Owl Rock Technology Finance Corp. II 10Q 2022 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________________________________

FORM 10-Q

______________________________________________________________________________


(Mark One)
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the period ended September 30, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-55977

______________________________________________________________________________

OWL ROCK TECHNOLOGY FINANCE CORP. II

(Exact name of Registrant as specified in its Charter)

______________________________________________________________________________


Maryland (State or other jurisdiction of incorporation or organization)						87-2993019 (I.R.S. Employer Identification No.)

399 Park Avenue, 38th Floor, New York, New York (Address of principal executive offices)						10022 (Zip Code)

Registrant’s telephone number, including area code: (212) 419-3000

______________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o

Indicate by check mark whether the Registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES o NO o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Emerging growth company x

Small reporting company o

Non-accelerated filer x

Accelerated filer o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

As of November 10, 2022, the registrant had 70,962,935 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements	3
	Consolidated Statements of Assets and Liabilities as of Septem ber 30, 2022 (Unaudited) and December 31, 2021	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 (Unaudited)	4
	Consolidated Schedules of Investments as of September 30, 2022 (Unaudited)	5
	Consolidated Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2022 (Unaudited)	12
	Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2022 (Unaudited)	13
	Notes to Consolidated Financial Statements (Unaudited)	14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57
Item 4.	Controls and Procedures	58

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities	59
Item 4.	Mine Safety Disclosures	59
Item 5.	Other Information	59
Item 6.	Exhibits	60
Signatures		61

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about Owl Rock Technology Finance Corp. II (the “Company,” “we” or “our”), our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

•an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

•an economic downturn could disproportionately impact the companies that we intend to target for investment, potentially causing us to experience a decrease in investment opportunities and diminished demand for capital from these companies;

•an economic downturn could also impact availability and pricing of our financing and our ability to access the debt and equity capital markets;

•a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities;

•the impact of the “COVID-19” pandemic, changes in base interest rates and significant market volatility on our business and our portfolio companies (including our business prospects and the prospects of our portfolio companies including the ability to achieve our and their business objectives), our industry and the global economy including as a result of ongoing supply chain disruptions;

•interest rate volatility, including the decommissioning of LIBOR, could adversely affect our results, particularly because we use leverage as part of our investment strategy;

•currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

•our future operating results;

•the impact of rising interest and inflation rates and the risk of recession on our business prospects and the prospects of our portfolio companies; our contractual arrangements and relationships with third parties;

•the ability of our portfolio companies to achieve their objectives;

•competition with other entities and our affiliates for investment opportunities;

•the speculative and illiquid nature of our investments;

•the use of borrowed money to finance a portion of our investments as well as any estimates regarding potential use of leverage;

•the adequacy of our financing sources and working capital;

•the loss of key personnel;

•the timing of cash flows, if any, from the operations of our portfolio companies;

•the ability of Owl Rock Technology Advisors II LLC (“the Adviser” or “our Adviser”) to locate suitable investments for us and to monitor and administer our investments;

•the ability of the Adviser to attract and retain highly talented professionals;

•our ability to qualify for and maintain our tax treatment as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and as a business development company (“BDC”);

•the impact that environmental, social and governance matters could have on our brand and reputation and our portfolio companies;

•the effect of legal, tax and regulatory changes including the recently announced Inflation Reduction Act of 2022;

•the impact of geo-political conditions, including revolution, insurgency, terrorism or war, including those arising out of the ongoing conflict between Russia and Ukraine and general uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union and China; and

•other risks, uncertainties and other factors previously identified in the reports and other documents we have filed with the Securities and Exchange Commission (“SEC”).

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. These forward-looking statements apply only as of the date of this report. Moreover, we assume no duty and do not undertake to update the forward-looking statements. Because we

are an investment company, the forward-looking statements and projections contained in this report are excluded from the safe harbor protection provided by Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).

PART I. CONSOLIDATED FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Owl Rock Technology Finance Corp. II

Consolidated Statement of Assets and Liabilities

(Amounts in thousands, except share and per share amounts)


	September 30, 2022		December 31,
	(Unaudited)		2021
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost of $1,678,979)	$	1,662,952	$	—
Non-controlled, affiliated investments (amortized cost of $2,600)	2,600		—
Total investments at fair value (amortized cost of $1,681,579)	1,665,552		—
Cash	20,820		44,830
Interest receivable	12,310		—


Subscription receivable	839		—
Prepaid expenses and other assets	344		123
Total Assets	$	1,699,865	$	44,953
Liabilities
Debt (net of unamortized debt issuance costs of $14,758)	$	666,321	$	—
Management fee payable	7,142		394
Distribution payable	3,634		—
Incentive fee payable	1,323		—
Payables to affiliates	1,215		198

Accrued expenses and other liabilities	3,206		343
Total Liabilities	$	682,841	$	935
Commitments and contingencies (Note 7)
Net Assets
Common shares $0.01 par value, 500,000,000 shares authorized; 70,962,935 and 3,000,100 shares issued and outstanding, respectively	$	710	$	30
Additional paid-in-capital	1,018,640		44,332
Total accumulated undistributed (overdistributed) earnings	(2,326)		(344)
Total Net Assets	1,017,024		44,018
Total Liabilities and Net Assets	$	1,699,865	$	44,953
Net Asset Value Per Share	$	14.33	$	14.67

The accompanying notes are an integral part of these consolidated financial statements.

Owl Rock Technology Finance Corp. II

Consolidated Statement of Operations

(Amounts in thousands, except share and per share amounts)

(Unaudited)


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2022			2022
Investment Income
Investment income from non-controlled, non-affiliated investments:
Interest income	$	21,677		$	27,780
Payment-in-kind interest income	1,557			2,484
Payment-in-kind dividend income	4,552			8,226
Other income	3,012			3,192
Total investment income from non-controlled, non-affiliated investments	30,798			41,682






Total Investment Income	30,798			41,682
Expenses
Interest expense	$	8,707		$	11,202
Management fees	7,142			13,278
Incentive fees	1,323			1,323
Offering expenses	120			238
Professional fees	620			1,221
Directors' fees	277			817

Other general and administrative	691			1,566
Total Expenses	18,880			29,645
Net Investment Income (Loss) Before Taxes	11,918			12,037
Excise tax expense	13			13
Net Investment Income (Loss) After Taxes	11,905			12,024
Net Change in Unrealized Gain (Loss)
Non-controlled, non-affiliated investments	$	(851)		$	(10,026)

Translation of assets and liabilities in foreign currencies	(286)			(443)
Total Net Change in Unrealized Gain (Loss)	(1,137)			(10,469)
Net Realized Gain (Loss):
Non-controlled, non-affiliated investments	$	—		$	24

Foreign currency transactions	70			74
Total Net Realized Gain (Loss)	70			98
Total Net Realized and Change in Unrealized Gain (Loss)	$	(1,067)		$	(10,371)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	10,838		$	1,653
Earnings (Loss) Per Share - Basic and Diluted	$	0.24		$	0.06
Weighted Average Shares Outstanding - Basic and Diluted	45,724,093			25,681,701

The accompanying notes are an integral part of these consolidated financial statements.

Owl Rock Technology Finance Corp. II

Consolidated Schedule of Investments

As of September 30, 2022

(Amounts in thousands, except share amounts)

(Unaudited)


Company(1)(4)(24)	Investment	Interest	Maturity Date	Par / Units		Amortized Cost(2)(3)		Fair Value		Percentage of Net Assets
Non-controlled/non-affiliated portfolio company investments
Debt Investments
Aerospace & defense
ManTech International Corporation(6)(10)(19)	First lien senior secured loan	S + 5.75%	9/14/2029	$	67,700	$	66,354	$	66,346	6.5	%
ManTech International Corporation(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 5.75%	9/16/2024	—		(159)		(160)		—	%
ManTech International Corporation(6)(10)(16)(19)	First lien senior secured revolving loan	S + 5.75%	9/14/2028	1,345		1,175		1,173		0.1	%


				69,045		67,370		67,359		6.6	%
Application Software
Anaplan, Inc.(6)(10)(19)	First lien senior secured loan	S + 6.50%	6/21/2029	$	130,890	$	129,621	$	130,563	12.8	%
Anaplan, Inc.(6)(16)(17)(19)	First lien senior secured revolving loan	S + 6.50%	6/21/2028	—		(90)		(24)		—	%
Armstrong Bidco Limited(6)(14)(19)(22)	First lien senior secured loan	SA + 5.75%	6/28/2029	5,932		6,379		5,843		0.6	%
Armstrong Bidco Limited(6)(14)(16)(18)(19)(22)	First lien senior secured delayed draw term loan	SA + 5.75%	6/30/2025	1,020		1,096		1,004		0.1	%
Community Brands ParentCo, LLC(6)(10)(19)	First lien senior secured loan	S + 5.75%	2/24/2028	12,686		12,456		12,369		1.2	%
Community Brands ParentCo, LLC(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 5.75%	2/26/2024	—		(14)		(23)		—	%
Community Brands ParentCo, LLC(6)(16)(17)(19)	First lien senior secured revolving loan	S + 5.75%	2/24/2028	—		(14)		(19)		—	%
Fullsteam Operations, LLC(6)(8)(16)(18)(19)	First lien senior secured delayed draw term loan	L + 8.78% (incl. 5.78% PIK)	5/13/2024	15,709		14,941		15,262		1.5	%
Grayshift, LLC(6)(10)(19)	First lien senior secured loan	S + 7.50%	7/6/2028	54,058		53,535		53,517		5.3	%
Grayshift, LLC(6)(16)(17)(19)	First lien senior secured revolving loan	S + 7.50%	7/6/2028	—		(56)		(58)		—	%
				220,295		217,854		218,434		21.5	%
Beverages
Innovation Ventures HoldCo, LLC (dba 5 Hour Energy)(6)(10)(19)	First lien senior secured loan	S + 6.25%	3/11/2027	10,000		9,827		9,725		1.0	%


				10,000		9,827		9,725		1.0	%










Commercial Services & Supplies
SimpliSafe Holding Corporation(6)(10)(19)	First lien senior secured loan	S + 6.25%	4/30/2027	20,525		20,138		20,268		2.0	%
SimpliSafe Holding Corporation(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 6.25%	5/2/2024	—		(24)		(6)		—	%

				20,525		20,114		20,262		2.0	%
Construction & Engineering
Dodge Construction Network LLC(6)(12)(19)	First lien senior secured loan	S + 4.75%	2/23/2029	9,975		9,835		9,277		0.9	%


				9,975		9,835		9,277		0.9	%
Consumer Finance
Affirm, Inc.(5)(19)(22)	Senior convertible notes	N/A	11/16/2026	25,000		17,089		15,323		1.5	%


				25,000		17,089		15,323		1.5	%
Diversified Consumer Services
Sophia, L.P.(6)(10)(19)	First lien senior secured loan	S + 4.00%	10/7/2027	9,975		9,882		9,950		1.0	%



				9,975		9,882		9,950		1.0	%

Owl Rock Technology Finance Corp. II

Consolidated Schedule of Investments

As of September 30, 2022

(Amounts in thousands, except share amounts)

(Unaudited)


Company(1)(4)(24)	Investment	Interest	Maturity Date	Par / Units	Amortized Cost(2)(3)	Fair Value	Percentage of Net Assets
Diversified Financial Services
Hg Genesis 9 SumoCo Limited(6)(13)(19)(22)	Unsecured facility	E + 7.00% PIK	3/10/2027	40,616	45,447	40,616	4.0	%
Smarsh Inc.(6)(11)(19)	First lien senior secured loan	S + 6.50%	2/16/2029	25,905	25,664	25,516	2.5	%
Smarsh Inc.(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 6.50%	2/19/2024	—	(30)	(32)	—	%
Smarsh Inc.(6)(16)(17)(19)	First lien senior secured revolving loan	S + 6.50%	2/16/2029	—	(15)	(24)	—	%
				66,521	71,066	66,076	6.5	%
Diversified Support Services
CoreTrust Purchasing Group LLC(6)(10)(19)	First lien senior secured loan	S + 6.75%	10/1/2029	26,021	25,502	25,501	2.5	%
CoreTrust Purchasing Group LLC(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 6.75%	9/30/2024	—	(19)	(19)	—	%
CoreTrust Purchasing Group LLC(6)(16)(17)(19)	First lien senior secured revolving loan	S + 6.75%	10/1/2029	—	(76)	(76)	—	%
				26,021	25,407	25,406	2.5	%
Electrical Equipment
BCPE Watson (DE) ORML, LP(6)(12)(19)(22)(25)	First lien senior secured loan	S + 6.50%	7/1/2028	125,000	123,790	123,750	12.2	%


				125,000	123,790	123,750	12.2	%





Food & Staples Retailing
The NPD Group, L.P.(6)(10)(19)	First lien senior secured loan	S + 6.25% (incl. 2.75% PIK)	12/1/2028	141,274	138,412	138,335	13.6	%
The NPD Group, L.P.(6)(16)(17)(19)	First lien senior secured revolving loan	S + 5.75%	12/1/2027	—	(175)	(188)	—	%




				141,274	138,237	138,147	13.6	%
Health Care Providers & Services
Diagnostic Services Holdings, Inc. (dba Rayus Radiology)(6)(7)(19)	First lien senior secured loan	L + 5.50%	3/17/2025	9,981	9,981	9,931	1.0	%
Engage Debtco Limited(6)(11)(19)(22)	First lien senior secured loan	S + 5.75%	7/13/2029	20,000	19,512	19,500	1.9	%
Natural Partners, LLC(6)(9)(19)(22)	First lien senior secured loan	L + 6.00%	11/29/2027	9,267	9,098	9,058	0.9	%
Natural Partners, LLC(6)(16)(17)(19)(22)	First lien senior secured revolving loan	L + 6.00%	11/29/2027	—	(12)	(15)	—	%
TC Holdings, LLC (dba TrialCard)(6)(11)(19)	First lien senior secured loan	S + 5.00%	4/14/2027	8,906	8,824	8,884	0.9	%
TC Holdings, LLC (dba TrialCard)(6)(16)(17)(19)	First lien senior secured revolving loan	S + 5.00%	4/14/2027	—	(10)	(3)	—	%



				48,154	47,393	47,355	4.7	%
Health Care Technology
Iconic IMO Merger Sub, Inc.(6)(11)(19)	First lien senior secured loan	S + 6.00%	5/11/2029	20,846	20,447	20,585	2.0	%
Iconic IMO Merger Sub, Inc.(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 6.00%	5/13/2024	—	(47)	(12)	—	%
Iconic IMO Merger Sub, Inc.(6)(11)(16)(19)	First lien senior secured revolving loan	S + 6.00%	5/11/2028	298	251	267	—	%
Imprivata, Inc.(6)(10)(19)	Second lien senior secured loan	S + 6.25%	12/1/2028	17,647	17,470	17,338	1.7	%
Interoperability Bidco, Inc. (dba Lyniate)(6)(11)(19)	First lien senior secured loan	S + 7.00%	12/28/2026	28,552	28,387	28,267	2.8	%
Interoperability Bidco, Inc. (dba Lyniate)(6)(16)(17)(19)	First lien senior secured revolving loan	S + 7.00%	12/26/2024	—	(6)	(13)	—	%

Owl Rock Technology Finance Corp. II

Consolidated Schedule of Investments

As of September 30, 2022

(Amounts in thousands, except share amounts)

(Unaudited)


Company(1)(4)(24)	Investment	Interest	Maturity Date	Par / Units	Amortized Cost(2)(3)	Fair Value	Percentage of Net Assets
PointClickCare Technologies, Inc.(6)(11)(19)(22)	First lien senior secured loan	S + 4.00%	12/29/2027	9,950	9,813	9,776	1.0	%


				77,293	76,315	76,208	7.5	%















Insurance
AmeriLife Holdings LLC(6)(11)(19)	First lien senior secured loan	S + 5.75%	8/31/2029	18,182	17,821	17,818	1.8	%
AmeriLife Holdings LLC(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 5.75%	9/2/2024	—	(45)	(45)	—	%
AmeriLife Holdings LLC(6)(16)(17)(19)	First lien senior secured revolving loan	S + 5.75%	8/31/2028	—	(45)	(45)	—	%
				18,182	17,731	17,728	1.8	%





IT Services
Kaseya Inc.(6)(12)(19)	First lien senior secured loan	S + 5.75%	6/25/2029	78,050	76,535	77,074	7.6	%
Kaseya Inc.(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 5.75%	6/24/2024	—	(45)	(12)	—	%
Kaseya Inc.(6)(16)(17)(19)	First lien senior secured revolving loan	S + 5.75%	6/25/2029	—	(91)	(59)	—	%

				78,050	76,399	77,003	7.6	%





Pharmaceuticals
Foundation Consumer Brands, LLC(6)(8)(19)	First lien senior secured loan	L + 5.50%	2/12/2027	8,825	8,827	8,781	0.9	%
Pacific BidCo Inc.(6)(11)(19)(22)	First lien senior secured loan	S + 5.75%	8/13/2029	8,590	8,379	8,375	0.8	%
Pacific BidCo Inc.(6)(16)(17)(18)(19)(22)	First lien senior secured delayed draw term loan	S + 5.75%	8/11/2025	—	(12)	(12)	—	%
				17,415	17,194	17,144	1.7	%





Specialty Retail
CDK Global, Inc.(5)(6)(11)(19)	First lien senior secured loan	S + 4.50%	7/6/2029	20,000	19,416	19,230	1.9	%
Vermont Aus Pty Ltd(6)(11)(19)(22)	First lien senior secured loan	S + 5.50%	3/22/2028	9,950	9,720	9,676	1.0	%

				29,950	29,136	28,906	2.9	%
Systems Software


Appfire Technologies, LLC(6)(11)(16)(19)	First lien senior secured revolving loan	S + 5.50%	3/9/2027	66	54	60	—	%
Appfire Technologies, LLC(6)(16)(17)(18)(19)	First lien senior secured delayed draw term loan	S + 5.50%	6/14/2024	—	(64)	—	—	%
Barracuda Networks, Inc.(5)(6)(10)(19)	First lien senior secured loan	S + 4.50%	8/15/2029	45,000	43,668	42,219	4.2	%
Barracuda Networks, Inc.(6)(10)(19)	Second lien senior secured loan	S + 7.00%	8/15/2030	55,875	54,214	52,243	5.1	%
Delta TopCo, Inc. (dba Infoblox, Inc.)(6)(9)(19)	Second lien senior secured loan	L + 7.25%	12/1/2028	24,464	21,325	22,629	2.2	%
Help/Systems Holdings, Inc.(6)(10)(19)	Second lien senior secured loan	S + 6.75%	11/19/2027	20,000	19,802	18,600	1.8	%
Rubrik, Inc.(6)(12)(19)	First lien senior secured loan	S + 6.50%	6/10/2027	28,269	27,732	27,987	2.8	%
Rubrik, Inc.(6)(12)(16)(19)	First lien senior secured delayed draw term loan	S + 7.00%	6/10/2027	590	590	557	0.1	%
SailPoint Technologies Holdings, Inc.(6)(10)(19)	First lien senior secured loan	S + 6.25%	8/15/2029	136,920	134,064	134,031	13.2	%
SailPoint Technologies Holdings, Inc.(6)(16)(17)(19)	First lien senior secured revolving loan	S + 6.25%	8/15/2028	—	(256)	(276)	—	%
Securonix, Inc.(6)(11)(19)	First lien senior secured loan	S + 6.50%	4/5/2028	19,774	19,589	19,725	1.9	%

Owl Rock Technology Finance Corp. II

Consolidated Schedule of Investments

As of September 30, 2022

(Amounts in thousands, except share amounts)

(Unaudited)


Company(1)(4)(24)	Investment	Interest	Maturity Date	Par / Units		Amortized Cost(2)(3)		Fair Value		Percentage of Net Assets
Securonix, Inc.(6)(16)(17)(19)	First lien senior secured revolving loan	S + 6.50%	4/5/2028	—		(33)		(9)		—	%
Talon MidCo 2 Limited(6)(10)(19)(22)	First lien senior secured loan	S + 7.69%	8/25/2028	27,381		26,840		26,833		2.6	%
Talon MidCo 2 Limited(6)(10)(16)(18)(19)(22)	First lien senior secured delayed draw term loan	S + 7.69%	8/26/2024	67		67		59		—	%
Talon MidCo 2 Limited(6)(16)(17)(19)(22)	First lien senior secured revolving loan	S + 7.00%	8/25/2028	—		(27)		(27)		—	%




				358,406		347,565		344,631		33.9	%





Total non-controlled/non-affiliated portfolio company debt investments				$	1,351,081	$	1,322,204	$	1,312,684	129.4	%

Equity Investments





Application Software
Project Alpine Co-Invest Fund, LP(19)(20)(22)(23)	LP Interest	N/A	N/A	9,695,168		9,695		9,690		1.0	%


						9,695		9,690		1.0	%















Capital Markets
Acorns Grow Incorporated(15)(20)(22)	Series F Preferred Stock	5.00% PIK	N/A	572,135		10,321		10,288		1.0	%


						10,321		10,288		1.0	%















Diversified Financial Services
Amergin Asset Management, LLC(19)(20)(22)(23)	Class A Units	N/A	N/A	50,000,000		—		—		—	%


						—		—		—	%















Health Care Technology
BEHP Co-Investor II, L.P.(19)(20)(22)(23)	LP Interest	N/A	N/A	1,269,969		1,266		1,270		0.1	%
Orange Blossom Parent, Inc.(19)(20)(23)	Common Stock	N/A	N/A	16,667		1,667		1,667		0.2	%
Minerva Holdco, Inc.(15)(19)(20)	Series A Preferred Stock	10.75% PIK	N/A	50,000		52,488		47,688		4.7	%
WP Irving Co-Invest, L.P.(19)(20)(22)(23)	Partnership Units	N/A	N/A	1,250,000		1,250		1,250		0.1	%
						56,671		51,875		5.1	%




















Insurance
Accelerate Topco Holdings, LLC(19)(20)(23)	LLC Interest	N/A	N/A	12,320		340		340		—	%
Coherent Group Limited(20)(22)(23)	Series B Preferred Shares	N/A	N/A	153,095		16,002		16,000		1.6	%

						16,342		16,340		1.6	%





IT Services
Knockout Intermediate Holdings I Inc. (dba Kaseya Inc.)(15)(19)(20)	Perpetual Preferred Stock	11.75% PIK	N/A	62,500		60,978		61,563		6.1	%


						60,978		61,563		6.1	%















Systems Software
6sense Insights, Inc.(19)(20)(23)	Series E-1 Preferred Stock	N/A	N/A	316,128		10,001		9,711		1.0	%
Axonius, Inc.(20)(23)	Series E Preferred Stock	N/A	N/A	866,637		10,032		10,000		1.0	%
Elliott Alto Co-Investor Aggregator L.P.(19)(20)(22)(23)	LP Interest	N/A	N/A	13,060		13,098		13,060		1.3	%
Halo Parent Newco, LLC(15)(20)	Class H PIK Preferred Equity	11.00% PIK	N/A	40,000		41,683		39,791		3.9	%
Picard Holdco, LLC(15)(19)(20)	Series A Preferred Stock	12.00% PIK	N/A	102,985		99,893		99,896		9.8	%

Project Hotel California Co-Invest Fund, L.P.(19)(20)(22)(23)	LP Interest	N/A	N/A	8,060,655		8,061		8,054		0.8	%

Owl Rock Technology Finance Corp. II

Consolidated Schedule of Investments

As of September 30, 2022

(Amounts in thousands, except share amounts)

(Unaudited)


Company(1)(4)(24)	Investment	Interest	Maturity Date	Par / Units	Amortized Cost(2)(3)		Fair Value		Percentage of Net Assets
Securiti, Inc.(19)(20)(23)	Series C Preferred Shares	N/A	N/A	2,525,571	20,000		20,000		2.0	%


					202,768		200,512		19.8	%










Total non-controlled/non-affiliated portfolio company equity investments					$	356,775	$	350,268	34.6	%
Total non-controlled/non-affiliated portfolio company investments					$	1,678,979	$	1,662,952	164.0	%

Non-controlled/affiliated portfolio company investments
Equity Investments

Diversified Financial Services
AAM Series 2.1 Aviation Feeder, LLC(16)(19)(20)(22)(23)	LLC Interest	N/A	N/A	304,000	304		304		—	%
AAM Series 1.1 Rail and Domestic Intermodal Feeder, LLC(16)(19)(20)(22)(23)	LLC Interest	N/A	N/A	—	—		—		—	%

					304		304		—	%
Insurance
Chapford SMA Partnership, L.P.(16)(19)(20)(22)(23)(25)	LP Interest	N/A	N/A	2,296,000	2,296		2,296		0.2	%


					2,296		2,296		0.2	%
Total non-controlled/affiliated portfolio company equity investments					$	2,600	$	2,600	0.2	%
Total non-controlled/affiliated portfolio company investments					$	2,600	$	2,600	0.2	%
Total Investments					$	1,681,579	$	1,665,552	164.2	%

(1)Certain portfolio company investments are subject to contractual restrictions on sales.

(2)The amortized cost represents the original cost adjusted for the amortization and accretion of premiums and discounts, as applicable, on debt investments using the effective interest method.

(3)As of September 30, 2022, the net estimated unrealized loss for U.S. federal income tax purposes was $9.8 million based on a tax cost basis of $1.7 billion. As of September 30, 2022, the estimated aggregate gross unrealized loss for U.S. federal income tax purposes was $14.6 million and the estimated aggregate gross unrealized gain for U.S. federal income tax purposes was $4.8 million.

(4)Unless otherwise indicated, all investments are considered Level 3 investments.

(5)Level 2 investment.

(6)Loan contains a variable rate structure and may be subject to an interest rate floor. Variable rate loans bear interest at a rate that may be determined by reference to either the London Interbank Offered Rate (“LIBOR” or “L”, which can include one-, three-, six- ot twelve- month LIBOR), Secured Overnight Financing Rate ("SOFR" or "SR," which can include one-, three- or six- month SOFR), Euro Interbank Offered Rate (“EURIBOR” or “E”, which can include three- or six-month EURIBOR), SONIA ("SONIA” or "SA") or an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate), at the borrower’s option, and which reset periodically based on the terms of the loan agreement.

(7)The interest rate on these loans is subject to 1 month LIBOR, which as of September 30, 2022 was 3.14%.

(8)The interest rate on these loans is subject to 3 month LIBOR, which as of September 30, 2022 was 3.75%.

(9)The interest rate on these loans is subject to 6 month LIBOR, which as of September 30, 2022 was 4.23%.

(10)The interest rate on these loans is subject to 1 month SOFR, which as of September 30, 2022 was 3.04%.

(11)The interest rate on these loans is subject to 3 month SOFR, which as of September 30, 2022 was 3.59%.

(12)The interest rate on these loans is subject to 6 month SOFR, which as of September 30, 2022 was 3.99%.

(13)The interest rate on this loan is subject to 3 month EURIBOR, which as of September 30, 2022 was 1.17%.

(14)The interest rate on this loan is subject to SONIA, which as of September 30, 2022 was 2.19%.

(15)Contains a fixed-rate structure.

(16)Position or portion thereof is an unfunded loan or equity commitment. See Note 7 “Commitments and Contingencies”.

(17)The negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan. The negative fair value is the result of the capitalized discount on the loan.

(18)The date disclosed represents the commitment period of the unfunded term loan. Upon expiration of the commitment period, the funded portion of the term loan may be subject to a longer maturity date.

(19)Represents co-investment made with the Company’s affiliates in accordance with the terms of the exemptive relief that the Company received from the U.S. Securities and Exchange Commission. See Note 3 “Agreements and Related Party Transactions.”

(20)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of September 30, 2022, the aggregate fair value of these securities is $352.9 million or 34.7% of the Company’s net assets. The acquisition dates of the restricted securities are as follows:

Owl Rock Technology Finance Corp. II

Consolidated Schedule of Investments

As of September 30, 2022

(Amounts in thousands, except share amounts)

(Unaudited)

Portfolio Company

Investment

Acquisition Date

6sense Insights, Inc.

Series E-1 Preferred Stock

January 20, 2022

AAM Series 1.1 Rail and Domestic Intermodal Feeder, LLC

LLC Interest

July 01, 2022

AAM Series 2.1 Aviation Feeder, LLC

LLC Interest

July 01, 2022

Accelerate Topco Holdings, LLC

LLC Interest

September 01, 2022

Acorns Grow Incorporated

Series F Preferred Stock

March 08, 2022

Amergin Asset Management, LLC

Class A Units

July 01, 2022

Axonius, Inc.

Series E Preferred Stock

March 11, 2022

BEHP Co-Investor II, L.P.

LP Interest

May 06, 2022

Chapford SMA Partnership, L.P.

LP Interest

July 18, 2022

Coherent Group Limited

Series B Preferred Shares

April 21, 2022

Elliott Alto Co-Investor Aggregator L.P.

LP Interest

September 28, 2022

Halo Parent Newco, LLC

Class H PIK Preferred Equity

February 22, 2022

Orange Blossom Parent, Inc.

Common Stock

July 29, 2022

Knockout Intermediate Holdings I Inc. (dba Kaseya Inc.)

Perpetual Preferred Stock

June 23, 2022

Minerva Holdco, Inc.

Series A Preferred Stock

February 15, 2022

Picard Holdco, LLC

Series A Preferred Stock

September 29, 2022

Project Alpine Co-Invest Fund, LP

LP Interest

June 13, 2022

Project Hotel California Co-Invest Fund, L.P.

LP Interest

August 09, 2022

Securiti, Inc.

Series C Preferred Shares

July 29, 2022

WP Irving Co-Invest, L.P.

Partnership Units

May 18, 2022

(21)Under the Investment Company Act of 1940, as amended (the "1940 Act"), the Company is deemed to be an "Affiliated Person" of, as defined in the 1940 Act, this portfolio company, as the Company owns more than 5% but less than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company, including through a management agreement. Transactions during the nine months ended September 30, 2022 in which the Company was an Affiliated Person of the portfolio company are as follows:


($ in thousands)	Fair Value at December 31, 2021		Gross Additions (a)		Gross Reductions (b)		Net Change in Unrealized Gain/(Loss)		Fair Value at September 30, 2022		Interest Income		Dividend Income		Other Income
Non-Controlled Affiliates
AAM Series 2.1 Aviation Feeder, LLC(c)	$	—	$	304	$	—	$	—	$	304	$	—	$	—	$	—
AAM Series 1.1 Rail and Domestic Intermodal Feeder, LLC(c)	—		—		—		—		—		—		—		—
Chapford SMA Partnership, L.P.	—		2,296		—		—		2,296		—		—		—
Total Non-Controlled Affiliates	$	—	$	2,600	$	—	$	—	$	2,600	$	—	$	—	$	—

(a)Gross additions include increases in the cost basis of investments resulting from new investments, payment-in-kind interest or dividends, and the amortization of any unearned income or discounts on equity investments, as applicable.

(b)Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, and the amortization of any premiums on equity investments, as applicable.

(c)In connection with its investment in AAM Series 1.1 Rail and Domestic Intermodal Feeder, LLC and AAM Series 2.1 Aviation Feeder, LLC (collectively, “Amergin AssetCo”) the Company made a minority investment in Amergin Asset Management, LLC which has entered into a Servicing Agreement with Amergin AssetCo.

(22)This portfolio company is not a qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of total assets. As of September 30, 2022, non-qualifying assets represented 19.4% of total assets as calculated in accordance with the regulatory requirements.

(23)Investment is non-income producing.

(24)Unless otherwise indicated, the Company’s portfolio companies are pledged as collateral supporting the amounts outstanding under the Revolving Credit Facility and SPV Asset Facilities. See Note 6 “Debt”.

(25)Investment is not pledged as collateral for the credit facilities.

Owl Rock Technology Finance Corp. II

Consolidated Schedule of Investments

As of September 30, 2022

(Amounts in thousands, except share amounts)

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

Owl Rock Technology Finance Corp. II

Consolidated Statement of Changes in Net Assets

(Amounts in thousands)

(Unaudited)


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2022			2022
Increase (Decrease) in Net Assets Resulting from Operations
Net investment income (loss)	$	11,905		$	12,024
Net change in unrealized gain (loss)	(1,137)			(10,469)
Net realized gain (loss)	70			98
Net Increase (Decrease) in Net Assets Resulting from Operations	10,838			1,653
Distributions
Distributions declared from earnings	(3,634)			(3,634)
Net Decrease in Net Assets Resulting from Shareholders' Distributions	(3,634)			(3,634)
Capital Share Transactions
Issuance of common shares	399,987			974,987


Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions	399,987			974,987
Total Increase (Decrease) in Net Assets	407,191			973,006
Net Assets, at beginning of period	609,833			44,018
Net Assets, at end of period	$	1,017,024		$	1,017,024

The accompanying notes are an integral part of these consolidated financial statements.

Owl Rock Technology Finance Corp. II

Consolidated Statement of Cash Flows

(Amounts in thousands)

(Unaudited)


	For the Nine Months Ended September 30,
		2022
Cash Flows from Operating Activities
Net Increase (Decrease) in Net Assets Resulting from Operations		$	1,653
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:
Purchases of investments, net		(1,732,040)
Proceeds from investments and investment repayments, net		60,054
Net amortization/accretion of premium/discount on investments		(1,559)
Net change in unrealized (gain) loss on investments		10,026
Net change in unrealized (gains) losses on translation of assets and liabilities in foreign currencies		443
Net realized (gain) loss on investments		(24)
Paid-in-kind interest and dividends		(8,010)
Amortization of debt issuance costs		1,666
Amortization of offering costs		238
Changes in operating assets and liabilities:
(Increase) decrease in interest receivable		(12,310)



(Increase) decrease in prepaid expenses and other assets		(161)
Increase (decrease) in management fee payable		6,748
Increase (decrease) in incentive fee payable		1,323
Increase (decrease) in payables to affiliates		1,017

Increase (decrease) in accrued expenses and other liabilities		2,863
Net cash used in operating activities		(1,668,073)
Cash Flows from Financing Activities
Borrowings on debt		1,356,634
Payments on debt		(670,000)
Debt issuance costs		(16,424)
Proceeds from issuance of common shares (net of change in subscriptions receivable)		974,148
Offering costs paid		(295)

Net cash provided by financing activities		1,644,063
Net increase (decrease) in cash		(24,010)
Cash, beginning of period		44,830
Cash, end of period		$	20,820
Supplemental and Non-Cash Information
Interest paid during the period		$	7,116
Distributions declared during the period		$	3,634

Distributions Payable		$	3,634

The accompanying notes are an integral part of these consolidated financial statements.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements

Note 1. Organization

Owl Rock Technology Finance Corp. II (the “Company”) is a Maryland corporation formed on October 5, 2021. The Company was formed primarily to originate and make debt and equity investments in technology-related companies based primarily in the United States. The Company originates and invests in senior secured or unsecured loans, subordinated loans or mezzanine loans, and equity-related securities including common equity, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity. The Company’s investment objective is to maximize total return by generating current income from its debt investments and other income producing securities, and capital appreciation from its equity and equity-linked investments. The Company invests in a broad range of established and high growth technology companies that are capitalizing on the large and growing demand for technology products and services. These companies use technology extensively to improve business processes, applications and opportunities or seek to grow through technological developments and innovations. These companies operate in technology-related industries or sectors which include, but are not limited to, application software, systems software, healthcare information technology, technology services and infrastructure, financial technology and internet and digital media. Within each industry or sector, the Company invests in companies that are developing or offering goods and services to businesses and consumers which utilize scientific knowledge, including techniques, skills, methods, devices and processes, to solve problems. The Company refers to all of these companies as “technology-related” companies and intends, under normal circumstances, to invest at least 80% of the value of its total assets in such businesses.

The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes, the Company has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Because the Company has elected to be regulated as a BDC and qualifies as a RIC under the Code, the Company’s portfolio is subject to diversification and other requirements.

On December 10, 2021, the Company formed a wholly-owned subsidiary, OR Tech Lending II LLC, a Delaware limited liability company. From time to time the Company may form wholly-owned subsidiaries to facilitate the normal course of business. Owl Rock Technology Advisors II LLC (the “Adviser”) serves as the Company’s investment adviser, an indirect subsidiary of Blue Owl Capital, Inc. ("Blue Owl") (NYSE: OWL) and part of Owl Rock, a division of Blue Owl focused on direct lending. The Adviser is registered with the Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Blue Owl consists of three divisions: (1) Owl Rock, which focuses on direct lending, (2) Dyal, which focuses on providing capital to institutional alternative asset managers and (3) Oak Street, which focuses on real estate strategies. Subject to the overall supervision of the Company’s board of directors (the “Board”), the Adviser manages the day-to-day operations of, and provides investment advisory and management services to, the Company.

The Company conducts private offerings (each, a “Private Offering”) of its common shares to accredited investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended, (the “Securities Act”). At the closing of each Private Offering, each investor makes a capital commitment (a “Capital Commitment”) to purchase shares of the Company’s common stock pursuant to a subscription agreement entered into with the Company. Until the earlier of the listing or quotation of our securities on a national securities exchange (an "Exchange Listing") or the end of the Commitment Period (as defined below), investors are required to fund drawdowns to purchase shares of the Company’s common stock up to the amount of their respective Capital Commitment on an as-needed basis each time the Company delivers a drawdown notice to its investors. The initial closing of the Private Offering occurred on December 1, 2021 (the “Initial Closing”). The “Commitment Period” will continue until the earlier of the (i) five year anniversary of the Final Closing and (ii) the seven year anniversary of the Initial Closing. If the Company has not consummated an Exchange Listing by the end of the Commitment Period, subject to extension of two additional one-year periods, in the sole discretion of the Board, the Board (subject to any necessary shareholder approvals and applicable requirements of the 1940 Act) will use its commercially reasonable efforts to wind down and/or liquidate and dissolve the Company in an orderly manner.

On December 1, 2021, the Company commenced its loan origination and investment activities contemporaneously with the initial drawdown from investors in the Private Offering. In January 2022, the Company made its first portfolio company investment.

Note 2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company is an investment company and, therefore, applies the specialized accounting and reporting guidance in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies. In the opinion of management, all adjustments considered necessary for the fair presentation of the consolidated financial statements have been included. The Company was initially capitalized on November 30, 2021 and commenced operations on December 1, 2021 with the initial closing of its Private Offering. The Company’s fiscal year ends on December 31.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual amounts could differ from those estimates and such differences could be material.

Cash

Cash consists of deposits held at a custodian bank. Cash is carried at cost, which approximates fair value. The Company deposits its cash with highly-rated banking corporations and, at times, may exceed the insured limits under applicable law.

Consolidation

As provided under Regulation S-X and ASC Topic 946—Financial Services—Investment Companies, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company or controlled operating company whose business consists of providing services to the Company.

Investments at Fair Value

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.

Investments for which market quotations are readily available are typically valued at the average bid price of those market quotations. To validate market quotations, the Company utilizes a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available, as is the case for substantially all of the Company’s investments, are valued at fair value as determined in good faith by the Board, based on, among other things, the input of the Adviser, the Company’s audit committee and independent third-party valuation firm(s) engaged at the direction of the Board.

As part of the valuation process, the Board takes into account relevant factors in determining the fair value of the Company’s investments, including: the estimated enterprise value of a portfolio company (i.e., the total fair value of the portfolio company’s debt and equity), the nature and realizable value of any collateral, the portfolio company’s ability to make payments based on its earnings and cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, and overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase or sale transaction, public offering or subsequent equity sale occurs, the Board considers whether the pricing indicated by the external event corroborates its valuation.

The Board undertakes a multi-step valuation process, which includes, among other procedures, the following:

•With respect to investments for which market quotations are readily available, those investments will typically be valued at the average bid price of those market quotations;

•With respect to investments for which market quotations are not readily available, the valuation process begins with the independent valuation firm(s) providing a preliminary valuation of each investment to the Adviser’s valuation committee;

•Preliminary valuation conclusions are documented and discussed with the Adviser’s valuation committee. Agreed upon valuation recommendations are presented to the Audit Committee;

•The Audit Committee reviews the valuation recommendations and recommends values for each investment to the Board; and

•The Board reviews the recommended valuations and determines the fair value of each investment.

The Company conducts this valuation process on a quarterly basis.

The Company applies Financial Accounting Standards Board Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”), as amended, which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, the Company considers its principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that prioritizes and

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

ranks the level of observability of inputs used in determination of fair value. In accordance with ASC 820, these levels are summarized below:

•Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

•Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

•Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Transfers between levels, if any, are recognized at the beginning of the period in which the transfer occurs. In addition to using the above inputs in investment valuations, the Company applies the valuation policy approved by its Board that is consistent with ASC 820. Consistent with the valuation policy, the Company evaluates the source of the inputs, including any markets in which its investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. When an investment is valued based on prices provided by reputable dealers or pricing services (such as broker quotes), the Company subjects those prices to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level 2 or Level 3 investment. For example, the Company, or the independent valuation firm(s), reviews pricing support provided by dealers or pricing services in order to determine if observable market information is being used, versus unobservable inputs.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If the Company were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected herein.

Foreign Currency

Foreign currency amounts are translated into U.S. dollars on the following basis:

•cash, fair value of investments, outstanding debt, other assets and liabilities: at the spot exchange rate on the last business day of the period; and

•purchases and sales of investments, borrowings and repayments of such borrowings, income and expenses: at the rates of exchange prevailing on the respective dates of such transactions.

The Company includes net changes in fair values on investments held resulting from foreign exchange rate fluctuations with the change in unrealized gains (losses) on translation of assets and liabilities in foreign currencies on the Consolidated Statements of Operations. The Company’s current approach to hedging the foreign currency exposure in its non-U.S. dollar denominated investments is primarily to borrow the par amount in local currency under the Company’s SPV Asset Facility to fund these investments. Fluctuations arising from the translation of foreign currency borrowings are included with the net change in unrealized gains (losses) on translation of assets and liabilities in foreign currencies on the Consolidated Statements of Operations.

Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. dollar.

Interest and Dividend Income Recognition

Interest income is recorded on the accrual basis and includes amortization and accretion of discounts or premiums. Certain investments may have contractual payment-in-kind (“PIK”) interest or dividends. PIK interest and dividends represent accrued interest or dividends that are added to the principal amount or liquidation amount of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or at the occurrence of a liquidation event. Discounts and premiums to par value on securities purchased are amortized into interest income over the contractual life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the amortization and accretion of discounts or premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. If at any point the Company believes PIK interest is not expected to be realized, the investment generating PIK interest will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest income. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of September 30, 2022, no investments are on non-accrual status.

Dividend income on preferred equity securities is recorded on the accrual basis to the extent that such amounts are payable by the portfolio company and are expected to be collected. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly-traded portfolio companies.

Other Income

From time to time, the Company may receive fees for services provided to portfolio companies. These fees are generally only available to the Company as a result of closing investments, are generally paid at the closing of the investments, are generally non-recurring and are recognized as revenue when earned upon closing of the investment. The services that the Adviser provides vary by investment, but can include closing, work, diligence or other similar fees and fees for providing managerial assistance to the Company’s portfolio companies.

Organization Expenses

Costs associated with the organization of the Company are expensed as incurred. These expenses consist primarily of legal fees and other costs of organizing the Company.

Offering Expenses

Costs associated with the offering of common shares of the Company are capitalized as deferred offering expenses and are included in prepaid expenses and other assets in the Consolidated Statements of Assets and Liabilities and are amortized over a twelve-month period from incurrence. Expenses for any additional offerings are deferred and amortized as incurred. These expenses consist primarily of legal fees and other costs incurred in connection with the Company’s share offerings, the preparation of the Company’s registration statement, and registration fees.

Debt Issuance Costs

The Company records origination and other expenses related to its debt obligations as debt issuance costs. These expenses are deferred and amortized utilizing the effective yield method, over the life of the related debt instrument. Debt issuance costs are presented on the Consolidated Statements of Assets and Liabilities as a direct deduction from the debt liability. In circumstances in which there is not an associated debt liability amount recorded in the consolidated financial statements when the debt issuance costs are incurred, such debt issuance costs will be reported on the Consolidated Statements of Assets and Liabilities as an asset until the debt liability is recorded.

Reimbursement of Transaction-Related Expenses

The Company may receive reimbursement for certain transaction-related expenses in pursuing investments. Transaction-related expenses, which are generally expected to be reimbursed by the Company’s portfolio companies, are typically deferred until the transaction is consummated and are recorded in prepaid expenses and other assets on the date incurred. The costs of successfully completed investments not otherwise reimbursed are borne by the Company and are included as a component of the investment’s cost basis.

Cash advances received in respect of transaction-related expenses are recorded as cash with an offset to accrued expenses and other liabilities. Accrued expenses and other liabilities are relieved as reimbursable expenses are incurred.

Income Taxes

The Company has elected to be treated as a BDC under the 1940 Act. The Company has elected to be treated as a RIC under the Code beginning with its taxable year ending December 31, 2021 and intends to continue to qualify as a RIC. So long as the Company maintains its tax treatment as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its shareholders as dividends. Instead, any tax liability related to income earned and distributed by the Company represents obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company.

To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, the Company must distribute to its shareholders, for each taxable year, at

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

least 90% of its “investment company taxable income” for that year, which is generally its ordinary income plus the excess of its realized net short-term capital gains over its realized net long-term capital losses. In order for the Company not to be subject to U.S. federal excise taxes, it must distribute annually an amount at least equal to the sum of (i) 98% of its net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of its capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. The Company, at its discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income.

The Company does not currently qualify as a “publicly offered regulated investment company,” as defined in the Code. Accordingly, shareholders will be taxed as though they received a distribution of some of the expenses. A “publicly offered regulated investment company” is a RIC whose shares are either (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market, or (iii) held by at least 500 persons at all times during the taxable year. The Company cannot determine when it will qualify as a publicly offered RIC. If we do not qualify as a publicly offered RIC during the tax year, a non-corporate shareholder’s allocable portion of the Company’s affected expenses, including its management fees, will be treated as an additional distribution to shareholders. A non-corporate shareholder’s allocable portion of these expenses are treated as miscellaneous itemized deductions that are not currently deductible by such shareholders.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. There were no material uncertain tax positions through December 31, 2021.

Distributions to Common Shareholders

Distributions to common shareholders are recorded on the record date. The amount to be distributed is determined by the Board and is generally based upon the earnings estimated by the Adviser. Undistributed long-term capital gains, if any, would be generally distributed at least annually, although the Company may decide to retain such capital gains for investment.

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any cash distributions on behalf of shareholders, unless a shareholder elects to receive cash. As a result, if the Board authorizes and declares a cash distribution, then the shareholders who have not “opted out” of the dividend reinvestment plan will have their cash distribution automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. The Company expects to use newly issued shares to implement the dividend reinvestment plan.

New Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848),” which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022. ASU No. 2021-01 provides increased clarity as the Company continues to evaluate the transition of reference rates and is currently evaluating the impact of adopting ASU No. 2020-04 and 2021-01 on the consolidated financial statements.

In June 2022, the FASB issued ASU No. 2022-03, “Fair Value Measurement (Topic 820),” which clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction. ASU 2022-03 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. For all other entities the amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. An entity that qualifies as an investment company under Topic 946 should apply the amendments in ASU No. 2022-03 to an investment in an equity security subject to a contractual sale restriction that is executed or modified on or after the date of adoption. The Company is currently evaluating the impact of adopting ASU No. 2022-03 on the consolidated financial statements.

Other than the aforementioned guidance, the Company’s management does not believe that any recently issued, but not yet

effective, accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial

statements.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Note 3. Agreements and Related Party Transactions

Administration Agreement

On December 1, 2021, the Company entered into an Administration Agreement (the “Administration Agreement”) with the Adviser. Under the terms of the Administration Agreement, the Adviser performs, or oversees the performance of, required administrative services, which include providing office space, equipment and office services, maintaining financial records, preparing reports to shareholders and reports filed with the SEC, and managing the payment of expenses and the performance of administrative and professional services rendered by others. On May 3, 2022, the Board approved the continuation of the Administration Agreement.

The Administration Agreement also provides that the Company reimburses the Adviser for certain organization costs incurred prior to the commencement of the Company’s operations, and for certain offering costs.

The Company reimburses the Adviser for services performed for it pursuant to the terms of the Administration Agreement. In addition, pursuant to the terms of the Administration Agreement, the Adviser may delegate its obligations under the Administration Agreement to an affiliate or to a third party and the Company will reimburse the Adviser for any services performed for it by such affiliate or third party.

Unless earlier terminated as described below the Administration Agreement will remain in effect from two years from the date it first became effective, and will remain in effect from year to year if approved annually by a majority of the Board or by the holders of a majority of the Company’s outstanding voting securities and, in each case, a majority of the independent directors. The Administration Agreement may be terminated at any time, without the payment of any penalty, on 60 days’ written notice, by the vote of a majority of the outstanding voting securities of the Company (as defined in the 1940 Act), or by the vote of a majority of the Board or by the Adviser.

No person who is an officer, director, or employee of the Adviser or its affiliates and who serves as a director of the Company receives any compensation from the Company for his or her services as a director. However, the Company reimburses the Adviser (or its affiliates) for an allocable portion of the compensation paid by the Adviser or its affiliates to the Company’s officers who provide operational and administrative services, as well as their respective staffs and other professionals who provide services to the Company, who assist with the preparation, coordination and administration of the foregoing or provide other “back office” or “middle office”, financial or operational services to the Company (based on the percentage of time those individuals devote, on an estimated basis, to the business and affairs of the Company). Directors who are not affiliated with the Adviser receive compensation for their services and reimbursement of expenses incurred to attend meetings.

For the three and nine months ended September 30, 2022, the Company incurred expenses of approximately $0.6 million and $1.4 million, respectively, for costs and expenses reimbursable to the Adviser under the terms of the Administration Agreement.

As of September 30, 2022 and December 31, 2021, amounts reimbursable to the Adviser pursuant to the Administration Agreement were $1.2 million and $0.2 million, respectively.

Investment Advisory Agreement

On December 1, 2021, the Company entered into an Investment Advisory Agreement (the “Investment Advisory Agreement”) with the Adviser. Under the terms of the Investment Advisory Agreement, the Adviser is responsible for managing the Company’s business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring its investments, and monitoring its portfolio companies on an ongoing basis through a team of investment professionals. On May 3, 2022, the Board approved the continuation of the Investment Advisory Agreement.

The Adviser’s services under the Investment Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to the Company are not impaired.

Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect for two years from the date it first became effective, and will remain in effect from year-to-year if approved annually by a majority of the Board or by the holders of a majority of our outstanding voting securities and, in each case, by a majority of independent directors.

The Investment Advisory Agreement will automatically terminate within the meaning of the 1940 Act and related SEC guidance and interpretations in the event of its assignment. In accordance with the 1940 Act, without payment of any penalty, the Investment Advisory Agreement may be terminated by the vote of the outstanding voting securities of the Company (as defined in the 1940 Act), or by the vote of a majority of the Board. In addition, without payment of any penalty, the Adviser may generally terminate the Investment Advisory Agreement upon 60 days’ written notice.

From time to time, the Adviser may pay amounts owed by the Company to third-party providers of goods or services, including the Board, and the Company will subsequently reimburse the Adviser for such amounts paid on its behalf. Amounts payable to the Adviser are settled in the normal course of business without formal payment terms.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Under the terms of the Investment Advisory Agreement, the Company will pay the Adviser a base management fee and may also pay to it certain incentive fees. The cost of both the management fee and the incentive fee will ultimately be borne by the Company’s shareholders.

The management fee (“Management Fee”) is payable quarterly in arrears. Prior to the future quotation or listing of the Company’s securities on a national securities exchange (an “Exchange Listing”) or the future quotation or listing of its securities on any other public trading market, the Management Fee is payable at an annual rate of 0.90% of the Company’s (i) average gross assets, excluding cash and cash equivalents but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters; provided, however, that no Management Fee will be charged on the value of gross assets (excluding cash and cash-equivalents but including assets purchased with borrowed amounts) that is below an asset coverage ratio of 200% calculated in accordance with Sections 18 and 61 of the 1940 Act; plus (ii) the average of any remaining unfunded Capital Commitments at the end of the two most recently completed calendar quarters. Following an Exchange Listing, the Management Fee is payable at an annual rate of (x) 1.50% of the Company’s average gross assets (excluding cash and cash equivalents but including assets purchased with borrowed amounts) that is above an asset coverage ratio of 200% calculated in accordance with Sections 18 and 61 of the 1940 Act and (y) 1.00% of the Company’s average gross assets (excluding cash and cash equivalents but including assets purchased with borrowed amounts) that is below an asset coverage ratio of 200% calculated in accordance with Sections 18 and 61 of the 1940 Act, in each case, at the end of the two most recently completed calendar quarters payable quarterly in arrears. The Management Fee will be appropriately prorated and adjusted (based on the actual number of days elapsed relative to the total number of days in such calendar quarter) for any share issuances or repurchases during the relevant calendar quarters. The Management Fee for any partial month or quarter, as the case may be, will be appropriately prorated and adjusted (based on the actual number of days elapsed relative to the total number of days in such calendar quarter). For purposes of the Investment Advisory Agreement, gross assets means the Company’s total assets determined on a consolidated basis in accordance with generally accepted accounting principles in the United States, excluding cash and cash equivalents, but including assets purchased with borrowed amounts.

For the three and nine months ended September 30, 2022, management fees were $7.1 million and $13.3 million, respectively.

Pursuant to the Investment Advisory Agreement, the Adviser is entitled to an incentive fee (“Incentive Fee”), which consists of two components that are independent of each other, with the result that one component may be payable even if the other is not.

The portion of the Incentive Fee based on income is determined and paid quarterly in arrears commencing with the first calendar quarter following the initial closing date, and equals (i) prior to an Exchange Listing, 100% of the pre- Incentive Fee net investment income in excess of a 1.5% quarterly “hurdle rate”, until the Adviser has received 10% of the total pre-Incentive Fee net investment income for that calendar quarter and, for pre-Incentive Fee net investment income in excess of 1.67% quarterly, 10% of all remaining pre- Incentive Fee net investment income for that calendar quarter, and (ii) subsequent to an Exchange Listing, 100% of the pre- Incentive Fee net investment income in excess of a 1.5% quarterly “hurdle rate,” until the Adviser has received 17.5% of the total pre-Incentive Fee net investment income for that calendar quarter and, for pre-Incentive Fee net investment income in excess of 1.82% quarterly, 17.5% of all remaining pre-Incentive Fee net investment income for that calendar quarter. The 100% “catch-up” provision for pre-Incentive Fee net investment income in excess of the 1.5% “hurdle rate” is intended to provide the Adviser with an Incentive Fee of (i) prior to an Exchange Listing, 10% on all pre- Incentive Fee net investment income when that amount equals 1.67% in a calendar quarter (6.67% annualized), and (ii) subsequent to an Exchange Listing, 17.5% on all pre-Incentive Fee net investment income when that amount equals 1.82% in a calendar quarter (7.27% annualized), which, in each case, is the rate at which catch-up is achieved. Once the “hurdle rate” is reached and catch-up is achieved, (i) prior to an Exchange Listing, 10% of any pre-Incentive Fee net investment income in excess of 1.67% in any calendar quarter is payable to the Adviser, and (ii) subsequent to an Exchange Listing, 17.5% of any pre-Incentive Fee net investment income in excess of 1.82% in any calendar quarter is payable to the Adviser.

For the three and nine months ended September 30, 2022, incentive fees were $1.3 million.

The second component of the Incentive Fee, the “Capital Gains Incentive Fee,” payable at the end of each calendar year in arrears, equals, (i) prior to an Exchange Listing, 10% of cumulative realized capital gains from the initial closing date to the end of each calendar year, less cumulative realized capital losses and unrealized capital depreciation from the initial closing date to the end of each calendar year, and (ii) subsequent to an Exchange Listing, 17.5% of cumulative realized capital gains from the Listing Date to the end of each calendar year, less cumulative realized capital losses and unrealized capital depreciation from the Listing Date to the end of each calendar year. Each year, the fee paid for the Capital Gains Incentive Fee is net of the aggregate amount of any previously paid Capital Gains Incentive Fee for prior periods. While the Investment Advisory Agreement neither includes nor contemplates the inclusion of unrealized gains in the calculation of the capital gains incentive fee, as required by U.S. GAAP, the Company accrues capital gains incentive fees on unrealized gains. This accrual reflects the incentive fees that would be payable to the Adviser if the Company's entire investment portfolio was liquidated at its fair value as of the balance sheet date even though the Adviser is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized. The fees that are payable under the Investment Advisory Agreement for any partial period will be appropriately prorated. For the sole purpose of calculating the Capital Gains Incentive Fee, the cost basis as of the initial closing date for all of the Company’s investments made prior to the initial closing date will be equal to the fair value of such investments as of the last day of the calendar quarter in which the initial closing date

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

occurs; provided, however, that in no event will the Capital Gains Fee payable pursuant to the Investment Advisory Agreement be in excess of the amount permitted by the Advisers Act, including Section 205 thereof.

For the three and nine months ended September 30, 2022, the Company did not incur performance based incentive fees.

Dealer Manager Agreement

On November 30, 2021, the Company and the Adviser entered into a dealer manager agreement with the Adviser and Blue Owl Securities LLC ("Blue Owl Securities") pursuant to which Blue Owl Securities and certain participating broker-dealers will solicit Capital Commitments. In addition, the Company has entered into a placement agent agreement with Blue Owl Securities pursuant to which employees of Blue Owl Securities may conduct placement activities.

Affiliated Transactions

The Company may be prohibited under the 1940 Act from participating in certain transactions with its affiliates without prior approval of the directors who are not interested persons, and in some cases, the prior approval of the SEC. The Company relies on an order for exemptive relief (the “Order”) that has been granted to an affiliate of the Adviser to co-invest with other funds managed by the Adviser or certain affiliates, in a manner consistent with the Company’s investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. Pursuant to such Order the Company generally is permitted to co-invest with certain of its affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Board make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transaction, including the consideration to be paid, are reasonable and fair to the Company and its shareholders and do not involve overreaching of the Company or its shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of the Company’s shareholders and is consistent with its investment objective and strategies, (3) the investment by its affiliates would not disadvantage the Company, and the Company’s participation would not be on a basis different from or less advantageous than that on which its affiliates are investing and (4) the proposed investment by the Company would not benefit the Adviser or its affiliates or any affiliated person of any of them (other than the parties to the transaction), except to the extent permitted by the exemptive relief and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act. In addition, the Company has received an amendment to its Order to permit it to co-invest in its existing portfolio companies with certain affiliates that are private funds, even if such private funds did not have an investment in such existing portfolio company.

The Adviser is affiliated with Owl Rock Capital Advisors LLC ("ORCA"), Owl Rock Technology Advisors LLC (“ORTA”), Owl Rock Capital Private Fund Advisors LLC (“ORPFA”), and Owl Rock Diversified Advisors LLC (“ORDA” together with ORTA, ORPFA, ORCA, and the Advisor, the "Owl Rock Advisers"), which are also investment advisers. The Owl Rock Advisers are indirect affiliates of Blue Owl and comprise "Owl Rock," a division of Blue Owl focused on direct lending. The Owl Rock Advisers’ allocation policy seeks to ensure equitable allocation of investment opportunities over time between the Company, and other funds managed by the Adviser or its affiliates. As a result of the Order, there could be significant overlap in the Company’s investment portfolio and the investment portfolio of other funds managed by the Adviser or its affiliates that could avail themselves of the Order and that have an investment objective similar to the Company's.

License Agreement

On December 1, 2021, the Company entered into a license agreement (the “License Agreement”), pursuant to which an affiliate of Blue Owl has granted the Company a non-exclusive license to use the name “Owl Rock.” Under the License Agreement, the Company has a right to use the Owl Rock name for so long as the Adviser or one of its affiliates remains the Company’s investment adviser. Other than with respect to this limited license, the Company has no legal right to the “Owl Rock” name or logo.

Controlled/Affiliated Portfolio Companies

Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Under the 1940 Act, “non-affiliated investments” are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the accompanying consolidated financial statements, including the consolidated schedule of investments.

The Company has made investments in non-controlled, affiliated companies, including Amergin AssetCo and Chapford SMA Partnership, L.P. ("Chapford SMA").

Amergin was created to invest in a leasing platform focused on railcar and aviation assets. Amergin consists

of Amergin AssetCo and Amergin Asset Management LLC, which has entered into a Servicing Agreement with Amergin AssetCo. The Company made a $20.0 million equity commitment to Amergin AssetCo on July 1, 2022. The Company’s investment in Amergin

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

is a co-investment made with the Company’s affiliates in accordance with the terms of the exemptive relief that the Company received from the SEC. The Company does not consolidate its equity interest in Amergin AssetCo.

Chapford SMA is a portfolio company created to invest in life settlement assets. On July 18, 2022, the Company made a $5.2 million equity commitment to Chapford SMA. The Company's investment in Chapford SMA is a co-investment with the Company's affiliates in accordance with the terms of the exemptive relief that the Company received from the SEC. The Company does not consolidate its interest in Chapford SMA.

Promissory Notes

On January 25, 2022, the Company as borrower, entered into a Loan Agreement (the “FIC Agreement”) with Owl Rock

Feeder FIC LLC (“Feeder FIC”), an affiliate of the Adviser, as lender, to enter into revolving promissory notes (the “Promissory Notes”) to borrow up to an aggregate of $250 million from Feeder FIC. On June 22, 2022, the Company and Feeder FIC entered into a termination agreement pursuant to which the FIC Agreement and the Promissory Notes were terminated. Upon execution of the Termination Agreement there were no amounts outstanding pursuant to the Promissory Notes. See Note 6 “Debt”.

Note 4. Investments

Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Under the 1940 Act, "non-affiliated investments" are defined as investments that are neither controlled investments nor affiliated investments. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the accompanying consolidated financial statements, including the consolidated schedule of investments. The information in the tables below is presented on an aggregate portfolio basis, without regard to whether they are non-controlled non-affiliated, non-controlled affiliated or controlled affiliated investments.

Investments at fair value and amortized cost consisted of the following as of September 30, 2022:


	September 30, 2022
($ in thousands)	Amortized Cost		Fair Value
First-lien senior secured debt investments	$	1,146,857	$	1,145,937
Second-lien senior secured debt investments	112,811		110,810
Unsecured debt investments	62,536		55,939
Preferred equity investments	321,738		315,276
Common equity investments(1)	37,637		37,590
Total Investments	$	1,681,579	$	1,665,552

(1)Includes equity investment in Amergin AssetCo and Chapford SMA.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

The Company uses GICS for classifying the industry groupings of its portfolio companies. The industry composition of investments based on fair value as of September 30, 2022 was as follows:


	September 30, 2022
Aerospace & Defense	4.0	%
Application Software	13.7	%

Beverages	0.6	%

Capital Markets	0.6	%
Commercial Services & Supplies	1.2	%
Construction & Engineering	0.6	%
Consumer Finance	0.9	%
Diversified Consumer Services	0.6	%
Diversified Financial Services	4.0	%
Diversified Support Services	1.5	%
Electrical Equipment	7.5	%
Food & Staples Retailing	8.4	%
Health Care Technology	7.7	%
Health Care Providers & Services	2.8	%



Insurance	2.2	%

IT Services	8.3	%

Pharmaceuticals	1.0	%



Specialty Retail	1.7	%
Systems Software	32.7	%


Total	100.0	%

The geographic composition of investments based on fair value as of September 30, 2022 was as follows:


	September 30, 2022
United States:
Midwest	7.3	%
Northeast	24.2	%
South	37.7	%
West	22.0	%
International	8.8	%









Total	100.0	%

Note 5. Fair Value of Investments

Investments

The following tables present the fair value hierarchy of investments as of September 30, 2022:


	Fair Value Hierarchy as of September 30, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
First-lien senior secured debt investments	$	—	$	61,449	$	1,084,488	$	1,145,937
Second-lien senior secured debt investments	—		—		110,810		110,810
Unsecured debt investments	—		15,323		40,616		55,939
Preferred equity investments	—		—		315,276		315,276
Common equity investments	—		—		37,590		37,590
Total Investments at fair value	$	—	$	76,772	$	1,588,780	$	1,665,552

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

The following tables present changes in the fair value of investments for which Level 3 inputs were used to determine the fair value as of and for the three and nine months ended September 30, 2022:


	As of and for the Three Months Ended September 30, 2022
($ in thousands)	First-lien senior secured debt investments		Second-lien senior secured debt investments		Unsecured debt investments		Preferred equity investments		Common equity investments	Total
Fair value, beginning of period	$	460,911	$	45,358	$	42,260	$	194,150	12,210	$	754,889
Purchases of investments, net	621,342		67,140		—		120,234		25,418	834,134
Payment-in-kind	351		—		745		2,671		—	3,767
Proceeds from investments, net	(1,292)		—		—		—		—	(1,292)
Net change in unrealized gain (loss)	2,691		(1,757)		(2,402)		(1,855)		(38)	(3,361)
Net realized gains (losses)	—		—		—		—		—	—
Net amortization/accretion of premium/discount on investments	485		69		13		76		—	643
Transfers into (out of) Level 3(1)	—		—		—		—		—	—
Fair value, end of period	$	1,084,488	$	110,810	$	40,616	$	315,276	37,590	$	1,588,780

(1)Transfers between levels, if any, are recognized at the beginning of the period noted. For the three months ended September 30, 2022, there were no transfers between levels.


	As of and for the Nine Months Ended September 30, 2022
($ in thousands)	First-lien senior secured debt investments		Second-lien senior secured debt investments		Unsecured debt investments		Preferred equity investments		Common equity investments	Total
Fair value, beginning of period	$	—	$	—	$	—	$	—	—	$	—
Purchases of investments, net	1,128,840		126,703		43,918		315,447		37,636	1,652,544
Payment-in-kind	350		—		1,499		6,161		—	8,010
Proceeds from investments, net	(46,077)		(13,977)		—		—		—	(60,054)
Net change in unrealized gain (loss)	714		(2,001)		(4,830)		(6,462)		(46)	(12,625)
Net realized gains (losses)	24		—		—		—		—	24
Net amortization/accretion of premium/discount on investments	637		85		29		130		—	881
Transfers into (out of) Level 3(1)	—		—		—		—		—	—
Fair value, end of period	$	1,084,488	$	110,810	$	40,616	$	315,276	37,590	$	1,588,780

(1)Transfers between levels, if any, are recognized at the beginning of the period noted. For the nine months ended September 30, 2022, there were no transfers between levels.

The following tables present information with respect to net change in unrealized gains (losses) on investments for which Level 3 inputs were used in determining the fair value that are still held by the Company for the three and nine months ended September 30, 2022:


($ in thousands)	Net change in unrealized gain (loss) for the Three Months Ended September 30, 2022 on Investments Held at September 30, 2022
First-lien senior secured debt investments	$	2,691
Second-lien senior secured debt investments	(1,757)
Unsecured debt investments	(2,402)
Preferred equity investments	(1,855)
Common equity investments	(38)
Total Investments	$	(3,361)

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued


($ in thousands)	Net change in unrealized gain (loss) for the Nine Months Ended September 30, 2022 on Investments Held at September 30, 2022
First-lien senior secured debt investments	$	714
Second-lien senior secured debt investments	(2,001)
Unsecured debt investments	(4,830)
Preferred equity investments	(6,462)
Common equity investments	(46)
Total Investments	$	(12,625)

The following tables present quantitative information about the significant unobservable inputs of the Company’s Level 3 investments as of September 30, 2022. The weighted average range of unobservable inputs is based on fair value of investments. The table is not intended to be all-inclusive but instead capture the significant unobservable inputs relevant to the Company’s determination of fair value.

September 30, 2022

($ in thousands)

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted Average)

Impact to Valuation from an Increase in Input

First-lien senior secured debt investments

614,333

Recent Transaction

Transaction Price

87.2% - 99.5% (98.2%)

Increase

470,155

Yield Analysis

Market Yield

89.6% - 100.0% (98.9%)

Decrease

Second-lien senior secured debt investments

110,810

Yield Analysis

Market Yield

92.5% - 98.3% (94.0%)

Decrease

Unsecured debt investments

40,616

Yield Analysis

Market Yield

100.0% - 100.0% (100.0%)

Decrease

Preferred equity investments

120,235

Recent Transaction

Transaction Price

97.0% - 100.0% (97.5%)

Increase

149,042

Yield Analysis

Market Yield

89.3% - 98.5% (94.3%)

Decrease

45,999

Market Approach

Revenue Multiple

8.5x - 45.0x (27.4x)

Increase

Common equity investments

25,380

Recent Transaction

Transaction Price

95.7% - 100.0% (99.6%)

Increase

2,520

Market Approach

EBITDA Multiple

18.0x - 18.0x (18.0x)

Increase

9,690

Market Approach

Revenue Multiple

16.6x - 16.6x (16.6x)

Increase

The Company typically determines the fair value of its performing Level 3 debt investments utilizing a yield analysis. In a yield analysis, a price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles. Additional consideration is given to the expected life, portfolio company performance since close, and other terms and risks associated with an investment. Among other factors, a determinant of risk is the amount of leverage used by the portfolio company relative to its total enterprise value, and the rights and remedies of the Company’s investment within the portfolio company’s capital structure.

Significant unobservable quantitative inputs typically used in the fair value measurement of the Company’s Level 3 debt investments primarily include current market yields, including relevant market indices, but may also include quotes from brokers, dealers, and pricing services as indicated by comparable investments. For the Company’s Level 3 equity investments, a market approach, based on comparable publicly-traded company and comparable market transaction multiples of revenues, earnings before interest, taxes, depreciation and amortization (“EBITDA”) or some combination thereof and comparable market transactions are typically used.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Debt Not Carried at Fair Value

Fair value is estimated by discounting remaining payments using applicable current market rates, which take into account changes in the Company’s marketplace credit ratings, or market quotes, if available. The following table presents the carrying and fair values of the Company’s debt obligations as of September 30, 2022:


	September 30, 2022
($ in thousands)	Net Carrying Value(1)		Fair Value
Subscription Credit Facility	$	593,153	$	593,153
Revolving Credit Facility	29,211		29,211
SPV Asset Facility I	43,957		43,957

Total Debt	$	666,321	$	666,321

(1)The carrying value of the Subscription Credit Facility, Revolving Credit Facility, and SPV Asset Facility I are presented net of unamortized debt issuance costs of $2.9 million, $5.8 million, and $6.0 million respectively.

The following table presents fair value measurements of the Company’s debt obligations as of September 30, 2022:


($ in thousands)	September 30, 2022
Level 1	$	—
Level 2	—
Level 3	666,321
Total Debt	$	666,321

Debt Not Carried at Fair Value

As of September 30, 2022, the carrying amounts of the Company’s assets and liabilities, other than investments at fair value and debt, approximate fair value due to their short maturities.

Note 6. Debt

In accordance with the 1940 Act, with certain limitations, the Company is allowed to borrow amounts such that its asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing. As of September 30, 2022, the Company’s asset coverage was 248.8%.

Debt obligations consisted of the following as of September 30, 2022:


	September 30, 2022
($ in thousands)	Aggregate Principal Committed		Outstanding Principal		Amount Available(1)		Net Carrying Value(2)
Subscription Credit Facility	$	700,000	$	596,079	$	103,921	$	593,153
Revolving Credit Facility	600,000		35,000		565,000		29,211
SPV Asset Facility I	600,000		50,000		51,567		43,957
Total Debt	$	1,900,000	$	681,079	$	720,488	$	666,321

(1)The amount available reflects any limitations related to each credit facility’s borrowing base.

(2)The carrying value of the Subscription Credit Facility, Revolving Credit Facility, and SPV Asset Facility I are presented net of unamortized debt issuance costs of $2.9 million, $5.8 million, and $6.0 million respectively.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

For the three and nine months ended September 30, 2022, the components of interest expense were as follows:


	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
($ in thousands)	2022				2022
Interest expense	$	7,730			$	9,536
Amortization of debt issuance costs	977				1,666
Total Interest Expense	$	8,707			$	11,202
Average interest rate	4.7		%		4.5		%
Average daily borrowings	$	643,216			$	277,457

Credit Facilities

Subscription Credit Facility

On February 18, 2022 the Company entered into a revolving credit facility (the “Subscription Credit Facility”) with Wells Fargo Bank, National Association as administrative agent and as the lender.

The maximum principal amount of the Subscription Credit Facility is $700 million, subject to availability under the borrowing base, which is based on unused capital commitments. The Subscription Credit Facility includes a provision permitting the Company to increase the size of the Subscription Credit Facility under certain circumstances up to a maximum principal amount not to exceed $1.5 billion, if the existing or new lenders agree to commit to such increase.

Borrowings under the Subscription Credit Facility bear interest, at the Company’s election at the time of drawdown, at a rate per annum equal to (i) in the case of loans denominated in dollars, at the Company’s option (a) an adjusted Daily Simple SOFR rate plus 1.75%, (b) an adjusted Term SOFR rate for the applicable interest period plus 1.75% and (c) in the case of reference rate loans, 0.75% plus the greatest of (1) a prime rate, (2) the federal funds rate plus 0.50% and (3) the adjusted Daily Simple SOFR rate plus 1.00%, (ii) in the case of loans denominated in euros or other alternative currencies (other than sterling), the adjusted Eurocurrency Rate for the applicable interest period plus 1.75% or (iii) in the case of loans denominated in sterling, the adjusted SONIA Rate for the applicable interest period plus 1.75%. SOFR Rate loans are subject to a credit spread adjustment ranging from 0.10% to 0.25% and SONIA rate loans are subject to a credit spread adjustment of 0.0326%. Loans denominated in dollars may be converted from one rate applicable to dollar denominated loans to another at any time at the Company’s election, subject to certain conditions. The Company also will pay an unused commitment fee of 0.25% per annum on the unused commitments.

Revolving Credit Facility

On June 9, 2022, the Company entered into a Senior Secured Credit Agreement (the “Revolving Credit Facility”). The parties to the Revolving Credit Facility include the Company, as Borrower, the lenders from time to time parties thereto Truist Bank as Administrative Agent, Truist Securities, Inc., ING Capital LLC, Sumitomo Mitsui Banking Corporation and MUFG Bank, LTD, as Joint Bookrunners and Joint Lead Arrangers.

The Revolving Credit Facility is guaranteed by each of OR Tech Lending II LLC, ORTF II BC 1 LLC and ORTF II BC 2 LLC, each a subsidiary of the Company, and will be guaranteed by certain domestic subsidiaries of the Company that are formed or acquired by the Company in the future (each a "Guarantor" and collectively, the “Guarantors”). Proceeds of the Revolving Credit Facility may be used for general corporate purposes, including the funding of portfolio investments.

The initial maximum principal amount of the Revolving Credit Facility is $600 million, subject to availability under the borrowing base, which is based on the Company’s portfolio investments and other outstanding indebtedness. Maximum capacity under the Revolving Credit Facility may be increased to $1.25 billion through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Revolving Credit Facility includes a $200 million limit for swingline loans, with the aggregate principal amount of outstanding swingline loans of any swingline lender being limited to up to $50 million, and is secured by a perfected first-priority interest in substantially all of the portfolio investments held by the Company and each Guarantor, subject to certain exceptions.

The availability period under the Revolving Credit Facility will terminate on June 9, 2026 (“Revolving Credit Facility Commitment Termination Date”) and the Revolving Credit Facility will mature on June 9, 2027 (“Revolving Credit Facility Maturity Date”). During the period from the Revolving Credit Facility Commitment Termination Date to the Revolving Credit Facility Maturity Date, the Company will be obligated to make mandatory prepayments under the Revolving Credit Facility out of the proceeds of certain asset sales and other recovery events and equity and debt issuances.

The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Revolving Credit Facility in U.S. dollars will bear interest at either term SOFR plus a margin, or the Prime Rate plus a margin. The

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Company may elect either the term SOFR or Prime Rate at the time of drawdown, and loans denominated in U.S. dollars may be converted from one rate to another at any time at the Company’s option, subject to certain conditions. Amounts drawn under the Revolving Credit Facility in other permitted currencies will bear interest at the relevant rate specified therein plus an applicable margin. The Company will also pay a fee of 0.375% on average daily undrawn amounts under the Revolving Credit Facility.

The Revolving Credit Facility includes customary covenants, including certain limitations on the incurrence by the Company of additional indebtedness and on the Company’s ability to make distributions to its shareholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events and certain financial covenants related to asset coverage and other maintenance covenants, as well as customary events of default. The Revolving Credit Facility requires a minimum asset coverage ratio with respect to the consolidated assets of the Company and its subsidiaries to senior securities that constitute indebtedness of no less than 1.50 to 1.00, measured at the last day of any fiscal quarter.

SPV Asset Facility I

On July 15, 2022 (the “SPV Asset Facility I Closing Date”), Athena Funding I LLC (“Athena Funding I”), a Delaware limited liability company and a newly formed subsidiary of the Company entered into a Credit Agreement (the “SPV Asset Facility I”), with Athena Funding I, as borrower, Société Générale, as administrative agent, State Street Bank and Trust Company, as collateral agent, collateral administrator and custodian, Alter Domus (US) LLC, as document custodian, and the lenders party thereto.

From time to time, the Company expects to sell and contribute certain investments to Athena Funding I pursuant to a Sale and Contribution Agreement by and between the Company and Athena Funding I. No gain or loss will be recognized as a result of the contribution. Proceeds from the SPV Asset Facility I will be used to finance the origination and acquisition of eligible assets by Athena Funding I, including the purchase of such assets from the Company. The Company retains a residual interest in assets contributed to or acquired by Athena Funding I through its ownership of Athena Funding I. The initial maximum principal amount which may be borrowed under the Credit Facility is $600 million; the availability of this amount is subject to a borrowing base test, which is based on the value of Athena Funding I’s assets from time to time, and satisfaction of certain conditions, including coverage tests, collateral quality tests, a lender advance rate test and certain concentration limits.

The SPV Asset Facility I provides for the ability to draw term loans and to draw and redraw revolving loans under the SPV Asset Facility I for a period of up to two years after the SPV Asset Facility I Closing Date. Unless otherwise terminated, the SPV Asset Facility I will mature on July 15, 2032 (the "SPV Asset Facility I Stated Maturity"). Prior to the SPV Asset Facility I Stated Maturity, proceeds received by Athena Funding I from principal and interest, dividends, or fees on assets must be used to pay fees, expenses and interest on outstanding borrowings, and the excess may be returned to the Company, subject to certain conditions. On the SPV Asset Facility I Stated Maturity, Athena Funding I must pay in full all outstanding fees and expenses and all principal and interest on outstanding borrowings, and the excess may be returned to the Company. The credit facility may be permanently reduced, in whole or in part, at the option of Athena Funding I subject to payment of a premium for a period of time.

Amounts drawn bear interest at a reference rate (initially SOFR) plus a spread of 2.75%, and term loans are subject to a minimum utilization amount, after one year, subject to certain terms and conditions. The undrawn amount of the of the term commitment not subject to such spread payment is subject to an undrawn fee of 0.25% per annum for the first six months and 0.35% thereafter. The undrawn amount of the revolving commitment not subject to such spread payment is subject to an undrawn fee of 0.25% per annum for the first six months, 0.50% for months seven through twelve, and 0.50% thereafter if the drawn amount is greater than or equal to 75% of the revolving commitment, otherwise 0.75%. Certain additional fees are payable to Société Générale as administrative agent.

SPV Asset Facility I contains customary covenants, including certain maintenance covenants, and events of default. Athena Funding I is required to obtain a minimum post-closing rating of SPV Asset Facility I within six months of the SPV Asset Facility I Closing Date, subject to certain terms and conditions. The SPV Asset Facility I is secured by a perfected first priority security interest in the assets of Athena Funding I and on any payments received by Athena Funding I in respect of those assets. Assets pledged to the lenders will not be available to pay the debts of the Company.

Borrowings of Athena Funding I are considered the Company’s borrowings for purposes of complying with the asset coverage requirements under the 1940 Act.

Promissory Note

On January 25, 2022, the Company as borrower, entered into a Loan Agreement (the “FIC Agreement”) with Owl Rock Feeder FIC LLC (“Feeder FIC”), an affiliate of the Adviser, as lender, to enter into revolving promissory notes (the “Promissory Notes”) to borrow up to an aggregate of $250 million from Feeder FIC. Under the FIC Agreement, the Company could re-borrow any amount repaid; however, there was no funding commitment between Feeder FIC and the Company.

On March 14, 2022, the Company entered into an amendment to the FIC Agreement to change the manner in which interest is calculated.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

The interest rate on amounts borrowed pursuant to the Promissory Notes, prior to March 14, 2022, was based on the lesser of the rate of interest for an ABR Loan or a Eurodollar Loan under the credit agreement dated as of April 15, 2021, as amended or supplemented from time to time, by and among the Adviser, as borrower, the several lenders from time to time party thereto, MUFG Union Bank, N.A., as Collateral Agent and MUFG Bank, Ltd., as Administrative Agent.

The interest rate on amounts borrowed pursuant to the Promissory Notes after March 14, 2022 was based on the lesser of the rate of interest for a SOFR Loan or an ABR Loan under the Credit Agreement dated as of December 7, 2021, as amended or supplemented from time to time, by and among Blue Owl Finance LLC, as Borrower, Blue Owl Capital Holdings LP and Blue Owl Capital Carry LP as Parent Guarantors, the Subsidiary Guarantors party thereto, Bank of America, N.A., as Syndication Agent, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and Sumitomo Mitsui Banking Corporation, as Co-Documentation Agents and MUFG Bank, Ltd., as Administrative Agent.

The unpaid principal balance of any Promissory Note and accrued interest thereon was payable by us from time to time at our discretion but immediately due and payable upon 120 days written notice by Feeder FIC, and in any event due and payable in full no later than February 28, 2023. The Company intends to use the borrowed funds to make investments in portfolio companies consistent with its investment strategies.

On June 22, 2022, the Company and Feeder FIC, entered into a termination agreement (the “Termination Agreement”) pursuant to which the FIC Agreement was terminated. Upon execution of the Termination Agreement there were no amounts outstanding pursuant to the FIC Agreement or the Promissory Notes.

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Note 7. Commitments and Contingencies

Portfolio Company Commitments

From time to time, the Company may enter into commitments to fund investments. As of September 30, 2022, the Company had the following outstanding commitments to fund investments in current portfolio companies:

Portfolio Company

Investment

September 30, 2022

($ in thousands)

AAM Series 1.1 Rail and Domestic Intermodal Feeder, LLC

LLC Interest

10,000

AAM Series 2.1 Aviation Feeder, LLC

LLC Interest

9,696

AmeriLife Holdings LLC

First lien senior secured delayed draw term loan

4,545

AmeriLife Holdings LLC

First lien senior secured revolving loan

2,273

Anaplan, Inc.

First lien senior secured revolving loan

9,421

Appfire Technologies, LLC

First lien senior secured revolving loan

751

Appfire Technologies, LLC

First lien senior secured delayed draw term loan

9,184

Armstrong Bidco Limited

First lien senior secured delayed draw term loan

2,075

Chapford SMA Partnership, L.P.

LP Interest

2,800

Community Brands ParentCo, LLC

First lien senior secured delayed draw term loan

1,500

Community Brands ParentCo, LLC

First lien senior secured revolving loan

750

CoreTrust Purchasing Group LLC

First lien senior secured delayed draw term loan

3,789

CoreTrust Purchasing Group LLC

First lien senior secured revolving loan

3,789

Fullsteam Operations, LLC

First lien senior secured delayed draw term loan

34,308

Grayshift, LLC

First lien senior secured revolving loan

5,806

Iconic IMO Merger Sub, Inc.

First lien senior secured delayed draw term loan

4,963

Iconic IMO Merger Sub, Inc.

First lien senior secured revolving loan

2,184

Interoperability Bidco, Inc. (dba Lyniate)

First lien senior secured revolving loan

1,304

Kaseya Inc.

First lien senior secured delayed draw term loan

4,725

Kaseya Inc.

First lien senior secured revolving loan

4,725

ManTech International Corporation

First lien senior secured delayed draw term loan

16,000

ManTech International Corporation

First lien senior secured revolving loan

7,255

Natural Partners, LLC

First lien senior secured revolving loan

681

Pacific BidCo Inc.

First lien senior secured delayed draw term loan

954

Rubrik, Inc.

First lien senior secured delayed draw term loan

2,641

SailPoint Technologies Holdings, Inc.

First lien senior secured revolving loan

13,075

Securonix, Inc.

First lien senior secured revolving loan

3,559

SimpliSafe Holding Corporation

First lien senior secured delayed draw term loan

2,572

Smarsh Inc.

First lien senior secured delayed draw term loan

6,476

Smarsh Inc.

First lien senior secured revolving loan

1,619

Talon MidCo 2 Limited

First lien senior secured revolving loan

1,369

Talon MidCo 2 Limited

First lien senior secured delayed draw term loan

311

TC Holdings, LLC (dba TrialCard)

First lien senior secured revolving loan

1,071

The NPD Group, L.P.

First lien senior secured revolving loan

9,060

Total Unfunded Portfolio Company Commitments

185,231

The Company maintains sufficient borrowing capacity along with undrawn Capital Commitments to cover outstanding unfunded portfolio company commitments that the Company may be required to fund.

Investor Commitments

As of September 30, 2022, the Company had approximately $3.2 billion in total Capital Commitments from investors (approximately $2.2 billion undrawn), of which $50.3 million is from entities affiliated with or related to the Adviser (approximately $19.7 million undrawn). As of December 31, 2021, the Company had approximately $802.7 million in total Capital Commitments from investors (approximately $757.7 million undrawn), of which $50.0 million is from entities affiliated with or related to the

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Adviser (approximately $45.2 million undrawn). These undrawn Capital Commitments will no longer remain in effect following the completion of an initial public offering of the Company’s common stock.

Other Commitments and Contingencies

From time to time, the Company may become a party to certain legal proceedings incidental to the normal course of its business. At September 30, 2022, management was not aware of any pending or threatened litigation.

Note 8. Net Assets

Subscriptions and Drawdowns

In connection with its formation, the Company has the authority to issue 500,000,000 common shares at $0.01 per share par value.

On November 30, 2021, the Company issued 100 common shares for $1,500 to Owl Rock Technology Advisors II LLC.

Subsequent to November 30, 2021, the Company has entered into Subscription Agreements with investors providing for the private placement of the Company’s common shares. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase the Company’s common shares up to the amount of their respective Capital Commitment on an as-needed basis each time the Company delivers a drawdown notice to its investors.

During the nine months ended September 30, 2022, the Company delivered the following capital call notices to investors:


Capital Drawdown Notice Date	Common Share Issuance Date	Number of Common Shares Issued	Aggregate Offering Price ($ in thousands)
February 11, 2022	January 28, 2022	8,710,668	$	125,000
March 29, 2022	March 16, 2022	10,408,213	150,000
June 28, 2022	June 14, 2022	21,201,413	300,000
September 23, 2022	September 12, 2022	27,642,541	399,987
Total		67,962,835	$	974,987

Dividend Reinvestment

With respect to distributions, the Company has adopted an “opt out” dividend reinvestment plan for common shareholders. As a result, in the event of a declared distribution, each shareholder that has not “opted out” of the dividend reinvestment plan will have their dividends or distributions automatically reinvested in additional shares of the Company’s common stock rather than receiving cash distributions. Shareholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.

Distributions

The following table reflects the distributions declared on shares of our common stock during the nine months ended September 30, 2022

September 30, 2022

Date Declared

Record Date

Payment Date

Distribution per Share

August 2, 2022

September 30, 2022

November 15, 2022

0.05

Note 9. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per common share for the three and nine months ended September 30, 2022:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
($ in thousands, except per share amounts)	2022			2022
Increase (decrease) in net assets resulting from operations	$	10,838		$	1,653
Weighted average shares of common stock outstanding—basic and diluted	45,724,093			25,681,701
Earnings (loss) per common share-basic and diluted	$	0.24		$	0.06

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Note 10. Income Taxes

The Company has elected to be treated as a RIC under Subchapter M of the Code, and intends to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, the Company must, among other things, distribute to its shareholders in each taxable year generally at least 90% of the Company’s investment company taxable income, as defined by the Code, and net tax-exempt income for that taxable year. To maintain tax treatment as a RIC, the Company, among other things, intends to make the requisite distributions to its shareholders, which generally relieves the Company from corporate-level U.S. federal income taxes.

Taxable income generally differs from increase in net assets resulting from operations due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized.

The Company makes certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which include differences in the book and tax basis of certain assets and liabilities, and nondeductible federal taxes or losses among other items. To the extent these differences are permanent, they are charged or credited to additional paid in capital, or distributable earnings (losses), as appropriate.

For the three and nine months ended September 30, 2022, U.S federal excise taxes were $13 thousand.

Note 11. Financial Highlights

The following are the financial highlights for a common share outstanding during the nine months ended September 30, 2022:


	For the Nine Months Ended September 30,
($ in thousands, except share and per share amounts)	2022
Per share data:
Net asset value, beginning of period	$	14.67
Net investment income (loss)(1)	0.47
Net realized and unrealized gain (loss)(1)	(0.40)
Total from operations	0.07
Issuance of common stock(2)	(0.36)
Distributions declared from net investment income	(0.05)
Total increase (decrease) in net assets	(0.34)
Net asset value, end of period	$	14.33
Shares outstanding, end of period	70,962,935
Total Return(3)	(2.0)		%
Ratios / Supplemental Data

Ratio of total expenses to average net assets(4)	8.0		%
Ratio of net investment income to average net assets(4)	3.2		%
Net assets, end of period	$	1,017,024
Weighted-average shares outstanding	25,681,701
Total capital commitments, end of period	$	3,243,464
Ratio of total contributed capital to total committed capital, end of period	31.5		%
Portfolio turnover rate	8.5		%
Year of formation	2021

(1)The per share data was derived using the weighted average shares outstanding during the period.

(2)The amount shown at this caption is the balancing amount derived from the other figures in the schedule. The amount shown at this caption for a share outstanding throughout the period may not agree with the issuance of common stock because of the timing of sales of the Company’s shares.

(3)Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share, if any, divided by the beginning NAV per share. Total return is not annualized.

(4)The ratio reflects an annualized amount.

Note 12. Subsequent Events

The Company’s management evaluated subsequent events through the date of issuance of these consolidated financial statements. There have been no subsequent events to disclose except for the following:

Owl Rock Technology Finance Corp. II

Notes to Consolidated Financial Statements - Continued

Investor Commitments

As of November 10, 2022, the Company had approximately $3.3 billion in total Capital Commitments from investors (approximately $2.3 billion undrawn), of which $50.3 million is from entities affiliated with or related to the Adviser (approximately $19.7 million undrawn).

Dividend

On November 1, 2022, the Board declared a distribution of 90% of estimated fourth quarter investment company taxable income, if any, for shareholders of record on December 31, 2022, payable on or before January 31, 2023.

SPV Asset Facility II

On November 8, 2022 (the “Athena Funding II Closing Date”), Athena Funding II LLC (“Athena Funding II”), a Delaware limited liability company and newly formed subsidiary of the Company entered into a Loan and Management Agreement (the “SPV Asset Facility II”), with Athena Funding II, as Borrower, the Company, as Collateral Manager and Transferor, MUFG Bank, Ltd., as Administrative Agent, State Street Bank and Trust Company, as Collateral Agent and Collateral Administrator, Alter Domus (US) LLC as Custodian, the lenders from time to time parties thereto and the group agents from time to time parties thereto.

From time to time, the Company expects to sell and contribute certain investments to Athena Funding II pursuant to a Purchase and Sale Agreement, dated as of the Athena Funding II Closing Date, by and between the Company and Athena Funding II. No gain or loss will be recognized as a result of the contribution. Proceeds from the SPV Asset Facility II will be used to finance the origination and acquisition of eligible assets by Athena Funding II, including the purchase of such assets from the Company. The Company retains a residual interest in assets contributed to or acquired by Athena Funding II through its ownership of Athena Funding II. The maximum principal amount of the SPV Asset Facility II is $300 million; the availability of this amount is subject to a borrowing base test (which is based on the value of Athena Funding II’s assets from time to time, an advance rate and concentration limitations) and satisfaction of certain conditions, including collateral quality tests.

The SPV Asset Facility II provides for the ability to draw and redraw revolving loans under the SPV Asset Facility II for a period of up to two years after the Athena Funding II Closing Date (the “Athena Funding II Reinvestment Period”) unless the Athena Funding II Reinvestment Period is terminated sooner as provided in the SPV Asset Facility II. Unless otherwise terminated, the SPV Asset Facility II will mature November 8, 2027.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with “ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS”. This discussion contains forward-looking statements, which relate to future events or the future performance or financial condition of Owl Rock Technology Finance Corp. II and involves numerous risks and uncertainties, including, but not limited to, those described in our Form 10-K for the fiscal year ended December 31, 2021 and in “ITEM 1A. RISK FACTORS”. This discussion also should be read in conjunction with the “Cautionary Statement Regarding Forward Looking Statements” set forth on page 1 of this Quarterly Report on Form 10-Q. Actual results could differ materially from those implied or expressed in any forward-looking statements.

Overview

Owl Rock Technology Finance Corp. II (the “Company”, “we”, “us” or “our”) is a Maryland corporation formed on October 5, 2021. We were formed primarily to originate and make debt and equity investments in technology-related companies based primarily in the United States. We originate and invest in senior secured or unsecured loans, subordinated loans or mezzanine loans, and equity-related securities including common equity, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity. Our investment objective is to maximize total return by generating current income from our debt investments and other income producing securities, and capital appreciation from our equity and equity-linked investments.

We are managed by Owl Rock Technology Advisors II LLC (“the Adviser” or “our Adviser”). The Adviser is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), an indirect subsidiary of Blue Owl Capital Inc. ("Blue Owl") (NYSE: OWL) and part of Owl Rock, a division of Blue Owl focused on direct lending. Subject to the overall supervision of our board of directors (the “Board”), the Adviser manages our day-to-day operations, and provides investment advisory and management services to us. The Adviser or its affiliates may engage in certain origination activities and receive attendant arrangement, structuring or similar fees. The Adviser is responsible for managing our business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring our investments, and monitoring our portfolio companies on an ongoing basis through a team of investment professionals.

We conduct private offerings (each, a “Private Offering”) of our common shares to accredited investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended. At the closing of each Private Offering, each investor makes a capital commitment (a “Capital Commitment”) to purchase shares of our common stock pursuant to a subscription agreement entered into with us. Until the earlier of the listing of our common stock on a national securities exchange (an "Exchange Listing") and the end of the Commitment Period (as defined below), investors were required to fund drawdowns to purchase shares of our common stock up to the amount of their respective Capital Commitment on an as-needed basis each time we delivered a drawdown notice to our investors. The initial closing of the Private Offering occurred on December 1, 2021 (the “Initial Closing”). As of September 30, 2022, we had $3.2 billion in total Capital Commitments from investors, of which $50.3 million is from entities affiliated with or related to our Adviser. The “Commitment Period” will continue until the earlier of the (i) five year anniversary of the Final Closing and (ii) the seven year anniversary of the Initial Closing. If we have not consummated an Exchange Listing by the end of the Commitment Period, subject to extension for two additional one-year periods, in the sole discretion of the Board, the Board (subject to any necessary shareholder approvals and applicable requirements of the Investment Company Act of 1940 (the “1940 Act”)) will use its commercially reasonable efforts to wind down and/or liquidate and dissolve the Company in an orderly manner.

Placement activities are conducted by our officers and the Adviser. In addition, we may enter into agreements with placement agents or broker-dealers to solicit Capital Commitments including a dealer manager agreement with Blue Owl Securities LLC (“Blue Owl Securities”) pursuant to which Blue Owl Securities and certain participating broker-dealers solicited Capital Commitments and a placement agent agreement (the "Placement Agent Agreement") with Blue Owl pursuant to which employees of Blue Owl Securities conducted placement activities. Blue Owl Securities, an affiliate of Blue Owl, is registered as a broker-dealer with the SEC and is a member of the Financial Industry Regulatory Authority. In addition, the Company, the Adviser and third party placement agents may enter into placement agreements from time to time, pursuant to which such placement agents solicited Capital Commitments. Fees paid pursuant to these agreements were paid by our Adviser.

Blue Owl consists of three divisions: (1) Owl Rock, which focuses on direct lending, (2) Dyal, which focuses on providing capital to institutional alternative asset managers and (3) Oak Street, which focuses on real estate strategies. Owl Rock is comprised of the Adviser, Owl Rock Capital Advisors LLC (“ORCA”), Owl Rock Technology Advisors LLC ("ORTA"), Owl Rock Capital Private Fund Advisors LLC (“ORPFA”), and Owl Rock Diversified Advisors LLC (“ORDA” and together with the Adviser, ORCA, ORTA, ORPFA, and ORDA, the "Owl Rock Advisers"). As of September 30, 2022, the Adviser and its affiliates had $65.7 billion of assets under management across the Owl Rock division of Blue Owl. The Owl Rock Advisers are investment advisers.

The management of our investment portfolio is the responsibility of the Adviser and the Investment Committee. We consider these individuals to be our portfolio managers. The Investment Team, is led by Douglas I. Ostrover, Marc S. Lipschultz and Craig W. Packer and is supported by certain members of the Adviser's senior executive team and the Investment Committee. The Investment Team under the Investment Committee's supervision, sources investment opportunities, conducts research, performs due diligence on

potential investments, structures our investments and will monitor our portfolio companies on an ongoing basis. The Investment Committee is comprised of Douglas I. Ostrover, Marc S. Lipschultz, Craig W. Packer, Alexis Maged, Erik Bissonnette, Pravin Vazirani and Jon ten Oever. The Investment Committee meets regularly to consider our investments, direct our strategic initiatives and supervise the actions taken by the Adviser on our behalf. In addition, the Investment Committee reviews and determines whether to make prospective investments (including approving parameters or guidelines pursuant to which investments in broadly syndicated loans may be bought and sold), structures financings and monitors the performance of the investment portfolio. Each investment opportunity requires the approval of a majority of the Investment Committee. Follow-on investments in existing portfolio companies may require the Investment Committee's approval beyond that obtained when the initial investment in the portfolio company was made. In addition, temporary investments, such as those in cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less, may require approval by the Investment Committee. The compensation packages of certain Investment Committee members from the Adviser include various combinations of discretionary bonuses and variable incentive compensation based primarily on performance for services provided and may include shares of Blue Owl.

We may be prohibited under the 1940 Act from participating in certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, the prior approval of the SEC. We rely on an order for exemptive relief (the “Order”), that has been granted by the SEC to ORCA and certain of its affiliates, to permit us to co-invest with other funds managed by the Adviser or certain affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. Pursuant to the Order, we generally are permitted to co-invest with certain of our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the transactions, including the consideration to be paid, are reasonable and fair to us and our shareholders and do not involve overreaching by us or our shareholders on the part of any person concerned, (2) the transaction is consistent with the interests of our shareholders and is consistent with our investment objective and strategies, (3) the investment by our affiliates would not disadvantage us, and our participation would not be on a basis different from or less advantageous than that on which our affiliates are investing, and (4) the proposed investment by us would not benefit our Advisers or its affiliates or any affiliates person of any of them (other than the parties to the transaction, except to the extent permitted by the exemptive relief and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act. In addition,we have received an amendment to our Order to permit us to co-invest in our existing portfolio companies with certain affiliates that are private funds even if such private funds did not have an investment in such existing portfolio company. The Owl Rock Advisers’ investment allocation policy seeks to ensure equitable allocation of investment opportunities between us and/or other funds managed by our Adviser or its affiliates. As a result of the exemptive relief, there could be significant overlap in our investment portfolio and the investment portfolio of the Owl Rock clients and/or other funds managed by the Adviser or its affiliates that could avail themselves of the exemptive relief and that have an investment objective similar to ours.

On December 10, 2021, we formed a wholly-owned subsidiary, OR Tech Lending II LLC, a Delaware limited liability company, which is intended to hold a California finance lenders license. OR Tech Lending II LLC is intended to originate loans to borrowers headquartered in California. From time to time the Company may form wholly-owned subsidiaries to facilitate the normal course of business.

We have elected to be regulated as a BDC under the 1940 Act and as a regulated investment company (“RIC”) for tax purposes under the Internal Revenue Code of 1986, as amended (the “Code”). As a result, we are required to comply with various statutory and regulatory requirements, such as:

•the requirement to invest at least 70% of our assets in “qualifying assets”, as such term is defined in the 1940 Act;

•source of income limitations;

•asset diversification requirements; and

•the requirement to distribute (or be treated as distributing) in each taxable year at least 90% of our investment company taxable income and tax-exempt interest for that taxable year.

In addition, we will not invest more than 20% of our total assets in companies whose principal place of business is outside the United States, although we do not generally intend to invest in companies whose principal place of business is in an emerging market and we have adopted a policy to invest, under normal circumstances at least 80% of the value of our total assets in “technology-related” businesses (as defined below).

Economic Developments and COVID-19

We have observed and continue to observe supply chain interruptions, significant labor and resource shortages, commodity inflation, rapidly rising interest rates, economic sanctions as a result of the ongoing war between Russia and Ukraine and elements of geopolitical, economic and financial market instability in the United States, the United Kingdom, the European Union and China. One or more of these factors may contribute to increased market volatility, may have long term effects in the United States and worldwide financial markets, and may cause economic uncertainties or deterioration in the United States and worldwide. Additionally, in the

event that the U.S. economy enters into a protracted recession, it is possible that the results of some of the middle-market companies similar to those in which we invest could experience deterioration. While we are not seeing signs of an overall, broad deterioration in our results or those of our portfolio companies at this time, there can be no assurance that the performance of certain of our portfolio companies will not be negatively impacted by economic conditions, which could have a negative impact on our future results.

Over two years after COVID-19 was recognized as a pandemic by the World Health Organization, its continued persistence in the United States and worldwide and the magnitude of the economic impact of the outbreak continue to create an uncertain environment in which we and our portfolio companies operate. The preventative measure taken to contain or mitigate the spread of COVID-19 have caused, and may in the future cause, business shutdowns, cancellations of events and travel and other disruptions. We have built our portfolio management team to include workout experts and on a quarterly basis continue to closely monitor our portfolio companies and understand and mitigate issues. We are unable to predict the duration of any business and supply-chain disruptions or labor and resource shortages, the extent to which COVID-19 or economic conditions will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition.

Our Investment Framework

We are a Maryland corporation organized primarily to originate and make debt and equity investments in technology-related companies based primarily in the United States. We originate and invest in senior secured or unsecured loans, subordinated loans or mezzanine loans, broadly syndicated loans, and equity-related securities including common equity, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity. Our investment objective is to maximize total return by generating current income from debt investments and other income producing securities, and capital appreciation from our equity and equity-linked investments, including publicly traded debt instruments. We may hold our investments directly or through special purpose vehicles. We generally intend to invest in companies with a low loan-to-value ratio, which we consider to be 50% or below. Since our Adviser’s affiliates began investment activities in April 2016 through September 30, 2022, our Adviser or its affiliates have originated $69.4 billion aggregate principal amount of investments across multiple industries, of which $65.9 billion of aggregate principal amount of investments prior to any subsequent exits or repayments, was retained by either us or a corporation or fund advised by our Adviser or its affiliates.

We invest in a broad range of established and high growth technology companies that are capitalizing on the large and growing demand for technology products and services. These companies use technology extensively to improve business processes, applications and opportunities or seek to grow through technological developments and innovations. These companies operate in technology-related industries or sectors which include, but are not limited to, application software, systems software, healthcare information technology, technology services and infrastructure, financial technology and internet and digital media. Within each industry or sector, we intend to invest in companies that are developing or offering goods and services to businesses and consumers which utilize scientific knowledge, including techniques, skills, methods, devices and processes, to solve problems. We refer to all of these companies as “technology-related” companies and intend, under normal circumstances, to invest at least 80% of the value of our total assets in such businesses and to target portfolio companies that comprise 1-2% of our portfolio. Generally, no individual portfolio company is expected to comprise greater than 5% of our portfolio; however, from time to time certain of our investments may comprise greater than 5% of our portfolio.

We expect that generally our portfolio composition will be majority debt or income producing securities, which may include “covenant-lite” loans (as defined below), with a lesser allocation to equity or equity-linked opportunities, including publicly traded debt instruments. In addition, we may invest a portion of our portfolio in opportunistic investments and broadly syndicated loans, which will not be our primary focus, but will be intended to enhance returns to our shareholders and from time to time, we may evaluate and enter into strategic portfolio transactions which may result in additional portfolio companies which we are considered to control. These investments may include high-yield bonds and broadly syndicated loans, including publicly traded debt instruments, which are typically originated and structured by banks on behalf of large corporate borrowers with employee counts, revenues, EBITDAs and enterprise values larger than those of middle market companies. In addition, we generally do not intend to invest more than 20% of our total assets in companies whose principal place of business is outside the United States, although we do not generally intend to invest in companies whose principal place of business is in an emerging market. Our portfolio composition may fluctuate from time to time based on market conditions and interest rates.

Covenants are contractual restrictions that lenders place on companies to limit the corporate actions a company may pursue. Generally, the loans in which we expect to invest will have financial maintenance covenants, which are used to proactively address materially adverse changes in a portfolio company’s financial performance. However, to a lesser extent, we may invest in “covenant-lite” loans. We use the term “covenant-lite” to refer generally to loans that do not have a complete set of financial maintenance covenants. Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition. Accordingly, to the extent we invest in “covenant-lite” loans, we may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments in or exposure to loans with financial maintenance covenants. We classify our debt investments as “traditional financing” or “growth capital” based on a number of factors.

Traditional financings are typically senior secured loans primarily in the form of first lien loans (including "unitranche" loans, which are loans that combine both senior and subordinated debt, generally in a first lien position) and second lien loans. In connection with our senior secured loans, we generally receive a security interest in certain of the assets of the borrower and consequently such assets serve as collateral in support of the repayment of such senior secured loans.

Growth capital investments are typically unsecured obligations of the borrower, and might be structured as unsecured indebtedness, convertible bonds, convertible equity, preferred equity, and common equity. We seek to limit the downside potential of our investments by negotiating covenants in connection with our investments consistent with preservation of our capital. Such restrictions may include affirmative covenants (including reporting requirements), negative covenants (including financial covenants), lien protection, change of control provisions and board rights, including either observation rights or rights to a seat on the board under some circumstances. Our equity investments are typically not control-oriented investments and we may structure such equity investments to include provisions protecting our rights as a minority-interest holder.

We target portfolio companies where we can structure larger transactions. As of September 30, 2022, our average investment size in each of our portfolio companies was approximately $34 million based on fair value. As of September 30, 2022, investments we classify as traditional financing, excluding certain investments that fall outside our typical borrower profile, represented 68.1% of our total portfolio based on fair value and these portfolio companies had weighted average annual revenue of $756 million, weighted average annual EBITDA of $195 million and a weighted average enterprise value of $5.2 billion. As of September 30, 2022, investments we classify as growth capital represented 24.4% of our total portfolio based on fair value and these portfolio companies had a weighted average enterprise value of $12.3 billion.

The companies in which we intend to make investments in will use our capital primarily to support their growth, acquisitions, market or product expansion, refinancings and/or recapitalizations. The debt in which we intend to make investments in typically will not be rated by any rating agency, but if these instruments were rated, they would likely receive a rating of below investment grade (that is, below BBB- or Baa3), which is often referred to as “high yield” or “junk”.

The majority of our investments are indexed to SOFR; however, we have contracts that are indexed to USD-LIBOR and are monitoring this activity, evaluating the related risks and our exposure, and adding alternative language to contracts, where necessary. Certain contracts have an orderly market transition already in process. However, it is not possible to predict the effect of any of these developments, and any future initiatives to regulate, reform or change the manner of administration of LIBOR could result in adverse consequences to the rate of interest payable and receivable on, market value of and market liquidity for LIBOR-based financial instruments.

Key Components of Our Results of Operations

Investments

We focus primarily on originating and making debt and equity investments in technology-related companies based primarily in the United States.

Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make.

In addition, as part of our risk strategy on investments, we may reduce the levels of certain investments through partial sales or syndication to additional lenders.

Revenues

We generate revenues primarily in the form of interest income from the investments we hold. In addition, we may generate income from dividends on either direct equity investments or equity interests obtained in connection with originating loans, such as options, warrants or conversion rights. Our debt investments typically have a term of three to ten years.

Our investment portfolio may consist of floating rate loans. Macro trends in base interest rates like London Interbank Offered Rate (“LIBOR”), the Secured Overnight Financing Rate ("SOFR") and any other alternative reference rates may affect our net investment income over the long term. However, because we generally intend to originate loans to a small number of portfolio companies each quarter, and those investments may vary in size, our results in any given period, including the interest rate on investments that may be sold or repaid in a period compared to the interest rate of new investments made during that period, may be idiosyncratic, and reflect the characteristics of the particular portfolio companies that we invested in or exited during the period and not necessarily any trends in our business or macro trends.

Loan origination fees, original issue discount and market discount or premium are capitalized, and we accrete or amortize such amounts under U.S. generally accepted accounting principles (“U.S. GAAP”) as interest income using the effective yield method for term instruments and the straight-line method for revolving or delayed draw instruments. Repayments of our debt investments can reduce interest income from period to period. The frequency or volume of these repayments may fluctuate significantly. We record

prepayment premiums on loans as interest income. We may also generate revenue in the form of commitment, loan origination, structuring, or due diligence fees, fees for providing managerial assistance to our portfolio companies and possibly consulting fees. Certain of these fees may be capitalized and amortized as additional interest income over the life of the related loan.

Dividend income on equity investments is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded companies.

Our portfolio activity will also reflect the proceeds from sales of investments. We will recognize realized gains or losses on investments based on the difference between the net proceeds from the disposition and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized. We record current period changes in fair value of investments that are measured at fair value as a component of the net change in unrealized gains (losses) on investments in the Consolidated Statements of Operations.

Expenses

Our primary operating expenses include the payment of the management fee, incentive fee, expenses reimbursable under the Administration Agreement and Investment Advisory Agreement, legal and professional fees, interest and other debt expenses, offering and organization expenses, and other operating expenses. The management fee and incentive fee compensate our Adviser for work in identifying, evaluating, negotiating, closing, monitoring and realizing our investments.

Except as specifically provided below, we anticipate that all investment professionals and staff of the Adviser, when and to the extent engaged in providing investment advisory and management services to us, and the base compensation, bonus and benefits, and the routine overhead expenses, of such personnel allocable to such services, will be provided and paid for by the Adviser. In addition, the Adviser shall be solely responsible for any placement or “finder’s” fees payable to placement agents engaged by the Company or its affiliates in connection with the offering of securities by the Company. We will bear our allocable portion of the costs of the compensation, benefits and related administrative expenses (including travel expenses) of our officers who provide operational and administrative services hereunder, their respective staffs and other professionals who provide services to us (including, in each case, employees of the Adviser or an affiliate) who assist with the preparation, coordination, and administration of the foregoing or provide other “back office” or “middle office” financial or operational services to us. We shall reimburse the Adviser (or its affiliates) for an allocable portion of the compensation paid by the Adviser (or its affiliates) to such individuals (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs and in acting on our behalf). We also will bear all other costs and expenses of our operations, administration and transactions, including, but not limited to (i) investment advisory fees, including Management Fees and Incentive Fees, to the Adviser, pursuant to the Investment Advisory Agreement; (ii) our allocable portion of overhead and other expenses incurred by the Adviser in performing its administrative obligations under the Investment Advisory Agreement and (iii) all other costs and expenses of our operations and transactions including, without limitation, those relating to:

•the cost of our organization and any offerings;

•the cost of calculating our net asset value, including the cost of any third-party valuation services;

•the cost of effecting any sales and repurchases of the common stock and other securities;

•fees and expenses payable under any dealer manager agreements, if any;

•debt service and other costs of borrowings or other financing arrangements;

•costs of hedging;

•expenses, including travel expense, incurred by the Adviser, or members of the investment team, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing our rights;

•escrow agent, transfer agent and custodial fees and expenses;

•fees and expenses associated with marketing efforts;

•federal and state registration fees, any stock exchange listing fees and fees payable to rating agencies;

•federal, state and local taxes;

•independent directors’ fees and expenses, including certain travel expenses;

•costs of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or other regulatory bodies) and other reporting and compliance costs, including registration fees, listing fees and licenses, and the compensation of professionals responsible for the preparation of the foregoing;

•the costs of any reports, proxy statements or other notices to our shareholders (including printing and mailing costs);

•the costs of any shareholder or director meetings and the compensation of personnel responsible for the preparation of the foregoing and related matters;

•commissions and other compensation payable to brokers or dealers;

•research and market data;

•fidelity bond, directors and officers errors and omissions liability insurance and other insurance premiums;

•direct costs and expenses of administration, including printing, mailing, long distance telephone and staff;

•fees and expenses associated with independent audits, outside legal and consulting costs;

•costs of winding up;

•costs incurred in connection with the formation or maintenance of entities or vehicles to hold our assets for tax or other purposes;

•extraordinary expenses (such as litigation or indemnification); and

•costs associated with reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws.

We expect, but cannot ensure, that our general and administrative expenses will increase in dollar terms during periods of asset growth, but will decline as a percentage of total assets during such periods.

Leverage

The amount of leverage we use in any period depends on a variety of factors, including cash available for investing, the cost of financing and general economic and market conditions. On November 2, 2021, we received shareholder approval that allowed us to reduce our asset coverage ratio from 200% to 150% effective as of November 3, 2021. As a result, we are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to the common stock if our asset coverage, as defined in the 1940 Act, would at least be equal to 150% immediately after each such issuance. This reduced asset coverage ratio permits us to double the amount of leverage we can incur. For example, under a 150% asset coverage ratio we may borrow $2 for investment purposes of every $1 of investor equity whereas under a 200% asset coverage ratio we may only borrow $1 for investment purposes for every $1 of investor equity. Our current target leverage ratio is 0.75x-1.25x.

In any period, our interest expense will depend largely on the extent of our borrowing and we expect interest expense will increase as we increase our leverage over time subject to the limits of the 1940 Act. In addition, we may dedicate assets to financing facilities.

Market Trends

We believe the technology investment lending environment provides opportunities for us to meet our goal of making investments that generate an attractive total return based on a combination of the following factors.

Limited Availability of Capital for Technology Companies. We believe that technology companies have limited access to capital, driven by a reduction in activity from commercial and investment banks, and a lack of dedicated pools of capital focused on technology companies. Traditional lenders, such as commercial and investment banks, generally do not have flexible product offerings that meet the needs of technology-related companies. In recent years, many commercial and investment banks have focused their efforts and resources on lending to large corporate clients and managing capital markets transactions rather than lending to technology-related companies. In addition, these lenders may be constrained in their ability to underwrite and hold loans and high yield securities, as well as their ability to provide equity financing, as they seek to meet existing and future regulatory capital requirements. We also believe that there is a lack of scaled market participants that are willing to provide and hold meaningful amounts of a customized financing solution for technology companies. As a result, we believe our focus on technology-related companies and our ability to invest across the capital structure, coupled with a limited supply of capital providers, presents an attractive opportunity to invest in technology companies.

Capital Markets Have Been Unable to Fill the Void Left by Banks. While underwritten bond and syndicated loan markets have been robust in recent years, many technology companies are less able to access these markets for reasons including the following:

High Yield Market – Many technology companies generally are not issuing debt in an amount large enough to be an attractively sized bond. High yield bonds are generally purchased by institutional investors who, among other things, are highly focused on the liquidity characteristics of the bond being issued. For example, mutual funds and exchange traded funds (“ETFs”) are significant buyers of underwritten bonds. However, mutual funds and ETFs generally require the ability to liquidate their investments

quickly in order to fund investor redemptions and/or comply with regulatory requirements. Accordingly, the existence of an active secondary market for bonds is an important consideration in these entities’ initial investment decision. Because there is typically little or no active secondary market for the debt of U.S. middle market companies, mutual funds and ETFs generally do not provide debt capital to technology companies. We believe this is likely to be a persistent problem and creates an advantage for those like us who have a more stable capital base and have the ability to invest in illiquid assets.

Syndicated Loan Market – Loan issue size and liquidity are key drivers of institutional appetite and, correspondingly, underwriters’ willingness to underwrite the loans. Loans arranged through a bank are done either on a “best efforts” basis or are underwritten with terms plus provisions that permit the underwriters to change certain terms, including pricing, structure, yield and tenor, otherwise known as “flex”, to successfully syndicate the loan, in the event the terms initially marketed are insufficiently attractive to investors. Loans provided by companies such as ours provide certainty to issuers in that we can commit to a given amount of debt on specific terms, at stated coupons and with agreed upon fees. As we are the ultimate holder of the loans, we do not require market “flex” or other arrangements that banks may require when acting on an agency basis.

Robust Demand for Debt Capital. According to 451 Research’s M&A KnowledgeBase, there was approximately $2.6 trillion of mergers and acquisitions activity in the technology and software industries from 2015 through 2021. We believe technology companies will continue to require access to capital to refinance existing debt, support growth and finance acquisitions. In addition, we believe the large amount of uninvested capital held by funds of private equity firms, estimated by Preqin Ltd., an alternative assets industry data and research company, to be $1.7 trillion as of January 2022, coupled with a growing focus on technology investing by private equity sponsors, will continue to drive deal activity. We expect that technology companies, private equity sponsors, venture capital firms, and entrepreneurs will continue to seek partners to provide flexible financing for their businesses with debt and equity investments provided by companies such as us.

Technology Spend is Large and Increasing. According to Gartner, a research and advisory company, global technology spend was $3.7 trillion in 2019 and is expected to grow to more than $4.3 trillion by 2023. We believe global demand for technology products and services will continue to grow rapidly, and that that growth will stimulate demand for capital from technology companies.

Attractive Investment Dynamics. An imbalance between the supply of, and demand for, capital creates attractive pricing dynamics. With respect to the debt investments in technology companies, we believe the directly negotiated nature of such financings generally provides more favorable terms to the lender, including stronger covenant and reporting packages, better call protection, and lender protective change of control provisions. Further, we believe that historical default rates for technology and software companies have been lower, and recovery rates have been higher, as compared to the broader leveraged finance market, leading to lower cumulative losses. With respect to equity and equity-linked investments, we will seek to structure these investments with meaningful shareholder protections, including, but not limited to, anti-dilution, anti-layering, and liquidation preferences, which we believe will create the potential for meaningful risk-adjusted long-term capital gains in connection with the future liquidity events of these technology companies. Lastly, we believe that in the current environment lenders with available capital may be able to take advantage of attractive investment opportunities as the economy reopens and may be able to achieve improved economic spreads and documentation terms.

Compelling Business Models. We believe that the products and services that technology companies provide often have high switching costs and are fundamental to the operations and success of their customers. We generally invest in dominant or growing players in niche markets that are selling products to established customer bases. As a result, technology companies have attributes that make them compelling investments, including strong customer retention rates, and highly recurring and predictable revenue. Further, technology companies are typically highly capital efficient, with limited capital expenditures and high free cash flow conversion. In addition, the replicable nature of technology products creates substantial operating leverage which typically results in strong profitability.

We believe that software businesses make compelling investments because they are inherently diversified into a variety of sectors due to end market applications and have been one of the more defensive sectors throughout economic cycles.

Attractive Opportunities in Investments in Technology Companies. We invest in the debt and equity of technology companies. We believe that opportunities in the debt of technology companies are significant because of the floating rate structure of most senior secured debt issuances and because of the strong defensive characteristics of these types of investments. Given the current low interest rate environment, we believe that debt issues with floating interest rates offer a superior return profile as compared with fixed-rate investments, since floating rate structures are generally less susceptible to declines in value experienced by fixed-rate securities in a rising interest rate environment. Senior secured debt also provides strong defensive characteristics. Senior secured debt has priority in payment among an issuer’s security holders whereby holders are due to receive payment before junior creditors and equity holders. Further, these investments are generally secured by the issuer’s assets, which may provide protection in the event of a default.

We believe that opportunities in the equity of technology companies are significant because of the potential to generate meaningful capital appreciation by participating in the growth in the portfolio company and the demand for its products and services.

Moreover, we believe that the high-growth profile of a technology company will generally make it a more attractive candidate for a liquidity event than a company in a non-high growth industry.

Portfolio and Investment Activity

As of September 30, 2022, based on fair value, our portfolio consisted of 68.7% first lien senior secured debt investments (of which 48.0% we consider to be unitranche debt investments (including “last out” portions of such loans)), 6.7% second lien senior secured debt investments, 3.4% unsecured debt investments, 18.9% preferred equity investments, and 2.3% common equity investments.

As of September 30, 2022, our weighted average total yield of the portfolio at fair value and amortized cost was 9.6% and 9.4%, respectively, and our weighted average yield of debt and income producing securities at fair value and amortized cost was 10.2% and 10.0%, respectively.

As of September 30, 2022, we had investments in 49 portfolio companies with an aggregate fair value of $1.7 billion. As of September 30, 2022, we had net leverage of 0.65x debt-to-equity.

We expect the pace of our originations to vary with the pace of repayments and the pace at which we raise funds in our private offering. Currently, rapidly rising interest rates, reduced refinancing activity and market uncertainty has led to a decline in merger and acquisitions and other public market activity which in turn has led to decreased repayments over the quarter; however, because we have continued to raise funds in our private offerings, the pace of our originations is strong. We continue to focus on investing in industries we view as recession resistant and that we are familiar with, including service oriented sectors such as software and healthcare, and the credit quality of our portfolio remains consistent. The majority of our investments are supported by sophisticated financial sponsors who provide operational and financial resources. In addition, the current lending environment is favorable to direct lenders and Owl Rock continues to have the opportunity to invest in large unitranche transactions in excess of $1 billion in size which gives us the ability to structure the terms and spreads of such deals to include wider spreads, lower loan to values, extended call protection, attractive leverage profiles and credit protection.

We have also begun to invest in specialty financing portfolio companies, including Amergin and Chapford SMA. These companies may use our capital to support acquisitions which could lead to increased dividend income. See "Specialty Financing Portfolio Companies."

We are continuing to monitor the effect that market volatility, including as a result of a rising interest rate environment may have on our portfolio companies and our investment activities. We believe that the rapid rise in interest rates will meaningfully benefit our net investment income as we continue to see the impact of interest rates exceeding our interest rate floors.

Our investment activity for the three months ended September 30, 2022 is presented below (information presented herein is at par value unless otherwise indicated).


	Three Months Ended September 30,
($ in thousands)	2022
New investment commitments
Gross originations	$	1,001,709
Less: Sell downs	—
Total new investment commitments	$	1,001,709
Principal amount of investments funded:
First-lien senior secured debt investments	$	685,025
Second-lien senior secured debt investments	70,836
Unsecured debt investments	—
Preferred equity investments	122,985
Common equity investments	25,521
Total principal amount of investments funded	$	904,367
Principal amount of investments sold or repaid:
First-lien senior secured debt investments	$	—
Second-lien senior secured debt investments	—
Unsecured debt investments	—
Preferred equity investments	—
Common equity investments	—
Total principal amount of investments sold or repaid	$	—
Number of new investment commitments in new portfolio companies(1)	17
Average new investment commitment amount	$	57,946
Weighted average term for new debt investment commitments (in years)	6.6
Percentage of new debt investment commitments at floating rates	100.0		%
Percentage of new debt investment commitments at fixed rates	—		%
Weighted average interest rate of new debt investment commitments(2)	9.9		%
Weighted average spread over applicable base rate of new floating rate debt investment commitments	6.3		%

(1)Number of new investment commitments represents commitments to a particular portfolio company.

(2)Assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month SOFR, which was 3.59% as of September 30, 2022.

As of September 30, 2022, our investments consisted of the following:


	September 30, 2022
($ in thousands)	Amortized Cost		Fair Value
First-lien senior secured debt investments(1)	$	1,146,857	$	1,145,937
Second-lien senior secured debt investments	112,811		110,810
Unsecured debt investments	62,536		55,939
Preferred equity investments	321,738		315,276
Common equity investments	37,637		37,590
Total Investments	$	1,681,579	$	1,665,552

(1)48% of which we consider unitranche loans as of September 30, 2022.

We use GICS for classifying the industry groupings of our portfolio companies. The industry composition of investments based on fair value as of September 30, 2022 was as follows:


	September 30, 2022
Aerospace & Defense	4.0	%
Application Software	13.7	%

Beverages	0.6	%

Capital Markets	0.6	%
Commercial Services & Supplies	1.2	%
Construction & Engineering	0.6	%
Consumer Finance	0.9	%
Diversified Consumer Services	0.6	%
Diversified Financial Services	4.0	%
Diversified Support Services	1.5	%
Electrical Equipment	7.5	%
Food & Staples Retailing	8.4	%
Health Care Technology	7.7	%
Health Care Providers & Services	2.8	%



Insurance	2.2	%

IT Services	8.3	%

Pharmaceuticals	1.0	%



Specialty Retail	1.7	%
Systems Software	32.7	%


Total	100.0	%

We classify the industries of our portfolio companies by end-market (such as health care technology) and not by the product or services (such as software) directed to those end-markets.

The table below describes investments by geographic composition based on fair value as of September 30, 2022:


	September 30, 2022
United States:
Midwest	7.3	%
Northeast	24.2	%
South	37.7	%
West	22.0	%
International	8.8	%









Total	100.0	%

The weighted average yields and interest rates of our investments at fair value as of September 30, 2022 were as follows:


	September 30, 2022
Weighted average total yield of portfolio	9.6	%
Weighted average total yield of debt and income producing securities	10.2	%
Weighted average interest rate of debt securities	9.0	%
Weighted average spread over base rate of all floating rate investments	6.2	%

The weighted average yield of our debt and income producing securities is not the same as a return on investment for our shareholders but, rather, relates to a portion of our investment portfolio and is calculated before the payment of all of our and our subsidiaries’ fees and expenses. The weighted average yield was computed using the effective interest rates as of each respective date, including accretion of original issue discount and loan origination fees, but excluding investments on non-accrual status, if any. There can be no assurance that the weighted average yield will remain at its current level.

Our Adviser monitors our portfolio companies on an ongoing basis. It monitors the financial trends of each portfolio company to determine if they are meeting their respective business plans and to assess the appropriate course of action with respect to

each portfolio company. Our Adviser has several methods of evaluating and monitoring the performance and fair value of our investments, which may include the following:

•assessment of success of the portfolio company in adhering to its business plan and compliance with covenants;

•periodic and regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor, to discuss financial position, requirements and accomplishments;

•comparisons to other companies in the portfolio company’s industry; and

•review of monthly or quarterly financial statements and financial projections for portfolio companies.

As part of the monitoring process, our Adviser employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our Adviser rates the credit risk of all investments on a scale of 1 to 5. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or acquisition), although it may also take into account the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors.

The rating system is as follows:


Investment Rating						Description
1						Investments with a rating of 1 involve the least amount of risk to our initial cost basis. The borrower is performing above expectations, and the trends and risk factors for this investment since origination or acquisition are generally favorable;
2						Investments rated 2 involve an acceptable level of risk that is similar to the risk at the time of origination or acquisition. The borrower is generally performing as expected and the risk factors are neutral to favorable. All investments or acquired investments in new portfolio companies are initially assessed a rate of 2;
3						Investments rated 3 involve a borrower performing below expectations and indicates that the loan’s risk has increased somewhat since origination or acquisition;
4						Investments rated 4 involve a borrower performing materially below expectations and indicates that the loan’s risk has increased materially since origination or acquisition. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 120 days past due); and
5						Investments rated 5 involve a borrower performing substantially below expectations and indicates that the loan’s risk has increased substantially since origination or acquisition. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Loans rated 5 are not anticipated to be repaid in full and we will reduce the fair value of the loan to the amount we anticipate will be recovered.

Our Adviser rates the investments in our portfolio at least quarterly and it is possible that the rating of a portfolio investment may be reduced or increased over time. For investments rated 3, 4 or 5, our Adviser enhances its level of scrutiny over the monitoring of such portfolio company.

The following table shows the composition of our portfolio on the 1 to 5 rating scale as of September 30, 2022:


	September 30, 2022
Investment Rating	Investments at Fair Value		Percentage of Total Portfolio
($ in thousands)
1	$	—	—	%
2	1,665,552		100.0
3	—		—
4	—		—
5	—		—
Total	$	1,665,552	100.0	%

The following table shows the amortized cost of our performing and non-accrual debt investments as of September 30, 2022:


	September 30, 2022
($ in thousands)	Amortized Cost		Percentage
Performing	$	1,681,579	100.0	%
Non-accrual	—		—
Total	$	1,681,579	100.0	%

Specialty Financing Portfolio Companies

Amergin

Amergin was created to invest in a leasing platform focused on railcar and aviation assets. Amergin consists

of Amergin AssetCo and Amergin Asset Management LLC, which has entered into a Servicing Agreement with Amergin AssetCo. We made a $20.0 million equity commitment to Amergin AssetCo on July 1, 2022. Our investment in Amergin is a co-investment made with our affiliates in accordance with the terms of the exemptive relief that we received from the SEC. We do not consolidate our equity interest in Amergin AssetCo.

Chapford SMA

Chapford SMA is a portfolio company created to invest in life settlement assets. On July 18, 2022, we made a $5.2 million equity commitment to Chapford SMA. Our investment in Chapford SMA is a co-investment with our affiliates in accordance with the terms of the exemptive relief that we received from the SEC.

Results of Operations

The following table represents the operating results for the three and nine months ended September 30, 2022:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
($ in thousands)	2022			2022
Total Investment Income	$	30,798		$	41,682
Less: Expenses	18,880			29,645
Net Investment Income (Loss) Before Taxes	$	11,918		$	12,037
Less: Income taxes, including excise taxes	13			13
Net Investment Income (Loss) After Taxes	$	11,905		$	12,024
Net change in unrealized gain (loss)	(1,137)			(10,469)
Net realized gain (loss)	70			98
Net Increase (Decrease) in Net Assets Resulting from Operations	$	10,838		$	1,653

Net increase (decrease) in net assets resulting from operations can vary from period to period as a result of various factors, including the level of new investment commitments, expenses, the recognition of realized gains and losses and changes in unrealized appreciation and depreciation on the investment portfolio. Additionally, we were initially capitalized on November 30, 2021 and commenced investing activities in January 2022. As a result, comparisons may not be meaningful.

Investment Income

Investment income for the three and nine months ended September 30, 2022 was as follows:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
($ in thousands)	2022			2022
Interest income	$	21,677		$	27,780
Payment-in-kind interest income	1,557			2,484
Payment-in-kind dividend income	4,552			8,226
Other income	3,012			3,192
Total investment income	$	30,798		$	41,682

For the Three Months Ended September 30, 2022

Investment income was $30.8 million for the three months ended September 30, 2022 including PIK interest income of $1.6 million, PIK dividend income of $4.6 million, and other income of $3.0 million primarily from incremental fee income, which are fees that are generally available to us as a result of closing investment and generally paid at the time of closing. We expect that investment income will vary based on a variety of factors including the pace of our originations and repayments.

For the Nine Months Ended September 30, 2022

Investment income was $41.7 million for the nine months ended September 30, 2022 including PIK interest income of $2.5 million, PIK dividend income of $8.2 million, and other income of $3.2 million primarily from incremental fee income, which are fees that are generally available to us as a result of closing investment and generally paid at the time of closing. We expect that investment income will vary based on a variety of factors including the pace of our originations and repayments. Additionally, we were initially capitalized on November 30, 2021 and commenced investing activities in January 2022. As a result, comparisons may not be meaningful.

Expenses

Expenses for the three and nine months ended September 30, 2022 were as follows:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
($ in thousands)	2022			2022
Interest expense	$	8,707		$	11,202
Management fees	7,142			13,278
Incentive fees	1,323			1,323
Offering expenses	120			238
Professional fees	620			1,221
Directors' fees	277			817

Other general and administrative	691			1,566
Total expenses	$	18,880		$	29,645

Under the terms of the Administration Agreement, we reimburse the Adviser for services performed for us. In addition, pursuant to the terms of the Administration Agreement, the Adviser may delegate its obligations under the Administration Agreement to an affiliate or to a third party and we reimburse the Adviser for any services performed for us by such affiliate or third party.

For the Three and Nine September 30, 2022

For the three and nine months ended September 30, 2022 total expenses were $18.9 million and $29.6 million, respectively, primarily due to incurred management fees, initial organization expenses, professional fees, and director's fees as a result of ramping the portfolio. Additionally, we were initially capitalized on November 30, 2021 and commenced investing activities in January 2022. As a result, comparisons may not be meaningful.

Income Taxes, Including Excise Taxes

We have elected to be treated as a RIC under Subchapter M of the Code, and we intend to operate in a manner so as to continue to qualify for the tax treatment applicable to RICs. To qualify for tax treatment as a RIC, we must, among other things, distribute to our shareholders in each taxable year generally at least 90% of our investment company taxable income, as defined by the Code, and net tax-exempt income for that taxable year. To maintain our tax treatment as a RIC, we, among other things, intend to make the requisite distributions to our shareholders, which generally relieves us from corporate-level U.S. federal income taxes.

Depending on the level of taxable income earned in a tax year, we can be expected to carry forward taxable income (including net capital gains, if any) in excess of current year dividend distributions from the current tax year into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such income, we will accrue excise tax on estimated excess taxable income.

For the three and nine months ended September 30, 2022, U.S federal excise taxes were $13 thousand.

Net Change in Unrealized Gains (Losses)

We fair value our portfolio investments quarterly and any changes in fair value are recorded as unrealized gains or losses. During the three and nine months ended September 30, 2022, net change in unrealized gains (losses) was comprised of the following:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
($ in thousands)	2022			2022
Net change in unrealized gain (loss) on investments	$	(851)		$	(10,026)
Net change in unrealized gain (loss) on translation of assets and liabilities in foreign currencies	(286)			$	(443)
Net change in unrealized gain (loss)	$	(1,137)		$	(10,469)

For the Three Months Ended September 30, 2022

For the three months ended September 30, 2022, the net unrealized loss was primarily driven by an decrease in the fair value of our investments compared to the initial purchase. The primary drivers of our portfolio’s unrealized losses were current market conditions, including public market volatility and credit spreads widening across the broader market. Additionally, we were initially capitalized on November 30, 2021 and commenced investing activities in January 2022. As a result, comparisons may not be meaningful.

For the Nine Months Ended September 30, 2022

For the nine months ended September 30, 2022, the net unrealized loss was primarily driven by an decrease in the fair value of our investments compared to the initial purchase. The primary drivers of our portfolio’s unrealized losses were current market conditions, including public market volatility and credit spreads widening across the broader market. Additionally, we were initially capitalized on November 30, 2021 and commenced investing activities in January 2022. As a result, comparisons may not be meaningful.

Net Realized Gains (Losses)

The realized gains and losses on fully exited portfolio companies, partially exited portfolio companies and foreign currency transactions during the three and nine months ended September 30, 2022 were comprised of the following:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
($ in thousands)	2022			2022
Net realized gain (loss) on investments	$	—		$	24
Net realized gain (loss) on foreign currency transactions	70			74
Net realized gain (loss)	$	70		$	98

We were initially capitalized on November 30, 2021 and commenced investing activities in January 2022. As a result, comparisons may not be meaningful.

Financial Condition, Liquidity and Capital Resources

Our liquidity and capital resources are generated primarily from the proceeds of capital drawdowns of our privately placed Capital Commitments, cash flows from interest, dividends and fees earned from our investments and principal repayments, and our credit facilities. The primary uses of our cash are (i) investments in portfolio companies and other investments and to comply with certain portfolio diversification requirements, (ii) the cost of operations (including paying or reimbursing our Adviser) and (iii) cash distributions to the holders of our shares.

We may from time to time enter into debt facilities or issue debt securities. Additional financings could include SPV drop down facilities and unsecured notes. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage. Further, we maintain sufficient borrowing capacity within the 150% asset coverage limitation to cover any outstanding unfunded commitments we are required to fund.

Cash as of September 30, 2022, is expected to be sufficient for our investing activities and to conduct our operations in the near term. Our long-term cash needs will include principal payments on outstanding indebtedness and funding of additional portfolio investments. Funds for long-term cash needs will come from unused net proceeds from financing activities and our capital commitments. We believe that our liquidity and sources of capital are adequate to satisfy our short and long-term cash requirements. We cannot, however, be certain that these sources of funds will be available at a time and upon terms acceptable to us in sufficient amounts in the future.

As of September 30, 2022, we had $20.8 million in cash. During the nine months ended September 30, 2022, we used $1.7 billion in cash for operating activities, primarily as a result of funding portfolio investments of $1.7 billion. Cash provided by financing activities was $1.6 billion during the period, primarily from borrowings on debt and proceeds from the issuance of shares.

Equity

Subscriptions and Drawdowns

In connection with our formation, we have the authority to issue 500,000,000 common shares at $0.01 per share par value.

On November 30, 2021, we issued 100 common shares for $1,500 to our Adviser. We have entered into subscription agreements (the “Subscription Agreements”) with investors providing for the private placement of our common shares. Under the terms of the Subscription Agreements, investors are required to fund drawdowns to purchase our common shares up to the amount of their respective Capital Commitment on an as-needed basis each time we deliver a capital call notice to its investors.

During the nine months ended September 30, 2022, we delivered the following capital call notices to investors:


Capital Drawdown Notice Date	Common Share Issuance Date	Number of Common Shares Issued	Aggregate Offering Price ($ in thousands)
February 11, 2022	January 28, 2022	8,710,668	$	125,000
March 29, 2022	March 16, 2022	10,408,213	150,000
June 28, 2022	June 14, 2022	21,201,413	300,000
September 23, 2022	September 12, 2022	27,642,541	399,987
Total		67,962,835	$	974,987

Distributions

The following table reflects the distributions declared on shares of our common stock during the nine months ended September 30, 2022

September 30, 2022

Date Declared

Record Date

Payment Date

Distribution per Share

August 2, 2022

September 30, 2022

November 15, 2022

0.05

Dividend Reinvestment

With respect to distributions, we adopted an “opt out” dividend reinvestment plan for common shareholders. As a result, in the event of a declared distribution, each shareholder that has not “opted out” of the dividend reinvestment plan will have their dividends or distributions automatically reinvested in additional shares of our common stock rather than receiving cash distributions.

Shareholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.

During the nine months ended September 30, 2022, no shares were issued under the dividend reinvestment plan.

Debt

Aggregate Borrowings

Debt obligations consisted of the following as of September 30, 2022:


	September 30, 2022
($ in thousands)	Aggregate Principal Committed		Outstanding Principal		Amount Available(1)		Net Carrying Value(2)
Subscription Credit Facility	$	700,000	$	596,079	$	103,921	$	593,153
Revolving Credit Facility	600,000		35,000		565,000		29,211
SPV Asset Facility I	600,000		50,000		51,567		43,957
Total Debt	$	1,900,000	$	681,079	$	720,488	$	666,321

(1)The amount available reflects any limitations related to each credit facility’s borrowing base.

For the three and nine months ended September 30, 2022, the components of interest expense were as follows:


	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
($ in thousands)	2022				2022
Interest expense	$	7,730			$	9,536
Amortization of debt issuance costs	977				1,666
Total Interest Expense	$	8,707			$	11,202
Average interest rate	4.7		%		4.5		%
Average daily borrowings	$	643,216			$	277,457

Subscription Credit Facility

On February 18, 2022 we entered into a revolving credit facility (the “Subscription Credit Facility”) with Wells Fargo Bank, National Association as administrative agent and as the lender.

The maximum principal amount of the Subscription Credit Facility is $700 million, subject to availability under the borrowing base, which is based on unused capital commitments. The Subscription Credit Facility includes a provision permitting us to increase the size of the Subscription Credit Facility under certain circumstances up to a maximum principal amount not to exceed $1.5 billion, if the existing or new lenders agree to commit to such increase.

Borrowings under the Subscription Credit Facility bear interest, at our election at the time of drawdown, at a rate per annum equal to (i) in the case of loans denominated in dollars, at our option (a) an adjusted Daily Simple SOFR rate plus 1.75%, (b) an adjusted Term SOFR rate for the applicable interest period plus 1.75% and (c) in the case of reference rate loans, 0.75% plus the greatest of (1) a prime rate, (2) the federal funds rate plus 0.50% and (3) the adjusted Daily Simple SOFR rate plus 1.00%, (ii) in the case of loans denominated in euros or other alternative currencies (other than sterling), the adjusted Eurocurrency Rate for the applicable interest period plus 1.75% or (iii) in the case of loans denominated in sterling, the adjusted SONIA Rate for the applicable interest period plus 1.75%. SOFR Rate loans are subject to a credit spread adjustment ranging from 0.10% to 0.25% and SONIA rate loans are subject to a credit spread adjustment of 0.0326%. Loans denominated in dollars may be converted from one rate applicable to dollar denominated loans to another at any time at our election, subject to certain conditions. We also will pay an unused commitment fee of 0.25% per annum on the unused commitments.

Revolving Credit Facility

On June 9, 2022, we entered into a Senior Secured Credit Agreement (the “Revolving Credit Facility”). The parties to the Revolving Credit Facility include us, as Borrower, the lenders from time to time parties thereto (each a “Lender” and collectively, the “Lenders”), Truist Bank as Administrative Agent, Truist Securities, Inc., ING Capital LLC, Sumitomo Mitsui Banking Corporation and MUFG Bank, LTD, as Joint Bookrunners and Joint Lead Arrangers.

The Revolving Credit Facility is guaranteed by each of OR Tech Lending II LLC, ORTF II BC 1 LLC and ORTF II BC 2 LLC, each our subsidiary, and will be guaranteed by certain of our domestic subsidiaries that are formed or acquired by us in the future (each a "Guarantor" and collectively, the “Guarantors”). Proceeds of the Revolving Credit Facility may be used for general corporate purposes, including the funding of portfolio investments.

The initial maximum principal amount of the Revolving Credit Facility is $600 million, subject to availability under the borrowing base, which is based on our portfolio investments and other outstanding indebtedness. Maximum capacity under the Revolving Credit Facility may be increased to $1.25 billion through the exercise by us of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Revolving Credit Facility includes a $200 million limit for swingline loans, with the aggregate principal amount of outstanding swingline loans of any swingline lender being limited to up to $50 million, and is secured by a perfected first-priority interest in substantially all of the portfolio investments held by us and each Guarantor, subject to certain exceptions.

The availability period under the Revolving Credit Facility will terminate on June 9, 2026 (“Revolving Credit Facility Commitment Termination Date”) and the Revolving Credit Facility will mature on June 9, 2027 (“Revolving Credit Facility Maturity Date”). During the period from the Revolving Credit Facility Commitment Termination Date to the Revolving Credit Facility Maturity Date, we will be obligated to make mandatory prepayments under the Revolving Credit Facility out of the proceeds of certain asset sales and other recovery events and equity and debt issuances.

We may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Revolving Credit Facility in U.S. dollars will bear interest at either term SOFR plus a margin, or the Prime Rate plus a margin. We may elect either the term SOFR or Prime Rate at the time of drawdown, and loans denominated in U.S. dollars may be converted from one rate to another at any time at our option, subject to certain conditions. Amounts drawn under the Revolving Credit Facility in other permitted currencies will bear interest at the relevant rate specified therein plus an applicable margin. We will also pay a fee of 0.375% on average daily undrawn amounts under the Revolving Credit Facility.

The Revolving Credit Facility includes customary covenants, including certain limitations on the incurrence by us of additional indebtedness and on our ability to make distributions to its shareholders, or redeem, repurchase or retire shares of stock, upon the occurrence of certain events and certain financial covenants related to asset coverage and other maintenance covenants, as well as customary events of default. The Revolving Credit Facility requires a minimum asset coverage ratio with respect to the consolidated assets of us and our subsidiaries to senior securities that constitute indebtedness of no less than 1.50 to 1.00, measured at the last day of any fiscal quarter.

SPV Asset Facility I

The SPV Asset Facility I contains customary covenants, including certain maintenance covenants, and events of default. Athena Funding I is required to obtain a minimum post-closing rating of the SPV Asset Facility I within six months of the Closing Date, subject to certain terms and conditions. The SPV Asset Facility I is secured by a perfected first priority security interest in the assets of Athena Funding I and on any payments received by Athena Funding I in respect of those assets. Assets pledged to the lenders will not be available to pay the debts of the Company.

Borrowings of Athena Funding I are considered the Company’s borrowings for purposes of complying with the asset coverage requirements under the 1940 Act.

Promissory Note

On January 25, 2022, we as borrower, entered into a Loan Agreement (the “FIC Agreement”) with Owl Rock Feeder FIC LLC (“Feeder FIC”), an affiliate of the Adviser, as lender, to enter into revolving promissory notes (the “Promissory Notes”) to borrow up to an aggregate of $250 million from Feeder FIC. Under the FIC Agreement we could re-borrow any amount repaid; however, there was no funding commitment between Feeder FIC and us.

On March 14, 2022, we entered into an amendment to the FIC Agreement to change the manner in which interest is calculated.

The interest rate on amounts borrowed pursuant to the Promissory Notes after March 14, 2022 is based on the lesser of the rate of interest for a SOFR Loan or an ABR Loan under the Credit Agreement dated as of December 7, 2021, as amended or supplemented from time to time, by and among Blue Owl Finance LLC, as Borrower, Blue Owl Capital Holdings LP and Blue Owl Capital Carry LP as Parent Guarantors, the Subsidiary Guarantors party thereto, Bank of America, N.A., as Syndication Agent, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and Sumitomo Mitsui Banking Corporation, as Co-Documentation Agents and MUFG Bank, Ltd., as Administrative Agent.

The unpaid principal balance of any Promissory Note and accrued interest thereon was payable by us from time to time at our discretion but immediately due and payable upon 120 days written notice by Feeder FIC, and in any event due and payable in full no later than February 28, 2023. We intend to use the borrowed funds to make investments in portfolio companies consistent with its investment strategies.

On June 22, 2022, we and Owl Rock Feeder FIC LLC, an affiliate of the Advisor, entered into a termination agreement (the “Termination Agreement”) pursuant to which the FIC Agreement was terminated. Upon execution of the Termination Agreement there were no amounts outstanding pursuant to the FIC Agreement or the Promissory Notes.

Off-Balance Sheet Arrangements

Portfolio Company Commitments

Portfolio Company

Investment

September 30, 2022

($ in thousands)

AAM Series 1.1 Rail and Domestic Intermodal Feeder, LLC

LLC Interest

10,000

AAM Series 2.1 Aviation Feeder, LLC

LLC Interest

9,696

AmeriLife Holdings LLC

First lien senior secured delayed draw term loan

4,545

AmeriLife Holdings LLC

First lien senior secured revolving loan

2,273

Anaplan, Inc.

First lien senior secured revolving loan

9,421

Appfire Technologies, LLC

First lien senior secured revolving loan

751

Appfire Technologies, LLC

First lien senior secured delayed draw term loan

9,184

Armstrong Bidco Limited

First lien senior secured delayed draw term loan

2,075

Chapford SMA Partnership, L.P.

LP Interest

2,800

Community Brands ParentCo, LLC

First lien senior secured delayed draw term loan

1,500

Community Brands ParentCo, LLC

First lien senior secured revolving loan

750

CoreTrust Purchasing Group LLC

First lien senior secured delayed draw term loan

3,789

CoreTrust Purchasing Group LLC

First lien senior secured revolving loan

3,789

Fullsteam Operations, LLC

First lien senior secured delayed draw term loan

34,308

Grayshift, LLC

First lien senior secured revolving loan

5,806

Iconic IMO Merger Sub, Inc.

First lien senior secured delayed draw term loan

4,963

Iconic IMO Merger Sub, Inc.

First lien senior secured revolving loan

2,184

Interoperability Bidco, Inc. (dba Lyniate)

First lien senior secured revolving loan

1,304

Kaseya Inc.

First lien senior secured delayed draw term loan

4,725

Kaseya Inc.

First lien senior secured revolving loan

4,725

ManTech International Corporation

First lien senior secured delayed draw term loan

16,000

ManTech International Corporation

First lien senior secured revolving loan

7,255

Natural Partners, LLC

First lien senior secured revolving loan

681

Pacific BidCo Inc.

First lien senior secured delayed draw term loan

954

Rubrik, Inc.

First lien senior secured delayed draw term loan

2,641

SailPoint Technologies Holdings, Inc.

First lien senior secured revolving loan

13,075

Securonix, Inc.

First lien senior secured revolving loan

3,559

SimpliSafe Holding Corporation

First lien senior secured delayed draw term loan

2,572

Smarsh Inc.

First lien senior secured delayed draw term loan

6,476

Smarsh Inc.

First lien senior secured revolving loan

1,619

Talon MidCo 2 Limited

First lien senior secured revolving loan

1,369

Talon MidCo 2 Limited

First lien senior secured delayed draw term loan

311

TC Holdings, LLC (dba TrialCard)

First lien senior secured revolving loan

1,071

The NPD Group, L.P.

First lien senior secured revolving loan

9,060

Total Unfunded Portfolio Company Commitments

185,231

We seek to carefully consider our unfunded portfolio company commitments for the purpose of planning our ongoing financial leverage. Further, we consider any outstanding unfunded portfolio company commitments we are required to fund within the 150% asset coverage limitation. As of September 30, 2022, we believed we had adequate financial resources to satisfy the unfunded portfolio company commitments.

Investor Commitments

As of September 30, 2022, the Company had approximately $3.2 billion and in total Capital Commitments from investors (approximately $2.2 billion undrawn), of which $50.3 million is from entities affiliated with or related to the Adviser (approximately $19.7 million undrawn). As of December 31, 2021, the Company had approximately $802.7 million in total Capital Commitments

from investors (approximately $757.7 million undrawn), of which $50.0 million is from entities affiliated with or related to the Adviser (approximately $45.2 million undrawn). These undrawn Capital Commitments will no longer remain in effect following the completion of an initial public offering of the Company’s common stock.

Other Commitments and Contingencies

From time to time, we may become a party to certain legal proceedings incidental to the normal course of our business. At September 30, 2022, management was not aware of any pending or threatened litigation.

Related-Party Transactions

We have entered into a number of business relationships with affiliated or related parties, including the following:

•the Investment Advisory Agreement;

•the Administration Agreement;

•the Dealer Manager Agreement;

•the Placement Agent Agreement;

•the License Agreement; and

•the Promissory Notes.

In addition to the aforementioned agreements, we rely on exemptive relief that has been granted to ORCA and certain of its affiliates to permit us to co-invest with other funds managed by the Adviser or certain affiliates, in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. See “ITEM 1. – Notes to Consolidated Financial Statements – Note 3. Agreements and Related Party Transactions” for further details.

We invest in Amergin and Chapford SMA, non-controlled affiliated investments, as defined in the 1940 Act. See “ITEM 1. – Notes to Consolidated Financial Statements – Note 3. Agreements and Related Party Transactions” for further details.

Critical Accounting Policies

The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies should be read in connection with our risk factors as described in our Form 10-K for the fiscal year ended December 31, 2021 and in “ITEM 1A. RISK FACTORS.”

Investments at Fair Value

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.

Investments for which market quotations are readily available are typically valued at the bid price of those market quotations. To validate market quotations, we utilize a number of factors to determine if the quotations are representative of fair value, including the source and number of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available, as is the case for substantially all of our investments, are valued at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our audit committee and independent third-party valuation firm(s) engaged at the direction of the Board.

As part of the valuation process, the Board takes into account relevant factors in determining the fair value of our investments, including: the estimated enterprise value of a portfolio company (i.e., the total fair value of the portfolio company’s debt and equity), the nature and realizable value of any collateral, the portfolio company’s ability to make payments based on its earnings and cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company’s securities to any similar publicly traded securities, and overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Board considers whether the pricing indicated by the external event corroborates its valuation.

The Board undertakes a multi-step valuation process, which includes, among other procedures, the following:

•With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;

•With respect to investment for which market quotations are not readily available, the valuation process begins with the independent valuation firm(s) providing a preliminary valuation of each investment to the Adviser’s valuation committee;

•Preliminary valuation conclusions are documented and discussed with the Adviser’s valuation committee. Agreed upon valuation recommendations are presented to the Audit Committee;

•The Audit Committee reviews the valuations recommendations and recommends values for each investment to the Board; and

•The Board reviews the recommended valuations and determines the fair value of each investment.

We conduct this valuation process on a quarterly basis.

We apply Financial Accounting Standards Board Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”), as amended, which establishes a framework for measuring fair value in accordance with U.S. GAAP and required disclosures of fair value measurements. ASC 820 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market (which may be a hypothetical market) that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, we consider its principal market to be the market that has the greatest volume and level of activity. ASC 820 specifies a fair value hierarchy that prioritizes and ranks the level of observability of inputs used in determination of fair value. In accordance with ASC 820, these levels are summarized below:

•Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.

•Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

•Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfer occurred. In addition to using the above inputs in investment valuations, we apply the valuation policy approved by our Board that is consistent with ASC 820. Consistent with the valuation policy, we evaluate the source of the inputs, including any markets in which our investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. When an investment is valued based on prices provided by reputable dealers or pricing services (that is, broker quotes), we subject those prices to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level 2 or Level 3 investment. For example, we, or the independent valuation firm(s), review pricing support provided by dealers or pricing services in order to determine if observable market information is being used, versus unobservable inputs.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of such investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that may ultimately be realized. Further, such investments are generally less liquid than publicly traded securities and may be subject to contractual and other restrictions on resale. If we were required to liquidate a portfolio investment in a forced or liquidation sale, it could realize amounts that are different from the amounts presented and such differences could be material.

Rule 2a-5 under the 1940 Act was recently adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act. The Company complied with the mandatory provisions of Rule 2a-5 by the September 2022 compliance date. Additionally, commencing with the fourth quarter of 2022, pursuant to Rule 2a-5, the Board designated the Adviser as the Company's valuation deignee to perform fair value determinations relating to the value of assets held by the Company for which market quotations are not readily available.

Interest and Dividend Income Recognition

or dividends that are added to the principal amount or liquidation amount of the investment on the respective interest or dividend payment dates rather than being paid in cash and generally becomes due at maturity or at the occurrence of a liquidation event. Discounts and premiums to par value on securities purchased are amortized into interest income over the contractual life of the respective security using the effective yield method. The amortized cost of investments represents the original cost adjusted for the amortization and accretion of discounts or premiums, if any. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period.

Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected in full. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. If at any point that we believe PIK interest is not expected to be realized, the investment generating PIK interest will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are generally reversed through interest income. Non-accrual loans are restored to accrual status when past due principal and interest is paid current and, in management’s judgment, are likely to remain current. Management may make exceptions to this treatment and determine to not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

Distributions

We have elected to be treated for U.S. federal income tax purposes, and qualify annually thereafter, as a RIC under Subchapter M of the Code. To maintain our tax treatment as a RIC, we must distribute (or be deemed to distribute) in each taxable year distribution for tax purposes equal to at least 90 percent of the sum of our:

•investment company taxable income (which is generally our ordinary income plus the excess of realized short-term capital gains over realized net long-term capital losses), determined without regard to the deduction for dividends paid, for such taxable year; and

•net tax-exempt interest income (which is the excess of our gross tax-exempt interest income over certain disallowed deductions) for such taxable year.

As a RIC, we (but not our shareholders) generally will not be subject to U.S. federal tax on investment company taxable income and net capital gains that we distribute to our shareholders.

We intend to distribute annually all or substantially all of such income. To the extent that we retain our net capital gains or any investment company taxable income, we generally will be subject to corporate-level U.S. federal income tax. We can be expected to carry forward our net capital gains or any investment company taxable income in excess of current year dividend distributions, and pay the U.S. federal excise tax as described below.

Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% U.S. federal excise tax payable by us. We may be subject to a nondeductible 4% U.S. federal excise tax if we do not distribute (or are treated as distributing) during each calendar year an amount at least equal to the sum of:

•98% of our net ordinary income excluding certain ordinary gains or losses for that calendar year;

•98.2% of our capital gain net income, adjusted for certain ordinary gains and losses, recognized for the twelve-month period ending on October 31 of that calendar year; and

•100% of any income or gains recognized, but not distributed, in preceding years.

While we intend to distribute any income and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our taxable income and capital gains may not be distributed and as a result, in such cases, the excise tax will be imposed. In such an event, we will be liable for this tax only on the amount by which we do not meet the foregoing distribution requirement.

We intend to pay quarterly distributions to our shareholders out of assets legally available for distribution. All distributions will be paid at the discretion of our Board and will depend on our earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as our Board may deem relevant from time to time.

To the extent our current taxable earnings for a year fall below the total amount of our distributions for that year, a portion of those distributions may be deemed a return of capital to our shareholders for U.S. federal income tax purposes. Thus, the source of a distribution to our shareholders may be the original capital invested by the shareholder rather than our income or gains. Shareholders should read written disclosure carefully and should not assume that the source of any distribution is our ordinary income or gains.

We have adopted an “opt out” dividend reinvestment plan for our common shareholders. As a result, if we declare a cash dividend or other distribution, each shareholder that has not “opted out” of our dividend reinvestment plan will have their dividends or distributions automatically reinvested in additional shares of our common stock rather than receiving cash distributions. Shareholders who receive distributions in the form of shares of common stock will be subject to the same U.S. federal, state and local tax consequences as if they received cash distributions.

Income Taxes

We have elected to be treated as a BDC under the 1940 Act. We have also elected to be treated as a RIC under the Code beginning with the taxable year ending December 31, 2021 and intend to continue to qualify as a RIC. So long as we maintain our tax treatment as a RIC, we generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that we distribute at least annually to our shareholders as dividends. Instead, any tax liability related to income earned and distributed by us represents obligations of our investors and will not be reflected in our consolidated financial statements.

To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. In addition, to qualify for RIC tax treatment, we must distribute to its shareholders, for each taxable year, at least 90% of our “investment company taxable income” for that year, which is generally our ordinary income plus the excess of our realized net short-term capital gains over our realized net long-term capital losses. In order for us not to be subject to U.S. federal excise taxes, we must distribute annually an amount at least equal to the sum of (i) 98% of our net ordinary income (taking into account certain deferrals and elections) for the calendar year, (ii) 98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (iii) any net ordinary income and capital gains in excess of capital losses for preceding years that were not distributed during such years. We, at our discretion, may carry forward taxable income in excess of calendar year dividends and pay a 4% nondeductible U.S. federal excise tax on this income.

We evaluate tax positions taken or expected to be taken in the course of preparing our consolidated financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reserved and recorded as a tax benefit or expense in the current year. All penalties and interest associated with income taxes are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, on-going analyses of tax laws, regulations and interpretations thereof. There were no material uncertain tax positions through December 31, 2021.

Recent Developments

Investor Commitments

As of November 10, 2022, we had approximately $3.3 billion in total Capital Commitments from investors (approximately $2.3 billion undrawn), of which $50.3 million is from entities affiliated with or related to the Adviser (approximately $19.7 million undrawn).

Dividend

SPV Asset Facility II

On November 8, 2022 (the “Athena Funding II Closing Date”), Athena Funding II LLC (“Athena Funding II”), a Delaware limited liability company and our newly formed subsidiary entered into a Loan and Management Agreement (the “SPV Asset Facility II”), with Athena Funding II, as Borrower, us, as Collateral Manager and Transferor, MUFG Bank, Ltd., as Administrative Agent, State Street Bank and Trust Company, as Collateral Agent and Collateral Administrator, Alter Domus (US) LLC as Custodian, the lenders from time to time parties thereto and the group agents from time to time parties thereto.

From time to time, we expect to sell and contribute certain investments to Athena Funding II pursuant to a Purchase and Sale Agreement, dated as of the Athena Funding II Closing Date, by and between us and Athena Funding II. No gain or loss will be recognized as a result of the contribution. Proceeds from the SPV Asset Facility II will be used to finance the origination and acquisition of eligible assets by Athena Funding II, including the purchase of such assets from us. We retain a residual interest in assets contributed to or acquired by Athena Funding II through its ownership of Athena Funding II. The maximum principal amount of the SPV Asset Facility II is $300 million; the availability of this amount is subject to a borrowing base test (which is based on the value of Athena Funding II’s assets from time to time, an advance rate and concentration limitations) and satisfaction of certain conditions, including collateral quality tests.

The SPV Asset Facility II provides for the ability to draw and redraw revolving loans under the SPV Asset Facility II for a period of up to two years after the Athena Funding II Closing Date (the “Athena Funding II Reinvestment Period”) unless the Reinvestment Period is terminated sooner as provided in the SPV Asset Facility II. Unless otherwise terminated, the SPV Asset Facility II will mature November 8, 2027.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including valuation risk, interest rate risk, currency risk, and inflation and supply chain risk.

Valuation Risk

We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies. Most of our investments will not have a readily available market price, and therefore, we will value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firm(s) engaged at the direction of the Board, and in accordance with our valuation policy. There is no single standard for determining fair value. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented and such differences could be material.

Interest Rate Risk

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. We intend to fund portions of our investments with borrowings, and at such time, our net investment income will be affected by the difference between the rate at which we invest and the rate at which we borrow. Accordingly, we cannot assure you that a significant change in market interest rates will not have a material adverse effect on our net investment income.

In a prolonged low interest rate environment, the difference between the total interest income earned on interest earning assets and the total interest expense incurred on interest bearing liabilities may be compressed, reducing our net income and potentially adversely affecting our operating results. Conversely, in a rising interest rate environment, such difference could potentially increase thereby increasing our net income as indicated per the table below.

Substantially all of our assets and liabilities are financial in nature. As a result, changes in interest rates and other factors drive our performance more directly than does inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. As of September 30, 2022, 98.8% of our debt investments based on fair value were floating rates. Additionally, the weighted average floating rate floor, based on fair value, of our debt investments was 0.7%. The Subscription Credit Facility and Revolving Credit Facility bear interest at variable interest rates with an interest rate floor of 0.0%.

Based on our Consolidated Statements of Assets and Liabilities as of September 30, 2022, the following table shows the annualized impact on net income of hypothetical base rate changes in interest rates on our debt investments (considering interest rate floors for floating rate instruments) assuming each floating rate investment is subject to 3-month reference rate and there are no changes in our investment and borrowing structure:


($ in thousands)	Interest Income		Interest Expense		Net Income (1)
Up 300 basis points	$	39,782	$	20,432	$	19,350
Up 200 basis points	$	26,522	$	13,622	$	12,900
Up 100 basis points	$	13,261	$	6,811	$	6,450
Up 50 basis points	$	6,630	$	3,405	$	3,225

Down 50 basis points	$	(6,630)	$	(3,405)	$	(3,225)
Down 100 basis points	$	(13,261)	$	(6,811)	$	(6,450)

(1) Excludes the impact of income based fees. See “ITEM 1. �� Notes to Consolidated Financial Statements – Note 3. Agreements and Related Party Transactions” for more information on the income based fees.

We may in the future hedge against interest rate fluctuations by using hedging instruments such as interest rate swaps, futures, options, and forward contracts. While hedging activities may mitigate our exposure to adverse fluctuations in interest rates, certain hedging transactions that we may enter into in the future, such as interest rate swap agreements, may also limit our ability to participate in the benefits of lower interest rates with respect to our portfolio investments.

Currency Risk

From time to time, we may make investments that are denominated in a foreign currency. These investments are translated into U.S. dollars at each balance sheet date, exposing us to movements in foreign exchange rates. We may employ hedging techniques to minimize these risks, but we cannot assure you that such strategies will be effective or without risk to us. We may seek to utilize instruments such as, but not limited to, forward contracts to seek to hedge against fluctuations in the relative values of our portfolio

positions from changes in currency exchange rates. We also have the ability to borrow in certain foreign currencies under our credit facilities. Instead of entering into a foreign currency forward contract in connection with loans or other investments we have made that are denominated in a foreign currency, we may borrow in that currency to establish a natural hedge against our loan or investment. To the extent the loan or investment is based on a floating rate other than a rate under which we can borrow under our credit facilities, we may seek to utilize interest rate derivatives to hedge our exposure to changes in the associated rate.

Inflation and Supply Chain Risk

Economic activity has continued to accelerate across sectors and regions. Nevertheless, due to global supply chain issues, geopolitical events, a rise in energy prices and strong consumer demand as economies continue to reopen, inflation is showing signs of acceleration in the U.S. and globally. Inflation is likely to continue in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may tighten in response. Persistent inflationary pressures could affect our portfolio companies profit margins.

Item 4. Controls and Procedures.

(a)Evaluation of Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and determined that our disclosure controls and procedures are effective as of the end of the period covered by the Quarterly Report on Form 10-Q.

(b)Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1. Legal Proceedings.

We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of any such future legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any such future proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “ITEM 1A. RISK FACTORS” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None, other than those already disclosed in certain 8-Ks filed with the SEC.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits, Financial Statement Schedules

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:


Exhibit Number						Description of Exhibits
3.1						Articles of Amendment and Restatement, dated November 30, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 10, filed on December 1, 2021).

3.2						Bylaws, dated November 29, 2021 (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10, filed on December 1, 2021).




























10.1						Credit Agreement, dated July 15, 2022, among Athena Funding I LLC, as Borrower, the Lenders referred to therein, Société Générale, as Administrative Agent, and State Street Bank and Trust Company, as Collateral Agent, Collateral Administrator, Custodian and Alter Domus (US) LLC, as Document Custodian (incorporated by reference to Exhibit 10.1 to the Company's current report on Form 8-K, filed on July 20, 2022).

10.2						Sale and Contribution Agreement, dated July 15, 2022, between Owl Rock Technology Finance Corp. II, as Seller and Athena Funding I LLC, as Purchaser (incorporated by reference to Exhibit 10.2 to the Company's current report on Form 8-K, filed on July 20, 2022).

31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

____________________

*Filed herein

**Furnished herein.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Owl Rock Technology Finance Corp. II

Date: November 10, 2022	By:	/s/ Craig W. Packer
		Craig W. Packer
		Chief Executive Officer

	Owl Rock Technology Finance Corp. II

Date: November 10, 2022	By:	/s/ Jonathan Lamm
		Jonathan Lamm
		Chief Operating Officer and Chief Financial Officer

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Owl Rock Technology Finance Corp. II 10-Q2022 Q3 Quarterly report

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