Terms

Series

5.25% Series E Term Preferred Stock Due 2026

Liquidation Preference

$25.00

Coupon Rate

5.25%

Rate Type

Fixed

Annual Dividend

$1.31

Payment Frequency

Monthly

Cumulative

Yes

Perpetual

No

Convertible

No

Callable

Yes

First Call Date

December 31, 2023

First Call Price

$25.00

Mandatory Redemption Date

December 31, 2026

Capital Stack Ranking

Junior To: Senior Indebtedness, Borrowings And Other Debt Obligations; Pari Passu With: 6.875% Series A Term Preferred Stock Due 2024, 6.60% Series B Term Preferred Stock Due 2023, 6.125% Series C Term Preferred Stock Due 2026, 6.00% Series D Term Preferred Stock Due 2026, Any Future Preferred Stock; Senior To: Common Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Ordinary

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

1,220,000

Prospectus Summary

OFS Credit Company, Inc. (OCCI), a non-diversified closed-end management investment company focused on CLO equity and debt securities, is offering 1,220,000 shares of its 5.25% Series E Term Preferred Stock Due 2026 at a $25 liquidation preference. Dividends are paid monthly at an annual rate of $1.3125 per share (5.25% of par), fixed for the life of the security. The preferred stock is cumulative — if dividends are missed, they accrue and must be paid before any distributions can be made to common stockholders. The company is required to redeem all shares at $25 on December 31, 2026, with an optional redemption right at $25 beginning December 31, 2023. This is not a depositary share; investors own shares directly. The Series E Term Preferred Stock ranks senior to OFS Credit's common stock and pari passu with the company's four other outstanding preferred series (Series A through D). It is junior to all of the company's debt obligations and senior borrowings. As a 1940 Act-registered closed-end fund, OFS Credit must maintain asset coverage of at least 200% over aggregate preferred stock liquidation value plus senior debt; if asset coverage falls below 200%, the company is required to redeem preferred shares until compliance is restored. This mandatory regulatory redemption provision is a structural risk — a deterioration in portfolio values could force an early, partial redemption at an inopportune time. There is no structural subordination concern since OCCI is the operating entity, not a holding company above a regulated subsidiary. At the $25 offering price, the Series E Term Preferred Stock yields 5.25% annually ($1.3125/share), paid in monthly installments commencing December 31, 2021. Because OFS Credit is structured as a Regulated Investment Company (RIC), dividend tax treatment depends on the character of income passed through by the RIC — dividends may not qualify for the reduced 15%/20% qualified dividend income (QDI) rate or the corporate dividends-received deduction (DRD), as RIC distributions sourced from interest income are generally taxable as ordinary income. The shares are unrated, adding a pricing risk premium. Dividend payments could be interrupted if future debt covenants prohibit equity distributions or if the company's asset coverage falls and redemption obligations consume available cash.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the company has unpaid dividends on any outstanding preferred stock for two or more years, preferred holders as a class may elect a majority of directors; additionally, future indebtedness terms could block dividend payments on the Series E Term Preferred Stock under certain conditions, and dividends on common stock are blocked when preferred dividends are in arrears.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 59 (Average)