Declares First Quarter 2026 Distribution of $0.17 Per Share
CHICAGO--(BUSINESS WIRE)--March 02, 2026--
OFS Capital Corporation (Nasdaq: OFS) ("OFS Capital," "we," "us," or "our") today announced its financial results for the fiscal quarter ended December 31, 2025.
FOURTH QUARTER FINANCIAL HIGHLIGHTS
-- Net investment income decreased to $0.20 per common share for the
quarter ended December 31, 2025 from $0.22 per common share for the
quarter ended September 30, 2025.
-- Net loss on investments of $1.01 per common share for the quarter ended
December 31, 2025, primarily comprised of net unrealized depreciation of
$0.96 per common share. See additional information under "Results of
Operations" below.
-- Net asset value per common share decreased to $9.19 at December 31,
2025 from $10.17 at September 30, 2025.
-- As of December 31, 2025, based on fair value, 89% of our loan portfolio
consisted of floating rate loans and 100% of our loan portfolio consisted
of first and second lien loans.
-- For the quarter ended December 31, 2025, our investment portfolio's
weighted-average performing income yield increased to 13.5% from 13.3%
during the quarter ended September 30, 2025, primarily due to an increase
in earned yields on our structured finance securities.
-- During the quarter ended December 31, 2025, we placed one loan on
non-accrual status, while we removed loans to a portfolio company
previously on non-accrual status following a restructuring. See
additional information under "Portfolio and Investment Activities"
below.
OTHER RECENT EVENTS
-- On January 9, 2026, we amended the Banc of California Credit Facility
to extend the maturity date from February 28, 2026 to February 28, 2028.
-- On February 9, 2026, we redeemed the remaining $16.0 million in
aggregate principal amount of our 4.75% notes due February 10, 2026.
-- On February 18, 2026, our indirect, wholly owned subsidiary, OFSCC-FS,
LLC, entered into a revolving credit and security agreement with Natixis,
New York Branch, which provides for borrowings in an aggregate principal
amount up to $80,000,000. See additional information under "Liquidity and
Capital Resources" below.
-- On February 18, 2026, in connection with the closing of the Natixis
credit facility, OFSCC-FS repaid in full all outstanding obligations due,
and terminated all commitments, under its credit facility with BNP
Paribas. All liens securing the BNP credit facility were released upon
such repayment.
-- On February 26, 2026, our Board of Directors declared a distribution of
$0.17 per common share for the first quarter of 2026, payable on March
31, 2026 to stockholders of record as of March 20, 2026.
SELECTED FINANCIAL HIGHLIGHTS Quarter Ended
---------------------------------------------
(Per common share) December 31, 2025 September 30, 2025
--------------------- ----------------------
Net Investment Income
Net investment income $ 0.20 $ 0.22
Net Realized/Unrealized Gain
(Loss)
Net realized loss on
investments, net of taxes $ (0.05) $ (0.35)
Net unrealized depreciation
on investments, net of
taxes (0.96) (0.23)
Loss on extinguishment of
debt(1) -- (0.04)
--- ------------ --- -------------
Net loss $ (1.01) $ (0.62)
Net Earnings (Loss)
Net Earnings (loss) $ (0.81) $ (0.40)
Net Asset Value
Net asset value $ 9.19 $ 10.17
Distributions paid 0.17 0.34
(1) For the quarter ended December 31, 2025, loss on extinguishment of debt
rounds to less than $(0.01) per common share.
As of
-----------------------------------------
(in millions) December 31, 2025 September 30, 2025
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Balance Sheet Highlights
Total investments, at fair value $ 342.0 $ 370.2
Total outstanding debt -
principal 220.5 239.2
Total net assets 123.2 136.3
PORTFOLIO AND INVESTMENT ACTIVITIES
($ in millions)
Quarter Ended
---------------------------------------------
Portfolio Yields(2) December 31, 2025 September 30, 2025
-------------------------- --------------------- ----------------------
Average performing
interest-bearing
investments, at cost $ 260.4 $ 279.0
Weighted-average performing
income yield -
interest-bearing
investments(3) 13.5% 13.3%
Weighted-average realized
yield - interest-bearing
investments(4) 11.6% 11.5%
(2) The weighted-average yield of our investments is not the same as a
return on investment for our stockholders, but rather relates to our
investment portfolio and is calculated before the payment of all of our
fees and expenses.
(3) Performing income yield is calculated as (a) the actual amount earned on
performing interest-bearing investments, including interest, prepayment
fees and amortization of net loan fees, divided by (b) the
weighted-average of total performing interest-bearing investments at
amortized cost.
(4) Realized yield is calculated as (a) the actual amount earned on
interest-bearing investments, including interest, prepayment fees and
amortization of net loan fees, divided by (b) the weighted-average of
total interest-bearing investments at amortized cost, in each case,
including debt investments on non-accrual status and non-performing
structured finance securities.
Quarter Ended
-----------------------------------------
Portfolio Purchase Activity December 31, 2025 September 30, 2025
------------------------------ ------------------- --------------------
Debt and equity investments $ 8.0 $ 9.6
Structured finance securities 1.5 8.5
----- ------------ ---- --------------
Total investment purchases and
originations $ 9.5 $ 18.1
----- ------------ ---- --------------
As of December 31, 2025, based on fair value, our investment portfolio was comprised of the following:
-- Total investments of $342.0 million, which was equal to approximately
104% of amortized cost;
-- Debt investments of $179.8 million, of which 95% and 5% were first lien
loans and second lien loans, respectively;
-- Equity investments of $100.6 million; and
-- Structured finance securities of $61.6 million.
During the quarter ended December 31, 2025, a loan to a portfolio company with an amortized cost and fair value of $6.8 million and $4.1 million, respectively, was placed on non-accrual status. Additionally, we restructured a loan to a portfolio company with an amortized cost and fair value of $13.5 million and $5.3 million, respectively, which had been on non-accrual status, in exchange for a combination of a new loan and equity in the portfolio company. Our existing zero-basis equity investment in the portfolio company was also extinguished upon the exchange. Following the restructuring, the loan we received with an amortized cost and fair value of $3.8 million and $3.8 million, respectively, was placed on accrual status. As of December 31, 2025, our loan portfolio had non-accrual loans with an aggregate fair value of $14.4 million, or 4.2% of our total investments at fair value.
OUTSTANDING DEBT
During the quarters ended December 31, 2025 and September 30, 2025, the average dollar borrowings and weighted-average effective interest rate for our debt were as follows ($ in millions):
Average Dollar Weighted-Average
Quarter ended Borrowings Effective Interest Rate
------------------- ---------------- --------------------------
December 31, 2025 $ 239.5 7.07%
September 30, 2025 270.2 6.67
Following the extension of our Banc of California Credit Facility executed in January 2026, and the refinancing of our BNP credit facility executed in February 2026, we do not have any debt maturities until February 2028.
RESULTS OF OPERATIONS
(in thousands) Quarter Ended
-------------------------------------------
December 31, 2025 September 30, 2025
------------------- ----------------------
Total investment income $ 9,369 $ 10,551
Expenses:
Interest expense 4,267 4,542
Base management and
incentive fees 1,331 2,017
Professional,
administration and other
expenses 1,075 1,052
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