Oxford Square Capital Corp. (OXSQ): History, Ownership, Mission, How It Works & Makes Money

As a seasoned investor, you're defintely asking: how does Oxford Square Capital Corp. (OXSQ), a Business Development Company (BDC), carve out its niche in a $147.5 million market cap space while focusing heavily on Collateralized Loan Obligations (CLOs)? The answer lies in its core strategy, which generated approximately $10.2 million in total investment income in the third quarter of 2025, primarily from a portfolio with a fair value of around $243.2 million as of Q1 2025. This deep dive will show you how this structure works to deliver a Net Asset Value (NAV) of $1.95 per share, and why its unique ownership-where institutional giants like BlackRock hold positions-is so critical to its future.

Oxford Square Capital Corp. (OXSQ) History

You're looking for the foundational story of Oxford Square Capital Corp. (OXSQ), and honestly, it's a tale of two major strategic pivots. The company started small, focused on a niche, and then evolved twice to chase better risk-adjusted returns in the broader debt markets. This evolution from a tech-focused lender to a specialist in Collateralized Loan Obligations (CLOs) is the key to understanding their current model.

Given Company's Founding Timeline

Year established

The company was founded in July 2003.

Original location

The original and current headquarters is in Greenwich, Connecticut.

Founding team members

While the initial incorporation was for Technology Investment Capital Corp., the firm's trajectory has been consistently guided by key figures like Jonathan H. Cohen, the Chief Executive Officer, and Saul B. Rosenthal, the President and Chief Operating Officer. They are the principals who control the investment adviser, Oxford Square Management, LLC.

Initial capital/funding

The initial funding came from an Initial Public Offering (IPO) of common stock, which was completed shortly after founding in November 2003. The firm elected to be regulated as a Business Development Company (BDC) and a Regulated Investment Company (RIC) from its first taxable year in 2003.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The company's history is defintely defined by two major transformative decisions, both focused on moving away from a traditional middle-market lending model toward structured finance. This was a necessary move to try and maximize total return, especially current income, for shareholders.

• The 2007 Sector Broadening: Changing the name from Technology Investment Capital Corp. to TICC Capital Corp. in December 2007 was the first major pivot. This freed the firm from its 80% technology investment mandate, allowing it to pursue a wider range of debt and equity investments in various sectors.
• The 2016 CLO Focus: The most significant shift was the strategic pivot around 2016 to heavily emphasize Collateralized Loan Obligation (CLO) equity and debt tranches. This move fundamentally changed the risk/return profile, making the company a niche player in the BDC space. CLO equity is complex, but it offers the potential for very high cash yields.
• The 2018 Rebranding: The final name change to Oxford Square Capital Corp. in March 2018 solidified the new identity and investment strategy, linking it directly to the Oxford investment platform known for CLO expertise.
• Near-Term Capital Action (2025): Looking at the 2025 fiscal year, the Q3 2025 results showed a Net Asset Value (NAV) per share of $1.95. The board's authorization of a $25 million share repurchase program in the same quarter is a clear, actionable signal that management believes the stock is undervalued relative to its long-term potential, even as Net Investment Income (NII) for the quarter was approximately $5.6 million. This is a concrete step to support shareholder value.

To understand how these shifts impact current performance, you should look at Breaking Down Oxford Square Capital Corp. (OXSQ) Financial Health: Key Insights for Investors.

Oxford Square Capital Corp. (OXSQ) Ownership Structure

Oxford Square Capital Corp. (OXSQ) is controlled primarily by a highly dispersed base of retail shareholders, a common feature for a Business Development Company (BDC), but insider and institutional ownership still steer the governance and strategic direction.

This structure means the company's stock price is defintely more susceptible to retail sentiment, but the long-term strategy remains tied to the investment management team, which is also a significant stakeholder.

Given Company's Current Status

Oxford Square Capital Corp. is a publicly-traded closed-end management investment company, listed on the Nasdaq Global Select Market (NasdaqGS) under the ticker OXSQ.

It operates as a Business Development Company (BDC), which requires it to invest primarily in debt and equity of private or small public companies, and also allows it to pass through most of its taxable income to shareholders.

For the quarter ended September 30, 2025, the company reported a Net Asset Value (NAV) per share of $1.95, reflecting the current market value of its underlying investments.

If you want to dig deeper into the portfolio's performance, you should check out Breaking Down Oxford Square Capital Corp. (OXSQ) Financial Health: Key Insights for Investors.

Given Company's Ownership Breakdown

The ownership is heavily weighted toward retail investors, which is typical for a high-dividend BDC, but the 8.84% insider stake is a crucial factor, showing management's alignment with shareholder interests. Institutional investors, including large asset managers, hold a smaller but influential position.

Here's the quick math on the major shareholder types as of the most recent data near November 2025:

Given Company's Leadership

The company's strategy is executed by an experienced team, with the core management also holding board seats, ensuring tight alignment between executive action and board oversight. The investment activities are managed by Oxford Square Management, LLC.

The leadership team, which oversaw a Q3 2025 Net Investment Income of approximately $5.6 million, is composed of the following key individuals:

• Jonathan H. Cohen: Chief Executive Officer (CEO) and Board Member.
• Saul B. Rosenthal: President and Board Member.
• Bruce L. Rubin: Chief Financial Officer (CFO), Chief Accounting Officer, Treasurer, and Secretary.
• Kevin P. Yonon: Managing Director and Portfolio Manager, overseeing the investment portfolio.
• Gerald Cummins: Chief Compliance Officer, responsible for regulatory adherence.

The next concrete step for you is to cross-reference this insider ownership with recent SEC filings to gauge their confidence in the FY2025 NII per share forecast of $0.32.

Oxford Square Capital Corp. (OXSQ) Mission and Values

Oxford Square Capital Corp.'s core purpose is straightforward: to maximize total return for its investors. This is achieved through a disciplined, risk-adjusted strategy focused on generating high current income from corporate debt and Collateralized Loan Obligation (CLO) investments.

Given Company's Core Purpose

You need to know what a Business Development Company (BDC) like Oxford Square Capital Corp. stands for beyond the quarterly dividend. For a financial entity, the investment objective is the mission, and it informs every decision-it's the cultural DNA. Their operational focus reveals a commitment to rigorous analysis and liquidity.

• Rigorous Credit Analysis: Deliver attractive risk-adjusted returns by deeply scrutinizing potential investments.
• Middle Market Support: Provide essential capital to established, mid-sized companies for organic growth, acquisitions, and working capital needs.
• Active Portfolio Management: Maintain sufficient liquidity within the corporate debt portfolio to quickly capitalize on new market opportunities.

Official mission statement

The formal mission statement for Oxford Square Capital Corp. is rooted in its legal structure as a closed-end, non-diversified management investment company. It's a clear, quantitative goal.

• Maximize the portfolio's total return.
• Achieve this through a combination of high current income and capital appreciation.
• For the nine months ended September 30, 2025, the company reported total investment income of $29.92 million, underscoring the focus on current income generation.

Vision statement

The company's vision is best described by its primary focus, which guides its long-term allocation strategy. It's about where they see the best risk-adjusted yield over time, not just today.

• Seek an attractive risk-adjusted total return.
• Invest primarily in corporate debt securities and Collateralized Loan Obligation (CLO) structured finance investments.
• As of Q3 2025, the Net Asset Value (NAV) per share stood at $1.95, reflecting the ongoing challenge of balancing high yield with preserving asset value.

This focus on CLOs and corporate debt is how they aim to deliver consistent shareholder value, even when the market cap is only around $147.5 million. If you want to dive deeper into who's buying into this specific strategy, you can check out Exploring Oxford Square Capital Corp. (OXSQ) Investor Profile: Who's Buying and Why?

Given Company slogan/tagline

Like many specialized BDCs, Oxford Square Capital Corp. does not use a public-facing, catchy slogan or tagline. Their identity is defined by their investment mandate, not marketing fluff. Their reputation rests on performance, not a phrase. The Q3 2025 Net Investment Income (NII) of $5.6 million is the only defintely important number.

Oxford Square Capital Corp. (OXSQ) How It Works

Oxford Square Capital Corp. is a Business Development Company (BDC) that primarily operates as a specialty finance firm, not a traditional lender, generating its income by investing in corporate debt and the high-yield equity tranches of Collateralized Loan Obligations (CLOs). The company essentially acts as a permanent capital vehicle, taking a long-term view to maximize total return for its shareholders through both current income and capital appreciation.

Given Company's Product/Service Portfolio

Given Company's Operational Framework

Honestly, the operational model is simple: you raise capital and invest it in credit assets structured for high current income. As a BDC, Oxford Square Capital Corp. is required to distribute at least 90% of its taxable income to shareholders, which is why the dividend yield is so high.

The firm's value creation process centers on deep credit analysis in two distinct but related markets:

• Capital Sourcing: Raising funds through equity offerings-like issuing approximately 5.4 million shares in Q3 2025 for net proceeds of about $11.8 million-and issuing unsecured notes, such as the $74.75 million of 7.75% notes due July 2030.
• Investment Deployment: Deploying that capital into corporate debt to fund organic growth, acquisitions, or recapitalizations for middle-market companies, plus investing in CLO equity to capture the highest-yielding, but riskiest, part of the CLO structure.
• Income Generation: Collecting interest payments from secured loans and cash distributions from CLO equity. Q3 2025 Total Investment Income was $10.2 million, with Net Investment Income of $5.6 million, or $0.07 per share.

Here's the quick math: the firm focuses on a high-yield strategy, but what this estimate hides is the volatility; net unrealized depreciation was approximately $7.5 million in Q3 2025, which drove the Net Asset Value (NAV) per share down to $1.95. Still, a share repurchase program of up to $25 million was authorized in Q3 2025, showing management's commitment to supporting the stock.

For a deeper dive into the governance, check out the Mission Statement, Vision, & Core Values of Oxford Square Capital Corp. (OXSQ).

Given Company's Strategic Advantages

Oxford Square Capital Corp.'s success is defintely rooted in its specialized structure and management's niche expertise, which separates it from broader BDCs like Ares Capital or Prospect Capital.

• CLO Equity Focus: The high concentration in CLO equity (over 71% of net assets) provides access to juicier yields that are tough to find elsewhere, though it increases risk exposure to underlying loan defaults.
• Specialized Expertise: The investment team has a proven track record and deep expertise in evaluating both middle-market credit and the complex structural features of CLO investments, affording a competitive advantage over less specialized lenders.
• Permanent Capital Structure: Operating as a closed-end fund/BDC means the company does not face redemption pressure from investors, allowing it to take a longer-term, more opportunistic view on its investments, especially during market downturns.
• Liquidity and Flexibility: The company's balance sheet, with a debt-to-equity ratio of 0.98x in Q3 2025, and its ability to raise capital through both debt and equity markets, provides the financial wiggle room to quickly take advantage of market opportunities.

Oxford Square Capital Corp. (OXSQ) How It Makes Money

Oxford Square Capital Corp. (OXSQ) makes money primarily by acting as a specialty finance company, generating investment income from a portfolio heavily weighted toward debt and equity tranches of Collateralized Loan Obligations (CLOs) and secured corporate debt. Simply put, they earn interest from loans and distributions from structured credit investments.

The core of the business model is to borrow money at a lower rate and invest it in higher-yielding assets-a process known as positive investment spread-to pay shareholder distributions.

Oxford Square Capital Corp.'s Revenue Breakdown

For the third quarter of 2025, which ended September 30, 2025, Oxford Square Capital Corp. reported total investment income of approximately $10.2 million. This revenue is broken down into three main streams, showing a clear reliance on structured credit and corporate lending.

Here's the quick math: Debt Investments brought in $5.2 million, CLO Equity Investments contributed $4.3 million, and Other Income added $0.8 million to the total investment income of $10.2 million for Q3 2025. Both primary streams saw sequential growth from the prior quarter, which is a positive sign for top-line revenue.

Business Economics

As a Business Development Company (BDC), Oxford Square Capital Corp. operates under a specific economic framework: they must distribute at least 90% of their taxable income to shareholders, which is why they are a high-yield stock.

The economics of their business are driven by portfolio yields and leverage:

• Portfolio Composition: The firm's investment portfolio, with a fair value of about $243.2 million as of Q1 2025, is primarily allocated to secured debt (approximately 61%) and CLO equity (approximately 38%).
• Debt Yield: The weighted average yield on their debt investments stood at 14.6% at current cost as of September 30, 2025, which is a key driver of their interest income.
• CLO Equity Yield: The weighted average effective yield on their Collateralized Loan Obligation (CLO) equity investments was 9.7% as of the end of Q3 2025, up from 8.8% in the prior quarter. This income stream is riskier but offers higher potential returns when the underlying loans perform.
• Pricing Strategy: Most of the underlying loans in their CLO portfolio are floating-rate, so when the Federal Reserve raises interest rates, the income from their investments generally increases. This is a crucial defense against inflation.

What this estimate hides is the risk: the CLO equity position, while high-yielding, is the first to absorb losses in a credit downturn, which is why the Net Asset Value (NAV) can be volatile. You're trading stability for yield.

Oxford Square Capital Corp.'s Financial Performance

When evaluating a BDC like Oxford Square Capital Corp., the most important metric is Net Investment Income (NII) because it represents the cash flow available to cover the dividend, not just total revenue.

• Net Investment Income (NII): For Q3 2025, NII was approximately $5.6 million, or $0.07 per share. This figure is slightly up from the $5.5 million reported in Q2 2025.
• Distribution Coverage: The company maintained its monthly distribution of $0.035 per share for Q3 2025, totaling $0.105 per share for the quarter. However, the NII of $0.07 per share only covered approximately 67% of the $0.105 distribution, continuing a trend of the dividend not being fully covered by NII.
• Net Asset Value (NAV): The NAV per share is the book value of the company's assets minus liabilities. As of September 30, 2025, the NAV per share stood at $1.95, a decline from $2.06 in the previous quarter. This drop was largely due to net unrealized depreciation of approximately $7.5 million on investments.
• Capital Raising: The firm raised approximately $11.8 million in net proceeds through an at-the-market equity offering during Q3 2025, plus issued $74.8 million in 7.75% unsecured notes due July 2030 to enhance liquidity and fund new investments. That's a lot of capital activity in one quarter.

The fact that NII consistently falls short of the distribution is a defintely critical point for income investors. The decline in NAV per share suggests that the firm is paying out more than it earns from its core operations, which erodes shareholder equity over time. For a deeper dive into the risks, you should check out Breaking Down Oxford Square Capital Corp. (OXSQ) Financial Health: Key Insights for Investors.

Oxford Square Capital Corp. (OXSQ) Market Position & Future Outlook

Oxford Square Capital Corp. operates as a niche player in the Business Development Company (BDC) sector, focusing on a high-yield strategy built on Collateralized Loan Obligation (CLO) equity and corporate debt, but its small market capitalization of approximately $150.3 million as of November 2025 positions it as a micro-cap with a disproportionately high-risk profile.

Competitive Landscape

In the BDC landscape, Oxford Square Capital Corp. is a very small entity, competing against giants affiliated with major asset managers and larger, more diversified standalone BDCs. The total BDC market at fair value was around $449.9 billion in the first quarter of 2025, meaning OXSQ holds a fractional share.

Opportunities & Challenges

The company is trying to navigate a challenging credit environment where its core strategy-high-yield CLO equity-is under pressure. Still, management is taking clear, tactical steps to manage the stock's valuation, which is a key action for a BDC trading below its book value.

Industry Position

Oxford Square Capital Corp. is a micro-cap BDC, and its position is defined by its specialized portfolio and small size. The firm's core competitive advantage isn't scale, but its ability to target the higher-yielding, complex assets in corporate debt and CLO equity.

• Concentrated Portfolio: The top 10 investments represent over 50% of the total portfolio, which amplifies both risk and potential return.
• High Yield Strategy: The company focuses on generating income, with debt investments making up approximately 61% of its portfolio at fair value.
• Valuation Challenge: The stock trades below its book value, a common challenge for BDCs with persistent NAV declines, and analysts have a neutral-to-negative outlook due to financial instability and poor valuation.

You need to defintely keep an eye on the NII-to-distribution ratio; that's the clearest indicator of long-term dividend health. For a full breakdown of the company's financial stability, you should check out Breaking Down Oxford Square Capital Corp. (OXSQ) Financial Health: Key Insights for Investors.