Oxford Lane Capital Posts Quarterly Presentation

Oxford Lane Capital (OXLC) has posted their investor presentation for the quarter ending 9/30/2019.

Quite honestly the numbers look pretty shi… This CLO holder is destroying capital fairly quickly through their holdings of CLO equity. Collateralized loan obligations (CLOs) are not necessarily high risk, but the CLO equity positions are the highest risk of the CLO positions–generally earning returns only after the senior positions are paid.

OXLC holds mainly CLO equity positions which are the highest risk tranche of the CLO. NOTE the company’s net asset value has fallen 30% in the last year to $6.63/share–while their common shares trade at a huge premium to net asset value–$9.50/share right now. Seems like the common shares should get hammered down any time now.

OXLC has 2 issues of Term Preferreds outstanding which have traded well. You can see them here. These are protected by the leverage rule which requires 200% coverage of senior securities–and darned good thing or these would be crashing.

Some readers have noted how they have moved out of OXLC securities.

The presentation can be seen here.

While we have held OXLC term preferreds in the past we haven’t in recent times.

6 thoughts on “Oxford Lane Capital Posts Quarterly Presentation”

  1. Any thoughts on read through to PRIF? Honestly, I don’t even know what tranche of CLOS PRIF is invested in but so far they’ve managed to avoid big drops in NAV. However, I wonder if they could be next. I’m kind of assuming PRIF NAV should be about as stable as PSEC NAV but really don’t know how similar their investments are.

    1. Landlord–I am going to do a deeper dive into the main CLO players that most income investors are interested in–Eagle Point, Oxford Lane and Priority this week. Even though they get little respect Priority NAV has done much better than the other 2.

    1. Ron–was just reading a bloomberg article comparing the CDOs from that time to the CLOs that are currently being issued–will post later today.

        1. Thanks Bea–that is the article I planned to highlight momentarily–I had read it earlier. These issues are likely fine with an expanding economy and everyone chasing yield–but come recession time-watch out below!!

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