Blue Owl Technology Finance Corp (OTF), a technology-focused business development company operated by Blue Owl Capital, raised a further $150m through a private placement of senior unsecured notes, according to Private Equity Wire citing a report by Bloomberg.
The notes carry a 7.6% coupon and mature in September 2032, according to the fund.
Terms and how the issuance fits recent financings
The transaction was OTF’s third debt financing since June and took the vehicle’s total debt capital raised since the end of the second quarter to $800m, according to Private Equity Wire.
The latest notes were described as OTF’s highest coupon on a bond issuance since September 2023, when the fund placed $75m of notes at a yield of 8.5%.
In August, OTF raised $400m through a separate issuance of 6.5% notes due in 2029.
OTF also secured a further $250m through a special-purpose vehicle facility backed by a portfolio of its investments.
Stated use of proceeds and management comment
The additional funding gives OTF greater capacity to deploy capital into technology-related private credit opportunities at a time when the sector is navigating heightened investor scrutiny, according to Private Equity Wire.
Blue Owl chief executive Craig Packer said the expanded financing flexibility would allow the fund to grow its portfolio and take advantage of what the firm views as an increasingly attractive environment for technology investing.
Market backdrop, share performance, and credit metrics disclosed
The fundraising comes against a challenging backdrop for technology-focused private credit, as investors have become more cautious about the sector amid concerns over lending standards and the potential for artificial intelligence to disrupt software businesses that form a significant part of private credit portfolios.
OTF has sought to support its share price through stock buybacks.
Management has indicated that its borrowers have so far shown limited evidence of material AI-related disruption.
Despite a partial recovery since early August, OTF shares remain around 21% lower for the year.
Non-accruals, defined as loans on which borrowers have stopped making payments, increased during the second quarter to 0.6% of the portfolio at cost, compared with 0.3% in the previous period.
Liquidity and bank facility update
OTF extended its $2.7bn revolving credit facility during the second quarter, with all of its existing bank partners renewing their commitments.
It ended the period with more than $2bn in cash and available borrowing capacity across its credit facilities, providing room to fund new investments and manage existing portfolio commitments.
