Oxford Square Capital (US:OXSQ)2022-11-07 23:48Investment Portfolio - As of September 30, 2022, the fair value of the Company's investment portfolio was approximately $340.2 million[231]. - The total fair value of the investment portfolio decreased to approximately $340.2 million as of September 30, 2022, down from $420.8 million as of December 31, 2021, reflecting a net unrealized depreciation of approximately $76.5 million[250]. - The company acquired approximately $78.2 million in portfolio investments during the nine months ended September 30, 2022, which included $52.8 million in existing portfolio companies and $25.3 million in new portfolio companies[251]. - As of September 30, 2022, the company had investments in debt securities or loans to 20 portfolio companies, with a fair value of approximately $230.3 million, CLO equity investments of approximately $107.7 million, and other equity investments of approximately $2.2 million[256]. - The company's portfolio composition as of September 30, 2022, included 67.7% in Senior Secured Notes, 31.7% in CLO Equity, and 0.6% in Equity and Other Investments[259]. Debt Investments - The weighted average annualized yield on debt investments was approximately 10.41% as of September 30, 2022[225]. - Debt investments had stated interest rates ranging from 6.37% to 12.73% with maturity dates between 3 and 89 months[225]. - The total principal value of debt investments, excluding non-accrual, was approximately $272.7 million as of September 30, 2022, compared to $259.6 million as of September 30, 2021[274]. - The weighted average stated interest rate on all of the company's debt outstanding as of September 30, 2022, was 6.02% with a weighted average maturity of 3.8 years[301]. - The company experienced $49.8 million in debt repayments during the nine months ended September 30, 2022, compared to $24.3 million for the year ended December 31, 2021[255]. Financial Performance - Total investment income for the nine months ended September 30, 2022, was approximately $31.2 million, an increase of 8.9% from $27.0 million for the same period in 2021[270]. - Interest expense for the nine months ended September 30, 2022, was approximately $9.3 million, compared to $7.4 million for the same period in 2021[279]. - Net investment income for the three months ended September 30, 2022, was approximately $5.6 million, an increase from $4.0 million for the same period in 2021[290]. - The net decrease in net assets resulting from operations for the three months ended September 30, 2022, was approximately $11.1 million, contrasting with a net increase of approximately $11.3 million for the same period in 2021[292]. - The net increase in net assets resulting from net investment income per common share for the three months ended September 30, 2022, was $0.11, compared to $0.08 for the same period in 2021[291]. Risk Management - The Company is exposed to risks of leverage, which may magnify potential gains and losses[227]. - The company may utilize hedging instruments in the future to mitigate interest rate fluctuations[318]. - The company is subject to financial market risks, including changes in interest rates, which could impact its investment income[325]. - A hypothetical increase of 300 basis points in base rates would result in a 17.9% increase in net investment income, while a decrease of 100 basis points would lead to a 6.0% decrease[321]. - The FCA announced the cessation of 24 LIBOR settings after December 31, 2021, impacting the company's interest rate benchmarks[319]. Company Operations - The Company operates as a closed-end management investment company regulated as a BDC under the Investment Company Act of 1940[222]. - The investment activities are managed by Oxford Square Management, LLC, which is a registered investment adviser[223]. - The company has implemented policies to manage potential conflicts of interest arising from related party transactions[310]. - The company has a Code of Business Conduct and Ethics to manage conflicts of interest among its officers and directors[314]. - The company evaluated its disclosure controls and procedures as effective, providing reasonable assurance for timely and accurate SEC filings as of September 30, 2022[322]. Cash and Distributions - As of September 30, 2022, cash and cash equivalents were approximately $14.4 million, up from approximately $9.0 million as of December 31, 2021[295]. - For the nine months ended September 30, 2022, net cash provided by operating activities was approximately $18.8 million, reflecting significant investment purchases of approximately $78.2 million[295]. - Total distributions for the first quarter of fiscal 2023 amounted to $0.105 per share, consistent with previous quarters[306]. - The total cash distributions for the year 2021 were reported at $0.42 per share, with $0.32 classified as investment income[307]. - Distributions of $0.035 per share were declared on multiple occasions from July 2022 to March 2023[316].