BlackRock’s HLEND Shrinks Leverage, Payout as Tender Requests Top Cap
HPS Corporate Lending Fund, a nontraded business development company managed by BlackRock’s HPS Investment Partners, has reduced its borrowings by about $2.4 billion since January and cut its monthly variable supplemental distribution by 29% over the same period.
The fund, known as HLEND, reported $10.95 billion in principal debt outstanding as of Sept. 30, down from $13.39 billion as of Jan. 31. Its average debt-to-equity ratio was about 0.88 times during September, compared with about 1.02 times in January, the fund said.
The fair value of HLEND’s investment portfolio was $22.33 billion as of Sept. 30, down from $25.73 billion as of Feb. 28. Aggregate net asset value was $11.80 billion, compared with $12.92 billion at the end of February.
NAV per share has moved less. HLEND reported NAV of $24.45 per share for each of its four share classes as of Sept. 30, unchanged from July 31 and Aug. 31 and down from $25.22 as of Dec. 31, 2025.
The balance-sheet changes come as HLEND works through three consecutive quarters of repurchase requests above its 5% quarterly limit. In the second quarter, the fund accepted 25.1 million of the 66.7 million shares tendered and paid $612.1 million on or about July 31. For the third quarter, HLEND said requests totaled about 11.5% of shares outstanding, down from about 13.3% in the second quarter, and that it will repurchase 5%, or about $600 million, at Sept. 30 NAV, as AltsWire previously reported. The fund has not yet reported final results for the third-quarter offer.
In a Sept. 11 letter to shareholders, the fund said it repurchased about $1.7 billion of shares across the three repurchase periods ended June 30 while “keeping leverage essentially stable at the low end of its target range.” Average monthly leverage was about 0.97 times in June and has declined in each month since.
On Oct. 23, the fund declared a regular distribution of $0.16 per Class I share and a variable supplemental distribution of $0.039 per share, payable on or about Nov. 30. It is the fourth consecutive month the supplemental has been set at $0.039. HLEND paid a $0.055 supplemental in January and February, then lowered it each month from March through July. Total monthly net distributions for Class I shares have fallen to $0.199 from $0.215.
In the same letter, HLEND said its annualized distribution rate for Class I shares was 9.8% as of August and that distributions declared since inception have consisted entirely of net investment income.
Secondary buyers have also targeted the fund. Cox Capital Partners is offering $20.17 per HLEND Class I share, about 17.5% below the Aug. 31 NAV, in a tender offer that expires Nov. 3, AltsWire reported. In July, HLEND’s board recommended that shareholders reject an earlier Cox offer priced about 25% below NAV.
Across the 19 NAV BDCs that had reported third-quarter tender results as of early October, redemption requests eased to 11.5% of estimated tender offer NAV from 12.7% for the same funds in the second quarter, according to Robert A. Stanger & Co. data.
As of Oct. 1, HLEND had raised about $14.4 billion in its $15 billion continuous public offering. The fund is managed by HPS Investment Partners, which BlackRock acquired in July 2025.
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