OFS Credit Company Provides February 2024 Net Asset Value Update

Rhea-AI Summary

OFS Credit Company, Inc. (OCCI) provided an estimate of its net asset value (NAV) per share for February 29, 2024, ranging between $7.48 and $7.58. The company highlighted potential impacts on its financial condition due to various global events and economic factors.

Insights

Financial Analyst

The estimated NAV per share provided by OFS Credit Company offers a snapshot of the company's financial position as of a specific date. It is important to note that this is an unaudited estimate and may not fully capture the financial health of the company. Investors should be aware that the final audited NAV could be materially different.

When considering the impact of external factors such as interest and inflation rates, geopolitical tensions and banking system instability, it becomes clear that the valuation of CLO equity and debt securities could be volatile. These securities are sensitive to changes in market conditions and any adverse developments could affect the company's investment income and underlying asset values.

Investors should also consider the broader implications of a potential recession or government shutdown, as these could lead to increased market volatility and impact the performance of financial instruments like CLOs. The company's mention of these risks suggests a cautious outlook on future financial conditions.

Risk Management Expert

From a risk management perspective, the company's disclosure highlights several key areas of concern that could affect its portfolio. Elevated interest rates typically increase the cost of borrowing, which can affect the performance of loan obligations. Similarly, inflation can erode the real returns on investments.

The mention of geopolitical conflicts and their potential to impact financial markets is a reminder of the interconnectedness of global finance. Such events can lead to credit downgrades or defaults within the CLO space, which would directly impact OFS Credit's portfolio.

Additionally, the instability in the banking system and the risk of recession are factors that could lead to tighter credit conditions and reduced liquidity. This could affect the company's ability to manage its portfolio effectively and could lead to a revaluation of its assets.

Market Research Analyst

For investors, the long-term trends in the CLO market are just as important as the current NAV estimate. While the immediate estimate provides a near-term valuation reference, the potential for adverse impacts from various macroeconomic and geopolitical risks must be factored into any investment decision.

Investors should consider the historical performance of CLOs during similar periods of economic stress. Past performance can offer insights into how these securities might behave under current market conditions. It's also essential to monitor the actions of central banks and governments as their policies could have significant implications for interest rates and inflation, which in turn affect the CLO market.

In the context of the ongoing conflicts and potential economic downturns mentioned by OFS Credit, investors would do well to keep a close eye on the company's portfolio management strategies and how they might adapt to a rapidly changing economic landscape.

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 the following net asset value (“NAV”) estimate as of February 29, 2024.

• Management’s unaudited estimate of the range of our NAV per share of our common stock as of February 29, 2024 is between $7.48 and $7.58. This estimate is not a comprehensive statement of our financial condition or results for the month ended February 29, 2024. This estimate did not undergo the Company’s typical quarter-end financial closing procedures. We advise you that current estimates of our NAV per share may differ materially from future NAV estimates or determinations, including the determination for the period ending April 30, 2024, which will be reported in our Semi-Annual Report on Form N-CSR.

Our financial condition, including the fair value of our portfolio investments, and results of operations may be materially impacted after February 29, 2024 by circumstances and events that are not yet known. To the extent our portfolio investments are adversely impacted by 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, the risk of recession or a shutdown of U.S. government services and related market volatility, or by other factors, we may experience a material adverse impact on our future net investment income, the underlying value of our investments, our financial condition and the financial condition of our portfolio investments.

The preliminary financial data included in this press release has been prepared by, and is the responsibility of, OFS Credit’s management. KPMG LLP has not audited, reviewed, compiled, or applied agreed-upon procedures with respect to the preliminary financial data. Accordingly, KPMG LLP does not express an opinion or any other form of assurance with respect thereto.

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 debt and subordinated 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 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 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, 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

View source version on businesswire.com: https://www.businesswire.com/news/home/20240315209427/en/

INVESTOR RELATIONS:

OFS Credit Company, Inc.

Steve Altebrando, 646-652-8473

investorrelations@ofscreditcompany.com

MEDIA RELATIONS:

Bill Mendel

212-397-1030

bill@mendelcommunications.com

Source: OFS Credit Company, Inc.

FAQ

What is the net asset value (NAV) estimate per share for OFS Credit Company, Inc. (OCCI) as of February 29, 2024?

The estimated range of NAV per share for OFS Credit Company, Inc. (OCCI) as of February 29, 2024, is between $7.48 and $7.58.

What factors could impact the financial condition of OFS Credit Company, Inc. (OCCI) after February 29, 2024?

Factors such as elevated interest and inflation rates, the war between Russia and Ukraine, armed conflict in the Middle East, banking system instability, risk of recession, U.S. government shutdown, and market volatility could impact the financial condition of OFS Credit Company, Inc. (OCCI) after February 29, 2024.

Who prepared the preliminary financial data mentioned in the press release for OFS Credit Company, Inc. (OCCI)?

The preliminary financial data included in the press release was prepared by OFS Credit Company, Inc.'s (OCCI) management. KPMG LLP has not audited, reviewed, compiled, or applied agreed-upon procedures with respect to the preliminary financial data.

What will be reported in OFS Credit Company, Inc.'s (OCCI) Semi-Annual Report on Form N-CSR for the period ending April 30, 2024?

The determination of NAV estimates for the period ending April 30, 2024, will be reported in OFS Credit Company, Inc.'s (OCCI) Semi-Annual Report on Form N-CSR.

How may future NAV estimates differ from the current NAV estimate provided by OFS Credit Company, Inc. (OCCI)?

Future NAV estimates may differ materially from the current estimate due to various circumstances and events that are not yet known, as highlighted by OFS Credit Company, Inc. (OCCI).