OFS Capital Corporation reported a net asset value (NAV) of $8.16 per share as of March 31, 2026, down from $9.19 at the end of the previous quarter. The decrease in NAV was attributed to a net loss on investments of $1.03 per share and a loss on extinguishment of debt of $0.01 per share, partially offset by net investment income of $0.18 per share, which exceeded the quarterly distribution of $0.17 per share. For the first quarter of 2026, total investment income decreased to $8.9 million from $9.4 million in the prior quarter, primarily due to a decline in interest income, although this was somewhat mitigated by an increase in non-recurring dividend income.

The company experienced a significant net loss of $11.6 million for the quarter, which included a net realized loss of $11.3 million and net unrealized depreciation of $2.6 million. The losses were primarily driven by $10.3 million in losses related to Structured Finance Securities. As of March 31, 2026, OFS Capital had non-accrual loans with a fair value of $10.9 million, representing 3.5% of total investments. The company’s total outstanding debt decreased from $220.5 million at the end of 2025 to $202.5 million, with a weighted average interest cost of 7.34%.

In terms of operational developments, OFS Capital's investment portfolio consisted of 34 portfolio companies, with approximately 98% of the investments being first lien debt. The company also held equity investments in 14 portfolio companies and 13 investments in Structured Finance Securities. The fair value of the debt investment portfolio was reported at $156.6 million. The company had unfunded commitments of $7.8 million to fund outstanding commitments to portfolio companies as of the end of the quarter.

Strategically, OFS Capital entered into a new Natixis Facility on February 18, 2026, allowing for borrowings of up to $80 million, which replaced the previous BNP Facility that was fully repaid and terminated on the same date. The company also amended its Banc of California Credit Facility to extend its maturity to February 28, 2028, and to adjust certain covenants. Looking ahead, the company declared a distribution of $0.17 per share for the second quarter of 2026, payable on July 6, 2026, to stockholders of record as of June 19, 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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