8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 29, 2018

Oaktree Strategic Income Corporation

(Exact name of registrant as specified in its charter)

Delaware	814-01013	61-1713295
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

333 South Grand Avenue, 28th Floor Los Angeles, CA	90071
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (213) 830-6300

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging Growth Company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Condition.

On November 29, 2018, Oaktree Strategic Income Corporation (the “Company”) issued a press release announcing its financial results for the fiscal quarter and year ended September 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1.

On November 29, 2018, the Company will host a conference call to discuss its financial results for the fiscal quarter and year ended September 30, 2018. In connection therewith, the Company provided an investor presentation on its website at http://www.oaktreestrategicincome.com. A copy of the investor presentation is attached hereto as Exhibit 99.2.

The information disclosed under this Item 2.02, including Exhibits 99.1 and 99.2 hereto, is being “furnished” and is not deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor is it deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1	Press release of Oaktree Strategic Income Corporation dated November 29, 2018
99.2	Oaktree Strategic Income Corporation Fourth Quarter and Fiscal Year 2018 Earnings Presentation

SIGNATURE

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	OAKTREE STRATEGIC INCOME CORPORATION
Date: November 29, 2018	By:	/s/ Mel Carlisle
		Name: Mel Carlisle Title: Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

Oaktree Strategic Income Corporation Announces Fourth Fiscal Quarter 2018 Financial Results and Declares Distribution of $0.155 Per Share

LOS ANGELES, CA, November 29, 2018 — Oaktree Strategic Income Corporation (NASDAQ: OCSI) (“Oaktree Strategic Income” or the “Company”), a specialty finance company, today announced its unaudited financial results for the fiscal quarter ended September 30, 2018.

Fourth Fiscal Quarter 2018 Highlights

• Total investment income of $14.7 million ($0.50 per share), up from $11.7 million ($0.40 per share) for the third fiscal quarter of 2018;

• Net investment income of $5.6 million ($0.19 per share), up from $5.1 million ($0.17 per share) for the third fiscal quarter of 2018;

• Net asset value (“NAV”) per share of $10.04, up from $9.91 for the third fiscal quarter of 2018;

• Originated $91.8 million of new investment commitments and received $101.7 million of proceeds from prepayments, exits, other paydowns and sales; and

• A quarterly dividend was declared of $0.155 per share, payable on December 28, 2018 to stockholders of record on December 17, 2018.

Management Commentary

Edgar Lee, Chief Executive Officer and Chief Investment Officer of Oaktree Strategic Income Corporation said, “OCSI finished the year strong, highlighted by solid earnings growth and excellent credit quality. Since we began managing OCSI a year ago, we have made significant progress towards optimizing the portfolio as core investments now represent over 88 percent of our portfolio, up from 41 percent as of September 30, 2017. Given our meaningful progress to date, we believe we are well positioned to further enhance our return on equity to our shareholders in 2019.”

Portfolio and Investment Activity

As of September 30, 2018, the fair value of the Company’s investment portfolio was $556.8 million and was comprised of investments in 75 companies, including the Company’s investments in OCSI Glick JV LLC (“OCSI Glick JV”).

At fair value, 89.1% of the Company’s portfolio as of September 30, 2018 consisted of senior secured floating-rate debt investments, including 85.0% of first lien loans and 4.1% of second lien loans; 10.5% consisted of a subordinated note investment in the OCSI Glick JV; and 0.4% consisted of equity investments in other portfolio companies.

As of September 30, 2018, the OCSI Glick JV had $166.2 million in assets, including senior secured loans to 31 portfolio companies. The joint venture generated income of $1.5 million for Oaktree Strategic Income during the quarter ended September 30, 2018.

The weighted average yield on the Company’s debt investments as of September 30, 2018, including the return on the Company’s subordinated note investment in OCSI Glick JV, was 7.7%.

During the quarter ended September 30, 2018, the Company originated $91.8 million of new investment commitments in 13 new portfolio companies and two existing portfolio company and funded $91.0 million of investments across new and existing portfolio companies.

During the quarter, the Company received $101.7 million of proceeds from various prepayments, exits, other paydowns and sales and exited nine investments.

Results of Operations

Total investment income for the quarter ended September 30, 2018 was $14.7 million, including $13.4 million of cash interest income, $0.5 million of payment-in-kind (“PIK”) interest income and $0.8 million of fee income from portfolio investments. PIK interest income, net of PIK collected in cash, represented 3.6% of total investment income for the quarter ended September 30, 2018. Total investment income increased $3.1 million from the quarter ended June 30, 2018, which was primarily attributable to the acceleration of interest income and prepayments fees earned in connection with the exit of a certain investment.

Net expenses for the quarter were $9.2 million, a $2.6 million increase from $6.6 million in the prior quarter. The increase was primarily due to a $2.2 million increase in interest expense, which was mainly attributable to a $2.0 million write-off of previously unamortized financing costs in connection with the redemption of the $309.0 million debt securitization.

Net realized and unrealized gain on the Company’s investment portfolio for the quarter ended September 30, 2018 was $2.8 million.

Liquidity and Capital Resources

As of September 30, 2018, the Company had $16.4 million of cash and cash equivalents (including restricted cash), total principal value of debt outstanding of $275.1 million, and $179.9 million of undrawn capacity on its credit facilities, subject to borrowing base and other limitations. The weighted average interest rate on debt outstanding was 4.3% as of September 30, 2018.

As of September 30, 2018, the Company’s total leverage ratio was 0.93x debt-to-equity.

Distribution Declaration

The Company’s Board of Directors declared a quarterly distribution of $0.155 per share, payable on December 28, 2018 to stockholders of record on December 17, 2018.

Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a fiscal taxable year fall below the total amount of distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to the Company’s stockholders.

Portfolio Asset Quality

As of September 30, 2018, there was one investment on which the Company had stopped accruing cash and/or PIK interest or original issue discount (“OID”) income that, in the aggregate, represented 0.14% of the debt portfolio at cost and 0.01% at fair value.

($ in thousands)
Non-Accrual - Debt Investments	As of September 30, 2018			As of September 30, 2017
Non-Accrual Investments at Fair Value	$	50		$	6,293
Non-Accrual Investments/Total Debt Investments at Fair Value		0.01	%		1.1	%

Oaktree Strategic Income Corporation

Consolidated Statements of Assets and Liabilities

	September 30, 2018			June 30, 2018 (unaudited)			September 30, 2017
ASSETS
Investments at fair value:
Control investments (cost September 30, 2018: $73,501,970; cost June 30, 2018: $72,973,228; cost September 30, 2017: $71,340,632)	$	58,512,170		$	57,707,953		$	57,606,674
Affiliate investments (cost September 30, 2018: $0; cost June 30, 2018: $0; cost September 30, 2017: $17,479,053)		—			—			935,913
Non-control/Non-affiliate investments (cost September 30, 2018: $499,423,794; cost June 30, 2018: $516,498,332; cost September 30, 2017: $516,270,639)		498,329,658			513,086,230			501,894,073
Total investments at fair value (cost September 30, 2018: $572,925,764; cost June 30, 2018: $589,471,560; cost September 30, 2017: $605,090,324)		556,841,828			570,794,183			560,436,660
Cash and cash equivalents		10,439,023			13,296,085			35,604,127
Restricted cash		5,992,764			10,982,637			7,408,260
Interest, dividends and fees receivable		3,139,334			2,678,368			3,014,075
Due from portfolio companies		167,946			8,951			286,260
Receivables from unsettled transactions		5,143,533			4,620,469			505,000
Deferred financing costs		2,469,675			2,101,795			1,222,933
Derivative asset at fair value		45,807			—			—
Other assets		891,960			968,876			185,336
Total assets	$	585,131,870		$	605,451,364		$	608,662,651
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	649,781		$	867,845		$	482,877
Base management fee and incentive fee payable		1,915,682			1,711,290			2,236,187
Due to affiliate		1,700,952			2,491,450			450,517
Interest payable		1,130,735			2,510,079			1,996,171
Payables from unsettled transactions		8,932,500			47,366,994			49,029,789
Director fees payable		—			—			98,008
Credit facilities payable		275,056,800			80,556,800			82,956,800
Notes payable (net of $0, $2,006,553 and $2,224,132 of unamortized financing costs as of September 30, 2018, June 30, 2018 and September 30, 2017, respectively)		—			177,993,447			177,775,868
Total liabilities		289,386,450			313,497,905			315,026,217
Commitments and contingencies
Net assets:
Common stock, $0.01 par value, 150,000,000 shares authorized; 29,466,768 shares issued and outstanding as of September 30, 2018, June 30, 2018 and September 30, 2017		294,668			294,668			294,668
Additional paid-in-capital		370,751,389			373,995,934			373,995,934
Accumulated overdistributed earnings		(75,300,637	)		(82,337,143	)		(80,654,168	)
Total net assets (equivalent to $10.04, $9.91 and $9.97 per common share as of September 30, 2018, June 30, 2018 and September 30, 2017, respectively)		295,745,420			291,953,459			293,636,434
Total liabilities and net assets	$	585,131,870		$	605,451,364		$	608,662,651

Oaktree Strategic Income Corporation

Consolidated Statements of Operations

	Three months ended September 30, 2018 (unaudited)			Three months ended June 30, 2018 (unaudited)			Three months ended September 30, 2017 (unaudited)			Year ended September 30, 2018			Year ended September 30, 2017
Interest income:
Control investments	$	928,198		$	1,074,611		$	1,290,389		$	3,970,056		$	5,541,299
Affiliate investments		—			—			—			—			331,804
Non-control/Non-affiliate investments		12,443,148			9,642,088			9,559,293			39,139,739			38,489,924
Interest on cash and cash equivalents		64,691			74,887			68,306			273,552			166,896
Total interest income		13,436,037			10,791,586			10,917,988			43,383,347			44,529,923
PIK interest income:
Control investments		528,743			562,883			223,125			2,161,339			223,125
Affiliate investments		—			—			—			—			164,331
Non-control/Non-affiliate investments		7,634			7,669			—			26,059			20,965
Total PIK interest income		536,377			570,552			223,125			2,187,398			408,421
Fee income:
Affiliate investments		—			14,822			—			14,822			9,647
Non-control/Non-affiliate investments		751,808			283,864			1,022,638			2,084,980			2,199,909
Total fee income		751,808			298,686			1,022,638			2,099,802			2,209,556
Dividend and other income:
Control investments		—			—			(343,272	)		—			(576,044	)
Total dividend and other income		—			—			(343,272	)		—			(576,044	)
Total investment income		14,724,222			11,660,824			11,820,479			47,670,547			46,571,856
Expenses:
Base management fee		1,437,341			1,414,815			1,420,696			5,657,786			5,654,699
Part I incentive fee		1,180,825			1,002,145			815,491			2,923,076			3,236,320
Professional fees		308,234			618,423			543,226			2,691,950			1,515,536
Directors fees		105,000			114,093			153,008			479,093			538,072
Interest expense		5,482,159			3,235,080			2,645,090			14,379,881			10,769,842
Administrator expense		197,206			326,998			205,152			1,085,819			661,170
General and administrative expenses		446,961			225,132			516,854			1,383,871			2,030,756
Total expenses		9,157,726			6,936,686			6,299,517			28,601,476			24,406,395
Fees waived		3,184			(347,760	)		—			(702,261	)		(6,232	)
Insurance recoveries		—			—			—			—			(250,000	)
Net expenses		9,160,910			6,588,926			6,299,517			27,899,215			24,150,163
Net investment income		5,563,312			5,071,898			5,520,962			19,771,332			22,421,693
Unrealized appreciation (depreciation) on investments and foreign currency:
Control investments		275,475			(750,211	)		(4,230,858	)		(1,255,842	)		(5,933,119	)
Affiliate investments		—			16,333,131			(10,314,600	)		16,543,140			(13,595,800	)
Non-control/Non-affiliate investments		2,218,715			5,630,684			(5,455,743	)		13,282,430			1,739,837
Foreign currency forward contract		45,807			—			—			45,807			—
Net unrealized appreciation (depreciation) on investments and foreign currency		2,539,997			21,213,604			(20,001,201	)		28,615,535			(17,789,082	)
Net unrealized (appreciation) depreciation on secured borrowings		—			—			—			—			(14,575	)
Realized gain (loss) on investments, secured borrowings and foreign currency:
Affiliate investments		—			(15,914,944	)		—			(15,914,916	)		—
Non-control/Non-affiliate investments		379,381			(8,645,426	)		17,060			(11,675,522	)		(13,384,915	)
Foreign currency forward contract		(123,380	)		—			—			(123,380	)		—
Net realized gain (loss) on investments, secured borrowings and foreign currency		256,001			(24,560,370	)		17,060			(27,713,818	)		(13,384,915	)
Net increase (decrease) in net assets resulting from operations	$	8,359,310		$	1,725,132		$	(14,463,179	)	$	20,673,049		$	(8,766,879	)
Net investment income per common share — basic and diluted	$	0.19		$	0.17		$	0.19		$	0.67		$	0.76
Earnings (loss) per common share — basic and diluted	$	0.28		$	0.06		$	(0.49	)	$	0.70		$	(0.30	)
Weighted average common shares outstanding — basic and diluted		29,466,768			29,466,768			29,466,768			29,466,768			29,466,768

Conference Call Information

Oaktree Strategic Income will host a conference call to discuss its fourth fiscal quarter results at 12:30 p.m. Eastern Time / 9:30 a.m. Pacific Time on November 29, 2018. The conference call may be accessed by dialing (877) 507-4376 (U.S. callers) or +1 (412) 317-5239 (non-U.S. callers), participant password “Oaktree Strategic Income.” During the earnings conference call, Oaktree Strategic Income intends to refer to an investor presentation that will be available on the Investors section of the Oaktree Strategic Income website, www.oaktreestrategicincome.com. Alternatively, a live webcast of the conference call can be accessed on Oaktree Strategic Income’s website.

For those individuals unable to listen to the live broadcast of the conference call, a replay will be available on Oaktree Strategic Income’s website, or by dialing (877) 344-7529 (U.S. callers) or +1 (412) 317-0088 (non-U.S. callers), access code 10125431, beginning approximately one hour after the broadcast.

About Oaktree Strategic Income Corporation

Oaktree Strategic Income Corporation (NASDAQ:OCSI) is a specialty finance company dedicated to providing customized capital solutions for middle-market companies in both the syndicated and private placement markets. The firm seeks to generate a stable source of current income while minimizing the risk of principal loss and, to a lesser extent, capital appreciation by providing innovative first-lien financing solutions to companies across a wide variety of industries. The company is regulated as a business development company under the Investment Company Act of 1940, as amended. Oaktree Strategic Income is managed by Oaktree Capital Management, L.P. For additional information, please visit Oaktree Strategic Income’s website at www.oaktreestrategicincome.com.

Forward-Looking Statements

Some of the statements in this press release constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements may include statements as to: our future operating results and distribution projections; our business prospects and the prospects of our portfolio companies; and the impact of the investments that we expect to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in our annual report on Form 10-K. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment; risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or regulated investment companies; and other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.

We have based the forward-looking statements included in this presentation on information available to us on the date of this presentation, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Contacts

Investor Relations:

Oaktree Strategic Income Corporation

Michael Mosticchio

(212) 284-1900

ocsi-ir@oaktreecapital.com

Media Relations:

Financial Profiles, Inc.

Moira Conlon

(310) 478-2700

mediainquiries@oaktreecapital.com

EX-99.2

Fourth Quarter Fiscal Year 2018 Earnings Presentation November 29, 2018 Nasdaq: OCSI Exhibit 99.2

Forward Looking Statements Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation may include statements as to: our future operating results and distribution projections; the ability of Oaktree Capital Management, L.P. (“Oaktree” or our “Investment Adviser”) to reposition our portfolio and to implement our Investment Adviser’s future plans with respect to our business; our business prospects and the prospects of our portfolio companies; the impact of the investments that we expect to make; the ability of our portfolio companies to achieve their objectives; our expected financings and investments and additional leverage we may seek to incur in the future; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our portfolio companies; and the cost or potential outcome of any litigation to which we may be a party. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this presentation involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in our annual report on Form 10-K for the fiscal year ended September 30, 2018. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment; risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or regulated investment companies; and other considerations that may be disclosed from time to time in our publicly disseminated documents and filings. We have based the forward-looking statements included in this presentation on information available to us on the date of this presentation, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Unless otherwise indicated, data provided herein are dated as of September 30, 2018.

Accomplishments Since Oaktree Became Investment Adviser on October 17, 2017 Significant Progress Rotating Portfolio Improved Earnings NAV Stability Improved Capital Structure ($ in millions, at fair value) 1 Net Investment Income Per Share Portfolio Assets NAV Per Share Key Accomplishments +27% increase in NII per share since 12/31/17 1 2 3 4 +111% -80% 1Excludes investments in OCSI Glick JV (“Glick JV”), a joint venture that invests primarily in senior secured loans of middle-market companies.

Q4 2018 Highlights Net asset value per share increased by $0.13 to $10.04 NAV remains stable, increasing $0.20 per share or approximately 2% since December 31, 2017 Realized gains resulting from monetizations of investments and unrealized write-ups of certain investments primarily contributed to the sequential NAV increase Net investment income per share increased by $0.02 to $0.19 Higher prepayment fees and OID acceleration on loan payoffs contributed to the sequential NII increase, partially offset by acceleration of deferred financing costs related to the redemption of the 2015 debt securitization Board of Directors declared a dividend of $0.155 per share, payable on December 28, 2018 to stockholders of record as of December 17, 2018 Monetized approximately $20 million of non-core investments Non-core investments decreased to 12% of the portfolio at fair value as of September 30, 20181 Monetized approximately $7 million or 12% of remaining non-core investments since October 1, 2018 Entered into $92 million of new investment commitments First lien originations represented 99% of new investment commitments 7.3% weighted average yield at cost of new investments 1 2 3 4 1Excludes investments in the Glick JV.

Historical Portfolio Progression Non-core performing private loans represent only 8% of OCSI’s portfolio ($ in millions) Portfolio by Category1 +111% Core Investments -80% Non-core Investments 1Excludes investments in the Glick JV.

Note:Numbers may not sum due to rounding. Non-core Investment Portfolio Detail Non-core Portfolio Characteristics Portfolio reduced by $20 million or 25% during the quarter ended September 30, 2018 $59 million of non-core investments remain, consisting of the following: Private Loans $39 million at fair value in four companies Average debt price: 94.2% Liquid Investments $18 million at fair value in five companies Comprised of publicly quoted liquid loans and bonds Average debt price: 99.6% Equity Investments $1.8 million at fair value in one company This investment was monetized in October 2018 Non-accrual $0.05 million at fair value in one company Debt price: 5.0% (As % of non-core performing investment portfolio, at fair value; $ in millions) Non-core Investments by Type ($ in millions) Non-core Portfolio Composition < 1%

Portfolio Summary as of September 30, 2018 (As % of total portfolio, at fair value; $ in millions) (As % of total portfolio, at fair value) Portfolio Composition Top 10 Industries1,3 Portfolio Characteristics (at fair value) $557 million invested in 75 companies 99% of the total portfolio consists of debt investments1 100% of debt portfolio consists of floating rate investments2 7.7% weighted average yield on debt investments1 $7 million average debt investment size2 < 1% Note:Numbers may not sum due to rounding. 1Includes the investments in Glick JV. 2Debt portfolio excludes the investments in the Glick JV. 3Excludes multi-sector holdings, which includes our investments in the Glick JV.

Core Portfolio Progression Over 99% of OCSI’s core portfolio is comprised of senior secured investments Core Portfolio by Investment Type (At fair value, $ in millions) 99% Senior Secured < $1

Portfolio Diversity OCSI’s portfolio is diverse across investments and industries (At fair value, total portfolio) Portfolio by Industry1,2 Diversity by Investment Size Top 10 Investments 25% Next 15 Investments 25% Remaining 49 Investments 39% Glick JV 11% Average Investment Size $7 million1 Industry Group % of Portfolio Commercial Services & Supplies 9.6% Software 9.1% Oil, Gas & Consumable Fuels 6.9% Media 6.7% IT Services 6.3% Aerospace & Defense 6.3% Professional Services 5.9% Diversified Telecommunication Services 5.2% Diversified Financial Services 3.2% Health Care Providers & Services 3.0% Specialty Retail 3.0% Chemicals 2.9% Remaining 19 Industries 31.9% Average Industry Exposure 3.2% 1Excludes investments in the Glick JV. 2Based on GICS industry classifications.

Debt Portfolio Company Metrics1 OCSI’s portfolio has transitioned into higher quality, larger borrowers with lower leverage, reflecting our defensive investment approach Debt Portfolio Company EBITDA Debt Portfolio Company Leverage1 Median Debt Portfolio Company EBITDA ($ in millions) OCSI’s debt portfolio leverage has decreased by 22% since 9/30/17 while middle market leverage multiples have remained elevated 1 Excludes one unfunded revolving credit facility and two investments on non-accrual, one of which was monetized during the quarter ended June 30, 2018. 2 Source: S&P Global Market Intelligence. Represents issuers with EBITDA less than or equal to $50 million, adjusted for prospective cost savings or synergies. 2 9/30/17 12/31/17 3/31/18 6/30/18 9/30/18 $67 $90 $83 $105 $110

Q4 2018 Portfolio Originations1 $92 million of new investment commitments $83 million in 13 new portfolio companies and $9 million in 2 existing portfolio companies Diversified across 12 industries 7.3% weighted average yield at cost on new investments 100% of new debt investment commitments at floating rates 77% of investments also held by other Oaktree funds Median portfolio company EBITDA: $113 million Average net leverage through tranche: 4.2x New Investment Highlights (As % of total portfolio, at fair value – top 10) New Investment Industry Composition (As % of total 4Q18 commitment; $ in millions) New Investment Composition Note:Numbers rounded to the nearest million or percentage point. 1 New investments exclude fundings of existing revolver or delayed draw term loan commitments.

Historical Financial Information ($ in thousands, except per share data) Operating Results Q4’18 Q3’18 Q2’18 Q1’18 Q4’17 Sep-18 Jun-18 Mar-18 Dec-17 Sep-17 Interest income $13,436 $10,792 $9,121 $10,034 $10,918 PIK interest income 536 571 782 298 223 Fee income 752 299 651 398 1 Dividend & other income - - - - (343) Total investment income 14,724 11,661 10,555 10,731 11,820 Base management fee 1,437 1,415 1,393 1,412 1,421 Part I incentive fee 1,181 1,002 480 260 815 Interest expense 5,482 3,235 2,898 2,764 2,645 Other operating expenses1 1,057 1,285 1,434 1,865 1,418 Total expenses 9,158 6,937 6,206 6,301 6,300 Fees recouped/(waived) 3 (348) (240) (117) - Net expenses 9,161 6,589 5,965 6,184 6,300 Net investment income 5,563 5,072 4,589 4,547 5,521 Net unrealized appreciation (depreciation) on investments and foreign currency 2,540 21,214 3,120 1,742 (20,001) Net realized gain (loss) on investments, secured borrowings and foreign currency 256 (24,560) 973 (4,383) 17 Net increase (decrease) in net assets resulting from operations $8,359 $1,725 $8,683 $1,906 ($14,463) Net investment income per common share $0.19 $0.17 $0.16 $0.15 $0.19 Net realized and unrealized appreciation (depreciation) per common share 0.09 (0.11) 0.13 (0.09) (0.68) Earnings (loss) per common share – basic and diluted $0.28 $0.06 $0.29 $0.06 ($0.49) Distributions per common share $0.155 $0.145 $0.140 $0.190 $0.190 Note:Results during Q1’18 occurred during management transition from Fifth Street Management LLC to Oaktree, which occurred on October 17, 2017. Results in prior periods occurred during management by Fifth Street Management LLC. 1Includes professional fees, directors fees, administrator expenses and general and administrative expenses.

Historical Financial Information ($ in thousands, except per share data) Select Balance Sheet and Other Data Q4’18 Q3’18 Q2’18 Q1’18 Q4’17 Sep-18 Jun-18 Mar-18 Dec-17 Sep-17 Investment Portfolio (at fair value) $556,842 $570,794 $542,673 $541,408 $560,437 Debt Outstanding1 275,057 258,550 257,978 251,905 260,733 Total Net Assets 295,745 291,953 294,501 289,944 293,636 Net Asset Value per share $10.04 $9.91 $9.99 $9.84 $9.97 Total Leverage 0.93x 0.89x 0.88x 0.88x 0.90x Weighed Average Yield on Debt Investments2 7.7% 7.9% 7.9% 7.1% 7.5% Cash Component of Weighted Average Yield on Debt Investments 7.6% 7.7% 7.7% 6.9% 7.3% Weighted Average Yield on Total Portfolio Investments3 7.7% 7.8% 7.7% 6.9% 7.4% Weighted Average Interest Rate on Debt Outstanding 4.3% 4.3% 3.7% 3.6% 3.3% Note:Results during Q1’18 occurred during management transition from Fifth Street Management LLC to Oaktree, which occurred on October 17, 2017. Results in prior periods occurred during management by Fifth Street Management LLC. 1Net of unamortized financing costs. 2Annual stated yield earned plus net annual amortization of original issue discount or premium earned on accruing investments, including our share of the return on the debt investments in the Glick JV. 3Annual stated yield earned plus net annual amortization of original issue discount or premium earned on accruing investments and dividend income, including our share of the return on the debt investments in the Glick JV.

Historical Portfolio Activity  ($ in thousands) As of and For Three Months Ended Q4’18 Q3’18 Q2’18 Q1’18 Q4’17 Sep-18 Jun-18 Mar-18 Dec-17 Sep-17 Investments at Fair Value $556,842 $570,794 $542,673 $541,408 $560,437 Number of Portfolio Companies 75 72 65 66 67 Average Portfolio Company Debt Investment Size $7,600 $8,100 $8,500 $8,300 $8,500 Asset Class: Senior Secured Debt 89.1% 89.7% 89.0% 89.2% 89.5% Glick JV 10.5% 10.1% 10.7% 10.6% 10.3% Equity 0.4% 0.2% 0.3% 0.2% 0.2% Interest Rate Type for Debt Investments: % Floating Rate 100% 100% 100% 100% 100% Investment Activity at Cost: New Investment Commitments $91,806 $113,600 $94,300 $136,200 $108,700 New Funded Investment Activity1 90,957 114,300 94,700 143,900 108,400 Proceeds from Prepayments, Exits, Other Paydowns and Sales 101,726 83,800 98,400 161,400 94,500 Net New Investments2 (9,920) 29,800 (4,100) (25,200) 14,200 Number of New Investment Commitments in New Portfolio Companies 13 15 11 17 10 Number of New Investment Commitments in Existing Portfolio Companies 2 1 0 3 7 Number of Portfolio Company Exits 9 8 12 22 8 Note:Results during Q1’18 occurred during management transition from Fifth Street Management LLC to Oaktree, which occurred on October 17, 2017. Results in prior periods occurred during management by Fifth Street Management LLC. Numbers may not sum due to rounding. 1New funded investment activity includes drawdowns on existing revolver commitments. 2Net new investments consists of new investment commitments less proceeds from prepayments, exits, other paydowns and sales.

Net Asset Value Per Share Bridge Note:Net asset value per share amounts are based on the shares outstanding at each respective quarter end. Net investment income per share, net unrealized appreciation / (depreciation), and net realized gain / (loss) are based on the weighted average number of shares outstanding for the period. $0.01

Capital Structure Overview As of September 30, 2018 1Long-term portfolio leverage may vary depending on market conditions. Current leverage of 0.93x debt-to-equity; target leverage ratio 1.2x to 1.6x1 Multiple capital sources provides us with flexibility to optimize new investment fundings in order to maintain competitive borrowing costs Amended revolving credit facility with Citibank in July; increased size of facility to $180 million from $100 million and extended reinvestment and maturity periods by approximately 6 months During the quarter ended September 30, 2018, redeemed 2015 debt securitization and established $250 million Deutsche Bank Facility, reducing borrowing costs from LIBOR + 2.00% to LIBOR + 1.90% Funding Sources as of September 30, 2018 Capacity Outstanding Interest Rate Maturity Deutsche Bank Facility $250.0 million $157.0 million LIBOR + 1.90% September 2019 Citibank Revolving Credit Facility $180.0 million $110.1 million LIBOR + 1.70%-2.25% July 2023 East West Bank Facility $25.0 million $8.0 million LIBOR + 2.85% January 2021

Opportunities to Increase Return on Equity Increasing leverage to operate within long term target leverage ratio range of 1.2x to 1.6x debt-to-equity Received stockholder approval in July 2018 to reduce the minimum asset coverage ratio from 200% to 150% We expect it will take several quarters to reach long term target range Current leverage: 0.93x debt-to-equity Rotation into higher yielding proprietary investments During the quarter, we increased our exposure to broadly syndicated loans as we are taking a disciplined and selective approach to investing in the current environment Broadly syndicated loans priced lower than LIBOR + 4.00% totaled $51 million as of September 30, 2018 Benefit from rising interest rates as 100% of debt investment portfolio is comprised of floating rate securities 100% of originations during the quarter ended September 30, 2018 were comprised of floating rate securities Modest increase in second lien investments Second liens represented 4% of the portfolio at fair value as of September 30, 2018 1 2 3 4

Appendix

Portfolio Summary: Core vs. Non-core Assets1 ($ in millions, at fair value) $440 million (88% of the total portfolio at fair value) Represents 63 companies, increase from 57 as of Q3 2018 Average debt price: 99.5% $92 million of new investments originated during Q4 2018 Core Investments Non-core Investments Performing Investments $59 million (12% of the total portfolio at fair value) Represents 10 companies, down from 13 as of Q3 2018 Non-accrual Investment $0.1 million (< 1% of the total portfolio at fair value) Represents 1 company Note:Numbers are rounded to nearest millions and percentage points. 1Excludes investments in the Glick JV. $0.1 +111% -80% -99% $0.1

Non-core: Performing Portfolio Characteristics Non-core performing portfolio reduced by approximately $20 million (25%) during Q4 2018 $59 million non-core performing investments remain, consisting of the following: $18 million – publicly-quoted liquid loans Average debt price: 99.6% 5 companies $1.8 million – equity investment which was monetized in October 2018 $39 million – privately placed debt investments Average debt price: 94.2% 4 companies (As % of non-core performing investment portfolio, at fair value; $ in millions) Non-core: Performing Investments by Type Non-core Investment Portfolio Detail ($ in millions) Non-core: Performing Portfolio Trend -80%

Contact: Michael Mosticchio, Investor Relations ocsi-ir@oaktreecapital.com