Blackstone Private Credit Fund
03/13/2026 | Press release | Distributed by Public on 03/13/2026 14:25
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
This section of this Form 10-K generally discusses 2025 and 2024 items and year to year comparisons between 2025 and 2024. For the discussion of 2024 compared to 2023 see "Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2024, which specific discussion is incorporated herein by reference. The information contained in this section should be read in conjunction with the consolidated financial statements and notes thereto in Part II, Item 8 of this Form 10-K "Financial Statements and Supplementary Data." This discussion contains forward-looking statements and involves numerous risks, uncertainties, and other factors outside of the Company's control, including, but not limited to those described in Part I, Item 1A of this Form 10-K "Risk Factors." Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" appearing elsewhere in this Form 10-K.
Overview and Investment Framework
We are an externally managed, non-diversified closed-end management investment company that has elected to be treated as a BDC under the 1940 Act. Formed as a Delaware statutory trust on February 11, 2020, we are externally managed by the Advisers, which are responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. Our Advisers are registered as investment advisers with the SEC. We have elected to be treated, and intend to qualify annually thereafter, as a RIC under the Code.
Under the Investment Advisory Agreement, we have agreed to pay the Adviser an annual management fee as well as an incentive fee based on our investment performance. The sub-advisory fees payable to the Sub-Adviser under the Sub-Advisory Agreement will be paid by the Adviser out of its own advisory fees rather than paid separately by us. Also, under the Administration Agreement, we have agreed to reimburse the Administrator for the allocable portion of certain expenses incurred by the Administrators in performing their obligations under the Administration Agreements, including our allocable portion of the costs of compensation and related expenses of our chief compliance officer, chief financial officer and their respective staffs.
Our investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. Under normal market conditions, we generally invest at least 80% of our total assets (net assets plus borrowings for investment purposes) in private credit investments (loans, bonds and other credit instruments that are issued in private offerings or issued by private companies). If we change our 80% test, we will provide shareholders with at least 60 days' notice of such change. Under normal circumstances we expect that the majority of our portfolio will be in privately originated and privately negotiated investments, predominantly direct lending to U.S. private companies through (i) first lien senior secured and unitranche loans (including first-out/last-out loans) and (ii) second lien, unsecured, subordinated or mezzanine loans and structured credit, as well as broadly syndicated loans (for which we may serve as an anchor investor), club deals (generally investments made by a small group of investment firms) and other debt and equity securities (the investments described in this sentence, collectively,
"Private Credit"). In limited instances, we may retain the "last out" portion of a first-lien loan. In such cases, the "first out" portion of the first lien loan would receive priority with respect to payment over our "last out" position. In exchange for the higher risk of loss associated with such "last out" portion, we would earn a higher rate of interest than the "first out" position. To a lesser extent, we will also invest in publicly traded securities of large corporate issuers. We expect that such investments will generally be liquid, and may be used for the purposes of maintaining liquidity for our share repurchase program and cash management, while also presenting an opportunity for attractive investment returns.
Most of our investments are in U.S. private companies, but (subject to compliance with BDCs' requirement to invest at least 70% of its assets in U.S. private companies), we also expect to invest to some extent in European and other non-U.S. companies, butwedo not expect to invest in emerging markets. We may invest in companies of any size or capitalization. Subject to the limitations of the 1940 Act, we may invest in loans or other securities, the proceeds of which may refinance or otherwise repay debt or securities of companies whose debt is owned by other Blackstone Credit & Insurance funds. We generally will co-invest with other Blackstone Credit & Insurance funds.
Key Components of Our Results of Operations
Investments
We focus primarily on loans and securities, including syndicated loans, of private U.S. companies. Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to private companies, the level of merger and acquisition activity for such companies, the general economic environment, trading prices of loans and other securities and the competitive environment for the types of investments we make.
Revenues
We generate revenues in the form of interest income on debt investments, capital gains, and dividend income from our equity investments in our portfolio companies. Our senior and subordinated debt investments are expected to bear interest at a fixed or floating rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid PIK interest generally will become due at the maturity date. In addition, we may generate revenue in the form of commitment and other fees in connection with transactions. Original issue discounts and market discounts or premiums will be capitalized, and we will accrete or amortize such amounts as interest income. We will record prepayment premiums on loans and debt securities as interest income. Dividend income on preferred equity securities is recorded on an accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities and on our equity interests in joint ventures is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.
In addition, we generate revenue in the form of commitment, loan origination, structuring or diligence fees, fees for providing managerial assistance to our portfolio companies, and possibly consulting fees.
Expenses
Except as specifically provided below, all investment professionals and staff of the Advisers, when and to the extent engaged in providing investment advisory services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Advisers. We bear all other costs and expenses of our operations, administration and transactions, including (a) investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Investment Advisory Agreement; (b) our allocable portion of compensation and other expenses incurred by the Administrators in performing their administrative obligations under the Administration Agreements, including: (i) our chief compliance officer, chief financial officer and their respective staffs; (ii) investor relations, legal, operations and other non-investment professionals (including information technology professionals) at the Administrators that perform duties for us; and (iii) any internal audit group personnel of Blackstone or any of its affiliates, subject to the limitations described in the Advisory Agreements and the Administration Agreements; and (c) all other expenses of our operations, administrations and transactions.
From time to time, the Advisers, the Administrators or their respective affiliates may pay third-party providers of goods or services on our behalf. We will reimburse the Adviser, the Administrator or such affiliates thereof, the Adviser will reimburse the Sub-Adviser, the Administrator or such affiliates thereof, and the Administrator will reimburse the Sub-Administrator or such affiliates thereof, in each case, for any such amounts paid on our behalf. From time to time, the Advisers or the Administrators may defer or waive fees or rights to be reimbursed for expenses. All of the foregoing expenses will ultimately be borne by our shareholders.
Expense Support and Conditional Reimbursement Agreement
We have entered into an Expense Support Agreement with the Sub-Adviser. For additional information see "Item 8. Financial Statements and Supplementary Data -Notes to Consolidated Financial Statements-Note 3. Fees, Expenses, Agreements and Related Party Transactions."
Portfolio and Investment Activity
For the year ended December 31, 2025, we made $30,088.4 million aggregate principal amount of new investment commitments ($8,217.4 million of which remained unfunded as of December 31, 2025), $26,863.3 million of which was first lien debt, $722.9 million of which was second lien debt, $35.0 million of which was unsecured debt, $147.4 million of which was structured finance debt obligations, $337.6 million of which was structured finance equity obligations and $1,982.2 million of which was equity and other.
Our investment activity is presented below (information presented herein is at amortized cost unless otherwise indicated) (dollar amounts in thousands):
| As of and for the year ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Investments: | ||||||||||||||||||||
| Total investments, beginning of period | $ | 68,985,671 | $ | 51,021,723 | $ | 49,935,296 | ||||||||||||||
| New investments purchased | 25,695,748 | 25,250,002 | 7,536,897 | |||||||||||||||||
| Payment-in-kind interest capitalized | 459,798 | 366,024 | 236,822 | |||||||||||||||||
| Net accretion of discount on investments | 264,926 | 215,203 | 172,875 | |||||||||||||||||
| Net realized gain (loss) on investments | (201,758) | (176,654) | (308,564) | |||||||||||||||||
| Investments sold or repaid | (12,288,144) | (7,690,627) | (6,551,603) | |||||||||||||||||
| Total investments, end of period | $ | 82,916,241 | $ | 68,985,671 | $ | 51,021,723 | ||||||||||||||
| Amount of investments funded at principal: | ||||||||||||||||||||
| First lien debt | $ | 23,096,521 | $ | 22,756,183 | $ | 7,482,700 | ||||||||||||||
| Second lien debt | 758,658 | 1,664,474 | 85,438 | |||||||||||||||||
| Unsecured debt | 35,000 | 159,976 | 18,733 | |||||||||||||||||
| Structured finance obligations - debt instruments | 147,377 | 255,007 | 67,540 | |||||||||||||||||
| Structured finance obligations - equity instruments | 285,198 | 185,530 | - | |||||||||||||||||
| Equity and Other | 1,651,281 | 466,140 | 88,964 | |||||||||||||||||
| Total | $ | 25,974,035 | $ | 25,487,310 | $ | 7,743,375 | ||||||||||||||
| Proceeds from investments sold or repaid: | ||||||||||||||||||||
| First lien debt | $ | (11,488,771) | $ | (6,680,425) | $ | (6,064,022) | ||||||||||||||
| Second lien debt | (322,968) | (670,943) | (256,812) | |||||||||||||||||
| Unsecured debt | (9,409) | - | (14,616) | |||||||||||||||||
| Structured finance obligations - debt instruments | (228,957) | (115,749) | (31,728) | |||||||||||||||||
| Structured finance obligations - equity instruments | (39,648) | (20,575) | - | |||||||||||||||||
| Equity and Other | (198,391) | (202,935) | (184,425) | |||||||||||||||||
| Total | $ | (12,288,144) | $ | (7,690,627) | $ | (6,551,603) | ||||||||||||||
| As of December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Number of portfolio companies | 700 | 603 | 503 | |||||||||||||||||
|
Weighted average yield on performing debt and income producing investments, at amortized cost (1)(2)
|
9.2 | % | 10.1 | % | 11.7 | % | ||||||||||||||
|
Weighted average yield on performing debt and income producing investments, at fair value (1)(2)
|
9.3 | % | 10.2 | % | 11.8 | % | ||||||||||||||
|
Average loan to value (LTV) (3)
|
45.9 | % | 42.8 | % | 43.7 | % | ||||||||||||||
|
Percentage of performing debt investments bearing a floating rate (4)
|
99.7 | % | 99.7 | % | 99.9 | % | ||||||||||||||
|
Percentage of assets on non-accrual, at amortized cost (5)
|
0.6 | % | 0.5 | % | 0.1 | % | ||||||||||||||
(1)Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts or less the annual amortization of premiums, as applicable, on accruing debt included in such securities, divided by (b) total debt investments (at fair value or amortized cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(2)As of December 31, 2025, 2024 and 2023, the weighted average total portfolio yield at amortized cost was 9.1%, 9.5% and 11.0%, respectively. As of December 31, 2025, 2024 and 2023, the weighted average total portfolio yield at fair value was 9.2%, 9.6% and 11.1%, respectively.
(3)Includes all debt investments for which fair value is determined by our Board in conjunction with a third-party valuation firm and excludes quoted investments and asset-based investments. Average loan-to-value represents the net ratio of loan-to-value for each portfolio company, weighted based on the fair value of total applicable debt investments. Loan-to-value is calculated as the current total net debt through each respective loan tranche divided by the estimated enterprise value of the portfolio company as of the most recent quarter-end.
(4)As a percentage of total fair value of performing debt investments. As of December 31, 2025, 2024 and 2023, performing debt investments bearing a floating rate represented 95.3%, 97.2% and 98.1%, respectively, of total investments at fair value (excluding investments in joint ventures).
(5)As a percentage of total amortized cost of investments (excluding investments in joint ventures). Investments on non-accrual represented 0.4%, 0.2% and less than 0.1% of total investments at fair value (excluding investments in joint ventures) as of December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025 and 2024, our portfolio companies had a weighted average annual EBITDA of $264 million and $234 million, respectively. These calculations include all debt investments for which fair value is determined by the Board in conjunction with a third-party valuation firm and excludes quoted investments and asset-backed investments. Amounts are weighted based on the fair market value of each respective investment. Amounts were derived from the most recently available portfolio company financial statements, have not been independently verified by us, and may reflect a normalized or adjusted amount. Accordingly, we make no representation or warranty in respect of this information.
For additional information on our investments, see "Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note 4. Investments."
BCRED Emerald JV LP
BCRED Emerald JV LP ("Emerald JV"), a Delaware limited partnership, was formed as a joint venture between the Company and a large North American pension fund (the "Emerald JV Partner"), commenced operations on January 18, 2022 and operates under a limited partnership agreement. The Emerald JV's principal purpose is to make investments, primarily in senior secured loans that are made to middle-market companies or in broadly syndicated loans.
As of December 31, 2025, the Company and the Emerald JV Partner committed to contribute up to $2,250.0 million and $750.0 million, of capital, respectively, to the Emerald JV. As of December 31, 2025, the Company had contributed (net of returns of capital) $1,815.0 million and the Emerald JV Partner had contributed (net of returns of capital) $605.0 million and $435.0 million of capital remained uncalled from the Company and $145.0 million of capital remained uncalled from the Emerald JV Partner. The Company and the Emerald JV Partner own 75% and 25%, respectively, of the equity ownership interests of the Emerald JV. The Company and the Emerald JV Partner, through their joint control of the Emerald JV's general partner, have equal control of the Emerald JV's investment decisions, the decision to call additional capital up to the amounts committed by the Company and the Emerald JV Partner, the decision to return capital or to make distributions, and generally all other decisions in respect of the Emerald JV must be approved by the Emerald JV's investment committee or board of directors, each of which consists of an equal number of representatives of the Company and the Emerald JV Partner. The Company does not consolidate the Emerald JV.
The following table is a summary of Emerald JV's portfolio as of December 31, 2025, December 31, 2024 and December 31, 2023:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||
| Total investments, at fair value | $ | 6,496,980 | $ | 5,647,024 | $ | 5,325,685 | ||||||||||||||
| Total senior secured debt investments, at fair value | $ | 6,471,011 | $ | 5,544,430 | $ | 5,187,161 | ||||||||||||||
| Number of portfolio companies | 361 | 275 | 272 | |||||||||||||||||
|
Weighted average yield on performing debt and income producing investments, at amortized cost (1)(2)
|
8.2 | % | 9.0 | % | 11.4 | % | ||||||||||||||
|
Weighted average yield on performing debt and income producing investments, at fair value (1)(2)
|
8.4 | % | 9.2 | % | 11.5 | % | ||||||||||||||
|
Percentage of performing debt investments bearing a floating rate (3)
|
99.9 | % | 99.9 | % | 99.8 | % | ||||||||||||||
|
Percentage of assets on non-accrual, at amortized cost (4)
|
0.7 | % | 1.6 | % | 0.1 | % | ||||||||||||||
(1)Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts or less the annual amortization of premiums, as applicable, on accruing debt included in such securities, divided by (b) total debt investments (at fair value or amortized cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(2)As of December 31, 2025, 2024 and 2023, the weighted average total portfolio yield at amortized cost was 8.0%, 8.8% and 11.2%, respectively. As of December 31, 2025, 2024 and 2023, the weighted average total portfolio yield at fair value was 8.3%, 9.0% and 11.2%, respectively.
(3)As a percentage of total fair value of performing debt investments. As of December 31, 2025, 2024 and 2023, performing debt investments bearing a floating rate represented 98.9%, 98.0% and 97.1%, respectively, of total investment at fair value.
(4)As a percentage of total amortized cost of investments of Emerald JV. Assets on non-accrual represented 0.6%, 1.4% and 0.1% of total investments at fair value of Emerald JV as of December 31, 2025, 2024 and 2023, respectively.
BCRED Verdelite JV LP
BCRED Verdelite JV LP ("Verdelite JV"), a Delaware limited partnership, was formed as a joint venture between the Company and an entity managed by an alternative credit management investment firm with a specialized focus on structured and syndicated credit, including CLO management (the "Verdelite JV Partner"), commenced operations on October 21, 2022 and operates under a limited partnership agreement. The Verdelite JV's principal purpose is to make investments, primarily in broadly syndicated loans.
As of December 31, 2025, the Company and the Verdelite JV Partner committed to contribute up to $147.0 million and $21.0 million of capital, respectively, to the Verdelite JV. As of December 31, 2025, the Company had contributed (net of returns of capital) $117.7 million and the Verdelite JV Partner had contributed (net of returns of capital) $16.8 million and $29.3 million of capital remained uncalled from the Company and $4.2 million of capital remained uncalled from the Verdelite JV Partner. The Company and the Verdelite JV Partner own 87.5% and 12.5%, respectively, of the equity ownership interests of the Verdelite JV. The Company and the Verdelite JV Partner, through their joint control of the Verdelite JV's general partner, have equal control of the Verdelite JV's investment decisions, the decision to call additional capital up to the amounts committed by the Company and the Verdelite JV Partner, the decision to return capital or to make distributions, and generally all other decisions in respect of the Verdelite JV must be approved by the Verdelite JV's investment committee or board of directors, each of which consists of an equal number of representatives of the Company and the Verdelite JV Partner. The Company does not consolidate the Verdelite JV.
The following table is a summary of Verdelite JV's portfolio as of December 31, 2025, December 31, 2024 and December 31, 2023:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||
| Total investments, at fair value | $ | 714,200 | $ | 650,532 | $ | 591,886 | ||||||||||||||
| Total senior secured debt investments, at fair value | $ | 714,200 | $ | 650,532 | $ | 591,886 | ||||||||||||||
|
Number of portfolio companies
|
281 | 240 | 192 | |||||||||||||||||
|
Weighted average yield on performing debt and income producing investments, at amortized cost (1)(2)
|
6.8 | % | 7.2 | % | 9.8 | % | ||||||||||||||
|
Weighted average yield on performing debt and income producing investments, at fair value (1)(2)
|
6.9 | % | 7.1 | % | 9.7 | % | ||||||||||||||
|
Percentage of performing debt investments bearing a floating rate (3)
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||
|
Percentage of assets on non-accrual, at amortized cost(4)
|
- | % | - | % | - | % | ||||||||||||||
(1)Computed as (a) the annual stated interest rate or yield plus the annual accretion of discounts or less the annual amortization of premiums, as applicable, on accruing debt included in such securities, divided by (b) total debt investments (at fair value or amortized cost, as applicable) included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.
(2)As of December 31, 2025, 2024 and 2023, the weighted average total portfolio yield at amortized cost was 6.8%, 7.2% and 9.8%, respectively. As of December 31, 2025, 2024 and 2023, the weighted average total portfolio yield at fair value was 6.9%, 7.1% and 9.7%, respectively.
(3)As a percentage of total fair value of performing debt investments. As of December 31, 2025, 2024 and 2023, performing debt investments bearing a floating rate represented 100.0%, 100.0% and 100.0%, respectively, of total investment at fair value.
(4)As a percentage of total amortized cost of investments of Verdelite JV. Verdelite JV had no assets on non-accrual as of December 31, 2025, 2024 and 2023.
For additional information on the Emerald JV and Verdelite JV, including a listing of portfolio investments for each, see "Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note 11. Joint Ventures."
Results of Operations
The following table represents the operating results (dollar amounts in thousands):
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Total investment income | $ | 7,589,581 | $ | 6,694,692 | $ | 5,738,009 | ||||||||||||||
| Total expenses before tax expense | 3,303,314 | 2,952,489 | 2,646,721 | |||||||||||||||||
| Net investment income before tax expense | 4,286,267 | 3,742,203 | 3,091,288 | |||||||||||||||||
| Excise and other tax expense | 21,390 | 33,724 | 32,826 | |||||||||||||||||
| Net investment income after tax expense | 4,264,877 | 3,708,479 | 3,058,462 | |||||||||||||||||
| Net change in unrealized appreciation (depreciation), net of income tax (provision) benefit | (522,906) | (97,287) | 615,705 | |||||||||||||||||
| Net realized gain (loss), net of tax expense | (372,802) | (126,664) | (310,984) | |||||||||||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 3,369,169 | $ | 3,484,528 | $ | 3,363,183 | ||||||||||||||
Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including acquisitions, the level of new investment commitments, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. As a result, comparisons may not be meaningful.
Investment Income
Investment income was as follows (dollar amounts in thousands):
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Interest income | $ | 6,727,896 | $ | 6,012,032 | $ | 5,196,090 | ||||||||||||||
| Payment-in-kind interest income | 467,495 | 385,285 | 220,889 | |||||||||||||||||
| Dividend income | 357,979 | 282,476 | 317,749 | |||||||||||||||||
| Non-cash dividend income | 13,873 | - | - | |||||||||||||||||
| Other income | 22,338 | 14,899 | 3,281 | |||||||||||||||||
| Total investment income | $ | 7,589,581 | $ | 6,694,692 | $ | 5,738,009 | ||||||||||||||
Total investment income increased to $7.6 billion for the year ended December 31, 2025, an increase of $894.9 million or 13% compared to the year ended December 31, 2024. This was primarily attributable to an increase in the average investments, partially offset by a lower weighted average yield on the portfolio compared to the year ended December 31, 2024. Average investments at fair value increased by 28% to $73,784.5 million for the year ended December 31, 2025, compared to $57,778.6 million for the year ended December 31, 2024.
Additionally, for the year ended December 31, 2025, we recorded $93.9 million of non-recurring interest income (e.g., prepayment premiums, accelerated accretion of upfront loan origination fees and unamortized discounts, etc.) as compared to $51.6 million in the prior year, primarily as a result of increased prepayments.
For the years ended December 31, 2025 and 2024, PIK interest and non-cash dividend income represented 6.3% and 5.8% of total investment income, respectively, and represented 11.3% and 10.4% of net investment income, respectively. We expect that PIK interest and non-cash dividend income will vary based on the elections of certain borrowers.
We expect that investment income will vary based on a variety of factors including the pace of our originations, repayments and changes in interest rates.
Elevated interest rates continued to favorably impact our investment income for the year ended December 31, 2025. Despite gradual decreases in interest rates during 2025, inflation has remained above the U.S. Federal Reserve's target level, and interest rates remain elevated. Following three consecutive rate cuts, the U.S. Federal Reserve held interest rates steady in January 2026 and noted, among other matters, that it would continue to assess and monitor incoming information in considering additional adjustments. Future decreases in benchmark interest rates may adversely impact our investment income. Conversely, future increases in benchmark interest rates and the resulting impacts to cost of capital have the potential to negatively impact the free cash flow and credit quality of certain borrowers which could impact their ability to make principal and interest payments. If such interest rate fluctuations occur concurrently with a period of economic weakness or a slowdown in growth, our borrowers' and our portfolio performance may be negatively impacted. Further, significant market dislocation as a result of changing economic conditions could limit the liquidity of certain assets traded in the credit markets, and this could impact our ability to sell such assets at attractive prices or in a timely manner.
Expenses
Expenses were as follows (dollar amounts in thousands):
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Interest expense | $ | 1,931,919 | $ | 1,838,600 | $ | 1,759,437 | ||||||||||||||
| Management fees | 566,571 | 432,447 | 316,238 | |||||||||||||||||
| Income based incentive fees | 626,689 | 543,693 | 446,922 | |||||||||||||||||
|
Capital gains based incentive fees
|
- | - | - | |||||||||||||||||
| Distribution and shareholder servicing fees | ||||||||||||||||||||
| Class S | 120,362 | 96,127 | 68,878 | |||||||||||||||||
| Class D | 1,588 | 1,246 | 1,117 | |||||||||||||||||
| Professional fees | 8,350 | 11,925 | 20,114 | |||||||||||||||||
| Board of Trustees' fees | 942 | 895 | 913 | |||||||||||||||||
| Administrative service expenses | 11,368 | 6,716 | 6,729 | |||||||||||||||||
| Other general and administrative expenses | 31,372 | 16,989 | 23,120 | |||||||||||||||||
| Amortization of continuous offering costs | 4,153 | 3,851 | 3,253 | |||||||||||||||||
| Total expenses before tax expense | 3,303,314 | 2,952,489 | 2,646,721 | |||||||||||||||||
| Net investment income before tax expense | 4,286,267 | 3,742,203 | 3,091,288 | |||||||||||||||||
| Excise and other tax expense | 21,390 | 33,724 | 32,826 | |||||||||||||||||
| Net investment income after tax expense | $ | 4,264,877 | $ | 3,708,479 | $ | 3,058,462 | ||||||||||||||
Interest Expense
Total interest expense increased to $1,931.9 million for the year ended December 31, 2025, an increase of $93.3 million or 5% compared to the year ended December 31, 2024. This was primarily driven by an increase in our average principal of debt outstanding, partially offset by a decrease in our weighted average interest rate on our borrowings relative to the prior year.
The average principal of debt outstanding increased to $31,044.6 million for the year ended December 31, 2025 from $25,294.0 million in the prior year. Our weighted average interest rate (including unused fees, amortization of debt issuance costs (including premiums and discounts), and the impact of the application of hedge accounting and excluding amortization of deferred financing costs) decreased to 6.11% for the year ended December 31, 2025 from 7.13% for the prior year. Our weighted average all-in cost of debt (including unused fees, amortization of debt issuance costs (including premiums and discounts), amortization of deferred financing costs, and the impact of the application of hedge accounting) decreased to 6.22% for the year ended December 31, 2025 from 7.27% for the prior year.
Management Fees
Management fees increased to $566.6 million for the year ended December 31, 2025, an increase of $134.1 million or 31% compared to the year ended December 31, 2024, primarily due to an increase in weighted average net assets to $45,472.6 million for the year ended December 31, 2025 compared to $34,749.8 million for the year ended December 31, 2024.
Income Based Incentive Fees
Income based incentive fees increased to $626.7 million for the year ended December 31, 2025, an increase of $83.0 million or 15% compared to the year ended December 31, 2024, primarily due to an increase in pre-incentive fee net investment income. Pre-incentive fee net investment income increased to $5,013.5 million for the year ended December 31, 2025 from $4,349.5 million for the year ended December 31, 2024.
Capital Gains Based Incentive Fees
We accrued no capital gains based incentive fees for the years ended December 31, 2025 and 2024.
The accrual for any capital gains based incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less in the prior period. If such cumulative amount is negative, then there is no accrual.
Other Expenses
Total other expenses increased to $178.1 million for the year ended December 31, 2025, an increase of $40.4 million or 29% compared to the year ended December 31, 2024. Total other expenses for the year ended December 31, 2025 primarily consist of $122.0 million of shareholder servicing and/or distribution fees paid with respect to Class S and Class D investors, $31.4 million of general and administrative expenses (including insurance, filing, research, fees paid to the State Street Sub-Administrator and transfer agent, and other expenses), $11.4 million of administrative service expenses, and $8.4 million of professional fees (including legal, rating agencies, audit, tax, valuation, technology and other professional fees related to management of the Company). The increase compared to the prior year was primarily driven by the costs attributable to increased subscriptions to our Class S and Class D shares.
Income Taxes, Including Excise Taxes
We elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for and maintain tax treatment as a RIC, we must, among other things, distribute to our shareholders in each taxable year generally at least 90% of the sum of our investment company taxable income, as defined by the Code (without regard to the deduction for dividends paid), and net tax-exempt income for that taxable year.
Depending on the level of taxable income earned in a tax year, we may carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, we will accrue excise tax on estimated excess taxable income.
For the years ended December 31, 2025 and 2024, we accrued $18.1 million and $33.7 million, respectively, of U.S. federal excise tax.
BCRED Investments LLC ("BCRED Investments"), a wholly-owned and consolidated subsidiary that was formed in 2021, is a Delaware limited liability company which has elected to be treated as a corporation for U.S. tax purposes. As such, BCRED Investments is subject to certain U.S. federal, state and local taxes. For the years ended December 31, 2025 and 2024, BCRED Investments recorded an income tax provision of $3.6 million and $8.9 million, respectively.
As of December 31, 2025 and 2024, BCRED Investments recorded a deferred tax liability of $12.5 million and $8.9 million, respectively, which is included within Accrued expenses and other liabilities in the Consolidated Statements of Assets and Liabilities.
For the year ended December 31, 2025, BCRED Investments recorded a current tax expense of $7.3 million, of which $3.3 million is related to dividend income, on a GAAP basis, and is included in Excise and other tax expense in the Consolidated Statements of Operations, and $4.0 million is related to realized gains associated with the sale of an investment in a partnership interest and is included in Current tax expense on realized gains in the Consolidated Statements of Operations. For the year ended December 31, 2024, BCRED Investments recorded no current tax expense.
Net Unrealized Gain (Loss)
Net change in unrealized gain (loss) was comprised of the following (dollar amounts in thousands):
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net change in unrealized gain (loss) on investments | $ | (509,253) | $ | (114,191) | $ | 632,049 | ||||||||||||||
| Net change in unrealized gain (loss) on derivative instruments | (15,844) | 25,699 | (13,259) | |||||||||||||||||
| Net change in unrealized gain (loss) on foreign currency and other transactions | 5,772 | 135 | (3,085) | |||||||||||||||||
| Income tax (provision) benefit | (3,581) | (8,930) | - | |||||||||||||||||
| Net change in unrealized appreciation (depreciation), net of income tax (provision) benefit | $ | (522,906) | $ | (97,287) | $ | 615,705 | ||||||||||||||
For the year ended December 31, 2025, the net change in unrealized losses, net of income tax provision, was $522.9 million, as compared to $97.3 million for the same period in the prior year. The increase was primarily driven by unrealized losses on investments of $509.3 million, which were mainly attributable to declines in the fair value of certain debt investments. The fair value of our debt investments, as a percentage of principal, decreased by 0.6% for the year ended December 31, 2025, driven primarily by changes in certain portfolio company fundamentals and broader economic conditions.
In addition, we recognized unrealized losses of $15.8 million on derivative instruments, primarily resulting from fluctuations in the GBP, EUR and SEK exchange rates vs. USD.
Partially offsetting these losses for the year ended December 31, 2025 were unrealized gains of $5.8 million on foreign currency transactions, primarily attributable to fluctuations in the EUR exchange rate vs. USD.
Net Realized Gain (Loss)
The realized gains and losses on fully exited and partially exited investments comprised of the following (dollar amounts in thousands):
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net realized gain (loss) on investments | $ | (201,758) | $ | (176,654) | $ | (308,564) | ||||||||||||||
| Net realized gain (loss) on derivative instruments | (164,853) | 21,086 | 3,063 | |||||||||||||||||
| Net realized gain (loss) on foreign currency and other transactions | (1,433) | 28,904 | (5,483) | |||||||||||||||||
|
Net realized gain (loss) on extinguishment of debt
|
(794) | - | - | |||||||||||||||||
|
Current tax expense on realized gains
|
(3,964) | - | - | |||||||||||||||||
| Net realized gain (loss), net of tax expense | $ | (372,802) | $ | (126,664) | $ | (310,984) | ||||||||||||||
For the year ended December 31, 2025, the net realized loss, net of tax expense, was $372.8 million, as compared to $126.7 million for the same period in the prior year. The increase was primarily driven by losses on investments of $201.8 million, which were mainly attributable to full or partial sales of investments and the restructuring of certain debt investments, partially offset by a gain on the partial sale of an equity investment.
In addition, we recognized losses of $164.9 million on derivative instruments, resulting from the settlement of foreign currency derivative transactions, primarily USD vs. EUR and GBP forwards, as well as losses of $1.4 million on foreign currency and other transactions, primarily due to fluctuations in the EUR and GBP exchange rates vs. USD.
Financial Condition, Liquidity and Capital Resources
We generate cash primarily from the net proceeds of our continuous offering of Common Shares, proceeds from net borrowings on our credit facilities and unsecured debt issuances, income earned and repayments on principal on our debt investments. The primary uses of our cash and cash equivalents are for (i) originating and purchasing debt and other investments, (ii) funding the costs of our operations (including fees paid to our Adviser and expense reimbursements paid to our Administrator), (iii) debt service, repayment and other financing costs of our borrowings, (iv) funding repurchases under our share repurchase program and (v) cash distributions to the holders of our Common Shares.
As of December 31, 2025 and December 31, 2024, our debt consisted of asset based leverage facilities, a revolving credit facility, unsecured note issuances, short term borrowings related to repurchase obligations and debt securitizations. We have and will continue to, from time to time, enter into additional credit facilities, increase the size of our existing credit facilities or issue additional debt securities, including debt securitizations, unsecured debt and other forms of debt. Any such incurrence or issuance may be from sources within the U.S. or from various foreign geographies or jurisdictions, and may be denominated in currencies other than USD. Additionally, any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. As of December 31, 2025 and December 31, 2024, we had an aggregate principal amount of $35.1 billion and $30.7 billion of debt outstanding and our asset coverage ratio was 235.7% and 226.5%, respectively.
Cash and cash equivalents (excluding restricted cash) as of December 31, 2025, taken together with our $6.9 billion of unused capacity under our credit facilities (subject to borrowing base availability, $6.8 billion is available to borrow), proceeds from new or amended financing arrangements and the continuous offering of our Common Shares is expected to be sufficient for our investing activities and to conduct our operations in the near term. This determination is based in part on our expectations for the timing of funding investment purchases and the timing and amount of future proceeds from sales of our Common Shares and the use of existing and future financing arrangements. As of December 31, 2025, we had a significant amount of unfunded commitments, which we plan to fund using proceeds from offering our Common Shares and available borrowing capacity under our credit facilities. Additionally, we held $5,384.1 million of Level 1 and Level 2 investments as of December 31, 2025.
Although we have historically been able to obtain sufficient borrowing capacity, a deterioration in economic conditions or any other negative economic developments could restrict our access to financing in the future. We may not be able to find new financing for future investments or liquidity needs and, even if we are able to obtain such financing, such financing may not be on as favorable terms as we have previously obtained. These factors may limit our ability to make new investments and adversely impact our results of operations.
As of December 31, 2025, we had $2.3 billion in cash and cash equivalents (including restricted cash). For the year ended December 31, 2025, cash used in operating activities was $10.2 billion, primarily due to purchases of investments of $25.7 billion, partially offset by proceeds from sales of investments and principal repayments of $12.3 billion and an increase in net assets resulting from operations of $3.4 billion. Cash provided by financing activities was $11.0 billion during the year, primarily as a result of proceeds from the issuance of our Common Shares of $12.4 billion and net borrowing of $4.0 billion, partially offset by share repurchases, net of early repurchase deduction paid, of $3.0 billion, and dividends paid in cash of $2.3 billion.
Equity
The following table presents transactions in the Common Shares during the year ended December 31, 2025 (dollars in thousands except share amounts):
| Shares | Amount | ||||||||||
| CLASS I | |||||||||||
| Subscriptions | 373,498,428 | $ | 9,404,098 | ||||||||
| Share transfers between classes | 12,074,124 | 303,263 | |||||||||
|
Distributions reinvested
|
56,855,177 | 1,430,601 | |||||||||
| Share repurchases | (140,494,332) | (3,509,661) | |||||||||
| Early repurchase deduction | - | 1,249 | |||||||||
|
Net increase (decrease)
|
301,933,397 | 7,629,550 | |||||||||
| CLASS S | |||||||||||
| Subscriptions | 109,717,863 | 2,764,705 | |||||||||
| Share transfers between classes | (8,678,757) | (217,741) | |||||||||
|
Distributions reinvested
|
27,349,540 | 688,200 | |||||||||
| Share repurchases | (39,795,706) | (992,230) | |||||||||
| Early repurchase deduction | - | 573 | |||||||||
|
Net increase (decrease)
|
88,592,940 | 2,243,507 | |||||||||
| CLASS D | |||||||||||
| Subscriptions | 7,224,324 | 182,252 | |||||||||
| Share transfers between classes | (3,395,367) | (85,522) | |||||||||
|
Distributions reinvested
|
465,122 | 11,716 | |||||||||
| Share repurchases | (3,126,166) | (77,868) | |||||||||
| Early repurchase deduction | - | 26 | |||||||||
|
Net increase (decrease)
|
1,167,913 | 30,604 | |||||||||
| Total net increase (decrease) | 391,694,250 | $ | 9,903,661 | ||||||||
Distributions and Distribution Reinvestment Plan
The following tables summarize our distributions declared and payable during the year ended December 31, 2025 (dollar amounts in thousands, except per share amounts):
| Class I | ||||||||||||||||||||||||||
| Declaration Date | Record Date | Payment Date | Distribution Per Share | Distribution Amount | ||||||||||||||||||||||
| January 22, 2025 | January 31, 2025 | February 27, 2025 | $ | 0.2200 | $ | 228,819 | ||||||||||||||||||||
| February 20, 2025 | February 28, 2025 | March 26, 2025 | 0.2200 | 238,587 | ||||||||||||||||||||||
| March 19, 2025 | March 31, 2025 | April 24, 2025 | 0.2200 | 246,375 | ||||||||||||||||||||||
| April 16, 2025 | April 30, 2025 | May 27, 2025 | 0.2200 | 253,182 | ||||||||||||||||||||||
| May 19, 2025 | May 31, 2025 | June 26, 2025 | 0.2200 | 259,757 | ||||||||||||||||||||||
| June 19, 2025 | June 30, 2025 | July 24, 2025 | 0.2200 | 267,011 | ||||||||||||||||||||||
| July 18, 2025 | July 31, 2025 | August 26, 2025 | 0.2200 | 267,059 | ||||||||||||||||||||||
| August 20, 2025 | August 31, 2025 | September 25, 2025 | 0.2200 | 274,235 | ||||||||||||||||||||||
| September 18, 2025 | September 30, 2025 | October 23, 2025 | 0.2200 | 283,583 | ||||||||||||||||||||||
| September 18, 2025 | October 31, 2025 | November 26, 2025 | 0.2000 | 260,052 | ||||||||||||||||||||||
| November 19, 2025 | November 30, 2025 | December 26, 2025 | 0.2000 | 269,094 | ||||||||||||||||||||||
| December 18, 2025 | December 31, 2025 | January 28, 2026 | 0.2000 | 274,577 | ||||||||||||||||||||||
| $ | 2.5800 | $ | 3,122,331 | |||||||||||||||||||||||
| Class S | ||||||||||||||||||||||||||
| Declaration Date | Record Date | Payment Date | Distribution Per Share | Distribution Amount | ||||||||||||||||||||||
| January 22, 2025 | January 31, 2025 | February 27, 2025 | $ | 0.2020 | $ | 102,691 | ||||||||||||||||||||
| February 20, 2025 | February 28, 2025 | March 26, 2025 | 0.2020 | 104,955 | ||||||||||||||||||||||
| March 19, 2025 | March 31, 2025 | April 24, 2025 | 0.2020 | 107,789 | ||||||||||||||||||||||
| April 16, 2025 | April 30, 2025 | May 27, 2025 | 0.2021 | 109,761 | ||||||||||||||||||||||
| May 19, 2025 | May 31, 2025 | June 26, 2025 | 0.2022 | 111,623 | ||||||||||||||||||||||
| June 19, 2025 | June 30, 2025 | July 24, 2025 | 0.2021 | 113,811 | ||||||||||||||||||||||
| July 18, 2025 | July 31, 2025 | August 26, 2025 | 0.2022 | 114,847 | ||||||||||||||||||||||
| August 20, 2025 | August 31, 2025 | September 25, 2025 | 0.2022 | 117,040 | ||||||||||||||||||||||
| September 18, 2025 | September 30, 2025 | October 23, 2025 | 0.2022 | 119,217 | ||||||||||||||||||||||
| September 18, 2025 | October 31, 2025 | November 26, 2025 | 0.1823 | 107,985 | ||||||||||||||||||||||
| November 19, 2025 | November 30, 2025 | December 26, 2025 | 0.1823 | 109,628 | ||||||||||||||||||||||
| December 18, 2025 | December 31, 2025 | January 28, 2026 | 0.1824 | 110,649 | ||||||||||||||||||||||
| $ | 2.3660 | $ | 1,329,996 | |||||||||||||||||||||||
| Class D | ||||||||||||||||||||||||||
| Declaration Date | Record Date | Payment Date | Distribution Per Share | Distribution Amount | ||||||||||||||||||||||
| January 22, 2025 | January 31, 2025 | February 27, 2025 | $ | 0.2147 | $ | 5,018 | ||||||||||||||||||||
| February 20, 2025 | February 28, 2025 | March 26, 2025 | 0.2147 | 5,387 | ||||||||||||||||||||||
| March 19, 2025 | March 31, 2025 | April 24, 2025 | 0.2147 | 5,442 | ||||||||||||||||||||||
| April 16, 2025 | April 30, 2025 | May 27, 2025 | 0.2147 | 5,530 | ||||||||||||||||||||||
| May 19, 2025 | May 31, 2025 | June 26, 2025 | 0.2148 | 5,743 | ||||||||||||||||||||||
| June 19, 2025 | June 30, 2025 | July 24, 2025 | 0.2147 | 5,885 | ||||||||||||||||||||||
| July 18, 2025 | July 31, 2025 | August 26, 2025 | 0.2148 | 5,289 | ||||||||||||||||||||||
| August 20, 2025 | August 31, 2025 | September 25, 2025 | 0.2148 | 5,419 | ||||||||||||||||||||||
| September 18, 2025 | September 30, 2025 | October 23, 2025 | 0.2148 | 5,439 | ||||||||||||||||||||||
| September 18, 2025 | October 31, 2025 | November 26, 2025 | 0.1948 | 5,000 | ||||||||||||||||||||||
| November 19, 2025 | November 30, 2025 | December 26, 2025 | 0.1948 | 5,011 | ||||||||||||||||||||||
| December 18, 2025 | December 31, 2025 | January 28, 2026 | 0.1948 | 5,017 | ||||||||||||||||||||||
| $ | 2.5171 | $ | 64,180 | |||||||||||||||||||||||
For the years ended December 31, 2025, 2024 and 2023, interest-related dividends represented 95.9%, 99.9% and 99.6% of total distributions paid by the Company, respectively.
For the years ended December 31, 2025, 2024 and 2023, short-term capital gain dividends represented 0.0%, 0.0% and 0.0% of total distributions paid by the Company, respectively. Qualified short-term capital gain dividends are generally exempt from U.S. withholding tax when paid to non-U.S. shareholders.
For the years ended December 31, 2025, 2024 and 2023, capital gain dividends represented 0.0%, 0.0% and 0.0% of total dividends paid by the Company, respectively.
With respect to distributions, we have adopted an "opt out" distribution reinvestment plan (the "DRIP") for shareholders. As a result, in the event of a declared cash distribution or other distribution, each shareholder that has not "opted out" of the DRIP will have their dividends or distributions automatically reinvested in additional Common Shares rather than receiving cash distributions. Shareholders who receive distributions in the form of Common Shares will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.
For additional information on our distributions and DRIP, see "Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note 9. Net Assets."
Share Repurchase Program
We have implemented a share repurchase program under which, at the discretion of our Board, the Company may repurchase, in each quarter, up to 5% of the NAV of the Company's Common Shares outstanding (either by number of shares or aggregate NAV) as of the close of the previous calendar quarter. For the avoidance of doubt, such target amount is assessed each calendar quarter. The Board may amend or suspend the share repurchase program at any time (including to offer to purchase fewer shares) if in its reasonable judgment it deems such action to be in the best interest of shareholders, such as when a repurchase offer would place an undue burden on the Company's liquidity, adversely affect the Company's operations or risk having an adverse impact on the Company that would outweigh the benefit of the repurchase offer. As a result, share repurchases may not be available each quarter, or may only be available in an amount less than 5% of our Common Shares outstanding. The Company intends to conduct such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Exchange Act and the 1940 Act. Additionally, pursuant to Rule 23c-1(a)(10) under the 1940 Act, the Company may also repurchase its outstanding Common Shares outside of the share repurchase program. All Common Shares purchased pursuant to the terms of each tender offer will be retired and thereafter will be authorized and unissued shares.
Under the share repurchase program, to the extent the Company offers to repurchase Common Shares in any particular quarter, it is expected to repurchase Common Shares pursuant to tender offers using a purchase price equal to the NAV per share as of the last calendar day of the applicable quarter, except that shares that have not been outstanding for at least one year will be repurchased at 98% of such NAV (an "Early Repurchase Deduction"). The one-year holding period will be satisfied if at least one year has elapsed from (a) the issuance date of the applicable Common Shares to (b) the subscription date immediately following the valuation date used in the repurchase of such Common Shares. The Early Repurchase Deduction may be waived in the case of repurchase requests arising from the death, divorce or qualified disability of the holder; in the event that a shareholder's Common Shares are repurchased because the shareholder has failed to maintain the $500 minimum account balance; due to trade or operational error; and repurchases of Common Shares submitted by discretionary model portfolio management programs (and similar arrangements) as approved by the Company. In addition, the Company's Common Shares are sold to certain feeder vehicles primarily created to hold the Company's Common Shares that in turn offer interests in such feeder vehicles to non-U.S. persons. For such feeder vehicles and similar arrangements in certain markets, the Company will not apply the Early Repurchase Deduction to the feeder vehicles or underlying investors, often because of administrative or systems limitations. The Early Repurchase Deduction will be retained by the Company for the benefit of remaining shareholders.
For additional information on our share repurchase program, see "Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note 9. Net Assets."
Borrowings
As of December 31, 2025 and December 31, 2024, we had an aggregate principal amount of $35.1 billion and $30.7 billion, respectively, of debt outstanding.
For additional information on our debt obligations see "Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note 7. Borrowings."
Interest Rate Swaps
We use interest rate swaps to mitigate interest rate risk associated with our fixed rate liabilities, and have designated certain interest rate swaps to be in a hedge accounting relationship.
See "Item 8. Financial Statements and Supplementary Data -Notes to Consolidated Financial Statements-Note 2. Significant Accounting Policies-Derivative Instruments" and "Item 8. Financial Statements and Supplementary Data -Notes to Consolidated Financial Statements-Note 6. Derivatives" for additional disclosure regarding our derivative instruments designated in a hedge accounting relationship.
Off-Balance Sheet Arrangements
Portfolio Company Commitments
Our investment portfolio contains and is expected to continue to contain debt investments which are in the form of lines of credit or delayed draw commitments, which require us to provide funding when requested by portfolio companies in accordance with underlying loan agreements. As of December 31, 2025 and December 31, 2024, we had unfunded commitments, including delayed draw term loans and revolvers with an aggregate principal amount of $13.4 billion and $10.8 billion, respectively.
Additionally, from time to time, the Advisers and their affiliates may commit to an investment or commit to backstop the commitment of another lender on behalf of the investment vehicles they manage, including the Company. Certain terms of these investments or backstop arrangements are not finalized at the time of the commitment and each respective investment vehicle's allocation may change prior to the date of funding. In this regard, as of December 31, 2025 and December 31, 2024, we estimate that $1,271.1 million and $130.2 million, respectively, of investments and backstop arrangements were committed but not yet funded.
Other Commitments and Contingencies
As of December 31, 2025 and December 31, 2024, $497.3 million and $536.7 million, respectively, of capital committed remained uncalled from the Company in relation to capital commitments to Emerald JV, Verdelite JV and SLC.
From time to time, we may become a party to certain legal proceedings incidental to the normal course of our business. As of December 31, 2025, management is not aware of any material pending legal proceedings.
Related-Party Transactions
We have entered into a number of business relationships with affiliated or related parties, including the following:
•the Investment Advisory Agreement;
•the Sub-Advisory Agreement;
•the Administration Agreement;
•the Intermediary Manager Agreement; and
•the Expense Support and Conditional Reimbursement Agreement.
In addition to the aforementioned agreements, we, Blackstone, our Advisers and certain of their affiliates have been granted exemptive relief by the SEC to co-invest with other funds managed by our Advisers, Blackstone or their affiliates in a manner consistent with our investment objectives, positions, policies, strategies and restrictions, as well as regulatory requirements and other pertinent factors.
The Company has investments in joint ventures that have been considered controlled/affiliated companies, including Emerald JV and Verdelite JV. From time to time, the Company may purchase investments from or sell investments to Emerald JV and Verdelite JV. For the year ended December 31, 2025, the Company purchased investments from Emerald JV with a par value of $18.0 million, for a total cash purchase price based on then-current fair value (at the time of purchase) of $18.0 million. For the year ended December 31, 2025, the Company did not purchase investments from or sell investments to Verdelite JV.
See "Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note 3. Fees, Expenses, Agreements and Related Party Transactions" and"Item 8. Financial Statements and Supplementary Data-Notes to Consolidated Financial Statements-Note 11. Joint Ventures."
Recent Developments
Macroeconomic Environment
The year ended December 31, 2025 was characterized by volatility and uncertainty in global markets, driven by investor concerns over inflation, elevated interest rates, ongoing political and regulatory uncertainty, including shifts in U.S. trade policy and the imposition of new tariffs, as well as geopolitical instability stemming from the ongoing armed conflict in Ukraine and Iran and escalating conflicts in other parts of the Middle East.
Tariff announcements in the U.S. and ongoing global trade negotiations have contributed to significant uncertainty and volatility of debt and equity markets. Gradual decreases in interest rates during 2025, coupled with resilience in the U.S. economy, contributed to improved investor sentiment, stronger capital markets and increased transaction activity toward the end of 2025. Nevertheless, inflation has remained above the U.S. Federal Reserve's target level and interest rates remain elevated relative to the interest rate environment prior to the inflationary spike in 2022-2023. Following three consecutive rate cuts, the U.S. Federal Reserve held interest rates steady in January 2026 and noted, among other matters, that it would continue to assess and monitor incoming information in considering additional adjustments. While our business model benefits from elevated interest rates which, all else being equal, correlate to increases in our net income, higher borrowing costs may strain our existing portfolio companies, potentially leading to nonperformance. Rising interest rates can dampen consumer spending and slow corporate profit growth, negatively impacting our portfolio companies, particularly those vulnerable to economic downturns or recessions. While further interest rate hikes are not expected at this time, any renewed increases could lead to a rise in non-performing assets and decline in portfolio value if investment write-downs become necessary. Additionally, adverse economic conditions may erode the value of collateral securing some of our loans and reduce the value of our equity investments. It remains difficult to predict the full impact of recent and any future changes with respect to interest rates or inflation.
Further contributing to economic uncertainty, the current U.S. presidential administration has taken substantial actions with respect to international trade policy, including seeking to renegotiate certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries. The U.S. government has also imposed, and may in the future impose further, tariffs on certain foreign goods. Some foreign governments, have threatened or instituted retaliatory tariffs on certain U.S. goods. In February 2026, the U.S. Supreme Court ruled that many of the tariffs recently imposed by the U.S. government exceeded its authority, thereby invalidating many, but not all, of such tariffs. Subsequent to the U.S. Supreme Court's ruling, the U.S. presidential administration raised potential alternative means through which the administration could impose tariffs. Such uncertainty and/or tariffs or counter-measures could further increase costs, decrease margins, reduce the competitiveness of products and services offered by our portfolio companies and adversely affect the revenues and profitability of our portfolio companies whose businesses rely on imported goods. Meanwhile, substantial reductions in government spending could negatively affect certain of our portfolio companies that rely on government contracts, destabilize the U.S. government contracting market and harm our ability to generate expected returns. Additionally, changes in the regulation or enforcement of bank lending and capital requirements could have material and adverse effects on the private credit market. In light of these developments, there can be no assurances that political and regulatory conditions will not worsen and adversely affect the Company, its portfolio companies or their respective financial performance.
Critical Accounting Estimates
The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies and estimates should be read in connection with our risk factors described in "Item 1A. Risk Factors."
The Company is required to report its investments, including those for which current market values are not readily available, at fair value in accordance with ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date, and Rule 2a-5 under the 1940 Act.
Fair value is based on observable market prices or parameters or derived from such prices or parameters when such quotations are readily available. In accordance with Rule 2a-5 under the 1940 Act, a market quotation is "readily available" only when it is a quoted price (unadjusted) in active markets for identical instruments that a fund can access at the measurement date, provided that such a quotation is not considered to be readily available if it is not reliable. To assess the continuing appropriateness of pricing sources and methodologies, the Advisers regularly perform price verification procedures and issue challenges, as necessary, to independent pricing services or brokers, and any differences are reviewed in accordance with the valuation procedures. The Advisers do not adjust the prices unless they have a reason to believe market quotations are not reflective of the fair value of an investment. Examples of events that would cause market quotations to not reflect fair value could include cases when a security trades infrequently or not at all, causing a quoted purchase or sale price to become stale, or in the event of a "fire sale" by a distressed seller. All price overrides require approval from the Board.
Where prices or inputs are not available or, in the judgment of the Board are not reliable, valuation techniques based on the facts and circumstances of the particular investment will be utilized. Securities that are not publicly traded or for which market prices are not readily available are valued at fair value as determined in good faith by the Board, based on, among other things, the input of the Advisers, the Audit Committee of the Board (the "Audit Committee") and independent valuation firms engaged on the recommendation of the Advisers and at the direction of the Board. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.
The Company's Board undertakes a multi-step valuation process each quarter in connection with determining the fair value of the Company's investments for which reliable market quotations are not readily available, or are available but deemed not reflective of the fair value of an investment, which includes, among other procedures, the following:
•the valuation process begins with each investment being preliminarily valued by the Advisers' valuation team in conjunction with the Advisers' investment professionals responsible for each portfolio investment;
•in addition, independent valuation firms engaged by the Board prepare quarter-end valuations of such investments except de minimis investments, as determined by the Advisers. The independent valuation firms provide a final range of values on such investments to the Board and the Advisers. The independent valuation firms also provide analyses to support their valuation methodology and calculations;
•the Advisers' valuation committee reviews each valuation recommendation to confirm they have been calculated in accordance with the valuation policy and compares such valuations to the independent valuation firms' valuation ranges to ensure the Advisers' valuations are reasonable;
•the Advisers' valuation committee makes valuation recommendations to the Audit Committee;
•the Audit Committee reviews the valuation recommendations made by the Advisers' valuation committee, including the independent valuation firms' quarterly valuations, and once approved, recommends them for approval by the Board; and
•the Board reviews the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Audit Committee, the Advisers' valuation committee and, where applicable, the independent valuation firms and other external service providers.
Valuation of each of our investments will generally be made, as described above, as of the end of each fiscal quarter. In cases where the Company determines its net asset value ("NAV") at times other than a quarter-end, the Company updates the value of securities with market quotations to the most recent market quotation. For securities without market quotations, non-quarterly valuations will generally be the most recent quarterly valuation unless the Advisers determine that a significant observable change has occurred since the most recent quarter-end with respect to the investment (which determination may be as a result of a material event at a portfolio company, material change in market spreads, secondary market transaction in the securities of an investment or otherwise). If the Advisers determine such a change has occurred with respect to one or more investments, the Advisers will determine whether to update the value for each relevant investment using a range of values from an independent valuation firm, where applicable, in accordance with the Company's valuation policy, pursuant to authority delegated by the Board.
As part of the valuation process, the Board takes into account relevant factors in determining the fair value of the Company's investments for which reliable market quotations are not readily available, many of which are loans, including and in combination, as relevant, of: (i) the estimated enterprise value of a portfolio company, (ii) the nature and realizable value of any collateral, (iii) the portfolio company's ability to make payments based on its earnings and cash flow, (iv) the markets in which the portfolio company does business, (v) a comparison of the portfolio company's securities to any similar publicly traded securities, and (vi) overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity or debt sale occurs, the Board with the assistance of the Advisers, the Audit Committee and independent valuation firms, considers whether the pricing indicated by the external event corroborates its valuation.
The Board has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of the Company's portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Board may reasonably rely on that assistance. However, the Board is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company's valuation policy and a consistently applied valuation process.
Blackstone Private Credit Fund published this content on March 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 13, 2026 at 20:25 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]