LOS ANGELES--(BUSINESS WIRE)--August 05, 2026--
Oaktree Specialty Lending Corporation (NASDAQ: OCSL) ("Oaktree Specialty Lending" or the "Company"), a specialty finance company, today announced its financial results for the third fiscal quarter ended June 30, 2026.
Financial Highlights for the Quarter Ended June 30, 2026
-- Total investment income was $69.4 million ($0.79 per share) for the
third fiscal quarter of 2026 as compared to $70.4 million ($0.80 per
share) for the second fiscal quarter of 2026. Adjusted total investment
income was $69.2 million ($0.79 per share) for the third fiscal quarter
of 2026 as compared with $69.7 million ($0.79 per share) for the second
fiscal quarter of 2026. The decrease was primarily driven by a lower
average portfolio balance and a decrease in non-recurring income. This
was partially offset by restoring one investment that was previously on
non-accrual status to accrual status.
-- GAAP net investment income was $32.5 million ($0.37 per share) for the
third fiscal quarter of 2026 as compared with $34.4 million ($0.39 per
share) for the second fiscal quarter of 2026. The decrease for the
quarter was primarily driven by lower total investment income and higher
income-based ("Part I") incentive fees (net of fees waived), partially
offset by lower interest expense.
-- Adjusted net investment income was $32.2 million ($0.37 per share) for
the third fiscal quarter of 2026 as compared with $33.7 million ($0.38
per share) for the second fiscal quarter of 2026. The decrease for the
quarter was primarily driven by lower total investment income and higher
income-based ("Part I") incentive fees (net of fees waived), partially
offset by lower interest expense.
-- Net asset value ("NAV") per share was $15.70 as of June 30, 2026,
compared with $15.69 as of March 31, 2026.
-- Originated $206.4 million of new investment commitments and received
$262.8 million of proceeds from prepayments, exits, other paydowns and
sales during the quarter ended June 30, 2026. The weighted average yield
on new debt investments was 10.0%.
-- Total debt outstanding was $1,451.0 million as of June 30, 2026. The
total debt to equity ratio was 1.05x, and the net debt to equity ratio
was 1.02x, after adjusting for cash and cash equivalents.
-- Liquidity as of June 30, 2026 was composed of $39.9 million of
unrestricted cash and cash equivalents and $659.0 million of undrawn
capacity under the Company's credit facility (subject to borrowing base
and other limitations). Unfunded investment commitments were $235.4
million, or $208.3 million excluding unfunded commitments to the
Company's joint ventures.
-- Quarterly and supplemental cash distributions were declared of $0.30
per share and $0.03 per share, respectively, payable in cash on September
30, 2026 to stockholders of record on September 15, 2026.
"We are pleased with the progress we made in reducing our non-accrual investments," said Armen Panossian, Chief Executive Officer and Co-Chief Investment Officer of Oaktree Specialty Lending. "Net asset value per share was stable relative to the prior quarter, and we maintained conservative leverage while continuing to selectively redeploy capital into credits that we believe offer attractive risk-adjusted returns."
Distribution Declaration
The Board of Directors declared quarterly and supplemental cash distributions of $0.30 per share and $0.03 per share, respectively, payable in cash on September 30, 2026 to stockholders of record on September 15, 2026.
Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a fiscal taxable year fall below the total amount of distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to the Company's stockholders.
Results of Operations
For the three months ended
---------------------------------------------------
($ in thousands,
except per share June 30, 2026 March 31, 2026 June 30, 2025
data) (unaudited) (unaudited) (unaudited)
--------------- ---------------- ----------------
GAAP operating
results:
Interest
income $ 61,636 $ 65,253 $ 69,390
PIK interest
income 5,209 3,455 5,070
Fee income 976 1,299 286
Dividend
income 1,612 378 525
------ --- --- ------- --- ------ ---
Total
investment
income 69,433 70,385 75,271
Net expenses 36,609 36,019 41,734
------ --- --- ------- --- ------ ---
Net
investment
income
before
taxes 32,824 34,366 33,537
(Provision)
benefit for
taxes on net
investment
income (303) (4) (56)
------ --- ------- --- ------
Net
investment
income 32,521 34,362 33,481
------ --- --- ------- --- ------ ---
Net realized
and
unrealized
gains
(losses),
net of
taxes (1,581) (53,251) 4,871
------ --- ------- --- ------ ---
Net increase
(decrease)
in net
assets
resulting
from
operations $ 30,940 $ (18,889) $ 38,352
====== === === ======= === ====== ===
Total
investment
income per
common
share $ 0.79 $ 0.80 $ 0.85
Net
investment
income per
common
share $ 0.37 $ 0.39 $ 0.38
Net realized
and
unrealized
gains
(losses),
net of taxes
per common
share $ (0.02) $ (0.60) $ 0.06
Earnings
(loss) per
common share
-- basic and
diluted $ 0.35 $ (0.21) $ 0.44
Non-GAAP
Financial
Measures(1) :
Adjusted
total
investment
income $ 69,152 $ 69,744 $ 74,297
Adjusted net
investment
income $ 32,240 $ 33,721 $ 32,507
Adjusted net
realized and
unrealized
gains
(losses),
net of
taxes $ (2,058) $ (52,692) $ 5,730
Adjusted
earnings
(loss) $ 30,182 $ (18,971) $ 38,237
Adjusted
total
investment
income per
share $ 0.79 $ 0.79 $ 0.84
Adjusted net
investment
income per
share $ 0.37 $ 0.38 $ 0.37
Adjusted net
realized and
unrealized
gains
(losses),
net of taxes
per share $ (0.02) $ (0.60) $ 0.07
Adjusted
earnings
(loss) per
share $ 0.34 $ (0.22) $ 0.43
____________________
(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 March 31,
per share data and June 30, 2026 2026 June 30, 2025
ratios) (unaudited) (unaudited) (unaudited)
------------- ------------- ---------------
Select balance sheet
and other data:
Cash and cash
equivalents $ 39,921 $ 51,261 $ 79,799
Investment portfolio
at fair value 2,741,814 2,766,367 2,809,377
Total debt
outstanding (net of
unamortized
financing costs) 1,438,842 1,481,650 1,447,551
Net assets 1,383,055 1,382,064 1,476,469
Net asset value per
share 15.70 15.69 16.76
Total debt to equity 1.05x 1.08x 0.99x
ratio
Net debt to equity 1.02x 1.04x 0.93x
ratio
Adjusted total investment income for the quarter ended June 30, 2026 was $69.2 million and included $61.4 million of interest income from portfolio investments, $5.2 million of PIK interest income, $1.0 million of fee income and $1.6 million of dividend income. The $0.6 million quarterly decrease in adjusted total investment income was primarily driven by a lower average portfolio balance and a decrease in non-recurring income. This was partially offset by restoring one investment that was previously on non-accrual status to accrual status.
Net expenses for the quarter ended June 30, 2026 totaled $36.6 million, increased by $0.6 million from the quarter ended March 31, 2026. The increase for the quarter was primarily driven by higher Part I incentive fees (net of fees waived), partially offset by lower interest expense due to lower average borrowings outstanding during the quarter.
Adjusted net investment income was $32.2 million ($0.37 per share) for the quarter ended June 30, 2026, which was down from $33.7 million ($0.38 per share) for the quarter ended March 31, 2026. The decrease of $1.5 million primarily reflected $0.6 million of lower adjusted total investment income and $0.6 million of higher net expenses.
Adjusted net realized and unrealized losses, net of taxes, were $2.1 million for the quarter ended June 30, 2026, primarily reflecting realized and unrealized losses on certain debt and equity investments.
Portfolio and Investment Activity
As of
--------------------------------------------------
June 30, 2026 March 31, 2026 June 30, 2025
($ in thousands) (unaudited) (unaudited) (unaudited)
---------------- ---------------- --------------
Investments at
fair value $2,741,814 $2,766,367 $2,809,377
Number of
portfolio
companies 163 163 149
Average
portfolio
company debt
size $ 17,585 $ 17,544 $ 19,400
Asset class:
First lien debt 81.5% 83.7% 81.1%
Second lien debt 3.0% 1.8% 2.3%
Unsecured debt 5.9% 5.2% 4.9%
Equity 3.9% 3.7% 5.5%
JV interests 5.6% 5.6% 6.2%
Non-accrual
debt
investments:
Non-accrual
investments at
fair value $ 47,035 $ 69,473 $ 83,637
Non-accrual
investments at
cost 113,573 167,301 181,660
Non-accrual
investments as
a percentage of
debt
investments at
fair value 1.8% 2.6% 3.2%
Non-accrual
investments as
a percentage of
debt
investments at
cost 4.2% 5.9% 6.6%
Number of
investments on
non-accrual 6 10 10
Interest rate
type:
Percentage
floating-rate 91.4% 91.0% 90.9%
Percentage
fixed-rate 8.6% 9.0% 9.1%
Yields:
Weighted average
yield on debt
investments(1) 9.3% 9.3% 10.1%
Cash component
of weighted
average yield
on debt
investments 8.2% 8.4% 9.1%
Weighted average
yield on total
portfolio
investments(2) 9.1% 9.0% 9.6%
Investment
activity:
New investment
commitments $ 206,400 $ 204,100 $ 147,200
New funded
investment
activity(3) $ 235,500 $ 198,600 $ 143,300
Proceeds from
prepayments,
exits, other
paydowns and
sales $ 262,800 $ 334,100 $ 249,400
Net new
investments(4) $ (27,300) $ (135,500) $ (106,100)
Number of new
investment
commitments in
new portfolio
companies 7 10 5
Number of new
investment
commitments in
existing
portfolio
companies 7 5 6
Number of
portfolio
company exits 7 15 8
____________________
(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 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 June 30, 2026, the fair value of the investment portfolio was $2.7 billion and was composed of investments in 163 companies. These included debt investments in 141 companies, equity investments in 39 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"). 20 of the equity investments were in companies in which the Company also had a debt investment.
As of June 30, 2026, 95.0% of the Company's portfolio at fair value consisted of debt investments, including 81.5% of first lien loans, 3.0% of second lien loans and 10.5% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV. This compared to 83.7% of first lien loans, 1.8% of second lien loans and 10.8% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV, as of March 31, 2026.
As of June 30, 2026, there were six investments on non-accrual status, which represented 4.2% and 1.8% of the debt portfolio at cost and fair value, respectively. As of March 31, 2026, there were ten investments on non-accrual status, which represented 5.9% and 2.6% of the debt portfolio at cost and fair value, respectively.
SLF JV I
The Company's investments in SLF JV I totaled $113.2 million at fair value as of June 30, 2026, increased by 0.4% from $112.8 million as of March 31, 2026. The increase was primarily driven by SLF JV I's use of leverage and net unrealized appreciation in the underlying investment portfolio.
As of June 30, 2026, SLF JV I had $429.0 million in assets, including senior secured loans to 130 portfolio companies. This compared to $447.5 million in assets, including senior secured loans to 124 portfolio companies, as of March 31, 2026. SLF JV I generated cash interest income of $1.9 million for the Company during the quarter ended June 30, 2026, down from $3.0 million in the prior quarter. SLF JV I generated dividend income of $1.4 million for the Company during the quarter ended June 30, 2026, compared to no dividend income generated during the quarter ended March 31, 2026. As of June 30, 2026, SLF JV I had $17.5 million of undrawn capacity (subject to borrowing base and other limitations) on its $290 million senior revolving credit facility, and its debt to equity ratio was 2.1x.
Glick JV
The Company's investments in Glick JV totaled $41.3 million at fair value as of June 30, 2026, down 0.5% from $41.5 million as of March 31, 2026. The decrease was primarily driven by Glick JV's use of leverage and net realized losses in the underlying investment portfolio.
As of June 30, 2026, Glick JV had $142.5 million in assets, including senior secured loans to 131 portfolio companies. This compared to $142.2 million in assets, including senior secured loans to 121 portfolio companies, as of March 31, 2026. Glick JV generated cash interest income of $1.0 million for the Company during the quarter ended June 30, 2026 down slightly from $1.2 million in the prior quarter. As of June 30, 2026, Glick JV had $30.0 million of undrawn capacity (subject to borrowing base and other limitations) on its $120 million senior revolving credit facility, and its debt to equity ratio was 1.9x.
Liquidity and Capital Resources
As of June 30, 2026, the Company had total principal value of debt outstanding of $1,451.0 million, including $501.0 million of outstanding borrowings under its revolving credit facility and $950.0 million of unsecured notes payable. The funding mix was composed of 35% secured and 65% unsecured borrowings as of June 30, 2026. The Company was in compliance with all financial covenants under its syndicated credit facility as of June 30, 2026.
As of June 30, 2026, the Company had $39.9 million of unrestricted cash and cash equivalents and $659.0 million of undrawn capacity on its credit facility (subject to borrowing base and other limitations). As of June 30, 2026, unfunded investment commitments were $235.4 million, or $208.3 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 June 30, 2026, the weighted average interest rate on debt outstanding, including the effect of the interest rate swap agreements was 5.9%, unchanged from the prior quarter.
The Company's total debt to equity ratio was 1.05x and 1.08x as of June 30, 2026 and March 31, 2026, respectively. The Company's net debt to equity ratio was 1.02x and 1.04x as of June 30, 2026 and March 31, 2026, 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 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 June 30, 2026, 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 June 30, 2026, 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
-------------------------------------------------------
June 30, 2026 March 31, 2026 June 30, 2025
(unaudited) (unaudited) (unaudited)
--------------- ----------------- -------------------
($ in thousands,
except per share Per Per
data) Amount Share Amount Share Amount Per Share
-------- ----- -------- ------- -------- ---------
GAAP total
investment
income $69,433 $0.79 $70,385 $ 0.80 $75,271 $ 0.85
Interest income
amortization
(accretion)
related to
merger
accounting
adjustments (281) -- (641) (0.01) (974) (0.01)
------ ---- ------ ----- ------ -----
Adjusted total
investment
income $69,152 $0.79 $69,744 $ 0.79 $74,297 $ 0.84
====== ==== ====== ===== ====== =====
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
-------------------------------------------------------
June 30, 2026 March 31, 2026 June 30, 2025
(unaudited) (unaudited) (unaudited)
--------------- ----------------- -------------------
($ in thousands,
except per share Per Per
data) Amount Share Amount Share Amount Per Share
-------- ----- -------- ------- -------- ---------
GAAP net
investment
income $32,521 $0.37 $34,362 $ 0.39 $33,481 $ 0.38
Interest income
amortization
(accretion)
related to
merger
accounting
adjustments (281) -- (641) (0.01) (974) (0.01)
Part II
incentive fee -- -- -- -- -- --
------ ---- ------ ----- ------ -----
Adjusted net
investment
income $32,240 $0.37 $33,721 $ 0.38 $32,507 $ 0.37
====== ==== ====== ===== ====== =====
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
------------------------------------------------------
June 30, 2026 March 31, 2026 June 30, 2025
(unaudited) (unaudited) (unaudited)
----------------- ------------------ ---------------
($ in thousands,
except per share Per Per Per
data) Amount Share Amount Share Amount Share
-------- ------- --------- ------- ------ -------
GAAP net
realized and
unrealized
gains
(losses), net
of taxes $(1,581) $(0.02) $(53,251) $(0.60) $4,871 $0.06
Net realized
and unrealized
gains (losses)
related to
merger
accounting
adjustments (477) (0.01) 559 0.01 859 0.01
------ ----- ------- ----- ----- ----
Adjusted net
realized and
unrealized
gains
(losses), net
of taxes $(2,058) $(0.02) $(52,692) $(0.60) $5,730 $0.07
====== ===== ======= ===== ===== ====
The following table provides a reconciliation of net increase (decrease) in net assets resulting from operations (the most comparable U.S. GAAP measure) to adjusted earnings (loss) for the periods presented:
For the three months ended
----------------------------------------------------------
June 30, 2026 March 31, 2026 June 30, 2025
(unaudited) (unaudited) (unaudited)
----------------- ------------------ -------------------
($ in thousands,
except per share Per Per
data) Amount Share Amount Share Amount Per Share
-------- ------- --------- ------- -------- ---------
Net increase
(decrease) in
net assets
resulting from
operations $30,940 $ 0.35 $(18,889) $(0.21) $38,352 $ 0.44
Interest income
amortization
(accretion)
related to
merger
accounting
adjustments (281) -- (641) (0.01) (974) (0.01)
Net realized
and unrealized
gains (losses)
related to
merger
accounting
adjustments (477) (0.01) 559 0.01 859 0.01
------ ----- ------- ----- ------ -----
Adjusted
earnings
(loss) $30,182 $ 0.34 $(18,971) $(0.22) $38,237 $ 0.43
====== ===== ======= ===== ====== =====
Conference Call Information
Oaktree Specialty Lending will host a conference call to discuss its third fiscal quarter ended June 30, 2026 results at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time on August 5, 2026. The conference call may be accessed by dialing (833) 461-5787 (U.S. callers). All callers will need to provide the meeting ID, 843 537 670, and 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, 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, bonds and preferred and common equity, including equity co-investments. 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)
June 30, March 31,
2026 2026 September 30,
(unaudited) (unaudited) 2025
----------- ----------- -------------
ASSETS
Investments at fair value:
Control investments (cost
June 30, 2026: $343,242;
cost March 31, 2026:
$378,041; cost September
30, 2025: $377,709) $ 199,896 $ 210,855 $ 227,748
Affiliate investments
(cost June 30, 2026:
$43,826; cost March 31,
2026: $78,141; cost
September 30, 2025:
$58,344) 39,872 73,337 54,999
Non-control/Non-affiliate
investments (cost June
30, 2026: $2,609,629;
cost March 31, 2026:
$2,611,720; cost
September 30, 2025:
$2,639,069) 2,502,046 2,482,175 2,565,035
--------- --------- ---------
Total investments at fair
value (cost June 30,
2026: $2,996,697; cost
March 31, 2026:
$3,067,902; cost
September 30, 2025:
$3,075,122) 2,741,814 2,766,367 2,847,782
Cash and cash equivalents 39,921 51,261 79,630
Interest, dividends and
fees receivable 22,965 22,886 31,868
Due from portfolio
companies 237 297 3,186
Receivables from unsettled
transactions 36,627 20,515 4,949
Due from broker 1,750 15,550 15,550
Deferred financing costs 8,023 8,558 9,675
Deferred offering costs 43 43 143
Derivative assets at fair
value 5,815 7,859 8,713
Other assets 997 1,081 1,495
--------- --------- ---------
Total assets $2,858,192 $2,894,417 $3,002,991
========= ========= =========
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable,
accrued expenses and
other liabilities $ 2,629 $ 1,852 $ 1,538
Base management fee and
incentive fee payable 9,419 7,107 12,515
Due to affiliate 1,957 2,113 1,569
Interest payable 10,584 10,346 12,067
Payables from unsettled
transactions 4,943 3,260 15,011
Derivative liabilities
at fair value 6,699 5,733 7,329
Deferred tax liability 64 292 269
Credit facilities
payable 501,000 540,000 545,000
Unsecured notes payable
(net of $4,954, $5,490
and $6,561 of
unamortized financing
costs as of June 30,
2026, March 31, 2026
and September 30, 2025
respectively) 937,842 941,650 941,880
--------- --------- ---------
Total liabilities 1,475,137 1,512,353 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 June
30, 2026, March 31,
2026 and September 30,
2025, respectively 881 881 881
Additional
paid-in-capital 2,350,075 2,350,075 2,350,075
Accumulated
overdistributed
earnings (967,901) (968,892) (885,143)
--------- --------- ---------
Total net assets
(equivalent to $15.70,
$15.69 and $16.64 per
common share as of June
30, 2026, March 31, 2026
and September 30, 2025,
respectively) 1,383,055 1,382,064 1,465,813
--------- --------- ---------
Total liabilities and net
assets $2,858,192 $2,894,417 $3,002,991
========= ========= =========
Oaktree Specialty Lending Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three months Three months Three months Nine months Nine months
ended June 30, ended March 31, ended June 30, ended June ended June 30,
2026 2026 2025 30, 2026 2025
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
--------------- --------------- --------------- ------------- ---------------
Interest income:
Control investments $ 3,271 $ 4,794 $ 5,165 $ 12,963 $ 15,275
Affiliate investments 1,475 848 277 2,863 602
Non-control/Non-affiliate
investments 56,032 58,566 62,441 175,155 198,165
Interest on cash and cash
equivalents 858 1,045 1,507 2,831 4,293
------- ------- ------- -------- --------
Total interest income 61,636 65,253 69,390 193,812 218,335
------- ------- ------- -------- --------
PIK interest income:
Control investments -- -- -- -- 830
Affiliate investments 217 281 28 945 83
Non-control/Non-affiliate
investments 4,992 3,174 5,042 11,567 14,416
------- ------- ------- -------- --------
Total PIK interest income 5,209 3,455 5,070 12,512 15,329
------- ------- ------- -------- --------
Fee income:
Affiliate investments -- -- -- 4 --
Non-control/Non-affiliate
investments 976 1,299 286 5,243 3,707
------- ------- ------- -------- --------
Total fee income 976 1,299 286 5,247 3,707
------- ------- ------- -------- --------
Dividend income:
Control investments 1,400 -- 525 1,925 1,925
Non-control/Non-affiliate
investments 27 23 -- 50 190
Non-control/Non-affiliate
investments - PIK 185 355 -- 1,368 --
------- ------- ------- -------- --------
Total dividend income 1,612 378 525 3,343 2,115
------- ------- ------- -------- --------
Total investment income 69,433 70,385 75,271 214,914 239,486
------- ------- ------- -------- --------
Expenses:
Base management fee 7,046 7,107 7,195 21,697 22,854
Part I incentive fee 2,373 -- 5,767 3,561 20,413
Professional fees 1,627 1,288 1,388 4,329 3,682
Directors fees 160 160 160 480 480
Interest expense 24,139 25,626 31,061 76,424 89,814
Administrator expense 623 663 525 1,856 1,350
General and administrative
expenses 641 1,175 997 2,657 2,860
------- ------- ------- -------- --------
Total expenses 36,609 36,019 47,093 111,004 141,453
Management fees waived -- -- -- -- (933)
Part I incentive fees
waived -- -- (5,359) -- (18,469)
------- ------- ------- -------- --------
Net expenses 36,609 36,019 41,734 111,004 122,051
------- ------- ------- -------- --------
Net investment income before
taxes 32,824 34,366 33,537 103,910 117,435
(Provision) benefit for
taxes on net investment
income (303) (4) (56) (324) (597)
------- ------- ------- -------- --------
Net investment income 32,521 34,362 33,481 103,586 116,838
------- ------- ------- -------- --------
Unrealized appreciation
(depreciation):
Control investments 23,840 (8,265) (2,024) 6,615 (62,940)
Affiliate investments 850 (663) (246) 1,145 (568)
Non-control/Non-affiliate
investments 21,987 (32,736) 18,905 (35,283) (17,268)
Foreign currency forward
contracts 1,533 2,326 1,937 3,977 (2,289)
------- ------- ------- -------- --------
Net unrealized appreciation
(depreciation) 48,210 (39,338) 18,572 (23,546) (83,065)
------- ------- ------- -------- --------
Realized gains (losses):
Control investments (24,337) -- -- (24,337) 13
Affiliate investments 4,849 169 145 5,070 190
Non-control/Non-affiliate
investments (30,544) (17,393) 1,705 (47,861) (16,898)
Foreign currency forward
contracts 493 3,614 (15,282) 5,321 (7,342)
------- ------- ------- -------- --------
Net realized gains (losses) (49,539) (13,610) (13,432) (61,807) (24,037)
------- ------- ------- -------- --------
(Provision) benefit for taxes
on realized and unrealized
gains (losses) (252) (303) (269) (574) (394)
------- ------- ------- -------- --------
Net realized and unrealized
gains (losses), net of taxes (1,581) (53,251) 4,871 (85,927) (107,496)
------- ------- ------- -------- --------
Net increase (decrease) in net
assets resulting from
operations $ 30,940 $ (18,889) $ 38,352 $ 17,659 $ 9,342
======= ======= ======= ======== ========
Net investment income per
common share -- basic and
diluted $ 0.37 $ 0.39 $ 0.38 $ 1.18 $ 1.37
Earnings (loss) per common
share -- basic and diluted $ 0.35 $ (0.21) $ 0.44 $ 0.20 $ 0.11
Weighted average common shares
outstanding -- basic and
diluted 88,086 88,086 88,086 88,086 85,402
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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