NEW
YORK, Aug. 3, 2022 /PRNewswire/ -- Owl Rock
Capital Corporation (NYSE: ORCC, or the "Company") today reported
net investment income of $125.1
million, or $0.32 per share,
and net loss of $34.9 million, or
$(0.09) per share, for the second
quarter ended June 30, 2022. Reported net asset value per
share was $14.48 at June 30,
2022 as compared to $14.88 at
March 31, 2022.
Craig W. Packer, Chief Executive
Officer of Owl Rock Capital Corporation commented, "The second
quarter was another strong quarter for our business. Our earnings
exceeded our dividend, our borrowers continued to perform well with
only one name on non-accrual, and more volatile market conditions
are creating attractive direct lending opportunities for which we
are well positioned. Importantly, we also expect our earnings to
benefit from rising interest rates beginning next quarter."
The Company's Board of Directors has declared a third quarter
2022 dividend of $0.31 per share for
stockholders of record as of September 30, 2022, payable on or
before November 15, 2022.
PORTFOLIO AND INVESTING ACTIVITY
For the three months ended June 30, 2022, new investment
commitments totaled $603.4 million
across 16 new portfolio companies and 10 existing portfolio
companies. This compares to $530.4
million for the three months ended March 31, 2022 across 17 new portfolio companies
and 4 existing portfolio companies.
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.
For the three months ended March 31,
2022, the principal amount of new investments funded was
$347.9 million. For this period, the
Company had $374.8 million aggregate
principal amount in sales and repayments.
As of June 30, 2022 and March 31,
2022, the Company had investments in 168 and 157 portfolio
companies with an aggregate fair value of $12.6 billion and $12.8
billion, respectively. As of June 30, 2022, the average
investment size in each portfolio company was $75.3 million based on fair value.
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 March 31, 2022, based on
fair value, our portfolio consisted of 74.0% first lien senior
secured debt investments, 14.7% second lien senior secured debt
investments, 2.1% unsecured debt investments, 2.3% investment funds
and vehicles, 1.9% preferred equity investments, and 5.0% common
equity investments.
As of June 30, 2022 and March 31,
2022, approximately 87.6% and 88.7% of the portfolio was
invested in secured debt, respectively. As of June 30, 2022,
98.8% of our debt investments based on fair value in our portfolio
were at floating rates.
As of June 30, 2022 and March 31,
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 8.9% and 7.9%,
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 8.8%
and 8.0%, respectively.
As of June 30, 2022, 1 portfolio company with an aggregate
fair value of $11.0 million was on
non-accrual status, representing 0.1% of the total fair value of
the debt portfolio.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2022
Investment Income
Investment income increased
to $273.3 million for the three
months ended June 30, 2022 from $249.0
million for the three months ended June 30, 2021. In addition to the growth in the
portfolio, the incremental increase in investment income was
primarily due to an increase in dividend income. 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 increased period-over-period due to an increase 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.
Expenses
Total expenses increased to
$146.6 million for the three months
ended June 30, 2022 from $129.7
million for the three months ended June 30, 2021, which was primarily due to an
increase in interest expense and management 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. Management and incentive fees increased primarily
due to an increase in our investment portfolio and dividend
income.
Liquidity and Capital Resources
As of
June 30, 2022, we had $0.3
billion in cash and restricted cash, $7.2 billion in total principal value of debt
outstanding, and $1.4 billion of
undrawn capacity on our credit facilities. The Company's weighted
average interest rate on debt outstanding was 3.2% and 2.9% for the
three months ended June 30, 2022 and March 31, 2022, respectively. Ending net debt to
equity was 1.20x and 1.17x as of June 30, 2022 and
March 31, 2022, respectively.
CONFERENCE CALL AND WEBCAST INFORMATION
Conference Call Information:
The conference
call will be broadcast live on August 4, 2022 at 10:00 a.m. Eastern Time on the Events section of
ORCC's website at www.OwlRockCapitalCorporation.com. Please visit
the website to test your connection before the webcast.
Participants are also invited to access the conference call by
dialing one of the following numbers:
- Domestic: (877) 737-7048
- International: +1 (201) 689-8523
All callers will need to reference "Owl Rock Capital
Corporation" once connected with the operator. All callers are
asked to dial in 10-15 minutes prior to the call so that name and
company information can be collected.
Replay Information:
An archived replay will be
available for 14 days via a webcast link located on the Events
section of ORCC's website, and via the dial-in numbers listed
below:
- Domestic: (877) 660-6853
- International: +1 (201) 612-7415
- Conference ID: 13731354
FINANCIAL
HIGHLIGHTS
|
|
|
For the three months
ended
|
($ in thousands, except
per share amounts)
|
June 30,
2022
|
March 31,
2022
|
|
June 30,
2021
|
Investments at Fair
Value
|
$
12,648,126
|
$
12,756,323
|
|
$
11,906,872
|
Total Assets
|
$
13,088,383
|
$
13,203,697
|
|
$
12,635,426
|
Net Asset Value Per
Share
|
$
14.48
|
$
14.88
|
|
$
14.90
|
|
|
|
|
|
Investment
Income
|
$
273,286
|
$
264,159
|
|
$
249,015
|
Net Investment
Income
|
$
125,124
|
$
122,356
|
|
$
119,129
|
Net Income
|
$
(34,946)
|
$
43,986
|
|
$
150,180
|
|
|
|
|
|
Net Investment Income
Per Share
|
$
0.32
|
$
0.31
|
|
$
0.30
|
Net Realized and
Unrealized Gains (and
Losses) Per Share
|
$
(0.41)
|
$
(0.20)
|
|
$
0.08
|
Net Income Per
Share
|
$
(0.09)
|
$
0.11
|
|
$
0.38
|
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
|
8.9 %
|
7.9 %
|
|
8.3 %
|
Weighted Average Yield
of Accruing Debt and
Income Producing Securities at Amortized Cost
|
8.8 %
|
8.0 %
|
|
8.2 %
|
Percentage of Debt
Investment Commitments at
Floating Rates
|
98.8 %
|
98.8 %
|
|
99.9 %
|
CONSOLIDATED
STATEMENTS OF ASSETS AND LIABILITIES
(Amounts in
thousands, except share and per share amounts)
|
|
|
|
June 30,
2022
(Unaudited)
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Investments at fair
value
|
|
|
|
|
Non-controlled,
non-affiliated investments (amortized cost of
$12,060,161 and $12,073,126, respectively)
|
|
$
11,845,687
|
|
$
12,124,860
|
Controlled, affiliated
investments (amortized cost of $776,480,
and $575,427, respectively)
|
|
802,439
|
|
616,780
|
Total investments at
fair value (amortized cost of $12,836,641
and $12,648,553, respectively)
|
|
12,648,126
|
|
12,741,640
|
Cash (restricted cash
of $97,374 and $21,481, respectively)
|
|
341,104
|
|
431,442
|
Foreign cash (cost of
$2,176 and $16,096, respectively)
|
|
2,155
|
|
15,703
|
Interest
receivable
|
|
69,062
|
|
81,716
|
Receivable from a
controlled affiliate
|
|
23,195
|
|
3,953
|
Prepaid expenses and
other assets
|
|
4,741
|
|
23,716
|
Total
Assets
|
|
$
13,088,383
|
|
$
13,298,170
|
Liabilities
|
|
|
|
|
Debt (net of
unamortized debt issuance costs of $102,090 and
$110,239, respectively)
|
|
$
7,053,497
|
|
$
7,079,326
|
Distribution
payable
|
|
122,085
|
|
122,068
|
Management fee
payable
|
|
46,873
|
|
46,770
|
Incentive fee
payable
|
|
26,541
|
|
29,242
|
Payables to
affiliates
|
|
4,312
|
|
5,802
|
Accrued expenses and
other liabilities
|
|
130,629
|
|
77,085
|
Total
Liabilities
|
|
7,383,937
|
|
7,360,293
|
Commitments and
contingencies
|
|
|
|
|
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
|
Total distributable
earnings (losses)
|
|
(291,788)
|
|
(56,421)
|
Total Net
Assets
|
|
5,704,446
|
|
5,937,877
|
Total Liabilities
and Net Assets
|
|
$
13,088,383
|
|
$
13,298,170
|
Net Asset Value Per
Share
|
|
$
14.48
|
|
15.08
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Amounts in
thousands, except share amounts)
|
|
|
For the Three
Months
Ended June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Investment
Income
|
|
|
|
|
|
|
|
Investment income from
non-controlled, non-affiliated investments:
|
|
|
|
|
|
|
|
Interest
income
|
$
206,103
|
|
$
225,242
|
|
$
414,704
|
|
$
425,547
|
Payment-in-kind
interest income(1)
|
26,748
|
|
8,074
|
|
49,159
|
|
18,801
|
Dividend
income
|
9,685
|
|
5,765
|
|
21,413
|
|
9,324
|
Other
income
|
5,538
|
|
4,463
|
|
9,386
|
|
7,617
|
Total investment income
from non-controlled, non-affiliated
investments
|
248,074
|
|
243,544
|
|
494,662
|
|
461,289
|
Investment income from
controlled, affiliated investments:
|
|
|
|
|
|
|
|
Interest
income
|
1,854
|
|
1,338
|
|
3,627
|
|
2,641
|
Dividend
income
|
23,195
|
|
3,973
|
|
38,833
|
|
6,341
|
Other
Income
|
163
|
|
160
|
|
325
|
|
317
|
Total investment income
from controlled, affiliated
investments
|
25,212
|
|
5,471
|
|
42,785
|
|
9,299
|
Total Investment
Income
|
273,286
|
|
249,015
|
|
537,447
|
|
470,588
|
Expenses
|
|
|
|
|
|
|
|
Interest
expense
|
67,347
|
|
54,445
|
|
128,726
|
|
102,521
|
Management
fee
|
46,873
|
|
44,007
|
|
94,286
|
|
86,117
|
Performance based
incentive fees
|
26,541
|
|
25,270
|
|
52,495
|
|
47,045
|
Professional
fees
|
3,406
|
|
3,349
|
|
7,235
|
|
7,117
|
Directors'
fees
|
266
|
|
274
|
|
556
|
|
518
|
Other general and
administrative
|
2,143
|
|
2,344
|
|
4,276
|
|
4,162
|
Total Operating
Expenses
|
146,576
|
|
129,689
|
|
287,574
|
|
247,480
|
Net Investment
Income (Loss) Before Taxes
|
126,710
|
|
119,326
|
|
249,873
|
|
223,108
|
Income tax expense
(benefit), including excise tax expense
(benefit)
|
1,586
|
|
197
|
|
2,394
|
|
1,324
|
Net Investment
Income (Loss) After Taxes
|
$
125,124
|
|
$
119,129
|
|
$
247,479
|
|
$
221,784
|
Net Realized and
Change in Unrealized Gain (Loss)
|
|
|
|
|
|
|
|
Net change in
unrealized gain (loss):
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
$ (152,965)
|
|
$
62,407
|
|
$ (222,913)
|
|
$
119,486
|
Income tax (provision)
benefit
|
—
|
|
(1,589)
|
|
—
|
|
(4,222)
|
Controlled affiliated
investments
|
(3,636)
|
|
(1,483)
|
|
(15,394)
|
|
(618)
|
Translation of assets
and liabilities in foreign currencies
|
(3,221)
|
|
(488)
|
|
(3,702)
|
|
(2,920)
|
Total Net Change in
Unrealized Gain (Loss)
|
(159,822)
|
|
58,847
|
|
(242,009)
|
|
111,726
|
Net realized gain
(loss):
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
(51)
|
|
(27,828)
|
|
4,651
|
|
(26,674)
|
Foreign currency
transactions
|
(197)
|
|
32
|
|
(1,082)
|
|
1,189
|
Total Net Realized
Gain (Loss)
|
(248)
|
|
(27,796)
|
|
3,569
|
|
(25,485)
|
Total Net Realized
and Change in Unrealized Gain (Loss)
|
(160,070)
|
|
31,051
|
|
(238,440)
|
|
86,241
|
Net Increase
(Decrease) in Net Assets Resulting from
Operations
|
$
(34,946)
|
|
$
150,180
|
|
$
9,039
|
|
$
308,025
|
Earnings Per Share
- Basic and Diluted
|
$
(0.09)
|
|
$
0.38
|
|
$
0.02
|
|
$
0.79
|
Weighted Average
Shares Outstanding - Basic and
Diluted
|
394,184,560
|
|
391,832,048
|
|
394,246,724
|
|
391,475,389
|
________________
|
(1)
|
For the three and six
months ended June 30, 2021, interest income and payment-in-kind
interest income were reported in
aggregate as interest income.
|
PORTFOLIO AND
INVESTMENT ACTIVITY
|
|
|
|
Three Months Ended
June 30,
|
($ in
thousands)
|
|
2022
|
|
2021
|
New investment
commitments
|
|
|
|
|
Gross
originations
|
|
$
824,641
|
|
$
1,623,008
|
Less: Sell
downs
|
|
(221,256)
|
|
(44,875)
|
Total new investment
commitments
|
|
$
603,385
|
|
$
1,578,133
|
Principal amount of
investments funded:
|
|
|
|
|
First-lien senior
secured debt investments
|
|
$
242,916
|
|
$
816,633
|
Second-lien senior
secured debt investments
|
|
883
|
|
360,595
|
Unsecured debt
investments
|
|
20,462
|
|
—
|
Preferred equity
investments
|
|
42,665
|
|
152,964
|
Common equity
investments
|
|
15,120
|
|
15,182
|
Investment funds and
vehicles
|
|
19,250
|
|
60,251
|
Total principal amount
of investments funded
|
|
$
341,296
|
|
$
1,405,625
|
Principal amount of
investments sold or repaid:
|
|
|
|
|
First-lien senior
secured debt investments
|
|
$
(488,251)
|
|
$
(558,122)
|
Second-lien senior
secured debt investments
|
|
—
|
|
(179,705)
|
Unsecured debt
investments
|
|
—
|
|
—
|
Preferred equity
investments
|
|
—
|
|
—
|
Common equity
investments
|
|
—
|
|
(4,827)
|
Investment funds and
vehicles
|
|
—
|
|
—
|
Total principal amount
of investments sold or repaid
|
|
$
(488,251)
|
|
$
(742,654)
|
Number of new
investment commitments in new portfolio
companies(1)
|
|
16
|
|
16
|
Average new
investment commitment amount
|
|
$
15,432
|
|
$
75,769
|
Weighted average
term for new debt investment
commitments (in years)
|
|
5.9
|
|
6.4
|
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(2)(3)
|
|
9.5 %
|
|
7.6 %
|
Weighted average
spread over applicable base rate of new
floating rate debt investment commitments
|
|
7.2 %
|
|
6.7 %
|
________________
|
(1)
|
Number of new
investment commitments represents commitments to a particular
portfolio company.
|
(2)
|
For the three months
ended June 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 0.15% as of June 30, 2021.
|
(3)
|
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.
|
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
June 30, 2022, ORCC had investments in 168 portfolio companies
with an aggregate fair value of $12.6
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