Blue Owl Capital Corp III, a Maryland-incorporated company, has entered into a revised credit agreement enhancing its financial flexibility. On Thursday, the company amended its existing senior secured revolving credit facility, increasing the total amount from $600 million to $700 million. The agreement with lenders, including JPMorgan Chase (NYSE:JPM) Bank, N.A. as the administrative agent, extends the revolver availability period to November 2028 and the maturity date to November 2029.
The amended and restated facility, known as the A&R Facility, also offers reduced fees and interest margins, reflecting improved borrowing terms for the company. The unused fee has been lowered from 0.375% to 0.350% on all unused commitments.
Interest rates for various loan types have been adjusted downwards, with the applicable margin now set at 0.875% per annum for an ABR Loan and 1.875% per annum for both Term Benchmark Loans and RFR Loans, should the Gross Borrowing Base be less than 1.6 times the Combined Debt Amount. If the Gross Borrowing Base equals or exceeds this ratio, the margins further reduce to 0.750% and 1.750% per annum, respectively.
The A&R Facility is secured by a first-priority interest in nearly all of the company's portfolio investments and certain domestic subsidiaries. It also includes an uncommitted accordion feature allowing the facility to potentially increase to $1.1 billion, subject to additional lender agreements.
Proceeds from the facility are earmarked for general corporate purposes, including funding portfolio investments. The company is subject to customary covenants and will be required to make mandatory prepayments from proceeds of asset sales, equity and debt issuances, and other recovery events.
In other recent news, Blue Owl Capital Corp III has boosted its financial flexibility by amending a significant credit agreement. According to a recent SEC filing, the Maryland-based company's subsidiary, ORCC III Financing II LLC, and Blue Owl Capital Corp III have entered into an amendment that has increased the secured credit facility from $350 million to $500 million. The amendment also extended the revolving period until December 2, 2027, and set the facility termination date for December 2, 2029.
Furthermore, the revised agreement introduced the option for the company to draw in Canadian dollars, Euros, and British pounds, broadening the scope of its financial operations. State Street (NYSE:STT) Bank and Trust Company has been appointed as the new collateral custodian, replacing Alter Domus (US) LLC, while Deutsche Bank AG (NYSE:DB), New York Branch, continues as the facility agent.
InvestingPro Insights
Blue Owl Capital Corp III's recent credit facility amendment aligns well with its financial profile, as revealed by InvestingPro data. The company's substantial dividend yield of 11.04% underscores its commitment to shareholder returns, which is further supported by an InvestingPro Tip indicating that it "pays a significant dividend to shareholders." This high yield may be particularly attractive to income-focused investors in the current market environment.
The company's P/E ratio of 6.17 suggests a potentially undervalued stock, which could be of interest to value investors. Additionally, the stock's low price volatility, as noted in another InvestingPro Tip, may appeal to risk-averse investors seeking stability alongside the high dividend yield.
It's worth noting that InvestingPro offers 11 additional tips for Blue Owl Capital Corp III, providing a more comprehensive analysis for investors considering this stock. These insights, along with real-time metrics, can be valuable for making informed investment decisions in the context of the company's recent financial maneuvers.
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