Blue Owl Capital Corporation Reports Third Quarter Net Investment Income Per Share of $0.47 and Net Asset Value Per Share of $15.28
NEW YORK, Nov. 6, 2024 /PRNewswire/ -- Blue Owl Capital Corporation (NYSE: OBDC, or the "Company") today announced financial results for its third quarter ended September 30, 2024.
THIRD QUARTER 2024 HIGHLIGHTS
Third quarter net investment income ("NII") per share of $0.47, exceeding the regular dividend of $0.37 per share by 27% and generating an ROE of 12.4%
Based on OBDC's supplemental dividend framework, the Board of Directors (the "Board") declared a third quarter supplemental dividend of $0.05 per share
Total dividends for the third quarter were $0.42 per share, representing an 11.0% annualized dividend yield based on third quarter net asset value ("NAV") per share
NAV per share of $15.28, as compared with $15.36 as of June 30, 2024
Originations for the third quarter were $1.2 billion, offset by $1.1 billion of sales and repayments, as compared with $3.3 billion of originations and $1.1 billion of sales and repayments for the three months ended June 30, 2024
Investments on non-accrual decreased to 0.7% of the total fair value of the debt portfolio, as compared with 1.4% as of June 30, 2024
"OBDC produced another quarter of strong earnings and generated a 12.4% return on equity, supported by the quality of our portfolio and robust origination activity," commented Craig W. Packer, Chief Executive Officer. "We are pleased with how OBDC is positioned for the evolving economic environment and remain confident that our scale will continue to serve as a competitive advantage moving forward."
Merger UpdateOn August 7, 2024, OBDC entered into an agreement to merge with Blue Owl Capital Corporation III (NYSE:OBDE), an affiliated business development company managed by Blue Owl Diversified Credit Advisors, LLC, with the Company as the surviving entity.
On August 16, 2024, the Company filed a preliminary registration statement on Form N-14, which included a joint proxy statement of the Company and OBDE and the Company's prospectus. On October 11, 2024, the Company filed an amended registration statement on Form N-14. The registration statement was declared effective by the SEC on October 21, 2024, and the special meetings for each of the Company's and OBDE's shareholders are scheduled for January 8, 2025. The merger is expected to close shortly after the special meetings, subject to shareholder approvals and other customary closing conditions.
Dividend DeclarationsThe Company's Board declared a fourth quarter 2024 regular dividend of $0.37 per share for stockholders of record as of December 31, 2024, payable on or before January 15, 2025.
The Board also declared a third quarter 2024 supplemental dividend of $0.05 per share for stockholders of record as of November 29, 2024, payable on or before December 13, 2024.
PORTFOLIO AND INVESTING ACTIVITY
For the three months ended September 30, 2024, new investment commitments totaled $1.2 billion across 23 new portfolio companies and 14 existing portfolio companies. This compares to $3.3 billion for the three months ended June 30, 2024 across 25 new portfolio companies and 24 existing portfolio companies.
For the three months ended September 30, 2024, the principal amount of new investments funded was $1.1 billion. For this period, the Company had $1.1 billion aggregate principal amount in sales and repayments.
For the three months ended June 30, 2024, the principal amount of new investments funded was $2.3 billion. For this period, the Company had $1.1 billion aggregate principal amount in sales and repayments.
As of September 30, 2024 and June 30, 2024, the Company had investments in 219 and 212 portfolio companies with an aggregate fair value of $13.4 billion and $13.3 billion, respectively. As of September 30, 2024, the average investment size in each portfolio company was $61.4 million based on fair value.
As of September 30, 2024, based on fair value, the portfolio consisted of 75.9% first lien senior secured debt investments, 5.4% second lien senior secured debt investments, 2.3% unsecured debt investments, 2.9% joint ventures, 2.9% preferred equity investments, and 10.6% common equity investments.
As of June 30, 2024, based on fair value, the portfolio consisted of 75.4% first lien senior secured debt investments, 6.3% second lien senior secured debt investments, 2.2% unsecured debt investments, 2.9% joint ventures, 2.9% preferred equity investments, and 10.3% common equity investments.
As of September 30, 2024 and June 30, 2024, approximately 81.3% and 81.7% of the portfolio was invested in secured debt, respectively. As of September 30, 2024, 96.3% of the debt investments based on fair value in the portfolio were at floating rates.
As of September 30, 2024 and June 30, 2024, 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 11.5% and 11.9%, 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 11.6% and 12.0%, respectively.
As of September 30, 2024, loans on non-accrual represented 0.7% of the total fair value of the debt portfolio.
RESULTS OF OPERATIONS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2024
Investment IncomeInvestment income increased to $406.0 million for the three months ended September 30, 2024 from $399.0 million for the same period in the prior year primarily due to higher dividend income and was partially offset by a decrease in the yield of our debt investment portfolio. Dividend income increased period-over-period primarily due to an increase in dividends earned from the Company's controlled, affiliated and non-controlled, affiliated equity investments. Other income increased period-over-period primarily due to higher incremental fee income, which are fees received and recognized to OBDC upon closing investments and normally paid at the time of closing. The Company expects that investment income will vary based on a variety of factors including the pace of our originations and repayments.
ExpensesTotal expenses increased to $217.6 million for the period ended September 30, 2024 compared to $206.2 million in the same period in the prior year primarily due to an increase in interest expense and average daily borrowings. As a percentage of total assets, management fees, professional fees, directors' fees and other general and administrative expenses remained relatively consistent period-over-period.
Liquidity and Capital ResourcesAs of September 30, 2024, the Company had $481.3 million in cash and restricted cash, $7.8 billion in total principal value of debt outstanding, and $1.6 billion of undrawn capacity on the Company's credit facilities. The Company's weighted average interest rate on debt outstanding was 5.8% and 5.6% for the three months ended September 30, 2024 and June 30, 2024, respectively. Ending net debt-to-equity was 1.23x and 1.20x as of September 30, 2024 and June 30, 2024, respectively.
CONFERENCE CALL AND WEBCAST INFORMATION
Conference Call Information:The conference call will be broadcast live on November 7, 2024 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: 13748669
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, 2024, OBDC had investments in 219 portfolio companies with an aggregate fair value of $13.4 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:BDC Investor RelationsMichael
Media Contact:Prosek PartnersJosh
FINANCIAL HIGHLIGHTS
For the Three Months Ended
($ in thousands, except per share amounts)
September 30, 2024
June 30, 2024
September 30, 2023
Investments at Fair Value
$ 13,447,536
$ 13,341,982
$ 12,896,158
Total Assets
$ 14,090,780
$ 13,866,620
$ 13,461,820
Net Asset Value Per Share
$ 15.28
$ 15.36
$ 15.40
Investment Income
$ 406,029
$ 396,760
$ 399,022
Net Investment Income
$ 184,912
$ 189,134
$ 190,053
Net Income
$ 135,358
$ 122,220
$ 206,938
Net Investment Income Per Share
$ 0.47
$ 0.48
$ 0.49
Net Realized and Unrealized Gains (and Losses) Per Share
$ (0.13)
$ (0.17)
$ 0.04
Net Income Per Share
$ 0.35
$ 0.31
$ 0.53
Distributions Declared from Net Investment Income Per Share
$ 0.37
$ 0.37
$ 0.33
Supplemental Distributions Declared from NetInvestment Income Per Share
$ 0.05
$ 0.06
$ 0.08
Weighted Average Yield of Accruing Debt and Income Producing Securities at Fair Value
11.5 %
11.9 %
12.3 %
Weighted Average Yield of Accruing Debt and Income Producing Securities at Amortized Cost
11.6 %
12.0 %
12.4 %
Percentage of Debt Investment Commitments at Floating Rates
96.3 %
96.5 %
97.7 %
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(Amounts in thousands, except share and per share amounts)
September 30, 2024(Unaudited)
December 31, 2023
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $11,729,785 and $11,271,962, respectively)
$ 11,710,694
$ 11,264,956
Non-controlled, affiliated investments (amortized cost of $97,711 and $19,004, respectively)
98,967
19,988
Controlled, affiliated investments (amortized cost of $1,572,894 and $1,341,236, respectively)
