"Oxford Square Capital Corp. advertises a yield above 22%, but the distribution runs ahead of earnings, raising concerns about its financial sustainability and health."
"In Q4 2025, debt investments contributed $5.3 million while CLO equity contributed $4.3 million, totaling $10.4 million in investment income, but the effective yield on CLO equity fell significantly."
"The fund pays $0.035 per share monthly, implying a yield just above 22%, but net investment income has only been $0.07 per share, failing to cover the distribution."
Oxford Square Capital Corp. is a Business Development Company that invests in middle-market companies. It generates income from senior secured loans and CLO equity. The fund's distribution exceeds its earnings, with net investment income not covering monthly payouts. In Q4 2025, the effective yield on CLO equity dropped significantly. The fund's annual distribution was cut, yet it still did not align with earnings, raising concerns about sustainability and financial health.
#oxford-square-capital #business-development-company #clos #investment-income #financial-sustainability
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