Saratoga Investment Corp. Issues $23.09M Additional 8.00% Notes Due 2031

What Happened

• Saratoga Investment Corp. announced an underwriting agreement dated September 23, 2026 and closed the offering on September 24, 2026 for an additional $23,092,350 in aggregate principal amount of its 8.00% Notes due 2031 (inclusive of the underwriters’ overallotment). The New Notes were issued under the existing indenture and are fungible with the previously issued notes (same CUSIP), bringing total outstanding principal of these notes to $120,842,350.
• The Notes bear interest at 8.00% per year, payable quarterly (Feb 28, May 31, Aug 31, Nov 30) beginning Nov 30, 2026, mature on Aug 31, 2031, and may be redeemed by the company in whole or in part at par on or after Aug 26, 2028. Saratoga intends to use net proceeds to repay part of its special purpose vehicle financing under the Valley National Bank facility.

Key Details

• Offering size (inclusive of overallotment): $23,092,350; closing date: Sept 24, 2026.
• Net proceeds to Saratoga: approximately $22,519,659.72 (public offering price 99.6%), after underwriting discount of $480,320.88 and estimated offering expenses of ~$150,000.
• Total outstanding after issuance: $120,842,350 in aggregate principal of 8.00% Notes due 2031.
• Notes rank as unsecured, pari passu with other unsecured, unsubordinated obligations of the company and are structurally subordinated to subsidiaries’ debt (including specified financing facilities and SBA-guaranteed debentures).

Why It Matters

• This transaction increases Saratoga’s outstanding unsecured debt by $23.09M and will raise quarterly interest obligations at an 8.00% coupon, which investors should factor into interest expense and leverage metrics.
• Proceeds are earmarked to pay down part of a special-purpose vehicle financing (Valley Credit Facility), which may reduce that specific liability but does not change the Notes’ unsecured status or subordination relative to secured or subsidiary debt.
• The Notes’ callable feature (par on/after Aug 26, 2028) gives the company flexibility to refinance if market conditions improve. Covenants in the indenture include certain reporting and Investment Company Act–related obligations; the full indenture and underwriting agreement govern holders’ rights and are filed as exhibits.