Blue Owl’s OCIC Adds $300M to Facility, Lowers Rate as Redemptions Stay Elevated

Blue Owl Credit Income Corp., known as OCIC, expanded its main revolving credit facility to $4.2 billion from $3.9 billion, cut the facility’s interest rate, and pushed its maturity out nearly two years to September 2031, the nontraded business development company said Sept. 22.

The Fourth Amendment to OCIC’s senior secured revolver, with Sumitomo Mitsui Banking Corp. as administrative agent, closed Sept. 16. It lowers the facility’s pricing to secured overnight financing rate plus 1.775% from SOFR plus 1.875%, with a further step-down to SOFR plus 1.65% when the fund’s gross borrowing base is at least 1.6x its combined debt. The accordion feature now allows total commitments to grow to as much as $6.3 billion.

The revolver’s availability period was extended to September 2030 from October 2028, and its scheduled maturity to September 2031 from October 2029.

Every existing bank in the lending group renewed its commitment, and several lenders increased theirs, accounting for the $300 million in added capacity, the company said.

The amendment also raises the facility’s minimum shareholders’ equity covenant. OCIC must now maintain minimum shareholders’ equity of about $12.03 billion at each quarter-end, up from $8.97 billion under the prior agreement, adjusted upward by 25% of net proceeds from new share sales after the amendment and downward by 25% of amounts spent repurchasing shares.

The revolver amendment follows a $1 billion notes offering OCIC completed earlier in September, consisting of $700 million of 6.25% notes due 2029 and a $300 million add-on to its 6.55% notes due 2031, which brought that series to $800 million outstanding. AltsWire reported on that offering Sept. 15. OCIC said it would use the proceeds to pay down the revolver, which had about $591.5 million outstanding as of June 30, and to retire its 3.125% notes due Sept. 23, 2026.

Together, the transactions represent about $1.3 billion of debt capital raised since June 30, according to OCIC.

“We are pleased to have completed a series of financing transactions that further strengthen our capital structure,” said chief executive officer Craig W. Packer. “The strong demand for our recent notes offering and support from our bank group, including upsized commitments from several lenders, reflect continued confidence in OCIC’s portfolio and platform. Together, these transactions further enhance our liquidity and financial flexibility, positioning OCIC to capitalize on an increasingly attractive lending environment.”

The refinancing comes as OCIC works through elevated redemption demand. Second-quarter repurchase requests totaled 18.8% of shares, well above the fund’s 5% quarterly limit. In late August, the fund opened a tender offer for up to about 101.6 million shares, or 5% of shares outstanding as of June 30. At that time, OCIC also disclosed an amendment to a separate $500 million special-purpose-vehicle facility that tightened collateral concentration limits, including a cut in its covenant-lite loan limit to 30% from 40%.

As of June 30, OCIC held investments in 345 portfolio companies with an aggregate fair value of $35.7 billion. The fund is externally managed by Blue Owl Credit Advisors LLC, an affiliate of Blue Owl Capital Inc.

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