OFS Capital Corporation (NASDAQ:OFS) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 10:00 am ET

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OFS Capital Corporation (NASDAQ:OFS) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Executive
Jeffrey A. Cerny

yes, less than one-fourth are second lien.

Analyst
Mickey M. Schleien

That's 23% of senior secured or 23% of the total portfolio?

Executive
Jeffrey A. Cerny

23% of the senior secured.

Analyst
Mickey M. Schleien

Okay. That's helpful. Maybe one last question that just came to mind. Given the fact that you have a broad platform and you invest across the space. Do you have a sense that the ratings agencies are sort of waiting to see how second quarter results develop before they make decisions on potential additional downgrades or not?

Executive
Jeffrey A. Cerny

I would say that there was a significant wave of downgrades in early April following year-end numbers, but they did begin to bring in more forward-looking expectations into that process and take action on those. And sometimes the ratings actions by the agencies tend to be clustered around payment dates. So I guess the short answer is, I'm not sure, but I think that the downgrades have been fairly significant. They slowed in May and June. I don't know how they're viewing the future, quite frankly. I don't know, Bilal, do you have anything you want to add or?

Executive
Bilal Rashid

Yes. I mean, I would say that, since the initial onslaught of ratings downgrades, right after the pandemic hit. I mean, they've been relatively silent. And, I think, it is possible, Mickey as you're mentioning that they are looking wait -- towards the Q2 numbers that come out in early August, generally for these companies, to decide whether they want to take further action or not. I think they took action in many of the situations based on the expectations. And my guess is that, if the numbers actually come out worse than the expectations, then there could be potentially more downgrades. So I think we're probably a week or two weeks away.

Analyst
Mickey M. Schleien

I understand. That's very helpful color, Bilal. Those are all my questions this morning. I appreciate your time. Thank you.

Executive
Bilal Rashid

Thank you, Mickey.

Operator
Operator

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Bilal Rashid for any closing remarks. Please, go ahead, sir.

Executive
Bilal Rashid

Thank you all for joining our call today and we look forward to speaking with everyone again next quarter. Operator, you may now end the call. Thank you.

Operator
Operator

[Operator Closing Remarks]