OFS Credit Company (NASDAQ:OCCI) (“OFS Credit,” the “Company,” “we,” “us” or “our”), an investment company that primarily invests in collateralized loan obligation (“CLO”) equity and debt securities, today announced that its Board of Directors has declared $0.52 per share quarterly distributions for common stockholders for each of the quarters ending July and October 2020.
The distributions will be paid in cash or shares of our common stock at the election of stockholders. The total amount of cash distributed to all stockholders will be limited to 10% of each total distribution to be paid, excluding any cash paid for fractional shares. The remainder of each distribution (approximately 90%) will be paid in the form of shares of our common stock. The exact distribution of cash and stock to any given stockholder will be dependent upon his/her election as well as elections of other stockholders, subject to the pro-rata limitation.
Management believes that the cash and stock distribution rate, which is equivalent to the quarterly rate paid by the Company for the quarter ended April 30, 2020, will allow the Company to strengthen its balance sheet and to be in position to capitalize on potential future investment opportunities. Management believes its commitment to strong, long-term performance is aligned with the interests of OFS Capital Management, LLC, our investment advisor who, together with other insiders, own approximately 15.26% of the Company’s common stock.
The following schedule applies to the distributions for common stockholders of record on the close of business of each specific Record Date:
Distribution Per Share
June 16, 2020
July 31, 2020
September 15, 2020
October 30, 2020
The amount, details and U.S. federal income tax consequences of the distributions will be described in the election form and accompanying materials that will be mailed to stockholders in connection with each distribution promptly following each applicable record date. For the July distribution, election forms must be returned on or before 5:00 p.m. Eastern Time on July 16, 2020 to be effective. For the October distribution, election forms must be returned on or before 5:00 p.m. Eastern Time on October 15, 2020 to be effective. Stockholders who do not return a timely and properly completed election form before the applicable election deadline will be deemed to have made an election to receive 100% of their distribution in stock.
Participants in the Company's dividend reinvestment plan will also receive an election form. The investment feature of the dividend reinvestment plan will be suspended for each of these distributions and will be reinstated after these distributions have been completed.
Stockholders who hold their shares through a bank, broker or nominee, or in “street name” will not receive an election form directly from the Company and should receive information regarding the election process from their bank, broker or nominee. Street name holders should contact their bank, broker or nominee for additional information.
Regardless of whether a stockholder receives these distributions in cash, stock, or some combination of cash and stock, the Company expects that entire amount of these distributions will be fully taxable to stockholders.
In addition, the Board of Directors has declared cash dividends on shares of the Company’s preferred stock through January 2021. For the Company’s preferred stock, the Board declared six monthly cash dividends of $0.1432292 per preferred share. The following schedule applies to the dividends for preferred stockholders of record on the close of business of each specific Record Date:
Dividend Per Share
August 24, 2020
August 31, 2020
September 23, 2020
September 30, 2020
October 23, 2020
October 30, 2020
November 23, 2020
November 30, 2020
December 24, 2020
December 31, 2020
January 22, 2021
January 29, 2021
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 equity and debt 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 Chicago, Illinois with additional offices in New York and Los Angeles.
Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to: management’s beliefs that the cash and stock distribution will allow the Company to strengthen its balance sheet and to be in position to capitalize on potential future investment opportunities, when there can be no assurance either will occur; the Company's commitment to strong, long-term performance and the alignment of that performance to the ownership of the Company's common stock by affiliated parties; the tax consequences of the distributions to stockholders; and other factors 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 a result of such risks, uncertainties and factors, actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. OFS Credit is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
1 Registration does not imply a certain level of skill or training.