Blue Owl Capital has raised $400m through a bond issuance from its publicly traded business development company (BDC), OBDC, in a transaction that marks the first of its kind in over a month amid ongoing volatility in the private credit sector, according to a report by Bloomberg.
The investment-grade notes, which mature in 2028, were priced to yield 6.5%, according to a regulatory filing. The deal was arranged by Morgan Stanley, with proceeds earmarked for refinancing existing debt.
OBDC provides direct loans to small and mid-sized companies and is one of Blue Owl’s key listed credit vehicles. The transaction comes as the private credit industry continues to face pressure from investor concerns over credit quality, particularly exposure to sectors seen as vulnerable to disruption from artificial intelligence.
Those concerns have contributed to heightened redemption activity across non-traded funds and persistent discounts in publicly listed vehicles. OBDC has been among the more affected names, with its shares down sharply this year and trading at a meaningful discount to net asset value.
Despite that backdrop, the latest bond deal may point to tentative stabilisation in sentiment. The notes were priced at a spread of around 2.7 percentage points over comparable US Treasuries, wider than earlier in the year, reflecting elevated risk premiums across the sector.
By comparison, spreads on US BDC debt have widened in recent months, and now sit above levels seen at the start of the year, according to market data. The move also reflects a broader divergence between private credit yields and investment-grade public debt markets.
OBDC, which has more than $9bn in outstanding debt and a market capitalisation of $5.4bn, last tapped the bond market in May with a $500m issuance at a 6.2% coupon.
The transaction follows a similar deal by a Blackstone-managed vehicle earlier this year, and market participants expect further issuance from private credit platforms in the near term as firms continue to diversify funding sources.
