EX-99.1 2 owl-ex991_6.htm EX-99.1 owl-ex991_6.htm

 

Exhibit 99.1

 

Owl Rock Capital Corp. Reports Third Quarter Net Investment Income Per Share of $0.33 and
NAV Per Share of $14.95

 

NEW YORK — November 3, 2021 — Owl Rock Capital Corporation (NYSE: ORCC, or the “Company”) today reported net investment income of $130.5 million, or $0.33 per share, and net income of $142.9 million, or $0.36 per share, for the third quarter ended September 30, 2021. Reported net asset value per share was $14.95 at September 30, 2021 as compared to $14.90 at June 30, 2021.

 

“We are very pleased to report strong results this quarter. We experienced a record level of both originations and repayments and were able to seamlessly redeploy capital from those repaid investments into equally attractive new investments,” commented Craig W. Packer, Chief Executive Officer of Owl Rock Capital Corporation. “We are very proud of where our portfolio stands today and to achieve the important milestone of earning our dividend from net investment income this quarter with continued strong credit performance.”

 

The Company’s Board of Directors has declared a fourth quarter 2021 dividend of $0.31 per share for stockholders of record as of December 31, 2021, payable on or before January 31, 2022.

 

PORTFOLIO AND INVESTING ACTIVITY

 

For the three months ended September 30, 2021, new investment commitments totaled $2,794.0 million across 21 new portfolio companies and 13 existing portfolio companies. This compares to $1,578.1 million for the three months ended June 30, 2021 across 16 new portfolio companies and 12 existing portfolio companies.

 

For the three months ended September 30, 2021, the principal amount of new investments funded was $2,292.6 million. For this period, the Company had $2,094.4 million aggregate principal amount in exits and repayments.

 

For the three months ended June 30, 2021, the principal amount of new investments funded was $1,405.6 million. For this period, the Company had $742.7 million aggregate principal amount in exits and repayments.

 

As of September 30, 2021 and June 30, 2021, the Company had investments in 130 and 129 portfolio companies with an aggregate fair value of $12.1 billion and $11.9 billion, respectively. As of September 30, 2021, the average investment size in each portfolio company was $93.2 million based on fair value.

 

As of September 30, 2021, based on fair value, our portfolio consisted of 77.0% first lien senior secured debt investments, 14.5% second lien senior secured debt investments, 1.6% unsecured notes, 1.5% preferred equity investments, 3.5% common equity investments and 1.9% investment funds and vehicles.

 

As of June 30, 2021, based on fair value, our portfolio consisted of 76.2% first lien senior secured debt investments, 16.5% second lien senior secured debt investments, 1.6% unsecured notes, 1.5% preferred equity investments, 2.8% common equity investments and 1.4% investment funds and vehicles.

 

As of September 30, 2021 and June 30, 2021, based on fair value, approximately 91.5% and 92.7% of the portfolio was invested in secured debt, respectively. As of September 30, 2021, 99.9% of our debt investments based on fair value in our portfolio were at floating rates.

 

As of September 30, 2021 and June 30, 2021, 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)1 was 7.9% and 8.0%, 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)1 was 7.9% and 8.0%, respectively.

 

1 

For non-stated rate income producing investments, computed based on (a) the dividend or interest income earned for the respective trailing twelve months ended on the measurement date, divided by (b) the ending cost or fair value.  In instances where historical dividend or interest income data is not available or not representative for the trailing twelve months ended, the dividend or interest income is annualized. Prior to 9/30/2021, non-stated rate income producing investments were computed based on (a) the IRR on the measurement date, divided by (b) the ending cost or fair value. As of June 30, 2021, weighted average total yield of accruing debt and income producing securities at fair value and cost was reported at 8.3% and 8.2%, respectively.

 

 

 

 

As of September 30, 2021, 2 investments with an aggregate fair value of $44.6 million were on non-accrual status, representing 0.4% of the total fair value of the portfolio.

 

RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2021

 

Investment Income

Investment income increased to $269.2 million for the three months ended September 30, 2021 from $187.1 million for the three months ended September 30, 2020, primarily due to an increase in our investment portfolio. Included in interest income is dividend income, which increased period over period, and other fees such as prepayment fees and accelerated amortization of upfront fees from unscheduled paydowns. Period over period, income generated from these other fees also increased, which is attributed to the increase in repayment activity.

 

Expenses

Total expenses increased to $137.0 million for the three months ended September 30, 2021 from $60.8 million, after the effect of the management and incentive fee waivers, for the three months ended September 30, 2020, primarily due to expiration of the management and incentive fee waivers in October 2020 and an increase in management fees and interest expense. Management fees increased period over period due to an increase in assets. The increase in interest expense was primarily driven by an increase in average daily borrowings, offset by a decrease in the average interest rate period over period.

 

Liquidity and Capital Resources

As of September 30, 2021, we had $794.7 million in cash and restricted cash, $7.0 billion in total principal value of debt outstanding, and $1.6 billion of undrawn capacity on our credit facilities. The Company’s weighted average interest rate on debt outstanding was 2.9% and 3.0% for the three months ended September 30, 2021 and June 30, 2021, respectively. Ending debt to equity was 1.06x and 1.00x for the three months ended September 30, 2021 and June 30, 2021, respectively.

 

Conference Call and Webcast Information

 

Conference Call Information:

The conference call will be broadcast live on November 4, 2021 at 10:00 a.m. Eastern Time on the Investor Resources section of ORCC’s website at www.OwlRockCapitalCorporation.com. Please visit the website to test your connection before the webcast. For a slide presentation that complements the earnings conference call, please visit the Events & Presentations page of the Investor Resources section of ORCC's website.

 

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

 

•

Domestic: 1 (888) 440-4182

 

•

International: (646) 960-0653

 

•

Conference ID: 7406736

 

All callers will need to enter the Conference ID followed by the # sign and 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 Investor Resources section of ORCC’s website, and via the dial-in numbers listed below:

 

•

Domestic: 1 (800) 770-2030

 

•

International: (647) 362-9199

 

•

Conference ID: 7406736

 

 

 

 

Financial Highlights

 

 

For the three months ended

 

($ in thousands except per share data)

 

September 30, 2021

 

 

June 30, 2021

 

 

September 30, 2020

 

Investments at Fair Value

 

$

12,110,098

 

 

$

11,906,872

 

 

$

9,918,302

 

Total Assets

 

$

13,075,878

 

 

$

12,635,426

 

 

$

10,234,261

 

Net Asset Value Per Share

 

$

14.95

 

 

$

14.90

 

 

$

14.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income

 

$

269,191

 

 

$

249,015

 

 

$

187,059

 

Net Investment Income

 

$

130,499

 

 

$

119,129

 

 

$

127,437

 

Net Income

 

$

142,851

 

 

$

150,180

 

 

$

216,047

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income Per Share

 

$

0.33

 

 

$

0.30

 

 

$

0.33

 

Net Realized and Unrealized Gains (and Losses)

Per Share

 

$

0.03

 

 

$

0.08

 

 

$

0.23

 

Net Income Per Share

 

$

0.36

 

 

$

0.38

 

 

$

0.56

 

Distributions Declared from Net Investment Income Per Share

 

$

0.31

 

 

$

0.31

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Yield of Accruing Debt and Income Producing Securities at Fair Value(1)

 

 

7.9

%

 

 

8.0

%

 

 

8.0

%

Weighted Average Yield of Accruing Debt and Income Producing Securities at Amortized Cost(1)

 

 

7.9

%

 

 

8.0

%

 

 

7.9

%

Percentage of Debt Investment Commitments at

Floating Rates

 

 

99.9

%

 

 

99.9

%

 

 

98.8

%

________________

 

(1)

For non-stated rate income producing investments, computed based on (a) the dividend or interest income earned for the respective trailing twelve months ended on the measurement date, divided by (b) the ending cost or fair value.  In instances where historical dividend or interest income data is not available or not representative for the trailing twelve months ended, the dividend or interest income is annualized. Prior to 9/30/2021, non-stated rate income producing investments were computed based on (a) the IRR on the measurement date, divided by (b) the ending cost or fair value. As of June 30, 2021, weighted average total yield of accruing debt and income producing securities at fair value and cost was reported at 8.3% and 8.2%, respectively. As of September 30, 2020, weighted average total yield of accruing debt and income producing securities at fair value and cost was reported at 8.1% and 8.0%, respectively.

 

 

consolidated statements of ASSETS and LIABILITIES

($ in thousands except per share data)

 

September 30, 2021

(Unaudited)

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments (amortized cost of $11,547,197 and $10,653,613, respectively)

 

$

11,584,751

 

 

$

10,569,691

 

Controlled, affiliated investments (amortized cost of $527,704 and $275,105, respectively)

 

 

525,347

 

 

 

272,381

 

Total investments at fair value (amortized cost of $12,074,901 and $10,928,718, respectively)

 

 

12,110,098

 

 

 

10,842,072

 

Cash (restricted cash of $14,217 and $8,841, respectively)

 

 

779,581

 

 

 

347,917

 

Foreign cash (cost of $15,326 and $9,641, respectively)

 

 

15,148

 

 

 

9,994

 

Interest receivable

 

 

62,377

 

 

 

57,108

 

Receivable for investments sold

 

 

77,426

 

 

 

6,316

 

Receivable from a controlled affiliate

 

 

4,127

 

 

 

2,347

 

Prepaid expenses and other assets

 

 

27,121

 

 

 

38,603

 

Total Assets

 

$

13,075,878

 

 

$

11,304,357

 

Liabilities

 

 

 

 

 

 

 

 

Debt (net of unamortized debt issuance costs of $114,874 and $91,085, respectively)

 

$

6,934,942

 

 

$

5,292,722

 

Distribution payable

 

 

121,877

 

 

 

152,087

 

Management fee payable

 

 

45,583

 

 

 

35,936

 

Incentive fee payable

 

 

27,682

 

 

 

19,070

 

Payables to affiliates

 

 

5,399

 

 

 

6,527

 

Accrued expenses and other liabilities

 

 

63,403

 

 

 

51,581

 

Total Liabilities

 

 

7,198,886

 

 

 

5,557,923

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

 

 

 

Common shares $0.01 par value, 500,000,000 shares authorized; 393,152,554 and 389,966,688 shares issued and outstanding, respectively

 

 

3,931

 

 

 

3,900

 

Additional paid-in-capital

 

 

5,985,429

 

 

 

5,940,979

 

Total distributable earnings (losses)

 

 

(112,368

)

 

 

(198,445

)

Total Net Assets

 

 

5,876,992

 

 

 

5,746,434

 

Total Liabilities and Net Assets

 

$

13,075,878

 

 

$

11,304,357

 

Net Asset Value Per Share

 

$

14.95

 

 

$

14.74

 

 

 

 

consolidated statements of operations

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

($ in thousands except per share data)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

241,966

 

 

$

179,597

 

 

$

686,314

 

 

$

561,236

 

Dividend Income

 

 

10,600

 

 

 

2,688

 

 

 

19,924

 

 

 

3,608

 

Other income

 

 

7,942

 

 

 

2,507

 

 

 

15,559

 

 

 

10,473

 

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

 

 

260,508

 

 

 

184,792

 

 

 

721,797

 

 

 

575,317

 

Investment income from controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,392

 

 

 

—

 

 

 

4,033

 

 

 

—

 

Dividend income

 

 

7,128

 

 

 

2,267

 

 

 

13,469

 

 

 

6,716

 

Other Income

 

 

163

 

 

 

—

 

 

 

480

 

 

 

—

 

Total investment income from controlled, affiliated investments

 

 

8,683

 

 

 

2,267

 

 

 

17,982

 

 

 

6,716

 

Total Investment Income

 

 

269,191

 

 

 

187,059

 

 

 

739,779

 

 

 

582,033

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

56,516

 

 

 

37,391

 

 

 

159,037

 

 

 

110,533

 

Management fee

 

 

45,586

 

 

 

36,460

 

 

 

131,703

 

 

 

104,852

 

Performance based incentive fees

 

 

27,682

 

 

 

22,302

 

 

 

74,727

 

 

 

70,500

 

Professional fees

 

 

3,849

 

 

 

3,330

 

 

 

10,966

 

 

 

9,782

 

Directors' fees

 

 

239

 

 

 

179

 

 

 

757

 

 

 

633

 

Other general and administrative

 

 

3,140

 

 

 

1,659

 

 

 

7,302

 

 

 

5,564

 

Total Operating Expenses

 

 

137,012

 

 

 

101,321

 

 

 

384,492

 

 

 

301,864

 

Management and incentive fees waived

 

 

—

 

 

 

(40,531

)

 

 

—

 

 

 

(122,925

)

Net Operating Expenses

 

 

137,012

 

 

 

60,790

 

 

 

384,492

 

 

 

178,939

 

Net Investment Income (Loss) Before Taxes

 

 

132,179

 

 

 

126,269

 

 

 

355,287

 

 

 

403,094

 

Income tax expense (benefit), including excise tax expense (benefit)

 

 

1,680

 

 

 

(1,168

)

 

 

3,004

 

 

 

239

 

Net Investment Income (Loss) After Taxes

 

$

130,499

 

 

$

127,437

 

 

$

352,283

 

 

$

402,855

 

Net Realized and Change in Unrealized Gain (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

$

14,475

 

 

$

80,619

 

 

$

133,961

 

 

$

(196,001

)

Income tax (provision) benefit

 

 

(4,383

)

 

 

—

 

 

 

(8,605

)

 

 

—

 

Controlled affiliated investments

 

 

985

 

 

 

4,615

 

 

 

367

 

 

 

(3,536

)

Translation of assets and liabilities in foreign currencies

 

 

(796

)

 

 

3,113

 

 

 

(3,716

)

 

 

3,237

 

Total Net Change in Unrealized Gain (Loss)

 

 

10,281

 

 

 

88,347

 

 

 

122,007

 

 

 

(196,300

)

Net realized gain (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

2,018

 

 

 

2,537

 

 

 

(24,656

)

 

 

2,885

 

Foreign currency transactions

 

 

53

 

 

 

(2,274

)

 

 

1,242

 

 

 

(2,364

)

Total Net Realized Gain (Loss)

 

 

2,071

 

 

 

263

 

 

 

(23,414

)

 

 

521

 

Total Net Realized and Change in Unrealized Gain (Loss)

 

 

12,352

 

 

 

88,610

 

 

 

98,593

 

 

 

(195,779

)

Net Increase (Decrease) in Net Assets Resulting from Operations

 

$

142,851

 

 

$

216,047

 

 

$

450,876

 

 

$

207,076

 

Earnings Per Share - Basic and Diluted

 

$

0.36

 

 

$

0.56

 

 

$

1.15

 

 

$

0.53

 

Weighted Average Shares Outstanding - Basic and Diluted

 

 

392,715,513

 

 

 

386,534,213

 

 

 

391,893,306

 

 

 

388,474,850

 

 

 

 

portfolio and investment activity

 

 

For the Three Months Ended September 30,

 

($ in thousands)

 

2021

 

 

2020(3)

 

New investment commitments

 

 

 

 

 

 

 

 

Gross originations

 

$

3,257,404

 

 

 

957,015

 

Less: Sell downs

 

 

(463,419

)

 

 

(113,404

)

Total new investment commitments

 

$

2,793,985

 

 

$

843,611

 

Principal amount of investments funded:

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

$

2,154,036

 

 

$

483,756

 

Second-lien senior secured debt investments

 

 

71,000

 

 

 

121,592

 

Unsecured debt investments

 

 

—

 

 

 

41,463

 

Preferred equity investments

 

 

975

 

 

 

—

 

Common equity investments

 

 

8,820

 

 

 

—

 

Investment funds and vehicles

 

 

57,750

 

 

 

—

 

Total principal amount of investments funded

 

$

2,292,581

 

 

$

646,811

 

Principal amount of investments sold or repaid:

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

$

(1,815,765

)

 

$

(44,711

)

Second-lien senior secured debt investments

 

 

(278,613

)

 

 

(3,517

)

Unsecured debt investments

 

 

—

 

 

 

—

 

Preferred Equity investments

 

 

—

 

 

 

—

 

Common Equity investments

 

 

—

 

 

 

—

 

Investment funds and vehicles

 

 

—

 

 

 

—

 

Total principal amount of investments sold or repaid

 

$

(2,094,378

)

 

$

(48,228

)

Number of new investment commitments in new portfolio companies(1)

 

 

21

 

 

8

 

Average new investment commitment amount

 

 

104,913

 

 

$

90,138

 

Weighted average term for new debt investment commitments (in years)

 

 

5.7

 

 

 

6.1

 

Percentage of new debt investment commitments at

floating rates

 

 

100.0

%

 

 

100.0

%

Percentage of new debt investment commitments at

fixed rates

 

 

0.0

%

 

 

0.0

%

Weighted average interest rate of new debt investment

commitments(2)

 

 

7.1

%

 

 

8.2

%

Weighted average spread over LIBOR of new floating rate debt investment commitments

 

 

6.2

%

 

 

7.2

%

________________

 

(1)

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

 

(2)

Assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month LIBOR, which was 0.13% and 0.23% as of September 30, 2021 and 2020, respectively.

 

(3)

As of September 30, 2020, preferred equity investments and common equity investments were reported in aggregate as equity investments.

 

 

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 September 30, 2021, ORCC had investments in 130 portfolio companies with an aggregate fair value of $12.1 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.

 

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

212-651-4705

orccir@blueowl.com

 

Media Contact:

Prosek Partners

David Wells / Josh Clarkson

pro-blueowl@prosek.com