Just noticed a filing by CLO owner OFS Credit Company (OCCI) today announcing their sales of common shares through a standing ‘at the market’ share sales program. Of course OFS credit is one of a number of companies dedicated to investing in CLO’s (collateralized loan obligations).
These ‘at the market’ programs are a staple for the CLO owning companies. They continually sell common shares, through a plan which is filed with the SEC prior to any share sales. In the case of OFS Credit they started with a plan to sell up to $25 million in shares on 1/24.2020 which has now been amended a number of times to now stand at $70 million. On one hand folks may refer to this as a ‘Ponzi’ scheme as they sell more shares and pay huge dividends–on the other hand it is publicly known and it is completely legal.
Since the start of the ‘at the market’ program on 1/24/2020 the company has sold about 2.5 million shares for proceeds of about $36 million.
I hold a position in one of the company’s term preferred issues–and these ‘at the market’ programs are music to my ears. The company has to maintain a 200% asset coverage of their senior securities (preferreds) so the more common shares they sell the happier I am as it builds safety for senior security holders.
As of 4/30/2022 the company had a coverage ratio of 261%.