Oxford Lane Capital Corp. announces net asset value and certain financial results for the third fiscal quarter and declaration of distributions on common shares for the months ending April 30 May 31

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GREENWICH, Conn., Jan. 28, 2022 (GLOBE NEWSWIRE) — Oxford Lane Capital Corp. (NasdaqGS: OXLC) (NasdaqGS: OXLCM) (NasdaqGS: OXLCP) (NasdaqGS: OXLCL) (NasdaqGS: OXLCO) (NasdaqGS: OXLCZ) (“Oxford Lane”, the “Company”, “we”, “our” or “ our”) today announced the following financial results and related information:

  • On January 27, 2022, our Board of Directors declared the following distributions on our common shares:
End of the month Registration Date Payment date Amount per share
April 30, 2022 April 15, 2022 April 29, 2022 $0.075
May 31, 2022 May 17, 2022 May 31, 2022 $0.075
June 30, 2022 June 16, 2022 June 30, 2022 $0.075
  • The net asset value (“NAV”) per share as of December 31, 2021 was $6.93, compared to a net asset value per share as of September 30, 2021 of $6.97.
  • Net investment income (“NII”), calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), was approximately $35.3 million, or $0.29 per share, for the quarter ended December 31, 2021.
  • Our core net investment income (“Core NII”) was approximately $53.0 million, or $0.44 per share, for the three months ended December 31, 2021.
    • Base NII represents the NII adjusted for applicable additional cash distributions received, or likely to be received (if applicable, in both cases), on our equity investments in secured loan obligations (“CLOs”). See additional information under “Additional Information Regarding Basic Net Investment Income” below..
    • We emphasize that our taxable income may differ materially from our GAAP NII and/or our Core NII, and that neither GAAP NII nor Core NII should be considered as indicators of our taxable income.
  • Total investment income for the quarter ended December 31, 2021 was approximately $57.3 million, representing an increase of approximately $12.1 million from the quarter ended September 30, 2021.
    • For the three months ended December 31, 2021, we recorded investment income from our portfolio as follows:
      • $55.0 million from our investments in CLO shares and our CLO warehouses, and
      • $2.3 million from our investments in CLO debt and other income.
  • Our total expenses for the quarter ended December 31, 2021 were approximately $22.0 million, compared to total expenses of approximately $18.4 million for the quarter ended September 30, 2021.
  • As of December 31, 2021, the following measures applied (note that none of these measures represents total shareholder return):
    • The weighted average yield on our CLO debt investments at current cost was 13.3%, unchanged from 13.3% as of September 30, 2021.
    • The weighted average effective return on our investments in CLO shares at current cost was 16.3%, unchanged from 16.3% as of September 30, 2021.
    • The weighted average yield of cash distributions from our investments in CLO shares at current cost was 29.7%, compared to 27.7% as of September 30, 2021.
  • For the quarter ended December 31, 2021, we recorded a net increase in net assets from operations of approximately $10.5 million, or $0.09 per share, consisting of:
    • NII of approximately $35.3 million;
    • Net realized gains of approximately $0.6 million; and
    • Net unrealized amortization of approximately $25.4 million.
  • During the quarter ended December 31, 2021, we made additional investments of approximately $310.7 million and received approximately $206.8 million from sales and redemptions of our CLO investments.
  • For the three months ended December 31, 2021, we issued a total of approximately 12.8 million common shares under an “in-the-market” offering. After deducting sales agent commissions and offering fees, this resulted in net proceeds of approximately $98.5 million. As of December 31, 2021, we had approximately 130.9 million common shares outstanding.
  • On January 27, 2022, our Board of Directors declared the required monthly dividends on our 6.75% Series 2024 Term Preferred Shares (the “Series 2024 Term Preferred Shares”) and our Series 2024 Term Preferred Shares. 2027 at 6.25% (the “2027 Series Term Preferred Shares”). , and 6.00% Term Preferred Shares, Series 2029 (the “Term Preferred Shares, Series 2029”) (each, a “Share”) as follows:
Prefer Type of actions Amount of dividend per share declared Check-in dates Payment dates
2024 Series $ 0.14062500 March 17, 2022, April 15, 2022, May 17, 2022 March 31, 2022, April 29, 2022, May 31, 2022
Series 2027 $ 0.13020833 March 17, 2022, April 15, 2022, May 17, 2022 March 31, 2022, April 29, 2022, May 31, 2022
Series 2029 $ 0.12500000 March 17, 2022, April 15, 2022, May 17, 2022 March 31, 2022, April 29, 2022, May 31, 2022

In accordance with their terms, each of the Series 2024 Term Preferred Shares, Series 2027 Term Preferred Shares and Series 2029 Term Preferred Shares will pay a monthly dividend at a fixed rate of 6.75%, 6.25% and 6.00%, respectively, of the $25.00 liquidation preference per share, or $1.6875, $1.5625 and $1.5000 per share per year, respectively. Such fixed annual dividend rate is subject to adjustment in certain circumstances, but shall in no event be less than 6.75%, 6.25% and 6.00% per annum, respectively, for each of the Term Preferred Shares of Series 2024, Term Shares Series 2027 Preferred Shares and Term Preferred Shares Series 2029.

Additional information regarding basic 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 replacement for GAAP NII, but as a complement. Our non-GAAP measures may differ from similar measures of other companies, even though similar terms are used to identify these measures. Core NII represents GAAP NII adjusted for additional applicable cash distributions received, or entitled to be received (if applicable, in both cases), on our investments in CLO shares. Oxford Lane’s management uses this information in its internal analysis of results and believes that this information may be useful in assessing the quality of Oxford Lane’s financial performance, identifying trends in its results and providing meaningful comparisons of a period to another.

Income from investments in securities in the “equity” category of CLO vehicles, for GAAP purposes, is recorded using the effective interest rate method; this is based on actual yield versus expected redemption using estimated cash flows, at current cost, including investments in CLO shares that have not made their inaugural distribution for the relevant period end. The result is an effective return for the investment in which the cost base of the respective investment is adjusted quarterly based on the difference between the actual cash received, or distributions likely to be received, and the effective return calculation . Accordingly, the investment income recognized on the CLO equity securities in the GAAP statement of income differs from the cash distributions actually received by the Company during the period (hereafter referred to as “CLO equity adjustments”). ).

In addition, in order for the Company to continue to qualify as a regulated investment company for tax purposes, we are required, among other things, to distribute annually at least 90% of our investment company’s taxable income. Therefore, Core NII may provide a better indication of our estimated taxable income for a reporting period than GAAP NII; however, we cannot guarantee that this will be the case, as the ultimate tax character of our profits cannot be determined until after the preparation of tax returns at the end of a financial year. We note that this non-GAAP measure may not serve as a useful indicator of taxable profit, particularly during times of market disruption and volatility, and as such our taxable profit may differ materially from our Core NII. .

The following table provides a reconciliation of GAAP NII and Core NII for the three months ended December 31, 2021:

Three months completed
December 31, 2021
Quantity Per share
Quantity
Net investment income under GAAP $ 35 294 171 $ 0.291
CLO equity adjustments 17,707,421 0.146
Basic net investment income $ 53,001,592 $ 0.437

We will host a conference call to discuss our third quarter results today, Friday, January 28, 2022 at 9:00 a.m. ET. Please call 1-844-200-6205, passcode number 681176 to participate. A recording of the conference call will be available for replay for approximately 30 days after the call. The replay number is 1-866-813-9403 and the replay code is 164921.

A presentation containing additional details regarding our quarterly operating results has been posted in the Investor Relations section of our website at www.oxfordlanecapital.com.

About Oxford Lane Capital Corp.

Oxford Lane Capital Corp. is a registered and publicly traded closed-end management investment company that invests primarily in debt and equity tranches of Secured Loan Obligation (“CLO”) vehicles. CLO investments can also include warehouses, which are financing structures intended to pool loans that can be used to form the basis of a CLO vehicle.

Forward-looking statements

This press release contains forward-looking statements subject to the uncertainties inherent in predicting future results and conditions. All 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 as forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in base interest rates and the significant market volatility on our business, our CLO investments, our industry and the global economy. 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 these statements to reflect subsequent events, except as required by law.

Contact: Bruce Rubin203-983-5280

Source: Oxford Lane Capital Corp.


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