Core Viewpoint - Oaktree Specialty Lending Corporation has successfully amended and extended its senior secured revolving credit facility, resulting in a lower interest rate and an extended maturity date, which is expected to positively impact net investment income [1][3]. Group 1: Credit Facility Details - The maturity of the senior secured revolving credit facility has been extended from June 2028 to April 2030 [1]. - The interest rate on the amended facility has been reduced from SOFR plus 2.00% to a range of SOFR plus 1.75% to 1.875%, depending on the debt outstanding, with an additional 0.10% SOFR adjustment [1]. - The current interest rate is SOFR plus 1.875%, plus the 0.10% SOFR adjustment [1]. - The minimum consolidated interest coverage ratio requirement of 2.25x has been removed [1]. Group 2: Facility Features - The amended facility retains an accordion feature, allowing Oaktree Specialty Lending to increase the facility size to a maximum of $1,500 million under certain conditions [2]. Group 3: Company Overview - Oaktree Specialty Lending Corporation is a specialty finance company focused on providing customized credit solutions to companies with limited access to public or syndicated capital markets [3]. - The company aims to generate current income and capital appreciation through flexible financing solutions, including first and second lien loans, unsecured and mezzanine loans, and preferred equity [3]. - Oaktree Specialty Lending is regulated as a business development company under the Investment Company Act of 1940 and is managed by Oaktree Capital Management, L.P. [3].

I rank Oaktree Specialty Lending ( OCSL ) low on my list of preferred BDCs, both because the metrics we will examine below are weak and because I believe there are better options within the sector.Mr. Mavroudis is a professional portfolio manager specializing in institutional and private portfolios. He focuses on risk management, which is accompanied by in-depth financial market analysis (fundamental, macro and technical) to control the risk undertaken by the portfolios. He invests in all financial instrume ...

Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a specialty finance company dedicated to providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company's investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions including first and second lien loans, unsecured and mezzanine loans, and preferred equity. The Company is regulated as a business de ...

Core Viewpoint - Oaktree Specialty Lending (OCSL) presents an attractive investment opportunity based on its valuation, portfolio strategy, and yield, with shares trading at a significant discount to net asset value [1] Valuation - OCSL shares are currently trading at a large discount to their net asset value, indicating potential undervaluation in the market [1] Portfolio Strategy - The company employs a strategic approach to its portfolio, which contributes to its overall attractiveness as an investment [1] Yield - OCSL offers a compelling yield, making it an appealing option for income-focused investors [1]

Group 1 - Oaktree Specialty Lending Corporation (NASDAQ: OCSL) experienced a decline in its net asset value during the December quarter due to necessary write-downs of investment values [1] Group 2 - The company is under scrutiny for its investment strategies and the impact of market conditions on its asset valuations [1]

Core Viewpoint - Oaktree Specialty Lending Corporation has announced a public offering of $300 million in notes with a 6.340% interest rate, maturing on February 27, 2030, aimed at reducing debt and supporting general corporate purposes [1][2]. Group 1: Offering Details - The company priced an underwritten public offering of $300 million aggregate principal amount of 6.340% notes due 2030 [1]. - The notes may be redeemed at the company's option at any time at par plus a "make-whole" premium [1]. - The offering is expected to close on February 27, 2025, subject to customary closing conditions [3]. Group 2: Use of Proceeds - Oaktree Specialty Lending Corporation plans to use the net proceeds from this offering to reduce outstanding debt under its revolving credit facilities and for general corporate purposes [2]. Group 3: 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 [6]. - The company's investment objective is to generate current income and capital appreciation through flexible financing solutions, including first and second lien loans, unsecured and mezzanine loans, and preferred equity [6]. - The company is regulated as a business development company under the Investment Company Act of 1940 and is externally managed by Oaktree Fund Advisors, LLC [6].

Group 1 - Oaktree Specialty Lending (NASDAQ: OCSL) is predicted to face near-term dividend cuts, indicating potential financial challenges ahead [1] - The article compares OCSL with BlackRock TCP Capital Corp, suggesting a broader context of performance within the Business Development Company (BDC) sector [1] Group 2 - The author has extensive experience in financial management and has contributed to the development of financial strategies for top-tier corporates [1] - Efforts have been made to institutionalize the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] - The author has also worked on national SOE financing guidelines and frameworks to channel private capital into affordable housing [1]

Financial Data and Key Metrics Changes - Adjusted net investment income (NII) was $45,000,000 or $0.54 per share for fiscal Q1, down slightly from $0.55 per share in the prior quarter [9][30] - Net asset value (NAV) per share declined to $17.63 from $18.09 last quarter [9][30] - Total debt outstanding was $1,610,000,000 with a weighted average interest rate of 6.2%, down from the previous quarter [32][33] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $2,800,000,000 invested across 136 companies, with a weighted average yield on debt investments at 10.7% [12] - 82% of the portfolio is now in 1st lien position, up from 78% a year ago [12] - The median EBITDA of portfolio companies was $142,000,000 with a median leverage of 5.4 times [13] Market Data and Key Metrics Changes - The company originated $198,000,000 of new investment commitments with a weighted average yield of 9.6%, a slight decline from the previous quarter [23] - Paydowns, exits, and sales in Q1 generated $352,000,000, up from $338,000,000 in the fourth quarter [24] - The company noted that competition between broadly syndicated loans and private credit drove spreads lower, which are now stabilizing [20][21] Company Strategy and Development Direction - The company amended its dividend policy to include a base dividend of $0.40 per share and a supplemental dividend of $0.07 per share [7][8] - The equity raise of $100,000,000 is expected to help grow the asset base and diversify the portfolio [5][33] - The management emphasized a focus on investing in larger companies and strong sectors to further diversify the portfolio [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the current environment but expressed optimism about increased deal flow in 2025 due to favorable regulatory conditions and private equity activity [20][21] - The company remains committed to addressing troubled assets and converting them into performing credit assets [54] - Management believes that the current market environment presents attractive investment opportunities [40][66] Other Important Information - The company has a liquidity of approximately $1,100,000,000, including $113,000,000 in cash and $958,000,000 in undrawn capacity on credit facilities [33] - The company reported a $700,000 dividend from the Kemper joint venture [34] Q&A Session Summary Question: Inquiry about the $100,000,000 equity investment and future plans - Management clarified that the investment was made at NAV with a standard lockup provision, allowing for significant dry powder for future investments [38][39] Question: Discussion on the strategic shift towards larger company direct lending - Management explained that the focus on first lien lending is due to better risk-adjusted returns in the current market environment [41][46] Question: Options for upcoming debt maturity - Management indicated that they are considering all options, leveraging existing liquidity and facilities [50] Question: Goals for the company with the new dividend and fee structure - Management stated the goal is to cover the dividend comfortably, grow the asset base, and convert non-performing assets into income-generating assets [52][54] Question: Clarification on supplemental dividend levels - Management indicated that approximately 50% of excess earnings above the base dividend would be paid out as supplemental dividends [58] Question: Rationale for buying back shares at NAV - Management explained that purchasing at NAV allows for asset growth and diversification rather than simply buying shares at a discount [65][66]

Earnings Presentation NASDAQ: OCSL First Quarter 2025 Forward Looking Statements & Legal Disclosures Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation may include statements as to: our future operating results and distribution projections; the ability of Oaktree Fund Advisors, LLC (together with its affiliates, "Oaktree") to impl ...

Core Viewpoint - Oaktree Specialty Lending (OCSL) reported quarterly earnings of $0.54 per share, matching the Zacks Consensus Estimate, but down from $0.57 per share a year ago [1]. Financial Performance - The company posted revenues of $86.65 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 4.34%, and down from $97.99 million year-over-year [2]. - Oaktree Specialty Lending has not surpassed consensus EPS estimates over the last four quarters [2]. - The current consensus EPS estimate for the upcoming quarter is $0.53 on revenues of $87.94 million, and for the current fiscal year, it is $2.06 on revenues of $352.18 million [7]. Stock Performance - Oaktree Specialty Lending shares have increased by approximately 4.4% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3]. - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6]. Industry Outlook - The Financial - Miscellaneous Services industry, to which Oaktree Specialty Lending belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable industry outlook [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Oaktree's stock performance [5]. Future Considerations - The sustainability of Oaktree's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4]. - Investors are encouraged to monitor changes in earnings estimates for the coming quarters and the current fiscal year [7].