Welcome and thank you for joining Oaktree Specialty Lending Corporation's Third Fiscal Quarter Conference Call. Today's conference call is being recorded. At this time, all participants are in a listen-only mode. But we will be prompted for a question-and-answer session following the prepared remarks. Now, I would like to introduce Dane Kleven, Head of Investor Relations, who will host today's conference call. Mr. Kleven, you may begin.

Thank you, operator, and welcome to Oaktree Specialty Lending Corporation's third fiscal quarter conference call. Our earnings release, which we issued this morning, and the accompanying slide presentation, can be accessed on the Investors section of our website at oaktreespecialtylending.com. Joining us on the call today are Armen Panossian, Chief Executive Officer and Chief Investment Officer; Matt Pendo, President; Chris McKown, Chief Financial Officer and Treasurer. Before we begin, I want to remind you that comments on today's call include forward-looking statements, reflecting our current views with respect to our future operating results and financial performance. Our actual results could differ materially from those implied or expressed in the forward-looking statements. Please refer to our SEC filings for a discussion of these factors in further detail. We undertake no duty to update or revise any forward-looking statements. I’d also like to remind you that nothing on today’s call constitutes an offer to sell or solicitation of an offer to purchase any interest in any Oaktree Fund. Investors and others should note that Oaktree Specialty Lending uses the Investors section of its corporate website to announce material information. The company encourages investors, the media, and others to review the information that it shares on its website. With that, I would now like to turn the call over to Matt.

Thanks, Dane, and welcome, everyone. Thank you for joining us today and for your interest in and support of OCSL. Our third quarter results were highlighted by continued strong origination activity and increased coupon income from our predominantly first lien portfolio. However, adjusted NII was $0.55 per share, down slightly from $0.56 for the prior quarter, as we experienced challenges at certain portfolio investments, resulting in a decline in NAV and an increase in non-accruals. In addition, our continued rotation into primarily first lien loans reduced our weighted average portfolio spread by approximately 5 basis points in the quarter. Our first lien investments have increased from just over 76% at June 30, 2023, to approximately 82% today. At the same time, second lien and unsecured debt investments decreased from 14% to below 8% over the same period. Investments on non-accrual status at quarter end represented 3.7% and 5.7% of the debt portfolio at fair value and cost, respectively. That was up from 2.7% of the debt portfolio at fair value and 4.3% of the portfolio at cost last quarter. We reported NAV per share of $18.19, down from $18.72 per share for the prior quarter. The decline primarily reflected unrealized losses on certain debt and equity investments, including the markdowns on the aforementioned non-accrual names. We are collaborating with each company to address the unique circumstances by leveraging our extensive experience and proven success in revitalizing underperforming investments. Along with the substantial resources of Oaktree, we aim to achieve the best possible outcomes for our shareholders. As a result of these non-accruals' impact on our earnings, Oaktree, our manager, agreed to waive $3.2 million of Part 1 incentive fees for the quarter. This was on top of the $1.5 million of management fees Oaktree has been waiving each quarter since the OSI2 merger that was closed in January of last year. As a reminder, last quarter, Oaktree also instituted a permanent reduction in our base management fee. Effective July 1, the fee was reduced to 1% on gross assets from 1.5%, which will be reflected in our current fourth fiscal quarter financial results. We expect this reduction will increase OCSL's adjusted net investment income annually by approximately $12 million or $0.15 per share. We believe that these decisions are a testament to Oaktree's strong commitment to aligning our interests with shareholders and to enhancing long-term enterprise value. Now turning to our investment activity, which remained strong during the quarter, with $339 million of new investment commitments, our third consecutive quarter of commitments in excess of $300 million. We continue to find attractive opportunities across sponsor, non-sponsor, and discounted publicly traded credit investments, generating net portfolio growth for the quarter. Even as we maintain our highly selective approach to investing amid the competitive market environment. Consistent with this investment approach, our new originations were made at attractive yields with lender-friendly deal structures and terms, including lower leverage and loan to value. The weighted average yield on new originations was 11.1%, consistent with the prior quarter. Paydowns and exits in the quarter generated $186 million of proceeds, down from $323 million in the second quarter as the broader refinancing market activity has picked up this calendar year. We continue to receive steady levels of paydowns. As we have discussed previously, approximately 30% of our portfolio turned over in fiscal year 2023, and that trend has continued in the first 9 months of our current fiscal year. We believe this demonstrates the strength of the overall portfolio and our underwriting and selection process. These payoffs and paydowns validate our initial investment decision. Turning to the right-hand side of our balance sheet. As always, we maintain ample liquidity to meet funding needs. At quarter end, our net leverage ratio was 1.1 times, up modestly from the prior quarter, primarily reflecting our net portfolio growth. We had $828 million available on our credit facilities and $96 million of cash. Our Board approved a quarterly dividend of $0.55 per share, consistent with the prior quarterly distribution. With that, I would like to turn the call over to Armen to provide more color on our portfolio activity and the market environment.

Thanks, Matt, and hello to everyone. I will start by providing an overview of our portfolio activity during the quarter and finish with comments on the current market environment. With over $3 billion of fair value, our portfolio remains well diversified across 158 companies at the close of the third quarter. Our focus remains to invest at the top of the capital structure with 86% of the portfolio invested in senior secured debt and first lien positions representing 82% of the portfolio at fair value. To further mitigate risk, we focus on larger, more diversified businesses. The median portfolio company EBITDA as of the end of the third quarter was approximately $147 million, and leverage in our portfolio of companies was five times, which was roughly in line with the prior quarter and well below overall middle market leverage levels. Despite the elevated interest rate environment, our portfolio companies are performing well. The portfolio's weighted average interest coverage based on current base rates was in line with the prior quarter at 1.9 times. As Matt noted, during our third quarter, we originated $339 million of new investment commitments across 11 new and 9 existing portfolio companies. The diversity of our originations is evident in key examples from the quarter. I will start with Sorenson, the world's leading provider of communication tools for individuals that are deaf and hard of hearing. The company combines patented technology with human-centric services, connecting signed and spoken languages. This was a sponsored deal, of which Oaktree committed $417 million with 2% of original issue discounts and a coupon of SOFR plus 5.75%. OCSL was allocated $54 million of this transaction. Another example is EDS, a public company, which has an 83% equity interest in US Cellular and wholly-owned EDS Telecom. US Cellular trades on the New York Stock Exchange and has an approximate market capitalization of $4.6 billion and is the fifth largest US wireless company. EDS Telecom is the seventh largest U.S. incumbent local exchange carrier, which offers broadband, video, and voice in rural areas across 32 states. Oaktree invested $300 million in a term loan priced at SOFR plus 7% with 3% of the original issue discount and a $75 million delayed draw term loan. OCSL was allocated $31 million of the total commitment for this deal. Next, Adevinta is one of the largest global operators of online classified marketplaces with operations in 10 countries serving approximately 1 billion people. Adevinta has 25 category-leading positions, which include mobility, real estate, and jobs. The company generates revenue from classified listing fees and advertising revenue. Oaktree invested $150 million in a term loan facility for the sponsored deal at Euribor plus 5.75% with 2% of original issue discounts. OCSL was allocated €28 million of this transaction. Our origination activity remains strong, and we have a robust pipeline of opportunities, even in this higher interest rate environment. Now let's take a closer look at credit quality. As Matt noted, we experienced an increase in non-accruals during the quarter, driven by the additions of Pluralsight, Oven, and the mezzanine tranche in Dialogs. Additionally, we recorded $42 million in net markdowns during the quarter, primarily driven by Pluralsight and our equity investment in SiO2. I will start with the new addition to the non-accrual, Pluralsight, which is a leading provider of technology skill development solutions via its cloud-based learning platform, primarily in the financial services and technology verticals. A difficult macro environment and increased competition have created challenges for the top line, while the rapid rise in interest rates has pressured the company's liquidity position. In response to these issues, the company appointed a new CEO in April of this year with the mandate of improving operational and financial performance. Lenders are engaged in an active dialogue with the sponsor and the company regarding the most logical path forward. We took a meaningful markdown in our position to better reflect the current situation. Turning to Auven Therapeutics Holdings, which is a private company that invests in therapeutic platforms and assets. Since making the loan in December of 2020, we have received principal repayments throughout our hold period that exceed the original loan amount. The $7.1 million par position that remains represents PIK interest. Given the collateral package backing the loans, we are comfortable that the remaining amount is fully covered. Next, Dialyze provides hemodialysis services directly to patients in skilled nursing facilities. Our original investment in Dialyze was composed of a first lien term loan and warrants. In connection with amendment activity and funding incremental amounts on the term loan, we received a relatively small mezzanine loan at zero cash cost. We put this smaller mezzanine loan on non-accrual as the company's plans to achieve profitability have taken longer than originally forecasted. Turning to SiO2, an investment that we have discussed on past calls. As a reminder, the company emerged from bankruptcy last year, and we received equity in connection therewith. The company has a new management team in place. However, they recently reduced their forecast for the year. As a result, we felt the prudent action was to mark down our equity position to better reflect the current economics. In general, the higher interest rates of the last two years have materially increased the interest burden on leveraged companies. This has heightened the potential for more borrowers to find it challenging to service this more expensive debt. We're closely monitoring all of our portfolio companies and the overall health of our portfolio regarding how this interest rate environment is impacting their performance. We are engaged and working with companies to the extent that we need to address their specific situations. We continue to draw upon our long history and proven expertise in turning around challenged investments, and we are well-positioned to manage through this type of market with the goal of maximizing outcomes for our shareholders. With that in mind, I'll turn to our view on the market environment. During the fiscal third quarter, credit markets continued to rally as investors priced in the end of the interest rate hike cycle, given the slowing inflationary pressures. Credit investors are seeking opportunities to put capital to work in anticipation of declining future interest rates. While new issuance favors private credit, the market is experiencing more competition as syndicated loan activity picked up during the first half of 2024. The private credit markets also remain optimistic that M&A activity will increase in the second half of this year. In general, private market borrowers remained healthy, demonstrating EBITDA growth and favorable coverage ratios. However, we remain focused on the fundamental risks that many have heard me express before. Higher interest rates for an extended period could create challenges for companies that carry high levels of debt. Although the pace of inflation has slowed, it continues to be an issue for companies and consumers alike. We are also diligently monitoring companies that will require refinancing in the near future. If market conditions become more constrained, these companies may find it challenging to obtain essential capital. In the current environment, we believe it is prudent to remain cautious. With Oaktree's resources, expertise, and experience, we continue to be disciplined in our relative value philosophy. We are thoughtfully evaluating investments across the sponsored and non-sponsored-back market. We are executing our thorough due diligence process and only investing in opportunities that meet our rigorous standards. Now, I will turn the call over to Chris to discuss our financial results in more detail.

Thank you, Armen. As Matt mentioned, we reported adjusted net investment income of $45.2 million or $0.55 per share compared to $44.7 million or $0.56 per share in the second quarter. The slight dollar increase was mainly due to lower Part 1 incentive fees, net of fees waived, although this was partially offset by lower adjusted total investment income and higher interest expense. The decrease in per share earnings for the quarter resulted from an increase in weighted average shares outstanding. Adjusted total investment income fell by $1.8 million this quarter, negatively impacted by certain investments being placed on non-accrual status. Furthermore, non-recurring income from OID acceleration along with prepayment and amendment fees decreased from the previous quarter. These factors were partly countered by higher coupon interest income linked to growth in the investment portfolio. Net expenses for the third quarter amounted to $50.4 million, down $2.3 million from the previous quarter. As Matt pointed out, this decline was mainly due to $3.2 million lower Part I incentive fees, net of fee waivers, resulting from the fees waived by Oaktree during the quarter. Moving to our balance sheet, OCSL's net leverage ratio at the end of the quarter was 1.10 times, up from 1.02 times at the end of March. Newly funded investment activity of $293 million exceeded the proceeds from repayments and sales totaling $186 million, allowing us to expand the portfolio, although markdowns taken during the quarter constrained that growth. Our net leverage remains within our targeted range of 0.9 times to 1.25 times. As of June 30th, total debt outstanding was $1.74 billion with a weighted average interest rate of 7.0%, reflecting interest rate swap agreements similar to levels at the end of the March quarter. Unsecured debt made up 55% of total debt at quarter end, slightly lower than the previous quarter. Our liquidity is robust at just over $900 million at quarter end, which includes $96 million in cash and $828 million of undrawn capacity on our credit facilities. Unfunded commitments, excluding those to joint ventures, stood at $264 million, with around $219 million ready to be drawn immediately, while the remaining balance requires certain milestones to be met by portfolio companies before funds can be accessed. Regarding our joint ventures, they have continued to perform strongly. Collectively, the JVs currently hold $477 million in investments, primarily in broadly syndicated loans across 50 portfolio companies. For the quarter, the JVs again produced an attractive annualized return on equity of approximately 13.2%. This reflects the strong credit quality of the portfolios and their predominantly first lien structure. The leverage at the JV level was 1.4 times at quarter end, up from 1.3 times in the prior quarter due to a slight rise in unrealized depreciation of the underlying portfolios, partially offset by repayments from portfolio companies during the quarter. In summary, despite the credit events we faced this quarter, we remain confident that our strong balance sheet and appealing investment opportunities position us well for the rest of fiscal year 2024. We appreciate your participation in the call today and thank you for your interest in OCSL. We are ready to take your questions.

We will now begin the question-and-answer session. Our first question comes from Finian O'Shea from Wells Fargo. Please go ahead.

Hi, everyone. Good morning. First question, and apologies if I missed this somewhere. But the Part I fee waiver this quarter, is that truly one-time, or might it relate to something like returns or the dividend for some period of time going forward?

Hey, Finian, it’s Armen, thanks for the question. No, the Part I fee waiver is truly one-time. We have done a few waivers in the past relating to transactions; you may recall the OSI entity mergers. But we viewed that it was appropriate to take a one-time waiver this quarter; it is not ongoing.

Okay. Thanks. And then Armen as well, I just wanted to ask about the Oaktree platform level. Now that you're at the helm and presumably some changes are going on. Can you talk about your vision for Oaktree, and perhaps if you seek to turn it into more of a volume shop? I know you mentioned that you maintain the relative value philosophy, but will things sort of drift that way? And would you attribute any platform changes to the recent credit experience? Thanks.

Oaktree, founded in 1995, is fundamentally a credit investment firm focused on below-investment-grade and unrated debt, dealing with both performing and non-performing assets. We intend to continue operating the business with this legacy as our foundation and will avoid any unnatural growth strategies. As a private company, we are primarily owned by Brookfield Asset Management, but our emphasis remains on credit, particularly below investment grade and unrated credit. Our recent performance has not been influenced by any shifts in our platform, but rather by unusual situations in a limited number of investments that have adversely affected our net asset value over the past few quarters. These issues involve businesses that thrived during COVID but have faced difficulties in the post-COVID period. Although these investments were initially seen as strong, they have run into challenges, which is unfortunate for us and the equity stakeholders of those companies. However, this situation does not reflect on Oaktree as a platform or on any decisions we might have made.

Thank you.

Our next question comes from Melissa Wedel of JPMorgan. Please go ahead.

Thank you for taking my question. I'm trying to reconcile your cautious stance in this environment with the elevated level of net deployment this quarter. I'm curious if this is due to timing and how everything aligned, or do you anticipate that activity and repayment levels will continue to be high?

Thanks, Melissa. I think there was a little bit of timing. I mean, we saw a slowdown last year; last calendar year, as base rates were higher so were spreads. I think there was some M&A activity that was pent up in the pipeline. As that M&A activity picked up this year, we have seen some elevated originations. The spreads are tighter this year than they were last year, and I would say fairly meaningfully so. We are cautious about new LBOs as well as existing ones given the elevated base rate environment. So we are being cautious. We are very mindful of valuation multiples, leverage multiples, and loan to values. You could see it in our origination; most of what we did was first lien, and the overall portfolio has meaningfully migrated to a predominantly first lien portfolio. But we are definitely seeing an uptick in deal volume, refinancings, and we have the opportunity to invest selectively with sponsors that we have done repeat business with.

Okay. And then as a follow-up question, definitely to your point that this was a one-time fee waiver in the June quarter. I'm also wondering if you can remind us how much undistributed NII there is per share? Thanks very much.

Hey, Melissa, thanks for the question. This is Chris. In terms of undistributed NII, our adjusted NII came in at $0.55 per share. So right in line with that dividend payout.

This concludes our question-and-answer session. I'd like to hand things back over to Mr. Kleven for any final remarks.

Thanks, Alan, and thank you all for joining us on today's earnings conference call. A replay of this call will be available for 30 days on OCSL's website in the Investors section or by dialing 877-344-7529 for U.S. callers and +1-412-317-0088 for non-U.S. dollars with the replay access code 2416934 beginning approximately 1 hour after this broadcast. Thank you all.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.