NEW
YORK, Feb. 21, 2024 /PRNewswire/ -- Blue Owl
Capital Corporation III (NYSE: OBDE, or the "Company") today
announced financial results for its full year and fourth quarter
ended December 31, 2023.
HIGHLIGHTS FOR FULL YEAR AND QUARTER ENDED DECEMBER 31, 2023
- Record net investment income ("NII") per share of $0.58
- Dividend per share of $0.49 for
the fourth quarter, which represents a 12.7% annualized yield based
on fourth quarter net asset value ("NAV") per share
- For the fourth quarter, dividend declared was 90% of estimated
fourth quarter taxable income and net capital gains
- Delivered annualized NII
ROE1 of 15.1% in the fourth quarter, up from
12.9% in Q4'22
- NAV per share increased to $15.56
compared to $15.40 as of September 30, 2023
"OBDE finished 2023 with strong performance and entered 2024
with momentum, successfully listing on the New York Stock Exchange
in January as one of the largest BDCs in the public market," said
Craig W. Packer, Chief Executive
Officer. "Our portfolio has demonstrated resilience over the past
year, and we expect to build on that in 2024 and continue to
deliver attractive risk-adjusted returns for our shareholders."
Dividend Declarations
The Company's Board of
Directors (the "Board") declared a first quarter 2024 dividend of
$0.35 per share for stockholders of
record as of March 29, 2024, payable
on or before April 15, 2024.
In addition and as previously announced, in conjunction with
OBDE's listing in January 2024, the
Board declared a series of five special dividends of $0.06 per share, payable to stockholders of
record quarterly beginning in the second quarter 2024. A full
schedule of the record and payment dates can be found on the
Company's website.
Stock Repurchase Program
On January 12, 2024, the Board approved a stock
repurchase program under which OBDE may repurchase up to
$100 million of its common stock in
the open market from time to time.
PORTFOLIO AND INVESTING ACTIVITY
Full Year
For the full year ended December 31, 2023, new investment
commitments totaled $596.5 million
across 29 new portfolio companies and 24 existing portfolio
companies.
This compares to $636.9 million
for the full year ended December 31, 2022 across 50 new
portfolio companies and 11 existing portfolio companies.
For the full year ended December 31, 2023, the principal
amount of new investments funded was $487.8
million. For this period, the Company had $458.1 million aggregate principal amount in
sales and repayments.
For the full year ended December 31, 2022, the principal
amount of new investments funded was $493.9
million. For this period, the Company had $66.7 million aggregate principal amount in sales
and repayments.
Fourth Quarter
For the three months ended December 31, 2023, new
investment commitments totaled $435.9
million across 17 new portfolio companies and 13 existing
portfolio companies.
This compares to $77.1 million for
the three months ended September 30, 2023 across 7 new
portfolio companies and 7 existing portfolio companies, and
$136.7 million for the three months
ended December 31, 2022 across 5 new portfolio companies and 1
existing portfolio company.
For the three months ended December 31, 2023, the principal
amount of new investments funded was $350.8
million. For this period, the Company had $328.4 million aggregate principal amount in
sales and repayments.
For the three months ended September 30, 2023, the
principal amount of new investments funded was $64.3 million. For this period, the Company had
$61.3 million aggregate principal
amount in sales and repayments.
For the three months ended December 31, 2022, the principal
amount of new investments funded was $125.7
million. For this period, the Company had $10.3 million aggregate principal amount in sales
and repayments.
As of December 31, 2023 and September 30, 2023, the
Company had investments in 153 and 146 portfolio companies with an
aggregate fair value of $3.6 billion
and $3.6 billion, respectively. As of
December 31, 2023, the average investment size in each
portfolio company was $23.5 million
based on fair value.
As of December 31, 2023, based on fair value, our portfolio
consisted of 76.4% first lien senior secured debt investments,
12.1% second lien senior secured debt investments, 1.7% unsecured
debt investments, 5.2% preferred equity investments, and 4.6%
common equity investments.
As of September 30, 2023, based on fair value, our
portfolio consisted of 77.2% first lien senior secured debt
investments, 11.9% second lien senior secured debt investments,
1.6% unsecured debt investments, 4.9% preferred equity investments,
and 4.4% common equity investments.
As of December 31, 2023 and September 30, 2023,
approximately 88.5% and 89.1% of the portfolio was invested in
secured debt, respectively. As of December 31, 2023, 98.1% of
our debt investments based on fair value in our portfolio were at
floating rates.
As of December 31, 2023 and September 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 12.1% 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 12.1%
and 12.0%, respectively.
As of December 31, 2023, two portfolio companies with an
aggregate debt investment fair value of $18.8 million were on non-accrual status,
representing 0.6% of the total fair value of the debt
portfolio.
RESULTS OF OPERATIONS FOR THE FULL YEAR AND QUARTER ENDED
DECEMBER 31, 2023
Investment Income
Investment income increased by $143.9
million to $422.8 million for
the year ended December 31, 2023 from $278.9 million for the same period in prior year
primarily due to an increase in interest income as a result of an
increase in the base rates charged on our floating rate debt
investments and debt investments made during the prior year earning
a full year's worth of interest income during the year ended
December 31, 2023. Dividend income
increased period-over-period due to an increase in our portfolio of
dividend income-producing equity investments which, at cost,
increased from $146.0 million as of
December 31, 2022 to $175.3
million as of December 31, 2023. Included in interest
income are other fees such as prepayment fees and accelerated
amortization of upfront fees from unscheduled paydowns which are
non-recurring in nature. Period over period, these fees increased
due to an increase in repayment activity for the period. 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.
Investment income increased to $111.5
million for the three months ended December 31, 2023
from $90.1 million for the three
months ended December 31, 2022.
Expenses
Total expenses increased by $60.9
million to $149.0 million for
the year ended December 31, 2023 from $88.1 million for the same period in prior year
due to an increase in management fees, interest expense and other
expenses. The increase in interest expense was driven by an
increase in average daily borrowings, as well as an increase in the
average interest rate period over period. Management fees increased
primarily due to an increase in our investment portfolio. As a
percentage of total assets, professional fees, directors' fees and
other general and administrative expenses remained relatively
consistent period over period.
Total expenses increased to $39.7
million for the three months ended December 31, 2023
from $31.5 million for the three
months ended December 31, 2022.
Liquidity and Capital Resources
As of December 31, 2023, we had $141.4 million in cash, $1.8 billion in total principal value of debt
outstanding, and $746.9 million of
undrawn capacity on our credit facilities. The Company's weighted
average interest rate on debt outstanding was 6.9% and 6.8% for the
three months ended December 31, 2023 and September 30,
2023, respectively. Ending net debt to equity was 0.86x and 0.86x
as of December 31, 2023 and September 30, 2023,
respectively.
|
|
|
|
(1) NII ROE is
calculated as annualized quarterly net investment income divided by
average beginning and ending net asset value
|
ABOUT BLUE OWL CAPITAL CORPORATION III
Blue Owl Capital Corporation III (NYSE: OBDE) is a specialty
finance company focused on lending to U.S. middle-market companies.
As of December 31, 2023, OBDE had investments in 153 portfolio
companies with an aggregate fair value of $3.6 billion. OBDE has elected to be
regulated as a business development company under the Investment
Company Act of 1940, as amended. OBDE is externally managed by Blue
Owl Diversified Credit Advisors, 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 OBDE, 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 OBDE'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 OBDE'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 OBDE makes them. OBDE 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
|
FINANCIAL
HIGHLIGHTS
|
|
|
|
|
|
For the three months
ended
|
|
($ in thousands, except
per share amounts)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
|
Investments at Fair
Value
|
|
$
3,590,701
|
|
$
3,565,615
|
|
$
3,466,765
|
|
Total Assets
|
|
$
3,761,097
|
|
$
3,672,136
|
|
$
3,552,739
|
|
Net Asset Value Per
Share
|
|
15.56
|
|
15.40
|
|
15.03
|
|
|
|
|
|
|
|
|
Investment
Income
|
|
$
111,542
|
|
$
107,216
|
|
$
90,093
|
|
Net Investment
Income
|
|
$
71,647
|
|
$
69,083
|
|
$
58,402
|
|
Net Income
|
|
$
80,557
|
|
$
73,493
|
|
$
60,440
|
|
|
|
|
|
|
|
|
Net Investment Income
Per Share
|
|
$
0.58
|
|
$
0.56
|
|
$
0.49
|
|
Net Realized and
Unrealized Gains (and
Losses) Per Share
|
|
$
0.07
|
|
$
0.04
|
|
$
0.02
|
|
Net Income Per
Share
|
|
$
0.66
|
|
$
0.60
|
|
$
0.50
|
|
Distributions Declared
from Net
Investment Income Per Share
|
|
$
0.49
|
|
$
0.48
|
|
$
0.42
|
|
Weighted Average Yield
of Accruing Debt
and Income Producing Securities at Fair
Value
|
|
12.1 %
|
|
12.0 %
|
|
11.4 %
|
|
Weighted Average Yield
of Accruing Debt
and Income Producing Securities at
Amortized Cost
|
|
12.1 %
|
|
12.0 %
|
|
11.3 %
|
|
Percentage of Debt
Investments at Floating
Rates at Fair Value
|
|
98.1 %
|
|
97.9 %
|
|
98.2 %
|
|
CONSOLIDATED
STATEMENTS OF ASSETS AND LIABILITIES
(Amounts in
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
|
Investments at fair
value
|
|
|
|
|
|
Non-controlled,
non-affiliated investments (amortized cost of
$3,479,371 and $3,463,668, respectively)
|
|
$
3,498,800
|
|
$
3,437,381
|
|
Non-controlled,
affiliated investments (amortized cost of $97,482
and $29,418, respectively)
|
|
91,901
|
|
29,384
|
|
Total investments at
fair value (amortized cost of $3,576,853 and
$3,493,086, respectively)
|
|
3,590,701
|
|
3,466,765
|
|
Cash
|
|
141,448
|
|
60,053
|
|
Interest
receivable
|
|
25,147
|
|
21,966
|
|
Prepaid expenses and
other assets
|
|
3,801
|
|
3,955
|
|
Total
Assets
|
|
$
3,761,097
|
|
$
3,552,739
|
|
Liabilities
|
|
|
|
|
|
Debt (net of
unamortized debt issuance costs of $25,623 and
$21,092, respectively)
|
|
$
1,754,496
|
|
$
1,660,310
|
|
Distribution
payable
|
|
60,779
|
|
50,425
|
|
Management fee
payable
|
|
4,517
|
|
4,173
|
|
Payables to
affiliates
|
|
896
|
|
1,926
|
|
Accrued expenses and
other liabilities
|
|
29,297
|
|
22,024
|
|
Total
Liabilities
|
|
1,849,985
|
|
1,738,858
|
|
Commitments and
contingencies (Note 7)
|
|
|
|
|
|
Net
Assets
|
|
|
|
|
|
Common shares $0.01 par
value, 500,000,000 shares authorized;
122,817,625 and 120,693,049 shares issued and outstanding,
respectively
|
|
$
1,228
|
|
$
1,207
|
|
Additional
paid-in-capital
|
|
1,829,029
|
|
1,798,712
|
|
Accumulated
undistributed (overdistributed) earnings
|
|
80,855
|
|
13,962
|
|
Total Net
Assets
|
|
1,911,112
|
|
1,813,881
|
|
Total Liabilities
and Net Assets
|
|
$
3,761,097
|
|
$
3,552,739
|
|
Net Asset Value Per
Share
|
|
15.56
|
|
15.03
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Amounts in
thousands, except share and per share amounts)
|
|
|
|
For the Year Ended
December 31,
|
|
2023
|
|
2022
|
|
2021
|
|
Investment
Income
|
|
|
|
|
|
|
Investment income from
non-controlled, non-affiliated investments:
|
|
|
|
|
|
|
Interest income
(excluding payment-in-kind ("PIK") interest income)
|
$
345,962
|
|
$
227,727
|
|
$
85,019
|
|
PIK interest
income
|
45,461
|
|
34,570
|
|
10,070
|
|
Dividend
income
|
22,133
|
—
|
12,415
|
—
|
2,962
|
|
Other
income
|
7,291
|
|
3,950
|
|
3,180
|
|
Total investment income
from non-controlled, non-affiliated investments
|
420,847
|
|
278,662
|
|
101,231
|
|
Investment income from
non-controlled, affiliated investments:
|
|
|
|
|
|
|
Interest income
(excluding payment-in-kind ("PIK") interest income)
|
182
|
|
—
|
|
—
|
|
Payment-in-kind
("PIK") interest income
|
237
|
|
—
|
|
—
|
|
Dividend
income
|
1,553
|
|
201
|
|
—
|
|
Other
income
|
10
|
|
—
|
|
—
|
|
Total investment income
from non-controlled, affiliated
investments
|
1,982
|
|
201
|
|
—
|
|
Total Investment
Income
|
422,829
|
|
278,863
|
|
101,231
|
|
Expenses
|
|
|
|
|
|
|
Interest
expense
|
121,679
|
|
64,924
|
|
20,113
|
|
Management
fee
|
17,863
|
|
15,360
|
|
5,471
|
|
Professional
fees
|
5,187
|
|
4,037
|
|
2,599
|
|
Directors'
fees
|
909
|
|
1,165
|
|
1,116
|
|
Other general and
administrative
|
3,397
|
|
2,601
|
|
2,063
|
|
Total
Expenses
|
149,035
|
|
88,087
|
|
31,362
|
|
Net Investment
Income (Loss) Before Taxes
|
273,794
|
|
190,776
|
|
69,869
|
|
Income tax expense
(benefit), including excise tax expense (benefit)
|
1,833
|
|
862
|
|
228
|
|
Net Investment
Income (Loss) After Taxes
|
$
271,961
|
|
$
189,914
|
|
$
69,641
|
|
Net Realized and
Change in Unrealized Gain (Loss)
|
|
|
|
|
|
|
Net change in
unrealized gain (loss):
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
41,676
|
|
(28,873)
|
|
5,436
|
|
Non-controlled,
affiliated investments
|
(5,547)
|
|
(34)
|
|
—
|
|
Translation of assets
and liabilities in foreign currencies
|
710
|
|
608
|
|
(804)
|
|
Income tax (provision)
benefit
|
(1)
|
|
—
|
|
—
|
|
Total Net Change in
Unrealized Gain (Loss)
|
36,838
|
|
(28,299)
|
|
4,632
|
|
Net realized gain
(loss):
|
|
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
(11,206)
|
|
874
|
|
292
|
|
Non-controlled,
affiliated investments
|
—
|
|
319
|
|
—
|
|
Foreign currency
transactions
|
(37)
|
|
(603)
|
|
680
|
|
Total Net Realized
Gain (Loss)
|
(11,243)
|
|
590
|
|
972
|
|
Total Net Realized
and Change in Unrealized Gain (Loss)
|
25,595
|
|
(27,709)
|
|
5,604
|
|
Net Increase
(Decrease) in Net Assets Resulting from Operations
|
$
297,556
|
|
$
162,205
|
|
$
75,245
|
|
Earnings (Loss) Per
Share - Basic and Diluted
|
$
2.44
|
|
$
1.40
|
|
$
1.67
|
|
Weighted Average
Shares Outstanding - Basic and Diluted
|
122,045,758
|
|
116,045,926
|
|
45,110,198
|
|
PORTFOLIO AND
INVESTMENT ACTIVITY
|
|
|
|
For the Year Ended
December 31,
|
|
($ in
thousands)
|
2023
|
|
2022
|
|
2021
|
|
New investment
commitments
|
|
|
|
|
|
|
Gross
originations
|
598,504
|
|
647,766
|
|
2,971,231
|
|
Less: Sell
downs
|
(2,021)
|
|
(10,903)
|
|
(47,546)
|
|
Total new investment
commitments
|
$
596,483
|
|
$
636,863
|
|
$
2,923,685
|
|
Principal amount of
investments funded:
|
|
|
|
|
|
|
First-lien senior
secured debt investments
|
434,318
|
|
363,932
|
|
1,947,683
|
|
Second-lien senior
secured debt investments
|
—
|
|
26,883
|
|
344,453
|
|
Unsecured debt
investments
|
—
|
|
8,883
|
|
25,065
|
|
Preferred equity
investments
|
25,030
|
|
50,972
|
|
79,090
|
|
Common equity
investments
|
28,422
|
|
43,232
|
|
65,407
|
|
Total principal amount
of investments funded
|
$
487,770
|
|
$
493,902
|
|
$
2,461,698
|
|
Principal amount of
investments sold or repaid:
|
|
|
|
|
|
|
First-lien senior
secured debt investments
|
(438,852)
|
|
(52,594)
|
|
(58,607)
|
|
Second-lien senior
secured debt investments
|
(13,268)
|
|
(1,200)
|
|
(23,556)
|
|
Unsecured debt
investments
|
(36)
|
|
(1,704)
|
|
—
|
|
Preferred equity
investments
|
(5,768)
|
|
(3,807)
|
|
—
|
|
Common equity
investments
|
(195)
|
|
(7,350)
|
|
—
|
|
Total principal amount
of investments sold or repaid
|
$
(458,119)
|
|
$
(66,655)
|
|
$
(82,163)
|
|
Number of new
investment commitments in new portfolio
companies(1)
|
29
|
|
50
|
|
68
|
|
Average new
investment commitment amount
|
$
16,021
|
|
$
12,737
|
|
$
38,820
|
|
Weighted average
term for new debt investment
commitments (in years)
|
6.1
|
|
6.1
|
|
7.1
|
|
Percentage of new
debt investment commitments at
floating rates
|
96.1 %
|
|
95.5 %
|
|
98.8 %
|
|
Percentage of new
debt investment commitments at
fixed
rates
|
3.9 %
|
|
4.5 %
|
|
1.2 %
|
|
Weighted average
interest rate of new debt investment
commitments(2)(3)
|
11.4 %
|
|
11.3 %
|
|
7.0 %
|
|
Weighted average
spread over applicable base rate of new
floating rate debt investment commitments
|
6.1 %
|
|
6.7 %
|
|
6.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Number of new
investment commitments represents commitments to a particular
portfolio company.
|
|
(2) For the year ended
December 31, 2021 assumes each floating rate commitment is subject
to the greater of the interest rate floor (if applicable)
or 3-month LIBOR, which was 0.21%.
|
|
(3) For the year ended
December 31, 2023 and 2022, assumes each floating rate
commitment is subject to the greater of the interest rate floor
(if
applicable) or 3-month SOFR, which was 5.33% and 4.59%,
respectively.
|
View original
content:https://www.prnewswire.com/news-releases/blue-owl-capital-corporation-iii-reports-full-year-results-and-fourth-quarter-net-investment-income-per-share-of-0-58-and-nav-per-share-of-15-56--302068064.html
SOURCE Blue Owl Capital Corporation III