Oxford Square Capital Sees NAV Drop to $1.69, Distress Ratio Rises to 4.34%
Net asset value per share declined to $1.69 from $1.95 in Q4 2025, driven by significant unrealized losses in CLO equity portion and a 265 basis point drop in CCC-rated loan prices. Distress ratio climbed to 4.34% from 2.88% as spreads widened while investing $18 million in first-lien B2B loans.
1. Q4 NAV and CLO Equity Losses
Oxford Square recorded a NAV per share of $1.69 for Q4 2025, down from $1.95 at the prior quarter end. The decline was driven by significant unrealized losses in the CLO equity portion of its portfolio and a 265 basis point drop in CCC-rated loan prices.
2. Distress Ratio and Market Volatility
The distress ratio increased to 4.34% from 2.88% as broader volatility in the U.S. loan market expanded loan spreads. Management noted growing concerns within software private credit and syndicated loan sectors, reflecting pushback against rapid private credit growth.
3. Targeted Investment Strategy
During the quarter, the company deployed $18 million into first-lien B2B loans to capture value from market pricing dispersion. Despite overall pressure, B-rated loan pricing showed a slight improvement, underscoring selective opportunity amid market stress.