Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q1 FY2020 Earnings Presentation
21 slides from Oaktree Specialty Lending's earnings presentation, Feb 6, 2020
Slide 1: First Quarter Fiscal Year 2020 Earnings Presentation
First Quarter Fiscal Year 2020 Earnings Presentation February 6, 2020 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: Highlights for the Quarter Ended December 31, 2019
Highlights for the Quarter Ended December 31, 2019 $6.61 per share as of December 31, 2019, up $0.01 as compared to $6.60 as of September 30, 2019 NAV has grown by $59 million ($0.42 per share) and $111 million ($0.79 per share) since December 31, 2018 and December 31, 2017, respectively Eighth cons
Slide 4: Compelling Track Record of NAV Performance Under Oaktree Management
Compelling Track Record of NAV Performance Under Oaktree Management NAV and Cumulative Distributions Paid Per Share 1Cumulative distributions declared and paid from December 31, 2017 through December 31, 2019. 1
Slide 5: Portfolio Summary as of December 31, 2019
Portfolio Summary as of December 31, 2019 (As % of total portfolio at fair value; $ in millions) (As % of total portfolio at fair value) Portfolio Composition Top 10 Industries2,3 Portfolio Characteristics (at fair value) Note:Numbers may not sum due to rounding. 1Excludes investments in the Kemper
Slide 6: Portfolio Diversity
Portfolio Diversity OCSL’s portfolio is diverse across borrowers and industries (As % of total portfolio at fair value) Portfolio by Industry1,2 Diversity by Investment Size Top 10 Investments 27% Next 15 Investments 24% Remaining 80 Investments 40% Kemper JV 9% As of December 31, 2019 Note:Numbers
Slide 7: Debt Portfolio Company Metrics
Debt Portfolio Company Metrics OCSL’s portfolio has transitioned into higher quality, larger borrowers with lower leverage, reflecting our defensive investment approach Debt Portfolio Company EBITDA1 Debt Portfolio Company Leverage1 Median Debt Portfolio Company EBITDA ($ in millions) Source: S&P Gl
Slide 8: Historical Portfolio Progression: Core and Non-Core Investments
Non-Core Investments: 13% of portfolio Non-Core Investments: 63% of portfolio Historical Portfolio Progression ($ in millions; at fair value) Portfolio by Category1 -80% since 9/30/17 Non-Core Investments 1Excludes investments in the Kemper JV. 2Exited publicly traded equity position in Yeti Holding
Slide 9: Non-Core Investment Portfolio Detail
Note:Numbers may not sum due to rounding. 1Excludes equity positions in non-accrual debt positions and equity in aviation entities. 2Exited publicly traded equity position in Yeti Holdings subsequent to December 31, 2019. Non-Core Investment Portfolio Detail Non-Core Investment Portfolio Characteris
Slide 10: Q1 2020 Portfolio Originations
Q1 2020 Portfolio Originations $134 million of new investment commitments $136 million of new funded investments1 13 portfolio companies diversified across 11 industries 8.1% weighted average yield at cost of new debt investments 100% of new debt investment commitments at floating rates 90% of new i
Slide 11: Financial Highlights
Financial Highlights 1See page 19 for a description of this non-GAAP measure and a reconciliation from net investment income per share to adjusted net investment income per share. 2Net of unamortized financing costs. ($ in thousands, except per share amounts) As of 12/31/2019 9/30/2019 6/30/2019 3/3
Slide 12: Portfolio Highlights
Portfolio Highlights ($ in thousands) As of 12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018 Investments at Fair Value $1,467,627 $1,438,042 $1,455,031 $1,504,888 $1,464,885 Number of Portfolio Companies 106 104 105 110 110 Average Portfolio Company Debt Investment Size $15,300 $15,300 $15,400 $1
Slide 13: Investment Activity
Investment Activity ($ in thousands) As of 12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018 New Investment Commitments $134,200 $138,400 $66,800 $100,000 $231,100 New Funded Investment Activity1 $136,200 $128,500 $74,100 $111,100 $162,400 Proceeds from Prepayments, Exits, Other Paydowns and Sales
Slide 14: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares
Slide 15: Capital Structure Overview
Capital Structure Overview ($ in millions) ($ in millions) (As % of total funding sources) ($ in millions) Funding Sources and Credit Ratings Funding Sources by Type Historical Principal Outstanding and Leverage Ratio Maturity Profile of Liabilities Committed Principal Outstanding Interest Rate Matu
Slide 16: Joint Venture Summary
Joint Venture Summary ($ in millions; at fair value) ($ in millions; at fair value) (As % of total portfolio at fair value) Joint Venture Overview Portfolio Summary Joint Venture Structure Debt Portfolio Top Ten Industries1 As of December 31, 2019 1Based on GICS sub-industry classification. Joint ve
Slide 17: Opportunities to Increase Return on Equity
Operate within target leverage range of 0.70x-0.85x debt-to-equity Opportunities to Increase Return on Equity As of December 31, 2019 Note:Numbers may not sum due to rounding. 1 Redeploy non-interest generating investments 2 Utilize additional investment capacity at the Kemper JV 3 0.58x debt-to-equ
Slide 18: Appendix
OAKTREE OCSL | Specialty Lending Corporation Appendix
Slide 19: Historical Statement of Operations
Historical Statement of Operations ($ in thousands, except per share amounts) For the three months ended 12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018 Interest income $28,405 $30,662 $32,910 $34,309 $35,789 PIK interest income 1,161 1,187 1,198 2,280 832 Fee income 1,071 2,550 1,826 1,132 1,20
Slide 20: Reconciliation of Adjusted Net Investment Income
Reconciliation of Adjusted Net Investment Income ($ in thousands, except per share amounts) As of 12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018 GAAP net investment income $7,836 $16,275 $16,608 $17,709 $17,317 Part II incentive fee (net of waivers) 6,251 438 685 - - Adjusted net investment inc
Slide 21: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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