KBRA Affirms Ratings for Blue Owl Capital Corporation

KBRA affirms the issuer and senior unsecured debt ratings of BBB+ for Blue Owl Capital Corporation (NYSE: OBDC or "the company"). The rating Outlook is Stable.

Key Credit Considerations

The ratings are supported by OBDC's ties to the $158.1 billion Blue Owl Credit platform, which maintains a strong reputation and leadership position in the private credit market. OBDC's experienced management team, with decades of private markets experience, has built a direct lending portfolio characterized by strong credit quality, focused primarily on sponsor-backed upper middle market companies. Management has implemented a comparatively favorable and comprehensive set of risk management tools to support solid liquidity, funding, and asset quality in less favorable markets. The company benefits from SEC exemptive relief to co-invest with other funds managed by Blue Owl Credit Advisors LLC and its affiliates, as well as from its diversified $15.0 billion investment portfolio with a focus on senior secured first lien loans (73%) to mostly upper middle market companies in mainly less cyclical industries as of June 30, 2026. The top three sectors were Internet Software & Services (11.6%), Healthcare Providers & Services (8.5%), and Asset Based Finance (7.4%). For traditional financing (91.5%), excluding joint ventures and certain investments that fall outside of the typical borrower profile, the weighted average annual EBITDA and weighted average annual revenue were $242 million and $1.06 billion, respectively, as of June 30, 2026.

The ratings also reflect the company's solid access to debt capital markets and its comparatively stronger funding profile among KBRA-rated BDCs. Funding sources include significant committed bank lines of credit, CLOs, and cost-effective access to the senior unsecured note market. The funding structure provides significant financial flexibility and lower asset encumbrance with an unsecured debt to total debt ratio of ~66.4% as of 2Q26. The company has comfortable liquidity with ~$4.1 billion of available credit lines and ~$ 217.7 million of unrestricted cash and cash equivalents set against $2.08 billion of senior unsecured debt coming due in the next two years and $1.5 billion of unfunded commitments, of which, more than half is not expected to be drawn. Subsequent to 2Q26, the company repaid $1.0 billion of senior unsecured notes due July 2026. The company's gross and net leverage were 1.14x and 1.09x, respectively, at 2Q26 within the company's target range of 0.9x to 1.25x and well within the maximum regulatory leverage of 2.0x. KBRA views the company's asset coverage of 187% as adequate, providing capacity to absorb increased market volatility and a solid cushion above the 150% regulatory minimum.

Credit quality remains relatively solid with non-accrual investments as a percentage of total investments at cost and fair value of 2.8% and 0.8%, respectively, as of 2Q26. While non-accrual investments on a cost basis increased modestly from 4Q25, they remain consistent with the rating category. Internal portfolio ratings also remained broadly stable year over year, with 91.7% of the portfolio performing at or above expectations at the time of underwriting. KBRA believes OBDC's focus on larger, generally less cyclical borrowers should support portfolio resilience through weaker operating environments.

The strengths are counterbalanced by the potential industrywide risks related to the company's illiquid investments, retained earnings constraints as a regulated investment company (RIC), and the potential for increased non-accrual investments with a more uncertain economic environment with high base rates, inflation, and geopolitical risk. KBRA believes that OBDC and other Blue Owl BDCs will remain comparatively resilient.

Blue Owl Capital Corporation is an externally managed, non-diversified closed-end management investment company that has elected to be treated as a business development company under the 1940 Act and has elected to be treated as a RIC, which, among other things, must distribute to its shareholders at least 90% of the company’s taxable income. The company commenced operations in March 2016 and was publicly listed on the NYSE in July 2019. The company is managed by Blue Owl Credit Advisors LLC, an indirect subsidiary of Blue Owl Capital, Inc. (NYSE: OWL), which had approximately $319 billion of assets under management as of June 30, 2026. The company's investment strategy coincides with the strategy of Blue Owl Credit Income Corp. (KBRA Issuer / Senior Unsecured Debt ratings of BBB+ / Stable Outlook).

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 a greater-than-expected negative impact to OBDC'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.

To access ratings and relevant documents, click here.

Methodology