Blue Owl Capital Corp II 8-K

What Happened

• Blue Owl Capital Corp II announced on Feb 17–18, 2026 that it entered into six separately negotiated loan sale agreements to sell Subject Portfolios totaling $600.0 million in aggregate total debt investment commitments. The portfolios’ aggregate fair value (excluding unfunded commitments) was $538.3 million as of Feb 12, 2026 (99.8% of par). Settlement is expected in Q1 2026.
• The company also executed an Omnibus Amendment to its Revolving Credit and Guarantee & Security Agreements on Feb 17, 2026 that reduces the revolver capacity and raises borrowing costs. Concurrently, the Board approved monthly distributions of $0.0533 per share for Feb and Mar 2026 and proposed a special Return of Capital distribution of up to ~30% of the Company’s NAV as of Dec 31, 2025 (payable on or before Mar 31, 2026, subject to Board approval). The dividend reinvestment plan will be terminated.

Key Details

• Loan sales: $600.0M total commitments across six Purchasers; fair value $538.3M as of Feb 12, 2026; represent 33.8% of the Company’s total investment commitments (including unfunded) as of Dec 31, 2025.
• Portfolio mix: 92.0% first‑lien, 4.5% second‑lien, 3.5% unsecured; 98.2% floating rate; 100% rated 1–2 on the Company’s internal 5‑point scale; 96 portfolio companies across 25 industries; partial sales average ~59% of each underlying position.
• Credit amendment (Omnibus Amendment, Feb 17, 2026): revolver maximum reduced from $225.0M to $75.0M; revolver availability shortened from Jan 2028 to Oct 2027; unused fee increased from 0.375% to 0.50%–0.65%; margins increased (ABR loans +1.00%→+1.50%; Term Benchmark and RFR loans +2.00%→+2.50%); expands restricted‑payment flexibility and lowers the minimum shareholders’ equity test.
• Use of proceeds and current balances: proceeds intended to (i) repay amounts under the Revolving Credit Agreement (≈ $11.8M outstanding at 2.50% as of filing), (ii) repay amounts under the Credit Agreement (≈ $275.0M outstanding at 2.05%), and (iii) fund the planned special cash distribution.

Why It Matters

• This is a material portfolio disposition (one-third of total commitments) that will generate significant cash and materially change the company’s investment base and future interest income profile. Investors should note the high realized valuation (≈99.8% of par) and the company’s explicit plan to use proceeds to reduce debt and return capital to shareholders.
• The revolver amendment tightens liquidity capacity and raises borrowing costs, but also relaxes certain payout constraints, which may enable the planned distributions. The Board’s proposal to return up to ~30% of NAV (subject to approval) is a major capital action that could provide substantial cash to shareholders but reduces the company’s asset base going forward.