Press Release: Oaktree Specialty Lending Corporation Announces Third Fiscal Quarter 2026 Financial Results

Dow Jones
Aug 05
LOS ANGELES--(BUSINESS WIRE)--August 05, 2026-- 

Oaktree Specialty Lending Corporation (NASDAQ: OCSL) ("Oaktree Specialty Lending" or the "Company"), a specialty finance company, today announced its financial results for the third fiscal quarter ended June 30, 2026.

Financial Highlights for the Quarter Ended June 30, 2026

   --  Total investment income was $69.4 million ($0.79 per share) for the 
      third fiscal quarter of 2026 as compared to $70.4 million ($0.80 per 
      share) for the second fiscal quarter of 2026. Adjusted total investment 
      income was $69.2 million ($0.79 per share) for the third fiscal quarter 
      of 2026 as compared with $69.7 million ($0.79 per share) for the second 
      fiscal quarter of 2026. The decrease was primarily driven by a lower 
      average portfolio balance and a decrease in non-recurring income. This 
      was partially offset by restoring one investment that was previously on 
      non-accrual status to accrual status. 
 
   --  GAAP net investment income was $32.5 million ($0.37 per share) for the 
      third fiscal quarter of 2026 as compared with $34.4 million ($0.39 per 
      share) for the second fiscal quarter of 2026. The decrease for the 
      quarter was primarily driven by lower total investment income and higher 
      income-based ("Part I") incentive fees (net of fees waived), partially 
      offset by lower interest expense. 
 
   --  Adjusted net investment income was $32.2 million ($0.37 per share) for 
      the third fiscal quarter of 2026 as compared with $33.7 million ($0.38 
      per share) for the second fiscal quarter of 2026. The decrease for the 
      quarter was primarily driven by lower total investment income and higher 
      income-based ("Part I") incentive fees (net of fees waived), partially 
      offset by lower interest expense. 
 
   --  Net asset value ("NAV") per share was $15.70 as of June 30, 2026, 
      compared with $15.69 as of March 31, 2026. 
 
   --  Originated $206.4 million of new investment commitments and received 
      $262.8 million of proceeds from prepayments, exits, other paydowns and 
      sales during the quarter ended June 30, 2026. The weighted average yield 
      on new debt investments was 10.0%. 
 
   --  Total debt outstanding was $1,451.0 million as of June 30, 2026. The 
      total debt to equity ratio was 1.05x, and the net debt to equity ratio 
      was 1.02x, after adjusting for cash and cash equivalents. 
 
   --  Liquidity as of June 30, 2026 was composed of $39.9 million of 
      unrestricted cash and cash equivalents and $659.0 million of undrawn 
      capacity under the Company's credit facility (subject to borrowing base 
      and other limitations). Unfunded investment commitments were $235.4 
      million, or $208.3 million excluding unfunded commitments to the 
      Company's joint ventures. 
 
   --  Quarterly and supplemental cash distributions were declared of $0.30 
      per share and $0.03 per share, respectively, payable in cash on September 
      30, 2026 to stockholders of record on September 15, 2026. 

"We are pleased with the progress we made in reducing our non-accrual investments," said Armen Panossian, Chief Executive Officer and Co-Chief Investment Officer of Oaktree Specialty Lending. "Net asset value per share was stable relative to the prior quarter, and we maintained conservative leverage while continuing to selectively redeploy capital into credits that we believe offer attractive risk-adjusted returns."

Distribution Declaration

The Board of Directors declared quarterly and supplemental cash distributions of $0.30 per share and $0.03 per share, respectively, payable in cash on September 30, 2026 to stockholders of record on September 15, 2026.

Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a fiscal taxable year fall below the total amount of distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to the Company's stockholders.

Results of Operations

 
                                 For the three months ended 
                     --------------------------------------------------- 
($ in thousands, 
except per share      June 30, 2026    March 31, 2026    June 30, 2025 
data)                  (unaudited)      (unaudited)       (unaudited) 
                     ---------------  ----------------  ---------------- 
   GAAP operating 
   results: 
      Interest 
       income         $  61,636         $   65,253        $  69,390 
      PIK interest 
       income             5,209              3,455            5,070 
      Fee income            976              1,299              286 
      Dividend 
       income             1,612                378              525 
                         ------  ---  ---  -------      ---  ------  --- 
      Total 
       investment 
       income            69,433             70,385           75,271 
      Net expenses       36,609             36,019           41,734 
                         ------  ---  ---  -------      ---  ------  --- 
      Net 
       investment 
       income 
       before 
       taxes             32,824             34,366           33,537 
      (Provision) 
       benefit for 
       taxes on net 
       investment 
       income              (303)                (4)             (56) 
                         ------       ---  -------      ---  ------ 
      Net 
       investment 
       income            32,521             34,362           33,481 
                         ------  ---  ---  -------      ---  ------  --- 
      Net realized 
       and 
       unrealized 
       gains 
       (losses), 
       net of 
       taxes             (1,581)           (53,251)           4,871 
                         ------       ---  -------      ---  ------  --- 
      Net increase 
       (decrease) 
       in net 
       assets 
       resulting 
       from 
       operations     $  30,940         $  (18,889)       $  38,352 
                         ======  ===  ===  =======      ===  ======  === 
      Total 
       investment 
       income per 
       common 
       share          $    0.79         $     0.80        $    0.85 
      Net 
       investment 
       income per 
       common 
       share          $    0.37         $     0.39        $    0.38 
      Net realized 
       and 
       unrealized 
       gains 
       (losses), 
       net of taxes 
       per common 
       share          $   (0.02)        $    (0.60)       $    0.06 
      Earnings 
       (loss) per 
       common share 
       -- basic and 
       diluted        $    0.35         $    (0.21)       $    0.44 
   Non-GAAP 
   Financial 
   Measures(1) : 
      Adjusted 
       total 
       investment 
       income         $  69,152         $   69,744        $  74,297 
      Adjusted net 
       investment 
       income         $  32,240         $   33,721        $  32,507 
      Adjusted net 
       realized and 
       unrealized 
       gains 
       (losses), 
       net of 
       taxes          $  (2,058)        $  (52,692)       $   5,730 
      Adjusted 
       earnings 
       (loss)         $  30,182         $  (18,971)       $  38,237 
      Adjusted 
       total 
       investment 
       income per 
       share          $    0.79         $     0.79        $    0.84 
      Adjusted net 
       investment 
       income per 
       share          $    0.37         $     0.38        $    0.37 
      Adjusted net 
       realized and 
       unrealized 
       gains 
       (losses), 
       net of taxes 
       per share      $   (0.02)        $    (0.60)       $    0.07 
      Adjusted 
       earnings 
       (loss) per 
       share          $    0.34         $    (0.22)       $    0.43 
 
 
____________________ 
(1)  See Non-GAAP Financial Measures below for a description of the non-GAAP 
     measures and the reconciliations from the most comparable GAAP financial 
     measures to the Company's non-GAAP measures, including on a per share 
     basis. The Company's management uses these non-GAAP financial measures 
     internally to analyze and evaluate financial results and performance and 
     believes that these non-GAAP financial measures are useful to investors 
     as an additional tool to evaluate ongoing results and trends for the 
     Company and to review the Company's performance without giving effect to 
     non-cash income/gain/loss resulting from the merger of Oaktree Strategic 
     Income Corporation ("OCSI") with and into the Company in March 2021 (the 
     "OCSI Merger") and the merger of Oaktree Strategic Income II, Inc. 
     ("OSI2") with and into the Company in January 2023 (the "OSI2 Merger") 
     and, in the case of adjusted net investment income, without giving effect 
     to capital gains incentive fees. The presentation of non-GAAP measures is 
     not intended to be a substitute for financial results prepared in 
     accordance with GAAP and should not be considered in isolation. 
 
 
 
                                              As of 
                          --------------------------------------------- 
($ in thousands, except                    March 31, 
per share data and        June 30, 2026      2026        June 30, 2025 
ratios)                    (unaudited)    (unaudited)     (unaudited) 
                          -------------  -------------  --------------- 
   Select balance sheet 
   and other data: 
   Cash and cash 
    equivalents            $     39,921   $     51,261   $     79,799 
   Investment portfolio 
    at fair value             2,741,814      2,766,367      2,809,377 
   Total debt 
    outstanding (net of 
    unamortized 
    financing costs)          1,438,842      1,481,650      1,447,551 
   Net assets                 1,383,055      1,382,064      1,476,469 
   Net asset value per 
    share                         15.70          15.69          16.76 
   Total debt to equity           1.05x          1.08x            0.99x 
    ratio 
   Net debt to equity             1.02x          1.04x            0.93x 
    ratio 
 

Adjusted total investment income for the quarter ended June 30, 2026 was $69.2 million and included $61.4 million of interest income from portfolio investments, $5.2 million of PIK interest income, $1.0 million of fee income and $1.6 million of dividend income. The $0.6 million quarterly decrease in adjusted total investment income was primarily driven by a lower average portfolio balance and a decrease in non-recurring income. This was partially offset by restoring one investment that was previously on non-accrual status to accrual status.

Net expenses for the quarter ended June 30, 2026 totaled $36.6 million, increased by $0.6 million from the quarter ended March 31, 2026. The increase for the quarter was primarily driven by higher Part I incentive fees (net of fees waived), partially offset by lower interest expense due to lower average borrowings outstanding during the quarter.

Adjusted net investment income was $32.2 million ($0.37 per share) for the quarter ended June 30, 2026, which was down from $33.7 million ($0.38 per share) for the quarter ended March 31, 2026. The decrease of $1.5 million primarily reflected $0.6 million of lower adjusted total investment income and $0.6 million of higher net expenses.

Adjusted net realized and unrealized losses, net of taxes, were $2.1 million for the quarter ended June 30, 2026, primarily reflecting realized and unrealized losses on certain debt and equity investments.

Portfolio and Investment Activity

 
                                           As of 
                     -------------------------------------------------- 
                      June 30, 2026     March 31, 2026   June 30, 2025 
($ in thousands)       (unaudited)       (unaudited)      (unaudited) 
                     ----------------  ----------------  -------------- 
   Investments at 
    fair value       $2,741,814        $2,766,367        $2,809,377 
   Number of 
    portfolio 
    companies               163               163               149 
   Average 
    portfolio 
    company debt 
    size             $   17,585        $   17,544        $   19,400 
 
   Asset class: 
   First lien debt         81.5%             83.7%             81.1% 
   Second lien debt         3.0%              1.8%              2.3% 
   Unsecured debt           5.9%              5.2%              4.9% 
   Equity                   3.9%              3.7%              5.5% 
   JV interests             5.6%              5.6%              6.2% 
 
   Non-accrual 
   debt 
   investments: 
   Non-accrual 
    investments at 
    fair value       $   47,035        $   69,473        $   83,637 
   Non-accrual 
    investments at 
    cost                113,573           167,301           181,660 
   Non-accrual 
    investments as 
    a percentage of 
    debt 
    investments at 
    fair value              1.8%              2.6%              3.2% 
   Non-accrual 
    investments as 
    a percentage of 
    debt 
    investments at 
    cost                    4.2%              5.9%              6.6% 
   Number of 
    investments on 
    non-accrual               6                10                10 
 
   Interest rate 
   type: 
   Percentage 
    floating-rate          91.4%             91.0%             90.9% 
   Percentage 
    fixed-rate              8.6%              9.0%              9.1% 
 
   Yields: 
   Weighted average 
    yield on debt 
    investments(1)          9.3%              9.3%             10.1% 
   Cash component 
    of weighted 
    average yield 
    on debt 
    investments             8.2%              8.4%              9.1% 
   Weighted average 
    yield on total 
    portfolio 
    investments(2)          9.1%              9.0%              9.6% 
 
   Investment 
   activity: 
   New investment 
    commitments      $  206,400        $  204,100        $  147,200 
   New funded 
    investment 
    activity(3)      $  235,500        $  198,600        $  143,300 
   Proceeds from 
    prepayments, 
    exits, other 
    paydowns and 
    sales            $  262,800        $  334,100        $  249,400 
   Net new 
    investments(4)   $  (27,300)       $ (135,500)       $ (106,100) 
   Number of new 
    investment 
    commitments in 
    new portfolio 
    companies                 7                10                 5 
   Number of new 
    investment 
    commitments in 
    existing 
    portfolio 
    companies                 7                 5                 6 
   Number of 
    portfolio 
    company exits             7                15                 8 
 
 
____________________ 
(1)  Annual stated yield earned plus net annual amortization of OID or premium 
     earned on accruing investments, including the Company's share of the 
     return on debt investments in SLF JV I and Glick JV, and excluding any 
     amortization or accretion of interest income resulting solely from the 
     cost basis established by ASC 805 (see Non-GAAP Financial Measures below) 
     for the assets acquired in connection with the OCSI Merger and OSI2 
     Merger. 
(2)  Annual stated yield earned plus net annual amortization of OID or premium 
     earned on accruing investments and dividend income, including the 
     Company's share of the return on investments in SLF JV I and Glick JV, 
     and excluding any amortization or accretion of interest income resulting 
     solely from the cost basis established by ASC 805 for the assets acquired 
     in connection with the OCSI Merger and OSI2 Merger. 
(3)  New funded investment activity includes drawdowns on existing revolver 
     and delayed draw term loan commitments. 
(4)  Net new investments consists of new funded investment activity less 
     proceeds from prepayments, exits, other paydowns and sales. 
 

As of June 30, 2026, the fair value of the investment portfolio was $2.7 billion and was composed of investments in 163 companies. These included debt investments in 141 companies, equity investments in 39 companies, and the Company's joint venture investments in Senior Loan Fund JV I, LLC ("SLF JV I") and OCSI Glick JV LLC ("Glick JV"). 20 of the equity investments were in companies in which the Company also had a debt investment.

As of June 30, 2026, 95.0% of the Company's portfolio at fair value consisted of debt investments, including 81.5% of first lien loans, 3.0% of second lien loans and 10.5% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV. This compared to 83.7% of first lien loans, 1.8% of second lien loans and 10.8% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV, as of March 31, 2026.

As of June 30, 2026, there were six investments on non-accrual status, which represented 4.2% and 1.8% of the debt portfolio at cost and fair value, respectively. As of March 31, 2026, there were ten investments on non-accrual status, which represented 5.9% and 2.6% of the debt portfolio at cost and fair value, respectively.

SLF JV I

The Company's investments in SLF JV I totaled $113.2 million at fair value as of June 30, 2026, increased by 0.4% from $112.8 million as of March 31, 2026. The increase was primarily driven by SLF JV I's use of leverage and net unrealized appreciation in the underlying investment portfolio.

As of June 30, 2026, SLF JV I had $429.0 million in assets, including senior secured loans to 130 portfolio companies. This compared to $447.5 million in assets, including senior secured loans to 124 portfolio companies, as of March 31, 2026. SLF JV I generated cash interest income of $1.9 million for the Company during the quarter ended June 30, 2026, down from $3.0 million in the prior quarter. SLF JV I generated dividend income of $1.4 million for the Company during the quarter ended June 30, 2026, compared to no dividend income generated during the quarter ended March 31, 2026. As of June 30, 2026, SLF JV I had $17.5 million of undrawn capacity (subject to borrowing base and other limitations) on its $290 million senior revolving credit facility, and its debt to equity ratio was 2.1x.

Glick JV

The Company's investments in Glick JV totaled $41.3 million at fair value as of June 30, 2026, down 0.5% from $41.5 million as of March 31, 2026. The decrease was primarily driven by Glick JV's use of leverage and net realized losses in the underlying investment portfolio.

As of June 30, 2026, Glick JV had $142.5 million in assets, including senior secured loans to 131 portfolio companies. This compared to $142.2 million in assets, including senior secured loans to 121 portfolio companies, as of March 31, 2026. Glick JV generated cash interest income of $1.0 million for the Company during the quarter ended June 30, 2026 down slightly from $1.2 million in the prior quarter. As of June 30, 2026, Glick JV had $30.0 million of undrawn capacity (subject to borrowing base and other limitations) on its $120 million senior revolving credit facility, and its debt to equity ratio was 1.9x.

Liquidity and Capital Resources

As of June 30, 2026, the Company had total principal value of debt outstanding of $1,451.0 million, including $501.0 million of outstanding borrowings under its revolving credit facility and $950.0 million of unsecured notes payable. The funding mix was composed of 35% secured and 65% unsecured borrowings as of June 30, 2026. The Company was in compliance with all financial covenants under its syndicated credit facility as of June 30, 2026.

As of June 30, 2026, the Company had $39.9 million of unrestricted cash and cash equivalents and $659.0 million of undrawn capacity on its credit facility (subject to borrowing base and other limitations). As of June 30, 2026, unfunded investment commitments were $235.4 million, or $208.3 million excluding unfunded commitments to the Company's joint ventures. The Company has analyzed cash and cash equivalents, availability under its credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believes its liquidity and capital resources are sufficient to invest in market opportunities as they arise.

As of June 30, 2026, the weighted average interest rate on debt outstanding, including the effect of the interest rate swap agreements was 5.9%, unchanged from the prior quarter.

The Company's total debt to equity ratio was 1.05x and 1.08x as of June 30, 2026 and March 31, 2026, respectively. The Company's net debt to equity ratio was 1.02x and 1.04x as of June 30, 2026 and March 31, 2026, respectively.

Non-GAAP Financial Measures

On a supplemental basis, the Company is disclosing certain adjusted financial measures, each of which is calculated and presented on a basis of methodology other than in accordance with GAAP ("non-GAAP"). The Company's management uses these non-GAAP financial measures internally to analyze and evaluate financial results and performance and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing results and trends for the Company and to review the Company's performance without giving effect to non-cash income/gain/loss resulting from the OCSI Merger and the OSI2 Merger and in the case of adjusted net investment income, without giving effect to capital gains incentive fees. The presentation of the below non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.

   --  "Adjusted Total Investment Income" and "Adjusted Total Investment 
      Income Per Share" -- represents total investment income excluding any 
      amortization or accretion of interest income resulting solely from the 
      cost basis established by ASC 805 (see below) for the assets acquired in 
      connection with the OCSI Merger and the OSI2 Merger. 
 
   --  "Adjusted Net Investment Income" and "Adjusted Net Investment Income 
      Per Share" -- represents net investment income, excluding (i) any 
      amortization or accretion of interest income resulting solely from the 
      cost basis established by ASC 805 (see below) for the assets acquired in 
      connection with the OCSI Merger and the OSI2 Merger and (ii) capital 
      gains incentive fees ("Part II incentive fees"). 
 
   --  "Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes" and 
      "Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per 
      Share" -- represents net realized and unrealized gains (losses) net of 
      taxes excluding any net realized and unrealized gains (losses) resulting 
      solely from the cost basis established by ASC 805 (see below) for the 
      assets acquired in connection with the OCSI Merger and the OSI2 Merger. 
 
 
   --  "Adjusted Earnings (Loss)" and "Adjusted Earnings (Loss) Per Share" -- 
      represents the sum of (i) Adjusted Net Investment Income and (ii) 
      Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes and 
      includes the impact of Part II incentive fees1, if any. 

The OCSI Merger and the OSI2 Merger (the "Mergers") were accounted for as asset acquisitions in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations--Related Issues ("ASC 805"). The consideration paid to each of the stockholders of OCSI and OSI2 were allocated to the individual assets acquired and liabilities assumed based on the relative fair values of the net identifiable assets acquired other than "non-qualifying" assets, which established a new cost basis for the acquired investments under ASC 805 that, in aggregate, was different than the historical cost basis of the acquired investments prior to the OCSI Merger or the OSI2 Merger, as applicable. Additionally, immediately following the completion of the Mergers, the acquired investments were marked to their respective fair values under ASC 820, Fair Value Measurements, which resulted in unrealized appreciation/depreciation. The new cost basis established by ASC 805 on debt investments acquired will accrete/amortize over the life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized appreciation/depreciation on such investment acquired through its ultimate disposition. The new cost basis established by ASC 805 on equity investments acquired will not accrete/amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, the Company will recognize a realized gain/loss with a corresponding reversal of the unrealized appreciation/depreciation on disposition of such equity investments acquired.

The Company's management uses the non-GAAP financial measures described above internally to analyze and evaluate financial results and performance and to compare its financial results with those of other business development companies that have not adjusted the cost basis of certain investments pursuant to ASC 805. The Company's management believes "Adjusted Total Investment Income", "Adjusted Total Investment Income Per Share", "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share" are useful to investors as an additional tool to evaluate ongoing results and trends for the Company without giving effect to the income resulting from the new cost basis of the investments acquired in the Mergers because these amounts do not impact the fees payable to Oaktree Fund Advisors, LLC (the "Adviser") under its investment advisory agreement (as amended and restated from time to time, the "A&R Advisory Agreement"), and specifically as its relates to "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share", without giving effect to Part II incentive fees. In addition, the Company's management believes that "Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes", "Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share", "Adjusted Earnings (Loss)" and "Adjusted Earnings (Loss) Per Share" are useful to investors as they exclude the non-cash income and gain/loss resulting from the Mergers and are used by management to evaluate the economic earnings of its investment portfolio. Moreover, these metrics more closely align the Company's key financial measures with the calculation of incentive fees payable to the Adviser under the A&R Advisory Agreement (i.e., excluding amounts resulting solely from the lower cost basis of the acquired investments established by ASC 805 that would have been to the benefit of the Adviser absent such exclusion).

 
____________________ 
(1)  Adjusted earnings (loss) includes accrued Part II incentive fees. As of 
     and for the three months ended June 30, 2026, there was no accrued Part 
     II incentive fee liability. Part II incentive fees are contractually 
     calculated and paid at the end of the fiscal year in accordance with the 
     A&R Advisory Agreement, which differs from Part II incentive fees accrued 
     under GAAP. For the three months ended June 30, 2026, no Part II 
     incentive fees were payable under the A&R Advisory Agreement. 
 

The following table provides a reconciliation of total investment income (the most comparable U.S. GAAP measure) to adjusted total investment income for the periods presented:

 
                                  For the three months ended 
                    ------------------------------------------------------- 
                     June 30, 2026    March 31, 2026       June 30, 2025 
                      (unaudited)       (unaudited)         (unaudited) 
                    ---------------  -----------------  ------------------- 
($ in thousands, 
except per share               Per               Per 
data)                Amount   Share   Amount    Share    Amount   Per Share 
                    --------  -----  --------  -------  --------  --------- 
   GAAP total 
    investment 
    income          $69,433   $0.79  $70,385   $ 0.80   $75,271   $ 0.85 
   Interest income 
    amortization 
    (accretion) 
    related to 
    merger 
    accounting 
    adjustments        (281)     --     (641)   (0.01)     (974)   (0.01) 
                     ------    ----   ------    -----    ------    ----- 
   Adjusted total 
    investment 
    income          $69,152   $0.79  $69,744   $ 0.79   $74,297   $ 0.84 
                     ======    ====   ======    =====    ======    ===== 
 

The following table provides a reconciliation of net investment income (the most comparable U.S. GAAP measure) to adjusted net investment income for the periods presented:

 
                                  For the three months ended 
                    ------------------------------------------------------- 
                     June 30, 2026    March 31, 2026       June 30, 2025 
                      (unaudited)       (unaudited)         (unaudited) 
                    ---------------  -----------------  ------------------- 
($ in thousands, 
except per share               Per               Per 
data)                Amount   Share   Amount    Share    Amount   Per Share 
                    --------  -----  --------  -------  --------  --------- 
   GAAP net 
    investment 
    income          $32,521   $0.37  $34,362   $ 0.39   $33,481   $ 0.38 
   Interest income 
    amortization 
    (accretion) 
    related to 
    merger 
    accounting 
    adjustments        (281)     --     (641)   (0.01)     (974)   (0.01) 
   Part II 
   incentive fee         --      --       --       --        --       -- 
                     ------    ----   ------    -----    ------    ----- 
   Adjusted net 
    investment 
    income          $32,240   $0.37  $33,721   $ 0.38   $32,507   $ 0.37 
                     ======    ====   ======    =====    ======    ===== 
 

The following table provides a reconciliation of net realized and unrealized gains (losses), net of taxes (the most comparable U.S. GAAP measure) to adjusted net realized and unrealized gains (losses), net of taxes for the periods presented:

 
                                  For the three months ended 
                    ------------------------------------------------------ 
                      June 30, 2026      March 31, 2026     June 30, 2025 
                       (unaudited)         (unaudited)       (unaudited) 
                    -----------------  ------------------  --------------- 
($ in thousands, 
except per share                Per                 Per              Per 
data)                Amount    Share    Amount     Share   Amount   Share 
                    --------  -------  ---------  -------  ------  ------- 
   GAAP net 
    realized and 
    unrealized 
    gains 
    (losses), net 
    of taxes        $(1,581)  $(0.02)  $(53,251)  $(0.60)  $4,871  $0.06 
   Net realized 
    and unrealized 
    gains (losses) 
    related to 
    merger 
    accounting 
    adjustments        (477)   (0.01)       559     0.01      859   0.01 
                     ------    -----    -------    -----    -----   ---- 
   Adjusted net 
    realized and 
    unrealized 
    gains 
    (losses), net 
    of taxes        $(2,058)  $(0.02)  $(52,692)  $(0.60)  $5,730  $0.07 
                     ======    =====    =======    =====    =====   ==== 
 

The following table provides a reconciliation of net increase (decrease) in net assets resulting from operations (the most comparable U.S. GAAP measure) to adjusted earnings (loss) for the periods presented:

 
                                    For the three months ended 
                    ---------------------------------------------------------- 
                      June 30, 2026      March 31, 2026       June 30, 2025 
                       (unaudited)         (unaudited)         (unaudited) 
                    -----------------  ------------------  ------------------- 
($ in thousands, 
except per share                Per                 Per 
data)                Amount    Share    Amount     Share    Amount   Per Share 
                    --------  -------  ---------  -------  --------  --------- 
   Net increase 
    (decrease) in 
    net assets 
    resulting from 
    operations      $30,940   $ 0.35   $(18,889)  $(0.21)  $38,352   $ 0.44 
   Interest income 
    amortization 
    (accretion) 
    related to 
    merger 
    accounting 
    adjustments        (281)      --       (641)   (0.01)     (974)   (0.01) 
   Net realized 
    and unrealized 
    gains (losses) 
    related to 
    merger 
    accounting 
    adjustments        (477)   (0.01)       559     0.01       859     0.01 
                     ------    -----    -------    -----    ------    ----- 
   Adjusted 
    earnings 
    (loss)          $30,182   $ 0.34   $(18,971)  $(0.22)  $38,237   $ 0.43 
                     ======    =====    =======    =====    ======    ===== 
 

Conference Call Information

Oaktree Specialty Lending will host a conference call to discuss its third fiscal quarter ended June 30, 2026 results at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time on August 5, 2026. The conference call may be accessed by dialing (833) 461-5787 (U.S. callers). All callers will need to provide the meeting ID, 843 537 670, and reference "Oaktree Specialty Lending" once connected with the operator. Alternatively, a live webcast of the conference call can be accessed through the Investors section of Oaktree Specialty Lending's website, www.oaktreespecialtylending.com. During the conference call, the Company intends to refer to an investor presentation that will be available on the Investors section of its website.

For those individuals unable to listen to the live broadcast of the conference call, a replay will be available on Oaktree Specialty Lending's website, beginning approximately one hour after the broadcast.

About Oaktree Specialty Lending Corporation

Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a specialty finance company dedicated to providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company's investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds and preferred and common equity, including equity co-investments. The Company is regulated as a business development company under the Investment Company Act of 1940, as amended, and is externally managed by Oaktree Fund Advisors, LLC, an affiliate of Oaktree Capital Management, L.P. For additional information, please visit Oaktree Specialty Lending's website at www.oaktreespecialtylending.com.

Forward-Looking Statements

Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition. The forward-looking statements may include statements as to: future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company 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. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) changes or potential disruptions in the Company's operations, the economy, financial markets or political environment, including those caused by tariffs and trade disputes with other countries, inflation and an elevated interest rate environment; (ii) risks associated with possible disruption in the operations of the Company, the operations of its portfolio companies or the economy generally due to terrorism, war or other geopolitical conflict, natural disasters, pandemics or cybersecurity incidents; (iii) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in the Company's operating areas, particularly with respect to business development companies or regulated investment companies; and (iv) other considerations that may be disclosed from time to time in the Company's publicly disseminated documents and filings. The Company has based the forward-looking statements included in this press release on information available to it on the date of this press release, and the Company assumes no obligation to update any such forward-looking statements. The Company 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 it may make directly to you or through reports that the Company in the future may file with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

 
 
               Oaktree Specialty Lending Corporation 
         Consolidated Statements of Assets and Liabilities 
              (in thousands, except per share amounts) 
 
                             June 30,     March 31, 
                               2026         2026      September 30, 
                            (unaudited)  (unaudited)       2025 
                            -----------  -----------  ------------- 
          ASSETS 
Investments at fair value: 
Control investments (cost 
 June 30, 2026: $343,242; 
 cost March 31, 2026: 
 $378,041; cost September 
 30, 2025: $377,709)        $  199,896   $  210,855   $  227,748 
Affiliate investments 
 (cost June 30, 2026: 
 $43,826; cost March 31, 
 2026: $78,141; cost 
 September 30, 2025: 
 $58,344)                       39,872       73,337       54,999 
Non-control/Non-affiliate 
 investments (cost June 
 30, 2026: $2,609,629; 
 cost March 31, 2026: 
 $2,611,720; cost 
 September 30, 2025: 
 $2,639,069)                 2,502,046    2,482,175    2,565,035 
                             ---------    ---------    --------- 
Total investments at fair 
 value (cost June 30, 
 2026: $2,996,697; cost 
 March 31, 2026: 
 $3,067,902; cost 
 September 30, 2025: 
 $3,075,122)                 2,741,814    2,766,367    2,847,782 
Cash and cash equivalents       39,921       51,261       79,630 
Interest, dividends and 
 fees receivable                22,965       22,886       31,868 
Due from portfolio 
 companies                         237          297        3,186 
Receivables from unsettled 
 transactions                   36,627       20,515        4,949 
Due from broker                  1,750       15,550       15,550 
Deferred financing costs         8,023        8,558        9,675 
Deferred offering costs             43           43          143 
Derivative assets at fair 
 value                           5,815        7,859        8,713 
Other assets                       997        1,081        1,495 
                             ---------    ---------    --------- 
Total assets                $2,858,192   $2,894,417   $3,002,991 
                             =========    =========    ========= 
 
LIABILITIES AND NET ASSETS 
Liabilities: 
   Accounts payable, 
    accrued expenses and 
    other liabilities       $    2,629   $    1,852   $    1,538 
   Base management fee and 
    incentive fee payable        9,419        7,107       12,515 
   Due to affiliate              1,957        2,113        1,569 
   Interest payable             10,584       10,346       12,067 
   Payables from unsettled 
    transactions                 4,943        3,260       15,011 
   Derivative liabilities 
    at fair value                6,699        5,733        7,329 
   Deferred tax liability           64          292          269 
   Credit facilities 
    payable                    501,000      540,000      545,000 
   Unsecured notes payable 
    (net of $4,954, $5,490 
    and $6,561 of 
    unamortized financing 
    costs as of June 30, 
    2026, March 31, 2026 
    and September 30, 2025 
    respectively)              937,842      941,650      941,880 
                             ---------    ---------    --------- 
Total liabilities            1,475,137    1,512,353    1,537,178 
Commitments and 
contingencies 
Net assets: 
   Common stock, $0.01 par 
    value per share, 
    250,000 shares 
    authorized; 88,086 
    shares issued and 
    outstanding as of June 
    30, 2026, March 31, 
    2026 and September 30, 
    2025, respectively             881          881          881 
   Additional 
    paid-in-capital          2,350,075    2,350,075    2,350,075 
   Accumulated 
    overdistributed 
    earnings                  (967,901)    (968,892)    (885,143) 
                             ---------    ---------    --------- 
Total net assets 
 (equivalent to $15.70, 
 $15.69 and $16.64 per 
 common share as of June 
 30, 2026, March 31, 2026 
 and September 30, 2025, 
 respectively)               1,383,055    1,382,064    1,465,813 
                             ---------    ---------    --------- 
Total liabilities and net 
 assets                     $2,858,192   $2,894,417   $3,002,991 
                             =========    =========    ========= 
 
 
 
 
                                      Oaktree Specialty Lending Corporation 
                                      Consolidated Statements of Operations 
                                     (in thousands, except per share amounts) 
 
                                 Three months     Three months     Three months     Nine months     Nine months 
                                ended June 30,   ended March 31,  ended June 30,    ended June    ended June 30, 
                                     2026             2026             2025          30, 2026          2025 
                                  (unaudited)      (unaudited)      (unaudited)     (unaudited)     (unaudited) 
                                ---------------  ---------------  ---------------  -------------  --------------- 
Interest income: 
   Control investments           $    3,271       $    4,794       $    5,165       $    12,963    $    15,275 
   Affiliate investments              1,475              848              277             2,863            602 
   Non-control/Non-affiliate 
    investments                      56,032           58,566           62,441           175,155        198,165 
   Interest on cash and cash 
    equivalents                         858            1,045            1,507             2,831          4,293 
                                    -------          -------          -------          --------       -------- 
   Total interest income             61,636           65,253           69,390           193,812        218,335 
                                    -------          -------          -------          --------       -------- 
PIK interest income: 
   Control investments                   --               --               --                --            830 
   Affiliate investments                217              281               28               945             83 
   Non-control/Non-affiliate 
    investments                       4,992            3,174            5,042            11,567         14,416 
                                    -------          -------          -------          --------       -------- 
   Total PIK interest income          5,209            3,455            5,070            12,512         15,329 
                                    -------          -------          -------          --------       -------- 
Fee income: 
   Affiliate investments                 --               --               --                 4             -- 
   Non-control/Non-affiliate 
    investments                         976            1,299              286             5,243          3,707 
                                    -------          -------          -------          --------       -------- 
   Total fee income                     976            1,299              286             5,247          3,707 
                                    -------          -------          -------          --------       -------- 
Dividend income: 
   Control investments                1,400               --              525             1,925          1,925 
   Non-control/Non-affiliate 
    investments                          27               23               --                50            190 
   Non-control/Non-affiliate 
    investments - PIK                   185              355               --             1,368             -- 
                                    -------          -------          -------          --------       -------- 
   Total dividend income              1,612              378              525             3,343          2,115 
                                    -------          -------          -------          --------       -------- 
Total investment income              69,433           70,385           75,271           214,914        239,486 
                                    -------          -------          -------          --------       -------- 
Expenses: 
   Base management fee                7,046            7,107            7,195            21,697         22,854 
   Part I incentive fee               2,373               --            5,767             3,561         20,413 
   Professional fees                  1,627            1,288            1,388             4,329          3,682 
   Directors fees                       160              160              160               480            480 
   Interest expense                  24,139           25,626           31,061            76,424         89,814 
   Administrator expense                623              663              525             1,856          1,350 
   General and administrative 
    expenses                            641            1,175              997             2,657          2,860 
                                    -------          -------          -------          --------       -------- 
   Total expenses                    36,609           36,019           47,093           111,004        141,453 
   Management fees waived                --               --               --                --           (933) 
   Part I incentive fees 
    waived                               --               --           (5,359)               --        (18,469) 
                                    -------          -------          -------          --------       -------- 
   Net expenses                      36,609           36,019           41,734           111,004        122,051 
                                    -------          -------          -------          --------       -------- 
Net investment income before 
 taxes                               32,824           34,366           33,537           103,910        117,435 
   (Provision) benefit for 
    taxes on net investment 
    income                             (303)              (4)             (56)             (324)          (597) 
                                    -------          -------          -------          --------       -------- 
Net investment income                32,521           34,362           33,481           103,586        116,838 
                                    -------          -------          -------          --------       -------- 
Unrealized appreciation 
(depreciation): 
   Control investments               23,840           (8,265)          (2,024)            6,615        (62,940) 
   Affiliate investments                850             (663)            (246)            1,145           (568) 
   Non-control/Non-affiliate 
    investments                      21,987          (32,736)          18,905           (35,283)       (17,268) 
   Foreign currency forward 
    contracts                         1,533            2,326            1,937             3,977         (2,289) 
                                    -------          -------          -------          --------       -------- 
   Net unrealized appreciation 
    (depreciation)                   48,210          (39,338)          18,572           (23,546)       (83,065) 
                                    -------          -------          -------          --------       -------- 
Realized gains (losses): 
   Control investments              (24,337)              --               --           (24,337)            13 
   Affiliate investments              4,849              169              145             5,070            190 
   Non-control/Non-affiliate 
    investments                     (30,544)         (17,393)           1,705           (47,861)       (16,898) 
   Foreign currency forward 
    contracts                           493            3,614          (15,282)            5,321         (7,342) 
                                    -------          -------          -------          --------       -------- 
   Net realized gains (losses)      (49,539)         (13,610)         (13,432)          (61,807)       (24,037) 
                                    -------          -------          -------          --------       -------- 
(Provision) benefit for taxes 
 on realized and unrealized 
 gains (losses)                        (252)            (303)            (269)             (574)          (394) 
                                    -------          -------          -------          --------       -------- 
Net realized and unrealized 
 gains (losses), net of taxes        (1,581)         (53,251)           4,871           (85,927)      (107,496) 
                                    -------          -------          -------          --------       -------- 
Net increase (decrease) in net 
 assets resulting from 
 operations                      $   30,940       $  (18,889)      $   38,352       $    17,659    $     9,342 
                                    =======          =======          =======          ========       ======== 
Net investment income per 
 common share -- basic and 
 diluted                         $     0.37       $     0.39       $     0.38       $      1.18    $      1.37 
Earnings (loss) per common 
 share -- basic and diluted      $     0.35       $    (0.21)      $     0.44       $      0.20    $      0.11 
Weighted average common shares 
 outstanding -- basic and 
 diluted                             88,086           88,086           88,086            88,086         85,402 
 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260805644029/en/

 
    CONTACT:    Investor Relations: 

Oaktree Specialty Lending Corporation

Alison Mermey

(213) 830-6946

ocsl-ir@oaktreecapital.com

Media Relations:

Financial Profiles, Inc.

Moira Conlon

(310) 478-2700

mediainquiries@oaktreecapital.com

 
 

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10