Moody's Upgrades Blue Owl (OBDC) Rating to Baa2

Moody's Upgrades Blue Owl Capital to Baa2

Moody's Ratings has upgraded Blue Owl Capital Corporation’s (OBDC) long-term issuer and senior unsecured ratings to Baa2 from Baa3. The ratings agency also revised the company's outlook to stable from positive, reflecting confidence in its financial stability and management.

Key Financial Strengths

The upgrade is supported by OBDC's strong underwriting and risk management, which has resulted in a very low annual net loss rate of only 27 basis points since its inception. Moody's noted the company's focus on upper-middle market companies in less cyclical industries and its substantial liquidity, including $3.0 billion in cash and available credit.

Future Rating Considerations

Moody’s stated that a future upgrade could be possible if OBDC sustains strong profitability, reduces its gross debt to equity ratio below 1.0x, and lowers its reliance on secured debt. Conversely, a downgrade could occur if asset quality deteriorates, profitability weakens, or the asset coverage ratio cushion falls below 20%.

Summary

The rating upgrade to Baa2 acknowledges Blue Owl Capital Corporation's consistent performance, prudent risk management, and solid financial position. The stable outlook suggests that Moody's expects the company to maintain these strengths, supported by a clear strategy for modest deleveraging and a strong liquidity profile.

FAQ

Q: What is Blue Owl Capital Corporation's new credit rating from Moody's?
A: Moody's upgraded OBDC's long-term issuer and senior unsecured ratings to Baa2 from Baa3, with a stable outlook.

Q: Why did Moody's upgrade OBDC's rating?
A: The upgrade was primarily due to OBDC's strong management, effective underwriting and risk controls, a low historical net loss rate, and a solid liquidity position.

Source: Investing.com