NEW
YORK, Aug. 9, 2023 /PRNewswire/ -- 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.
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.
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 $1.5 billion of undrawn capacity on our
credit facilities. The Company's weighted average interest rate on
debt outstanding was 5.4% and 5.2% for the three months ended
June 30, 2023 and March 31, 2023, respectively. Ending net debt to
equity was 1.14x and 1.21x as of June 30,
2023 and March 31, 2023,
respectively.
CONFERENCE CALL AND WEBCAST INFORMATION
Conference Call Information:
The conference
call will be broadcast live on August 10,
2023 at 10:00 a.m. Eastern
Time on the Events section of OBDC's website at
www.BlueOwlCapitalCorporation.com. Please visit the website to test
your connection before the webcast.
Participants are also invited to access the conference call by
dialing one of the following numbers:
- Domestic: (877) 737-7048
- International: +1 (201) 689-8523
All callers will need to reference "Blue Owl Capital
Corporation" once connected with the operator. All callers are
asked to dial in 10-15 minutes prior to the call so that name and
company information can be collected.
Replay Information:
An archived replay will be available for 14 days via a webcast
link located on the Events section of OBDC's website, and via the
dial-in numbers listed below:
- Domestic: (877) 660-6853
- International: +1 (201) 612-7415
- Conference ID: 13739247
(1) NII ROE is
calculated as annualized Q2'23 net investment income divided by
average Q2'23 and Q1'23 net asset value.
(2) Presented as investment funds and vehicles in previous
quarters.
|
FINANCIAL HIGHLIGHTS
|
|
|
|
For the three months ended
|
($ 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 %
|
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
|
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
|
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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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
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SOURCE Blue Owl Capital Corporation