20 SEPTEMBER 2024
FOR IMMEDIATE RELEASE
RELEASED BY BNP PARIBAS S.A.,
JERSEY BRANCH INTERIM RESULTS ANNOUNCEMENT
THE BOARD OF DIRECTORS OF
BLACKSTONE LOAN FINANCING LIMITED ANNOUNCE INTERIM RESULTS FOR THE
SIX MONTHS ENDED 30 JUNE 2024
Blackstone Loan Financing Limited
(the
"Company" or "BGLF")
Half
Yearly Financial Report for the six months ended 30 June
2024
Refer to the glossary below for
the definitions of all the terms, jargon, abbreviations and
acronyms used throughout this half-yearly financial
report.
STRATEGIC REPORT
Company Overview
The Company is a closed-ended
investment company incorporated on 30 April 2014 as a limited by
shares company under the Company (Jersey) Law 1991 with registered
number 115628. In addition, the Company constitutes and is
regulated as a collective investment fund under the Collective
Investment Funds (Jersey) Law 1988. The Company continues to be
registered and domiciled in Jersey. The Company's redeemable shares
are quoted on the Main Market of the LSE.
Following the decision made by
Shareholders on 15 September 2023 to implement a managed wind-down
of the Company, the new investment objective of the Company,
effective from that date, is to realise all existing assets in the
Company's portfolio in an orderly manner.
Refer to pages 24 to 25 of the 31
December 2023 Annual Report and Audited Financial Statements for
more details on the purpose, values, principal activities and the
investment policy of the Company.
Reconciliation of IFRS NAV to
Published NAV
At 30 June 2024, there was a
difference between the NAV per redeemable share as disclosed in the
Condensed Statement of Financial Position, €0.8078 per redeemable
share ("IFRS NAV") and the Published NAV, €0.9072 per redeemable
share, which was released to the LSE on 19 July 2024 ("Published
NAV"). The reconciliation is provided below and in Note 13 in the
'notes to the condensed interim financial statements'. The
difference between the two valuations is entirely due to the
different valuation bases used with the main driver being the
discount rate, as explained in detail below.
Valuation Policy for the
Published NAV
The Company publishes a NAV per
redeemable share on a monthly basis in accordance with its
Prospectus. The valuation process in respect of the Published NAV
incorporates the valuation of the Company's CSWs and underlying
PPNs (held by the Lux Subsidiary). These valuations are, in turn,
based on the valuation of the BCF portfolio using a CLO intrinsic
calculation methodology per the Company's Prospectus, which we
refer to as a "mark to model" approach. As
documented in the Prospectus, certain "Market Colour" (market
clearing levels, market fundamentals, BWIC, broker quotes or other
indications) is not incorporated into this methodology.
The mark to model valuation policy is deemed to
be an appropriate way of valuing the Company's holdings and of
tracking the long-term performance of the Company as the underlying
portfolio of CLOs held by BCF are comparable to held to maturity
instruments and the Company expects to receive the benefit of the
underlying cash flows over the CLOs' entire life cycles.
Valuation Policy for the IFRS
NAV
For financial reporting purposes
on an annual and semi-annual basis, to comply with IFRS as adopted
by the EU, the valuation of BCF's portfolio is at fair value using
models that incorporate Market Colour at the measurement date,
which we refer to as a "mark to market" approach. The Company also
assesses and publishes the mark to market IFRS NAV on a quarterly
basis. IFRS fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction
between market participants as at the measurement date and is an
"exit price" e.g. the price to sell an asset. An exit price
embodies expectations about the future cash inflows and cash
outflows associated with an asset or liability from the perspective
of a market participant. IFRS fair value is a market-based
measurement, rather than an entity-specific measurement and so
incorporates general assumptions that market participants are
applying in pricing the asset or liability, including assumptions
about risk.
Both the mark to model Published
NAV and mark to market IFRS NAV valuation bases use modelling
techniques and input from third-party valuation
specialists.
Key Performance
Indicators
|
|
IFRS NAV
|
|
Published
NAV
|
|
|
|
|
|
|
NAV[1]
|
€0.8078
(31 Dec
2023: €0.7250)
|
|
€0.9072
(31 Dec
2023: €0.9098)
|
|
|
|
|
|
|
NAV
Total Return1
|
18.06%
(31 Dec
2023: 17.76%)
|
|
5.64%
(31 Dec 2023: 10.39%)
|
|
|
|
|
|
|
Discount1
|
(19.53)%
(31 Dec
2023: (18.62)%)
|
|
(28.35)%
(31 Dec
2023: (35.15)%)
|
|
|
|
|
|
|
Dividend-
|
€0.0450
(30 Jun 2023: €0.0475)
|
Further information on the
reconciliation between the IFRS NAV and the Published NAV can be
found below and in Note 13 in the 'notes to the condensed interim
financial statements'.
Performance
|
Ticker
|
IFRS NAV
per
Redeemable
Share
|
Published
NAV per
Redeemable
Share
|
Share
Price[2]
|
Discount
IFRS NAV
|
Discount
Published
NAV
|
Dividend
Yield[3]
|
|
BGLF
|
|
|
|
|
|
|
|
30 Jun 2024
|
€0.8078
|
€0.9072
|
€0.6500
|
(19.53)%
|
(28.35)%
|
14.62%
|
|
31 Dec 2023
|
€0.7250
|
€0.9098
|
€0.5900
|
(18.62)%
|
(35.15)%
|
15.25%
|
|
BGLP[4]
|
|
|
|
|
|
|
|
30 Jun 2024
|
£0.6845
|
£0.7687
|
£0.5550
|
(18.92)%
|
(27.80)%
|
14.51%
|
|
31 Dec 2023
|
£0.6285
|
£0.7887
|
£0.5150
|
(18.06)%
|
(34.70)%
|
15.14%
|
|
|
LTM1
Return
|
3-Year
Annualised
Return
|
Annualised
Return
since
Inception
|
Cumulative
Return
since
Inception
|
|
BGLF IFRS NAV
|
32.39%
|
6.11%
|
7.23%
|
100.14%
|
|
BGLF Published NAV
|
14.10%
|
10.55%
|
8.47%
|
124.53%
|
|
BGLF Redeemable Share Price
|
(1.09%)
|
1.83%
|
5.07%
|
63.56%
|
The Company is not managed in
reference to a benchmark, however commentary to market indices and
market performance is detailed in the Portfolio Adviser's report
below.
Other Key Data
Dividends
On 23 January 2024, the Board
announced that it is targeting a total 2024 annual dividend of at least €0.09 per
redeemable share, which will
consist of quarterly payments of €0.0225 per
redeemable share.
Redeemable Share Dividends for the
Period Ended 30 June 2024
|
Period in respect of
|
Date
Declared
|
Ex-dividend
Date
|
Payment
Date
|
Amount per Redeemable
Share
|
|
|
|
|
|
€
|
|
1 Jan 2024 to 31 Mar
2024
|
22 Apr
2024
|
2 May
2024
|
7 Jun
2024
|
0.0225
|
|
1 Apr 2024 to 30 Jun
2024
|
19 Jul
2024
|
1 Aug
2024
|
6 Sep
2024
|
0.0225
|
Redeemable Share Dividends for the
Year Ended 31 December 2023
|
Period in respect of
|
Date
Declared
|
Ex-dividend
Date
|
Payment
Date
|
Amount per
Redeemable
Share
|
|
|
|
|
|
€
|
|
1 Jan 2023 to 31 Mar 2023
|
25 Apr
2023
|
4 May
2023
|
2 June
2023
|
0.0200
|
|
1 Apr 2023 to 30 Jun 2023
|
21 Jul
2023
|
3 Aug
2023
|
1 Sep
2023
|
0.0200
|
|
1 Jul 2023 to 30 Sept 2023
|
20 Oct
2023
|
2 Nov
2023
|
1 Dec
2023
|
0.0200
|
|
1 Oct 2023 to 31 Dec 2023
|
23 Jan
2024
|
1 Feb
2024
|
8 Mar
2024
|
0.0300
|
Redemption of redeemable of
shares
During the period ended 30 June
2024, the Company made its first return of capital
to its Shareholders, by way of compulsory partial
redemption of redeemable shares, as detailed below:
|
Record date
|
Number of
Redeemable
Shares
Redeemed
|
Rate per
Redeemable
Share
|
Amount returned to
Shareholders
|
|
10 June 2024
|
24,779,135
|
€0.9282
|
€22,999,992
|
Refer to below for more details on
the compulsory redemption mechanism.
Period Highs and Lows
Period Ended 30 June 2024 and 30 June 2023
|
|
2024
High
|
2024
Low
|
2023
High
|
2023
Low
|
|
Published NAV per Redeemable
Share
|
€0.9282
|
€0.8844
|
€0.9220
|
€0.8808
|
|
BGLF Share Price (Last
Price)
|
€0.6700
|
€0.5700
|
€0.7700
|
€0.6650
|
|
BGLP Share Price (Last
Price)
|
£0.5650
|
£0.4890
|
£0.6650
|
£0.5750
|
Schedule of Investments
As at 30 June 2024
|
|
Nominal
Holdings
|
Market
Value
|
Percentage
of
IFRS NAV
|
|
|
|
€
|
%
|
|
Investment Held in the Lux
Subsidiary:
|
|
|
|
|
CSWs
|
190,371,884
|
326,899,255
|
96.82
|
|
Shares (2,000,000 Class A and 1
Class B)
|
2,000,001
|
8,340,158
|
2.47
|
|
|
|
|
|
|
Other Net Assets
|
n/a
|
2,409,156
|
0.71
|
|
Net Assets Attributable to Shareholders
|
|
337,648,569
|
100.00
|
As at 31 December 2023
|
|
Nominal
Holdings
|
Market
Value
|
Percentage
of
IFRS NAV
|
|
|
|
€
|
%
|
|
Investment Held in the Lux
Subsidiary:
|
|
|
|
|
CSWs
|
208,565,744
|
298,050,226
|
92.86
|
|
Shares (2,000,000 Class A and 1
Class B)
|
2,000,001
|
7,944,332
|
2.47
|
|
|
|
|
|
|
Other Net Assets
|
n/a
|
14,992,542
|
4.67
|
|
Net Assets Attributable to Shareholders
|
|
320,987,100
|
100.00
|
Schedule of Significant
Transactions
|
Date of Transaction
|
Transaction
Type
|
Quantity
|
Amount
|
|
|
|
|
€
|
|
CSWs held by the
Company
|
|
|
|
|
6 February 2024
|
Redemption
|
(8,280,641)
|
(15,231,412)
|
|
8 May 2024
|
Redemption
|
(9,913,219)
|
(19,122,728)
|
|
Total Number of CSWs Redeemed
|
|
(18,193,860)
|
(34,354,140)
|
The proceeds of the redemptions
were used to fund dividends and redemption of shares and to cover
other administrative costs. The Company made no subscriptions
during the period ended 30 June 2024.
Chair's Statement
Dear Shareholders,
Company Returns and
NAV[5]
The Company delivered an IFRS NAV
total return per redeemable share of 18.06% over the first six
months of 2024, ending the period with a NAV of €0.8078 per
redeemable share.
On a Published NAV basis, the
Company delivered a total return per redeemable share of 5.64% over
the first six months of 2024, ending the year with a NAV of €0.9072
per redeemable share. The return was composed of 5.77% dividend
income and -0.13% net portfolio movement.
As highlighted above, the Company
uses different valuation policies to determine Published and IFRS
NAV. As at
30 June 2024, the variance between Published and IFRS NAV was
€0.0994 per redeemable share. This is primarily associated with the
discount rates used under the two policies. The tables below
further explain the rationale regarding the differences in the
assumptions that have contributed to the variance as at 30 June
2024.
During the first half of 2024, the
Company's performance on a Published NAV and an IFRS NAV basis was
supported, through its investment in BCF, by uninterrupted
distributions from the underlying CLO and loan portfolio, which
continued to benefit from the refinancing and reset activity during
2021/2022. The portfolio (primarily the loans directly held by BCF
and those CLOs that have exited their reinvestment periods) were
aided by a broader market rally. European and US loans returned
4.10% and 4.44%, respectively, over the year so far, as discussed
in more detail in the Portfolio Adviser's Review.
Consistent with guidance, the
Company has declared two dividends to shareholders in respect of
the six-month period ended 30 June 2024, totalling €0.045 per
redeemable share. As a reminder, the 2024 BGLF dividend guidance
announced on 23 January 2024 provided for a total annual dividend
of at least €0.09 per redeemable share payable in four equal
quarterly instalments. Details of all dividend payments can be
found within the 'Dividends and Other Key Data' section at the
front of this Half Yearly Financial Report.
The Company's dividends are funded
from the cash flows generated by the underlying CLO and loan
portfolio held within BCF. The Company's dividend policy during its
managed wind-down was set out in the Company's Circular published
on 25 August 2023, which stated that the Board intends to continue
to distribute as dividends on a quarterly basis the interest
payments deemed to be received from BCF and commence the redemption
of shares, having regard to any amounts which the Board deem
prudent to retain in the Company. However, as the Company's
underlying assets are realised over time and the portfolio
diminishes in size, the Board, in consultation with its the
Portfolio Adviser, may decide it is in the best interests of
Shareholders to cease payment of dividends and to use all proceeds
received from BCF for the redemption of the redeemable shares and
the return of capital to Shareholders.
On 10 June 2024, the Company
compulsorily redeemed 24,779,135 redeemable shares at a rate of
€0.9282 per redeemable share. A total of 5.5968% of the Company's
issued share capital was redeemed, leaving 417,959,768 shares
outstanding after the redemption, with no shares held in
treasury.
Historical BGLF NAV and Share
Price
The graph below shows cumulative
Published NAV and redeemable share price total returns and
cumulative returns on European and US loans[6].
[Graphs and charts are included in
the published Half Yearly Financial Report which is available on
the Company's website at https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited//]
Historical BCF Default Loss
Rate
The graph below shows the default
loss rate, which incorporates asset recovery, within the BCF
portfolio and the default loss rate of European and US
loans[7].
[Graphs and charts are included in
the published Half Yearly Financial Report which is available on
the Company's website at https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited//]
Market Conditions
Global markets navigated a complex
landscape characterized by fluctuating economic indicators over the
first six months of 2024. Central banks around the world have
generally maintained a cautious approach, keeping interest rates
steady, while signalling potential cuts in the latter half of the
year. The emergence of geopolitical tensions and subsequent supply
chain disruptions continued to pose risks, contributing to market
uncertainty. Despite these challenges, investor appetite for credit
remained relatively strong, driven by the search for yield in a
lowering interest rate environment.
Looking ahead to the remainder of
the year, the stage is set for cautious optimism, with market
participants closely monitoring geopolitical movements,
macroeconomic data releases, and central bank actions. Bolstered by
historically high all-in yields, we believe that floating rate
assets, including loans and CLOs, are likely to remain attractive,
even if central banks pivot. Corporate balance sheets have proven
largely resilient to the elevated rate environment and default
rates remain within historical averages. We anticipate a sustained
divergence between issuers that are defensively positioned for
growth and those more vulnerable to cyclical demand and consumer
spending fluctuations, meaning individual credit selection will be
a key driver to performance throughout the rest of the
year.
ESG
The practice of responsible
investing remains a key focus for investors and for Blackstone. The
Board regularly engages with the Company's Portfolio Adviser
regarding its ESG policy. Blackstone has committed to being a
responsible investor for over 35 years and is a signatory to the
Principles for Responsible Investment. This commitment is affirmed
across the organisation and guides its approach to
investing.
Whilst the Company is currently
exempt[8] from the
requirement to report against the TCFD recommendations, the Board
continues to actively discuss ESG matters with BXCI with a view of
obtaining meaningful information to provide to Shareholders. The
Board fully acknowledges the importance of the TCFD recommendations
and expects the companies to which BCF provides finance to be
compliant in their reporting against TCFD recommendations, as may
be required by applicable law or regulation. Refer to the Portfolio
Adviser's Review below for further details on BXCI's ESG
policy.
The Board
Good governance remains at the
heart of our work as a Board and is taken very seriously. The Board
believes that the Company maintains high standards of corporate
governance. The Board was very active during the period, convening
a total of 7 Board meetings and 9 Committee meetings (excluding 6
NAV Review Committee meetings), as well as undertaking an onsite
due diligence meeting with the Portfolio Adviser in January 2024,
the agenda for which covered risk and compliance, risk oversight
monitoring, finance and accounting, ESG and the wider market. The
Board also met with the BCF Board at the same time.
The Board and the Company's
advisers meet frequently, with the latter providing general updates
as well as recommendations on pertinent matters such as the
Company's managed wind-down process. The Board deems the careful
consideration of such matters to be critical to ensuring the
optimum returns of the Company, particularly in light of the
challenges and uncertainty faced in recent years.
The work of the Board is also
assisted by the Audit Committee, the NAV Review Committee, the
Management Engagement Committee, the Remuneration and Nomination
Committee, the Risk Committee and the Inside Information
Committee.
The Company is a member of AIC and
adheres to the AIC Code which is endorsed by the FRC and meets its
obligations in relation to the UK Code.
Shareholder
Communications
During the period, using our
Portfolio Adviser and Brokers, the Board continued its programme of
engagement with current and prospective Shareholders. The Board
sincerely hopes that you found the monthly factsheets, Circular,
quarterly letters, quarterly update webcasts and market commentary
valuable. The decision to put forward the managed wind-down
proposals was in-part the result of an active shareholder
consultation process in prior year, together with the Portfolio
Adviser. The Board is always pleased to have contact with
Shareholders and welcomes any opportunity to meet with you and
obtain your feedback.
Prospects and Opportunities for
the remainder of 2024
The Board's primary focus for the
remainder of 2024 will be to continue implementing the managed
wind-down and the redemption of shares. As the wind-down
progresses, the Board will also focus on streamlining operations
and managing costs as the size of the Company reduces.
The Board wishes to express its
thanks for the support of the Company's Shareholders.
Steven Wilderspin
Chair
19 September 2024
Portfolio Adviser's
Review
Bank Loan Market Overview
Supported by a stable
macroeconomic backdrop, global loan markets performed well in the
first six months of 2024, despite challenges from rising
geopolitical tensions and persistent inflationary pressure.
Investor appetite for credit remained relatively strong up to the
end of the period, driven by the prospect of potential rate cuts in
the latter half of the year. Loans outperformed other credit asset
classes over the period, with European and US loans returning 4.10%
and 4.44%, respectively[9]. A combination of resilient corporate earnings reports and
companies slowing their debt growth have led to a slight
contraction in loan spreads by 15bp to 490bp in Europe, and by 21bp
to 507bp in the US. Across both regions, the loan market saw a
notable rise in maturity extensions and refinancing activity,
though new money loan volume remained subdued. The sustained
scarcity of new issue loan supply, coupled with strong investor
demand, pushed the prices of European and US loan indices to
two-year highs of €97.16 and $96.06, leading to a renewed repricing
wave. Rolling 12-month loan defaults ticked up to end the first
half of the year at 2.6% in the US and 0.8% in
Europe[10].
Heading into the second half of
2024, the macroeconomic outlook remains positive, supported by
robust corporate balance sheets, fueling hopes for a soft landing.
While recent data releases have been mixed and price pressures
persist, the general trend is towards disinflation, strengthening
expectations for the Fed and ECB to begin reducing interest rates
after summer. We anticipate that the elevated rate environment will
support performance in the near term, allowing floating rate loans
to continue delivering strong returns.
CLO Market
Overview
A renewed optimism for impending
central bank rate cuts and the prospect of a soft landing for
global economies has boosted a resurgence of investor enthusiasm
and a corresponding tightening of CLO liabilities. New issue AAA
spreads tightened to 139bp in Europe and 138bp in the US from 172bp
in Europe and 160bp in the US, as of year-end 2023, and represents
an extreme turnaround from the start of 2023, when AAA spreads
hovered around 200bp in both regions[11].
Tighter liability spreads are
creating a supportive environment for new CLO issuance, as well as
refinancings and resets. In the first half of 2024 alone,
refinancing and reset volumes have surpassed the full year issuance
for 2022 and 2023 combined. Managers have taken advantage of the
positive market sentiment to re-price liabilities on existing
deals, particularly those that were issued in the past 18 months
with a relatively high cost of capital, improving the arbitrage for
equity investors. Looking ahead to the remainder of the year, CLO
activity looks set to remain strong as investors expect central
banks to pivot and CLOs to continue performing well. Since the
start of the year, investment banks have revised their 2024 new
issuance forecast upwards to €40-45bn in Europe and $145-155bn in
the US[12], which
would put 2024 on track to outpace every other year on
record[13].
Portfolio Update - BCF
Taking advantage of the loan
market rally, BCF's CLOs generally sold higher-priced but
lower-rated assets, as loan prices across the rating band
compressed towards par. In Europe, BCF's CLOs used the additional
cash to purchase facilities from the primary pipeline that offered
better relative value, while BCF's US CLOs focused on improving
credit quality by buying better-rated credits.
The graph below shows the top five industry concentrations
for the BCF portfolio as of 30 June 2024[14]:
[Graphs and charts are included in
the published Half Yearly Financial Report which is available on
the Company's website at https://www.blackstone.com/fund/bglfln-blackstone-loan-financing-limited//]
As of the end of June, the BCF
portfolio remained highly diversified and defensively positioned,
with more than 650 loan issuers, across 27 sectors and 30
countries. The portfolio was concentrated around B1-B2 rated
issuers and holds 7.2% Caa rated assets (at the facility level),
which has ticked up slightly since the start of the year. The
portfolio's average loan price remained broadly flat at 96.7,
compared to 96.9 at the end of last year, and assets priced below
€/$80 were at 4.9% compared to 3.6% in December 2023. Looking
forward, we see minimum refinancing risk in the portfolio as loan
maturities are generally wrapped around 2028. The BCF portfolio
maintained a lower year-to-date default rate of 0.6% compared to
the European and US loan indices of 0.8% and
2.6%[15],
respectively. A minimised level of defaults helps to ensure that
equity distributions are well protected.
Over a busy first half of the
year, BCF took advantage of the supportive capital markets in order
to improve on the expected future equity cash flows for the CLO
portfolio. Specifically, Bushy Park CLO and Glenbrook Park CLO each
issued delayed draw tranches, resulting in further levering of the
capital structure and earlier cash distributions to equity.
Clonmore Park CLO and Harbor Park CLO were refinanced, resulting in
improvements to the weighted average cost of capital by 68bp and
23bp, respectively. Finally, BCF took advantage of the wider loan
market rally to redeem the debt tranches of Palmerston Park CLO,
Richmond Park CLO, and Clontarf Park CLO in April 2024.
Since the effective date of the
Company's managed wind-down, 2 January 2024, no new CLO investments
will be made and any refinancing of CLO liabilities will not extend
maturities. Importantly, however, the underlying portfolio of CLO
positions will continue to be actively managed with the combined
objectives of maximising returns for investors, alongside the
overarching aim of realising all existing assets in an orderly
manner. Given the majority of the CLOs within BCF are required to
be held until redemption or maturity, our focus will be on
continuously evaluating optimal and commercially prudent times to
redeem, sell, or refinance, which may vary depending on each
specific CLO.
CLO
Portfolio Positions
|
Current
Portfolio
|
Closing
Date
|
Deal
Size
(M)
|
Position
Owned
(M)
|
% of BCF
NAV
|
Reinvest.
Period
Left (Yrs)
|
Current Asset
Coupon[16]
|
Current Liability
Cost
|
Current
NIM[17]
|
NIM
3M Prior
|
Distributions Through Last
Payment Date
|
% of
Tranche
|
|
Ann.
|
Cum.
|
|
EUR CLO Income Note
Investments
|
|
Phoenix Park
|
Jul-14
|
€
381
|
€
16.4
|
0.7%
|
0.0
|
7.21%
|
5.61%
|
1.60%
|
1.62%
|
13.0%
|
129.2%
|
51.4%
|
|
Dartry Park
|
Mar-15
|
424
|
18.8
|
1.4%
|
0.8
|
7.42%
|
5.55%
|
1.87%
|
1.85%
|
12.3%
|
114.3%
|
51.1%
|
|
Tymon Park
|
Dec-15
|
415
|
16.0
|
1.5%
|
1.1
|
7.45%
|
5.59%
|
1.86%
|
1.81%
|
14.3%
|
122.1%
|
51.0%
|
|
Elm Park
|
May-16
|
519
|
22.5
|
2.0%
|
1.3
|
7.33%
|
5.52%
|
1.81%
|
1.87%
|
14.6%
|
118.0%
|
54.0%
|
|
Griffith Park
|
Sep-16
|
434
|
18.3
|
1.2%
|
0.0
|
7.21%
|
5.24%
|
1.97%
|
1.98%
|
12.0%
|
93.4%
|
53.4%
|
|
Clarinda Park
|
Nov-16
|
417
|
16.3
|
1.5%
|
0.6
|
7.32%
|
5.53%
|
1.79%
|
1.83%
|
11.9%
|
90.9%
|
51.2%
|
|
Palmerston Park[18]
|
Apr-17
|
45
|
16.9
|
0.6%
|
0.0
|
7.75%
|
n/a
|
n/a
|
0.95%
|
11.7%
|
84.5%
|
53.3%
|
|
Clontarf Park18
|
Jul-17
|
34
|
20.4
|
0.5%
|
0.0
|
8.01%
|
n/a
|
n/a
|
0.82%
|
14.9%
|
103.5%
|
66.9%
|
|
Willow Park
|
Nov-17
|
277
|
16.5
|
0.7%
|
0.0
|
7.08%
|
5.71%
|
1.37%
|
1.45%
|
15.4%
|
101.4%
|
60.9%
|
|
Marlay Park
|
Mar-18
|
300
|
17.4
|
0.9%
|
0.0
|
7.03%
|
5.16%
|
1.87%
|
1.92%
|
17.9%
|
111.8%
|
60.0%
|
|
Milltown Park
|
Jun-18
|
341
|
17.0
|
1.1%
|
0.0
|
7.17%
|
5.31%
|
1.87%
|
1.85%
|
17.2%
|
104.1%
|
65.0%
|
|
Richmond Park18
|
Jul-18
|
68
|
32.6
|
0.8%
|
0.0
|
6.80%
|
n/a
|
n/a
|
0.80%
|
16.6%
|
99.1%
|
68.3%
|
|
Sutton Park
|
Oct-18
|
344
|
16.9
|
1.1%
|
0.0
|
7.10%
|
5.47%
|
1.63%
|
1.71%
|
16.7%
|
91.4%
|
66.7%
|
|
Crosthwaite Park
|
Feb-19
|
516
|
23.3
|
2.1%
|
1.2
|
7.34%
|
5.40%
|
1.93%
|
1.84%
|
15.4%
|
81.9%
|
64.7%
|
|
Dunedin Park
|
Sep-19
|
421
|
17.9
|
1.4%
|
1.9
|
7.35%
|
5.56%
|
1.79%
|
1.74%
|
17.8%
|
85.0%
|
52.9%
|
|
Seapoint Park
|
Nov-19
|
403
|
15.2
|
1.8%
|
0.0
|
7.48%
|
5.55%
|
1.93%
|
1.76%
|
14.7%
|
64.3%
|
70.5%
|
|
Holland Park
|
Nov-19
|
424
|
27.6
|
2.0%
|
0.0
|
7.15%
|
5.56%
|
1.59%
|
1.70%
|
11.8%
|
54.4%
|
72.1%
|
|
Vesey Park
|
Apr-20
|
403
|
17.3
|
2.3%
|
0.4
|
7.48%
|
5.64%
|
1.84%
|
1.85%
|
17.8%
|
74.1%
|
80.3%
|
|
Avondale Park
|
Jun-20
|
409
|
16.0
|
1.4%
|
1.7
|
7.44%
|
5.59%
|
1.85%
|
1.79%
|
27.6%
|
111.9%
|
63.0%
|
|
Deer Park
|
Sep-20
|
355
|
14.4
|
1.5%
|
1.8
|
7.35%
|
5.65%
|
1.70%
|
1.78%
|
26.4%
|
99.9%
|
71.9%
|
|
Marino Park
|
Dec-20
|
322
|
12.0
|
1.6%
|
0.0
|
7.44%
|
5.53%
|
1.91%
|
1.98%
|
18.2%
|
64.1%
|
71.4%
|
|
Carysfort Park
|
Apr-21
|
404
|
17.7
|
2.2%
|
1.1
|
7.41%
|
5.55%
|
1.87%
|
1.93%
|
16.5%
|
53.4%
|
80.7%
|
|
Rockfield Park
|
Jul-21
|
402
|
16.9
|
2.2%
|
1.0
|
7.38%
|
5.53%
|
1.85%
|
1.91%
|
16.3%
|
47.7%
|
80.0%
|
|
Dillon's Park
|
Sep-21
|
404
|
18.5
|
2.3%
|
1.8
|
7.40%
|
5.54%
|
1.86%
|
1.93%
|
15.1%
|
41.7%
|
84.0%
|
|
Cabinteely Park
|
Dec-21
|
404
|
16.7
|
2.0%
|
2.1
|
7.41%
|
5.62%
|
1.79%
|
1.81%
|
15.7%
|
39.7%
|
75.6%
|
|
Otranto Park
|
Mar-22
|
443
|
25.3
|
3.0%
|
2.4
|
7.42%
|
5.86%
|
1.56%
|
1.55%
|
14.8%
|
33.4%
|
96.3%
|
|
Clonmore Park
|
Aug-22
|
349
|
16.9
|
2.0%
|
2.6
|
7.47%
|
6.16%
|
1.31%
|
1.36%
|
20.6%
|
38.6%
|
100.0%
|
|
Edmondstown Park
|
Dec-22
|
379
|
22.8
|
3.3%
|
3.1
|
7.60%
|
6.92%
|
0.69%
|
0.61%
|
12.6%
|
19.5%
|
100.0%
|
|
Bushy Park
|
Mar-23
|
405
|
17.3
|
1.4%
|
3.3
|
7.62%
|
6.65%
|
0.96%
|
1.19%
|
46.1%
|
58.9%
|
61.3%
|
|
Glenbrook Park
|
Jul-23
|
351
|
23.0
|
2.0%
|
3.6
|
7.75%
|
6.78%
|
0.97%
|
1.14%
|
53.3%
|
51.6%
|
100.0%
|
|
Wilton Park
|
Nov-23
|
395
|
34.9
|
4.0%
|
3.9
|
7.58%
|
6.20%
|
1.38%
|
1.33%
|
16.2%
|
10.4%
|
100.0%
|
|
Cumulus 2023-1 Sta
|
Nov-23
|
319
|
24.9
|
3.6%
|
n/a
|
7.15%
|
6.12%
|
1.03%
|
n/a
|
n/a
|
n/a
|
100.0%
|
|
USD CLO Income Note
Investments
|
|
Grippen Park
|
Mar-17
|
$
301
|
$
21.0
|
0.6%
|
0.0
|
8.87%
|
7.92%
|
0.95%
|
1.16%
|
13.4%
|
95.0%
|
50.1%
|
|
Thayer Park
|
May-17
|
522
|
19.3
|
1.4%
|
1.8
|
8.89%
|
7.08%
|
1.81%
|
1.92%
|
14.5%
|
100.8%
|
50.1%
|
|
Catskill Park
|
May-17
|
511
|
39.5
|
0.7%
|
0.0
|
8.89%
|
7.96%
|
0.93%
|
1.32%
|
13.5%
|
93.5%
|
50.1%
|
|
Dewolf Park
|
Aug-17
|
552
|
22.4
|
1.0%
|
0.0
|
8.84%
|
7.11%
|
1.73%
|
1.83%
|
16.0%
|
106.0%
|
50.1%
|
|
Gilbert Park
|
Oct-17
|
708
|
36.5
|
1.3%
|
0.0
|
8.80%
|
7.53%
|
1.28%
|
1.46%
|
14.5%
|
94.0%
|
50.1%
|
|
Long Point Park
|
Dec-17
|
407
|
20.8
|
0.8%
|
0.0
|
8.79%
|
7.21%
|
1.58%
|
1.73%
|
18.8%
|
118.4%
|
50.1%
|
|
Stewart Park
|
Jan-18
|
640
|
65.0
|
0.8%
|
0.0
|
8.81%
|
7.26%
|
1.55%
|
1.69%
|
11.5%
|
71.5%
|
50.1%
|
|
Cook Park
|
Apr-18
|
786
|
37.8
|
1.6%
|
0.0
|
8.89%
|
7.07%
|
1.82%
|
1.91%
|
16.7%
|
100.5%
|
50.1%
|
|
Fillmore Park
|
Jul-18
|
470
|
21.3
|
1.4%
|
0.0
|
8.90%
|
7.04%
|
1.85%
|
1.96%
|
17.5%
|
99.7%
|
52.3%
|
|
Harbor Park
|
Dec-18
|
678
|
28.0
|
2.3%
|
0.0
|
8.82%
|
6.75%
|
2.06%
|
1.93%
|
15.5%
|
83.0%
|
50.1%
|
|
Southwick Park
|
Aug-19
|
503
|
18.4
|
1.8%
|
0.1
|
8.95%
|
6.92%
|
2.04%
|
2.10%
|
18.7%
|
87.3%
|
59.9%
|
|
Beechwood Park
|
Dec-19
|
816
|
34.5
|
3.2%
|
2.5
|
8.73%
|
7.06%
|
1.67%
|
1.75%
|
17.1%
|
74.0%
|
61.1%
|
|
Allegany Park
|
Jan-20
|
506
|
21.3
|
2.2%
|
2.6
|
8.59%
|
7.08%
|
1.52%
|
1.73%
|
15.9%
|
67.6%
|
66.2%
|
|
Harriman Park
|
Apr-20
|
498
|
20.6
|
2.4%
|
1.8
|
8.69%
|
7.05%
|
1.64%
|
1.79%
|
21.8%
|
87.3%
|
70.0%
|
|
Cayuga Park
|
Aug-20
|
397
|
16.1
|
1.9%
|
2.0
|
8.71%
|
6.94%
|
1.77%
|
1.89%
|
25.8%
|
95.0%
|
72.0%
|
|
Point Au Roche Park
|
Jun-21
|
457
|
18.7
|
1.9%
|
2.1
|
8.74%
|
7.07%
|
1.67%
|
1.77%
|
18.8%
|
52.8%
|
61.2%
|
|
Peace Park
|
Sep-21
|
660
|
27.5
|
2.9%
|
2.3
|
8.72%
|
7.02%
|
1.70%
|
1.76%
|
18.7%
|
47.8%
|
60.8%
|
|
Whetstone Park
|
Dec-21
|
506
|
20.2
|
2.2%
|
2.6
|
8.86%
|
6.99%
|
1.86%
|
1.93%
|
20.1%
|
47.7%
|
62.5%
|
|
Boyce Park
|
Mar-22
|
762
|
31.5
|
3.4%
|
2.8
|
8.83%
|
6.91%
|
1.92%
|
2.01%
|
20.4%
|
43.1%
|
61.8%
|
|
Tallman Park
|
May-21
|
410
|
1.5
|
0.2%
|
1.8
|
8.77%
|
7.12%
|
1.65%
|
1.77%
|
19.8%
|
57.3%
|
5.0%
|
|
Wehle Park
|
Apr-22
|
547
|
1.8
|
0.2%
|
2.8
|
8.78%
|
7.14%
|
1.63%
|
1.73%
|
21.1%
|
43.4%
|
5.0%
|
|
Redeemed Or Fully Sold CLOs
|
Region
|
Vintage
|
Sale/
Redemption Date
|
BCF Position
Prior To Exit (m)
|
Current Valuation as % of
BCF
NAV[19]
|
Realised IRR
To Date[20]
|
Ann. Distribution
Through Last Payment[21]
|
|
Myers Park
|
US
|
2018
|
Mar-21
|
$26.4
|
N/A
|
11.1%*
|
16.4%
|
|
Greenwood Park
|
US
|
2018
|
Mar-21
|
$53.9
|
N/A
|
19.0%*
|
19.7%
|
|
Orwell Park
|
Europe
|
2015
|
May-21
|
€
24.2
|
N/A
|
13.6%*
|
23.5%
|
|
Stratus 2020-2
|
US
|
2020
|
Jun-21
|
$24.2
|
N/A
|
37.6%
|
93.3%
|
|
Niagara Park
|
US
|
2019
|
Aug-21
|
$22.1
|
N/A
|
16.6%*
|
14.9%
|
|
Sorrento Park
|
Europe
|
2014
|
Oct-21
|
€
29.5
|
N/A
|
9.7%*
|
18.2%
|
|
Castle Park
|
Europe
|
2014
|
Oct-21
|
€
24.0
|
N/A
|
11.7%*
|
23.3%
|
|
Dorchester Park
|
US
|
2015
|
Oct-21
|
$44.5
|
0.01%
|
11.5%*
|
20.5%
|
|
Buckhorn Park
|
US
|
2019
|
Feb-22
|
$24.2
|
N/A
|
16.0%*
|
19.5%
|
As of 30 June 2024, the Company
was invested in accordance with its and BCF's investment policy and
was diversified across 650+ issuers through directly held loans and
the CLO portfolio, across 27 industries and 30 different
countries[22]. No
individual borrower represented more than 2% of the overall
portfolio at the end of June 2024.
Key Portfolio Statistics
|
|
% of
NAV[23]
|
Current WA
Asset
Coupon[24]
|
Current WA
Liability[25]
|
WA
Remaining
RPs (CLOs)
|
|
EUR CLOs
|
56.08%
|
7.37%
|
5.77%
|
1.2
Years
|
|
US CLOs
|
37.92%
|
8.81%
|
7.19%
|
1.0
Years
|
|
Directly Held Loans[26]
|
0.27%
|
8.07%
|
n/a
|
n/a
|
|
Net Cash & Expenses
|
5.73%
|
-
|
-
|
n/a
|
|
Total Portfolio
|
100.00%
|
8.04%
|
6.43%
|
1.1
Years
|
Top 10 Industries[27]
|
Industry
|
% of
portfolio
|
|
|
30 June
2024
|
|
Healthcare and
pharmaceuticals
|
15.3%
|
|
Services Business
|
10.8%
|
|
High tech
industries[28]
|
10.3%
|
|
Banking, finance, insurance and
real estate (FIRE)
|
8.7%
|
|
Media broadcasting and
subscription
|
7.0%
|
|
Construction and
building
|
6.6%
|
|
Hotels, gaming and
leisure
|
4.9%
|
|
Capital equipment
|
4.3%
|
|
Chemicals, plastics and
rubber
|
4.3%
|
|
Services Consumer
|
4.2%
|
|
Industry
|
% of
portfolio
|
|
|
31
December 2023
|
|
Healthcare and
pharmaceuticals
|
15.9%
|
|
Services business
|
10.0%
|
|
High tech
industries28
|
9.6%
|
|
Banking, finance, insurance and
real estate (FIRE)
|
8.6%
|
|
Media broadcasting and
subscription
|
7.6%
|
|
Construction and
building
|
6.1%
|
|
Hotels, gaming and
leisure
|
5.0%
|
|
Capital equipment
|
4.6%
|
|
Chemicals, plastics and
rubber
|
4.5%
|
|
Telecoms
|
3.9%
|
Top 5 Countries27
|
Country
|
% of
portfolio
|
|
|
30 June
2024
|
|
US
|
51.7%
|
|
France
|
11.1%
|
|
UK
|
8.1%
|
|
Luxembourg
|
6.2%
|
|
Netherlands
|
5.8%
|
|
Country
|
% of
portfolio
|
|
|
31
December 2023
|
|
US
|
50.0%
|
|
France
|
10.5%
|
|
UK
|
7.6%
|
|
Luxembourg
|
6.7%
|
|
Netherlands
|
6.1%
|
Top 20 Issuers[29]
|
|
#
Facilities
|
Portfolio Par
(€M)
|
Total Par Outstanding
(€M)
|
Moody's
Industry
|
Country
|
WA Price
|
WA Spread
|
WA Coupon (All-In
Rate)
|
WA Maturity
(Years)
|
|
Numericable
|
11
|
213
|
14,235
|
Media
Broadcasting and Subscription
|
France
|
72.4
|
4.54%
|
6.99%
|
4.0
|
|
Numericable is one of the largest
telecom operators in France by revenues and number of subscribers,
with major positions in residential fixed, residential mobile, B2B,
wholesale and media.
|
|
VodafoneZiggo
|
4
|
209
|
6,929
|
Media
Broadcasting and Subscription
|
Netherlands
|
94.1
|
3.14%
|
6.06%
|
4.9
|
|
VodafoneZiggo is a leading operator
in the Netherlands that provides fixed, mobile and integrated
communication and entertainment services to consumers and
businesses. The company was created as a result of a JV between
Liberty Global & Vodafone.
|
|
Virgin Media
|
9
|
209
|
11,194
|
Media
Broadcasting and Subscription
|
US
|
95.8
|
2.95%
|
6.49%
|
4.8
|
|
Virgin Media O2 is an integrated
communications provider of mobile, broadband internet, video and
fixed-line telephony services to residential customers and
businesses in the UK. The company was created as a result of a
Joint Venture between Liberty Global & Telefonica.
|
|
ION Markets
|
3
|
192
|
3,818
|
Banking,
Finance, Insurance and Real Estate (FIRE)
|
Ireland
|
97.0
|
4.21%
|
8.35%
|
3.8
|
|
ION Markets is a global financial
software and services company that provides high performance
trading solutions to banks, hedge funds, brokers and other
financial institutions, across electronic fixed income, currencies,
equities, derivatives and commodities markets.
|
|
Grifols
|
3
|
168
|
4,791
|
Healthcare and Pharmaceuticals
|
Spain
|
93.1
|
2.63%
|
5.77%
|
3.6
|
|
Grifols is a global healthcare
company producing plasma-derived medicines and transfusion
medicine. The company is organised into four divisions: Bioscience,
Diagnostic, Hospital and Bio Supplies & Other.
|
|
Paysafe
|
4
|
161
|
2,180
|
Banking,
Finance, Insurance and Real Estate (FIRE)
|
US
|
97.2
|
3.04%
|
5.81%
|
4.3
|
|
Paysafe is a leading specialised
payments platform, with revenues derived from Payment Processing,
eWallets, and eCash accounts. Paysafe is a global leader in the
Gaming eCash segment, digital gambling wallets, and the Merchant
Acquirer segment in the US, with a presence in Europe
also.
|
|
Froneri
|
2
|
160
|
4,572
|
Beverage,
Food and
Tobacco
|
US
|
99.9
|
2.18%
|
6.72%
|
2.6
|
|
Froneri is a global ice cream
manufacturer with its headquarters in North Yorkshire, England. It
is the second largest ice cream producer by volume in the world,
after Unilever. Froneri was created in 2016 as a joint venture
between Nestle and PAI Partners to combine their ice cream
activities.
|
|
McAfee Corp
|
2
|
159
|
6,308
|
High Tech
Industries
|
US
|
99.9
|
3.41%
|
7.74%
|
4.7
|
|
McAfee is the one of the largest
security software vendors globally. McAfee is a major player in the
consumer security market, with a focus on consumer endpoint
protection. McAfee simplifies the complexity of threat detection
and response by correlating events, detecting new threats, reducing
false positives, automating, and prioritizing incident response,
and creating workflows that result in remediation.
|
|
Allied Universal
|
4
|
154
|
7,434
|
Services
Business
|
US
|
97.3
|
3.75%
|
7.25%
|
3.9
|
|
Allied Universal is the largest
provider of security systems and services globally, serving North
America, Europe, the Middle East, Africa, Asia Pacific and Latin
America.
|
|
Telenet
International
|
3
|
140
|
3,791
|
Media Broadcasting and
Subscription
|
Belgium
|
97.3
|
2.17%
|
6.42%
|
4.4
|
|
Telenet is one of the largest cable
operators in Belgium that provides internet, TV, fixed and mobile
telephony to consumers and businesses in Flanders and Brussels. It
also provides mobile telephony services in the Wallonia
region.
|
|
Independent Vetcare
|
1
|
140
|
2,417
|
Healthcare and Pharmaceuticals
|
UK
|
100.0
|
5.00%
|
8.80%
|
4.5
|
|
Independent Vetcare is the largest
veterinary practice group in Europe. The company generates the
majority of its revenue in the UK, where it is a market leader, and
is also present in Sweden, the Netherlands, Finland, Germany,
Norway, Denmark, Switzerland and North America.
|
|
UPC
|
5
|
139
|
4,515
|
Media
Broadcasting and Subscription
|
US
|
98.9
|
2.88%
|
6.88%
|
4.8
|
|
UPC is a cable operator in
Switzerland, Poland & Slovakia. It offers broadband, tv and
mobile services.
|
|
Apex Group
|
3
|
129
|
3,019
|
Banking,
Finance, Insurance and Real Estate (FIRE)
|
US
|
100.3
|
4.05%
|
8.46%
|
4.1
|
|
Apex Group is a leading global fund
administration services provider with over 100 offices worldwide
and 12,200 employees and 10,000+ clients, delivering a broad range
of solutions to asset managers, capital markets and family
offices.
|
|
TKE
|
3
|
127
|
5,005
|
Capital
Equipment
|
Luxembourg
|
100.2
|
3.65%
|
7.78%
|
3.9
|
|
Thyssenkrupp Elevators is one of
the largest global market leaders for elevator and escalator
technology. The company designs, manufacturers, installs, services,
and modernises elevators, escalators, and platform
lifts.
|
|
Masorange
|
5
|
121
|
7,134
|
Telecoms
|
UK
|
99.7
|
3.73%
|
7.00%
|
6.0
|
|
Masorange is the largest telecom
operator in Spain, with market leading positions in fixed and
mobile. Masorange benefits from good quality and owned fixed
infrastructure, with a fully developed Fiber to the home (FTTH)
network. It also has nationwide wholesale agreements in place,
which provide it with full coverage of the Spanish
market.
|
|
Constantin Investissement 1
SA
|
4
|
118
|
3,415
|
Healthcare and Pharmaceuticals
|
France
|
90.3
|
3.79%
|
7.38%
|
4.1
|
|
Cerba (Constantin Investissement)
is a leading European clinical pathology laboratory, providing
routine and specialised clinical laboratory testing services
primarily in France, Belgium and Luxembourg, and supporting
pharmaceutical and biotechnology companies worldwide in the
clinical trial phase of their drug development
processes.
|
|
Apex Group
|
3
|
133
|
2,962
|
Banking,
Finance, Insurance and Real Estate (FIRE)
|
US
|
99.2
|
4.05%
|
8.56%
|
4.6
|
|
Apex Group is a leading global fund
administration services provider with over 100 offices worldwide
and 12,200 employees and 10,000+ clients, delivering a broad range
of solutions to asset managers, capital markets and family
offices.
|
|
Tackle Sarl Lux
|
1
|
115
|
1,455
|
Hotels,
Gaming and Leisure
|
Luxembourg
|
99.9
|
3.50%
|
7.32%
|
3.9
|
|
Tipico (Tackle Sarl) is one of the
largest sport betting provider in Germany by market share. Tipico
operates through its proprietary platform and fully licensed in the
newly regulated Germany market.
|
|
Biogroup
|
4
|
114
|
3,150
|
Healthcare and Pharmaceuticals
|
France
|
95.8
|
3.53%
|
6.79%
|
3.6
|
|
Biogroup is a leading laboratory
services company mainly in France and Belgium. The company assists
physicians in the diagnosis of a variety of medical conditions
through the provision of a range of diagnostic testing services on
(primarily blood and urine) samples collected from the patients.
The company is one of the market leaders in French routine
testing and also has the ability to perform certain specialised
tests.
|
|
Odyssey Investissement SASU
(Circet)
|
1
|
114
|
2,000
|
Telecoms
|
France
|
98.6
|
3.25%
|
6.97%
|
4.3
|
|
Circet is a leading provider of
telecom infrastructure services in France, UK, Ireland and Spain,
covering all fixed (copper/cable/fibre) and mobile (2G/3G/4G)
technologies.
|
|
Home Vi (Domus VI)
|
2
|
114
|
3,140
|
Healthcare and Pharmaceuticals
|
France
|
98.0
|
4.98%
|
5.03%
|
5.3
|
|
Home Vi is one of the largest
operator of nursing homes in France and one of the largest operator
of nursing homes and psychiatric facilities in Spain. It also has a
growing presence in Germany, Portugal, Ireland, the Netherlands and
LatAm.
|
Regulatory Update
The Digital Operations Resilience
Act ("DORA") entered into force on 16 January 2023 and will apply
to in-scope financial services entities from 17 January 2025. DORA
aims to strengthen resilience, reliability, and continuity of
financial services throughout the EU. BXCI continues to monitor
regulatory developments with regards to DORA and is taking the
necessary steps to ensure compliance with the
requirements.
Directive (EU) 2024/927 (AIFMD II)
entered into force on 15 April 2024 and member states of the
European Economic Area have until 16 April 2026 to implement its
rules, subject to certain measures that member states must
implement from 16 April 2027. AIFMD II provides a harmonised regime
for loan origination funds, and includes new requirements as
regards delegation arrangements, liquidity risk management,
supervisory reporting and the provision of depositary and custody
services. BXCI continues to monitor regulatory developments in
anticipation of AIFMD II entering into force in local law in April
2026.
The final elements of the new EU
AML / CFT package of legislative proposals to deliver a stronger
and consistent set of anti-money laundering and countering the
financing of terrorism rules at EU level, originally proposed on 20
July 2021 by the European Commission, were adopted by the Council
and the European Parliament. On 19 June 2024, the final texts were
published in the Official Journal.
On 6 April 2022, the European
Commission adopted the Delegated Regulation (as amended from time
to time) supplementing EU Regulation (EU) 2019/2088 (the "SFDR")
with regard to the regulatory technical standards ("RTS")
specifying the details of the content and presentation of the
information in relation to the principle of "do no significant
harm", information in relation to sustainability indicators and
adverse sustainability impacts and the content and presentation of
the disclosure regarding the promotion of environmental or social
characteristics (Article 8 SFDR) and sustainable investment
objectives (Article 9 SFDR) in pre-contractual documents, on
websites and in periodic reports. The SFDR RTS have applied since 1
January 2023. BXCI continues to monitor regulatory developments
with regards to SFDR on an ongoing basis.
BXCI continues to monitor the
regulatory environment for any developments with regard to the EU
Securitisation rules.
Risk Management
Given the natural asymmetry of
fixed income, our experienced credit team focuses on truncating
downside risk and avoiding principal impairment and believes that
the best way to control and mitigate risk is by remaining
disciplined in all market cycles and by making careful credit
decisions while maintaining adequate diversification.
BCF's portfolio is managed to
minimise default risk and credit related losses, which is achieved
through in-depth fundamental credit analysis and diversified
portfolios in order to avoid the risk of any one issuer or industry
adversely impacting overall performance. As outlined in the
Portfolio Update section, BCF is broadly diversified across
issuers, industries and countries.
BCF's base currency is denominated
in Euro, though investments are also made and realised in other
currencies. Changes in rates of exchange may have an adverse effect
on the value, price or income of the investments of BCF. BCF may
utilise different financial instruments to seek to hedge against
declines in the value of its positions as a result of changes in
currency exchange rates.
Through the construction of solid
credit portfolios and our emphasis on risk management, capital
preservation and fundamental credit research, we believe the
Company's investment strategy will continue to be
successful.
Blackstone's Firmwide Approach to
ESG
Blackstone aims to develop
resilient companies and competitive assets that deliver long-term
value for our investors. ESG principles have long informed the way
we run our firm, approach investing and partner with the assets in
our portfolio. In recent years we have formalized our approach by
building dedicated ESG teams that look to develop value accretive
ESG policies and support integration within the business units and
regularly report progress.
Blackstone's approach to
sustainability is rooted in responsible investing and operational
improvements to drive value for our investors.
Material[30] and
applicable ESG considerations are incorporated into investment
decisions to avoid risk and create value for investors.
Blackstone's portfolio of companies and assets across sectors and
geographies enables us to think about sustainability from multiple
vantage points. As investors, we consider material ESG factors both
during the due diligence of potential investments and throughout
the investment period to drive value.
Blackstone maintains a robust
staff of professionals from various disciplines who focus on ESG at
the firm to enhance the value of our investments, consistent with
our fiduciary responsibilities to our clients. Our Corporate ESG
team is responsible for firmwide coordination to ensure the firm
delivers upon its ESG initiatives and provides transparency for
management, partners, and investors. Business unit ESG teams are
responsible for implementing signature ESG programs where
applicable, integrating ESG throughout the investment lifecycle as
appropriate, and creating value for portfolio companies and assets
through ESG initiatives within our major businesses.
BXCI's Approach to ESG
At BXCI, we believe that a key
aspect of being a responsible investor is an active evaluation of
certain environmental, social and governance components of our
investments and recognize the value such evaluation can provide as
we seek to grow and protect investors' assets while managing risk.
To that end, during the due diligence phase of an investment,
investment teams within BXCI aim to consider material ESG factors
that may impact investment performance to drive value. Due
diligence of relevant ESG considerations varies by investment
strategy and is based on factors that may include (i) the nature of
BXCI's investment, (ii) the transaction process and timeline, (iii)
the level of access to information, specifically as it pertains to
ESG factors and (iv) the target portfolio company's business
model.
BXCI's Global Head of ESG, Rita
Mangalick, oversees ESG policy integration, reporting, engagement,
and value creation initiatives within BXCI. Ms. Mangalick is
supported by several members of the BXCI ESG team. Additionally,
BXCI has an ESG Working Group, which discusses a variety of
ESG-related topics to drive value, including, as applicable: review
of investments; investor requests; market trends and newly adopted
or pending legislation, rules, and regulation.
BXCI's ESG Due Diligence Approach
BXCI's focus on ESG stems from our
commitment to prudent investing and our culture that prioritises
robust corporate governance. We seek to identify material ESG risks
and opportunities throughout the diligence process and consider how
these factors may be used to enhance the sustainability profile of
our investments to improve investor returns and drive value, where
it is consistent with the investment strategy and where we have
ability to do so. We incorporate ESG principles into our investment
process with approaches tailored to our various
strategies.
Comprehensive Due Diligence
To effectively integrate the
consideration of relevant ESG factors into the due diligence stage
of our investment process to drive long-term value, it is important
for our team to understand how to best identify and assess ESG
factors that may be applicable to a particular investment. We
learned that these factors can vary significantly across
industries, leading us to partner with a third-party ESG consultant
to create a sector-specific tool that provides a framework to
conduct relevant ESG due diligence. This tool, which is based on
Sustainability Accounting Standards Board ("SASB") standards, is
available to our investment teams to help them evaluate material
ESG risks and opportunities that may impact a company's
performance, enabling us to assess and mitigate these factors in a
more targeted fashion to drive value. The tool includes
industry-specific due diligence questions, potential KPIs to track,
detailed guidance on considerations for evaluating the topic and
recommended resources for additional research.
Investment Committee Engagement and
Documentation
Analysis of identified ESG-related
risks and opportunities may be presented to the Investment
Committee for review questions, and feedback on its views of
material ESG factors and due diligence that has been performed. If
material ESG concerns are identified, BXCI may seek to address the
situation, as appropriate, including, but not limited to, via
additional due diligence, hiring specialist advisors, attempting to
facilitate further discussions with company management or possibly
contributing to a decision not to invest.
Active Post-Investment Monitoring
During the holding period of an
investment, the investment team actively monitors the investment
and provides updates to the Investment Committee, as needed,
including with respect to ESG-related factors for certain
investment strategies. As part of this process, members of the
investment team may facilitate direct dialogue with company
management as well as track material ESG factors that may have an
impact on company performance during the anticipated holding period
of our investment.
ESG
Disclaimer
Blackstone may select or reject
portfolio companies or investments on the basis of ESG related
investment risks, and this may cause Blackstone's funds and/or
portfolio companies to underperform relative to other sponsors'
funds and/or portfolio companies which do not consider ESG factors
at all or which evaluate ESG factors in a different manner. While
Blackstone believes ESG factors can enhance long term value,
Blackstone does not pursue an ESG based investment strategy or
limit its investments to those that meet specific ESG criteria or
standards, except with respect to products or strategies that are
explicitly designated as doing so in their Offering Documents or
other applicable governing documents. Any such ESG factors do not
qualify Blackstone's objectives to seek to maximize risk adjusted
returns. The ESG practices and initiatives mentioned in these
disclosures may not apply to some or all of the Company's
investments and none are binding aspects of the management of the
Company. The Company does not promote environmental or social
characteristics, nor does it have sustainable investments as its
objective.
ESG initiatives described in these
disclosures related to Blackstone's portfolio, portfolio companies,
and investments (collectively, "portfolio companies") are
aspirational and not guarantees or promises that all or any such
initiatives will be achieved. Statements about ESG initiatives or
practices related to portfolio companies do not apply in every
instance and depend on factors including, but not limited to, the
relevance or implementation status of an ESG initiative to or
within the portfolio company the nature and/or extent of investment
in, ownership of, control or influence exercised by Blackstone with
respect to the portfolio company and other factors as determined by
investment teams, corporate groups, asset management teams,
portfolio operations teams, companies, investments, and/or
businesses on a case by case basis. In particular, the ESG
initiatives or practices described in these disclosures are less
applicable to or not implemented at all with respect to
Blackstone's public markets investing businesses, specifically,
Credit, Hedge Fund Solutions (BXMA) and Harvest. In addition,
Blackstone will not pursue ESG initiatives for every portfolio
company. Where Blackstone pursues ESG initiatives for portfolio
companies, there is no guarantee that Blackstone will successfully
enhance long term Shareholder value and achieve financial returns.
There can be no assurance that any of the ESG initiatives described
in this report will exist in the future, will be completed as
expected or at all, or will apply to or be implemented uniformly
across Blackstone business units or across all portfolio companies
within a particular Blackstone business unit. Blackstone may select
or reject portfolio companies or investments on the basis of ESG
related investment risks, and this may cause Blackstone's funds
and/or portfolio companies to underperform relative to other
sponsors' funds and/or portfolio companies which do not consider
ESG factors at all or which evaluate ESG factors in a different
manner. Any selected investment examples, case studies and/or
transaction summaries presented or referred to in these disclosures
are provided for illustrative purposes only and should not be
viewed as representative of the present or future success of ESG
initiatives implemented by Blackstone or its portfolio companies or
of a given type of ESG initiatives generally. There can be no
assurances that Blackstone's investment objectives for any fund
will be achieved or that its investment programs will be
successful. Past performance is not a guarantee of future
results.
Blackstone Ireland Limited
19 September 2024
Strategic Overview
Principal Activities
The Company is a closed-ended
investment company incorporated on 30 April 2014 as a limited by
shares company under the Company (Jersey) Law 1991 with registered
number 115628. In addition, the Company constitutes and is
regulated as a collective investment fund under the Collective
Investment Funds (Jersey) Law 1988. The Company continues to be
registered and domiciled in Jersey. The Company's redeemable shares
are quoted on the Main Market of the LSE. Refer to page 24 of the 31 December 2023 Annual Report and
Audited Financial Statements for more details.
The Company has a wholly-owned
Luxemburg subsidiary, Blackstone / GSO Loan Financing (Luxembourg)
S.à r.l. which currently has an issued share capital of 2,000,000
Class A shares and 1 Class B share. As at 30 June 2024, 100% of the
Class A and Class B shares were held by the Company together with
190,371,884 Class B CSWs issued by the Lux Subsidiary. The Lux
Subsidiary invests in PPNs issued by BCF, which in turn invests in
CLOs and loans.
Investment Objective
Following the decision made by
Shareholders on 15 September 2023 to implement a managed wind-down
of the Company, the new investment objective of the Company is to
realise all existing assets in its portfolio in an orderly
manner.
Investment Policy
The Company will pursue its
investment objective by effecting an orderly realisation of its
assets by redeeming and/or by disposing for cash the PPNs issued by
BCF and held by the Company (indirectly through a subsidiary) (the
"LuxCo PPNs"). The Company will make timely returns of capital to
Shareholders principally by redeeming multiple portions of its
issued redeemable shares during the course of the managed wind-down
(or in such other manner as the Directors consider
appropriate).
The Company does not hold any
assets other than the LuxCo PPNs. Upon redemption of the LuxCo
PPNs, the Company will cease to make any new investments or to
undertake capital expenditure except as deemed necessary or
desirable by the Board in connection with the managed
wind-down.
Any amounts received by the
Company during the managed wind-down will be held by the Company as
cash on deposit and/or as cash equivalents, prior to returns being
made in cash to Shareholders (net of provisions for the Company's
costs and expenses).
Borrowings and
Derivatives
The Company will not undertake
borrowing other than for short-term working capital purposes. The
Company may use derivatives for hedging as well as for efficient
portfolio management.
Changes to the Company's
Investment Policy
Any material change to the
Company's new investment policy will be made only with the approval
of the Shareholders.
Redemption of redeemable shares
The Board implements the managed
wind-down by returning to Shareholders the net proceeds from the
realisation of the Company's investment in BCF in an orderly manner
by way of the compulsory redemption of redeemable shares (in
respect of proceeds received from BCF attributable to the early
redemption, maturity or sale of underlying investments or pursuant
to a disposal of the LuxCo PPNs for cash).
As part of the managed wind-down,
the Company, through the Lux Subsidiary, has delivered a redemption
request in accordance with the terms of the LuxCo PPNs. A pro-rata
portion of the assets and investments of BCF (including indirect
investments held through BCM LLC) has been placed into a redemption
pool (the "Redemption Pool"). As the assets in the Redemption Pool
redeem and are realised, the proceeds thereof, net of any actual or
reasonably anticipated liabilities, costs, expenses, debt service
of BCF, BCM LLC and the Lux Subsidiary and any actual or reasonably
anticipated costs, liabilities, margin or collateral requirements
related to hedging transactions entered by BCF, will be utilised to
redeem the LuxCo PPNs.
On 23 May 2024, the Company
announced its first return of capital which was paid to
shareholders on 24 June 2024. This return of capital was effected
by way of a compulsory partial redemption and cancellation of
24,779,135 redeemable shares at a rate of €0.9282 per redeemable
share on 10 June 2024.
The rate is determined by the
prevailing Published NAV per share at the time of announcement and
adjusted (including taking into account the attributable costs) as
the Directors consider appropriate.
On 19 July 2024, the Company
announced that it is evaluating another return of capital through
the compulsory redemption of redeemable shares by the end of
December 2024.
Having consulted with the
Portfolio Adviser, the Board continues to anticipate that the
redemption of the CLOs investments held in BCF and BCM LLC will
require a total period of approximately 7 years. However, this is
indicative only and it should not be considered a guarantee of the
Company's actual liquidity profile.
Refer to sections 3.1 and 3.2 of
the Circular for further details.
Directors' Interests
The Directors held the following
number of redeemable shares in the Company as at the period end and
the date these condensed interim financial statements were
approved:
|
Directors
|
As at 30 June
2024
|
As at 31 December
2023
|
|
Steven Wilderspin
|
18,881
|
20,000
|
|
Mark Moffat
|
728,409
|
771,593
|
|
Giles Adu
|
-
|
-
|
|
Belinda Crosby
|
-
|
-
|
Further to the announcement on 23
May 2024 in relation to the compulsory partial redemption of the
Company's redeemable shares, Mr Mark Moffat and Mr Steven
Wilderspin have had 43,184 and 1,119 redeemable shares redeemed
respectively on 10 June 2024.
Risk Overview
Each Director is aware of the risks
inherent in the Company's business and understands the importance
of identifying, evaluating and monitoring these risks. The Board
has adopted procedures and controls to enable it to manage these
risks within acceptable limits and to meet all of its legal and
regulatory obligations.
The Board considers the process
for identifying, evaluating and managing any significant risks
faced by the Company on an ongoing basis and these risks are
reported and discussed at Board meetings. It ensures that effective
controls are in place to mitigate these risks and that a
satisfactory compliance regime exists to ensure all applicable
local and international laws and regulations are upheld.
Risk Appetite
Following the vote by Shareholders
for a managed wind-down of the Company on 15 September 2023, the
Board's updated strategic risk appetite is to balance the amount
distributed by the Company with the retention of a prudent cash
buffer to cover ongoing operating expenses. The Board considers
that the retention of a cash buffer sufficient to cover an
estimated two years of operating expenses is an appropriate amount.
Future distributions will be by way of dividend, in line with the
sustainable dividend policy which will continue to be communicated
to Shareholders, and by the redemption of shares.
When considering other risks, the
Board's risk appetite is effectively governed by a cost benefit
analysis while assessing mitigation measures. At all times, the
Company will seek to follow best practice and remain compliant with
all applicable laws, rules and regulations.
Principal Risks and
Uncertainties
As recommended by the Risk
Committee, the Board has adopted a risk management framework to
govern how the Board identifies existing and emerging risks,
determines risk appetite, identifies mitigation and controls and
how the Board assesses, monitors, measures and reports on
risks.
The Board reviews risks at least
twice a year and receives deep-dive reports on specific risks as
recommended by the Risk Committee. Throughout the year under
review, the Board considered a set of sixteen main risks which have
a higher probability and a significant potential impact on
performance, strategy, reputation or operations (Category A risks).
Of these, the four risks identified below were considered the
principal risks faced by the Company where the combination of
probability and impact was assessed as being most
significant.
The Portfolio Adviser continues to
monitor the very small number of companies which the Company is
exposed to, that may be impacted by the current geopolitical
tensions in Europe and the Middle East. Opportunities have been
taken to trim the exposure, so it is now negligible.
The global macro-economic
environment continued to experience high levels of inflation and
interest rates during 2024. More recently, macro-economic
conditions have seen falls in inflation with market expectations of
a peak in interest rates having been reached. The Portfolio Adviser
has focused on positioning the underlying portfolio appropriately.
The Portfolio Adviser has closely monitored these positions and
managed their risk accordingly. The Board has considered risks
arising from the managed wind-down in its risk assessment. The
commentary below describes the factors affecting each of the
principal risks during the period:
|
Principal Risks
|
Description
|
|
Investment performance
|
Unsatisfactory investment
performance in absolute terms or relative to peers. Remained
heightened in the period given the macro-economic
environment.
|
|
Share price discount to NAV per redeemable
share
|
The existence of a share price
discount, particularly one that is wider than that of peers.
Remained heightened in the period with the discount in the range
28.35% to 36.97%.
|
|
Investment valuation
|
Error or misjudgment in valuation of
the Company's underlying CLO investments. Stable in the
period.
|
|
Operational
|
Reliance on service providers to
conduct the Company's operations and deliver its investment
strategy. Increased in the period with some staff turnover and
strategic pressures on key service providers.
|
Refer to pages 37 to 38 of the 31
December 2023 Annual Report and Audited Financial Statements for
the detailed commentary on each of the principal risks stated
above.
Going Concern
As the Company is in managed
wind-down, the condensed interim financial
statements have been prepared on a basis other than going concern.
Refer to Note 2.2 in the 'notes to the condensed interim financial
statements' for further details.
Other Information
Valuation Methodology
As noted above, the Published NAV
and the IFRS NAV may diverge because of different key assumptions
used to determine the valuation of the BCF portfolio. Key
assumptions which are different between the two bases as at 30 June
2024 and 31 December 2023 are detailed below:
|
Asset
|
Valuation Methodology
|
Input
|
IFRS
NAV
|
Published
NAV
|
IFRS
NAV
|
Published
NAV
|
|
|
|
|
30 June
2024
|
31 December
2023
|
|
CLO Securities
|
Discounted
Cash Flows
|
Constant Default
Rate[31]
|
2.00%
|
2.00%
|
2.00%
|
2.00%
|
|
|
|
Constant Prepayment
Rate
|
20.00%
|
25.00%
|
25.00%
|
25.00%
|
|
|
|
Reinvestment Spread (bp over
SOFR)
|
385.14
|
363.87
|
405.40
|
363.68
|
|
|
|
Recovery Rate Loans
|
65.00%
|
65.00%
|
65.00%
|
65.00%
|
|
|
|
Recovery Lag (Months)
|
-
|
-
|
-
|
-
|
|
|
|
Discount Rate[32]
|
18.01%
|
15.00%
|
25.91%
|
15.00%
|
All of the assumptions above are
based on weighted averages.
The below table further explains
the rationale regarding the differences in the assumptions that
significantly contributed to the valuation divergence as at 30 June
2024:
|
Assumption
|
IFRS NAV
|
|
Published
NAV
|
|
Reinvestment Spread
|
Largely weighted by a CLO's
current portfolio weighted average spread, which assumes that the
CLO investment manager will continue to reinvest in collateral with
a similar spread and rating composition to the existing collateral
pool. In addition, weighting may be given to primary loan spreads
to the extent current primary market opportunities suggest
different spreads than the existing portfolio.
|
|
Represents a normalised, long-term
view of loan spreads to be achieved over the life of the CLO's
remaining reinvestment period. Initially informed by the
underwriting model at issuance, the assumption is periodically
reviewed and updated to the extent of secular changes in loan
spreads.
|
|
Discount Rate
|
Intended to reflect the market
required rate of return for similar securities and is informed by
market research, BWICs, market colour for comparable transactions
and dealer runs. The discount rate may vary based on underlying
loan prices, exposure to distressed assets or industries, manager
performance and time remaining in reinvestment period.
|
|
Based on the expected rate of
return for a newly originated CLO equity security on a hold to
maturity basis. The expected rate of return is based on a long-term
market average and is periodically reviewed and updated to the
extent of secular changes in the market.
|
Alternative Investment Fund
Managers' Directive ("AIFMD")
The AIFMD requires certain
information to be made available to investors in AIFs before they
invest and requires that material changes to this information be
disclosed in the annual report of each AIF. There have been no
material changes (other than those reflected in these condensed
interim financial statements) to this information requiring
disclosure.
Alternative Performance
Measures ("APMs")
In accordance with ESMA Guidelines
on APMs, the Board has considered which APMs are included in the
Half Yearly Financial Report and require further clarification. An
APM is defined as a financial measure of historical or future
financial performance, financial position, or cash flows, other
than a financial measure defined or specified in the applicable
financial reporting framework. APMs included in the condensed
interim financial statements, which are unaudited and outside the
scope of IFRS, are detailed in the table below:
|
|
Published NAV Total Return
per Redeemable Share[33]
|
|
Published NAV per Redeemable
Share33
|
|
(Discount)/Premium to
Published NAV per Redeemable Share33
|
|
Definition
|
The increase in the Published NAV
per redeemable share plus the total dividends paid per redeemable
share during the period, with such dividends paid being re-invested
at NAV, as a percentage of the NAV per redeemable share as at
period end.
|
|
Gross assets less liabilities
(including accrued but unpaid fees) determined in accordance with
the section entitled "Net Asset Value" in Part I of the Company's
Prospectus, divided by the number of redeemable shares at the
relevant time.
|
|
BGLF's closing share price on the
LSE less the Published NAV per redeemable share as at the period
end, divided by the Published NAV per redeemable share as at that
date.
|
|
Reason
|
NAV total return summarises the
Company's true growth over time while taking into account both
capital appreciation and dividend yield.
|
|
The Published NAV per redeemable
share is an indicator of the intrinsic value of the
Company.
|
|
The discount or premium per
redeemable share is a key indicator of the discrepancy between the
market value and the intrinsic value of the Company.
|
|
Target
|
11%+
|
|
Not
applicable
|
|
Maximum
discount of 7.5%
|
|
Performance
|
|
|
|
|
|
|
2024
|
5.64%
|
|
0.9072
|
|
(28.35)%
|
|
2023
|
10.39%
|
|
0.9098
|
|
(35.15)%
|
|
2022
|
5.22%
|
|
0.9081
|
|
(26.77)%
|
|
2021
|
21.82%
|
|
0.9407
|
|
(15.75)%
|
|
2020
|
(0.22)%
|
|
0.8435
|
|
(20.57)%
|
|
2019
|
14.46%
|
|
0.9187
|
|
(10.20)%
|
A reconciliation of the APMs to
the most directly reconcilable line items presented in the
condensed interim financial statements for the six months ended 30
June 2024 and the year ended 31 December 2023 is presented
below:
Published NAV Total Return per Redeemable
Share
|
|
Six months
ended
30 June
2024
|
Year ended
31 December
2023
|
|
Opening Published NAV per
Redeemable Share (A)
|
€0.9098
|
€0.9081
|
|
Adjustments per Redeemable
Share (B)
|
€(0.1848)
|
€(0.2297)
|
|
Opening IFRS NAV per
Redeemable Share (C=A+B)
|
€0.7250
|
€0.6784
|
|
|
|
|
|
Closing Published NAV per
Redeemable Share (D)
|
€0.9072
|
€0.9098
|
|
Adjustments per Redeemable
Share (E)
|
€(0.0994)
|
€(0.1848)
|
|
Closing IFRS NAV per
Redeemable Share (F=D+E)
|
€0.8078
|
€0.7250
|
|
|
|
|
|
Dividends Paid during the
Period/Year (G)
|
€0.0525
|
€0.0875
|
|
|
|
|
|
Published NAV Total Return
per Redeemable Share
(H=(D-A+G)/A)
|
5.49%
|
9.82%
|
|
Impact of Dividend
Re-Investment (I)
|
0.15%
|
0.57%
|
|
Published NAV Total Return
per Redeemable Share with Dividends Re-invested
(J=H+I)
|
5.64%
|
10.39%
|
|
|
|
|
|
IFRS NAV Total Return per
Redeemable Share
(K=(F-C+G)/C)
|
18.66%
|
19.76%
|
|
Impact of Dividend
Re-Investment (L)
|
(0.60)%
|
(2.00)%
|
|
IFRS NAV Total Return per
Redeemable Share with Dividends Re-invested
(M=K+L)
|
18.06%
|
17.76%
|
Refer to Note 13 for further
details on the adjustments per redeemable share.
Published NAV per Redeemable Share
|
|
30 June
2024
|
31 December
2023
|
|
Published NAV per Redeemable
Share (A)
|
€0.9072
|
€0.9098
|
|
Adjustments per Redeemable
Share (B)
|
€(0.0994)
|
€(0.1848)
|
|
IFRS NAV per Redeemable Share
(C=A+B)
|
€0.8078
|
€0.7250
|
Refer to Note 13 for further
details on the adjustments per redeemable share.
Discount per Redeemable Share
|
|
30 June
2024
|
31 December
2023
|
|
Published NAV per Redeemable
Share (A)
|
€0.9072
|
€0.9098
|
|
Adjustments per Redeemable
Share (B)
|
€(0.0994)
|
€(0.1848)
|
|
IFRS NAV per Redeemable Share
(C=A-B)
|
€0.8078
|
€0.7250
|
|
|
|
|
|
Closing Share Price as at the
Period End per the LSE (D)
|
€0.6500
|
€0.5900
|
|
|
|
|
|
Discount to Published NAV per
Redeemable Share (E=(D-A)/A)
|
(28.35)%
|
(35.15)%
|
|
Discount to IFRS NAV per
Redeemable Share (F=(D-C)/C)
|
(19.53)%
|
(18.62)%
|
Refer to Note 13 for further details
on the adjustments per redeemable share.
Significant Events after the
Reporting Period
Dividends
On 19 July 2024, the Company
declared a dividend of €0.0225 per redeemable share in respect of
the period from 1 April 2024 to 30 June 2024. A total payment of
€9,404,095 was made on 6 September 2024.
Outlook
It is the Board's intention that
the Company will continue to pursue its new investment objective
and investment policy as detailed below, through an orderly managed
wind-down of the Company and return of cash to the Shareholders of
the Company, via redemption of shares while maintaining a
sustainable dividend payment. Further comments on the outlook for
the Company for the 2024 financial year and the main trends and
factors likely to affects its future development, performance and
position are contained within the Chair's Statement and the
Portfolio Adviser's Review.
Related Parties
There have been no material changes
to the nature of related party transactions as described in the 31
December 2023 Annual Report and Audited Financial Statements. Refer
to Note 14 for more information on related party
transactions.
The Directors are responsible for
preparing the Half Yearly Financial Report and condensed interim
financial statements in accordance with applicable law and
regulations.
The Directors confirm to the best of
their knowledge that:
·
the condensed interim financial statements within
the Half Yearly Financial Report have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU and
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company as at 30 June 2024, as
required by the UK's FCA's DTR 4.2.4R; and
·
the Strategic Report and the notes to the
condensed interim financial statements include a fair review of the
information required by:
i.
DTR 4.2.7R, being an indication of important events that have
occurred during the first six months ended 30 June 2024 and their
impact on the condensed interim financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
ii. DTR
4.2.8R, being related party transactions that have taken place in
the first six months ended 30 June 2024 and that have materially
affected the financial position or performance of the Company
during the period.
By order of the Board
|
Steven Wilderspin
|
Belinda Crosby
|
|
Director
|
Director
|
|
19 September 2024
|
19 September 2024
|
INDEPENDENT REVIEW REPORT TO BLACKSTONE LOAN FINANCING
LIMITED
Conclusion
We have been engaged by the
company to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2024
which comprises the condensed statement of comprehensive income,
condensed statement of financial position, condensed statement of
changes in equity, condensed statement of cash flows and related
notes 1 to 17.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 30 June 2024 is not prepared, in all material
respects, in accordance with EU adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in
accordance with International Standard on Review Engagements (UK)
2410 "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council for use in the United Kingdom (ISRE (UK) 2410). A
review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual
financial statements of the company are prepared in accordance with
EU adopted international accounting standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with EU adopted International
Accounting Standard 34, "Interim Financial Reporting".
Emphasis of matter - Financial statements prepared other than
on a going concern basis
We draw attention to note 2 in the
condensed set of financial statements, which indicates that the
condensed set of financial statements have been prepared on a basis
other than that of a going concern following the decision for the
managed wind-down of the company. Our conclusion is not modified in
respect of this matter.
Responsibilities of the directors
The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
In preparing the half-yearly
financial report, the directors are responsible for assessing the
company's ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly
financial report, we are responsible for expressing to the company
a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our Conclusion, including our
conclusion relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use of our report
This report is made solely to the
company in accordance with ISRE (UK) 2410. Our work has been
undertaken so that we might state to the company those matters we
are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company,
for our review work, for this report, or for the conclusions we
have formed.
Deloitte LLP
Statutory Auditor
St. Helier, Jersey
19 September 2024
CONDENSED STATEMENT OF FINANCIAL
POSITION
As at 30 June 2024 (Unaudited)
|
|
|
As at
30 June 2024
(unaudited)
|
As at
31 December 2023
(audited)
|
|
|
Notes
|
€
|
€
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
5,474,294
|
17,725,633
|
|
Prepayments
|
|
12,834
|
40,930
|
|
Financial assets at fair value
through profit or loss
|
5
|
335,239,413
|
305,994,558
|
|
Total assets
|
|
340,726,541
|
323,761,121
|
|
|
|
|
|
|
Intercompany loan
|
6
|
(2,498,091)
|
(2,161,082)
|
|
Payables
|
7
|
(579,881)
|
(612,939)
|
|
Total liabilities
|
|
(3,077,972)
|
(2,774,021)
|
|
|
|
|
|
|
Net assets
|
12,13
|
337,648,569
|
320,987,100
|
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
Stated capital
|
8
|
423,312,107
|
446,312,099
|
|
Retained loss
|
|
(85,663,538)
|
(125,324,999)
|
|
Shareholders' equity
|
|
337,648,569
|
320,987,100
|
|
|
|
|
|
|
NAV per redeemable share
|
12
|
0.8078
|
0.7250
|
These condensed interim financial
statements were authorised and approved for issue by the Directors
on 19 September 2024 and signed on their behalf by:
|
Steven Wilderspin
|
Belinda Crosby
|
|
Director
|
Director
|
The accompanying notes below form
an integral part of the condensed interim financial
statements.
CONDENSED STATEMENT OF
COMPREHENSIVE INCOME
For the six months ended 30 June 2024
(Unaudited))
|
|
|
Six months ended
30 June 2024
(unaudited)
|
Six months ended
30 June 2023
(unaudited)
|
|
|
Notes
|
€
|
€
|
|
Income
|
|
|
|
|
Realised (loss)/gain on foreign
exchange
|
|
(71)
|
9
|
|
Net gain on financial assets at
fair value through profit or loss
|
5
|
63,313,369
|
20,692,908
|
|
Bank interest income
|
|
313,238
|
81,873
|
|
Total income
|
|
63,626,536
|
20,774,790
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Operating expenses
|
3
|
(702,670)
|
(785,093)
|
|
Loan interest expense
|
6
|
(18,613)
|
(14,396)
|
|
Total expenses
|
|
(721,283)
|
(799,489)
|
|
|
|
|
|
|
Profit before taxation
|
|
62,905,253
|
19,975,301
|
|
Taxation
|
|
-
|
-
|
|
Profit after taxation
|
|
62,905,253
|
19,975,301
|
|
|
|
|
|
|
Total comprehensive income for the period attributable to
Shareholders
|
|
62,905,253
|
19,975,301
|
|
|
|
|
|
|
Basic and diluted earnings per redeemable/ordinary
share
|
11
|
0.1430
|
0.0451
|
The Company has no items of other
comprehensive income and therefore the profit for the period is
also the total comprehensive income.
All items in the above statement
are derived from continuing operations. No operations were acquired
or discontinued during the period.
The accompanying notes below form
an integral part of the condensed interim financial
statements.
CONDENSED STATEMENT OF CHANGES IN
EQUITY
For the six months ended 30 June 2024
(Unaudited)
|
|
|
Stated
capital
|
Retained
loss
|
Total
|
|
|
Notes
|
€
|
€
|
€
|
|
Shareholders' equity at 1 January 2024
|
|
446,312,099
|
(125,324,999)
|
320,987,100
|
|
Total comprehensive income for the
period attributable to Shareholders
|
|
-
|
62,905,253
|
62,905,253
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
Dividends
|
15
|
-
|
(23,243,792)
|
(23,243,792)
|
|
Redemption of redeemable
shares
|
8
|
(22,999,992)
|
-
|
(22,999,992)
|
|
|
|
(22,999,992)
|
(23,243,792)
|
(46,243,784)
|
|
|
|
|
|
|
|
Shareholders' equity at 30 June 2024
|
|
423,312,107
|
(85,663,538)
|
337,648,569
|
For the six months ended 30 June 2023
(Unaudited)
|
|
|
Stated
capital
|
Retained
loss
|
Total
|
|
|
Notes
|
€
|
€
|
€
|
|
Shareholders' equity at 1 January 2023
|
|
447,542,762
|
(145,927,785)
|
301,614,977
|
|
Total comprehensive income for the
period attributable to Shareholders
|
|
-
|
19,975,301
|
19,975,301
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
Dividends
|
15
|
-
|
(21,037,169)
|
(21,037,169)
|
|
Ordinary shares
repurchased
|
8
|
(1,230,662)
|
-
|
(1,230,662)
|
|
|
|
(1,230,662)
|
(21,037,169)
|
(22,267,831)
|
|
|
|
|
|
|
|
Shareholders' equity at 30 June 2023
|
|
446,312,100
|
(146,989,653)
|
299,322,447
|
The accompanying notes below form
an integral part of the condensed interim financial
statements.
CONDENSED STATEMENT OF CASH
FLOWS
For the six months ended 30 June 2024
(Unaudited)
|
|
|
Six months
ended
30 June
2024
(unaudited)
|
Six months
ended
30 June
2023
(unaudited)
|
|
|
Notes
|
€
|
€
|
|
Cash flow from operating activities
|
|
|
|
|
Profit before taxation
|
|
62,905,253
|
19,975,301
|
|
|
|
|
|
|
Adjustments to reconcile profit before taxation to net cash
flows:
|
|
|
|
|
- Unrealised gain on financial assets at fair value through
profit and loss
|
5
|
(47,690,233)
|
(10,909,291)
|
|
- Realised gain on financial assets at fair value through
profit and loss
|
5
|
(15,623,136)
|
(9,783,617)
|
|
Loan interest expense
|
6
|
18,613
|
14,396
|
|
Changes in working capital
|
|
|
|
|
Decrease in other
receivables
|
|
28,096
|
35,661
|
|
Decrease in payables
|
7
|
(51,671)
|
(162,953)
|
|
Net cash used in operating activities
|
|
(413,078)
|
(830,503)
|
|
|
|
|
|
|
Cash flow from investing activities
|
|
|
|
|
Proceeds from sale of financial
assets at fair value through profit or loss
|
5
|
34,068,514
|
24,888,816
|
|
Net cash generated from investing
activities
|
|
34,068,514
|
24,888,816
|
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
Ordinary shares
repurchased
|
8
|
-
|
(1,230,662)
|
|
Redemption of redeemable
shares
|
8
|
(22,999,992)
|
-
|
|
Increase in intercompany
loan
|
6
|
337,009
|
212,496
|
|
Dividends paid
|
15
|
(23,243,792)
|
(21,037,169)
|
|
Net cash used in financing activities
|
|
(45,906,775)
|
(22,055,335)
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents
|
|
(12,251,339)
|
2,002,978
|
|
|
|
|
|
|
Cash and cash equivalents at the
start of the period
|
|
17,725,633
|
6,259,400
|
|
Cash and cash equivalents at the end of the
period
|
|
5,474,294
|
8,262,378
|
The accompanying notes below form
an integral part of the condensed interim financial
statements.
NOTES TO THE CONDENSED INTERIM
FINANCIAL STATEMENTS
For the six months ended 30 June
2024
1
General information
The Company is a closed-ended
limited liability investment company domiciled and incorporated
under the laws of Jersey with variable capital pursuant to the
Collective Investment Funds (Jersey) Law 1988. It was incorporated
on 30 April 2014 under registration number 115628. The Company's
redeemable shares are quoted on the Main Market of the
LSE.
Following the decision made by
Shareholders on 15 September 2023 to implement a managed wind-down
of the Company, the investment objective of the Company, effective
from that date, is to realise all existing assets in the Company's
portfolio in an orderly manner.
On 11 December 2023, all ordinary
shares in issue were converted to redeemable shares and 1 deferred
share in the Company was issued. On 21 December 2023, the Company
cancelled all of the redeemable shares it held in
treasury.
As at 30 June 2024, the Company
had 417,959,768 (31 December 2023: 442,738,903) redeemable shares
in issue and 1 (31 December 2023: 1) deferred share. No treasury
shares were held as at 30 June 2024 and 31 December
2023.
The Company has a wholly owned
Luxemburg subsidiary, Blackstone / GSO Loan Financing (Luxembourg)
S.à r.l., which has an issued share capital of 2,000,000 Class
A shares and 1 Class B share held entirely by the Company as at 30
June 2024 and 31 December 2023. The Company also held 190,371,884
(31 December 2023: 208,565,744) Class B CSWs issued by the Lux
Subsidiary.
The Company's registered address
is IFC 1, The Esplanade, St Helier, Jersey, JE1 4BP, Channel
Islands.
2
Material accounting policy information
The material accounting policies
applied in the preparation of these condensed interim financial
statements are consistent with those used for the 31 December 2023
Annual Report and Audited Financial Statements and some are set out
below. Refer to Note 2 of the 31 December 2023 Annual Report and
Audited Financial Statements for further details on the material
accounting policies.
These policies have been applied
consistently throughout all the years presented, unless otherwise
stated.
2.1 Statement of
compliance
The Annual Report and Audited
Financial Statements are prepared in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority
and with International Financial Reporting Standards as adopted by
the EU. The condensed set of interim financial statements included
in this Half Yearly Financial Report has been prepared in
accordance with EU adopted International Accounting Standard 34
Interim Financial Reporting.
2.2 Going
concern
As the Company is in managed
wind-down, the condensed interim financial
statements have been prepared on a basis other than going
concern.
The Board continues to expect that
the managed wind-down of the Company to be over a total period of 7
years although this is not guaranteed. After making enquiries with
the Portfolio Adviser and supported by the Directors' current
assessment of the Company's ability to pay its debts as they fall
due for the foreseeable future, the Directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence until the anticipated managed wind-down of
the Company. The Directors will ensure that sufficient liquidity is
held back to ensure that liabilities are at all times adequately
covered.
2.3 Accounting
standards
New standards, amendments and interpretations issued and
effective for the financial year beginning 1 January
2024
The following new standards,
amendments or interpretations are effective for the financial year
beginning 1 January 2024 and the Directors do not consider that
these have a material impact on the Company's condensed interim
financial statements:
·
Non-current Liabilities with Covenants
and Classification of Liabilities as Current or Non-current -
Amendments to IAS 1 Presentation of Financial
Statements
·
Lease Liability in a Sale and Leaseback -
Amendments to IFRS 16 Leases
·
Supplier Finance Arrangements - Amendments to IAS
7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures
New standards, amendments and interpretations issued but not
effective for the financial year beginning 1 January 2024 and not
early adopted
The following standards become
effective in future accounting periods and have not been early
adopted by the Company and the Directors do not believe that the
application of these will have a material impact on the Company's
condensed interim financial statements:
·
Lack of Exchangeability - Amendments to IAS 21
The Effects of Changes in Foreign Exchange Rates (effective for
periods beginning on or after 1 January 2025)
·
IFRS 18 Presentation and Disclosure in
Financial Statements (effective for periods beginning on or after 1
January 2027)
·
Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture - Amendments to IFRS 10
Business Combinations and IAS 28 Investments in Associates and
Joint Ventures (effective date to be determined)
2.4 Critical accounting
judgements and estimates
The preparation of the condensed
interim financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that
affect items reported in the Condensed Statement of Financial
Position and Condensed Statement of Comprehensive Income. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. Uncertainty about these
assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets and
liabilities affected in future periods.
Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
estimates are recognised prospectively.
Estimates
(a)
Fair value
For the fair value of all
financial instruments held, the Company determines fair values
using appropriate techniques. Refer to above, Note 5 and Note 2.8
of the 31 December 2023 Annual Report and Audited Financial
Statements for further details on the significant estimates applied
in the valuation of the Company's financial instruments.
Judgements
(b)
Non-consolidation of the Lux Subsidiary
The Company meets the definition
of an investment entity as defined by IFRS 10 Consolidated
Financial Statements and is required to account for its investment
in the Lux Subsidiary at fair value through profit or
loss.
The Company has multiple unrelated
investors and holds multiple investments in the Lux Subsidiary. The
Company has been deemed to meet the definition of an investment
entity per IFRS 10 as the following conditions exist:
· the
Company has obtained funds for the purpose of providing investors
with investment management services;
· the
Company's business purpose, which has been communicated directly to
investors, is investing solely for returns from capital
appreciation, investment income, or both; and
· the
performance of investments made through the Lux Subsidiary are
measured and evaluated on a fair value basis.
The Company controls the Lux
Subsidiary through its 100% holding of the voting rights and
ownership. The Lux Subsidiary is incorporated in Luxembourg. Refer
to Note 9 for further disclosures relating to the Company's
interest in the Lux Subsidiary.
(c)
Non-consolidation of BCF
To determine control, there has to
be a linkage between power and the exposure to risks and rewards.
The main link from ownership would allow a company to control the
payments of returns and operating policies and decisions of a
subsidiary.
To meet the definition of a
subsidiary under the single control model of IFRS 10, the investor
has to control the investee. Control involves power, exposure to
variability of returns and a linkage between the two:
· the
investor has existing rights that give it the ability to direct the
relevant activities that significantly affect the investee's
returns;
· the
investor has exposure or rights to variable returns from its
involvement with the investee; and
· the
investor has the ability to use its power over the investee to
affect the amount of the investor's returns.
In the case of BCF, the relevant
activities are the investment decisions made by it. However, in the
Lux Subsidiary's case, the power to influence or direct the
relevant activities of BCF is not attributable to the Lux
Subsidiary. The Lux Subsidiary does not have the ability to direct
or stop investments by BCF; therefore, it does not have the ability
to control the variability of returns. Accordingly, BCF has been
determined not to be a subsidiary undertaking as defined under IFRS
10 Consolidated Financial Statements and the Lux Subsidiary's
investment in the PPNs issued by BCF are accounted for at fair
value through profit or loss.
3
Operating expenses
|
|
Six months
ended
30 June
2024
(unaudited)
|
Six months
ended
30 June
2023
(unaudited)
|
|
|
€
|
€
|
|
Administration fees
|
157,385
|
152,439
|
|
Directors' fees (see Note
4)
|
123,270
|
140,311
|
|
Professional fees
|
81,049
|
116,755
|
|
Audit of the Company
|
99,181
|
92,557
|
|
Audit related services - review of
interim financial report
|
93,016
|
85,604
|
|
Brokerage fees
|
71,260
|
68,900
|
|
Regulatory and listing
fees
|
31,295
|
28,536
|
|
Registrar fees
|
7,485
|
16,849
|
|
Sundry expenses
|
38,729
|
83,142
|
|
Total operating expenses
|
702,670
|
785,093
|
4
Directors' fees
The Company has no employees. The
Company incurred €123,270 (30 June 2023: €140,311) in Directors'
fees (consisting exclusively of short-term benefits) during the
period. No directors' fees were outstanding at 30 June 2024 and 31
December 2023. No pension contributions were payable in respect of
any of the Directors. Refer to above for details on the Directors'
interests.
5
Financial assets at fair value through profit or loss
|
|
As at
30 June
2024
(unaudited)
|
As at
31 December
2023
(audited)
|
|
|
€
|
€
|
|
Financial assets at fair value
through profit or loss
|
335,239,413
|
305,994,558
|
Financial assets at fair value
through profit or loss consist of 190,371,884 CSWs, 2,000,000 Class
A shares and 1 Class B share issued by the Lux Subsidiary (31
December 2023: 208,565,744
CSWs, 2,000,000 Class A shares and 1 Class B
share issued by the Lux Subsidiary). Refer to pages 78 to 79 in the
31 December 2023 Annual Report and Audited Financial Statements for
further details.
Fair value hierarchy
IFRS 13 Fair Value Measurement
requires an analysis of investments valued at fair value based on
the reliability and significance of information used to measure
their fair value.
The Company categorises its
financial assets according to the following fair value hierarchy
detailed in IFRS 13 Fair Value Measurement that reflects the
significance of the inputs used in determining their fair
values:
· Level 1:
Quoted market price (unadjusted) in an active
market for an identical instrument.
· Level 2:
Valuation techniques based on observable inputs,
either directly (i.e., as prices) or indirectly (i.e., derived from
prices). This category includes instruments valued using: quoted
market prices in active markets for similar instruments; quoted
prices for identical or similar instruments in markets that are
considered less than active; or other valuation techniques where
all significant inputs are directly or indirectly observable from
market data.
· Level 3:
Valuation techniques using significant
unobservable inputs. This category includes all instruments where
the valuation technique includes inputs not based on observable
data and the unobservable variable inputs have a significant effect
on the instrument's valuation. This category includes instruments
that are valued based on quoted prices for similar instruments
where significant unobservable adjustments or assumptions are
required to reflect differences between the instruments.
|
30 June 2024 (unaudited)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
€
|
€
|
€
|
€
|
|
Financial assets at fair value
through profit or loss
|
-
|
-
|
335,239,413
|
335,239,413
|
|
31 December 2023 (audited)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
€
|
€
|
€
|
€
|
|
Financial assets at fair value
through profit or loss
|
-
|
-
|
305,994,558
|
305,994,558
|
The Company determines the fair
value of the financial assets at fair value through profit or loss
using the unaudited IFRS NAV of both the Lux Subsidiary and
BCF.
The Company determines the fair
value of the CLOs held directly using third party valuations. The
Portfolio Adviser can challenge the marks if they appear off-market
or unrepresentative of fair value.
During the six months ended 30
June 2024 and the year ended 31 December 2023, there were no
reclassifications between levels of the fair value
hierarchy.
The Company's maximum exposure to
loss from its interests in the Lux Subsidiary and indirectly in BCF
is equal to the fair value of its investments in the Lux
Subsidiary.
Financial assets at fair value through profit or loss
reconciliation
The following table shows a
reconciliation of all movements in the fair value of financial
assets categorised within Level 3 between the start and the end of
the reporting period:
|
|
Six months ended 30 June
2024
|
Year ended
31 December
2023
|
|
|
€
|
€
|
|
Balance as at 1 January
|
305,994,558
|
297,721,169
|
|
Sale proceeds - CSWs
|
(34,068,514)
|
(52,820,196)
|
|
Realised gain on financial assets
at fair value through profit or loss - CSWs
|
15,623,136
|
21,406,810
|
|
Total change in unrealised gain on
financial assets for the period/year
|
47,690,233
|
39,686,775
|
|
Balance as at the end of the period/year
|
335,239,413
|
305,994,558
|
|
|
|
|
|
Realised gain on financial assets
at fair value through profit or loss
|
15,623,136
|
21,406,810
|
|
Total change in unrealised gain on
financial assets for the period/year
|
47,690,233
|
39,686,775
|
|
Net gain on financial assets at fair value through profit or
loss
|
63,313,369
|
61,093,585
|
Quantitative information of significant unobservable inputs
and sensitivity analysis to significant changes in unobservable
inputs - Level 3
The significant unobservable
inputs used in the fair value measurement of the financial assets
at fair value through profit or loss within Level 3 of the fair
value hierarchy together with a quantitative sensitivity analysis
as at 30 June 2024 and 31 December 2023 are as shown
below:
|
Asset class
|
Fair value
|
Unobservable
inputs
|
Ranges
|
Weighted
average
|
Sensitivity to changes in
significant unobservable inputs
|
|
|
€
|
|
|
|
|
|
CSWs
|
326,899,255
|
Undiscounted
NAV
of
BCF
|
N/A
|
N/A
|
20%
increase/decrease will have a fair value impact of +/-
€65,379,851
|
|
Class A and Class B
shares
|
8,340,158
|
Undiscounted NAV of the
Lux
Subsidiary
|
N/A
|
N/A
|
20%
increase/decrease will have a fair value impact of +/-
€1,668,032
|
|
Total as at 30 June 2024 (unaudited)
|
335,239,413
|
|
|
|
|
|
Asset Class
|
Fair Value
|
Unobservable
Inputs
|
Ranges
|
Weighted
average
|
Sensitivity to changes in
significant unobservable inputs
|
|
|
€
|
|
|
|
|
|
CSWs
|
298,050,226
|
Undiscounted NAV of
BCF
|
N/A
|
N/A
|
20%
increase/decrease will have a fair value impact of +/-
€59,610,045
|
|
Class A and Class B
shares
|
7,944,332
|
Undiscounted NAV of the
Lux
Subsidiary
|
N/A
|
N/A
|
20%
increase/decrease will have a fair value impact of +/-
€1,588,866
|
|
Total as at
31
December 2023 (audited)
|
305,994,558
|
|
|
|
|
6
Intercompany loan
|
|
As at
30 June
2024
(unaudited)
|
As at
31 December
2023
(audited)
|
|
|
€
|
€
|
|
Intercompany loan balance as at 1
January
|
2,161,082
|
1,694,077
|
|
Increase in intercompany
loan
|
337,009
|
467,005
|
|
Intercompany loan balance as the end of the
period/year
|
2,498,091
|
2,161,082
|
The intercompany loan - payable to
the Lux Subsidiary: is a revolving unsecured loan between the
Company and the Lux Subsidiary. The intercompany loan has a
maturity date of 13 September 2033 and is repayable at the option
of the Company up to the maturity date. Interest is accrued at a
rate of 1.6% per annum and is payable annually only when a written
request has been provided to the Company by the Lux Subsidiary.
During the period ended 30 June 2024, loan interest expense
incurred by the Company was €18,613 (30 June 2023:
€14,396).
7
Payables
|
|
As at
30 June
2024
(unaudited)
|
As at
31 December
2023
(audited)
|
|
|
€
|
€
|
|
Audit fees
|
198,395
|
196,700
|
|
Professional fees
|
126,747
|
124,076
|
|
Administration fees
|
81,268
|
79,553
|
|
Intercompany loan interest
payable
|
108,740
|
90,127
|
|
Other payables
|
64,731
|
122,483
|
|
Total payables
|
579,881
|
612,939
|
All payables are deemed to due
within the next twelve months.
8
Stated capital
Authorised
The authorised share capital of
the Company is represented by an unlimited number of shares of any
class at no par value.
Allotted, called up and
fully-paid
|
Redeemable shares
|
Number of
shares
|
Stated
capital
|
|
|
|
€
|
|
As at 1 January 2024
|
442,738,903
|
446,312,099
|
|
Redemption of redeemable
shares
|
(24,779,135)
|
(22,999,992)
|
|
Total redeemable shares as at 30 June 2024
(unaudited)
|
417,959,768
|
423,312,107
|
|
Ordinary/redeemable shares
|
Number of
shares
|
Stated
capital
|
|
|
|
€
|
|
As at 1 January 2023[34]
|
444,578,522
|
447,542,762
|
|
Shares repurchased during the
year
|
(1,839,619)
|
(1,230,663)
|
|
Total redeemable shares as at 31 December 2023
(audited)
|
442,738,903
|
446,312,099
|
Deferred share
As at 30 June 2024, the Company
has also 1 (31 December 2023: 1) deferred share, issued to CONJL
SPV Trustee 1 Limited.
Redemption of redeemable
shares
The Board implements the managed
wind-down by returning cash to the Shareholders by way of
compulsory redemption of redeemable shares.
During the period ended 30 June
2024, the Company made its first return of capital
to its Shareholders, by way of compulsory partial
redemption of redeemable shares, as detailed below:
|
Record date
|
Number of
Redeemable
Shares
Redeemed
|
Rate per
Redeemable
Share
|
Amount returned to
Shareholders
|
|
10 June 2024
|
24,779,135
|
€0.9282
|
€22,999,992
|
Refer to note 17 for detail of
redemptions of redeemable shares post the period end.
Voting rights
Redeemable shareholders have the
right to receive income and capital from assets attributable to
such class. Redeemable shareholders have the right to receive
notice of general meetings of the Company and have the right to
attend and vote at all general meetings.
Dividends
Refer to above for details on the
Company's dividend policy and dividends declared by the Board for
the six month period ended 30 June 2024 and Note 17 for dividends
declared after the period end.
Rights as to capital
On a winding up, the Company may,
with the sanction of a special resolution and any other sanction
required by the Companies Law, divide the whole or any part of the
assets of the Company among the Shareholders in specie provided
that no holder shall be compelled to accept any assets upon which
there is a liability. On return of assets on liquidation or capital
reduction or otherwise, the assets of the Company remaining after
payments of its liabilities shall subject to the rights of the
holders of other classes of shares, to be applied to the
Shareholders equally pro rata to their holdings of
shares.
Capital management
The Company is closed-ended and
has no externally imposed capital requirements. The Company's
capital as at 30 June 2024 comprises shareholders' equity at a
total of €337,648,569 (31 December 2023: €320,987,100). The
Company's objectives for managing capital during the six months
period to 30 June 2024 were to maintain sufficient liquidity to
meet the expenses of the Company, dividend commitments and
compulsory redemptions of redeemable shares.
The Board monitors the capital
adequacy of the Company on an on-going basis and the Company's
objectives regarding capital management have been met.
Refer to Note 9c Liquidity Risk in
the 31 December 2023 Annual Report and Audited Financial Statements
for further discussion on capital management, particularly on how
the distribution policy was managed.
9
Interests in other entities
Interests in unconsolidated
structured entities
IFRS 12 Disclosure of Interests in
Other Entities defines a structured entity as an entity that has
been designed so that voting or similar rights are not the dominant
factor in deciding who controls the entity, such as when any voting
rights relate to the administrative tasks only and the relevant
activities are directed by means of contractual
agreements.
Involvement with unconsolidated
structured entities
The Directors have concluded that
the CSWs and voting shares of the Lux Subsidiary in which the
Company invests, but that it does not consolidate, meet the
definition of a structured entity.
The Directors have also concluded
that BCF also meets the definition of a structured
entity.
The Directors have also concluded
that CLOs in which the Company invests, that are not subsidiaries
for financial reporting purposes, meet the definition of structured
entities because:
· the voting rights in the CLOs are not dominant rights in
deciding who controls them, as they relate to administrative tasks
only;
· each CLO's activities are restricted by its Prospectus;
and
· the CLOs have narrow and well-defined objectives to provide
investment opportunities to investors.
Interests in
subsidiary
As at 30 June 2024, the Company
owns 100% of the Class A and Class B shares in the Lux Subsidiary
comprising 2,000,000 Class A shares and 1 Class B share (31
December 2023: 2,000,000 Class A shares and 1 Class B
share).
The Lux Subsidiary's principal
place of business is Luxembourg.
Other than the investments noted
above, the Company did not provide any financial support for the
period ended 30 June 2024 and the year ended 31 December 2023, nor
had it any intention of providing financial or other
support.
The Company has an intercompany
loan payable to the Lux Subsidiary as at 30 June 2024 and 31
December 2023. Refer to Note 6 for further details.
10 Segmental
reporting
In accordance with IFRS 8
Operating Segments, the Board, which is the chief operating
decision maker, views the operations of the Company as one
operating segment, being the redeemable share
class[35] in
issue during the period ended 30 June 2024 and the year ended 31
December 2023.
During the period ended 30 June
2024 and the year ended 31 December 2023, the Company's primary
exposure was to the Lux Subsidiary in Europe. The Lux Subsidiary's
primary exposure is to BCF, an Irish entity. BCF's primary exposure
is to the US and Europe.
11 Basic and diluted
earnings per share
|
|
As at
30 June
2024
(unaudited)
|
As at
30 June 2023
(unaudited)
|
|
Total comprehensive income for the
period
|
€62,905,253
|
€19,975,301
|
|
Weighted average number of
redeemable/ordinary shares during the period[36]
|
440,000,877
|
442,889,811
|
|
Basic and diluted earnings per redeemable/ordinary
share
|
0.1430
|
0.0451
|
12 IFRS NAV per redeemable
share
|
As at
30 June
2024
(unaudited)
|
As at
31 December 2023
(audited)
|
|
IFRS NAV
|
€337,648,569
|
€320,987,100
|
|
Number of redeemable shares at
period and year end
|
417,959,768
|
442,738,903
|
|
IFRS NAV per redeemable share
|
0.8078
|
0.7250
|
13 Reconciliation of
Published NAV to IFRS NAV
|
As at
30 June
2024
(unaudited)
|
As at
31 December
2023
(audited)
|
|
|
NAV
|
NAV per
redeemable
share
|
NAV
|
NAV per
redeemable
share
|
|
|
€
|
€
|
€
|
€
|
|
Published NAV attributable to
Shareholders
|
379,153,386
|
0.9072
|
402,792,551
|
0.9098
|
|
Adjustment - valuation
|
(41,504,817)
|
(0.0994)
|
(81,805,451)
|
(0.1848)
|
|
IFRS NAV
|
337,648,569
|
0.8078
|
320,987,100
|
0.7250
|
As noted above, there can be a
difference between the Published NAV and the IFRS NAV per the
financial statements, because of the different bases of valuation
used. The above table reconciles the Published NAV to the IFRS NAV
per the condensed interim financial statements.
14 Related party
transactions
All transactions between related
parties were conducted on terms equivalent to those prevailing in
an arm's length transaction. In accordance with IAS 24 Related
Party Disclosures, the related parties and related party
transactions during the period comprised:
Transactions with entities with
significant influence
As at 30 June 2024, Blackstone
Treasury Asia Pte Ltd held 40,593,376 (31 December 2023:
43,000,000) redeemable shares in the Company.
Transactions with key management
personnel
The Directors are the key
management personnel as they are the persons who have the authority
and responsibility for planning, directing and controlling the
activities of the Company. The Directors are entitled to
remuneration for their services. Refer to Note 4 for further
details.
Transactions with other related
parties
At 30 June 2024, current employees
of the Portfolio Adviser and its affiliates and accounts managed or advised by
them, hold 39,036 redeemable shares (31 December 2023: 41,380)
which represents 0.009% (31 December 2023: 0.009%) of the issued
redeemable shares of the Company.
The Company has exposure to the
CLOs originated by BCF, through its investment in the Lux
Subsidiary. BIL is also appointed as a service support provider to
BCF and as the collateral manager to the Direct CLO Subsidiaries.
BLCS has been appointed as the collateral manager to BCM LLC,
Dorchester Park CLO Designated Activity Company and the Indirect
CLO Subsidiaries.
Transactions with
subsidiaries
The Company held 190,371,884 CSWs
as at 30 June 2024 (31 December 2023: 208,565,744) following the redemption of 18,193,860 (31
December 2023: 30,985,038) CSWs by the Lux
Subsidiary. Refer to Note 5 for further details.
As at 30 June 2024, the Company
held 2,000,000 Class A shares and 1 Class B share in the Lux
Subsidiary with a nominal value of €2,000,001 (31 December 2023:
2,000,000 Class A shares and 1 Class B share in the Lux Subsidiary
with a nominal value of €2,000,001).
As at 30 June 2024, the Company
also held an intercompany loan payable to the Lux Subsidiary
amounting to €2,498,091 (31 December 2023: €2,161,082).
15 Dividends
The Company declared and paid the
following dividends on redeemable shares during the six months
ended 30 June 2024:
|
Period in respect of
|
Date
declared
|
Ex-dividend
date
|
Payment
date
|
Amount per redeemable
share
|
Amount
paid
|
|
|
|
|
|
€
|
€
|
|
1 Oct 2023 to 31 Dec
2023
|
23 Jan
2024
|
1 Feb
2024
|
8 Mar
2024
|
0.0300
|
13,282,167
|
|
1 Jan 2024 to 31 Mar
2024
|
22 Apr
2024
|
2 May
2024
|
7 Jun
2024
|
0.0225
|
9,961,625
|
|
Total
|
|
|
|
|
23,243,792
|
The Company declared and paid the
following dividends on redeemable shares during the six months
ended 30 June 2023:
|
Period in respect of
|
Date
declared
|
Ex-dividend
date
|
Payment
date
|
Amount per ordinary
share
|
Amount
paid
|
|
|
|
|
|
€
|
€
|
|
1 Oct 2022 to 31 Dec
2022
|
23 Jan
2023
|
2 Feb
2023
|
3 Mar
2023
|
0.0275
|
12,182,391
|
|
1 Jan 2023 to 31 Mar
2023
|
25 Apr
2023
|
4 May
2023
|
2 Jun
2023
|
0.0200
|
8,854,778
|
|
Total
|
|
|
|
|
21,037,169
|
16 Controlling
party
In the Directors' opinion, the
Company has no ultimate controlling party.
17 Events after the
reporting period
The Board has evaluated subsequent
events for the Company through to 19 September 2024, the date the
condensed interim financial statements are available to be issued
and other than those listed below, concluded that there are no
material events that require disclosure or adjustment to the
condensed interim financial statements.
Dividends
On 19 July 2024, the Company
declared a dividend of €0.0225 per redeemable share in respect of
the period from 1 April 2024 to 30 June 2024. A total payment of
€9,404,095 was made on 6 September 2024.
COMPANY INFORMATION
|
Directors
|
|
Registered Office
|
|
Mr Steven Wilderspin
(Chair)
Ms Belinda Crosby (Audit
Chair)
Mr Mark Moffat
Mr Giles Adu
All c/o the Company's registered office
|
|
IFC 1
The Esplanade
St Helier
Jersey
JE1 4BP, Channel Islands
|
|
Portfolio Adviser
|
|
Registrar
|
|
Blackstone Ireland
Limited
30 Herbert Street
2nd Floor
Dublin 2, Ireland
|
|
Link Asset Services (Jersey)
Limited
12 Castle Street
St Helier
Jersey, JE2 3RT, Channel Islands
|
|
Administrator / Company Secretary
/ Custodian / Depositary / Banker
|
|
Auditor
|
|
BNP Paribas S.A., Jersey Branch
IFC 1
The Esplanade
St Helier
Jersey
JE1 4BP, Channel Islands
|
|
Deloitte LLP
Gaspé House
66-72 Esplanade
St Helier
JE2 3QT, Channel Islands
|
|
Legal Adviser to the Company (as
to Jersey Law)
|
|
Legal Adviser to the Company
(as to English Law)
|
|
Carey Olsen
47 Esplanade
St Helier
Jersey
JE1 0BD, Channel Islands
|
|
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London
EC2A 2EG, United Kingdom
|
|
Joint Broker
|
|
Joint Broker
|
|
Singer Capital Markets
1 Bartholomew Lane
London, EC2N 2AX , United Kingdom
|
|
Winterflood Investment
Trusts
The Atrium Building
Cannon Bridge House, 25 Dowgate
Hill
London, EC4R 2GA, United
Kingdom
|
GLOSSARY
|
AIC
|
The Association of Investment
Companies, of which the Company is a member
|
|
AIC Code
|
AIC Code of Corporate Governance
2019
|
|
AIFMD
|
Alternative Investment Fund
Managers' Directive
|
|
AIF
|
Alternative Investment
Funds
|
|
AML
|
Anti-money laundering
|
|
APMs
|
Alternative Performance
Measures
|
|
BCF
|
Blackstone Corporate Funding
Designated Activity Company
|
|
BCF Facility
|
BCF entered into a facility
agreement dated 1 June 2017, as amended between (1) BCF (as
borrower), (2) Citibank Europe plc, UK Branch (as administration
agent), (3) Bank of America N.A. London Branch (as an initial
lender), (4) BNP Paribas (as an initial lender), (5) Deutsche Bank
AG, London Branch (as initial lender), (6) Citibank N.A. London
Branch (as account bank, custodian and trustee) and (7) Virtus
Group LP (as collateral administrator)
|
|
BCM LLC
|
Blackstone CLO Management
LLC
|
|
BGLF or the Company
|
Blackstone Loan Financing
Limited
|
|
BGLP
|
Ticker for the Company's Sterling
Quote
|
|
BIL or the Portfolio
Adviser
|
Blackstone Ireland
Limited
|
|
BLCS
|
Blackstone Liquid Credit Strategies
LLC
|
|
Board
|
The Board of Directors of the
Company
|
|
Bp
|
Basis points
|
|
Brokers
|
Singer Capital Markets and
Winterflood Investment Trusts
|
|
BWIC
|
Bids Wanted In
Competition
|
|
BXCI
|
Blackstone Alternative Credit
Advisors LP , together with its corporate credit-focused affiliates
in the credit and insurance asset management business unit of
Blackstone Inc., as the context requires (but excluding, for the
avoidance of doubt, any insurance-focused asset management
affiliates)
|
|
CFT
|
Combating the financing of
terrorism
|
|
Circular
|
The circular dated 25 August 2023
published for the Shareholders on the LSE, containing details of
the proposals in respect of the managed wind-down. The Circular is
also available on the Company's website.
|
|
CSWs
|
Cash Settlement Warrants
|
|
CLO
|
Collateralised Loan
Obligation
|
|
CLO Warehouse
|
A special purpose vehicle
incorporated for the purposes of warehousing US and/or European
floating rate senior secured loans and bonds
|
|
Discount / Premium
|
Calculated as the NAV per
redeemable share as at a particular date less BGLF's closing share
price on the LSE, divided by the NAV per redeemable share as at
that date
|
|
Dividend yield
|
Calculated as the last four
quarterly dividends declared divided by the share price as at the
relevant date
|
|
DTR
|
Disclosure and Transparency
Rules
|
|
ECB
|
European Central Bank
|
|
ESG
|
Environmental, Social and
Governance
|
|
ESMA
|
The European Securities and
Markets
|
|
EU
|
European Union
|
|
FCA
|
Financial Conduct Authority
(UK)
|
|
Fed
|
Federal Reserve
|
|
FRC
|
Financial Reporting Council
(UK)
|
|
IAS
|
International Accounting
Standards
|
|
IFRS
|
International Financial Reporting
Standards
|
|
IFRS NAV
|
Gross assets less liabilities
(including accrued but unpaid fees) determined in accordance with
IFRS as adopted by the EU
|
|
IRR
|
Internal Rate of Return
|
|
LSE
|
London Stock Exchange
|
|
LTM
|
Last twelve months
|
|
Lux Subsidiary or LuxCo
|
Blackstone / GSO Loan Financing
(Luxembourg) S.à r.l.
|
|
NAV
|
Net asset value
|
|
NAV total return per redeemable
share
|
Calculated as the increase /
decrease in the NAV per redeemable share plus the total dividends
paid per redeemable share during the period, with such dividends
paid being re-invested at NAV, as a percentage of the NAV per
redeemable share
LTM return is calculated over the
year from 1 July 2023 to 30 June 2024
|
|
NIM
|
Net interest margin
|
|
PPNs
|
Profit Participating
Notes
|
|
Published NAV
|
Gross assets less liabilities
(including accrued but unpaid fees) determined in accordance with
the section entitled "Net Asset Value" in Part I of the Company's
Prospectus and published on a monthly basis
|
|
RTS
|
Regulatory technical
standards
|
|
SFDR
|
Sustainable Finance Disclosure
Regulation
|
|
SOFR
|
Secured Overnight Financing
Rate
|
|
TCFD
|
Task Force on Climate-related
Financial Disclosures
|
|
UBS
|
Union Bank of
Switzerland
|
|
UK
|
United Kingdom
|
|
UK Code
|
UK Corporate Governance Code
2018
|
|
US
|
United States
|
|
USD
|
United States Dollar
|
|
WA
|
Weighted Average
|