Oxford Square Capital (OXSQ) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q1 2025, the company's net investment income was approximately $6.1 million or$0.09 per share, slightly up from approximately $6 million or$0.09 per share in the prior quarter [7] - The net asset value per share decreased to $2.09 from$2.30 in the prior quarter [7] - Total investment income for the first quarter was approximately $10.2 million, remaining consistent with the prior quarter [8] - The company recorded combined net unrealized and realized losses on investments of approximately$14.2 million or $0.20 per share, a significant increase from approximately$2.7 million or $0.04 per share in the prior quarter [8] Business Line Data and Key Metrics Changes - The investment activity during the quarter included purchases of approximately$16 million, sales of approximately $10.7 million, and repayments of approximately$8.7 million [9] - The company distributed $0.105 per share to common stock shareholders during the quarter [8] - A total of approximately 1.3 million shares were issued in an aftermarket offering, resulting in net proceeds of approximately$3.5 million [10] Market Data and Key Metrics Changes - The US loan market performance weakened, with US loan prices decreasing from 97.33% of par as of December 31 to 96.31% of par as of March 31 [12] - Pricing dispersion was noted, with BB rated loan prices decreasing by 82 basis points, B rated loan prices decreasing by 134 basis points, and CCC rated loan prices decreasing by 211 basis points on average [13] - The 12-month trailing default rate for the loan index decreased to 0.82% from 0.91% at the end of December, but the overall default rate, including various liability management exercises, remained elevated at 4.31% [13] - The distress ratio ended the quarter at 3.21%, up from 3.02% at the end of 2024 [13] - US leveraged loan primary market issuance was $141.1 billion, representing a 2$1.94 billion for the quarter [14] Company Strategy and Development Direction - The company continues to focus on portfolio management strategies aimed at maximizing long-term total return, leveraging its position as a permanent capital vehicle to adopt a longer-term investment strategy [15] Management's Comments on Operating Environment and Future Outlook - Management noted the weakening performance in the US loan market and highlighted the challenges posed by pricing dispersion and elevated default rates [12][13] - The company remains committed to its investment strategy despite the current market conditions [15] Other Important Information - The Board of Directors declared monthly distributions of $0.035 per share for the months ending July, August, and September of 2025 [10] Q&A Session Summary Question: No questions were raised during the Q&A session - There were no questions from participants during the call [17]