Oxford Square Capital Corp Surpasses Expectations with Strong Q2 Earnings
Oxford Square Capital Corp, a leading investment manager in the U.S. loan market, has released its second-quarter earnings for 2026, showcasing a robust performance that surpasses expectations.
According to the company's conference call transcript, Oxford Square's net investment income was approximately $5.1 million, or $0.05 per share, compared to $4.1 million in the prior quarter. This significant increase reflects the improving U.S. loan market conditions, as highlighted by Kevin Yonan, managing director and portfolio manager.
Yonan noted that U.S. loan prices, as defined by the Morningstar LSTA U.S. Leveraged Loan Index, increased from 94.63% of par as of March 31st to 94.96% of par as of June 30th. This upward trend is attributed to higher refinancing and M&A activity, partly offsetting lower LBO and dividend activity versus the prior year comparable quarter.
Furthermore, Yonan emphasized that the loan market's overall performance was positively impacted by the reduction in default rates. The 12-month trailing default rate for the loan index decreased to 0.97% by principal amount at the end of the quarter from 1.44% at the end of March. This significant decline indicates a healthier loan market, providing investors with increased confidence.
Oxford Square's investment activity also demonstrated strength during the quarter, with purchases totaling approximately $19.9 million and repayments of around $500,000. The company issued a total of approximately 11.3 million shares of its common stock under an at-the-market offering, resulting in net proceeds of approximately $17.8 million.
Jonathan Cohen, CEO of Oxford Square Capital Corp, welcomed investors to the conference call and highlighted the company's continued commitment to delivering strong performance despite market fluctuations.
The company's monthly distributions, announced on July 29th by its board of directors, further underscore its dedication to returning value to shareholders. With a payout of $0.035 per share for each of October, November, and December 2026, Oxford Square demonstrates its confidence in the loan market's prospects.
As the U.S. loan market continues to navigate growth and recovery, Oxford Square Capital Corp's performance serves as a testament to the company's expertise and adaptability. With its impressive Q2 earnings and strong investment activity, investors can expect continued success from this leading investment manager in the years ahead.
