KBRA Affirms Ratings for Blue Owl Credit Income Corp.

KBRA affirms the BBB+ issuer and senior unsecured debt ratings for Blue Owl Credit Income Corp. (“OCIC” or “the company”). The rating Outlook is Stable.

Key Credit Considerations

The ratings reflect the company’s ties to the sizeable $145.5 billion Blue Owl Credit platform where the company has SEC exemptive relief to co-invest with other funds managed by Blue Owl Credit Advisors LLC and its affiliates, as well as the company's diversified $32.0 billion investment portfolio to 357 companies with a focus on senior secured first lien loans (88.6%) to upper middle market companies in less cyclical sectors as of June 30, 2025. For traditional financing (93.5% of total debt investments), weighted average annual EBITDA and weighted average annual revenue of $292 million and $1,201 million, respectively, as of June 30, 2025. The ratings are further supported by OCIC’s seasoned management team and investment committee, each with decades of private debt experience. Management has implemented a comparatively favorable and comprehensive set of risk management tools to ensure solid liquidity, funding, and asset quality in less favorable markets.

KBRA views the company’s gross leverage as adequate with a debt-to-equity ratio of 0.85x (net leverage 0.82x), below the company’s target range of 0.90x to 1.25x for net leverage, and an asset coverage ratio of 215% allowing for a solid cushion to regulatory minimum of 150% as of June 30, 2025. KBRA believes that the company’s targeted leverage metrics would allow OCIC to absorb increased volatility in less favorable market conditions.

The company has continued to access the capital markets, with a solid funding mix providing financial flexibility, which includes a bank revolving credit facility, SPV asset facilities, CLOs, and unsecured notes. Unsecured debt comprised 41% of total debt outstanding as of June 30, 2025, reducing asset encumbrance for the benefit of senior unsecured noteholders and providing solid financial flexibility. Liquidity was adequate with $1.95 billion of bank credit availability and $492 million of unrestricted cash, against $850 million of unsecured maturities within two years and $4.2 billion of unfunded commitments. A portion of the unfunded commitments are tied to covenants and transactions and are not expected to be drawn. Also, the company maintains a portfolio of more highly liquid investments (broadly syndicated loans - BSLs) for additional liquidity. As a continuously offered perpetual BDC, OCIC raises capital monthly and intends to offer up to 5% of its shares for repurchase quarterly. For 2Q25, OCIC raised $1.6 billion of equity, excluding reinvestment of distributions and had $465 million in tenders. Since inception through August 1, 2025, the company raised about $18.7 billion. As a perpetual BDC, the company does not have a liquidation event nor does it plan one.

Credit quality remains strong with three portfolio companies on non-accrual status. Total non-accruals remain low at 0.2% and 0.08% of total investments at cost and fair value, respectively, as of 2Q25. While OCIC's portfolio is relatively unseasoned, 95.4% of the investments at FV have an internal risk rating of a 1 or 2, performing at or above the company’s initial underwriting expectations.

Blue Owl Credit Income Corp. is an externally managed, non-diversified closed-end management investment company that has elected to be treated as a Business Development Company (BDC) under the 1940 Act and intends to elect to be treated as a Regulated Investment Company (RIC), which, among other things, must distribute to its shareholders at least 90% of the company’s investment company taxable income. The company was formed as a Maryland Corporation on April 22, 2020, commended operations on November 10, 2020, and is managed by Blue Owl Credit Advisors LLC, affiliate of Blue Owl Capital, Inc. (NYSE: OWL), which had ~$284 billion of AUM as of June 30, 2025. The company’s investment strategy coincides with the strategies of Blue Owl Capital Corporation (KBRA Issuer/Senior Unsecured Debt ratings of BBB+ / Stable Outlook) and Blue Owl Capital Corporation II (KBRA Issuer/Senior Unsecured Debt Ratings of BBB+ / Stable Outlook).

OCIC’s strengths are counterbalanced by the potential risks related to the company’s illiquid investments, an unseasoned investment portfolio with high portfolio growth, retained earnings constraints as a Regulated Investment Company (RIC), and the potential for increased non-accruals with a more uncertain economic environment with high base rates, inflation, and geopolitical risk. KBRA believes that OCIC and other Blue Owl BDCs will remain comparatively resilient.

Rating Sensitivities

Given the Stable Outlook, a rating upgrade is not expected over the medium term. A rating downgrade and/or Outlook change to Negative could be considered if there is a significant downturn in the U.S. economy with negative impact on OCIC’s earnings performance, asset quality, and leverage. A significant change in senior management and/or risk management policies could also lead to negative rating action.

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