OFS Credit Co 5.25% Series E Term Preferred Stock due 2026

OCCIN

CHICAGO--(BUSINESS WIRE)--OFS Credit Company, Inc. (Nasdaq: OCCI, OCCIM, OCCIN) (“OFS Credit,” the “Company,” “we,” “us” or “our”), an investment company that primarily invests in collateralized loan obligation (“CLO”) equity and debt securities, today announced the following net asset value (“NAV”) estimate at May 31, 2026. Management's unaudited estimate of the range of our NAV per share of our common stock at May 31, 2026 is between $3.56 and $3.66. This estimate is not a comprehensive state.

The market is getting skittish. Use this uncertainty to lock in double-digit yields before the next rotation. The 5-Step Crash Checklist: Stop, assess the fundamentals, check your fixed-income anchors, and deploy your "liquidity ammunition" into the highest-quality bargains. The 25% Reinvestment Rule: Use market dips to "average down" by reinvesting at least a quarter of your dividends into historically low prices.

We are always investing in uncertain times. The 10-Year Trap: High past performance is often a warning, not a green light. Diversified Resilience: A "dog-like" peace of mind comes from knowing your cash flow is from various sectors, so you never have to sell at bad prices.

The CLO Equity CEF sector has doubled in size over the past two years, driven by new entrants and favorable market conditions. Key catalysts include a benign default environment, tightening credit spreads, and the attractiveness of floating-rate assets amid a flat/inverted yield curve. CLO Equity funds benefit from embedded options like reinvestment and call options, which enhance returns during periods of market volatility.

We review the CEF market valuation and performance through the third week of April and highlight recent market action. Nearly all CEF sectors finished in the green this week, though month-to-date performance remains underwater. The median CEF sector discount has bounced off the trough, trading near the longer-term historical average, recovering close to half its April drawdown.

Our previous articles on OCCI have consistently held a bearish view due to its history of value destruction. The fund has recently hit new lows, comparable to the depths of the COVID-19 market crash. We look at the secondary securities, or puppies as we like to call them.

Collateralized loan obligation CEFs offer high yields but come with significant leverage, volatility and higher risk, making them less appropriate for all income investors. Baby bonds and preferred offerings from CLO CEFs provide safer, more stable income, balancing risk-reward when it comes to seeking income. We have new offerings in the space since our last update, leading to greater diversification potential and increasing the viability of setting up a ladder of maturities.

The yield curve is normalizing, and we aim for 8%+ yields with low downside deviation in our low-duration portfolio. OCCI has higher leverage and worse credit metrics compared to ECC and OXLC, but its preferred stock, OCCIN, offers an 8.5% YTM. Despite OCCI's lower credibility, OCCIN's low duration and yield make it a viable addition for diversification in our low-duration portfolio.

We take a look at the action in preferreds and baby bonds through the first week of October and highlight some of the key themes we are watching. Preferred stocks saw slight declines as Treasury yields rose, but year-to-date returns remain strong, outperforming REITs and BDCs. Lower-priced preferreds offer better capital gain potential and are more attractive due to lower negative convexity compared to higher-priced counterparts.

We take a look at the action in preferreds and baby bonds through the fourth week of September and highlight some of the key themes we are watching. Preferred stocks were on the week with credit spreads near their tightest level in over five years. Standard Chartered's lawsuit over transitioning from Libor to SOFR highlights opportunistic investor resistance due to differing crisis dynamics between the rates.