Oaktree Lending (OCSL) Q2 2026 Earnings Transcript

Image source: The Motley Fool.

DATE

Tuesday, May 5, 2026 astatine 11 a.m. ET

Call participants

• President and Chief Operating Officer — Mathew Pendo

• Chief Executive Officer and Co-Chief Investment Officer — Armen Panossian

• Co-Chief Investment Officer — Raghav Khanna

• Chief Financial Officer and Treasurer — Christopher McKown

• Head of Investor Relations — Alison Friedman Mermey

Need a punctuation from a Motley Fool analyst? Email [email protected]

Full Conference Call Transcript

Mathew Pendo: Thank you, Alison, and bully morning, everyone. I volition statesman with an overview of our 2nd 4th fiscal 2026 results, aft which Armen Panossian, our CEO and Co-Chief Investment Officer, volition stock his position connected the marketplace environment. Raghav Khanna, our Co-Chief Investment Officer, volition past screen portfolio activity; and Chris McKown, our CFO and Treasurer, volition adjacent with a reappraisal of our fiscal results earlier we unfastened the telephone for questions. Despite outer sound astir backstage recognition and BDCs, our squad remained focused connected reducing nonaccruals and positioning our equilibrium expanse for flexibility.

As of March 31, 2026, nonaccruals were 2.6% of the full indebtedness portfolio measured astatine just value, down from 3.1% past 4th and 4.6% 1 twelvemonth ago. As an update station quarter, successful April, we sold 2 bequest nonaccrual positions, Dominion Diagnostics and All Web Leads. We expect to marque further advancement reducing nonaccruals and realizing currency proceeds that we tin deploy into performing assets implicit the coming months. Managing our equilibrium expanse is simply a precocious precedence arsenic we presumption OCSL for a much charismatic concern environment.

During the quarter, we sold a information of our liquid recognition positions astatine cost, a strategical determination to physique adust powder, support leverage beneath the midpoint of our people scope and rotate retired of lower-yielding nationalist credit. We ended the 2nd 4th with disposable liquidity of $671 million, up $100 cardinal from past 4th and nett leverage of 1.04x, down from 1.07x past quarter. Turning to fiscal highlights. Net plus worth per stock was $15.69 arsenic of March 31, 2026, compared to $16.30 arsenic of December 31, 2025. The diminution was driven chiefly by unrealized mark-to-market write-downs of bundle loans during the quarter.

The just worth of our performing bundle loans declined by astir 310 ground points, mostly accordant with movements successful broadly syndicated bundle loans. Importantly, we judge that these markdowns mostly are not indications of deteriorating fundamentals successful the underlying portfolio companies, but alternatively reflecting the repricing of hazard successful the broader markets. Adjusted nett concern income for the 4th was $33.7 cardinal oregon $0.38 per stock arsenic compared with $36.1 cardinal oregon $0.41 per stock successful the anterior quarter. The alteration reflected little notation rates, little nonrecurring income and ending leverage beneath the midpoint of our people range. For the quarter, our Board declared a full currency dividend of $0.34 per share.