REG - Blackstone Loan Fin - Half-year Report
20/09/2024 07:00
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RNS Number : 9574E Blackstone Loan Financing Limited 20 September 2024
20 SEPTEMBER 2024
FOR IMMEDIATE RELEASE
RELEASED BY BNP PARIBAS S.A., JERSEY BRANCH INTERIM RESULTS ANNOUNCEMENT
THE BOARD OF DIRECTORS OF BLACKSTONE LOAN FINANCING LIMITED ANNOUNCE INTERIM
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024
Blackstone Loan Financing Limited
(the "Company" or "BGLF")
Half Yearly Financial Report for the six months ended 30 June 2024
Refer to the glossary below for the definitions of all the terms, jargon,
abbreviations and acronyms used throughout this half-yearly financial report.
STRATEGIC REPORT
Company Overview
The Company is a closed-ended investment company incorporated on 30 April 2014
as a limited by shares company under the Company (Jersey) Law 1991 with
registered number 115628. In addition, the Company constitutes and is
regulated as a collective investment fund under the Collective Investment
Funds (Jersey) Law 1988. The Company continues to be registered and domiciled
in Jersey. The Company's redeemable shares are quoted on the Main Market of
the LSE.
Following the decision made by Shareholders on 15 September 2023 to implement
a managed wind-down of the Company, the new investment objective of the
Company, effective from that date, is to realise all existing assets in the
Company's portfolio in an orderly manner.
Refer to pages 24 to 25 of the 31 December 2023 Annual Report and Audited
Financial Statements for more details on the purpose, values, principal
activities and the investment policy of the Company.
Reconciliation of IFRS NAV to Published NAV
At 30 June 2024, there was a difference between the NAV per redeemable share
as disclosed in the Condensed Statement of Financial Position, €0.8078 per
redeemable share ("IFRS NAV") and the Published NAV, €0.9072 per redeemable
share, which was released to the LSE on 19 July 2024 ("Published NAV"). The
reconciliation is provided below and in Note 13 in the 'notes to the condensed
interim financial statements'. The difference between the two valuations is
entirely due to the different valuation bases used with the main driver being
the discount rate, as explained in detail below.
Valuation Policy for the Published NAV
The Company publishes a NAV per redeemable share on a monthly basis in
accordance with its Prospectus. The valuation process in respect of the
Published NAV incorporates the valuation of the Company's CSWs and underlying
PPNs (held by the Lux Subsidiary). These valuations are, in turn, based on the
valuation of the BCF portfolio using a CLO intrinsic calculation methodology
per the Company's Prospectus, which we refer to as a "mark to model" approach.
As documented in the Prospectus, certain "Market Colour" (market clearing
levels, market fundamentals, BWIC, broker quotes or other indications) is not
incorporated into this methodology. The mark to model valuation policy is
deemed to be an appropriate way of valuing the Company's holdings and of
tracking the long-term performance of the Company as the underlying portfolio
of CLOs held by BCF are comparable to held to maturity instruments and the
Company expects to receive the benefit of the underlying cash flows over the
CLOs' entire life cycles.
Valuation Policy for the IFRS NAV
For financial reporting purposes on an annual and semi-annual basis, to comply
with IFRS as adopted by the EU, the valuation of BCF's portfolio is at fair
value using models that incorporate Market Colour at the measurement date,
which we refer to as a "mark to market" approach. The Company also assesses
and publishes the mark to market IFRS NAV on a quarterly basis. IFRS fair
value is the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants as at the
measurement date and is an "exit price" e.g. the price to sell an asset. An
exit price embodies expectations about the future cash inflows and cash
outflows associated with an asset or liability from the perspective of a
market participant. IFRS fair value is a market-based measurement, rather than
an entity-specific measurement and so incorporates general assumptions that
market participants are applying in pricing the asset or liability, including
assumptions about risk.
Both the mark to model Published NAV and mark to market IFRS NAV valuation
bases use modelling techniques and input from third-party valuation
specialists.
Key Performance Indicators
IFRS NAV Published NAV
NAV 1 (#_edn1) €0.8078 €0.9072
(31 Dec 2023: €0.7250) (31 Dec 2023: €0.9098)
NAV Total Return1 18.06% 5.64%
(31 Dec 2023: 17.76%) (31 Dec 2023: 10.39%)
Discount1 (19.53)% (28.35)%
(31 Dec 2023: (18.62)%) (31 Dec 2023: (35.15)%)
Dividend- €0.0450
(30 Jun 2023: €0.0475)
Further information on the reconciliation between the IFRS NAV and the Published NAV can be found below and in Note 13 in the 'notes to the condensed interim financial statements'.
Performance
Ticker IFRS NAV Published Share Price 2 (#_edn2) Discount Discount Dividend
per Redeemable NAV per IFRS NAV Published Yield 3 (#_edn3)
Share Redeemable NAV
Share
BGLF
30 Jun 2024 €0.8078 €0.9072 €0.6500 (19.53)% (28.35)% 14.62%
31 Dec 2023 €0.7250 €0.9098 €0.5900 (18.62)% (35.15)% 15.25%
BGLP 4 (#_edn4)
30 Jun 2024 £0.6845 £0.7687 £0.5550 (18.92)% (27.80)% 14.51%
31 Dec 2023 £0.6285 £0.7887 £0.5150 (18.06)% (34.70)% 15.14%
LTM1 3-Year Annualised Return Cumulative Return
Return Annualised Return since Inception since Inception
BGLF IFRS NAV 32.39% 6.11% 7.23% 100.14%
BGLF Published NAV 14.10% 10.55% 8.47% 124.53%
BGLF Redeemable Share Price (1.09%) 1.83% 5.07% 63.56%
The Company is not managed in reference to a benchmark, however commentary to
market indices and market performance is detailed in the Portfolio Adviser's
report below.
Other Key Data
Dividends
On 23 January 2024, the Board announced that it is targeting a total 2024 annual dividend of at least €0.09 per redeemable share, which will consist of quarterly payments of €0.0225 per redeemable share.
Redeemable Share Dividends for the Period Ended 30 June 2024
Period in respect of Date Declared Ex-dividend Date Payment Date Amount per Redeemable Share
€
1 Jan 2024 to 31 Mar 2024 22 Apr 2024 2 May 2024 7 Jun 2024 0.0225
1 Apr 2024 to 30 Jun 2024 19 Jul 2024 1 Aug 2024 6 Sep 2024 0.0225
Redeemable Share Dividends for the Year Ended 31 December 2023
Date Declared Ex-dividend Date Payment Date Amount per
Period in respect of Redeemable Share
€
1 Jan 2023 to 31 Mar 2023 25 Apr 2023 4 May 2023 2 June 2023 0.0200
1 Apr 2023 to 30 Jun 2023 21 Jul 2023 3 Aug 2023 1 Sep 2023 0.0200
1 Jul 2023 to 30 Sept 2023 20 Oct 2023 2 Nov 2023 1 Dec 2023 0.0200
1 Oct 2023 to 31 Dec 2023 23 Jan 2024 1 Feb 2024 8 Mar 2024 0.0300
Redemption of redeemable of shares
During the period ended 30 June 2024, the Company made its first return of
capital to its Shareholders, by way of compulsory partial redemption of
redeemable shares, as detailed below:
Record date Number of Redeemable Rate per Amount returned to Shareholders
Shares Redeemed Redeemable Share
10 June 2024 24,779,135 €0.9282 €22,999,992
Refer to below for more details on the compulsory redemption mechanism.
Period Highs and Lows
Period Ended 30 June 2024 and 30 June 2023
2024 2024 2023 2023
High
Low
High
Low
Published NAV per Redeemable Share €0.9282 €0.8844 €0.9220 €0.8808
BGLF Share Price (Last Price) €0.6700 €0.5700 €0.7700 €0.6650
BGLP Share Price (Last Price) £0.5650 £0.4890 £0.6650 £0.5750
Schedule of Investments
As at 30 June 2024
Nominal Market Percentage of
Holdings
Value
IFRS NAV
€ %
Investment Held in the Lux Subsidiary:
CSWs 190,371,884 326,899,255 96.82
Shares (2,000,000 Class A and 1 Class B) 2,000,001 8,340,158 2.47
Other Net Assets n/a 2,409,156 0.71
Net Assets Attributable to Shareholders 337,648,569 100.00
As at 31 December 2023
Nominal Market Percentage of
Holdings
Value
IFRS NAV
€ %
Investment Held in the Lux Subsidiary:
CSWs 208,565,744 298,050,226 92.86
Shares (2,000,000 Class A and 1 Class B) 2,000,001 7,944,332 2.47
Other Net Assets n/a 14,992,542 4.67
Net Assets Attributable to Shareholders 320,987,100 100.00
Schedule of Significant Transactions
Date of Transaction Transaction Type Quantity Amount
€
CSWs held by the Company
6 February 2024 Redemption (8,280,641) (15,231,412)
8 May 2024 Redemption (9,913,219) (19,122,728)
Total Number of CSWs Redeemed (18,193,860) (34,354,140)
The proceeds of the redemptions were used to fund dividends and redemption of shares and to cover other administrative costs. The Company made no subscriptions during the period ended 30 June 2024.
Chair's Statement
Dear Shareholders,
Company Returns and NAV
5 (#_edn5)
The Company delivered an IFRS NAV total return per redeemable share of 18.06%
over the first six months of 2024, ending the period with a NAV of €0.8078
per redeemable share.
On a Published NAV basis, the Company delivered a total return per redeemable
share of 5.64% over the first six months of 2024, ending the year with a NAV
of €0.9072 per redeemable share. The return was composed of 5.77% dividend
income and -0.13% net portfolio movement.
As highlighted above, the Company uses different valuation policies to
determine Published and IFRS NAV. As at
30 June 2024, the variance between Published and IFRS NAV was €0.0994 per
redeemable share. This is primarily associated with the discount rates used
under the two policies. The tables below further explain the rationale
regarding the differences in the assumptions that have contributed to the
variance as at 30 June 2024.
During the first half of 2024, the Company's performance on a Published NAV
and an IFRS NAV basis was supported, through its investment in BCF, by
uninterrupted distributions from the underlying CLO and loan portfolio, which
continued to benefit from the refinancing and reset activity during 2021/2022.
The portfolio (primarily the loans directly held by BCF and those CLOs that
have exited their reinvestment periods) were aided by a broader market rally.
European and US loans returned 4.10% and 4.44%, respectively, over the year so
far, as discussed in more detail in the Portfolio Adviser's Review.
Consistent with guidance, the Company has declared two dividends to
shareholders in respect of the six-month period ended 30 June 2024, totalling
€0.045 per redeemable share. As a reminder, the 2024 BGLF dividend guidance
announced on 23 January 2024 provided for a total annual dividend of at least
€0.09 per redeemable share payable in four equal quarterly instalments.
Details of all dividend payments can be found within the 'Dividends and Other
Key Data' section at the front of this Half Yearly Financial Report.
The Company's dividends are funded from the cash flows generated by the
underlying CLO and loan portfolio held within BCF. The Company's dividend
policy during its managed wind-down was set out in the Company's Circular
published on 25 August 2023, which stated that the Board intends to continue
to distribute as dividends on a quarterly basis the interest payments deemed
to be received from BCF and commence the redemption of shares, having regard
to any amounts which the Board deem prudent to retain in the Company. However,
as the Company's underlying assets are realised over time and the portfolio
diminishes in size, the Board, in consultation with its the Portfolio Adviser,
may decide it is in the best interests of Shareholders to cease payment of
dividends and to use all proceeds received from BCF for the redemption of the
redeemable shares and the return of capital to Shareholders.
On 10 June 2024, the Company compulsorily redeemed 24,779,135 redeemable
shares at a rate of €0.9282 per redeemable share. A total of 5.5968% of the
Company's issued share capital was redeemed, leaving 417,959,768 shares
outstanding after the redemption, with no shares held in treasury.
Historical BGLF NAV and Share Price
The graph below shows cumulative Published NAV and redeemable share price
total returns and cumulative returns on European and US loans 6 (#_edn6) .
[Graphs and charts are included in the published Half Yearly Financial Report
which is available on the Company's website
at https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited//
(https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited/) ]
Historical BCF Default Loss Rate
The graph below shows the default loss rate, which incorporates asset
recovery, within the BCF portfolio and the default loss rate of European and
US loans 7 (#_edn7) .
[Graphs and charts are included in the published Half Yearly Financial Report
which is available on the Company's website
at https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited//
(https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited/) ]
Market Conditions
Global markets navigated a complex landscape characterized by fluctuating
economic indicators over the first six months of 2024. Central banks around
the world have generally maintained a cautious approach, keeping interest
rates steady, while signalling potential cuts in the latter half of the year.
The emergence of geopolitical tensions and subsequent supply chain disruptions
continued to pose risks, contributing to market uncertainty. Despite these
challenges, investor appetite for credit remained relatively strong, driven by
the search for yield in a lowering interest rate environment.
Looking ahead to the remainder of the year, the stage is set for cautious
optimism, with market participants closely monitoring geopolitical movements,
macroeconomic data releases, and central bank actions. Bolstered by
historically high all-in yields, we believe that floating rate assets,
including loans and CLOs, are likely to remain attractive, even if central
banks pivot. Corporate balance sheets have proven largely resilient to the
elevated rate environment and default rates remain within historical averages.
We anticipate a sustained divergence between issuers that are defensively
positioned for growth and those more vulnerable to cyclical demand and
consumer spending fluctuations, meaning individual credit selection will be a
key driver to performance throughout the rest of the year.
ESG
The practice of responsible investing remains a key focus for investors and
for Blackstone. The Board regularly engages with the Company's Portfolio
Adviser regarding its ESG policy. Blackstone has committed to being a
responsible investor for over 35 years and is a signatory to the Principles
for Responsible Investment. This commitment is affirmed across the
organisation and guides its approach to investing.
Whilst the Company is currently exempt 8 (#_edn8) from the requirement to
report against the TCFD recommendations, the Board continues to actively
discuss ESG matters with BXCI with a view of obtaining meaningful information
to provide to Shareholders. The Board fully acknowledges the importance of the
TCFD recommendations and expects the companies to which BCF provides finance
to be compliant in their reporting against TCFD recommendations, as may be
required by applicable law or regulation. Refer to the Portfolio Adviser's
Review below for further details on BXCI's ESG policy.
The Board
Good governance remains at the heart of our work as a Board and is taken very
seriously. The Board believes that the Company maintains high standards of
corporate governance. The Board was very active during the period, convening a
total of 7 Board meetings and 9 Committee meetings (excluding 6 NAV Review
Committee meetings), as well as undertaking an onsite due diligence meeting
with the Portfolio Adviser in January 2024, the agenda for which covered risk
and compliance, risk oversight monitoring, finance and accounting, ESG and the
wider market. The Board also met with the BCF Board at the same time.
The Board and the Company's advisers meet frequently, with the latter
providing general updates as well as recommendations on pertinent matters such
as the Company's managed wind-down process. The Board deems the careful
consideration of such matters to be critical to ensuring the optimum returns
of the Company, particularly in light of the challenges and uncertainty faced
in recent years.
The work of the Board is also assisted by the Audit Committee, the NAV Review
Committee, the Management Engagement Committee, the Remuneration and
Nomination Committee, the Risk Committee and the Inside Information Committee.
The Company is a member of AIC and adheres to the AIC Code which is endorsed
by the FRC and meets its obligations in relation to the UK Code.
Shareholder Communications
During the period, using our Portfolio Adviser and Brokers, the Board continued its programme of engagement with current and prospective Shareholders. The Board sincerely hopes that you found the monthly factsheets, Circular, quarterly letters, quarterly update webcasts and market commentary valuable. The decision to put forward the managed wind-down proposals was in-part the result of an active shareholder consultation process in prior year, together with the Portfolio Adviser. The Board is always pleased to have contact with Shareholders and welcomes any opportunity to meet with you and obtain your feedback.
Prospects and Opportunities for the remainder of 2024
The Board's primary focus for the remainder of 2024 will be to continue implementing the managed wind-down and the redemption of shares. As the wind-down progresses, the Board will also focus on streamlining operations and managing costs as the size of the Company reduces.
The Board wishes to express its thanks for the support of the Company's Shareholders.
Steven Wilderspin
Chair
19 September 2024
Portfolio Adviser's Review
Bank Loan Market Overview
Supported by a stable macroeconomic backdrop, global loan markets performed
well in the first six months of 2024, despite challenges from rising
geopolitical tensions and persistent inflationary pressure. Investor appetite
for credit remained relatively strong up to the end of the period, driven by
the prospect of potential rate cuts in the latter half of the year. Loans
outperformed other credit asset classes over the period, with European and US
loans returning 4.10% and 4.44%, respectively 9 (#_edn9) . A combination of
resilient corporate earnings reports and companies slowing their debt growth
have led to a slight contraction in loan spreads by 15bp to 490bp in Europe,
and by 21bp to 507bp in the US. Across both regions, the loan market saw a
notable rise in maturity extensions and refinancing activity, though new money
loan volume remained subdued. The sustained scarcity of new issue loan supply,
coupled with strong investor demand, pushed the prices of European and US loan
indices to two-year highs of €97.16 and $96.06, leading to a renewed
repricing wave. Rolling 12-month loan defaults ticked up to end the first half
of the year at 2.6% in the US and 0.8% in Europe 10 (#_edn10) .
Heading into the second half of 2024, the macroeconomic outlook remains
positive, supported by robust corporate balance sheets, fueling hopes for a
soft landing. While recent data releases have been mixed and price pressures
persist, the general trend is towards disinflation, strengthening expectations
for the Fed and ECB to begin reducing interest rates after summer. We
anticipate that the elevated rate environment will support performance in the
near term, allowing floating rate loans to continue delivering strong returns.
CLO Market Overview
A renewed optimism for impending central bank rate cuts and the prospect of a
soft landing for global economies has boosted a resurgence of investor
enthusiasm and a corresponding tightening of CLO liabilities. New issue AAA
spreads tightened to 139bp in Europe and 138bp in the US from 172bp in Europe
and 160bp in the US, as of year-end 2023, and represents an extreme turnaround
from the start of 2023, when AAA spreads hovered around 200bp in both
regions 11 (#_edn11) .
Tighter liability spreads are creating a supportive environment for new CLO
issuance, as well as refinancings and resets. In the first half of 2024 alone,
refinancing and reset volumes have surpassed the full year issuance for 2022
and 2023 combined. Managers have taken advantage of the positive market
sentiment to re-price liabilities on existing deals, particularly those that
were issued in the past 18 months with a relatively high cost of capital,
improving the arbitrage for equity investors. Looking ahead to the remainder
of the year, CLO activity looks set to remain strong as investors expect
central banks to pivot and CLOs to continue performing well. Since the start
of the year, investment banks have revised their 2024 new issuance forecast
upwards to €40-45bn in Europe and $145-155bn in the US 12 (#_edn12) , which
would put 2024 on track to outpace every other year on record 13 (#_edn13) .
Portfolio Update - BCF
Taking advantage of the loan market rally, BCF's CLOs generally sold
higher-priced but lower-rated assets, as loan prices across the rating band
compressed towards par. In Europe, BCF's CLOs used the additional cash to
purchase facilities from the primary pipeline that offered better relative
value, while BCF's US CLOs focused on improving credit quality by buying
better-rated credits.
The graph below shows the top five industry concentrations for the BCF
portfolio as of 30 June 2024 14 (#_edn14) :
[Graphs and charts are included in the published Half Yearly Financial Report
which is available on the Company's website
at https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited//
(https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited/) ]
As of the end of June, the BCF portfolio remained highly diversified and
defensively positioned, with more than 650 loan issuers, across 27 sectors and
30 countries. The portfolio was concentrated around B1-B2 rated issuers and
holds 7.2% Caa rated assets (at the facility level), which has ticked up
slightly since the start of the year. The portfolio's average loan price
remained broadly flat at 96.7, compared to 96.9 at the end of last year, and
assets priced below €/$80 were at 4.9% compared to 3.6% in December 2023.
Looking forward, we see minimum refinancing risk in the portfolio as loan
maturities are generally wrapped around 2028. The BCF portfolio maintained a
lower year-to-date default rate of 0.6% compared to the European and US loan
indices of 0.8% and 2.6% 15 (#_edn15) , respectively. A minimised level of
defaults helps to ensure that equity distributions are well protected.
Over a busy first half of the year, BCF took advantage of the supportive
capital markets in order to improve on the expected future equity cash flows
for the CLO portfolio. Specifically, Bushy Park CLO and Glenbrook Park CLO
each issued delayed draw tranches, resulting in further levering of the
capital structure and earlier cash distributions to equity. Clonmore Park CLO
and Harbor Park CLO were refinanced, resulting in improvements to the weighted
average cost of capital by 68bp and 23bp, respectively. Finally, BCF took
advantage of the wider loan market rally to redeem the debt tranches of
Palmerston Park CLO, Richmond Park CLO, and Clontarf Park CLO in April 2024.
Since the effective date of the Company's managed wind-down, 2 January 2024,
no new CLO investments will be made and any refinancing of CLO liabilities
will not extend maturities. Importantly, however, the underlying portfolio of
CLO positions will continue to be actively managed with the combined
objectives of maximising returns for investors, alongside the overarching aim
of realising all existing assets in an orderly manner. Given the majority of
the CLOs within BCF are required to be held until redemption or maturity, our
focus will be on continuously evaluating optimal and commercially prudent
times to redeem, sell, or refinance, which may vary depending on each specific
CLO.
CLO Portfolio Positions
Current Closing Deal Position Owned % of BCF NAV Reinvest. Period Current Asset Coupon 16 (#_edn16) Current Liability Cost Current NIM 17 (#_edn17) NIM Distributions Through Last Payment Date % of Tranche
Portfolio
Date Size (M) Left (Yrs) 3M Prior
(M)
Ann. Cum.
EUR CLO Income Note Investments
Phoenix Park Jul-14 € 381 € 16.4 0.7% 0.0 7.21% 5.61% 1.60% 1.62% 13.0% 129.2% 51.4%
Dartry Park Mar-15 424 18.8 1.4% 0.8 7.42% 5.55% 1.87% 1.85% 12.3% 114.3% 51.1%
Tymon Park Dec-15 415 16.0 1.5% 1.1 7.45% 5.59% 1.86% 1.81% 14.3% 122.1% 51.0%
Elm Park May-16 519 22.5 2.0% 1.3 7.33% 5.52% 1.81% 1.87% 14.6% 118.0% 54.0%
Griffith Park Sep-16 434 18.3 1.2% 0.0 7.21% 5.24% 1.97% 1.98% 12.0% 93.4% 53.4%
Clarinda Park Nov-16 417 16.3 1.5% 0.6 7.32% 5.53% 1.79% 1.83% 11.9% 90.9% 51.2%
Palmerston Park 18 (#_edn18) Apr-17 45 16.9 0.6% 0.0 7.75% n/a n/a 0.95% 11.7% 84.5% 53.3%
Clontarf Park18 Jul-17 34 20.4 0.5% 0.0 8.01% n/a n/a 0.82% 14.9% 103.5% 66.9%
Willow Park Nov-17 277 16.5 0.7% 0.0 7.08% 5.71% 1.37% 1.45% 15.4% 101.4% 60.9%
Marlay Park Mar-18 300 17.4 0.9% 0.0 7.03% 5.16% 1.87% 1.92% 17.9% 111.8% 60.0%
Milltown Park Jun-18 341 17.0 1.1% 0.0 7.17% 5.31% 1.87% 1.85% 17.2% 104.1% 65.0%
Richmond Park18 Jul-18 68 32.6 0.8% 0.0 6.80% n/a n/a 0.80% 16.6% 99.1% 68.3%
Sutton Park Oct-18 344 16.9 1.1% 0.0 7.10% 5.47% 1.63% 1.71% 16.7% 91.4% 66.7%
Crosthwaite Park Feb-19 516 23.3 2.1% 1.2 7.34% 5.40% 1.93% 1.84% 15.4% 81.9% 64.7%
Dunedin Park Sep-19 421 17.9 1.4% 1.9 7.35% 5.56% 1.79% 1.74% 17.8% 85.0% 52.9%
Seapoint Park Nov-19 403 15.2 1.8% 0.0 7.48% 5.55% 1.93% 1.76% 14.7% 64.3% 70.5%
Holland Park Nov-19 424 27.6 2.0% 0.0 7.15% 5.56% 1.59% 1.70% 11.8% 54.4% 72.1%
Vesey Park Apr-20 403 17.3 2.3% 0.4 7.48% 5.64% 1.84% 1.85% 17.8% 74.1% 80.3%
Avondale Park Jun-20 409 16.0 1.4% 1.7 7.44% 5.59% 1.85% 1.79% 27.6% 111.9% 63.0%
Deer Park Sep-20 355 14.4 1.5% 1.8 7.35% 5.65% 1.70% 1.78% 26.4% 99.9% 71.9%
Marino Park Dec-20 322 12.0 1.6% 0.0 7.44% 5.53% 1.91% 1.98% 18.2% 64.1% 71.4%
Carysfort Park Apr-21 404 17.7 2.2% 1.1 7.41% 5.55% 1.87% 1.93% 16.5% 53.4% 80.7%
Rockfield Park Jul-21 402 16.9 2.2% 1.0 7.38% 5.53% 1.85% 1.91% 16.3% 47.7% 80.0%
Dillon's Park Sep-21 404 18.5 2.3% 1.8 7.40% 5.54% 1.86% 1.93% 15.1% 41.7% 84.0%
Cabinteely Park Dec-21 404 16.7 2.0% 2.1 7.41% 5.62% 1.79% 1.81% 15.7% 39.7% 75.6%
Otranto Park Mar-22 443 25.3 3.0% 2.4 7.42% 5.86% 1.56% 1.55% 14.8% 33.4% 96.3%
Clonmore Park Aug-22 349 16.9 2.0% 2.6 7.47% 6.16% 1.31% 1.36% 20.6% 38.6% 100.0%
Edmondstown Park Dec-22 379 22.8 3.3% 3.1 7.60% 6.92% 0.69% 0.61% 12.6% 19.5% 100.0%
Bushy Park Mar-23 405 17.3 1.4% 3.3 7.62% 6.65% 0.96% 1.19% 46.1% 58.9% 61.3%
Glenbrook Park Jul-23 351 23.0 2.0% 3.6 7.75% 6.78% 0.97% 1.14% 53.3% 51.6% 100.0%
Wilton Park Nov-23 395 34.9 4.0% 3.9 7.58% 6.20% 1.38% 1.33% 16.2% 10.4% 100.0%
Cumulus 2023-1 Sta Nov-23 319 24.9 3.6% n/a 7.15% 6.12% 1.03% n/a n/a n/a 100.0%
USD CLO Income Note Investments
Grippen Park Mar-17 $ 301 $ 21.0 0.6% 0.0 8.87% 7.92% 0.95% 1.16% 13.4% 95.0% 50.1%
Thayer Park May-17 522 19.3 1.4% 1.8 8.89% 7.08% 1.81% 1.92% 14.5% 100.8% 50.1%
Catskill Park May-17 511 39.5 0.7% 0.0 8.89% 7.96% 0.93% 1.32% 13.5% 93.5% 50.1%
Dewolf Park Aug-17 552 22.4 1.0% 0.0 8.84% 7.11% 1.73% 1.83% 16.0% 106.0% 50.1%
Gilbert Park Oct-17 708 36.5 1.3% 0.0 8.80% 7.53% 1.28% 1.46% 14.5% 94.0% 50.1%
Long Point Park Dec-17 407 20.8 0.8% 0.0 8.79% 7.21% 1.58% 1.73% 18.8% 118.4% 50.1%
Stewart Park Jan-18 640 65.0 0.8% 0.0 8.81% 7.26% 1.55% 1.69% 11.5% 71.5% 50.1%
Cook Park Apr-18 786 37.8 1.6% 0.0 8.89% 7.07% 1.82% 1.91% 16.7% 100.5% 50.1%
Fillmore Park Jul-18 470 21.3 1.4% 0.0 8.90% 7.04% 1.85% 1.96% 17.5% 99.7% 52.3%
Harbor Park Dec-18 678 28.0 2.3% 0.0 8.82% 6.75% 2.06% 1.93% 15.5% 83.0% 50.1%
Southwick Park Aug-19 503 18.4 1.8% 0.1 8.95% 6.92% 2.04% 2.10% 18.7% 87.3% 59.9%
Beechwood Park Dec-19 816 34.5 3.2% 2.5 8.73% 7.06% 1.67% 1.75% 17.1% 74.0% 61.1%
Allegany Park Jan-20 506 21.3 2.2% 2.6 8.59% 7.08% 1.52% 1.73% 15.9% 67.6% 66.2%
Harriman Park Apr-20 498 20.6 2.4% 1.8 8.69% 7.05% 1.64% 1.79% 21.8% 87.3% 70.0%
Cayuga Park Aug-20 397 16.1 1.9% 2.0 8.71% 6.94% 1.77% 1.89% 25.8% 95.0% 72.0%
Point Au Roche Park Jun-21 457 18.7 1.9% 2.1 8.74% 7.07% 1.67% 1.77% 18.8% 52.8% 61.2%
Peace Park Sep-21 660 27.5 2.9% 2.3 8.72% 7.02% 1.70% 1.76% 18.7% 47.8% 60.8%
Whetstone Park Dec-21 506 20.2 2.2% 2.6 8.86% 6.99% 1.86% 1.93% 20.1% 47.7% 62.5%
Boyce Park Mar-22 762 31.5 3.4% 2.8 8.83% 6.91% 1.92% 2.01% 20.4% 43.1% 61.8%
Tallman Park May-21 410 1.5 0.2% 1.8 8.77% 7.12% 1.65% 1.77% 19.8% 57.3% 5.0%
Wehle Park Apr-22 547 1.8 0.2% 2.8 8.78% 7.14% 1.63% 1.73% 21.1% 43.4% 5.0%
Redeemed Or Fully Sold CLOs Region Vintage Sale/ BCF Position Current Valuation as % of BCF Realised IRR Ann. Distribution
Redemption Date
Prior To Exit (m)
To Date 20 (#_edn20)
Through Last Payment 21 (#_edn21)
NAV 19 (#_edn19)
Myers Park US 2018 Mar-21 $26.4 N/A 11.1%* 16.4%
Greenwood Park US 2018 Mar-21 $53.9 N/A 19.0%* 19.7%
Orwell Park Europe 2015 May-21 € 24.2 N/A 13.6%* 23.5%
Stratus 2020-2 US 2020 Jun-21 $24.2 N/A 37.6% 93.3%
Niagara Park US 2019 Aug-21 $22.1 N/A 16.6%* 14.9%
Sorrento Park Europe 2014 Oct-21 € 29.5 N/A 9.7%* 18.2%
Castle Park Europe 2014 Oct-21 € 24.0 N/A 11.7%* 23.3%
Dorchester Park US 2015 Oct-21 $44.5 0.01% 11.5%* 20.5%
Buckhorn Park US 2019 Feb-22 $24.2 N/A 16.0%* 19.5%
( )
As of 30 June 2024, the Company was invested in accordance with its and BCF's
investment policy and was diversified across 650+ issuers through directly
held loans and the CLO portfolio, across 27 industries and 30 different
countries 22 (#_edn22) . No individual borrower represented more than 2% of
the overall portfolio at the end of June 2024.
Key Portfolio Statistics
% of Current WA Current WA WA Remaining
NAV 23 (#_edn23) Asset Coupon 24 (#_edn24) Liability 25 (#_edn25) RPs (CLOs)
EUR CLOs 56.08% 7.37% 5.77% 1.2 Years
US CLOs 37.92% 8.81% 7.19% 1.0 Years
Directly Held Loans 26 (#_edn26) 0.27% 8.07% n/a n/a
Net Cash & Expenses 5.73% - - n/a
Total Portfolio 100.00% 8.04% 6.43% 1.1 Years
Top 10 Industries 27 (#_edn27)
Industry % of portfolio
30 June 2024
Healthcare and pharmaceuticals 15.3%
Services Business 10.8%
High tech industries 28 (#_edn28) 10.3%
Banking, finance, insurance and real estate (FIRE) 8.7%
Media broadcasting and subscription 7.0%
Construction and building 6.6%
Hotels, gaming and leisure 4.9%
Capital equipment 4.3%
Chemicals, plastics and rubber 4.3%
Services Consumer 4.2%
Industry % of portfolio
31 December 2023
Healthcare and pharmaceuticals 15.9%
Services business 10.0%
High tech industries28 9.6%
Banking, finance, insurance and real estate (FIRE) 8.6%
Media broadcasting and subscription 7.6%
Construction and building 6.1%
Hotels, gaming and leisure 5.0%
Capital equipment 4.6%
Chemicals, plastics and rubber 4.5%
Telecoms 3.9%
Top 5 Countries27
Country % of portfolio
30 June 2024
US 51.7%
France 11.1%
UK 8.1%
Luxembourg 6.2%
Netherlands 5.8%
Country % of portfolio
31 December 2023
US 50.0%
France 10.5%
UK 7.6%
Luxembourg 6.7%
Netherlands 6.1%
Top 20 Issuers
29 (#_edn29)
# Facilities Portfolio Par (€M) Total Par Outstanding (€M) Moody's Industry Country WA Price WA Spread WA Coupon (All-In Rate) WA Maturity (Years)
Numericable 11 213 14,235 Media Broadcasting and Subscription France 72.4 4.54% 6.99% 4.0
Numericable is one of the largest telecom operators in France by revenues and
number of subscribers, with major positions in residential fixed, residential
mobile, B2B, wholesale and media.
VodafoneZiggo 4 209 6,929 Media Broadcasting and Subscription Netherlands 94.1 3.14% 6.06% 4.9
VodafoneZiggo is a leading operator in the Netherlands that provides fixed,
mobile and integrated communication and entertainment services to consumers
and businesses. The company was created as a result of a JV between Liberty
Global & Vodafone.
Virgin Media 9 209 11,194 Media Broadcasting and Subscription US 95.8 2.95% 6.49% 4.8
Virgin Media O2 is an integrated communications provider of mobile, broadband
internet, video and fixed-line telephony services to residential customers and
businesses in the UK. The company was created as a result of a Joint Venture
between Liberty Global & Telefonica.
ION Markets 3 192 3,818 Banking, Finance, Insurance and Real Estate (FIRE) Ireland 97.0 4.21% 8.35% 3.8
ION Markets is a global financial software and services company that provides
high performance trading solutions to banks, hedge funds, brokers and other
financial institutions, across electronic fixed income, currencies, equities,
derivatives and commodities markets.
Grifols 3 168 4,791 Healthcare and Pharmaceuticals Spain 93.1 2.63% 5.77% 3.6
Grifols is a global healthcare company producing plasma-derived medicines and
transfusion medicine. The company is organised into four divisions:
Bioscience, Diagnostic, Hospital and Bio Supplies & Other.
Paysafe 4 161 2,180 Banking, Finance, Insurance and Real Estate (FIRE) US 97.2 3.04% 5.81% 4.3
Paysafe is a leading specialised payments platform, with revenues derived from
Payment Processing, eWallets, and eCash accounts. Paysafe is a global leader
in the Gaming eCash segment, digital gambling wallets, and the Merchant
Acquirer segment in the US, with a presence in Europe also.
Froneri 2 160 4,572 Beverage, Food and US 99.9 2.18% 6.72% 2.6
Tobacco
Froneri is a global ice cream manufacturer with its headquarters in North
Yorkshire, England. It is the second largest ice cream producer by volume in
the world, after Unilever. Froneri was created in 2016 as a joint venture
between Nestle and PAI Partners to combine their ice cream activities.
McAfee Corp 2 159 6,308 High Tech Industries US 99.9 3.41% 7.74% 4.7
McAfee is the one of the largest security software vendors globally. McAfee is
a major player in the consumer security market, with a focus on consumer
endpoint protection. McAfee simplifies the complexity of threat detection and
response by correlating events, detecting new threats, reducing false
positives, automating, and prioritizing incident response, and creating
workflows that result in remediation.
Allied Universal 4 154 7,434 Services Business US 97.3 3.75% 7.25% 3.9
Allied Universal is the largest provider of security systems and services
globally, serving North America, Europe, the Middle East, Africa, Asia Pacific
and Latin America.
Telenet International 3 140 3,791 Media Broadcasting and Subscription Belgium 97.3 2.17% 6.42% 4.4
Telenet is one of the largest cable operators in Belgium that provides
internet, TV, fixed and mobile telephony to consumers and businesses in
Flanders and Brussels. It also provides mobile telephony services in the
Wallonia region.
Independent Vetcare 1 140 2,417 Healthcare and Pharmaceuticals UK 100.0 5.00% 8.80% 4.5
Independent Vetcare is the largest veterinary practice group in Europe. The
company generates the majority of its revenue in the UK, where it is a market
leader, and is also present in Sweden, the Netherlands, Finland, Germany,
Norway, Denmark, Switzerland and North America.
UPC 5 139 4,515 Media Broadcasting and Subscription US 98.9 2.88% 6.88% 4.8
UPC is a cable operator in Switzerland, Poland & Slovakia. It offers
broadband, tv and mobile services.
Apex Group 3 129 3,019 Banking, Finance, Insurance and Real Estate (FIRE) US 100.3 4.05% 8.46% 4.1
Apex Group is a leading global fund administration services provider with over
100 offices worldwide and 12,200 employees and 10,000+ clients, delivering a
broad range of solutions to asset managers, capital markets and family
offices.
TKE 3 127 5,005 Capital Equipment Luxembourg 100.2 3.65% 7.78% 3.9
Thyssenkrupp Elevators is one of the largest global market leaders for
elevator and escalator technology. The company designs, manufacturers,
installs, services, and modernises elevators, escalators, and platform lifts.
Masorange 5 121 7,134 Telecoms UK 99.7 3.73% 7.00% 6.0
Masorange is the largest telecom operator in Spain, with market leading
positions in fixed and mobile. Masorange benefits from good quality and owned
fixed infrastructure, with a fully developed Fiber to the home (FTTH) network.
It also has nationwide wholesale agreements in place, which provide it with
full coverage of the Spanish market.
Constantin Investissement 1 SA 4 118 3,415 Healthcare and Pharmaceuticals France 90.3 3.79% 7.38% 4.1
Cerba (Constantin Investissement) is a leading European clinical pathology
laboratory, providing routine and specialised clinical laboratory testing
services primarily in France, Belgium and Luxembourg, and supporting
pharmaceutical and biotechnology companies worldwide in the clinical trial
phase of their drug development processes.
Apex Group 3 133 2,962 Banking, Finance, Insurance and Real Estate (FIRE) US 99.2 4.05% 8.56% 4.6
Apex Group is a leading global fund administration services provider with over
100 offices worldwide and 12,200 employees and 10,000+ clients, delivering a
broad range of solutions to asset managers, capital markets and family
offices.
Tackle Sarl Lux 1 115 1,455 Hotels, Gaming and Leisure Luxembourg 99.9 3.50% 7.32% 3.9
Tipico (Tackle Sarl) is one of the largest sport betting provider in Germany
by market share. Tipico operates through its proprietary platform and fully
licensed in the newly regulated Germany market.
Biogroup 4 114 3,150 Healthcare and Pharmaceuticals France 95.8 3.53% 6.79% 3.6
Biogroup is a leading laboratory services company mainly in France and
Belgium. The company assists physicians in the diagnosis of a variety of
medical conditions through the provision of a range of diagnostic testing
services on (primarily blood and urine) samples collected from the patients.
The company is one of the market leaders in French routine testing and also
has the ability to perform certain specialised tests.
Odyssey Investissement SASU (Circet) 1 114 2,000 Telecoms France 98.6 3.25% 6.97% 4.3
Circet is a leading provider of telecom infrastructure services in France, UK,
Ireland and Spain, covering all fixed (copper/cable/fibre) and mobile
(2G/3G/4G) technologies.
Home Vi (Domus VI) 2 114 3,140 Healthcare and Pharmaceuticals France 98.0 4.98% 5.03% 5.3
Home Vi is one of the largest operator of nursing homes in France and one of
the largest operator of nursing homes and psychiatric facilities in Spain. It
also has a growing presence in Germany, Portugal, Ireland, the Netherlands and
LatAm.
Regulatory Update
The Digital Operations Resilience Act ("DORA") entered into force on 16
January 2023 and will apply to in-scope financial services entities from 17
January 2025. DORA aims to strengthen resilience, reliability, and continuity
of financial services throughout the EU. BXCI continues to monitor regulatory
developments with regards to DORA and is taking the necessary steps to ensure
compliance with the requirements.
Directive (EU) 2024/927 (AIFMD II) entered into force on 15 April 2024 and
member states of the European Economic Area have until 16 April 2026 to
implement its rules, subject to certain measures that member states must
implement from 16 April 2027. AIFMD II provides a harmonised regime for loan
origination funds, and includes new requirements as regards delegation
arrangements, liquidity risk management, supervisory reporting and the
provision of depositary and custody services. BXCI continues to monitor
regulatory developments in anticipation of AIFMD II entering into force in
local law in April 2026.
The final elements of the new EU AML / CFT package of legislative proposals to
deliver a stronger and consistent set of anti-money laundering and countering
the financing of terrorism rules at EU level, originally proposed on 20 July
2021 by the European Commission, were adopted by the Council and the European
Parliament. On 19 June 2024, the final texts were published in the Official
Journal.
On 6 April 2022, the European Commission adopted the Delegated Regulation (as
amended from time to time) supplementing EU Regulation (EU) 2019/2088 (the
"SFDR") with regard to the regulatory technical standards ("RTS") specifying
the details of the content and presentation of the information in relation to
the principle of "do no significant harm", information in relation to
sustainability indicators and adverse sustainability impacts and the content
and presentation of the disclosure regarding the promotion of environmental or
social characteristics (Article 8 SFDR) and sustainable investment objectives
(Article 9 SFDR) in pre-contractual documents, on websites and in periodic
reports. The SFDR RTS have applied since 1 January 2023. BXCI continues to
monitor regulatory developments with regards to SFDR on an ongoing basis.
BXCI continues to monitor the regulatory environment for any developments with
regard to the EU Securitisation rules.
Risk Management
Given the natural asymmetry of fixed income, our experienced credit team
focuses on truncating downside risk and avoiding principal impairment and
believes that the best way to control and mitigate risk is by remaining
disciplined in all market cycles and by making careful credit decisions while
maintaining adequate diversification.
BCF's portfolio is managed to minimise default risk and credit related losses,
which is achieved through in-depth fundamental credit analysis and diversified
portfolios in order to avoid the risk of any one issuer or industry adversely
impacting overall performance. As outlined in the Portfolio Update section,
BCF is broadly diversified across issuers, industries and countries.
BCF's base currency is denominated in Euro, though investments are also made
and realised in other currencies. Changes in rates of exchange may have an
adverse effect on the value, price or income of the investments of BCF. BCF
may utilise different financial instruments to seek to hedge against declines
in the value of its positions as a result of changes in currency exchange
rates.
Through the construction of solid credit portfolios and our emphasis on risk
management, capital preservation and fundamental credit research, we believe
the Company's investment strategy will continue to be successful.
Blackstone's Firmwide Approach to ESG
Blackstone aims to develop resilient companies and competitive assets that
deliver long-term value for our investors. ESG principles have long informed
the way we run our firm, approach investing and partner with the assets in our
portfolio. In recent years we have formalized our approach by building
dedicated ESG teams that look to develop value accretive ESG policies and
support integration within the business units and regularly report progress.
Blackstone's approach to sustainability is rooted in responsible investing and
operational improvements to drive value for our investors. Material 30
(#_edn30) and applicable ESG considerations are incorporated into investment
decisions to avoid risk and create value for investors. Blackstone's portfolio
of companies and assets across sectors and geographies enables us to think
about sustainability from multiple vantage points. As investors, we consider
material ESG factors both during the due diligence of potential investments
and throughout the investment period to drive value.
Blackstone maintains a robust staff of professionals from various disciplines
who focus on ESG at the firm to enhance the value of our investments,
consistent with our fiduciary responsibilities to our clients. Our Corporate
ESG team is responsible for firmwide coordination to ensure the firm delivers
upon its ESG initiatives and provides transparency for management, partners,
and investors. Business unit ESG teams are responsible for implementing
signature ESG programs where applicable, integrating ESG throughout the
investment lifecycle as appropriate, and creating value for portfolio
companies and assets through ESG initiatives within our major businesses.
BXCI's Approach to ESG
At BXCI, we believe that a key aspect of being a responsible investor is an
active evaluation of certain environmental, social and governance components
of our investments and recognize the value such evaluation can provide as we
seek to grow and protect investors' assets while managing risk. To that end,
during the due diligence phase of an investment, investment teams within BXCI
aim to consider material ESG factors that may impact investment performance to
drive value. Due diligence of relevant ESG considerations varies by investment
strategy and is based on factors that may include (i) the nature of BXCI's
investment, (ii) the transaction process and timeline, (iii) the level of
access to information, specifically as it pertains to ESG factors and (iv) the
target portfolio company's business model.
BXCI's Global Head of ESG, Rita Mangalick, oversees ESG policy integration,
reporting, engagement, and value creation initiatives within BXCI. Ms.
Mangalick is supported by several members of the BXCI ESG team. Additionally,
BXCI has an ESG Working Group, which discusses a variety of ESG-related topics
to drive value, including, as applicable: review of investments; investor
requests; market trends and newly adopted or pending legislation, rules, and
regulation.
BXCI's ESG Due Diligence Approach
BXCI's focus on ESG stems from our commitment to prudent investing and our
culture that prioritises robust corporate governance. We seek to identify
material ESG risks and opportunities throughout the diligence process and
consider how these factors may be used to enhance the sustainability profile
of our investments to improve investor returns and drive value, where it is
consistent with the investment strategy and where we have ability to do so. We
incorporate ESG principles into our investment process with approaches
tailored to our various strategies.
Comprehensive Due Diligence
To effectively integrate the consideration of relevant ESG factors into the
due diligence stage of our investment process to drive long-term value, it is
important for our team to understand how to best identify and assess ESG
factors that may be applicable to a particular investment. We learned that
these factors can vary significantly across industries, leading us to partner
with a third-party ESG consultant to create a sector-specific tool that
provides a framework to conduct relevant ESG due diligence. This tool, which
is based on Sustainability Accounting Standards Board ("SASB") standards, is
available to our investment teams to help them evaluate material ESG risks and
opportunities that may impact a company's performance, enabling us to assess
and mitigate these factors in a more targeted fashion to drive value. The tool
includes industry-specific due diligence questions, potential KPIs to track,
detailed guidance on considerations for evaluating the topic and recommended
resources for additional research.
Investment Committee Engagement and Documentation
Analysis of identified ESG-related risks and opportunities may be presented to
the Investment Committee for review questions, and feedback on its views of
material ESG factors and due diligence that has been performed. If material
ESG concerns are identified, BXCI may seek to address the situation, as
appropriate, including, but not limited to, via additional due diligence,
hiring specialist advisors, attempting to facilitate further discussions with
company management or possibly contributing to a decision not to invest.
Active Post-Investment Monitoring
During the holding period of an investment, the investment team actively
monitors the investment and provides updates to the Investment Committee, as
needed, including with respect to ESG-related factors for certain investment
strategies. As part of this process, members of the investment team may
facilitate direct dialogue with company management as well as track material
ESG factors that may have an impact on company performance during the
anticipated holding period of our investment.
ESG Disclaimer
Blackstone may select or reject portfolio companies or investments on the
basis of ESG related investment risks, and this may cause Blackstone's funds
and/or portfolio companies to underperform relative to other sponsors' funds
and/or portfolio companies which do not consider ESG factors at all or which
evaluate ESG factors in a different manner. While Blackstone believes ESG
factors can enhance long term value, Blackstone does not pursue an ESG based
investment strategy or limit its investments to those that meet specific ESG
criteria or standards, except with respect to products or strategies that are
explicitly designated as doing so in their Offering Documents or other
applicable governing documents. Any such ESG factors do not qualify
Blackstone's objectives to seek to maximize risk adjusted returns. The ESG
practices and initiatives mentioned in these disclosures may not apply to some
or all of the Company's investments and none are binding aspects of the
management of the Company. The Company does not promote environmental or
social characteristics, nor does it have sustainable investments as its
objective.
ESG initiatives described in these disclosures related to Blackstone's
portfolio, portfolio companies, and investments (collectively, "portfolio
companies") are aspirational and not guarantees or promises that all or any
such initiatives will be achieved. Statements about ESG initiatives or
practices related to portfolio companies do not apply in every instance and
depend on factors including, but not limited to, the relevance or
implementation status of an ESG initiative to or within the portfolio company
the nature and/or extent of investment in, ownership of, control or influence
exercised by Blackstone with respect to the portfolio company and other
factors as determined by investment teams, corporate groups, asset management
teams, portfolio operations teams, companies, investments, and/or businesses
on a case by case basis. In particular, the ESG initiatives or practices
described in these disclosures are less applicable to or not implemented at
all with respect to Blackstone's public markets investing businesses,
specifically, Credit, Hedge Fund Solutions (BXMA) and Harvest. In addition,
Blackstone will not pursue ESG initiatives for every portfolio company. Where
Blackstone pursues ESG initiatives for portfolio companies, there is no
guarantee that Blackstone will successfully enhance long term Shareholder
value and achieve financial returns. There can be no assurance that any of the
ESG initiatives described in this report will exist in the future, will be
completed as expected or at all, or will apply to or be implemented uniformly
across Blackstone business units or across all portfolio companies within a
particular Blackstone business unit. Blackstone may select or reject portfolio
companies or investments on the basis of ESG related investment risks, and
this may cause Blackstone's funds and/or portfolio companies to underperform
relative to other sponsors' funds and/or portfolio companies which do not
consider ESG factors at all or which evaluate ESG factors in a different
manner. Any selected investment examples, case studies and/or transaction
summaries presented or referred to in these disclosures are provided for
illustrative purposes only and should not be viewed as representative of the
present or future success of ESG initiatives implemented by Blackstone or its
portfolio companies or of a given type of ESG initiatives generally. There can
be no assurances that Blackstone's investment objectives for any fund will be
achieved or that its investment programs will be successful. Past performance
is not a guarantee of future results.
Blackstone Ireland Limited
19 September 2024
Strategic Overview
Principal Activities
The Company is a closed-ended investment company incorporated on 30 April 2014
as a limited by shares company under the Company (Jersey) Law 1991 with
registered number 115628. In addition, the Company constitutes and is
regulated as a collective investment fund under the Collective Investment
Funds (Jersey) Law 1988. The Company continues to be registered and domiciled
in Jersey. The Company's redeemable shares are quoted on the Main Market of
the LSE. Refer to page 24 of the 31 December 2023 Annual Report and Audited
Financial Statements for more details.
The Company has a wholly-owned Luxemburg subsidiary, Blackstone / GSO Loan
Financing (Luxembourg) S.à r.l. which currently has an issued share capital
of 2,000,000 Class A shares and 1 Class B share. As at 30 June 2024, 100% of
the Class A and Class B shares were held by the Company together with
190,371,884 Class B CSWs issued by the Lux Subsidiary. The Lux Subsidiary
invests in PPNs issued by BCF, which in turn invests in CLOs and loans.
Investment Objective
Following the decision made by Shareholders on 15 September 2023 to implement
a managed wind-down of the Company, the new investment objective of the
Company is to realise all existing assets in its portfolio in an orderly
manner.
Investment Policy
The Company will pursue its investment objective by effecting an orderly
realisation of its assets by redeeming and/or by disposing for cash the PPNs
issued by BCF and held by the Company (indirectly through a subsidiary) (the
"LuxCo PPNs"). The Company will make timely returns of capital to Shareholders
principally by redeeming multiple portions of its issued redeemable shares
during the course of the managed wind-down (or in such other manner as the
Directors consider appropriate).
The Company does not hold any assets other than the LuxCo PPNs. Upon
redemption of the LuxCo PPNs, the Company will cease to make any new
investments or to undertake capital expenditure except as deemed necessary or
desirable by the Board in connection with the managed wind-down.
Any amounts received by the Company during the managed wind-down will be held
by the Company as cash on deposit and/or as cash equivalents, prior to returns
being made in cash to Shareholders (net of provisions for the Company's costs
and expenses).
Borrowings and Derivatives
The Company will not undertake borrowing other than for short-term working capital purposes. The Company may use derivatives for hedging as well as for efficient portfolio management.
Changes to the Company's Investment Policy
Any material change to the Company's new investment policy will be made only with the approval of the Shareholders.
Redemption of redeemable shares
The Board implements the managed wind-down by returning to Shareholders the
net proceeds from the realisation of the Company's investment in BCF in an
orderly manner by way of the compulsory redemption of redeemable shares (in
respect of proceeds received from BCF attributable to the early redemption,
maturity or sale of underlying investments or pursuant to a disposal of the
LuxCo PPNs for cash).
As part of the managed wind-down, the Company, through the Lux Subsidiary, has
delivered a redemption request in accordance with the terms of the LuxCo PPNs.
A pro-rata portion of the assets and investments of BCF (including indirect
investments held through BCM LLC) has been placed into a redemption pool (the
"Redemption Pool"). As the assets in the Redemption Pool redeem and are
realised, the proceeds thereof, net of any actual or reasonably anticipated
liabilities, costs, expenses, debt service of BCF, BCM LLC and the Lux
Subsidiary and any actual or reasonably anticipated costs, liabilities, margin
or collateral requirements related to hedging transactions entered by BCF,
will be utilised to redeem the LuxCo PPNs.
On 23 May 2024, the Company announced its first return of capital which was
paid to shareholders on 24 June 2024. This return of capital was effected by
way of a compulsory partial redemption and cancellation of 24,779,135
redeemable shares at a rate of €0.9282 per redeemable share on 10 June 2024.
The rate is determined by the prevailing Published NAV per share at the time
of announcement and adjusted (including taking into account the attributable
costs) as the Directors consider appropriate.
On 19 July 2024, the Company announced that it is evaluating another return of
capital through the compulsory redemption of redeemable shares by the end of
December 2024.
Having consulted with the Portfolio Adviser, the Board continues to anticipate
that the redemption of the CLOs investments held in BCF and BCM LLC will
require a total period of approximately 7 years. However, this is indicative
only and it should not be considered a guarantee of the Company's actual
liquidity profile.
Refer to sections 3.1 and 3.2 of the Circular for further details.
Directors' Interests
The Directors held the following number of redeemable shares in the Company as
at the period end and the date these condensed interim financial statements
were approved:
Directors As at 30 June 2024 As at 31 December 2023
Steven Wilderspin 18,881 20,000
Mark Moffat 728,409 771,593
Giles Adu - -
Belinda Crosby - -
Further to the announcement on 23 May 2024 in relation to the compulsory
partial redemption of the Company's redeemable shares, Mr Mark Moffat and Mr
Steven Wilderspin have had 43,184 and 1,119 redeemable shares redeemed
respectively on 10 June 2024.
Risk Overview
Each Director is aware of the risks inherent in the Company's business and understands the importance of identifying, evaluating and monitoring these risks. The Board has adopted procedures and controls to enable it to manage these risks within acceptable limits and to meet all of its legal and regulatory obligations.
The Board considers the process for identifying, evaluating and managing any
significant risks faced by the Company on an ongoing basis and these risks are
reported and discussed at Board meetings. It ensures that effective controls
are in place to mitigate these risks and that a satisfactory compliance regime
exists to ensure all applicable local and international laws and regulations
are upheld.
Risk Appetite
Following the vote by Shareholders for a managed wind-down of the Company on
15 September 2023, the Board's updated strategic risk appetite is to balance
the amount distributed by the Company with the retention of a prudent cash
buffer to cover ongoing operating expenses. The Board considers that the
retention of a cash buffer sufficient to cover an estimated two years of
operating expenses is an appropriate amount. Future distributions will be by
way of dividend, in line with the sustainable dividend policy which will
continue to be communicated to Shareholders, and by the redemption of shares.
When considering other risks, the Board's risk appetite is effectively
governed by a cost benefit analysis while assessing mitigation measures. At
all times, the Company will seek to follow best practice and remain compliant
with all applicable laws, rules and regulations.
Principal Risks and Uncertainties
As recommended by the Risk Committee, the Board has adopted a risk management
framework to govern how the Board identifies existing and emerging risks,
determines risk appetite, identifies mitigation and controls and how the Board
assesses, monitors, measures and reports on risks.
The Board reviews risks at least twice a year and receives deep-dive reports
on specific risks as recommended by the Risk Committee. Throughout the year
under review, the Board considered a set of sixteen main risks which have a
higher probability and a significant potential impact on performance,
strategy, reputation or operations (Category A risks). Of these, the four
risks identified below were considered the principal risks faced by the
Company where the combination of probability and impact was assessed as being
most significant.
The Portfolio Adviser continues to monitor the very small number of companies
which the Company is exposed to, that may be impacted by the current
geopolitical tensions in Europe and the Middle East. Opportunities have been
taken to trim the exposure, so it is now negligible.
The global macro-economic environment continued to experience high levels of
inflation and interest rates during 2024. More recently, macro-economic
conditions have seen falls in inflation with market expectations of a peak in
interest rates having been reached. The Portfolio Adviser has focused on
positioning the underlying portfolio appropriately. The Portfolio Adviser has
closely monitored these positions and managed their risk accordingly. The
Board has considered risks arising from the managed wind-down in its risk
assessment. The commentary below describes the factors affecting each of the
principal risks during the period:
Principal Risks Description
Investment performance Unsatisfactory investment performance in absolute terms or relative to peers.
Remained heightened in the period given the macro-economic environment.
Share price discount to NAV per redeemable share The existence of a share price discount, particularly one that is wider than
that of peers. Remained heightened in the period with the discount in the
range 28.35% to 36.97%.
Investment valuation Error or misjudgment in valuation of the Company's underlying CLO investments.
Stable in the period.
Operational Reliance on service providers to conduct the Company's operations and deliver
its investment strategy. Increased in the period with some staff turnover and
strategic pressures on key service providers.
Refer to pages 37 to 38 of the 31 December 2023 Annual Report and Audited
Financial Statements for the detailed commentary on each of the principal
risks stated above.
Going Concern
As the Company is in managed wind-down, the condensed interim financial
statements have been prepared on a basis other than going concern. Refer to
Note 2.2 in the 'notes to the condensed interim financial statements' for
further details.
Other Information
Valuation Methodology
As noted above, the Published NAV and the IFRS NAV may diverge because of
different key assumptions used to determine the valuation of the BCF
portfolio. Key assumptions which are different between the two bases as at 30
June 2024 and 31 December 2023 are detailed below:
Asset Valuation Methodology Input IFRS Published IFRS Published
NAV NAV NAV NAV
30 June 2024 31 December 2023
CLO Securities Discounted Constant Default 2.00% 2.00%
Cash Flows Rate 31 (#_edn31) 2.00% 2.00%
Constant Prepayment Rate 20.00% 25.00% 25.00% 25.00%
Reinvestment Spread (bp over SOFR) 385.14 363.87 405.40 363.68
Recovery Rate Loans 65.00% 65.00% 65.00% 65.00%
Recovery Lag (Months) - - - -
Discount Rate 32 (#_edn32) 18.01% 15.00% 25.91% 15.00%
All of the assumptions above are based on weighted averages.
The below table further explains the rationale regarding the differences in
the assumptions that significantly contributed to the valuation divergence as
at 30 June 2024:
Assumption IFRS NAV Published NAV
Reinvestment Spread Largely weighted by a CLO's current portfolio weighted average spread, which Represents a normalised, long-term view of loan spreads to be achieved over
assumes that the CLO investment manager will continue to reinvest in the life of the CLO's remaining reinvestment period. Initially informed by the
collateral with a similar spread and rating composition to the existing underwriting model at issuance, the assumption is periodically reviewed and
collateral pool. In addition, weighting may be given to primary loan spreads updated to the extent of secular changes in loan spreads.
to the extent current primary market opportunities suggest different spreads
than the existing portfolio.
Discount Rate Intended to reflect the market required rate of return for similar securities Based on the expected rate of return for a newly originated CLO equity
and is informed by market research, BWICs, market colour for comparable security on a hold to maturity basis. The expected rate of return is based on
transactions and dealer runs. The discount rate may vary based on underlying a long-term market average and is periodically reviewed and updated to the
loan prices, exposure to distressed assets or industries, manager performance extent of secular changes in the market.
and time remaining in reinvestment period.
Alternative Investment Fund Managers' Directive ("AIFMD")
The AIFMD requires certain information to be made available to investors in
AIFs before they invest and requires that material changes to this information
be disclosed in the annual report of each AIF. There have been no material
changes (other than those reflected in these condensed interim financial
statements) to this information requiring
disclosure.
Alternative Performance Measures ("APMs")
In accordance with ESMA Guidelines on APMs, the Board has considered which
APMs are included in the Half Yearly Financial Report and require further
clarification. An APM is defined as a financial measure of historical or
future financial performance, financial position, or cash flows, other than a
financial measure defined or specified in the applicable financial reporting
framework. APMs included in the condensed interim financial statements, which
are unaudited and outside the scope of IFRS, are detailed in the table below:
Published NAV Total Return per Redeemable Share 33 (#_edn33) Published NAV per Redeemable Share33 (Discount)/Premium to Published NAV per Redeemable Share33
Definition The increase in the Published NAV per redeemable share plus the total Gross assets less liabilities (including accrued but unpaid fees) determined BGLF's closing share price on the LSE less the Published NAV per redeemable
dividends paid per redeemable share during the period, with such dividends in accordance with the section entitled "Net Asset Value" in Part I of the share as at the period end, divided by the Published NAV per redeemable share
paid being re-invested at NAV, as a percentage of the NAV per redeemable share Company's Prospectus, divided by the number of redeemable shares at the as at that date.
as at period end. relevant time.
Reason NAV total return summarises the Company's true growth over time while taking The Published NAV per redeemable share is an indicator of the intrinsic value The discount or premium per redeemable share is a key indicator of the
into account both capital appreciation and dividend yield. of the Company. discrepancy between the market value and the intrinsic value of the Company.
Target 11%+ Not applicable Maximum discount of 7.5%
Performance
2024 5.64% 0.9072 (28.35)%
2023 10.39% 0.9098 (35.15)%
2022 5.22% 0.9081 (26.77)%
2021 21.82% 0.9407 (15.75)%
2020 (0.22)% 0.8435 (20.57)%
2019 14.46% 0.9187 (10.20)%
A reconciliation of the APMs to the most directly reconcilable line items
presented in the condensed interim financial statements for the six months
ended 30 June 2024 and the year ended 31 December 2023 is presented below:
Published NAV Total Return per Redeemable Share
Six months ended Year ended
30 June 2024 31 December 2023
Opening Published NAV per Redeemable Share (A) €0.9098 €0.9081
Adjustments per Redeemable Share (B) €(0.1848) €(0.2297)
Opening IFRS NAV per Redeemable Share (C=A+B) €0.7250 €0.6784
Closing Published NAV per Redeemable Share (D) €0.9072 €0.9098
Adjustments per Redeemable Share (E) €(0.0994) €(0.1848)
Closing IFRS NAV per Redeemable Share (F=D+E) €0.8078 €0.7250
Dividends Paid during the Period/Year (G) €0.0525 €0.0875
Published NAV Total Return per Redeemable Share 9.82%
(H=(D-A+G)/A) 5.49%
Impact of Dividend Re-Investment (I) 0.15% 0.57%
Published NAV Total Return per Redeemable Share with Dividends Re-invested
(J=H+I)
5.64% 10.39%
IFRS NAV Total Return per Redeemable Share 19.76%
(K=(F-C+G)/C) 18.66%
Impact of Dividend Re-Investment (L) (0.60)% (2.00)%
IFRS NAV Total Return per Redeemable Share with Dividends Re-invested (M=K+L) 17.76%
18.06%
Refer to Note 13 for further details on the adjustments per redeemable share.
Published NAV per Redeemable Share
30 June 2024 31 December 2023
Published NAV per Redeemable Share (A) €0.9072 €0.9098
Adjustments per Redeemable Share (B) €(0.0994) €(0.1848)
IFRS NAV per Redeemable Share (C=A+B) €0.8078 €0.7250
Refer to Note 13 for further details on the adjustments per redeemable share.
Discount per Redeemable Share
30 June 2024 31 December 2023
Published NAV per Redeemable Share (A) €0.9072 €0.9098
Adjustments per Redeemable Share (B) €(0.0994) €(0.1848)
IFRS NAV per Redeemable Share (C=A-B) €0.8078 €0.7250
Closing Share Price as at the Period End per the LSE (D) €0.6500 €0.5900
Discount to Published NAV per Redeemable Share (E=(D-A)/A) (28.35)% (35.15)%
Discount to IFRS NAV per Redeemable Share (F=(D-C)/C) (19.53)% (18.62)%
Refer to Note 13 for further details on the adjustments per redeemable share.
Significant Events after the Reporting Period
Dividends
On 19 July 2024, the Company declared a dividend of €0.0225 per redeemable
share in respect of the period from 1 April 2024 to 30 June 2024. A total
payment of €9,404,095 was made on 6 September 2024.
Outlook
It is the Board's intention that the Company will continue to pursue its new
investment objective and investment policy as detailed below, through an
orderly managed wind-down of the Company and return of cash to the
Shareholders of the Company, via redemption of shares while maintaining a
sustainable dividend payment. Further comments on the outlook for the Company
for the 2024 financial year and the main trends and factors likely to affects
its future development, performance and position are contained within the
Chair's Statement and the Portfolio Adviser's Review.
Related Parties
There have been no material changes to the nature of related party
transactions as described in the 31 December 2023 Annual Report and Audited
Financial Statements. Refer to Note 14 for more information on related party
transactions.
The Directors are responsible for preparing the Half Yearly Financial Report
and condensed interim financial statements in accordance with applicable law
and regulations.
The Directors confirm to the best of their knowledge that:
· the condensed interim financial statements within the
Half Yearly Financial Report have been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the EU and give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company as at 30 June 2024, as required by the UK's FCA's DTR 4.2.4R; and
· the Strategic Report and the notes to the condensed
interim financial statements include a fair review of the information required
by:
i. DTR 4.2.7R, being an indication of important events
that have occurred during the first six months ended 30 June 2024 and their
impact on the condensed interim financial statements; and a description of the
principal risks and uncertainties for the remaining six months of the year;
and
ii. DTR 4.2.8R, being related party transactions that have
taken place in the first six months ended 30 June 2024 and that have
materially affected the financial position or performance of the Company
during the period.
By order of the Board
Steven Wilderspin Belinda Crosby
Director Director
19 September 2024 19 September 2024
INDEPENDENT REVIEW REPORT TO BLACKSTONE LOAN FINANCING LIMITED
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2024 which comprises the condensed statement of comprehensive income,
condensed statement of financial position, condensed statement of changes in
equity, condensed statement of cash flows and related notes 1 to 17.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 is not prepared, in all
material respects, in accordance with EU adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the company are
prepared in accordance with EU adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with EU adopted International
Accounting Standard 34, "Interim Financial Reporting".
Emphasis of matter - Financial statements prepared other than on a going
concern basis
We draw attention to note 2 in the condensed set of financial statements,
which indicates that the condensed set of financial statements have been
prepared on a basis other than that of a going concern following the decision
for the managed wind-down of the company. Our conclusion is not modified in
respect of this matter.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
conclusion relating to going concern, is based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
St. Helier, Jersey
19 September 2024
CONDENSED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024 (Unaudited)
As at As at
30 June 2024
31 December 2023
(unaudited) (audited)
Notes € €
Cash and cash equivalents 5,474,294 17,725,633
Prepayments 12,834 40,930
Financial assets at fair value through profit or loss 5 335,239,413 305,994,558
Total assets 340,726,541 323,761,121
Intercompany loan 6 (2,498,091) (2,161,082)
Payables 7 (579,881) (612,939)
Total liabilities (3,077,972) (2,774,021)
Net assets 12,13 337,648,569 320,987,100
Capital and reserves
Stated capital 8 423,312,107 446,312,099
Retained loss (85,663,538) (125,324,999)
Shareholders' equity 337,648,569 320,987,100
NAV per redeemable share 12 0.8078 0.7250
These condensed interim financial statements were authorised and approved for
issue by the Directors on 19 September 2024 and signed on their behalf by:
Steven Wilderspin Belinda Crosby
Director Director
The accompanying notes below form an integral part of the condensed interim
financial statements.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2024 (Unaudited))
Six months ended Six months ended
30 June 2024
30 June 2023
(unaudited) (unaudited)
Notes € €
Income
Realised (loss)/gain on foreign exchange (71) 9
Net gain on financial assets at fair value through profit or loss 5 63,313,369 20,692,908
Bank interest income 313,238 81,873
Total income 63,626,536 20,774,790
Expenses
Operating expenses 3 (702,670) (785,093)
Loan interest expense 6 (18,613) (14,396)
Total expenses (721,283) (799,489)
Profit before taxation 62,905,253 19,975,301
Taxation - -
Profit after taxation 62,905,253 19,975,301
Total comprehensive income for the period attributable to Shareholders 62,905,253
19,975,301
Basic and diluted earnings per redeemable/ordinary share 11 0.1430 0.0451
The Company has no items of other comprehensive income and therefore the
profit for the period is also the total comprehensive income.
All items in the above statement are derived from continuing operations. No
operations were acquired or discontinued during the period.
The accompanying notes below form an integral part of the condensed interim
financial statements.
CONDENSED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2024 (Unaudited)
Stated capital Retained loss Total
Notes € € €
Shareholders' equity at 1 January 2024 446,312,099 (125,324,999) 320,987,100
Total comprehensive income for the period attributable to Shareholders - 62,905,253 62,905,253
Transactions with owners
Dividends 15 - (23,243,792) (23,243,792)
Redemption of redeemable shares 8 (22,999,992) - (22,999,992)
(22,999,992) (23,243,792) (46,243,784)
Shareholders' equity at 30 June 2024 423,312,107 (85,663,538) 337,648,569
For the six months ended 30 June 2023 (Unaudited)
Stated capital Retained loss Total
Notes € € €
Shareholders' equity at 1 January 2023 447,542,762 (145,927,785) 301,614,977
Total comprehensive income for the period attributable to Shareholders - 19,975,301 19,975,301
Transactions with owners
Dividends 15 - (21,037,169) (21,037,169)
Ordinary shares repurchased 8 (1,230,662) - (1,230,662)
(1,230,662) (21,037,169) (22,267,831)
Shareholders' equity at 30 June 2023 446,312,100 (146,989,653) 299,322,447
The accompanying notes below form an integral part of the condensed interim
financial statements.
CONDENSED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2024 (Unaudited)
Six months ended Six months ended
30 June 2024 30 June 2023
(unaudited) (unaudited)
Notes € €
Cash flow from operating activities
Profit before taxation 62,905,253 19,975,301
Adjustments to reconcile profit before taxation to net cash flows:
- Unrealised gain on financial assets at fair value through profit 5 (47,690,233) (10,909,291)
and loss
- Realised gain on financial assets at fair value through profit 5 (15,623,136) (9,783,617)
and loss
Loan interest expense 6 18,613 14,396
Changes in working capital
Decrease in other receivables 28,096 35,661
Decrease in payables 7 (51,671) (162,953)
Net cash used in operating activities (413,078) (830,503)
Cash flow from investing activities
Proceeds from sale of financial assets at fair value through profit or loss 5 34,068,514 24,888,816
Net cash generated from investing activities 34,068,514 24,888,816
Cash flow from financing activities
Ordinary shares repurchased 8 - (1,230,662)
Redemption of redeemable shares 8 (22,999,992) -
Increase in intercompany loan 6 337,009 212,496
Dividends paid 15 (23,243,792) (21,037,169)
Net cash used in financing activities (45,906,775) (22,055,335)
Net (decrease)/increase in cash and cash equivalents (12,251,339) 2,002,978
Cash and cash equivalents at the start of the period 17,725,633 6,259,400
Cash and cash equivalents at the end of the period 5,474,294 8,262,378
The accompanying notes below form an integral part of the condensed interim
financial statements.
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2024
1 General information
The Company is a closed-ended limited liability investment company domiciled
and incorporated under the laws of Jersey with variable capital pursuant to
the Collective Investment Funds (Jersey) Law 1988. It was incorporated on 30
April 2014 under registration number 115628. The Company's redeemable shares
are quoted on the Main Market of the LSE.
Following the decision made by Shareholders on 15 September 2023 to implement
a managed wind-down of the Company, the investment objective of the Company,
effective from that date, is to realise all existing assets in the Company's
portfolio in an orderly manner.
On 11 December 2023, all ordinary shares in issue were converted to redeemable
shares and 1 deferred share in the Company was issued. On 21 December 2023,
the Company cancelled all of the redeemable shares it held in treasury.
As at 30 June 2024, the Company had 417,959,768 (31 December 2023:
442,738,903) redeemable shares in issue and 1 (31 December 2023: 1) deferred
share. No treasury shares were held as at 30 June 2024 and 31 December 2023.
The Company has a wholly owned Luxemburg subsidiary, Blackstone / GSO Loan
Financing (Luxembourg) S.à r.l., which has an issued share capital of
2,000,000 Class A shares and 1 Class B share held entirely by the Company as
at 30 June 2024 and 31 December 2023. The Company also held 190,371,884 (31
December 2023: 208,565,744) Class B CSWs issued by the Lux Subsidiary.
The Company's registered address is IFC 1, The Esplanade, St Helier, Jersey,
JE1 4BP, Channel Islands.
2 Material accounting policy information
The material accounting policies applied in the preparation of these condensed
interim financial statements are consistent with those used for the 31
December 2023 Annual Report and Audited Financial Statements and some are set
out below. Refer to Note 2 of the 31 December 2023 Annual Report and Audited
Financial Statements for further details on the material accounting policies.
These policies have been applied consistently throughout all the years
presented, unless otherwise stated.
2.1 Statement of compliance
The Annual Report and Audited Financial Statements are prepared in accordance
with the Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority and with International Financial Reporting Standards as adopted by
the EU. The condensed set of interim financial statements included in this
Half Yearly Financial Report has been prepared in accordance with EU adopted
International Accounting Standard 34 Interim Financial Reporting.
2.2 Going concern
As the Company is in managed wind-down, the condensed interim financial
statements have been prepared on a basis other than going concern.
The Board continues to expect that the managed wind-down of the Company to be
over a total period of 7 years although this is not guaranteed. After making
enquiries with the Portfolio Adviser and supported by the Directors' current
assessment of the Company's ability to pay its debts as they fall due for the
foreseeable future, the Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence until the
anticipated managed wind-down of the Company. The Directors will ensure that
sufficient liquidity is held back to ensure that liabilities are at all times
adequately covered.
2.3 Accounting standards
New standards, amendments and interpretations issued and effective for the
financial year beginning 1 January 2024
The following new standards, amendments or interpretations are effective for
the financial year beginning 1 January 2024 and the Directors do not consider
that these have a material impact on the Company's condensed interim financial
statements:
· Non-current Liabilities with Covenants and Classification of
Liabilities as Current or Non-current - Amendments to IAS 1 Presentation of
Financial Statements
· Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
Leases
· Supplier Finance Arrangements - Amendments to IAS 7 Statement of Cash
Flows and IFRS 7 Financial Instruments: Disclosures
New standards, amendments and interpretations issued but not effective for the
financial year beginning 1 January 2024 and not early adopted
The following standards become effective in future accounting periods and have
not been early adopted by the Company and the Directors do not believe that
the application of these will have a material impact on the Company's
condensed interim financial statements:
· Lack of Exchangeability - Amendments to IAS 21 The Effects of Changes
in Foreign Exchange Rates (effective for periods beginning on or after 1
January 2025)
· IFRS 18 Presentation and Disclosure in Financial Statements
(effective for periods beginning on or after 1 January 2027)
· Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture - Amendments to IFRS 10 Business Combinations and IAS 28
Investments in Associates and Joint Ventures (effective date to be determined)
2.4 Critical accounting judgements and estimates
The preparation of the condensed interim financial statements in conformity
with IFRS requires management to make judgements, estimates and assumptions
that affect items reported in the Condensed Statement of Financial Position
and Condensed Statement of Comprehensive Income. It also requires management
to exercise its judgement in the process of applying the Company's accounting
policies. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets
and liabilities affected in future periods.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively.
Estimates
(a) Fair value
For the fair value of all financial instruments held, the Company determines
fair values using appropriate techniques. Refer to above, Note 5 and Note 2.8
of the 31 December 2023 Annual Report and Audited Financial Statements for
further details on the significant estimates applied in the valuation of the
Company's financial instruments.
Judgements
(b) Non-consolidation of the Lux Subsidiary
The Company meets the definition of an investment entity as defined by IFRS 10
Consolidated Financial Statements and is required to account for its
investment in the Lux Subsidiary at fair value through profit or loss.
The Company has multiple unrelated investors and holds multiple investments in
the Lux Subsidiary. The Company has been deemed to meet the definition of an
investment entity per IFRS 10 as the following conditions exist:
· the Company has obtained funds for the purpose of providing
investors with investment management services;
· the Company's business purpose, which has been communicated
directly to investors, is investing solely for returns from capital
appreciation, investment income, or both; and
· the performance of investments made through the Lux Subsidiary are
measured and evaluated on a fair value basis.
The Company controls the Lux Subsidiary through its 100% holding of the voting
rights and ownership. The Lux Subsidiary is incorporated in Luxembourg. Refer
to Note 9 for further disclosures relating to the Company's interest in the
Lux Subsidiary.
(c) Non-consolidation of BCF
To determine control, there has to be a linkage between power and the exposure
to risks and rewards. The main link from ownership would allow a company to
control the payments of returns and operating policies and decisions of a
subsidiary.
To meet the definition of a subsidiary under the single control model of IFRS
10, the investor has to control the investee. Control involves power, exposure
to variability of returns and a linkage between the two:
· the investor has existing rights that give it the ability to direct
the relevant activities that significantly affect the investee's returns;
· the investor has exposure or rights to variable returns from its
involvement with the investee; and
· the investor has the ability to use its power over the investee to
affect the amount of the investor's returns.
In the case of BCF, the relevant activities are the investment decisions made
by it. However, in the Lux Subsidiary's case, the power to influence or direct
the relevant activities of BCF is not attributable to the Lux Subsidiary. The
Lux Subsidiary does not have the ability to direct or stop investments by BCF;
therefore, it does not have the ability to control the variability of returns.
Accordingly, BCF has been determined not to be a subsidiary undertaking as
defined under IFRS 10 Consolidated Financial Statements and the Lux
Subsidiary's investment in the PPNs issued by BCF are accounted for at fair
value through profit or loss.
3 Operating expenses
Six months ended Six months ended
30 June 2024 30 June 2023
(unaudited) (unaudited)
€ €
Administration fees 157,385 152,439
Directors' fees (see Note 4) 123,270 140,311
Professional fees 81,049 116,755
Audit of the Company 99,181 92,557
Audit related services - review of interim financial report 93,016 85,604
Brokerage fees 71,260 68,900
Regulatory and listing fees 31,295 28,536
Registrar fees 7,485 16,849
Sundry expenses 38,729 83,142
Total operating expenses 702,670 785,093
4 Directors' fees
The Company has no employees. The Company incurred €123,270 (30 June 2023:
€140,311) in Directors' fees (consisting exclusively of short-term benefits)
during the period. No directors' fees were outstanding at 30 June 2024 and 31
December 2023. No pension contributions were payable in respect of any of the
Directors. Refer to above for details on the Directors' interests.
5 Financial assets at fair value through profit or loss
As at As at
30 June 2024 31 December 2023
(unaudited) (audited)
€ €
Financial assets at fair value through profit or loss 335,239,413 305,994,558
Financial assets at fair value through profit or loss consist of 190,371,884
CSWs, 2,000,000 Class A shares and 1 Class B share issued by the Lux
Subsidiary (31 December 2023: 208,565,744 CSWs, 2,000,000 Class A shares and 1
Class B share issued by the Lux Subsidiary). Refer to pages 78 to 79 in the 31
December 2023 Annual Report and Audited Financial Statements for further
details.
Fair value hierarchy
IFRS 13 Fair Value Measurement requires an analysis of investments valued at
fair value based on the reliability and significance of information used to
measure their fair value.
The Company categorises its financial assets according to the following fair
value hierarchy detailed in IFRS 13 Fair Value Measurement that reflects the
significance of the inputs used in determining their fair values:
· Level 1: Quoted market price (unadjusted) in an active market
for an identical instrument.
· Level 2: Valuation techniques based on observable inputs,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
This category includes instruments valued using: quoted market prices in
active markets for similar instruments; quoted prices for identical or similar
instruments in markets that are considered less than active; or other
valuation techniques where all significant inputs are directly or indirectly
observable from market data.
· Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments where the valuation technique
includes inputs not based on observable data and the unobservable variable
inputs have a significant effect on the instrument's valuation. This category
includes instruments that are valued based on quoted prices for similar
instruments where significant unobservable adjustments or assumptions are
required to reflect differences between the instruments.
30 June 2024 (unaudited) Level 1 Level 2 Level 3 Total
€ € € €
Financial assets at fair value through profit or loss - - 335,239,413 335,239,413
31 December 2023 (audited) Level 1 Level 2 Level 3 Total
€ € € €
Financial assets at fair value through profit or loss - - 305,994,558 305,994,558
The Company determines the fair value of the financial assets at fair value
through profit or loss using the unaudited IFRS NAV of both the Lux Subsidiary
and BCF.
The Company determines the fair value of the CLOs held directly using third
party valuations. The Portfolio Adviser can challenge the marks if they appear
off-market or unrepresentative of fair value.
During the six months ended 30 June 2024 and the year ended 31 December 2023,
there were no reclassifications between levels of the fair value hierarchy.
The Company's maximum exposure to loss from its interests in the Lux
Subsidiary and indirectly in BCF is equal to the fair value of its investments
in the Lux Subsidiary.
Financial assets at fair value through profit or loss reconciliation
The following table shows a reconciliation of all movements in the fair value
of financial assets categorised within Level 3 between the start and the end
of the reporting period:
Six months ended 30 June 2024 Year ended
31 December 2023
€ €
Balance as at 1 January 305,994,558 297,721,169
Sale proceeds - CSWs (34,068,514) (52,820,196)
Realised gain on financial assets at fair value through profit or loss - CSWs 15,623,136 21,406,810
Total change in unrealised gain on financial assets for the period/year 47,690,233 39,686,775
Balance as at the end of the period/year 335,239,413 305,994,558
Realised gain on financial assets at fair value through profit or loss 15,623,136 21,406,810
Total change in unrealised gain on financial assets for the period/year 47,690,233 39,686,775
Net gain on financial assets at fair value through profit or loss 63,313,369 61,093,585
Quantitative information of significant unobservable inputs and sensitivity
analysis to significant changes in unobservable inputs - Level 3
The significant unobservable inputs used in the fair value measurement of the
financial assets at fair value through profit or loss within Level 3 of the
fair value hierarchy together with a quantitative sensitivity analysis as at
30 June 2024 and 31 December 2023 are as shown below:
Asset class Fair value Unobservable inputs Ranges Weighted average Sensitivity to changes in significant unobservable inputs
€
CSWs 326,899,255 Undiscounted N/A N/A 20% increase/decrease will have a fair value impact of +/- €65,379,851
NAV of
BCF
Class A and Class B shares 8,340,158 Undiscounted NAV of the N/A N/A 20% increase/decrease will have a fair value impact of +/- €1,668,032
Lux Subsidiary
Total as at 30 June 2024 (unaudited) 335,239,413
Asset Class Fair Value Unobservable Inputs Ranges Weighted average Sensitivity to changes in significant unobservable inputs
€
CSWs 298,050,226 Undiscounted NAV of N/A N/A 20% increase/decrease will have a fair value impact of +/- €59,610,045
BCF
Class A and Class B shares 7,944,332 Undiscounted NAV of the N/A N/A 20% increase/decrease will have a fair value impact of +/- €1,588,866
Lux Subsidiary
Total as at
31 December 2023 (audited) 305,994,558
6 Intercompany loan
As at As at
30 June 2024 31 December 2023
(unaudited) (audited)
€ €
Intercompany loan balance as at 1 January 2,161,082 1,694,077
Increase in intercompany loan 337,009 467,005
Intercompany loan balance as the end of the period/year 2,498,091 2,161,082
The intercompany loan - payable to the Lux Subsidiary: is a revolving
unsecured loan between the Company and the Lux Subsidiary. The intercompany
loan has a maturity date of 13 September 2033 and is repayable at the option
of the Company up to the maturity date. Interest is accrued at a rate of 1.6%
per annum and is payable annually only when a written request has been
provided to the Company by the Lux Subsidiary. During the period ended 30 June
2024, loan interest expense incurred by the Company was €18,613 (30 June
2023: €14,396).
7 Payables
As at As at
30 June 2024 31 December 2023
(unaudited) (audited)
€ €
Audit fees 198,395 196,700
Professional fees 126,747 124,076
Administration fees 81,268 79,553
Intercompany loan interest payable 108,740 90,127
Other payables 64,731 122,483
Total payables 579,881 612,939
All payables are deemed to due within the next twelve months.
8 Stated capital
Authorised
The authorised share capital of the Company is represented by an unlimited number of shares of any class at no par value.
Allotted, called up and fully-paid
Redeemable shares Number of shares Stated capital
€
As at 1 January 2024 442,738,903 446,312,099
Redemption of redeemable shares (24,779,135) (22,999,992)
Total redeemable shares as at 30 June 2024 (unaudited) 417,959,768 423,312,107
Ordinary/redeemable shares Number of shares Stated capital
€
As at 1 January 2023 34 (#_edn34) 444,578,522 447,542,762
Shares repurchased during the year (1,839,619) (1,230,663)
Total redeemable shares as at 31 December 2023 (audited) 442,738,903 446,312,099
Deferred share
As at 30 June 2024, the Company has also 1 (31 December 2023: 1) deferred
share, issued to CONJL SPV Trustee 1 Limited.
Redemption of redeemable shares
The Board implements the managed wind-down by returning cash to the
Shareholders by way of compulsory redemption of redeemable shares.
During the period ended 30 June 2024, the Company made its first return of
capital to its Shareholders, by way of compulsory partial redemption of
redeemable shares, as detailed below:
Record date Number of Redeemable Rate per Amount returned to Shareholders
Shares Redeemed Redeemable Share
10 June 2024 24,779,135 €0.9282 €22,999,992
Refer to note 17 for detail of redemptions of redeemable shares post the
period end.
Voting rights
Redeemable shareholders have the right to receive income and capital from
assets attributable to such class. Redeemable shareholders have the right to
receive notice of general meetings of the Company and have the right to attend
and vote at all general meetings.
Dividends
Refer to above for details on the Company's dividend policy and dividends
declared by the Board for the six month period ended 30 June 2024 and Note 17
for dividends declared after the period end.
Rights as to capital
On a winding up, the Company may, with the sanction of a special resolution
and any other sanction required by the Companies Law, divide the whole or any
part of the assets of the Company among the Shareholders in specie provided
that no holder shall be compelled to accept any assets upon which there is a
liability. On return of assets on liquidation or capital reduction or
otherwise, the assets of the Company remaining after payments of its
liabilities shall subject to the rights of the holders of other classes of
shares, to be applied to the Shareholders equally pro rata to their holdings
of shares.
Capital management
The Company is closed-ended and has no externally imposed capital
requirements. The Company's capital as at 30 June 2024 comprises shareholders'
equity at a total of €337,648,569 (31 December 2023: €320,987,100). The
Company's objectives for managing capital during the six months period to 30
June 2024 were to maintain sufficient liquidity to meet the expenses of the
Company, dividend commitments and compulsory redemptions of redeemable shares.
The Board monitors the capital adequacy of the Company on an on-going basis
and the Company's objectives regarding capital management have been met.
Refer to Note 9c Liquidity Risk in the 31 December 2023 Annual Report and
Audited Financial Statements for further discussion on capital management,
particularly on how the distribution policy was managed.
9 Interests in other entities
Interests in unconsolidated structured entities
IFRS 12 Disclosure of Interests in Other Entities defines a structured entity
as an entity that has been designed so that voting or similar rights are not
the dominant factor in deciding who controls the entity, such as when any
voting rights relate to the administrative tasks only and the relevant
activities are directed by means of contractual agreements.
Involvement with unconsolidated structured entities
The Directors have concluded that the CSWs and voting shares of the Lux
Subsidiary in which the Company invests, but that it does not consolidate,
meet the definition of a structured entity.
The Directors have also concluded that BCF also meets the definition of a
structured entity.
The Directors have also concluded that CLOs in which the Company invests, that
are not subsidiaries for financial reporting purposes, meet the definition of
structured entities because:
· the voting rights in the CLOs are not dominant rights in
deciding who controls them, as they relate to administrative tasks only;
· each CLO's activities are restricted by its Prospectus; and
· the CLOs have narrow and well-defined objectives to provide
investment opportunities to investors.
Interests in subsidiary
As at 30 June 2024, the Company owns 100% of the Class A and Class B shares in
the Lux Subsidiary comprising 2,000,000 Class A shares and 1 Class B share (31
December 2023: 2,000,000 Class A shares and 1 Class B share).
The Lux Subsidiary's principal place of business is Luxembourg.
Other than the investments noted above, the Company did not provide any
financial support for the period ended 30 June 2024 and the year ended 31
December 2023, nor had it any intention of providing financial or other
support.
The Company has an intercompany loan payable to the Lux Subsidiary as at 30
June 2024 and 31 December 2023. Refer to Note 6 for further details.
10 Segmental reporting
In accordance with IFRS 8 Operating Segments, the Board, which is the chief
operating decision maker, views the operations of the Company as one operating
segment, being the redeemable share class 35 (#_edn35) in issue during the
period ended 30 June 2024 and the year ended 31 December 2023.
During the period ended 30 June 2024 and the year ended 31 December 2023, the
Company's primary exposure was to the Lux Subsidiary in Europe. The Lux
Subsidiary's primary exposure is to BCF, an Irish entity. BCF's primary
exposure is to the US and Europe.
11 Basic and diluted earnings per share
As at As at
30 June 2024 30 June 2023 (unaudited)
(unaudited)
Total comprehensive income for the period €62,905,253 €19,975,301
Weighted average number of redeemable/ordinary shares during the period 36 440,000,877 442,889,811
(#_edn36)
Basic and diluted earnings per redeemable/ordinary share 0.1430 0.0451
12 IFRS NAV per redeemable share
As at As at
30 June 2024 31 December 2023 (audited)
(unaudited)
IFRS NAV €337,648,569 €320,987,100
Number of redeemable shares at period and year end 417,959,768 442,738,903
IFRS NAV per redeemable share 0.8078 0.7250
13 Reconciliation of Published NAV to IFRS NAV
As at As at
30 June 2024 31 December 2023
(unaudited) (audited)
NAV NAV per NAV NAV per
redeemable share redeemable share
€ € € €
Published NAV attributable to Shareholders 379,153,386 0.9072 402,792,551 0.9098
Adjustment - valuation (41,504,817) (0.0994) (81,805,451) (0.1848)
IFRS NAV 337,648,569 0.8078 320,987,100 0.7250
As noted above, there can be a difference between the Published NAV and the
IFRS NAV per the financial statements, because of the different bases of
valuation used. The above table reconciles the Published NAV to the IFRS NAV
per the condensed interim financial statements.
14 Related party transactions
All transactions between related parties were conducted on terms equivalent to
those prevailing in an arm's length transaction. In accordance with IAS 24
Related Party Disclosures, the related parties and related party transactions
during the period comprised:
Transactions with entities with significant influence
As at 30 June 2024, Blackstone Treasury Asia Pte Ltd held 40,593,376 (31
December 2023: 43,000,000) redeemable shares in the Company.
Transactions with key management personnel
The Directors are the key management personnel as they are the persons who
have the authority and responsibility for planning, directing and controlling
the activities of the Company. The Directors are entitled to remuneration for
their services. Refer to Note 4 for further details.
Transactions with other related parties
At 30 June 2024, current employees of the Portfolio Adviser and its affiliates
and accounts managed or advised by them, hold 39,036 redeemable shares (31
December 2023: 41,380) which represents 0.009% (31 December 2023: 0.009%) of
the issued redeemable shares of the Company.
The Company has exposure to the CLOs originated by BCF, through its investment
in the Lux Subsidiary. BIL is also appointed as a service support provider to
BCF and as the collateral manager to the Direct CLO Subsidiaries. BLCS has
been appointed as the collateral manager to BCM LLC, Dorchester Park CLO
Designated Activity Company and the Indirect CLO Subsidiaries.
Transactions with subsidiaries
The Company held 190,371,884 CSWs as at 30 June 2024 (31 December 2023:
208,565,744) following the redemption of 18,193,860 (31 December 2023:
30,985,038) CSWs by the Lux Subsidiary. Refer to Note 5 for further details.
As at 30 June 2024, the Company held 2,000,000 Class A shares and 1 Class B
share in the Lux Subsidiary with a nominal value of €2,000,001 (31 December
2023: 2,000,000 Class A shares and 1 Class B share in the Lux Subsidiary with
a nominal value of €2,000,001).
As at 30 June 2024, the Company also held an intercompany loan payable to the
Lux Subsidiary amounting to €2,498,091 (31 December 2023: €2,161,082).
15 Dividends
The Company declared and paid the following dividends on redeemable shares
during the six months ended 30 June 2024:
Period in respect of Date declared Ex-dividend Payment date Amount per redeemable share Amount paid
date
€ €
1 Oct 2023 to 31 Dec 2023 23 Jan 2024 1 Feb 2024 8 Mar 2024 0.0300 13,282,167
1 Jan 2024 to 31 Mar 2024 22 Apr 2024 2 May 2024 7 Jun 2024 0.0225 9,961,625
Total 23,243,792
The Company declared and paid the following dividends on redeemable shares
during the six months ended 30 June 2023:
Period in respect of Date declared Ex-dividend date Payment date Amount per ordinary share Amount paid
€ €
1 Oct 2022 to 31 Dec 2022 23 Jan 2023 2 Feb 2023 3 Mar 2023 0.0275 12,182,391
1 Jan 2023 to 31 Mar 2023 25 Apr 2023 4 May 2023 2 Jun 2023 0.0200 8,854,778
Total 21,037,169
16 Controlling party
In the Directors' opinion, the Company has no ultimate controlling party.
17 Events after the reporting period
The Board has evaluated subsequent events for the Company through to 19
September 2024, the date the condensed interim financial statements are
available to be issued and other than those listed below, concluded that there
are no material events that require disclosure or adjustment to the condensed
interim financial statements.
Dividends
On 19 July 2024, the Company declared a dividend of €0.0225 per redeemable
share in respect of the period from 1 April 2024 to 30 June 2024. A total
payment of €9,404,095 was made on 6 September 2024.
COMPANY INFORMATION
Directors Registered Office
Mr Steven Wilderspin (Chair) IFC 1
Ms Belinda Crosby (Audit Chair) The Esplanade
Mr Mark Moffat St Helier
Mr Giles Adu Jersey
All c/o the Company's registered office JE1 4BP, Channel Islands
Portfolio Adviser Registrar
Blackstone Ireland Limited Link Asset Services (Jersey) Limited
12 Castle Street
30 Herbert Street
St Helier
2(nd) Floor
Jersey, JE2 3RT, Channel Islands
Dublin 2, Ireland
Administrator / Company Secretary / Custodian / Depositary / Banker Auditor
BNP Paribas S.A., Jersey Branch Deloitte LLP
IFC 1
Gaspé House
The Esplanade
66-72 Esplanade
St Helier
St Helier
Jersey
JE2 3QT, Channel Islands
JE1 4BP, Channel Islands
Legal Adviser to the Company (as to Jersey Law) Legal Adviser to the Company
(as to English Law)
Carey Olsen Herbert Smith Freehills LLP
47 Esplanade
Exchange House
St Helier
Primrose Street
Jersey
London
JE1 0BD, Channel Islands
EC2A 2EG, United Kingdom
Joint Broker Joint Broker
Singer Capital Markets Winterflood Investment Trusts
1 Bartholomew Lane
London, EC2N 2AX , United Kingdom The Atrium Building
Cannon Bridge House, 25 Dowgate Hill
London, EC4R 2GA, United Kingdom
GLOSSARY
AIC The Association of Investment Companies, of which the Company is a member
AIC Code AIC Code of Corporate Governance 2019
AIFMD Alternative Investment Fund Managers' Directive
AIF Alternative Investment Funds
AML Anti-money laundering
APMs Alternative Performance Measures
BCF Blackstone Corporate Funding Designated Activity Company
BCF Facility BCF entered into a facility agreement dated 1 June 2017, as amended between
(1) BCF (as borrower), (2) Citibank Europe plc, UK Branch (as administration
agent), (3) Bank of America N.A. London Branch (as an initial lender), (4) BNP
Paribas (as an initial lender), (5) Deutsche Bank AG, London Branch (as
initial lender), (6) Citibank N.A. London Branch (as account bank, custodian
and trustee) and (7) Virtus Group LP (as collateral administrator)
BCM LLC Blackstone CLO Management LLC
BGLF or the Company Blackstone Loan Financing Limited
BGLP Ticker for the Company's Sterling Quote
BIL or the Portfolio Adviser Blackstone Ireland Limited
BLCS Blackstone Liquid Credit Strategies LLC
Board The Board of Directors of the Company
Bp Basis points
Brokers Singer Capital Markets and Winterflood Investment Trusts
BWIC Bids Wanted In Competition
BXCI Blackstone Alternative Credit Advisors LP , together with its corporate
credit-focused affiliates in the credit and insurance asset management
business unit of Blackstone Inc., as the context requires (but excluding, for
the avoidance of doubt, any insurance-focused asset management affiliates)
CFT Combating the financing of terrorism
Circular The circular dated 25 August 2023 published for the Shareholders on the LSE,
containing details of the proposals in respect of the managed wind-down. The
Circular is also available on the Company's website.
CSWs Cash Settlement Warrants
CLO Collateralised Loan Obligation
CLO Warehouse A special purpose vehicle incorporated for the purposes of warehousing US
and/or European floating rate senior secured loans and bonds
Discount / Premium Calculated as the NAV per redeemable share as at a particular date less BGLF's
closing share price on the LSE, divided by the NAV per redeemable share as at
that date
Dividend yield Calculated as the last four quarterly dividends declared divided by the share
price as at the relevant date
DTR Disclosure and Transparency Rules
ECB European Central Bank
ESG Environmental, Social and Governance
ESMA The European Securities and Markets
EU European Union
FCA Financial Conduct Authority (UK)
Fed Federal Reserve
FRC Financial Reporting Council (UK)
IAS International Accounting Standards
IFRS International Financial Reporting Standards
IFRS NAV Gross assets less liabilities (including accrued but unpaid fees) determined
in accordance with IFRS as adopted by the EU
IRR Internal Rate of Return
LSE London Stock Exchange
LTM Last twelve months
Lux Subsidiary or LuxCo Blackstone / GSO Loan Financing (Luxembourg) S.à r.l.
NAV Net asset value
NAV total return per redeemable share Calculated as the increase / decrease in the NAV per redeemable share plus the
total dividends paid per redeemable share during the period, with such
dividends paid being re-invested at NAV, as a percentage of the NAV per
redeemable share
LTM return is calculated over the year from 1 July 2023 to 30 June 2024
NIM Net interest margin
PPNs Profit Participating Notes
Published NAV Gross assets less liabilities (including accrued but unpaid fees) determined
in accordance with the section entitled "Net Asset Value" in Part I of the
Company's Prospectus and published on a monthly basis
RTS Regulatory technical standards
SFDR Sustainable Finance Disclosure Regulation
SOFR Secured Overnight Financing Rate
TCFD Task Force on Climate-related Financial Disclosures
UBS Union Bank of Switzerland
UK United Kingdom
UK Code UK Corporate Governance Code 2018
US United States
USD United States Dollar
WA Weighted Average
1 (#_ednref1) Refer to the glossary for an explanation of the terms used
above and elsewhere within this report. The calculation for the IFRS NAV per
redeemable share is found in Note 12 in the 'notes to the condensed interim
financial statements' and the calculation for the IFRS and Published NAV total
return and discount is found under 'Alternative Performance Measures' above.
These calculations remain consistent with prior years.
2 (#_ednref2) Bloomberg closing price at period end.
3 (#_ednref3) Annual dividend yield as at 30 June 2024 and 31 December 2023
is based on the four quarterly dividends announced by the Company during the
12 months prior to the period end/year end as applicable.
4 (#_ednref4) BGLP is the ticker for the Company's Sterling Quote and has
been presented for information purposes only.
5 (#_ednref5) Past performance is not necessarily indicative of future
results and there can be no assurance that the Company will achieve comparable
results, will meet its target returns, achieve its investment objectives, or
be able to implement its investment strategy.
6 (#_ednref6) Credit Suisse: Leveraged Loan Index for US Loans, Western
European Leveraged Loan Index (hedged to EUR) for EUR Loans as of 30 June
2024. Indices are provided for illustrative purposes only. They have not been
selected to represent benchmarks or targets for the Company. The indices may
include holdings that are substantially different than investments held by BCF
and do not reflect the strategy of BCF. Comparisons to indices have
limitations because indices have risk profiles, volatility, asset composition
and other material characteristics that may differ from BCF. The indices do
not reflect the deduction of fees or expenses.
7 (#_ednref7) Credit Suisse/UBS: As of 30 June 2024. BXCI data used for BCF
defaults, calculated on a look through basis. BCF defaults defined as (a)
missed a payment, (b) filed bankruptcy or (c) were downgraded by Moody's,
Fitch, or S&P to D. Recovery rate excluded from years with zero defaults.
Please see the BCF Loan Default Track Record in the "Important Disclosure
Information" section for further information on the default track record. Past
performance does not predict future returns and there can be no assurance that
a fund will continue to achieve comparable results or that a fund will be able
to implement its investment strategy or achieve its investment objectives or
avoid substantial losses.
8 (#_ednref8) (i) as a Jersey incorporated company, the Company is not in
scope of the UK Companies Act TCFD disclosure requirements; (ii) the Company
is not an
FCA authorised manager or managed by an FCA authorised manager so is not in
scope of the TCFD disclosure obligations in the FCA's ESG sourcebook; (iii)
the shares of the Company are listed on the 'Equity Shares (Commercial
Companies)' segment of the LSE (previously the 'Premium Equity Closed Ended
Investment Funds' segment). The FCA's TCFD disclosure obligations do not apply
to closed ended investment funds listed on this segment.
9 (#_ednref9) As of 30 June 2024. US Loan Index: Credit Suisse Leveraged
Loan Index. European Loan Index: Credit Suisse Western European Leveraged Loan
Index (Hedged to Euro). Asset spreads represented by 3-year discount margin.
10 (#_ednref10) As of 30 June 2024. UBS Default Report issued on 8 July
2024.
11 (#_ednref11) Bank of America CLO Research, as of 28 June 2024.
12 (#_ednref12) Pitchbook LCD, as of 30 June 2024.
13 (#_ednref13) Barclays CLO Research, as of 1 July 2024.
14 (#_ednref14) Note: Portfolio data presented using the gross par amount of
assets held directly and indirectly by BCF. The total par amount of all assets
held within each CLO and CLO warehouses are included on a fully consolidated
basis and added to those assets held directly by BCF. Subject to change and
not a recommendation to buy or sell any security. Data as of 30 June 2024,
calculated on 3 July 2024.
15 (#_ednref15) Credit Suisse/UBS trailing twelve-month default rates as of
30 June 2024.
16 (#_ednref16) Debt tranches of certain US CLOs are referenced against
SOFR. Some proportion of US CLO collateral may be based on SOFR and subject to
change over time.
17 (#_ednref17) Figures may not sum exactly due to rounding.
18 (#_ednref18) The debt tranches of Richmond Park, Palmerston Park, and
Clontarf Park were redeemed in April 2024.
19 (#_ednref19) As of 30 June 2024, with data available as of 10 July 2024.
Certain CLOs in the process of being redeemed. The residual valuation as a %
of BCF NAV is reflective of remaining distributions to be made. Once no
remaining distributions are expected, valuation will appear as "N/A".
20 (#_ednref20) Realised IRRs for redemptions are reflective of
distributions made to BCF to date, with data available in Kanerai as of 10
July 2024. IRRs may change as further distributions to income noteholders are
made. For fully sold CLOs, realised IRR includes sale proceeds returned to BCF
(reflected on a traded basis). IRRs denoted with an * are inclusive of fee
rebates (separate notes reflecting rights to future rebates may still be held
by BCF).
21 (#_ednref21) Source: Kanerai, with data available as of 10 July 2024.
Annualised distributions for redeemed CLOs include return of principal;
annualised distributions for fully sold CLOs do not include sale proceeds. Top
20 Issuers represent 14.2% of the portfolio par value, as of 30 June 2024.
22 (#_ednref22) Portfolio data by Issuer, Industry, Country, Rating and Loan
Price Bands are presented using the gross par amount of assets held directly
and indirectly by BCF. Indirect asset holdings are held within CLOs BCF has
invested in. The total par amount of all assets held within each CLO are
included on a fully consolidated basis and added to those assets held directly
by BCF. Portfolio holdings, Rating, Country, Industry and Loan Price Band
distributions are subject to change and are not recommendations to buy or sell
any security. CLO Note and CLO warehouse investments are excluded from all
figures. Data calculated by BXCI.
23 (#_ednref23) Calculated on BCF's net assets as of 30 June 2024.
24 (#_ednref24) Data for EUR and US CLOs calculated based on data available
on Kanerai as of 10 July 2024 for non-redeemed CLOs. Data for CLO Warehouses
and Directly held loans calculated by BXCI.
25 (#_ednref25) Calculated on BCF's net assets as of 30 June 2024.
26 (#_ednref26) As of 28 June 2024, the BCF Facility was fully repaid;
however, if capital was outstanding, the liability cost would have been 5.33%.
Note that leverage has been removed from the Directly Held Loans bucket.
27 (#_ednref27) Portfolio data by Issuer, Industry, Country, Rating and Loan
Price Bands are presented using the gross par amount of assets held directly
and indirectly by BCF. Indirect asset holdings are held within CLOs BCF has
invested in. The total par amount of all assets held within each CLO are
included on a fully consolidated basis and added to those assets held directly
by BCF. Portfolio holdings, Rating, Country, Industry and Loan Price Band
distributions are subject to change and are not recommendations to buy or sell
any security. CLO Note and CLO warehouse investments are excluded from all
figures. Data calculated by BXCI.
28 (#_ednref28) Please note that the High Tech exposure is defined by
Moody's as "computer hardware, software, component equipment, consumer
electronics, semiconductor and contract manufacturers; Information Technology
services and distributors; transaction processors." The BCF portfolio is not
exposed to "start-up" type risk but rather is defensively positioned and
includes established businesses with recurring revenues.
29 (#_ednref29) Portfolio data by Issuer, Industry, Country, Rating and Loan
Price Bands are presented using the gross par amount of assets held directly
and indirectly by BCF. Indirect asset holdings are held within CLOs BCF has
invested in. The total par amount of all assets held within each CLO are
included on a fully consolidated basis and added to those assets held directly
by BCF. Portfolio holdings, Rating, Country, Industry and Loan Price Band
distributions are subject to change and are not recommendations to buy or sell
any security. CLO Note and CLO warehouse investments are excluded from all
figures. Data calculated by BXCI. As at 30 June 2024, the top 20 issuers
aggregated to 14.2% (31 December 2023: 14.7%) of the portfolio.
30 (#_ednref30) The word "material" as used herein should not necessarily be
equated to or taken as a representation about the "materiality" of such ESG
factors under the US federal securities laws or any similar legal or
regulatory regime globally.
31 (#_ednref31) Deal level constant default rate
32 (#_ednref32) While discount rates have increased since Q1 2022 due to
inflationary concerns, discount rates have started to decline in line with
strength in other risk asset class markets.
33 (#_ednref33) Published NAV is an APM from which these metrics are
derived.
34 (#_ednref34) On 11 December 2023, all ordinary shares in issue were
converted to redeemable shares.
35 (#_ednref35) On 11 December 2023, all ordinary shares in issue were
converted to redeemable shares.
36 (#_ednref36) Average number of shares weighted against the effect of
redemption of redeemable shares in the six months ended 30 June 2024/buybacks
of ordinary shares in the six months ended 30 June 2023 (refer to Note 8 for
further details).
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