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KBRA Assigns Rating to Blue Owl Technology Finance Corp.'s $400 Million Senior Unsecured Notes due 2029

OTFOWL
  • KBRA assigned a BBB rating with a Stable Outlook to Blue Owl Technology Finance Corp.'s $400 million 6.500% senior unsecured notes due October 15, 2029.
  • The rating is supported by OTF's affiliation with the $158.1 billion Blue Owl Credit platform, SEC exemptive relief for co-investments, \& an experienced management team.
  • As of June 30, 2026, following a 2025 merger, OTF holds $14.7 billion in total investments across 205 technology-focused companies.
  • The investment portfolio consists of 78% senior secured first lien loans, with top sector exposures in Systems Software (17.5%), Application Software (15.3%), \& Health Care Technology (12.4%).
  • Portfolio companies maintain a weighted average EBITDA of $291 million, revenue of $1.0 billion, \& enterprise value of $5.7 billion as of the second quarter of 2026.
  • Credit quality remains solid with only 0.6% of investments at cost in non-accrual status, \& 92.4% of the portfolio internally rated as performing at or above underwriting expectations.
  • OTF utilizes diversified funding sources including bank facilities, SPVs, CLOs, \& unsecured notes, with unsecured debt representing 36.2% of total debt.
  • Gross \& net leverage stood at 0.96x \& 0.93 respectively, staying within the target range of 0.90x to 1.25x, \& proceeds from the new notes will repay secured debt to maintain net neutral leverage.
  • The company holds ~$1.8 billion in available bank lines \& $210 million in unrestricted cash against $950 million of notes maturing within two years.
  • Rating challenges include the requirement to distribute 90% of earnings, illiquid assets, NAV volatility from equity investments, \& sensitivity to market sentiment regarding AI disruption.
  • A rating downgrade or negative Outlook could occur due to a significant U.S. economic downturn, deterioration in asset quality, or changes in senior management.
  • OTF is a closed-end BDC managed externally by Blue Owl Technology Credit Advisors LLC, an indirect subsidiary of Blue Owl Capital which manages over $319 billion in AUM.