Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q4 2021 Earnings Presentation
23 slides from Oaktree Specialty Lending's earnings presentation, Nov 16, 2021
Slide 1: Fourth Quarter 2021 Earnings Presentation
Exhibit 99.2 fourth quarter 2021 earnings presentation november 16, 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 statement
Slide 3: Full Year 2021 Highlights
Full Year 2021 Highlights strong new investment activity & improved increased dividend total debt portfolio yield ($ in millions) 41% increase from September 30, 2020 $1.2 billion of full-year 2021 originations $0.18 9.0% $500 8.7% $0.155 8.5% 8.4% $0.145 0.16 8.3% $385 8.5% $0.130 400 0.14 $0.120 $
Slide 4: Highlights for the Quarter Ended September 30, 2021
Highlights for the Quarter Ended September 30, 2021 • $7.28, up 1% from $7.22 as of June 30, 2021 and up 10% from $6.61 as of December 31, 2019 (prior to the onset of the pandemic) net asset value • Quarterly increase primarily due to realized and unrealized gains on certain debt and equity investme
Slide 5: Portfolio Summary as of September 30, 2021
Portfolio Summary as of September 30, 2021 portfolio characteristics portfolio composition (At fair value) (As % of total portfolio at fair value; $ in millions) 4% First Lien – $1,766 2% 7% $2.6bn 138 Second Lien – $451 total investments portfolio companies 18% Unsecured – $43 Equity – $107 69% Joi
Slide 6: Portfolio Diversity
Portfolio Diversity 1 diversity by investment size portfolio by industry (As % of total portfolio at fair value) (As % of total portfolio at fair value) Industry % of Portfolio Joint Ventures Software 14.8% 7% Top 10 Investments IT Services 6.6 19% Pharmaceuticals 5.6 Health Care Providers & Service
Slide 7: Investment Activity
Investment Activity new investment highlights historical funded originations and exits ($ in millions) $500 $416 400 $302 $385mm $416mm 300 $242 $229 $202 $184 $171 new investment new investment $161 $165 200 $146 1 commitments fundings 100 0 9/30/20 12/31/20 3/31/21 6/30/21 9/30/21 1 2 New Funded I
Slide 8: Investment Activity (continued)
Investment Activity (continued) new investment commitment detail ($ 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 $210
Slide 9: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 GAAP Net Investment Income per Share $0.18 $0.20 $0.12 $0.07 $0.17 1 Adjusted Net Investment Income per Share $0.16 $0.19 $0.14 $0.14 $0.17 Net Realized and U
Slide 10: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 Investments at Fair Value $2,556,629 $2,339,301 $2,327,353 $1,712,324 $1,573,851 Number of Portfolio Companies 138 135 137 115 113 Average Portfolio Company Debt Investment Size $18,700 $17,
Slide 11: Investment Activity
Investment Activity As of 1 ($ in thousands) 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 New Investment Commitments $385,000 $178,400 $317,700 $286,300 $148,500 2 New Funded Investment Activity $416,400 $165,300 $301,800 $241,500 $146,300 Proceeds from Prepayments, Exits, Other Paydowns and S
Slide 12: 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 $0.16 $0.05 ($0.01) $0.03 7.50 ($0.03) $0.01 $0.03 ($0.145) ($0.01) $0.18 7.00 6.50 6.00 $7.28 $7.28 $7.22 5.50 5.00 4.50 4.00 6/30/21 NAV GAAP Net Interest Income Part II Incentive
Slide 13: Capital Structure Overview
Capital Structure Overview funding sources ($ in millions) 0.85x to 1.00x Principal target leverage ratio Committed Outstanding Interest Rate Maturity Syndicated Credit Facility $950 $495 LIBOR + 2.00% 5/4/2026 1 Citibank Facility 150 135 LIBOR + 1.25%-2.25% 7/18/2024 2025 Notes 300 300 3.500% 2/25/
Slide 14: Funding and Liquidity Metrics
Funding and Liquidity Metrics leverage utilization liquidity overview ($ in millions) ($ in millions) $1,750 $1,750 $1,800 12/31/2020 3/31/2021 6/30/2021 9/30/2021 1,600 Credit Facility Committed $800 $1,140 $1,100 $1,100 $1,440 $470 $636 1,400 Credit Facility Drawn (400) (815) (464) (630) $325 1,20
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 $10.00 9.00 $1.55 8.00 $1.41 $1.28 $1.16 7.00 $1.05 $0.75 $0.66 $0.56 $0.47 $0.94 $0.37 $0.18 $0.28 $0.09 6.00 $0.85 5.00 $7.28 $7.22 $7.09 4.00 $6.85 $6.60 $6.60 $6.61 $6.55 $6.49 $6.19 $6.09 $6.09 $5.95
Slide 17: 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 18: Appendix
Appendix OAKTREE OCSL | Specialty Lending Corporation
Slide 19: 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 $160 $134 140 • $74 million at fair value in four companies $8 120 • Received $3 million partial paydowns in one investment during the 100
Slide 20: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 ($ in thousands) investment income Interest income $55,094 $51,999 $35,655 $31,633 $37,153 PIK interest income 4,960 4,597 3,801 3,089 2,573 Fee income 645 7,823 2,278 3,352 3,571 Dividend
Slide 21: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 ($ in thousands, except per share amounts) net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) $(2,098) $3,917 $65,144 $47,556 $39,468 Net rea
Slide 22: 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 23: Contact Us
contact us: visit us: Investor Relations oaktreespecialtylending.com Michael Mosticchio (212) 284-1900 ocsl-ir@oaktreecapital.com
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