UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of
the Securities Exchange Act of 1934
Date
of report (Date of earliest event reported): April 27, 2022
SARATOGA
INVESTMENT CORP.
(Exact
Name of Registrant as Specified in Charter)
Maryland |
|
814-00732 |
|
20-8700615 |
(State or Other Jurisdiction
of Incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
535 Madison Avenue
New York, New York |
|
10022 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s
telephone number, including area code (212) 906-7800
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading
symbol(s) |
|
Name of each exchange
on which registered |
Common Stock, par value $0.001 per share |
|
SAR |
|
New York Stock Exchange |
7.25% Notes due 2025 |
|
SAK |
|
New York Stock Exchange |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
1.01.
Entry into a Material Definitive Agreement.
On
April 27, 2022, the Company and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association)
(the “Trustee”), entered into a Tenth Supplemental Indenture (the “Tenth Supplemental Indenture”) to the indenture,
dated May 10, 2013, between the Company and the Trustee (the “Base Indenture”; and together with the Tenth Supplemental Indenture,
the “Indenture”). The Tenth Supplemental Indenture relates to the Company’s issuance and sale of $87,500,000 aggregate
principal amount of the Company’s 6.00% Notes due 2027 (the “Notes” and the issuance and sale of the Notes, the “Offering”).
The
Notes bear interest at a rate of 6.00% per year. The Notes will mature on April 30,
2027. The Company will pay interest on the Notes on February 28, May 31, August 31 and
November 30 each year, beginning on August 31, 2022. The Company may redeem the Notes in
whole or in part at any time, or from time to time on or after April 27, 2024, at the redemption
price of par, plus accrued interest.
The
Company intends to use the net proceeds from the Offering to make investments in middle-market companies (including investments
made through Saratoga Investment Corp. SBIC LP and Saratoga Investment Corp. SBIC II LP, each a wholly owned subsidiary of the Company
that is licensed as a small business investment company) in accordance with its investment objective and strategies and for general corporate
purposes. The Company may use the net proceeds from this offering to redeem all of the outstanding 7.25% fixed-rate notes due 2025, which
are callable by the Company commencing June 24, 2022.
The
Notes are the direct unsecured obligations of the Company and rank pari passu with all existing
and future unsubordinated unsecured indebtedness issued by the Company, senior to any of the Company’s future indebtedness
that expressly provides it is subordinated to the Notes, effectively subordinated to all of the existing and future secured indebtedness
issued by the Company (including indebtedness that is initially unsecured in respect of which the Company subsequently grants security),
to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under the Company’s
senior secured revolving credit facility, as amended, and structurally subordinated to all existing and future indebtedness and other
obligations of any of the Company’s subsidiaries.
The
Indenture contains certain covenants, including certain covenants requiring the Company to comply with Section 18(a)(1)(A) as modified
by Section 61(a)(2) of the Investment Company Act of 1940, as amended (the “1940 Act”), or any successor provisions, whether
or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief
granted to the Company by the U.S. Securities and Exchange Commission (the “SEC”); to agree that for the period of time during
which the Notes are outstanding, the Company will not declare any dividend (except a dividend payable in our stock), or declare any other
distribution, upon a class of our capital stock, or purchase any such capital stock, unless, in every such case, at the time of the declaration
of any such dividend or distribution, or at the time of any such purchase, the Company has an asset coverage (as defined in the 1940
Act) of at least the threshold specified in Section 18(a)(1)(B) as modified by such provisions of Section 61(a)(2) of the 1940 Act as
may be applicable to the Company from time to time or any successor provisions thereto of the 1940 Act, as such obligation may be amended
or superseded, after deducting the amount of such dividend, distribution or purchase price, as the case may be, and in each case giving
effect to (i) any exemptive relief granted to the Company by the SEC, and (ii) any SEC no-action relief granted by the SEC to another
business development company (“BDC”) (or to the Company if it determines to seek such similar no-action or other relief)
permitting the BDC to declare any cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified
by such provisions of Section 61(a)(2) of the 1940 Act as may be applicable to the Company from time to time; and to provide financial
information to the holders of the Notes and the Trustee if the Company should no longer be subject to the reporting requirements under
the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described
in the Indenture.
The
Notes were offered and sold in an offering registered under the Securities Act of 1933, as amended, pursuant to the Registration Statement
on Form N-2 (File No. 333-256366), the prospectus supplement dated April 20, 2022, and the pricing term sheet filed with the SEC
on April 19, 2022. The transaction closed on April 27, 2022. The net proceeds to the Company were approximately $85,515,625, based on
a public offering price of 100% of par, after deducting underwriting discounts and commissions of $2,734,375 and the estimated offering
expenses of approximately $250,000 payable by the Company.
The
foregoing descriptions of the Tenth Supplemental Indenture and the Notes do not purport to be complete and are qualified in their entirety
by reference to the full text of the Tenth Supplemental Indenture and the form of global note representing the Notes, respectively, each
filed as exhibits hereto and incorporated by reference herein.
2.03.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
information required by Item 2.03 contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
SARATOGA
INVESTMENT CORP. |
|
|
|
Date: April
27, 2022 |
By: |
/s/
Henri J. Steenkamp |
|
Name: |
Henri
J. Steenkamp |
|
Title: |
Chief
Financial Officer and Secretary |
3
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