NEW
YORK, Nov. 8, 2023 /PRNewswire/ -- Blue Owl
Capital Corporation (NYSE: OBDC, or the "Company") today announced
financial results for its third quarter ended September 30,
2023.
THIRD QUARTER 2023 HIGHLIGHTS
- Third quarter net investment income ("NII") of $0.49 per share, which represents the third
consecutive quarter of record NII for the Company
- As a result, Board declared a third quarter supplemental
dividend of $0.08 per share
- Total dividends for the third quarter were $0.41 per share, which represents a 21% increase
from the same period a year ago
- For the fourth quarter 2023, increased quarterly dividend by
$0.02 to $0.35 per share
- Delivered NII ROE1 of
12.7% in the third quarter, up from 10.2% the prior year
- Net asset value per share increased to $15.40 compared to $15.26 as of June 30,
2023, which represents the Company's highest NAV since
inception
Craig W. Packer, Chief Executive
Officer of Blue Owl Capital Corporation commented, "We saw
continued strong momentum in the third quarter, delivering
excellent credit performance across the portfolio and our third
consecutive quarter of record net investment income. These earnings
continue to translate into an attractive return on equity of 12.7%,
in addition to growing dividend distributions for our
shareholders."
Dividend Declarations
The Company's Board of
Directors has declared a fourth quarter 2023 dividend of
$0.35 per share for stockholders of
record as of December 29, 2023,
payable on or before January 12, 2024
and a third quarter 2023 supplemental dividend of $0.08 per share for stockholders of record as of
November 30, 2023, payable on or
before December 15, 2023.
PORTFOLIO AND INVESTING ACTIVITY
For the three months ended September 30, 2023, new
investment commitments totaled $500.2
million across seven new portfolio companies and six
existing portfolio companies. This compares to $183.0 million for the three months ended
June 30, 2023 across five new portfolio companies and six
existing portfolio companies.
For the three months ended September 30, 2023, the
principal amount of new investments funded was $386.6 million. For this period, the Company had
$389.7 million aggregate principal
amount in sales and repayments.
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.
As of September 30, 2023 and June 30, 2023, the
Company had investments in 187 portfolio companies with an
aggregate fair value of $12.9
billion. As of September 30, 2023, the average
investment size in each portfolio company was $69.0 million based on fair value.
As of September 30, 2023, based on fair value, our
portfolio consisted of 68.9% first lien senior secured debt
investments, 13.8% second lien senior secured debt investments,
2.1% unsecured debt investments, 3.1% preferred equity investments,
9.2% common equity investments, and 2.9% joint ventures.
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, 3.1% preferred equity investments, 8.8% common
equity investments, and 2.8% joint ventures.
As of September 30, 2023 and June 30, 2023,
approximately 82.7% and 83.2% of the portfolio was invested in
senior secured debt, respectively. As of September 30, 2023,
97.7% of our debt investments based on fair value in our portfolio
were at floating rates.
As of September 30, 2023 and June 30, 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 12.3% and 12.2%,
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 12.4%
and 12.2%, respectively.
As of September 30, 2023, three portfolio companies with an
aggregate fair value of $103.0
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 SEPTEMBER 30, 2023
Investment Income
Investment income increased
to $399.0 million for the three
months ended September 30, 2023 from $314.1 million for the three months ended
September 30, 2022, primarily due to an increase in our
portfolio's weighted average yield from 10.0% as of September 30, 2022 to 11.8% as of
September 30, 2023, partially offset by a decrease in our debt
investments portfolio from $11.7
billion as of September 30, 2022 to $11.2 billion as of September 30, 2023.
Included in investment income is dividend income which includes
income earned from our controlled, affiliated and non-controlled,
affiliated equity investments. 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 was relatively consistent. Other income
decreased period over period due to a decrease 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 $206.2 million for
the three months ended September 30, 2023 from $165.7 million for the three months ended
September 30, 2022, 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
September 30, 2023, we had $432.0 million in cash and restricted cash,
$7.2 billion in total principal
value of debt outstanding, and $1.4 billion of undrawn capacity on our
credit facilities. The Company's weighted average interest rate on
debt outstanding was 5.6% and 3.9% for the three months ended
September 30, 2023 and September 30, 2022, respectively.
Ending net debt to equity was 1.13x and 1.18x as of
September 30, 2023 and September 30, 2022,
respectively.
CONFERENCE CALL AND WEBCAST INFORMATION
Conference Call Information:
The conference
call will be broadcast live on November 9, 2023 at
10:00 a.m. Eastern Time on the Events
section of OBDC's website at www.BlueOwlCapitalCorporation.com.
Please visit the website to test your connection before the
webcast.
Participants are also invited to access the conference call by
dialing one of the following numbers:
- Domestic: (877) 737-7048
- International: +1 (201) 689-8523
All callers will need to reference "Blue Owl Capital
Corporation" once connected with the operator. All callers are
asked to dial in 10-15 minutes prior to the call so that name and
company information can be collected.
Replay Information:
An archived replay will be
available for 14 days via a webcast link located on the Events
section of OBDC's website, and via the dial-in numbers listed
below:
- Domestic: (877) 660-6853
- International: +1 (201) 612-7415
- Conference ID: 13741060
|
|
|
|
|
|
|
(1)
|
NII ROE is calculated
as annualized Q3'23 net investment income divided by average Q3'23
and Q2'23 net asset value.
|
FINANCIAL
HIGHLIGHTS
|
|
|
|
For the three months
ended
|
($ in thousands, except
per share amounts)
|
|
September 30,
2023
|
|
June 30,
2023
|
|
September 30,
2022
|
Investments at Fair
Value
|
|
$
12,896,158
|
|
$
12,892,943
|
|
$
12,835,918
|
Total Assets
|
|
$
13,461,820
|
|
$
13,393,278
|
|
$
13,413,191
|
Net Asset Value Per
Share
|
|
$
15.40
|
|
$
15.26
|
|
$
14.85
|
|
|
|
|
|
|
|
Investment
Income
|
|
$
399,022
|
|
$
394,223
|
|
$
314,053
|
Net Investment
Income
|
|
$
190,053
|
|
$
186,676
|
|
$
146,774
|
Net Income
|
|
$
206,938
|
|
$
195,562
|
|
$
265,427
|
|
|
|
|
|
|
|
Net Investment Income
Per Share
|
|
$
0.49
|
|
$
0.48
|
|
$
0.37
|
Net Realized and
Unrealized Gains (and
Losses) Per Share
|
|
$
0.04
|
|
$
0.02
|
|
$
0.30
|
Net Income Per
Share
|
|
$
0.53
|
|
$
0.50
|
|
$
0.67
|
Distributions Declared
from Net Investment
Income Per Share
|
|
$
0.33
|
|
$
0.33
|
|
$
0.31
|
Supplemental
Distributions Declared from
Net Investment Income Per Share
|
|
$
0.08
|
|
$
0.07
|
|
$
0.03
|
Weighted Average Yield
of Accruing Debt
and Income Producing Securities at Fair
Value
|
|
12.3 %
|
|
12.2 %
|
|
10.2 %
|
Weighted Average Yield
of Accruing Debt
and Income Producing Securities at
Amortized Cost
|
|
12.4 %
|
|
12.2 %
|
|
10.2 %
|
Percentage of Debt
Investment
Commitments at Floating Rates
|
|
97.7 %
|
|
98.1 %
|
|
98.3 %
|
CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES
(Amounts in thousands, except share and per share
amounts)
|
|
|
|
September 30,
2023
(Unaudited)
|
|
December 31,
2022
|
Assets
|
|
|
|
|
Investments at fair
value
|
|
|
|
|
Non-controlled,
non-affiliated investments (amortized cost of
$11,500,055 and $12,133,062, respectively)
|
|
$
11,471,820
|
|
$
12,010,369
|
Non-controlled,
affiliated investments (amortized cost of $19,352
and $6,224, respectively)
|
|
19,805
|
|
6,175
|
Controlled, affiliated
investments (amortized cost of
$1,303,464, and $906,846,
respectively)
|
|
1,404,533
|
|
993,801
|
Total investments at
fair value (amortized cost of $12,822,871
and $13,046,132, respectively)
|
|
12,896,158
|
|
13,010,345
|
Cash (restricted cash
of $89,264 and $96,420, respectively)
|
|
429,676
|
|
444,278
|
Foreign cash (cost of
$2,357 and $809, respectively)
|
|
2,354
|
|
809
|
Interest
receivable
|
|
107,112
|
|
108,085
|
Receivable from a
controlled affiliate
|
|
22,532
|
|
17,709
|
Prepaid expenses and
other assets
|
|
3,988
|
|
3,627
|
Total
Assets
|
|
$
13,461,820
|
|
$
13,584,853
|
Liabilities
|
|
|
|
|
Debt (net of
unamortized debt issuance costs of $80,535 and
$95,647, respectively)
|
|
$
7,062,399
|
|
$
7,281,744
|
Distribution
payable
|
|
128,612
|
|
129,517
|
Management fee
payable
|
|
47,796
|
|
47,583
|
Incentive fee
payable
|
|
40,314
|
|
34,462
|
Payables to
affiliates
|
|
6,292
|
|
6,351
|
Accrued expenses and
other liabilities
|
|
176,398
|
|
202,793
|
Total
Liabilities
|
|
7,461,811
|
|
7,702,450
|
Commitments and
contingencies (Note 7)
|
|
|
|
|
Net
Assets
|
|
|
|
|
Common shares $0.01 par
value, 500,000,000 shares authorized;
389,732,868 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
|
|
59,468
|
|
(92,196)
|
Total Net
Assets
|
|
6,000,009
|
|
5,882,403
|
Total Liabilities
and Net Assets
|
|
$
13,461,820
|
|
$
13,584,853
|
Net Asset Value Per
Share
|
|
15.40
|
|
14.99
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts in thousands, except share and per share
amounts)
|
|
|
|
For the Three
Months
Ended September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Investment
Income
|
|
|
|
|
|
|
|
|
Investment income from
non-controlled, non-affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$ 307,701
|
|
$ 240,601
|
|
$ 894,371
|
|
$ 655,303
|
Payment-in-kind
interest income
|
|
40,925
|
|
30,539
|
|
128,783
|
|
79,698
|
Dividend
income
|
|
17,324
|
|
14,867
|
|
52,764
|
|
36,280
|
Other
income
|
|
2,332
|
|
5,408
|
|
12,539
|
|
14,794
|
Total investment income
from non-controlled, non-affiliated
investments
|
|
368,282
|
|
291,415
|
|
1,088,457
|
|
786,075
|
Investment income from
non-controlled, affiliated investments:
|
|
|
|
|
|
|
|
|
Dividend
income
|
|
36
|
|
—
|
|
213
|
|
—
|
Total investment income
from non-controlled, affiliated investments
|
|
36
|
|
—
|
|
213
|
|
—
|
Investment income from
controlled, affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
5,717
|
|
2,140
|
|
13,944
|
|
5,767
|
Payment-in-kind
interest income
|
|
773
|
|
—
|
|
773
|
|
—
|
Dividend
income
|
|
24,032
|
|
20,303
|
|
66,720
|
|
59,136
|
Other
Income
|
|
182
|
|
195
|
|
760
|
|
520
|
Total investment income
from controlled, affiliated investments
|
|
30,704
|
|
22,638
|
|
82,197
|
|
65,423
|
Total Investment
Income
|
|
399,022
|
|
314,053
|
|
1,170,867
|
|
851,498
|
Expenses
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
110,445
|
|
81,210
|
|
324,416
|
|
209,935
|
Management
fees
|
|
47,796
|
|
46,886
|
|
143,911
|
|
141,172
|
Performance based
incentive fees
|
|
40,314
|
|
31,134
|
|
117,640
|
|
83,630
|
Professional
fees
|
|
3,890
|
|
3,788
|
|
11,697
|
|
11,022
|
Directors'
fees
|
|
445
|
|
276
|
|
960
|
|
832
|
Other general and
administrative
|
|
3,349
|
|
2,381
|
|
9,158
|
|
6,656
|
Total Operating
Expenses
|
|
206,239
|
|
165,675
|
|
607,782
|
|
453,247
|
Net Investment
Income (Loss) Before Taxes
|
|
192,783
|
|
148,378
|
|
563,085
|
|
398,251
|
Income tax expense
(benefit), including excise tax expense
|
|
2,730
|
|
1,604
|
|
8,495
|
|
3,998
|
Net Investment
Income (Loss) After Taxes
|
|
$ 190,053
|
|
$ 146,774
|
|
$ 554,590
|
|
$ 394,253
|
Net Realized and
Change in Unrealized Gain (Loss)
|
|
|
|
|
|
|
|
|
Net change in
unrealized gain (loss):
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
$
22,371
|
|
$
75,368
|
|
$
91,855
|
|
$
(147,545)
|
Non-controlled,
affiliated investments
|
|
507
|
|
—
|
|
502
|
|
—
|
Controlled, affiliated
investments
|
|
(2,076)
|
|
47,026
|
|
14,113
|
|
31,632
|
Translation of assets
and liabilities in foreign currencies
|
|
(2,292)
|
|
(3,807)
|
|
278
|
|
(7,510)
|
Income tax (provision)
benefit
|
|
(1,521)
|
|
—
|
|
(4,217)
|
|
—
|
Total Net Change in
Unrealized Gain (Loss)
|
|
16,989
|
|
118,587
|
|
102,531
|
|
(123,423)
|
Net realized gain
(loss):
|
|
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
235
|
|
201
|
|
353
|
|
4,853
|
Non-controlled,
affiliated investments
|
|
—
|
|
—
|
|
(52,482)
|
|
—
|
Foreign currency
transactions
|
|
(339)
|
|
(135)
|
|
(647)
|
|
(1,218)
|
Total Net Realized
Gain (Loss)
|
|
(104)
|
|
66
|
|
(52,776)
|
|
3,635
|
Total Net Realized
and Change in Unrealized Gain (Loss)
|
|
16,885
|
|
118,653
|
|
49,755
|
|
(119,788)
|
Net Increase
(Decrease) in Net Assets Resulting from Operations
|
|
$ 206,938
|
|
$ 265,427
|
|
$ 604,345
|
|
$ 274,465
|
Earnings Per Share
- Basic and Diluted
|
|
$
0.53
|
|
$
0.67
|
|
$
1.55
|
|
$
0.70
|
Weighted Average
Shares Outstanding - Basic and Diluted
|
|
389,703,612
|
|
393,823,013
|
|
390,223,606
|
|
394,103,935
|
PORTFOLIO AND INVESTMENT
ACTIVITY
|
|
|
For the Three Months
Ended
September 30,
|
($ in
thousands)
|
2023
|
|
2022
|
New investment
commitments
|
|
|
|
Gross
originations
|
$
510,987
|
|
$
427,436
|
Less: Sell
downs
|
(10,803)
|
|
—
|
Total new investment
commitments
|
$
500,184
|
|
$
427,436
|
Principal amount of
investments funded:
|
|
|
|
First-lien senior
secured debt investments
|
$
363,504
|
|
$
230,494
|
Second-lien senior
secured debt investments
|
—
|
|
—
|
Unsecured debt
investments
|
—
|
|
—
|
Preferred equity
investments
|
—
|
|
24,716
|
Common equity
investments
|
22,266
|
|
17,047
|
Joint
ventures(3)
|
875
|
|
31,500
|
Total principal amount
of investments funded
|
$
386,645
|
|
$
303,757
|
Principal amount of
investments sold or repaid:
|
|
|
|
First-lien senior
secured debt investments
|
$
(342,060)
|
|
$
(206,828)
|
Second-lien senior
secured debt investments
|
(42,663)
|
|
—
|
Unsecured debt
investments
|
—
|
|
(22,433)
|
Preferred equity
investments
|
(4,963)
|
|
—
|
Common equity
investments
|
—
|
|
—
|
Joint
ventures(3)
|
—
|
|
—
|
Total principal amount
of investments sold or repaid
|
$
(389,686)
|
|
$
(229,261)
|
Number of new
investment commitments in new
portfolio companies(1)
|
7
|
|
13
|
Average new
investment commitment amount
|
$
61,240
|
|
$
25,296
|
Weighted average
term for new debt investment
commitments (in years)
|
4.3
|
|
6.0
|
Percentage of new
debt investment commitments at
floating rates
|
92.2 %
|
|
80.8 %
|
Percentage of new
debt investment commitments at
fixed
rates
|
7.8 %
|
|
19.2 %
|
Weighted average
interest rate of new debt investment
commitments(2)
|
11.7 %
|
|
10.5 %
|
Weighted average
spread over applicable base rate of
new floating rate debt investment commitments
|
6.3 %
|
|
6.3 %
|
|
|
|
|
|
|
|
|
(1)
|
Number of new
investment commitments represents commitments to a particular
portfolio company.
|
(2)
|
For the three months
ended September 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 5.40% as of September 30, 2023. 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.
|
(3)
|
This was disclosed as
"Investment funds and vehicles" as of September 30,
2022.
|
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
September 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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content:https://www.prnewswire.com/news-releases/blue-owl-capital-corporation-reports-third-quarter-net-investment-income-per-share-of-0-49-and-nav-per-share-of-15-40-increases-quarterly-dividend-301982373.html
SOURCE Blue Owl Capital Corporation