Saratoga Investment Corp. Prices Public Offering of $37.5 Million 7.25% Notes Due 2025

Rhea-AI Summary

Saratoga Investment Corp. has priced a public offering of $37.5 million in 7.25% unsecured notes due 2025, with an option for underwriters to purchase an additional $5.625 million. The notes will provide interest quarterly, starting August 31, 2020, and are expected to trade on the NYSE under the symbol 'SAC'. Proceeds will be used for investments in middle-market companies and general corporate purposes. Egan-Jones rated the notes as 'BBB'. The offering is set to close on June 24, 2020.

Positive

• Offering of $37.5 million in unsecured notes at 7.25% interest, with a potential for additional $5.625 million.
• Proceeds aimed at investments in middle-market companies, aligning with growth strategies.

Negative

• Potential dilution of existing shareholders due to new debt issuance.

NEW YORK, NY , June 17, 2020 (GLOBE NEWSWIRE) -- Saratoga Investment Corp. (the “Company”) (NYSE: SAR) today announced that it has priced an underwritten public offering of $37.5 million in aggregate principal amount of 7.25% unsecured notes due 2025 (the “Notes”). The Notes will mature on June 30, 2025, and may be redeemed in whole or in part at any time or from time to time at Saratoga Investment Corp.’s option on or after June 24, 2022. The Notes will bear interest at a rate of 7.25% per year payable quarterly on February 28, May 31, August 31 and November 30 of each year, beginning August 31, 2020.

The offering is expected to close on June 24, 2020, subject to customary closing conditions. The Company has granted the underwriters an option to purchase up to an additional $5.625 million in aggregate principal amount of Notes. The Notes are expected to be listed on the New York Stock Exchange and to trade thereon within 30 days of the original issue date under the trading symbol “SAC”.

The Company has received an investment grade private rating of “BBB” from Egan-Jones Ratings Company, an independent, unaffiliated rating agency.

Egan-Jones is a Nationally Recognized Statistical Rating Organization (NRSRO) and is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). Egan-Jones is also certified by the European Securities and Markets Authority (ESMA).

Ladenburg Thalmann & Co. Inc., Janney Montgomery Scott LLC, BB&T Capital Markets, a division of BB&T Securities, LLC, B. Riley FBR, Inc. and Compass Point Research & Trading, LLC, are serving as joint book-running managers for the offering. Incapital LLC, National Securities Corporation, a wholly owned subsidiary of National Holdings Corporation (Nasdaq: NHLD) and Maxim Group LLC are serving as lead managers for the offering. The Company expects to use the net proceeds from this offering to make investments in middle-market companies in accordance with the Company’s investment objective and strategies and for general corporate purposes.

Investors are advised to consider carefully the investment objective, risks and charges and expenses of the Company before investing.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of, the Notes referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction. A registration statement relating to the Notes was filed and has been declared effective by the Securities and Exchange Commission.

This offering is being made solely by means of a written prospectus forming part of the effective registration statement and a related preliminary prospectus supplement, which may be obtained for free by visiting the Securities and Exchange Commission’s website at www.sec.gov or from of any of the following investment banks: Ladenburg Thalmann, Attn: Syndicate Department, 277 Park Avenue, 26th Floor, New York, NY 10172, or by e-mailing prospectus@ladenburg.com (telephone number 1-800-573-2541); Janney Montgomery Scott LLC, 1717 Arch Street, Philadelphia, PA 19103, or by e-mailing prospectus@janney.com (or calling 215-665-4450); BB&T Capital Markets, a division of BB&T Securities, LLC, at 901 East Byrd Street, 3rd Floor, Richmond, VA 23219 Attn: Syndicate Dept. or by e-mailing prospectusrequests@bbandtcm.com; or B. Riley FBR, Inc., Attn: Prospectus Department, 1300 17th Street North, Suite 1300, Arlington, VA 22209 or by e-mailing prospectuses@brileyfbr.com (or by calling (800) 846-5050). The preliminary prospectus supplement dated June 17, 2020, and the accompanying prospectus dated June 28, 2019, each of which has been filed with the Securities and Exchange Commission, contains a description of these matters and other important information about the Company and should be read carefully before investing.

About Saratoga Investment Corp.

Saratoga Investment Corp. is a specialty finance company that provides customized financing solutions to U.S. middle-market businesses. The Company invests primarily in senior and unitranche leveraged loans and mezzanine debt, and, to a lesser extent, equity to provide financing for change of ownership transactions, strategic acquisitions, recapitalizations and growth initiatives in partnership with business owners, management teams and financial sponsors.  Saratoga Investment Corp.’s objective is to create 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 externally-managed by Saratoga Investment Advisors, LLC, an SEC-registered investment advisor focusing on credit-driven strategies.  Saratoga Investment Corp. owns two SBIC-licensed subsidiaries and manages a $500 million collateralized loan obligation (“CLO”) fund.  It also owns 100% of the Class F-R-2, G-R-2 and subordinated notes of the CLO.  The Company’s diverse funding sources, combined with a permanent capital base, enable Saratoga Investment Corp. to provide a broad range of financing solutions.

Forward Looking Statements

Statements included herein contain certain “forward-looking statements” which relate to future events or our future performance or financial condition. Forward-looking statements can be identified by the use of forward looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including but not limited to the impact of the COVID-19 pandemic and the pandemic's impact on the U.S. and global economy, as well as those described from time to time in our filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made. Saratoga Investment Corp. undertakes no duty to update any forward-looking statements made herein, whether as a result of new information, future developments or otherwise, except as required by law.

Henri Steenkamp
Saratoga Investment Corp.
212-906-7800

FAQ

What are the details of Saratoga Investment Corp's public offering?

Saratoga Investment Corp. announced a $37.5 million public offering of 7.25% unsecured notes due 2025, with a close date of June 24, 2020.

When will the interest on the notes be paid?

Interest on the notes will be paid quarterly, beginning on August 31, 2020.

What is the purpose of the funds raised from the offering?

The proceeds will be used for investing in middle-market companies and for general corporate purposes.

What credit rating did the notes receive?

The notes received an investment grade private rating of 'BBB' from Egan-Jones Ratings Company.

Where will the notes be listed?

The notes are expected to be listed and traded on the New York Stock Exchange under the symbol 'SAC'.