Blue Owl Technology Finance Corp 8-K, filed Mar 10, 2022
Blue Owl Technology Finance Corp. (OTF)
About this 8-K
Blue Owl Technology Finance Corp filed this 8-K on March 10, 2022.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 10, 2022
OWL ROCK TECHNOLOGY FINANCE CORP.
(Exact name of Registrant as Specified in Its Charter)
| Maryland | 000-55977 | 83-1273258 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 399 Park Avenue, 38th Floor New York, NY |
10022 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (212) 419-3000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| None | None | None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
Owl Rock Technology Finance Corp. (the “Company”) is announcing certain information contained in the presentation attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information in Item 7.01 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
| Exhibit |
Description | |
| 99.1 | Investor Presentation | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Owl Rock Technology Finance Corp. | ||||||
| March 10, 2022 | By: | /s/ Jonathan Lamm | ||||
| Name: | Jonathan Lamm | |||||
| Title: | Chief Financial Officer and Chief Operating Officer | |||||
Owl Rock Technology Finance Corp. March 2022 4Q’21 Update Exhibit 99.1
ORTF – Portfolio Summary As of 12/31/21. Past performance is not a guarantee of future results. ORTF is currently closed to new equity investors. Weightings are based on fair value of investments unless otherwise noted. Borrower financials are derived from the most recently available portfolio company financial statements, have not been independently verified by Owl Rock, and may reflect a normalized or adjusted amount. Accordingly, Owl Rock makes no representation or warranty in respect of this information. 1. Traditional financings are typically senior secured loans primarily in the form of first lien loans (including "unitranche" loans, which are loans that combine both senior and subordinated debt, generally in a first lien position) and second lien loans. 2. Growth capital investments are typically unsecured obligations of the borrower, and might be structured as unsecured indebtedness, convertible bonds, convertible equity, preferred equity, and common equity. 3. Includes unitranche investments. 4. “Net LTV” represents the net ratio of “loan to value” for each portfolio company, weighted based on the fair value of ORTF’s loan investment. The “attachment point” is the principal amount of debt that is senior to ORTF’s loan investment, and that amount plus the principal amount of the loan in which ORTF invested and other equally ranked debt is the “last dollar” amount. “Value” represents an estimate of enterprise value of each portfolio company, a calculation that will vary by portfolio company. 5. Growth capital LTV is presented on a gross (not net) basis, as these investments have effective net debt of zero given current cash balances. Portfolio Highlights Breakdown by Asset Type Traditional Financings1 Growth Capital Investments2 Commenced Operations: August, 2018 Equity Raised: $3.1 billion Portfolio Size: $6.1 billion Diversification: 92 portfolio companies across 24 industries with a target of 1-2% position sizes Internal Portfolio Ratings: 99% of the portfolio is 1- or 2-rated on our internal ratings scale, which means these investments are performing at or above our expectations (1 investment 3-rated) Weighted Average Yield of Debt and Income Producing Securities (FV): 8.0% 71% Debt Portfolio $123M EBITDA $549M Revenue 29% Net loan-to-Value4 26% Debt Portfolio $5.6B Enterprise Value $246M Revenue 7% Loan-to Value5 3 75% Senior Secured Investments
ORTF – Review of 4Q 2021 As of 12/31/21 unless otherwise noted. Past performance is not a guarantee of future results. ORTF is currently closed to new equity investors. 1. Annualized Dividend Yield is calculated using average capital called since inception. 2. The amount available does not reflect limitations related to each credit facility’s borrowing base. 3. Net of cash. Earnings Summary Net asset value per share of $17.65, down from $17.91 as of 9/30/21 Net investment income per share of $0.31, up from $0.12 as of 9/30/21 Net income per share of ($0.17), down from $1.69 as of 9/30/21 4Q’21 dividend per share of $0.16 4Q’21 dividend yield of 4.3%1 Portfolio Update Total portfolio at FV of $6.1 billion across 92 portfolio companies, up from $5.4 billion across 80 portfolio companies at 9/30/21 Continued strong portfolio company performance No material change to the mix of the overall portfolio risk ratings from 9/30/21 to 12/31/21, with no companies rated a ‘4’ or ‘5’ as of 12/31/21 No investments on non-accrual ORTF has not experienced any loss of original principal since inception Continued strong origination activity New investment commitments of $1.1 billion and net fundings of $853 million Liquidity Update Approximately $1.02 billion net liquidity position in cash and undrawn debt Debt to equity was up quarter over quarter at 0.73x3 57% of funded debt capital is in unsecured debt, providing significant unencumbered assets which allows for meaningful over-collateralization of secured facilities
Overview of BDC Funding Profiles As of 12/31/21 unless otherwise noted. Past performance is not a guarantee of future results. ORCC II and ORTF are currently closed to new equity investors. 1. Net of unamortized debt issuance costs. 2. Net of cash. 3. Callable on or after 3/15/24. 4. Callable on or after 10/25/24.5. Pro forma for $500 million of 4.70% Notes due 2027 priced on 2/1/22. Owl Rock Capital Corp. Owl Rock Capital Corp. II Owl Rock Core Income Corp. Owl Rock Capital Corp. III Owl Rock Technology Finance Corp. Bond Identifier ORCC OWLRII ORCINC ORCIII ORTFIN Investments at FV $12.7bn $2.4bn $3.1bn $2.9bn $6.1bn Total Equity $5.9bn $1.4bn $1.6bn $1.7bn $3.5bn Total Debt1 $7.1bn $1.1bn $2.0bn5 $1.2bn $2.6bn Net Debt-to-Equity2 1.1x 0.8x 1.0x5 0.7x 0.7x Total Bonds Outstanding $4.2bn $450mm $850mm5 $325mm $1.5bn Unsecured Debt as % of Funded Debt 58% 40% 41%5 26% 57% Unsecured Debt Maturities – Next 3 Yr. Apr. ’24-$400mm3 Nov. ‘24-$450mm4 - - -
Strong Credit Performance As of 12/31/21. Source: BDC Collateral, Company filings. ORCC II and ORTF are currently closed to new equity investors. 1. Excludes revolvers, delayed draw term loans, and letters of credit when disclosed in schedules of investments, and positions marked at 0 or NA. 2. Based on fair value. Includes investments rated 3-5 according to Owl Rock internal rating system. 3. Net of cash. 4. Pro forma for $500 million of 4.70% Notes due 2027 priced on 2/1/22. 4
Past performance is not a guide to future results and is not indicative of expected realized returns. Assets Under Management (“AUM”) refers to the assets that the Owl Rock manages and are generally equal to the sum of (i) net asset value (“NAV”); (ii) drawn and undrawn debt; and (iii) uncalled capital commitments. This presentation contains proprietary information regarding Blue Owl Capital Inc. (“Blue Owl”), its affiliates and investment program, funds sponsored by Blue Owl, including the Owl Rock Funds, the Dyal Funds and the Oak Street Funds (collectively the “Blue Owl Funds”) as well as investment held by the Blue Owl Funds. This presentation and the information contained in this presentation may not be reproduced or distributed to persons other than the recipient or its advisors. The views expressed and, except as otherwise indicated, the information provided are as of the report date and are subject to change, update, revision, verification, and amendment, materially or otherwise, without notice, as market or other conditions change. Since these conditions can change frequently, there can be no assurance that the trends described herein will continue or that any forecasts are accurate. In addition, certain of the statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on the current views and assumptions of Blue Owl and involve known and unknown risks and uncertainties (including those discussed below) that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. These statements may be forward-looking by reason of context or identified by words such as “may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue” and other similar expressions. Neither Blue Owl, its affiliates, nor any of Blue Owl’s or its affiliates' respective advisers, members, directors, officers, partners, agents, representatives or employees or any other person (collectively the “Blue Owl Entities”) is under any obligation to update or keep current the information contained in this document. This presentation contains information from third party sources which Blue Owl has not verified. No representation or warranty, express or implied, is given by or on behalf of the Blue Owl Entities as to the accuracy, fairness, correctness or completeness of the information or opinions contained in this presentation and no liability whatsoever (in negligence or otherwise) is accepted by the Blue Owl Entities for any loss howsoever arising, directly or indirectly, from any use of this presentation or its contents, or otherwise arising in connection therewith. Performance Information: Where performance returns have been included in this presentation, Blue Owl has included herein important information relating to the calculation of these returns as well as other pertinent performance related definitions. All investments are subject to risk, including the loss of the principal amount invested. These risks may include limited operating history, uncertain distributions, inconsistent valuation of the portfolio, changing interest rates, leveraging of assets, reliance on the investment advisor, potential conflicts of interest, payment of substantial fees to the investment advisor and the dealer manager, potential illiquidity, and liquidation at more or less than the original amount invested. Diversification will not guarantee profitability or protection against loss. Performance may be volatile, and the NAV may fluctuate. This presentation is for informational purposes only and is not an offer or a solicitation to sell or subscribe for any fund and does not constitute investment, legal, regulatory, business, tax, financial, accounting, or other advice or a recommendation regarding any securities of Blue Owl, of any fund or vehicle managed by Blue Owl, or of any other issuer of securities. Only a definitive offering document can make such an offer. 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