Thank you for standing by. You're on hold for the Blackstone Secured Lending Fund Third Quarter 2025 Investor Call. At this time, we're gathering additional participants and should be underway shortly. We appreciate your patience and ask that you continue to hold. Please stand by. The conference will begin shortly. Good day and welcome to the Blackstone Secured Lending Fund third quarter 2025 investor call. Today's call is being recorded. At this time, all participants are in a listen-only mode. If you require operator assistance, please press star zero. If you'd like to ask a question, please signal by pressing star one. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. At this time, I'd like to turn the conference over to Stacy Wong, Head of Stakeholder Relations. Please go ahead. Thank you, Katie. Good morning and welcome to Blackstone Secured Lending Fund's Third Quarter Conference Call. Joining me today are Brad Marshall, Co-Chief Executive Officer; Jonathan Bock, Co-Chief Executive Officer; Carlos Whitaker, President; Teddy Desloge, Chief Financial Officer; and other members of the management team. 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 factor section of our form 10-Q filed earlier today. This audio cast is copyright material of Blackstone and may not be duplicated without consent. With that, I'll turn the call over to Brad Marshall. Great. Thank you, Stacy, and thanks for joining our third quarter earnings call. I will begin with some thoughts on the current environment and our views heading into year-end. Last quarter, we addressed the positive trends re-emerging with markets opening back up, equities hitting all-time highs, and inflation staying muted. Now, we believe we can keep capitalizing on a few key themes that may continue to yield returns for our investors. Firstly, deal activity has continued to accelerate, which is consistent with what we have seen in past periods when cost of capital starts to come down and valuations improve. In part, as a result of increased deal activity, leverage in BXSL ended at 1.22x after averaging close to 1.15x for the quarter. Secondly, despite falling base rates during the quarter, we saw new deals at an average spread of 544 basis points over the base rate, inclusive of amortization of OID to maturity, and total fundings during the quarter averaging 556 basis points above the base rate, the majority of each of which were first-lien. Lastly, overall, we saw stable underlying fundamentals and growth in our portfolio, with the majority of the assets flat or marked higher on the quarter. Non-accruals dropped to 0.1% at cost, remaining the lowest among our traded BDC peers. Despite all these positive trends, there have been external narratives around bubbles and rising default across the credit markets. What we are seeing on the ground and across over 300 credits we are invested in is in direct contrast. Firstly, as mentioned earlier, M&A activity is picking up. In fact, as of the third quarter, it is up 63% year- over- year, consistent with what we discussed with all of you regarding our expectations at the start of the year. With more companies choosing to fund this M&A with private capital, this has helped our ongoing growth. Further, there was about five times more dry powder in North America private equity vehicles than private credit origination dry powder, representing a healthy potential backlog of demand for private credit solutions. As it relates to defaults, and in particular, First Brands and Tricolor, I think it is reasonably well established now that these were, in fact, not private credit transactions. They were bank-originated, bank-underwritten, and bank-distributed deals. However, it's worth noting two things. One, defaults are, in fact, declining in the leveraged loan and high-yield market, down 37% year-to-date this year from 2023 and 24% from 2024, demonstrating that despite well-publicized defaults, the default trends in the indices have improved. Second, defaults do occur from time to time across both the public and private markets. Knowing this is why we have continued to feel very confident in our approach to investing by focusing on first-lien senior secured loans with large sponsor-backed companies across sectors we believe have good long-term tailwinds. In our view, these companies are better able to navigate market changes, inclusive of the fast pace of change driven by AI. These companies are generally more strategic because of their scale. These companies tend to attract and maintain high-quality management teams and ownership groups. Our experience is supportive of this thesis. In direct lending, BXEI has experienced annualized realized losses of only one-tenth of 1%, including to the global financial crisis. Being part of Blackstone allows us to navigate and leverage the full bandwidth of the firm to maximize value in the event of default, which is something we are quite proud of. As we put all of that together and what we view going forward, we expect to see deal activity staying active, asset turnover picking up, spreads remaining attractive when compared to traditional fixed incomes, and credit quality remaining fairly steady across the portfolio. Turning to slide four to highlight this, BXSL reported another strong quarter with our net investment income, or NII, of $0.82 per share, representing a 12% annualized return on equity, made up overwhelmingly of interest income rather than income from PIC or dividends or fees. We believe the quality of BXSL's income has historically created a robust income stream for our investors. NAV per share decreased by $0.18 quarter- over- quarter to $27.15 due to markdowns that Teddy will discuss shortly. Our distribution of $0.77 per share was 106% covered by our net investment income per share and represents an 11.3% annualized distribution yield, one of the highest among those of our traded BDC peers with similar levels of first-lien senior secured assets. Finally, as mentioned earlier, we believe credit quality remains strong, 0.1% of investments are non-accrual at both cost and fair market value. We had no new names added to the non-accrual list this quarter. Moving to slide five, we have continued to prepare ourselves for what we believe may be a period of heightened deal activity, focusing both on our existing portfolio companies and new assets. Despite lower base rates, private credit premium relative to leveraged loans in the liquid market has endured. We collaborate with teams across the firm to identify new opportunities and key investment trends. Right now, we believe we are in a re-industrialization with AI that will require significant ongoing insights and capital solutions. You will hear from Carlos on this later. We integrate AI considerations into our disciplined investment process, searching for larger businesses, mission-critical products, high recurring revenue, and senior secured positions. We believe we are well-resourced to understand and underwrite the fast-paced change that AI is driving and the impact this will have on companies and investments. We saw a 20% increase in new BXEI global private deal screenings this past quarter versus the third quarter of last year. While not every BXEI deal that comes through BXEI screening is suitable for investments by BXSL, this is consistent with our general view from last year that deal activity would pick up meaningfully throughout 2025. Deployment for the quarter surpassed $1 billion and was up 90% compared to the second quarter. We believe the drivers of this growth are both more macro clarity for the U.S. economy and lower base rates. We seek to continue our disciplined approach and use our cost advantage to focus on quality borrows, not reach for risk, and deliver returns for our shareholders. With that, I will pass it over to my colleague, Jonathan. Thank you, Brad. Let's turn to slide six. We ended the quarter with $13.8 billion of investments at fair value, over a 15% increase year-over-year from $12 billion. In 3Q alone, BXSL also added 22 new borrowers to our portfolio by exiting six positions, netting a total of 311 companies. Ending leverage and average leverage kicked up compared to prior quarter at 1.22x and 1.15x, respectively, remaining in our target range between 1-1.25x. Our weighted average yield on performing debt investments at fair value was 10% this quarter, down from 10.2% last quarter. The yields on new debt investment fundings and assets sold and repaid during the quarter averaged 9.3% and 9.9%, respectively. Now, turn to slide seven. Nearly 98% of BXSL investments are in first-lien, senior secured loans, and nearly 99% of those are to companies owned by financial sponsors that generally have significant equity value in these capital structures, demonstrated by an average loan-to-value of 49.7%. Our portfolio also has LTM EBITDA base averaging nearly $221 million, with year-over-year EBITDA growth of nearly 9%. This growth percentage is well above that of companies in the Lincoln International Private Markets database for last quarter. Although we've evaluated opportunities across the size spectrum, as evidenced by our investment this year, we've seen continued strength of performance from larger companies relative to their smaller EBITDA counterparts in terms of higher growth and lower defaults. We believe this trend may continue given the Fed's latest rate cut announcement. We can see how investing in larger companies affects interest coverage. BXSL's portfolio companies' average interest coverage based on LTM EBITDA was two times in 3Q. Looking at the share of private portfolio assets below one times interest coverage, when you exclude recurring revenue loans, BXSL is at 7% of fair value, which compares favorably to the Lincoln data base for the broader private credit market at 10%. Now, turn to slide eight, which focuses on our industry exposure. Recall, we focused on domestic businesses in less capital-intensive sectors with our highest exposures in the software, healthcare providers and services, and professional services industries. This quarter, 99% of the private debt investments into new portfolio companies were first-lien senior secured positions with average LTVs below 45%, meaning there is a significant amount of capital beneath our loans. Our relentless focus on first-lien, senior secured debt in historically low default-rate industries is what we view as a defensive position for investors to be in. How does that translate into returns? Over the last 12 months, we generated a 12% net investment income return. This was well above our 11.3% dividend yield on NAV during the same time period and above the weighted average NII return of 10.7% for our traded BDC peers for the 12 months into June 30, 2025. Importantly, we've continued over-earning our distribution even in a more competitive, tighter spread environment. Further, we believe dispersion among managers continues to be evident. You can see this by looking at various portfolio metrics compared to the weighted average of our traded BDC peers in 2Q. Our non-accrual rates of 0.1% at cost compares favorably to 2.9% for peers. Our PIC, as a percentage of total investment income at 8.2%, compares favorably to 11.3% for peers. Our stressed debt investments marked below 80 at cost is approximately 0.9% compared to 4.1% for the peer average. I will conclude with some points on our documents and recent amendment activity. As a reminder, when we negotiate our credit agreements, especially as a leading lender, we place a significant focus on control and important document protections. We have remained consistent in this approach. If you take a look at our recent amendments, Q3 was largely similar to Q2 activity with the majority of amendments associated with add-ons, M&A, DDTL extensions, and immaterial technical matters or slight changes to terms. With that, I will turn it over to my colleague, Carlos. Thanks, John. Turn to slide nine. BXSL maintained its dividend distribution of $0.77 per share as we remain focused on delivering high-quality yield to shareholders. We continue to believe BXSL's portfolio strength is owed to the scale and platform of Blackstone and BXEI. We have used this to our advantage as we have expanded our book. Take, for instance, our view on AI. Blackstone made an early call on the importance of AI, and we believe BXEI has been at the forefront of adapting this into our portfolio. We consider AI as we evaluate investments and use Blackstone resources, including Blackstone Technology Investments, the Blackstone Operating Team, and Blackstone Data Science to help evaluate AI-related opportunities and support portfolio companies in adapting to change. While BXSL has a larger concentration in software than other industries, our AI lens expands to our investments in healthcare technology, healthcare services, professional services, business services, and insurance. In the current landscape, there are AI verticals that we believe have definitive headwinds that investors should be mindful of. We believe that in most instances, larger companies may be better positioned to defend and leverage AI. We also believe that there are tailwinds that may impact secondary beneficiaries of AI technology expansion, such as cybersecurity and data infrastructure and management. It is worth noting we aim to avoid verticals that we believe may be at higher risk of disruption, such as low-skill outsourced services or businesses centered around content creation, such as ad tech or ed tech, of which BXSL has mid-single-digit percentage exposure in its portfolio. In addition, we try to avoid industries that are more cyclical in nature. If we just look at BXSL's software portfolio, our investments average over $4 billion in enterprise value and are well-capitalized with significant equity cushion. These companies are growing EBITDA annually at what we believe are healthy levels with weighted average interest coverage ratios near two times. These numbers do not come by accident. Blackstone aims to identify trends and related downstream investments early before they become mainstream. While we work to expand the portfolio through new borrowers, we have remained active with existing companies that we believe are quality assets. We saw deal activity pick up across the private credit landscape. To Brad's point, we were active on the deployment front. Q3 marked our most active quarter in 2025 from a funding perspective, with net deployment up 65% and gross deployment up 90% quarter- over- quarter. We believe much of this was driven by BXSL's access to incumbent borrowers across our 5,100 BXEI issuers globally. Just this quarter, nearly 2/3s of BXSL's fundings were to repeat borrowers of BXEI. In fact, we had sole or lead roles in nearly three-fourths of our debt investment fundings for the quarter. The majority of those were sourced from our liquids business, advisor networks, and our long-standing relationships. Certain sponsors prefer to work with BXEI when their portfolio companies need capital due to what we believe is a largely differentiated credit franchise in a market. BXSL's largest third-quarter investment into a new portfolio company was a large debt financing for a global specialty consulting firm. We were the sole lender in the financing and provided the company committed capital to execute on future growth plans. We believe that owners like to partner with BXEI not just because of the scale solutions we can provide, but also because of the services we can offer after the investment. Our value creation team was extremely active during the third quarter and had some impactful wins with improving earnings for our portfolio companies. Just looking at the data available through the second quarter, the BXEI value creation program offered at no charge to participants or expense to BXSL has created $5 billion in illustrative value and reduced costs by over $440 million for BXEI portfolio companies since its inception. We can differentiate ourselves as not just a lender, but as a value-added partner, helping credits grow equity value through our BXEI value creation program. We believe we have developed a reputation for being a value partner with the ability to provide speed, creativity, flexibility, and certainty of execution. With that, I'll turn it over to Teddy. Thank you, Carlos. I'll start with our operating results on slide 10. In the third quarter, BXSL's net investment income was $189 million, or $0.82 per share, representing a 106% coverage to our dividend on a per-share basis. Total investment income for the quarter was up $14 million, or 4.7% year-over-year, driven by increased interest income. We experienced increased repayment activity in the third quarter compared to the second quarter, and with accelerating M&A and deal activity Brad outlined earlier, we expect continued turnover activity in our portfolio throughout the upcoming quarters. Interest income excluding PIC, fees, and dividends represented 91% of our total investment income in the quarter. Moving to our balance sheet on slide 11, we ended the quarter with over $13.8 billion total portfolio investments at fair value, nearly $7.7 billion of outstanding debt, and nearly $6.3 billion of total net assets. NAV per share at quarter end was $27.15, down from $27.33 at the second quarter. NAV per share was supported by 2 cents from share issuance from our ATM program at a premium to NAV, offset by 0.9 of realized losses and 0.16 of unrealized losses in the portfolio, primarily concentrated to a small number of larger positions. As we look at the portfolio overall, the majority of the portfolio was flat or marked higher during the third quarter, with nearly an equal number of markups versus markdowns. NAV per share was down 0.18, predominantly related to names previously highlighted. Taking a step back, as Brad and John highlighted, we saw healthy fundamentals across our portfolio with 9% EBITDA growth and increasing interest coverage ratios back to two times as rate resets are improving cash flow profiles of our borrowers. Our non-accruals of just 0.1%, coupled with less than 1% of exposure valued below 80, are reflective of that. Further, we have over 120 individuals in our CIO office comprised of operational expertise, financial and legal restructuring expertise, data science expertise, capital formation, and more, all dedicated to driving positive outcomes through our investment process and mitigating losses in the portfolio. We are relentless in finding ways to add value to our companies and deploying unique resources that Blackstone can bring to bear. Moving to slide 12, BXSL funded over $1 billion in the quarter and committed nearly $1.3 billion. Net funded investment activity was up for the quarter at over $500 million, with $433 million of repayments, up nearly 150% quarter- over- quarter. This represented an annualized repayment rate of 13% of the portfolio at fair value, up from nearly 5% for the prior quarter. Next, slide 13 outlines our attractive and diverse liability profile, which includes 37% of drawn debt in unsecured bonds that are not swapped. These unsecured bonds have a weighted average fixed coupon of less than 3%, which contributed to an overall weighted average all-in cost of debt of 5.0%, down from 5.1% last quarter. This also compares to a weighted average yield at fair value on our performing debt investments of 10%, down from Q2 at 10.2%. The overall weighted average maturity on our funding facilities is 3.3 years. Further, we have continued to optimize our cost of capital. In August, we closed an amend and extend of our BXSL revolving credit facility, which eliminated the 10 basis point credit spread adjustment for extending loans and gave us the tightest price revolver among traded BDC peers based on our market research. Further, BXSL's overall cost of debt of 5.04% is one of the lowest compared to our traded BDC peers last quarter. We continue to be prudent in taking advantage of historically tight spreads for BDC bonds. In mid-October, we closed a $500 million bond priced at 155 basis points over the benchmark treasury rate, or at a 5.125% coupon with a 5.3-year tenor. This represented the tightest spread issue among our traded BDC peers since February. Our balance sheet strength and portfolio performance have supported us in achieving among the highest ratings for BDCs, with a BAA2 and stable outlook by Moody's, BBB- and positive outlook by S&P, and BBB-flat and stable by Fitch. In fact, Moody's completed its annual review of BXSL at the end of the quarter, maintaining the BAA2 stable rating, citing BXSL's first-lien senior secured focus, strong asset quality since inception, and sound underwriting. Total liquidity was $2.5 billion of unrestricted cash and undrawn debt available to borrow, while ending leverage as of September 30 was 1.22 turns on the higher end of our target range of 1-1.25 turns. Moving forward, we expect to operate near the higher end of our range, given what we believe is a period of heightened deal activity. With that, I'll ask the operator to open it up for questions. Thank you. Thank you. As a reminder, please press star one to ask a question. We ask you limit yourself to one question and one follow-up question to allow as many callers to join the queue as possible. We will take our first question from Finian Patrick O'Shea with Wells Fargo Securities. Hey, everyone. Thanks. Good morning. First question on Squarespace. I guess, can you hit on why hang on to that? There was a pretty small junior allocation, it looks like, in the main tranches+ 225. Is that indicative of how low you'll go? Otherwise, should maybe more junior follow in a delayed draw or something like that? Thanks. Yeah. Thanks for the question. I'm happy to take that. I won't speak to specific situations, but from time to time, for a high-quality company that has delivered, we do have multiple options to retain exposure versus losing it to what could otherwise be a significantly tighter price syndicated option. That can include potentially using a first out in some cases where we view it's appropriate. From a spread perspective overall, which I think is where you're going with the question, we actually saw spreads on new deals marginally increase quarter- over- quarter. I think we would characterize the environment over the last three to four quarters as relatively stable. As Brad mentioned, spreads on new deals overall were in the 525 context with three-year OID amortized. Relatively stable. We do have multiple tools in our toolbox. Maybe said differently, Finny, we look at spreads on a portfolio basis, and there may be specific reasons why individual assets may be structured a certain way. But as Teddy highlighted, spreads for the quarter, if you include the add-ons and delayed draw fundings, were in the mid-500s. I guess the follow-up is, does it really matter if new spreads are in the mid-500s if they're going to be repriced to 225? Because it's pretty tough math. That's inside of a lot of BSL. Are we going to—is the answer indicative of a lot more of this to come? The answer is no. Oh, okay. I also think, Finny, from time to time, you might see a first out in a portfolio that then gets sold over time. So I think to Brad's point, you can't really take one situation to draw broad portfolio conclusions. Overall, spreads have been pretty flat over the last three to four quarters. Okay. Got it. Thank you. I guess the follow-up, just market-wide, I think you hit on some of this in the remarks. There is a lot of headlines out there that are hard-hitting on private credit. Are you seeing any impact on the non-traded space, given your major, if not dominant, presence there on the non-traded BDC? Any impact, do you think, to the trajectory of flows on that part of the market? Thanks. I'd say a couple of things, Finn. As you know, performance across the BDC market generally, and more specifically Blackstone's BDCs, has actually been exceptionally good. What you ultimately see in the BDC market is returns that are delivering a premium to what investors can get in the public markets. That's the real driving kind of value of the asset class. What's interesting is that when rates fall, the return premium that private credit delivers is actually more impactful. Think about 2021. We saw this when rates were near zero. You saw inflows from both institutional and individual investors actually grow despite the base rate environment we were living through. The answer is there continues to be strong demand across all different types of investor bases for private credit. Thanks so much. Thank you. We'll take our next question from Casey Alexander, Compass Point Research & Trading. Yeah. Good morning. Thank you for taking my questions. My first question is, obviously, there was a modest quarter-over-quarter markdown on Medallia. And just simply because of the size of the investment, I think investors would like to hear where that company stands. And we also noticed that their principal competitor is doing a large acquisition. So we wonder if, in your view, that is changing any of the competitive dynamic between the two companies. Thanks, Casey. Yeah. There's no real update from last quarter on Medallia, and we believe it's marked appropriately. I think that the acquisition by Qualtrics will take some time to integrate, but does not change the market backdrop. No real change there. I also noticed in your deck that your company revenues year- over- year are up. Your company EBITDA year- over- year is up, but also the loan-to-value has skipped up a little bit higher. Normally, I would think that if revenues and EBITDA were up, that might be actually coming down a little bit. Can you speak to that dynamic? Does it have something to do with loan-to-value on newly originated loans, or what's the principal reason for that? Yeah. Sure. Loan-to-values on new deals for the quarter averaged about 45%. As we noted, it was probably one of our busiest quarters in a long time. Across the portfolio, you're right, loan-to-value went from 47% to just under 50%. It's a fairly marginal move. I think that's largely a product of enterprise values getting adjusted marginally lower on existing names, which we think is largely an equity consideration. It's like saying the average enterprise of our companies was something like $3.2 billion, and now it's $3 billion. Most importantly, there's still $1.5 billion of equity subordinate to us. As we think about it from a credit standpoint, you're focused on the right things. The companies are growing. Interest coverage is getting better. 98% of the portfolio is at the top of the capital structure. Nothing to read into anything there, just marginal changes. All right. Thank you for taking my questions. Thank you. We'll take our next question from Doug Harter with UBS. Thanks. Can you talk about how you're viewing the outlook for the dividend as base rates come down and you have to refinance some more of your fixed rate debt? Sure, Doug. Maybe we'll just start with the quarter, right? Paid $0.77 dividend and earned approximately $0.82. The payout's covered with room to spare, but the portfolio is in great shape, as Brad outlined. You've got loan-on accruals, a levered equity base, which Teddy referenced, and importantly, an income, right? Investment income that's high quality and, most of all, predictable. Approximately 90% come from cash interest. It's not PIC or not fee-related. Right now, about 99% of the portfolio is floating rate, which has been a big win with rates being high. When rates start to come down and the Fed's expected to take SOFR around 3% over the next year, we'll see some impact on earnings. Some peers have already adjusted their dividends. For us, the plan is to keep looking at the base dividend in light of where rates and earnings are headed and still make sure it stays competitive and sustainable. The good news is we have a cost and expense advantage over peers. Our latest bond deal swapped at around 155 basis points over. With more M&A activity expected, we see some opportunities, as Brad outlined, to put some capital to work. We are in a good spot to be thoughtful about any changes to the base dividend rather than just rush into them. That is how we are looking at it this quarter and the quarters going forward. I appreciate that. Just as you mentioned, if there is increased M&A and turnover in the portfolio, how do you think about that impact on the realized yields you have if portfolio turnover picks up? Yeah. I'm happy to take that. I think we've been messaging for some time that, number one, we expect activity to pick up. You clearly saw that. Number two, in line with that, you would expect repayment activity to pick up as well. You saw that too this quarter. If those trends persist, we'd expect a continued trend that does represent a potential upside driver to returns versus what you saw in certainly the second quarter and previous quarters in lower repayment activity. Yeah. It probably has more of an immediate impact on earnings, just given the acceleration of OID, the fees that we get from those refinancings. If the rate environment or the yield environment's a little bit lower, longer-term yields will be a tad lower on those new deals. Thank you. We'll take our next question from Kenneth Lee with RBC Capital Markets. Hey, thanks for taking my question. First one is just about the AI opportunities, and you highlighted a couple of different things here. Over the near term, what sorts of opportunities do you see potentially over the next coming quarters? Could this include, for example, debt financing and some of the infrastructure? What's appropriate for the vehicle here? Thanks. Yeah. So obviously, AI is both a risk and an opportunity. We're spending a lot of time on the risk side, understanding what sectors could be impacted. We have—I think we've talked about this before—1,000 technologists across Blackstone. So our insights into areas of concern and risk are probably better positioned than most anyone in the industry. Your question was more on the opportunity side, and we think everything in and around the AI ecosystem is looking attractive, not from an application or technology standpoint. There's some—we need to be cautious as a debt investor on where we want to invest, but more in the infrastructure. That includes equipment providers into data centers. We just did a big deal for BXSL during the quarter called Layer Zero, which Advent purchased. We just announced a deal last week, Sabre Power, which powers another attractive infrastructure play on the AI and the AI ecosystem. You will continue to see us play in the picks and shovels around AI and drive more secure-type investments in that space. Great. Very helpful there. One follow-up, if I may, more broadly. How are you seeing in terms of the quality of deals that you're seeing? You've certainly seen a pickup in activity, but wondering how would you assess the quality of the deals that you're seeing so far? Thanks. Yeah. I would say it's actually fairly good. What's driving a little bit of the pickup in M&A activity, as I said in my opening remarks, you have a little bit more macro clarity. You have a lower cost of capital, and those two things are driving improved valuations. Buyers and sellers are coming a little bit closer together. Typically, when an M&A machine starts to pick up, it leads with the higher quality assets. Those are the types of deals that we're seeing. As I just mentioned on the previous question, average loan-to-value of about 45%. Still sub 50%. When we started 15years-20 years ago, average loan-to-values were around 65%. Very good backdrop from a capital structure standpoint if you're investing at the top of the capital structure, which we continue to do. I would say there are certain sectors that we think will be better performers going forward, and those are the ones that we've invested in the past year and will continue on a go-forward basis for our investors. Great. Very helpful there. Thanks again. Thank you. We'll take our next question from Ethan Kaye with Lucid Capital Markets. Hey, good morning, guys. Thanks for taking my question here. You guys had strong commitment and net funding activity this quarter, which is great to see. I guess first question is, how much of this was kind of incumbent versus new borrowers? Are you kind of seeing a shift in these proportions in the last quarter, recent months here? Yeah. Good question. Thanks, Ethan. As we look at total activity in the quarter, which includes existing portfolio companies that are accessing DDTLs or doing add-ons in addition to new deals, over 80% of our activity was to incumbent borrowers. And over 70%, or actually close to 75%, as Carlos mentioned, we are a sole lead. I would not say that is in a different quarter than previous. That has kind of been consistent for a while. It goes back to our broad coverage across the sub-investment-grade universe, cover or invested as a platform over 5,000 companies. That is somewhat of a fertile hunting ground for us for new deals. You saw that in the quarter. I would say just as a market backdrop, we are seeing about a 25% uptick in new LBOs. Going forward, I think you'll see a decent percentage of new deals come through the portfolio and into next year. Got it. That's helpful. I guess somewhat of a follow-up. Given that leverage ticked up a bit at the high end of your range, as you mentioned, and given that kind of share issuance ability is a little bit more constrained these days, should we anticipate kind of the level of deployment to be largely driven by portfolio turnover? Do you think there's capacity to kind of maintain these elevated net funding levels? Yeah. Good question. Thank you. First off, going into a period of heightened activity, very well capitalized, right? Over $2.5 billion of liquidity among lowest cost of financing. Debt markets wide open. We issued a $500 million bond at 155 basis points spread over Treasury. To put that in context, that's about 50 basis points inside of where spreads were on bonds in 2021. To your point, also seeing a pickup in repayment activity as the M&A market does pick up, we expect to continue to see that. We'll watch the equity markets closely and only issue if we see that it's accretive to both NAV and earnings based on the opportunity set in front of us. In the meantime, feel we're in a very good position and do have some visibility to increasing repayments, as previously mentioned. The pickup in M&A activity and turnover are directly linked, not surprisingly. You will see both those happen at the same time. Great. Appreciate it. Thanks, guys. Thank you. As a reminder, star one, if you would like to ask a question, we'll go next to Robert Dodd with Raymond James. Hi, guys. If I can go back to the LTV question quickly. I mean, almost 50%, I think that's probably an all-time high in this portfolio, and it's up almost 300 basis points since last quarter. There also seems to be a bit of tension in Brad's prepared remarks. You're talking to Ken, you said valuations in the market are improving, and that's one of the factors driving activity. Your explanation for LTV going down was you were marking down the enterprise value for some of your portfolio companies. Can you give us a little bit more granularity on that? Is it trimming multiples modestly broadly across the portfolio for your enterprise value assessments or more concentrated in some larger assets where there are bigger negative adjustments? Yeah. I do not want to get into too technical of an answer on this point, but I'll give you an example, and hopefully that is helpful. If a company does an add-on financing where they had previously an equity position, let's just say that was $1.5 billion, that company may have improved in value, and we may have financed it with the acquisition with debt. It may look like the LTV has gone up, but it, in fact, is reflecting the original purchase price of the sponsor. There is a lot of puts and takes on the LTV. Robert, I would tell you it is not, as we look at it, it is not a story. It is not an event that concerns us just given the subordination that remains below our debt positions. Got it. Thank you. Sort of follow-up, not really. On spreads, I mean, in your opening remarks, Brad, you did say spreads are still attractive relative to other fixed income markets. I agree with that. I mean, spreads are down everywhere. Private credit has persistently maintained the premium over the syndicated loan market, call it 150+ basis points. Do you think there's risk to that 150 as we go forward given the amount of capital and the amount of competition? I definitely do not think there's risk to that premium. If you take a step back and think about what private credit is delivering for companies, in the bank model, you approach a bank, bank underwrites the loan, goes to the rating agencies, goes through a long distribution process, and eventually prices that debt in the public markets. They charge a fee for that. Usually, that fee is somewhere between 250 basis points- 300 basis points, depending on all the other ancillary expenses. You compare that to private credit where I'm going to the same company and saying, "Work with Blackstone directly. We can give you a billion-dollar loan. You don't need to go through that distribution process. By the way, we can give you a little bit more of a tailored solution for you. That is the value of what private credit brings to the market. It is the disintermediation of the bank-distributed model, and there is value for that. There is value for the company, and there is value for investors. I strongly believe that that premium will be maintained and at some points will actually even be wider. Got it. Thank you. I hate to ask one more. Can you give us the estimated spillover currently to support the dividend? Yeah. $1.89. Got it. Thank you. Thank you. We'll take our next question from Melissa Waddell with JP Morgan. Good morning. Thanks for taking my questions today. Definitely noticed the resilience in interest income this quarter, especially given the pickup quarter- over- quarter. I was wondering if there was anything one-time or outsized showing up and impacting the three-key revenue number. Yeah. Thanks, Melissa. I think as you look at our interest income profile overall, what you see is quite a bit of recurring nature, right? We have, as I mentioned, 91% excluding, 91% of interest income excludes PIC and one-time fees. We did have a little bit of repayment activity. The impact of that was maybe 0.3. I think overall, as you go back to our policy from an accounting perspective, right, all OID and upfront fees are amortized over the life. That leads to more stability, or we believe leads to more stability over a long period of time. Okay. That helps. Thank you. It sounds like with the pickup in M&A activity and deal volumes, you're seeing some attractive opportunities. I'm curious how the opportunity set here in the U.S., now that it is sort of re-accelerating, how does that compare to what you're seeing outside of the U.S., which I know has a small exposure in the portfolio? Thanks. Yeah. I would say Europe as being the primary market that's most developed outside of the U.S. probably sees terms that are a little bit wider to what you're seeing in the U.S. The market's just not as developed. The capital markets aren't as deep. There's not as many competitors. As that market starts to re-accelerate as well, there's a slightly better backdrop in Europe than the U.S. Both are attractive clearly, but you see about a 25 basis point-50 basis point spread premium in Europe. In Asia, it's a little bit of a market that's still developing for the most part and probably not a great comp. Thank you. Thank you. We'll take our last question from Aaron Cyganovich with Truist Securities. Thank you. I just wanted to talk a little bit about the commentary of investment activity picking up because of cost of capital coming down and macro getting better. The macro still seems kind of squishy, and part of the reason that rates may be coming down is that there is a little bit of macro uncertainty along with the slowing inflation. I guess what's your experience in the past in areas like this where you have the cost of capital coming down, but macro still has some uncertainty in it? Yeah. Let me just comment broadly on the economy because you are correct. We did highlight that it feels like the economy, the backdrop is good. Corporate balance sheets are good. Earnings, as we see them reported publicly, are strong. We're seeing that in our portfolio as well. I think we mentioned 9% earnings growth. There are pockets of weakness, most certainly. You see that in the cyclicals. You see that in smaller companies. You see that in companies that are exposed to the lower end of the consumer. Tricolor is a good example of that. You see some businesses that are more impacted by AI. It is not without challenges, but it really depends on where you're invested. Importantly, as you think about rates, rates are primarily looking at inflation. Inflation is coming down. The labor markets are cooling. Shelter costs are lower. That's really what the Fed's focused on when they're setting their interest rate policy. Got it. All right. Thank you. Thank you. With no additional questions in queue, I'd like to turn the call back over to Stacy Wong for any additional or closing remarks. Thank you. Thanks, everyone, for your participation in our call this morning. We look forward to speaking to you next quarter. Thanks again.