S&P Global Ratings (NYSE: SPGI) has revised its outlook on Blackstone Secured Lending Fund (NYSE: BXSL) from stable to positive, citing strong investment performance and robust liquidity. The agency reaffirmed BXSL’s ‘BBB-’ long-term issuer credit and senior unsecured debt ratings.
Steady Performance and Strong Liquidity
Despite its relatively short operating history, BXSL has maintained consistent financial results, a well-diversified funding structure, and ample liquidity to support its commitments. By the end of 2024, BXSL had $2.4 billion in liquidity, comfortably covering its $1.7 billion in unfunded commitments.
S&P Global Ratings indicated that a ratings upgrade could follow in the next 12-24 months if BXSL continues to maintain strong liquidity, leverage below 1.25x, and stable investment portfolio performance while ensuring consistent funding and financial flexibility.
Affiliation with Blackstone Credit
BXSL benefits significantly from its connection with Blackstone Credit, which provides access to an extensive investment network and enables the fund to compete for large-scale loans in the upper-middle market.
Expanding Investment Portfolio
At the close of 2024, BXSL’s investment portfolio had expanded to $13.2 billion across 276 portfolio companies, a notable increase from $9.9 billion across 196 companies at the end of 2023. The portfolio remains heavily weighted in first-lien debt (98%), with minimal exposure to equity (0.6%), second-lien, and unsecured debt.
BXSL’s investments are diversified across multiple sectors, with software (20%) and healthcare (15%) representing the largest exposures by fair value.
Leverage Remains Within Expectations
BXSL’s leverage, measured as debt to adjusted total equity (ATE), remains within S&P’s expected range and well below the downside threshold of 1.5x. By the end of 2024, leverage stood at 1.14x, up from 0.98x in 2023.
Minimal Credit Risk and Strong Earnings
Nonaccrual loans—those no longer generating interest income—remain low. By the end of 2024, BXSL had five nonaccrual loans across four companies, totaling $37 million at cost. While this marks an increase from 0.01% at year-end 2023, it remains well below the 2.6% average among publicly traded business development companies (BDCs).
BXSL continues to outperform many of its BDC peers, reporting a realized return on average investments of 6.2%, an interest expense coverage ratio of 3.0x, and an interest-and-dividends coverage ratio of 1.1x.
Access to Capital Markets
In February 2025, BXSL successfully raised $500 million in unsecured debt, underscoring its strong access to capital markets. Following this issuance, BXSL’s total outstanding debt reached $7.6 billion, with approximately 58% classified as unsecured.
With a solid financial foundation, a growing portfolio, and a strong affiliation with Blackstone Credit, BXSL appears well-positioned for further growth and potential credit upgrades in the near future.
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