Oaktree BDC Expands Repurchase Cap, Pays $310M as Q1 Redemptions Top 5% Limit

Oaktree Strategic Credit Fund paid approximately $310 million to investors who sought to exit the nontraded business development company in the first quarter of 2026. Shareholder demand exceeded the fund’s original repurchase cap, requiring Oaktree to both expand the offer and enlist an affiliate purchase to honor all requests in full.

The quarterly tender offer, which Oaktree launched Feb. 17, 2026, with a cap of 5% of outstanding shares, drew redemption requests for approximately 13.9 million shares — equal to 6.8% of the fund’s outstanding share count as of Dec. 31, 2025. To fulfill those requests, Oaktree exercised a regulatory provision that allowed it to expand the offer to 7%, purchasing up to 14.2 million shares. Separately, Brookfield OSCF Investor LLC, an affiliate of the fund’s investment adviser, agreed to purchase a portion of one investor’s shares at net asset value, with payment via a promissory note due by June 15. The fund said the affiliate purchase was intended to enable it to meet 100% of tender requests and described it as evidence of alignment between the fund and its investment adviser.

The repurchase price was $22.38 per share — the fund’s NAV as of March 31 — and payment was made through non-interest-bearing promissory notes settled on April 23, with a 2% early repurchase deduction applied to a subset of Class S and I shares.

The Q1 2026 redemption demand marked a sharp escalation from the prior quarter, when Oaktree received tender requests for approximately 8.3 million shares — 4.2% of outstanding — well within its standard 5% cap.

Now, Oaktree has opened its Q2 2026 tender offer, offering to repurchase up to 9.8 million shares — again 5% of outstanding — at a price equal to the fund’s NAV as of June 30. That cap implies a maximum repurchase of roughly $220 million at current NAV, compared with the $310 million paid out in the first quarter. The fund had 196.7 million shares outstanding as of March 31, down from 203.4 million at the start of the year, reflecting the net effect of redemptions and capital raised.

The redemption pressure at Oaktree reflects a broader deterioration in nontraded BDC fundraising and liquidity. Nontraded BDC outflows exceeded inflows in the first quarter for the first time on record, with sector redemption requests reaching $13.25 billion against $4.9 billion in capital raised, according to data published by AltsWire today. NAV BDCs paid out a record $6.9 billion in Q1 liquidity.

Oaktree’s fund has been at the center of that pressure for several quarters. The fund cut its distribution in early 2026 and its NAV slipped 1.15% in March — the first full month after the cut — to $22.38, the same figure that became the Q1 tender price. Apollo Debt Solutions BDC, which paid $723 million in Q1 tender redemptions as demand doubled its 5% cap, also filed a new second-quarter tender offer today, signaling that redemption pressure at large nontraded BDCs has not abated entering the second quarter.

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