OXSQ - Oxford Square Capital: Increased Risk Level Without The Benefits

2024-05-19 07:33:34 ET

Summary

• Oxford Square Capital operates as a business development company that provides capital to middle market businesses.
• OXSQ includes collateralized loan obligations (CLOs) in its portfolio, which increases risk but also has the ability to amplify returns.
• OXSQ underperforms its peers in terms of total return and has a portfolio with concentration risk and a high percentage of non-accrual investments.
• NAV and NII per share have decreased over time, despite being in an ideal higher interest rate environment that many other peer BDCs have been able to capitalize on.

Overview

Oxford Square Capital ( OXSQ ) operates as a business development company that earns revenue by providing capital to middle market businesses that have revenues of less than $200M. What makes OXSQ a bit more unique compared to other BDCs that I have covered is that they have the inclusion of collateralized loan obligations as a part of their portfolio. While OXSQ shouldn't be compared with its brother closed end fund, Oxford Lane Capital ( OXLC ), the structure does look a bit similar in terms of holdings....

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