OFS Capital Corp (OFS) 2025 Q2 法說會逐字稿

Good day, and welcome to the OFS Capital Corporation second-quarter 2025 earnings conference call. (Operator Instructions) Please note this event is being recorded.

大家好，歡迎參加 OFS Capital Corporation 2025 年第二季財報電話會議。（操作員指示）請注意，此事件正在被記錄。

I would now like to hand the call to Steve Altebrando. Please go ahead.

現在我想把電話交給史蒂夫·阿爾特布蘭多。請繼續。

Good morning, everyone, and thank you for joining us. Also, on the call today are Bilal Rashid, our Chairman and Chief Executive Officer; and Kyle Spina, the company's Chief Financial Officer and Treasurer.

大家早安，感謝大家的收看。此外，今天參加電話會議的還有我們的董事長兼執行長比拉爾·拉希德 (Bilal Rashid) 和公司財務長兼財務主管凱爾·斯皮納 (Kyle Spina)。

Before we begin, please note that the statements made on this call and webcast may constitute forward-looking statements as defined under applicable securities laws. Such statements reflect various assumptions, expectations, and opinions by OFS Capital management concerning anticipated results are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from such statements.

在我們開始之前，請注意，本次電話會議和網路廣播中所作的陳述可能構成適用證券法所定義的前瞻性陳述。此類聲明反映了 OFS Capital 管理層對預期結果的各種假設、期望和意見，並不保證未來的業績，並且受已知和未知的風險、不確定性和其他可能導致實際結果與此類聲明存在重大差異的因素的影響。

The uncertainties and other factors are in some way beyond management's control, including the risk factors described from time to time in our filings with the SEC. Although we believe these assumptions are reasonable, any of those assumptions could prove incorrect. And as a result, the forward-looking statements based on those assumptions also could be incorrect.

不確定性和其他因素在某種程度上超出了管理層的控制範圍，包括我們向美國證券交易委員會提交的文件中不時描述的風險因素。儘管我們認為這些假設是合理的，但任何一個假設都可能被證明是錯的。因此，基於這些假設的前瞻性陳述也可能是不正確的。

You should not place undue reliance on these forward-looking statements. OFS Capital undertakes no duty to update any forward-looking statements made herein, and all forward-looking statements speak only as of the date of this call.

您不應過度依賴這些前瞻性陳述。OFS Capital 不承擔更新本文所作任何前瞻性陳述的義務，所有前瞻性陳述僅代表本次電話會議之日的觀點。

With that, I'll turn the call over to Chairman and Chief Executive Officer, Bilal Rashid.

說完這些，我將把電話轉給董事長兼執行長比拉爾·拉希德 (Bilal Rashid)。

Thank you, Steve. Yesterday, we announced our second quarter earnings. Our results were in line with our preliminary earnings announcement on July 15, which we issued in advance of our bond offering. As for the second quarter results, our net investment income was fairly stable at $0.25 per share compared to $0.26 per share in the prior quarter.

謝謝你，史蒂夫。昨天，我們公佈了第二季的收益。我們的業績與我們在 7 月 15 日發行債券前發布的初步獲利公告一致。至於第二季的業績，我們的淨投資收益相當穩定，為每股 0.25 美元，而上一季為每股 0.26 美元。

Our net asset value at June 30 was $10.91 per share compared to $11.97 per share in the prior quarter. This drop in NAV was primarily due to a decline in the value of our equity investments. This includes a decrease of $7.8 million on our equity investment in Pfanstiehl Holdings. Overall, the health of our credit portfolio remained stable with no new nonaccruals.

截至 6 月 30 日，我們的淨資產價值為每股 10.91 美元，而上一季為每股 11.97 美元。資產淨值的下降主要是由於我們的股權投資價值下降。其中包括我們對 Pfanstiehl Holdings 的股權投資減少 780 萬美元。整體而言，我們的信貸組合狀況保持穩定，沒有出現新的不提狀況。

We continue to work on improving our net investment income in the long term by rotating certain noninterest-earning equity positions into interest-earning assets, specifically by continuing to explore potential ways to monetize our minority equity investment in Pfanstiehl. This is our largest position in the portfolio with a fair value of approximately $83 million at quarter end.

我們將繼續致力於透過將某些不生息的股權頭寸轉換為生息資產來提高我們的長期淨投資收益，特別是繼續探索將我們在 Pfanstiehl 的少數股權投資貨幣化的潛在方式。這是我們投資組合中最大的頭寸，季末的公允價值約為 8,300 萬美元。

Fundamentally, we continue to believe in the long-term prospects of this portfolio company. At the same time, we also realize that achieving a near-term exit of this position provide us with an opportunity to improve our net investment income and mitigate concentration risk. However, we understand that achieving this short-term exit may come at the cost of realizing the full fundamental value of the investment. As we have previously discussed on these calls, our investment in Pfanstiehl over the last 11 years has generated approximately $3.9 million in distributions or approximately 18 times our cost, which was only $200,000 in 2014.

從根本上來說，我們仍然相信這家投資組合公司的長期前景。同時，我們也意識到，短期內退出該部位將為我們提高投資淨收益和降低集中風險提供機會。然而，我們明白，要實現這一短期退出可能要以實現投資的全部基本價值為代價。正如我們之前在電話會議上討論過的，過去 11 年裡，我們對 Pfanstiehl 的投資產生了約 390 萬美元的收益，約為我們成本的 18 倍，而 2014 年我們的成本僅為 20 萬美元。

In terms of our view of the economic outlook, there continues to be significant uncertainty surrounding tariffs and US monetary policy and the potential impact this may have on our portfolio companies is unclear. That being said, we remain satisfied with the current overall quality of our portfolio with no new nonaccruals this quarter, as I just mentioned. We believe that we have constructed our loan portfolio to withstand the challenges of this continuing uncertain macroeconomic environment, specifically by avoiding highly cyclical industries and maintaining strong diversification. We remain focused on investing higher in the capital structure with 100% of our loan portfolio in first lien and second lien senior secured loans. As we navigate these uncertain times, we are focused on maintaining a consistent dialogue with our portfolio companies and supporting them with additional capital, if appropriate.

就我們對經濟前景的看法而言，關稅和美國貨幣政策仍然存在很大的不確定性，這對我們投資組合公司可能產生的潛在影響尚不清楚。話雖如此，我們仍然對當前投資組合的整體品質感到滿意，正如我剛才提到的，本季度沒有出現新的不計提項目。我們相信，我們所建構的貸款組合能夠抵禦持續不確定的宏觀經濟環境的挑戰，特別是透過避開高度週期性的產業並保持強大的多元化。我們仍然專注於在資本結構中進行更高程度的投資，我們的貸款組合 100% 為第一留置權和第二留置權優先擔保貸款。在我們度過這些不確定的時期時，我們專注於與我們的投資組合公司保持一致的對話，並在適當的情況下為他們提供額外的資金支持。

As it relates to new originations, M&A activity has remained subdued for the year. We believe that the macroeconomic uncertainty will continue to impact the prospects of increased M&A activity in the second half and therefore, we are continuing to be cautious in deploying new capital. As I mentioned at the top of my remarks, shortly after quarter end, we began the process of refinancing our $125 million unsecured notes that are maturing in February 2026. Given the size of those notes, we thought it was prudent to take advantage of receptive market conditions to start paying them down and extend our overall debt maturities.

就新創企業而言，今年的併購活動一直保持低迷。我們認為，宏觀經濟的不確定性將繼續影響下半年併購活動增加的前景，因此，我們在部署新資本方面將繼續保持謹慎。正如我在演講開頭提到的那樣，季度末後不久，我們就開始為 2026 年 2 月到期的 1.25 億美元無擔保票據進行再融資。考慮到這些票據的規模，我們認為利用良好的市場條件開始償還這些票據並延長我們的整體債務期限是明智之舉。

In July, we completed a $69 million unsecured note offering in a leverage-neutral transaction. The new notes mature in July 2028, carry a 7.5% coupon and have a one-year no-call provision. Of the $125 million outstanding on February 2026 notes, we intend to pay off a total of $94 million in August. These efforts reinforced our capital position, which we believe provides us operational flexibility. 74% of our outstanding debt is unsecured at the end of the quarter. Our nonrecourse $150 million floating rate facility with BNP Paribas matures in June 2027.

7 月份，我們透過槓桿中性交易完成了 6,900 萬美元無擔保票據發行。新票據將於 2028 年 7 月到期，票面利率為 7.5%，並附有一年的不可贖回條款。在 2026 年 2 月未償還的 1.25 億美元票據中，我們打算在 8 月償還總計 9,400 萬美元。這些努力增強了我們的資本狀況，我們相信這為我們提供了營運靈活性。截至本季末，我們 74% 的未償債務是無擔保的。我們與法國巴黎銀行簽訂的 1.5 億美元無追索權浮動利率貸款將於 2027 年 6 月到期。

Finally, our $25 million Banc of California, floating rate corporate line of credit provides us additional liquidity and flexibility. As we look to navigate this market, we will continue to rely on the long-standing experience of our adviser, which manages approximately $4.1 billion across the loan and structured credit markets, has expertise in multiple asset classes and industries and has a more than 25-year track record through multiple credit cycles.

最後，我們 2500 萬美元的加州銀行浮動利率公司信用額度為我們提供了額外的流動性和靈活性。在我們探索這個市場的過程中，我們將繼續依賴顧問的長期經驗，該顧問管理貸款和結構性信貸市場約 41 億美元的資金，在多個資產類別和行業擁有專業知識，並在多個信貸週期中擁有超過 25 年的業績記錄。

At this point, I'll turn the call over to Kyle Spina, our Chief Financial Officer, to give you more details and color for the quarter.

現在，我將把電話轉給我們的財務長 Kyle Spina，以便向您提供本季度的更多詳細資訊和情況。

Thanks, Bilal. And good morning, everyone. As Bilal mentioned, we posted net investment income of $3.3 million or $0.25 per share for the second quarter, which was down $0.01 per share from the first quarter. Top line income increased $181,000 quarter-over-quarter. However, expenses increased by $363,000, leading to a slight decline in net investment income. We announced that we are maintaining our quarterly distribution at $0.34 per share for the third quarter of 2025.

謝謝，比拉爾。大家早安。正如比拉爾所提到的，我們第二季的淨投資收入為 330 萬美元，即每股 0.25 美元，比第一季下降了每股 0.01 美元。營業收入比上一季增加了 181,000 美元。但支出增加了363,000美元，導致淨投資收入略有下降。我們宣布，我們將 2025 年第三季的季度分配維持在每股 0.34 美元。

At June 30, our quarterly distribution rate represented a 16.1% annualized yield based on the market price of our common stock. We continue to evaluate the level of our distribution in light of the current macroeconomic environment and in consideration of the new cost of our debt capital. We remain focused on improving our long-term returns while concentrating on preserving capital.

截至 6 月 30 日，根據我們普通股的市場價格，我們的季度分配率為 16.1% 的年化收益率。我們將繼續根據當前的宏觀經濟環境並考慮新的債務資本成本來評估我們的分配水準。我們將繼續致力於提高長期回報，同時專注於保住資本。

Our net asset value per share decreased by approximately 9% or $1.06 this quarter, primarily attributable to net unrealized depreciation on our investment portfolio. As Bilal described, the depreciation was most pronounced in our equity holdings, including $7.8 million of unrealized depreciation on our equity investment in Pfanstiehl. As we have mentioned before, we continue to pursue the potential sale of this minority equity position.

本季我們的每股淨資產價值下降約 9% 或 1.06 美元，主要歸因於我們投資組合的淨未實現折舊。正如比拉爾所描述的，貶值最明顯的是我們的股權投資，其中包括對 Pfanstiehl 股權投資的 780 萬美元未實現貶值。正如我們之前提到的，我們將繼續尋求出售該少數股權的潛在機會。

We had no loans placed on nonaccrual during the quarter, and our loan portfolio was generally stable based on our internal credit ratings. At quarter end, our regulatory asset coverage ratio was 160%, a decrease of 5 percentage points from the prior quarter and approximately 74% of our outstanding debt was unsecured.

本季我們沒有不提列的貸款，根據我們的內部信用評級，我們的貸款組合整體穩定。截至季末，我們的監管資產覆蓋率為 160%，較上一季下降 5 個百分點，約 74% 的未償債務是無擔保的。

As Bilal discussed, subsequent to quarter end, we closed a $69 million public bond offering with a 7.5% coupon and a three-year maturity. We intend to utilize the proceeds from this offering to partially refinance our 4.75% unsecured notes scheduled to mature in February 2026 and a leverage neutral transaction. We believe this new issuance is an attractive pricing in the current market, though, obviously, it is wider than where our existing notes were issued in early 2021 in a near zero rate environment.

正如比拉爾所討論的，在季度末之後，我們完成了 6900 萬美元的公開債券發行，票面利率為 7.5%，期限為三年。我們打算利用此次發行的收益來部分再融資我們計劃於 2026 年 2 月到期的 4.75% 無擔保票據以及槓桿中性交易。我們認為，在當前市場上，此次新發行的債券具有吸引力，但顯然，其價位比我們在 2021 年初接近零利率環境下發行的現有債券要高。

Now turning to the income statement. Total investment income increased approximately 2% to $10.5 million this quarter. This was primarily driven by nonrecurring fee income recognized during the quarter and a modest improvement in our loan portfolio yield. Total expenses increased modestly by approximately 5% during the period to $7.2 million.

現在轉向損益表。本季總投資收入成長約 2%，達到 1,050 萬美元。這主要是由於本季度確認的非經常性費用收入以及貸款組合收益率的適度改善。在此期間，總支出小幅成長約 5%，達到 720 萬美元。

Turning to our investments. We believe the vast majority of our loan portfolio remains healthy, while we continue to closely monitor our handful of borrowers performing below our expectations. As mentioned, we had no new nonaccrual loans in the second quarter. With respect to our loan portfolio, we are committed to being senior in the capital structure and selective in our underwriting, with 85% of our loan holdings being in first lien positions based on fair value.

談到我們的投資。我們相信，我們的絕大多數貸款組合仍然保持健康，同時我們繼續密切監控少數表現低於我們預期的借款人。如上所述，第二季度我們沒有新的不計息貸款。就我們的貸款組合而言，我們致力於在資本結構上保持優先地位並在承保方面精挑細選，其中 85% 的貸款持有量基於公允價值處於第一留置權地位。

During the quarter, we invested $7.9 million in a new middle market debt investment. In addition, we continue to focus on add-on opportunities for growth with our existing issuers and as of quarter end had $16.1 million in unfunded commitments to our portfolio companies. The majority of our investments are in loans and 100% of our loan portfolio was senior secured at quarter end. Based on amortized cost as at quarter end, our investment portfolio was comprised of approximately 70% senior secured loans, 23% structured finance securities, and 7% equity securities. At the end of the quarter, we had investments in 60 unique issuers totaling $382.7 million at fair value.

本季度，我們向新的中端市場債務投資了 790 萬美元。此外，我們繼續關注與現有發行人的附加成長機會，截至季度末，我們已向我們的投資組合公司提供了 1,610 萬美元的未撥付承諾。我們的大部分投資都是貸款，並且季度末我們的貸款組合 100% 都是優先擔保的。根據季度末的攤銷成本，我們的投資組合由約 70% 的優先擔保貸款、23% 的結構性融資證券和 7% 的股權證券組成。截至本季末，我們對 60 家獨特發行人的投資總額（以公允價值計算）為 3.827 億美元。

On the interest-bearing portion of the portfolio, the weighted average performing investment income yield increased modestly to 13.6%, which is up about 0.2% quarter-over-quarter. The increase in yield was primarily due to the net contribution from the aforementioned new investment in our middle market loan portfolio. This metric includes all interest, prepayment fee, and amortization of deferred loan fee income but excludes syndication fee income, if applicable.

在投資組合的計息部分，加權平均投資收益率小幅上升至 13.6%，較上季上升約 0.2%。收益率的成長主要歸功於上述新投資對我們中端市場貸款組合的淨貢獻。此指標包括所有利息、預付費用和遞延貸款費用收入的攤銷，但不包括銀團費用收入（如果適用）。

With that, I'll turn the call back over to Bilal for concluding remarks.

說完這些，我將把電話轉回給比拉勒，請他做最後發言。

Thank you, Kyle. As we continue to navigate the current macroeconomic uncertainty, we believe our portfolio is defensively positioned to withstand the pressures of this challenging environment. We had no new non-accruals in the quarter. Our portfolio remains diversified across multiple industries, and we continue to be committed to investing higher in the capital structure. Looking ahead over the long term, we are focused on increasing our net investment income, specifically through our efforts to monetize certain noninterest-earning equity positions, including our investment in Pfanstiehl.

謝謝你，凱爾。隨著我們繼續應對當前的宏觀經濟不確定性，我們相信我們的投資組合具有防禦性，可以承受這一充滿挑戰的環境的壓力。本季我們沒有新的未提列項目。我們的投資組合仍然多元化，涉及多個行業，我們繼續致力於在資本結構中進行更高的投資。放眼長遠，我們致力於增加淨投資收益，特別是透過努力將某些無利息股權資產貨幣化，包括對 Pfanstiehl 的投資。

We took advantage of favorable market conditions to extend the maturities of our debt, which we believe gives us operational flexibility over the coming years. We continue to focus on capital preservation, which is especially critical during these uncertain economic times. We believe our long-standing experience and investment discipline have served us well over the past 14 years.

我們利用有利的市場條件延長了債務期限，我們相信這將為我們未來幾年的營運帶來靈活性。我們繼續關注資本保全，這在經濟不確定的時期尤其重要。我們相信，我們長期累積的經驗和投資紀律在過去 14 年為我們帶來了良好的效益。

Since the beginning of 2011, the BDC has invested more than $2 billion with a cumulative net realized loss of just 3.5%, while generating attractive risk-adjusted returns on our portfolio. As always, we will continue to rely on the size, experience, and reputation of our adviser.

自 2011 年初以來，BDC 已投資超過 20 億美元，累積淨實現虧損僅 3.5%，同時為我們的投資組合產生了頗具吸引力的風險調整回報。像往常一樣，我們將繼續依賴我們顧問的規模、經驗和聲譽。

With a $4.1 billion corporate credit platform affiliated with a $30 billion asset management group, our adviser has broad expertise including long-standing banking and capital markets relationships. Our corporate credit platform has gone through multiple credit cycles over the last 25-plus years. Our adviser and affiliates are strongly aligned with the shareholders as they maintain an approximately 23% ownership in the company.

我們的顧問擁有一個價值 41 億美元的企業信貸平台，隸屬於一個價值 300 億美元的資產管理集團，擁有廣泛的專業知識，包括長期的銀行和資本市場關係。過去25多年來，我們的企業信貸平台經歷了多個信貸週期。我們的顧問和附屬公司與股東保持緊密的聯繫，因為他們持有公司約 23% 的所有權。

With that, operator, please open up the call for questions.

接線員，請打開電話詢問。

(Operator Instructions)

（操作員指示）

And this will conclude today's question-and-answer session. The conference has now also concluded. Thank you for attending today's presentation, and you may now disconnect.

今天的問答環節到此結束。會議目前也已經結束。感謝您參加今天的演示，現在您可以斷開連接了。