ORCC Owl Rock Capital Corporation

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 9, 2023

 

BLUE OWL CAPITAL CORPORATION

(Exact name of Registrant as Specified in Its Charter)

 

 

Maryland		814-01190		47-5402460
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

399 Park Avenue, 37th Floor New York, NY		10022
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (212) 419-3000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		OBDC		The New York Stock Exchange

 

 

 

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Item 2.02.

Results of Operations and Financial Condition

On August 9, 2023, Blue Owl Capital Corporation (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2023. The press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01.

Financial Statements and Exhibits

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release, dated August 9, 2023.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

				Blue Owl Capital Corporation
August 9, 2023				By:		/s/ Jonathan Lamm
				Name:		Jonathan Lamm
				Title:		Chief Operating Officer and Chief Financial Officer

Exhibit 99.1

Blue Owl Capital Corporation Reports Second Quarter Net Investment Income Per Share of $0.48 and

NAV Per Share of $15.26

NEW YORK — August 9, 2023 — Blue Owl Capital Corporation (NYSE: OBDC, or the “Company” and formerly known as Owl Rock Capital Corporation) today announced financial results for its second quarter ended June 30, 2023.

SECOND QUARTER 2023 HIGHLIGHTS

 

•

Second quarter net investment income (“NII”) of $0.48 per share, which represents the second consecutive quarter of record NII for the Company

 

•

In addition, the Board declared a second quarter supplemental dividend of $0.07 per share

 

•

Total dividends for the second quarter were $0.40 per share, which represents a 30% increase from the same period a year ago

 

•

Delivered NII ROE1 of 12.6% in the second quarter, up from 8.6% the prior year

 

•

Net asset value per share increased to $15.26 compared to $15.15 as of March 31, 2023

Craig W. Packer, Chief Executive Officer of Blue Owl Capital Corporation commented, “OBDC achieved record net investment income for the second straight quarter and continues to deliver strong credit performance. Looking ahead, we believe the Company can generate an ROE in excess of 12% for 2023 based on our current outlook for rates and credit performance.”

Dividend Declarations

The Company’s Board of Directors has declared a third quarter 2023 dividend of $0.33 per share for stockholders of record as of September 29, 2023, payable on or before October 13, 2023 and a second quarter 2023 supplemental dividend of $0.07 per share for stockholders of record as of August 31, 2023, payable on or before September 15, 2023.

Stock Repurchases

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. In addition, in the fourth quarter 2022, certain affiliates and employees of Blue Owl participated in an investment vehicle to purchase up to $25 million of OBDC common stock. As of June 30, 2023, the near-term target of $75 million of OBDC common stock was purchased, of which $50 million was bought by OBDC. The Company purchased 4.1 million shares at an average price of $12.22 per share, which was accretive to net asset value by approximately $0.03 per share.

PORTFOLIO AND INVESTING ACTIVITY

For the three months ended June 30, 2023, new investment commitments totaled $183.0 million across five new portfolio companies and six existing portfolio companies. This compares to $175.1 million for the three months ended March 31, 2023 across three new portfolio companies and eight existing portfolio companies.

For the three months ended June 30, 2023, the principal amount of new investments funded was $169.6 million. For this period, the Company had $566.2 million aggregate principal amount in sales and repayments.

For the three months ended March 31, 2023, the principal amount of new investments funded was $94.3 million. For this period, the Company had $76.1 million aggregate principal amount in sales and repayments.

As of June 30, 2023 and March 31, 2023, the Company had investments in 187 portfolio companies with an aggregate fair value of $12.9 billion and $13.2 billion, respectively. As of June 30, 2023, the average investment size in each portfolio company was $68.9 million based on fair value.

As of June 30, 2023, based on fair value, our portfolio consisted of 69.1% first lien senior secured debt investments, 14.1% second lien senior secured debt investments, 2.1% unsecured debt investments, 2.8% joint ventures², 3.1% preferred equity investments, and 8.8% common equity investments.

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As of March 31, 2023, based on fair value, our portfolio consisted of 70.5% first lien senior secured debt investments, 14.1% second lien senior secured debt investments, 2.0% unsecured debt investments, 2.4% joint ventures², 3.0% preferred equity investments, and 8.0% common equity investments.

As of June 30, 2023 and March 31, 2023, approximately 83.2% and 84.6% of the portfolio was invested in secured debt, respectively. As of June 30, 2023, 98.1% of our debt investments based on fair value in our portfolio were at floating rates.

 

 

(1)	NII ROE is calculated as annualized Q2’23 net investment income divided by average Q2’23 and Q1’23 net asset value.

(2)	Presented as investment funds and vehicles in previous quarters.

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As of June 30, 2023 and March 31, 2023, 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 12.2% and 12.0%, 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 12.2% and 12.0%, respectively.

As of June 30, 2023, three portfolio companies with an aggregate fair value of $99.0 million were on non-accrual status, representing 0.9% of the total fair value of the debt portfolio.

RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2023

Investment Income

Investment income increased to $394.2 million for the three months ended June 30, 2023 from $377.6 million for the three months ended March 31, 2023, primarily due to an increase in our portfolio’s weighted average yield from 11.5% as of March 31, 2023 to 11.7% as of June 30, 2023, partially offset by a decrease in our debt portfolio at par from $11.7 billion as of March 31, 2023 to $11.3 billion as of June 30, 2023. Included in investment income is dividend income which decreased slightly to $38.4 million as of June 30, 2023 from $39.8 million as of March 31, 2023. Also included in investment income are other fees such as prepayment fees and accelerated amortization of upfront fees from unscheduled paydowns. Income generated from these fees increased to $4.3 million as of June 30, 2023 from $0.7 million as of March 31, 2023. Other income increased to $7.4 million as of June 30, 2023 from $3.4 million as of March 31, 2023. This is due to an increase in incremental fee income, which are fees that are generally available as a result of closing investments and normally 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.

Expenses

Total expenses, excluding taxes, increased to $205.2 million for the three months ended June 30, 2023 from $196.4 million for the three months ended March 31, 2023, 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 interest rate. 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 June 30, 2023, we had $368 million in cash and restricted cash, $7.2 billion in total principal value of debt outstanding, and $1.5 billion of undrawn capacity on our credit facilities. The Company’s weighted average interest rate on debt outstanding was 5.4% and 5.2% for the three months ended June 30, 2023 and March 31, 2023, respectively. Ending net debt to equity was 1.14x and 1.21x as of June 30, 2023 and March 31, 2023, respectively.

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CONFERENCE CALL AND WEBCAST INFORMATION

Conference Call Information:

The conference call will be broadcast live on August 10, 2023 at 10:00 a.m. Eastern Time on the Events section of OBDC’s website at www.BlueOwlCapitalCorporation.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:

 

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Domestic: (877) 737-7048

 

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International: +1 (201) 689-8523

All callers will need to reference “Blue Owl 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 OBDC’s website, and via the dial-in numbers listed below:

 

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Domestic: (877) 660-6853

 

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International: +1 (201) 612-7415

 

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Conference ID: 13739247

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FINANCIAL HIGHLIGHTS

 

		For the three months ended
($ in thousands, except per share amounts)		June 30, 2023				March 31, 2023				June 30, 2022
Investments at Fair Value		$	12,892,943			$	13,157,251			$	12,648,126
Total Assets		$	13,393,278			$	13,679,100			$	13,088,383
Net Asset Value Per Share		$	15.26			$	15.15			$	14.48
Investment Income		$	394,223			$	377,622			$	273,286
Net Investment Income		$	186,676			$	177,859			$	125,124
Net Income		$	195,562			$	201,842			$	(34,946	)
Net Investment Income Per Share		$	0.48			$	0.45			$	0.32
Net Realized and Unrealized Gains (and Losses) Per Share		$	0.02			$	0.07			$	(0.41	)
Net Income Per Share		$	0.50			$	0.52			$	(0.09	)
Distributions Declared from Net Investment Income Per Share		$	0.33			$	0.33			$	0.31
Supplemental Distributions Declared from Net Investment Income Per Share		$	0.07			$	0.06			$	—
Weighted Average Yield of Accruing Debt and Income Producing Securities at Fair Value			12.2	%			12.0	%			8.9	%
Weighted Average Yield of Accruing Debt and Income Producing Securities at Amortized Cost			12.2	%			12.0	%			8.8	%
Percentage of Debt Investment Commitments at Floating Rates			98.1	%			98.2	%			98.8	%

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CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(Amounts in thousands, except share and per share amounts)

 

		June 30, 2023 (Unaudited)				December 31, 2022
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $11,584,680 and $12,133,062, respectively)		$	11,550,563			$	12,010,369
Non-controlled, affiliated investments (amortized cost of $19,680 and $6,224, respectively)			19,626				6,175
Controlled, affiliated investments (amortized cost of $1,219,611, and $906,846, respectively)			1,322,754				993,801
Total investments at fair value (amortized cost of $12,823,971 and $13,046,132, respectively)			12,892,943				13,010,345
Cash (restricted cash of $92,975 and $96,420, respectively)			366,208				444,278
Foreign cash (cost of $1,675 and $809, respectively)			1,687				809
Interest receivable			107,767				108,085
Receivable from a controlled affiliate			19,302				17,709
Prepaid expenses and other assets			5,371				3,627
Total Assets		$	13,393,278			$	13,584,853
Liabilities
Debt (net of unamortized debt issuance costs of $85,969 and $95,647, respectively)		$	7,027,176			$	7,281,744
Distribution payable			128,612				129,517
Management fee payable			48,023				47,583
Incentive fee payable			39,598				34,462
Payables to affiliates			6,494				6,351
Accrued expenses and other liabilities			194,411				202,793
Total Liabilities			7,444,314				7,702,450
Commitments and contingencies (Note 7)
Net Assets
Common shares $0.01 par value, 500,000,000 shares authorized; 389,732,875 and 392,476,687 shares issued and outstanding, respectively			3,897				3,925
Additional paid-in-capital			5,936,644				5,970,674
Accumulated undistributed (overdistributed) earnings			8,423				(92,196	)
Total Net Assets			5,948,964				5,882,403
Total Liabilities and Net Assets		$	13,393,278			$	13,584,853
Net Asset Value Per Share		$	15.26				14.99

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CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share amounts)

 

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2023				2022				2023				2022
Investment Income
Investment income from non-controlled, non-affiliated investments:
Interest income		$	297,992			$	206,103			$	586,670			$	414,704
Payment-in-kind interest income			44,803				26,748				87,858				49,159
Dividend income			17,607				9,685				35,440				21,413
Other income			7,243				5,538				10,207				9,386
Total investment income from non-controlled, non-affiliated investments			367,645				248,074				720,175				494,662
Investment income from non-controlled, affiliated investments:
Dividend income			177				—				177				—
Total investment income from non-controlled, affiliated investments:			177				—				177				—
Investment income from controlled, affiliated investments:
Interest income			5,553				1,854				8,227				3,627
Dividend income			20,662				23,195				42,688				38,833
Other Income			186				163				578				325
Total investment income from controlled, affiliated investments			26,401				25,212				51,493				42,785
Total Investment Income			394,223				273,286				771,845				537,447
Expenses
Interest expense			110,017				67,347				213,972				128,726
Management fees			48,024				46,873				96,116				94,286
Performance based incentive fees			39,598				26,541				77,326				52,495
Professional fees			4,131				3,406				7,804				7,235
Directors’ fees			257				266				515				556
Other general and administrative			3,140				2,143				5,811				4,276
Total Operating Expenses			205,167				146,576				401,544				287,574
Net Investment Income (Loss) Before Taxes			189,056				126,710				370,301				249,873
Income tax expense (benefit), including excise tax expense (benefit)			2,380				1,586				5,765				2,394
Net Investment Income (Loss) After Taxes		$	186,676			$	125,124			$	364,536			$	247,479
Net Realized and Change in Unrealized Gain (Loss)
Net change in unrealized gain (loss):
Non-controlled, non-affiliated investments		$	3,869			$	(152,965	)		$	69,292			$	(222,913	)
Non-controlled, affiliated investments			(4	)			—				(5	)			—
Controlled, affiliated investments			6,127				(3,636	)			16,381				(15,394	)
Translation of assets and liabilities in foreign currencies			1,360				(3,221	)			2,570				(3,702	)
Income tax (provision) benefit			(2,415	)			—				(2,696	)			—
Total Net Change in Unrealized Gain (Loss)			8,937				(159,822	)			85,542				(242,009	)
Net realized gain (loss):
Non-controlled, non-affiliated investments			118				(51	)			(52,365	)			4,651
Foreign currency transactions			(169	)			(197	)			(308	)			(1,082	)
Total Net Realized Gain (Loss)			(51	)			(248	)			(52,673	)			3,569
Total Net Realized and Change in Unrealized Gain (Loss)			8,886				(160,070	)			32,869				(238,440	)
Net Increase (Decrease) in Net Assets Resulting from Operations		$	195,562			$	(34,946	)		$	397,405			$	9,039
Earnings Per Share - Basic and Diluted		$	0.50			$	(0.09	)		$	1.02			$	0.02
Weighted Average Shares Outstanding - Basic and Diluted			389,930,979				394,184,560				390,487,912				394,246,724

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PORTFOLIO AND INVESTMENT ACTIVITY

 

		For the Three Months Ended June 30,
($ in thousands)		2023				2022
New investment commitments
Gross originations		$	182,955			$	824,641
Less: Sell downs			—				(221,256	)
Total new investment commitments		$	182,955			$	603,385
Principal amount of investments funded:
First-lien senior secured debt investments		$	110,178			$	242,916
Second-lien senior secured debt investments			—				883
Unsecured debt investments			—				20,462
Preferred equity investments			—				42,665
Common equity investments			16,535				15,120
Joint ventures(1)			42,875				19,250
Total principal amount of investments funded		$	169,588			$	341,296
Principal amount of investments sold or repaid:
First-lien senior secured debt investments		$	(528,569	)		$	(488,251	)
Second-lien senior secured debt investments			(35,850	)			—
Unsecured debt investments			—				—
Preferred equity investments			(1,589	)			—
Common equity investments			(195	)			—
Joint ventures(1)			—				—
Total principal amount of investments sold or repaid		$	(566,203	)		$	(488,251	)
Number of new investment commitments in new portfolio companies(2)			5				16
Average new investment commitment amount		$	23,800			$	15,432
Weighted average term for new debt investment commitments (in years)			3.7				5.9
Percentage of new debt investment commitments at floating rates			100.0	%			100.0	%
Percentage of new debt investment commitments at fixed rates			—	%			—	%
Weighted average interest rate of new debt investment commitments(3)			11.9	%			9.5	%
Weighted average spread over applicable base rate of new floating rate debt investment commitments			6.6	%			7.2	%

 

(1)	Presented as investment funds and vehicles in previous quarters.

(2)	Number of new investment commitments represents commitments to a particular portfolio company.

(3)

For the three months ended June 30, 2023, assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month SOFR, which was 5.27% as of June 30, 2023. For the three months ended June 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 2.12% as of June 30, 2022.

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PORTFOLIO AND INVESTMENT ACTIVITY

 

ABOUT BLUE OWL CAPITAL CORPORATION

Blue Owl Capital Corporation (NYSE: OBDC) is a specialty finance company focused on lending to U.S. middle-market companies. As of June 30, 2023, OBDC had investments in 187 portfolio companies with an aggregate fair value of $12.9 billion. OBDC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. OBDC is externally managed by Blue Owl Credit Advisors LLC, an SEC-registered investment adviser that is an indirect affiliate of Blue Owl Capital Inc. (“Blue Owl”) (NYSE: OWL) and is a part of Blue Owl’s Credit 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 OBDC, 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 OBDC’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 OBDC’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 OBDC makes them. OBDC 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

credit-ir@blueowl.com

Media Contact:

Prosek Partners

Josh Clarkson

pro-blueowl@prosek.com

v3.23.2

Document and Entity Information	Aug. 09, 2023
Cover [Abstract]
Entity Registrant Name	Blue Owl Capital Corp
Amendment Flag	false
Entity Central Index Key	0001655888
Document Type	8-K
Document Period End Date	Aug. 09, 2023
Entity Incorporation State Country Code	MD
Entity File Number	814-01190
Entity Tax Identification Number	47-5402460
Entity Address, Address Line One	399 Park Avenue
Entity Address, Address Line Two	37th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10022
City Area Code	(212)
Local Phone Number	419-3000
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Security 12b Title	Common Stock, par value $0.01 per share
Trading Symbol	OBDC
Security Exchange Name	NYSE

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