Trying to Assign a Credit Rating to OFS Credit Company

In a new analysis of OFS Credit Company Inc. (“OCCI”), the author takes on the task of playing credit‑rating agency by applying Moody’s Investors Service’ methodology for business‑development companies (BDCs) to assess OCCI’s credit profile. The company primarily invests in CLO (collateralised loan obligation) equity securities—an asset class considered much riskier than typical BDC holdings or corporate bonds. On the credit‑rating spectrum, OCCI earns a hypothetical grade equivalent to “Ba3”—a rating positioned at the speculative end of the credit scale. This grade reflects its strong liquidity but is weighed down by weak profitability, elevated fees, and substantial asset‑risk exposure due to its reliance on CLO equity. The article underscores the inherent subjectivity in credit assessments: different analysts might arrive at very different conclusions based on how they weigh each risk factor. For potential investors, the key takeaway is that while OCCI’s liquidity is a positive, its business model involves heightened risk that may not be clearly reflected in its public face. #OFScredit #BDCrating #CLOequityRisk #investorrisk #SlimScan #GrowthStocks #CANSLIM