OFS Capital Corp

OFS Capital Corp is a U.S.-based business development company that invests primarily in debt and, to a lesser extent, equity securities of middle-market companies. Its portfolio typically includes privately owned U.S. businesses, with investments structured through first-lien and second-lien loans, structured finance securities, and minority equity positions.

— OFS Capital Corp
%
Senior secured debt55% Loans and debt investments secured by portfolio company assets, including first-lien and second-lien positions.
Structured finance securities20% Credit investments in structured instruments such as subordinated notes and mezzanine debt.
Equity investments15% Minority equity exposure through preferred equity, common equity, warrants and similar instruments.
Fee and interest income10% Income generated from loan interest, fee amortization, accretion and related credit investments.

OFS Capital does not sell products to end consumers; it provides capital to privately held middle-market businesses,...

  • Middle-market private companiesprimary

    U.S. companies with roughly $10 million to $1 billion of revenue that borrow for growth, acquisitions or refinancing.

  • Private equity-sponsored companiesprimary

    Portfolio companies owned by financial sponsors that need structured debt and flexible capital solutions.

  • Owner-operated businessessecondary

    Privately held businesses run by founders or operators that seek long-term capital partners.

  • Structured credit borrowerssecondary

    Issuers of structured finance securities and mezzanine-style instruments that fit the company’s credit mandate.

OFS Capital is focused primarily on investments in the United States, especially U.S. middle-market companies...

  • •Primary exposure is to U.S. middle-market borrowers
  • •Portfolio companies are generally domestic private businesses
  • •No meaningful international operating footprint is disclosed
  • •U.S. credit conditions drive underwriting and portfolio performance
  • •Domestic interest-rate cycles affect borrowing demand and valuations

The company’s strategy is to originate and hold credit investments in U.S. middle-market businesses with stable cash...

01
Originate senior secured middle-market loansshort-term

Senior secured lending is the core of the portfolio and supports downside protection.

02
Maintain disciplined underwriting and monitoringshort-term

Credit selection and ongoing surveillance are essential in private-company lending.

03
Preserve portfolio income through long-duration holdingsmedium-term

The business model depends on recurring interest and fee income over time.

04
Balance debt with selective equity upsidemedium-term

Minority equity and warrants can enhance returns while keeping the portfolio credit-oriented.

OFS Capital is exposed to credit losses, non-accruals, and valuation volatility because it lends to private...

high

Credit deterioration in private middle-market borrowers

The portfolio is concentrated in private companies with limited public information and smaller financial cushions.

Scope
First-lien debt, second-lien debt, structured credit
Materiality
high
high

Non-accruals and restructurings

Problem loans can stop contributing cash income and may require restructuring or sale at a loss.

Scope
Debt investments on non-accrual status
Materiality
high
medium

Interest-rate and financing risk

Borrowing costs and portfolio yields can move differently, affecting spread economics and refinancing options.

Scope
Unsecured notes and revolving credit facilities
Materiality
high
medium

Valuation uncertainty

Portfolio assets are marked to fair value using judgmental assumptions for private instruments.

Scope
Debt, structured finance securities, equity stakes
Materiality
high
medium

Conflicts of interest with affiliated adviser and other clients

OFS Advisor and related personnel serve multiple funds and mandates that may compete for opportunities.

Scope
Investment allocation and advisory decisions
Materiality
medium
Fair value estimation
Reported asset values and unrealized gains/losses
Interest income recognition
Net investment income and quarterly comparability
PIK income and non-cash accruals
Cash distributions and taxable income coverage
Non-accrual accounting
Net investment income and credit quality metrics

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: 29/04/2026