Oxford Square Capital Corp (OXSQ) Q4 2024 Earnings Call Highlights: Navigating Market ...

GuruFocus.com
01 Mar

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Oxford Square Capital Corp (NASDAQ:OXSQ) reported net investment income of approximately $6 million or $0.09 per share for the fourth quarter of 2024.
  • The company distributed $0.105 per share to its common stock shareholders during the quarter.
  • Total investment income for the fourth quarter was approximately $10.2 million, showing stability compared to the prior quarter.
  • The company issued approximately 1.8 million shares of common stock, resulting in net proceeds of approximately $5 million.
  • US loan market performance improved during the quarter, with loan prices increasing as per the Morningstar LSTA US leverage loan Index.

Negative Points

  • Net asset value per share decreased to $2.30 from $2.35 in the prior quarter.
  • The company recorded combined net unrealized and realized losses on investments of approximately $2.7 million or $0.04 per share.
  • The 12-month trailing default rate for the loan index increased to 0.91% by principal amount at the end of the quarter.
  • There was a decrease in triple C rated loan prices by 373 basis points on average.
  • The distress ratio, defined as the percentage of loans with prices below 80% of par, remained elevated at 3.02%.

Q & A Highlights

  • Warning! GuruFocus has detected 2 Warning Sign with OXSQ.

Q: Can you provide an overview of Oxford Square's financial performance for the fourth quarter of 2024? A: Jonathan Cohen, CEO, reported that Oxford Square's net investment income was approximately $6 million or $0.09 per share, compared to $6.2 million or $0.10 per share in the previous quarter. The net asset value per share was $2.30, down from $2.35 in the prior quarter. Total investment income was approximately $10.2 million, slightly down from $10.3 million in the previous quarter. The company recorded combined net unrealized and realized losses on investments of approximately $2.7 million or $0.04 per share, compared to $7.1 million or $0.11 per share in the prior quarter.

Q: What were the key investment activities during the fourth quarter? A: Jonathan Cohen, CEO, stated that during the fourth quarter, Oxford Square's investment activities included purchases of approximately $25.1 million, sales of $7 million, and repayments of approximately $15 million. Additionally, the company issued approximately 1.8 million shares of common stock through an at-the-market offering, resulting in net proceeds of approximately $5 million.

Q: How did the US loan market perform during the quarter? A: Kevin, Managing Director and Portfolio Manager, noted that US loan market performance improved compared to the prior quarter. The Morningstar LSTA US leverage loan Index showed an increase in loan prices from 96.71% of par as of September 30th to 97.33% of par as of December 31st. There was pricing dispersion, with double B rated loan prices increasing by 48 basis points, B-rated loan prices by 74 basis points, and triple C rated loan prices decreasing by 373 basis points on average.

Q: What was the status of the US leveraged loan primary market issuance? A: Kevin, Managing Director and Portfolio Manager, reported that US leveraged loan primary market issuance, excluding amendments and repricing transactions, was $96.7 billion for the quarter ended December 31, 2024. This represented a 75% increase compared to the same quarter in 2023, driven by higher non-refinancing issuances, including M&A and LBO activity, as well as opportunistic activities like refinancing and funding of dividends.

Q: Were there any questions from participants during the Q&A session? A: There were no questions from participants during the Q&A session. The call was concluded by Jonathan Cohen, CEO, who thanked everyone for their participation and expressed anticipation for future discussions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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