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.
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
|
|
$
13,157,251
|
$
13,010,345
|
$
12,756,323
|
|
Total Assets
|
|
$
13,679,100
|
$
13,584,853
|
$
13,203,697
|
|
Net Asset Value Per
Share
|
|
$
15.15
|
$
14.99
|
$
14.88
|
|
|
|
|
|
|
|
Investment
Income
|
|
$
377,622
|
$
350,506
|
$
264,159
|
|
Net Investment
Income
|
|
$
177,859
|
$
162,464
|
$
122,356
|
|
Net Income
|
|
$
201,842
|
$
191,888
|
$
43,986
|
|
|
|
|
|
|
|
Net Investment Income
Per Share
|
|
$
0.45
|
$
0.41
|
$
0.31
|
|
Net Realized and
Unrealized Gains (and Losses)
Per Share
|
|
$
0.07
|
$
0.07
|
$
(0.20)
|
|
Net Income Per
Share
|
|
$
0.52
|
$
0.49
|
$
0.11
|
|
Distributions Declared
from Net Investment
Income Per Share
|
|
$
0.33
|
$
0.33
|
$
0.31
|
|
Supplemental
Distributions Declared from Net
Investment Income Per Share
|
|
$
0.06
|
$
0.04
|
$
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)
|
|
$
11,923,041
|
|
$
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
|
|
$
13,679,100
|
|
$
13,584,853
|
Liabilities
|
|
|
|
|
Debt (net of
unamortized debt issuance costs of $91,267 and $95,647,
respectively)
|
|
$
7,383,214
|
|
$
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
|
|
$
13,679,100
|
|
$
13,584,853
|
Net Asset Value Per
Share
|
|
$
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
|
|
$
288,678
|
|
$
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
|
|
$
177,859
|
|
$
122,356
|
Net Realized and
Change in Unrealized Gain (Loss)
|
|
|
|
|
Net change in
unrealized gain (loss):
|
|
|
|
|
Non-controlled,
non-affiliated investments
|
|
$
65,423
|
|
$
(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
|
|
$
201,842
|
|
$
43,986
|
Earnings Per Share
- Basic and Diluted
|
|
$
0.52
|
|
$
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
|
|
$
533,848
|
|
Less: Sell
downs
|
—
|
|
(3,409)
|
|
Total new investment
commitments
|
$
175,114
|
|
$
530,439
|
|
Principal amount of
investments funded:
|
|
|
|
|
First-lien senior
secured debt investments
|
$
36,809
|
|
$
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
|
$
94,281
|
|
$
347,884
|
|
Principal amount of
investments sold or repaid:
|
|
|
|
|
First-lien senior
secured debt investments
|
$
(56,696)
|
|
$
(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
|
$
(76,089)
|
|
$
(374,837)
|
|
Number of new
investment commitments in new portfolio
companies(1)
|
3
|
|
17
|
|
Average new
investment commitment amount
|
$
941
|
|
$
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
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