Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q3 2024 Earnings Presentation
20 slides from Oaktree Specialty Lending's earnings presentation, Aug 1, 2024
Slide 1: Earnings Presentation Third Quarter 2024
Earnings Presentation NASDAQ: OCSL Third Quarter 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 June 30, 2024
Highlights for the Quarter Ended June 30, 2024 Adjusted Net • $0.55 per share, as compared with $0.56 per share for the quarter ended March 31, 2024 Investment Income1 • GAAP net investment income was $0.54 per share, as compared with $0.52 in the quarter ended March 31, 2024 Net Asset Value Per • $
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) 4% 6% 4% First Lien – $2,575 3% $3.1bn 158 Second Lien – $109 Total Investments Portfolio Companies Unsecured Debt – $117 Equity – $132 Joint Ventures – $188 82% 1
Slide 6: Spotlight on OCSL's Software Exposure
Spotlight on OCSL’s Software Exposure Software Exposure End Market Diversity (As % of total portfolio at fair value) Application Software Systems Software 15.2% Alternative Carriers 23.9% Diversified Real Estate Activities 4.4% Software Software: 5.0% IT Consulting & Other Services Rest of Portfolio
Slide 7: Investment Activity
Investment Activity New Investment Highlights Historical Funded Originations and Exits ($ in millions) ($ in millions) $400 $364 $368 $377 11 Total New $323 Commitments $293 $300 $339 $214 new borrowers $186 $200 Existing $117 Borrowers $100 $75 $0 9 9/30/23 12/31/23 1 3/31/24 6/30/24 2 existing bor
Slide 8: Investment Activity (continued)
Investment Activity (continued) New Investment Commitment Detail ($ in millions) Security Type Market Investment Number of Unsecured Private Primary Secondary Avg. Secondary Fiscal Quarter First Lien Second Lien Commitments Deals & Other Placement (Public) (Public) Purchase Price 4Q2021 $385 20 $350
Slide 9: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 GAAP Net Investment Income per Share $0.54 $0.52 $0.57 $0.62 $0.63 Adjusted Net Investment Income per Share1 $0.55 $0.56 $0.57 $0.62 $0.62 Net Realized and Un
Slide 10: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Investments at Fair Value $3,121,703 $3,047,445 $3,018,552 $2,892,420 $3,135,619 Number of Portfolio Companies 158 151 146 143 156 Average Debt Investment Size $19,900 $20,100 $20,200 $19,80
Slide 11: Investment Activity
Investment Activity As of ($ in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 New Investment Commitments $338,700 $395,600 $370,300 $87,500 $251,000 New Funded Investment Activity1 $293,200 $377,400 $367,600 $117,100 $243,300 Proceeds from Prepayments, Exits, Other Paydowns and Sales
Slide 12: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge $21.00 Adjusted NII Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes $0.55 -$0.54 $20.00 $0.01 $19.00 $0.54 -$0.51 -$0.02 -$0.01 -$0.55 $18.00 $17.00 $18.72 $16.00 $18.19 $15.00 $14.00 3/31/24 NAV GAAP Net Interest Income Net Unrealized Net Realized
Slide 13: Capital Structure Overview
Capital Structure Overview Funding Sources 0.90x to 1.25x Facility 6/30/24 ($ in millions) Size Outstanding Interest Rate Maturity Target Leverage Ratio Secured Credit Facilities Syndicated Facility $1,218 $505 SOFR + 2.00% Jun-28 Citibank Facility $400 $285 SOFR + 2.35% Jan-29 Secured Debt Subtotal
Slide 14: Funding and Liquidity Metrics
Funding and Liquidity Metrics Leverage Utilization Liquidity Overview ($ in millions) ($ in millions) 9/30/23 12/31/23 3/31/24 6/30/24 $3,000 Credit Facilities Committed $1,618 $1,618 $1,618 $1,618 $2,568 $2,568 $2,568 $2,568 $2,500 Credit Facilities Drawn -$710 -$710 -$730 -$790 Cash and Equivalent
Slide 15: Strategic Joint Ventures are Accretive to Earnings
Strategic Joint Ventures are Accretive to Earnings OCSL’s JVs are income-enhancing vehicles that primarily invest in senior secured loans of middle market companies and other corporate debt securities Key Attributes: • Equity ownership: 87.5% OCSL and 12.5% joint venture partner • Shared voting cont
Slide 16: Appendix
AKTREE G ve | Specialty Lending Corporation App endix
Slide 17: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended ($ in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Investment income Interest income $85,953 $85,256 $91,414 $94,732 $95,310 PIK interest income $6,149 $4,816 $3,849 $5,544 $3,967 Fee income $1,460 $2,546 $1,307 $572 $1,57
Slide 18: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended ($ in thousands, except per share amounts) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) $26,199 -$25,252 -$25,025 $13,745 -$1,039 Net r
Slide 19: 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 20: oaktreespecialtylending.com
oaktreespecialtylending.com
Oaktree Specialty Lending — Q3 2024 Earnings Presentation on 6ix