Full Breakdown
Blue Owl Slashes Loparex Loan Marks Amid Default Risk
9/6/2026, 10:37:27 PM
Core Event: Rapid Devaluation of Loparex Debt
Blue Owl Capital Inc.’s publicly traded business-development company (OBDC) moved Loparex’s second-lien loan from roughly 63 cents on the dollar at the end of March to about 5 cents on the dollar within a few months. A first-lien loan that sat near par at year-end is now carried at 22 cents. The lender placed Loparex on non-accrual status after the second quarter, signalling doubts that full repayment will be achieved.
Background & Context
Loparex, a maker of specialty paper and adhesive liners backed by Pamplona Capital Management, has struggled with a heavy debt load for years. In 2024, S&P Global Ratings described a distressed exchange that it deemed “tantamount to default” and called the capital structure “unsustainable.” The company missed its June interest payment on the second-lien tranche and is operating under a forbearance that runs through September. Moody’s Ratings this week labeled the borrower as in default and warned that a Chapter 11 filing is possible.
Data & Statistics
- Loan marks: second-lien at ~63 cents (end-March) -> ~5 cents (current); first-lien at ~22 cents (current).
- Non-accrual exposure: OBDC’s overall non-accrual loans remain low at 0.8 % of fair value.
- Refinancing request: Loparex sought roughly $1.5 billion in private-credit financing at the start of 2026 to refinance first- and second-lien facilities, some of which mature early next year.
- Private-credit market size: approximately $1.8 trillion, facing record redemption pressure from retail funds.
Official Statements & Responses
OBDC President Logan Nicholson explained that Loparex had been pursuing a “transformative M&A transaction” that would have recapitalized the business with fresh equity, but the deal collapsed, prompting the markdown. Blue Owl’s spokesperson pointed to Nicholson’s comments from an early-August earnings call. Representatives for Pamplona Capital Management and Loparex declined to comment.
Conflicting Reports & Gaps
The sources present a consistent picture of the loan markdowns and the default risk; no contradictory figures were reported. However, the ultimate recovery amount remains uncertain, and no firm timeline for a potential Chapter 11 filing has been disclosed.
Verbatim Quotes
- “The company had been pursuing a transformative M&A transaction, which would have recapitalized the business with fresh equity, improving the balance sheet and liquidity,” — Logan Nicholson, from OBDC president
What’s Next
- Loparex remains under forbearance through September, with interest payments on the second-lien tranche already missed for June.
- Moody’s and S&P ratings suggest a Chapter 11 filing is possible, but no formal petition has been announced.
- Blue Owl’s OBDC will continue to monitor the loan’s performance while the broader private-credit market grapples with redemption pressures and heightened scrutiny of underwriting standards.
