Oxford Square Capital Q2 2026 Earnings Report

Oxford Square Capital EPS Results

• Actual EPS: $0.05
• Consensus EPS: $0.04
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Oxford Square Capital Revenue Results

• Actual Revenue: $9.40 million
• Expected Revenue: $8.32 million
• Beat/Miss: Beat by +$1.08 million
• YoY Revenue Growth: N/A

Oxford Square Capital Announcement Details

• Quarter: Q2 2026
• Date: 7/31/2026
• Time: Before Market Opens
• Conference Call Date: Friday, July 31, 2026
• 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 Q2 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Net investment income rose to $5.1 million, or $0.05 per share, but remained below the $0.105 quarterly distribution; NAV declined to $1.29 per share from $1.32.
• Positive Sentiment: The company invested $19.9 million entirely in secondary-market CLO equity, with cash-on-cash and forward effective yields in the low-20% range.
• Positive Sentiment: Investment losses narrowed substantially to approximately $1.1 million from $29.7 million in the prior quarter, while a restructured non-accrual position now includes an accruing first-lien term loan and common equity.
• Positive Sentiment: The broader leveraged-loan market improved, with loan prices increasing, the trailing default rate falling to 0.97%, and the distress ratio declining to 6.87% during the quarter.

Presentation

[Operator]

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oxford Square Capital Corp second quarter 2026 earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, press star one on your telephone keypad. To withdraw your question, press star one again. It is now my pleasure to turn the call over to Jonathan Cohen, CEO. Please go ahead.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Thank you. Good morning, everyone. Welcome to the Oxford Square Capital Corp second quarter 2026 earnings conference call. I am joined today by Saul Rosenthal, our president, Bruce Rubin, our chief financial officer, and Kevin Yonon, managing director and portfolio manager. Bruce, could you open the call with the disclosure regarding forward-looking statements?

[Bruce L. 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 as issued this morning. Please note that this call is the property of Oxford Square Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure in this morning's press release regarding forward-looking information.

[Bruce L. Rubin, CFO at Oxford Square Capital Corp]

Today's conference call includes forward-looking statements and projections that reflect the current company's views with respect to, among other things, future events and financial performance. We ask that you refer to our 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. To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com. With that, I will turn the call back to Jonathan.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Thanks, Bruce. For the quarter ended June 30th, Oxford Square's net investment income was approximately $5.1 million, or $0.05 per share, compared with approximately $4.1 million in the prior quarter. Our net asset value per share stood at $1.29, compared to a net asset value per share of $1.32 for the prior quarter. During the quarter, we distributed $0.105 per share to our common stock shareholders.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

For the second quarter, we recorded total investment income of approximately $9.4 million, compared to approximately $8.9 million in the prior quarter. In the second quarter, we recorded combined net unrealized and realized losses on investments of approximately $1.1 million, or $0.01 per share, compared to combined net unrealized and unrealized losses on investments of approximately $29.7 million, or $0.34 per share for the prior quarter.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

During the second quarter, our investment activity consisted of purchases of approximately $19.9 million and repayments of approximately $500,000. During the quarter ended June, we issued a total of approximately 11.3 million shares of our common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $17.8 million.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

On July 29th, our board of directors declared monthly distributions of $0.035 per share for each of the months ending October, November, and December of 2026. We note that 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 ended June 30th, U.S. loan market performance improved versus the prior quarter. U.S. loan prices, as defined by the Morningstar LSTA U.S. Leveraged Loan Index, increased from 94.63% of par as of March 31st to 94.96% of par as of June 30th.

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

According to LCD, during the quarter, there was some pricing dispersion, with BB-rated loan prices increasing 32 basis points, B-rated loan prices increasing 42 basis points, and CCC-rated loan prices increasing 6 basis points on average. According to PitchBook LCD, the 12-month trailing default rate for the loan index decreased to 0.97% by principal amount at the end of the quarter from 1.44% at the end of March.

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

Additionally, the default rate, including various forms of liability management exercises, which are not captured in the aforementioned default rate, remained at an elevated level of 2.77%, but declined from 3.48% as of March 31st. The distress ratio, defined as the percentage of loans with prices below 80% of par, ended the quarter at 6.87%, compared to 7.23% at the end of March.

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

During the quarter ended June 30th, 2026, U.S. leverage loan primary market issuance, excluding amendments and repricing transactions, was $101.8 billion, representing a 33% increase versus the quarter ended June 30th, 2025. This was driven by higher refinancing and M&A activity, partly offset by lower LBO and dividend activity versus the prior year comparable quarter. At the same time, U.S. loan fund inflows, as measured by Lipper, were approximately $1 billion for the quarter ended June 30th.

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

We continue to focus on portfolio management strategies designed to maximize our long-term total return, as a permanent capital vehicle, we historically have been able to take a longer-term view towards our investment strategy. With that, I will turn the call back over to Jonathan.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Thanks very much, Kevin. Additional information about Oxford Square's second quarter performance has been posted to our website at oxfordsquarecapital.com. With that, operator, we're happy to open the call up for any questions.

[Operator]

Once again, to ask a question, press star one on your telephone keypad. Our first question comes from the line of Eric Zwick with Lucid Capital Markets. Please go ahead.

[Eric Zwick, Analyst at Lucid Capital Markets]

Thank you. Good morning. I wanted to start with-

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Good morning, Eric.

[Eric Zwick, Analyst at Lucid Capital Markets]

Hey, John. With the $19.9 million of purchases you referenced in the quarter, curious if you could provide any characteristics on those investments in terms of security type, yield or spread, types of industries, anything additional there would be great.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Sure. Hey, Eric, that was actually all CLO equity for this quarter. The cash-on-cash was probably low 20s. The forward effective yield is also in that range. Yeah, that was all CLO equity for this quarter.

[Bruce L. Rubin, CFO at Oxford Square Capital Corp]

That's consistent, Eric, with our current thesis of CLO equity tranche investments representing what we believe is a fairly compelling cash-on-cash opportunity, particularly for purchases made in the secondary market. I believe that all of those purchases, yes, all of those purchases, Eric, were made in the secondary market.

[Eric Zwick, Analyst at Lucid Capital Markets]

Excellent. Thanks for the color there. In terms of the unrealized gains that were recorded in the quarter, was this primarily a rebound from last quarter's marks, or were there some other factors that contributed to the appreciation in value in the quarter?

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

No, it was principally that, just coming off of those levels.

[Eric Zwick, Analyst at Lucid Capital Markets]

Okay. Just looking at the makeup of the non-accruals or the one debt position that I guess was on there last quarter but now gone. I think the press release mentioned you did not make any sales, was that resolved or that's obviously back to non-accrual now, or how should I interpret that? What kind of transpired there?

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

Sure. This is Kevin Yonon. That one position went through a restructuring transaction which closed during the quarter. There's now a new manageable capital structure of which we hold the new first lien term loan as well as some common equity. That new first lien term loan is on accrual.

[Eric Zwick, Analyst at Lucid Capital Markets]

Okay. Did you record any additional losses or gains a result of that restructuring, or where you had it marked last quarter, that ended up being pretty accurate?

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

Mark was consistent with the prior quarter.

[Eric Zwick, Analyst at Lucid Capital Markets]

Excellent. Thanks. It was good to see total investment income up quarter-over-quarter, yet the NII per share still below the dividend level. Just curious how you're looking at the portfolio. What levers do you have at your disposal to drive that NII higher? Over what time frame would you expect it to take to get that earnings power back to a full dividend coverage again?

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Sure. We don't, as you know, Eric, make forward projections or forward-looking performance estimates. We are, I think, broadly optimistic about the capital that we're deploying presently, including the capital that we just deployed in this last quarter. We'll certainly keep you updated.

[Eric Zwick, Analyst at Lucid Capital Markets]

No, it's good. Thanks for taking my questions this morning, guys.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Thank you, Eric. Thank you.

[Operator]

Again, to ask a question, press star one on your telephone keypad. With no further questions in the queue, I will now turn the call back to Jonathan Cohen, CEO.

[Jonathan H. Cohen, CEO at Oxford Square Capital Corp]

Thank you very much, operator. We'd like to thank everybody on this call and everybody listening to the replay for their continued interest in Oxford Square, and we look forward to speaking to you again soon. Thanks very much.

[Operator]

Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

Participants

Executives

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

Analysts

• Eric Zwick, Analyst at Lucid Capital Markets