At the end of last year, within Blue Owl's retail private credit fund, Loparex looked ordinary enough: the highest-ranking loans were carried at par, and the second-lien slice was valued a little below 90 cents. A few months later, the picture flipped. By Mar. 31, the second-lien was marked around 63 cents, and OBDC now values that same layer at roughly 5 cents. One first-lien loan that sat near par at year-end is currently carried at 22 cents.
OBDC, the publicly traded BDC that anchors Blue Owl's platform, put Loparex on non-accrual following the second quarter, signaling doubts about full repayment. Across OBDC overall, loans on non-accrual remain low at 0.8% of fair value. This week, Moody's Ratings said the adhesive-liner manufacturer was in default and warned that a Chapter 11 filing could be possible. S&P Global Ratings said in 2024 that, following a distressed exchange it viewed as tantamount to default, Loparex's capital structure stayed "unsustainable." The company did not make its June interest payment on the second lien and is operating under a forbearance that runs through September.
A Blue Owl spokesperson pointed to comments from OBDC President Logan Nicholson on Aug. 6: "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," he said of Loparex. "However, the transaction fell apart in the end, which led to the markdown of our position during the quarter."
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Pamplona Capital Management is the sponsor of Loparex, a maker of specialty paper and liners. Attempts to obtain comment from Pamplona and Loparex representatives were unsuccessful.
Private credit skeptics often zero in on valuations, pointing out that marks can trail a borrower's operational reality. BDCs have wide latitude in how they carry loans, and when a borrower stumbles, those marks can diverge sharply. One cautionary tale: lenders kept Zips Car Wash near par only months before it ended up in bankruptcy.
Industry insiders counter that valuation is as much art as science, that marks do not necessarily predict eventual recoveries if a sale or restructuring materializes, and that steadier marks can smooth out short-term public-market swings. Managers also say they tend to use third-party evaluators when pricing portfolios.
Private credit is a roughly $1.8 trillion market facing record redemption requests from retail vehicles, plus heightened worry about underwriting standards and a heavy tilt toward software and tech. At the start of 2026, Loparex had been seeking roughly $1.5 billion in private credit to refinance its first- and second-lien facilities, with certain maturities falling due early next year. The past few months show how quickly a loan can move from near-par comfort to deep distress, and how non-accruals, missed interest, and a fallen-through recap can all flip the story in a hurry.
