Oaktree Specialty Lending Corp
For the period ended Dec 31, 2024. Filed Feb 4, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 4, 2025
OCSL$12.50-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001414932-24-000012
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-04.
0001414932-25-000004
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 164 previous paragraphs and 159 current paragraphs.
105 unchanged; 46 reworded; 7 added; 9 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
On January 23, 2023, in connection with the OSI2 Merger, we issued an aggregate of 15,860,200 shares of common stock to former OSI2 stockholders. During the three months ended December 31, 2023, we issued 98,605 shares of common stock as part of the dividend reinvestment plan, or DRIP.
Current report
Purchase Agreement
Current report
On January 31, 2025, we and Oaktree Capital I, L.P., an affiliate of the Adviser, entered into a purchase agreement pursuant to which Oaktree Capital I, L.P. purchased 5,672,149 shares of our common stock on February 3, 2025 for an aggregate purchase price of $100.0 million. These shares were sold at $17.63 per share, which was the Company’s net asset value per share as of January 31, 2025 as calculated in accordance with Section 23 of the Investment Company Act. The shares were sold in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration. Oaktree Capital I, L.P. has agreed not to sell the shares acquired in this transaction through February 3, 2026.
Current report
Incentive Fee Waiver
Current report
On January 31, 2025, we and Oaktree entered into a letter agreement providing for the waiver of certain portions of the incentive fee on income. See“Note 10. Related Party Transactions - Incentive Fee” to our Consolidated Financial Statements for additional information.
Current report
At the Market Offering Update
Current report
In connection with our at the market offering, Oaktree has agreed that it or one of its affiliates may, from time to time, in its sole discretion, pay some or all of the commissions payable under the equity distribution agreements or make additional supplemental payments to ensure that the sales price per share of our common stock in connection with all of the offerings made under the at the market offering will not be less than our current net asset value per share. Any such payments made by Oaktree or one of its affiliates will not be subject to reimbursement by us.
Removed paragraphs (9)
Previous report
On January 23, 2023, we acquired Oaktree Strategic Income II, Inc. (“OSI2”) pursuant to that certain Agreement and Plan of Merger (the “OSI2 Merger Agreement”), dated as of September 14, 2022, by and among OSI2, us, Project Superior Merger Sub, Inc., our wholly-owned subsidiary, and, solely for the limited purposes set forth therein, Oaktree. Pursuant to the OSI2 Merger Agreement, OSI2 was merged with and into us in a two-step transaction with us as the surviving company (the “OSI2 Merger”).
Previous report
Total investment income for the nine months ended June 30, 2024 and 2023 was $287.0 million and $277.4 million, respectively. For the nine months ended June 30, 2024, this amount consisted of $277.4 million of interest income from portfolio investments (which included $14.8 million of PIK interest), $5.3 million of fee income and $4.2 million of dividend income. For the nine months ended June 30, 2023, this amount consisted of $268.3 million of interest income from portfolio investments (which included $14.2 million of PIK interest), $6.0 million of fee income and $3.2 million of dividend income. The increase of $9.6 million, or 3.5%, in our total investment income for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023, was due primarily to a $9.2 million increase in interest income, which was primarily driven by the impact of higher base rates on our floating rate debt portfolio and a larger investment portfolio primarily from the assets acquired in the OSI2 Merger, and a $1.1 million increase in dividend income. This was partially offset by a $0.7 million decrease in fee income due to lower exit fees.
Previous report
Expenses
Previous report
Net expenses (expenses net of fee waivers) for the nine months ended June 30, 2024 and 2023 were $156.8 million and $144.1 million, respectively. Net expenses increased for the nine months ended June 30, 2024, as compared to the nine months ended June 30, 2023, by $12.7 million, or 8.8%. The increase in net expenses was primarily driven by $17.2 million of higher interest expense due to the impact of rising interest rates on our floating rate liabilities and an increase in average borrowings outstanding. Further contributing to the increase were 1.0 million of higher management fees (net of waivers) as a result of a larger investment portfolio. This was partially offset by a $3.7 million reduction in Part I incentive fees, $1.2 million of lower professional fees and $0.8 million of lower general and administrative expenses.
Previous report
Net investment income for the nine months ended June 30, 2024 decreased by $3.1 million compared to the nine months ended June 30, 2023, primarily as a result of the $9.6 million increase in total investment income and the $12.7 million increase in net expenses.
Previous report
During the three and nine months ended June 30, 2024, we issued an aggregate of 100,029 and 295,484 shares, respectively, of common stock as part of the DRIP.
Previous report
Citibank Facility
Previous report
On March 19, 2021, we became party to a revolving credit facility, or, as amended and/or restated from time to time, the Citibank Facility, with OCSL Senior Funding II LLC, our wholly-owned, special purpose financing subsidiary, as the borrower, us, as collateral manager and seller, each of the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Wells Fargo Bank, National Association, as collateral agent and custodian. On May 25, 2023, in connection with an amendment to the OSI2 Citibank Facility, the Citibank Facility was terminated.
Previous report
Our borrowings under the Citibank Facility bore interest at a weighted average interest rate of 6.762% for the nine months ended June 30, 2023. For the three and nine months ended June 30, 2023, we recorded interest expense (inclusive of fees) of $2.4 million and $8.0 million, respectively, related to the Citibank Facility.
Reworded paragraphs (46)
Previous wording
•the impact of current global economic conditions, including those caused by inflation, a rising interest rate environment and geopolitical events or all of the foregoing.
Current wording
•the impact of current global economic conditions, including those caused by inflation, an elevated (but decreasing) interest rate environment and geopolitical events or all of the foregoing.
Previous wording
•changes or potential disruptions in our operations, the economy, financial markets or political environment, including those caused by inflation and an elevated interest rate environment;
Current wording
•changes or potential disruptions in our operations, the economy, financial markets or political environment, including those caused by tariffs and trade disputes with other countries, inflation and an elevated interest rate environment;
Previous wording
We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Current wording
We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission, or SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Previous wording
We are externally managed by Oaktree pursuant to an investment advisory agreement, as amended from time to time, or the Investment Advisory Agreement. Oaktree Fund Administration, LLC, or Oaktree Administrator, an affiliate of Oaktree, provides certain administrative and other services necessary for us to operate pursuant to an administration agreement, as amended from time to time, or the Administration Agreement.
Current wording
We are externally managed by Oaktree pursuant to an investment advisory agreement, as amended from time to time, the Investment Advisory Agreement. Oaktree Fund Administration, LLC, or Oaktree Administrator, an affiliate of Oaktree, provides certain administrative and other services necessary for us to operate pursuant to an administration agreement, as amended from time to time, or the Administration Agreement.
Previous wording
Global financial markets have experienced an increase in volatility as concerns about the impact of higher inflation, elevated interest rates, a potential slowdown in economic activity and the current conflicts in the Middle East have weighed on market participants. These factors have created disruptions in supply chains and economic activity and have had a particularly adverse impact on certain companies in the energy, raw materials and transportation sectors, among others. These uncertainties can ultimately impact the overall supply and demand of the market through changing spreads, deal terms and structures and equity purchase price multiples.
Current wording
Global financial markets have experienced an increase in volatility over the last few years amid higher inflation, elevated interest rates, and concern over a potential slowdown in economic activity. As inflation pressures have eased in recent months, the Federal Reserve has relaxed its monetary policies and cut the federal funds rate to support the broader economy. However, various macroeconomic headwinds remain including ongoing conflict in the Middle East and signs of an economic slowdown outside the United States. These uncertainties can ultimately impact the overall supply and demand of the market through changing spreads, deal terms and structures and equity purchase price multiples.
Previous wording
Against this backdrop, we believe attractive risk-adjusted returns can be achieved by making loans to middle market companies that typically possess resilient business models with strong underlying fundamentals. Given the breadth of the investment platform and decades of credit investing experience of Oaktree and its affiliates, we believe that we have the resources and experience to source, diligence and structure investments in these companies.
Current wording
Against this backdrop, we believe attractive risk-adjusted returns can be achieved by making loans to companies in the middle market. Given the breadth of the investment platform and decades of credit investing experience of Oaktree and its affiliates, we believe that we have the resources and experience to source, diligence and structure investments in these companies.
Previous wording
The fair value of our investments as of June 30, 2024 and September 30, 2023 was determined by Oaktree, as our valuation designee. We have and will continue to engage independent valuation firms to provide assistance each quarter regarding the determination of the fair value of a portion of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. As of June 30, 2024, 94.2% of our portfolio at fair value was valued either based on market quotations, the transactions precedent approach or corroborated by independent valuation firms.
Current wording
The fair value of our investments as of December 31, 2024 and September 30, 2024 was determined by Oaktree, as our valuation designee. We have and will continue to engage independent valuation firms to provide assistance each quarter regarding the determination of the fair value of a portion of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. As of December 31, 2024, 96.8% of our portfolio at fair value was valued either based on market quotations, the transactions precedent approach or corroborated by independent valuation firms.
Previous wording
As of June 30, 2024, we held $3,121.7 million of investments at fair value, up from $2,892.4 million held at September 30, 2023, primarily driven by purchases of investments during the nine months ended June 30, 2024. As of June 30, 2024 and September 30, 2023, approximately 94.0% and 89.9%, respectively, of our total assets represented investments at fair value.
Current wording
As of December 31, 2024, we held $2,835.3 million of investments at fair value, down from $3,021.3 million held at September 30, 2024, primarily driven by sales of investments and net realized and unrealized losses during the three months ended December 31, 2024. As of December 31, 2024 and September 30, 2024, approximately 91.9% and 94.5%, respectively, of our total assets represented investments at fair value.
Previous wording
We generate revenues in the form of interest income on debt investments and, to a lesser extent, capital gains and distributions, if any, on equity securities that we may acquire in portfolio companies. We may also generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance and consulting fees. Some of our investments provide for deferred interest payments or payment-in-kind, or PIK, interest income. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date.
Current wording
We generate revenues in the form of interest income on debt investments and, to a lesser extent, capital gains and distributions, if any, on equity securities that we may acquire in portfolio companies. We may also generate revenue in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance and consulting fees. Some of our investments provide for deferred interest payments or PIK interest income. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date.
Previous wording
Interest income, adjusted for accretion of original issue discount, or OID, is recorded on an accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations. As of June 30, 2024, there were eight investments on non-accrual status that in the aggregate represented 5.7% and 3.7% of total debt investments at cost and fair value, respectively. As of September 30, 2023, there were four investments on non-accrual status that in aggregate represented 2.4% and 1.8% of total debt investments at cost and fair value, respectively.
Current wording
Interest income, adjusted for accretion of original issue discount, or OID, is recorded on an accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations. As of December 31, 2024, there were nine investments on non-accrual status that in the aggregate represented 5.1% and 3.9% of total debt investments at cost and fair value, respectively. As of September 30, 2024, there were nine investments on non-accrual status that in aggregate represented 4.9% and 4.0% of total debt investments at cost and fair value, respectively.
Previous wording
Our investments in debt securities may contain PIK interest provisions. PIK interest, which typically represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Our determination to cease accruing PIK interest is generally made well before our full write-down of a loan or debt security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost bases of these investments in our Consolidated Financial Statements including for purposes of computing the capital gains incentive fee payable by us to Oaktree. To maintain our status as a RIC, certain income from PIK interest may be required to be distributed to our stockholders, even though we have not yet collected the cash and may never do so.
Current wording
Our investments in debt securities may contain payment-in-kind, or PIK, interest provisions. PIK interest, which typically represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Our determination to cease accruing PIK interest is generally made well before our full write-down of a loan or debt security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost bases of these investments in our Consolidated Financial Statements including for purposes of computing the capital gains incentive fee payable by us to Oaktree. To maintain our status as a RIC, certain income from PIK interest may be required to be distributed to our stockholders, even though we have not yet collected the cash and may never do so.
Previous wording
subsidiary of Kemper Corporation, or Kemper, co-invest in senior secured loans of middle-market companies and other corporate debt securities, and OCSI Glick JV LLC, or the Glick JV, a joint venture through which we and GF Equity Funding 2014 LLC, or GF Equity Funding, co- invest primarily in senior secured loans of middle-market companies. We refer to SLF JV I and the Glick JV collectively as the JVs. Our loans are typically secured by a first, second or subordinated lien on the assets of the portfolio company and generally have terms of up to ten years (but an expected average life of between three and four years).
Current wording
Our investments principally consist of loans, common and preferred equity and warrants in privately-held companies, Senior Loan Fund JV I, LLC, or SLF JV I, a joint venture through which we and Trinity Universal Insurance Company, a subsidiary of Kemper Corporation, or Kemper, co-invest in senior secured loans of middle-market companies and other corporate debt securities, and OCSI Glick JV LLC, or the Glick JV, a joint venture through which we and GF Equity Funding 2014 LLC, or GF Equity Funding, co-invest primarily in senior secured loans of middle-market companies. We refer to SLF JV I and the Glick JV collectively as the JVs. Our loans are typically secured by a first, second or subordinated lien on the assets of the portfolio company and generally have terms of up to ten years (but an expected average life of between three and four years).
Previous wording
During the nine months ended June 30, 2024, we originated $1,104.6 million of investment commitments in 45 new and 34 existing portfolio companies and funded $1,038.2 million of investments.
Current wording
During the three months ended December 31, 2024, we originated $198.1 million of investment commitments in 5 new and 8 existing portfolio companies and funded $201.3 million of investments.
Previous wording
During the nine months ended June 30, 2024, we received $721.7 million of proceeds from prepayments, exits, other paydowns and sales and exited 28 portfolio companies.
Current wording
During the three months ended December 31, 2024, we received $352.4 million of proceeds from prepayments, exits, other paydowns and sales and exited 13 portfolio companies.
Previous wording
Both the cost and fair value of our SLF JV I Notes were $112.7 million as of each of June 30, 2024 and September 30, 2023. We earned interest income of $3.5 million and $10.7 million on the SLF JV I Notes for the three and nine months ended June 30, 2024, respectively. We earned interest income of $3.4 million and $9.2 million on the SLF JV I Notes for the three and nine months ended June 30, 2023, respectively. As of June 30, 2024, the SLF JV I Notes bore interest at a rate of one-month SOFR plus 7.00% per annum with a SOFR floor of 1.00% and will mature on December 29, 2028.
Current wording
Both the cost and fair value of our SLF JV I Notes were $112.7 million as of each of December 31, 2024 and September 30, 2024. We earned interest income of $3.4 million and $3.6 million on the SLF JV I Notes for the three months ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the SLF JV I Notes bore interest at a rate of one-month SOFR plus 7.00% per annum with a SOFR floor of 1.00% and will mature on December 29, 2028.
Previous wording
The cost and fair value of the LLC equity interests in SLF JV I held by us was $54.8 million and $25.8 million, respectively, as of June 30, 2024, and $54.8 million and $28.9 million, respectively, as of September 30, 2023. We earned $1.4 million and $4.2 million in dividend income for the three and nine months ended June 30, 2024, respectively, with respect to our investment in the LLC equity interests of SLF JV I. We earned $1.1 million and $3.2 million in dividend income for the three and nine months ended June 30, 2023, respectively, with respect to its investment in the LLC equity interests of SLF JV I.
Current wording
The cost and fair value of the LLC equity interests in SLF JV I held by us was $54.8 million and $22.7 million, respectively, as of December 31, 2024, and $54.8 million and $22.5 million, respectively, as of September 30, 2024. We earned $0.7 million and $1.4 million in dividend income for the three months ended December 31, 2024 and 2023, respectively, with respect to our investment in the LLC equity interests of SLF JV I.
Previous wording
(with approval from a representative of each required). Since we do not have a controlling financial interest in the Glick JV, we do not consolidate the Glick JV. The Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act. The Glick JV is capitalized as transactions are completed. The members provide capital to the Glick JV in exchange for LLC equity interests, and we and GF Debt Funding, an entity advised by affiliates of GF Equity Funding, provide capital to the Glick JV in exchange for subordinated notes issued by the Glick JV, or the Glick JV Notes. The Glick JV Notes are junior in right of payment to the repayment of temporary contributions made by us to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Glick JV Notes, respectively.
Current wording
On March 19, 2021, we became party to the LLC agreement of the Glick JV. The Glick JV invests primarily in senior secured loans of middle-market companies. We co-invest in these securities with GF Equity Funding through the Glick JV. The Glick JV is managed by a four person Board of Directors, two of whom are selected by us and two of whom are selected by GF Equity Funding. All portfolio decisions and investment decisions in respect of the Glick JV must be approved by the Glick JV investment committee, consisting of one representative selected by us and one representative selected by GF Equity Funding (with approval from a representative of each required). Since we do not have a controlling financial interest in the Glick JV, we do not consolidate the Glick JV. The Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act. The Glick JV is capitalized as transactions are completed. The members provide capital to the Glick JV in exchange for LLC equity interests, and we and GF Debt Funding 2014 LLC, or GF Debt Funding, an entity advised by affiliates of GF Equity Funding, provide capital to the Glick JV in exchange for subordinated notes issued by the Glick JV, or the Glick JV Notes. The Glick JV Notes are junior in right of payment to the repayment of temporary contributions made by us to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Glick JV Notes, respectively.
Previous wording
The cost and fair value of our aggregate investment in the Glick JV was $51.3 million and $49.9 million, respectively, as of June 30, 2024. The cost and fair value of our aggregate investment in the Glick JV was $50.3 million and $50.0 million, respectively, as of September 30, 2023. For the three and nine months ended June 30, 2024, our investment in the Glick JV Notes earned interest income of $1.8 million and $5.4 million, respectively. For the three and nine months ended June 30, 2023, our investment in the Glick JV Notes earned interest income of $1.8 million and $5.0 million, respectively. We did not earn any dividend income for the three and nine months ended June 30, 2024 and 2023 with respect to our investment in the LLC equity interests of the Glick JV.
Current wording
The cost and fair value of our aggregate investment in the Glick JV was $52.0 million and $49.6 million, respectively, as of December 31, 2024. The cost and fair value of our aggregate investment in the Glick JV was $51.7 million and $48.9 million, respectively, as of September 30, 2024. For the three months ended December 31, 2024 and 2023, our investment in the Glick JV Notes earned interest income of $1.7 million and $1.8 million, respectively. We did not earn any dividend income for the three months ended December 31, 2024 and 2023 with respect to our investment in the LLC equity interests of the Glick JV.
Previous wording
Comparison of Three and Nine Months ended June 30, 2024 and June 30, 2023
Current wording
Comparison of Three Months ended December 31, 2024 and December 31, 2023
Previous wording
Total investment income for the three months ended June 30, 2024 and 2023 was $95.0 million and $101.9 million, respectively. For the three months ended June 30, 2024, this amount consisted of $92.1 million of interest income from portfolio investments (which included $6.1 million of PIK interest), $1.5 million of fee income and $1.4 million of dividend income. For the three months ended June 30, 2023, this amount consisted of $99.3 million of interest income from portfolio investments (which included $4.0 million of PIK interest), $1.6 million of fee income and $1.1 million of dividend income. The decrease of $6.9 million, or 6.8%, in our total investment income for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was due primarily to a $7.2 million decrease in interest income, which resulted from a lower average investment portfolio, an increase in the number of non-accrual investments, and lower OID acceleration, partially offset by a $0.4 million increase in dividend income.
Current wording
Total investment income for the three months ended December 31, 2024 and 2023 was $86.6 million and $98.0 million, respectively. For the three months ended December 31, 2024, this amount consisted of $84.2 million of interest income from portfolio investments (which included $5.7 million of PIK interest), $1.7 million of fee income and $0.8 million of dividend income. For the three months ended December 31, 2023, this amount consisted of $95.3 million of interest income from portfolio investments (which included $3.8 million of PIK interest), $1.3 million of fee income and $1.4 million of dividend income. The decrease of $11.3 million, or 11.6%, in our total investment income for the three months ended December 31, 2024, as compared to the three months ended December 31, 2023, was due primarily to an $11.1 million decrease in interest income, which resulted from decreases in reference rates, the impact of certain investments that were placed on non-accrual status and a smaller investment portfolio, and a $0.6 million decrease in dividend income primarily driven by our investment in SLF JV I. This was partially offset by $0.4 million of higher fee income driven by higher exit fees.
Previous wording
Net expenses (expenses net of fee waivers) for the three months ended June 30, 2024 and 2023 were $50.4 million and $53.5 million, respectively. Net expenses decreased for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, by $3.1 million, or 5.8%. The decrease in net expenses was primarily driven by a $4.5 million reduction in Part I incentive fees due to waivers and lower adjusted net investment income and $0.3 million of lower professional fees. This was partially offset by $1.7 million of higher interest expense due to the impact of rising interest rates on our floating rate liabilities.
Current wording
Net expenses (i.e., expenses net of fee waivers) for the three months ended December 31, 2024 and 2023 were $42.1 million and $53.8 million, respectively. Net expenses decreased for the three months ended December 31, 2024, as compared to the three months ended December 31, 2023, by $11.7 million, or 21.8%. The decrease in net expenses was primarily driven by a $7.5 million reduction in Part I incentive fees (net of waivers), $2.6 million of lower management fees (net of waivers) and $1.6 million of lower interest expense.
Previous wording
Net investment income for the three months ended June 30, 2024 decreased by $3.8 million compared to the three months ended June 30, 2023, primarily as a result of the $6.9 million decrease in total investment income and the $3.1 million decrease in net expenses.
Current wording
Net investment income for the three months ended December 31, 2024 increased by $0.1 million compared to the three months ended December 31, 2023, as a result of the $11.7 million decrease in net expenses, partially offset by a $11.3 million decrease in total investment income and a $0.3 million increase in the provision for taxes on net investment income.
Previous wording
During the three months ended June 30, 2024 and 2023, we recorded aggregate net realized losses of $69.5 million and $10.6 million, respectively, in connection with the exits and restructurings of various investments and foreign currency forward contracts. During the nine months ended June 30, 2024 and 2023, we recorded aggregate net realized losses of $84.5 million and $19.9 million, respectively, in connection with the exits and restructurings of various investments and foreign currency forward contracts. See “Note 8. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation” in the notes to the accompanying Consolidated Financial Statements for more details regarding investment realization events for the three and nine months ended June 30, 2024 and 2023.
Current wording
During the three months ended December 31, 2024 and 2023, we recorded aggregate net realized losses of $17.3 million and $8.5 million, respectively, in connection with the exits and restructurings of various investments and foreign currency forward contracts. See “Note 8. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation” in the notes to the accompanying Consolidated Financial Statements for more details regarding investment realization events for the three months ended December 31, 2024 and 2023.
Previous wording
During the three months ended June 30, 2024 and 2023, we recorded net unrealized appreciation (depreciation) of $26.2 million and $(1.0) million, respectively. For the three months ended June 30, 2024, this consisted of $83.6 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $1.1 million of net unrealized appreciation of foreign currency forward contracts, partially offset by $38.6 million of net unrealized depreciation on debt investments and $19.9 million of net unrealized depreciation on equity investments. For the three months ended June 30, 2023, this consisted of $9.8 million of net unrealized depreciation on debt investments and $0.8 million of net unrealized depreciation on equity investments, partially offset by $5.0 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $4.6 million of net unrealized appreciation of foreign currency forward contracts.
Current wording
During the three months ended December 31, 2024 and 2023, we recorded net unrealized depreciation of $19.6 million and $25.0 million, respectively. For the three months ended December 31, 2024, this consisted of $24.3 million of net unrealized depreciation on debt investments and $17.8 million of net unrealized depreciation on equity investments, partially offset by $10.5 million of net unrealized appreciation of foreign currency forward contracts and $12.0 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses). For the three months ended December 31, 2023, this consisted of $18.8 million of net unrealized depreciation on equity investments, $13.7 million of net unrealized depreciation on debt investments and $7.8 million of net unrealized depreciation of foreign currency forward contracts, partially offset by $15.3 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses).
Previous wording
Our primary uses of cash are for (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including our expenses, the management and incentive fees and any indemnification obligations), (3) debt service of borrowings and (4) cash distributions to stockholders. We may also from time to time repurchase or redeem some or all of our outstanding notes. At a special meeting of our stockholders held on June 28, 2019, our stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the
Current wording
Our primary uses of cash are for (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including our expenses, the management and incentive fees and any indemnification obligations), (3) debt service of borrowings and (4) cash distributions to stockholders. We may also from time to time repurchase or redeem some or all of our outstanding notes. At a special meeting of our stockholders held on June 28, 2019, our stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to us effective as of June 29, 2019. As a result of the reduced asset coverage requirement, we can incur $2 of debt for each $1 of equity as compared to $1 of debt for each $1 of equity. As of December 31, 2024, we had $1,612.9 million in senior securities and our asset coverage ratio was 187.89%. As of December 31, 2024, our target debt to equity ratio was 0.90x to 1.25x (i.e., one dollar of equity for each $0.90 to $1.25 of debt outstanding) and our net debt to equity ratio was 1.03x.
Previous wording
For the nine months ended June 30, 2023, we experienced a net increase in cash and cash equivalents (including restricted cash) of $46.3 million. During that period, net cash used in operating activities was $15.0 million, primarily from funding $597.7 million of investments and $58.8 million of net increase in net receivables from unsettled transactions, partially offset by $521.2 million of principal payments and sale proceeds received, the cash activities related to $133.2 million of net investment income, $22.3 million of cash received in connection with the OSI2 merger and a $20.5 million decrease in due from portfolio companies. During the same period, net cash provided by financing activities was $61.0 million, primarily consisting of $210.0 million of net borrowings under the credit facilities, partially offset by $139.1 million of cash distributions paid to our stockholders.
Current wording
For the three months ended December 31, 2024, we experienced a net increase in cash and cash equivalents (including restricted cash) of $47.5 million. During that period, net cash provided by operating activities was $144.0 million, primarily from $352.5 million of principal payments and sale proceeds received and the cash activities related to $44.3 million of net investment income, partially offset by funding $201.8 million of investments, $53.8 million of net increases in receivables and net decreases in payables from unsettled transactions and a $4.8 million increase in due from broker. During the same period, net cash used in financing activities was $95.3 million, primarily consisting of $43.8 million of cash distributions paid to our stockholders and $50.0 million of net repayments under our credit facilities.
Previous wording
For the nine months ended June 30, 2024, we experienced a net decrease in cash and cash equivalents (including restricted cash) of $38.2 million. During that period, net cash used in operating activities was $76.4 million, primarily from funding $1,025.7 million of investments, partially offset by $723.8 million of principal payments and sale proceeds received, the cash activities related to $130.1 million of net investment income, $77.3 million of net decreases in receivables and net increases in payables from unsettled transactions and a $24.0 million decrease in due from broker. During the same period, net cash provided by financing activities was $38.5 million, primarily consisting of $92.7 million of proceeds from the issuance of shares under the "at the market" offering and $80.0 million net borrowings under credit facilities, partially offset by $133.1 million of cash distributions paid to our stockholders.
Current wording
For the three months ended December 31, 2023, we experienced a net decrease in cash and cash equivalents (including restricted cash) of $13.8 million. During that period, net cash provided by operating activities was $1.1 million, primarily from $217.6 million of principal payments and sale proceeds received, the cash activities related to $44.2 million of net investment income, $77.8 million of net decreases in receivables and net increases in payables from unsettled transactions and a $27.7 million decrease in due from broker, partially offset by funding $359.9 million of investments. During the same period, net cash used by financing activities was $14.6 million, primarily consisting of $47.0 million of cash distributions paid to our stockholders, partially offset by $32.4 million of proceeds from the issuance of shares under the "at the market" offering.
Previous wording
As of June 30, 2024, we had $107.3 million in cash and cash equivalents (including $11.0 million of restricted cash), portfolio investments (at fair value) of $3.1 billion, $27.6 million of interest, dividends and fees receivable, $1.0 million of due from portfolio companies, $827.5 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $32.8 million of net payables from unsettled transactions, $790.0 million of borrowings outstanding under our credit facilities and $907.2 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).
Current wording
As of December 31, 2024, we had $126.1 million in cash and cash equivalents (including $13.2 million of restricted cash), portfolio investments (at fair value) of $2.8 billion, $25.3 million of interest, dividends and fees receivable, $0.4 million of due from portfolio companies, $957.5 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $55.7 million of net receivables from unsettled transactions, $660.0 million of borrowings outstanding under our credit facilities and $917.8 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).
Previous wording
As of September 30, 2023, we had $145.5 million in cash and cash equivalents (including $9.1 million of restricted cash), portfolio investments (at fair value) of $2.9 billion, $44.6 million of interest, dividends and fees receivable, $6.3 million of due from portfolio companies, $907.5 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $44.4 million of net receivables from unsettled transactions, $710.0 million of borrowings outstanding under our credit facilities and $890.7 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).
Current wording
As of September 30, 2024, we had $78.5 million in cash and cash equivalents (including $14.6 million of restricted cash), portfolio investments (at fair value) of $3.0 billion, $38.8 million of interest, dividends and fees receivable, $12.5 million of due from portfolio companies, $907.5 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $1.9 million of net receivables from unsettled transactions, $710.0 million of borrowings outstanding under our credit facilities and $928.7 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).
Previous wording
We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30, 2024, our only off-balance sheet arrangements consisted of $291.4 million of unfunded commitments, which was comprised of $264.3 million to provide debt and equity financing to certain of our portfolio companies and $27.1 million to provide financing to the JVs. Of the $264.3 million, approximately $219.4 million can be drawn immediately with the remaining amount subject to certain milestones that must be met by portfolio companies or other restrictions. As of September 30, 2023, our only off-balance sheet arrangements consisted of $232.7 million of unfunded commitments, which was comprised of $205.6 million to provide debt and equity financing to certain of our portfolio companies and $27.1 million to provide financing to the JVs. Of the $205.6 million, approximately $154.2 million can be drawn immediately with the remaining amount subject to certain milestones that must be met by portfolio companies or other restrictions.
Current wording
We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of December 31, 2024, our only off-balance sheet arrangements consisted of $302.3 million of unfunded commitments, which was composed of $275.2 million to provide debt and equity financing to certain of our portfolio companies and $27.1 million to provide financing to the JVs. Of the $275.2 million, approximately $243.7 million can be drawn immediately with the remaining amount subject to certain milestones that must be met by portfolio companies or other restrictions. As of September 30, 2024, our only off-balance sheet arrangements consisted of $311.4 million of unfunded commitments, which was comprised of $284.3 million to provide debt and equity financing to certain of our portfolio companies and $27.1 million to provide financing to the JVs. Of the $284.3 million, approximately $247.6 million can be drawn immediately with the remaining amount subject to certain milestones that must be met by portfolio companies or other restrictions.
Previous wording
On February 7, 2022, we entered into an equity distribution agreement by and among us, Oaktree, Oaktree Administrator and Keefe, Bruyette & Woods, Inc., JMP Securities LLC, Raymond James & Associates, Inc. and SMBC Nikko Securities America, Inc., as placement agents, in connection with the issuance and sale by us of shares of common stock, having an aggregate offering price of up to $125.0 million. The equity distribution agreement was amended on February 8, 2023 to allow for the sale of shares of our common stock having an aggregate offering price of up to $125 million under our current registration statement and on August 8, 2023 to add Jefferies LLC as an additional placement agent and to remove SMBC Nikko Securities America, Inc. as a placement agent. Sales of the common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or similar securities exchanges or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.
Current wording
We are party to an equity distribution agreement, dated February 7, 2022, as amended, by and among us, the Adviser and Oaktree Administrator and Keefe, Bruyette & Woods, Inc., Citizens JMP Securities, LLC, Jefferies LLC and Raymond James & Associates, Inc., pursuant to which we may offer and sell shares of our common stock from time to time having an aggregate offering price of up to $300.0 million under our current shelf registration statement. Sales of the common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or similar securities exchanges or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.
Previous wording
In connection with the "at the market" offering, we did not issue or sell any shares of common stock during the nine months ended June 30, 2023.
Current wording
In connection with the "at the market" offering, we did not issue and sell any shares of common stock during the three months ended December 31, 2024.
Previous wording
In connection with the "at the market" offering, we issued and sold 4,724,506 shares of common stock during the nine months ended June 30, 2024 for net proceeds of $92.5 million (net of offering costs).
Current wording
In connection with the "at the market" offering, we issued and sold 1,641,416 shares of common stock during the three months ended December 31, 2023 for net proceeds of $32.3 million (net of offering costs).
Previous wording
(1) Net proceeds excludes offering costs of $0.2 million.
Current wording
(1) Net proceeds excludes offering costs of $0.1 million.
Previous wording
(1) Shares were purchased on the open market and distributed other than with respect to the distributions paid on December 31, 2021, March 31, 2022, December 30, 2022, September 29, 2023, December 29, 2023, March 29, 2024 and June 28, 2024.
Current wording
(1) Shares were purchased on the open market and distributed.
Previous wording
(2) New shares were issued with respect to distributions paid on December 31, 2021, March 31, 2022, December 30, 2022, September 29, 2023, December 29, 2023, March 29, 2024 and June 28, 2024.
Current wording
(2) New shares were issued and distributed.
Previous wording
As of June 30, 2024, (i) the size of the our senior secured revolving credit facility, or, as amended and/or restated from time to time, the Syndicated Facility, pursuant to a senior secured revolving credit agreement, with the lenders, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and MUFG Union Bank, N.A. as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents, was $1.218 billion (with an “accordion” feature that permits us, under certain circumstances, to increase the size of the facility to up to the greater of $1.25 billion and our net worth (as defined in the Syndicated Facility) on the date of such increase), (ii) the period during which we may make drawings on $1.035 billion of commitments will expire on June 23, 2027 and the maturity date was June 23, 2028, (iii) the period during which we may make drawings with respect to the remaining commitments will expire on May 4, 2025 and the maturity date is May 4, 2026 and (iv) the interest rate margin for (a) SOFR loans (which may be 1- or 3-month, at our option) was 2.00% plus a SOFR adjustment which ranges between 0.11448% and 0.26161% and (b) alternate base rate loans was 1.00%.
Current wording
Bank, N.A. as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents, was $1.218 billion (with an “accordion” feature that permits us, under certain circumstances, to increase the size of the facility to up to the greater of $1.25 billion and our net worth (as defined in the Syndicated Facility) on the date of such increase), (ii) the period during which we may make drawings on $1.035 billion of commitments will expire on June 23, 2027 and the maturity date was June 23, 2028, (iii) the period during which we may make drawings with respect to the remaining commitments will expire on May 4, 2025 and the maturity date is May 4, 2026 and (iv) the interest rate margin for (a) SOFR loans (which may be 1- or 3-month, at our option) was 2.00% plus a SOFR adjustment which ranges between 0.11448% and 0.26161% and (b) alternate base rate loans was 1.00%.
Previous wording
(1) As contractually required, we report financial covenants based on the last filed quarterly or annual report, in this case our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. We were in compliance with all financial covenants under the Syndicated Facility based on the financial information contained in this Quarterly Report on Form 10-Q.
Current wording
(1) As contractually required, we report financial covenants based on the last filed quarterly or annual report, in this case our Annual Report on Form 10-K for the year ended September 30, 2024. We were in compliance with all financial covenants under the Syndicated Facility based on the financial information contained in this Quarterly Report on Form 10-Q.
Previous wording
As of June 30, 2024 and September 30, 2023, we had $505.0 million and $430.0 million of borrowings outstanding under the Syndicated Facility, which had a fair value of $505.0 million and $430.0 million, respectively. Our borrowings under the Syndicated Facility bore interest at a weighted average interest rate of 7.576% and 6.584% for the nine months ended June 30, 2024 and 2023, respectively. For the three and nine months ended June 30, 2024, we recorded interest expense (inclusive of fees) of $10.2 million and $29.3 million, respectively, related to the Syndicated Facility. For the three and nine months ended June 30, 2023, we recorded interest expense (inclusive of fees) of $14.3 million and $37.4 million, respectively, related to the Syndicated Facility.
Current wording
As of each of December 31, 2024 and September 30, 2024, we had $430.0 million of borrowings outstanding under the Syndicated Facility, which had a fair value of $430.0 million. Our borrowings under the Syndicated Facility bore interest at a weighted average interest rate of 6.841% and 7.621% for the three months ended December 31, 2024 and 2023, respectively. For the three months ended December 31, 2024 and 2023, we recorded interest expense (inclusive of fees) of $9.5 million and $9.6 million, respectively, related to the Syndicated Facility.
Previous wording
On January 23, 2023, as a result of the consummation of the OSI2 Merger, we became party to a revolving credit facility, or, as amended and/or restated from time to time, the OSI2 Citibank Facility, with OSI 2 Senior Lending SPV, LLC, or OSI 2 SPV, our wholly-owned and consolidated subsidiary, as the borrower, us, as collateral manager, each of the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Deutsche Bank Trust Company Americas, as collateral agent.
Current wording
On January 23, 2023, we became party to a revolving credit facility, or, as amended and/or restated from time to time, the OSI2 Citibank Facility, with OSI 2 Senior Lending SPV, LLC, or OSI 2 SPV, our wholly-owned and consolidated subsidiary, as the borrower, us, as collateral manager, each of the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Deutsche Bank Trust Company Americas, as collateral agent.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
As of December 31, 2024, (i) the size of the our senior secured revolving credit facility, or, as amended and/or restated from time to time, the Syndicated Facility, pursuant to a senior secured revolving credit agreement, with the lenders, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and MUFG Union
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Our investments principally consist of loans, common and preferred equity and warrants in privately-held companies, Senior Loan Fund JV I, LLC, or SLF JV I, a joint venture through which we and Trinity Universal Insurance Company, a
Previous report — wording carried elsewhere
On March 19, 2021, we became party to the LLC agreement of the Glick JV. The Glick JV invests primarily in senior secured loans of middle-market companies. We co-invest in these securities with GF Equity Funding through the Glick JV. The Glick JV is managed by a four person Board of Directors, two of whom are selected by us and two of whom are selected by GF Equity Funding. All portfolio decisions and investment decisions in respect of the Glick JV must be approved by the Glick JV investment committee, consisting of one representative selected by us and one representative selected by GF Equity Funding
Previous report — wording carried elsewhere
During the nine months ended June 30, 2024 and 2023, we recorded net unrealized depreciation of $24.1 million and $42.3 million, respectively. For the nine months ended June 30, 2024, this consisted of $49.6 million of net unrealized depreciation on debt investments, $30.5 million of net unrealized depreciation on equity investments and $4.5 million of net unrealized depreciation of foreign currency forward contracts, partially offset by $60.5 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses). For the nine months ended June 30, 2023, this consisted of $54.3 million of net unrealized depreciation on debt investments and $4.8 million of net unrealized depreciation of foreign currency forward contracts, partially offset by $11.8 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $5.1 million of net unrealized appreciation on equity investments.
Previous report — wording carried elsewhere
Investment Company Act to us effective as of June 29, 2019. As a result of the reduced asset coverage requirement, we can incur $2 of debt for each $1 of equity as compared to $1 of debt for each $1 of equity. As of June 30, 2024, we had $1,743.4 million in senior securities and our asset coverage ratio was 183.36%. As of June 30, 2024, our target debt to equity ratio was 0.90x to 1.25x (i.e., one dollar of equity for each $0.90 to $1.25 of debt outstanding) and our net debt to equity ratio was 1.10x.