Oaktree Specialty Lending Corp - Quarter Report: 2022 March (Form 10-Q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)


			þ			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
						OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


			o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
						OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 1-33901

Oaktree Specialty Lending Corporation

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


DELAWARE (State or jurisdiction of incorporation or organization)						26-1219283 (I.R.S. Employer Identification No.)

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

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:

(213) 830-6300

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange
on Which Registered

Common Stock, par value $0.01 per share

OCSL

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ¨ NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company ¨

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 ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES ¨ NO þ

The registrant had 183,374,250 shares of common stock outstanding as of May 3, 2022.

OAKTREE SPECIALTY LENDING CORPORATION

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2022

TABLE OF CONTENTS



		PART I — FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:
		Consolidated Statements of Assets and Liabilities as of March 31, 2022 (unaudited) and September 30, 2021	2
		Consolidated Statements of Operations (unaudited) for the three and six months ended March 31, 2022 and 2021	3
		Consolidated Statements of Changes in Net Assets (unaudited) for the three and six months ended March 31, 2022 and 2021	4
		Consolidated Statements of Cash Flows (unaudited) for the six months ended March 31, 2022 and 2021	5
		Consolidated Schedule of Investments (unaudited) as of March 31, 2022	6
		Consolidated Schedule of Investments as of September 30, 2021	19
		Notes to Consolidated Financial Statements (unaudited)	31
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		84
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		103
Item 4.	Controls and Procedures		105
		PART II — OTHER INFORMATION
Item 1.	Legal Proceedings		105
Item 1A.	Risk Factors		105
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		105
Item 3.	Defaults Upon Senior Securities		105
Item 4.	Mine Safety Disclosures		105
Item 5.	Other Information		106
Item 6.	Exhibits		106
Signatures			106

PART I — FINANCIAL INFORMATION


Item 1.			Consolidated Financial Statements.

Oaktree Specialty Lending Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except per share amounts)


	March 31, 2022 (unaudited)		September 30, 2021
ASSETS
Investments at fair value:
Control investments (cost March 31, 2022: $272,975; cost September 30, 2021: $283,599)	$	250,580	$	270,765
Affiliate investments (cost March 31, 2022: $21,106; cost September 30, 2021: $18,763)	20,244		18,289
Non-control/Non-affiliate investments (cost March 31, 2022: $2,365,667; cost September 30, 2021: $2,236,759)	2,373,951		2,267,575
Total investments at fair value (cost March 31, 2022: $2,659,748; cost September 30, 2021: $2,539,121)	2,644,775		2,556,629
Cash and cash equivalents	39,366		29,334
Restricted cash	2,395		2,301
Interest, dividends and fees receivable	17,335		22,125
Due from portfolio companies	2,338		1,990
Receivables from unsettled transactions	9,893		8,150
Due from broker	25,120		1,640
Deferred financing costs	8,486		9,274
Deferred offering costs	32		34
Deferred tax asset, net	1,668		714
Derivative assets at fair value	2,764		1,912
Other assets	2,510		2,284
Total assets	$	2,756,682	$	2,636,387
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	2,453	$	3,024
Base management fee and incentive fee payable	22,833		32,649
Due to affiliate	3,249		4,357
Interest payable	4,379		4,597
Director fees payable	38		—
Payables from unsettled transactions	6,422		8,086
Derivative liability at fair value	23,272		2,108
Credit facilities payable	745,000		630,000
Unsecured notes payable (net of $5,761 and $6,501 of unamortized financing costs as of March 31, 2022 and September 30, 2021, respectively)	618,660		638,743
Total liabilities	1,426,306		1,323,564
Commitments and contingencies (Note 13)
Net assets:
Common stock, $0.01 par value per share, 250,000 shares authorized; 183,205 and 180,361 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively	1,832		1,804
Additional paid-in-capital	1,825,257		1,804,354
Accumulated overdistributed earnings	(496,713)		(493,335)
Total net assets (equivalent to $7.26 and $7.28 per common share as of March 31, 2022 and September 30, 2021, respectively) (Note 11)	1,330,376		1,312,823
Total liabilities and net assets	$	2,756,682	$	2,636,387

See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation

Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)


	Three months ended March 31, 2022		Three months ended March 31, 2021		Six months ended March 31, 2022		Six months ended March 31, 2021
Interest income:
Control investments	$	3,334	$	2,374	$	6,814	$	4,717
Affiliate investments	366		143		700		248
Non-control/Non-affiliate investments	53,314		33,133		104,949		62,317
Interest on cash and cash equivalents	5		5		6		6
Total interest income	57,019		35,655		112,469		67,288
PIK interest income:
Non-control/Non-affiliate investments	4,674		3,801		9,337		6,890
Total PIK interest income	4,674		3,801		9,337		6,890
Fee income:
Control investments	13		18		26		33
Affiliate investments	5		5		10		10
Non-control/Non-affiliate investments	1,887		2,255		2,781		5,587
Total fee income	1,905		2,278		2,817		5,630
Dividend income:
Control investments	700		209		4,616		339
Total dividend income	700		209		4,616		339
Total investment income	64,298		41,943		129,239		80,147
Expenses:
Base management fee	10,082		7,074		20,034		13,615
Part I incentive fee	6,704		4,444		13,161		8,593
Part II incentive fee	(3,746)		3,609		(1,995)		13,149
Professional fees	822		1,017		2,144		1,884
Directors fees	160		157		283		300
Interest expense	9,908		6,568		19,308		12,663
Administrator expense	307		293		697		626
General and administrative expenses	713		775		1,406		1,293
Total expenses	24,950		23,937		55,038		52,123
Fees waived	(750)		(108)		(1,500)		(108)
Net expenses	24,200		23,829		53,538		52,015
Net investment income before taxes	40,098		18,114		75,701		28,132
(Provision) benefit for taxes on net investment income	—		—		(3,308)		—
Net investment income	40,098		18,114		72,393		28,132
Unrealized appreciation (depreciation):
Control investments	(8,894)		18,411		(9,561)		26,746
Affiliate investments	(137)		394		(388)		104
Non-control/Non-affiliate investments	(19,696)		42,803		(22,527)		84,740
Foreign currency forward contracts	1,689		3,536		852		1,110
Net unrealized appreciation (depreciation)	(27,038)		65,144		(31,624)		112,700
Realized gains (losses):
Control investments	—		—		1,868		—
Non-control/Non-affiliate investments	991		8,179		5,472		16,917
Foreign currency forward contracts	411		(2,323)		3,383		(2,846)
Net realized gains (losses)	1,402		5,856		10,723		14,071
(Provision) benefit for taxes on realized and unrealized gains (losses)	(21)		(997)		2,357		(1,242)
Net realized and unrealized gains (losses), net of taxes	(25,657)		70,003		(18,544)		125,529
Net increase (decrease) in net assets resulting from operations	$	14,441	$	88,117	$	53,849	$	153,661
Net investment income per common share — basic and diluted	$	0.22	$	0.12	$	0.40	$	0.20
Earnings (loss) per common share — basic and diluted (Note 5)	$	0.08	$	0.60	$	0.30	$	1.07
Weighted average common shares outstanding — basic and diluted	181,598		146,652		180,982		143,775

See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation

Consolidated Statements of Changes in Net Assets

(in thousands, except per share amounts)

(unaudited)


	Three months ended March 31, 2022		Three months ended March 31, 2021		Six months ended March 31, 2022		Six months ended March 31, 2021
Operations:
Net investment income	$	40,098	$	18,114	$	72,393	$	28,132
Net unrealized appreciation (depreciation)	(27,038)		65,144		(31,624)		112,700
Net realized gains (losses)	1,402		5,856		10,723		14,071
(Provision) benefit for taxes on realized and unrealized gains (losses)	(21)		(997)		2,357		(1,242)
Net increase (decrease) in net assets resulting from operations	14,441		88,117		53,849		153,661
Stockholder transactions:
Distributions to stockholders	(29,271)		(16,915)		(57,227)		(32,421)
Net increase (decrease) in net assets from stockholder transactions	(29,271)		(16,915)		(57,227)		(32,421)
Capital share transactions:
Issuance of common stock in connection with the Mergers	—		242,704		—		242,704
Issuance of common stock under dividend reinvestment plan	766		511		1,552		1,039
Repurchases of common stock under dividend reinvestment plan	—		(511)		—		(1,039)
Issuance of common stock in connection with the "at the market" offering	19,379		—		19,379		—
Net increase (decrease) in net assets from capital share transactions	20,145		242,704		20,931		242,704
Total increase (decrease) in net assets	5,315		313,906		17,553		363,944
Net assets at beginning of period	1,325,061		964,917		1,312,823		914,879
Net assets at end of period	$	1,330,376	$	1,278,823	$	1,330,376	$	1,278,823
Net asset value per common share	$	7.26	$	7.09	$	7.26	$	7.09
Common shares outstanding at end of period	183,205		180,361		183,205		180,361

See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six months ended March 31, 2022		Six months ended March 31, 2021
Operating activities:
Net increase (decrease) in net assets resulting from operations	$	53,849	$	153,661
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized (appreciation) depreciation	31,624		(112,700)
Net realized (gains) losses	(10,723)		(14,071)
PIK interest income	(9,337)		(6,890)
Accretion of original issue discount on investments	(16,375)		(7,777)
Accretion of original issue discount on unsecured notes payable	339		254
Amortization of deferred financing costs	1,863		1,323
Deferred taxes	(954)		320
Purchases of investments	(497,579)		(541,491)
Proceeds from the sales and repayments of investments	416,250		398,748
Cash acquired in the Mergers	—		20,945
Changes in operating assets and liabilities:
(Increase) decrease in interest, dividends and fees receivable	2,698		337
(Increase) decrease in due from portfolio companies	(348)		67
(Increase) decrease in receivables from unsettled transactions	(1,743)		(25,804)
(Increase) decrease in due from broker	(23,480)		—
(Increase) decrease in other assets	(226)		(1,429)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	(628)		(40)
Increase (decrease) in base management fee and incentive fee payable	(9,816)		11,427
Increase (decrease) in due to affiliate	(1,108)		1,450
Increase (decrease) in interest payable	(218)		(74)
Increase (decrease) in payables from unsettled transactions	(1,664)		8,767
Increase (decrease) in director fees payable	38		(90)
Net cash provided by (used in) operating activities	(67,538)		(113,067)
Financing activities:
Distributions paid in cash	(55,675)		(31,382)
Borrowings under credit facilities	225,000		175,000
Repayments of borrowings under credit facilities	(110,000)		(14,800)
Repayments of secured borrowings	—		(9,341)
Repurchases of common stock under dividend reinvestment plan	—		(1,039)
Shares issued under the "at the market" offering	19,596		—
Deferred financing costs paid	(334)		(360)
Offering costs paid	(158)		—
Net cash provided by (used in) financing activities	78,429		118,078
Effect of exchange rate changes on foreign currency	(765)		(378)
Net increase (decrease) in cash and cash equivalents and restricted cash	10,126		4,633
Cash and cash equivalents and restricted cash, beginning of period	31,635		39,096
Cash and cash equivalents and restricted cash, end of period	$	41,761	$	43,729
Supplemental information:
Cash paid for interest	$	17,324	$	11,160
Non-cash financing activities:
Issuance of shares of common stock under dividend reinvestment plan	$	1,552	$	1,039
Deferred financing costs	—		(57)
Offering costs	57		—
Issuance of shares in connection with the Mergers	—		242,704
Reconciliation to the Consolidated Statements of Assets and Liabilities	March 31, 2022		September 30, 2021
Cash and cash equivalents	$	39,366	$	29,334
Restricted cash	2,395		2,301
Total cash and cash equivalents and restricted cash	$	41,761	$	31,635

See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes

Control Investments										(8)(9)
C5 Technology Holdings, LLC			Data Processing & Outsourced Services
829 Common Units						$	—	$	—	(15)
34,984,460.37 Preferred Units						34,984		27,638		(15)
						34,984		27,638
Dominion Diagnostics, LLC			Health Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/2024	6.01	%		$	23,201	23,201		23,201		(6)(15)
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024				—		—		—		(6)(15)(19)
30,030.8 Common Units in DD Healthcare Services Holdings, LLC						18,625		11,112		(15)
						41,826		34,313
OCSI Glick JV LLC			Multi-Sector Holdings							(14)
Subordinated Debt, LIBOR+4.50% cash due 10/20/2028	4.60	%		60,887		50,593		55,649		(6)(11)(15)(19)
87.5% equity interest						—		—		(11)(16)(19)
						50,593		55,649
Senior Loan Fund JV I, LLC			Multi-Sector Holdings							(14)
Subordinated Debt, LIBOR+7.00% cash due 12/29/2028	8.00	%		96,250		96,250		96,250		(6)(11)(15)(19)
87.5% LLC equity interest						49,322		36,730		(11)(12)(16)(19)
						145,572		132,980
Total Control Investments (18.8% of net assets)						$	272,975	$	250,580

Affiliate Investments										(17)
Assembled Brands Capital LLC			Specialized Finance
First Lien Revolver, LIBOR+6.75% cash due 10/17/2023	7.76	%		$	18,242	$	18,243	$	17,938	(6)(15)(19)
1,609,201 Class A Units						764		402		(15)
1,019,168.80 Preferred Units, 6%						1,019		1,182		(15)
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029						—		—		(15)
						20,026		19,522
Caregiver Services, Inc.			Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%						1,080		722		(15)
						1,080		722
Total Affiliate Investments (1.5% of net assets)						$	21,106	$	20,244

Non-Control/Non-Affiliate Investments										(18)
109 Montgomery Owner LLC			Real Estate Operating Companies
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 2/2/2023	7.50	%		$	1,707	$	1,660	$	2,022	(6)(15)(19)
						1,660		2,022
A.T. Holdings II SÀRL			Biotechnology
First Lien Term Loan, 9.50% cash due 12/22/2022				32,454		32,337		32,325		(11)(15)
						32,337		32,325
Access CIG, LLC			Diversified Support Services
First Lien Term Loan, LIBOR+3.75% cash due 2/27/2025	4.21	%		3,334		3,158		3,289		(6)
Second Lien Term Loan, LIBOR+7.75% cash due 2/27/2026	8.21	%		17,000		16,932		16,904		(6)
						20,090		20,193
Accupac, Inc.			Personal Products
First Lien Term Loan, LIBOR+5.50% cash due 1/17/2026	6.50	%		16,058		15,722		16,058		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 1/17/2026				—		—		—		(6)(15)(19)
First Lien Revolver, LIBOR+5.50% cash due 1/17/2026	6.50	%		1,429		1,387		1,429		(6)(15)(19)
						17,109		17,487
Acquia Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 10/31/2025	8.00	%		27,349		26,987		27,295		(6)(15)
First Lien Revolver, LIBOR+7.00% cash due 10/31/2025				—		(28)		(4)		(6)(15)(19)
						26,959		27,291

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes

ADB Companies, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	7.26	%		$	15,067	$	14,511	$	14,916	(6)(15)
						14,511		14,916
Aden & Anais Merger Sub, Inc.			Apparel, Accessories & Luxury Goods
51,645 Common Units in Aden & Anais Holdings, Inc.						5,165		—		(15)
						5,165		—
AI Sirona (Luxembourg) Acquisition S.a.r.l.			Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/2026	7.25	%		€	24,838	27,742		27,198		(6)(11)(15)
						27,742		27,198
AIP RD Buyer Corp.			Distributors
Second Lien Term Loan, SOFR+7.75% cash due 12/23/2029	8.75	%		$	14,414	14,136		14,126		(6)(15)
14,410 Common Units in RD Holding LP						1,352		1,365		(15)
						15,488		15,491
AirStrip Technologies, Inc.			Application Software
5,715 Common Stock Warrants (exercise price $139.99) expiration date 5/11/2025						90		—		(15)
						90		—
All Web Leads, Inc.			Advertising
First Lien Term Loan, LIBOR+6.50% cash due 12/29/2023	7.50	%		23,382		21,566		22,456		(6)(15)
						21,566		22,456
Altice France S.A.			Integrated Telecommunication Services
Fixed Rate Bond, 5.50% cash due 10/15/2029				1,000		873		899		(11)
						873		899
Alvogen Pharma US, Inc.			Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	6.26	%		13,475		13,099		12,641		(6)
						13,099		12,641
Alvotech Holdings S.A.			Biotechnology							(13)
Fixed Rate Bond 15% PIK Tranche A due 6/24/2025				20,967		23,045		23,378		(11)(15)
Fixed Rate Bond 15% PIK Tranche B due 6/24/2025				20,512		22,581		22,871		(11)(15)
43,889 Common Shares						6,323		6,277		(11)(15)
						51,949		52,526
American Auto Auction Group, LLC			Consumer Finance
Second Lien Term Loan, SOFR+8.75% cash due 1/2/2029	9.50	%		14,760		14,471		14,539		(6)(15)
						14,471		14,539
American Tire Distributors, Inc.			Distributors
First Lien Term Loan, LIBOR+6.25% cash due 10/20/2028	7.00	%		9,945		9,821		9,883		(6)
						9,821		9,883
Amplify Finco Pty Ltd.			Movies & Entertainment
First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.00	%		15,298		13,894		14,903		(6)(11)(15)
Second Lien Term Loan, LIBOR+8.00% cash due 11/26/2027	8.75	%		12,500		12,188		12,000		(6)(11)(15)
						26,082		26,903
Ankura Consulting Group LLC			Research & Consulting Services
Second Lien Term Loan, LIBOR+8.00% cash due 3/19/2029	8.75	%		5,316		5,236		5,276		(6)(15)
						5,236		5,276
Apptio, Inc.			Application Software
First Lien Term Loan, LIBOR+7.25% cash due 1/10/2025	8.25	%		34,458		33,578		34,186		(6)(15)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025	8.25	%		892		856		875		(6)(15)(19)
						34,434		35,061

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes

Ardonagh Midco 3 PLC			Insurance Brokers
First Lien Term Loan, EURIBOR+7.00% cash due 7/14/2026	8.00	%		€	1,964	$	2,179	$	2,208	(6)(11)(15)
First Lien Term Loan, SONIA+7.00% cash due 7/14/2026	7.75	%		£	18,636	23,213		24,783		(6)(11)(15)
First Lien Term Loan, LIBOR+5.75% cash due 7/14/2026	6.50	%		$	10,519	10,335		10,403		(6)(11)(15)
First Lien Delayed Draw Term Loan, SONIA+5.75% cash due 7/14/2026				£	—	(44)		—		(6)(11)(15)(19)
						35,683		37,394
ASP Unifrax Holdings, Inc.			Trading Companies & Distributors
Fixed Rate Bond, 7.50% cash due 9/30/2029				$	5,500	5,403		4,902
						5,403		4,902
Associated Asphalt Partners, LLC			Construction Materials
First Lien Term Loan, LIBOR+5.25% cash due 4/5/2024	6.25	%		2,516		2,288		2,074		(6)
						2,288		2,074
Astra Acquisition Corp.			Application Software
First Lien Term Loan, LIBOR+5.25% cash due 10/25/2028	5.75	%		9,476		9,192		9,222		(6)
						9,192		9,222
athenahealth Group Inc.			Health Care Technology
18,635 Shares of Series A Preferred Stock in Minerva Holdco, Inc., 10.75%						18,264		18,477		(15)
						18,264		18,477
Athenex, Inc.			Pharmaceuticals
First Lien Term Loan, 11.00% cash due 6/19/2026				35,121		33,876		34,243		(11)(15)
First Lien Delayed Draw Term Loan, 11.00% cash due 6/19/2026				—		(274)		(527)		(11)(15)(19)
164,074.5 Common Stock Warrants (exercise price $12.63) expiration date 6/19/2027						486		2		(11)(15)
164,074.5 Common Stock Warrants (exercise price $1.10) expiration date 6/19/2027						486		48		(11)(15)
						34,574		33,766
Aurora Lux Finco S.À.R.L.			Airport Services
First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.00	%		22,540		22,159		21,255		(6)(11)(15)
						22,159		21,255
The Avery			Real Estate Operating Companies
First Lien Term Loan in T8 Urban Condo Owner, LLC, LIBOR+7.30% cash due 2/17/2023	7.75	%		16,407		16,238		16,463		(6)(15)
Subordinated Delayed Draw Debt in T8 Senior Mezz LLC, LIBOR+12.50% cash due 2/17/2023	13.42	%		3,925		3,887		3,931		(6)(15)(19)
						20,125		20,394
BAART Programs, Inc.			Health Care Services
First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00	%		2,272		2,229		2,218		(6)(15)(19)
Second Lien Term Loan, LIBOR+8.50% cash due 6/11/2028	9.51	%		7,166		7,059		7,059		(6)(15)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 6/11/2028	9.50	%		3,596		3,435		3,430		(6)(15)(19)
						12,723		12,707
Berner Food & Beverage, LLC			Soft Drinks
First Lien Term Loan, LIBOR+6.50% cash due 7/30/2027	7.50	%		33,245		32,729		32,477		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 7/30/2026	7.50	%		1,423		1,376		1,362		(6)(15)(19)
						34,105		33,839

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Blackhawk Network Holdings, Inc.			Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+7.00% cash due 6/15/2026	7.44	%		$	30,625	$	30,228	$	30,344	(6)
						30,228		30,344
Blumenthal Temecula, LLC			Automotive Retail
First Lien Term Loan, 9.00% cash due 9/24/2023				3,979		3,980		3,979		(15)
1,293,324 Preferred Units in Unstoppable Automotive AMV, LLC						1,293		1,293		(15)
298,460 Preferred Units in Unstoppable Automotive VMV, LLC						298		298		(15)
298,460 Common Units in Unstoppable Automotive AMV, LLC						298		298		(15)
						5,869		5,868
Cadence Aerospace, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+6.50% cash 2.00% PIK due 11/14/2023	7.50	%		14,221		13,024		13,060		(6)(15)
						13,024		13,060
CircusTrix Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+5.50% cash 2.50% PIK due 7/16/2023	6.50	%		10,819		10,141		9,604		(6)(15)
						10,141		9,604
CITGO Holding, Inc.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+7.00% cash due 8/1/2023	8.00	%		9,088		9,016		8,995		(6)
Fixed Rate Bond, 9.25% cash due 8/1/2024				10,672		10,672		10,791
						19,688		19,786
CITGO Petroleum Corp.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.25	%		8,290		8,073		8,285		(6)
						8,073		8,285
Clear Channel Outdoor Holdings Inc.			Advertising
Fixed Rate Bond, 7.50% cash due 6/1/2029				6,476		6,476		6,470		(11)
						6,476		6,470
CommScope Technologies LLC			Communications Equipment
Fixed Rate Bond, 5.00% cash due 3/15/2027				1,000		841		871		(11)
						841		871
Condor Merger Sub Inc.			Systems Software
Fixed Rate Bond, 7.375% cash due 2/15/2030				6,170		6,154		5,927
						6,154		5,927
Continental Intermodal Group LP			Oil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+8.50% cash due 1/28/2025	9.50	%		37,779		35,955		31,734		(6)(15)
Common Stock Warrants expiration date 7/28/2025						648		1,782		(15)
						36,603		33,516
Convergeone Holdings, Inc.			IT Consulting & Other Services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/2026	5.46	%		11,975		11,724		11,501		(6)
						11,724		11,501
Conviva Inc.			Application Software
517,851 Shares of Series D Preferred Stock						605		894		(15)
						605		894
CorEvitas, LLC			Health Care Services
First Lien Term Loan, SOFR+5.75% cash due 12/13/2025	6.75	%		13,782		13,609		13,681		(6)(15)
First Lien Revolver, PRIME+4.50% cash due 12/13/2025				—		(20)		(13)		(6)(15)(19)
1,099 Class A2 Common Units in CorEvitas Holdings, L.P.						690		2,340		(15)
						14,279		16,008
Coyote Buyer, LLC			Specialty Chemicals
First Lien Term Loan, LIBOR+6.00% cash due 2/6/2026	7.00	%		18,293		17,839		18,132		(6)(15)
First Lien Revolver, LIBOR+6.00% cash due 2/6/2025				—		(13)		(12)		(6)(15)(19)
						17,826		18,120

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Curium Bidco S.à.r.l.			Biotechnology
Second Lien Term Loan, LIBOR+7.75% cash due 10/27/2028	8.76	%		$	16,787	$	16,535	$	16,640	(6)(11)
						16,535		16,640
Delta Topco, Inc.			Systems Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/1/2028	8.00	%		6,680		6,647		6,591		(6)
						6,647		6,591
Dialyze Holdings, LLC			Health Care Equipment
First Lien Term Loan, LIBOR+9.00% cash 0.50% PIK due 8/4/2026	10.01	%		24,241		22,757		22,665		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+9.00% cash 0.50% PIK due 8/4/2026				—		(153)		(154)		(6)(15)(19)
5,403,823 Class A Warrants (exercise price $1.00) expiration date 8/4/2028						1,405		1,351		(15)
						24,009		23,862
Digital.AI Software Holdings, Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 2/10/2027	8.00	%		9,952		9,613		9,753		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 2/10/2027	7.50	%		359		333		337		(6)(15)(19)
						9,946		10,090
DirecTV Financing, LLC			Cable & Satellite
First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	5.75	%		18,145		17,964		18,149		(6)
						17,964		18,149
Eagleview Technology Corporation			Application Software
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/2026	8.51	%		8,974		8,884		8,794		(6)(15)
						8,884		8,794
EOS Fitness Opco Holdings, LLC			Leisure Facilities
487.5 Class A Preferred Units, 12%						488		467		(15)
12,500 Class B Common Units						—		—		(15)
						488		467
Fairbridge Strategic Capital Funding LLC			Real Estate Operating Companies							(20)
First Lien Delayed Draw Term Loan, 9.00% cash due 12/24/2028				7,150		7,150		7,150		(15)(19)
2,500 Warrant Units (exercise price $0.01) expiration date 11/24/2031						—		3		(11)(15)
						7,150		7,153
FINThrive Software Intermediate Holdings, Inc.			Health Care Technology
Second Lien Term Loan, LIBOR+6.75% cash due 12/17/2029	7.25	%		25,061		24,685		24,760		(6)
						24,685		24,760
Firstlight Holdco, Inc.			Alternative Carriers
First Lien Term Loan, LIBOR+3.50% cash due 7/23/2025	3.96	%		4,986		4,718		4,846		(6)
						4,718		4,846
Fortress Biotech, Inc.			Biotechnology
First Lien Term Loan, 11.00% cash due 8/27/2025				9,466		9,003		9,324		(11)(15)
331,200 Common Stock Warrants (exercise price $3.20) expiration date 8/27/2030						405		113		(11)(15)
						9,408		9,437
Frontier Communications Holdings, LLC			Integrated Telecommunication Services
Fixed Rate Bond, 6.00% cash due 1/15/2030				2,000		1,858		1,853		(11)
						1,858		1,853
GKD Index Partners, LLC			Specialized Finance
First Lien Term Loan, LIBOR+8.00% cash due 6/29/2023	9.01	%		25,744		25,379		25,255		(6)(15)
First Lien Revolver, LIBOR+8.00% cash due 6/29/2023	9.00	%		1,280		1,259		1,248		(6)(15)(19)
						26,638		26,503

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Global Medical Response, Inc.			Health Care Services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/2025	5.25	%		$	5,601	$	5,434	$	5,576	(6)
						5,434		5,576
Houghton Mifflin Harcourt Publishers Inc.			Education Services
First Lien Term Loan, LIBOR+6.25% cash due 11/22/2024	7.25	%		1,007		985		1,004		(6)(11)
						985		1,004
iCIMs, Inc.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 9/12/2024	7.50	%		25,635		25,127		25,547		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024	7.50	%		1,176		1,152		1,172		(6)(15)
						26,279		26,719
Immucor, Inc.			Health Care Supplies
First Lien Term Loan, LIBOR+5.75% cash due 7/2/2025	6.76	%		8,613		8,413		8,462		(6)(15)
Second Lien Term Loan, LIBOR+8.00% cash 3.50% PIK due 10/2/2025	9.01	%		22,222		21,689		21,944		(6)(15)
						30,102		30,406
Impel Neuropharma, Inc.			Health Care Technology
First Lien Revenue Interest Financing Term Loan due 2/15/2031				12,161		12,161		12,161		(6)(15)
First Lien Term Loan, SOFR+8.75% cash due 3/17/2027	9.75	%		12,161		11,919		11,917		(6)(15)
						24,080		24,078
Innocoll Pharmaceuticals Limited			Health Care Technology
First Lien Term Loan, 11.00% cash due 1/26/2027				6,817		6,522		6,533		(11)(15)
First Lien Delayed Draw Term Loan, 11.00% cash due 1/26/2027				—		—		—		(11)(15)(19)
56,999 Tranche A Warrant Shares (exercise price $4.23) expiration date 1/26/2029						135		141		(11)(15)
						6,657		6,674
Integral Development Corporation			Other Diversified Financial Services
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024						113		—		(15)
						113		—
Inventus Power, Inc.			Electrical Components & Equipment
First Lien Term Loan, SOFR+5.00% cash due 3/29/2024	6.00	%		18,755		18,630		18,239		(6)(15)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/2024	9.50	%		13,674		13,474		13,195		(6)(15)
						32,104		31,434
INW Manufacturing, LLC			Personal Products
First Lien Term Loan, LIBOR+5.75% cash due 5/7/2027	6.76	%		36,563		35,625		35,831		(6)(15)
						35,625		35,831
IPC Corp.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 10/1/2026	7.50	%		34,185		33,351		33,245		(6)(15)
						33,351		33,245
Itafos Inc.			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+8.25% cash due 8/25/2024	9.25	%		17,861		17,289		17,218		(6)(15)
						17,289		17,218
Ivanti Software, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/1/2028	7.77	%		10,247		10,196		10,145		(6)
						10,196		10,145
Jazz Acquisition, Inc.			Aerospace & Defense
First Lien Term Loan, LIBOR+7.50% cash due 1/29/2027	8.50	%		36,419		35,231		36,622		(6)(15)
						35,231		36,622
Kings Buyer, LLC			Environmental & Facilities Services
First Lien Term Loan, LIBOR+6.50% cash due 10/29/2027	7.50	%		13,692		13,555		13,487		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 10/29/2027	7.50	%		659		640		631		(6)(15)(19)
						14,195		14,118
LaserShip, Inc.			Air Freight & Logistics
Second Lien Term Loan, LIBOR+7.50% cash due 5/7/2029	8.25	%		4,787		4,739		4,775		(6)(15)
						4,739		4,775

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Latam Airlines Group S.A.			Airlines
First Lien Delayed Draw Term Loan, LIBOR+11.00% PIK due 3/29/2022				$	17,918	$	17,912	$	17,918	(6)(11)(15)(19)
First Lien Delayed Draw Term Loan, LIBOR+7.50% PIK due 3/29/2022				7,912		7,908		7,912		(6)(11)(15)(19)
						25,820		25,830
Lift Brands Holdings, Inc.			Leisure Facilities
2,000,000 Class A Common Units in Snap Investments, LLC						1,399		—		(15)
						1,399		—
Lightbox Intermediate, L.P.			Real Estate Services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/2026	6.01	%		41,220		40,344		40,602		(6)(15)
						40,344		40,602
Liquid Environmental Solutions Corporation			Environmental & Facilities Services
Second Lien Term Loan, LIBOR+8.50% cash due 11/30/2026	9.50	%		4,357		4,276		4,259		(6)(15)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 11/30/2026	9.50	%		1,162		1,139		1,083		(6)(15)(19)
						5,415		5,342
LSL Holdco, LLC			Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 1/31/2028	6.75	%		19,236		18,862		18,852		(6)(15)
First Lien Revolver, LIBOR+6.00% cash due 1/31/2028	6.75	%		427		386		385		(6)(15)(19)
						19,248		19,237
LTI Holdings, Inc.			Electronic Components
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/2026	7.21	%		2,140		2,087		2,104		(6)
						2,087		2,104
Marinus Pharmaceuticals, Inc.			Pharmaceuticals
First Lien Term Loan, 11.50% cash due 5/11/2026				17,203		16,920		16,859		(11)(15)
First Lien Delayed Draw Term Loan, 11.50% cash due 5/11/2026				—		—		—		(11)(15)(19)
						16,920		16,859
Mesoblast, Inc.			Biotechnology
First Lien Term Loan, 8.00% cash 1.75% PIK due 11/19/2026				7,152		6,517		6,437		(11)(15)
First Lien Delayed Draw Term Loan, 8.00% cash 1.75% PIK due 11/19/2026				—		1		1		(11)(15)(19)
209,588 Warrant Shares (exercise price $7.26) expiration date 11/19/2028						480		398		(11)(15)
						6,998		6,836
MHE Intermediate Holdings, LLC			Diversified Support Services
First Lien Term Loan, LIBOR+5.75% cash due 7/21/2027	7.04	%		16,346		16,058		16,034		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.75% cash due 7/21/2027	6.88	%		1,231		1,197		1,190		(6)(15)(19)
First Lien Revolver, LIBOR+5.75% cash due 7/21/2027	6.75	%		57		32		30		(6)(15)(19)
						17,287		17,254
Mindbody, Inc.			Internet Services & Infrastructure
First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/2025	8.38	%		45,313		44,131		44,634		(6)(15)
First Lien Revolver, LIBOR+8.00% cash due 2/14/2025				—		(64)		(60)		(6)(15)(19)
						44,067		44,574
Mosaic Companies, LLC			Home Improvement Retail
First Lien Term Loan, LIBOR+6.75% cash due 7/2/2026	7.75	%		46,796		46,000		46,234		(6)(15)
						46,000		46,234

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
MRI Software LLC			Application Software
First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	6.51	%		$	28,108	$	27,620	$	28,015	(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026				—		(13)		(17)		(6)(15)(19)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026				—		(13)		(6)		(6)(15)(19)
						27,594		27,992
Navisite, LLC			Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+8.50% cash due 12/30/2026	9.51	%		22,560		22,203		21,545		(6)(15)
						22,203		21,545
NeuAG, LLC			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024	7.00	%		48,710		47,254		48,077		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024				—		(197)		(71)		(6)(15)(19)
						47,057		48,006
NFP Corp.			Other Diversified Financial Services
Fixed Rate Bond 6.875% cash due 8/15/2028				9,703		9,310		9,279
						9,310		9,279
NN, Inc.			Industrial Machinery
First Lien Term Loan, LIBOR+6.88% cash due 9/19/2026	7.88	%		59,011		57,813		57,654		(6)(11)(15)
						57,813		57,654
OEConnection LLC			Application Software
First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	4.46	%		3,340		3,158		3,293		(6)
Second Lien Term Loan, LIBOR+7.00% cash due 9/25/2027	7.50	%		7,519		7,376		7,331		(6)(15)
						10,534		10,624
OTG Management, LLC			Airport Services
First Lien Term Loan, LIBOR+2.00% cash 8.00% PIK due 9/1/2025	3.00	%		20,702		20,362		20,288		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+2.00% cash 8.00% PIK due 9/1/2025				—		(34)		(38)		(6)(15)(19)
						20,328		20,250
P & L Development, LLC			Pharmaceuticals
Fixed Rate Bond, 7.75% cash due 11/15/2025				7,776		7,826		7,178
						7,826		7,178
Park Place Technologies, LLC			Internet Services & Infrastructure
First Lien Term Loan, LIBOR+5.00% cash due 11/10/2027	6.00	%		9,900		9,470		9,871		(6)
						9,470		9,871
Performance Health Holdings, Inc.			Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 7/12/2027	7.01	%		17,976		17,660		17,655		(6)(15)
						17,660		17,655
PFNY Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+7.00% cash due 12/31/2026	8.00	%		26,286		25,789		25,760		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 12/31/2026				—		(47)		(50)		(6)(15)(19)
First Lien Revolver, LIBOR+7.00% cash due 12/31/2026				—		(24)		(25)		(6)(15)(19)
						25,718		25,685
Planview Parent, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.26	%		28,627		28,198		28,484		(6)(15)
						28,198		28,484
PLNTF Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+8.00% cash due 3/22/2026	9.00	%		3,940		3,877		3,930		(6)(15)
						3,877		3,930

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Pluralsight, LLC			Application Software
First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00	%		$	48,689	$	47,869	$	47,715	(6)(15)
First Lien Revolver, LIBOR+8.00% cash due 4/6/2027				—		(59)		(71)		(6)(15)(19)
						47,810		47,644
PRGX Global, Inc.			Data Processing & Outsourced Services
First Lien Term Loan, LIBOR+6.75% cash due 3/3/2026	7.76	%		33,946		32,974		33,413		(6)(15)
First Lien Revolver, LIBOR+6.75% cash due 3/3/2026				—		(39)		(40)		(6)(15)(19)
80,515 Class B Common Units						79		89		(15)
						33,014		33,462
Profrac Holdings II, LLC			Industrial Machinery
First Lien Term Loan, SOFR+8.50% cash due 3/4/2025	9.50	%		34,743		33,727		34,048		(6)(15)
						33,727		34,048
Project Boost Purchaser, LLC			Application Software
Second Lien Term Loan, LIBOR+8.00% cash due 5/31/2027	8.46	%		5,250		5,160		5,230		(6)(15)
						5,160		5,230
Quantum Bidco Limited			Food Distributors
First Lien Term Loan, SONIA+6.00% cash due 1/29/2028	6.28	%		£	3,501	4,639		4,496		(6)(11)(15)
						4,639		4,496
QuorumLabs, Inc.			Application Software
64,887,669 Junior-2 Preferred Stock						375		—		(15)
						375		—
Radiology Partners Inc.			Health Care Distributors
Fixed Rate Bond, 9.25% cash due 2/1/2028				$	4,755	4,717		4,764
						4,717		4,764
Relativity ODA LLC			Application Software
First Lien Term Loan, LIBOR+7.50% cash due 5/12/2027	8.50	%		23,727		23,254		23,276		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 5/12/2027				—		(47)		(42)		(6)(15)(19)
						23,207		23,234
Renaissance Holding Corp.			Diversified Banks
Second Lien Term Loan, LIBOR+7.00% cash due 5/29/2026	7.46	%		3,542		3,515		3,520		(6)
						3,515		3,520
RumbleOn, Inc.			Automotive Retail
First Lien Term Loan, LIBOR+8.25% cash due 8/31/2026	9.25	%		37,846		35,714		36,484		(6)(11)(15)
First Lien Delayed Draw Term Loan, LIBOR+8.25% cash due 8/31/2026	9.25	%		11,450		10,533		10,864		(6)(11)(15)(19)
164,660 Class B Common Stock Warrants (exercise price $33.00) expiration date 2/28/2023						1,202		978		(11)(15)
						47,449		48,326
Sabert Corporation			Metal & Glass Containers
First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	5.50	%		1,771		1,677		1,707		(6)
						1,677		1,707
Scilex Pharmaceuticals Inc.			Pharmaceuticals
Fixed Rate Zero Coupon Bond due 8/15/2026				6,030		5,322		5,891		(15)
						5,322		5,891
ShareThis, Inc.			Application Software
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024						367		$	—	(15)
						367		—

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes

SiO2 Medical Products, Inc.			Metal & Glass Containers
First Lien Term Loan, 5.50% cash 5.50% PIK due 12/21/2026				$	44,332	$	43,540	$	43,538	(15)
Common Stock Warrants (exercise price $0.75) expiration date 7/31/2028						681		681		(15)
						44,221		44,219
Sirva Worldwide, Inc.			Diversified Support Services
First Lien Term Loan, LIBOR+5.50% cash due 8/4/2025	5.96	%		1,716		1,557		1,590		(6)
						1,557		1,590
SM Wellness Holdings, Inc.			Health Care Services
Second Lien Term Loan, LIBOR+8.00% cash due 4/16/2029	8.75	%		9,109		8,972		9,155		(6)(15)
						8,972		9,155
SonicWall US Holdings Inc.			Technology Distributors
Second Lien Term Loan, LIBOR+7.50% cash due 5/18/2026	7.99	%		3,195		3,163		3,142		(6)(15)
						3,163		3,142
Sorrento Therapeutics, Inc.			Biotechnology
50,000 Common Stock Units						197		117		(11)
						197		117
Spanx, LLC			Apparel Retail
First Lien Term Loan, LIBOR+5.50% cash due 11/20/2028	6.25	%		4,557		4,471		4,466		(6)(15)
First Lien Revolver, LIBOR+5.25% cash due 11/18/2027				—		(58)		(62)		(6)(15)(19)
						4,413		4,404
SumUp Holdings Luxembourg S.À.R.L.			Other Diversified Financial Services
First Lien Term Loan, EURIBOR+8.50% cash due 3/10/2026	10.00	%		€	16,911	19,414		18,534		(6)(11)(15)
						19,414		18,534
Sunland Asphalt & Construction, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.00% cash due 1/13/2026	7.00	%		$	42,835	41,719		42,039		(6)(15)
						41,719		42,039
Supermoose Borrower, LLC			Application Software
First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	4.76	%		3,484		3,101		3,289		(6)
						3,101		3,289
SVP-Singer Holdings Inc.			Home Furnishings
First Lien Term Loan, LIBOR+6.75% cash due 7/28/2028	7.76	%		20,871		19,543		19,619		(6)(15)
						19,543		19,619
Swordfish Merger Sub LLC			Auto Parts & Equipment
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/2026	7.75	%		12,500		12,470		12,469		(6)(15)
						12,470		12,469
Tacala, LLC			Restaurants
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/2028	8.25	%		9,448		9,328		9,341		(6)
						9,328		9,341
Tahoe Bidco B.V.			Application Software
First Lien Term Loan, LIBOR+6.00% cash due 9/29/2028	6.75	%		23,215		22,782		22,820		(6)(11)(15)
First Lien Revolver, LIBOR+6.00% cash due 10/1/2027				—		(32)		(31)		(6)(11)(15)(19)
						22,750		22,789
Tecta America Corp.			Construction & Engineering
Second Lien Term Loan, LIBOR+8.50% cash due 4/9/2029	9.25	%		5,203		5,125		5,255		(6)(15)
						5,125		5,255
Telestream Holdings Corporation			Application Software
First Lien Term Loan, LIBOR+8.75% cash due 10/15/2025	9.75	%		18,416		17,987		18,195		(6)(15)
First Lien Revolver, LIBOR+8.75% cash due 10/15/2025				—		(24)		(21)		(6)(15)(19)
						17,963		18,174

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes

TerSera Therapeutics LLC			Pharmaceuticals
Second Lien Term Loan, LIBOR+9.50% cash due 3/30/2026	10.51	%		$	29,663	$	29,308	$	29,139	(6)(15)
668,879 Common Units of TerSera Holdings LLC						2,179		3,487		(15)
						31,487		32,626
TGNR HoldCo LLC			Integrated Oil & Gas
Subordinated Debt, 11.50% cash due 5/14/2026				4,984		4,853		4,897		(10)(11)(15)
						4,853		4,897
Thermacell Repellents, Inc.			Leisure Products
First Lien Term Loan, LIBOR+5.75% cash due 12/4/2026	6.76	%		6,603		6,569		6,570		(6)(15)
First Lien Revolver, LIBOR+5.75% cash due 12/4/2026	6.75	%		604		600		600		(6)(15)(19)
						7,169		7,170
Thrasio, LLC			Internet & Direct Marketing Retail
First Lien Term Loan, LIBOR+7.00% cash due 12/18/2026	8.01	%		37,685		36,644		37,252		(6)(15)
8,434 Shares of Series C-3 Preferred Stock in Thrasio Holdings, Inc.						101		171		(15)
284,650.32 Shares of Series C-2 Preferred Stock in Thrasio Holdings, Inc.						2,409		5,764		(15)
48,352 Shares of Series D Preferred Stock in Thrasio Holdings, Inc.						979		979		(15)
23,201 Shares of Series X Preferred Stock in Thrasio Holdings, Inc.						22,986		26,487		(15)(19)
						63,119		70,653
TIBCO Software Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 3/3/2028	7.71	%		14,788		14,693		14,785		(6)
						14,693		14,785
Touchstone Acquisition, Inc.			Health Care Supplies
First Lien Term Loan, LIBOR+6.00% cash due 12/29/2028	6.75	%		6,046		5,929		5,925		(6)(15)
						5,929		5,925
Uniti Group LP			Specialized REITs
Fixed Rate Bond, 6.50% cash due 2/15/2029				1,500		1,404		1,400		(11)
						1,404		1,400
Veritas US Inc.			Application Software
First Lien Term Loan, LIBOR+5.00% cash due 9/1/2025	6.00	%		5,910		5,614		5,547		(6)
						5,614		5,547
Vertiv Group Corporation			Electrical Components & Equipment
Fixed Rate Bond, 4.125% cash due 11/15/2028				1,000		852		914		(11)
						852		914
Win Brands Group LLC			Housewares & Specialties
First Lien Term Loan, LIBOR+9.00% cash 5.00% PIK due 1/22/2026	10.00	%		3,737		3,700		3,709		(6)(15)
181 Class F Warrants in Brand Value Growth LLC (exercise price $0.01) expiration date 1/25/2027						—		135		(15)
						3,700		3,844
Windstream Services II, LLC			Integrated Telecommunication Services
First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.25	%		25,631		24,672		25,631		(6)
18,032 Shares of Common Stock in Windstream Holdings II, LLC						216		366		(15)
109,420 Warrants in Windstream Holdings II, LLC						1,842		2,220		(15)
						26,730		28,217
WP CPP Holdings, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+3.75% cash due 4/30/2025	4.75	%		7,617		7,180		7,236		(6)
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/2026	8.75	%		16,000		15,784		15,667		(6)(15)
						22,964		22,903

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
WPEngine, Inc.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 3/27/2026	8.00	%		$	40,536	$	39,863	$	40,057	(6)(15)
						39,863		40,057
WWEX Uni Topco Holdings, LLC			Air Freight & Logistics
Second Lien Term Loan, LIBOR+7.00% cash due 7/26/2029	8.01	%		5,000		4,925		4,931		(6)
						4,925		4,931
Zayo Group Holdings, Inc.			Alternative Carriers
Fixed Rate Bond, 6.125% cash due 3/1/2028				1,000		890		897
						890		897
Zep Inc.			Specialty Chemicals
Second Lien Term Loan, LIBOR+8.25% cash due 8/11/2025	9.26	%		19,578		19,536		17,777		(6)(15)
						19,536		17,777
Zephyr Bidco Limited			Specialized Finance
Second Lien Term Loan, SONIA+7.50% cash due 7/23/2026	8.22	%		£	18,000	23,812		23,544		(6)(11)
						23,812		23,544
Total Non-Control/Non-Affiliate Investments (178.4% of net assets)						$	2,365,667	$	2,373,951
Total Portfolio Investments (198.8% of net assets)						$	2,659,748	$	2,644,775
Cash and Cash Equivalents and Restricted Cash
JP Morgan Prime Money Market Fund, Institutional Shares						$	6,228	$	6,228
Other cash accounts						35,533		35,533
Total Cash and Cash Equivalents and Restricted Cash (3.1% of net assets)						$	41,761	$	41,761
Total Portfolio Investments and Cash and Cash Equivalents and Restricted Cash (201.9% of net assets)						$	2,701,509	$	2,686,536


Derivative Instrument	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Counterparty	Cumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract	$	49,897	€	43,643	5/12/2022	JPMorgan Chase Bank, N.A.	$	1,270
Foreign currency forward contract	$	54,292	£	40,109	5/12/2022	JPMorgan Chase Bank, N.A.	1,494
							$	2,764

Derivative Instrument

Company Receives

Company Pays

Counterparty

Maturity Date

Notional Amount

Fair Value

Interest rate swap

Fixed 2.7%

Floating 3-month LIBOR +1.658%

Royal Bank of Canada

1/15/2027

$350,000

$(23,272)

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

March 31, 2022

(dollar amounts in thousands)

(unaudited)

(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.

(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.

(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.

(4)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.

(5)Each of the Company's investments is pledged as collateral under one or more of its credit facilities. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.

(6)The interest rate on the principal balance outstanding for most of the floating rate loans is indexed to the London Interbank Offered Rate ("LIBOR") and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. Certain loans may also be indexed to the secured overnight financing rate ("SOFR") or the sterling overnight index average ("SONIA"). The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of March 31, 2022, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 0.46%, the 90-day LIBOR at 1.01%, the 180-day LIBOR at 1.50%, the 360-day LIBOR at 2.20%, the PRIME at 3.50%, the SOFR at 0.28%, the SONIA at 0.69%, the 30-day EURIBOR at (0.53)%, the 90-day EURIBOR at (0.47)% and the 180-day EURIBOR at (0.38)%. Most loans include an interest floor, which generally ranges from 0% to 1%.

(7)Principal includes accumulated payment in kind ("PIK") interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.

(8)Control Investments generally are defined by the Investment Company Act of 1940, as amended (the "Investment Company Act"), as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.

(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" these portfolio companies as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the Consolidated Financial Statements for transactions during the six months ended March 31, 2022 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.

(10)This investment represents a participation interest in the underlying securities shown.

(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of March 31, 2022, qualifying assets represented 74.6% of the Company's total assets and non-qualifying assets represented 25.4% of the Company's total assets.

(12)Income producing through payment of dividends or distributions.

(13)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment subsequent to a restructure that occurred during the year ended September 30, 2021. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of March 31, 2022, the accumulated PIK interest balance for the A notes and the B notes was $2.4 million and $2.4 million, respectively.

(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.

(15)As of March 31, 2022, these investments were categorized as Level 3 within the fair value hierarchy established by Financial Accounting Standards Board ("FASB") guidance under Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC 820").

(16)This investment was valued using net asset value as a practical expedient for fair value. Consistent with ASC 820, these investments are excluded from the hierarchical levels.

(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.

(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.

(19)Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.

(20)This investment was renamed during the three months ended March 31, 2022. For periods prior to March 31, 2022, this investment was referenced as Realfi Strategic Capital Funding LLC.

See notes to Consolidated Financial Statements.

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Control Investments										(8)(9)
C5 Technology Holdings, LLC			Data Processing & Outsourced Services
829 Common Units						$	—	$	—	(15)
34,984,460.37 Preferred Units						34,984		27,638		(15)
						34,984		27,638
Dominion Diagnostics, LLC			Health Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/2024	6.00	%		$	27,381	27,381		27,381		(6)(15)
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024				—		—		—		(6)(15)(19)
30,030.8 Common Units in DD Healthcare Services Holdings, LLC						18,625		18,065		(12)(15)
						46,006		45,446
First Star Speir Aviation Limited			Airlines							(10)
First Lien Term Loan, 9.00% cash due 12/15/2025				7,500		—		7,500		(11)(15)
100% equity interest						6,332		698		(11)(12)(15)
						6,332		8,198
OCSI Glick JV LLC			Multi-Sector Holdings							(14)
Subordinated Debt, LIBOR+4.50% cash due 10/20/2028	4.60	%		61,709		50,705		55,582		(6)(11)(15)(19)
87.5% equity interest						—		—		(11)(16)(19)
						50,705		55,582
Senior Loan Fund JV I, LLC			Multi-Sector Holdings							(14)
Subordinated Debt, LIBOR+7.00% cash due 12/29/2028	8.00	%		96,250		96,250		96,250		(6)(11)(15)(19)
87.5% LLC equity interest						49,322		37,651		(11)(12)(16)(19)
						145,572		133,901
Total Control Investments (20.6% of net assets)						$	283,599	$	270,765

Affiliate Investments										(17)
Assembled Brands Capital LLC			Specialized Finance
First Lien Revolver, LIBOR+6.00% cash due 10/17/2023	7.00	%		$	15,899	$	15,900	$	15,712	(6)(15)(19)
1,609,201 Class A Units						764		587		(15)
1,019,168.80 Preferred Units, 6%						1,019		1,152		(15)
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029						—		—		(15)
						17,683		17,451
Caregiver Services, Inc.			Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%						1,080		838		(15)
						1,080		838
Total Affiliate Investments (1.4% of net assets)						$	18,763	$	18,289

Non-Control/Non-Affiliate Investments										(18)
4 Over International, LLC			Commercial Printing
First Lien Term Loan, LIBOR+6.00% cash due 6/7/2022	7.00	%		$	10,927	$	10,524	$	10,484	(6)(15)
First Lien Revolver, LIBOR+6.00% cash due 6/7/2022				—		(24)		(93)		(6)(15)(19)
						10,500		10,391
109 Montgomery Owner LLC			Real Estate Operating Companies
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 2/2/2023	7.50	%		3,102		2,984		3,153		(6)(15)(19)
						2,984		3,153
A.T. Holdings II SÀRL			Biotechnology
First Lien Term Loan, 9.50% cash due 12/22/2022				37,158		36,930		36,972		(11)(15)
						36,930		36,972
Access CIG, LLC			Diversified Support Services
First Lien Term Loan, LIBOR+3.75% cash due 2/27/2025	3.83	%		5,352		5,021		5,332		(6)
Second Lien Term Loan, LIBOR+7.75% cash due 2/27/2026	7.83	%		17,000		16,923		17,028		(6)
						21,944		22,360

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Accupac, Inc.			Personal Products
First Lien Term Loan, LIBOR+6.00% cash due 1/17/2026	7.00	%		$	16,140	$	15,758	$	16,140	(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 1/17/2026				—		(29)		—		(6)(15)(19)
First Lien Revolver, LIBOR+6.00% cash due 1/17/2026	7.00	%		1,838		1,789		1,838		(6)(15)(19)
						17,518		17,978
Acquia Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 10/31/2025	8.00	%		27,349		26,936		27,295		(6)(15)
First Lien Revolver, LIBOR+7.00% cash due 10/31/2025	8.00	%		179		148		175		(6)(15)(19)
						27,084		27,470
ADB Companies, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	7.25	%		15,463		14,817		15,287		(6)(15)
						14,817		15,287
Aden & Anais Merger Sub, Inc.			Apparel, Accessories & Luxury Goods
51,645 Common Units in Aden & Anais Holdings, Inc.						5,165		—		(15)
						5,165		—
AI Sirona (Luxembourg) Acquisition S.a.r.l.			Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/2026	7.25	%		€	24,838	27,720		28,738		(6)(11)(15)
						27,720		28,738
AirStrip Technologies, Inc.			Application Software
5,715 Common Stock Warrants (exercise price $139.99) expiration date 5/11/2025						90		—		(15)
						90		—
All Web Leads, Inc.			Advertising
First Lien Term Loan, LIBOR+6.50% cash due 12/29/2023	7.50	%		$	23,899	21,512		22,992		(6)(15)
						21,512		22,992
Alvogen Pharma US, Inc.			Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	6.25	%		13,825		13,329		13,383		(6)
						13,329		13,383
Alvotech Holdings S.A.			Biotechnology							(13)
Fixed Rate Bond 15% PIK Tranche A due 6/24/2025				20,967		20,576		20,967		(11)(15)
Fixed Rate Bond 15% PIK Tranche B due 6/24/2025				20,512		20,169		20,512		(11)(15)
27,308 Common Shares						6,322		6,322		(15)
						47,067		47,801
Amplify Finco Pty Ltd.			Movies & Entertainment
First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.00	%		15,376		13,814		14,985		(6)(11)(15)
Second Lien Term Loan, LIBOR+8.00% cash due 11/26/2027	8.75	%		12,500		12,188		12,063		(6)(11)(15)
						26,002		27,048
Ankura Consulting Group LLC			Research & Consulting Services
Second Lien Term Loan, LIBOR+8.00% cash due 3/19/2029	8.75	%		7,466		7,354		7,606		(6)(15)
						7,354		7,606
Apptio, Inc.			Application Software
First Lien Term Loan, LIBOR+7.25% cash due 1/10/2025	8.25	%		34,458		33,420		33,922		(6)(15)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025	8.25	%		892		849		858		(6)(15)(19)
						34,269		34,780
Ardonagh Midco 3 PLC			Insurance Brokers
First Lien Term Loan, EURIBOR+7.25% cash due 7/14/2026	8.25	%		€	1,964	2,179		2,283		(6)(11)(15)
First Lien Term Loan, UK LIBOR+7.25% cash due 7/14/2026	8.00	%		£	18,636	23,336		25,329		(6)(11)(15)
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 7/14/2026				$	—	—		—		(6)(11)(15)(19)
First Lien Delayed Draw Term Loan, SONIA+6.00% cash due 7/14/2026				£	—	—		—		(6)(11)(15)(19)
						25,515		27,612

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Associated Asphalt Partners, LLC			Construction Materials
First Lien Term Loan, LIBOR+5.25% cash due 4/5/2024	6.25	%		$	2,531	$	2,245	$	2,350	(6)
						2,245		2,350
Athenex, Inc.			Pharmaceuticals
First Lien Term Loan, 11.00% cash due 6/19/2026				42,145		40,475		41,845		(11)(15)
First Lien Delayed Draw Term Loan, 11.00% cash due 6/19/2026				—		(274)		(150)		(11)(15)(19)
328,149 Common Stock Warrants (exercise price $12.63) expiration date 6/19/2027						973		95		(11)(15)
						41,174		41,790
Aurora Lux Finco S.À.R.L.			Airport Services
First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.00	%		22,655		22,232		21,318		(6)(11)(15)
						22,232		21,318
The Avery			Real Estate Operating Companies
First Lien Delayed Draw Term Loan in T8 Urban Condo Owner, LLC, LIBOR+7.30% cash due 2/17/2023	7.55	%		20,287		19,933		20,490		(6)(15)(19)
Subordinated Delayed Draw Debt in T8 Senior Mezz LLC, LIBOR+12.50% cash due 2/17/2023	12.75	%		4,692		4,614		4,698		(6)(15)(19)
						24,547		25,188
BAART Programs, Inc.			Health Care Services
Second Lien Term Loan, LIBOR+8.50% cash due 6/11/2028	9.50	%		7,166		7,059		7,130		(6)(15)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 6/11/2028				—		(52)		(18)		(6)(15)(19)
						7,007		7,112
Berner Food & Beverage, LLC			Soft Drinks
First Lien Term Loan, LIBOR+6.50% cash due 7/30/2027	7.50	%		33,412		32,844		32,844		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 7/30/2027	7.50	%		619		566		566		(6)(15)(19)
						33,410		33,410
Blackhawk Network Holdings, Inc.			Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+7.00% cash due 6/15/2026	7.13	%		30,625		30,181		30,523		(6)
						30,181		30,523
Blumenthal Temecula, LLC			Automotive Retail
First Lien Term Loan, 9.00% cash due 9/24/2023				3,979		3,980		3,979		(15)
1,293,324 Preferred Units in Unstoppable Automotive AMV, LLC						1,293		1,293		(15)
298,460 Preferred Units in Unstoppable Automotive VMV, LLC						298		298		(15)
298,460 Common Units in Unstoppable Automotive AMV, LLC						298		298		(15)
99,486 Common Units in Unstoppable Automotive VMV, LLC						100		99		(15)
						5,969		5,967
Cadence Aerospace, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+6.50% cash 2.00% PIK due 11/14/2023	7.50	%		14,146		12,574		12,992		(6)(15)
						12,574		12,992
Chief Power Finance II, LLC			Independent Power Producers & Energy Traders
First Lien Term Loan, LIBOR+6.50% cash due 12/31/2022	7.50	%		23,850		23,458		23,552		(6)(15)
						23,458		23,552
CircusTrix Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+5.50% cash 2.50% PIK due 7/16/2023	6.50	%		10,686		9,793		8,816		(6)(15)(19)
						9,793		8,816
CITGO Holding, Inc.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+7.00% cash due 8/1/2023	8.00	%		11,635		11,517		11,512		(6)
Fixed Rate Bond, 9.25% cash due 8/1/2024				10,672		10,672		10,765
						22,189		22,277

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
CITGO Petroleum Corp.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.25	%		$	14,221	$	13,855	$	14,269	(6)
						13,855		14,269
Clear Channel Outdoor Holdings Inc.			Advertising
Fixed Rate Bond, 7.50% cash due 6/1/2029				7,137		7,137		7,431		(11)
						7,137		7,431
Continental Intermodal Group LP			Oil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+9.50% PIK due 1/28/2025				38,876		36,668		32,628		(6)(15)
Common Stock Warrants expiration date 7/28/2025						648		1,909		(15)
						37,316		34,537
Convergeone Holdings, Inc.			IT Consulting & Other Services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/2026	5.08	%		7,024		6,848		7,003		(6)
						6,848		7,003
Conviva Inc.			Application Software
517,851 Shares of Series D Preferred Stock						605		894		(15)
						605		894
CorEvitas, LLC			Health Care Services
First Lien Term Loan, LIBOR+5.50% cash due 12/13/2025	6.50	%		10,196		10,071		10,109		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 12/13/2025	6.50	%		1,943		1,894		1,912		(6)(15)(19)
First Lien Revolver, PRIME+4.50% cash due 12/13/2025	7.75	%		305		283		290		(6)(15)(19)
1,099 Class A2 Common Units in CorEvitas Holdings, L.P.						1,038		1,177		(15)
						13,286		13,488
Coty Inc.			Personal Products
First Lien Revolver, LIBOR+1.75% cash due 4/5/2023				—		(712)		(395)		(6)(11)(15)(19)
						(712)		(395)
Coyote Buyer, LLC			Specialty Chemicals
First Lien Term Loan, LIBOR+6.00% cash due 2/6/2026	7.00	%		18,387		17,887		18,225		(6)(15)
First Lien Revolver, LIBOR+6.00% cash due 2/6/2025				—		(13)		(12)		(6)(15)(19)
						17,874		18,213
Curium Bidco S.à.r.l.			Biotechnology
Second Lien Term Loan, LIBOR+7.75% cash due 10/27/2028	8.50	%		16,787		16,535		17,070		(6)(11)(15)
						16,535		17,070
Delta Topco, Inc.			Systems Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/1/2028	8.00	%		6,680		6,647		6,769		(6)
						6,647		6,769
Dialyze Holdings, LLC			Health Care Equipment
First Lien Term Loan, LIBOR+7.00% cash 2.00% PIK due 8/4/2026	8.00	%		24,093		22,439		22,467		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash 2.00% PIK due 8/4/2026				—		(170)		(163)		(6)(15)(19)
5,403,823 Class A Warrants (exercise price $1.00) expiration date 8/4/2028						1,405		1,459		(15)
						23,674		23,763
Digital.AI Software Holdings, Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 2/10/2027	8.00	%		10,003		9,627		9,783		(6)(15)
First Lien Revolver, LIBOR+7.00% cash due 2/10/2027	8.00	%		180		151		156		(6)(15)(19)
						9,778		9,939
DirecTV Financing, LLC			Cable & Satellite
First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	5.75	%		27,000		26,730		27,048		(6)
						26,730		27,048
Eagleview Technology Corporation			Application Software
Second Lien Term Loan, LIBOR+7.50% cash due 8/14/2026	8.50	%		8,974		8,884		8,918		(6)(15)
						8,884		8,918

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
EHR Canada, LLC			Food Retail
First Lien Term Loan, LIBOR+8.00% cash due 12/31/2021	9.00	%		$	3,750	$	3,745	$	3,750	(6)(15)
						3,745		3,750
EOS Fitness Opco Holdings, LLC			Leisure Facilities
487.5 Class A Preferred Units, 12%						488		274		(15)
12,500 Class B Common Units						—		—		(15)
						488		274
Firstlight Holdco, Inc.			Alternative Carriers
First Lien Term Loan, LIBOR+3.50% cash due 7/23/2025	3.58	%		7,012		6,578		6,939		(6)
						6,578		6,939
Fortress Biotech, Inc.			Biotechnology
First Lien Term Loan, 11.00% cash due 8/27/2025				11,359		10,722		11,075		(11)(15)
331,200 Common Stock Warrants (exercise price $3.20) expiration date 8/27/2030						405		341		(11)(15)
						11,127		11,416
GI Chill Acquisition LLC			Managed Health Care
First Lien Term Loan, LIBOR+3.75% cash due 8/6/2025	3.90	%		12,653		12,442		12,621		(6)(15)
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/2026	7.63	%		6,250		6,212		6,219		(6)(15)
						18,654		18,840
GKD Index Partners, LLC			Specialized Finance
First Lien Term Loan, LIBOR+8.50% cash due 6/29/2023	9.50	%		26,360		25,837		25,931		(6)(15)
First Lien Revolver, LIBOR+8.50% cash due 6/29/2023	9.50	%		1,280		1,251		1,252		(6)(15)(19)
						27,088		27,183
Global Medical Response, Inc.			Health Care Services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/2025	5.25	%		8,630		8,399		8,674		(6)
						8,399		8,674
Gulf Operating, LLC			Oil & Gas Storage & Transportation
First Lien Revolver, LIBOR+4.00% cash due 12/27/2021				—		(704)		(75)		(6)(15)(19)
						(704)		(75)
Houghton Mifflin Harcourt Publishers Inc.			Education Services
First Lien Term Loan, LIBOR+6.25% cash due 11/22/2024	7.25	%		1,007		981		1,009		(6)(11)
						981		1,009
iCIMs, Inc.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 9/12/2024	7.50	%		25,635		25,024		25,525		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024	7.50	%		1,176		1,147		1,171		(6)(15)
						26,171		26,696
Immucor, Inc.			Health Care Supplies
First Lien Term Loan, LIBOR+5.75% cash due 7/2/2025	6.75	%		8,657		8,425		8,570		(6)(15)
Second Lien Term Loan, LIBOR+8.00% cash 3.50% PIK due 10/2/2025	9.00	%		21,834		21,225		21,616		(6)(15)
						29,650		30,186
Integral Development Corporation			Other Diversified Financial Services
1,078,284 Common Stock Warrants (exercise price $0.9274) expiration date 7/10/2024						113		—		(15)
						113		—
Inventus Power, Inc.			Electrical Components & Equipment
First Lien Term Loan, LIBOR+5.00% cash due 3/29/2024	6.00	%		18,849		18,693		18,708		(6)(15)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/2024	9.50	%		13,674		13,434		13,434		(6)(15)
						32,127		32,142

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
INW Manufacturing, LLC			Personal Products
First Lien Term Loan, LIBOR+5.75% cash due 5/7/2027	6.50	%		$	37,031	$	35,988	$	36,291	(6)(15)
						35,988		36,291
Itafos Inc.			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+8.25% cash due 8/25/2024	9.25	%		22,506		21,636		21,651		(6)(15)
						21,636		21,651
Ivanti Software, Inc.			Application Software
Second Lien Term Loan, LIBOR+8.50% cash due 12/1/2028	9.50	%		17,346		16,864		17,368		(6)(15)
						16,864		17,368
Jazz Acquisition, Inc.			Aerospace & Defense
First Lien Term Loan, LIBOR+7.50% cash due 1/29/2027	8.50	%		36,603		35,292		36,531		(6)(15)
						35,292		36,531
Latam Airlines Group S.A.			Airlines
First Lien Delayed Draw Term Loan, LIBOR+11.00% PIK due 3/29/2022				16,239		16,085		16,356		(6)(11)(15)(19)
						16,085		16,356
Lift Brands Holdings, Inc.			Leisure Facilities
2,000,000 Class A Common Units in Snap Investments, LLC						1,399		—		(15)
						1,399		—
Lightbox Intermediate, L.P.			Real Estate Services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/2026	5.13	%		41,432		40,445		41,225		(6)(15)
						40,445		41,225
LogMeIn, Inc.			Application Software
First Lien Term Loan, LIBOR+4.75% cash due 8/31/2027	4.83	%		3,970		3,720		3,973		(6)
						3,720		3,973
LTI Holdings, Inc.			Electronic Components
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/2026	6.83	%		10,140		10,080		10,127		(6)
						10,080		10,127
Marinus Pharmaceuticals, Inc.			Pharmaceuticals
First Lien Term Loan, 11.50% cash due 5/11/2026				3,441		3,377		3,389		(11)(15)
First Lien Delayed Draw Term Loan, 11.50% cash due 5/11/2026				6,881		6,755		6,778		(11)(15)(19)
						10,132		10,167
Mayfield Agency Borrower Inc.			Property & Casualty Insurance
First Lien Term Loan, LIBOR+4.50% cash due 2/28/2025	4.58	%		9,949		9,884		9,949		(6)
						9,884		9,949
MedAssets Software Intermediate Holdings, Inc.			Health Care Technology
Second Lien Term Loan, LIBOR+7.75% cash due 1/29/2029	8.50	%		14,137		13,877		13,960		(6)(15)
						13,877		13,960
MHE Intermediate Holdings, LLC			Diversified Support Services
First Lien Term Loan, LIBOR+5.75% cash due 7/21/2027	6.75	%		16,429		16,111		16,100		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.75% cash due 7/21/2027	6.75	%		106		84		83		(6)(15)(19)
First Lien Revolver, LIBOR+5.75% cash due 7/21/2027				—		(27)		(28)		(6)(15)(19)
						16,168		16,155
Mindbody, Inc.			Internet Services & Infrastructure
First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/2025	8.00	%		38,774		37,513		38,038		(6)(15)
First Lien Revolver, LIBOR+8.00% cash due 2/14/2025				—		(75)		(76)		(6)(15)(19)
						37,438		37,962

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Ministry Brands, LLC			Application Software
First Lien Revolver, LIBOR+5.00% cash due 12/2/2022				$	—	$	(9)	$	(9)	(6)(15)(19)
Second Lien Term Loan, LIBOR+9.25% cash due 6/2/2023	10.25	%		11,000		10,844		10,906		(6)(15)
						10,835		10,897
Mosaic Companies, LLC			Home Improvement Retail
First Lien Term Loan, LIBOR+6.75% cash due 7/2/2026	7.75	%		47,388		46,487		46,488		(6)(15)
						46,487		46,488
MRI Software LLC			Application Software
First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	6.50	%		27,352		26,815		27,335		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026				—		(25)		—		(6)(15)(19)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026				—		(13)		(1)		(6)(15)(19)
						26,777		27,334
Navisite, LLC			Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+8.50% cash due 12/30/2026	9.50	%		22,560		22,165		22,176		(6)(15)
						22,165		22,176
NeuAG, LLC			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024	7.00	%		47,031		45,279		45,996		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024				—		(202)		(120)		(6)(15)(19)
						45,077		45,876
NN, Inc.			Industrial Machinery
First Lien Term Loan, LIBOR+6.88% cash due 9/19/2026	7.88	%		59,309		57,971		58,419		(6)(11)(15)
						57,971		58,419
OEConnection LLC			Application Software
First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	4.08	%		3,355		3,152		3,351		(6)
						3,152		3,351
Olaplex, Inc.			Personal Products
First Lien Term Loan, LIBOR+6.25% cash due 1/8/2026	7.25	%		52,122		50,906		51,731		(6)(15)
First Lien Revolver, LIBOR+6.25% cash due 1/8/2025				—		(58)		(75)		(6)(15)(19)
						50,848		51,656
OmniSYS Acquisition Corporation			Diversified Support Services
100,000 Common Units in OSYS Holdings, LLC						1,000		729		(15)
						1,000		729
Onvoy, LLC			Integrated Telecommunication Services
First Lien Term Loan, LIBOR+4.50% cash due 2/10/2024	5.50	%		3,601		3,410		3,603		(6)
Second Lien Term Loan, LIBOR+10.50% cash due 2/10/2025	11.50	%		9,277		9,277		9,277		(6)(15)
19,666.67 Class A Units in GTCR Onvoy Holdings, LLC						1,967		2,372		(15)
13,664.73 Series 3 Class B Units in GTCR Onvoy Holdings, LLC						—		—		(15)
						14,654		15,252
OTG Management, LLC			Airport Services
First Lien Term Loan, LIBOR+10.00% cash due 9/1/2025	11.00	%		19,894		19,504		19,496		(6)(15)
First Lien Delayed Draw Term Loan, LIBOR+10.00% cash due 9/1/2025				—		(37)		(38)		(6)(15)(19)
						19,467		19,458
P & L Development, LLC			Pharmaceuticals
Fixed Rate Bond, 7.75% cash due 11/15/2025				7,776		7,832		8,089
						7,832		8,089
Park Place Technologies, LLC			Internet Services & Infrastructure
First Lien Term Loan, LIBOR+5.00% cash due 11/10/2027	6.00	%		9,950		9,479		9,961		(6)
						9,479		9,961

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Performance Health Holdings, Inc.			Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 7/12/2027	7.00	%		$	20,085	$	19,698	$	19,683	(6)(15)
						19,698		19,683
Pingora MSR Opportunity Fund I-A, LP			Thrifts & Mortgage Finance
1.86% limited partnership interest						752		112		(11)(16)(19)
						752		112
Planview Parent, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.00	%		28,627		28,198		28,699		(6)(15)
						28,198		28,699
PLNTF Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+8.00% cash due 3/22/2026	9.00	%		13,729		13,482		13,798		(6)(15)
						13,482		13,798
Pluralsight, LLC			Application Software
First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00	%		48,689		47,788		47,763		(6)(15)
First Lien Revolver, LIBOR+8.00% cash due 4/6/2027				—		(65)		(67)		(6)(15)(19)
						47,723		47,696
PRGX Global, Inc.			Data Processing & Outsourced Services
First Lien Term Loan, LIBOR+6.75% cash due 3/3/2026	7.75	%		34,118		33,016		33,547		(6)(15)
First Lien Revolver, LIBOR+6.75% cash due 3/3/2026				—		(44)		(42)		(6)(15)(19)
80,515 Class B Common Units						79		81		(15)
						33,051		33,586
ProFrac Services, LLC			Industrial Machinery
First Lien Term Loan, LIBOR+8.50% cash due 9/15/2023	9.75	%		30,910		29,146		30,600		(6)(15)
						29,146		30,600
Project Boost Purchaser, LLC			Application Software
Second Lien Term Loan, LIBOR+8.00% cash due 5/31/2027	8.08	%		5,250		5,151		5,224		(6)(15)
						5,151		5,224
Quantum Bidco Limited			Food Distributors
First Lien Term Loan, UK LIBOR+6.00% cash due 1/29/2028	6.11	%		£	3,501	4,625		4,673		(6)(11)
						4,625		4,673
QuorumLabs, Inc.			Application Software
64,887,669 Junior-2 Preferred Stock						375		—		(15)
						375		—
Relativity ODA LLC			Application Software
First Lien Term Loan, LIBOR+7.50% PIK due 5/12/2027				$	22,856	22,337		22,376		(6)(15)
First Lien Revolver, LIBOR+6.50% cash due 5/12/2027				—		(52)		(47)		(6)(15)(19)
						22,285		22,329
Renaissance Holding Corp.			Diversified Banks
Second Lien Term Loan, LIBOR+7.00% cash due 5/29/2026	7.08	%		3,542		3,515		3,562		(6)
						3,515		3,562
RevSpring, Inc.			Commercial Printing
First Lien Term Loan, LIBOR+4.25% cash due 10/11/2025	4.38	%		9,725		9,185		9,709		(6)
						9,185		9,709
RumbleOn, Inc.			Automotive Retail
First Lien Term Loan, LIBOR+8.25% cash due 8/31/2026	9.25	%		38,036		35,651		35,640		(6)(11)(15)
First Lien Delayed Draw Term Loan, LIBOR+8.25% cash due 8/31/2026				—		(1,022)		(1,027)		(6)(11)(15)(19)
164,660 Class B Common Stock Warrants (exercise price $33.00) expiration date 2/28/2023						1,202		1,553		(15)
						35,831		36,166

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Sabert Corporation			Metal & Glass Containers
First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	5.50	%		$	1,818	$	1,711	$	1,825	(6)
						1,711		1,825
Scilex Pharmaceuticals Inc.			Pharmaceuticals
Fixed Rate Zero Coupon Bond due 8/15/2026				7,692		6,512		7,169		(15)
						6,512		7,169
ShareThis, Inc.			Application Software
345,452 Series C Preferred Stock Warrants (exercise price $3.0395) expiration date 3/4/2024						367		—		(15)
						367		—
SIO2 Medical Products, Inc.			Metal & Glass Containers
Subordinated Debt, 11.25% cash due 2/28/2022				15,896		15,161		15,022		(15)
Subordinated Delayed Draw Debt, 11.25% cash due 2/28/2022				—		(110)		(119)		(15)(19)
Common Stock Warrants (exercise price $0.75) expiration date 7/31/2028						681		685		(15)
						15,732		15,588
Sirva Worldwide, Inc.			Diversified Support Services
First Lien Term Loan, LIBOR+5.50% cash due 8/4/2025	5.58	%		1,739		1,554		1,644		(6)
						1,554		1,644
SM Wellness Holdings, Inc.			Health Care Services
Second Lien Term Loan, LIBOR+8.00% cash due 4/16/2029	8.75	%		9,109		8,972		9,177		(6)(15)
						8,972		9,177
SonicWall US Holdings Inc.			Technology Distributors
Second Lien Term Loan, LIBOR+7.50% cash due 5/18/2026	7.63	%		3,195		3,163		3,178		(6)
						3,163		3,178
Sorrento Therapeutics, Inc.			Biotechnology
50,000 Common Stock Units						197		382		(11)
						197		382
Star US Bidco LLC			Industrial Machinery
First Lien Term Loan, LIBOR+4.25% cash due 3/17/2027	5.25	%		1,194		1,114		1,199		(6)
						1,114		1,199
SumUp Holdings Luxembourg S.À.R.L.			Other Diversified Financial Services
First Lien Delayed Draw Term Loan, EURIBOR+8.50% cash due 3/10/2026	10.00	%		€	13,980	15,991		15,908		(6)(11)(15)(19)
						15,991		15,908
Sunland Asphalt & Construction, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.00% cash due 1/13/2026	7.00	%		$	43,052	41,782		42,450		(6)(15)
First Lien Revolver, LIBOR+6.00% cash due 1/13/2022	7.00	%		203		150		169		(6)(15)(19)
						41,932		42,619
Supermoose Borrower, LLC			Application Software
First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	3.88	%		8,576		7,581		7,996		(6)
						7,581		7,996
SVP-Singer Holdings Inc.			Home Furnishings
First Lien Term Loan, LIBOR+6.75% cash due 7/28/2028	7.50	%		20,976		19,537		19,735		(6)(15)
						19,537		19,735
Swordfish Merger Sub LLC			Auto Parts & Equipment
Second Lien Term Loan, LIBOR+6.75% cash due 2/2/2026	7.75	%		12,500		12,466		12,365		(6)(15)
						12,466		12,365
Tacala, LLC			Restaurants
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/2028	8.25	%		9,448		9,317		9,451		(6)
						9,317		9,451

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes
Tecta America Corp.			Construction & Engineering
Second Lien Term Loan, LIBOR+8.50% cash due 4/9/2029	9.25	%		$	5,203	$	5,125	$	5,203	(6)(15)
						5,125		5,203
Telestream Holdings Corporation			Application Software
First Lien Term Loan, LIBOR+8.75% cash due 10/15/2025	9.75	%		18,510		18,017		18,250		(6)(15)
First Lien Revolver, LIBOR+8.75% cash due 10/15/2025	9.75	%		492		464		468		(6)(15)(19)
						18,481		18,718
TerSera Therapeutics LLC			Pharmaceuticals
Second Lien Term Loan, LIBOR+9.50% cash due 3/30/2026	10.50	%		29,663		29,359		29,371		(6)(15)
668,879 Common Units of TerSera Holdings LLC						2,192		3,487		(15)
						31,551		32,858
TGNR HoldCo LLC			Integrated Oil & Gas
Subordinated Debt, 11.50% cash due 5/14/2026				4,984		4,842		4,884		(11)(15)(20)
						4,842		4,884
Thermacell Repellents, Inc.			Leisure Products
First Lien Term Loan, LIBOR+5.75% cash due 12/4/2026	6.75	%		6,636		6,603		6,603		(6)(15)
First Lien Revolver, LIBOR+5.75% cash due 12/4/2026				—		(4)		(4)		(6)(15)(19)
						6,599		6,599
Thrasio, LLC			Internet & Direct Marketing Retail
First Lien Term Loan, LIBOR+7.00% cash due 12/18/2026	8.00	%		37,876		36,736		37,686		(6)(15)
8,434 Shares of Series C-3 Preferred Stock in Thrasio Holdings, Inc.						101		171		(15)
284,650.32 Shares of Series C-2 Preferred Stock in Thrasio Holdings, Inc.						2,410		5,764		(15)
23,201 Shares of Series X Preferred Stock in Thrasio Holdings, Inc.						22,986		24,803		(15)(19)
						62,233		68,424
TIBCO Software Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 3/3/2028	7.34	%		16,788		16,681		17,002		(6)
						16,681		17,002
TigerConnect, Inc.			Application Software
299,110 Series B Preferred Stock Warrants (exercise price $1.3373) expiration date 12/8/2024						60		525		(15)
						60		525
Transact Holdings Inc.			Application Software
First Lien Term Loan, LIBOR+4.75% cash due 4/30/2026	4.83	%		6,860		6,757		6,809		(6)(15)
						6,757		6,809
Velocity Commercial Capital, LLC			Thrifts & Mortgage Finance
First Lien Term Loan, LIBOR+8.00% cash due 2/5/2026	9.00	%		15,909		15,327		15,830		(6)(15)
						15,327		15,830
Veritas US Inc.			Application Software
First Lien Term Loan, LIBOR+5.00% cash due 9/1/2025	6.00	%		5,940		5,599		5,975		(6)
						5,599		5,975
Vitalyst Holdings, Inc.			IT Consulting & Other Services
675 Series A Preferred Stock Units						675		440		(15)
7,500 Class A Common Stock Units						75		—		(15)
						750		440
Win Brands Group LLC			Housewares & Specialties
First Lien Term Loan, LIBOR+9.00% cash 5.00% PIK due 1/22/2026	10.00	%		1,894		1,875		1,884		(6)(15)
181 Class F Warrants in Brand Value Growth LLC (exercise price $0.01) expiration date 1/25/2027						—		119		(15)
						1,875		2,003

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)


Portfolio Company/Type of Investment (1)(2)(3)(4)(5)	Cash Interest Rate (6)		Industry	Principal (7)		Cost		Fair Value		Notes

Windstream Services II, LLC			Integrated Telecommunication Services
First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.25	%		$	31,598	$	30,347	$	31,793	(6)
18,032 Shares of Common Stock in Windstream Holdings II, LLC						216		363		(15)
109,420 Warrants in Windstream Holdings II, LLC						1,842		2,199		(15)
						32,405		34,355
WP CPP Holdings, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+3.75% cash due 4/30/2025	4.75	%		4,369		4,005		4,264		(6)
Second Lien Term Loan, LIBOR+7.75% cash due 4/30/2026	8.75	%		16,000		15,758		15,815		(6)(15)
						19,763		20,079
WPEngine, Inc.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 3/27/2026	7.50	%		40,536		39,778		40,013		(6)(15)
						39,778		40,013
WWEX Uni Topco Holdings, LLC			Air Freight & Logistics
Second Lien Term Loan, LIBOR+7.00% cash due 7/26/2029	7.75	%		5,000		4,925		4,981		(6)
						4,925		4,981
Zep Inc.			Specialty Chemicals
First Lien Term Loan, LIBOR+4.00% cash due 8/12/2024	5.00	%		6,495		6,165		6,353		(6)
Second Lien Term Loan, LIBOR+8.25% cash due 8/11/2025	9.25	%		22,748		22,692		21,993		(6)(15)
						28,857		28,346
Zephyr Bidco Limited			Specialized Finance
Second Lien Term Loan, UK LIBOR+7.50% cash due 7/23/2026	7.55	%		£	18,000	23,783		24,210		(6)(11)
						23,783		24,210
Total Non-Control/Non-Affiliate Investments (172.7% of net assets)						$	2,236,759	$	2,267,575
Total Portfolio Investments (194.7% of net assets)						$	2,539,121	$	2,556,629
Cash and Cash Equivalents and Restricted Cash
JP Morgan Prime Money Market Fund, Institutional Shares						$	23,600	$	23,600
Other cash accounts						8,035		8,035
Total Cash and Cash Equivalents and Restricted Cash (2.4% of net assets)						$	31,635	$	31,635
Total Portfolio Investments and Cash and Cash Equivalents and Restricted Cash (197.2% of net assets)						$	2,570,756	$	2,588,264


Derivative Instrument	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Counterparty	Cumulative Unrealized Appreciation /(Depreciation)
Foreign currency forward contract	$	52,186	£	37,709	11/12/2021	JPMorgan Chase Bank, N.A.	$	1,339
Foreign currency forward contract	$	46,663	€	39,736	11/12/2021	JPMorgan Chase Bank, N.A.	573
							$	1,912

Derivative Instrument

Company Receives

Company Pays

Counterparty

Maturity Date

Notional Amount

Fair Value

Interest rate swap

Fixed 2.7%

Floating 3-month LIBOR +1.658%

Royal Bank of Canada

1/15/2027

$350,000

$(2,108)

Oaktree Specialty Lending Corporation

Consolidated Schedule of Investments

September 30, 2021

(dollar amounts in thousands)

(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.

(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.

(3)Equity ownership may be held in shares or units of companies related to the portfolio companies.

(6)The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2021, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 0.08%, the 60-day LIBOR at 0.11%, the 90-day LIBOR at 0.13%, the 180-day LIBOR at 0.16%, the 360-day LIBOR at 0.24%, the PRIME at 3.25%, the 30-day UK LIBOR at 0.05%, the 180-day UK LIBOR at 0.09%, the 30-day EURIBOR at (0.57)%, the 90-day EURIBOR at (0.56)% and the 180-day EURIBOR at (0.53)%. Most loans include an interest floor, which generally ranges from 0% to 1%.

(7)Principal includes accumulated PIK interest and is net of repayments, if any. “£” signifies the investment is denominated in British Pounds. "€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.

(8)Control Investments generally are defined by the Investment Company Act, as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.

(9)As defined in the Investment Company Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" these portfolio companies as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the Company's annual report on Form 10-K for the year ended September 30, 2021 for transactions during the year ended September 30, 2021 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.

(10)First Star Speir Aviation 1 Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under accounting principles generally accepted in the United States ("GAAP") and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.

(11)Investment is not a "qualifying asset" as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2021, qualifying assets represented 75.7% of the Company's total assets and non-qualifying assets represented 24.3% of the Company's total assets.

(12)Income producing through payment of dividends or distributions.

(13)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment subsequent to a restructure that occurred during the year ended September 30, 2021. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of September 30, 2021, the accumulated PIK interest balance for the A notes and the B notes was $0.9 million and $0.8 million, respectively.

(14)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition.

(15)As of September 30, 2021, these investments were categorized as Level 3 within the fair value hierarchy established by FASB guidance under ASC 820.

(16)This investment was valued using net asset value as a practical expedient for fair value. Consistent with ASC 820, these investments are excluded from the hierarchical levels.

(17)Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.

(18)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments.

(20)This investment represents a participation interest in the underlying securities shown.

See notes to Consolidated Financial Statements.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Note 1. Organization

Oaktree Specialty Lending Corporation (together with its consolidated subsidiaries, the "Company") is a specialty finance company that looks to provide customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company was formed in late 2007 and operates as a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a Business Development Company under the Investment Company Act. The Company has qualified and elected to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended (the "Code"), for U.S. federal income tax purposes.

The Company's investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and certain equity co-investments. The Company may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions.

The Company is externally managed by Oaktree Fund Advisors, LLC ("Oaktree"), a subsidiary of Oaktree Capital Group, LLC (“OCG”), pursuant to an investment advisory agreement between the Company and Oaktree (as amended and restated, the "Investment Advisory Agreement"). Oaktree is an affiliate of Oaktree Capital Management, L.P. ("OCM"), the Company's external investment adviser from October 17, 2017 through May 3, 2020 and also a subsidiary of OCG. Oaktree Fund Administration, LLC ("Oaktree Administrator"), a subsidiary of OCM, provides certain administrative and other services necessary for the Company to operate pursuant to an administration agreement between the Company and Oaktree Administrator (the "Administration Agreement"). See Note 10. In 2019, Brookfield Asset Management Inc. ("Brookfield") acquired a majority economic interest in OCG. OCG operates as an independent business within Brookfield, with its own product offerings and investment, marketing and support teams.

On March 19, 2021, the Company acquired Oaktree Strategic Income Corporation (“OCSI”), pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of October 28, 2020, by and among OCSI, the Company, Lion Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), and, solely for the limited purposes set forth therein, Oaktree. Pursuant to the Merger Agreement, Merger Sub was first merged with and into OCSI, with OCSI as the surviving corporation (the “Merger”), and, immediately following the Merger, OCSI was then merged with and into the Company, with the Company as the surviving company (together with the Merger, the “Mergers”). In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of OCSI’s common stock was converted into the right to receive 1.3371 shares of the Company’s common stock (with OCSI’s stockholders receiving cash in lieu of fractional shares of the Company’s common stock). As a result of the Mergers, the Company issued an aggregate of 39,400,011 shares of its common stock to former OCSI stockholders.

Note 2. Significant Accounting Policies

Basis of Presentation:

The Consolidated Financial Statements of the Company have been prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the Consolidated Financial Statements have been made. All intercompany balances and transactions have been eliminated. The Company is an investment company following the accounting and reporting guidance in ASC Topic 946, Financial Services - Investment Companies ("ASC 946").

Use of Estimates:

The preparation of the financial statements in conformity with GAAP requires management to make certain estimates and assumptions affecting amounts reported in the financial statements and accompanying notes. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Changes in the economic and political environments, financial markets and any other parameters used in determining these estimates could cause actual results to differ and such differences could be material. Significant estimates include the valuation of investments and revenue recognition.

Consolidation:

The accompanying Consolidated Financial Statements include the accounts of Oaktree Specialty Lending Corporation and its consolidated subsidiaries. Each consolidated subsidiary is wholly-owned and, as such, consolidated into the Consolidated Financial Statements. Certain subsidiaries that hold investments are treated as pass through entities for U.S. federal income tax purposes. The assets of certain of the consolidated subsidiaries are not directly available to satisfy the claims of the creditors of Oaktree Specialty Lending Corporation or any of its other subsidiaries.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

As an investment company, portfolio investments held by the Company are not consolidated into the Consolidated Financial Statements but rather are included on the Statements of Assets and Liabilities as investments at fair value.

Fair Value Measurements:

The Company values its investments in accordance with ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.

Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

•Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.

•Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.

•Level 3 — Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

If inputs used to measure fair value fall into different levels of the fair value hierarchy, an investment's level is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments may be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.

Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, Oaktree obtains and analyzes readily available market quotations provided by pricing vendors and brokers for all of the Company's investments for which quotations are available. In determining the fair value of a particular investment, pricing vendors and brokers use observable market information, including both binding and non-binding indicative quotations.

The Company seeks to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If the Company is unable to obtain two quotes from pricing vendors, or if the prices obtained from pricing vendors are not within the Company's set threshold, the Company seeks to obtain a quote directly from a broker making a market for the asset. Oaktree evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Oaktree also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, Oaktree performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process. Generally, the Company does not adjust any of the prices received from these sources.

If the quotations obtained from pricing vendors or brokers are determined to not be reliable or are not readily available, the Company values such investments using any of three different valuation techniques. The first valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value ("EV") of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, (ii) whether there is credit impairment for debt investments and (iii) the value for debt investments that the Company is deemed to control under the Investment Company Act. To estimate the EV of a portfolio company, Oaktree analyzes various factors, including the portfolio company’s historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company’s industry. Oaktree also utilizes some or all of the following information based on the individual circumstances of the portfolio company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase prices as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

forecasts and its business prospects, (v) a discounted cash flow analysis, (vi) estimated liquidation or collateral value of the portfolio company's assets and (vii) offers from third parties to buy the portfolio company. The Company may probability weight potential sale outcomes with respect to a portfolio company when uncertainty exists as of the valuation date. The third valuation technique is a market yield technique, which is typically performed for non-credit impaired debt investments. In the market yield technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk, and the Company considers the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the Company depends on primary market data, including newly funded transactions and industry specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.

In accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. Consistent with FASB guidance under ASC 820, these investments are excluded from the hierarchical levels. These investments are generally not redeemable.

The Company estimates the fair value of certain privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.

The Company's Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of the Company's investments:

•The quarterly valuation process begins with each portfolio company or investment being initially valued by Oaktree's valuation team in conjunction with Oaktree's portfolio management team and investment professionals responsible for each portfolio investment;

•Preliminary valuations are then reviewed and discussed with management of Oaktree;

•Separately, independent valuation firms engaged by the Board of Directors prepare valuations of the Company's investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to the Company and provide such reports to Oaktree and the Audit Committee of the Board of Directors;

•Oaktree compares and contrasts its preliminary valuations to the valuations of the independent valuation firms and prepares a valuation report for the Audit Committee;

•The Audit Committee reviews the preliminary valuations with Oaktree, and Oaktree responds and supplements the preliminary valuations to reflect any discussions between Oaktree and the Audit Committee;

•The Audit Committee makes a recommendation to the full Board of Directors regarding the fair value of the investments in the Company's portfolio; and

•The Board of Directors discusses valuations and determines the fair value of each investment in the Company's portfolio.

The fair value of the Company's investments as of March 31, 2022 and September 30, 2021 was determined in good faith by the Board of Directors. The Board of Directors has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of the Company's portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Board of Directors may reasonably rely on that assistance. However, the Board of Directors is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company's valuation policy and a consistently applied valuation process.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

With the exception of the line items entitled "deferred financing costs," "deferred offering costs," "other assets," "deferred tax asset, net," "credit facilities payable" and "unsecured notes payable," which are reported at amortized cost, all assets and liabilities approximate fair value on the Consolidated Statements of Assets and Liabilities. The carrying value of the line items titled "interest, dividends and fees receivable," "due from portfolio companies," "receivables from unsettled transactions," "due

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

from broker," "accounts payable, accrued expenses and other liabilities," "base management fee and incentive fee payable," "due to affiliate," "interest payable," "director fees payable" and "payables from unsettled transactions" approximate fair value due to their short maturities.

Foreign Currency Translation:

The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the prevailing foreign exchange rate on the reporting date. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.

Derivative Instruments:

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to reduce the Company's exposure to fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another at a pre-determined price at a future date. Foreign currency forward contracts are marked-to-market at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded within derivative assets or derivative liabilities on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date. The Company does not utilize hedge accounting with respect to foreign currency forward contracts and as such, the Company recognizes its foreign currency forward contracts at fair value with changes included in the net unrealized appreciation (depreciation) on the Consolidated Statements of Operations.

Interest Rate Swaps

The Company uses an interest rate swap to hedge some of the Company's fixed rate debt. The Company designated the interest rate swap as the hedging instrument in an effective hedge accounting relationship, and therefore the periodic payments are recognized as components of interest expense in the Consolidated Statements of Operations. Depending on the nature of the balance at period end, the fair value of the interest rate swap is either included as a derivative asset or derivative liability on the Company's Consolidated Statements of Assets and Liabilities. The change in fair value of the interest rate swap is offset by a change in the carrying value of the fixed rate debt. Any amounts paid to the counterparty to cover collateral obligations under the terms of the interest rate swap agreement are included in due from broker on the Company's Consolidated Statements of Assets and Liabilities.

Investment Income:

Interest Income

Interest income, adjusted for accretion of original issue discount ("OID"), is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations. As of each of March 31, 2022 and September 30, 2021, there were no investments on non-accrual status.

In connection with its investment in a portfolio company, the Company sometimes receives nominal cost equity that is valued as part of the negotiation process with the portfolio company. When the Company receives nominal cost equity, the Company allocates its cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

PIK Interest Income

The Company's investments in debt securities may contain PIK interest provisions. PIK interest, which generally represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. The Company generally ceases accruing PIK interest if there is insufficient value to support the accrual or if the Company does not expect the portfolio company to be able to pay all principal and interest due. The Company's decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; the Company's assessment of the portfolio company's business development success; information obtained by the Company in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. The Company's determination to cease accruing PIK interest is generally made well before the Company's full write-down of a loan or debt security. In addition, if it is subsequently determined that the Company will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on the Company’s debt investments increases the recorded cost bases of these investments in the Consolidated Financial Statements including for purposes of computing the capital gains incentive fee payable by the Company to Oaktree. To maintain its status as a RIC, certain income from PIK interest may be required to be distributed to the Company’s stockholders, even though the Company has not yet collected the cash and may never do so.

Fee Income

Oaktree or its affiliates may provide financial advisory services to portfolio companies and, in return, the Company may receive fees for capital structuring services. These fees are generally non-recurring and are recognized by the Company upon the investment closing date. The Company may also receive additional fees in the ordinary course of business, including servicing, amendment and prepayment fees, which are classified as fee income and recognized as they are earned or the services are rendered.

The Company has also structured exit fees across certain of its portfolio investments to be received upon the future exit of those investments. These fees are typically paid to the Company upon the earliest to occur of (i) a sale of the borrower or substantially all of the assets of the borrower, (ii) the maturity date of the loan or (iii) the date when full prepayment of the loan occurs. The receipt of such fees is contingent upon the occurrence of one of the events listed above for each of the investments. These fees are included in net investment income over the life of the loan.

Dividend Income

The Company generally recognizes dividend income on the ex-dividend date for public securities and the record date for private equity investments. Distributions received from private equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from private equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

Cash and Cash Equivalents and Restricted Cash:

Cash and cash equivalents consist of demand deposits and highly liquid investments with maturities of three months or less when acquired. The Company places its cash and cash equivalents and restricted cash with financial institutions and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limit. Cash and cash equivalents are included on the Company's Consolidated Schedule of Investments and cash equivalents are classified as Level 1 assets.

As of March 31, 2022 and September 30, 2021, included in restricted cash was $2.4 million and $2.3 million, respectively, that was held at Wells Fargo Bank, N.A. in connection with the Citibank Facility (as defined in Note 6. Borrowings). Pursuant to the terms of the Citibank Facility, the Company was restricted in terms of access to $2.4 million and $2.3 million as of March 31, 2022 and September 30, 2021, respectively, until the occurrence of the periodic distribution dates and, in connection therewith, the Company’s submission of its required periodic reporting schedules and verifications of the Company’s compliance with the terms of the Citibank Facility.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Due from Portfolio Companies:

Due from portfolio companies consists of amounts payable to the Company from its portfolio companies, including proceeds from the sale of portfolio companies not yet received or being held in escrow and excluding those amounts attributable to interest, dividends or fees receivable. These amounts are recognized as they become payable to the Company (e.g., principal payments on the scheduled amortization payment date).

Receivables/Payables from Unsettled Transactions:

Receivables/payables from unsettled transactions consist of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date.

Deferred Financing Costs:

Deferred financing costs consist of fees and expenses paid in connection with the closing or amending of credit facilities and debt offerings. Deferred financing costs in connection with credit facilities are capitalized as an asset when incurred. Deferred financing costs in connection with all other debt arrangements are a direct deduction from the related debt liability when incurred. Deferred financing costs are amortized using the effective interest method over the term of the respective debt arrangement. This amortization expense is included in interest expense in the Company's Consolidated Statements of Operations. Upon early termination or modification of a credit facility, all or a portion of unamortized fees related to such facility may be accelerated into interest expense. For extinguishments of the Company’s unsecured notes payable, any unamortized deferred financing costs are deducted from the carrying amount of the debt in determining the gain or loss from the extinguishment.

Deferred Offering Costs:

Legal fees and other costs incurred in connection with the Company’s shelf registration statement are capitalized as deferred offering costs in the Consolidated Statements of Assets and Liabilities. To the extent any such costs relate to equity offerings, these costs are charged as a reduction of capital upon utilization. To the extent any such costs relate to debt offerings, these costs are treated as deferred financing costs and are amortized over the term of the respective debt arrangement. Any deferred offering costs that remain at the expiration of the shelf registration statement or when it becomes probable that an offering will not be completed are expensed.

Income Taxes:

The Company has elected to be subject to tax as a RIC under Subchapter M of the Code and operates in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each taxable year. As a RIC, the Company is not subject to U.S. federal income tax on the portion of its taxable income and gains distributed currently to stockholders as a dividend. Depending on the level of taxable income earned during a taxable year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next taxable year. The Company would then incur a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. The Company anticipates timely distribution of its taxable income within the tax rules under Subchapter M of the Code. The Company did not incur a U.S. federal excise tax for calendar years 2020 and 2021 and does not expect to incur a U.S. federal excise tax for calendar year 2022.

The Company holds certain portfolio investments through taxable subsidiaries. The purpose of the Company's taxable subsidiaries is to permit the Company to hold equity investments in portfolio companies which are "pass through" entities for U.S. federal income tax purposes in order to comply with the RIC tax requirements. The taxable subsidiaries are consolidated for financial reporting purposes, and portfolio investments held by them are included in the Company’s Consolidated Financial Statements as portfolio investments and recorded at fair value. The taxable subsidiaries are not consolidated with the Company for U.S. federal income tax purposes and may generate income tax expense, or benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. This income tax expense, if any, would be reflected in the Company's Consolidated Statements of Operations. The Company uses the liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net operating loss carry forwards that it may use to

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.

FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes ("ASC 740"), provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the Company's Consolidated Financial Statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management's determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including an ongoing analysis of tax laws, regulations and interpretations thereof. The Company recognizes the tax benefits of uncertain tax positions only where the position is "more-likely-than-not" to be sustained assuming examination by tax authorities. Management has analyzed the Company's tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2019, 2020 and 2021. The Company identifies its major tax jurisdictions as U.S. Federal and California, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The guidance is effective from March 12, 2020 through December 31, 2022. As of March 31, 2022, the adoption of this guidance did not have an impact on the Company's Consolidated Financial Statements.

Note 3. Portfolio Investments

As of March 31, 2022, 198.8% of net assets at fair value, or $2.6 billion, was invested in 146 portfolio companies, including (i) $133.0 million in subordinated notes and limited liability company ("LLC") equity interests of Senior Loan Fund JV I, LLC ("SLF JV I"), a joint venture through which the Company and Trinity Universal Insurance Company, a subsidiary of Kemper Corporation ("Kemper"), co-invest in senior secured loans of middle-market companies and other corporate debt securities and (ii) $55.6 million in subordinated notes and LLC equity interests of OCSI Glick JV LLC ("Glick JV" and, together with SLF JV I, the "JVs"), a joint venture through which the Company and GF Equity Funding 2014 LLC ("GF Equity Funding") co-invest primarily in senior secured loans of middle-market companies. As of March 31, 2022, 3.1% of net assets at fair value, or $41.8 million, was invested in cash and cash equivalents (including $2.4 million of restricted cash). In comparison, as of September 30, 2021, 194.7% of net assets at fair value, or $2.6 billion, was invested in 138 portfolio investments, including (i) $133.9 million in subordinated notes and LLC equity interests of SLF JV I and (ii) $55.6 million in subordinated notes and LLC equity interests of Glick JV. As of September 30, 2021, 2.4% of net assets at fair value, or $31.6 million, was invested in cash and cash equivalents (including $2.3 million of restricted cash). As of March 31, 2022, 86.4% of the Company's portfolio at fair value consisted of senior secured debt investments and 7.8% consisted of subordinated debt investments, including the debt investments in the JVs. As of September 30, 2021, 86.7% of the Company's portfolio at fair value consisted of senior secured debt investments and 7.6% consisted of subordinated debt investments, including the debt investments in the JVs.

The Company also held equity investments in certain of its portfolio companies consisting of common stock, preferred stock, warrants, limited partnership interests or LLC equity interests. These instruments generally do not produce a current return but are held for potential investment appreciation and capital gain.

During the three and six months ended March 31, 2022, the Company recorded net realized gains of $1.4 million and $10.7 million, respectively. During the three and six months ended March 31, 2021, the Company recorded net realized gains of $5.9 million and $14.1 million, respectively. During the three and six month ended March 31, 2022, the Company recorded net unrealized depreciation of $27.0 million and $31.6 million, respectively. During the three and six months ended March 31, 2021, the Company recorded net unrealized appreciation of $65.1 million and $112.7 million, respectively.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The composition of the Company's investments as of March 31, 2022 and September 30, 2021 at cost and fair value was as follows:


	March 31, 2022				September 30, 2021
	Cost		Fair Value		Cost		Fair Value
Investments in debt securities	$	2,333,075	$	2,338,069	$	2,222,223	$	2,259,924
Investments in equity securities	130,508		118,077		120,621		107,222
Debt investments in the JVs	146,843		151,899		146,955		151,832
Equity investments in the JVs	49,322		36,730		49,322		37,651
Total	$	2,659,748	$	2,644,775	$	2,539,121	$	2,556,629

The following table presents the composition of the Company's debt investments as of March 31, 2022 and September 30, 2021 at fixed rates and floating rates:


	March 31, 2022				September 30, 2021
	Fair Value		% of Debt Portfolio		Fair Value		% of Debt Portfolio
Floating rate debt securities, including the debt investments in the JVs	$	2,216,924	89.03	%	$	2,205,648	91.45	%
Fixed rate debt securities	273,044		10.97		206,108		8.55
Total	$	2,489,968	100.00	%	$	2,411,756	100.00	%

The following table presents the financial instruments carried at fair value as of March 31, 2022 on the Company's Consolidated Statement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:


	Level 1		Level 2		Level 3		Measured at Net Asset Value (a)		Total
Investments in debt securities (senior secured)	$	—	$	328,082	$	1,955,858	$	—	$	2,283,940
Investments in debt securities (subordinated, including the debt investments in the JVs)	—		45,301		160,727		—		206,028
Investments in equity securities (preferred)	—		—		84,372		—		84,372
Investments in equity securities (common and warrants, including LLC equity interests of the JVs)	117		—		33,588		36,730		70,435
Total investments at fair value	117		373,383		2,234,545		36,730		2,644,775
Cash equivalents	6,228		—		—		—		6,228
Derivative asset	—		2,764		—		—		2,764
Total assets at fair value	$	6,345	$	376,147	$	2,234,545	$	36,730	$	2,653,767
Derivative liability	$	—	$	23,272	$	—	$	—	$	23,272
Total liabilities at fair value	$	—	$	23,272	$	—	$	—	$	23,272

__________

(a)In accordance with ASC 820-10, certain investments that are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value have not been classified in the fair value hierarchy. These investments are generally not redeemable. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Assets and Liabilities.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following table presents the financial instruments carried at fair value as of September 30, 2021 on the Company's Consolidated Statement of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:


	Level 1		Level 2		Level 3		Measured at Net Asset Value (a)		Total
Investments in debt securities (senior secured)	$	—	$	338,707	$	1,878,536	$	—	$	2,217,243
Investments in debt securities (subordinated, including the debt investments in the JVs)	—		18,196		176,317		—		194,513
Investments in equity securities (preferred)	—		—		63,565		—		63,565
Investments in equity securities (common and warrants, including LLC equity interests of the JVs)	382		—		43,163		37,763		81,308
Total investments at fair value	382		356,903		2,161,581		37,763		2,556,629
Cash equivalents	23,600		—		—		—		23,600
Derivative asset	—		1,912		—		—		1,912
Total assets at fair value	$	23,982	$	358,815	$	2,161,581	$	37,763	$	2,582,141
Derivative liability	$	—	$	2,108	$	—	$	—	$	2,108
Total liabilities at fair value	$	—	$	2,108	$	—	$	—	$	2,108

__________

When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the fact that the unobservable factors are significant to the overall fair value measurement. However, Level 3 financial instruments typically have both unobservable or Level 3 components and observable components (i.e. components that are actively quoted and can be validated by external sources). Accordingly, the appreciation (depreciation) in the tables below includes changes in fair value due in part to observable factors that are part of the valuation methodology. Transfers between levels are recognized at the beginning of the reporting period.

The following table provides a roll-forward in the changes in fair value from December 31, 2021 to March 31, 2022 for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Investments
	Senior Secured Debt		Subordinated Debt (including debt investments in the JVs)		Preferred Equity		Common Equity and Warrants		Total
Fair value as of December 31, 2021	$	1,934,096	$	161,369	$	65,550	$	41,942	$	2,202,957
Purchases	186,142		159		18,264		614		205,179
Sales and repayments	(168,283)		(950)		(163)		(2,443)		(171,839)
Transfers in (a)	4,680		—		—		—		4,680
Capitalized PIK interest income	4,944		—		—		—		4,944
Accretion of OID	8,533		379		—		—		8,912
Net unrealized appreciation (depreciation)	(14,077)		(230)		1,233		(8,283)		(21,357)
Net realized gains (losses)	(177)		—		(512)		1,758		1,069
Fair value as of March 31, 2022	$	1,955,858	$	160,727	$	84,372	$	33,588	$	2,234,545
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of March 31, 2022 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended March 31, 2022	$	(10,232)	$	(229)	$	999	$	(7,897)	$	(17,359)

__________

(a) There was a transfer into Level 3 from Level 2 for an investment during the three months ended March 31, 2022 as a result of a change in the number of market quotes available and/or a change in market liquidity.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following table provides a roll-forward in the changes in fair value from December 31, 2020 to March 31, 2021 for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Investments
	Senior Secured Debt		Subordinated Debt (including debt investments in the JVs)		Preferred Equity		Common Equity and Warrants		Total
Fair value as of December 31, 2020	$	1,078,416	$	114,172	$	29,731	$	35,472	$	1,257,791
Purchases (a)	560,749		46,286		19,958		2,377		629,370
Sales and repayments	(85,977)		(6,309)		—		(1,053)		(93,339)
Capitalized PIK interest income	3,875		—		—		—		3,875
Accretion of OID	3,044		39		—		—		3,083
Net unrealized appreciation (depreciation)	30,133		2,660		2,107		12,935		47,835
Net realized gains (losses)	50		1,106		—		608		1,764
Fair value as of March 31, 2021	$	1,590,290	$	157,954	$	51,796	$	50,339	$	1,850,379
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of March 31, 2021 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended March 31, 2021	$	27,554	$	3,172	$	2,107	$	15,956	$	48,789

__________

(a) Includes the Level 3 investments acquired in connection with the Mergers during the three months ended March 31, 2021.

The following table provides a roll-forward in the changes in fair value from September 30, 2021 to March 31, 2022 for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Investments
	Senior Secured Debt		Subordinated Debt (including debt investments in the JVs)		Preferred Equity		Common Equity and Warrants		Total
Fair value as of September 30, 2021	$	1,878,536	$	176,317	$	63,565	$	43,163	$	2,161,581
Purchases	377,229		3,748		19,243		2,055		402,275
Sales and repayments	(300,229)		(21,135)		(163)		(8,946)		(330,473)
Transfers in (a)	7,858		—		—		—		7,858
Transfers out (a)	(17,070)		—		—		—		(17,070)
Capitalized PIK interest income	11,116		313		—		—		11,429
Accretion of OID	13,911		1,198		—		—		15,109
Net unrealized appreciation (depreciation)	(23,954)		286		2,239		(1,647)		(23,076)
Net realized gains (losses)	8,461		—		(512)		(1,037)		6,912
Fair value as of March 31, 2022	$	1,955,858	$	160,727	$	84,372	$	33,588	$	2,234,545
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of March 31, 2022 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the six months ended March 31, 2022	$	(11,506)	$	139	$	2,005	$	(6,757)	$	(16,119)

__________

(a) There were transfers into/out of Level 3 from/to Level 2 for certain investments during the six months ended March 31, 2022 as a result of a change in the number of market quotes available and/or a change in market liquidity.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following table provides a roll-forward in the changes in fair value from September 30, 2020 to March 31, 2021 for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Investments
	Senior Secured Debt		Subordinated Debt (including debt investments in the JVs)		Preferred Equity		Common Equity and Warrants		Total
Fair value as of September 30, 2020	$	904,237	$	126,152	$	29,959	$	35,080	$	1,095,428
Purchases (a)	769,926		46,286		19,958		2,377		838,547
Sales and repayments	(154,872)		(41,214)		(31)		(6,200)		(202,317)
Transfers in (b)(c)	18,458		—		—		437		18,895
Capitalized PIK interest income	6,748		—		—		—		6,748
Accretion of OID	4,423		1,031		—		—		5,454
Net unrealized appreciation (depreciation)	42,884		17,308		1,879		15,402		77,473
Net realized gains (losses)	(1,514)		8,391		31		3,243		10,151
Fair value as of March 31, 2021	$	1,590,290	$	157,954	$	51,796	$	50,339	$	1,850,379
Net unrealized appreciation (depreciation) relating to Level 3 investments still held as of March 31, 2021 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the six months ended March 31, 2021	$	44,253	$	3,398	$	1,879	$	16,556	$	66,086

__________

(a) Includes the Level 3 investments acquired in connection with the Mergers during the six months ended March 31, 2021.

(b) There were transfers into Level 3 from Level 2 for certain investments during the six months ended March 31, 2021 as a result of a change in the number of market quotes available and/or a change in market liquidity.

(c) There was a transfer into Level 3 from Level 2 as a result of an investment restructuring in which Level 2 senior secured debt was exchanged for Level 3 senior secured debt and common equity.

Significant Unobservable Inputs for Level 3 Investments

The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which are carried at fair value, as of March 31, 2022:

Asset

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted
Average (a)

Senior Secured Debt

1,615,395

Market Yield

(b)

8.0%

30.0%

10.9%

32,805

Enterprise Value

EBITDA Multiple

(c)

6.0x

8.0x

7.4x

24,078

Transaction Precedent

Transaction Price

(d)

N/A

283,580

Broker Quotations

Broker Quoted Price

(e)

N/A

Subordinated Debt

8,828

Market Yield

(b)

13.0%

16.0%

14.3%

Debt Investments in the JVs

151,899

Enterprise Value

N/A

(f)

N/A

Preferred & Common Equity

30,847

Enterprise Value

Revenue Multiple

(c)

0.5x

6.0x

0.6x

61,704

Enterprise Value

EBITDA Multiple

(c)

3.3x

20.5x

12.6x

116

Enterprise Value

Asset Multiple

(c)

0.9x

1.1x

1.0x

25,293

Transaction Precedent

Transaction Price

(d)

N/A

Total

2,234,545

__________

(a)Weighted averages are calculated based on fair value of investments.

(b)Used when market participants would take into account market yield when pricing the investment.

(c)Used when market participants would use such multiples when pricing the investment.

(d)Used when there is an observable transaction or pending event for the investment.

(e)The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by Oaktree.

(f)The Company determined the value of its subordinated notes of each JV based on the total assets less the total liabilities senior to the subordinated notes held at such JV in an amount not exceeding par under the EV technique.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which are carried at fair value, as of September 30, 2021:

Asset

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted
Average (a)

Senior Secured Debt

1,413,373

Market Yield

(b)

4.0%

30.0%

10.4%

36,197

Enterprise Value

EBITDA Multiple

(c)

3.0x

9.0x

4.5x

7,500

Enterprise Value

Asset Multiple

(c)

0.9x

1.1x

1.0x

421,466

Broker Quotations

Broker Quoted Price

(e)

N/A

Subordinated Debt

24,485

Market Yield

(b)

12.0%

14.0%

12.6%

Debt Investments in the JVs

151,832

Enterprise Value

N/A

(f)

N/A

Preferred & Common Equity

6,188

Enterprise Value

Revenue Multiple

(c)

0.9x

11.2x

2.5x

93,520

Enterprise Value

EBITDA Multiple

(c)

3.0x

35.0x

15.9x

698

Enterprise Value

Asset Multiple

(c)

0.9x

1.1x

1.0x

6,322

Transactions Precedent

Transaction Price

(d)

N/A

Total

2,161,581

__________

(a)Weighted averages are calculated based on fair value of investments.

(b)Used when market participants would take into account market yield when pricing the investment.

(c)Used when market participants would use such multiples when pricing the investment.

(d)Used when there is an observable transaction or pending event for the investment.

Under the market yield technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt securities is the market yield. Increases or decreases in the market yield may result in a lower or higher fair value measurement, respectively.

Under the EV technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt or equity securities is the earnings before interest, taxes, depreciation and amortization ("EBITDA"), revenue or asset multiple, as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively.

Financial Instruments Disclosed, But Not Carried, At Fair Value

The following table presents the carrying value and fair value of the Company's financial liabilities disclosed, but not carried, at fair value as of March 31, 2022 and the level of each financial liability within the fair value hierarchy:


	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Syndicated Facility payable	$	560,000	$	560,000	$	—	$	—	$	560,000
Citibank Facility payable	185,000		185,000		—		—		185,000
2025 Notes payable (carrying value is net of unamortized financing costs and unaccreted discount)	296,365		294,900		—		294,900		—
2027 Notes payable (carrying value is net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment)	322,295		320,394		—		320,394		—
Total	$	1,363,660	$	1,360,294	$	—	$	615,294	$	745,000

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following table presents the carrying value and fair value of the Company's financial liabilities disclosed, but not carried, at fair value as of September 30, 2021 and the level of each financial liability within the fair value hierarchy:


	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Syndicated Facility payable	$	495,000	$	495,000	$	—	$	—	$	495,000
Citibank Facility payable	135,000		135,000		—		—		135,000
2025 Notes payable (carrying value is net of unamortized financing costs and unaccreted discount)	295,740		314,541		—		314,541		—
2027 Notes payable (carrying value is net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment)	343,003		351,134		—		351,134		—
Total	$	1,268,743	$	1,295,675	$	—	$	665,675	$	630,000

The principal values of the credit facilities payable approximate fair value due to their variable interest rates and are included in Level 3 of the hierarchy. The Company used market quotes as of the valuation date to estimate the fair value of its 3.500% notes due 2025 (the "2025 Notes") and 2.700% notes due 2027 (the "2027 Notes"), which are included in Level 2 of the hierarchy.

Portfolio Composition

Summaries of the composition of the Company's portfolio at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets are shown in the following tables:


	March 31, 2022				September 30, 2021
Cost:			% of Total Investments				% of Total Investments
Senior secured debt	$	2,278,468	85.67	%	$	2,179,907	85.85	%
Debt investments in the JVs	146,843		5.52	%	146,955		5.79	%
Preferred equity	84,881		3.19	%	65,939		2.60	%
Subordinated debt	54,607		2.05	%	42,316		1.67	%
LLC equity interests of the JVs	49,322		1.85	%	49,322		1.94	%
Common equity and warrants	45,627		1.72	%	54,682		2.15	%
Total	$	2,659,748	100.00	%	$	2,539,121	100.00	%


	March 31, 2022						September 30, 2021
Fair Value:			% of Total Investments		% of Net Assets				% of Total Investments		% of Net Assets
Senior secured debt	$	2,283,940	86.36	%	171.69	%	$	2,217,243	86.72	%	168.89	%
Debt investments in the JVs	151,899		5.74	%	11.41	%	151,832		5.94	%	11.56	%
Preferred equity	84,372		3.19	%	6.34	%	63,565		2.49	%	4.84	%
Subordinated debt	54,129		2.05	%	4.07	%	42,681		1.67	%	3.25	%
LLC equity interests of the JVs	36,730		1.39	%	2.76	%	37,651		1.47	%	2.87	%
Common equity and warrants	33,705		1.27	%	2.53	%	43,657		1.71	%	3.33	%
Total	$	2,644,775	100.00	%	198.80	%	$	2,556,629	100.00	%	194.74	%

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company's business. The following tables show the composition of the Company's portfolio by geographic region at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets:


	March 31, 2022				September 30, 2021
Cost:			% of Total Investments				% of Total Investments
Northeast	$	745,395	28.03	%	$	720,781	28.39	%
Midwest	387,138		14.56	%	385,846		15.20	%
West	353,076		13.27	%	365,471		14.39	%
Southeast	339,740		12.77	%	294,339		11.59	%
International	316,793		11.91	%	268,817		10.59	%
Southwest	235,759		8.86	%	256,227		10.09	%
South	190,719		7.17	%	156,764		6.17	%
Northwest	91,128		3.43	%	90,876		3.58	%
Total	$	2,659,748	100.00	%	$	2,539,121	100.00	%


	March 31, 2022						September 30, 2021
Fair Value:			% of Total Investments		% of Net Assets				% of Total Investments		% of Net Assets
Northeast	$	733,354	27.73	%	55.13	%	$	721,647	28.24	%	54.97	%
Midwest	380,149		14.37	%	28.57	%	382,475		14.96	%	29.13	%
West	354,460		13.40	%	26.64	%	371,257		14.52	%	28.28	%
Southeast	341,912		12.93	%	25.70	%	299,486		11.71	%	22.81	%
International	317,169		11.99	%	23.84	%	275,904		10.79	%	21.02	%
Southwest	236,889		8.96	%	17.81	%	258,940		10.13	%	19.72	%
South	189,343		7.16	%	14.23	%	155,526		6.08	%	11.85	%
Northwest	91,499		3.46	%	6.88	%	91,394		3.57	%	6.96	%
Total	$	2,644,775	100.00	%	198.80	%	$	2,556,629	100.00	%	194.74	%

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following tables show the composition of the Company's portfolio by industry at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets as of March 31, 2022 and September 30, 2021:


	March 31, 2022				September 30, 2021
Cost:			% of Total Investments				% of Total Investments
Application Software	$	407,165	15.35	%	$	367,265	14.49	%
Multi-Sector Holdings (1)	196,165		7.38		196,277		7.73
Pharmaceuticals	136,971		5.15		138,250		5.44
Data Processing & Outsourced Services	120,429		4.53		120,381		4.74
Biotechnology	117,424		4.41		111,856		4.41
Industrial Machinery	91,540		3.44		88,231		3.47
Health Care Services	84,314		3.17		84,750		3.34
Health Care Technology	73,686		2.77		13,877		0.55
Aerospace & Defense	71,219		2.68		67,629		2.66
Specialized Finance	70,476		2.65		68,554		2.70
Fertilizers & Agricultural Chemicals	64,346		2.42		66,713		2.63
Internet & Direct Marketing Retail	63,119		2.37		62,233		2.45
Construction & Engineering	61,355		2.31		61,874		2.44
Internet Services & Infrastructure	53,537		2.01		46,917		1.85
Automotive Retail	53,318		2.00		41,800		1.65
Personal Products	52,734		1.98		103,642		4.08
Home Improvement Retail	46,000		1.73		46,487		1.83
Metal & Glass Containers	45,898		1.73		17,443		0.69
Airport Services	42,487		1.60		41,699		1.64
Health Care Distributors	41,625		1.56		19,698		0.78
Leisure Facilities	41,623		1.56		25,162		0.99
Real Estate Services	40,344		1.52		40,445		1.59
Diversified Support Services	38,934		1.46		40,666		1.60
Specialty Chemicals	37,362		1.40		46,731		1.84
Oil & Gas Storage & Transportation	36,603		1.38		36,612		1.44
Health Care Supplies	36,031		1.35		29,650		1.17
Insurance Brokers	35,683		1.34		25,515		1.00
Soft Drinks	34,105		1.28		33,410		1.32
Electrical Components & Equipment	32,956		1.24		32,127		1.27
Integrated Telecommunication Services	29,461		1.11		47,059		1.85
Real Estate Operating Companies	28,935		1.09		27,531		1.08
Other Diversified Financial Services	28,837		1.08		16,104		0.63
Advertising	28,042		1.05		28,649		1.13
Oil & Gas Refining & Marketing	27,761		1.04		36,044		1.42
Movies & Entertainment	26,082		0.98		26,002		1.02
Airlines	25,820		0.97		22,417		0.88
Distributors	25,309		0.95		—		—
Health Care Equipment	24,009		0.90		23,674		0.93
Environmental & Facilities Services	19,610		0.74		—		—
Home Furnishings	19,543		0.73		19,537		0.77
Cable & Satellite	17,964		0.68		26,730		1.05
Consumer Finance	14,471		0.54		—		—
Systems Software	12,801		0.48		6,647		0.26
Auto Parts & Equipment	12,470		0.47		12,466		0.49
IT Consulting & Other Services	11,724		0.44		7,598		0.30
Air Freight & Logistics	9,664		0.36		4,925		0.19
Restaurants	9,328		0.35		9,317		0.37
Leisure Products	7,169		0.27		6,599		0.26
Alternative Carriers	5,608		0.21		6,578		0.26
Trading Companies & Distributors	5,403		0.20		—		—
Research & Consulting Services	5,236		0.20		7,354		0.29
Apparel, Accessories & Luxury Goods	5,165		0.19		5,165		0.20
Integrated Oil & Gas	4,853		0.18		4,842		0.19
Food Distributors	4,639		0.17		4,625		0.18
Apparel Retail	4,413		0.17		—		—
Housewares & Specialties	3,700		0.14		1,875		0.07
Diversified Banks	3,515		0.13		3,515		0.14
Technology Distributors	3,163		0.12		3,163		0.12
Construction Materials	2,288		0.09		2,245		0.09
Electronic Components	2,086		0.08		10,080		0.40
Specialized REITs	1,404		0.05		—		—
Education Services	985		0.04		981		0.04
Communications Equipment	841		0.03		—		—
Independent Power Producers & Energy Traders	—		—		23,458		0.92
Commercial Printing	—		—		19,685		0.78
Managed Health Care	—		—		18,654		0.73
Thrifts & Mortgage Finance	—		—		16,079		0.63
Property & Casualty Insurance	—		—		9,884		0.39
Food Retail	—		—		3,745		0.15
	$	2,659,748	100.00	%	$	2,539,121	100.00	%

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


	March 31, 2022						September 30, 2021
Fair Value:			% of Total Investments		% of Net Assets				% of Total Investments		% of Net Assets
Application Software	$	409,310	15.44	%	30.79	%	$	372,606	14.58	%	28.39	%
Multi-Sector Holdings (1)	188,629		7.13		14.18		189,483		7.41		14.43
Pharmaceuticals	136,159		5.15		10.23		142,194		5.56		10.83
Biotechnology	117,881		4.46		8.86		113,641		4.44		8.66
Data Processing & Outsourced Services	112,989		4.27		8.49		113,923		4.46		8.68
Industrial Machinery	91,702		3.47		6.89		90,218		3.53		6.87
Health Care Services	78,481		2.97		5.90		84,735		3.31		6.45
Health Care Technology	73,989		2.80		5.56		13,960		0.55		1.06
Aerospace & Defense	72,585		2.74		5.46		69,602		2.72		5.30
Internet & Direct Marketing Retail	70,653		2.67		5.31		68,424		2.68		5.21
Specialized Finance	69,569		2.63		5.23		68,844		2.69		5.24
Fertilizers & Agricultural Chemicals	65,224		2.47		4.90		67,527		2.64		5.14
Construction & Engineering	62,210		2.35		4.68		63,109		2.47		4.81
Internet Services & Infrastructure	54,445		2.06		4.09		47,923		1.87		3.65
Automotive Retail	54,194		2.05		4.07		42,133		1.65		3.21
Personal Products	53,318		2.02		4.01		105,530		4.13		8.04
Home Improvement Retail	46,234		1.75		3.48		46,488		1.82		3.54
Metal & Glass Containers	45,926		1.74		3.45		17,413		0.68		1.33
Health Care Distributors	41,656		1.58		3.13		19,683		0.77		1.50
Airport Services	41,505		1.57		3.12		40,776		1.59		3.11
Real Estate Services	40,602		1.54		3.05		41,225		1.61		3.14
Leisure Facilities	39,686		1.50		2.98		22,888		0.90		1.74
Diversified Support Services	39,037		1.48		2.93		40,888		1.60		3.11
Insurance Brokers	37,394		1.41		2.81		27,612		1.08		2.10
Health Care Supplies	36,331		1.37		2.73		30,186		1.18		2.30
Specialty Chemicals	35,897		1.36		2.70		46,559		1.82		3.55
Soft Drinks	33,839		1.28		2.54		33,410		1.31		2.54
Oil & Gas Storage & Transportation	33,516		1.27		2.52		34,462		1.35		2.63
Electrical Components & Equipment	32,348		1.22		2.43		32,142		1.26		2.45
Integrated Telecommunication Services	30,969		1.17		2.33		49,607		1.94		3.78
Real Estate Operating Companies	29,569		1.12		2.22		28,341		1.11		2.16
Advertising	28,926		1.09		2.17		30,423		1.19		2.32
Oil & Gas Refining & Marketing	28,071		1.06		2.11		36,546		1.43		2.78
Other Diversified Financial Services	27,813		1.05		2.09		15,908		0.62		1.21
Movies & Entertainment	26,903		1.02		2.02		27,048		1.06		2.06
Airlines	25,830		0.98		1.94		24,554		0.96		1.87
Distributors	25,374		0.96		1.91		—		—		—
Health Care Equipment	23,862		0.90		1.79		23,763		0.93		1.81
Home Furnishings	19,619		0.74		1.47		19,735		0.77		1.50
Environmental & Facilities Services	19,460		0.74		1.46		—		—		—
Cable & Satellite	18,149		0.69		1.36		27,048		1.06		2.06
Consumer Finance	14,539		0.55		1.09		—		—		—
Systems Software	12,518		0.47		0.94		6,769		0.26		0.52
Auto Parts & Equipment	12,469		0.47		0.94		12,365		0.48		0.94
IT Consulting & Other Services	11,501		0.43		0.86		7,443		0.29		0.57
Air Freight & Logistics	9,706		0.37		0.73		4,981		0.19		0.38
Restaurants	9,341		0.35		0.70		9,451		0.37		0.72
Leisure Products	7,170		0.27		0.54		6,599		0.26		0.50
Alternative Carriers	5,743		0.22		0.43		6,939		0.27		0.53
Research & Consulting Services	5,276		0.20		0.40		7,606		0.30		0.58
Trading Companies & Distributors	4,902		0.19		0.37		—		—		—
Integrated Oil & Gas	4,897		0.19		0.37		4,884		0.19		0.37
Food Distributors	4,496		0.17		0.34		4,673		0.18		0.36
Apparel Retail	4,404		0.17		0.33		—		—		—
Housewares & Specialties	3,844		0.15		0.29		2,003		0.08		0.15
Diversified Banks	3,520		0.13		0.26		3,562		0.14		0.27
Technology Distributors	3,142		0.12		0.24		3,178		0.12		0.24
Electronic Components	2,104		0.08		0.16		10,127		0.40		0.77
Construction Materials	2,074		0.08		0.16		2,350		0.09		0.18
Specialized REITs	1,400		0.05		0.11		—		—		—
Education Services	1,004		0.04		0.08		1,009		0.04		0.08
Communications Equipment	871		0.03		0.07		—		—		—
Independent Power Producers & Energy Traders	—		—		—		23,552		0.92		1.79
Commercial Printing	—		—		—		20,100		0.79		1.53
Managed Health Care	—		—		—		18,840		0.74		1.44
Thrifts & Mortgage Finance	—		—		—		15,942		0.62		1.21
Property & Casualty Insurance	—		—		—		9,949		0.39		0.76
Food Retail	—		—		—		3,750		0.15		0.29
Total	$	2,644,775	100.00	%	198.80	%	$	2,556,629	100.00	%	194.74	%

___________________

(1)This industry includes the Company's investments in the JVs and certain limited partnership interests.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

As of March 31, 2022 and September 30, 2021, the Company had no single investment that represented greater than 10% of the total investment portfolio at fair value. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses, may fluctuate and in any given period can be highly concentrated among several investments.

Senior Loan Fund JV I, LLC

In May 2014, the Company entered into an LLC agreement with Kemper to form SLF JV I. The Company co-invests in senior secured loans of middle-market companies and other corporate debt securities with Kemper through its investment in SLF JV I. SLF JV I is managed by a four person Board of Directors, two of whom are selected by the Company and two of whom are selected by Kemper. All portfolio decisions and investment decisions in respect of SLF JV I must be approved by the SLF JV I investment committee, which consists of one representative selected by the Company and one representative selected by Kemper (with approval from a representative of each required). Since the Company does not have a controlling financial interest in SLF JV I, the Company does not consolidate SLF JV I.

SLF JV I is capitalized pro rata with LLC equity interests as transactions are completed and may be capitalized with additional subordinated notes issued to the Company and Kemper by SLF JV I. The subordinated notes issued by SLF JV I (the "SLF JV I Notes") are senior in right of payment to SLF JV I LLC equity interests and subordinated in right of payment to SLF JV I’s secured debt. As of March 31, 2022 and September 30, 2021, the Company and Kemper owned, in the aggregate, 87.5% and 12.5%, respectively, of the LLC equity interests of SLF JV I and the outstanding SLF JV I Notes. SLF JV I is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act.

SLF JV I has a senior revolving credit facility with Deutsche Bank AG, New York Branch (as amended, the "SLF JV I Deutsche Bank Facility"), which permitted up to $260.0 million of borrowings (subject to borrowing base and other limitations) as of each of March 31, 2022 and September 30, 2021. Borrowings under the SLF JV I Deutsche Bank Facility are secured by all of the assets of SLF JV I Funding LLC, a special purpose financing subsidiary of SLF JV I. As of March 31, 2022, the reinvestment period of the SLF JV I Deutsche Bank Facility was scheduled to expire May 3, 2023 and the maturity date was May 3, 2028. As of March 31, 2022, borrowings under the SLF JV I Deutsche Bank Facility accrued interest at a rate equal to 3-month LIBOR plus 2.00% per annum during the reinvestment period, 3-month LIBOR plus 2.15% per annum for the first year after the reinvestment period, 3-month LIBOR plus 2.25% for the following year and 3-month LIBOR plus 2.50% thereafter, in each case with a 0.125% LIBOR floor. $220.0 million and $215.6 million of borrowings were outstanding under the SLF JV I Deutsche Bank Facility as of March 31, 2022 and September 30, 2021, respectively.

As of March 31, 2022 and September 30, 2021, SLF JV I had total assets of $389.9 million and $379.2 million, respectively. SLF JV I's portfolio primarily consisted of senior secured loans to 60 and 55 portfolio companies as of March 31, 2022 and September 30, 2021, respectively. The portfolio companies in SLF JV I are in industries similar to those in which the Company may invest directly. As of March 31, 2022, the Company's investment in SLF JV I consisted of LLC equity interests and SLF JV I Notes of $133.0 million in aggregate, at fair value. As of September 30, 2021, the Company's investment in SLF JV I consisted of LLC equity interests and SLF JV I Notes of $133.9 million in aggregate, at fair value.

As of each of March 31, 2022 and September 30, 2021, the Company and Kemper had funded approximately $165.5 million to SLF JV I, of which $144.8 million was from the Company. As of each of March 31, 2022 and September 30, 2021, the Company had aggregate commitments to fund SLF JV I of $35.0 million, of which approximately $26.2 million was to fund additional SLF JV I Notes and approximately $8.8 million was to fund LLC equity interests in SLF JV I.

Below is a summary of SLF JV I's portfolio, followed by a listing of the individual loans in SLF JV I's portfolio as of March 31, 2022 and September 30, 2021:


	March 31, 2022	September 30, 2021
Senior secured loans (1)	$362,052	$344,196
Weighted average interest rate on senior secured loans (2)	5.86%	5.60%
Number of borrowers in SLF JV I	60	55
Largest exposure to a single borrower (1)	$9,750	$9,875
Total of five largest loan exposures to borrowers (1)	$47,621	$46,984

__________

(1) At principal amount.

(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

SLF JV I Portfolio as of March 31, 2022


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)		Industry	Principal		Cost		Fair Value (3)		Notes
Access CIG, LLC	First Lien Term Loan, LIBOR+3.75% cash due 2/27/2025	4.21	%	Diversified Support Services	$	9,063	$	9,040	$	8,942	(4)
ADB Companies, LLC	First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	7.26	%	Construction & Engineering	8,740		8,586		8,652		(4)
Alvogen Pharma US, Inc.	First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	6.26	%	Pharmaceuticals	9,508		9,376		8,920		(4)
American Tire Distributors, Inc.	First Lien Term Loan, LIBOR+6.25% cash due 10/20/2028	7.00	%	Distributors	4,897		4,836		4,866		(4)
Amplify Finco Pty Ltd.	First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.00	%	Movies & Entertainment	7,840		7,762		7,637		(4)
Anastasia Parent, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/11/2025	4.76	%	Personal Products	1,547		1,209		1,354
Apptio, Inc.	First Lien Revolver, LIBOR+7.25% cash due 1/10/2025	8.25	%	Application Software	154		150		151		(4)(5)
Apptio, Inc.	First Lien Term Loan, LIBOR+7.25% cash due 1/10/2025	8.25	%	Application Software	4,615		4,573		4,579		(4)
Total Apptio, Inc.					4,769		4,723		4,730
ASP-R-PAC Acquisition Co LLC	First Lien Term Loan, LIBOR+6.00% cash due 12/29/2027	6.75	%	Paper Packaging	4,197		4,117		4,126
ASP-R-PAC Acquisition Co LLC	First Lien Revolver, LIBOR+6.00% cash due 12/29/2027			Paper Packaging	—		(10)		(8)		(5)
Total ASP-R-PAC Acquisition Co LLC					4,197		4,107		4,118
Astra Acquisition Corp.	First Lien Term Loan, LIBOR+5.25% cash due 10/25/2028	5.75	%	Application Software	7,382		7,195		7,183		(4)
Asurion, LLC	Second Lien Term Loan, LIBOR+5.25% cash due 1/20/2029	5.71	%	Property & Casualty Insurance	1,846		1,828		1,807
Aurora Lux Finco S.À.R.L.	First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.00	%	Airport Services	6,370		6,262		6,007		(4)
BAART Programs, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 6/11/2027	6.01	%	Health Care Services	6,403		6,343		6,323
BAART Programs, Inc.	First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00	%	Health Care Services	1,580		1,560		1,542		(4)(5)
Total BAART Programs, Inc.					7,983		7,903		7,865
Blackhawk Network Holdings, Inc.	First Lien Term Loan, LIBOR+3.00% cash due 6/15/2025	3.46	%	Data Processing & Outsourced Services	9,625		9,614		9,464
Boxer Parent Company Inc.	First Lien Term Loan, LIBOR+3.75% cash due 10/2/2025	4.21	%	Systems Software	3,124		3,092		3,110
Brazos Delaware II, LLC	First Lien Term Loan, LIBOR+4.00% cash due 5/21/2025	4.45	%	Oil & Gas Equipment & Services	7,214		7,198		7,137
BYJU's Alpha, Inc.	First Lien Term Loan, LIBOR+5.50% cash due 11/24/2026	6.25	%	Application Software	7,481		7,373		7,418
C5 Technology Holdings, LLC	171 Common Units			Data Processing & Outsourced Services			—		—		(4)
C5 Technology Holdings, LLC	7,193,539.63 Preferred Units			Data Processing & Outsourced Services			7,194		5,683		(4)
Total C5 Technology Holdings, LLC							7,194		5,683
Centerline Communications, LLC	First Lien Term Loan, LIBOR+5.50% cash due 8/10/2027	6.50	%	Wireless Telecommunication Services	4,380		4,299		4,302
Centerline Communications, LLC	First Lien Revolver, LIBOR+5.50% cash due 8/10/2027			Wireless Telecommunication Services	—		(11)		(11)		(5)
Total Centerline Communications, LLC					4,380		4,288		4,291
CITGO Petroleum Corp.	First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.25	%	Oil & Gas Refining & Marketing	7,074		7,003		7,070		(4)
City Football Group Limited	First Lien Term Loan, LIBOR+3.50% cash due 7/21/2028	4.00	%	Movies & Entertainment	6,484		6,451		6,382
Connect U.S. Finco LLC	First Lien Term Loan, LIBOR+3.50% cash due 12/11/2026	4.50	%	Alternative Carriers	4,340		4,237		4,311
Convergeone Holdings, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 1/4/2026	5.46	%	IT Consulting & Other Services	7,411		7,217		7,118		(4)

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)		Industry	Principal		Cost		Fair Value (3)		Notes
Curium Bidco S.à.r.l.	First Lien Term Loan, LIBOR+4.00% cash due 7/9/2026	5.01	%	Biotechnology	$	5,850	$	5,806	$	5,839
Dcert Buyer, Inc.	First Lien Term Loan, LIBOR+4.00% cash due 10/16/2026	4.46	%	Internet Services & Infrastructure	2,870		2,863		2,854
DirecTV Financing, LLC	First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	5.75	%	Cable & Satellite	5,730		5,673		5,731		(4)
Domtar Corporation	First Lien Term Loan, LIBOR+5.50% cash due 11/30/2028	6.25	%	Paper Products	3,222		3,194		3,198
Domtar Corporation	First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 11/30/2028			Paper Products	—		(13)		(11)		(5)
Total Domtar Corporation					3,222		3,181		3,187
Eagle Parent Corp.	First Lien Term Loan, SOFR+4.25% cash due 4/1/2029	4.75	%	Industrial Machinery	4,500		4,388		4,472
eResearch Technology, Inc.	First Lien Term Loan, LIBOR+4.50% cash due 2/4/2027	5.50	%	Application Software	7,369		7,295		7,353
Gibson Brands, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 8/11/2028	5.75	%	Leisure Products	7,481		7,406		7,360
Global Medical Response, Inc.	First Lien Term Loan, LIBOR+4.25% cash due 3/14/2025	5.25	%	Health Care Services	1,990		1,990		1,981		(4)
Global Medical Response, Inc.	First Lien Term Loan, LIBOR+4.25% cash due 10/2/2025	5.25	%	Health Care Services	2,203		2,172		2,192
Total Global Medical Response, Inc.					4,193		4,162		4,173
Grab Holdings Inc.	First Lien Term Loan, LIBOR+4.50% cash due 1/29/2026	5.50	%	Interactive Media & Services	2,970		2,902		2,911
Indivior Finance S.À.R.L.	First Lien Term Loan, LIBOR+5.25% cash due 6/30/2026	6.26	%	Pharmaceuticals	7,444		7,315		7,397
INW Manufacturing, LLC	First Lien Term Loan, LIBOR+5.75% cash due 5/7/2027	6.76	%	Personal Products	9,750		9,500		9,555		(4)
LaserAway Intermediate Holdings II, LLC	First Lien Term Loan, LIBOR+5.75% cash due 10/14/2027	6.50	%	Health Care Services	7,481		7,342		7,406
Lightbox Intermediate, L.P.	First Lien Term Loan, LIBOR+5.00% cash due 5/9/2026	6.01	%	Real Estate Services	7,405		7,346		7,294		(4)
LogMeIn, Inc.	First Lien Term Loan, LIBOR+4.75% cash due 8/31/2027	5.22	%	Application Software	7,900		7,782		7,775
LTI Holdings, Inc.	First Lien Term Loan, LIBOR+3.50% cash due 9/6/2025	3.96	%	Electronic Components	7,404		7,306		7,250
Mindbody, Inc.	First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/2025	8.38	%	Internet Services & Infrastructure	4,651		4,608		4,581		(4)
Mindbody, Inc.	First Lien Revolver, LIBOR+8.00% cash due 2/14/2025			Internet Services & Infrastructure	—		(5)		(7)		(4)(5)
Total Mindbody, Inc.					4,651		4,603		4,574
MRI Software LLC	First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	6.51	%	Application Software	5,733		5,699		5,714		(4)
MRI Software LLC	First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026			Application Software	—		(3)		(1)		(5)
MRI Software LLC	First Lien Revolver, LIBOR+5.50% cash due 2/10/2026			Application Software	—		(3)		(1)		(4)(5)
Total MRI Software LLC					5,733		5,693		5,712
Northern Star Industries Inc.	First Lien Term Loan, LIBOR+4.50% cash due 3/31/2025	5.51	%	Electrical Components & Equipment	6,720		6,706		6,686
OEConnection LLC	First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	4.46	%	Application Software	7,816		7,781		7,706		(4)
Park Place Technologies, LLC	First Lien Term Loan, LIBOR+5.00% cash due 11/10/2027	6.00	%	Internet Services & Infrastructure	4,950		4,791		4,936		(4)
Planview Parent, Inc.	Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.26	%	Application Software	4,503		4,435		4,480		(4)
Pluralsight, LLC	First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00	%	Application Software	6,796		6,680		6,660		(4)
Pluralsight, LLC	First Lien Revolver, LIBOR+8.00% cash due 4/6/2027			Application Software	—		(7)		(8)		(4)(5)
Total Pluralsight, LLC					6,796		6,673		6,652
RevSpring, Inc.	First Lien Term Loan, LIBOR+4.25% cash due 10/11/2025	5.26	%	Commercial Printing	9,675		9,653		9,557

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)		Industry	Principal		Cost		Fair Value (3)		Notes
Sabert Corporation	First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	5.50	%	Metal & Glass Containers	$	2,657	$	2,631	$	2,561	(4)
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.23% cash due 4/27/2024	6.23	%	Footwear	138		138		129
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.25% cash due 4/27/2024	6.25	%	Footwear	8,245		8,235		7,709
Total SHO Holding I Corporation					8,383		8,373		7,838
Sirva Worldwide, Inc.	First Lien Term Loan, LIBOR+5.50% cash due 8/4/2025	5.96	%	Diversified Support Services	1,072		1,056		993		(4)
Sorenson Communications, LLC	First Lien Term Loan, LIBOR+5.50% cash due 3/17/2026	6.51	%	Communications Equipment	2,704		2,677		2,704
Spanx, LLC	First Lien Term Loan, LIBOR+5.50% cash due 11/20/2028	6.25	%	Apparel Retail	8,978		8,807		8,798		(4)
SPX Flow, Inc.	First Lien Term Loan, LIBOR+4.50% cash due 3/18/2029	5.00	%	Industrial Machinery	7,500		7,163		7,316
Star US Bidco LLC	First Lien Term Loan, LIBOR+4.25% cash due 3/17/2027	5.25	%	Industrial Machinery	5,414		5,273		5,371
Supermoose Borrower, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	4.76	%	Application Software	7,783		7,472		7,348		(4)
Surgery Center Holdings, Inc.	First Lien Term Loan, LIBOR+3.75% cash due 8/31/2026	4.50	%	Health Care Facilities	3,394		3,382		3,373
Touchstone Acquisition, Inc.	First Lien Term Loan, LIBOR+6.00% cash due 12/29/2028	7.01	%	Health Care Supplies	7,322		7,180		7,176		(4)
Trench Plate Rental, Co.	First Lien Term Loan, LIBOR+4.75% cash due 12/3/2026	5.76	%	Construction Materials	3,921		3,862		3,861
Trench Plate Rental, Co.	First Lien Delayed Draw Term Loan, LIBOR+4.75% cash due 12/3/2026			Construction Materials	—		(11)		—		(5)
Trench Plate Rental, Co.	First Lien Revolver, LIBOR+4.75% cash due 12/3/2026	5.76	%	Construction Materials	24		16		15		(5)
Total Trench Plate Rental, Co.					3,945		3,867		3,876
Veritas US Inc.	First Lien Term Loan, LIBOR+5.00% cash due 9/1/2025	6.00	%	Application Software	6,403		6,314		6,009		(4)
Verscend Holding Corp.	First Lien Term Loan, LIBOR+4.00% cash due 8/27/2025	4.46	%	Health Care Technology	1,075		1,063		1,074
Waystar Technologies, Inc.	First Lien Term Loan, LIBOR+4.00% cash due 10/22/2026	4.46	%	Health Care Technology	5,880		5,851		5,873
Windstream Services II, LLC	First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.25	%	Integrated Telecommunication Services	7,859		7,613		7,859		(4)
WP CPP Holdings, LLC	First Lien Term Loan, LIBOR+3.75% cash due 4/30/2025	4.75	%	Aerospace & Defense	1,995		1,910		1,895		(4)
WP CPP Holdings, LLC	Second Lien Term Loan, LIBOR+7.75% cash due 4/30/2026	8.75	%	Aerospace & Defense	6,000		5,968		5,875		(4)
Total Portfolio Investments					$	362,052	$	363,696	$	360,864

_________

(1) Represents the interest rate as of March 31, 2022. All interest rates are payable in cash, unless otherwise noted.

(2) The interest rate on the principal balance outstanding for most of the floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. Certain loans may also be indexed to SOFR. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of March 31, 2022, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 0.46%, the 90-day LIBOR at 1.01%, the 180-day LIBOR at 1.50%, the 360-day LIBOR at 2.20% and the SOFR at 0.28%. Most loans include an interest floor, which generally ranges from 0% to 1%.

(3) Represents the current determination of fair value as of March 31, 2022 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.

(4) This investment was held by both the Company and SLF JV I as of March 31, 2022.

(5) Investment had undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

SLF JV I Portfolio as of September 30, 2021


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)		Industry	Principal		Cost		Fair Value (3)		Notes
Access CIG, LLC	First Lien Term Loan, LIBOR+3.75% cash due 2/27/2025	3.83	%	Diversified Support Services	$	9,111	$	9,084	$	9,078	(4)
ADB Companies, LLC	First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	7.25	%	Construction & Engineering	7,732		7,566		7,644		(4)
Altice France S.A.	First Lien Term Loan, LIBOR+4.00% cash due 8/14/2026	4.12	%	Integrated Telecommunication Services	2,596		2,468		2,591
Alvogen Pharma US, Inc.	First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	6.25	%	Pharmaceuticals	9,755		9,580		9,443		(4)
Amplify Finco Pty Ltd.	First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.00	%	Movies & Entertainment	7,880		7,801		7,680		(4)
Anastasia Parent, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/11/2025	3.88	%	Personal Products	2,799		2,211		2,378
Apptio, Inc.	First Lien Term Loan, LIBOR+7.25% cash due 1/10/2025	8.25	%	Application Software	4,615		4,565		4,544		(4)
Apptio, Inc.	First Lien Revolver, LIBOR+7.25% cash due 1/10/2025	8.25	%	Application Software	154		150		148		(4)(5)
Total Apptio, Inc.					4,769		4,715		4,692
Asurion, LLC	Second Lien Term Loan, LIBOR+5.25% cash due 1/20/2029	5.33	%	Property & Casualty Insurance	6,000		5,940		5,980
Aurora Lux Finco S.À.R.L.	First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.00	%	Airport Services	6,403		6,283		6,025		(4)
BAART Programs, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00	%	Health Care Services	5,985		5,925		5,970
BAART Programs, Inc.	First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00	%	Health Care Services	450		436		446		(5)
Total BAART Programs, Inc.					6,435		6,361		6,416
Blackhawk Network Holdings, Inc.	First Lien Term Loan, LIBOR+3.00% cash due 6/15/2025	3.08	%	Data Processing & Outsourced Services	9,675		9,662		9,615
Boxer Parent Company Inc.	First Lien Term Loan, LIBOR+3.75% cash due 10/2/2025	3.88	%	Systems Software	6,643		6,570		6,615
Brazos Delaware II, LLC	First Lien Term Loan, LIBOR+4.00% cash due 5/21/2025	4.08	%	Oil & Gas Equipment & Services	7,253		7,234		7,158
C5 Technology Holdings, LLC	171 Common Units			Data Processing & Outsourced Services			—		—		(4)
C5 Technology Holdings, LLC	7,193,539.63 Preferred Units			Data Processing & Outsourced Services			7,194		5,683		(4)
Total C5 Technology Holdings, LLC							7,194		5,683
Centerline Communications, LLC	First Lien Term Loan, LIBOR+5.50% cash due 8/10/2027	6.50	%	Wireless Telecommunication Services	2,000		1,961		1,960
Centerline Communications, LLC	First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 8/10/2023	6.50	%	Wireless Telecommunication Services	1,920		1,890		1,889		(5)
Centerline Communications, LLC	First Lien Revolver, LIBOR+5.50% cash due 8/10/2027			Wireless Telecommunication Services	—		(12)		(12)		(5)
Total Centerline Communications, LLC					3,920		3,839		3,837
CITGO Petroleum Corp.	First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.25	%	Oil & Gas Refining & Marketing	7,111		7,040		7,134		(4)
City Football Group Limited	First Lien Term Loan, LIBOR+3.50% cash due 7/21/2028	4.00	%	Movies & Entertainment	6,500		6,468		6,492
Connect U.S. Finco LLC	First Lien Term Loan, LIBOR+3.50% cash due 12/11/2026	4.50	%	Alternative Carriers	7,362		7,204		7,376
Convergeone Holdings, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 1/4/2026	5.08	%	IT Consulting & Other Services	7,449		7,229		7,427		(4)
Curium Bidco S.à.r.l.	First Lien Term Loan, LIBOR+4.00% cash due 7/9/2026	4.13	%	Biotechnology	5,880		5,836		5,884
Dcert Buyer, Inc.	First Lien Term Loan, LIBOR+4.00% cash due 10/16/2026	4.08	%	Internet Services & Infrastructure	5,885		5,870		5,893
DirecTV Financing, LLC	First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	5.75	%	Cable & Satellite	6,000		5,940		6,011		(4)
Enviva Holdings, LP	First Lien Term Loan, LIBOR+5.50% cash due 2/17/2026	6.50	%	Forest Products	5,878		5,819		5,893

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)		Industry	Principal		Cost		Fair Value (3)		Notes
eResearch Technology, Inc.	First Lien Term Loan, LIBOR+4.50% cash due 2/4/2027	5.50	%	Application Software	$	7,406	$	7,332	$	7,451
GI Chill Acquisition LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/6/2025	3.90	%	Managed Health Care	3,721		3,737		3,712		(4)
GI Chill Acquisition LLC	Second Lien Term Loan, LIBOR+7.50% cash due 8/6/2026	7.63	%	Managed Health Care	3,750		3,674		3,731		(4)
Total GI Chill Acquisition LLC					7,471		7,411		7,443
Gibson Brands, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 8/11/2028	5.75	%	Leisure Products	7,500		7,425		7,463
Global Medical Response, Inc.	First Lien Term Loan, LIBOR+4.75% cash due 10/2/2025	5.75	%	Health Care Services	2,214		2,178		2,226
Global Medical Response, Inc.	First Lien Term Loan, LIBOR+4.25% cash due 3/14/2025	5.25	%	Health Care Services	1,995		1,995		2,004		(4)
Total Global Medical Response, Inc.					4,209		4,173		4,230
Grab Holdings Inc.	First Lien Term Loan, LIBOR+4.50% cash due 1/29/2026	5.50	%	Interactive Media & Services	2,985		2,907		3,025
Indivior Finance S.À.R.L.	First Lien Term Loan, LIBOR+5.25% cash due 6/30/2026	6.00	%	Pharmaceuticals	7,481		7,336		7,456
Intelsat Jackson Holdings S.A.	First Lien Term Loan, PRIME+4.75% cash due 11/27/2023	8.00	%	Alternative Carriers	3,568		3,550		3,622
Intelsat Jackson Holdings S.A.	First Lien Term Loan, LIBOR+4.75% cash due 7/13/2022	5.75	%	Alternative Carriers	5,000		4,935		5,044
Intelsat Jackson Holdings S.A.	First Lien Delayed Draw Term Loan, LIBOR+4.75% cash due 7/13/2022			Alternative Carriers	—		(13)		9		(5)
Total Intelsat Jackson Holdings S.A.					8,568		8,472		8,675
INW Manufacturing, LLC	First Lien Term Loan, LIBOR+5.75% cash due 5/7/2027	6.50	%	Personal Products	9,875		9,597		9,678		(4)
Lightbox Intermediate, L.P.	First Lien Term Loan, LIBOR+5.00% cash due 5/9/2026	5.13	%	Real Estate Services	7,443		7,377		7,405		(4)
LogMeIn, Inc.	First Lien Term Loan, LIBOR+4.75% cash due 8/31/2027	4.83	%	Application Software	7,940		7,812		7,946		(4)
LTI Holdings, Inc.	First Lien Term Loan, LIBOR+3.50% cash due 9/6/2025	3.58	%	Electronic Components	7,442		7,329		7,354
Maravai Intermediate Holdings, LLC	First Lien Term Loan, LIBOR+3.75% cash due 10/19/2027	4.75	%	Biotechnology	6,819		6,751		6,846
Mindbody, Inc.	First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/2025	8.00	%	Internet Services & Infrastructure	4,616		4,565		4,528		(4)
Mindbody, Inc.	First Lien Revolver, LIBOR+8.00% cash due 2/14/2025			Internet Services & Infrastructure	—		(6)		(9)		(4)(5)
Total Mindbody, Inc.					4,616		4,559		4,519
MRI Software LLC	First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	6.50	%	Application Software	3,877		3,843		3,875		(4)
MRI Software LLC	First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026			Application Software	—		(6)		(1)		(4)(5)
MRI Software LLC	First Lien Revolver, LIBOR+5.50% cash due 2/10/2026			Application Software	—		(3)		—		(4)(5)
Total MRI Software LLC					3,877		3,834		3,874
Northern Star Industries Inc.	First Lien Term Loan, LIBOR+4.50% cash due 3/31/2025	5.50	%	Electrical Components & Equipment	6,755		6,738		6,738
OEConnection LLC	First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	4.08	%	Application Software	7,852		7,816		7,842		(4)
Olaplex, Inc.	First Lien Term Loan, LIBOR+6.25% cash due 1/8/2026	7.25	%	Personal Products	6,273		6,189		6,226		(4)
Olaplex, Inc.	First Lien Revolver, LIBOR+6.25% cash due 1/8/2025			Personal Products	—		(7)		(8)		(4)(5)
Total Olaplex, Inc.					6,273		6,182		6,218
Park Place Technologies, LLC	First Lien Term Loan, LIBOR+5.00% cash due 11/10/2027	6.00	%	Internet Services & Infrastructure	4,975		4,801		4,981		(4)
Planview Parent, Inc.	Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.00	%	Application Software	4,503		4,435		4,514		(4)

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)		Industry	Principal		Cost		Fair Value (3)		Notes
Pluralsight, LLC	First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00	%	Application Software	$	6,796	$	6,669	$	6,667	(4)
Pluralsight, LLC	First Lien Revolver, LIBOR+8.00% cash due 4/6/2027			Application Software	—		(8)		(8)		(4)(5)
Total Pluralsight, LLC					6,796		6,661		6,659
Sabert Corporation	First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	5.50	%	Metal & Glass Containers	2,728		2,700		2,738		(4)
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.25% cash due 4/27/2024	6.25	%	Footwear	8,288		8,277		7,874
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.23% cash due 4/27/2024	6.23	%	Footwear	138		138		131
Total SHO Holding I Corporation					8,426		8,415		8,005
Sirva Worldwide, Inc.	First Lien Term Loan, LIBOR+5.50% cash due 8/4/2025	5.58	%	Diversified Support Services	1,087		1,071		1,027		(4)
Sorenson Communications, LLC	First Lien Term Loan, LIBOR+5.50% cash due 3/17/2026	6.25	%	Communications Equipment	2,854		2,825		2,877
Star US Bidco LLC	First Lien Term Loan, LIBOR+4.25% cash due 3/17/2027	5.25	%	Industrial Machinery	8,255		8,075		8,289		(4)
Supermoose Borrower, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	3.88	%	Application Software	7,823		7,465		7,294		(4)
Surgery Center Holdings, Inc.	First Lien Term Loan, LIBOR+3.75% cash due 8/31/2026	4.50	%	Health Care Facilities	4,911		4,895		4,925
Trench Plate Rental, Co.	First Lien Term Loan, LIBOR+4.75% cash due 12/3/2026	5.75	%	Construction Materials	3,942		3,882		3,881
Trench Plate Rental, Co.	First Lien Delayed Draw Term Loan, LIBOR+4.75% cash due 12/3/2026			Construction Materials	—		(11)		(12)		(5)
Trench Plate Rental, Co.	First Lien Revolver, LIBOR+4.75% cash due 12/3/2026	5.75	%	Construction Materials	24		15		15		(5)
Total Trench Plate Rental, Co.					3,966		3,886		3,884
Veritas US Inc.	First Lien Term Loan, LIBOR+5.00% cash due 9/1/2025	6.00	%	Application Software	6,435		6,333		6,473		(4)
Verscend Holding Corp.	First Lien Term Loan, LIBOR+4.00% cash due 8/27/2025	4.08	%	Health Care Technology	4,080		4,052		4,091
Waystar Technologies, Inc.	First Lien Term Loan, LIBOR+4.00% cash due 10/22/2026	4.08	%	Health Care Technology	5,910		5,880		5,921
Windstream Services II, LLC	First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.25	%	Integrated Telecommunication Services	7,899		7,629		7,948		(4)
WP CPP Holdings, LLC	Second Lien Term Loan, LIBOR+7.75% cash due 4/30/2026	8.75	%	Aerospace & Defense	6,000		5,964		5,931		(4)
Total Portfolio Investments					$	344,196	$	346,052	$	346,665

__________

(1) Represents the interest rate as of September 30, 2021. All interest rates are payable in cash, unless otherwise noted.

(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All the LIBOR shown above is in U.S. dollars. As of September 30, 2021, the reference rates for SLF JV I's variable rate loans were the 30-day LIBOR at 0.08%, the 60-day LIBOR at 0.11%, the 90-day LIBOR at 0.13%, the 180-day LIBOR at 0.16%, the 360-day LIBOR at 0.24% and the PRIME at 3.25%. Most loans include an interest floor, which generally ranges from 0% to 1%.

(3) Represents the current determination of fair value as of September 30, 2021 utilizing a similar technique as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.

(4) This investment was held by both the Company and SLF JV I as of September 30, 2021.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Both the cost and fair value of the Company's SLF JV I Notes were $96.3 million as of each of March 31, 2022 and September 30, 2021. The Company earned interest income of $1.9 million and $3.9 million on the SLF JV I Notes for the three and six months ended March 31, 2022, respectively. The Company earned interest income of $1.7 million and $3.5 million on the SLF JV I Notes for the three and six months ended March 31, 2021, respectively. As of March 31, 2022, the SLF JV I Notes bore interest at a rate of one-month LIBOR plus 7.00% per annum with a LIBOR floor of 1.00% and will mature on December 29, 2028.

The cost and fair value of the LLC equity interests in SLF JV I held by the Company were $49.3 million and $36.7 million, respectively, as of March 31, 2022, and $49.3 million and $37.7 million, respectively, as of September 30, 2021. The Company earned $0.7 million and $1.2 million in dividend income for the three and six months ended March 31, 2022, respectively, with respect to its investment in the LLC equity interests of SLF JV I. The Company did not earn dividend income for the three and six months ended March 31, 2021 with respect to its investment in the LLC equity interests of SLF JV I. The LLC equity interests of SLF JV I are generally dividend producing to the extent SLF JV I has residual cash to be distributed on a quarterly basis.

Below is certain summarized financial information for SLF JV I as of March 31, 2022 and September 30, 2021 and for the three and six months ended March 31, 2022 and 2021:


	March 31, 2022		September 30, 2021
Selected Balance Sheet Information:
Investments at fair value (cost March 31, 2022: $363,696; cost September 30, 2021: $346,052)	$	360,864	$	346,665
Cash and cash equivalents	19,544		23,446
Restricted cash	4,384		4,517
Other assets	5,095		4,529
Total assets	$	389,887	$	379,157

Senior credit facility payable	$	220,000	$	215,620
SLF JV I Notes payable at fair value (proceeds March 31, 2022: $110,000; proceeds September 30, 2021: $110,000)	110,000		110,000
Other liabilities	17,909		10,507
Total liabilities	$	347,909	$	336,127
Members' equity	41,978		43,030
Total liabilities and members' equity	$	389,887	$	379,157


	Three months ended March 31, 2022		Three months ended March 31, 2021		Six months ended March 31, 2022		Six months ended March 31, 2021
Selected Statements of Operations Information:
Interest income	$	5,445	$	4,813	$	10,868	$	9,288
Other income	62		473		73		527
Total investment income	5,507		5,286		10,941		9,815
Senior credit facility interest expense	1,552		1,218		3,066		2,793
SLF JV I Notes interest expense	2,200		1,964		4,449		3,970
Other expenses	42		75		121		137
Total expenses (1)	3,794		3,257		7,636		6,900
Net unrealized appreciation (depreciation)	(2,920)		3,441		(3,445)		11,927
Net realized gains (losses)	29		145		403		1
Net income (loss)	$	(1,178)	$	5,615	$	263	$	14,843

__________

(1) There are no management fees or incentive fees charged at SLF JV I.

SLF JV I has elected to fair value the SLF JV I Notes issued to the Company and Kemper under FASB ASC Topic 825, Financial Instruments - Fair Value Option. The SLF JV I Notes are valued based on the total assets less the total liabilities senior to the SLF JV I Notes in an amount not exceeding par under the EV technique.

During the six months ended March 31, 2022, the Company sold $9.7 million of senior secured debt investments to SLF JV I for $9.7 million cash consideration, which represented the fair value at the time of sale. A gain of $0.5 million was recognized by the Company on these transactions. The Company did not sell any senior secured debt investments to SLF JV I during the three months ended March 31, 2022. During the three and six months ended March 31, 2021, the Company sold $35.0 million of senior secured debt investments to SLF JV I at fair value for $34.5 million cash consideration. A gain of $2.0 million was recognized by the Company on these transactions.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

OCSI Glick JV LLC

On March 19, 2021, as a result of the consummation of the Mergers, the Company became party to the LLC agreement of Glick JV. The Company co-invests primarily in senior secured loans of middle-market companies with GF Equity Funding through the Glick JV. The Glick JV is managed by a four person Board of Directors, two of whom are selected by the Company and two of whom are selected by GF Equity Funding. The Glick JV is capitalized as transactions are completed, and portfolio decisions and investment decisions in respect of the Glick JV must be approved by the Glick JV investment committee, which consists of one representative selected by the Company and one representative selected by GF Equity Funding (with approval from a representative of each required). Since the Company does not have a controlling financial interest in the Glick JV, the Company does not consolidate the Glick JV.

The members provide capital to the Glick JV in exchange for LLC equity interests, and the Company and GF Debt Funding 2014 LLC ("GF Debt Funding"), an entity advised by affiliates of GF Equity Funding, provide capital to the Glick JV in exchange for subordinated notes issued by the Glick JV (the "Glick JV Notes"). As of March 31, 2022 and September 30, 2021, the Company and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC equity interests, and the Company and GF Debt Funding owned 87.5% and 12.5%, respectively, of the Glick JV Notes. The Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act.

The Glick JV has a senior revolving credit facility with Deutsche Bank AG, New York Branch (the "Glick JV Deutsche Bank Facility"), which, as of March 31, 2022, had a reinvestment period end date and maturity date of May 3, 2023 and May 3, 2028, respectively, and permitted borrowings of up to $90.0 million (subject to borrowing base and other limitations). Borrowings under the Glick JV Deutsche Bank Facility are secured by all of the assets of the Glick JV and all of the equity interests in the Glick JV and, as of March 31, 2022, bore interest at a rate equal to 3-month LIBOR plus 2.25% per annum during the reinvestment period, 3-month LIBOR plus 2.40% for the first year after the end of the reinvestment period, 3-month LIBOR plus 2.50% for the following year and 3-month LIBOR plus 2.75% thereafter, in each case with a 0.125% LIBOR floor. $76.1 million and $71.9 million of borrowings were outstanding under the Glick JV Deutsche Bank Facility as of March 31, 2022 and September 30, 2021, respectively.

As of March 31, 2022 and September 30, 2021, the Glick JV had total assets of $149.9 million and $141.0 million, respectively. The Glick JV's portfolio consisted of middle-market and other corporate debt securities of 44 and 37 portfolio companies as of March 31, 2022 and September 30, 2021, respectively. The portfolio companies in the Glick JV are in industries similar to those in which the Company may invest directly. The Company's investment in the Glick JV consisted of LLC equity interests and Glick JV Notes of $55.6 million in the aggregate at fair value as of each of March 31, 2022 and September 30, 2021. The Glick JV Notes are junior in right of payment to the repayment of temporary contributions made by the Company to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Glick JV Notes, respectively.

As of each of March 31, 2022 and September 30, 2021, the Glick JV had total capital commitments of $100.0 million, $87.5 million of which was from the Company and the remaining $12.5 million of which was from GF Equity Funding and GF Debt Funding. Approximately $84.0 million in aggregate commitments were funded as of each of March 31, 2022 and September 30, 2021, of which $73.5 million was from the Company. As of each of March 31, 2022 and September 30, 2021, the Company had commitments to fund Glick JV Notes of $78.8 million, of which $12.4 million were unfunded. As of each of March 31, 2022 and September 30, 2021, the Company had commitments to fund LLC equity interests in the Glick JV of $8.7 million, of which $1.6 million were unfunded.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Below is a summary of the Glick JV's portfolio, followed by a listing of the individual loans in the Glick JV's portfolio as of March 31, 2022 and September 30, 2021:


	March 31, 2022	September 30, 2021
Senior secured loans (1)	$141,187	$126,512
Weighted average current interest rate on senior secured loans (2)	6.05%	5.86%
Number of borrowers in the Glick JV	44	37
Largest loan exposure to a single borrower (1)	$6,733	$6,907
Total of five largest loan exposures to borrowers (1)	$28,141	$28,324

__________

(1) At principal amount.

(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.

Glick JV Portfolio as of March 31, 2022


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)	Industry	Principal		Cost		Fair Value (3)		Notes
ADB Companies, LLC	First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	7.26%	Construction & Engineering	$	4,768	$	4,687	$	4,720	(4)
Alvogen Pharma US, Inc.	First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	6.26%	Pharmaceuticals	6,733		6,636		6,316		(4)
American Tire Distributors, Inc.	First Lien Term Loan, LIBOR+6.25% cash due 10/20/2028	7.00%	Distributors	2,904		2,868		2,886		(4)
Amplify Finco Pty Ltd.	First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.00%	Movies & Entertainment	2,940		2,911		2,864		(4)
Anastasia Parent, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/11/2025	4.76%	Personal Products	922		716		807
ASP-R-PAC Acquisition Co LLC	First Lien Term Loan, LIBOR+6.00% cash due 12/29/2027	6.75%	Paper Packaging	1,743		1,709		1,713
ASP-R-PAC Acquisition Co LLC	First Lien Revolver, LIBOR+6.00% cash due 12/29/2027		Paper Packaging	—		(4)		(4)		(5)
Total ASP-R-PAC Acquisition Co LLC				1,743		1,705		1,709
Astra Acquisition Corp.	First Lien Term Loan, LIBOR+5.25% cash due 10/25/2028	5.75%	Application Software	3,491		3,410		3,397		(4)
Asurion, LLC	Second Lien Term Loan, LIBOR+5.25% cash due 1/20/2029	5.71%	Property & Casualty Insurance	923		914		904
Aurora Lux Finco S.À.R.L.	First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.00%	Airport Services	3,675		3,613		3,465		(4)
BAART Programs, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 6/11/2027	6.01%	Health Care Services	3,415		3,383		3,372
BAART Programs, Inc.	First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00%	Health Care Services	721		713		704		(4)(5)
Total BAART Programs, Inc.				4,136		4,096		4,076
Brazos Delaware II, LLC	First Lien Term Loan, LIBOR+4.00% cash due 5/21/2025	4.45%	Oil & Gas Equipment & Services	4,809		4,799		4,758
BYJU's Alpha, Inc.	First Lien Term Loan, LIBOR+5.50% cash due 11/24/2026	6.25%	Application Software	3,990		3,932		3,956
CITGO Petroleum Corp.	First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.25%	Oil & Gas Refining & Marketing	3,537		3,502		3,535		(4)
City Football Group Limited	First Lien Term Loan, LIBOR+3.50% cash due 7/21/2028	4.00%	Movies & Entertainment	2,494		2,481		2,455
Curium Bidco S.à.r.l.	First Lien Term Loan, LIBOR+4.00% cash due 7/9/2026	5.01%	Biotechnology	2,885		2,864		2,880
DirecTV Financing, LLC	First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	5.75%	Cable & Satellite	2,865		2,836		2,865		(4)

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)	Industry	Principal		Cost		Fair Value (3)		Notes
Domtar Corporation	First Lien Term Loan, LIBOR+5.50% cash due 11/30/2028	6.25%	Paper Products	$	2,027	$	2,007	$	2,012
Domtar Corporation	First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 11/30/2028		Paper Products	—		(10)		(7)		(5)
Total Domtar Corporation				2,027		1,997		2,005
Eagle Parent Corp.	First Lien Term Loan, SOFR+4.25% cash due 4/1/2029	4.75%	Industrial Machinery	2,500		2,438		2,484
eResearch Technology, Inc.	First Lien Term Loan, LIBOR+4.50% cash due 2/4/2027	5.50%	Application Software	2,456		2,432		2,451
Gibson Brands, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 8/11/2028	5.75%	Leisure Products	3,990		3,950		3,925
Houghton Mifflin Harcourt Publishers Inc.	First Lien Term Loan, LIBOR+6.25% cash due 11/22/2024	7.25%	Education Services	431		422		430		(4)
Indivior Finance S.À.R.L.	First Lien Term Loan, LIBOR+5.25% cash due 6/30/2026	6.26%	Pharmaceuticals	3,970		3,901		3,945
Integro Parent, Inc.	First Lien Term Loan, LIBOR+5.75% cash due 10/31/2022	6.75%	Insurance Brokers	3,217		3,216		3,043
INW Manufacturing, LLC	First Lien Term Loan, LIBOR+5.75% cash due 5/7/2027	6.76%	Personal Products	2,438		2,375		2,389		(4)
LaserAway Intermediate Holdings II, LLC	First Lien Term Loan, LIBOR+5.75% cash due 10/14/2027	6.50%	Health Care Services	3,990		3,916		3,950
Lightstone Holdco LLC	First Lien Term Loan, LIBOR+3.75% cash due 1/30/2024	4.75%	Electric Utilities	3,439		3,184		3,129
LTI Holdings, Inc.	First Lien Term Loan, LIBOR+3.50% cash due 9/6/2025	3.96%	Electronic Components	1,365		1,169		1,337
MRI Software LLC	First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	6.51%	Application Software	1,655		1,641		1,649		(4)
MRI Software LLC	First Lien Revolver, LIBOR+5.50% cash due 2/10/2026		Application Software	—		(1)		—		(4)(5)
Total MRI Software LLC				1,655		1,640		1,649
Northern Star Industries Inc.	First Lien Term Loan, LIBOR+4.50% cash due 3/31/2025	5.51%	Electrical Components & Equipment	5,280		5,269		5,254
OEConnection LLC	First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	4.46%	Application Software	3,908		3,890		3,853		(4)
Planview Parent, Inc.	Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.26%	Application Software	2,842		2,799		2,828		(4)
Pluralsight, LLC	First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00%	Application Software	4,465		4,390		4,376		(4)
Pluralsight, LLC	First Lien Revolver, LIBOR+8.00% cash due 4/6/2027		Application Software	—		(5)		(6)		(4)(5)
Total Pluralsight, LLC				4,465		4,385		4,370
Sabert Corporation	First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	5.50%	Metal & Glass Containers	1,772		1,754		1,707		(4)
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.25% cash due 4/27/2024	6.25%	Footwear	6,126		6,111		5,728
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.23% cash due 4/27/2024	6.23%	Footwear	102		102		96
Total SHO Holding I Corporation				6,228		6,213		5,824
Spanx, LLC	First Lien Term Loan, LIBOR+5.50% cash due 11/18/2028	6.25%	Apparel Retail	4,988		4,893		4,888		(4)
SPX Flow, Inc.	First Lien Term Loan, LIBOR+4.50% cash due 3/18/2029	5.00%	Industrial Machinery	4,000		3,820		3,902
Supermoose Borrower, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	4.76%	Application Software	2,835		2,707		2,677		(4)
Surgery Center Holdings, Inc.	First Lien Term Loan, LIBOR+3.75% cash due 8/31/2026	4.50%	Health Care Facilities	3,394		3,382		3,373
Touchstone Acquisition, Inc.	First Lien Term Loan, LIBOR+6.00% cash due 12/29/2028	7.01%	Health Care Supplies	3,039		2,980		2,978		(4)
Tribe Buyer LLC	First Lien Term Loan, LIBOR+4.50% cash due 2/16/2024	5.50%	Human Resource & Employment Services	1,591		1,590		1,408
Verscend Holding Corp.	First Lien Term Loan, LIBOR+4.00% cash due 8/27/2025	4.46%	Health Care Technology	1,712		1,701		1,710
Waystar Technologies, Inc.	First Lien Term Loan, LIBOR+4.00% cash due 10/22/2026	4.46%	Health Care Technology	1,930		1,921		1,928

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)	Industry	Principal		Cost		Fair Value (3)		Notes
Windstream Services II, LLC	First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.25%	Integrated Telecommunication Services	$	4,912	$	4,758	$	4,912	(4)
WP CPP Holdings, LLC	First Lien Term Loan, LIBOR+3.75% cash due 4/30/2025	4.75%	Aerospace & Defense	998		955		948		(4)
WP CPP Holdings, LLC	Second Lien Term Loan, LIBOR+7.75% cash due 4/30/2026	8.75%	Aerospace & Defense	3,000		2,984		2,937		(4)
Total WP CPP Holdings, LLC				3,998		3,939		3,885
Total Portfolio Investments				$	141,187	$	138,611	$	137,827

__________

(1) Represents the interest rate as of March 31, 2022. All interest rates are payable in cash, unless otherwise noted.

(2) The interest rate on the principal balance outstanding for most of the floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. Certain loans may also be indexed to SOFR. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars. As of March 31, 2022, the reference rates for the Glick JV's variable rate loans were the 30-day LIBOR at 0.46%, the 90-day LIBOR at 1.01%, the 180-day LIBOR at 1.50% and the 360-day LIBOR at 2.20% and the SOFR at 0.28%. Most loans include an interest floor, which generally ranges from 0% to 1%.

(4) This investment was held by both the Company and the Glick JV as of March 31, 2022.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Glick JV Portfolio as of September 30, 2021


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)	Industry	Principal		Cost		Fair Value (3)		Notes
ADB Companies, LLC	First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	7.25%	Construction & Engineering	$	3,866	$	3,783	$	3,822	(4)
Alvogen Pharma US, Inc.	First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	6.25%	Pharmaceuticals	6,907		6,780		6,687		(4)
Amplify Finco Pty Ltd.	First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.00%	Movies & Entertainment	2,955		2,925		2,880		(4)
Anastasia Parent, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/11/2025	3.88%	Personal Products	1,667		1,310		1,416
Asurion, LLC	Second Lien Term Loan, LIBOR+5.25% cash due 1/20/2029	5.33%	Property & Casualty Insurance	3,000		2,970		2,990
Aurora Lux Finco S.À.R.L.	First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.00%	Airport Services	3,694		3,625		3,476		(4)
BAART Programs, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00%	Health Care Services	3,192		3,160		3,184
BAART Programs, Inc.	First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00%	Health Care Services	240		232		238		(5)
Total BAART Programs, Inc.				3,432		3,392		3,422
Brazos Delaware II, LLC	First Lien Term Loan, LIBOR+4.00% cash due 5/21/2025	4.08%	Oil & Gas Equipment & Services	4,835		4,823		4,772
CITGO Petroleum Corp.	First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.25%	Oil & Gas Refining & Marketing	3,555		3,520		3,567		(4)
City Football Group Limited	First Lien Term Loan, LIBOR+3.50% cash due 7/21/2028	4.00%	Movies & Entertainment	2,500		2,488		2,497
Curium Bidco S.à.r.l.	First Lien Term Loan, LIBOR+4.00% cash due 7/9/2026	4.13%	Biotechnology	4,900		4,863		4,903
DirecTV Financing, LLC	First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	5.75%	Cable & Satellite	3,000		2,970		3,005		(4)
Enviva Holdings, LP	First Lien Term Loan, LIBOR+5.50% cash due 2/17/2026	6.50%	Forest Products	3,919		3,879		3,928
eResearch Technology, Inc.	First Lien Term Loan, LIBOR+4.50% cash due 2/4/2027	5.50%	Application Software	2,469		2,444		2,484
Gibson Brands, Inc.	First Lien Term Loan, LIBOR+5.00% cash due 8/11/2028	5.75%	Leisure Products	4,000		3,960		3,981
Houghton Mifflin Harcourt Publishers Inc.	First Lien Term Loan, LIBOR+6.25% cash due 11/22/2024	7.25%	Education Services	431		420		433		(4)
Indivior Finance S.À.R.L.	First Lien Term Loan, LIBOR+5.25% cash due 6/30/2026	6.00%	Pharmaceuticals	3,990		3,913		3,977
Integro Parent, Inc.	First Lien Term Loan, LIBOR+5.75% cash due 10/31/2022	6.75%	Insurance Brokers	3,229		3,221		3,173
Intelsat Jackson Holdings S.A.	First Lien Term Loan, LIBOR+4.75% cash due 7/13/2022	5.75%	Alternative Carriers	4,167		4,112		4,203
Intelsat Jackson Holdings S.A.	First Lien Delayed Draw Term Loan, LIBOR+4.75% cash due 7/13/2022		Alternative Carriers	—		(11)		7		(5)
Total Intelsat Jackson Holdings S.A.				4,167		4,101		4,210
INW Manufacturing, LLC	First Lien Term Loan, LIBOR+5.75% cash due 5/7/2027	6.50%	Personal Products	2,469		2,399		2,419		(4)
Lightstone Holdco LLC	First Lien Term Loan, LIBOR+3.75% cash due 1/30/2024	4.75%	Electric Utilities	3,439		3,115		2,855
LTI Holdings, Inc.	First Lien Term Loan, LIBOR+3.50% cash due 9/6/2025	3.58%	Electronic Components	1,372		1,147		1,356
MRI Software LLC	First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	6.50%	Application Software	1,635		1,621		1,634		(4)
MRI Software LLC	First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026		Application Software	—		(1)		—		(4)(5)
MRI Software LLC	First Lien Revolver, LIBOR+5.50% cash due 2/10/2026		Application Software	—		(1)		—		(4)(5)
Total MRI Software LLC				1,635		1,619		1,634

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)


Portfolio Company	Investment Type	Cash Interest Rate (1)(2)	Industry	Principal		Cost		Fair Value (3)		Notes
Northern Star Industries Inc.	First Lien Term Loan, LIBOR+4.50% cash due 3/31/2025	5.50%	Electrical Components & Equipment	$	5,308	$	5,294	$	5,294
OEConnection LLC	First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	4.08%	Application Software	3,926		3,908		3,921		(4)
Olaplex, Inc.	First Lien Term Loan, LIBOR+6.25% cash due 1/8/2026	7.25%	Personal Products	3,502		3,454		3,475		(4)
Olaplex, Inc.	First Lien Revolver, LIBOR+6.25% cash due 1/8/2025		Personal Products	—		(4)		(5)		(4)(5)
Total Olaplex, Inc.				3,502		3,450		3,470
Planview Parent, Inc.	Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.00%	Application Software	2,842		2,799		2,849		(4)
Pluralsight, LLC	First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00%	Application Software	4,465		4,383		4,380		(4)
Pluralsight, LLC	First Lien Revolver, LIBOR+8.00% cash due 4/6/2027		Application Software	—		(6)		(6)		(4)(5)
Total Pluralsight, LLC				4,465		4,377		4,374
Sabert Corporation	First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	5.50%	Metal & Glass Containers	1,819		1,800		1,825		(4)
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.25% cash due 4/27/2024	6.25%	Footwear	6,159		6,140		5,851
SHO Holding I Corporation	First Lien Term Loan, LIBOR+5.23% cash due 4/27/2024	6.23%	Footwear	102		102		97
Total SHO Holding I Corporation				6,261		6,242		5,948
Supermoose Borrower, LLC	First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	3.88%	Application Software	2,850		2,703		2,657		(4)
Surgery Center Holdings, Inc.	First Lien Term Loan, LIBOR+3.75% cash due 8/31/2026	4.50%	Health Care Facilities	4,911		4,895		4,925
Tribe Buyer LLC	First Lien Term Loan, LIBOR+4.50% cash due 2/16/2024	5.50%	Human Resource & Employment Services	1,599		1,598		1,354
Verscend Holding Corp.	First Lien Term Loan, LIBOR+4.00% cash due 8/27/2025	4.08%	Health Care Technology	1,721		1,709		1,725
Waystar Technologies, Inc.	First Lien Term Loan, LIBOR+4.00% cash due 10/22/2026	4.08%	Health Care Technology	3,940		3,920		3,947
Windstream Services II, LLC	First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.25%	Integrated Telecommunication Services	4,937		4,768		4,967		(4)
WP CPP Holdings, LLC	Second Lien Term Loan, LIBOR+7.75% cash due 4/30/2026	8.75%	Aerospace & Defense	3,000		2,982		2,965		(4)
Total Portfolio Investments				$	126,512	$	124,112	$	124,108

__________

(1) Represents the interest rate as of September 30, 2021. All interest rates are payable in cash, unless otherwise noted.

(2) The interest rate on the principal balance outstanding for all floating rate loans is indexed to LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars. As of September 30, 2021, the reference rates for the Glick JV's variable rate loans were the 30-day LIBOR at 0.08%, the 60-day LIBOR at 0.11%, the 90-day LIBOR at 0.13%, the 180-day LIBOR at 0.16% and the 360-day LIBOR at 0.24%. Most loans include an interest floor, which generally ranges from 0% to 1%.

(4) This investment was held by both the Company and the Glick JV as of September 30, 2021.

The cost and fair value of the Company's aggregate investment in the Glick JV was $50.6 million and $55.6 million, respectively, as of March 31, 2022. The cost and fair value of the Company's aggregate investment in the Glick JV was $50.7 million and $55.6 million, respectively, as of September 30, 2021. For the three and six months ended March 31, 2022, the Company's investment in the Glick JV Notes earned interest income of $1.0 million and $2.1 million, respectively. For the period from March 19, 2021 to March 31, 2021, the Company's investment in the Glick JV Notes earned interest income of $0.1 million. The Company did not earn dividend income for the three and six months ended March 31, 2022 and for the period from March 19, 2021 to March 31, 2021 with respect to its investment in the LLC equity interest of the Glick JV. The LLC equity interests of the Glick JV are income producing to the extent there is residual cash to be distributed on a quarterly basis.

As of March 31, 2022, the Glick JV Notes bore interest at a rate of one-month LIBOR plus 4.50% per annum and will mature on October 20, 2028.

Below is certain summarized financial information for the Glick JV as of March 31, 2022 and September 30, 2021 and for the three and six months ended March 31, 2022 and for the period from March 19, 2021 to March 31, 2021:


	March 31, 2022		September 30, 2021
Selected Balance Sheet Information:
Investments at fair value (cost March 31, 2022: $138,611; September 30, 2021: $124,112)	$	137,827	$	124,108
Cash and cash equivalents	8,657		14,087
Restricted cash	1,261		1,055
Other assets	2,147		1,750
Total assets	$	149,892	$	141,000

Senior credit facility payable	$	76,082	$	71,882
Glick JV Notes payable at fair value (proceeds March 31, 2022: $69,585; September 30, 2021: $70,525)	63,598		63,522
Other liabilities	10,212		5,596
Total liabilities	$	149,892	$	141,000
Members' equity	—		—
Total liabilities and members' equity	$	149,892	$	141,000


	For the three months ended March 31, 2022		For the six months ended March 31, 2022		For the period from March 19, 2021 to March 31, 2021
Selected Statements of Operations Information:
Interest income	$	2,220	$	4,380	$	304
Fee income	35		35		3
Total investment income	2,255		4,415		307
Senior credit facility interest expense	538		1,048		89
Glick JV Notes interest expense	801		1,619		120
Other expenses	29		68		6
Total expenses (1)	1,368		2,735		215
Net unrealized appreciation (depreciation)	(914)		(1,796)		(124)
Realized gain (loss)	27		116		32
Net income (loss)	$	—	$	—	$	—

__________

(1) There are no management fees or incentive fees charged at the Glick JV.

The Glick JV has elected to fair value the Glick JV Notes issued to the Company and GF Debt Funding under FASB ASC Topic 825, Financial Instruments - Fair Value Option. The Glick JV Notes are valued based on the total assets less the liabilities senior to the Glick JV Notes in an amount not exceeding par under the EV technique.

During the three and six months ended March 31, 2022 and the period from March 19, 2021 to March 31, 2021, the Company did not sell any debt investments to the Glick JV.

Note 4. Fee Income

For the three and six months ended March 31, 2022, the Company recorded total fee income of $1.9 million and $2.8 million, respectively, of which $0.2 million and $0.4 million, respectively, was recurring in nature. For the three and six months ended March 31, 2021, the Company recorded total fee income of $2.3 million and $5.6 million, respectively, of which $0.1 million and $0.2 million, respectively, was recurring in nature. Recurring fee income primarily consisted of servicing fees and exit fees.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Note 5. Share Data and Net Assets

Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share, pursuant to ASC Topic 260-10, Earnings per Share, for the three and six months ended March 31, 2022 and 2021:


(Share amounts in thousands)	Three months ended March 31, 2022		Three months ended March 31, 2021		Six months ended March 31, 2022		Six months ended March 31, 2021
Earnings (loss) per common share — basic and diluted:
Net increase (decrease) in net assets resulting from operations	$	14,441	$	88,117	$	53,849	$	153,661
Weighted average common shares outstanding — basic and diluted	181,598		146,652		180,982		143,775
Earnings (loss) per common share — basic and diluted	$	0.08	$	0.60	$	0.30	$	1.07

Changes in Net Assets

The following table presents the changes in net assets for the three and six months ended March 31, 2022:


	Common Stock
(Share amounts in thousands)	Shares	Par Value		Additional paid-in-capital		Accumulated Overdistributed Earnings		Total Net Assets
Balance as of September 30, 2021	180,361	$	1,804	$	1,804,354	$	(493,335)	$	1,312,823
Net investment income	—	—		—		32,295		32,295
Net unrealized appreciation (depreciation)	—	—		—		(4,586)		(4,586)
Net realized gains (losses)	—	—		—		9,321		9,321
(Provision) benefit for taxes on realized and unrealized gains (losses)	—	—		—		2,378		2,378
Distributions to stockholders	—	—		—		(27,956)		(27,956)
Issuance of common stock under dividend reinvestment plan	108	1		785		—		786
Balance as of December 31, 2021	180,469	$	1,805	$	1,805,139	$	(481,883)	$	1,325,061
Net investment income	—	—		—		40,098		40,098
Net unrealized appreciation (depreciation)	—	—		—		(27,038)		(27,038)
Net realized gains (losses)	—	—		—		1,402		1,402
(Provision) benefit for taxes on realized and unrealized gains (losses)	—	—		—		(21)		(21)
Distributions to stockholders	—	—		—		(29,271)		(29,271)
Issuance of common stock in connection with the "at the market" offering	2,632	26		19,353		—		19,379
Issuance of common stock under dividend reinvestment plan	104	1		765		—		766
Balance as of March 31, 2022	183,205	$	1,832	$	1,825,257	$	(496,713)	$	1,330,376

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following table presents the changes in net assets for the three and six months ended March 31, 2021:


	Common Stock
(Share amounts in thousands)	Shares	Par Value		Additional paid-in-capital		Accumulated Overdistributed Earnings		Total Net Assets
Balance as of September 30, 2020	140,961	$	1,409	$	1,487,774	$	(574,304)	$	914,879
Net investment income	—	—		—		10,018		10,018
Net unrealized appreciation (depreciation)	—	—		—		47,556		47,556
Net realized gains (losses)	—	—		—		8,215		8,215
Provision for income tax (expense) benefit	—	—		—		(245)		(245)
Distributions to stockholders	—	—		—		(15,506)		(15,506)
Issuance of common stock under dividend reinvestment plan	94	1		527		—		528
Repurchases of common stock under dividend reinvestment plan	(94)	(1)		(527)		—		(528)
Balance as of December 31, 2020	140,961	$	1,409	$	1,487,774	$	(524,266)	$	964,917
Net investment income	—	—		—		18,114		18,114
Net unrealized appreciation (depreciation)	—	—		—		65,144		65,144
Net realized gains (losses)	—	—		—		5,856		5,856
Provision for income tax (expense) benefit	—	—		—		(997)		(997)
Distributions to stockholders	—	—		—		(16,915)		(16,915)
Issuance of common stock in connection with the Mergers	39,400	395		242,309		—		242,704
Issuance of common stock under dividend reinvestment plan	82	1		510		—		511
Repurchases of common stock under dividend reinvestment plan	(82)	(1)		(510)		—		(511)
Balance as of March 31, 2021	180,361	$	1,804	$	1,730,083	$	(453,064)	$	1,278,823

Distributions

Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the Board of Directors and is based on management’s estimate of the Company’s annual taxable income. Net realized capital gains, if any, may be distributed to stockholders or retained for reinvestment.

The Company has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of any distributions the Company declares in cash on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, if the Company’s Board of Directors declares a cash distribution, then the Company’s stockholders who have not “opted out” of the Company’s DRIP will have their cash distribution automatically reinvested in additional shares of the Company’s common stock, rather than receiving the cash distribution. If the Company’s shares are trading at a premium to net asset value, the Company typically issues new shares to implement the DRIP with such shares issued at the greater of the most recently computed net asset value per share of common stock or 95% of the current market price per share of common stock on the payment date for such distribution. If the Company’s shares are trading at a discount to net asset value, the Company typically purchases shares in the open market in connection with the Company’s obligations under the DRIP.

For income tax purposes, the Company has reported its distributions for the 2021 calendar year as ordinary income. The character of such distributions was appropriately reported to the Internal Revenue Service and stockholders for the 2021 calendar year. To the extent the Company’s taxable earnings for a fiscal and taxable year fall below the amount of distributions paid for the fiscal and taxable year, a portion of the total amount of the Company’s distributions for the fiscal and taxable year is deemed a return of capital for U.S. federal income tax purposes to the Company’s stockholders.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

The following table reflects the distributions per share that the Company has paid, including shares issued under the DRIP, on its common stock during the six months ended March 31, 2022 and 2021:

Date Declared

Record Date

Payment Date

Amount
per Share

Cash
Distribution

DRIP Shares
Issued (1)

DRIP Shares
Value

October 13, 2021

December 15, 2021

December 31, 2021

0.155

$ 27.2 million

107,971

$ 0.8 million

January 28, 2022

March 15, 2022

March 31, 2022

0.16

28.5 million

104,411

0.8 million

Total for the six months ended March 31, 2022

0.315

$ 55.7 million

212,382

$ 1.6 million

Date Declared

Record Date

Payment Date

Amount
per Share

Cash
Distribution

DRIP Shares
Issued (2)

DRIP Shares
Value

November 13, 2020

December 15, 2020

December 31, 2020

0.11

$ 15.0 million

93,964

$ 0.5 million

January 29, 2021

March 15, 2021

March 31, 2021

0.12

16.4 million

81,702

0.5 million

Total for the six months ended March 31, 2021

0.23

$ 31.4 million

175,666

$ 1.0 million

__________

(1) New shares were issued and distributed.

(2) Shares were purchased on the open market and distributed.

Common Stock Issuances

During the three and six months ended March 31, 2022, the Company issued an aggregate of 104,411 and 212,382 shares of common stock, respectively, as part of the DRIP.

On February 7, 2022, the Company entered into an equity distribution agreement by and among the Company, Oaktree, Oaktree Administrator and Keefe, Bruyette & Woods, Inc., JMP Securities LLC, Raymond James & Associates, Inc. and SMBC Nikko Securities America, Inc., as placement agents, in connection with the issuance and sale by the Company of shares of common stock, having an aggregate offering price of up to $125.0 million. Sales of the common stock may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or similar securities exchanges or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.

In connection with the "at the market" offering, the Company issued and sold the following shares of common stock during the three and six months ended March 31, 2022:


	Number of Shares Issued	Gross Proceeds		Placement Agent Fees		Net Proceeds (1)		Average Sales Price per Share (2)
"At the market" offering	2,632,260	$	19,794	$	198	$	19,596	$	7.52

__________

(1) Net proceeds excludes offering costs of $0.2 million.

(2) Represents the gross sales price before deducting placement agent fees and estimated offering expenses.

Note 6. Borrowings

Syndicated Facility

On November 30, 2017, the Company entered into a senior secured revolving credit facility (as amended and restated, the “Syndicated Facility”) pursuant to a Senior Secured Revolving Credit Agreement with the lenders party thereto, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and MUFG Union Bank, N.A., as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents. The Syndicated Facility provides that the Company may use the proceeds of the loans and issuances of letters of credit under the Syndicated Facility for general corporate purposes, including acquiring and funding leveraged loans, mezzanine loans, high-yield securities, convertible securities, preferred stock, common stock and other investments. The Syndicated Facility further allows the Company to request letters of credit from ING Capital LLC, as the issuing bank.

On December 10, 2021, the Company entered into an incremental commitment and assumption agreement pursuant to which a new lender provided additional commitments of $50 million under the Syndicated Facility. As of March 31, 2022, the size of the Syndicated Facility was $1.0 billion. In addition, pursuant to an "accordion" feature, the Company may increase the

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

size of the facility to up to the greater of $1.25 billion and the Company's net worth, as defined in the facility, under certain circumstances.

As of March 31, 2022, (i) the period during which the Company may make drawings will expire on May 4, 2025 and the maturity date is May 4, 2026 and (ii) the interest rate margin for (a) LIBOR loans (which may be 1-, 2-, 3- or 6-month, at the Company’s option) was 2.00% and (b) alternate base rate loans was 1.00%.

The Syndicated Facility is secured by substantially all of the Company’s assets (excluding, among other things, investments held in and by certain subsidiaries of the Company (including OCSL Senior Funding II LLC) or investments in certain portfolio companies of the Company) and guaranteed by certain subsidiaries of the Company. As of March 31, 2022, except for assets that were held by OCSL Senior Funding II LLC and certain immaterial subsidiaries, substantially all of the Company's assets are pledged as collateral under the Syndicated Facility.

The Syndicated Facility requires the Company to, among other things, (i) make representations and warranties regarding the collateral as well as each of the Company’s portfolio companies’ businesses, (ii) agree to certain indemnification obligations, and (iii) comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including covenants related to: (A) limitations on the incurrence of additional indebtedness and liens, (B) limitations on certain investments, (C) limitations on certain asset transfers and restricted payments, (D) maintaining a certain minimum stockholders’ equity, (E) maintaining a ratio of total assets (less total liabilities) to total indebtedness, of the Company and its subsidiaries (subject to certain exceptions), of not less than 1.50 to 1.00, (F) maintaining a ratio of consolidated EBITDA to consolidated interest expense, of the Company and its subsidiaries (subject to certain exceptions), of not less than 2.25 to 1.00, (G) maintaining a minimum liquidity and net worth, and (H) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. The Syndicated Facility also includes usual and customary default provisions such as the failure to make timely payments under the facility, the occurrence of a change in control, and the failure by the Company to materially perform under the agreements governing the facility, which, if not complied with, could accelerate repayment under the facility. As of March 31, 2022, the Company was in compliance with all financial covenants under the Syndicated Facility. In addition to the asset coverage ratio described above, borrowings under the Syndicated Facility (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that will apply different advance rates to different types of assets in the Company’s portfolio. Each loan or letter of credit originated or assumed under the Syndicated Facility is subject to the satisfaction of certain conditions.

As of March 31, 2022 and September 30, 2021, the Company had $560.0 million and $495.0 million of borrowings outstanding under the Syndicated Facility, respectively, which had a fair value of $560.0 million and $495.0 million, respectively. The Company's borrowings under the Syndicated Facility bore interest at a weighted average interest rate of 2.193% and 2.229% for the six months ended March 31, 2022 and 2021, respectively. For the three and six months ended March 31, 2022, the Company recorded interest expense (inclusive of fees) of $4.0 million and $7.8 million, respectively, related to the Syndicated Facility. For the three and six months ended March 31, 2021, the Company recorded interest expense (inclusive of fees) of $3.3 million and $6.5 million, respectively, related to the Syndicated Facility.

Citibank Facility

On March 19, 2021, as a result of the consummation of the Mergers, the Company became party to a revolving credit facility (as amended and/or restated from time to time, the “Citibank Facility”) with OCSL Senior Funding II LLC (formerly OCSI Senior Funding II LLC), the Company’s wholly-owned, special purpose financing subsidiary, as the borrower, the Company, as collateral manager and seller, each of the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Wells Fargo Bank, National Association, as collateral agent and custodian.

On November 18, 2021, the Company entered into an amendment to the Citibank Facility that, among other things, increased the size of the facility by $50 million and extended the reinvestment period and final maturity date. As of March 31, 2022, the Company was able to borrow up to $200 million under the Citibank Facility (subject to borrowing base and other limitations). As of March 31, 2022, the reinvestment period under the Citibank Facility was scheduled to expire on November 18, 2023 and the maturity date for the Citibank Facility was November 18, 2024.

As of March 31, 2022, borrowings under the Citibank Facility are subject to certain customary advance rates and accrue interest at a rate equal to LIBOR plus between 1.25% and 2.20% per annum on broadly syndicated loans, subject to observable market depth and pricing, and LIBOR plus 2.25% per annum on all other eligible loans during the reinvestment period. In addition, as of March 31, 2022, for the duration of the reinvestment period there is a non-usage fee payable of 0.50% per annum on the undrawn amount under the Citibank Facility. The minimum asset coverage ratio applicable to the Company under the Citibank Facility is 150% as determined in accordance with the requirements of the Investment Company Act. Borrowings under the Citibank Facility are secured by all of the assets of OCSL Senior Funding II LLC and all of the Company’s equity

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

interests in OCSL Senior Funding II LLC. The Company may use the Citibank Facility to fund a portion of its loan origination activities and for general corporate purposes. Each loan origination under the Citibank Facility is subject to the satisfaction of certain conditions.

As of March 31, 2022 and September 30, 2021, the Company had $185.0 million and $135.0 million outstanding under the Citibank Facility, respectively, which had a fair value of $185.0 million and $135.0 million, respectively. The Company's borrowings under the Citibank Facility bore interest at a weighted average interest rate of 2.060% and 2.191% for the six months ended March 31, 2022 and the period from March 19, 2021 to March 31, 2021, respectively. For the three and six months ended March 31, 2022, the Company recorded interest expense (inclusive of fees) of $1.1 million and $1.9 million related to the Citibank Facility. For the period from March 19, 2021 to March 31, 2021, the Company recorded interest expense (inclusive of fees) of $0.1 million related to the Citibank Facility.

2025 Notes

On February 25, 2020, the Company issued $300.0 million in aggregate principal amount of the 2025 Notes for net proceeds of $293.8 million after deducting OID of $2.5 million, underwriting commissions and discounts of $3.0 million and offering costs of $0.7 million. The OID on the 2025 Notes is amortized based on the effective interest method over the term of the 2025 Notes.

The 2025 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the fifth supplemental indenture, dated February 25, 2020 (collectively, the "2025 Notes Indenture"), between the Company and Deutsche Bank Trust Company Americas (the "Trustee"). The 2025 Notes are the Company's general unsecured obligations that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2025 Notes. The 2025 Notes rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated. The 2025 Notes effectively rank junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness. The 2025 Notes rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities.

Interest on the 2025 Notes is paid semi-annually on February 25 and August 25 at a rate of 3.500% per annum. The 2025 Notes mature on February 25, 2025 and may be redeemed in whole or in part at any time or from time to time at the Company's option prior to maturity at par plus a “make-whole” premium, if applicable. In addition, holders of the 2025 Notes can require the Company to repurchase the 2025 Notes at 100% of their principal amount upon the occurrence of certain change of control events as described in the 2025 Notes Indenture. The 2025 Notes were issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. During the six months ended March 31, 2022, the Company did not repurchase any of the 2025 Notes in the open market.

The 2025 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act or any successor provisions (but giving effect to any exemptive relief granted to the Company by the U.S. Securities and Exchange Commission ("SEC")), as well as covenants requiring the Company to provide financial information to the holders of the 2025 Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These covenants are subject to limitations and exceptions that are described in the 2025 Notes Indenture.

2027 Notes

On May 18, 2021, the Company issued $350.0 million in aggregate principal amount of the 2027 Notes for net proceeds of $344.8 million after deducting OID of $1.0 million, underwriting commissions and discounts of $3.5 million and offering costs of $0.7 million. The OID on the 2027 Notes is amortized based on the effective interest method over the term of the 2027 Notes.

The 2027 Notes were issued pursuant to an indenture, dated April 30, 2012, as supplemented by the sixth supplemental indenture, dated May 18, 2021 (collectively, the "2027 Notes Indenture"), between the Company and the Trustee. The 2027 Notes are the Company's general unsecured obligations that rank senior in right of payment to all of the Company's existing and future indebtedness that is expressly subordinated in right of payment to the 2027 Notes. The 2027 Notes rank equally in right of payment with all of the Company's existing and future liabilities that are not so subordinated. The 2027 Notes effectively rank junior to any of the Company's secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness. The 2027 Notes rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company's subsidiaries, financing vehicles or similar facilities.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Interest on the 2027 Notes is paid semi-annually on January 15 and July 15, beginning on January 15, 2022, at a rate of 2.700% per annum. The 2027 Notes mature on January 15, 2027 and may be redeemed in whole or in part at any time or from time to time at the Company's option prior to maturity at par plus a “make-whole” premium, if applicable. In addition, holders of the 2027 Notes can require the Company to repurchase the 2027 Notes at 100% of their principal amount upon the occurrence of certain change of control events as described in the 2027 Notes Indenture. The 2027 Notes were issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. During the six months ended March 31, 2022, the Company did not repurchase any of the 2027 Notes in the open market.

The 2027 Notes Indenture contains certain covenants, including covenants requiring the Company's compliance with the asset coverage requirements set forth in Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act or any successor provisions (but giving effect to any exemptive relief granted to the Company by the SEC), as well as covenants requiring the Company to provide financial information to the holders of the 2027 Notes and the Trustee if the Company ceases to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the 2027 Notes Indenture.

In connection with the 2027 Notes, the Company entered into an interest rate swap to more closely align the interest rates of its liabilities with its investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, the Company receives a fixed interest rate of 2.700% and pays a floating interest rate of the three-month LIBOR plus 1.658% on a notional amount of $350 million. The Company designated the interest rate swap as the hedging instrument in an effective hedge accounting relationship. See Note 12 for more information regarding the interest rate swaps.

The below table presents the components of the carrying value of the 2025 Notes and the 2027 Notes as of March 31, 2022 and September 30, 2021:


	As of March 31, 2022				As of September 30, 2021
($ in millions)	2025 Notes		2027 Notes		2025 Notes		2027 Notes
Principal	$	300.0	$	350.0	$	300.0	$	350.0
Unamortized financing costs	(2.1)		(3.6)		(2.6)		(4.0)
Unaccreted discount	(1.5)		(0.8)		(1.7)		(0.9)
Interest rate swap fair value adjustment	—		(23.3)		—		(2.1)
Net carrying value	$	296.4	$	322.3	$	295.7	$	343.0
Fair Value	$	294.9	$	320.4	$	314.5	$	351.1

The below table presents the components of interest and other debt expenses related to the 2025 Notes and the 2027 Notes for the three and six months ended March 31, 2022:


($ in millions)	2025 Notes						2027 Notes
	Three months ended March 31, 2022			Six months ended March 31, 2022			Three months ended March 31, 2022			Six months ended March 31, 2022
Coupon interest	$	2.6		$	5.3		$	2.4		$	4.8
Amortization of financing costs and discount	0.3			0.6			0.2			0.4
Effect of interest rate swap	—			—			(0.7)			(1.5)
Total interest expense	$	2.9		$	5.9		$	1.9		$	3.7
Coupon interest rate (net of effect of interest rate swap for 2027 Notes)	3.500		%	3.500		%	1.877		%	1.867		%

The below table presents the components of interest and other debt expenses related to the 2025 Notes for the three and six months ended March 31, 2021:


($ in millions)	2025 Notes
	Three months ended March 31, 2021			Six months ended March 31, 2021
Coupon interest	$	2.6		$	5.3
Amortization of financing costs and discount	0.3			0.6
Total interest expense	$	2.9		$	5.9
Coupon interest rate	3.500		%	3.500		%

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Note 7. Taxable/Distributable Income and Dividend Distributions

Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments and foreign currency, as gains and losses are not included in taxable income until they are realized; (2) origination and exit fees received in connection with investments in portfolio companies; (3) organizational costs; (4) income or loss recognition on exited investments; and (5) recognition of interest income on certain loans.

As of September 30, 2021, the Company had net capital loss carryforwards of $547.9 million to offset net capital gains that will not expire, to the extent available and permitted by U.S. federal income tax law, of which $69.1 million are available to offset future short-term capital gains and $478.8 million are available to offset future long-term capital gains. A portion of such net capital loss carryfowards represented a realized loss under sections 382 and 383 of the Code, which is carried forward to future years to offset future gains subject to certain limitations.

Listed below is a reconciliation of "net increase (decrease) in net assets resulting from operations" to taxable income for the three and six months ended March 31, 2022 and 2021.


	Three months ended March 31, 2022		Three months ended March 31, 2021		Six months ended March 31, 2022		Six months ended March 31, 2021
Net increase (decrease) in net assets resulting from operations	$	14,441	$	88,117	$	53,849	$	153,661
Net unrealized (appreciation) depreciation	27,038		(65,144)		31,624		(112,700)
Book/tax difference due to organizational costs	(22)		—		(44)		(22)
Book/tax difference due to interest income on certain loans	—		(469)		—		(339)
Book/tax difference due to capital losses utilized	(4,916)		(11,954)		(15,447)		(21,897)
Other book/tax differences	1,393		12,018		(9,778)		17,632
Taxable/Distributable Income (1)	$	37,934	$	22,568	$	60,204	$	36,335

__________

(1) The Company's taxable income for the three and six months ended March 31, 2022 is an estimate and will not be finally determined until the Company files its tax return for the fiscal year ending September 30, 2022. Therefore, the final taxable income may be different than the estimate.

The Company uses the liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.

When assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred tax assets are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income and tax liabilities for the tax jurisdiction in which the tax asset is located. The deferred tax asset recognized by the Company, as it relates to the higher tax basis in the carrying value of certain assets compared to the book basis of those assets, will be recognized in future years by these taxable entities. Deferred tax assets are based on the amount of the tax benefit that the Company’s management has determined is more likely than not to be realized in future periods. In determining the realizability of this tax benefit, management considered numerous factors that will give rise to pre-tax income in future periods. Among these are the historical and expected future book and tax basis pre-tax income of the Company and unrealized gains in the Company’s assets at the determination date. Based on these and other factors, the Company determined that, as of March 31, 2022, $3.0 million of the $4.7 million deferred tax assets would not more likely than not be realized in future periods. As of March 31, 2022, the Company recorded a net deferred tax asset of $1.7 million on the Consolidated Statements of Assets and Liabilities.

For the three months ended March 31, 2022, the Company recognized a total provision for income tax related to realized and unrealized gains (losses) of less than $0.1 million.

For the six months ended March 31, 2022, the Company recognized a total benefit for income tax related to realized and unrealized gains (losses) of $2.4 million, which was composed of (i) a current income tax benefit of approximately $1.4 million, and (ii) a deferred income tax benefit of approximately $1.0 million, which resulted from unrealized depreciation on investments held by the Company’s wholly-owned taxable subsidiaries. For the six months ended March 31, 2022, the

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Company recognized a provision for income tax related to net investment income of $3.3 million, which was all current income tax expense.

As of September 30, 2021, the Company's last tax year end, the components of accumulated overdistributed earnings on a tax basis were as follows:


Undistributed ordinary income, net	$	(20,260)
Net realized capital losses	497,255
Unrealized losses, net	16,340
Accumulated overdistributed earnings	$	493,335

The aggregate cost of investments for U.S. federal income tax purposes was $2.6 billion as of September 30, 2021. As of September 30, 2021, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over cost for U.S. federal income tax purposes was $409.5 million. As of September 30, 2021, the aggregate gross unrealized depreciation for all investments in which there was an excess of cost for U.S. federal income tax purposes over value was $425.8 million. Net unrealized depreciation based on the aggregate cost of investments for U.S. federal income tax purposes was $16.3 million.

Note 8. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation

Realized Gains or Losses

Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption and the cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and include investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with the Company's determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.

During the three months ended March 31, 2022, the Company recorded an aggregate net realized gain of $1.4 million, which consisted of the following:


($ in millions)
Portfolio Company	Net Realized Gain (Loss)
TigerConnect Inc.	1.8
Other, net	(0.4)
Total, net	$	1.4

During the three months ended March 31, 2021, the Company recorded an aggregate net realized gain of $5.9 million, which consisted of the following:


($ in millions)
Portfolio Company	Net Realized Gain (Loss)
LTI Holdings, Inc.	$	2.6
L Squared Capital Partners LLC	2.0
BX Commercial Mortgage Trust 2020-VIVA	1.1
Other, net	0.2
Total, net	$	5.9

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

During the six months ended March 31, 2022, the Company recorded an aggregate net realized gain of $10.7 million, which consisted of the following:


($ in millions)
Portfolio Company	Net Realized Gain (Loss)
Foreign currency forward contracts	$	3.4
OmniSYS Acquisition Corporation	2.0
First Star Speir Aviation Limited	1.9
TigerConnect Inc.	1.8
Other, net	1.6
Total, net	$	10.7

During the six months ended March 31, 2021, the Company recorded an aggregate net realized gain of $14.1 million, which consisted of the following:


($ in millions)
Portfolio Company	Net Realized Gain (Loss)
PLATO Learning Inc.	$	7.8
L Squared Capital Partners LLC	3.4
LTI Holdings, Inc.	2.6
BX Commercial Mortgage Trust 2020-VIVA	2.3
ExamSoft Worldwide Inc.	0.9
California Pizza Kitchen Inc.	(1.8)
99 Cents Only Stores	(0.9)
Other, net	(0.2)
Total, net	$	14.1

Net Unrealized Appreciation or Depreciation

Net unrealized appreciation or depreciation reflects the net change in the valuation of the portfolio pursuant to the Company's valuation guidelines and the reclassification of any prior period unrealized appreciation or depreciation.

During the three months ended March 31, 2022 and 2021, the Company recorded net unrealized appreciation (depreciation) of $(27.0) million and $65.1 million, respectively. For the three months ended March 31, 2022, this consisted of $16.6 million of net unrealized depreciation on debt investments, $8.7 million of net unrealized depreciation on equity investments and $3.4 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains), partially offset by $1.7 million of net unrealized appreciation of foreign currency forward contracts. For the three months ended March 31, 2021, this consisted of $46.9 million of net unrealized appreciation on debt investments, $23.3 million of net unrealized appreciation on equity investments and $3.5 million of net unrealized appreciation of foreign currency forward contracts, partially offset by $8.6 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains).

During the six months ended March 31, 2022 and 2021, the Company recorded net unrealized appreciation (depreciation) of $(31.6) million and $112.7 million, respectively. For the six months ended March 31, 2022, this consisted of $18.9 million of net unrealized depreciation on debt investments, $7.6 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains) and $5.9 million of net unrealized depreciation on equity investments, partially offset by $0.9 million of net unrealized appreciation of foreign currency forward contracts. For the six months ended March 31, 2021, this consisted of $73.7 million of net unrealized appreciation on debt investments, $31.7 million of net unrealized appreciation on equity investments, $6.2 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $1.1 million of net unrealized appreciation of foreign currency forward contracts.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Note 9. Concentration of Credit Risks

The Company deposits its cash with financial institutions and at times such balances may be in excess of the FDIC insurance limit. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring their financial stability.

Note 10. Related Party Transactions

As of March 31, 2022 and September 30, 2021, the Company had a liability on its Consolidated Statements of Assets and Liabilities in the amount of $22.8 million and $32.6 million, respectively, reflecting the unpaid portion of the base management fees and incentive fees payable to Oaktree.

Investment Advisory Agreement

The Company is party to the Investment Advisory Agreement. Under the Investment Advisory Agreement, the Company pays Oaktree a fee for its services under the Investment Advisory Agreement consisting of two components: a base management fee and an incentive fee. The cost of both the base management fee payable to Oaktree and any incentive fees earned by Oaktree is ultimately borne by common stockholders of the Company.

From October 17, 2017 through May 3, 2020, the Company was externally managed by OCM pursuant to an investment advisory agreement. On May 4, 2020, OCM effected the novation of such investment advisory agreement to Oaktree. Immediately following such novation, the Company and Oaktree entered into a new investment advisory agreement with the same terms, including fee structure, as the investment advisory agreement with OCM. The investment advisory agreement with Oaktree was subsequently amended and restated on March 19, 2021 in connection with the closing of the Mergers. The term “Investment Advisory Agreement” refers collectively to the agreements with Oaktree and, prior to its novation, with OCM.

Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect from year-to-year if approved annually by the Board of Directors of the Company or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities, including, in either case, approval by a majority of the directors of the Company who are not interested persons. The Investment Advisory Agreement will automatically terminate in the event of its assignment. The Investment Advisory Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The Investment Advisory Agreement may also be terminated, without penalty, upon the vote of a majority of the outstanding voting securities of the Company.

Base Management Fee

Under the Investment Advisory Agreement, the base management fee is calculated at an annual rate of 1.50% of total gross assets, including any investment made with borrowings, but excluding cash and cash equivalents. The base management fee is payable quarterly in arrears and the fee for any partial month or quarter is appropriately prorated. Effective May 3, 2019, the base management fee on the Company’s gross assets, including any investments made with borrowings, but excluding any cash and cash equivalents, that exceed the product of (A) 200% and (B) the Company’s net asset value will be 1.00%. For the avoidance of doubt, the 200% will be calculated in accordance with the Investment Company Act and will give effect to exemptive relief the Company received from the SEC with respect to debentures issued by a small business investment company subsidiary. In connection with the Mergers, the Company and Oaktree entered into an amended and restated investment advisory agreement, which among other items, waived an aggregate of $6 million of base management fees otherwise payable to Oaktree in the two years following the closing of the Mergers on March 19, 2021 at a rate of $750,000 per quarter (with such amount appropriately prorated for any partial quarter).

For the three and six months ended March 31, 2022, the base management fee incurred under the Investment Advisory Agreement was $9.3 million (net of waiver) and $18.5 million (net of waiver), respectively. For the three and six months ended March 31, 2021, the base management fee incurred under the Investment Advisory Agreement was $7.0 million (net of waiver) and $13.5 million (net of waiver), respectively.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Incentive Fee

The incentive fee consists of two parts. Under the Investment Advisory Agreement, the first part of the incentive fee (the “incentive fee on income” or "Part I incentive fee") is calculated and payable quarterly in arrears based upon the “pre-incentive fee net investment income” of the Company for the immediately preceding quarter. The payment of the incentive fee on income is subject to payment of a preferred return to investors each quarter (i.e., a “hurdle rate”), expressed as a rate of return on the value of the Company’s net assets at the end of the most recently completed quarter, of 1.50%, subject to a “catch up” feature.

For this purpose, “pre-incentive fee net investment income” means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies, other than fees for providing managerial assistance) accrued during the fiscal quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as OID debt, instruments with PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. In addition, pre-incentive fee net investment income does not include any amortization or accretion of any purchase premium or purchase discount to interest income resulting solely from merger-related accounting adjustments in connection with the assets acquired in the Mergers, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in pre-incentive fee net investment income.

Under the Investment Advisory Agreement, the calculation of the incentive fee on income for each quarter is as follows:

•No incentive fee is payable to Oaktree in any quarter in which the Company’s pre-incentive fee net investment income does not exceed the preferred return rate of 1.50% (the “preferred return”) on net assets;

•100% of the Company’s pre-incentive fee net investment income, if any, that exceeds the preferred return but is less than or equal to 1.8182% in any fiscal quarter is payable to Oaktree. This portion of the incentive fee on income is referred to as the “catch-up” provision, and it is intended to provide Oaktree with an incentive fee of 17.5% on all of the Company’s pre-incentive fee net investment income when the Company’s pre-incentive fee net investment income exceeds 1.8182% on net assets in any fiscal quarter; and

•For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.8182% on net assets, the incentive fee on income is equal to 17.5% of the amount of the Company’s pre-incentive fee net investment income, as the preferred return and catch-up will have been achieved.

There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle.

For the three and six months ended March 31, 2022, the first part of the incentive fee (incentive fee on income) incurred under the Investment Advisory Agreement was $6.7 million and $13.2 million, respectively. For the three and six months ended March 31, 2021, the first part of the incentive fee (incentive fee on income) incurred under the Investment Advisory Agreement was $4.4 million and $8.6 million, respectively.

Under the Investment Advisory Agreement, the second part of the incentive fee (the "capital gains incentive fee") is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Investment Advisory Agreement, as of the termination date) commencing with the fiscal year ended September 30, 2019 and equals 17.5% of the Company’s realized capital gains, if any, on a cumulative basis from the beginning of the fiscal year ended September 30, 2019 through the end of each subsequent fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees under the Investment Advisory Agreement. Any realized capital gains, realized capital losses, unrealized capital appreciation and unrealized capital depreciation with respect to the Company’s portfolio as of the end of the fiscal year ended September 30, 2018 are excluded from the calculations of the second part of the incentive fee. In addition, the calculation of realized capital gains, realized capital losses and unrealized capital depreciation does (1) not include any such amounts resulting solely from merger-related accounting adjustments in connection with the assets acquired in the Mergers, including any premium or discount paid for the acquisition of such assets, solely to the extent that the inclusion of such merger-related accounting adjustments, in the aggregate, would result in an increase in the capital gains incentive fee and (2) include any such amounts associated with the investments acquired in the Mergers for the period from October 1, 2018 to the date of closing of the Mergers, solely to the extent that the exclusion of such amounts, in the aggregate, would result in an increase in the capital gains incentive fee. As of March 31, 2022, the Company paid $9.6 million of capital gains incentive fees cumulatively under the Investment Advisory

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Agreement (net of waivers). For the three and six months ended March 31, 2022, the Company did not incur any capital gains incentive fees under the Investment Advisory Agreement.

GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized on a theoretical "liquidation basis." A fee so calculated and accrued would not be payable under applicable law and may never be paid based upon the computation of capital gains incentive fees in subsequent periods. Amounts ultimately paid under the Investment Advisory Agreement will be consistent with the formula reflected in the Investment Advisory Agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the capital gains incentive fee plus the aggregate cumulative unrealized capital appreciation. Any realized capital gains and losses and cumulative unrealized capital appreciation and depreciation with respect to the Company’s portfolio as of the end of the fiscal year ended September 30, 2018 are excluded from the GAAP accrual. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 17.5% of such cumulative amount, less the aggregate amount of actual capital gains incentive fees payable or capital gains incentive fees accrued under GAAP in all prior periods. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reversal of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future or any accrued capital gains incentive fee will become payable under the Investment Advisory Agreement. For the three and six months ended March 31, 2022, $3.7 million and $2.0 million of accrued capital gains incentive fees were reversed. respectively. For the three and six months ended March 31, 2021, $3.6 million and $13.1 million of accrued capital gains incentive fees were expensed, respectively. As of March 31, 2022, the total accrued capital gains incentive fee liability was $6.8 million. Part II incentive fees are contractually calculated and paid at the end of the fiscal year in accordance with the Investment Advisory Agreement, which, as described above, differs from Part II incentive fees accrued under GAAP. Hypothetically, if Part II incentive fees were calculated as of March 31, 2022 under the Investment Advisory Agreement, the amount payable would have been $0.6 million.

Indemnification

The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, Oaktree and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any other person or entity affiliated with it, are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) arising from the rendering of Oaktree's services under the Investment Advisory Agreement or otherwise as investment adviser.

Administrative Services

The Company is party to the Administration Agreement with Oaktree Administrator. Pursuant to the Administration Agreement, Oaktree Administrator provides administrative services to the Company necessary for the operations of the Company, which include providing office facilities, equipment, clerical, bookkeeping and record keeping services at such facilities and such other services as Oaktree Administrator, subject to review by the Company’s Board of Directors, shall from time to time deem to be necessary or useful to perform its obligations under the Administration Agreement. Oaktree Administrator may, on behalf of the Company, conduct relations and negotiate agreements with custodians, trustees, depositories, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. Oaktree Administrator makes reports to the Company’s Board of Directors of its performance of obligations under the Administration Agreement and furnishes advice and recommendations with respect to such other aspects of the Company’s business and affairs, in each case, as it shall determine to be desirable or as reasonably required by the Company’s Board of Directors; provided that Oaktree Administrator shall not provide any investment advice or recommendation.

Oaktree Administrator also provides portfolio collection functions for interest income, fees and warrants and is responsible for the financial and other records that the Company is required to maintain and prepares, prints and disseminates reports to the Company’s stockholders and all other materials filed with the SEC. In addition, Oaktree Administrator assists the Company in determining and publishing the Company’s net asset value, overseeing the preparation and filing of the Company’s tax returns, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Oaktree Administrator may also offer to provide, on the Company’s behalf, managerial assistance to the Company’s portfolio companies.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

For providing these services, facilities and personnel, the Company reimburses Oaktree Administrator the allocable portion of overhead and other expenses incurred by Oaktree Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the rent of the Company’s principal executive offices (which are located in a building owned by a Brookfield affiliate) at market rates and the Company’s allocable portion of the costs of compensation and related expenses of its Chief Financial Officer, Chief Compliance Officer, their staffs and other non-investment professionals at Oaktree that perform duties for the Company. Such reimbursement is at cost, with no profit to, or markup by, Oaktree Administrator. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other. The Administration Agreement may also be terminated, without penalty, upon the vote of a majority of the Company’s outstanding voting securities.

For the three months ended March 31, 2022 and 2021, the Company accrued administrative expenses of $0.4 million and $0.3 million, respectively, including $0.1 million and $0.1 million of general and administrative expenses, respectively. For the six months ended March 31, 2022 and 2021, the Company accrued administrative expenses of $0.9 million and $0.7 million, respectively, including $0.2 million and $0.1 million of general and administrative expenses, respectively.

As of March 31, 2022 and September 30, 2021, $3.2 million and $4.4 million, respectively, was included in “Due to affiliate” in the Consolidated Statements of Assets and Liabilities, reflecting the unpaid portion of administrative expenses and other reimbursable expenses payable to Oaktree Administrator.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Note 11. Financial Highlights


(Share amounts in thousands)	Three months ended March 31, 2022	Three months ended March 31, 2021	Six months ended March 31, 2022	Six months ended March 31, 2021
Net asset value per share at beginning of period	$7.34	$6.85	$7.28	$6.49
Net investment income (1)	0.22	0.12	0.40	0.20
Net unrealized appreciation (depreciation) (1)	(0.15)	0.40	(0.17)	0.73
Net realized gains (losses) (1)	0.01	0.04	0.06	0.10
(Provision) benefit for taxes on realized and unrealized gains (losses) (1)	—	(0.01)	0.01	(0.01)
Distributions of net investment income to stockholders	(0.16)	(0.12)	(0.32)	(0.23)
Issuance of common stock	—	(0.19)	—	(0.19)
Net asset value per share at end of period	7.26	7.09	7.26	7.09
Per share market value at beginning of period	$7.46	$5.57	$7.06	$4.84
Per share market value at end of period	7.37	6.20	7.37	6.20
Total return (2)	0.95%	13.44%	8.94%	33.11%
Common shares outstanding at beginning of period	180,469	140,961	180,361	140,961
Common shares outstanding at end of period	183,205	180,361	183,205	180,361
Net assets at beginning of period	$1,325,061	$964,917	$1,312,823	$914,879
Net assets at end of period	$1,330,376	$1,278,823	$1,330,376	$1,278,823
Average net assets (3)	$1,335,113	$1,040,838	$1,331,484	$992,644
Ratio of net investment income to average net assets (4)	12.18%	7.06%	10.90%	5.68%
Ratio of total expenses to average net assets (4)	7.58%	9.33%	8.29%	10.53%
Ratio of net expenses to average net assets (4)	7.35%	9.28%	8.06%	10.51%
Ratio of portfolio turnover to average investments at fair value	6.93%	12.69%	16.03%	22.91%
Weighted average outstanding debt (5)	$1,374,167	$810,738	$1,352,418	$756,399
Average debt per share (1)	$7.57	$5.53	$7.47	$5.26
Asset coverage ratio at end of period (6)	193.12%	214.28%	193.12%	214.28%

__________


(1)			Calculated based upon weighted average shares outstanding for the period.
(2)			Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP. Total return does not include sales load.
(3)			Calculated based upon the weighted average net assets for the period.
(4)			Interim periods are annualized.
(5)			Calculated based upon the weighted average of principal debt outstanding for the period.
(6)			Based on outstanding senior securities of $1,395.0 million and $1,114.8 million as of March 31, 2022 and 2021, respectively.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Note 12. Derivative Instruments

The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement (the "ISDA Master Agreement") with its derivative counterparty, JPMorgan Chase Bank, N.A. The ISDA Master Agreement permits a single net payment in the event of a default or similar event. As of March 31, 2022, no cash collateral has been pledged to cover obligations and no cash collateral has been received from the counterparty with respect to the Company's forward currency contracts.

In connection with the issuance of the 2027 Notes, the Company entered into an interest rate swap agreement with the Royal Bank of Canada pursuant to an ISDA Master Agreement. As of March 31, 2022, the Company paid $25.1 million to the Royal Bank of Canada to cover collateral obligations under the terms of the interest swap agreement, which is included in due from broker on the Consolidated Statement of Assets and Liabilities.

Certain information related to the Company’s foreign currency forward contracts is presented below as of March 31, 2022.


Description	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Balance Sheet Location of Net Amounts
Foreign currency forward contract	$	49,897	€	43,643	5/12/2022	$	1,270	$	—	Derivative asset
Foreign currency forward contract	$	54,292	£	40,109	5/12/2022	$	1,494	$	—	Derivative asset
						$	2,764	$	—

Certain information related to the Company’s foreign currency forward contracts is presented below as of September 30, 2021.


Description	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Balance Sheet Location of Net Amounts
Foreign currency forward contract	$	52,186	£	37,709	11/12/2021	$	1,339	$	—	Derivative asset
Foreign currency forward contract	$	46,663	€	39,736	11/12/2021	$	573	$	—	Derivative asset
						$	1,912	$	—

Certain information related to the Company’s interest rate swap is presented below as of March 31, 2022.


Description	Notional Amount		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Balance Sheet Location of Net Amounts
Interest rate swap	$	350,000	1/15/2027	$	—	$	23,272	Derivative liability
				$	—	$	23,272

Certain information related to the Company’s interest rate swap is presented below as of September 30, 2021.


Description	Notional Amount		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Balance Sheet Location of Net Amounts
Interest rate swap	$	350,000	1/15/2027	$	—	$	2,108	Derivative liability
				$	—	$	2,108

Note 13. Commitments and Contingencies

Off-Balance Sheet Arrangements

The Company may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its portfolio companies. As of March 31, 2022, the Company's only off-balance sheet arrangements

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

consisted of $243.8 million of unfunded commitments, which was comprised of $194.8 million to provide debt and equity financing to certain of its portfolio companies and $49.0 million to provide financing to the JVs. As of September 30, 2021, the Company's only off-balance sheet arrangements consisted of $264.9 million of unfunded commitments, which was comprised of $212.4 million to provide debt and equity financing to certain of its portfolio companies, $49.0 million to provide financing to the JVs and $3.5 million related to unfunded limited partnership interests. Such commitments are subject to the portfolio companies' satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Statements of Assets and Liabilities.

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

A list of unfunded commitments by investment (consisting of revolvers, term loans with delayed draw components, subordinated notes and LLC equity interests in the JVs, preferred stock and limited partnership interests) as of March 31, 2022 and September 30, 2021 is shown in the table below:


	March 31, 2022		September 30, 2021
Fairbridge Strategic Capital Funding LLC	$	42,850	$	—
Senior Loan Fund JV I, LLC	35,000		35,000
Athenex, Inc.	21,072		21,072
OCSI Glick JV LLC	13,998		13,998
Marinus Pharmaceuticals, Inc.	11,468		18,349
Dominion Diagnostics, LLC	11,148		11,148
Latam Airlines Group S.A.	9,911		7,267
BAART Programs, Inc.	9,561		3,583
MRI Software LLC	6,800		2,699
Innocoll Pharmaceuticals Limited	6,292		—
NeuAG, LLC	5,441		5,441
RumbleOn, Inc.	4,823		16,301
Ardonagh Midco 3 PLC	4,372		14,892
Mindbody, Inc.	4,000		4,000
OTG Management, LLC	3,789		3,789
PFNY Holdings, LLC	3,755		—
Accupac, Inc.	3,675		3,267
Mesoblast, Inc.	3,553		—
Pluralsight, LLC	3,532		3,532
Assembled Brands Capital LLC	3,527		24,868
Dialyze Holdings, LLC	3,431		3,431
Spanx, LLC	3,092		—
Thrasio, LLC	2,578		2,578
PRGX Global, Inc.	2,518		2,518
Liquid Environmental Solutions Corporation	2,324		—
MHE Intermediate Holdings, LLC	2,277		3,466
Acquia Inc.	2,240		2,061
Relativity ODA LLC	2,218		2,218
CorEvitas, LLC	1,831		3,235
Telestream Holdings Corporation	1,759		1,266
Tahoe Bidco B.V.	1,741		—
LSL Holdco, LLC	1,710		—
Berner Food & Beverage, LLC	1,671		2,475
Apptio, Inc.	1,338		1,338
Coyote Buyer, LLC	1,333		1,333
Kings Buyer, LLC	1,208		—
Digital.AI Software Holdings, Inc.	718		898
109 Montgomery Owner LLC	688		937
GKD Index Partners, LLC	320		320
Thermacell Repellents, Inc.	229		833
The Avery	29		1,850
Gulf Operating, LLC	—		10,064
Coty Inc.	—		9,886
Sunland Asphalt & Construction, LLC	—		6,492
Olaplex, Inc.	—		4,806
Pingora MSR Opportunity Fund I-A, LP	—		3,500
SIO2 Medical Products, Inc.	—		3,406
SumUp Holdings Luxembourg S.À.R.L.	—		3,350
4 Over International, LLC	—		2,300
Ministry Brands, LLC	—		1,100
CircusTrix Holdings, LLC	—		37
Total	$	243,820	$	264,904

OAKTREE SPECIALTY LENDING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Note 14. Subsequent Events

The Company’s management evaluated subsequent events through the date of issuance of the Consolidated Financial Statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the Consolidated Financial Statements as of and for the three months ended March 31, 2022, except as discussed below.

Distribution Declaration

On April 29, 2022, the Company’s Board of Directors declared a quarterly distribution of $0.165 per share, payable in cash on June 30, 2022 to stockholders of record on June 15, 2022.

Schedule 12-14

Oaktree Specialty Lending Corporation

Schedule of Investments in and Advances to Affiliates

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Six months ended March 31, 2022

(unaudited)


Portfolio Company/Type of Investment (1)	Cash Interest Rate		Industry	Principal		Net Realized Gain (Loss)		Amount of Interest, Fees or Dividends Credited in Income (2)		Fair Value as of October 1, 2021		Gross Additions (3)		Gross Reductions (4)		Fair Value as of March 31, 2022		% of Total Net Assets
Control Investments
C5 Technology Holdings, LLC			Data Processing & Outsourced Services
829 Common Units						$	—	$	—	$	—	$	—	$	—	$	—	—	%
34,984,460.37 Preferred Units						—		—		27,638		—		—		27,638		2.1	%
Dominion Diagnostics, LLC			Health Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/2024	6.01	%		$	23,201	—		790		27,381		—		(4,180)		23,201		1.7	%
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024				—		—		28		—		—		—		—		—	%
30,030.8 Common Units in DD Healthcare Services Holdings, LLC						—		3,308		18,065		—		(6,953)		11,112		0.8	%
First Star Speir Aviation Limited (5)			Airlines
First Lien Term Loan, 9.00% cash due 12/15/2025				—		7,500		—		7,500		—		(7,500)		—		—	%
100% equity interest						(5,632)		158		698		—		(698)		—		—	%
OCSI Glick JV LLC (6)			Multi-Sector Holdings
Subordinated Debt, LIBOR+4.50% cash due 10/20/2028	4.60	%		60,887		—		2,128		55,582		890		(823)		55,649		4.2	%
87.5% equity interest						—		—		—		—		—		—		—	%
Senior Loan Fund JV I, LLC (7)			Multi-Sector Holdings
Subordinated Debt, LIBOR+7.00% cash due 12/29/2028	8.00	%		96,250		—		3,893		96,250		—		—		96,250		7.2	%
87.5% LLC equity interest						—		1,151		37,651		—		(921)		36,730		2.8	%
Total Control Investments				$	180,338	$	1,868	$	11,456	$	270,765	$	890	$	(21,075)	$	250,580	18.8	%

Affiliate Investments
Assembled Brands Capital LLC			Specialized Finance
First Lien Revolver, LIBOR+6.75% cash due 10/17/2023	7.76	%		$	18,242	$	—	$	710	$	15,712	$	7,594	$	(5,368)	$	17,938	1.3	%
1,609,201 Class A Units						—		—		587		—		(185)		402		—	%
1,019,168.80 Preferred Units, 6%						—		—		1,152		30		—		1,182		0.1	%
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029						—		—		—		—		—		—		—	%
Caregiver Services, Inc.			Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%				—		—		—		838		—		(116)		722		0.1	%
Total Affiliate Investments				$	18,242	$	—	$	710	$	18,289	$	7,624	$	(5,669)	$	20,244	1.5	%
Total Control & Affiliate Investments				$	198,580	$	1,868	$	12,166	$	289,054	$	8,514	$	(26,744)	$	270,824	20.3	%

This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial Statements.

______________________

(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments .

(2)Represents the total amount of interest (net of non-accrual amounts), fees and dividends credited to income for the portion of the period an investment was included in the Control or Affiliate categories.

(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest (net of non-accrual amounts) and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.

(4)Gross reductions include decreases in the cost basis of investments resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.

(5)First Star Speir Aviation Limited is a wholly-owned holding company formed by the Company in order to facilitate its investment strategy. In accordance with ASU 2013-08, the Company has deemed the holding company to be an investment company under GAAP and therefore deemed it appropriate to consolidate the financial results and financial position of the holding company and to recognize dividend income versus a combination of interest income and dividend income. Accordingly, the debt and equity investments in the wholly-owned holding company are disregarded for accounting purposes since the economic substance of these instruments are equity investments in the operating entities.

(6)Together with GF Equity Funding, the Company co-invests through Glick JV. Glick JV is capitalized as transactions are completed and all portfolio and investment decisions in respect to Glick JV must be approved by the Glick JV investment committee consisting of representatives of the Company and GF Equity Funding (with approval from a representative of each required).

(7)Together with Kemper, the Company co-invests through SLF JV I. SLF JV I is capitalized as transactions are completed and all portfolio and investment decisions in respect to SLF JV I must be approved by the SLF JV I investment committee consisting of representatives of the Company and Kemper (with approval from a representative of each required).

Schedule 12-14

Oaktree Specialty Lending Corporation

Schedule of Investments in and Advances to Affiliates

(in thousands, except share and per share amounts, percentages and as otherwise indicated)

Six months ended March 31, 2021

(unaudited)


Portfolio Company/Type of Investment (1)	Cash Interest Rate		Industry	Principal		Net Realized Gain (Loss)		Amount of Interest, Fees or Dividends Credited in Income (2)		Fair Value as of October 1, 2020		Gross Additions (3)		Gross Reductions (4)		Fair Value as of March 31, 2021		% of Total Net Assets
Control Investments
C5 Technology Holdings, LLC			Data Processing & Outsourced Services
829 Common Units						$	—	$	—	$	—	$	—	$	—	$	—	—	%
34,984,460.37 Preferred Units						—		—		27,638		—		—		27,638		2.2	%
Dominion Diagnostics, LLC			Health Care Services
First Lien Term Loan, LIBOR+5.00% cash due 2/28/2024	6.00	%		$	27,520	—		863		27,660		—		(140)		27,520		2.2	%
First Lien Revolver, LIBOR+5.00% cash due 2/28/2024	6.00	%		3,518		—		224		5,260		2,439		(4,181)		3,518		0.3	%
30,030.8 Common Units in DD Healthcare Services Holdings, LLC						—		—		7,667		10,399		—		18,066		1.4	%

First Star Speir Aviation Limited (5)			Airlines
First Lien Term Loan, 9.00% cash due 12/15/2025				7,500		—		339		11,510		—		(4,010)		7,500		0.6	%
100% equity interest						—		—		1,622		1,013		(2,153)		482		—	%
New IPT, Inc.			Oil & Gas Equipment & Services
First Lien Term Loan, LIBOR+5.00% cash due 3/17/2021				—		—		42		1,800		504		(2,304)		—		—	%
First Lien Revolver, LIBOR+5.00% cash due 3/17/2021				—		—		17		788		221		(1,009)		—		—	%
50.087 Class A Common Units in New IPT Holdings, LLC						—		—		—		—		—		—		—	%
OCSI Glick JV LLC (6)			Multi-Sector Holdings
Subordinated Debt, LIBOR+4.50% cash due 10/20/2028	4.64	%		62,821		—		130		—		54,614		—		54,614		4.3	%
87.5% equity interest						—		—		—		—		—		—		—	%
Senior Loan Fund JV I, LLC (7)			Multi-Sector Holdings
Subordinated Debt, LIBOR+7.00% cash due 12/29/2028	7.14	%		96,250		—		3,474		96,250		—		—		96,250		7.4	%
87.5% LLC equity interest						—		—		21,190		12,974		—		34,164		2.7	%
Total Control Investments				$	197,609	$	—	$	5,089	$	201,385	$	82,164	$	(13,797)	$	269,752	21.1	%

Affiliate Investments
Assembled Brands Capital LLC			Specialized Finance
First Lien Revolver, LIBOR+6.00% cash due 10/17/2023	7.00	%		$	9,274	$	—	$	258	$	4,194	$	5,264	$	(510)	$	8,948	0.8	%
1,609,201 Class A Units						—		—		483		145		—		628		—	%
1,019,168.80 Preferred Units, 6%						—		—		1,091		30		—		1,121		0.1	%
70,424.5641 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029						—		—		—		—		—		—		—	%
Caregiver Services, Inc.			Health Care Services
1,080,399 shares of Series A Preferred Stock, 10%				—		—		—		741		—		(238)		503		—	%
Total Affiliate Investments				$	9,274	$	—	$	258	$	6,509	$	5,439	$	(748)	$	11,200	0.9	%
Total Control & Affiliate Investments				$	206,883	$	—	$	5,347	$	207,894	$	87,603	$	(14,545)	$	280,952	22.0	%

______________________

(1)The principal amount and ownership detail are shown in the Company's Consolidated Schedules of Investments included in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2021.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in connection with our Consolidated Financial Statements and the notes thereto included elsewhere in this quarterly report on Form 10-Q.

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:

•our future operating results and distribution projections;

•the ability of Oaktree Fund Advisors, LLC, or Oaktree, to reposition our portfolio and to implement Oaktree's future plans with respect to our business;

•the ability of Oaktree and its affiliates to attract and retain highly talented professionals;

•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 quarterly report on Form 10-Q 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 “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2021 and elsewhere in this quarterly report on Form 10-Q.

Other factors that could cause actual results to differ materially include:

•changes or potential disruptions in our operations, the economy, financial markets or political environment;

•risks associated with possible disruption in our operations or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine), natural disasters or the COVID-19 pandemic;

•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, or RICs;

•general considerations associated with the COVID-19 pandemic;

•the ability to realize the anticipated benefits of the Mergers (as defined below); 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 quarterly report on Form 10-Q on information available to us on the date of this quarterly report, 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 Securities and Exchange Commission, or the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

All dollar amounts in tables are in thousands, except share and per share amounts and as otherwise indicated.

Business Overview

We are a specialty finance company dedicated to providing customized, one-stop credit solutions to companies with limited access to public or syndicated capital markets. We are a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a Business Development Company under the Investment Company Act of 1940, as amended, or the Investment Company Act. In addition, we have qualified and elected to be treated as a RIC under the Internal Revenue Code of 1986, as amended, or the Code, for U.S. federal income tax purposes.

We are externally managed by Oaktree pursuant to an investment advisory agreement, as amended from time to time, or the Investment Advisory Agreement. Oaktree Administrator, an affiliate of Oaktree, provides certain administrative and other

services necessary for us to operate pursuant to an administration agreement, as amended from time to time, or the Administration Agreement.

Our investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds, preferred equity and certain equity co-investments. We may also seek to generate capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions. Our portfolio may also include certain structured finance and other non-traditional structures. We invest in companies that typically possess resilient business models with strong underlying fundamentals. We intend to deploy capital across credit and economic cycles with a focus on long-term results, which we believe will enable us to build lasting partnerships with financial sponsors and management teams, and we may seek to opportunistically take advantage of dislocations in the financial markets and other situations that may benefit from Oaktree’s credit and structuring expertise, including during the COVID-19 pandemic. Sponsors may include financial sponsors, such as an institutional investor or a private equity firm, or a strategic entity seeking to invest in a portfolio company. Oaktree is generally focused on middle-market companies, which we define as companies with enterprise values of between $100 million and $750 million. We generally invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “high yield” and “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

In the current market environment, Oaktree intends to focus on the following areas, in which Oaktree believes there is less competition and thus potential for greater returns, for our new investment opportunities: (1) situational lending, which we define to include directly originated loans to non-sponsor companies that are hard to understand and value using traditional underwriting techniques, (2) select sponsor lending, which we define to include financing to support leveraged buyouts of companies with specialized sponsors that have expertise in certain industries, and (3) stressed sector and rescue lending, which we define to include opportunistic private loans in industries experiencing stress or limited access to capital.

Oaktree intends to continue to rotate our portfolio into investments that are better aligned with Oaktree's overall approach to credit investing and that it believes have the potential to generate attractive returns across market cycles (which we call "core investments"). Oaktree has performed a comprehensive review of our portfolio and categorized our portfolio into core investments, non-core performing investments and underperforming investments. Certain additional information on such categorization and our portfolio composition is included in investor presentations that we file with the SEC. Since an Oaktree affiliate became our investment adviser in October 2017, Oaktree and its affiliates have reduced the investments identified as non-core by approximately $800 million at fair value. Over time, Oaktree intends to rotate us out of the remaining non-core investments, which were approximately $86 million at fair value as of March 31, 2022. Oaktree periodically reviews designations of investments as core and non-core and may change such designations over time.

On March 19, 2021, we acquired Oaktree Strategic Income Corporation, or OCSI, pursuant to the Merger Agreement, dated as of October 28, 2020, by and among OCSI, us, Lion Merger Sub, Inc., our wholly-owned subsidiary, or Merger Sub, and, solely for the limited purposes set forth therein, Oaktree. Pursuant to the Merger Agreement, Merger Sub was first merged with and into OCSI, with OCSI as the surviving corporation, or the Merger, and, immediately following the Merger, OCSI was then merged with and into us, with us as the surviving company or together with the Merger, or the Mergers. In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of OCSI’s common stock was converted into the right to receive 1.3371 shares of our common stock (with OCSI’s stockholders receiving cash in lieu of fractional shares of our common stock). As a result of the Mergers, we issued an aggregate of 39,400,011 shares of our common stock to former OCSI stockholders.

Business Environment and Developments

Global financial markets have experienced an increase in volatility as concerns about the impact of higher inflation, rising interest rates, the current conflict in Ukraine and the ongoing uncertainty related to the COVID-19 pandemic have weighed on market participants. The current conflict in Ukraine and the ongoing uncertainty related to the COVID-19 pandemic have created significant disruptions in supply chains and economic activity and have had a particularly adverse impact on certain companies in the energy, raw materials, transportation, hospitality, tourism and entertainment industries, among others. These uncertainties can ultimately impact the overall supply and demand of the market through changing spreads, deal terms and structures and equity purchase price multiples.

We are unable to predict the full effects of these macroeconomic events or how long any further market disruptions or volatility might last. We continue to closely monitor the impact these events have on our business, industry and portfolio companies and will provide constructive solutions where necessary.

Against this uncertain macroeconomic backdrop, we believe attractive risk-adjusted returns can be achieved by making loans to middle market companies that typically possess resilient business models with strong underlying fundamentals. Given the breadth of the investment platform and decades of credit investing experience of Oaktree and its affiliates, we believe that we have the resources and experience to source, diligence and structure investments in these companies and are well placed to generate attractive returns for investors.

As of March 31, 2022, 89.0% of our debt investment portfolio (at fair value) and 89.0% of our debt investment portfolio (at cost) bore interest at floating rates. Most of our floating rate loans are indexed to the LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly or monthly at the borrower’s option. Certain loans may also be indexed to the Secured Overnight Financing Rate, or SOFR, a new index calculated by short-term repurchase agreements, backed by Treasury securities, or the Sterling Overnight Index Average, or SONIA, an alternative reference rate that is based on transactions. In July 2017, the head of the United Kingdom Financial Conduct Authority, or the FCA, announced the desire to phase out the use of LIBOR by the end of 2021. However, in March 2021 the FCA announced that most U.S. dollar LIBOR would continue to be published through June 30, 2023 effectively extending the LIBOR transition period to June 30, 2023. However, the FCA no longer compels panel banks to continue to contribute to LIBOR and the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have encouraged banks to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate no later than December 31, 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, supports replacing U.S.-dollar LIBOR with SOFR. Although there have been issuances utilizing SOFR or SONIA, it is unknown whether these alternative reference rates will attain market acceptance as replacements for LIBOR. In anticipation of the cessation of LIBOR, we may need to renegotiate any credit agreements extending beyond the applicable phase out date with our prospective portfolio companies that utilize LIBOR as a factor in determining the interest rate. Certain of the loan agreements with our portfolio companies have included fallback language in the event that LIBOR becomes unavailable. This language generally provides that the administrative agent may identify a replacement reference rate, typically with the consent of (or prior consultation with) the borrower. In certain cases, the administrative agent will be required to obtain the consent of either a majority of the lenders under the facility, or the consent of each lender, prior to identifying a replacement reference rate. Certain of the loan agreements with our portfolio companies do not include any fallback language providing a mechanism for the parties to negotiate a new reference interest rate and will instead revert to the base rate in the event LIBOR ceases to exist.

Critical Accounting Estimates

Investment Valuation

We value our investments in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 820, Fair Value Measurements and Disclosures, or ASC 820, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. ASC 820 prioritizes the use of observable market prices over entity-specific inputs. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments’ complexity.

Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:

•Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.

•Level 3 — Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

If inputs used to measure fair value fall into different levels of the fair value hierarchy, an investment's level is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. This includes investment securities that are valued using "bid" and "ask" prices obtained from independent third party pricing services or directly from brokers. These investments may be classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustments for investment-specific factors or restrictions.

Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, Oaktree obtains and analyzes readily available market quotations provided by pricing vendors and brokers for all of our investments for which quotations are available. In determining the fair value of a particular investment, pricing vendors and brokers use observable market information, including both binding and non-binding indicative quotations.

We seek to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If we are unable to obtain two quotes from pricing vendors, or if the prices obtained from pricing vendors are not within our set threshold, we seek to obtain a quote directly from a broker making a market for the asset. Oaktree evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Oaktree also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, Oaktree performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process. Generally, we do not adjust any of the prices received from these sources.

If the quotations obtained from pricing vendors or brokers are determined to not be reliable or are not readily available, we value such investments using any of three different valuation techniques. The first valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The second valuation technique is an analysis of the enterprise value, or EV, of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The EV analysis is typically performed to determine (i) the value of equity investments, (ii) whether there is credit impairment for debt investments and (iii) the value for debt investments that we are deemed to control under the Investment Company Act. To estimate the EV of a portfolio company, Oaktree analyzes various factors, including the portfolio company’s historical and projected financial results, macroeconomic impacts on the company and competitive dynamics in the company’s industry. Oaktree also utilizes some or all of the following information based on the individual circumstances of the portfolio company: (i) valuations of comparable public companies, (ii) recent sales of private and public comparable companies in similar industries or having similar business or earnings characteristics, (iii) purchase prices as a multiple of their earnings or cash flow, (iv) the portfolio company’s ability to meet its forecasts and its business prospects, (v) a discounted cash flow analysis, (vi) estimated liquidation or collateral value of the portfolio company’s assets and (vii) offers from third parties to buy the portfolio company. We may probability weight potential sale outcomes with respect to a portfolio company when uncertainty exists as of the valuation date. Under the EV technique, the significant unobservable input used in the fair value measurement of our investments in debt or equity securities is the EBITDA, revenue or asset multiple, as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively. The third valuation technique is a market yield technique, which is typically performed for non-credit impaired debt investments. In the market yield technique, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk, and we consider the current contractual interest rate, the capital structure and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by us are substantially illiquid with no active transaction market, we depend on primary market data, including newly funded transactions and industry-specific market movements, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable. Under the market yield technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt securities is the market yield. Increases or decreases in the market yield may result in a lower or higher fair value measurement, respectively.

We estimate the fair value of certain privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an EV analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk-free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.

The fair value of our investments as of March 31, 2022 and September 30, 2021 was determined in good faith by our Board of Directors. Our Board of Directors has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of a portion of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and the Board of Directors may reasonably rely on that assistance. As of March 31, 2022, 89.8% of our portfolio at fair value was valued either based on market quotations, the transactions precedent approach or corroborated by independent valuation firms. However, our

Board of Directors is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to our valuation policy and a consistently applied valuation process.

Certain factors that may be considered in determining the fair value of our investments include the nature and realizable value of any collateral, the portfolio company’s earnings and its ability to make payments on its indebtedness, the markets in which the portfolio company does business, comparison to comparable publicly-traded companies, discounted cash flow and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Due to these uncertainties, our fair value determinations may cause our net asset value on a given date to materially understate or overstate the value that we may ultimately realize upon the sale of one or more of our investments.

As of March 31, 2022, we held $2,644.8 million of investments at fair value, up from $2,556.6 million held at September 30, 2021, primarily driven by new originations. As of March 31, 2022 and September 30, 2021, approximately 95.9% and 97.0%, respectively, of our total assets represented investments at fair value.

Revenue Recognition

Interest Income

Interest income, adjusted for accretion of original issue discount, or OID, is recorded on an accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations. As of each of March 31, 2022 and September 30, 2021, there were no investments on non-accrual status.

In connection with our investment in a portfolio company, we sometimes receive nominal cost equity that is valued as part of the negotiation process with the portfolio company. When we receive nominal cost equity, we allocate our cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.

PIK Interest Income

Our investments in debt securities may contain payment-in-kind, or PIK, interest provisions. PIK interest, which typically represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Our determination to cease accruing PIK interest is generally made well before our full write-down of a loan or debt security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost bases of these investments in our Consolidated Financial Statements including for purposes of computing the capital gains incentive fee payable by us to Oaktree. To maintain our status as a RIC, certain income from PIK interest may be required to be distributed to our stockholders, even though we have not yet collected the cash and may never do so.

Portfolio Composition

Our investments principally consist of loans, common and preferred equity and warrants in privately-held companies, Senior Loan Fund JV I, LLC, or SLF JV I, a joint venture through which we and Trinity Universal Insurance Company, a subsidiary of Kemper Corporation, or Kemper, co-invest in senior secured loans of middle-market companies and other corporate debt securities, and OCSI Glick JV LLC, or the Glick JV, a joint venture through which we and GF Equity Funding 2014 LLC, or GF Equity Funding, co-invest primarily in senior secured loans of middle-market companies. We refer to SLF JV I and the Glick JV collectively as the JVs. Our loans are typically secured by a first, second or subordinated lien on the assets of the portfolio company and generally have terms of up to ten years (but an expected average life of between three and four years).

During the six months ended March 31, 2022, we originated $527.8 million of investment commitments in 28 new and 18 existing portfolio companies and funded $477.0 million of investments.

During the six months ended March 31, 2022, we received $415.2 million of proceeds from prepayments, exits, other paydowns and sales and exited 20 portfolio companies.

A summary of the composition of our investment portfolio at cost and fair value as a percentage of total investments is shown in the following tables:


	March 31, 2022		September 30, 2021
Cost:
Senior secured debt	85.67	%	85.85	%
Debt investments in the JVs	5.52		5.79
Preferred equity	3.19		2.60
Subordinated debt	2.05		1.67
LLC equity interests of the JVs	1.85		1.94
Common equity and warrants	1.72		2.15
Total	100.00	%	100.00	%


	March 31, 2022		September 30, 2021
Fair value:
Senior secured debt	86.36	%	86.72	%
Debt investments in the JVs	5.74		5.94
Preferred equity	3.19		2.49
Subordinated debt	2.05		1.67
LLC equity interests of the JVs	1.39		1.47
Common equity and warrants	1.27		1.71
Total	100.00	%	100.00	%

The industry composition of our portfolio at cost and fair value as a percentage of total investments was as follows:


	March 31, 2022		September 30, 2021
Cost:
Application Software	15.35	%	14.49	%
Multi-Sector Holdings (1)	7.38		7.73
Pharmaceuticals	5.15		5.44
Data Processing & Outsourced Services	4.53		4.74
Biotechnology	4.41		4.41
Industrial Machinery	3.44		3.47
Health Care Services	3.17		3.34
Health Care Technology	2.77		0.55
Aerospace & Defense	2.68		2.66
Specialized Finance	2.65		2.70
Fertilizers & Agricultural Chemicals	2.42		2.63
Internet & Direct Marketing Retail	2.37		2.45
Construction & Engineering	2.31		2.44
Internet Services & Infrastructure	2.01		1.85
Automotive Retail	2.00		1.65
Personal Products	1.98		4.08
Home Improvement Retail	1.73		1.83
Metal & Glass Containers	1.73		0.69
Airport Services	1.60		1.64
Health Care Distributors	1.56		0.78
Leisure Facilities	1.56		0.99
Real Estate Services	1.52		1.59
Diversified Support Services	1.46		1.60
Specialty Chemicals	1.40		1.84
Oil & Gas Storage & Transportation	1.38		1.44
Health Care Supplies	1.35		1.17
Insurance Brokers	1.34		1.00
Soft Drinks	1.28		1.32
Electrical Components & Equipment	1.24		1.27
Integrated Telecommunication Services	1.11		1.85
Real Estate Operating Companies	1.09		1.08
Other Diversified Financial Services	1.08		0.63
Advertising	1.05		1.13
Oil & Gas Refining & Marketing	1.04		1.42
Movies & Entertainment	0.98		1.02
Airlines	0.97		0.88
Distributors	0.95		—
Health Care Equipment	0.90		0.93
Environmental & Facilities Services	0.74		—
Home Furnishings	0.73		0.77
Cable & Satellite	0.68		1.05
Consumer Finance	0.54		—
Systems Software	0.48		0.26
Auto Parts & Equipment	0.47		0.49
IT Consulting & Other Services	0.44		0.30
Air Freight & Logistics	0.36		0.19
Restaurants	0.35		0.37
Leisure Products	0.27		0.26
Alternative Carriers	0.21		0.26
Trading Companies & Distributors	0.20		—
Research & Consulting Services	0.20		0.29
Apparel, Accessories & Luxury Goods	0.19		0.20
Integrated Oil & Gas	0.18		0.19
Food Distributors	0.17		0.18
Apparel Retail	0.17		—
Housewares & Specialties	0.14		0.07
Diversified Banks	0.13		0.14
Technology Distributors	0.12		0.12
Construction Materials	0.09		0.09
Electronic Components	0.08		0.40
Specialized REITs	0.05		—
Education Services	0.04		0.04
Communications Equipment	0.03		—
Independent Power Producers & Energy Traders	—		0.92
Commercial Printing	—		0.78
Managed Health Care	—		0.73
Thrifts & Mortgage Finance	—		0.63
Property & Casualty Insurance	—		0.39
Food Retail	—		0.15
Total	100.00	%	100.00	%


	March 31, 2022		September 30, 2021
Fair value:
Application Software	15.44	%	14.58	%
Multi-Sector Holdings (1)	7.13		7.41
Pharmaceuticals	5.15		5.56
Biotechnology	4.46		4.44
Data Processing & Outsourced Services	4.27		4.46
Industrial Machinery	3.47		3.53
Health Care Services	2.97		3.31
Health Care Technology	2.80		0.55
Aerospace & Defense	2.74		2.72
Internet & Direct Marketing Retail	2.67		2.68
Specialized Finance	2.63		2.69
Fertilizers & Agricultural Chemicals	2.47		2.64
Construction & Engineering	2.35		2.47
Internet Services & Infrastructure	2.06		1.87
Automotive Retail	2.05		1.65
Personal Products	2.02		4.13
Home Improvement Retail	1.75		1.82
Metal & Glass Containers	1.74		0.68
Health Care Distributors	1.58		0.77
Airport Services	1.57		1.59
Real Estate Services	1.54		1.61
Leisure Facilities	1.50		0.90
Diversified Support Services	1.48		1.60
Insurance Brokers	1.41		1.08
Health Care Supplies	1.37		1.18
Specialty Chemicals	1.36		1.82
Soft Drinks	1.28		1.31
Oil & Gas Storage & Transportation	1.27		1.35
Electrical Components & Equipment	1.22		1.26
Integrated Telecommunication Services	1.17		1.94
Real Estate Operating Companies	1.12		1.11
Advertising	1.09		1.19
Oil & Gas Refining & Marketing	1.06		1.43
Other Diversified Financial Services	1.05		0.62
Movies & Entertainment	1.02		1.06
Airlines	0.98		0.96
Distributors	0.96		—
Health Care Equipment	0.90		0.93
Home Furnishings	0.74		0.77
Environmental & Facilities Services	0.74		—
Cable & Satellite	0.69		1.06
Consumer Finance	0.55		—
Systems Software	0.47		0.26
Auto Parts & Equipment	0.47		0.48
IT Consulting & Other Services	0.43		0.29
Air Freight & Logistics	0.37		0.19
Restaurants	0.35		0.37
Leisure Products	0.27		0.26
Alternative Carriers	0.22		0.27
Research & Consulting Services	0.20		0.30
Trading Companies & Distributors	0.19		—
Integrated Oil & Gas	0.19		0.19
Food Distributors	0.17		0.18
Apparel Retail	0.17		—
Housewares & Specialties	0.15		0.08
Diversified Banks	0.13		0.14
Technology Distributors	0.12		0.12
Electronic Components	0.08		0.40
Construction Materials	0.08		0.09
Specialized REITs	0.05		—
Education Services	0.04		0.04
Communications Equipment	0.03		—
Independent Power Producers & Energy Traders	—		0.92
Commercial Printing	—		0.79
Managed Health Care	—		0.74
Thrifts & Mortgage Finance	—		0.62
Property & Casualty Insurance	—		0.39
Food Retail	—		0.15
Total	100.00	%	100.00	%

___________________

(1)This industry includes our investments in the JVs and certain limited partnership interests.

The Joint Ventures

Senior Loan Fund JV I, LLC

In May 2014, we entered into a limited liability company, or LLC, agreement with Kemper to form SLF JV I. We co-invest in senior secured loans of middle-market companies and other corporate debt securities with Kemper through our investment in SLF JV I. SLF JV I is managed by a four person Board of Directors, two of whom are selected by us and two of whom are selected by Kemper. All portfolio decisions and investment decisions in respect of SLF JV I must be approved by the SLF JV I investment committee, which consists of one representative selected by us and one representative selected by Kemper (with approval from a representative of each required). Since we do not have a controlling financial interest in SLF JV I, we do not consolidate SLF JV I. SLF JV I is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act. SLF JV I is capitalized pro rata with LLC equity interests as transactions are completed and may be capitalized with additional subordinated notes issued to us and Kemper by SLF JV I. The subordinated notes issued by SLF JV I are referred to as the SLF JV I Notes. The SLF JV I Notes are senior in right of payment to SLF JV I LLC equity interests and subordinated in right of payment to SLF JV I’s secured debt.

As of March 31, 2022 and September 30, 2021, we and Kemper owned, in the aggregate, 87.5% and 12.5%, respectively, of the LLC equity interests of SLF JV I and the outstanding SLF JV I Notes. As of each of March 31, 2022 and September 30, 2021, we and Kemper had funded approximately $165.5 million to SLF JV I, of which $144.8 million was from us. As of each of March 31, 2022 and September 30, 2021, we had aggregate commitments to fund SLF JV I of $35.0 million, of which approximately $26.2 million was to fund additional SLF JV I Notes and approximately $8.8 million was to fund LLC equity interests in SLF JV I.

Both the cost and fair value of our SLF JV I Notes were $96.3 million as of each of March 31, 2022 and September 30, 2021. We earned interest income of $1.9 million and $3.9 million on the SLF JV I Notes for the three and six months ended March 31, 2022, respectively. We earned interest income of $1.7 million and $3.5 million on the SLF JV I Notes for the three and six months ended March 31, 2021, respectively. As of March 31, 2022, the SLF JV I Notes bore interest at a rate of one-month LIBOR plus 7.00% per annum with a LIBOR floor of 1.00% and will mature on December 29, 2028.

The cost and fair value of the LLC equity interests in SLF JV I held by us was $49.3 million and $36.7 million, respectively, as of March 31, 2022, and $49.3 million and $37.7 million, respectively, as of September 30, 2021. We earned $0.7 million and $1.2 million in dividend income for the three and six months ended March 31, 2022, respectively, with respect to our investment in the LLC equity interests of SLF JV I. We did not earn dividend income for the three and six months ended March 31, 2021 with respect to our investment in the LLC equity interests of SLF JV I. The LLC equity interests of SLF JV I are dividend producing to the extent SLF JV I has residual cash to be distributed on a quarterly basis.

Below is a summary of SLF JV I's portfolio as of March 31, 2022 and September 30, 2021:


	March 31, 2022	September 30, 2021
Senior secured loans (1)	$362,052	$344,196
Weighted average interest rate on senior secured loans (2)	5.86%	5.60%
Number of borrowers in SLF JV I	60	55
Largest exposure to a single borrower (1)	$9,750	$9,875
Total of five largest loan exposures to borrowers (1)	$47,621	$46,984

__________________

(1) At principal amount.

(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.

See "Note 3. Portfolio Investments" in the notes to the accompanying financial statements for more information on SLF JV I and its portfolio.

OCSI Glick JV LLC

On March 19, 2021, as a result of the consummation of the Mergers, we became party to the LLC agreement of the Glick JV. The Glick JV invests primarily in senior secured loans of middle-market companies. We co-invest in these securities with GF Equity Funding through the Glick JV. The Glick JV is managed by a four person Board of Directors, two of whom are selected by us and two of whom are selected by GF Equity Funding. All portfolio decisions and investment decisions in respect of the Glick JV must be approved by the Glick JV investment committee, consisting of one representative selected by us and one representative selected by GF Equity Funding (with approval from a representative of each required). Since we do not have a controlling financial interest in the Glick JV, we do not consolidate the Glick JV. The Glick JV is not an "eligible portfolio company" as defined in section 2(a)(46) of the Investment Company Act. The Glick JV is capitalized as transactions are completed. The members provide capital to the Glick JV in exchange for LLC equity interests, and we and GF Debt Funding 2014 LLC, or GF Debt Funding, an entity advised by affiliates of GF Equity Funding, provide capital to the Glick JV in exchange for subordinated notes issued by the Glick JV, or the Glick JV Notes. The Glick JV Notes are junior in right of payment to the repayment of temporary contributions made by us to fund investments of the Glick JV that are repaid when GF Equity Funding and GF Debt Funding make their capital contributions and fund their Glick JV Notes, respectively.

As of March 31, 2022 and September 30, 2021, we and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC equity interests, and we and GF Debt Funding owned 87.5% and 12.5%, respectively, of the Glick JV Notes. Approximately $84.0 million in aggregate commitments was funded as of each of March 31, 2022 and September 30, 2021, of which $73.5 million was from us. As of March 31, 2022 and September 30, 2021, we had commitments to fund Glick JV Notes of $78.8 million, of which $12.4 million was unfunded. As of each of March 31, 2022 and September 30, 2021, we had commitments to fund LLC equity interests in the Glick JV of $8.7 million, of which $1.6 million was unfunded.

The cost and fair value of our aggregate investment in the Glick JV was $50.6 million and $55.6 million, respectively, as of March 31, 2022. The cost and fair value of our aggregate investment in the Glick JV was $50.7 million and $55.6 million, respectively, as of September 30, 2021. For the three and six months ended March 31, 2022, our investment in the Glick JV Notes earned interest income of $1.0 million and $2.1 million, respectively. For the period from March 19, 2021 to March 31, 2021, our investment in the Glick JV Notes earned interest income of $0.1 million. We did not earn any dividend income for the three and six months ended March 31, 2022 and for the period from March 19, 2021 to March 31, 2021 with respect to our investment in the LLC equity interests of the Glick JV. The LLC equity interests of the Glick JV are income producing to the extent there is residual cash to be distributed on a quarterly basis.

Below is a summary of the Glick JV's portfolio as of March 31, 2022 and September 30, 2021:


	March 31, 2022	September 30, 2021
Senior secured loans (1)	$141,187	$126,512
Weighted average current interest rate on senior secured loans (2)	6.05%	5.86%
Number of borrowers in the Glick JV	44	37
Largest loan exposure to a single borrower (1)	$6,733	$6,907
Total of five largest loan exposures to borrowers (1)	$28,141	$28,324

__________

(1) At principal amount.

(2) Computed using the weighted average annual interest rate on accruing senior secured loans at fair value.

See "Note 3. Portfolio Investments" in the notes to the accompanying financial statements for more information on the Glick JV and its portfolio.

Discussion and Analysis of Results and Operations

Results of Operations

Net increase (decrease) in net assets resulting from operations includes net investment income, net realized gains (losses) and net unrealized appreciation (depreciation). Net investment income is the difference between our income from interest, dividends and fees and net expenses. Net realized gains (losses) is the difference between the proceeds received from dispositions of investment related assets and liabilities and their stated costs. Net unrealized appreciation (depreciation) is the net change in the fair value of our investment related assets and liabilities carried at fair value during the reporting period, including the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized.

Comparison of three and six months ended March 31, 2022 and March 31, 2021

Total Investment Income

Total investment income includes interest on our investments, fee income and dividend income.

Total investment income for the three months ended March 31, 2022 and 2021 was $64.3 million and $41.9 million, respectively. For the three months ended March 31, 2022, this amount consisted of $61.7 million of interest income from portfolio investments (which included $4.7 million of PIK interest), $1.9 million of fee income and $0.7 million of dividend income. For the three months ended March 31, 2021, this amount consisted of $39.5 million of interest income from portfolio investments (which included $3.8 million of PIK interest), $2.3 million of fee income and $0.2 million of dividend income. The increase of $22.4 million, or 53.3%, in our total investment income for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, was due primarily to (1) a $22.2 million increase in interest income, which was primarily driven by a larger investment portfolio as a result of the increase in assets resulting from the Mergers and new originations and OID accretion that resulted from merger-related accounting adjustments and (2) a $0.5 million increase in dividend income mainly driven by a dividend received from one investment that did not pay a dividend in the prior year, partially offset by a $0.4 million decrease in fee income primarily due to lower prepayment fees.

Total investment income for the six months ended March 31, 2022 and 2021 was $129.2 million and $80.1 million, respectively. For the six months ended March 31, 2022, this amount consisted of $121.8 million of interest income from portfolio investments (which included $9.3 million of PIK interest), $2.8 million of fee income and $4.6 million of dividend income. For the six months ended March 31, 2021, this amount consisted of $74.2 million of interest income from portfolio investments (which included $6.9 million of PIK interest), $5.6 million of fee income and $0.3 million of dividend income. The increase of $49.1 million, or 61.3%, in our total investment income for the six months ended March 31, 2022, as compared to the six months ended March 31, 2021, was due primarily to (1) a $47.6 million increase in interest income, which was primarily driven by a larger investment portfolio as a result of the increase in assets resulting from the Mergers and new originations and OID accretion that resulted from merger-related accounting adjustments and (2) a $4.3 million increase in dividend income mainly driven by dividends received from two investments that did not pay dividends in the prior year, partially offset by a $2.8 million decrease in fee income primarily due to lower prepayment fees.

Expenses

Net expenses (expenses net of fee waivers) for the three months ended March 31, 2022 and 2021 were $24.2 million and $23.8 million, respectively. Net expenses increased for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, by $0.4 million, or 1.6%, primarily due to (1) a $3.3 million increase in interest expense due to higher borrowings outstanding, (2) $2.4 million of higher base management fees (net of management fee waivers) primarily as a result of a larger investment portfolio and (3) a $2.3 million increase in Part I incentive fees mainly due to increased total investment income, partially offset by $7.4 million of lower accrued Part II incentive fees as a result of a reversal of previously accrued capital gains incentive fees driven by unrealized losses during the current quarter and a $0.2 million decrease in professional fees.

Net expenses (expenses net of fee waivers) for the six months ended March 31, 2022 and 2021 were $53.5 million and $52.0 million, respectively. Net expenses increased for the six months ended March 31, 2022, as compared to the six months ended March 31, 2021, by $1.5 million, or 2.9%, primarily due to (1) a $6.6 million increase in interest expense due to higher borrowings outstanding, (2) $5.0 million of higher base management fees (net of management fee waivers) primarily as a result of a larger investment portfolio, (3) a $4.6 million increase in Part I incentive fees mainly due to increased total investment income and (4) a $0.3 million increase in professional fees, partially offset by $15.1 million of lower accrued Part II incentive fees as a result of a reversal of previously accrued capital gains incentive fees driven by unrealized losses during the current period.

Net Investment Income

Primarily as a result of the $22.4 million increase in total investment income and the $0.4 million increase in net expenses, net investment income for the three months ended March 31, 2022 increased by $22.0 million compared to the three months ended March 31, 2021.

Primarily as a result of the $49.1 million increase in total investment income, the $1.5 million increase in net expenses and a $3.3 million increase in the provision for taxes on net investment income, net investment income for the six months ended March 31, 2022 increased by $44.3 million compared to the six months ended March 31, 2021.

Realized Gain (Loss)

Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of investments and foreign currency and the cost basis without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with our determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.

During the three months ended March 31, 2022 and 2021, we recorded aggregate net realized gains of $1.4 million and $5.9 million, respectively, in connection with the exits of various investments and foreign currency forward contracts. During the six months ended March 31, 2022 and 2021, we recorded aggregate net realized gains of $10.7 million and $14.1 million, respectively, in connection with the exits of various investments and foreign currency forward contracts. See “Note 8. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation” in the notes to the accompanying Consolidated Financial Statements for more details regarding investment realization events for the three and six months ended March 31, 2022 and 2021.

Net Unrealized Appreciation (Depreciation)

Net unrealized appreciation or depreciation is the net change in the fair value of our investments and foreign currency during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

During the three months ended March 31, 2022 and 2021, we recorded net unrealized appreciation (depreciation) of $(27.0) million and $65.1 million, respectively. For the three months ended March 31, 2022, this consisted of $16.6 million of net unrealized depreciation on debt investments, $8.7 million of net unrealized depreciation on equity investments and $3.4 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains), partially offset by $1.7 million of net unrealized appreciation of foreign currency forward contracts. For the three months ended March 31, 2021, this consisted of $46.9 million of net unrealized appreciation on debt investments, $23.3 million of net unrealized appreciation on equity investments and $3.5 million of net unrealized appreciation of foreign currency forward contracts, partially offset by $8.6 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains).

During the six months ended March 31, 2022 and 2021, we recorded net unrealized appreciation (depreciation) of $(31.6) million and $112.7 million, respectively. For the six months ended March 31, 2022, this consisted of $18.9 million of net unrealized depreciation on debt investments, $7.6 million of net unrealized depreciation related to exited investments (a portion of which resulted in a reclassification to realized gains) and $5.9 million of net unrealized depreciation on equity investments, partially offset by $0.9 million of net unrealized appreciation of foreign currency forward contracts. For the six months ended March 31, 2021, this consisted of $73.7 million of net unrealized appreciation on debt investments, $31.7 million of net unrealized appreciation on equity investments, $6.2 million of net unrealized appreciation related to exited investments (a portion of which resulted in a reclassification to realized losses) and $1.1 million of net unrealized appreciation of foreign currency forward contracts.

Financial Condition, Liquidity and Capital Resources

We have a number of alternatives available to fund our investment portfolio and our operations, including raising equity, increasing or refinancing debt and funding from operational cash flow. We generally expect to fund the growth of our investment portfolio through additional debt and equity capital, which may include securitizing a portion of our investments. We cannot assure you, however, that our efforts to grow our portfolio will be successful. For example, our common stock has generally traded at prices below net asset value for the past several years, and we may not be able to raise additional equity at prices below the then-current net asset value per share. We intend to continue to generate cash primarily from cash flows from operations, including interest earned, and future borrowings or equity offerings. We intend to fund our future distribution

obligations through operating cash flow or with funds obtained through future equity and debt offerings or credit facilities, as we deem appropriate.

Our primary uses of funds are investments in our targeted asset classes and cash distributions to holders of our common stock. We may also from time to time repurchase or redeem some or all of our outstanding notes. At a special meeting of our stockholders held on June 28, 2019, our stockholders approved the application of the reduced asset coverage requirements in Section 61(a)(2) of the Investment Company Act to us effective as of June 29, 2019. As a result of the reduced asset coverage requirement, we can incur $2 of debt for each $1 of equity as compared to $1 of debt for each $1 of equity. As of March 31, 2022, we had $1,395.0 million in senior securities and our asset coverage ratio was 193.1%. As of March 31, 2022, our debt to equity ratio was 1.05x. This was slightly above our target debt to equity ratio is 0.85x to 1.0x (i.e., one dollar of equity for each $0.85 to $1.00 of debt outstanding) due to the timing of certain investment purchases and repayments as of March 31, 2022. Over time, we expect to be in-line with our target debt to equity ratio.

For the six months ended March 31, 2022, we experienced a net increase in cash and cash equivalents (including restricted cash) of $10.1 million. During that period, we used $67.5 million of net cash from operating activities, primarily from funding $497.6 million of investments, $23.5 million of increase in due from broker (cash held at a broker to cover collateral obligations under the interest swap agreement) and $3.4 million of net increase in receivables from unsettled transactions, partially offset by $416.3 million of principal payments and sale proceeds received and the cash activities related to $72.4 million of net investment income. During the same period, net cash provided by financing activities was $78.4 million, primarily consisting of $115.0 million of net borrowings under the credit facilities and $19.4 million of proceeds (net of offering costs) from shares issued under the "at the market" offering, partially offset by $55.7 million of cash distributions paid to our stockholders and $0.3 million of deferred financing costs paid.

For the six months ended March 31, 2021, we experienced a net increase in cash and cash equivalents of $4.6 million. During that period, we used $113.1 million of net cash from operating activities, primarily from funding $541.5 million of investments and $17.0 million of net increase in receivables from unsettled transactions, partially offset by $398.7 million of principal payments and sale proceeds received, $20.9 million of cash acquired in the Mergers and the cash activities related to $28.1 million of net investment income. During the same period, net cash provided by financing activities was $118.1 million, primarily consisting of $160.2 million of net borrowings under the credit facilities, partially offset by $31.4 million of cash distributions paid to our stockholders, $9.3 million of repayments of secured borrowings, $1.0 million of repurchases of common stock under our dividend reinvestment plan, or DRIP, and $0.4 million of deferred financing costs paid.

As of March 31, 2022, we had $41.8 million in cash and cash equivalents (including $2.4 million of restricted cash), portfolio investments (at fair value) of $2.6 billion, $17.3 million of interest, dividends and fees receivable, $455.0 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $3.5 million of net receivables from unsettled transactions, $745.0 million of borrowings outstanding under our credit facilities and $618.7 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).

As of September 30, 2021, we had $31.6 million in cash and cash equivalents (including $2.3 million of restricted cash), portfolio investments (at fair value) of $2.6 billion, $22.1 million of interest, dividends and fees receivable, $470.0 million of undrawn capacity on our credit facilities (subject to borrowing base and other limitations), $0.1 million of net receivables from unsettled transactions, $630.0 million of borrowings outstanding under our credit facilities and $638.7 million of unsecured notes payable (net of unamortized financing costs, unaccreted discount and interest rate swap fair value adjustment).

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of March 31, 2022, our only off-balance sheet arrangements consisted of $243.8 million of unfunded commitments, which was comprised of $194.8 million to provide debt and equity financing to certain of our portfolio companies and $49.0 million to provide financing to the JVs. As of September 30, 2021, our only off-balance sheet arrangements consisted of $264.9 million of unfunded commitments, which was comprised of $212.4 million to provide debt and equity financing to certain of our portfolio companies, $49.0 million to provide financing to the JVs and $3.5 million related to unfunded limited partnership interests. Such commitments are subject to our portfolio companies' satisfaction of

certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in our Consolidated Statements of Assets and Liabilities.

As of March 31, 2022, we have analyzed cash and cash equivalents, availability under our credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believe our liquidity and capital resources are sufficient to take advantage of market opportunities in the current economic climate.

Contractual Obligations

The following table reflects information pertaining to our principal debt outstanding under the Syndicated Facility (as defined below), Citibank Facility (as defined below), our 3.500% notes due 2025, or the 2025 Notes, and our 2.700% notes due 2027, or the 2027 Notes:


	Debt Outstanding as of September 30, 2021		Debt Outstanding as of March 31, 2022		Weighted average debt outstanding for the six months ended March 31, 2022		Maximum debt outstanding for the six months ended March 31, 2022
Syndicated Facility	$	495,000	$	560,000	$	545,989	$	620,000
Citibank Facility	135,000		185,000		156,429		185,000
2025 Notes	300,000		300,000		300,000		300,000
2027 Notes	350,000		350,000		350,000		350,000
Total debt	$	1,280,000	$	1,395,000	$	1,352,418

The following table reflects our contractual obligations arising from the Syndicated Facility, Citibank Facility, 2025 Notes and 2027 Notes:


	Payments due by period as of March 31, 2022
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Syndicated Facility	$	560,000	$	—	$	—	$	560,000	$	—
Interest due on Syndicated Facility	54,475		13,300		26,600		14,575		—
Citibank Facility	185,000		—		185,000		—		—
Interest due on Citibank Facility	13,149		4,984		8,165		—		—
2025 Notes	300,000		—		300,000		—		—
Interest due on 2025 Notes	30,551		10,500		20,051		—		—
2027 Notes	350,000		—		—		350,000		—
Interest due on 2027 Notes (a)	31,890		6,648		13,295		11,947		—
Total	$	1,525,065	$	35,432	$	553,111	$	936,522	$	—

__________

(a) The interest due on the 2027 Notes was calculated net of the interest rate swap.

Equity Issuances

During the three and six months ended March 31, 2022, we issued an aggregate of 104,411 and 212,382 shares of common stock as part of the DRIP. There were no common stock issuances during the six months ended March 31, 2021.

On February 7, 2022, we entered into an equity distribution agreement by and among us, Oaktree, Oaktree Administrator and Keefe, Bruyette & Woods, Inc., JMP Securities LLC, Raymond James & Associates, Inc. and SMBC Nikko Securities America, Inc., as placement agents, in connection with the issuance and sale by us of shares of common stock, having an aggregate offering price of up to $125.0 million. Sales of the common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at the market,” as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or similar securities exchanges or sales made to or through a market maker other than on an exchange, at prices related to the prevailing market prices or at negotiated prices.

In connection with the "at the market" offering, we issued and sold the following shares of common stock during the three and six months ended March 31, 2022:


	Number of Shares Issued	Gross Proceeds		Placement Agent Fees		Net Proceeds (1)		Average Sales Price per Share (2)
"At the market" offering	2,632,260	$	19,794	$	198	$	19,596	$	7.52

__________

(1) Net proceeds excludes offering costs of $0.2 million.

(2) Represents the gross sales price before deducting placement agent fees and estimated offering expenses.

Significant Capital Transactions

The following table reflects the distributions per share that we have paid, including shares issued under our DRIP, on our common stock since October 1, 2019:

Date Declared

Record Date

Payment Date

Amount
per Share

Cash
Distribution

DRIP Shares
Issued (1)

DRIP Shares
Value

November 12, 2019

December 13, 2019

December 31, 2019

0.095

$ 12.9 million

87,747

$ 0.5 million

January 31, 2020

March 13, 2020

March 31, 2020

0.095

12.9 million

157,523

0.5 million

April 30, 2020

June 15, 2020

June 30, 2020

0.095

13.0 million

87,351

0.4 million

July 31, 2020

September 15, 2020

September 30, 2020

0.105

14.3 million

102,404

0.5 million

November 13, 2020

December 15, 2020

December 31, 2020

0.11

15.0 million

93,964

0.5 million

January 29, 2021

March 15, 2021

March 31, 2021

0.12

16.4 million

81,702

0.5 million

April 30, 2021

June 15, 2021

June 30, 2021

0.13

22.9 million

76,979

0.5 million

July 30, 2021

September 15, 2021

September 30, 2021

0.145

25.5 million

85,075

0.6 million

October 13, 2021

December 15, 2021

December 31, 2021

0.155

27.2 million

107,971

0.8 million

January 28, 2022

March 15, 2022

March 31, 2022

0.16

28.5 million

104,411

0.8 million

______________

(1)Shares were purchased on the open market and distributed other than with respect to the distributions paid on December 31, 2021 and March 31, 2022. New shares were issued and distributed during the three and six months ended March 31, 2022.

Indebtedness

See “Note 6. Borrowings” in the Consolidated Financial Statements for more details regarding our indebtedness.

Syndicated Facility

As of March 31, 2022, (i) the size of our senior secured revolving credit facility, or, as amended and/or restated from time to time, the Syndicated Facility, pursuant to a senior secured revolving credit agreement, with the lenders, ING Capital LLC, as administrative agent, ING Capital LLC, JPMorgan Chase Bank, N.A., BofA Securities, Inc. and MUFG Union Bank, N.A. as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A. and Bank of America, N.A., as syndication agents, was $1.0 billion (with an “accordion” feature that permits us, under certain circumstances, to increase the size of the facility to up to the greater of $1.25 billion and our net worth (as defined in the Syndicated Facility) on the date of such increase), (ii) the period during which we may make drawings will expire on May 4, 2025 and the maturity date was May 4, 2026 and (iii) the interest rate margin for (a) LIBOR loans (which may be 1-, 2-, 3- or 6-month, at our option) was 2.00% and (b) alternate base rate loans was 1.00%.

Each loan or letter of credit originated or assumed under the Syndicated Facility is subject to the satisfaction of certain conditions. Borrowings under the Syndicated Facility are subject to the facility’s various covenants and the leverage restrictions contained in the Investment Company Act. We cannot assure you that we will be able to borrow funds under the Syndicated Facility at any particular time or at all.

The following table describes significant financial covenants, as of March 31, 2022, with which we must comply under the Syndicated Facility on a quarterly basis:

Financial Covenant

Description

Target Value

December 31, 2021 Reported Value (1)

Minimum shareholders' equity

Net assets shall not be less than the sum of (x) $600 million, plus (y) 50% of the aggregate net proceeds of all sales of equity interests after May 6, 2020

$600 million

$1,325 million

Asset coverage ratio

Asset coverage ratio shall not be less than the greater of 1.50:1 and the statutory test applicable to us

1.50:1

2.01:1

Interest coverage ratio

Interest coverage ratio shall not be less than 2.25:1

2.25:1

4.52:1

Minimum net worth

Net worth shall not be less than $550 million

$550 million

$1,172 million

___________

(1) As contractually required, we report financial covenants based on the last filed quarterly or annual report, in this case our Quarterly Report on Form 10-Q for the quarter ended December 31, 2021. We were in compliance with all financial covenants under the Syndicated Facility based on the financial information contained in this Quarterly Report on Form 10-Q.

As of March 31, 2022 and September 30, 2021, we had $560.0 million and $495.0 million of borrowings outstanding under the Syndicated Facility, respectively, which had a fair value of $560.0 million and $495.0 million, respectively. Our borrowings under the Syndicated Facility bore interest at a weighted average interest rate of 2.193% and 2.229% for the six months ended March 31, 2022 and 2021, respectively. For the three and six months ended March 31, 2022, we recorded interest expense (inclusive of fees) of $4.0 million and $7.8 million, respectively, related to the Syndicated Facility. For the three and six months ended March 31, 2021, we recorded interest expense (inclusive of fees) of $3.3 million and $6.5 million, respectively, related to the Syndicated Facility.

Citibank Facility

On March 19, 2021, as a result of the consummation of the Mergers, we became party to a revolving credit facility, or, as amended and/or restated from time to time, the Citibank Facility, with OCSL Senior Funding II LLC, our wholly-owned, special purpose financing subsidiary, as the borrower, us, as collateral manager and seller, each of the lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Wells Fargo Bank, National Association, as collateral agent and custodian. As of March 31, 2022, we were able to borrow up to $200 million under the Citibank Facility (subject to borrowing base and other limitations). As of March 31, 2022, the reinvestment period under the Citibank Facility was scheduled to expire on November 18, 2023 and the maturity date for the Citibank Facility was November 18, 2024.

As of March 31, 2022, borrowings under the Citibank Facility are subject to certain customary advance rates and accrue interest at a rate equal to LIBOR plus between 1.25% and 2.20% per annum on broadly syndicated loans, subject to observable market depth and pricing, and LIBOR plus 2.25% per annum on all other eligible loans during the reinvestment period. In addition, as of March 31, 2022, for the duration of the reinvestment period there is a non-usage fee payable of 0.50% per annum on the undrawn amount under the Citibank Facility. The minimum asset coverage ratio applicable to us under the Citibank Facility is 150% as determined in accordance with the requirements of the Investment Company Act. Borrowings under the Citibank Facility are secured by all of the assets of OCSL Senior Funding II LLC and all of our equity interests in OCSL Senior Funding II LLC. We may use the Citibank Facility to fund a portion of our loan origination activities and for general corporate purposes. Each loan origination under the Citibank Facility is subject to the satisfaction of certain conditions.

As of March 31, 2022 and September 30, 2021, we had $185.0 million and $135.0 million outstanding under the Citibank Facility, respectively, which had a fair value of $185.0 million and $135.0 million, respectively. Our borrowings under the Citibank Facility bore interest at a weighted average interest rate of 2.060% and 2.191% for the six months ended March 31, 2022 and the period from March 19, 2021 to March 31, 2021, respectively. For the three and six months ended March 31, 2022, we recorded interest expense (inclusive of fees) of $1.1 million and $1.9 million, respectively, related to the Citibank Facility. For the period from March 19, 2021 to March 31, 2021, the Company recorded interest expense (inclusive of fees) of $0.1 million related to the Citibank Facility.

2025 Notes

On February 25, 2020, we issued $300.0 million in aggregate principal amount of the 2025 Notes for net proceeds of $293.8 million after deducting OID of $2.5 million, underwriting commissions and discounts of $3.0 million and offering costs of $0.7 million. The OID on the 2025 Notes is amortized based on the effective interest method over the term of the notes.

2027 Notes

On May 18, 2021, we issued $350.0 million in aggregate principal amount of the 2027 Notes for net proceeds of $344.8 million after deducting OID of $1.0 million, underwriting commissions and discounts of $3.5 million and offering costs of $0.7 million. The OID on the 2027 Notes is amortized based on the effective interest method over the term of the notes.

In connection with the 2027 Notes, we entered into an interest rate swap to more closely align the interest rates of our liabilities with our investment portfolio, which consists of predominately floating rate loans. Under the interest rate swap agreement, we receive a fixed interest rate of 2.700% and pay a floating interest rate of the three-month LIBOR plus 1.658% on a notional amount of $350 million. We designated the interest rate swap as the hedging instrument in an effective hedge accounting relationship.

The below table presents the components of the carrying value of the 2025 Notes and the 2027 Notes as of March 31, 2022 and September 30, 2021:


	As of March 31, 2022				As of September 30, 2021
($ in millions)	2025 Notes		2027 Notes		2025 Notes		2027 Notes
Principal	$	300.0	$	350.0	$	300.0	$	350.0
Unamortized financing costs	(2.1)		(3.6)		(2.6)		(4.0)
Unaccreted discount	(1.5)		(0.8)		(1.7)		(0.9)
Interest rate swap fair value adjustment	—		(23.3)		—		(2.1)
Net carrying value	$	296.4	$	322.3	$	295.7	$	343.0
Fair Value	$	294.9	$	320.4	$	314.5	$	351.1

The below table presents the components of interest and other debt expenses related to the 2025 Notes and the 2027 Notes for the three and six months ended March 31, 2022:


($ in millions)	2025 Notes						2027 Notes
	Three months ended March 31, 2022			Six months ended March 31, 2022			Three months ended March 31, 2022			Six months ended March 31, 2022
Coupon interest	$	2.6		$	5.3		$	2.4		$	4.8
Amortization of financing costs and discount	0.3			0.6			0.2			0.4
Effect of interest rate swap	—			—			(0.7)			(1.5)
Total interest expense	$	2.9		$	5.9		$	1.9		$	3.7
Coupon interest rate (net of effect of interest rate swap for 2027 Notes)	3.500		%	3.500		%	1.877		%	1.867		%

The below table presents the components of interest and other debt expenses related to the 2025 Notes for the three and six months ended March 31, 2021:


($ in millions)	2025 Notes
	Three months ended March 31, 2021			Six months ended March 31, 2021
Coupon interest	$	2.6		$	5.3
Amortization of financing costs and discount	0.3			0.6
Total interest expense	$	2.9		$	5.9
Coupon interest rate	3.500		%	3.500		%

Regulated Investment Company Status and Distributions

We have qualified and elected to be treated as a RIC under Subchapter M of the Code for U.S. federal income tax purposes. As long as we continue to qualify as a RIC, we will not be subject to tax on our investment company taxable income

100

(determined without regard to any deduction for dividends paid) or realized net capital gains, to the extent that such taxable income or gains is distributed, or deemed to be distributed as dividends, to stockholders on a timely basis.

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation. Distributions declared and paid by us in a taxable year may differ from taxable income for that taxable year as such distributions may include the distribution of taxable income derived from the current taxable year or the distribution of taxable income derived from the prior taxable year carried forward into and distributed in the current taxable year. Distributions also may include returns of capital.

To maintain RIC tax treatment, we must, among other things, distribute dividends, with respect to each taxable year, of an amount at least equal to 90% of our investment company taxable income (i.e., our net ordinary income and our realized net short-term capital gains in excess of realized net long-term capital losses, if any), determined without regard to any deduction for dividends paid. As a RIC, we are also subject to a federal excise tax, based on distribution requirements of our taxable income on a calendar year basis. We anticipate timely distribution of our taxable income in accordance with tax rules. We did not incur a U.S. federal excise tax for calendar years 2020 and 2021 and do not expect to incur a U.S. federal excise tax for calendar year 2022. We may incur a federal excise tax in future years.

We intend to distribute at least 90% of our annual taxable income (which includes our taxable interest and fee income) to our stockholders. The covenants contained in our credit facilities may prohibit us from making distributions to our stockholders, and, as a result, could hinder our ability to satisfy the distribution requirement associated with our ability to be subject to tax as a RIC. In addition, we may retain for investment some or all of our net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) and treat such amounts as deemed distributions to our stockholders. If we do this, our stockholders will be treated as if they received actual distributions of the capital gains we retained and then reinvested the net after-tax proceeds in our common stock. Our stockholders also may be eligible to claim tax credits (or, in certain circumstances, tax refunds) equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. To the extent our taxable earnings for a fiscal and taxable year fall below the total amount of our dividend distributions for that fiscal and taxable year, a portion of those distributions may be deemed a return of capital to our stockholders.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage test for borrowings applicable to us as a Business Development Company under the Investment Company Act and due to provisions in our credit facilities and debt instruments. If we do not distribute a certain percentage of our taxable income annually, we will suffer adverse tax consequences, including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.

A RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder elects to receive his or her entire distribution in either cash or stock of the RIC, subject to certain limitations regarding the aggregate amount of cash to be distributed to all stockholders. If these and certain other requirements are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock.

We may generate qualified net interest income or qualified net short-term capital gains that may be exempt from U.S. withholding tax when distributed to foreign stockholders. A RIC is permitted to designate distributions of qualified net interest income and qualified short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. shareholders with proper documentation. The following table, which may be subject to change as we finalize our annual tax filings, lists the percentage of qualified net interest income and qualified short-term capital gains for the year ended September 30, 2021.


Year Ended	Qualified Net Interest Income		Qualified Short-Term Capital Gains
September 30, 2021	89.8	%	—

We have adopted a DRIP that provides for the reinvestment of any distributions that we declare in cash on behalf of our stockholders, unless a stockholder elects to receive cash. As a result, if our Board of Directors declares a cash distribution, then our stockholders who have not “opted out” of the DRIP will have their cash distributions automatically reinvested in additional shares of our common stock, rather than receiving a cash distribution. If our shares are trading at a premium to net asset value, we typically issue new shares to implement the DRIP, with such shares issued at the greater of the most recently computed net asset value per share of our common stock or 95% of the current market value per share of our common stock on the payment date for such distribution. If our shares are trading at a discount to net asset value, we typically purchase shares in the open market in connection with our obligations under the DRIP.

101

Related Party Transactions

We have entered into the Investment Advisory Agreement with Oaktree and the Administration Agreement with Oaktree Administrator, an affiliate of Oaktree. Mr. John B. Frank, an interested member of our Board of Directors, has an indirect pecuniary interest in Oaktree. Oaktree is a registered investment adviser under the Investment Advisers Act of 1940, as amended, that is partially and indirectly owned by Oaktree Capital Group, LLC. See “Note 10. Related Party Transactions – Investment Advisory Agreement” and “– Administrative Services” in the notes to the accompanying Consolidated Financial Statements.

Recent Developments

Distribution Declaration

On April 29, 2022, our Board of Directors declared a quarterly distribution of $0.165 per share, payable in cash on June 30, 2022 to stockholders of record on June 15, 2022.

102

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.

Valuation Risk

Our investments may not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors, with the assistance of the Audit Committee and Oaktree. There is no single standard for determining fair value in good faith and valuation methodologies involve a significant degree of management judgment. In addition, our valuation methodology utilizes discount rates in part in valuing our investments, and changes in those discount rates may have an impact on the valuation of our investments. Accordingly, valuations by us do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments. Estimated fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the financial statements.

Interest Rate Risk

We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, cash and cash equivalents and idle fund investments. Our risk management procedures are designed to identify and analyze our risk, to set appropriate policies and to continually monitor these risks. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent our debt investments include floating interest rates.

As of March 31, 2022, 89.0% of our debt investment portfolio (at fair value) and 89.0% of our debt investment portfolio (at cost) bore interest at floating rates. As of September 30, 2021, 91.5% of our debt investment portfolio (at fair value) and 91.8% of our debt investment portfolio (at cost) bore interest at floating rates. The composition of our floating rate debt investments by interest rate floor as of March 31, 2022 and September 30, 2021, was as follows:


	March 31, 2022				September 30, 2021
($ in thousands)	Fair Value		% of Floating Rate Portfolio		Fair Value		% of Floating Rate Portfolio
0%	$	311,798	14.0	%	$	322,222	14.6	%
>0% and <1%	402,613		18.2	%	283,065		12.8	%
1%	1,435,973		64.8	%	1,507,977		68.4	%
>1%	66,540		3.0	%	92,384		4.2	%
Total Floating Rate Investments	$	2,216,924	100.0	%	$	2,205,648	100.0	%

Based on our Consolidated Statement of Assets and Liabilities as of March 31, 2022, the following table shows the approximate annualized net increase (decrease) in net assets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in our investment and capital structure. However, there can be no assurances our portfolio companies will be able to meet their contractual obligations at any or all levels on increases in interest rates.


($ in thousands)
Basis point increase	Increase in Interest Income		(Increase) in Interest Expense		Net increase (decrease) in net assets resulting from operations
250	$	55,258	$	(27,375)	$	27,883
200	44,049		(21,900)		22,149
150	32,928		(16,425)		16,503
100	21,821		(10,950)		10,871
50	11,087		(5,475)		5,612

The net effect of any decrease in interest rates is limited and would not be of significance due to interest rate floors on investments and borrowings outstanding.

103

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on this review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. The following table shows a comparison of the interest rate base for our interest-bearing cash and outstanding investments, at principal, and our outstanding borrowings as of March 31, 2022 and September 30, 2021:


	March 31, 2022				September 30, 2021
($ in thousands)	Interest Bearing Cash and Investments		Borrowings		Interest Bearing Cash and Investments		Borrowings
Money market rate	$	6,229	$	—	$	23,600	$	—
Prime rate	—		—		305		10,000
LIBOR
30 day	646,125		560,000		674,613		485,000
90 day (a)	996,724		535,000		1,037,019		485,000
180 day	359,573		—		323,869		—
360 day	43,055		—		96,095		—
EURIBOR
30 day	27,636		—		28,786		—
90 day	18,816		—		19,599		—
180 day	2,185		—		18,516		—
SOFR	120,776		—		—		—
SONIA	52,848		—		—		—
Fixed rate	274,719		300,000		200,599		300,000
Total	$	2,548,686	$	1,395,000	$	2,423,001	$	1,280,000

__________

(a)Borrowings include the 2027 Notes, which pay interest at a floating rate under the terms of the interest rate swap.

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Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as of March 31, 2022, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, in timely identifying, recording, processing, summarizing and reporting any material information relating to us that is required to be disclosed in the reports we file or submit under the Exchange Act.

There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1. Legal Proceedings

We are currently not a party to any pending material legal proceedings.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2021.

Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict between Russia and Ukraine.

The global economy has been negatively impacted by the military conflict between Russia and Ukraine. Furthermore, governments in the U.S., United Kingdom, and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. We do not currently have investments in companies headquartered or that operate primarily in Russia or Ukraine. However, businesses in the United States and globally have experienced shortages in materials and increased costs for transportation, energy, and raw material due in part to the negative impact of the Russia-Ukraine military conflict on the global economy, all of which could have an indirect impact on our portfolio companies. Further escalation of geopolitical tensions related to the military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business, financial condition and results of operations and that of our portfolio companies. In addition, the effects of the ongoing conflict could heighten many of our known risks described in the Company's Annual Report on Form 10-K for the year ended September 30, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

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Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits


31.1*						Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2*						Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1*						Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

32.2*						Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).


*			Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



OAKTREE SPECIALTY LENDING CORPORATION

By:						/s/ Armen Panossian
						Armen Panossian
						Chief Executive Officer

By:						/s/ Christopher McKown
						Christopher McKown
						Chief Financial Officer and Treasurer

Date: May 4, 2022

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