NEW
YORK, Nov. 2, 2022 /PRNewswire/ -- Owl Rock
Capital Corporation (NYSE: ORCC, or the "Company") today reported
net investment income of $146.8
million, or $0.37 per share,
and net income of $265.4 million, or
$0.67 per share, for the third
quarter ended September 30, 2022.
Reported net asset value per share was $14.85 at September 30,
2022 as compared to $14.48 at
June 30, 2022.
THIRD QUARTER 2022 HIGHLIGHTS
- Net investment income (NII) increased to $0.37 per share for the quarter ended
September 30, 2022, approximately 20%
in excess of the third quarter regular dividend of $0.31 per share
- Net asset value per share increased to $14.85 at September 30,
2022, an increase of 2.5% compared to June 30, 2022
- Increased quarterly regular dividend by $0.02 per share to $0.33 for the fourth quarter 2022
- In addition to the regular dividend, introduced a quarterly
supplemental dividend framework; announced $0.03 per share supplemental dividend based on
third quarter 2022 results, payable on or before December 15, 2022 to stockholders of record as of
November 30, 2022
- Accelerating dividend payment dates to approximately 15 days
from record dates, subject to Board approval
- Announced approval of a $150
million stock repurchase program, a portion of which may be
executed under Rule 10b5-1 in order to make purchases outside of
the Company's open-market window
Craig W. Packer, Chief Executive
Officer of Owl Rock Capital Corporation, commented, "We are pleased
to deliver very strong results this quarter, supported by the
quality of our portfolio and the tailwind of rising interest rates.
We have announced several capital actions so that our shareholders
benefit from this earnings momentum, including increasing our
regular dividend and introducing a supplemental dividend. We have
clear visibility into next quarter's earnings and with that in
mind, have also provided an NII estimate for the fourth quarter of
at least $0.39 per share, a further
increase from what we reported today."
Dividend Declarations
The Company's Board of Directors has declared a fourth quarter
2022 dividend of $0.33 per share for
stockholders of record as of December 30,
2022, payable on or before January
13, 2023 and a third quarter 2022 supplemental dividend of
$0.03 per share for stockholders of
record as of November 30, 2022,
payable on or before December 15,
2022. Going forward, in addition to a quarterly base
dividend of $0.33 per share, the
Company's Board of Directors expects to also declare, when
applicable, a formula-based quarterly supplemental dividend in an
amount to be determined each quarter.
2022 Stock Repurchase Program (the "2022 Repurchase
Program")
On November 1, 2022, the Board
approved the 2022 Repurchase Program under which the Company may
repurchase up to $150 million of the
Company's common stock. Under the 2022 Repurchase Program,
purchases may be made at management's discretion from time to time
in open-market transactions, including via trading plans with
investment banks pursuant to Rule 10b5-1 of the Exchange Act, in
accordance with all applicable rules and regulations. Unless
extended by the Board, the 2022 Repurchase Program will terminate
18 months from the date it was approved.
Affiliate Purchase Vehicle
Certain affiliates and employees of Blue Owl have indicated that
they intend to participate in an investment vehicle that will be
authorized to buy up to $25 million
of ORCC common stock which will be held for investment
purposes.
PORTFOLIO AND INVESTING ACTIVITY
For the three months ended September 30, 2022, new
investment commitments totaled $427.4
million across 13 new portfolio companies and 7 existing
portfolio companies. This compares to $603.4
million for the three months ended June 30, 2022 across 16 new portfolio companies
and 10 existing portfolio companies.
For the three months ended September 30, 2022, the
principal amount of new investments funded was $303.8 million. For this period, the Company had
$229.3 million aggregate principal
amount in sales and repayments.
For the three months ended June 30,
2022, the principal amount of new investments funded was
$341.3 million. For this period, the
Company had $488.3 million aggregate
principal amount in sales and repayments.
As of September 30, 2022 and June
30, 2022, the Company had investments in 180 and 168
portfolio companies with an aggregate fair value of $12.8 billion and $12.6
billion, respectively. As of September 30, 2022, the
average investment size in each portfolio company was $71.3 million based on fair value.
As of September 30, 2022, based on fair value, our
portfolio consisted of 72.2% first lien senior secured debt
investments, 14.4% second lien senior secured debt investments,
1.8% unsecured debt investments, 2.4% investment funds and
vehicles, 2.6% preferred equity investments, and 6.6% common equity
investments.
As of June 30, 2022, based on fair
value, our portfolio consisted of 73.1% first lien senior secured
debt investments, 14.5% second lien senior secured debt
investments, 2.1% unsecured debt investments, 2.2% investment funds
and vehicles, 2.3% preferred equity investments, and 5.8% common
equity investments.
As of September 30, 2022 and June
30, 2022, approximately 86.6% and 87.6% of the portfolio was
invested in secured debt, respectively. As of September 30,
2022, 98.3% of our debt investments based on fair value in our
portfolio were at floating rates.
As of September 30, 2022 and June
30, 2022, the weighted average total yield of accruing debt
and income-producing securities at fair value (which includes
interest income and amortization of fees and discounts) was 10.2%
and 8.9%, respectively, and the weighted average total yield of
accruing debt and income-producing securities at amortized cost
(which includes interest income and amortization of fees and
discounts) was 10.2% and 8.8%, respectively.
As of September 30, 2022, 2 portfolio companies with an
aggregate fair value of $70.0 million
were on non-accrual status, representing 0.6% of the total fair
value of the debt portfolio.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2022
Investment Income
Investment income increased to $314.1
million for the three months ended September 30, 2022
from $269.2 million for the three
months ended September 30, 2021 due
to an increase in our debt portfolio, dividend income, and rising
interest rates. Included in interest income are other fees such as
prepayment fees and accelerated amortization of upfront fees from
unscheduled paydowns. Period over period, income generated from
these fees decreased. Other income decreased period-over-period due
to a decrease in incremental fee income, which are fees that are
generally available to us as a result of closing investments and
generally paid at the time of closing. We expect that investment
income will vary based on a variety of factors including the pace
of our originations and repayments. Based on current market
conditions, we expect repayments, and in turn, originations, to
remain modest.
Expenses
Total expenses increased to $165.7
million for the three months ended September 30, 2022
from $137.0 million for the three
months ended September 30, 2021,
primarily due to an increase in interest expense and incentive
fees. The increase in interest expense was primarily driven by an
increase in the average daily borrowings as well as an increase in
the average interest rate. Incentive fees increased primarily due
to an increase in our debt investment portfolio and dividend
income. As a percentage of total assets, professional fees,
directors' fees, and other general and administrative expenses
remained relatively consistent period over period.
Liquidity and Capital Resources
As of September 30, 2022, we had $0.5 billion in cash and restricted cash,
$7.4 billion in total principal value
of debt outstanding, and $1.7 billion
of undrawn capacity on our credit facilities. The Company's
weighted average interest rate on debt outstanding was 3.9% and
3.2% for the three months ended September 30, 2022 and
June 30, 2022, respectively. Ending
net debt to equity was 1.18x and 1.20x as of September 30,
2022 and June 30, 2022,
respectively.
CONFERENCE CALL AND WEBCAST INFORMATION
Conference Call Information:
The conference call will be broadcast live on November 3,
2022 at 10:00 a.m. Eastern Time on
the Events section of ORCC's website at
www.OwlRockCapitalCorporation.com. Please visit the website to test
your connection before the webcast.
Participants are also invited to access the conference call by
dialing one of the following numbers:
- Domestic: (877) 737-7048
- International: +1 (201) 689-8523
All callers will need to reference "Owl Rock Capital
Corporation" once connected with the operator. All callers are
asked to dial in 10-15 minutes prior to the call so that name and
company information can be collected.
Replay Information:
An archived replay will be available for 14 days via a webcast
link located on the Events section of ORCC's website, and via the
dial-in numbers listed below:
- Domestic: (877) 660-6853
- International: +1 (201) 612-7415
- Conference ID: 13733345
FINANCIAL
HIGHLIGHTS
|
|
|
For the three months
ended
|
($ in thousands, except
per share amounts)
|
September 30,
2022
|
June 30,
2022
|
|
September 30,
2021
|
Investments at Fair
Value
|
$
12,835,918
|
$
12,648,126
|
|
$
12,110,098
|
Total Assets
|
$
13,413,191
|
$
13,088,383
|
|
$
13,075,878
|
Net Asset Value Per
Share
|
$
14.85
|
$
14.48
|
|
$
14.95
|
|
|
|
|
|
Investment
Income
|
$
314,053
|
$
273,286
|
|
$
269,191
|
Net Investment
Income
|
$
146,774
|
$
125,124
|
|
$
130,499
|
Net Income
|
$
265,427
|
$
(34,946)
|
|
$
142,851
|
|
|
|
|
|
Net Investment Income
Per Share
|
$
0.37
|
$
0.32
|
|
$
0.33
|
Net Realized and
Unrealized Gains (and Losses) Per Share
|
$
0.30
|
$
(0.41)
|
|
$
0.03
|
Net Income Per
Share
|
$
0.67
|
$
(0.09)
|
|
$
0.36
|
Distributions Declared
from Net Investment Income Per Share
|
$
0.31
|
$
0.31
|
|
$
0.31
|
|
|
|
|
|
Weighted Average Yield
of Accruing Debt and Income Producing Securities at Fair
Value
|
10.2 %
|
8.9 %
|
|
7.9 %
|
Weighted Average Yield
of Accruing Debt and Income Producing Securities at Amortized
Cost
|
10.2 %
|
8.8 %
|
|
7.9 %
|
Percentage of Debt
Investment Commitments at Floating Rates
|
98.3 %
|
98.8 %
|
|
99.9 %
|
CONSOLIDATED
STATEMENTS OF ASSETS AND LIABILITIES
(Amounts in
thousands, except share and per share amounts)
|
|
|
|
September 30,
2022
(Unaudited)
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Investments at fair
value
|
|
|
|
|
Non-controlled,
non-affiliated investments (amortized cost of $12,091,418 and
$12,073,126, respectively)
|
|
$
11,922,492
|
|
$
12,124,860
|
Non-controlled,
affiliated investments (amortized cost of $7,032 and $—,
respectively)
|
0
|
7,032
|
|
—
|
Controlled, affiliated
investments (amortized cost of $833,409, and $575,427,
respectively)
|
|
906,394
|
|
616,780
|
Total investments at
fair value (amortized cost of $12,931,859 and $12,648,553,
respectively)
|
|
12,835,918
|
|
12,741,640
|
Cash (restricted cash
of $94,151 and $21,481, respectively)
|
|
450,487
|
|
431,442
|
Foreign cash (cost of
$4,874 and $16,096, respectively)
|
|
4,703
|
|
15,703
|
Interest
receivable
|
|
95,148
|
|
81,716
|
Receivable from a
controlled affiliate
|
|
20,303
|
|
3,953
|
Prepaid expenses and
other assets
|
|
6,632
|
|
23,716
|
Total
Assets
|
|
$
13,413,191
|
|
$
13,298,170
|
Liabilities
|
|
|
|
|
Debt (net of
unamortized debt issuance costs of $103,285 and $110,239,
respectively)
|
|
$
7,196,154
|
|
$
7,079,326
|
Distribution
payable
|
|
122,085
|
|
122,068
|
Management fee
payable
|
|
46,886
|
|
46,770
|
Incentive fee
payable
|
|
31,134
|
|
29,242
|
Payables to
affiliates
|
|
5,000
|
|
5,802
|
Accrued expenses and
other liabilities
|
|
164,144
|
|
77,085
|
Total
Liabilities
|
|
7,565,403
|
|
7,360,293
|
Commitments and
contingencies (Note 7)
|
|
|
|
|
Net
Assets
|
|
|
|
|
Common shares $0.01 par
value, 500,000,000 shares authorized; 393,823,013 and
393,766,855
shares issued and outstanding, respectively
|
|
3,938
|
|
3,938
|
Additional
paid-in-capital
|
|
5,992,296
|
|
5,990,360
|
Accumulated
undistributed (overdistributed) earnings
|
|
(148,446)
|
|
(56,421)
|
Total Net
Assets
|
|
5,847,788
|
|
5,937,877
|
Total Liabilities
and Net Assets
|
|
$
13,413,191
|
|
$
13,298,170
|
Net Asset Value Per
Share
|
|
$
14.85
|
|
15.08
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Amounts in
thousands, except share amounts)
|
|
|
|
|
For the Three Months
Ended
September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Investment
Income
|
|
|
|
|
|
|
|
|
Investment income from
non-controlled, non-affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
$
240,601
|
|
$
229,605
|
|
$
655,303
|
|
$
655,152
|
|
Payment-in-kind
interest income(1)
|
30,539
|
|
12,361
|
|
79,698
|
|
31,162
|
|
Dividend
income
|
14,867
|
|
10,600
|
|
36,280
|
|
19,924
|
|
Other
income
|
5,408
|
|
7,942
|
|
14,794
|
|
15,559
|
|
Total investment income
from non-controlled, non-affiliated investments
|
291,415
|
|
260,508
|
|
786,075
|
|
721,797
|
|
Investment income from
controlled, affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
2,140
|
|
1,392
|
|
5,767
|
|
4,033
|
|
Dividend
income
|
20,303
|
|
7,128
|
|
59,136
|
|
13,469
|
|
Other
Income
|
195
|
|
163
|
|
520
|
|
480
|
|
Total investment income
from controlled, affiliated investments
|
22,638
|
|
8,683
|
|
65,423
|
|
17,982
|
|
Total Investment
Income
|
314,053
|
|
269,191
|
|
851,498
|
|
739,779
|
|
Expenses
|
|
|
|
|
|
|
|
|
Interest
expense
|
81,210
|
|
56,516
|
|
209,935
|
|
159,037
|
|
Management
fees
|
46,886
|
|
45,586
|
|
141,172
|
|
131,703
|
|
Performance based
incentive fees
|
31,134
|
|
27,682
|
|
83,630
|
|
74,727
|
|
Professional
fees
|
3,788
|
|
3,849
|
|
11,022
|
|
10,966
|
|
Directors'
fees
|
276
|
|
239
|
|
832
|
|
757
|
|
Other general and
administrative
|
2,381
|
|
3,140
|
|
6,656
|
|
7,302
|
|
Total Operating
Expenses
|
165,675
|
|
137,012
|
|
453,247
|
|
384,492
|
|
Net Investment
Income (Loss) Before Taxes
|
148,378
|
|
132,179
|
|
398,251
|
|
355,287
|
|
Income tax expense
(benefit)
|
1,604
|
|
1,680
|
|
3,998
|
|
3,004
|
|
Net Investment
Income (Loss) After Taxes
|
$
146,774
|
|
$
130,499
|
|
$
394,253
|
|
$
352,283
|
|
Net Realized and
Change in Unrealized Gain (Loss)
|
|
|
|
|
|
|
|
|
Net change in
unrealized gain (loss):
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
$
75,368
|
|
$
14,475
|
|
$ (147,545)
|
|
$
133,961
|
|
Non-controlled,
affiliated investments
|
—
|
|
—
|
|
—
|
|
—
|
|
Controlled, affiliated
investments
|
47,026
|
|
985
|
|
31,632
|
|
367
|
|
Translation of assets
and liabilities in foreign currencies
|
(3,807)
|
|
(796)
|
|
(7,510)
|
|
(3,716)
|
|
Income tax (provision)
benefit
|
—
|
|
(4,383)
|
|
—
|
|
(8,605)
|
|
Total Net Change in
Unrealized Gain (Loss)
|
118,587
|
|
10,281
|
|
(123,423)
|
|
122,007
|
|
Net realized gain
(loss):
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
201
|
|
2,018
|
|
4,853
|
|
(24,656)
|
|
Foreign currency
transactions
|
(135)
|
|
53
|
|
(1,218)
|
|
1,242
|
|
Total Net Realized
Gain (Loss)
|
66
|
|
2,071
|
|
3,635
|
|
(23,414)
|
|
Total Net Realized
and Change in Unrealized Gain (Loss)
|
118,653
|
|
12,352
|
|
(119,788)
|
|
98,593
|
|
Net Increase
(Decrease) in Net Assets Resulting from Operations
|
$
265,427
|
|
$
142,851
|
|
$
274,465
|
|
$
450,876
|
|
Earnings Per Share
- Basic and Diluted
|
$
0.67
|
|
$
0.36
|
|
$
0.70
|
|
$
1.15
|
|
Weighted Average
Shares Outstanding - Basic and Diluted
|
393,823,013
|
|
392,715,513
|
|
394,103,935
|
|
391,893,306
|
|
________________
(1)
|
For the three and
nine months ended September 30, 2021, interest income and
payment-in-kind interest income were reported in aggregate as
interest income.
|
PORTFOLIO AND
INVESTMENT ACTIVITY
|
|
|
|
Three Months Ended
September 30,
|
($ in
thousands)
|
|
2022
|
|
2021
|
New investment
commitments
|
|
|
|
|
Gross
originations
|
|
$
427,436
|
|
$
3,257,404
|
Less: Sell
downs
|
|
—
|
|
(463,419)
|
Total new investment
commitments
|
|
$
427,436
|
|
$
2,793,985
|
Principal amount of
investments funded:
|
|
|
|
|
First-lien senior
secured debt investments
|
|
$
230,494
|
|
$
2,154,036
|
Second-lien senior
secured debt investments
|
|
—
|
|
71,000
|
Unsecured debt
investments
|
|
—
|
|
—
|
Preferred equity
investments
|
|
24,716
|
|
975
|
Common equity
investments
|
|
17,047
|
|
8,820
|
Investment funds and
vehicles
|
|
31,500
|
|
57,750
|
Total principal amount
of investments funded
|
|
$
303,757
|
|
$
2,292,581
|
Principal amount of
investments sold or repaid:
|
|
|
|
|
First-lien senior
secured debt investments
|
|
$
(206,828)
|
|
$
(1,815,765)
|
Second-lien senior
secured debt investments
|
|
—
|
|
(278,613)
|
Unsecured debt
investments
|
|
(22,433)
|
|
—
|
Preferred equity
investments
|
|
—
|
|
—
|
Common equity
investments
|
|
—
|
|
—
|
Investment funds and
vehicles
|
|
—
|
|
—
|
Total principal amount
of investments sold or repaid
|
|
$
(229,261)
|
|
$
(2,094,378)
|
Number of new
investment commitments in new portfolio companies(1)
|
|
13
|
|
21
|
Average new
investment commitment amount
|
|
$
25,296
|
|
$
104,913
|
Weighted average
term for new debt investment commitments (in years)
|
|
6.0
|
|
5.7
|
Percentage of new
debt investment commitments at
floating rates
|
|
80.8 %
|
|
100.0 %
|
Percentage of new
debt investment commitments at
fixed
rates
|
|
19.2 %
|
|
— %
|
Weighted average
interest rate of new debt investment
commitments(2)(3)
|
|
10.5 %
|
|
7.1 %
|
Weighted average
spread over applicable base rate of new floating rate
debt investment commitments
|
|
6.3 %
|
|
6.2 %
|
________________
(1)
|
Number of new
investment commitments represents commitments to a particular
portfolio company.
|
(2)
|
For the three months
ended September 30, 2021, assumes each floating rate commitment is
subject to the greater of the interest rate floor (if applicable)
or 3-month LIBOR, which was 0.13% as of September 30,
2021.
|
(3)
|
For the three months
ended September 30, 2022, assumes each floating rate commitment is
subject to the greater of the interest rate floor (if applicable)
or 3-month SOFR, which was 3.59% as of September 30,
2022.
|
ABOUT OWL ROCK CAPITAL CORPORATION
Owl Rock Capital Corporation (NYSE: ORCC) is a specialty finance
company focused on lending to U.S. middle-market companies. As of
September 30, 2022, ORCC had investments in 180 portfolio
companies with an aggregate fair value of $12.8 billion. ORCC has elected to be regulated
as a business development company under the Investment Company Act
of 1940, as amended. ORCC is externally managed by Owl Rock Capital
Advisors LLC, an SEC-registered investment adviser that is an
indirect affiliate of Blue Owl Capital Inc. ("Blue Owl") (NYSE:
OWL) and part of Owl Rock, a division of Blue Owl. Owl Rock,
together with its subsidiaries, is a New
York based direct lending platform.
Certain information contained herein may constitute
"forward-looking statements" that involve substantial risks and
uncertainties. Such statements involve known and unknown risks,
uncertainties and other factors and undue reliance should not be
placed thereon. These forward-looking statements are not historical
facts, but rather are based on current expectations, estimates and
projections about ORCC, its current and prospective portfolio
investments, its industry, its beliefs and opinions, and its
assumptions. Words such as "anticipates," "expects," "intends,"
"plans," "will," "may," "continue," "believes," "seeks,"
"estimates," "would," "could," "should," "targets," "projects,"
"outlook," "potential," "predicts" and variations of these words
and similar expressions are intended to identify forward-looking
statements. These statements are not guarantees of future
performance and are subject to risks, uncertainties and other
factors, some of which are beyond ORCC's control and difficult to
predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements
including, without limitation, the risks, uncertainties and other
factors identified in ORCC's filings with the SEC. Investors should
not place undue reliance on these forward-looking statements, which
apply only as of the date on which ORCC makes them. ORCC does not
undertake any obligation to update or revise any forward-looking
statements or any other information contained herein, except as
required by applicable law.
INVESTOR CONTACTS
Investor Contact:
Dana
Sclafani
212-419-3000
owlrockir@blueowl.com
Media Contact:
Prosek Partners
David Wells / Josh Clarkson
pro-owlrock@prosek.com
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SOURCE Owl Rock Capital Corporation