Oxford Square Capital Corp. Q4 FY2025 earnings call

• CEO Jonathan Cohen began the call. CFO Bruce Rubin provided forward-looking statement disclosure. Jonathan shared details on net investment income, net asset value, distributions, total investment income, and investment activity. Kevin Yonon discussed U.S. loan market performance including loan prices, default rates, distress ratio, primary market issuance, and loan fund outflows, and emphasized focus on portfolio management strategies. Jonathan mentioned additional info posted to the website.

For the quarter ended December, net investment income was approximately $5.4 million or $0.07 per share compared with $5.6 million or $0.07 per share in the prior quarter. Net asset value per share stood at $1.69 compared to $1.95 for the prior quarter. Distributed $0.105 per share. Total investment income was approximately $10.4 million compared to approximately $10.2 million in the prior quarter. Combined net unrealized and realized losses on investments were approximately $18.3 million or $0.22 per share compared to $7.5 million or $0.09 per share in the prior quarter. Investment activity: purchases of approximately $18 million and repayments of approximately $7.4 million. Issued approximately 4.3 million shares of common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $7.9 million. Board declared monthly distributions of $0.035 per share for months ending April, May and June of 2026. U.S. loan market performance: loan prices decreased, default rate changed, distress ratio increased, primary market issuance down 27% vs prior year comparable quarter, and U.S. loan fund outflows of approximately $3.2 billion for the quarter ended December 31.

On February 26, 2026, Board of Directors declared monthly distributions of $0.035 per share for each of the months ending April, May and June of 2026.

Actual results may differ materially from projections due to factors in SEC filings. Software market state, private credit market conditions, and pushback against private credit asset class growth are risks. Distressed ratio increase and market volatility are related risks.

Q: Curious if could add detail into what was bought and what's currently attractive in the market.

A: Investments were focused on first lien loans, generally B2B loans, and seeing opportunities in primary and secondary markets given market trading.

Q: Distressed ratio increase, reflective of software market volatility and creating investment opportunities?

A: Yes, software market and general pushback against private credit asset class growth are drivers, and it's creating opportunities.

Q: Describe primary driver of unrealized depreciation in the quarter?

A: A good portion was the CLO equity portion of the book, which had a challenging year-end quarter with markdowns