Updated Data for Oxford Lane Capital

Just a couple updated items for Oxford Lane Capital (OXLC).

The leverage ratio for the company is claimed to now be 300% by the company as of 9/30/2019.

The number of shares outstanding of the OXLCO 7.50% issue was 3.6 million as of 9/30/2019. This issue was originally 800,000 shares with 120,000 over allotment—They have sold millions of shares since the offering in 2013. OXLC is the king of ‘at the market’ selling–both common shares and preferreds.

Data below is from the offering prospectus of the new issue.

18 thoughts on “Updated Data for Oxford Lane Capital”

  1. Hi .. Tim knowledge of preferred and baby bonds , are clear, what are these Trust Preferred [ TP ] all about , ?? lower or better grade?

    1. Georges–higher quality than regular preferreds–A trust is formed by the issuing company, the trust sells preferred stock and with the proceeds buy subordinated debt from the company. The trust preferred dividend payments are non qualified as they are treated more like a debt payment. Because the trust owns debt of the company they are higher quality than the regular preferred. Of course there are exceptions to the above.

  2. There is also EIC, which is somewhere in between the commons and preferreds in terms of risk.

    1. Also Oxford Square Capital (OXSQ) which I know nothing about, but they are a CLO owner.

  3. I just went to the companys website and did some reading on what they actually do. I have never heard of this company and I’ve been investing in fixed income for decades. Let me ask you seasoned veterans what happens if we fall into a nasty recession??? Will this company be able to withstand the many defaults that they will most likely be hit with??? I guess the reason I have always stayed away from companies like this is because of what could happen in bad times. Most of my fixed income is with Super Blue Chip Bonds from companies that I have owned for many years (I always buy the 30 year) if they offer one. Anyway, I guess I’m just concerned about all these what I call No Name Companies coming out with their paper.

    1. ChuckP–I have owned it off and on for years–just the preferreds. I wouldn’t want to be within 100 miles of the shares in a deep recession–common or preferreds. There are a number of similar companies to Oxford Lane that I have held the preferreds in and I would NOT want to hold them in a recession either.

    2. This isn’t a company. It’s a closed end fund. There is a company that manages the fund but it’s not the company backing the preferreds. The fund is backing the preferreds. Think of these preferreds like a loan that is secured by an asset (like a mortgage loan). There are some key differences but these preferreds have more in common with secured loans than traditional preferreds from operating companies.

      Tim, thanks for the update on asset coverage data. 300% is actually quite good and completely changes my perspective on this. I’d say this level of coverage is on par with PRIF (PRIF’s coverage is higher but their valuation accounting is more aggressive).

      1. Landlord–you’re welcome. I don’t trust any of these specialty finance companies (CLO holders) with there level 3 values–but I wouldn’t sweat it as long as we have a growing economy.

    3. Oxford Lane and Eagle Point Credit are both public companies owning CLOs. They are pure plays. Individuals can’t buy CLOs on their own so ECC and OXLC are the way to play them. Neither is a household name but they are well known in the financial community.

      They are not widow and orphan stocks. I own both ECC and OXLC in small doses. Mostly preferred but some ECC common as well. I wouldn’t touch OXLC common.

        1. David, that is the huge risk differential. The top rated debt tranches can be quite safe, and the equity tranches are the very riskiest. CLO investments carry a very wide range of risks embedded. Merely avoiding CLOs as “risky” could overlook potential value (theoretically, since I have done no work analyzing the actual holdings of any of the CLO players).

    4. I went in sec. Gov pararraph 4
      I went through every CLO loan most of their loans are under although there interest is high on there portfolios loans the principal are low
      Im very careful when I buy this stock just for the divedend. Then I sell the position. It’s a job so happy trading

    5. Well, it looks like many folks are believe what there will be no cyclical downturns anymore. Maybe they arr right but personally I don’t trust so much in these millennials’s optimistic theories, this is why I’m pretty happy with my cash and conservative utes prefs portfolio.
      IMO if someone want to take a risk, then it is better to buy some already depreciated company (something like CBL, PEI, CHK etc.). At least there will be a completely different risk/reward ratio and it is already known what are you will really dealing with.

      1. Many eREIT apparently had disappointing revenue. However, the Preferreds do not follow, e.g. MNR common vs MNR-C (one of my favorite, despite Portnoy boy relative ill repute) Yield is important. One of the closed end eREIT international (still have quite a few non Mall US names) I bought at the worst possible time when I subscribed to Rida et. al. I held on and then notice that it started to whisper green shoots. AWP, apparently it was acquired by Aberdeen. Aberdeen global The top 27% holding seems to have names unlikely to fail. I stopped subscribing to Premier service of Morningstar. Not sure if MorningStar would give me more portfolio composition. Dividend Channel suggests pro form dividend (paid monthly) 7.14%. It has been climbing for the last few days.
        AWP does have gross expense ratio of 1.37% but presumably with a decent probably around 8.5% (Fido data was as of 1/20/2020 when I tried to interpolate from FIDO Active Trader PRO
        The problem with Mall preferreds, which I held for a long time is : Short Sellers. Ditto to Glop (stopped now with dividend cut by 75%). GMLP continue to suffer despite a PRO SA writer Marel (this person loves Mall). GLNG continue to bleed (a little less drastic). Marel (a CPA) claimed the dividends are covered. A SA article for PRO subscription only (I just read the headline teaser) Then it was before the Norovirus, which does affect the shippers.

        1. GMLLP up almost 2% despite continuing bleeding of GMLP [a little less than 6% down but above today’s low] and GLNG (mother co. or British company Partnership with pro forma dividend around 5+%.) These short sellers.

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