Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oxford Square Capital Corp. Third Quarter 2026 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Mr. Jonathan Cohen, CEO. Please go ahead.

Good morning, everyone. Welcome to the Oxford Square Capital Corp. third quarter 2026 earnings conference call. I'm joined today by Saul Rosenthal, our president, Bruce Rubin, our CFO, and Kevin Yonon, our managing director and portfolio manager. Bruce, could you open the call with a disclosure regarding forward-looking statements?

Sure, Jonathan. Today's conference call is being recorded. An audio replay of the conference call will be available for 30 days. Replay information is included in our press release that was issued earlier this morning. Please note that this call is the property of Oxford Square Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure in this morning's press release regarding forward-looking information. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to our most recent filings with the SEC for important factors that can cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward-looking statements unless required to do so To obtain copies of our latest ACC filings, please visit our website at www.OxfordSquareCapital.com. With that, I'll turn the presentation back to Jonathan.

Thank you, Bruce. For the quarter ended September, Oxford Square's net investment income was approximately $4.9 million, or 4 cents per share, compared with approximately $5.1 million, or 5 cents per share, in the prior quarter. Our net asset value per share stood at $1.21 compared to a net asset value per share of $1.29 for the prior quarter. During the quarter, we distributed 10.5 cents per share to our common stock shareholders. For the third quarter, we recorded total investment income of approximately $9.9 million compared to approximately $9.4 million in the prior quarter. In the third quarter, we recorded combined net unrealized and realized losses on investments of approximately $3.3 million or 3 cents per share compared to combined net unrealized and realized losses on investments of approximately $1.1 million or 1 cent per share for the prior quarter. During the third quarter, our investment activity consisted of purchases of approximately $20.8 million and repayments of approximately $10.3 million. During the quarter ended September, we issued a total of approximately 14.1 million shares of our common stock pursuant to and at the market offering resulting in net proceeds of approximately $19.4 million. On October 28th, our board of directors declared monthly distributions of one and a half cents per share for each of the months ending January, February, and March of 2027. Additional details regarding record and payment date information can be found in our press release that was issued this morning. And with that, I'll turn the call over to our portfolio manager, Kevin Yonon. Kevin?

Thank you, Jonathan. During the quarter ended September 30th, U.S. loan market performance improved versus the prior quarter. U.S. loan prices, as defined by the Morningstar LSTA U.S. Leverage Loan Index, increased from 94.96% of par as of June 30th to 95.32% of par as of September 30th. According to LCD, during the quarter, there was some pricing dispersion, with BB rated loan prices increasing eight basis points, B rated loan prices increasing 119 basis points, and CCC rated loan prices decreasing 286 basis points on average. According to PitchBook LCD, the 12-month trailing default rate for the loan index decreased to 0.55% by principal amount at the end of the quarter from 0.97% at the end of June. Additionally, the default rate, including various forms of liability management exercises, which are not captured in the aforementioned default rate, remained at an elevated level of 2.97% versus 2.77% as of June 30th. The distress ratio, defined as the percentage of loans with prices below 80% of par, ended the quarter at 7.05%, compared to 6.87% at the end of June. During the quarter ended September 30th, 2026, U.S. leveraged loan primary market issuance, excluding amendments and repricing transactions, was $107.4 billion, representing a 20% decrease versus the quarter ended September 30th, 2025. This was driven by lower refinancing, dividend, and M&A activity, partly offset by higher LBO activity versus the prior year comparable quarter. At the same time, U.S. loan fund inflows, as measured by LIPR, were approximately $1.28 billion for the quarter ended September 30th. We continue to focus on portfolio management strategies designed to maximize our long-term total return, and as a permanent capital vehicle, we historically have been able to take a longer-term view towards our investment strategy. With that, I will turn the call back over to Jonathan.

Thank you, Kevin. Additional information about Oxford Square's third quarter performance has been posted to our website at www.oxfordsquarecapital.com. And with that operator, we're happy to open the call up for any questions.

As a reminder, if you would like to ask a question at this time, please press star followed by the number one on your telephone keypad.

We'll pause for a moment to compile the Q&A roster.

Your first question is from Eric Zwick with Lucid Capital Markets.

Good morning, all. Good morning, Eric.

Jonathan, maybe with just a bigger picture question as I look through the material, notice that the portfolio turnover rate relative to a year ago had slowed from 12.7 down to 4.1, and then if I look at Slide four in the slide deck, just looking at the composition of the investment portfolio, there's been increased concentration in the first lien secured debt and the other category, and then declines in the second lien secured debt and CLL equity. So just curious, as the last year has played out, how much of that change in the portfolio composition was conscious and on your part relative to maybe just market opportunity and curious would we continue to see that portfolio composition change over the next few quarters or do you feel like the current composition is well suited for today?

Thank you, Eric, very much. So from an overarching perspective, I think the decision making has been entirely conscious. We have oriented the portfolio in such a way as to reflect a more conservative view of the current price for risk in the primary and secondary markets so far as both US syndicated corporate loans are concerned and also CLO equity. We do see strong opportunities right now in the secondary market for CLO equity, but we see many fewer compelling opportunities in the primary market. So the combination of a desire to de-lever the portfolio somewhat and an overall reflection of our approach to risk management, those are the things that have led to the current composition of the portfolio.

That's helpful. And I guess, do you feel like the portfolio is in a good position today or would you continue some remixing in favor of maybe first liens and maybe secondary CLO equity investments going forward?

I think you can reasonably expect to see continued portfolio rotation with the idea of both taking advantage of opportunistic investments investment possibilities as they arise, and also reflecting, hopefully, the continued desire to moderately delever the portfolio while maintaining the appropriate levels of risk management.

Yep, that makes sense. And I did want to follow up kind of on the leverage topic. I think leverage is down to 1.07%. Now at this point, it sounds like maybe with your comments, we could see a little bit further deleveraging going forward. And if so, do you have a kind of target range in mind where you'd like it to settle?

So intra quarter, Eric, you may have seen that we pay down some additional debt. So it's lower than that still. And our expectation is that we're going to continue to pay down Debt, depending on the balance that we see between investment opportunity and the necessity to maintain our leverage ratios at the appropriate levels. But you're absolutely right, Eric. You can see at the end of the first quarter, we were sitting at a total debt to equity ratio of 1.26. We closed out the third quarter at 1.07. And per my earlier comment, we're lower still. on the back of the intra-quarter repayment.

Yep, yep, thanks for that clarification there. And then moving to the net realized losses in the quarter, I know there are no sales during the quarter, so curious what drove those other realized losses.

So essentially, on at least, I believe, two deals, on actually the two deals, Those were CLO equity positions that had simply reached their terminus points. So they were essentially discharged and unwound as ongoing investments. They were being carried at essentially no value or option value only at that point.

Gotcha. So was that a switch from unrealized to realized? Was that kind of what happened as they wound up?

Precisely right, Eric. Yes, exactly.

Gotcha. Gotcha. Okay. And then on the flip, kind of the unrealized appreciation in the quarter, just shy of $8 million. And I know Kevin mentioned, you know, increases in leveraged loan prices during the quarter. Is that primarily the driver there or are there some other factors at play as well?

Primarily increases in leveraged loan prices, more or less across the book, except for a few positions that were sort of outsized returns, but fairly balanced across the loan portfolio.

Excellent. Thanks. And the last one for me, and I'll step aside, just on the dividend payment in January going forward. Lower now that seems to be more in line with the earnings power of the current portfolio. Just kind of curious if you could run us through the decision and how you came to that number.

Sure. The board's decision, Eric, was taken on the back of exactly what you just mentioned, which is The current and likely perspective near-term earnings power of the fund combined with the things that we had talked about earlier, which were firstly, a desire to continue to moderately de-lever the portfolio, which obviously paying out a lower distribution is helpful with. And then secondly, being in an appropriate position, to take advantage of principally secondary market opportunities as they arise.

Great. Thank you so much for taking all my questions.

Of course. Thank you, Eric, very much.

I show no further questions at this time. With that, I'll turn the call back over to Mr. Jonathan Cohen, CEO, for any closing remarks.

Thank you very much. Thank you everyone for being on this call and for your continued interest in Oxford Square. We look forward to speaking to you again soon. Thanks very much.