HLEND cuts borrowings by $2.4B and supplemental payout 29%

HPS Corporate Lending Fund cut borrowings by about $2.4 billion since January and its monthly supplemental distribution 29%, AltsWire reported, as repurchase requests topped its 5% cap for a third quarter.

Principal debt outstanding was $10.95 billion at Sept. 30, down from $13.39 billion at Jan. 31. Average debt-to-equity was about 0.88 times in September against about 1.02 times in January. Portfolio fair value fell to $22.33 billion from $25.73 billion at Feb. 28, and aggregate net asset value to $11.80 billion from $12.92 billion.

Advisors modeling client income on HLEND's January payout are working from a figure about 8% above the current rate: Class I shares now pay $0.199 a month, against $0.215 in January. Redemptions are the second constraint. Requests have exceeded the 5% quarterly cap three quarters running, so tendered shares are filled in part: in the second quarter the fund accepted 25.1 million of the 66.7 million shares tendered, about 38%.

The Oct. 23 declaration set a regular distribution of $0.16 per Class I share and a variable supplemental of $0.039, payable on or about Nov. 30. It is the fourth consecutive month at $0.039; the supplemental was $0.055 in January and February and was lowered each month from March through July.

Third-quarter requests totaled about 11.5% of shares outstanding, down from about 13.3% in the second quarter. The fund will repurchase 5%, or about $600 million, at Sept. 30 NAV, which would fill roughly 43% of the shares tendered. Final results for the third-quarter offer have not been reported.

In a Sept. 11 letter to shareholders, the fund said it repurchased about $1.7 billion of shares across the three repurchase periods ended June 30 while “keeping leverage essentially stable at the low end of its target range.” Average monthly leverage was about 0.97 times in June and has declined in each month since. The same letter put the annualized distribution rate for Class I shares at 9.8% as of August and said distributions declared since inception have consisted entirely of net investment income.

NAV per share has moved less than the balance sheet. HLEND reported $24.45 per share for each of its four share classes at Sept. 30, unchanged from July 31 and Aug. 31 and down from $25.22 at Dec. 31, 2025.