OFS Credit Company Provides February 2024 Net Asset Value Update
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The estimated NAV per share provided by OFS Credit Company offers a snapshot of the company's financial position as of a specific date. It is important to note that this is an unaudited estimate and may not fully capture the financial health of the company. Investors should be aware that the final audited NAV could be materially different.
When considering the impact of external factors such as interest and inflation rates, geopolitical tensions and banking system instability, it becomes clear that the valuation of CLO equity and debt securities could be volatile. These securities are sensitive to changes in market conditions and any adverse developments could affect the company's investment income and underlying asset values.
Investors should also consider the broader implications of a potential recession or government shutdown, as these could lead to increased market volatility and impact the performance of financial instruments like CLOs. The company's mention of these risks suggests a cautious outlook on future financial conditions.
From a risk management perspective, the company's disclosure highlights several key areas of concern that could affect its portfolio. Elevated interest rates typically increase the cost of borrowing, which can affect the performance of loan obligations. Similarly, inflation can erode the real returns on investments.
The mention of geopolitical conflicts and their potential to impact financial markets is a reminder of the interconnectedness of global finance. Such events can lead to credit downgrades or defaults within the CLO space, which would directly impact OFS Credit's portfolio.
Additionally, the instability in the banking system and the risk of recession are factors that could lead to tighter credit conditions and reduced liquidity. This could affect the company's ability to manage its portfolio effectively and could lead to a revaluation of its assets.
For investors, the long-term trends in the CLO market are just as important as the current NAV estimate. While the immediate estimate provides a near-term valuation reference, the potential for adverse impacts from various macroeconomic and geopolitical risks must be factored into any investment decision.
Investors should consider the historical performance of CLOs during similar periods of economic stress. Past performance can offer insights into how these securities might behave under current market conditions. It's also essential to monitor the actions of central banks and governments as their policies could have significant implications for interest rates and inflation, which in turn affect the CLO market.
In the context of the ongoing conflicts and potential economic downturns mentioned by OFS Credit, investors would do well to keep a close eye on the company's portfolio management strategies and how they might adapt to a rapidly changing economic landscape.
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Management’s unaudited estimate of the range of our NAV per share of our common stock as of February 29, 2024 is between
$7.48 $7.58
Our financial condition, including the fair value of our portfolio investments, and results of operations may be materially impacted after February 29, 2024 by circumstances and events that are not yet known. To the extent our portfolio investments are adversely impacted by elevated interest and inflation rates, the ongoing war between
The preliminary financial data included in this press release has been prepared by, and is the responsibility of, OFS Credit’s management. KPMG LLP has not audited, reviewed, compiled, or applied agreed-upon procedures with respect to the preliminary financial data. Accordingly, KPMG LLP does not express an opinion or any other form of assurance with respect thereto.
About OFS Credit Company, Inc.
OFS Credit is a non-diversified, externally managed closed-end management investment company. The Company’s investment objective is to generate current income, with a secondary objective to generate capital appreciation primarily through investment in CLO debt and subordinated securities. The Company's investment activities are managed by OFS Capital Management, LLC, an investment adviser registered under the Investment Advisers Act of 19401, as amended, and headquartered in
Forward-Looking Statements
Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects may constitute forward-looking statements. Forward-looking statements can be identified by terminology such as “anticipate”, “believe”, “could”, “could increase the likelihood”, “estimate”, “expect”, “intend”, “is planned”, “may”, “should”, “will”, “will enable”, “would be expected”, “look forward”, “may provide”, “would” or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in documents that may be filed by OFS Credit from time to time with the Securities and Exchange Commission, as well as elevated interest and inflation rates, the ongoing war between
1 Registration does not imply a certain level of skill or training
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INVESTOR RELATIONS:
OFS Credit Company, Inc.
Steve Altebrando, 646-652-8473
investorrelations@ofscreditcompany.com
MEDIA RELATIONS:
Bill Mendel
212-397-1030
bill@mendelcommunications.com
Source: OFS Credit Company, Inc.
