OXLC Stock Recent News

With an 18.86% forward dividend yield, Oxford Lane Capital may attract the interest of many income-focused investors. However, on a total shareholder return basis, I think it's poised to underperform: The company has been generating negative operating cash flows far in excess of its available cash and equivalent balances. This has forced it to raise funds, leading to a dilution of stakeholders. CLO warehouse investments are a leading indicator of future CLO issuances and investment activity. This has fallen sharply in recent quarters.

I invest for income and my investments align with my goals. We look at Oxford Lane Capital's latest quarterly results to determine if it keeps meeting my goals. Eagle Point Income Co Inc is a lower-risk CLO alternative.

We take a look at the action in preferreds and baby bonds through the third week of January and highlight some of the key themes we are watching. Preferreds were flat despite rising Treasury yields. Month-to-date, the higher-beta sectors outperformed. There are arguments on both sides when allocating between term and perpetual preferreds.

Oxford Lane Capital, a fund investing in riskier assets, may not be an ideal opportunity for investors due to its unsustainable financial performance. OXLC has consistently paid out more capital than it brings in, relying on new investor funds to cover payouts for existing investors. Despite a difficult year from an interest rate perspective, Oxford Lane Capital's default rates remained low, but the bleeding for the company is expected to continue.

We take a look at the action in preferreds and baby bonds through the second week of January and highlight some of the key themes we are watching. All preferreds sectors were up for the week, buoyed by lower Treasury yields. Preferreds credit spreads have fully retraced the bank mini-crisis spread blow-up and have only been tighter in 2021.

GREENWICH, Conn., Jan. 19, 2024 (GLOBE NEWSWIRE) -- Oxford Lane Capital Corp. (Nasdaq: OXLC) (NasdaqGS: OXLCM) (NasdaqGS: OXLCP) (NasdaqGS: OXLCL) (NasdaqGS: OXLCO) (NasdaqGS: OXLCZ) (NasdaqGS: OXLCN) announced today that it will hold a conference call to discuss its third fiscal quarter earnings on Friday, January 26, 2024 at 9:00 AM ET. The toll free dial-in number is 1-833-470-1428, access code number 874572. There will be a recorded replay of the call available for 30 days after the call. If you are interested in hearing the recording, please dial 1-866-813-9403. The replay pass-code number is 867573.

Election years historically provide strong returns in the market. Default rates remain below 2% and likely won't exceed 3% in 2024. I am long on the U.S. economy and getting a massive 18% yield.

Oxford Lane Capital carries a pure-play exposure to CLO debt and equity products. Since the exposure to CLO equity tranche dominates, there are huge risks embedded in OXLC that render this BDC very speculative per definition. If we look deeper into OXLC, we notice several levers that quite clearly de-risk the overall investment case, thereby making the 19% dividend more sustainable than would be implied.

Distributions - whether from funds or corporate stocks - are always paid net of any corporate or fund expenses. Distributions covered by a fund's net investment income do not have to depend on a fund's achieving capital gains or otherwise depleting its capital to pay the distribution. Total Return = Cash Distributions Paid + Capital Gains or Losses.

Oxford Lane Capital Corp. (OXLC) and Eagle Point Credit Co. (ECC) are popular income investments that invest in the lowest tranches of collateralized loan obligations (CLOs). OXLC and ECC leverage their portfolios to support high distribution yields, but this adds more risk and amplifies losses during downturns. Investing in the baby bonds and preferred offerings of OXLC and ECC, and the other CLO funds, can provide safer and steadier cash flow opportunities for conservative investors.