BLUE OWL CAPITAL ANNOUNCES PRICING OF SENIOR NOTES OFFERING

Rhea-AI Summary

Blue Owl Capital Inc. announces the pricing of $750 million Senior Notes due 2034, with proceeds intended for debt repayment and general corporate purposes.

Positive

• Blue Owl Capital Inc. successfully priced $750,000,000 of 6.250% Senior Notes due 2034.
• The notes will be fully guaranteed by various entities under Blue Owl.
• Proceeds from the offering will be used to repay outstanding borrowings and for general corporate purposes.
• Blue Owl intends to potentially use the remaining net proceeds for strategic acquisitions or growth initiatives.
• The offering is subject to customary closing conditions and will target qualified institutional buyers and non-U.S. persons.
• The Company plans to enter into a registration rights agreement for the notes.
• The notes have not been registered under the Securities Act or state securities laws.

Negative

• None.

Insights

Financial Analyst

The issuance of $750,000,000 of 6.250% Senior Notes due 2034 by Blue Owl Capital Inc. is a significant move in terms of corporate financing. This action suggests a strategic approach to capital structure management, where the company is taking advantage of the current interest rate environment to lock in long-term financing at a fixed rate. The decision to use the proceeds to repay existing debt under their revolving credit facility indicates a focus on reducing short-term liabilities and interest expenses, which could improve the company's balance sheet and financial ratios such as the debt-to-equity ratio and interest coverage ratio.

Furthermore, the earmarking of funds for potential strategic acquisitions or growth initiatives indicates an expansionary strategy. Investors should monitor the deployment of these funds as successful acquisitions can lead to revenue growth and increased market share, while unsuccessful ones can become a financial burden. The use of a registration rights agreement is also noteworthy as it could potentially increase the future liquidity of the notes, making them more attractive to institutional investors.

Legal Expert

Blue Owl Capital's decision to offer the notes under Rule 144A and Regulation S is a common practice for private placements to qualified institutional buyers and non-U.S. persons, respectively. These regulations allow the company to raise capital without the need for a public offering, which can be a faster and less costly process. However, it's important to note that these notes will be subject to restrictions on resale, limiting their marketability to certain investor types.

The lack of registration under the Securities Act means that the company is not subject to the same level of disclosure and regulatory oversight as it would be in a public offering. While this can be beneficial for the company in terms of flexibility and confidentiality, it requires investors to conduct thorough due diligence. The planned future exchange offer under a registration statement could alleviate some of these concerns by providing additional protections and disclosures to note holders.

Market Research Analyst

From a market perspective, the offering of senior notes by Blue Owl Capital Inc. can be seen as a reflection of investor confidence in the company's ability to service its debt. The 6.250% interest rate is a key figure to compare against current market rates for similar maturities and credit ratings. If this rate is competitive, it can indicate a strong market position and creditworthiness.

Investors should also consider the broader economic context, such as interest rate trends and the credit cycle, which can affect the cost of borrowing and the demand for such debt instruments. The timing of this offering could be strategic, aimed at capitalizing on market conditions before any anticipated shifts in the interest rate environment. The impact on the stock market will largely depend on how the proceeds are used to generate value and the market's perception of the company's growth prospects and risk profile.

NEW YORK, April 11, 2024 /PRNewswire/ -- Blue Owl Capital Inc. ("Blue Owl") (NYSE: OWL) today announced the pricing of the previously announced offering of $750,000,000 of 6.250% Senior Notes due 2034 by Blue Owl Finance LLC, its indirect subsidiary. The notes will be fully and unconditionally guaranteed by each of Blue Owl, Blue Owl Capital GP Holdings LLC, Blue Owl Capital GP LLC, Blue Owl Capital Holdings LP, Blue Owl Capital Carry LP, Blue Owl Capital Group LLC, Blue Owl GPSC Holdings LLC, Blue Owl Capital GP Holdings LP, Blue Owl GP Stakes GP Holdings LLC, Blue Owl Real Estate Holdings LP, Blue Owl Real Estate GP Holdings LLC and Blue Owl Capital Holdings LLC. The offering is subject to customary closing conditions. Blue Owl intends to use the net proceeds from this offering to repay a portion of outstanding borrowings under its revolving credit facility. Any remaining net proceeds will be used for general corporate purposes, including to fund any future strategic acquisitions or related transactions and growth initiatives.

The notes will be offered and sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). The Company also intends to enter into a registration rights agreement in connection with the offering of the notes, under which it will agree to consummate an offer to exchange the notes pursuant to a registration statement filed with the Securities and Exchange Commission within 365 days after the original issue date of the notes.

The notes have not been registered under the Securities Act or any state securities laws and, unless registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase the notes or any other securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

About Blue Owl Capital

Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives.

With over $165 billion in assets under management as of December 31, 2023, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Estate. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional and individual investors differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.

Together with over 685 experienced professionals globally, Blue Owl brings the vision and discipline to create the exceptional.

Forward-Looking Statements
Certain statements made in this press release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "would," "should," "future," "propose," "target," "goal," "objective," "outlook" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and speak only as of the date made. Blue Owl assumes no obligation to update or revise any such forward-looking statements except as required by law. 

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Blue Owl's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important factors, among others, that may affect actual results or outcomes include the inability to recognize the anticipated benefits of strategic acquisitions; costs related to acquisitions; the inability to maintain the listing of Blue Owl's shares on the New York Stock Exchange; Blue Owl's ability to manage growth; Blue Owl's ability to execute its business plan and meet its projections; potential litigation involving Blue Owl; changes in applicable laws or regulations; and the possibility that Blue Owl may be adversely affected by other economic, business, geo-political and competitive factors. 

Blue Owl Investor Contact
Ann Dai
Head of Investor Relations
blueowlir@blueowl.com

Blue Owl Media Contact
Nick Theccanat
Principal, Corporate Communications & Government Affairs
nick.theccanat@blueowl.com

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SOURCE Blue Owl Capital

FAQ

What is the purpose of Blue Owl Capital Inc.'s offering of Senior Notes due 2034?

The offering aims to raise $750,000,000 for debt repayment and general corporate purposes.

Who will guarantee the Senior Notes under Blue Owl Capital Inc.?

The notes will be fully guaranteed by various entities under Blue Owl.

How will Blue Owl utilize the net proceeds from the offering?

The net proceeds will be used to repay outstanding borrowings and potentially for strategic acquisitions or growth initiatives.

What type of buyers is the offering targeting?

The offering will target qualified institutional buyers and non-U.S. persons.

Are the Senior Notes registered under the Securities Act?

No, the notes have not been registered under the Securities Act or state securities laws.