Filing Overview
Registrant: Owl Rock Technology Finance Corp. (metadata identifies Blue Owl Technology Finance Corp.; the filing itself uses the Owl Rock name). The Form 8-K was filed June 10, 2019, for an earliest event date of June 6, 2019. The company is an emerging growth company.
Material Agreement
On June 6, 2019, the company entered into the First Amendment to its Senior Secured Revolving Credit Agreement dated November 19, 2018. Wells Fargo Bank, National Association remained the administrative agent, letter of credit issuer, bookrunner, lead arranger, and a lender.
- The accordion feature, which permits an increase in the revolving credit facility under specified conditions, was increased from $1.0 billion to $1.1 billion.
- A new covenant requires the fair market value of the company’s investments to be at least 85% of the aggregate cost assigned to those investments on the company’s financial statements.
- From June 30, 2019, through the earlier of the Final Closing Date under the company’s subscription agreement and June 30, 2020, the company must maintain total assets minus total liabilities above $500 million. The period may be extended if requested by the company and agreed to by the administrative agent.
Financial Metrics and Liquidity
The filing does not provide revenue, profit, cash flow, margin, debt-balance, liquidity, or asset-value figures beyond the revolving facility accordion capacity and the newly specified covenant thresholds.
Changes Versus Prior Period
Relative to the November 19, 2018 credit agreement, the amendment increased potential revolving capacity and added investment-valuation and minimum net-asset-value covenants. The filing does not present comparative operating or financial results.
Outlook, Risks, and Unusual Items
- The new covenants may restrict the company’s financial flexibility if investment fair values decline below the required level or if total assets less total liabilities fall to or below $500 million.
- The expanded accordion is subject to specified conditions and does not necessarily represent committed borrowing capacity.
- The filing states that its description is only a summary; the complete amendment is to be filed as an exhibit to the next Form 10-Q.
Investor Verification Items
- Review the full amendment when filed to confirm all covenant definitions, testing dates, defaults, and remedies.
- Verify the actual committed and available amount under the revolving credit facility, including any conditions to accessing the accordion.
- Monitor investment fair values relative to the 85% cost-based covenant.
- Confirm compliance with the greater-than-$500 million total-assets-over-total-liabilities requirement beginning June 30, 2019.
- Reconcile the filing’s Owl Rock name with the requested Blue Owl Technology Finance Corp. metadata.