Owl Rock Capital Corp Shares Trading at Premium to Estimated NAV

July 25, 2019

Owl Rock Capital Corp Shares Trading at Premium to Estimated NAV


July 25, 2019 | James Sprow | Blue Vault

In a Prospectus filed with the SEC on July 18, Owl Rock Capital Corporation (“ORCC”) stated “As of the date of this prospectus, we estimate that our net asset value per share as of June 30, 2019 was between $15.27 per share and $15.30 per share.” On July 19, the common stock of ORCC began trading on the New York Stock Exchange (ticker symbol “ORCC”) and traded within a range of $15.02 to $15.86 according to Yahoo Finance. On July 24, the stock traded within a range of $15.52 to $15.61. At the low for that day, the stock was trading at a premium to the midpoint of the most recent estimated NAV ($15.285) of 1.5% and at the high for the day the premium to that midpoint NAV was 2.1%.

Owl Rock priced its IPO (that was filed with the SEC on June 4, 2019) of 10 million common shares at $15.30 per share. The underwriters have an option to purchase an additional 1,500,000 shares. After the offering, the Company will have 383,693,244 common shares outstanding, or 385,193,244 if the underwriters exercise their option to purchase additional shares of the common stock. 

ORCC had an NAV (unaudited) of $15.26 per share as of March 31, 2019, and $15.14 (unaudited) per share as of March 31, 2018. The company declared distributions per share of $1.42 for the year ended December 31, 2018, and declared a distribution of $0.33 for the quarters ended March 31, 2019, and March 31, 2018. Maintaining that distribution rate would provide a distribution yield of 9.1% based on the high price for its July 24 trading of $15.61.

The Company also has a provision to repurchase up to $150 million of its common shares if the price falls below the estimated NAV per share. In its July 18, 2019, form 497 filing with the SEC, it stated:  “On July 7, 2019, our Board approved the Company 10b5-1 Plan, to acquire up to $150 million in the aggregate of our common stock at prices below our net asset value per share over a specified period, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Exchange Act. We intend to put the Company 10b5-1 Plan in place because we believe that, in the current market conditions, if our common stock is trading below our then-current net asset value per share, it is in the best interest of our shareholders for us to reinvest in our portfolio.”

Sources:  Yahoo! Finance, Blue Vault, SEC

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