Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q2 2018 Earnings Presentation
14 slides from Oaktree Specialty Lending's earnings presentation, May 8, 2018
Slide 1: Second Quarter Fiscal Year 2018 Earnings Presentation
Second Quarter Fiscal Year 2018 Earnings Presentation May 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: Q2 2018 Accomplishments and Highlights
Q2 2018 Accomplishments and Highlights Net asset value per share of $5.87 as of March 31, 2018 vs. $5.81 as of December 31, 2017 Credit quality remained stable as NAV per share increased $0.06 from December 31, 2017 Monetized $122 million of non-core investments during Q2 2018 Non-core investments r
Slide 4: Portfolio Summary
Portfolio Summary as of March 31, 2018 (As % of total portfolio, at fair value; $ in millions) (As % of total portfolio, at fair value) Portfolio Composition Top 10 Industries4 Portfolio Characteristics (at fair value) As of March 31, 2018, unless otherwise noted 1Includes the investments in Kemper
Slide 5: Portfolio Summary: Core vs. Non-core Assets
Portfolio Summary: Core vs. Non-core Assets $732 million (58% of the total portfolio at fair value) Average debt price: 99.6% Represents 45 companies, an increase from 42 in Q1 2018 $223 million of investments originated during Q2 2018 Non-core Investments1 ($ in millions, at fair value) As of March
Slide 6: Non-core: Performing Investments
Non-core: Performing Investments Investment Portfolio Characteristics $332 million – Debt investments at fair value Reduction of approximately $99 million during the quarter which were executed at or above December 31, 2017 fair values $284 million – private loans We expect to exit over 30% of the r
Slide 7: 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) $109 million of non-core, underperforming investments $31 million on non-accrual, down from $41 million a
Slide 8: Q2 2018 Portfolio Originations
Q2 2018 Portfolio Originations $223 million of new commitments $218 million in 9 new portfolio companies and $5 million in 1 existing portfolio company 43% First lien 48% Second lien 9% Unsecured 10 industry sectors 10.3% weighted average yield at cost on new investments New Investment Highlights1 1
Slide 9: Historical Financial Information
Historical Financial Information ($ in thousands, except per share data) Operating Results Q2’18 Q1’18 Q4’17 Q3'17 Q2'17 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Total investment income $34,779 $33,876 $35,732 $44,917 $45,555 Net expenses $19,516 $20,554 $24,268 $25,527 $27,051 Net investment income $15,2
Slide 10: Historical Portfolio Activity
Historical Portfolio Activity ($ in thousands) As of and for Three Months Ended Q2’18 Q1’18 Q4’17 Q3’17 Q2’17 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Investments at Fair Value $1,400,684 $1,415,404 $1,541,755 $1,790,540 $1,788,690 Number of Portfolio Companies 115 122 125 133 133 Average Portfolio Compan
Slide 11: Net Asset Value Per Share Bridge – 2Q 2018
Net Asset Value Per Share Bridge – 2Q 2018 ($0.085) 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 avera
Slide 12: Capital Structure Optimization
Capital Structure Optimization Funding Sources as of March 31, 2018 Capacity Outstanding Interest Rate Maturity Syndicated Credit Facility $600.0 million $183.0 million LIBOR+225-275 bps November 2021 2019 Notes2 $228.8 million $228.8 million 4.875% March 2019 2024 Notes $75.0 million $75.0 million
Slide 13: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity Rotation out of broadly syndicated loans priced below LIBOR + 400 Rotated out of approximately $47 million during the quarter $35 million remaining as of March 31, 2018 Redeploy non-income generating investments comprised of equity, limited partnership inte
Slide 14: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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