OFS Credit Company, Inc. announced an estimated net asset value (NAV) per share of $2.88 to $2.98 for the period ending September 30, 2026.

The company, which primarily invests in collateralized loan obligation (CLO) equity and debt securities, stated that this management estimate is unaudited and has not undergone typical quarter-end financial closing procedures. Consequently, the preliminary data does not constitute a comprehensive statement of the company's financial condition or results for the month ended September 30, 2026.

NAV Estimate Details

The reported range represents the company's internal assessment of its common stock value at the end of the first quarter of fiscal year 2027. Investors are advised that current estimates may differ materially from future determinations, including those for the period ending October 31, 2026, which will be detailed in the Annual Report on Form N-CSR.

Market and Operational Risks

The company highlighted that its financial condition and portfolio fair values may be materially impacted by known and unknown circumstances after September 30, 2026. Specific factors cited include interest rate and inflation changes, geopolitical conflicts in Ukraine and the Middle East, and economic policies under the U.S. Presidential administration.

Additional risks mentioned include:

• Tariff enactments and tax reductions.
• Trade disputes with other countries.
• Instability in U.S. and international banking systems.
• The risk of recession or prolonged shutdowns of U.S. government services.

These factors could adversely affect the company's future NAV, net investment income, and the underlying value of its investments.

Audit and Verification Status

KPMG LLP has not audited, reviewed, compiled, or applied agreed-upon procedures to this preliminary financial data. Accordingly, KPMG LLP does not express an opinion or any other form of assurance regarding these figures. The data remains the responsibility of OFS Credit’s management.

What the Numbers Show

The disclosure of a specific NAV range ($2.88–$2.98) without accompanying revenue or income metrics indicates a focus on asset valuation rather than operational earnings for this interim update. The explicit disclaimer that KPMG LLP has not reviewed the data underscores the provisional nature of this valuation, distinguishing it from audited quarterly reports.

OFS Credit Company, Inc. (NASDAQ: OCCI) reported mixed results for its fiscal third quarter ended July 31, 2026, with non-GAAP Core NII rising 15% while net asset value contracted by 11%.

The company’s adjusted earnings per share of $0.21 missed analyst estimates of $0.23 by 8.7%. Similarly, interest income of $8.6 million fell short of the $9.4 million consensus. These misses reflect continued pressure on investment fair values and portfolio shrinkage.

Financial Performance

Net investment income (NII) fell to $4.2 million, or $0.14 per common share, down from $4.4 million in the prior quarter. The decline was driven by a smaller average investment portfolio at cost and lower interest income yields. However, non-GAAP Core NII rose 14.9% to $6.3 million ($0.21 per share), providing ample coverage for the company's quarterly distribution of $0.15 per share.

The company recorded a net loss on investments of $11.3 million, comprising $2.4 million in realized losses and $8.9 million in unrealized depreciation. This resulted in a net decrease in net assets from operations of $7.1 million. Consequently, NAV per common share declined by $0.40 to $3.32 as of July 31, 2026, compared to $3.72 at the end of the prior quarter.

Total operating expenses decreased by $0.4 million to $4.4 million, primarily due to a reduction in interest expense following aggregate preferred stock redemptions of $26.0 million during the prior quarter. Interest income fell to $8.6 million from $9.2 million in the previous quarter.

Portfolio Composition

As of July 31, 2026, the total fair value of the investment portfolio stood at $181.5 million, down from $197.4 million at the end of the prior quarter. The portfolio consisted primarily of broadly syndicated loan CLOs ($177.7 million) and middle-market loan CLOs ($3.8 million). The weighted-average effective yield was 11.67%, slightly up from 11.64% in the prior quarter.

The CLO equity cash flow yield was 14.46% based on amortized cost. The company made limited new investments, purchasing $0.9 million in CLO equity investments during the quarter, compared to none in the prior period.

Distributions and Capital Actions

The board declared monthly cash distributions of $0.05 per common share for September and October 2026. This implies an annualized cash distribution rate of 24.4% based on the closing market price of $2.46 per share on July 31, 2026.

Additionally, the company redeemed $5.0 million of its 5.25% Series E Term Preferred Stock on August 31, 2026, at 100% of principal amount. The asset coverage ratio for senior securities remained well above regulatory requirements at 209.1%, compared to 221.3% in the prior quarter.

What the Numbers Show

A significant divergence exists between GAAP earnings and cash-generating ability. While GAAP NII contracted due to portfolio shrinkage and yield compression, Core NII expanded by nearly 15%. This growth in Core NII was driven by an increase in cash flows from issuers making their first payments subsequent to initial investment, highlighting that operational cash generation improved even as fair values declined.