BXSL Q2 2025 Update: Solid Quarter
BXSL Quick Quarterly Update (June 30, 2025)
Target Prices: No change. I will reassess after updating the watch list and dividend projections, taking into account guidance from management on the earnings call.
Earnings: Reported just above its base case projections, mostly due to much higher-than-expected portfolio yield (which increased from 10.1% to 10.2% at cost), partially offset by much lower prepayment-related income. As shown below, there were repayments of only $175 million (compared to $923 million during Q1 2025). PIK income increased slightly, but has declined from 7% to 6% of total income over the last four quarters.
Leverage (debt-to-equity): Increased from 1.03 to 1.09 (excluding $274 million of cash) due to lower repayments and $530 million of new investments, partially offset by issuing 2 million shares at a 14% premium to NAV per share during Q2 2025.
Dividends: Reaffirmed its quarterly dividend of $0.77 per share for Q3 2025, as expected. BXSL does not have a supplemental distribution program/formula to pay out excess earnings and will likely retain as much as possible (similar to ARCC).
NAV Per Share: Decreased by $0.06 (from $27.39 to $27.33) due to net unrealized losses of $0.09 per share, mostly from watch list investments, partially offset by $0.03 per share accretion from issuing shares at a 14% premium to NAV.
Credit Quality: Non-accruals remain low at 0.1% of the portfolio fair value, and no new investments were added during Q2 2025.
This information will be discussed in the updated BXSL Deep Dive Projection report along with updated projections, target prices, and watch list investments.
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