Blue Owl Capital Corp III, a Maryland-incorporated company, has expanded its financial flexibility by amending a significant credit agreement, according to a recent SEC filing. On October 10, 2024, the company's subsidiary, ORCC III Financing II LLC, and Blue Owl Capital Corp III entered into an amendment that 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. Additionally, the amendment introduced the option for the company to draw in Canadian dollars, Euros, and British pounds, reflecting a broader scope for financial operations. Changes to the fee schedule and certain facility fees and expenses were also made as part of the revised agreement.
This financial move is considered significant for Blue Owl Capital Corp III as the borrowings of ORCC III Financing II are treated as the company's own for the purpose of meeting asset coverage requirements under the 1940 Act. The amendment not only increases the available capital but also provides a longer horizon for the company to utilize the funds.
State Street (NYSE:STT) Bank and Trust Company has been appointed as the new collateral custodian, replacing Alter Domus (US) LLC. Deutsche Bank AG (NYSE:DB), New York Branch, will continue to serve as the facility agent.
The increased credit facility and the extended terms suggest that Blue Owl Capital Corp III is positioning itself for sustained growth and operational expansion. The financial restructuring detailed in the SEC filing underscores the company's strategic financial planning and its commitment to maintaining a robust financial foundation.
InvestingPro Insights
Blue Owl Capital Corp III's recent credit facility expansion aligns with its attractive dividend policy, as highlighted by InvestingPro data. The company currently offers a substantial dividend yield of 11.31%, with the last ex-dividend date on September 30, 2024. This high yield is particularly noteworthy given the company's relatively low P/E ratio of 6.17, suggesting potential value for income-focused investors.
An InvestingPro Tip indicates that the company "pays a significant dividend to shareholders," which is consistent with the expanded credit facility that could support ongoing dividend payments. However, another tip cautions that the company "suffers from weak gross profit margins," which investors should consider alongside the increased financial flexibility provided by the amended credit agreement.
For a more comprehensive analysis, InvestingPro offers additional tips and data points that could provide deeper insights into Blue Owl Capital Corp III's financial health and prospects. Investors interested in a fuller picture can explore these resources on the InvestingPro platform.
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