Thank you for standing by. You are on hold for the Blackstone Secured Lending Fund Fourth Quarter and Full Year 2025 Investor Call. At this time, we are gathering additional participants and should be underway shortly. We appreciate your patience and ask that you continue to hold. Good day, and welcome to the Blackstone Secured Lending Fund Fourth Quarter and Full Year 2025 Investor Call. Today’s conference is being recorded. For operator assistance, please press 0. If you would like to ask a question, please signal by pressing 1. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. At this time, I would like to turn the call over to Stacy Wang, Head of Stakeholder Relations. Please go ahead.

Thank you, Katie. Good morning, and welcome to Blackstone Secured Lending Fund’s fourth quarter and full year results conference call. Joining me today are Brad Marshall, Co-Chief Executive Officer, and Teddy Desloge, Chief Financial Officer, along with other members of the management team available for Q&A, including Jonathan Bock, Co-Chief Executive Officer, and Carlos Whitaker, President. Earlier today, we issued a press release with the presentation of our results and filed our 10-Ks, both of which are available on the shareholder resource section of our website, www.bxsl.com. We will be referring to that presentation throughout today’s call. I would like to remind you that this 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 section of our Form 10-K filed earlier today. This audiocast is copyright material of Blackstone and may not be duplicated without consent. With that, I will turn the call over to Brad Marshall.

Thank you, and good morning, everyone. Before highlighting the results from the quarter, and some key observations, I would like to take a moment to share our macroeconomic views heading into 2026. Stepping back to the broader macro environment, despite periods of volatility over the past year, including tariff uncertainty, geopolitical instability, and elevated headline risk, we continue to see a fundamentally healthy economic backdrop. Overall, earnings growth has remained resilient, the consumer continues to demonstrate strength, and fiscal and monetary conditions remain supportive. Together, these factors are contributing to sustained economic momentum. A key driver of that momentum is the ongoing technology and AI-driven investment cycle, which I will provide more details on shortly. We believe we are in the early stages of the significant capital expenditure buildout focused on AI, digital infrastructure, and related technologies, providing a durable support to growth across multiple sectors. Particularly when you couple that with encouraging signs on inflation, we believe this macro and investment backdrop has translated into robust capital inflows into Blackstone’s private credit strategies over 2025, and particularly strong demand from the institutional channel most recently. We are coming off one of our most active quarters of investing for BXSL, and have over $5,040,000,000,000 of dry powder to invest in direct lending into a market that, in our view, remains highly receptive to direct private credit solutions. Looking ahead, we believe this combination of a constructive macro environment, improving credit fundamentals, and a defensive first-lien orientation positions the BXSL portfolio well from a performance and investing standpoint. On earnings, BXSL reported another strong quarter with our net investment income, or NII, of $0.80 per share, representing an 11.8% annualized return on equity made up overwhelmingly of interest income rather than income from PIK or dividends. Our distribution of $0.77 per…

Thanks, Brad. I will cover BXSL’s performance, portfolio fundamentals, and liability profile for the fourth quarter. First, on performance, BXSL’s net investment income for the quarter was $186,000,000, or $0.80 per share, representing 104% coverage to our dividend on a per-share basis. Year-over-year fourth quarter total investment income was up over $5,000,000, or 1.5%, and interest income excluding payment-in-kind, fees, and dividends represented over 91% of our total investment income in the quarter. BXSL continued to out-earn its dividend in the fourth quarter with a predominantly first-lien portfolio and among the lowest operating and financing costs across our traded BDC peers compared to Q3 data. We will continue to assess our dividend with our Board as we do every quarter as lower base rates flow through our portfolio. As previewed on last quarter’s call, we experienced increased repayment activity in the fourth quarter, and with accelerating M&A and deal activity as Brad outlined earlier, we are expecting similar levels of turnover in the upcoming quarters. Moving to the balance sheet, we ended the quarter with over $14,200,000,000 total portfolio investments at fair value, $8,100,000,000 of outstanding debt, and $6,200,000,000 of total net assets. Net asset value per share at quarter end was $26.92, down from $27.15 in the third quarter, which was primarily impacted by $0.27 of net unrealized losses in the portfolio, partially offset by $0.01 of net unrealized gains and $0.03 of excess net investment income generated to our dividend. As Brad highlighted, we saw healthy fundamentals on average across our portfolio companies, demonstrated by high-single-digit percentage EBITDA growth, and stabilizing interest coverage ratios at two turns as rate resets are improving cash flow profiles of our borrowers. Non-accruals in the fourth quarter were just 0.6% at cost and 0.5% at fair market value, up from 0.3% at…

Thank you. To allow as many callers to join the queue as possible, we will take our first question from Finian Patrick O’Shea with Wells Fargo Securities. We will now open for questions.

Hey, everyone. Good morning. Finian Patrick O’Shea: First question, big picture, we are looking at the potential scenario where the non-traded channel slows, I know you have your share of institutional capital, but that is, you know, perhaps less so than some of the other great houses of direct lending. So how do you how do we think about the impact where, for example, you have often talked about the importance of check size, larger companies, and so forth. Should we think about should we see it as a risk that you might have to go back down market on on new origination? In the event there are non-traded headwinds. Thanks.

Thanks, Fan. Thanks for the question. Maybe just as a starting point, to frame the market. So the U.S. leveraged finance market is about a $5,000,000,000,000 market. You look at high yield, it is about $1,500,000,000,000. And if you look at leveraged loans, about $1,400,000,000,000. Private credit in the institutional non-BDC channel is actually about $1,500,000,000,000. The non-traded BDCs are about $275,000,000,000 and traded BDCs are about $235,000,000,000. So it remains very much, as you point out, an institutional-driven market. And and why? Because institutions see the asset class, I think, similar to how you view it, which is it is very defensive. We are driving a premium to what you can get in the public markets. And that is really important. If you look at kind of our business more broadly to to answer your question, our credit business is $520,000,000,000. We are in every crevice of the the credit market. We are invested in, I think you have heard us mention this before, 5,000 companies around the world, which gives us incredible insights into going on with what is going on in the world and helps back up some of our investment themes. So our business is broad and deep, in every channel. If I look at kind of corporate lending, specifically non-investment grade, we have about $40,000,000,000 of dry powder. So I expect us to remain fairly active in the remainder of 2026, similar to kind of how active we were in 2025, which was our busiest investment quarter since 2021. So our business will remain active. We have lots of pools of capital to draw from, and it really comes back down to performance. And I think that will continue to attract capital in this space to the managers that are performing well. Finian Patrick O’Shea: Great. Appreciate that. And I will on another sort of hypothetical, but also front and center question. You are a little below book. Still better than most. But we might be here for a little while. In that case, does it make sense to sit on spillover or should we expect you to revisit that in a potential special? Thanks.

Great. Thanks, Fan. And I appreciate you actually pointing that out. We do have spillover income as a result of us out-earning our dividend over time, and and we have taken those over-earnings and invested it back into new loans to drive income for our investors. I think as maybe answer the question a little bit differently, as we get new cash proceeds into BXSL, either because of income or repayments—we mentioned we have a series of repayments coming over the next two quarters—we have options. We can reinvest in new loans. We can buy back, as you point out, discounted shares. We can delever. Those would be the the core kind of options. And and you are right. We could pay a a supplemental dividend. But as you know, our dividend at 11.4% being the very high end of the market. So our focus has been on these other options at this point. But of course, appreciate you highlighting the fact that we are in this enviable position of having out-earned the dividend. And I also appreciate the point that we are in an unusual time where we are trading below book. So we need to consider all these options. But at the end of the day, it is a discussion on how do we want to best use our cash on hand to deliver attractive options for our investors, and all options are on the table.

We will take our next question from Robert James Dodd with Raymond James.

Hi, guys. On kind of related somewhat to Finn’s question, when when we look at the the the grand scheme of things, flows in the the BDC perpetuals, in my view, or the the private market, are not that significant to affecting pricing and spreads. Right? To your point, it is a $5,000,000,000,000 market and all the BDCs together have half a trillion. What do you think the potential is if flows do deteriorate across the whole market for for retail fundraising? What do you think the potential is that is actually going to have a discernible impact on spreads in the market? I mean, CLO formation still looks pretty healthy. A lot of the other areas of the market still look pretty healthy. The retail flows seem to be quite a small part of that. Is there any any reason why that would actually influence pricing out in the marketplace?

I think it is a little early to tell, Robert. It is a good question. And I appreciate you highlighting the the liquid market, because they remain actually quite strong. I think 66% of the the liquid market is trading 99% or above. Spreads remain, you know, fairly tight in in the liquid markets. And so the the credit markets generally, again, despite what we read in the headlines, are actually pretty healthy. There is capital available. And and and as I mentioned, if you just look at our platform with, you know, $40,000,000,000 of dry powder, we will remain active in this market. And the overall credit quality of the deals that we are seeing, the credit quality of the deals that we are in, are not suggesting that spreads should widen at this point. So we will continue to watch the market evolve. But right now, things feel pretty stable.

Got it. Got it. Thank you. If I can kind of put that to, like, software, and I appreciate all the detail you you you gave and and and the framework to think about it. On, I mean, do you expect if if I was going to say, you know, three years from now, do you think the software mix in your portfolio would be higher or lower than it currently is or stable? I mean, do you is it there is more potentially uncertainty? I mean, obviously, the different business models, etcetera. But would would you are you looking to, you know, maybe not participate in the next time something gets refinanced, or would you prefer to shrink that exposure or keep keep it where it is? We will go it. Wow.

The the three-year crystal ball, I I do not have, Robert. But what what what I would say is we are seeing very good investment opportunities in the infrastructure around AI. And you saw that in the fourth quarter. We made an investment in IEM. We made an investment in Sabre Power. And so that is definitely on theme for us. The picks and shovels kind of around this AI buildout, which I mentioned in our prepared comments, you could see us continue to to lean into those themes and those opportunities because we think they have very good tailwinds.

Got it. Thank you.

Thank you, Robert. Thank you. We will take our next question from Arren Saul Cyganovich with Truist Securities.

Thanks. Good morning.

Maybe you could just talk a little bit about what the sponsor conversations have been like over the last few weeks. You know, clearly, the public markets are are are very trigger happy. What what are the sponsors thinking, you know, given that this was supposed to be a big, you know, capital markets year in in in kind of reviving, you know, IPOs, etcetera. You know, maybe just your thoughts on on those conversations.

It is a little bit like last year when the tariff noise came out, and there was a lot of volatility and uncertainty. Sponsors are kind of watching the markets and trying to see where they settle out before they, you know, bring assets to to market. So I I think like us, they are not terribly terribly disrupted, but they are, you know, holding back right now, bringing some of these assets to market. And but I I do expect for all the reasons we mentioned earlier, it will remain a fairly active year this year, because you do see growth in the economy. You do have lower cost of capital, which is positive for M&A activity. So all those tailwinds still exist. And we just need to work through a period of of heightened uncertainty and volatility, largely around the software space.

Got it. That is helpful. Thanks. And then, there is a follow-up on, we have seen a a couple of BDCs make some asset sales recently. One of them had already said they were going to do this last quarter, so it was not necessarily a surprise. Do you have a view on that? You know, you are you are trading below book, but not dramatically below book. Is there any benefit to selling assets at fair value and, you know, putting that back into the stock?

So what I would say to that is is we are definitively long-term holders of assets. And we also have $2,500,000,000 of liquidity. Like we mentioned on the call, we have $550,000,000 of near-term repayments. I suspect there is another $1,000,000,000 or $2,000,000,000 that will occur over the balance of the year. So the the fund itself, you know, naturally generates liquidity because of the term nature of the investments that we make. And with those proceeds, we will look at all the options that I mentioned in answering Finn’s question, which is we will look at buybacks. We have approval to do that. We will look at new loans that that come through our system. We may look to to delever. So all those options will be on the table. And it is probably worth just just hitting on this turnover and and repayment dynamic, which actually can be quite positive for BDCs and BXSL in particular. I mentioned three assets that that will be repaid this quarter. You know, those assets were had been marked down to to 93 at their low, and now they are getting refinanced at at par. So that sort of activity, as we get those repayments, will be positive to on those underperforming assets to pull NAV up. And it will be positive to generate liquidity if which we can use to do one of many things, as I as I just highlighted. So lots of, you know, different, you know, options on the table for us.

Thank you. We will take our next question from Kenneth Lee with RBC Capital Markets.

Hey, good morning. Thanks for taking my question. I think previously you talked about operating leverage perhaps closer to the higher end of the target range there. Given the potential opportunities to deploy into as well as the share repurchase, maybe just give us some thoughts about where leverage, you know, where could you could trend over the near term, where you are looking to operate near? Thanks.

Yeah. Thanks, Ken. This is Teddy. I am happy to take that. So just starting with the facts, as highlighted, 1.3x gross ending leverage, 1.27x average, 1.25x on a net basis. As Brad mentioned, we did have a very active end of the year. It was our second most active quarter on gross originations since 2021. We did have some deals, deal processes accelerated toward the end of the year. So we ended at slightly above the 1.25x range. We also do have $2,500,000,000 of immediate liquidity, $550,000,000 of repayments near term. So so really taking that altogether, Ken, no change. Long-term target remains 1.25x. Would expect to be able to manage near the high end of that range in the near term.

Gotcha. Very helpful there. And just one follow-up, if I may, and this is just on the the software book here, and really appreciate the the additional details and and color around there. How do you think about specifically recovery rates for software companies just given lack of tangible assets? How do you get confidence around the valuations and all sorts around that? Thanks.

Yeah. I can I can take that. I think we when we look at our software business, businesses, we look at kind of how they are performing as a starting point. And and they are performing actually, they are the best performing part of our our our business. No doubt, the public market has rerated software companies. As I said in our remarks, even in that instance, you take the 25% kind of markdown or rerating of of public company software businesses and we are still two times covered. So we feel very good about our coverage on our software business. We do have a small subset, less than 5% of the portfolio, of assets that we think are more impacted by AI and and some operational challenges. Those are a little bit harder to pinpoint from a value standpoint. But they are set up with a lot of equity in the business, and and we suspect the sponsors will continue to support them.

Gotcha. Very helpful there. Thanks again.

Thank you. We will take our next question from Douglas Harter with UBS.

Thanks.

You mentioned weighing the share repurchase, obviously, with the new authorization. Can you just walk through the thought process, how you will evaluate that? You know, and kind of how we should think about actually using that versus kind of having it there for, you know, kind of in case further declines.

Yeah. Doug, this is Teddy. I am I am happy to take that. I think the short answer is we are going to watch it and be very opportunistic. We do have $250,000,000 approved by the Board. We also have turnover increasing in the portfolio, as Brad mentioned. Historically, below a 10% discount to NAV can be quite accretive for buybacks. We have done this previously post-IPO. Announced a $250,000,000 repurchase that got done in 2022, and then we announced another plan in 2023. So we will be opportunistic with it. We will watch it. It will be a capital allocation decision between, as Brad said, paying down debt, new deals, and share repurchases.

Great. Appreciate your time, Teddy.

Thank you. We will take our next question from Ethan Kaye with Lucid Capital Markets.

Hey, guys. Quick question on some of the unrealized appreciation during the quarter. Maybe might have touched on it a bit in the prepared remarks, but I guess kind of specific to, you know, this quarter, it looks like the the depreciation was largely driven by maybe a handful of positions, you know, call it five to 10 positions with maybe single-digit percentage point markdowns. I guess my first question is, is this kind of consistent with with your read, or or do you see it as more of a broad kind of driven by broad market movement? And then, you know, second question, assuming it is, in fact, driven by, you know, a few names here, can you walk through any potential, like, common denominators? I know you mentioned the operational challenges, but, you know, do you see these as as a kind of idiosyncratic? Any, I guess, additional specificity here would be appreciated.

Yeah. Absolutely. Thanks, Ethan. I will I will start with just the facts. So you are right. NAV per share was $26.92. That is versus $27.15 prior quarter, so down $0.23 or less than 1%, about 85 basis points. When you dig into the $0.23, we had $0.26 of unrealized losses, about a penny of gains, and $0.03 of excess earnings. And within the unrealized losses, you are right. The marks were concentrated to a small handful of positions. Two accounted for about 50% of net unrealized gains and losses, and the top five accounted for over 60%. So taking a step back, what we see on the ground is stability. Earnings growth consistently high single digits, increasing interest coverage ratios and cash flow profiles. While you certainly can see some movement in marks tied to both performance and spreads over time, what we are seeing is around 85% of the portfolio seeing stable or improving trends based on fundamentals.

Yeah. And maybe just add to that. Because I mentioned this in the remarks, the number of deals on our watch list actually declined during the quarter. If I look back over the past seven years, since we started BXSL, we have we have actually had zero net realized losses for investors. So it it does kind of get back to, we do mark the the portfolio quite actively, you know, but it is really really designed to be defensive. That is why we are first lien in the capital structure, why we are at large businesses, why they are largely sponsor backed, why we have picked some low-default sectors. So I just want to highlight that and the journeys that sometime assets take like the three I mentioned that just got repaid at par, you know, were all in the kind of low 90s at one point. So companies do not always go up to the right. We work through them. And I also mentioned this on on the call. I have been doing this twenty-one years, and and our direct lending business, our realized loss rate is 10 basis points a year over that twenty-one years, and that is obviously through a lot of different economic cycles. So this is just ordinary kind of marking of of assets, and we feel very, very good about the overall portfolio.

Okay. Great color. Thank you, guys. And then one quick, you know, unrelated question. You mentioned I just want to get these numbers right. You mentioned $550,000,000 of repayments over the first six months, kind of in the, you know, in sight. And then, John, I think you also mentioned an additional billion throughout the year. Can you just kind of flesh that out? Yeah. And those numbers for the timeline. Correct?

Yeah. Ethan, this is Brad. So we have clear line of sight to $550,000,000 of repayments. These are committed deals that are have or will be refinanced. If you look at a a typical repayment cycle, it is somewhere between 15% to to 20% a year. So if you just use 20%, that is $2,800,000,000 of repayments this year. And that is where we give the range of an expectation that we will have another $1,000,000,000 or $2,000,000,000 behind that, just given the latter vintages of of our portfolio.

Excellent. Thank you, guys.

Thank you. We will take our final question from Rich Shane with JPMorgan.

Hey, guys. Thanks for taking my questions.

And most have been asked and answered. The the outlook on leverage is very helpful. Look. You guys have announced a repurchase. We just discussed the possibility of $2,000,000,000 of repayments this year. Leverage sounds like it is going to be flat. So you are going to be making some choices in terms of how to deploy capital. With where we sit today, is your best incremental investment deploying capital into new assets, or is it buying back stock? And it helps us sort of understand how you guys are thinking about that repurchase program.

Thanks, Rick. It is it is Brad. And it is great to have you on the call. I think we are in a little bit of new territory for us. We have been trading at a premium for so long that trading at a discount is is, you know, more of a, you know, more recent issue. I think Teddy framed it well. We have bought back shares in the past. Quite a bit, actually. So we are not afraid to do so. We do have a lot of, you know, things that we need to manage, leverage levels, and and making sure that we can support our existing portfolio companies. But I will say that given where the stock is trading, you know, buying back shares is is it is a very interesting price to do so. But there are a lot of different, you know, factors that it is not as simple as as that. So we have done it in the past. We think it is attractive. There are lots of factors we will evaluate.

I appreciate that. And it is helpful. And, again, realizing it is a complex decision, yeah. Look. The other the other thing is and and, you know, it is interesting revisiting the space after all these years. You know, look. You guys are trading at a discount to NAV, but you are trading at a relative premium to most of your peers. Historically, we have seen in those environments, particularly where peers are trading at substantial discounts, some opportunities for strategic decisions that are actually accretive despite trading at a discount to NAV. Are there pools of assets out there right now that you find attractive, or do you feel like those opportunities are just taking on other people’s problems.

Yeah. If if you are referencing buying, you know, secondary loans that that other investors are looking to sell, you know, we have we have looked at, you know, portfolios. We we do think that investing in new loans is the best use of capital for BXSL. The secondary credit sales remains to be a fairly kind of active market. And we look at that across our broader platform. But for BXSL specifically, I think we want to, you know, continue making kind of new primary loans where we have had the ability to do very deep underwritings. As you know, these take months and months of of detailed work. When you are buying a secondary portfolio, you are it is a little bit more of a tabletop analysis. So so BXSL will focus on on new loans.

Great. I appreciate the clarity of the answer. Thank you, guys.

Thank you. That will conclude our question and answer session. At this time, I would like to turn the call back over to Stacy Wang for any additional or closing remarks.

Thank you for joining us this morning. We appreciate your engagement and ongoing support of BXSL. Do not hesitate to reach out with any follow-up questions, and we look forward to continuing our dialogue next quarter.