Oaktree Strategic Income Corporation (NASDAQ:OCSI) Q4 2019 Earnings Conference Call - Final Transcript

Nov 20, 2019 • 12:30 pm ET


Oaktree Strategic Income Corporation (NASDAQ:OCSI) Q4 2019 Earnings Conference Call - Final Transcript


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Welcome and thank you for joining Oaktree Strategic Income Corporation's Fiscal Fourth 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 fiscal fourth quarter financial results. Our earnings release, which we issued this morning, and the slide presentation that accompanies this call can be accessed on the Investors section of our website at oaktreestrategicincome.com.

With us today are Armen Panossian, Chief Executive Officer and Chief Investment Officer; Matt Pendo, President and Chief Operating Officer, and Mel Carlisle, Chief Financial Officer and Treasurer. We will be happy to take your questions following their prepared remarks.

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. Our 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 Investors 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 the corporate website.

With that, I will now turn the call over to Matt Pendo.

Matt Pendo

Thank you, Mike, and welcome everyone to our fourth quarter earnings conference call. We appreciate your ongoing interest in OCSI. We are pleased to report a solid finish to the full year, highlighted by net investment income growth, continued progress repositioning the portfolio, and excellent credit quality. Importantly, we reported net investment income per share of $0.72 for fiscal 2019, a 7% increase from the prior year. Successful investment exits and realizations along with overall higher levels of investment income resulting from a larger average portfolio helped drive the annual growth. For the fourth quarter, net investment income per share was $0.17, down from $0.20 the prior quarter, primarily driven by a higher prepayment fees and OID acceleration of $1.4 million in the prior quarter, resulting from the exit of our investment in US Well Services.

Total investment income for the full year rose 4% to $49.6 million, thanks to our larger investment portfolio and fees received from successful investment exits. The quality of earnings continues to be strong as interest income represented over 99% of total investment income for the fourth quarter. Our net asset value per share