Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, everyone and welcome to the Oxford Square Capital Fourth Quarter 2022 Earnings Conference Call. My name is Bruno and I will be the operator of today. [Operator Instructions] I will now hand over to your host, Jonathan Cohen, CEO. Please go ahead.

Jonathan Cohen

Thanks very much. welcome earnings Oxford conference and fourth Capital everyone XXXX quarter call. morning, to Square the Corp Good I am Yonon, joined Bruce and Rubin, today Manager. by Saul Chief Portfolio Officer; Rosenthal, Financial and Kevin our Director our Managing our President;

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

Bruce Rubin

that the days. release Today’s is note Replay morning. included our press of information was Jonathan. will issued be Please An audio being is call Sure, call recorded. available that this conference replay call conference this for XX is is the press Square morning’s customary Oxford direct Capital Corp. this call the Any of this property of At release please unauthorized regarding in strictly point, to in rebroadcast any this forward-looking attention form information. your disclosure in prohibited.

materially forward-looking current could factors and the recent our other includes reflect do filings We cause financial to among to, to We SEC the visit statements our at views required actual important respect unless future that SEC our results to copies To forward-looking statements that company’s of to that events things, our from those not obtain and please most with ask performance. undertake do www.oxfordsquarecapital.com. projections latest in Today’s by update law. conference refer projections. so filings, with you call for these indicated website differ

that, With Jonathan. to I will turn back the presentation

Jonathan Cohen

Thanks, Bruce.

$X.XX and asset prior asset and compares net net $X.XX income per Square’s This quarter. share a approximately For investment approximately our or per at Oxford the per of ended value investment million income of was the share XX, net or net share December quarter $X.X million share per for to $X.XX $X.X $X.XX. value stood

CLO investment to in for investment offset quarter, as income by decrease we interest was approximately income by $XX.X a increase our our driven total That investments. in reported portfolio, income the million For equity approximately of an loan increase million income from in from partially quarter. the principally fourth total $XX.X prior compared

share quarter, net $XX.X In depreciation on approximately compared per the million of investments approximately unrealized realized the for In of on fourth to compared $X.XX investments quarter. prior to recorded we net $XX.X depreciation investments of quarter, on reported per the gains unrealized $XXX,XXX we or approximately for $XX,XXX share approximately the realized $X.XX quarter. or gains million prior fourth of

$X.X During the sales approximately and fourth quarter, of of of million approximately repayments investment consisted purchases our activity $XXX,XXX. and

of $X of the April, for share December each have monthly our per XXXX. approximately May ending March we $X.XXX June Board million. of As XX, months of and Directors XX, and cash cash XXXX, of equivalents declared On distributions of

that information details in record issued Additional our found morning. date press regarding and release was be payment can this

Manager, turn I’ll call to Yonon, to discuss market. our Kevin loan the the that, over With Portfolio

Kevin Yonon

Jonathan. you, Thank

or quarter end XX.XX% the the of September to BB-rated with decreasing XX loan were LCD, significant principal loan quality related dispersion Leveraged was of by quarter, amount XX, as points to XX. and U.S. XX.XX% par the loan XX.XX% defined pricing volatile. December Index as there CCC-rated at X.XX% to Morningstar basis market from November XXX According The X.XX%, or XX par dropping During prices, of basis basis at Loan X.X% of increasing rate September Loan loan XXXX. prices as as before the during credit B-rated the end decreased X.XX% LSTA to XX-month the default to U.S. LSTA XX trailing of the Morningstar prices XXX for by increasing or points of loan the on ended quarter December points prices average. X.XX% increased from of of Leveraged U.S. XXXX, U.S. Index par

at the at the price with below ended quarter of September approximately XX% of a X.X% the loans percentage of end par, X% XXXX. distress defined ratio, Additionally, compared as the to

XXXX. ended a representing quarter XXXX, XX.X% December the decline versus During XX, issuance quarter the billion, ended primary market $XX approximately XX, was December

XX.X% For were outflows, At measured XXXX, for U.S. December calendar declined primary same approximately issuance approximately lower loan refinancing, This and the Lipper, M&A as XX, versus and market time, $XX.X by quarter $X XXXX. billion was fund by billion XXXX, XXXX. the LBO ended activity. driven for

investment continue to long-term vehicle, capital been strategy. strategies and take designed towards focus to our have a We a return, on longer-term maximize portfolio able historically permanent to management we total view as our

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

Jonathan Cohen

Kevin. Thanks,

Oxford Additional to posted our information website oxfordsquarecapital.com. quarter been Square’s has about performance at fourth

With that, any for operator, we’re questions. to up call the open happy

Operator

from ahead. question our your open. first Mickey, line Ladenburg. We is Instructions] now [Operator Mickey Schleien from go have Please

Mickey Schleien

everyone. the are economic morning, and given of companies about of half us give portfolio second-lien uncertainty terms in the Good Jonathan, and outlook, of they performing the size the these with ratios? revenues sense investments how coverage EBITDA? Yes. you their in terms a interest the of And could loan in

Jonathan Cohen

Sure, Mickey.

hundreds with $XX of dollars of and in multiple companies of in typically, revenues, north are significant EBITDA or million a of several targeting millions We that. of number typically excess

bilateral you So, know, engaging, not we are lending. in as

small compared That’s situated. are we We targeting what very we are to where companies not historically. have targeted

Mickey Schleien

year? of fourth how in in terms interest performing their do coverage, you the quarter and And more importantly, perhaps, them see this

Kevin Yonon

This Yonon. Mickey. is Kevin Sure,

companies. is cash increasing, been for rate Interest our our interest coverage loans of indicated all have far, the far, amortization the – So, thus to to companies rates maintained our has coverage, support required are they continue generate results expense LIBOR and although haven’t – cash interest. obviously, are versus able of interest that interest cash portfolio Thus both and SOFR. majority interest vast we or and are received outstanding higher QX while portfolio floating

Mickey Schleien

That’s helpful. Okay.

the pose reinvestment refinancing of have the attractive periods half be broader CLOs, ending could year, since In not current CLOs terms the this may which them market in challenge their market. in the of almost a

yourselves on you pressure the the given So, portfolio’s might risk managing how do that that yield? see produce

Joe Kupka

the some deals or the for in definitely Hey broader we that concern There is to ones Joe Kupka. outstanding. remain market. do able some just refi be is a to We Mickey, select reset this still choose expect flexibility. that’s to Yes,

to the some period. get ability So, still those post-reinvestment deals do that can’t have reinvestment extended

So, that pressure. the definitely helps relieve some of to

it be bag extensions calls, mixed of what outstanding just and a refis some So, remain terms will while. in some and for a some

Mickey Schleien

yield distributions to And the in quarter. rates? in the terms was this portfolio, of bit CLO equity have fourth that first of And quarter the down of much of year? and cash CLO due How the one-month it Okay. quite between trend a cash trended was three-month the how spread during

Joe Kupka

was That definitely three-month Yes. basis. the of one-month, what was occurring that majority

available for that a starting projecting curves QX to are compress year. remainder that and the to and improve just the continue seen have We bit publicly throughout in the based then on forward of

Mickey Schleien

How It’s most in did likely CLOs January this of those of distributions look October year? their to relative your of year. last that made

Joe Kupka

Brian, do want to you that one? take

Brian Aleksa

Joe Sure. modeling Hi October Mickey, in them. as distributions. from But this is slightly the Brian flat down they we see were Aleksa. we up those to roughly picking do mentioned, Yes, were from April

Mickey Schleien

for morning. your Okay. time. That’s it for Thanks this me

Jonathan Cohen

very much. Mickey Thanks

Operator

currently no Jonathan for I like to back questions. ahead. We Please further would final go hand have remarks. over to

Jonathan Cohen

to everybody to morning replay. would look the Thank to the very you you speaking soon. listening call and for very to listening We Thanks much. to I this forward thank like much.

Operator

joining. you today’s call. this Thank Ladies and concludes for gentlemen,

You you. disconnect lines. your Thank may now

Oxford Square Capital (OXSQ) 21 Mar 232022 Q4 Earnings call transcript