Oxford Lane Capital Corp. Q3 FY2026 earnings call

• Net asset value per share decreased from $19.19 to $15.51 as of December 31, 2025.
• Board declared monthly common stock distributions of $0.20 per share for April, May, and June 2026.
• U.S. loan market performance declined: loan price index decreased from 97.06% to 96.64%, median CLO equity NAV dropped, CLO new issuance totaled ~$55 billion, reset/refinancing activity was ~$74 billion in Q4 2025.
• Invested ~$97.2 million in CLO equity and warehouses, led/participated in over 10 resets/refinancings, lengthened weighted average reinvestment period of CLO equity portfolio from May 2029 to August 2029.

As of December 31, 2025, net asset value per share was $15.51 compared to $19.19 prior quarter. For the quarter ended December, GAAP total investment income was approximately $117.8 million, a decrease of ~$10.5 million from prior quarter. GAAP total investment income included ~$114.3 million from CLO equity and CLO warehouse investments and ~$3.5 million from CLO debt and other income. GAAP net investment income was ~$71.8 million or $0.74 per share, core net investment income was ~$108.9 million or $1.12 per share. Net unrealized depreciation on investments was ~$305.4 million, net realized losses ~$7 million. Net decrease in net assets from operations was ~$240.7 million or $2.47 per share. CLO debt investments weighted average yield at current cost was 17.3% (down from 17.4%), CLO equity investments weighted average effective yield was 13.8% (down from 14.6%), cash distribution yield was 19% (down from 19.4%). Additional CLO investments of ~$97.2 million, received ~$85.5 million from sales/repayments.

• Board reduced distributions to have additional capital for CLO equity and junior debt investments.
• Intend to continue opportunistic and unconstrained CLO investment strategy across U.S. CLO equity, debt, and warehouses.
• Potential for special dividend based on maintaining compliance with RIC test under tax code, with consideration based on fiscal year ending March.

• U.S. loan market performance decline negatively impacted CLO equity values.
• Uncertainty regarding the impact of captive CLO funds on CLO equity returns for third-party investors like Oxford Lane.

Q: Mickey Schleien asked about the share of the primary market represented by captive CLO funds and their impact on CLO equity returns for third-party investors like Oxford Lane.

A: Joseph Kupka said it's hard to say specifically, but 2025 was more balanced and expected majority issuance in 2026 to be from captive funds due to compressed arbitrage. Jonathan Cohen added it's hard to predict the impact on future CLO equity returns for third-party investors.

Q: Erik Zwick inquired about the dividend cut, secondary market opportunities, potential special dividend, and resets/refis in the portfolio.

A: Jonathan Cohen stated they see more opportunities in the secondary market due to supply-demand imbalance. Potential for special dividend based on RIC test compliance. Joseph Kupka mentioned 2025 was active in resets/refis, with 2026 expected to be active with many portfolio elements rolling off non-call starting in July.