Saba Capital, Cox Capital Plan Tender Offers for Blue Owl BDCs
Saba Capital Management and Cox Capital Partners plan to launch tender offers for shares of several Blue Owl Capital business development companies, providing a potential exit for investors facing limited liquidity.
The firms submitted an initial notice to Blue Owl Capital Corporation II, or OBDC II, and followed with similar notices to Blue Owl Technology Income Corp. and Blue Owl Credit Income Corp., OTIC and OCIC, respectively.
Although non-traded BDCs traditionally offer limited liquidity to their retail investor base, AltsWire reported last week that OBDC II and OTIC, as well as publicly traded Blue Owl Capital Corporation (NYSE: OBDC), agreed to sell $1.4 billion in direct-lending investments across three vehicles, a transaction that will allow one fund to return approximately 30% of its net asset value to shareholders while permanently replacing its quarterly redemption program with structured capital distributions.
Thus, the proposed tender offers arrive as the BDC industry grapples with an industrywide increase in redemption requests, multiple consecutive quarters of net outflows and expanded use of redemption gates that limit investor withdrawals.
Once the mandatory 10-business day notice period for each BDC concludes, Saba Capital and Cox Capital intend to formally announce the commencement of the offers.
While full details will be included in the upcoming tender offer documents, preliminary information indicates that the offer price is expected to be set at a 20% to 35% discount to the most recent estimated net asset value or dividend reinvestment price for each BDC. The purchasers intend to acquire shares exclusively in cash.
Saba Capital, founded by Boaz Weinstein, specializes in credit relative value and arbitrage strategies. Cox Capital focuses on secondary liquidity solutions for non-traded and private investments, including real estate investment trusts and interval funds.
By launching these offers, the firms aim to provide a “liquidity solution” for investors who may otherwise be subject to redemption gates or lack an active secondary market for their shares.
The BDCs’ aforementioned loans are being sold to four North American public pension and insurance investors. The assets were sold at 99.7% of par value, consistent with where the funds mark the investments on their books. The pricing suggests the transaction aligned closely with the funds’ internal valuation marks.
OBDC II is selling approximately $600 million of loans, or about 34% of its portfolio. The fund’s board intends to use the proceeds to fund a return-of-capital distribution of up to $2.35 per share, representing roughly 30% of NAV as of Dec. 31, 2025. The distribution is expected by March 31, 2026, pending board approval.
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