Oxford Square Capital Corp. (OXSQ) Reports 2025 Annual Results: Key Insights for Investors

Oxford Square Capital Corp. (NASDAQ: OXSQ) has released its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Below is a comprehensive summary of the key points, important shareholder information, and potentially price-sensitive disclosures from the filing.

Key Highlights from the 2025 Annual Report

• Business Overview: OXSQ is a closed-end, non-diversified management investment company, operating as a business development company (BDC) under the Investment Company Act of 1940. The company focuses on investing primarily in senior secured loans, CLO (collateralized loan obligation) equity, and other structured finance vehicles, with typical investment sizes ranging from \$5 million to \$25 million.
• Portfolio Composition: As of December 31, 2025, OXSQ’s investment portfolio was allocated as follows:
  • 58.5% in senior secured notes
  • 37.8% in CLO equity
  • 3.7% in equity and other investments

  The portfolio is well-diversified, with few investments exceeding 5% of the total portfolio’s fair value.

• Investment Activity in 2025: During the year, the company purchased approximately \$92.1 million in new investments, comprising \$57.9 million in senior secured notes, \$30.2 million in CLO equity, and \$4.0 million in equity and other investments.
• Top 10 Portfolio Investments: The ten largest portfolio company investments as of year-end include a mix of structured finance vehicles and corporate debt, with significant exposure to names such as OCP CLO 2024-37, Ltd., Verifone, Inc. (formerly Verifone Systems, Inc.), and Carlyle Global Market Strategies CLO 2021-6, Ltd.
• Public Float and Share Count: As of the last business day of the second fiscal quarter, the aggregate market value of common stock held by non-affiliates was \$155,451,737, based on a closing price of \$2.23 per share. As of March 2, 2026, there were 87,510,727 shares of common stock outstanding.
• Security Listings:
  • Common stock (NASDAQ Global Select Market)
  • 5.50% Notes due 2028 (NASDAQ)
  • 7.75% Notes due 2030 (NASDAQ)
• Corporate Governance and Compliance:
  • OXSQ is not a well-known seasoned issuer.
  • The company is not an emerging growth company, nor a smaller reporting company.
  • OXSQ confirmed full compliance with SEC filing and electronic data requirements over the past 12 months.
  • No corrections to previously issued financial statements were reported, and OXSQ is not a shell company.
  • No attestation report on internal control over financial reporting by an independent auditor was filed, as permitted for non-accelerated filers.
• Investment and Risk Monitoring:
  • The company utilizes a proprietary credit grading system (ratings from 1-5) to monitor its debt investment portfolio. Equity securities, including CLO equity tranches, are not rated.
  • OXSQ closely monitors its portfolio companies, reviewing business performance, financials, and exit strategies on a quarterly and, in some cases, monthly basis.
• Competitive Advantages:
  • Expertise in credit analysis and monitoring investments
  • Established transaction sourcing network
  • Focus on companies with experienced management, financial sponsor backing, strong competitive positions, and positive cash flows
• Market Environment and Opportunity:
  • OXSQ highlighted opportunities in the loan and CLO markets, especially in the primary and secondary markets, focusing on maintaining portfolio liquidity and risk-adjusted returns.

Important Shareholder and Price-Sensitive Information

• Portfolio Risks: OXSQ invests primarily in below investment-grade debt (including “junk” debt), which entails higher risk. A portion of the portfolio includes debt where issuers are not required to make significant principal repayments until maturity, increasing the risk of loss if issuers cannot refinance or repay.
• Interest Rate and Credit Risks: Many portfolio debt securities contain interest reset provisions, potentially increasing borrower repayment difficulty and risk of investment loss.
• Leverage and Borrowing Costs: The costs associated with OXSQ’s borrowings, including any increases in advisory fees to Oxford Square Management LLC, are borne by common shareholders and may affect returns.
• Concentration in Structured Finance: The significant portfolio allocation to CLO equity and structured finance vehicles exposes OXSQ to market, credit, and structural risks inherent to these assets.
• Potential for Share Price Impact: The company’s risk profile, portfolio composition, and exposure to below investment-grade assets may impact share value, particularly if credit conditions deteriorate or if portfolio companies experience financial distress. However, the diversified portfolio and risk management practices may help mitigate some of these risks.
• Managerial Assistance and Oversight: As required of a BDC, OXSQ offers significant managerial assistance to its portfolio companies, including board participation and organizational/financial guidance, which can enhance portfolio company value and reduce risk.

Additional Investor Considerations

• Transparency: OXSQ files annual, quarterly, and current reports, as well as proxy statements, all available on its website and through the SEC.
• Corporate Headquarters: 8 Sound Shore Drive, Suite 255, Greenwich, CT 06830. Phone: (203) 983-5275.

Conclusion

The 2025 Annual Report for Oxford Square Capital Corp. provides investors with a detailed overview of the company’s portfolio, investment strategy, risk management, and market environment. The focus on senior secured debt, CLO equity, and structured finance, combined with robust risk monitoring, presents both opportunities and risks for shareholders. The company’s exposure to below investment-grade assets and the associated risks should be closely monitored by investors, particularly in volatile credit markets.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should review the full Oxford Square Capital Corp. 2025 Annual Report and consult with a qualified financial advisor before making investment decisions. The author is not responsible for any investment actions taken based on this summary.

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