"Oxford Square Capital Corp. has seen its net asset value decline every quarter in 2025, dropping from $2.30 to $1.69 per share, raising concerns about the sustainability of its high yield."
"The effective yield on CLO equity compressed from 9.7% in Q3 to 8.6% in Q4, reflecting stress in the leveraged loan market and contributing to significant losses."
"In Q4 2025, the fund recorded $18.3 million in combined unrealized and realized losses, primarily attributed to the CLO equity portion, which management described as mainly unrealized."
"Oxford distributed $0.105 per share in Q4 2025 while generating only $0.07 per share in net investment income, resulting in a payout ratio that raises sustainability concerns."
Oxford Square Capital Corp. offers a 24% annualized yield, but its net asset value has decreased 26% in 2025. The company, a Business Development Company, generates income from floating-rate loans and CLO equity. In Q4 2025, it reported $5.3 million from debt investments and $4.3 million from CLO equity. However, CLO equity yields fell from 9.7% to 8.6%, with significant losses attributed to the software sector. The distribution of $0.105 per share exceeded the $0.07 per share in net investment income, indicating unsustainable payouts.
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