Oaktree Strategic Income II, Inc. (Form: 10-Q, Received: 08/09/2022 06:00:53)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)


			x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
						OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


			¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
						OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 000-55975

Oaktree Strategic Income II, Inc.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


DELAWARE (State or jurisdiction of incorporation or organization)						83-0566439 (I.R.S. Employer Identification No.)

333 South Grand Avenue, 28th Floor Los Angeles, CA (Address of principal executive office)						90071 (Zip Code)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE:

(213) 830-6300

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ¨ NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer x

Smaller reporting company o

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) YES ¨ NO x

Securities registered pursuant to Section 12(b) of the Act


Title of Each Class	Trading Symbol(s)	Name of Exchange on Which Registered
N/A	N/A	N/A

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at August 5, 2022
Common stock, $0.001 par value						17,401,121

OAKTREE STRATEGIC INCOME II, INC.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022

TABLE OF CONTENTS



		PART I — FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:
		Consolidated Statements of Assets and Liabilities as of June 30, 2022 (unaudited) and September 30, 2021	3
		Consolidated Statements of Operations (unaudited) for the three and nine months ended June 30, 2022 and 2021	4
		Consolidated Statements of Changes in Net Assets (unaudited) for the three and nine months ended June 30, 2022 and 2021	5
		Consolidated Statements of Cash Flows (unaudited) for the nine months ended June 30, 2022 and 2021	6
		Consolidated Schedule of Investments as of June 3 0 , 2022 (unaudited)	7
		Consolidated Schedule of Investments as of September 30, 2021	17
		Notes to Consolidated Financial Statements (unaudited)	27
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		54
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		70
Item 4.	Controls and Procedures		72
		PART II — OTHER INFORMATION
Item 1.	Legal Proceedings		72
Item 1A.	Risk Factors		73
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		73
Item 3.	Defaults Upon Senior Securities		73
Item 4.	Mine Safety Disclosures		73
Item 5.	Other Information		73
Item 6.	Exhibits		74
Signatures			75

PART I — FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

Oaktree Strategic Income II, Inc.

Consolidated Statements of Assets and Liabilities


	June 30, 2022 (unaudited)		September 30, 2021
ASSETS
Assets:
Investments – Non-control/Non-affiliate, at fair value (cost June 30, 2022: $580,967,818; cost September 30, 2021: $568,303,425)	$	566,675,653	$	575,429,432
Cash and cash equivalents	21,175,177		19,255,047
Restricted cash	9,815,519		4,317,968
Interest receivable	2,673,301		3,196,194
Receivables from unsettled transactions	1,833,059		11,349,581
Deferred financing costs	1,391,387		1,915,573
Derivative asset at fair value	352,041		618,004
Other assets	279,586		364,450
Total assets	$	604,195,723	$	616,446,249
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	401,252	$	482,680
Base management fee and incentive fees payable	3,213,805		6,433,876
Due to affiliates	576,181		1,055,391
Interest payable	1,817,853		884,294
Payables from unsettled transactions	3,035,689		—
Director fees payable	12,500		—
Deferred tax liability	56,780		117,374
Secured borrowings	5,802,122		9,969,425
Credit facilities payable	264,000,000		251,000,000
Total liabilities	278,916,182		269,943,040
Commitments and contingencies (Note 11)
Net assets:
Common stock, $0.001 par value per share, 250,000,000 shares authorized; 17,401,121 shares issued and outstanding at June 30, 2022 and September 30, 2021	17,401		17,401
Preferred stock, $0.001 par value per share, 100,000,000 shares authorized; none issued and outstanding at June 30, 2022 and September 30, 2021	—		—
Additional paid-in-capital	337,337,998		337,337,998
Accumulated distributable earnings (loss)	(12,075,858)		9,147,810
Total net assets (equivalent to $18.69 and $19.91 per common share at June 30, 2022 and September 30, 2021, respectively) (Note 10)	325,279,541		346,503,209
Total liabilities and net assets	$	604,195,723	$	616,446,249

See notes to Consolidated Financial Statements.

Oaktree Strategic Income II, Inc.

Consolidated Statements of Operations

(unaudited)


	Three months ended June 30, 2022		Three months ended June 30, 2021		Nine months ended June 30, 2022		Nine months ended June 30, 2021
Interest income:
Non-control/Non-affiliate investments	$	11,924,554	$	11,410,618	$	37,157,203	$	29,385,238
Interest on cash and cash equivalents	5,575		(17)		5,363		(133)
Total interest income	11,930,129		11,410,601		37,162,566		29,385,105
PIK interest income:
Non-control/Non-affiliate investments	1,120,082		1,063,850		3,010,940		2,960,403
Total PIK interest income	1,120,082		1,063,850		3,010,940		2,960,403
Fee income:
Non-control/Non-affiliate investments	558,320		1,927,862		1,271,325		4,031,867
Total fee income	558,320		1,927,862		1,271,325		4,031,867
Dividend income:
Non-control/Non-affiliate investments	24,712		—		24,712		—
Total dividend income	24,712		—		24,712		—
Total investment income	13,633,243		14,402,313		41,469,543		36,377,375
Expenses:
Base management fee	1,363,619		1,398,118		4,289,728		3,845,876
Investment income incentive fee	1,850,189		2,149,705		5,816,775		5,371,468
Capital gains incentive fee	(1,287,059)		96,473		(1,988,557)		1,920,041
Professional fees	252,017		257,669		801,637		741,431
Director fees	38,750		38,750		116,250		116,250
Interest expense	2,399,380		1,630,614		6,206,849		3,847,862
Administrator expense	108,141		105,792		342,356		313,934
General and administrative expenses	220,393		212,813		628,838		644,648
Total expenses	4,945,430		5,889,934		16,213,876		16,801,510
Net investment income	8,687,813		8,512,379		25,255,667		19,575,865
Unrealized appreciation (depreciation):
Non-control/Non-affiliate investments	(16,185,425)		(492,162)		(21,452,202)		6,488,932
Foreign currency forward contracts	(503,166)		394,129		(265,963)		1,404,687
Net unrealized appreciation (depreciation)	(16,688,591)		(98,033)		(21,718,165)		7,893,619
Realized gains (losses):
Non-control/Non-affiliate investments	49,005		963,603		495,035		3,630,619
Foreign currency forward contracts	2,681,434		(267,789)		3,747,763		(1,809,120)
Net realized gains (losses)	2,730,439		695,814		4,242,798		1,821,499
Provision for income tax (expense) benefit	43,831		(104,025)		55,903		(117,259)
Net realized and unrealized gains (losses), net of taxes	(13,914,321)		493,756		(17,419,464)		9,597,859
Net increase (decrease) in net assets resulting from operations	$	(5,226,508)	$	9,006,135	$	7,836,203	$	29,173,724
Net investment income per common share — basic and diluted	$	0.50	$	0.49	$	1.45	$	1.12
Earnings (loss) per common share — basic and diluted (Note 5)	$	(0.30)	$	0.52	$	0.45	$	1.68
Weighted average common shares outstanding — basic and diluted	17,401,121		17,401,121		17,401,121		17,401,121

See notes to Consolidated Financial Statements.

Oaktree Strategic Income II, Inc.

Consolidated Statements of Changes in Net Assets

(unaudited)


	Three months ended June 30, 2022		Three months ended June 30, 2021		Nine months ended June 30, 2022		Nine months ended June 30, 2021
Operations:
Net investment income	$	8,687,813	$	8,512,379	$	25,255,667	$	19,575,865
Net unrealized appreciation (depreciation)	(16,688,591)		(98,033)		(21,718,165)		7,893,619
Net realized gains (losses)	2,730,439		695,814		4,242,798		1,821,499
Provision for income tax (expense) benefit	43,831		(104,025)		55,903		(117,259)
Net increase (decrease) in net assets resulting from operations	(5,226,508)		9,006,135		7,836,203		29,173,724
Capital share transactions:
Distributions to stockholders	(7,656,494)		(6,960,449)		(29,059,871)		(29,929,931)
Net increase (decrease) in net assets from capital share transactions	(7,656,494)		(6,960,449)		(29,059,871)		(29,929,931)
Total increase (decrease) in net assets	(12,883,002)		2,045,686		(21,223,668)		(756,207)
Net assets at beginning of period	338,162,543		344,199,874		346,503,209		347,001,767
Net assets at end of period	$	325,279,541	$	346,245,560	$	325,279,541	$	346,245,560
Net asset value per common share	$	18.69	$	19.90	$	18.69	$	19.90
Common shares outstanding at end of period	17,401,121		17,401,121		17,401,121		17,401,121

See notes to Consolidated Financial Statements.

Oaktree Strategic Income II, Inc.

Consolidated Statements of Cash Flows

(unaudited)


	Nine months ended June 30, 2022		Nine months ended June 30, 2021
Operating activities:
Net increase (decrease) in net assets resulting from operations	$	7,836,203	$	29,173,724
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net unrealized (appreciation) depreciation	21,718,165		(7,893,619)
Net realized (gains) losses	(4,242,798)		(1,821,499)
PIK interest income	(3,010,940)		(2,960,403)
Accretion of original issue discount on investments	(3,999,618)		(3,626,166)
Amortization of deferred financing costs	524,186		456,987
Deferred taxes	(60,594)		104,706
Purchases of investments	(135,289,634)		(278,278,107)
Proceeds from sales and repayments of investments	134,529,728		180,298,197
Changes in operating assets and liabilities:
(Increase) decrease in interest receivable	128,022		(949,787)
(Increase) decrease in receivables from unsettled transactions	9,516,522		(2,384,628)
(Increase) decrease in other assets	84,864		314,674
Increase (decrease) in accounts payable, accrued expenses and other liabilities	(81,428)		(434,942)
Increase (decrease) in base management fee and incentive fees payable	(3,220,071)		2,189,637
Increase (decrease) in due to affiliates	(479,210)		364,803
Increase (decrease) in interest payable	933,559		560,802
Increase (decrease) in payables from unsettled transactions	3,035,689		778,680
Increase (decrease) in director fees payable	12,500		—
Net cash provided by (used in) operating activities	27,935,145		(84,106,941)
Financing activities:
Distributions paid in cash	(29,059,871)		(29,929,931)
Borrowings under the credit facilities	54,000,000		108,000,000
Repayments of borrowings under the credit facilities	(41,000,000)		(10,000,000)
Proceeds from secured borrowings	15,771,906		10,000,000
Repayments of secured borrowings	(19,939,209)		—
Deferred financing costs paid	—		(805,202)
Net cash provided by (used in) financing activities	(20,227,174)		77,264,867
Effect of exchange rate changes on foreign currency	(290,290)		(408,888)
Net increase (decrease) in cash and cash equivalents and restricted cash	7,417,681		(7,250,962)
Cash and cash equivalents and restricted cash, beginning of period	23,573,015		31,016,086
Cash and cash equivalents and restricted cash, end of period	$	30,990,696	$	23,765,124
Supplemental information:
Cash paid for interest	$	4,749,104	$	2,830,073
Non-cash financing activities:
Accrued deferred financing costs	$	—	$	73,487

Reconciliation to the Consolidated Statement of Assets and Liabilities	June 30, 2022		September 30, 2021
Cash and cash equivalents	$	21,175,177	$	19,255,047
Restricted cash	9,815,519		4,317,968
Total cash and cash equivalents and restricted cash	$	30,990,696	$	23,573,015

See notes to Consolidated Financial Statements.

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Non-Control/Non-Affiliate Investments										(7)
109 Montgomery Owner LLC			Real Estate Operating Companies
First Lien Term Loan, LIBOR+7.00% cash due 2/2/2023	8.33	%		$	527,084	$	522,929	$	558,106	(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 2/2/2023				—		(12,807)		7,309		(5)(8)(9)
						510,122		565,415
A.T. Holdings II SÀRL			Biotechnology
First Lien Term Loan, 9.50% PIK due 12/22/2022				11,447,137		11,420,464		11,475,755		(8)(10)
						11,420,464		11,475,755
Accupac, Inc.			Personal Products
First Lien Term Loan, SOFR+5.50% cash due 1/16/2026	7.59	%		4,479,233		4,432,903		4,468,035		(5)(8)
First Lien Delayed Draw Term Loan, SOFR+5.50% cash due 1/16/2026				—		—		(2,141)		(5)(8)(9)
First Lien Revolver, SOFR+5.50% cash due 1/16/2026	7.59	%		25,492		19,586		24,065		(5)(8)(9)
						4,452,489		4,489,959
Acquia Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 10/31/2025	8.12	%		4,381,994		4,333,187		4,360,085		(5)(8)
First Lien Revolver, LIBOR+7.00% cash due 10/31/2025	9.08	%		56,232		50,875		53,889		(5)(8)(9)
						4,384,062		4,413,974
ADB Companies, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	8.50	%		8,362,365		8,223,688		8,224,386		(5)(8)
						8,223,688		8,224,386
AI Sirona (Luxembourg) Acquisition S.a.r.l.			Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/2026	7.25	%		€	5,147,000	5,644,386		4,923,552		(5)(8)(10)
						5,644,386		4,923,552
AIP RD Buyer Corp.			Distributors
Second Lien Term Loan, SOFR+7.75% cash due 12/23/2029	9.35	%		$	3,459,000	3,394,321		3,331,017		(5)(8)
3,460 Common Units in RD Holding LP						324,727		310,881		(8)
						3,719,048		3,641,898
Alvogen Pharma US, Inc.			Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	7.50	%		4,889,596		4,708,121		4,319,959		(5)
						4,708,121		4,319,959
Alvotech Holdings S.A.			Biotechnology
Tranche A Fixed Rate Bond 10.00% cash due 6/24/2025				3,109,198		3,515,170		3,565,356		(8)(10)
Tranche B Fixed Rate Bond 10.00% cash due 6/24/2025				2,909,948		3,296,570		3,336,873		(8)(10)
79,437 Common Shares in Alvotech SA						722,763		652,178		(10)(11)
16,860 Seller Earn Out Shares in Alvotech SA						60,045		41,813		(8)(10)(11)
						7,594,548		7,596,220
American Auto Auction Group, LLC			Consumer Finance
Second Lien Term Loan, SOFR+8.75% cash due 1/2/2029	10.80	%		2,288,000		2,244,785		2,219,360		(5)(8)
						2,244,785		2,219,360
American Tire Distributors, Inc.			Distributors
First Lien Term Loan, LIBOR+6.25% cash due 10/20/2028	7.00	%		5,993,978		5,919,053		5,682,291		(5)
						5,919,053		5,682,291
Amplify Finco Pty Ltd.			Movies & Entertainment
First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.92	%		8,015,500		7,776,126		7,821,765		(5)(8)(10)
						7,776,126		7,821,765
Anastasia Parent, LLC			Personal Products
First Lien Term Loan, LIBOR+3.75% cash due 8/11/2025	6.00	%		1,005,452		791,605		806,750		(5)
						791,605		806,750

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Ankura Consulting Group LLC			Research & Consulting Services
Second Lien Term Loan, LIBOR+8.00% cash due 3/19/2029	9.18	%		$	1,707,376	$	1,681,765	$	1,536,638	(5)(8)
						1,681,765		1,536,638
Apptio, Inc.			Application Software
First Lien Term Loan, LIBOR+6.00% cash due 1/10/2025	7.25	%		7,129,297		7,068,270		6,968,175		(5)(8)
First Lien Revolver, LIBOR+6.00% cash due 1/10/2025	7.25	%		184,615		180,724		174,184		(5)(8)(9)
						7,248,994		7,142,359
Ardonagh Midco 3 PLC			Insurance Brokers
First Lien Term Loan, EURIBOR+7.00% cash due 7/14/2026	8.00	%		€	1,052,732	1,176,661		1,100,579		(5)(8)(10)
First Lien Term Loan, SONIA+7.00% cash due 7/14/2026	8.19	%		£	9,987,149	12,501,398		12,128,893		(5)(8)(10)
						13,678,059		13,229,472
ASP-R-PAC Acquisition Co LLC			Paper Packaging
First Lien Term Loan, LIBOR+6.00% cash due 12/29/2027	7.67	%		$	3,317,728	3,256,946		3,238,102		(5)(8)(10)
First Lien Revolver, LIBOR+6.00% cash due 12/29/2027				—		(7,254)		(9,503)		(5)(8)(9)(10)
						3,249,692		3,228,599
Assembled Brands Capital LLC			Specialized Finance
First Lien Revolver, LIBOR+6.75% cash due 10/17/2023	9.00	%		2,353,872		2,353,872		2,300,538		(5)(8)(9)
174,131 Class A Units						82,713		60,946		(8)
100,285 Preferred Units, 6%						110,285		130,136		(8)
7,621 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029						—		—		(8)
						2,546,870		2,491,620
Associated Asphalt Partners, LLC			Construction Materials
First Lien Term Loan, LIBOR+5.25% cash due 4/5/2024	6.92	%		904,942		833,056		646,065		(5)
						833,056		646,065
Astra Acquisition Corp.			Application Software
First Lien Term Loan, LIBOR+5.25% cash due 10/25/2028	6.92	%		4,326,462		4,215,252		3,782,041		(5)
						4,215,252		3,782,041
athenahealth Group Inc.			Health Care Technology
2,888 Shares of Series A Preferred Stock in Minerva Holdco, Inc., 10.75%						2,830,529		2,658,288		(8)
						2,830,529		2,658,288
Athenex, Inc.			Pharmaceuticals
First Lien Term Loan, 11.00% cash due 6/19/2026				4,785,629		4,653,759		4,665,989		(8)(10)
First Lien Delayed Draw Term Loan, 11.00% cash due 6/19/2026				—		(86,693)		(156,053)		(8)(9)(10)
First Lien Revenue Interest Financing Term Loan due 5/31/2031				2,348,000		2,334,697		2,334,697		(5)(8)(10)
97,205 Common Stock Warrants (exercise price $0.4955) expiration date 6/19/2027						334,386		12,636		(8)(10)
						7,236,149		6,857,269
Aurora Lux Finco S.À.R.L.			Airport Services
First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.63	%		7,331,250		7,213,913		6,957,356		(5)(8)(10)
						7,213,913		6,957,356
The Avery			Real Estate Operating Companies
First Lien Term Loan in T8 Urban Condo Owner, LLC, LIBOR+7.30% cash due 2/17/2023	9.09	%		4,006,593		3,993,721		4,048,392		(5)(8)
Subordinated Debt in T8 Senior Mezz LLC, LIBOR+12.50% cash due 2/17/2023	14.53	%		967,734		964,812		975,527		(5)(8)
						4,958,533		5,023,919
BAART Programs, Inc.			Health Care Services
First Lien Term Loan, LIBOR+5.00% cash due 6/11/2027	6.67	%		1,277,325		1,265,445		1,258,165		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/2027	6.60	%		653,606		643,200		634,851		(5)(8)(9)
Second Lien Term Loan, LIBOR+8.50% cash due 6/11/2028	10.17	%		1,754,000		1,727,690		1,727,690		(5)(8)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 6/11/2028	10.17	%		868,095		829,767		827,955		(5)(8)(9)
						4,466,102		4,448,661

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Berner Food & Beverage, LLC			Soft Drinks
First Lien Term Loan, LIBOR+6.50% cash due 7/30/2027	7.50	%		$	8,017,449	$	7,898,660	$	7,744,855	(5)(8)
First Lien Revolver, PRIME+5.50% cash due 7/30/2026	10.25	%		478,698		468,017		455,511		(5)(8)(9)
						8,366,677		8,200,366
BioXcel Therapeutics, Inc.			Pharmaceuticals
First Lien Term Loan, 10.25% cash due 4/19/2027				1,245,098		1,192,826		1,195,170		(8)(10)
First Lien Delayed Draw Term Loan, 10.25% cash due 4/19/2027				—		—		—		(8)(9)(10)
First Lien Revenue Interest Financing Delayed Draw Term Loan due 9/30/2032				—		—		—		(5)(8)(9)(10)
4,954 Common Stock Warrants (exercise price $20.04) expiration date 4/19/2029						29,278		28,188		(8)(10)
						1,222,104		1,223,358
Blumenthal Temecula, LLC			Automotive Retail
First Lien Term Loan, 9.00% cash due 9/24/2023				1,277,827		1,277,827		1,271,438		(8)
415,294 Preferred Units in Unstoppable Automotive AMV, LLC						415,294		411,141		(8)
95,837 Preferred Units in Unstoppable Automotive VMV, LLC						95,837		94,879		(8)
95,837 Common Units in Unstoppable Automotive AMV, LLC						95,837		119,796		(8)
						1,884,795		1,897,254
Cadence Aerospace, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+6.50% cash 2.00% PIK due 11/14/2023	7.74	%		3,180,774		3,151,234		2,921,223		(5)(8)
						3,151,234		2,921,223
CCO Holdings LLC			Cable & Satellite
Fixed Rate Bond, 4.50% cash due 5/1/2032				400,000		334,649		325,234		(10)
						334,649		325,234
CITGO Holding, Inc.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+7.00% cash due 8/1/2023	8.67	%		639,982		629,763		633,115		(5)
						629,763		633,115
CITGO Petroleum Corp.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.92	%		5,622,640		5,566,413		5,589,269		(5)
						5,566,413		5,589,269
Clear Channel Outdoor Holdings, Inc.			Advertising
Fixed Rate Bond, 5.125% cash due 8/15/2027				250,000		218,089		211,744		(10)
						218,089		211,744
Continental Intermodal Group LP			Oil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+8.50% cash due 1/28/2025	10.17	%		8,198,818		8,198,818		6,972,274		(5)(8)
Common Stock Warrants expiration date 7/28/2025						—		171,409		(8)
						8,198,818		7,143,683
Convergeone Holdings, Inc.			IT Consulting & Other Services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/2026	6.67	%		5,745,005		5,626,217		4,940,733		(5)
						5,626,217		4,940,733
CorEvitas, LLC			Health Care Technology
First Lien Term Loan, SOFR+5.75% cash due 12/13/2025	7.38	%		5,018,968		4,960,891		4,971,790		(5)(8)
First Lien Revolver, PRIME+4.75% cash due 12/13/2025	9.50	%		111,500		104,765		105,211		(5)(8)(9)
401 Class A2 Common Units in CorEvitas Group Holdings, L.P.						251,644		853,635		(8)
						5,317,300		5,930,636
CPC Acquisition Corp.			Specialty Chemicals
Second Lien Term Loan, LIBOR+7.75% cash due 12/29/2028	10.00	%		727,000		716,095		648,848		(5)(8)
						716,095		648,848

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Dialyze Holdings, LLC			Health Care Equipment
First Lien Term Loan, LIBOR+9.00% cash 2.00% PIK due 8/4/2026	11.25	%		$	4,462,078	$	4,204,743	$	4,159,995	(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+9.00% cash 2.00% PIK due 8/4/2026				—		(26,434)		(32,231)		(5)(8)(9)
993,431 Class A Warrants (exercise price $1.00) expiration date 8/4/2028						258,292		248,358		(8)
						4,436,601		4,376,122
Digital.AI Software Holdings, Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 2/10/2027	8.40	%		2,617,831		2,557,433		2,559,191		(5)(8)
First Lien Revolver, LIBOR+6.50% cash due 2/10/2027	7.90	%		66,274		59,721		57,185		(5)(8)(9)
						2,617,154		2,616,376
DirecTV Financing, LLC			Cable & Satellite
First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	6.67	%		8,392,500		8,308,575		7,750,851		(5)
						8,308,575		7,750,851
FINThrive Software Intermediate Holdings, Inc.			Health Care Technology
Second Lien Term Loan, LIBOR+6.75% cash due 12/17/2029	8.42	%		6,013,000		5,922,805		5,381,635		(5)
						5,922,805		5,381,635
Fortress Biotech, Inc.			Biotechnology
First Lien Term Loan, 11.00% cash due 8/27/2025				2,452,500		2,358,180		2,360,531		(8)(10)(12)
85,811 Common Stock Warrants (exercise price $3.20) expiration date 8/27/2030						90,960		14,588		(8)(10)
						2,449,140		2,375,119
Gibson Brands, Inc.			Leisure Products
First Lien Term Loan, LIBOR+5.00% cash due 8/11/2028	6.41	%		2,487,500		2,467,600		2,126,813		(5)(8)
						2,467,600		2,126,813
Global Medical Response, Inc.			Health Care Services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/2025	5.92	%		1,059,480		1,048,752		988,521		(5)
First Lien Term Loan, LIBOR+4.25% cash due 10/2/2025	5.25	%		3,716,701		3,666,879		3,466,994		(5)
						4,715,631		4,455,515
Grove Hotel Parcel Owner, LLC			Hotels, Resorts & Cruise Lines
First Lien Term Loan, SOFR+8.00% cash due 6/21/2027	9.45	%		3,309,767		3,243,934		3,243,572		(5)(8)
First Lien Delayed Draw Term Loan, SOFR+8.00% cash due 6/21/2027				—		(13,167)		(13,239)		(5)(8)(9)
First Lien Revolver, SOFR+8.00% cash due 6/21/2027				—		(6,583)		(6,620)		(5)(8)(9)
						3,224,184		3,223,713
Harbor Purchaser Inc.			Education Services
First Lien Term Loan, SOFR+5.25% cash due 4/9/2029	6.88	%		5,100,000		4,909,797		4,637,838		(5)
						4,909,797		4,637,838
iCIMs, Inc.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 9/12/2024	7.72	%		2,517,618		2,495,334		2,509,058		(5)(8)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024	7.72	%		88,235		87,409		87,935		(5)(8)
						2,582,743		2,596,993
Immucor, Inc.			Health Care Supplies
First Lien Term Loan, LIBOR+5.75% cash due 7/2/2025	8.00	%		2,324,886		2,296,951		2,278,388		(5)(8)
Second Lien Term Loan, LIBOR+8.00% cash 3.50% PIK due 10/2/2025	10.25	%		6,066,854		5,996,753		5,960,684		(5)(8)
						8,293,704		8,239,072
Impel Neuropharma, Inc.			Health Care Technology
First Lien Revenue Interest Financing Term Loan due 2/15/2031				948,500		948,500		948,500		(5)(8)
First Lien Term Loan, SOFR+8.75% cash due 3/17/2027	10.95	%		948,500		930,631		931,427		(5)(8)
						1,879,131		1,879,927

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Indivior Finance S.À.R.L.			Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% cash due 6/30/2026	7.57	%		$	1,980,000	$	1,947,701	$	1,933,807	(5)(8)(10)
						1,947,701		1,933,807
Innocoll Pharmaceuticals Limited			Health Care Technology
First Lien Term Loan, 11.00% cash due 1/26/2027				1,635,588		1,568,674		1,533,364		(8)(10)
First Lien Delayed Draw Term Loan, 11.00% cash due 1/26/2027				—		—		—		(8)(9)(10)
13,676 Tranche A Warrant Shares (exercise price $4.23) expiration date 1/26/2029						32,275		30,087		(8)(10)
						1,600,949		1,563,451
Inventus Power, Inc.			Electrical Components & Equipment
First Lien Term Loan, SOFR+5.00% cash due 3/29/2024	7.32	%		4,525,713		4,499,409		4,378,627		(5)(8)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/2024	10.75	%		2,750,000		2,714,723		2,633,125		(5)(8)
						7,214,132		7,011,752
INW Manufacturing, LLC			Personal Products
First Lien Term Loan, LIBOR+5.75% cash due 3/25/2027	8.00	%		11,550,000		11,269,423		10,914,750		(5)(8)
						11,269,423		10,914,750
IPC Corp.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 10/1/2026	7.50	%		6,229,786		6,086,118		6,023,580		(5)(8)
						6,086,118		6,023,580
Itafos Inc.			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+8.25% cash due 8/25/2024	9.82	%		4,114,683		3,996,649		3,971,081		(5)(8)
						3,996,649		3,971,081
Ivanti Software, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/1/2028	8.85	%		3,692,000		3,673,540		3,390,493		(5)
						3,673,540		3,390,493
Jazz Acquisition, Inc.			Aerospace & Defense
First Lien Term Loan, LIBOR+7.50% cash due 1/29/2027	9.17	%		9,437,325		9,227,953		9,459,372		(5)(8)
Second Lien Term Loan, LIBOR+8.00% cash due 6/18/2027	10.03	%		137,300		123,570		125,424		(5)
						9,351,523		9,584,796
Kings Buyer, LLC			Environmental & Facilities Services
First Lien Term Loan, LIBOR+6.50% cash due 10/29/2027	8.75	%		3,277,071		3,244,301		3,195,145		(5)(8)
First Lien Revolver, LIBOR+6.50% cash due 10/29/2027	8.75	%		158,090		153,611		146,892		(5)(8)(9)
						3,397,912		3,342,037
LaserShip, Inc.			Air Freight & Logistics
Second Lien Term Loan, LIBOR+7.50% cash due 5/7/2029	10.38	%		1,150,000		1,138,500		1,089,625		(5)(8)
						1,138,500		1,089,625
Lightbox Intermediate, L.P.			Real Estate Services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/2026	7.25	%		8,730,000		8,657,515		8,511,750		(5)(8)
						8,657,515		8,511,750
Liquid Environmental Solutions Corporation			Environmental & Facilities Services
Second Lien Term Loan, LIBOR+8.50% cash due 11/30/2026	10.17	%		1,046,111		1,027,760		1,014,728		(5)(8)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 11/30/2026	10.17	%		278,963		273,384		253,856		(5)(8)(9)
						1,301,144		1,268,584
LSL Holdco, LLC			Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 1/31/2028	7.67	%		4,615,633		4,529,682		4,477,164		(5)(8)
First Lien Revolver, LIBOR+6.00% cash due 1/31/2028	7.67	%		205,139		195,589		189,754		(5)(8)(9)
						4,725,271		4,666,918
Marinus Pharmaceuticals, Inc.			Pharmaceuticals
First Lien Term Loan, 11.50% cash due 5/11/2026				4,216,200		4,151,087		4,058,093		(8)(10)
First Lien Delayed Draw Term Loan, 11.50% cash due 5/11/2026				—		—		—		(8)(9)(10)
						4,151,087		4,058,093

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Mesoblast, Inc.			Biotechnology
First Lien Term Loan, 8.00% cash 1.75% PIK due 11/19/2026				$	1,723,588	$	1,579,307	$	1,525,375	(8)(10)
First Lien Delayed Draw Term Loan, 8.00% cash 1.75% PIK due 11/19/2026				—		323		341		(8)(9)(10)
50,289 Warrant Shares (exercise price $7.26) expiration date 11/19/2028						115,162		33,191		(8)(10)
						1,694,792		1,558,907
MHE Intermediate Holdings, LLC			Diversified Support Services
First Lien Term Loan, LIBOR+6.00% cash due 7/21/2027	7.29	%		4,609,168		4,532,323		4,494,860		(5)(8)
First Lien Revolver, LIBOR+6.00% cash due 7/21/2027				—		(6,018)		(8,857)		(5)(8)(9)
						4,526,305		4,486,003
Mindbody, Inc.			Internet Services & Infrastructure
First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/2025	8.38	%		8,664,181		8,582,205		8,499,561		(5)(8)
First Lien Revolver, LIBOR+8.00% cash due 2/14/2025				—		(6,670)		(14,476)		(5)(8)(9)
						8,575,535		8,485,085
Mosaic Companies, LLC			Home Improvement Retail
First Lien Term Loan, LIBOR+6.75% cash due 7/2/2026	8.36	%		11,450,063		11,266,711		11,232,511		(5)(8)
						11,266,711		11,232,511
MRI Software LLC			Application Software
First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	7.75	%		7,208,857		7,163,409		7,064,680		(5)(8)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026				—		(4,612)		(9,224)		(5)(8)(9)
						7,158,797		7,055,456
Navisite, LLC			Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+8.50% cash due 12/30/2026	10.75	%		7,779,000		7,662,333		7,390,050		(5)(8)
						7,662,333		7,390,050
NeuAG, LLC			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024	7.75	%		14,129,954		13,794,224		13,722,249		(5)(8)
						13,794,224		13,722,249
NN, Inc.			Industrial Machinery
First Lien Term Loan, LIBOR+6.88% cash due 9/19/2026	8.54	%		14,691,038		14,409,459		14,176,851		(5)(8)(10)
						14,409,459		14,176,851
OEConnection LLC			Application Software
First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	5.67	%		6,279,551		6,250,789		5,855,682		(5)
Second Lien Term Loan, LIBOR+7.00% cash due 9/25/2027	8.60	%		1,804,000		1,771,275		1,731,840		(5)(8)
						8,022,064		7,587,522
OTG Management, LLC			Airport Services
First Lien Term Loan, LIBOR+2.00% cash 8.00% PIK due 9/1/2025	4.63	%		3,403,395		3,352,580		3,335,327		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+2.00% cash 8.00% PIK due 9/1/2025				—		(4,839)		(6,104)		(5)(8)(9)
						3,347,741		3,329,223
Park Place Technologies, LLC			Internet Services & Infrastructure
First Lien Term Loan, SOFR+5.00% cash due 11/10/2027	6.63	%		4,937,500		4,785,851		4,760,565		(5)
						4,785,851		4,760,565
Performance Health Holdings, Inc.			Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 7/12/2027	8.88	%		4,398,925		4,325,161		4,291,591		(5)(8)
						4,325,161		4,291,591
PFNY Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+7.00% cash due 12/31/2026	8.00	%		6,291,262		6,178,657		6,165,437		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 12/31/2026	9.25	%		534,596		523,845		522,583		(5)(8)(9)
First Lien Revolver, LIBOR+7.00% cash due 12/31/2026				—		(5,376)		(6,007)		(5)(8)(9)
						6,697,126		6,682,013

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Planview Parent, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.92	%		$	9,872,000	$	9,723,920	$	9,477,120	(5)(8)
						9,723,920		9,477,120
PLNTF Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+8.00% cash due 3/22/2026	10.10	%		686,139		675,873		665,555		(5)(8)
						675,873		665,555
Pluralsight, LLC			Application Software
First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00	%		15,361,250		15,115,202		14,931,135		(5)(8)
First Lien Revolver, LIBOR+8.00% cash due 4/6/2027				—		(16,803)		(29,622)		(5)(8)(9)
						15,098,399		14,901,513
PRGX Global, Inc.			Data Processing & Outsourced Services
First Lien Term Loan, LIBOR+6.75% cash due 3/3/2026	8.95	%		8,194,427		8,074,069		8,034,636		(5)(8)
First Lien Revolver, LIBOR+6.75% cash due 3/3/2026				—		(8,951)		(11,883)		(5)(8)(9)
19,485 Class B Common Units						19,485		21,502		(8)
						8,084,603		8,044,255
Profrac Holdings II, LLC			Industrial Machinery
First Lien Term Loan, SOFR+8.50% cash due 3/4/2025	10.01	%		4,944,977		4,812,735		4,846,077		(5)(8)
						4,812,735		4,846,077
Project Boost Purchaser, LLC			Application Software
Second Lien Term Loan, LIBOR+8.00% cash due 5/31/2027	9.67	%		1,500,000		1,500,000		1,451,250		(5)(8)
						1,500,000		1,451,250
Quantum Bidco Limited			Food Distributors
First Lien Term Loan, SONIA+6.00% cash due 1/29/2028	7.31	%		£	1,125,000	1,491,941		1,137,408		(5)(8)(10)
						1,491,941		1,137,408
Radiology Partners, Inc.			Health Care Distributors
First Lien Term Loan, LIBOR+4.25% cash due 7/9/2025	5.89	%		$	2,100,000	1,975,875		1,893,675		(5)
						1,975,875		1,893,675
Relativity ODA LLC			Application Software
First Lien Term Loan, LIBOR+7.50% PIK due 5/12/2027				5,900,803		5,790,624		5,759,184		(5)(8)
First Lien Revolver, LIBOR+6.50% cash due 5/12/2027				—		(11,018)		(13,049)		(5)(8)(9)
						5,779,606		5,746,135
Renaissance Holding Corp.			Diversified Banks
Second Lien Term Loan, LIBOR+7.00% cash due 5/29/2026	8.67	%		1,138,000		1,129,465		1,063,558		(5)
						1,129,465		1,063,558
RP Escrow Issuer LLC			Health Care Distributors
Fixed Rate Bond, 5.25% cash due 12/15/2025				306,000		279,653		264,950
						279,653		264,950
RumbleOn, Inc.			Automotive Retail
First Lien Term Loan, LIBOR+8.25% cash due 8/31/2026	9.25	%		9,123,542		8,638,460		8,766,812		(5)(8)(10)
First Lien Delayed Draw Term Loan, LIBOR+8.25% cash due 8/31/2026	9.25	%		2,760,290		2,551,565		2,606,793		(5)(8)(9)(10)
39,794 Class B Common Stock Warrants (exercise price $33.00) expiration date 2/28/2023						290,496		18,703		(8)(10)
						11,480,521		11,392,308
Sabert Corporation			Metal & Glass Containers
First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	6.19	%		2,590,677		2,564,770		2,467,619		(5)
						2,564,770		2,467,619
Scilex Pharmaceuticals Inc.			Pharmaceuticals
Fixed Rate Zero Coupon Bond due 8/15/2026				444,040		399,929		437,379		(8)
						399,929		437,379

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
SiO2 Medical Products, Inc.			Metal & Glass Containers
First Lien Term Loan, 5.50% cash 8.50% PIK due 12/21/2026				$	6,545,193	$	6,430,125	$	6,428,034	(8)(12)
Common Stock Warrants (exercise price $0.75) expiration date 7/31/2028						123,557		123,557		(8)
						6,553,682		6,551,591
SM Wellness Holdings, Inc.			Health Care Services
Second Lien Term Loan, LIBOR+8.00% cash due 4/16/2029	9.04	%		2,925,000		2,881,125		2,866,500		(5)(8)
						2,881,125		2,866,500
Sorenson Communications, LLC			Communications Equipment
First Lien Term Loan, LIBOR+5.50% cash due 3/17/2026	7.75	%		4,371,500		4,327,785		4,286,802		(5)
						4,327,785		4,286,802
Sorrento Therapeutics, Inc.			Biotechnology
16,000 Common Stock Units						63,040		32,160		(10)
						63,040		32,160
SPX Flow, Inc.			Industrial Machinery
First Lien Term Loan, SOFR+4.50% cash due 4/5/2029	6.13	%		1,490,683		1,420,360		1,393,043		(5)
						1,420,360		1,393,043
SumUp Holdings Luxembourg S.À.R.L.			Other Diversified Financial Services
First Lien Term Loan, EURIBOR+8.50% cash due 3/10/2026	10.00	%		€	6,820,000	7,959,220		6,931,043		(5)(8)(10)
						7,959,220		6,931,043
Sunland Asphalt & Construction, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.00% cash due 1/13/2026	8.88	%		$	11,632,389	11,467,695		11,376,476		(5)(8)
						11,467,695		11,376,476
Supermoose Borrower, LLC			Application Software
First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	6.00	%		2,872,535		2,663,364		2,608,176		(5)
						2,663,364		2,608,176
SVP-Singer Holdings Inc.			Home Furnishings
First Lien Term Loan, LIBOR+6.75% cash due 7/28/2028	9.00	%		5,033,960		4,726,358		4,546,320		(5)(8)
						4,726,358		4,546,320
Tacala, LLC			Restaurants
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/2028	9.17	%		3,394,977		3,353,116		3,185,626		(5)
						3,353,116		3,185,626
Tahoe Bidco B.V.			Application Software
First Lien Term Loan, LIBOR+6.00% cash due 9/29/2028	7.12	%		5,611,000		5,510,495		5,521,224		(5)(8)(10)
First Lien Revolver, LIBOR+6.00% cash due 10/1/2027				—		(7,391)		(7,154)		(5)(8)(9)(10)
						5,503,104		5,514,070
Tecta America Corp.			Construction & Engineering
Second Lien Term Loan, LIBOR+8.50% cash due 4/9/2029	10.17	%		1,671,000		1,645,935		1,637,580		(5)(8)
						1,645,935		1,637,580
Telestream Holdings Corporation			Application Software
First Lien Term Loan, SOFR+9.25% cash due 10/15/2025	10.59	%		5,235,275		5,170,202		5,125,334		(5)(8)
First Lien Revolver, SOFR+9.25% cash due 10/15/2025	10.59	%		200,400		193,726		189,879		(5)(8)(9)
						5,363,928		5,315,213

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
TerSera Therapeutics LLC			Pharmaceuticals
Second Lien Term Loan, LIBOR+10.00% cash due 3/30/2026	12.25	%		$	6,100,000	$	5,976,617	$	6,034,730	(5)(8)
						5,976,617		6,034,730
Thrasio, LLC			Internet & Direct Marketing Retail
First Lien Term Loan, LIBOR+7.00% cash due 12/18/2026	9.25	%		9,722,338		9,537,133		9,382,056		(5)(8)
2,182 Shares of Series C-3 Preferred Stock in Thrasio Holdings, Inc.						26,665		32,163		(8)
73,648 Shares of Series C-2 Preferred Stock in Thrasio Holdings, Inc.						600,000		1,085,575		(8)
12,510 Shares of Series D Preferred Stock in Thrasio Holdings, Inc.						253,328		253,328		(8)
6,000 Shares of Series X Preferred Stock in Thrasio Holdings, Inc.						6,000,300		6,849,942		(8)(9)
						16,417,426		17,603,064
Touchstone Acquisition, Inc.			Health Care Supplies
First Lien Term Loan, LIBOR+6.00% cash due 12/29/2028	7.67	%		5,788,493		5,680,377		5,614,838		(5)(8)
						5,680,377		5,614,838
Veritas US Inc.			Application Software
First Lien Term Loan, LIBOR+5.00% cash due 9/1/2025	7.25	%		7,344,642		7,250,715		6,065,426		(5)
						7,250,715		6,065,426
Virgin Pulse, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 4/6/2029	8.92	%		1,540,000		1,524,600		1,328,250		(5)
						1,524,600		1,328,250
Win Brands Group LLC			Housewares & Specialties
First Lien Term Loan, LIBOR+9.00% cash 5.00% PIK due 1/22/2026	12.00	%		1,100,124		1,089,554		1,089,122		(5)(8)
62 Class F Warrants in Brand Value Growth LLC (exercise price $0.01) expiration date 1/25/2027						—		67,400		(8)
						1,089,554		1,156,522
Windstream Services II, LLC			Integrated Telecommunication Services
First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.92	%		9,945,414		9,647,987		9,343,717		(5)
						9,647,987		9,343,717
WP CPP Holdings, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+3.75% cash due 4/30/2025	4.99	%		6,357,045		6,097,242		5,342,206		(5)
						6,097,242		5,342,206
WPEngine, Inc.			Application Software
First Lien Term Loan, LIBOR+6.00% cash due 3/27/2026	7.50	%		14,623,000		14,395,246		14,450,054		(5)(8)
						14,395,246		14,450,054
WWEX Uni Topco Holdings, LLC			Air Freight & Logistics
First Lien Term Loan, LIBOR+4.00% cash due 7/26/2028	5.46	%		997,494		936,397		911,360		(5)
						936,397		911,360
Zayo Group Holdings, Inc.			Alternative Carriers
First Lien Term Loan, LIBOR+3.00% cash due 3/9/2027	4.67	%		1,000,000		942,801		897,778		(5)
Fixed Rate Bond, 4.00% cash due 3/1/2027				150,000		125,880		124,718
						1,068,681		1,022,496
Zephyr Bidco Limited			Specialized Finance
Second Lien Term Loan, SONIA+7.50% cash due 7/23/2026	8.72	%		£	2,000,000	2,592,781		2,171,837		(5)(8)(10)
						2,592,781		2,171,837
Total Non-Control/Non-Affiliate Investments (174.2% of net assets)						$	580,967,818	$	566,675,653
Cash and Cash Equivalents and Restricted Cash (9.5% of net assets)						$	30,990,696	$	30,990,696
Total Portfolio Investments, Cash and Cash Equivalents and Restricted Cash (183.7% of net assets)						$	611,958,514	$	597,666,349

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

June 30, 2022

(unaudited)


Derivative Instrument	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Counterparty	Cumulative Unrealized Appreciation (Depreciation)
Foreign currency forward contract	$	13,453,877	€	12,710,431	8/11/2022	Bank of New York Mellon	$	129,570
Foreign currency forward contract	$	15,497,227	£	12,568,533	8/11/2022	Bank of New York Mellon	$	222,471
							$	352,041

(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.

(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.

(3)Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.

(4)Each of the Company's investments is pledged as collateral under one or more of its credit facilities. A single investment may be divided into parts that are individually pledged as collateral to separate credit facilities.

(5)The interest rate on the principal balance outstanding for most of the floating rate loans is indexed to the London Interbank Offered Rate ("LIBOR") and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. Certain loans may also be indexed to the secured overnight financing rate ("SOFR") or the sterling overnight index average ("SONIA"). The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over the reference rates based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of June 30, 2022, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 1.67%, the 90-day LIBOR at 2.25%, the 180-day LIBOR at 2.88%, the 360-day LIBOR at 3.61%, the PRIME at 4.75%, the 30-day SOFR at 1.53%, the 90-day SOFR at 2.05%, the SONIA at 1.19%, the 30-day EURIBOR at (0.54)%, the 90-day EURIBOR at (0.30)% and the 180-day EURIBOR at (0.38)%. Most loans include an interest floor, which generally ranges from 0% to 1%. SOFR and SONIA based contracts may include a credit spread adjustment that is charged in addition to the base rate and the stated spread.

(6)Principal includes accumulated payment in kind ("PIK") interest and is net of repayments, if any. "€" signifies the investment is denominated in Euros. “£” signifies the investment is denominated in British Pounds. All other investments are denominated in U.S. dollars.

(7)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments. Control Investments generally are defined by the Investment Company Act of 1940, as amended (the "Investment Company Act"), as investments in companies in which the Company owns more than 25% of the voting securities and/or has the power to exercise control over the management or policies of the company. Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.

(8)As of June 30, 2022, these investments are categorized as Level 3 within the fair value hierarchy established by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC 820") and were valued using significant unobservable inputs.

(9)Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.

(10)Investment is not a qualifying asset as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of June 30, 2022, qualifying assets represented 80.6% of the Company's total assets and non-qualifying assets represented 19.4% of the Company's total assets.

(11)One half of the Seller Earn Out Shares will vest if, at any time through June 16, 2027, the Alvotech SA common share price is at or above a volume weighted average price ("VWAP") of $15.00 per share for any ten trading days within any twenty trading day period, and the other half will vest, if at any time during such period, the common share price is at or above a VWAP of $20.00 per share for any ten trading days within any twenty trading day period.

(12)The sale of all or a portion of this investment did not qualify for sale accounting under FASB ASC Topic 860, Transfers and Servicing ("ASC 860"), and therefore the investment remains on the Company's Consolidated Schedule of Investments as of June 30, 2022. See "Secured Borrowings" in Note 6 in the Consolidated Financial Statements for further details.

See notes to Consolidated Financial Statements.

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Non-Control/Non-Affiliate Investments										(7)
109 Montgomery Owner LLC			Real Estate Operating Companies
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 2/2/2023	7.50	%		$	750,674	$	725,811	$	763,057	(5)(8)(9)
						725,811		763,057
A.T. Holdings II SÀRL			Biotechnology
First Lien Term Loan, 9.50% cash due 12/22/2022				12,812,000		12,733,548		12,747,940		(8)(10)
						12,733,548		12,747,940
Accupac, Inc.			Personal Products
First Lien Term Loan, LIBOR+6.00% cash due 1/17/2026	7.00	%		4,513,601		4,457,062		4,513,600		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 1/17/2026				—		(10,729)		—		(5)(8)(9)
First Lien Revolver, LIBOR+6.00% cash due 1/17/2026	7.00	%		513,907		506,754		513,907		(5)(8)(9)
						4,953,087		5,027,507
Acquia Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 10/31/2025	8.00	%		4,381,994		4,322,248		4,373,230		(5)(8)
First Lien Revolver, LIBOR+7.00% cash due 10/31/2025	8.00	%		37,488		30,931		36,551		(5)(8)(9)
						4,353,179		4,409,781
ADB Companies, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.25% cash due 12/18/2025	7.25	%		7,716,667		7,551,815		7,628,697		(5)(8)
						7,551,815		7,628,697
AI Sirona (Luxembourg) Acquisition S.a.r.l.			Pharmaceuticals
Second Lien Term Loan, EURIBOR+7.25% cash due 9/28/2026	7.25	%		€	5,147,000	5,634,400		5,955,154		(5)(8)(10)
						5,634,400		5,955,154
Alvogen Pharma US, Inc.			Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% cash due 12/31/2023	6.25	%		$	5,082,606	4,799,993		4,920,090		(5)
						4,799,993		4,920,090
Alvotech Holdings S.A.			Biotechnology
Fixed Rate Bond 15% PIK Tranche A due 6/24/2025				3,109,198		3,047,984		3,109,198		(8)(10)(11)
Fixed Rate Bond 15% PIK Tranche B due 6/24/2025				2,909,948		2,860,464		2,909,948		(8)(10)(11)
3,690 Common Shares						854,309		854,309		(8)(10)
						6,762,757		6,873,455
Amplify Finco Pty Ltd.			Movies & Entertainment
First Lien Term Loan, LIBOR+4.25% cash due 11/26/2026	5.00	%		8,077,000		7,804,890		7,871,723		(5)(8)(10)
						7,804,890		7,871,723
Anastasia Parent, LLC			Personal Products
First Lien Term Loan, LIBOR+3.75% cash due 8/11/2025	3.88	%		1,823,712		1,445,347		1,549,015		(5)
						1,445,347		1,549,015
Ankura Consulting Group LLC			Research & Consulting Services
Second Lien Term Loan, LIBOR+8.00% cash due 3/19/2029	8.75	%		2,398,000		2,362,030		2,442,962		(5)(8)
						2,362,030		2,442,962
Apptio, Inc.			Application Software
First Lien Term Loan, LIBOR+7.25% cash due 1/10/2025	8.25	%		7,129,297		7,050,240		7,018,308		(5)(8)
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025	8.25	%		184,615		179,575		177,430		(5)(8)(9)
						7,229,815		7,195,738
Ardonagh Midco 3 PLC			Insurance Brokers
First Lien Term Loan, EURIBOR+7.25 cash due 7/14/2026	8.25	%		€	1,052,732	1,173,350		1,223,724		(5)(8)(10)
First Lien Term Loan, UK LIBOR+7.25% cash due 7/14/2026	8.00	%		£	9,987,149	12,450,863		13,573,902		(5)(8)(10)
						13,624,213		14,797,626

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes

Assembled Brands Capital LLC			Specialized Finance
First Lien Revolver, LIBOR+6.00% cash due 10/17/2023	7.00	%		$	1,720,438	$	1,720,438	$	1,700,145	(5)(8)(9)
174,131 Class A Units						82,713		63,558		(8)
100,285 Preferred Units, 6%						110,285		124,622		(8)
7,621 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029						—		—		(8)
						1,913,436		1,888,325
Associated Asphalt Partners, LLC			Construction Materials
First Lien Term Loan, LIBOR+5.25% cash due 4/5/2024	6.25	%		913,116		809,832		847,865		(5)
						809,832		847,865
Athenex, Inc.			Pharmaceuticals
First Lien Term Loan, 11.00% cash due 6/19/2026				12,484,249		12,075,426		12,395,611		(8)(10)
First Lien Delayed Draw Term Loan, 11.00% cash due 6/19/2026				—		(86,693)		(44,319)		(8)(9)(10)
97,205 Common Stock Warrants (exercise price $12.63) expiration date 6/19/2027						334,385		28,189		(8)(10)
						12,323,118		12,379,481
Aurora Lux Finco S.À.R.L.			Airport Services
First Lien Term Loan, LIBOR+6.00% cash due 12/24/2026	7.00	%		7,387,500		7,249,544		6,951,637		(5)(8)(10)
						7,249,544		6,951,637
The Avery			Real Estate Operating Companies
First Lien Delayed Draw Term Loan in T8 Urban Condo Owner, LLC, LIBOR+7.30% cash due 2/17/2023	7.55	%		5,120,365		5,081,993		5,171,494		(5)(8)(9)
Subordinated Delayed Draw Debt in T8 Senior Mezz LLC, LIBOR+12.50% cash due 2/17/2023	12.75	%		1,184,147		1,175,581		1,185,820		(5)(8)(9)
						6,257,574		6,357,314
BAART Programs, Inc.			Health Care Services
First Lien Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00	%		1,197,000		1,185,030		1,194,008		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+5.00% cash due 6/11/2027	6.00	%		90,000		87,103		89,250		(5)(8)(9)
Second Lien Term Loan, LIBOR+8.50% cash due 6/11/2028	9.50	%		1,754,000		1,727,690		1,745,230		(5)(8)
Second Lien Delayed Draw Term Loan, LIBOR+8.50% cash due 6/11/2028				—		(12,769)		(4,385)		(5)(8)(9)
						2,987,054		3,024,103
Berner Food & Beverage, LLC			Soft Drinks
First Lien Term Loan, LIBOR+6.50% cash due 7/30/2027	7.50	%		8,078,034		7,940,733		7,940,707		(5)(8)
First Lien Revolver, LIBOR+6.50% cash due 7/30/2027	7.50	%		149,593		136,880		136,878		(5)(8)(9)
						8,077,613		8,077,585
Blumenthal Temecula, LLC			Automotive Retail
First Lien Term Loan, 9.00% cash due 9/24/2023				1,277,827		1,277,827		1,277,827		(8)
415,294 Preferred Units in Unstoppable Automotive AMV, LLC						415,294		415,294		(8)
95,837 Preferred Units in Unstoppable Automotive VMV, LLC						95,837		95,837		(8)
95,837 Common Units in Unstoppable Automotive AMV, LLC						95,837		95,837		(8)
31,946 Common Units in Unstoppable Automotive VMV, LLC						31,946		31,946		(8)
						1,916,741		1,916,741
Cadence Aerospace, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+6.50% cash 2.00% PIK due 11/14/2023	7.50	%		3,155,766		3,125,999		2,898,255		(5)(8)
						3,125,999		2,898,255
Chief Power Finance II, LLC			Independent Power Producers & Energy Traders
First Lien Term Loan, LIBOR+6.50% cash due 12/31/2022	7.50	%		7,650,000		7,574,559		7,554,375		(5)(8)
						7,574,559		7,554,375

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
CITGO Holding, Inc.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+7.00% cash due 8/1/2023	8.00	%		$	649,713	$	632,186	$	642,891	(5)
						632,186		642,891
CITGO Petroleum Corp.			Oil & Gas Refining & Marketing
First Lien Term Loan, LIBOR+6.25% cash due 3/28/2024	7.25	%		7,110,606		7,039,500		7,134,320		(5)
						7,039,500		7,134,320
Continental Intermodal Group LP			Oil & Gas Storage & Transportation
First Lien Term Loan, LIBOR+9.50% PIK due 1/28/2025				9,902,357		9,902,357		8,311,048		(5)(8)
Common Stock Warrants expiration date 7/28/2025						—		486,258		(8)
						9,902,357		8,797,306
Convergeone Holdings, Inc.			IT Consulting & Other Services
First Lien Term Loan, LIBOR+5.00% cash due 1/4/2026	5.08	%		5,789,540		5,644,359		5,772,258		(5)
						5,644,359		5,772,258
CorEvitas, LLC			Health Care Services
First Lien Term Loan, LIBOR+5.50% cash due 12/13/2025	6.50	%		3,722,865		3,677,272		3,691,221		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 12/13/2025	6.50	%		709,056		693,504		697,725		(5)(8)(9)
First Lien Revolver, PRIME+4.50% cash due 12/13/2025	7.75	%		111,500		103,307		105,814		(5)(8)(9)
401 Class A2 Common Units in CorEvitas Group Holdings, L.P.						378,610		429,503		(8)
						4,852,693		4,924,263
Coty Inc.			Personal Products
First Lien Revolver, LIBOR+1.75% cash due 4/5/2023				—		(457,344)		(254,080)		(5)(8)(9)(10)
						(457,344)		(254,080)
CPC Acquisition Corp.			Specialty Chemicals
Second Lien Term Loan, LIBOR+7.75% cash due 12/29/2028	8.50	%		727,000		716,095		732,453		(5)
						716,095		732,453
Curium Bidco S.à.r.l.			Biotechnology
Second Lien Term Loan, LIBOR+7.75% cash due 10/27/2028	8.50	%		3,788,000		3,731,180		3,851,941		(5)(8)(10)
						3,731,180		3,851,941
Dialyze Holdings, LLC			Health Care Equipment
First Lien Term Loan, LIBOR+7.00% cash 2.00% PIK due 8/4/2026	8.00	%		4,429,232		4,124,905		4,130,258		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash 2.00% PIK due 8/4/2026				—		(31,261)		(29,961)		(5)(8)(9)
993,431 Class A Warrants (exercise price $1.00) expiration date 8/4/2028						258,292		268,226		(8)
						4,351,936		4,368,523
Digital.AI Software Holdings, Inc.			Application Software
First Lien Term Loan, LIBOR+7.00% cash due 2/10/2027	8.00	%		2,637,713		2,566,997		2,579,683		(5)(8)
First Lien Revolver, LIBOR+7.00% cash due 2/10/2027	8.00	%		47,339		39,724		41,090		(5)(8)(9)
						2,606,721		2,620,773
DirecTV Financing, LLC			Cable & Satellite
First Lien Term Loan, LIBOR+5.00% cash due 8/2/2027	5.75	%		9,000,000		8,910,000		9,015,930		(5)
						8,910,000		9,015,930
EHR Canada, LLC			Food Retail
First Lien Term Loan, LIBOR+8.00% cash due 12/31/2021	9.00	%		250,000		249,637		250,000		(5)(8)
						249,637		250,000
Enviva Holdings, LP			Forest Products
First Lien Term Loan, LIBOR+5.50% cash due 2/17/2026	6.50	%		1,959,339		1,939,746		1,964,238		(5)(8)(10)
						1,939,746		1,964,238

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Fortress Biotech, Inc.			Biotechnology
First Lien Term Loan, 11.00% cash due 8/27/2025				$	2,943,000	$	2,803,017	$	2,869,425	(8)(10)(12)
85,811 Common Stock Warrants (exercise price $3.20) expiration date 8/27/2030						90,960		88,385		(8)(10)
						2,893,977		2,957,810
GI Chill Acquisition LLC			Managed Health Care
First Lien Term Loan, LIBOR+3.75% cash due 8/6/2025	3.90	%		1,940,000		1,930,300		1,935,150		(5)(8)
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/2026	7.63	%		2,000,000		1,987,852		1,990,000		(5)(8)
						3,918,152		3,925,150
Gibson Brands, Inc.			Leisure Products
First Lien Term Loan, LIBOR+5.00% cash due 8/11/2028	5.75	%		1,500,000		1,485,000		1,492,500		(5)
						1,485,000		1,492,500
Global Medical Response, Inc.			Health Care Services
First Lien Term Loan, LIBOR+4.25% cash due 3/14/2025	5.25	%		1,067,720		1,053,918		1,073,192		(5)
First Lien Term Loan, LIBOR+4.75% cash due 10/2/2025	5.75	%		3,745,001		3,683,273		3,764,194		(5)
						4,737,191		4,837,386
Grab Holdings Inc.			Interactive Media & Services
First Lien Term Loan, LIBOR+4.50% cash due 1/29/2026	5.50	%		3,980,000		3,876,279		4,033,053		(5)(10)
						3,876,279		4,033,053
Gulf Operating, LLC			Oil & Gas Storage & Transportation
First Lien Revolver, LIBOR+4.00% cash due 12/27/2021				—		(242,900)		(26,025)		(5)(8)(9)
						(242,900)		(26,025)
iCIMs, Inc.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 9/12/2024	7.50	%		2,517,618		2,487,768		2,506,876		(5)(8)
First Lien Revolver, LIBOR+6.50% cash due 9/12/2024	7.50	%		88,235		87,128		87,859		(5)(8)
						2,574,896		2,594,735
Immucor, Inc.			Health Care Supplies
First Lien Term Loan, LIBOR+5.75% cash due 7/2/2025	6.75	%		2,342,678		2,307,525		2,319,251		(5)(8)
Second Lien Term Loan, LIBOR+8.00% cash 3.50% PIK due 10/2/2025	9.00	%		5,908,637		5,822,441		5,849,551		(5)(8)
						8,129,966		8,168,802
Indivior Finance S.À.R.L.			Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% cash due 6/30/2026	6.00	%		1,995,000		1,956,371		1,988,347		(5)(10)
						1,956,371		1,988,347
Intelsat Jackson Holdings S.A.			Alternative Carriers
First Lien Term Loan, PRIME+4.75% cash due 11/27/2023	8.00	%		986,227		964,264		1,001,020		(5)(10)
						964,264		1,001,020
Inventus Power, Inc.			Electrical Components & Equipment
First Lien Term Loan, LIBOR+5.00% cash due 3/29/2024	6.00	%		4,560,085		4,522,223		4,525,884		(5)(8)
Second Lien Term Loan, LIBOR+8.50% cash due 9/29/2024	9.50	%		2,750,000		2,702,992		2,701,875		(5)(8)
						7,225,215		7,227,759
INW Manufacturing, LLC			Personal Products
First Lien Term Loan, LIBOR+5.75% cash due 5/7/2027	6.50	%		11,850,000		11,516,219		11,613,000		(5)(8)
						11,516,219		11,613,000
Itafos Inc.			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+8.25% cash due 8/25/2024	9.25	%		5,442,000		5,231,669		5,235,204		(5)(8)
						5,231,669		5,235,204
Ivanti Software, Inc.			Application Software
Second Lien Term Loan, LIBOR+8.50% cash due 12/1/2028	9.50	%		7,975,000		7,753,202		7,984,969		(5)(8)
						7,753,202		7,984,969
Jazz Acquisition, Inc.			Aerospace & Defense
First Lien Term Loan, LIBOR+7.50% cash due 1/29/2027	8.50	%		9,509,160		9,263,766		9,490,379		(5)(8)(12)
						9,263,766		9,490,379
Latam Airlines Group S.A.			Airlines
First Lien Delayed Draw Term Loan, LIBOR+11.00% PIK due 3/29/2022				4,208,032		4,169,586		4,238,488		(5)(8)(9)(10)
						4,169,586		4,238,488

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Lightbox Intermediate, L.P.			Real Estate Services
First Lien Term Loan, LIBOR+5.00% cash due 5/9/2026	5.13	%		$	8,797,500	$	8,710,292	$	8,753,513	(5)(8)
						8,710,292		8,753,513
Lightstone Holdco LLC			Electric Utilities
First Lien Term Loan, LIBOR+3.75% cash due 1/30/2024	4.75	%		1,902,000		1,641,216		1,578,793		(5)
						1,641,216		1,578,793
LTI Holdings, Inc.			Electronic Components
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/2026	6.83	%		1,396,000		1,375,156		1,394,255		(5)
						1,375,156		1,394,255
Maravai Intermediate Holdings, LLC			Biotechnology
First Lien Term Loan, LIBOR+3.75% cash due 10/19/2027	4.75	%		5,909,583		5,850,488		5,933,606		(5)
						5,850,488		5,933,606
Marinus Pharmaceuticals, Inc.			Pharmaceuticals
First Lien Term Loan, 11.50% cash due 5/11/2026				2,529,720		2,483,088		2,491,774		(8)(10)
First Lien Delayed Draw Term Loan, 11.50% cash due 5/11/2026				—		—		—		(8)(9)(10)
						2,483,088		2,491,774
MedAssets Software Intermediate Holdings, Inc.			Health Care Technology
Second Lien Term Loan, LIBOR+7.75% cash due 1/29/2029	8.50	%		4,874,000		4,784,294		4,813,075		(5)(8)
						4,784,294		4,813,075
MHE Intermediate Holdings, LLC			Diversified Support Services
First Lien Term Loan, LIBOR+5.75% cash due 7/21/2027	6.75	%		4,107,143		4,027,699		4,025,000		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+5.75% cash due 7/21/2027	6.75	%		26,429		20,807		20,807		(5)(8)(9)
First Lien Revolver, LIBOR+5.75% cash due 7/21/2027				—		(6,908)		(7,143)		(5)(8)(9)
						4,041,598		4,038,664
Mindbody, Inc.			Internet Services & Infrastructure
First Lien Term Loan, LIBOR+7.00% cash 1.50% PIK due 2/14/2025	8.00	%		7,385,581		7,304,181		7,245,255		(5)(8)
First Lien Revolver, LIBOR+8.00% cash due 2/14/2025				—		(8,568)		(14,476)		(5)(8)(9)
						7,295,613		7,230,779
Mosaic Companies, LLC			Home Improvement Retail
First Lien Term Loan, LIBOR+6.75% cash due 7/2/2026	7.75	%		11,595,000		11,374,657		11,374,695		(5)(8)
						11,374,657		11,374,695
MRI Software LLC			Application Software
First Lien Term Loan, LIBOR+5.50% cash due 2/10/2026	6.50	%		7,031,843		6,986,046		7,027,448		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 2/10/2026				—		(8,232)		(145)		(5)(8)(9)
First Lien Revolver, LIBOR+5.50% cash due 2/10/2026				—		(4,612)		(288)		(5)(8)(9)
						6,973,202		7,027,015
Navisite, LLC			Data Processing & Outsourced Services
Second Lien Term Loan, LIBOR+8.50% cash due 12/30/2026	9.50	%		7,779,000		7,642,947		7,646,757		(5)(8)
						7,642,947		7,646,757
NeuAG, LLC			Fertilizers & Agricultural Chemicals
First Lien Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024	7.00	%		13,405,671		13,038,932		13,110,746		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash 7.00% PIK due 9/11/2024				—		(62,040)		(34,122)		(5)(8)(9)
						12,976,892		13,076,624
NN, Inc.			Industrial Machinery
First Lien Term Loan, LIBOR+6.88% cash due 9/19/2026	7.88	%		14,802,615		14,468,636		14,580,576		(5)(8)(10)
						14,468,636		14,580,576

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
OEConnection LLC			Application Software
First Lien Term Loan, LIBOR+4.00% cash due 9/25/2026	4.08	%		$	9,324,115	$	9,281,397	$	9,312,460	(5)
						9,281,397		9,312,460
Olaplex, Inc.			Personal Products
First Lien Term Loan, LIBOR+6.25% cash due 1/8/2026	7.25	%		11,546,327		11,392,153		11,459,729		(5)(8)
First Lien Revolver, LIBOR+6.25% cash due 1/8/2025				—		(13,422)		(16,108)		(5)(8)(9)
						11,378,731		11,443,621
OTG Management, LLC			Airport Services
First Lien Term Loan, LIBOR+10.00% cash due 9/1/2025	11.00	%		3,205,000		3,142,216		3,140,900		(5)(8)
First Lien Delayed Draw Term Loan, LIBOR+10.00% cash due 9/1/2025				—		(5,979)		(6,104)		(5)(8)(9)
						3,136,237		3,134,796
Park Place Technologies, LLC			Internet Services & Infrastructure
First Lien Term Loan, LIBOR+5.00% cash due 11/10/2027	6.00	%		4,975,000		4,800,895		4,980,696		(5)
						4,800,895		4,980,696
Performance Health Holdings, Inc.			Health Care Distributors
First Lien Term Loan, LIBOR+6.00% cash due 7/12/2027	7.00	%		4,915,000		4,820,334		4,816,700		(5)(8)
						4,820,334		4,816,700
Planview Parent, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 12/18/2028	8.00	%		9,872,000		9,723,920		9,896,680		(5)(8)
						9,723,920		9,896,680
PLNTF Holdings, LLC			Leisure Facilities
First Lien Term Loan, LIBOR+8.00% cash due 3/22/2026	9.00	%		4,408,845		4,329,641		4,430,889		(5)(8)
						4,329,641		4,430,889
Pluralsight, LLC			Application Software
First Lien Term Loan, LIBOR+8.00% cash due 4/6/2027	9.00	%		15,361,250		15,076,598		15,069,387		(5)(8)
First Lien Revolver, LIBOR+8.00% cash due 4/6/2027				—		(19,440)		(20,101)		(5)(8)(9)
						15,057,158		15,049,286
PRGX Global, Inc.			Data Processing & Outsourced Services
First Lien Term Loan, LIBOR+6.75% cash due 3/3/2026	7.75	%		8,256,663		8,110,702		8,118,504		(5)(8)
First Lien Revolver, LIBOR+6.75% cash due 3/3/2026				—		(10,773)		(10,197)		(5)(8)(9)
19,485 Class B Common Units						19,485		19,485		(8)
						8,119,414		8,127,792
ProFrac Services, LLC			Industrial Machinery
First Lien Term Loan, LIBOR+8.50% cash due 9/15/2023	9.75	%		1,176,313		1,171,701		1,164,550		(5)(8)
						1,171,701		1,164,550
Project Boost Purchaser, LLC			Application Software
Second Lien Term Loan, LIBOR+8.00% cash due 5/31/2027	8.08	%		1,500,000		1,500,000		1,492,500		(5)(8)
						1,500,000		1,492,500
Quantum Bidco Limited			Food Distributors
First Lien Term Loan, UK LIBOR+6.00% cash due 1/29/2028	6.11	%		£	1,125,000	1,486,303		1,501,725		(5)(10)
						1,486,303		1,501,725
Relativity ODA LLC			Application Software
First Lien Term Loan, LIBOR+7.50% PIK due 5/12/2027				$	5,601,876	5,474,760		5,484,237		(5)(8)
First Lien Revolver, LIBOR+6.50% cash due 5/12/2027				—		(12,712)		(11,418)		(5)(8)(9)
						5,462,048		5,472,819
Renaissance Holding Corp.			Diversified Banks
Second Lien Term Loan, LIBOR+7.00% cash due 5/29/2026	7.08	%		1,138,000		1,129,465		1,144,401		(5)
						1,129,465		1,144,401

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
RumbleOn, Inc.			Automotive Retail
First Lien Term Loan, LIBOR+8.25% cash due 8/31/2026	9.25	%		$	9,192,486	$	8,616,072	$	8,613,359	(5)(8)(10)
First Lien Delayed Draw Term Loan, LIBOR+8.25% cash due 8/31/2026				—		(247,035)		(248,197)		(5)(8)(9)(10)
39,794 Class B Common Stock Warrants (exercise price $33.00) expiration date 2/28/2023						290,496		375,257		(8)(10)
						8,659,533		8,740,419
Sabert Corporation			Metal & Glass Containers
First Lien Term Loan, LIBOR+4.50% cash due 12/10/2026	5.50	%		2,727,699		2,700,422		2,737,928		(5)
						2,700,422		2,737,928
Scilex Pharmaceuticals Inc.			Pharmaceuticals
Fixed Rate Zero Coupon Bond due 8/15/2026				1,153,753		976,809		1,075,413		(8)
						976,809		1,075,413
SIO2 Medical Products, Inc.			Metal & Glass Containers
Subordinated Debt, 11.25% cash due 2/28/2022				2,883,000		2,749,617		2,724,435		(8)
Subordinated Delayed Draw Debt, 11.25% cash due 2/28/2022				—		(19,881)		(21,623)		(8)(9)
Common Stock Warrants (exercise price $0.75) expiration date 7/31/2028						123,557		124,249		(8)
						2,853,293		2,827,061
Sirva Worldwide, Inc.			Diversified Support Services
First Lien Term Loan, LIBOR+5.50% cash due 8/4/2025	5.58	%		434,731		428,210		410,958		(5)
						428,210		410,958
SM Wellness Holdings, Inc.			Health Care Services
Second Lien Term Loan, LIBOR+8.00% cash due 4/16/2029	8.75	%		2,925,000		2,881,125		2,946,938		(5)(8)
						2,881,125		2,946,938
Sorenson Communications, LLC			Communications Equipment
First Lien Term Loan, LIBOR+5.50% cash due 3/17/2026	6.25	%		4,746,200		4,698,738		4,784,763		(5)
						4,698,738		4,784,763
Sorrento Therapeutics, Inc.			Biotechnology
25,600 Common Stock Units						63,040		122,080		(10)
						63,040		122,080
Star US Bidco LLC			Industrial Machinery
First Lien Term Loan, LIBOR+4.25% cash due 3/17/2027	5.25	%		5,221,148		4,961,750		5,242,920		(5)
						4,961,750		5,242,920
SumUp Holdings Luxembourg S.À.R.L.			Other Diversified Financial Services
First Lien Delayed Draw Term Loan, EURIBOR+8.50% cash due 3/10/2026	10.00	%		€	5,637,867	6,559,321		6,415,445		(5)(8)(9)(10)
						6,559,321		6,415,445
Sunland Asphalt & Construction, LLC			Construction & Engineering
First Lien Term Loan, LIBOR+6.00% cash due 1/13/2026	7.00	%		$	11,720,960	11,519,948		11,556,867		(5)(8)
First Lien Revolver, LIBOR+6.00% cash due 1/13/2022	7.00	%		55,236		44,849		46,122		(5)(8)(9)
						11,564,797		11,602,989
Supermoose Borrower, LLC			Application Software
First Lien Term Loan, LIBOR+3.75% cash due 8/29/2025	3.88	%		2,894,861		2,634,239		2,699,009		(5)
						2,634,239		2,699,009
SVP-Singer Holdings Inc.			Home Furnishings
First Lien Term Loan, LIBOR+6.75% cash due 7/28/2028	7.50	%		5,072,000		4,723,943		4,771,890		(5)(8)
						4,723,943		4,771,890
Tacala, LLC			Restaurants
Second Lien Term Loan, LIBOR+7.50% cash due 2/4/2028	8.25	%		3,394,977		3,347,525		3,396,250		(5)
						3,347,525		3,396,250
Tecta America Corp.			Construction & Engineering
Second Lien Term Loan, LIBOR+8.50% cash due 4/9/2029	9.25	%		1,671,000		1,645,935		1,671,000		(5)(8)
						1,645,935		1,671,000

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)		Industry	Principal (6)		Cost		Fair Value		Notes
Telestream Holdings Corporation			Application Software
First Lien Term Loan, LIBOR+8.75% cash due 10/15/2025	9.75	%		$	5,275,138	$	5,194,678	$	5,201,286	(5)(8)
First Lien Revolver, LIBOR+8.75% cash due 10/15/2025	9.75	%		140,280		132,091		133,266		(5)(8)(9)
						5,326,769		5,334,552
TerSera Therapeutics LLC			Pharmaceuticals
Second Lien Term Loan, LIBOR+10.00% cash due 3/30/2026	11.00	%		6,100,000		5,951,995		6,148,666		(5)(8)
						5,951,995		6,148,666
Thermacell Repellents, Inc.			Leisure Products
First Lien Term Loan, LIBOR+5.75% cash due 12/4/2026	6.75	%		6,636,042		6,602,572		6,603,150		(5)(8)
First Lien Revolver, LIBOR+5.75% cash due 12/4/2026				—		(4,167)		(4,167)		(5)(8)(9)
						6,598,405		6,598,983
Thrasio, LLC			Internet & Direct Marketing Retail
First Lien Term Loan, LIBOR+7.00% cash due 12/18/2026	8.00	%		9,796,366		9,568,725		9,747,384		(5)(8)
2,182 Shares of Series C-3 Preferred Stock in Thrasio Holdings, Inc.						26,665		44,186		(8)
73,648 Shares of Series C-2 Preferred Stock in Thrasio Holdings, Inc.						600,000		1,491,376		(8)
6,000 Shares of Series X Preferred Stock in Thrasio Holdings, Inc.						6,000,300		6,414,321		(8)(9)
						16,195,690		17,697,267
TIBCO Software Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 3/3/2028	7.34	%		1,394,000		1,379,054		1,411,774		(5)
						1,379,054		1,411,774
Velocity Commercial Capital, LLC			Thrifts & Mortgage Finance
First Lien Term Loan, LIBOR+8.00% cash due 2/5/2026	9.00	%		3,850,058		3,748,666		3,830,807		(5)(8)
						3,748,666		3,830,807
Veritas US Inc.			Application Software
First Lien Term Loan, LIBOR+5.00% cash due 9/1/2025	6.00	%		7,425,141		7,307,798		7,469,209		(5)
						7,307,798		7,469,209
Verscend Holding Corp.			Health Care Technology
First Lien Term Loan, LIBOR+4.00% cash due 8/27/2025	4.08	%		834,184		818,972		836,440		(5)
						818,972		836,440
Virgin Pulse, Inc.			Application Software
Second Lien Term Loan, LIBOR+7.25% cash due 4/6/2029	8.00	%		1,540,000		1,524,600		1,543,850		(5)
						1,524,600		1,543,850
Win Brands Group LLC			Housewares & Specialties
First Lien Term Loan, LIBOR+9.00% cash 5.00% PIK due 1/22/2026	10.00	%		652,012		645,632		648,752		(5)(8)
62 Class F Warrants in Brand Value Growth LLC (exercise price $0.01) expiration date 1/25/2027						—		41,013		(8)
						645,632		689,765
Windstream Services II, LLC			Integrated Telecommunication Services
First Lien Term Loan, LIBOR+6.25% cash due 9/21/2027	7.25	%		10,861,810		10,490,500		10,928,339		(5)
						10,490,500		10,928,339
WP CPP Holdings, LLC			Aerospace & Defense
First Lien Term Loan, LIBOR+3.75% cash due 4/30/2025	4.75	%		3,893,225		3,877,791		3,799,535		(5)
						3,877,791		3,799,535
WPEngine, Inc.			Application Software
First Lien Term Loan, LIBOR+6.50% cash due 3/27/2026	7.50	%		14,623,000		14,349,695		14,434,364		(5)(8)
						14,349,695		14,434,364
Zephyr Bidco Limited			Specialized Finance
Second Lien Term Loan, UK LIBOR+7.50% cash due 7/23/2026	7.55	%		£	2,000,000	2,585,581		2,689,958		(5)(10)
						2,585,581		2,689,958

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021


Portfolio Company/Type of Investment (1)(2)(3)(4)	Cash Interest Rate (5)	Industry	Principal (6)	Cost		Fair Value		Notes
Total Non-Control/Non-Affiliate Investments (166.1% of net assets)				$	568,303,425	$	575,429,432
Cash and Cash Equivalents and Restricted Cash (6.8% of net assets)				$	23,573,015	$	23,573,015
Total Portfolio Investments, Cash and Cash Equivalents and Restricted Cash (172.9% of net assets)				$	591,876,440	$	599,002,447


Derivative Instrument	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Counterparty	Cumulative Unrealized Appreciation (Depreciation)
Foreign currency forward contract	$	13,551,234	€	11,534,208	11/12/2021	Bank of New York Mellon	$	173,075
Foreign currency forward contract	$	17,392,336	£	12,568,533	11/12/2021	Bank of New York Mellon	$	444,929
							$	618,004

Oaktree Strategic Income II, Inc.

Consolidated Schedule of Investments

September 30, 2021

(1)All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.

(2)See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.

(5)The interest rate on the principal balance outstanding for all floating rate loans is indexed to the LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate base rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2021, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 0.08%, the 60-day LIBOR at 0.11%, the 90-day LIBOR at 0.13%, the 180-day LIBOR at 0.16%, the 360-day LIBOR at 0.24%, the PRIME at 3.25%, the 30-day UK LIBOR at 0.05%, the 180-day UK LIBOR at 0.09%, the 30-day EURIBOR at (0.57)%, the 90-day EURIBOR at (0.56)% and the 180-day EURIBOR at (0.53)%. Most loans include an interest floor, which generally ranges from 0% to 1%.

(6)Principal includes accumulated PIK interest and is net of repayments, if any. "€" signifies the investment is denominated in Euros. “£” signifies the investment is denominated in British Pounds. All other investments are denominated in U.S. dollars.

(7)Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments. Control Investments generally are defined by the Investment Company Act, as investments in companies in which the Company owns more than 25% of the voting securities and/or has the power to exercise control over the management or policies of the company. Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.

(8)As of September 30, 2021, these investments are categorized as Level 3 within the fair value hierarchy established by ASC 820 and were valued using significant unobservable inputs.

(10)Investment is not a qualifying asset as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2021, qualifying assets represented 79.8% of the Company's total assets and non-qualifying assets represented 20.2% of the Company's total assets.

(11)PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment subsequent to a restructuring that occurred during the year ended September 30, 2021. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of September 30, 2021, the accumulated PIK interest balance for each of the Alvotech A notes and the B notes was $0.1 million. The fair value of this investment is inclusive of PIK interest income.

(12)The sale of all or a portion of this investment did not qualify for sale accounting under ASC 860, and therefore the investment remains on the Company's Consolidated Schedule of Investments as of September 30, 2021. See "Secured Borrowings" in Note 6 in the Company's annual report on Form 10-K for year ended September 30, 2021 for further details.

See notes to Consolidated Financial Statements.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization

Oaktree Strategic Income II, Inc. (together with its consolidated subsidiaries, where applicable, the "Company") is structured as a closed-end investment company focused on lending to small- and medium-sized companies. The Company has elected to be regulated as a business development company (a "BDC") under the Investment Company Act of 1940, as amended (the "Investment Company Act") and has elected to be treated, and intends to comply with the requirements to qualify annually, as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the "Code").

The Company was formed on April 30, 2018 as a Delaware corporation and as of June 30, 2022 is externally managed by Oaktree Fund Advisors, LLC (the "Adviser") pursuant to an investment advisory agreement (the “Investment Advisory Agreement”), between the Company and the Adviser, which was approved by the Board of Directors of the Company on May 11, 2020. From July 9, 2018 through May 11, 2020, the Company was managed by Oaktree Capital Management, L.P., an affiliate of the Adviser. The Adviser is a subsidiary of Oaktree Capital Group, LLC ("OCG"). In 2019, Brookfield Asset Management Inc. ("Brookfield") acquired a majority economic interest in OCG. OCG operates as an independent business within Brookfield, with its own product offerings and investment, marketing and support teams.

The Company conducted private offerings (each, a “Private Offering”) of its common stock ("Common Stock") to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At each closing of a Private Offering, each investor participating in that closing made a capital commitment (each, a “Capital Commitment”) to purchase the Company's Common Stock pursuant to a subscription agreement entered into with the Company in connection with its Capital Commitment ("Subscription Agreement"). The initial closing of a Private Offering occurred on August 6, 2018 (the "Initial Closing"). The Company commenced its loan origination and investment activities shortly after its initial capital drawdown from its non-affiliated investors (the "Initial Drawdown"). The proceeds from the Initial Drawdown provided the Company with the necessary seed capital to commence operations. As of June 30, 2022, the Company completed drawdowns of $337,558,996, or 100%, of Capital Commitments from investors in connection with Private Offerings, of which $3,854,346 in Capital Commitments were made by one or more affiliates of the Adviser.

The Company seeks to invest opportunistically across asset classes and geographies, primarily in the form of senior loans, and to a lesser extent, high yield bonds, to borrowers that are in need of direct loans, rescue financings or other capital solutions or that have had challenged or unsuccessful primary offerings. The Company's investment objective is to generate current income and long-term capital appreciation. The Company seeks to achieve its investment objective without subjecting principal to undue risk of loss by lending to and investing in the debt of public and private companies, primarily in situations where a company or its owners are (a) overleveraged or facing pressure to recapitalize, (b) unable to access broadly syndicated capital markets, (c) undervalued after having recently exited bankruptcy, completed a restructuring or are in a cyclically out-of-favor industry or (d) otherwise affected by mispricings or inefficiencies in the capital markets or at different points throughout the credit cycle.

Note 2. Significant Accounting Policies

Basis of Presentation:

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the Consolidated Financial Statements have been made. All intercompany balances and transactions have been eliminated in consolidation. The Company is an investment company following the accounting and reporting guidance in FASB ASC Topic 946, Financial Services - Investment Companies ("ASC 946").

Use of Estimates:

The preparation of the financial statements in conformity with GAAP requires management to make certain estimates and assumptions affecting amounts reported in the financial statements and accompanying notes. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Changes in the economic and political environments, financial markets and any other parameters used in determining these estimates could cause actual results to differ and such differences could be material. Significant estimates include the valuation of investments and revenue recognition.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidation:

The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. Each consolidated subsidiary is wholly-owned and, as such, consolidated into the consolidated financial statements. Certain subsidiaries of the Company that hold investments are treated as pass through entities for tax purposes. The assets of the consolidated subsidiaries are not directly available to satisfy the claims of the creditors of the Company. As an investment company, portfolio investments held by the Company are not consolidated into the consolidated financial statements but rather are included on the Consolidated Statements of Assets and Liabilities as investments at fair value.

Fair Value Measurements:

The Company's board of directors, with the assistance of its audit committee (the “Audit Committee”) and the Adviser, determines the fair value of its assets on at least a quarterly basis, in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement. The Audit Committee is comprised of independent directors. The Company's investments are valued at fair value. For purposes of periodic reporting, the Company values its assets in accordance with GAAP and based on the principles and methods of valuation summarized below. GAAP requires that a “fair value” be assigned to all assets and establishes a single authoritative definition of fair value that includes a framework for measuring fair value and enhanced disclosures about fair value measurements.

GAAP establishes a hierarchal disclosure framework, which prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value.

Financial assets and liabilities measured and reported at fair value are classified as follows:

•Level I - Quoted unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement.

•Level III - Valuations for which one or more significant inputs are unobservable. These inputs reflect our assessment of the assumptions that market participants use to value the investment based on the best available information. Level III inputs include prices obtained from brokers in markets for which there are few transactions, less public information exists or prices vary among broker market makers.

In some instances, an instrument may fall into different levels of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the value measurement. The assessment of the significance of an input requires judgment and considers factors specific to the instrument. The transfer of assets into or out of each fair value hierarchy level as a result of changes in the observability of the inputs used in measuring fair value are accounted for as of the beginning of the reporting period. Transfers resulting from a specific event, such as a reorganization or restructuring, are accounted for as of the date of the event that caused the transfer.

In the absence of observable market prices, the Company values Level III investments using valuation methodologies applied on a consistent basis. The quarterly valuation process for Level III investments begins with each portfolio company, property or security being initially valued by the Adviser's valuation team in conjunction with the investment team. The preliminary valuations are then reviewed and approved by the valuation team, the valuation committee, which consists of senior members of the investment team, and designated investment professionals as well as the valuation officer who is independent of the investment teams. The Audit Committee reviews the preliminary valuations provided by the valuation committee and makes a recommendation to the Company's full board of directors regarding the fair value of the investments in our portfolio. The Company's board of directors ultimately determines in good faith the fair value of each investment in the Company's portfolio. Results of the valuation process are evaluated each quarter, including an assessment of whether the underlying calculations should be adjusted or recalibrated. In connection with this process, the Company evaluates changes in fair value measurements from period to period for reasonableness, considering items such as industry trends, general economic and market conditions, and factors specific to the investment.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for similar securities or may require adjustment for investment-specific factors or restrictions. The Company seeks to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If the Company is unable to obtain two quotes from pricing vendors, or if the prices obtained from pricing vendors are not within the Company's set threshold, the Company seeks to obtain a quote directly from a broker making a market for the asset. However, given the nature of our portfolio, the Company does not expect that all of our Level III assets will be valued at least annually using prices obtained from pricing vendors or brokers. Generally, the Company does not adjust any of the prices received from these sources, and all prices are reviewed by the Company. The Company evaluates the prices obtained from pricing vendors or brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. The Adviser also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, the Adviser performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process.

Non-publicly traded debt and equity securities and other securities or instruments for which reliable market quotations are not available are valued by the Company using valuation methodologies applied on a consistent basis. These securities may initially be valued at the acquisition price as the best indicator of fair value. The Company reviews the significant unobservable inputs, valuations of comparable investments and other similar transactions for investments valued at acquisition price to determine whether another valuation methodology should be utilized. Subsequent valuations will depend on facts and circumstances known as of the valuation date and the application of valuation methodologies further described below under “– Non-Exchange-Traded Investments.” The fair value may also be based on a pending transaction expected to close after the valuation date. These valuation methodologies involve a significant degree of management judgment. Accordingly, valuations do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments in the future. Fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the consolidated financial statements.

Exchange-Traded Investments

Securities listed on one or more national securities exchanges are valued at their last reported sales price on the date of valuation. If no sale occurred on the valuation date, the security is valued at the mean of the last “bid” and “ask” prices on the valuation date. Securities that are not marketable due to legal restrictions that may limit or restrict transferability are generally valued at a discount from quoted market prices. The discount would reflect the amount market participants would require due to the risk relating to the inability to access a public market for the security for the specified period and would vary depending on the nature and duration of the restriction and the risk and volatility of the underlying securities. Securities with longer duration restrictions or higher volatility are generally valued at a higher discount. Such discounts are generally estimated based on put option models or analysis of market studies. Instances where discounts have been applied to quoted prices of restricted listed securities have been infrequent. The impact of such discounts is not material to the consolidated financial statements.

Non-Exchange-Traded Investments

Investments in corporate and government debt which are not listed or admitted to trading on any securities exchange are valued at the mean of the last bid and ask prices on the valuation date based on quotations supplied by recognized quotation services or by reputable broker dealers.

If the quotations obtained from pricing vendors or brokers are determined to not be reliable or are not readily available, the Company values such investments using different valuation techniques. One valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The market yield technique is considered in the valuation of non-publicly traded debt investments, utilizing expected future cash flows, discounted using estimated current market rates. Discounted cash flow calculations may be adjusted to reflect current market conditions and/or the perceived credit risk of the borrowers. Consideration is also given to a borrower’s ability to meet principal and interest obligations; this may include an evaluation of collateral or the underlying value of the borrower, utilizing either the market or income techniques. A market technique utilizes valuations of comparable public companies or transactions and generally seeks to establish the enterprise value of the portfolio company using a market multiple technique. This technique takes into account a specific financial measure (such as earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, free cash flow, net operating income, net income, book value or net asset value) believed to be most relevant for the given company. Consideration may also be given to such factors as acquisition price of the security, historical and projected operational and financial results for the portfolio company, the strengths and weaknesses of the portfolio company relative to its comparable companies, industry trends, general economic and market conditions and other factors deemed relevant. The income technique is typically a discounted cash flow method that incorporates expected timing and level of cash flows. It incorporates assumptions in determining growth rates, income and expense projections, discount rates, capital structure, terminal values and other factors. The applicability and weight assigned to

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

market and income techniques are determined based on the availability of reliable projections and comparable companies and transactions.

The valuation of securities may be impacted by expectations of investors’ receptiveness to a public offering of the securities, the size of the holding of the securities and any associated control, information with respect to transactions or offers for the securities (including the transaction pursuant to which the investment was made and the period of time elapsed from the date of the investment to the valuation date) and applicable restrictions on the transferability of the securities.

Investments made by the Company are, by nature, generally considered to be long-term investments and are not intended to be liquidated on a short-term basis. Additionally, these valuation methodologies involve a significant degree of management judgment. Accordingly, valuations by the Company do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments in the future. Estimated fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the consolidated financial statements.

The Company may estimate the fair value of privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an enterprise value analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk-free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.

With the exception of the line items entitled "deferred financing costs," "other assets," "deferred tax liability," "secured borrowings" and "credit facilities payable," which are reported at amortized cost, all assets and liabilities on the Consolidated Statements of Assets and Liabilities approximate fair value. The carrying value of the line items titled "interest receivable," "receivables from unsettled transactions," "accounts payable, accrued expenses and other liabilities," "base management fee and incentive fees payable," "due to affiliates," "interest payable," "director fees payable" and "payables from unsettled transactions" approximate fair value due to their short maturities.

Foreign Currency Translation:

The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the prevailing foreign exchange rate on the reporting date. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.

Derivative Instruments:

The Company uses foreign currency forward contracts to reduce the Company's exposure to fluctuations in the value of foreign currencies. In a foreign currency forward contract, the Company agrees to receive or deliver a fixed quantity of one currency for another at a pre-determined price at a future date. Foreign currency forward contracts are marked-to-market at the applicable forward rate. Unrealized appreciation (depreciation) on foreign currency forward contracts are recorded as a "derivative asset at fair value" or "derivative liability at fair value" on the Consolidated Statements of Assets and Liabilities by counterparty on a net basis, not taking into account collateral posted which is recorded separately, if applicable. Purchases and settlements of foreign currency forward contracts having the same settlement date and counterparty are generally settled net and any realized gains or losses are recognized on the settlement date. The Company does not utilize hedge accounting with respect to foreign currency forward contracts and as such, the Company recognizes its foreign currency forward contracts at fair value with net unrealized gains or losses included in "net unrealized appreciation (depreciation)" in the Consolidated Statements of Operations and net realized gains or losses included in “net realized gains (losses)” in the Consolidated Statements of Operations.

Secured Borrowings:

Securities sold and simultaneously repurchased at a premium are reported as financing transactions in accordance with FASB ASC Topic 860, Transfers and Servicing ("ASC 860"). Amounts payable to the counterparty are due on the repurchase settlement date and, excluding accrued interest, such amounts are presented in the accompanying Consolidated Statements of Assets and Liabilities as secured borrowings. Premiums payable are separately reported as accrued interest.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment Income:

Interest Income

Interest income, adjusted for accretion of original issue discount ("OID"), is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations. As of each of June 30, 2022 and September 30, 2021, there were no investments on non-accrual status.

In connection with its investment in a portfolio company, the Company sometimes receives nominal cost equity that is valued as part of the negotiation process with the portfolio company. When the Company receives nominal cost equity, the Company allocates its cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.

For the Company's secured borrowings, the interest earned on the entire loan balance is recorded within interest income and the interest earned by the counterparty is recorded within interest expense in the Consolidated Statements of Operations.

PIK Interest Income

The Company's investments in debt securities may contain PIK interest provisions. PIK interest, which generally represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. The Company generally ceases accruing PIK interest if there is insufficient value to support the accrual or if the Company does not expect the portfolio company to be able to pay all principal and interest due. The Company's decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; the Company's assessment of the portfolio company's business development success; information obtained by the Company in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. The Company's determination to cease accruing PIK interest is generally made well before the Company's full write-down of a loan or debt security. In addition, if it is subsequently determined that the Company will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on the Company’s debt investments increases the recorded cost bases of these investments in the consolidated financial statements including for purposes of computing the capital gains incentive fee payable by the Company to the Adviser. To maintain its status as a RIC, certain income from PIK interest may be required to be distributed to the Company’s stockholders, even though the Company has not yet collected the cash and may never do so.

Fee Income

The Adviser or its affiliates may provide financial advisory services to portfolio companies in connection with structuring a transaction and in return the Company may receive fees for capital structuring services. These fees are generally nonrecurring and are recognized by the Company upon the investment closing date. The Company may also receive additional fees in the ordinary course of business, including servicing, amendment, and prepayment fees, which are classified as fee income and recognized as they are earned or the services are rendered.

The Company has also structured exit fees across certain of its portfolio investments to be received upon the future exit of those investments. These fees are typically paid to the Company upon the earliest to occur of (i) a sale of the borrower or substantially all of the assets of the borrower, (ii) the maturity date of the loan or (iii) the date when full prepayment of the loan occurs. The receipt of such fees is contingent upon the occurrence of one of the events listed above for each of the investments. These fees are included in net investment income over the life of the loan.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dividend Income

The Company generally recognizes dividend income on the ex-dividend date for public securities and the record date for private equity investments. Distributions received from private equity investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from private equity investments as dividend income unless there are sufficient earnings at the portfolio company prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.

Cash and Cash Equivalents and Restricted Cash:

Cash and cash equivalents and restricted cash consist of demand deposits and highly liquid investments with maturities of three months or less, when acquired. The Company places its cash and cash equivalents and restricted cash with financial institutions and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limit. Cash and cash equivalents and restricted cash are included on the Company's Consolidated Schedule of Investments and cash equivalents are classified as Level 1 assets.

As of June 30, 2022 and September 30, 2021, included in restricted cash was $9,815,519 and $4,317,968, respectively, which was held at Deutsche Bank Trust Company Americas in connection with the Company's Citibank Facility (defined in Note 6 – Borrowings). The Company was restricted in terms of access to the $9,815,519 and $4,317,968, respectively, until the occurrence of the periodic distribution dates and, in connection therewith, the Company’s submission of its required periodic reporting schedules and verifications of the Company’s compliance with the terms of the Citibank Facility.

Receivables/Payables from Unsettled Transactions:

Receivables/payables from unsettled transactions consist of amounts receivable to or payable by the Company for transactions that have not settled at the reporting date.

Deferred Financing Costs:

Deferred financing costs consist of fees and expenses paid in connection with the closing or amending of credit facilities. Deferred financing costs incurred in connection with credit facilities are capitalized as an asset when incurred. Deferred financing costs incurred in connection with all other debt arrangements are a direct deduction from the related debt liability when incurred. Deferred financing costs are amortized using the effective interest method over the term of the respective debt arrangement. This amortization expense is included in interest expense in the Company's Consolidated Statements of Operations. Upon early termination or modification of a credit facility, all or a portion of unamortized fees related to such facility may be accelerated into interest expense.

Income Taxes:

The Company has elected to be subject to tax as a RIC under Subchapter M of the Code and intends to operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to be subject to tax as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute dividends to its stockholders of an amount generally at least equal to 90% of investment company taxable income, as defined by the Code and determined without regard to any deduction for dividends paid, for each tax year. As a RIC, the Company is not subject to federal income tax on the portion of its taxable income and gains distributed currently to stockholders as a dividend. Depending on the level of taxable income earned during a tax year, the Company may choose to retain taxable income in excess of current year dividend distributions and would distribute such taxable income in the next tax year. The Company would then incur a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income, determined on a calendar year basis, could exceed estimated current calendar year dividend distributions, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. The Company anticipates timely distribution of its taxable income within the tax rules under Subchapter M of the Code. The Company did not incur a U.S. federal excise tax for calendar years 2020 and 2021 and does not expect to incur a U.S. federal excise tax for calendar year 2022.

The Company holds certain portfolio investments through taxable subsidiaries. The purpose of the Company's taxable subsidiaries is to permit the Company to hold equity investments in portfolio companies which are "pass through" entities for U.S. federal income tax purposes in order to comply with the RIC tax requirements. The taxable subsidiaries are consolidated for financial reporting purposes, and portfolio investments held by them are included in the Company’s consolidated financial statements as portfolio investments and recorded at fair value. The taxable subsidiaries are not consolidated with the Company for U.S. federal income tax purposes and may generate income tax expense, or benefit, and the related tax assets and liabilities,

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

as a result of their ownership of certain portfolio investments. This income tax expense, if any, would be reflected in the Company's Consolidated Statements of Operations. The Company uses the liability method to account for its taxable subsidiaries' income taxes. Using this method, the Company recognizes deferred tax assets and liabilities for the estimated future tax effects attributable to temporary differences between financial reporting and tax bases of assets and liabilities. In addition, the Company recognizes deferred tax benefits associated with net operating loss carry forwards that it may use to offset future tax obligations. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply to taxable income in the years in which it expects to recover or settle those temporary differences.

FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes ("ASC 740"), provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the Company's consolidated financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management's determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including an ongoing analysis of tax laws, regulations and interpretations thereof. The Company recognizes the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. Management has analyzed the Company's tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2019, 2020 and 2021. The Company identifies its major tax jurisdictions as U.S. Federal and California, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.

Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The guidance is effective from March 12, 2020 through December 31, 2022. As of June 30, 2022, the adoption of this guidance did not have an impact on the Company's consolidated financial statements.

Note 3. Portfolio Investments

Portfolio Composition

As of June 30, 2022, the fair value of the Company's investment portfolio was $566.7 million and was comprised of investments in 115 portfolio companies. As of September 30, 2021, the fair value of the Company's investment portfolio was $575.4 million and was comprised of investments in 108 portfolio companies.

As of June 30, 2022 and September 30, 2021, the Company's investment portfolio consisted of the following:


	June 30, 2022				September 30, 2021
Cost:			% of Total Investments				% of Total Investments
Senior Secured Debt	$	566,441,459	97.50	%	$	554,526,097	97.57	%
Preferred Equity	10,332,238		1.78	%	7,248,381		1.28	%
Common Equity & Warrants	2,894,660		0.50	%	2,623,630		0.46	%
Subordinated Debt	1,299,461		0.22	%	3,905,317		0.69	%
Total	$	580,967,818	100.00	%	$	568,303,425	100.00	%

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	June 30, 2022						September 30, 2021
Fair Value:			% of Total Investments		% of Net Assets				% of Total Investments		% of Net Assets
Senior Secured Debt	$	551,018,412	97.24	%	169.40	%	$	559,926,869	97.30	%	161.59	%
Preferred Equity	11,515,452		2.03	%	3.54	%	8,585,636		1.49	%	2.48	%
Common Equity & Warrants	2,841,028		0.50	%	0.87	%	3,028,295		0.53	%	0.87	%
Subordinated Debt	1,300,761		0.23	%	0.40	%	3,888,632		0.68	%	1.12	%
Total	$	566,675,653	100.00	%	174.21	%	$	575,429,432	100.00	%	166.06	%

The composition of the Company's debt investments as of June 30, 2022 and September 30, 2021 by floating rates and fixed rates was as follows:


	June 30, 2022				September 30, 2021
	Fair Value		% of Debt Investments		Fair Value		% of Debt Investments
Floating rate	$	509,694,882	92.28	%	$	522,279,872	92.63	%
Fixed rate	42,624,291		7.72	%	41,535,629		7.37	%
Total	$	552,319,173	100.00	%	$	563,815,501	100.00	%

The geographic composition of the Company's portfolio is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company's business. The following tables show the portfolio composition by geographic region at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets:


	June 30, 2022			September 30, 2021
Cost:			% of Total Investments			% of Total Investments
United States	$	513,648,679	88.41%	$	489,879,815	86.21%
United Kingdom	34,883,615		6.00%	33,461,333		5.89%
Switzerland	11,420,464		1.97%	12,733,548		2.24%
Australia	7,776,126		1.34%	7,804,890		1.37%
Iceland	6,811,740		1.17%	6,762,757		1.19%
Luxembourg	6,427,194		1.11%	9,365,580		1.65%
Chile	—		—%	4,169,586		0.73%
Singapore	—		—%	3,876,279		0.68%
Canada	—		—%	249,637		0.04%
Total	$	580,967,818	100.00%	$	568,303,425	100.00%


	June 30, 2022				September 30, 2021
Fair Value:			% of Total Investments	% of Net Assets			% of Total Investments	% of Net Assets
United States	$	502,497,438	88.67%	154.48%	$	495,262,940	86.07%	142.94%
United Kingdom	32,360,923		5.71%	9.95%	34,344,738		5.97%	9.91%
Switzerland	11,475,755		2.03%	3.53%	12,747,940		2.22%	3.68%
Australia	7,821,765		1.38%	2.40%	7,871,723		1.37%	2.27%
Iceland	6,902,229		1.22%	2.12%	6,873,455		1.19%	1.98%
Luxembourg	5,617,543		0.99%	1.73%	9,807,095		1.70%	2.83%
Chile	—		—%	—%	4,238,488		0.74%	1.22%
Singapore	—		—%	—%	4,033,053		0.70%	1.16%
Canada	—		—%	—%	250,000		0.04%	0.07%
Total	$	566,675,653	100.00%	174.21%	$	575,429,432	100.00%	166.06%

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The composition of the Company's portfolio by industry at cost as a percentage of total investments and at fair value as a percentage of total investments and net assets as of June 30, 2022 and September 30, 2021 was as follows:


	June 30, 2022				September 30, 2021
Cost:			% of Total Investments				% of Total Investments
Application Software	$	114,791,606	19.76	%	$	105,037,693	18.50	%
Pharmaceuticals	31,286,094		5.39	%	34,125,774		6.00	%
Biotechnology	23,221,984		4.00	%	32,034,990		5.64	%
Construction & Engineering	21,337,318		3.67	%	20,762,547		3.65	%
Industrial Machinery	20,642,554		3.55	%	20,602,087		3.63	%
Aerospace & Defense	18,599,999		3.20	%	16,267,556		2.86	%
Fertilizers & Agricultural Chemicals	17,790,873		3.06	%	18,208,561		3.20	%
Health Care Technology	17,550,714		3.02	%	5,603,266		0.99	%
Personal Products	16,513,517		2.84	%	28,836,040		5.07	%
Internet & Direct Marketing Retail	16,417,426		2.83	%	16,195,690		2.85	%
Data Processing & Outsourced Services	15,746,936		2.71	%	15,762,361		2.77	%
Health Care Supplies	13,974,081		2.41	%	8,129,966		1.43	%
Insurance Brokers	13,678,059		2.35	%	13,624,213		2.40	%
Automotive Retail	13,365,316		2.30	%	10,576,274		1.86	%
Internet Services & Infrastructure	13,361,386		2.30	%	12,096,508		2.13	%
Health Care Services	12,062,858		2.08	%	15,458,063		2.72	%
Health Care Distributors	11,305,960		1.95	%	4,820,334		0.85	%
Home Improvement Retail	11,266,711		1.94	%	11,374,657		2.00	%
Airport Services	10,561,654		1.82	%	10,385,781		1.83	%
Integrated Telecommunication Services	9,647,987		1.66	%	10,490,500		1.85	%
Distributors	9,638,101		1.66	%	—		—	%
Metal & Glass Containers	9,118,452		1.57	%	5,553,715		0.98	%
Real Estate Services	8,657,515		1.49	%	8,710,292		1.53	%
Cable & Satellite	8,643,224		1.49	%	8,910,000		1.57	%
Soft Drinks	8,366,677		1.44	%	8,077,613		1.42	%
Oil & Gas Storage & Transportation	8,198,818		1.41	%	9,659,457		1.70	%
Other Diversified Financial Services	7,959,220		1.37	%	6,559,321		1.15	%
Movies & Entertainment	7,776,126		1.34	%	7,804,890		1.37	%
Leisure Facilities	7,372,999		1.27	%	4,329,641		0.76	%
Electrical Components & Equipment	7,214,132		1.24	%	7,225,215		1.27	%
Oil & Gas Refining & Marketing	6,196,176		1.07	%	7,671,686		1.35	%
IT Consulting & Other Services	5,626,217		0.97	%	5,644,359		0.99	%
Real Estate Operating Companies	5,468,655		0.94	%	6,983,385		1.23	%
Specialized Finance	5,139,651		0.88	%	4,499,017		0.79	%
Education Services	4,909,797		0.85	%	—		—	%
Home Furnishings	4,726,358		0.81	%	4,723,943		0.83	%
Environmental & Facilities Services	4,699,056		0.81	%	—		—	%
Diversified Support Services	4,526,305		0.78	%	4,469,808		0.79	%
Health Care Equipment	4,436,601		0.76	%	4,351,936		0.77	%
Communications Equipment	4,327,785		0.74	%	4,698,738		0.83	%
Restaurants	3,353,116		0.58	%	3,347,525		0.59	%
Paper Packaging	3,249,692		0.56	%	—		—	%
Hotels, Resorts & Cruise Lines	3,224,184		0.55	%	—		—	%
Leisure Products	2,467,600		0.42	%	8,083,405		1.42	%
Consumer Finance	2,244,785		0.39	%	—		—	%
Air Freight & Logistics	2,074,897		0.36	%	—		—	%
Research & Consulting Services	1,681,765		0.29	%	2,362,030		0.42	%
Food Distributors	1,491,941		0.26	%	1,486,303		0.26	%
Diversified Banks	1,129,465		0.19	%	1,129,465		0.20	%
Housewares & Specialties	1,089,554		0.19	%	645,632		0.11	%
Alternative Carriers	1,068,681		0.18	%	964,264		0.17	%
Construction Materials	833,056		0.14	%	809,832		0.14	%
Specialty Chemicals	716,095		0.12	%	716,095		0.13	%
Advertising	218,089		0.04	%	—		—	%
Independent Power Producers & Energy Traders	—		—	%	7,574,559		1.33	%
Airlines	—		—	%	4,169,586		0.73	%

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	June 30, 2022				September 30, 2021
Cost:			% of Total Investments				% of Total Investments
Managed Health Care	$	—	—	%	$	3,918,152	0.69	%
Interactive Media & Services	—		—	%	3,876,279		0.68	%
Thrifts & Mortgage Finance	—		—	%	3,748,666		0.66	%
Forest Products	—		—	%	1,939,746		0.34	%
Electric Utilities	—		—	%	1,641,216		0.29	%
Electronic Components	—		—	%	1,375,156		0.24	%
Food Retail	—		—	%	249,637		0.04	%
Total	$	580,967,818	100.00	%	$	568,303,425	100.00	%


	June 30, 2022						September 30, 2021
Fair Value:			% of Total Investments		% of Net Assets				% of Total Investments		% of Net Assets
Application Software	$	111,466,001	19.67	%	34.25	%	$	105,949,514	18.42	%	30.58	%
Pharmaceuticals	29,788,147		5.26	%	9.16	%	34,958,925		6.08	%	10.09	%
Biotechnology	23,038,161		4.07	%	7.08	%	32,486,832		5.65	%	9.38	%
Construction & Engineering	21,238,442		3.75	%	6.53	%	20,902,686		3.63	%	6.03	%
Industrial Machinery	20,415,971		3.60	%	6.28	%	20,988,046		3.65	%	6.06	%
Aerospace & Defense	17,848,225		3.15	%	5.49	%	16,188,169		2.81	%	4.67	%
Fertilizers & Agricultural Chemicals	17,693,330		3.12	%	5.44	%	18,311,828		3.18	%	5.28	%
Internet & Direct Marketing Retail	17,603,064		3.11	%	5.41	%	17,697,267		3.08	%	5.11	%
Health Care Technology	17,413,937		3.07	%	5.35	%	5,649,515		0.98	%	1.63	%
Personal Products	16,211,459		2.86	%	4.98	%	29,379,063		5.11	%	8.48	%
Data Processing & Outsourced Services	15,434,305		2.72	%	4.74	%	15,774,549		2.74	%	4.55	%
Health Care Supplies	13,853,910		2.44	%	4.26	%	8,168,802		1.42	%	2.36	%
Automotive Retail	13,289,562		2.35	%	4.09	%	10,657,160		1.85	%	3.08	%
Internet Services & Infrastructure	13,245,650		2.34	%	4.07	%	12,211,475		2.12	%	3.52	%
Insurance Brokers	13,229,472		2.33	%	4.07	%	14,797,626		2.57	%	4.27	%
Health Care Services	11,770,676		2.08	%	3.62	%	15,732,690		2.73	%	4.54	%
Home Improvement Retail	11,232,511		1.98	%	3.45	%	11,374,695		1.98	%	3.28	%
Health Care Distributors	11,117,134		1.96	%	3.42	%	4,816,700		0.84	%	1.39	%
Airport Services	10,286,579		1.82	%	3.16	%	10,086,433		1.75	%	2.91	%
Integrated Telecommunication Services	9,343,717		1.65	%	2.87	%	10,928,339		1.90	%	3.15	%
Distributors	9,324,189		1.65	%	2.87	%	—		—	%	—	%
Metal & Glass Containers	9,019,210		1.59	%	2.77	%	5,564,989		0.97	%	1.61	%
Real Estate Services	8,511,750		1.50	%	2.62	%	8,753,513		1.52	%	2.53	%
Soft Drinks	8,200,366		1.45	%	2.52	%	8,077,585		1.40	%	2.33	%
Cable & Satellite	8,076,085		1.43	%	2.48	%	9,015,930		1.57	%	2.60	%
Movies & Entertainment	7,821,765		1.38	%	2.40	%	7,871,723		1.37	%	2.27	%
Leisure Facilities	7,347,568		1.30	%	2.26	%	4,430,889		0.77	%	1.28	%
Oil & Gas Storage & Transportation	7,143,683		1.26	%	2.20	%	8,771,281		1.52	%	2.53	%
Electrical Components & Equipment	7,011,752		1.24	%	2.16	%	7,227,759		1.26	%	2.09	%
Other Diversified Financial Services	6,931,043		1.22	%	2.13	%	6,415,445		1.11	%	1.85	%
Oil & Gas Refining & Marketing	6,222,384		1.10	%	1.91	%	7,777,211		1.35	%	2.24	%
Real Estate Operating Companies	5,589,334		0.99	%	1.72	%	7,120,371		1.24	%	2.05	%
IT Consulting & Other Services	4,940,733		0.87	%	1.52	%	5,772,258		1.00	%	1.67	%
Specialized Finance	4,663,457		0.82	%	1.43	%	4,578,283		0.80	%	1.32	%
Education Services	4,637,838		0.82	%	1.43	%	—		—	%	—	%
Environmental & Facilities Services	4,610,621		0.81	%	1.42	%	—		—	%	—	%
Home Furnishings	4,546,320		0.80	%	1.40	%	4,771,890		0.83	%	1.38	%
Diversified Support Services	4,486,003		0.79	%	1.38	%	4,449,622		0.77	%	1.28	%
Health Care Equipment	4,376,122		0.77	%	1.35	%	4,368,523		0.76	%	1.26	%
Communications Equipment	4,286,802		0.76	%	1.32	%	4,784,763		0.83	%	1.38	%
Paper Packaging	3,228,599		0.57	%	0.99	%	—		—	%	—	%
Hotels, Resorts & Cruise Lines	3,223,713		0.57	%	0.99	%	—		—	%	—	%
Restaurants	3,185,626		0.56	%	0.98	%	3,396,250		0.59	%	0.98	%
Consumer Finance	2,219,360		0.39	%	0.68	%	—		—	%	—	%
Leisure Products	2,126,813		0.38	%	0.65	%	8,091,483		1.41	%	2.34	%
Air Freight & Logistics	2,000,985		0.35	%	0.62	%	—		—	%	—	%

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	June 30, 2022						September 30, 2021
Fair Value:			% of Total Investments		% of Net Assets				% of Total Investments		% of Net Assets
Research & Consulting Services	$	1,536,638	0.27	%	0.47	%	$	2,442,962	0.42	%	0.71	%
Housewares & Specialties	1,156,522		0.20	%	0.36	%	689,765		0.12	%	0.20	%
Food Distributors	1,137,408		0.20	%	0.35	%	1,501,725		0.26	%	0.43	%
Diversified Banks	1,063,558		0.19	%	0.33	%	1,144,401		0.20	%	0.33	%
Alternative Carriers	1,022,496		0.18	%	0.31	%	1,001,020		0.17	%	0.29	%
Specialty Chemicals	648,848		0.11	%	0.20	%	732,453		0.13	%	0.21	%
Construction Materials	646,065		0.11	%	0.20	%	847,865		0.15	%	0.24	%
Advertising	211,744		0.04	%	0.07	%	—		—	%	—	%
Independent Power Producers & Energy Traders	—		—	%	—	%	7,554,375		1.31	%	2.18	%
Airlines	—		—	%	—	%	4,238,488		0.74	%	1.22	%
Interactive Media & Services	—		—	%	—	%	4,033,053		0.70	%	1.16	%
Managed Health Care	—		—	%	—	%	3,925,150		0.68	%	1.13	%
Thrifts & Mortgage Finance	—		—	%	—	%	3,830,807		0.67	%	1.11	%
Forest Products	—		—	%	—	%	1,964,238		0.34	%	0.57	%
Electric Utilities	—		—	%	—	%	1,578,793		0.27	%	0.46	%
Electronic Components	—		—	%	—	%	1,394,255		0.24	%	0.40	%
Food Retail	—		—	%	—	%	250,000		0.04	%	0.07	%
Total	$	566,675,653	100.00	%	174.21	%	$	575,429,432	100.00	%	166.06	%

Fair Value Measurements

The following table presents the financial instruments carried at fair value as of June 30, 2022 on the Company's Consolidated Statements of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:


	Level 1		Level 2		Level 3		Total
Senior secured debt	$	—	$	104,146,874	$	446,871,538	$	551,018,412
Subordinated debt	—		325,234		975,527		1,300,761
Common equity & warrants	684,338		—		2,156,690		2,841,028
Preferred equity	—		—		11,515,452		11,515,452
Total investments at fair value	$	684,338	$	104,472,108	$	461,519,207	$	566,675,653
Derivative asset	—		352,041		—		352,041
Total assets at fair value	$	684,338	$	104,824,149	$	461,519,207	$	567,027,694

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the financial instruments carried at fair value as of September 30, 2021 on the Company's Consolidated Statements of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:


	Level 1		Level 2		Level 3		Total
Senior secured debt	$	—	$	117,763,997	$	442,162,872	$	559,926,869
Subordinated debt	—		—		3,888,632		3,888,632
Common equity & warrants	122,080		—		2,906,215		3,028,295
Preferred equity	—		—		8,585,636		8,585,636
Total investments at fair value	$	122,080	$	117,763,997	$	457,543,355	$	575,429,432
Derivative asset	—		618,004		—		618,004
Total assets at fair value	$	122,080	$	118,382,001	$	457,543,355	$	576,047,436

When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the fact that the unobservable factors are significant to the overall fair value measurement. However, Level 3 financial instruments typically have both unobservable or Level 3 components and observable components (i.e. components that are actively quoted and can be validated by external sources). Accordingly, the appreciation (depreciation) in the tables below includes changes in fair value due in part to observable factors that are part of the valuation methodology.

The principal value of the Company's credit facilities payable approximates fair value due to its variable rates and is included in Level 3 of the hierarchy. The principal value of the secured borrowings approximates fair value due to its short-term nature and is included in Level 3 of the hierarchy.

The following table provides a roll-forward of the changes in fair value from March 31, 2022 to June 30, 2022, for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Senior Secured Debt		Subordinated Debt		Preferred Equity		Common Equity & Warrants		Total
Fair value as of March 31, 2022	$	465,010,868	$	992,043	$	12,141,461	$	3,472,525	$	481,616,897
Purchases	9,542,236		7,197		—		29,278		9,578,711
Sales and repayments	(27,262,439)		(30,145)		—		(5,486)		(27,298,070)
Transfers in (a)	5,069,253		—		—		—		5,069,253
Transfer out (b)	—		—		—		(788,800)		(788,800)
Capitalized PIK interest income	1,208,975		—		—		—		1,208,975
Accretion of OID	871,669		1,278		—		—		872,947
Net unrealized appreciation (depreciation)	(7,566,467)		5,154		(626,009)		(550,827)		(8,738,149)
Net realized gains (losses)	(2,557)		—		—		—		(2,557)
Fair value as of June 30, 2022	$	446,871,538	$	975,527	$	11,515,452	$	2,156,690	$	461,519,207
Net unrealized appreciation (depreciation) relating to Level 3 assets still held at June 30, 2022 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended June 30, 2022	$	(7,563,889)	$	5,154	$	(626,009)	$	(556,990)	$	(8,741,734)

__________

(a) There were transfers into Level 3 from Level 2 for certain investments during the three months ended June 30, 2022 as a result of a change in the number of market quotes available and/or a change in market liquidity.

(b) This transfer out was the result of a transaction in which Level 3 common equity was exchanged for Level 1 common equity.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a roll-forward in the changes in fair value from March 31, 2021 to June 30, 2021, for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Senior Secured Debt		Subordinated Debt		Preferred Equity		Common Equity & Warrants		Total
Fair value as of March 31, 2021	$	368,029,913	$	2,193,933	$	5,633,293	$	1,334,827	$	377,191,966
Purchases	45,226,385		52,078		—		—		45,278,463
Sales and repayments	(19,473,795)		(1,033,584)		—		—		(20,507,379)
Transfers in (a)	—		—		—		854,309		854,309
Transfers out (a)(b)	(5,862,799)		—		—		—		(5,862,799)
Capitalized PIK interest income	939,198		—		—		—		939,198
Accretion of OID	1,132,866		3,682		—		—		1,136,548
Net unrealized appreciation (depreciation)	112,219		(133,759)		153,110		(5,224)		126,346
Net realized gains (losses)	24,363		169,214		—		—		193,577
Fair value as of June 30, 2021	$	390,128,350	$	1,251,564	$	5,786,403	$	2,183,912	$	399,350,229
Net unrealized appreciation (depreciation) relating to Level 3 assets still held at June 30, 2021 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the three months ended June 30, 2021	$	1,830,135	$	14,899	$	153,110	$	(5,224)	$	1,992,920

__________

(a) There was one transfer from senior secured debt to common equity and warrants during the three months ended June 30, 2021 as a result of an investment restructuring, in which $0.9 million of senior secured debt was exchanged for $0.9 million of common equity.

(b) There were transfers from Level 3 to Level 2 for certain investments during the three months ended June 30, 2021 as a result of a change in the number of market quotes available and/or a change in market liquidity.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a roll-forward of the changes in fair value from September 30, 2021 to June 30, 2022, for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Senior Secured Debt		Subordinated Debt		Preferred Equity		Common Equity & Warrants		Total
Fair value as of September 30, 2021	$	442,162,872	$	3,888,632	$	8,585,636	$	2,906,215	$	457,543,355
Purchases	97,249,956		715,863		3,083,857		522,737		101,572,413
Sales and repayments	(93,001,094)		(3,797,682)		—		(192,059)		(96,990,835)
Transfers in (a)	8,404,983		—		—		—		8,404,983
Transfers out (a)(b)	(3,851,936)		—		—		(788,800)		(4,640,736)
Capitalized PIK interest income	3,349,052		56,759		—		—		3,405,811
Accretion of OID	3,443,496		84,555		—		—		3,528,051
Net unrealized appreciation (depreciation)	(11,159,942)		27,400		(154,041)		(297,792)		(11,584,375)
Net realized gains (losses)	274,151		—		—		6,389		280,540
Fair value as of June 30, 2022	$	446,871,538	$	975,527	$	11,515,452	$	2,156,690	$	461,519,207
Net unrealized appreciation (depreciation) relating to Level 3 assets still held at June 30, 2022 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the nine months ended June 30, 2022	$	(10,158,136)	$	476	$	(154,041)	$	(297,792)	$	(10,609,493)

__________

(a) There were transfers into/out of Level 3 from/to Level 2 for certain investments during the nine months ended June 30, 2022 as a result of a change in the number of market quotes available and/or a change in market liquidity.

(b) One transfer out was the result of a transaction in which Level 3 common equity was exchanged for Level 1 common equity.

The following table provides a roll-forward of the changes in fair value from September 30, 2020 to June 30, 2021, for all investments for which the Company determined fair value using unobservable (Level 3) factors:


	Senior Secured Debt		Subordinated Debt		Preferred Equity		Common Equity & Warrants		Total
Fair value as of September 30, 2020	$	205,373,831	$	10,164,710	$	118,004	$	1,826,297	$	217,482,842
Purchases	216,199,923		1,498,294		5,137,996		147,268		222,983,481
Sales and repayments	(36,942,230)		(11,142,309)		—		—		(48,084,539)
Transfers in (a)	—		—		—		854,309		854,309
Transfers out (a)(b)	(3,417,436)		—		—		—		(3,417,436)
Capitalized PIK interest income	2,706,557		—		—		—		2,706,557
Accretion of OID	2,014,710		161,502		—		—		2,176,212
Net unrealized appreciation (depreciation)	4,154,794		(728,570)		530,403		(643,962)		3,312,665
Net realized gains (losses)	38,201		1,297,937		—		—		1,336,138
Fair value as of June 30, 2021	$	390,128,350	$	1,251,564	$	5,786,403	$	2,183,912	$	399,350,229
Net unrealized appreciation (depreciation) relating to Level 3 assets still held at June 30, 2021 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the nine months ended June 30, 2021	$	6,585,451	$	12,563	$	530,403	$	(284,762)	$	6,843,655

__________

(a) There was one transfer from senior secured debt to common equity and warrants during the nine months ended June 30, 2021 as a result of an investment restructuring, in which $0.9 million of senior secured debt was exchanged for $0.9 million of common equity.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(b) There were transfers out of Level 3 to Level 2 for certain investments during the nine months ended June 30, 2021 as a result of a change in the number of market quotes available and/or a change in market liquidity.

Significant Unobservable Inputs for Level 3 Investments

The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which were carried at fair value as of June 30, 2022:

Asset

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted
Average (a)

Senior secured debt

366,463,230

Market Yield

(b)

7.0%

25.0%

12.7%

77,184,595

Broker Quotations

Broker Quoted Price

(c)

N/A

3,223,713

Transaction Precedent

Transaction Price

(e)

N/A

Subordinated debt

975,527

Market Yield

(b)

16.0%

18.0%

17.0%

Common equity & warrants & preferred equity

28,188

Transaction Precedent

Transaction Price

(e)

N/A

8,764,367

Enterprise Value

Revenue Multiple

(d)

0.9x

8.4x

8.0x

4,879,587

Enterprise Value

EBITDA Multiple

(d)

4.8x

17.7x

13.3x

Total

461,519,207

_____________________

(a) Weighted averages are calculated based on fair value of investments.

(b) Used when market participant would take into account market yield when pricing the investment.

(c) The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. The Company evaluates the quotations provided by pricing vendors and brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. Each quoted price is evaluated by the Audit Committee of the Company's Board of Directors in conjunction with additional information compiled by the Adviser.

(d) Used when market participant would use such multiple when pricing the investment.

(e) Used when there is an observable transaction or pending event for the investment.

The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which were carried at fair value as of September 30, 2021:

Asset

Fair Value

Valuation Technique

Unobservable Input

Range

Weighted
Average (a)

Senior secured debt

337,518,859

Market Yield

(b)

4.0%

30.0%

10.3%

104,644,013

Broker Quotations

Broker Quoted Price

(c)

N/A

Subordinated debt

3,888,632

Market Yield

(b)

12.0%

14.0%

12.6%

Common equity & warrants & preferred equity

915,261

Enterprise Value

Revenue Multiple

(d)

1.0x

11.2x

2.5x

9,722,281

Enterprise Value

EBITDA multiple

(d)

6.0x

35.0x

30.5x

854,309

Transactions Precedent

Transaction price

(e)

N/A

Total

457,543,355

_____________________

(a) Weighted averages are calculated based on fair value of investments.

(b) Used when market participant would take into account market yield when pricing the investment.

(d) Used when market participant would use such multiple when pricing the investment.

(e) Used when there is an observable transaction or pending event for the investment.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the market yield technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt securities is the market yield. Increases or decreases in the market yield may result in a lower or higher fair value measurement, respectively.

Under the enterprise value technique, the significant unobservable input used in the fair value measurement of the Company's investments is the EBITDA, revenue or asset multiple, as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively.

Note 4. Fee Income

For the three and nine months ended June 30, 2022, the Company recorded total fee income of $558,320 and $1,271,325, respectively, of which $58,523 and $166,557, respectively, was recurring in nature. For the three and nine months ended June 30, 2021, the Company recorded total fee income of $1,927,862 and $4,031,867, respectively, of which $11,290 and $25,573, respectively, was recurring in nature. Recurring fee income primarily consisted of servicing fees and exit fees.

Note 5. Share Data and Distributions

Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share, pursuant to FASB ASC Topic 260-10, Earnings per Share, for the three and nine months ended June 30, 2022 and 2021:


	Three months ended June 30, 2022		Three months ended June 30, 2021		Nine months ended June 30, 2022		Nine months ended June 30, 2021
Earnings (loss) per common share — basic and diluted:
Net increase (decrease) in net assets resulting from operations	$	(5,226,508)	$	9,006,135	$	7,836,203	$	29,173,724
Weighted average common shares outstanding	17,401,121		17,401,121		17,401,121		17,401,121
Earnings (loss) per common share — basic and diluted	$	(0.30)	$	0.52	$	0.45	$	1.68

Changes in Net Assets

The following table presents the changes in net assets for the three and nine months ended June 30, 2022:


	Common Stock
	Shares	Par Value		Additional Paid-in-Capital		Accumulated Distributable Earnings (Loss)		Total Net Assets
Balance at September 30, 2021	17,401,121	$	17,401	$	337,337,998	$	9,147,810	$	346,503,209
Net investment income	—	—		—		7,550,335		7,550,335
Net unrealized appreciation (depreciation)	—	—		—		(238,721)		(238,721)
Net realized gains (losses)	—	—		—		1,072,998		1,072,998
Provision for income tax (expense) benefit	—	—		—		13,414		13,414
Distributions to stockholders	—	—		—		(13,920,896)		(13,920,896)
Balance at December 31, 2021	17,401,121	$	17,401	$	337,337,998	$	3,624,940	$	340,980,339
Net investment income	—	—		—		9,017,519		9,017,519
Net unrealized appreciation (depreciation)	—	—		—		(4,790,853)		(4,790,853)
Net realized gains (losses)	—	—		—		439,361		439,361
Provision for income tax (expense) benefit	—	—		—		(1,342)		(1,342)
Distributions to stockholders	—	—		—		(7,482,481)		(7,482,481)
Balance at March 31, 2022	17,401,121	$	17,401	$	337,337,998	$	807,144	$	338,162,543
Net investment income	—	—		—		8,687,813		8,687,813
Net unrealized appreciation (depreciation)	—	—		—		(16,688,591)		(16,688,591)
Net realized gains (losses)	—	—		—		2,730,439		2,730,439
Provision for income tax (expense) benefit	—	—		—		43,831		43,831
Distributions to stockholders	—	—		—		(7,656,494)		(7,656,494)
Balance at June 30, 2022	17,401,121	$	17,401	$	337,337,998	$	(12,075,858)	$	325,279,541

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in net assets for the three and nine months ended June 30, 2021:


	Common Stock
	Shares	Par Value		Additional Paid-in-Capital		Accumulated Distributable Earnings (Loss)		Total Net Assets
Balance at September 30, 2020	17,401,121	$	17,401	$	337,337,998	$	9,646,368	$	347,001,767
Net investment income	—	—		—		5,139,882		5,139,882
Net unrealized appreciation (depreciation)	—	—		—		5,185,354		5,185,354
Net realized gains (losses)	—	—		—		384,604		384,604
Provision for income tax (expense) benefit	—	—		—		(8,017)		(8,017)
Distributions to stockholders	—	—		—		(16,879,089)		(16,879,089)
Balance at December 31, 2020	17,401,121	$	17,401	$	337,337,998	$	3,469,102	$	340,824,501
Net investment income	—	—		—		5,923,604		5,923,604
Net unrealized appreciation (depreciation)	—	—		—		2,806,298		2,806,298
Net realized gains (losses)	—	—		—		741,081		741,081
Provision for income tax (expense) benefit	—	—		—		(5,217)		(5,217)
Distributions to stockholders	—	—		—		(6,090,393)		(6,090,393)
Balance at March 31, 2021	17,401,121	$	17,401	$	337,337,998	$	6,844,475	$	344,199,874
Net investment income	—	—		—		8,512,379		8,512,379
Net unrealized appreciation (depreciation)	—	—		—		(98,033)		(98,033)
Net realized gains (losses)	—	—		—		695,814		695,814
Provision for income tax (expense) benefit	—	—		—		(104,025)		(104,025)
Distributions to stockholders	—	—		—		(6,960,449)		(6,960,449)
Balance at June 30, 2021	17,401,121	$	17,401	$	337,337,998	$	8,890,161	$	346,245,560

Capital Activity

As of June 30, 2022 and September 30, 2021, the Company completed drawdowns of $337,558,996, or 100%, of Capital Commitments from investors in connection with Private Offerings, of which $3,854,346 in Capital Commitments were made by one or more affiliates of the Adviser.

The Company has the authority to issue 250,000,000 shares of Common Stock, $0.001 per share par value and 100,000,000 shares of preferred stock, $0.001 per share par value. The following table summarizes total shares issued and proceeds related to capital drawdowns delivered pursuant to the Subscription Agreements for the Company’s Common Stock through June 30, 2022:


	Shares Issued	Price per Share		Proceeds
August 6, 2018 (1)	770,869	$	20.00	$	15,417,385
September 17, 2018	770,869	20.00		15,417,384
October 29, 2018	1,060,964	19.85		21,060,130
November 15, 2018	789,198	19.82		15,641,900
April 29, 2019	1,655,314	20.40		33,768,400
August 30, 2019	1,631,324	20.70		33,768,400
September 23, 2019	1,631,323	20.70		33,768,399
March 26, 2020 (2)	3,263,385	20.68		67,486,799
April 30, 2020 (2)	5,827,875	17.37		101,230,199
Total	17,401,121			$	337,558,996

__________________

(1)Includes 50 shares issued to one or more affiliates of the Adviser on July 23, 2018.

(2)For the March 26, 2020 and April 30, 2020 drawdowns, the shares issued exclude 2,418 shares and 4,318 shares, respectively, related to defaulted investors. In connection with these defaults, Capital Commitments and proceeds from capital drawdowns were each reduced by $125,000.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Distributions

Distributions to common stockholders are recorded on the ex-dividend date. The Company is required to distribute dividends each tax year to its stockholders of an amount generally at least equal to 90% of its investment company taxable income, determined without regard to any deduction for dividends paid, in order to be eligible for tax benefits allowed to a RIC under Subchapter M of the Code. The Company anticipates paying out as a distribution all or substantially all of those amounts. The amount to be paid out as a dividend is determined by the board of directors and is based on management’s estimate of the Company’s annual taxable income. Net realized capital gains, if any, may be distributed to stockholders or retained for reinvestment.

The following table reflects the distributions per share that the Company has paid on its common stock during the nine months ended June 30, 2022:


Distribution Type	Record Date	Payment Date	Amount per Share		Cash Distribution
Quarterly	December 15, 2021	December 28, 2021	$	0.42	$	7,308,472
Special	December 15, 2021	December 28, 2021	0.38		6,612,424
Quarterly	March 15, 2022	March 28, 2022	0.43		7,482,481
Quarterly	June 15, 2022	June 30, 2022	0.44		7,656,494
			$	1.67	$	29,059,871

The following table reflects the distributions per share that the Company has paid on its common stock during the nine months ended June 30, 2021:


Distribution Type	Record Date	Payment Date	Amount per Share		Cash Distribution
Quarterly	December 15, 2020	December 31, 2020	$	0.35	$	6,090,393
Special	December 15, 2020	December 31, 2020	0.62		10,788,696
Quarterly	March 15, 2021	March 26, 2021	0.35		6,090,393
Quarterly	June 15, 2021	June 30, 2021	0.40		6,960,449
			$	1.72	$	29,929,931

Note 6. Borrowings

CNB-2 Facility

On June 9, 2020 (the “CNB-2 Closing Date”), the Company entered into a loan and security agreement, which was subsequently amended on March 31, 2021 (as amended, the “CNB-2 Loan Agreement”) between the Company, as borrower, and CNB, as lender. The CNB-2 Loan Agreement provides for a senior secured revolving credit facility (the “CNB-2 Facility”) of up to $60 million (the “CNB-2 Facility Maximum Commitment”) in aggregate principal amount, subject to the lesser of (i) the borrowing base, which is an amount determined by applying different rates to eligible assets held by the Company based generally on the value of such assets and (ii) the CNB-2 Facility Maximum Commitment. The maturity date of the CNB-2 Facility is June 9, 2023.

Borrowings under the CNB-2 Facility bear interest at a rate equal to LIBOR for the selected period (subject to a floor of 0.25%) plus 2.50%. There is a non-usage fee of 50 basis points per year on the unused portion of the CNB-2 Facility, payable annually, if on any anniversary of the CNB-2 Closing Date, the average daily utilization of the CNB-2 Facility is less than $25 million over the prior 365-day period.

The CNB-2 Facility is secured by a first priority security interest in substantially all of the Company’s assets, including its portfolio investments but excluding those investments held in OSI 2 SPV (as defined below). The Company has made customary representations and warranties and is required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities. The borrowings of the Company, including under the CNB-2 Facility, are subject to the leverage restrictions contained in the Investment Company Act.

As of June 30, 2022 and September 30, 2021, the Company had $33.0 million and $51.0 million, respectively, outstanding under the CNB-2 Facility. For the nine months ended June 30, 2022 and 2021, the Company’s borrowings under the CNB-2 Facility bore interest at a weighted average interest rate of 2.88% and 3.05%, respectively. For the three and nine

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

months ended June 30, 2022, the Company recorded interest expense (inclusive of fees) of $293,381 and $967,745, respectively, related to the CNB-2 Facility. For the three and nine months ended June 30, 2021, the Company recorded interest expense (inclusive of fees) of $412,780 and $951,038, respectively, related to the CNB-2 Facility.

Citibank Facility

On July 26, 2019 (the “Citibank Closing Date”), the Company and OSI 2 Senior Lending SPV, LLC ("OSI 2 SPV"), a wholly-owned and consolidated subsidiary of the Company, entered into a loan and security agreement, which was subsequently amended on September 20, 2019, July 2, 2020, December 31, 2020 and March 31, 2021 (as amended, the “Citibank Loan Agreement”) with the lenders from time to time party thereto and the other parties referenced below. Under the terms of the Citibank Loan Agreement, the Company serves as the collateral manager and seller and OSI 2 SPV serves as borrower with Citibank, N.A., as administrative agent, and Deutsche Bank Trust Company Americas, as collateral agent.

The Citibank Loan Agreement provides for a senior secured revolving credit facility (the “Citibank Facility”) of up to $250 million (the “Citibank Maximum Commitment”) in aggregate principal amount, subject to the lesser of (i) the borrowing base, which is an amount based on advance rates that vary depending on the class of assets and the value assigned to such assets under the Citibank Loan Agreement and (ii) the Citibank Maximum Commitment. The Citibank Facility has a forty-two (42) month reinvestment period (the “Reinvestment Period”) during which advances may be made and matures sixty-six (66) months from the Citibank Closing Date. Following the Reinvestment Period, OSI 2 SPV will be required to make certain mandatory amortization payments. Borrowings under the Citibank Facility bear interest payable quarterly at a rate per year equal to (a) in the case of a lender that is identified as a conduit lender under the Citibank Loan Agreement, the lesser of (i) the applicable commercial paper rate for such conduit lender and (ii) the LIBOR for a three month maturity and (b) for all other lenders under the Citibank Facility, LIBOR, plus, in each case, an applicable spread. During the Reinvestment Period, the applicable spread is the greater of (i) a weighted average rate of (x) 1.65% per year for broadly syndicated loans and (y) 2.25% per year for all other eligible loans and (ii) 1.85%. After the Reinvestment Period, the applicable spread is 3.00% per year. There is also a non-usage fee of (i) 0.40% per year for the first six months following the Citibank Closing Date (the “Ramp-Up Period”) and (ii) 0.50% per year thereafter, in each case, on the unused portion of the Citibank Facility, payable quarterly; provided that if after the Ramp-Up Period the unused portion of the Citibank Facility is greater than 30% of the commitments under the Citibank Facility, the non-usage fee will be based on an unused portion of 30% of the commitments under the Citibank Facility.

The Citibank Facility is secured by a first priority security interest in substantially all of OSI 2 SPV’s assets.

As part of the Citibank Facility, OSI 2 SPV is subject to certain limitations as to how borrowed funds may be used and the types of loans that are eligible to be acquired by OSI 2 SPV including, but not limited to, restrictions on sector concentrations, loan size, tenor and minimum investment ratings (or estimated ratings). The Citibank Facility also contains certain requirements relating to interest coverage, collateral quality and portfolio performance, certain violations of which could result in the acceleration of the amounts due under the Citibank Facility.

Under the Citibank Facility, the Company and OSI 2 SPV, as applicable, have made customary representations and warranties, and are required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities.

OSI 2 SPV’s borrowings are non-recourse to the Company but are considered borrowings of the Company for purposes of complying with the asset coverage requirements under the Investment Company Act.

As of June 30, 2022 and September 30, 2021, the Company had $231.0 million and $200.0 million, respectively, outstanding under the Citibank Facility. The Company’s borrowings under the Citibank Facility bore interest at a weighted average interest rate of 2.69% and 2.36% for the nine months ended June 30, 2022 and 2021, respectively. For the three and nine months ended June 30, 2022, the Company recorded interest expense (inclusive of fees) of $2,063,349 and $4,992,882, respectively, related to the Citibank Facility. For the three and nine months ended June 30, 2021, the Company recorded interest expense (inclusive of fees) of $1,154,709 and $2,794,358, respectively, related to the Citibank Facility.

Secured Borrowings

As of June 30, 2022, the Company had $5.8 million of secured borrowings outstanding, which were recorded as a result of certain securities that were sold and simultaneously repurchased at a premium, with amounts payable to the counterparty due on the repurchase settlement date, which is generally within 120 days of the trade date. The Company's secured borrowings bore interest at a weighted average rate of 3.47% for the nine months ended June 30, 2022. The Company recorded $42,650 and

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$246,222 of interest expense in connection with secured borrowings for the three and nine months ended June 30, 2022, respectively.

Note 7. Taxable/Distributable Income

Taxable income differs from net increase (decrease) in net assets resulting from operations primarily due to: (1) unrealized appreciation (depreciation) on investments and foreign currency, as gains and losses are not included in taxable income until they are realized, (2) organizational and deferred offering costs and (3) the capital gains incentive fee accrual.

Presented below is a reconciliation of net increase (decrease) in net assets resulting from operations to taxable income for the three and nine months ended June 30, 2022 and 2021:


	Three months ended June 30, 2022		Three months ended June 30, 2021		Nine months ended June 30, 2022		Nine months ended June 30, 2021
Net increase (decrease) in net assets resulting from operations	$	(5,226,508)	$	9,006,135	$	7,836,203	$	29,173,724
Net unrealized (appreciation) depreciation	16,688,591		98,033		21,718,165		(7,893,619)
Book/tax differences due to capital gains incentive fee	(1,287,059)		75,540		(1,988,557)		1,655,613
Book/tax difference due to organizational and deferred offering costs	(7,601)		(7,601)		(22,805)		(22,805)
Other book/tax differences	(546,997)		498,154		(1,553,772)		1,527,643





Taxable income (1)	$	9,620,426	$	9,670,261	$	25,989,234	$	24,440,556

__________________

(1)The Company's taxable income for the three and nine months ended June 30, 2022 is an estimate and will not be finally determined until the Company files its tax return for the fiscal year ending September 30, 2022. Therefore, the final taxable income may be different than the estimate.

For the three months ended June 30, 2022, the Company recognized a total provision for income tax benefit of $43,831, which was comprised of a deferred income tax benefit of $43,831 that resulted from unrealized depreciation on an investment held by a wholly-owned taxable subsidiary. For the nine months ended June 30, 2022, the Company recognized a total provision for income tax benefit of $55,903, which was comprised of a deferred income tax benefit of $60,594 that resulted from unrealized depreciation on an investment held by a wholly-owned taxable subsidiary and a current tax expense of $4,691.

For the three months ended June 30, 2021, the Company recognized a total provision for income tax expense of $104,025, which was comprised of a deferred income tax expense of $101,678 that resulted from unrealized appreciation on an investment held by a wholly-owned taxable subsidiary and a current tax expense of $2,347. For the nine months ended June 30, 2021, the Company recognized a total provision for income tax expense of $117,259, which was comprised of a deferred income tax expense of $104,706 that resulted from unrealized appreciation on an investment held by a wholly-owned taxable subsidiary and a current tax expense of $12,553.

As of September 30, 2021, the Company's tax year end, the components of accumulated undistributed income on a tax basis were as follows:


Undistributed ordinary income, net	$	6,474,540
Net realized capital gains	$	—
Unrealized gains, net	$	2,673,270

The aggregate cost of investments for income tax purposes was $573,402,904 as of September 30, 2021. As of September 30, 2021, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over cost for income tax purposes was $28,135,526. As of September 30, 2021, the aggregate gross unrealized depreciation for all investments in which there was an excess of cost for income tax purposes over value was $25,462,256. As of September 30, 2021, net unrealized depreciation based on the aggregate cost of investments for income tax purposes was $2,673,270.

Note 8. Concentration of Credit Risks

The Company deposits its cash with financial institutions and at times such balances may be in excess of the FDIC insurance limit. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring their financial stability.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9. Related Party Transactions

The Company has entered into an Investment Advisory Agreement with the Adviser. Pursuant to the Investment Advisory Agreement, the Company pays the Adviser a fee for investment advisory and management services consisting of two components - the Management Fee and the Incentive Fee (each as defined below).

Management Fee

Prior to (i) the listing of the Company’s Common Stock on a national securities exchange or (ii) an initial public offering of the Company’s Common Stock that results in gross proceeds to the Company of at least $50 million and a listing of the Common Stock on a national securities exchange (each of (i) and (ii), a “Qualified Listing”), if any, the Adviser is entitled to receive quarterly in arrears a management fee (the “Management Fee”) equal to 1.00% per annum (the “Applicable Management Fee Percentage”) of the Company’s Gross Asset Value (as defined below); provided, that prior to a Qualified Listing, the Management Fee does not exceed 1.75% per annum of the Unleveraged Asset Value (as defined below). From and after the date of a Qualified Listing, if any, the Applicable Management Fee Percentage will increase to 1.50% per annum of the Company’s Gross Asset Value.

For purposes of calculating the Management Fee, the Gross Asset Value is determined by the Company’s board of directors (including any committee thereof). Until August 6, 2019, the Management Fee for each quarter was calculated based on the Company’s average Gross Asset Value at the end of each month during such calendar quarter (prior to taking into account any Incentive Fee); provided, that the Management Fee for the Company’s first calendar quarter was calculated based on the Company’s Gross Asset Value at the end of such calendar quarter (prior to taking into account any Incentive Fee). Following August 6, 2019, the Management Fee for each quarter is calculated based on the Company’s average Gross Asset Value at the end of such quarter and at the end of the preceding quarter (in each case, prior to taking into account any Incentive Fee); provided, that the Management Fee for the calendar quarter in which the Company consummates a Qualified Listing will be calculated based on the Company’s Gross Asset Value at the end of such calendar quarter (prior to taking into account any Incentive Fee). For the three and nine months ended June 30, 2022, base management fees were $1,363,619 and $4,289,728, respectively. For the three and nine months ended June 30, 2021, base management fees were $1,398,118 and $3,845,876, respectively.

The term “Gross Asset Value” means the value of the Company’s gross assets, determined on a consolidated basis in accordance with GAAP, including portfolio investments purchased with borrowed funds and other forms of leverage, but excluding cash and cash equivalents.

The term “Unleveraged Asset Value” means the Gross Asset Value less the Company’s borrowings for investment purposes determined on a consolidated basis in accordance with GAAP (other than borrowings under the Company’s investor subscription credit facility that are repaid within 180 days following incurrence).

Incentive Fee

The Incentive Fee consists of two parts: the Investment Income Incentive Fee and the Capital Gains Incentive Fee (each defined below).

Investment Income Incentive Fee

The Investment Income Incentive Fee is calculated and payable quarterly in arrears based on the Company’s Pre-Incentive Fee Net Investment Income, which means consolidated interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the Management Fee, Company expenses and any interest expense or fees on any credit facilities or outstanding debt, but excluding the Incentive Fee). The Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero coupon securities), accrued income that has not yet been received in cash. For the avoidance of doubt, the Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets at the end of the immediately preceding calendar quarter, is compared to a hurdle of 1.50% per quarter (6% annualized) (the “Hurdle Rate”). The Company pays the Adviser an Investment Income Incentive Fee each quarter as follows:

(a)Hurdle Rate Return: No Investment Income Incentive Fee in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the Hurdle Rate;

(b)Catch-Up: 100% of the Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate but is less than a 1.875% (7.5% annualized) rate of return on the value of the Company’s net assets in such calendar quarter (the “Catch-Up”), which is intended to provide the Adviser with 20% of the Pre-Incentive Fee Net Investment Income as if the Hurdle Rate did not apply, if the Pre-Incentive Fee Net Investment Income exceeds the Hurdle Rate in such calendar quarter; and

(c)80/20 Split: 20% of the Pre-Incentive Fee Net Investment Income, if any, that exceeds a 1.875% (7.5% annualized) rate of return on the value of the Company’s net assets in such calendar quarter, so that once the Hurdle Rate is reached and the Catch-Up in (b) immediately above is achieved, 20% of the Pre-Incentive Fee Net Investment Income thereafter is allocated to the Adviser.

The foregoing calculations will be appropriately prorated for any period of less than three months and adjusted for any issuances or repurchases of Common Stock during a quarter. For the three and nine months ended June 30, 2022, Investment Income Incentive Fees were $1,850,189 and $5,816,775, respectively. For the three and nine months ended June 30, 2021, Investment Income Incentive Fees were $2,149,705 and $5,371,468, respectively.

Capital Gains Incentive Fee

In addition to the Investment Income Incentive Fee described above, the Adviser is entitled to receive a Capital Gains Incentive Fee (as defined below). The Capital Gains Incentive Fee is determined and payable in arrears as of the end of each calendar year. The Capital Gains Incentive Fee is equal to 20% of the realized capital gains, if any, on a cumulative basis from the date of the Initial Closing through the end of each calendar year, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid Capital Gains Incentive Fee with respect to each of the investments in the Company’s portfolio, provided, that the Capital Gains Incentive Fee determined as of December 31, 2018 was calculated for a period of shorter than 12 calendar months to take into account any realized capital gains computed net of all realized capital losses and unrealized capital depreciation from the date of the Initial Closing through the end of 2018 (the “Capital Gains Incentive Fee,” and together with the Investment Income Incentive Fee, the “Incentive Fees”). For the calendar year ended December 31, 2021, the Company incurred $1,231,906 of capital gains incentive fees under the Investment Advisory Agreement.

Although the Capital Gains Incentive Fee due to the Adviser is not payable until it is contractually due based on the Investment Advisory Agreement, the Company accrues this component at the end of each reporting period based on the Company’s realized capital gains, if any, on a cumulative basis from the date of the Initial Closing through the end of each reporting period, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid Capital Gains Incentive Fee, as contractually included in the calculation of the Capital Gains Incentive Fee, plus the cumulative amount of unrealized capital appreciation. If such amount is positive at the end of a period, then the Company will accrue an incentive fee equal to 20% of such amount. If such amount is negative, then there will be no accrual for such period or an appropriate reduction in any amount previously accrued. U.S. GAAP requires that the Capital Gains Incentive Fee accrual consider cumulative unrealized capital appreciation in the calculation, as a Capital Gains Incentive Fee would be payable if such unrealized capital appreciation were realized. There can be no assurance that such unrealized capital appreciation will be realized in the future. For the three and nine months ended June 30, 2022, the Company reversed previously accrued Capital Gains Incentive Fees of $1,287,059 and $1,988,557, respectively. For the three and nine months ended June 30, 2021, the Company accrued Capital Gains Incentive Fees of $96,473 and $1,920,041, respectively. As of June 30, 2022, there was no accrued capital gains incentive fee liability. As of September 30, 2021, the total accrued capital gains incentive fee liability was $3,220,463.

As of June 30, 2022 and September 30, 2021, the Company had a liability on its Consolidated Statements of Assets and Liabilities in the amounts of $3,213,805 and $6,433,876, respectively, reflecting the unpaid portion of the Base Management Fee and Incentive Fees payable to the Adviser.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Administration Agreement

The Company entered into an administration agreement (the “Administration Agreement”) with Oaktree Fund Administration, LLC (the “Administrator”), an affiliate of the Adviser. Pursuant to the Administration Agreement, the Administrator furnishes the Company with office facilities (certain of which are located in buildings owned by a Brookfield affiliate), equipment and clerical, bookkeeping and recordkeeping services at such facilities. Under the Administration Agreement, the Administrator also performs, or oversees the performance of, the Company’s required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, operations, technology and investor relations, and being responsible for the financial records that the Company is required to maintain and preparing reports to stockholders and reports filed with the SEC. In addition, the Administrator assists the Company in determining and publishing the net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to the Company’s stockholders, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others.

Payments under the Administration Agreement are equal to an amount that reimburses the Administrator for its costs and expenses incurred in performing its obligations under the Administration Agreement and providing personnel and facilities. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party, by the vote of a majority of the Company’s outstanding voting securities, or by the vote of the Company’s directors or by the Administrator. In addition, our Administrator entered into a sub-administration agreement (the “Sub-Administration Agreement”) with State Street Bank and Trust Company (“State Street”), pursuant to which State Street provides certain administrative and professional services. The Company bears all of the costs and expenses of any sub-administration agreements that the Administrator enters into.

For the avoidance of doubt, the Company bears its allocable portion of the costs of the compensation, benefits, and related administrative expenses (including travel expenses) of the Company’s officers who provide operational and administrative services under the Administration Agreement, their respective staffs and other professionals who provide services to the Company (including, in each case, employees of the Administrator or an affiliate) who assist with the preparation, coordination, and administration of the foregoing or provide other “back office” or “middle office” financial or operational services to the Company. The Company reimburses the Adviser (or its affiliates) for an allocable portion of the compensation paid by the Adviser (or its affiliates) to such individuals (based on a percentage of time such individuals devote, on an estimated basis, to the Company’s business and affairs and to acting on the Company’s behalf). Our board of directors reviews the fees payable under the Administration Agreement to determine that these fees are reasonable and comparable to administrative services charged by unaffiliated third parties.

For the three months ended June 30, 2022, the Company incurred $136,224 of expenses under the Administration Agreement, of which $108,141 was included in administrator expense and the remaining $28,083 was included in general and administrative expenses on the Consolidated Statements of Operations. For the nine months ended June 30, 2022, the Company incurred $427,588 of expenses under the Administration Agreement, of which $342,356 was included in administrator expense and the remaining $85,232 was included in general and administrative expenses on the Consolidated Statements of Operations. For the three months ended June 30, 2021, the Company incurred $127,319 of expenses under the Administration Agreement, of which $105,792 was included in administrator expense and the remaining $21,527 was included in general and administrative expenses on the Consolidated Statements of Operations. For the nine months ended June 30, 2021, the Company incurred $376,393 of expenses under the Administration Agreement, of which $313,934 was included in administrator expense and the remaining $62,459 was included in general and administrative expenses on the Consolidated Statements of Operations. As of June 30, 2022 and September 30, 2021, $576,181 and $1,055,391, respectively, was included in “Due to affiliates” in the Consolidated Statements of Assets and Liabilities, reflecting the unpaid portion of administrative expenses and other reimbursable expenses.

Placement Agent Agreement

The Company has entered into a Placement Agent Agreement with OCM Investments, LLC (the “Placement Agent”), an affiliate of the Adviser, which may require investors (other than investors sourced by the Company, the Adviser, the Placement Agent or their respective affiliates) to pay a distribution fee to the Placement Agent for its services. Although the Company does not pay any fees to the Placement Agent, the Company indemnifies the Placement Agent in connection with its activities.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Financial Highlights


	Three months ended June 30, 2022			Three months ended June 30, 2021			Nine months ended June 30, 2022			Nine months ended June 30, 2021
Net asset value at beginning of period	$	19.43		$	19.78		$	19.91		$	19.94
Net investment income (1)	0.50			0.49			1.45			1.12
Net unrealized appreciation (depreciation) (1)	(0.96)			—			(1.24)			0.47
Net realized gains (losses) (1)	0.16			0.04			0.24			0.10
Provision for income taxes (1)	—			(0.01)			—			(0.01)
Distributions of net investment income to stockholders	(0.44)			(0.40)			(1.43)			(1.32)
Distributions of capital gains to stockholders	—			—			(0.24)			(0.40)
Net asset value at end of period	$	18.69		$	19.90		$	18.69		$	19.90
Total return (2)	(1.63)		%	2.64		%	2.09		%	8.68		%
Common stock outstanding at beginning of period	17,401,121			17,401,121			17,401,121			17,401,121
Common stock outstanding at end of period	17,401,121			17,401,121			17,401,121			17,401,121
Net assets at beginning of period	$	338,162,543		$	344,199,874		$	346,503,209		$	347,001,767
Net assets at end of period	$	325,279,541		$	346,245,560		$	325,279,541		$	346,245,560
Average net assets (3)	$	334,116,941		$	347,605,099		$	341,435,634		$	347,149,075
Ratio of net investment income to average net assets (4)	2.60		%	2.45		%	7.40		%	5.64		%
Ratio of total expenses to average net assets (4)	1.48		%	1.69		%	4.75		%	4.84		%
Ratio of portfolio turnover to average investments at fair value (4)	3.89		%	9.44		%	23.02		%	36.21		%
Weighted average outstanding debt	$	267,730,862		$	221,445,055		$	265,234,933		$	164,304,029
Average debt per share (1)	$	15.39		$	12.73		$	15.24		$	9.44
Asset coverage ratio (5)	220.56		%	262.56		%	220.56		%	262.56		%


(1)			Calculated based upon weighted average shares outstanding for the period.
(2)			Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share or capital activity, if any, divided by the beginning NAV per share, assuming a dividend reinvestment price equal to the NAV per share at the beginning of the period.
(3)			Calculated based upon the weighted average net assets for the period.
(4)			Financial results for the three and nine months ended June 30, 2022 and 2021 have not been annualized for purposes of this ratio.
(5)			Based on outstanding senior securities of $269.8 million and $213.0 million as of June 30, 2022 and 2021, respectively.

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 11. Commitments and Contingencies

Off-Balance Sheet Arrangements

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its portfolio companies. As indicated in the table below, as of June 30, 2022 and September 30, 2021, off-balance sheet arrangements consisted of $29,975,431 and $48,497,448, respectively, of unfunded commitments to provide debt and equity financing to certain of the Company's portfolio companies. Such commitments are subject to the portfolio company's satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Statements of Assets and Liabilities.


	June 30, 2022		September 30, 2021
Athenex, Inc.	$	6,242,124	$	6,242,124
BioXcel Therapeutics, Inc.	3,290,615		—
BAART Programs, Inc.	2,404,578		1,087,000
Innocoll Pharmaceuticals Limited	1,509,774		—
Marinus Pharmaceuticals, Inc.	1,405,400		4,497,280
Accupac, Inc.	1,402,026		913,612
RumbleOn, Inc.	1,165,476		3,939,637
Pluralsight, LLC	1,057,932		1,057,932
Grove Hotel Parcel Owner, LLC	992,930		—
Mesoblast, Inc.	852,520		—
Mindbody, Inc.	761,905		761,905
Thrasio, LLC	666,700		666,700
Dialyze Holdings, LLC	630,750		630,750
OTG Management, LLC	610,476		610,476
PRGX Global, Inc.	609,399		609,399
Liquid Environmental Solutions Corporation	557,926		—
CorEvitas, LLC	557,500		1,181,433
Relativity ODA LLC	543,700		543,700
Assembled Brands Capital LLC	513,526		2,690,942
MRI Software LLC	461,191		693,399
Tahoe Bidco B.V.	420,825		—
Acquia Inc.	412,369		431,113
ASP-R-PAC Acquisition Co LLC	395,957		—
PFNY Holdings, LLC	366,409		—
MHE Intermediate Holdings, LLC	357,143		866,429
LSL Holdco, LLC	307,709		—
Telestream Holdings Corporation	300,600		360,720
Kings Buyer, LLC	289,831		—
Apptio, Inc.	276,923		276,923
Berner Food & Beverage, LLC	269,268		598,373
Digital.AI Software Holdings, Inc.	217,758		236,693
109 Montgomery Owner LLC	124,191		226,821
Coty Inc.	—		6,352,000
Gulf Operating, LLC	—		3,470,000
Latam Airlines Group S.A.	—		1,883,102
Sunland Asphalt & Construction, LLC	—		1,767,564
NeuAG, LLC			1,551,000
SumUp Holdings Luxembourg S.À.R.L.	—		1,406,325
Olaplex, Inc.	—		1,026,000
Thermacell Repellents, Inc.	—		833,333
SIO2 Medical Products, Inc.	—		617,786
The Avery	—		466,977
	$	29,975,431	$	48,497,448

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Derivative Instruments

The Company enters into foreign currency forward contracts from time to time to help mitigate the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies.

In order to better define its contractual rights and to secure rights that will help the Company mitigate its counterparty risk, the Company entered into an International Swaps and Derivatives Association, Inc. Master Agreement ("ISDA Master Agreement") with its derivative counterparty, The Bank of New York Mellon. The ISDA Master Agreement permits a single net payment in the event of a default or similar event. As of June 30, 2022, no cash collateral has been pledged to cover obligations and no cash collateral has been received from the counterparty with respect to the Company's foreign currency forward contracts.

Net unrealized gains or losses on foreign currency forward contracts are included in “net unrealized appreciation (depreciation)” and net realized gains or losses on foreign currency forward contracts are included in “net realized gains (losses)” in the accompanying Consolidated Statements of Operations. Foreign currency forward contracts are considered undesignated derivative instruments.

Certain information related to the Company’s foreign currency forward contracts is presented below as of June 30, 2022.


Description	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Balance Sheet Location of Net Amounts
Foreign currency forward contract	$	13,453,877	€	12,710,431	8/11/2022	$	129,570	$	—	Derivative asset
Foreign currency forward contract	$	15,497,227	£	12,568,533	8/11/2022	$	222,471	$	—	Derivative asset
						$	352,041	$	—

Certain information related to the Company’s foreign currency forward contracts is presented below as of September 30, 2021.


Description	Notional Amount to be Purchased		Notional Amount to be Sold		Maturity Date	Gross Amount of Recognized Assets		Gross Amount of Recognized Liabilities		Balance Sheet Location of Net Amounts
Foreign currency forward contract	$	13,551,234	€	11,534,208	11/12/2021	$	173,075	$	—	Derivative asset
Foreign currency forward contract	$	17,392,336	£	12,568,533	11/12/2021	$	444,929	$	—	Derivative asset
						$	618,004	$	—

OAKTREE STRATEGIC INCOME II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13. Subsequent Events

The Company's management evaluated subsequent events through the date of issuance of the consolidated financial statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in, the consolidated financial statements as of and for the three and nine months ended June 30, 2022, except as discussed below.

Distribution Declaration

On August 5, 2022, the Company's Board of Directors approved a quarterly distribution of $0.44 per share, payable in cash on September 27, 2022 to the Company's stockholders of record as of the close of business on September 15, 2022.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the notes thereto included elsewhere in this quarterly report on Form 10-Q.

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements because they relate to future events or the future performance or financial condition of Oaktree Strategic Income II, Inc. (together with its subsidiaries, where applicable, the "Company", which may also be referred to as "we," "us" or "our"). The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:

•our future operating results and distribution projections;

•the ability of Oaktree Fund Advisors, LLC (our "Adviser" or "Oaktree") to implement its future plans with respect to our business and to achieve our investment objective;

•the ability of Oaktree and its affiliates to attract and retain highly talented professionals;

•our business prospects and the prospects of our portfolio companies;

•the impact of the investments that we expect to make;

•the ability of our portfolio companies to achieve their objectives;

•our expected financings and investments and additional leverage we may seek to incur in the future;

•the adequacy of our cash resources and working capital;

•the timing of cash flows, if any, from the operations of our portfolio companies; and

•the impact of the COVID-19 pandemic and the conflict between Russia and Ukraine on all of the foregoing.

In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2021 and in this quarterly report on Form 10-Q and elsewhere in this quarterly report on Form 10-Q.

Other factors that could cause actual results to differ materially include:

•changes or potential disruptions in our operations, the economy, financial markets or political environment;

•risks associated with possible disruption in our operations, the operations of our portfolio companies or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine), natural disasters or the COVID-19 pandemic;

•future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies ("BDCs") or regulated investment companies ("RICs");

•general considerations associated with the COVID-19 pandemic; and

•other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.

We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Business Overview

We are structured as a closed-end investment company focused on lending to small-and medium-sized companies. We have elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and have elected to be treated, and intend to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).

We were formed on April 30, 2018 as a Delaware corporation and are externally managed by our Adviser pursuant to an investment advisory agreement (the “Investment Advisory Agreement”) between us and our Adviser, which was approved by our board of directors most recently on August 6, 2021. From July 9, 2018 through May 11, 2020, we were managed by Oaktree Capital Management, L.P., an affiliate of our Adviser. We seek to invest opportunistically across asset classes and

geographies, primarily in the form of senior loans, and to a lesser extent, high yield bonds, to borrowers that are in need of direct loans, rescue financings or other capital solutions or that have had challenged or unsuccessful primary offerings. Our investment objective is to generate current income and long-term capital appreciation. We seek to achieve our investment objective without subjecting principal to undue risk of loss by investing primarily in situations where a company or its owners (a) are overleveraged or facing pressures to recapitalize, (b) are unable to access broadly syndicated capital markets, (c) are undervalued after having recently exited bankruptcy or completed a restructuring or (d) are otherwise affected by mispricings or inefficiencies in the capital markets or at different points throughout the credit cycle. We seek to generate revenues primarily in the form of interest income from the investments we hold.

In the current market environment, Oaktree intends to focus primarily on the following areas, in which Oaktree believes there is less competition and thus potential for greater returns, for new investment opportunities: (1) situational lending, which we define to include directly originated loans to non-sponsor companies that are hard to understand and value using traditional underwriting techniques, (2) select sponsor lending, which we define to include financing to support leveraged buyouts of companies with specialized sponsors that have expertise in certain industries, and (3) stressed sector and rescue lending, which we define to include opportunistic private loans in industries experiencing stress or limited access to capital.

We conducted private offerings (each, a “Private Offering”) of shares of our common stock ("Common Stock") to investors in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). At each Closing of a Private Offering, each investor participating in that closing made a capital commitment (each, a “Capital Commitment") to purchase our Common Stock pursuant to a subscription agreement entered into with us in connection with its Capital Commitment (“Subscription Agreement”). Investors were required to fund drawdowns to purchase our Common Stock up to the amount of their respective Capital Commitments on an as-needed basis with a minimum of ten calendar days' prior notice (excluding the initial drawdown for each investor). The initial closing of a Private Offering occurred on August 6, 2018 (the “Initial Closing”). We commenced our loan origination and investment activities shortly after our initial capital drawdown from our non-affiliated investors (the "Initial Drawdown"). The proceeds from the Initial Drawdown provided us with the necessary seed capital to commence operations. As of June 30, 2022, we completed drawdowns of $337,558,996, or 100%, of Capital Commitments from investors in connection with Private Offerings, of which $3,854,346 in Capital Commitments were made by one or more affiliates of the Adviser.

Business Environment and Developments

Global financial markets have experienced an increase in volatility as concerns about the impact of higher inflation, rising interest rates, a potential recession, the current conflict in Ukraine and the ongoing uncertainty related to the COVID-19 pandemic have weighed on market participants. These factors have created disruptions in supply chains and economic activity and have had a particularly adverse impact on certain companies in the energy, raw materials and transportation sectors, among others. These uncertainties can ultimately impact the overall supply and demand of the market through changing spreads, deal terms and structures and equity purchase price multiples.

We are unable to predict the full effects of these macroeconomic events or how long any further market disruptions or volatility might last. We continue to closely monitor the impact these events have on our business, industry and portfolio companies and will provide constructive solutions where necessary.

Against this uncertain macroeconomic backdrop, we believe attractive risk-adjusted returns can be achieved by making loans to middle market companies that typically possess resilient business models with strong underlying fundamentals. Given the breadth of the investment platform and decades of credit investing experience of Oaktree and its affiliates, we believe that we have the resources and experience to source, diligence and structure investments in these companies and are well placed to generate attractive returns for investors.

As of June 30, 2022, 92.3% of our debt investment portfolio (at fair value) and 92.5% of our debt investment portfolio (at cost) bore interest at floating rates. Most of our floating rate loans are indexed to the LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly or monthly at the borrower’s option. Certain loans are also indexed to the Secured Overnight Financing Rate ("SOFR"), a new index calculated by short-term repurchase agreements, backed by Treasury Securities, or the Sterling Overnight Index Average ("SONIA"), an alternative reference rate that is based on transactions. In July 2017, the head of the United Kingdom Financial Conduct Authority (the "FCA") announced the desire to phase out the use of LIBOR by the end of 2021. However, in March 2021 the FCA announced that most U.S. dollar LIBOR would continue to be published through June 30, 2023 effectively extending the LIBOR transition period to June 30, 2023. The FCA no longer compels panel banks to continue to contribute to LIBOR and the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation encouraged banks to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate no later than December 31, 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, supports replacing U.S.-dollar LIBOR with SOFR. Although there have been issuances utilizing SOFR or SONIA,

it is unknown whether these alternative reference rates will attain market acceptance as replacements for LIBOR. In anticipation of the cessation of LIBOR, we may need to renegotiate any credit agreements extending beyond the applicable phase out date with our prospective portfolio companies that utilize LIBOR as a factor in determining the interest rate. Certain of the loan agreements with our portfolio companies have included fallback language in the event that LIBOR becomes unavailable. This language generally provides that the administrative agent may identify a replacement reference rate, typically with the consent of (or prior consultation with) the borrower. In certain cases, the administrative agent will be required to obtain the consent of either a majority of the lenders under the facility, or the consent of each lender, prior to identifying a replacement reference rate. Certain of the loan agreements with our portfolio companies do not include any fallback language providing a mechanism for the parties to negotiate a new reference interest rate and will instead revert to the base rate in the event LIBOR ceases to exist.

Critical Accounting Estimates

Fair Value Measurements

Our board of directors, with the assistance of our audit committee (the “Audit Committee”) and the Adviser, determines the fair value of our assets on at least a quarterly basis, in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement. The Audit Committee is comprised of independent directors. Our investments are valued at fair value. For purposes of periodic reporting, the Company values its assets in accordance with GAAP and based on the principles and methods of valuation summarized below. GAAP requires that a “fair value” be assigned to all assets and establishes a single authoritative definition of fair value that includes a framework for measuring fair value and enhanced disclosures about fair value measurements.

Financial assets and liabilities measured and reported at fair value are classified as follows:

•Level I - Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement. The types of investments in Level I include exchange traded equities, debt and derivatives with quoted prices.

•Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable. Level II inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. The types of investments in Level II generally include corporate bonds and loans, government and agency securities, less liquid and restricted equity investments, over-the-counter traded derivatives and other investments where the fair value is based on observable inputs.

In the absence of observable market prices, we value Level III investments using valuation methodologies applied on a consistent basis. The quarterly valuation process for Level III investments begins with each portfolio company, property or security being initially valued by the Adviser's valuation team in conjunction with the investment team. The preliminary

valuations are then reviewed and approved by the valuation team, the valuation committee, which consists of senior members of the investment team, and designated investment professionals as well as the valuation officer who is independent of the investment teams. The Audit Committee reviews the preliminary valuations provided by the valuation committee and makes a recommendation to our full board of directors regarding the fair value of the investments in our portfolio. Our board of directors ultimately determines in good faith the fair value of each investment in our portfolio. Results of the valuation process are evaluated each quarter, including an assessment of whether the underlying calculations should be adjusted or recalibrated. In connection with this process, we evaluate changes in fair value measurements from period to period for reasonableness, considering items such as industry trends, general economic and market conditions, and factors specific to the investment.

Certain Level III assets are valued using prices obtained from pricing vendors or brokers. These investments are classified as Level III because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustment for investment-specific factors or restrictions. We seek to obtain at least two quotations for the subject or similar securities, typically from pricing vendors. If we are unable to obtain two quotes from pricing vendors, or if the prices obtained from pricing vendors are not within our set threshold, we seek to obtain a quote directly from a broker making a market for the asset. However, given the nature of our portfolio, we do not expect that all of our Level III assets will be valued at least annually using prices obtained from pricing vendors or brokers. Generally, we do not adjust any of the prices received from these sources, and all prices are reviewed by us. We evaluate the prices obtained from pricing vendors or brokers based on available market information, including trading activity of the subject or similar securities, or by performing a comparable security analysis to ensure that fair values are reasonably estimated. The Adviser also performs back-testing of valuation information obtained from pricing vendors and brokers against actual prices received in transactions. In addition to ongoing monitoring and back-testing, the Adviser performs due diligence procedures over pricing vendors to understand their methodology and controls to support their use in the valuation process.

Non-publicly traded debt and equity securities and other securities or instruments for which reliable market quotations are not available are valued by us using valuation methodologies applied on a consistent basis. These securities may initially be valued at the acquisition price as the best indicator of fair value. We review the significant unobservable inputs, valuations of comparable investments and other similar transactions for investments valued at acquisition price to determine whether another valuation methodology should be utilized. Subsequent valuations will depend on facts and circumstances known as of the valuation date and the application of valuation methodologies further described below under “–Non-Exchange-Traded Investments.” The fair value may also be based on a pending transaction expected to close after the valuation date. These valuation methodologies involve a significant degree of management judgment. Accordingly, valuations do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments in the future. Fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the consolidated financial statements.

Exchange-Traded Investments

Non-Exchange-Traded Investments

If the quotations obtained from pricing vendors or brokers are determined to not be reliable or are not readily available, we value such investments using different valuation techniques. One valuation technique is the transaction precedent technique, which utilizes recent or expected future transactions of the investment to determine fair value, to the extent applicable. The market yield technique is considered in the valuation of non-publicly traded debt investments, utilizing expected future cash flows, discounted using estimated current market rates. Discounted cash flow calculations may be adjusted to reflect current market conditions and/or the perceived credit risk of the borrowers. Consideration is also given to a borrower’s ability to meet principal and interest obligations; this may include an evaluation of collateral or the underlying value of the borrower, utilizing either the market or income techniques. A market technique utilizes valuations of comparable public companies or transactions and generally seeks to establish the enterprise value of the portfolio company using a market multiple

technique. This technique takes into account a specific financial measure (such as earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, free cash flow, net operating income, net income, book value or net asset value) believed to be most relevant for the given company. Consideration may also be given to such factors as acquisition price of the security, historical and projected operational and financial results for the portfolio company, the strengths and weaknesses of the portfolio company relative to its comparable companies, industry trends, general economic and market conditions and other factors deemed relevant. The income technique is typically a discounted cash flow method that incorporates expected timing and level of cash flows. It incorporates assumptions in determining growth rates, income and expense projections, discount rates, capital structure, terminal values and other factors. The applicability and weight assigned to market and income techniques are determined based on the availability of reliable projections and comparable companies and transactions.

Under the market and income techniques, the significant unobservable input used in the fair value measurement of our investments in debt or equity securities is EBITDA, revenue or asset multiple, as applicable. Increases or decreases in the valuation multiples in isolation may result in a higher or lower fair value measurement, respectively. Under the market yield technique, the significant unobservable input used in the fair value measurement of the Company's investments in debt securities is the market yield. Increases or decreases in the market yield may result in a lower or higher fair value measurement, respectively.

Investments made by us are, by nature, generally considered to be long-term investments and are not intended to be liquidated on a short-term basis. Additionally, these valuation methodologies involve a significant degree of management judgment. Accordingly, valuations by us do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments in the future. Estimated fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to the consolidated financial statements.

We may estimate the fair value of privately held warrants using a Black Scholes pricing model, which includes an analysis of various factors and subjective assumptions, including the current stock price (by using an enterprise value analysis as described above), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk-free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.

As of June 30, 2022, investments at fair value were $566,675,653, down from $575,429,432 held at September 30, 2021, primarily driven by unrealized losses related to credit spread widening, partially offset by new originations during the nine months ended June 30, 2022.

Revenue Recognition

We generate revenues in the form of interest income on debt investments and, to a lesser extent, capital gains and distributions, if any, on equity securities that we may acquire in portfolio companies. Some of our investments provide for deferred interest payments or payment-in-kind ("PIK") interest income. The principal amount of the debt investments and any accrued but unpaid interest generally becomes due at the maturity date.

Interest Income

Interest income, adjusted for accretion of original issue discount ("OID"), is recorded on an accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when there is reasonable doubt that principal or interest cash payments will be collected. Cash interest payments received on investments may be recognized as income or a return of capital depending upon management’s judgment. A non-accrual investment is restored to accrual status if past due principal and interest are paid in cash, and the portfolio company, in management’s judgment, is likely to continue timely payment of its remaining obligations.

In connection with our investment in a portfolio company, we sometimes receive nominal cost equity that is valued as part of the negotiation process with the portfolio company. When we receive nominal cost equity, we allocate our cost basis in the investment between debt securities and the nominal cost equity at the time of origination. Any resulting discount from recording the loan, or otherwise purchasing a security at a discount, is accreted into interest income over the life of the loan.

For our secured borrowings, the interest earned on the entire loan balance is recorded within interest income and the interest earned by the counterparty is recorded within interest expense in the Consolidated Statements of Operations.

PIK Interest Income

Our investments in debt securities may contain PIK interest provisions. PIK interest, which generally represents contractually deferred interest added to the loan balance that is generally due at the end of the loan term, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. We generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest on a loan or debt security involves subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Our determination to cease accruing PIK interest is generally made well before our full write-down of a loan or debt security. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of the loans or debt securities would be reduced by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments increases the recorded cost bases of these investments in our consolidated financial statements including for purposes of computing the capital gains incentive fee payable by us to the Adviser. To maintain our status as a RIC, certain income from PIK interest may be required to be distributed to our stockholders even though we have not yet collected the cash and may never do so.

As of each of June 30, 2022 and September 30, 2021, there were no investments on non-accrual status.

Portfolio Composition

As of June 30, 2022, the fair value of our investment portfolio was $566.7 million and was comprised of investments in 115 portfolio companies. As of September 30, 2021, the fair value of our investment portfolio was $575.4 million and was comprised of investments in 108 portfolio companies.

As of June 30, 2022 and September 30, 2021, our investment portfolio consisted of the following:


	June 30, 2022		September 30, 2021
Cost:
Senior Secured Debt	97.50	%	97.57	%
Preferred Equity	1.78	%	1.28	%
Common Equity & Warrants	0.50	%	0.46	%
Subordinated Debt	0.22	%	0.69	%
Total	100.00	%	100.00	%


	June 30, 2022		September 30, 2021
Fair Value:
Senior Secured Debt	97.24	%	97.30	%
Preferred Equity	2.03	%	1.49	%
Common Equity & Warrants	0.50	%	0.53	%
Subordinated Debt	0.23	%	0.68	%
Total	100.00	%	100.00	%

The table below describes investments by industry composition based on fair value as a percentage of total investments:


	June 30, 2022		September 30, 2021
Fair Value:
Application Software	19.67	%	18.42	%
Pharmaceuticals	5.26	%	6.08	%
Biotechnology	4.07	%	5.65	%
Construction & Engineering	3.75	%	3.63	%
Industrial Machinery	3.60	%	3.65	%
Aerospace & Defense	3.15	%	2.81	%
Fertilizers & Agricultural Chemicals	3.12	%	3.18	%
Internet & Direct Marketing Retail	3.11	%	3.08	%
Health Care Technology	3.07	%	0.98	%
Personal Products	2.86	%	5.11	%
Data Processing & Outsourced Services	2.72	%	2.74	%
Health Care Supplies	2.44	%	1.42	%
Automotive Retail	2.35	%	1.85	%
Internet Services & Infrastructure	2.34	%	2.12	%
Insurance Brokers	2.33	%	2.57	%
Health Care Services	2.08	%	2.73	%
Home Improvement Retail	1.98	%	1.98	%
Health Care Distributors	1.96	%	0.84	%
Airport Services	1.82	%	1.75	%
Integrated Telecommunication Services	1.65	%	1.90	%
Distributors	1.65	%	—	%
Metal & Glass Containers	1.59	%	0.97	%
Real Estate Services	1.50	%	1.52	%
Soft Drinks	1.45	%	1.40	%
Cable & Satellite	1.43	%	1.57	%
Movies & Entertainment	1.38	%	1.37	%
Leisure Facilities	1.30	%	0.77	%
Oil & Gas Storage & Transportation	1.26	%	1.52	%
Electrical Components & Equipment	1.24	%	1.26	%
Other Diversified Financial Services	1.22	%	1.11	%
Oil & Gas Refining & Marketing	1.10	%	1.35	%
Real Estate Operating Companies	0.99	%	1.24	%
IT Consulting & Other Services	0.87	%	1.00	%
Specialized Finance	0.82	%	0.80	%
Education Services	0.82	%	—	%
Environmental & Facilities Services	0.81	%	—	%
Home Furnishings	0.80	%	0.83	%
Diversified Support Services	0.79	%	0.77	%
Health Care Equipment	0.77	%	0.76	%
Communications Equipment	0.76	%	0.83	%
Paper Packaging	0.57	%	—	%
Hotels, Resorts & Cruise Lines	0.57	%	—	%
Restaurants	0.56	%	0.59	%
Consumer Finance	0.39	%	—	%
Leisure Products	0.38	%	1.41	%
Air Freight & Logistics	0.35	%	—	%
Research & Consulting Services	0.27	%	0.42	%
Housewares & Specialties	0.20	%	0.12	%
Food Distributors	0.20	%	0.26	%
Diversified Banks	0.19	%	0.20	%
Alternative Carriers	0.18	%	0.17	%
Specialty Chemicals	0.11	%	0.13	%
Construction Materials	0.11	%	0.15	%
Advertising	0.04	%	—	%
Independent Power Producers & Energy Traders	—	%	1.31	%
Airlines	—	%	0.74	%
Interactive Media & Services	—	%	0.70	%
Managed Health Care	—	%	0.68	%
Thrifts & Mortgage Finance	—	%	0.67	%
Forest Products	—	%	0.34	%
Electric Utilities	—	%	0.27	%
Electronic Components	—	%	0.24	%
Food Retail	—	%	0.04	%
Total	100.00	%	100.00	%

The table below describes investments by geographic composition at fair value as a percentage of total investments:


	June 30, 2022	September 30, 2021
Fair Value:
United States	88.67%	86.07%
United Kingdom	5.71%	5.97%
Switzerland	2.03%	2.22%
Australia	1.38%	1.37%
Iceland	1.22%	1.19%
Luxembourg	0.99%	1.70%
Chile	—%	0.74%
Singapore	—%	0.70%
Canada	—%	0.04%
Total	100.00%	100.00%

See the Schedule of Investments as of June 30, 2022 and September 30, 2021 in our consolidated financial statements in Part I, Item 1, of this Form 10-Q for more information on these investments, including a list of companies and the type, cost and fair value of investments.

Discussion and Analysis of Results and Operations

Results of Operations

The principal measure of our financial performance is the net increase (decrease) in net assets resulting from operations, which includes net investment income, net realized gains (losses) and net unrealized appreciation (depreciation). Net investment income is the difference between our income from interest income and fee income and total expenses. Net realized gains (losses) on investments is the difference between the proceeds received from dispositions of portfolio investments and their stated costs. Net unrealized appreciation (depreciation) is the net change in the fair value of our investment portfolio during the reporting period, including the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized. The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation.

Comparison of the three and nine months ended June 30, 2022 and June 30, 2021

Investment Income

Total investment income for the three months ended June 30, 2022 was $13,633,243 and consisted of $13,050,211 of interest income primarily from portfolio investments (including $1,120,082 of PIK interest income), $558,320 of fee income and $24,712 of dividend income. Total investment income for the three months ended June 30, 2021 was $14,402,313 and consisted of $12,474,451 of interest income primarily from portfolio investments (including $1,063,850 of PIK interest income) and $1,927,862 of fee income. The decrease of $769,070 in total investment income, as compared to the prior year comparative quarter, was due to a $1,369,542 decrease in fee income primarily due to lower prepayment fees during the quarter, partially offset by a $575,760 increase in interest income, which was due to a larger investment portfolio and a higher yield on investments partially offset by lower OID accretion, and a $24,712 increase in dividend income.

Total investment income for the nine months ended June 30, 2022 was $41,469,543 and consisted of $40,173,506 of interest income primarily from portfolio investments (including $3,010,940 of PIK interest income), $1,271,325 of fee income and $24,712 of dividend income. Total investment income for the nine months ended June 30, 2021 was $36,377,375 and consisted of $32,345,508 of interest income primarily from portfolio investments (including $2,960,403 of PIK interest income) and $4,031,867 of fee income. The increase of $5,092,168 in total investment income, as compared to the prior year comparative period, was due to a $7,827,998 increase in interest income, which was due to a larger investment portfolio and a higher yield on investments, and a $24,712 increase in dividend income, partially offset by a $2,760,542 decrease in fee income primarily due to lower prepayment fees during the nine month period. Based on fair value as of June 30, 2022, the weighted average yield on our debt investments was 9.4%, compared to 8.2% as of June 30, 2021.

Expenses

Total expenses for the three months ended June 30, 2022 and June 30, 2021 were $4,945,430 and $5,889,934, respectively. The decrease in total expenses for the three months ended June 30, 2022, as compared to the prior year comparative quarter, was primarily due to (1) a $1,383,532 decrease in accrued capital gains incentive fees as a result of a reversal of previously accrued capital gains incentive fees driven by unrealized losses during the current quarter, (2) a decrease in total investment income and higher interest expense which resulted in a $299,516 decrease in investment income incentive fees and (3) a $34,499 decrease in base management fees primarily driven by an increase in leverage since management fees are not to exceed 1.75% per annum of the Unleveraged Asset Value, partially offset by a $768,766 increase in interest expense as leverage and reference rates increased.

Total expenses for the nine months ended June 30, 2022 and June 30, 2021 were $16,213,876 and $16,801,510, respectively. The decrease in total expenses for the nine months ended June 30, 2022, as compared to the prior year comparative period, was primarily due to a $3,908,598 decrease in accrued capital gains incentive fees as a result of a reversal of previously accrued capital gains incentive fees driven by unrealized losses during the current period, partially offset by (1) a $2,358,987 increase in interest expense as leverage and reference rates increased, (2) an increase in total investment income, partially offset by higher interest expense which resulted in a $445,307 increase in investment income incentive fees, and (3) an increase in the size of our investment portfolio as compared to the prior year comparative period, which drove a $443,852 increase in base management fees.


	Three months ended June 30, 2022		Three months ended June 30, 2021		Nine months ended June 30, 2022		Nine months ended June 30, 2021
Expenses:
Base management fee	$	1,363,619	$	1,398,118	$	4,289,728	$	3,845,876
Investment income incentive fee	1,850,189		2,149,705		5,816,775		5,371,468
Capital gains incentive fee	(1,287,059)		96,473		(1,988,557)		1,920,041
Professional fees	252,017		257,669		801,637		741,431
Directors fees	38,750		38,750		116,250		116,250
Interest expense	2,399,380		1,630,614		6,206,849		3,847,862
Administrator expense	108,141		105,792		342,356		313,934
General and administrative expenses	220,393		212,813		628,838		644,648
Total expenses	$	4,945,430	$	5,889,934	$	16,213,876	$	16,801,510

Net Unrealized Appreciation (Depreciation)

Net unrealized depreciation was $16,688,591 for the three months ended June 30, 2022, primarily due to unrealized depreciation across various investments in the portfolio and unrealized depreciation on foreign currency forward contracts. Net unrealized depreciation was $98,033 for the three months ended June 30, 2021, primarily driven by unrealized depreciation across various investments in the portfolio, partially offset by unrealized appreciation of foreign currency forward contracts.

Net unrealized depreciation was $21,718,165 for the nine months ended June 30, 2022, primarily due to unrealized depreciation across various investments in the portfolio and unrealized depreciation of foreign currency forward contracts. Net unrealized appreciation was $7,893,619 for the nine months ended June 30, 2021, primarily driven by unrealized appreciation across various investments in the portfolio and unrealized appreciation of foreign currency forward contracts.

Net Realized Gains (Losses)

Net realized gains were $2,730,439 and $695,814 for the three months ended June 30, 2022 and 2021, respectively. For the three months ended June 30, 2022, net realized gains were primarily due to realized gains on foreign currency forward contracts and realized gains resulting from exits of various investments in the portfolio. For the three months ended June 30, 2021, net realized gains were primarily due to realized gains resulting from exits of various investments in the portfolio, partially offset by realized losses on foreign currency forward contracts. Net realized gains were $4,242,798 and $1,821,499 for the nine months ended June 30, 2022 and 2021, respectively. For the nine months ended June 30, 2022, net realized gains were primarily due to realized gains on foreign currency forward contracts and realized gains resulting from exits of various investments in the portfolio. For the nine months ended June 30, 2021, net realized gains were primarily due to realized gains resulting from exits of various investments in the portfolio, partially offset by realized losses on foreign currency forward contracts.

Financial Condition, Liquidity and Capital Resources

We generate cash from (1) cash flows from operations, including earnings on investments, as well as interest earned from the temporary investment of cash in cash-equivalents, U.S. government securities and other high-quality debt investments that mature in one year or less, and (2) borrowings from banks and issuances of senior securities.

Our primary use of cash is for (1) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (2) the cost of operations (including our expenses, the Management Fee and the Incentive Fee), (3) debt service of borrowings under our credit facilities and secured borrowings, and (4) cash distributions to the stockholders.

For the nine months ended June 30, 2022, we experienced a net increase in cash and cash equivalents and restricted cash of $7,417,681. During that period, $27,935,145 of cash was provided by operating activities, primarily consisting of cash proceeds from the sales and repayments of investments, a net decrease in net receivables from unsettled transactions and cash provided by net investment income, partially offset by cash used to fund new investments. During the same period, cash used in financing activities was $20,227,174, primarily consisting of distributions to stockholders of $29,059,871 and $4,167,303 of net repayment of secured borrowings, partially offset by $13,000,000 of net borrowings under our credit facilities.

For the nine months ended June 30, 2021, we experienced a net decrease in cash and cash equivalents and restricted cash of $7,250,962. During that period, $84,106,941 of cash was used in operating activities, primarily consisting of cash used to fund new investments, partially offset by cash proceeds from the sales and repayments of investments. During the same period, cash provided by financing activities was $77,264,867, primarily consisting of $98,000,000 of net borrowings under our credit facilities and $10,000,000 of proceeds from secured borrowings, partially offset by distributions to stockholders of $29,929,931 and financings costs paid of $805,202.

As of June 30, 2022, we had $30,990,696 of cash and cash equivalents (including $9,815,519 of restricted cash), portfolio investments (at fair value) of $566,675,653, $2,673,301 of interest receivable, $264,000,000 of borrowings outstanding under our credit facilities, $5,802,122 of secured borrowings and $1,202,630 of net payables from unsettled transactions.

As of September 30, 2021, we had $23,573,015 of cash and cash equivalents (including $4,317,968 of restricted cash), portfolio investments (at fair value) of $575,429,432, $3,196,194 of interest receivable, $251,000,000 of borrowings outstanding under our credit facilities, $9,969,425 of secured borrowings and $11,349,581 of receivables from unsettled transactions.

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30, 2022 and September 30, 2021, off-balance sheet arrangements consisted of $29,975,431 and $48,497,448, respectively, of unfunded commitments to provide debt and equity financing to certain of our portfolio companies. Such commitments are subject to the portfolio company's satisfaction of certain financial and nonfinancial covenants and may involve, to varying degrees, elements of credit risk in excess of the amount recognized in our Consolidated Statements of Assets and Liabilities.

As of June 30, 2022, we have analyzed cash and cash equivalents, availability under our credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believe our liquidity and capital resources are sufficient to take advantage of market opportunities in the current economic climate.

Contractual Obligations


	Debt Outstanding as of September 30, 2021		Debt Outstanding as of June 30, 2022		Weighted average debt outstanding for the nine months ended June 30, 2022		Maximum debt outstanding for the nine months ended June 30, 2022
Citibank Facility	$	200,000,000	$	231,000,000	$	220,260,073	$	231,000,000
CNB-2 Facility	51,000,000		33,000,000		35,619,048		51,000,000
Secured Borrowings	9,969,425		5,802,122		9,355,812		13,000,786
Total debt	$	260,969,425	$	269,802,122	$	265,234,933


	Payments due by period as of June 30, 2022
	Total		< 1 year		1-3 years		3-5 years
CNB-2 Facility	$	33,000,000	$	33,000,000	$	—	$	—
Interest due on CNB-2 Facility	1,125,870		1,125,870		—		—
Citibank Facility	231,000,000		—		231,000,000		—
Interest due on Citibank Facility	25,882,276		10,039,352		15,842,924		—
Secured borrowings	5,802,122		5,802,122		—		—
Interest due on secured borrowings	51,106		51,106		—		—
Total	$	296,861,374	$	50,018,450	$	246,842,924	$	—

Equity Activity

As of June 30, 2022 and September 30, 2021, we completed drawdowns of $337,558,996, or 100%, of Capital Commitments from investors in connection with Private Offerings, of which $3,854,346 in Capital Commitments were made by one or more affiliates of the Adviser.

We have the authority under our organizational documents to issue 250,000,000 shares of Common Stock, $0.001 per share par value and 100,000,000 shares of preferred stock, $0.001 per share par value. The following table summarizes total shares issued and proceeds related to capital drawdowns delivered pursuant to the Subscription Agreements for our Common Stock through June 30, 2022:


	Shares Issued	Price per Share		Proceeds
August 6, 2018 (1)	770,869	$	20.00	$	15,417,385
September 17, 2018	770,869	20.00		15,417,384
October 29, 2018	1,060,964	19.85		21,060,130
November 15, 2018	789,198	19.82		15,641,900
April 29, 2019	1,655,314	20.40		33,768,400
August 30, 2019	1,631,324	20.70		33,768,400
September 23, 2019	1,631,323	20.70		33,768,399
March 26, 2020 (2)	3,263,385	20.68		67,486,799
April 30, 2020 (2)	5,827,875	17.37		101,230,199
Total	17,401,121			$	337,558,996

__________________

(1)Includes 50 shares issued to one or more affiliates of the Adviser on July 23, 2018.

(2)For the March 26, 2020 and April 30, 2020 drawdowns, the shares issued exclude 2,418 shares and 4,318 shares related to defaulted investors. In connection with these defaults, Capital Commitments and proceeds from capital drawdowns were each reduced by $125,000.

Leverage

On July 9, 2018, our sole stockholder approved our becoming subject to a minimum asset coverage ratio of 150% as set forth in Section 61(a)(2) of the Investment Company Act. As a result of this approval, we are permitted to borrow amounts so long as our asset coverage ratio, as defined in the Investment Company Act, is at least 150% after such borrowing (if certain requirements are met). As of June 30, 2022, our asset coverage ratio, as defined in the Investment Company Act, was 220.6%, and senior securities outstanding were $269.8 million.

We may issue debt securities or preferred stock and/or borrow additional money from banks or other financial institutions, which we refer to collectively as "senior securities," up to the maximum amount permitted by the Investment Company Act. We have securitized and may in the future securitize a portion of our investments to the extent permitted by applicable law and regulation. To securitize investments, we typically create a wholly-owned subsidiary and contribute a pool of loans to the subsidiary. We then typically sell interests in the subsidiary on a non-recourse basis to purchasers and we would retain all or a portion of the equity in the subsidiary. Our primary uses of funds are investments in our targeted asset classes and cash distributions to holders of our common stock.

CNB-2 Facility

On June 9, 2020 (the “CNB-2 Closing Date”), we entered into a loan and security agreement, which was subsequently amended on March 31, 2021 (as amended, the “CNB-2 Loan Agreement”) between us, as borrower, and CNB, as lender. The CNB-2 Loan Agreement provides for a senior secured revolving credit facility (the “CNB-2 Facility”) of up to $60 million (the “CNB-2 Facility Maximum Commitment”) in aggregate principal amount, subject to the lesser of (i) the borrowing base, which is an amount determined by applying different rates to eligible assets held by the Company based generally on the value of such assets and (ii) the CNB-2 Facility Maximum Commitment. The maturity date of the CNB-2 Facility is June 9, 2023.

The CNB-2 Facility is secured by a first priority security interest in substantially all of our assets, including our portfolio investments but excluding those investments held in OSI 2 SPV (defined below). We have made customary representations and warranties and are required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities. Our borrowings, including under the CNB-2 Facility, are subject to the leverage restrictions contained in the Investment Company Act.

As of June 30, 2022 and September 30, 2021, we had $33.0 million and $51.0 million, respectively, outstanding under the CNB-2 Facility. For the nine months ended June 30, 2022 and 2021, our borrowings under the CNB-2 Facility bore interest at a weighted average interest rate of 2.88% and 3.05%, respectively. For the three and nine months ended June 30, 2022, we recorded interest expense (inclusive of fees) of $293,381 and $967,745, respectively, related to the CNB-2 Facility. For the three and nine months ended June 30, 2021, we recorded interest expense (inclusive of fees) of $412,780 and $951,038, respectively, related to the CNB-2 Facility.

Citibank Facility

On July 26, 2019 (the "Citibank Closing Date"), we and OSI 2 Senior Lending SPV, LLC ("OSI 2 SPV"), a wholly-owned and consolidated subsidiary of us, entered into a loan and security agreement, which was subsequently amended on September 20, 2019, July 2, 2020, December 31, 2020 and March 31, 2021 (as amended, the "Citibank Loan Agreement"), with the lenders from time to time party thereto and the other parties referenced below. Under the terms of the Citibank Loan Agreement, we serve as the collateral manager and seller and OSI 2 SPV serves as borrower with Citibank, N.A., as administrative agent, and Deutsche Bank Trust Company Americas, as collateral agent.

The Citibank Loan Agreement provides for a senior secured revolving credit facility (the "Citibank Facility"), of up to $250 million (the "Citibank Maximum Commitment"), in aggregate principal amount, subject to the lesser of (i) the borrowing base, which is an amount based on advance rates that vary depending on the class of assets and the value assigned to such assets under the Citibank Loan Agreement and (ii) the Citibank Maximum Commitment. The Citibank Facility has a forty-two (42) month reinvestment period (the "Reinvestment Period"), during which advances may be made; and matures sixty-six (66) months from the Citibank Closing Date. Following the Reinvestment Period, OSI 2 SPV will be required to make certain mandatory amortization payments. Borrowings under the Citibank Facility bear interest payable quarterly at a rate per year equal to (a) in the case of a lender that is identified as a conduit lender under the Loan Agreement, the lesser of (i) the applicable commercial paper rate for such conduit lender and (ii) the LIBOR for a three month maturity and (b) for all other lenders under the Citibank Facility, LIBOR, plus, in each case, an applicable spread. During the Reinvestment Period, the applicable spread is the greater of (i) a weighted average rate of (x) 1.65% per year for broadly syndicated loans and (y) 2.25% per year for all other eligible loans and (ii) 1.85%. After the Reinvestment Period, the applicable spread is 3.00% per year. There is also a non-usage fee of (i) 0.40% per year for the first six months following the Citibank Closing Date (the "Ramp-Up Period"), and (ii) 0.50% per year thereafter, in each case, on the unused portion of the Citibank Facility, payable quarterly; provided that if after the Ramp-Up Period the unused portion of the Citibank Facility is greater than 30% of the commitments under the Citibank Facility, the non-usage fee will be based on an unused portion of 30% of the commitments under the Citibank Facility.

The Citibank Facility is secured by a first priority security interest in substantially all of OSI 2 SPV’s assets.

Under the Citibank Facility, we and OSI 2 SPV, as applicable, have made customary representations and warranties, and are required to comply with various affirmative and negative covenants, reporting requirements and other customary requirements for similar credit facilities.

OSI 2 SPV’s borrowings are non-recourse to us but are considered borrowings of us for purposes of complying with the asset coverage requirements under the Investment Company Act.

As of June 30, 2022 and September 30, 2021, we had $231.0 million and $200.0 million, respectively, outstanding under the Citibank Facility. Our borrowings under the Citibank Facility bore interest at a weighted average interest rate of 2.69% and 2.36% for the nine months ended June 30, 2022 and 2021, respectively. For the three and nine months ended June 30, 2022, we recorded interest expense (inclusive of fees) of $2,063,349 and $4,992,882, respectively, related to the Citibank Facility. For the three and nine months ended June 30, 2021, the Company recorded interest expense (inclusive of fees) of $1,154,709 and $2,794,358, respectively, related to the Citibank Facility.

Secured Borrowings

As of June 30, 2022, we had $5.8 million of secured borrowings outstanding, which were recorded as a result of certain securities that were sold and simultaneously repurchased at a premium, with amounts payable to the counterparty due on the repurchase settlement date, which is generally within 120 days of the trade date. Our secured borrowings bore interest at a

weighted average rate of 3.47% for the nine months ended June 30, 2022. We recorded $42,650 and $246,222 of interest expense in connection with secured borrowings for the three and nine months ended June 30, 2022, respectively.

Regulated Investment Company Status and Distributions

We anticipate that we will make quarterly distributions of at least 90% of our realized net ordinary income and net short-term capital gains in excess of our net long-term capital losses, if any, then available for distribution, each as determined by our board of directors in accordance with applicable law and the terms of the Governing Documents. Any distributions will be declared out of assets legally available for distribution. We expect quarterly distributions to be paid from income primarily generated by interest earned on our investments, although distributions to stockholders may also include a return of capital.

We have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code. To maintain RIC qualification, we must distribute to our stockholders, for each tax year, at least 90% of our “investment company taxable income” for that year. In order to avoid certain excise taxes imposed on RICs, we intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of our ordinary income for the calendar year; (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year; and, (3) any undistributed ordinary income and capital gain net income for preceding years on which we paid no U.S. federal income tax less certain over-distributions in prior years. In addition, although we currently intend to distribute realized net capital gains (i.e., net long term capital gains in excess of short term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment, pay U.S. federal income tax on such amounts at regular corporate tax rates, and elect to treat such gains as deemed distributions to stockholders. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.

Depending on the level of taxable income and net capital gain earned in a year, we may choose to carry forward taxable income or net capital gain for distribution in the following year and pay the applicable U.S. federal excise tax. Distributions will be appropriately adjusted for any taxes payable by us or any direct or indirect subsidiary through which it invests (including any corporate, state, local, non-U.S. and withholding taxes). Any Incentive Fee to be paid to our Adviser will not be reduced to take into account any such taxes.

We may generate qualified net interest income or qualified net short-term capital gains that may be exempt from U.S. withholding tax when distributed to foreign stockholders. A RIC is permitted to designate distributions of qualified net interest income and qualified short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. shareholders with proper documentation. The following table, which may be subject to change as we finalize our annual tax filings, lists the percentage of qualified net interest income and qualified short-term capital gains for the year ended September 30, 2021, our most recently completed tax year end.


Year Ended	Qualified Net Interest Income		Qualified Short-Term Capital Gains
September 30, 2021	61.6	%	34.5	%

The following table reflects the distributions per share that we have paid on our common stock during the nine months ended June 30, 2022:


Distribution Type	Record Date	Payment Date	Amount per Share		Cash Distribution
Quarterly	December 15, 2021	December 28, 2021	$	0.42	$	7,308,472
Special	December 15, 2021	December 28, 2021	0.38		6,612,424
Quarterly	March 15, 2022	March 28, 2022	0.43		7,482,481
Quarterly	June 15, 2022	June 30, 2022	0.44		7,656,494
			$	1.67	$	29,059,871

The following table reflects the distributions per share that the Company has paid on its common stock during the nine months ended June 30, 2021:


Distribution Type	Record Date	Payment Date	Amount per Share		Cash Distribution
Quarterly	December 15, 2020	December 31, 2020	$	0.35	$	6,090,393
Special	December 15, 2020	December 31, 2020	0.62		10,788,696
Quarterly	March 15, 2021	March 26, 2021	0.35		6,090,393
Quarterly	June 15, 2021	June 30, 2021	0.40		6,960,449
			$	1.72	$	29,929,931

Related Party Transactions

We have entered into the Investment Advisory Agreement with the Adviser and the Administration Agreement with the Administrator, an affiliate of the Adviser. The Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and is a subsidiary of Oaktree Capital Group, LLC.

Recent Developments

Distribution Declaration

On August 5, 2022, our Board of Directors approved a quarterly distribution of $0.44 per share, payable in cash on September 27, 2022 to our stockholders of record as of the close of business on September 15, 2022.

Rule 2a-5

On August 5, 2022, the Board of Directors appointed the Adviser as the valuation designee under Rule 2a-5 of the 1940 Act effective September 8, 2022 for purposes of determining the fair value of our investments.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.

Valuation Risk

Our investments often do not have a readily available market price, and we value these investments at fair value as determined in good faith by our board of directors, with the assistance of the Audit Committee and the Adviser. There is no single standard for determining fair value in good faith and valuation methodologies involve a significant degree of management judgment. In addition, our valuation methodology utilizes discount rates in part in valuing our investments, and changes in those discount rates may have an impact on the valuation of our investments. Accordingly, valuations by us do not necessarily represent the amounts which may eventually be realized from sales or other dispositions of investments. Estimated fair values may differ from the values that would have been used had a ready market for the investment existed, and the differences could be material to our consolidated financial statements.

Interest Rate Risk

We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, cash and cash equivalents and idle funds investments. Our risk management procedures are designed to identify and analyze our risk, to set appropriate policies and to continually monitor these risks. Our investment income will be affected by changes in various interest rates, including LIBOR, SOFR, SONIA and prime rates, to the extent our debt investments include floating interest rates.

As of June 30, 2022, 92.3% of our debt investment portfolio at fair value bore interest at floating rates. The composition of our floating rate debt investments by interest rate floor as of June 30, 2022 and September 30, 2021 was as follows:


	June 30, 2022				September 30, 2021
($ in thousands)	Fair Value		% of Floating Rate Portfolio		Fair Value		% of Floating Rate Portfolio
0%	$	39,670,770	7.79	%	$	48,594,490	9.30	%
>0% and <1%	127,023,848		24.92		97,766,063		18.72
1%	322,346,972		63.24		355,262,700		68.02
>1%	20,653,292		4.05		20,656,619		3.96
Total	$	509,694,882	100.00	%	$	522,279,872	100.00	%

Based on our Consolidated Statements of Assets and Liabilities as of June 30, 2022, the following table shows the approximate annualized net increase (decrease) in net assets resulting from operations of hypothetical base rate changes in interest rates, assuming no changes in our investment and capital structure. However, there can be no assurances our portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates.


Basis point increase	Increase in Interest Income		(Increase) in Interest Expense		Net increase in net assets resulting from operations
250	$	12,852,424	$	(6,600,000)	$	6,252,424
200	10,238,155		(5,280,000)		4,958,155
150	7,645,419		(3,960,000)		3,685,419
100	5,070,993		(2,640,000)		2,430,993
50	2,522,957		(1,320,000)		1,202,957


Basis point decrease	(Decrease) in Interest Income		Decrease in Interest Expense		Net (decrease) in net assets resulting from operations
50	$	(2,496,052)	$	1,320,000	$	(1,176,052)
100	(4,550,595)		2,597,100		(1,953,495)
150	(5,702,568)		3,752,100		(1,950,468)
200	(6,104,763)		4,907,100		(1,197,663)

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on this review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. The interest rate on the principal balance outstanding for primarily most of the floating rate loans is indexed to the LIBOR, SOFR, SONIA and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. The following table shows a comparison of the interest rate base for our outstanding debt investments, at principal, and our outstanding borrowings as of June 30, 2022 and September 30, 2021:


	June 30, 2022				September 30, 2021
	Debt Investments		Borrowings		Debt Investments		Borrowings
Prime rate	$	590,198	$	—	$	1,097,727	$	—
LIBOR:
30 day	176,839,513		33,000,000		135,281,414		51,000,000
90 day	207,583,418		231,000,000		259,893,962		200,000,000
180 day	65,035,176		—		79,023,702		—
360 day	8,194,427		—		20,074,643		—
EURIBOR:
30 day	5,380,931		—		5,965,116		—
90 day	7,129,969		—		7,904,039		—
180 day	1,100,579		—		5,428,096		—
SOFR
30 day	28,896,120		—		—		—
90 day	16,525,205		—		—		—
SONIA
30 day	3,795,156		—		—		—
180 day	12,128,893
UK LIBOR:
30 day	—		—		4,213,594		—
180 day	—		—		13,466,173		—
Fixed rate	42,897,946		5,802,122		42,102,695		9,969,425
Total	$	576,097,531	$	269,802,122	$	574,451,161	$	260,969,425

Item 4. Controls and Procedures

As of the end of the period covered by this report, management, with the participation of the Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, in timely identifying, recording, processing, summarizing and reporting any material information relating to us that is required to be disclosed in the reports we file or submit under the Exchange Act.

There were no changes in our internal control over financial reporting that occurred during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1. Legal Proceedings

We are currently not a party to any pending material legal proceedings.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2021.

Our business, financial condition and results of operations could be adversely affected by disruptions in the global

economy caused by the ongoing conflict between Russia and Ukraine.

The global economy has been negatively impacted by the military conflict between Russia and Ukraine. Furthermore, governments in the U.S., United Kingdom, and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. We do not currently have investments in companies headquartered or that operate primarily in Russia or Ukraine. However, businesses in the United States and globally have experienced shortages in materials and increased costs for transportation, energy, and raw material due in part to the negative impact of the Russia-Ukraine military conflict on the global economy, all of which could have an indirect impact on our portfolio companies. Further escalation of geopolitical tensions related to the military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business, financial condition and results of operations and that of our portfolio companies. In addition, the effects of the ongoing conflict could heighten many of our known risks described in the Company's Annual Report on Form 10-K for the year ended September 30, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:


Exhibit						Description
31.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*
31.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
32.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*


*			Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



OAKTREE STRATEGIC INCOME II, INC.

By:						/s/ Armen Panossian
						Armen Panossian
						Chairman, Chief Executive Officer and Chief Investment Officer

By:						/s/ Christopher McKown
						Christopher McKown
						Chief Financial Officer and Treasurer

Date: August 8, 2022

Exhibit 31.1

I, Armen Panossian, Chief Executive Officer of Oaktree Strategic Income II, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2022 of Oaktree Strategic Income II, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 8th day of August, 2022.



By:						/s/ Armen Panossian
						Armen Panossian Chief Executive Officer

Exhibit 31.2

I, Christopher McKown, Chief Financial Officer of Oaktree Strategic Income II, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2022 of Oaktree Strategic Income II, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 8th day of August, 2022.



By:						/s/ Christopher McKown
						Christopher McKown Chief Financial Officer

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

In connection with the quarterly report on Form 10-Q for the quarter ended June 30, 2022 (the “Report”) of Oaktree Strategic Income II, Inc. (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, Armen Panossian, the Chief Executive Officer of the Registrant, hereby certify, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.



/s/ Armen Panossian
Name: Armen Panossian

Date: August 8, 2022

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

In connection with the quarterly report on Form 10-Q for the quarter ended June 30, 2022 (the “Report”) of Oaktree Strategic Income II, Inc. (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, Christopher McKown, the Chief Financial Officer of the Registrant, hereby certify, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.



/s/ Christopher McKown
Name: Christopher McKown

Date: August 8, 2022