Blue Owl Technology Income Corp. Trims $500M in Credit Capacity Amid Elevated Redemptions

Blue Owl Technology Income Corp. voluntarily reduced its aggregate committed debt capacity by $500 million, to $3.5 billion. The company, a nontraded business development company known as OTIC, said the move was intended to reduce borrowing costs and align with its target leverage.

The reduction cut commitments across three special purpose vehicle asset facilities: $275 million off the first facility, bringing its maximum to $475 million; $150 million off the second, to $350 million; and $75 million off the fourth, to $675 million. Following the changes, OTIC’s committed debt capacity consists of a $1.1 billion revolving credit facility, $2.1 billion in SPV asset facilities, a $270 million collateralized loan obligation, and $175 million of unsecured notes.

The company said the reductions did not affect its available liquidity, which stood at $1.3 billion as of May 31: a combination of cash, liquid Level 2 assets, and undrawn borrowing capacity. As of the same date, OTIC reported a net asset value of $2.9 billion, total debt outstanding of $2.3 billion, and a net leverage ratio of 0.78x.

The reduction comes as OTIC continues to absorb heavy investor redemption requests. AltsWire reported last week that the fund’s second-quarter repurchase requests totaled $1.1 billion, or 38.1% of shares outstanding, only modestly below the 40.4% redemption rate it posted in the first quarter. That followed a fourth-quarter tender in which OTIC redeemed $527.2 million of shares, satisfying 100% of requests after expanding the offer to roughly 19% of outstanding shares – a 484% increase over its original target. The redemption pressure at OTIC and its larger sibling fund, Blue Owl Credit Income Corp., has been part of a broader wave of withdrawal activity across Blue Owl’s nontraded BDC platform since early this year.

A lower committed-capacity figure carries less in ongoing unused-commitment fees, which supports the company’s stated cost rationale. It also requires less capacity to support a fund whose asset base has been shrinking under sustained redemption pressure – a dynamic the company has not addressed directly.

Whether the reduction reflects proactive balance-sheet management, an adjustment to a smaller post-redemption asset base, or both is not disclosed.

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