Blackstone Private Credit Fund, a recently launched non-traded business development company sponsored by Blackstone, has declared a monthly net asset value per share for April 2021, as well as a portfolio and market trend update.
As of April 30, 2021, Class I and Class S shares had an NAV per share of $25.59, representing a year-to-date increase of $0.59. The previous month, shares were valued at $25.49 each.
According to the company, the performance was primarily driven by increases in the value of the fund’s assets, undistributed income generated from its portfolio, and by the adviser’s fee waiver.
The fund has declared monthly dividends totaling $0.55 (Class I) and $0.49 (Class S) for the year-to-date period.
Blackstone Private Credit Fund has built a portfolio of $6.9 billion in assets at fair value, with a total NAV of $3.1 billion and $2.6 billion of principal debt outstanding, resulting in a debt-to-equity leverage ratio of approximately 0.82 times.
The portfolio is approximately 98 percent floating rate and 99 percent senior secured, of which 91 percent is first lien.
Blackstone Credit BDC Advisors LLC, the fund’s investment adviser, said that it is “pleased with the early progress of the fund and believes it is well positioned to continue to ramp the fund.”
From a sector standpoint, the adviser continues to seek to invest in “good neighborhoods,” or what it deems as “leading businesses in attractive sectors with favorable tailwinds.” The top sectors that the fund is currently invested in are software, healthcare, building products and professional services.
“Global below-investment grade credit markets started 2021 on a strong note as the rally in risk assets continued,” the company said. “Credit markets continue to experience robust levels of new issuance globally. Default and distressed activity in credit markets continued to improve and research analysts have revised down default expectations for 2021. In April 2021, default activity was low and reflected a sharp decline from the high-yield bond and leveraged loan default rates in April 2020.”
The fund’s adviser believes corporate credit is likely to experience strong demand throughout 2021 as investors continue to search for yield. Compared to high-yield bonds, the adviser believes many characteristics make private credit as an asset class more attractive, including senior secured focus, lower volatility, more diversification, covenants, and floating rate nature.
According to the filing, “the fund seeks to continue partnering with private equity sponsors and portfolio companies to provide them with value-added lending beyond just capital.”
Blackstone Private Credit Fund is the industry’s first perpetual-life BDC, is currently publicly offering $5 billion in shares and raised has raised $4.1 billion, as of April 2021. Additionally, the fund has sold $472.7 million in unregistered shares as part of its private offering.
Blackstone Private Credit Fund broke escrow on January 7, 2021 and is part of Blackstone Credit’s direct lending platform, which provides privately originated, senior secured, floating rate loans to U.S. and European middle market companies. The adviser agreed to waive its management fee and its incentive fee on income for the first six months after the fund broke escrow.