Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended March 31, 2024 and Declaration of Distributions on Common Stock for the Months Ending July 31, August 31, and September 30, 2024
Oxford Square Capital Corp. announced its financial results for Q1 2024, including a NAV per share of $2.42, NII of $6.5 million, total investment income of $10.7 million, and expenses of $4.1 million. The company issued common stock, resulting in net proceeds of $923,000. As of March 31, 2024, the company had 6 debt investments on non-accrual status. The company will hold a conference call on May 2nd to discuss results.
NAV per share of $2.42 for Q1 2024.
NII of $6.5 million for the quarter.
Total investment income of $10.7 million.
Issuance of common stock resulting in net proceeds of $923,000.
Net asset decrease of $1.8 million due to net realized losses and depreciation.
Debt investments on non-accrual status with a combined fair value of $2.0 million.
Insights
Oxford Square Capital Corp.'s recent financial update indicates a notable quarter-over-quarter decrease in net investment income (NII) and a drop in net asset value (NAV) per share. The reduction in total investment income alongside an increase in net realized losses reflects a challenging operational landscape.
A critical observation is the increase in the weighted average yield of debt investments, which may suggest a strategic shift towards higher-yielding, potentially riskier assets. Conversely, a decrease in the weighted average cash distribution yield on CLO equity investments could imply a reduction in cash earnings potential from these assets, a point of concern for income-focused investors.
The disclosed net decrease in net assets resulting from operations, driven by realized losses, holds importance for investors, as it could impact the company's ability to sustain distributions. The company's utilization of an 'at-the-market' offering to issue shares, resulting in nominal net proceeds, should be scrutinized for its potential dilutive effect on shareholder value.
Examining Oxford Square Capital's performance metrics, the differences in the company's weighted average credit ratings based on fair value versus principal amount could be indicative of underlying portfolio asset quality shifting or valuation adjustments, which bear watching for possible implications on portfolio stability.
The presence of non-accrual investments, both debt and preferred equity, signifies areas of non-performance within the portfolio that may require strategic management or could forecast further write-downs. Additionally, the trend of expenses decreasing is a favorable indicator of cost management, but should be viewed in the context of the revenue decline to assess operational efficiency comprehensively.
GREENWICH, Conn., May 02, 2024 (GLOBE NEWSWIRE) -- Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQZ) (NasdaqGS: OXSQG) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended March 31, 2024.
- On April 25, 2024, our Board of Directors declared the following distributions on our common stock:
| Month Ending | Record Date | Payment Date | Amount Per Share |
| July 31, 2024 | July 17, 2024 | July 31, 2024 | |
| August 31, 2024 | August 16, 2024 | August 30, 2024 | |
| September 30, 2024 | September 16, 2024 | September 30, 2024 | |
- Net asset value (“NAV”) per share as of March 31, 2024 stood at
$2.42 , compared with a NAV per share on December 31, 2023 of$2.55 . - Net investment income (“NII”) was approximately
$6.5 million , or$0.11 per share, for the quarter ended March 31, 2024, compared with approximately$7.8 million , or$0.13 per share, for the quarter ended December 31, 2023. - Total investment income for the quarter ended March 31, 2024 amounted to approximately
$10.7 million , compared with approximately$12.3 million for the quarter ended December 31, 2023.- For the quarter ended March 31, 2024 we recorded investment income from our portfolio as follows:
$6.4 million from our debt investments;$3.9 million from our CLO equity investments; and$324,000 from other income.
- For the quarter ended March 31, 2024 we recorded investment income from our portfolio as follows:
- Our total expenses for the quarter ended March 31, 2024 were approximately
$4.1 million , compared with total expenses of approximately$4.6 million for the quarter ended December 31, 2023. - As of March 31, 2024, the following metrics applied (note that none of these metrics represented a total return to shareholders):
- The weighted average yield of our debt investments was
13.9% at current cost, compared with13.3% as of December 31, 2023; - The weighted average effective yield of our CLO equity investments at current cost was
9.5% , compared with9.5% as of December 31, 2023; and - The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was
13.7% , compared with16.3% as of December 31, 2023.
- The weighted average yield of our debt investments was
- For the quarter ended March 31, 2024, we recorded a net decrease in net assets resulting from operations of approximately
$1.8 million , consisting of:- NII of approximately
$6.5 million ; - Net realized losses of approximately
$8.1 million ; and - Net unrealized depreciation of approximately
$211,000.
- NII of approximately
- During the first quarter of 2024, we made investments of approximately
$12.1 million and received approximately$19.3 million from sales and repayments of investments. - Our weighted average credit rating was 2.3 based on total fair value and 2.9 based on total principal amount as of March 31, 2024, compared with a weighted average credit rating of 2.3 based on total fair value and 2.7 based on total principal amount as of December 31, 2023.
- As of March 31, 2024, we had six debt investments in three portfolio companies on non-accrual status, with a combined fair value of approximately
$2.0 million . Also, as of March 31, 2024, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had an aggregate fair value of approximately$4.9 million . - For the quarter ended March 31, 2024, we issued a total of approximately 324,000 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
$923,000. As of March 31, 2024, we had approximately 59.7 million shares of common stock outstanding.
We will hold a conference call to discuss first quarter results today, Thursday, May 2nd, 2024 at 9:00 AM ET. The toll-free dial-in number is 1-800-445-7795, verbal access code OXFORD. There will be a recording available for 30 days. If you are interested in hearing the recording, please dial 1-877-693-4280. The replay verbal passcode is OXFORD.
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.
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2024 | December 31, 2023 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Non-affiliated/non-control investments (cost: | $ | 245,936,071 | $ | 261,614,335 | ||||
| Affiliated investments (cost: | 4,919,975 | 5,276,092 | ||||||
| Cash and cash equivalents | 20,906,690 | 5,740,553 | ||||||
| Interest and distributions receivable | 2,615,160 | 3,976,408 | ||||||
| Other assets | 910,124 | 1,060,384 | ||||||
| Total assets | $ | 275,288,020 | $ | 277,667,772 | ||||
| LIABILITIES | ||||||||
| Notes payable – | $ | 44,305,271 | $ | 44,247,141 | ||||
| Notes payable – | 78,827,903 | 78,731,781 | ||||||
| Securities purchased not settled | 3,997,500 | — | ||||||
| Base Fee and Net Investment Income Incentive Fee payable to affiliate | 987,816 | 1,012,389 | ||||||
| Accrued interest payable | 1,204,487 | 1,204,487 | ||||||
| Accrued expenses | 1,552,652 | 1,163,349 | ||||||
| Distributions payable | 72,568 | — | ||||||
| Total liabilities | 130,948,197 | 126,359,147 | ||||||
| COMMITMENTS AND CONTINGENCIES (Note 13) | ||||||||
| NET ASSETS | ||||||||
| Common stock, | 596,723 | 593,005 | ||||||
| Capital in excess of par value | 459,180,359 | 458,121,381 | ||||||
| Total distributable earnings/(accumulated losses) | (315,437,259 | ) | (307,405,761 | ) | ||||
| Total net assets | 144,339,823 | 151,308,625 | ||||||
| Total liabilities and net assets | $ | 275,288,020 | $ | 277,667,772 | ||||
| Net asset value per common share | $ | 2.42 | $ | 2.55 | ||||
OXFORD SQUARE CAPITAL CORP.
STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||||
| INVESTMENT INCOME | ||||||||
| From non-affiliated/non-control investments: | ||||||||
| Interest income – debt investments | $ | 6,421,047 | $ | 8,294,160 | ||||
| Income from securitization vehicles and investments | 3,932,374 | 4,379,495 | ||||||
| Other income | 324,003 | 268,143 | ||||||
| Total investment income from non-affiliated/non-control investments | 10,677,424 | 12,941,798 | ||||||
| Total investment income | 10,677,424 | 12,941,798 | ||||||
| EXPENSES | ||||||||
| Interest expense | 1,960,982 | 3,085,366 | ||||||
| Base Fee | 987,816 | 1,159,646 | ||||||
| Professional fees | 311,747 | 335,880 | ||||||
| Compensation expense | 206,898 | 266,965 | ||||||
| General and administrative | 346,625 | 373,173 | ||||||
| Total expenses before incentive fees | 3,814,068 | 5,221,030 | ||||||
| Net Investment Income Incentive Fees | — | 1,229,984 | ||||||
| Capital gains incentive fees | — | — | ||||||
| Total incentive fees | — | 1,229,984 | ||||||
| Total expenses | 3,814,068 | 6,451,014 | ||||||
| Net investment income before taxes | 6,863,356 | 6,490,784 | ||||||
| Excise tax | 325,800 | — | ||||||
| Net investment income after taxes | 6,537,556 | 6,490,784 | ||||||
| NET UNREALIZED APPRECIATION/(DEPRECIATION) AND REALIZED GAINS/(LOSSES) ON INVESTMENT TRANSACTIONS | ||||||||
| Net change in unrealized appreciation/(depreciation) on investments: | ||||||||
| Non-Affiliate/non-control investments | 145,111 | (942,790 | ) | |||||
| Affiliated investments | (356,117 | ) | 720,489 | |||||
| Total net change in unrealized depreciation on investments | (211,006 | ) | (222,301 | ) | ||||
| Net realized losses: | ||||||||
| Non-affiliated/non-control investments | (8,094,940 | ) | — | |||||
| Total net realized losses | (8,094,940 | ) | — | |||||
| Net (decrease)/increase in net assets resulting from operations | $ | (1,768,390 | ) | $ | 6,268,483 | |||
| Net increase in net assets resulting from net investment income per common share (Basic and Diluted): | $ | 0.11 | $ | 0.13 | ||||
| Net (decrease)/increase in net assets resulting from operations per common share (Basic and Diluted): | $ | (0.03 | ) | $ | 0.13 | |||
| Weighted average shares of common stock outstanding (Basic and Diluted): | 59,639,285 | 49,858,366 | ||||||
| Distributions per share | $ | 0.105 | $ | 0.105 | ||||
FINANCIAL HIGHLIGHTS
| Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | ||||||||
| Per Share Data | |||||||||
| Net asset value at beginning of period | $ | 2.55 | $ | 2.78 | |||||
| Net investment income(1) | 0.11 | 0.13 | |||||||
| Net realized and unrealized (losses)/gains(2) | (0.13 | ) | (0.00 | ) | |||||
| Net (decrease)/increase in net asset value from operations | (0.02 | 0.13 | ) | ||||||
| Distributions per share from net investment income | (0.11 | ) | (0.11 | ) | |||||
| Tax return of capital distributions(3) | — | — | |||||||
| Total distributions | (0.11 | ) | (0.11 | ) | |||||
| Effect of shares issued/repurchased, gross | — | — | |||||||
| Net asset value at end of period | $ | 2.42 | $ | 2.80 | |||||
| Per share market value at beginning of period | $ | 2.86 | $ | 3.12 | |||||
| Per share market value at end of period | $ | 3.17 | $ | 3.16 | |||||
| Total return based on Market Value(4) | 14.63 | % | 4.42 | % | |||||
| Total return based on Net Asset Value(5) | (0.98 | )% | 4.50 | % | |||||
| Shares outstanding at end of period | 59,672,337 | 49,885,954 | |||||||
| Ratios/Supplemental Data(8) | |||||||||
| Net assets at end of period (000’s) | $ | 144,340 | $ | 139,839 | |||||
| Average net assets (000’s) | $ | 148,260 | $ | 139,235 | |||||
| Ratio of expenses to average net assets(6) | 11.17 | % | 18.53 | % | |||||
| Ratio of net investment income to average net assets(6) | 17.64 | % | 18.65 | % | |||||
| Portfolio turnover rate(7) | 3.09 | % | 0.10 | % | |||||
| ____________ | |||||||||
| (1) | Represents per share net investment income for the period, based upon weighted average shares outstanding. |
| (2) | Net realized and unrealized gains/(losses) 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. The amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. tax reporting purposes. |
| (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 and includes excise tax. |
| (7) | Portfolio turnover rate is calculated using the lesser of the year-to-date investment sales and debt repayments or year-to-date 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 months ended March 31, 2024 and 2023: |
| Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||
| Ratio of expenses to average net assets: | ||||||
| Operating expenses, including excise tax, before incentive fees | 11.17 | % | 15.00 | % | ||
| Net investment income incentive fees | — | % | 3.53 | % | ||
| Ratio of expenses, including excise tax and excluding interest expense, to average net assets | 5.88 | % | 9.67 | % | ||
About Oxford Square Capital Corp.
Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and, to a lesser extent, 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. 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 is Oxford Square Capital Corp.'s NAV per share for Q1 2024?
What was the net investment income (NII) for Oxford Square Capital Corp. in Q1 2024?
How many debt investments were on non-accrual status as of March 31, 2024, for Oxford Square Capital Corp.?
When will Oxford Square Capital Corp. hold a conference call to discuss first quarter results?
