OFS Credit Q3 2026: Core NII Rises to $0.21/Share Despite NAV Falling to $3.32

summarizeSummary

OFS Credit's Q3 2026 deck shows Core NII up to $0.21/share but NAV down to $3.32, with preferred leverage at 0.92x net assets. The 24.4% distribution yield is increasingly funded by return of capital.

check_boxKey Events · Earnings and Guidance · OCCI

• NAV Falls to $3.32 Per Share

  Net asset value declined to $3.32 as of July 31, 2026, from $3.72 at April 30, 2026, driven by $8.9M in unrealized depreciation on CLO equity investments.

• Core NII Rises to $0.21/Share

  Core net investment income reached $6.3M ($0.21/share) for fiscal Q3 2026, up from $5.5M ($0.19/share) in Q2, while GAAP NII fell slightly to $4.2M ($0.14/share).

• Preferred Leverage Hits 0.92x Net Assets

  Preferred stock principal of $89.9M now equals 0.92x net assets, up from 0.82x last quarter, as the asset base shrinks faster than preferred redemptions.

• 24.4% Distribution Yield on Eroding NAV

  Board declared $0.05 monthly distributions for September and October 2026, implying a 24.4% annualized rate based on the $2.46 July 31 closing price — a payout increasingly funded by return of capital.

auto_awesomeAnalysis · OCCI · Unknown

OFS Credit's fiscal Q3 2026 investor deck shows a widening gap between distributable cash flow and book value. Core NII — the company's preferred measure of cash available for distributions — rose to $6.3 million ($0.21/share), up from $5.5 million ($0.19/share) last quarter. But NAV per share fell to $3.32 from $3.72, driven by $8.9 million in unrealized depreciation on CLO equity. The preferred stock leverage ratio climbed to 0.92x net assets, the highest in the five quarters shown, as the company continues to redeem preferred shares while its asset base shrinks. The $0.05 monthly distribution implies a 24.4% annualized yield on the July 31 closing price of $2.46 — a payout that increasingly relies on return of capital as NAV erodes.