Owl Rock gets $200 million four-year revolver at Libor plus 250 bps

By Angela McDaniels

Tacoma, Wash., Dec. 4 – Owl Rock Capital Corp. II subsidiaries ORCC II Financing LLC and OR Lending II LLC entered into a $200 million revolving credit facility due Nov. 30, 2021 on Friday, according to an 8-K filing with the Securities and Exchange Commission.

Amounts drawn bear interest at Libor plus a spread of 250 basis points and, after a ramp-up period, the spread is payable on the undrawn amount.

Goldman Sachs Bank USA is the lead arranger, syndication agent and administrative agent. State Street Bank and Trust Co. is the collateral administrator and collateral agent. Cortland Capital Market Services LLC is the collateral custodian.

From time to time, Owl Rock expects to sell and contribute investments to ORCC II Financing under a sale and contribution agreement. No gain or loss will be recognized as a result of the contribution. Proceeds from the revolver will be used to finance the origination and acquisition of eligible assets by the subsidiaries, including the purchase of such assets from Owl Rock. Owl Rock retains a residual interest in assets contributed to or acquired by the subsidiaries through its ownership of the subsidiaries.

Availability is subject to a borrowing base test, which is based on the amount of the subsidiaries’ assets from time to time.

The revolver has a reinvestment period of up to three years after the closing date. During this period, proceeds received by the subsidiaries from interest, dividends or fees on assets must be used to pay expenses and interest on outstanding borrowings, and the excess may be returned to Owl Rock. Proceeds received from principal on assets must be used to make quarterly payments of principal on outstanding borrowings.

After three years, proceeds received by the subsidiaries from interest and principal on collateral assets must be used to make quarterly payments of principal on outstanding borrowings.

Between quarterly payment dates, excess interest proceeds and principal proceeds may be released to the subsidiaries to make distributions to Owl Rock.

The revolver is secured by a perfected first-priority security interest in Owl Rock’s equity interests in the subsidiaries and in the assets of the subsidiaries and on any payments received by the subsidiaries in respect of those assets. Upon the occurrence of certain value-adjustment events relating to the assets securing the revolver, the subsidiaries will also be required to provide certain cash collateral. Assets pledged to the lenders will not be available to pay the debts of Owl Rock.

In connection with the revolver, Owl Rock is entering into a non-recourse carve out guaranty agreement with State Street Bank and Trust, on behalf of certain secured parties, and Goldman Sachs Bank USA.

Owl Rock is a business development company is based in New York.

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