Core Viewpoint - Oaktree Specialty Lending Corporation reported its financial results for the fiscal quarter ended December 31, 2024, highlighting a decrease in total investment income and net asset value, while also announcing a significant equity raise and changes to its incentive fee structure to enhance shareholder value [1][2][3]. Financial Highlights - Oaktree Capital I, L.P. purchased $100 million of OCSL common stock at a net asset value of $17.63 per share, representing a 10% premium to the closing stock price, resulting in a nearly 7% increase to NAV [2][29]. - Total investment income for the quarter was $86.6 million ($1.05 per share), down from $94.7 million ($1.15 per share) in the previous quarter [2][6]. - GAAP net investment income was $44.3 million ($0.54 per share), slightly down from $44.9 million ($0.55 per share) in the prior quarter [2][10]. - Net asset value per share decreased to $17.63 from $18.09 as of September 30, 2024, primarily due to losses on certain investments [2][8]. Investment Activity - The company originated $198.1 million in new investment commitments and received $352.4 million from prepayments and exits during the quarter [2][12]. - The weighted average yield on new debt investments was 9.6% [2][12]. Debt and Liquidity - Total debt outstanding was $1,610 million, with a total debt to equity ratio of 1.11x and a net debt to equity ratio of 1.03x [2][27]. - As of December 31, 2024, liquidity included $112.9 million in unrestricted cash and $957.5 million in undrawn capacity under credit facilities [2][25]. Dividend Declaration - A quarterly cash distribution of $0.40 per share and a supplemental distribution of $0.07 per share were declared, payable on March 31, 2025 [4][5]. Changes in Fee Structure - The company implemented a total return hurdle, waiving $6.4 million in Part I incentive fees for the quarter, with a new calculation method that considers capital gains and losses [2][28]. - This new arrangement includes a lookback provision that will build to a rolling 12-quarter lookback by the end of the 2027 fiscal year [2][28]. Portfolio Composition - As of December 31, 2024, the investment portfolio was valued at $2.8 billion, consisting of 136 companies, with 94.4% in debt investments [2][16][17]. - Non-accrual investments at fair value were $105.3 million, representing 3.9% of debt investments at fair value [12][18].

Investment Portfolio - As of December 31, 2024, the company held $2,835.3 million in investments at fair value, down from $3,021.3 million at September 30, 2024, primarily due to sales of investments and net realized and unrealized losses during the quarter [322]. - Approximately 91.9% of the company's total assets represented investments at fair value as of December 31, 2024, compared to 94.5% as of September 30, 2024 [323]. - The fair value of investments is determined quarterly, with 96.8% of the portfolio valued based on market quotations or corroborated by independent valuation firms as of December 31, 2024 [320]. - The company invests primarily in below investment grade securities, which are often characterized as high yield or junk [306]. - The investment portfolio composition at cost as of December 31, 2024, included 82.13% in senior secured debt and 4.59% in common equity and warrants [330]. - The fair value of senior secured debt as of December 31, 2024, was 84.79%, while common equity and warrants accounted for 2.49% [330]. - The company’s investments primarily consist of loans, common and preferred equity, and warrants in privately-held companies [329]. - The company’s joint venture, SLF JV I, co-invests in senior secured loans of middle-market companies and is managed by a four-person Board of Directors [334]. - The company recorded net realized losses of $17.3 million for the three months ended December 31, 2024, compared to $8.5 million in 2023 [353]. - Net unrealized depreciation for the three months ended December 31, 2024 was $19.6 million, an improvement from $25.0 million in 2023 [355]. Financial Performance - For the three months ended December 31, 2024, the company originated $198.1 million of investment commitments and funded $201.3 million of investments [330]. - As of December 31, 2024, the total investment income was $86.6 million, a decrease of $11.3 million or 11.6% compared to $98.0 million for the same period in 2023 [349]. - Net expenses for the three months ended December 31, 2024 were $42.1 million, down by $11.7 million or 21.8% from $53.8 million in 2023 [350]. - Net investment income for the three months ended December 31, 2024 increased by $0.1 million compared to the same period in 2023, despite a decrease in total investment income [351]. - The company had $1,612.9 million in senior securities and an asset coverage ratio of 187.89% [358]. - For the three months ended December 31, 2024, net cash provided by operating activities was $144.0 million, primarily from $352.5 million of principal payments and sale proceeds [359]. Debt and Liquidity - The total debt outstanding as of December 31, 2024, was $1.610 billion, with a weighted average interest rate of 6.841% for the three months ended December 31, 2024 [380]. - The company reported $957.5 million of undrawn capacity on credit facilities as of December 31, 2024, and $660.0 million of borrowings outstanding [361]. - The company had $302.3 million of unfunded commitments as of December 31, 2024, with $275.2 million allocated for debt and equity financing to portfolio companies [363]. - The company has sufficient liquidity and capital resources to invest in market opportunities as they arise [365]. - The company had $430.0 million of borrowings outstanding under the Syndicated Facility as of December 31, 2024, with interest expense recorded at $9.5 million for the quarter [380]. - Outstanding borrowings under the OSI2 Citibank Facility were $230 million as of December 31, 2024, with a fair value of $230 million, and a weighted average interest rate of 7.412% for the three months ended December 31, 2024 [383]. Interest Rate Risk Management - The company monitors macroeconomic conditions, including inflation and interest rates, which may impact market supply and demand [309][310]. - A hypothetical 250 basis point increase in interest rates would result in a net increase in net assets from operations of $28.1 million, while a 250 basis point decrease would lead to a net decrease of $27.3 million [410][411]. - The company has a risk management procedure in place to monitor and manage interest rate risks, with ongoing assessments of interest rate exposure [408]. - The company regularly measures exposure to interest rate risk and may engage in hedging transactions as necessary [411]. Shareholder Distributions - The company declared a quarterly distribution of $0.55 per share on November 8, 2023, totaling $41.7 million [373]. - On January 27, 2025, the Board of Directors declared quarterly and supplemental distributions of $0.40 per share and $0.07 per share, payable on March 31, 2025 [401]. - Oaktree Capital I, L.P. purchased 5,672,149 shares of the company's common stock for an aggregate price of $100.0 million, at a price of $17.63 per share, which was the company's net asset value as of January 31, 2025 [402]. Management and Governance - The company is externally managed by Oaktree, which provides investment advisory and administrative services [304][305]. - The company entered into a letter agreement with Oaktree for the waiver of certain portions of the incentive fee on income [403]. - Oaktree has agreed to ensure that the sales price per share in the at-the-market offering will not be less than the current net asset value per share [404][405]. - The company has qualified as a Regulated Investment Company (RIC) and intends to distribute at least 90% of its annual taxable income to stockholders [392][395]. Valuation and Methodology - The company utilizes various valuation techniques, including transaction precedent and enterprise value analysis, to determine fair value of investments [317]. - The company’s valuation methodology for investments involves significant management judgment, and estimated fair values may differ from realizable amounts [407].

Core Viewpoint - Oaktree Specialty Lending Corporation will report its financial results for the first fiscal quarter ended December 31, 2024, on February 4, 2025, before the market opens [2]. Group 1: Financial Reporting - The financial results will be discussed in a conference call scheduled for February 4, 2025, at 11:00 a.m. Eastern Time [2]. - The conference call can be accessed via phone or through a live webcast on the company's website [2]. - A replay of the conference call will be available approximately one hour after the live broadcast [3]. Group 2: Company Overview - Oaktree Specialty Lending Corporation is a specialty finance company focused on providing customized credit solutions to companies with limited access to capital markets [4]. - The company's investment objective includes generating current income and capital appreciation through various financing solutions such as first and second lien loans, unsecured and mezzanine loans, and preferred equity [4]. - Oaktree Specialty Lending is regulated as a business development company under the Investment Company Act of 1940 and is managed by Oaktree Fund Advisors, LLC, an affiliate of Oaktree Capital Management, L.P. [4].

Core Viewpoint - Oaktree Specialty Lending Corporation (NASDAQ: OCSL) has faced significant underperformance compared to the broader market, but it remains well-positioned for future growth despite short-term challenges [1]. Group 1: Company Overview - OCSL has a diversified portfolio with high debt yields, which contributes to its risk reduction strategy [1]. - The company is focused on GARP (Growth at a Reasonable Price) and value stocks, emphasizing high-quality, reasonably priced businesses with strong competitive advantages and significant growth potential [1]. Group 2: Investment Strategy - The investment approach prioritizes fundamentals, seeking stocks that are trading at a discount to their intrinsic value, with a clear margin of safety [1]. - The long-term investment horizon is set at 5-7 years, aiming for wealth accumulation through compounding while emphasizing downside protection [1].

A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities.Analyst’s Disclosure: I/we have a beneficial long position in the shares of OCSL either through stock ownership, options, or other derivatives. I wrote this ...

Oaktree Specialty Lending Corporation (NASDAQ:OCSL) Q4 2024 Results Conference Call November 19, 2024 11:00 AM ET Company Participants Dane Kleven - Head of Investor Relations Matt Pendo - President Armen Panossian - Chief Executive Officer & Chief Investment Officer Chris McKown - Chief Financial Officer & Treasurer Conference Call Participants Paul Johnson - KBW Melissa Wedel - JPMorgan Operator Welcome, and thank you for joining Oaktree Specialty Lending Corporation's Fourth Fiscal Quarter Conference Cal ...

Oaktree Specialty Lending (OCSL) reported $94.69 million in revenue for the quarter ended September 2024, representing a year-over-year decline of 7.1%. EPS of $0.55 for the same period compares to $0.62 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $98.09 million, representing a surprise of -3.47%. The company delivered an EPS surprise of -1.79%, with the consensus EPS estimate being $0.56.While investors scrutinize revenue and earnings changes year-over-year and how they comp ...

Oaktree Specialty Lending (OCSL) came out with quarterly earnings of $0.55 per share, missing the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.62 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.79%. A quarter ago, it was expected that this specialty finance company would post earnings of $0.57 per share when it actually produced earnings of $0.55, delivering a surprise of -3.51%.Over the last ...

Exhibit 99.1 Oaktree Specialty Lending Corporation Announces Fourth Fiscal Quarter and Full Year 2024 Financial Results and Declares Quarterly Distribution of $0.55 Per Share LOS ANGELES, CA, November 19, 2024 - 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 and year ended September 30, 2024. | --- | --- | |-----------|----------------------------------------------- ...

LOS ANGELES, CA, Nov. 19, 2024 (GLOBE NEWSWIRE) -- 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 and year ended September 30, 2024. Financial Highlights for the Quarter and Year Ended September 30, 2024   Total investment income was $94.7 million ($1.15 per share) and $381.7 million ($4.75 per share) for the fourth fiscal quarter of 2024 and full year, as compared ...