Blackstone Secured posts EPS beat, launches $250M buyback amid BDC selloff
Business development company trades at deep discount to net asset value as sector faces private credit concerns
Blackstone Secured Lending Fund (BXSL) reported better-than-expected fourth-quarter earnings and announced a $250 million share repurchase program, positioning the business development company to capitalize on a sector-wide selloff that has pushed its shares to a deep discount to their underlying value.
The fund posted net investment income of $0.80 per share for the quarter ended December 31, 2025, narrowly beating analyst estimates of $0.79. Total investment income reached $358 million, edging past the $353 million consensus forecast, according to company filings.
Perhaps more significant for investors was the company's decision to authorize a $250 million share repurchase program for common shares trading below net asset value per share. The move comes as BXSL's stock has fallen roughly 8% since late January to around $23.84, creating a widening gap with its net asset value of $26.92 per share—a discount of approximately 11%.
"The board's authorization of a share repurchase program demonstrates our confidence in the underlying value of the portfolio and our commitment to enhancing shareholder returns," the company stated in its earnings announcement.
The buyback announcement arrives during a turbulent period for the BDC sector, which has experienced a significant selloff throughout February 2026. The decline has been driven by broader concerns about private credit exposure, particularly to the software industry, and intensified after Blue Owl Capital restricted redemptions from one of its retail private credit funds on February 22. BXSL shares dropped 5-6% following that announcement.
Despite the pressure on its share price, Blackstone Secured Lending maintained its quarterly dividend of $0.77 per share, which is comfortably covered by net investment income. The fund achieved 104% dividend coverage for the quarter, a metric that analysts closely monitor in the BDC space.
The earnings performance and shareholder-friendly capital allocation come at a time when BDC valuations have reached what some analysts characterize as "dirt cheap" levels. The Cliffwater BDC Index has declined 4.29% over the past year, with the median price-to-net asset value ratio sitting at 0.77x.
Blackstone Secured Lending's current valuation represents an even steeper discount than the historical average. The fund's shares have traded at an average discount of 6.31% to NAV over the past year, compared to the current 11-13% gap, according to CEFdata.
Analysts maintain a generally positive outlook on the stock despite the recent weakness. The consensus rating stands at "Moderate Buy" with an average price target of $29.20, implying approximately 22% upside from current levels, according to market data. Of the 11 analysts covering the stock, eight rate it a buy or strong buy.
Blackstone Secured Lending, managed by Blackstone Alternative Asset Management, focuses on originating and acquiring senior secured loans primarily to U.S. middle-market companies. The fund's disciplined underwriting standards and position in the private credit market have made it one of the larger players in the BDC space, with a market capitalization of approximately $5.5 billion.
Investors will be watching closely to see whether the authorized buyback program begins to narrow the discount to net asset value, particularly if the BDC sector stabilizes following its February decline. The fund's strong dividend coverage and earnings beat suggest the fundamentals remain intact despite the sector-wide pressure.