Oaktree Specialty Lending Corporation Issues Stockholder Letter
Dear Stockholder,
We hope this letter finds you safe and in good health. We understand that these are challenging and unprecedented times, and we wish to extend our sincere thoughts to those impacted by the COVID-19 virus. We want to assure you that
Investment Portfolio Positioning
Since Oaktree became investment adviser to OCSL in late 2017, its focus has been to defensively position the portfolio by maintaining diversity across issuers and borrowers, focusing on senior secured opportunities and lending to larger, more diversified businesses. To that end, as of
Regarding industry exposures, we have been lending to businesses that, in our opinion, operate in more defensive, less cyclical or structurally growing industries. As of
While the market continues to evolve and it is difficult to determine the impact that COVID-19 will have, we and Oaktree are committed to proactively managing risks and situations that may arise in our portfolio.
Balance Sheet and Liquidity
We entered this environment in a strong financial position with relatively low leverage and sufficient liquidity. As of
As of
($ in millions) | Committed | Outstanding | Interest Rate | Maturity | ||||
Cash and Cash Equivalents | $ | - | $ | (22 | ) | - | - | |
Credit Facility | 700 | LIBOR+2.00%4 | ||||||
2024 Notes | 75 | 75 | 5.875% | |||||
2028 Notes | 86 | 86 | 6.125% | |||||
Net Debt | $ | 861 | $ | 518 |
As of
($ in millions) | Committed | Outstanding | Interest Rate | Maturity | ||||
Unrestricted Cash1 | $ | - | $ | (112 | ) | - | - | |
Credit Facility | LIBOR+2.00%4 | |||||||
2025 Notes | 300 | 300 | 3.500% | |||||
Net Debt | $ | 1,000 | $ | 593 |
Oaktree believes market dislocations present interesting opportunities for us to invest. Given our current leverage position and available liquidity, Oaktree believes we are well-positioned to manage the potential needs of our existing portfolio companies and to deploy capital in this environment. Importantly, due to our exemptive relief order with the
Oaktree’s Experience in Managing Through Distressed Credit Markets
OCSL benefits from the significant resources provided to us by Oaktree, a leading global alternative investment management firm with expertise in below investment grade credit. As of
We understand and appreciate that these are difficult times for all, and we wanted you to know that we and Oaktree remain unequivocally focused and committed to proactively managing OCSL’s investment portfolio on behalf of all of our constituents. We believe we are well-positioned today and look forward to speaking with you about OCSL as this situation evolves.
Sincerely,
Armen Panossian Chief Executive Officer and Chief Investment Officer |
Matt Pendo President and Chief Operating Officer |
______________________
1 Excludes approximately
2 Actual liquidity as of
3 Excludes unfunded commitments to Senior Loan Fund JV I. Actual unfunded commitments as of
4 Interest rate spread can increase up to 2.25% depending on the senior coverage ratio.
About
Forward-Looking Statements
Some of the statements in this press release constitute forward-looking statements because they relate to future events or OCSL’s future performance or financial condition. The forward-looking statements may include statements as to: OCSL’s future operating results and distribution projections; OCSL’s business prospects and the prospects of its portfolio companies; and the impact of the investments that OCSL 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. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in OCSL’s annual report on Form 10-K and its quarterly reports on Form 10-Q. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment; risks associated with possible disruption in OCSL’s operations or the economy generally due to terrorism, natural disasters or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in OCSL’s operating areas, particularly with respect to business development companies or regulated investment companies; general considerations associated with the COVID-19 pandemic; and other considerations that may be disclosed from time to time in OCSL’s publicly disseminated documents and filings.
OCSL has based the forward-looking statements included in this press release on information available on the date of this press release and assumes no obligation to update any such forward-looking statements. Although OCSL 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 OCSL may make directly to you or through reports that it in the future may file with the
Contacts
Investor Relations:
(212) 284-1900
ocsl-ir@oaktreecapital.com
Media Relations:
(310) 478-2700
mediainquiries@oaktreecapital.com
Source: Oaktree Specialty Lending Corporation