Oaktree Specialty Lending Corporation Announces First Fiscal Quarter 2025 Financial Results

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$105.3 million, representing 3.9% of debt investments at fair value [12][18].