Blackstone Secured Lending Fund

The stable outlook reflects our expectation that in the next 12-24 months--despite challenging macroeconomic conditions--BXSL will continue to report stable asset quality while maintaining its debt to ATE at 1.0x-1.25x. Our outlook also considers the company's modest investment concentration, diversified funding mix, and adequate cushion to its regulatory 150% asset coverage requirement. We could lower the ratings in the next 12-24 months if: Leverage rises above 1.5x on a sustained basis; Asset coverage ratio declines to 165%; Asset quality worsens; or Liquidity becomes strained due to draws on unfunded commitments. An upgrade is unlikely over the next 12-24 months. In the longer term, we could raise the ratings if operating performance and asset quality are favorable relative to peer business

...The company's leverage, measured as debt to ATE, is marginally above our base-case expectation. S&P Global Ratings' measured debt to ATE for the company as of March 31, 2023, was 1.3x, which is above our base-case expectation of 1.0x-1.25x, but still below our downside threshold of 1.5x. Blackstone Secured Lending Fund's (BXSL) measurement of its leverage ratio (net debt to equity) was 1.28x, slightly above management's target of 1.25x. BXSL's lack of an operating track record through a credit cycle is partly offset by the broader capabilities of the Blackstone Credit platform. The company began operating in 2018, and lacks an operating track record through a credit cycle. However, we think BXSL benefits from the access to the Blackstone Credit platform, its diversified funding mix, and its experienced management team....

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