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Bond Market News
Blue Owl Curbs Redemptions in Private Credit Fund
February 20, 2026
Alternative asset manager Blue Owl Capital Inc. restricted withdrawals from one of its retail-focused private credit funds, Blue Owl Capital Corp II (OBDC II). Instead, investors’ capital will be returned gradually via distributions funded by loan repayments, asset sales and other such transactions. To provide liquidity, Blue Owl has already sold about $1.4bn of direct-lending loans across three funds. The sale comprised $600mn from OBDC II representing approximately 34% of its portfolio. Besides, it also sold $400mn from Blue Owl Technology Income Corp. (OTIC) and $400mn from Blue Owl Capital Corporation (OBDC), representing approximately 6% and 2% of the portfolios at each fund respectively. Proceeds will be used to repay a credit facility from Goldman Sachs Group Inc. and make a special cash payout equal to about 30% of the fund’s net asset value. Recently, OBDC II drew scrutiny after Blue Owl proposed merging it with a publicly traded vehicle. Redemption requests at the fund already exceeded the standard 5% quarterly cap. Analysts highlighted that the announcement has intensified scrutiny of private credit valuations and underwriting standards for highly leveraged borrowers. Craig Packer, a co-founder of Blue Owl, defended the decision, noting that loans were sold at 99.7% of par value, arguing it demonstrates strong portfolio quality.
Blue Owl Capital Corp’s bonds traded stable with the 6.2% 2030s at 100.4, yielding 6.1%. Also, Blue Owl Capital Corp II’s 8.45% 2026s were trading steady at 102.3, yielding 4.73%
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