Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q3 2018 Earnings Presentation
16 slides from Oaktree Specialty Lending's earnings presentation, Aug 8, 2018
Slide 1: Third Quarter Fiscal Year 2018 Earnings Presentation
Third Quarter Fiscal Year 2018 Earnings Presentation August 8, 2018 Nasdaq: OCSL Exhibit 99.2
Slide 2: Forward Looking Statements
Forward Looking Statements 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 statements as to: our future o
Slide 3: Accomplishments Since Oaktree Became Investment Adviser on October 17, 2017
Accomplishments Since Oaktree Became Investment Adviser on October 17, 2017 ü Significant Progress Rotating Portfolio Reduced non-core assets by $536 million in 55 individual positions, including many in illiquid or challenged investments The vast majority of these investments were exited at par val
Slide 4: Accomplishments Since Oaktree Became Investment Adviser (continued)
Accomplishments Since Oaktree Became Investment Adviser on October 17, 2017 (continued) ü Optimized Capital Structure Lowered borrowing costs and obtained favorable terms on new credit facility Established new $600 million syndicated credit facility in November 2017 Amended facility in July 2018 to
Slide 5: Q3 2018 Highlights
Q3 2018 Highlights Net asset value per share increased $0.08 per share to $5.95 as of June 30, 2018 Realized gains resulting from monetizations of investments contributed to the NAV increase Credit quality remained stable for the second consecutive quarter Monetized $179 million of non-core investme
Slide 6: Portfolio Summary
Portfolio Summary as of June 30, 2018 (As % of total portfolio, at fair value; $ in millions) (As % of total portfolio, at fair value) Portfolio Composition Top 10 Industries3 Portfolio Characteristics (at fair value) As of June 30, 2018, unless otherwise noted 1 Includes the investments in Kemper J
Slide 7: Portfolio Summary: Core vs. Non-core Assets
Portfolio Summary: Core vs. Non-core Assets $1.0 billion (74% of the total portfolio at fair value) Average debt price: 99.6% Represents 66 companies, increase from 45 in Q2 2018 $380 million of investments originated during Q3 2018 Non-core Investments1 Performing Investments $252 million (18% of t
Slide 8: Non-core: Performing Investments
As of June 30, 2018, unless otherwise noted Note:Numbers may not sum due to rounding. 1 There can be no assurance that we will be successful in monetizing these investments on favorable terms or at all. Non-core: Performing Investments Investment Portfolio Characteristics $189 million – 15 debt inve
Slide 9: Non-core: Underperforming Investments
Non-core: Underperforming Investments Non-core: Underperforming by Type Investment Portfolio Characteristics (As % of non-core underperforming investment portfolio, at fair value; $ in millions) $104 million total debt investments $67 million on non-accrual Represents 8 companies Average debt price:
Slide 10: Q3 2018 Portfolio Originations
Q3 2018 Portfolio Originations $380 million of new commitments $343 million in 24 new portfolio companies and $37 million in 4 existing portfolio companies 56% First lien 24% Second lien 20% Unsecured Diversified across 21 industry sectors 8.1% weighted average yield at cost on new investments 80% o
Slide 11: Historical Financial Information
Historical Financial Information ($ in thousands, except per share data) Operating Results Q3’18 Q2’18 Q1’18 Q4’17 Q3'17 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Total investment income $31,847 $34,779 $33,876 $35,732 $44,917 Net expenses 17,417 19,516 20,554 24,268 25,527 Net investment income 14,430 15,
Slide 12: Historical Portfolio Activity
Historical Portfolio Activity ($ in thousands) As of and for Three Months Ended Q3’18 Q2’18 Q1’18 Q4’17 Q3’17 Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 Investments at Fair Value $1,520,518 $1,400,684 $1,415,404 $1,541,755 $1,790,540 Number of Portfolio Companies 116 115 122 125 133 Average Portfolio Compan
Slide 13: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge ($0.095) Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number
Slide 14: Capital Structure Optimization
Capital Structure Optimization Funding Sources as of June 30, 2018 Capacity Outstanding Interest Rate Maturity Syndicated Credit Facility $600.0 million $211.0 million LIBOR+2.25%-2.75% November 2021 2019 Notes2 $228.8 million $228.8 million 4.875% March 2019 2024 Notes $75.0 million $75.0 million 5
Slide 15: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity Redeploy non-interest generating investments comprised of equity, limited partnership interests and loans on non-accrual Monetized $36 million of equities and limited partnership interests and exited $6 million of investments in two portfolio companies on n
Slide 16: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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