Business Context and Reporting Period
This Form 8-K was filed by Owl Rock Capital Corporation (not Blue Owl Capital Corp) on December 8, 2020. The report details the entry into a material definitive agreement regarding the issuance of new debt securities.
Key Financial Metrics and Transaction Details
- New Debt Issuance: $1,000,000,000 aggregate principal amount of 3.400% Notes due 2026.
- Interest Rate: 3.400% per annum, payable semiannually starting July 15, 2021.
- Maturity Date: July 15, 2026.
- Existing Debt Context: The company maintains a senior secured revolving credit facility with $1.295 billion in commitments maturing September 3, 2025, and remaining commitments maturing April 2, 2024. The weighted average interest rate on drawn amounts is 2.7%.
- Use of Proceeds: Pay down existing indebtedness (including the Revolving Credit Facility) and for general corporate purposes.
Material Changes
The primary material change is the creation of a new direct financial obligation of $1 billion. This transaction alters the company's capital structure by adding unsecured long-term debt to replace or reduce reliance on existing credit facilities.
Guidance, Risks, and Covenants
- Redemption Terms: The company may redeem notes at any time at a price equal to the greater of 100% of principal or the present value of remaining payments discounted at the Treasury Rate plus 50 basis points. After June 15, 2026, redemption is at 100% of principal plus accrued interest.
- Change of Control: A change of control repurchase event (triggered by a change of control and a below investment-grade rating) requires the company to offer to purchase the notes at 100% of principal plus accrued interest.
- Covenants: The indenture includes covenants related to compliance with the Investment Company Act of 1940 and requirements to provide financial information if the company ceases to be subject to Exchange Act reporting requirements.
- Financial Statements: This filing does not contain revenue, profit, cash flow, or margin data.
Investor Verification Checklist
- Verify the exact amount of existing indebtedness paid down using the $1 billion proceeds.
- Confirm the impact of the new 3.400% interest rate on the company's overall weighted average cost of debt compared to the existing 2.7% facility rate.
- Review the full text of the Fifth Supplemental Indenture (Exhibit 4.2) for specific limitations and exceptions to covenants.
- Monitor the company's credit rating status to assess exposure to the change of control repurchase provision.