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Net investment income fell to $0.29 per share from $0.30 in the prior quarter, below the $0.35 base dividend. The board kept the fourth-quarter dividend unchanged, while management expects earnings to cover it by mid-2027 if the company deploys about $1.2 billion and raises leverage.
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New investment spreads widened to an average of 5.8%, up from 4.6% in late 2025. The quarter’s largest investment was part of a $2.4 billion GPU financing for IREN, with Blue Owl Technology Finance contributing $180 million and targeting a low-teens return.
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Credit indicators included non-accrual investments equal to 1.1% of portfolio fair value and payment-in-kind income at 11.5% of investment income. Software made up more than 70% of the portfolio, and management reported minimal evidence of material AI-related disruption among borrowers.
Blue Owl Technology Finance (NYSE:OTF) reported lower net investment income for the third quarter of 2026 but reiterated its expectation that earnings will cover its dividend by the middle of 2027, as it looks to expand its portfolio at wider lending spreads.
The business development company reported net investment income of $0.29 per share, down from $0.30 in the prior quarter and below its $0.35-per-share quarterly base dividend. Chief Financial Officer Jonathan Lamm said the decline reflected the effect of a new non-accrual investment, partly offset by modestly higher average leverage.
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Net asset value rose to $16.62 per share from $16.48 in the second quarter. Lamm attributed the increase to a recovery in portfolio valuations as spreads tightened and the broader software market rebounded, as well as $0.06 per share of accretion from stock repurchases.
Chief Executive Officer Craig Packer said sentiment toward software had improved as investors began distinguishing between companies positioned to benefit from artificial intelligence and those more vulnerable to disruption. He said public software equities had rallied approximately 35% from their April lows, while refinancing activity had picked up in the broadly syndicated loan market.
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The board declared an unchanged fourth-quarter base dividend of $0.35 per share, payable on or before January 15 to shareholders of record on December 31. Lamm said the company ended the quarter with approximately $0.35 per share of spillover income, supported by realized investment gains, including gains from SpaceX.
