Blue Owl Capital Corporation

Good morning, everyone, and welcome to the Blue Owl Corporation fourth quarter and full year 2024 earnings call. As a reminder, this call is being recorded. At this time, I'd like to turn the call over to Mike Mastuccio, head of BDC in Best Relations. Thank you. You may begin.

Thank you, Operator, and welcome to Blue Owl Capital Corporation's fourth quarter and full year 2024 earnings conference call. Yesterday, Blue Owl Capital Corporation issued its earnings release and posted an earnings presentation for the fourth quarter and full year ended December 31st, 2024. These should be reviewed in conjunction with the company's 10-K filed yesterday with the SEC. All materials referenced on today's call, including the earnings press release, earnings presentation, and 10-K are available on the investor section of the company's website at blueowlcapitalcorporation.com. Joining us on the call today are Craig Packer, Chief Executive Officer, Logan Nicholson, President, and Jonathan Lamb, Chief Financial Officer. I'd like to remind listeners that remarks made during today's call may contain forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties that are outside of 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 OBDC's filings with the SEC. The company assumes no obligation to update any forward-looking statements. Certain information discussed on this call and in the company's earnings materials, including information related to portfolio companies, was derived from third-party sources and has not been independently verified. The company makes no such representations or warranties with respect to this information. With that, I'll turn the call over to Craig Packer, Chief Executive Officer of OBDC.

Thanks, Mike. Good morning, everyone, and thank you all for joining us today. On behalf of the Blue Owl team, I would like to extend a special welcome to our OBDE shareholders who are joining us following the closing of the merger in January. I also want to take a moment to thank our BDC team members for all their hard work to successfully close this merger. We generated strong fourth quarter and full year results, driven by the ongoing strength of our portfolio, robust investment activity, and tailwinds from elevated interest rates. Consistent with our pre-release preliminary results in January, our fourth quarter NII was 47 cents per share and our full-year NII totaled $1.89 per share. We achieved ROE for the quarter of 12.4%, our eighth consecutive quarter of double-digit ROE, and our full-year ROE was 12.2%. As of quarter end, our net asset value per share was $15.26, approximately in line with the prior quarter. Our results throughout the year reflected our attractive asset base and the resilient credit quality of our portfolio, even against an evolving economic backdrop. Further, it's worth mentioning that our non-accrual rate remains well below the industry average. For 2024, we paid out record dividends totaling $1.72 per share, which reflects a nearly 10% increase year over year, while maintaining our stable net asset value per share. Next, I want to take a moment to look back on what we accomplished in 2024. Overall, the year presented some challenges. M&A deal flow was disappointing, elevated base rates led to a focus on credit risk, and a strong broadly syndicated loan market resulted in spread compression. Despite these pressures, our performance in 2024 was very strong, and we closed the year on solid footing. We originated a record number of investments while maintaining excellent credit quality. We further strengthened our capital structure by upsizing our revolving credit facility and priced our lowest spread unsecured bond offering to date. Importantly, we announced the merger with Blue Owl Capital Corporation III, or OBDE, which we just closed in January. All the while, we have continued to deliver attractive risk-adjusted returns. We believe our platform, our scale, our disciplined investment approach, our conservative balance sheet, and our deeply experienced team are what has differentiated OBDC throughout the year. We have said for a long time that we are built with the goal of performing well in any economic environment. 2024 was a further demonstration of that point. Additionally, we meaningfully broadened Blue Owl's credit platform in 2024 by expanding into alternative and investment grade credit, as well as data centers. Together, these new capabilities augment the origination funnel for our BDCs. We have long believed the scale of our direct lending platform is one of our largest competitive advantages. Our strategic efforts at Blue Owl over the past year only strengthen those advantages and further our differentiation. We are among the select few platforms with the size, resources, and flexibility to consistently deliver for shareholders and borrowers alike. With over $135 billion of credit assets under management and our expanded suite of financing solutions, we have become even more important to borrowers and sponsors. This enhanced capacity allows us to better meet the ever-evolving and diverse needs of our partners. With this growth, the trend towards larger deals has been a focus of ours. Rather than spreading capital across smaller deals that don't align with our strategic goals, we're now able to deploy meaningful capital into the opportunities that we have the highest conviction in. For example, across our direct lending business, our average hold size on new direct lending deals has grown from $200 million in 2021 to roughly $350 million in 2024, while the total deal size has nearly doubled from $600 million to over $1 billion during that same time period. Despite the increase in capital deployment across our platform, our selectivity rate still remains low at roughly 5%. Further, we continue to take a leadership role in most of our deals, leading or co-leading approximately 90% of transactions. Additionally, we have a deep pool of existing borrowers and sponsor relationships we can draw upon for deal flow, providing investment opportunities even during times of modest new activity as we experience throughout the year. To that end, roughly 50% of our originations in 2024 were in existing portfolio companies. We believe the market will continue to favor the largest direct lending platforms and our efforts to grow across both the Blue Owl platform and our BDCs will provide a distinct competitive advantage moving forward. Finally, I want to spend some time on the recently closed merger between OBDC and OBDE. which further enhances our combined company's competitive advantage. Following the closing of the merger, OBDC is now the second largest publicly traded BDC by total assets. This has already led to improved trading liquidity, and we anticipate the merger will drive lower costs of financing and generate meaningful operational synergies moving forward. Subsequent to quarter end, and in conjunction with the merger close, we released preliminary financial results for both OBDC and OBDE, which reflected ongoing strong performance on a standalone basis for both BDCs. The combined portfolio represents a larger and more diversified composition with increased first lean exposure and lower non-accruals than standalone OBDC. All this leaves OBDC poised for continued performance in the years to come. Looking ahead, as I reflect on all that we've accomplished throughout last year, I feel very positive about the platform and believe OBDC is well positioned to continue to deliver for shareholders. With that, I'll turn it over to Logan for additional color on portfolio performance.