Blue Owl fund facing redemptions raises $500 million in bond sale, Bloomberg News reports

June 8 (Reuters) – A private credit fund managed by Blue Owl Capital, which earlier this year imposed limits on investor redemptions, has raised $500 million through an investment‑grade bond offering, Bloomberg News reported on Monday, citing a person familiar with the matter. 

Blue Owl did not immediately respond to a Reuters request for comment. 

Here are more details from the report: 

• Blue Owl Credit Income Corp (OCIC) priced five-year notes at a spread of 255 basis points over U.S. Treasuries, at a reoffer price of 98.771, according to the report.

• The spread tightened by about 25 basis points from initial price talk, the report added.

• The proceeds will be used to repay debt, the report said.

• OCIC is structured as a ​business development company, a vehicle ​that ⁠raises equity and pairs it with leverage to finance loans, mainly ⁠to ​mid-sized companies.

• Wealthy investors have sought to withdraw funds from private credit vehicles in recent months, amid concerns about weakening lending standards and the potential for AI to disrupt the software sector, a key area of exposure for many such funds.

• The firm had capped withdrawals at 5% of shares at two of its funds earlier in the year, after receiving a historic level of redemption requests in the first quarter.

(Reporting by Pritam Biswas in Bengaluru)