Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q2 2024 Earnings Presentation
22 slides from Oaktree Specialty Lending's earnings presentation, Apr 30, 2024
Slide 1: Earnings Presentation Second Quarter 2024
Earnings Presentation NASDAQ: OCSL Second Quarter 2024 April 30, 2024
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, 2024
Highlights for the Quarter Ended March 31, 2024 Adjusted Net • $0.56 per share, as compared with $0.57 per share for the quarter ended December 31, 2023 Investment Income1 • GAAP net investment income was $0.52 per share, as compared with $0.57 in the quarter ended December 31, 2023 Net Asset Value
Slide 4: Permanent Base Management Fee Reduction
Permanent Base Management Fee Reduction Management Fee Reduction • Permanently reducing the base management fee, effective as of July 1, 2024, to an annual rate of 1.00% of total gross assets, net of all other existing waivers of the base management fee • Waived additional base management fees such
Slide 5: Portfolio Summary
Portfolio Summary Portfolio Characteristics Portfolio Composition (At fair value) (As % of total portfolio at fair value; $ in millions) 3% 6% 5% $3.0bn 151 First Lien – $2,463 5% Second Lien – $166 Total Investments Portfolio Companies Unsecured Debt – $78 Equity – $146 Joint Ventures – $194 81% 12
Slide 6: Portfolio Diversity
Portfolio Diversity Diversity by Investment Size Portfolio By Industry1 (As % of total portfolio at fair value) (As % of total portfolio at fair value) Industry % of Portfolio Joint Software 19.0% Ventures 6% Health Care Providers & Services 5.9% Top 10 Investments Commercial Services & Supplies 5.6
Slide 7: Spotlight on OCSL's Software Exposure
Spotlight on OCSL’s Software Exposure Software Exposure End Market Diversity (As % of total portfolio at fair value) Application Software IT Consulting & Other Services 19.0% 16.3% Alternative Carriers Interactive Media & Services Software Software: 4.8% 12.2% Diversified Real Estate Activities (New
Slide 8: Investment Activity
Investment Activity New Investment Highlights Historical Funded Originations and Exits ($ in millions) $400 $364 $368 $377 $396mm $377mm $323 $300 $243 $261 $214 New Investment New Investment $200 $162 Commitments Fundings1 $104 $117 $100 $0 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 1 2 11.1% 100% Ne
Slide 9: Investment Activity (continued)
Investment Activity (continued) New Investment Commitment Detail ($ in millions) Security Type Market Investment Number of Second Unsecured Private Primary Secondary Avg. Secondary Fiscal Quarter Commitments Deals First Lien Lien & Other Placement (Public) (Public) Purchase Price 2Q2020 $273 39 $210
Slide 10: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 GAAP Net Investment Income per Share $0.52 $0.57 $0.62 $0.63 $0.63 Adjusted Net Investment Income per Share1 $0.56 $0.57 $0.62 $0.62 $0.62 Net Realized and Un
Slide 11: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Investments at Fair Value $3,047,445 $3,018,552 $2,892,420 $3,135,619 $3,164,860 Number of Portfolio Companies 151 146 143 156 165 Average Portfolio Company Debt Investment Size $20,100 $20,
Slide 12: Investment Activity
Investment Activity As of ($ in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/20231 New Investment Commitments $395,600 $370,300 $87,500 $251,000 $123,800 New Funded Investment Activity2 $377,400 $367,600 $117,100 $243,300 $103,600 Proceeds from Prepayments, Exits, Other Paydowns and Sale
Slide 13: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge Adjusted Net Realized and Unrealized $21.00 Adjusted NII Gains (Losses), Net of Taxes $0.56 -$0.44 $20.00 $0.04 -$0.46 $0.06 -$0.04 $0.52 $19.00 -$0.55 $18.00 $17.00 $19.14 $18.72 $16.00 $15.00 $14.00 12/31/23 NAV GAAP Net Interest Income Net Unrealized Net Realized
Slide 14: Capital Structure Overview
Capital Structure Overview Funding Sources 0.90x to 1.25x ($ in millions) Principal Target Leverage Ratio Committed Outstanding Interest Rate Maturity Syndicated Credit Facility $1,218 $450 SOFR + 2.00% 6/23/2028 Citibank Facility $400 $280 SOFR + 2.00%-2.75%1 1/26/2027 Investment 2025 Notes $300 $3
Slide 15: Funding and Liquidity Metrics
Funding and Liquidity Metrics Leverage Utilization Liquidity Overview ($ in millions) ($ in millions) $3,000 6/30/2023 9/30/2023 12/31/2023 3/31/2024 $2,568 $2,568 $2,568 Credit Facilities Committed $1,618 $1,618 $1,618 $1,618 $2,500 $2,268 Credit Facilities Drawn -$1,135 -$710 -$710 -$730 $908 $908
Slide 16: Strategic Joint Ventures are Accretive to Earnings
Strategic Joint Ventures are Accretive to Earnings OCSL’s joint ventures are income-enhancing vehicles that primarily invest in senior secured loans of middle market companies and other corporate debt securities Key Attributes of Joint Ventures: • Equity ownership: 87.5% OCSL and 12.5% joint venture
Slide 17: Compelling Performance Under Oaktree Management
Compelling Performance Under Oaktree Management NAV and Cumulative Distributions Paid Per Share1 ($ in millions) $30.0 $25.0 $5.12 $5.60 $8.79 $9.34 $9.89 $4.22 $4.65 $6.09 $6.60 $7.14 $7.69 $8.24 $3.83 $3.47 $2.25 $3.14 $20.0 $1.40 $1.68 $1.97 $0.42 $0.42 $0.42 $0.42 $0.49 $0.83 $2.82 $0.26 $0.54 $
Slide 18: Appendix
AKTREE G ve | Specialty Lending Corporation App endix
Slide 19: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended ($ in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Investment income Interest income $85,256 $91,414 $94,732 $95,310 $88,745 PIK interest income $4,816 $3,849 $5,544 $3,967 $4,123 Fee income $2,546 $1,307 $572 $1,573 $2,38
Slide 20: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended ($ in thousands, except per share amounts) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) -$25,252 -$25,025 $13,745 -$1,039 -$18,279 Net
Slide 21: Non-GAAP Disclosures
Non-GAAP Disclosures The OCSI Merger and the OSI2 Merger (the “Mergers”) were accounted for as asset acquisitions 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 each of the stockhold
Slide 22: oaktreespecialtylending.com
oaktreespecialtylending.com
Oaktree Specialty Lending — Q2 2024 Earnings Presentation on 6ix