BLACKSTONE SECURED LENDING FUND The information contained in this section should be read in conjunction with "Item 1. Financial Statements." This discussion contains forward-looking statements, which relate to future events our future performance or financial condition and involves numerous risks and uncertainties, including, but not limited to, those set forth in "Risk Factors" in Part I, Item 1A of our annual report on Form 10-K for the year endedDecember 31, 2021 as updated by the Company's periodic filings with theSecurities and Exchange Commission .
Overview and Investment Framework
We are aDelaware statutory trust structured as a non-diversified, closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. In addition, forU.S. federal income tax purposes, we elected to be treated as a RIC under the Code. We are managed by our Adviser. The Administrator will provide the administrative services necessary for us to operate.
Our investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation.
Under normal market conditions, we generally invest at least 80% of our total assets (net assets plus borrowings for investment purposes) in secured debt investments and our portfolio is composed primarily of first lien senior secured and unitranche loans. To a lesser extent, we have and may continue to also invest in second lien, third lien, unsecured or subordinated loans and other debt and equity securities. We do not currently expect to focus on investments in issuers that are distressed or in need of rescue financing. OnOctober 28, 2021 , the Company priced its IPO, issuing 9,180,000 of its common shares of beneficial interest at a public offering price of$26.15 per share. Net of underwriting fees, the Company received net cash proceeds, before offering expenses, of$230.6 million . OnNovember 4, 2021 , the underwriters exercised their option to purchase an additional 1,377,000 shares of common shares, which resulted in net cash proceeds, before offering expenses, of$33.8 million . The Company's common shares began trading on the NYSE under the symbol "BXSL" onOctober 28, 2021 .
Key Components of Our Results of Operations
Investments
We focus primarily on loans and securities, including syndicated loans, of
private
Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity for such companies, the general economic environment, trading prices of loans and other securities and the competitive environment for the types of investments we make.
Revenues
We generate revenues in the form of interest income from the debt securities we
hold and dividends. Our debt investments typically have a term of five to eight
years and bear interest at floating rates on the basis of a benchmark such as
LIBOR, SOFR or SONIA. In some instances, we receive payments on our debt
investments based on scheduled amortization of the outstanding balances. In
addition, we may receive repayments of some of our debt investments prior to
their scheduled maturity date. The frequency or volume of these repayments
fluctuates significantly from period to period. Our portfolio activity also
reflects the proceeds of sales of securities. In some cases, our investments may
provide for deferred interest payments or PIK interest. The principal amount of
loans and any accrued but unpaid interest generally become due at the maturity
date.
In addition, we generate revenue in the form of commitment, loan origination,
structuring or diligence fees, fees for providing managerial assistance to our
portfolio companies, and possibly consulting fees.
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Expenses
Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser. We bear all other costs and expenses of our operations, administration and transactions, including, but not limited to (a) investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Investment Advisory Agreement; (b) our allocable portion of compensation, overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) our chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other non-investment professionals at the Administrator that perform duties for us; and (iii) any internal audit group personnel ofBlackstone or any of its affiliates; and (c) all other expenses of our operations, administrations and transactions. From time to time, the Adviser, the Administrator or their affiliates may pay third-party providers of goods or services on our behalf. We will reimburse the Adviser, Administrator or such affiliates thereof for any such amounts. From time to time, the Adviser or the Administrator may defer or waive fees and/or rights to be reimbursed for expenses. The Administrator has elected to forgo any reimbursement for rent and other occupancy costs for the three and nine months endedSeptember 30, 2022 and 2021. However, the Administrator may seek reimbursement for such costs in future periods. All of the foregoing expenses will ultimately be borne by our shareholders. Costs and expenses of the Administrator and the Adviser that are eligible for reimbursement by us will be reasonably allocated on the basis of time spent, assets under management, usage rates, proportionate holdings, a combination thereof or other reasonable methods determined by the Administrator in accordance with policies adopted by the Board.
Expense Support and Conditional Reimbursement Agreement
We have entered into an Expense Support Agreement with the Adviser. For additional information see "Item 1. Consolidated Financial Statements-Notes to Consolidated Financial Statements-Note 3. Agreements and Related Party Transactions."
Portfolio and Investment Activity
For the three months endedSeptember 30, 2022 , we acquired$272.0 million aggregate principal amount of investments (including$10.6 million of unfunded commitments),$269.8 million of which was first lien debt and$2.2 million of which was equity. For the three months endedSeptember 30, 2021 , we acquired$2,440.2 million aggregate principal amount of investments (including$569.2 million of unfunded commitments),$2,406.3 million of which was first lien debt,$4.6 million of which was second lien debt,$12.5 million of which was unsecured debt and$16.8 million of which was equity. 65
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Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated) (dollar amounts in thousands):
As of and for the three months ended
September 30,
2022 2021
Investments:
Total investments, beginning of period $ 10,021,140 $ 7,270,312
New investments purchased 234,690 1,846,526
Payment-in-kind interest capitalized 11,340 -
Net accretion of discount and amortization of premium on investments
15,354 17,146
Net realized gain (loss) on investments 31,249 (1,808)
Investments sold or repaid (608,436) (1,006,855)
Total investments, end of period $ 9,705,337 $ 8,125,321
Amount of investments funded at principal:
First lien debt investments $ 259,174 $ 1,837,094
Second lien debt investments - 4,606
Unsecured debt - 12,537
Equity investments 2,160 16,760
Total $ 261,334 $ 1,870,997
Proceeds from investments sold or repaid:
First lien debt investments $ (557,156) $ (972,550)
Second lien debt investments - (15,026)
Unsecured debt - (19,279)
Warrant (8,514) -
Equity (42,766) -
Total $ (608,436) $ (1,006,855)
Number of portfolio companies 172 117
Weighted average yield of new investment commitments(4) 9.30 % 6.71 %
Weighted average yield on investments fully sold or paid down(4) 7.81 % 7.72 %
Weighted average yield on debt and income producing investments, at cost(1)(2)
9.09 % 7.34 %
Weighted average yield on debt and income producing investments, at fair value(1)(2)
9.14 % 7.28 %
Average loan to value (LTV)(3) 46.72 % 45.20 %
Percentage of debt investments bearing a floating rate 99.92 % 99.90 %
Percentage of debt investments bearing a fixed rate 0.08 % 0.10 %
(1)Computed as (a) the annual stated interest rate or yield plus the annual
accretion of discounts or less the annual amortization of premiums, as
applicable, on accruing debt included in such securities, divided by (b) total
debt investments (at fair value or cost, as applicable) included in such
securities. Actual yields earned over the life of each investment could differ
materially from the yields presented above.
(2)As of September 30, 2022 and 2021, the weighted average total portfolio yield
at cost was 8.98% and 7.27%, respectively. The weighted average total portfolio
yield at fair value was 9.01% and 7.18%, respectively.
(3)Includes all private debt investments for which fair value is determined by
our Board in conjunction with a third-party valuation firm and excludes quoted
assets. Average loan-to-value represents the net ratio of loan-to-value for each
portfolio company, weighted based on the fair value of total applicable private
debt investments. Loan-to-value is calculated as the current total net debt
through each respective loan tranche divided by the estimated enterprise value
of the portfolio company as of the most recent quarter end.
(4)Weighted average yield for new investment commitments or investments fully sold or paid down, as applicable, on originated loans.
As ofSeptember 30, 2022 , our portfolio companies had a weighted average annual revenue of$635.0 million and weighted average annual EBITDA of$162.4 million . These calculations include all private debt investments for which fair value is determined by the Board in conjunction with a third-party valuation firm and excludes quoted assets. Amounts are weighted based on fair market value of each respective investment. Amounts were derived from the most recently available portfolio company financial statements, have not been independently estimated by us, and may reflect a normalized or adjusted amount. Accordingly, we make no representation or warranty in respect of this information. 66
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Our investments consisted of the following (dollar amounts in thousands):
September 30, 2022 December 31, 2021
% of Total % of Total
Investments at Investments at
Cost Fair Value Fair Value Cost Fair Value Fair Value
First lien debt $ 9,524,640 $ 9,468,536 97.90 % $ 9,563,051 $ 9,621,939 97.63 %
Second lien debt 70,632 66,313 0.69 62,445 63,175 0.64
Equity investments 110,065 137,267 1.41 119,630 170,265 1.73
Total $ 9,705,337 $ 9,672,116 100.00 % $ 9,745,126 $ 9,855,379 100.00 %
As of
As ofSeptember 30, 2022 andDecember 31, 2021 , on a fair value basis, approximately 99.9% and 99.9%, respectively, of our performing debt investments bore interest at a floating rate and approximately 0.1% and 0.1%, respectively, of our performing debt investments bore interest at a fixed rate.
Results of Operations
The following table represents the operating results (dollar amounts in
thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Total investment income $ 226,791 $
166,875
94,647 70,848 257,880 189,610
Net investment income before excise tax 132,144 96,027 341,499 243,072
Excise tax expense - 2,220 1,386 1,938
Net investment income after excise tax 132,144 93,807 340,113 241,134
Net unrealized appreciation (depreciation) (70,586) 18,033 (99,975) 92,028
Net realized gain (loss) 34,388 (1,833) 42,639 5,308
Net increase (decrease) in net assets
resulting from operations $ 95,946 $
110,007
Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. As a result, comparisons may not be meaningful.
Investment Income
Investment income was as follows (dollar amounts in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Interest income $ 213,242 $
165,417
10,933 1,000 30,427 3,279
Dividend income - - 5,908 -
Fee income 2,616 458 3,958 5,262
Total investment income $ 226,791 $
166,875
Total investment income increased to$226.8 million for the three months endedSeptember 30, 2022 from$166.9 million for the same period in the prior year primarily driven by increasing interest rates and a stable balance of our investments. The size of our investment portfolio at fair value increased to$9,672.1 million atSeptember 30, 2022 from 67
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$8,223.0 million atSeptember 30, 2021 . Additionally, for the three months endedSeptember 30, 2022 , we accrued$1.7 million of non-recurring interest income (e.g., prepayment premiums and accelerated accretion of upfront loan origination fees and unamortized discounts) as compared to$16.4 million for the same period in the prior year. For the three months endedSeptember 30, 2022 and 2021, payment-in-kind income represented 4.8% and 0.6% of investment income, respectively. We expect that investment income will vary based on a variety of factors including the pace of our originations and repayments. Total investment income increased to$599.4 million for the nine months endedSeptember 30, 2022 from$432.7 million for the same period in the prior year primarily driven by a higher weighted average yield on our investments and offset by lower prepayment related income. The size of our investment portfolio at fair value increased to$9,672.1 million atSeptember 30, 2022 from$8,223.0 million atSeptember 30, 2021 . Additionally, for the nine months endedSeptember 30, 2022 , we accrued$2.0 million of non-recurring interest income (e.g., prepayment premiums and accelerated accretion of upfront loan origination fees and unamortized discounts) as compared to$41.0 million for the same period in the prior year. For the nine months endedSeptember 30, 2022 and 2021, payment-in-kind income represented 5.1% and 0.8% of investment income, respectively. We expect that investment income will vary based on a variety of factors including the pace of our originations and repayments. As the impact of inflation persists, it could cause operational and/or liquidity issues at our portfolio companies which could restrict their ability to make cash interest payments. Additionally, we may experience full or partial losses on our investments which may ultimately reduce our investment income in future periods. In addition, the rise in interest rates in order to control inflation may correlate to increases or decreases in our net income. Increases in interest rates may adversely affect our existing borrowers.
Expenses
Expenses were as follows (dollar amounts in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Interest expense $ 55,347 $
32,740
25,385 15,445 76,913 40,394
Income based incentive fees (Note 3) 26,088 16,983 68,252 45,130
Capital gains incentive fees (Note 3) (5,430) 2,430 (8,600) 14,600
Professional fees 762 939 2,527 2,179
Board of Trustees' fees 238 141 628 416
Administrative service expenses 687 500 1,876 1,623
Other general and administrative 1,643 1,670 4,530 4,215
Excise tax expense - 2,220 1,386 1,938
Total expenses (including excise tax
expense) 104,720 73,068 288,244 191,548
Management fees waived (6,346) - (19,228) -
Incentive fees waived (3,727) - (9,750) -
Net expenses (including excise tax
expense) $ 94,647 $ 73,068 $ 259,266 $ 191,548
Interest Expense
Total interest expense (including unused fees and other debt financing
expenses), increased to $55.3 million for the three months ended September 30,
2022 from $32.7 million for the same period in the prior year primarily driven
by increased borrowings under our credit facilities and rising interest rates.
The average principal debt outstanding increased to $5,867.3 million for the
three months ended September 30, 2022 from $4,487.3 million for the same period
in the prior year, weighted average interest rate increased to 3.67% for the
three months ended September 30, 2022 from 2.83% for the same period in the
prior year.
Total interest expense (including unused fees and other debt financing
expenses), increased to $140.7 million for the nine months ended September 30,
2022 from $81.1 million for the same period in the prior year primarily driven
by increased borrowings under our credit facilities, our unsecured bond
issuances and rising interest rates. The average principal debt outstanding
increased to $5,750.0 million for the nine months ended September 30, 2022 from
$3,546.3 million for the same
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period in the prior year, partially offset by a decrease in our weighted average interest rate to 3.18% for the nine months endedSeptember 30, 2022 from 2.92% for the same period in the prior year.
Management Fees
Management fees increased to$25.4 million for the three months endedSeptember 30, 2022 from$15.4 million for the same period in the prior year primarily due to an increase in gross assets. The Adviser voluntarily waived management fees following the IPO such that the management fee will remain at 0.75% for a period of two years following the IPO (versus the contractual rate of 1.00%), which resulted in waivers of$6.3 million and$0.0 million for the three months endedSeptember 30, 2022 and 2021, respectively. Management fees increased to$76.9 million for the nine months endedSeptember 30, 2022 from$40.4 million for the same period in the prior year primarily due to an increase in gross assets. The Adviser voluntarily waived management fees following the IPO such that the management fee will remain at 0.75% for a period of two years following the IPO (versus the contractual rate of 1.00%), which resulted in waivers of$19.2 million and$0.0 million for the nine months endedSeptember 30, 2022 and 2021, respectively.
Our total gross assets increased to
Income Based Incentive Fees
Income based incentive fees increased to$26.1 million for the three months endedSeptember 30, 2022 from$17.0 million for the same period in the prior year primarily due to our deployment of capital. The Adviser voluntarily waived incentive fees following the IPO such that the fee will remain at 15.0% for a period of two years following the IPO (versus the contractual rate of 17.5%), which resulted in waivers of$3.7 million and$0.0 million for the three months endedSeptember 30, 2022 and 2021, respectively. Pre-incentive fee net investment income increased to$149.1 million for the three months endedSeptember 30, 2022 from$113.2 million for the same period in the prior year. Income based incentive fees increased to$68.3 million for the nine months endedSeptember 30, 2022 from$45.1 million for the same period in the prior year primarily due to our deployment of capital. The Adviser voluntarily waived incentive fees following the IPO such that the fee will remain at 15.0% for a period of two years following the IPO (versus the contractual rate of 17.5%), which resulted in waivers of$9.8 million and$0.0 million for the nine months endedSeptember 30, 2022 and 2021, respectively. Pre-incentive fee net investment income increased to$390.0 million for the nine months endedSeptember 30, 2022 from$300.9 million for the same period in the prior year.
Capital Gains Based Incentive Fees
We accrued capital gains incentive fees of$(5.4) million for the three months endedSeptember 30, 2022 compared to$2.4 million for the same period in the prior year, primarily due to net realized and unrealized losses for the three months endedSeptember 30, 2022 as compared to net realized and unrealized gains for the same period in the prior year. We accrued capital gains incentive fees of$(8.6) million for the nine months endedSeptember 30, 2022 compared to$14.6 million for the same period in the prior year, primarily due to net realized and unrealized losses for the nine months endedSeptember 30, 2022 as compared to net realized and unrealized gains for the same period in the prior year. The accrual for any capital gains incentive fee underU.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less in the prior period. If such cumulative amount is negative, then there is no accrual.
Other Expenses
Professional fees include legal, rating agencies, audit, tax, valuation,
technology and other professional fees incurred related to the management of us.
Administrative service expenses represent fees paid to the Administrator for our
allocable portion of overhead and other expenses incurred by the Administrator
in performing its obligations under the administration agreement, including our
allocable portion of the cost of certain of our executive officers, their
respective staff and other non-investment professionals that perform duties for
us. Prior to the IPO, offering costs included costs associated with our private
offering. Other general and administrative expenses include insurance, filing,
research, our sub-administrator, subscriptions and other costs.
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Total other expenses remained flat, amounting to
Total other expenses increased to
The Adviser may elect to make Expense Payments on our behalf, subject to future Reimbursement Payments pursuant to the Expense Support Agreement described above in "-Key Components of Our Results of Operations-Expenses."
Income Taxes, Including Excise Taxes
We elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our shareholders in each taxable year generally at least 90% of the sum of our investment company taxable income, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our shareholders, which generally relieve us from corporate-levelU.S. federal income taxes. Depending on the level of taxable income earned in a tax year, we may carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4%U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, we will accrue excise tax on estimated excess taxable income. For the three and nine months endedSeptember 30, 2022 , we incurred$0.0 million and$1.4 million , respectively, ofU.S. federal excise tax. For the three and nine months endedSeptember 30, 2021 we incurred$2.2 million and$1.9 million , respectively, ofU.S. federal excise tax.
Net Unrealized Gain (Loss)
Net unrealized gain (loss) was comprised of the following (dollar amounts in thousands):
Three Months Ended September 30 ,
Nine Months Ended
2022 2021 2022 2021
Net unrealized gain (loss) on
investments $ (70,650) $ 18,028 $ (100,441) $ 92,625
Net unrealized gain (loss) on
translation of assets and
liabilities in foreign currencies 64 5 466 (597)
Net unrealized gain (loss) $ (70,586) $ 18,033 $ (99,975) $ 92,028
For the three months ended September 30, 2022 , the net unrealized loss was
primarily driven by an decrease in the fair value of our debt investments during
the period. The fair value of our debt investments as a percentage of principal
decreased by 0.5% as compared to a 0.3% increase in fair value of our debt
investments for the same period in prior year driven in part by rising rates and
inflation during the three months ended September 30, 2022 .
For the nine months ended September 30, 2022 , the net unrealized loss was
primarily driven by an decrease in the fair value of our debt investments during
the period. The fair value of our debt investments as a percentage of principal
decreased by 0.2% as compared to a 1.3% increase in fair value of our debt
investments for the same period in prior year driven in part by rising rates and
inflation during the nine months ended September 30, 2022 .
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Net Realized Gain (Loss)
The realized gains and losses on fully exited and partially exited investments comprised of the following (dollar amounts in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Net realized gain (loss) on investments $ 31,249 $ (1,808) $ 39,109 $ 6,509
Net realized gain (loss) on translation
of assets and liabilities in foreign
currencies 3,139 (25) 3,530 (1,201)
Net realized gain (loss) $ 34,388 $
(1,833)
For the three and nine months endedSeptember 30, 2022 , we generated realized gains of$36.2 million and$44.8 million , respectively, partially offset by realized losses of$5.0 million and$5.7 million respectively, primarily from full or partial sales of our debt investments. For the three and nine months endedSeptember 30, 2021 , we generated realized gains of$7.0 million and$15.5 million , respectively, partially offset by realized losses of$8.8 million and$9.0 million respectively, primarily from full or partial sales of our debt investments.
Financial Condition, Liquidity and Capital Resources
Our liquidity and capital resources are generated primarily from cash flows from interest, dividends and fees earned from our investments and principal repayments, our credit facilities, debt securitization transactions, and other secured and unsecured debt. We may also generate cash flow from operations, future borrowings and future offerings of securities including public and/or private issuances of debt and/or equity securities through both registered offerings and private offerings. The primary uses of our cash and cash equivalents are for (i) originating loans and purchasing senior secured debt investments, (ii) funding the costs of our operations (including fees paid to our Adviser and expense reimbursements paid to our Administrator), (iii) debt service, repayment and other financing costs of our borrowings and (iv) cash distributions to the holders of our shares. As of bothSeptember 30, 2022 andDecember 31, 2021 , we had four revolving credit facilities outstanding and we had five issuances of unsecured bonds outstanding. We may from time to time enter into additional credit facilities, increase the size of our existing credit facilities or issue further debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. As ofSeptember 30, 2022 andDecember 31, 2021 , we had an aggregate amount of$5,550.6 million and$5,544.3 million of senior securities outstanding and our asset coverage ratio was 175.1% and 180.2%, respectively. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation to cover any outstanding unfunded commitments we are required to fund. Cash and cash equivalents as ofSeptember 30, 2022 , taken together with our$999.4 million of available capacity under our credit facilities (subject to borrowing base availability) is expected to be sufficient for our investing activities and to conduct our operations in the near term. Additionally, we held$84.0 million of Level 2 debt investments as ofSeptember 30, 2022 , which could provide additional liquidity if necessary. A continued disruption in the financial markets caused by recent macroeconomic or market volatility, COVID-19 or any other negative economic development could restrict our access to financing in the future. We may not be able to find new financing for future investments or liquidity needs and, even if we are able to obtain such financing, such financing may not be on as favorable terms as we have recently obtained. These factors may limit our ability to make new investments and adversely impact our results of operations. As ofSeptember 30, 2022 , we had$131.2 million in cash and cash equivalents. During the nine months endedSeptember 30, 2022 , cash provided by operating activities was$505.1 million , primarily as a result of proceeds from sale of investments funding portfolio investments of$955.6 million ; partially offset by purchases of investments of$808.8 million . Cash used in financing activities was$476.8 million during the period, which was primarily as a result of dividends paid in cash of$305.8 million and repurchase of shares of$215.6 million .
As of
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investments of
Equity
OnOctober 28, 2021 , the Company priced its IPO, issuing 9,180,000 of its common shares of beneficial interest at a public offering price of$26.15 per share. Net of underwriting fees, the Company received net cash proceeds, before offering expenses, of$230.6 million . OnNovember 4, 2021 , the underwriters exercised their option to purchase an additional 1,377,000 shares of common shares, which resulted in net cash proceeds, before offering expenses, of$33.8 million . The Company's common shares began trading on the NYSE under the symbol "BXSL" onOctober 28, 2021 . In connection with the listing of the Company's common shares on the NYSE, the Board decided to eliminate any outstanding fractional common shares (the "Fractional Shares"), as permitted byDelaware law by rounding down the number of Fractional Shares held by each of our shareholders to the nearest whole share and paying each shareholder cash for such Fractional Shares.
Distributions and Dividend Reinvestment
The following table summarizes our distributions declared and payable for the nine months endedSeptember 30, 2022 (dollar amounts in thousands, except share amounts): Per Share Date Declared Record Date Payment Date Amount Total Amount October 18, 2021 January 18, 2022 May 13, 2022$ 0.1000 $ 16,927 (1) October 18, 2021 March 16, 2022 May 13, 2022 0.1500 25,454 (1) February 23, 2022 March 31, 2022 May 13, 2022 0.5300 89,937 October 18, 2021 May 16, 2022 August 12, 2022 0.2000 33,995 (1) May 2, 2022 June 30, 2022 August 12, 2022 0.5300 89,169 October 18, 2021 July 18, 2022 November 14, 2022 0.2000 32,976 (1) August 30, 2022 September 30, 2022 November 14, 2022 0.6000 97,094 (2) Total distributions$ 2.3100 $ 385,552
(1)Represents a special distribution.
(2)On
The following table summarizes our distributions declared and payable for the nine months endedSeptember 30, 2021 (dollar amounts in thousands, except share amounts): Per Share Date Declared Record Date Payment Date Amount Total Amount February 24, 2021 March 31, 2021 May 14, 2021$ 0.5000 $ 65,052 June 7, 2021 June 7, 2021 August 13, 2021 0.3736 48,734 June 7, 2021 June 30, 2021 August 13, 2021 0.1264 18,241 September 7, 2021 September 7, 2021 November 12, 2021 0.3750 54,250 September 7, 2021 September 30, 2021 November 12, 2021 0.1250 19,800 Total distributions$ 1.5000 $ 206,077 With respect to distributions, we have adopted an "opt out" dividend reinvestment plan for shareholders. As a result, in the event of a declared cash distribution or other distribution, each shareholder that has not "opted out" of the dividend reinvestment plan will have their dividends or distributions automatically reinvested in additional shares rather than receiving cash distributions. Shareholders who receive distributions in the form of shares will be subject to the sameU.S. federal, state and local tax consequences as if they received cash distributions. Refer to "Item 1. Consolidated Financial Statements-Notes to Consolidated Financial Statements-Note 8. Net Assets" to the consolidated financial statements for more information on our dividend reinvestment program. 72
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The following table summarizes the amounts received and shares issued to shareholders who have not opted out of our dividend reinvestment plan during the nine months endedSeptember 30, 2022 (dollars in thousands except share amounts): Payment Date DRIP Shares Value DRIP Shares Issued January 31, 2022 $ 11,469 417,379 May 13, 2022 16,501 640,829 August 12, 2022 8,203 325,508 August 12, 2022 3,267 129,640 Total distributions $ 39,440 1,513,356 The following table summarizes the amounts received and shares issued to shareholders who have not opted out of our dividend reinvestment plan during the nine months endedSeptember 30, 2021 (dollars in thousands except share amounts): Payment Date DRIP Shares Value DRIP Shares Issued January 29, 2021 $ 11,179 443,639 May 14, 2021 8,674 339,398 August 13, 2021 9,142 352,656 Total distributions $ 28,995 1,135,693 Share Repurchase Plan OnOctober 18, 2021 , the Board approved a share repurchase plan (the "Company 10b5-1 Plan") to acquire up to approximately$262 million (representing the net proceeds from the IPO) in the aggregate of the Company's common shares at prices below net asset value per share over a specified period, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act. The Company put the 10b5-1 Plan in place because it believes that, in the current market conditions, if its common shares are trading below its then-current net asset value per share, it is in the best interest of the Company's shareholders for the Company to reinvest in its portfolio. The following table summarizes the shares repurchased under the Company 10b5-1 Plan during the nine months endedSeptember 30, 2022 (dollars in thousands except share amounts): Approximate Total Number of Dollar Value of Shares Purchased as Shares that May Part of Publicly Yet Be Total Number of Average Price Announced Plans or Purchased Under
Period Shares Purchased Paid per Share Programs the Program
April 1 - April 30, 2022 - $ - - $ 262,000
May 1 - May 31, 2022 774,558 $ 25.24 774,558 $ 242,447
June 1 - June 30, 2022 1,313,782 $ 24.49 1,313,782 $ 210,275
July 1 - July 31, 2022 2,394,113 $ 23.20 2,394,113 $ 154,736
August 1 - August 31, 2022 2,223,389 $ 24.22 2,223,389 $ 100,886
September 1 - September 30, 2022 2,251,657 $ 24.14 2,251,657 $ 46,527
Total Repurchases 8,957,499 8,957,499
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Borrowings
Our outstanding debt obligations were as follows (dollar amounts in thousands):
September 30, 2022
Aggregate
Principal Outstanding Carrying Unused Amount
Committed Principal Value Portion (1) Available (2)
Jackson Hole Funding
Facility(3) $ 400,000 $ 360,019 $
360,019
708,300 708,300 116,700 116,700
Big Sky Funding Facility 500,000 499,606 499,606 394 394
Revolving Credit Facility(4) 1,625,000 782,691 782,691 842,309 842,309
2023 Notes(5) 400,000 400,000 398,306 - -
2026 Notes(5) 800,000 800,000 794,094 - -
New 2026 Notes(5) 700,000 700,000 693,007 - -
2027 Notes(5) 650,000 650,000 637,973 - -
2028 Notes(5) 650,000 650,000 638,725 - -
Total $ 6,550,000 $ 5,550,616 $ 5,512,721 $ 999,384 $ 999,384
December 31, 2021
Aggregate
Principal Outstanding Carrying Unused Amount
Committed Principal Value Portion (1) Available (2)
Jackson Hole Funding
Facility(3) $ 400,000 $ 361,007 $
361,007
568,680 568,680 256,320 256,320
Big Sky Funding Facility 500,000 499,606 499,606 394 394
Revolving Credit Facility(4) 1,325,000 915,035 915,035 409,965 271,585
2023 Notes(5) 400,000 400,000 396,702 - -
2026 Notes(5) 800,000 800,000 792,757 - -
New 2026 Notes(5) 700,000 700,000 691,662 - -
2027 Notes(5) 650,000 650,000 635,860 - -
2028 Notes(5) 650,000 650,000 637,324 - -
Total $ 6,250,000 $ 5,544,328 $ 5,498,633 $ 705,672 $ 567,292
(1)The unused portion is the amount upon which commitment fees, if any, are
based.
(2)The amount available reflects any limitations related to each respective
credit facility's borrowing base.
(3)Under the Jackson Hole Funding Facility, the Company may borrow in U.S.
dollars or certain other permitted currencies. As of September 30, 2022 , the
Company had borrowings denominated in Euros (EUR) of 0.0 million. As of
December 31, 2021 , the Company had borrowings denominated in Euros (EUR) of 23.3
million.
(4)Under the Revolving Credit Facility, the Company may borrow in U.S. dollars
or certain other permitted currencies. As of September 30, 2022 , the Company had
borrowings denominated in Canadian Dollars (CAD), Euros (EUR) and British Pounds
(GBP) of 328.9 million, 99.9 million and 66.6 million, respectively. As of
December 31, 2021 , the Company had borrowings denominated in Canadian Dollars
(CAD), Euros (EUR) and British Pounds (GBP) of 256.3 million, 18.6 million and
49.8 million, respectively.
(5)The carrying value of the Company's 2023 Notes, 2026 Notes, New 2026 Notes,
2027 Notes and 2028 Notes is presented net of unamortized debt issuance costs of
$1.7 million , $5.9 million , $7.0 million , $12.0 million and $11.3 million ,
respectively, as of September 30, 2022 . The carrying value of the Company's 2023
Notes, 2026 Notes, New 2026 Notes, 2027 Notes and 2028 Notes is presented net of
unamortized debt issuance costs of $3.3 million , $7.2 million , $8.3 million ,
$14.1 million and $12.7 million , respectively, as of December 31, 2021 .
For additional information on our debt obligations see "Item 1. Consolidated Financial Statements-Notes to Consolidated Financial Statements-Note 6. Borrowings."
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Off-Balance Sheet Arrangements
Portfolio Company Commitments
Our investment portfolio contains and is expected to continue to contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As ofSeptember 30, 2022 andDecember 31, 2021 , we had unfunded delayed draw term loans and revolvers with an aggregate principal amount of$849.0 million and$1,407.3 million , respectively.
Other Commitments and Contingencies
From time to time, we may become a party to certain legal proceedings incidental to the normal course of its business. AtSeptember 30, 2022 , management is not aware of any pending or threatened litigation.
Related-Party Transactions
We have entered into a number of business relationships with affiliated or related parties, including the following:
•the Investment Advisory Agreement;
•the Administration Agreement; and
•Expense Support and Conditional Reimbursement Agreement.
In addition to the aforementioned agreements, we, our Adviser and certain of our Adviser's affiliates have been granted exemptive relief by theSEC to co-invest with other funds managed by our Adviser or its affiliates in a manner consistent with our investment objectives, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. See "Item 1. Consolidated Financial Statements-Notes to Consolidated Financial Statements-Note 3. Agreements and Related Party Transactions."
Recent Developments
Macroeconomic Environment
TheU.S. Federal Reserve's recent actions to increase interest rates in order to control inflation have created further uncertainty for the economy and for our borrowers. Although our business model is such that rising interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers. It is difficult to predict the full impact of recent changes and any future changes in interest rates or inflation. Reference Rate Reform LIBOR and certain other floating rate benchmark indices to which our floating rate loans and other loan agreements are tied, including, without limitation, the Euro Interbank Offered Rate, or EURIBOR, the Stockholm Interbank Offered Rate, or STIBOR, the Australian Bank Bill Swap Reference Rate, or BBSY, the Canadian Dollar Offered Rate, or CDOR, the Swiss Average Rate Overnight, or SARON, and the Copenhagen Interbank Offering Rate, or CIBOR, or collectively, IBORs, are the subject of recent national, international and regulatory guidance and proposals for reform. As ofDecember 31, 2021 , theICE Benchmark Association , or IBA, ceased publication of all non-USD LIBOR and the one-week and two-month USD LIBOR and, as and previously announced, intends to cease publication of remainingU.S. dollar LIBOR settings immediately afterJune 30, 2023 . Further, onMarch 15, 2022 , the Consolidated Appropriations Act of 2022, which includes the Adjustable Interest Rate (LIBOR) Act, was signed into law in theU.S. This legislation establishes a uniform benchmark replacement process for financial contracts maturing afterJune 30, 2023 that do not contain clearly defined or practicable fallback provisions. The legislation also creates a safe harbor that shields lenders from litigation if they choose to utilize a replacement rate recommended by theBoard of Governors of theFederal Reserve . TheU.S. Federal Reserve , in conjunction with the Alternative Reference Rates Committee, a steering committee composed of largeU.S. financial institutions, has identified the Secured Overnight Financing Rate, or SOFR, a new index calculated using short-term repurchase agreements backed byU.S. Treasury securities, as its preferred alternative rate for USD LIBOR. Additionally, market participants have started to transition from GBP LIBOR to the Sterling Overnight Index Average, or SONIA, in line with guidance from theU.K. regulators. 75
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At this time, it is not possible to predict how markets will respond to SOFR, SONIA, or other alternative reference rates as the transition away from USD LIBOR and GBP LIBOR proceeds. Despite the LIBOR transition in other markets, benchmark rate methodologies inEurope ,Australia ,Canada ,Switzerland , andDenmark have been reformed and rates such as EURIBOR, STIBOR, BBSY, CDOR, SARON, and CIBOR may persist asInternational Organization of Securities Commissions , or IOSCO, compliant reference rates moving forward. However, multi-rate environments may persist in these markets as regulators and working groups have suggested market participants adopt alternative reference rates.
Critical Accounting Estimates
The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described in our Annual Report on Form 10-K for the year endedDecember 31, 2021 , filed with theSEC onFebruary 28, 2022 , and elsewhere in our filings with theSEC . There have been no material changes in our critical accounting policies and practices.
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