LOS ANGELES--(BUSINESS WIRE)--February 04, 2026--
Oaktree Specialty Lending Corporation (NASDAQ: OCSL) ("Oaktree Specialty Lending" or the "Company"), a specialty finance company, today announced its financial results for the first quarter ended December 31, 2025.
Financial Highlights for the Quarter Ended December 31, 2025
-- Total investment income was $75.1 million ($0.85 per share) for the
first fiscal quarter of 2026 as compared to $77.3 million ($0.88 per
share) for the fourth fiscal quarter of 2025. Adjusted total investment
income was $74.5 million ($0.85 per share) for the first fiscal quarter
of 2026 as compared with $76.9 million ($0.87 per share) for the fourth
fiscal quarter of 2025. The decrease was driven by lower interest income
primarily attributable to lower reference rates and lower original issue
discount ("OID") acceleration, partially offset by higher fee income
primarily attributable to higher prepayment and exit fees.
-- GAAP net investment income was $36.7 million ($0.42 per share) for the
first fiscal quarter of 2026 as compared with $35.8 million ($0.41 per
share) for the fourth fiscal quarter of 2025. The increase for the
quarter was primarily driven by lower net expenses due to lower
income-based ("Part I") incentive fees (net of fees waived), offset by
lower total investment income and higher interest expense.
-- Adjusted net investment income was $36.1 million ($0.41 per share) for
the first fiscal quarter of 2026 as compared with $35.4 million ($0.40
per share) for the fourth fiscal quarter of 2025. The increase for the
quarter was primarily driven by lower net expenses due to lower Part I
incentive fees (net of fees waived), offset by lower total investment
income and higher interest expense.
-- Net asset value ("NAV") per share was $16.30 as of December 31, 2025,
down as compared with $16.64 as of September 30, 2025. The decrease from
September 30, 2025 was primarily driven by unrealized depreciation on
certain debt and equity investments.
-- Originated $316.6 million of new investment commitments and received
$178.5 million of proceeds from prepayments, exits, other paydowns and
sales during the quarter ended December 31, 2025. The weighted average
yield on new debt investments was 8.7%.
-- Total debt outstanding was $1,615.0 million as of December 31, 2025.
The total debt to equity ratio was 1.12x, and the net debt to equity
ratio was 1.07x, after adjusting for cash and cash equivalents.
-- Liquidity as of December 31, 2025 was composed of $80.8 million of
unrestricted cash and cash equivalents and $495.0 million of undrawn
capacity under the Company's credit facility (subject to borrowing base
and other limitations). Unfunded investment commitments were $274.5
million, or $247.3 million excluding unfunded commitments to the
Company's joint ventures.
-- A quarterly cash distribution was declared of $0.40 per share payable
in cash on March 31, 2026 to stockholders of record on March 16, 2026.
"We delivered solid results in the first fiscal quarter of 2026 including adjusted net investment income of $36.7 million, or $0.41 per share, and fully covered our dividend," said Armen Panossian, Chief Executive Officer and Chief Investment Officer of Oaktree Specialty Lending. "We also made continued progress in stabilizing our investment portfolio and are optimistic that we will see continued progress in the coming quarters. New deployments for the quarter were strong at $317 million. Looking ahead, we will continue to evaluate levers to help offset lower base rates and support net investment income."
Distribution Declaration
The Board of Directors declared a quarterly distribution of $0.40 per share, payable in cash on March 31, 2026 to stockholders of record on March 16, 2026.
Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a fiscal taxable year fall below the total amount of distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to the Company's stockholders.
Results of Operations
For the three months ended
-------------------------------------------------
($ in thousands, December 31, September 30, December 31,
except per share 2025 2025 2024
data) (unaudited) (unaudited) (unaudited)
------------- ---------------- ----------------
GAAP operating
results:
Interest
income $ 66,923 $ 69,716 $ 78,422
PIK interest
income 3,848 4,094 5,728
Fee income 2,972 2,122 1,679
Dividend
income 1,353 1,383 818
------- --- ------- --- ------- ---
Total
investment
income 75,096 77,315 86,647
Net expenses 38,376 41,249 42,082
------- --- ------- --- ------- ---
Net
investment
income
before
taxes 36,720 36,066 44,565
(Provision)
benefit for
taxes on net
investment
income (17) (264) (263)
------- ------- -------
Net
investment
income 36,703 35,802 44,302
------- --- ------- --- ------- ---
Net realized
and
unrealized
gains
(losses),
net of
taxes (31,095) (11,224) (37,063)
------- ------- -------
Net increase
(decrease)
in net
assets
resulting
from
operations $ 5,608 $ 24,578 $ 7,239
======= === ======= === ======= ===
Total
investment
income per
common
share $ 0.85 $ 0.88 $ 1.05
Net
investment
income per
common
share $ 0.42 $ 0.41 $ 0.54
Net realized
and
unrealized
gains
(losses),
net of taxes
per common
share $ (0.35) $ (0.13) $ (0.45)
Earnings
(loss) per
common share
-- basic and
diluted $ 0.06 $ 0.28 $ 0.09
Non-GAAP
Financial
Measures(1) :
Adjusted
total
investment
income $ 74,481 $ 76,866 $ 87,070
Adjusted net
investment
income $ 36,088 $ 35,353 $ 44,725
Adjusted net
realized and
unrealized
gains
(losses),
net of
taxes $(30,385) $ (10,849) $ (37,124)
Adjusted
earnings
(loss) $ 5,703 $ 24,504 $ 7,601
Adjusted
total
investment
income per
share $ 0.85 $ 0.87 $ 1.06
Adjusted net
investment
income per
share $ 0.41 $ 0.40 $ 0.54
Adjusted net
realized and
unrealized
gains
(losses),
net of taxes
per share $ (0.34) $ (0.12) $ (0.45)
Adjusted
earnings
(loss) per
share $ 0.06 $ 0.28 $ 0.09
______________________
(1) See Non-GAAP Financial Measures below for a description of the non-GAAP
measures and the reconciliations from the most comparable GAAP
financial measures to the Company's non-GAAP measures, including on a
per share basis. The Company's management uses these non-GAAP financial
measures internally to analyze and evaluate financial results and
performance and believes that these non-GAAP financial measures are
useful to investors as an additional tool to evaluate ongoing results
and trends for the Company and to review the Company's performance
without giving effect to non-cash income/gain/loss resulting from the
merger of Oaktree Strategic Income Corporation ("OCSI") with and into
the Company in March 2021 (the "OCSI Merger") and the merger of Oaktree
Strategic Income II, Inc. ("OSI2") with and into the Company in January
2023 (the "OSI2 Merger") and, in the case of adjusted net investment
income, without giving effect to capital gains incentive fees. The
presentation of non-GAAP measures is not intended to be a substitute
for financial results prepared in accordance with GAAP and should not
be considered in isolation.
As of
----------------------------------------------
($ in thousands, except December 31, December 31,
per share data and 2025 September 30, 2024
ratios) (unaudited) 2025 (unaudited)
--------------- ------------- --------------
Select balance sheet
and other data:
Cash and cash
equivalents $ 80,813 $ 79,630 $ 112,913
Investment portfolio
at fair value 2,949,092 2,847,782 2,835,294
Total debt
outstanding (net of
unamortized
financing costs) 1,610,022 1,486,880 1,577,795
Net assets 1,436,187 1,465,813 1,449,815
Net asset value per
share 16.30 16.64 17.63
Total debt to equity 1.12x 1.02x 1.11x
ratio
Net debt to equity 1.07x 0.97x 1.03x
ratio
Adjusted total investment income for the quarter ended December 31, 2025 was $74.5 million and included $66.3 million of interest income from portfolio investments, $3.8 million of PIK interest income, $3.0 million of fee income and $1.4 million of dividend income. The $2.4 million quarterly decrease in adjusted total investment income was primarily attributable to lower reference rates and lower OID acceleration, partially offset by higher fee income primarily attributable to higher prepayment and exit fees.
Net expenses for the quarter ended December 31, 2025 totaled $38.4 million, down $2.9 million from the quarter ended September 30, 2025. The decrease for the quarter was primarily driven by $4.0 million of lower Part I incentive fees (net of fees waived), partially offset by higher interest expense due to higher borrowings outstanding offset by lower reference rates.
Adjusted net investment income was $36.1 million ($0.41 per share) for the quarter ended December 31, 2025, which was up from $35.4 million ($0.40 per share) for the quarter ended September 30, 2025. The increase of $0.7 million primarily reflected $2.9 million of lower net expenses, offset by $2.4 million of lower adjusted total investment income and higher interest expense.
Adjusted net realized and unrealized losses, net of taxes, were $30.4 million for the quarter ended December 31, 2025, primarily reflecting unrealized losses on certain debt and equity investments.
Portfolio and Investment Activity
As of
---------------------------------------------------
December 31, December 31,
2025 September 30, 2024
($ in thousands) (unaudited) 2025 (unaudited) (unaudited)
---------------- ----------------- --------------
Investments at
fair value $2,949,092 $2,847,782 $2,835,294
Number of
portfolio
companies 167 143 136
Average
portfolio
company debt
size $ 18,068 $ 20,500 $ 22,000
Asset class:
First lien debt 84.8% 83.5% 81.8%
Second lien debt 1.6% 2.4% 3.0%
Unsecured debt 3.7% 3.2% 3.9%
Equity 4.4% 5.0% 4.8%
JV interests 5.6% 6.0% 6.5%
Non-accrual
debt
investments:
Non-accrual
investments at
fair value $ 87,215 $ 80,689 $ 105,326
Non-accrual
investments at
cost 190,458 181,361 138,703
Non-accrual
investments as
a percentage of
debt
investments at
fair value 3.1% 3.0% 3.9%
Non-accrual
investments as
a percentage of
debt
investments at
cost 6.5% 6.5% 5.1%
Number of
investments on
non-accrual 11 10 9
Interest rate
type:
Percentage
floating-rate 91.3% 90.7% 87.6%
Percentage
fixed-rate 8.7% 9.3% 12.4%
Yields:
Weighted average
yield on debt
investments(1) 9.3% 9.8% 10.7%
Cash component
of weighted
average yield
on debt
investments 8.5% 8.9% 9.5%
Weighted average
yield on total
portfolio
investments(2) 9.1% 9.4% 10.2%
Investment
activity:
New investment
commitments $ 316,600 $ 208,200 $ 198,100
New funded
investment
activity(3) $ 313,800 $ 220,400 $ 201,300
Proceeds from
prepayments,
exits, other
paydowns and
sales $ 178,500 $ 177,000 $ 352,400
Net new
investments(4) $ 135,300 $ 43,400 $ (151,100)
Number of new
investment
commitments in
new portfolio
companies 28 9 5
Number of new
investment
commitments in
existing
portfolio
companies 13 10 8
Number of
portfolio
company exits 4 15 13
______________________
(1) Annual stated yield earned plus net annual amortization of OID or
premium earned on accruing investments, including the Company's share
of the return on debt investments in SLF JV I and Glick JV, and
excluding any amortization or accretion of interest income resulting
solely from the cost basis established by ASC 805 (see Non-GAAP
Financial Measures below) for the assets acquired in connection with
the OCSI Merger and OSI2 Merger.
(2) Annual stated yield earned plus net annual amortization of OID or
premium earned on accruing investments and dividend income, including
the Company's share of the return on debt investments in SLF JV I and
Glick JV, and excluding any amortization or accretion of interest
income resulting solely from the cost basis established by ASC 805 for
the assets acquired in connection with the OCSI Merger and OSI2
Merger.
(3) New funded investment activity includes drawdowns on existing revolver
and delayed draw term loan commitments.
(4) Net new investments consists of new funded investment activity less
proceeds from prepayments, exits, other paydowns and sales.
As of December 31, 2025, the fair value of the investment portfolio was $2.9 billion and was composed of investments in 167 companies. These included debt investments in 147 companies, equity investments in 35 companies, and the Company's joint venture investments in Senior Loan Fund JV I, LLC ("SLF JV I") and OCSI Glick JV LLC ("Glick JV"). 17 of the equity investments were in companies in which the Company also had a debt investment.
As of December 31, 2025, 95.4% of the Company's portfolio at fair value consisted of debt investments, including 84.8% of first lien loans, 1.6% of second lien loans and 9.0% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV. This compared to 83.5% of first lien loans, 2.4% of second lien loans and 8.7% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV, as of September 30, 2025.
As of December 31, 2025, there were eleven investments on non-accrual status, which represented 6.5% and 3.1% of the debt portfolio at cost and fair value, respectively. As of September 30, 2025, there were ten investments on non-accrual status, which represented 6.5% and 3.0% of the debt portfolio at cost and fair value, respectively.
SLF JV I
The Company's investments in SLF JV I totaled $120.9 million at fair value as of December 31, 2025, down 3.0% from $124.6 million as of September 30, 2025. The decrease was primarily driven by SLF JV I's use of leverage and unrealized losses in the underlying investment portfolio.
As of December 31, 2025, SLF JV I had $410.0 million in assets, including senior secured loans to 74 portfolio companies. This compared to $447.4 million in assets, including senior secured loans to 72 portfolio companies, as of September 30, 2025. SLF JV I generated cash interest income of $3.2 million for the Company during the quarter ended December 31, 2025, down slightly from $3.3 million in the prior quarter. In addition, SLF JV I generated dividend income of $0.5 million for the Company during the quarter ended December 31, 2025, flat from prior quarter. As of December 31, 2025, SLF JV I had $18.5 million of undrawn capacity (subject to borrowing base and other limitations) on its $270 million senior revolving credit facility, and its debt to equity ratio was 1.8x.
Glick JV
The Company's investments in Glick JV totaled $43.9 million at fair value as of December 31, 2025, down 4.6% from $46.1 million as of September 30, 2025. The decrease was primarily driven by Glick JV's use of leverage and realized losses in the underlying investment portfolio.
As of December 31, 2025, Glick JV had $191.6 million in assets, including senior secured loans to 115 portfolio companies. This compared to $149.1 million in assets, including senior secured loans to 57 portfolio companies, as of September 30, 2025. Glick JV generated cash interest income of $1.3 million for the Company during the quarter ended December 31, 2025, flat from the prior quarter. As of December 31, 2025, Glick JV had $22.5 million of undrawn capacity (subject to borrowing base and other limitations) on its $100 million senior revolving credit facility, and its debt to equity ratio was 1.5x.
Liquidity and Capital Resources
As of December 31, 2025, the Company had total principal value of debt outstanding of $1,615.0 million, including $665.0 million of outstanding borrowings under its revolving credit facility and $950.0 million of unsecured notes payable. The funding mix was composed of 41% secured and 59% unsecured borrowings as of December 31, 2025. The Company was in compliance with all financial covenants under its syndicated credit facility as of December 31, 2025.
As of December 31, 2025, the Company had $80.8 million of unrestricted cash and cash equivalents and $495.0 million of undrawn capacity on its credit facility (subject to borrowing base and other limitations). As of December 31, 2025, unfunded investment commitments were $274.5 million, or $247.3 million excluding unfunded commitments to the Company's joint ventures. The Company has analyzed cash and cash equivalents, availability under its credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believes its liquidity and capital resources are sufficient to invest in market opportunities as they arise.
As of December 31, 2025, the weighted average interest rate on debt outstanding, including the effect of the interest rate swap agreements was 6.1%, down from 6.5% as of September 30, 2025, primarily driven by lower reference rates.
The Company's total debt to equity ratio was 1.12x and 1.02x as of December 31, 2025 and September 30, 2025, respectively. The Company's net debt to equity ratio was 1.07x and 0.97x as of December 31, 2025 and September 30, 2025, respectively.
Non-GAAP Financial Measures
On a supplemental basis, the Company is disclosing certain adjusted financial measures, each of which is calculated and presented on a basis of methodology other than in accordance with GAAP ("non-GAAP"). The Company's management uses these non-GAAP financial measures internally to analyze and evaluate financial results and performance and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing results and trends for the Company and to review the Company's performance without giving effect to non-cash income/gain/loss resulting from the OCSI Merger and the OSI2 Merger and in the case of adjusted net investment income, without giving effect to capital gains incentive fees. The presentation of the below non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.
-- "Adjusted Total Investment Income" and "Adjusted Total Investment
Income Per Share" -- represents total investment income excluding any
amortization or accretion of interest income resulting solely from the
cost basis established by ASC 805 (see below) for the assets acquired in
connection with the OCSI Merger and the OSI2 Merger.
-- "Adjusted Net Investment Income" and "Adjusted Net Investment Income
Per Share" -- represents net investment income, excluding (i) any
amortization or accretion of interest income resulting solely from the
cost basis established by ASC 805 (see below) for the assets acquired in
connection with the OCSI Merger and the OSI2 Merger and (ii) capital
gains incentive fees ("Part II incentive fees").
-- "Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes" and
"Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per
Share" -- represents net realized and unrealized gains (losses) net of
taxes excluding any net realized and unrealized gains (losses) resulting
solely from the cost basis established by ASC 805 (see below) for the
assets acquired in connection with the OCSI Merger and the OSI2 Merger.
-- "Adjusted Earnings (Loss)" and "Adjusted Earnings (Loss) Per Share" --
represents the sum of (i) Adjusted Net Investment Income and (ii)
Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes and
includes the impact of Part II incentive fees1, if any.
The OCSI Merger and the OSI2 Merger (the "Mergers") were accounted for as asset acquisitions in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations--Related Issues ("ASC 805"). The consideration paid to each of the stockholders of OCSI and OSI2 were allocated to the individual assets acquired and liabilities assumed based on the relative fair values of the net identifiable assets acquired other than "non-qualifying" assets, which established a new cost basis for the acquired investments under ASC 805 that, in aggregate, was different than the historical cost basis of the acquired investments prior to the OCSI Merger or the OSI2 Merger, as applicable. Additionally, immediately following the completion of the Mergers, the acquired investments were marked to their respective fair values under ASC 820, Fair Value Measurements, which resulted in unrealized appreciation/depreciation. The new cost basis established by ASC 805 on debt investments acquired will accrete/amortize over the life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized appreciation/depreciation on such investment acquired through its ultimate disposition. The new cost basis established by ASC 805 on equity investments acquired will not accrete/amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, the Company will recognize a realized gain/loss with a corresponding reversal of the unrealized appreciation/depreciation on disposition of such equity investments acquired.
The Company's management uses the non-GAAP financial measures described above internally to analyze and evaluate financial results and performance and to compare its financial results with those of other business development companies that have not adjusted the cost basis of certain investments pursuant to ASC 805. The Company's management believes "Adjusted Total Investment Income", "Adjusted Total Investment Income Per Share", "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share" are useful to investors as an additional tool to evaluate ongoing results and trends for the Company without giving effect to the income resulting from the new cost basis of the investments acquired in the Mergers because these amounts do not impact the fees payable to Oaktree Fund Advisors, LLC (the "Adviser") under its investment advisory agreement (as amended and restated from time to time, the "A&R Advisory Agreement"), and specifically as its relates to "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share", without giving effect to Part II incentive fees. In addition, the Company's management believes that "Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes", "Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share", "Adjusted Earnings (Loss)" and "Adjusted Earnings (Loss) Per Share" are useful to investors as they exclude the non-cash income and gain/loss resulting from the Mergers and are used by management to evaluate the economic earnings of its investment portfolio. Moreover, these metrics more closely align the Company's key financial measures with the calculation of incentive fees payable to the Adviser under with the A&R Advisory Agreement (i.e., excluding amounts resulting solely from the lower cost basis of the acquired investments established by ASC 805 that would have been to the benefit of the Adviser absent such exclusion).
______________________
(1) Adjusted earnings (loss) includes accrued Part II incentive fees. As of
and for the three months ended December 31, 2025, there was no accrued
Part II incentive fee liability. Part II incentive fees are
contractually calculated and paid at the end of the fiscal year in
accordance with the A&R Advisory Agreement, which differs from Part II
incentive fees accrued under GAAP. For the three months ended December
31, 2025, no Part II incentive fees were payable under the A&R Advisory
Agreement.
The following table provides a reconciliation of total investment income (the most comparable U.S. GAAP measure) to adjusted total investment income for the periods presented:
For the three months ended
---------------------------------------------------------------
December 31,
December 31, 2025 September 30, 2025 2024
(unaudited) (unaudited) (unaudited)
-------------------- ----------------------- ----------------
($ in thousands,
except per share Per Per
data) Amount Share Amount Per Share Amount Share
----------- ------- ----------- ---------- ------- -------
GAAP total
investment
income $75,096 $ 0.85 $77,315 $ 0.88 $86,647 $ 1.05
Interest income
amortization
(accretion)
related to
merger
accounting
adjustments (615) (0.01) (449) (0.01) 423 0.01
------ ----- ------ ----- ------ ------
Adjusted total
investment
income $74,481 $ 0.85 $76,866 $ 0.87 $87,070 $ 1.06
====== ===== ====== ===== ====== ======
The following table provides a reconciliation of net investment income (the most comparable U.S. GAAP measure) to adjusted net investment income for the periods presented:
For the three months ended
---------------------------------------------------------------
December 31,
December 31, 2025 September 30, 2025 2024
(unaudited) (unaudited) (unaudited)
-------------------- ----------------------- ----------------
($ in thousands,
except per share Per Per
data) Amount Share Amount Per Share Amount Share
----------- ------- ----------- ---------- ------- -------
GAAP net
investment
income $36,703 $ 0.42 $35,802 $ 0.41 $44,302 $ 0.54
Interest income
amortization
(accretion)
related to
merger
accounting
adjustments (615) (0.01) (449) (0.01) 423 0.01
Part II
incentive fee -- -- -- -- -- --
------ ----- ------ ----- ------ ------
Adjusted net
investment
income $36,088 $ 0.41 $35,353 $ 0.40 $44,725 $ 0.52
====== ===== ====== ===== ====== ======
The following table provides a reconciliation of net realized and unrealized gains (losses), net of taxes (the most comparable U.S. GAAP measure) to adjusted net realized and unrealized gains (losses), net of taxes for the periods presented:
For the three months ended
---------------------------------------------------------------------
December 31, 2025 September 30, 2025 December 31, 2024
(unaudited) (unaudited) (unaudited)
--------------------- --------------------- -----------------------
($ in thousands,
except per share Per Per
data) Amount Share Amount Share Amount Per Share
------------ ------- ------------ ------- ------------ ---------
GAAP net
realized and
unrealized
gains
(losses), net
of taxes $(31,095) $(0.35) $(11,224) $(0.13) $(37,063) $(0.45)
Net realized
and unrealized
gains (losses)
related to
merger
accounting
adjustments 710 0.01 375 (0.01) (61) --
------- ----- ------- ----- ------- -----
Adjusted net
realized and
unrealized
gains
(losses), net
of taxes $(30,385) $(0.34) $(10,849) $(0.12) $(37,124) $(0.45)
======= ===== ======= ===== ======= =====
The following table provides a reconciliation of net increase (decrease) in net assets resulting from operations (the most comparable U.S. GAAP measure) to adjusted earnings (loss) for the periods presented:
For the three months ended
--------------------------------------------------------------------
December 31, 2025 September 30, 2025 December 31, 2024
(unaudited) (unaudited) (unaudited)
---------------------- ----------------------- -------------------
($ in thousands,
except per share Per
data) Amount Per Share Amount Per Share Amount Share
---------- ---------- ----------- ---------- ---------- -------
Net increase
(decrease) in
net assets
resulting from
operations $5,608 $ 0.06 $24,578 $ 0.28 $7,239 $ 0.09
Interest income
amortization
(accretion)
related to
merger
accounting
adjustments (615) (0.01) (449) (0.01) 423 0.01
Net realized
and unrealized
gains (losses)
related to
merger
accounting
adjustments 710 0.01 375 -- (61) --
----- ----- ------ ----- ----- ------
Adjusted
earnings
(loss) $5,703 $ 0.06 $24,504 $ 0.28 $7,601 $ 0.09
===== ===== ====== ===== ===== ======
Conference Call Information
Oaktree Specialty Lending will host a conference call to discuss its first fiscal quarter ended December 31, 2025 results at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time on February 4, 2026. The conference call may be accessed by dialing (800) 715-9871 (U.S. callers) or +1 (646) 307-1963 (non-U.S. callers). All callers will need to reference "Oaktree Specialty Lending" once connected with the operator. Alternatively, a live webcast of the conference call can be accessed through the Investors section of Oaktree Specialty Lending's website, www.oaktreespecialtylending.com. During the conference call, the Company intends to refer to an investor presentation that will be available on the Investors section of its website.
For those individuals unable to listen to the live broadcast of the conference call, a replay will be available on Oaktree Specialty Lending's website, or by dialing (800) 770-2030 (U.S. callers) or +1 (647) 362-9199 (non-U.S. callers), access code 5019258, beginning approximately one hour after the broadcast.
About Oaktree Specialty Lending Corporation
Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a specialty finance company dedicated to providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company's investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions including first and second lien loans, unsecured and mezzanine loans, and preferred equity. The Company is regulated as a business development company under the Investment Company Act of 1940, as amended, and is externally managed by Oaktree Fund Advisors, LLC, an affiliate of Oaktree Capital Management, L.P. For additional information, please visit Oaktree Specialty Lending's website at www.oaktreespecialtylending.com.
Forward-Looking Statements
Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition. The forward-looking statements may include statements as to: future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company expects to make. In addition, words such as "anticipate, " "believe," "expect," "seek," "plan," "should," "estimate," "project" and "intend" indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) changes or potential disruptions in the Company's operations, the economy, financial markets or political environment, including those caused by tariffs and trade disputes with other countries, inflation and an elevated interest rate environment; (ii) risks associated with possible disruption in the operations of the Company, the operations of its portfolio companies or the economy generally due to terrorism, war or other geopolitical conflict, natural disasters, pandemics or cybersecurity incidents; (iii) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in the Company's operating areas, particularly with respect to business development companies or regulated investment companies; and (iv) other considerations that may be disclosed from time to time in the Company's publicly disseminated documents and filings. The Company has based the forward-looking statements included in this press release on information available to it on the date of this press release, and the Company assumes no obligation to update any such forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that it may make directly to you or through reports that the Company in the future may file with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Oaktree Specialty Lending Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except per share amounts)
December 31, 2025
(unaudited) September 30, 2025
---------------------- ---------------------
ASSETS
Investments at fair value:
Control investments (cost
December 31, 2025:
$376,790; cost September
30, 2025: $377,709) $ 217,869 $ 227,748
Affiliate investments (cost
December 31, 2025:
$82,049; cost September
30, 2025: $58,344) 77,908 54,999
Non-control/Non-affiliate
investments (cost December
31, 2025: $2,750,130; cost
September 30, 2025:
$2,639,069) 2,653,315 2,565,035
--- ------------- --------------
Total investments at fair
value (cost September 30,
2025: $3,208,969; cost
December 31, 2025:
3,075,122) 2,949,092 2,847,782
Cash and cash equivalents 80,813 79,630
Interest, dividends and
fees receivable 23,850 31,868
Due from portfolio
companies 297 3,186
Receivables from unsettled
transactions 9,830 4,949
Due from broker 15,550 15,550
Deferred financing costs 9,117 9,675
Deferred offering costs 176 143
Derivative assets at fair
value 8,173 8,713
Other assets 1,353 1,495
--- ------------- --------------
Total assets $ 3,098,251 $ 3,002,991
=== ============= ==============
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable,
accrued expenses and
other liabilities $ 2,214 $ 1,538
Base management fee and
incentive fee payable 8,732 12,515
Due to affiliate 1,658 1,569
Interest payable 11,708 12,067
Payables from unsettled
transactions 23,178 15,011
Derivative liabilities
at fair value 4,264 7,329
Deferred tax liability 288 269
Credit facilities
payable 665,000 545,000
Unsecured notes payable
(net of $6,025 and
$6,561 of unamortized
financing costs as of
December 31, 2025 and
September 30, 2025,
respectively) 945,022 941,880
--- ------------- --------------
Total liabilities 1,662,064 1,537,178
--- ------------- --------------
Commitments and
contingencies
Net assets:
Common stock, $0.01 par
value per share,
250,000 shares
authorized; 88,086
shares issued and
outstanding as of
December 31, 2025 and
September 30, 2025 881 881
Additional
paid-in-capital 2,350,075 2,350,075
Accumulated
overdistributed
earnings (914,769) (885,143)
--- ------------- --------------
Total net assets
(equivalent to $16.30 and
$16.64 per common share as
of December 31, 2025 and
September 30, 2025,
respectively) 1,436,187 1,465,813
--- ------------- --------------
Total liabilities and net
assets $ 3,098,251 $ 3,002,991
=== ============= ==============
Oaktree Specialty Lending Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months Three months Three months
ended December ended September ended December
31, 2025 30, 2025 31, 2024
(unaudited) (unaudited) (unaudited)
--------------- --------------- ---------------
Interest income:
Control investments $ 4,898 $ 5,009 $ 5,226
Affiliate investments 540 618 166
Non-control/Non-affiliate
investments 60,557 63,222 71,809
Interest on cash and cash
equivalents 928 867 1,221
------- ----- ------- ----- ------- -----
Total interest income 66,923 69,716 78,422
------- ----- ------- ----- ------- -----
PIK interest income:
Control investments -- -- 830
Affiliate investments 447 28 28
Non-control/Non-affiliate
investments 3,401 4,066 4,870
------- ----- ------- ----- ------- -----
Total PIK interest income 3,848 4,094 5,728
------- ----- ------- ----- ------- -----
Fee income:
Affiliate investments 4 -- --
Non-control/Non-affiliate
investments 2,968 2,122 1,679
------- ----- ------- ----- ------- -----
Total fee income 2,972 2,122 1,679
------- ----- ------- ----- ------- -----
Dividend income:
Control investments 525 525 700
Non-control/Non-affiliate
investments -- 30 118
Non-control/Non-affiliate
investments - PIK 828 828 --
------- ----- ------- ----- ------- -----
Total dividend income 1,353 1,383 818
------- ----- ------- ----- ------- -----
Total investment income 75,096 77,315 86,647
------- ----- ------- ----- ------- -----
Expenses:
Base management fee 7,544 7,309 8,144
Part I incentive fee 1,188 7,103 7,913
Professional fees 1,414 1,244 1,067
Directors fees 160 160 160
Interest expense 26,659 26,031 30,562
Administrator expense 570 600 437
General and administrative
expenses 841 699 926
------- ----- ------- ----- ------- -----
Total expenses 38,376 43,146 49,209
Management fees waived -- -- (750)
Part I incentive fees
waived -- (1,897) (6,377)
------- ----- ------- ---- ------- ----
Net expenses 38,376 41,249 42,082
------- ----- ------- ----- ------- -----
Net investment income before
taxes 36,720 36,066 44,565
(Provision) benefit for
taxes on net investment
income (17) (264) (263)
------- ---- ------- ---- ------- ----
Net investment income 36,703 35,802 44,302
------- ----- ------- ----- ------- -----
Unrealized appreciation
(depreciation):
Control investments (8,960) (3,524) (23,230)
Affiliate investments 958 (279) 320
Non-control/Non-affiliate
investments (24,534) (21,044) (7,198)
Foreign currency forward
contracts 118 6,683 10,494
------- ----- ------- ----- ------- -----
Net unrealized appreciation
(depreciation) (32,418) (18,164) (19,614)
------- ---- ------- ---- ------- ----
Realized gains (losses):
Control investments -- (1) --
Affiliate investments 52 1 (288)
Non-control/Non-affiliate
investments 76 10,655 (17,056)
Foreign currency forward
contracts 1,214 (3,715) 34
------- ----- ------- ---- ------- -----
Net realized gains (losses) 1,342 6,940 (17,310)
------- ----- ------- ----- ------- ----
(Provision) benefit for taxes
on realized and unrealized
gains (losses) (19) -- (139)
------- ---- ------- ----- ------- ----
Net realized and unrealized
gains (losses), net of taxes (31,095) (11,224) (37,063)
------- ---- ------- ---- ------- ----
Net increase (decrease) in net
assets resulting from
operations $ 5,608 $ 24,578 $ 7,239
======= ===== ======= ===== ======= =====
Net investment income per
common share -- basic and diluted $ 0.42 $ 0.41 $ 0.54 Earnings (loss) per common share -- basic and diluted $ 0.06 $ 0.28 $ 0.09 Weighted average common shares outstanding -- basic and diluted 88,086 88,086 82,245
View source version on businesswire.com: https://www.businesswire.com/news/home/20260204598043/en/
CONTACT: Investor Relations:
Oaktree Specialty Lending Corporation
Alison Mermey
(213) 830-6946
ocsl-ir@oaktreecapital.com
Media Relations:
Financial Profiles, Inc.
Moira Conlon
(310) 478-2700
mediainquiries@oaktreecapital.com
(END) Dow Jones Newswires
February 04, 2026 06:00 ET (11:00 GMT)