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Blue Owl Capital Corporation Reports Second Quarter Net Investment Income Per Share of $0.48 and NAV Per Share of $15.26

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Blue Owl Capital Corporation (NYSE: OBDC) announced its financial results for the second quarter of 2023. Highlights include a record net investment income of $0.48 per share, a 30% increase in total dividends compared to the same period last year, and an increase in net asset value per share. The CEO expressed confidence in the company's ability to generate an ROE of over 12% for 2023. The Board declared a third quarter dividend of $0.33 per share and a second quarter supplemental dividend of $0.07 per share. The company has also completed stock repurchases totaling $75 million. The portfolio and investing activity remained strong, with new investment commitments of $183.0 million and a total fair value of $12.9 billion.
Positive
  • Record net investment income of $0.48 per share
  • 30% increase in total dividends from the same period last year
  • Increase in net asset value per share
  • Confidence in generating an ROE of over 12% for 2023
  • Declaration of third quarter dividend of $0.33 per share
  • Completion of stock repurchases totaling $75 million
  • Strong portfolio and investing activity
Negative
  • None.

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.

 

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

Cision View original content:https://www.prnewswire.com/news-releases/blue-owl-capital-corporation-reports-second-quarter-net-investment-income-per-share-of-0-48-and-nav-per-share-of-15-26--301897274.html

SOURCE Blue Owl Capital Corporation

FAQ

What were the financial highlights for Blue Owl Capital Corporation in the second quarter of 2023?

The financial highlights include a record net investment income of $0.48 per share, a 30% increase in total dividends compared to the same period last year, and an increase in net asset value per share.

What dividends were declared by the Board of Directors?

The Board declared a third quarter dividend of $0.33 per share and a second quarter supplemental dividend of $0.07 per share.

Has the company repurchased any stock?

Yes, the company has completed stock repurchases totaling $75 million.

What is the outlook for the company's performance in 2023?

The CEO expressed confidence in the company's ability to generate an ROE of over 12% for 2023.

What is the total fair value of the company's portfolio?

As of June 30, 2023, the total fair value of the company's portfolio is $12.9 billion.

Blue Owl Capital Corporation

NYSE:OBDC

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5.79B
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