GREENWICH, Conn., Nov. 05, 2018 (GLOBE NEWSWIRE) -- Oxford Lane Capital Corp. (OXLC) (OXLCO) (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, 2018 stood at $9.93, compared with a NAV per share on June 30, 2018 of $9.98.
- Net investment income (“NII”), calculated in accordance with generally accepted accounting principles (“GAAP”), was approximately $11.7 million, or $0.35 per share, for the quarter ended September 30, 2018.
- Our core net investment income (“Core NII”) was approximately $15.2 million, or $0.46 per share, for the quarter ended September 30, 2018.
° Core NII represents GAAP 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.
° While, in our experience, cash flow distributions have historically represented useful indicators of our CLO equity investments’ annual taxable income during certain periods, we believe that current and future cash flow distributions may be less accurate indicators of taxable income with respect to our CLO equity investments than they have been in the past. Accordingly, our taxable income may materially differ from GAAP NII and/or Core NII.
- Total investment income for the second fiscal quarter of 2018 amounted to approximately $21.9 million, which represented an increase of $0.6 million from the first fiscal quarter of 2018.
° For the quarter ended September 30, 2018 we recorded investment income from our portfolio as follows:
• $21.1 million from our CLO equity investments, and
• $0.8 million from our CLO debt investments and other income.
- As of September 30, 2018 the following metrics applied (note that none of these values represented a total return to shareholders):
° The weighted average yield of our CLO debt investments at current cost was 11.0%, compared with 11.2% as of June 30, 2018.
° The weighted average GAAP effective yield of our CLO equity investments at current cost was 15.6%, compared with 16.7% as of June 30, 2018.
° The weighted average cash yield of our CLO equity investments at current cost was 20.7%, compared with 22.4% as of June 30, 2018.
- For the quarter ended September 30, 2018 we recorded a net increase in net assets resulting from operations of approximately $8.6 million, or $0.26 per share. This included the following approximations:
° Net investment income of $11.7 million;
° Net realized gain of $1.0 million; and
° Net unrealized depreciation of $4.1 million.
- During the quarter ended September 30, 2018 we made additional CLO investments of approximately $157.6 million, and received $91.0 million from sales and repayments of our CLO investments.
- During the second fiscal quarter of 2018, we issued a total of 4,925,093 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 $52.3 million.
- On October 11, 2018, we entered into a Third Amended and Restated Repurchase Transaction Facility with Nomura Securities International, Inc. to extend the repurchase transaction by three months until July 2, 2019.
- On October 30, 2018 our Board of Directors declared the following distributions on our common stock:
|Month Ending||Record Date||Payment Date||Amount Per Share|
|January 31, 2019||January 24, 2019||January 31, 2019||$0.135|
|February 28, 2019||February 21, 2019||February 28, 2019||$0.135|
|March 31, 2019||March 22, 2019||March 29, 2019||$0.135|
Our Board of Directors also declared the required monthly dividends on our Series 2023 Term Preferred Shares and Series 2024 Term Preferred Shares (each, a “Share”) as follows:
|Preferred Shares Type||Per Share Dividend Amount Declared||2018 Record Dates||2018 Payment Dates|
|Series 2023||$||0.156250||December 24, January 24, February 21||December 31, January 31, February 28|
|Series 2024||$||0.140625||December 24, January 24, February 21||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.
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. 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 from 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 these 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, 2018:
|Three Months Ended|
|September 30, 2018|
|GAAP net investment income||$||11,737,771||$||0.352|
|CLO equity adjustments||3,481,202||0.105|
|Core net investment income||$||15,218,973||$||0.457|
We will host a conference call to discuss our second quarter results today, Monday, November 5, 2018 at 09:00 AM ET. Please call 1-844-792-3730 to participate. A recording of the conference call will be available to replay for approximately 30 days following the call. The replay number is 1-877-344-7529, and the replay passcode is 10125982.
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 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.
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.