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Oxford Lane Capital Corp. Announces Net Asset Value and Selected Financial Results for the Second Fiscal Quarter and Declaration of Distributions on Common Stock for the Months Ending January 31, February 29 and March 31, 2020

936 Days ago

GREENWICH, Conn., Oct. 31, 2019 (GLOBE NEWSWIRE) -- 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 September 30, 2019 stood at $6.63, compared with a NAV per share on June 30, 2019 of $8.01.
  • Net investment income (“NII”), calculated in accordance with generally accepted accounting principles (“GAAP”), was approximately $16.7 million, or $0.31 per share, for the quarter ended September 30, 2019.
  • Our core net investment income (“Core NII”) was approximately $24.2 million, or $0.45 per share, for the quarter ended September 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 second fiscal quarter amounted to approximately $28.5 million, which represented an increase of $1.2 million from the quarter ended June 30, 2019.

    • For the quarter ended September 30, 2019 we recorded investment income from our portfolio as follows:

      • $27.3 million from our CLO equity investments, and

      • $1.2 million from our CLO debt investments and other income.

  • As of September 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 10.4%, compared with 11.8% as of June 30, 2019.
    • The weighted average effective yield of our CLO equity investments at current cost was 16.4%, compared with 16.9% as of June 30, 2019.
    • The weighted average cash yield of our CLO equity investments at current cost was 22.0%, compared with 19.8% as of June 30, 2019. 
  • For the quarter ended September 30, 2019 we recorded a net decrease in net assets resulting from operations of approximately $76.5 million, or $1.43 per share, comprised of:
    • Net investment income of $16.7 million;
    • Net realized loss of $2.3 million; and
    • Net unrealized depreciation of $90.9 million. 
  • During the quarter ended September 30, 2019 we made additional CLO investments of approximately $108.1 million, and received $8.6 million from sales and repayments of our CLO investments.
  • For the quarter ended September 30, 2019, we issued a total of 8,977,322 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 $88.5 million.  As of October 31, 2019, we had approximately 60 million shares outstanding.

  • On October 18, 2019, we entered into a $12.5 million repurchase transaction facility with Nomura Securities International, Inc., which the Company may use for working capital purposes.

  • On October 29, 2019 our Board of Directors declared the following distributions on our common stock:
Month Ending Record Date Payment Date Amount Per Share
January 31, 2020 January 17, 2020 January 31, 2020 $0.135
February 29, 2020 February 14, 2020 February 28, 2020 $0.135
March 31, 2020 March 17, 2020 March 31, 2020 $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:

 Shares Type
Per Share Dividend Amount Declared Record Dates Payment Dates
Series 2023 $           0.156250  December 18, January 17, February 14 December 31, January 31, February 28
Series 2024 $           0.140625  December 18, January 17, February 14 December 31, January 31, February 28

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 and excluding amounts that are expected to be a return of capital. 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, including those CLO equity investments that have not made their inaugural distribution for the relevant period end. 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 to 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 this 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 September 30, 2019:

   Three Months  Ended  
September 30, 2019  

  Per Share  
GAAP Net investment income   $16,732,071   $ 0.312  
CLO equity adjustments   7,515,854     0.140  
Core Net investment income   $24,247,925   $ 0.452  

We will host a conference call to discuss our second fiscal quarter results today, Thursday, October 31, 2019 at 9:00 AM ET. Please call 1-844-792-3730 to participate. A recording of the conference call will be available for replay for approximately 30 days following the call. The replay number is 1-877-344-7529, and the replay passcode is 10136492.  

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.

Bruce Rubin

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