OXSQZ - Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended September 30 2023 and Declaration of Distributions on Common Stock for the Months Ending January 31 February 29 and March 31 2024

November, 07 2023 08:00 AM Oxford Square Capital Corp. 6.25% Notes due 2026

GREENWICH, Conn., Nov. 07, 2023 (GLOBE NEWSWIRE) -- Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQL) (NasdaqGS: OXSQZ) (NasdaqGS: OXSQG) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended September 30, 2023.

On November 2, 2023, our Board of Directors declared the following distributions on our common stock:

Month Ending

Record Date

Payment Date

Amount Per Share

January 31, 2024

January 17, 2024

January 31, 2024

$0.035

February 29, 2024

February 15, 2024

February 29, 2024

$0.035

March 31, 2024

March 15, 2024

March 29, 2024

$0.035

Net asset value (“NAV”) per share as of September 30, 2023 stood at $2.78, compared with a NAV per share on June 30, 2023 of $2.88.

Net investment income (“NII”) was approximately $6.4 million, or $0.11 per share, for the quarter ended September 30, 2023, compared with approximately $6.7 million, or $0.13 per share, for the quarter ended June 30, 2023.
Total investment income for the quarter ended September 30, 2023 amounted to approximately $13.0 million, compared with approximately $13.5 million for the quarter ended June 30, 2023.
- For the quarter ended September 30, 2023 we recorded investment income from our portfolio as follows:
  - $8.5 million from our debt investments;
  - $4.1 million from our CLO equity investments; and
  - $0.5 million from other income.
Our total expenses for the quarter ended September 30, 2023 were approximately $6.6 million, compared with total expenses of approximately $6.8 million for the quarter ended June 30, 2023.
As of September 30, 2023, the following metrics applied (note that none of these metrics represented a total return to shareholders):
- The weighted average yield of our debt investments was 13.1% at current cost, compared with 12.8% as of June 30, 2023;
- The weighted average effective yield of our CLO equity investments at current cost was 9.7%, compared with 9.2% as of June 30, 2023; and
- The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 20.1%, compared with 18.4% as of June 30, 2023.
For the quarter ended September 30, 2023, we recorded a net increase in net assets resulting from operations of approximately $6.7 million, consisting of:
- NII of approximately $6.4 million;
- Net realized losses of approximately $13.6 million; and
- Net unrealized appreciation of approximately $13.9 million.
During the third quarter of 2023, we did not make any new investments and received approximately $16.1 million from sales and repayments of investments.
Our weighted average credit rating was 2.2 based on total fair value and 2.5 based on total principal amount as of September 30, 2023, compared with a weighted average credit rating of 2.2 based on total fair value and 2.5 based on total principal amount as of June 30, 2023.
As of September 30, 2023, we had three debt investments (in one portfolio company) on non-accrual status, with a combined fair value of approximately $490,000. Also, as of September 30, 2023, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had an aggregate fair value of approximately $7.7 million.
For the quarter ended September 30, 2023, we issued a total of approximately 1.4 million shares of common stock pursuant to an “at-the-market” offering. After deducting the sales agent’s commissions and offering expenses, this resulted in net proceeds of approximately $4.4 million. The common stock issuance resulted in net accretion to shareholders of approximately $0.01 per share of NAV for the quarter. As of September 30, 2023, we had approximately 58.0 million shares of common stock outstanding.

We will hold a conference call to discuss third quarter results today, Tuesday, November 7 ^th , 2023 at 9:00 AM ET. The toll-free dial-in number is 1-833-470-1428, access code number 495860. There will be a recording available for 30 days. If you are interested in hearing the recording, please dial 1-866-813-9403. The replay pass-code number is 176763.

A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordsquarecapital.com .

OXFORD SQUARE CAPITAL CORP. STATEMENTS OF ASSETS AND LIABILITIES

September 30, 2023

December 31, 2022

(unaudited)


ASSETS







Non-affiliated/non-control investments (cost: $443,889,440 and $495,000,997, respectively)
$
277,807,167


$
310,347,097

Affiliated investments (cost: $16,836,822 and $16,836,822, respectively)

7,709,623



4,349,818

Cash and cash equivalents

12,410,909



9,019,164

Interest and distributions receivable

4,036,483



3,492,716

Other assets

1,031,723



785,640

Total assets
$
302,995,905


$
327,994,435

LIABILITIES







Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs of $36,343 and $405,657, respectively
$
14,333,882


$
63,964,568

Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $602,377 and $776,766, respectively

44,188,373



44,013,984

Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,865,397 and $2,153,762 respectively

78,634,603



78,346,238

Base Fee and Net Investment Income Incentive Fee payable to affiliate

2,360,018



1,323,573

Accrued interest payable

1,207,082



1,216,109

Accrued expenses

1,376,886



458,001

Total liabilities

142,100,844



189,322,473









NET ASSETS







Common stock, $0.01 par value, 100,000,000 shares authorized; 57,958,446 and 49,844,796 shares issued and outstanding, respectively

579,584



498,447

Capital in excess of par value

455,703,275



434,737,950

Total distributable earnings/(accumulated losses)

(295,387,798
)


(296,564,435
)
Total net assets

160,895,061



138,671,962

Total liabilities and net assets
$
302,995,905


$
327,994,435

Net asset value per common share
$
2.78


$
2.78

OXFORD SQUARE CAPITAL CORP. STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended September 30, 2023

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2023

Nine Months Ended September 30, 2022
INVESTMENT INCOME















From non-affiliated/non-control investments:















Interest income – debt investments
$
8,453,240


$
6,805,339


$
25,546,580


$
17,730,026

Income from securitization vehicles and investments

4,106,071



4,402,463



12,814,866



12,906,127

Other income

486,043



190,330



1,138,686



567,400

Total investment income from non-affiliated/non-control investments

13,045,354



11,398,132



39,500,132



31,203,553

Total investment income

13,045,354



11,398,132



39,500,132



31,203,553

EXPENSES















Interest expense

2,530,321



3,090,535



8,703,638



9,263,853

Base Fee

1,183,941



1,408,729



3,601,275



4,580,413

Professional fees

478,833



417,390



1,096,641



1,072,843

Compensation expense

205,348



234,517



662,472



689,350

General and administrative

458,328



438,943



1,261,650



1,195,174

Excise tax

573,686



252,172



873,686



252,172

Total expenses before incentive fees

5,430,457



5,842,286



16,199,362



17,053,805

Net Investment Income Incentive Fees

1,176,079



—



3,705,387



—

Total expenses

6,606,536



5,842,286



19,904,749



17,053,805

Net investment income

6,438,818



5,555,846



19,595,383



14,149,748

Net change in unrealized appreciation/(depreciation) on investments:















Non-Affiliate/non-control investments

14,613,632



(17,373,881
)


18,571,627



(77,909,718
)
Affiliated investments

(712,830
)


615,332



3,359,805



1,418,432

Total net change in unrealized appreciation/(depreciation) on investments

13,900,802



(16,758,549
)


21,931,432



(76,491,286
)
Net realized (losses)/gains:















Non-affiliated/non-control investments

(13,480,114
)


55,787



(16,811,422
)


(437,978
)
Extinguishment of debt

(166,670
)


—



(166,670
)


—

Total net realized (losses)/gains

(13,646,784
)


55,787



(16,978,092
)


(437,978
)
Net increase/(decrease) in net assets resulting from operations
$
6,692,836


$
(11,146,916
)

$
24,548,723


$
(62,779,516
)
Net increase in net assets resulting from net investment income per common share (Basic and Diluted):
$
0.11


$
0.11


$
0.37


$
0.28

Net increase/(decrease) in net assets resulting from operations per common share (Basic and Diluted):
$
0.12


$
(0.22
)

$
0.47


$
(1.26
)
Weighted average shares of common stock outstanding (Basic and Diluted):

56,764,866



49,773,782



52,413,834



49,737,216

Distributions per share
$
0.225


$
0.105


$
0.435


$
0.315

FINANCIAL HIGHLIGHTS – (unaudited)


Three Months Ended September 30, 2023

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2023

Nine Months Ended September 30, 2022
Per Share Data















Net asset value at beginning of period
$
2.88


$
3.67


$
2.78


$
4.92

Net investment income ⁽¹⁾

0.11



0.11



0.37



0.28

Net realized and unrealized gains/(losses) ⁽²⁾

0.01



(0.33
)


0.10



(1.54
)
Net increase/(decrease) in net asset value from operations

0.12



(0.22
)


0.47



(1.26
)
Distributions per share from net investment income

(0.23
)


(0.15
)


(0.44
)


(0.32
)
Tax return of capital distributions ⁽³⁾

—



0.04



—



—

Total distributions

(0.23
)


(0.11
)


(0.44
)


(0.32
)
Effect of shares issued, gross

0.01



—



(0.03
)


—

Net asset value at end of period
$
2.78


$
3.34


$
2.78


$
3.34

Per share market value at beginning of period
$
2.65


$
3.64


$
3.12


$
4.08

Per share market value at end of period
$
3.01


$
3.01


$
3.01


$
3.01

Total return based on Market Value ⁽⁴⁾

22.17
%


(14.79
)%


10.99
%


(19.90
)%
Total return based on Net Asset Value ⁽⁵⁾

4.34
%


(6.13
)%


15.65
%


(25.71
)%
Shares outstanding at end of period

57,958,446



49,800,274



57,958,446



49,800,274

















Ratios/Supplemental Data ⁽⁸⁾















Net assets at end of period (000’s)
$
160,895


$
166,548


$
160,895


$
166,548

Average net assets (000’s)
$
160,397


$
174,670


$
148,132


$
206,324

Ratio of expenses to average net assets ⁽⁶⁾

15.40
%


12.95
%


17.72
%


10.98
%
Ratio of net investment income to average net assets ⁽⁶⁾

17.13
%


13.16
%


17.83
%


9.18
%
Portfolio turnover rate ⁽⁷⁾

—
%


3.53
%


2.64
%


16.42
%

____________

(1)
Represents per share net investment income for the period, based upon weighted average shares outstanding.
(2)
Net realized and unrealized gains/(losses) include rounding adjustments to reconcile change in net asset value per share.
(3)
Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. The amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. tax reporting purposes.
(4)
Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan, excluding any discounts. Total return is not annualized.
(5)
Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. Total return is not annualized.
(6)
Ratios for the three and nine months ended September 30, 2023 are annualized and include non-recurring expenses, including excise tax of 0.36% and 0.59% of average net assets, respectively, which are not annualized.
(7)
Portfolio turnover rate is calculated using the lesser of the year-to-date cash investment sales and debt repayments or year-to-date cash investment purchases over the average of the total investments at fair value.
(8)
The following table provides supplemental performance ratios (annualized) measured for the three and nine months ended September 30, 2023 and 2022:


Three Months Ended September 30, 2023
Three Months Ended September 30, 2022
Nine Months Ended September 30, 2023
Nine Months Ended September 30, 2022
Ratio of expenses to average net assets:




Operating expenses before incentive fees
12.47%
12.95%
14.38%
10.98%
Net investment income incentive fees
2.93%
—%
3.34%
—%
Ratio of expenses, excluding interest expense to average net assets
9.09%
5.87%
9.89%
4.99%

About Oxford Square Capital Corp.

Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

Forward-Looking Statements

This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.

Contact:
Bruce Rubin
203-983-5280

Company Name:	Oxford Square Capital Corp. 6.25% Notes due 2026
Stock Symbol:	OXSQZ
Market:	NYSE
Website:	oxfordsquarecapital.com

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