Oxford Square Capital Corp (OXSQ) delivered a constructive Q2 2024 despite a modestly weaker U.S. leveraged loan backdrop. Net investment income (NII) was about $7.7 million, or $0.13 per share, and total investment income was approximately $11.4 million for the quarter, up from the prior quarter. The company also reported a stable net asset value per share (NAV) of $2.43, essentially flat vs. the prior quarter, and declared a quarterly distribution of $0.105 per share. Unrealized and realized losses on investments totaled roughly $2.5 million, or $0.04 per share, versus $8.3 million in the prior quarter, signaling a softer but controlled mark-to-market dynamic.
From a deployments and capital-raises perspective, Oxford Square executed purchases of about $28.8 million, sales of $3.4 million, and repayments of $15.8 million. The quarter featured a robust ATM program, issuing approximately 2.9 million shares for net proceeds near $8.9 million, underscoring the manager’s flexibility to fund distributions and deployment. In August, the Board declared monthly distributions of $0.035 per share for the months ending November, October and December 2024, signaling a disciplined distribution policy in a volatile environment.
On the macro side, management observed a modest deterioration in the U.S. loan market during the quarter: Morningstar LSTA U.S. Leveraged Loan Index moved from 96.69% to 96.54% of par, with dispersion across ratings and a distress ratio near 4.42%. Primary market issuance remained robust (about $145 billion in the quarter, up 204% YoY), while loan fund inflows totaled approximately $4.6 billion. Management framed Oxford Square as a permanent capital vehicle with a long-term investment horizon, emphasizing portfolio management aimed at maximizing long-run total return. Net income for the quarter was $5.26 million, or $0.0867 per share, down sharply YoY but showing a strong sequential rebound in earnings per share (EPS) versus the prior quarter. Cash flow remained positive, with operating cash flow of roughly $6.37 million and a solid liquidity position (cash at period-end of about $30.0 million). Overall, the report presents a stable, cash-generative BDC with controlled downside risk in a softer credit environment and an active capital deployment engine to support distributions and NAV stability.