Blue Owl Capital Corporation

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Owl Rock Capital Corporation's first quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, just press star 1. Thank you. Dana Sclafani, Head of Investor Relations, you may begin your conference.

Thank you, Operator. Good morning, everyone, and welcome to Owl Rock Capital Corporation's first quarter earnings call. Joining me this morning are our Chief Executive Officer, Craig Packer, our Chief Financial Officer, and Chief Operating Officer, Jonathan Lamm, and other members of our senior management team. I'd like to remind our listeners that remarks made during today's call may contain forward-looking statements which are not a guarantee of future performance or results and involve a number of risks and uncertainties that are outside the company's control. Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described in ORCC's filings with the FCC. The company assumes no obligation to update any forward-looking statements. We will also be referring to non-GAAP measures on today's call. which are reconciled to gap figures in our earnings press release and supplemental earnings presentation available on the investor relations section of our website at owlrockcapitalcorporation.com. With that, I'll turn the call over to Craig.

Thanks, Dana. Good morning, everyone, and thank you for joining us today. First, let's cover our high-level results. Our net investment income was $0.31 per share in line with our previously declared first quarter dividends. We also reported net asset value per share of $14.88 down modestly from our fourth quarter NAB per share of $15.08, primarily driven by market credit spread widening. This quarter was clearly an inflection point in the economy and in the credit markets. Investor concerns around geopolitical uncertainty, inflation, and the shift in Fed policy led to increased volatility across the broader market. Despite these developments, we are very pleased with our performance and how our portfolio is positioned for the evolving economic environment. This was our third consecutive quarter of covering our dividend, but it was a notable one because we were able to generate 31 cents per share of NAI despite very little repayment income, primarily due to a seasonally quieter M&A environment in the first quarter. Repayment-related fee income was a meaningful contributor to our results in the last two quarters, given how active the deal environment was in the second half of 2021. During the quarter, we originated primarily first lien investments and attractive spreads, and we continued to optimize our portfolio mix. We were able to redeploy capital from lower spread repayments into higher spread new originations, while still maintaining roughly 75% of our assets in first lien or Unitron's term loans. We finished the quarter with a $12.8 billion portfolio across 157 investments, which continues to generate healthy interest and dividend income. We believe our NII this quarter demonstrates the strong core earnings power of our portfolio even without significant fee income. In addition, we would expect to see further benefits from rising rates and an increase in repayment income as deal activity rebounds in the second half of the year. For some perspective, a year ago in the first quarter of 2021, our NII was $0.26 per share. Since that time, we have significantly grown the portfolio and increased leverage to within our target range