NEW
YORK, May 8, 2024 /PRNewswire/ -- Blue Owl
Capital Corporation III (NYSE: OBDE, or the "Company") today
announced financial results for its first quarter ended
March 31, 2024.
FIRST QUARTER 2024 HIGHLIGHTS
- First quarter net investment income ("NII") per share of
$0.39, which exceeds the first
quarter regular dividend of $0.35 per
share by $0.04 per share
- Successfully listed on the New York Stock Exchange in January
as one of the largest BDCs in the public market
- In conjunction with the listing, the Board of Directors (the
"Board") declared five special dividends of $0.06 per share to be paid quarterly beginning in
the second quarter of 2024
- 10.5% annualized dividend yield based on first quarter net
asset value ("NAV") per share1
- NAV per share increased to $15.65
compared to $15.56 as of December 31, 2023, representing the Company's
highest NAV per share since inception
"OBDE delivered strong performance in the first quarter,
achieving record net asset value per share for the fifth
consecutive quarter," commented Craig W.
Packer, Chief Executive Officer. "We have made meaningful
progress towards reaching our target leverage range and believe we
are well positioned to deliver sustained, attractive risk-adjusted
returns to our shareholders as a public company."
Dividend Declarations
The Company's Board
declared a second quarter 2024 dividend of $0.35 per share for stockholders of record as of
June 28, 2024, payable on or before
July 15, 2024.
In addition, and as previously announced, the Board declared a
series of five special dividends of $0.06 per share, payable to stockholders of
record quarterly beginning in the second quarter 2024. A full
schedule of the record and payment dates can be found on the
Company's website.
PORTFOLIO AND INVESTING ACTIVITY
For the three months ended March 31, 2024, new investment
commitments totaled $736.4 million
across 43 new portfolio companies and 14 existing portfolio
companies. This compares to $435.9
million for the three months ended December 31, 2023
across 17 new portfolio companies and 13 existing portfolio
companies.
For the three months ended March 31, 2024, the principal
amount of new investments funded was $630.9
million. For this period, the Company had $232.9 million aggregate principal amount in
sales and repayments.
For the three months ended December 31, 2023, the principal
amount of new investments funded was $350.8
million. For this period, the Company had $328.4 million aggregate principal amount in
sales and repayments.
As of March 31, 2024 and December 31, 2023, the
Company had investments in 188 and 153 portfolio companies with an
aggregate fair value of $4.0 billion
and $3.6 billion, respectively. As of
March 31, 2024, the average investment size in each portfolio
company was $21.2 million based on
fair value.
As of March 31, 2024, based on fair value, our portfolio
consisted of 82.3% first lien senior secured debt investments, 6.6%
second lien senior secured debt investments, 1.5% unsecured debt
investments, 4.9% preferred equity investments, and 4.7% common
equity investments.
As of December 31, 2023, based on fair value, our portfolio
consisted of 76.4% first lien senior secured debt investments,
12.1% second lien senior secured debt investments, 1.7% unsecured
debt investments, 5.2% preferred equity investments, and 4.6%
common equity investments.
As of March 31, 2024 and December 31, 2023,
approximately 88.9% and 88.5% of the portfolio was invested in
secured debt, respectively. As of March 31, 2024, 98.2% of our
debt investments based on fair value in our portfolio were at
floating rates.
As of March 31, 2024 and December 31, 2023, 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 11.7% and 12.1%,
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 11.7%
and 12.1%, respectively.
As of March 31, 2024, loans on non-accrual represented 0.3%
of the total fair value of the debt portfolio.
RESULTS OF OPERATIONS FOR THE FIRST QUARTER ENDED
MARCH 31, 2024
Investment Income
Investment income increased
to $113.4 million for the three
months ended March 31, 2024 from $97.9
million for the same period in prior year primarily due to
an increase in interest income as a result of an increase in our
debt investment portfolio at par as well as an increase in the base
rates charged on our floating rate debt investments. Dividend
income increased period over period due an increase in our
portfolio of dividend income-producing equity investments at cost.
Included in interest income are other fees such as prepayment fees
and accelerated amortization of upfront fees from unscheduled
paydowns which are non-recurring in nature. Other income increased
period over period due to an increase in incremental fee income,
which are fees that are generally available to us as a result of
closing investments and generally paid at the time of closing or as
a result of episodic amendments made to the terms of our existing
debt investments. 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
$64.7 million for the three months
ended March 31, 2024 from $35.1
million for the same period in prior year due to an increase
in management fees, incentive fees, interest expense and other
expenses including the payment of listing advisory fees. The
increase in interest expense was driven by an increase in average
daily borrowings period over period, as well as an increase in the
average interest rate period over period. Management fees increased
due to an increase in our investment portfolio at fair value as
well as the increased fee rates effective as of our listing date.
The increase in other expenses was primarily driven by expenses
associated with the exchange listing, which are not anticipated to
be recurring in nature. As a percentage of total assets,
professional fees, directors' fees and other general and
administrative expenses increased period over period.
Liquidity and Capital Resources
As of
March 31, 2024, we had $140.2
million in cash, $2.2 billion
in total principal value of debt outstanding, and $345.8 million of undrawn capacity on our credit
facilities. The Company's weighted average interest rate on debt
outstanding was 7.0% and 6.9% for the three months ended
March 31, 2024 and December 31, 2023, respectively.
Ending net debt to equity was 1.04x and 0.86x as of March 31,
2024 and December 31, 2023, respectively.
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(1) Dividend yield
reflects regular dividend payable to stockholders of record on June
28, 2024, special dividend payable to stockholders of record on May
31, 2024 and Q1 2024 net asset value per share of
$15.65.
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CONFERENCE CALL AND WEBCAST INFORMATION
Conference Call Information:
The conference
call will be broadcast live on May 9,
2024 at 11:00 a.m. Eastern
Time on the Events section of OBDE's website at
www.BlueOwlCapitalCorporationIII.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) 407-9714
- International: +1 (201) 689-8865
All callers will need to reference "Blue Owl Capital Corporation
III" 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 OBDE's website, and via the dial-in numbers listed
below:
- Domestic: (877) 660-6853
- International: +1 (201) 612-7415
- Conference ID: 13745828
ABOUT BLUE OWL CAPITAL CORPORATION III
Blue Owl Capital Corporation III (NYSE: OBDE) is a specialty
finance company focused on lending to U.S. middle-market companies.
As of March 31, 2024, OBDE had investments in 188 portfolio
companies with an aggregate fair value of $4.0 billion. OBDE has elected to be
regulated as a business development company under the Investment
Company Act of 1940, as amended. OBDE is externally managed by Blue
Owl Diversified Credit Advisors, an SEC-registered investment
adviser that is an indirect affiliate of Blue Owl Capital Inc.
("Blue Owl") (NYSE: OWL) and is a part of Blue Owl's Credit
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 OBDE, 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 OBDE'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 OBDE'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 OBDE makes them. OBDE 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:
BDC Investor Relations
credit-ir@blueowl.com
Media Contact:
Prosek Partners
Josh Clarkson
pro-blueowl@prosek.com
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FINANCIAL
HIGHLIGHTS
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For the Three Months
Ended
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($ in thousands, except
per share amounts)
|
|
March 31,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
|
Investments at Fair
Value
|
|
$
3,987,997
|
|
$
3,590,701
|
|
$
3,523,437
|
|
Total Assets
|
|
$
4,180,538
|
|
$
3,761,097
|
|
$
3,629,962
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Net Asset Value Per
Share
|
|
$
15.65
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|
$
15.56
|
|
$
15.20
|
|
|
|
|
|
|
|
|
Investment
Income
|
|
$
113,445
|
|
$
111,542
|
|
$
97,881
|
|
Net Investment
Income
|
|
$
48,275
|
|
$
71,647
|
|
$
61,579
|
|
Net Income
|
|
$
54,061
|
|
$
80,557
|
|
$
73,976
|
|
|
|
|
|
|
|
|
Net Investment Income
Per Share
|
|
$
0.39
|
|
$
0.58
|
|
$
0.51
|
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Net Realized and
Unrealized Gains (and
Losses) Per Share
|
|
$
0.05
|
|
$
0.07
|
|
$
0.10
|
|
Net Income Per
Share
|
|
$
0.44
|
|
$
0.66
|
|
$
0.61
|
|
Distributions Declared
from Net Investment Income Per Share
|
|
$
0.35
|
|
$
0.49
|
|
$
0.44
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Weighted Average Yield
of Accruing Debt
and Income Producing Securities at Fair Value
|
|
11.7 %
|
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12.1 %
|
|
11.8 %
|
|
Weighted Average Yield
of Accruing Debt
and Income Producing Securities at
Amortized Cost
|
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11.7 %
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12.1 %
|
|
11.8 %
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Percentage of Debt
Investments at Floating
Rates at Fair Value
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98.2 %
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98.1 %
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98.2 %
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CONSOLIDATED
STATEMENTS OF ASSETS AND LIABILITIES
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(Amounts in
thousands, except share and per share amounts)
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March 31,
2024
(Unaudited)
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December 31,
2023
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Assets
|
|
|
|
|
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Investments at fair
value
|
|
|
|
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Non-controlled,
non-affiliated investments (amortized cost of
$3,848,925 and $3,479,371, respectively)
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$
3,874,424
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$
3,498,800
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Non-controlled,
affiliated investments (amortized cost of
$117,618 and $97,482, respectively)
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113,573
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91,901
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Total investments at
fair value (amortized cost of $3,966,543 and
$3,576,853, respectively)
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3,987,997
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3,590,701
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Cash
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|
140,229
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141,448
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|
Interest
receivable
|
|
32,307
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|
25,147
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|
Receivable for
investments sold
|
|
14,999
|
|
—
|
|
Prepaid expenses and
other assets
|
|
5,006
|
|
3,801
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|
Total
Assets
|
|
$
4,180,538
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$
3,761,097
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Liabilities
|
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Debt (net of
unamortized debt issuance costs of $26,782 and
$25,623, respectively)
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$
2,124,005
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$
1,754,496
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Distribution
payable
|
|
43,096
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|
60,779
|
|
Management fee
payable
|
|
11,851
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|
4,517
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|
Incentive fee
payable
|
|
7,140
|
|
—
|
|
Payables to
affiliates
|
|
3,724
|
|
896
|
|
Payable for investments
purchased
|
|
32,731
|
|
—
|
|
Accrued expenses and
other liabilities
|
|
31,291
|
|
29,297
|
|
Total
Liabilities
|
|
$
2,253,838
|
|
$
1,849,985
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Commitments and
contingencies (Note 7)
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Net
Assets
|
|
|
|
|
|
Common shares $0.01 par
value, 500,000,000 shares authorized;
123,131,820 and 122,817,625 shares issued and outstanding,
respectively
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|
$
1,231
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|
$
1,228
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|
Additional
paid-in-capital
|
|
1,833,649
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|
1,829,029
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Accumulated
undistributed (overdistributed) earnings
|
|
91,820
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|
80,855
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Total Net
Assets
|
|
$
1,926,700
|
|
$
1,911,112
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|
Total Liabilities
and Net Assets
|
|
$
4,180,538
|
|
$
3,761,097
|
|
Net Asset Value Per
Share
|
|
$
15.65
|
|
$
15.56
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CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Amounts in
thousands, except share and per share amounts)
|
|
(Unaudited)
|
|
|
For the Three Months
Ended
March
31,
|
|
2024
|
|
2023
|
|
Investment
Income
|
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|
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Investment income from
non-controlled, non-affiliated investments:
|
|
|
|
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Interest income
(excluding payment-in-kind ("PIK") interest income)
|
$
95,714
|
|
$
79,360
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PIK interest
income
|
9,478
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|
12,483
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Dividend
income
|
5,325
|
|
4,979
|
|
Other
income
|
1,693
|
|
1,059
|
|
Total investment income
from non-controlled, non-affiliated investments
|
112,210
|
|
97,881
|
|
Investment income from
non-controlled, affiliated investments:
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|
Interest income
(excluding PIK interest income)
|
408
|
|
—
|
|
PIK interest
income
|
29
|
|
—
|
|
Dividend
income
|
795
|
|
—
|
|
Other
income
|
3
|
|
—
|
|
Total investment income
from non-controlled, affiliated investments
|
1,235
|
|
—
|
|
Total Investment
Income
|
113,445
|
|
97,881
|
|
Expenses
|
|
|
|
|
Interest
expense
|
35,778
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|
28,539
|
|
Management
fee
|
11,851
|
|
4,393
|
|
Performance based
incentive fees
|
7,140
|
|
—
|
|
Professional
fees
|
1,584
|
|
1,259
|
|
Directors'
fees
|
228
|
|
196
|
|
Listing advisory
fees
|
6,040
|
|
—
|
|
Other general and
administrative
|
2,151
|
|
731
|
|
Total
Expenses
|
64,772
|
|
35,118
|
|
Net Investment
Income (Loss) Before Taxes
|
48,673
|
|
62,763
|
|
Income tax expense
(benefit), including excise tax expense (benefit)
|
398
|
|
1,184
|
|
Net Investment
Income (Loss) After Taxes
|
$
48,275
|
|
$
61,579
|
|
Net Realized and
Change in Unrealized Gain (Loss)
|
|
|
|
|
Net change in
unrealized gain (loss):
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
7,709
|
|
23,799
|
|
Non-controlled,
affiliated investments
|
1,535
|
|
26
|
|
Translation of assets
and liabilities in foreign currencies
|
(277)
|
|
52
|
|
Income tax (provision)
benefit
|
1
|
|
(1)
|
|
Total Net Change in
Unrealized Gain (Loss)
|
8,968
|
|
23,876
|
|
Net realized gain
(loss):
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
(3,389)
|
|
(11,498)
|
|
Foreign currency
transactions
|
207
|
|
19
|
|
Total Net Realized
Gain (Loss)
|
(3,182)
|
|
(11,479)
|
|
Total Net Realized
and Change in Unrealized Gain (Loss)
|
5,786
|
|
12,397
|
|
Net Increase
(Decrease) in Net Assets Resulting from Operations
|
$
54,061
|
|
$
73,976
|
|
Earnings (Loss) Per
Share - Basic and Diluted
|
$
0.44
|
|
$
0.61
|
|
Weighted Average
Shares Outstanding - Basic and Diluted
|
123,028,290
|
|
121,201,415
|
|
PORTFOLIO AND
INVESTMENT ACTIVITY
|
|
|
For the Three Months
Ended
March
31,
|
|
($ in
thousands)
|
2024
|
|
2023
|
|
New investment
commitments
|
|
|
|
|
Gross
originations
|
$
743,919
|
|
$
21,814
|
|
Less: Sell
downs
|
(7,500)
|
|
—
|
|
Total new
investment commitments
|
$
736,419
|
|
$
21,814
|
|
Principal amount of
investments funded:
|
|
|
|
|
First-lien senior
secured debt investments
|
611,078
|
|
3,535
|
|
Second-lien senior
secured debt investments
|
—
|
|
—
|
|
Unsecured debt
investments
|
—
|
|
—
|
|
Preferred equity
investments
|
488
|
|
12,162
|
|
Common equity
investments
|
19,332
|
|
2,623
|
|
Total principal
amount of investments funded
|
$
630,898
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|
$
18,320
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|
Principal amount of
investments sold or repaid:
|
|
|
|
|
First-lien senior
secured debt investments
|
(56,756)
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|
(2,697)
|
|
Second-lien senior
secured debt investments
|
(172,113)
|
|
(4,800)
|
|
Unsecured debt
investments
|
(3,796)
|
|
(36)
|
|
Preferred equity
investments
|
(242)
|
|
—
|
|
Common equity
investments
|
—
|
|
—
|
|
Total principal
amount of investments sold or repaid
|
$
(232,907)
|
|
$
(7,533)
|
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Number of new
investment commitments in new portfolio
companies(1)
|
43
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|
1
|
|
Average new
investment commitment amount
|
$
14,493
|
|
$
909
|
|
Weighted average
term for new debt investment commitments (in
years)
|
5.9
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|
4.6
|
|
Percentage of new
debt investment commitments at
floating rates
|
99.6 %
|
|
100.0 %
|
|
Percentage of new
debt investment commitments at
fixed
rates
|
0.4 %
|
|
— %
|
|
Weighted average
interest rate of new debt investment
commitments(2)
|
10.2 %
|
|
11.5 %
|
|
Weighted average
spread over applicable base rate of new floating
rate debt investment commitments
|
4.8 %
|
|
6.6 %
|
|
|
|
|
|
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(1) Number of new
investment commitments represents commitments to a particular
portfolio company.
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(2) For the three
months ended March 31, 2024 and 2023, assumes each floating rate
commitment is subject to the greater of the interest rate floor (if
applicable) or 3-month SOFR, which was 5.30% and 4.91% as of March
31, 2024 and March 31, 2023, respectively.
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SOURCE Blue Owl Capital Corporation III
