Saratoga Investment Corp. Issues $85M 8.00% Notes Due 2031

What Happened

• Saratoga Investment Corp. (SAR) announced on August 26, 2026 that it closed an offering of $85.0 million aggregate principal amount of 8.00% Notes due August 31, 2031 under an Eighteenth Supplemental Indenture with U.S. Bank Trust Company, N.A. The Notes pay interest at 8.00% annually, payable quarterly beginning November 30, 2026.
• The transaction closed August 26, 2026. Net proceeds were approximately $82,043,750 (public offering at 100% of par less a $2,656,250 underwriting discount and ~ $300,000 estimated offering expenses). Saratoga intends to use the proceeds and available cash to redeem in full its outstanding 6.00% notes due 2027.

Key Details

• Offering size: $85.0 million principal; net proceeds ≈ $82,043,750.
• Coupon and payments: 8.00% annual interest, paid quarterly (Feb 28, May 31, Aug 31, Nov 30), first payment 11/30/2026.
• Maturity and call: Matures 8/31/2031; callable by the company, in whole or part, on or after 8/26/2028 at par plus accrued interest.
• Security and ranking: Unsecured, pari passu with other unsecured, unsubordinated indebtedness; effectively subordinated to secured debt and structurally subordinated to subsidiaries’ obligations (including specified SPV financing facilities and SBA-guaranteed debentures).
• Covenants: Indenture includes covenants tied to certain provisions of the Investment Company Act of 1940 and requires delivering financial information to note holders if Saratoga is no longer an Exchange Act reporting company (subject to specified limitations and exceptions).

Why It Matters

• This issuance changes Saratoga’s debt profile by adding a longer‑dated, higher‑coupon unsecured note due 2031 and is intended to refinance the company’s nearer‑term 6.00% notes due 2027. For investors, key implications include a shift in interest expense (new 8.00% coupon) and an extended maturity profile. The notes’ unsecured status and structural subordination to subsidiaries’ obligations affect creditors’ recovery priority compared with secured or subsidiary-level debt.