Private Credit News Weekly Issue #89: Blue Owl Sells $1.4 Billion to Own Insurance Unit, Weinstein Swoops at 35% Discount
When redemptions hit, one lender sold loans to itself while an activist offers to buy shares at steep markdown to book value
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Blue Owl just demonstrated what happens when semi-liquid structures meet illiquid assets under pressure.
Facing a deadline to return cash to investors in Blue Owl Capital Corp II after scrapping a merger that would have cost investors 20%, the firm sold $1.4 billion in loans at 99.7% of par. The buyers: three of North America’s biggest pension funds and Kuvare, Blue Owl’s own insurance asset manager acquired in 2024 for $750 million.
The optics are striking. Blue Owl co-founder Craig Packer called the near-par sale “an extremely strong statement” that proves portfolio quality. Barclays warned the transaction could provide a template where debt held in publicly visible BDCs gets shifted into “more opaque and more highly leveraged vehicles.” Unlike BDCs with 1x leverage, CLOs typically run 9-10x leverage. “It would add additional leverage to private credit assets,” Barclays wrote.
Then Boaz Weinstein entered. His hedge fund Saba Capital Management and Cox Capital Partners launched a tender offer for Blue Owl BDC shares at 20-35% discount to the most recent estimated net asset value. Existing shareholders would have the option to sell to the firms, providing an exit at steep discount. “With rising redemptions and limited liquidity, private BDCs and interval funds are facing one of their toughest periods yet, leaving many investors with limited options,” Weinstein wrote.
The price any tender clears at will provide a window into where the market gauges actual value versus Blue Owl’s internal NAV. Steeply discounted exits could hurt future fundraising. Democratic Senator Elizabeth Warren seized on the news: “The Trump administration needs to wake up. Stop pushing these risky investments into Americans’ retirement accounts.”
Blue Owl shares closed the week at their lowest level since June 2023. The firm has decided to return 30% of OBDC II capital at book value in the next 45 days rather than resume quarterly 5% redemptions. Packer insisted: “We aren’t halting redemptions. We’re in fact accelerating redemptions.”
Meanwhile, traditional banks make contradictory moves. Bank of America committed $25 billion to private credit deals per internal memo, joining JPMorgan’s $50 billion allocation. But Bank of Ireland is withdrawing from US leveraged acquisition financing entirely, citing competition from direct lenders hindering its ability to earn higher returns. The Irish lender’s €1.2 billion loan book will run down over three years.
The software uncertainty continues. Private companies including McAfee, Rocket Software, and Perforce released earnings ahead of schedule to convince lenders of AI resilience. JPMorgan is preparing to raise $5.3 billion for Qualtrics’ purchase of Press Ganey, testing appetite for software debt. And Vantor came to market with $2.3 billion to refinance Sixth Street unitranche at 425-450 bps, sharply inside the original private credit pricing.
Blue Owl’s solution to its redemption crisis raises more questions than it answers. When the only way to meet withdrawals is selling assets to your own subsidiaries, the liquidity isn’t real. It’s an accounting exercise.
Key Market Themes
1. Blue Owl Sells $1.4 Billion in Loans to Own Insurance Unit Plus Pensions
Blue Owl found four buyers for $1.4 billion in loans to help pay out investors facing a deadline in Blue Owl Capital Corp II: California Public Employees’ Retirement System, Ontario Municipal Employees Retirement System, British Columbia Investment Management Corp, and Kuvare, Blue Owl’s own insurance asset manager. The firm sold the loans at 99.7% of par value.
The sale was evenly spread across three funds and part of a plan to return cash after scrapping a merger with a publicly traded vehicle that would have hit investors with losses of about 20%. Blue Owl acquired Kuvare Asset Management from Kuvare in a $750 million deal in 2024, which Blue Owl used to form Blue Owl Insurance Solutions. At that time, Kuvare Asset Management had around $20 billion in assets under management.
Blue Owl co-founder Craig Packer said bidder interest was so strong “they would have bought multiple amounts more.” He described the size and price as “an extremely strong statement,” even as investors dumped the firm’s stock on concerns about rising risks in private credit assets.
Why It Matters
The transaction highlights rising entanglement between private credit and insurance. Barclays warned the deal could provide a template where debt held in publicly visible BDCs gets shifted into more opaque and highly leveraged vehicles. Citing public disclosures, analysts said some assets being sold will likely make their way into Blue Owl-managed CLOs, a popular insurance investment because of high ratings and beneficial capital treatment. Unlike BDCs with 1x leverage, CLOs typically run 9-10x leverage. “It would add additional leverage to private credit assets,” Barclays wrote. Packer dismissed concerns: “The fact that one of the four might be a part of our insurance business, how is it reasonable that that would undermine the other 75% of the sales?”
2. Weinstein Launches Tender Offer at 20-35% Discount to Blue Owl NAV
Activist investor Boaz Weinstein’s Saba Capital Management and Cox Capital Partners launched a tender offer for Blue Owl BDC shares at 20-35% discount to the most recent estimated net asset value and dividend reinvestment price. That will be determined when tender offers start after a 10-business day notice period. Existing shareholders would have the option but no obligation to sell to the firms.
Saba and Cox sent notice to purchase OBDC II shares on February 17. They plan similar offers for Blue Owl Technology Income Corp and Blue Owl Credit Income Corp. The firms said the tender would “provide a liquidity solution to retail investors in the wake of a significant industry-wide increase in BDC redemption requests, multiple quarters of net outflows and a rise in redemption gate provisions.”
Weinstein, a Deutsche Bank alum who launched Saba in 2009, has sometimes positioned himself as a defender of retail investors. Cox Capital is an investor in dozens of private funds from BDCs to REITs, providing “secondary liquidity” to investors in alternative assets per its website.
Why It Matters
The price any tender clears at will provide a window into where the market gauges value versus Blue Owl’s internal NAV. Steeply discounted exits could hurt future fundraising. Michael Covello at Robert A. Stanger said for an investor saying “I’ve read all the headlines, I’m scared, I don’t care what it costs, I want to get out today,” the tender could be a good opportunity even with the discount. “But there’s a cost to liquidity.” The move comes days after Blue Owl restricted withdrawals from OBDC II. Investors in BDCs holding more than $1 billion asked to pull a total of more than $2.9 billion in Q4, up 200% from the prior period per Stanger data.
3. Bank of America Commits $25 Billion While Bank of Ireland Exits
Bank of America is committing $25 billion to private credit deals per internal memo, preparing a war chest to advance in the lucrative market. The move underscores a broader push from Wall Street giants including JPMorgan, which allocated $50 billion last year, and Goldman Sachs, which created a new division for the push.
Simultaneously, Bank of Ireland is withdrawing from the US market for leveraged acquisition financings as private credit chips away at fees historically collected by traditional banks. The Irish lender’s decision to wind down its loan book for US acquisition financings came after a review found heightened competition from direct lenders hindering its ability to earn higher returns.
Loans tied to US leveraged acquisition financings were the “biggest driver” for the bank’s €137 million impairment charge. The loan book, worth €1.2 billion in December, is expected to run down over three years. In the US, most leveraged finance deals are led by local banks, leaving fewer fees for European peers.
Why It Matters
The divergence reveals how private credit competition affects banks differently based on scale and geography. Bank of America deploying $25 billion demonstrates major US banks treating private credit as strategic priority rather than competitive threat. The partnership model with direct lenders on large deals creates fee-sharing opportunities. Bank of Ireland’s exit shows smaller or foreign banks struggling to compete as private credit reshapes leveraged finance. Bob Kricheff at Shenkman Capital Management: “Private credit has reshaped the landscape of leveraged finance, with reports indicating that it has grown to be at least as large as the leveraged loan market, and even larger when uninvested commitments are included.”
4. Private Software Firms Release Earnings Early to Calm Lender Nerves
A handful of private equity-backed software firms including McAfee released earnings ahead of schedule to convince lenders of resilience to AI disruption. McAfee told debt investors preliminary Q4 revenue was $626 million, little changed from the prior year. The firm, backed by Advent International and Permira, advanced earnings to provide clarity during market volatility.
Rocket Software, the Bain Capital-backed IT modernization firm, disclosed 2025 revenue rose 5.2% to about $1.4 billion compared with the year earlier. Clearlake Capital and Francisco Partners-backed Perforce Software reported slight decline in annual revenue to $644 million from $654 million in 2024. On a recent call, Perforce management detailed efforts to drive sales by embedding AI into products.
Cloudera, backed by Clayton Dubilier & Rice and KKR, highlighted recent momentum in a statement. The firm closed fiscal 2026 with strong Q4 “fueled by over 50% year-over-year growth in new and expansion business, robust annual recurring revenue growth.”
Why It Matters
The early earnings releases represent private companies adopting public company crisis management tactics. Software firms accelerating disclosure to reassure lenders demonstrates the pressure on portfolio companies as debt investors scrutinize AI exposure. McAfee’s roughly $2 billion unsecured bonds due 2030 rose to 85 cents on the dollar February 9 from 79.5 cents prior week, though have since dropped swept up by continued selloff. Rocket Software’s $2.7 billion term loan due 2028 was quoted around 97 cents. Cloudera’s $2.19 billion term loan due 2028 was quoted around 94 cents, up from 86.5 cents January 30. The willingness to share preliminary results signals companies prioritizing lender confidence over traditional disclosure schedules.
5. JPMorgan Tests Software Appetite With $5.3 Billion Qualtrics Deal
A lender group led by JPMorgan is preparing to raise $5.3 billion of debt to support Qualtrics International’s purchase of health-care survey firm Press Ganey Forsta. The package is expected to comprise a $3.3 billion leveraged loan issued in US dollars and euros, while another $2 billion could be sold in the high-yield bond market or to private credit firms. Proceeds will also refinance about $1.8 billion in Press Ganey’s debt. A deal could launch in March.
The lender group is looking to raise cash as wary investors assess how new AI models could disrupt software. Qualtrics, which makes online survey tools, agreed in October to buy Press Ganey in a deal valued at $6.75 billion. Silver Lake Management owns Qualtrics.
The financing talks come a week after direct lenders provided loans for two other software companies, Clearwater Analytics and OneStream, being acquired by private equity firms.
Why It Matters
The $5.3 billion Qualtrics financing tests whether syndicated markets can still absorb large software deals or if private credit dominates despite AI concerns. The structure offering flexibility to place $2 billion in either high-yield bonds or private credit reflects lenders hedging distribution risk. JPMorgan leading the deal signals banks remain willing to underwrite software despite selloff. The timing, coming after Clearwater Analytics and OneStream financings closed via direct lenders, creates comparison point for pricing and investor appetite. Success or failure will influence whether future software M&A leans on banks or private credit for financing.
6. Vantor Seeks $2.3 Billion Refi of Sixth Street Unitranche at Tighter Spreads
Vantor Holdings came to market with a $2.3 billion broadly syndicated term loan to refinance privately placed debt that supported Advent International’s buyout of the commercial earth imaging satellite operator. Goldman Sachs is leading the offering for Colorado-based Vantor, a provider of imagery to Google Maps.
Goldman was included along with Blackstone in a group of direct lenders led by Sixth Street on a $2.25 billion seven-year unitranche transaction that helped finance Advent’s $6.4 billion takeover of Vantor, formerly Maxar Intelligence, signed in May 2023. Initial price talk for the new loan was 425-450 bps over benchmark at discounted price of 98.5 cents on the dollar.
Vantor serves customers in defense, intelligence, and commercial sectors. Last year it launched an AI-powered service that can guide satellites to focus on developments on the ground without human touch.
Why It Matters
Vantor refinancing Sixth Street unitranche with broadly syndicated loan at 425-450 bps demonstrates banks winning back deals at materially tighter spreads than private credit. The original $2.25 billion seven-year unitranche pricing wasn’t disclosed but unitranches from that vintage typically priced 500+ bps. Saving 50-75+ bps on $2.3 billion represents $11-17 million annual interest savings. Goldman participating in both the original private credit deal and now leading the syndicated refi shows banks maintaining relationships while reclaiming economics. The transaction pattern, private credit financing buyouts then banks refinancing at lower spreads 18-24 months later, pressures direct lenders on both deployment and hold strategy.
7. Fortress Adds Unleveraged Sleeve to Fund V for Insurance Capital
Fortress Investment Group is adding an unleveraged sleeve to Fortress Lending Fund V to lure insurance companies and European institutional investors. The previous vintages of the strategy offered a single version using leverage. Fortress, backed by a consortium led by Abu Dhabi sovereign wealth fund Mubadala, expects to double assets under management to $100 billion by 2029 in part by attracting insurance and wealth management firms.
The firm seeks to raise at least $3 billion for Fund V. The leveraged version will invest in a mix of direct corporate loans and asset-based lending. The unlevered version will focus more on direct corporate loans. Fortress is targeting net IRR for the leveraged version in a range of around 11-14%. The unleveraged version is expected to reach net IRR of around 8-9%.
Recent deals under this strategy include Fortress leading a $500 million private loan to refinance existing debt at Blue Raven Solutions. Last year, Fortress provided a forward-flow agreement to purchase up to $1.2 billion of consumer loans from AI-lending marketplace Upstart.
Why It Matters
Fortress adding unleveraged sleeve targeting 8-9% net IRR reflects adaptation to insurance demand for unlevered strategies offering beneficial capital treatment. Insurers increasingly allocate to private credit but face regulatory capital charges on leveraged structures. The unleveraged option allows insurance participation without leverage-related capital hits. The 11-14% levered target versus 8-9% unlevered suggests Fortress using roughly 2-3x leverage on the traditional sleeve. Growth in global private credit fundraising cooled to 3.2% in 2025 from 9.7% prior year per S&P Global Market Intelligence. Managers adapting structures to insurance preferences demonstrates product evolution as institutional appetite moderates.
Deals of Note
Qualtrics - JPMorgan preparing to raise $5.3B comprising $3.3B leveraged loan in USD and euros plus $2B for high-yield bond market or private credit to support Press Ganey purchase, refinance $1.8B existing debt
Vantor - Goldman Sachs leading $2.3B broadly syndicated term loan at 425-450 bps over benchmark to refinance Sixth Street unitranche that supported Advent’s $6.4B acquisition
EG A/S - Ares leading approximately €1.4B private credit financing for Scandinavian software business
Synera Renewable Energy - Stonepeak portfolio company seeking $800M private credit for offshore wind farm project in Taiwan
Elara Caring - HPS Investment Partners led roughly $700M private credit deal for home health-care provider
Aidacare - Bain Capital Credit and UBS lending combined $382M to Australian health-equipment manufacturer
The Reality Check
Blue Owl selling $1.4 billion in loans to meet redemptions would be unremarkable except one buyer was Kuvare, its own insurance subsidiary. When you need to sell assets to yourself to meet withdrawals, the liquidity isn’t real. Barclays warned the template shifts debt from BDCs with 1x leverage into CLOs with 9-10x leverage. Each layer amplifies returns in good times and losses in bad.
Boaz Weinstein offering 20-35% discounts to NAV provides the market’s verdict on Blue Owl’s book values. The discount isn’t small. It’s massive. And it exists because investors would rather take the loss than wait to see what NAVs become under continued pressure. Investors pulling $2.9 billion from BDCs in Q4, up 200% from prior quarter, demonstrates retail exits accelerating industrywide.
Vantor refinancing Sixth Street unitranche at 425-450 bps, likely 50-75+ bps inside original pricing, demonstrates the pattern pressuring private credit. Direct lenders finance buyouts at 500+ bps, banks refinance 18-24 months later saving borrowers millions annually. The model works if you plan to syndicate in three months, not hold seven years. Bank of America committing $25 billion while Bank of Ireland exits shows scale separating winners from losers in the new competitive landscape.
The semi-liquid structure only works when redemptions stay under 5% quarterly. Once they spike, managers face impossible choices: sell to your own subsidiaries at par, gate investors and destroy credibility, or accept Weinstein’s tender at 35% discount. Blue Owl chose option one. Shareholders are choosing option three. Neither inspires confidence in the model.
