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Oaktree Specialty Lending Corporation Announces Third Fiscal Quarter 2020 Financial Results and Declares Increased Distribution of $0.105 Per Share
LOS ANGELES, CA, August 10, 2020 - Oaktree Specialty Lending Corporation (NASDAQ: OCSL) (Oaktree Specialty Lending or the Company), a specialty finance company, today announced its financial results for the fiscal quarter ended June 30, 2020.
Financial Highlights for the Quarter Ended June 30, 2020
Total investment income was $34.4 million ($0.24 per share) for the third fiscal quarter of 2020, up from $34.2 million ($0.24 per share) for the second fiscal quarter of 2020, primarily driven by a larger average investment portfolio and higher yields on new originations, partially offset by lower LIBOR and lower original issuance discount (OID) income.
GAAP net investment income was $16.8 million ($0.12 per share) for the third fiscal quarter of 2020, down from $22.8 million ($0.16 per share) for the second fiscal quarter of 2020, primarily due to a reversal of previously accrued Part II incentive fees.
Adjusted net investment income was $16.8 million ($0.12 per share) for the third fiscal quarter of 2020, up from $16.2 million ($0.12 per share) for the second fiscal quarter of 2020, primarily driven by interest expense savings from the recent unsecured bond issuance and lower LIBOR, as well as higher investment income and lower professional fees and general and administrative expenses. This was partially offset by higher base management fees resulting from a larger investment portfolio.
Net asset value (NAV) per share was $6.09 as of June 30, 2020, up 14% from $5.34 as of March 31, 2020. The increase in NAV was primarily attributable to unrealized gains resulting from price increases on liquid debt investments and the impact of tighter credit spreads on private debt investment valuations following the improvement in broader credit market conditions. Also contributing to the NAV increase were unrealized gains on recent opportunistic investments made in the June quarter.
Originated $260.5 million of new investment commitments and received $127.8 million of proceeds from prepayments, exits, other paydowns and sales during the quarter ended June 30, 2020. Of these new investment commitments, 67.8% were first lien loans, 3.2% were second lien loans and 29.0% were subordinated debt investments. The weighted average yield on new investments was 10.5%.
Total debt outstanding was $766.8 million as of June 30, 2020. The total debt to equity ratio was 0.89x, and the net debt to equity ratio was 0.83x, after adjusting for cash and cash equivalents.
Liquidity as of June 30, 2020 was composed of $50.7 million of unrestricted cash and cash equivalents and $233.2 million of undrawn capacity under the credit facility (subject to borrowing base and other limitations). Unfunded investment commitments were $154.6 million, with approximately $75.9 million that can be drawn immediately as the remaining amount is subject to certain milestones that must be met by portfolio companies.
A quarterly cash distribution was declared of $0.105 per share, an 11% increase from the Companys prior quarter distribution. The distribution will be paid in cash and is payable September 30, 2020 to stockholders of record on September 15, 2020.
Armen Panossian, Chief Executive Officer and Chief Investment Officer, said, OCSL delivered strong results in the third quarter, highlighted by solid earnings and portfolio performance. We leveraged Oaktrees opportunistic credit platform to originate $261 million of new investments at attractive yields during the quarter. NAV rebounded by 14 percent, reflecting the improvement in credit market conditions, and overall, credit quality remained stable amid the uncertain economic environment. As a result of the growth of our investment portfolio and optimistic outlook on new investment opportunities, our Board of Directors announced an 11 percent increase to our September dividend to $0.105 per share. We believe OCSL is poised to deliver continued strong risk-adjusted returns to our shareholders.
The following information was filed by Oaktree Specialty Lending Corp (OCSL) on Monday, August 10, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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