Owl Rock Prices $450M Unsecured Notes Offering

Specialty finance company Owl Rock Capital (ORCC) has priced a public offering of $450 million unsecured notes, due in June 2028 at a rate of 2.875%. Owl Rock will have the option to redeem the notes in whole or in part at any time at par value plus a “make-whole” premium, if it applies.

Owl Rock Capital plans to use the funds raised to pare down its existing debt inclusive of the revolving credit utilized. This includes $1.295 billion of commitments maturing in September 2025, other commitments maturing in April 2024, and SPV asset facility IV maturing in August 2029.

Subject to closing conditions, Owl Rock expects the notes offering to close on June 11. (See Owl Rock Capital stock analysis on TipRanks)

At the end of March 2021, Owl Rock’s investments in 120 portfolio companies had an aggregate value of $11.2 billion.

On May 6, Raymond James analyst Robert Dodd reiterated a Buy rating on the stock along with $15 price target.

Dodd projects increasing income from early repayments for Owl Rock and commented, “We expect repayment activity to increase in Q2 2021 (and likely remain elevated this year as the M&A market remains hot), though we are projecting a lower fee rate on those repayments.”

Consensus among analysts is that Owl Rock is a Strong Buy based on 4 Buys and 1 Hold. The average analyst price target of $14.90 implies Owl Rock is fairly priced at current levels.

Shares have gained about 18.5% so far this year.

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