Oaktree Specialty Lending Corporation · NASDAQ:OCSL
Oaktree Specialty Lending — Q2 2019 Earnings Presentation
17 slides from Oaktree Specialty Lending's earnings presentation, May 8, 2019
Slide 1: Second Quarter Fiscal Year 2019 Earnings Presentation
Second Quarter Fiscal Year 2019 Earnings Presentation May 8, 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: Highlights for the Quarter Ended March 31, 2019
Net asset value per share (“NAV”) increased to $6.55, up $0.36 from the prior quarter Highlights for the Quarter Ended March 31, 2019 1Excludes investments in Senior Loan Fund JV I, LLC (“Kemper JV”), a joint venture that invests primarily in middle market and other corporate debt securities. 2Inclu
Slide 4: Portfolio Summary as of March 31, 2019
Portfolio Summary as of March 31, 2019 (As % of total portfolio at fair value; $ in millions) (As % of total portfolio, at fair value) Portfolio Composition Top 10 Industries2 Portfolio Characteristics (at fair value) Note:Numbers may not sum due to rounding. 1Excludes investments in the Kemper JV.
Slide 5: Portfolio Diversity
Portfolio Diversity OCSL’s portfolio is diverse across borrowers and industries (As % of total portfolio at fair value) Portfolio by Industry1,2 Diversity by Investment Size Top 10 Investments 25% Next 15 Investments 25% Remaining 84 Investments 42% Kemper JV 8% Average Investment Size1 $13 million
Slide 6: Debt Portfolio Company Metrics
Debt Portfolio Company Metrics OCSL’s portfolio has transitioned into higher quality, larger borrowers with lower leverage, reflecting our defensive investment approach Debt Portfolio Company EBITDA1 Debt Portfolio Company Leverage1 Median Debt Portfolio Company EBITDA ($ in millions) Source: S&P Gl
Slide 7: Historical Portfolio Progression
Non-core Investments: 21% of portfolio Non-core Investments: 63% of portfolio Historical Portfolio Progression Non-core private loans and non-accruals currently represent only 13% of OCSL’s portfolio ($ in millions, at fair value) Portfolio by Category1 -67% since 9/30/17 Non-core Investments 1Exclu
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 $95 million at fair value in seven companies Net leverage through tranche: 4.0x Average debt price: 95.
Slide 9: Q2 2019 Portfolio Originations
Q2 2019 Portfolio Originations1 $100 million of new investment commitments $111 million of new funded investments 6 portfolio companies 5 industries 8.7% weighted average yield at cost of new debt investments 95% of new debt investment commitments at floating rates 97% of new investments also held b
Slide 10: Historical Financial Information
Historical Financial Information ($ in thousands, except per share amounts) Operating Results Q2’19 Q1’19 Q4’18 Q3’18 Q2’18 Mar-19 Dec-18 Sep-18 Jun-18 Mar-18 Interest income $34,309 $35,789 $35,306 $26,634 $26,633 PIK interest income 2,280 832 499 1,457 1,946 Fee income 1,132 1,202 2,034 2,425 3,94
Slide 11: Historical Financial Information (continued)
Historical Financial Information (continued) ($ in thousands, except per share amounts) Select Balance Sheet and Other Data Q2’19 Q1’19 Q4’18 Q3’18 Q2’18 Mar-19 Dec-18 Sep-18 Jun-18 Mar-18 Investment Portfolio (at fair value) $1,504,888 $1,464,885 $1,491,201 $1,520,518 $1,400,684 Total Debt Outstand
Slide 12: Historical Portfolio Activity
Historical Portfolio Activity ($ in thousands) Q2’19 Q1’19 Q4’18 Q3’18 Q2’18 Mar-19 Dec-18 Sep-18 Jun-18 Mar-18 Investments at Fair Value $1,504,888 $1,464,885 $1,491,201 $1,520,518 $1,400,684 Number of Portfolio Companies 110 110 113 116 115 Average Portfolio Company Debt Investment Size $15,000 $1
Slide 13: Net Asset Value Per Share Bridge
Net Asset Value Per Share Bridge Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares
Slide 14: Capital Structure Overview
Capital Structure Overview ($ in millions) ($ in millions) (As % of total funding sources) ($ in millions) Funding Sources Interest Rate Type Historical Principal Outstanding and Leverage Ratio3 Maturity Profile of Liabilities Committed Principal Outstanding Interest Rate Maturity Credit Facility $7
Slide 15: Credit Facility Amendments Improve Flexibility and Reduce Costs
On February 25, 2019, we amended, extended and increased the size of our revolving credit facility Credit Facility Amendments Improve Flexibility and Reduce Costs Increased Facility Size Increased total commitments from $600 million to $680 million; additional $20 million was added in April 2019, br
Slide 16: Opportunities to Increase Return on Equity
Redeploy non-interest generating investments Opportunities to Increase Return on Equity 1 Rotate into higher-yielding proprietary investments 2 Utilize additional investment capacity at the Kemper JV 3 Exited over $44 million of non-interest generating investments during the quarter ended March 31,
Slide 17: Contact: Investor Relations
Contact: Michael Mosticchio, Investor Relations ocsl-ir@oaktreecapital.com
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