We hope this letter finds you safe and in good health. We understand that these are challenging and unprecedented times, and we wish to extend our sincere thoughts to those impacted by the COVID-19 virus. We want to assure you that
Investment Portfolio Positioning
Since Oaktree became investment adviser to OCSI in late 2017, its emphasis has been on defensively positioning the portfolio by maintaining diversity across issuers and borrowers, focusing on first lien senior secured loans and lending to larger, more diversified businesses. To that end, as of
With respect to industry exposures, we have been lending to businesses that we believe operate in more defensive, less cyclical or structurally growing industries. As of
While the market continues to evolve and it is difficult to determine the impact that COVID-19 will have, we and Oaktree are committed to proactively managing risks and situations that may arise in our portfolio.
Balance Sheet and Liquidity
We entered this environment in a strong financial position with relatively low leverage and sufficient liquidity. As of
|($ in millions)||Committed||Outstanding||Interest Rate||Maturity|
|Cash and Cash Equivalents||$||-||$||(10||)||-||-|
|Deutsche Bank Facility2||250||$||164||LIBOR + 2.10%|
|Citibank Revolving Credit Facility||180||126||LIBOR + 1.70% / 2.25%3|
|East West Bank Facility||25||16||LIBOR + 2.85%|
Oaktree believes market dislocations present interesting opportunities for us to invest. Given our current leverage position and available liquidity, Oaktree believes we are well-positioned to manage the potential needs of our existing portfolio companies and to deploy capital in this environment. Importantly, due to our exemptive relief order with the
Oaktree’s Significant Experience in Managing Through Distressed Credit Markets
OCSI benefits from the significant resources provided to us by Oaktree, a leading global alternative investment management firm with expertise in below investment grade credit. As of
We understand and appreciate that these are difficult times for all, and we want you to know that we and Oaktree remain unequivocally focused and committed to proactively managing OCSI’s investment portfolio on behalf of all of our constituents. We believe we are well-positioned today and look forward to speaking with you about OCSI as this situation evolves.
Chief Executive Officer and
Chief Investment Officer
Chief Operating Officer
1 Excludes unfunded commitments to
2 Facility was amended on
3 Actual availability is subject to market conditions and may differ materially from this amount.
Some of the statements in this press release constitute forward-looking statements because they relate to future events or OCSI’s future performance or financial condition. The forward-looking statements may include statements as to: OCSI’s future operating results and distribution projections; OCSI’s business prospects and the prospects of its portfolio companies; and the impact of the investments that OCSI 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. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in OCSI’s annual report on Form 10-K and its quarterly reports on Form 10-Q. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment; risks associated with possible disruption in OCSI’s operations or the economy generally due to terrorism, natural disasters or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in OCSI’s operating areas, particularly with respect to business development companies or regulated investment companies; general considerations associated with the COVID-19 pandemic; and other considerations that may be disclosed from time to time in OCSI’s publicly disseminated documents and filings.
OCSI has based the forward-looking statements included in this press release on information available on the date of this press release and assumes no obligation to update any such forward-looking statements. Although OCSI 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 OCSI may make directly to you or through reports that it in the future may file with the
Oaktree Specialty Lending Corporation
Source: Oaktree Strategic Income Corporation