Fitch Assigns Rating to Owl Rock Capital Corporation II
March 2, 2020 | Luke Schmidt | Blue Vault
On February 28, 2020, Fitch Ratings assigned a first-time Long-Term Issuer Default Rating of ‘BBB-‘ to Owl Rock Capital Corporation II (“ORCCII”) with a Rating Outlook of Stable. In addition, Fitch also assigned a senior unsecured debt rating of ‘BBB-‘ to ORCCII’s outstanding unsecured debt obligations.
These ratings reflect ORCCII’s strong and experienced management team, broad sponsor relationships, lower portfolio concentrations relative to rated BDCs, above-average exposure to first lien investments and appropriate leverage. Additionally, Fitch believes that ORCCII’s access to deal flow benefits from its ability to co-invest with other funds managed by Owl Rock Capital Advisors LLC, such as Owl Rock Capital Corporation (ORCC; rated BBB-/Stable).
Rating constraints specific to ORCCII include its short operating history, elevated growth in a competitive underwriting environment, relatively low funding diversity, and the potential that ORCCII will be unable to access the equity markets for capital following the completion of its continuous public offering, barring a liquidity event.
ORCCII is a nontraded BDC which became effective in February 2017. Since commencing its continuous public offering and through February 25, 2020, ORCCII had issued 116,123,064 shares of its common stock for gross proceeds of approximately $1.07 billion. As of December 31, 2019, ORCCII reported total assets of approximately $1.53 billion with investments totaling approximately $1.44 billion. ORCCII reported a 12-month total return for 2019 of 7.10%, up from 6.70% reported for 2018.
Sources: Fitch Ratings, SEC
