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BXSL shared even more negative signs that suggest the upcoming dividend cut. Even the management mentioned a transition to lower dividend levels. I expect a dividend reset in 2026, which will likely result in a valuation pullback.

PM Images/DigitalVision via Getty Images

Focus of Article: The focus of PART 1 of this article is to analyze Blackstone Secured Lending's (BXSL) recent results and compare a handful of the company's metrics to 11 business development company ("BDC") peers. This analysis will show past and current data with supporting documentation. Table 1 will compare BXSL's recent net asset value ("NAV") economic return (loss), adjusted net investment income ("NII"), stock price to annualized NII ratio, and percentage of total investment income attributable to capitalized payment-in-kind ("PIK")/deferred interest income to the 11 BDC peers. Table 1 will also provide a premium (discount) to estimated CURRENT NAV analysis using stock prices as of 9/4/2026. Table 2 will compare BXSL's investment portfolio (including several additional metrics) as of 3/31/2026 and 6/30/2026 to the 11 BDC peers.

I am writing this two-part article due to the continued requests that such an analysis be specifically performed on BXSL and some of the company's BDC peers at periodic intervals. These BDC peers include Ares Capital (ARCC), Capital Southwest (CSWC), FS KKR Capital Corp (FSK), Gladstone Investment (GAIN), Golub Capital BDC (GBDC), Main Street Capital Corporation (MAIN), Oaktree Specialty Lending Corporation (OCSL), Blue Owl Capital Corporation (OBDC), SLR Investment Corp. (SLRC), TriplePoint Venture Growth BDC Corp. (TPVG), and Sixth Street Specialty Lending, Inc. (TSLX).

Understanding the characteristics of a company's investment portfolio and operating performance can shed some light on which companies are overvalued or undervalued strictly per a "numbers" analysis. This is not the only data that should be examined to initiate a position within a particular stock/sector. However, I believe this analysis would be a good "starting point" to begin a discussion on the topic. My BUY, SELL, or HOLD recommendation and current price target for BXSL will be in the "Conclusions Drawn" section of the article. This includes providing a list of the BDC stocks I currently believe are undervalued (a buy recommendation), overvalued (a sell recommendation), or appropriately valued (a hold recommendation).

NAV, Economic Return (Loss), Current Premium (Discount) to NAV, and NII Analysis - Overview: Let us start this analysis by getting accustomed to the information provided in Table 1 below. This will be beneficial when explaining how BXSL compares to the company's 11 BDC peers regarding the metrics stated above. Due to the fact several BDC peers listed in Table 1 have a different fiscal year-end, all quarterly results are based on a calendar year-end. For instance, all metrics below are stated as "Q2 2026" even though this does not correspond to every company's fiscal year-end. Readers should be aware as such when the analysis is presented below.

Table 1a + 1b - NAV, Economic Return (Loss), Current Premium (Discount) to NAV, NII, and Capitalized PIK Analysis

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(Source: Table created by me, obtaining historical stock prices from NASDAQ and each company's NAV per share figures from the SEC's EDGAR Database)

Table 1 above provides the following information on BXSL and the 11 BDC peers (see each corresponding column): 1) NAV per share at the end of calendar Q1 2026; 2) NAV per share at the end of calendar Q2 2026; 3) NAV per share change during calendar Q2 2026 (percentage); 4) economic return (loss) (change in NAV and accrued dividend) during calendar Q2 2026 (percentage); 5) economic return (loss) during the trailing 24-months (percentage); 6) my estimated CURRENT NAV per share (NAV as of 9/4/2026); 7) stock price as of 9/4/2026; 8) 9/4/2026 premium (discount) to my estimated CURRENT NAV (percentage); 9) NII (or adjusted NII where applicable) per share during calendar Q2 2026; 10) NII (or adjusted NII where applicable) per share change versus the prior quarter; 11) NII (or adjusted NII where applicable) per share change versus calendar Q2 2025 (monetary amount); 12) NII (or adjusted NII where applicable) per share change versus calendar Q2 2025 (percentage); 13) 9/4/2026 stock price to annualized NII ratio; and 14) percentage of total investment income attributable to capitalized PIK (deferred) interest income during calendar Q2 2026 (percentage).

Now that an overview has been provided, let us start the comparative analysis.

Analysis of BXSL: Using Table 1 above as a reference, BXSL had a NAV of $26.26 per share at the end of calendar Q1 2026. BXSL had a NAV of $25.53 per share at the end of calendar Q2 2026. This calculates to a quarterly NAV decrease of ($0.73) per share, or (2.78%). Some of this modest NAV decrease was directly due to broader credit spread widening, while a portion was directly related to individual portfolio company credit risk during the quarter. This included, but was not limited to, unrealized depreciation within Medallia, Inc. (Medallia), Titan Investment Company, Inc. (Titan), and Paramount Global Surfaces, Inc. (Paramount). All 3 of these portfolio companies were either placed on non-accrual during Q4 2025 or Q1 2026. I correctly projected modest unrealized depreciation occurring within BXSL's investment portfolio during calendar Q2 2026. When including BXSL's quarterly base dividend of $0.77 per share and no special periodic dividend, the company had an economic return (change in NAV and accrued dividends) of $0.04 per share, or 0.15%, for calendar Q2 2026. It should also be noted BXSL had a trailing 24-month economic return of 16.55%. This percentage was slightly below the covered 12 BDC peer average (a slightly negative factor/trend).

BXSL's performance during the past four quarters was mainly attributable to the following three factors: 1) very minor net underpayment of dividends (including special periodic dividends if/when applicable) when compared to the company's NII/adjusted NII; 2) minor-modest net realized loss within several exited/restructured portfolio companies; and 3) modest net unrealized depreciation within the company's active investment portfolio. This is a good transition to the next topic of discussion, an analysis of BXSL's investment portfolio (including several additional metrics) as of 3/31/2026 and 6/30/2026. To begin this analysis, Table 2 is provided below.

Tables 2a + 2b - Investment Portfolio Composition Analysis (Including Several Additional Metrics; 6/30/2026 Versus 3/31/2026)

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(Source: Tables created by me, directly obtaining some figures/percentages from the SEC's EDGAR Database [link provided below Table 1]). All remaining figures/percentages were calculated using data obtained within the SEC's EDGAR Database)

Using Tables 2a and 2b above as a reference, BXSL had 97% and 2% of the company's investment portfolio in senior secured first- and second-lien loans as of 6/30/2026, respectively. As such, these types of loans comprised the vast majority of BXSL's investment portfolio. When compared to the prior quarter, BXSL's percentage of senior secured first- and second-lien loans remained unchanged. BXSL also had less than 1%, 0%, and 1% of the company's investment portfolio in subordinated debt (unsecured loans), collateralized loan obligations ("CLO")/credit-linked notes ("CLN") (structured securitizations) + other, and equity/warrants, respectively. When compared to the prior quarter, BXSL's percentage of subordinated debt (unsecured loans), CLO/CLN (structured securitizations) + other, and equity/warrants remained unchanged as well. As such, there was not a shift in investment portfolio composition during calendar Q2 2026.

I would also point out BXSL's proportion of second-lien loans and subordinated debt is very low when compared to the company's 11 BDC peers. Simply put, this is generally a positive characteristic regarding potential credit risk/recoveries in a recessionary environment (considering general credit hierarchy). I believe BXSL's previously below-average non-accrual percentages were direct evidence of the company's more cautionary strategy regarding capital stack/credit hierarchy. That said, to remain non-bias, there was a short-term "uptick" regarding non-accrual percentages during calendar Q1 2026, which is discussed below.

As of 6/30/2026, BXSL's investment portfolio had a "fair market value ("FMV") versus cost" ratio of 0.9645x. When compared to the 11 other BDC peers within this analysis, this ratio was modestly below the mean of 1.0102x (a negative factor/trend). However, I would point out GAIN's and MAIN's FMV versus cost ratio of 1.2275 and 1.1551 as of 6/30/2026, respectively, "skews" the metric to the upside a bit. When excluding those 2 BDC peers, this ratio becomes 0.9699x, which is very close to BXSL's ratio as of 6/30/2026. When compared to a ratio of 0.9752x as of 3/31/2026, BXSL's ratio slightly decreased during calendar Q2 2026. As noted above, this was mainly the result of unrealized depreciation in various BXSL's portfolio companies (including a majority of software and software-related investments). A more detailed "breakdown" of BXSL's quarterly performance was recently provided to our Investing Group subscribers via a quarterly earnings assessment article.

BXSL had 3.6% and 1.8% of the company's investment portfolio in "non-accrual" status as of 6/30/2026, based on its amortized cost basis and FMV, respectively. When compared to the 11 BDC peers as of 6/30/2026, BXSL's amortized cost and FMV non-accrual percentage were now at - basically at the mean of 3.6% and 1.7%, respectively (now a neutral catalyst/trend). Last quarter was the 1st quarter since BXSL's initial public offering ("IPO") in 2021 that the company's amortized cost and FMV non-accrual percentage were above the BDC covered peer average. This was directly due to BXSL placing ACI Group Holdings, Inc. ("ACI"), Medallia, and Paramount on non-accrual during Q1 2026. ACI's and Medallia's non-accrual was not a surprise. Both portfolio companies were "flagged" for non-accrual during Q1 2026 by my team. However, to remain non-bias, Paramount's non-accrual occurred a bit sooner than anticipated. That said, Paramount was correctly on our "watch list" for several quarters (weekly credit reports/tables are provided on the subscriber side). Specifically regarding Medallia, as noted in the aforementioned BXSL assessment article, this portfolio company's non-accrual/restructuring should not have come as a surprise. This event was projected for nearly 1 year by my team (a future general type of restructuring/non-accrual) and was first spotted, regarding rising credit risk, nearly 2 years ago. BXSL's external management team, a subsidiary of Blackstone (BX), continues to lead Medallia's restructuring, whereas the creditors will see a partial debt-to-equity exchange, with the newly termed debt going back on accrual status. This restructuring has recently been finalized during calendar Q3 2026. Regarding BXSL's non-accrual percentage decline during calendar Q2 2026, creditors completed a partial debt-to-equity restructuring of ACI and DCA Investment Holdings LLC ("DCA") while no new portfolio companies were placed on non-accrual status.

Since the company's initial public offering ("IPO") in 2021, BXSL's investment portfolio as of 6/30/2026 has generated a cumulative realized loss of only ($0.06) per share (when based on a per-share count as of 6/30/2026). BXSL's very minor cumulative realized loss figure was modestly more attractive when compared to the mean loss of ($0.90) per share (a positive catalyst/trend). This includes GAIN's cumulative realized gain of $4.23 per share, which skews this figure to the upside (it would be a larger net loss when excluding GAIN). I believe calculating a BDC's cumulative realized gain (loss) per share amount provides an extremely useful metric when analyzing the long-term performance of management's underwriting abilities, due diligence, expertise, and operational performance. This metric provides direct evidence BXSL's management team has, regarding a majority of instances, continued to find attractive debt/equity investments over a long period of time, which, more times than not, have ultimately delivered attractive risk-adjusted returns. I am the only contributor on Seeking Alpha to provide this specific metric (includes reconciling all necessary cumulative adjustments within this account to provide a "proper/true" per share amount). This holds especially true due to the past Generally Accepted Accounting Principles ("GAAP") disclosure changes regarding equity presentation.

As of 6/30/2026, 0.70% of BXSL's portfolio had debt and equity investments within the oil and gas sector (based on FMV, including certain investments in the energy sector that had "oil and gas" characteristics and/or services closely linked to the sector). When compared to the 11 other BDC peers within this analysis, BXSL's oil and gas exposure was slightly below the mean of 1.64%. When compared to the prior quarter, BXSL's exposure to the oil and gas sector fractionally increased. Even though larger oil and gas companies benefited during most of 2022 from a net increase to commodity prices tied to inflation and the ongoing Russia/Ukraine conflict, I would point out most sector prices largely retraced during late 2022 - 2025. However, with the recent conflict in the Middle East, oil and gas prices sharply increased during 2026 (the largest increase in years). Depending on how long this regional conflict lasts, there will very likely continue to be volatility in pricing (both to the upside and downside as the conflict escalates/winds down). This could temporarily benefit U.S. oil and gas companies. Simply put, dependent upon offsetting/mitigating hedges/forward contracts, smaller/private oil and gas companies could benefit from this recent conflict regarding increased domestic oil and gas production (which would trickle down to several parts of the economy). This could be a short- or long-term event dependent upon many unresolved geopolitical/macroeconomic variables. As such, I would remain a bit cautious considering the ramifications of this specific sector regarding high-yield/speculative-grade credit. That said, on the flip side, sharply higher oil and gas prices will have a direct impact on various facets of the U.S. economy, which could lead to a rise in credit risk outside the oil and gas sector down the road. As is the case in most scenarios, there is usually a "give and take".

As of 6/30/2026, 18.9% of BXSL's portfolio had debt and equity investments within the generalized software (and software-related) sector (based on FMV). When compared to the 11 other BDC peers within this analysis, BXSL's generalized software exposure was slightly above the mean of 15.1%. This is a new sector classification metric I added this quarter due to recent fears/panic regarding underlying portfolio companies within this classification. There continues to be "market jitters" around private credit as a whole (especially around private BDC redemptions) and "AI disruption" risk (specifically software as a service [SaaS] exposure). I continue to believe some fear/speculation is valid regarding AI/disruption risk, but not to the extent regarding how markets reacted in February-early March 2026 ("snowball effect"). This was reiterated by most BDC management teams during calendar Q4 2025, Q1 2026, and Q2 2026 earnings calls. This topic is continuously monitored, tracked, and forecasted on the subscriber side of the service.

Once again using Table 1 as a reference, BXSL reported adjusted NII (which excludes capital gains incentive fees) of $0.747 per share during calendar Q2 2026. I prefer to track/utilize BXSL's adjusted NII metric as opposed to NII (more indicative of net investment company taxable income [ICTI]). When comparing each company's stock price as of 9/4/2026 to its annualized NII (or where applicable, adjusted NII), BXSL had the 3rd lowest ratio at 8.27x. BXSL's annualized adjusted NII ratio was modestly below the 12-peer ratio of 10.10x as of 9/4/2026 (a positive catalyst/trend). Historically speaking, BXSL's price-to-earnings ratio as of 9/4/2026 was attractive/low (a positive catalyst/trend).

During calendar Q2 2026, 6.28% of BXSL's total investment income was attributable to capitalized PIK/deferred interest income. When compared to the 11 other BDC peers within this analysis, this was slightly below the mean of 7.31% (a slightly positive catalyst/trend). I believe it is never a positive catalyst/trend when a BDC has any portion of its accrued income classified as being capitalized/deferred. Simply put, under GAAP, capitalized PIK interest/dividend income is revenue that is currently being "booked" but has not actually been received in cash yet (deferred). In theory/a "perfect world", capitalized PIK interest income is usually paid in cash at the maturity of that particular loan/when a sale occurs. However, in my experience, more times than not, capitalized PIK interest income is a contractual amendment regarding a specific portfolio company that is, at the time, having operational difficulties (which increases the probability of the eventual inability to pay its loan obligations). This especially holds true when a specific debt investment had no capitalized PIK feature at the origination of a particular loan but is currently accruing 100% capitalized PIK interest income due to a loan modification/restructuring.

Simply put, in a majority of cases, it is a "slick" strategy of continuing to record accrued interest income only to write off this capitalized interest income at a later date, usually at loan maturity, by classifying that "lost deferred interest" as a reduction in the debt investment's proceeds (a realized loss) as opposed to lowering previously accrued income by the accumulated capitalized PIK balance. I am not stating this occurs all the time, but certain BDC peers tend to utilize this "phantom income" strategy regularly. In particular, Prospect Capital Corporation (PSEC) has been prone to this strategy to a greater degree over the years versus most other BDC peers within this analysis, which has been pointed out for years (and was one of the reasons I dropped coverage of that BDC back in 2024). As such, it could be the case that capitalized PIK interest income is never "completely" received in cash upon maturity/when a sale occurs. In my professional opinion, if a BDC has a large/above-average portion of its investment income classified/accrued as capitalized PIK interest income, it should be seen as a potential concern regarding future performance/credit quality. In the end, one really just has to go "case-by-case" to determine the overall "viability" of a BDC actually eventually receiving this capitalized PIK/deferred interest income in the future. Something I continually monitor/track in my modeling.

A great recent example of this trend was FSK. This particular BDC peer has been carrying high - very high capitalized PIK/deferred interest income—for quite some time. I previously continued to warn subscribers/readers about this negative factor/trend for a handful of quarters. I also warned of "looming" non-accruals within FSK's investment portfolio. During Q2 2025, Q4 2025, and Q1 2026, FSK placed 4, 5, and 7 new portfolio companies on non-accrual status, respectively. During Q2 2025 and Q1 2026, this included 3 and 6 large - very large portfolio companies that previously had partial/full PIK provisions, respectively. Simply put, this should not have been a notable surprise for market participants. As a direct result, FSK's stock price previously notably declined during the 2nd half of 2025 - early 2026 (I/we had FSK listed as notably overvalued/STRONG SELL prior to the company's Q2 2025 earnings).

As of 9/4/2026, BXSL's stock price traded at $24.72 per share. When calculated, BXSL's stock price was trading at a discount to my estimated CURRENT NAV (NAV as of 9/4/2026; $24.45 per share) of ($0.73) per share, or (2.87%). This was slightly more attractive than the 12-BDC covered peer average of a discount of (1.20%) (a slightly positive catalyst/trend). I continue to believe BXSL should trade at a modest, notable premium to the company's CURRENT NAV. As such, based on my proven valuation methodology over various interest rate/economic cycles, I currently believe BXSL is one of a couple BDC sector peers that is notably undervalued.

Comparison of BXSL's NAV, Economic Return, Valuation, NII, and Other Metrics to 11 BDC Peers in Ranking Order: The REIT Forum Feature

Conclusions Drawn (PART 1): PART 1 of this article has analyzed BXSL and 11 other BDC peers in regard to the following metrics: 1) trailing 24-month economic return (loss) (good indicator of recent overall performance); 2) percentage of investments on non-accrual status as of 6/30/2026 (good indicator of overall portfolio health/credit risk); 3) cumulative gain (loss) per share as of 6/30/2026 (great indicator of long-term performance); 4) current premium (discount) to my estimated CURRENT NAV per share (NAV as of 9/4/2026) (very good indicator of overall valuation); 5) current stock price to annualized NII ratio (good indicator of overall valuation); and 6) percentage of total investment income attributable to capitalized PIK (deferred) interest income (good indicator of overall portfolio health/credit risk).

When compared to the 11 other BDC peers within this analysis, I believe BXSL continues to outperform a majority of the company's BDC peers I currently cover. This includes, but is not limited to, BXSL's attractive adjusted NII per share (though, to remain unbiased, it has net decreased over the prior several quarters [similar to most sector peers]); a modestly more attractive cumulative realized gain (loss) per share amount as of 6/30/2026; a very low exposure to the oil and gas sector (including certain investments in the energy sector that had oil and gas characteristics and/or services closely linked to the sector); a slightly more attractive stock price to annualized adjusted NII ratio; and a slightly below average capitalized PIK/deferred interest income percentage (all positive catalysts/trends). In addition, BXSL is tied for having the lowest management fees out of the externally-managed covered BDC peers at 1.00% of total assets less cash and cash equivalents (along with a "clawback" feature regarding the company's incentive fees). Simply put, this will continue to positively impact shareholders via lower proportionate fees versus most other externally managed BDC-covered peers.

That said, to remain non-bias, this article also highlighted BXSL had an average percentage of investments in non-accrual status as of 6/30/2026 (though it should decline once the Medallia restructuring is complete), a slightly below-average FMV versus cost ratio, a slightly below-average trailing 24-month economic return percentage, and a slightly above-average exposure to the generalized software and software-related sector (cautious - slightly negative factors/trends).

Looking back, I previously correctly identified the very high probability of an increasing BXSL base dividend and/or special periodic dividends during 2022 - 2023. This was mainly due to the U.S. London Interbank Offered Rate (LIBOR)/Standard Overnight Financing Rate ("SOFR")/PRIME very quickly moving past all floors on the asset side of the balance sheet, along with financing outstanding borrowings with longer-term, lower-cost debt on the liability side of the balance sheet, during 2021.

That said, to remain non-bias, during 2024 - 2026, one had/has to continue to monitor the weighted average annualized yield on new loan originations versus exiting debt investments, as there remains a pretty good "lag" in this specific metric. I believe we are close - very close to a "trough"/bottoming pattern regarding this metric. Something I continually track. In addition, I believe the majority of sector earnings peaked during late 2023 - early 2024 (previously "plateaued"). The rapid NII growth that sector peers experienced during 2022 - 2023 simply did not occur during 2024 - the 1st half of 2026 (nor will it occur during the 2nd half of 2026 - 2027). As the FOMC began to reduce the Federal Funds Rate (starting in September 2024), sector earnings GRADUALLY decreased over time. The severity of decreases has varied peer-to-peer (which I continuously project/model). This notion is already embedded in all price targets. Furthermore, credit risk will almost certainly rise (albeit mildly) throughout the sector during 2026 but should begin to slowly ease during 2027.

However, I continue to believe BXSL is better positioned to weather a potential minor-modest recession when compared to most sector peers (as highlighted in the analysis above).

Dividend sustainability will be discussed/analyzed in PART 2 of this sector comparative analysis.

My BUY, SELL, or HOLD Recommendation: From the analysis provided above, including additional factors not discussed within this article (additional metrics covered in PART 2), I currently rate BXSL as a SELL when I believe the company's stock price is trading at or greater than a 17.5% premium to my projected CURRENT NAV (NAV as of 9/4/2026; $24.45 per share), a HOLD when trading at less than a 17.5% premium but greater than a 7.5% premium to my projected CURRENT NAV, and a BUY when trading at or less than a 7.5% premium to my projected CURRENT NAV.

Therefore, with a closing price as of 9/4/2026 of $24.72 per share, I currently rate BXSL as NOTABLY UNDERVALUED from a stock price perspective.

As such, I currently believe BXSL is a STRONG BUY recommendation. My current price target for BXSL is approximately $29.90 per share. This is currently the price where my recommendation would change to a SELL. The current price where my STRONG BUY recommendation would change to a HOLD is approximately $27.35 per share. Put another way, the following are my CURRENT BUY, SELL, or HOLD per share recommendation ranges for BXSL (our Investing Group subscribers get this type of data on all 12 BDC (and 18 mortgage real estate investment trust [mREIT]) stocks I currently cover on a weekly basis):

$29.90 per share or above = SELL (Overvalued)

$27.36 - $29.89 per share = HOLD (Appropriately Valued)

$24.81 - $27.35 per share = BUY (Undervalued)

$24.80 per share or below = STRONG BUY (Notably Undervalued)

BDC Sector Recommendations as of 9/4/2026: Table 10 - Past and Current BDC Recommendations

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(Source: Table created by me, including all past and present recommendations based on data obtained from the SEC's EDGAR Database [link provided below Table 1a])

Table 10 above provides the following information on BXSL and the 11 BDC peers (see each corresponding column): 1) 7/18/2025 BUY, SELL, or HOLD recommendation (pre late summer 2025 sell-off); 2) 10/10/2025 BUY, SELL, or HOLD recommendation (pre fall 2025 rally); and 3) 9/4/2026 BUY, SELL, or HOLD recommendation range, relative to my estimated CURRENT NAV.

I currently have 3 BDCs rated as NOTABLY UNDERVALUED (STRONG BUY), 2 rated as UNDERVALUED (BUY), 5 rated as APPROPRIATELY VALUED (HOLD), 0 rated as OVERVALUED (SELL), and 2 as NOTABLY OVERVALUED (STRONG SELL). Simply put, certainly not as bearish as late 2019 - early 2020 or June - July 2025. I currently believe the sector, as a whole, is appropriately valued - very slightly undervalued. I would just be mindful, knowing high-yield/speculative-grade credit spreads directly impact broader asset valuations. I continue to project a net widening of spreads during the 2nd half of 2026 - mid-2027. This is something I have continued to discuss with subscribers. It's important to understand.

That said, I continue to see very good - great value with BXSL (yes, even considering a projected dividend reduction at some point during 2026 - early 2027, discussed in PART 2).

The analysis performed above does not provide "every" catalyst/factor to consider when choosing a BDC investment. However, I believe this analysis is a good starting point to begin a discussion on the topic. Additional metrics will be analyzed in PART 2 of this article. PART 2 will take a look at BXSL's past and current dividend rates, yields, and other similar metrics and compare the results to the 11 other BDC peers. Several of these metrics have a direct impact on future operations/results as events unfold. This includes dividend projections for all 12 peers for calendar Q4 2026/each applicable company's next set of dividend projections.

My Personal BXSL Past + Current Stock Disclosures: The following are my BXSL past and current stock disclosures and total returns since I have been writing on Seeking Alpha (since 2013):

Table 11 - BXSL Past + Current Stock Disclosures/Returns

The REIT Forum

Source: Taken Directly from the REIT Forum's © Spreadsheets/Data

Final Note: All trades/investments I have performed over the past 10+ years have been disclosed to readers in "real time" (that day at the latest) via Seeking Alpha and, more recently, the "live chat" feature of our Investing Group (which cannot be changed/altered). Beginning in January 2020, I transitioned all my real-time purchase and sale disclosures solely to subscribers of the REIT Forum. All applicable public articles will still have my "main ticker" purchase and sale disclosures (just not real-time alerts). At the end of August 2026, I had an unrealized/realized gain "success rate" of 87.8% and a total return (includes dividends received) success rate of 95.6% out of 90 total past and present mREIT and BDC positions (updated monthly; multiple purchases/sales in one stock count as one overall position until fully closed out). I encourage other Seeking Alpha contributors to provide real-time buy and sell updates for their readers/subscribers, which would ultimately lead to greater transparency/credibility.

Simply put, a contributor's/team's recommendation track record should "count for something" and should always be considered when it comes to credibility/successful investing.

Understanding My/Our Valuation Methodology Regarding mREIT Common and BDC Stocks: The basic "premise" around my/our recommendations in the mREIT common and BDC sectors is value. Regarding operational performance over the long term, there are above average, average, and below-average mREIT and BDC stocks. That said, better-performing mREIT and BDC peers can be expensive to own, as well as being cheap. Just because a well-performing stock outperforms the company's sector peers over the long term, this does not mean this stock should be owned at any price. As with any stock, there is a price range where the valuation is cheap, a price where the valuation is expensive, and a price where the valuation is appropriate. The same holds true with all mREIT common and BDC peers. As such, regarding my/our investing methodology, each mREIT common and BDC peer has their own unique BUY, SELL, or HOLD recommendation range (relative to estimated CURRENT BV/NAV). The better-performing mREITs and BDCs typically have a recommendation range at a premium to BV/NAV (varying percentages based on overall outperformance) and vice versa with the average/underperforming mREITs and BDCs (typically at a discount to estimated CURRENT BV/NAV).

Each company's recommendation range is "pegged" to estimated CURRENT BV/NAV because this way subscribers/readers can track when each mREIT and BDC peer moves within the assigned recommendation ranges (daily if desired). That said, the underlying reasoning why I place each mREIT and BDC recommendation range at a different premium or (discount) to estimated CURRENT BV/NAV is based on roughly 15-20 catalysts, which include both macroeconomic catalysts/factors and company-specific catalysts/factors (both positive and negative). This investing strategy is not for all market participants. For instance, not likely a "good fit" for extremely passive investors. For example, investors holding a position in a particular stock, no matter the price, for, say, a period of 5+ years. However, as shown throughout my articles written here at Seeking Alpha since 2013, in the vast majority of instances I have been able to enhance my personal total returns and/or minimize my personal total losses from specifically implementing this particular investing valuation methodology. I hope this provides some added clarity/understanding for new subscribers/readers regarding my valuation methodology utilized in the mREIT common and BDC sectors.

Each investor's BUY, SELL, or HOLD decision is based on one's risk tolerance, time horizon, and dividend income goals. My personal recommendation will not fit each reader's current investing strategy. The factual information provided within this article is intended to help assist readers when it comes to investing strategies/decisions. Please disregard any minor "cosmetic" typos if/when applicable.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Blackstone Secured Lending Fund has seen NAV per share decline for five consecutive quarters, with the stock trading at a 4% NAV discount. BXSL's portfolio yield stabilized at 9.4%, but portfolio size shrank due to slower originations and higher repayments, pressuring investment income. Non-accrual rates improved sequentially, with Medallia's restructuring set to further reduce non-accruals, with software exposure at 19%.

Blackstone Secured Lending Fund. (BXSL) Q2 2026 Earnings Call August 6, 2026 9:30 AM EDT

Company Participants

Stacy Wang - Head of Stakeholder Relations
Brad Marshall - Global Head of Private Credit Strategies, Chairman & CEO
Teddy Desloge - Chief Financial Officer

Conference Call Participants

Finian O'Shea - Wells Fargo Securities, LLC, Research Division
Richard Shane - JPMorgan Chase & Co, Research Division
Melissa Wedel - UBS Investment Bank, Research Division
Robert Dodd - Raymond James & Associates, Inc., Research Division
Arren Cyganovich - Truist Securities, Inc., Research Division
Kenneth Lee - RBC Capital Markets, Research Division
Paul Johnson - Keefe, Bruyette, & Woods, Inc., Research Division

Presentation

Operator

Good day, and welcome to the Blackstone Secured Lending Second Quarter 2026 Investor Call. Today's call is being recorded. [Operator Instructions].

At this time, I'd like to turn the call over to Stacy Wang, Head of Stakeholder Relations. Please go ahead.

Stacy Wang
Head of Stakeholder Relations

Thank you. Good morning, and welcome to Blackstone Secured Lending Fund Second Quarter Results Conference Call. Joining me today are Brad Marshall, Chief Executive Officer; and Teddy Desloge, Chief Financial Officer, along with other members of the management team available for Q&A, including Carlos Whitaker, President.

Earlier today, we issued a press release with a presentation of our results and filed our 10-Q, both of which are available on the Shareholder Resources section of our website, www.bxsl.com. We will be referring to that presentation throughout today's call. I'd like to remind you that this call may include forward-looking statements, which are uncertain and outside of the firm's control and may differ materially from actual results. We do not undertake any duty to update these statements. For some of the risks that could affect results, please see the Risk Factors section of our Form 10-Q filed earlier today. Audiocast copyright material of Blackstone may not be duplicated without consent.

For the quarter ended June 2026, Blackstone Secured Lending Fund (BXSL - Free Report) reported revenue of $320.47 million, down 7.1% over the same period last year. EPS came in at $0.75, compared to $0.77 in the year-ago quarter.

The reported revenue compares to the Zacks Consensus Estimate of $328.08 million, representing a surprise of -2.32%. The company delivered an EPS surprise of +13.64%, with the consensus EPS estimate being $0.66.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how Blackstone Secured Lending Fund performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Interest income: $298.82 million versus $296.7 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -6.9% change.Fee income: $0.56 million versus the two-analyst average estimate of $1.48 million. The reported number represents a year-over-year change of -62.6%.Payment-in-kind interest income: $21.09 million compared to the $25.58 million average estimate based on two analysts. The reported number represents a change of -4.9% year over year.View all Key Company Metrics for Blackstone Secured Lending Fund here>>>

Shares of Blackstone Secured Lending Fund have returned +1% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Blackstone Secured Lending Fund (BXSL - Free Report) , which belongs to the Zacks Financial - SBIC & Commercial Industry industry.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 1.97%.

For the last reported quarter, Blackstone Secured Lending Fund came out with earnings of $0.77 per share versus the Zacks Consensus Estimate of $0.75 per share, representing a surprise of 2.67%. For the previous quarter, the company was expected to post earnings of $0.79 per share and it actually produced earnings of $0.8 per share, delivering a surprise of 1.27%.

Price and EPS Surprise

For Blackstone Secured Lending Fund, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Blackstone Secured Lending Fund currently has an Earnings ESP of +0.90%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on August 6, 2026.

Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.

Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

NEW YORK--(BUSINESS WIRE)--Blackstone Secured Lending Fund (NYSE: BXSL) (the “Company”) announced today that it will host its second-quarter 2026 investor conference call via public webcast on August 6, 2026 at 9:30 a.m. ET. The Company will report its second-quarter results prior to the call the morning of August 6, 2026. To register for the investor call, please use the following link: https://event.webcasts.com/starthere.jsp?ei=1767729&tp_key=6d012692ae For those unable to listen to the.

Blackstone Secured Lending Fund trades at a 0.91x book value with a 12.9% yield, offering high income and downside protection. BXSL's portfolio is 97.6% first-lien secured debt, diversified across 316 companies, with strong credit ratings and conservative leverage at 1.32x. I maintain a 'Buy' rating on BXSL, citing its fully covered dividend, attractive risk/reward, and Blackstone's ability to pivot toward secular growth sectors.

BDC concept is shown by businessman.

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Stocks are sky-high, but us contrarians are looking for dividend deals. And we found them in one forgotten corner of the Wall Street world. Here, we’re going to bank yields between 11% and 13% from BDCs.

That’s right—up to 13%, for as little as 68 cents on the dollar.

What does that mean? Well, these funds are trading at discounts as large as 32% off their book values.

Where are we looking? We’re talking about business development companies, or BDCs. These are publicly traded firms that lend to mostly privately held companies—small and medium-sized businesses.

The BDC business itself can be a bit of a cardiac kid. It’s all about getting paid back on these loans. The smart lenders can do very well over time. The sector is so potentially lucrative that it attracts some less-than-ideal managers—hence a bit of a shady reputation.

But in these shadows is where we can find value.

2026 has been rough sledding for BDCs. There have been fears about the creditworthiness of the loans they’ve extended. It’s come to fruition—about one in four companies in the non-penny-stock BDC world have cut their dividends over the past few months.

MORE FOR YOU

Ugly, ugly, ugly.

So why are we diving in this dumpster for dividends? Well, we’ve got three reasons to be intrigued.

BDCs tend to own floating-rate debt, which means their income rises as short-term rates move up. And inversely, it drops as rates drop. High oil prices have put Federal Reserve rate cuts on hold indefinitely, and this has helped stabilize BDC income. Even after the dividend cuts we’ve seen, BDCs still remain one of the top sources of income for dividend investors. I mean, come on—where can we find yields like these?Hey—these stocks are rarely this cheap. Industry valuations haven’t been this low since COVID. As contrarian investors, we are stepping in to sort through the wreckage.So let’s talk about these dividend payers, dishing between 11.8% and 13% yields. We are looking for values here, not falling dividend knives, so these details matter.

Cheap BDCs #1: Nuveen Churchill Direct Lending Corp (NCDL)Investing in business development companies often means hitching our wagons to the market’s most prominent asset managers. Take, for instance, Nuveen Churchill Direct Lending Corp. (NCDL), which bears the name of both fund manager Nuveen (the asset manager for TIAA) and BDC manager Churchill, a Nuveen affiliate.

NCDL targets U.S. middle-market companies backed by private equity sponsors. It’s currently invested in 236 companies across 26 industries, with significant bents toward healthcare/pharmaceuticals and business services. It spreads out risk well, too—its top 10 holdings make up just 13% of the portfolio’s weight.

Nuveen’s BDC does most of its financing via first-lien debt, and the lion’s share of that is floating-rate in nature—helpful in that higher interest rates can boost loan income, though they can also drive down loan demand.

Nuveen Churchill Direct Lending has less than three years’ worth of trading under its belt, most of it just pinballing up and down. And because we’re in the midst of one of its sharp downturns, we can buy it for a cavernous 26% discount to its net asset value (NAV).

But what would we be buying?

A big dividend, sure—but one that’s been quietly shrinking since NCDL first hit the market. The 45-cent quarterly with a 10-cent supplemental on top? Gone. The supplemental dried up first. Then this year, the base got cut to 36 cents, with a 4-cent top-up thrown in as a consolation. Then that supplemental shrank to 2 cents in Q2.

NCDL Dividend

Ycharts

What makes the underperformance and dividend difficulties surprising is that NCDL at least appears to be a solid operator. Non-accruals grew in the most recent quarter, but at just 1.3% of the portfolio at cost, so credit quality is excellent. (Non-accruals are loans that are delinquent for a prolonged period, usually 90 days.) It has a favorable fee structure thanks to waivers. Management is conservative and steeped in private-credit experience. Software exposure is low.

Patient investors might eventually be rewarded. Until then, Nuveen’s BDC clearly isn’t treating the dividend with kid gloves.

Cheap BDCs #2: Blackstone Secured Lending Fund (BXSL)Blackstone Secured Lending Fund (BXSL) leans on the rich resources of Blackstone (BX) and its Blackstone Credit & Insurance arm. And that brings up another important aspect of many BDCs: They’re not just lenders and stakeholders. BXSL’s 316 portfolio companies also enjoy the expertise and operational support of one of the world’s largest alternative credit platforms—and Blackstone Credit & Insurance doesn’t claw fees away from the BDC for the privilege.

Blackstone’s BDC deals almost entirely in floating-rate first-lien debt. It likes larger companies in sectors with historically lower default rates. It’s plenty diversified, too, with its top holdings making up less than 20% of assets.

However, while the portfolio is spread across nearly 40 industries, that top industry is a red flag.

BXSL took a big step back in Q1. Non-accruals jumped to 4.7% at cost, while its net asset value declined by more than 2% quarter-over-quarter.

Every other BDC seems to be hacking its dividend. Blackstone Secured Lending Fund’s has held at 77 cents. But it might just be late to the wake: Net investment income (NII) covered the payout this quarter, yet full-year 2026 and 2027 estimates are sliding toward levels that can’t sustain it.

Shares have lost 20% of their value since July 2025, which has plumped up its static dividend to a yield of nearly 13%. But deterioration in net asset value has kept BXSL from falling into deep value territory—it currently trades at a decent 9% discount to NAV.

Cheap BDCs #3: Carlyle Secured Lending (CGBD)Carlyle Secured Lending (CGBD) is yet another double-digit-paying BDC tethered to a well-known asset manager: Carlyle Group (CG). It invests in middle-market companies sponsored by PE. And its preferred deal type is floating-rate first-lien debt.

But CGBD stands out for a much tighter portfolio of just 60 companies. And its financing is more spread out—first-lien debt makes up less than 85% of fair value; it also has mid-single-digit exposure to second-lien debt, equity investments and investment funds.

Around this time last year, I wrote that CGBD’s first half of 2025 was a “train wreck.” It had just put together back-to-back earnings disappointments, experienced rising non-accruals, and failed to issue a supplemental dividend for the first time in years.

Since then? Some ups, and some downs.

The distribution was pared down even more. After a couple quarters of keeping the dividend level, CGBD in April announced a 12.5% cut to 35 cents per share.

But the company has been putting together more promising results. While CGBD’s NAV declined by more than 2% during the first quarter, NII beat estimates, and non-accruals declined to just 1% of cost after portfolio company Alpine restructured its balance sheet. Carlyle Secured Lending also has a pair of joint ventures—Middle Market Credit Fund (MMCF) and Structured Credit Partners (SCP)—that are continuing to ramp.

When I looked at Carlyle Secured Lending in mid-2025, it had been greatly underperforming other BDCs for months. It has continued to decline since then, but its red ink has been more in line with the industry. Still, that has dragged CGBD’s price down to a 32% discount to NAV, putting this Carlyle vehicle in the cheapest third of traded BDCs.

Cheap BDCs #4: Barings BDC (BBDC)Barings BDC (BBDC) hasn’t always been tied up with manager Barings LLC. It was known as “Triangle Capital” for many years until August 2018, when the company rebranded, trying to put years of write-offs and dividend cuts in the rear-view mirror.

It wasn’t just a brand refresh, either. The new name reflected its new relationship with global financial services firm Barings, which became an external advisor and went to work cutting out the portfolio’s rot.

Today, Barings invests primarily in middle market companies owned by PE, though about 5%-15% of its investments are “non-sponsored” upper-middle-market and opportunistic middle-market deals, and another 5%-10% is exposure to Eclipse Business Capital and Rocade Capital—originators of middle market first-lien loans. BBDC has the lowest exposure to first-lien debt of the group, at just 70%. Roughly 20% of its deal mix is in equity, and the rest is scattered among second-lien and mezzanine debt, as well as other financing options.

Last year, I was encouraged by a string of small quarterly supplementals—the company hadn’t made “top-up” specials in a decade. They didn’t last, but the regular dividend has remained intact, powering a 12%-plus yield.

But that yield might have a clock on it. Earnings are pacing below the dividend, and the math only works as long as spillover earnings can bridge the gap.

One helpful development just popped up about a week ago. Barings BDC terminated a credit support agreement, which will result in a $67 million payout by the end of the month—money the company can use to fund additional investments.

And while BBDC has been a source of relative strength in 2026, down just a few percent versus double-digit declines for the BDC industry, it’s still dirt-cheap. This mega-payer currently trades at a 23% discount to NAV.

Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: Your Early Retirement Portfolio: Huge Dividends—Every Month—Forever.

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NEW YORK--(BUSINESS WIRE)--Blackstone Secured Lending Fund (NYSE: BXSL) (the “Company”) announced today that it will host its first-quarter 2026 investor conference call via public webcast on May 7, 2026 at 9:30 a.m. ET. The Company will report its first-quarter results prior to the call the morning of May 7, 2026.

To register for the investor call, please use the following link: https://event.webcasts.com/starthere.jsp?ei=1759712&tp_key=af0b41e04f

For those unable to listen to the live broadcast, there will be a webcast replay on the Shareholders section of Blackstone Secured Lending’s website at https://ir.bxsl.com.

About Blackstone Secured Lending Fund

Blackstone Secured Lending Fund (NYSE: BXSL) is a specialty finance company that invests primarily in the debt of private U.S. companies. As of December 31, 2025, BXSL’s fair value of investments was approximately $14.2 billion. BXSL has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. BXSL is externally managed by Blackstone Private Credit Strategies LLC, an SEC-registered investment adviser that is an affiliate of Blackstone Inc. Blackstone Inc., together with its subsidiaries, is the world’s largest alternative investment firm with $1.3 trillion of assets under management as of December 31, 2025.

Forward-Looking Statements and Other Matters

Certain information contained in this communication constitutes “forward-looking statements.” These forward-looking statements can be identified by the use of forward-looking terminology, such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “can,” “could,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”, “confident,” “conviction,” “identified” or the negative versions of these words or other comparable words thereof. These may include BXSL’s financial estimates and their underlying assumptions, statements about plans, statements regarding pending transactions, objectives and expectations with respect to future operations, statements regarding future performance, statements regarding economic and market trends and statements regarding identified but not yet closed investments. Such forward‐looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. BXSL believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its prospectus and annual report for the most recent fiscal year, and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or BXSL’s prospectus and other filings). Except as otherwise required by federal securities laws, BXSL undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

More News From Blackstone Secured Lending Fund

Back to Newsroom

NEW YORK--(BUSINESS WIRE)--Blackstone Secured Lending Fund (NYSE: BXSL or the “Company”) today reported its first-quarter 2026 results.

Brad Marshall, Co-Chief Executive Officer of Blackstone Secured Lending Fund, said, “BXSL reported another strong quarter despite recent market volatility, with net investment income per share fully covering our dividend per share of $0.77, representing an 11.7% annualized dividend yield on NAV of $26.26 per share. New investment activity was nearly $325 million while repayments grew to nearly $450 million. While non-accruals increased during the quarter from historically low levels, our portfolio of primarily first-lien senior secured debt remains well positioned, underpinned by high single-digit percent LTM EBITDA growth across our borrowers and stable interest coverage ratios of 2.0x. Overall, we believe performance continues to be supported by high current income, senior positioning with strong documentation protection, and proactive portfolio management.”

Blackstone Secured Lending Fund issued a full detailed presentation of its first quarter 2026 results, which can be viewed at www.bxsl.com.

Dividend Declaration

The Company's Board of Trustees has declared a second quarter 2026 dividend of $0.77 per share to shareholders of record as of June 30, 2026, payable on or about July 24, 2026.

Quarterly Investor Call Details

Blackstone Secured Lending Fund will host its conference call today at 9:30 a.m. ET to discuss results. To register for the webcast, please use the following link: https://event.webcasts.com/starthere.jsp?ei=1759712&tp_key=af0b41e04f

For those unable to listen to the live broadcast, there will be a webcast replay on the Shareholders section of BXSL’s website at https://ir.bxsl.com.

About Blackstone Secured Lending Fund

Blackstone Secured Lending Fund (NYSE: BXSL) is a specialty finance company that invests primarily in the debt of private U.S. companies. As of March 31, 2026, BXSL’s fair value of investments was approximately $13.9 billion. BXSL has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. BXSL is externally managed by Blackstone Private Credit Strategies LLC, an SEC-registered investment adviser that is an affiliate of Blackstone Inc. Blackstone Inc., together with its subsidiaries, is the world’s largest alternative investment firm with over $1.3 trillion of assets under management as of March 31, 2026.

Forward-Looking Statements and Other Matters

Certain information contained in this communication constitutes “forward-looking statements.” These forward-looking statements can be identified by the use of forward-looking terminology, such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “can,” “could,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates”, “opportunity,” “leads,” “forecast,” “possible,” “confident,” “conviction,” “identified” or the negative versions of these words or other comparable words thereof. These may include BXSL’s financial estimates and their underlying assumptions, statements about plans, statements regarding pending transactions, objectives and expectations with respect to future operations, statements regarding future performance, statements regarding economic and market trends and statements regarding identified but not yet closed investments. Such forward‐looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. BXSL believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its prospectus and annual report for the most recent fiscal year, and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or BXSL’s prospectus and other filings). The forward-looking statements speak only as of the date of this report. Except as otherwise required by federal securities laws, BXSL undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

Blackstone Secured Lending offers a high 12.7% yield backed by a conservative portfolio and Blackstone's proven credit expertise. BXSL also trades at a substantial discount to NAV. However, the recent jump in non-accruals and looming AI disruption risk are putting a fresh spotlight on the sustainability of the dividend.

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Blackstone Secured Lending faces mounting risks with sequential declines in net investment income and NAV and a sharp rise in non-accruals. BXSL's dividend coverage dropped to 100%, and non-accruals surged from 0.6% to 4.7%, signaling deteriorating credit quality. Despite a 12.6% yield and 7.3% NAV discount, I see no near-term catalysts and expect a potential 9–10% dividend cut before year-end.

An annual income target of approximately $50,400, or $4,200 per month, is a reasonable goal for a single 64-year-old retiree who wants investment income to carry most of the load before Social Security benefits begin. In that scenario, Social Security eventually becomes a supplement to retirement income rather than its primary source. The key question is how much capital is required to generate that level of income and what tradeoffs come with different portfolio strategies.

The answer varies dramatically based on portfolio yield. At a 3.5% yield, which is typical of many broad dividend-growth funds, generating $50,400 annually would require roughly $1.44 million invested ($50,400 ÷ 0.035). At a 6% yield, a range often associated with preferred-stock ETFs, REITs, and covered-call funds, the required portfolio falls to about $840,000 ($50,400 ÷ 0.06). At an 8.06% blended yield, consistent with the three-sleeve portfolio examined below, the same income target would require approximately $625,000 invested ($50,400 ÷ 0.0806).

The difference is substantial. The higher-yield approach requires about 57% less capital than the dividend-growth strategy. However, that reduction comes with tradeoffs, including greater sensitivity to market conditions, potential pressure on principal values, and less emphasis on long-term dividend growth. The comparison illustrates the ongoing balance between income generation and capital preservation in retirement planning.

Three BDCs, Three Different Jobs Each sleeve is a publicly traded business development company. BDCs lend to middle-market borrowers, mostly first-lien senior secured floating-rate debt, and pass nearly all taxable income through as distributions. The three together diversify by manager, borrower size, and payment cadence.

Ares Capital, 40% ($250,000). Ares Capital (NASDAQ:ARCC | ARCC Price Prediction) is the largest publicly traded BDC, with a $13.6 billion market cap and a portfolio of 603 companies. The dividend has held at $0.48 per quarter for eight straight quarters, and Q1 2026 net investment income of $0.55 per share cleared it with cushion. At the recent price near $19, the yield runs about 10%, producing roughly $25,000 a year on this slice.

Main Street Capital, 30% ($187,500). Main Street Capital (NYSE:MAIN) pays monthly. The regular distribution is $0.26 per share, with a $0.30 quarterly supplemental on top. Its lower-middle-market focus has let book value grind higher to $33.46 per share while it distributes, which is rare in this corner of credit. The stock trades at a premium, so the base yield runs near 6%; supplementals push the all-in closer to 8%. Call it $13,500 of base income before extras.

Blackstone Secured Lending, 30% ($187,500). Blackstone Secured Lending (NYSE:BXSL) sits at the high end of the BDC yield spectrum at 13%, with the book 97.6% first-lien senior secured and 95.8% floating rate. Q1 2026 NII of $0.77 per share covered the $0.77 quarterly dividend exactly, with no margin. That tight coverage, plus non-accruals jumping to 3.1% at fair value from 0.6% the prior quarter, is the headline risk. This sleeve still throws off about $24,000 a year.

Run the three together and the gross income lands above $50,400. The $4,200 monthly figure is set deliberately below the run-rate to absorb the things that go wrong in high-yield credit: distribution trims, NAV slippage, and the occasional skipped supplemental.

What You Are Trading Away Ares Capital’s NAV slipped from $19.94 to $19.59 in a single quarter. Blackstone Secured Lending’s portfolio yield compressed from 10.2% to 9.3% over the past year, with new investments going on at just 7.7%. The 10-year Treasury pays 4.5%, so the spread you collect is real, and so is the credit risk that funds it.

The point most readers miss: a 3.5% dividend-growth portfolio that compounds payouts 8% a year doubles the income in nine years. A 10% portfolio with flat or compressing distributions stays flat and may fade. On a $50,400 starting income, the dividend-growth path crosses $100,000 in year nine without adding a dollar of new capital. The BDC sleeve might still be paying $50,400, on a smaller asset base.

Three Moves Before You Build This Hold a six-month cash buffer. Roughly $25,000 in a money-market fund lets you ride out a quarter or two of distribution cuts without selling shares at a discount to NAV. Plan for ordinary-income tax treatment. BDC distributions are mostly taxed as ordinary income at your marginal rate. In the 24% bracket, $50,400 gross is closer to $38,000 after federal tax. Model the after-tax number before sizing the portfolio. Re-underwrite each January. Pull the latest non-accrual rate, NII coverage, and NAV move for each name. If coverage at any sleeve drops below 100% for two straight quarters, trim it and redirect into a sleeve where coverage is intact.