Q4 2025 Oxford Square Capital Corp Earnings Call

March 3, 2026

Speaker #2: Q4, 2025 earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Speaker #2: To ask a question, simply press *1 on your telephone keypad. To withdraw your question, press *1 again. It is now my pleasure to turn the call over to CEO Jonathan Cohen.

Speaker #2: Please go ahead. Good morning, everyone. Welcome to the Oxford Square Capital Corp. Q4, 2025 earnings conference call. I'm joined today by Saul Rosenthal, our president; Bruce Rubin, our CFO; and Kevin Yonan, managing director and portfolio manager.

Jonathan H. Cohen: Good morning, everyone. Welcome to the Oxford Square Capital Corp Q4 2025 earnings conference call. I'm joined today by Sol Rosenthal, our President, Bruce Rubin, our CFO, and Kevin Yonan, Managing Director and Portfolio Manager. Bruce, could you open the call with a disclosure regarding forward-looking statements?

Jonathan Cohen: Good morning, everyone. Welcome to the Oxford Square Capital Corp Q4 2025 earnings conference call. I'm joined today by Sol Rosenthal, our President, Bruce Rubin, our CFO, and Kevin Yonan, Managing Director and Portfolio Manager. Bruce, could you open the call with a disclosure regarding forward-looking statements?

Speaker #2: Bruce, could you open the call with a disclosure regarding forward-looking statements? Of course, Jonathan. Today's conference call is being recorded, and an audio replay of the conference call will be available for 30 days.

Bruce L. Rubin: Of course, Jonathan. Today's conference call is being recorded. An audio replay of the conference 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 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.

Bruce Rubin: Of course, Jonathan. Today's conference call is being recorded. An audio replay of the conference 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 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.

Speaker #2: Replay information is included in our press release that was issued this morning. Please note that this call is a property of Oxford Square Capital Corp.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: We ask that you refer to most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections.

Speaker #2: 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.

Bruce L. Rubin: 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.

Bruce Rubin: 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.

Speaker #2: With that, I'll turn the presentation back to Jonathan. Thanks, Bruce. For the quarter ended December, Oxford Square's net investment income was approximately $5.4 million, or 7 cents per share, compared with approximately $5.6 million or 7 cents per share in the prior quarter.

Jonathan H. Cohen: Thanks, Bruce. For Q4 ended December, Oxford Square's net investment income was approximately $5.4 million or $0.07 per share, compared with approximately $5.6 million or $0.07 per share in the prior quarter. Our net asset value per share stood at $1.69 compared to a net asset value per share of $1.95 for the prior quarter. During the quarter, we distributed $0.105 per share to our common stock shareholders. For Q4, we recorded total investment income of approximately $10.4 million as compared to approximately $10.2 million in the prior quarter.

Jonathan Cohen: Thanks, Bruce. For Q4 ended December, Oxford Square's net investment income was approximately $5.4 million or $0.07 per share, compared with approximately $5.6 million or $0.07 per share in the prior quarter. Our net asset value per share stood at $1.69 compared to a net asset value per share of $1.95 for the prior quarter. During the quarter, we distributed $0.105 per share to our common stock shareholders. For Q4, we recorded total investment income of approximately $10.4 million as compared to approximately $10.2 million in the prior quarter.

Speaker #2: Our net asset value per share stood at $1.69, compared to a net asset value per share of $1.95 for the prior quarter. During the quarter, we distributed $10.5 per share to our common stock shareholders.

Speaker #2: For the fourth quarter, we recorded total investment income of approximately $10.4 million, as compared to approximately $10.2 million in the prior quarter. In the fourth quarter, we recorded combined net unrealized and realized losses on investments of approximately $18.3 million, or $0.22 per share, compared to combined net unrealized and realized losses on investments of approximately $7.5 million, or $0.09 per share, in the prior quarter.

Jonathan Cohen: In Q4, we recorded combined net unrealized and realized losses on investments of approximately $18.3 million or $0.22 per share, compared to combined net unrealized and realized losses on investments of approximately $7.5 million or $0.09 per share in the prior quarter. During Q4, our investment activity consisted of purchases of approximately $18 million and repayments of approximately $7.4 million. During Q4, we issued a total of approximately 4.3 million shares of our common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $7.9 million. On 26 February 2026, 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 2026.

Jonathan H. Cohen: In Q4, we recorded combined net unrealized and realized losses on investments of approximately $18.3 million or $0.22 per share, compared to combined net unrealized and realized losses on investments of approximately $7.5 million or $0.09 per share in the prior quarter. During Q4, our investment activity consisted of purchases of approximately $18 million and repayments of approximately $7.4 million. During Q4, we issued a total of approximately 4.3 million shares of our common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $7.9 million. On 26 February 2026, 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 2026.

Speaker #2: During the fourth quarter, our investment activity consisted of purchases of approximately $18 million and repayments of approximately $7.4 million. During the quarter ended December, we issued a total of approximately 4.3 million shares of our common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $7.9 million.

Speaker #2: On February 26, 2026, our board of directors declared monthly distributions of $3.5 per share for each of the months ending April, May, and June of 2026.

Jonathan H. Cohen: We note that 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 our Portfolio Manager, Kevin Yonon.

Jonathan Cohen: We note that 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 our Portfolio Manager, Kevin Yonon.

Speaker #2: We note that additional details regarding record payment date 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 Yonan.

Kevin P. Yonon: Thank you, Jonathan. During the Q ended 31 December, US loan market performance declined versus the prior Q. US loan prices, as defined by the Morningstar LSTA US Leveraged Loan Index, decreased slightly from 97.06% of par as of 30 September to 96.64% of par as of 31 December. According to LCD, during the Q, there was some pricing dispersion, with BB-rated loan prices decreasing 8 basis points, B-rated loan prices increasing 18 basis points, and CCC-rated loan prices decreasing 265 basis points on average. According to PitchBook LCD, the 12-month trailing default rate for the loan index decreased to 1.23% by principal amount at the end of the Q from 1.47% at the end of September.

Kevin Yonon: Thank you, Jonathan. During the Q ended 31 December, US loan market performance declined versus the prior Q. US loan prices, as defined by the Morningstar LSTA US Leveraged Loan Index, decreased slightly from 97.06% of par as of 30 September to 96.64% of par as of 31 December. According to LCD, during the Q, there was some pricing dispersion, with BB-rated loan prices decreasing 8 basis points, B-rated loan prices increasing 18 basis points, and CCC-rated loan prices decreasing 265 basis points on average. According to PitchBook LCD, the 12-month trailing default rate for the loan index decreased to 1.23% by principal amount at the end of the Q from 1.47% at the end of September.

Speaker #2: Thank you, Jonathan. During the quarter ended December 31, U.S. loan market performance declined versus the prior quarter. U.S. loan prices, as defined by the Morningstar LSTA U.S.

Speaker #2: Leverage Loan Index, decreased slightly from 97.06% of par as of September 30 to 96.64% of par as of December 31. According to LCD, during the quarter, there were some pricing dispersion.

Speaker #2: With BB-rated loan prices decreasing 8 basis points, B-rated loan prices increasing 18 basis points, and BBC-rated loan prices decreasing 265 basis points on average.

Speaker #2: According to PitchBook LCD, the 12-month trailing default rate for the loan index decreased to 1.23% by principal amount at the end of the quarter from 1.47% at the end of September.

Kevin Yonon: Additionally, the default rate, including various forms of liability management exercises, which are not captured in the cited default rate, remained at an elevated level of 3.35%. The distress ratio, defined as the percentage of loans with prices below 80% of par, ended the quarter at 4.34%, compared to 2.88% at the end of September. During the quarter ended 31 December 2025, US leverage loan primary market issuance, excluding amendments and repricing transactions, was $70.7 billion, representing a 27% decrease versus the quarter ended 31 December 2024. This was driven by lower refinancing and LBO activity, partly offset by higher M&A and dividend activity versus the prior year comparable quarter.

Kevin P. Yonon: Additionally, the default rate, including various forms of liability management exercises, which are not captured in the cited default rate, remained at an elevated level of 3.35%. The distress ratio, defined as the percentage of loans with prices below 80% of par, ended the quarter at 4.34%, compared to 2.88% at the end of September. During the quarter ended 31 December 2025, US leverage loan primary market issuance, excluding amendments and repricing transactions, was $70.7 billion, representing a 27% decrease versus the quarter ended 31 December 2024. This was driven by lower refinancing and LBO activity, partly offset by higher M&A and dividend activity versus the prior year comparable quarter.

Speaker #2: Additionally, the default rate, including various forms of liability management exercises, which are not

Speaker #1: Not captured in the cited default rate remained at an elevated level of 3.35% . The distressed ratio , defined as the percentage of loans with prices below 80% of par , ended the quarter at 4.34% , compared to 2.88% at the end of September .

Speaker #1: During the quarter ended December 31st , 2025 , US leveraged loan primary market issuance , excluding amendments and repricing transactions , was $70.7 billion , representing a 27% decrease versus the quarter ended December 31st , 2024 .

Speaker #1: This was driven by lower refinancing and LBO activity , partly offset by higher M&A and dividend activity versus the prior year . Comparable quarter .

Kevin Yonon: At the same time, US loan fund outflows, as measured by Lipper, were approximately $3.2 billion for the Q4 ended 31 December. We continue to focus on portfolio management strategies designed to maximize our long-term total return. 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.

Kevin P. Yonon: At the same time, US loan fund outflows, as measured by Lipper, were approximately $3.2 billion for the Q4 ended 31 December. We continue to focus on portfolio management strategies designed to maximize our long-term total return. 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.

Speaker #1: At the same time , US loan fund outflows as measured by Lipper were approximately $3.2 billion for the quarter ended December 31st . Continue to focus on portfolio management strategies designed to maximize our long term total return as a permanent capital vehicle .

Speaker #1: 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: Thank you, Kevin. Additional information about Oxford Square's Q4 performance has been posted to our website at www.oxfordsquarecapital.com. With that operator, we're happy to open the call up for any questions.

Jonathan H. Cohen: Thank you, Kevin. Additional information about Oxford Square's Q4 performance has been posted to our website at www.oxfordsquarecapital.com. With that operator, we're happy to open the call up for any questions.

Speaker #2: Thank you . Kevin . Additional information about Oxford Square's fourth quarter performance has been posted to our website at WW Oxford Square Capital Corp.

Speaker #2: And with that operator , we're happy to open the call up for any questions

Operator: As a reminder to ask a question, simply press star one on your telephone keypad. Our first question is from the line of Erik Zwick with B. Riley Securities. Please go ahead.

Speaker #3: As a reminder to ask a question , simply press star one on your telephone keypad And our first question is from the line of Eric Zweig with Lucid Capital Markets .

Speaker #3: Please go ahead .

Erik Zwick: Thanks. Good morning, all. Wanted to start with a question. You mentioned the $18 million of new investment purchases during the quarter. Curious if you can just add a little maybe detail into what you bought and what you're currently finding attractive in the market?

Speaker #4: Thanks . Good morning . All . I wanted to start with a question . You mentioned the $18 million of new investment purchases during the quarter .

Speaker #4: If you could just add a little , maybe detail into into what you bought and what you're currently finding attractive in the market

Kevin P. Yonon: Sure. Broadly, the investments were focused on first lien loans, generally B2B loans. Going forward into this quarter, I mean, obviously the primary market has certainly slowed down just given the volatility associated with certain things. I think we're definitely seeing opportunities in the primary and the secondary, just given the way the markets are trading.

Kevin Yonon: Sure. Broadly, the investments were focused on first lien loans, generally B2B loans. Going forward into this quarter, I mean, obviously the primary market has certainly slowed down just given the volatility associated with certain things. I think we're definitely seeing opportunities in the primary and the secondary, just given the way the markets are trading.

Speaker #1: Sure . So broadly , the investments were focused on first lien loans . Generally B2B loans going forward into this quarter . I mean , obviously , the primary market has certainly slowed down just given the volatility certain things .

Speaker #1: But I think we're definitely seeing opportunities in the primary . And the secondary , just given the way the markets are trading

Erik Zwick: Got it. Thanks. Maybe kind of at the back end of that question, if I dig in a little bit deeper. You mentioned there in the prepared comments the distress ratio, I don't have the exact decimal, 4 point something% up from 2 point something. So a market increase there. Wondering if from your perspective, is that reflective of some of the volatility we've seen and concerns in the software market? If not, what else is driving that? Two, has this, is this creating some of the opportunity for you to, you know, maybe find some good investment opportunities at lower prices today?

Speaker #4: Got it . Thanks . And maybe kind of the back end of that question , if I dig in a little bit deeper , you mentioned there in the prepared comments that ratio up to I don't have the exact decimal four point something percent , up from two point something .

Speaker #4: So a market increase there—wondering if, from your perspective, is that reflective of some of the volatility we've seen and concerns in the software market?

Speaker #4: If not, what else is driving that in Q2? Has this, is this creating some of the opportunity for you to maybe find some good investment opportunities at lower prices today?

Jonathan H. Cohen: The answer I think, Erik is yes to both questions. Certainly, the state of the software market right now, the software private credit market and the syndicated loan markets in that sector are reflecting real concern, no question about it. There's also, I think, a more general pushback against the growth in the private credit asset class that we've been seeing for the past several years. All of that is manifesting in somewhat more recently, wider US indicated corporate loan spreads and lower pricing for the LSTA index. The answer certainly, from our perspective anyways is yes.

Jonathan Cohen: The answer I think, Erik is yes to both questions. Certainly, the state of the software market right now, the software private credit market and the syndicated loan markets in that sector are reflecting real concern, no question about it. There's also, I think, a more general pushback against the growth in the private credit asset class that we've been seeing for the past several years. All of that is manifesting in somewhat more recently, wider US indicated corporate loan spreads and lower pricing for the LSTA index. The answer certainly, from our perspective anyways is yes.

Speaker #2: The answer , I think , Eric , is yes to both questions . Certainly the state of the software market right now , the software private credit market and the syndicated loan markets in that in that sector are reflecting real concern , no question about it .

Speaker #2: There's also , I think , a more general pushback against the growth in the private credit asset class that we've been seeing for the past several years .

Speaker #2: All of that is manifesting in somewhat more recently , wider US corporate loan spreads and lower pricing for the Lsta index . So the answer certainly from our perspective , anyways , is , is yes .

Erik Zwick: Thanks. That's helpful. Last one for me, wondering if you could just describe a little bit the unrealized appreciation in the quarter. What was the primary driver there?

Speaker #4: Thanks . That's helpful . And last one for me , wondering if you could just describe a little bit the unrealized appreciation in the quarter .

Speaker #4: What was the primary driver there?

Kevin P. Yonon: Hey, Erik. Yeah, that was a good portion of that was the CLO equity portion of the book. As you know, it had a very challenging year and quarter. That was mainly a markdown of the CLO equity portion of the book.

Kevin Yonon: Hey, Erik. Yeah, that was a good portion of that was the CLO equity portion of the book. As you know, it had a very challenging year and quarter. That was mainly a markdown of the CLO equity portion of the book.

Speaker #5: Hey , Eric . Yeah , that was a good portion of that . Was the CLO equity portion of the book . As you know , it had a very challenging year and quarter , and that was mainly a markdown of the the equity portion of the book .

Jonathan H. Cohen: Principally unrealized.

Jonathan Cohen: Principally unrealized.

Speaker #2: Principally unrealized .

Erik Zwick: Yep. That makes sense. Thanks, guys. That's all I had today. I appreciate it.

Speaker #4: Yep , yep . That makes sense . Thanks , guys . That's all I had today . I appreciate it .

Jonathan Cohen: Thank you, Eric, very much.

Jonathan H. Cohen: Thank you, Eric, very much.

Speaker #2: Thank you , much

Operator: With no further questions in queue, I will now hand the call back over to CEO, Jonathan Cohen.

Speaker #3: And with no further questions, thank you. I will now hand the call back over to CEO Jonathan Cohen.

Jonathan H. Cohen: Thank you very much. I'd like to thank everyone on the call now, listening to this call and also everyone listening to the replay for their interest in Oxford Square. We look forward to speaking to you again soon. Thanks very much.

Jonathan Cohen: Thank you very much. I'd like to thank everyone on the call now, listening to this call and also everyone listening to the replay for their interest in Oxford Square. We look forward to speaking to you again soon. Thanks very much.

Speaker #2: you very everyone on the , listening to this call . And also everyone listening to the replay for their interest in Oxford Square .

Speaker #2: We look forward to speaking to you again soon . Thanks very much

Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

Speaker #3: Thank you again for joining us today . This does conclude today's conference call . You may now disconnect

Q4 2025 Oxford Square Capital Corp Earnings Call

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