Good morning, everyone. I would like to welcome you all to the Oxford Lane Capital Corp. second fiscal quarter 2023 earnings conference call. My name is Brika, and I will be your event specialist operating today's call. After the speaker's remarks, you have the opportunity to ask a question. To do so, please press star one. If you change your mind anytime, please press star two, and for operator assistance, please press star zero. I would now like to hand the call over to our host of today's call, Saul Rosenthal. To begin, sir, Saul, please go ahead when you're ready.
Thank you, operator, and good morning, everyone. Welcome to the Oxford Lane Capital Corp. second fiscal quarter 2023 earnings conference call. I'm joined today by Bruce Rubin, our Chief Financial Officer, and then Debdeep Maji, our Senior Managing Director and Portfolio Manager. Jonathan Cohen, our CEO, is traveling today. Bruce, would you please open our call with a disclosure regarding forward-looking statements?
Sure, Saul. Today's conference call is being recorded. An audio replay of the call will be available for 30 days. Replay information is included in our press release that was issued earlier this morning. Please note that this call is the property of Oxford Lane Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. At this point, please direct your attention to the customary disclosure in this morning's press release regarding forward-looking information. Today's conference call includes forward-looking statements and projections that reflect the company's current views with respect to, among other things, future events and financial performance. We ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from those indicated in these projections. We do not undertake to update our forward-looking statements unless required to do so by law.
During this call, when we use terms defined in the earnings release and also refer to non-GAAP measures. For definitions and reconciliations to GAAP, please refer to our earnings release posted on our website at www.oxfordlanecapital.com. With that, I'll turn the presentation back over to Saul.
Thank you, Bruce. On September 30th, 2023, our net asset value per share stood at $4.92, compared to a net asset value per share of $5.07 as of June 30, 2023. For the quarter ended September 30th, 2023, we recorded GAAP total investment income of approximately $64.7 million, representing an increase of approximately $1.2 million from the prior quarter. The quarter's GAAP total investment income from our portfolio consisted of approximately $61.7 million from our CLO equity and CLO warehouse investments and approximately $3 million from our CLO debt investments and from other income.
Oxford Lane recorded GAAP net investment income of approximately $36 million or $0.23 per share for the quarter ended September 30, compared to approximately $38.7 million or $0.26 per share for the quarter ended June 30. Our core net investment income was approximately $51.1 million or $0.32 per share for the quarter ended September 30, compared with approximately $82.1 million or $0.55 per share for the quarter ended June 30. For the quarter ended September 30th, we recorded net realized losses of approximately $6.5 million and net unrealized depreciation on investments of approximately $25.5 million or $0.21 per share in total. We had a net increase in net assets resulting from operations of approximately $3.9 million or approximately $0.03 per share for the second fiscal quarter.
As of September 30th, the following metrics applied, and we note that one of these metrics represented a total return to shareholders. The weighted average yield of our CLO debt investments at current cost was 15.1%, up from 15.1% as of June 30th. The weighted average effective yield of our CLO equity investments at current cost was 16.1%, up from 15.9% as of June 30th. The weighted average cash distribution yield of our CLO equity investments at current cost was 22.1%, down from 29.4% as of June 30th, primarily resulting from the loss of the benefit of LIBOR floors for the underlying assets.
We note that the cash distribution yields calculated on our CLO equity investments are based on the cash distributions we received or which we were entitled to receive at each respective period end. During the quarter ended September 30th, we issued a total of approximately 8.1 million shares of our common stock pursuant to an at-the-market offering, resulting in net proceeds of approximately $49.2 million. During the quarter ended September 30th, we made additions of CLO investments of approximately $119.4 million, and we received approximately $12 million from sales and repayments. On October 27, our board of directors declared monthly common stock dividend of $0.075 per share for each of the months ending January, February, and March 2023. With that, I'll turn the call over to our portfolio manager, Debdeep Maji.
Thank you, Saul. During the quarter ended September 30th, 2023, the U.S. loan market was volatile. U.S. loan prices, as defined by the Morningstar LSTA U.S. Leveraged Loan Index, increased from 92.16% of par as of June 30th to 95.5% of par as of August 12, before dropping to 91.92% of par as of September 30th. According to LCD, during the quarter, there was pricing dispersion related to credit quality, with BB-rated loan prices increasing 119 basis points or 1.26%. B-rated loan prices decreasing 42 basis points or 0.45% and CCC-rated loan prices decreasing 132 basis points or 1.62% on average.
The 12-month trailing default rate for the Morningstar LSTA U.S. Leveraged Loan Index increased to 0.9% by principal amount at the end of the quarter from 0.28% as of the end of June 2022. Additionally, the distress ratio, defined as the percentage of loans with a price below 80% of par, ended the quarter at approximately 6% compared to 3.65% at the end of June. The drop in U.S. loan prices led to an approximate 2% of par decline in U.S. CLO equity net asset values. Median junior overcollateralization cushions remained flat at approximately 4.69% compared to 4.68% last quarter.
Additionally, we observed loan pools within CLO portfolios modestly increased their weighted average spreads to 351 basis points compared to 349 basis points last quarter. The CLO primary market continues to be challenged, with triple-A's continuing to widen out past SOFR plus 200 basis points after temporarily tightening during the quarter. CLO new issuance reached approximately $110 billion, compared to approximately $140 billion over the same period last year. Given widening liabilities and the challenging new issue arbitrage, along with limited new issue loan calendar, CLO issuance is expected to be limited through the end of the year and is expected to come in well below last year's issuance level of approximately $180 billion.
Oxford Lane continued to be active in the secondary market during the quarter, trading over $170 million notional CLO equity and junior debt. While most of our activity took place in the secondary market this quarter, we added one new issued CLO equity investment during the quarter. As a function of our overall market activity in both markets, we were able to lengthen the weighted average reinvestment period of Oxford Lane's CLO equity portfolio from July of 2025 to September of 2025. In the current market environment, we intend to continue to utilize an opportunistic and unconstrained CLO investment strategy across the U.S. CLO equity, debt, and warehouses as we look to maximize our long-term total return. As a permanent capital vehicle, we've historically been able to take a longer term view towards our investment strategy.
With that, I will turn the call back over to Saul.
Thanks, Deep. Additional information about Oxford Lane's second fiscal quarter performance has been uploaded to our website at www.oxfordlanecapital.com. The operator will now take questions. Operator, please begin the lines.
Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypad. First question comes from the line of Mickey Schleien of Ladenburg. Please go ahead when you are ready.
Yes. Good morning, everyone. Saul, you mentioned that the portfolio's distress ratio climbed to 5%, and obviously loan prices were weak during the quarter. Junior OC cushions actually went up a little bit in your portfolio. Can you maybe help us understand what CLO managers are doing with their portfolios in this, you know, really volatile environment to improve their cushions?
Sure. Good morning, Mickey. I'll let Deep answer that question.
Sure. I think in this environment, you know, clearly there are, you know, downgrades are occurring, and I think CLO managers are looking at making relative value swaps and, you know, trying to clean up their portfolio a little bit. You know, so far we haven't seen triple Cs, you know, really elevate to some of the same levels that we saw during COVID. I think managers are taking the, you know, time in this current environment to, you know, start to clean up their portfolio and maybe sell certain, you know, stress names and make swaps into other names that they think are gonna perform better over the long term, in our estimation.
I understand. Thanks for that. Deep, the debt-to-EBITDA ratio in leveraged loans hit a high of 5.5 x in the third quarter. When you look at that ratio and you think about the likelihood that interest rates will likely go higher over the next few quarters, and there's already existing pressure on borrowers' EBITDA margins, what's your view on how CLO equity cash flows will trend going into next year?
Sure. I think that, you know, clearly interest rates are going higher, and interest coverage ratios are something that we are very mindful of. I think that, you know, CLO managers are assessing their portfolios across various industries and, you know, within each industry to, you know, kind of assess the borrower's ability to pass through costs, and be able to kind of meet their debt service. I think that, you know, we feel confident that our managers are kind of making the right assessments in this sort of environment about those. You know, clearly there is stress in the system and everyone's mindful of the inflation and its impact on input costs, as well as rising rates impact on interest coverage ratios.
I understand. My last question is, you know, we've seen the leveraged loan downgrade to upgrade ratio accelerate. I believe it's hit 2.3 x. Defaults, I think as you mentioned in your prepared remarks, have climbed to almost 1% from virtually nothing a few months ago. With that in mind, where do you see defaults trending, and how do you think that will affect cash flow divergence going into next year?
Yeah. Thank you. Yeah, of course. Again, just to reference back, the default rate was a 20 basis points, 0.28% in June, at June 30, and it's now, as of September 30, 0.9%. So I think that's just to get the numbers there. Yes, we're certainly aware of it. The collateral managers are aware of it. We really don't wanna make projections. You know, we can poll 20 economists on where they think the economy and recession and interest rates and so forth are going, and we'll get different answers, and we're just not, you know, we're not taking a position there.
We're just aware of the fact that this is the case and obviously, more importantly, the collateral managers that we're investing with are aware of it and trying to position their portfolios accordingly.
Okay. Appreciate that. That, that's it for me this morning. Thank you for your time.
Okay. Sure. Thank you, Mickey.
Thank you, Mickey. I would now like to turn the call back to Saul Rosenthal for some closing remarks.
Oh, thank you, operator, and thank you everyone for joining today's conference call, and we look forward to discussing next quarter's results on our next call. Thank you, operator.
Thank you. That does conclude today's call. Thank you all again for joining. You may now disconnect your lines.