Blue Owl Capital Corporation (NYSE: OBDC) reported a decline in new investment activity in Q2, which it attributed to depressed new deal activity and a marked drop in refinancing transactions. “As much as 50%, or even 75%, [of activity] in any given quarter came from refinancing…
extension activity from existing portfolio companies,” said OBDC President Logan Nicholson on an Aug. 6 earnings call. “In a spread-widening environment like this, you see that activity grind to a halt.” OBDC’s portfolio contracted in Q2, following several consecutive quarters of net repayments. The lender reported $219 million of gross fundings in Q2, against $747 million of sales and repayments
Overall, the fair value of OBDC’s portfolio has declined to roughly $15.0 billion, down from $16.9 billion one year earlier. “Activity is still muted. We’re optimistic and hope that it picks up. There are quite a few people who would like to transact,” Nicholson added.
Blue Owl highlighted its exit from a large preferred equity investment in the automotive platform Mavis Tire. OBDC said it collected roughly $274 million in cash, including $66 million of accrued PIK interest. Blue Owl said the transaction marked its largest PIK investment realization to date.