OFS Credit Company, Inc. (Nasdaq: OCCI) (“OFS Credit,” the “Company,” “we,” “us” or “our”), an investment company that primarily invests in collateralized loan obligation (“CLO”) equity and debt securities, today announced its financial results for the fiscal quarter ended July 31, 2025.
THIRD QUARTER HIGHLIGHTS
- Net investment income (“NII”) of $6.1 million, or $0.22 per common share, for the fiscal quarter ended July 31, 2025. This compares to NII of $5.2 million, or $0.21 per common share, for the fiscal quarter ended April 30, 2025. During the fiscal quarter ended July 31, 2025, NII increased by $0.9 million, or 17.0%, primarily due to an increase in the size of our investment portfolio and an increase in our interest income yield1. See additional information under “Results of Operations” below.
- Core net investment income (“Core NII”)2 of $8.5 million, or $0.31 per common share, for the fiscal quarter ended July 31, 2025. This compares to Core NII of $9.2 million, or $0.37 per common share, for the fiscal quarter ended April 30, 2025. Core NII decreased for the fiscal quarter ended July 31, 2025, primarily due to lower cash flows on our CLO equity investments attributable to the tightening of loan spreads driven by strong investor demand for CLOs and leveraged loans.
- Net asset value (“NAV”) per common share of $6.13 at July 31, 2025, a decrease of $0.04 from NAV of $6.17 at April 30, 2025. This decrease in NAV was primarily due to distributions of $0.345 per common share paid during the quarter which exceeded our quarterly NII of $0.22 per common share, partially offset by a net gain on investments of $0.07 per common share. See additional information under “Results of Operations” below.
- During the fiscal quarter ended July 31, 2025, the interest income yield1 of our investment portfolio was 14.38%, based on average amortized cost.
- During the fiscal quarter ended July 31, 2025, we issued 1,538,496 shares of common stock through our At-the-Market offering, for net proceeds of $10.0 million, after deducting commissions, fees and offering costs.
OTHER RECENT EVENTS
- As previously announced, on July 16, 2025, our board of directors (the “Board”) declared monthly cash distributions of $0.115 per common share for each of the three months in the fiscal quarter ending October 31, 2025, which implies an annualized cash distribution rate of 22.9% based on the closing market price of $6.02 per common share on July 31, 2025. The Board also declared monthly distributions on our outstanding preferred stock through January 31, 2026. See additional information under “Distributions” below.
| SELECTED FINANCIAL HIGHLIGHTS | ||||||||
| (in millions, except per share data) | At | |||||||
| July 31, 2025 | April 30, 2025 | |||||||
| Balance Sheet Highlights | ||||||||
| Total investments, at fair value | $ | 279.4 | $ | 252.2 | ||||
| Total outstanding preferred stock – principal | 115.9 | 115.9 | ||||||
| Total net assets | 170.0 | 160.3 | ||||||
| NAV per common share | 6.13 | 6.17 | ||||||
| Operating Highlights | For the Fiscal Quarter Ended | |||||||
| (Per common share) | July 31, 2025 | April 30, 2025 | ||||||
| Net investment income | $ | 0.22 | $ | 0.21 | ||||
| Net realized loss on investments | (0.07 | ) | (0.04 | ) | ||||
| Net change in unrealized appreciation (depreciation) on investments | 0.14 | (0.67 | ) | |||||
| Net earnings (loss) | $ | 0.29 | $ | (0.50 | ) | |||
| Reconciliation of Core NII — Non-GAAP2 | ||||||||
| Net investment income | $ | 0.22 | $ | 0.21 | ||||
| CLO equity adjustments | 0.09 | 0.16 | ||||||
| Core NII | $ | 0.31 | $ | 0.37 | ||||
| 1 Interest income yield is calculated as total investment income earned on the investment portfolio (excluding idle cash interest income) divided by the average total investments at cost (annualized). |
| 2 On a supplemental basis, we disclose Core NII, which is a financial measure calculated and presented on a basis of methodology other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Core NII represents NII adjusted for differences in applicable cash distributions received on our CLO equity and equity-related investments that have not been optionally redeemed relative to income recognized in accordance with GAAP. See additional information under “Supplemental Information Regarding Core Net Investment Income” below. |
MANAGEMENT COMMENTARY
“We had a solid third fiscal quarter highlighted by a 17.0% increase in net investment income compared to the prior quarter,” said Bilal Rashid, Chief Executive Officer. “During the quarter, we raised approximately $10.0 million of additional capital through our At-the-Market common stock offering program. We deployed $41.2 million into our investment portfolio; these new investments, which carried a weighted-average effective yield of 19.05% at period end, contributed to the increase in our portfolio yield during the quarter.”
PORTFOLIO AND INVESTMENT ACTIVITIES
As of July 31, 2025, the total fair value of our investment portfolio was $279.4 million, which was equal to 83.7% of amortized cost. For the quarter ended July 31, 2025, our CLO equity cash flow yield3 was 17.48% based on amortized cost.
| At | ||||||||
| Portfolio Overview ($ in millions) | July 31, 2025 | April 30, 2025 | ||||||
| Total investments, at fair value | $ | 279.4 | $ | 252.2 | ||||
| Total number of issuers | 89 | 85 | ||||||
| Weighted-average effective yield4 | 14.04 | % | 14.07 | % | ||||
| 3 Calculated as CLO equity and equity-related cash distributions received during the quarter, excluding distributions on CLO equity investments that have been optionally redeemed, divided by average CLO equity and equity-related investments at amortized cost. |
| 4 Based on amortized cost at period end; excludes discount accretion on CLO debt investments. |
| For the Fiscal Quarter Ended | ||||||||
| Portfolio Purchases ($ in millions) | July 31, 2025 | April 30, 2025 | ||||||
| CLO equity investments | $ | 36.8 | $ | 39.5 | ||||
| CLO debt investments | 2.0 | — | ||||||
| Loan accumulation facility investments | 2.2 | 2.2 | ||||||
| Other CLO equity-related investments (i.e., fee rebates) | 0.2 | 0.2 | ||||||
| Total investments | $ | 41.2 | $ | 41.9 | ||||
| Weighted-average effective yield – period end | 19.05 | % | 20.96 | % | ||||
| At July 31, 2025 | ||||||||
| Portfolio Composition ($ in millions) | Amortized Cost | Fair Value | ||||||
| CLO equity investments | $ | 311.8 | $ | 256.1 | ||||
| CLO debt investments | 14.6 | 15.3 | ||||||
| Loan accumulation facility investments | 6.0 | 6.0 | ||||||
| Other CLO equity-related investments (i.e., fee rebates) | 1.5 | 2.0 | ||||||
| Total investments | $ | 333.9 | $ | 279.4 | ||||
RESULTS OF OPERATIONS
Interest Income
During the fiscal quarter ended July 31, 2025, interest income increased to $11.9 million from $10.2 million during the prior quarter. The increase in interest income was primarily due to net investment deployment (purchases, net of sales and repayments) of $27.6 million and a 0.34% increase in the interest income yield of our investment portfolio as compared to the prior quarter.
Expenses
During the fiscal quarter ended July 31, 2025, total expenses increased by $0.8 million to $5.8 million, primarily due to a $0.4 million increase in interest expense related to a full quarter of expense on our 8.00% Series G Term Preferred Stock due 2030 and a $0.3 million aggregate increase in base management and incentive fees due to portfolio growth.
Net Realized and Unrealized Gain (Loss) on Investments
During the fiscal quarter ended July 31, 2025, net gain on investments of $1.9 million was primarily due to net unrealized appreciation on our CLO equity investments, attributable to the tightening of CLO spread levels coupled with an increase in underlying collateral loan prices during the quarter.
DISTRIBUTIONS
Fourth Fiscal Quarter 2025 Common Stock Distributions
The following schedule applies to distributions for common stockholders of record on the close of business of each specific record date:
| Month | Record Date | Payment Date | Cash Distribution Per Share | |||
| August 2025 | August 15, 2025 | August 29, 2025 | $0.115 | |||
| September 2025 | September 15, 2025 | September 30, 2025 | $0.115 | |||
| October 2025 | October 15, 2025 | October 31, 2025 | $0.115 |
Dividend Reinvestment Plan (“DRIP”) – DRIP Shares Issued at 95% of Market Price
Common stockholders who participate in our DRIP have the opportunity to receive a 5% discount to the market price per share of common stock at the close of regular trading on The Nasdaq Capital Market on the valuation date fixed by the Board for each distribution (i.e., the payment date).
Common stockholders that are interested in participating in our DRIP should contact their broker or financial intermediary.
Additional information about our DRIP and how to participate can be found at https://ir.ofscreditcompany.com/shareholder-services/dividend-reinvestment-plan. We make our website content available for informational purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this press release.
Preferred Stock Distributions
The following schedule applies to distributions for preferred stockholders of record on the close of business of each specific record date:
| Preferred Stock Series | Month | Record Date | Payment Date | Cash Distribution Per Share |
| 6.125% Series C Term Preferred Stock (Nasdaq: OCCIO) | August 2025 | August 15, 2025 | August 29, 2025 | $0.1276042 |
| September 2025 | September 15, 2025 | September 30, 2025 | $0.1276042 | |
| October 2025 | October 15, 2025 | October 31, 2025 | $0.1276042 | |
| November 2025 | November 17, 2025 | November 28, 2025 | $0.1276042 | |
| December 2025 | December 12, 2025 | December 31, 2025 | $0.1276042 | |
| January 2026 | January 15, 2026 | January 30, 2026 | $0.1276042 | |
| 6.00% Series D Term Preferred Stock | August 2025 | August 15, 2025 | August 29, 2025 | $0.125 |
| September 2025 | September 15, 2025 | September 30, 2025 | $0.125 | |
| October 2025 | October 15, 2025 | October 31, 2025 | $0.125 | |
| November 2025 | November 17, 2025 | November 28, 2025 | $0.125 | |
| December 2025 | December 12, 2025 | December 31, 2025 | $0.125 | |
| January 2026 | January 15, 2026 | January 30, 2026 | $0.125 | |
| 5.25% Series E Term Preferred Stock (Nasdaq: OCCIN) | August 2025 | August 15, 2025 | August 29, 2025 | $0.109375 |
| September 2025 | September 15, 2025 | September 30, 2025 | $0.109375 | |
| October 2025 | October 15, 2025 | October 31, 2025 | $0.109375 | |
| November 2025 | November 17, 2025 | November 28, 2025 | $0.109375 | |
| December 2025 | December 12, 2025 | December 31, 2025 | $0.109375 | |
| January 2026 | January 15, 2026 | January 30, 2026 | $0.109375 | |
| 7.875% Series F Term Preferred Stock (Nasdaq: OCCIM) | August 2025 | August 15, 2025 | August 29, 2025 | $0.1640625 |
| September 2025 | September 15, 2025 | September 30, 2025 | $0.1640625 | |
| October 2025 | October 15, 2025 | October 31, 2025 | $0.1640625 | |
| November 2025 | November 17, 2025 | November 28, 2025 | $0.1640625 | |
| December 2025 | December 12, 2025 | December 31, 2025 | $0.1640625 | |
| January 2026 | January 15, 2026 | January 30, 2026 | $0.1640625 | |
| 8.00% Series G Term Preferred Stock | August 2025 | August 15, 2025 | August 29, 2025 | $0.16666667 |
| September 2025 | September 15, 2025 | September 30, 2025 | $0.16666667 | |
| October 2025 | October 15, 2025 | October 31, 2025 | $0.16666667 | |
| November 2025 | November 17, 2025 | November 28, 2025 | $0.16666667 | |
| December 2025 | December 12, 2025 | December 31, 2025 | $0.16666667 | |
| January 2026 | January 15, 2026 | January 30, 2026 | $0.16666667 |
| OFS Credit Company, Inc.Statement of Assets and Liabilities(Unaudited) | ||||
| As of July 31, 2025 | ||||
| Assets: | ||||
| Investments, at fair value (amortized cost of $333,925,279) | $ | 279,413,462 | ||
| Cash and cash equivalents | 7,332,005 | |||
| Interest receivable | 345,365 | |||
| Other assets | 313,117 | |||
| Total assets | 287,403,949 | |||
| Liabilities: | ||||
| Preferred stock (net of deferred issuance costs of $2,188,193) | 113,711,807 | |||
| Payable to adviser and affiliates | 3,420,647 | |||
| Other liabilities | 242,000 | |||
| Total liabilities | 117,374,454 | |||
| Net assets | $ | 170,029,495 | ||
| Net assets consist of: | ||||
| Common stock, par value of $0.001 per share; 90,000,000 shares authorized and 27,716,012 shares issued and outstanding | $ | 27,716 | ||
| Paid-in capital in excess of par | 241,806,374 | |||
| Total accumulated losses | (71,804,595 | ) | ||
| Total net assets | $ | 170,029,495 | ||
| Net asset value per common share | $ | 6.13 | ||
| OFS Credit Company, Inc.Statements of Operations(Unaudited) | |||||||
| Three Months Ended | Nine Months Ended | ||||||
| July 31, 2025 | July 31, 2025 | ||||||
| Investment income: | |||||||
| Interest income | $ | 11,875,174 | $ | 32,177,892 | |||
| Operating expenses: | |||||||
| Interest expense | 2,148,056 | 5,544,385 | |||||
| Incentive fees | 1,512,696 | 4,093,485 | |||||
| Base management fees | 1,263,086 | 3,609,133 | |||||
| Administration fees | 402,998 | 1,086,561 | |||||
| Professional fees | 270,419 | 791,537 | |||||
| Other expenses | 227,136 | 678,850 | |||||
| Total operating expenses | 5,824,391 | 15,803,951 | |||||
| Net investment income | 6,050,783 | 16,373,941 | |||||
| Net realized and unrealized gain (loss) on investments: | |||||||
| Net realized loss on investments | (1,934,404 | ) | (2,775,095 | ) | |||
| Net change in unrealized appreciation (depreciation) on investments | 3,813,971 | (14,443,821 | ) | ||||
| Net gain (loss) on investments | 1,879,567 | (17,218,916 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | $ | 7,930,350 | $ | (844,975 | ) | ||
| Weighted-average common shares outstanding | 27,179,615 | 24,785,225 | |||||
About OFS Credit Company, Inc.
OFS Credit is a non-diversified, externally managed closed-end management investment company. The Company’s primary investment objective is to generate current income, with a secondary objective to generate capital appreciation, which we seek to achieve primarily through investments in CLO equity and debt securities. The Company’s investment activities are managed by OFS Capital Management, LLC, an investment adviser registered under the Investment Advisers Act of 19405, as amended, and headquartered in Chicago with additional offices in New York and Los Angeles.
