Fitch Ratings has affirmed the 'A' Long-Term Ratings (LT Ratings) assigned to the mandatory redeemable preferred stock (MRPS) issued by Blackstone Strategic Credit Fund (BGB, formerly Blackstone/GSO Strategic Credit Fund) and Blackstone Long-Short Credit Income Fund (BGX, formerly Blackstone/GSO Long-Short Credit Income Fund).

Both closed-end funds (CEFs) are advised by Blackstone Liquid Credit Strategies LLC (Blackstone Credit).

KEY RATING DRIVERS

The ratings remain supported by:

Suf?cient asset coverage provided to the preferred shares as calculated per the funds' overcollateralization (OC) tests at the 'A' rating level;

The structural protections afforded by mandatory collateral maintenance and deleveraging provisions in the event of asset coverage declines;

The legal and regulatory parameters that govern the funds' operations;

The capabilities of Blackstone Credit as investment adviser.

FUND PROFILES

BGB's primary investment objective is to seek high current income, with a secondary objective of preservation of capital, consistent with its primary goal of high current income. The fund seeks to achieve its investment objectives by investing primarily in a diversi?ed portfolio of loans and other ?xed-income instruments of predominately U.S. corporate issuers, including ?rst- and second-lien secured loans and high yield corporate bonds of varying maturities. Under normal market conditions, at least 80% of BGB's managed assets will be invested in credit investments comprised of corporate ?xed-income instruments and other investments (including derivatives) with similar economic characteristics. The fund has a limited term and, absent shareholder approval to extend it, will dissolve on or about Sept. 15, 2027.

BGX's primary investment objective is to provide current income, with a secondary objective of capital appreciation. The fund seeks to achieve its investment objectives by employing a dynamic long-short strategy in a diversi?ed portfolio of loans and ?xed-income instruments of predominantly U.S. corporate issuers, including ?rst- and second-lien secured loans and high yield corporate debt of varying maturities. Under normal market conditions, BGX may maintain both long and short positions based on Blackstone Credit's fundamental views on investments. At least 70% of its managed assets are in secured loans.

ASSET COVERAGE

As of the review date, the funds' asset coverage ratios for total outstanding preferred shares were in excess of the minimum asset coverage of 225% required by the funds' governing documents.

As of the same date, the funds' asset coverage ratios, as calculated in accordance with the Fitch total and net overcollateralization tests per the 'A' rating guidelines outlined in Fitch's criteria (Fitch OC Tests), were in excess of the 100% minimum asset coverage guidelines required by the funds' governing documents.

STRUCTURAL PROTECTIONS

In the event the MRPS asset coverage tests decline below their minimum threshold amounts, the fund manager is required to cure the breach by altering the composition of the portfolio toward assets with lower discount factors (for Fitch OC Test breaches), or by reducing leverage in a suf?cient amount (for both the Fitch OC Tests and 1940 Act asset coverage test breaches) within a prespeci?ed time period consistent with Fitch's criteria.

SUBORDINATION RISK

Certain terms exist in the funds' credit agreement that could restrict or delay payments to the MRPS shareholders if there were an Event of Default (EOD) under the agreement immediately before or after a payment to the MRPS shareholders. EODs under the creditor agreements include failure to maintain a coverage ratio of adjusted total assets to senior debt of 300% and/or a coverage ratio of total assets-to-senior debt and the MRPS of 225%.

Fitch believes the likelihood of any such payment delay to the preferred shareholders is remote. Under the terms of the credit agreements, the fund is provided a cure period to resolve any breaches of the above-noted triggers prior to the declaration of an EOD. In addition, Fitch is comfortable with the fund manager's ability to manage leverage in such a way as to avoid an EOD. However, if an EOD were to occur, Fitch believes it would be resolved in a timely manner.

MRPS dividends are cumulative in nature, disclosed to the purchasers as such, and any accrued but unpaid cumulative dividends would be captured in Fitch's OC test calculation.

INVESTMENT MANAGER

Blackstone Credit is the funds' investment adviser responsible for the funds' overall investment strategies. Blackstone Credit is an af?liate of Blackstone Alternative Credit Advisors LP, which is the credit platform of Blackstone Inc. (Blackstone; A+/F1). Blackstone is a global alternative investment manager specializing in investment vehicles focused on private equity, real estate, public debt and equity, noninvestment-grade credit, real assets, and secondary funds. As of Dec. 31, 2021, Blackstone had $881 billion of assets under management.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

An upgrade is not currently envisioned as the funds invest largely in securities that are ineligible for credit at the 'AA' rating level.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

The ratings may be sensitive to material changes in the leverage composition, portfolio credit quality or market risk of the funds' assets, as described above. A material adverse deviation from Fitch guidelines for any key rating driver could cause Fitch to downgrade the ratings.

The ratings could be downgraded if asset coverage cushions erode as a result of market volatility, or if Fitch believes the assets the fund invests in are unlikely to retain suf?cient liquidity and price stability at the current rating stress levels.

Best/Worst Case Rating Scenario

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579

SOURCES OF INFORMATION

The sources of information used to assess these ratings were the public domain and Blackstone Credit.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

RATING ACTIONS

Entity / Debt

Rating

Prior

Blackstone/GSO Long-Short Credit Income Fund

09258*126

LT

A

Affirmed

A

Blackstone/GSO Strategic Credit Fund

09257@125

LT

A

Affirmed

A

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Additional information is available on www.fitchratings.com

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