Saratoga Investment reports ‘strong’ liquidity, will cut debt further

By Devika Patel

Knoxville, Tenn., July 11 – Saratoga Investment Corp. management reported that the company has a decent liquidity that is improving.

The company plans to use proceeds from a recently launched equity sale to cut debt further.

“Our base of liquidity remains strong and continues to improve,” chairman and chief executive officer Chris Oberbeck said on the company’s first quarter ended May 31 earnings conference call on Wednesday.

The company’s top financial executive reiterated Saratoga Investment’s good liquidity and praised the company’s debt structure.

“We remain very pleased with our liquidity position, especially taking into account the overall conservative nature of our balance sheet and the fact that all our debt is long-term in nature, actually all five years plus,” chief financial officer Henri Steenkamp said on the call.

“For the most part, we have also primarily fixed our interest cost in this rising rate environment with all our borrowings, except our Madison facility, being fixed-rate,” Steenkamp said.

The company plans to reduce its borrowings further.

Saratoga will use a portion of the $27.2 million in net proceeds from a public offering of 1.15 million shares that priced Wednesday at $25 per share to reduce its outstanding borrowings, Oberbeck said.

As of May 31, 2018, Saratoga Investment had no outstanding borrowings under its $45 million senior secured revolving credit facility with Madison Capital Funding LLC and $12.3 million additional borrowing capacity at its SBIC subsidiary.

The company had $13.7 million of cash and cash equivalents at the end of the first quarter.

Saratoga is a New York-based specialty finance company.

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