GREENWICH, Conn., May 17, 2018 (GLOBE NEWSWIRE) — Oxford Lane Capital Corp. (“Oxford Lane”, “Fund”, “we”, “us” or “our”) (NasdaqGS:OXLC) (NasdaqGS:OXLCO) (NasdaqGS:OXLCM) announced today the following financial results and related information:

  • Net asset value per share as of March 31, 2018 stood at $10.08 compared with a net asset value per share at December 31, 2017 of $10.02.
     
  • Net investment income (“NII”), calculated in accordance with generally accepted accounting principles (“GAAP”), was approximately $11.0 million, or approximately $0.40 per share, for the quarter ended March 31, 2018.
     
  • Our core net investment income (“Core NII”) was approximately $8.6 million, or approximately $0.31 per share, for the quarter ended March 31, 2018.
     
    • Core NII represents net investment income adjusted for additional cash income distributions received, or entitled to be received (if any, in either case), on our collateralized loan obligation (“CLO”) equity investments (excluding those cash distributions believed to represent a return of capital). (See additional information under “Supplemental Information Regarding Core Net Investment Income” below).
       
    • While our experience has been that 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 represent less accurate indicators of taxable income with respect to our CLO equity investments than they have in the past.  Accordingly, our taxable income may be materially different than either NII or Core NII.
  • Total investment income, calculated in accordance with GAAP, amounted to approximately $20.4 million for the quarter ended March 31, 2018.
    • For the quarter ended March 31, 2018, we recorded total investment income from our portfolio as follows:
      • approximately $19.7 million from our CLO equity investments, and
      • approximately $0.7 million from our CLO debt investments, and other income.
  • As of March 31, 2018, the following weighted average yields were calculated:
     
    • the weighted average yield of our CLO debt investments at current cost was approximately 10.9%, compared with 10.1% as of December 31, 2017;
       
    • the weighted average (GAAP) effective yield of our CLO equity investments at current cost was approximately 17.2%, compared with 17.1% as of December 31, 2017;
       
    • the weighted average cash yield of our CLO equity investments at current cost was approximately 17.3%, compared with 20.2% as of December 31, 2017.
       
  • Net increase in net assets from operations was approximately $12.9 million, or approximately $0.47 per share, for the quarter ended March 31, 2018, including:
     
    • Net investment income of approximately $11.0 million;
       
    • Net realized gains of approximately $1.0 million; and
       
    • Net unrealized appreciation of approximately $0.9 million.
  • During the quarter ended March 31, 2018, we made additional CLO investments of approximately $136.0 million and we received approximately $86.9 million from sales and repayments of our CLO investments.
     
  • During the quarter ended March 31, 2018, we issued a total of 1,859,343 shares of common stock pursuant to an “at-the-market” offering, resulting in net proceeds of approximately $18.6 million after deducting the sales agent’s commissions and offering expenses.
     
  • On January 2, 2018, we announced that we entered into a repurchase transaction with Nomura Securities International, Inc. (“Nomura”) pursuant to which we sold CLO securities to Nomura with a market value of approximately $106.2 million for a sale price of approximately $42.5 million.  On April 25, 2018, we entered into an amended and restated repurchase transaction facility with Nomura.  Under the restated agreement, the term of the facility was extended by 3 months until January 2, 2019.  In addition, effective April 2, 2018, the facility pricing rate was reduced from 3-month LIBOR plus 3.35 percent per annum to 3-month LIBOR plus 3.15 percent per annum.
     
  • Our Board of Directors has declared the following distributions on our common stock:
Month Ending Record Date Payment Date Amount Per Share
July 31, 2018 July 23, 2018 July 31, 2018 $0.135
August 31, 2018 August 23, 2018 August 31, 2018 $0.135
September 30, 2018 September 20, 2018 September 28, 2018 $0.135

Our Board of Directors has 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
Record Dates Payment Dates
Series 2023 $   0.156250 June 21, July 23, August 23 June 29, July 31, August 31
Series 2024 $   0.140625 June 21, July 23, August 23 June 29, July 31, August 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

On a supplemental basis, we provide information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income determined in accordance with GAAP. Our non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted for additional cash income 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 based upon an effective yield to the expected redemption utilizing estimated cash flows compared to the cost, resulting in an effective yield for the investment; the difference between the actual cash received or distributions entitled to be received and the effective yield calculation is an adjustment to cost. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from the cash distributions actually received by us during the period (referred to below as “CLO equity adjustments”).

Further, in order to continue to qualify to be taxed as a regulated investment company, we are required, among other things, to distribute at least 90% of our investment company taxable income annually. Therefore, core net investment income may provide a better indication of estimated taxable income for a reporting period than does GAAP net investment income, although we can offer no assurance that will be the case as the ultimate tax character of our earnings cannot be determined until tax returns are prepared after the end of a fiscal year. We note that these non-GAAP measures may not be useful indicators of taxable earnings, particularly during periods of market disruption and volatility and our taxable income may differ materially from our core net investment income. 

The following table provides a reconciliation of NII to Core NII for the three months and year ended March 31, 2018:

   Three Months  Ended   Year  Ended
March 31, 2018   March 31, 2018
  Amount   Per Share   Amount   Per Share
Amounts   Amounts
Net investment income $ 10,964,185     $   0.399     $ 40,353,995     $   1.606  
CLO equity adjustments     (2,348,103 )       (0.085 )     (106,802 )       (0.004 )
Core net investment income $  8,616,082     $   0.314     $ 40,247,193     $   1.602  

A presentation containing further detail regarding our quarterly results of operations has been posted to our website under the Investor Relations section at Oxford Lane Presentation.

We will host a conference call to discuss our fourth fiscal quarter results today, Thursday, May 17, 2018 at 10:00 AM ET.  The toll free dial-in number will be 1-844-792-3730.  There will be a recorded replay of the call available for 30 days after the call.  If you are interested in hearing the recording, please dial 1-877-344-7529.  The replay pass-code number is 10120400.

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 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, unless required to do so by law.

Contact:
Bruce Rubin
203-983-5280

Source: Oxford Lane Capital Corp.