Blue Owl Capital has returned to the investment-grade bond market with a $400m issuance from its private credit vehicle OBDC, in a move that underscores improving financing conditions for business development companies, according to a report by Bloomberg.
The five-year notes were priced on Monday at a spread of 2.3 percentage points over US Treasuries, tighter than earlier guidance by around 30 basis points, according to market sources. Proceeds will be used to refinance existing liabilities, including revolving credit borrowings and a 3.4% note due in July.
OBDC, a publicly listed business development company that focuses on direct lending to small and mid-sized corporates, has now completed two bond transactions within a month. Its previous $400m deal was fully taken up by Pacific Investment Management Company, signalling renewed investor appetite for private credit-linked credit instruments.
That earlier transaction helped restart issuance activity among business development companies after a period of subdued market access, amid broader concerns over valuation levels, liquidity and transparency in private credit markets.
Since then, several private credit vehicles have tapped the US investment-grade market, raising close to $4bn collectively, including recent issuance from Blackstone’s lending platform.
Market participants say OBDC’s latest deal reflects stabilising conditions for the sector, with spreads tightening and demand broadening across multiple issuers. The transaction was led by a syndicate including major investment banks such as Deutsche Bank, Goldman Sachs and Morgan Stanley.
