Oaktree Specialty Lending Corp. Files 10-Q for Period Ending December 31, 2023

TL;DR

<b>Oaktree Specialty Lending Corp. (OCSL) has filed its Q4 2023 10-Q, detailing investment activities and financial positions.</b>

AI Summary

Oaktree Specialty Lending Corp (OCSL) filed a Quarterly Report (10-Q) with the SEC on February 1, 2024. Oaktree Specialty Lending Corp. (OCSL) filed its 10-Q report for the quarter ended December 31, 2023. The filing covers the period from October 1, 2023, to December 31, 2023. The company was formerly known as Fifth Street Finance Corp. Key investment types include Debt and Equity Securities, with references to realized and unrealized gains/losses. The report details investments in various entities such as C5 Technology Holdings, LLC and Dominion Diagnostics, LLC.

Why It Matters

For investors and stakeholders tracking Oaktree Specialty Lending Corp, this filing contains several important signals. This 10-Q provides crucial insights into OCSL's investment portfolio performance and financial health during the specified quarter, essential for investors assessing the company's current standing. Understanding the breakdown of investments, including affiliated and unaffiliated issuers, and the recognition of gains and losses, is key to evaluating OCSL's strategy and risk exposure.

Risk Assessment

Risk Level: medium — Oaktree Specialty Lending Corp shows moderate risk based on this filing. The filing is a standard 10-Q, which provides a snapshot of financial performance and does not inherently signal significant positive or negative events, thus warranting a medium risk assessment for immediate actionability.

Analyst Insight

Review the detailed investment schedules and financial statements within the 10-Q to understand the performance of OCSL's portfolio and identify any significant changes or trends.

Key Numbers

• 2023-12-31 — Reporting Period End Date (Conformed Period of Report)
• 2024-02-01 — Filing Date (As of Date)
• 2023-10-01 — Quarter Start Date (Reporting period)
• 2022-12-31 — Prior Year End Date (Comparison period)

Key Players & Entities

• Oaktree Specialty Lending Corp. (company) — Filer of the 10-Q
• Fifth Street Finance Corp. (company) — Former name of Oaktree Specialty Lending Corp.
• C5 Technology Holdings, LLC (company) — Investee company mentioned in the filing
• Dominion Diagnostics, LLC (company) — Investee company mentioned in the filing
• 2023-12-31 (date) — End of the reporting period
• 2024-02-01 (date) — Filing date of the 10-Q

Forward-Looking Statements

• Oaktree Specialty Lending Corp will continue to grow its investment portfolio in the next quarter. (Oaktree Specialty Lending Corp) — medium confidence, target: 2024-03-31

FAQ

Risk Factors

• Investment Portfolio Risks [medium — financial]: The company's investments are subject to various risks, including market fluctuations, credit risk, and interest rate sensitivity, which can impact the value of its portfolio.
• Regulatory Compliance [medium — regulatory]: As a BDC, OCSL is subject to specific regulations that impact its operations, investment strategies, and ability to pay dividends.

Key Dates

• 2023-12-31: Quarter End Date — Marks the end of the reporting period for the 10-Q.
• 2024-02-01: Filing Date — Date the 10-Q was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a comprehensive overview of a company's financial performance during a specific quarter.)

Debt and Equity Securities

Investments in financial instruments representing either a loan to an entity or ownership in an entity. (Core components of OCSL's investment portfolio, subject to valuation and performance analysis.)

Key Financial Figures

• $0.01 — ich Registered Common Stock, par value $0.01 per share OCSL The Nasdaq Stock Market

Filing Documents

• ocsl-20231231.htm (10-Q) — 8103KB
• ocsl-ex311_12312023x10xq.htm (EX-31.1) — 8KB
• ocsl-ex312_12312023x10xq.htm (EX-31.2) — 8KB
• ocsl-ex321_12312023x10xq.htm (EX-32.1) — 5KB
• ocsl-ex322_12312023x10xq.htm (EX-32.2) — 5KB
• 0001414932-24-000004.txt (&nbsp;) — 39002KB
• ocsl-20231231.xsd (EX-101.SCH) — 92KB
• ocsl-20231231_cal.xml (EX-101.CAL) — 87KB
• ocsl-20231231_def.xml (EX-101.DEF) — 552KB
• ocsl-20231231_lab.xml (EX-101.LAB) — 921KB
• ocsl-20231231_pre.xml (EX-101.PRE) — 687KB
• ocsl-20231231_htm.xml (XML) — 8326KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION Item 1. Consolidated Financial Statements: Consolidated Statements of Assets and Liabilities as of December 31, 2023 (unaudited) and September 30, 2023 2 Consolidated Statements of Operations (unaudited) for the three months ended December 31, 2023 and 2022 3 Consolidated Statements of Changes in Net Assets (unaudited) for the three months ended December 31, 2023 and 2022 4 Consolidated Statements of Cash Flows (unaudited) for the three months ended December 31, 2023 and 2022 5 Consolidated Schedule of Investments (unaudited) as of December 31, 2023 6 Consolidated Schedule of Investments as of September 30, 2023 16

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 25 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 77 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 95 Item 4.

Controls and Procedures

Controls and Procedures 97

— OTHER INFORMATION

PART II — OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 97 Item 1A.

Risk Factors

Risk Factors 97 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 97 Item 3. Defaults Upon Senior Securities 97 Item 4. Mine Safety Disclosures 97 Item 5. Other Information 97 Item 6. Exhibits 98

Consolidated Financial Statements

Item 1. Consolidated Financial Statements. Oaktree Specialty Lending Corporation Consolidated Statements of Assets and Liabilities (in thousands, except per share amounts) December 31, 2023 (unaudited) September 30, 2023 ASSETS Investments at fair value: Control investments (cost December 31 2023: $ 363,124 ; cost September 30, 2023: $ 345,245 ) $ 316,309 $ 297,091 Affiliate investments (cost December 31, 2023: $ 26,916 ; cost September 30, 2023: $ 24,898 ) 24,442 23,349 Non-control/Non-affiliate investments (cost December 31, 2023: $ 2,797,710 ; cost September 30, 2023: $ 2,673,976 ) 2,677,801 2,571,980 Total investments at fair value (cost December 31, 2023: $ 3,187,750 ; cost September 30, 2023: $ 3,044,119 ) 3,018,552 2,892,420 Cash and cash equivalents 112,369 136,450 Restricted cash 19,328 9,089 Interest, dividends and fees receivable 43,038 44,570 Due from portfolio companies 7,912 6,317 Receivables from unsettled transactions 23,931 55,441 Due from broker 26,520 54,260 Deferred financing costs 11,827 12,541 Deferred offering costs 131 160 Derivative assets at fair value — 4,910 Other assets 2,587 1,681 Total assets $ 3,266,195 $ 3,217,839 LIABILITIES AND NET ASSETS Liabilities: Accounts payable, accrued expenses and other liabilities $ 3,273 $ 2,950 Base management fee and incentive fee payable 19,004 19,547 Due to affiliate 3,815 4,310 Interest payable 18,980 16,007 Director fees payable 160 — Payables from unsettled transactions 57,279 11,006 Derivative liability at fair value 29,316 47,519 Deferred tax liability — 5 Credit facilities payable 710,000 710,000 Unsecured notes payable (net of $ 6,534 and $ 7,076 of unamortized financing costs as of December 31, 2023 and September 30, 2023, respectively) 912,717 890,731 Total liabilities 1,754,544 1,702,075 Commitments and contingencies (Note 13) Net assets: Common stock, $ 0.01 par value per share, 250,000 shares authorized; 78,965 and 77,225 shares issued and outst

incentive fee 9,028 7,703

Part I incentive fee 9,028 7,703 Professional fees 1,504 1,500 Directors fees 160 160 Interest expense 32,170 20,719 Administrator expense 366 298 General and administrative expenses 591 746 Total expenses 55,296 41,043 Fees waived ( 1,500 ) ( 750 ) Net expenses 53,796 40,293 Net investment income before taxes 44,189 38,886 Excise tax — ( 78 ) Net investment income 44,189 38,808 Unrealized appreciation (depreciation): Control investments 1,339 ( 3,309 ) Affiliate investments ( 925 ) 3 Non-control/Non-affiliate investments ( 17,615 ) ( 8,675 ) Foreign currency forward contracts ( 7,824 ) ( 11,001 ) Net unrealized appreciation (depreciation) ( 25,025 ) ( 22,982 ) Realized gains (losses): Control investments 786 — Non-control/Non-affiliate investments ( 13,340 ) ( 7,651 ) Foreign currency forward contracts 4,101 4,448 Net realized gains (losses) ( 8,453 ) ( 3,203 ) (Provision) benefit for taxes on realized and unrealized gains (losses) ( 176 ) 549 Net realized and unrealized gains (losses), net of taxes ( 33,654 ) ( 25,636 ) Net increase (decrease) in net assets resulting from operations $ 10,535 $ 13,172 Net investment income per common share — basic and diluted (1) $ 0.57 $ 0.63 Earnings (loss) per common share — basic and diluted (Note 5) (1) $ 0.14 $ 0.22 Weighted average common shares outstanding — basic and diluted (1) 77,840 61,142 __________ (1) As discussed in Note 2, the Company completed a 1-for-3 reverse stock split on January 20, 2023, effective as of the commencement of trading on January 23, 2023. The weighted average common shares outstanding and per share information reflect the reverse stock split on a retroactive basis. See notes to Consolidated Financial Statements. 3 Oaktree Specialty Lending Corporation Consolidated Statements of Changes in Net Assets (in thousands, except per share amounts) (unaudited) Three months ended December 31, 2023 Three months ended December 31, 2022 Operations: Net investment

View Full Filing

View this 10-Q filing on SEC EDGAR