Blue Owl Capital Corp (NYSE:OBDC) announced today the issuance of an additional $400 million in 5.950% notes due 2029, bringing the total outstanding principal amount of these notes to $1 billion. The offering, which was closed on Tuesday, expands on the $600 million in notes previously issued on January 22, 2024.
The newly issued notes, termed as the "New Notes," share identical terms with the existing ones, except for the issue date, offering price, and the initial interest payment date. Both sets of notes are to be treated as a single series under the indenture agreement.
Interest on the notes is payable semiannually, with the first payment for the new issuance due on March 15, 2025. The notes will mature on March 15, 2029, and the company has the option to redeem them before February 15, 2029, at a calculated redemption price or at 100% of the principal amount, plus accrued interest.
Blue Owl Capital intends to use the net proceeds from this offering to pay down its existing indebtedness, including amounts drawn on its senior secured revolving credit facility. The revolving credit facility terms vary based on the type of commitment and currency, with different interest rates and maturity dates ranging up to November 17, 2028.
The indenture includes covenants requiring the company to maintain certain asset coverage ratios as per the Investment Company Act of 1940 and to provide financial information if the company is no longer subject to SEC reporting requirements. Also, in the event of a change of control combined with a downgrade of the notes below investment grade, the company must offer to repurchase the notes.
The notes were offered and sold under a previously filed Registration Statement on Form N-2, supplemented by a prospectus and pricing term sheet dated November 12, 2024.
This summary is based on information provided in a press release statement and reflects the key terms and purposes of the offering without promotional commentary.
"In other recent news, Blue Owl Capital has announced an additional issuance of $400 million in aggregate principal amount of its 5.950% Notes due 2029, a move that is expected to bolster its capital structure and support ongoing operations. The firm has also demonstrated a strong Q3 performance, continuing its streak of double-digit return on equity (ROE) at 12.4%.
The net asset value (NAV) per share was reported at $15.28, with an additional dividend of $0.05 declared, supplementing a base dividend of $0.37 for the fourth quarter.
The company's merger with OBDE is progressing as planned, with closure expected in January 2025. Over $9.5 billion was deployed in capital, with 96% in first lien investments, and the company's total liquidity stands at $2.1 billion, with a net leverage ratio of 1.23x. These recent developments have been a testament to Blue Owl's strategic focus and resilience, particularly in a shifting interest rate landscape.
Regarding future expectations, the company is eyeing expanding lending opportunities in alternative credit, data centers, and insurance sectors. The merger with OBDE is expected to enhance asset allocation and financing efficiency. These are just some of the recent developments surrounding Blue Owl Capital, reflecting the firm's strategic and financial maneuvers."
InvestingPro Insights
Blue Owl Capital Corp's (NYSE:OBDC) recent issuance of additional notes aligns with its robust financial position and dividend strategy. According to InvestingPro data, OBDC boasts a market capitalization of $5.86 billion and a P/E ratio of 9.31, suggesting a potentially undervalued stock relative to earnings. The company's dividend yield stands at an impressive 11.53%, reflecting its commitment to returning value to shareholders.
InvestingPro Tips highlight that OBDC has raised its dividend for 3 consecutive years and pays a significant dividend to shareholders, which is consistent with the company's focus on maintaining strong investor returns. Additionally, the tip indicating that liquid assets exceed short-term obligations supports OBDC's ability to manage its debt effectively, including the new notes issuance.
The company's profitability over the last twelve months, as noted in another InvestingPro Tip, underscores its financial health and ability to sustain its dividend payments. This is further supported by the revenue growth of 6.06% over the last twelve months, demonstrating OBDC's capacity to generate increasing cash flows.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights that could provide a deeper understanding of OBDC's financial position and market performance.
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