Business Context and Reporting Period
Company: Owl Rock Capital Corporation (Note: Filing metadata referenced "Blue Owl Capital Corp," but the document explicitly identifies the registrant as Owl Rock Capital Corporation).
Reporting Date: July 26, 2022.
Event: The Company completed a $350.47 million term debt securitization transaction (CLO Transaction) through its consolidated subsidiary, Owl Rock CLO VII, LLC. This transaction involves the issuance of secured notes, preferred shares, and floating rate loans backed by a portfolio of middle market loans.
Key Financial Metrics
| Metric | Value |
|---|---|
| Total Debt Issued | $350.47 million |
| Secured Notes Issued | $114.15 million (Classes A-1, A-2, B-1, B-2, C) |
| Class A-L1 Loans Borrowed | $75.00 million |
| Class A-L2 Loans Borrowed | $50.00 million |
| Preferred Shares Issued | $111.32 million (111,320 shares at $1,000/share) |
| Initial Collateral Portfolio | $348.86 million par amount of middle market loans |
| Debt Maturity Date | July 20, 2033 |
Interest Rates: Secured notes and loans bear interest ranging from 5.00% to 6.86% fixed, or three-month term SOFR plus 2.10% to 2.85% floating.
Material Changes
- Capital Structure: The Company incurred a new direct financial obligation of $350.47 million via the CLO Transaction.
- Asset Transfer: The Company sold approximately $255.55 million of middle market loans to the Issuer, and a subsidiary (ORCC Financing IV LLC) sold approximately $93.31 million of loans to the Issuer to form the initial collateral pool.
- Equity Retention: The Company purchased all $111.32 million of Preferred Shares issued by the Issuer to satisfy regulatory risk retention requirements.
Outlook, Management Commentary, and Risks
- Use of Proceeds: Proceeds from the Debt issuance, net of fees and expenses, will be used for general corporate purposes.
- Investment Strategy: Through July 20, 2025, the Issuer may use proceeds to purchase additional middle market loans under the direction of Owl Rock Capital Advisors LLC (ORCA).
- Fee Structure: ORCA has waived its right to receive collateral management fees for the Issuer. If this waiver is rescinded, the management fee payable to the Adviser by the Company will be offset by the amount of the collateral management fee attributable to the Issuer's equity or notes owned by the Company.
- Risks: The Secured Notes are not registered under the Securities Act of 1933 and may not be offered or sold in the U.S. absent registration or an applicable exemption. The Debt is subject to customary covenants and events of default.
Investor Verification Checklist
- Verify the specific interest rate resets for the floating rate notes and loans based on current SOFR levels.
- Confirm the composition and credit quality of the $348.86 million initial middle market loan portfolio.
- Review the "Amended and Restated Investment Advisory Agreement" to understand the mechanics of the fee offset if the waiver is rescinded.
- Monitor the Company's ability to originate eligible middle market loans to maintain the collateral pool through the reinvestment period ending July 20, 2025.
- Check for any subsequent filings regarding the registration status of the Secured Notes if they are intended for broader distribution.