Lender Loan – Flight 93 http://flight93.org/ Thu, 17 Nov 2022 23:29:03 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://flight93.org/wp-content/uploads/2021/07/icon-5-150x150.png Lender Loan – Flight 93 http://flight93.org/ 32 32 How to create a budget for your home https://flight93.org/how-to-create-a-budget-for-your-home/ Thu, 17 Nov 2022 21:39:51 +0000 https://flight93.org/how-to-create-a-budget-for-your-home/ Save for a deposit You will need to include savings costs for a advance payment when budgeting for a home purchase. The amount you will need to deposit varies, however. If you get a down payment of at least 20% of the purchase price of your home, you won’t have to pay for private mortgage […]]]>

Save for a deposit

You will need to include savings costs for a advance payment when budgeting for a home purchase. The amount you will need to deposit varies, however.

If you get a down payment of at least 20% of the purchase price of your home, you won’t have to pay for private mortgage insurance, or PMI, a type of insurance that protects your lender if you stop making your mortgage payments. The challenge is that 20% can be a lot of money if you live in an area with high housing prices. Consider that 20% of a home costing $425,000 (the national median list price according to realtor.com) comes to $85,000, which is not an easy sum to come up with.

Luckily, you don’t need 20% down payment. You may qualify for an FHA loan with a down payment of just 3.5% of the final purchase price of your home if your FICO® credit score is at least 580. And you may also qualify for conventional loans which require down payments as low as 3% of the purchase price of your home. That’s a big difference: 3% of a house that costs $425,000 is $12,750 is still a lot of money, but not as much as you would pay for a 20% down payment. .

It can make financial sense to make as large a down payment as you can afford. Lenders typically reward borrowers with lower interest rates based on larger down payments, which could save you tens of thousands of dollars over the life of your loan.

If you need help saving for a down payment, you can turn to public and private sources for down payment assistance. You may find several down payment assistance programs at At the state level.

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OAKTREE SPECIALTY LENDING CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-K) https://flight93.org/oaktree-specialty-lending-corp-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-k/ Tue, 15 Nov 2022 11:13:03 +0000 https://flight93.org/oaktree-specialty-lending-corp-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-k/ The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K. Some of the statements in this annual report on Form 10-K constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements […]]]>

The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K.


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

•the ability of the parties to consummate the Mergers on the expected timeline,
or at all;
•the expected synergies and savings associated with the Mergers;
•the ability to realize the anticipated benefits of the Mergers including the
expected elimination of certain expenses and costs due to the Mergers;
•the percentage of our stockholders and OSI 2's stockholders voting in favor of
the proposals submitted for their approval;
•the possibility that competing offers or acquisition proposals will be made;
•the possibility that any or all of the various conditions to the consummation
of the Mergers may not be satisfied or waived;
•risks related to diverting management's attention from ongoing business
operations;
•the combined company's plans, expectations, objectives and intentions, as a
result of the Mergers;
•any potential termination of the Merger Agreement;
•the actions of our stockholders or OSI 2's stockholders with respect to any of
the proposals submitted for their approval;
•our future operating results and distribution projections;
•the ability of 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 annual report on Form 10-K 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 this annual report on Form
10-K.

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, including the impacts of inflation and rising
interest rates;
•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 pandemics;
•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 RICs; 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 annual report on
Form 10-K on information available to us on the date of this annual 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 the tables are in thousands, except per share and per share amounts and unless otherwise indicated.

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Company 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. In addition, we have
qualified and elected to be treated as a RIC under the Code, for U.S. federal
income tax purposes.

We are externally managed by Oaktree under the Investment Advisory Agreement. Oaktree Administrator, an affiliate of Oaktree, provides certain administrative and other services necessary for us to operate in accordance with 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. 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
area, 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 $71 million at fair value as of
September 30, 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 OCSI Merger Agreement, dated as of October 28, 2020, by and
among OCSI, us, Lion Merger Sub, Inc., our wholly-owned subsidiary, and, solely
for the limited purposes set forth therein, Oaktree. As a result of the OCSI
Merger, we issued an aggregate of 39,400,011 shares of our common stock to
former OCSI stockholders.

Merger Agreement


On September 14, 2022, we entered into the Merger Agreement, which provides
that, subject to the conditions set forth in the Merger Agreement, Merger Sub
will merge with and into OSI 2, with OSI 2 continuing as the surviving company
and as our wholly-owned subsidiary and, immediately thereafter, OSI 2 will merge
with and into us, with us continuing as the surviving company. Both our Board of
Directors and the Board of Directors of OSI 2, in each case, on the
recommendation of a special committee comprised solely of certain independent
directors of us or OSI 2, as applicable, have approved the Merger Agreement and
the transactions contemplated thereby.

At the Effective Time, each share of OSI 2 Common Stock issued and outstanding
immediately prior to the Effective Time (other than Cancelled Shares) will be
converted into the right to receive a number of shares of our common stock equal
to the Exchange Ratio (as defined below), plus any cash (without interest) in
lieu of fractional shares.

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As of a mutually agreed date no earlier than 48 hours (excluding Sundays and
holidays) prior to the Effective Time, which we refer as the "Determination
Date", each of us and OSI 2 will deliver to the other a calculation of its net
asset value as of such date, in each case using a pre-agreed set of assumptions,
methodologies and adjustments. We refer to such calculation with respect to OSI
2 as the "Closing OSI 2 Net Asset Value" and with respect to us as the "Closing
OCSL Net Asset Value". Based on such calculations, the parties will calculate
the "OSI 2 Per Share NAV", which will be equal to (i) the Closing OSI 2 Net
Asset Value divided by (ii) the number of shares of OSI 2 Common Stock issued
and outstanding as of the Determination Date (excluding any Cancelled Shares),
and the "OCSL Per Share NAV", which will be equal to (A) the Closing OCSL Net
Asset Value divided by (B) the number of shares of our common stock issued and
outstanding as of the Determination Date. The "Exchange Ratio" will be equal to
the quotient (rounded to four decimal places) of (i) the OSI 2 Per Share NAV
divided by (ii) the OCSL Per Share NAV.

We and OSI 2 will update and redeliver the Closing OCSL Net Asset Value or the
Closing OSI 2 Net Asset Value, respectively, in the event of a material change
to such calculation between the Determination Date and the closing of the
Mergers and if needed to ensure that the calculation is determined within 48
hours (excluding Sundays and holidays) prior to the Effective Time.

The Merger Agreement contains customary representations and warranties by each
of us, OSI 2 and Oaktree. The Merger Agreement also contains customary
covenants, including, among others, covenants relating to the operation of each
of our and OSI 2's businesses during the period prior to the closing of the
Mergers.

Consummation of the Mergers, which is currently anticipated to occur during the
second fiscal quarter of 2023, is subject to certain closing conditions,
including requisite approvals of our and OSI 2's stockholders and certain other
closing conditions.

The Merger Agreement also contains certain termination rights in favor of us and
OSI 2, including if the Mergers are not completed on or before June 30, 2023 or
if the requisite approvals of our or OSI 2's stockholders are not obtained. The
Merger Agreement provides that, upon the termination of the Merger Agreement
under certain circumstances, a third party acquiring OSI 2 may be required to
pay us a termination fee of approximately $9.8 million. The Merger Agreement
provides that, upon the termination of the Merger Agreement under certain
circumstances, a third party acquiring us may be required to pay OSI 2 a
termination fee of approximately $37.9 million.

The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Merger Agreement. The representations, warranties, covenants and agreements
contained in the Merger Agreement were made only for purposes of the Merger
Agreement and as of specific dates; were solely for the benefit of the parties
to the Merger Agreement (except as may be expressly set forth in the Merger
Agreement); may be subject to limitations agreed upon by the parties, including
being qualified by confidential disclosures made for the purposes of allocating
contractual risk between the parties to the Merger Agreement instead of
establishing these matters as facts; and may be subject to standards of
materiality applicable to the contracting parties that differ from those
applicable to investors. Investors and security holders should not rely on such
representations, warranties, covenants or agreements, or any descriptions
thereof, as characterizations of the actual state of facts or condition of any
of the parties to the Merger Agreement or any of their respective subsidiaries
or affiliates. Moreover, information concerning the subject matter of the
representations, warranties, covenants and agreements may change after the date
of the Merger Agreement, which subsequent information may or may not be fully
reflected in public disclosures by the parties to the Merger Agreement.

Waiver of management fees


In connection with entry into the Merger Agreement and subject to completion of
the transactions contemplated thereby, Oaktree has agreed to waive $9.0 million
of base management fees payable to it under the Investment Advisory Agreement as
follows: $6.0 million at a rate of $1.5 million per quarter (with such amount
appropriately prorated for any partial quarter) in the first year following
closing of the Mergers and $3.0 million at a rate of $750,000 per quarter (with
such amount appropriately prorated for any partial quarter) in the second year
following closing of the Mergers.

Business environment and developments


Global financial markets have experienced an increase in volatility as concerns
about the impact of higher inflation, rising interest rates, a potential
recession and the current conflict in Ukraine have weighed on market
participants. These factors have created disruptions in supply chains and
economic activity and have had a particularly adverse impact on certain
companies in the energy, raw materials and transportation sectors, 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.
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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 September 30, 2022, 86.5% of our debt investment portfolio (at fair value)
and 86.3% 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 SOFR or SONIA. Most U.S. dollar LIBOR rates will continue to be published
through June 30, 2023. 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. 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 are an increasing number of issuances utilizing SOFR or SONIA, these
alternative reference rates may not 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 appraisal


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 at 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 Oaktree'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. Oaktree'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
our investments for which quotations are
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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.

Oaktree seeks to obtain at least two quotations for the subject or similar
securities, typically from pricing vendors. If Oaktree is unable to obtain two
quotes from pricing vendors, or if the prices obtained from pricing vendors are
not within our set threshold, Oaktree 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, Oaktree 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, Oaktree 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, 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. Oaktree 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, Oaktree 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. Under the market yield technique, the significant
unobservable input used in the fair value measurement of our 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.

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.

Oaktree 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 fair value of our investments as of September 30, 2022 was determined by our
Adviser, as our valuation designee, and the fair value of our investments as of
September 30, 2021 was determined in good faith by our Board of Directors. We
have 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. As of September 30, 2022, 93.2% of our portfolio at
fair value was valued either based on market quotations, the transactions
precedent approach or corroborated by independent valuation firms.

Some factors that may be taken into account in determining the fair value of our investments include the nature and realizable value of any collateral, the holding company’s earnings and ability to make payments on its debt, the markets in which holding company operates, comparison with publicly traded comparables, discounted cash flows and

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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, Oaktree's 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 September 30, 2022, we held $2,494.1 million of investments at fair value,
down from $2,556.6 million held at September 30, 2021, primarily driven by
unrealized losses related to credit spread widening and partially offset by new
originations. As of September 30, 2022 and September 30, 2021, approximately
94.2% and 97.0%, respectively, of our total assets represented investments at
fair value.

Revenue Recognition

Interest Income

Interest income, adjusted for accretion of 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 September 30, 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 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.

Composition of the portfolio


Our investments principally consist of loans, common and preferred equity and
warrants in privately-held companies, SLF JV I and Glick JV. 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 fiscal year ended September 30, 2022, we originated $756.7 million of
investment commitments in 46 new and 39 existing portfolio companies and funded
$691.5 million of investments.

During the year ended September 30, 2022we received $691.1 million proceeds from early redemptions, exits, other redemptions and sales and exited 35 portfolio companies.

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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:

                                      September 30, 2022      September 30, 2021
Cost:
Senior secured debt                              85.08  %                85.85  %
Debt investments in the JVs                       5.59                    5.79
Preferred equity                                  3.26                    2.60
Subordinated debt                                 2.57                    1.67
LLC equity interests of the JVs                   1.88                    1.94
Common equity and warrants                        1.62                    2.15
Total                                           100.00  %               100.00  %




                                      September 30, 2022      September 30, 2021
Fair value:
Senior secured debt                              86.86  %                86.72  %
Debt investments in the JVs                       5.88                    5.94
Preferred equity                                  3.19                    2.49
Subordinated debt                                 2.28                    1.67
Common equity and warrants                        0.96                    1.71
LLC equity interests of the JVs                   0.83                    1.47
Total                                           100.00  %               100.00  %



                                       63
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The sector composition of our portfolio at cost and fair value as a percentage of total investments was as follows:

                                                                     September 30, 2022           September 30, 2021
Cost:
Application Software                                                             14.98  %                     14.49  %
Multi-Sector Holdings (1)                                                         7.48                         7.73
Pharmaceuticals                                                                   4.83                         5.44
Data Processing & Outsourced Services                                             4.60                         4.74
Biotechnology                                                                     4.20                         4.41
Health Care Technology                                                            3.82                         0.55
Industrial Machinery                                                              3.12                         3.47
Specialized Finance                                                               3.09                         2.70
Internet & Direct Marketing Retail                                                2.59                         2.45
Aerospace & Defense                                                               2.37                         2.66
Construction & Engineering                                                        2.33                         2.44
Automotive Retail                                                                 2.26                         1.65
Health Care Services                                                              2.24                         3.34
Health Care Distributors                                                          2.18                         0.78
Internet Services & Infrastructure                                                2.07                         1.85
Personal Products                                                                 2.03                         4.08
Fertilizers & Agricultural Chemicals                                              1.88                         2.63
Metal & Glass Containers                                                          1.82                         0.69
Real Estate Operating Companies                                                   1.82                         1.08
Home Improvement Retail                                                           1.75                         1.83
Airport Services                                                                  1.65                         1.64
Real Estate Services                                                              1.54                         1.59
Leisure Facilities                                                                1.52                         0.99
Diversified Support Services                                                      1.45                         1.60
Specialty Chemicals                                                               1.43                         1.84
Health Care Supplies                                                              1.39                         1.17
Insurance Brokers                                                                 1.36                         1.00
Integrated Telecommunication Services                                             1.32                         1.85
Soft Drinks                                                                       1.31                         1.32
Electrical Components & Equipment                                                 1.29                         1.27
Other Diversified Financial Services                                              1.12                         0.63
Advertising                                                                       1.08                         1.13
Movies & Entertainment                                                            1.00                         1.02
Distributors                                                                      0.97                            -
Health Care Equipment                                                             0.93                         0.93
Oil & Gas Storage & Transportation                                                0.85                         1.44
Environmental & Facilities Services                                               0.80                            -
Cable & Satellite                                                                 0.79                         1.05
Home Furnishings                                                                  0.75                         0.77
Systems Software                                                                  0.57                         0.26
Consumer Finance                                                                  0.55                            -
Hotels, Resorts & Cruise Lines                                                    0.53                            -
Auto Parts & Equipment                                                            0.48                         0.49
IT Consulting & Other Services                                                    0.45                         0.30
Restaurants                                                                       0.36                         0.37
Research & Consulting Services                                                    0.35                         0.29
Education Services                                                                0.35                         0.04
Oil & Gas Refining & Marketing                                                    0.33                         1.42
Trading Companies & Distributors                                                  0.29                            -
Air Freight & Logistics                                                           0.28                         0.19
Apparel Retail                                                                    0.20                            -
Apparel, Accessories & Luxury Goods                                               0.20                         0.20
Integrated Oil & Gas                                                              0.19                         0.19
Food Distributors                                                                 0.18                         0.18
Specialized REITs                                                                 0.16                            -
Diversified Banks                                                                 0.13                         0.14
Technology Distributors                                                           0.12                         0.12
Construction Materials                                                            0.09                         0.09
Housewares & Specialties                                                          0.09                         0.07
Electronic Components                                                             0.08                         0.40
Alternative Carriers                                                              0.01                         0.26
Independent Power Producers & Energy Traders                                         -                         0.92
Airlines                                                                             -                         0.88
Commercial Printing                                                                  -                         0.78
Managed Health Care                                                                  -                         0.73
Thrifts & Mortgage Finance                                                           -                         0.63
Property & Casualty Insurance                                                        -                         0.39
Leisure Products                                                                     -                         0.26
Food Retail                                                                          -                         0.15
Total                                                                           100.00  %                    100.00  %


                                       64
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                                                                     September 30, 2022           September 30, 2021
Fair value:
Application Software                                                             15.43  %                     14.58  %
Multi-Sector Holdings (1)                                                         6.71                         7.41
Pharmaceuticals                                                                   4.79                         5.56
Data Processing & Outsourced Services                                             4.46                         4.46
Biotechnology                                                                     4.35                         4.44
Health Care Technology                                                            3.90                         0.55
Industrial Machinery                                                              3.25                         3.53
Specialized Finance                                                               2.93                         2.69
Internet & Direct Marketing Retail                                                2.82                         2.68
Aerospace & Defense                                                               2.48                         2.72
Construction & Engineering                                                        2.45                         2.47
Automotive Retail                                                                 2.31                         1.65
Health Care Distributors                                                          2.19                         0.77
Internet Services & Infrastructure                                                2.16                         1.87
Fertilizers & Agricultural Chemicals                                              2.08                         2.64
Personal Products                                                                 2.01                         4.13
Real Estate Operating Companies                                                   1.93                         1.11
Metal & Glass Containers                                                          1.91                         0.68
Health Care Services                                                              1.84                         3.31
Home Improvement Retail                                                           1.82                         1.82
Airport Services                                                                  1.72                         1.59
Real Estate Services                                                              1.59                         1.61
Leisure Facilities                                                                1.57                         0.90
Diversified Support Services                                                      1.47                         1.60
Health Care Supplies                                                              1.47                         1.18
Specialty Chemicals                                                               1.36                         1.82
Soft Drinks                                                                       1.35                         1.31
Insurance Brokers                                                                 1.33                         1.08
Electrical Components & Equipment                                                 1.32                         1.26
Integrated Telecommunication Services                                             1.29                         1.94
Advertising                                                                       1.08                         1.19
Movies & Entertainment                                                            1.07                         1.06
Distributors                                                                      0.98                            -
Other Diversified Financial Services                                              0.98                         0.62
Health Care Equipment                                                             0.97                         0.93
Oil & Gas Storage & Transportation                                                0.84                         1.35
Environmental & Facilities Services                                               0.83                            -
Cable & Satellite                                                                 0.78                         1.06
Home Furnishings                                                                  0.73                         0.77
Hotels, Resorts & Cruise Lines                                                    0.56                            -
Consumer Finance                                                                  0.53                            -
Systems Software                                                                  0.51                         0.26
Auto Parts & Equipment                                                            0.46                         0.48
Restaurants                                                                       0.35                         0.37
Oil & Gas Refining & Marketing                                                    0.34                         1.43
IT Consulting & Other Services                                                    0.34                         0.29
Education Services                                                                0.34                         0.04
Research & Consulting Services                                                    0.34                         0.30
Air Freight & Logistics                                                           0.26                         0.19
Trading Companies & Distributors                                                  0.22                            -
Apparel Retail                                                                    0.21                            -
Integrated Oil & Gas                                                              0.20                         0.19
Diversified Banks                                                                 0.14                         0.14
Food Distributors                                                                 0.13                         0.18
Specialized REITs                                                                 0.13                            -
Technology Distributors                                                           0.12                         0.12
Housewares & Specialties                                                          0.10                         0.08
Construction Materials                                                            0.08                         0.09
Electronic Components                                                             0.08                         0.40
Alternative Carriers                                                              0.01                         0.27
Airlines                                                                             -                         0.96
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
Leisure Products                                                                     -                         0.26
Food Retail                                                                          -                         0.15
Total                                                                           100.00  %                    100.00  %


___________________

(1) This segment includes our investments in joint ventures and certain investments in limited partnerships.

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The Joint Ventures

Senior Loan Fund JV I, LLC

In May 2014, we entered into an 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 SLF JV I Notes issued to us and Kemper 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 September 30, 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 September 30, 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 September 30, 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 September 30, 2022 and September 30, 2021. We earned interest income of
$8.0 million, $7.4 million and $8.1 million on the SLF JV I Notes for the years
ended September 30, 2022, 2021 and 2020, respectively. As of September 30, 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 $20.7 million, respectively, as of September 30, 2022, and
$49.3 million and $37.7 million, respectively, as of September 30, 2021. We
earned $2.9 million and $0.9 million in dividend income for the years ended
September 30, 2022 and September 30, 2021, respectively, with respect to our
investment in the LLC equity interests of SLF JV I. We did not earn dividend
income for the year ended September 30, 2020 with respect to our investment in
the LLC equity interests of SLF JV I.

Below is a summary of the SLF JV I portfolio at September 30, 2022 and
September 30, 2021:

                                                              September 30, 2022          September 30, 2021
Senior secured loans (1)                                           $383,194                    $344,196
Weighted average interest rate on senior secured loans               8.33%                       5.60%

(2)

Number of borrowers in SLF JV I                                       60                          55
Largest exposure to a single borrower (1)                           $10,093                     $9,875
Total of five largest loan exposures to borrowers (1)               $48,139                     $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 FSL JV I and its portfolio.

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OCSI Glick JV LLC


On March 19, 2021, 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, an entity advised by affiliates of
GF Equity Funding, provide capital to the Glick JV in exchange for 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 September 30, 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
September 30, 2022 and September 30, 2021, of which $73.5 million was from us.
As of September 30, 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 September 30, 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 $50.2
million and $50.3 million, respectively, as of September 30, 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 year ended
September 30, 2022 and for the period from March 19, 2021 to September 30, 2021,
our investment in the Glick JV Notes earned interest income of $4.7 million and
$2.4 million, respectively. We did not earn any dividend income for the year
ended September 30, 2022 and for the period from March 19, 2021 to September 30,
2021 with respect to our investment in the LLC equity interests of the Glick JV.

Below is a summary of Glick JV’s portfolio at September 30, 2022 and
September 30, 2021:


                                                            September 30, 2022               September 30, 2021
Senior secured loans (1)                                         $143,225                         $126,512
Weighted average current interest rate on senior                  8.52%                            5.86%
secured loans (2)
Number of borrowers in the Glick JV                                 43                               37
Largest loan exposure to a single borrower (1)                    $6,562                           $6,907
Total of five largest loan exposures to borrowers (1)            $28,973                          $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 joint venture and its portfolio.

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Discussion and analysis of results and operations

Operating results


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 years ended September 30, 2022 and September 30, 2021

Total investment income

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


Total investment income for the years ended September 30, 2022 and 2021 was
$262.5 million and $209.4 million, respectively. For the year ended
September 30, 2022, this amount consisted of $249.4 million of interest income
from portfolio investments (which included $20.5 million of PIK interest), $6.6
million of fee income and $6.4 million of dividend income. For the year ended
September 30, 2021, this amount consisted of $190.8 million of interest income
from portfolio investments (which included $16.4 million of PIK interest), $14.1
million of fee income and $4.5 million of dividend income. The increase of $53.1
million, or 25.4%, in our total investment income for the year ended
September 30, 2022, as compared to the year ended September 30, 2021, was due
primarily to (1) a $58.6 million increase in interest income, which was
primarily driven by the impact of rising reference rates on interest income and
a larger average investment portfolio as a result of the increase in assets
resulting from the OCSI Merger and new originations and (2) a $2.0 million
increase in dividend income mainly driven by larger dividends received from our
equity investment in the SLF JV I. This was partially offset by a $7.5 million
decrease in fee income primarily due to lower prepayment and amendment fees.

Expenses


Net expenses (expenses net of fee waivers) for the years ended September 30,
2022 and 2021 were $110.6 million and $109.5 million, respectively. Net expenses
increased for the year ended September 30, 2022, as compared to the year ended
September 30, 2021, by $1.1 million, or 1.0%, primarily due to (1) a $16.4
million increase in interest expense due to higher borrowings outstanding and
the impact of rising reference rates, (2) a $5.0 million increase in Part I
incentive fees mainly due to higher total investment income, partially offset by
higher interest expense and management fees and (3) a $5.9 million increase in
base management fees (net of management fee waivers) primarily as a result of a
larger average investment portfolio. These were partially offset by $26.4
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 period.

Net investment income


Primarily as a result of the $53.1 million increase in total investment income,
the $1.1 million increase in net expenses and a $0.5 million increase in the
provision for taxes on net investment income, net investment income for the year
ended September 30, 2022 increased by $51.5 million compared to the year ended
September 30, 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 years ended September 30, 2022, 2021 and 2020, we recorded aggregate
net realized gains (losses) of $17.2 million, $26.4 million and $(13.9) 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 years ended September 30, 2022, 2021 and 2020.
                                       68
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Net unrealized capital gain (loss)


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 years ended September 30, 2022, 2021 and 2020, we recorded net
unrealized appreciation (depreciation) of $(136.2) million, $114.5 million and
$(20.6) million, respectively. For the year ended September 30, 2022, this
consisted of $94.1 million of net unrealized depreciation on debt investments,
$35.4 million of net unrealized depreciation on equity investments and $11.7
million of net unrealized depreciation related to exited investments (a portion
of which resulted in a reclassification to realized gains), partially offset by
$4.9 million of net unrealized appreciation of foreign currency forward
contracts. For the year ended September 30, 2021, this consisted of $70.0
million of net unrealized appreciation on debt investments, $36.3 million of net
unrealized appreciation on equity investments, $6.6 million of net unrealized
appreciation related to exited investments (a portion of which resulted in a
reclassification to realized losses) and $1.7 million of net unrealized
appreciation of foreign currency forward contracts. For the year ended
September 30, 2020, this consisted of $35.3 million of net unrealized
depreciation on equity investments, $12.0 million of net unrealized depreciation
on debt investments and $0.3 million of net unrealized depreciation of foreign
currency forward contracts, partially offset by $26.9 million of net unrealized
appreciation related to exited investments (a portion of which resulted in a
reclassification to realized losses).

For the year ended September 30, 2021, there were $22.8 million of net realized
and unrealized gains (losses) that resulted solely from accounting adjustments
related to the OCSI Merger.

Comparison of years ended September 30, 2021 and September 30, 2020


The comparison of the fiscal years ended September 30, 2021 and 2020 can be
found within Part II, Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations of our annual report on Form 10-K for the
fiscal year ended September 30, 2021.

Financial position, 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 September 30,
2022, we had $1,350.0 million in senior securities and our asset coverage ratio
was 188.6%. During the year, we increased our target debt to equity ratio from
0.85x to 1.0x to 0.90x to 1.25x (i.e., one dollar of equity for each $0.90 to
$1.25 of debt outstanding) to provide us with increased capacity to
opportunistically deploy capital into the markets. As of September 30, 2022, our
debt to equity ratio was 1.08x.

For the year ended September 30, 2022, we experienced a net decrease in cash and
cash equivalents (including restricted cash) of $5.3 million. During that
period, net cash provided by operating activities was $22.4 million, primarily
from $693.7 million of principal payments and sale proceeds received, $22.4
million of net increase in payables from unsettled transactions and the cash
activities related to $148.6 million of net investment income, partially offset
by funding $702.1 million of investments, $43.9 million of increase in due from
broker (cash held at a broker to cover collateral obligations under the interest
swap agreement) and $20.5 million increase in due from portfolio companies.
During the same period, net cash used in financing activities was $26.8 million,
primarily consisting of $115.2 million of cash distributions paid to our
stockholders, $1.9 million of repurchases of common stock under our dividend
reinvestment plan, DRIP, and $0.3 million of deferred financing costs paid,
partially offset by $70.0 million of net borrowings under the credit facilities
and $20.6 million of proceeds (net of offering costs) from shares issued under
the "at the market" offering.
                                       69
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For the year ended September 30, 2021, we experienced a net decrease in cash and
cash equivalents (including restricted cash) of $7.5 million. During that
period, we used $230.5 million of net cash from operating activities, primarily
from funding $1,120.2 million of investments, partially offset by $792.2 million
of principal payments and sale proceeds received, $20.9 million of cash acquired
in the OCSI Merger, the cash activities related to $97.1 million of net
investment income and $10.1 million of net increases in payables and net
decreases in receivables from unsettled transactions. During the same period,
net cash provided by financing activities was $224.2 million, primarily
consisting of $349.0 million of borrowings of unsecured notes (net of OID),
partially offset by $24.6 million of net repayments under the credit facilities,
$79.9 million of cash distributions paid to our stockholders, $9.3 million of
repayments of secured borrowings, $2.2 million of repurchases of common stock
under our DRIP and $8.9 million of deferred financing costs paid.

For the year ended September 30, 2020, we experienced a net increase in cash and
cash equivalents of $23.7 million. During that period, we used $152.9 million of
net cash from operating activities, primarily from funding $727.2 million of
investments, a $63.7 million of net decrease in payables from unsettled
transactions, partially offset by $579.6 million of principal payments and sale
proceeds received and the cash activities related to $72.0 million of net
investment income. During the same period, net cash provided by financing
activities was $176.3 million, primarily consisting of $100.0 million of net
borrowings under the Credit Facility (as defined below) and $136.2 million net
incurrence of unsecured notes, partially offset by $53.1 million of cash
distributions paid to our stockholders, $4.8 million of deferred financing costs
paid and $1.9 million of repurchases of common stock under our DRIP.

As of September 30, 2022, we had $26.4 million in cash and cash equivalents
(including $2.8 million of restricted cash), portfolio investments (at fair
value) of $2.5 billion, $35.6 million of interest, dividends and fees
receivable, $22.5 million of due from portfolio companies, $500.0 million of
undrawn capacity on our credit facilities (subject to borrowing base and other
limitations), $22.3 million of net payables from unsettled transactions, $700.0
million of borrowings outstanding under our credit facilities and $601.0 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 September 30, 2022, our only off-balance sheet arrangements
consisted of $224.2 million of unfunded commitments, which was comprised of
$175.2 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
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certain financial and non-financial commitments 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 September 30, 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 relating to our outstanding principal indebtedness under the Syndicated Facility (as defined below), Citibank Facility (as defined below), 2025 Notes and 2027 Notes:

                                                                                                                                   Maximum debt
                                                                                                   Weighted average debt          outstanding for
                                           Debt Outstanding            Debt Outstanding             outstanding for the           the year ended
                                          as of September 30,         as of September 30,               year ended                 September 30,
                                                 2021                        2022                   September 30, 2022                 2022
Syndicated Facility                      $          495,000          $          540,000          $              550,165          $      620,000
Citibank Facility                                   135,000                     160,000                         160,986                 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          $        1,350,000          $            1,361,151



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



                                                               Payments due by period as of September 30, 2022
Contractual Obligations                            Total               Less than 1 year           1-3 years           3-5 years
Syndicated Facility                          $       540,000          $     

-$- $540,000
Interest Due on the Syndicated Facility

                   90,986                    25,313              50,626              15,047
Citibank Facility                                    160,000                         -             160,000                   -
Interest due on Citibank Facility                     19,225                     8,996              10,229                   -
2025 Notes                                           300,000                         -             300,000                   -
Interest due on 2025 Notes                            25,286                    10,500              14,786                   -
2027 Notes                                           350,000                         -                   -             350,000
Interest due on 2027 Notes (a)                        62,699                    14,595              29,190              18,914
Total                                        $     1,548,196          $         59,404          $  564,831          $  923,961


__________

(a) The interest due on the 2027 Bonds has been calculated net of the interest rate swap.


Equity Issuances

During the year ended September 30, 2022we issued a total of 212,382 ordinary shares under the DRIP.


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.
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Under the “at-the-market” offering, we issued and sold the following common shares during the year ended September 30, 2022:

                                                                                                                                      Average Sales
                                                Number of Shares            Gross           Placement Agent       Net Proceeds       Price per Share
                                                     Issued                Proceeds              Fees                 (1)                  (2)
"At the market" offering                             2,801,206           $  21,049          $        210          $  20,839          $        7.51


__________

(1) Net proceeds exclude placement fees of $0.2 million. (2) Represents the gross sale price before deduction of placement agent fees and estimated offering costs.


On March 19, 2021, in connection with the OCSI Merger, we issued an aggregate of
39,400,011 shares of common stock to former OCSI stockholders. There were no
other common stock issuances during the year ended September 30, 2021.

Distributions


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,
2020:

                                                                                               Amount                 Cash                DRIP Shares                   DRIP Shares
Date Declared                      Record Date                    Payment Date                per Share           Distribution             Issued (1)                      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
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
April 29, 2022                          June 15, 2022                   June 30, 2022            0.165               29.4 million          131,028                         0.9 million
July 29, 2022                      September 15, 2022              September 30, 2022             0.17               30.2 million          153,544                         1.0 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 quarters ended December 31, 2021
and March 31, 2022.


Indebtedness

See “Note 6. Borrowings” to the consolidated financial statements for further details regarding our indebtedness.

Syndicated facility



As of September 30, 2022, (i) the size of the Syndicated Facility 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.
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The following table describes significant financial covenants, as of
September 30, 2022, with which we must comply under the Syndicated Facility on a
quarterly basis:

     Financial Covenant                              Description                           Target Value          June 30, 2022 Reported Value (1)
Minimum shareholders' equity        Net assets shall not be less than the sum of         $610 million           $1,264 million
                                    (x) $600 million, plus (y) 50% of the
                                    aggregate net proceeds of all sales of equity
                                    interests after May 6, 2020
Asset coverage ratio                Asset coverage ratio shall not be less than          1.50:1                 1.88:1
                                    the greater of 1.50:1 and the statutory test
                                    applicable to us
Interest coverage ratio             Interest coverage ratio shall not be less than       2.25:1                 4.55:1
                                    2.25:1
Minimum net worth                   Net worth shall not be less than $550 million        $550 million           $1,075 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 June 30, 2022. We were in compliance with all financial
covenants under the Syndicated Facility based on the financial information
contained in this Annual Report on Form 10-K.

As of September 30, 2022 and September 30, 2021, we had $540.0 million and
$495.0 million of borrowings outstanding under the Syndicated Facility,
respectively, which had a fair value of $540.0 million and $495.0 million,
respectively. Our borrowings under the Syndicated Facility bore interest at a
weighted average interest rate of 2.876%, 2.197% and 3.028% for the years ended
September 30, 2022, 2021 and 2020, respectively. For the years ended
September 30, 2022, 2021 and 2020, we recorded interest expense (inclusive of
fees) of $19.5 million, $13.8 million and $14.9 million, respectively, related
to the Syndicated Facility.

Citibank facility


On March 19, 2021, we became party to the Citibank Facility. As of September 30,
2022, we were able to borrow up to $200 million under the Citibank Facility
(subject to borrowing base and other limitations). As of September 30, 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 September 30, 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 September 30,
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 September 30, 2022 and September 30, 2021, we had $160.0 million and
$135.0 million outstanding under the Citibank Facility, respectively, which had
a fair value of $160.0 million and $135.0 million, respectively. Our borrowings
under the Citibank Facility bore interest at a weighted average interest rate
of 3.179% and 2.086% for the year ended September 30, 2022 and the period from
March 19, 2021 to September 30, 2021, respectively. For the year ended
September 30, 2022 and the period from March 19, 2021 to September 30, 2021, we
recorded interest expense (inclusive of fees) of $5.8 million and $1.9 million,
respectively, related to the Citibank Facility.

Tickets 2025


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.

Tickets 2027


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
                                       73
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a notional amount of $350 million. We have designated the interest rate swap as a hedging instrument in an effective hedge accounting relationship.

The table below shows the components of the book value of the 2025 Bonds and the 2027 Bonds as at September 30, 2022 and September 30, 2021:

                                                       As of September 30, 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                              (1.8)                (3.2)                  (2.6)                (4.0)
 Unaccreted discount                                      (1.2)                (0.7)                  (1.7)                (0.9)
 Interest rate swap fair value adjustment                    -                (42.0)                     -                 (2.1)
Net carrying value                               $       297.0          $     304.1          $       295.7          $     343.0
Fair Value                                       $       283.1          $     294.0          $       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 year ended September 30,
2022:

($ in millions)                                                    2025 Notes             2027 Notes
Coupon interest                                                 $        10.5          $         9.5
Amortization of financing costs and discount                              1.3                    0.9
Effect of interest rate swap                                                -                   (0.4)
 Total interest expense                                         $       

11.8 $10.0
Coupon interest rate (net of the effect of the interest rate swap for the 2027 bonds)

                                                         3.500  %               2.585  %


The below table presents the components of interest and other debt expenses
related to the 2025 Notes and the 2027 Notes for the year ended September 30,
2021:

($ in millions)                                                    2025 Notes             2027 Notes
Coupon interest                                                 $        10.5          $         3.5
Amortization of financing costs and discount                              1.3                    0.3
Effect of interest rate swap                                                -                   (1.1)
 Total interest expense                                         $       

$11.8 2.7 Coupon interest rate (net of the effect of the interest rate swap for the 2027 notes)

                                                         3.500  %               1.813  %


The table below shows the components of interest expense and other liabilities related to the 2025 Notes for the year ended September 30, 2020:


($ in millions)                                     2025 Notes
Coupon interest                                    $     6.3
Amortization of financing costs and discount             0.7
 Total interest expense                            $     7.0
Coupon interest rate                                   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
(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
                                       74
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income from the previous tax year carried forward and distributed in the current tax year. Distributions may also 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, 2022.

                                                                      

Eligible net interest Eligible short term

                          Year Ended                                          Income             Capital Gains
September 30, 2022                                                                   80.8  %                -


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.

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 -
                                       75
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Investment Advisory Agreement” and “- Administrative Services” in the notes to the accompanying consolidated financial statements.

RECENT DEVELOPMENTS

Distribution statement


On November 10, 2022, our Board of Directors declared a quarterly distribution
of $0.18 per share, payable in cash on December 30, 2022 to stockholders of
record on December 15, 2022. On November 10, 2022, our Board of Directors also
declared a special distribution of $0.14 per share payable on December 30, 2022
to stockholders of record on December 15, 2022.





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© Edgar Online, source Previews

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What is a reverse mortgage? Here’s what you need to know https://flight93.org/what-is-a-reverse-mortgage-heres-what-you-need-to-know/ Sat, 12 Nov 2022 14:03:42 +0000 https://flight93.org/what-is-a-reverse-mortgage-heres-what-you-need-to-know/ Buying a home often seems like a promising strategy for building wealth, as your monthly mortgage payments can help you build equity, and home values ​​generally appreciate over time. However, sometimes due to housing market conditions, the value of your home may actually depreciate – and the value of the home may fall below the […]]]>

Buying a home often seems like a promising strategy for building wealth, as your monthly mortgage payments can help you build equity, and home values ​​generally appreciate over time. However, sometimes due to housing market conditions, the value of your home may actually depreciate – and the value of the home may fall below the amount of money you borrowed to pay for it.

This phenomenon is actually known as “underwater mortgage”, which can also be called reverse mortgage.

“A reverse mortgage is when the principal exceeds the value; in other words, you owe more than the actual value of the house,” says Christopher Rotio, executive vice president of Town Title Agency.

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How do you end up with a reverse mortgage?

A reverse mortgage is usually the result of short-term fluctuations in the housing market. So in a market with higher home values, for example, a home buyer will likely need a larger loan to cover the cost of the home.

But if the home’s value plummets for some reason, the loan amount you borrowed doesn’t plummet with it; you will still owe what you borrowed, even if the house is worth less.

“As the economy changes, you find yourself in a situation where home values ​​normalize and come down to earth,” Rotio says. “So it’s not worth the same as it was when purchased.”

Is a reverse mortgage a bad thing?

Market volatility can always be uncomfortable and many people tend to feel inclined to act during this time. But just like dealing with stock market volatility, the best way to deal with real estate market volatility is to do nothing, because the tides will turn again and your home’s value will likely recover over time.

However, you can run into real trouble if you have an upside down mortgage and are trying to sell your home. According to Rotio, if someone in this situation sells their home for an offer that is still less than what they owe on their mortgage, the seller of the home will have to pay the difference to their lender out of pocket. Depending on the situation, this could cost the seller tens of thousands or even hundreds of thousands of dollars.

“I don’t recommend selling if you have an upside down mortgage, but due to extenuating circumstances some people have to sell anyway,” Rotio says. “They should be prepared to pay the difference in this situation.”

What should you do if you have an upside down mortgage?

“Sometimes the best action is inaction,” Rotio says. That sentiment certainly applies here.

Simply avoiding a drastic action like selling your home when the value has dropped will allow your home’s value to rebound over time until you no longer have a reverse mortgage. Rotio also recommends being strategic during this time and making extra mortgage payments so you can pay down the principal faster.

“The beauty of doing this is that once the market stabilizes and values ​​go back up, you’ll have accumulated a lot more equity in your home,” he says. Making extra payments even if you have an upside down mortgage can also ensure that you pay your lender less out of pocket if you were to sell the home before values ​​have had a chance to fully rebound.

Is there a way to avoid an upside down mortgage in the first place?

Before you buy your home, you need to make sure you get an appraisal that makes sense, says Rotio. An appraisal is an assessment of the fair market value of a home. They can be based on a variety of factors, including property condition, home improvements, square footage, number of bedrooms, and other things.

“Generally, an appraisal is the purchase price, but you don’t want to pay too much,” says Rotio. “So negotiating upstream is more important than ever.”

Home appraisals cost more, but some mortgage lenders may waive the fee, so it’s always worth asking if this is something your lender can do. And if you can’t get the fee waived, you can try finding other ways to save on upfront costs. Some lenders, like Ally Bank, do not charge certain lender fees. Other lenders, like SoFi, offer deep savings and cashback offers to eligible homebuyers.

SoFi

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional loans, jumbo loans, HELOC

  • Terms

  • Credit needed

  • Minimum deposit

Allied bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed and adjustable rate mortgages included

  • Types of loans

    Conventional Loans, HomeReady Loan and Jumbo Loans

  • Terms

  • Credit needed

  • Minimum deposit

    3% if you continue with a HomeReady loan

Advantages

  • The Ally HomeReady loan allows a down payment of just under 3%
  • Pre-approval in just three minutes
  • Submission of the application in less than 15 minutes
  • Online support available
  • Existing Ally customers are eligible for a discount that applies to closing costs
  • Does not charge lender fees

The inconvenients

  • Does not offer FHA, USDA, VA or HELOCs loans
  • Mortgages are not available in Hawaii, Nevada, New Hampshire or New York

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.

]]>
Is the green auto loan for you? https://flight93.org/is-the-green-auto-loan-for-you/ Thu, 10 Nov 2022 11:00:55 +0000 https://flight93.org/is-the-green-auto-loan-for-you/ Image source: Getty Images This could eliminate some of those high prices. Key points Some lenders offer green auto loans to owners of qualifying hybrid or electric vehicles. These loans offer lower interest rates, more generous repayment terms, or both. But they can be hard to find. Electric and hybrid vehicles offer the promise of […]]]>

Image source: Getty Images

This could eliminate some of those high prices.


Key points

  • Some lenders offer green auto loans to owners of qualifying hybrid or electric vehicles.
  • These loans offer lower interest rates, more generous repayment terms, or both.
  • But they can be hard to find.

Electric and hybrid vehicles offer the promise of lower maintenance and fuel costs as well as lower emissions, but that price isn’t always easy to swallow. The average electric vehicle costs $10,000 more than the average gas-powered vehicle in 2021, according to the Natural Resources Defense Council. That could change as EVs become more common, but for now, expect a hefty upfront cost when you buy one of these cars.

That might put them out of reach for some, but there’s a little-known financing option that could make all the difference. Here’s what you need to know.

Green auto loans offer special terms for buyers of green vehicles

Green auto loans are similar to conventional auto loans in many ways, but they’re only available to those buying a qualifying hybrid or electric vehicle. Eligible individuals can take advantage of lower interest rates, extended repayment terms, or both, to reduce the monthly cost of financing an electric vehicle.

Discover: These personal loans are the best for debt consolidation

More: Prequalify for a personal loan without affecting your credit score

These loans are becoming more and more popular, although they are far from being a common offer. A few banks have them, but you’re more likely to find them at credit unions.

Each lender has its own rules that dictate which vehicles qualify and what types of rates and repayment terms are available. Some require the vehicle to have SmartWay certification from the Environmental Protection Agency. This title is awarded to the makes and models of vehicles that offer the lowest emissions in their model year.

Many green car loans charge interest rates at least 1% lower than what the lender charges for conventional car loans, and some offer repayment terms of up to 84 months. Spreading your payments over this period may increase the amount of interest you pay over the term of the loan, but it will also significantly reduce your monthly payments.

How to find a green car loan

Before shopping around for a loan, it’s important to do what you can to boost your credit score. All lenders use this information when calculating your interest rate, as it gives them insight into the likelihood of you defaulting on your loan. A lower credit score indicates higher risk and lenders charge these borrowers a higher interest rate.

The next step is to find lenders who offer green auto loans. Start by looking at credit unions and local banks. You can also find lenders online who also offer green car loans. Check out each one and review their eligibility criteria, average rates, and quality of customer service.

Pick a handful for quotes. You will need to know the make and model of the vehicle you plan to buy and the purchase price to do this. If you don’t yet know exactly how much you will pay for the car, you can make an estimate.

Do your best to complete all of your requests about a month apart. Credit bureaus typically count multiple inquiries made within a short period of time as one inquiry to account for normal comparison buying behavior. But if you wait longer, you’ll get more inquiries, which can hurt your credit score.

Once you’ve found a lender that’s right for you, you can complete the paperwork and get the money you need to buy your vehicle. You’ll make monthly payments like you would with a conventional auto loan until you’ve paid off the balance.

And if you’re unable to find green auto loans that are right for you, don’t be afraid to check out some conventional auto loans as well. Some offer discounts for electric vehicles that could help you get an affordable rate, especially if you bundle insurance. By exploring all of your options, you will increase your chances of scoring a lot.

The Ascent’s Best Personal Loans for 2022

Our team of independent experts have pored over the fine print to find the select personal loans that offer competitive rates and low fees. Start by reviewing The Ascent’s best personal loans for 2022.

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Buying a house with medical debt. There is good news. https://flight93.org/buying-a-house-with-medical-debt-there-is-good-news/ Sat, 05 Nov 2022 12:05:34 +0000 https://flight93.org/buying-a-house-with-medical-debt-there-is-good-news/ As a mortgage lender, I am required to review my clients’ entire financial situation, including any debt. Often I see medical collection debt listed. This is one of the things that can prevent a person from getting a loan – or a loan on favorable terms. For people working hard to pay off medical debt, […]]]>

As a mortgage lender, I am required to review my clients’ entire financial situation, including any debt. Often I see medical collection debt listed. This is one of the things that can prevent a person from getting a loan – or a loan on favorable terms.

For people working hard to pay off medical debt, there’s great news from the world of consumer credit reporting.

As of July 1, medical collection debt that is paid is no longer included in credit reports.

Additionally, the time period before unpaid medical collection debt appears on a credit report has increased from six months to one year. The extension gives potential buyers more time to work with insurance and/or healthcare providers to settle their debt before it is flagged on their credit report.

Borrowers may be able to negotiate the amount owed or work out a payment plan. (If a medical collection is wrongly reported, you should always contact the provider and the collection agency, and you can also file a dispute with the credit bureaus.)

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If you still have unpaid medical debt after the initial grace period, collections on your credit report may affect your mortgage eligibility. With FHA loans, the mortgage lender must determine if collection accounts (including medical) have been opened due to the borrower’s disregard for financial obligations, inability to manage debts, or extenuating circumstances.

The mortgage lender must document the reasons for approving a mortgage when the borrower has collection accounts. The borrower must provide a letter of explanation supported by documents. If the medical collection is in dispute, the lender may be able to exclude it when analyzing credit history, although documentation may still be required.

In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical collection debts under $500 in credit reports.

These changes are very important for people who are trying to improve their credit scores.

Here are more tips to increase your score.

  • Pay your bills on time. Payment history has the biggest impact on your credit score: even one or two late payments can have a huge impact on your score. Lenders and other creditors want to make sure you make your payments on time.
  • Keep the balances low. Debt isn’t a bad thing, but the key is how you handle it. If you max out all of your loans and credit cards, your scores will be affected. Keeping your balance below your credit limit will help your scores, as it shows that you are responsible and can manage your spending.
  • Apply for and open credit accounts only as needed. If you need a new account, make sure the terms and conditions are acceptable, keep your balance low, and pay your bill on time.
  • Pay off your debts rather than moving them. Moving debt from one account to another won’t solve anything. You must work to pay off balances consistently.
  • Be patient. Raising your credit score requires long-term regular payments and responsible activity. This kind of behavior demonstrates that you can handle a large credit account like a mortgage.

As we look to 2023, be optimistic about buying a home and ask your mortgage lender about any important credit reporting changes you need to be aware of.

Shikma Rubin is a loan officer at Tidewater Home Funding in Chesapeake. Do you have mortgage questions? Join her at srubin@tidewaterhomefunding.com or 757-490-4726.

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7 questions to ask when refinancing https://flight93.org/7-questions-to-ask-when-refinancing/ Thu, 03 Nov 2022 02:26:55 +0000 https://flight93.org/7-questions-to-ask-when-refinancing/ 2. What types of refinancing options do you offer? If you have decided to refinance, it is essential to find the refinancing method that is right for you. Compare mortgage lenders and the types of refinance products they offer. Keep in mind that a refinance option may be better suited to certain situations — like […]]]>

2. What types of refinancing options do you offer?

If you have decided to refinance, it is essential to find the refinancing method that is right for you. Compare mortgage lenders and the types of refinance products they offer. Keep in mind that a refinance option may be better suited to certain situations — like accessing your home equity — than other options. That’s why it’s important to determine your goals before you go ahead with the refinancing process.

Below are some of the most common refinancing options.

Refinancing at rate and duration

A rate and term refinance, sometimes called “regular refinance” by lenders, is an option that allows you to replace the terms of your mortgage loan with terms that are more favorable to your financial situation. This type of refinancing can allow you to get a lower interest rate, change the term of your mortgage, and change your monthly payments. If you want to take advantage of low mortgage rates or pay off your mortgage sooner, a rate and term refinance may be a smart choice.

Refinancing by withdrawal

A cash refinance gives homeowners the ability to turn the equity in their home into cash. This process involves replacing your current mortgage with a new one with a higher principal balance. The new mortgage amount is the remaining balance of the mortgage plus what you’ve taken out of the equity in your home. After you complete a cash-out refinance, your lender will send you the amount of cash you want to use from the equity in your home.

A cash refinance can be a great option for homeowners who need a lump sum of cash, which can be used to pay off debt, support a savings account, fund a home improvement project and more.

Cash refinancing

Instead of taking money out of the equity in your home that you’ve built up over time, you can refinance to increase the equity in your home by applying more money to your mortgage principal. This refinance option is called a cash refinance and allows you to replace your mortgage with a smaller one after making a one-time lump sum payment.

A cash refinance can help you get better loan terms, like a lower interest rate and lower monthly payments. Plus, it helps reduce the debt you owe on your home.

You don’t always need to refinance. If rates are higher and you don’t want to touch your current mortgage terms, you may be able to perform a mortgage overhaul – a lump sum payment in which your mortgage is re-amortized over the remainder of the term so that your payment is lower – if your lender allows it.

There are also other types of mortgage refinancing, which may be more suitable for your situation. These include an FHA Streamline Refinance, a VA Streamline Refinance, a No Closing Cost Refinance, and a Reverse Mortgage. Be sure to compare refinance types and lenders before making a decision.

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Working Professionals Get Instant Low Interest Cash Loans Through Lamina Brokers https://flight93.org/working-professionals-get-instant-low-interest-cash-loans-through-lamina-brokers/ Mon, 31 Oct 2022 15:11:00 +0000 https://flight93.org/working-professionals-get-instant-low-interest-cash-loans-through-lamina-brokers/ In Vancouver, Canada, Lamina Brokers offers fast, short-term loans with easy repayment policies for eligible consumers. VANCOUVER, BRITISH COLUMBIA, CANADA, Oct. 31, 2022 /EINPresswire.com/ — Life is unpredictable. Everyone sometimes needs a little extra money for unexpected expenses. It could be paying an unexpected increase in house bills this month, a car repair, or investing […]]]>

In Vancouver, Canada, Lamina Brokers offers fast, short-term loans with easy repayment policies for eligible consumers.

VANCOUVER, BRITISH COLUMBIA, CANADA, Oct. 31, 2022 /EINPresswire.com/ — Life is unpredictable. Everyone sometimes needs a little extra money for unexpected expenses. It could be paying an unexpected increase in house bills this month, a car repair, or investing in a new business. Regardless of the money needed, there are many opportunities available in Canada. Pret Rapid, aka quick cash loans, can be one of the perfect solutions in these difficult times. Instant personal loans offer advantages that the traditional loan processing system does not. The system is designed to reduce unnecessary overhead for borrowers and make good use of existing technology. Immediate cash lending agencies like Lamina Brokers have revolutionized the way a loan process is done. They can access their clients’ financial records to find reasonable interest rates for them.

Naturally, people may not know how helpful instant decision cash loans can be for them. They might even wonder if the loans would help with the unexpected financial crisis they are facing. In reality, fast cash loans have many advantages. Additionally, qualified lending agencies help their clients understand that these personal loans are meant to help them rather than increase their debt. They explain to people that these emergency loans are a brilliant idea also because of their convenience. They are easily accessible across the country and designed to put money in the borrower’s pocket as quickly as possible.

One would assume that banks or credit unions are the best places to go when one needs quick access to emergency loans in Canada. This is a reasonable assumption given that many people’s first instinct is to go to one of these establishments when they need money. But there are problems with these conventional banking institutions. Specifically, the loan application and approval processes take a long time. Therefore, people might have to wait while the interest on their debt increases.

On the other hand, agencies such as Lamina Brokers ensure that their borrowers can meet their requirements and complete KYC quickly. They ensure that the lender asks direct questions that do not hide any negative information about the borrower. Once the application is submitted, it will not take long for a decision to be made. The borrower can expect the funds to be wired or transferred electronically to them as soon as the quick loan is finalized.

It can be difficult for people who are unfamiliar with financial products to obtain loans at the lowest interest rates. However, because expert loan brokers like Canadian loan agency Lamina Brokers work with a variety of lenders and institutions, they have the knowledge and skills to compare interest rates and present clients with more reasonable repayment options. For example, after assessing consumers’ financial situation and loan repayment history, they provide them with a list of interest rates. As a result, customers benefit from a clear proposal and a lower interest rate than they would have received if they had directly applied for a bank loan.

People also turn to loan agencies to receive unsecured loans. They want the lenders to guarantee the loan with no mortgage on the amount. It makes personal loans more accessible to working professionals. Borrowers can get enough money to pay unexpected expenses by not presenting any collateral or assets. It is easier to obtain than a secured loan or a credit card. Cash lending agencies also give people enough flexibility to use the money however they want, without explaining it to anyone.

With a decent credit score, the chances of getting a low interest loan are higher. But unfortunately, trying to clear all debts and maintain an above average credit score is no easy task. Even if someone can get a personal loan, the interest rates will likely be higher. A reliable loan agency, however, can provide personalized services to help consumers with low Equifax and TransUnion credit scores. They achieve this by offering credit to the target market, which enables them to demonstrate responsible financial conduct by repaying loans on time.

About Lamina Brokers

A Vancouver-based short-term loan service provider, Lamina Brokers Loan Agency is ready to help customers find the best personal loans. They have over 15 years of experience brokering instant personal loans. Customers with financial problems can get help from experts with advanced training in the financial industry. Online applications take less than 15 minutes and those who are accepted can expect to receive their funds within 24 hours.

Yves Dupuis
Lamina Brokers
+1 844-356-5097
write to us here
Visit us on social media:
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Co-signature Vs. Co-ownership: which is better? https://flight93.org/co-signature-vs-co-ownership-which-is-better/ Fri, 28 Oct 2022 23:30:56 +0000 https://flight93.org/co-signature-vs-co-ownership-which-is-better/ Co-signing and co-ownership of a car are two different ways to approach the car loan application with an additional borrower. In either case, the secondary borrower must have sufficient credit and income to fund the loan themselves. But each has pros and cons, depending on what both parties are looking for. The differences between a […]]]>

Co-signing and co-ownership of a car are two different ways to approach the car loan application with an additional borrower. In either case, the secondary borrower must have sufficient credit and income to fund the loan themselves. But each has pros and cons, depending on what both parties are looking for.

A co-signer is someone who is also responsible for repaying the loan, but has no ownership rights to the vehicle. A co-owner has an equal right to it.

Co-sign a car loan

In the case of a car, the co-signer agrees to cover the monthly repayments if the borrower cannot make them. This is an important decision to make and will affect the credit of the co-signer.

Advantages of co-signing a car loan

  • Qualifying Assistance: A co-signer can help a primary borrower qualify for an auto loan that they wouldn’t otherwise qualify for.
  • Build credit: If the primary borrower can stay on top of payments, the credit of both the primary borrower and the co-signer can be positively affected.
  • Reduce costs: If the co-signer has a very good to excellent credit rating, the primary borrower can benefit from a lower interest rate and fees.

The risks of co-signing on a car loan

  • Responsibility for payments: If the borrower defaults, the co-signer is responsible for all loan repayments.
  • No Legal Claims: The co-signer is not on the title and has no legal claims on the car.

Co-ownership of a car

In the case of a car, both the owner and co-owner are listed on the title. Having a co-owner does not change the fact that the primary borrower owns the property. Depending on the title of the car, the primary borrower may need clearance before they can sell the car.

Benefits of car ownership

  • Security for the co-owner: The co-borrower has the security of having his name on the title.
  • Better terms: If both borrowers have strong credit, the primary borrower may qualify for better terms than applying alone.

Risks associated with joint ownership of a car

  • Equal rights: the co-borrower has the same rights to the car as the main borrower. This means that the co-owner must be involved in the sale or transfer of the car.
  • Insurance: Even if the co-owner does not use the car, he will probably need to be on the insurance policy. This can mean higher costs for both parties involved.

The main difference between co-borrowers and co-signers is the level of investment in the loan.

Co-borrowers have more responsibility and ownership than co-signers. Co-borrowing is best for people who both have good credit and want equal rights to the vehicle, such as a couple who want to buy a car together.

On the other hand, a co-signer is best for a borrower who would not qualify for the loan at all or who needs help qualifying for a higher amount or lower interest rate.

To co-sign on a loan, you must have a stable income and meet the credit score requirements set by the lender. The same goes for being a co-owner, as the credit of both borrowers is taken into account.

Even if you meet the requirements, an open conversation should take place between both parties. Co-signing and co-ownership both involve significant credit risk. Make sure a plan is in place in case the primary borrower cannot pay.

The bottom line

There are many reasons why you may choose to co-sign or co-own a car with another person. Either way, it’s important that both parties are on the same page about what the relationship entails and what’s expected of you both.

Learn more

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Lenders hide information from borrowers | Local company https://flight93.org/lenders-hide-information-from-borrowers-local-company/ Wed, 26 Oct 2022 01:42:00 +0000 https://flight93.org/lenders-hide-information-from-borrowers-local-company/ IF YOU took out a loan to financially survive the Covid-19 pandemic, you are not alone. Although some borrowers have been able to keep pace with their loan repayments, according to recent data released by the Central Bank, loan delinquencies in Trinidad and Tobago have increased slightly over the past three years. When a loan […]]]>

IF YOU took out a loan to financially survive the Covid-19 pandemic, you are not alone.

Although some borrowers have been able to keep pace with their loan repayments, according to recent data released by the Central Bank, loan delinquencies in Trinidad and Tobago have increased slightly over the past three years.

When a loan installment is not paid by the due date, it becomes past due. Overdue loans in the country increased by 0.3% between December 2019 and December 2021. The Central Bank qualifies any loan overdue by 90 days or more as “overdue” or “non-performing”.

Central Bank statistics (see above) show the total amount of consumer (household) loans granted over the past three years by the banking system, including commercial banks and non-bank financial institutions. Also, it displays the proportion of gross loans that are non-performing loans in the banking sector as a percentage.

According to Christine Nanton-Winter, deputy director of external relations at the Central Bank, a non-performing loan ratio (NPL ratio) of 5% or less is often considered to be in the low to acceptable range.

Although there are many reasons why a loan can become non-performing, Express Business has reviewed some of the loans made by commercial banks and non-bank financial institutions.

It was discovered that while many lending institution employees were willing to get information and sign up for loans, many were unwilling to disclose the “final price” or loan rate. specific interest that would be paid for the loan until the loan is approved. loan has been granted.

Many financial organizations visited by Express Business use terms such as “This is an estimate” or “This is not the final amount, you will know once your loan is approved”.

Yet customers nevertheless agree to the terms of the loan without fully realizing how much money they would actually have to repay. Consumers have a right to know what the bottom line is, even though many players in the financial industry go to great lengths to conceal this information.

Express Business recently approached six lending institutions to find out the total amount that would be owed, including interest, if someone borrowed $50,000 for 36 months. All banks have provided estimated monthly payments, and this publication has used that data to determine expected interest rates. See below.

Note that all data are estimates that have been provided by the corresponding institutions. However, based on the information presented above, choosing which institution to take a loan from is just as crucial as the actual amount.

While some customers may find themselves paying just under $10,000 in interest plus the loan amount, others may struggle to pay back almost double the loan amount. Some of the lenders acknowledged the existence of processing fees, while others claimed that other fees were added to the loan amount, which changed the final total. However, none of the financial representatives made a point of disclosing the amount of the processing fees or other charges.

Although Express Business pegged Island Finance’s average annual interest rate at 29.04%, we spoke with two clients who recently borrowed money from the financial institution and produced documentation proving that the Island Finance’s interest rate was considerably higher.

Brenda (pseudonym) said she had just secured a $50,000 60 month unsecured loan from Island Finance and was ready to discuss the details of her financial transaction with Express Business. With an additional administration fee of $1,527.50, a monthly payment of $1,330 and an interest rate of 45.93% per year, Brenda will have paid Island Finance a total of $79,761.60 over a period of five years. She would pay $29,761.60 in interest only.

If Brenda makes a late payment on her loan, Island Finance may impose a late payment fee equal to 5% of the scheduled regular monthly payment.

According to the Island Finance document, failure to meet a payment deadline will result in the accumulation of additional interest as well as a possible impact on the amount of the final payment, interest charges, finance charges, total payments and the overall cost of borrowing.

If Brenda’s income decreases and she is unable to make her monthly payments, her total payment of $79,761.60 could increase significantly.

Brenda told the Express Business that she applied for the loan from Island Finance this year to settle her outstanding debts and raise money to start a small business that would allow her to better support her family and of herself.

She credits the lack of a down payment or collateral requirement, as well as Island Finance’s quick approval process, as leading her to choose them as a lender.

“It was my first loan with Island Finance,” she said. “I needed money quickly, and they did it with no problem. With hindsight, I would have opted for another financial organization that offered a much lower interest rate.

His sister Susan (pseudonym), who had previously borrowed money from Island Finance, admitted that the loan approval process only took a few days. But after considering her decision, she also agreed that Island Finance’s interest rate was just too high.

The Express Business attempted to contact Duane Hinkson, the CEO of Massy, ​​to inquire about its borrowing policies, but did not respond in a timely manner.

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Agent’s Guide to Calming First-Time Home Buyers https://flight93.org/agents-guide-to-calming-first-time-home-buyers/ Sun, 23 Oct 2022 11:07:17 +0000 https://flight93.org/agents-guide-to-calming-first-time-home-buyers/ Buying a home for the first time can be daunting, especially with how the market has changed over the past few years. Rising interest rates and falling prices can create even more doubt among first-time home buyers. That doesn’t mean buying a home is a bad idea, but as an agent you’ll want to be […]]]>

Buying a home for the first time can be daunting, especially with how the market has changed over the past few years. Rising interest rates and falling prices can create even more doubt among first-time home buyers.

That doesn’t mean buying a home is a bad idea, but as an agent you’ll want to be prepared to calm down buyers, especially first-time buyers who may have more anxiety about the property. whole process than someone who’s been there. before.

With first-time buyers accounting for about 34% of home buyers in 2022, according to the 2022 Generational Trends of Home Buyers and Sellers Report, it’s important to know how to work with first-time buyers and help them solve their problems . There have been additional concerns to address recently with the market experiencing rising mortgage rates, homes that have doubled in value, lots of competition and now frequent price reductions, giving first-time home buyers a added worry about buying their dream home.

The first fears of first-time buyers

High mortgage rates and a slowing market are undoubtedly the biggest concerns for homebuyers right now. This, coupled with rising home prices, is making first-time home buyers hesitant to take the plunge. According to the National Association of Realtors, the average home price in the United States hit $350,000 in January 2022 and 65% of buyers say that’s too high.

In addition to rising rates, first-time home buyers have the normal fears of buying the right property, knowing what they can afford, knowing which lender to choose, and putting down a lot of change. for the first time. Being able to address these concerns will make the difference in a home sale, but also whether a home buyer continues with you as a real estate agent rather than someone else.

How vsa agentlemen help calm down first-youhome buyers ime vsworries during this crazy market?

Realtors need to help first-time buyers see that these concerns are normal and part of the process. Just like when an agent starts, there are a lot of questions and concerns from the unknown. Let’s take a look at these concerns and how you can help calm a first-time buyer who has them.

To begin, let’s discuss high mortgage rates. What first-time home buyers don’t realize is that if you have a lower credit score, the interest rate on your mortgage will be higher. Let’s take an example. If someone had a credit score of 700 to 719 with 20% of the mortgage price to pay upfront, the average rate for a 30-year fixed rate mortgage on May 19 was 5.833%, according to Bankrate. On the other hand, if someone had a credit score of 660 to 679 with the same starting rate of 20%, the average mortgage interest rate was 6.66%. If that same person had a credit score of 800 or higher, they probably could have gotten a mortgage interest rate of around 5.5%. Essentially, a person could pay more in points rather than in interest rates.

Helping a buyer who isn’t sure what they can afford is simple – ask them to seek pre-approval from their lender. This will help them understand the most affordable price range to start looking for a home. Don’t forget to let your buyer know that it also helps to shorten the closing process, which sellers will appreciate.

This brings us to buyers who need a lender, but don’t know how to find one. You can start by referring a buyer to your preferred lender if you have one, but it’s also important to help them understand what to look for in a lender if they want to look into a few themselves. They want a lender who will offer a lower interest rate and who has a dedicated person to work with to make the process smoother. A dedicated person also helps when it comes to gathering all the labor-intensive paperwork to get a home loan. One tip I always recommend is to ask the lender to give me a timeline on how long it will take them to close assuming the buyer delivers all the items on time.

For buyers who are afraid to deposit such a large amount of money, they don’t necessarily have to. First-time home buyers have a few loan options available to them – FHA loans, USDA loans, VA loans. FHA (Federal Housing Administration) offers loans with as little as 3% of the total cost of the house for down payment. If a buyer wants to buy in a rural area, they can consider a USDA loan. VA loans are an option for veterans, an active duty member, or a veteran’s spouse.

Many first-time buyers, as well as repeat buyers, are afraid of choosing the wrong property. What if a better option arose after I closed? What if I am missing a good property in my search? Have I broadened my search enough? These questions and more swirl around in the minds of buyers when looking for a home. The truth is, we just don’t know, and those questions will never go away, even if they wait a little longer to see what comes to market. Help them by making a checklist of must-haves for their home. If the house ticks all or most of the boxes, it will help it gain some perspective. Remind them that the best time to plant a tree is today.

Conclusion

Buying a home for the first time is not an easy process, especially in this changing real estate market. Understanding what fears often plague first-time homebuyers can help you prepare well and relieve homebuyer pressure and anxiety as much as possible. As the market and economy change, new concerns are added and others disappear, so be sure to stay up to date on your housing market.

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