**OFS Capital Corp Reports Fiscal Year 2025 Results**

OFS Capital Corp (OFS), a business development company, released its financial results for the fiscal year ended December 31, 2025, showcasing a net decrease in net assets resulting from operations of $33.1 million, or $2.47 per share. This compares to a net increase of $28.4 million, or $2.12 per share, in the prior fiscal year. The company's net investment income (NII) for 2025 was $12.4 million, or $0.92 per share, a decrease from $16.7 million, or $1.25 per share, in 2024. The decrease in NII was primarily attributed to a $7.3 million decrease in total investment income, partially offset by a $2.9 million decrease in total expenses.

A significant change in OFS Capital's financial position was the decrease in net asset value (NAV) per share, which fell from $12.85 at the end of 2024 to $9.19 at the end of 2025. This decline was primarily driven by net losses on the investment portfolio, which amounted to $45.0 million. The company's total outstanding debt decreased from $248.4 million in 2024 to $220.5 million in 2025, resulting in a statutory asset coverage ratio of 156%, exceeding the minimum requirement of 150%. The company also declared distributions of $1.19 per share, which exceeded the net investment income of $0.92 per share.

Operationally, OFS Capital continued its investment strategy focused on middle-market companies in the United States. As of December 31, 2025, the fair value of the debt investment portfolio totaled $179.8 million across 34 portfolio companies, with 95% in first lien loans and 5% in second lien loans. The company also held equity investments in 15 portfolio companies, valued at $100.6 million, and Structured Finance Security investments in 14 entities, valued at $61.6 million. The weighted-average performing income yield on interest-bearing investments increased slightly to 13.6% in 2025 from 13.4% in 2024. The company also executed its investment strategy through OFSCC-FS, which established the Natixis Facility on February 18, 2026, and repaid all obligations under the BNP Facility.

During the fiscal year, OFS Capital engaged in several strategic transactions, including the issuance of $69.0 million of 7.50% Unsecured Notes due July 2028 and a $25.0 million 8.00% Unsecured Note due August 2029. These proceeds were used to redeem $109.0 million of the 4.75% Unsecured Notes due February 2026. On March 1, 2024, SBIC I LP fully repaid its outstanding SBA debentures totaling $31.9 million, and, on April 17, 2024, surrendered its license to operate as a SBIC. The company's investment activities are managed by OFS Advisor, which receives a base management fee and incentive fee based on the company's assets and performance.

Looking ahead, OFS Capital intends to continue its investment strategy and maintain its status as a regulated investment company. The company's ability to generate future returns and maintain distributions to stockholders will depend on various factors, including market conditions, the performance of its portfolio companies, and its ability to manage its capital structure effectively. The company's Board has declared a distribution of $0.17 per share for the first quarter of 2026, payable on March 31, 2026, to stockholders of record as of March 20, 2026.

About OFS Capital Corp

OFS Capital Corporation is a business development company that invests primarily in middle-market U.S. companies through debt and equity securities. Its portfolio includes senior secured loans, subordinated loans, preferred and common equity, and structured finance securities. Managed by OFS Advisor, it focuses on generating current income and capital appreciation via disciplined credit analysis, active portfolio monitoring, and strategic structuring within a competitive market.

This description was generated via AI from an annual report. Updated 8 months ago.

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