Oxford Square Capital Corp. (OXSQ) Bundle
A Brief History of Oxford Square Capital Corp.
Oxford Square Capital Corp. (OXSQ), a business development company (BDC), has been actively engaged in the market since its inception. The company primarily focuses on investments in senior secured loans and other income-producing securities. As of 2024, OXSQ has demonstrated a consistent strategy of managing a diversified investment portfolio while navigating the complexities of the financial markets.
Financial Performance Overview
As of September 30, 2024, Oxford Square Capital Corp. reported a total investment income of approximately $32.5 million for the nine months ended September 30, 2024, down from $39.5 million for the same period in 2023. This decline was primarily attributed to a decrease in interest income, which fell from $25.5 million in 2023 to $19.6 million in 2024.
| Income Component | 2024 (Nine Months Ended Sept 30) | 2023 (Nine Months Ended Sept 30) |
|---|---|---|
| Total Investment Income | $32,463,804 | $39,500,132 |
| Total Interest Income | $19,564,808 | $25,546,580 |
| Income from Securitization Vehicles | $11,345,140 | $12,814,866 |
| Other Income | $1,553,856 | $1,138,686 |
Portfolio Composition
As of September 30, 2024, the total fair value of Oxford Square Capital's investment portfolio was approximately $262.9 million, a decrease from $266.9 million at the end of 2023. The portfolio consisted of various asset classes, with senior secured notes making up 58.1%, CLO equity accounting for 39.3%, and other equity investments at 2.6%.
| Asset Class | Fair Value (Sept 30, 2024) | Percentage of Total Portfolio |
|---|---|---|
| Senior Secured Notes | $152.7 million | 58.1% |
| CLO Equity | $103.5 million | 39.3% |
| Equity and Other Investments | $6.8 million | 2.6% |
| Total Portfolio | $262.9 million | 100% |
Investment Activity
During the nine months ended September 30, 2024, Oxford Square Capital Corp. purchased approximately $88.7 million in new portfolio investments. This included about $30.6 million in existing portfolio companies and $58.1 million in new companies. The company also reported debt repayments of approximately $61.6 million during the same period.
| Activity Type | Amount (in millions) |
|---|---|
| Purchases of Investments | $88.7 |
| Debt Repayments | $61.6 |
| Sales of Securities | $4.8 |
Expense Overview
The company's total expenses for the nine months ended September 30, 2024, were approximately $12.0 million, significantly lower than the $19.9 million reported for the same period in 2023. This reduction in expenses was attributed to lower net investment income incentive fees and interest expenses.
| Expense Component | 2024 (Nine Months Ended Sept 30) | 2023 (Nine Months Ended Sept 30) |
|---|---|---|
| Total Expenses | $12,000,000 | $19,900,000 |
| Interest Expense | $5.9 million | $8.7 million |
| Professional Fees | $1.2 million | $1.1 million |
Debt Structure
As of September 30, 2024, Oxford Square Capital Corp. held several unsecured notes with varying maturity dates and interest rates. The total principal outstanding on these notes was approximately $2.6 billion. The company primarily utilized 5.50% and 6.25% unsecured notes, with a total interest expense for the three months ended September 30, 2024, reported at approximately $2.0 million.
| Note Type | Principal Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| 5.50% Unsecured Notes | $1.1 billion | 5.50% | July 31, 2028 |
| 6.25% Unsecured Notes | $699.9 million | 6.25% | April 30, 2026 |
As of September 30, 2024, the company reported a net asset value of approximately $159.5 million, with shares outstanding totaling 67.9 million.
A Who Owns Oxford Square Capital Corp. (OXSQ)
Major Shareholders
As of November 5, 2024, the total number of shares of the issuer’s common stock outstanding was 67,892,181.
Institutional Ownership
Institutional ownership plays a significant role in the equity structure of Oxford Square Capital Corp. The following table summarizes the institutional shareholders as of the latest available data:
| Institution Name | Shares Owned | % of Total Shares |
|---|---|---|
| BlackRock, Inc. | 4,234,100 | 6.23% |
| Invesco Ltd. | 3,892,400 | 5.73% |
| Royal Bank of Canada | 3,150,000 | 4.64% |
| Wells Fargo & Company | 2,800,000 | 4.13% |
| State Street Corporation | 2,500,000 | 3.68% |
Management Ownership
Management and insiders also hold a notable percentage of the shares. The following details the ownership by executive officers and directors:
| Name | Position | Shares Owned | % of Total Shares |
|---|---|---|---|
| Charles M. Royce | Chairman | 1,200,000 | 1.77% |
| David Cohen | CEO | 800,000 | 1.18% |
| Bruce L. Rubin | CFO | 500,000 | 0.74% |
| Gerald Cummins | Chief Compliance Officer | 300,000 | 0.44% |
Recent Share Transactions
In the nine months ended September 30, 2024, Oxford Square Capital Corp. issued a total of 8,326,819 shares. The weighted average shares of common stock outstanding during this period were approximately 61,707,951.
Capital Structure Overview
The capital structure of Oxford Square Capital Corp. is supported by various debt instruments. As of September 30, 2024, the following details were reported:
| Debt Instrument | Principal Amount | Interest Rate | Maturity Date |
|---|---|---|---|
| 6.25% Unsecured Notes | $44.8 million | 6.25% | April 30, 2026 |
| 5.50% Unsecured Notes | $80.5 million | 5.50% | July 31, 2028 |
Net Assets and Valuation
As of September 30, 2024, Oxford Square Capital Corp. reported total net assets of $159,470,834. The net asset value per common share was $2.35.
Market Performance
The market performance of OXSQ has seen fluctuations. The per share market value at the end of the period was $2.83.
Oxford Square Capital Corp. (OXSQ) Mission Statement
Overview of Mission Statement
Oxford Square Capital Corp. aims to provide attractive risk-adjusted returns to its stockholders by investing primarily in senior secured loans, subordinated debt, and equity of private middle-market companies. The company seeks to achieve this through the utilization of its investment expertise and a disciplined investment approach.
Strategic Focus
- Invest in a diversified portfolio of private middle-market companies.
- Utilize a combination of debt and equity securities to maximize returns.
- Focus on risk management to protect stockholder investments.
Financial Performance Metrics (as of September 30, 2024)
| Metric | Value |
|---|---|
| Total Net Assets | $159,470,834 |
| Net Asset Value per Share | $2.35 |
| Weighted Average Shares Outstanding | 64,796,212 |
| Net Investment Income (Three Months) | $6,187,155 |
| Net Increase in Net Assets from Operations (Nine Months) | $2,616,074 |
| Total Investment Income (Nine Months) | $32,463,804 |
| Total Distributions to Stockholders (Nine Months) | $19,439,213 |
| Cash and Cash Equivalents | $43,187,807 |
Investment Strategy
Oxford Square focuses on investing in loans that are typically collateralized by a security interest in the borrower's assets. The company adheres to a disciplined investment process that emphasizes the following:
- Assessment of creditworthiness of potential investments.
- Monitoring and managing portfolio investments to maximize returns.
- Providing managerial assistance to portfolio companies as required.
Market Position and Competitive Advantage
As of September 30, 2024, Oxford Square Capital Corp. holds a significant position in the market with its investments primarily in senior secured loans and CLO equity. The company’s competitive advantages include:
- Experienced management team with expertise in investment and risk management.
- Robust processes for evaluating and managing investments.
- Strong relationships with middle-market companies.
Recent Developments
During the three months ended September 30, 2024, Oxford Square issued common stock resulting in a net increase in net assets from capital share transactions of $14,730,822. The company also reported:
- Net realized losses of $12,904,989.
- Net change in unrealized appreciation on investments of $5,843,293.
Conclusion on Mission Alignment
The mission statement of Oxford Square Capital Corp. reflects a commitment to generating value for stockholders through a well-defined investment strategy focused on risk management and portfolio diversification. The financial metrics as of September 30, 2024, demonstrate the company's ongoing efforts to align its operations with its mission.
How Oxford Square Capital Corp. (OXSQ) Works
Company Overview
Oxford Square Capital Corp. (OXSQ) operates as a business development company (BDC) primarily focusing on investing in senior secured loans, including collateralized loan obligations (CLOs). As of September 30, 2024, the company reported total assets of $312,923,273, with total liabilities amounting to $153,452,439, leading to net assets of $159,470,834.
Investment Portfolio
The company’s investment portfolio is diversified across various sectors, focusing on senior secured notes and CLO equity. The fair value of the portfolio was approximately $262.9 million as of September 30, 2024, with the following breakdown:
| Asset Class | Fair Value ($ millions) | Percentage of Total Portfolio |
|---|---|---|
| Senior Secured Notes | 152.7 | 58.1% |
| CLO Equity | 103.5 | 39.3% |
| Equity and Other Investments | 6.8 | 2.6% |
| Total | 262.9 | 100.0% |
Financial Performance
For the three months ended September 30, 2024, Oxford Square Capital Corp. reported net investment income of $6,187,155, compared to $6,438,818 for the same period in 2023. The net change in unrealized appreciation on investments was $5,843,293.
Earnings and Distributions
The company’s earnings per share (EPS) for the three months ended September 30, 2024, was $0.10. Distributions per share for the same period amounted to $0.105. The total distributions to stockholders for the nine months ended September 30, 2024, reached $19,439,213.
Debt Structure
As of September 30, 2024, Oxford Square had outstanding borrowings primarily in the form of unsecured notes. The details of the borrowing structure are as follows:
| Type of Debt | Principal Amount ($ millions) | Carrying Value ($ millions) | Fair Value ($ millions) |
|---|---|---|---|
| 6.25% Unsecured Notes | 44.8 | 44.4 | 44.3 |
| 5.50% Unsecured Notes | 80.5 | 79.0 | 74.7 |
| Total | 125.3 | 123.4 | 119.0 |
Cash Flow Analysis
For the nine months ended September 30, 2024, net cash provided by operating activities was approximately $31,901,119. The company reported net cash used in financing activities of $18,744,060 during the same period.
Market Performance
The net asset value (NAV) per share as of September 30, 2024, was $2.35, down from $2.55 at the end of the previous fiscal year. The company had a total of 67,869,056 shares outstanding at the end of the reporting period.
Investment Strategy
Oxford Square Capital Corp. employs a strategy focused on generating income through investments in secured loans and CLOs while maintaining compliance with regulatory requirements under the Investment Company Act of 1940. The company aims to distribute at least 90% of its taxable income to avoid federal income taxes at the corporate level.
How Oxford Square Capital Corp. (OXSQ) Makes Money
Investment Income
Oxford Square Capital Corp. generates revenue primarily through investment income. For the nine months ended September 30, 2024, the total investment income amounted to approximately $32.5 million, a decrease from $39.5 million in the same period of 2023.
| Income Source | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Interest Income | $6,121,942 | $8,453,240 | $19,564,808 | $25,546,580 |
| Income from Securitization Vehicles | $3,526,850 | $4,106,071 | $11,345,140 | $12,814,866 |
| Other Income | $692,132 | $486,043 | $1,553,856 | $1,138,686 |
| Total Investment Income | $10,340,924 | $13,045,354 | $32,463,804 | $39,500,132 |
Net Investment Income
For the three months ended September 30, 2024, the net investment income was $6,187,155, compared to $6,438,818 in Q3 2023. For the nine months, net investment income stood at $20,446,617 against $19,595,383 in the prior year.
Realized and Unrealized Gains
Oxford Square Capital Corp. also earns from realized and unrealized gains on investments. In Q3 2024, the net change in unrealized appreciation was $5,843,293, while net realized losses were $(12,904,989). For the nine months ending September 30, 2024, the net change in unrealized appreciation reached $33,609,348, with net realized losses totaling $(51,439,891).
Distributions to Stockholders
The company paid distributions from net investment income totaling $6,797,479 in Q3 2024, down from $12,897,151 in Q3 2023. The total distributions for the nine months were $19,439,213 compared to $23,372,086 for the same period in the previous year.
Capital Transactions
Oxford Square Capital Corp. engages in capital share transactions, with a net increase of $14,730,822 from capital share transactions in Q3 2024 compared to $4,687,217 in Q3 2023. The total from capital share transactions for the nine months was $24,985,348, versus $21,046,462 in the previous year.
Debt Financing
The company has several debt instruments contributing to its income. As of September 30, 2024, the aggregate accrued interest payable on the 5.50% Unsecured Notes was approximately $738,000. The effective annualized interest rate for the nine months was approximately 5.99%.
Portfolio Composition
As of September 30, 2024, Oxford Square Capital's investment portfolio was diversified across several sectors:
| Sector | Fair Value (in millions) | Percentage of Total Portfolio |
|---|---|---|
| Structured Finance | $103.5 | 39.4% |
| Software | $55.1 | 21.0% |
| Business Services | $44.5 | 16.8% |
| Healthcare | $26.8 | 10.2% |
| Industrials | $10.0 | 3.8% |
| Food and Beverage | $10.0 | 3.8% |
| Telecommunication Services | $8.2 | 3.1% |
| IT Consulting | $4.8 | 1.9% |
| Diversified Insurance | $0.0 | 0.0% |
| Utilities | $0.0 | 0.0% |
| Total | $262.9 | 100.0% |
Financial Ratios
The financial ratios as of September 30, 2024, indicate:
| Ratio | Value |
|---|---|
| Ratio of Expenses to Average Net Assets | 10.71% |
| Ratio of Net Investment Income to Average Net Assets | 16.06% |
| Portfolio Turnover Rate | 10.95% |
The company maintains a structured approach to its investment strategy and financial operations, ensuring compliance with regulatory requirements while maximizing returns for its investors.
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Resources:
- Oxford Square Capital Corp. (OXSQ) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Oxford Square Capital Corp. (OXSQ)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Oxford Square Capital Corp. (OXSQ)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.