Oaktree Specialty Lending ( NASDAQ: OCSL ) posted better-than-expected top line results for Q1 , with a total investment income of $79.1M (the consensus estimate was $73.78M).
Adjusted total investment income was $77.4M, up sequentally from $68M in Q4 of the previous fiscal year.
The company attributed growth to higher interest income from the impact of rising base rates, wider spreads on new originations and a larger investment portfolio.
Oaktree recorded $250.3M in new investment commitments and $104.4M in proceeds from prepayments, exits, other paydowns and sales. The weighted average yield on new debt investments was 13.1%.
Net asset value (NAV) per share dropped sequentially from $20.38 as of end-September to $19.63 as of December 31, 2022. Oaktree said the decline was due to a $0.42 per share special distribution paid during the quarter and unrealized depreciation related to credit spread widening on debt investments.
Oaktree had total debt outstanding of $1.51B as of end-2022, with a net debt to equity ratio of 1.24x after adjusting for cash and cash equivalents. It reported $17.4M in unrestricted cash and cash equivalents and $340M in undrawn capacity under existing credit facilities.
The company raised dividend by 2% to $0.55.
CEO Armen Panossian said: "We produced excellent results to start the fiscal year, with adjusted net investment income of $0.61 per share, up 10% from the prior quarter, supported by robust origination activity, which drove our annualized return on equity to just under 12%."
"Subsequent to the end of the quarter, we closed our previously announced merger with Oaktree Strategic Income II. Following closing, we now have more than $3.3 billion of assets and significantly more scale and financial flexibility to leverage as we pursue compelling new investments in the year ahead."
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Oaktree Specialty beats analyst expectations for Q1