Oxford Lane Capital Corp (OXLC) 2025 Q2 法說會逐字稿

Hello, everyone and welcome to Oxford Lane Capital Corp, announcing their Net Asset Value and selective financial results for the second fiscal quarter. My name is Lydia and I'll be your operator today. (Operator Instructions.)

大家好，歡迎來到 Oxford Lane Capital Corp，該公司公佈了第二財季的資產淨值和部分財務表現。我叫莉迪亞，今天我將成為您的接線生。（操作員說明。）

I'll now hand you over to Jonathan Cohen CEO to begin. Please go ahead.

現在，我將把您交給執行長喬納森·科恩 (Jonathan Cohen)，讓您開始。請繼續。

Thanks very much. Good morning, everyone and welcome to the Oxford Lane Capital Corp second fiscal quarter 2025 Earnings Conference Call. I'm joined today by Saul Rosenthal, our President Bruce Rubin, our Chief Financial Officer and Joe Kupka, our Managing Director. Bruce, could you please open our call today with the disclosure regarding forward-looking statements?

非常感謝。大家早安，歡迎參加 Oxford Lane Capital Corp 2025 年第二財季財報電話會議。今天與我一起出席的還有我們的總裁索爾·羅森塔爾(Saul Rosenthal)、我們的首席財務官布魯斯·魯賓(Bruce Rubin) 和我們的董事總經理喬·庫普卡(Joe Kupka )。布魯斯，您能否在我們今天的電話會議中揭露有關前瞻性陳述的內容？

Sure. Jonathan, today's conference call is being recorded and an audio replay of the call will be available for 30 days. Replay information is included in our press release as issued earlier this morning. Please note that this call is the property of Oxford Lane Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited.

當然。喬納森，今天的電話會議正在錄音，電話會議的音訊重播將保留 30 天。重播資訊包含在我們今天早上早些時候發布的新聞稿中。請注意，本次電話會議屬於 Oxford Lane Capital Corp. 的財產。

At this point please direct your attention to the customary disclosures in this morning's press release regarding forward-looking information. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to among other things, future events, and financial performance. We refer to our most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections.

此時，請注意今天上午新聞稿中有關前瞻性資訊的慣例披露。今天的電話會議包括前瞻性陳述和預測，反映了公司目前對未來事件和財務表現等方面的看法。我們參考了我們最近向美國證券交易委員會提交的文件，以了解可能導致實際結果與這些預測中所示結果有重大差異的重要因素。

We do not undertake to update our forward-looking statements unless required to do so by law. During this call we will use defined terms in the earnings release and also refer to non-GAAP measures for definitions and reconciliations to GAAP, please refer to our earnings release posted on our website at www.Oxfordlane capital.com. With that, I'll turn the presentation back to Jonathan.

除非法律要求，否則我們不承諾更新我們的前瞻性陳述。在本次電話會議中，我們將在收益發布中使用定義的術語，並參考非GAAP 衡量標準進行定義以及與GAAP 的對賬，請參閱我們在我們的網站www.Oxfordlane Capital.com 上發布的收益發布。接下來，我將把演示轉回給喬納森。

Thank you, Bruce. On September 30, 2024, our net asset value per share stood at $4.76, compared to a Net Asset Value per share of $4.91 as of the prior quarter. For the quarter ended September, we recorded GAAP total investment income of approximately $105.1 million representing an increase of approximately $15.4 million from the prior quarter. The quarter's GAAP total investment income consisted of approximately $98.3 million from our CLO equity and CLO warehouse investments and approximately $6.8 million from our CLO debt investments and from other income.

謝謝你，布魯斯。截至 2024 年 9 月 30 日，我們的每股淨值為 4.76 美元，而上一季的每股資產淨值為 4.91 美元。截至 9 月的季度，我們記錄的 GAAP 總投資收入約為 1.051 億美元，較上一季增加約 1,540 萬美元。本季的 GAAP 總投資收入包括來自 CLO 股權和 CLO 倉庫投資的約 9,830 萬美元，以及來自 CLO 債務投資和其他收入的約 680 萬美元。

Oxford Lane recorded GAAP net investment income of approximately $67.2 million or $0.22 per share for the quarter ended September compared to approximately $56 million or $0.22 per share for the quarter ended June 30.

Oxford Lane 記錄的截至9 月的季度的GAAP 淨投資收益約為6,720 萬美元，即每股0.22 美元，而截至6 月30 日的季度的GAAP 淨投資收益約為5,600 萬美元，即每股0.22 美元。

Our core Net Investment Income was approximately $99.4 million or $0.32per share for the quarter ended September compared with approximately $107.2 million or $0.41 per share for the quarter ended June 30.For the quarter ended September, we recorded net unrealized depreciation on investments of approximately $52.5 million and net realized gains of approximately $3.2 million.

截至9 月的季度，我們的核心淨投資收入約為9,940 萬美元，即每股0.32 美元，而截至6 月30 日的季度，我們的核心淨投資收入約為1.072 億美元，即每股0.41 美元。

We had a net increase in net assets resulting from operations of approximately $17.9 million or $0.06 per share for the second fiscal quarter. As of September 30, the following metrics applied, we note that none of these metrics necessarily represented a total return to shareholders. The weighted average yield of our CLO debt investments at current cost was 17.3% down from 17.4% as of June 30.

第二財季營運帶來的淨資產淨增加約 1,790 萬美元，即每股 0.06 美元。截至 9 月 30 日，採用以下指標，我們注意到這些指標不一定代表股東的總回報。截至 6 月 30 日，以當前成本計算的 CLO 債務投資的加權平均收益率為 17.3%，低於 17.4%。

The weighted average effective yield of our CLO equity investments at current cost was 16.5% down from 16.8% as of June 30. The weighted average cash distribution yield of our CLO equity investments at current cost was 24.1% down from 26.9% as of June 30. We note that the cash distribution yields calculated on our CLO equity investments are based on the cash distributions we received or which we were entitled to receive at each respective period, and during the quarter end in September we issued a total of approximately $48.1 million shares of our common stock pursuant to an at the market offering resulting in net proceeds of approximately $252 million.

截至 6 月 30 日，以現值計算，我們的 CLO 股權投資的加權平均有效收益率為 16.5%，較 6 月 30 日的 16.8% 下降。截至 6 月 30 日，以現值計算的 CLO 股權投資的加權平均現金分配收益率為 24.1%，較 26.9% 下降。我們注意到，根據我們的CLO 股權投資計算的現金分配收益率是基於我們在各個時期收​​到或有權收到的現金分配，在9 月份季度末，我們總共發行了約4810 萬美元的CLO 股票。

During the quarter ended September, we made additional CLO investments of approximately $540 million and we received approximately $160.2 million from sales and from repayments. On October 24, our Board of Directors declared monthly common stock distributions of $0.09 per share for each of the months ending January, February, and March of 2025.

在截至 9 月的季度中，我們進行了約 5.4 億美元的額外 CLO 投資，並從銷售和還款中獲得了約 1.602 億美元。10 月 24 日，我們的董事會宣布截至 2025 年 1 月、2 月和 3 月的每月普通股分配為每股 0.09 美元。

With that, I'll turn the call over to our Managing Director, Joe Kupka.

接下來，我會將電話轉給我們的董事總經理喬‧庫普卡 (Joe Kupka)。

Thanks Jonathan. During the quarter ended September 30, 2024, US loan market performance improved versus the prior quarter. The US Loan Price Index increased from 96.59% as of June 30 to 96.71% as of September 30. The increase in US loan prices led to an approximate 60 basis point increase in median US CLO equity net asset values. Additionally, due to elevated levels of repricing activity, we observed median weighted average spreads across loan pools within CLO portfolios decreased to 352 basis points compared to 361 basis points last quarter.

謝謝喬納森。截至 2024 年 9 月 30 日的季度，美國貸款市場表現較上一季有所改善。美國貸款物價指數從6月30日的96.59%上升至9月30日的96.71%。美國貸款價格上漲導緻美國 CLO 股權淨資產中位數增加約 60 個基點。此外，由於重新定價活動水準升高，我們觀察到 CLO 投資組合內貸款池的加權平均利差中位數下降至 352 個基點，而上季為 361 個基點。

While the 12 month trailing default rate for the loan index decreased to 0.8% by principal amount at the end of the quarter from 0.9% at the end of June 2024. We note that out of court restructurings exchanges and subpar buybacks which are not captured in this type of default rate remain elevated.

貸款指數的 12 個月追蹤違約率以本金計算，從 2024 年 6 月底的 0.9% 降至本季末的 0.8%。我們注意到，此類違約率中未包含的庭外重組交易和低於標準的回購仍然很高。

US new issuance during the quarter totalled approximately $40 billion, a decrease of $20 billion from the prior quarter. CLO new issuance year-to-date has totalled approximately $142 billion as of September 30, compared to approximately $82 billion at this point in 2023.

本季美國新發行總額約 400 億美元，較上季減少 200 億美元。截至 9 月 30 日，CLO 今年迄今的新發行總額約為 1,420 億美元，而 2023 年此時約為 820 億美元。

The US CLO market has seen over $200 billion in reset and refinancing activity year-to-date including approximately $33 billion in the month of August, marking the second highest monthly volume of all time. Oxford Lane remained active this quarter, investing over $500 million of proceeds in CLO equity debt and warehouses while participating in optimistic recess and refinancings, as a function of our overall activity during the quarter, we were able to lengthen the weighted average reinvestment period of Oxford Lane's equity portfolio from November 2026 to September 2027.

年初至今，美國 CLO 市場的重置和再融資活動已超過 2,000 億美元，其中 8 月約為 330 億美元，創下史上第二高月度交易量。Oxford Lane 本季保持活躍，將超過 5 億美元的收益投資於 CLO 股權債務和倉庫，同時參與樂觀休市和再融資，根據我們本季的整體活動，我們能夠延長 Oxford 的加權平均再投資期限Lane 2026年11 月至2027 年9 月的股票投資組合。

Our primary investment strategy during the quarter was to engage in relative value trading and seek to lengthen the weighted average reinvestment period of Oxford Lane's CLO equity portfolio. In the current market environment we intend to continue to utilize our opportunistic and unconstrained CLO investment strategy across US, CLO equity debt and warehouses as we look to maximize our long-term total return. And as a permanent capital vehicle, we have historically been able to take a longer-term view towards our investment strategy.

我們本季的主要投資策略是進行相對價值交易，並尋求延長 Oxford Lane 的 CLO 股票投資組合的加權平均再投資期限。在當前的市場環境下，我們打算繼續利用我們在美國、CLO 股權債務和倉庫的機會主義和不受約束的 CLO 投資策略，以實現長期總回報最大化。作為一種永久的資本工具，我們歷來能夠以更長遠的眼光來制定我們的投資策略。

With that. I'll turn the call back over to Jonathan.

就這樣。我會把電話轉回喬納森。

Joe. Thanks, that concludes our presentation. We're happy operator to open the call up for any questions.

喬.謝謝，我們的演講到此結束。我們很高興接線生為您解答任何問題。

Thank you. (Operator Instructions.)

謝謝。（操作員說明。）

Our first question comes from Eric Zwick with Lucid Capital. Please go ahead. Your line is open.

我們的第一個問題來自 Lucid Capital 的 Eric Zwick。請繼續。您的線路已開通。

Thank you. Good morning, Jonathan, and Joe. You were very active in the quarter in terms of both new investments and sales and repayments, and Joe and his comments mentioned just how active the CLO market was during the most recent quarter. If you could just provide a little commentary first in terms of your new investments what the split was between kind of primary market purchase versus secondary and just how you at present kind of weigh the attractiveness of those two potential sources of new investments going forward from kind of a risk reward perspective.

謝謝。早安，喬納森和喬。本季在新投資、銷售和還款方面都非常活躍，喬和他的評論提到了 CLO 市場最近一個季度的活躍程度。如果您能先就您的新投資提供一些評論，一級市場購買與二級市場購買之間的區別是什麼，以及您目前如何權衡這兩種潛在新投資來源的吸引力從風險回報的角度來看。

Sure, first about the split, so it was mainly driven by a primary activity. We've seen the arbitrage continue to improve in the primary and we took advantage of that. So we invested about $180 million in warehouse investments and about 270 in primary, so some of that especially what you see in the sales and repayments were these warehouses being converted into primary CLO investments. And apart from that, we also were active in the secondary investing about $90 million in the secondary.

當然，首先是關於分裂，所以它主要是由主要活動驅動的。我們看到初選時套利繼續改善，我們利用了這一點。因此，我們在倉庫投資中投資了約1.8 億美元，在初級投資中投資了約270 美元，所以其中一些，特別是你在銷售和還款中看到的，是這些倉庫被轉換為初級CLO 投資。除此之外，我們也積極參與二級投資，投資約 9,000 萬美元。

As far as going forward, we continue to see attractive opportunities in both the secondary and the primary, especially opening up new warehouses with top tier managers who can command the tightest liability spreads and secondary investments kind of across the tenor and manager spectrum, we continue to find good value.

就未來而言，我們繼續在二級和一級市場看到有吸引力的機會，特別是與頂級經理開設新倉庫，他們可以在期限和經理範圍內控制最窄的負債利差和二級投資，我們繼續找到好的價值。

Thanks Joe, that's really helpful. And then just thinking about the interest rate environment, that the market's pretty set and then there will be additional fed funds, target rate cuts kind of the magnitude and timing is still out for debate. But in terms of looking at a lower short term interest rate environment, how do you expect that to impact your portfolio as well as maybe potentially change how you manage it going forward?

謝謝喬，這真的很有幫助。然後考慮利率環境，市場已經相當穩定，然後會有額外的聯邦基金，目標降息的幅度和時機仍然有爭議。但就較低的短期利率環境而言，您預計這會如何影響您的投資組合，並可能改變您未來管理投資組合的方式？

Sure, there's likely Eric to be any meaningful change in how we manage the portfolio. We've been managing it pretty consistently since the inception of the fund in 2011. But in terms of the near term issues associated with the diminishment in interest rates with the change in base rates.

當然，埃里克可能會對我們管理投資組合的方式做出任何有意義的改變。自 2011 年該基金成立以來，我們一直以一貫的方式對其進行管理。但就與利率隨基本利率變化而下降相關的近期問題而言。

Our sense is that the most meaningful implication of that is likely to be a reduction in the risk associated with US syndicated loan default rates, by virtue of diminishing the risk associated with refinancing possibilities. So from our perspective, there are lots and lots of other smaller implications, but that's probably the principal one.

我們的感覺是，這最有意義的影響可能是透過降低與再融資可能性相關的風險來降低與美國銀團貸款違約率相關的風險。因此，從我們的角度來看，還有很多其他較小的影響，但這可能是主要的影響。

That's a good point that actually leads into another question I wanted to ask about you mentioned that the default rate is incredibly low now, but it's not reflective of out-of-court restructuring. why, maybe more of some of these credits or loans that are being stressed or tripping covenants are going to an out-of-court resolution rather than to the courts if you have any thoughts there.

這是一個很好的觀點，實際上引出了我想問的另一個問題，關於你提到的違約率現在非常低，但這並不反映庭外重組。為什麼，如果你有任何想法的話，也許更多一些受到壓力或絆倒契約的信貸或貸款將進入庭外解決方案，而不是法庭。

Yeah, that's a relatively recent phenomenon that kind of flipped recently in the past year too before it was more payment defaults. Now, it's more of these out restructurings there are a lot of factors, one of them is the company’s kind of see rate cuts coming. They want to try to kick the can down the road a little more, try to stave off payment default and this is a way to do it, so that's one factor but there's a lot of interplay with lender consortiums.

是的，這是一個相對較新的現象，在出現更多的付款違約之前，去年也發生了一些轉變。現在，更多的是這些重組，有很多因素，其中之一就是公司預見到降息即將到來。他們想嘗試再多一點，嘗試避免付款違約，這是一種方法，所以這是一個因素，但與貸方財團有很多相互作用。

Right. Exactly. Right. Eric. But at the same time, it's something that we're very aware of in the context of managing this portfolio.

正確的。確切地。正確的。埃里克.但同時，我們在管理這個投資組合的過程中非常清楚這一點。

Makes sense. And then last one for me, if you could just talk maybe about some of the factors that drove the unrealized appreciation of $52.5 million during the quarter.

有道理。最後一個問題是，您能否談談推動本季未實現升值 5,250 萬美元的一些因素。

Sure. So that's it's an interplay of a lot of GAAP accounting measures. So it takes into account the fair, so even though we had a positive quarter, it takes into account the fair value reduction offset by the current cash flows of the CLO and then the GAAP decrease of current cost. So it's really a GAAP accounting measure.

當然。這就是許多 GAAP 會計指標的相互作用。因此，它考慮到了公平性，因此即使我們有一個積極的季度，它也考慮了 CLO 當前現金流量抵消的公允價值減少，以及當前成本的 GAAP 減少。所以這其實是公認會計準則會計衡量標準。

It's a pleasure, and in terms of the vagaries of GAAP, accounting is applied to this line item, we're more than happy to go through it in more depth with you offline if you'd like.

很高興，而且就 GAAP 的變幻莫測而言，會計適用於該訂單項，如果您願意，我們非常樂意與您離線更深入地了解它。

Sure. That'd be great. Thanks.

當然。那太好了。謝謝。

All right. Thank you. Eric. Any other questions, operator?

好的。謝謝。埃里克.接線生還有其他問題嗎？

I show no further questions. So Jonathan, I'll turn the call back over to you.

我沒有再提出任何問題。喬納森，我會把電話轉回給你。

All right. Thank you very much. We'd like to thank everybody for their interest and their participation on this call.

好的。非常感謝。我們要感謝大家對本次電話會議的關注與參與。

Thank you and we look forward to speaking to you again soon. Thanks very much.

謝謝您，我們期待很快再次與您交談。非常感謝。

Thank you. This concludes our call today. Thank you very much for your participation. You may now disconnect your line.

謝謝。我們今天的電話會議到此結束。非常感謝您的參與。現在您可以斷開線路。