NEW YORK, May 18, 2017 /PRNewswire/ -- Saratoga Investment
Corp. (NYSE: SAR) ("Saratoga Investment" or "the Company"), a
business development company, today announced successfully
extending the commitment period and maturity date of its
$45 million revolving credit facility
with Madison Capital by three years, as well as improving certain
other terms.
In addition to (1) extending the commitment termination date
from September 17, 2017 to
September 17, 2020, (2) extending the
maturity date from September 17, 2022
to September 17, 2025, and (3)
keeping the rate unchanged at LIBOR plus 4.75%, the following
additional changes were made, among other things: (i) reduction of
the floor on LIBOR borrowings from 1.25% to 1.00%, and (ii)
reduction of commitment fee from 0.75% to 0.50% if utilization is
greater than 50%.
"Extending the commitment period and maturity of our revolver
with Madison Capital by three years with improved terms while
maintaining the same flexibility, is the most recent step in our
efforts to create a diversified and long-term capital structure and
liquidity base to support our overall growth strategy," said
Christian L. Oberbeck, Chairman and
Chief Executive Officer of Saratoga Investment. "In conjunction
with our SBA debentures and publicly-traded baby bonds, we now
benefit from a fixed–rate capital structure with maturity periods
of six years or more, positioning us well for potentially higher
interest rates. In fact, because more than 80% of our investments
are at floating rates and almost all of them through their interest
rate floors, we stand to be beneficiaries of this rising rate
environment."
In addition to extending the Madison Capital facility, Saratoga
Investment has made substantial progress strengthening its capital
structure and available liquidity. On December 21, 2016, the Company issued
$74.5 million in aggregate principal
amount of our 6.75% fixed-rate notes due 2023 (the "2023 Notes")
for net proceeds of $71.7 million.
Interest on the 2023 Notes is paid quarterly in arrears on
March 15, June
15, September 15 and
December 15, at a rate of 6.75% per
year, beginning March 30, 2017. The
2023 Notes mature on December 30,
2023, and commencing December 21,
2019, may be redeemed in whole or in part at any time or
from time to time at our option. The net proceeds from the offering
were used to repay all $61.8 million
of the outstanding indebtedness under the 2020 Notes, and for
general corporate purposes. The 2023 Notes are listed on the NYSE
under the trading symbol "SAB" with a par value of $25.00 per share.
On March 16, 2017, Saratoga
Investment entered into an equity distribution agreement with
Ladenburg Thalmann & Co. Inc., through which it may offer for
sale, from time to time, up to $30.0
million of its common stock through an ATM offering. As of
May 18, 2017, the Company sold 60,679
shares at an average price of $22.49
for aggregate proceeds net of transaction costs of $1.3 million.
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 mezzanine debt,
senior and unitranche leveraged loans 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 an SBIC-licensed subsidiary and manages a $300 million collateralized loan obligation
("CLO") fund. It also owns 100% of the subordinated notes of
the CLO. These diverse funding sources, combined with a
permanent capital base, enable Saratoga Investment Corp. to provide
a broad range of financing solutions.
Forward Looking Statements
This press release contains certain forward-looking statements.
These forward-looking statements are subject to risks and
uncertainties and other factors enumerated in this press release
and the filings Saratoga Investment Corp. makes with the SEC.
Saratoga Investment Corp. undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
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SOURCE Saratoga Investment Corp.