Oxford Lane Capital Corp. (NASDAQ:OXLC) Q3 2018 Earnings Conference Call - Final Transcript

Feb 11, 2019 • 09:00 am ET

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Oxford Lane Capital Corp. (NASDAQ:OXLC) Q3 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

(Operator Instructions) And our first question comes from Mickey Schlein of Ladenburg. Please go ahead.

Analyst
Mickey Schlein

Yes. Good morning, everyone. And thanks for taking my questions. Jonathan, given the movement in the leverage loan market this quarter -- this calendar quarter, if I'm doing the math correctly, it would seem that CLO equity could be up perhaps 25% versus the end of last year. I know that it's not a perfect correlation because CLO equity is somewhat fragmented, but am I in the ballpark with that estimate?

Executive
Jonathan H. Cohen

Mickey, given the nature of the asset class and given the difference between different profiles across that asset class, longer reinvestment period, shorter reinvestment periods, new issues, secondary market positions, different collateral pools, certainly the overall market we believe is up meaningfully since December 31st, but I wouldn't want to put a specific target number on the broad market.

Analyst
Mickey Schlein

Well, how about your portfolio? Would you give us at least a range of what you think it might be up so far?

Executive
Jonathan H. Cohen

Well, Mickey, we only strike NAV's quarterly at Oxford Lane. And we haven't -- it's a lengthy process, as you know. We have third-party valuation work that gets done. We have indicative bid asks that we go into the market and we seek out. We look at actual trades that have occurred for any respective time period within the names and within similar profiles. We really wouldn't want to throw out any kind of an indicative NAV as of today, just given the nature of our valuation process.

Analyst
Mickey Schlein

Okay, I understand. Jonathan, looking at the core NII calculation for the quarter, the add-back of $5.4 million is quite meaningful relative to the GAAP NII. Can you give us a sense of what the main components are over the equity adjustments that you made for that quarter?

Executive
Jonathan H. Cohen

It really Mickey is just a reflection of the cash flows that we receive during the quarter. So we had no names that diverted any income during the quarter, none of our CLO equity tranches diverted income to the senior tranches during the fourth quarter of calendar 2018. And our positions continue the cash flow very strongly. I think we've been helped recently. As you saw, we did a considerable amount of opportunistic trading in the fourth quarter. And I think that has and continues to help our cash flows and our overall profiles across the portfolio.

Analyst
Mickey Schlein

Okay, a couple of more questions, if I might, Jonathan. Given that the financials came out just before the call, I haven't had a chance to look at them very carefully. Can you give us a sense of how much of a refinance or reset opportunity remains in the portfolio looking at the non-call periods in the AAA spreads that are in the portfolio at present?

Executive
Debdeep Maji

Sure. Mickey, this is Deep. We continue to position our portfolio to take advantage of that, clearly with the market widening for CLO liabilities during the fourth quarter. And into the first quarter, we