BXSL - Blackstone Secured Lending: The Fed Just Made This 10% Yielding BDC A Strong Buy (Rating Upgrade)
2024-06-14 16:54:13 ET
Summary
- The Federal Reserve said that it only expects to cut rates once in FY 2024, resulting in a higher-for-longer rate world.
- Blackstone Secured Lending therefore benefits from its variable rate loan strategy.
- The dividend has been well-covered with NII. A low non-accrual percentage is a distinguishing feature of BXSL.
- Improved NII prospects and top balance sheet quality justify a rating upgrade, in my opinion.
The Federal Reserve gave an important update about its rate policy on Wednesday and communicated to the market that it expects to only cut the federal fund rate once in FY 2024 as inflation, although moderating, remains above the Fed’s 2% annual inflation goal. This has huge implications for Blackstone Secured Lending ( BXSL ) which is heavily invested in variable rate debt and makes a superior value proposition due to its very low non-accrual percentage. Blackstone Secured Lending is my ‘best bet’ in the BDC sector right now, which relates in part to the company’s variable rate loan investment strategy, but also due to its excellent balance sheet quality!...
Blackstone Secured Lending: The Fed Just Made This 10% Yielding BDC A Strong Buy (Rating Upgrade)