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

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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 

CisionCision
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SOURCE Blue Owl Capital Corporation

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