Moody's Ratings has affirmed the Baa2 long-term issuer and senior unsecured ratings of both Golub Capital BDC, Inc. (GBDC) and Blackstone Secured Lending Fund (BXSL) while revising the outlook on each from stable to negative. Moody’s cited rising leverage, weaker asset coverage buffers and deteriorating asset quality across both business development companies.

For Golub Capital BDC, Moody's pointed to elevated leverage and a thinner-than-peer asset coverage ratio cushion. 

As of March 31, 2026, the company reported a debt-to-equity of 1.27x and an ACR cushion of 19%, both weaker than BDC peer medians. 

"Our upgrade of GBDC’s ratings to Baa2 in January 2025 incorporated our expectation that the company would maintain debt-to-equity leverage with an adequate cushion below 1.25x, the top end of the company’s target range," the press release stated.

At the same time, asset quality has softened, with non-accrual investments rising to 2.3% of total investments from 1.3% at year-end 2025, driven by five new non-accrual positions.

Moody's also listed the companies’ "significant exposure to software," noting that some of these exposures could face "incremental headwinds as they move closer to maturity." 

BXSL showed a similar but more pronounced trend.

Moody's cited debt-to-equity of 1.32x and an ACR cushion of 17% as of March 31, 2026, with leverage exceeding the top end of its target range for a second consecutive quarter. Asset quality deterioration was sharper as well, with non-accrual investments jumping to 4.7% from 0.6%, including the addition of three portfolio companies such as Medallia. 

The agency also highlighted a higher level of underperforming credits outside of non-accrual status and greater portfolio concentration risk relative to peers.

Moody's said both ratings remain supported by strong structural features common across the BDC space, including predominantly first-lien and unitranche portfolios and diversified exposure profiles. 

GBDC's first-lien/unitranche share stands at 92% of investments, while BXSL's is also overwhelmingly first-lien oriented. Both firms also maintain solid liquidity profiles, bolstered by recent debt issuance — $500 million for GBDC and $650 million for BXSL in five-year notes — demonstrating continued access to capital markets.

Moody's said both outlooks could return to stable if each company sustains an ACR cushion above 20% and stabilizes asset quality. 

Conversely, further deterioration in leverage, liquidity, or credit performance — particularly sustained weak asset coverage or rising non-accruals — could lead to downgrades. 

Upgrades would require meaningfully stronger capitalization, lower leverage below 1.0x debt-to-equity, improved funding profiles and sustained credit performance through the cycle. 

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