Oxford Lane Capital Corp. Announces Net Asset Value and Selected Financial Results as of September 30, 2017
November 07 2017 - 8:00AM
Oxford Lane Capital Corp. (“Oxford Lane”, "Fund", “we”, “us” or
“our”) (Nasdaq:OXLC) (Nasdaq:OXLCO) (Nasdaq:OXLCM) announced today
the following financial results and related information:
- Net asset value per share as of September 30, 2017 stood at
$9.71 compared with a net asset value per share at June 30, 2017 of
$10.18.
- Net investment income, calculated in accordance with generally
accepted accounting principles (“GAAP”), was approximately $9.1
million, or approximately $0.37 per share, for the quarter ended
September 30, 2017.
- Our core net investment income (“Core NII”) was approximately
$11.2 million, or approximately $0.46 per share, for the quarter
ended September 30, 2017. ο Core NII represents
net investment income adjusted for additional cash income
distributions received, or entitled to be received (if any, in
either case), on our collateralized loan obligation (“CLO”) equity
investments. (See additional information under
“Supplemental Information Regarding Core Net Investment Income”
below).ο While our experience has been that cash
flow distributions have historically represented useful indicators
of our CLO equity investments’ annual taxable income during certain
periods, we believe that current and future cash flow distributions
may represent less accurate indicators of taxable income with
respect to our CLO equity investments than they have in the
past. Accordingly, our taxable income may be materially
different than either GAAP NII or Core NII.
- Total investment income, calculated in accordance with GAAP,
amounted to approximately $17.5 million for the quarter ended
September 30, 2017.ο For the quarter ended September 30,
2017, we recorded GAAP investment income from our portfolio as
follows:
- approximately $16.4 million from our CLO equity
investments,
- approximately $0.4 million from our CLO debt investments,
and
- approximately $0.7 million from other sources.
ο The weighted average yield
of our CLO debt investments at current cost was approximately 9.3%
as of September 30, 2017.
ο The weighted average
effective yield of our CLO equity investments at current cost was
approximately 16.4% as of September 30, 2017.
ο The weighted average cash yield of our CLO
equity investments at current cost was approximately 20.0% as of
September 30, 2017. The decreased yield as of September 30, 2017
was principally related to certain one-time expenses associated
with CLO refinancing transactions as well as lower weighted average
spreads on loan assets within CLOs generally.
- Net decrease in net assets from operations was approximately
$2.0 million, or approximately $0.08 per share, for the quarter
ended September 30, 2017, including:ο Net investment income
of approximately $9.1 million for the quarter ended September 30,
2017; ο Net realized losses of approximately $2.9
million for the quarter ended September 30, 2017 of which $1.7
million represented an acceleration of costs associated with the
optional redemption of our 8.125% Series 2024 Term Preferred Stock;
and ο Net unrealized depreciation of approximately $8.2
million for the quarter ended September 30, 2017.
- During the quarter ended September 30, 2017, we made additional
CLO investments of approximately $54.3 million.
- During the quarter ended September 30, 2017, we received
approximately $24.0 million from sales and repayments of our CLO
investments.
- During the quarter ended September 30, 2017, we issued a total
of 1,091,489 shares of common stock pursuant to an “at-the-market”
offering, resulting in net proceeds of approximately $11.3 million
after deducting the sales agent’s commissions and offering
expenses.
- On July 14, 2017 (the “Redemption Date”), we redeemed all
of the issued and outstanding shares (an aggregate of 2,020,179
shares) of our 8.125% Series 2024 Term Preferred Stock, for a
redemption price of $25 per share plus $0.07336 in accrued but
unpaid dividends per share to the Redemption Date, for an aggregate
redemption price of $25.07336 per share.
- Our Board of Directors has declared the following distribution
on our common stock:
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|
|
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Quarter Ending |
Record Date |
Payment Date |
Amount Per Share |
December 31, 2017 |
December 15, 2017 |
December 29, 2017 |
$0.40 |
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|
|
|
|
Our Board of Directors has also declared the
required monthly dividends on our Series 2023 Term Preferred Shares
and New Series 2024 Term Preferred Shares (each, a “Share”), as
follows:
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Per Share Dividend Amount
Declared |
|
Record Dates |
|
Payment Dates |
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|
|
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Series
2023 |
|
$0.15625 |
|
December 15, January 15, February 15 |
|
December 29, January 31, February 28 |
|
|
|
|
|
|
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New Series
2024 |
|
$0.140625 |
|
December 15, January 15, February 15 |
|
December 29, January 31, February 28 |
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In accordance with their terms, each of the
Series 2023 Term Preferred Shares and New Series 2024 Term
Preferred Shares will pay a monthly dividend at a fixed rate of
7.50% and 6.75%, respectively, of the $25.00 per share liquidation
preference, or $1.875 and $1.6875 per share per year, respectively.
This fixed annual dividend rate is subject to adjustment under
certain circumstances, but will not in any case be lower than 7.50%
and 6.75% per year, respectively, for each of the Series 2023 Term
Preferred Shares and New Series 2024 Term Preferred Shares.
Supplemental Information Regarding Core
Net Investment Income
On a supplemental basis, we provide information
relating to core net investment income, which is a non-GAAP
measure. This measure is provided in addition to, but not as a
substitute for, net investment income determined in accordance with
GAAP. Our non-GAAP measures may differ from similar measures by
other companies, even if similar terms are used to identify such
measures. Core net investment income represents net investment
income adjusted for additional cash income distributions received,
or entitled to be received (if any, in either case), on our CLO
equity investments (excluding those cash distributions believed to
represent a return of capital).
Income from investments in the “equity” class
securities of CLO vehicles, for GAAP purposes, is recorded using
the effective interest method based upon an effective yield to the
expected redemption utilizing estimated cash flows compared to the
cost, resulting in an effective yield for the investment; the
difference between the actual cash received or distributions
entitled to be received and the effective yield calculation is an
adjustment to cost. Accordingly, investment income recognized on
CLO equity securities in the GAAP statement of operations differs
from the cash distributions actually received by us during the
period (referred to below as “CLO equity additional
distributions”).
Further, in order to continue to qualify to be
taxed as a regulated investment company, we are required, among
other things, to distribute at least 90% of our investment company
taxable income annually. Therefore, core net investment income may
provide a better indication of estimated taxable income for a
reporting period than does GAAP net investment income, although we
can offer no assurance that will be the case as the ultimate tax
character of our earnings cannot be determined until tax returns
are prepared after the end of a fiscal year. We note that these
non-GAAP measures may not be useful indicators of taxable earnings,
particularly during periods of market disruption and volatility and
our taxable income may differ materially from our core net
investment income.
The following table provides a reconciliation of net investment
income to core net investment income for the three months ended
September 30, 2017:
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|
|
|
Three Months Ended |
|
September 30, 2017 |
|
|
Amount |
|
Per Share |
|
Amount |
|
Net investment
income |
$ 9,082,331 |
|
$ 0.373 |
|
CLO equity additional
distributions |
|
2,084,374 |
|
|
0.086 |
|
Core net investment
income |
$ 11,166,705 |
|
$ 0.459 |
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|
|
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A presentation containing further detail
regarding our quarterly results of operations has been posted to
our website under the Investor Relations section at Oxford
Lane Presentation.
We will host a conference call to discuss our
second fiscal quarter results today, Tuesday, November 7, 2017 at
10:00 AM ET. The toll free dial-in number will be
1-844-792-3730. There will be a recorded replay of the call
available for 30 days after the call. If you are interested
in hearing the recording, please dial 1-877-344-7529. The
replay pass-code number is 10114122.
About Oxford Lane Capital
Corp.
Oxford Lane Capital Corp. is a publicly-traded
registered closed-end management investment company. It currently
seeks to achieve its investment objective of maximizing
risk-adjusted total return by investing in securitization vehicles
which, in turn, primarily invest in senior secured loans made to
companies whose debt is unrated or is rated below investment
grade.
Forward-Looking Statements
This press release contains forward-looking
statements subject to the inherent uncertainties in predicting
future results and conditions. Any statements that are not
statements of historical fact (including statements containing the
words “believes,” “plans,” “anticipates,” “expects,” “estimates”
and similar expressions) should also be considered to be
forward-looking statements. Certain factors could cause actual
results and conditions to differ materially from those projected in
these forward-looking statements. These factors are identified from
time to time in our filings with the Securities and Exchange
Commission. We undertake no obligation to update such
statements to reflect subsequent events, unless required to do so
by law.
Contact: Bruce Rubin 203-983-5280
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