Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q2 2021 Earnings Presentation
21 slides from Oaktree Specialty Lending's earnings presentation, May 6, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
Exhibit 99.2 second quarter 2021 earnings presentation may 6, 2021 nasdaq: ocslExhibit 99.2 second quarter 2021 earnings presentation may 6, 2021 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 statements
Slide 3: Highlights for the Quarter Ended March 31, 2021
Highlights for the Quarter Ended March 31, 2021 • $7.09, up 4% from $6.85 as of December 31, 2020 and up 7% from $6.61 as of December 31, 2019 (prior to the onset of the pandemic) net asset value per share • Quarterly increase primarily due to realized and unrealized gains on certain debt and equity
Slide 4: Portfolio Summary as of March 31, 2021
Portfolio Summary as of March 31, 2021 portfolio characteristics portfolio composition (At fair value) As % of total portfolio at fair value ($ in millions) 4% First Lien – $1,591 1% 8% $2.3bn 137 Second Lien – $422 total investments portfolio companies 18% Unsecured – $26 Equity – $103 68% Joint Ve
Slide 5: OCSL's Portfolio Diversity Provides Downside Protection
OCSL’s Portfolio Diversity Provides Downside Protection 1 diversity by investment size portfolio by industry (As % of total portfolio at fair value) (As % of total portfolio at fair value) Industry % of Portfolio Joint Ventures Software 12.7% 8% Top 10 Investments IT Services 9.5 20% Pharmaceuticals
Slide 6: Investment Activity
Investment Activity new investment highlights historical funded originations and exits ($ in millions) 350 $302 $300 $252 $242 $229 250 $199 $184 $318mm $302 million 200 $161 $154 $146 $128 150 new investment new investment 1 100 commitments fundings 50 0 3/31/20 6/30/20 9/30/20 12/31/20 3/31/21 1 2
Slide 7: Investment Activity (continued)
Investment Activity (continued) new investment commitment detail ($ in millions) Security Type Market Investment Number of Unsecured & Private Primary Secondary Avg. Secondary Quarter Commitments Deals First Lien Second Lien Other Placement (Public) (Public) Purchase Price 2Q2020 $273 39 $210 $21 $4
Slide 8: Non-Core Investment Portfolio Detail
Non-Core Investment Portfolio Detail non-core investment portfolio characteristics non-core portfolio composition At fair value ($ in millions) debt investments $180 $164 160 $8 • $86 million at fair value in four companies 140 120 $70 • Exited one non-core position at par during the quarter ended A
Slide 9: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 GAAP Net Investment Income per Share $0.12 $0.07 $0.17 $0.12 $0.16 1 Adjusted Net Investment Income per Share $0.14 $0.14 $0.17 $0.12 $0.12 Net Realized and U
Slide 10: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Investments at Fair Value $2,327,353 $1,712,324 $1,573,851 $1,561,153 $1,392,187 Number of Portfolio Companies 137 115 113 119 128 Average Portfolio Company Debt Investment Size $17,600 $16,
Slide 11: Investment Activity
Investment Activity As of ($ in thousands) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 New Investment Commitments $317,700 $286,300 $148,500 $260,500 $272,900 1 New Funded Investment Activity $301,800 $241,500 $146,300 $198,500 $251,700 Proceeds from Prepayments, Exits, Other Paydowns and Sal
Slide 12: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge adjusted net realized and unrealized gains (losses) $8.00 $0.25 adjusted nii $0.14 $0.01 7.50 ($0.23) ($0.02) ($0.12) $0.47 ($0.00) $0.02 7.00 $0.12 6.50 6.00 $7.09 $7.09 5.50 $6.85 5.00 4.50 4.00 12/31/20 NAV GAAP Net Interest Income Part II Incentive Net Unrealized
Slide 13: Capital Structure Overview
Capital Structure Overview funding sources ($ in millions) 0.85x to 1.00x Principal target leverage ratio Committed Outstanding Interest Rate Maturity 1 2 Syndicated Credit Facility $800 $575 LIBOR + 2.00% 2/25/2024 2025 Notes 300 300 3.500% 2/25/2025 3 Citibank Facility 180 124 LIBOR + 1.70% / 2.25
Slide 14: Funding and Liquidity Metrics
Funding and Liquidity Metrics leverage utilization liquidity rollforward ($ in millions) ($ in millions) $1,600 6/30/2020 9/30/2020 12/31/2020 3/31/2021 $1,440 1,400 Credit Facility Committed $700 $700 $800 $1,140 $325 Credit Facility Drawn (467) (415) (400) (815) 1,200 $1,100 $1,000 $1,000 Cash and
Slide 15: Strategic Joint Ventures are Accretive to Earnings
Strategic Joint Ventures are Accretive to Earnings ocsl’s joint ventures are income-enhancing vehicles that primarily invest in senior secured loans of middle market companies and other corporate debt securities Key Attributes of Joint Ventures: • Equity ownership: 87.5% OCSL and 12.5% joint venture
Slide 16: Compelling Performance Under Oaktree Management
Compelling Performance Under Oaktree Management nav and cumulative distributions paid per share ($ in millions) $9.00 8.00 $1.28 $1.16 7.00 $1.05 $0.75 $0.66 $0.56 $0.47 $0.94 $0.37 $0.28 $0.09 $0.18 6.00 $0.85 5.00 $7.09 4.00 $6.85 $6.60 $6.60 $6.61 $6.55 $6.49 $6.19 $6.09 $6.09 $5.95 $5.87 $5.81 $
Slide 17: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity 1 2 3 4 optimization of realization of rotate into higher- operate within target joint ventures merger synergies yielding investments leverage range • $163 million at fair value of • Current target leverage range: • Opportunity to increase • Merger with OCS
Slide 18: Appendix
Appendix OAKTREE OCSL I Specialty Lending Corporation
Slide 19: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 ($ in thousands) investment income Interest income $35,655 $31,633 $37,153 $30,112 $29,898 PIK interest income 3,801 3,089 2,573 2,183 1,946 Fee income 2,278 3,352 3,571 1,827 2,050 Divide
Slide 20: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 ($ in thousands, except per share amounts) net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) 65,144 47,556 39,468 100,572 (163,533) New real
Slide 21: Non-GAAP Disclosures
Non-GAAP Disclosures On March 19, 2021, the Company completed the Merger. The Merger was accounted for as an asset acquisition 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 OCSI’s s
Oaktree Specialty Lending — Q2 2021 Earnings Presentation on 6ix