Blackstone’s publicly listed business development company, Blackstone Secured Lending Fund, has further marked down its largest investment, a private loan to Thoma Bravo-backed Medallia, amid ongoing underperformance at the enterprise software firm, according to a report by Bloomberg.
As of 30 June, the Medallia position was valued at approximately 87 cents on the dollar, down from 89 cents at the end of Q1 and 94 cents in Q4 2024, according to regulatory filings. The markdown reduces the value of Blackstone’s $380m par exposure to roughly $338m.
The position represented 5.37% of BXSL’s net assets at quarter-end and remains one of the largest exposures within Blackstone Private Credit Fund, the firm’s non-traded BDC.
Blackstone led the original $1.8bn debt financing in 2021 to support Thoma Bravo’s acquisition of Medallia, a provider of customer and employee experience software.
The debt package was structured as a recurring-revenue loan – commonly used in software transactions – featuring a 6.5% spread over base rate, with 4% paid in kind.
Medallia has undergone leadership changes in recent quarters, appointing Mark Bishof as chairman and CEO in January following the departure of Joe Tyrrell, who had served in the role for about a year. Veritas Capital was reportedly exploring a partial exit from the credit earlier in 2024.
Private credit assets, typically valued quarterly, can experience valuation lags versus the more liquid broadly syndicated loan market. While payment-in-kind (PIK) features can offer flexibility to borrowers, they may signal rising pressure on near-term cash flows.
Neither Blackstone nor Thoma Bravo offered further comment on the markdown.
