Blackstone Secured Lending Fund (NYSE:BXSL) Q3 2023 Earnings Call Transcript

Brad Marshall: No. And some deals are actually being quite competitive and other deals less so. And – but in terms of how deals are ultimately getting priced, I think there is a fair amount of discipline in the market. Again, if a company is taking a turn, turn and a half less leverage, it’s not surprising that spreads for those deals are a little bit lower than what they might have been for a more leveraged structure, I would say kind of the large end of the market, which we tend to like. The public markets just haven’t been open for those deals. So, the deal that Carlos mentioned is $1.6 billion, we were the sole lender. That’s a really good dynamic for us because we can customize a solution for the sponsor and set it up with the right pieces of the capital structure to allow them to grow, contrast that with a $200 million lower middle market deal.

That may be more competitive because there has been a lot of new capital raised by new entrants. They can all write smaller tickets. So, it will really depend on where the deal was created. How it comes to market and the size of that deal.

Mark Hughes: Appreciate it. Thank you.

Operator: We will take our final question from Arren Cyganovich with Citi.

Arren Cyganovich: Thanks. Maybe you can talk a little bit about, conversations with equity sponsors and whether or not you see them kind of starting to accept the different environment we are in, where equity valuations where they maybe previously expected are now down to lower levels and what will necessarily be needed to get folks to that point? Is it just a matter of time and a little less volatility in the market?

Brad Marshall: Yes. Valuation – valuations will come – have to come down. You are seeing that new deals get done. I think they are probably in by two turns in the second-half of the year. So, I think it’s coming through – buyers and sellers will always have a different view. But as you pointed out, the structures of their private equity funds force them a little bit to transact and that will kind of accelerate, the bid ask and get it closer together. I just – I think we are maybe another, three months, six months away from that acceleration picking up. A lot of our deal flow right now Arren, is just coming from our existing portfolio, so coming from our incumbency and not necessarily just from M&A. So, whether it’s on a public deal that we are taking private or whether it’s private companies they are looking for, to do acquisitions versus new platform investments.

That’s what’s driving activity right now. But I do think next year you will see this. You will see the bid-ask come closer together, deal flow will start to accelerate.

Arren Cyganovich: Thank you.

Operator: Thank you. That will conclude our question-and-answer session. I would like to turn the call back over to Ms. Wang for any additional or closing remarks.

Stacy Wang: That would wrap up our call for today. Thank you everyone for joining us and thank you for all the great questions. We look forward to speaking to you next quarter. Thanks everyone.