Company Overview - Blue Owl Capital Corporation (NYSE: OBDC) is a specialty finance company focused on lending to U.S. middle-market companies [3] - As of March 31, 2025, OBDC had investments in 236 portfolio companies with an aggregate fair value of $17.7 billion [3] - OBDC is regulated as a business development company under the Investment Company Act of 1940 and is externally managed by Blue Owl Credit Advisors LLC, an SEC-registered investment adviser [3] Financial Results Announcement - OBDC will release its financial results for the second quarter ended June 30, 2025, on August 6, 2025, after market close [1] - A webcast/conference call to discuss these results is scheduled for August 7, 2025, at 10:00 a.m. Eastern Time [1] - The conference call will be accessible via OBDC's website and by dialing specific numbers for domestic and international participants [2]

Company Overview - Blue Owl Capital Corporation (NYSE: OBDC) is a Business Development Company (BDC) [1] Financial Performance - In Q1, Blue Owl Capital delivered a total NAV return of 2%, which is in line with the median return in the coverage [1]

Group 1 - The focus is on growth and dividend income as a strategy for retirement planning [1] - The portfolio is structured to generate monthly dividend income that grows through reinvestment and annual increases [1] Group 2 - The article expresses personal opinions and is not intended as investment advice [2][3] - It emphasizes the importance of conducting individual research before making investment decisions [2]

Group 1 - The article promotes iREIT on Alpha as a source for in-depth research on various income alternatives including REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs [1] - It highlights the positive feedback from users, with 438 testimonials, most of which are rated 5 stars, indicating high satisfaction [1] Group 2 - The article includes a disclosure stating that the author has a beneficial long position in the shares of AM, indicating a personal investment interest [2] - It clarifies that the opinions expressed are those of the author and not influenced by compensation from any company mentioned [2]

Core Insights - Blue Owl Capital Corp. (NYSE: OBDC) demonstrated resilience in the first quarter earnings, showcasing robust net investment income despite a challenging and volatile market [1] - The company successfully grew its portfolio value, indicating strong performance in a difficult economic environment [1] Financial Performance - The first quarter earnings report highlighted the company's ability to maintain strong net investment income [1] - The growth in portfolio value reflects the company's strategic positioning and adaptability in the current market conditions [1]

Core Viewpoint - Blue Owl Capital Corporation reported a decline in earnings per share (EPS) for the first quarter of 2025, missing consensus estimates, while total investment income increased year over year but also fell short of expectations [1][3]. Financial Performance - The first-quarter EPS was 39 cents, down from 47 cents a year ago and below the Zacks Consensus Estimate of 43 cents [1]. - Total investment income reached $464.6 million, reflecting a 16.3% year-over-year increase, but missed the consensus estimate by 2.6% [1][3]. - Net investment income rose 10.1% year over year to $201.3 million, exceeding the estimate of $184.7 million [3]. - Total expenses increased by 22.7% year over year to $259.6 million, primarily due to higher interest expenses and management fees, surpassing the estimate of $250.4 million [4]. Investment Commitments and Portfolio - Blue Owl Capital made total new investment commitments of $1.2 billion across 12 new portfolio companies and 22 existing ones [3]. - The company ended the quarter with investments in 236 portfolio companies, with an aggregate fair value of $17.7 billion, resulting in an average investment size of $75 million per company [3]. Cash Flow and Debt - The cash balance at the end of the first quarter was $511.5 million, slightly up from $505.7 million at the end of 2024 [4]. - Total assets increased to $18.4 billion from $13.9 billion at the end of 2024 [4]. - Debt rose to $10.2 billion from $7.5 billion at the end of 2024, with a net debt to equity ratio of 1.26X [5]. Dividend and Share Repurchase - The board declared a second-quarter 2025 dividend of 37 cents per share, payable on or before July 15, 2025, and a supplemental dividend of 1 cent per share for the first quarter [6]. - The company has a stock repurchase program allowing for the purchase of up to $150 million in shares, but no repurchases were made in the first quarter [7].

Group 1 - After the merger with Blue Owl Capital Corporation III, Blue Owl Capital Corporation became the second-largest business development company in the world, following Ares Capital, in terms of assets and market capitalization [1] - The merger significantly enhances Blue Owl's position in the market, indicating strong growth potential for the company [1] Group 2 - The article emphasizes the importance of identifying investment opportunities that combine growth and quality factors, suggesting a focus on companies with strong financial statements [1] - The analyst's personal investment experience spans seven years, highlighting a long-term perspective in evaluating investment opportunities [1]

Financial Performance - The net asset value per share was $15.14 as of March 31, 2025, compared to $15.26 as of December 31, 2024[2] - Adjusted net investment income per share was $0.39 as of March 31, 2025[2] - GAAP net income per share increased to $0.49, up from $0.40 as of December 31, 2024[2] - The company declared a Q1 2025 total dividend per share of $0.38, resulting in an annualized dividend yield of 10.0%[2] Portfolio Composition and Activity - The total portfolio at fair value reached $17.7 billion, an increase from $13.2 billion as of December 31, 2024[2] - The portfolio included 236 companies, compared to 227 as of December 31, 2024[2] - New investment commitments (net of sell downs) amounted to $1.2 billion[2] - Non-accrual investments represented 1.4% of the total portfolio at cost and 0.8% at fair value[2] Balance Sheet and Liquidity - The company had $3.0 billion in liquidity, including cash and undrawn debt[2] - The debt-to-equity ratio was 1.26x, up from 1.19x as of December 31, 2024[2] - 50% of the debt funding mix comprised unsecured debt[2]

Financial Data and Key Metrics Changes - The company reported total portfolio investments of nearly $18 billion, total net assets of nearly $8 billion, and total outstanding debt of approximately $10 billion [17] - The first quarter NAV per share was $15.14, down $0.12 from the last quarter, primarily due to changes in credit spreads and write-downs on a small number of high-focus investments [17] - Adjusted net investment income was $0.39 per share, down $0.08 from the prior quarter, reflecting a reduction in one-time income [17][18] - The company declared a supplemental dividend of $0.01 and a second quarter base dividend of $0.37, indicating a 106% dividend coverage [18][19] Business Line Data and Key Metrics Changes - The company recorded $1.2 billion of new investment commitments and $800 million of fundings in the first quarter, with over 90% of direct loan originations consisting of first lien investments [9][10] - The median EBITDA of portfolio borrowers grew slightly to $120 million, and weighted average EBITDA increased to $215 million [10] - The non-accrual rate was 0.8% at fair value and 1.4% at cost, compared to 0.4% and 1.9% in the prior quarter, reflecting two additions and the removal of three positions [12] Market Data and Key Metrics Changes - The company noted that portfolio company revenues and EBITDA increased in the mid to high single digits year over year, approximately double the U.S. GDP growth rate [11] - The average loan-to-value (LTV) ratio was just over 40%, providing significant support underneath the capital [11] - The company highlighted a stable interest coverage ratio of 1.8 times based on current spot rates, benefiting from lower rates [13] Company Strategy and Development Direction - The company aims to capitalize on market volatility by providing support to borrowers and sponsors facing challenges in accessing financing [23][25] - The strategy remains focused on credit quality, with an emphasis on upper middle market companies and diversified portfolios [84] - The company is exploring opportunities to increase exposure to non-traditional lending strategies, aiming to grow this segment from low double digits to around 15% of the portfolio [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience and the ability to maintain dividend levels despite macroeconomic uncertainties [26] - The company is closely monitoring investments for potential tariff impacts but remains confident in its defensive positioning [14] - Management acknowledged the uncertainty in the M&A environment due to tariffs and indicated that this may continue for a while [32] Other Important Information - The company introduced non-GAAP accounting adjustments due to the merger with OBDE, recognizing an $83 million purchase discount on the assets acquired [15] - The company ended the quarter with over $3 billion of total cash and capacity on its facilities, providing ample liquidity to meet near-term funding needs [21] Q&A Session Summary Question: Perspective on macroeconomic developments and M&A activity - Management noted that the M&A environment remains muted due to uncertainty created by tariffs, impacting deal flow and spreads [30][32] Question: Timeline for public listing of OTF post-merger - Management stated there is nothing specific to disclose regarding the public listing of OTF at this time [39][40] Question: Share repurchase strategy during volatility - Management confirmed that share repurchase programs are regularly evaluated, but recent volatility did not coincide with open windows for repurchases [46][48] Question: Opportunities to rationalize inherited liabilities - Management indicated that there are opportunities to reprice certain dropdown facilities and CLOs inherited from the merger [51][52] Question: Probability of near-term recession and its impact on underwriting - Management acknowledged the need for caution in underwriting due to potential economic changes but noted that their portfolio companies are currently stable [57][58] Question: Operational efficiencies from the merger - Management highlighted ongoing efforts to optimize capital structure and reduce funding costs, with some synergies already realized [72][75] Question: Pipeline mix of new versus incumbent borrowers - Management reported that more than half of the deal flow in the first quarter came from existing borrowers, with a consistent pipeline expected [92][93]

Financial Data and Key Metrics Changes - The company reported total portfolio investments of nearly $18 billion and total net assets of nearly $8 billion, with total outstanding debt of approximately $10 billion [16] - The first quarter NAV per share was $15.14, down $0.12 from the last quarter, primarily due to changes in credit spreads and write-downs on a small number of high-focus investments [16] - Adjusted net investment income was $0.39 per share, down $0.08 from the prior quarter, reflecting a reduction in one-time income [16][17] - The company declared a supplemental dividend of $0.01 and a base dividend of $0.37 for the second quarter, indicating a 106% dividend coverage [18][19] Business Line Data and Key Metrics Changes - New investment commitments totaled $1.2 billion, with fundings of $800 million, excluding joint venture and strategic equity activity [7] - Over 90% of first-quarter direct loan originations were first lien investments, increasing from 73% to 77% of the portfolio over the last year [8][9] - The median EBITDA of portfolio borrowers grew slightly to $120 million, while weighted average EBITDA increased to $215 million [9] - The non-accrual rate was 0.8% at fair value and 1.4% at cost, compared to 0.41% and 0.9% in the prior quarter [11] Market Data and Key Metrics Changes - The company noted a slowdown in M&A activity due to recent policy shifts and uncertainty around tariffs, impacting deal flow [7][32] - The public loan market experienced volatility, but private credit spreads remained stable, with some market participants noting a 25 to 50 basis points widening [34][81] - The company highlighted that the majority of deal flow in the first quarter came from existing borrowers, with more than half being add-ons and refinancings [93] Company Strategy and Development Direction - The company aims to capitalize on market volatility by providing support to borrowers and sponsors facing challenges in accessing financing [23] - The strategy remains focused on credit quality, with an emphasis on upper middle market companies and diversified portfolios [84] - The company is exploring opportunities to rationalize liabilities inherited from the merger to lower costs [50][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience and the ability to maintain dividend levels despite macroeconomic uncertainties [25] - The company is closely monitoring investments for potential tariff impacts but remains confident in its defensive positioning [13] - Management indicated that while macroeconomic uncertainty persists, the market anticipates a significant reduction in interest rates, which will impact earnings [24] Other Important Information - The company ended the quarter with over $3 billion in total cash and capacity on its facilities, providing ample liquidity to meet near-term funding needs [21] - The company has visibility into several large repayments expected in the near term, which will help optimize its capital structure [20] Q&A Session Summary Question: Perspective on macro developments and M&A activity - Management noted that the M&A environment remains muted due to uncertainty around tariffs, impacting deal flow and spreads [32][34] Question: Timeline for public listing of OTF - Management stated there is nothing specific to disclose regarding the public listing of OTF at this time [38][39] Question: Share repurchase strategy - Management confirmed that share repurchase programs are regularly evaluated, but recent volatility did not coincide with open windows for repurchases [44][46] Question: Opportunities in inherited liabilities - Management indicated that there are opportunities to rationalize inherited liabilities at lower costs, with steps already taken to reprice certain facilities [50][72] Question: Probability of near-term recession - Management acknowledged the need for caution in underwriting due to potential economic changes but noted that the portfolio companies are currently not showing signs of economic weakness [56][58] Question: Incremental thoughts on non-traditional lending strategies - Management expressed interest in increasing exposure to diversified lending strategies, aiming to grow this segment over time [62][66] Question: Spillover income and dividend sustainability - Management clarified that spillover income is intended to sustain dividends during periods of volatility but will not be used to cover long-term income shortfalls [88][89] Question: Pipeline mix of new versus incumbent borrowers - Management reported that more than half of the deal flow in the first quarter came from existing borrowers, with a consistent pipeline expected for the second quarter [93][95]