Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q1 2021 Earnings Presentation
23 slides from Oaktree Specialty Lending's earnings presentation, Feb 4, 2021
Slide 1: First Quarter Fiscal Year 2021 Earnings Presentation
First Quarter Fiscal Year 2021 Earnings Presentation February 4, 2021 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, 2020
Highlights for the Quarter Ended December 31, 2020 Net Asset Value $6.85 per share, up 5% from $6.49 per share as of September 30, 2020 and up 4% from $6.61 per share as of December 31, 2019 Quarterly increase primarily due to unrealized gains on debt investments and gains resulting from the realiza
Slide 4: Update on Pending Merger with OCSI
Update on Pending Merger with OCSI OCSL – OCSI Merger Agreement Summary On October 28, 2020, the Company entered into an agreement to merge with OCSI, an affiliated business development company managed by Oaktree, with the Company as the surviving company Under the terms of the proposed merger, OCSI
Slide 5: Portfolio Summary as of December 31, 2020
Portfolio Summary as of December 31, 2020 (As % of total portfolio at fair value; $ in millions) (As % of total portfolio at fair value) Portfolio Composition Top Ten Industries2,3 Portfolio Characteristics Note:Numbers may not sum due to rounding. 1Excludes negative EBITDA borrowers, investments in
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 Diversity by Investment Size Top 10 Investments 23% Next 15 Investments 22% Remaining 89 Investments 48% Kemper JV 7% As of December 31, 2020 Note:Numbers ma
Slide 7: Investment Activity
Investment Activity New Investment Highlights (As % of new investment commitments; $ in millions) New Investment Composition ($ in millions) Historical Funded Originations and Exits Note:Numbers rounded to the nearest million or percentage point and may not sum as a result. 1New funded investments i
Slide 8: Investment Activity (continued)
Investment Activity (continued) ($ in millions) New Investment Commitment Detail Security Type Market Quarter Investment Commitments Number of Deals First Lien Second Lien Unsecured & Other Private Placement Primary (Public) Secondary (Public) Avg. Secondary Purchase Price 2Q2020 $273 39 $210 $21 $4
Slide 9: Non-Core Investment Portfolio Detail
8% of Portfolio2 63% of Portfolio2 Note:Numbers may not sum due to rounding. 1Excludes OCSL’s equity investment in First Star Speir Aviation Limited. 2Excludes investments in the Kemper JV. Non-Core Investment Portfolio Detail Non-Core Investment Portfolio Characteristics Private Loans $61 million a
Slide 10: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares
Slide 11: Financial Highlights
Financial Highlights 1See page 21 for a description of this non-GAAP measure and a reconciliation from net investment income per share to adjusted net investment income per share. 2Net of unamortized financing costs. ($ and number of shares in thousands, except per share amounts) As of 12/31/2020 9/
Slide 12: Portfolio Highlights
Portfolio Highlights ($ in thousands; at fair value) As of 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Investments at Fair Value $1,712,324 $1,573,851 $1,561,153 $1,392,187 $1,467,627 Number of Portfolio Companies 115 113 119 128 106 Average Portfolio Company Debt Investment Size $16,200 $15
Slide 13: Investment Activity
Investment Activity ($ in thousands) As of 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 New Investment Commitments $286,300 $148,500 $260,500 $272,900 $134,200 New Funded Investment Activity1 $241,500 $146,300 $198,500 $251,700 $136,200 Proceeds from Prepayments, Exits, Other Paydowns and Sal
Slide 14: Capital Structure Overview
Capital Structure Overview ($ in millions) (As % of total funding sources) ($ in millions) Funding Sources and Key Highlights Funding Sources by Type Maturity Profile of Liabilities Committed Principal Outstanding Interest Rate Maturity Credit Facility $800 $400 LIBOR+2.00%1 2/25/2024 2025 Notes 300
Slide 15: Funding and Liquidity Metrics
Funding and Liquidity Metrics Leverage Utilization Liquidity Rollforward 1Includes unfunded commitments ineligible to be drawn due to certain limitations in credit agreements. 2As of December 31, 2020, we have analyzed cash and cash equivalents, availability under our credit facility, the ability to
Slide 16: Joint Venture Summary
Joint Venture Summary ($ in millions; at fair value) ($ in millions) OCSL’s Joint Venture with Kemper Corporation Portfolio Summary Cash Flows & Distributions As of December 31, 2020 Note:Numbers may not sum due to rounding. 1Excludes interest paid on the joint venture’s subordinated notes. 2Include
Slide 17: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity As of December 31, 2020 1For senior secured loans that have a cost basis above 92.5%. 2Subject to borrowing base and other limitations. We believe OCSL is well-positioned to enhance return on equity 1 Rotate into higher-yielding, proprietary investments Ope
Slide 18: Appendix
OAKTREE OCSL | Specialty Lending Corporation Appendix
Slide 19: Illustrative OCSL-OCSI Merger Consideration
Illustrative OCSL-OCSI Merger Consideration Merger Consideration Highlights Illustrative Example1 OCSI OCSL Combined Total NAV $276.4 $964.9 $1,241.3 Shares Outstanding 29.5 141.0 181.3 NAV Per Share $9.38 $6.85 $6.85 Total merger consideration will be based on the NAVs of OCSL and OCSI determined w
Slide 20: OCSL & OCSI Comparison
OCSL & OCSI Comparison (At fair value, $ in thousands) Portfolio and Balance Sheet Metrics OCSL OCSI Combined Portfolio: Investments at Fair Value $1,712,324 $520,996 $2,233,321 Top 10 Investments1 (%) 23% 23% 20% Number of Portfolio Companies 115 78 143 First Lien (%) 60% 86% 66% Second Lien (%) 25
Slide 21: Historical Statement of Operations
Historical Statement of Operations ($ in thousands, except per share amounts) For the three months ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Interest income $31,633 $37,153 $30,112 $29,898 $28,405 PIK interest income 3,089 2,573 2,183 1,946 1,161 Fee income 3,352 3,571 1,827 2,050 1,
Slide 22: Reconciliation of Adjusted Net Investment Income
Reconciliation of Adjusted Net Investment Income ($ in thousands, except per share amounts) As of 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 GAAP net investment income $10,018 $24,545 $16,770 $22,841 $7,836 Part II incentive fee (net of waivers) 9,540 - - (6,608) 6,251 Adjusted net investme
Slide 23: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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