Press Release

Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended December 31, 2021 and Declaration of Distributions on Common Stock for the Months Ending April 30, May 31, and June 30, 2022

Company Release - 3/3/2022

GREENWICH, Conn., March 03, 2022 (GLOBE NEWSWIRE) -- Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQL) (NasdaqGS: OXSQZ) (NasdaqGS: OXSQG) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended December 31, 2021.

  • On March 1, 2022, our Board of Directors declared the following distributions on our common stock:
  Month Ending Record Date Payment Date Amount Per Share
  April 30, 2022 April 15, 2022 April 29, 2022 $0.035
  May 31, 2022 May 17, 2022 May 31, 2022 $0.035
  June 30, 2022 June 16, 2022 June 30, 2022 $0.035
  • Net asset value (“NAV”) per share as of December 31, 2021 stood at $4.92, compared with a NAV per share on September 30, 2021 of $5.03.
  • Net investment income (“NII”), calculated in accordance with U.S. generally accepted accounting principles, was approximately $4.5 million, or $0.09 per share, for the quarter ended December 31, 2021, compared with approximately $4.0 million, or $0.08 per share, for the quarter ended September 30, 2021.
  • Total investment income for the quarter ended December 31, 2021 amounted to approximately $10.2 million, compared with approximately $9.8 million for the quarter ended September 30, 2021.
    • For the quarter ended December 31, 2021 we recorded investment income from our portfolio as follows:
      • $4.8 million from our CLO equity, and
      • $5.3 million from our debt investments and other income
  • Our total expenses for the quarter ended December 31, 2021 were approximately $5.7 million, compared with total expenses of approximately $5.8 million for the quarter ended September 30, 2021.
  • As of December 31, 2021, the following metrics applied (note that none of these metrics represented a total return to shareholders):
    • The weighted average yield of our debt investments was 7.7% at current cost, compared with 7.5% as of September 30, 2021.
    • The weighted average effective yield of our CLO equity investments at current cost was 9.1%, which was approximately the same as of September 30, 2021.
    • The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 21.2%, compared with 19.6% as of September 30, 2021.
  • For the quarter ended December 31, 2021, we recorded a net increase in net assets resulting from operations, consisting of:
    • NII of approximately $4.5 million;
    • Net realized losses of approximately $3.7 million; and
    • Net unrealized depreciation of approximately $0.7 million. 
  • During the fourth quarter of 2021, we made investments of approximately $23.3 million, received $1.6 million from repayments and amortization payments on our debt investments, and received $10.3 million from sales of investments.
  • Our weighted average credit rating was 2.1 based on total fair value and 2.3 based on total principal amount as of December 31, 2021, compared with 2.0 and 2.3, respectively, as of September 30, 2021.
  • As of December 31, 2021, we had three debt investments on non-accrual status, with a combined fair value of $1.3 million. Also, as of December 31, 2021, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had an aggregate fair value of approximately $772,000.

We will hold a conference call to discuss fourth quarter results today, Thursday, March 3rd, 2022 at 9:00 AM ET. The toll-free dial-in number is 1-844-200-6205, access code number 094576. 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 501865.

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.
STATEMENTS OF ASSETS AND LIABILITIES

  December 31,
2021
  December 31,
2020
       
ASSETS              
Non-affiliated/non-control investments (cost: $495,212,632 and $407,547,351, respectively) $ 420,038,717     $ 294,674,000  
Affiliated investments (cost: $16,836,822 and $16,836,822, respectively)   772,491        
Cash equivalents   9,015,700       59,137,284  
Interest and distributions receivable   3,064,477       2,299,259  
Securities sold not settled         950,000  
Other assets   615,109       597,238  
Total assets $ 433,506,494     $ 357,657,781  
LIABILITIES              
Notes payable – 6.50% Unsecured Notes, net of deferred issuance costs of $730,361 and $1,055,065, respectively $ 63,639,864     $ 63,315,160  
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $1,009,924 and $1,243,082, respectively   43,780,826       43,547,668  
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $2,539,305 and $0, respectively   77,960,695        
Securities purchased not settled         23,156,556  
Base Fee and Net Investment Income Incentive Fee payable to affiliate   1,688,712       1,159,703  
Accrued interest payable   1,216,109       478,191  
Accrued expenses   625,163       573,977  
Total liabilities   188,911,369       132,231,255  
COMMITMENTS AND CONTINGENCIES (Note 9)              
NET ASSETS              
Common stock, $0.01 par value, 100,000,000 shares authorized; 49,690,059 and 49,589,607 shares issued and outstanding, respectively   496,900       495,895  
Capital in excess of par value   434,462,322       452,650,210  
Total distributable earnings/(accumulated losses)   (190,364,097 )     (227,719,579 )
Total net assets   244,595,125       225,426,526  
Total liabilities and net assets $ 433,506,494     $ 357,657,781  
Net asset value per common share $ 4.92     $ 4.55  


OXFORD SQUARE CAPITAL CORP.
STATEMENTS OF OPERATIONS

    Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
INVESTMENT INCOME                        
From non-affiliated/non-control investments:                        
Interest income – debt investments   $ 17,440,229     $ 20,252,055     $ 28,000,283  
Income from securitization vehicles and investments     18,691,631       15,014,000       25,244,866  
Other income     1,043,153       676,450       1,694,434  
Total investment income from non-affiliated/non-control investments     37,175,013       35,942,505       54,939,583  
From affiliated investments:                        
Dividend income – non-cash                 7,710,805  
Interest income – debt investments                  
Total investment income from affiliated investments                 7,710,805  
Total investment income     37,175,013       35,942,505       62,650,388  
EXPENSES                        
Interest expense     10,495,897       7,878,906       9,901,426  
Base Fee     6,287,173       4,525,034       6,704,467  
Professional fees     1,910,390       1,545,279       1,454,942  
Compensation expense     723,931       708,350       832,256  
Director’s fees     490,500       441,500       417,500  
Insurance     422,805       330,746       281,146  
Transfer agent and custodian fees     222,581       206,686       239,323  
General and administrative     521,541       591,512       829,476  
Total expenses before incentive fees     21,074,818       16,228,013       20,660,536  
Net Investment Income Incentive Fees                 3,511,493  
Capital gains incentive fees                  
Total incentive fees                 3,511,493  
Total expenses     21,074,818       16,228,013       24,172,029  
Net investment income     16,100,195       19,714,492       38,478,359  
Net change in unrealized appreciation/(depreciation) on investments:                        
Non-Affiliate/non-control investments     37,699,436       (7,029,647 )     (50,107,582 )
Affiliated investments     772,491       (2,816,790 )     (19,386,212 )
Total net change in unrealized appreciation/(depreciation) on investments     38,471,927       (9,846,437 )     (69,493,794 )
Net realized losses:                        
Non-affiliated/non-control investments     (14,987,438 )     (8,151,553 )     (1,709,816 )
Extinguishment of debt           (5,211 )     (72,666 )
Total net realized losses     (14,987,438 )     (8,156,764 )     (1,782,482 )
Net increase/(decrease) in net assets resulting from operations $   39,584,684   $   1,711,291   $   (32,797,917 )



  Year Ended
December 31,
2021
 
Year Ended
December 31,
2020
 
 Year Ended
December 31,
2019
 
Net increase in net assets resulting from net investment income per common share:                      
Basic and Diluted $ 0.32     $ 0.40     $ 0.81  
Net increase/(decrease) in net assets resulting from operations per common share:                      
Basic and Diluted $ 0.80     $ 0.03     $ (0.69 )
Weighted average shares of common stock outstanding:                      
Basic and Diluted   49,624,851       49,477,215       47,756,596  


FINANCIAL HIGHLIGHTS

  Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
  Year Ended
December 31,
2017
Per Share Data                                      
Net asset value at beginning of year $ 4.55     $ 5.12     $ 6.60     $ 7.55     $ 7.50  
Net investment income(1)   0.32       0.40       0.81       0.67       0.60  
Net realized and unrealized gains (losses)(2)   0.47       (0.36 )     (1.49 )     (0.91 )     0.25  
Net increase/(decrease) in net assets resulting from operations   0.79       0.04       (0.68 )     (0.24 )     0.85  
Distributions per share from net investment income   (0.42 )     (0.61 )     (0.80 )     (0.73 )     (0.66 )
Distributions based on weighted average share impact                     0.01        
Tax return of capital distributions                     (0.07 )     (0.14 )
Total distributions(3)   (0.42 )     (0.61 )     (0.80 )     (0.79 )     (0.80 )
Effect of shares issued/repurchased, gross                     0.08        
Net asset value at end of year $ 4.92     $ 4.55     $ 5.12     $ 6.60     $ 7.55  
Per share market value at beginning of year $ 3.05     $ 5.44     $ 6.47     $ 5.74     $ 6.61  
Per share market value at end of year $ 4.08     $ 3.05     $ 5.44     $ 6.47     $ 5.74  
Total return based on Market Value(4)   47.38 %     (31.75 )%     (4.14 )%     26.95 %     (2.01 )%
Total return based on Net Asset Value(5)   17.36 %     0.82 %     (10.26 )%     (1.99 )%     11.33 %
Shares outstanding at end of year   49,690,059       49,589,607       48,448,987       47,650,959       51,479,409  
                                       
Ratios/Supplemental Data (7)                                      
Net assets at end of period (000’s) $ 244,595     $ 225,427     $ 247,999     $ 314,724     $ 388,419  
Average net assets (000’s) $ 242,589     $ 192,137     $ 289,373     $ 369,258     $ 385,947  
Ratio of expenses to average net assets   8.69 %     8.45 %     8.35 %     6.17 %     7.95 %
Ratio of net investment income to average net assets   6.64 %     10.26 %     13.30 %     9.07 %     7.96 %
Portfolio turnover rate(6)   11.09 %     23.72 %     12.75 %     35.18 %     43.02 %

 

(1) Represents per share net investment income for the period, based upon weighted average shares outstanding.
(2) Net realized and unrealized gains 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.
(4) Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan, excluding any discounts divided by the beginning market value per share.
(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.
(6) Portfolio turnover rate is calculated using the lesser of the annual cash investment sales and repayments of principal or annual cash investment purchases over the average of the total investments at fair value.
(7) The following table provides supplemental performance ratios measured for the years ended December 31, 2021, 2020, 2019, 2018 and 2017:



  Year Ended
December 31,
2021
  Year Ended
December 31,
2020
  Year Ended
December 31,
2019
  Year Ended
December 31,
2018
  Year Ended
December 31,
2017
Ratio of expenses to average net assets:                            
Expenses before incentive fees 8.69 %   8.45 %   7.14 %   4.92 %   6.95 %
Net Investment Income Incentive Fees %   %   1.21 %   1.24 %   1.00 %
Capital Gains Incentive Fees %   %   %   %   %
Ratio of expenses, excluding interest expense, to average net assets 4.36 %   4.35 %   4.93 %   4.21 %   4.61 %


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.