Bill Mendel – IR Bilal Rashid – Chairman & CEO Jeff Cerny – CFO & Treasurer

Welcome to OFS Capital Corporation's Third Quarter 2014 Earnings Conference Call. (Operator Instructions). It is my pleasure to turn the call over to Mr. Bill Mendel. Mr. Mendel, you may begin.

Thank you. Good morning, everyone. With me today is Bilal Rashid, Chairman and Chief Executive Officer, and Jeff Cerny, our Chief Financial Officer and Treasurer. Please note we issued a press release this morning announcing our third quarter results. This was press releases was subsequently filed on Form 8-K with the SEC. Both documents can be obtained under the Investor Relations section of our website at ofscapital.com. Before we begin please note that statements made on this call and webcast may constitute forward-looking statements within the meaning of the Securities Act of 1933 as amended. Such statements reflect various assumptions by OFS Capital concerning anticipated results and are not guarantees of future performance, and are subject to known and unknown uncertainties and other factors that could cause actual results to differ materially from such statements. Uncertainties and other factors are in many ways beyond management's control including the risk factors described from time to time in our filings with the Securities and Exchange Commission. Although we believe these assumptions are reasonable, any of those assumptions could prove to be inaccurate and as a result the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on the forward-looking statements. OFS Capital undertakes no duty to update any forward-looking statements made herein. All forward-looking statements speak only as of the date and time of this call. Before we begin, a replay of this call will be available until November 17th, beginning approximately one hour after we conclude this call. Alternatively, the webcast will be available for the next 90 days. To access either replay please visit the Investor Relations section of our website at ofscapital.com. With that I will turn the call over to Bilal.

Good morning and welcome. As you probably saw, we issued a press release earlier this morning detailing our performance in the third quarter. I'm happy to report that we have made significant progress in increasing the origination of assets in our SBIC while maintaining our longstanding underwriting standards. On today's call I would like to highlight three key points. First, I would like to comment on our increased origination activities in the SBIC. Second, I want to focus on the increase in our earnings and the reasons for this increase. And third, I would like to outline our growth plans for the future. To my first point, our origination efforts are bearing fruit, and months of deliberate and thoughtful effort is beginning to pay off. As you saw from the press release, new originations in the SBIC for the third quarter were $65.1 million which significantly exceeded our quarterly target of $30 million. The higher dollar amount is a direct result of intense focus by our originations and underwriting team, greater efficiency in deal sourcing and evaluation, and the benefits of our external manager's previous efforts to enhance our origination resources. The OFS brand is increasingly being recognized by middle market borrowers. They are rewarding us for our responsiveness in providing flexible capital solutions. This increase in brand awareness among market participants has also made the sourcing of deals more efficient. This has also led to repeat business. As a result, we are seeing a higher percentage of potential deals that fit our underwriting criteria. Additionally, our success in originating our own deals is having a multiplier effect on our overall origination capacity. As resource deals and bring other lenders into our deals, these same lenders are bringing us into their deals. As we continue to grow our origination pace,…

Thank you, Bilal. Turning to our third quarter results, our investment portfolio totaled $266.2 million on a fair value basis as of September 30th equating to 98% of cost. The portfolio was comprised of 57 companies, 39 in the senior loan fund and 18 in the SBIC fund. As a percentage of fair value at quarter-end, our investments were comprised of approximately 88% in senior secured loans, 7% in subordinated debt investments and 5% in equity investments. At September 30th, the 57 companies in our portfolio were diversified across 19 industries. Our largest portfolio company accounted for 5.5% of the aggregate fair value of our portfolio. Additionally, our five largest investments accounted for just over 23% of the portfolio's total fair value at September 30th. Our average investment in each portfolio company was approximately $4.7 million at fair value as of September 30th. The weighted average yield to fair value on our debt investments was approximately 9.1% versus 8.1% as of June 30th. This 1% pickup in weighted average yield to fair value reflects the ramp-up in our SBIC fund relative to the scene your loan fund and was driver of our $0.08 increase in net investment income per share since the second quarter. As of September 30th, the weighted average yield to fair value was 6.8% on debt investments in the senior loan fund and 11.8% on investments in the SBIC fund. Our two non-accruals were omitted from the weighted average yield to fair value calculation. At the end of the third quarter, floating rate loans comprised 82% of our loan portfolio. All of our floating rate loans contain LIBOR floors. During our second quarter earnings call on August 8th, we noted that the company could benefit from a potential decline in repricing amendments in the senior loan fund.…

Thank you, Jeff. To summarize, we’ve prudently increased the pace of originations in our SBIC portfolio and significantly increased our net investment income. We feel good about the quality and quantity of deals in our pipeline. As a result of our increased pace of originations, we have also increased our efforts to raise additional capital to grow our company. Rest assured, we will only do it in a manner that is accretive to shareholders. Overall, I'm encouraged by how OFS Capital is working. The company is well positioned to win deals in the middle markets. We are working smarter and getting more efficient in sourcing, evaluating and closing transactions. There is a sense of excitement among the staff about our performance. We have also been receiving positive feedback from our clients, which has manifested itself in repeat business. With that, operator, please open up the call for questions.

(Operator Instructions). As we have no questions, our question and answer portion of the call has closed. I will now turn it back over to Bilal Rashid for any final comments.

Thank you all for joining our call today. We look forward to speaking with everyone again on our next call. Operator, you may now end the call.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.