Oxford Lane Capital Corp.

Morning and thank you all for attending the Oxford Lane Capital Court announces net asset value and selected financial results for the first fiscal quarter and declaration of distributions on common stock. My name is Brieca and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your hosts. Jonathan Collins, CEO at Oxford Lane Capital Corp. Thank you. You may proceed, Jonathan.

Thank you. Good morning, everyone, and welcome to the Oxford Lane Capital Corp. first fiscal quarter 2026 earnings conference call. I'm joined today by Bruce Rubin, our Chief Financial Officer, and Joe Kupka, our Managing Director. Bruce, could you open the call today with a disclosure regarding forward-looking statements? Sure, Jonathan. Sure. Today's call is being recorded. An audio replay of the call will be available for 30 days. Replay information is included in our press release as issued earlier this morning. Please note that this call is the property of Oxford Lane Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure of this morning's press release regarding forward-looking information. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to our most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward-looking statements unless required to do so by law. During this call, we will use terms defined in the earnings release and also refer to non-GAAP measures. For definitions and reconciliations to GAAP, please refer to our earnings release posted this morning at www.oxfordwaycapital.com. With that, I'll turn the presentation back to Jonathan. Thanks, Chris. On June 30th, 2025, our net asset value per share stood at $4.12 compared to a net asset value per share of $4.32 as of the previous quarter. For the quarter ended June, we recorded GAAP total investment income of approximately $124 million, representing an increase of approximately $2.8 million from the prior quarter. The quarter's GAAP total investment income consisted of approximately $117.4 million from our CLO equity and CLO warehouse investments, and approximately $6.6 million from our CLO debt investments, and from other income. Oxford Lane recorded GAAP's net investment income of approximately $75.1 million or 16 cents per share for the quarter ended June 30th compared to approximately $75.4 million or 18 cents per share for the quarter ended March 31st. Our core net investment income was approximately $112.4 million or $0.24 per share for the quarter ended June, compared with approximately $95.8 million or $0.23 per share for the quarter ended March. As of June 30th, we held approximately $701.5 million in newly issued or newly acquired CLO equity investments that had not yet made their initial distributions to Oxford Lane. For the quarter end of June, we recorded net unrealized depreciation on investments of approximately $40.2 million and net realized losses of approximately $8.8 million. We had a net increase in net assets resulting from operations of approximately $26.1 million, or six cents per share, for the first fiscal quarter. As of June 30th, we note that the following metrics applied. We also note that none of these metrics necessarily represented a total return to shareholders. The weighted average yield of our CLO debt investments at current cost was 16.9%, up from 15.9% as of March 31st. The weighted average effective yield of our CLO equity investments at current cost was 14.7%, down from 15.9% as of March 31st. the weighted average cash distribution yield of our CLO equity investments at current costs was 21.6%, up from 20.5% as of March 31st. You notice that the cash distribution yields calculated on our CLO equity investments are based on the cash distributions we received, or which we were entitled to receive, at each respective period end. During the quarter end of June, we issued a total of approximately 25.8 million shares of our common stock, pursuant to an out-of-market offering, resulting in net proceeds of approximately $116.4 million. During the quarter end of June, we made additional CLO investments of approximately $441.8 million, and we received approximately $120.7 million from sales and from repayment. On July 22nd, our Board of Directors authorized a one-for-five reverse stock set and declared monthly common stock distributions of $0.08 per share for each of the months in October, November, and December of 2025. With that, I'll turn the call over to our Managing Director, Chair Kafka.

Thanks, Jonathan. During the quarter ended June 30th, 2025, U.S. loan market performance improved versus the prior quarter. U.S. loan price index increased from 96.31% as of March 31st to 97.07% as of June 30th. The increase in U.S. loan prices led to an approximate six-point increase in median U.S. CLO equity net asset values. Additionally, we observed medium-weighted average spreads across loan pools within CLO portfolios decreased to 327 basis points compared to 330 basis points last quarter. The 12-month down default rate for the loan index increased for 1.1% by principal amount at the end of the quarter from 0.82% at the end of March. We note that out-of-court restructuring, exchanges, and subpar buybacks, which are not captured in the site of default rate, remain elevated. CLO new issuance for the quarter totaled approximately $51 billion, reflecting an approximate $3 billion increase from the prior quarter, keeping pace with the first half of 2024, a record-breaking year. Additionally, the U.S. CLO market saw approximately $53 billion in reset and refinancing activity in Q2 2025, compared to approximately $105 billion in the previous quarter. Oxford Lane remained active this quarter, investing over $441 million in CLO equity debt and warehouses, while participating in opportunity-specific resets and refinances. As a function of our overall activity during the quarter, we were able to lengthen the wage average reinvestment period of Oxford Maine CLO equity portfolio from November 2028 to January 2029. Our primary investment strategy during the quarter was to engage in relative value trading and seek to lengthen the weighted average green investment period of Oxford Maine CLO equity portfolio. In the current market environment, we intend to continue to utilize our opportunistic and unconstrained CLO investment strategy across U.S. CLO equity debt and warehouses as we look to maximize our long-term total returns. And as a permanent capital vehicle, we've historically been able to take a longer-term view towards our investment strategy. With that, I'll turn the call back over to Jonathan.