Q4 2024 Oxford Square Capital Corp Earnings Call
Speaker Change: Good morning, ladies and gentlemen, and welcome to the Oxford Square Capital Corp fourth quarter 2024 earnings conference call.
Speaker Change: At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator.
Speaker Change: This call is being recorded on Friday, February 28, 2025. I would now like to turn the conference over to Mr. Jonathan Cohen. Please go ahead.
Jonathan Cohen: 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.
Speaker Change: 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 call will be available for 30 days. Replay information is included in our press release that was issued this morning.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Do not undertake to update our public statements unless required to do so by law to obtain copies of our latest SEC filings Please visit our website at With that I'll turn the presentation back over to Jonathan
Speaker Change: Compared with $6.2 million or 10 cents per share for the prior quarter.
Speaker Change: Our net assets value per shares to the $2.30 compared to a net asset value per share of $2.35 for the prior quarter. During the quarter, we distributed 10.5 cents per share to our common stock shareholders.
Speaker Change: 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.
Speaker Change: In the fourth quarter, we recorded combined net unrealized and realized losses on investments of approximately 2.7 million dollars or four cents per share compared to combine that unrealized and realized losses on investments of approximately 7.1 million dollars or 11 cents per share for the prior quarter
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: On February 27th, our Board of Directors declared monthly distributions of three and a half cents per share for each of the months ending April, May and June of 2025.
Speaker Change: Additional details regarding record of payment data information can be found in our press release that was issued this morning. With that, I'll turn the call over to Kevin Yonon.
Kevin Yonon: Thank you, Jonathan. During the quarter ended December 31st, U.S. loan market performance improved versus the prior quarter.
Kevin Yonon: U.S. loan prices, as defined by the Morningstar LSTA U.S. Leverage Loan Index, increased from 96.71 percent APAR as of September 30th to 97.33 percent APAR as of December 31st.
Kevin Yonon: According to LCB, during the quarter, there was some pricing dispersion, with double B-rated loan prices increasing 48 basis points, B-rated loan prices increasing 74 basis points, and triple C-rated loan prices decreasing 373 basis points on average.
Kevin Yonon: While the 12-month trailing default rate for the loan index increased to 0.91% at principal amounts 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.
Kevin Yonon: Additionally, the distress ratio, defined as the 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.
Kevin Yonon: During the quarter ended December 31st, 2024, U.S. leveraged on primary market issuance, excluding amendments and repricing transactions, was $96.7 billion, representing a 75% increase versus the quarter ended December 31st, 2023.
Kevin Yonon: 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.
Kevin Yonon: At the same time, U.S. Loan Fund inflows, measured by LIFR, were approximately $5.5 billion for the quarter ended December 31st.
Kevin Yonon: 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.
Jonathan Cohen: 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.
Jonathan Cohen: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised.
Jonathan Cohen: Should you wish to decline from the polling process, please press star followed by two. And if you are using a speakerphone, please lift the headset before pressing any keys.
Jonathan Cohen: Ladies and gentlemen, as a reminder, if you have any questions, please press star 1 now.
Speaker Change: There appear to be no questions. I will turn the call back over to Mr. Cohen for closing comments.
Speaker Change: 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.