Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended December 31, 2018
01 March 2019 - 12:00AM
Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQL)
(“OXSQ,” the “Company,” “we,” “us” or “our”) announced today its
financial results and related information for the quarter ended
December 31, 2018.
- As of December 31, 2018 net asset value (“NAV”) per share was
$6.60, compared with the NAV per share of $7.49 at the prior
quarter end.
- For the quarter ended December 31, 2018 we recorded GAAP net
investment income of approximately $8.5 million, or $0.18 per
share, compared to $8.6 million, or $0.18 per share for the quarter
ended September 30, 2018. We recorded net realized losses of
approximately $2.8 million and a net increase in unrealized
depreciation of approximately $39.8 million for the quarter ended
December 31, 2018. In total, we had a net decrease in net assets
from operations of approximately $34.1 million, or $0.71 per share,
for the quarter ended December 31, 2018, compared with a net
increase in net assets from operations of $6.5 million, or $0.13
per share, for the quarter ended September 30, 2018.
- Total investment income for the fourth quarter of 2018 amounted
to approximately $15.2 million, which was approximately equal to
the total investment income earned during the third quarter of
2018.
- For the quarter ended December 31, 2018 we recorded investment
income from our portfolio as follows:
- $7.0 million from our debt investments,
- $7.7 million from our collateralized loan obligation (“CLO”)
equity investments, and
- $0.4 million from all other sources.
- Our total expenses for the quarter ended December 31, 2018 were
approximately $6.7 million, which was approximately equal to our
total expenses for the quarter ended September 30, 2018.
- During the fourth quarter of 2018:
- We made investments of approximately $39.2 million in corporate
loans.
- We received, or were entitled to receive, proceeds of
approximately $38.9 million from repayments and amortization
payments on our debt investments, in addition to $6.5 million from
sales of CLO equity investments and $4.0 million from sales of CLO
debt investments.
- As of December 31, 2018 the following metrics applied (note
that none of these values represent a total return to
shareholders):
- The weighted average yield of our debt investments was 9.7% at
current cost, compared with 9.4% as of September 30, 2018.
- The weighted average effective yield of our CLO equity
investments at current cost was 15.6%, compared with 14.8% as of
September 30, 2018.
- The weighted average cash distribution yield of our CLO equity
investments at current cost was 17.4%, compared with 18.6% as of
September 30, 2018.
- Our weighted average credit rating on a fair value basis was
2.1 at the end of the fourth quarter of 2018 (compared to 2.0 at
the end of the third quarter of 2018).
- As of December 31, 2018 we had no investments on non-accrual
status.
- On February 22, 2019 our Board of Directors declared the
following distributions on our common stock:
Period Ending |
Record Date |
Payment Date |
Amount Per Share |
March 31, 2019 |
March 15, 2019 |
March 29, 2019 |
$0.200 |
April 30, 2019 |
April 23, 2019 |
April 30, 2019 |
$0.067 |
May 31, 2019 |
May 24, 2019 |
May 31, 2019 |
$0.067 |
June 30, 2019 |
June 21, 2019 |
June 28, 2019 |
$0.067 |
- On February 5, 2018 the Board of Directors authorized a stock
repurchase program of $25 million. Since the program’s inception
through December 31, 2018 we have repurchased approximately 3.8
million shares of our common stock at a weighted average share
price of $6.53 per share, totaling $25 million. Accordingly, over
this period, the program has produced an accretion to NAV of
approximately $0.08 per share.
- On December 21, 2018 and January 30, 2019 Oxford Square Funding
2018, LLC repaid approximately $39.3 million and $7.3 million,
respectively, of principal outstanding under the credit facility
(“Facility”) with Citibank, N.A. As of January 30, 2019 we had
approximately $78.4 million principal outstanding under the
Facility.
We will host a conference call to discuss our fourth quarter
results today, Thursday, February 28, 2019 at 09:00 AM ET. Please
call 1-888-339-0740 to participate. A recording of the conference
call will be available to replay for approximately 30 days
following the call. The replay number is 1-877-344-7529, and the
replay passcode is 10129061.
A presentation containing further detail regarding our quarterly
results of operations has been posted under the Investor Relations
section of our website at www.oxfordsquarecapital.com.
|
|
|
OXFORD
SQUARE CAPITAL CORP.CONSOLIDATED STATEMENTS OF
ASSETS AND LIABILITIES |
|
|
December 31,
2018 |
|
December 31,
2017 |
ASSETS |
|
|
|
|
|
|
|
Non-affiliated/non-control investments (cost: $486,232,755 and
$418,990,080, respectively) |
$ |
430,496,633 |
|
|
$ |
400,223,439 |
|
Affiliated investments (cost: $9,126,017 and $10,528,740,
respectively) |
|
14,492,197 |
|
|
|
18,218,787 |
|
Cash and
cash equivalents |
|
13,905,059 |
|
|
|
30,013,842 |
|
Restricted cash |
|
3,175,805 |
|
|
|
— |
|
Interest
and distributions receivable |
|
4,682,735 |
|
|
|
5,085,494 |
|
Other
assets |
|
392,784 |
|
|
|
579,694 |
|
Total
assets |
$ |
467,145,213 |
|
|
$ |
454,121,256 |
|
LIABILITIES |
|
|
|
|
|
|
|
Notes
payable – Credit Facility, net of deferred issuance costs |
$ |
85,522,569 |
|
|
$ |
— |
|
Notes
payable – 6.50% Unsecured Notes, net of deferred issuance
costs |
|
62,664,863 |
|
|
|
62,340,159 |
|
Base
management fee and net investment income incentive fee payable to
affiliate |
|
3,227,456 |
|
|
|
2,706,099 |
|
Accrued
interest payable |
|
488,608 |
|
|
|
11,621 |
|
Accrued
expenses |
|
517,470 |
|
|
|
644,735 |
|
Total
liabilities |
|
152,420,966 |
|
|
|
65,702,614 |
|
|
|
|
|
|
|
|
|
NET
ASSETS |
|
|
|
|
|
|
|
Common
stock, $0.01 par value, 100,000,000 shares authorized; 47,650,959
and 51,479,409 shares issued and outstanding, respectively |
|
476,509 |
|
|
|
514,794 |
|
Capital
in excess of par value |
|
456,970,560 |
|
|
|
529,297,749 |
|
Total
distributable earnings / (loss) |
|
(142,722,822 |
) |
|
|
(141,393,901 |
) |
Total net
assets |
|
314,724,247 |
|
|
|
388,418,642 |
|
Total
liabilities and net assets |
$ |
467,145,213 |
|
|
$ |
454,121,256 |
|
Net asset value per
common share |
$ |
6.60 |
|
|
$ |
7.55 |
|
|
|
|
OXFORD
SQUARE CAPITAL CORP.CONSOLIDATED STATEMENT OF
OPERATIONS |
|
|
Year Ended December 31,
2018 |
|
Year Ended December 31,
2017 |
|
Year Ended December 31,
2016 |
INVESTMENT
INCOME |
|
|
|
|
|
|
|
|
|
|
|
From
non-affiliated/non-control investments: |
|
|
|
|
|
|
|
|
|
|
|
Interest
income – debt investments |
$ |
25,183,547 |
|
|
$ |
24,561,956 |
|
|
$ |
33,649,267 |
|
Income
from securitization vehicles and investments |
|
27,837,032 |
|
|
|
33,274,392 |
|
|
|
32,503,279 |
|
Other
income |
|
2,984,773 |
|
|
|
3,198,469 |
|
|
|
2,228,877 |
|
Total
investment income from non-affiliated/non-control investments |
|
56,005,352 |
|
|
|
61,034,817 |
|
|
|
68,381,423 |
|
From affiliated
investments: |
|
|
|
|
|
|
|
|
|
|
|
Interest
income – debt investments |
|
271,916 |
|
|
|
382,200 |
|
|
|
331,404 |
|
Total
investment income from affiliated investments |
|
271,916 |
|
|
|
382,200 |
|
|
|
331,404 |
|
From control
investments: |
|
|
|
|
|
|
|
|
|
|
|
Interest
income – debt investments |
|
— |
|
|
|
— |
|
|
|
567,219 |
|
Total
investment income from control investments |
|
— |
|
|
|
— |
|
|
|
567,219 |
|
Total
investment income |
|
56,277,268 |
|
|
|
61,417,017 |
|
|
|
69,280,046 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
7,181,009 |
|
|
|
12,898,815 |
|
|
|
17,202,851 |
|
Base
management fees |
|
7,309,435 |
|
|
|
8,140,010 |
|
|
|
11,292,395 |
|
Professional fees |
|
1,227,296 |
|
|
|
2,799,113 |
|
|
|
6,393,812 |
|
Compensation expense |
|
907,995 |
|
|
|
901,472 |
|
|
|
837,343 |
|
Director’s fees |
|
441,501 |
|
|
|
584,580 |
|
|
|
642,000 |
|
Insurance |
|
247,178 |
|
|
|
256,956 |
|
|
|
159,573 |
|
Transfer
agent and custodian fees |
|
227,381 |
|
|
|
244,115 |
|
|
|
316,577 |
|
General
and administrative |
|
644,104 |
|
|
|
1,014,580 |
|
|
|
2,861,803 |
|
Total
expenses before incentive fees |
|
18,185,899 |
|
|
|
26,839,641 |
|
|
|
39,706,354 |
|
Net
investment income incentive fees |
|
4,585,151 |
|
|
|
3,850,646 |
|
|
|
2,795,399 |
|
Capital
gains incentive fees |
|
— |
|
|
|
— |
|
|
|
— |
|
Total
incentive fees |
|
4,585,151 |
|
|
|
3,850,646 |
|
|
|
2,795,399 |
|
Total
expenses |
|
22,771,050 |
|
|
|
30,690,287 |
|
|
|
42,501,753 |
|
Net investment
income |
|
33,506,218 |
|
|
|
30,726,730 |
|
|
|
26,778,293 |
|
Net change in
unrealized appreciation/depreciation on investments |
|
|
|
|
|
|
|
|
|
|
|
Non-Affiliate/non-control investments |
|
(36,969,481 |
) |
|
|
19,478,902 |
|
|
|
90,159,779 |
|
Affiliated investments |
|
(2,323,867 |
) |
|
|
3,561,269 |
|
|
|
4,695,861 |
|
Control
investments |
|
— |
|
|
|
— |
|
|
|
5,750,000 |
|
Total net
change in unrealized appreciation/depreciation on investments |
|
(39,293,348 |
) |
|
|
23,040,171 |
|
|
|
100,605,640 |
|
Net realized (losses)
gains |
|
|
|
|
|
|
|
|
|
|
|
Non-Affiliated/non-control investments |
|
(3,370,732 |
) |
|
|
(7,007,892 |
) |
|
|
(11,262,943 |
) |
Affiliated investments |
|
5,241 |
|
|
|
— |
|
|
|
— |
|
Control
investments |
|
— |
|
|
|
— |
|
|
|
(3,000,000 |
) |
Extinguishment of debt |
|
(60,752 |
) |
|
|
(3,149,338 |
) |
|
|
(2,759,227 |
) |
Total net
realized losses |
|
(3,426,243 |
) |
|
|
(10,157,230 |
) |
|
|
(17,022,170 |
) |
Net (decrease)/increase
in net assets resulting from operations |
$ |
(9,213,373 |
) |
|
$ |
43,609,671 |
|
|
$ |
110,361,763 |
|
Net increase in net
assets resulting from net investment income per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted |
$ |
0.67 |
|
|
$ |
0.60 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase
in net assets resulting from operations per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.19 |
) |
|
$ |
0.85 |
|
|
$ |
2.13 |
|
Diluted |
$ |
(0.19 |
) |
|
$ |
0.83 |
|
|
$ |
1.90 |
|
Weighted average shares
of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
49,622,157 |
|
|
|
51,479,409 |
|
|
|
51,858,313 |
|
Diluted |
|
49,622,157 |
|
|
|
58,349,224 |
|
|
|
61,773,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL HIGHLIGHTS
Financial highlights for the years ended December 31, 2018,
2017, 2016, 2015 and 2014 are as follows:
|
Year Ended December 31,
2018 |
|
Year Ended December 31,
2017 |
|
Year Ended December 31,
2016 |
|
Year Ended December 31,
2015 |
|
Year Ended December 31,
2014 |
Per Share
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value at
beginning of period |
$ |
7.55 |
|
|
$ |
7.50 |
|
|
$ |
6.40 |
|
|
$ |
8.64 |
|
|
$ |
9.85 |
|
Net investment
income(1)(3) |
|
0.67 |
|
|
|
0.60 |
|
|
|
0.52 |
|
|
|
0.66 |
|
|
|
1.17 |
|
Net realized and
unrealized gains (losses)(2)(3) |
|
(0.91 |
) |
|
|
0.25 |
|
|
|
1.62 |
|
|
|
(1.85 |
) |
|
|
(1.20 |
) |
Net change in net asset
value from operations |
|
(0.24 |
) |
|
|
0.85 |
|
|
|
2.14 |
|
|
|
(1.19 |
) |
|
|
(0.03 |
) |
Distributions per share
from net investment income |
|
(0.73 |
) |
|
|
(0.66 |
) |
|
|
(1.06 |
) |
|
|
(1.14 |
) |
|
|
(1.00 |
) |
Distributions based on
weighted average share impact |
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
(0.03 |
) |
Tax return of capital
distributions |
|
(0.07 |
) |
|
|
(0.14 |
) |
|
|
(0.10 |
) |
|
|
— |
|
|
|
(0.16 |
) |
Total
distributions(4) |
|
(0.79 |
) |
|
|
(0.80 |
) |
|
|
(1.15 |
) |
|
|
(1.13 |
) |
|
|
(1.19 |
) |
Effect of shares
repurchased, gross |
|
0.08 |
|
|
|
— |
|
|
|
0.11 |
|
|
|
0.08 |
|
|
|
0.01 |
|
Net asset value at end
of period |
$ |
6.60 |
|
|
$ |
7.55 |
|
|
$ |
7.50 |
|
|
$ |
6.40 |
|
|
$ |
8.64 |
|
Per share market value
at beginning of period |
$ |
5.74 |
|
|
$ |
6.61 |
|
|
$ |
6.08 |
|
|
$ |
7.53 |
|
|
$ |
10.34 |
|
Per share market value
at end of period |
$ |
6.47 |
|
|
$ |
5.74 |
|
|
$ |
6.61 |
|
|
$ |
6.08 |
|
|
$ |
7.53 |
|
Total return based on
Market Value(5) |
|
26.95 |
% |
|
|
(2.01 |
)% |
|
|
33.29 |
% |
|
|
(4.35 |
)% |
|
|
(17.22 |
)% |
Total return based on
Net Asset Value(6) |
|
(1.99 |
)% |
|
|
11.33 |
% |
|
|
35.31 |
% |
|
|
(12.73 |
)% |
|
|
(0.51 |
)% |
Shares outstanding at
end of period |
|
47,650,959 |
|
|
|
51,479,409 |
|
|
|
51,479,409 |
|
|
|
56,396,435 |
|
|
|
60,303,769 |
|
Ratios/Supplemental Data(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets at end of
period (000’s) |
$ |
314,724 |
|
|
$ |
388,419 |
|
|
$ |
385,992 |
|
|
$ |
360,935 |
|
|
$ |
520,813 |
|
Average net assets
(000’s) |
$ |
369,258 |
|
|
$ |
385,947 |
|
|
$ |
343,328 |
|
|
$ |
487,894 |
|
|
$ |
560,169 |
|
Ratio of expenses to
average net assets |
|
6.17 |
% |
|
|
7.95 |
% |
|
|
12.38 |
% |
|
|
9.80 |
% |
|
|
8.70 |
% |
Ratio of net investment
income to average net assets |
|
9.07 |
% |
|
|
7.96 |
% |
|
|
7.80 |
% |
|
|
8.12 |
% |
|
|
12.24 |
% |
Portfolio turnover
rate(7) |
|
35.18 |
% |
|
|
43.02 |
% |
|
|
25.73 |
% |
|
|
24.96 |
% |
|
|
45.91 |
% |
(1) Represents per share net investment income for
the period, based upon weighted average shares
outstanding.(2) Net realized and unrealized gains
include rounding adjustments to reconcile change in net asset value
per share.(3) During the first quarter of 2015, the
Company identified a non-material error in its accounting for
income from CLO equity investments. Prospectively as of January 1,
2015, the Company records income from its CLO equity investments
using the effective yield method in accordance with the accounting
guidance in ASC 325-40, Beneficial Interests in Securitized
Financial Assets, based upon an estimation of an effective yield to
maturity utilizing assumed cash flows. An out-of-period adjustment
to net investment income incentive fees, in the amount of $2.4
million, or $0.04 per share, is reflected in the year ended
December 31, 2015. Prior period amounts are not materially
affected. During the quarter ended September 30, 2015, the Company
recorded an out of period adjustment related to a miscalculation of
discount accretion which increased interest income and increased
investment cost, by approximately $1.4 million. For the year ended
December 31, 2015, approximately $1.1 million, or $0.02 per share,
of the adjustment related to prior years. The increase in the
investment cost has a corresponding effect on the investment’s
unrealized depreciation of the same amount. Management concluded
the adjustment was not material to previously filed financial
statements.(4) Management monitors available taxable
earnings, including net investment income and realized capital
gains, to determine if a tax return of capital may occur for the
year. To the extent the Company’s taxable earnings fall below the
total amount of the Company’s distributions for that fiscal year, a
portion of those distributions may be deemed a tax return of
capital to the Company’s stockholders. The ultimate tax character
of the Company’s earnings cannot be determined until tax returns
are prepared after the end of the fiscal year.(5) Total
return equals the increase or decrease of ending market value over
beginning market value, plus distributions, divided by the
beginning market value per share, assuming distribution
reinvestment prices obtained under the Company’s distribution
reinvestment plan, excluding any discounts.(6) Total return
based on net asset value equals the increase or decrease of ending
net asset value over beginning net asset value, plus distributions,
divided by the beginning net asset value.(7) Portfolio
turnover rate is calculated using the lesser of the annual cash
investment sales and debt repayments or annual cash investment
purchases over the average of the total investments at fair
value.(8) The following table provides supplemental
performance ratios measured for the years ended December 31, 2018,
2017, 2016, 2015 and 2014:
|
Year Ended December 31,
2018 |
|
Year Ended December 31,
2017 |
|
Year EndedDecember 31,
2016 |
|
Year Ended December 31,
2015 |
|
Year Ended December 31,
2014 |
Ratio of expenses to
average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses before
incentive fees |
4.92 |
% |
|
6.95 |
% |
|
11.57 |
% |
|
10.00 |
% |
|
8.39 |
% |
Net investment income
incentive fees |
1.24 |
% |
|
1.00 |
% |
|
0.81 |
% |
|
(0.19 |
)% |
|
1.00 |
% |
Capital gains incentive
fees |
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
(0.69 |
)% |
Ratio of expenses,
excluding interest expense, to average net assets |
4.21 |
% |
|
4.61 |
% |
|
7.37 |
% |
|
5.73 |
% |
|
5.17 |
% |
About Oxford Square Capital Corp. Oxford Square
Capital Corp. is a publicly-traded business development company
principally investing in syndicated bank loans and debt and equity
tranches of collateralized loan obligation (“CLO”) vehicles. CLO
investments may also include warehouse facilities, which are
financing structures intended to aggregate loans that may be used
to form the basis of a CLO vehicle.
Forward-Looking Statements This press release
contains forward-looking statements subject to the inherent
uncertainties in predicting future results and conditions. Any
statements that are not statements of historical fact (including
statements containing the words “believes,” “plans,” “anticipates,”
“expects,” “estimates” and similar expressions) should also be
considered to be forward-looking statements. Certain factors could
cause actual results and conditions to differ materially from those
projected in these forward-looking statements. These factors are
identified from time to time in our filings with the Securities and
Exchange Commission. We undertake no obligation to update such
statements to reflect subsequent events, except as may be required
by law.
Contact:Bruce Rubin203-983-5280
Oxford Square Capital (NASDAQ:OXSQL)
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From Jun 2024 to Jul 2024
Oxford Square Capital (NASDAQ:OXSQL)
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From Jul 2023 to Jul 2024