8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 7, 2019

Oaktree Strategic Income Corporation

(Exact name of registrant as specified in its charter)

Delaware	814-01013	61-1713295
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

333 South Grand Avenue, 28th Floor Los Angeles, CA	90071
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (213) 830-6300

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging Growth Company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Condition.

On February 7, 2019, Oaktree Strategic Income Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended December 31, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

On February 7, 2019, the Company will host a conference call to discuss its financial results for the fiscal quarter ended December 31, 2018. In connection therewith, the Company provided an investor presentation on its website at http://www.oaktreestrategicincome.com. A copy of the investor presentation is attached hereto as Exhibit 99.2.

The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, is being “furnished” and is not deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor is it deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release of Oaktree Strategic Income Corporation dated February 7, 2019

99.2 Oaktree Strategic Income Corporation First Quarter 2019 Earnings Presentation

SIGNATURE

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	OAKTREE STRATEGIC INCOME CORPORATION
Date: February 7, 2019	By:	/s/ Mel Carlisle
		Name: Mel Carlisle
		Title: Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

Oaktree Strategic Income Corporation Announces First Fiscal Quarter 2019 Financial Results and

Declares Distribution of $0.155 Per Share

LOS ANGELES, CA, February 7, 2019 - Oaktree Strategic Income Corporation (NASDAQ: OCSI) (“Oaktree Strategic Income” or the “Company”), a specialty finance company, today announced its unaudited financial results for the fiscal quarter ended December 31, 2018.

Financial Highlights for the Quarter Ended December 31, 2018

• Total investment income of $11.3 million ($0.38 per share), down from $14.7 million ($0.50 per share) for the fourth fiscal quarter of 2018, and up from $10.7 million ($0.36 per share) for the first fiscal quarter of 2017.

• Net investment income of $4.9 million ($0.17 per share), down from $5.6 million ($0.19 per share) for the fourth fiscal quarter of 2018, and up from $4.5 million ($0.15 per share) for the first fiscal quarter of 2017.

• Net asset value per share of $9.43, down from $10.04 for the fourth fiscal quarter of 2018 and $9.84 for the first fiscal quarter of 2017 primarily due to a decline in certain liquid debt investments resulting from the broader market volatility experienced during the quarter ended December 31, 2018.

• Originated $93.1 million of new investment commitments and received $73.1 million of proceeds from prepayments, exits, other paydowns and sales.

• A quarterly distribution was declared of $0.155 per share, payable on March 29, 2019 to stockholders of record on March 15, 2019.

Edgar Lee, Chief Executive Officer and Chief Investment Officer, said, “In the first quarter, OCSI had solid earnings and we made continued progress exiting non-core investments, which now represent less than 10% of the portfolio. The broader market volatility experienced during the quarter led to a decline in the prices of certain liquid debt investments at the end of the quarter. Since then, we have seen encouraging signs that market conditions are improving and have already experienced some recovery in the prices of our liquid debt investments. Despite the mark-to-market decline, we believe that the credit quality of the portfolio is very strong and that we are well positioned to preserve capital and provide attractive risk-adjusted returns to our shareholders.”

Distribution Declaration

The Board of Directors declared a quarterly distribution of $0.155 per share, payable on March 29, 2019 to stockholders of record on March 15, 2019.

Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a fiscal taxable year fall below the total amount of distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to the Company’s stockholders.

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Results of Operations

	For the three months ended
	December 31, 2018			September 30, 2018		December 31, 2017
Operating results:
Interest income	$	11,203,567		$	13,436,037	$	10,034,267
PIK interest income		7,745			536,377		298,414
Fee income		47,635			751,808		398,049
Total investment income		11,258,947			14,724,222		10,730,730
Net expenses		6,395,410			9,160,910		6,183,955
Net investment income		4,863,537			5,563,312		4,546,775
Net realized and unrealized gains (losses)		(18,064,228	)		2,795,998		(2,640,807	)
Net increase (decrease) in net assets resulting from operations		(13,200,691	)		8,359,310		1,905,968
Net investment income per common share	$	0.17		$	0.19	$	0.15
Net realized and unrealized gains (losses) per common share	$	(0.62	)	$	0.09	$	(0.09	)
Earnings (loss) per common share — basic and diluted	$	(0.45	)	$	0.28	$	0.06
				As of
				December 31, 2018		September 30, 2018
Select balance sheet and other data:
Investment portfolio at fair value				$	553,351,420	$	556,841,828
Total debt outstanding					262,156,800		275,056,800
Net assets					277,977,380		295,745,420
Net asset value per share					9.43		10.04
Total leverage					0.94x		0.93x

Total investment income for the quarter ended December 31, 2018 was $11.3 million, which primarily consisted of $11.2 million of interest income from portfolio companies.

Net expenses for the quarter were $6.4 million, a $2.8 million decrease from $9.2 million in the prior quarter. The decrease was primarily due to a $2.0 million one-time write-off of previously unamortized financing costs in connection with the redemption of the $309.0 million debt securitization that occurred during the three months ended September 30, 2018 and a $0.8 million decrease in Part I incentive fees (net of waivers) as a result of lower pre-incentive fee net investment income during the three months ended December 31, 2018.

Net realized and unrealized losses on the investment portfolio for the quarter were $18.1 million.

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Portfolio and Investment Activity

	As of
(Dollar amounts in thousands)	December 31, 2018			September 30, 2018			December 31, 2017
Investments at fair value	$	553,351		$	556,842		$	541,408
Number of portfolio companies		79			75			66
Average portfolio company debt size	$	7,100		$	7,600		$	8,300
Asset class:
Senior secured debt		90.1	%		89.1	%		89.2	%
Unsecured debt		9.9	%		10.5	%		10.6	%
Equity		—	%		0.4	%		0.2	%
Non-accrual debt investments:
Non-accrual investments at fair value	$	50		$	50		$	6,352
Non-accrual investments as a percentage of debt investments		—	%		—	%		1.2	%
Number of investments on non-accrual		1			1			3
Interest rate type:
Percentage floating-rate		100.0	%		100.0	%		100.0	%
Yields:
Weighted average yield on debt investments (1)		7.8	%		7.7	%		7.1	%
Cash component of weighted average yield on debt investments		7.7	%		7.6	%		6.9	%
Weighted average yield on total portfolio investments (2)		7.8	%		7.7	%		6.9	%
Investment activity:
New investment commitments	$	93,100		$	91,800		$	136,200
New funded investment activity (3)	$	87,000		$	91,000		$	143,900
Proceeds from prepayments, exits, other paydowns and sales	$	73,100		$	101,700		$	161,400
Net new investments (4)	$	13,900		$	(10,700	)	$	(17,500	)
Number of new investment commitments in new portfolio companies		12			13			17
Number of new investment commitments in existing portfolio companies		7			2			3
Number of portfolio company exits		9			9			22

(1) Annual stated yield earned plus net annual amortization of original issue discount or premium earned on accruing investments, including our share of the return on debt investments in the OCSI Glick JV.

(2) Annual stated yield earned plus net annual amortization of original issue discount or premium earned on accruing investments and dividend income, including our share of the return on debt investments in the OCSI Glick JV.

(3) New funded investment activity is reflected net of original issue discount and includes drawdowns on existing revolver commitments.

(4) Net new investments consists of new funded investment activity less proceeds from prepayments, exits, other paydowns and sales.

As of December 31, 2018, the fair value of the Company’s investment portfolio was $553.4 million and was comprised of investments in 79 companies, including the Company’s investments in OCSI Glick JV LLC (“OCSI Glick JV”).

At fair value, 90.1% of the Company’s portfolio as of December 31, 2018 consisted of senior secured floating-rate debt investments, including 85.7% of first lien loans and 4.4% of second lien loans, and 9.9% consisted of a subordinated note investment in the OCSI Glick JV.

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As of December 31, 2018, there was one investment on which the Company had stopped accruing cash and/or PIK interest or original issue discount (“OID”) income that, in the aggregate, represented 0.14% of the debt portfolio at cost and 0.01% at fair value.

As of December 31, 2018, the OCSI Glick JV had $159.2 million in assets, including senior secured loans to 32 portfolio companies. The joint venture generated income of $1.5 million for Oaktree Strategic Income during the quarter ended December 31, 2018.

Liquidity and Capital Resources

As of December 31, 2018, the Company had $15.0 million of cash and cash equivalents (including restricted cash), total principal value of debt outstanding of $262.2 million, and $192.8 million of undrawn capacity on its credit facilities, subject to borrowing base and other limitations. The weighted average interest rate on debt outstanding was 4.5% as of December 31, 2018.

As of December 31, 2018, the Company’s total leverage ratio was 0.94x debt-to-equity.

Conference Call Information

Oaktree Strategic Income will host a conference call to discuss its first fiscal quarter results at 12:30 p.m. Eastern Time / 9:30 a.m. Pacific Time on February 7, 2019. The conference call may be accessed by dialing (877) 507-4376 (U.S. callers) or +1 (412) 317-5239 (non-U.S. callers), participant password “Oaktree Strategic Income.” During the earnings conference call, Oaktree Strategic Income intends to refer to an investor presentation that will be available on the Investors section of the Oaktree Strategic Income website, www.oaktreestrategicincome.com. Alternatively, a live webcast of the conference call can be accessed on Oaktree Strategic Income’s website.

For those individuals unable to listen to the live broadcast of the conference call, a replay will be available on Oaktree Strategic Income’s website, or by dialing (877) 344-7529 (U.S. callers) or +1 (412) 317-0088 (non-U.S. callers), access code 10127880, beginning approximately one hour after the broadcast.

About Oaktree Strategic Income Corporation

Oaktree Strategic Income Corporation (NASDAQ:OCSI) is a specialty finance company dedicated to providing customized capital solutions for middle-market companies in both the syndicated and private placement markets. The firm seeks to generate a stable source of current income while minimizing the risk of principal loss and, to a lesser extent, capital appreciation by providing innovative first-lien financing solutions to companies across a wide variety of industries. The Company is regulated as a business development company under the Investment Company Act of 1940, as amended. Oaktree Strategic Income is managed by Oaktree Capital Management, L.P. For additional information, please visit Oaktree Strategic Income’s website at www.oaktreestrategicincome.com.

Forward-Looking Statements

Some of the statements in this press release constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements may include statements as to: our future operating results and distribution projections; our business prospects and the prospects of our portfolio companies; and the impact of the investments that we expect to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in our annual report on Form 10-K. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment; risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or regulated investment

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companies; and other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.

We have based the forward-looking statements included in this presentation on information available to us on the date of this presentation, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Contacts

Investor Relations:

Oaktree Strategic Income Corporation

Michael Mosticchio

(212) 284-1900

ocsi-ir@oaktreecapital.com

Media Relations:

Financial Profiles, Inc.

Moira Conlon

(310) 478-2700

mediainquiries@oaktreecapital.com

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Oaktree Strategic Income Corporation

Consolidated Statements of Assets and Liabilities

	December 31, 2018 (unaudited)			September 30, 2018
ASSETS
Investments at fair value:
Control investments (cost December 31, 2018: $73,440,352; cost September 30, 2018: $73,501,970)	$	54,535,309		$	58,512,170
Non-control/Non-affiliate investments (cost December 31, 2018: $515,681,060; cost September 30, 2018: $499,423,794)		498,816,111			498,329,658
Total investments at fair value (cost December 31, 2018: $589,121,412; cost September 30, 2018: $572,925,764)		553,351,420			556,841,828
Cash and cash equivalents		6,892,598			10,439,023
Restricted cash		8,081,210			5,992,764
Interest, dividends and fees receivable		3,074,356			3,139,334
Due from portfolio companies		50,826			167,946
Receivables from unsettled transactions		2,939,282			5,143,533
Deferred financing costs		2,329,897			2,469,675
Derivative asset at fair value		—			45,807
Other assets		1,009,609			891,960
Total assets	$	577,729,198		$	585,131,870
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	552,712		$	649,781
Base management fee and incentive fee payable		1,139,267			1,915,682
Due to affiliate		2,855,707			1,700,952
Interest payable		2,549,429			1,130,735
Payables from unsettled transactions		30,419,142			8,932,500
Derivative liability at fair value		28,761			—
Director fees payable		50,000			—
Credit facilities payable		262,156,800			275,056,800
Total liabilities		299,751,818			289,386,450
Commitments and contingencies
Net assets:
Common stock, $0.01 par value, 150,000,000 shares authorized; 29,466,768 shares issued and outstanding as of December 31, 2018 and September 30, 2018		294,668			294,668
Additional paid-in-capital		370,751,389			370,751,389
Accumulated overdistributed earnings		(93,068,677	)		(75,300,637	)
Total net assets (equivalent to $9.43 and 10.04 per common share as of December 31, 2018 and September 30, 2018, respectively)		277,977,380			295,745,420
Total liabilities and net assets	$	577,729,198		$	585,131,870

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Oaktree Strategic Income Corporation

Consolidated Statements of Operations

(unaudited)

	Three months ended December 31, 2018			Three months ended September 30, 2018			Three months ended December 31, 2017
Interest income:
Control investments	$	1,485,423		$	928,198		$	1,198,697
Non-control/Non-affiliate investments		9,651,149			12,443,148			8,764,475
Interest on cash and cash equivalents		66,995			64,691			71,095
Total interest income		11,203,567			13,436,037			10,034,267
PIK interest income:
Control investments		—			528,743			295,151
Non-control/Non-affiliate investments		7,745			7,634			3,263
Total PIK interest income		7,745			536,377			298,414
Fee income:
Non-control/Non-affiliate investments		47,635			751,808			398,049
Total fee income		47,635			751,808			398,049
Total investment income		11,258,947			14,724,222			10,730,730
Expenses:
Base management fee		1,414,767			1,437,341			1,412,172
Part I incentive fee		854,378			1,180,825			259,722
Professional fees		458,612			308,234			1,020,183
Directors fees		105,000			105,000			130,000
Interest expense		3,222,954			5,482,159			2,764,477
Administrator expense		434,867			197,206			279,684
General and administrative expenses		332,226			446,961			435,210
Total expenses		6,822,804			9,157,726			6,301,448
Fees waived		(427,394	)		3,184			(117,493	)
Net expenses		6,395,410			9,160,910			6,183,955
Net investment income		4,863,537			5,563,312			4,546,775
Unrealized appreciation (depreciation):
Control investments		(3,915,243	)		275,475			(721,175	)
Affiliate investments		—			—			75,916
Non-control/Non-affiliate investments		(15,770,813	)		2,218,715			2,387,158
Foreign currency forward contract		(74,568	)		45,807			—
Net unrealized appreciation (depreciation)		(19,760,624	)		2,539,997			1,741,899
Realized gains (losses):
Affiliate investments		—			—			28
Non-control/Non-affiliate investments		1,447,306			379,381			(4,382,734	)
Foreign currency forward contract		249,090			(123,380	)		—
Net realized gains (losses)		1,696,396			256,001			(4,382,706	)
Net realized and unrealized gains (losses)		(18,064,228	)		2,795,998			(2,640,807	)
Net increase (decrease) in net assets resulting from operations	$	(13,200,691	)	$	8,359,310		$	1,905,968
Net investment income per common share — basic and diluted	$	0.17		$	0.19		$	0.15
Earnings (loss) per common share — basic and diluted	$	(0.45	)	$	0.28		$	0.06
Weighted average common shares outstanding — basic and diluted		29,466,768			29,466,768			29,466,768

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EX-99.2

First Quarter Fiscal Year 2019 Earnings Presentation February 7, 2019 Nasdaq: OCSI Exhibit 99.2

Forward Looking Statements Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation may include statements as to: our future operating results and distribution projections; the ability of Oaktree Capital Management, L.P. (“Oaktree”) to reposition our portfolio and to implement Oaktree’s future plans with respect to our business; our business prospects and the prospects of our portfolio companies; the impact of the investments that we expect to make; the ability of our portfolio companies to achieve their objectives; our expected financings and investments and additional leverage we may seek to incur in the future; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our portfolio companies; and the cost or potential outcome of any litigation to which we may be a party. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this presentation involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in our annual report on Form 10-K for the fiscal year ended September 30, 2018. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment; risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or regulated investment companies; and other considerations that may be disclosed from time to time in our publicly disseminated documents and filings. We have based the forward-looking statements included in this presentation on information available to us on the date of this presentation, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Unless otherwise indicated, data provided herein are dated as of December 31, 2018.

Q1 2019 Highlights Net investment income per share of $0.17 Net investment income increased 7% versus the quarter ended December 31, 2017 High quality of earnings as cash interest income represented approximately 95% of total investment income Board of Directors declared a dividend of $0.155 per share, payable on March 29, 2019 to stockholders of record as of March 15, 2019 Monetized approximately $11 million or 20% of non-core investments Non-core investments decreased to less than 10% of the portfolio at fair value as of December 31, 20181 Non-core investments have been reduced by 84% since Oaktree became investment adviser on October 17, 2017 Originated $93 million and funded $88 million of new investment commitments First lien originations represented 93% of new funded investments in 12 new and 7 existing portfolio companies 6.8% weighted average yield at cost of new funded investments Maintained conservative financial position Reduced borrowings by $13 million during the quarter to maintain operating flexibility in light of broader credit market volatility Approximately $70-$180 million of dry powder available to invest in order to increase leverage to our target long-term range of 1.2x-1.6x debt-to-equity 1 2 3 4 1Excludes investments in OCSI Glick JV LLC (“Glick JV”), a joint venture that invests primarily in senior secured loans to middle market companies.

Portfolio Summary as of December 31, 2018 (As % of total portfolio, at fair value; $ in millions) (As % of total portfolio, at fair value) Portfolio Composition Top 10 Industries3 Portfolio Characteristics (at fair value) $553 million invested in 79 companies 99.9% of the total portfolio consists of debt investments1 100% of debt portfolio consists of floating rate investments2 7.8% weighted average yield on debt investments1 $6 million average debt investment size2 < 1% Note:Numbers may not sum due to rounding. 1Includes the investments in Glick JV. 2Debt portfolio excludes the investments in the Glick JV. 3Excludes multi-sector holdings, which is primarily comprised of our investments in the Glick JV.

Portfolio Diversity OCSI’s portfolio is diverse across investments and industries (At % of total portfolio, at fair value) (As % of total portfolio, at fair value) Portfolio by Industry1,2 Diversity by Investment Size Top 10 Investments 25% Next 15 Investments 25% Remaining 53 Investments 40% Glick JV 10% Average Investment Size $6 million1 Industry Group % of Portfolio Software 10.1% Commercial Services & Supplies 9.4% IT Services 7.9% Media 6.5% Aerospace & Defense 6.2% Healthcare Providers & Services 6.0% Professional Services 5.5% Diversified Telecommunication Services 5.0% Pharmaceuticals 4.4% Oil, Gas & Consumable Fuels 4.1% Diversified Financial Services 3.1% Specialty Retail 2.9% Remaining 18 Industries 28.9% Average Industry Exposure 3.3% 1Excludes investments in the Glick JV. 2Based on GICS industry classifications.

Debt Portfolio Company Metrics OCSI’s portfolio has transitioned into higher quality, larger borrowers with lower leverage, reflecting our defensive investment approach Debt Portfolio Company EBITDA1 Debt Portfolio Company Leverage2 Median Debt Portfolio Company EBITDA ($ in millions) Source: S&P Global Market Intelligence. 1Excludes one negative EBITDA borrower. 2 Excludes one unfunded revolving credit facility and two investments on non-accrual, one of which was monetized during the quarter ended June 30, 2018. 3 Represents average debt multiples for CY 2018, as there were not enough middle market observations during the quarter to produce a meaningful average. 3 9/30/17 12/31/17 3/31/18 6/30/18 9/30/18 12/31/18 $67 $90 $83 $105 $110 $125

Non-core Investments: 9% of portfolio Non-core Investments: 58% of portfolio Historical Portfolio Progression Non-core performing private loans represent only 7% of OCSI’s portfolio ($ in millions, at fair value) Portfolio by Category1 1Excludes investments in the Glick JV. -84% Non-core Investments +116% Core Investments

Note:Numbers may not sum due to rounding. Non-core Investment Portfolio Detail Non-core Portfolio Characteristics Monetized approximately $11 million or 20% of non-core investments during the quarter ended December 31, 2018 Exited remaining non-core equity investment and two debt investments $47 million at fair value of non-core investments remain, consisting of the following: Private Loans $34 million at fair value in three companies Average debt price: 92.3% Liquid Investments $12 million at fair value in five companies Comprised of publicly quoted liquid loans Average debt price: 95.6% Non-accrual $0.05 million at fair value in one company Debt price: 5.0% (As % of non-core investment portfolio, at fair value; $ in millions) Non-core Investments by Type (At fair value; $ in millions) Non-core Portfolio Composition < 1%

Core Portfolio Progression Over 99% of OCSI’s core portfolio is comprised of senior secured investments Core Portfolio by Investment Type (At fair value, $ in millions) 99% Senior Secured < $1 < $1 < $1 < $1 < $1

Q1 2019 Portfolio Originations1 $93 million of new investment commitments $88 million of new funded investments $57 million in 12 new portfolio companies and $30 million in 7 existing portfolio companies Diversified across 15 industries 6.8% weighted average yield at cost on new investments 100% of new debt investment commitments at floating rates Average net leverage through tranche: 3.6x2 New Investment Highlights (As % of total portfolio, at fair value – top 10) New Investment Industry Composition (As % of total Q1 2019 funded commitments; $ in millions) New Investment Composition Note:Numbers rounded to the nearest million or percentage point. 1 New investments exclude fundings of existing revolver or delayed draw term loan commitments. 2 Excludes one new investment with negative EBITDA.

Historical Financial Information ($ in thousands, except per share data) Operating Results Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 Dec-18 Sep-18 Jun-18 Mar-18 Dec-17 Interest income $11,204 $13,436 $10,792 $9,121 $10,034 PIK interest income 8 536 571 782 298 Fee income 48 752 299 651 398 Total investment income 11,259 14,724 11,661 10,555 10,731 Base management fee 1,415 1,437 1,415 1,393 1,412 Part I incentive fee 854 1,181 1,002 480 260 Interest expense 3,223 5,482 3,235 2,898 2,764 Other operating expenses1 1,331 1,057 1,285 1,434 1,865 Total expenses 6,823 9,158 6,937 6,206 6,301 Fees recouped/(waived) (427) 3 (348) (240) (117) Net expenses 6,395 9,161 6,589 5,965 6,184 Net investment income 4,864 5,563 5,072 4,589 4,547 Net unrealized appreciation (depreciation) (19,761) 2,540 21,214 3,120 1,742 Net realized gains (losses) 1,696 256 (24,560) 973 (4,383) Net increase (decrease) in net assets resulting from operations ($13,201) $8,359 $1,725 $8,683 $1,906 Net investment income per common share $0.17 $0.19 $0.17 $0.16 $0.15 Net realized and unrealized gains (losses) per common share (0.62) 0.09 (0.11) 0.13 (0.09) Earnings (loss) per common share – basic and diluted ($0.45) $0.28 $0.06 $0.29 $0.06 Distributions per common share $0.155 $0.155 $0.145 $0.140 $0.190 Note:Results during Q1’18 occurred during management transition from Fifth Street Management LLC to Oaktree, which occurred on October 17, 2017. 1Includes professional fees, directors fees, administrator expenses and general and administrative expenses.

Historical Financial Information ($ in thousands, except per share data) Select Balance Sheet and Other Data Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 Dec-18 Sep-18 Jun-18 Mar-18 Dec-17 Investment Portfolio (at fair value) $553,351 $556,842 $570,794 $542,673 $541,408 Debt Outstanding1 262,157 275,057 258,550 257,978 251,905 Total Net Assets 277,977 295,745 291,953 294,501 289,944 Net Asset Value per share $9.43 $10.04 $9.91 $9.99 $9.84 Total Leverage 0.94x 0.93x 0.89x 0.88x 0.88x Weighed Average Yield on Debt Investments2 7.8% 7.7% 7.9% 7.9% 7.1% Cash Component of Weighted Average Yield on Debt Investments 7.7% 7.6% 7.7% 7.7% 6.9% Weighted Average Yield on Total Portfolio Investments3 7.8% 7.7% 7.8% 7.7% 6.9% Weighted Average Interest Rate on Debt Outstanding 4.5% 4.3% 4.3% 3.7% 3.6% Note:Results during Q1’18 occurred during management transition from Fifth Street Management LLC to Oaktree, which occurred on October 17, 2017. 1Net of unamortized financing costs. 2Annual stated yield earned plus net annual amortization of original issue discount or premium earned on accruing investments, including our share of the return on the debt investments in the Glick JV. 3Annual stated yield earned plus net annual amortization of original issue discount or premium earned on accruing investments and dividend income, including our share of the return on the debt investments in the Glick JV.

Historical Portfolio Activity  ($ in thousands) Q1’19 Q4’18 Q3’18 Q2’18 Q1’18 Dec-18 Sep-18 Jun-18 Mar-18 Dec-17 Investments at Fair Value $553,351 $556,842 $570,794 $542,673 $541,408 Number of Portfolio Companies 79 75 72 65 66 Average Portfolio Company Debt Investment Size $7,100 $7,600 $8,100 $8,500 $8,300 Asset Class: Senior Secured Debt 90.1% 89.1% 89.7% 89.0% 89.2% Glick JV 9.9% 10.5% 10.1% 10.7% 10.6% Equity 0.0% 0.4% 0.2% 0.3% 0.2% Interest Rate Type: % Floating Rate 100% 100% 100% 100% 100% Investment Activity at Cost: New Investment Commitments $93,100 $91,800 $113,600 $94,300 $136,200 New Funded Investment Activity1 87,000 91,000 114,300 94,700 143,900 Proceeds from Prepayments, Exits, Other Paydowns and Sales 73,100 101,700 83,800 98,400 161,400 Net New Investments2 13,900 (10,700) 30,500 (3,700) (17,500) Number of New Investment Commitments in New Portfolio Companies 12 13 15 11 17 Number of New Investment Commitments in Existing Portfolio Companies 7 2 1 0 3 Number of Portfolio Company Exits 9 9 8 12 22 Note:Results during Q1’18 occurred during management transition from Fifth Street Management LLC to Oaktree, which occurred on October 17, 2017. Numbers may not sum due to rounding. 1New funded investment activity is reflected net of original issue discount and includes drawdowns on existing revolver commitments. 2Net new investments consists of new funded investment activity less proceeds from prepayments, exits, other paydowns and sales.

Net Asset Value Per Share Bridge Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares outstanding for the period.

Capital Structure Overview As of December 31, 2018 1Long-term portfolio leverage may vary depending on market conditions. Multiple capital sources provides us with flexibility to optimize new investment fundings in order to maintain competitive borrowing costs Total leverage of 0.94x debt-to-equity Target leverage ratio of 1.2x to 1.6x1 Funding Sources as of December 31, 2018 Capacity Outstanding Interest Rate Maturity Deutsche Bank Facility $250.0 million $133.5 million LIBOR + 1.90% September 2019 Citibank Revolving Credit Facility $180.0 million $118.7 million LIBOR + 1.70%-2.25% July 2023 East West Bank Facility $25.0 million $10.0 million LIBOR + 2.85% January 2021

Opportunities to Increase Return on Equity Increase portfolio size to operate within long term target leverage ratio range of 1.2x to 1.6x debt-to-equity We expect it will take several quarters and will depend on market conditions in order to reach long term target range as we selectively deploy capital in new investment opportunities Total leverage of 0.94x debt-to-equity Utilize additional investment capacity at the Glick JV Invested in $151 million of investments across 32 companies as of the quarter ended December 31, 2018 Total remaining investment capacity of approximately $50 million (assuming 2.0x leverage) 93%first lien investments; 98% of debt portfolio consists of floating rate investments Modest increase in second lien investments Second liens represented 4% of the portfolio at fair value as of December 31, 2018 Rotation into higher yielding proprietary investments During the quarter, we increased our exposure to broadly syndicated loans as we are taking a disciplined and selective approach to investing in the current environment Broadly syndicated loans priced lower than LIBOR + 4.00% totaled $84.2 million as of December 31, 2018 1 2 3 4

Contact: Michael Mosticchio, Investor Relations ocsi-ir@oaktreecapital.com