DEBT OBLIGATIONS AND CREDIT FACILITIES (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt Obligations

The Company’s maximum exposure to these debt obligations is set forth below:

	As of
	September 30, 2020		December 31, 2019
$250,000, 3.78%, issued in December 2017, payable on December 18, 2032	$	250,000	$	250,000
Credit facility, issued in March 2014, variable rate obligations payable on December 13, 2024 (1)	—		150,000
$50,000, 3.91%, issued in September 2014, payable on September 3, 2024	50,000		50,000
$100,000, 4.01%, issued in September 2014, payable on September 3, 2026	100,000		100,000
$100,000, 4.21%, issued in September 2014, payable on September 3, 2029	100,000		100,000
$100,000, 3.69%, issued in July 2016, payable on July 12, 2031	100,000		100,000
$200,000, 3.64%, issued in July 2020, payable on July 22, 2030	200,000		—
$50,000, 3.84%, issued in July 2020, payable on July 22, 2035	50,000		—
Total remaining principal	$	850,000	$	750,000

(1)    On December 13, 2019, the credit facility was amended to among other things, increase the revolving loan commitment from $500 million to $650 million, provide for the refinancing of the then-outstanding $150 million term loan with revolving loans, extend the maturity date from March 29, 2023 to December 13, 2024, favorably update the commitment fee and

interest rate in the corporate ratings-based pricing grid and increase the asset under management covenant threshold from $60 billion to $65 billion. Borrowings generally bear interest at a spread to either LIBOR or an alternative base rate. Based on the current credit ratings of OCM, the interest rate on borrowings is LIBOR plus 0.88% per annum and the commitment fee on the unused portions of the revolving credit facility is 0.08% per annum. The credit agreement contains customary financial covenants and restrictions, including ones regarding a maximum leverage ratio and a minimum required level of assets under management (as defined in the credit agreement, as amended above). As of September 30, 2020, OCM had no outstanding borrowings under the revolving credit facility. OCM and the Company were in compliance with all financial maintenance covenants associated with its senior notes and bank credit facility as of September 30, 2020 and December 31, 2019, respectively.

Schedule of Collateralized Loan Obligation

The consolidated funds had the following debt obligations outstanding:

	Outstanding Amount as of				Senior variable rate notes key terms as of December 31, 2019
Credit Agreement	September 30, 2020		December 31, 2019		Facility Capacity		Weighted Average Interest Rate	Weighted Average Remaining Maturity (years)	Commitment Fee Rate	L/C Fee
Senior variable rate notes	$	—	$	159,411	$	159,411	3.42%	4.4	N/A	N/A
Less: Debt issuance costs	—		(934)
Total debt obligations, net	$	—	$	158,477

Outstanding debt obligations of CLOs were as follows:

	As of September 30, 2020				As of December 31, 2019
	Fair Value (1)		Weighted Average Interest Rate	Weighted Average Remaining Maturity (years)	Fair Value (1)		Weighted Average Interest Rate	Weighted Average Remaining Maturity (years)
Senior secured notes	$	6,066,574	2.02%	10.4	$	5,613,846	2.85%	8.6
Subordinated notes (2)	175,307		N/A	10.2	154,153		N/A	10.4
Total CLO debt obligations	$	6,241,881			$	5,767,999

(1)    The fair value of CLO liabilities was measured as the fair value of CLO assets less the sum of (a) the fair value of any beneficial interests held by the Company and (b) the carrying value of any beneficial interests that represent compensation for services. Please see notes 2 and 6 for more information.

(2)    The subordinated notes do not have a contractual interest rate; instead, they receive distributions from the excess cash flows generated by the CLO.

Summary of Valuation Techniques and Quantitative Information

The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of September 30, 2020:

Investment Type	Fair Value		Valuation Technique	Significant Unobservable Inputs (1)(2)	Range	Weighted Average (3)
Credit-oriented investments:
Consumer discretionary:	$	14,111	Recent market information (5)	Quoted prices	Not applicable	Not applicable
Financials:	46,700		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Health care:	16,111		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Real estate:	16,632		Recent market information (5)	Quoted prices	Not applicable	Not applicable
	2,393		Recent transaction price (6)	Quoted prices	Not applicable	Not applicable
Other:	18,915		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Equity investments:
	87,136		Discounted cash flow (4)	Discount rate	6% – 8%	7%
	910		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Total Level III investments	$	202,908

The following table sets forth a summary of the valuation techniques and quantitative information utilized in determining the fair value of the consolidated funds’ Level III investments as of December 31, 2019:

Investment Type	Fair Value		Valuation Technique	Significant Unobservable Inputs (1)(2)	Range	Weighted Average (3)
Credit-oriented investments:
Consumer discretionary:	$	16,836	Recent market information (5)	Quoted prices	Not applicable	Not applicable
Financials:	17,274		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Health care:	26,863		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Real estate:	16,755		Recent market information (5)	Quoted prices	Not applicable	Not applicable
	71,906		Recent transaction price (6)	Quoted prices	Not applicable	Not applicable
Other:	31,274		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Equity investments:
	130,341		Discounted cash flow (4)	Discount rate	6% – 8%	7%
	753		Recent market information (5)	Quoted prices	Not applicable	Not applicable
Real estate-oriented:
	230,741		Recent transaction price (6)	Not Applicable	Not applicable	Not applicable
Total Level III investments	$	542,743

(1)    The discount rate is the significant unobservable input used in the fair-value measurement of performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments and real estate loan portfolios. An increase (decrease) in the discount rate would result in a lower (higher) fair-value measurement.

(2)    Multiple of either earnings or underlying assets is the significant unobservable input used in the market approach for the fair-value measurement of distressed credit-oriented investments, credit-oriented investments in which the consolidated funds have a controlling interest in the underlying issuer, equity investments and certain real estate-oriented investments. An increase (decrease) in the multiple would result in a higher (lower) fair-value measurement.

(3)    The weighted average is based on the fair value of the investments included in the range.

(4)    A discounted cash-flow method is generally used to value performing credit-oriented investments in which the consolidated funds do not have a controlling interest in the underlying issuer, as well as certain equity investments, real estate-oriented investments and real estate loan portfolios.

(5)    Certain investments are valued using vendor prices or broker quotes for the subject or similar securities.  Generally, investments valued in this manner are classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities, or may require adjustment for investment-specific factors or restrictions.

(6)    Certain investments are valued based on recent transactions, generally defined as investments purchased or sold within six months of the valuation date. The fair value may also be based on a pending transaction expected to close after the valuation date.

The significant valuation inputs, including the input range and weighted average rate, are as follows:

Valuation Input	Low	High	Weighted Average Rate
Discount rates	9.0%	40.0%	18.4%
Constant default rates	2.0%	4.0%	2.3%
Recovery rates	60.0%	80.0%	64.9%

Future Principal Payments of Debt Obligations

As of September 30, 2020, future scheduled principal or par value payments with respect to the debt obligations of CLOs were as follows:

Remainder of 2020	$	—
2021	—
2022	—
2023	—
2024	—
Thereafter	6,478,508
Total	$	6,478,508