Research Update: Blue Owl Capital Inc. Outlook Revised To Negative On Elevated Leverage After Recent Acquisitions; 'BBB' Ratings Affirmed

Blue Owl Capital Inc. has, in the last two quarters,engaged in several M&A transactions (involving Kuvare, Prima, Atalaya, and IPI) that we view as complementary to the overall business. These transactions--which can create integration risk--have also added incremental leverage, such that S&P Global Ratings-adjusted debt to EBITDA now exceeds 3.0x, the downside threshold for the rating. As a result, we revised the outlook on our issuer credit rating on Blue Owl Capital Inc. to negative from stable. At the same time, we affirmed the 'BBB' issuer credit rating and the 'BBB' issue-level rating on its unsecured bonds. The negative outlook reflects the company's elevated S&P Global Ratings-adjusted debt to EBITDA due to the large, recently announced acquisitions contributing to higher

...Issuer Credit Rating ###/Negative/-- Business risk: Satisfactory Country risk Low Industry risk Intermediate Competitive position Satisfactory Financial risk: Intermediate Cash flow/leverage Intermediate Anchor ### Modifiers: Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Strong (no impact) Management and governance Neutral (no impact) Comparable rating analysis Neutral (no impact) Stand-alone credit profile: ###...

Research Update