Saratoga Investment Corp. Joint Venture Prices $400 million New CLO

Saratoga Investment Corp

Saratoga Investment Corp

NEW YORK, Oct. 03, 2022 (GLOBE NEWSWIRE) — Saratoga Investment Corp. (NYSE:SAR) (“Saratoga Investment” or “the Company”), a business development company, today announced that it has priced $400 million for CLO on September 30, 2022 Saratoga Investment Corp Senior Loan Fund 2022-1 Ltd. (“SLF 2022”). SLF 2022 is a wholly owned subsidiary of Saratoga Senior Loan Fund I JV LLC (“SLF JV”) and is jointly controlled and managed by Saratoga Investment and TJHA JV I LLC (“TJHA”). The SLF JV was formed on October 26, 2021 to make investments in a diversified portfolio of broadly syndicated senior and subordinated loans or bonds in the primary and secondary markets.

The transaction is structured as follows:

Saratoga Investment Corp. Senior Loan Fund 2022-1 Ltd. (Saratoga Senior Loan Fund II JV LLC)

class

nominal amount

Expected reviews
(Moody’s)

coupon

A-1

$240 million

Aaa

SOFR+175

A-2

$16M

Aaa

SOFR+260

B

$48M

Aa

SOFR+350

C

20 million dollars

A3

SOFR+400

D

$24M

BBB

SOFR+661

E

$14M

Ba3

SOFR+855

Child Notes

$40.1M

NO

The lock-up period ends in April 2025 for the Class A-1, A-2, B and C Notes and in October 2024 for the Class D and E Notes. The reinvestment period ends in October 2025, the legal end date is October 2033.

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Estimated completion date is October 28, 2022.

At the Closing Date, Saratoga Investment will own 87.5% of the E-Notes and SLF JV will own 100% of the Subordinated Notes. Saratoga Investment owns 87.5% of the unsecured loans and member interests of the SLF JV.

The Notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

“We are pleased to have completed the financing of this new $400 million CLO along with our joint venture partners, particularly in these challenging capital market conditions where interest rate volatility and an uncertain economic outlook have disrupted credit markets, resulting in a significant reduction the number of closed CLOs as well as many attractive secondary loans being offered for sale below par,” said Christian L. Oberbeck, chairman and chief executive officer of Saratoga Investment. “This will bring our total CLO assets either managed or co-managed by Saratoga to over $1 billion. We remain confident in our experienced management team, our high underwriting standards and our ability to sustain quality and investment performance over the long term. This CLO investment and successful financing continues to expand the breadth and diversity of our investment base and funding sources.”

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About Saratoga Investments

Saratoga Investment Corp. is a specialist finance company that offers customized financing solutions for medium-sized US companies. The firm invests primarily in senior and unitranche leveraged and mezzanine loans and, to a lesser extent, equity to fund change of ownership transactions, strategic acquisitions, recapitalizations and growth initiatives in partnership with business owners, management teams and financial sponsors. The goal of Saratoga Investment Corp. is to generate attractive risk-adjusted returns by generating current income and long-term capital appreciation from its debt and equity investments. Saratoga Investment Corp. has elected to be regulated as a business development company under the Investment Company Act of 1940 and is managed externally by Saratoga Investment Advisors, LLC, an SEC-registered investment advisor focused on credit-oriented strategies. Saratoga Investment Corp. owns three SBIC-licensed subsidiaries, manages a $650 million collateralized loan obligation (“CLO”) fund, and co-manages a joint venture (“JV”) fund that has a collateralized loan obligation ( “JV CLO”) of $400 million. ) fund. It also owns 52% of the Class F and 100% of the CLO’s Subordinated Notes, 87.5% of both the unsecured loans and membership interests of the JV and 87.5% of the JV CLO’s Class E Notes. The Company’s diverse funding sources, combined with a durable capital base, allow Saratoga Investment Corp. to offer a wide range of financing solutions.

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FORWARD LOOKING STATEMENTS

This press release contains certain forward-looking statements about Saratoga Investment’s business and investments, including the benefits of CLO and JV investments. Forward-looking statements are statements that are not historical statements and are often identified by words such as “will”, “believe”, “expect” and similar expressions and variations or negatives of these words. These statements are based on management’s current expectations, assumptions and beliefs. These forward-looking statements are subject to risks and uncertainties and other factors discussed in this press release and Saratoga Investment’s filings with the SEC. They are not guarantees of future results and are subject to numerous risks, uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements. Saratoga Investment undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact: Henri Steenkamp
Saratoga Investment Corp.
212-906-7800

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