Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended June 30, 2019
30 July 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 June 30, 2019.
- As of June 30, 2019 net asset value (“NAV”) per share was
$6.31, compared with the NAV per share of $6.67 at the prior
quarter end.
- For the quarter ended June 30, 2019 we recorded GAAP net
investment income of approximately $12.8 million, or $0.27 per
share, compared to $8.4 million, or $0.18 per share for the quarter
ended March 31, 2019. We recorded net realized losses of
approximately $36 thousand and net unrealized depreciation of
approximately $20.3 million for the quarter ended June 30, 2019. In
total, we had a net decrease in net assets resulting from
operations of approximately $7.5 million, or $0.16 per share, for
the quarter ended June 30, 2019, compared with a net increase in
net assets resulting from operations of $12.7 million, or $0.27 per
share, for the quarter ended March 31, 2019.
- Total investment income for the second quarter of 2019 amounted
to approximately $20.9 million, which represents an increase of
approximately $6.7 million from the first quarter of 2019.
- For the quarter ended June 30, 2019 we recorded investment
income from our portfolio as follows:
- $7.4 million from our debt investments,
- $6.6 million from our collateralized loan obligation (“CLO”)
equity investments
- $6.3 million of dividend income – PIK from affiliated
investments, and
- $0.5 million from all other sources.
- Our total expenses for the quarter ended June 30, 2019 were
approximately $8.1 million, which represents an increase of
approximately $2.3 million from the first quarter of 2019.
- During the second quarter of 2019:
- We made investments of approximately $20.6 million in senior
secured loans and approximately $25.8 million in CLO equity
investments.
- We received, or were entitled to receive, proceeds of
approximately $2.5 million from sales of senior secured loans, in
addition to $4.9 million from sales of CLO equity investments, and
$23.5 million from repayments and amortization payments on our debt
investments.
- As of June 30, 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 10.0% at
current cost, compared with 9.8% as of March 31, 2019.
- The weighted average effective yield of our CLO equity
investments at current cost was 13.1%, compared with 14.6% as of
March 31, 2019.
- The weighted average cash distribution yield of our CLO equity
investments at current cost was 19.9%, compared with 18.4% as of
March 31, 2019.
- Our weighted average credit rating on a fair value basis was
2.2 at the end of the first quarter of 2019 (compared to 2.1 at the
end of the first quarter of 2019).
- As of June 30, 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 July 25, 2019 our Board of Directors declared the following
distributions on our common stock:
Period Ending |
Record Date |
Payment Date |
Amount Per Share |
October 31, 2019 |
October 21, 2019 |
October 31, 2019 |
$ |
0.067 |
November 30, 2019 |
November 15, 2019 |
November 29, 2019 |
$ |
0.067 |
December 31, 2019 |
December 18, 2019 |
December 31, 2019 |
$ |
0.067 |
We will host a conference call to discuss our second quarter
results today, Tuesday, July 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 10133936.
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
|
|
June 30, 2019 |
|
December 31, 2018 |
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
Non-affiliated/non-control investments (cost: $497,304,443 and
$486,232,755, respectively) |
|
$ |
433,845,212 |
|
|
$ |
430,496,633 |
|
Affiliated investments (cost: $15,461,904 and $9,126,017,
respectively) |
|
|
13,949,814 |
|
|
|
14,492,197 |
|
Cash equivalents |
|
|
10,336,577 |
|
|
|
13,905,059 |
|
Restricted cash |
|
|
2,267,372 |
|
|
|
3,175,805 |
|
Interest and distributions receivable |
|
|
4,486,790 |
|
|
|
4,682,735 |
|
Other assets |
|
|
421,172 |
|
|
|
392,784 |
|
Total assets |
|
$ |
465,306,937 |
|
|
$ |
467,145,213 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
Notes payable – 6.50% Unsecured Notes, net of deferred issuance
costs |
|
$ |
62,825,881 |
|
|
$ |
62,664,863 |
|
Notes payable – Credit Facility, net of deferred issuance
costs |
|
|
52,811,859 |
|
|
|
85,522,569 |
|
Notes payable – 6.25% Unsecured Notes, net of deferred issuance
costs |
|
|
43,201,242 |
|
|
|
— |
|
Base management fee and net investment income incentive fee payable
to affiliate |
|
|
4,223,566 |
|
|
|
3,227,456 |
|
Accrued interest payable |
|
|
972,028 |
|
|
|
488,608 |
|
Accrued expenses |
|
|
442,887 |
|
|
|
517,470 |
|
Total liabilities |
|
|
164,477,463 |
|
|
|
152,420,966 |
|
COMMITMENTS AND
CONTINGENCIES (Note 13) |
|
|
|
|
|
|
|
|
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 / (accumulated losses) |
|
|
(156,617,595 |
) |
|
|
(142,722,822 |
) |
Total net assets |
|
|
300,829,474 |
|
|
|
314,724,247 |
|
Total liabilities and net assets |
|
$ |
465,306,937 |
|
|
$ |
467,145,213 |
|
Net asset value per common share |
|
$ |
6.31 |
|
|
$ |
6.60 |
|
OXFORD SQUARE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
|
Three Months Ended June 30, 2019 |
|
Three Months Ended June 30, 2018 |
|
Six Months Ended June 30, 2019 |
|
Six Months Ended June 30, 2018 |
INVESTMENT
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From non-affiliated investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income – debt investments |
|
$ |
7,432,376 |
|
|
$ |
5,851,355 |
|
|
$ |
14,580,857 |
|
|
$ |
11,673,092 |
|
Income from securitization vehicles and investments |
|
|
6,649,481 |
|
|
|
6,100,764 |
|
|
|
13,496,406 |
|
|
|
12,903,628 |
|
Other income |
|
|
495,158 |
|
|
|
465,203 |
|
|
|
724,866 |
|
|
|
1,087,186 |
|
Total investment income from non-affiliated investments |
|
|
14,577,015 |
|
|
|
12,417,322 |
|
|
|
28,802,129 |
|
|
|
25,663,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From affiliated investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Income – PIK |
|
|
6,335,886 |
|
|
|
— |
|
|
|
6,335,886 |
|
|
|
— |
|
Interest income – debt investments |
|
|
— |
|
|
|
101,400 |
|
|
|
— |
|
|
|
201,616 |
|
Total investment income from affiliated investments |
|
|
6,335,886 |
|
|
|
101,400 |
|
|
|
6,335,886 |
|
|
|
201,616 |
|
Total investment income |
|
|
20,912,901 |
|
|
|
12,518,722 |
|
|
|
35,138,015 |
|
|
|
25,865,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
2,806,159 |
|
|
|
1,250,694 |
|
|
|
4,956,000 |
|
|
|
2,376,774 |
|
Base management fees |
|
|
1,868,123 |
|
|
|
1,742,391 |
|
|
|
3,494,661 |
|
|
|
3,422,205 |
|
Professional fees |
|
|
354,818 |
|
|
|
348,159 |
|
|
|
722,069 |
|
|
|
505,077 |
|
Compensation expense |
|
|
194,975 |
|
|
|
216,133 |
|
|
|
427,903 |
|
|
|
476,222 |
|
General and administrative |
|
|
554,075 |
|
|
|
433,624 |
|
|
|
882,592 |
|
|
|
834,195 |
|
Total expenses before incentive fees |
|
|
5,778,150 |
|
|
|
3,991,001 |
|
|
|
10,483,225 |
|
|
|
7,614,473 |
|
Net investment income incentive fees |
|
|
2,355,442 |
|
|
|
839,710 |
|
|
|
3,511,493 |
|
|
|
1,839,942 |
|
Total expenses |
|
|
8,133,592 |
|
|
|
4,830,711 |
|
|
|
13,994,718 |
|
|
|
9,454,415 |
|
Net investment income |
|
|
12,779,309 |
|
|
|
7,688,011 |
|
|
|
21,143,297 |
|
|
|
16,411,107 |
|
Net change in unrealized
appreciation/(depreciation) on investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Affiliated investments |
|
|
(11,951,759 |
) |
|
|
(2,477,460 |
) |
|
|
(7,723,109 |
) |
|
|
874,142 |
|
Affiliated investments |
|
|
(8,328,556 |
) |
|
|
2,737,099 |
|
|
|
(6,878,270 |
) |
|
|
1,863,529 |
|
Total net change in unrealized appreciation/(depreciation) on
investments |
|
|
(20,280,315 |
) |
|
|
259,639 |
|
|
|
(14,601,379 |
) |
|
|
2,737,671 |
|
Net realized
gains/(losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Affiliated/non-control investments |
|
|
1,296 |
|
|
|
(1,045,739 |
) |
|
|
(1,277,570 |
) |
|
|
(756,804 |
) |
Extinguishment of debt |
|
|
(36,980 |
) |
|
|
— |
|
|
|
(51,086 |
) |
|
|
— |
|
Total net realized gains/(losses) |
|
|
(35,684 |
) |
|
|
(1,045,739 |
) |
|
|
(1,328,656 |
) |
|
|
(756,804 |
) |
Net increase/(decrease) in net
assets resulting from operations |
|
$ |
(7,536,690 |
) |
|
$ |
6,901,911 |
|
|
$ |
5,213,262 |
|
|
$ |
18,391,974 |
|
FINANCIAL HIGHLIGHTS – (unaudited)
Financial highlights for the three and six months ended June 30,
2019 and 2018, respectively, are as follows:
Per Share Data |
|
Three Months Ended June 30, 2019 |
|
Three Months Ended June 30, 2018 |
|
Six Months Ended June 30, 2019 |
|
Six Months Ended June 30,
2018 |
Net asset value as of
beginning of period |
|
$ |
6.67 |
|
|
$ |
7.60 |
|
|
|
$ |
6.60 |
|
|
$ |
7.55 |
|
Net investment income(1) |
|
|
0.27 |
|
|
|
0.15 |
|
|
|
|
0.44 |
|
|
|
0.32 |
|
Net realized and unrealized
gains/(losses)(2) |
|
|
(0.43 |
) |
|
|
(0.01 |
) |
|
|
|
(0.33 |
) |
|
|
0.04 |
|
Net (decrease)/increase in net
asset value from operations |
|
|
(0.16 |
) |
|
|
0.14 |
|
|
|
|
0.11 |
|
|
|
0.36 |
|
Distributions per share from
net investment income |
|
|
(0.17 |
) |
|
|
(0.20 |
) |
|
|
|
(0.34 |
) |
|
|
(0.40 |
) |
Tax return of capital
distributions(3) |
|
|
(0.03 |
) |
|
|
— |
|
|
|
|
(0.06 |
) |
|
|
— |
|
Total distributions |
|
|
(0.20 |
) |
|
|
(0.20 |
) |
|
|
|
(0.40 |
) |
|
|
(0.40 |
) |
Effect of shares repurchased,
gross |
|
|
— |
|
|
|
0.02 |
|
|
|
|
— |
|
|
|
0.05 |
|
Net asset value at end of
period |
|
$ |
6.31 |
|
|
$ |
7.56 |
|
|
|
$ |
6.31 |
|
|
$ |
7.56 |
|
Per share market value at
beginning of period |
|
$ |
6.50 |
|
|
$ |
6.11 |
|
|
|
$ |
6.47 |
|
|
$ |
5.74 |
|
Per share market value at end
of period |
|
$ |
6.40 |
|
|
$ |
6.90 |
|
|
|
$ |
6.40 |
|
|
$ |
6.90 |
|
Total return based on Market
Value(4) |
|
|
1.60 |
% |
|
|
16.20 |
% |
|
|
|
5.21 |
% |
|
|
27.74 |
% |
Total return based on Net
Asset Value(5) |
|
|
(2.38 |
)% |
|
|
2.11 |
% |
|
|
|
1.68 |
% |
|
|
5.43 |
% |
Shares outstanding at end of
period |
|
|
47,650,959 |
|
|
|
49,407,609 |
|
|
|
|
47,650,959 |
|
|
|
49,407,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets at end of period
(000’s) |
|
$ |
300,829 |
|
|
$ |
373,408 |
|
|
|
$ |
300,829 |
|
|
$ |
373,408 |
|
Average net assets
(000’s) |
|
|
309,387 |
|
|
|
379,613 |
|
|
|
|
312,841 |
|
|
|
383,506 |
|
Ratio of operating expenses to
average net assets(6) |
|
|
10.52 |
% |
|
|
5.09 |
% |
|
|
|
8.95 |
% |
|
|
4.93 |
% |
Ratio of net investment income
to average net assets(6) |
|
|
16.52 |
% |
|
|
8.10 |
% |
|
|
|
13.52 |
% |
|
|
8.56 |
% |
Portfolio turnover
rate(7) |
|
|
6.89 |
% |
|
|
10.73 |
% |
|
|
|
7.82 |
% |
|
|
15.22 |
% |
____________
(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.(8) The following
table provides supplemental performance ratios (annualized)
measured for the three and six months ended June 30, 2019 and
2018:
|
Three Months Ended June 30,
2019 |
Three Months Ended June 30,
2018 |
Six Months Ended June 30, 2019 |
Six Months Ended June 30,
2018 |
Ratio of operating
expenses to average net assets: |
|
|
|
|
Operating expenses before
incentive fees |
7.47 |
% |
4.21 |
% |
6.70 |
% |
3.97 |
% |
Net investment income
incentive fees |
3.05 |
% |
0.88 |
% |
2.24 |
% |
0.96 |
% |
Ratio of expenses, excluding
interest expense |
6.89 |
% |
3.77 |
% |
5.78 |
% |
3.69 |
% |
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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