GREENWICH, Conn., Feb. 11, 2019 (GLOBE NEWSWIRE) — Oxford Lane Capital Corp. (NasdaqGS: OXLC) (NasdaqGS: OXLCO) (NasdaqGS: 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 December 31, 2018 stood at $7.56, compared with a NAV per share on September 30, 2018 of $9.93.
- Net investment income (“NII”), calculated in accordance with generally accepted accounting principles (“GAAP”), was approximately $12.3 million, or $0.33 per share, for the quarter ended December 31, 2018.
- Our core net investment income (“Core NII”) was approximately $17.7 million, or $0.47 per share, for the quarter ended December 31, 2018.
- Core NII represents 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 third fiscal quarter amounted to approximately $22.8 million, which represented an increase of $0.9 million from the second fiscal quarter.
- For the quarter ended December 31, 2018 we recorded investment income from our portfolio as follows:
- $22.1 million from our CLO equity investments, and
- $0.7 million from our CLO debt investments and other income.
- For the quarter ended December 31, 2018 we recorded investment income from our portfolio as follows:
- As of December 31, 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 11.2%, compared with 11.0% as of September 30, 2018.
- The weighted average GAAP effective yield of our CLO equity investments at current cost was 15.8%, compared with 15.6% as of September 30, 2018.
- The weighted average cash yield of our CLO equity investments at current cost was 19.8%, compared with 20.7% as of September 30, 2018.
- The weighted average yield of our CLO debt investments at current cost was 11.2%, compared with 11.0% as of September 30, 2018.
- For the quarter ended December 31, 2018 we recorded a net decrease in net assets resulting from operations of approximately $75.8 million, or $2.03 per share, including:
- Net investment income of $12.3 million;
- Net realized gain of $0.4 million; and
- Net unrealized depreciation of $88.5 million.
- Net investment income of $12.3 million;
- During the quarter ended December 31, 2018 we made additional CLO investments of approximately $74.1 million, and received $72.0 million from sales and repayments of our CLO investments.
- For the third fiscal quarter, we issued a total of 1,777,636 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 $18.2 million.
- On February 7, 2019 our Board of Directors declared the following distributions on our common stock:
| Month Ending | Record Date | Payment Date | Amount Per Share | ||
| April 30, 2019 | April 23, 2019 | April 30, 2019 | $0.135 | ||
| May 31, 2019 | May 24, 2019 | May 31, 2019 | $0.135 | ||
| June 30, 2019 | June 21, 2019 | June 28, 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 | March 22, April 23, May 24 | March 29, April 30, May 31 | |
| Series 2024 | $0.140625 | March 22, April 23, May 24 | March 29, April 30, May 31 | |
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 December 31, 2018:
| Three Months Ended | |||||||
| December 31, 2018 | |||||||
|
Amount |
Per Share | ||||||
| Amount | |||||||
| GAAP Net investment income | $ | 12,343,472 | $ | 0.330 | |||
| CLO equity adjustments | 5,362,876 | 0.144 | |||||
| Core Net investment income | $ | 17,706,348 | $ | 0.474 | |||
We will host a conference call to discuss our third fiscal quarter results today, Monday, February 11, 2019 at 9:00 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 10128672.
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 collateralized loan obligation (“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.
Forward-Looking Statements
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.
Contact:
Bruce Rubin
203-983-5280