Blackstone Secured Lending Fund 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The information contained in this section should be read in conjunction with “Item 1. Financial Statements.” This discussion contains forward-looking statements, which relate to future events our future performance or financial condition and involves numerous risks and uncertainties, including, but not limited to, those set forth in “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2020 and Part II, Item 1A of and elsewhere in this Form 10-Q. Overview and Investment Framework We are a Delaware statutory trust structured as a non-diversified, closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes, we elected to be treated as a RIC under the Code. We are managed by our Adviser. The Administrator will provide the administrative services necessary for us to operate. Our investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. Under normal market conditions, we generally invest at least 80% of our total assets (net assets plus borrowings for investment purposes) in secured debt investments (including investments that are secured by equity interests) and our portfolio is composed primarily of first lien senior secured and unitranche loans. To a lesser extent, we have and may continue to also invest in second lien, third lien, unsecured or subordinated loans and other debt and equity securities. We do not currently focus on investments in issuers that are distressed or in need of rescue financing. We commenced our loan origination and investment activities contemporaneously with the Initial Drawdown on November 20, 2018. The proceeds from the Initial Drawdown and availability under our credit facilities provided us with the necessary seed capital to commence operations. See “—Financial Condition, Liquidity and Capital Resources—Borrowings .” On October 28, 2021, the Company closed its initial public offering (“ IPO ”), issuing 9,180,000 of its common shares of beneficial interest at a public offering price of $26.15 per share. Net of underwriting fees, the Company received total cash proceeds, before offering expenses, of $230.6 million. The Company has granted the underwriters an option to purchase up to an additional 1,377,000 shares of common shares from, at the public offering price, less the sales load payable by the Company, on or before November 27, 2021. The Company’s common shares began trading on the New York Stock Exchange (“ NYSE ”) under the symbol “BXSL” on October 28, 2021. Key Components of Our Results of Operations Investments We focus primarily on loans and securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies. In many market environments, we believe such a focus offers an opportunity for superior risk-adjusted returns. Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity for such companies, the general economic environment, trading prices of loans and other securities and the competitive environment for the types of investments we make. Revenues We generate revenues in the form of interest income from the debt securities we hold and dividends. Our debt investments typically have a term of five to eight years and bear interest at floating rates on the basis of a benchmark such as LIBOR. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we may receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. In some cases, our investments may provide for deferred interest payments or PIK interest. The principal amount of loans and any accrued but unpaid interest generally become due at the maturity date. 54 Table of Contents In addition, we generate revenue from various fees in the ordinary course of business such as in the form of structuring, consent, waiver, amendment, syndication and other miscellaneous fees as well as fees for managerial assistance rendered by us. Expenses Except as specifically provided below, all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser. We bear all other costs and expenses of our operations, administration and transactions, including, but not limited to (a) investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Investment Advisory Agreement; (b) our allocable portion of compensation, 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) our chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other non-investment professionals at the Administrator that perform duties for us; and (iii) any internal audit group personnel of Blackstone or any of its affiliates; and (c) all other expenses of our operations, administrations and transactions. From time to time, the Adviser, the Administrator or their affiliates may pay third-party providers of goods or services. We will reimburse the Adviser, Administrator or such affiliates thereof for any such amounts paid on our behalf. From time to time, the Adviser or the Administrator may defer or waive fees and/or rights to be reimbursed for expenses. In this regard, the Administrator has waived the right to be reimbursed for rent and related occupancy costs. However, the Administrator may seek reimbursement for such costs in future periods. All of the foregoing expenses will ultimately be borne by our shareholders. Costs and expenses of the Administrator and the Adviser that are eligible for reimbursement by us will be reasonably allocated on the basis of time spent, assets under management, usage rates, proportionate holdings, a combination thereof or other reasonable methods determined by the Administrator in accordance with policies adopted by the Board. On December 12, 2018, we entered into an Expense Support Agreement with the Adviser. The Expense Support Agreement provides that, at such times as the Adviser determines, the Adviser may pay certain Expense Payments on behalf of us, provided that no portion of the payment will be used to pay any of our interest expense. Such Expense Payment must be made in any combination of cash or other immediately available funds no later than forty-five days after a written commitment from the Adviser to pay such expense, and/or by an offset against amounts due from us to the Adviser or its affiliates. Following any calendar quarter in which Available Operating Funds (as defined in the Expense Support Agreement) exceed Excess Operating Funds, we shall pay Reimbursement Payments to the Adviser until such time as all Expense Payments made by the Adviser to us within three years prior to the last business day of such calendar quarter have been reimbursed. The amount of the Reimbursement Payment for any calendar quarter shall equal the lesser of (i) the Excess Operating Funds in such quarter and (ii) the aggregate amount of all Expense Payments made by the Adviser to us within three years prior to the last business day of such calendar quarter that have not been previously reimbursed by us to the Adviser. The Expense Support Agreement provides additional restrictions on the amount of each Reimbursement Payment for any calendar quarter. The Adviser may waive its right to receive all or a portion of any Reimbursement Payment in any particular calendar quarter, so that such Reimbursement Payment may be reimbursable in a future calendar quarter. As of September 30, 2021 there were no unreimbursed Expense Payments remaining. Portfolio and Investment Activity For the three months ended September 30, 2021, we acquired $2,440.2 million aggregate principal amount of investments (including $569.2 million of unfunded commitments), $2,406.3 million of which was first lien debt, $4.6 million of which was second lien debt, $12.5 million of which was unsecured debt and $16.8 million of which was equity. For the three months ended September 30, 2020, we acquired $1,095.8 million aggregate principal amount of investments (including $89.4 million of unfunded commitments), $1,011.9 million of which was first lien debt, $11.4 million of which was second lien debt, and $72.5 million of which was unsecured debt. 55 Table of Contents Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated) (dollar amounts in thousands): As of and for the three months ended September 30, 2021 2020 Investments: Total investments, beginning of period $ 7,270,312 $ 4,189,892 New investments purchased 1,846,526 989,930 Net accretion of discount on investments 17,146 6,460 Net realized gain (loss) on investments (1,808) 104 Investments sold or repaid (1,006,855) (272,504) Total investments, end of period $ 8,125,321 $ 4,913,882 Amount of investments funded at principal: First lien debt investments $ 1,837,094 $ 944,372 Second lien debt investments 4,606 11,392 Unsecured debt 12,537 72,489 Equity investments 16,760 — Total $ 1,870,997 $ 1,028,253 Proceeds from investments sold or repaid: First lien debt investments $ (972,550) $ (197,184) Second lien debt investments (15,026) — Unsecured debt (19,279) (75,320) Equity investments — — Total $ (1,006,855) $ (272,504) Number of portfolio companies 117 78 Weighted average yield on debt and income producing investments, at cost (1)(2) 7.34 % 7.81 % Weighted average yield on debt and income producing investments, at fair value (1)(2) 7.28 % 7.87 % Average loan to value (LTV) (3) 45.2 % 48.7 % Percentage of debt investments bearing a floating rate 99.9 % 99.5 % Percentage of debt investments bearing a fixed rate 0.1 % 0.5 % (1) Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts or less the annual amortization of premiums, as applicable, on accruing debt included in such securities, divided by (b) total debt investments (at fair value or cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above. (2) As of September 30, 2021 and 2020, the weighted average total portfolio yield at cost was 7.27% and 7.78%, respectively. The weighted average total portfolio yield at fair value was 7.18% and 7.84%, respectively. (3) Includes all private debt investments for which fair value is determined by our Board in conjunction with a third-party valuation firm and excludes quoted assets. Average loan-to-value represents the net ratio of loan-to-value for each portfolio company, weighted based on the fair value of total applicable private debt investments. Loan-to-value is calculated as the current total net debt through each respective loan tranche divided by the estimated enterprise value of the portfolio company as of the most recent quarter end. Our investments consisted of the following (dollar amounts in thousands): September 30, 2021 December 31, 2020 Cost Fair Value % of Total Investments at Fair Value Cost Fair Value % of Total Investments at Fair Value First lien debt $ 7,993,866 $ 8,068,267 98.12 % $ 5,493,561 $ 5,502,899 98.51 % Second lien debt 43,559 44,240 0.54 48,979 50,199 0.90 Unsecured debt 3,723 3,492 0.04 — — — Equity investments 84,173 107,048 1.30 32,942 32,844 0.59 Total $ 8,125,321 $ 8,223,047 100.00 % $ 5,575,482 $ 5,585,942 100.00 % 56 Table of Contents As of September 30, 2021 and December 31, 2020, no loans in the portfolio were on non-accrual status. As of September 30, 2021 and December 31, 2020, on a fair value basis, approximately 99.9% and 100.0%, respectively, of our performing debt investments bore interest at a floating rate and approximately 0.1% and 0.0%, respectively, of our performing debt investments bore interest at a fixed rate. Results of Operations The following table represents the operating results (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Total investment income $ 166,875 $ 91,599 $ 432,682 $ 252,953 Net expenses 70,848 36,257 189,610 98,410 Net investment income before excise tax 96,027 55,342 243,072 154,543 Excise tax expense 2,220 — 1,938 104 Net investment income after excise tax 93,807 55,342 241,134 154,439 Net unrealized appreciation (depreciation) 18,033 120,891 92,028 (59,062) Net realized gain (loss) (1,833) 99 5,308 2,472 Net increase (decrease) in net assets resulting from operations $ 110,007 $ 176,332 $ 338,470 $ 97,849 Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. As a result, comparisons may not be meaningful. Investment Income Investment income was as follows (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest income $ 165,417 $ 90,303 $ 424,141 $ 246,388 Payment-in-kind interest income 1,000 1,282 3,279 6,525 Fee income 458 14 5,262 40 Total investment income $ 166,875 $ 91,599 $ 432,682 $ 252,953 Total investment income increased to $166.9 million for the three months ended September 30, 2021 from $91.6 million for the same period in the prior year primarily driven by our deployment of capital and the increased balance of our investments partially offset by a lower weighted average yield on our debt investments, at fair value, which decreased to 7.28% as of September 30, 2021 from 7.87% as of September 30, 2020. The size of our investment portfolio at fair value increased to $8,223.0 million at September 30, 2021 from $4,880.7 million at September 30, 2020. Additionally, for the three months ended September 30, 2021, we accrued $16.4 million and $0.5 million of non-recurring income (e.g. prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts) and other fee income, respectively, as compared to $7.5 million and $0.0 million for the same period in the prior year. Total investment income increased to $432.7 million for the nine months ended September 30, 2021 from $253.0 million for the same period in the prior year primarily driven by our deployment of capital and the increased balance of our investments partially offset by a lower weighted average yield on our debt investments, at fair value, which decreased to 7.28% as of September 30, 2021 from 7.87% as of September 30, 2020. The size of our investment portfolio at fair value increased to $8,223.0 million at September 30, 2021 from $4,880.7 million at September 30, 2020. Additionally, for the nine months ended September 30, 2021, we accrued $41.0 million and $5.3 million of non-recurring income (e.g. prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts) and other fee income, respectively, as compared to $12.6 million and $0.0 million, respectively, for the same periods in the prior year. 57 Table of Contents As the impact of COVID-19 persists, it could cause operational and/or liquidity issues at our portfolio companies which could restrict their ability to make cash interest payments. Additionally, we may experience full or partial losses on our investments which may ultimately reduce our investment income in future periods. Expenses Expenses were as follows (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Interest expense $ 32,740 $ 14,766 $ 81,053 $ 45,278 Management fees 15,445 8,606 40,394 22,597 Income based incentive fee 16,983 9,837 45,130 26,721 Capital gains incentive fee 2,430 — 14,600 (4,218) Professional fees 939 462 2,179 1,322 Board of Trustees' fees 141 108 416 334 Administrative service expenses 500 547 1,623 1,638 Other general and administrative 1,670 1,104 4,215 2,572 Amortization of offering costs — 427 — 966 Excise tax expense 2,220 — 1,938 104 Total expenses (including excise tax expense) 73,068 35,857 191,548 97,314 Recoupment of expense support — 400 — 1,200 Net expenses (including excise tax expense) $ 73,068 $ 36,257 $ 191,548 $ 98,514 Interest Expense Total interest expense (including unused fees and other debt financing expenses), increased to $32.7 million for the three months ended September 30, 2021 from $14.8 million for the same period in the prior year primarily driven by increased borrowings under our credit facilities and our unsecured bond issuances resulting from increased deployment of capital for investments. The average principal debt outstanding increased to $4,487.3 million for the three months ended September 30, 2021 from $1,865.2 million for the same period in the prior year , partially offset by a decrease i n our weighted average interest rate to 2.83% for the three months ended September 30, 2021 from 2.96% for the same period in the prior year. Total interest expense (including unused fees and other debt financing expenses), increased to $81.1 million for the nine months ended September 30, 2021 from $45.3 million for the same period in the prior year primarily driven by increased borrowings under our credit facilities and our unsecured bond issuances resulting from increased deployment of capital for investments. The average principal debt outstanding increased to $3,546.3 million for the nine months ended September 30, 2021 from $1,711.7 million for the same period in the prior year, partially offset by a decrease in our weighted average interest rate to 2.92% for the nine months ended September 30, 2021 from 3.36% for the same period in the prior year. Management Fees Management fees increased to $15.4 million for the three months ended September 30, 2021 from $8.6 million for the same period in the prior year primarily due to an increase in gross assets. Management fees increased to $40.4 million for the nine months ended September 30, 2021 from $22.6 million for the same period in the prior year primarily due to an increase in gross assets. Our total gross assets increased to $8,821.7 million at September 30, 2021 from $5,011.2 million at September 30, 2020. Income Based Incentive Fees Income based incentive fees increased to $17.0 million for the three months ended September 30, 2021 from $9.8 million for the sa me period in the prior year primarily due to our deployment of capital. Pre-incentive fee net investment income increased to $113.2 million for the three months ended September 30, 2021 from $65.6 million for the same period in the prior year. 58 Table of Contents Income based incentive fees increased to $45.1 million for the nine months ended September 30, 2021 from $26.7 million for the same period in the prior year primarily due to our deployment of capital. Pre-incentive fee net investment income increased to $300.9 million for the nine months ended September 30, 2021 from $178.1 million for the same period in the prior year. Capital Gains Incentive Fees We accrued capital gains incentive fees of $2.4 million for the three months ended September 30, 2021 compared to $0.0 million for the same period in the prior year, primarily due to net realized and unrealized gains in the current period. We accrued capital gains incentive fees of $14.6 million for the nine months ended September 30, 2021 compared to $(4.2) million for the same period in the prior year, primarily due to net realized and unrealized gains in the current year contrasted by a reversal of previously accrued incentive fees due to net realized and unrealized losses during the nine months ended September 30, 2020. The accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less in the prior period. If such cumulative amount is negative, then there is no accrual. Other Expenses Organization costs and offering costs include expenses incurred in our initial formation and our Private Offering. Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of us. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers, their respective staff and other non-investment professionals that perform duties for us. Other general and administrative expenses include insurance, filing, research, our sub-administrator, subscriptions and other costs. Total other expenses increased to $3.3 million for the three months ended September 30, 2021 from $2.6 million for the same period in the prior year primarily driven by larger other general and administrative costs, including expenses associated with our Sub-Administrator. Total other expenses increased to $8.4 million for the nine months ended September 30, 2021 from $6.8 million for the same period in the prior year primarily driven by larger other general and administrative costs and professional fees, including expenses associated with our Sub-Administrator. The Adviser may elect to make Expense Payments on our behalf, subject to future Reimbursement Payments pursuant to the Expense Support Agreement described above in “ —Key Components of Our Results of Operations—Expenses .” Income Taxes, Including Excise Taxes We elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our shareholders in each taxable year generally at least 90% of the sum of our investment company taxable income, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our shareholders, which generally relieve us from corporate-level U.S. federal income taxes. Depending on the level of taxable income earned in a tax year, we may carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, we will accrue excise tax on estimated excess taxable income. For the three and nine months ended September 30, 2021, we incurred $2.2 million and $1.9 million, respectively, of U.S. federal excise tax. For the three and nine months ended September 30, 2020, we incurred $0.0 million and $0.1 million, respectively, of U.S. federal excise tax. 59 Table of Contents Net Unrealized Gain (Loss) Net unrealized gain (loss) was comprised of the following (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net unrealized gain (loss) on investments $ 18,028 $ 120,893 $ 92,625 $ (59,061) Net unrealized gain (loss) on translation of assets and liabilities in foreign currencies 5 (2) (597) (1) Net unrealized gain (loss) $ 18,033 $ 120,891 $ 92,028 $ (59,062) For the three months ended September 30, 2021, the net unrealized gain was primarily driven by an increase in the fair value of our debt investments during the period. The fair value of our debt investments as a percentage of principal increased by 0.3% as compared to the prior quarter. The unrealized gains for the three months ended September 30, 2020 were mainly driven by a recovery from the COVID-19 pandemic as credit spreads tightened and the private and syndicated leverage loan markets significantly rebounded from the March 2020 lows. For the nine months ended September 30, 2021, the net unrealized gain was primarily driven by an increase in the fair value of our debt investments during the period. The fair value of our debt investments as a percentage of principal increased by 1.3% as compared to a 1.7% decrease for the same period in the prior year. The unrealized losses during the nine months ended September 30, 2020 were driven by market volatility resulting from the onset of the COVID-19 pandemic. Net Realized Gain (Loss) The realized gains and losses on fully exited and partially exited investments comprised of the following (dollar amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net realized gain (loss) on investments $ (1,808) $ 104 $ 6,509 $ 2,453 Net realized gain (loss) on foreign currency transactions (25) (5) (1,201) 19 Net realized gain (loss) $ (1,833) $ 99 $ 5,308 $ 2,472 For the three and nine months ended September 30, 2021, we generated realized gains of $7.0 million and $15.5 million, respectively, partially offset by realized losses of $8.8 million and $9.0 million, respectively, primarily from full or partial sales of our debt investments. For the three and nine months ended September 30, 2020, we generated realized gains of $6.0 million and $10.5 million, respectively, partially offset by realized losses of $5.9 million and $8.0 million, respectively (inclusive of a $4.4 million loss relating to a restructuring of one of our portfolio companies), primarily from full or partial sales of quoted loans. As the impact of COVID-19 persists, it may cause us to experience full or partial losses on our investments upon the exit or restructuring of our investments. Financial Condition, Liquidity and Capital Resources We generate cash from the net proceeds from the issuance of our equity securities (including the drawdown of Capital Commitments prior to our IPO), issuances of unsecured debt, proceeds from net borrowings on our credit facilities and income earned on our debt investments. The primary uses of our cash and cash equivalents are for (i) originating loans and purchasing senior secured debt investments, (ii) funding the costs of our operations (including fees paid to our Adviser and expense reimbursements paid to our Administrator), (iii) debt service, repayment and other financing costs of our borrowings and (iv) cash distributions to the holders of our shares. As of September 30, 2021 and December 31, 2020, we had four and four credit facilities outstanding and we had four and two issuances of unsecured bonds outstanding, respectively. We may from time to time enter into additional credit facilities, increase the size of our existing credit facilities or issue further debt securities. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities 60 Table of Contents or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. As of September 30, 2021 and December 31, 2020, we had an aggregate amount of $4,504.5 million and $2,514.6 million of senior securities outstanding and our asset coverage ratio was 192.0% and 230.0%, respectively. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation to cover any outstanding unfunded commitments we are required to fund. Cash and cash equivalents as of September 30, 2021, taken together with our $1,745.5 million of available capacity under our credit facilities (subject to borrowing base availability) is expected to be sufficient for our investing activities and to conduct our operations in the near term. Additionally, we held $324.4 million of Level 2 debt investments as of September 30, 2021, which could provide additional liquidity if necessary. Although we were able to issue unsecured debt during the period ended September 30, 2021, disruption in the financial markets caused by the COVID-19 outbreak or any other negative economic development could restrict our access to financing in the future. We may not be able to find new financing for future investments or liquidity needs and, even if we are able to obtain such financing, such financing may not be on as favorable terms as we have recently obtained. These factors may limit our ability to make new investments and adversely impact our results of operations. As of September 30, 2021, we had $259.6 million in cash and cash equivalents. During the nine months ended September 30, 2021, cash used in operating activities was $2,440.0 million, primarily as a result of funding portfolio investments of $4,438.5 million; partially offset by proceeds from sales/repayments of investments of $1,945.6 million. Cash provided by financing activities was $2,481.0 million during the period, which was primarily as a result of net borrowings on our credit facilities and our unsecured debt issuances of $1,959.4 million; our proceeds from issuance of common shares of $716.7 million; and partially offset by dividends paid in cash of $189.7 million. As of September 30, 2020, we had $77.3 million in cash and cash equivalents. During the nine months ended September 30, 2020, cash used in operating activities was $1,659.7 million, primarily as a result of funding portfolio investments of $2,499.8 million; partially offset by proceeds from sales/repayments of investments of $682.8 million and an increase in payables for investments purchased of $45.7 million. Cash provided by financing activities was $1,671.4 million during the period, which was primarily the result of proceeds from the issuance of shares of $899.4 million, net borrowings on our credit facilities of $880.1 million; partially offset by dividends paid in cash of $100.8 million. Equity The following table summarizes the total shares issued and proceeds received related to our capital drawdowns delivered pursuant to the Subscription Agreements for the nine months ended September 30, 2021 (dollars in millions except share amounts): Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Proceeds June 8, 2021 13,869,637 $ 357.0 September 8, 2021 13,723,035 356.3 Total 27,592,672 $ 713.3 The following table summarizes the total shares issued and proceeds received related to capital drawdowns delivered pursuant to the Subscription Agreements for the nine months ended September 30, 2020 (dollar amounts in millions, except share amounts): Common Share Issuance Date Number of Common Shares Issued Aggregate Offering Proceeds 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 Total 37,156,855 $ 893.4 61 Table of Contents Distributions and Dividend Reinvestment The following table summarizes our distributions declared and payable for the nine months ended September 30, 2021 (dollar amounts in thousands, except per share amounts): Date Declared Record Date Payment Date Per Share Amount Total Amount February 24, 2021 March 31, 2021 May 14, 2021 $ 0.5000 $ 65,052 June 7, 2021 June 7, 2021 August 13, 2021 0.3736 48,734 June 7, 2021 June 30, 2021 August 13, 2021 0.1264 18,241 September 7, 2021 September 7, 2021 November 12, 2021 0.3750 54,250 September 7, 2021 September 30, 2021 November 12, 2021 0.1250 19,800 Total distributions $ 1.5000 $ 206,077 The following table summarizes our distributions declared and payable for the nine months ended September 30, 2020 (dollar amounts in thousands, except per share amounts): 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 Total distributions $ 1.5000 $ 136,048 With respect to distributions, we have adopted an “opt out” dividend reinvestment plan for shareholders. As a result, in the event of a declared cash distribution or other distribution, each shareholder that has not “opted out” of the dividend reinvestment plan will have their dividends or distributions automatically reinvested in additional shares rather than receiving cash distributions. Shareholders who receive distributions in the form of shares will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions. The following table summarizes the amounts received and shares issued to shareholders who have not opted out of our dividend reinvestment plan during the nine months ended September 30, 2021 (dollars in thousands except share amounts): Payment Date DRIP Shares Value DRIP Shares Issued January 29, 2021 $ 11,179 443,639 May 14, 2021 8,674 339,398 August 13, 2021 9,142 352,656 Total distributions $ 28,995 1,135,693 The following table summarizes the amounts received and shares issued to shareholders who have not opted out of our dividend reinvestment plan during the nine months ended September 30, 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 Total distributions $ 12,563 536,587 62 Table of Contents Borrowings Our outstanding debt obligations were as follows (dollar amounts in thousands): September 30, 2021 Aggregate Principal Committed Outstanding Principal Carrying Value Unused Portion (1) Amount Available (2) Jackson Hole Funding Facility (3) $ 400,000 $ 361,584 $ 361,584 $ 38,416 $ 38,416 Breckenridge Funding Facility 825,000 295,780 295,780 529,220 529,220 Big Sky Funding Facility 500,000 320,506 320,506 179,494 179,494 Revolving Credit Facility (4) 1,325,000 326,648 326,648 998,352 998,352 2023 Notes (5) 400,000 400,000 396,160 — — 2026 Notes (5) 800,000 800,000 792,311 — — New 2026 Notes (5) 700,000 700,000 691,220 — — 2027 Notes (5) 650,000 650,000 635,630 — — 2028 Notes (5) 650,000 650,000 637,876 — — Total $ 6,250,000 $ 4,504,518 $ 4,457,715 $ 1,745,482 $ 1,745,482 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 (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 September 30, 2021 and December 31, 2020, the Company had borrowings denominated in Euros (EUR) of 23.4 million and 23.5 million, respectively. (4) Under the Revolving Credit Facility, the Company may borrow in U.S. dollars or certain other permitted currencies. As of September 30, 2021, the Company had borrowings denominated in Canadian Dollars (CAD), Euros (EUR) and British Pounds (GBP) of 239.2 million, 9.8 million and 38.5 million, respectively. 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, 2026 Notes, New 2026 Notes, 2027 Notes and 2028 Notes is presented net of unamortized debt issuance costs of $3.8 million, $7.7 million, $8.8 million, $14.4 million and $12.1 million, respectively, as of September 30, 2021. 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. For additional information on our debt obligations see “ Item 1. Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 6. Borrowings." 63 Table of Contents Off-Balance Sheet Arrangements Portfolio Company Commitments Our investment portfolio contains and is expected to continue to 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 September 30, 2021 and December 31, 2020, we had unfunded delayed draw term loans and revolvers with an aggregate principal amount of $1,243.2 million and $432.3 million, respectively. Additionally, from time to time, the Adviser and its affiliates may commit to an investment on behalf of the funds it manages. Certain terms of these investments are not finalized at the time of the commitment and each respective fund's allocation may change prior to the date of funding. In this regard, as of September 30, 2021 and December 31, 2020, we estimate that $1,247.1 million and $0.0 million, respectively, of investments that were committed but not yet funded. Other Commitments and Contingencies From time to time, we may become a party to certain legal proceedings incidental to the normal course of its business. At September 30, 2021, management is not aware of any pending or threatened litigation. Contractual Obligations Our contractual obligations consisted of the following as of September 30, 2021 (dollar amounts in thousands): Payments Due by Period Total Less than 1 year 1-3 years 3-5 years After 5 years Jackson Hole Funding Facility $ 361,584 $ — $ 361,584 $ — $ — Breckenridge Funding Facility 295,780 — 295,780 — — Big Sky Funding Facility 320,506 — — 320,506 — Revolving Credit Facility 326,648 — — 326,648 — 2023 Notes 400,000 — 400,000 — — 2026 Notes 800,000 — — 800,000 — New 2026 Notes 700,000 — — 700,000 — 2027 Notes 650,000 — — — 650,000 2028 Notes 650,000 — — — 650,000 Total Contractual Obligations $ 4,504,518 $ — $ 1,057,364 $ 2,147,154 $ 1,300,000 Related-Party Transactions We have entered into a number of business relationships with affiliated or related parties, including the following: • the Investment Advisory Agreement; • the Administration Agreement; and • Expense Support and Conditional Reimbursement Agreement. In addition to the aforementioned agreements, we, our Adviser and certain of our Adviser’s affiliates have been granted exemptive relief by the SEC to co-invest with other funds managed by our Adviser or its affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. See “ Item 1. Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 3. Agreements and Related Party Transactions. ” COVID-19 Update There is an ongoing global outbreak of COVID-19, which has spread to over 200 countries and territories, including the United States, and has spread to every state in the United States. The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19, including new variants, have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, 64 Table of Contents and limiting operations of non-essential businesses. Such actions have created disruption in global supply chains, and adversely impacted many industries. The COVID-19 pandemic (including the restrictive measures taken in response thereto) has to date (i) created temporary business disruption issues for certain of our portfolio companies, and (ii) materially and adversely impacted the value and performance of certain of our portfolio companies in previous periods. More recently, robust economic activity in the U.S. has supported a continued recovery, which nevertheless may remain uneven with dispersion across sectors and regions. Although vaccines have been widely distributed in the U.S., certain U.S. states are planning on reopening and we believe the economy is beginning to rebound in certain respects, the uncertainty surrounding the COVID-19 pandemic, including uncertainty regarding new variants of COVID-19 that have emerged in, at least, the United Kingdom, South Africa, India and Brazil, and other factors have and may continue to contribute to significant volatility in the global markets. COVID-19 and the current financial, economic and capital markets environment, and future developments in these and other areas present uncertainty and risk with respect to our performance, financial condition, results of operations and ability to pay distributions. Critical Accounting Policies The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021, and elsewhere in our filings with the SEC. There have been no significant changes in our critical accounting policies and practices.