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 Owl Rock Capital Corp. Reports Third Quarter Net Investment Income Per Share of $0.36 and NAV Per Share of $15.22

10/31/2019

NEW YORK--(BUSINESS WIRE)-- Owl Rock Capital Corporation (NYSE: ORCC, or the “Company”) today reported net investment income of $137.9 million, or $0.36 per share, and net income of $118.7 million, or $0.31 per share, for the third quarter ended September 30, 2019. Reported net asset value per share was $15.22 at September 30, 2019 as compared to $15.28 at June 30, 2019.

The Company’s Board of Directors has declared a fourth quarter 2019 dividend of $0.31 per share and had previously declared a special dividend of $0.04 per share, both for stockholders of record as of December 31, 2019, payable on or before January 31, 2020.

The Board of Directors also previously declared the following special dividends, for shareholders of record as of the last day of each respective quarter:

  • Q1 2020: $0.08 per share
  • Q2 2020: $0.08 per share
  • Q3 2020: $0.08 per share
  • Q4 2020: $0.08 per share

The Company agent will repurchase shares of common stock on the Company’s behalf when the market price per share is below the most recently reported net asset value per share. This corresponds to a market price of $15.21 based on September 30, 2019 NAV per share of $15.22. The Company 10b5-1 Plan commenced August 19, 2019 and will terminate upon the earliest to occur of (i) February 19, 2021 or (ii) such time as the approved $150 million repurchase amount has been fully utilized, subject to certain conditions.

Portfolio and Investing Activity

For the three months ended September 30, 2019, new investment commitments totaled $1,542.7 million. This compares to $953.4 million for the three months ended June 30, 2019.

For the three months ended September 30, 2019, the principal amount of new investments funded was $1,074.8 million across 10 new portfolio companies and 9 existing portfolio companies. For this period, the Company had $215.3 million aggregate principal amount in exits and repayments.

For the quarter ended June 30, 2019, the principal amount of new investments funded was $772.9 million across 13 new portfolio companies and 13 existing portfolio companies. For this period, the Company had $465.2 million aggregate principal amount in exits and repayments.

As of September 30, 2019 and June 30, 2019, the Company had investments in 96 and 90 portfolio companies with an aggregate fair value of $8.3 billion and $7.2 billion, respectively. As of September 30, 2019, the average investment size in each portfolio company was $86.1 million based on fair value.

As of September 30, 2019, based on fair value, our portfolio consisted of 79.4% first lien senior secured debt investments, 19.3% second lien senior secured debt investments, 1.1% investment funds and vehicles, and 0.2% equity investments.

As of June 30, 2019, based on fair value, our portfolio consisted of 81.3% first lien senior secured debt investments, 16.9% second lien senior secured debt investments, 0.3% unsecured debt investments, 1.3% investment funds and vehicles, and 0.2% equity investments.

As of September 30, 2019 and June 30, 2019, approximately 98.7% and 98.2% of the portfolio was invested in secured debt, respectively. As of September 30, 2019, 100.0% of our debt investments based on fair value in our portfolio were at floating rates.

As of September 30, 2019 and June 30, 2019, the weighted average total yield of debt and income-producing securities at fair value (which includes interest income and amortization of fees and discounts) was 9.0% and 9.1%, respectively, and the weighted average total yield of debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 8.9% and 9.1%, respectively.

As of September 30, 2019, no investments were on non-accrual status.

Results of Operations for the Three Months Ended September 30, 2019

Investment Income

Investment income increased to $188.1 million for the three months ended September 30, 2019 from $176.1 million for the three months ended June 30, 2019. The increase was primarily due to an increase in interest income as a result of an increase in our investment portfolio.

Expenses

Total net expenses decreased to $49.9 million for the three months ended September 30, 2019 from $56.7 million for the three months ended June 30, 2019, primarily due to lower interest expense as a result of decreased leverage in the quarter following the final capital call in June.

Liquidity and Capital Resources

As of September 30, 2019, we had $198 million in cash and restricted cash, $2.5 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 5.1% and 5.0% for the three months ended September 30, 2019 and June 30, 2019, respectively. Average debt to equity was 0.35x and 0.65x during the three months ended September 30, 2019 and June 30, 2019, respectively.

Conference Call and Webcast Information

Conference Call Information:

The conference call will be broadcast live on October 31, 2019 at 9:00 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.

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

Domestic: (866) 393-4306

International: (734) 385-2616

Conference ID: 6251428

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: (855) 859-2056

International: (404) 537-3406

Conference ID: 6251428

About Owl Rock Capital Corporation

Owl Rock Capital Corporation (ORCC) is a specialty finance company focused on lending to U.S. middle-market companies. As of September 30, 2019 ORCC had investments in 96 portfolio companies with an aggregate fair value of $8.3 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 affiliate of Owl Rock Capital Partners. Owl Rock Capital Partners, together with its subsidiaries, is a New York based direct lending platform with approximately $14.6 billion of assets under management as of September 30, 2019.

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.

 
Owl Rock Capital Corporation
Consolidated Financial Highlights
(Amounts in thousands, except per share amounts)
(Unaudited)
 
For the three months ended
September 30, 2019 June 30, 2019 September 30, 2018
Investments at Fair Value

$ 8,270,254

$ 7,240,755

$ 4,692,912

Total Assets

$ 8,568,677

$ 7,547,803

$ 4,875,898

Net Asset Value Per Share

$ 15.22

$ 15.28

$ 15.27

 
Investment Income

$ 188,154

$ 176,135

$ 110,485

Net Investment Income

$ 137,906

$ 119,622

$ 71,608

Net Income

$ 118,652

$ 124,670

$ 72,326

 
Net Investment Income Per Share

$ 0.36

$ 0.42

$ 0.44

Net Realized and Unrealized Gains (and Losses) Per Share

$ (0.05)

$ 0.02

$ 0.00

Net Income Per Share

$ 0.31

$ 0.44

$ 0.44

Distributions Declared from Net Investment Income

$ 0.33

$ 0.44

$ 0.39

 
Weighted Average Yield of Debt and Income Producing Securities at Fair Value

9.0%

9.1%

9.4%

Weighted Average Yield of Debt and Income Producing Securities at Amortized Cost

8.9%

9.1%

9.4%

Percentage of Debt Investment Commitments at Floating Rates

100.0%

99.7%

100.0%

 
Owl Rock Capital Corporation
Consolidated Statements of Assets and Liabilities
(Amounts in thousands, except share and per share amounts)
 
September 30,
2019 (Unaudited)
December 31,
2018
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $8,204,082 and
$5,720,295, respectively)

$ 8,178,157

$ 5,697,447

Controlled, affiliated investments (amortized cost of $93,267 and $91,138,
respectively)

92,097

86,622

Total investments at fair value (amortized cost of $8,297,349 and $5,811,433, respectively)

8,270,254

5,784,069

Cash (restricted cash of $12,969 and $6,013, respectively)

197,618

127,603

Interest receivable

55,534

29,680

Receivable for investments sold

23,261

Receivable from a controlled affiliate

2,290

8,100

Prepaid expenses and other assets

19,710

1,590

Total Assets

$ 8,568,667

$ 5,951,042

Liabilities
Debt (net of unamortized debt issuance costs of $38,176 and $22,335, respectively)

$ 2,459,023

$ 2,567,717

Distribution payable

128,421

78,350

Management fee payable

14,760

14,049

Payables to affiliates

4,657

2,847

Payable for investments purchased

1,627

3,180

Accrued expenses and other liabilities

35,554

20,054

Total Liabilities

2,644,042

2,686,197

Commitments and contingencies
Net Assets
Common shares $0.01 par value, 500,000,000 shares authorized; 389,155,516 and
216,204,837 shares issued and outstanding, respectively

3,892

2,162

Additional paid-in-capital

5,907,924

3,271,162

Total distributable earnings (losses)

12,809

(8,479)

Total Net Assets

5,924,625

3,264,845

Total Liabilities and Net Assets

$ 8,568,667

$ 5,951,042

Net Asset Value Per Share

$ 15.22

$ 15.10

 
Owl Rock Capital Corporation
Consolidated Statement of Operations
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,

 

 

2019

 

2018

 

2019

 

2018

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

$ 180,944

$ 104,868

$ 498,747

$ 246,064

Other income

4,921

2,164

9,447

6,770

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

185,865

107,032

508,194

252,834

Investment income from controlled, affiliated investments:
Dividend income

2,289

2,226

7,570

5,149

Other income

1,227

4,046

Total investment income from controlled, affiliated investments

2,289

3,453

7,570

9,195

Total Investment Income

188,154

110,485

515,764

262,029

Expenses
Interest expense

29,434

21,386

101,021

50,545

Management fee

26,793

13,323

57,434

38,100

Performance based incentive fees

19,674

19,674

Professional fees

2,886

2,524

7,361

5,567

Directors' fees

169

138

445

404

Other general and administrative

2,697

1,274

6,248

3,973

Total Operating Expenses

81,653

38,645

192,183

98,589

Management and incentive fees waived

(31,707)

(31,707)

Net Operating Expenses

49,946

38,645

160,476

98,589

Net Investment Income (Loss) Before Taxes

138,208

71,840

355,288

163,440

Excise tax expense (benefit)

302

232

1,754

815

Net Investment Income (Loss) After Taxes

$ 137,906

$ 71,608

$ 353,534

$ 162,625

Net Realized and Unrealized Gain (Loss)
Net change in unrealized gain (loss):
Non-controlled, non-affiliated investments

$ (20,846)

$ (3,476)

$ (376)

$ 5,470

Controlled affiliated investments

284

168

3,346

(1,013)

Translation of assets and liabilities in foreign currencies

(146)

(134)

(168)

(134)

Total Net Change in Unrealized Gain (Loss)

(20,708)

(3,442)

2,802

4,323

Net realized gain (loss):
Non-controlled, non-affiliated investments

1,285

4,027

1,102

234

Foreign currency transactions

169

133

372

133

Total Net Realized Gain (Loss)

1,454

4,160

1,474

367

Total Net Realized and Unrealized Gain (Loss)

(19,254)

718

4,276

4,690

Net Increase (Decrease) in Net Assets Resulting from Operations

$ 118,652

$ 72,326

$ 357,810

$ 167,315

Earnings Per Share - Basic and Diluted

$ 0.31

$ 0.44

$ 1.18

$ 1.29

Weighted Average Shares Outstanding - Basic and Diluted

384,846,445

163,401,485

302,373,486

129,234,396

 
Owl Rock Capital Corporation
Portfolio and Investment Activity
(Amounts in thousands)
(Unaudited)
 
For the Three Months Ended September 30,

 

 

2019

 

2018

New investment commitments
Gross originations

$ 1,631,537

$ 2,019,388

Less: Sell downs

(88,809)

(303,690)

Total new investment commitments

$ 1,542,728

$ 1,715,698

Principal amount of investments funded:
First-lien senior secured debt investments

$ 845,282

$ 1,160,059

Second-lien senior secured debt investments

443,270

311,137

Unsecured debt investments
Equity investments
Investment funds and vehicles

1,500

9,629

Total principal amount of investments funded

$ 1,290,052

$ 1,480,825

Principal amount of investments sold or repaid:
First-lien senior secured debt investments

$ (140,281)

$ (97,259)

Second-lien senior secured debt investments

(52,000)

(145,350)

Unsecured debt investments

(23,000)

Equity investments

(2,760)

Investment funds and vehicles
Total principal amount of investments sold or repaid

$ (215,281)

$ (245,369)

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

10

17

Average new investment commitment amount

$ 129,504

$ 93,492

Weighted average term for new investment commitments (in years)

6.7

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 investment commitments(2)

8.7%

8.1%

Weighted average spread over LIBOR of new floating rate investment commitments

6.6%

5.7%

_____________
(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 2.09% and 2.40% as of September 30, 2019 and 2018, respectively.

 

Investors:
Investor Relations / Dana Sclafani
(212) 651-4705
ORCCIR@owlrock.com

Media:
Sard Verbinnen & Co
Margaret Popper / Brandon Messina / Hayley Cook
(212) 687-8080

Source: Owl Rock Capital Corporation

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