OFS Credit Company (OCCI) NAV Analysis & BDC Portfolio Valuation Factors

Based on my comprehensive analysis of OFS Credit Company (OCCI) and the broader BDC market environment, here is a detailed assessment:

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OFS Credit Company’s estimated NAV range of

represents a significant decline from historical levels. The company’s Q4 FY2025 filing (ending October 31, 2025) reported an actual NAV of $5.46, with management’s November 30, 2025 estimate ranging from $5.01 to $5.11, indicating continued downward pressure [0][1].

• Stock Price:
  $4.87 (as of January 15, 2026) [0]
• P/B Ratio:
  0.89x, indicating slight premium to NAV [0]
• Market Cap:
  $136.49 million [0]
• 52-Week Performance:
  -32.83% [0]

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Period	NAV per Share	Quarterly Change	Cumulative Change
Q1 2023 (Peak)	$6.85	—	0.00%
Q4 2023	$5.58	-2.87%	-18.54%
Q2 2025	$6.13	+14.58%	-10.51%
Q4 2025 (Actual)	$5.46	-10.93%	-20.29%
Current Estimate	$4.87	-3.75%	-28.91%

• Peak NAV:
  $6.85 (January 2023) [0]
• Current NAV Range:
  $4.82-$4.92
• Total Decline from Peak:
  -28.91%
• Average Quarterly Change:
  -2.44%
• Long-term Trend:
  Declining at -$0.13 per quarter (R² = 0.83) [0][2]

The NAV decline accelerated during periods of interest rate volatility, particularly in Q3 FY2025 when the company reported a net loss on investments of $0.55 per share [1].

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BDC portfolios are predominantly composed of floating-rate instruments, creating significant rate sensitivity:

Rate Scenario	Fed Funds Rate	BDC Earnings Impact	NAV Impact
Rate Hike (+50bps)	5.25%	+3-5%	+1-3%
Rates Steady	4.75%	0%	0%
Rate Cut (-25bps)	4.50%	-2-4%	-1-3%
Rate Cut (-50bps)	4.25%	-4-7%	-3-5%
Rate Cut (-100bps)	3.75%	-8-12%	-5-8%

According to Morningstar DBRS and KBRA research, anticipated interest rate cuts in 2026 are expected to pressure BDC earnings, even though loan floors (typically 0.5-1.0%) provide partial mitigation [3][4].

OFS Credit Company specializes in collateralized loan obligation (CLO) equity and debt securities. The primary valuation drivers include:

• Base Interest Rates (SOFR):
  Higher rates generate greater income for CLO equity tranches; rate cuts reduce future income expectations
• Credit Spreads:
  Currently stable but widening for lower-quality borrowers [3]
• Default/Recovery Rates:
  Late-cycle credit risks are emerging; 2025 CLO structures show improved overcollateralization cushions (7.65% for 2025 vintages vs. 5.49% for 2020 and prior) [5]
• Reinvestment Rates:
  Lower rates reduce the income potential when CLOs reinvest maturing loans

Metric	Value
Investment Portfolio Yield	14.35% (Q4 FY2025)
Fair Value of Investments	$256.5 million
Amortized Cost Basis	$325.5 million
Net Investment Income (Quarter)	$6.2 million
Core NII per Share	$0.32
Preferred Stock	$113.9 million

The $69 million difference between amortized cost ($325.5M) and fair value ($256.5M) reflects mark-to-market pressures on CLO holdings [1].

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• Trend:
  Sideways/no clear trend; current trading range: $4.81-$4.93 [0]
• Beta:
  0.68 (less volatile than the broader market) [0]
• MACD:
  No cross, suggesting bullish momentum [0]
• KDJ:
  Bearish signal (K:62, D:73.5, J:38.9) [0]

HOLD (100% of coverage) [0]

The stock is currently trading at a slight premium to estimated NAV, with a P/B ratio of 0.89x [0].

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1. Interest Rate Risk:
   Rate cuts directly reduce floating-rate income; loan floors provide limited protection
2. Credit Quality Risk:
   Late-cycle deterioration emerging; non-performing loans increasing slightly but manageable [3]
3. Liquidity Risk:
   CLO equity tranches have limited secondary market liquidity
4. Prepayment Risk:
   Lower rates may accelerate prepayments, reducing income
5. Regulatory Risk:
   SEC guidance on risk management and liquidity disclosures could impact capital deployment [3][4]

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heading into 2026, supported by solid liquidity, manageable leverage, and strong access to senior unsecured debt and bank credit facilities [4]. However, elevated base rates, mixed macroeconomic signals, and geopolitical risks warrant caution.

For OFS Credit specifically, the company’s 14.35% portfolio yield provides income support, but continued NAV pressure from unrealized losses and distribution payments exceeding NII ($0.345 vs $0.22 per share) creates headwinds [1].

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[0]金灵API数据 - Company overview, technical analysis, and market data for OCCI

[1] OFS Credit Company Announces Financial Results for the Fourth Fiscal Quarter 2025 (Business Wire) - https://www.businesswire.com/news/home/20251210632777/en/

[2] OFS Credit Company Provides November 2025 Net Asset Value Update - https://ir.ofscreditcompany.com/news-releases/news-release-details/

[3] 2025 BDC Market Overview and 2026 Future Outlook (Deloitte/FIN Solutions) - https://www.dfinsolutions.com/knowledge-hub/blog/2025-bdc-market-overview-and-future-outlook

[4] KBRA Private Credit Business Development Company Ratings Compendium Q3 2025 and 2026 Outlook - https://www.kbra.com/publications/fpnXFJSr/

[5] S&P Global Ratings - Scenario Analysis: How Resilient Are Middle-Market CLO Ratings (2025 Update) - https://www.spglobal.com/ratings/en/regulatory/article/

[6] What’s in store for BDCs in 2026? (Seeking Alpha/Morningstar DBRS) - https://seekingalpha.com/news/4530152-whats-in-store-for-bdcs-in-2026