Blackstone Secured Lending Fund 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Uncertainty with respect to the economic effects of the COVID-19 outbreak has introduced significant volatility in the financial markets, and the effect of the volatility could materially impact our market risks, including those listed below. We are subject to financial market risks, including valuation risk and interest rate risk. Valuation Risk We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments will not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firms engaged at the direction of the Board, and in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material. Interest Rate Risk Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We intend to fund portions of our investments with borrowings, and at such time, our net investment income will be affected by the difference between the rate at which we invest and the rate at which we borrow. Accordingly, we cannot assure shareholders that a significant change in market interest rates will not have a material adverse effect on our net investment income. As of December 31, 2020, 100% of our debt investments based on fair value in our portfolio were at floating rates. Based on our consolidated balance sheet as of December 31, 2020, the following table shows the annualized impact on net income of hypothetical base rate changes in interest rates (considering interest rate floors and ceilings for floating rate instruments assuming no changes in our investment and borrowing structure) (dollar amounts in thousands): 109 Table of Contents Interest Income Interest Expense Net Income Up 300 basis points $ 130,628 $ (39,437) $ 91,191 Up 200 basis points 73,815 (26,291) 47,524 Up 100 basis points 17,813 (13,146) 4,667 Down 100 basis points (1,730) 3,336 1,606 Down 200 basis points (1,730) 3,336 1,606 110 Table of Contents Item 8. Consolidated Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm 112 Consolidated Statements of Assets and Liabilities as of December 31, 20 20 and December 31, 20 19 114 Consolidated Statements of Operations for the year s ended Dec ember 31, 20 20, 2019 and 2018 115 Consolidated Statements of Changes in Net Assets for the year s ended December 31, 2020, 2019 and 2018 116 Consolidated Statements of Cash Flows for the year s ended December 31, 2020, 2019 and 2018 117 Consolidated Schedules of Investments as of December 31, 20 20 and December 31, 20 19 119 Notes to Consolidated Financial Statements 130 111 Table of Contents Report of Independent Registered Public Accounting Firm To the shareholders and the Board of Trustees of Blackstone Secured Lending Fund: Opinion on the Consolidated Financial Statements and Financial Highlights We have audited the accompanying consolidated statements of assets and liabilities of Blackstone Secured Lending Fund and its subsidiaries (the "Company"), including the consolidated schedule of investments, as of December 31, 2020 and 2019, the related consolidated statements of operations, cash flows, changes in net assets, and the financial highlights for the years ended December 31, 2020 and 2019 and the period from November 20, 2018 (commencement of operations) to December 31, 2018, and the related notes. In our opinion, the consolidated financial statements and financial highlights present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations, changes in net assets, cash flows, and the financial highlights for the years ended December 31, 2020 and 2019 and the period from November 20, 2018 (commencement of operations) to December 31, 2018 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and financial highlights. Our procedures included confirmation of investments owned as of December 31, 2020 and 2019, by correspondence with the custodian, loan agents, and borrowers; when replies were not received, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 112 Table of Contents Fair Value — Investments — Refer to Footnote 2 and 5 in the financial statements Critical Audit Matter Description As described in Note 5 to the consolidated financial statements, the Company’s level 3 investments carried at fair value were $4,785,325 thousand as of December 31, 2020, which includes debt investments of $4,261,272 thousand for which the fair values were determined by Blackstone Credit BDC Advisors (the “Adviser”) using a yield analysis. The significant unobservable input used in the yield analysis is the discount rate based on comparable market yields. We identified the valuation of level 3 debt investments utilizing yield analyses as a critical audit matter given the significant judgments made by the Adviser to estimate the fair value. This required a high degree of auditor judgment and extensive audit effort, including the need to involve fair value specialists who possess significant valuation experience, to evaluate the appropriateness of the valuation techniques and the significant unobservable input. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the unobservable inputs and assumptions used to estimate the fair value of investments included the following, among others: • We evaluated the appropriateness of the valuation methodologies used by the Adviser. • We evaluated the appropriateness of the estimates and assumptions in the yield analyses through independent analysis and evidence, including the selected yields for debt investments. • With the assistance of our internal fair value specialists, we evaluated the valuation methodologies and related significant assumptions. • We evaluated the impact of current market events and conditions on the valuation methodology and inputs used by the Adviser. /s/ DELOITTE & TOUCHE LLP New York, New York March 3, 2021 We have served as the Company’s auditor since 2018. 113 Table of Contents Blackstone Secured Lending Fund Consolidated Statements of Assets and Liabilities (in thousands, except share and per share amounts) December 31, 2020 December 31, 2019 ASSETS Investments at fair value Non controlled/non affiliated investments (cost of $5,575,482 and $3,067,767 at December 31, 2020 and December 31, 2019, respectively) $ 5,585,942 $ 3,092,440 Cash and cash equivalents 217,993 65,495 Interest receivable from non controlled/non affiliated investments 21,456 16,990 Deferred financing costs 6,933 5,172 Deferred offering costs — 760 Receivable for investments sold 114,537 2,726 Subscription receivable 3,427 5,942 Other assets 578 582 Total assets $ 5,950,866 $ 3,190,107 LIABILITIES Debt (net of unamortized debt issuance costs of $14,170 and $0 at December 31, 2020 and December 31, 2019, respectively) $ 2,500,393 $ 1,454,214 Payable for investments purchased 48,582 10,086 Due to affiliates 5,546 2,007 Management fees payable 10,277 5,045 Income based incentive fee payable 15,262 6,345 Capital gains incentive fee payable 1,077 4,218 Interest payable 14,715 5,496 Distribution payable (Note 8) 86,638 27,827 Accrued expenses and other liabilities 567 1,752 Total liabilities 2,683,057 1,516,990 Commitments and contingencies (Note 7) NET ASSETS Common shares, $0.001 par value (unlimited shares authorized; 129,661,586 and 64,289,742 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively) 130 64 Additional paid in capital 3,232,562 1,635,915 Distributable earnings (loss) 35,117 37,138 Total net assets 3,267,809 1,673,117 Total liabilities and net assets $ 5,950,866 $ 3,190,107 NET ASSET VALUE PER SHARE $ 25.20 $ 26.02 The accompanying notes are an integral part of these consolidated financial statements. 114 Table of Contents Blackstone Secured Lending Fund Consolidated Statements of Operations (in thousands, except share and per share amounts) For the Year Ended December 31, 2020 2019 2018 Investment income: From non-controlled/non-affiliated investments: Interest income $ 381,797 $ 146,380 $ 3,174 Payment-in-kind interest income 7,119 988 — Fee income 725 680 — Total investment income 389,641 148,048 3,174 Expenses: Interest expense 65,949 35,431 1,351 Management fees 32,874 12,635 309 Income based incentive fee 41,983 13,818 — Capital gains incentive fee (3,141) 4,218 — Professional fees 1,999 1,338 212 Board of Trustees' fees 467 430 177 Administrative service expenses (Note 3) 2,271 1,506 362 Other general and administrative 4,166 3,033 333 Organization costs — — 670 Amortization of offering costs 1,509 1,090 117 Total expenses 148,077 73,499 3,531 Expense support (Note 3) — (570) (1,696) Recoupment of expense support (Note 3) 1,466 800 — Net expenses 149,543 73,729 1,835 Net investment income before excise tax 240,098 74,319 1,339 Excise tax expense 517 465 52 Net investment income after excise tax 239,581 73,854 1,287 Realized and unrealized gain (loss): Net change in unrealized appreciation (depreciation): Non-controlled/non-affiliated investments (16,593) 28,173 (3,428) Forward purchase obligation (Note 7) — 222 (222) Translation of assets and liabilities in foreign currencies 11 (66) — Net unrealized appreciation (depreciation) (16,582) 28,329 (3,650) Realized gain (loss): Non-controlled/non-affiliated investments (4,378) 3,962 — Foreign currency transactions 17 61 — Derivative (Note 5) — — (581) Net realized gain (loss) (4,361) 4,023 (581) Net realized and unrealized gain (loss) (20,943) 32,352 (4,231) Net increase (decrease) in net assets resulting from operations $ 218,638 $ 106,206 $ (2,944) Net investment income per share (basic and diluted) $ 2.51 $ 2.18 $ 0.17 Earnings (loss) per share (basic and diluted) $ 2.29 $ 3.14 $ (0.39) Weighted average shares outstanding (basic and diluted) 95,333,867 33,858,642 7,458,181 Distributions declared per share $ 2.30 $ 2.00 $ — The accompanying notes are an integral part of these consolidated financial statements. 115 Table of Contents Blackstone Secured Lending Fund Consolidated Statements of Changes in Net Assets (in thousands) Par Amount Additional Paid in Capital Distributable Earnings (Loss) Total Net Assets Balance, November 20, 2018 (commencement of operations) $ — $ — $ — $ — Issuance of common shares 10 239,299 — 239,309 Net investment income — — 1,287 1,287 Net realized gain (loss) on investments — — (581) (581) Net change in unrealized appreciation (depreciation) on investments — — (3,650) (3,650) Tax reclassification of shareholders’ equity in accordance with US GAAP — (52) 52 — Balance, December 31, 2018 10 239,247 (2,892) 236,365 Issuance of common shares 54 1,393,685 — 1,393,739 Reinvestment of dividends — 4,318 — 4,318 Net investment income — — 73,854 73,854 Net realized gain (loss) on investments — — 4,023 4,023 Net change in unrealized appreciation (depreciation) on investments — — 28,329 28,329 Dividends declared from net investment income — — (67,511) (67,511) Tax reclassification of shareholders' equity in accordance with US GAAP — (1,335) 1,335 — Balance, December 31, 2019 64 1,635,915 37,138 1,673,117 Issuance of common shares 65 1,579,929 — 1,579,994 Reinvestment of dividends 1 18,744 — 18,745 Net investment income — — 239,581 239,581 Net realized gain (loss) on investments — — (4,361) (4,361) Net change in unrealized appreciation (depreciation) on investments — — (16,582) (16,582) Dividends declared from net investment income — — (222,685) (222,685) Tax reclassification of shareholders' equity in accordance with US GAAP — (2,026) 2,026 — Balance, December 31, 2020 $ 130 $ 3,232,562 $ 35,117 $ 3,267,809 The accompanying notes are an integral part of these consolidated financial statements. 116 Table of Contents Blackstone Secured Lending Fund Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2020 2019 2018 Cash flows from operating activities: Net increase (decrease) in net assets resulting from operations $ 218,638 $ 106,206 $ (2,944) Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: Net unrealized (appreciation) depreciation on investments 16,593 (28,173) 3,428 Net unrealized (appreciation) depreciation on forward purchase obligation — (222) 222 Net unrealized (appreciation) depreciation on translation of assets and liabilities in foreign currencies (11) 66 — Net realized (gain) loss on investments 4,378 (3,962) 581 Net accretion of discount and amortization of premium (50,058) (9,812) (127) Payment-in-kind interest capitalized (7,635) (803) — Amortization of deferred financing costs 3,811 1,565 327 Amortization of debt financing and debt issuance costs 1,327 — — Amortization of offering costs 1,509 1,090 117 Payment in connection with settlement of derivative, net of cash received — — (24,015) Purchases of investments (4,485,214) (3,077,267) (428,071) Proceeds from sale of investments and principal repayments 2,030,814 572,830 432 Changes in operating assets and liabilities: Interest receivable (4,466) (14,778) (1,608) Receivable for investments (111,811) 15,020 11,994 Other assets 4 (211) (371) Payable for investments purchased 38,496 (139,427) 86,754 Management fee payable 5,232 4,736 309 Income based incentive fee payable 8,917 6,345 — Capital gains incentive fee payable (3,141) 4,218 — Due to affiliates 3,450 (349) 1,761 Interest payable 9,219 4,578 779 Accrued expenses and other liabilities (217) 65 655 Net cash provided by (used in) operating activities (2,320,165) (2,558,285) (349,777) Cash flows from financing activities: Borrowings on debt 2,992,142 2,259,973 238,650 Repayments on debt (1,947,550) (990,754) (118,650) Deferred financing costs paid (6,540) (3,435) (2,597) Debt issuance costs paid (2,027) — — Deferred offering costs paid (749) (663) (707) Proceeds from issuance of common shares 1,582,509 1,387,797 239,309 Dividends paid in cash (145,122) (35,366) — Net cash provided by (used in) financing activities 2,472,663 2,617,552 356,005 Net increase (decrease) in cash and cash equivalents 152,498 59,267 6,228 Cash and cash equivalents, beginning of period 65,495 6,228 — Cash and cash equivalents, end of period $ 217,993 $ 65,495 $ 6,228 117 Table of Contents For the Year Ended December 31, 2020 2019 2018 Supplemental information and non-cash activities: Interest paid during the period $ 51,918 $ 28,946 $ 105 Distribution payable $ 86,638 $ 27,827 $ — Subscription receivable $ 3,427 $ 5,942 $ — Reinvestment of distributions during the period $ 18,744 $ 4,318 $ — Accrued but unpaid debt financing and debt issuance costs $ 878 $ 1,032 $ — Accrued but unpaid offering costs $ — $ 596 $ — Non-cash purchases of investments $ (43,692) $ — $ — Non-cash sales of investments $ 43,692 $ — $ — Excise taxes paid $ 570 $ 52 $ — Investments received in purchase of Syndicated Warehouse (Note 7) $ — $ — $ 120,988 Debt assumed in purchase of Syndicated Warehouse (Note 7) $ — $ — $ (65,000) Other net operating assets and liabilities assumed in purchase of Syndicated Warehouse (Note 7) $ — $ — $ (31,635) The accompanying notes are an integral part of these consolidated financial statements. 118 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2020 (in thousands) Investments—non-controlled/non-affiliated (1) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets First Lien Debt Aerospace & Defense Corfin Holdings, Inc. (4)(9) L + 6.00% 7.00% 2/5/2026 $ 203,463 $ 200,008 $ 202,954 6.21 % MAG DS Corp (9) L + 5.50% 6.50% 4/1/2027 87,607 79,610 83,884 2.57 TCFI AEVEX, LLC (4)(7)(9) L + 6.00% 7.00% 3/18/2026 102,020 100,089 100,868 3.09 379,707 387,706 11.87 Air Freight & Logistics Livingston International Inc. (4)(6)(9) L + 5.75% 6.75% 4/30/2026 122,138 118,447 121,527 3.72 Mode Purchaser, Inc. (4)(9) L + 6.25% 7.25% 12/9/2026 176,988 173,986 171,235 5.24 Omni Intermediate Holdings, LLC (4)(5)(7)(9) L + 5.00% 6.00% 12/30/2026 5,000 4,875 4,875 0.15 Omni Intermediate Holdings, LLC - Revolving Term Loan (4)(5)(7)(9) L + 5.00% 6.00% 12/30/2025 42 28 28 — R1 Holdings, LLC (4)(7)(9) L + 6.00% 7.06% 1/2/2026 57,669 56,856 57,093 1.75 354,192 354,758 10.86 Building Products Jacuzzi Brands, LLC (4)(9) L + 6.50% 7.50% 2/25/2025 99,228 97,922 95,755 2.93 Latham Pool Products, Inc. (8) L + 6.00% 6.15% 6/18/2025 49,193 47,888 49,117 1.50 Lindstrom, LLC (4)(9) L + 6.25% 7.25% 4/7/2025 129,650 127,891 127,057 3.89 The Wolf Organization, LLC (4)(9) L + 6.50% 7.50% 9/3/2026 95,750 94,204 96,707 2.96 Windows Acquisition Holdings, Inc. (4)(5)(9) L + 6.50% 7.50% 12/29/2026 62,996 61,737 61,736 1.89 Windows Acquisition Holdings, Inc. - Revolving Term Loan (4)(5)(7)(9) L + 6.50% 7.50% 12/29/2025 4,620 4,620 4,620 0.14 434,262 434,992 13.31 Capital Markets Advisor Group Holdings, Inc. (8) L + 5.00% 5.15% 7/31/2026 6,430 5,981 6,390 0.20 Chemicals DCG Acquisition Corp. (4)(7)(9) L + 7.50% 8.50% 9/30/2026 39,800 38,886 39,402 1.21 LSF11 Skyscraper US Bidco 2, LLC (4)(6)(9) L + 5.50% 6.50% 9/29/2027 106,878 101,786 106,344 3.25 LSF11 Skyscraper Holdco S.à r.l, LLC (4)(6)(9) L + 5.50% 6.50% 9/29/2027 335 319 334 0.01 Polymer Additives, Inc. (8) L + 6.00% 6.21% 7/31/2025 29,452 28,400 24,726 0.76 USALCO, LLC (4)(7)(10) L + 7.25% 8.50% 6/1/2026 166,751 162,734 168,553 5.16 USALCO, LLC (4)(9) L + 6.50% 7.50% 6/1/2026 35,693 34,979 34,979 1.07 VDM Buyer, Inc. (4)(8) L + 6.75% 6.97% 4/22/2025 € 24,023 26,651 28,512 0.87 VDM Buyer, Inc. (4)(8) L + 6.75% 6.97% 4/22/2025 63,089 62,184 61,197 1.87 455,939 464,046 14.20 119 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2020 (in thousands) Investments—non-controlled/non-affiliated (1) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets First Lien Debt (continued) Commercial Services & Supplies Veregy Consolidated, Inc. (9) L + 6.00% 7.00% 11/3/2027 20,000 19,413 19,850 0.61 JSS Holdings, Inc. (4)(9) L + 6.25% 7.25% 12/17/2027 327,174 322,295 322,266 9.86 The Action Environmental Group, Inc. (4)(7)(10) L + 6.00% 7.25% 1/16/2026 118,275 116,101 113,544 3.47 457,809 455,660 13.94 Construction & Engineering Brand Industrial Services, Inc. (9) L + 4.25% 5.25% 6/21/2024 7,884 7,317 7,706 0.24 COP Home Services TopCo IV, Inc. (4)(5)(7)(9) L + 5.00% 6.00% 12/31/2027 16,162 15,482 15,482 0.47 IEA Energy Services, LLC (8) L + 6.75% 7.00% 9/25/2024 30,517 29,556 30,466 0.93 52,355 53,654 1.64 Distributors Bution Holdco 2, Inc. (4)(9) L + 6.25% 7.25% 10/17/2025 123,438 121,467 120,969 3.70 Dana Kepner Company, LLC (4)(7)(9) L + 6.25% 7.25% 12/29/2026 71,667 70,236 70,234 2.15 EIS Buyer, LLC (4)(11) L + 6.25% 7.75% 9/30/2025 81,984 80,687 79,524 2.43 Fastlane Parent Company, Inc. (8) L + 4.50% 4.65% 2/4/2026 12,481 12,285 12,450 0.38 PSS Industrial Group Corp. (11) L + 6.00% 7.50% 4/10/2025 56,162 53,161 39,875 1.22 SEKO Global Logistics Network, LLC (4)(5)(7)(9) L + 5.00% 6.00% 12/30/2026 4,700 4,609 4,608 0.14 Tailwind Colony Holding Corporation (4)(9) L + 7.50% 8.50% 11/13/2024 33,045 32,698 31,971 0.98 Unified Door & Hardware Group, LLC (4)(9) L + 6.25% 7.25% 6/30/2025 91,063 89,440 91,063 2.79 464,583 450,695 13.79 Diversified Financial Services SelectQuote, Inc. (4)(9) L + 6.00% 7.00% 11/5/2024 59,714 58,153 60,311 1.85 Electrical Equipment Shoals Holdings, LLC (4)(9) L + 3.25% 4.25% 11/25/2026 149,687 145,982 145,944 4.47 Electronic Equipment, Instruments & Components Albireo Energy, LLC (4)(5)(7)(9) L + 6.00% 7.00% 12/23/2026 111,978 108,911 108,899 3.34 Convergeone Holdings, Inc. (8) L + 5.00% 5.15% 1/4/2026 14,617 14,187 13,849 0.42 123,098 122,748 3.76 Energy Equipment & Services Abaco Energy Technologies, LLC (4)(11) L + 7.00% 8.50% 10/4/2024 58,246 56,934 53,877 1.65 Tetra Technologies, Inc. (4)(6)(9) L + 6.25% 7.25% 9/10/2025 23,296 23,174 21,666 0.66 80,108 75,543 2.31 Health Care Equipment & Supplies Lifescan Global Corporation (8) L + 6.00% 6.23% 10/1/2024 5,797 5,633 5,537 0.17 Surgical Specialties Corp (US) Inc. (4)(6)(8) L + 5.00% 5.25% 5/7/2025 32,998 32,036 32,997 1.01 37,669 38,535 1.18 120 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2020 (in thousands) Investments—non-controlled/non-affiliated (1) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets First Lien Debt (continued) Health Care Providers & Services Epoch Acquisition, Inc. (4)(9) L + 6.75% 7.75% 10/4/2024 24,813 24,598 24,689 0.76 Healthcomp Holding Company, LLC (4)(5)(7)(9) L + 6.00% 7.00% 10/27/2026 87,300 84,901 84,827 2.60 Jayhawk Buyer, LLC (4)(7)(9) L + 5.75% 6.75% 10/15/2026 107,884 105,283 105,187 3.22 Monroe Capital Holdings, LLC (4)(7)(9) L + 6.75% 7.75% 9/8/2026 107,359 105,317 106,286 3.25 Odyssey Holding Company, LLC (4)(9) L + 5.75% 6.75% 11/16/2025 18,898 18,680 18,898 0.58 The GI Alliance Management, LLC (4)(7)(9) L + 6.25% 7.25% 11/4/2024 189,409 184,953 180,127 5.51 523,732 520,014 15.92 Health Care Technology Edifecs, Inc. (4)(9) L + 7.50% 8.50% 9/21/2026 263,008 256,739 259,063 7.93 Project Ruby Ultimate Parent Corp (4)(9) L + 4.25% 5.25% 2/9/2024 30,000 29,550 30,075 0.92 286,289 289,138 8.85 Hotels, Restaurants & Leisure Excel Fitness Holdings, Inc (9) L + 5.25% 6.25% 10/7/2025 46,588 44,918 42,939 1.31 Industrial Conglomerates Tailwind Smith Cooper Intermediate Corporation (8) L + 5.00% 5.15% 5/28/2026 30,682 29,746 29,190 0.89 Insurance Integrity Marketing Acquisition, LLC (4)(5)(7)(9) L + 6.25% 7.25% 8/27/2025 32,651 31,962 31,902 0.98 SG Acquisition, Inc. (4)(8) L + 5.75% 5.90% 1/27/2027 102,895 101,111 101,352 3.10 133,073 133,254 4.08 Interactive Media & Services Bungie, Inc. (4)(9) L + 6.25% 7.25% 8/28/2024 47,200 46,683 47,200 1.44 Internet & Direct Marketing Retail Shutterfly, Inc. (9) L + 6.00% 7.00% 9/25/2026 26,457 24,488 26,386 0.81 Donuts, Inc. (4)(7)(9) L + 6.00% 7.00% 12/29/2026 381,538 373,918 373,908 11.44 398,405 400,294 12.25 IT Services Ahead Data Blue, LLC (9) L + 5.00% 6.00% 10/13/2027 13,207 12,180 13,025 0.40 Park Place Technologies, LLC (9) L + 5.00% 6.00% 11/10/2027 45,000 43,232 43,350 1.33 55,412 56,375 1.73 Machinery Apex Tool Group, LLC (10) L + 5.25% 6.50% 8/1/2024 53,301 52,194 52,845 1.62 Oil, Gas & Consumable Fuels Eagle Midstream Canada Finance, Inc (4)(6)(11) L + 6.25% 7.75% 11/26/2024 150,862 149,099 148,599 4.55 Paper & Forest Products Pixelle Specialty Solutions, LLC (9) L + 6.50% 7.50% 10/31/2024 14,380 14,146 14,373 0.44 Personal Products Paula's Choice Holdings, Inc. (4)(9) L + 6.25% 7.25% 11/17/2025 55,000 53,523 53,488 1.64 121 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2020 (in thousands) Investments—non-controlled/non-affiliated (1) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets First Lien Debt (continued) Professional Services APFS Staffing Holdings, Inc. (8) L + 4.75% 4.90% 4/15/2026 18,201 17,922 17,916 0.55 GI Revelation Acquisition LLC (8) L + 5.00% 5.15% 4/16/2025 32,163 29,987 31,681 0.97 Minotaur Acquisition, Inc. (8) L + 5.00% 5.15% 3/27/2026 33,180 31,782 32,641 1.00 Titan Investment Company, Inc. (4)(5)(8) L + 5.75% 5.99% 3/20/2027 42,892 40,812 42,356 1.30 VT Topco, Inc. (8) L + 3.50% 3.65% 8/1/2025 4,866 4,562 4,811 0.15 125,065 129,405 3.97 Software LD Intermediate Holdings, Inc. (4)(9) L + 5.88% 6.88% 12/9/2022 17,105 16,633 17,041 0.52 MRI Software, LLC (4)(5)(7)(9) L + 5.50% 6.50% 2/10/2026 22,329 22,081 22,220 0.68 PaySimple, Inc. (4)(7)(8) L + 5.50% 5.65% 8/23/2025 53,058 51,710 51,824 1.58 Vero Parent, Inc. (9) L + 6.00% 7.00% 8/16/2024 45,528 41,661 45,598 1.40 132,085 136,683 4.18 Specialty Retail CustomInk, LLC (4)(9) L + 6.21% 7.21% 5/3/2026 133,125 131,139 130,130 3.98 Spencer Spirit Holdings, Inc. (8) L + 6.00% 6.15% 6/19/2026 45,037 42,941 44,896 1.38 174,080 175,026 5.36 Technology Hardware, Storage & Peripherals Deliver Buyer, Inc. (4)(9) L + 6.25% 7.25% 5/1/2024 49,875 48,564 50,187 1.54 Electronics For Imaging, Inc. (8) L + 5.00% 5.15% 7/23/2026 34,650 32,723 29,788 0.90 Lytx, Inc. (4)(7)(9) L + 6.00% 7.00% 2/28/2026 69,313 68,327 69,146 2.12 149,614 149,121 4.56 Trading Companies & Distributors The Cook & Boardman Group, LLC (9) L + 5.75% 6.75% 10/17/2025 50,233 49,859 48,035 1.47 Transportation Infrastructure Capstone Logistics, LLC (5)(7)(9) L + 4.75% 5.75% 11/12/2027 3,053 3,020 3,094 0.09 Spireon, Inc. (4)(9) L + 6.50% 7.50% 10/4/2024 22,961 22,780 22,847 0.70 25,800 25,941 0.79 Total First Lien Debt $ 5,493,561 $ 5,502,899 168.40 % Second Lien Debt Construction & Engineering COP Home Services TopCo IV, Inc. (4)(5)(9) L + 8.75% 9.75% 12/31/2028 $ 6,061 $ 5,925 $ 5,925 0.18 % Health Care Technology Project Ruby Ultimate Parent Corp (4)(5)(9) L + 8.25% 9.25% 2/10/2025 17,900 17,542 18,079 0.55 IT Services WEB.COM Group, Inc. (8) L + 7.75% 7.90% 10/9/2026 15,098 14,485 14,488 0.45 Software Epicor Software Corp. (5)(9) L + 7.75% 8.75% 7/31/2028 11,186 11,027 11,707 0.36 Total Second Lien Debt $ 48,979 $ 50,199 1.54 % 122 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2020 (in thousands) Investments—non-controlled/non-affiliated (1) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets Warrants Software Mermaid EquityCo L.P. - Class B Units (4) 4,550,697 $ 865 $ 865 0.03 % Total Warrants $ 865 $ 865 0.03 % Equity Aerospace & Defense Corfin Holdco, Inc. - Common Stock (4) 2,137,866 $ 4,767 $ 4,767 0.15 % Air Freight & Logistics Mode Holdings, L.P. - Class A-2 Common Units (4) 5,486,923 5,487 5,487 0.17 Distributor EIS Acquisition Holdings, LP - Class A Common Units (4) 7,519 1,773 1,873 0.06 Software Mermaid EquityCo L.P. - Class A-2 Common Units (4) 14,849,355 14,850 14,849 0.45 Specialty Retail CustomInk, LLC - Series A Preferred Units (4) 384,520 5,200 5,003 0.15 Total Equity Investments $ 32,077 $ 31,979 0.98 % Total Investment Portfolio $ 5,575,482 $ 5,585,942 170.94 % Cash and Cash Equivalents State Street Institutional U.S. Government Money Market Fund $ 29,427 $ 29,427 0.90 % Other Cash and Cash Equivalents 188,566 188,566 5.77 % Total Cash and Cash Equivalents $ 217,993 $ 217,993 6.67 % Total Portfolio Investments, Cash and Cash Equivalents $ 5,793,475 $ 5,803,935 177.61 % (1) Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2020, the Company does not “control” any of these portfolio companies. Under the 1940 Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2020, the Company is not an “affiliated person” of any of its portfolio companies. The total par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments. Each of the Company’s investments is pledged as collateral, under one or more of its credit facilities unless otherwise indicated. (2) Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate (“F”) or the U.S. Prime Rate (“P”)), which generally resets periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2020. As of December 31, 2020, the reference rates for our variable rate loans were the 30-day L at 0.14%, the 90-day L at 0.24% and the 180-day L at 0.26% and P at 3.25%. Variable rate loans typically include an interest reference rate floor feature, which is generally 1.00%. As of December 31, 2020, 88.0% of the debt portfolio at fair value had an interest rate floor above zero. (3) The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with accounting principles generally accepted in the United States of America (" U.S. GAAP "). (4) These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by or under the direction of the Board of Trustees (see Note 2 and Note 5), pursuant to the Company’s valuation policy. (5) These debt investments are not pledged as collateral under any of the Company's credit facilities. For other debt investments that are pledged to the Company's credit facilities, a single investment may be divided into parts that are individually pledged as collateral to separate credit facilities. 123 Table of Contents (6) The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2020, non-qualifying assets represented 9.7% of total assets as calculated in accordance with regulatory requirements. (7) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments: Investments—non-controlled/non-affiliated Commitment Type Commitment Expiration Date Unfunded Commitment Fair Value First Lien Debt Albireo Energy, LLC - Delayed Draw A Delayed Draw Term Loan 2/21/2021 $ 25,404 $ (254) Albireo Energy, LLC - Delayed Draw B Delayed Draw Term Loan 6/23/2022 45,043 (450) Albireo Energy, LLC Revolver 12/23/2026 9,009 (135) Capstone Logistics, LLC Delayed Draw Term Loan 11/12/2027 547 — COP Home Services TopCo IV, Inc. Delayed Draw Term Loan 12/31/2022 3,328 (92) COP Home Services TopCo IV, Inc. Revolver 12/31/2025 1,941 (63) Dana Kepner Company, LLC Delayed Draw Term Loan 12/29/2021 29,861 — DCG Acquisition Corporation Delayed Draw Term Loan 6/30/2021 50,000 — Donuts, Inc. Revolver 12/29/2026 10,598 — Healthcomp Holding Company, LLC Delayed Draw Term Loan 4/27/2022 23,280 (291) Integrity Marketing Acquisition, LLC Delayed Draw Term Loan 2/7/2022 17,267 — Jayhawk Buyer, LLC Delayed Draw Term Loan 10/15/2021 25,173 — Lytx, Inc. Delayed Draw Term Loan 2/28/2022 16,761 (168) Monroe Capital Holdings, LLC Delayed Draw Term Loan 6/8/2022 22,269 — MRI Software, LLC Delayed Draw Term Loan 1/31/2022 6,055 (15) MRI Software, LLC Revolver 2/10/2026 1,516 (38) Omni Intermediate Holdings, LLC Delayed Draw Term Loan 12/30/2021 3,250 — Omni Intermediate Holdings, LLC Revolver 12/30/2025 514 — PaySimple, Inc. Delayed Draw Term Loan 8/23/2025 8,652 — R1 Holdings, LLC Delayed Draw Term Loan 1/2/2021 6,851 — SEKO Global Logistics Network, LLC Delayed Draw Term Loan 12/30/2022 800 (12) SEKO Global Logistics Network, LLC Revolver 12/30/2026 600 (9) TCFI AEVEX, LLC Delayed Draw Term Loan 12/31/2021 13,158 (132) The Action Environmental Group, Inc. Delayed Draw Term Loan 4/16/2021 7,992 — The GI Alliance Management, LLC Delayed Draw Term Loan 5/3/2022 85,236 (852) USALCO, LLC Delayed Draw Term Loan 6/1/2022 11,295 (282) Windows Acquisition Holdings, Inc. Revolver 12/29/2025 5,880 — Total First Lien Debt Unfunded Commitments $ 432,280 $ (2,793) (8) There are no interest rate floors on these investments. (9) The interest rate floor on these investments as of December 31, 2020 was 1.00% (10) The interest rate floor on these investments as of December 31, 2020 was 1.25%. (11) The interest rate floor on these investments as of December 31, 2020 was 1.50% The accompanying notes are an integral part of these consolidated financial statements. 124 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2019 (in thousands) Investments—non-controlled/non-affiliated (1)(5) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets First Lien Debt Air Freight and Logistics Livingston International Inc. (6)(8) L + 5.75% 7.69% 4/30/2026 $ 116,415 $ 113,249 $ 115,105 6.88 % Mode Purchaser, Inc. (4)(10) L + 6.25% 8.14% 12/9/2026 178,325 174,791 174,759 10.45 R1 Holdings, LLC (4)(7)(10) L + 6.00% 7.69% 1/2/2026 44,732 44,047 44,732 2.67 332,087 334,596 20.00 Building Products Jacuzzi Brands LLC (4)(7)(10) L + 6.50% 8.30% 2/25/2025 91,640 90,132 90,723 5.42 Latham Pool Products, Inc. (8) L + 6.00% 7.76% 6/13/2025 53,571 51,824 52,812 3.16 Lindstrom, LLC (4)(10) L + 6.25% 8.48% 4/7/2025 130,633 128,444 129,980 7.77 Mi Windows and Doors, LLC (10) L + 5.50% 7.21% 11/26/2026 30,000 28,382 30,038 1.80 The Wolf Organization, LLC (4)(10) L + 6.50% 8.41% 9/3/2026 74,813 73,386 74,625 4.46 372,168 378,178 22.61 Chemicals Alchemy US Holdco 1, LLC (8) L + 5.50% 7.24% 10/10/2025 3,900 3,892 3,843 0.23 Polymer Additives, Inc. (4)(8) L + 6.00% 7.80% 7/31/2025 29,752 28,457 24,248 1.45 VDM Buyer, Inc. (4)(10) L + 6.75% 8.69% 4/22/2025 € 24,267 26,828 26,695 1.60 VDM Buyer, Inc. (4)(7)(10) L + 6.75% 8.71% 4/22/2025 63,730 62,603 62,455 3.73 121,780 117,241 7.01 Commercial Services & Supplies Research Now Group, LLC (10) L + 5.50% 7.41% 12/20/2024 28,662 28,296 28,701 1.72 JSS Holdings, Inc. (4)(10) L + 6.25% (incl. 2.00% PIK) 7.99% 10/18/2025 237,678 234,806 234,707 14.03 263,102 263,408 15.75 Construction & Engineering IEA Energy Services LLC (8) L + 8.25% 10.19% 9/25/2024 10,200 9,804 10,315 0.62 Therma LLC (4)(10) L + 6.50% 8.46% 3/29/2025 128,421 126,114 127,137 7.60 135,918 137,452 8.22 Distributors Bution Holdco 2, Inc. (4)(10) L + 6.25% 7.99% 10/17/2025 124,688 122,280 122,194 7.30 Construction Supply Acquisition, LLC (4)(7)(10) L + 6.00% 7.69% 10/1/2025 135,756 132,800 134,738 8.05 Tailwind Colony Holding Corporation (4)(10) L + 7.50% 9.44% 11/13/2024 32,081 31,703 31,439 1.88 EIS Buyer, LLC (4)(7)(12) L + 6.25% 8.05% 9/30/2025 134,072 131,504 131,390 7.85 EIS Buyer, LLC (4)(12) L + 6.25% 8.05% 9/30/2020 19,551 19,259 19,258 1.15 Fastlane Parent Company, Inc. (4)(8) L + 4.50% 6.45% 2/4/2026 34,738 34,131 34,477 2.06 PSS Industrial Group Corp. (4)(12) L + 6.00% 7.94% 4/10/2025 58,695 54,825 57,374 3.43 Unified Door and Hardware Group, LLC (4)(7)(10) L + 6.25% 8.19% 6/30/2025 39,048 38,333 38,852 2.32 564,835 569,722 34.04 125 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2019 (in thousands) Investments—non-controlled/non-affiliated (1)(5) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets First Lien Debt (continued) Diversified Financial Services SelectQuote, Inc. (4)(10) L + 6.00% 7.70% 11/5/2024 78,087 75,497 77,697 4.64 Electronic Equipment, Instruments & Components . Convergeone Holdings, Inc. (8) L + 5.00% 6.80% 1/4/2026 14,766 14,244 14,165 0.85 Energy Equipment & Services Abaco Energy Technologies LLC (4)(12) L + 7.00% 8.69% 10/4/2024 58,836 57,157 57,071 3.41 Tetra Technologies, Inc. (4)(6)(10) L + 6.25% 8.05% 9/10/2025 24,055 23,901 23,213 1.39 81,058 80,284 4.80 Health Care Equipment & Supplies Lifescan Global Corporation (8) L + 6.00% 8.06% 10/1/2024 22,862 22,072 21,890 1.31 Surgical Specialties Corp (US) Inc. (6)(8) L + 5.00% 6.80% 5/7/2025 33,416 32,218 33,166 1.98 54,290 55,056 3.29 Health Care Providers & Services Epoch Acquisition, Inc. (4)(10) L + 6.75% 8.49% 10/4/2024 25,066 24,791 25,066 1.50 The GI Alliance Management, LLC (4)(7)(10) L + 6.25% 8.19% 11/2/2024 109,902 107,804 108,191 6.47 Odyssey Holding Company, LLC (4)(10) L + 5.75% 7.78% 11/16/2025 13,628 13,483 13,492 0.81 146,078 146,749 8.78 Health Care Technology Precyse Acquisition Corporation (10) L + 4.50% 6.30% 10/20/2022 2,962 2,940 2,482 0.15 Hotels, Restaurants & Leisure Excel Fitness Holdings, Inc. (10) L + 5.25% 7.05% 10/7/2025 47,059 45,018 47,118 2.82 Industrial Conglomerates Tailwind Smith Cooper Intermediate Corporation (8) L + 5.00% 6.80% 5/28/2026 32,502 31,754 31,202 1.86 Interactive Media & Services Bungie, Inc. (4)(10) L + 6.25% 8.05% 8/28/2024 47,200 46,541 46,846 2.80 Internet & Direct Marketing Retail Shutterfly, Inc. (10) L + 6.00% 7.94% 9/25/2026 44,053 40,216 41,611 2.49 IT Services Travelport Worldwide Ltd. (6)(8) L + 5.00% 6.94% 5/29/2026 103,730 97,896 97,299 5.81 Media DiscoverOrg, LLC (8) L + 4.50% 6.30% 2/2/2026 13,092 12,978 13,157 0.79 Radiate Holdco LLC (5)(9) L + 3.50% 5.30% 2/1/2024 4,975 4,908 5,015 0.30 17,886 18,172 1.09 Machinery Apex Tool Group, LLC (11) L + 5.50% 7.30% 8/1/2024 50,955 49,820 50,390 3.01 Oil, Gas & Consumable Fuels Eagle Midstream Canada Finance Inc. (4)(7)(12) L + 6.25% 8.17% 11/26/2024 150,862 148,662 148,599 8.87 126 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2019 (in thousands) Investments—non-controlled/non-affiliated (1)(5) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets First Lien Debt (continued) Professional Services APFS Staffing Holdings, Inc. (8) L + 5.00% 6.79% 4/15/2026 22,614 22,206 22,614 1.35 Minotaur Acquisition, Inc. (8) L + 5.00% 6.80% 3/27/2026 17,597 17,283 17,377 1.04 GI Revelation Acquisition LLC (8) L + 5.00% 6.80% 4/16/2025 15,155 14,714 14,341 0.86 54,203 54,332 3.25 Software LD Intermediate Holdings, Inc. (10) L + 5.88% 7.93% 12/9/2022 14,572 14,314 14,608 0.87 PaySimple, Inc. (4)(5)(7)(8) L + 5.50% 7.30% 8/23/2025 26,488 25,984 26,328 1.57 Vero Parent, Inc. (10) L + 6.00% 7.91% 8/16/2024 51,000 45,471 48,705 2.91 85,769 89,641 5.35 Specialty Retail CustomInk, LLC (4)(10) L + 6.00% 8.21% 5/3/2026 133,125 130,766 132,459 7.92 Spencer Spirit Holdings, Inc. (8) L + 6.00% 7.79% 6/19/2026 49,875 47,102 49,485 2.96 177,868 181,944 10.88 Trading Companies & Distributors The Cook & Boardman Group, LLC (10) L + 5.75% 7.67% 10/17/2025 6,806 6,751 6,567 0.39 Technology Hardware, Storage & Peripherals Electronics For Imaging, Inc. (8) L + 5.00% 6.94% 7/23/2026 35,000 32,703 32,703 1.95 Transportation Infrastructure Spireon, Inc. (4)(7)(10) L + 6.50% 8.44% 10/4/2024 22,646 22,414 22,646 1.35 Total First Lien Debt $ 3,021,498 $ 3,046,101 182.06 % Second Lien Debt Commercial Services & Supplies TKC Holdings, Inc. (10) L + 8.00% 9.80% 2/1/2024 $ 1,000 $ 997 $ 910 0.05 % IT Services WEB.COM Group, Inc. (8) L + 7.75% 9.49% 10/9/2026 16,607 15,882 16,031 0.96 Media DiscoverOrg, LLC (8) L + 8.50% 10.19% 2/1/2027 11,250 11,100 11,306 0.68 Software Imperva, Inc. (10) L + 7.75% 9.74% 1/11/2027 1,421 1,426 1,249 0.07 Rocket Software, Inc. (8) L + 8.25% 10.05% 11/27/2026 3,500 3,377 2,923 0.17 4,803 4,172 0.24 Total Second Lien Debt $ 32,782 $ 32,419 1.93 % 127 Table of Contents Blackstone Secured Lending Fund Consolidated Schedule of Investments December 31, 2019 (in thousands) Investments—non-controlled/non-affiliated (1)(5) Reference Rate and Spread Interest Rate (2) Maturity Date Par Amount/Units Cost (3) Fair Value Percentage of Net Assets Equity Investments Air Freight and Logistics Mode Holdings, L.P. - Class A-2 Common Units (4) 5,486,923 5,487 5,487 0.33 Distributors EIS Acquisition Holdings, LP - Class A Common Units (4) 11,200 2,800 2,800 0.17 Specialty Retail CustomInk, LLC - Series A Preferred Units (4) 384,520 5,200 5,633 0.34 Total Equity Investments $ 13,487 $ 13,920 0.84 % Total Investment Portfolio $ 3,067,767 $ 3,092,440 184.83 % Cash and Cash Equivalents Other Cash and Cash Equivalents $ 65,495 $ 65,495 3.91 % Total Portfolio Investments, Cash and Cash Equivalents $ 3,133,262 $ 3,157,935 188.74 % (1) Unless otherwise indicated, issuers of debt and equity investments held by the Company (which such term “Company” shall include the Company’s consolidated subsidiaries for purposes of this Consolidated Schedule of Investments) are denominated in dollars. All debt investments are income producing unless otherwise indicated. All equity investments are non-income producing unless otherwise noted. Certain portfolio company investments are subject to contractual restrictions on sales. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “1940 Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2019, the Company does not “control” any of these portfolio companies. Under the 1940 Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2019, the Company is not an “affiliated person” of any of its portfolio companies. The total par amount is presented for debt investments, while the number of shares or units owned is presented for equity investments. (2) Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate (“F”) or the U.S. Prime Rate (“P”)), which generally resets periodically. For each loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2019. As of December 31, 2019, the reference rates for our variable rate loans were the 30-day L at 1.76%, the 90-day L at 1.91% and the 180-day L at 1.91% and P at 4.75%. Variable rate loans typically include an interest reference rate floor feature, which is generally 1.00%. As of December 31, 2019, 79.1% of the portfolio at fair value had a base rate floor above zero. (3) The cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method in accordance with U.S. GAAP. (4) These investments were valued using unobservable inputs and are considered Level 3 investments. Fair value was determined in good faith by or under the direction of the Board of Trustees (see Note 2 and Note 5), pursuant to the Company’s valuation policy. (5) Each of the Company’s debt investments is pledged as collateral, other than the investments in PaySimple, Inc. and Radiate Holdco LLC, under one or more of its credit facilities. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities. (6) The investment is not a qualifying asset under Section 55(a) of the 1940 Act. The Company may not acquire any non-qualifying asset unless, at the time of acquisition, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2019, non-qualifying assets represented 14.1% of total assets as calculated in accordance with regulatory requirements. (7) Position or portion thereof is an unfunded loan commitment, and no interest is being earned on the unfunded portion, although the investment may be subject to unused commitment fees. Negative cost and fair value results from unamortized fees, which are capitalized to the investment cost. The unfunded loan commitment may be subject to a commitment termination date that may expire prior to the maturity date stated. See below for more information on the Company’s unfunded commitments: 128 Table of Contents Investments—non-controlled/non-affiliated Commitment Type Commitment Expiration Date Unfunded Commitment Fair Value First Lien Debt Construction Supply Acquisition, LLC Delayed Draw Term Loan 10/1/2025 $ 22,626 $ — Jacuzzi Brands LLC Delayed Draw Term Loan 2/25/2021 8,450 — PaySimple, Inc. Delayed Draw Term Loan 8/23/2025 5,588 — R1 Holdings, LLC Delayed Draw Term Loan 1/2/2021 20,282 — Spireon, Inc. Delayed Draw Term Loan 6/30/2020 6,375 — EIS Acquisition Holdings, LP Delayed Draw Term Loan 9/30/2020 16,800 — The GI Alliance Management, LLC Delayed Draw Term Loan 11/2/2024 66,143 (612) Unified Door and Hardware Group, LLC Delayed Draw Term Loan 6/29/2020 15,094 — VDM Buyer, Inc. Delayed Draw Term Loan 10/22/2020 18,000 — Total First Lien Debt Unfunded Commitments $ 179,358 $ (612) (8) There are no interest rate floors on these investments. (9) The interest rate floor on these investments as of December 31, 2019 was 0.75% (10) The interest rate floor on these investments as of December 31, 2019 was 1.00% (11) The interest rate floor on these investments as of December 31, 2019 was 1.25%. (12) The interest rate floor on these investments as of December 31, 2019 was 1.50% The accompanying notes are an integral part of these consolidated financial statements. 129 Table of Contents Blackstone Secured Lending Fund Notes to Consolidated Financial Statements (in thousands, unless otherwise indicated, except per share data, percentages and as otherwise noted) Note 1. Organization Blackstone Secured Lending Fund (together with its consolidated subsidiaries, the “ Company ”), is a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment company. On October 26, 2018, the Company elected to be regulated as a business development company (“ BDC ”) under the Investment Company Act of 1940, as amended (the “ 1940 Act ”). In addition, the Company elected to be treated for U.S. federal income tax purposes, as a regulated investment company (“ RIC ”), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the “ Code ”). The Company also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The Company’s investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Company seeks to achieve its investment objective primarily through originated loans and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities. The Company is externally managed by Blackstone Credit BDC Advisors LLC (the “ Adviser ”). Blackstone Alternative Credit Advisors LP (the “ Administrator ” and, collectively with its affiliates in the credit-focused business of The Blackstone Group Inc. (" Blackstone "), “ Blackstone Credit ,” which, for the avoidance of doubt, excludes Harvest Fund Advisors LLC and Blackstone Insurance Solutions) provides certain administrative and other services necessary for the Company to operate pursuant to an administration agreement (the “ Administration Agreement ”). Blackstone Credit is part of the credit-focused platform of Blackstone and is the primary part of its credit reporting segment. The Company is conducting a private offering (the “ Private Offering ”) of its common shares of beneficial interest (i) to accredited investors, as defined in Regulation D under the Securities Act of 1933, as amended (the “1933 Act” ), and (ii) in the case of shares sold outside the United States, to persons that are not “U.S. persons,” as defined in Regulation S under the 1933 Act, in reliance on exemptions from the registration requirements of the 1933 Act. At each closing of the Private Offering, each investor makes a capital commitment (“ Capital Commitment ”) to purchase shares of the beneficial interest of the Company pursuant to a subscription agreement entered into with the Company. Investors are required to fund drawdowns to purchase the Company’s shares up to the amount of their Capital Commitments on as as-needed basis each time the Company delivers a notice to investors. On October 31, 2018, the Company began its initial period of closing of capital commitments (" Initial Closing Period ") which ended on October 31, 2020. The Company commenced its loan origination and investment activities on November 20, 2018, the date of receipt of the initial drawdown from investors in the Private Offering (the " Initial Drawdown Date "). The year ended December 31, 2018 represents the period from November 20, 2018 (commencement of operations), which was from the Initial Drawdown Date to December 31, 2018. Effective on December 10, 2020, the Company changed its name from “Blackstone / GSO Secured Lending Fund" to “Blackstone Secured Lending Fund”. Note 2. Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with U.S. GAAP. As an investment company, the Company applies the accounting and reporting guidance in Accounting Standards Codification (“ ASC ”) Topic 946, Financial Services – Investment Companies (“ ASC 946 ”) issued by the Financial Accounting Standards Board (“ FASB ”). U.S. GAAP for an investment company requires investments to be recorded at fair value. The annual consolidated financial statements have been prepared in accordance with U.S. GAAP for annual financial information and pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of 130 Table of Contents management, all adjustments considered necessary for the fair presentation of the consolidated financial statements for the periods presented have been included. All intercompany balances and transactions have been eliminated. Certain prior period information has been reclassified to conform to the current period presentation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Such amounts could differ from those estimates and such differences could be material. Assumptions and estimates regarding the valuation of investments involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. The global impact of the COVID-19 outbreak has been rapidly evolving, and as cases of COVID-19 have continued to be identified, including different variants of the disease, many countries have reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, and limiting operations of non-essential businesses. Such actions are creating disruption in many industries. The outbreak has had a continued adverse impact on economic and market conditions and has triggered a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying the consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2020 , however uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of December 31, 2020 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may ultimately differ from those estimates. Consolidation As provided under ASC 946, the Company will not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company consolidated the results of the Company’s wholly-owned subsidiaries. As of December 31, 2020, the Company's consolidated subsidiaries were BGSL Jackson Hole Funding LLC (“ Jackson Hole Funding ”), BGSL Breckenridge Funding LLC (“ Breckenridge Funding ”), BGSL Big Sky Funding LLC (" Big Sky Funding ") and BGSL Investments LLC (" BGSL Investments " and collectively with Jackson Hole Funding, Breckenridge Funding and Big Sky Funding the " SPVs "). Cash and Cash Equivalents Cash and cash equivalents consist of demand deposits and highly liquid investments, such as money market funds, with original maturities of three months or less. Cash and cash equivalents are carried at cost, which approximates fair value. The Company deposits its cash and cash equivalents with financial institutions and, at times, may exceed the Federal Deposit Insurance Corporation insured limit. Investments Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period. The Company is required to report its investments for which current market values are not readily available at fair value. The Company values its investments in accordance with FASB ASC 820, Fair Value Measurements (“ ASC 820 ”), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material. See “– Note 5. Fair Value Measurements. ” 131 Table of Contents Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. The Company utilizes mid-market pricing (i.e., mid-point of average bid and ask prices) to value these investments. These market quotations are obtained from independent pricing services, if available; otherwise from at least two principal market makers or primary market dealers. To assess the continuing appropriateness of pricing sources and methodologies, the Adviser regularly performs price verification procedures and issues challenges as necessary to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Adviser does not adjust the prices unless it has a reason to believe market quotations are not reflective of the fair value of an investment. Examples of events that would cause market quotations to not reflect fair value could include cases when a security trades infrequently or not at all, causing a quoted purchase or sale price to become stale, or in the event of a “fire sale” by a distressed seller. All price overrides require approval from the Board of Trustees (" Board "). Where prices or inputs are not available or, in the judgment of the Board, not reliable, valuation techniques based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available are valued at fair value as determined in good faith by the Board, based on, among other things, the input of the Adviser, the Audit Committee of the Board (the “ Audit Committee ”) and independent valuation firms engaged on the recommendation of the Adviser and at the direction of the Board. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity. The Company’s Board undertakes a multi-step valuation process each quarter in connection with determining the fair value of the Company’s investments for which reliable market quotations are not readily available, or are available but deemed not reflective of the fair value of an investment, which includes, among other procedures, the following: • The valuation process begins with each investment being preliminarily valued by the Adviser’s valuation team in conjunction with the Adviser’s investment professionals responsible for each portfolio investment; • In addition, independent valuation firms engaged by the Board prepare valuations of all the Company’s investments over a de minimis threshold. The independent valuation firms provide a final range of values on such investments to the Board and the Adviser. The independent valuation firms also provide analyses to support their valuation methodology and calculations; • The Adviser's Valuation Committee reviews each valuation recommendation to confirm they have been calculated in accordance with the valuation policy and compares such valuations to the independent valuation firms’ valuation ranges to ensure the Adviser’s valuations are reasonable; • The Valuation Committee makes valuation recommendations to the Audit Committee; • The Audit Committee reviews the valuation recommendations made by the Adviser's Valuation Committee, including the independent valuation firms' valuations, and once approved, recommends them for approval by the Board; and • The Board reviews the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Audit Committee, the Adviser's Valuation Committee and, where applicable, the independent valuation firms and other external service providers. Valuation of each of our investments will generally be made as described above as of the end of each fiscal quarter. In cases where we determine our net asset value ( "NAV" ) at times other than a quarter end, we intend to update the value of securities with market quotations to the most recent market quotation. For securities without market quotations, non-quarterly valuations will generally be the most recent quarterly valuation unless a material event has occurred since the most recent quarter end with respect to the investment. Independent valuation firms are generally not used for non-quarterly valuations. As part of the valuation process, the Board takes into account relevant factors in determining the fair value of its investments, many of which are loans, including and in combination, as relevant, of: (i) the estimated enterprise value of a portfolio company, (ii) the nature and realizable value of any collateral, (iii) the portfolio company’s ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, (v) a comparison of the portfolio company’s securities to any similar publicly traded securities, and (vi) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Board considers whether the pricing indicated by the external event corroborates its valuation. See “ —Note 5. Fair Value Measurements .” 132 Table of Contents The Board has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of the Company’s portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Board may reasonably rely on that assistance. However, the Board is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company’s valuation policy and a consistently applied valuation process. Receivables/Payables From Investments Sold/Purchased Receivables/payables from investments sold/purchased consist of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date. As of December 31, 2020 and 2019, the Company had $114.5 million and $2.7 million, respectively, of receivables for investments sold. As of December 31, 2020 and 2019, the Company had $48.6 million and $10.1 million, respectively, of payables for investments purchased. Derivative Instruments The Company recognizes all derivative instruments as assets or liabilities at fair value in its consolidated financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result the Company presents changes in fair value through current period gains or losses. In the normal course of business, the Company has commitments and risks resulting from its investment transactions, which may include those involving derivative instruments. Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. While the notional amount gives some indication of the Company’s derivative activity, it generally is not exchanged, but is only used as the basis on which interest and other payments are exchanged. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process. Forward Purchase Agreement The Company was a party to a forward purchase agreement pursuant to which the Company agreed to purchase certain assets held in the Middle Market Warehouse (defined in Note 7) at a purchase price based on the cost of the asset to the warehouse provider plus amounts of unpaid interest, original issue discount and structuring fees accrued to the warehouse provider during the time the warehouse provider owned the asset. Forward purchase agreements are recognized at fair value through current period gains or losses on the date on which the contract is entered into and are subsequently re-measured at fair value. All forward purchase agreements are carried as assets when fair value is positive and as liabilities when fair value is negative. A forward purchase agreement is derecognized when the obligation specified in the contract is discharged, canceled or expired. Foreign Currency Transactions Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates effective on the last business day of the period; and (ii) purchases and sales of investments, borrowings and repayments of such borrowings, income, and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates prevailing on the transaction dates. The Company includes net changes in fair values on investments held resulting from foreign exchange rate fluctuations in translation of assets and liabilities in foreign currencies on the Consolidated Statements of Operations, if any. Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities. Revenue Recognition Interest Income 133 Table of Contents Interest income is recorded on an accrual basis and includes the accretion of discounts and amortizations of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including loan origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period. For the years ended December 31, 2020, 2019 and 2018 the Company recorded $48.9 million, $3.7 million and $0.0 million, respectively, in non-recurring income (e.g. prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts and ticking fees). PIK Income The Company has loans in its portfolio that contain payment-in-kind (“ PIK ”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. Such income is included in interest income in the Consolidated Statements of Operations. If at any point the Company believes PIK is not expected to be realized, the investment generating PIK will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through interest income. To maintain the Company’s status as a RIC, this non-cash source of income must be paid out to shareholders in the form of dividends, even though the Company has not yet collected cash. For the years ended December 31, 2020, 2019 and 2018 the Company recorded PIK income of $7.1 million, $1.0 million and $0.0 million, respectively. Dividend Income Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies. Fee Income The Company may receive various fees in the ordinary course of business such as structuring, consent, waiver, amendment, syndication fees as well as fees for managerial assistance rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. Non-Accrual Income Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual status. Additionally, any original issue discount and market discount are no longer accreted to interest income as of the date the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. Organization Expenses and Offering Expenses Costs associated with the organization of the Company were expensed as incurred, subject to the limitations discussed below. These expenses consist primarily of legal fees and other costs of organizing the Company. Costs associated with the offering of the Company’s shares are capitalized as “deferred offering costs” on the Consolidated Statements of Assets and Liabilities and amortized over a twelve-month period from incurrence, subject to the limitation below. These expenses consist primarily of legal fees and other costs incurred in connection with the Company’s continuous Private Offering of its shares. Upon the expiration of the Initial Closing Period, the Company expensed the remaining deferred offering costs. The Company will not bear more than an amount equal to 0.10% of the aggregate Capital Commitments of the Company for organization and offering expenses in connection with the offering of shares. If actual organization and offering costs incurred exceed 0.10% of the Company’s total Capital Commitments, the Adviser or its affiliate will bear the excess 134 Table of Contents costs. To the extent the Company’s Capital Commitments later increase, the Adviser or its affiliates may be reimbursed for past payments of excess organization and offering costs made on the Company’s behalf provided that the total organization and offering costs borne by the Company do not exceed 0.10% of total Capital Commitments and provided further that the Adviser of its affiliates may not be reimbursed for payment of excess organization and offering expenses that were incurred more than three years prior to the proposed reimbursement. For the years ended December 31, 2020 and December 31, 2019, the Company did not accrue any organization costs. For the year ended December 31, 2018, the Company accrued organization costs of $0.7 million. For the years ended December 31, 2020, 2019 and 2018, the Company accrued offering costs of $1.5 million, $1.1 million and $0.1 million, respectively. Deferred Financing Costs and Debt Issuance Costs Deferred financing and debt issuance costs represent fees and other direct incremental costs incurred in connection with the Company’s borrowings. These expenses are deferred and amortized into interest expense over the life of the related debt instrument using the straight-line method. Deferred financing costs related to revolving credit facilities are presented separately as an asset on the Company’s Statements of Assets and Liabilities. Debt issuance costs related to any issuance of installment debt or notes are presented net against the outstanding debt balance of the related security. Income Taxes The Company has elected to be treated as a BDC under the 1940 Act. The Company also has elected to be treated as a RIC under the Code. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends. Rather, any tax liability related to income earned and distributed by the Company would represent obligations of the Company’s investors and would not be reflected in the consolidated financial statements of the Company. The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. To qualify for and maintain qualification as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its shareholders, for each taxable year, at least 90% of the sum of (i) its “investment company taxable income” for that year (without regard to the deduction for dividends paid), which is generally its ordinary income plus the excess, if any, of its realized net short-term capital gains over its realized net long-term capital losses and (ii) its net tax-exempt income. In addition, based on the excise tax distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner in each taxable year an amount at least equal to the sum of (i) 98% of its ordinary income for the calendar year, (ii) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (iii) any income realized, but not distributed, in prior years. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. Distributions To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its shareholders. Distributions to shareholders are recorded on the record date. All distributions will be paid at the discretion of the Board and will depend on our earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time. Recent Accounting Pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued guidance providing optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR (London Interbank Offered Rate) or other interbank-offered based reference rates as of the end of December 2021. Management continues to evaluate the impact of the guidance and may apply other elections, as applicable, as 135 Table of Contents the expected market transition to alternative reference rates evolves. The Company did not utilize the optional expedients and exceptions provided by ASU 2020-04 during the year ended December 31, 2020. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value disclosure requirements. The new guidance includes new, eliminated and modified fair value disclosures. Among other requirements, the guidance requires disclosure of the range and weighted average of the significant unobservable inputs for Level 3 fair value measurements and the way it is calculated. The guidance also eliminated the following disclosures: (i) amount and reason for transfers between Level 1 and Level 2, (ii) policy for timing of transfers between levels of the fair value hierarchy and (iii) valuation processes for Level 3 fair value measurement. The guidance is effective for all entities for interim and annual periods beginning after December 15, 2019. Early adoption is permitted upon issuance of the guidance. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. Note 3. Agreements and Related Party Transactions Investment Advisory Agreement On October 1, 2018, the Company entered into an investment advisory agreement with the Adviser (the “ Investment Advisory Agreement ”), pursuant to which the Adviser manages the Company on a day-to-day basis. The Adviser is responsible for originating prospective investments, conducting research and due diligence investigations on potential investments, analyzing investment opportunities, negotiating and structuring the Company’s investments and monitoring its investments and portfolio companies on an ongoing basis. The Company pays the Adviser a fee for its services under the Investment Advisory Agreement consisting of two components: a management fee and an incentive fee. The cost of both the management fee and the incentive fee will ultimately be borne by the shareholders. The initial term of the Investment Advisory Agreement was two years from October 1, 2018, and on May 6, 2020, it was renewed and approved by the Board, including a majority of trustees who are not parties to the Investment Advisory Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of the 1940 Act) (the “Independent Trustees” ), for a one-year period. Unless earlier terminated, the Investment Advisory Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board and by the vote of a majority of the Independent Trustees. Base Management Fee The management fee is payable quarterly in arrears at an annual rate of (i) prior to a quotation or listing of the Company’s securities on a national securities exchange (including through an initial public offering) or a sale of all or substantially all of its assets to, or a merger or other liquidity transaction with, an entity in which the Company’s shareholders receive shares of a publicly-traded company which continues to be managed by the Adviser or an affiliate thereof (“ Exchange Listing ”), 0.75%, and (ii) following an Exchange Listing, 1.0%, in each case of the average value of the Company’s gross assets at the end of the two most recently completed calendar quarters. For purposes of the Investment Advisory Agreement, gross assets means the Company’s total assets determined on a consolidated basis in accordance with U.S. GAAP, excluding undrawn commitments but including assets purchased with borrowed amounts. For the first calendar quarter in which the Company had operations, gross assets were measured as the average of gross assets at the Initial Drawdown Date and at the end of such first calendar quarter. If an Exchange Listing occurs on a date other than the first day of a calendar quarter, the management fee will be calculated for such calendar quarter at a weighted rate calculated based on the fee rates applicable before and after the Exchange Listing based on the number of days in such calendar quarter before and after the Exchange Listing. For the years ended December 31, 2020, 2019 and 2018, base management fees were $32.9 million, $12.6 million and $0.3 million, respectively. As of December 31, 2020 and December 31, 2019, $10.3 million and $5.0 million, respectively, was payable to the Adviser relating to management fees. Incentive Fees The incentive fee consists of two components that are determined independently of each other, with the result that one component may be payable even if the other is not. One component is based on income and the other component is based on capital gains, each as described below: (i) Income based incentive fee: 136 Table of Contents The first part of the incentive fee, an income based incentive fee, is calculated and payable quarterly in arrears based on the Company’s pre-incentive fee net investment income as defined in the Investment Advisory Agreement. Pre-incentive fee net investment income means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Company’s net assets at the end of the immediately preceding quarter from, interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses accrued for the quarter (including the management fee, expenses payable under the Administration Agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred shares, but excluding the incentive fee. Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities)), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income excludes any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The Company excludes the impact of expense support payments and recoupments from pre-incentive fee net investment income. The Company pays its Adviser an income based incentive fee with respect to the Company’s pre-incentive fee net investment income in each calendar quarter as follows: • No income based incentive fee if the Company’s pre-incentive fee net investment income, expressed as a return on the value of our net assets at the end of the immediately preceding calendar quarter, does not exceed the hurdle rate of 1.5%; • 100% of the Company’s pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than or equal to 1.76% (7.06% annualized) prior to an Exchange Listing, or 1.82% (7.27% annualized) following an Exchange Listing, of the value of the Company’s net assets. This “catch-up” portion is meant to provide the Adviser with approximately 15% prior to an Exchange Listing, or 17.5% following an Exchange Listing, of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if the “catch up” is achieved; and • 15% prior to an Exchange Listing, or 17.5% following an Exchange Listing, of the Company’s pre-incentive fee net investment income, if any, that exceeds the rate of return of 1.76% (7.06% annualized) prior to an Exchange Listing, or 1.82% (7.27% annualized) following an Exchange Listing. These calculations are prorated for any period of less than three months and adjusted for any share issuances or repurchases during the relevant quarter. If an Exchange Listing occurs on a date other than the first day of a calendar quarter, the income based incentive fee with respect to the Company’s pre-incentive fee net investment income shall be calculated for such calendar quarter at a weighted rate calculated based on the fee rates applicable before and after the Exchange Listing based on the number of days in such calendar quarter before and after the Exchange Listing. (ii) Capital gains based incentive fee: The second part of the incentive fee, a capital gains incentive fee, will be determined and payable in arrears as of the end of each calendar year in an amount equal to 15% prior to an Exchange Listing, or 17.5% following an Exchange Listing, of realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees as calculated in accordance with U.S. GAAP. The Company will accrue, but will not pay, a capital gains incentive fee with respect to unrealized appreciation because a capital gains incentive fee would be owed to the Adviser if the Company were to sell the relevant investment and realize a capital gain. For the years ended December 31, 2020, 2019 and 2018, the Company accrued income based incentive fees of $42.0 million, $13.8 million and $0.0 million, respectively. As of December 31, 2020 and December 31, 2019, $15.3 million and $6.3 million, respectively was payable to the Adviser for income based incentive fees. For the year ended December 31, 2020 the Company accrued capital gains incentive fees of $(3.1) million, none of which was payable as of December 31, 2020 under the Investment Advisory Agreement. As of December 31, 2019, the Company had accrued capital gains incentive fees of $4.2 million, none of which was payable on such date under the Investment Advisory Agreement. For the year ended December 31, 2018, the Company did not accrue any capital gains incentive fee since there were cumulative net unrealized and realized losses as of such date. Administration Agreement 137 Table of Contents On October 1, 2018, the Company entered into an Administration Agreement with the Administrator. Under the terms of the Administration Agreement, the Administrator provides, or oversees the performance of, administrative and compliance services, including, but not limited to, maintaining financial records, overseeing the calculation of NAV, compliance monitoring (including diligence and oversight of the Company’s other service providers), preparing reports to shareholders and reports filed with the United States Securities and Exchange Commission ( “SEC” ), preparing materials and coordinating meetings of the Company’s Board, managing the payment of expenses and the performance of administrative and professional services rendered by others and providing office space, equipment and office services. The Administrator may also offer to provide, on the Company’s behalf, managerial assistance to the Company’s portfolio companies. The initial term of the agreement was two years from October 1, 2018, and on May 6, 2020, it was renewed and approved by the Board and a majority of the Independent Trustees for a one-year period. Unless earlier terminated, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is approved at least annually by (i) the vote of the Board or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Independent Trustees. For providing these services, the Company will reimburse the Administrator for its costs, expenses and allocable portion of overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, including but not limited to: (i) the Company’s chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, information technology, operations and other non-investment professionals at the Administrator that perform duties for the Company; and (iii) any internal audit group personnel of Blackstone or any of its affiliates. The Administrator has elected to forgo any reimbursement for rent and other occupancy costs for the years ended December 31, 2020, 2019 and 2018. For the years ended December 31, 2020, 2019 and 2018, the Company incurred $2.3 million, $1.5 million and $0.4 million, respectively, under the Administration Agreement, which were recorded in administrative service expenses in the Company’s Consolidated Statements of Operations. As of December 31, 2020 and December 31, 2019, $1.1 million and $0.9 million, respectively, was unpaid and included in due to affiliate in the Consolidated Statements of Assets and Liabilities. Sub-Administration and Custody Agreement On October 1, 2018, the Administrator entered into a sub-administration agreement (the “ Sub-Administration Agreement ”) with State Street Bank and Trust Company (the “ Sub-Administrator ”) under which the Sub-Administrator provides various accounting and administrative services to the Company. The Sub-Administrator also serves as the Company’s custodian (the “ Custodian ”). The initial term of the Sub-Administration Agreement is two years from the effective date and after expiration of the initial term and the Sub-Administration Agreement shall automatically renew for successive one-year periods, unless a written notice of non-renewal is delivered prior to 120 days prior to the expiration of the initial term or renewal term. Expense Support and Conditional Reimbursement Agreement On December 12, 2018, the Company entered into an Expense Support and Conditional Reimbursement Agreement (the “ Expense Support Agreement ”) with the Adviser. The Adviser may elect to pay certain expenses of the Company on the Company’s behalf (each, an “ Expense Payment ”), provided that no portion of the payment will be used to pay any interest of the Company. Any Expense Payment that the Adviser has committed to pay must be paid by the Adviser to the Company in any combination of cash or other immediately available funds no later than forty-five days after such commitment was made in writing, and/or offset against amounts due from the Company to the Adviser or its affiliates. Following any calendar quarter in which Available Operating Funds (as defined below) exceed the cumulative distributions accrued to the Company’s shareholders based on distributions declared with respect to record dates occurring in such calendar quarter (the amount of such excess being hereinafter referred to as “ Excess Operating Funds ”), the Company shall pay such Excess Operating Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such calendar quarter have been reimbursed. Any payments required to be made by the Company shall be referred to herein as a “ Reimbursement Payment .” Available Operating Funds means the sum of (i) the Company’s net investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii) the Company’s net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above). 138 Table of Contents No Reimbursement Payment for any calendar quarter shall be made if the annualized rate of regular cash distributions declared by the Company on record dates in the applicable calendar quarter of such Reimbursement Payment is less than the annualized rate of regular cash distributions declared by the Company on record dates in the calendar quarter in which the Expense Payment was committed to which such Reimbursement Payment relates. The Company’s obligation to make a Reimbursement Payment shall automatically become a liability of the Company on the last business day of the applicable calendar quarter. The following table presents a summary of Expense Payments and the related Reimbursement Payments since the Company's commencement of operations: For the Quarter Ended Expense Payments by Adviser Reimbursement Payments to Adviser Unreimbursed Expense Payments December 31, 2018 $ 1,696 $ (1,696) $ — March 31, 2019 570 (570) — Total $ 2,266 $ (2,266) $ — For the years ended December 31, 2020, 2019 and 2018, the Adviser made Expense Payments in the amount of $0.0 million, $0.6 million and $1.7 million, respectively. For the years ended December 31, 2020, 2019 and 2018, the Company made Reimbursement Payments related to Expense Payments by the Adviser of $1.5 million, $0.8 million and $0.0 million, respectively. Note 4. Investments The composition of the Company’s investment portfolio at cost and fair value was as follows: December 31, 2020 December 31, 2019 Cost Fair Value % of Total Investments at Fair Value Cost Fair Value % of Total Investments at Fair Value First lien debt $ 5,493,561 $ 5,502,899 98.51 % $ 3,021,498 $ 3,046,101 98.50 % Second lien debt 48,979 50,199 0.90 32,782 32,419 1.05 Equity 32,942 32,844 0.59 13,487 13,920 0.45 Total $ 5,575,482 $ 5,585,942 100.00 % $ 3,067,767 $ 3,092,440 100.00 % 139 Table of Contents The industry composition of investments at fair value was as follows: December 31, 2020 December 31, 2019 Aerospace & Defense 7.03 % — % Air Freight & Logistics 6.44 11.00 Building Products 7.79 12.23 Capital Markets 0.11 — Chemicals 8.31 3.79 Commercial Services & Supplies 8.16 8.55 Construction & Engineering 1.07 4.44 Distributors 8.10 18.51 Diversified Financial Services 1.08 2.51 Electrical Equipment 2.61 — Electronic Equipment, Instruments & Components 2.19 0.46 Energy Equipment & Services 1.35 2.60 Health Care Equipment & Supplies 0.69 1.78 Health Care Providers & Services 9.31 4.75 Health Care Technology 5.50 0.08 Hotels, Restaurants & Leisure 0.77 1.52 Industrial Conglomerates 0.52 1.01 Insurance 2.39 — Interactive Media & Services 0.84 1.51 Internet & Direct Marketing Retail 7.17 1.35 IT Services 1.27 3.66 Machinery 0.95 1.63 Media — 0.95 Oil, Gas & Consumable Fuels 2.66 4.81 Paper & Forest Products 0.26 — Personal Products 0.96 — Professional Services 2.32 1.76 Software 2.94 3.03 Specialty Retail 3.22 6.07 Technology Hardware, Storage & Peripherals 2.67 1.06 Trading Companies & Distributors 0.86 0.21 Transportation Infrastructure 0.46 0.73 Total 100.00 % 100.00 % The geographic composition of investments at cost and fair value was as follows: December 31, 2020 Cost Fair Value % of Total Investments at Fair Value Fair Value as % of Net Assets United States $ 5,205,832 $ 5,209,138 93.25 % 159.41 % Canada 267,544 270,126 4.84 8.27 Germany 102,106 106,678 1.91 3.26 Total $ 5,575,482 $ 5,585,942 100.00 % 170.94 % 140 Table of Contents December 31, 2019 Cost Fair Value % of Total Investments at Fair Value Fair Value as % of Net Assets United States $ 2,675,743 $ 2,698,272 87.25 % 161.27 % Canada 261,911 263,704 8.53 15.76 Luxembourg 130,113 130,464 4.22 7.80 Total $ 3,067,767 $ 3,092,440 100.00 % 184.83 % As of December 31, 2020 and December 31, 2019, no loans in the portfolio were on non-accrual status. As of December 31, 2020 and December 31, 2019, on a fair value basis, approximately 100.0% and 100.0%, respectively, of our performing debt investments bore interest at a floating rate and approximately 0.0% and 0.0%, respectively, of our performing debt investments bore interest at a fixed rate. Note 5. Fair Value Measurements The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. The fair value hierarchy under ASC 820 prioritizes the inputs to valuation methodology used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The levels used for classifying investments are not necessarily an indication of the risk associated with investing in these securities. The three levels of the fair value hierarchy are as follows: • Level 1: Inputs to the valuation methodology are quoted prices available in active markets for identical instruments as of the reporting date. The types of financial instruments included in Level 1 include unrestricted securities, including equities and derivatives, listed in active markets. • Level 2: Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities and certain over-the-counter derivatives where the fair value is based on observable inputs. • Level 3: Inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category include debt and equity investments in privately held entities, collateralized loan obligations (“ CLOs ”) and certain over-the-counter derivatives where the fair value is based on unobservable inputs. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfer occurs. In addition to using the above inputs in investment valuations, the Company applies the valuation policy approved by its Board that is consistent with ASC 820. Consistent with the valuation policy, the Company evaluates the source of the inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. When an investment is valued based on prices provided by reputable dealers or pricing services (that is, broker quotes), the Company subjects those prices to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level 2 or Level 3 investment. In the absence of independent, reliable market quotes, an enterprise value analysis is typically performed to determine the value of equity investments, control debt investments and non-control debt investments that are credit-impaired, and to determine if debt investments are credit impaired. Enterprise value (“ EV ”) means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in 141 Table of Contents time. When an investment is valued using an EV analysis, the EV of a portfolio company is first determined and allocated over the portfolio company’s securities in order of their preference relative to one another (i.e. “waterfall” allocation). If debt investments are credit-impaired, which occurs when there is insufficient coverage under the EV analysis through the respective investment’s position in the capital structure, the Adviser uses the enterprise value “waterfall” approach or a recovery method (if a liquidation or restructuring is deemed likely) to determine fair value. For debt investments that are not determined to be credit-impaired, the Adviser uses a market interest rate yield analysis (discussed below) to determine fair value. The Adviser will generally utilize approaches including the market approach, the income approach or both approaches, as appropriate, when calculating EV. The primary method for determining EV for non-control investments, and control investments without reliable projections, uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s earnings before interest, taxes, depreciation and amortization (“ EBITDA ”) or another key financial metric (e.g. such as revenues, cash flows or net income) (“ Performance Multiple ”). Performance Multiples are typically determined based upon a review of publicly traded comparable companies and market comparable transactions, if any. The second method for determining EV (and primary method for control investments with reliable projections) uses a discounted cash flow analysis whereby future expected cash flows and the anticipated terminal value of the portfolio company are discounted to determine a present value using estimated discount rates. The income approach is generally used when the Adviser has visibility into the long term projected cash flows of a portfolio company, which is more common with control investments. Subsequently, for non-control debt investments that are not credit-impaired, and where there is an absence of available market quotations, fair value is determined using a yield analysis. To determine fair value using a yield analysis, the expected cash flows are projected based on the contractual terms of the debt security and discounted back to the measurement date based on a market yield. A market yield is determined based upon an assessment of current and expected market yields for similar investments and risk profiles. The Company considers the current contractual interest rate, the maturity and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the enterprise value of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the Company depends on primary market data, including newly funded transactions, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable. The fair value of loans with call protection is generally capped at par plus applicable prepayment premium in effect at the measurement date. The following table presents the fair value hierarchy of financial instruments: December 31, 2020 Level 1 Level 2 Level 3 Total First lien debt $ — $ 774,421 $ 4,728,478 $ 5,502,899 Second lien debt — 26,196 24,003 50,199 Equity — — 32,844 32,844 Total $ — $ 800,617 $ 4,785,325 $ 5,585,942 December 31, 2019 Level 1 Level 2 Level 3 Total First lien debt $ — $ 804,708 $ 2,241,393 $ 3,046,101 Second lien debt — 32,419 — 32,419 Equity — — 13,920 13,920 Total $ — $ 837,127 $ 2,255,313 $ 3,092,440 The following table presents changes in the fair value of financial instruments for which Level 3 inputs were used to determine the fair value: 142 Table of Contents For the Year Ended December 31, 2020 First Lien Debt Second Lien Debt Equity Total Investments Fair value, beginning of period $ 2,241,393 $ — $ 13,920 $ 2,255,313 Purchases of investments 3,184,560 23,466 20,170 3,228,196 Proceeds from principal repayments and sales of investments (769,646) — (715) (770,361) Accretion of discount/amortization of premium 25,107 — — 25,107 Net realized gain (loss) 933 — — 933 Net change in unrealized appreciation (depreciation) (648) 537 (531) (642) Transfers into Level 3 (1) 162,879 — — 162,879 Transfers out of Level 3 (1) (116,100) — — (116,100) Fair value, end of period $ 4,728,478 $ 24,003 $ 32,844 $ 4,785,325 Net change in unrealized appreciation (depreciation) included in earnings related to financial instruments still held as of December 31, 2020 included in net unrealized appreciation (depreciation) on the Consolidated Statements of Operations $ 2,212 $ 537 $ (531) $ 2,218 For the Year Ended December 31, 2019 First Lien Debt Equity Investments Total Investments Forward Purchase Obligation Fair value, beginning of period $ 328,125 $ — $ 328,125 $ (222) Purchases of investments 2,134,729 13,487 2,148,216 — Proceeds from principal repayments and sales of investments (177,349) — (177,349) — Accretion of discount/amortization of premium 5,560 — 5,560 — Net realized gain (loss) 132 — 132 — Net change in unrealized appreciation (depreciation) 11,780 433 12,213 222 Transfers into Level 3 (1) — — — — Transfers out of Level 3 (1) (61,584) — (61,584) — Fair value, end of period $ 2,241,393 $ 13,920 $ 2,255,313 $ — Net change in unrealized appreciation (depreciation) included in earnings related to financial instruments still held as of December 31, 2019 included in net unrealized appreciation (depreciation) on the Consolidated Statements of Operations $ 11,821 $ 433 $ 12,254 $ — (1) For the year ended December 31, 2020 and 2019, transfers into or out of Level 3 were primarily due to decreased or increased price transparency. The following table presents quantitative information about the significant unobservable inputs of the Company’s Level 3 financial instruments. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to the Company’s determination of fair value. 143 Table of Contents December 31, 2020 Range Fair Value Valuation Technique Unobservable Input Low High Weighted Average (1) Investments in first lien debt $ 4,255,348 Yield analysis Discount rate 5.85 % 10.98 % 7.79 % 468,483 Market quotations Broker quoted price 98.00 100.63 99.05 4,647 Recent transaction Recent transaction 97.50 100.00 99.99 4,728,478 Investments in second lien debt 5,924 Yield analysis Discount rate 10.26 % 10.26 % 10.26 % 18,079 Market quotations Broker quoted price 101.00 101.00 101.00 24,003 Investments in warrant 865 Option pricing model Expected volatility 25.00 % 25.00 % 25.00 % Investments in equity 31,979 Market approach Performance multiple 9.17x 13.25x 10.60x Total $ 4,785,325 December 31, 2019 Range Fair Value Valuation Technique Unobservable Input Low High Weighted Average (1) Investments in first lien debt $ 1,886,531 Yield Analysis Discount Rate 7.68 % 13.58 % 8.39 % 354,862 Market Quotations Broker Quoted Price 81.50 99.50 97.87 2,241,393 Investments in equity 13,920 Market Approach Performance Multiple 6.15x 13.50x 10.18x Total $ 2,255,313 (1) Weighted averages are calculated based on fair value of investments. The significant unobservable input used in the yield analysis is the discount rate based on comparable market yields. The significant unobservable input used for market quotations are broker quoted prices provided by independent pricing services. The significant unobservable input used under the market approach is the performance multiple. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in quoted prices or performance multiples would result in a significantly lower fair value measurement. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the Company’s investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned. 144 Table of Contents Derivative Instruments Under the Syndicated Warehouse (See “ —Note 7. Commitments and Contingencies ”), the Company had the right, but not the obligation, to purchase equity interests of a warehouse vehicle from a third party at an agreed upon price. In this regard, the Company exercised its right to acquire such equity interests on December 11, 2018, at which time the assets and liabilities of the warehouse were included in the Company’s consolidated financial statements. The notional amount of assets acquired and liabilities assumed on December 11, 2018 were $152.3 million and $127.9 million, respectively. The Company determined that this contractual right met the definition of a derivative, and as a result, recorded a loss at the time the Company acquired the equity interests in the warehouse in the amount of $0.6 million, which was recorded in realized loss on derivatives in the Company’s Consolidated Statement of Operations. Financial Instruments Not Carried at Fair Value Debt The fair value of the Company’s credit facilities, which would be categorized as Level 3 within the fair value hierarchy, as of December 31, 2020 and December 31, 2019, approximates its carrying value as the credit facilities have variable interest based on selected short term rates. The fair value of the Company’s 2023 Notes and 2026 Notes issued in the current year, which would be categorized as Level 2 within the fair value hierarchy, as of December 31, 2020 was $416.2 million and $823.2 million, respectively, based on vendor pricing received by the Company. The carrying amounts of the Company’s assets and liabilities, other than investments at fair value and the 2023 Notes and the 2026 Notes, approximate fair value. These financial instruments are categorized as Level 3 within the hierarchy. Note 6. Borrowings In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. As of December 31, 2020 and December 31, 2019, the Company’s asset coverage was 230.0% and 215.1%, respectively. Subscription Facility On November 6, 2018, the Company entered into a revolving credit facility (which was subsequently amended on September 16, 2019 and as further amended from time to time, the “Subscription Facility” ) with Bank of America, N.A., as the administrative agent, the sole lead arranger, the letter of credit issuer and a lender, and the other lenders from time to time party thereto. The Subscription Facility was terminated on November 3, 2020. Jackson Hole Funding Facility On November 16, 2018, BGSL Jackson Hole Funding LLC (“ Jackson Hole Funding ”), the Company’s wholly-owned subsidiary that holds primarily originated loan investments, entered into a senior secured revolving credit facility (which was subsequently amended on February 6, 2019, September 20, 2019 and July 28, 2020 and as further amended from time to time, the “Jackson Hole Funding Facility” ) with JPMorgan Chase Bank, National Association ( “JPM” ). JPM serves as administrative agent, Citibank, N.A., serves as collateral agent and securities intermediary, Virtus Group, LP serves as collateral administrator and the Company serves as portfolio manager under the Jackson Hole Funding Facility. Advances under the Jackson Hole Funding Facility bear interest at a per annum rate equal to the three-month LIBOR in effect, plus the applicable margin of 2.375% per annum. Effective January 16, 2019, Jackson Hole Funding pays a commitment fee of 0.60% per annum (or 0.375% per annum until March 20, 2020) on the average daily unused amount of the financing commitments until the third anniversary of the Jackson Hole Funding Facility. The initial maximum commitment amount of the Jackson Hole Funding Facility was $300 million. Effective September 20, 2019, the maximum commitment amount of the Jackson Hole Funding Facility was increased to $600 million and effective July 28, 2020, the maximum commitment amount of the Jackson Hole Funding Facility was reduced to $400 million. The Jackson Hole Funding Facility has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Jackson Hole Funding Facility to up to $900 million. Proceeds from borrowings under the Jackson Hole Funding Facility may be used to fund portfolio investments by Jackson Hole Funding and to make advances 145 Table of Contents under delayed draw term loans where Jackson Hole Funding is a lender. The period during which Jackson Hole Funding may make borrowings under the Jackson Hole Funding Facility expires on November 16, 2021 and the Jackson Hole Funding Facility is scheduled to mature on May 16, 2023 ( “Maturity Date” ). Jackson Hole Funding’s obligations to the lenders under the Jackson Hole Funding Facility are secured by a first priority security interest in Jackson Hole Funding’s portfolio of investments and cash. The obligations of Jackson Hole Funding under the Jackson Hole Funding Facility are non-recourse to the Company, and the Company’s exposure under the Jackson Hole Funding Facility is limited to the value of its investment in Jackson Hole Funding. In connection with the Jackson Hole Funding Facility, Jackson Hole Funding has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Jackson Hole Funding Facility contains customary events of default for similar financing transactions, including if a change of control of Jackson Hole Funding occurs or if the Company is no longer the portfolio manager of Jackson Hole Funding. Upon the occurrence and during the continuation of an event of default, JPM may declare the outstanding advances and all other obligations under the Jackson Hole Funding Facility immediately due and payable. The occurrence of an event of default (as described above) or a market value event (as defined in the Jackson Hole Funding Facility) triggers a requirement that Jackson Hole Funding obtain the consent of JPM prior to entering into any sale or disposition with respect to portfolio assets, and the occurrence of a market value event triggers the right of JPM to direct Jackson Hole Funding to enter into sales or dispositions with respect to any portfolio assets, in each case in JPM’s sole discretion. As of December 31, 2020 and December 31, 2019, the Company was in compliance with all covenants and other requirements of the Jackson Hole Funding Facility. Breckenridge Funding Facility On December 21, 2018, BGSL Breckenridge Funding LLC (“ Breckenridge Funding ”), the Company’s wholly owned subsidiary that holds primarily syndicated loan investments, entered into a senior secured revolving credit facility (which was subsequently amended on June 11, 2019, August 2, 2019, September 27, 2019 and April 13, 2020, and as further amended from time to time, the “Breckenridge Funding Facility” ) with BNP Paribas (“ BNP ”). BNP serves as administrative agent, Wells Fargo Bank, National Association serves as collateral agent and the Company serves as servicer under the Breckenridge Funding Facility. Advances under the Breckenridge Funding Facility bear interest at a per annum rate equal to the three-month LIBOR (or other Base Rate) in effect, plus an applicable margin of 1.75%, 2.00% or 2.22% per annum, as applicable, depending on the nature of the advances being requested under the facility. Breckenridge Funding will pay a commitment fee of 0.70% per annum if the unused facility amount is greater than 50% or 0.35% per annum if the unused facility amount is less than or equal to 50% and greater than 25%, based on the average daily unused amount of the financing commitments until December 21, 2022, in addition to certain other fees as agreed between Breckenridge Funding and BNP. The initial maximum commitment amount of the BNP SPV Facility was $400 million. Effective June 11, 2019, the maximum commitment amount of the BNP SPV Facility was increased to $575 million; effective September 27, 2019, the maximum commitment amount of the BNP SPV Facility was increased to $875 million and on April 13, 2020, the maximum commitment amount of the BNP Facility was increased to $1,125 million. Proceeds from borrowings under the BNP SPV Facility may be used to fund portfolio investments by Breckenridge Funding and to make advances under delayed draw and revolving loans where Breckenridge Funding is a lender. The period during which Breckenridge Funding may make borrowings under the BNP SPV Facility for the remaining commitment amounts expires on December 21, 2021 (or such later date as may be agreed by Breckenridge Funding, BNP, as administrative agent, and the lenders under the BNP SPV Facility), except for $300 million of outstanding principal which expired on September 27, 2020. The BNP SPV Facility is scheduled to mature on December 21, 2023. Breckenridge Funding’s obligations to the lenders under the Breckenridge Funding Facility are secured by a first priority security interest in all of Breckenridge Funding’s portfolio of investments and cash. The obligations of Breckenridge Funding under the Breckenridge Funding Facility are non-recourse to the Company, and the Company’s exposure under the Breckenridge Funding Facility is limited to the value of its investment in Breckenridge Funding. In connection with the Breckenridge Funding Facility, Breckenridge Funding has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Breckenridge Funding Facility contains customary events of default for similar financing 146 Table of Contents transactions, including if a change of control of Breckenridge Funding occurs or if the Company is no longer the servicer of Breckenridge Funding. Upon the occurrence and during the continuation of an event of default, BNP may declare the outstanding advances and all other obligations under the Breckenridge Funding Facility immediately due and payable. The occurrence of an event of default (as described above) suspends the ability of Breckenridge Funding to acquire or sell additional assets. As of December 31, 2020 and December 31, 2019, the Company was in compliance with all covenants and other requirements of the Breckenridge Funding Facility. Big Sky Funding Facility On December 10, 2019, BGSL Big Sky Funding LLC (“ Big Sky Funding ”), the Company’s wholly-owned subsidiary, entered into a senior secured revolving credit facility (which was subsequently amended on December 30, 2020, and as further amended from time to time, the “ Big Sky Funding Facility ”) with Bank of America, N.A. (“ Bank of America ”). Bank of America serves as administrative agent, Wells Fargo Bank, N.A. serves as collateral administrator and the Company serves as manager under the Revolving Credit Facility. Advances under the Big Sky Funding Facility bear interest at a per annum rate equal to the one-month or three-month London Interbank Offered Rate in effect, plus the applicable margin of 1.60% per annum. Big Sky Funding is required to utilize a minimum percentage of the financing commitments (the “ Minimum Utilization Amount ”), which amount increases in three-month intervals from 20% six months after the closing date of the Big Sky Funding Facility to 80% 15 months after the closing date of the Revolving Credit Facility and thereafter. Unused amounts below the Minimum Utilization Amount accrue a fee at a rate of 1.60% per annum. In addition, Big Sky Funding will pay an unused fee of 0.45% per annum on the daily unused amount of the financing commitments in excess of the Minimum Utilization Amount, commencing three months after the closing date of the Big Sky Funding Facility. The initial maximum commitment amount of the Big Sky Funding Facility is $400 million. Effective May 14, 2020, Big Sky Funding exercised its accordion feature under the Big Sky Funding Facility, which increased the maximum commitment amount to $500 million. Effective December 30, 2020, the maximum commitment amount of the Big Sky Funding Facility was reduced to $400 million. Proceeds from borrowings under the Big Sky Funding Facility may be used to fund portfolio investments by Big Sky Funding and to make advances under revolving loans or delayed draw term loans where Big Sky Funding is a lender. All amounts outstanding under the Big Sky Funding Facility must be repaid by December 10, 2022. Big Sky Funding's obligations to the lenders under the Big Sky Funding Facility are secured by a first priority security interest in all of Big Sky Funding's portfolio investments and cash. The obligations of Big Sky Funding under the Big Sky Funding Facility are non-recourse to the Company, and the Company’s exposure under the Big Sky Funding Facility is limited to the value of the Company’s investment in Big Sky Funding. In connection with the Big Sky Funding Facility, Big Sky Funding has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Revolving Credit Facility contains customary events of default for similar financing transactions, including if a change of control of SPV occurs. Upon the occurrence and during the continuation of an event of default, Bank of America may declare the outstanding advances and all other obligations under the Revolving Credit Facility immediately due and payable. The occurrence of an event of default (as described above) triggers a requirement that SPV obtain the consent of Bank of America prior to entering into any sale or disposition with respect to portfolio investments . As of December 31, 2020, the Company was in compliance with all covenants and other requirements of the Big Sky Funding Facility. Revolving Credit Facility On June 15, 2020, the Company entered into a senior secured revolving credit facility (which was subsequently amended on June 29, 2020 and as further amended from time to time, the “ Revolving Credit Facility ”) with Citibank, N.A. (“ Citi ”). Citi serves as administrative agent and collateral agent. The Revolving Credit Facility provides for borrowings in U.S. dollars and certain agreed upon foreign currencies in an initial aggregate amount of up to $550 million. Effective June 29, 2020, the maximum commitment amount of the Revolving Credit Facility increased to $650 million. Effective November 3, 2020, the maximum commitment amount of the Revolving Credit Facility increased to $745 million. Borrowings under the Revolving Credit Facility are subject to compliance with a borrowing base. The Revolving Credit Facility has an accordion feature, subject to the satisfaction of various conditions, which 147 Table of Contents could bring total commitments under the Revolving Credit Facility to up to $1.2 billion. The Revolving Credit Facility provides for the issuance of letters of credit on behalf of the Company in an aggregate face amount not to exceed $100 million. Proceeds from the borrowings under the Revolving Credit Facility may be used for general corporate purposes of the Company and its subsidiaries in the ordinary course of business. Availability of the revolver under the Revolving Credit Facility will terminate on June 15, 2024 and all amounts outstanding under the Revolving Credit Facility must be repaid by June 15, 2025 pursuant to an amortization schedule. Loans under the Revolving Credit Facility bear interest at a per annum rate equal to, (x) for loans for which the Company elects the base rate option, the “alternate base rate” (which is the greatest of (a) the prime rate as publicly announced by Citi, (b) the sum of (i) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System plus (ii) 0.5%, and (c) one month LIBOR plus 1% per annum) plus (A) if the gross borrowing base is equal to or greater than 1.6 times the combined revolving debt amount, 0.75%, or (B) if the gross borrowing base is less than 1.6 times the combined revolving debt amount, 0.875%, and (y) for loans for which the Company elects the Eurocurrency option, the applicable LIBO Rate for the related Interest Period for such Borrowing plus (A) if the gross borrowing base is equal to or greater than 1.6 times the combined revolving debt amount, 1.75%, or (B) if the gross borrowing base is less than 1.6 times the combined revolving debt amount, 1.875%. The Company will pay an unused fee of 0.375% per annum on the daily unused amount of the revolver commitments. The Company will pay letter of credit participation fees and a fronting fee on the average daily amount of any lender’s exposure with respect to any letters of credit issued under the Revolving Credit Facility. The Company’s obligations to the lenders under the Revolving Credit Facility are secured by a first priority security interest in substantially all of the Company’s assets. In connection with the Revolving Credit Facility, the Company has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. In addition, the Company must comply with the following financial covenants: (a) the Company must maintain a minimum shareholders’ equity, measured as of each fiscal quarter end; and (b) the Company must maintain at all times a 150% asset coverage ratio. The Revolving Credit Facility contains customary events of default for similar financing transactions. Upon the occurrence and during the continuation of an event of default, Citi may terminate the commitments and declare the outstanding advances and all other obligations under the Revolving Credit Facility immediately due and payable. As of December 31, 2020, the Company was in compliance with all covenants and other requirements of the Revolving Credit Facility. 2023 Notes On July 15, 2020, the Company issued $400 million aggregate principal amount of 3.650% notes due 2023 (the “2023 Notes” ) pursuant to an indenture (the “Base Indenture” ) and a supplemental indenture, each dated as of July 15, 2020 (the “First Supplemental Indenture,” and together with the Base Indenture, the “2023 Notes Indenture” ), between the Company and U.S. Bank National Association (the “Trustee” ). The 2023 Notes will mature on July 14, 2023 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the 2023 Notes Indenture. The 2023 Notes bear interest at a rate of 3.650% per year payable semi-annually on January 14 and July 14 of each year, commencing on January 14, 2021. The 2023 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2023 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities. The 2023 Notes Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the 1940 Act, whether or not it is subject to those requirements, and to provide financial information to the holders of the 2023 Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Exchange Act. These covenants are subject to important limitations and exceptions that are described in the 2023 Notes Indenture. 148 Table of Contents In addition, on the occurrence of a “change of control repurchase event,” as defined in the 2023 Notes Indenture, the Company will generally be required to make an offer to purchase the outstanding 2023 Notes at a price equal to 100% of the principal amount of such 2023 Notes plus accrued and unpaid interest to the repurchase date. As of December 31, 2020, the Company was in compliance with all covenants and other requirements of the 2023 Notes. 2026 Notes On each of October 23, 2020 and December 1, 2020, the Company issued $500 million aggregate principal amount and $300 million aggregate principal amount, respectively, of 3.625% notes due 2026 (the “2026 Notes” ) pursuant to a supplemental indenture, dated as of October 23, 2020 (the “Second Supplemental Indenture,” and together with the Base Indenture, the “2026 Notes Indenture” ), to the Base Indenture between the Company and the Trustee. The 2026 Notes will mature on January 15, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the 2026 Notes Indenture. The 2026 Notes bear interest at a rate of 3.625% per year payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2021. The 2026 Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2026 Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities. The 2026 Notes Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the 2026 Notes Indenture. In addition, on the occurrence of a “change of control repurchase event,” as defined in the 2026 Notes Indenture, the Company will generally be required to make an offer to purchase the outstanding Notes at a price equal to 100% of the principal amount of such Notes plus accrued and unpaid interest to the repurchase date. As of December 31, 2020, the Company was in compliance with all covenants and other requirements of the 2026 Notes. The Company’s outstanding debt obligations were as follows: December 31, 2020 Aggregate Principal Committed Outstanding Principal Carrying Value Unused Portion (1) Amount Available (2) Jackson Hole Funding Facility (3) $ 400,000 $ 362,316 $ 362,316 $ 37,684 $ 37,684 Breckenridge Funding Facility 825,000 569,000 569,000 256,000 256,000 Big Sky Funding Facility 400,000 200,346 200,346 199,654 117,599 Revolving Credit Facility (4) 745,000 182,901 182,901 562,099 562,099 2023 Notes (5) 400,000 400,000 394,549 — — 2026 Notes (5) 800,000 800,000 791,281 — — Total $ 3,570,000 $ 2,514,563 $ 2,500,393 $ 1,055,437 $ 973,382 149 Table of Contents December 31, 2019 Aggregate Principal Committed Outstanding Principal Carrying Value Unused Portion (1) Amount Available (2) Subscription Facility $ 400,000 $ 119,752 $ 119,752 $ 280,248 $ 280,248 Jackson Hole Funding Facility (3) 600,000 514,151 514,151 85,849 5,843 Breckenridge Funding Facility 875,000 820,311 820,311 54,689 10,769 Big Sky Funding Facility 400,000 — — 400,000 25,481 Total $ 2,275,000 $ 1,454,214 $ 1,454,214 $ 820,786 $ 322,341 (1) The unused portion is the amount upon which commitment fees, if any, are based. (2) The amount available reflects any limitations related to each respective credit facility’s borrowing base. (3) Under the Jackson Hole Funding Facility, the Company may borrow in U.S. dollars or certain other permitted currencies. As of December 31, 2020, the Company had borrowings denominated in Euros (EUR) of 23.5 million. As of December 31, 2019, the Company had borrowings denominated in Euros (EUR) of 23.9 million. (4) Under the Revolving Credit Facility, the Company may borrow in U.S. dollars or certain other permitted currencies. As of December 31, 2020, the Company had borrowings denominated in Canadian Dollars (CAD) of 138.1 million. (5) The carrying value of the Company's 2023 Notes and 2026 Notes is presented net of unamortized debt issuance costs of $5.5 million and $8.7 million, respectively, as of December 31, 2020. As of December 31, 2020 and December 31, 2019, $14.1 million and $5.3 million, respectively, of interest expense and $0.6 million and $0.2 million, respectively, of unused commitment fees was included in interest payable. For the years ended December 31, 2020, 2019 and 2018, the weighted average interest rate on all borrowings outstanding was 3.26%, 4.36% and 5.42% (including unused fees and accretion of net discounts on unsecured debt), respectively, and the average principal debt outstanding was $1,902.7 million,$776.6 million and $162.0 million, respectively. The components of interest expense were as follows: For the Year Ended December 31, 2020 2019 2018 Borrowing interest expense $ 57,437 $ 32,859 $ 935 Facility unused fees 3,374 1,007 89 Amortization of financing costs and debt issuance costs 3,993 1,565 327 Accretion of original issue discount 1,145 — — Total Interest Expense $ 65,949 $ 35,431 $ 1,351 Cash paid for interest expense $ 51,918 $ 28,946 $ 105 Note 7. Commitments and Contingencies Portfolio Company Commitments The Company’s investment portfolio may contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of December 31, 2020 and December 31, 2019 the Company had unfunded delayed draw terms loans and revolvers in the aggregate principal amount of $432.3 million and $179.4 million, respectively. Warehousing Transactions The Company entered into two warehousing transactions whereby the Company agreed, subject to certain conditions, to purchase certain assets from parties unaffiliated with the Adviser. Such warehousing transactions were designed to assist the Company in deploying capital upon receipt of drawdown proceeds. One of these warehousing transactions related primarily to originated or anchor investments in middle market loans (the “ Middle Market Warehouse ”). The other warehouse related primarily to broadly syndicated loans (the “ Syndicated Warehouse ” and, together with the Middle Market Warehouse, the “ Warehousing Transactions ”) prior to the acquisition of the equity interests of the Syndicated Warehouse by the Company and merger of the Syndicated Warehouse with the Company’s wholly-owned subsidiary, as described below. Both the Middle Market Warehouse and the Syndicated Warehouse have been terminated. 150 Table of Contents Middle Market Warehouse On September 10, 2018, the Company entered into a Warehousing Transaction for primarily middle market loans with a warehouse provider unaffiliated with the Adviser. The warehouse investments for the Middle Market Warehouse were ultimately selected by the warehouse provider, in its sole discretion, for an account which it solely controlled. Recommendations for such investments were made on a non-discretionary basis by an affiliate of the Adviser, but only if the Adviser determined the investment was desirable for the Company. The Company was a party to a forward purchase agreement pursuant to which the Company agreed to purchase certain assets held in the Middle Market Warehouse at a purchase price based on the cost of the asset to the warehouse provider plus amounts of unpaid interest, original issue discount and structuring fees accrued to the warehouse provider during the time the warehouse provider owned the asset. On July 12, 2019, the Company purchased all investments held by the Middle Market Warehouse for a total consideration of $86.9 million (including $0.2 million of accrued interest). The Middle Market Warehouse was terminated on September 10, 2019. Since the Company had a contractual obligation to acquire all qualifying assets in the Middle Market Warehouse through a forward purchase agreement, the mark-to-market gain/loss of all investments was recognized in the Company’s consolidated financial statements. The Company did not, however, have any direct interest in the underlying assets nor did it have the power to control the activities most significant to the economic performance of the Middle Market Warehouse, and therefore, such assets were not included in the Company’s consolidated financial statements. This gain/loss amount is calculated as the difference between (1) the current purchase price the Company would be obligated to pay to purchase each asset under the forward purchase agreement and (2) the current fair value as determined by the Company’s valuation policy. For the years ended December 31, 2019 and December 31, 2018, the Company had a net unrealized gain of $0.2 million and an unrealized loss of $0.2 million, respectively, relating to this forward purchase obligation. Syndicated Warehouse On August 21, 2018, the Company entered into a Warehousing Transaction with a third party whereby the Company (or the Company’s designees) agreed, subject to certain contingencies, to purchase the equity interests of a warehouse vehicle from such third party at a price equal to the initial capital contribution made by the third party equity holder plus accrued but unpaid interest on the underlying assets in the warehouse vehicle remaining after the payment of all other obligations outstanding under the credit agreement of the Syndicated Warehouse vehicle other than principal on the loan made under such credit agreement. The warehouse investments for the Syndicated Warehouse vehicle were selected by an affiliate of the Adviser as the collateral manager of the Syndicated Warehouse. Neither the Adviser nor any of its affiliates received any additional compensation from the Company in connection with serving as collateral manager of the warehouse vehicle. The Company exercised its rights to acquire the equity interests of the Syndicated Warehouse on December 11, 2018, at which time the assets and liabilities of the warehouse started to be included in the Company’s consolidated financial statements for a total purchase price of $24.9 million. For the year ended December 31, 2018, the Company recorded a loss $0.6 million, which represented the excess of total consideration paid for the equity interests over the fair value of the net assets of the Syndicated Warehouse we assumed on the date of acquisition. The following table summarizes the assets and liabilities of the Syndicated Warehouse as of the acquisition date: 151 Table of Contents December 11, 2018 ASSETS Investments at fair value $ 120,988 Cash and cash equivalents 919 Interest receivable 604 Receivable for investments sold 29,740 Total assets $ 152,251 LIABILITIES Debt $ 65,000 Payable for investments purchased 62,758 Interest payable 140 Total liabilities 127,898 NET ASSETS Total net assets 24,353 Total liabilities and net assets $ 152,251 On December 28, 2018, the Company caused a certificate of merger to be filed with the Delaware Secretary of State to merge the Syndicated Warehouse, a Cayman Islands exempted company, into Breckenridge Funding, a Delaware limited liability company at which time all the assets and liabilities of the Syndicated Warehouse became owned by Breckenridge Funding. Breckenridge is, and at the time of the merger the Syndicated Warehouse was, a wholly-owned bankruptcy remote subsidiary of the Company. The Syndicated Warehouse and Breckenridge were established in connection with non-recourse credit facilities provided by BNP Paribas as lender on August 21, 2018 and December 21, 2018, respectively. In connection with the merger, the Company caused the credit facility at the Syndicated Warehouse to be paid off and terminated. Other Commitments and Contingencies From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. At December 31, 2020 and December 31, 2019, management is not aware of any pending or threatened litigation. Note 8. Net Assets Subscriptions and Drawdowns In connection with its formation, the Company has the authority to issue an unlimited number of shares at $0.001 per share par value. During the years ended December 31, 2020, 2019 and 2018, the Company entered into additional subscription agreements (the “ Subscription Agreements ”) with investors providing for the private placement of the Company’s shares. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase the Company’s shares up to the amount of their respective Capital Commitment on an as-needed basis each time the Company delivers a drawdown notice to its investors. As of December 31, 2020, the Company had received Capital Commitments totaling $3,926.3 million ($713.3 million remaining undrawn), of which $80.0 million ($8.0 million remaining undrawn) were from affiliates of the Adviser. As of December 31, 2019, the Company had received Capital Commitments totaling $3,230.6 million ($1,597.6 million remaining undrawn), of which $74.5 million ($36.7 million remaining undrawn) were from affiliates of the Adviser. The following table summarizes the total shares issued and proceeds received related to the Company’s capital drawdowns delivered pursuant to the Subscription Agreements for the year ended December 31, 2020 (dollars in millions except share amounts): 152 Table of Contents Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Price January 30, 2020 16,864,983 $ 440.9 April 8, 2020 14,864,518 324.0 July 15, 2020 5,304,125 125.6 July 28, 2020 123,229 2.9 November 6, 2020 4,627,528 115.4 December 15, 2020 (1) 22,802,680 571.2 Total 64,587,063 $ 1,580.0 (1) On December 1, 2020, the Company issued a capital call and delivered capital drawdown notices totaling $571.2 million, of which $3.4 million was received subsequent to December 31, 2020 and recorded as a subscription receivable on the Consolidated Statements of Assets and Liabilities. The following table summarizes the total shares issued and proceeds received related to the Company’s capital drawdowns delivered pursuant to the Subscription Agreements for the year ended December 31, 2019 (dollars in millions except share amounts): Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Price January 24, 2019 5,666,095 $ 142.1 March 28, 2019 9,818,817 247.5 June 27, 2019 12,453,261 319.7 August 9, 2019 1,401,367 36.1 September 25, 2019 14,686,050 377.3 December 16, 2019 (1) 10,474,169 271.1 Total 54,499,759 $ 1,393.8 (1) On December 2, 2019, the Company issued a capital call and delivered capital drawdown notices totaling $271.1 million, of which $5.9 million was received subsequent to December 31, 2019 and recorded as a subscription receivable on the Consolidated Statements of Assets and Liabilities. The following table summarizes the total shares issued and proceeds received related to the Company’s initial capitalization and capital drawdowns delivered pursuant to the Subscription Agreements for the year ended December 31, 2018 (dollars in millions except share amounts): Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Price September 14, 2018 60 $ — November 20, 2018 5,671,181 $ 141.8 December 13, 2018 3,950,078 $ 97.5 Total 9,621,319 $ 239.3 Distributions The following table summarizes the Company’s distributions declared and payable for the year ended December 31, 2020 (dollars in thousands except per share amounts): 153 Table of Contents Date Declared Record Date Payment Date Per Share Amount Total Amount January 29, 2020 January 29, 2020 May 15, 2020 $ 0.1593 $ 10,241 February 26, 2020 March 31, 2020 May 15, 2020 0.3407 27,688 April 7, 2020 April 7, 2020 August 14, 2020 0.0385 3,129 June 29, 2020 June 30, 2020 August 14, 2020 0.4615 44,454 July 14, 2020 July 14, 2020 November 13, 2020 0.0761 7,330 July 27, 2020 July 27, 2020 November 13, 2020 0.0707 7,185 August 26, 2020 September 30, 2020 November 13, 2020 0.3532 36,021 November 5, 2020 November 5, 2020 January 29, 2021 0.1957 19,958 December 14, 2020 December 14, 2020 January 29, 2021 0.2120 22,654 December 14, 2020 December 14, 2020 January 29, 2021 0.3000 32,057 (1) December 14, 2020 December 31, 2020 January 29, 2021 0.0923 11,968 Total distributions $ 2.3000 $ 222,685 (1) Represents a special distribution. The following table summarizes the Company’s distributions declared and payable for the year ended December 31, 2019 (dollars in thousands except per share amounts): Date Declared Record Date Payment Date Per Share Amount Total Amount January 22, 2019 January 23, 2019 May 15, 2019 $ 0.1239 $ 1,192 February 28, 2019 March 27, 2019 May 15, 2019 0.3536 5,406 March 26, 2019 March 31, 2019 May 15, 2019 0.0225 565 June 26, 2019 June 26, 2019 August 14, 2019 0.4780 12,010 June 26, 2019 June 30, 2019 August 14, 2019 0.0220 827 August 8, 2019 August 8, 2019 November 14, 2019 0.2120 7,967 September 24, 2019 September 24, 2019 November 14, 2019 0.2554 9,973 September 24, 2019 September 30, 2019 November 14, 2019 0.0326 1,752 December 13, 2019 December 15, 2019 January 30, 2020 0.4130 22,226 December 16, 2019 December 31, 2019 January 30, 2020 0.0870 5,593 Total distributions $ 2.0000 $ 67,511 For the year ended December 31, 2018, no distributions were declared or paid by the Company. Dividend Reinvestment The Company has adopted a dividend reinvestment plan (" DRIP "), pursuant to which it reinvests all cash dividends declared by the Board on behalf of its shareholders who do not elect to receive their dividends in cash. As a result, if the Board and the Company declares, a cash dividend or other distribution, then the Company’s shareholders who have not opted out of its dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares as described below, rather than receiving the cash dividend or other distribution. Distributions on fractional shares will be credited to each participating shareholder’s account to three decimal places. A participating shareholder will receive an amount of shares equal to the amount of the distribution on that participant’s shares divided by the most recent quarter-end NAV per share that is available on the date such distribution was paid (unless the Board determines to use the NAV per share as of another time). Shareholders who receive distributions in the form of shares will generally be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions; however, since their cash distributions will be reinvested, those shareholders will not receive cash with which to pay any applicable taxes. The Company intends to use newly issued shares to implement the plan. Shares issued under the dividend reinvestment plan will not reduce outstanding Capital Commitments. 154 Table of Contents The following table summarizes the amounts received and shares issued to shareholders who have not opted out of the Company’s DRIP during the year ended December 31, 2020 (dollars in thousands except share amounts): Payment Date DRIP Shares Value DRIP Shares Issued January 30, 2020 $ 2,882 112,302 May 15, 2020 4,244 194,694 August 14, 2020 5,437 229,591 November 13, 2020 6,182 248,194 Total distributions $ 18,745 784,781 The following table summarizes the amounts received and shares issued to shareholders who have not opted out of the DRIP during the year ended December 31, 2019 (dollars in thousands except share amounts): Payment Date DRIP Shares Value DRIP Shares Issued May 15, 2019 $ 519 20,605 August 14, 2019 1,748 68,165 November 14, 2019 2,051 79,894 Total distributions $ 4,318 168,664 For the year ended December 31, 2018, no distributions were declared or paid by the Company. Note 9. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: For The Year Ended December 31, 2020 2019 2018 Net increase (decrease) in net assets resulting from operations $ 218,638 $ 106,206 $ (2,944) Weighted average shares outstanding (basic and diluted) 95,333,867 33,858,642 7,458,181 Earnings (loss) per common share (basic and diluted) $ 2.29 $ 3.14 $ (0.39) Note 10. Income Taxes Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments, as gains and losses are generally not included in taxable income until they are realized; (2) income or loss recognition on exited investments; (3) non-deductible U.S federal excise taxes; and (4) other non-deductible expenses. The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and non-deductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, undistributed net investment income or undistributed net realized gains on investments, as appropriate. For the years ended December 31, 2020, 2019 and 2018, permanent differences were as follows: For The Year Ended December 31, 2020 2019 2018 Undistributed net investment income (loss) $ (24,912) $ (732) $ 43 Accumulated net realized gain (loss) 26,938 2,067 9 Paid In Capital $ (2,026) $ (1,335) $ (52) 155 Table of Contents During the years ended December 31, 2020, 2019 and 2018, permanent differences were principally related to $0.5 million, $0.5 million and $0.1 million , respectively, of U.S. federal excise taxes and $1.5 million, $0.5 million and $0.0 million, respectively, of non-deductible offering costs. For tax purposes, the Company may elect to defer any portion of a post-October capital loss or late-year ordinary loss to the first day of the following fiscal year. As of December 31, 2020, the post-October capital losses elected by the Company to defer, and as such deemed to arise on January 1, 2021, are as follows: For The Year Ended December 31, 2020 2019 2018 Post-October Capital Loss Deferral - Short Term $ — $ — $ — Post-October Capital Loss Deferral - Long Term 4,293 — — Net Post-October Capital Loss Deferrals $ 4,293 $ — $ — The following reconciles the increase in net assets resulting from operations to taxable income for the years ended December 31, 2020, 2019 and 2018: For The Year Ended December 31, 2020 2019 2018 Net increase (decrease) in net assets resulting from operations $ 218,638 $ 106,206 $ (2,944) Net unrealized (appreciation) depreciation 16,582 (28,329) 3,650 Realized losses for tax not included in book income (41) (511) 581 Nondeductible capital gains incentive fee (3,141) 4,218 — Other nondeductible expenses and excise taxes 2,026 1,335 52 Net post-October capital loss deferral 4,293 — — Taxable/distributable income $ 238,357 $ 82,919 $ 1,339 (1) Tax information for the fiscal year ended December 31, 2020 is estimated and is not considered final until the Company files its tax return. The components of accumulated gains / losses as calculated on a tax basis for the years ended December 31, 2020, 2019 and 2018 are as follows: For The Year Ended December 31, 2020 2019 2018 Distributable ordinary income $ 32,419 $ 16,748 $ 1,339 Other temporary book/tax differences (5,369) (4,212) — Net unrealized appreciation/(depreciation) on investments 10,431 24,603 (4,231) Total accumulated under-distributed (over-distributed) earnings $ 37,481 $ 37,139 $ (2,892) The cost and unrealized gain (loss) of the Company’s investments, as calculated on a tax basis, at December 31, 2020, December 31, 2019 and December 31, 2018 were as follows: For The Year Ended December 31, 2020 2019 2018 Gross unrealized appreciation $ 58,871 $ 35,465 $ 953 Gross unrealized depreciation (48,439) (10,862) (4,962) Net unrealized appreciation (depreciation) $ 10,432 $ 24,603 $ (4,009) Tax cost of investments $ 5,575,511 $ 3,067,837 $ 549,334 156 Table of Contents All of the dividends declared during the year ended December 31, 2020 and 2019 were derived from ordinary income, as determined on a tax basis. BGSL Investments, a wholly owned subsidiary that was formed in 2019, is a Delaware LLC which has elected to be treated as a corporation for U.S. tax purposes. As such, BGSL Investments is subject to U.S. Federal, state and local taxes. For the Company's tax year ended December 31, 2020, BGSL Investments activity did not result in a material provision for income taxes. Management has analyzed the Company’s tax positions taken, or to be taken, on federal income tax returns for all open tax years, and has concluded that no provision for income tax is required in the Company’s financial statements. The Company’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed. Note 11. Financial Highlights The following are the financial highlights for the years ended December 31, 2020, 2019 and 2018: For The Year Ended December 31, 2020 2019 2018 Per Share Data: Net asset value, beginning of period $ 26.02 $ 24.57 $ 25.00 Net investment income (1) 2.51 2.18 0.17 Net unrealized and realized gain (loss) (2) (1.03) 1.27 (0.60) Net increase (decrease) in net assets resulting from operations 1.48 3.45 (0.43) Distributions declared (3) (2.30) (2.00) — Total increase (decrease) in net assets (0.82) 1.45 (0.43) Net asset value, end of period $ 25.20 $ 26.02 $ 24.57 Shares outstanding, end of period 129,661,586 64,289,742 9,621,319 Total return based on NAV (4) 6.46 % 14.43 % (1.72) % Ratios: Ratio of net expenses to average net assets (5) 6.50 % 8.50 % 8.89 % Ratio of net investment income to average net assets (5) 10.37 % 8.46 % 6.07 % Portfolio turnover rate 46.80 % 31.49 % — % Supplemental Data: Net assets, end of period 3,267,809 1,673,117 236,365 Total capital commitments, end of period 3,926,295 3,230,641 952,234 Ratios of total contributed capital to total committed capital, end of period 81.83 % 50.55 % 25.13 % Asset coverage ratio 230.0% 215.1 % 227.8 % (1) The per share data was derived by using the weighted average shares outstanding during the period. (2) For the years ended December 31, 2020, 2019 and 2018, the amount shown does not correspond with the aggregate amount for the period as it includes a $(0.81), $0.31 and $(0.03) impact, respectively, from the effect of the timing of capital transactions. (3) The per share data for distributions was derived by using the actual shares outstanding at the date of the relevant transactions (refer to Note 8). (4) Total return is calculated as the change in NAV per share during the period, plus distributions per share (assuming dividends and distributions are reinvested in accordance with the Company's dividend reinvestment plan) divided by the beginning NAV per share. Total return does not include sales load. (5) For the year ended December 31, 2018, amounts are annualized except for organizational costs and expense support amounts relating to organizational costs. For the years ended December 31, 2020, 2019 and 2018, the ratio of total operating expenses to average net assets was 6.43%, 8.47% and 14.09%, respectively, on an annualized basis, excluding the effect of expense support/(recoupment) by the Adviser which represented (0.07%), (0.03)% and 5.20%, respectively, of average net assets. Note 12. Subsequent Events The Company’s management evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in, the consolidated financial statements as of December 31, 2020, except as discussed below. 157 Table of Contents On February 24, 2021, the Board declared a distribution of $0.50 per share, which is payable on May 14, 2021 to shareholders of record as of March 31, 2021. 158 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. There are not and have not been any disagreements between the Company and its accountant on any matter of accounting principles, practices, or financial statement disclosure.