OFS Capital (OFS) 2026年第三季度业绩电话会议：5230万美元SBIC出售与净值下滑

核心要点

• OFS Capital Corporation公布2026年第三季度净投资收益为71.9万美元，即每股0.05美元，低于第二季度的每股0.08美元，且低于每股0.17美元的季度分红。
• 每股净资产值环比下降12%，从8.41美元降至7.38美元，主要反映了一项重大股权投资680万美元的减值以及CLO股权持仓320万美元的净已实现和未实现亏损。
• 在本季度结束后不久，OFS完成了对其在OFS SBIC I LP中约57%有限合伙权益的出售，总收益为5230万美元。该公司保留了剩余43%的权益，并继续担任该合伙企业的普通合伙人。
• OFS在季度内偿还了3140万美元债务。过去12个月内总债务减少了约8480万美元，同时监管资产覆盖率提高了3个百分点至164%。
• 该公司维持2026年第四季度分红为每股0.17美元。管理层表示，有纪律地将SBIC交易所得资金重新投向创收资产，随着时间的推移可能会改善净投资收益。
• 信贷质量仍是关注焦点。一名借款人被移出非计息状态，同时新增了两名公允价值总计210万美元投资的借款人。

关键财务数据

业务与运营表现

OFS在该季度继续优先改善资产负债表。该公司的债务到期日现已延长至2028年至2031年，管理层表示杠杆率的降低提高了运营灵活性。

季度末之后完成的SBIC交易减少了对相关资产的敞口，截至9月30日，该资产按公允价值计算约占投资组合的35%。管理层将该交易描述为降低投资组合集中度并将无息股权投资变现的一步。

按摊余成本计算，季度末的投资组合包含约61%的高级担保贷款、21%的结构化融资证券和18%的股权证券。在贷款投资组合中，按公允价值计算，97%的持仓为第一受偿权头寸。

按摊余成本计算，非计息贷款较上一季度减少了230万美元。然而，由于整体投资组合规模缩小，非计息敞口占投资组合公允价值的比例有所上升。

管理层指引

管理层预计将把5230万美元的SBIC交易总收益主要重新投向创收型投资。公司表示，这可能为未来几个季度乃至更长期的更高净投资收益提供支撑，不过资产投放将随时间审慎推进。

OFS正在评估传统中型市场贷款、基础设施信贷、房地产信贷、资产支持融资、流动性信贷和结构化信贷领域的机遇。管理层强调严谨的核保、资本保值和风险调整后收益。

该公司还预计，用成本较低的授信额度对高息票面无担保票据进行部分再融资将节省利息费用。管理层表示，近期基准利率的上升也应有助于增厚未来收益。

风险与关注领域

• 第三季度每股0.05美元的净投资收益未能覆盖每股0.17美元的季度分红。
• 由于一项重大股权投资估值下调以及CLO股权持仓出现亏损，NAV（每股净资产）大幅下降。
• 两家借款人被列入非计息状态，尽管相关头寸的公允价值总计仅为210万美元。其中一家继续按合同支付利息，但在进行内部信贷风险评估后被归类为非计息。
• 10月26日，Pan Steel在特拉华州衡平法院提起诉讼，对SBIC交易提出质疑。OFS表示，认为该指控毫无根据，并打算全力辩护。
• 管理层提到宏观经济不确定性、利率变化以及市场状况改变是需要持续考量的因素。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

Operator

Good morning, and welcome to the OFS Capital Corporation Third Quarter 2026 Earnings Results Conference Call. Please note that today's event is being recorded. I would now like to turn the conference over to Steve Altebrando. Please go ahead.

[p id="560890251" name="Stephen Altebrando" type="E" />

Good morning, everyone, and thank you for joining us. Also on the call today are Bilal Rashid, our Chairman and Chief Executive Officer; and Kyle Spina, the company's Chief Financial Officer and Treasurer.

Before we begin, please note that the statements made on this call and webcast may constitute forward-looking statements as defined under applicable securities laws. Such statements reflect various assumptions, expectations and opinions by OFS Capital's management concerning anticipated results are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from such statements.

The uncertainties and other factors are in some way beyond management's control, including the risk factors described from time to time in our filings with the SEC. Although we believe these assumptions are reasonable, any of those assumptions could prove incorrect, and as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. Except as required by applicable law, OFS Capital has no obligation to update any forward-looking statements made herein, and all forward-looking statements speak only as of the date of this call.

With that, I'll turn the call over to Chairman and Chief Executive Officer, Bilal Rashid.

Bilal Rashid

Thank you, Steve. Yesterday afternoon, we reported our third quarter results. On October 6, we announced the sale of approximately 57% of the limited partnership interest in one of our subsidiaries, OFS SBIC I LP for gross proceeds of $52.3 million. SBIC One LP holds our common equity investment in Fransteel. The BDC is retaining the remaining 43% limited partnership interest and remains the general partner of the partnership. We believe that this transaction represents a strategic step towards strengthening our balance sheet, improving liquidity and reducing portfolio concentration risk. In addition, it provides us with a meaningful amount of capital for redeployment into investments in accordance with the BDC's primary investment objectives. We believe that this potential investment deployment into primarily income-generating investments presents an opportunity to enhance our net investment income over the coming quarters and the long term. As we discussed on prior calls, SandSsteel has been the largest position in our investment portfolio, representing approximately 35% of our portfolio at fair value as of September 30. We expect the completion of this transaction to be a significant step toward our long-stated objective of monetizing certain noninterest-bearing equity investments. I also want to emphasize that we believe that the success of our investment in Transteel reflects a component of our investment strategy that has served us well. While our focus is on current income and capital preservation by primarily investing in senior secured loans, we selectively make equity investments in borrowers where there is a significant growth potential. These equity investments can provide potential opportunities for capital appreciation to enhance the value of our BDC. Tran Steel is a compelling example of this. What began as a relatively modest equity investment of approximately $200,000 in 2014 has generated substantial value for our shareholders over time. We intend to continue pursuing these types of opportunities selectively while maintaining our focus on income-generating investments and capital preservation. That said, on October 26, Pan Steel filed a complaint in Delaware Challstrery Court to, among other things, challenge the transaction. We believe the claim is meritless, and we intend to defend the matter vigorously. Turning to our financial results for the quarter. Net investment income totaled $0.05 per share compared to $0.08 per share in the prior quarter. While this remains below our quarterly distribution of $0.17 per share, we believe the steps we have taken in the past several quarters to strengthen our financial position, together with the significant proceeds from the FDIC equity transaction have created an opportunity to improve our earnings going forward. As we seek to prudently redeploy this capital primarily into new income-generating investments, over time, we expect to see a corresponding improvement in net investment income. Our net asset value at quarter end was $7.38 per share compared to $8.41 per share in the prior quarter. The decline was primarily driven by a reduction in the valuation of certain investments, including Pan Steel and our CLO equity investments. With respect to credit quality, loans to one borrower that was previously on nonaccrual were resolved during the quarter, while loans to 2 additional borrowers were placed on nonaccrual status. Importantly, the new nonaccruals represent relatively small positions within our overall portfolio, totaling $2.1 million at fair value, and the investments had already been on our radar for heightened credit risk monitoring. It's important to note that one of these borrowers continues to make its contractual interest payments but was placed on nonaccrual based on our internal assessment of credit risk. We continue to work closely with our borrowers and other stakeholders to maximize recoveries and preserve value across the portfolio. Our portfolio remains diversified with limited exposure to highly cyclical industries. We also benefit from the senior secured nature of our loan portfolio, which is entirely composed of first and second lien senior secured loans with 97% of our loan holdings in first lien positions based on fair value. This underscores our ongoing emphasis of maintaining a senior position in the capital structure and to help protect our invested capital. We also continued to make progress on strengthening our balance sheet during the quarter. including the repayment of $31.4 million of outstanding debt and an improvement in our asset coverage ratio of 3 percentage points to 164%. For the past several quarters, we have been focused on extending our debt maturities, reducing leverage and improving operational flexibility.

Over the past 12 months, we have reduced our total outstanding debt balance by approximately $84.8 million with our earliest maturity occurring in 2028. Having made substantial progress on these objectives, we believe we are now in a much stronger position to focus on new investment deployment and growing net investment income. In addition, during the quarter, we completed a partial refinancing of our higher coupon unsecured notes through the use of our lower-cost credit facility, which we expect will generate net interest expense savings going forward.

We also anticipate the recent increase in base rates will be accretive to our earnings on a going-forward basis. Looking ahead, we are focused on deploying the capital generated from the SBIC equity transaction in a disciplined manner with an emphasis on generating attractive risk-adjusted returns and improving our net investment income while we continue to evaluate opportunities in traditional middle market lending, we also benefit from the breadth of investment capabilities and expertise across our broader platform. This includes access to opportunities in infrastructure credit real estate credit, asset-backed finance, liquid credit and structured credit investments.

We are actively evaluating opportunities across these markets and believe this flexibility provides us with a broader universe of potential investments as we seek to identify the most compelling risk-adjusted return mix. Importantly, our approach remains grounded in disciplined underwriting, capital preservation and a focus on investments that we believe can generate sustainable income for our shareholders.

We continue to navigate an environment of macroeconomic uncertainty, evolving interest rates and changing market conditions. We believe our ability to invest across a broad range of credit opportunities, supported by the experience and capabilities of our adviser provides an important competitive advantage.

With approximately $3.8 billion in assets under management across the loan and structured credit markets, deep expertise across industries and our track record spanning more than 25 years and multiple credit cycles, we believe we are well-positioned to capitalize on opportunities as they arise.

We believe the SBIC equity transaction marks an important inflection point for OFS Capital. We have meaningfully reduced a significant portfolio concentration, strengthen our financial flexibility and generated investable capital that can now be redeployed into income-producing investments.

We believe these developments provide a strong foundation for improving net investment income and creating long-term value for our shareholders.

With that, I'll turn the call over to Kyle Spina, our Chief Financial Officer, to give you more details and color for the quarter.

Kyle Spina

Thanks, Bilal, and good morning, everyone. As Bilal mentioned, we posted net investment income of $719,000 or $0.05 per share for the third quarter of 2026, and a decline of $0.03 per share from the second quarter. Top line income decreased $899,000 quarter-over-quarter, partially offset by a $612,000 decrease in total expenses resulting in the decline in net investment income. We announced that we are maintaining our quarterly distribution at $0.17 per share for the fourth quarter of 2026.

At September 30, our quarterly distribution rate represented an 18.7% annualized yield based on the market price of our common stock. As Bilal described, while we fell short of covering the distribution in the third quarter, the proceeds generated by the SBIC equity transaction completed shortly after quarter end, provides us with the opportunity to enhance our net investment income going forward as we seek to prudently deploy this capital over time.

Our net asset value per share decreased by approximately 12% or $1.03 this quarter to $7.38. As Bilal described, the decline in our NAV was primarily related to depreciation of $6.8 million on our equity investment in Fans deal as well as net realized and unrealized losses in our credit portfolio, most pronounced in our CLO equity holdings totaling $3.2 million.

As Bilal mentioned, during the quarter, we experienced a decent amount of turnover in our nonaccrual loan positions with loans to one borrower removed from nonaccrual status following our restructuring transactions and loans to 2 new borrowers placed on nonaccrual status.

On a net basis, our total nonaccrual loans at amortized costs decreased by $2.3 million quarter-over-quarter. At quarter end, our regulatory asset coverage ratio was 164%, an increase of 3 percentage points from the prior quarter, a continued trend of improvement as we move closer to our long-term leverage target range. Utilizing the proceeds received from a couple of large loan repayments, we made $31.4 million of aggregate debt repayments during the quarter.

We continue to believe that our actions over the last several quarters to extend our debt maturities and deleverage our balance sheet have improved our operational flexibility as we now turn our attention to new investment deployments and improving our NII. We believe that these efforts reflect the successful execution of certain of our previously stated strategic objectives.

Turning to the income statement. Total investment income decreased approximately 13% and to $5.9 million this quarter. This was primarily driven by the impact of our ongoing deleveraging efforts, reducing the size of our interest-bearing portfolio.

Total investment income was bolstered by certain nonrecurring interest and fee income from loan investment repayments during the quarter. Total expenses decreased by approximately 10% during the period to $5.2 million. The decrease was primarily attributable to a $556,000 decrease in interest expense related to lower outstanding debt balances from our ongoing deleveraging efforts.

Turning to our investments. We continue to closely monitor certain borrowers experiencing what we believe are idiosyncratic stresses. As mentioned, our nonaccrual investments at cost decreased by $2.3 million quarter-over-quarter. However, at fair value, our nonaccrual percentage relative to our total portfolio increased by 2.1%, primarily related to a reduction in the size of our total portfolio.

With respect to our loan portfolio, we remain committed to being senior in the capital structure with 97% of our loan holdings being in first line positions based on fair value. From a deployment perspective, New Deployment remained modest during the quarter, totaling $7.7 million as we prioritize deleveraging. However, the SBIC equity transaction completed shortly after quarter end, provides approximately $52.3 million of gross proceeds for transaction costs as our team turns our attention to prudent deployment of that capital.

Based on amortized cost as of quarter end, our investment portfolio was comprised of approximately 61% senior secured loans, 21% structured finance securities and 18% equity securities. At the end of the quarter, we had investments in 50 unique issuers totaling $252.1 million at fair value.

On the interest-bearing portion of the portfolio, the weighted average performing investment income yield increased approximately 1% to 13.1% quarter-over-quarter. The increase in yield was primarily due to the impact of nonrecurring interest and fee income received upon the repayment of certain loan investments.

This metric includes all interest, prepayment fee and amortization of deferred loan fee income but excludes syndication fee income if applicable.

With that, I'll turn the call back over to Bilal for concluding remarks.

Bilal Rashid

Thank you, Kyle. As we look ahead, we believe the BDC is at an important turning point. Over the past several quarters, we have taken meaningful steps to strengthen our financial position and create a solid foundation for future growth. These efforts have included extending our debt maturities, which now span from 2028 to 2031 and reducing our overall debt by $84.8 million over the past year.

Combined with the significant proceeds generated by the recent SBIC equity transaction, we believe these actions have improved our financial flexibility and positioned us to shift our focus toward new income-generating investment deployment and growing net investment income. Importantly, we benefit from the breadth of investment capabilities across our advisers' platform.

This allows us to evaluate a broad range of opportunities beyond traditional middle-market lending and pursue investments that we believe offer the most attractive risk-adjusted returns and the current market environment. We believe our loan portfolio remains well diversified across multiple industries, and we continue to emphasize investing higher in the capital structure.

As we pursue new investment opportunities, we remain committed to our disciplined underwriting standards and focus on capital preservation, which we believe the port resilience across a range of market conditions.

Our team's long-standing experience and investment discipline have driven consistent results. Since 2011, the BDC has invested more than $2.1 billion with an annualized net realized loss of just 0.31%. While continuing to deliver attractive risk-adjusted returns on our portfolio. Finally, we continue to benefit from the scale and capabilities of our adviser, with a $3.8 billion corporate credit platform and affiliation with a $32.5 billion asset management group.

Our adviser provides deep credit experience long-standing banking and capital markets relationships and access to a broad universe of investment opportunities. Our corporate credit platform has navigated multiple credit cycles over the last 25-plus years, and we believe this experience and breadth of capabilities will be particularly valuable as we enter this next phase of the company's growth.

Importantly, our adviser and affiliates remain strongly aligned with shareholders as they maintain approximately 23% ownership in the BDC.

Thank you again for joining us today, and we look forward to updating you on our call next quarter.

Operator

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.