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Owl Rock Capital: Completes And Prices IPO

BDCs:
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NEWS

On July 18,2019  Owl Rock Capital (ORCC) completed its initial public offering.

The new public BDC issued 10mn shares at $15.30 a share.

An additional 1.5mn shares were allocated to the underwriters for over-allotments.

See the news story attached from Yahoo Finance.


ANALYSIS

Been There

The BDC Reporter has already undertaken a thorough initial outline of the new public BDC in an article on June 7, 2019.

There has been no material disclosure since that time except a preliminary estimate for the earnings and distribution for the IIQ 2019:

As of the date of this prospectus, we estimate that our net asset value per share as of June 30, 2019 was between $15.27 per share and $15.30 per share.

We estimate our dividend was between $0.43 per share and $0.45 per share, calculated using 270,188,960 outstanding shares as of the record date of June 14, 2019. Subsequent to the record date, we issued 103,504,284 common shares in connection with our final capital drawdown of $1.58 billion which proceeds funded on June 17, 2019.

We estimate our net investment income per share for the three months ended June 30, 2019 was between $0.41 per share and $0.43 per share, calculated using 284,750,732 weighted average shares for the three months ended June 30, 2019.

NAV Per Share at March 31, 2019 was $15.26.

Closing Price

The stock price at the close was $15.49, a slight premium over the IPO price and to book.

Principals

Barron’s reports the following about the new public entity’s 3 principals:

Owl Rock’s three founders were high profile before creating the company more than three years ago. Craig Packer previously ran Goldman Sachs ’ leveraged loan desk; Doug Ostrover was the “O” founding partner in Blackstone Group ’s credit hedge fund GSO Capital Partners; and Marc Lipschultz was the head of energy investments at KKR .

Video

The principals of the firm were interviewed at relative length on Bloomberg TV on the floor of the stock exchange.

Website

For readers, interested in learning even more about Owl Rock, here is a link to the BDC’s website.

At this time, information available is relatively limited, especially by comparison with its other public BDC peers.

There is no Press Release section, no Investor Presentations and the SEC Filings page is just a link to sec.gov.

Homework Assignment

The best place to start – after the BDC Reporter’s earlier article – is the Prospectus, which is attached.


VIEWS

Welcome Mat

Welcome !

The BDC Reporter is excited about having a new public BDC to review for our readers.

With the addition of ORCC, the universe of BDC stocks tracked daily by us increases by one to 46, but public BDC assets under management – by the BDC Reporter’s count – increases from $64.6bn to $71.4bn.

That’s a not insignificant 10.5% increase, reflecting the very large size of the new BDC.

Moreover, the 81 companies in the portfolio increases the number of companies to which public BDCs have exposure – also by the BDC Reporter’s count – from 3,562 to 3,643, a 2.2% increase.

Promises, Promises

We will undertake a full review of the BDC’s history, strategy and outlook – as well as review the latest results – when ORCC releases its IIQ 2019 earnings.

Also, ORCC will be added to our Dividend Outlook rating system.

Based on our pre-IPO review, the initial outlook is for the regular distribution to remain UNCHANGED over the next 12 months.

The new public BDC has no traded unsecured debt, so there will be no change to the Fixed Income Table.

We’ll wait till we review the IIQ 2019 portfolio to determine the Credit Outlook.

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