Ladies and gentlemen, thank you for standing by. My name is Tajiri, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oxford Lane Capital Corp. Third Fiscal Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Jonathan Cohen, CEO. You may begin.

Thank you. Good morning, everyone, and welcome to the Oxford Lane Capital Corp. Third Fiscal Quarter 2026 Earnings Conference Call. I'm joined today by Saul Rosenthal, our President; Bruce Rubin, our CFO; and Joe Kupka, Managing Director. 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 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 Lane 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 by law. During this call, we will use terms defined in the earnings release and also refer to non-GAAP measures. For definitions and reconciliations to GAAP, please refer to our earnings release posted on our website at www.oxfordlanecapital.com. With that, I'll turn the presentation back to Jonathan.

Thank you, Bruce. On December 31, 2025, our net asset value per share stood at $15.51 compared to a net asset value per share of $19.19 as of the prior quarter. For the quarter ended December, we recorded GAAP total investment income of approximately $117.8 million, representing a decrease of approximately $10.5 million from the prior quarter. The quarter's GAAP total investment income consists of approximately $114.3 million from our CLO equity and CLO warehouse investments and approximately $3.5 million from our CLO debt investments and from other income. Oxford Lane reported GAAP net investment income of approximately $71.8 million or $0.74 per share for the quarter ended December compared to approximately $81.4 million or $0.84 per share for the quarter ended September 30. Our core net investment income was approximately $108.9 million or $1.12 per share for the quarter ended December compared with approximately $120 million or $1.24 per share for the quarter ended September 30. As of December 31, we held approximately $263.1 million in newly issued or newly acquired CLO equity investments that had not yet made initial distributions to Oxford Lane. For the quarter ended December, we recorded net unrealized depreciation on investments of approximately $305.4 million and net realized losses of approximately $7 million. We had a net decrease in net assets resulting from operations of approximately $240.7 million or $2.47 per share for the third fiscal quarter. As of December 31, the following metrics applied. We note that none of these metrics necessarily represented a total return to shareholders. The weighted average yield of our CLO debt investments at current cost was $17.3 million -- 17.3%, down from 17.4% as of September 30. The weighted average effective yield of our CLO equity investments at current cost was 13.8%, down from 14.6% as of September…

Thanks, Jonathan. During the quarter ended December 31, 2025, U.S. loan market performance declined versus the prior quarter. U.S. loan price index decreased from 97.06% as of September 30 to 96.64% as of December 31. The decrease in U.S. loan prices led to an approximate 2-point decrease in median U.S. CLO equity net asset values. Additionally, we observed median weighted average spreads across loan pools within CLO portfolios decreased to 311 basis points compared to 318 basis points last quarter. The 12-month trailing default rate for the loan index decreased to 1.2% by principal amount at the end of the quarter from 1.5% at the end of December 2025. We note that out-of-court restructurings, exchanges and subpar buybacks, which are not captured in the cited default rate remain elevated. CLO new issuance for the quarter totaled approximately $55 billion reflecting an approximate $2 billion increase from the previous quarter. Additionally, the U.S. CLO market saw approximately $74 billion in reset and refinancing activity in Q4 2025, compared to approximately $105 billion in the previous quarter. Oxford Lane remained active this quarter, investing over $97 million in CLO equity and warehouses. During the quarter, we also led or participated in more than 10 resets and refinancings, taking advantage of tightening liability spreads to lower the cost of funding and lengthen the weighted average reinvestment period of Oxford Lane's CLO equity portfolio from May 2029 to August 2029. We continue to evaluate existing investments for opportunities to improve the economics of our CLO equity positions. Our primary investment strategy during the quarter was to engage in relative value trading and seek to lengthen the weighted average reinvestment period of Oxford Lane's CLO equity portfolio. In the current market environment, we intend to continue to utilize our opportunistic and unconstrained CLO investment strategy across U.S. CLO equity debt and warehouses as we look to maximize our long-term total return. And as a permanent capital vehicle, we have historically been able to take a longer-term view towards our investment strategy. With that, I'll turn the call back over to Jonathan.

Thanks, Joe. Additional information about Oxford Lane's third quarter fiscal quarterly performance has been uploaded to our website at www.oxfordlanecapital.com. With that, the operator can now open the call for any questions.

[Operator Instructions] And our first question comes from the line of Mickey Schleien with Clear Street.

Jonathan, CLO equity funds have been very weak over the last year, even on a total return basis. And over that time, we've seen tighter loan spreads and while CLO liability spreads have been relatively stable, and that's pressured the returns on CLO equity. Some of that trend is being attributed to captive CLO funds, which are accepting lower stand-alone equity returns because they internalize the management and incentive fees. Could you give us a sense of what share of the primary market is represented by these captive funds?

Joe, do you want to take an estimate of that?

Yes. It's hard to say, given we don't have specific insight into that. I would say 2025 was probably a more balanced year since the arbitrage was still relatively attractive. Some third party continue to issue primary. I expect in 2026, the majority of that issuance if it continues, will be from these captive funds just given the compressed arbitrage.

And how do you assess the impact of those funds on the outlook for CLO equity returns for third-party investors like Oxford Lane? And do you think this is a secular trend, which permanently reduces expected returns for the equity tranche?

I mean it's really impossible to know, Mickey. The behavior of the world's largest credit investors, and whether they're manifesting a portion of their strategies in these captive CLO funds, these captive equity funds is just extraordinarily difficult to try to predict. That is certainly a potential factor in terms of future likely performance for CLO equity tranche investments, but I think there are a great deal of other factors that are equally or perhaps even more important.

Okay. If I could follow up, looking ahead, it seems like the constructive case for CLO equity would require more new money loan issuance from improved M&A activity which could help balance the loan market and perhaps widen loan spreads without a recession. So with that in mind, what's your outlook on the balance of supply and demand in the loan market this year and maybe next year?

We would like to think, Mickey, based on historical norms that, that balance will be restored, at least to some extent, over that time frame.

Our next question comes from the line of Erik Zwick with Lucid Capital Markets.

I wanted to start with a question just on the kind of reduction in the dividend level. And the way I hear you, Jonathan, is one of the big opportunities you see for Oxford Lane going forward is to continue taking advantage of the secondary market and attractive pricing and returns there. And that's one of the driving factors for the magnitude of the dividend cut and not so much your view into where the earnings power of the fund is going. Is that correct?

It's an interesting question, Erik, because we have never adhered to the dictum that we need to focus solely on the primary market or solely on the secondary market. For the last 15 years or so, we've had the flexibility, the investment flexibility to vacillate between those 2 opportunity sets. And at the moment, we are seeing what we consider to be generally strong opportunities in the secondary market for a host of reasons, many of which are related to what may be a fundamental supply-demand imbalance in the secondary market on a flow of funds basis. But to answer your question, the answer is we see probably more opportunities in the secondary than in the primary market. And given that we believe we are one of the world's largest market participants in the secondary market, we are trying to position ourselves to take advantage of those.

And just a bit of a follow-up on that one. The opportunities that you're seeing in the secondary market, I would assume, but opportunities buying things at discounts that if they perform well, would have a pull-to-par effect, which would kind of help in terms of your goal of supporting the NIM -- I'm sorry, the NAV and potentially [indiscernible] as well. Is that right?

Yes. Erik, I think that's definitely one of the profiles we're focusing on previously in times of more benign environments, you see a healthy premium to NAV based on trading levels in this environment with the arbitrage add or near historic types, you see that NAV compress or sometimes even flip. So the optionality -- you really see that optionality in terms of capturing the NAV, whether that's through a reset plays or just liquidation of the CLO [indiscernible]. So yes, there's definitely potential to support the NAV with those profiles.

And then for my next question, I haven't fully gone through and fine-tune my forward estimates, but just kind of quick back to the calculations would suggest that the earnings power of the fund is still in excess of the distribution -- the new distribution level that you've disclosed. So is there a potential then for a special dividend at some point over the next year or so? And if so, does -- would that be on a calendar year? Or based on your fiscal year, which ends March of each year, how would you think about that?

We think about that, Erik, principally in terms of maintaining compliance with the RIC test under the code, under the tax code. So to the extent necessary or to the extent that we want or need to reflect the earnings level of the fund in the distributions yes, we -- it is certainly possible that we declare a special dividend or modify the existing rate of distribution to comport with those fundamentals.

Got it. And timing on that when you do your RIC test, is it the calendar year? Or is it based on your fiscal year reporting? I can't recall how that's done.

Fiscal, so March.

Fiscal. Got it. And last one for me. Either Jonathan or Joe, if you could just kind of frame the current opportunity for resets and refis in your portfolio and how that could potentially support cash flow going forward?

Yes, this year should be a very active year in terms of resets and refis for us this past year. 2025 was also very active. We participated or led about 70 resets of refinancings. We have a few in Q1 and Q2 that are rolling off non-call. And starting in July, we have a lot of our portfolio rolling off that we see AAA spreads generally in the 130s or 140s just based on where AAAs were 2 years ago when we initially issued those deals. So just based on the timing, we see a lot of take some kind of action.

Right. Market fundamentals permitting.

There are no further questions at this time. I would like to turn the call back over to our CEO, Jonathan Cohen for closing remarks.

Thank you very much. I'd like to thank everybody on the line and everybody who's listening to the replay for their interest in Oxford Lane Capital Corp. and their participation on this call. Thank you very much.

Ladies and gentlemen, that concludes today's call. Thank you all for joining in. You may now disconnect.