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Blue Owl CEO Calls Halting Redemption Headlines A 'Mischaracterization' - Blue Owl Capital (NYSE:OWL)
Blue Owl sold $1.4 billion in loans at near-par value to fund an immediate 30% capital return to OBDC II shareholders and reduce debt, addressing investor concerns about private credit valuations.
- On Thursday, Blue Owl BDCs agreed to sell $1.4 billion of loans at 99.7% of par to four North American pension and insurance investors, with settlement expected in the first quarter and a return of capital payable by March 31, 2026.
- OBDC II, a $1.7 billion unlisted fund, had been slated to wind down after Blue Owl called off the November merger and restricted redemptions amid falling market valuations.
- The sales include $600 million from OBDC II, $400 million each from OTIC and OBDC, mostly 97% senior secured loans, with strong demand from institutional investors, said Craig W. Packer.
- The firm said proceeds will fund an immediate payout of 30% of OBDC II's worth and monthly distributions of $0.0533 per share for February and March 2026.
- Shares plunged after the sale was announced, with Blue Owl Capital stock down 10% and 26% year to date as investors rotate from similar managers amid slipping loan yields and private credit unease.
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The private lender Blue Owl announced that it would liquidate $1.4 billion to pay out investors, which would lead to a price collapse.
Blue Owl Sets Off New Private Credit Fears
Shares of Blue Owl Capital, the giant private lender, plunged on Thursday after the company announced that it was changing how investors can get their money out from one of its funds, raising fresh concerns about potential problems lurking in the private credit industry. Blue Owl said investors would not be able to ask for a set amount of money back every quarter. Going forward, the firm will decide how much it will pay out quarterly. On a confe…
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