Blackstone’s BCRED to Prorate Q2 Tender as Demand Hits 10%, Holds 5% Cap After Upsizing in Q1

Blackstone Private Credit Fund will fulfill second-quarter repurchase requests at its 5% quarterly cap on a pro rata basis, the fund disclosed in a June 4 amendment to its tender offer statement, after redemption requests reached approximately 10% of shares outstanding – double the cap and a step up from the 7.9% the fund met in full a quarter earlier.

The decision marks a turn in posture for the nontraded business development company, known as BCRED, which a quarter ago took the unusual step of upsizing its repurchase offer to 7% and deploying approximately $400 million of Blackstone and employee capital into a feeder fund to meet 100% of demand. The Q2 announcement frames the 5% cap as the program operating “as designed,” signaling that the firm does not intend to repeat the Q1 mechanic at higher demand levels.

The tender offer, originally filed Feb. 2, 2026 and set to expire May 29, was extended by the June 4 amendment. Tendering shareholders will receive net asset value per share as of March 31, 2026, less the 2% early repurchase deduction where applicable, per the offer to purchase. BCRED said the final dollar value of repurchases will be disclosed in August, after the fund strikes its June 30 NAV.

BCRED’s Q2 stance lands amid a sector-wide pattern of quarterly caps binding. AltsWire previously reported that nontraded BDC outflows exceeded inflows for the first time in Q1 2026, with sponsors meeting $6.9 billion in redemptions against $4.9 billion in gross sales, per Robert A. Stanger & Co. Among large peers reporting Q1 results: Apollo Debt Solutions BDC prorated at approximately 45%, HPS Corporate Lending Fund at 54%, and Vista Credit BDC at 50%. Golub Capital Private Credit Fund disclosed Q2 demand of 8.5% in May and will prorate at approximately 59%.

BCRED’s pro rata fulfillment at the 5% cap on 10% demand would settle in a similar range.

Capital inflows in the quarter to date are approximately 2% of NAV, producing an estimated net outflow of approximately 3% of NAV, consistent with Q1. The fund said repurchase activity decelerated in the back half of the Q2 offer period, with onshore volumes below prior-quarter levels. Blackstone also said it has seen acceleration in gross fundraising across its other private wealth products.

BCRED’s debt portfolio was marked at 96.1 cents on the dollar as of April 30, 2026, in line with broadly syndicated loans, the fund reported. The bottom 5% of the private debt portfolio carries a weighted-average mark of 68.3, a level reflecting underperforming assets at a meaningful discount to par.

Blackstone acknowledged positive Class I share performance year to date despite unrealized markdowns on select private assets and broadly syndicated loans. AltsWire reported in April that BCRED’s Q1 NAV per share declined to $24.19 from $24.79 at year-end 2025, the third consecutive quarterly decline, as non-accruals rose to 2.4% at cost.

Interest coverage across the portfolio reached 2.2 times as of March 31, a 40% improvement over two years, BCRED said. Payment-in-kind income as a percentage of total investment income declined 11% sequentially in Q1 2026 versus Q4 2025. The fund’s portfolio spans more than 660 unique borrowers, with last-12-months EBITDA growth across borrowers of 11% as of March 31.

BCRED’s leverage stood at 0.8 times debt-to-equity as of April 30, with available liquidity of more than $15 billion comprised of cash and undrawn borrowing capacity. The fund reported loan repayments of $2.6 billion in Q1 2026 and expects approximately $1 billion of second-quarter inflows, which together would represent roughly 160% of shares repurchased in the quarter – an annualized repayment rate of approximately 13%.

Like typical nontraded BDCs, BCRED offers quarterly share repurchases of up to 5% of shares outstanding, subject to board approval, with requests fulfilled on a pro rata basis if they exceed the cap. The board’s first-quarter decision to upsize the offer to 7% – the maximum permitted without changing the offer’s terms – alongside the $400 million Blackstone and its employees invested into an existing BCRED feeder fund was disclosed at the time as a step taken to meet 100% of a then-record 7.9% in demand. Stanger has since excluded that $400 million from its sector redemption totals on the basis that the capital was not deployed within the fund’s repurchase program.

Since inception in 2021, BCRED has generated a 9.3% annualized total return for Class I shares, which the fund said outperforms leveraged loans by approximately 320 basis points. Class I shares currently carry a 10% annualized distribution rate; BCRED said that represents an income premium of more than 200 basis points relative to leveraged loans.

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