Blue Owl Completes $501M CLO
The company will retain equity and reinvest proceeds through 2030 under a self-managed strategy.
October 16, 2025
Structured financing strengthens Blue Owl’s lending platform
Blue Owl Technology Finance Corp. has completed a $501.32 million collateralized loan obligation (CLO), reinforcing its commitment to funding middle market lending through structured credit. The deal closed on October 8 and was issued through Athena CLO V, a Blue Owl subsidiary formed specifically for this transaction.
Here’s how it breaks down: the CLO includes three tranches of floating-rate debt— $260 million in AAA-rated Class A Notes, $25 million in AA-rated Class B Notes, and $15 million in A-rated Class C Notes. All are tied to three-month term SOFR and carry different spreads. These notes will mature in 2038 and were placed privately with institutional investors by MUFG Securities and NatWest Markets.
At the same time, Athena CLO V issued $201.32 million in preferred shares, which aren’t secured by the loan collateral. Blue Owl purchased all of these shares and will retain them throughout the life of the transaction. This gives the company skin in the game and satisfies regulatory retention requirements in the U.S., UK, and EU.
Loan contributions and reinvestment strategy
The underlying portfolio consists of approximately $447.69 million in middle market loans that Blue Owl contributed at closing. The company signed a loan sale agreement with Athena CLO V that covers this initial contribution and allows for ongoing sales. These transactions were accounted for without any gains or losses, and included standard representations and covenants.
Blue Owl’s investment adviser, Blue Owl Technology Credit Advisors (OTCA), will manage the loan portfolio. Under the CLO’s reinvestment period, which runs through October 15, 2030, OTCA can use loan proceeds to purchase new middle market loans. It will follow Blue Owl’s existing investment strategy and origination framework to do so.
Although OTCA is entitled to collateral management fees, it has currently waived them. If that waiver is lifted, any fees it collects will be offset by adjustments to its broader management agreement with the company.
Capital deployment and regulatory positioning
Net proceeds from the transaction, after accounting for fees and expenses, will go toward general corporate purposes. The notes were issued in a private placement and are subject to resale restrictions under U.S. securities law.
Blue Owl continues to lean on its in-house structuring and origination capabilities to drive its securitization strategy. With this CLO, the company adds another layer of long-term financing while keeping full control over reinvestment and equity exposure.
Share
Read More Articles
