After a catastrophic Q1 for private credit BDCs, Q2 is proceeding just as many had expected: just as bad.
After alternative asset manager titans such as Apollo, Blackrock, Blackstone and Cliffwater all gated their investors for a second straight quarter following a surge in redemption requests that easily surpassed what took place in Q1, earlier today we learned that the ground zero of the private credit implosion - Blue Owl Capital - was also slammed with redemption requests in the second quarter. Sure enough, it also gated its investors.
As Bloomberg reports, for the second straight quarter, two Blue Owl Capital private credit funds were hit with the industry’s largest redemption requests, forcing the manager to again cap withdrawals.
Investors in the roughly $34 billion Blue Owl Credit Income Corp., one of the largest in the industry, asked to pull 18.8% of shares, or $3.6 billion in the second quarter, according to an investor letter Thursday. That’s down fractionally less than the $4.2 billion requested in the prior period from the fund known as OCIC.
The smaller Blue Owl Technology Income Corp. saw shareholders request 38.1%, or $1.1 billion, compared with $1.2 billion in the first quarter.
The good news: the total redemptions were modestly below last quarter's record; the bad news: the redemptions persisted almost entirely despite the market staging a historic, remarkable rebound and as fears about software disruption supposedly eased. Turns out they did not.
Blue Owl, which as we have thoroughly documents, has been at the heart of the storm roiling the $1.8 trillion private credit market due to its massive exposure to software-linked loans, joins industry peers including Apollo, Ares, BlackRock and Blackstone in imposing a 5% redemption limit as investors accelerate out of the funds.
Blue Owl told investors it was “encouraged to see OCIC’s modestly lower quarter-over-quarter tender requests broadly across channels and geographies.” Let's see what the company will tell investors next quarter if we see a powerful drawdown in stocks which sparks a new selling panic across the private credit space.
According to Bloomberg, the firm said it has satisfied more than 43% of the original demand from shareholders with repeat withdrawal requests. It said second quarter requests were largely from those investors, and included “limited new participation.”
Realizing the existential threat they were in, Blue Owl executives - who in a bizarre act of "diversification" decided to buy a stake in the Cleveland Cavaliers - stepped up efforts to engage with clients over the past three months, flying around the world on a roadshow trying to educate investors, according to a person with knowledge of the matter. They emphasized the message that private credit is a performing asset and that their funds had delivered positive returns, the person said, requesting anonymity to discuss private meetings.
In the shareholder letter Thursday, the firm highlighted that about 90% of investors remain in the larger fund, which has posted approximately $1.2 billion of inflows this year.
“OCIC does not need to sell a single private loan to satisfy the tender offer,” Craig Packer, Blue Owl’s co-president, and Logan Nicholson, OCIC president, said in the letter to shareholders.
And in case that investors decided they don't want to be in the fund much longer, the firm said that both Blue Owl funds have “ample dry powder” to capitalize on better lending conditions in the market, with wider spreads and improved protections.
OCIC and OTIC had $11.6 billion and $1.3 billion in liquidity respectively, including cash and available borrowings assets as of May 31, according to the letters. OTIC oversees about $5 billion in assets.
Tyler Durden Thu, 07/02/2026 - 14:20Authored by Tom Ozimek via The Epoch Times,
A federal judge on Wednesday blocked the U.S. Postal Service from implementing a Trump administration proposal to boost election integrity by enhancing ballot tracking and verification, finding it conflicted with a 2021 settlement requiring the agency to prioritize the timely delivery of election mail.
U.S. District Judge Emmet Sullivan ruled on July 1 that USPS could not move forward with the proposed rule, which would have required states using the mail for federal absentee and mail-in voting to adopt standardized ballot envelopes with trackable barcodes and provide USPS with voter participation lists to make ballot verification easier. Ballot mailings that failed to comply would have been rejected.
One day after the proposed rule was published in early June, the National Association for the Advancement of Colored People (NAACP) returned to court in a long-running lawsuit originally filed during the 2020 election, asking Sullivan to enforce a 2021 settlement that requires USPS to prioritize the monitoring and timely delivery of election mail through the 2028 election cycle.
The proposed rule stems from President Donald Trump’s March executive order directing USPS to develop new standards for handling federal ballot mail as part of a broader thrust to bolster election integrity.
The Justice Department, which represented USPS in the case, did not respond to a request for comment before publication.
Rule Boosts Election Integrity, DOJ SaysIn opposing the NAACP’s motion, the Department of Justice (DOJ) argued in a court brief that the proposed rule was designed to improve—not hinder—the handling of election mail.
Attorneys representing the Trump administration wrote that requiring standardized Election Mail logos and Intelligent Mail barcodes would make ballots easier to identify throughout the postal network. They argued this would allow USPS to better monitor the movement of mail-in ballots and help implement the “extraordinary measures” USPS has traditionally used to expedite election mail before federal elections.
“Such requirements promote the ’monitoring and timely delivery of Election Mail'; they do not frustrate it,” they wrote in the brief. “And while the Postal Service has proposed requiring state and local election officials to identify the names and addresses of the persons to whom they send ballots and to provide the barcodes for the ballot envelopes, requiring this information—which officials already, by definition, have—would not compromise the lawful delivery of any mail.”
The administration stated in the proposal that the new rule would strengthen election integrity by creating a uniform ballot-tracking system while leaving decisions about voter eligibility entirely to the states.
Election officials—not USPS—would determine who is eligible to vote by mail and would submit lists of voters receiving mail ballots, together with unique barcode information, through a federal portal. The Postal Service would use that information only to verify ballot mailings and improve tracking, not to decide who could vote.
“State and local election officials would maintain full control over who they send ballots to,” government attorneys said in the brief.
“There are no plausible concerns, certainly at this stage, that the Proposed Rule would negatively impact USPS’s ability to timely and reliably deliver Election Mail. Rather, this provision would, again, assist USPS in better being able to track (and thus deliver) such important mail.”
Plaintiffs Claim ‘Confusion and Uncertainty’The NAACP argued in its motion that the new requirements would violate the 2021 settlement and could prevent eligible voters from receiving mail ballots.
“Implementation of the Proposed Rule would threaten to prevent millions of eligible voters from receiving mail-in ballots to which they are entitled,” attorneys representing the plaintiffs wrote.
They also argued that, even while the rule remains in proposed form, it already caused confusion within USPS, and among election officials and voters, about what procedures will be in place for mail-in ballots in the November 2026 election cycle.
“The pendency of the Proposed Rule ... creates confusion and uncertainty,” they wrote. “USPS, for example, cannot conduct internal or external trainings to plan for a rule that is not yet finalized. Nor can it provide answers or guidance to election officials and voters to mitigate confusion or uncertainty.”
The case traces back to August 2020, when the NAACP sued USPS over operational changes introduced around that time that plaintiffs said caused widespread mail delays during the COVID-19 pandemic and threatened the timely delivery of absentee ballots.
The parties settled the case in December 2021. Under the agreement, USPS committed through 2028 to issue nationwide election-mail guidance, organize regular “outreach meetings” with the NAACP before federal elections, provide performance reports, and make good-faith efforts to prioritize the monitoring and timely delivery of election mail.
Trump’s March executive order directed USPS to develop new standards to strengthen election security, prompting USPS to publish the proposed rule, which the NAACP challenged.
The judge sided with the plaintiffs, concluding that the proposed procedures conflicted with USPS’s commitment to prioritize the timely delivery of election mail.
Allison Zieve, director of Public Citizen Litigation Group, which represented the NAACP in the case, praised the ruling.
“The court today correctly recognized that USPS’s plan to create roadblocks to mail-in voting was inconsistent with its commitment to timely deliver election mail,” she said in a statement. “USPS’s plan was unwise, unlawful, and a threat to the millions of voters who rely on mailed ballots to participate in our democracy.”
Tyler Durden Thu, 07/02/2026 - 14:00Authored by Dave DeCamp via AntiWar.com,
Vice President JD Vance said in an interview on "The Michael Knowles Show" published Tuesday that the US would use the Memorandum of Understanding with Iran to "refill" global oil supplies and stockpiles and to prepare for more potential military action against the Islamic Republic.
"I think what the president has told us to do is use this MoU to sort of refill the world's oil economy, to refill some stocks, and then to see where the hand is," the vice president said.
"And … if the Iranians are willing to make the commitments that we would like them to make and are willing to back those up with verifiable milestones, then we are going to change our relationship with Iran. And if they don't do that, then nothing has really changed except for what we’ve already accomplished from the military campaign, which is a lot. So, we kind of have two options here. We have the option of pursuing a long-term deal with the Iranians, but that requires a significant change in their behavior. We have the option of banking our wins and then, of course, doing things on top of that if the president feels that we have to. And I think both of those options are very much in play," he added.
🔴 Vance Says US Is Using the Iran Deal to “Refill” the Oil Market, Then “See Where the Hand Is”
🔸 US Vice President JD Vance said the Trump administration is using the memorandum that ended the war with Iran “to sort of refill the world’s oil economy… and then to see where… https://t.co/8U5rfJ0C9q pic.twitter.com/t7f5Hvs7B1
Summarizing the position, Knowles said, "So then the message if you’re an Iranian, the message you’re getting from the US is not, okay, we’ve settled this, you get to keep the Strait of Hormuz and we’ll try to play nice. Now, the message is we’re going to serve our self-interest by replenishing the oil coffers and get back to us in 60 days, you might have some fire and brimstone coming back down."
Vance didn’t dispute Knowles’ characterization and said, "And if you actually behave, you won’t, right?"
Trita Parsi, the executive vice president of the Quincy Institute for Responsible Statecraft, said in a post on X that Vance's comments heightened suspicion in Iran that the war will restart despite the MoU. He made the comments in a post discussing the view in Iranian political circles that Israel may launch an attack before Israeli elections are held in October.
“Will Israel restart the war with Iran before the October elections? This is the consensus view emerging within Iran’s internal national security debate over the past week,” Parsi said.
"Several factors are driving Tehran to this conclusion. Beyond its deep—and not entirely unwarranted—suspicion of President Donald Trump’s intentions, heightened by Vice President JD Vance’s recent remark that Trump wants to use the MOU to replenish global oil reserves and then 'see where the hand is,' two developments stand out: the recent Israeli-Lebanese agreement and its impact on Hezbollah’s military posture over the coming months," he added.
Full interview:
Tyler Durden Thu, 07/02/2026 - 13:40