Saratoga Investment Corp. Q2 2027 Earnings Recap

Saratoga shares fell 5.3% after earnings, with the likely disappointment being a $25.9 million decline in NAV, driven partly by markdowns in three credits, alongside higher interest costs from refinancing. Adjusted NII slipped to $0.46 per share from $0.47, while management described the credit environment as competitive and uncertain.

Key Takeaways

• NAV declined by $25.9 million; management attributed $0.82 per share to performance in three credits and $0.30 per share to dividends exceeding NII, partly offset by $0.09 per share of accretion from share repurchases.
• Portfolio markdowns totaled $14.4 million, including $13.1 million in Madison Logic, Exigo and Chronus; Zollege contributed $4.5 million of unrealized appreciation.
• Adjusted NII was $0.46 per share, down from $0.47 the prior quarter. Higher interest expense from refinancing partly offset income from portfolio growth.
• Originations were $76.1 million against $39 million of repayments, for $37.1 million of net positive originations. AUM grew 2.1% to a record $1.15 billion.
• Saratoga reported zero nonaccruals following the resolution of its remaining nonaccrual investments; its core non-CLO portfolio was 1.6% below cost and the total portfolio was 4.9% below cost.