BXSL - Blackstone Secured Lending: This Near 10% Yielding BDC Is Worth Buying On A Pullback

2024-06-03 08:00:00 ET

Summary

• Blackstone Secured Lending has seen its share price appreciate by nearly 23% in the past year, leading to a significant premium to its NAV price.
• BXSL's latest quarter showed a decline in net investment income, but net income increased, and dividend coverage remained solid.
• I think that a pullback in BDC share prices may occur once interest rates decline, and suggest investors to wait for a better entry point.
• Most expect interest rates to decline by September, and if so, BDCs' financials will likely decline as a result of their predominantly floating rate portfolios.
• If history repeats itself, once interest rates decline, BDCs will also see pullbacks in their share prices.

Introduction

I may be one of those who think BDC share prices will fall once interest rates start to decline. Since the start of rate hikes, many have seen their share prices appreciate double-digits, one of those being the externally-managed BDC, Blackstone Secured Lending ( BXSL ), who is up nearly 24% in the past year....

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