T. Rowe Price, OHA Private Credit Fund Declares Q2 2024 Special Distribution
T. Rowe Price OHA Select Private Credit Fund, or OCREDIT – a joint investment offering sponsored by T. Rowe Price and Oak Hill Advisors – declared second quarter 2024 total distributions of $0.84 per share, of which $0.15 per share was a special distribution. As of June 30, 2024, the company’s annualized distribution yield (excluding special distributions) was nearly 10%.
Subsequent to quarter end on July 23, the company declared a regular distribution of $0.20 per share and a variable supplemental distribution of $0.03 per share, for total distributions of $0.23 per share, which are payable on or about Aug. 29, 2024, to common shareholders of record as of July 31.
OCREDIT was launched last fall as an OHA-managed private credit investment “solution” for investors via a non-traded, perpetual-life business development company structure. It invests in a diversified portfolio of primarily senior secured, privately originated loans to larger, well-established, recession-resistant companies located mainly in North America.
It started with $1.5 billion of capital available for investments, making it one of the industry’s largest non-traded BDC launches. This included over $600 million raised in equity commitments from T. Rowe Price and global institutional investors with, according to T. Rowe Price and OHA, long-term investment orientations, in addition to $875 million in credit facility commitments.
“We continue to be pleased with OCREDIT’s performance, and the relative value offered by our private credit investments,” said Eric Muller, OCREDIT’s chief executive officer. “Demand for private credit remains strong from both our sponsor borrowers and wealth channel distribution partners. We anticipate an acceleration of [mergers and acquisition] activity through [the] remainder of this year, bolstered by expected rate cuts, providing additional unique investment opportunities.”
OCREDIT’s net asset value per share as of June 30 was $27.98, down 0.6% from the previous quarter’s $28.15 (March 31, 2024). Its ending debt-to-equity was 0.74x, as compared to 0.61x at the end of March.
For the three months ended June 30, net investment fundings were $293.1 million. The company invested $412.6 million during the quarter, including $178.3 million in 14 new companies and $234.3 million in existing companies. The company had $119.5 million of principal repayments and sales during the quarter.
OCREDIT’s investment portfolio had a fair value of $1,649.7 million comprised of investments in 100 portfolio companies operating across 21 different industries. The investment portfolio at fair value was comprised of 93.2% first lien loans and 6.8% second lien loans. In addition, 99.5% of the company’s debt investments based on fair value were at floating rates and 0.5% were at fixed rates. There were no investments on non-accrual status.
During the second quarter of 2024, the company issued nearly 5.9 million of Class I common shares for proceeds of $165.2 million and 246,341 of Class S common shares for proceeds of $6.9 million. From July 1 through Aug. 7, the company received total proceeds of $71.5 million from common shareholders in connection with its public offering.
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