Blue Owl software lending triggers another quake in private credit
(CNBC) Blue Owl BDC’s CEO Craig Packer discusses the recent sale of loans to institutional investors amid market concerns.
Blue Owl, a direct lender focusing on software industry loans, recently sold $1.4 billion of its loans to institutional investors at nearly full value, signaling confidence in the debt. However, the move caused a sharp decline in Blue Owl’s stock and raised worries about liquidity demands in private credit markets. The firm’s decision to replace voluntary redemptions with mandated “capital distributions” fueled concerns of forced sales of assets to meet investor requests. Despite assurances from Packer that these changes were not halting redemptions, market jitters persist. The company’s heavy focus on software loans adds to investor skepticism, questioning whether the loans sold were a true representation of Blue Owl’s overall portfolio. The central tension between illiquid assets and demands for liquidity in private credit markets is highlighted by Blue Owl’s situation, prompting concerns about a broader market crisis.
