Oxford Lane Capital Corp. Announces Net Asset Value and Selected Financial Results for the First Fiscal Quarter
August 01 2019 - 8:00AM
Oxford Lane Capital Corp. (NasdaqGS: OXLC) (NasdaqGS: OXLCO)
(NasdaqGS: OXLCM) (“Oxford Lane,” the “Company,” “we,” “us” or
“our”) announced today the following financial results and related
information:
- Net asset value (“NAV”) per share as of June 30, 2019 stood at
$8.01, compared with a NAV per share on March 31, 2019 of
$8.32.
- Net investment income (“NII”), calculated in accordance with
generally accepted accounting principles (“GAAP”), was
approximately $15.8 million, or $0.35 per share, for the quarter
ended June 30, 2019.
- Our core net investment income (“Core NII”) was approximately
$19.7 million, or $0.43 per share, for the quarter ended June 30,
2019.
- Core NII represents NII adjusted for additional cash
distributions received, or entitled to be received (if any, in
either case), on our collateralized loan obligation (“CLO”) equity
investments while excluding any cash distributions believed to
represent a return of capital. See additional information
under “Supplemental Information Regarding Core Net Investment
Income” below.
- We emphasize that our taxable income may
materially differ from our GAAP NII and/or our Core NII, and that
neither GAAP NII nor Core NII should be relied upon as indicators
of our taxable income.
- Total investment income for the first fiscal quarter amounted
to approximately $27.3 million, which represented an increase of
$3.8 million from the quarter ended March 31, 2019.
- For the quarter ended June 30, 2019 we recorded investment
income from our portfolio as follows:
- $26.3 million from our CLO equity investments, and
- $1.0 million from our CLO debt investments and other
income.
- As of June 30, 2019 the following metrics applied (note that
none of these metrics represented a total return to
shareholders):
- The weighted average yield of our CLO debt investments at
current cost was 11.8%, compared with 11.7% as of March 31,
2019.
- The weighted average effective yield of our CLO equity
investments at current cost was 16.9%, compared with 15.7% as of
March 31, 2019.
- The weighted average cash yield of our CLO equity investments
at current cost was 19.8%, compared with 20.3% as of March 31,
2019.
- For the quarter ended June 30, 2019 we recorded a net decrease
in net assets resulting from operations of approximately $10.0
million, or $0.22 per share, including:
- Net investment income of $15.8 million;
- Net realized loss of $0.6 million; and
- Net unrealized depreciation of $25.2 million.
- During the quarter ended June 30, 2019 we made additional CLO
investments of approximately $138.5 million, and received $51.1
million from sales and repayments of our CLO
investments.
- For the first fiscal quarter, we issued a total of 7,164,555
shares of common stock pursuant to an “at-the-market” offering.
After deducting the sales agent’s commissions and offering
expenses, this resulted in net proceeds of approximately $72.8
million.
- On July 31, 2019 our Board of Directors declared the following
distributions on our common stock:
Month Ending |
Record Date |
Payment Date |
Amount Per Share |
October 31, 2019 |
October 21, 2019 |
October 31, 2019 |
$0.135 |
November 30, 2019 |
November 15, 2019 |
November 29, 2019 |
$0.135 |
December 31, 2019 |
December 18, 2019 |
December 31, 2019 |
$0.135 |
Our Board of Directors also declared the required monthly
dividends on our Series 2023 Term Preferred Shares and Series 2024
Term Preferred Shares (each, a “Share”) as follows:
Preferred Shares Type |
Per Share Dividend Amount Declared |
Record Dates |
Payment Dates |
Series 2023 |
$ |
0.156250 |
September 20, October 21, November 18 |
September 30, October 31, November 29 |
Series 2024 |
$ |
0.140625 |
September 20, October 21, November 18 |
September 30, October 31, November 29 |
In accordance with their terms, each of the Series 2023 Term
Preferred Shares and 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
Series 2024 Term Preferred Shares.
Supplemental Information Regarding Core Net Investment
Income
We provide information relating to Core NII (a non-GAAP measure)
on a supplemental basis. This measure is not provided as a
substitute for GAAP NII, but in addition to it. Our non-GAAP
measures may differ from similar measures by other companies, even
in the event of similar terms being utilized to identify such
measures. Core NII represents GAAP NII adjusted for additional cash
distributions received, or entitled to be received (if any, in
either case), on our CLO equity investments. OXLC’s management uses
this information in its internal analysis of results and believes
that this information may be informative in gauging the quality of
OXLC’s financial performance, identifying trends in its results and
providing meaningful period-to-period comparisons.
Income from investments in the “equity” class securities of CLO
vehicles, for GAAP purposes, is recorded using the effective
interest method – this is based on an effective yield to the
expected redemption utilizing estimated cash flows at current cost.
The result is an effective yield for the investment in which the
difference between the actual cash received, or distributions
entitled to be received, and the effective yield calculation is
adjusted from the cost. Accordingly, investment income recognized
on CLO equity securities in the GAAP statement of operations
differs from the cash distributions actually received by the
Company during the period (referred to below as “CLO equity
adjustments”).
Furthermore, in order for the Company to continue qualifying as
a regulated investment company (“RIC”) for tax purposes, we are
required, among other things, to distribute at least 90% of our
investment company taxable income annually. Therefore, Core NII may
provide a better indication of our estimated taxable income for a
reporting period than GAAP NII; we can offer no assurance that will
be the case, however, as the ultimate tax character of our earnings
cannot be determined until after tax returns are prepared at the
close of a fiscal year. We note that these non-GAAP measures may
not serve as useful indicators of taxable earnings, particularly
during periods of market disruption and volatility, and, as such,
our taxable income may differ materially from our Core NII.
The following table provides a reconciliation of
GAAP NII to Core NII for the three months ended June 30, 2019:
|
Three
Months Ended |
|
June 30, 2019 |
|
|
Amount |
|
Per Share |
|
Amount |
|
GAAP Net
investment income |
$ |
15,845,712 |
|
$ |
0.349 |
|
CLO equity adjustments |
|
3,868,186 |
|
|
0.085 |
|
Core Net investment income |
$ |
19,713,898 |
|
$ |
0.434 |
|
We will host a conference call to discuss our first fiscal
quarter results today, Thursday, August 1, 2019 at 9:00 AM ET.
Please call 1-844-792-3730 to participate. A recording of the
conference call will be available to replay for approximately 30
days following the call. The replay number is 1-877-344-7529, and
the replay passcode is 10133983.
A presentation containing additional details regarding our
quarterly results of operations has been posted under the Investor
Relations section of our website at www.oxfordlanecapital.com.
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 debt and equity tranches of collateralized
loan obligation (“CLO”) vehicles. CLO investments may also include
warehouse facilities, which are financing structures intended to
aggregate loans that may be used to form the basis of a CLO
vehicle.
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, except as may be required by law.
Contact: Bruce Rubin 203-983-5280
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