Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended March 31, 2019
30 April 2019 - 10:00PM
Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQL)
(NasdaqGS: OXSQZ) (“OXSQ,” the “Company,” “we,” “us” or “our”)
announced today its financial results and related information for
the quarter ended March 31, 2019.
- As of March 31, 2019 net asset value (“NAV”) per share was
$6.67, compared with the NAV per share of $6.60 at the prior
quarter end.
- For the quarter ended March 31, 2019 we recorded GAAP net
investment income of approximately $8.4 million, or $0.18 per
share, compared to $8.5 million, or $0.18 per share for the quarter
ended December 31, 2018. We recorded net realized losses of
approximately $1.3 million and a net increase in unrealized
appreciation of approximately $5.7 million for the quarter ended
March 31, 2019. In total, we had a net increase in net assets from
operations of approximately $12.7 million, or $0.27 per share, for
the quarter ended March 31, 2019, compared with a net decrease in
net assets from operations of $34.1 million, or $0.71 per share,
for the quarter ended December 31, 2018.
- Total investment income for the first quarter of 2019 amounted
to approximately $14.2 million, which represents a decrease of
approximately $1.0 million from the fourth quarter of 2018.
- For the quarter ended March 31, 2019 we recorded investment
income from our portfolio as follows:
- $7.2 million from our debt investments,
- $6.8 million from our collateralized loan obligation (“CLO”)
equity investments, and
- $0.2 million from all other sources.
- Our total expenses for the quarter ended March 31, 2019 were
approximately $5.9 million, which represents a decrease of
approximately $0.8 million from the fourth quarter of 2018.
- During the first quarter of 2019:
- We made investments of approximately $4.4 million in corporate
loans.
- We received, or were entitled to receive, proceeds of
approximately $3.0 million from sales of corporate loan
investments, in addition to $0.6 million from sales of CLO equity
investments, and $0.4 million from repayments and amortization
payments on our debt investments.
- As of March 31, 2019 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 9.8% at
current cost, compared with 9.7% as of December 31, 2018.
- The weighted average effective yield of our CLO equity
investments at current cost was 14.6%, compared with 15.6% as of
December 31, 2018.
- The weighted average cash distribution yield of our CLO equity
investments at current cost was 18.4%, compared with 17.4% as of
December 31, 2018.
- Our weighted average credit rating on a fair value basis was
2.1 at the end of the first quarter of 2019 (compared to 2.1 at the
end of the fourth quarter of 2018).
- As of March 31, 2019 we had no investments on non-accrual
status.
- On April 3, 2019, we completed an underwritten public offering
of $42.5 million in aggregate principal amount of our 6.25%
Unsecured Notes due 2026 (the “6.25% Notes”). On April 9,
2019, we issued an additional approximately $2.3 million in
aggregate principal amount of the 6.25% Notes pursuant to the
underwriters’ partial exercise of their overallotment option.
The 6.25% Notes bear interest at a rate of 6.25% and will mature on
April 30, 2026, and may be redeemed in whole or in part at any time
at our option on or after April 30, 2022. The 6.25% Notes are
listed on the NASDAQ Global Select Market under the trading symbol
“OXSQZ.”
- On April 23, 2019 our Board of Directors declared the following
distributions on our common stock:
|
Period
Ending |
Record
Date |
Payment
Date |
Amount Per Share |
|
July 31, 2019 |
July 24, 2019 |
July 31, 2019 |
$0.067 |
|
August 31, 2019 |
August 23, 2019 |
August 30, 2019 |
$0.067 |
|
September 30, 2019 |
September 23, 2019 |
September 30, 2019 |
$0.067 |
We will host a conference call to discuss our first quarter
results today, Tuesday, April 30, 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 10131088.
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
|
March 31, 2019 |
|
|
December 31,
2018 |
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
Non-affiliated/non-control investments (cost: $484,168,171 and
$486,232,755, respectively) |
$ |
432,660,699 |
|
|
$ |
430,496,633 |
|
Affiliated investments (cost: $9,126,017and $9,126,017,
respectively) |
|
15,942,483 |
|
|
|
14,492,197 |
|
Cash
equivalents |
|
10,081,620 |
|
|
|
13,905,059 |
|
Restricted Cash |
|
2,402,254 |
|
|
|
3,175,805 |
|
Interest
and distributions receivable |
|
4,569,350 |
|
|
|
4,682,735 |
|
Other
assets |
|
462,084 |
|
|
|
392,784 |
|
Total
assets |
$ |
466,118,490 |
|
|
$ |
467,145,213 |
|
LIABILITIES |
|
|
|
|
|
|
|
Notes
payable – Credit Facility, net of deferred issuance costs |
$ |
77,301,544 |
|
|
$ |
85,522,569 |
|
Notes
payable – 6.50% Unsecured Notes, net of deferred issuance
costs |
|
62,744,927 |
|
|
|
62,664,863 |
|
Securities purchased not settled |
|
4,433,875 |
|
|
|
— |
|
Base
management fee and net investment income incentive fee payable to
affiliate |
|
2,782,589 |
|
|
|
3,227,456 |
|
Accrued
interest payable |
|
339,407 |
|
|
|
488,608 |
|
Accrued
expenses |
|
572,141 |
|
|
|
517,470 |
|
Total
liabilities |
|
148,174,483 |
|
|
|
152,420,966 |
|
|
|
|
|
|
|
|
|
NET
ASSETS |
|
|
|
|
|
|
|
Common
stock, $0.01 par value, 100,000,000 shares authorized; 47,650,959
and 47,650,959 shares issued and outstanding, respectively |
|
476,509 |
|
|
|
476,509 |
|
Capital
in excess of par value |
|
456,970,560 |
|
|
|
456,970,560 |
|
Total
distributable earnings / (loss) |
|
(139,503,062 |
) |
|
|
(142,722,822 |
) |
Total net
assets |
|
317,944,007 |
|
|
|
314,724,247 |
|
Total
liabilities and net assets |
$ |
466,118,490 |
|
|
$ |
467,145,213 |
|
Net asset
value per common share |
$ |
6.67 |
|
|
$ |
6.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OXFORD SQUARE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
Three Months Ended March 31,
2019 |
|
|
Three Months Ended March 31,
2018 |
|
INVESTMENT
INCOME |
|
|
|
|
|
|
|
From
non-affiliated investments: |
|
|
|
|
|
|
|
Interest
income – debt investments |
$ |
7,148,481 |
|
|
$ |
5,821,737 |
|
Income
from securitization vehicles and investments |
|
6,846,925 |
|
|
|
6,802,864 |
|
Other
income |
|
229,708 |
|
|
|
621,983 |
|
Total
investment income from non-affiliated investments |
|
14,225,114 |
|
|
|
13,246,584 |
|
|
|
|
|
|
|
|
|
From
affiliated investments: |
|
|
|
|
|
|
|
Interest
income – debt investments |
|
— |
|
|
|
100,216 |
|
Total
investment income from affiliated investments |
|
— |
|
|
|
100,216 |
|
Total
investment income |
|
14,225,114 |
|
|
|
13,346,800 |
|
EXPENSES |
|
|
|
|
|
|
|
Interest
expense |
|
2,149,841 |
|
|
|
1,126,080 |
|
Base
management fees |
|
1,626,538 |
|
|
|
1,679,814 |
|
Professional fees |
|
367,251 |
|
|
|
156,918 |
|
Compensation expense |
|
232,928 |
|
|
|
260,089 |
|
General
and administrative |
|
328,517 |
|
|
|
400,571 |
|
Total
expenses before incentive fees |
|
4,705,075 |
|
|
|
3,623,472 |
|
Net
investment income incentive fees |
|
1,156,051 |
|
|
|
1,000,232 |
|
Total
expenses |
|
5,861,126 |
|
|
|
4,623,704 |
|
Net investment
income |
|
8,363,988 |
|
|
|
8,723,096 |
|
Net change in
unrealized appreciation/(depreciation) on investments: |
|
|
|
|
|
|
|
Non-Affiliated investments |
|
4,228,650 |
|
|
|
3,351,602 |
|
Affiliated investments |
|
1,450,286 |
|
|
|
(873,570 |
) |
Total net
change in unrealized appreciation/(depreciation) on
investments |
|
5,678,936 |
|
|
|
2,478,032 |
|
Net realized
gains/(losses): |
|
|
|
|
|
|
|
Non-Affiliated investments |
|
(1,278,866 |
) |
|
|
288,935 |
|
Extinguishment of debt |
|
(14,106 |
) |
|
|
— |
|
Total net
realized gains/(losses) |
|
(1,292,972 |
) |
|
|
288,935 |
|
Net increase in net
assets resulting from operations |
$ |
12,749,952 |
|
|
$ |
11,490,063 |
|
Net increase in net
assets resulting from net investment income per common share (Basic
and Diluted) |
$ |
0.18 |
|
|
$ |
0.17 |
|
Net increase in net
assets resulting from operations per common share (Basic and
Diluted) |
$ |
0.27 |
|
|
$ |
0.22 |
|
Weighted average shares
of common stock outstanding: |
|
|
|
|
|
|
|
Basic and
Diluted |
|
47,650,959 |
|
|
|
51,200,060 |
|
Distributions per
share |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL HIGHLIGHTS – (unaudited)
Financial highlights for the three months ended March 31, 2019
and 2018, respectively, are as follows:
Per Share Data |
|
Three Months Ended March 31,
2019 |
|
Three Months Ended March 31,
2018 |
Net asset value as of
beginning of period |
|
$ |
6.60 |
|
|
$ |
7.55 |
|
Net
investment income(1) |
|
|
0.18 |
|
|
|
0.17 |
|
Net
realized and unrealized gains(2) |
|
|
0.09 |
|
|
|
0.05 |
|
Net
increase in net asset value from operations |
|
|
0.27 |
|
|
|
0.22 |
|
Distributions per share from net investment income |
|
|
(0.17 |
) |
|
|
(0.20 |
) |
Tax return
of capital distributions(3) |
|
|
(0.03 |
) |
|
|
— |
|
Total
distributions |
|
|
(0.20 |
) |
|
|
(0.20 |
) |
Effect of
shares repurchased, gross |
|
|
— |
|
|
|
0.03 |
|
Net asset
value at end of period |
|
$ |
6.67 |
|
|
$ |
7.60 |
|
Per share
market value at beginning of period |
|
$ |
6.47 |
|
|
$ |
5.74 |
|
Per share
market value at end of period |
|
$ |
6.50 |
|
|
$ |
6.11 |
|
Total
return based on Market Value(4) |
|
|
3.55 |
% |
|
|
9.93 |
% |
Total
return based on Net Asset Value(5) |
|
|
4.09 |
% |
|
|
3.31 |
% |
Shares
outstanding at end of period |
|
|
47,650,959 |
|
|
|
50,489,149 |
|
Ratios/Supplemental Data(8) |
|
|
|
|
|
|
Net assets
at end of period (000’s) |
|
$ |
317,944 |
|
|
$ |
383,809 |
|
Average net
assets (000’s) |
|
|
316,334 |
|
|
|
387,442 |
|
Ratio of
operating expenses to average net assets(6) |
|
|
7.41 |
% |
|
|
4.77 |
% |
Ratio of
net investment income to average net assets(6) |
|
|
10.58 |
% |
|
|
9.01 |
% |
Portfolio
turnover rate(7) |
|
|
0.91 |
% |
|
|
1.45 |
% |
|
(1) Represents per share net investment income for the period,
based upon average shares outstanding. |
(2) Net
realized and unrealized gains include rounding adjustments to
reconcile change in net asset value per share. |
(3) 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. |
(4) Total return based on market value equals the increase or
decrease of ending market value over beginning market value, plus
distributions, divided by the beginning market value, assuming
distribution reinvestment prices obtained under the Company’s
distribution reinvestment plan, excluding any discounts. Total
return is not annualized. |
(5) 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. Total return is not annualized. |
(6) Annualized. |
(7) Portfolio turnover rate is calculated using
the lesser of the year-to-date cash investment sales and debt
repayments or year-to-date cash investment purchases over the
average of the total investments at fair value. For the three
months ended March 31, 2019 the portfolio turnover rate is
calculated using the year-to-date cash investment sales and debt
repayments over the average of the total investments at fair value
since there were no cash investment purchases during the
period. |
(8) The following table provides supplemental
performance ratios (annualized) measured for the three months ended
March 31, 2019 and 2018: |
|
|
Three
Months Ended March 31, 2019 |
|
|
Three
Months Ended March 31, 2018 |
|
Ratio of operating expenses
to average net assets: |
|
|
|
|
|
Operating expenses
before incentive fees |
5.95 |
% |
|
3.74 |
% |
Net investment income
incentive fees |
1.46 |
% |
|
1.03 |
% |
Ratio of expenses,
excluding interest expense |
4.69 |
% |
|
3.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
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
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