Oxford Lane Capital Corp to Sell New Term Preferred

CLO owner Oxford Lane Capital (OXLC) has announced a new offering of term preferred stock.

Term preferreds are sold with a mandatory redemption date–in this case it will be in 2027.

This issue will be cumulative, pay monthly dividends and will be non-qualified.

The permanent ticker on this will be OXLCP when it finally trades on the permanent exchange (NASDAQ).

OXLC currently has 2 other term preferreds outstanding which can be seen here. NOTE that the company MAY redeem part of the 2023 term preferred (OXLCO) 7.50% issue per the prospectus. These shares are currently redeemable–they closed at $25.66 today so it is likely someone is going to get a bit of a spanking tomorrow (actually the shares are already off 23 cents in after hours trading).

These will trade OTC Grey market but the ticker has not been announced.

The preliminary prospectus for the new issue is here.

I always try to beat mcg to the punch with these new issues, but he/she is quick on the draw and beat me by 16 minutes today–under Reader Initiated Alerts.

17 thoughts on “Oxford Lane Capital Corp to Sell New Term Preferred”

  1. Just as a heads up; I just initiated a position in Grey Sheet Oxford IPO OXCPP at Vanguard at $24.79. This term preferred has traded 474, 550 shares today…
    Wishing you profitable investing, Nomad

  2. At yesterday’s closing prices, and assuming the new issues comes out at 25.00, OXLCM is clearly superior at 6.625% stripped yield versus 6.25% on the new issue. OXLCM is callable in 4 months but OXLC would call all of OXLCO before they would touch OXLCM.

    I am not a buyer of the new issue unless it trades way under 25. OXCPP is temp ticker. Already trading institutional quantities at 24.67.

    1. I like OXLCO at 25.17 it may be called or partially called but it has at least one more 16c dividend.

  3. GREENWICH, Conn., Feb. 06, 2020 (GLOBE NEWSWIRE) — Oxford Lane Capital Corp. (the “Company”) (Nasdaq GS: OXLC, OXLCO and OXLCM) today announced that it has priced an underwritten public offering of 3,500,000 shares of its newly designated 6.25% Series 2027 Term Preferred Shares (the “Preferred Stock”) at a public offering price of $25 per share, raising $87.5 million in gross proceeds. The Company has also granted the underwriters a 30-day option to purchase up to 525,000 additional shares of Preferred Stock on the same terms and conditions to cover over-allotments, if any. The closing of the transaction is subject to customary closing conditions and the shares are expected to be delivered on February 11, 2020. The Company has applied to list the Preferred Stock on the NASDAQ Global Select Market and expects trading to commence thereon within 30 days after February 11, 2020 under the symbol “OXLCP.”
    https://www.marketscreener.com/OXFORD-LANE-CAPITAL-CORP-7231756/news/Oxford-Lane-Capital-Corp-Prices-Preferred-Stock-Offering-29951685/

  4. Headline: Oxford Lane Capital Corp. Prices Preferred Stock Offering

    Date: 02-06-2020

    For a complete listing of our press releases, please click here

    GREENWICH, Conn., Feb. 06, 2020 (GLOBE NEWSWIRE) — Oxford Lane Capital Corp. (the “Company”) (Nasdaq GS: OXLC, OXLCO and OXLCM) today announced that it has priced an underwritten public offering of 3,500,000 shares of its newly designated 6.25% Series 2027 Term Preferred Shares (the “Preferred Stock”) at a public offering price of $25 per share, raising $87.5 million in gross proceeds. The Company has also granted the underwriters a 30-day option to purchase up to 525,000 additional shares of Preferred Stock on the same terms and conditions to cover over-allotments, if any. The closing of the transaction is subject to customary closing conditions and the shares are expected to be delivered on February 11, 2020. The Company has applied to list the Preferred Stock on the NASDAQ Global Select Market and expects trading to commence thereon within 30 days after February 11, 2020 under the symbol “OXLCP.”

    Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS), and BB&T Capital Markets, a division of BB&T Securities, LLC, are acting as the joint book-running managers for the offering. Incapital LLC, William Blair & Company L.L.C., National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (NASDAQ:NHLD) and Wedbush Securities Inc. are acting as the lead managers for the offering.

    The Company intends to use the net proceeds from this offering for acquiring investments in accordance with the Company’s investment objective and strategies, general working capital purposes and/or to redeem a portion of its outstanding 7.50% Series 2023 Term Preferred Shares. As of February 3, 2020, the Company had approximately $90.4 million in aggregate principal value outstanding of its Series 2023 Term Preferred Shares.

    This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities in this offering or any other securities nor will there be any sale of these securities or any other securities referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.

    The Preferred Stock will be offered and sold pursuant to the Company’s shelf registration statement relating to such securities on file with and declared effective by the Securities and Exchange Commission. The offering of the Preferred Stock may be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained, when available, from Ladenburg Thalmann, Attn: Syndicate Department, 277 Park Ave, 26th Floor, New York, NY 10172, or by emailing prospectus@ladenburg.com (telephone number 1-800-573-2541); or BB&T Capital Markets, a division of BB&T Securities, LLC, at 901 East Byrd Street, 3rd Floor, Richmond, VA 23219 Attn: Syndicate Dept. or via email request: prospectusrequests@bbandtcm.com. Investors are advised to carefully consider the investment objectives, risks and charges and expenses of the Company before investing. The preliminary prospectus supplement, dated February 4, 2020, and accompanying prospectus, dated July 19, 2019, each of which has been filed with the Securities and Exchange Commission, contain a description of these matters and other important information about the Company and should be read carefully before investing.

    About Oxford Lane Capital Corp.

    Oxford Lane Capital Corp. is a publicly-traded registered closed-end management investment company. It currently seeks to achieve its investment objective of maximizing risk-adjusted total return by investing in debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

  5. The size of the new issue is unknown. The company’s last issue was $68 million (face) 2 years ago. There are $90 million of OXLCO outstanding.

    A full redemption is most unlikley. I would be betting on a relatively small redemption, perhaps 20-40%. OXLC’s manager is compensated largely based on AUM. The incentive is to grow AUM more than reduce costs. If this were an internally managed entity I could see a full redemption of OXLCO.

    So, I took the bet, buying shares of OXLCO at 25.23 this morning. I am risking 7 cents per share (I take next divi as a given) in the hope that once the redemption percentage is announced the price of the unsegregated shares will rebound.

    Time will tell.

    1. I followed you Bob @25.21. I’m following the pattern from VER/F.

    2. “I would be betting on a relatively small redemption, perhaps 20-40%. ”

      That’s a very good guess Bob…as they marked 34% of my OXLCO shares for redemption.

      1. Citadel – I got the same 34% approx marked, but interestingly, it was 34% of only the shares purchased prior to the 2/11 announcement date. I bot additional shares on 2/12 which I think is before x-div date but after the announcement date and they apparently were not segregated in any way. That’s the only way I can make the math work appropriately for the amount of shares that Fidelity has set aside as called vs percent of outstanding announced as being called.. If that’s right and nothing changes then I got a bonus of not having as many called as I expected to have and I’ve captured the dividend as well..

        1. 2WR… OXLCO was not on my radar for a call, so I’m grateful its only 34% at this time. Most likely I’ll switch over to OXLCM to avoid the call risk down the road.

  6. I own OXLCO and I’m thinking I may have two options tomorrow, considering it is possible there will be a partial call. If it opens only around 20 cents lower I would be inclined to sell, but if it gets slammed a lot, down to say 25.20, I may by more inclined to buy more and hope it rebounds a la VER.F after it’s partial call.

  7. I’m interested, but it’ll be a smaller position. While CLO equity valuations are suspect, the CEF capital requirements give me enough comfort to hold some.

    1. mrinprophet–I’m with you–except I don’t want to be in a soft economy while messing with these.

      1. agree, potential opportunity but too high risk if economy gets weak.

  8. Hmmm…I wonder if there will be a swap opportunity from the PRIF preferreds. Also have to think about which is the better credit risk — PRIF or OXLC preferreds. With high risk CLO preferreds, I think you always want to be defensively positioned.

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