Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q1 2019 Earnings Presentation
17 slides from Oaktree Specialty Lending's earnings presentation, Feb 7, 2019
Slide 1: First Quarter Fiscal Year 2019 Earnings Presentation
First Quarter Fiscal Year 2019 Earnings Presentation February 7, 2019 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: Q1 2019 Highlights
Q1 2019 Highlights Net asset value per share increased by $0.10 to $6.19 NAV continues to grow, increasing $0.38 per share or approximately 7% since December 31, 2017 Fourth consecutive quarter of NAV growth Unrealized gains resulting from write-ups of certain non-core investments primarily contribu
Slide 4: Portfolio Summary as of December 31, 2018
Portfolio Summary as of December 31, 2018 (As % of total portfolio at fair value; $ in millions) (As % of total portfolio, at fair value) Portfolio Composition Top 10 Industries1 Portfolio Characteristics (at fair value) Note:Numbers rounded to the nearest million or percentage point. 1Excludes the
Slide 5: Portfolio Diversity
Portfolio Diversity OCSL’s portfolio is diverse across investments and industries (As % of total portfolio at fair value) Portfolio by Industry1,2 Diversity by Investment Size Top 10 Investments 27% Next 15 Investments 25% Remaining 84 Investments 40% Kemper JV 8% Average Investment Size $12 million
Slide 6: Debt Portfolio Company Metrics
Debt Portfolio Company Metrics OCSL’s portfolio has transitioned into higher quality, larger borrowers with lower leverage, reflecting our defensive investment approach Debt Portfolio Company EBITDA1 Debt Portfolio Company Leverage2 Median Debt Portfolio Company EBITDA ($ in millions) Source: S&P Gl
Slide 7: Historical Portfolio Progression
Non-core Investments: 22% of portfolio2 Non-core Investments: 63% of portfolio Historical Portfolio Progression Non-core private loans and non-accruals currently represent only 14% of OCSL’s portfolio, down from 43% of the portfolio as of September 30, 2017 ($ in millions, at fair value) Portfolio b
Slide 8: Non-core Investment Portfolio Detail
Note:Numbers may not sum due to rounding. 1Excludes equity positions in non-accrual debt positions. Non-core Investment Portfolio Detail Non-core Investment Portfolio Characteristics Private Loans $111 million at fair value in eight companies Net leverage through tranche: 4.0x Average debt price: 96
Slide 9: Q1 2019 Portfolio Originations
Q1 2019 Portfolio Originations1 $231 million of new investment commitments $165 million of new funded investments $150 million in 14 new portfolio companies and $15 million in 3 existing portfolio companies Diversified across 15 industries 9.9% weighted average yield at cost of new debt investments
Slide 10: Historical Financial Information
Historical Financial Information ($ in thousands, except per share amounts) Operating Results Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 Dec-18 Sep-18 Jun-18 Mar-18 Dec-17 Interest income $35,789 $35,306 $26,634 $26,633 $29,938 PIK interest income 832 499 1,457 1,946 1,867 Fee income 1,202 2,034 2,425 3,942 1,03
Slide 11: Historical Financial Information (continued)
Historical Financial Information (continued) ($ in thousands, except per share amounts) Select Balance Sheet and Other Data Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 Dec-18 Sep-18 Jun-18 Mar-18 Dec-17 Investment Portfolio (at fair value) $1,464,885 $1,491,201 $1,520,518 $1,400,684 $1,415,404 Total Debt Outstand
Slide 12: Historical Portfolio Activity
Historical Portfolio Activity ($ in thousands) Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 Dec-18 Sep-18 Jun-18 Mar-18 Dec-17 Investments at Fair Value $1,464,885 $1,491,201 $1,520,518 $1,400,684 $1,415,404 Number of Portfolio Companies 110 113 116 115 122 Average Portfolio Company Debt Investment Size $15,000 $1
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: Capital Structure Overview
Capital Structure Overview Funding Sources as of December 31, 2018 Capacity Outstanding Interest Rate Maturity ING Credit Facility $600.0 million $211.0 million LIBOR+2.25%-2.75% November 2021 2019 Notes2 $228.8 million $228.8 million 4.875% March 2019 2024 Notes $75.0 million $75.0 million 5.875% O
Slide 15: Capital Structure Update
Capital Structure Update We are currently in discussions with our banking partners to, among other things, amend terms of our $600 million revolving credit facility As part of this process, our Board of Directors approved the application of the modified asset coverage requirements Modified Asset Cov
Slide 16: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity Redeploy non-interest generating investments comprised of equity, limited partnership interests and loans on non-accrual Exited $18 million of non-interest generating investments during the quarter ended December 31, 2018 Approximately $181 million of non-i
Slide 17: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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