Oxford Square Capital Corp. Reports Q2 2025 Financial Results, Declares Distributions Amidst Declining Metrics

Oxford Square Capital Corp.'s Q2 2025 financial results show a decline in key metrics. Net Asset Value per share fell to $2.06 from $2.09 in Q1, and net investment income dropped to $5.5 million or $0.08 per share from $6.1 million or $0.09 per share. Despite this, the company declared monthly distributions of $0.035 per share for October, November, and December 2025.

Oxford Square Capital Corp. (NASDAQ: OXSQ), a business development company focused on corporate debt and collateralized loan obligations (CLOs), reported its Q2 2025 financial results on August 7, 2025. The company experienced a decline in key metrics, including a drop in Net Asset Value (NAV) per share and net investment income.

The NAV per share decreased to $2.06 from $2.09 in the previous quarter, marking a 2.5% decline. Net investment income (NII) fell to $5.5 million, or $0.08 per share, from $6.1 million, or $0.09 per share, in Q1 2025. This represents a 11% sequential decline in NII.

Despite the challenges, Oxford Square maintained its monthly distributions at $0.035 per share for October, November, and December 2025. The company also successfully raised approximately $11.6 million through an at-the-market offering, issuing 4.9 million shares. However, this capital raise resulted in a 9.3% dilution during the quarter.

The company's investment yields showed mixed performance. Debt investment yields improved slightly to 14.5% from 14.3%, while CLO equity yields declined to 8.8% from 9.0%. More concerning, the cash distribution yield on CLO equity investments fell significantly to 13.8% from 15.5% in the previous quarter, indicating potential stress in these structured products.

OXSQ's market value performance was particularly weak, with a 10.49% negative return based on share price during the quarter, significantly underperforming the 3.59% positive return based on NAV.

The company's investment portfolio remained static with minimal activity - only $233,000 in repayments and no new purchases or sales during the quarter. The total investment income decreased to $9.5 million from $10.2 million in Q1, with income streams showing weakness across the board.

Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and, to a lesser extent, debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

The company announced a public offering of $65 million in unsecured notes to be used for investments and debt repayment. The proceeds from this offering will be used for investments and for the repayment of existing debt.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

References:
[1] https://www.stocktitan.net/news/OXSQ/oxford-square-capital-corp-announces-net-asset-value-and-selected-4cfkiww1yq9p.html
[2] https://finance.yahoo.com/news/oxford-square-capital-corp-oxsq-190025438.html
[3] https://www.nasdaq.com/articles/oxford-square-oxsq-q2-income-falls-17