Owl Rock Capital Corporation Modifies DRIP and Repurchases as Shares List on NYSE
July 25, 2019
In connection with Owl Rock Capital Corporation’s (the “Company”) initial public offering and listing (the “IPO”) of common stock on the New York Stock Exchange (the “NYSE”) the Company’s board of directors (the “Board”) approved a second amended and restated dividend reinvestment plan (the “New DRIP”) which became effective on July 22, 2019, concurrent with the IPO.
Pursuant to the New DRIP, the Company will reinvest all cash distributions declared by the Board on behalf of shareholders who do not elect to receive their distribution in cash as provided below. As a result, if the Board authorizes, and the Company declares, a cash dividend or other distribution, then shareholders who have not opted out of the New DRIP will have their cash distributions automatically reinvested in additional shares of Common Stock as described below, rather than receiving the cash dividend or other distribution.
If newly issued shares are used to implement the New DRIP, the number of shares to be issued to a shareholder will be determined by dividing the total dollar amount of the cash dividend or distribution payable to a shareholder by the market price per share of the Common Stock at the close of regular trading on the NYSE on the payment date of a distribution, or if no sale is reported for such day, the average of the reported bid and ask prices. However, if the market price per share on the payment date of a cash dividend or distribution exceeds the most recently computed net asset value per share, the Company will issue shares at the greater of (i) the most recently computed net asset value per share and (ii) 95% of the current market price per share (or such lesser discount to the current market price per share that still exceeded the most recently computed net asset value per share). For example, if the most recently computed net asset value per share is $15.00 and the market price on the payment date of a cash dividend is $14.00 per share, the Company will issue shares at $14.00 per share. If the most recently computed net asset value per share is $15.00 and the market price on the payment date of a cash dividend is $16.00 per share, the Company will issue shares at $15.20 per share (95% of the current market price). If the most recently computed net asset value per share is $15.00 and the market price on the payment date of a cash dividend is $15.50 per share, the Company will issue shares at $15.00 per share.
If shares are purchased in the open market to implement the New DRIP, the number of shares to be issued to a shareholder shall be determined by dividing the dollar amount of the cash dividend payable to such shareholder by the weighted average price per share for all shares purchased by the plan administrator in the open market in connection with the dividend.
Company Repurchase Plan
On July 22, 2019, the Company entered into a stock repurchase plan (the “Company 10b5-1 Plan”), to acquire up to $150 million in the aggregate of the Company’s common stock at prices below its net asset value per share over a specified period, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. The Company put the Company 10b5-1 Plan in place because it believes that, in the current market conditions, if its common stock is trading below its then-current net asset value per share, it is in the best interest of its shareholders for it to reinvest in its portfolio.
The Company 10b5-1 Plan is intended to allow the Company to repurchase its common stock at times when it otherwise might be prevented from doing so under insider trading laws. The Company 10b5-1 Plan requires Goldman Sachs & Co. LLC, as the Company’s agent, to repurchase shares of common stock on the Company’s behalf when the market price per share is below the most recently reported net asset value per share (including any updates, corrections or adjustments publicly announced by the Company to any previously announced net asset value per share). Under the Company 10b5-1 Plan, the agent will increase the volume of purchases made as the price of its common stock declines, subject to volume restrictions. The timing and amount of any stock repurchases will depend on the terms and conditions of the Company 10b5-1 Plan, the market price of the Company’s common stock and trading volumes, and no assurance can be given that any particular amount of common stock will be repurchased.
The purchase of shares pursuant to the Company 10b5-1 Plan is intended to satisfy the conditions of Rule 10b5-1 and Rule 10b-18 under the Exchange Act, and will otherwise be subject to applicable law, including Regulation M, which may prohibit purchases under certain circumstances. The Company 10b5-1 Plan is intended to commence 30 calendar days after the closing of this offering and terminate upon the earliest to occur of (i) 18-months (tolled for periods during which the Company 10b5-1 Plan is suspended), (ii) the end of the trading day on which the aggregate purchase price for all shares purchased under the Company 10b5-1 Plan equals $150,000,000 and (iii) the occurrence of certain other events described in the Company 10b5-1 Plan.
Source: SEC Form 8-K filed 7/24/2019
