Saratoga Investment Corp. Announces New $85 Million Credit Facility with Valley National Bank

Core Viewpoint - Saratoga Investment Corp. has secured a new $85 million senior secured revolving credit facility with Valley National Bank, replacing its previous $65 million facility, enhancing borrowing capacity and extending maturity while reducing costs [1][2][4]. Financing Details - The new Valley Facility increases borrowing capacity by $20 million, raising it to $85 million from the previous $65 million [2][5]. - The maturity of the Valley Facility is extended to November 2028, compared to the January 2026 maturity of the Encina Facility [2][5]. - The applicable margin under the Valley Facility is reduced to 2.85% per annum, a decrease of approximately 150 basis points from the previous all-in rate of 4.35% [5]. Asset and Funding Flexibility - The Valley Facility expands the definition of eligible assets for borrowing base calculations to include additional debt investments, enhancing financing flexibility [2][5]. - At closing, approximately $32.5 million of the total $85 million will be drawn, consistent with the outstanding balance under the previous facility, leaving $52.5 million available for incremental funding [3][5]. - The minimum funding requirement under the Valley Facility is set at the greater of $25 million or 38% of the facility amount, compared to a minimum of $32.5 million for the Encina Facility [5]. Management Commentary - The Chairman and CEO of Saratoga Investment expressed satisfaction with the new facility, highlighting its role in enhancing financing flexibility and lowering capital costs, reflecting strong portfolio performance and lending relationships [4]. - The CFO noted that this financing represents a significant step in capital optimization efforts, allowing for a broader range of eligible assets and improved terms [4]. Company Overview - Saratoga Investment Corp. is a specialty finance company focused on providing customized financing solutions to U.S. middle-market businesses, primarily investing in senior and unitranche leveraged loans and mezzanine debt [6]. - The company aims to generate attractive risk-adjusted returns through current income and long-term capital appreciation from its investments [6]. - Saratoga Investment is regulated as a business development company and manages a $650 million collateralized loan obligation fund, among other financial activities [6].