Oxford Square Capital Corp (OXSQ) 2024 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Oxford Square Capital Corp., fourth-quarter 2024 earnings conference call. (Operator Instructions) This call is being recorded on Friday, February 28, 2025.

I'd now like to turn the conference over to Mr. Jonathan Cohen. Please go ahead.

Good morning, everyone. Welcome to the Oxford Square Capital Corp., fourth-quarter 2024 earnings conference call. I'm joined today by Bruce Rubin, our Chief Financial Officer; and Kevin Yonon, our Managing Director and Portfolio Manager.

Bruce, could you open the call with the disclosure regarding forward-looking statements?

Sure, Jonathan. Today's conference call is being recorded. An audio replay of the call will be available for 30 days. Replay information is included in our press release that was issued this morning. Please note that this call is the property of Oxford Square Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure 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 ask that you refer to the most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com.

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

Thank you, Bruce. For the quarter ended December, Oxford Square's net investment income was approximately $6 million or $0.09 per share compared with $6.2 million or $0.10 per share for the prior quarter. Our net asset value per share stood at $2.30 compared to a net asset value per share of $2.35 for the prior quarter. During the quarter, we distributed $0.105 per share to our common stock shareholders.

For the fourth quarter, we recorded total investment income of approximately $10.2 million as compared with approximately $10.3 million for the prior quarter. In the fourth quarter, we recorded combined net unrealized and realized losses on investments of approximately $2.7 million or $0.04 per share compared to combined net unrealized and realized losses on investments of approximately $7.1 million or $0.11 per share for the prior quarter.

During the fourth quarter, our investment activity consisted of purchases of approximately $25.1 million, sales of $7 million, and repayments of approximately $15 million. During the quarter ended December, we issued a total of approximately 1.8 million shares of our common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $5 million.

On February 27, our Board of Directors declared monthly distributions of $0.035 per share for each of the months ending April, May, and June of 2025. Additional details regarding record and payment date information can be found in our press release that was issued this morning.

With that, I'll turn the call over to Kevin Yonon.

Thank you, Jonathan. During the quarter ended December 31, the US loan market performance improved versus the prior quarter. US loan prices, as defined by the Morningstar LSTA US Leveraged Loan Index, increased from 96.71% of par as of September 30 to 97.33% of par as of December 31.

According to LCD, during the quarter, there was some pricing dispersion with BB-rated loan prices increasing 48 basis points, B-rated loan prices increasing 74 basis points, and CCC-rated loan prices decreasing 373 basis points on average.

While the 12-month trailing default rate for the loan index increased to 0.91% by principal amount at the end of the quarter from 0.8% at the end of September, we note that out-of-court restructurings, exchanges, and subpar buybacks, which are not captured in this cited default rate, remain elevated. Additionally, the distress ratio, defined as a percentage of loans with prices below 80% of par, ended the quarter at 3.02% compared to 3.43% at the end of the third quarter.

During the quarter ended December 31, 2024, US Leveraged Loan primary market issuance, excluding amendments and repricing transactions, was $96.7 billion, representing a 75% increase versus the quarter ended December 31, 2023. This was driven by higher non-refinancing issuance, including M&A and LBO activity and opportunistic activity, including refinancings and the funding of dividends versus the prior year comparable quarter.

At the same time, US loan fund inflows measured by Lipper were approximately $5.5 billion for the quarter ended December 31. We continue to focus on portfolio management strategies designed to maximize our long-term total return. And as a permanent capital vehicle, we historically have been able to make a longer-term view towards our investment strategy.

With that, I will turn the call back over to Jonathan.

Thanks very much, Kevin. We note that additional information about Oxford Square's fourth-quarter performance has been posted to our website at www.oxfordsquarecapital.com.

Operator, with that, we're happy to open the call for any questions.

(Operator Instructions) There appear to be no questions. I will turn the call back over to Mr. Cohen for closing comments.

Thanks very much. I'd like to thank everyone for their participation on this call, and we look forward to speaking again soon. Thanks very much.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.