Press Release

Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended September 30, 2021 and Declaration of Distributions of Common Stock for the Months Ending January 31, February 28, and March 31, 2022

Company Release - 10/26/2021

GREENWICH, Conn., Oct. 26, 2021 (GLOBE NEWSWIRE) -- Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQL) (NasdaqGS: OXSQZ) (Nasdaq: OXSQG) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended September 30, 2021.

  • As of September 30, 2021, net asset value (“NAV”) per share was $5.03, compared with the NAV per share of $4.91 at the prior quarter end.
    • For the quarter ended September 30, 2021, we recorded GAAP net investment income of approximately $4.0 million, or $0.08 per share.
    • We recorded net unrealized appreciation of approximately $5.6 million and net realized gains on investments of approximately $1.7 million for the quarter ended September 30, 2021, compared to net unrealized appreciation of approximately $2.5 million and net realized gains on investments of approximately $1.2 million for the quarter ended June 30, 2021.
    • In total, we had a net increase in net assets from operations of approximately $11.3 million, or $0.23 per share, for the quarter ended September 30, 2021, compared with a net increase in net assets from operations of approximately $6.5 million, or $0.13 per share, for the quarter ended June 30, 2021.
  • Total investment income for the quarter ended September 30, 2021 amounted to approximately $9.8 million, compared with approximately $7.8 million for the quarter ended June 30, 2021. For the quarter ended September 30, 2021, the components of investment income were as follows:
    • $4.5 million from our debt investments
    • $5.1 million from our CLO equity investments
    • $200,000 from other income
  • Our total expenses for the quarter ended September 30, 2021 were approximately $5.8 million, compared with total expenses of approximately $5.1 million for the second quarter of 2021.
  • During the third quarter of 2021, we made investments of approximately $23.1 million, received $5.7 million from repayments and amortization payments on our debt investments, and recorded no proceeds from sales of investments.
  • As of September 30, 2021, the following metrics applied (note that none of these values represents a total return to shareholders):
    • The weighted average yield of our debt investments was 7.5% at current cost, compared with 7.6% as of June 30, 2021.
    • The weighted average effective yield of our CLO equity investments at current cost was 9.1%, compared with 10.4% as of June 30, 2021.
    • The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 19.6%, compared with 18.8% as of June 30, 2021.
  • Our weighted average credit rating was 2.0 based on total fair value and 2.3 based on total principal amount as of September 30, 2021, compared to 2.1 based on total fair value and 2.3 based on total principal amount as of June 30, 2021.
  • As of September 30, 2021, we had three debt investments on non-accrual status, with a combined fair value of $3.7 million. Also, as of September 30, 2021, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had a fair value of approximately $74,000.
  • On October 22, 2021, our Board of Directors declared the following distributions on our common stock:
 Month Ending Record Date Payment Date Amount Per Share
January 31, 2022 January 17, 2022 January 31, 2022 $0.035
February 28, 2022 February 14, 2022 February 28, 2022 $0.035
March 31, 2022 March 17, 2022 March 31, 2022 $0.035

We will hold a conference call to discuss third quarter results today, Tuesday, October 26th, 2021 at 9:00 AM ET. The toll-free dial-in number is 1-844-200-6205, access code number 468257. There will be a recording available for 30 days. If you are interested in hearing the recording, please dial 1-866-813-9403. The replay pass-code number is 106418.

A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordsquarecapital.com.

OXFORD SQUARE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

    September 30,
2021
  December 31,
2020
    (unaudited)    
ASSETS                
Non-affiliated/non-control investments (cost: $494,745,225 and $407,547,351, respectively)   $ 421,013,356     $ 294,674,000  
Affiliated investments (cost: $16,836,822 and $16,836,822, respectively)     73,571        
Cash equivalents     19,541,086       59,137,284  
Interest and distributions receivable     3,278,404       2,299,259  
Securities sold not settled           950,000  
Other assets     788,168       597,238  
Total assets   $ 444,694,585     $ 357,657,781  
LIABILITIES                
Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs of $812,204 and $1,055,065, respectively   $ 63,558,021     $ 63,315,160  
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $1,068,693 and $1,243,082, respectively     43,722,057       43,547,668  
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $2,636,484 and $0, respectively     77,863,516        
Securities purchased not settled     6,489,812       23,156,556  
Base Fee and Net Investment Income Incentive Fee payable to affiliate     1,774,727       1,159,703  
Accrued interest payable     1,216,109       478,191  
Accrued expenses     425,627       573,977  
Total liabilities     195,049,869       132,231,255  
COMMITMENTS AND CONTINGENCIES (Note 13)                
NET ASSETS                
Common stock, $0.01 par value, 100,000,000 shares authorized; 49,655,275 and 49,589,607 shares issued and outstanding, respectively     496,552       495,895  
Capital in excess of par value     452,938,551       452,650,210  
Total distributable earnings/(accumulated losses)     (203,790,387 )     (227,719,579 )
Total net assets     249,644,716       225,426,526  
Total liabilities and net assets   $ 444,694,585     $ 357,657,781  
Net asset value per common share   $ 5.03     $ 4.55  
                 

OXFORD SQUARE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

    Three Months
Ended
September 30,
2021
  Three Months
Ended
September 30,
2020
  Nine Months
Ended
September 30,
2021
  Nine Months
Ended
September 30,
2020
INVESTMENT INCOME                              
From non-affiliated/non-control investments:                              
Interest income – debt investments   $ 4,527,514   $ 4,492,647     $ 12,351,940     $ 15,020,284  
Income from securitization vehicles and investments     5,071,854     3,568,516       13,849,299       11,545,539  
Other income     198,263     163,976       798,088       738,625  
Total investment income from non-affiliated/non-control investments     9,797,631     8,225,139       26,999,327       27,304,448  
Total investment income     9,797,631     8,225,139       26,999,327       27,304,448  
EXPENSES                              
Interest expense     3,090,535     1,908,206       7,405,358       5,988,116  
Base Fee     1,774,728     1,123,450       4,598,462       3,365,332  
Professional fees     349,626     321,059       1,604,845       1,228,794  
Compensation expense     185,855     185,659       551,452       554,288  
General and administrative     414,919     416,486       1,258,609       1,195,166  
Total expenses before incentive fees     5,815,663     3,954,860       15,418,726       12,331,696  
Net Investment Income Incentive Fees                      
Total expenses     5,815,663     3,954,860       15,418,726       12,331,696  
Net investment income     3,981,968     4,270,279       11,580,601       14,972,752  
Net change in unrealized appreciation/(depreciation) on investments:                              
Non-Affiliate/non-control investments     5,558,192     21,580,813       39,141,482       (42,698,711 )
Affiliated investments     73,571     (634,089 )     73,571       (2,816,790 )
Total net change in unrealized appreciation/(depreciation) on investments     5,631,763     20,946,724       39,215,053       (45,515,501 )
Net realized gains/(losses):                              
Non-affiliated/non-control investments     1,651,408     (4,368,235 )     (11,239,243 )     (7,405,716 )
Extinguishment of debt                     (5,211 )
Total net realized gains/(losses)     1,651,408     (4,368,235 )     (11,239,243 )     (7,410,927 )
Net increase/(decrease) in net assets resulting from operations   $ 11,265,139   $ 20,848,768     $ 39,556,411     $ (37,953,676 )
Net increase in net assets resulting from net investment income per common share (Basic and Diluted):   $ 0.08   $ 0.09     $ 0.23     $ 0.30  
Net increase/(decrease) in net assets resulting from operations per common share (Basic and Diluted):   $ 0.23   $ 0.42     $ 0.80     $ (0.77 )
Weighted average shares of common stock outstanding (Basic and Diluted):     49,634,535     49,589,607       49,610,734       49,439,478  
Distributions per share   $ 0.105   $ 0.105     $ 0.315     $ 0.507  
                               

FINANCIAL HIGHLIGHTS – (unaudited)

    Three Months Ended
September 30,
2021
  Three Months Ended
September 30,
2020
  Nine Months Ended
September 30,
2021
  Nine Months Ended
September 30,
2020
Per Share Data                                
Net asset value at beginning of period   $ 4.91     $ 3.54     $ 4.55     $ 5.12  
Net investment income(1)     0.08       0.09       0.23       0.30  
Net realized and unrealized (losses)/gains(2)     0.15       0.33       0.57       (1.06 )
Net (decrease)/increase in net asset value from operations     0.23       0.42       0.80       (0.76 )
Distributions per share from net investment income     (0.09 )     (0.09 )     (0.26 )     (0.42 )
Tax return of capital distributions(3)     (0.02 )     (0.02 )     (0.06 )     (0.09 )
Total distributions     (0.11 )     (0.11 )     (0.32 )     (0.51 )
Effect of shares issued/repurchased, gross                        
Net asset value at end of period   $ 5.03     $ 3.85     $ 5.03     $ 3.85  
Per share market value at beginning of period   $ 4.91     $ 2.80     $ 3.05     $ 5.44  
Per share market value at end of period   $ 4.05     $ 2.47     $ 4.05     $ 2.47  
Total return based on Market Value(4)     (15.52 )%     (8.22 )%     42.66 %     (46.71 )%
Total return based on Net Asset Value(5)     4.58 %     11.72 %     17.42 %     (14.90 )%
Shares outstanding at end of period     49,655,275       49,589,607       49,655,275       49,589,607  
                                 
Ratios/Supplemental Data ( 8)                                
Net assets at end of period (000’s)   $ 249,645     $ 190,968     $ 249,645     $ 190,968  
Average net assets (000’s)   $ 246,554     $ 183,148     $ 241,062     $ 186,744  
Ratio of expenses to average net assets(6)     9.44 %     8.64 %     8.53 %     8.80 %
Ratio of net investment income to average net assets(6)     6.46 %     9.33 %     6.41 %     10.69 %
Portfolio turnover rate(7)     1.39 %     3.22 %     8.20 %     15.71 %
                                 

__________

(1) Represents per share net investment income for the period, based upon weighted average shares outstanding.
(2) Net realized and unrealized gains/(losses) include rounding adjustments to reconcile change in net asset value per share.
(3) Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. The amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. tax reporting purposes.
(4) Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan, excluding any discounts. Total return is not annualized.
(5) Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. Total return is not annualized.
(6) Annualized.
(7) Portfolio turnover rate is calculated using the lesser of the year-to-date cash investment sales and debt repayments or year-to-date cash investment purchases over the average of the total investments at fair value.
(8) The following table provides supplemental performance ratios (annualized) measured for the three and nine months ended September 30, 2021 and 2020:

    Three Months
Ended
September 30,
2021
  Three Months
Ended
September 30,
2020
  Nine Months
Ended
September 30,
2021
  Nine Months
Ended
September 30,
2020
Ratio of expenses to average net assets:                        
Operating expenses before incentive fees   9.44 %   8.64 %   8.53 %   8.80 %
Net investment income incentive fees   %   %   %   %
Ratio of expenses, excluding interest expense to average net assets   4.42 %   4.47 %   4.43 %   4.53 %
                         

About Oxford Square Capital Corp.

Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

Forward-Looking Statements

This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and significant market volatility on our business, our portfolio companies, our industry and the global economy.  Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.

Contact:
Bruce Rubin
203-983-5280


Source: Oxford Square Capital Corp.