OXSQZ - Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended June 30 2023

August, 10 2023 08:00 AM Oxford Square Capital Corp. 6.25% Notes due 2026

GREENWICH, Conn., Aug. 10, 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 June 30, 2023.

On August 3, 2023, our Board of Directors declared the following distributions on our common stock:

Month Ending

Record Date

Payment Date

Amount Per Share

September 30, 2023*

September 15, 2023

September 29, 2023

0.120

October 31, 2023

October 17, 2023

October 31, 2023

0.035

November 30, 2023

November 16, 2023

November 30, 2023

0.035

December 31, 2023

December 15, 2023

December 29, 2023

0.035

* Special Distribution.

Net asset value (“NAV”) per share as of June 30, 2023 stood at $2.88, compared with a NAV per share on March 31, 2023 of $2.80.

Net investment income (“NII”) was approximately $6.7 million, or $0.13 per share, for the quarter ended June 30, 2023, compared with approximately $6.5 million, or $0.13 per share, for the quarter ended March 31, 2023.
Total investment income for the quarter ended June 30, 2023 amounted to approximately $13.5 million, compared with approximately $12.9 million for the quarter ended March 31, 2023.
- For the quarter ended June 30, 2023 we recorded investment income from our portfolio as follows:
  - $8.8 million from our debt investments; and
  - $4.7 million from our CLO equity investments and other income.
Our total expenses for the quarter ended June 30, 2023 were approximately $6.8 million, compared with total expenses of approximately $6.5 million for the quarter ended March 31, 2023.
As of June 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 12.8% at current cost, compared with 12.4% as of March 31, 2023;
- The weighted average effective yield of our CLO equity investments at current cost was 9.2%, compared with 9.1% as of March 31, 2023; and
- The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 18.4%, compared with 15.3% as of March 31, 2023.
For the quarter ended June 30, 2023, we recorded a net increase in net assets resulting from operations of approximately $11.6 million, consisting of:
- NII of approximately $6.7 million;
- Net realized losses of approximately $3.3 million; and
- Net unrealized appreciation of approximately $8.3 million.

During the second quarter of 2023, we did not make any new investments and received approximately $14.3 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 June 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 March 31, 2023.
As of June 30, 2023, we had three debt investments (in one portfolio company) on non-accrual status, with a combined fair value of approximately $450,000. Also, as of June 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 $8.4 million.

We will hold a conference call to discuss second quarter results today, Thursday, August 10 ^th , 2023 at 9:00 AM ET. The toll-free dial-in number is 1-833-470-1428, access code number 351878. 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 209713.

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



June 30, 2023

December 31, 2022


(unaudited)


ASSETS








Non-affiliated/non-control investments (cost: $478,419,709 and $495,000,997, respectively)

$
297,723,804


$
310,347,097

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


8,422,453



4,349,818

Cash and cash equivalents


43,029,280



9,019,164

Interest and distributions receivable


4,122,925



3,492,716

Other assets


960,242



785,640

Total assets

$
354,258,704


$
327,994,435

LIABILITIES








Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs of $244,640 and $405,657, respectively

$
64,125,585


$
63,964,568

Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $661,146 and $776,766, respectively


44,129,604



44,013,984

Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,962,575 and $2,153,762 respectively


78,537,425



78,346,238

Base Fee and Net Investment Income Incentive Fee payable to affiliate


2,557,012



1,323,573

Accrued interest payable


1,216,109



1,216,109

Accrued expenses


1,280,810



458,001

Total liabilities


191,846,545



189,322,473










NET ASSETS








Common stock, $0.01 par value, 100,000,000 shares authorized; 56,395,751 and 49,844,796 shares issued and outstanding, respectively


563,957



498,447

Capital in excess of par value


451,031,685



434,737,950

Total distributable earnings/(accumulated losses)


(289,183,483
)


(296,564,435
)
Total net assets


162,412,159



138,671,962

Total liabilities and net assets

$
354,258,704


$
327,994,435

Net asset value per common share

$
2.88


$
2.78

OXFORD SQUARE CAPITAL CORP.
STATEMENTS OF OPERATIONS – (unaudited)



Three Months Ended June 30, 2023

Three Months Ended June 30, 2022

Six Months Ended June 30, 2023

Six Months Ended June 30, 2022
INVESTMENT INCOME
















From non-affiliated/non-control investments:
















Interest income – debt investments

$
8,799,180


$
5,674,538


$
17,093,340


$
10,924,687

Income from securitization vehicles and investments


4,329,300



4,062,469



8,708,795



8,503,664

Other income


384,500



202,544



652,643



377,070

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


13,512,980



9,939,551



26,454,778



19,805,421

Total investment income


13,512,980



9,939,551



26,454,778



19,805,421

EXPENSES
















Interest expense


3,087,951



3,087,952



6,173,317



6,173,318

Base Fee


1,257,688



1,565,181



2,417,334



3,171,684

Professional fees


281,928



310,931



617,808



655,453

Compensation expense


190,159



219,830



457,124



454,833

General and administrative


730,149



412,129



1,103,322



756,231

Total expenses before incentive fees


5,547,875



5,596,023



10,768,905



11,211,519

Net Investment Income Incentive Fees


1,299,324



—



2,529,308



—

Total expenses


6,847,199



5,596,023



13,298,213



11,211,519

Net investment income


6,665,781



4,343,528



13,156,565



8,593,902

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
















Non-Affiliate/non-control investments


4,900,785



(46,845,141
)


3,957,995



(60,535,837
)
Affiliated investments


3,352,146



602,253



4,072,635



803,100

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


8,252,931



(46,242,888
)


8,030,630



(59,732,737
)
Net realized losses:
















Non-affiliated/non-control investments


(3,331,308
)


(1,536,051
)


(3,331,308
)


(493,765
)
Total net realized losses


(3,331,308
)


(1,536,051
)


(3,331,308
)


(493,765
)
Net increase/(decrease) in net assets resulting from operations

$
11,587,404


$
(43,435,411
)

$
17,855,887


$
(51,632,600
)
Net increase in net assets resulting from net investment income per common share (Basic and Diluted):

$
0.13


$
0.09


$
0.26


$
0.17

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

$
0.23


$
(0.87
)

$
0.36


$
(1.04
)
Weighted average shares of common stock outstanding (Basic and Diluted):


50,542,374



49,736,300



50,202,259



49,718,630

Distributions per share

$
0.105


$
0.105


$
0.210


$
0.210

FINANCIAL HIGHLIGHTS – (unaudited)



Three Months Ended June 30, 2023

Three Months Ended June 30, 2022

Six Months Ended June 30, 2023

Six Months Ended June 30, 2022
Per Share Data
















Net asset value at beginning of period

$
2.80


$
4.65


$
2.78


$
4.92

Net investment income ⁽¹⁾


0.13



0.09



0.26



0.17

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


0.10



(0.96
)


0.09



(1.21
)
Net increase/(decrease) in net asset value from operations


0.23



(0.87
)


0.35



(1.04
)
Distributions per share from net investment income


(0.11
)


(0.09
)


(0.21
)


(0.17
)
Tax return of capital distributions ⁽³⁾


—



(0.02
)


—



(0.04
)
Total distributions


(0.11
)


(0.11
)


(0.21
)


(0.21
)
Effect of shares issued


(0.04
)


—



(0.04
)


—

Net asset value at end of period

$
2.88


$
3.67


$
2.88


$
3.67

Per share market value at beginning of period

$
3.16


$
4.19


$
3.12


$
4.08

Per share market value at end of period

$
2.65


$
3.64


$
2.65


$
3.64

Total return based on Market Value ⁽⁴⁾


(13.00
)%


(10.75
)%


(9.15
)%


(6.00
)%
Total return based on Net Asset Value ⁽⁵⁾


6.61
%


(18.82
)%


11.15
%


(21.14
)%
Shares outstanding at end of period


56,395,751



49,761,360



56,395,751



49,761,360


















Ratios/Supplemental Data ⁽⁸⁾
















Net assets at end of period (000’s)

$
162,412


$
182,793


$
162,412


$
182,793

Average net assets (000’s)

$
144,439


$
207,048


$
141,852


$
222,414

Ratio of expenses to average net assets ⁽⁶⁾


18.96
%


10.81
%


18.75
%


10.08
%
Ratio of net investment income to average net assets ⁽⁶⁾


18.46
%


8.39
%


18.55
%


7.73
%
Portfolio turnover rate ⁽⁷⁾


1.48
%


1.79
%


2.60
%


12.19
%

__________

(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)      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 six months ended June 30, 2023 and 2022:



Three Months Ended June 30, 2023

Three Months Ended June 30, 2022

Six Months Ended June 30, 2023

Six Months Ended June 30, 2022
Ratio of expenses to average net assets:












Operating expenses before incentive fees

15.36
%

10.81
%

15.18
%

10.08
%
Net investment income incentive fees

3.60
%

—
%

3.57
%

—
%
Ratio of expenses, excluding interest expense












to average net assets

10.41
%

4.85
%

10.05
%

4.53
%

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

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