Oxford Lane Capital (OXLC) 26 Jan 242024 Q3 Earnings call transcript

Good morning or good afternoon, all, and welcome to the Oxford Lane Capital Corp. Announces Net Asset Value and Selected Financial Results for the Third Fiscal Quarter Call.

My name is Adam, and I'll be your operator for today. [Operator Instructions] I will now hand the floor to CEO, Jonathan Cohen, to begin.

So Jonathan, please go ahead when you're ready.

much. very Thanks everyone. Good morning, the Oxford to Capital Lane Welcome Corp.

Call. Fiscal XXXX Conference Quarter Earnings Third

Director. Bruce, the Saul I'm forward-looking and Financial Managing Chief joined statements. Joe you Rosenthal, our President; today by our Bruce disclosure with call a Rubin, our Kupka, could regarding open Officer;

call information was Sure, the is our release call that included earlier replay conference for this available Today's being recorded. in be Jonathan. audio XX issued morning. An is of will days. Replay press

of that Oxford call Capital any this the call broadcast note form prohibited. property unauthorized the Please and Lane is strictly Corp. of in this is

point, company's recent your in regarding disclosure forward to important this views those among to to, current so projections includes future to you release indicated refer to in factors Today's information. ask our to the do We and conference call forward-looking statements with can by and respect update our At differ cause customary We that for unless that with please things, financial direct results required these performance. not looking forward-looking do other actual press most the this events the undertake law. SEC from projections. reflect morning's statements materially attention that filings

defined this to release non-GAAP During in measures. use we call, and will terms earnings the also refer

www.oxfordlanecapital.com. For please to release refer at GAAP, our definitions website reconciliations posted and to our on earnings

I'll back presentation to the With turn that, Jonathan.

asset stood On value as Thank $X.XX share September share XXXX, of to net per asset of you, Bruce. value a per $X.XX December our XX, compared at net XX.

approximately from million CLO increase consisted and million total approximately from income. CLO December, of from investments GAAP of The quarter's income and other $XX.X an GAAP $X.X our representing warehouse equity income the approximately ended investment quarter. recorded of quarter the $XX.X investments, CLO our we prior For approximately debt and from $X.X million investment million, total

XX. compared ended for per GAAP $XX.X Oxford to the or $X.XX million approximately $X.XX September quarter Lane net reported million the or approximately per for December investment share $XX.X ended share of income quarter

was per with investment million $XX.X per the for core $X.XX $XX.X December, September. compared $X.XX million quarter share or ended approximately Our the or approximately net quarter for income share ended

appreciation we quarter quarter. and share losses the or operations ended $X.XX assets net December, from a approximately approximately in the per unrealized $XX.X had $X.XX million net recorded $X.X per resulting investments of net $X.X of million or on third net net realized share. We fiscal of approximately increase For for million

of total December following of none return As represented metrics We that the to a XX, shareholders. note these metrics applied.

at our the we CLO The we from CLO XX. cash debt effective The September September September weighted distribution average as yield average based respective equity up The XX.X% received yield average equity are CLO XX.X% as entitled XX. cost weighted yield on at investments at our investments We current of the from receive equity on our period of XX.X%, CLO investments XX% was cost were of of each that yields calculated cash current cost was XX.X%, was our of XX. distribution of which XX%, to cash from investments current or as distributions at note down down end. weighted

approximately XX.X offering, resulting During a aftermarket million we net million. quarter of common an in to issued total $XX.X stock the December, approximately of of ended pursuant shares our proceeds

million, additional approximately approximately repayments. During and investments we CLO we sales $XXX.X million and $XX.X of made December, the quarter ended received from

of share distributions On declared Directors monthly our per each January and May the of $X.XX months for of XXXX. April, of XX, ending stock June Board

Kupka. Joe? our to I'll turn that, Managing With over Joe the call Director,

Jonathan. Thanks,

net XX.XX% Leveraged September U.S. XXXX, Loan as of an Morningstar quarter. improved defined from by the loan prices, U.S. to median quarter During increase market U.S. the [ approximate ] versus December CLO as X-point performance XX, ended increase LSTA the loan in led equity of Index prior prices in values. XX.XX% XX U.S. to XX. December U.S. as asset [ loan The ] increased

CLO spreads the to within XXX principal pools to to end in rate the at increased marginally X.X% loan points at observed index from by last quarter the September. weighted loan compared loan the of end basis average XX-month portfolios XXX our basis Despite the quarter. we for trailing X.X% prices, default amount Additionally, of increase the points increased

price of percentage compared the September. of X.X% XX% quarter the ratio, at ended the distress approximately Additionally, a end par, of below loans defined at as with to the X.X%

approximately $XXX billion totaled $XXX the $X XXXX prior XXXX. quarter issuance trailed in of billion increase CLO in billion from issuance issuance the new of of $XX billion, an The during quarter. the

However, CLO which improve through the have going and new should new arbitrage issue liabilities to tighten continued issuance forward. year,

continued active Lane to Oxford be the quarter. during

investment quarter, While this market activity issue most debt of place issue our added the and CLO quarter. the warehouse new took new X we secondary during CLO equity new investment, X in X

Our investment to And weighted investment investment the unconstrained warehouses during vehicle, we utilize in our longer-term Oxford a been maximize as historically the current strategy. able CLO a opportunistic an portfolio. long-term to reinvestment to of and across equity lengthen the In environment, trading debt CLO take our to continue and we total strategy strategy market to was and relative U.S. intend Lane's engage have value permanent period quarter as equity average towards look view to return. capital we

turn I'll over to the back Jonathan. call that, With

Thanks, Joe.

to Oxford about uploaded Additional quarter our been at third performance website www.oxfordlanecapital.com. has Lane's information

And happy open any with for we're up operator, that, the to call questions.

from comes [Operator from Schleien Instructions] Ladenburg. first our today And question Mickey

remarks, I the your in in continue arbitrage offset decline are that and for prepared in order to spreads spreads, what loan thereby compressing are Jonathan, the expectations -- liability which How trend this protecting think are debt compressing. to CLO leverage also that you year? mentioned the

the will. and which of obviously note, to arbitrage CLO robustness turn really as a terms a we those would like macro they outlook that's tranches, in quality of whether of you have And pricing have insight new forward Mickey. happen, particular debt the factor. rightly into view, I We see don't no forward to mean a things more calendar but of in as therefore, the for the issue feeds

I the what terms CLO for If what And of . your investments Okay. to their now in portfolios? beyond in those ability you of follow are controlled reinvestment are the period that a investments expectations tightening. have can up then, spreads are position? those that called proportion are

already NAVs We've Sure. the just tightening taking that rising advantage process, of and liabilities. begun

starting CLO. and it kind to case some by we're take to basis we call depending of a status current kind reset when going of case. can have to discussions, on We're look the So case-by-case of those the deals,

try get your there's Obviously, the something a this be in regarding post going done. to market first as the question, to pull push of reinvestment CLOs lot and

we'll reset we bound, I we first take call. kind want of in think be So of but when gives to what the range market terms us

last question, sort And And the recovery rate my to rate assumption in understand. decline your using that I in estimated impacted what how average the -- yields? are you portfolio has of of assumption? that recoveries calculate the those

the range in I it's that in themselves. and of think those figures on, we're individual case, calculating don't in publicly. we dependent turn But any I portfolio Mickey. probabilities structure historically collateral underlying at disclosed the are as likelihoods, of the mean, the we're pools some a range. looking have a indentures compositions those and of cases, possibilities Sure,

a allow sort profiles. very we fits a of that if CLO calculations got hope array different decisions that as isn't profile. have range a it calculation to make We've So of wide good single of every we us around

Howlett Matt from comes from Securities. question next The B. Riley

This Michael Matt. ] for is [ Schafer on

Curious you looks bit cash [indiscernible] a could to like if What flow half. trend diversion down there? date? the detail over little core that

Yes, sure.

the a lot CLO in for additions mechanisms of just to out turned combination particular, the in payer so hard its to kind So we of pay. with improving had the next project a [indiscernible] quarter -- diversions off environment. large at diversion, that It's started self-curing through market

generally We But in quarter-over-quarter. of quantum do of we down as don't diversion half the you terms about were say, that.

further questions. Cohen, I I And turn Jonathan back call will show now CEO. over no to the

to interest who their to to you much. in We everyone of Thanks thank I'd listening for replay Well, this you and the look participated call forward very very Wonderful. on speaking the call everyone soon. and again their thank like who's participation. much.

This Thank much your for attendance. very concludes you today's call.

may disconnect now your lines. You