Owl Rock(US:OBDC)2022-08-04 17:44Company and Industry Overview * Company: Owl Rock Capital Corporation (ORCC) * Industry: Business Development Companies (BDCs), Direct Lending * Focus: ORCC specializes in providing senior secured loans to middle market companies, particularly in non-cyclical sectors such as software, insurance, and healthcare. Key Financial Results * Net Asset Value (NAV) Per Share: $14.48 (down from $14.88 in Q1 2022) * Net Investment Income (NII) Per Share: $0.32 (up from $0.31 in Q1 2022) * Total Portfolio Investments: $12.6 billion * Outstanding Debt: $7.1 billion * Total Net Assets: $5.7 billion * Net Leverage: 1.2 times debt to equity Market Environment and Strategy * Market Volatility: ORCC views market volatility as an opportunity due to increased demand for private credit solutions as banks pull back. * Specialized Lending: ORCC is actively seeking opportunities in specialized lending verticals, such as asset-based lending and senior loan funds, to enhance returns. * Credit Quality: ORCC maintains a strong credit quality with only one company on non-accrual status and an annualized loss ratio of approximately 15 basis points. Portfolio Composition * Sector Allocation: Software, insurance, healthcare, and food and beverage are the primary sectors in ORCC's portfolio. * Loan Structure: Senior secured first lien loans with an average loan-to-value ratio of approximately 45%. Future Outlook * NII Growth: ORCC expects NII to grow in Q3 2022 based on interest rate elections and potentially in Q4 2022 if rates continue to rise or repayment activity increases. * Specialized Lending: ORCC plans to continue growing its specialized lending investments, targeting a mid-single-digit increase in the next few years. * Dividend Payout: ORCC is considering increasing its dividend payout if earnings continue to be strong and the rate environment remains favorable. Risks and Uncertainties * Economic Uncertainty: ORCC is monitoring economic conditions and preparing for a potential recession. * Credit Risk: While ORCC maintains a strong credit quality, there is always a risk of credit issues in the portfolio. * Market Conditions: Changes in market conditions could impact ORCC's ability to originate new loans and invest in specialized lending verticals.