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Owl Rock Capital Corp. Reports First Quarter Net Investment Income Per Share of $0.45 and NAV Per Share of $15.15
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Owl Rock Capital Corp. Reports First Quarter Net Investment Income Per Share of $0.45 and NAV Per Share of $15.15

NEW YORK, May 10, 2023 /PRNewswire/ — Owl Rock Capital Corporation (NYSE: ORCC, or the “Company”) today announced financial results for its first quarter ended March 31, 2023.  

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FIRST QUARTER 2023 HIGHLIGHTS

  • First quarter NII of $0.45 per share exceeded the first quarter dividend of $0.33 per share by over 35%, marking our highest quarterly NII since ORCC’s inception
  • In addition, the Board declared a first quarter supplemental dividend of $0.06 per share
  • Total dividends for the first quarter were $0.39 per share, which represents a greater than 10% annualized yield based on current NAV per share
  • Delivered NII ROE1 of 12.1% in the first quarter, up from 8.3% the prior year
  • Net asset value per share increased to $15.15 compared to $14.99 as of December 31, 2022

Craig W. Packer, Chief Executive Officer of Owl Rock Capital Corporation commented, “We achieved record net investment income in the first quarter of 2023, building upon our consistent track record, as we continue to realize earnings momentum from rising interest rates. Credit performance remains strong, and our direct lending portfolio is defensively positioned to generate healthy, stable returns throughout the current economic cycle.”

Dividend Declarations

The Company’s Board of Directors has declared a second quarter 2023 dividend of $0.33 per share for stockholders of record as of June 30, 2023, payable on or before July 14, 2023 and a first quarter 2023 supplemental dividend of $0.06 per share for stockholders of record as of May 31, 2023, payable on or before June 15, 2023.

Stock Repurchases

On November 1, 2022, the Board approved the 2022 Repurchase Program under which the Company may repurchase up to $150 million of the Company’s common stock. In addition, last quarter certain affiliates and employees of Blue Owl participated in an investment vehicle to purchase up to $25 million of ORCC common stock. As of May 10, 2023, a total of $73.7 million of ORCC common stock was purchased, of which $49.1 million was bought by ORCC, at an average price of $12.22 per share.

PORTFOLIO AND INVESTING ACTIVITY

For the three months ended March 31, 2023, new investment commitments totaled $175.1 million across 3 new portfolio companies and eight existing portfolio companies. This compares to $211.2 million for the three months ended December 31, 2022 across 6 new portfolio companies and 2 existing portfolio companies.

For the three months ended March 31, 2023, the principal amount of new investments funded was $94.3 million. For this period, the Company had $76.1 million aggregate principal amount in sales and repayments.

For the three months ended December 31, 2022, the principal amount of new investments funded was $184.1 million. For this period, the Company had $115.7 million aggregate principal amount in sales and repayments.

As of March 31, 2023 and December 31, 2022, the Company had investments in 187 and 184 portfolio companies with an aggregate fair value of $13.2 billion and $13.0 billion, respectively. As of March 31, 2023, the average investment size in each portfolio company was $70.4 million based on fair value.

________________

(1) NII ROE is calculated as annualized Q1’23 net investment income divided by average Q1’23 and Q4’22 net asset value.

As of March 31, 2023, based on fair value, our portfolio consisted of 70.5% first lien senior secured debt investments, 14.1% second lien senior secured debt investments, 2.0% unsecured debt investments, 2.4% investment funds and vehicles, 3.0% preferred equity investments, and 8.0% common equity investments.

As of December 31, 2022, based on fair value, our portfolio consisted of 71.4% first lien senior secured debt investments, 14.3% second lien senior secured debt investments, 1.9% unsecured debt investments, 2.2% investment funds and vehicles, 2.7% preferred equity investments, and 7.5% common equity investments.

As of March 31, 2023 and December 31, 2022, approximately 84.6% and 85.7% of the portfolio was invested in secured debt, respectively. As of March 31, 2023, 98.2% of our debt investments based on fair value in our portfolio were at floating rates.

As of March 31, 2023 and December 31, 2022, the weighted average total yield of accruing debt and income-producing securities at fair value (which includes interest income and amortization of fees and discounts) was 12.0% and 11.5%, respectively, and the weighted average total yield of accruing debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 12.0% and 11.5%, respectively.

As of March 31, 2023, 2 portfolio companies with an aggregate fair value of $38.3 million were on non-accrual status, representing 0.3% of the total fair value of the debt portfolio.

RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 2023

Investment Income

Investment income increased to $377.6 million for the three months ended March 31, 2023 from $350.5 million for the three months ended December 31, 2022 primarily due to an increase in our portfolio’s weighted average yield from 11.0% as of December 31, 2022 to 11.5% as of March 31, 2023 while our debt portfolio at par remained relatively consistent at $11.7 billion from December 31, 2022 to March 31, 2023. Included in investment income is dividend income which increased primarily due to increases in dividends related to Windows Entities, ORCC SLF, Wingspire and Swipe Acquisition Corporate (dba PLI). Also included in interest income are other fees such as prepayment fees and accelerated amortization of upfront fees from unscheduled paydowns. Period over period, income generated from these fees increased. Other income decreased due to a decrease in incremental fee income, which are fees that are generally available as a result of closing investments and normally paid at the time of closing. We expect that investment income will vary based on a variety of factors including the pace of our originations and repayments.

Expenses

Total expenses increased to $196.4 million for the three months ended March 31, 2023 from $188.0 million for the three months ended December 31, 2022, primarily due to an increase in interest expense. The increase in interest expense was primarily driven by an increase in the average daily borrowings as well as an increase in the average interest rate. As a percentage of total assets, professional fees, directors’ fees, and other general and administrative expenses remained relatively consistent period over period.

Liquidity and Capital Resources

As of March 31, 2023, we had $399.5 million in cash and restricted cash, $7.5 billion in total principal value of debt outstanding, and $1.3 billion of undrawn capacity on our credit facilities. The Company’s weighted average interest rate on debt outstanding was 5.2% and 4.7% for the three months ended March 31, 2023 and December 31, 2022, respectively. Ending net debt to equity was 1.21x and 1.19x as of March 31, 2023 and December 31, 2022, respectively.

CONFERENCE CALL AND WEBCAST INFORMATION

Conference Call Information:

The conference call will be broadcast live on May 11, 2023 at 10:30 a.m. Eastern Time on the Events section of ORCC’s website at www.OwlRockCapitalCorporation.com. Please visit the website to test your connection before the webcast.

Participants are also invited to access the conference call by dialing one of the following numbers:

  • Domestic: (877) 737-7048
  • International: +1 (201) 689-8523

All callers will need to reference “Owl Rock Capital Corporation” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.

Replay Information:

An archived replay will be available for 14 days via a webcast link located on the Events section of ORCC’s website, and via the dial-in numbers listed below:

  • Domestic: (877) 660-6853
  • International: +1 (201) 612-7415
  • Conference ID: 13737251

 

Financial Highlights




For the Three Months Ended


($ in thousands, except per share amounts)


March 31,

2023

December 31,

2022

March 31,

2022


Investments at Fair Value


nbsp;        13,157,251

nbsp;        13,010,345

nbsp;        12,756,323


Total Assets


nbsp;        13,679,100

nbsp;        13,584,853

nbsp;        13,203,697


Net Asset Value Per Share


nbsp;                 15.15

nbsp;                 14.99

nbsp;                 14.88








Investment Income


nbsp;             377,622

nbsp;             350,506

nbsp;             264,159


Net Investment Income


nbsp;             177,859

nbsp;             162,464

nbsp;             122,356


Net Income


nbsp;             201,842

nbsp;             191,888

nbsp;               43,986








Net Investment Income Per Share


nbsp;                   0.45

nbsp;                   0.41

nbsp;                   0.31


Net Realized and Unrealized Gains (and Losses)

Per Share


nbsp;                   0.07

nbsp;                   0.07

nbsp;                  (0.20)


Net Income Per Share


nbsp;                   0.52

nbsp;                   0.49

nbsp;                   0.11


Distributions Declared from Net Investment

Income Per Share


nbsp;                   0.33

nbsp;                   0.33

nbsp;                   0.31


Supplemental Distributions Declared from Net

Investment Income Per Share


nbsp;                   0.06

nbsp;                   0.04

nbsp;                   0.00


Weighted Average Yield of Accruing Debt and

Income Producing Securities at Fair Value


12.0 %

11.5 %

7.9 %


Weighted Average Yield of Accruing Debt and

Income Producing Securities at Amortized Cost


12.0 %

11.5 %

8.0 %


Percentage of Debt Investment Commitments at

Floating Rates


98.2 %

98.3 %

98.8 %


 

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(Amounts in thousands, except share and per share amounts)




March 31, 2023 

(Unaudited)


December 31, 2022

Assets





Investments at fair value





Non-controlled, non-affiliated investments (amortized cost of $11,969,923 and

   $12,133,062, respectively)


nbsp;            11,923,041


nbsp;            12,010,369

Non-controlled, affiliated investments (amortized cost of $21,265 and $6,224,

   respectively)


21,215


6,175

Controlled, affiliated investments (amortized cost of $1,115,978, and $906,846,

   respectively)


1,212,995


993,801

Total investments at fair value (amortized cost of $13,107,166 and $13,046,132,

    respectively)


13,157,251


13,010,345

Cash (restricted cash of $86,443 and $96,420, respectively)


392,960


444,278

Foreign cash (cost of $6,496 and $809, respectively)


6,498


809

Interest receivable


96,086


108,085

Receivable from a controlled affiliate


22,026


17,709

Prepaid expenses and other assets


4,279


3,627

Total Assets


nbsp;            13,679,100


nbsp;            13,584,853

Liabilities





Debt (net of unamortized debt issuance costs of $91,267 and $95,647, respectively)


nbsp;              7,383,214


nbsp;              7,281,744

Distribution payable


128,971


129,517

Management fee payable


48,093


47,583

Incentive fee payable


37,728


34,462

Payables to affiliates


3,718


6,351

Accrued expenses and other liabilities


160,006


202,793

Total Liabilities


7,761,730


7,702,450

Commitments and contingencies (Note 7)





Net Assets





Common shares $0.01 par value, 500,000,000 shares authorized; 390,676,080 and

    392,476,687 shares issued and outstanding, respectively


3,907


3,925

Additional paid-in-capital


5,948,602


5,970,674

Accumulated undistributed (overdistributed) earnings


(35,139)


(92,196)

Total Net Assets


5,917,370


5,882,403

Total Liabilities and Net Assets


nbsp;            13,679,100


nbsp;            13,584,853

Net Asset Value Per Share


nbsp;                     15.15


14.99

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share amounts)




For the Three Months Ended 

March 31,



2023


2022

Investment Income





Investment income from non-controlled, non-affiliated investments:





Interest income


nbsp;               288,678


nbsp;               208,599

Payment-in-kind interest income


43,055


22,411

Dividend income


17,833


11,728

Other income


2,964


3,848

Total investment income from non-controlled, non-affiliated investments


352,530


246,586

Investment income from controlled, affiliated investments:





Interest income


2,674


1,773

Dividend income


22,026


15,638

Other Income


392


162

Total investment income from controlled, affiliated investments


25,092


17,573

Total Investment Income


377,622


264,159

Expenses





Interest expense


103,955


61,378

Management fees


48,093


47,413

Performance based incentive fees


37,728


25,954

Professional fees


3,673


3,828

Directors’ fees


258


290

Other general and administrative


2,671


2,132

Total Operating Expenses


196,378


140,995

Net Investment Income (Loss) Before Taxes


181,244


123,164

Income tax expense (benefit)


3,385


808

Net Investment Income (Loss) After Taxes


nbsp;               177,859


nbsp;               122,356

Net Realized and Change in Unrealized Gain (Loss)





Net change in unrealized gain (loss):





Non-controlled, non-affiliated investments


nbsp;                 65,423


nbsp;                (69,948)

Non-controlled, affiliated investments


(1)


Controlled, affiliated investments


10,254


(11,758)

Translation of assets and liabilities in foreign currencies


1,210


(481)

Income tax (provision) benefit


(281)


Total Net Change in Unrealized Gain (Loss)


76,605


(82,187)

Net realized gain (loss):





Non-controlled, non-affiliated investments


(52,483)


4,702

Foreign currency transactions


(139)


(885)

Total Net Realized Gain (Loss)


(52,622)


3,817

Total Net Realized and Change in Unrealized Gain (Loss)


23,983


(78,370)

Net Increase (Decrease) in Net Assets Resulting from Operations


nbsp;               201,842


nbsp;                 43,986

Earnings Per Share – Basic and Diluted


nbsp;                     0.52


nbsp;                     0.11

Weighted Average Shares Outstanding – Basic and Diluted


391,049,102


394,309,578

 

PORTFOLIO AND INVESTMENT ACTIVITY



For the Three Months Ended March 31,

($ in thousands)

2023


2022


New investment commitments





Gross originations

175,114


nbsp;                 533,848


Less: Sell downs


(3,409)


Total new investment commitments

nbsp;                 175,114


nbsp;                 530,439


Principal amount of investments funded:





First-lien senior secured debt investments

nbsp;                   36,809


nbsp;                 223,302


Second-lien senior secured debt investments


1,000


Unsecured debt investments


69,989


Preferred equity investments

24,194


7,000


Common equity investments

9,653


1,968


Investment funds and vehicles

23,625


44,625


Total principal amount of investments funded

nbsp;                  94,281


nbsp;                347,884


Principal amount of investments sold or repaid:





First-lien senior secured debt investments

nbsp;                 (56,696)


nbsp;               (326,994)


Second-lien senior secured debt investments

(19,200)


(25,000)


Unsecured debt investments

(193)



Preferred equity investments


(22,843)


Common equity investments



Investment funds and vehicles



Total principal amount of investments sold or repaid

nbsp;                 (76,089)


nbsp;               (374,837)


Number of new investment commitments in new portfolio

companies(1)

3


17


Average new investment commitment amount

nbsp;                       941


nbsp;                  21,952


Weighted average term for new debt investment commitments

(in years)

3.0


5.1


Percentage of new debt investment commitments at

   floating rates

100.0 %


97.3 %


Percentage of new debt investment commitments at

   fixed rates

— %


2.7 %


Weighted average interest rate of new debt investment

   commitments(2)

12.4 %


7.4 %


Weighted average spread over applicable base rate of new

floating rate debt investment commitments

7.2 %


6.5 %


______________

(1) Number of new investment commitments represents commitments to a particular portfolio company.

(2) For the three months ended March 31, 2023, assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month SOFR, which was 4.91% as of March 31, 2023. For the three months ended March 31, 2022, assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month LIBOR, which was 0.96% as of March 31, 2022.

 

ABOUT OWL ROCK CAPITAL CORPORATION

Owl Rock Capital Corporation (NYSE: ORCC) is a specialty finance company focused on lending to U.S. middle-market companies. As of March 31, 2023, ORCC had investments in 187 portfolio companies with an aggregate fair value of $13.2 billion. ORCC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. ORCC is externally managed by Owl Rock Capital Advisors LLC, an SEC-registered investment adviser that is an indirect affiliate of Blue Owl Capital Inc. (“Blue Owl”) (NYSE: OWL) and part of Owl Rock, a division of Blue Owl. Owl Rock, together with its subsidiaries, is a New York based direct lending platform.

Certain information contained herein may constitute “forward-looking statements” that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about ORCC, its current and prospective portfolio investments, its industry, its beliefs and opinions, and its assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond ORCC’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in ORCC’s filings with the SEC. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which ORCC makes them. ORCC does not undertake any obligation to update or revise any forward-looking statements or any other information contained herein, except as required by applicable law.

INVESTOR CONTACTS

Investor Contact:

Dana Sclafani

212-419-3000

owlrockir@blueowl.com

Media Contact:

Prosek Partners

Josh Clarkson

pro-owlrock@prosek.com

Cision View original content:https://www.prnewswire.com/news-releases/owl-rock-capital-corp-reports-first-quarter-net-investment-income-per-share-of-0-45-and-nav-per-share-of-15-15–301821414.html

SOURCE Owl Rock Capital Corporation

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