Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q1 2022 Earnings Presentation
22 slides from Oaktree Specialty Lending's earnings presentation, Feb 3, 2022
Slide 1: First Quarter 2022 Earnings Presentation
Exhibit 99.2 first quarter 2022 earnings presentation february 3, 2022 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 December 31, 2021
Highlights for the Quarter Ended December 31, 2021 • $7.34, up 1% from $7.28 as of September 30, 2021, and up 7% from $6.85 as of December 31, 2020 net asset value per share • Quarterly increase primarily due to realized gains on certain investments and undistributed net investment income • $0.17 pe
Slide 4: Portfolio Summary
Portfolio Summary portfolio characteristics portfolio composition (At fair value) (As % of total portfolio at fair value; $ in millions) 4% First Lien – $1,804 1% 7% $2.6bn 140 Second Lien – $459 total investments portfolio companies 18% Unsecured – $27 Equity – $108 70% Joint Ventures – $191 8.7% $
Slide 5: Portfolio Diversity
Portfolio Diversity 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 16.4% 7% Top 10 Investments IT Services 6.8 19% Pharmaceuticals 5.4 Biotechnology 4.5 Chemicals 4.1
Slide 6: Investment Activity
Investment Activity new investment highlights historical funded originations and exits ($ in millions) $500 $416 400 $302 $300mm $241mm 300 $242 $241 $235 $229 $202 $171 $165 new investment new investment $161 200 1 commitments fundings 100 0 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 1 2 New Funded
Slide 7: Investment Activity (continued)
Investment Activity (continued) new investment commitment detail ($ in millions) Security Type Market Investment Number of Unsecured & Private Primary Secondary Avg. Secondary Fiscal Quarter Commitments Deals First Lien Second Lien Other Placement (Public) (Public) Purchase Price 2Q2020 $273 39 $210
Slide 8: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 GAAP Net Investment Income per Share $0.18 $0.18 $0.20 $0.12 $0.07 1 Adjusted Net Investment Income per Share $0.17 $0.16 $0.19 $0.14 $0.14 Net Realized and
Slide 9: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 Investments at Fair Value $2,558,623 $2,556,629 $2,339,301 $2,327,353 $1,712,324 Number of Portfolio Companies 140 138 135 137 115 Average Portfolio Company Debt Investment Size $18,500 $18
Slide 10: Investment Activity
Investment Activity As of 1 ($ in thousands) 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 New Investment Commitments $299,900 $385,000 $178,400 $317,700 $286,300 2 New Funded Investment Activity $240,800 $416,400 $165,300 $301,800 $241,500 Proceeds from Prepayments, Exits, Other Paydowns and
Slide 11: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge adjusted net realized and unrealized adjusted nii gains (losses), net of taxes $8.00 $0.17 $0.06 ($0.01) $0.02 ($0.02) $0.01 $0.04 ($0.155) $0.00 7.50 $0.18 7.00 6.50 6.00 $7.34 $7.34 $7.28 5.50 5.00 4.50 4.00 9/30/21 NAV GAAP Net Interest Income Part II Incentive Ne
Slide 12: Capital Structure Overview
Capital Structure Overview funding sources ($ in millions) 0.85x to 1.00x Principal target leverage ratio Committed Outstanding Interest Rate Maturity Syndicated Credit Facility $1,000 $495 LIBOR + 2.00% 5/4/2026 1 Citibank Facility 200 155 LIBOR + 1.25%-2.25% 11/18/2024 2025 Notes 300 300 3.500% 2/
Slide 13: Funding and Liquidity Metrics
Funding and Liquidity Metrics leverage utilization liquidity overview ($ in millions) ($ in millions) $2,000 $1,850 3/31/2021 6/30/2021 9/30/2021 12/31/2021 $1,750 $1,750 1,800 Credit Facilities Committed $1,140 $1,100 $1,100 $1,200 1,600 $550 $1,440 $470 Credit Facilities Drawn (815) (464) (630) (6
Slide 14: 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 15: Compelling Performance Under Oaktree Management
Compelling Performance Under Oaktree Management nav and cumulative distributions paid per share $10.00 9.00 $1.71 $1.55 8.00 $1.41 $1.28 $1.16 $1.05 7.00 $0.75 $0.66 $0.56 $0.47 $0.94 $0.37 $0.18 $0.28 $0.09 6.00 $0.85 5.00 $7.34 $7.28 $7.22 $7.09 4.00 $6.85 $6.61 $6.55 $6.60 $6.60 $6.49 $6.19 $6.09
Slide 16: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity 1 2 3 continue rotating into continue to operate within optimize higher-yielding investments target leverage range joint ventures • Opportunity to improve the • Maintaining a leverage ratio within • Opportunity to increase underlying portfolio’s yield by ro
Slide 17: Appendix
Appendix OAKTREE OCSL | Specialty Lending Corporation
Slide 18: 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 $120 $95 • $46 million at fair value in two companies 100 80 • Fully repaid on two investments and received a partial paydown on $49 Equit
Slide 19: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 ($ in thousands) investment income Interest income $55,450 $55,094 $51,999 $35,655 $31,633 PIK interest income 4,663 4,960 4,597 3,801 3,089 Fee income 912 645 7,823 2,278 3,352 Dividend
Slide 20: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 ($ in thousands, except per share amounts) net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) $(4,586) $(2,098) $3,917 $65,144 $47,556 Net r
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
Slide 22: Contact Us
contact us: visit us: Investor Relations oaktreespecialtylending.com Michael Mosticchio (212) 284-1900 ocsl-ir@oaktreecapital.com
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