The case for & against
Bull & Bear analysis
Oxford Square Capital Corp. (NASDAQ: OXSQ) is a business development company specializing in investing primarily in secured debt and equity securities of middle-market companies in the U.S. The firm benefits from a permanent capital structure that allows it to maintain a long-term investment view, particularly in the leveraged loan market. Oxford Square is strategically focusing on generating stable income through its investments, especially targeting the growing sector of collateralized loan obligations (CLOs) and exploring opportunities in high-growth areas like artificial intelligence, reflecting adaptability within the prevailing market challenges.
Bull says
- ↑Declared 3.5¢ per share monthly distributions, yield at 3.53%
- ↑Q2 2026 net investment income up to $5.1M from $4.1M
- ↑Invested $19.9M in CLO equity for cash-on-cash returns
- ↑Combined unrealized and realized losses cut to $1.1M in Q2
- ↑Holds $51M in cash and equivalents for liquidity
- ↑Initial AI investments position portfolio for secular growth
Bear says
- ↓Q1 net investment income fell to $4.1M, earnings yield negative
- ↓NAV per share down to $1.32, signaling asset pressure
- ↓Trailing 12-month default rate rose to 1.43%, distress at 7.23%
- ↓Unrealized and realized losses reached $29.7M in Q1
- ↓Leverage ratio of 1.29 heightens risk in rising-rate environment
- ↓Negative profitability and size factors suggest underlying weakness
Earnings Call · Q2 2025 · Mgmt. Guidance
Transcript signals
Bear points
- Additionally, the distract ratio, defined as a percentage of loans with prices below 80% of par, ended the quarter at 3.06%, compared to .21% at the end of March.
- During the quarter of the June 30th, 2025, U.S. leveraged loan primary market issuance, excluding amendments in repricing transactions, with $76.3 billion, representing a 48% decrease versus the quarter end of June 30th, 2024. This was driven by lower optimistic activity, including refinancing and funding of dividends, partly offset by higher non-refinancing issuance, including M&A and LBO activity, versus the prior year comparable quarter.
- Our net assets value per share stood at $2.06, compared to net assets value per share of $2.09 for the prior quarter.