Blue Owl's Credit Income Corp. (OCIC), a private credit fund that capped redemptions earlier this year, has raised $500 million in investment-grade bonds.
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The company priced five-year notes to yield a spread of 2.55% points over Treasuries at a reoffer price of 98.771, sources familiar with the matter told Bloomberg. The spread was roughly 0.25% points tighter than in previous discussions, and the proceeds will be used to repay debt, sources noted.
The move comes as business development companies (BDCs) step up borrowing following a stretch of limited issuance.
This was part of a broader slate of eight investment-grade bond offerings, which collectively are expected to raise $8.8 billion. The transaction was arranged by Crédit Agricole SA, ING Groep NV, Royal Bank of Canada, Sumitomo Mitsui Banking Corp. and Wells Fargo & Co.
OCIC, a business development company with roughly $37 billion in assets, received redemption requests totaling more than 20% of its shares. However, withdrawals were capped at 5% of net asset value for both OCIC and Blue Owl Technology Income Corp., in line with typical limits set for such funds to manage liquidity.
Redemptions At Other Companies
Several funds capped redemptions in the private credit funds last week amidst renewed concerns surrounding the market.
Monroe Capital capped its redemptions at 5%, as investors sought to redeem approximately 10% of shares.
Blackstone Inc (NYSE:BX) restricted quarterly withdrawals in its $79 billion Blackstone Private Credit Fund after investors asked to withdraw approximately 10% of fund shares for the quarter, up from 7.9% in the prior period. The fund applied a 5% cap, framing the move as intentional rather than an emergency response.
Meanwhile, the flagship private credit fund of Cliffwater LLC capped redemptions at 5% in the second quarter after investors sought to redeem approximately 17% of the fund’s shares.
Cliffwater told shareholders of Cliffwater's Corporate Lending Fund (CCLFX) in a letter that they would receive one-third of the money they requested back, Bloomberg reported.
Partners Group is restricting investor withdrawals from its $8.6 billion Global Value SICAV fund after redemption requests exceeded 5% of the net asset value, a move that rattled sentiment across private markets. The firm pointed to instability across open-ended vehicles since early last year, beginning in private credit and later affecting private equity, Reuters reported.
Apollo Global Management (NYSE:APO) President Jim Zelter told attendees at Bernstein's Strategic Decisions Conference in New York last month that he believes firms will continue to see investors looking to pull cash from private credit funds.
“I don’t think it was a one-shot,” he said of the redemption wave.
Zelter also warned that redemption pressure could tick higher if some investors try to time the limits. There "may be even a little bit of an increase if people want to game the system," he said, adding, "We are not through the turbulence yet."
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