Blue Owl Capital has agreed to sell $1.4bn of loans from three of its private credit vehicles to North American pension and insurance investors, as the firm looks to return capital to shareholders and reduce leverage, according to a report by Reuters.
The assets are reportedly being sold at 99.7% of par value, in line with where the loans are marked on Blue Owl’s books. The portfolio comprises debt across 128 companies operating in 27 industries, with software and services representing the largest single sector exposure at 13%.
The sale includes $600m of assets from Blue Owl Capital Corp II, $400m from Blue Owl Technology Income Corp and $400m from Blue Owl Capital Corp. Proceeds will be used to return capital to investors in Blue Owl Capital Corp II and to pay down debt across the vehicles.
Craig Packer, co-president of Blue Owl, said the pricing reflected strong investor confidence in the quality of the portfolio at a time when direct lending and software-related assets have come under increased scrutiny. The buyers were described as leading North American public pension and insurance groups, each taking equal stakes in the transaction.
Blue Owl said the transaction will allow Blue Owl Capital Corp II to return up to 30% of its net asset value to investors, equivalent to around $2.35 per share, and to move to a quarterly payout structure going forward. The firm withdrew a previously proposed merger involving the fund last year following investor opposition.
