NEW YORK, March 15, 2016 (GLOBE NEWSWIRE) — OHA Investment Corporation (Nasdaq:OHAI) (the “Company”) yesterday announced its financial results for the quarter and year ended December 31, 2015 and announced a quarterly distribution of $0.06 per share. Management will discuss the Company’s results summarized below on a conference call on Wednesday, March 16, 2016, at 10:00 a.m. Eastern Time.

Summary results for the quarter ended December 31, 2015:
Total investment income:$6.2 million, or $0.31 per share
Net investment income:$3.2 million, or $0.16 per share
Net realized and unrealized losses: $25.4 million, or $1.26 per share
Net asset value:$110.8 million, or $5.49 per share
New portfolio investments during the quarter:$25.3 million⁽¹⁾
Fair value of portfolio investments:$174.7 million

Portfolio Activity – Three months ended December 31, 2015
The fair value of our investment portfolio was $174.7 million at December 31, 2015, decreasing 9.5% compared to September 30, 2015 and 0.8% compared to December 31, 2014. During the fourth quarter of 2015, the Company made $25.8 million of new investments, all outside the energy industry, and had realizations totaling $20.6 million. The concentration of our investment portfolio in the energy sector decreased to 41% at December 31, 2015, compared to 64% at December 31, 2014. The current weighted average yield of our portfolio based on the cost and fair value of our yielding investments was 11.0% and 13.3%, respectively, as of December 31, 2015.

Our new investments added in the fourth quarter included a $12.2 million second lien term loan to Kronos Incorporated, a global workforce management software company, a $7.9 million addition to our investment in senior unsecured notes issued by TIBCO Software, and a $5.2 million second lien term loan to Berlin Packaging, a hybrid packaging supplier of custom and stock packaging and related services for the food, beverage, household and personal care, and healthcare markets.

Realizations during the quarter totaled $20.6 million and consisted of the full repayment of our Foundation Building Materials second lien term loan in the amount of $18.7 million, the sale of a portion of our first lien senior secured notes issued by Synarc-BioCore Holdings, LLC in the amount of $1.8 million at our cost, and scheduled amortization on existing investments.

Operating Results – Three months ended December 31, 2015
Investment income totaled $6.2 million for the fourth quarter of 2015, increasing 20.4% compared to $5.2 million in the corresponding quarter of 2014. The increase in investment income during the fourth quarter of 2015 was primarily as a result of an increase in average portfolio investment balance of $39.7 million and an increase of $0.4 million in prepayment premiums, amendment fees and default interest earned, partially offset by lower weighted average investment income yield.

Operating expenses for the fourth quarter of 2015 were $3.0 million, an increase of $0.5 million, or 18.8%, compared to operating expenses for the fourth quarter of 2014. The increase was attributable to higher borrowing costs and higher management and incentive fees in 2015, partially offset by lower professional and administrative expenses. Management and incentive fees in the fourth quarter of 2015 were $1.0 million higher than in the fourth quarter of 2014, reflecting the $0.8 million incentive fee incurred in the fourth quarter of 2015.In addition, borrowing costs were higher by $0.4 million in the fourth quarter of 2015 due to greater utilization of our credit facility.The increase in expenses were partially offset by $0.4 million in lower professional and administrative expenses and a $0.5 million credit applied from OHA related to expenses in excess of the $2.5 million Cap under the Investment Advisory Agreement and the Administration Agreement in the fourth quarter of 2015.

The resulting net investment income was $3.2 million, or $0.16 per share, for the fourth quarter of 2015, compared to $2.6 million, or $0.13 per share, for the fourth quarter of 2014. 

We recorded net realized and unrealized losses on investments totaling $25.4 million, or $1.26 per share, during the fourth quarter of 2015, compared to $12.3 million, or $0.60 per share, during the fourth quarter of 2014. Losses recorded in the fourth quarter of 2015 totaled $26.3 million.Major components of the losses were concentrated in our energy related investments which include the Castex Energy 2005 redeemable preferred units, the Talos Production senior unsecured notes, the limited-term overriding royalty interest in certain oil and gas properties operated by Bennu Oil and Gas (formerly operated by ATP Oil & Gas Corporation), the Contour Highwall senior secured term loan, and the Shoreline Energy, LLC second lien term loan.

Overall, we experienced a net decrease in net assets resulting from operations of $22.2 million, or $1.10 per share, for the fourth quarter of 2015. After declaring a quarterly dividend during the period of $0.12 per share, our net asset value decreased 18.2%, from $6.71 per share as of September 30, 2015 to $5.49 per share as of December 31, 2015.

Operating Results – Year ended December 31, 2015

Investment income totaled $22.0 million for the year ended December 31, 2015, decreasing 0.3% compared to $22.1 million in 2014. The decrease in 2015 was as a result of a decline in the weighted average investment income yield of 9.4% in 2015 from 11.0% in 2014, partially offset by an increase in the average portfolio investment balance of $21.9 million plus $1.3 million in prepayment premiums, amendment fees and default interest earned.

Operating expenses in 2015 totaled $12.0 million, a decrease of $6.8 million, or 36.2%, compared to 2014. Management fees were lower in 2015 primarily as a result of the lower base management fee structure in the Investment Advisory Agreement with OHA as compared to the base management fee structure under our former investment advisory agreement.During 2014 we also incurred $6.0 million of non-recurring costs related to our strategic alternatives review process, which ultimately resulted in the appointment of OHA as our new investment advisor as of September 30, 2014.Professional fees increased during 2015 compared to 2014, primarily due to legal fees and recruitment fees. Other general and administrative expenses decreased during 2015 compared to 2014, as a result of costs incurred in connection with our shelf registration statement that expired in the second quarter of 2014 and lower personnel costs, partially offset by settlement expenses related to our ATP legal proceedings.