Business Development Companies (BDCs) / Specialty Finance
Strategic Profile
OCSL's strategy centers on originating and investing in upper-middle-market companies, primarily through senior secured loans designed to provide downside protection and consistent income. As of March 31, 2026, the investment portfolio totaled $2.8 billion at fair value across 163 companies, with 96.3% in debt investments and 83.7% in first lien loans. The company operates as a regulated business development company generating dividend income from its loan portfolio.
Cyborg Score Rationale
Non-accruals fell to 2.6% of debt investments at fair value, and the net debt to equity ratio was 1.04x, supported by $671 million of liquidity including cash and undrawn credit capacity. However, income is declining due to lower interest rates—adjusted total investment income was $69.7 million in Q2 2026, down $4.7 million from the prior quarter, driven primarily by lower reference interest rates and reduced non-recurring income.
Top Insights
Portfolio credit quality strengthened in Q2 2026 with non-accruals declining to 2.6%, indicating improving borrower health across the 163-company investment base
Income declining sequentially due to lower SOFR and reference rates; Q2 2026 adjusted net investment income of $0.38 per share down from $0.85 in Q1 2026
Declared $0.34 per share total distribution (as of June 2026) consisting of $0.30 regular plus $0.04 supplemental dividend, supporting ongoing capital return strategy
Debt-to-equity leverage at 1.08x as of March 31, 2026, below the company's 0.90x–1.25x target range, providing flexibility for additional deployment
Named Competitors
Apollo Investment Corporation — BDC providing debt and equity capital to middle-market companies
Ares Investment Company — BDC focusing on senior secured loans and flexible capital solutions
Gladstone Capital — BDC specializing in first and second lien loans to middle-market companies
Recent Developments
(February 2026) Announced Q1 FY2026 earnings with total investment income of $75.1 million ($0.85 per share), down slightly from prior quarter due to lower reference rates
(May 2026) Reported Q2 FY2026 results showing adjusted total investment income of $69.7 million ($0.79 per share), reflecting margin compression from declining interest rates
(June 2026) Board declared $0.34 per share total cash distribution for Q3 2026 quarter, consisting of $0.30 regular and $0.04 supplemental dividend
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