OBDC and OBDC II Merger Termination Shifts Focus to Independent Value Creation and Strong Shareholder Returns
Merger Shelved as Boards Prioritize Flexibility Amid Volatile Markets
Blue Owl Capital Corporation (NYSE:OBDC) and Blue Owl Capital Corporation II announced the termination of their proposed merger, pointing to current market volatility as a key factor behind the decision. According to company leadership, the strategic review continues, and future alternatives remain on the table, but for now, each entity will chart its own course in pursuit of long-term shareholder value.
Shareholder Interests Take Precedence as Firms Stay the Course Independently
Despite the called-off merger, both OBDC and OBDC II maintain strong operational foundations. OBDC CEO Craig W. Packer reaffirmed confidence in both funds’ fundamentals and underscored a focus on delivering attractive independent returns. For OBDC II investors, plans are underway to reinstate the quarterly tender program as early as Q1 2026—contingent on board approval.
OBDC II’s Performance Outpaces Credit Indices—Key Figures at a Glance
Since its inception in 2017, OBDC II has returned a cumulative net gain approaching 80% and delivered an annualized net return of 9.3%. This performance has not only outperformed major syndicated loan and high-yield indices but has also demonstrated resilience through satisfied tenders in every quarter. The firm’s prudent approach is evident in a loss rate of just 0.23% and a non-accrual rate under 2%, pointing to strong credit discipline and portfolio health.
| Metric | OBDC II |
|---|---|
| Cumulative Net Return Since 2017 | ~80% |
| Annualized Net Return | 9.3% |
| Loss Rate Since Inception | 0.23% |
| Non-Accrual Rate (Current) | <2% |
| Quarterly Tenders Fully Satisfied | Every quarter since inception |
Shareholder Initiatives Remain a Priority with Buyback and Tender Plans
Alongside OBDC II’s plans to resume its tender program, OBDC continues to operate its $200 million share repurchase initiative. These measures emphasize the firms’ proactive capital management and commitment to maximizing shareholder value in the current environment.
Investment Focus and Portfolio Overview Remain Robust
As of September 30, 2025, OBDC’s portfolio included 238 companies with a fair value of $17.1 billion. OBDC II held 190 companies valued at $1.7 billion. Both firms, as regulated business development companies managed by Blue Owl Credit Advisors, reaffirm their specialization in middle-market lending, providing consistent and stable investment opportunities.
| Fund | Portfolio Companies | Fair Value (as of Sep 30, 2025) |
|---|---|---|
| OBDC | 238 | $17.10 billion |
| OBDC II | 190 | $1.70 billion |
What Should Investors Watch Next?
With the merger no longer moving forward, all eyes are now on OBDC and OBDC II’s capital deployment strategies and upcoming shareholder initiatives. The planned reinstatement of the OBDC II tender program and the continuation of OBDC’s share buyback could offer ongoing value opportunities. As markets remain volatile, both funds’ history of disciplined lending and stable performance suggest they are positioned to navigate future uncertainties independently—making their next steps worth following closely.
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