OWL ROCK CAPITAL CORPORATION II A PRIVATE CREDIT STRATEGY OFFERING INCOME POTENTIAL
1Pursuant to the terms of the ORCC II prospectus, the share price is subject to change based on fluctuations in NAV (Net Asset Value). Please refer to the current ORCC II prospectus as amended and supplemented for disclosures relating to the share price (referred to as the “public offering price” in the prospectus).
The distribution rate shown is calculated by annualizing the weekly declared distributions per share and dividing by the most recently published public offering price as of January 6, 2021. The annualized distribution rate shown may be rounded. The payment of future distributions is subject to the discretion of ORCC II’s board of directors and applicable legal restrictions, therefore there can be no assurance as to the amount or timing of any such future distributions. Distributions are not guaranteed. Up to 100% of distributions have been funded and may continue to be funded by the reimbursement of certain expenses that are subject to repayment to the Adviser of ORCC II. Such waivers and reimbursements by the Adviser may not continue in the future. For the quarter that ended on September 30, 2020, if the Adviser had not agreed to reimburse certain expenses for ORCC II, 13.8% of the distributions paid would have come from offering proceeds. The repayment of amounts owed to the Adviser will reduce the future distributions to which investors would otherwise be entitled.
Cumulative total returns for the period April 4, 2017 to September 30, 2020 were 26.0% (without upfront sales load) and 19.7% (with maximum upfront sales load). Past performance does not guarantee future results. Returns reflect reinvestment of distributions and the deduction of ongoing expenses that are borne by investors, such as management fees, incentive fees, interest expense, offering costs, professional fees, director fees and other general and administrative expenses. An investment in ORCC II is subject to a maximum upfront sales load of 5% of the offering price, which will reduce the amount of capital available for investment. Operating expenses may vary in the future based on the amount of capital raised, the Adviser’s election to continue expense support, and other unpredictable variables.
PORTFOLIO OVERVIEW AS OF 9/30/2020
TOP 10 PORTFOLIO COMPANIES
- KS Management$49,6262.7%
- Shearer’s Foods$49,5002.7%
- Informatica LLC$42,0002.3%
- Lazer Spot$39,9682.2%
- Associations, Inc.$34,1641.8%
- Nutraceutical International$32,1061.7%
- STS Aviation30,8011.7%
Past performance is not a guarantee of future results.
These are “Doing Business As” (DBA) names. Please refer to the Owl Rock Capital Corporation II 10-Q for actual borrower names. Holdings are subject to change and there is no assurance any investment will remain in our portfolio.
Percentages are based on fair value and shown net of unfunded commitment amounts. Fair Value is determined in good faith by ORCC II’s board of directors and reviewed by the Adviser’s valuation committee. Valuations may change over time.
Represents investments in multiple facility types of the same borrower.
“Direct Origination” refers to investments sourced by Owl Rock Capital Advisors LLC from private equity firms, portfolio companies, or other direct lenders. “Syndicated” refers to investments purchased or sourced through a broker-dealer, bank or similar intermediary as well as transactions syndicated, structured, arranged or led by an investment bank, broker-dealer or similar intermediary.
Other industries include 4% Buildings and real estate, 4% Consumer products, 4% Education, 4% Specialty retail, 4% Transportation, 2% Chemicals, 2% Advertising and media, 2% Financial services, 2% Containers and packaging, 2% Household products, 2% Oil and gas, 1% Automotive, 1% Leisure and entertainment, 1% Infrastructure and environmental services, <1% Telecommunications, <1% Energy equipment and services, <1% Human resource support services. Diversification will not guarantee profitability or protection against loss.
This is neither an offer to sell nor a solicitation of an offer to buy the securities described herein. Only a prospectus for Owl Rock Capital Corporation II can make such an offer. This material is authorized only when it is accompanied or preceded by the Owl Rock Capital Corporation II prospectus. Neither the SEC, the Attorney General of the State of New York nor any state securities commission has approved or disapproved of these securities or determined if the prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Securities are offered through Owl Rock Capital Securities LLC, member of FINRA/SIPC, as Dealer Manager.
Risk Factors and Other Important Information:
An investment in Owl Rock Capital Corporation II (“ORCC II” or “our”, “we” or “us”) is speculative and involves a high degree of risk, including the risk of a substantial loss of investment. The following are some of the risks involved in an investment in our common shares; however, an investor should carefully consider the information found in the “Risk Factors” section of our prospectus before deciding to invest:
- You should not expect to be able to sell your shares regardless of how we perform.
- We may offer to repurchase a limited number of shares, but if we do, it is likely you will receive less than your initial purchase price. While ORCC II intends to implement a share repurchase program and conduct quarterly tender offers, any such share repurchase program may be amended, suspended or terminated at any time in the discretion of our board of directors. Any repurchases will be limited to the lesser of (a) 2.5% of the weighted average number of shares of our common stock outstanding in the prior 12-month period and (b) the number of shares we can repurchase with the proceeds we receive from the sale of shares of our common stock under our distribution reinvestment plan.
- We do not intend to list our shares on any securities exchange for what may be a significant time and we do not expect a secondary market in the shares to develop.
- You should consider that you may not have access to the money you invest for an indefinite period of time.
- Because you will be unable to sell your shares, you will be unable to reduce your exposure in any market downturn.
- An investment in our shares is not suitable for you if you need access to the money you invest.
- The payment of fees and expenses will reduce the funds available for investment, the net income generated, the funds available for distribution and the book value of the common shares. Please see ORCC II’s prospectus for details on its fees and expenses.
- We may fund distributions from sources other than earnings, including unlimited amounts of offering proceeds and borrowings, which may affect future distributions, constitute a return of capital and reduce the amount of capital available to us for investment. Any capital returned to stockholders through distributions will be distributed after payment of fees and expenses. We have not established any limit on the extent to which we may use offering proceeds to fund distributions.
- Our distributions to stockholders may be funded in significant part from the reimbursement of certain expenses, including through the waiver of certain investment advisory fees, that will be subject to repayment to Owl Rock Capital Advisors LLC (the “Adviser”). Significant portions of these distributions may not be based on our investment performance and such waivers and reimbursements may not continue in the future. The repayment of any amounts owed will reduce the future distributions to which you would otherwise be entitled.
- The Adviser and its affiliates face a number of conflicts with respect to us. Currently, the Adviser and its affiliates manage other investment entities, including Owl Rock Capital Corporation, and are not prohibited from raising money for and managing future investment entities that make the same types of investments as those we target. As a result, the time and resources that the Adviser devotes to us may be diverted. In addition, we may compete with any such investment entity also managed by the Adviser for the same investors and investment opportunities. Furthermore, the Adviser may face conflicts of interest with respect to services it may perform for companies in which we invest as it may receive fees in connection with such services that may not be shared with us.
- The incentive fee payable by us to the Adviser may create an incentive for the Adviser to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangements. We may be obligated to pay the Adviser incentive fees even if we incur a net loss due to a decline in the value of our portfolio and even if our earned interest income is not payable in cash.
- ORCC II intends to invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated.
- Investing in privately held middle market companies presents certain challenges, including the lack of available information about these companies.
The information provided above is not directed at any particular investor or category of investors and is provided solely as general information about our products and services to regulated financial intermediaries and to otherwise provide general investment education. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as Owl Rock Capital Securities LLC, its affiliates, and Owl Rock Capital Corporation II are not undertaking to provide investment advice, act as an adviser, or give advice in a fiduciary capacity with respect to the materials presented herein.