Blackstone cuts BXSL dividend 22% and BXMT payout 36%

Blackstone cut the quarterly dividend on its listed BDC, Blackstone Secured Lending Fund (BXSL), by 22% to 60 cents a share, and on Blackstone Mortgage Trust (BXMT) by 36% to 30 cents, InvestmentNews reported.

Each cut removes 17 cents per share per quarter, or 68 cents a year if the new rate holds. BXSL said last Wednesday it would pay 60 cents for the fourth quarter, down from 77 cents. BXMT said Thursday it would pay 30 cents going forward, down from 47 cents, as it reduces some older loans in its portfolio.

Advisors with clients holding BXSL or BXMT for yield will see 68 cents less per share per year in income if the new rates hold.

The cuts come as sales of illiquid BDCs have slowed on fears about loans to technology companies threatened by artificial intelligence, InvestmentNews said. As Private Wealth Daily previously reported, Stanger put non-listed BDC fundraising at $1.5 billion in Q3, the lowest since Q4 2020, with $4.1 billion of outflows and an estimated $8.2 billion of redemption requests unmet.

"A lot of private credit funds and BDCs are seeing fund raising slow dramatically, and that's only going to put more pressure on these funds," said Brian King, CEO of Lodas Markets, a trading platform for alternative investments.

On Wednesday's analyst call, Brad Marshall, Blackstone's global head of private credit strategies and CEO of BXSL, said the new payout is about a 9.5% annualized distribution yield on third-quarter net asset value. He said the portfolio is nearly 96% first-lien senior secured and that BXSL is midway through refinancing about $3.2 billion of fixed-rate notes issued in 2020 and 2021 at an average coupon of 2.97%.