Q1 2021 Oxford Lane Capital Corp Earnings Call

Okay.

The Oxford Lane Capital Corp, first fiscal quarter 2021 earnings release and conference call all participants will be I'm.

So do you need assistance, placing all conference specialist casino start cheap all play zero. After today's presentation, there will be an opportunity to ask questions. That's your question that Star then one there touchtone phone to withdraw your question. Please press Star then too.

No because it's being recorded.

I would now like to turn the conference over to Jonathan Cohen. Please go ahead.

Thanks, very much good morning, everyone and welcome to the Oxford Lane Capital Corp, first fiscal quarter 2021 earnings Conference call I'm joined today by Saul Rosenthal, our President Bruce Rubin, our Chief Financial Officer, and deep Maji, our senior managing director and portfolio manager Bruce could you. Please open the call this morning with a disclosure.

Sure regarding forward looking statements sure Jonathan.

Today's conference calls pre recorded an audio replay of the call won't be available 30 days replay information is included in our press release that was issued earlier this morning.

Please note that this call is the property, Oxford Lane capital Corp. any unauthorized rebroadcast of this call in any form is strictly prohibited.

Points. Please direct your attention to the customary disclosure in this mornings 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 you heard that and financial performance. We ask that you referred to our most recent filings with the FCC.

Well important factors that could 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.

During this call we will use terms to find 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 Dot, Oxford Lane capital Dot Com with that I'll turn the presentation back up to Jonathan.

Thanks, very much Bruce.

On June Thirtyth, Twentytwenty, our net asset value per share stood at $3.23 compared to a net asset value per share of $3.58 as of March 31st.

For the quarter ended June Thirtyth, we reported GAAP total investment income of approximately $29.7 million, representing a decrease of approximately $4.2 million from the prior quarter.

The quarters gap total investment income from our portfolio consisted of $27.7 million from our CLL equity investments and $2 million from Marcello debt investments and from other income.

[noise], Oxford Lane also recorded GAAP net investment income of approximately $17.6 million or 23 cents per share for the quarter ended June thirtyth compared to approximately $20.4 million or 29 cents per share for the quarter ended March 31st.

Our core net investment income was approximately $17.7 million or 23 cents per share for the quarter ended June thirtyth compared with approximately $32.3 million or 45 cents per share for the quarter ended March 30 Onest.

During the quarter ended June Thirtyth, we issued a total of approximately 7.2 million shares of our common stock pursuant to an aftermarket offering resulting in net proceeds of approximately $26.7 million.

On May 21st 2020, we announced that the company's board of directors authorized program for the purchase purpose of repurchasing up to $40 million worth of the outstanding shares of the company's preferred stock for the quarter ended June Thirtyth, we repurchased approximately $6.4 million of our preferred stock consisting of approximately 135000 shares.

Most of our 7.5% series 2023 term preferred stock for a total of approximately $3.2 million approximately 4000 shares of our six in three quarter percent series 2024 term preferred stock for a total of approximately $100000.

And approximately 139000 shares of our six in a quarter percent series Twentytwenty seven term preferred stock for a total of approximately $3.1 million.

For the quarter ended June Thirtyth, we recorded net realized losses of approximately $27.3 million or 35 cents per share. We recorded net unrealized depreciation of approximately $11.6 million or 15 cents per share.

We had a net increase in net assets, resulting from operations of approximately $1.9 million or two cents per share for the first fiscal quarter.

As of June Thirtyth, the following metrics applied weed out the none of these metrics representative total return to shareholders. The weighted average yield of our Siloed debt investment <unk> current cost was 11.7% up from 11.6% as of March 30 Onest.

The weighted average GAAP effective yield of course yellow equity investments at current cost was 13.4% down from 15.5% as of March 30 Onest.

The weighted average cash distribution yield of our CLO equity investments a current cost was 14% down from 20% as of March 31st.

[noise], we note that the cash distribution yields calculated on our cielo equity investments are based on the cash distributions, we received for which we were entitled to receive at each respective period at.

During the quarter ended June Thirtyth, we made additional celo investments of approximately $21.4 million and we received $49.7 million from sales and repayments of our COO investments.

On June Thirtyth, our board of directors declared monthly six in three quarters sent common stock distributions through December 30, Onest Twentytwenty.

With that I'll turn the call over to our portfolio manager deep Magic deep.

Thank you Jonathan during the quarter ended June Thirtyth, the U.S. loan market strengthened versus the quarter ended March 30, Onest 2020, U.S. loan prices as defined by S&P, Let's say leverage loan index increased from 82.9% of bar as of March 31st took quarterly high of 91.2% of par on June 10th.

For declining to 89.9% of bar on June Thirtyth, as we mentioned last quarter, we anticipated that U.S. celo equity tranche pricing may remain under pressure in the near to medium term due to elevated ratings downgrades, specifically to triple C or below rated an increase in loan default and the prospect for steel equity cash flow diversion while.

Hello equity cash flow Diverter Unrisked has increased in the near to medium term. The current environment may create opportunities for the salamanders of the feel of vehicles in which we are invested to reinvest into higher yielding loans at meaningful discounts to par. This may allow the feel of managers to increase their overcollateralization ratios to provide additional cushion to mitigate future seal equity cash flow.

A diversion caused by additional loan defaults and ratings downgrades in the current Mark environment, we intend to continue to utilize an opportunistic an unconstrained siloed investment strategy across U.S. siloed debt and equity tranches looking 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.

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

[noise], thanks, very much steep operator with that we're happy to open the call for any questions.

We will now be getting the question answer session ask your question you might press Star then one of your Touchtone phone.

Oh, sorry. Your question. Please press Star then too.

Time, we'll pause momentarily to assemble our roster.

I'm showing no questions up as Todd.

All right operator, thank you very much lastly, I would like to note that additional information regarding our first fiscal quarter financial performance has been uploaded to our website at Www Dot, Oxford Lane capital Dot Com I'd like to thank everyone on the call and listening to the replay for their end.

Trust in their participation. Thank you very much.

The conference has now concluded. Thank you for today's presentation you may now disconnect.

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