Oaktree Specialty Lending posts higher Q1 net investment income

Overview

• Specialty finance firm's fiscal Q1 total investment income decreased due to lower reference rates and OID acceleration

• Q1 net investment income rises to $36.7 mln from $35.8 mln a year ago, mainly due to lower net expenses

• Company declared a quarterly cash distribution of $0.40 per share

Outlook

• Company evaluating strategies to offset lower base rates

• Company did not provide specific financial guidance for future quarters

Result Drivers

• LOWER INTEREST INCOME - Decrease in total investment income was driven by lower reference rates and OID acceleration, partially offset by higher fee income from prepayment and exit fees

• REDUCED EXPENSES - Increase in net investment income was primarily due to lower net expenses from reduced Part I incentive fees, despite higher interest expenses

• NAV DECLINE - Net asset value per share decreased due to unrealized depreciation on certain debt and equity investments

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the closed end funds peer group is "buy."

• Wall Street's median 12-month price target for Oaktree Specialty Lending Corp is $13.50, about 11.2% above its February 3 closing price of $12.14

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nBw5b158Ra

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