Blackstone Corporate Bond Strategies

Conflicts of Interest

There may be occasions when a Fund’s investment advisor, and their affiliates will encounter potential conflicts of interest in connection with the Funds activities including, without limitation, the allocation of investment opportunities, relationships with Blackstone’s and its affiliates’ investment banking and advisory clients, and the diverse interests of a Funds investors.

Exchange Rate

Currency fluctuations may have an adverse effect on the value, price, income or costs of the product which may increase or decrease as a result of changes in exchange rates.

Inflation and Supply Chain Risk

Economic activity has continued to accelerate across sectors and regions. Nevertheless, due to global supply chain issues, a rise in energy prices, strong consumer demand as economies continue to reopen and other factors, inflation has accelerated in the U.S. and globally. We believe inflation is likely to continue in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may tighten in response. Persistent inflationary pressures and supply chain issues could affect our portfolio investments. In addition, the inflation-adjusted value of the principal on our loan investments could decrease.

Material, Non-Public Information

In connection with other activities of Blackstone, certain Blackstone personnel may acquire confidential or material non-public information or be restricted from initiating transactions in certain securities, including on a Fund’s behalf. As such, a Fund may not be able to initiate a transaction or sell an investment. In addition, policies and procedures maintained by Blackstone to deter the inappropriate sharing of material non-public information may limit the ability of Blackstone personnel to share information with personnel in Blackstone’s other business groups, which may ultimately reduce the positive synergies expected to be realized by a Fund as part of the broader Blackstone investment platform.

Leverage Risk and Use of Leverage

Leverage may result from certain transactions, including the use of derivatives, borrowing, and reverse repurchase agreements. A Fund may intend to borrow money, and if returns on such investments exceed the costs of borrowing, investor returns will be enhanced. However, if returns do not exceed the costs of borrowing, a Fund’s performance will be depressed, potentially leading to greater losses than it otherwise would have experienced. The effect of leverage is that any losses will be magnified, making a Fund more volatile than if leverage was not used. The use of leverage involves a high degree of financial risk and increases a Fund’s exposure to adverse economic factors such as rising interest rates, economic downturns, or deteriorations in the condition of the investments. This leverage may also subject a Fund and its investments to restrictive financial and operating covenants, which may limit flexibility in responding to changing business and economic conditions. For example, leveraged entities may face restrictions on making interest payments and other distributions. A Fund may, but is not required to, reduce leverage risk by either segregating an equal amount of liquid assets or “covering” the transactions that introduce such risk.

No Assurance of Investment Return

An investment in a Fund is speculative and involves a high degree of risk. There can be no assurance that a Fund will achieve comparable results, implement its investment Fund, achieve its objectives, or avoid substantial losses, or that any expected returns will be met (or that the returns will be commensurate with the risks of investing in the type of transactions described herein).  The investments in which a Fund may invest (directly or indirectly) are speculative and will be subject to significant business and financial risks.  A Fund’s performance may be volatile.  An investment should only be considered by sophisticated investors who can afford to lose all or a substantial amount of their investment. A Fund will incur costs which will impact the return throughout the life of such Fund. Fund costs may include, for example: fund management; fund administration and servicing; legal; compliance; record-keeping; certain kinds of distribution charges; and other operating costs. a Fund’s fees and expenses may offset or exceed its profits. A more detailed description of relevant fund costs and expenses is included in a Fund’s offering documents.

Recent Market Events Risk

Local, regional, or global events such as war (e.g., Russia/Ukraine), acts of terrorism, public health issues like pandemics or epidemics (e.g., COVID-19), recessions, or other economic, political and global macro factors and events could lead to a substantial economic downturn or recession in the U.S. and global economies and have a significant impact on the Fund and its investments.

Reliance on Key Management Personnel

The success of a Fund will depend, in large part, upon the skill and expertise of certain Blackstone professionals. In the event of the death, disability or departure of any key Blackstone professionals, the business and the performance of a Fund may be adversely affected. Some Blackstone professionals may have other responsibilities, including senior management responsibilities, throughout Blackstone and, therefore, conflicts are expected to arise in the allocation of such personnel’s time (including as a result of such personnel deriving financial benefit from these other activities, including fees and performance-based compensation).

Target Allocations

There can be no assurance that a Fund will achieve its objectives or avoid substantial losses. Allocation strategies and targets depend on a variety of factors, including prevailing market conditions and investment availability. There is no guarantee that such strategies and targets will be achieved, and any particular investment may not meet the target criteria.

Weighted Average Carbon Intensity (WACI) and Certain Risk-Based Investment Screens

Weighted Average Carbon Intensity (WACI) and Certain Risk-Based Investment Screens. Weighted Average Carbon Intensity is a measure of the portfolio’s exposure to carbon-intensive companies, based on a company’s Scope 1 and Scope 2 carbon emissions relative to its revenue. Blackstone uses TruCost carbon emissions data from S&P Global for the WACI calculations which are in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations for asset owners and asset managers. In seeking to achieve this objective, Blackstone relies on third-party data for both actual and potential carbon emissions from fossil fuel reserves for a particular issuer, sector or subsector. Achieving an accurate WACI will depend on third-party data providers ability to properly assess the carbon emissions of issuers. There can be no assurance that the Fund or techniques employed will be successful or that the information and data provided by the third party data provider will be complete, accurate or provided in a timely manner. In addition, there are various providers of carbon emissions data and the measurement of carbon emissions may vary from provider to provider. As a result, Blackstone’s selection of any particular data provider may result in a different composition of the Fund and/or a different WACI measurement for the portfolio and/or Index. Blackstone does not independently verify the third-party information used to derive the information and makes no representation or warranty as to the accuracy or completeness of such information. Please see https://ghgprotocol.org/corporate-standard for more information on the Greenhouse Gas (GHG) Protocol Standard. Where carbon intensity is not available for an Index constituent Blackstone uses the subsector carbon intensity, which is the ratio of the total emissions of the subsector over the total revenue in the subsector as of that date. If there is an insufficient number of issuers with data in the relevant subsector, Blackstone uses the sector carbon intensity, which is the ratio of the total emissions of the sector over the total revenue in the sector as of that date. Cash, cash equivalents, and derivatives are included in the denominator of the portfolios WACI calculation which implies no carbon emissions for those instruments. While sector exclusion is not part of the low carbon optimization, Blackstone Corporate Bond Strategies integrates certain sustainability-related factors into its investment process by screening out, from its investable universe, specific issuers determined to have potential risk of high economic loss because such issuers engaged in certain business activities identified as being correlated with heightened risk of losing investment value (“Risk Categories”). The Risk Categories include, but are not limited to controversial weapons, retail sold assault weapons, thermal coal mining or power generation, private prisons, violation of global norms, private prisons, payday lending, adult entertainment and the tobacco industry. This investment process may cause Blackstone Corporate Bond Strategies’ funds and/or portfolios to underperform relative to other sponsors’ funds and/or portfolios which do not consider sustainability-related factors at all or which evaluate sustainability-related factors in a different manner. Further details about the integration of sustainability-related factors into the investment process is set out in the offering documents or available upon request.