Blue Owl BDC Subsidiary Expands, Restructures $1.35B Credit Facility

Core Income Funding VI LLC, a subsidiary of Blue Owl Credit Income Corp. – a publicly registered, non-traded business development company sponsored by Blue Owl Capital Inc. – has finalized a significant restructuring of its primary credit facility which both increases its borrowing capacity and secures more favorable, long-term financing terms.

The amendment enhances the facility’s flexibility and duration while reducing overall borrowing costs. The total revolving commitment under the facility was more than doubled, from $600 million to $1.35 billion. The non-revolving, fixed-amount portion of the loan was reduced from $150 million to $0, converting the facility into a fully revolving credit line to maximize its utility for ongoing portfolio management and funding.

The BDC also extended the loan’s duration from Aug. 29, 2033, to April 10, 2035.  The reinvestment period, during which all loan proceeds can be reinvested into new collateral, was extended from Aug. 29, 2026, to April 10, 2028. This provides the company with an additional 20 months to actively manage and grow its portfolio of collateral loans.

Finally, the applicable margin was reduced, narrowing from a range of 1.5% to 2.15% to a range of 1.5% to 1.9%. The amendment also included modifications to the commitment fee schedule and updated requirements related to the sales of collateral loans.

The facility remains in place with The Bank of Nova Scotia as administrative agent and State Street Bank and Trust Company serving in multiple key roles.

In other BDC news, the company recently completed a $1 billion collateralized loan obligation, or CLO, transaction. Structured through another one of its subsidiaries, Owl Rock CLO XXII, LLC, it is backed by a substantial portfolio of middle market loans and related assets, initially sourced from the company and its affiliate, totaling nearly $954.34 million.

The transaction involved the issuance of various debt and equity securities to raise the capital:

• Secured debt: The CLO issued a total of $737.5 million in secured notes and secured loans across multiple classes. All tranches are floating-rate, tied to the three-month term secured overnight financing rate, and are scheduled to mature in October 2037.
• Equity investment: Concurrently, Owl Rock sold approximately $262.7 million in subordinated preferred shares. The company purchased all of these shares, fulfilling regulatory requirements as a retention holder to maintain exposure to the performance of the securitized assets.
• Active management: The BDC’s adviser, Blue Owl Credit Advisors LLC, will serve as the collateral manager, actively investing the proceeds from the loans to purchase additional middle market assets through October 2029.

Blue Owl Credit Income Corp. stated that it expects to use the net proceeds from the CLO transaction for general corporate purposes.

Over the summer, investment banking firm Robert A. Stanger & Company Inc. recognized the BDC’s strong performance among solidly performing, non-traded BDCs. In its analysis, Blue Owl Credit Income Corp. captured the three-year total return lead at 12.7%, while Blue Owl Capital Corp. II led the five-year rankings, more than doubling its next closest competitor.

Blue Owl Credit Income Corp. is a perpetually non-traded BDC that seeks to generate current income through a diverse, high-quality portfolio of predominantly senior secured, directly originated floating rate loans to U.S. middle and upper middle-market companies.

Click here to visit the AltsWire directory page.