Declares Second Quarter Distribution of $0.17 Per Share
CHICAGO--(BUSINESS WIRE)--April 30, 2026--
OFS Capital Corporation (Nasdaq: OFS) ("OFS Capital," the "Company," "we, " "us," or "our") today announced its financial results for the fiscal quarter ended March 31, 2026.
FIRST QUARTER FINANCIAL HIGHLIGHTS
-- Net investment income decreased from $0.20 per common share for the
quarter ended December 31, 2025 to $0.18 per common share for the quarter
ended March 31, 2026.
-- Net loss on investments was $1.03 per common share for the quarter
ended March 31, 2026. See additional information under "Results of
Operations" below.
-- Net asset value per common share decreased from $9.19 as of December
31, 2025 to $8.16 as of March 31, 2026.
-- As of March 31, 2026, based on fair value, 94% of our loan portfolio
consisted of floating rate loans and 100% of our loan portfolio consisted
of first lien and second lien loans.
-- The investment portfolio's weighted-average performing income yield
decreased from 13.5% during the prior quarter to 12.5% for the quarter
ended March 31, 2026, primarily due to a decrease in earned yields on our
structured finance securities.
-- During the quarter ended March 31, 2026, we placed a small loan to a
portfolio company on non-accrual status, while we exited a loan
previously on non-accrual status. See additional information under
"Portfolio and Investment Activities" below.
OTHER RECENT EVENTS
-- On April 28, 2026, our Board of Directors declared a distribution of
$0.17 per common share for the second quarter of 2026, payable on July 6,
2026 to stockholders of record as of June 19, 2026.
SELECTED FINANCIAL HIGHLIGHTS Three Months Ended
---------------------------------------
(Per common share) March 31, 2026 December 31, 2025
------------------ -------------------
Net Investment Income
Net investment income $ 0.18 $ 0.20
Net Realized/Unrealized Gain
(Loss)
Net realized loss on
investments, net of taxes $ (0.84) $ (0.05)
Net unrealized depreciation on
investments, net of taxes (0.19) (0.96)
Loss on extinguishment of
debt(1) (0.01) --
---------- -------------------
Net loss $ (1.04) $ (1.01)
Net Earnings (Loss)
Net Earnings (loss) $ (0.86) $ (0.81)
Net Asset Value
Net asset value $ 8.16 $ 9.19
Distributions paid 0.17 0.17
(1) For the quarter ended December 31, 2025, loss on extinguishment of debt
rounds to less than $(0.01) per common share.
As of
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(in millions) March 31, 2026 December 31, 2025
---------------- -------------------
Balance Sheet Highlights
Total investments, at fair
value $ 308.1 $ 342.0
Total outstanding debt -
principal 202.5 220.5
Total net assets 109.3 123.2
PORTFOLIO AND INVESTMENT
ACTIVITIES ($ in
millions)
Three Months Ended
-----------------------------------------
Portfolio Yields(2) March 31, 2026 December 31, 2025
-------------------------- ---------------- -------------------
Average performing
interest-bearing
investments, at cost $ 240.8 $ 260.4
Weighted-average performing
income yield -
interest-bearing
investments(3) 12.5% 13.5%
Weighted-average realized
yield - interest-bearing
investments(4) 10.9% 11.6%
(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.
Three Months Ended
-------------------------------------
Portfolio Purchase Activity March 31, 2026 December 31, 2025
------------------------------ ---------------- -------------------
Debt and equity investments $ 2.1 $ 8.0
Structured finance securities -- 1.5
---- ---------- ----- ------------
Total investment purchases and
originations $ 2.1 $ 9.5
---- ---------- ----- ------------
As of March 31, 2026, based on fair value, our investment portfolio was comprised of the following:
-- Total investments of $308.1 million, which was equal to approximately
104% of amortized cost;
-- Debt investments of $156.6 million, of which approximately 98% and 2%
were first lien and second lien loans, respectively;
-- Equity investments of $102.9 million; and
-- Structured finance securities of $48.6 million.
During the quarter ended March 31, 2026, a loan to a portfolio company with an amortized cost and fair value of $1.5 million and $1.0 million, respectively, representing 0.3% of the total portfolio, at fair value, was placed on non-accrual status. Additionally, we received net proceeds of $2.3 million for the partial recovery of a second lien debt investment, with an amortized cost and fair value of $6.6 million and $2.4 million, respectively, that was previously on non-accrual status, resulting in a realized loss of $4.3 million. As of March 31, 2026, our loan portfolio had non-accrual loans with an aggregate fair value of $10.9 million, or 3.5% of our total investments at fair value.
OUTSTANDING DEBT
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 ("OFSCC-FS"), entered into a revolving credit and security agreement with Natixis, New York Branch, which provides for borrowings in an aggregate principal amount up to $80.0 million. See additional information under "Liquidity and Capital Resources" below.
On February 18, 2026, in connection with the closing of the Natixis credit facility, OFSCC-FS repaid in full all outstanding obligations due, and terminated all commitments, under its credit facility with BNP Paribas. All liens securing the BNP credit facility were released upon such repayment.
As of March 31, 2026, approximately 96% of our outstanding debt matures in more than two years and 74% of our outstanding debt is unsecured. As of March 31, 2026, our regulatory asset coverage ratio was 154%, which exceeded the minimum asset coverage requirement of 150% under the Investment Company Act of 1940, as amended.
During the three months ended March 31, 2026 and December 31, 2025, the average dollar borrowings and weighted-average effective interest rate for our debt were as follows ($ in millions):
Weighted-Average
Effective
Three Months Ended Average Dollar Borrowings Interest Rate
------------------- ------------------------- -----------------
March 31, 2026 $ 215.0 7.34%
December 31, 2025 239.5 7.07
RESULTS OF OPERATIONS Three Months Ended
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(in thousands) March 31, 2026 December 31, 2025
---------------- ---------------------
Total investment income $ 8,904 $ 9,369
Expenses:
Interest expense 3,889 4,267
Base management and incentive
fees, net of base management
fee waiver 1,623 1,331
Professional, administration
and other expenses 928 1,075
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Total expenses, net 6,440 6,673
----------- --------------
Net investment income 2,464 2,696
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Net loss on investments (13,922) (13,532)
Loss on extinguishment of debt (130) (12)
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