Item 1.01 - Entry into a Material Definitive Agreement.
On January 12, 2024, Blue Owl Capital Corporation II (the “Company”), a Maryland corporation, entered into a Senior Secured Credit Agreement (the “Facility”). The parties to the Facility include the Company, as Borrower, the lenders and issuing banks from time to time parties thereto (each a “Lender” and collectively, the “Lenders”), Sumitomo Mitsui Banking Corporation, as Administrative Agent, Sumitomo Mitsui Banking Corporation, as a Joint Lead Arranger and as a Joint Book Runner, Truist Securities, Inc., as a Joint Lead Arranger and as a Joint Book Runner, MUFG Bank, Ltd., as a Joint Lead Arranger and as a Joint Book Runner and Wells Fargo Bank, National Association, as a Joint Lead Arranger and as a Joint Book Runner.
The Facility is guaranteed by certain domestic subsidiaries of the Company in existence as of the closing date of the Facility, and will be guaranteed by certain domestic subsidiaries of the Company that are formed or acquired by the Company in the future (collectively, the “Guarantors”). Proceeds of the Facility may be used for general corporate purposes, including the funding of portfolio investments.
The Facility provides for a term loan in an initial amount of $25,000,000 and a revolving credit facility in an initial amount of up to $225,000,000, subject to availability under the borrowing base, which is based on the Company’s portfolio investments and other outstanding indebtedness. Maximum capacity under the Facility may be increased to $1,000,000,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Facility is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions, and includes a $40,000,000 limit for swingline loans. The amount available for borrowing under the Facility is reduced by any standby letters of credit issued through the Facility.
The availability period with respect to the revolving credit facility under the Facility will terminate on January 12, 2028 (“Commitment Termination Date”) and the Facility will mature on January 12, 2029 (“Maturity Date”). During the period from the Commitment Termination Date to the Maturity Date, the Company will be obligated to make mandatory prepayments under the Facility out of the proceeds of certain asset sales and other recovery events and equity and debt issuances.
The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Facility in U.S. dollars will bear interest at either term SOFR plus a margin, or the prime rate plus a margin. The Company may elect either the term SOFR or prime rate at the time of drawdown, and loans denominated in U.S. dollars may be converted from one rate to another at any time at the Company’s option, subject to certain conditions. Amounts drawn under the Facility in other permitted currencies will bear interest at the relevant rate specified therein plus an applicable margin. The Company will also pay a fee of 0.375% on average daily undrawn amounts under the Facility.
The Facility includes customary covenants, including certain limitations on the incurrence by the Company of additional indebtedness and on the Company’s ability to make distributions to its shareholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events and certain financial covenants related to asset coverage and liquidity and other maintenance covenants, as well as customary events of default.
Item 2.03 - Creation of a Direct Financial Obligation.
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01 - Financial Statements and Exhibits.
(d) Exhibits
