Good morning or good afternoon all, welcome to the Oxford Square Capital Corp.'s First Quarter 2023 earnings conference call. My name is Adam, I'll be your operator for today. If you'd like to ask a question in the Q&A portion of today's call, you may do so by pressing star one on your telephone keypad to enter the queue. I will now hand the floor over to Saul Rosenthal to begin. Saul, please go ahead when you are ready.
Thank you, operator. Good morning, everyone. Welcome to the Oxford Square Capital Corp First Quarter 2023 Earnings Conference C all. I'm joined today by Bruce Rubin, our Chief Financial Officer, and Kevin Yonon, our Managing Director and Portfolio Manager. 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 conference call will be available for 30 days. Replay information is included in our press release that was issued this morning. Please note that this call is the property of Oxford Square Capital Corp., and the 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 can 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. To obtain copies of our latest SEC filings, please visit our website at www.oxfordsquarecapital.com. With that, I'll turn the call back over to Saul.
Thank you, Bruce. For the quarter ended March 31st, Oxford Square's net investment income was approximately six and a half million dollars or $0.13 per share, which was unchanged from the prior quarter. Our net asset value per share stood at $2.80 compared to the net asset value per share of $2.78 for the prior quarter. For the first quarter, we recorded total investment income of approximately $12.9 million as compared to approximately $11.9 million in the prior quarter. That increase in total investment income was principally driven by an increase in interest income from our loan portfolio.
In the first quarter, we recorded net unrealized depreciation on investments of approximately $220,000 or less than $0.01 per share, compared to net unrealized depreciation on investments of approximately $29.4 million or 0.59 per share for the prior quarter. There were no realization events during this first quarter. During the first quarter, our investment activity consisted of purchases of approximately $8.2 million and repayments of approximately $330,000. There were no sales during the quarter. As of March 31st, we held cash and cash equivalents of approximately $10.8 million. On April 25, 2023, our board of directors declared monthly distributions of $0.035 per share for each of the months ending July, August, and September 2023.
Additional details regarding record and payment date information can be found in our press release that was issued this morning. With that, I'll turn the call over to our Portfolio Manager, Kevin Yonon, to discuss the loan market.
Thank you, Saul. During the quarter ended March 31, 2023, the U.S. loan market performance improved versus the prior quarter. U.S. loan prices, as defined by the Morningstar LSTA US Leveraged Loan Index, increased from 92.44% of par as of December 31st to 94.71% of par as of February 9th, before dropping to 93.38% of par as of March 31. According to LCD, during the quarter, there was some pricing dispersion related to credit quality, with double B-rated loan prices increasing 17 basis points or 0.18%, B-rated loan prices increasing 165 basis points or 1.78%, and triple C-rated loan prices increasing 270 basis points or 3.64% on average.
The 12-month term default rate for the Morningstar LSTA US Leveraged Loan Index increased to 1.35% by principal amount at the end of the quarter from 0.70% at the end of December 2022. Additionally, for the stress ratio, defined as the percentage of loans with a price below 80% of par into the quarter at 6.3% compared to approximately 7.4% at the end of December 2022. During the quarter ended March 31, 2023, primary market issuance was approximately $45 billion, representing a 61% decline versus the quarter ended March 31st, 2022. This was driven by lower M&A and LBO activity, partly offset by higher refinancing activity.
At the same time, U.S. loan fund outflows, as measured by Lipper, were approximately $8.2 billion for the quarter ending March 31st, 2023. We continue to focus on portfolio management strategies designed to maximize our long-term total return. As a permanent capital vehicle, we certainly have been able to take a longer-term view towards our investment strategy. With that, I will turn the call back over to Saul.
Thank you, Kevin. Additional information about Oxford Square Capital Corp's first quarter performance has been posted to our website at www.oxfordsquarecapital.com. With that, operator, we will now open the discussion for questions.
Thank you. As a reminder, if you'd like to ask a question today, please press star followed by one on your telephone keypad to enter the queue. Remember, preparing to ask your question, please ensure your headset is fully plugged in and unmuted locally. Star one to ask a question. Now our first question today comes from Mickey Schleien from Ladenburg. Mickey, please go ahead. Your line is open.
Yes, good morning, everyone. Saul, it looks like about half of your CLO investments are beyond their reinvestment period, and I'd like to ask and understand what percentage of those are also failing their weighted average life test?
Hang on a second. Let's punch up that information. Actually, we have one of our senior investment team members here with us. I'm sorry, Mickey, we actually don't have that statistic readily handy, but we're happy to follow up offline.
I'll follow up with you. My understanding is that for the market overall, you know, a significant number of those CLOs beyond the reinvestment period are failing their weighted average life's tests. With CLO liability spread still quite wide, meaning the refinancing and reset opportunity is limited. When we think about those CLOs and their managers looking to buy short duration loans to meet the weighted average life test, how do you see those CLO cash flows developing assuming everything else remains equal?
All right. I'm gonna turn the call to Hooman Banafsheha, a senior member of our investment team to address that.
Hey, Mickey. Right. As you noted, that is a part of a CLO structure. Within the indentures there's also a lot of different profiles that allow CLO managers to continue to reinvest despite being outside of the reinvestment period if the weighted average life test is failing. Some of them are one touch tests where they could fail as long as they maintain and improve. Given the current conditions in the secondary market, managers are diligently pursuing or seeing ample opportunities to buy loans that fit their criteria and kind of continue to let them reinvest and build out portfolios.
Okay, that's helpful. I also see that four out of the fund, 21 CLOs have negative junior OC cushions, but only $100,000 of cash flow was diverted, which looks like only about 1% of the total cash flow for that segment. Could you help us understand that relationship?
Right. There's only two partial diversions for roughly, I think, 60 days until number. Some of those tests won't apply after the deals are out of their reinvestment period.
Okay. That's helpful. That's it for me this,
Yeah, Mickey. Yeah. thank you.
No, go ahead, Saul.
I was just gonna say that as Hooman was saying that the test post reinvestment period test may not be applicable. In other words, they'd be failing the OC test and yet still have a full payoff. I think that was the point.
That's helpful. That's it for me this morning. Thank you for your time.
Great. Thank you, Mickey. Operator, any other questions?
Nothing further in the queue at present. As a reminder, that's star followed by one on your telephone keypad to enter the queue. As we have no further questions at this time, I'll hand it back to Saul for any concluding remarks.
Thank you. Well, thank you everyone for joining us this morning for Oxford Square Capital's first quarter 2023 earnings conference call. We look forward to updating you on our next call. Thank you, operator.
This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.