# OXSQZ earnings call intelligence LOPJLB CallCard / temporal rollup · freemium · [stock page](https://www.lopjlb.com/stock/OXSQZ) · [Earnings tab](https://www.lopjlb.com/stock/OXSQZ?tab=earnings) Updated: 2026-08-24T02:31:44 Quarters analyzed: 8 ## Cross-quarter narrative Across eight quarters from 2024 Q1 to 2026 Q2, Oxford Square Capital Corp. has navigated a deteriorating earnings and asset quality trajectory. Net investment income per share declined from $0.11 to $0.05, falling well below the maintained $0.105 quarterly distribution ($0.035 monthly). NAV per share eroded 47% from $2.42 to $1.29, driven by cumulative realized and unrealized losses peaking at $18.3M in 2025 Q4. The loan market backdrop oscillated: default rates including liability management remained elevated (4.31% in 2024 Q2, 4.32% in 2025 Q3, 2.77% in 2026 Q2), distress ratios fluctuated (3.02%-6.87%), and pricing dispersion persisted across ratings. Management consistently raised capital via ATM equity offerings ($7.9M-$17.8M quarterly) to fund portfolio activity, which shifted from broad loan investments to concentrated CLO equity purchases ($19.9M in 2026 Q2) and selective first-lien B2B loans. CLO equity markdowns became a significant NAV drag in 2025 Q4. Despite persistent credit stress, management highlighted improving loan market conditions in 2026 Q2 with higher issuance and lower defaults, while acknowledging dividend coverage shortfalls and elevated distressed exposure. The firm reached maximum CLO equity capacity, limiting further additions without sales. ## Latest CallCard · Q2 Oxford Square Capital Corp. reported Q2 2026 NII of $0.05/share, below the $0.105/share distribution; NAV fell to $1.29; deployed $19.9M into secondary-market CLO equity; raised $17.8M via ATM; loan market conditions improved with lower defaults and higher issuance. **Guidance:** vague — Management explicitly stated they do not make forward projections or performance estimates. **Tone:** mgmt 0.2 · Q&A pressure 0.3 · divergence 0.1 Management highlighted improved loan market metrics, reduced losses, increased investment income, and maintained distributions, but acknowledged NAV decline and NII below dividend without forward projections. ### Demand visibility Loan market conditions improving with higher issuance and lower defaults. US leveraged loan primary issuance rose 33% YoY to $101.8B; loan fund inflows ~$1B; trailing 12-month default rate fell to 0.97% from 1.44%; distress ratio improved to 6.87% from 7.23%. ### Margins / costs CLO equity investments targeting low-20s cash-on-cash yields. Q2 purchases of $19.9M were entirely secondary-market CLO equity with cash-on-cash and forward effective yields in the low 20s percentage range. ### Capital allocation Raised $17.8M via ATM; deployed $19.9M into CLO equity; maintained $0.105/share quarterly distribution. Issued 11.3M shares at-the-market for $17.8M net proceeds; invested entirely in secondary-market CLO equity; one nonaccrual position resolved via restructuring into new first lien term loan (on accrual) and common equity; repaid $500K. ### Milestones - **CLO equity investment program** [on_track]: Continued deployment into secondary-market CLO equity tranches per stated thesis. - **Nonaccrual position resolution** [delivered]: Restructuring closed during quarter; new first lien term loan on accrual plus common equity retained. - **ATM share issuance** [delivered]: Raised $17.8M via 11.3M shares issued in Q2. - **Monthly distribution declaration** [delivered]: Board declared $0.035/share for Oct, Nov, Dec 2026. ### Fears / risks - **Dividend coverage**: Net investment income per share ($0.05) remains well below the quarterly distribution ($0.105). - **NAV erosion**: Net asset value per share declined to $1.29 from $1.32 in prior quarter. - **Elevated default environment**: Default rate including liability management exercises remains elevated at 2.77% despite decline from 3.48%. - **Distressed loan exposure**: Distress ratio (loans below 80% of par) at 6.87% indicates ongoing credit stress. - **Concentration in CLO equity**: Quarter's entire $19.9M deployment was in CLO equity, increasing reliance on that asset class. - **No forward guidance**: Management refuses to provide forward projections or timeline for NII to cover distribution. ### Key quotes > “we are, I think, broadly optimistic about the capital that we're deploying presently, including the capital that we've just deployed in this last quarter, and we'll certainly keep you updated.” — Jonathan Cohen > “that was actually all CLO equity for this quarter. So the cash on cash was probably low 20s. The forward effective yield is also in that range.” — Kevin P. Yonon > “U.S. loan market performance improved versus the prior quarter. U.S. loan prices, as defined by the Morningstar LSTA U.S. Leveraged Loan Index, increased from 94.63% of par as of March 31 to 94.96% of par as of June 30.” — Kevin P. Yonon > “For the quarter ended June 30, Oxford Square's net investment income was approximately $5.1 million or $0.05 per share compared with approximately $4.1 million in the prior quarter.” — Jonathan Cohen ## Quarter one-liners - **2026 Q2:** Oxford Square Capital Corp. reported Q2 2026 NII of $0.05/share, below the $0.105/share distribution; NAV fell to $1.29; deployed $19.9M into secondary-market CLO equity; raised $17.8M via ATM; loan market conditions improved with lower defaults and higher issuance. - **2025 Q4:** Oxford Square Q4 NII flat at $0.07/share, NAV fell to $1.69, $18.3M unrealized/realized losses driven by CLO equity markdown; declared $0.035 monthly distributions; sees opportunities in first lien B2B loans amid software sector distress and wider spreads. - **2025 Q3:** Oxford Square posted modest net investment income, reduced NAV, active CLO equity and loan purchases, raised cash via ATM issuance, and noted a higher cash balance driven by timing. - **2025 Q1:** Oxford Square Q1 NII flat at $0.09/share, NAV fell to $2.09 from $2.30, $14.2M net losses on investments, declared $0.035 monthly distributions through Sep; loan market weakened with prices down, distress ratio up. - **2024 Q4:** Oxford Square Q4 NII $0.09/sh, NAV $2.30, declared $0.035/mo distributions; loan market improved but CCC weakness and elevated restructurings persist. - **2024 Q3:** Oxford Square Q3 NII fell to $0.10/share, NAV declined to $2.35, losses widened to $7.1M; declared $0.035 monthly distributions for Jan-Mar 2025; loan market modestly improved but out-of-court restructurings elevated. - **2024 Q2:** Oxford Square Q2 NII rose to $0.13/share, NAV stable at $2.43, declared $0.035 monthly distributions; portfolio losses narrowed, ATM raised $8.9M; loan market modestly weakened with rising distress ratio. - **2024 Q1:** Oxford Square Q1 NII fell to $0.11/share, NAV declined to $2.42, realized losses $8.1M; loan market improved with lower defaults but portfolio saw higher default rates for their issuer types. ## Theme arcs - **Net Investment Income** (deteriorating): NII per share fell from $0.11 (2024 Q1) to $0.05 (2026 Q2), consistently below distribution level since 2025 Q3. - **NAV per share** (deteriorating): NAV declined from $2.42 to $1.29, a 47% drop, with accelerating losses in 2025-2026. - **Dividend coverage** (deteriorating): NII has not covered the $0.105 quarterly distribution for several quarters; gap widened to $0.055/share in 2026 Q2. - **Loan market conditions** (stable): Mixed signals throughout; 2026 Q2 noted improvement with higher issuance and lower defaults, but pricing dispersion persists. - **Credit quality and distress** (deteriorating): Distress ratio ranged 2.88%-6.87%; default rates including liability management elevated 2.77%-4.32%. - **CLO equity strategy** (new): Emerging focus from 2025 Q3; $19.9M deployed in 2026 Q2 targeting low-20s cash-on-cash yields; maximum capacity reached. - **ATM equity issuance** (stable): Recurring quarterly ATM raises ($7.9M-$17.8M) funding portfolio activity and distributions. - **Distribution maintenance** (stable): $0.035 monthly distributions declared consistently across all quarters. - **Portfolio repositioning** (new): First-lien B2B loan focus introduced in 2025 Q4 amid software sector distress and wider spreads. - **Portfolio losses** (deteriorating): Combined realized/unrealized losses widened from $2.5M (2024 Q2) to $18.3M (2025 Q4). ## Guidance path 2024 Q1:vague → 2024 Q2:vague → 2024 Q3:vague → 2024 Q4:vague → 2025 Q1:vague → 2025 Q3:vague → 2025 Q4:vague → 2026 Q2:vague --- Research context only. Not personalized investment advice. API: `GET /bff/api/bigfive/earnings-intel/OXSQZ`