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CLO Equity Funds will annouce Q1 2026 Results Starting Tomorrow, Expect Lower NII and Continued Historically Strong Divdidend Coverage.
- Sean Dougherty
- May 18
- 2 min read
Tomorrow is a big day for the CLO equity funds, most are reporting Q1 2026 results. See list below:
OCCI and XFLT haven’t announced when they will host their Q1 2026 financial results yet but OCCI provided investors with an estimated Q1 2026 (April 30, 2026) NII between $0.13 - $0.17, if you assume NII of $0.15, that would be 21% drop from Q4 2025 (January 31, 2026) NII of $0.19. SPMC also provided investors with a projected Q1 2026 NII of $0.34, a drop of 23% from Q4 2025 of $0.44.
I expected the other funds will follow suit with lower reported Q1 NIIs, this continues the trend that started in 2024. Obviously, I will be waiting for any insights into improvements in NIIs on the conference calls.
One quick note, I gave up trying to accurately guess these funds future NIIs, I am simply not good at it. I just took SPMC’s and OCCI’s results and generally applies a similar loss rate tailored to each fund’s recent history. I have illusions that my projections will be very accurate other than I believe all the funds NIIs will be down.
I want to note that even though NIIs continue to fall, after the recent dividend cuts by ECC, OCCI, and OXLC, their dividends have never been more secure. See chart below:
Even with the projected significant cuts in Q1 2026 NIIs, most funds’ dividends are still historically well covered, with only PDCC’s and SPMC’s NII dividend coverage lagging. I would guess that these two funds would join the others and cut their dividends.
Finally, with the historically high CNII dividend coverage, I believe that most of these funds will have to declare a large special dividend, probably early in 2027 to stay in compliance with 90% taxable income distribution RIC regulations.
I will live stream my thoughts while listening to the conference calls tomorrow. Please remeber to post any comments or questiosns. I will try to respond quicly.
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