On November 14, 2023, Oaktree Specialty Lending Corp (OCSL, Financial) released its 8-K filing, announcing financial results for the fourth fiscal quarter and full year ended September 30, 2023. The company reported solid performance with strong earnings growth and strategic deployment of capital.
Financial Highlights and Distributions
Armen Panossian, CEO and CIO, highlighted the company's solid fourth-quarter results, which concluded a fiscal year marked by strong earnings growth and attractive new deployment activity. OCSL produced record adjusted net investment income for the year, benefiting from higher base rates and the ability to deploy capital at wider spreads, resulting in an ROE of over 12% for the year.
The Board of Directors declared quarterly and special distributions of $0.55 per share and $0.07 per share, respectively, payable on December 29, 2023, to stockholders of record on December 15, 2023.
Operational and Financial Results
OCSL's total investment income for the quarter was $101.9 million, with net investment income at $47.5 million. The adjusted net investment income per share for Q4 was $0.62. For the full year, the adjusted net investment income reached $177.8 million, or $2.47 per share, reflecting a significant increase from the previous year.
Net expenses for the quarter totaled $54.4 million, with a notable increase in interest expense due to rising interest rates. The full-year net expenses amounted to $198.5 million, up from the previous year, primarily driven by higher interest expense and increased average borrowings.
Portfolio and Investment Activity
As of September 30, 2023, OCSL's investment portfolio at fair value was $2.9 billion across 143 companies. The portfolio was predominantly composed of debt investments, with a significant portion in first lien loans. During the quarter, OCSL made new investment commitments totaling $87.5 million and received proceeds from prepayments, exits, and other paydowns amounting to $364.4 million.
Liquidity and Capital Resources
OCSL's liquidity position remains strong, with $136.5 million of unrestricted cash and cash equivalents and $907.5 million of undrawn capacity on its credit facilities as of September 30, 2023. The company's total debt to equity ratio was 1.10x, and the net debt to equity ratio was 1.01x.
Non-GAAP Financial Measures
OCSL provided non-GAAP financial measures, which exclude the non-cash income/gain/loss resulting from the mergers and are used by management to evaluate the economic earnings of its investment portfolio. These measures are intended to provide additional insight into the company's performance and are not a substitute for GAAP measures.
OCSL will host a conference call to discuss its fourth fiscal quarter and full year 2023 results, providing an opportunity for investors to gain further insights into the company's performance and strategies.
For a more detailed analysis and financial tables, investors are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Oaktree Specialty Lending Corp for further details.
