Oaktree Strategic Credit Fund (OSC): Every Tender Paid in Full, Two Dividend Cuts, and New Money Down 90%

What the fund is, in one paragraph

Oaktree Strategic Credit Fund, which its own materials call OSC, is a non-exchange-traded business development company: a fund that lends to private, mostly sponsor-backed companies and sells its shares continuously at NAV through advisers and brokers. It launched in June 2022, uses a September 30 fiscal year, and had about $4.3 billion of net assets, $6.8 billion of investments and $2.6 billion of debt at August 31, 2026 (Form 8-K, accession 0001193125-26-401018). The adviser is Oaktree Fund Advisors, part of Oaktree, which Brookfield agreed in 2025 to own outright by buying the roughly 26% it did not already hold; the fund's documents now carry the Brookfield name. There are four share classes. Class I has no servicing fee; Class S, D and T pay one out of their distributions. All four share the same NAV per share. The base management fee is 1.25% a year of net assets, and shares tendered within a year of purchase lose 2% of NAV to an early repurchase deduction that stays in the fund (Form 10-Q, accession 0001872371-26-000013).

There is no market for the shares. The only regular way out is the quarterly tender offer, which by policy is for up to 5% of shares outstanding at the end of the prior quarter.

Seven quarters of tenders

Read the percentages, not the dollars. For its first two years a quarter's tender took well under 1% of the fund. From mid-2025 it has been 4% to 8.5%, and only the September 2025 quarter broke the pattern. The fund's September 15 letter to shareholders, filed with the amendment, says "OSC has satisfied 100% of tender requests in the quarter in which they were requested since the Fund launched in June 2022," and September keeps that record intact: 7.2 million shares tendered against an offer of up to 9,580,537.

Two details a holder should know before tendering. First, you do not know your price when you tender. The September offer expired at 11:59 p.m. Eastern on September 11, 2026 and pays the NAV per share as of September 30, which the fund says it will disclose in November 2026. Second, the percentage is of shares at the end of the prior quarter, so a shrinking fund offers slightly fewer shares each time: 10,168,864 in the March offer, 9,836,082 in June, 9,580,537 in September.

March 2026: 8.5% at the door, and who covered the difference

The March amendment (Schedule TO-I/A, accession 0001193125-26-126996) reports that about 13.9 million shares, 6.8% of the shares outstanding at December 31, 2025, were validly tendered into an offer for 5%. The fund used Rule 13e-4(f)(1), which lets an issuer buy up to an additional 2% of its shares without extending the offer, and raised the limit to 14,236,410 shares. That covered everyone who tendered.

It did not cover everyone who wanted out. The same amendment says that "Brookfield OSCF Investor LLC, an affiliate of the Company's investment adviser, has agreed to purchase a portion of an existing investor's shares" at the March 31 NAV, paid "pursuant to a promissory note issued on March 24, 2026 that will be repaid in cash on or before June 15, 2026." The FAQ filed with it puts that purchase at 1.7% of shares, "in a show of support for the Fund," and totals the quarter at 8.5%. At the $22.38 March NAV and the 203.4 million shares outstanding at December 31, 1.7% is roughly $77 million (our arithmetic; the filings give the percentage, not the dollar amount). Reuters, reporting the same filing, put total demand at about $400 million.

Two things follow from the wording. The buyer was one investor, not the crowd: the fund describes it as "an existing investor's shares," so a single large holder, likely an institution or a platform, wanted more out than the 7% ceiling would give it. And the fund states its reason plainly: the purchase "enables the Company to meet 100% of tender requests for the quarter." A fund that had prorated would have returned only part of every request, and proration is what the rest of the industry was doing that quarter. Blue Owl held two of its non-traded BDCs to 5% after requests of 22% and 41%, per CNBC. One inconsistency in the record: the June 10-Q's footnote describes the affiliate's price as NAV "at June 30, 2026," while the March amendment and FAQ say March 31. We quote both; the March filing is the one written when the transaction happened.

Demand eased after that. June's offer drew 4.5% and September's 3.8% (Schedule TO-I/A accessions 0001193125-26-274221 and 0001193125-26-392291). For a holder, that is the most useful number on this page: the queue in the latest window was under the 5% limit with room to spare.

Two cuts, and why the second one matters more than the first

The Class S column is lower because the prospectus's 0.85% a year shareholder servicing fee comes out of the distribution: $0.0164 a month per share at current NAV. On the August 31 NAV of $22.32, the current payout is about 8.6% a year for Class I and 7.7% for Class S (our arithmetic).

The fund's explanation for the March cut is in the FAQ: "a more conservative posture, including lower leverage and higher liquidity, alongside the impact of lower base rates and tighter credit spreads on current income." It says the cut "is not a function of shareholder tenders or a need to enhance liquidity."

The financial highlights let you check what the cuts did. In the April-June 2025 quarter, Class I earned $0.46 of net investment income per share and received $0.60 of distributions, of which $0.14 was "in excess of net investment income." In the April-June 2026 quarter it earned $0.47 and received $0.48, with $0.01 in excess (Form 10-Q, accession 0001872371-26-000013, Note 10). Before the cuts, almost a quarter of the distribution was not being earned; after them, the payout matches income. That is why the second cut matters more than the first: it is the one that brought the distribution back inside what the portfolio produces. It also means the $0.16 has no cushion. If income per share slips, the next move is not free.

NAV: $23.56 to $22.32 in two years

A 5.3% decline since September 2024, most of it in two months: February and March 2026 took $0.49 off. For the nine months to June 30, 2026 the highlights attribute $0.53 per share to net unrealized depreciation. Since March the NAV has stayed between $22.30 and $22.41. Credit losses, as the fund reports them, are small: one investment on non-accrual at June 30, 2026, 0.1% of debt investments at cost and less than 0.1% at fair value, and the September letter says about 97% of investment income in the April-June quarter was paid in cash rather than in kind. The same letter gives an 8.33% annualized total return for Class I over the three years to July 31, 2026, distributions reinvested. The fund's March FAQ says it has stayed "underinvested" in payment-in-kind loans and loans made against recurring revenue, the parts of private credit where the industry's problems have concentrated.

The number that will decide the next year: money in

Tenders at NAV are paid from somewhere: cash, the credit lines, loan repayments, and new subscriptions. The last of those has almost stopped.

Class I sales in the April-June quarter were $44.0 million, against $540.6 million a year earlier; Class S, $15.7 million against $71.5 million. Shares outstanding went from 203.4 million at December 31, 2025 to 191.6 million at June 30, 2026, and net assets from $4.66 billion to $4.28 billion. This is not unique to Oaktree. Robert A. Stanger & Co. reported that non-traded BDC sales in the first quarter of 2026 were down 59% from a year earlier and that redemptions exceeded new money for the first time in the sector's history (AltsWire). OSC's April-June drop, about 90%, is steeper than that average.

The fund has room to keep paying. Debt was 0.58 times equity net of cash at August 31, asset coverage 262% at June 30 against the 150% minimum the fund elected in December 2021, and the credit facilities had $1.67 billion undrawn at June 30. The operating cash flow for the nine months turned positive, $119.3 million, because the portfolio shrank: investments at fair value went from $7.43 billion at December 31 to $6.80 billion at June 30. That is how a fund without inflows funds its tenders, by making fewer new loans. It works as long as requests stay near 4%.

What a holder can do with this

• If you want out, the queue is short right now. The last two windows were at 4.5% and 3.8% against a 5% limit, and the fund has met 100% of requests every quarter. The previous four offers opened on November 14, February 17, May 15 and August 14; the next would fit mid-November with an expiry in mid-December, but the date comes from the Schedule TO-I, not from us.
• Check your purchase date. Shares held less than a year lose 2% of NAV on tender. On a $250,000 position that is $5,000, almost three months of Class I distributions at $0.16 a share.
• You tender blind on price. The NAV you receive is the quarter-end NAV, published weeks after the offer closes. The last six months moved between $22.30 and $22.41; the three before that fell $0.55.
• If someone offers to buy your shares below NAV, compare it with the tender. Third-party "mini-tender" offers for non-traded BDC shares appeared in July 2026 at 15% to 30% below NAV for funds run by Apollo, Ares and HPS. We found none for OSC. A fund paying every tender at NAV makes those offers a bad trade unless the tender route closes.
• If you are staying for the income, the relevant figure is net investment income per share, reported each quarter in Note 10 of the 10-Q. At $0.47 against $0.48 paid, the annual report for the fiscal year ending September 30, 2026 (last year's 10-K was filed December 18) is where a shortfall would show up first.

The fund's full filing record, with links, is on its vehicle page. Our census of non-traded REIT tender offers covers the real estate side of the same liquidity squeeze.

FAQ

All figures are from the filings cited, read on EDGAR on September 25, 2026. Dollar amounts for the March 2026 affiliate purchase, annualized payout rates on the August NAV and quarter-level sums are our arithmetic from the reported figures. This is analysis of public documents, not investment, legal or tax advice.