Oxford Lane Capital Corp. Announces Net Asset Value and Selected Financial Results for the First Fiscal Quarter and Declaration of Distributions on Common Stock for the Months Ending October 31, November 30, and December 31, 2020

Rhea-AI Summary

Oxford Lane Capital Corp. (OXLCO) reported financial results for the quarter ended June 30, 2020. Net investment income (NII) was approximately $17.6 million, or $0.23 per share, with total investment income at $29.7 million. The net asset value (NAV) per share decreased to $3.23 from $3.58 as of March 31, 2020. The company declared monthly dividends of $0.0675 per share for October, November, and December 2020. It also announced a share repurchase of approximately $26.7 million, and investment activity included $21.4 million in CLO investments, reflecting ongoing market volatility due to COVID-19.

Positive

• Monthly dividends of $0.0675 per share declared for October, November, and December 2020.
• Net asset value (NAV) per share is $3.23.
• Net investment income (NII) of $17.6 million for the quarter.

Negative

• Decrease in NAV per share from $3.58 to $3.23.
• Total investment income decreased by $4.2 million from the previous quarter.
• Realized losses of approximately $27.3 million recorded during the quarter.

GREENWICH, Conn., July 31, 2020 (GLOBE NEWSWIRE) -- Oxford Lane Capital Corp. (NasdaqGS: OXLC) (NasdaqGS: OXLCO) (NasdaqGS: OXLCM) (NasdaqGS: OXLCP) (“Oxford Lane,” the “Company,” “we,” “us” or “our”) announced today the following financial results and related information: 

• On July 30, 2020, our Board of Directors declared the following distributions on our common stock:
  

Month Ending	Record Date	Payment Date	Amount Per Share
October 31, 2020	October 16, 2020	October 30, 2020	$0.0675
November 30, 2020	November 13, 2020	November 30, 2020	$0.0675
December 31, 2020	December 16, 2020	December 31, 2020	$0.0675

• During the quarter ended June 30, 2020, the U.S. loan market strengthened versus the quarter ended March 31, 2020. U.S. loan prices, as defined by the S&P / LSTA Leveraged Loan Index, increased from 82.9% of par value as of March 31, 2020 to a quarterly high of 91.2% of par value on June 10, 2020, before declining to 89.9% of par value on June 30, 2020. We believe that the COVID-19 pandemic represents an extraordinary circumstance that materially impacts the fair value of the Company’s investments. As a result, the fair value of the Company’s portfolio investments and the prospects for the Company’s distributions may be impacted after June 30, 2020 by circumstances and events that are not yet known.
   
• Net asset value (“NAV”) per share as of June 30, 2020 stood at $3.23, compared with a NAV per share on March 31, 2020 of $3.58.
   
• Net investment income (“NII”), calculated in accordance with generally accepted accounting principles (“GAAP”), was approximately $17.6 million, or $0.23 per share, for the quarter ended June 30, 2020.
   
• Our core net investment income (“Core NII”) was approximately $17.7 million, or $0.23 per share, for the quarter ended June 30, 2020.
   
  • Core NII represents NII adjusted for additional applicable cash distributions received, or entitled to be received (if any, in either case), on our collateralized loan obligation (“CLO”) equity investments. See additional information under “Supplemental Information Regarding Core Net Investment Income” below.
    
    
  • We emphasize that our taxable income may materially differ from our GAAP NII and/or our Core NII, and that neither GAAP NII nor Core NII should be relied upon as indicators of our taxable income.
    
    
• Total investment income for the first fiscal quarter amounted to approximately $29.7 million, which represented a decrease of approximately $4.2 million from the quarter ended March 31, 2020.
  
  
  • For the quarter ended June 30, 2020 we recorded investment income from our portfolio as follows:
    
    
    • $27.7 million from our CLO equity investments, and
      
      
    • $2.0 million from our CLO debt investments and other income.
      
      
• As of June 30, 2020, the following metrics applied (note that none of these metrics represented a total return to shareholders):
   
  • The weighted average yield of our CLO debt investments at current cost was 11.7%, compared with 11.6% as of March 31, 2020.
     
  • The weighted average effective yield of our CLO equity investments at current cost was 13.4%, compared with 15.5% as of March 31, 2020.
     
  • The weighted average cash distribution yield of our CLO equity investments at current cost was 14.0%, compared with 20.0% as of March 31, 2020. 
     
• For the quarter ended June 30, 2020 we recorded a net increase in net assets resulting from operations of approximately $1.9 million, or $0.02 per share, comprised of:
   
  • Net investment income of approximately $17.6 million;
     
  • Net realized losses of approximately $27.3 million; and
     
  • Net unrealized appreciation of approximately $11.6 million. 
     
• During the quarter ended June 30, 2020 we made additional CLO investments of approximately $21.4 million, and received approximately $49.7 million from sales and repayments of our CLO investments.
   
• We note that as of June 30, 2020, we held no investments in warehouse facilities.
   
• For the quarter ended June 30, 2020, we issued a total of approximately 7.2 million shares of common stock pursuant to an “at-the-market” offering. After deducting the sales agent’s commissions and offering expenses, this resulted in net proceeds of approximately $26.7 million. As of June 30, 2020, we had approximately 83.4 million shares of common stock outstanding.
   
• On May 21, 2020, we announced that the Company’s Board of Directors authorized a program for the purpose of repurchasing up to $40 million worth of the outstanding shares of the Company's 7.50% Series 2023 Term Preferred Stock, 6.75% Series 2024 Term Preferred Stock and 6.25% Series 2027 Term Preferred Stock.  For the quarter ended June 30, 2020, we repurchased:
   
  • approximately 135,000 shares of 7.50% Series 2023 Term Preferred Stock for a total of approximately $3.2 million;
  • approximately 4,000 shares of 6.75% Series 2024 Term Preferred Stock for a total of approximately $0.1 million; and
  • approximately 139,000 shares of 6.25% Series 2027 Term Preferred Stock, for a total of approximately $3.1 million. 

On July 30, 2020, our Board of Directors declared the required monthly dividends on our Series 2023 Term Preferred Shares, Series 2024 Term Preferred Shares and Series 2027 Term Preferred Shares (each, a “Share”) as follows:

Preferred  Shares Type	Per Share Dividend Amount Declared		Record Dates	Payment Dates
Series 2023	$	0.15625000	September 16, October 16, November 13	September 30, October 30, November 30
Series 2024	$	0.14062500	September 16, October 16, November 13	September 30, October 30, November 30
Series 2027	$	0.13020833	September 16, October 16, November 13	September 30, October 30, November 30

In accordance with their terms, each of the Series 2023 Term Preferred Shares, Series 2024 Term Preferred Shares and Series 2027 Term Preferred Shares will pay a monthly dividend at a fixed rate of 7.50%, 6.75% and 6.25%, respectively, of the $25.00 per share liquidation preference, or $1.875, $1.6875 and $1.5625 per share per year, respectively. This fixed annual dividend rate is subject to adjustment under certain circumstances, but will not, in any case, be lower than 7.50%, 6.75% and 6.25% per year, respectively, for each of the Series 2023 Term Preferred Shares, Series 2024 Term Preferred Shares and Series 2027 Term Preferred Shares.

Supplemental Information Regarding Core Net Investment Income 

We provide information relating to Core NII (a non-GAAP measure) on a supplemental basis. This measure is not provided as a substitute for GAAP NII, but in addition to it. Our non-GAAP measures may differ from similar measures by other companies, even in the event of similar terms being utilized to identify such measures. Core NII represents GAAP NII adjusted for additional applicable cash distributions received, or entitled to be received (if any, in either case), on our CLO equity investments. OXLC’s management uses this information in its internal analysis of results and believes that this information may be informative in gauging the quality of OXLC’s financial performance, identifying trends in its results and providing meaningful period-to-period comparisons.

Income from investments in the “equity” class securities of CLO vehicles, for GAAP purposes, is recorded using the effective interest method; this is based on an effective yield to the expected redemption utilizing estimated cash flows, at current cost, including those CLO equity investments that have not made their inaugural distribution for the relevant period end. The result is an effective yield for the investment in which the difference between the actual cash received, or distributions entitled to be received, and the effective yield calculation is adjusted to the cost. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from the cash distributions actually received by the Company during the period (referred to below as “CLO equity adjustments”). 

Furthermore, in order for the Company to continue qualifying as a regulated investment company (“RIC”) for tax purposes, we are required, among other things, to distribute at least 90% of our investment company taxable income annually. Therefore, Core NII may provide a better indication of our estimated taxable income for a reporting period than GAAP NII; we can offer no assurance that will be the case, however, as the ultimate tax character of our earnings cannot be determined until after tax returns are prepared at the close of a fiscal year. We note that this non-GAAP measure may not serve as a useful indicator of taxable earnings, particularly during periods of market disruption and volatility, and, as such, our taxable income may differ materially from our Core NII.    

The following table provides a reconciliation of GAAP NII to Core NII for the three months ended June 30, 2020:

	Three Months Ended
	June 30, 2020
	Amount			Per Share
				Amount
GAAP Net investment income	$	17,630,266		$	0.23
CLO equity adjustments	$	83,678			0.00
Core Net investment income	$	17,713,944		$	0.23

We will host a conference call to discuss our fourth fiscal quarter results today, Friday, July 31, 2020 at 9:00 AM ET. Please call 1-844-792-3730 to participate. A recording of the conference call will be available for replay for approximately 30 days following the call. The replay number is 1-877-344-7529, and the replay passcode is 10146752.  

A presentation containing additional details regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordlanecapital.com. 

About Oxford Lane Capital Corp. 

Oxford Lane Capital Corp. is a publicly-traded registered closed-end management investment company principally investing in 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. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our portfolio companies, our industry and the global economy.  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 Rubin
203-983-5280

 

FAQ

What are the monthly dividends declared by Oxford Lane Capital Corp. (OXLCO) for October 2020?

Oxford Lane Capital Corp. declared monthly dividends of $0.0675 per share for October 2020.

What was Oxford Lane Capital Corp.'s net investment income for the quarter ended June 30, 2020?

The net investment income for the quarter ended June 30, 2020, was approximately $17.6 million, or $0.23 per share.

How did the net asset value (NAV) of OXLCO change in the last quarter?

The NAV per share decreased from $3.58 as of March 31, 2020, to $3.23 as of June 30, 2020.

What was the total investment income reported by OXLCO for the first fiscal quarter?

Total investment income was approximately $29.7 million for the first fiscal quarter.

What investment actions did Oxford Lane Capital Corp. take during the quarter?

During the quarter ended June 30, 2020, OXLCO made additional CLO investments of approximately $21.4 million.