Business Context and Reporting Period
This Form 8-K was filed by Owl Rock Capital Corporation (trading symbol: ORCC) on June 11, 2021. The report details the entry into a material definitive agreement and the creation of a direct financial obligation. The registrant is incorporated in Maryland and its common stock is listed on the New York Stock Exchange.
Key Financial Metrics and Transaction Details
- New Debt Issuance: The Company issued $450,000,000 aggregate principal amount of 2.875% notes due 2028.
- Interest Rate: 2.875% per annum, payable semiannually starting December 11, 2021.
- Maturity Date: June 11, 2028.
- Existing Debt Profile:
- Senior Secured Revolving Credit Facility: $1.295 billion in commitments maturing September 3, 2025; weighted average interest rate of 2.1%.
- SPV Asset Facility IV: Matures August 2, 2029; weighted average interest rate of 2.4%.
- Use of Proceeds: Net proceeds are expected to be used to pay down existing indebtedness, including the Revolving Credit Facility and SPV Asset Facility IV.
Material Changes Versus Prior Period
The filing represents a material change in the Company's capital structure through the addition of $450 million in unsecured long-term debt. This issuance replaces or reduces reliance on existing credit facilities which carry lower interest rates (2.1% and 2.4%) compared to the new notes (2.875%), though the new notes extend the maturity profile to 2028.
Guidance, Outlook, and Risks
- Redemption Terms: The Company may redeem the notes at any time at a price equal to the greater of 100% of the principal or the present value of remaining payments discounted at the Treasury Rate plus 30 basis points. After April 11, 2028, the redemption price is 100% of principal plus accrued interest.
- Change of Control: Upon a change of control repurchase event (defined as a change of control combined with a below investment-grade rating by Fitch, S&P, or Moody's), the Company must offer to purchase the notes at 100% of principal plus accrued interest.
- Covenants: The Indenture includes covenants requiring compliance with Section 18(a)(1)(A) of the Investment Company Act of 1940 and provisions for providing financial information if the Company ceases to be subject to Exchange Act reporting requirements.
- Financial Statements: This 8-K does not contain audited financial statements, revenue, profit, or cash flow data. It focuses solely on the debt issuance.
Investor Verification Checklist
- Verify the exact amount of existing debt paid down with the $450 million proceeds to assess net leverage impact.
- Review the full text of the Seventh Supplemental Indenture (Exhibit 4.2) for specific limitations and exceptions to covenants.
- Confirm the Company's current credit ratings to understand the threshold for the change of control repurchase obligation.
- Check subsequent filings for the final allocation of proceeds between the Revolving Credit Facility and SPV Asset Facility IV.