OFS Credit Company, Inc. (OCCI): History, Ownership, Mission, How It Works & Makes Money

OFS Credit Company, Inc. (OCCI) is offering an estimated annual dividend yield over 28%-but is that massive income stream masking a defintely deeper capital issue you need to understand?

As a closed-end fund focused on complex Collateralized Loan Obligation (CLO) securities, OCCI's business model generated an annualized revenue base of approximately $32.55 million in the 2025 fiscal year, yet its Net Asset Value (NAV) per share dropped to an estimated range of $5.41 to $5.51 by October 2025. If you're an investor looking at this $125.55 million market cap player, you need to know how its core strategy of capturing the spread on CLOs actually works and why distributions are currently outrunning its Net Investment Income. Let's map out the history, ownership, and precise mechanics of how OCCI makes money so you can decide if that high yield is a sustainable return or a slow return of your own capital.

OFS Credit Company, Inc. (OCCI) History

OFS Credit Company, Inc. (OCCI) is a specialized investment vehicle that gives you access to the complex world of structured credit, primarily Collateralized Loan Obligation (CLO) equity and debt securities. The company's story is less about a garage startup and more about a strategic public launch by an established asset manager, OFS Capital Management, LLC, to capitalize on the high-yield potential in CLOs.

To be fair, the company's trajectory has been a classic example of a fund navigating credit cycle volatility, from a strong IPO to a sharp market test in 2020, and then a significant recovery and strategic growth phase leading up to late 2025.

Given Company's Founding Timeline

Year established

OFS Credit Company was legally incorporated in Delaware on February 14, 2017, but it didn't commence investment operations until after its Initial Public Offering (IPO) in October 2018. I defintely use the 2018 operational start as the real beginning.

Original location

The company is headquartered in Chicago, Illinois, but its investment strategy and day-to-day operations are managed by its external investment advisor, OFS Capital Management, LLC, which is located in Rolling Meadows, Illinois. This external management structure is key to its operational model.

Founding team members

The company was established by its investment advisor, OFS Capital Management, LLC, an affiliate of Orchard First Source Asset Management (OFSAM). The strategic direction is guided by the advisor's leadership team, including Bilal Rashid, who serves as the Chairman, President, and Chief Executive Officer of OFS Credit Company, Inc.

Initial capital/funding

OFS Credit Company, Inc. raised approximately $48.5 million in gross proceeds during its Initial Public Offering (IPO) in October 2018, issuing 2,425,000 shares at $20.00 per share. That capital immediately funded its initial portfolio of CLO investments.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The company's history is defined by two major structural decisions and its ability to weather a major financial shock.

• The External Management Model: The decision to be externally managed by OFS Capital Management, LLC, was foundational. This move immediately provided the company with a seasoned team that had dual experience as both a CLO equity investor and a CLO manager, leveraging an existing platform with approximately $4.1 billion in assets under management as of June 30, 2025.
• The CLO Focus: Unlike broader Business Development Companies (BDCs), OFS Credit Company, Inc. chose a highly specialized focus on Collateralized Loan Obligation (CLO) equity and debt. This specialization, while increasing risk concentration, allows it to target higher yields, which is its primary investment objective.
• The 2020 Stress Test: The market turbulence in 2020 forced the company to actively manage its portfolio to mitigate the impact of plummeting CLO valuations. This experience proved the necessity of its active management strategy and set the stage for the subsequent NAV recovery.

Looking at the most recent data, the preliminary estimates for the fiscal quarter ended October 31, 2025, show an estimated Net Asset Value per share between $5.41 and $5.51, with $115.9 million of term preferred stock outstanding. That's the quick math on where the company stands today. For a deeper dive into these figures, you should read Breaking Down OFS Credit Company, Inc. (OCCI) Financial Health: Key Insights for Investors.

OFS Credit Company, Inc. (OCCI) Ownership Structure

OFS Credit Company, Inc. (OCCI) operates as a non-diversified, externally managed closed-end fund (CEF), meaning its investment activities are directed by an external entity, OFS Capital Management, LLC, which is a key part of its governance. The ownership structure is dominated by a large percentage of retail and other non-institutional investors, with institutional and insider holdings representing a smaller but still significant portion of the common stock.

Given Company's Current Status

OFS Credit Company, Inc. is a publicly traded closed-end management investment company, listed on the NASDAQ exchange under the ticker symbol OCCI. As a closed-end fund, it has a fixed number of shares outstanding, which stood at 27,716,012 common shares as of November 20, 2025. Its primary investment objective is to generate current income, mainly through investments in collateralized loan obligation (CLO) equity and debt securities.

The company is externally managed by OFS Capital Management, LLC, which is a subsidiary of Orchard First Source Asset Management, LLC. This management structure is crucial because the external manager drives the investment strategy and day-to-day operations, not the shareholders directly. This is a critical distinction for investors to understand when evaluating the stock. You can find a deeper dive into the fund's performance and strategy in Breaking Down OFS Credit Company, Inc. (OCCI) Financial Health: Key Insights for Investors.

Given Company's Ownership Breakdown

The ownership structure of OFS Credit Company, Inc. is notable for its high concentration of retail and other individual investors, which is common in smaller closed-end funds. As of November 2025, the total shares outstanding were 27,716,012. Institutional investors hold a total of 1,459,693 shares. Here's the quick math on the breakdown:

The low institutional ownership percentage-just over 5%-means the stock price can defintely be more volatile than those with higher institutional backing. Retail investor sentiment plays a much larger role here, so watch the trading volume closely.

Given Company's Leadership

The leadership team is responsible for overseeing the company's operations and investment strategy, working in conjunction with the external advisor, OFS Capital Management, LLC. The key executives steering the organization as of November 2025 are:

• Bilal Rashid: Chairman of the Board, President, and Chief Executive Officer. Mr. Rashid has served in this role since 2017 and brings over 25 years of experience in corporate and structured credit.
• Kyle Spina: Treasurer and Chief Financial Officer. Appointed effective March 31, 2025, Mr. Spina oversees finance and accounting, bringing over 15 years of experience in public and private accounting.
• Mukya Sue Denise Porter J.D.: Chief Compliance Officer. Ms. Porter manages compliance and risk management for the company and its affiliated entities.
• Richard S. Ressler J.D.: Chairman of the Structured Credit Investment Committee.
• Tod Kevin Reichert J.D.: Corporate Secretary.

This team is highly integrated with the external manager, Orchard First Source Asset Management, LLC, with several executives holding similar positions across the affiliated OFS entities, which helps ensure a consistent strategy across the entire platform.

OFS Credit Company, Inc. (OCCI) Mission and Values

OFS Credit Company, Inc.'s core purpose transcends simple returns, focusing on generating a predictable stream of current income for its shareholders, backed by a disciplined investment strategy in structured credit. The company's values are rooted in leveraging deep expertise in the Collateralized Loan Obligation (CLO) market to manage risk and maximize shareholder value.

OFS Credit Company, Inc.'s Core Purpose

The company's cultural DNA is built on a clear mandate: deliver income now, plus the potential for growth later, all through a specialized, high-yield asset class.

Official mission statement

The formal mission is defined by its investment objective, which is the bedrock of its operation and capital allocation. This objective guides every decision, from portfolio construction to risk management.

• Generate current income as the primary investment objective.
• Achieve capital appreciation as a secondary objective.
• Focus investments primarily on Collateralized Loan Obligation (CLO) equity and debt securities.

Here's the quick math: the company's estimated Net Investment Income (NII) per share for the fiscal quarter ending October 31, 2025, was between $0.20 and $0.24, which directly reflects this core income-generation mission. You can see this commitment in the consistent monthly all-cash distribution of $0.115 per common share declared for that same quarter.

Vision statement

The vision for OFS Credit Company, Inc. is to be a leading public vehicle for investors seeking exposure to the CLO asset class, distinguishing itself through specialized underwriting and deep market experience.

• Maintain a competitive advantage by leveraging decades of experience in underwriting, analyzing, and valuing underlying loan portfolios of CLOs.
• Sustain a disciplined investment approach by focusing on CLOs that primarily hold floating rate, first lien, senior secured loans to large U.S. corporations.
• Provide public investors with access to this complex asset class where management believes there are defintely limited options.

What this estimate hides is the strategic value of the portfolio; the estimated Net Asset Value (NAV) per share was between $5.41 and $5.51 as of October 31, 2025, which represents the current value of that vision. You should also check out Exploring OFS Credit Company, Inc. (OCCI) Investor Profile: Who's Buying and Why? for more on who is betting on this vision.

OFS Credit Company slogan/tagline

OFS Credit Company, Inc. does not appear to use a widely publicized, formal slogan or tagline in its investor communications, instead relying on the clear articulation of its investment objective and the track record of its advisor, OFS Capital Management, LLC.

The closest functional tagline is the clear statement of its investment focus: 'Generating current income, with a secondary objective of generating capital appreciation primarily through investment in CLO equity and debt securities.'

OFS Credit Company, Inc. (OCCI) How It Works

OFS Credit Company, Inc. (OCCI) operates as a publicly traded, closed-end fund that generates income for its shareholders by investing primarily in the high-yield, complex world of Collateralized Loan Obligation (CLO) debt and equity securities. It's an investment vehicle that gives you direct access to a diversified pool of corporate loans, managed by seasoned credit professionals.

OFS Credit Company, Inc.'s Product/Service Portfolio

OFS Credit Company, Inc. is not a direct lender; its product is the investment portfolio itself, which is structured to deliver income and capital appreciation to its shareholders. The company's offerings are the securities it holds, which fall into two main categories of the CLO structure.

OFS Credit Company, Inc.'s Operational Framework

OCCI is an externally managed closed-end fund, meaning its day-to-day investment decisions are handled by an advisor, OFS Capital Management, LLC. This structure is key to how they create value, as the manager is responsible for all the heavy lifting-sourcing, underwriting, and managing the complex CLO portfolio.

• External Management: OFS Capital Management, LLC, an experienced investment advisor, manages the portfolio, relieving shareholders of the operational burden. The manager had approximately $4.1 billion of assets under management as of June 30, 2025.
• Investment Sourcing and Underwriting: The manager uses its deep market relationships to source investments in CLO tranches, focusing on those backed by diversified pools of floating-rate, first-lien senior secured loans to U.S. corporations.
• Value Realization (The Mechanics): The company generates net investment income (NII) from the interest payments and distributions received from its CLO debt and equity holdings. For the fiscal quarter ended October 31, 2025, the preliminary estimate for NII per common share ranged from $0.20 to $0.24.
• Capital Structure: OCCI uses term preferred stock to finance its investments, which totaled $115.9 million outstanding as of October 2025. This leverage aims to boost returns for common stockholders, but it also increases risk.

Here's the quick math: The manager buys CLO securities, the underlying loans pay interest, and that cash flow, after expenses and debt payments, becomes the income distributed to you, the shareholder.

OFS Credit Company, Inc.'s Strategic Advantages

The company's success hinges on its ability to navigate the complex and often illiquid CLO market, a space where expertise defintely matters. Their advantages map directly to the quality and experience of their external manager.

• CLO Structuring Expertise: The management team has decades of experience structuring and investing in CLOs, giving them a distinct edge in analyzing the underlying collateral and modeling potential cash flows, which few public investors can replicate.
• Floating-Rate Hedge: The underlying assets in CLOs are primarily floating-rate loans, meaning their interest payments rise with benchmark rates. This provides a natural hedge against inflation and rising interest rates, which is a crucial advantage in the current economic climate.
• Public Access to an Institutional Asset Class: OCCI is one of the few publicly traded vehicles that allows a broad spectrum of investors to access the CLO equity and debt asset class, which is typically reserved for large institutions.
• Attractive Valuation Metric: As of October 31, 2025, the company's stock was trading at a significant discount to its estimated Net Asset Value (NAV) per share range of $5.41 to $5.51, suggesting a potential opportunity for capital appreciation if the discount narrows.

If you want to dive deeper into the financial health and risk profile of this model, you should read Breaking Down OFS Credit Company, Inc. (OCCI) Financial Health: Key Insights for Investors.

OFS Credit Company, Inc. (OCCI) How It Makes Money

OFS Credit Company, Inc. (OCCI) generates its revenue almost entirely through investment income, specifically by acquiring and managing a portfolio of structured credit products, primarily Collateralized Loan Obligation (CLO) equity and debt securities. The core business is capturing the spread between the high yields generated by these assets and the company's financing and operating costs.

OFS Credit Company's Revenue Breakdown

For the 2025 fiscal year, OFS Credit Company recorded an annualized revenue base of approximately $32.55 million, reflecting the yield from its portfolio of floating-rate credit instruments. The revenue is overwhelmingly driven by its investments in CLOs, which are split into two primary income streams based on the tranche position.

I've broken down the investment income this way because the CLO equity tranche is the high-risk, high-reward piece that drives the massive cash flow yields, which were as high as 17.48% in the third fiscal quarter of 2025. The overall revenue growth rate was a solid 23.38% over the last twelve months, reflecting a clear 'Increasing' trend across the board.

Business Economics

The economics of OFS Credit Company center on the complexities of the Collateralized Loan Obligation (CLO) market. This isn't a simple lending business; it is a spread-capture operation. The company buys CLO securities, which are backed by a diversified pool of senior secured corporate loans.

• Pricing Strategy: The company's profit is the difference between the interest income received from the underlying corporate loans within the CLOs and the fixed-cost financing of the CLO structure itself. It's a classic net interest spread business, but with highly structured assets.
• CLO Equity vs. Debt: CLO equity investments are the most junior tranche, meaning they get the residual cash flow after all debt tranches are paid. This is the source of the high cash flow yield and the volatility. CLO debt tranches are higher up the capital structure, offering more stable, but lower, interest income.
• Leverage: OFS Credit Company uses leverage, primarily through term preferred stock, to enhance returns. As of October 31, 2025, the company had $115.9 million of term preferred stock outstanding. This leverage is what amplifies both gains and losses.
• Core NII vs. GAAP NII: You need to understand the difference between Net Investment Income (NII) and Core Net Investment Income (Core NII). Core NII is a non-GAAP measure that management uses as a better indicator of distributable operating income because it adjusts for the difference between the cash distributions actually received from CLO equity and the income recognized under GAAP.

You can get a deeper dive into the firm's strategic framework by reading their Mission Statement, Vision, & Core Values of OFS Credit Company, Inc. (OCCI).

OFS Credit Company's Financial Performance

As a seasoned investor, you know the real story is in the numbers, and OFS Credit Company's recent fiscal year-end estimates show a clear trend: high yield, but a persistent coverage shortfall.

• Net Asset Value (NAV) Decline: The preliminary estimate for the Net Asset Value per share as of October 31, 2025, was between $5.41 and $5.51. This is a noticeable drop from the $6.13 NAV per share reported at the end of the third fiscal quarter on July 31, 2025.
• Distribution Coverage Shortfall: The primary reason for the NAV decline is that the quarterly distributions of $0.345 per share have consistently exceeded the Core Net Investment Income (Core NII). For the quarter ended July 31, 2025, Core NII was only $0.31 per share.
• Net Investment Income (NII): The unaudited estimate for NII per share for the fourth fiscal quarter ended October 31, 2025, is a range between $0.20 and $0.24. This persistent gap means the high distribution yield is, defintely, partly a return of capital, which erodes the NAV over time.
• Total Portfolio Value: As of July 31, 2025, the total fair value of the investment portfolio stood at $279.4 million. The portfolio's interest income yield was 14.38% for the third fiscal quarter of 2025.

Here's the quick math: paying out more than you earn, even on a Core NII basis, is a slow liquidation of capital. The market is currently pricing this risk in, with the stock trading at a significant discount to the estimated NAV.

OFS Credit Company, Inc. (OCCI) Market Position & Future Outlook

OFS Credit Company, Inc. (OCCI) maintains a niche position in the structured credit market, focusing on Collateralized Loan Obligation (CLO) equity and debt, which offers high-income potential but comes with elevated volatility. The near-term outlook is mixed, with preliminary fiscal year 2025 results showing a Net Asset Value (NAV) per share estimate between $5.41 and $5.51, but the company must navigate significant credit market risks to stabilize its valuation and reverse its multi-year revenue decline.

Honestly, the market is challenging, so managing that core CLO portfolio with precision is everything right now.

Competitive Landscape

In the publicly traded closed-end fund space for CLO investments, OFS Credit competes against a few larger, more established players. The key differentiator for OFS Credit is its direct link to OFS Capital Management, LLC, which has a 25-year history in the leveraged loan market, giving them deep underwriting expertise in the underlying assets of CLOs.

Opportunities & Challenges

As a seasoned analyst, I see clear opportunities tied to the floating-rate nature of their assets, but these are balanced by macro-level credit risks that could quickly erode value. The company's total investments were approximately $252.2 million as of the second fiscal quarter of 2025, so every percentage point move in credit spreads matters a great deal.

Industry Position

OFS Credit occupies a specialized, high-risk, high-reward corner of the broader asset management industry. It is a closed-end management investment company (CEF) focused almost exclusively on the CLO asset class, which totals approximately $1.1 trillion globally.

• Niche Focus: The company's primary investment in CLO equity (the riskiest, highest-yielding tranche of a CLO) positions it for outsized income but also significant capital volatility.
• Small Scale: With an AUM of roughly $148.14 million, OFS Credit is a smaller player compared to peers like Oxford Lane Capital Corporation, which limits its scale advantages in portfolio diversification.
• Management Alignment: Insiders own approximately 3.7% of the common shares as of July 2025, which suggests a decent alignment of interests with common stockholders.
• Financial Health Caveats: While the balance sheet shows strong financial strength with no debt at the fund level, the profitability metrics are weak, with a net margin of -1.13% for the trailing twelve months (TTM) as of late 2025.

To be fair, the company is defintely a play on the CLO cycle, not a broad credit fund. If you want to dive deeper into the shareholder base, you can read Exploring OFS Credit Company, Inc. (OCCI) Investor Profile: Who's Buying and Why?