Moody’s rates Oaktree Specialty Baa3

Moody’s Investors Service said it assigned a Baa3 long-term issuer rating to Oaktree Specialty Lending Corp., a company externally managed by Oaktree Capital Management, LP.

Oaktree Specialty’s Baa3 long-term issuer rating is supported by the company’s low leverage, strong asset coverage ratio, improving asset quality as a result of the ongoing portfolio transition towards first-lien investments and prudent growth in a competitive lending environment. The rating also reflects the risks to creditors resulting from the lack of diversity in Oaktree’s funding structure, its lower percentage of first-lien loans compared to rated peers, its limited operating history under Oaktree’s management and its small competitive presence in the business development sector.

The outlook is stable.

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