Oaktree Specialty Lending Corporation

Welcome, and thank you for joining Oak Tree Specialty Lending of Corporation's first fiscal quarter and full year 2025 conference call. Today's conference call is being recorded. I'll now turn the call to Clark Curry, OCSL's Head of Investor Relations.

Thank you, Operator. Our fourth quarter and full year 2025 earnings release, which we issued this morning, along with the accompanying slide presentation, can be accessed on the Investors section of our website, oaktreespecialtylending.com. Before we begin, I want to remind you that the comments on today's call include forward-looking statements reflecting current views with respect to, among other things, future operating results and financial performance. Actual results could differ materially from those implied or expressed in the forward-looking statements. Please refer to the relevant SEC filings for a discussion of these factors in further detail. Oaktree undertakes no duty to update or revise any forward-looking statements. I'd also like to remind you that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any interest in an Oak Tree Fund. Investors and others should note that OCSL uses the investor section of its corporate website to announce material information. The company encourages investors, the media, and others to review information that it shares on its website. Now, I will turn the call over to Matt Pendo, President of OCSL. Matt.

Thank you, Clark, and thank you all for joining our call today. I'll begin the call with an overview of our results for the fiscal year and fourth quarter. Armin Pinozian, our CEO and co-CIO, will then share commentary on the current market environment. And Raghav Khanna, our co-CIO, will provide details on our portfolio and investment activity. Chris McCown, our CFO and treasurer, will then review our financial results before we open the call for questions. The fourth quarter and second half of fiscal 2025 reflected steady improvement for OCSL, even as the macro environment remained choppy. As we will discuss in more detail, our team worked hard to turn around non-income producing positions, find interesting investment opportunities, and reduce our cost of capital. In the fourth quarter, we achieved adjusted net investment income of 40 cents per share up from 37 cents in the prior quarter. This sequential improvement reflects the return to more normalized prepayment fees, higher dividend income, and lower interest expense from our refinancings earlier this year, and lower base rates. Additionally, we continue to make progress reducing our non-accruals, a key strategic focus. At year end, non-accruals were 2.8% of the portfolio measured at fair value, down 20 basis points from the third quarter, and down 100 basis points from last year. Last week, the Board approved a dividend of 40 cents per share for the quarter, consistent with our dividend policy and fourth quarter earnings. While the Federal Reserve September rate cut did not affect fourth quarter earnings, lower base rates will impact net investment income in the December quarter. As we've said before, we have several levers at both the corporate and JV levels. to help offset lower base rates and support net investment income. First, we can prudently increase balance sheet leverage to enhance earnings power and deploy capital into interesting investment opportunities. Our balance sheet is conservatively levered at 0.97 times and provides us with ample financial flexibility. Second, we can continue to optimize our JVs. Finally, reducing non-accruals and equity positions will improve our earnings power. We have line of sight into, one, putting a portion of our previously non-accruing loans onto accrual status, two, monetizing a portion of our non-accruals, and three, monetizing equity positions. Any proceeds we receive from realizations of non-accruals and equity will be reinvested into income generating assets. On an ongoing basis, we will continue to evaluate these levers and their potential contributions to earnings and our dividend. Now I will pass the call over to Armen for an update on the market environment.