Q1 2024 OFS Capital Corp Earnings Call Transcript
Key Points
- Net investment income increased to $0.42 per share, a 20% rise from the previous quarter, primarily due to nonrecurring items.
- OFS Capital Corp (OFS) continues to cover its distribution, maintaining a $0.34 per share payout, representing a 13.7% annualized yield based on the quarter's stock price.
- The loan portfolio remains strong with 100% at fair value in first and second lien senior secured loans, positioning the company well in a volatile macroeconomic environment.
- OFS Capital Corp (OFS) has a robust balance sheet with 100% of outstanding debt maturing in 2026 or later, and 70% of the debt is unsecured.
- The company's advisor manages approximately $4 billion across various asset classes, providing experienced oversight through multiple credit cycles.
- Net asset value per share declined to $11.08 from $12.09 at year end, primarily due to unrealized depreciation in several investments, notably in fin Steel Holdings.
- One borrower was placed on nonaccrual status this quarter, representing about 2% of the portfolio at fair value, contributing to a total of 4.8% of investments at fair value on nonaccrual status.
- Interest income decreased partly due to a smaller overall investment portfolio, impacting the company's earnings from its core activities.
- The company experienced a decline in the regulatory asset coverage ratio, influenced by unrealized depreciation in a few positions.
- Despite a stable investment income yield of 13%, there was a quarter-over-quarter decrease of about 1.1%, attributed to nonaccrual loans and a slight decrease in yields on structured finance.
Good day and welcome to the OFS Capital Corporation First Quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded. I would like now to turn the conference over to Steve Altebrando, Vice President of Capital Markets. Please go ahead.
Good morning, everyone, and thank you for joining us. Also on the call today are Bilal Rashid, our Chairman and Chief Executive Officer; and Jeff Cerny, the company's Chief Financial Officer and Treasurer.
Before we begin, please note that the statements made on this call and webcast may constitute forward-looking statements as defined under applicable securities laws. Such statements reflect various assumptions, expectations and opinions by OFS Capital management concerning anticipated results are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could could cause actual results to differ materially from such statements. The uncertainties and other
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