BXSL Borrow Tightens as Earnings Loom

Blackstone Secured Lending Fund heads into its November 11 earnings release with the lending market near fully locked out and a genuinely divided Street debate about dividend sustainability.

The clearest tension in the positioning data is in borrow availability. With availability at just 1.5% of shares lent, the lending pool is effectively exhausted. Every share that can be borrowed already is. That compares to a 52-week low of 0.05%, so the pool has seen tighter days, but the current level still means new short positions are extremely difficult to establish. The cost to borrow has eased from a brief spike to 61% annualised on September 30 down to roughly 7.9% now, suggesting that September dislocation was a one-session anomaly rather than a structural squeeze. Short interest itself has drifted in a range, sitting near 10.75 million shares, up about 2.8% on the week but down 5% over the month. The ORTEX short score of 67.9 is elevated but has actually pulled back from readings above 73 seen in late October, hinting that the most aggressive short pressure may have receded slightly. Options tell a different story: the put/call ratio of 1.58, while still above one, has fallen well below its 20-day average of 1.87, a rare stretch where options positioning has become less defensive than usual for this name.

The Street is split in a way that maps cleanly onto the bull and bear cases. Bulls point to a portfolio that is 97.6% first-lien, spread across 316 names, with trailing five-year credit losses of just 57 basis points against a group average of 113. First-quarter net investment income of $0.77 per share beat estimates, and the Blackstone Credit platform's $443 billion in AUM gives sourcing advantages that smaller BDCs cannot replicate. Bears counter that the fund's estimated return on equity of 9.5% falls short of an 11.7% dividend burden, raising questions about payout coverage as rates eventually move. Non-accruals rose to 4.7% of the portfolio on an amortised cost basis, leverage crept to 1.32 times debt/equity above management's own 1.0 to 1.25 target, and software represents 30% of the book, leaving the portfolio exposed to AI disruption and business-cycle compression in a sector that is already under pressure. Recent analyst moves reflect that tension: Citizens initiated at Market Perform in late October with no target, UBS raised its target modestly to $25.50 at Neutral in September, while JP Morgan trimmed to $23 and KBW downgraded to Market Perform earlier in the year. The stock trades at $23.22, below the mid-$25 area where most neutral-to-positive targets cluster, and at 0.91 times book value, a discount that reflects the market's uncertainty about NAV durability.

One institutional footnote worth noting: STRS Ohio added 3 million shares in the September quarter, lifting its holding to 7 million shares, while Van Eck Associates added 2 million shares over the same period. Those are meaningful additions in a name with a relatively concentrated holder register. The largest disclosed stake, Michael Karp's 8.5% position filed as a passive 13G, has not changed since February 2025. As with all 13D/G disclosures, that stake is as-last-disclosed and positions can move below the 5% reporting threshold without a further filing.

Retail attention has picked up relative to the past 90 days, with the ORTEX Wikipedia and site-traffic composite running at a z-score of 1.2 as of late October, an unusually high reading for a name that rarely generates retail noise. That elevated attention, arriving in the week before the November 11 print, is worth monitoring. With the borrow pool near its limits, a new short would be expensive to establish today, so the key question heading into the number is whether the NAV, NII per share, and any update to the dividend declaration shift the balance between the two equally coherent sets of concerns laid out above.