Blue Owl Capital Corporation reported a decline in new investment activity in the second quarter, driven by depressed new deal activity and a sharp drop in refinancing transactions. President Logan Nicholson said on an earnings call that as much as 50% to 75% of activity in any given quarter had come from refinancing or extension activity, which has ground to a halt in the current spread-widening environment. The portfolio contracted with $219 million of gross fundings against $747 million of sales and repayments, and fair value fell to roughly $15.0 billion from $16.9 billion a year earlier. The company highlighted its exit from a large preferred equity investment in Mavis Tire, collecting roughly $274 million in cash including $66 million of accrued PIK interest, marking its largest PIK investment realization to date. Net unrealized losses reached $99.4 million, led by a significant markdown on loans to Loparex Group, where second-lien loans were marked at 5 cents on the dollar and first-lien debt at 34 cents, after a planned M&A transaction fell apart. OBDC also removed non-accruing loans to Walker Edison Furniture Company, realizing a $62.4 million loss.
Blue Owl Capital CorporationQ2 activity slumps, portfolio contracted, net unrealized losses and a realized loss on Walker Edison.
