Q3 2024 Oxford Square Capital Corp Earnings Call
Good day everyone and welcome to today's Oxford Square Capital Corp third quarter 2024 earnings conference call.
At this time, all participants are in a listen-only mode.
Later, you will have an opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star and one on your telephone keypad.
Please note this call is being recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the program over to CEO Jonathan Cohen.
Jonathan Cohen: Thank you very much. Good morning, everyone, and welcome to the Oxford Square Capital Corp third quarter 2024 earnings conference call. I'm joined today by Saul Rosenthal, our President, Bruce Rubin, our Chief Financial Officer, and Kevin Yonon, Managing Director and Portfolio Manager.
Jonathan Cohen: Bruce, could you open the call with a disclosure regarding forward-looking statements? Sure, Jonathan. Today's conference call is being recorded. An audio replay of the conference call will be available for 30 days.
Bruce Rubin: 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.
Bruce Rubin: Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure of this morning's press release regarding public information.
Bruce Rubin: Today's conference call includes photo-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 our most recent filings with the SEC for 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. To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com. With that, I'll turn the presentation back to Jonathan.
Jonathan Cohen: Thank you, Bruce. For the quarter ended September, Oxford Square's net investment income was approximately $6.2 million, or $0.10 per share.
Bruce Rubin: compared with $7.7 million, or $0.13 per share, in the prior quarter. Our net asset value per share stood at $2.35, compared to a net asset value per share of $2.43 for the prior quarter.
During the quarter, we distributed 10.5 cents per share to our common stock shareholders.
Bruce Rubin: For the third quarter, we recorded total investment income of approximately $10.3 million as compared to approximately $11.4 million in the prior quarter.
Bruce Rubin: In the third quarter, we recorded combined net unrealized and realized losses on investments of approximately $7.1 million or $0.11 per share.
Bruce Rubin: compared to combined net unrealized and unrealized losses on investments of approximately $2.5 million or $0.04 per share for the prior quarter.
Bruce Rubin: During the third quarter, our investment activity consisted of purchases of approximately $47.7 million and repayments of approximately $27.9 million.
Bruce Rubin: During the quarter end of September, we issued a total of approximately 5.1 million shares of our common stock, pursuant to an at-the-market offering resulting in net proceeds of approximately $14.5 million.
Bruce Rubin: On October 31st, our Board of Directors declared monthly distributions of 3.5 cents per share for each of the months ending January, February, and March of 2025.
Speaker Change: Additional details regarding record and payment data information can be found in our press release that was issued this morning. With that, I'll turn the call over to our Portfolio Manager, Kevin Yonon. Thank you, Jonathan. During the quarter ended September 30th, U.S. loan market performance modestly improved versus the prior quarter.
Bruce Rubin: U.S. loan prices, as defined by the Morningstar LSTA U.S. Leverage Loan Index, increased from 96.54% of par as of June 28 to 96.71% of par as of September 30.
Bruce Rubin: According to LCD, during the quarter, there was some pricing dispersion, with BB rated loan prices increasing 28 basis points, B rated loan prices decreasing 32 basis points, and CCC rated loan prices increasing 215 basis points on average.
Bruce Rubin: While the 12-month trailing default rate for the loan index decreased to 0.8 percent by principal amount at the end of the quarter from 0.9 percent at the end of June, we note that out-of-court restructurings, exchanges, and subpar buybacks, which are not captured in this cited default rate, remain elevated.
Bruce Rubin: During the quarter ended September 30th, 2024, U.S. leveraged loan primary market issuance, excluding amendments and repricing transactions, was $109.8 billion, representing a 45% increase versus the quarter ended September 30th, 2023.
Bruce Rubin: This was driven by higher non-refinancing issuance, including M&A and LBO activity, and opportunistic activity, including the funding of dividends, versus the prior year comparable quarter.
Bruce Rubin: At the same time, U.S. loan fund outflows, as measured by LIBOR, were approximately $3.5 billion for the quarter into September 30th.
Speaker Change: 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 take a longer-term view towards our investment strategy. With that, I will turn the call back over to Jonathan.
Jonathan Cohen: Thanks, Kevin.
Jonathan Cohen: We note that additional information about Oxford Square's third quarter performance has been posted to our website at www.oxfordsquarecapital.com. With that, operator, we're happy to poll for any questions.
Speaker Change: Of course, at this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one. If you would like to ask a question, we will pause for just a moment to allow questions to queue.
Jonathan Cohen: And once again, that is star and one if you would like to ask a question.
Speaker Change: I don't see any questions in the queue. I'll turn the program back over to our presenters for any additional or closing remarks.
Speaker Change: Thank you very much. We'd like to thank everyone for participating on this call or listening to the replay. We look forward to speaking to you again soon. Thanks very much.
Speaker Change: Unknown Speaker 0