OFS Credit Company Increases Common Stock Distribution and Declares Preferred Stock Distributions

Rhea-AI Summary

OFS Credit Company (NASDAQ:OCCI) has declared a quarterly cash distribution of $0.53 per share, marking a 2% increase from the previous quarter, payable on April 30, 2021. Stockholders can choose between cash or stock, with 80% of the distribution expected to be in shares. The Company also announced cash distributions for its 6.875% Series A and 6.60% Series B Term Preferred Stocks. The preferred share distributions are set at $0.1432292 and $0.1375 respectively for several upcoming months. Management anticipates that these actions will enhance the balance sheet and position the company for future investments.

Positive

• Quarterly distribution of $0.53 per share represents a 2% increase.
• 80% of the distribution to be paid in shares, potentially enhancing equity.
• Management believes cash and stock distributions will strengthen the balance sheet.

Negative

• Possible dilution for current shareholders due to stock issuance.
• Taxable consequences for stockholders regardless of cash or stock distribution.

OFS Credit Company (NASDAQ:OCCI) (“OFS Credit,” the “Company,” “we,” “us” or “our”), an investment company that primarily invests in collateralized loan obligation (“CLO”) equity and debt securities, today announced that its Board of Directors has declared a $0.53 per share quarterly distribution, an approximate 2% increase from the prior quarter, for common stockholders for the quarter ending April 30, 2021. The Board of Directors has also declared monthly cash distributions on the 6.875% Series A Term Preferred Stock and 6.60% Series B Term Preferred Stock through July 2021.

The distribution for common stockholders will be paid in cash or shares of our common stock at the election of stockholders. The total amount of cash distributed to all stockholders will be limited to 20% of the total distribution to be paid, excluding any cash paid for fractional shares. The remainder of the distribution (approximately 80%) will be paid in the form of shares of our common stock. The exact distribution of cash and stock to any given stockholder will be dependent upon his/her election as well as elections of other stockholders, subject to the pro-rata limitation.

Management believes that the cash and stock distribution will allow the Company to strengthen its balance sheet and to be in position to capitalize on potential future investment opportunities. Management believes its commitment to strong, long-term performance is aligned with the interests of OFS Capital Management, LLC, our investment advisor who, together with other insiders, own approximately 15% of the Company’s common stock.

The following schedule applies to the distribution for common stockholders of record on the close of business of the record date:

Record Date	Payment Date	Distribution Per Share
March 23, 2021	April 30, 2021	$0.53

The amount, details and U.S. federal income tax consequences of the distribution will be described in the election form and accompanying materials that will be mailed to stockholders in connection with the distribution promptly following the record date. Election forms must be returned on or before 5:00 p.m. Eastern Time on April 22, 2021 to be effective. Stockholders who do not return a timely and properly completed election form before the election deadline will be deemed to have made an election to receive 100% of their distribution in stock.

Participants in the Company's dividend reinvestment plan will also receive an election form. The investment feature of the dividend reinvestment plan will be suspended for the distribution and will be reinstated after the distribution has been completed.

Stockholders who hold their shares through a bank, broker or nominee, or in “street name” will not receive an election form directly from the Company and should receive information regarding the election process from their bank, broker or nominee. Street name holders should contact their bank, broker or nominee for additional information.

Regardless of whether a stockholder receives the distribution in cash, stock, or some combination of cash and stock, the Company expects that entire amount of the distribution will be fully taxable to stockholders.

In addition, the Board of Directors has declared cash distributions on shares of the Company’s 6.875% Series A Term Preferred Stock and 6.60% Series B Term Preferred Stock. For the Company’s 6.875% Series A Term Preferred Stock, the Board declared six monthly cash distributions of $0.1432292 per preferred share. For the Company’s 6.60% Series B Term Preferred Stock, the Board declared six monthly cash distributions of $0.1375 per preferred share.

The following schedule applies to the 6.875% Series A Term Preferred Stock distributions for preferred stockholders of record on the close of business of each specific Record Date:

Record Date	Payable Date	Distribution Per Share
February 19, 2021	February 26, 2021	$0.1432292
March 24, 2021	March 31, 2021	$0.1432292
April 23, 2021	April 30, 2021	$0.1432292
May 24, 2021	May 31, 2021	$0.1432292
June 23, 2021	June 30, 2021	$0.1432292
July 23, 2021	July 30, 2021	$0.1432292

The following schedule applies to the 6.60% Series B Term Preferred Stock distributions for preferred stockholders of record on the close of business of each specific Record Date:

Record Date	Payable Date	Distribution Per Share
February 19, 2021	February 26, 2021	$0.1375
March 24, 2021	March 31, 2021	$0.1375
April 23, 2021	April 30, 2021	$0.1375
May 24, 2021	May 31, 2021	$0.1375
June 23, 2021	June 30, 2021	$0.1375
July 23, 2021	July 30, 2021	$0.1375

About OFS Credit Company, Inc.

OFS Credit is a non-diversified, externally managed closed-end management investment company. The Company’s investment objective is to generate current income, with a secondary objective to generate capital appreciation primarily through investment in CLO equity and debt securities. The Company's investment activities are managed by OFS Capital Management, LLC, an investment adviser registered under the Investment Advisers Act of 1940¹, as amended, and headquartered in Chicago, Illinois with additional offices in New York and Los Angeles.

Forward-Looking Statements

Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to: management’s beliefs that the cash and stock distribution will allow the Company to strengthen its balance sheet and to be in position to capitalize on potential future investment opportunities, when there can be no assurance either will occur; the Company's commitment to strong, long-term performance and the alignment of that performance to the ownership of the Company's common stock by affiliated parties; the tax consequences of the distributions to stockholders; and other factors may constitute forward-looking statements. Forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “could,” “could increase the likelihood,” “estimate,” “expect,” “intend,” “is planned,” “may,” “should,” “will,” “will enable,” “would be expected,” “look forward,” “may provide,” “would” or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in documents that may be filed by OFS Credit from time to time with the Securities and Exchange Commission, as well as the impact of the global COVID-19 pandemic and significant market volatility on our business, our portfolio companies, our industry and the global economy. As a result of such risks, uncertainties and factors, actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. OFS Credit is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

¹ Registration does not imply a certain level of skill or training.

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FAQ

What is the recent distribution declared by OFS Credit Company (OCCI)?

OFS Credit Company has declared a quarterly distribution of $0.53 per share.

When will OFS Credit's distribution be paid out to stockholders?

The distribution will be paid on April 30, 2021.

How does the distribution option work for OFS Credit stockholders?

Stockholders can elect to receive their distribution in cash or shares, with 80% typically paid in shares.

What are the distribution details for OFS Credit's preferred stocks?

The Company declared $0.1432292 for Series A and $0.1375 for Series B Term Preferred Stocks.

Is the distribution from OFS Credit Company taxable?

Yes, the entire amount of the distribution is expected to be fully taxable to stockholders.