Business Context and Reporting Period
This Form 8-K was filed by Owl Rock Capital Corporation (not Blue Owl Capital Corp) on February 1, 2017. The report details the entry into a material definitive agreement regarding a new credit facility.
Key Financial Metrics and Debt Structure
- Facility Type: Senior Secured Revolving Credit Agreement.
- Maximum Principal Amount: $400,000,000, subject to borrowing base availability.
- Accordion Feature: Capacity may be increased to $750,000,000 via an uncommitted accordion feature.
- Swingline Loans: $50,000,000 limit.
- Interest Rates: LIBOR plus a margin or Prime rate plus a margin (borrower's option).
- Undrawn Fee: 0.375% on undrawn amounts.
- Collateral: Perfected first-priority interest in substantially all portfolio investments held by the Company and Guarantors.
- Guarantors: OR Lending LLC and certain future domestic subsidiaries.
Material Changes and Terms
The Company entered into this new facility on February 1, 2017, replacing or supplementing prior financing arrangements. The agreement includes specific maturity and termination dates:
- Commitment Termination Date: January 31, 2020.
- Maturity Date: February 1, 2021.
- Mandatory Prepayments: Required from proceeds of asset sales, recovery events, and equity/debt issuances between the Commitment Termination Date and Maturity Date.
Guidance, Risks, and Covenants
The facility includes customary covenants and restrictions:
- Financial Covenants: Related to asset coverage and liquidity.
- Restrictions: Limitations on incurring additional indebtedness and on distributions to shareholders, share redemptions, repurchases, or retirements upon certain events.
- Use of Proceeds: General corporate purposes, including funding portfolio investments.
- Risks: The filing notes customary events of default. The full text of the agreement, containing complete details, is to be filed in the Annual Report on Form 10-K for the year ending December 31, 2016.
Investor Verification Checklist
- Verify the specific interest rate margins (LIBOR/Prime) and the exact borrowing base formula in the full credit agreement.
- Confirm the current utilization of the $400 million facility and the status of the $50 million swingline.
- Review the upcoming Form 10-K for the complete text of the agreement and detailed covenant calculations.
- Assess the impact of mandatory prepayment clauses on future liquidity during the 2020-2021 period.
- Note that the registrant name in the filing is Owl Rock Capital Corporation, distinct from the query's "Blue Owl Capital Corp."