Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q4 2019 Earnings Presentation
19 slides from Oaktree Specialty Lending's earnings presentation, Nov 20, 2019
Slide 1: Fourth Quarter Fiscal Year 2019 Earnings Presentation
Fourth Quarter Fiscal Year 2019 Earnings Presentation November 20, 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: Accomplishments for the Fiscal Year Ended September 30, 2019
Accomplishments for the Fiscal Year Ended September 30, 2019 NAV Expansion Continued Progress Rotating Portfolio Earnings Growth ($ in millions, at fair value) 1 Net Investment Income Per Share Portfolio Assets NAV Per Share Key Accomplishments 1 2 3 4 1Excludes investments in Senior Loan Fund JV I,
Slide 4: Highlights for the Quarter Ended September 30, 2019
Net asset value per share (“NAV”) of $6.60 Highlights for the Quarter Ended September 30, 2019 1 Net investment income of $0.12 per share 2 Continued progress rotating portfolio 3 Maintained defensive posture and conservative financial position 4 NAV has grown by approximately $73 million ($0.51 per
Slide 5: Key Earnings Metrics
Key Earnings Metrics Net Investment Income Per Share NAV Per Share NII has increased by approximately 22% since December 31, 2017 NAV has appreciated 14% since December 31, 2017
Slide 6: Portfolio Summary
Portfolio Summary as of September 30, 2019 (As % of total portfolio at fair value; $ in millions) (As % of total portfolio, at fair value) Portfolio Composition Top 10 Industries2,3 Portfolio Characteristics (at fair value) Note:Numbers may not sum due to rounding. 1Excludes investments in the Kempe
Slide 7: Portfolio Diversity
Portfolio Diversity OCSL’s portfolio is diverse across borrowers and industries (As % of total portfolio at fair value) Portfolio by Industry1,2 Diversity by Investment Size Top 10 Investments 26% Next 15 Investments 25% Remaining 78 Investments 40% Kemper JV 9% As of September 30, 2019 Note:Numbers
Slide 8: 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 Leverage1 Median Debt Portfolio Company EBITDA ($ in millions) Source: S&P Gl
Slide 9: Historical Portfolio Progression
Non-core Investments: 16% of portfolio Non-core Investments: 63% of portfolio Historical Portfolio Progression Non-core private loans and non-accruals currently represent only 7% of OCSL’s portfolio ($ in millions, at fair value) Portfolio by Category1 -77% since 9/30/17 Non-core Investments 1Exclud
Slide 10: 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 $89 million at fair value in five companies Net leverage through tranch
Slide 11: Q3 2019 Portfolio Originations
Q3 2019 Portfolio Originations $138 million of new investment commitments $129 million of new funded investments1 9 portfolio companies across 8 industries 7.7% weighted average yield at cost of new debt investments 92% of new debt investment commitments at floating rates 93% of new investments also
Slide 12: Historical Financial Information
Historical Financial Information ($ in thousands, except per share amounts) Operating Results For the three months ended 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Interest income $30,662 $32,910 $34,309 $35,789 $35,306 PIK interest income 1,187 1,198 2,280 832 499 Fee income 2,550 1,826 1,1
Slide 13: Historical Financial Information (continued)
Historical Financial Information (continued) ($ in thousands, except per share amounts) Select Balance Sheet and Other Data As of 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Investment Portfolio (at fair value) $1,438,042 $1,455,031 $1,504,888 $1,464,885 $1,491,201 Total Debt Outstanding1 473
Slide 14: Historical Portfolio Activity
Historical Portfolio Activity ($ in thousands) As of 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 Investments at Fair Value $1,438,042 $1,455,031 $1,504,888 $1,464,885 $1,491,201 Number of Portfolio Companies 104 105 110 110 113 Average Portfolio Company Debt Investment Size $15,300 $15,400 $1
Slide 15: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares
Slide 16: Capital Structure Overview
Capital Structure Overview ($ in millions) ($ in millions) (As % of total funding sources) ($ in millions) Funding Sources Funding Sources by Type Historical Principal Outstanding and Leverage Ratio Maturity Profile of Liabilities Committed Principal Outstanding Interest Rate Maturity Credit Facilit
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) Joint Venture Overview Portfolio Summary Joint Venture Structure Debt Portfolio Top Ten Industries As of September 30, 2019 1Includes $42 million of unsettled purchases. Joint
Slide 18: Opportunities to Increase Return on Equity
Redeploy non-interest generating investments Opportunities to Increase Return on Equity As of September 30, 2019 Note:Numbers may not sum due to rounding. 1 Operate within target leverage range of 0.70x-0.85x debt-to-equity 2 Utilize additional investment capacity at the Kemper JV 3 Received $49 mil
Slide 19: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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