Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q2 2023 Earnings Presentation
21 slides from Oaktree Specialty Lending's earnings presentation, May 4, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
second quarter 2023 earnings presentation may 4, 2023 nasdaq: ocsl
Slide 2: Forward Looking Statements & Legal Disclosures
Forward Looking Statements & Legal Disclosures Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward- looking statements contained in this presentation may include statement
Slide 3: Highlights for the Quarter Ended March 31, 2023
Highlights for the Quarter Ended March 31, 2023 • $0.62 per share as compared with $0.61 per share for the quarter ended December 31, 2022 adjusted net • GAAP net investment income was $0.63 per share, consistent with the quarter ended December 31, 2022 investment income1 • The increase in adjusted
Slide 4: Portfolio Summary
Portfolio Summary portfolio characteristics portfolio composition (At fair value) (As % of total portfolio at fair value; $ in millions) 4% 2% First Lien – $2,373 $3.2bn 165 6% Second Lien – $413 13% total investments portfolio companies Unsecured – $59 Equity – $131 75% Joint Ventures – $190 11.9%
Slide 5: Portfolio Diversity
Portfolio Diversity diversity by investment size portfolio by industry1 (As % of total portfolio at fair value) (As % of total portfolio at fair value) Industry % of Portfolio Joint Ventures 6% Software 18.2% Top 10 Investments Pharmaceuticals 5.2 20% Financial Services 4.7 Professional Services 4.1
Slide 6: Investment Activity
Investment Activity new investment highlights historical funded originations and exits ($ in millions) $300 $274 $236 250 $124mm $104mm 200 150 $180 $130 $130 $146 $162 new investment new investment $104 $104 100 $85 commitments fundings1 50 0 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 New Funded Inve
Slide 7: Investment Activity (continued)
Investment Activity (continued) new investment commitment detail ($ in millions) Security Type Market Investment Number of Unsecured & Private Primary Secondary Avg. Secondary Fiscal Quarter Commitments Deals First Lien Second Lien Other Placement (Public) (Public) Purchase Price 2Q2020 $273 39 $210
Slide 8: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 GAAP Net Investment Income per Share $0.63 $0.63 $0.59 $0.66 $0.66 Adjusted Net Investment Income per Share1 $0.62 $0.61 $0.55 $0.51 $0.53 Net Realized and Un
Slide 9: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Investments at Fair Value $3,164,860 $2,642,870 $2,494,111 $2,565,389 $2,644,775 Number of Portfolio Companies 165 156 149 151 146 Average Portfolio Company Debt Investment Size $18,800 $16,
Slide 10: Investment Activity
Investment Activity As of ($ in thousands) 3/31/20231 12/31/2022 9/30/2022 6/30/2022 3/31/2022 New Investment Commitments $123,800 $250,300 $97,000 $131,900 $227,900 New Funded Investment Activity2 $103,600 $274,400 $84,500 $130,000 $236,200 Proceeds from Prepayments, Exits, Other Paydowns and Sales
Slide 11: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge adjusted net realized and unrealized adjusted nii gains (losses), net of taxes $21.00 $0.62 ($0.05) ($0.01) ($0.25) ($0.08) $0.29 20.00 $0.63 ($0.55) 19.00 18.00 17.00 $19.63 $19.66 16.00 15.00 14.00 12/31/22 NAV GAAP Net Investment Interest Income Net Unrealized Net
Slide 12: Capital Structure Overview
Capital Structure Overview funding sources ($ in millions) 0.90x to 1.25x Committed Principal Outstanding Interest Rate Maturity target leverage ratio Syndicated Credit Facility $1,000 $750 SOFR + 2.00% 5/4/2026 Citibank Facility 200 160 LIBOR + 1.25%-2.25%1 11/18/2024 OSI2 Citibank Facility 250 205
Slide 13: Funding and Liquidity Metrics
Funding and Liquidity Metrics leverage utilization liquidity overview ($ in millions) ($ in millions) $2,500 6/30/2022 9/30/2022 12/31/2022 3/31/2023 $2,100 Credit Facilities Committed $1,200 $1,200 $1,200 $1,450 2,000 $1,850 $1,850 $1,850 $335 Credit Facilities Drawn (745) (700) (860) (1,115) $455
Slide 14: Strategic Joint Ventures are Accretive to Earnings
Strategic Joint Ventures are Accretive to Earnings ocsl’s joint ventures are income-enhancing vehicles that primarily invest in senior secured loans of middle market companies and other corporate debt securities Key Attributes of Joint Ventures: • Equity ownership: 87.5% OCSL and 12.5% joint venture
Slide 15: Compelling Performance Under Oaktree Management
Compelling Performance Under Oaktree Management nav and cumulative distributions paid per share1 $30.00 25.00 $5.12 $5.60 $4.65 $7.69 $4.22 $6.09 $6.60 $7.14 $3.83 $3.47 $1.97 $2.25 $3.14 $1.40 $1.68 20.00 $2.82 $0.42 $0.42 $1.11 $0.26 $0.54 $0.83 $2.54 15.00 $21.66 $21.84 $22.03 $21.78 $21.27 $20.6
Slide 16: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity 1 2 3 positioned for continued continue rotating into realization of interest higher-yielding merger synergies rate increases investments • 88% of the debt portfolio at fair • Opportunity to improve the • Merger with OSI2 closed on value was composed of flo
Slide 17: Appendix
OCSL | Specialty Lending Corporation
Slide 18: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended ($ in thousands) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 investment income Interest income $88,745 $69,978 $61,719 $54,728 $57,019 PIK interest income 4,123 6,130 6,011 5,178 4,674 Fee income 2,380 2,021 1,539 2,275 1,905 Divide
Slide 19: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended ($ in thousands, except per share amounts) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) $(18,279) $(22,982) $(17,869) $(86,755) $(27,03
Slide 20: Non-GAAP Disclosures
Non-GAAP Disclosures The OCSI Merger and the OSI2 Merger (the “Mergers”) were accounted for as asset acquisitions in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations—Related Issues ("ASC 805"). The consideration paid to each of the stockhold
Slide 21: Contact Us
contact us: visit us: Investor Relations oaktreespecialtylending.com Michael Mosticchio (212) 284-1900 ocsl-ir@oaktreecapital.com
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