Blue Owl joins bond market frenzy with $1 billion debt issuance

A Blue Owl Capital fund issued $1 billion of debt in the US high-grade bond market onTuesday, as the tide of new issues continues to flow.

One of the funds of the private markets-focused alternative asset manager priced the long five-year note, a person familiar with the matter said. The note yields 2.6 percentage points over Treasuries after initial price talk in the 2.8 percentage points area, the person said, asking not to be identified as the details are private, according to a report by Bloomberg.

The sale proceeds would be used to help pay down debt under its revolving credit facility, asset-backed security and other secured financings, the person said.

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A spokesperson for Blue Owl did not respond to a request for comment.

The offering follows a deal from another private credit lender earlier this week, in the form of Sixth Street Lending Partners, which sold $600 million of debt on Monday. Private credit funds, commonly referred to as business development companies, have been selling debt at a record-setting pace this year.

Since last week, companies have flocked to the US blue-chip bond market with fresh financings in an apparent race to take advantage of sliding bond yields. About $87 billion of new deals have already been sold so far this month.

The nine other issuers were selling debt on Tuesday, including Oneok Inc., which sold $7 billion of bonds to fund the purchase price for its EnLink Midstream LLC and Medallion Midstream transactions.

The sale of debt was led by Mitsubishi UFJ Financial Group Inc., Royal Bank of Canada, Sumitomo Mitsui Banking Corp., and Wells Fargo & Co., the person familiar added.