Oaktree Specialty Lending : Q4 2020 Earnings Presentation

Fourth Quarter

Fiscal Year 2020

Earnings

Presentation

November 19, 2020

Nasdaq: OCSL

Forward Looking Statements

Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation may include statements as to: our future operating results and distribution projections; the ability of Oaktree Fund Advisors, LLC ("Oaktree") to reposition our portfolio and to implement Oaktree's future plans with respect to our business; the ability of Oaktree and its affiliates to attract and retain highly talented professionals; our business prospects and the prospects of our portfolio companies; the impact of the investments that we expect to make; the ability of our portfolio companies to achieve their objectives; our expected financings and investments and additional leverage we may seek to incur in the future; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our portfolio companies; and the cost or potential outcome of any litigation to which we may be a party. In addition, words such as "anticipate," "believe," "expect," "seek," "plan," "should," "estimate," "project" and "intend" indicate forward- looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this presentation involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Risk Factors" and elsewhere in our annual report on Form 10-K for the fiscal year ended September 30, 2020. Other factors that could cause actual results to differ materially include: changes or potential disruptions in our operations, the economy, financial markets or political environment; risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or regulated investment companies; general considerations associated with the COVID-19 pandemic; the ability of the parties to consummate the two-step merger (the "Mergers") of Oaktree Strategic Income Corporation ("OCSI") with and into OCSL on the expected timeline, or at all; the ability to realize the anticipated benefits of the Mergers; the effects of disruption on our business from the proposed Mergers; the combined company's plans, expectations, objectives and intentions, as a result of the Mergers; any potential termination of the Merger Agreement; the actions of our stockholders or the stockholders of OCSI with respect to the proposals submitted for their approval in connection with the Mergers; and other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.

We have based the forward-looking statements included in this presentation on information available to us on the date of this presentation, and we assume no obligation to update any such forward- looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Additional Information and Where to Find It

In connection with the Mergers, OCSI and OCSL plan to file with the SEC and mail to their respective stockholders a joint proxy statement on Schedule 14A (the "Joint Proxy Statement"), and OCSL plans to file with the SEC a registration statement on Form N-14 (the "Registration Statement") that will include the Joint Proxy Statement and a prospectus of OCSL. The Joint Proxy Statement and the Registration Statement will each contain important information about OCSI, OCSL, the Mergers and related matters. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

STOCKHOLDERS OF OCSI AND OCSL ARE URGED TO READ THE JOINT PROXY STATEMENT AND REGISTRATION STATEMENT, AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT OCSI, OCSL, THE MERGERS AND RELATED MATTERS. Investors and security holders will be able to obtain the documents filed with the SEC free of charge at the SEC's website, http://www.sec.gov or, for documents filed by OCSI, from OCSI's website at http://www.oaktreestrategicincome.com and, for documents filed by OCSL, from OCSL's website at http://www.oaktreespecialtylending.com.

Participants in the Solicitation

OCSI, its directors, certain of its executive officers and certain employees and officers of Oaktree and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the Mergers. Information about the directors and executive officers of OCSI is set forth in its proxy statement for its 2020 Annual Meeting of Stockholders, which was filed with the SEC on January 13, 2020. OCSL, its directors, certain of its executive officers and certain employees and officers of Oaktree and its affiliates may be deemed to be participants in the solicitation of proxies in connection with the Mergers. Information about the directors and executive officers of OCSL is set forth in its proxy statement for its 2020 Annual Meeting of Stockholders, which was filed with the SEC on January 13, 2020. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the OCSI and OCSL stockholders in connection with the Mergers will be contained in the Joint Proxy Statement when such document becomes available. These documents may be obtained free of charge from the sources indicated above.

No Offer or Solicitation

This presentation is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this presentation is not, and under no circumstances is it to be construed as, an offer to sell or a solicitation of an offer to purchase any securities in OCSI, OCSL or in any fund or other investment vehicle managed by Oaktree or any of its affiliates.

Unless otherwise indicated, data provided herein are dated as of September 30, 2020.

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Accomplishments for the Fiscal Year Ended September 30, 2020

Key Accomplishments

1. Strong new investment activity
2. Solid portfolio performance amid challenging market environment
3. Expanded capital structure capacity and reduced cost of funding

Originations Activity

($ in millions, at fair value)

$300		$273	$261	10.6%	12.0%
$250	8.1%				10.0%
$200	7.9%	10.5%		8.0%
$150	$134			$148	6.0%
$100					4.0%
$50		1.5%			2.0%
		0.3%	0.2%
	1.9%
$0				0.0%
12/31/19	3/31/20	6/30/20	9/30/20

New Investment Commitments		Yield on New Investment Commitments

USD 3M LIBOR

NAV Per Share		Capital Structure Evolution1

	NAV rebound:		($ in millions)
				$1,000
	98% of NAV as of
	December 31, 2020	$861			$300 million
			$86	$161 million	$300	unsecured notes:
			3.5% interest
			unsecured notes:
			$75		rate
				6.0% wtd. avg.
			$385	interest rate	$285
$6.61
$5.34	$6.09	$6.49
			$315		$415

12/31/19	3/31/20	6/30/20	9/30/20	9/30/19	9/30/20
						Credit Facility Drawn		Credit Facility Available

1 On October 28, 2020, the Company increased the size of its credit facility by $75 million to $775 million in connection with its exercise of the accordion feature.	2

Highlights for the Quarter Ended September 30, 2020

	•	$0.17 per share for the quarter ended September 30, 2020, up as compared to $0.12 for the quarter ended June 30, 2020,
Adjusted Net Investment		primarily reflecting higher make-whole interest income, original issue discount acceleration and prepayment fees
Income1	•	resulting from investment exits
	GAAP net investment income was $0.17 per share for the quarter ended September 30, 2020
	•	Declared a cash distribution of $0.11 per share, an increase of 5% ($0.005 per share) from the prior distribution; second
Dividend		consecutive quarter with a distribution increase
	•	Distribution will be payable on December 31, 2020 to stockholders of record as of December 15, 2020
	•	$6.49 per share as of September 30, 2020, up 6.5% as compared to $6.09 as of June 30, 2020
Net Asset Value	•	Increase primarily due to unrealized gains resulting from price increases on liquid debt investments and the impact of
		tighter credit spreads on private investment valuations, realized gains on equity investments and undistributed net
		investment income
	•	$148 million of new investment commitments; 10.6% weighted average yield on new debt investments
Investment Activity	•	$146 million of new investment fundings and received $184 million of proceeds from prepayments, exits, other
		paydowns and sales
	•	$1.6 billion at fair value diversified across 113 portfolio companies
Investment Portfolio	•	8.3% weighted average yield on debt investments as of September 30, 2020, up as compared to 8.1% as of June 30,
	2020
	•	0.1% non-accruals at fair value in two portfolio companies as of September 30, 2020, down from 0.2% in three
		companies as of June 30, 2020
	•	0.78x total debt to equity ratio; 0.74x net debt to equity ratio
Capital Structure &	•	$715 million total debt outstanding
Liquidity	•	Strong liquidity with $39 million of cash and $285 million of undrawn capacity on credit facility; $158 million of

unfunded commitments, $94 million of which are eligible to be drawn2

1. See page 22 for a description of this non-GAAP measure and a reconciliation from net investment income per share to adjusted net investment income per share.
2. Approximately $63.5 million of unfunded commitments were ineligible to be immediately drawn due to certain milestones that must be met by portfolio companies.

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