OFS Capital Corporation Reports Decline in Investment Income and Net Asset Value

OFS Capital Corporation reported a decline in total investment income for the three months ended September 30, 2024, amounting to $10.9 million, down from $14.7 million in the same period of 2023. The decrease was primarily attributed to a reduction in interest income, which fell to $10.6 million from $14.1 million year-over-year. For the nine months ended September 30, 2024, total investment income was $36.3 million, compared to $43.5 million in the prior year. The company’s net investment income for the third quarter was $3.6 million, down from $5.4 million in the previous year, while net realized losses on investments totaled $14.6 million for the nine-month period, compared to $10.2 million in 2023.

As of September 30, 2024, OFS Capital's total assets were reported at $418.5 million, a decrease from $469.8 million at the end of 2023. Total liabilities also decreased to $267.2 million from $307.8 million. The company’s net asset value per share fell to $11.29 from $12.09 at the end of the previous fiscal year. The total accumulated losses increased to $(33.7 million) from $(22.9 million) at the end of 2023.

The company’s investment portfolio included various first and second lien debt instruments, with total investments at fair value of $394.7 million as of September 30, 2024, down from $420.3 million at the end of 2023. The fair value of non-control/non-affiliate investments was $308.9 million, while affiliate investments totaled $11.2 million. The company reported that 91% of its loan portfolio consisted of variable-rate investments, primarily indexed to SOFR.

OFS Capital's strategic developments included the full repayment of its outstanding SBA debentures in March 2024 and the surrender of its SBIC license in April 2024. The company also maintained a stock repurchase program, which was extended for an additional two years, allowing for the repurchase of up to $10 million of its common stock. However, no shares were repurchased during the nine months ended September 30, 2024.

The company’s cash and cash equivalents stood at $20.3 million as of September 30, 2024, a decrease from $45.3 million at the end of 2023. Unused commitments under its credit facilities amounted to $25 million under the Banc of California Credit Facility and $80.9 million under the BNP Facility. The asset coverage ratio was reported at 161%, exceeding the minimum requirement of 150% under the 1940 Act.