Saratoga Investment Corp.
GSC INVESTMENT CORP. (Form: 8-K, Received: 07/15/2008 13:07:45)



Pursuant To Section 13 Or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 14, 2008
GSC Investment Corp.
(Exact name of registrant
as specified in charter)
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
888 Seventh Ave, New York, NY 10019
(Address of principal executive offices)
Registrant’s telephone number, including area code: (212) 884-6200
(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))

Item 2.02      Results of Operations and Financial Condition.

On July 14, 2008, we issued a press release announcing our financial results for the first quarter ended May 31, 2008. A copy of the press release, together with the related financial schedules, are attached hereto as Exhibit 99.1, the text of which are incorporated by reference herein.  This press release, together with the related financial schedules, are not to be deemed “filed” for purposes of Section 18 of the Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing, or to form a part of our public disclosure in the United States or otherwise.

Item 9.01      Financial Statements and Exhibits.

  Exhibit No. Description
  99.1 Press Release dated July 14, 2008


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.
GSC Investment Corp.
July 15, 2008
/s/ David L. Goret
David L. Goret
Vice President and Secretary

  Exhibit 99.1
Investor Contacts :    Carl J. Crosetto
GSC Group
Michael H. Yip
GSC Group

GSC Investment Corp. Announces First Quarter 2009 Financial Results

NEW YORK, July 14, 2008 – GSC Investment Corp. (NYSE:GNV), a business development company, today announced results for the first quarter ended May 31, 2008.

First Quarter 2009 Highlights
Net investment income of $3.2 million or $0.39 per share
Declared regular dividend of $0.39 per share
Net asset value of $11.75 per share
Completed investing GSC Investment Corp. CLO 2007, Ltd. (“GSCIC CLO”), a $400 million collateralized loan obligation fund managed by the Company
No non-performing or delinquent investments during the quarter
Repayment of single largest corporate exposure, SILLC Holdings, LLC (“Strategic Industries”) second lien term loan, generated $23 million of deployable cash, reversed $2.6 million unrealized loss and generated $0.2 million realized gain

Operating Results
For the quarter ended May 31, 2008, GSC Investment Corp. reported   net earnings of $2.8 million or $0.34 per share.  Net investment income was $3.2 million or $0.39 per share for the   quarter.   Net asset value was $11.75 per share as of May 31, 2008.
“We are pleased with the steps taken to diversify our investment portfolio during the quarter.  Our investment strategy of pursuing investments senior in the capital structure gives us a layer of protection in the current credit environment.  We expect our dividend to be supported by the net investment income generated by our investment portfolio,” said CEO Thomas V. Inglesby.

Portfolio and Investment Activity
A s of   May 31 , 200 8 , t he value of the   C ompany s portfolio was $ 1 56.4 million.   The C ompany had 4 7 investments in 3 9   portfolio companies with a n aver age investment size of $ 3. 3 million and a weighted average maturity of 3.8 years.   The average investment in each portfolio compan y was   $ 4. 0 million.   The overall portfolio composition consisted of 1 7.8 % first lien term loans, 3 1 .1 % second lien term loans, 18 .3 % senior secured notes, 1 3. 9 % unsecured notes , 1 8.6 % subordinated note s of GSCIC CLO and   0. 3 % equity/limited partnership inte rests.
During the first quarter, no portfolio investment was non-performing or delinquent on any payment obligation or was being accounted for on a non-accrual basis.  During the quarter two investments were added to the Company’s watchlist, bringing the total to four watchlist investments constituting 11% of the Company’s investment portfolio.
During the   first quarter , GSC Investment Corp. made 11 investments in an aggregate principal amount of $ 19.3  million  and had   $ 34.5  million in aggregate principal am ount of exits and repayments ,  resulting in $ 15.2  million in net exits and repayments  by aggregate principal amount .   The most significant realization  during this period was the repayment of the Strategic Industries   s econd l ien t erm l oan .  As of the end of the quarter , no corporate debt investment account s  for more than 10% of the Company s investment portfolio .   T he proceeds from the exits and repayment are expected to be reinvested in a number of new investments during the second quarter of fiscal year 200 9  and i n the interim were used to pay down the Company s   r evolving  credit   f acility.
With the repayment of Strategic Industries, we have dramatically reduced our exposure to the automotive industry ,” said Mr. Inglesby .   We expect to reinvest the proceed s in attractive risk-adjusted investment opportunities   which will further diversify and enhance our portfolio .”
During the quarter, the Company completed investing GSC IC CLO .   As of May 31, 2008, GSCIC CLO had assets of $41 4.3 million consisting of predomi nantly senior secured first lien loans.   The Company is entitled to management fees of 0.50% of the outstanding principal amount of GSCIC CLO s assets and owns its entire $30 million subordinated note tranche, which receives all residual cash flows.   No in vestment in the GSCIC CLO portfolio was in payment default or delinquent.
We are pleased to have fully invested the CLO .   We were able to purchase assets at prices lower than we had originally modeled and expect the CLO to be accretive to the Company s ea rnings.   We expect to realize the full income effects from the   CLO during the third quarter of our fiscal year ,” said Mr. Inglesby.
A s of May 31 , 200 8 , the weighted average current yield on the C ompany s first lien term loans, second lien term loans, senio r secured notes , unsecured notes and the GSCIC CLO   subordinated note s were 7.7 %, 10.1 %, 11.5 % , 12.2 % and 8. 4 % , respectively , which results in   a n aggregate weighted average current yield of   10. 0 %.

As of May 31 , 2008 , 33 .6 % , or $ 5 2.5 million , of the Comp an y s interest-bearing portfolio was fixed rate debt with a weighted average current coupon of 11.7 % and 47.6 % , or $ 74.4 million , of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 6. 1 %.
Liquidity and Capital Resources
As of May 31, 2008, the Company had borrowed an aggregate of $60.7 million under its revolving credit facility and had $39.3 million of undrawn commitments remaining.  The Company’s asset coverage ratio as of the same date was 261%.  The decline in the Company’s leverage from the prior quarter was due primarily to the pay down of the revolving credit facility with the Strategic Industries repayment.  The Company expects to draw on the revolving credit facility during the second quarter of fiscal year 2009 to make additional investments.


On May 22, 2008, GSC Investment Corp. declared a first quarter dividend of $0.39 per share payable on June 13, 2008, to common shareholders of record on May 30, 2008.
2009 First Quarter Conference Call/Webcast Information
When: Tues day, July 15 , 2008, 10:00 a.m. Eastern Time (ET)
Call:   Interested parties may participate by dialing (877) 440-5788 (U.S. and Canada) or (719) 325-4864 (outside U.S. and Canada).
A replay of the call will be available from 1:00 p.m. ET on Tuesday, July 15, 2008 through midnight Tuesday, July 29, 2008 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (outside U.S. and Canada), passcode for both replay numbers: 4801565.
Webcast: Interested parties may also access a simultaneous webcast of the call by going to . A replay of the webcast will be available from 1:00 p.m. ET on Tuesday, July 15, 2008 through midnight Tuesday, August 5, 2008.

About GSC Investment Corp.
GSC Investment Corp. is a specialty finance company that invests primarily in leveraged loans and mezzanine debt issued by U.S. middle-market companies, high yield bonds and collateralized loan obligations. It has elected to be treated as a business development company under the Investment Company Act of 1940. The Company may also opportunistically invest in distressed debt, debt issued by non-middle market companies, and equity securities issued by middle and non-middle market companies. The Company draws upon the support and investment advice of its external manager, GSC Group, an alternative asset investment manager that focuses on complex, credit-driven strategies.

GSC Investment Corp. is traded on the New York Stock Exchange under the symbol “GNV.”
GSC Investment Corp.’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available on its website at
Forward Looking Statements
Information provided in this press release, including valuation of certain of our investments, may contain statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking statements.  These forward-looking statements generally relate to GSC Investment Corp.’s plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends.  Actual future results may differ materially from those projected as a result of certain risks and uncertainties.  For a discussion of such risks and uncertainties, see “Note About Forward-Looking Statements” included in the Company’s 10-Q which has been filed with the U.S. Securities and Exchange Commission.  These forward-looking statements are made only as of the date hereof, and GSC Investment Corp. undertakes no obligation to update or revise the forward-looking statements, whether as a result of the new information, future events or otherwise.

GSC Investment Corp.
Consolidated Balance Sheets
As of
May 31, 2008
February 29, 2008
Investments at fair value
Non-control/non-affiliate investments (amortized cost of $146,510,329 and $162,888,724, respectively)
  $ 127,162,754     $ 143,745,269  
Control investments (amortized cost of $30,000,000 and $30,000,000, respectively)
    29,194,602       29,075,299  
Affiliate investments (amortized cost of $0 and $0, respectively)
    16,233       16,233  
Total investments at fair value (amortized cost of $176,510,329 and $192,888,724, respectively)
    156,373,589       172,836,801  
  Cash and cash equivalents
    1,963,407       1,072,641  
Cash and cash equivalents, securitization accounts
    10,120,045       14,580,973  
Outstanding interest rate cap at fair value (cost of $131,000 and $131,000, respectively)
    64,735       76,734  
Interest receivable
    3,710,453       2,355,122  
Due from manager
    44,567       940,903  
Management fee receivable
    738,653       215,914  
Other assets
    89,508       39,349  
Receivable from unsettled trades
    493,125       -  
Deferred credit facility financing costs, net
    678,784       723,231  
Total assets
  $ 174,276,866     $ 192,841,668  
Revolving credit facility
  $ 60,650,000     $ 78,450,000  
Payable for unsettled trades
    10,996,930       11,329,150  
Dividend payable
    3,233,640       3,233,640  
Management and incentive fees payable
    1,088,606       943,061  
Accounts payable and accrued expenses
    586,418       713,422  
Interest and credit facility fees payable
    245,388       292,307  
Due to manager
    29,236       11,048  
Total liabilities
  $ 76,830,218     $ 94,972,628  
Common stock, par value $.0001 per share, 100,000,000 common shares
authorized, 8,291,384 and 8,291,384 common shares issued and outstanding, respectively
    829       829  
Capital in excess of par value
    116,218,966       116,218,966  
Accumulated undistributed net investment income
    417,409       455,576  
Accumulated undistributed net realized gain from investments and derivatives
    1,012,448       1,299,858  
Net unrealized depreciation on investments and derivatives
    (20,203,004 )     (20,106,189 )
Total stockholders' equity
    97,446,648       97,869,040  
Total liabilities and stockholders' equity
  $ 174,276,866     $ 192,841,668  
  $ 11.75     $ 11.80  

GSC Investment Corp.
Consolidated Statement of Operations
For the three months ended May 31, 2008
For the three months ended May 31, 2007
Interest from investments
Non-Control/Non-Affiliate investments
  $ 4,459,124     $ 3,680,845  
Control investments
    635,386       -  
     Total interest income
    5,094,510       3,680,845  
Interest from cash and cash equivalents
    66,689       21,051  
Management fee income
    522,739       383,562  
Other income
    31,423       16,603  
Total investment income
    5,715,361       4,102,061  
Interest and credit facility financing expenses
    833,198       720,765  
Base management fees
    748,499       360,488  
Professional fees
    345,459       542,616  
Administrator expenses
    248,398       -  
Incentive management fees
    340,107       359,368  
    167,486       118,041  
Directors fees
    66,609       96,090  
General & administrative
    65,037       45,692  
Other expense
    3,208       -  
Cost of acquiring management contract
    -       144,000  
Organizational expense
    -       22,868  
Expenses before manager expense waver and reimbursement
    2,818,001       2,409,928  
Expense waver and reimbursement
    (298,113 )     (265,766 )
Total expenses net of expense waver and reimbursement
    2,519,888       2,144,162  
    3,195,473       1,957,899  
Net realized gain/(loss) from investments
    (287,410 )     1,021,068  
Net unrealized appreciation/(depreciation) on investments
    (84,817 )     750,801  
Net unrealized depreciation on derivatives
    (11,998 )     (50,020 )
Net gain/(loss) on investments
    (384,225 )     1,721,849  
  $ 2,811,248     $ 3,679,748  
  $ 0.34     $ 0.59  
    8,291,384       6,218,763