Why I'm Buying Blue Owl Capital Corp. III Over Blue Owl Capital Corp. In This Merger Arbitrage Opportunity (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Blue Owl Capital Corporation and Blue Owl Capital Corporation III may be losing deal share as the numbers and narratives show subdued new investment activity; which is unusual given ARCC's positive developments in this regard.
• A dovish rates environment can put pressure on investment yields and net investment income for the OBDC + OBDE portfolio.
• OBDC is trading at near cyclical peak valuations vs peers, making buys in that less attractive.
• But my merger arbitrage math says there may be a small edge in buying OBDE over OBDC.
• OBDE vs SPX 500 also shows a bullish breakout after a descending triangle squeeze. Hence, I am bullish on OBDE. Relative valuations of OBDE vs OBDC is a key risk monitorable for my view.

Read the full article here.