Blackstone Secured Lending Fund (BXSL) | BDC Stock Breakdown

0:00College football is back. So, Hilton called to me the superstition concierge to make your fan rituals a reality. Need a room to match your lucky number? We got you. Want to make sure our team doesn't wash your lucky jersey? Oh, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching bandwick up call it 555 and 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for this day. Welcome to BDC Stock Breakdown, the show where we examine individual business development companies, evaluate their dividends, portfolios, risks, and valuations, and then we give each stock a final rating out of 10. Today we're covering Blackstone Secured Lending Fund, ticker symbol BXSL. Once again, B is in Bravo, X is in X-ray, S is in Sierra, L is in Lima.

1:01BXSL is one of the largest publicly traded business development companies. It is externally managed by Blackstone private credit strategies and affiliate of Blackstone, which managed more than $1.3 trillion in assets as of March 31st, 2026. That relationship gives BXSL access to Blackstones enormous lending platform, institutional relationships, and private market deal flow. BXSL primarily lends money to private companies that may not have easy access to traditional public debt markets. In exchange, BXSL collects interest and distributes most of its taxable income to shareholders. What immediately separates BXSL for many other BDCs is the structure of its portfolio. At the end of the first quarter of 2026, BXSL had approximately

2:01$13.9 billion of investments spread across 316 portfolio companies. Approximately 97.6% of its investments were first lean senior secure debt, while 95.8% of the portfolio consisted of floating rate debt investments. Firstly, loans generally sit near the top of a borrower's capital structure that does not eliminate the possibility of losses, but it can provide BXSL with better recovery prospects of a portfolio company experience as financial trouble. BXSL also reported an average loan to value ratio of approximately 51.7%. In simple terms, Blackstone estimates that the underlying businesses are worth considerably more than the debt BXSL has extended to them. However, investors should remember that the value

3:01of private companies are estimates and can fall during periods of economic stress. The portfolio is diversified by borrower, with no single company representing more than 3% of total investments. However, sector concentration deserves attention. Software represented approximately 21% of the portfolio followed by professional services and health care providers at 10% each, insurance at 9% in commercial services and supplies at 8%. Software exposure has become a more important risk because artificial intelligence could disrupt certain established software business models. BXSL's medallia investment has been one of the portfolios more visible problem loans. And Blackstone has been working on a restructuring intended to reduce the company's debt in fund additional investment

4:04in artificial intelligence features, which is good, by the way. Let's examine the dividend. BXSL currently pays a regular quarterly dividend of 77 cents per share or $3.8 annually. The company has maintained that 77 cent regular dividend since the third quarter of 2023. And it declared another 77 cent dividend for the second quarter of 2026. Using BXSL's July 10th, 2026 share price of approximately $23.44, that annual dividend produces a yield of roughly 13.1%. And that is an extremely attractive level of income. Although a yield this high also tells us that the market is pricing in meaningful credit in earnings risks, dividend coverage is one of the biggest areas to monitor. BXSL generated first quarter net investment income of 77 cents per share, exactly matching it 77 cent dividend.

5:07That means dividend coverage was 100%. The dividend was covered, but there was no meaningful cushion during the quarter. For a comparison, that investment income was 80 cents per share during the previous quarter, in 83 cents during the first quarter of 2025. The weighted average yield on performing investments also declined from 9.6% to 9.3% during the quarter. This is important because most of BXSL's loans carry floating interest rates. Floating rate loans helped generate exceptional income when interest rates were elevated. But as benchmark rates decline, the interest income earned from those loans can fall as well. The next major issue is credit quality. Investments on non-accurral increase to 3.1% of the portfolio at fair value,

6:07or 4.7% at ammarized cost. Non-accurral means BXSL is no longer recognizing normal interest income from those investments because collection has become uncertain. That is not disastrous for a diversified portfolio, but it is a noticeable deterioration from BXSL's historically low non-accurral levels. Investors should watch whether problem investments stabilize or continue growing. Net asset value also moved in the wrong direction. Nav declined from 26.92 per share, $26.92 per share at the end of 2025 to $26.26 at the end of the first quarter. A decrease of approximately 2.5% BXSL recorded about $155 million of net unrealized appreciation during the quarter.

7:09The positive side of that decline is valuation. At a share price near $23.44, compared with a reported nav of $26.26, BXSL trades at approximately an 11% discount to net asset value. That discount provides investors with a margin of safety, assuming the underlying portfolio does not experience another major decline, BXSL's balance sheet is moderately leveraged, debt to equity stood at 1.32 times at the end of the quarter. And the company reported approximately $2.3 billion of liquidity through unrestricted cash and available borrowing capacity. Its total cost of debt was approximately 4.9%. What is the final verdict? The strengths are pretty clear. BXSL has the Blackstone platform behind it, a large and diversified portfolio, substantial first-lean exposure,

8:10and an attractive dividend and a share price below, its most recently reported nav. The weaknesses are also becoming more noticeable. Dividing coverage is narrowed to exactly 100%. Net investment income is declining, non-accurals have increased, nav fell during the first quarter and software represents more than one-fifth of the portfolio. Taking everything into consideration, I give Blackstone Secured Lending Fund an 8.1 out of 10. BXSL remains one of the stronger large BDCs, and its discount in double-digit dividend yield make the valuation compelling. However, I would not treat the dividend as risk-free. I would closely monitor non-accurals, software exposure, nav movement, and dividend coverage over the next several quarters. College football is back, so Hilton called on me the superstition concierge

9:13to make your fan rituals a reality. Need a room to match your lucky number? We got you, wanna make sure our team doesn't wash your lucky jersey? Oh, that smells lucky. Hilton's unmatched hospitality can keep up with any superstition. Even a marching bandwick up call it 555 and 55 seconds. Hit it! When you need a team that will do whatever it takes on game day, it matters where you stay. Hilton, for this day. This episode is brought to you by PayPal. You know how a mom's bag has everything? Sunscreen, snacks, a stapler, the new PayPal app is like that, but for your money. Shop, pay, manager account, and earn rewards all in one place. And with purchase protection on eligible items, biometric security, and pass keys, you're protected at every step. Download the new PayPal app to get started. See PayPal.com slash protection terms. This stock may be most appropriate as one position

10:15within a diversified collection of BDCs rather than as an investor's only private credit holding. Besides, I'm never, I'm not really a one BDC kind of guy. I have all sorts of BDCs in my portfolio. I'm a one woman man, but when it comes to BDCs, man, when it comes to BDCs, I'm playing polygamy here, all right? It's a stupid joke anyway. And not to be confused with the other BDCs. I don't know. I can't think properly. But anyway, this stock, I just wanna say this, remember. Remember, this video is for informational purposes and is not financial advice. Always conduct your own research before purchasing any investment, okay? Smartest thing you can do, never. It's not financial advice.

11:16Talk to a financial advisor. I do this for the love of the game. I do it for educational and entertainment purposes only. Always talk to a financial advisor. Anyway, love you guys. I repeated that a million times. Thank you guys for being so patient. I will see you all on the next episode. Push your limits, train with precision, see the results. At Equinox, that type performance loving. Iconic spaces that inspire. Personal training backed by real data, unlimited group fitness classes from yoga and Pilates to strength and conditioning. Elevate your post-performance ritual with sonas, steam rooms, cold plunges, and more. Everything you need to lock in and unlock your potential at Equinox. Start today at equinox.com. arespace Levels Support search Develops Section

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