Oaktree Strategic Income Corporation (NASDAQ:OCSI) Q1 2019 Earnings Conference Call Transcript

Feb 07, 2019 • 12:30 pm ET


Oaktree Strategic Income Corporation (NASDAQ:OCSI) Q1 2019 Earnings Conference Call Transcript


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Welcome and thank you for joining Oaktree Strategic Income Corporation's Fiscal First Quarter Conference Call. Today's conference call is being recorded. At this time, all participants are in a listen-only mode, but will be prompted for a question-and-answer session following the prepared remarks.

Now I would like to introduce Michael Mosticchio of Investor Relations, who will host today's conference call. Mr. Mosticchio, you may begin.

Michael Mosticchio

Thank you, operator and welcome to all of you who have joined us for today's call to discuss Oaktree Strategic Income Corporation's 2019 fiscal first quarter financial results. Our earnings release, which we issued this morning and the slide presentation that accompanies this call can be accessed on the Investor section of our website at oaktreestrategicincome.com. With us today are Edgar Lee, Oaktree Strategic Income's Chief Executive Officer and Chief Investment Officer, Mel Carlisle, Chief Financial Officer and Treasurer and Matt Pendo, Chief Operating Officer. Following their prepared remarks, we will be happy to take your questions.

Before we begin, I want to remind you that our comments today will include forward-looking statements reflecting our current views with respect to, among other things our future operating results and financial performance. Actual results could differ materially from those implied or expressed in the forward-looking statements. Please refer to our SEC filings for a discussion of these factors. We undertake no duty to update or revise any forward-looking statements. I'd also like to remind you that nothing on this call constitutes an offer to sell or solicitation of an offer to purchase any interest in any Oaktree fund. Investors and others should note that Oaktree Strategic Income uses the Investor section of its corporate website to announce material information. The company encourages investors, the media and others to review the information that it shares on its corporate website.

With that I will now turn the call over to Edgar Lee.

Edgar Lee

Thank you, Mike, and welcome everyone to our first quarter earnings conference call. We appreciate your continued interest and support. OCSI produced solid earnings in the quarter, reporting net investment income per share of $0.17, as we continue to defensively position the portfolio for improved performance and attractive risk-adjusted returns for our shareholders. In addition, we further reduced the overall risk in the portfolio, exiting approximately $11 million of non-core investments during the quarter, bringing our total non-core positions to less than 10% of the portfolio. We originated $93 million of new investments in the first quarter and first lien originations accounted for 93% of these commitments. We remain cautious in our investment approach and we are actively avoiding taking on too much risk by primarily investing in first lien loans to larger more diversified companies.

And finally, we ended the quarter in a conservative financial position by reducing our borrowings to maintain flexibility in light of the broader credit market volatility experienced during the quarter. Before I go into more detail on our investments and portfolio composition, I want to take a minute to address the middle-market