Blue Owl Technology raises $150 million in private placement

Blue Owl Technology Financial Corp. (NYSE: OTF ) has returned to the market for its third financing since June, marking a steady run of fundraising activity.

The firm raised $150 million through a private placement.

It is selling senior unsecured notes yielding 7.6% and maturing in September 2032, according to a statement from the fund and • Blue Owl Technology stock is showing downward bias.

Where are OTF shares going? "This added flexibility positions us to grow the portfolio and capitalize on an increasingly attractive environment for technology investing," CEO Craig Packer said in the release.

Read Also: EXCLUSIVE: Debt Maturity Cliff Could Unleash a New Wave of Bankruptcies in 2027 Bloomberg-compiled data noted that this coupon is the highest for any bonds issued by OTF since September 2023, when it priced a $75 million private placement at an 8.5% yield.

OTF priced $400 million of bonds earlier this year, double the $200 million it initially sought, in a tap of the 6.500% notes due 2029 it first sold in June, according to a prospectus supplement.

Blue Owl Capital Inc., which manages Blue Owl Technology, sold $750 million in notes last month, as investor demand reached as much as $3.3 billion for the offering.

RBC, SMBC, ING Groep NV, Mizuho Financial Group and Societe Generale SA managed the transaction for Blue Owl Technology.

Private credit has been under pressure this year as investors raise concerns regarding lenders’ underwriting practices as well as their exposure to software companies that could face disruption from advances in artificial intelligence.

Despite the increase in fundraising activity, shares of OTF are down 21% year-to-date.

The fund’s credit performance weakened slightly in the second quarter, as non-accrual investments, which are categorized as borrowers who have stopped making scheduled payments, rose to 0.6% of the portfolio at cost, up from 0.3% in the prior quarter.

The fund finished the period with more than $2 billion in cash and unused borrowing capacity across its credit lines.

Earlier this year, Blue Owl Capital held a similar offering, raising $400 million from bond investors.

The bonds were issued by Blue Owl Capital Corp. (OBDC) and are investment-grade rated notes.

The bonds were yielding 6.4% and were set to mature in September 2028, according to an SEC filing.

Pacific Investment Management Co. (PIMCO) acquired all of the $400 million bond offering shortly after.

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