Oxford Square Capital Q1 2025 Earnings Report

Oxford Square Capital EPS Results

• Actual EPS: $0.09
• Consensus EPS: $0.08
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.11

Oxford Square Capital Revenue Results

• Actual Revenue: $10.16 million
• Expected Revenue: $9.90 million
• Beat/Miss: Beat by +$261.00 thousand
• YoY Revenue Growth: N/A

Oxford Square Capital Announcement Details

• Quarter: Q1 2025
• Date: 4/25/2025
• Time: Before Market Opens
• Conference Call Date: Friday, April 25, 2025
• Conference Call Time: 9:00AM ET

Oxford Square Capital (NASDAQ:OXSQ) (NASDAQ: OXSQ) is a closed-end, externally managed business development company that seeks to generate current income and, to a lesser extent, capital appreciation. The company invests primarily in the debt and equity tranches of collateralized loan obligations (CLOs), which are generally backed by portfolios of senior secured loans to middle-market companies.

Through its investment activities, Oxford Square Capital provides exposure to structured credit and middle-market corporate lending. Its portfolio may also include other corporate debt securities and investments designed to produce income. The company’s investment adviser is Oxford Square Management, LLC, an affiliate of Oxford Funds, LLC.

Oxford Square Capital was formerly known as TICC Capital Corp. and adopted its current name in 2017. The company is headquartered in Greenwich, Connecticut, and its investments are primarily linked to U.S. middle-market companies and credit markets. Its strategy and portfolio are overseen by an executive management team and board of directors in accordance with the regulatory framework governing business development companies.

Oxford Square Capital Q1 2025 Earnings Call Transcript

Key Takeaways

• For the quarter, Oxford Square reported net investment income of $6.1 million or $0.09 per share, essentially flat to the prior quarter.
• The company’s NAV per share declined to $2.09 from $2.30, driven by combined net realized and unrealized losses of $14.2 million (or $0.20 per share).
• Oxford Square sold 1.3 million new common shares in an aftermarket offering, generating net proceeds of $3.5 million to support its capital base.
• The Board declared monthly distributions of $0.35 per share for each of July, August, and September 2025.
• Portfolio commentary noted weakening U.S. loan prices (LSTA index down to 96.31% of par) and elevated adjusted default (4.31%) and distress (3.21%) ratios.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Oxford Square Capital Corp First Quarter 2025 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, April 25, 2025. I would now like to turn the conference over to Mr. Jonathan Cohen. Please go ahead.

[Jonathan Cohen, CEO at Oxford Square Capital Corp]

Good morning. Welcome to the Oxford Square Capital Corp First Quarter 2025 earnings conference call. I'm joined today by Bruce Rubin, our Chief Financial Officer, and Kevin Yonon, Managing Director and Portfolio Manager. Bruce, could you open the call with a disclosure regarding forward-looking statements?

[Bruce Rubin, CFO at Oxford Square Capital Corp]

Sure, Jonathan. Today's conference call is being recorded. An audio replay of the conference call will be available for 30 days. Replay information is included in our press release that was issued this morning. Please note that this call is the property of Oxford Square Capital Corp., and the unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customer disclosure in this morning's press release regarding forward-looking information. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to the most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward-looking statements unless required to do so by law.

[Bruce Rubin, CFO at Oxford Square Capital Corp]

To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com. With that, I'll turn the presentation back to Jonathan.

[Jonathan Cohen, CEO at Oxford Square Capital Corp]

Thanks, Bruce. For the quarter-end of March 31, Oxford Square's net investment income was approximately $6.1 million or $0.09 per share, compared with approximately $6 million or $0.09 per share for the prior quarter. Our net asset value per share stood at $2.09, compared to a net asset value per share of $2.30 for the prior quarter. During the quarter, we distributed $0.105 per share to our common stock shareholders. For the first quarter, we recorded total investment income of approximately $10.2 million, which was approximately the same as in the prior quarter. During the first quarter, we recorded combined net unrealized and realized losses on investments of approximately $14.2 million or $0.20 per share, compared to combined net unrealized and realized losses on investments of approximately $2.7 million or $0.04 per share for the prior quarter.

[Jonathan Cohen, CEO at Oxford Square Capital Corp]

During the first quarter, our investment activity consisted of purchases of approximately $16 million, sales of approximately $10.7 million, and repayments of approximately $8.7 million. During the quarter-end of March, we issued a total of approximately 1.3 million shares of our common stock pursuant to an after-market offering, resulting in net proceeds of approximately $3.5 million. On April 22, 2025, our Board of Directors declared monthly distributions of $0.035 per share for each of the months ending July, August, and September of 2025. Additional details regarding record and payment date information can be found in our press release that was issued this morning. With that, I'll turn the call over to our portfolio manager, Kevin Yonon. Kevin?

[Kevin Yonon, Managing Director and Portfolio Manager at Oxford Square Capital Corp]

Thank you, Jonathan. During the quarter-end of March 31, U.S. loan market performance weakened versus the prior quarter. U.S. loan prices, as defined by the Morningstar LSTA U.S. Leveraged Loan Index, decreased from 97.33% par as of December 31 to 96.31% par as of March 31. According to LCD, during the quarter, there was some pricing dispersion, with BB-rated loan prices decreasing 82 basis points, B-rated loan prices decreasing 134 basis points, and CCC-rated loan prices decreasing 211 basis points on average. While the 12-month trailing default rate for the loan index decreased to 0.82% by principal amount at the end of the quarter from 0.91% at the end of December, we note that the default rate, including various forms of liability management exercises, which are not captured in this cited default rate, remained at an elevated level of 4.31%.

[Kevin Yonon, Managing Director and Portfolio Manager at Oxford Square Capital Corp]

Additionally, the distress ratio, defined as the percentage of loans with prices below 80% par, ended the quarter at 3.21% compared to 3.02% at the end of 2024. During the quarter-end of March 31, 2025, U.S. leveraged loan primary market issuance, excluding amendments and repricing transactions, was $141.1 billion, representing a 2% decrease versus the quarter-end of March 31, 2024. This was driven by lower opportunistic activity, including refinancings and the funding of dividends, partly offset by higher non-refinancing issuance, including M&A and LBO activity, versus the prior year comparable quarter. At the same time, U.S. loans fund inflows, as measured by Lipper, were approximately $1.94 billion for the quarter-end of March 31st. We continue to focus on portfolio management strategies designed to maximize our long-term total return, and as a permanent capital vehicle, we historically have been able to take a longer-term view towards our investment strategy.

[Kevin Yonon, Managing Director and Portfolio Manager at Oxford Square Capital Corp]

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

[Jonathan Cohen, CEO at Oxford Square Capital Corp]

Thanks very much, Kevin. We note that additional information about Oxford Square's first quarter performance has been posted to our website at oxfordsquarecapital.com, and with that, Operator, we can open the calls for any questions.

[Operator]

Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press the star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for our first question. There are no further questions, or there are no questions at this time. I would now like to turn the call back over to Mr. Jonathan Cohen for his closing remarks.

[Jonathan Cohen, CEO at Oxford Square Capital Corp]

Thank you, Operator. Thanks very much to everybody who listened and participated in this call. We look forward to speaking with you again soon. Thanks very much.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Jonathan Cohen, CEO
• Kevin Yonon, Managing Director and Portfolio Manager
• Bruce Rubin, CFO