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Owl Rock Capital Corp. Reports Third Quarter Net Investment Income Per Share of $0.33 and NAV Per Share of $14.67

11/04/2020

NEW YORK, Nov. 4, 2020 /PRNewswire/ -- Owl Rock Capital Corporation (NYSE: ORCC, or the "Company") today reported net investment income of $127.4 million, or $0.33 per share, and net income of $216.0 million, or $0.56 per share, for the third quarter ended September 30, 2020. Reported net asset value per share was $14.67 at September 30, 2020 as compared to $14.52 at June 30, 2020.

Craig W. Packer, Chief Executive Officer of Owl Rock Capital Corporation commented, "We are pleased with our results this quarter, which we believe continue to demonstrate the merits of our strategy and the strength of our portfolio. Our investments have proven to be resilient in the face of a challenging economic backdrop and our credit performance has generally come in towards the higher end of what we could have hoped for at this point in the economic recovery."

The Company's Board of Directors has declared a fourth quarter 2020 dividend of $0.31 per share and had previously declared a special dividend of $0.08 per share, both for stockholders of record as of December 31, 2020, payable on or before January 19, 2021.

On November 3, 2020, the Board approved a repurchase program under which the Company may repurchase up to $100 million of the Company's outstanding common stock. Under the program, purchases may be made at management's discretion from time to time in open-market transactions. Unless extended by the Board, the repurchase program will terminate 12-months from the date it was approved.

PORTFOLIO AND INVESTING ACTIVITY

For the three months ended September 30, 2020, new investment commitments totaled $843.6 million. This compares to $342.7 million for the three months ended June 30, 2020.

For the three months ended September 30, 2020, the principal amount of new investments funded was $646.8 million across 8 new portfolio companies and 4 existing portfolio companies. For this period, the Company had $48.2 million aggregate principal amount in exits and repayments.

For the three months ended June 30, 2020, the principal amount of new investments funded was $308.0 million across 3 new portfolio companies and 13 existing portfolio companies. For this period, the Company had $165.5 million aggregate principal amount in exits and repayments.

As of September 30, 2020 and June 30, 2020, the Company had investments in 110 and 102 portfolio companies with an aggregate fair value of $9.9 billion and $9.2 billion, respectively. As of September 30, 2020, the average investment size in each portfolio company was $90.2 million based on fair value.

As of September 30, 2020, based on fair value, our portfolio consisted of 79.2% first lien senior secured debt investments, 17.3% second lien senior secured debt investments, 0.5% unsecured investments, 1.0% investment funds and vehicles, and 2.0% equity investments.

As of June 30, 2020, based on fair value, our portfolio consisted of 80.2% first lien senior secured debt investments, 17.1% second lien senior secured debt investments, 0.1% unsecured notes, 1.1% investment funds and vehicles, and 1.5% equity investments.

As of September 30, 2020 and June 30, 2020, approximately 96.5% and 97.3% of the portfolio was invested in secured debt, respectively. As of September 30, 2020, 98.8% of our debt investments based on fair value in our portfolio were at floating rates.

As of September 30, 2020 and June 30, 2020, the weighted average total yield of accruing debt and income-producing securities at fair value (which includes interest income and amortization of fees and discounts) was 8.1% and 7.9%, respectively, and the weighted average total yield of accruing debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 8.0% and 7.7%, respectively.

As of September 30, 2020, 2 investments were on non-accrual status, representing 1.4% of the total fair value and 2.1% of the total amortized cost of the portfolio.

RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2020

Investment Income
Investment income decreased to $187.1 million for the three months ended September 30, 2020 from $188.2 million for the three months ended September 30, 2019. This decrease was primarily due to a decrease in our portfolio's weighted average yield at amortized cost, partially offset by an increase in our investment portfolio.

Expenses
Total expenses, after the effect of management and incentive fee waivers, increased to $60.8 million for the three months ended September 30, 2020 from $49.9 million for the three months ended September 30, 2019, which was primarily due to an increase in net management fees, professional fees and interest expense. Net management fees increased as a result of an increase in total assets period over period. The increase in interest expense was primarily driven by an increase in average daily borrowings, partially offset by a decrease in the average interest rate period over period.

Liquidity and Capital Resources
As of September 30, 2020, we had $0.2 billion in cash and restricted cash, $4.3 billion in total principal value of debt outstanding, and $1.4 billion of undrawn capacity on our credit facilities. The Company's weighted average interest rate on debt outstanding was 3.3% and 3.6% for the three months ended September 30, 2020 and June 30, 2020, respectively. Ending debt to equity was 0.72x and 0.60x during the three months ended September 30, 2020 and June 30, 2020, respectively.

COVID-19 Developments
Through the nine months ended September 30, 2020, the Company's operating results have been impacted by the current economic and financial market conditions related to the COVID-19 pandemic. We continue to assess the impact of COVID-19 on our portfolio companies. For additional information about the COVID-19 pandemic and its potential impact on our results of operations and financial condition, please refer to the "COVID-19 Developments" section and additional disclosure in our Form 10-Q for the quarter ended September 30, 2020.

Conference Call and Webcast Information

Conference Call Information:
The conference call will be broadcast live on November 5, 2020 at 10:00 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: 1683614

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: 1683614

 

FINANCIAL HIGHLIGHTS




For the three months ended




September 30,
2020



June 30, 2020



September 30,
2019


Investments at Fair Value


$

9,918,302



$

9,210,730



$

8,270,254


Total Assets


$

10,234,261



$

9,497,126



$

8,568,667


Net Asset Value Per Share


$

14.67



$

14.52



$

15.22















Investment Income


$

187,059



$

190,242



$

188,154


Net Investment Income


$

127,437



$

129,162



$

137,906


Net Income


$

216,047



$

303,619



$

118,652















Net Investment Income Per Share


$

0.33



$

0.34



$

0.36


Net Realized and Unrealized Gains (and Losses)

Per Share


$

0.23



$

0.45



$

(0.05)


Net Income Per Share


$

0.56



$

0.79



$

0.31


Distributions Declared from Net Investment Income Per Share


$

0.39



$

0.39



$

0.33















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



8.1

%



7.9

%



9.0

%

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



8.0

%



7.7

%



8.9

%

Percentage of Debt Investment Commitments at

Floating Rates



98.8

%



98.7

%



100.0

%

 

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES






September   30,
2020

(Unaudited)



December   31,
2019


Assets









Investments at fair value









Non-controlled, non-affiliated investments (amortized cost of $9,929,182 and $8,738,520, respectively)


$

9,711,690



$

8,709,700


Controlled, affiliated investments (amortized cost of $210,959 and $90,336, respectively)



206,612




89,525


Total investments at fair value (amortized cost of $10,140,141 and $8,828,856, respectively)



9,918,302




8,799,225


Cash (restricted cash of $6,824 and $7,587, respectively)



220,466




317,159


Interest receivable



49,634




57,632


Receivable for investments sold



653




9,250


Receivable from a controlled affiliate



2,267




2,475


Prepaid expenses and other assets



42,939




17,878


Total Assets


$

10,234,261



$

9,203,619


Liabilities









Debt (net of unamortized debt issuance costs of $67,017 and $44,302, respectively)


$

4,305,643



$

3,038,232


Distribution payable



151,409




137,245


Management fee payable



18,230




16,256


Payables to affiliates



4,321




5,775


Payable for investments purchased



26,537





Accrued expenses and other liabilities



33,773




28,828


Total Liabilities



4,539,913




3,226,336


Commitments and contingencies (Note 7)









Net Assets









Common shares $0.01 par value, 500,000,000 shares authorized; 388,227,871 and 392,129,619 shares issued and outstanding, respectively



3,882




3,921


Additional paid-in-capital



5,919,509




5,955,610


Total distributable earnings (losses)



(229,043)




17,752


Total Net Assets



5,694,348




5,977,283


Total Liabilities and Net Assets


$

10,234,261



$

9,203,619


Net Asset Value Per Share


$

14.67



$

15.24


 

CONSOLIDATED STATEMENTS OF OPERATIONS




For the Three Months
Ended September
  30,



For the Nine Months
Ended September
  30,




2020



2019



2020



2019


Investment Income

















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

















Interest income


$

179,597



$

180,944



$

561,236



$

498,747


Dividend Income



2,688







3,608





Other income



2,507




4,921




10,473




9,447


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



184,792




185,865




575,317




508,194


Investment income from controlled, affiliated investments:

















Dividend income



2,267




2,289




6,716




7,570


Total investment income from controlled, affiliated investments



2,267




2,289




6,716




7,570


Total Investment Income



187,059




188,154




582,033




515,764


Expenses

















Interest expense



37,391




29,434




110,533




101,021


Management fee



36,460




26,793




104,852




57,434


Performance based incentive fees



22,302




19,674




70,500




19,674


Professional fees



3,330




2,886




9,782




7,361


Directors' fees



179




169




633




445


Other general and administrative



1,659




2,697




5,564




6,248


Total Operating Expenses



101,321




81,653




301,864




192,183


Management and incentive fees waived (Note 3)



(40,531)




(31,707)




(122,925)




(31,707)


Net Operating Expenses



60,790




49,946




178,939




160,476


Net Investment Income (Loss) Before Taxes



126,269




138,208




403,094




355,288


Excise tax expense (benefit)



(1,168)




302




239




1,754


Net Investment Income (Loss) After Taxes


$

127,437



$

137,906



$

402,855



$

353,534


Net Realized and Change in Unrealized Gain (Loss)

















Net change in unrealized gain (loss):

















Non-controlled, non-affiliated investments


$

80,619



$

(20,846)



$

(196,001)



$

(376)


Controlled affiliated investments



4,615




284




(3,536)




3,346


Translation of assets and liabilities in foreign currencies



3,113




(146)




3,237




(168)


Total Net Change in Unrealized Gain (Loss)



88,347




(20,708)




(196,300)




2,802


Net realized gain (loss):

















Non-controlled, non-affiliated investments



2,537




1,285




2,885




1,102


Foreign currency transactions



(2,274)




169




(2,364)




372


Total Net Realized Gain (Loss)



263




1,454




521




1,474


Total Net Realized and Change in Unrealized Gain (Loss)



88,610




(19,254)




(195,779)




4,276


Net Increase (Decrease) in Net Assets Resulting from Operations


$

216,047



$

118,652



$

207,076



$

357,810


Earnings Per Share - Basic and Diluted


$

0.56



$

0.31



$

0.53



$

1.18


Weighted Average Shares Outstanding - Basic and Diluted



386,534,213




384,846,445




388,474,850




302,373,486


 

PORTFOLIO AND INVESTMENT ACTIVITY




For the Three Months Ended September   30,


($ in thousands)


2020



2019


New investment commitments









Gross originations


$

957,015




1,631,537


Less: Sell downs



(113,404)




(88,809)


Total new investment commitments


$

843,611



$

1,542,728


Principal amount of investments funded:









First-lien senior secured debt investments


$

483,756



$

845,282


Second-lien senior secured debt investments



121,592




443,270


Unsecured debt investments



41,463





Equity investments







Investment funds and vehicles






1,500


Total principal amount of investments funded


$

646,811



$

1,290,052


Principal amount of investments sold or repaid:









First-lien senior secured debt investments


$

(44,711)



$

(140,281)


Second-lien senior secured debt investments



(3,517)




(52,000)


Unsecured debt investments






(23,000)


Equity investments







Investment funds and vehicles







Total principal amount of investments sold or repaid


$

(48,228)



$

(215,281)


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


8



10


Average new investment commitment amount


$

90,138



$

129,504


Weighted average term for new investment commitments (in years)



6.1




6.7


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)



8.2

%



8.7

%

Weighted average spread over LIBOR of new floating rate investment commitments



7.2

%



6.6

%

________________

(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 0.23% and 2.09% as of September 30, 2020 and 2019, respectively.

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, 2020, ORCC had investments in 110 portfolio companies with an aggregate fair value of $9.9 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 $23.7 billion of assets under management as of September 30, 2020.

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.

INVESTOR CONTACTS

Investor Contact:
Dana Sclafani
212-651-4705
orccir@owlrock.com

Media Contact:
Prosek Partners
David Wells / Kelly Smith Aceituno / Josh Clarkson
pro-owlrock@prosek.com

 

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SOURCE Owl Rock Capital Corporation

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