Oxford Square Capital Corp (OXSQ) reported a challenging QQ1 2025 with a sharp NAV per share decline and material losses from investment activity, set against a backdrop of a softer US leveraged loan market. The quarter ended March 31, 2025 showed net investment income (NII) of approximately $6.1 million ($0.09 per share), while total investment income was about $10.2 million. Management acknowledged market softness in leveraged loans and executed active portfolio management, including purchases of roughly $16 million and sales of about $10.7 million, with net repayments of ~$8.7 million. The company issued ~1.3 million shares via an aftermarket offering, generating net proceeds of about $3.5 million, and the Board declared monthly distributions of $0.035 per share for July–September 2025, indicating continued use of a persistent distribution policy despite near-term earnings volatility.
NAV per share decreased to $2.09 from $2.30 in the prior quarter, underscoring a material compression in reported book value during a period of weaker loan pricing and elevated losses on investments (unrealized and realized) of about $14.2 million or $0.20 per share in QQ1 2025. As a permanent capital vehicle, OXSQ emphasizes a longer-term investment horizon despite quarterly volatility, aiming to maximize long-run total return through disciplined credit selection and active liquidity management. On the liquidity and cash-flow front, operating cash flow was $4.93 million for QQ1 2025 with free cash flow near $4.93 million, and year-to-date dividend commitments remain consistent with a ~5% targeted cash yield relative to reported metrics, though near-term cash-flow coverage should be monitored given the negative net income and cross-quarter earnings dynamics.