Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q2 2020 Earnings Presentation
22 slides from Oaktree Specialty Lending's earnings presentation, May 7, 2020
Slide 1: Second Quarter Fiscal Year 2020 Earnings Presentation
Second Quarter Fiscal Year 2020 Earnings Presentation May 7, 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 March 31, 2020
Highlights for the Quarter Ended March 31, 2020 Adjusted Net Investment Income1 $0.12 per share for the quarter ended March 31, 2020, up $0.02 as compared to $0.10 for the quarter ended December 31, 2019 15% sequential increase primarily due to growth in the investment portfolio and higher structuri
Slide 4: Portfolio Summary as of March 31, 2020
Portfolio Summary as of March 31, 2020 (As % of total portfolio at fair value; $ in millions) (As % of total portfolio at fair value) Portfolio Composition Top Ten Industries3,4 Portfolio Characteristics (at fair value) Note:Numbers may not sum due to rounding. 1Excludes negative EBITDA borrowers, i
Slide 5: 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 25% Next 15 Investments 24% Remaining 103 Investments 44% Kemper JV 7% As of March 31, 2020 Note:Numbers may
Slide 6: Historical Portfolio Progression
Non-Core Investments: 11% of portfolio Non-Core Investments: 63% of portfolio Historical Portfolio Progression ($ in millions; at fair value) Portfolio by Category1 -84% since 9/30/17 Non-Core Investments 1Excludes investments in the Kemper JV. 2Other non-core investments include liquid debt investm
Slide 7: 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. Non-Core Investment Portfolio Detail Non-Core Investment Portfolio Characteristics Private Loans $57 million at fair value in four companies Average debt price: 92.2% E
Slide 8: Portfolio Originations
Portfolio Originations $273 million of new investment commitments $220 million in 32 new and $53 million in 8 existing portfolio companies Diversified across 21 industries $252 million of new funded investments1 7.9% weighted average yield at cost of new debt investments 91% of new debt investment c
Slide 9: Originations Detail
Originations Detail ($ in millions) New Investment Commitment Detail by Month Security Type Market Month Investment Commitments Number of Deals First Lien Second Lien Unsecured & Other Private Placement Public - Primary Public - Secondary Secondary Purchase Price January $112 6 $105 $6 - $87 $22 $2
Slide 10: Financial Highlights
Financial Highlights 1See page 20 for a description of this non-GAAP measure and a reconciliation from net investment income per share to adjusted net investment income per share. 2Net of unamortized financing costs. ($ in thousands, except per share amounts) As of 3/31/2020 12/31/2019 9/30/2019 6/3
Slide 11: Portfolio Highlights
Portfolio Highlights ($ in thousands) As of 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Investments at Fair Value $1,392,187 $1,467,627 $1,438,042 $1,455,031 $1,504,888 Number of Portfolio Companies 128 106 104 105 110 Average Portfolio Company Debt Investment Size $11,900 $15,300 $15,300 $15
Slide 12: Investment Activity
Investment Activity ($ in thousands) As of 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 New Investment Commitments $272,900 $134,200 $138,400 $66,800 $100,000 New Funded Investment Activity1 $251,700 $136,200 $128,500 $74,100 $111,100 Proceeds from Prepayments, Exits, Other Paydowns and Sales
Slide 13: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares
Slide 14: Q2 2020 Net Unrealized Depreciation Attribution
Q2 2020 Net Unrealized Depreciation Attribution ($ in millions, except per share amounts) 2Q 2020 Unrealized Depreciation by Asset Type1 March 31, 2020 Unrealized Gains (Losses) Per Share Liquid Debt Investments2 $(114) $(0.81) Private Debt Investments (19) (0.13) Total Debt Portfolio Net Unrealized
Slide 15: Capital Structure Overview
Capital Structure Overview ($ 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 $700 $405 LIBOR+2.00%1 2/25/2024 2025 Notes 300
Slide 16: Funding and Liquidity Metrics
Funding and Liquidity Metrics Leverage Utilization Liquidity Rollforward Note:Actual leverage and liquidity as of June 30, 2020 may differ materially. OCSL’s independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to the liquidity an
Slide 17: Joint Venture Summary
Joint Venture Summary ($ in millions; at fair value) ($ in millions; at fair value) (As % of total portfolio at fair value) OCSL’s Joint Venture with Kemper Corporation Portfolio Summary Joint Venture Structure Debt Portfolio Top Ten Industries1 As of March 31, 2020 1Based on GICS sub-industry class
Slide 18: Opportunities to Increase Return on Equity
Rotate into higher-yielding proprietary investments Opportunities to Increase Return on Equity As of March 31, 2020 Note:Numbers may not sum due to rounding. 1For senior secured loans that have a cost basis above 92.5%. 1 Operate within new target leverage range of 0.85x-1.00x debt-to-equity 2 Conti
Slide 19: Appendix
OAKTREE OCSL | Specialty Lending Corporation Appendix
Slide 20: Historical Statement of Operations
Historical Statement of Operations ($ in thousands, except per share amounts) For the three months ended 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 Interest income $29,898 $28,405 $30,662 $32,910 $34,309 PIK interest income 1,946 1,161 1,187 1,198 2,280 Fee income 2,050 1,071 2,550 1,826 1,1
Slide 21: Reconciliation of Adjusted Net Investment Income
Reconciliation of Adjusted Net Investment Income ($ in thousands, except per share amounts) As of 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019 GAAP net investment income $22,841 $7,836 $16,275 $16,608 $17,709 Part II incentive fee (net of waivers) (6,608) 6,251 438 685 - Adjusted net investmen
Slide 22: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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