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Edited Transcript of OXLC earnings conference call or presentation 5-Nov-18 2:00pm GMT

Q2 2019 Oxford Lane Capital Corp Earnings Call

Nov 6, 2018 (Thomson StreetEvents) -- Edited Transcript of Oxford Lane Capital Corp earnings conference call or presentation Monday, November 5, 2018 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Bruce L. Rubin

Oxford Lane Capital Corp. - Corporate Secretary, Treasurer, Controller & CFO

* Jonathan H. Cohen

Oxford Lane Capital Corp. - CEO & Director

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Presentation

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Operator [1]

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Good morning, and welcome to the Oxford Lane Capital Corp. Second Fiscal Quarter Earnings Release and Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Jonathan Cohen, Chief Executive Officer. Please go ahead.

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Jonathan H. Cohen, Oxford Lane Capital Corp. - CEO & Director [2]

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Thanks very much. Good morning, everyone, and welcome to the Oxford Lane Capital Corp.'s Second Fiscal Quarter 2019 Earnings Conference Call. I'm joined today by Saul Rosenthal, our President; and Bruce Rubin, our Chief Financial Officer. Bruce, could you please open the call with a disclosure regarding forward-looking statements?

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Bruce L. Rubin, Oxford Lane Capital Corp. - Corporate Secretary, Treasurer, Controller & CFO [3]

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Sure, Jonathan. Today's conference call is being recorded. An audio replay of the call will be available for 30 days. Replay information is included in our press release that was issued earlier this morning. Please note that this call is the property of Oxford Lane Capital Corp. Any unauthorized rebroadcast of this call, in any form, is strictly prohibited. At this point, please direct your attention to the customary disclosures in this morning's press release regarding forward-looking information.

Today's conference call includes forward-looking statements and projections that refer to the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website at www.oxfordlanecapital.com.

With that, I'll turn the presentation back to Jonathan.

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Jonathan H. Cohen, Oxford Lane Capital Corp. - CEO & Director [4]

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Thanks very much, Bruce. On September 30, 2018, our net asset value per share stood at $9.93 compared to the net asset value of $9.98 as of June 30. Our total return generated during the quarter ended September 30 was 3.6%. That return reflected the change in net asset value per share for the period as well as the impact of a $0.405 cash distribution.

For the quarter ended September 30, we reported GAAP total investment income of approximately $21.9 million, representing an increase of $600,000 from the prior quarter. The second quarter's GAAP investment income from our portfolio was approximately $21.1 million from our CLO equity investments and $800,000 from our CLO debt investments and from other income. Oxford Lane also recorded GAAP net investment income of approximately $11.7 million or $0.35 per share for the quarter ended September 30, an increase from $11.5 million or $0.39 per share for the prior quarter.

Our core net investment income was approximately $15.2 million or $0.46 per share for the quarter ended September 30 compared to $14.6 million or $0.50 per share for the quarter ended June 30. During the quarter ended September 30, we issued a total of approximately 4.9 million shares of our common stock pursuant to an aftermarket offering resulting in net proceeds of $52.3 million.

On October 11, 2018, we entered into a Third Amended and Restated Repurchase Transaction Facility with Nomura Securities International to extend the repo by 3 months until July 2, 2019.

For the quarter ended September 30, we recorded a net unrealized gain of approximately $1 million or $0.03 per share and a net unrealized depreciation of $4.1 million or $0.12 per share.

We had a net increase in net assets resulting from operations of approximately $8.6 million or $0.26 per share for the second fiscal quarter.

As of September 30, the following metrics applied. We note that none of these items represented a total return to shareholders. The weighted average yield of our CLO debt investments at current cost was 11.0% down from 11.2% as of June 30. The weighted average GAAP effective yield of our CLO equity investments at current cost was 15.6%, down from 16.7% as of June 30. The weighted average cash yield of our CLO equity investments at current cost was 20.7%, down from 22.4% as of June 30.

We note that the cash yields calculated on our CLO equity investments are based on the cash distributions we received or we were entitled to receive at each respective period end. During the quarter ended September 30, we made additional CLO investments of approximately $157.6 million, and we received $91 million from sales and repayments of our CLO investments. We note that additional information about Oxford Lane second fiscal quarter performance has been uploaded to our website at www.oxfordlanecapital.com.

And with that, we can open the call for any questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Mickey Schleien of Ladenburg.

(Operator Instructions) Okay, and we have Mr. Schleien rejoin.

(Operator Instructions) Mr. Schleien, is your line open? Please go ahead.

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Jonathan H. Cohen, Oxford Lane Capital Corp. - CEO & Director [2]

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All right, operator, we'll -- if there are no further questions, we'll conclude the call.

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Operator [3]

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Go ahead, sir. Thank you very much.

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Jonathan H. Cohen, Oxford Lane Capital Corp. - CEO & Director [4]

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And I'd like to thank everyone for joining. We look forward to speaking to you again soon. Operator, thanks very much. Thanks, everyone.

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Operator [5]

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Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.