Blue Owl Capital (NYSE:OWL) is making a comeback, raising $400 million from bond investors, following several months of ripples in the private credit market.

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The bonds, issued by Blue Owl Capital Corp (OBDC), are investment-grade rated notes. The bonds are yielding 6.4% and are set to mature in September 2028, according to an SEC filing, 

OBDC is a speciality finance and business development company that provides direct lending solutions to U.S. middle-market companies, according to the company's website.

Earlier this month, Blue Owl Capital capped redemptions in both its funds at 5% after investors requested withdrawals of 22% and 41% in its private credit and technology-focused funds, respectively.

The firm attributed the above-average number of requests to “heightened market concerns around AI-related disruption to software companies.”

“We continue to observe a meaningful disconnect between the public dialogue on private credit and the underlying trends in our portfolio,” Blue Owl wrote in a letter to shareholders.

Shares of Blue Owl stock are currently up 7.3% as of mid-day trading, although the stock remains down 40% year-to-date.

Private Markets Activity

Other firms have capped redemptions as the private credit market has come under growing pressure in recent weeks. Rising rates, tighter liquidity, and a broader risk-off environment have combined to squeeze a corner of finance that expanded rapidly during the easy money era. 

Oaktree Capital Management, elected to fully satisfy all redemption requests, representing 8.5% in its private credit fund for the first quarter.

Meanwhile, Morgan Stanley (NYSE:MS), JPMorgan Chase & Co. (NYSE:JPM), BlackRock (NYSE:BLK), and Barings have all begun limiting or restricting redemption requests in each of their private credit funds as investor concerns grow.

Despite this, there have been some signs recently that the private credit space is looking up.

Goldman Sachs Group (NYSE:GS) revealed that its private credit fund saw redemption requests of just under 5% of shares in the first quarter, an outlier in the industry.

Adams Street Partners has raised $7.5 billion for its third private credit vehicle, becoming the latest firm to do so despite the market volatility.

Ares Management (NYSE:ARES) is planning to launch a flagship U.S. direct lending fund that will target approximately $20 billion.

Blackstone recently secured more than $10 billion from its opportunistic credit vehicle, Blackstone Capital Opportunities Fund V, reaching its hardcap after being oversubscribed.

Other firms such as Goldman Sachs, Morgan Stanley and JPMorgan are all chasing after the private credit markets dislocation by launching new funds.

Photo: T. Schneider via Shutterstock