Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q1 2023 Earnings Presentation
23 slides from Oaktree Specialty Lending's earnings presentation, Feb 7, 2023
Slide 1: First Quarter 2023 Earnings Presentation
first quarter 2023 earnings presentation february 7, 2023 nasdaq: ocsl
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 statement
Slide 3: Highlights for the Quarter Ended December 31, 2022
Highlights for the Quarter Ended December 31, 2022 • $0.61 per share as compared with $0.55 per share for the quarter ended September 30, 2022 adjusted net investment income1 • GAAP net investment income was $0.63 per share as compared with $0.59 per share for the quarter ended September 30, 2022 •
Slide 4: Portfolio Summary
Portfolio Summary portfolio characteristics portfolio composition (At fair value) (As % of total portfolio at fair value; $ in millions) 4% 2% First Lien – $1,900 $2.6bn 156 7% Second Lien – $381 total investments portfolio companies 14% Unsecured – $62 Equity – $113 72% Joint Ventures – $186 11.6%
Slide 5: Portfolio Diversity
Portfolio Diversity diversity by investment size portfolio by industry1 (As % of total portfolio at fair value) (As % of total portfolio at fair value) Industry % of Portfolio Joint Ventures 7% Software 16.5% Top 10 Investments IT Services 6.1 19% Diversified Financial Services 5.5 Pharmaceuticals 4
Slide 6: Investment Activity
Investment Activity new investment highlights historical funded originations and exits ($ in millions) $300 $274 $241 $235 $236 250 $250mm $274mm 200 150 $180 $130 $130 $146 new investment new investment $104 100 $85 commitments fundings1 50 0 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 New Funded Inv
Slide 7: Investment Activity (continued)
Investment Activity (continued) new investment commitment detail ($ in millions) Security Type Market Investment Number of Unsecured & Private Primary Secondary Avg. Secondary Fiscal Quarter Commitments Deals First Lien Second Lien Other Placement (Public) (Public) Purchase Price 2Q2020 $273 39 $210
Slide 8: Financial Highlights
Financial Highlights As of ($ and number of shares in thousands, except per share amounts) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 GAAP Net Investment Income per Share $0.63 $0.59 $0.66 $0.66 $0.54 Adjusted Net Investment Income per Share1 $0.61 $0.55 $0.51 $0.53 $0.52 Net Realized and U
Slide 9: Portfolio Highlights
Portfolio Highlights As of ($ in thousands, at fair value) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 Investments at Fair Value $2,642,870 $2,494,111 $2,565,389 $2,644,775 $2,558,623 Number of Portfolio Companies 156 149 151 146 140 Average Portfolio Company Debt Investment Size $16,500 $16
Slide 10: Investment Activity
Investment Activity As of ($ in thousands) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 New Investment Commitments $250,300 $97,000 $131,900 $227,900 $299,900 New Funded Investment Activity1 $274,400 $84,500 $130,000 $236,200 $240,800 Proceeds from Prepayments, Exits, Other Paydowns and Sales
Slide 11: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge adjusted net realized and unrealized adjusted nii gains (losses), net of taxes $22.00 $0.61 ($0.39) ($0.03) 21.00 $0.63 ($0.45) $0.03 $0.03 ($0.54) 20.00 ($0.42) 19.00 18.00 $20.38 17.00 $20.05 $19.63 16.00 15.00 14.00 9/30/22 NAV GAAP Net Interest Income Net Unreali
Slide 12: Capital Structure Overview
Capital Structure Overview funding sources ($ in millions) 0.90x to 1.25x Principal target leverage ratio Committed Outstanding Interest Rate Maturity Syndicated Credit Facility $1,000 $695 LIBOR + 2.00% 5/4/2026 Citibank Facility 200 165 LIBOR + 1.25%-2.25%1 11/18/2024 Investment 2025 Notes 300 300
Slide 13: Funding and Liquidity Metrics
Funding and Liquidity Metrics leverage utilization liquidity overview ($ in millions) ($ in millions) $2,000 $1,850 $1,850 $1,850 $1,850 3/31/2022 6/30/2022 9/30/2022 12/31/2022 1,800 $340 Credit Facilities Committed $1,200 $1,200 $1,200 $1,200 1,600 $455 $455 $500 Credit Facilities Drawn (745) (745
Slide 14: 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 15: Compelling Performance Under Oaktree Management
Compelling Performance Under Oaktree Management nav and cumulative distributions paid per share1 $30.00 25.00 $5.12 $5.60 $4.65 $4.22 $6.09 $6.60 $7.14 $3.83 $3.47 $1.97 $2.25 $3.14 $1.40 $1.68 20.00 $2.82 $0.42 $1.11 $0.26 $0.54 $0.83 $2.54 15.00 $21.66 $21.84 $22.03 $21.78 $21.27 $20.67 10.00 $20.
Slide 16: Strong Earnings and Dividend Growth
Strong Earnings and Dividend Growth adjusted net investment income per share and roe quarterly dividends declared per share ($ in millions) ($ in millions) 1 15% increase from December 31, 2021 10.0% LTM return on adjusted NII $0.70 $0.60 $0.54 $0.55 $0.61 $0.51 0.60 $0.495 $0.55 0.50 $0.48 $0.53 $0
Slide 17: Opportunities to Increase Return on Equity
Opportunities to Increase Return on Equity 1 2 3 positioned for continued continue rotating into realization of interest higher-yielding merger synergies rate increases investments • 87% of the debt portfolio at fair • Opportunity to improve the • Merger with OSI2 closed on value was composed of flo
Slide 18: Appendix
OCSL | Specialty Lending Corporation
Slide 19: OCSL & OSI2 Combined Company Metrics
OCSL & OSI2 Combined Company Metrics portfolio and balance sheet metrics (At fair value, $ in thousands) OCSL OSI2 Combined Company Portfolio: Investments at Fair Value $2,642,870 $572,028 $3,214,898 Top 10 Investments (%) 19.1%1 23.1% 19.5% Number of Portfolio Companies 156 113 167 First Lien (%) 7
Slide 20: Quarterly Statement of Operations
Quarterly Statement of Operations For the three months ended ($ in thousands) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 investment income Interest income $69,978 $61,719 $54,728 $57,019 $55,450 PIK interest income 6,130 6,011 5,178 4,674 4,663 Fee income 2,021 1,539 2,275 1,905 912 Dividen
Slide 21: Quarterly Statement of Operations (continued)
Quarterly Statement of Operations (continued) For the three months ended ($ in thousands, except per share amounts) 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 net realized and unrealized gains (losses) Net unrealized appreciation (depreciation) $(22,982) $(17,869) $(86,755) $(27,038) $(4,58
Slide 22: Non-GAAP Disclosures
Non-GAAP Disclosures On March 19, 2021, the Company completed the Merger. The Merger was accounted for as an asset acquisition 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 OCSI’s s
Slide 23: Contact Us
contact us: visit us: Investor Relations oaktreespecialtylending.com Michael Mosticchio (212) 284-1900 ocsl-ir@oaktreecapital.com
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