up that loophole. I would say in the middle market documents tend to be a little bit tighter than the large end of the market, which competes with the syndicated market. And so for us during the quarter, documents are actually pretty good.

Speaker 2

But anytime you see a very active liquid market, you tend to see some provisions get tested in the market and you saw some of that earlier on in the quarter. Now the liquid markets are showing a little bit of volatility right now. So that is kind of that's changing a little bit right now, but we'll see how it develops over the course of the year.

Speaker 5

Got you. Very helpful there. Thanks again.

Speaker 2

Thanks, Ken.

Operator

And at this time, I'll turn the call back to Stacy Wang for closing comments.

Speaker 1

Thank you everyone for joining our call today. We look forward to speak to you next quarter. Thanks everyone.

Powered by Quartr
Earnings Conference Call
Blackstone Secured Lending Fund Q2 2024
00:00 / 00:00