OFS Credit Company Increases Monthly Common Stock Distributions

Rhea-AI Summary

OFS Credit Company (NASDAQ: OCCI) has announced significant changes to its distribution policy. The company's board of directors has increased monthly cash distributions for common stockholders by 9.5%, from $0.105 to $0.115 per share for the quarter ending October 31, 2024. This increase applies to August, September, and October 2024 distributions.

Additionally, OFS Credit has declared monthly cash distributions for its preferred stock series through January 31, 2025. The 6.125% Series C, 6.00% Series D, and 5.25% Series E Term Preferred Stocks will receive their respective monthly distributions as scheduled.

The company also highlighted its Dividend Reinvestment Plan (DRIP), which offers common stockholders the opportunity to receive distributions in shares at a 5% discount to the market price on the valuation date.

Positive

• Increased monthly cash distributions for common stockholders by 9.5% to $0.115 per share
• Declared monthly cash distributions for preferred stock series through January 31, 2025
• Dividend Reinvestment Plan (DRIP) offers a 5% discount to market price for common stockholders

Negative

• None.

Insights

Financial Analyst

OFS Credit Company's announcement of increased monthly common stock distributions and declared preferred stock distributions through January 2025 is a significant development for investors. The 9.5% increase in common stock distributions from $0.105 to $0.115 per share is particularly noteworthy.

This increase suggests strong confidence in the company's financial health and ability to generate consistent cash flows. For income-focused investors, this boost in distributions is likely to be well-received, potentially making OCCI a more attractive investment option in the CLO equity and debt securities space.

The company's Dividend Reinvestment Plan (DRIP) offering a 5% discount to market price is an interesting feature. This can be an effective way for the company to retain capital while providing shareholders with an opportunity to compound their investment at a favorable rate.

However, it's important to consider the sustainability of these increased distributions. CLO investments can be volatile and the company's ability to maintain these higher payouts will depend on the performance of its underlying portfolio. Investors should closely monitor the company's earnings reports and portfolio quality to ensure the distributions remain well-covered.

The declaration of preferred stock distributions through January 2025 provides clarity and stability for preferred shareholders. This long-term commitment to distributions may appeal to investors seeking predictable income streams.

Overall, while the increased distributions are positive news, investors should balance this against the inherent risks in CLO investments and the broader economic environment affecting credit markets.

Investment Strategist

The decision by OFS Credit Company to increase its monthly common stock distributions by 9.5% is a bold move that warrants careful analysis. This substantial hike in distributions could be interpreted as a strong signal of management's confidence in the company's future cash flows and overall financial health.

However, it's important to contextualize this within the broader market environment. CLO equity and debt securities, which form the core of OCCI's investment strategy, are complex instruments that can be particularly sensitive to changes in credit markets and interest rates. The current economic landscape, characterized by rising interest rates and concerns about credit quality, could potentially impact the performance of these securities.

The company's DRIP program, offering shares at 95% of market price, is an intriguing feature. This can be an effective tool for capital retention and shareholder value creation, potentially allowing for reinvestment at attractive valuations. However, investors should be aware that this could also lead to dilution if not managed carefully.

The declaration of preferred stock distributions through January 2025 provides a clear roadmap for income expectations for these securities. This long-term commitment might be particularly appealing in an environment where yield is at a premium.

Investors should carefully consider the risk-reward profile of OCCI. While the increased distributions are attractive, they should be weighed against the company's ability to sustain them in various market conditions. It would be prudent to closely monitor the company's net asset value (NAV), distribution coverage ratios and the performance of its underlying CLO investments in the coming quarters.

In conclusion, while the increased distributions are a positive development, investors should approach this opportunity with a balanced perspective, considering both the potential rewards and the inherent risks in the CLO market.

Preferred Stock Distributions Declared Through January 31, 2025

CHICAGO--(BUSINESS WIRE)-- OFS Credit Company, Inc. (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 (the “Board”) declared monthly cash distributions of $0.115 per common share, a 9.5% increase from the prior monthly distribution amount of $0.105 per common share, for common stockholders for each of the three months in the quarter ending October 31, 2024. The Board has also declared monthly cash distributions for the Company’s 6.125% Series C Term Preferred Stock, 6.00% Series D Term Preferred Stock and 5.25% Series E Term Preferred Stock through January 31, 2025.

Common Stock Distributions

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

Month	Record Date	Payment Date	Cash Distribution Per Share
August 2024	August 20, 2024	August 30, 2024	$0.115
September 2024	September 20, 2024	September 30, 2024	$0.115
October 2024	October 21, 2024	October 31, 2024	$0.115

Dividend Reinvestment Plan (“DRIP”) – DRIP Shares Issued at 95% of Market Price

Our DRIP offers our common stockholders the right to receive a 5% discount to the market price on the valuation date (i.e., the payment date). Our DRIP is structured to allow our common stockholders to receive their distribution in shares based on 95% of the market price per share of common stock at the close of regular trading on The Nasdaq Capital Market on the valuation date fixed by the Board for such distribution.

Common stockholders that are interested in participating in our DRIP should contact their broker or financial intermediary.

Additional information about our DRIP and how to participate can be found at https://ir.ofscreditcompany.com/shareholder-services/dividend-reinvestment-plan. We make our website content available for informational purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this press release.

Preferred Stock Distributions

The following schedule applies to the 6.125% Series C Term Preferred Stock distributions for preferred stockholders of record on the close of business of each specific record date:

Month	Record Date	Payment Date	Cash Distribution Per Share
August 2024	August 20, 2024	August 30, 2024	$0.1276042
September 2024	September 20, 2024	September 30, 2024	$0.1276042
October 2024	October 21, 2024	October 31, 2024	$0.1276042
November 2024	November 19, 2024	November 29, 2024	$0.1276042
December 2024	December 20, 2024	December 31, 2024	$0.1276042
January 2025	January 21, 2025	January 31, 2025	$0.1276042

The following schedule applies to the 6.00% Series D Term Preferred Stock distributions for preferred stockholders of record on the close of business of each specific record date:

Month	Record Date	Payment Date	Cash Distribution Per Share
August 2024	August 20, 2024	August 30, 2024	$0.125
September 2024	September 20, 2024	September 30, 2024	$0.125
October 2024	October 21, 2024	October 31, 2024	$0.125
November 2024	November 19, 2024	November 29, 2024	$0.125
December 2024	December 20, 2024	December 31, 2024	$0.125
January 2025	January 21, 2025	January 31, 2025	$0.125

The following schedule applies to the 5.25% Series E Term Preferred Stock distributions for preferred stockholders of record on the close of business of each specific record date:

Month	Record Date	Payment Date	Cash Distribution Per Share
August 2024	August 20, 2024	August 30, 2024	$0.109375
September 2024	September 20, 2024	September 30, 2024	$0.109375
October 2024	October 21, 2024	October 31, 2024	$0.109375
November 2024	November 19, 2024	November 29, 2024	$0.109375
December 2024	December 20, 2024	December 31, 2024	$0.109375
January 2025	January 21, 2025	January 31, 2025	$0.109375

About OFS Credit Company, Inc.

OFS Credit is a non-diversified, externally managed closed-end management investment company. The Company’s primary investment objective is to generate current income, with a secondary objective to generate capital appreciation, which we seek to achieve 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 with additional offices in New York and Los Angeles.

Forward-Looking Statements

Statements in this press release may constitute “forward-looking statements” regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects. 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 elevated interest and inflation rates, the ongoing war between Russia and Ukraine, the escalated armed conflict in the Middle East, instability in the U.S. and international banking systems, uncertainties related to the 2024 U.S. presidential election and the risk of recession or a shutdown of U.S. government services and related 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.

OFS® and OFS Credit® are registered trademarks of Orchard First Source Asset Management, LLC.

OFS Capital Management™ is a trademark of Orchard First Source Asset Management, LLC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240802051147/en/

INVESTOR RELATIONS:

Steve Altebrando

847-734-2085

investorrelations@ofscreditcompany.com

MEDIA RELATIONS:

Bill Mendel

212-397-1030

bill@mendelcommunications.com

Source: OFS Credit Company, Inc.

FAQ

What is the new monthly distribution amount for OFS Credit Company (OCCI) common stock?

OFS Credit Company (OCCI) has increased its monthly cash distribution for common stockholders to $0.115 per share, effective for the quarter ending October 31, 2024.

How much has OFS Credit Company (OCCI) increased its common stock distribution?

OFS Credit Company (OCCI) has increased its monthly cash distribution for common stockholders by 9.5%, from $0.105 to $0.115 per share.

When will OFS Credit Company (OCCI) pay the increased common stock distributions?

OFS Credit Company (OCCI) will pay the increased common stock distributions of $0.115 per share on August 30, 2024, September 30, 2024, and October 31, 2024.

What discount does OFS Credit Company's (OCCI) Dividend Reinvestment Plan (DRIP) offer?

OFS Credit Company's (OCCI) Dividend Reinvestment Plan (DRIP) offers common stockholders a 5% discount to the market price on the valuation date for receiving distributions in shares.