Seven basis points. For every $10,000 deployed across Blue Owl Capital’s direct lending platform since 2016, roughly 70 cents per year was lost to actual credit defaults. That annualized figure, calculated across both OBDC and OCIC through year-end 2025, is what Moody’s highlighted as a key factor in its January 2026 upgrade of both vehicles to Baa2 (https://finchannel.com/moodys-upgrades-blue-owl-bdcs-to-baa2/129475/american-business-trends/2026/02/).
OBDC’s standalone figure was higher at 27 basis points since its April 2016 inception, but still among the lowest realized loss rates in the BDC industry over the same period. For a rating agency evaluating the creditworthiness of unsecured debt, realized loss experience is the closest thing to proof that the underwriting works.
How the Number Was Built
Several structural factors contributed to the result. Borrower size sits at the top of the list. OBDC’s borrowers carried a weighted average EBITDA of $229 million; OCIC’s averaged $296 million (https://www.investing.com/news/stock-market-news/blue-owl-capital-corporation-upgraded-to-baa2-by-moodys-93CH-4461248). Companies at that scale typically have more diversified revenue, deeper access to refinancing channels, and the institutional resources to negotiate through credit stress rather than default through it.
First-lien concentration reinforced borrower quality. 74% of OBDC’s investments at fair value were first-lien or unitranche, while OCIC held 88% at that seniority level. Loan-to-value ratios in the 30% to 40% range meant a substantial equity cushion absorbed losses before Blue Owl Capital’s debt positions were at risk.
One Important Caveat
Moody’s acknowledged a significant qualification: the track record doesn’t include a prolonged, severe recession. The nine-year window covers genuine stress. COVID-19 disrupted borrower operations worldwide, and the 2022-2023 rate increases were the fastest in four decades. But sustained unemployment, depressed consumer spending over multiple years, and a broad contraction in corporate earnings haven’t been part of the testing environment.
The agency concluded that the structural approach, combined with modest leverage levels, should protect creditors from losses. That’s a carefully worded statement: confidence in the architecture, with an honest acknowledgment that certain conditions haven’t yet tested it.
A 7 basis point loss rate is a fact about the past nine years. The structural choices that produced it (borrower size, LTV discipline, first-lien seniority) are what will matter during the conditions that haven’t arrived yet.
