Oaktree Specialty Lending Corporation (NASDAQ:OCSL) Q3 2023 Earnings Call Transcript

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Matt Stewart: Hi, it’s Matt Stewart. Not too much to report there, I mean we got some of our repayments for older vintage loans that didn’t have significant call protection or the call protection had run out. So, there is really not much to report there and to Armen’s point around amendment activity, the amendment fees during the quarter weren’t significant either, so not much to report on that line item.

Kyle Joseph: Got it. And then turning back to Armen or Matt Pendo. Just want to get your thoughts in terms of kind of the potential fallout from what’s going on with regional banks and rumors and headlines about increasing capital requirements at banks and how big of an opportunity you think that is for the sector and OCSL in particular?

Armen Panossian: Yes. It is Armen, I mean I will jump in and Matt feel free to add. I do think that it’s going to present a very attractive opportunity. In some ways, it gives us the opportunity to partner with those banks and in other situations that gives us the opportunity to buy portfolios. And then finally, I think generally speaking, whether there is an increase in required equity capital or not. I think the higher level of scrutiny from the regulators, we are already seeing it kind of play through with an expansion in the aperture of the possible deals that we may do, with or without partnership with the bank. So, we are just I think beginning to see an increase in deal flow, but I think there is also opportunities to work with the banks as an offtaker of some of their assets at a price or as a partner with them, going forward to origination. But I think it’s early days in terms of figuring that out.

Matt Pendo: Yes. It’s Matt. It’s Matt Pendo, Kyle. I think just to echo Armen’s comments, I do think it’s early days. That being said, I do you think it will be a big opportunity. There is no question that from the bank’s perspective, the regulatory oversight, capital charges are increasing and only going to continue to increase. And we can really partner well, with banks, there is a lot of services and products they offer that we don’t offer and we are not interested in. But we have a lot of capital, we can structure and execute transactions, very quickly, and thoughtfully. So, I think the trend has been – it’s been going on for a while. And I think it’s only going to increase and discussions around kind of partnering with banks and doing things together combining our capital and kind of their sales force and footprint. I think it’s – well, it will take a while to play out. I think it’s going to be a positive.

Kyle Joseph: Got it. Thanks very much for answering my question.

Operator: And we have no further questions at this time. So, I will turn the word back to Mr. Mosticchio.

Michael Mosticchio: Thanks Lisa and thank you all for joining us on today’s earnings conference call. A replay of this call will be available for 30 days on OCSL’s website in the Investors section, or by dialing 877-344-7529 for U.S. callers or 1-412-317-0088 for non-U.S. callers with the replay access code 1958224 beginning approximately one hour after this broadcast. We hope you enjoy the rest of the summer. Thank you.

Operator: And this concludes this conference. Thank you for attending today’s presentation. You may now disconnect.

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