Blackstone Private Credit Fund Posts 1.7% Q3 Return With Non-Accruals at 2.7% of Cost

Loan repayments and new subscriptions came to about 190% of the value of shares BCRED bought back in the quarter, as repurchase requests carried over from a second-quarter backlog.

November 4, 2026

Blackstone Private Credit Fund, the non-traded business development company known as BCRED, returned 1.7% net on its Class I shares in the third quarter, according to portfolio commentary the fund released on November 3. Net asset value stood at $23.51 per share on September 30, below the $25 per share at which the fund started in January 2021. Blackstone attributed recent pressure on NAV to wider market spreads and to select older-vintage investments.

Since inception, Class I shares have returned 8.9% a year net, which Blackstone put at 280 basis points ahead of the Morningstar LSTA US Leveraged Loan Index. The fund has paid $13.87 per Class I share in cash distributions over that span. Blackstone said all distributions since inception have been funded from net investment income or realized short-term capital gains, with none paid as a return of capital.

Class S shares returned 1.5% for the quarter before upfront placement fees and lost 2.1% after the maximum fee, while Class D returned 1.6% and 0.1% on the same bases. The September annualized distribution rate was 9.2% for Class I, 8.3% for Class S and 8.9% for Class D. Annualized net investment income for the quarter equaled 8.7% of beginning NAV for Class I, 7.8% for Class S and 8.4% for Class D.

Credit Quality

Non-accruals stood at 2.7% of the portfolio at cost and 1.7% at fair value at quarter-end, as assessed through the date of the commentary. BCRED had reported 2.2% and 1.1% as of June 30 in its September investor letter. Blackstone said the current figures remain below the 3.3% historical average at cost for the 115 current and former BDCs that Raymond James has tracked since the first quarter of 2006.

Payment-in-kind income fell to 5.9% of total investment income in the third quarter from 7.8% in the fourth quarter of 2025. The average mark on the debt portfolio was about 95 (94.6% of par after adjusting for restructured investments, 95.8% without that adjustment), and marks were up or flat from the prior quarter on nearly 80% of the portfolio by cost. The lowest-marked 5% of private debt investments carried an adjusted average mark of 54.0 (67.0 unadjusted), and the lowest-marked 10% stood at 67.3 (78.2 unadjusted).

Portfolio companies covered their cash interest 2.3 times on average, and Blackstone estimated coverage would stay above 2.0 times if base rates rose 100 basis points, with earnings and debt held constant. About 7% of the debt investments in that measure, which excludes ARR loans, had coverage below 1.0 times; including ARR loans, the share was about 8%. Average portfolio company EBITDA grew 11% year over year. The fund's software loans showed interest coverage of 2.4 times and an average loan-to-value of 37% at underwrite.

Senior secured debt made up 97% of debt investments, with an average loan-to-value of 41% at underwrite. The portfolio spans 629 companies in more than 50 industries. Average issuer EBITDA was $280 million, against $104 million for the private credit market as measured by the Lincoln International Private Market Database as of June 30. Floating rate instruments accounted for 95% of investments, and floating rate debt made up 93% of drawn borrowings.

Repurchases and Liquidity

Shareholders submitted $4.3 billion of repurchase requests in the third quarter, and Blackstone said a significant portion of that total was resubmitted from the $2.3 billion of second-quarter requests that went unfilled. BCRED prorated its third-quarter tender offer for a second straight quarter. Blackstone estimated that investors who sought liquidity in both quarters received about 75% of their requested capital within roughly 90 days, assuming they asked to redeem all of their shares each quarter.

Loan repayments of $3.2 billion and nearly $750 million of subscriptions during the quarter together equaled about 190% of the NAV of shares repurchased, though Blackstone noted those amounts do not offset repurchases dollar for dollar. Repayments for the year through September reached $8.5 billion, an annualized rate of about 14% of average investments at fair value. The fund ended September with more than $17 billion of available liquidity in unrestricted cash and undrawn credit capacity, and a debt-to-equity ratio of 0.85 times.

BCRED's all-in cost of debt was 5.7% in the second quarter, against a 6.1% average for the non-traded BDC peers Blackstone tracks, and its gross G&A expense ratio was 0.2% of NAV against a peer average of 0.3%. The fund holds investment-grade ratings, all with stable outlooks:

• BBB (high) from DBRS Morningstar
• Baa2 from Moody's
• BBB- from S&P, dated October 16, 2026

Deployment and Rates

BCRED deployed more than $8 billion in the first nine months of the year, mostly in first-lien senior secured loans. Third-quarter deployment totaled $2.0 billion, of which $170 million, about 9%, went to new portfolio companies. Those new-company loans were all first-lien, carried an average loan-to-value of 47% and were underwritten at an average yield of 8.7%, made up of a 3.9% base rate or floor and 4.9% of spread and origination fees. Across all private deals completed in the quarter, including those with existing borrowers, the yield was 9.3%.

Blackstone said the Federal Reserve raised rates during the quarter for the first time since 2023, and that BCRED's earnings would be expected to rise if base rates keep climbing, all else equal. Blackstone Credit & Insurance (BXCI), the firm's credit arm, said its North America direct lending deals in the third quarter priced roughly 25 to 50 basis points above its fourth-quarter 2025 deals.

In October, BXCI co-led a $5 billion debt financing for autonomous driving company Waymo, priced at SOFR plus 525 basis points with an implied loan-to-value of about 4%. The commentary does not say whether BCRED holds part of that loan.

Workouts

Blackstone cited loans to SelectQuote and Colony Hardware, which repaid at par this year after trough marks of 88 and 92, respectively. It also cited a multi-site healthcare company restructured in the third quarter of 2024, whose current mark is more than 20 points above its lowest quarter-end mark. BXCI reports an average annualized loss rate of 0.06% for its North America direct lending strategy from 2006 through September.