KBRA Assigns Rating to Blue Owl Capital Corporation's $400 Million Senior Unsecured Notes
KBRA has assigned a BBB+ rating with a Stable outlook to Blue Owl Capital 's (NYSE: OBDC) $400 million, 5.95% senior unsecured notes due 2029. The rating reflects OBDC's connection to the $128.4 billion Blue Owl Credit platform and its strong position in the private credit market. The company maintains a $13.4 billion investment portfolio across 219 companies, focusing on senior secured first lien loans. Key strengths include solid liquidity with $1.3 billion in available credit lines, $427 million in unrestricted cash, and a diverse funding profile. OBDC plans to merge with Blue Owl Capital III (OBDE) in Q1 2025, potentially becoming the second-largest publicly traded BDC with approximately $17.7 billion in investments.
KBRA ha assegnato un rating BBB+ con un outlook stabile a Blue Owl Capital (NYSE: OBDC) per le note senior non garantite da 400 milioni di dollari, con un tasso del 5,95% e scadenza nel 2029. Il rating riflette il legame di OBDC con la piattaforma Blue Owl Credit da 128,4 miliardi di dollari e la sua forte posizione nel mercato del credito privato. L'azienda gestisce un portafoglio di investimenti di 13,4 miliardi di dollari, suddiviso in 219 aziende, concentrandosi su prestiti senior garantiti di primo grado. I punti di forza chiave includono una solida liquidità con 1,3 miliardi di dollari in linee di credito disponibili, 427 milioni di dollari in contante non vincolato e un profilo di finanziamento diversificato. OBDC prevede di fondersi con Blue Owl Capital III (OBDE) nel primo trimestre del 2025, diventando potenzialmente il secondo BDC quotato in pubblico più grande, con circa 17,7 miliardi di dollari in investimenti.
KBRA ha asignado una calificación BBB+ con una perspectiva estable a Blue Owl Capital (NYSE: OBDC) para sus notas senior no garantizadas de 400 millones de dólares, con un interés del 5.95% y vencimiento en 2029. La calificación refleja la conexión de OBDC con la plataforma de crédito Blue Owl, que asciende a 128.4 mil millones de dólares, y su sólida posición en el mercado de crédito privado. La compañía mantiene un portafolio de inversión de 13.4 mil millones de dólares en 219 empresas, con un enfoque en préstamos senior garantizados de primer nivel. Las fortalezas clave incluyen una sólida liquidez con 1.3 mil millones de dólares en líneas de crédito disponibles, 427 millones de dólares en efectivo sin restricciones y un perfil de financiación diversificado. OBDC planea fusionarse con Blue Owl Capital III (OBDE) en el primer trimestre de 2025, convirtiéndose potencialmente en el segundo BDC cotizado en bolsa más grande, con aproximadamente 17.7 mil millones de dólares en inversiones.
KBRA는 Blue Owl Capital (NYSE: OBDC)의 4억 달러 규모, 5.95%의 만기 없는 선순위 채권에 대해 BBB+ 등급과 안정적인 전망을 부여했습니다. 이 등급은 OBDC가 1284억 달러 규모의 Blue Owl Credit 플랫폼과 연결되어 있으며, 민간 신용 시장에서의 강한 입지를 반영합니다. 회사는 219개 기업에 걸쳐 134억 달러의 투자 포트폴리오를 유지하며, 선순위 보장 첫 번째 담보 대출에 집중하고 있습니다. 주요 강점으로는 13억 달러의 사용 가능한 신용 한도, 4억 2700만 달러의 제한 없는 현금, 그리고 다양한 자금 조달 프로필이 있습니다. OBDC는 2025년 1분기에 Blue Owl Capital III (OBDE)와 합병할 계획이며, 이는 약 177억 달러의 투자를 통해 두 번째로 큰 상장 BDC가 될 가능성이 있습니다.
KBRA a attribué une note BBB+ avec une perspective stable à Blue Owl Capital (NYSE: OBDC) pour ses obligations senior non garanties de 400 millions de dollars, avec un taux de 5,95 % et une maturité en 2029. Cette note reflète le lien d'OBDC avec la plateforme de crédit Blue Owl de 128,4 milliards de dollars et sa forte position sur le marché du crédit privé. L'entreprise maintient un portefeuille d'investissement de 13,4 milliards de dollars réparti sur 219 entreprises, en se concentrant sur les prêts senior garantis de premier rang. Les forces clés incluent une liquidité solide avec 1,3 milliard de dollars de lignes de crédit disponibles, 427 millions de dollars en liquidités non restreintes et un profil de financement diversifié. OBDC prévoit de fusionner avec Blue Owl Capital III (OBDE) au premier trimestre de 2025, devenant potentiellement le deuxième BDC cotée en bourse le plus important, avec environ 17,7 milliards de dollars d'investissements.
KBRA hat Blue Owl Capital (NYSE: OBDC) eine BBB+-Bewertung mit stabiler Aussicht für die 400 Millionen US-Dollar, 5,95 % Senior-ungesicherte Anleihen mit Fälligkeit im Jahr 2029 zugeordnet. Die Bewertung spiegelt die Verbindung von OBDC zur 128,4 Milliarden US-Dollar schweren Blue Owl Credit-Plattform und seine starke Position im privaten Kreditmarkt wider. Das Unternehmen verwaltet ein Anlageportfolio von 13,4 Milliarden US-Dollar über 219 Unternehmen und konzentriert sich auf senior gesicherte Ersthypothekendarlehen. Zu den wichtigsten Stärken gehören eine solide Liquidität mit 1,3 Milliarden US-Dollar an verfügbaren Kreditlinien, 427 Millionen US-Dollar an unbeschränktem Bargeld und ein diversifiziertes Finanzierungsprofil. OBDC plant, im ersten Quartal 2025 mit Blue Owl Capital III (OBDE) zu fusionieren und könnte damit der zweitgrößte börsennotierte BDC mit etwa 17,7 Milliarden US-Dollar an Anlagen werden.
- Strong liquidity position with $1.3B in available credit lines and $427M in unrestricted cash
- Diverse portfolio of $13.4B across 219 companies with 75.9% in senior secured first lien loans
- Low non-accrual rate of 1.8% at cost and 0.6% at fair value
- Solid asset coverage ratio of 176%, well above the 150% regulatory minimum
- Upcoming merger with OBDE will create second-largest publicly traded BDC with $17.7B in investments
- Leverage ratios at upper range of target (1.23x net leverage vs 0.9x-1.25x target)
- Expected pressure on net investment income due to anticipated interest rate cuts
- High portfolio growth with unseasoned investments poses potential risks
- Significant unfunded commitments of $1.6B
Insights
The BBB+ rating for OBDC's
The financial metrics are solid with gross leverage at 1.31x and net leverage at 1.23x. The upcoming merger with OBDE will create the second-largest publicly traded BDC, adding
Key Credit Considerations
The rating is supported by OBDC's ties to the
The rating also reflects the company's solid access to debt capital markets along with its comparatively stronger funding profile among KBRA rated BDCs. The already diverse funding profiles of OBDC and other Blue Owl BDCs have been further enhanced in recent periods. Funding sources include significant committed bank lines of credit, CLOs, and cost effective access to the senior unsecured note market. The funding structure provides significant financial flexibility and lower asset encumbrance with an unsecured debt to total debt ratio of
In August, the company announced that it has entered into a definitive merger agreement with Blue Owl Capital Corporation III (NYSE: OBDE) with OBDC as the surviving entity. Pending shareholder approval, the merger is expected to close in 1Q25 and will add
OBDC’s profitability has benefited from the rising interest rate environment with an asset sensitive balance sheet with the majority of its investments variable rate loans. Going forward, net investment income (NII) will likely be pressured from the Federal Reserve's path to cut interest rates along with competitive pressures. We expect NII and margins to decline from currently high levels but remain within our rating expectations.
The strengths are counterbalanced by the potential industrywide risks related to the company's illiquid investments, an unseasoned investment portfolio with high portfolio growth, retained earnings constraints as a Regulated Investment Company (RIC), and the potential for increased non-accruals with a more uncertain economic environment with high base rates, inflation, and geopolitical risk. KBRA believes that OBDC and other Blue Owl BDCs will remain comparatively resilient.
Blue Owl Capital Corporation is an externally managed, non-diversified closed-end management investment company that has elected to be treated as a Business Development Company under the 1940 Act and has elected to be treated as a RIC, which, among other things, must distribute to its shareholders at least
Rating Sensitivities
Ratings are unlikely to be upgraded in the medium term. A rating downgrade and/or Outlook change to Negative could be considered if there is a significant downturn in the
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Methodologies
Disclosures
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the
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Analytical Contacts
Teri Seelig, Managing Director (Lead Analyst)
+1 646-731-2386
teri.seelig@kbra.com
Kevin Kent, Director (Rating Committee Chair)
+1 301-960-7045
kevin.kent@kbra.com
Business Development Contact
Constantine Schidlovsky, Senior Director
+1 646-731-1338
constantine.schidlovsky@kbra.com
Source: Kroll Bond Rating Agency, LLC
FAQ
What rating did KBRA assign to OBDC's $400M senior unsecured notes?
When is OBDC expected to complete its merger with Blue Owl Capital III?
What is OBDC's current portfolio size and composition as of September 2024?
What is OBDC's current asset coverage ratio?
