2024-02-12 20:54:36 ET
Summary
- Oaktree Specialty Lending Corp. had a disappointing quarter, with new non-accruals impacting net income and NAV.
- OCSL's portfolio is primarily focused on secured loans, with overweights in the software and healthcare sectors.
- The company's net new investments were robust, but the portfolio weighted average yield fell due to non-accruals and credit spread compression.
- We downsized our allocation to the stock prior to the earnings release and would look to add back once a sizable valuation discount to the sector opens up.
In this article, we catch up on the latest quarterly results of Oaktree Specialty Lending Corp ( OCSL ). OCSL had a disappointing quarter, though it still eked out a positive total NAV return. A combination of rising debt service costs and idiosyncratic issues drove a number of new non-accruals, which were a key headwind to both the NAV and net income....
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Oaktree Specialty Lending: A Challenging Q4 As High Debt Servicing Costs Drive Non-Accruals