UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the Quarterly Period Ended November 30, 2019
☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission File No. 814-00732
SARATOGA INVESTMENT CORP.
(Exact name of Registrant as specified in its charter)
Maryland | 20-8700615 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
535 Madison Avenue
New York, New York 10022
(Address of principal executive offices)
(212) 906-7800
(Registrants telephone number, including area code)
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 | The New York Stock Exchange | ||
6.75% Notes due 2023 | SAB | The New York Stock Exchange | ||
6.25% Notes due 2025 | SAF | The New York Stock Exchange |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
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 ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The number of outstanding common shares of the registrant as of January 7, 2020 was 11,181,863.
2
Item 1. Consolidated Financial Statements
Consolidated Statements of Assets and Liabilities
November 30, 2019 | February 28, 2019 | |||||||
(unaudited) | ||||||||
ASSETS |
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Investments at fair value |
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Non-control/Non-affiliate investments (amortized cost of $377,733,313 and $307,136,188, respectively) |
$ | 375,544,979 | $ | 306,511,427 | ||||
Affiliate investments (amortized cost of $23,949,601 and $18,514,716, respectively) |
17,757,919 | 11,463,081 | ||||||
Control investments (amortized cost of $80,333,567 and $76,265,189, respectively) |
93,728,061 | 84,045,212 | ||||||
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Total investments at fair value (amortized cost of $482,016,481 and $401,916,093, respectively) |
487,030,959 | 402,019,720 | ||||||
Cash and cash equivalents |
51,646,844 | 30,799,068 | ||||||
Cash and cash equivalents, reserve accounts |
29,465,785 | 31,295,326 | ||||||
Interest receivable (net of reserve of $1,322,308 and $647,210, respectively) |
4,755,846 | 3,746,604 | ||||||
Due from affiliate (See Note 6) |
| 1,673,747 | ||||||
Management and incentive fee receivable |
286,720 | 542,094 | ||||||
Other assets |
563,991 | 595,543 | ||||||
Receivable for shares sold |
1,157,493 | | ||||||
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Total assets |
$ | 574,907,638 | $ | 470,672,102 | ||||
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LIABILITIES |
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Revolving credit facility |
$ | | $ | | ||||
Deferred debt financing costs, revolving credit facility |
(535,641 | ) | (605,189 | ) | ||||
SBA debentures payable |
150,000,000 | 150,000,000 | ||||||
Deferred debt financing costs, SBA debentures payable |
(2,710,922 | ) | (2,396,931 | ) | ||||
2023 Notes payable |
74,450,500 | 74,450,500 | ||||||
Deferred debt financing costs, 2023 notes payable |
(1,620,699 | ) | (1,919,620 | ) | ||||
2025 Notes payable |
60,000,000 | 60,000,000 | ||||||
Deferred debt financing costs, 2025 notes payable |
(2,139,398 | ) | (2,377,551 | ) | ||||
Base management and incentive fees payable |
10,475,895 | 6,684,785 | ||||||
Deferred tax liability |
1,061,640 | 739,716 | ||||||
Accounts payable and accrued expenses |
1,453,345 | 1,615,443 | ||||||
Interest and debt fees payable |
1,910,397 | 3,224,671 | ||||||
Directors fees payable |
1,500 | 62,000 | ||||||
Due to manager |
380,671 | 319,091 | ||||||
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Total liabilities |
$ | 292,727,288 | $ | 289,796,915 | ||||
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Commitments and contingencies (See Note 8) |
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NET ASSETS |
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Common stock, par value $.001, 100,000,000 common shares authorized, 11,154,998 and 7,657,156 common shares issued and outstanding, respectively |
$ | 11,155 | $ | 7,657 | ||||
Capital in excess of par value |
289,744,224 | 203,552,800 | ||||||
Total distributable earnings (loss) |
(7,575,029 | ) | (22,685,270 | ) | ||||
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Total net assets |
282,180,350 | 180,875,187 | ||||||
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Total liabilities and net assets |
$ | 574,907,638 | $ | 470,672,102 | ||||
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NET ASSET VALUE PER SHARE |
$ | 25.30 | $ | 23.62 | ||||
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See accompanying notes to consolidated financial statements.
3
Consolidated Statements of Operations
(unaudited)
For the three months ended | For the nine months ended | |||||||||||||||
November 30, 2019 | November 30, 2018 | November 30, 2019 | November 30, 2018 | |||||||||||||
INVESTMENT INCOME |
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Interest from investments |
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Interest income: |
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Non-control/Non-affiliate investments |
$ | 9,749,294 | $ | 9,248,664 | $ | 26,862,643 | $ | 24,701,303 | ||||||||
Affiliate investments |
356,958 | 239,781 | 873,816 | 720,738 | ||||||||||||
Control investments |
1,300,923 | 941,942 | 4,627,395 | 3,340,180 | ||||||||||||
Payment-in-kind interest income: |
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Non-control/Non-affiliate investments |
198,984 | 260,440 | 530,728 | 621,462 | ||||||||||||
Affiliate investments |
42,397 | 41,269 | 123,812 | 110,898 | ||||||||||||
Control investments |
1,250,824 | 1,112,135 | 3,226,060 | 2,271,359 | ||||||||||||
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Total interest from investments |
12,899,380 | 11,844,231 | 36,244,454 | 31,765,940 | ||||||||||||
Interest from cash and cash equivalents |
119,539 | 13,657 | 316,691 | 41,405 | ||||||||||||
Management fee income |
629,671 | 380,765 | 1,888,932 | 1,129,921 | ||||||||||||
Incentive fee income |
| 147,602 | | 493,846 | ||||||||||||
Other income |
547,165 | 446,758 | 2,385,075 | 1,292,693 | ||||||||||||
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Total investment income |
14,195,755 | 12,833,013 | 40,835,152 | 34,723,805 | ||||||||||||
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OPERATING EXPENSES |
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Interest and debt financing expenses |
3,896,968 | 3,613,531 | 11,628,266 | 9,202,737 | ||||||||||||
Base management fees |
2,146,214 | 1,849,220 | 5,955,623 | 5,027,341 | ||||||||||||
Incentive management fees |
3,102,139 | 923,651 | 7,300,794 | 2,803,784 | ||||||||||||
Professional fees |
401,010 | 407,422 | 1,181,010 | 1,418,472 | ||||||||||||
Administrator expenses |
556,250 | 500,000 | 1,575,000 | 1,395,833 | ||||||||||||
Insurance |
63,936 | 62,197 | 193,174 | 189,916 | ||||||||||||
Directors fees and expenses |
60,000 | 60,000 | 217,500 | 230,500 | ||||||||||||
General & administrative |
395,024 | 354,029 | 1,036,498 | 908,174 | ||||||||||||
Income tax benefit |
(1,001,089 | ) | (75,978 | ) | (1,464,878 | ) | (684,520 | ) | ||||||||
Excise tax credit |
| | | (270 | ) | |||||||||||
Other expense |
| | | 21,021 | ||||||||||||
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Total operating expenses |
9,620,452 | 7,694,072 | 27,622,987 | 20,512,988 | ||||||||||||
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NET INVESTMENT INCOME |
4,575,303 | 5,138,941 | 13,212,165 | 14,210,817 | ||||||||||||
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS |
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Net realized gain (loss) from investments: |
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Non-control/Non-affiliate investments |
10,739,678 | (67,164 | ) | 12,609,767 | 145,007 | |||||||||||
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Net realized gain (loss) from investments |
10,739,678 | (67,164 | ) | 12,609,767 | 145,007 | |||||||||||
Net change in unrealized appreciation (depreciation) on investments: |
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Non-control/Non-affiliate investments |
(4,322,305 | ) | (1,645,666 | ) | (1,563,573 | ) | (2,428,123 | ) | ||||||||
Affiliate investments |
(41,295 | ) | 206,064 | 859,953 | (1,125,240 | ) | ||||||||||
Control investments |
3,827,449 | 408,489 | 5,614,471 | 1,010,934 | ||||||||||||
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Net change in unrealized appreciation (depreciation) on investments |
(536,151 | ) | (1,031,113 | ) | 4,910,851 | (2,542,429 | ) | |||||||||
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments |
(1,061,608 | ) | (371,581 | ) | (1,786,801 | ) | (1,159,581 | ) | ||||||||
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Net realized and unrealized gain (loss) on investments |
9,141,919 | (1,469,858 | ) | 15,733,817 | (3,557,003 | ) | ||||||||||
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 13,717,222 | $ | 3,669,083 | $ | 28,945,982 | $ | 10,653,814 | ||||||||
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WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE |
$ | 1.37 | $ | 0.49 | $ | 3.33 | $ | 1.55 | ||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED |
10,036,086 | 7,480,134 | 8,702,190 | 6,887,544 |
See accompanying notes to consolidated financial statements.
4
Consolidated Schedule of Investments
November 30, 2019
(unaudited)
Company |
Industry |
Investment Interest Rate/ Maturity |
Original Acquisition Date |
Principal/ Number of Shares |
Cost | Fair Value (c) |
% of Net Assets |
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Non-control/Non-affiliate investments133.1% (b) |
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Apex Holdings Software Technologies, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+8.00%), 9.91% Cash, 9/21/2021 | 9/21/2016 | $ | 18,000,000 | $ | 17,943,620 | $ | 17,546,400 | 6.2 | % | |||||||||||||
Apex Holdings Software Technologies, LLC |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+8.00%), 9.91% Cash, 9/21/2021 | 10/1/2018 | $ | 1,500,000 | 1,490,899 | 1,462,200 | 0.5 | % | |||||||||||||||
Avionte Holdings, LLC (h) |
Business Services | Class A Units | 1/8/2014 | 100,000 | 100,000 | 863,098 | 0.3 | % | ||||||||||||||||
CLEO Communications Holding, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+8.00%), 9.91% Cash/2.00% PIK, 3/31/2022 | 3/31/2017 | $ | 13,722,196 | 13,696,502 | 13,722,196 | 4.9 | % | |||||||||||||||
CLEO Communications Holding, LLC |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+8.00%), 9.91% Cash/2.00% PIK, 3/31/2022 | 3/31/2017 | $ | 16,953,208 | 16,845,952 | 16,953,208 | 6.0 | % | |||||||||||||||
CoConstruct, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+7.50%), 10.00% Cash, 7/5/2024 | 7/5/2019 | $ | 4,200,000 | 4,160,120 | 4,158,000 | 1.5 | % | |||||||||||||||
CoConstruct, LLC (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+7.50%), 10.00% Cash, 7/5/2024 | 7/5/2019 | $ | | | | 0.0 | % | |||||||||||||||
Davisware, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024 | 9/6/2019 | $ | 3,000,000 | 2,970,557 | 2,970,000 | 1.0 | % | |||||||||||||||
Davisware, LLC (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+7.00%), 9.00% Cash, 7/31/2024 | 9/6/2019 | $ | | | | 0.0 | % | |||||||||||||||
Destiny Solutions Inc. (d) |
Business Services | First Lien Term Loan (3M USD LIBOR+7.25%), 9.25% Cash, 10/23/2024 | 5/16/2018 | $ | 36,000,000 | 35,666,525 | 35,640,000 | 12.6 | % | |||||||||||||||
Destiny Solutions Inc. (h), (i) |
Business Services | Limited Partner Interests | 5/16/2018 | 2,342 | 2,468,464 | 2,784,182 | 1.0 | % | ||||||||||||||||
Emily Street Enterprises, L.L.C. |
Business Services | Senior Secured Note (3M USD LIBOR+8.50%), 10.41% Cash, 1/23/2020 | 12/28/2012 | $ | 3,300,000 | 3,299,991 | 3,300,000 | 1.2 | % | |||||||||||||||
Emily Street Enterprises, L.L.C. (h) |
Business Services | Warrant Membership Interests Expires 12/28/2022 | 12/28/2012 | 49,318 | 400,000 | 485,289 | 0.2 | % | ||||||||||||||||
Erwin, Inc. (d) |
Business Services | Second Lien Term Loan (3M USD LIBOR+11.50%), 13.41% Cash/1.00% PIK, 8/28/2021 | 2/29/2016 | $ | 16,008,892 | 15,940,695 | 16,008,892 | 5.7 | % | |||||||||||||||
FMG Suite Holdings, LLC (d) |
Business Services | Second Lien Term Loan (1M USD LIBOR+8.00%), 9.70% Cash, 11/16/2023 | 5/16/2018 | $ | 23,000,000 | 22,858,846 | 23,000,000 | 8.1 | % | |||||||||||||||
GDS Holdings US, Inc. (d) |
Business Services | First Lien Term Loan (3M USD LIBOR+7.00%), 8.91% Cash, 8/23/2023 | 8/23/2018 | $ | 7,500,000 | 7,441,214 | 7,495,500 | 2.6 | % | |||||||||||||||
GDS Holdings US, Inc. (d), (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+7.00%), 8.91% Cash, 8/23/2023 | 8/23/2018 | $ | 1,000,000 | 990,384 | 999,400 | 0.4 | % | |||||||||||||||
GDS Software Holdings, LLC (h) |
Business Services | Common Stock Class A Units | 8/23/2018 | 250,000 | 250,000 | 349,092 | 0.1 | % | ||||||||||||||||
Identity Automation Systems (h) |
Business Services | Common Stock Class A Units | 8/25/2014 | 232,616 | 232,616 | 720,398 | 0.3 | % | ||||||||||||||||
Identity Automation Systems (d) |
Business Services | First Lien Term Loan (3M USD LIBOR+9.24%), 11.15% Cash, 3/31/2021 | 8/25/2014 | $ | 15,461,250 | 15,419,036 | 15,450,427 | 5.5 | % | |||||||||||||||
inMotionNow, Inc. |
Business Services | First Lien Term Loan (3M USD LIBOR+7.25), 9.75% Cash, 5/15/2024 | 5/15/2019 | $ | 12,200,000 | 12,088,502 | 12,195,120 | 4.3 | % | |||||||||||||||
inMotionNow, Inc. (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+7.25) 9.75% Cash, 5/15/2024 | 5/15/2019 | $ | | | | 0.0 | % | |||||||||||||||
Knowland Group, LLC |
Business Services | Second Lien Term Loan (3M USD LIBOR+8.00%), 10.00% Cash, 5/9/2024 | 11/9/2018 | $ | 15,000,000 | 15,000,000 | 14,914,500 | 5.3 | % | |||||||||||||||
National Waste Partners (d) |
Business Services | Second Lien Term Loan 10.00% Cash, 2/13/2022 | 2/13/2017 | $ | 9,000,000 | 8,954,732 | 8,954,100 | 3.2 | % | |||||||||||||||
Omatic Software, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+8.00%), 9.91% Cash, 5/29/2023 | 5/29/2018 | $ | 5,500,000 | 5,457,178 | 5,526,950 | 1.9 | % | |||||||||||||||
Omatic Software, LLC (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+8.00%), 9.91% Cash, 5/29/2023 | 5/29/2018 | $ | | | | 0.0 | % | |||||||||||||||
Passageways, Inc. |
Business Services | First Lien Term Loan (3M USD LIBOR+7.75%), 9.66% Cash, 7/5/2023 | 7/5/2018 | $ | 5,000,000 | 4,958,735 | 5,028,000 | 1.8 | % | |||||||||||||||
Passageways, Inc. (h) |
Business Services | Series A Preferred Stock | 7/5/2018 | 2,027,205 | 1,000,000 | 1,739,546 | 0.6 | % | ||||||||||||||||
Vector Controls Holding Co., LLC (d) |
Business Services | First Lien Term Loan 10.50% (9.00% Cash/1.50% PIK), 3/6/2022 | 3/6/2013 | $ | 8,120,756 | 8,120,103 | 8,201,964 | 2.9 | % | |||||||||||||||
Vector Controls Holding Co., LLC (h) |
Business Services | Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027 | 5/31/2015 | 343 | | 2,492,010 | 0.9 | % | ||||||||||||||||
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Total Business Services | 217,754,671 | 222,960,472 | 79.0 | % | ||||||||||||||||||||
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Targus Holdings, Inc. (h) |
Consumer Products | Common Stock | 12/31/2009 | 210,456 | 1,589,630 | 403,875 | 0.1 | % | ||||||||||||||||
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Total Consumer Products | 1,589,630 | 403,875 | 0.1 | % | ||||||||||||||||||||
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My Alarm Center, LLC (k) |
Consumer Services | Preferred Equity Class A Units 8.00% PIK | 7/14/2017 | 2,227 | 2,357,879 | | 0.0 | % | ||||||||||||||||
My Alarm Center, LLC (h) |
Consumer Services | Preferred Equity Class B Units | 7/14/2017 | 1,797 | 1,796,880 | | 0.0 | % | ||||||||||||||||
My Alarm Center, LLC (h) |
Consumer Services | Preferred Equity Class Z Units | 9/12/2018 | 676 | 655,987 | 1,997,158 | 0.7 | % | ||||||||||||||||
My Alarm Center, LLC (h) |
Consumer Services | Common Stock | 7/14/2017 | 96,224 | | | 0.0 | % | ||||||||||||||||
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Total Consumer Services | 4,810,746 | 1,997,158 | 0.7 | % | ||||||||||||||||||||
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C2 Educational Systems (d) |
Education | First Lien Term Loan (3M USD LIBOR+7.00%), 8.91% Cash, 5/31/2020 | 5/31/2017 | $ | 16,000,000 | 15,967,799 | 16,000,000 | 5.7 | % | |||||||||||||||
EMS LINQ, Inc. |
Education | First Lien Term Loan (1M USD LIBOR+8.50%), 10.20% Cash, 8/9/2024 | 8/9/2019 | $ | 14,962,500 | 14,811,797 | 14,808,386 | 5.3 | % | |||||||||||||||
Kev Software Inc. (a) |
Education | First Lien Term Loan (1M USD LIBOR+8.63%), 10.33% Cash, 9/13/2023 | 9/13/2018 | $ | 21,285,674 | 21,132,402 | 21,219,689 | 7.5 | % | |||||||||||||||
M/C Acquisition Corp., L.L.C. (h) |
Education | Class A Common Stock | 6/22/2009 | 544,761 | 30,241 | | 0.0 | % | ||||||||||||||||
M/C Acquisition Corp., L.L.C. (k) |
Education | First Lien Term Loan 1.00% Cash, 3/31/2020 | 8/10/2004 | $ | 2,315,090 | 1,189,177 | 6,260 | 0.0 | % | |||||||||||||||
Texas Teachers of Tomorrow, LLC (h), (i) |
Education | Common Stock | 12/2/2015 | 750,000 | 750,000 | 690,867 | 0.2 | % | ||||||||||||||||
Texas Teachers of Tomorrow, LLC (d) |
Education | First Lien Term Loan (3M USD LIBOR+7.25%), 9.75% Cash, 6/28/2024 | 12/2/2015 | $ | 19,710,600 | 19,523,221 | 19,704,687 | 7.0 | % | |||||||||||||||
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Total Education | 73,404,637 | 72,429,889 | 25.7 | % | ||||||||||||||||||||
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TMAC Acquisition Co., LLC (h), (k) |
Food and Beverage | Unsecured Term Loan 8.00% PIK, 9/01/2023 | 3/1/2018 | $ | 2,216,427 | 2,216,427 | 2,073,024 | 0.7 | % | |||||||||||||||
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Total Food and Beverage | 2,216,427 | 2,073,024 | 0.7 | % | ||||||||||||||||||||
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Axiom Parent Holdings, LLC (h) |
Healthcare Services | Common Stock Class A Units | 6/19/2018 | 400,000 | 400,000 | 474,071 | 0.2 | % | ||||||||||||||||
Axiom Purchaser, Inc. (d) |
Healthcare Services | First Lien Term Loan (3M USD LIBOR+6.00%), 7.91% Cash, 6/19/2023 | 6/19/2018 | $ | 10,000,000 | 9,932,342 | 9,984,000 | 3.5 | % | |||||||||||||||
Axiom Purchaser, Inc. (d), (j) |
Healthcare Services | Delayed Draw Term Loan (3M USD LIBOR+6.00%), 7.91% Cash, 6/19/2023 | 6/19/2018 | $ | 3,000,000 | 2,976,012 | 2,995,200 | 1.1 | % | |||||||||||||||
ComForCare Health Care |
Healthcare Services | First Lien Term Loan (3M USD LIBOR+7.50%), 9.41% Cash, 1/31/2022 | 1/31/2017 | $ | 15,000,000 | 14,918,932 | 14,983,500 | 5.3 | % | |||||||||||||||
HemaTerra Holding Company, LLC |
Healthcare Services | First Lien Term Loan (3M USD LIBOR+6.75%), 9.25% Cash, 4/15/2024 | 4/15/2019 | $ | 6,000,000 | 5,942,014 | 6,049,800 | 2.1 | % | |||||||||||||||
HemaTerra Holding Company, LLC (j) |
Healthcare Services | Delayed Draw Term Loan (3M USD LIBOR+6.75%), 9.25% Cash, 4/15/2024 | 4/15/2019 | $ | 10,000,000 | 9,907,821 | 10,083,000 | 3.6 | % | |||||||||||||||
TRC HemaTerra, LLC (h) |
Healthcare Services | Class D Membership Interests | 4/15/2019 | 2,000,000 | 2,000,000 | 2,000,000 | 0.7 | % | ||||||||||||||||
Ohio Medical, LLC (h) |
Healthcare Services | Common Stock | 1/15/2016 | 5,000 | 500,000 | 528,000 | 0.2 | % | ||||||||||||||||
Ohio Medical, LLC |
Healthcare Services | Senior Subordinated Note 12.00% Cash, 7/15/2021 | 1/15/2016 | $ | 7,300,000 | 7,271,152 | 7,300,000 | 2.6 | % | |||||||||||||||
PDDS Buyer, LLC |
Healthcare Services | First Lien Term Loan (3M USD LIBOR+7.00%), 9.50% Cash, 7/15/2024 | 7/15/2019 | $ | 12,000,000 | 11,884,014 | 11,880,000 | 4.2 | % | |||||||||||||||
PDDS Buyer, LLC (j) |
Healthcare Services | Delayed Draw Term Loan (3M USD LIBOR+7.00%), 9.50% Cash, 7/15/2024 | 7/15/2019 | $ | | | | 0.0 | % | |||||||||||||||
Roscoe Medical, Inc. (h) |
Healthcare Services | Common Stock | 3/26/2014 | 5,081 | 508,077 | | 0.0 | % | ||||||||||||||||
Roscoe Medical, Inc. (k) |
Healthcare Services | Second Lien Term Loan 11.25% Cash, 3/28/2021 | 3/26/2014 | $ | 4,200,000 | 4,200,000 | 1,887,060 | 0.7 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Healthcare Services | 70,440,364 | 68,164,631 | 24.2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Village Realty Holdings LLC |
Property Management | First Lien Term Loan (3M USD LIBOR+6.50%), 8.75% Cash, 10/8/2024 | 10/8/2019 | $ | 7,250,000 | 7,178,609 | 7,177,500 | 2.6 | % | |||||||||||||||
Village Realty Holdings LLC (j) |
Property Management | Delayed Draw Term Loan (3M USD LIBOR+6.50%), 8.75% Cash, 10/8/2024 | 10/8/2019 | $ | | | | 0.0 | % | |||||||||||||||
V Rental Holdings LLC (h) |
Property Management | Class A-1 Membership Units | 10/8/2019 | 116,700 | 338,229 | 338,430 | 0.1 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Property Management | 7,516,838 | 7,515,930 | 2.7 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Sub Total Non-control/Non-affiliate investments |
377,733,313 | 375,544,979 | 133.1 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Affiliate investments6.3% (b) |
||||||||||||||||||||||||
Top Gun Pressure Washing, LLC (f) |
Business Services | First Lien Term Loan (3M USD LIBOR+7.00%), 9.50% Cash, 8/12/2024 | 8/12/2019 | $ | 5,000,000 | 4,951,267 | 4,992,000 | 1.8 | % | |||||||||||||||
Top Gun Pressure Washing, LLC (f), (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+7.00%), 9.50% Cash, 8/12/2024 | 8/12/2019 | $ | | | | 0.0 | % | |||||||||||||||
TG Pressure Washing Holdings, LLC (f), (h) |
Business Services | Preferred Equity | 8//12/2019 | 350,000 | 350,000 | 350,000 | 0.1 | % | ||||||||||||||||
GreyHeller LLC (f) |
Business Services | First Lien Term Loan (3M USD LIBOR+11.00%), 12.91% Cash, 11/16/2021 | 11/17/2016 | $ | 7,000,000 | 6,967,260 | 7,000,000 | 2.5 | % | |||||||||||||||
GreyHeller LLC (f), (h) |
Business Services | Series A Preferred Units | 11/17/2016 | 850,000 | 850,000 | 2,231,673 | 0.8 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Business Services | 13,118,527 | 14,573,673 | 5.2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Elyria Foundry Company, L.L.C. (f), (h) |
Metals | Common Stock | 7/30/2010 | 60,000 | 9,685,028 | 2,038,200 | 0.7 | % | ||||||||||||||||
Elyria Foundry Company, L.L.C. (d), (f) |
Metals | Second Lien Term Loan 15.00% PIK, 8/10/2022 | 7/30/2010 | $ | 1,146,046 | 1,146,046 | 1,146,046 | 0.4 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Metals | 10,831,074 | 3,184,246 | 1.1 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Sub Total Affiliate investments |
23,949,601 | 17,757,919 | 6.3 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Control investments33.2% (b) |
||||||||||||||||||||||||
Easy Ice, LLC (g) |
Business Services | Preferred Equity 10.00% PIK | 2/3/2017 | 5,080,000 | 10,436,671 | 19,428,398 | 6.9 | % | ||||||||||||||||
Easy Ice, LLC (d), (g) |
Business Services | Second Lien Term Loan 7.03% Cash/5.97% PIK, 2/28/2023 | 3/29/2013 | $ | 23,279,165 | 23,215,894 | 23,642,320 | 8.4 | % | |||||||||||||||
Easy Ice Masters, LLC (d), (g) |
Business Services | Second Lien Term Loan 7.03% Cash/5.97% PIK, 2/28/2023 | 10/31/2018 | $ | 4,180,484 | 4,169,121 | 4,245,700 | 1.5 | % | |||||||||||||||
Netreo Holdings, LLC (g) |
Business Services | First Lien Term Loan (3M USD LIBOR +6.25%), 9.00% Cash/2.00% PIK, 7/3/2023 | 7/3/2018 | $ | 5,136,437 | 5,094,308 | 5,239,166 | 1.8 | % | |||||||||||||||
Netreo Holdings, LLC (g), (h) |
Business Services | Common Stock Class A Unit | 7/3/2018 | 3,150,000 | 3,150,000 | 6,865,992 | 2.4 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Business Services | 46,065,994 | 59,421,576 | 21.0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. (a), (e), (g) |
Structured Finance Securities | Other/Structured Finance Securities 16.28%, 1/20/2030 | 1/22/2008 | $ | 69,500,000 | 24,267,573 | 24,496,985 | 8.7 | % | |||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-R-2 Note (a), (g) |
Structured Finance Securities | Other/Structured Finance Securities (3M USD LIBOR+8.75%), 10.66%, 1/20/2030 | 12/14/2018 | $ | 2,500,000 | 2,500,000 | 2,452,000 | 0.9 | % | |||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class G-R-2 Note (a), (g) |
Structured Finance Securities | Other/Structured Finance Securities (3M USD LIBOR+10.00%), 11.91%, 1/20/2030 | 12/14/2018 | $ | 7,500,000 | 7,500,000 | 7,357,500 | 2.6 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Structured Finance Securities | 34,267,573 | 34,306,485 | 12.2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Sub Total Control investments |
80,333,567 | 93,728,061 | 33.2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
TOTAL INVESTMENTS172.6% (b) |
$ | 482,016,481 | $ | 487,030,959 | 172.6 | % | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Number of Shares |
Cost | Fair Value | % of Net Assets |
|||||||||||||
Cash and cash equivalents and cash and cash equivalents, reserve accounts28.7% (b) |
||||||||||||||||
U.S. Bank Money Market (l) |
81,112,629 | $ | 81,112,629 | $ | 81,112,629 | 28.7 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cash and cash equivalents and cash and cash equivalents, reserve accounts |
81,112,629 | $ | 81,112,629 | $ | 81,112,629 | 28.7 | % | |||||||||
|
|
|
|
|
|
|
|
(a) | Represents a non-qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. As of November 30, 2019, non-qualifying assets represent 11.4% of the Company's portfolio at fair value. As a BDC, the Company can only invest 30% of its portfolio in non-qualifying assets. (b) Percentages are based on net assets of $282,180,350 as of November 30, 2019. (c) Because there is no readily available market value for these investments, the fair values of these investments were determined using significant unobservable inputs and approved in good faith by our board of directors. These investments have been included as Level 3 in the Fair Value Hierarchy (see Note 3 to the consolidated financial statements). (d) These securities are either fully or partially pledged as collateral under a senior secured revolving credit facility (see Note 7 to the consolidated financial statements). (e) This investment does not have a stated interest rate that is payable thereon. As a result, the 16.28% interest rate in the table above represents the effective interest rate currently earned on the investment cost and is based on the current cash interest and other income generated by the investment. (f) As defined in the Investment Company Act, this portfolio company is an Affiliate as we own between 5.0% and 25.0% of the voting securities. Transactions during the nine months ended November 30, 2019 in which the issuer was an Affiliate are as follows: |
Company |
Purchases | Sales | Total Interest from Investments |
Management Fee Income |
Net Realized Gain (Loss) from Investments |
Net Change in Unrealized Appreciation (Depreciation) |
||||||||||||||||||
GreyHeller LLC |
$ | | $ | | $ | 726,091 | $ | | $ | | $ | 585,220 | ||||||||||||
Elyria Foundry Company, L.L.C. |
| | 123,812 | | | 234,000 | ||||||||||||||||||
Top Gun Pressure Washing, LLC |
4,950,000 | | 147,725 | | | 40,733 | ||||||||||||||||||
TG Pressure Washing Holdings, LLC |
350,000 | | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 5,300,000 | $ | | $ | 997,628 | $ | | $ | | $ | 859,953 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(g) | As defined in the Investment Company Act, we "Control" this portfolio company because we own more than 25% of the portfolio company's outstanding voting securities. Transactions during the nine months ended November 30, 2019 in which the issuer was both an Affiliate and a portfolio company that we Control are as follows: |
Company |
Purchases | Sales | Total Interest from Investments |
Management Fee Income |
Net Realized Gain (Loss) from Investments |
Net Change in Unrealized Appreciation (Depreciation) |
||||||||||||||||||
Easy Ice, LLC |
$ | | $ | | $ | 2,894,007 | $ | | $ | | 5,601,543 | |||||||||||||
Easy Ice Masters, LLC |
| | 382,067 | | | 25,143 | ||||||||||||||||||
Netreo Holdings, LLC |
| | 432,724 | | | 1,759,983 | ||||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. |
| | 3,219,531 | 1,888,932 | | (1,647,698 | ) | |||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-R-2 Notes |
| | 213,378 | | | (31,500 | ) | |||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class G-R-2 Notes |
| | 711,748 | | | (93,000 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | | $ | | $ | 7,853,455 | $ | 1,888,932 | $ | | 5,614,471 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(h) | Non-income producing at November 30, 2019. |
(i) | Includes securities issued by an affiliate of the Company. |
(j) | All or a portion of this investment has an unfunded commitment as of November 30, 2019. (see Note 8 to the consolidated financial statements). |
(k) | As of November 30, 2019, the investment was on non-accrual status. The fair value of these investments was approximately $4.0 million, which represented 0.8% of the Company's portfolio (see Note 2 to the consolidated financial statements). |
(l) | Included within cash and cash equivalents and cash and cash equivalents, reserve accounts in the Company's consolidated statements of assets and liabilities as of November 30, 2019. LIBORLondon Interbank Offered Rate 1M USD LIBORThe 1 month USD LIBOR rate as of November 30, 2019 was 1.70%. 3M USD LIBORThe 3 month USD LIBOR rate as of November 30, 2019 was 1.91%. PIKPayment-in-Kind (see Note 2 to the consolidated financial statements). |
1M USD LIBOR - The 1 month USD LIBOR rate as of November 30, 2019 was 1.70%.
3M USD LIBOR - The 3 month USD LIBOR rate as of November 30, 2019 was 1.91%.
PIK - Payment-in-Kind (see Note 2 to the consolidated financial statements).
(See accompanying notes to the consolidated financial statements)
5
Saratoga Investment Corp.
Consolidated Schedule of Investments
February 28, 2019
Company |
Industry |
Investment Interest Rate/ Maturity |
Original Acquisition Date |
Principal/ Number of Shares |
Cost | Fair Value (c) |
% of Net Assets |
|||||||||||||||||
Non-control/Non-affiliate investments - 169.5% (b) |
||||||||||||||||||||||||
Apex Holdings Software Technologies, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+8.00%), 10.62% Cash, 9/21/2021 |
9/21/2016 | $ | 18,000,000 | $ | 17,922,851 | $ | 18,000,000 | 10.0 | % | |||||||||||||
Apex Holdings Software Technologies, LLC |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+8.00%), 10.62% Cash, 9/21/2021 |
10/1/2018 | $ | 1,000,000 | 992,183 | 1,000,000 | 0.6 | % | |||||||||||||||
Avionte Holdings, LLC (h) |
Business Services | Class A Units | 1/8/2014 | 100,000 | 100,000 | 635,781 | 0.4 | % | ||||||||||||||||
CLEO Communications Holding, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+8.00%), 10.62% Cash/2.00% PIK, 3/31/2022 |
3/31/2017 | $ | 13,514,320 | 13,437,153 | 13,514,320 | 7.5 | % | |||||||||||||||
CLEO Communications Holding, LLC |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+8.00%), 10.62% Cash/2.00% PIK, 3/31/2022 |
3/31/2017 | $ | 12,142,015 | 12,040,280 | 12,142,015 | 6.7 | % | |||||||||||||||
Destiny Solutions Inc. (a) |
Business Services | First Lien Term Loan (3M USD LIBOR+7.00%), 9.62% Cash, 5/16/2023 |
5/16/2018 | $ | 8,500,000 | 8,426,441 | 8,489,800 | 4.7 | % | |||||||||||||||
Destiny Solutions Inc. (a), (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+7.00%), 9.62% Cash, 5/16/2023 |
5/16/2018 | $ | | | | 0.0 | % | |||||||||||||||
Destiny Solutions Inc. (a), (h), (i) |
Business Services | Limited Partner Interests | 5/16/2018 | 999,000 | 999,000 | 1,062,440 | 0.6 | % | ||||||||||||||||
Emily Street Enterprises, L.L.C. |
Business Services | Senior Secured Note (3M USD LIBOR+8.50%), 11.12% Cash, 1/23/2020 |
12/28/2012 | $ | 3,300,000 | 3,299,122 | 3,314,520 | 1.8 | % | |||||||||||||||
Emily Street Enterprises, L.L.C. (h) |
Business Services | Warrant Membership Interests Expires 12/28/2022 |
12/28/2012 | 49,318 | 400,000 | 505,509 | 0.3 | % | ||||||||||||||||
Erwin, Inc. (d) |
Business Services | Second Lien Term Loan (3M USD LIBOR+11.50%), 14.12% Cash/1.00% PIK, 8/28/2021 |
2/29/2016 | $ | 15,888,102 | 15,796,316 | 15,888,102 | 8.8 | % | |||||||||||||||
FMG Suite Holdings, LLC (d) |
Business Services | Second Lien Term Loan (1M USD LIBOR+8.00%), 10.49% Cash, 11/16/2023 |
5/16/2018 | $ | 23,000,000 | 22,844,123 | 23,000,000 | 12.7 | % | |||||||||||||||
GDS Holdings US, LLC (d) |
Business Services | First Lien Term Loan (3M USD LIBOR+7.00%), 9.62% Cash, 8/23/2023 |
8/23/2018 | $ | 7,500,000 | 7,430,649 | 7,495,500 | 4.0 | % | |||||||||||||||
GDS Holdings US, LLC (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+7.00%), 9.62% Cash, 8/23/2023 |
8/23/2018 | $ | | | | 0.0 | % | |||||||||||||||
GDS Software Holdings, LLC (h) |
Business Services | Common Stock Class A Units | 8/23/2018 | 250,000 | 250,000 | 277,139 | 0.2 | % | ||||||||||||||||
Identity Automation Systems (h) |
Business Services | Common Stock Class A Units | 8/25/2014 | 232,616 | 232,616 | 629,555 | 0.3 | % | ||||||||||||||||
Identity Automation Systems (d) |
Business Services | First Lien Term Loan (3M USD LIBOR+9.00%), 11.62% Cash, 3/31/2021 |
8/25/2014 | $ | 24,100,000 | 23,991,294 | 24,100,000 | 13.3 | % | |||||||||||||||
Knowland Group, LLC |
Business Services | Second Lien Term Loan (3M USD LIBOR+8.00%), 10.62% Cash, 5/9/2024 |
11/9/2018 | $ | 15,000,000 | 15,000,000 | 15,000,000 | 8.3 | % | |||||||||||||||
Microsystems Company |
Business Services | Second Lien Term Loan (3M USD LIBOR+8.25%), 10.87% Cash, 7/1/2022 |
7/1/2016 | $ | 18,000,000 | 17,889,554 | 17,881,200 | 9.9 | % | |||||||||||||||
National Waste Partners (d) |
Business Services | Second Lien Term Loan 10.00% Cash, 2/13/2022 |
2/13/2017 | $ | 9,000,000 | 8,942,155 | 8,864,100 | 4.9 | % | |||||||||||||||
Omatic Software, LLC |
Business Services | First Lien Term Loan (3M USD LIBOR+8.00%), 10.62% Cash, 5/29/2023 |
5/29/2018 | $ | 5,500,000 | 5,451,758 | 5,537,400 | 3.1 | % | |||||||||||||||
Omatic Software, LLC (j) |
Business Services | Delayed Draw Term Loan (3M USD LIBOR+8.00%), 10.62% Cash, 5/29/2023 |
5/29/2018 | $ | | | | 0.0 | % | |||||||||||||||
Passageways, Inc. |
Business Services | First Lien Term Loan (3M USD LIBOR+7.75%), 10.37% Cash, 7/5/2023 |
7/5/2018 | $ | 5,000,000 | 4,955,204 | 5,063,500 | 2.8 | % | |||||||||||||||
Passageways, Inc. (h) |
Business Services | Series A Preferred Stock | 7/5/2018 | 2,027,205 | 1,000,000 | 1,339,705 | 0.7 | % | ||||||||||||||||
Vector Controls Holding Co., LLC (d) |
Business Services | First Lien Term Loan 11.50% (9.75% Cash/1.75% PIK), 3/6/2022 |
3/6/2013 | $ | 9,311,956 | 9,310,703 | 9,371,929 | 5.2 | % | |||||||||||||||
Vector Controls Holding Co., LLC (h) |
Business Services | Warrants to Purchase Limited Liability Company Interests, Expires 11/30/2027 | 5/31/2015 | 343 | | 2,210,149 | 1.2 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Business Services | 190,711,402 | 195,322,664 | 108.0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Targus Holdings, Inc. (h) |
Consumer Products | Common Stock | 12/31/2009 | 210,456 | 1,713,605 | 505,094 | 0.3 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Consumer Products | 1,713,605 | 505,094 | 0.3 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
My Alarm Center, LLC (k) |
Consumer Services | Preferred Equity Class A Units 8.00% PIK |
7/14/2017 | 2,227 | 2,357,879 | 1,112,543 | 0.6 | % | ||||||||||||||||
My Alarm Center, LLC (h) |
Consumer Services | Preferred Equity Class B Units | 7/14/2017 | 1,797 | 1,796,880 | | 0.0 | % | ||||||||||||||||
My Alarm Center, LLC |
Consumer Services | Preferred Equity Class Z Units 25.00% PIK |
9/12/2018 | 676 | 655,987 | 2,053,514 | 1.1 | % | ||||||||||||||||
My Alarm Center, LLC (h) |
Consumer Services | Common Stock | 7/14/2017 | 96,224 | | | 0.0 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Consumer Services | 4,810,746 | 3,166,057 | 1.7 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
C2 Educational Systems (d) |
Education | First Lien Term Loan (3M USD LIBOR+7.00%), 9.62% Cash, 5/31/2020 |
5/31/2017 | $ | 16,000,000 | 15,929,485 | 16,032,000 | 8.9 | % | |||||||||||||||
Kev Software Inc. (a) |
Education | First Lien Term Loan (1M USD LIBOR+8.63%), 11.12% Cash, 9/13/2023 |
9/13/2018 | $ | 21,446,929 | 21,273,211 | 21,438,351 | 11.9 | % | |||||||||||||||
M/C Acquisition Corp., L.L.C. (h) |
Education | Class A Common Stock | 6/22/2009 | 544,761 | 30,241 | | 0.0 | % | ||||||||||||||||
M/C Acquisition Corp., L.L.C. (k) |
Education | First Lien Term Loan 1.00% Cash, 3/31/2020 |
8/10/2004 | $ | 2,315,090 | 1,189,177 | 6,260 | 0.0 | % | |||||||||||||||
Texas Teachers of Tomorrow, LLC (h), (i) |
Education | Common Stock | 12/2/2015 | 750,000 | 750,000 | 792,165 | 0.4 | % | ||||||||||||||||
Texas Teachers of Tomorrow, LLC |
Education | Second Lien Term Loan (3M USD LIBOR+9.75%), 12.37% Cash, 6/2/2021 |
12/2/2015 | $ | 10,000,000 | 9,952,251 | 9,807,000 | 5.4 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Education | 49,124,365 | 48,075,776 | 26.6 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
TMAC Acquisition Co., LLC (k) |
Food and Beverage | Unsecured Term Loan 8.00% PIK, 9/01/2023 |
3/1/2018 | $ | 2,216,427 | 2,216,427 | 2,100,286 | 1.2 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Food and Beverage | 2,216,427 | 2,100,286 | 1.2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Axiom Parent Holdings, LLC (h) |
Healthcare Services | Common Stock Class A Units | 6/19/2018 | 400,000 | 400,000 | 402,990 | 0.2 | % | ||||||||||||||||
Axiom Purchaser, Inc. (d) |
Healthcare Services | First Lien Term Loan (3M USD LIBOR+6.00%), 8.62% Cash, 6/19/2023 |
6/19/2018 | $ | 10,000,000 | 9,923,962 | 10,020,000 | 5.5 | % | |||||||||||||||
Axiom Purchaser, Inc. (j) |
Healthcare Services | Delayed Draw Term Loan (3M USD LIBOR+6.00%), 8.62% Cash, 6/19/2023 |
6/19/2018 | $ | | | | 0.0 | % | |||||||||||||||
Censis Technologies, Inc. |
Healthcare Services | First Lien Term Loan B (1M USD LIBOR+8.30%), 10.79% Cash, 9/27/2023 |
7/25/2014 | $ | 19,950,000 | 19,877,861 | 19,991,895 | 11.1 | % | |||||||||||||||
Censis Technologies, Inc. (h), (i) |
Healthcare Services | Limited Partner Interests | 7/25/2014 | 999 | 999,000 | 2,387,705 | 1.3 | % | ||||||||||||||||
ComForCare Health Care |
Healthcare Services | First Lien Term Loan (3M USD LIBOR+7.50%), 10.12% Cash, 1/31/2022 |
1/31/2017 | $ | 15,000,000 | 14,898,535 | 15,096,000 | 8.3 | % | |||||||||||||||
Ohio Medical, LLC (h) |
Healthcare Services | Common Stock | 1/15/2016 | 5,000 | 500,000 | 208,250 | 0.1 | % | ||||||||||||||||
Ohio Medical, LLC |
Healthcare Services | Senior Subordinated Note 12.00% Cash, 7/15/2021 |
1/15/2016 | $ | 7,300,000 | 7,263,114 | 6,735,710 | 3.8 | % | |||||||||||||||
Roscoe Medical, Inc. (h) |
Healthcare Services | Common Stock | 3/26/2014 | 5,081 | 508,077 | | 0.0 | % | ||||||||||||||||
Roscoe Medical, Inc. (k) |
Healthcare Services | Second Lien Term Loan 11.25% Cash, 3/28/2021 |
3/26/2014 | $ | 4,200,000 | 4,189,094 | 2,499,000 | 1.4 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Healthcare Services | 58,559,643 | 57,341,550 | 31.7 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Sub Total Non-control/Non-affiliate investments |
307,136,188 | 306,511,427 | 169.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Affiliate investments - 6.3% (b) |
||||||||||||||||||||||||
GreyHeller LLC (f) |
Business Services | First Lien Term Loan (3M USD LIBOR+11.00%), 13.62% Cash, 11/16/2021 |
11/17/2016 | $ | 7,000,000 | 6,956,976 | 7,140,000 | 4.0 | % | |||||||||||||||
GreyHeller LLC (f), (h) |
Business Services | Series A Preferred Units | 11/17/2016 | 850,000 | 850,000 | 1,496,169 | 0.8 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Business Services | 7,806,976 | 8,636,169 | 4.8 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Elyria Foundry Company, L.L.C. (f), (h) |
Metals | Common Stock | 7/30/2010 | 60,000 | 9,685,028 | 1,804,200 | 1.0 | % | ||||||||||||||||
Elyria Foundry Company, L.L.C. (d), (f) |
Metals | Second Lien Term Loan 15.00% PIK, 8/10/2022 |
7/30/2010 | $ | 1,022,712 | 1,022,712 | 1,022,712 | 0.5 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Metals | 10,707,740 | 2,826,912 | 1.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Sub Total Affiliate investments |
18,514,716 | 11,463,081 | 6.3 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Control investments - 46.5% (b) |
||||||||||||||||||||||||
Easy Ice, LLC (g) |
Business Services | Preferred Equity 10.00% PIK |
2/3/2017 | 5,080,000 | 9,683,612 | 13,357,444 | 7.4 | % | ||||||||||||||||
Easy Ice, LLC (d), (g) |
Business Services | Second Lien Term Loan 7.03% Cash/5.97% PIK, 2/28/2023 |
3/29/2013 | $ | 21,184,063 | 21,126,021 | 21,268,799 | 11.8 | % | |||||||||||||||
Easy Ice Masters, LLC (d), (g) |
Business Services | Second Lien Term Loan 7.03% Cash/5.97% PIK, 2/28/2023 |
10/31/2018 | $ | 3,804,244 | 3,768,025 | 3,819,461 | 2.1 | % | |||||||||||||||
Netreo Holdings, LLC (g) |
Business Services | First Lien Term Loan (3M USD LIBOR +6.25%), 9.00% Cash/2.00% PIK, 7/3/2023 |
7/3/2018 | $ | 5,067,057 | 5,021,133 | 5,092,899 | 2.8 | % | |||||||||||||||
Netreo Holdings, LLC (g), (h) |
Business Services | Common Stock Class A Unit | 7/3/2018 | 3,150,000 | 3,150,000 | 5,179,101 | 2.9 | % | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Business Services | 42,748,791 | 48,717,704 | 27.0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. (a), (e), (g) |
Structured Finance Securities | Other/Structured Finance Securities 16.67%, 1/20/2030 |
1/22/2008 | $ | 69,500,000 | 23,516,398 | 25,393,508 | 14.0 | % | |||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-R-2 Note (a), (g) |
Structured Finance Securities | Other/Structured Finance Securities (3M USD LIBOR+8.75%), 11.37%, 1/20/2030 |
12/14/2018 | $ | 2,500,000 | 2,500,000 | 2,483,500 | 1.4 | % | |||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class G-R-2 Note (a), (g) |
Structured Finance Securities | Other/Structured Finance Securities (3M USD LIBOR+10.00%), 12.62%, 1/20/2030 |
12/14/2018 | $ | 7,500,000 | 7,500,000 | 7,450,500 | 4.1 | % | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Total Structured Finance Securities | 33,516,398 | 35,327,508 | 19.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Sub Total Control investments |
76,265,189 | 84,045,212 | 46.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
TOTAL INVESTMENTS - 222.3% (b) |
$ | 401,916,093 | $ | 402,019,720 | 222.3 | % | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Number of Shares |
Cost | Fair Value | % of Net Assets |
|||||||||||||||||||||
Cash and cash equivalents and cash and cash equivalents, reserve accounts - 34.3% (b) |
|
|||||||||||||||||||||||
U.S. Bank Money Market (l) |
62,094,394 | $ | 62,094,394 | $ | 62,094,394 | 34.3 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total cash and cash equivalents and cash and cash equivalents, reserve accounts |
|
62,094,394 | $ | 62,094,394 | $ | 62,094,394 | 34.3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
(a) | Represents a non-qualifying investment as defined under Section 55(a) of the Investment Company Act of 1940, as amended. As of February 28, 2019, non-qualifying assets represent 16.5% of the Companys portfolio at fair value. As a BDC, the Company can only invest 30% of its portfolio in non-qualifying assets. |
(b) | Percentages are based on net assets of $180,875,187 as of February 28, 2019. |
(c) | Because there is no readily available market value for these investments, the fair values of these investments were determined using significant unobservable inputs and approved in good faith by our board of directors. These investments have been included as Level 3 in the Fair Value Hierarchy (see Note 3 to the consolidated financial statements). |
(d) | These securities are either fully or partially pledged as collateral under a senior secured revolving credit facility (see Note 7 to the consolidated financial statements). |
(e) | This investment does not have a stated interest rate that is payable thereon. As a result, the 16.67% interest rate in the table above represents the effective interest rate currently earned on the investment cost and is based on the current cash interest and other income generated by the investment. |
(f) | As defined in the Investment Company Act, this portfolio company is an Affiliate as we own between 5.0% and 25.0% of the voting securities. Transactions during the year ended February 28, 2019 in which the issuer was an Affiliate are as follows: |
Company |
Purchases | Sales | Total Interest from Investments |
Management and Incentive Fee Income |
Net Realized Gain (Loss) from Investments |
Net Change in Unrealized Appreciation (Depreciation) |
||||||||||||||||||
GreyHeller LLC |
$ | | $ | | $ | 963,289 | $ | | $ | | $ | 776,012 | ||||||||||||
Elyria Foundry Company, L.L.C. |
| | 150,284 | | | (1,629,600 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | | $ | | $ | 1,113,573 | $ | | $ | | $ | (853,588 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(g) | As defined in the Investment Company Act, we Control this portfolio company because we own more than 25% of the portfolio companys outstanding voting securities. Transactions during the year ended February 28, 2019 in which the issuer was both an Affiliate and a portfolio company that we Control are as follows: |
Company |
Purchases | Sales | Total Interest from Investments |
Management and Incentive Fee Income |
Net Realized Gain (Loss) from Investments |
Net Change in Unrealized Appreciation (Depreciation) |
||||||||||||||||||
Easy Ice, LLC |
$ | 1,684,448 | $ | | $ | 3,424,369 | $ | | $ | | $ | 1,720,004 | ||||||||||||
Easy Ice Masters, LLC |
3,629,682 | | 161,468 | | | 51,436 | ||||||||||||||||||
Netreo Holdings, LLC |
8,100,000 | | 374,843 | | | 2,100,867 | ||||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. |
14,268,609 | (48,083 | ) | 2,922,372 | 2,355,412 | | (701,722 | ) | ||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F Note |
| (4,500,000 | ) | 412,069 | | | 900 | |||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class F-R-2 Notes |
2,500,000 | | 61,761 | | | (16,500 | ) | |||||||||||||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Class G-R-2 Notes |
7,500,000 | | 205,333 | | | (49,500 | ) | |||||||||||||||||
Saratoga Investment Corp. CLO 2013-1 Warehouse, Ltd. |
20,000,000 | (20,000,000 | ) | 511,731 | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 57,682,739 | $ | (24,548,083 | ) | $ | 8,073,946 | $ | 2,355,412 | $ | | $ | 3,105,485 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(h) | Non-income producing at February 28, 2019. |
(i) | Includes securities issued by an affiliate of the Company. |
(j) | All or a portion of this investment has an unfunded commitment as of February 28, 2019. (see Note 8 to the consolidated financial statements). |
(k) | As of February 28, 2019, the investment was on non-accrual status. The fair value of these investments was approximately $5.7 million, which represented 1.4% of the Companys portfolio (see Note 2 to the consolidated financial statements). |
(l) | Included within cash and cash equivalents and cash and cash equivalents, reserve accounts in the Companys consolidated statements of assets and liabilities as of February 28, 2019. |
LIBOR - London Interbank Offered Rate
1M USD LIBOR - The 1 month USD LIBOR rate as of February 28, 2019 was 2.49%.
3M USD LIBOR - The 3 month USD LIBOR rate as of February 28, 2019 was 2.62%.
PIK - Payment-in-Kind (see Note 2 to the consolidated financial statements).
See accompanying notes to consolidated financial statements.
6
Consolidated Statements of Changes in Net Assets
(unaudited)
For the nine months ended | ||||||||||||
November 30, 2019 | November 30, 2018 | |||||||||||
INCREASE FROM OPERATIONS: |
||||||||||||
Net investment income |
$ | 13,212,165 | $ | 14,210,817 | ||||||||
Net realized gain from investments |
12,609,767 | 145,007 | ||||||||||
Net change in unrealized appreciation (depreciation) on investments |
4,910,851 | (2,542,429 | ) | |||||||||
Net change in provision for deferred taxes on unrealized appreciation on investments |
(1,786,801 | ) | (1,159,581 | ) | ||||||||
|
|
|
|
|||||||||
Net increase in net assets resulting from operations |
28,945,982 | 10,653,814 | ||||||||||
|
|
|
|
|||||||||
DECREASE FROM SHAREHOLDER DISTRIBUTIONS: |
||||||||||||
Total distributions to shareholders |
(13,835,741 | ) | (10,208,577 | ) | ||||||||
|
|
|
|
|||||||||
Net decrease in net assets from shareholder distributions |
(13,835,741 | ) | (10,208,577 | ) | ||||||||
|
|
|
|
|||||||||
CAPITAL SHARE TRANSACTIONS: |
||||||||||||
Proceeds from issuance of common stock |
85,228,325 | 28,991,238 | ||||||||||
Stock dividend distribution |
2,188,811 | 1,594,506 | ||||||||||
Offering costs |
(1,222,214 | ) | (1,387,957 | ) | ||||||||
|
|
|
|
|||||||||
Net increase in net assets from capital share transactions |
86,194,922 | 29,197,787 | ||||||||||
|
|
|
|
|||||||||
Total increase in net assets |
101,305,163 | 29,643,024 | ||||||||||
Net assets at beginning of period, as previously reported |
180,875,187 | 143,691,367 | ||||||||||
Cumulative effect of the adoption of ASC 606 (See Note 2) |
| (65,300 | ) | |||||||||
|
|
|
|
|||||||||
Net assets at beginning of period, as adjusted |
180,875,187 | 143,626,067 | ||||||||||
|
|
|
|
|||||||||
Net assets at end of period |
$ | 282,180,350 | $ | 173,269,091 | ||||||||
|
|
|
|
See accompanying notes to consolidated financial statements.
7
Consolidated Statements of Cash Flows
(unaudited)
For the nine months ended | ||||||||
November 30, 2019 | November 30, 2018 | |||||||
Operating activities |
||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 28,945,982 | $ | 10,653,814 | ||||
ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES: |
||||||||
Payment-in-kind and other adjustments to cost |
(3,082,715 | ) | (2,914,989 | ) | ||||
Net accretion of discount on investments |
(888,292 | ) | (793,588 | ) | ||||
Amortization of deferred debt financing costs |
1,037,764 | 820,836 | ||||||
Net deferred income taxes |
| (684,520 | ) | |||||
Net realized gain from investments |
(12,609,767 | ) | (145,007 | ) | ||||
Net change in unrealized (appreciation) depreciation on investments |
(4,910,851 | ) | 2,542,429 | |||||
Net change in provision for deferred taxes on unrealized appreciation on investments |
1,786,801 | 1,159,581 | ||||||
Proceeds from sales and repayments of investments |
97,152,448 | 60,854,504 | ||||||
Purchases of investments |
(160,672,062 | ) | (160,661,533 | ) | ||||
(Increase) decrease in operating assets: |
||||||||
Interest receivable |
(1,009,242 | ) | (1,654,449 | ) | ||||
Due from affiliate |
1,673,747 | | ||||||
Management and incentive fee receivable |
255,374 | 65,806 | ||||||
Cumulative effect of the adoption of ASC 606 (See Note 2) |
| (65,300 | ) | |||||
Other assets |
826 | (155,841 | ) | |||||
Deferred tax asset |
(1,464,878 | ) | | |||||
Receivable from unsettled trades |
| (6,463 | ) | |||||
Increase (decrease) in operating liabilities: |
||||||||
Base management and incentive fees payable |
3,791,110 | 30,718 | ||||||
Accounts payable and accrued expenses |
(162,098 | ) | 569,632 | |||||
Interest and debt fees payable |
(1,314,274 | ) | (314,276 | ) | ||||
Directors fees payable |
(60,500 | ) | (41,500 | ) | ||||
Due to manager |
61,580 | (27,276 | ) | |||||
|
|
|
|
|||||
NET CASH USED IN OPERATING ACTIVITIES |
(51,469,047 | ) | (90,767,422 | ) | ||||
|
|
|
|
|||||
Financing activities |
||||||||
Borrowings on debt |
20,200,000 | 45,590,000 | ||||||
Paydowns on debt |
(20,200,000 | ) | (21,500,000 | ) | ||||
Issuance of notes |
| 40,000,000 | ||||||
Payments of deferred debt financing costs |
(745,133 | ) | (1,940,910 | ) | ||||
Proceeds from issuance of common stock |
84,064,237 | 28,991,238 | ||||||
Payments of cash dividends |
(11,646,930 | ) | (8,614,071 | ) | ||||
Payments of offering costs |
(1,184,892 | ) | (1,293,382 | ) | ||||
|
|
|
|
|||||
NET CASH PROVIDED BY FINANCING ACTIVITIES |
70,487,282 | 81,232,875 | ||||||
|
|
|
|
|||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS |
19,018,235 | (9,534,547 | ) | |||||
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, BEGINNING OF PERIOD |
62,094,394 | 13,777,491 | ||||||
|
|
|
|
|||||
CASH AND CASH EQUIVALENTS AND CASH AND CASH EQUIVALENTS, RESERVE ACCOUNTS, END OF PERIOD |
$ | 81,112,629 | $ | 4,242,944 | ||||
|
|
|
|
|||||
Supplemental information: |
||||||||
Interest paid during the period |
$ | 11,904,776 | $ | 8,696,177 | ||||
Cash paid for taxes |
18,153 | 61,569 | ||||||
Supplemental non-cash information: |
||||||||
Payment-in-kind interest income |
$ | 3,082,715 | $ | 2,914,989 | ||||
Net accretion of discount on investments |
888,292 | 793,588 | ||||||
Amortization of deferred debt financing costs |
1,037,764 | 820,836 | ||||||
Stock dividend distribution |
2,188,811 | 1,594,506 |
See accompanying notes to consolidated financial statements.
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2019
(unaudited)
Note 1. Organization
Saratoga Investment Corp. (the Company, we, our and us) is a non-diversified closed end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act). The Company commenced operations on March 23, 2007 as GSC Investment Corp. and completed the initial public offering (IPO) on March 28, 2007. The Company has elected to be treated as a regulated investment company (RIC) under subchapter M of the Internal Revenue Code (the Code). The Company expects to continue to qualify and to elect to be treated, for tax purposes, as a RIC. The Companys investment objective is to generate current income and, to a lesser extent, capital appreciation from its investments.
GSC Investment, LLC (the LLC) was organized in May 2006 as a Maryland limited liability company. As of February 28, 2007, the LLC had not yet commenced its operations and investment activities.
On March 21, 2007, the Company was incorporated and concurrently therewith the LLC was merged with and into the Company, with the Company as the surviving entity, in accordance with the procedure for such merger in the LLCs limited liability company agreement and Maryland law. In connection with such merger, each outstanding limited liability company interest of the LLC was converted into a share of common stock of the Company.
On July 30, 2010, the Company changed its name from GSC Investment Corp. to Saratoga Investment Corp. in connection with the consummation of a recapitalization transaction.
The Company is externally managed and advised by the investment adviser, Saratoga Investment Advisors, LLC (the Manager), pursuant to a management agreement (the Management Agreement). Prior to July 30, 2010, the Company was managed and advised by GSCP (NJ), L.P.
The Company has established wholly-owned subsidiaries, SIA-Avionte, Inc., SIA-Easy Ice, LLC, SIA-GH, Inc., SIA-HT, Inc., SIA- MAC, Inc., SIA-TG, Inc., SIA-TT, Inc., SIA-Vector, Inc. and SIA-VR, Inc., which are structured as Delaware entities, or tax blockers (Taxable Blockers), to hold equity or equity-like investments in portfolio companies organized as limited liability companies, or LLCs (or other forms of pass through entities). Tax Blockers are consolidated for accounting purposes, but are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies.
On March 28, 2012, our wholly-owned subsidiary, Saratoga Investment Corp. SBIC LP (SBIC LP), received a Small Business Investment Company (SBIC) license from the Small Business Administration (SBA). On August 14, 2019, our wholly-owned subsidiary, Saratoga Investment Corp. SBIC II LP (SBIC II LP), also received an SBIC license from the SBA. The new license will provide up to $175.0 million in additional long-term capital in the form of SBA debentures.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (U.S. GAAP), are stated in U.S. Dollars and include the accounts of the Company and its special purpose financing subsidiaries, Saratoga Investment Funding, LLC (previously known as GSC Investment Funding LLC), SBIC LP, SBIC II LP, SIA-Avionte, Inc., SIA-Easy Ice, LLC, SIA-GH, Inc., SIA-HT, Inc., SIA-MAC, Inc., SIA-TG, Inc., SIA-TT, Inc., SIA-Vector, Inc. and SIA-VR, Inc. All intercompany accounts and transactions have been eliminated in consolidation. All references made to the Company, we, and us herein include Saratoga Investment Corp. and its consolidated subsidiaries, except as stated otherwise.
The Company, SBIC LP and SBIC II LP are all considered to be investment companies for financial reporting purposes and have applied the guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946, Financial Services Investment Companies (ASC 946). There have been no changes to the Company, SBIC LP or SBIC II LPs status as investment companies during the nine months ended November 30, 2019.
9
Use of Estimates in the Preparation of Financial Statements
The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and income, gains (losses) and expenses during the period reported. Actual results could differ materially from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include short-term, liquid investments in a money market fund. Cash and cash equivalents are carried at cost which approximates fair value. Per section 12(d)(1)(A) of the 1940 Act, the Company may not invest in another registered investment company such as, a money market fund if such investment would cause the Company to exceed any of the following limitations:
| we were to own more than 3.0% of the total outstanding voting stock of the money market fund; |
| we were to hold securities in the money market fund having an aggregate value in excess of 5.0% of the value of our total assets, except as allowed pursuant to Rule 12d1-1 of Section 12(d)(1) of the 1940 Act which is designed to permit cash sweep arrangements rather than investments directly in short-term instruments; or |
| we were to hold securities in money market funds and other registered investment companies and BDCs having an aggregate value in excess of 10.0% of the value of our total assets. |
As of November 30, 2019, the Company did not exceed any of these limitations.
Cash and Cash Equivalents, Reserve Accounts
Cash and cash equivalents, reserve accounts include amounts held in designated bank accounts in the form of cash and short-term liquid investments in money market funds, representing payments received on secured investments or other reserved amounts associated with the Companys $45.0 million senior secured revolving credit facility with Madison Capital Funding LLC. The Company is required to use these amounts to pay interest expense, reduce borrowings, or pay other amounts in accordance with the terms of the senior secured revolving credit facility.
In addition, cash and cash equivalents, reserve accounts also include amounts held in designated bank accounts, in the form of cash and short-term liquid investments in money market funds, within our wholly-owned subsidiary, SBIC LP.
The statements of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts.
The following table provides a reconciliation of cash and cash equivalents and cash and cash equivalents, reserve accounts reported within the consolidated statements of assets and liabilities that sum to the total of the same such amounts shown in the consolidated statements of cash flows:
November 30, 2019 |
November 30, 2018 |
|||||||
Cash and cash equivalents |
$ | 51,646,844 | $ | 322,116 | ||||
Cash and cash equivalents, reserve accounts |
29,465,785 | 3,920,828 | ||||||
|
|
|
|
|||||
Total cash and cash equivalents and cash and cash equivalents, reserve accounts |
$ | 81,112,629 | $ | 4,242,944 | ||||
|
|
|
|
Investment Classification
The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, Control Investments are defined as investments in companies in which we own more than 25.0% of the voting securities or maintain greater than 50.0% of the board representation. Under the 1940 Act, Affiliated Investments are defined as those non-control investments in companies in which we own between 5.0% and 25.0% of the voting securities. Under the 1940 Act, Non-affiliated Investments are defined as investments that are neither Control Investments nor Affiliated Investments.
Investment Valuation
The Company accounts for its investments at fair value in accordance with the FASB ASC Topic 820, Fair Value Measurement (ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that its investments are to be sold or its liabilities are to be transferred at the balance sheet date in the principal market to independent market participants, or in the absence of a principal market, in the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.
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Investments for which market quotations are readily available are fair valued at such market quotations obtained from independent third-party pricing services and market makers subject to any decision by our board of directors to approve a fair value determination to reflect significant events affecting the value of these investments. We value investments for which market quotations are not readily available at fair value as approved, in good faith, by our board of directors based on input from our Manager, the audit committee of our board of directors and a third party independent valuation firm. Determinations of fair value may involve subjective judgments and estimates. The types of factors that may be considered in determining the fair value of our investments include the nature and realizable value of any collateral, the portfolio companys ability to make payments, market yield trend analysis, the markets in which the portfolio company does business, comparison to publicly traded companies, discounted cash flow and other relevant factors.
The Company undertakes a multi-step valuation process each quarter when valuing investments for which market quotations are not readily available, as described below:
| Each investment is initially valued by the responsible investment professionals of Saratoga Investment Advisors and preliminary valuation conclusions are documented, reviewed and discussed with our senior management; and |
| An independent valuation firm engaged by our board of directors independently reviews a selection of these preliminary valuations each quarter so that the valuation of each investment for which market quotes are not readily available is reviewed by the independent valuation firm at least once each fiscal year. |
In addition, all our investments are subject to the following valuation process:
| The audit committee of our board of directors reviews and approves each preliminary valuation and our Manager and independent valuation firm (if applicable) will supplement the preliminary valuation to reflect any comments provided by the audit committee; and |
| Our board of directors discusses the valuations and approves the fair value of each investment, in good faith, based on the input of our Manager, independent valuation firm (to the extent applicable) and the audit committee of our board of directors. |
The Companys investment in Saratoga Investment Corp. CLO 2013-1, Ltd. (Saratoga CLO) is carried at fair value, which is based on a discounted cash flow model that utilizes prepayment, re-investment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow, and comparable yields for equity interests in collateralized loan obligation funds similar to Saratoga CLO, when available, as determined by our Manager and recommended to our board of directors. Specifically, we use Intex cash flow models, or an appropriate substitute, to form the basis for the valuation of our investment in Saratoga CLO. The models use a set of assumptions including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated valuations. The assumptions are based on available market data and projections provided by third parties as well as management estimates. The Company uses the output from the Intex models (i.e., the estimated cash flows) to perform a discounted cash flow analysis on expected future cash flows to determine a valuation for our investment in Saratoga CLO.
Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, they may fluctuate over short periods of time and may be based on estimates. The determination of fair value may differ materially from the values that would have been used if a ready market for these investments existed. The Companys net asset value could be materially affected if the determinations regarding the fair value of our investments were materially higher or lower than the values that we ultimately realize upon the disposal of such investments.
Derivative Financial Instruments
The Company accounts for derivative financial instruments in accordance with FASB ASC Topic 815, Derivatives and Hedging (ASC 815). ASC 815 requires recognizing all derivative instruments as either assets or liabilities on the consolidated statements of assets and liabilities at fair value. The Company values derivative contracts at the closing fair value provided by the counterparty. Changes in the values of derivative contracts are included in the consolidated statements of operations.
Investment Transactions and Income Recognition
Purchases and sales of investments and the related realized gains or losses are recorded on a trade-date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on its investments when it is determined that interest is no longer collectible. Discounts and premiums on investments purchased are accreted/amortized over the life of the respective investment using the effective yield method. The amortized cost of investments represents the original cost adjusted for the accretion of discounts over the life of the investment and amortization of premiums on investments up to the earliest call date.
Loans are generally placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reserved when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be
11
recognized as a reduction in principal depending upon managements judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in managements judgment, are likely to remain current, although we may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. At November 30, 2019, certain investments in four portfolio companies, including preferred equity interests, were on non-accrual status with a fair value of approximately $4.0 million, or 0.8% of the fair value of our portfolio. At February 28, 2019, certain investments in four portfolio companies, including preferred equity interests, were on non-accrual status with a fair value of approximately $5.7 million, or 1.4% of the fair value of our portfolio.
Interest income on our investment in Saratoga CLO is recorded using the effective interest method in accordance with the provisions of ASC Topic 325, Investments-Other, Beneficial Interests in Securitized Financial Assets, (ASC 325), based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield over the remaining life of the investment from the date the estimated yield was changed.
Adoption of ASC 606
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), which supersedes the revenue recognition requirements in Revenue Recognition (ASC 605). In May 2016, ASU 2016-12 amended ASU 2014-09 and deferred the effective period for annual periods beginning after December 15, 2017.
Under the new guidance, the Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Under this standard, revenue is based on a contract with a determinable transaction price and distinct performance obligations with probable collectability. Revenues cannot be recognized until the performance obligation(s) are satisfied and control is transferred to the customer. Management has concluded that the majority of its revenues associated with financial instruments are scoped out of ASC 606, and has concluded that the only significant impact relates to the timing of the recognition of the CLO incentive fee income. The adoption of ASC 606 did not have an impact on the Companys management fee income or investment income.
The Company adopted ASC 606 to all applicable contracts under the modified retrospective approach using the practical expedient provided for within paragraph 606-10-65-1(f)(4); therefore, the presentation of prior year periods has not been adjusted. The Company recognized the cumulative effect of initially adopting ASC 606 as an adjustment to the opening balance of components of equity as of March 1, 2018.
Incentive Fee Income
Incentive fee income is recognized based on the performance of Saratoga CLO during the period, subject to the achievement of minimum return levels in accordance with the terms set out in the investment management agreement between the Company and Saratoga CLO. Incentive fee income is realized in cash on a quarterly basis. Once realized, such fees are no longer subject to reversal.
Upon the adoption of ASC 606, the Company recognizes incentive fee income only when the amount is realized and no longer subject to reversal. Therefore, the Company no longer recognizes unrealized incentive fee income in the consolidated financial statements. The adoption of ASC 606 results in the delayed recognition of unrealized incentive fee income in the consolidated financial statements until it becomes realized at the end of the measurement period and all uncertainties are eliminated, which is typically quarterly.
The Company adopted ASC 606 for incentive fee income using the modified retrospective approach with an effective date of March 1, 2018. The cumulative effect of the adoption resulted in the reversal of $0.07 million of unrealized incentive fee income and is presented as a reduction to the opening balances of components of equity as of March 1, 2018.
In conjunction with the third refinancing and issuance of the Saratoga CLOs 2013-1 Reset CLO Notes (the 2013-1 Reset CLO Notes) on December 14, 2018, the Company is no longer entitled to receive an incentive management fee from Saratoga CLO. See Note 4 for additional information. Prior to the refinancing, the Company reported $0.1 million and $0.5 million in incentive fees from the Saratoga CLO for the three and nine months ended November 30, 2018, respectively, and is reported as incentive fee income on the Companys consolidated statement of operations.
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The following table presents the impact of incentive fees on the consolidated statement of assets and liabilities upon the adoption of ASC 606 effective March 1, 2018:
Consolidated Statement of Assets and Liabilities
February 28, 2018 | ||||||||||||
As Reported | Adjustments(1) | As Adjusted for Adoption of ASC 606 |
||||||||||
Management and incentive fee receivable |
$ | 233,024 | $ | (65,300 | ) | $ | 167,724 | |||||
Total assets |
360,336,361 | (65,300 | ) | 360,271,061 | ||||||||
Cumulative effect adjustment for Adoption of ASC 606 |
| (65,300 | ) | (65,300 | ) | |||||||
Total net assets |
143,691,367 | (65,300 | ) | 143,626,067 | ||||||||
NET ASSET VALUE PER SHARE |
$ | 22.96 | $ | (0.01 | ) | $ | 22.95 |
(1) | Unrealized incentive fees receivable balance as of February 28, 2018. |
Without the adoption of ASC 606, there was no impact to either the consolidated statements of assets and liabilities as of November 30, 2019 and February 28, 2019 or the consolidated statement of operations for the three and nine months ended November 30, 2019.
For the three and nine months ended November 30, 2018, the impact on the consolidated statement of operations without the adoption of ASC 606 is shown in the tables below:
Consolidated Statement of Operations
For the three months ended November 30, 2018 | For the nine months ended November 30, 2018 | |||||||||||||||||||||||
As Reported | Adjustments | Without Adoption of ASC 606 |
As Reported | Adjustments | Without Adoption of ASC 606 |
|||||||||||||||||||
Incentive fee income |
$ | 147,602 | $ | (1,382 | ) | $ | 146,220 | $ | 493,846 | $ | 3,581 | $ | 497,427 | |||||||||||
Total investment income |
12,833,013 | (1,382 | ) | 12,831,631 | 34,723,805 | 3,581 | 34,727,386 | |||||||||||||||||
NET INVESTMENT INCOME |
5,138,941 | (1,382 | ) | 5,137,559 | 14,210,817 | 3,581 | 14,214,398 | |||||||||||||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
3,669,083 | (1,382 | ) | 3,667,701 | 10,653,814 | 3,581 | 10,657,395 | |||||||||||||||||
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE |
$ | 0.49 | $ | | $ | 0.49 | $ | 1.55 | $ | | $ | 1.55 |
Other Income
Other income includes dividends received, origination fees, structuring fees and advisory fees, and is recorded in the consolidated statements of operations when earned.
Payment-in-Kind Interest
The Company holds debt and preferred equity investments in its portfolio that contain a payment-in-kind (PIK) interest provision. The PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is generally recorded on the accrual basis to the extent such amounts are expected to be collected. The Company stops accruing PIK interest if it is expected that the issuer will not be able to pay all principal and interest when due.
Deferred Debt Financing Costs
Financing costs incurred in connection with our credit facility and notes are deferred and amortized using the straight-line method over the life of the respective facility and debt securities. Financing costs incurred in connection with our SBA debentures are deferred and amortized using the straight-line method over the life of the debentures.
The Company presents deferred debt financing costs on the balance sheet as a contra-liability as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.
Contingencies
In the ordinary course of business, the Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management feels that the likelihood of such an event is remote. Therefore, the Company has not accrued any liabilities in connection with such indemnifications.
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In the ordinary course of business, the Company may directly or indirectly be a defendant or plaintiff in legal actions with respect to bankruptcy, insolvency or other types of proceedings. Such lawsuits may involve claims that could adversely affect the value of certain financial instruments owned by the Company.
Income Taxes
The Company has elected to be treated for tax purposes as a RIC under the Code and, among other things, intends to make the requisite distributions to its stockholders which will relieve the Company from federal income taxes. Therefore, no provision has been recorded for federal income taxes, except as related to the Taxable Blockers when applicable.
In order to qualify as a RIC, among other requirements, the Company is required to timely distribute to its stockholders at least
90.0% of its investment company taxable income, as defined by the Code, for each fiscal tax year. The Company will be subject to a nondeductible U.S. federal excise tax of 4.0% on undistributed income if it does not distribute at least 98.0% of its ordinary income in any calendar year and 98.2% of its capital gain net income for each one-year period ending on October 31.
Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year dividend distributions into the next tax year and pay a 4.0% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions for excise tax purposes, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned.
In accordance with certain applicable U.S. Treasury regulations and private letter rulings issued by the Internal Revenue Service (IRS), a RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder may elect to receive his or her entire distribution in either cash or stock of the RIC subject to a limitation on the aggregate amount of cash to be distributed to all stockholders, which limitation must be at least 20.0% of the aggregate declared distribution. If too many stockholders elect to receive cash, each stockholder electing to receive cash will receive a pro rata amount of cash (with the balance of the distribution paid in stock). In no event will any stockholder, electing to receive cash, receive less than 20.0% of his or her entire distribution in cash. If these and certain other requirements are met, for U.S. federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock.
The Company may utilize wholly-owned holding companies taxed under Subchapter C of the Code or tax blockers, when making equity investments in portfolio companies taxed as pass-through entities to meet its source-of-income requirements as a RIC. Taxable Blockers are consolidated in the Companys U.S. GAAP financial statements and may result in current and deferred federal and state income tax expense with respect to income derived from those investments. Such income, net of applicable income taxes, is not included in the Companys tax-basis net investment income until distributed by the Taxable Blocker, which may result in timing and character differences between the Companys U.S. GAAP and tax-basis net investment income and realized gains and losses. Income tax expense or benefit from Taxable Blockers related to net investment income are included in total operating expenses, while any expense or benefit related to federal or state income tax originated for capital gains and losses are included together with the applicable net realized or unrealized gain or loss line item. Deferred tax assets of the Taxable Blockers are reduced by a valuation allowance when, in the opinion of management, it is more-likely than-not that some portion or all of the deferred tax assets will not be realized.
FASB ASC Topic 740, Income Taxes, (ASC 740), provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Companys tax returns to determine whether the tax positions are more-likely-than-not of being sustained by the applicable tax authority. Tax positions deemed to meet a more-likely-than-not threshold would be recorded as a tax benefit or expense in the current period. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense on the consolidated statements of operations. During the fiscal year ended February 28, 2019, the Company did not incur any interest or penalties. Although we file federal and state tax returns, our major tax jurisdiction is federal. The 2016, 2017 and 2018 federal tax years for the Company remain subject to examination by the IRS. As of November 30, 2019 and February 28, 2019, there were no uncertain tax positions. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.
Dividends
Dividends to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a dividend is determined by the board of directors. Net realized capital gains, if any, are generally distributed at least annually, although we may decide to retain such capital gains for reinvestment.
We have adopted a dividend reinvestment plan (DRIP) that provides for reinvestment of our dividend distributions on behalf of our stockholders unless a stockholder elects to receive cash. As a result, if our board of directors authorizes, and we declare, a cash dividend, then our stockholders who have not opted out of the DRIP by the dividend record date will have their cash dividends automatically
14
reinvested into additional shares of our common stock, rather than receiving the cash dividends. We have the option to satisfy the share requirements of the DRIP through the issuance of new shares of common stock or through open market purchases of common stock by the DRIP plan administrator.
Capital Gains Incentive Fee
The Company records an expense accrual on the consolidated statements of operations, relating to the capital gains incentive fee payable on the consolidated statements of assets and liabilities, by the Company to the Manager when the net realized and unrealized gain on its investments exceed all net realized and unrealized capital losses on its investments given the fact that a capital gains incentive fee would be owed to the Manager if the Company were to liquidate its investment portfolio at such time.
The actual incentive fee payable to the Companys Manager related to capital gains will be determined and payable in arrears at the end of each fiscal year and will include only realized capital gains net of realized and unrealized losses for the period.
Regulatory Matters
In August 2018, the SEC issued Final Rule Release No.33-10532, Disclosure Update and Simplification, which in part amends certain disclosure requirements of Regulation S-X that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other Commission disclosure requirements, U.S. GAAP or changes in the information environment. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The effective date for these disclosures was November 5, 2018. Management has adopted these amendments as currently required and these are reflected in the Companys consolidated financial statements and related disclosures. The presentation of certain prior year information has been adjusted to conform with these amendments.
New Accounting Pronouncements
In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure FrameworkChanges to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. The changes affect all companies that are required to include fair value measurement disclosures. In general, the amendments in ASU 2018-13 are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of ASU 2018-13 and may delay adoption of the additional disclosures, which are required for public companies only, until their effective date. Management has assessed these changes and does not believe they would have a material impact on the Companys consolidated financial statements and disclosures.
Risk Management
In the ordinary course of its business, the Company manages a variety of risks, including market risk and credit risk. Market risk is the risk of potential adverse changes to the value of investments because of changes in market conditions such as interest rate movements and volatility in investment prices.
Credit risk is the risk of default or non-performance by portfolio companies, equivalent to the investments carrying amount. The Company is also exposed to credit risk related to maintaining all of its cash and cash equivalents, including those in reserve accounts, at a major financial institution and credit risk related to any of its derivative counterparties.
The Company has investments in lower rated and comparable quality unrated high yield bonds and bank loans. Investments in high yield investments are accompanied by a greater degree of credit risk. The risk of loss due to default by the issuer is significantly greater for holders of high yield securities, because such investments are generally unsecured and are often subordinated to other creditors of the issuer.
Note 3. Investments
As noted above, the Company values all investments in accordance with ASC 820. ASC 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
ASC 820 establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
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Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried at fair value are classified and disclosed in one of the following three categories:
| Level 1Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. |
| Level 2Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. Such inputs may be quoted prices for similar assets or liabilities, quoted markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full character of the financial instrument, or inputs that are derived principally from, or corroborated by, observable market information. Investments which are generally included in this category include illiquid debt securities and less liquid, privately held or restricted equity securities, for which some level of recent trading activity has been observed. |
| Level 3Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs may be based on the Companys own assumptions about how market participants would price the asset or liability or may use Level 2 inputs, as adjusted, to reflect specific investment attributes relative to a broader market assumption. These inputs into the determination of fair value may require significant management judgment or estimation. Even if observable market data for comparable performance or valuation measures (earnings multiples, discount rates, other financial/valuation ratios, etc.) are available, such investments are grouped as Level 3 if any significant data point that is not also market observable (private company earnings, cash flows, etc.) is used in the valuation methodology. |
In addition to using the above inputs in investment valuations, the Company continues to employ the valuation policy approved by the board of directors that is consistent with ASC 820 and the 1940 Act (see Note 2). Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value.
The following table presents fair value measurements of investments, by major class, as of November 30, 2019 (dollars in thousands), according to the fair value hierarchy:
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
First lien term loans |
$ | | $ | | $ | 302,773 | $ | 302,773 | ||||||||
Second lien term loans |
| | 101,099 | 101,099 | ||||||||||||
Unsecured term loans |
| | 2,073 | 2,073 | ||||||||||||
Structured finance securities |
| | 34,306 | 34,306 | ||||||||||||
Equity interests |
| | 46,780 | 46,780 | ||||||||||||
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|
|
|
|
|
|
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Total |
$ | | $ | | $ | 487,031 | $ | 487,031 | ||||||||
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The following table presents fair value measurements of investments, by major class, as of February 28, 2019 (dollars in thousands), according to the fair value hierarchy:
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
First lien term loans |
$ | | $ | | $ | 202,846 | $ | 202,846 | ||||||||
Second lien term loans |
| | 125,786 | 125,786 | ||||||||||||
Unsecured term loans |
| | 2,100 | 2,100 | ||||||||||||
Structured finance securities |
| | 35,328 | 35,328 | ||||||||||||
Equity interests |
| | 35,960 | 35,960 | ||||||||||||
|
|
|
|
|
|
|
|
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Total |
$ | | $ | | $ | 402,020 | $ | 402,020 | ||||||||
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The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended November 30, 2019 (dollars in thousands):
First lien term loans |
Second lien term loans |
Unsecured term loans |
Structured finance securities |
Equity interests |
Total | |||||||||||||||||||
Balance as of February 28, 2019 |
$ | 202,846 | $ | 125,786 | $ | 2,100 | $ | 35,328 | $ | 35,960 | $ | 402,020 | ||||||||||||
Payment-in-kind and other adjustments to cost |
488 | 2,716 | | 751 | (872 | ) | 3,083 | |||||||||||||||||
Net accretion of discount on investments |
641 | 247 | | | | 888 | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(672 | ) | 350 | (27 | ) | (1,773 | ) | 7,033 | 4,911 | |||||||||||||||
Purchases |
155,588 | | | | 5,084 | 160,672 | ||||||||||||||||||
Sales and repayments |
(56,178 | ) | (28,000 | ) | | | (12,975 | ) | (97,153 | ) | ||||||||||||||
Net realized gain (loss) from investments |
60 | | | | 12,550 | 12,610 | ||||||||||||||||||
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|
|
|
|
|
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Balance as of November 30, 2019 |
$ | 302,773 | $ | 101,099 | $ | 2,073 | $ | 34,306 | $ | 46,780 | $ | 487,031 | ||||||||||||
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Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period |
$ | (558 | ) | $ | 196 | $ | (27 | ) | $ | (1,773 | ) | $ | 8,422 | $ | 6,260 | |||||||||
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Purchases and other adjustments to cost include purchases of new investments at cost, effects of refinancing/restructuring, accretion/amortization of income from discount/premium on debt securities, and PIK.
Sales and repayments represent net proceeds received from investments sold and principal paydowns received during the period.
Transfers and restructurings, if any, are recognized at the beginning of the period in which they occur. There were no restructures in or out of Levels 1, 2 or 3 during the nine months ended November 30, 2019.
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the nine months ended November 30, 2018 (dollars in thousands):
Syndicated loans |
First lien term loans |
Second lien term loans |
Unsecured term loans |
Structured finance securities |
Equity interests |
Total | ||||||||||||||||||||||
Balance as of February 28, 2018 |
$ | 4,106 | $ | 197,359 | $ | 95,075 | $ | | $ | 16,374 | $ | 29,780 | $ | 342,694 | ||||||||||||||
Payment-in-kind and other adjustments to cost |
| 413 | 1,739 | | | 763 | 2,915 | |||||||||||||||||||||
Net accretion of discount on investments |
73 | 498 | 223 | | | | 794 | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(73 | ) | (1,082 | ) | (1,404 | ) | (135 | ) | (1,287 | ) | 1,439 | (2,542 | ) | |||||||||||||||
Purchases |
| 83,871 | 47,844 | 22,216 | 275 | 6,455 | 160,661 | |||||||||||||||||||||
Sales and repayments |
(4,106 | ) | (42,701 | ) | (14,000 | ) | | (48 | ) | | (60,855 | ) | ||||||||||||||||
Net realized gain from investments |
| 145 | | | | | 145 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of November 30, 2018 |
$ | | $ | 238,503 | $ | 129,477 | $ | 22,081 | $ | 15,314 | $ | 38,437 | $ | 443,812 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) for the period relating to those Level 3 assets that were still held by the Company at the end of the period |
$ | | $ | (1,154 | ) | $ | (1,312 | ) | $ | (135 | ) | $ | (1,287 | ) | $ | 1,439 | $ | (2,449 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of November 30, 2019 were as follows (dollars in thousands):
Fair Value | Valuation Technique | Unobservable Input | Range | Weighted Average* | ||||||||
First lien term loans |
$ | 302,773 | Market Comparables | Market Yield (%) | 8.0% - 12.9% | 10.2% | ||||||
EBITDA Multiples (x) | 3.0x | 3.0x | ||||||||||
Second lien term loans |
101,099 | Market Comparables | Market Yield (%) | 9.7% - 83.7% | 12.9% | |||||||
EBITDA Multiples (x) | 5.0x | 5.0x | ||||||||||
Unsecured term loans |
2,073 | Market Comparables | Market Yield (%) | 20.8% | 20.8% | |||||||
EBITDA Multiples (x) | 5.2x | 5.2x | ||||||||||
Structured finance securities |
34,306 | Discounted Cash Flow | Discount Rate (%) | 9.75% - 18.0% | 15.9% | |||||||
Recovery Rate (%) | 70.0% | 70.0% | ||||||||||
Prepayment Rate (%) | 20.0% | 20.0% | ||||||||||
Equity interests |
46,780 | Market Comparables | EBITDA Multiples (x) | 4.0x - 14.0x | 7.2x | |||||||
Revenue Multiples (x) | 0.6x - 43.2x | 7.5x | ||||||||||
|
|
|||||||||||
Total |
$ | 487,031 | ||||||||||
|
|
* | The weighted average in the table above is calculated based on each investments fair value weighting, using the applicable unobservable input. |
The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of February 28, 2019 were as follows (dollars in thousands):
Fair Value | Valuation Technique | Unobservable Input | Range | Weighted Average* | ||||||||||||||||
First lien term loans |
$ | 202,846 | Market Comparables | Market Yield (%) | 8.6% - 13.2% | 11.0% | ||||||||||||||
EBITDA Multiples (x) | 3.0x | 3.0x | ||||||||||||||||||
Second lien term loans |
125,786 | Market Comparables | Market Yield (%) | 10.5% - 41.1% | 12.8% | |||||||||||||||
EBITDA Multiples (x) | 5.0x | 5.0x | ||||||||||||||||||
Unsecured term loans |
2,100 | Market Comparables | Market Yield (%) | 15.00% | 15.0% | |||||||||||||||
EBITDA Multiples (x) | 4.8x | 4.8x | ||||||||||||||||||
Structured finance securities |
35,328 | Discounted Cash Flow | Discount Rate (%) | 9.0% - 15.0% | 13.6% | |||||||||||||||
Recovery Rate (%) | 70.0% | 70.0% | ||||||||||||||||||
Prepayment Rate (%) | 20.0% | 20.0% | ||||||||||||||||||
Equity interests |
35,960 | Market Comparables | EBITDA Multiples (x) | 4.0x - 14.7x | 6.7x | |||||||||||||||
Revenue Multiples (x) | 0.6x - 39.6x | 10.1x | ||||||||||||||||||
|
|
|||||||||||||||||||
Total |
$ | 402,020 | ||||||||||||||||||
|
|
* | The weighted average in the table above is calculated based on each investments fair value weighting, using the applicable unobservable input. |
For investments utilizing a market comparables valuation technique, a significant increase (decrease) in the market yield, in isolation, would result in a significantly lower (higher) fair value measurement, and a significant increase (decrease) in any of the earnings before interest, tax, depreciation and amortization (EBITDA) or revenue valuation multiples, in isolation, would result in a significantly higher (lower) fair value measurement. For investments utilizing a discounted cash flow valuation technique, a significant increase (decrease) in the discount rate and prepayment rate, in isolation, would result in a significantly lower (higher) fair value measurement while a significant increase (decrease) in recovery rate, in isolation, would result in a significantly higher (lower) fair value measurement. For investments utilizing a market quote in deriving a value, a significant increase (decrease) in the market quote, in isolation, would result in a significantly higher (lower) fair value measurement.
18
The composition of our investments as of November 30, 2019 at amortized cost and fair value was as follows (dollars in thousands):
Investments at Amortized Cost |
Amortized Cost Percentage of Total Portfolio |
Investments at Fair Value |
Fair Value Percentage of Total Portfolio |
|||||||||||||
First lien term loans |
$ | 302,926 | 62.8 | % | $ | 302,773 | 62.2 | % | ||||||||
Second lien term loans |
102,756 | 21.3 | 101,099 | 20.8 | ||||||||||||
Unsecured term loans |
2,216 | 0.5 | 2,073 | 0.4 | ||||||||||||
Structured finance securities |
34,268 | 7.1 | 34,306 | 7.0 | ||||||||||||
Equity interests |
39,850 | 8.3 | 46,780 | 9.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 482,016 | 100.0 | % | $ | 487,031 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
The composition of our investments as of February 28, 2019 at amortized cost and fair value was as follows (dollars in thousands):
Investments at Amortized Cost |
Amortized Cost Percentage of Total Portfolio |
Investments at Fair Value |
Fair Value Percentage of Total Portfolio |
|||||||||||||
First lien term loans |
$ | 202,328 | 50.3 | % | $ | 202,846 | 50.5 | % | ||||||||
Second lien term loans |
127,793 | 31.8 | 125,786 | 31.3 | ||||||||||||
Unsecured term loans |
2,217 | 0.6 | 2,100 | 0.5 | ||||||||||||
Structured finance securities |
33,516 | 8.3 | 35,328 | 8.8 | ||||||||||||
Equity interests |
36,062 | 9.0 | 35,960 | 8.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 401,916 | 100.0 | % | $ | 402,020 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
For loans and debt securities for which market quotations are not available, we determine their fair value based on third party indicative broker quotes, where available, or the assumptions that a hypothetical market participant would use to value the security in a current hypothetical sale using a market yield valuation methodology. In applying the market yield valuation methodology, we determine the fair value based on such factors as market participant assumptions including synthetic credit ratings, estimated remaining life, current market yield and interest rate spreads of similar securities as of the measurement date. If, in our judgment, the market yield methodology is not sufficient or appropriate, we may use additional methodologies such as an asset liquidation or expected recovery model.
For equity securities of portfolio companies and partnership interests, we determine the fair value based on the market approach with value then attributed to equity or equity like securities using the enterprise value waterfall valuation methodology. Under the enterprise value waterfall valuation methodology, we determine the enterprise fair value of the portfolio company and then waterfall the enterprise value over the portfolio companys securities in order of their preference relative to one another. To estimate the enterprise value of the portfolio company, we weigh some or all of the traditional market valuation methods and factors based on the individual circumstances of the portfolio company in order to estimate the enterprise value. The methodologies for performing investments may be based on, among other things: valuations of comparable public companies, recent sales of private and public comparable companies, discounting the forecasted cash flows of the portfolio company, third party valuations of the portfolio company, considering offers from third parties to buy the company, estimating the value to potential strategic buyers and considering the value of recent investments in the equity securities of the portfolio company. For non-performing investments, we may estimate the liquidation or collateral value of the portfolio companys assets and liabilities. We also take into account historical and anticipated financial results.
Our investment in Saratoga CLO is carried at fair value, which is based on a discounted cash flow model that utilizes prepayment, re-investment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow, and comparable yields for equity interests in collateralized loan obligation funds similar to Saratoga CLO, when available, as determined by our Manager and recommended to our board of directors. Specifically, we use Intex cash flow models, or an appropriate substitute, to form the basis for the valuation of our investment in Saratoga CLO. The models use a set of assumptions including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated valuations. The assumptions are based on available market data and projections provided by third parties as well as management estimates. In connection with the refinancing of the Saratoga CLO liabilities, we ran Intex models based on assumptions about the refinanced Saratoga CLOs structure, including capital structure, cost of liabilities and reinvestment period. We use the output from the Intex models (i.e., the estimated cash flows) to perform a discounted cash flow analysis on expected future cash flows to determine a valuation for our investment in Saratoga CLO at November 30, 2019. The inputs at November 30, 2019 for the valuation model include:
| Default rate: 2.0% |
19
| Recovery rate: 35-70% |
| Discount rate: 18.0% |
| Prepayment rate: 20.0% |
| Reinvestment rate / price: L+370bps / $99.50 |
Note 4. Investment in Saratoga Investment Corp. CLO 2013-1, Ltd. (Saratoga CLO)
On January 22, 2008, the Company entered into a collateral management agreement with Saratoga CLO, pursuant to which the Company acts as its collateral manager. The Saratoga CLO was initially refinanced in October 2013 with its reinvestment period extended to October 2016. On November 15, 2016, the Company completed a second refinancing of the Saratoga CLO with its reinvestment period extended to October 2018.
On August 7, 2018, the Company entered into an unsecured loan agreement (CLO 2013-1 Warehouse Loan) with Saratoga Investment Corp. CLO 2013-1 Warehouse, Ltd (CLO 2013-1 Warehouse), a wholly-owned subsidiary of Saratoga CLO, pursuant to which CLO 2013-1 Warehouse may borrow from time to time up to $20 million from the Company in order to provide capital necessary to support warehouse activities. The CLO 2013-1 Warehouse Loan, which expires on February 7, 2020, bears interest at an annual rate of 3M USD LIBOR + 7.5%. Interest accrued on the investment in the CLO 2013-1 Warehouse Loan is included in interest income on the Companys consolidated statement of operations. During the year ended February 28, 2019, the maximum amount invested by the Company in the CLO 2013-1 Warehouse Loan amounted to $20.0 million.
On December 14, 2018, the Company completed a third refinancing and upsize of the Saratoga CLO (the 2013-1 Reset CLO Notes). The third Saratoga CLO refinancing, among other things, extended its reinvestment period to January 2021, and extended its legal maturity date to January 2030. A non-call period ending January 2020 was also added. Following this refinancing, the Saratoga CLO portfolio increased from approximately $300.0 million in aggregate principal amount to approximately $500.0 million of predominantly senior secured first lien term loans. In addition to refinancing its liabilities, the Company invested an additional $13.8 million in all of the newly issued subordinated notes of the Saratoga CLO and also purchased $2.5 million in aggregate principal amount of the Class F-R-2 and $7.5 million aggregate principal amount of the Class G-R-2 notes tranches at par, with a coupon of LIBOR plus 8.75% and LIBOR plus 10.00%, respectively. As part of this refinancing, the Company also redeemed our existing $4.5 million aggregate amount of the Class F notes tranche at par.
The Saratoga CLO remains 100.0% owned and managed by the Company. We receive a base management fee of 0.10% per annum and a subordinated management fee of 0.40% per annum of the outstanding principal amount of Saratoga CLOs assets, paid quarterly to the extent of available proceeds. Following the third refinancing and the issuance of the 2013-1 Reset CLO Notes on December 14, 2018, we are no longer entitled to an incentive management fee equal to 20.0% of excess cash flow to the extent the Saratoga CLO subordinated notes receive an internal rate of return paid in cash equal to or greater than 12.0%.
For the three months ended November 30, 2019 and November 30, 2018, we accrued management fee income of $0.6 million and $0.4 million, respectively, and interest income of $1.0 million and $0.5 million, respectively, from the Saratoga CLO. For the three months ended November 30, 2018, we accrued $0.1 million related to the incentive management fee from Saratoga CLO.
For the nine months ended November 30, 2019 and November 30, 2018, we accrued management fee income of $1.9 million and $1.1 million, respectively, and interest income of $3.2 million and $2.0 million, respectively, from the Saratoga CLO. For the nine months ended November 30, 2018, we accrued $0.5 million related to the incentive management fee from Saratoga CLO.
As of November 30, 2019, the Company determined that the fair value of its investment in the subordinated notes of Saratoga CLO was $24.5 million. The Company determines the fair value of its investment in the subordinated notes of Saratoga CLO based on the present value of the projected future cash flows of the subordinated notes over the life of Saratoga CLO. As of November 30, 2019, the fair value of its investment in the Class F-R-2 Notes and G-R-2 Notes of Saratoga CLO was $2.5 million and $7.4 million, respectively. As of November 30, 2019, Saratoga CLO had investments with a principal balance of $510.9 million and a weighted average spread over LIBOR of 4.08% and had debt with a principal balance of $470.0 million with a weighted average spread over LIBOR of 2.0%. As a result, Saratoga CLO earns a spread between the interest income it receives on its investments and the interest expense it pays on its debt and other operating expenses, which is distributed quarterly to the Company as the holder of its subordinated notes. As of November 30, 2019, the present value of the projected future cash flows of the subordinated notes was approximately $24.9 million, using a 18.0% discount rate. The Companys total investment in the subordinate notes of Saratoga CLO is $43.8 million, which is comprised of the initial investment of $30.0 million in January 2008 plus the additional investment of $13.8 million in December 2018, and to date the Company has since received distributions of $58.7 million, management fees of $21.5 million and incentive fees of $1.2 million. In conjunction with the third refinancing of the 2013-1 Reset CLO Notes on December 14, 2018, the Company is no longer entitled to receive an incentive management fee from Saratoga CLO.
20
As of February 28, 2019, the Company determined that the fair value of its investment in the subordinated notes of Saratoga CLO was $25.4 million. The Company determines the fair value of its investment in the subordinated notes of Saratoga CLO based on the present value of the projected future cash flows of the subordinated notes over the life of Saratoga CLO. As of February 28, 2019, the fair value of its investment in the Class F-R-2 Notes and G-R-2 Notes of Saratoga CLO was $2.5 million and $7.5 million, respectively. As of February 28, 2019, Saratoga CLO had investments with a principal balance of $510.3 million and a weighted average spread over LIBOR of 4.0% and had debt with a principal balance of $470.0 million with a weighted average spread over LIBOR of 2.3%. As of February 28, 2019, the present value of the projected future cash flows of the subordinated notes was approximately $26.6 million, using a 15.0% discount rate.
Below is certain financial information from the separate financial statements of Saratoga CLO as of November 30, 2019 (unaudited) and February 28, 2019 and for the three and nine months ended November 30, 2019 (unaudited) and November 30, 2018 (unaudited).
21
Saratoga Investment Corp. CLO 2013-1, Ltd.
Statements of Assets and Liabilities
November 30, 2019 | February 28, 2019 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Investments at fair value |
||||||||
Loans at fair value (amortized cost of $505,796,917 and $506,145,483, respectively) |
$ | 485,195,070 | $ | 498,389,369 | ||||
Equities at fair value (amortized cost of $2,566,752 and $3,531,218, respectively) |
151 | 15,691 | ||||||
|
|
|
|
|||||
Total investments at fair value (amortized cost of $508,363,669 and $509,676,701, respectively) |
485,195,221 | 498,405,060 | ||||||
Cash and cash equivalents |
18,983,511 | 18,495,653 | ||||||
Receivable from open trades |
4,326,089 | 7,855,309 | ||||||
Interest receivable (net of reserve of $488,210 and $168,443, respectively) |
1,560,238 | 2,104,495 | ||||||
|
|
|
|
|||||
Total assets |
$ | 510,065,059 | $ | 526,860,517 | ||||
|
|
|
|
|||||
LIABILITIES |
||||||||
Interest payable |
$ | 2,259,612 | $ | 4,963,472 | ||||
Payable from open trades |
26,007,050 | 26,232,247 | ||||||
Accrued base management fee |
57,344 | 108,419 | ||||||
Accrued subordinated management fee |
229,376 | 433,675 | ||||||
Due to affiliate |
| 1,673,747 | ||||||
Accounts payable and accrued expenses |
95,650 | 1,221,110 | ||||||
Saratoga Investment Corp. CLO 2013-1, Ltd. Notes: |
||||||||
Class A-1FL-R-2 Senior Secured Floating Rate Notes |
255,000,000 | 255,000,000 | ||||||
Class A-1FXD-R-2 Senior Secured Fixed Rate Notes |
25,000,000 | 25,000,000 | ||||||
Class-A-2-R-2 Senior Secured Floating Rate Notes |
40,000,000 | 40,000,000 | ||||||
Class B-R-2 Senior Secured Floating Rate Notes |
59,500,000 | 59,500,000 | ||||||
Class C-R-2 Deferrable Mezzanine Floating Rate Notes |
22,500,000 | 22,500,000 | ||||||
Discount on Class C-R-2 Notes |
(544,026 | ) | (585,059 | ) | ||||
Class D-R-2 Deferrable Mezzanine Floating Rate Notes |
31,000,000 | 31,000,000 | ||||||
Discount on Class D-R-2 Notes |
(989,967 | ) | (1,064,636 | ) | ||||
Class E-1-R-2 Deferrable Mezzanine Floating Rate Notes |
27,000,000 | 27,000,000 | ||||||
Class E-2-R-2 Deferrable Mezzanine Fixed Rate Notes |
| | ||||||
Class F-R-2 Deferrable Junior Floating Rate Notes |
2,500,000 | 2,500,000 | ||||||
Class G-R-2 Deferrable Junior Floating Rate Notes |
7,500,000 | 7,500,000 | ||||||
Deferred debt financing costs |
(2,295,245 | ) | (2,465,897 | ) | ||||
Subordinated Notes |
69,500,000 | 69,500,000 | ||||||
Discount on Subordinated Notes |
(23,485,495 | ) | (25,256,892 | ) | ||||
|
|
|
|
|||||
Total liabilities |
$ | 540,834,299 | $ | 544,760,186 | ||||
|
|
|
|
|||||
NET ASSETS |
||||||||
Ordinary equity, par value $1.00, 250 ordinary shares authorized, 250 and 250 issued and outstanding, respectively |
$ | 250 | $ | 250 | ||||
Total distributable earnings (loss) |
(30,769,490 | ) | (17,899,919 | ) | ||||
|
|
|
|
|||||
Total net assets (deficit) |
(30,769,240 | ) | (17,899,669 | ) | ||||
|
|
|
|
|||||
Total liabilities and net assets |
$ | 510,065,059 | $ | 526,860,517 | ||||
|
|
|
|
22
Saratoga Investment Corp. CLO 2013-1, Ltd.
Statements of Operations
(unaudited)
For the three months ended | For the nine months ended | |||||||||||||||
November 30, 2019 | November 30, 2018 | November 30, 2019 | November 30, 2018 | |||||||||||||
INVESTMENT INCOME |
||||||||||||||||
Interest from investments |
$ | 8,052,668 | $ | 5,797,031 | $ | 24,560,867 | $ | 15,686,270 | ||||||||
Interest from cash and cash equivalents |
39,788 | 4,502 | 73,591 | 12,591 | ||||||||||||
Other income |
54,333 | 182,243 | 235,301 | 355,414 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment income |
8,146,789 | 5,983,776 | 24,869,759 | 16,054,275 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EXPENSES |
||||||||||||||||
Interest and debt financing expenses |
8,136,345 | 4,826,166 | 21,303,661 | 12,926,780 | ||||||||||||
Base management fee |
125,934 | 76,153 | 377,786 | 225,984 | ||||||||||||
Subordinated management fee |
503,737 | 304,612 | 1,511,146 | 903,937 | ||||||||||||
Incentive fees |
| 146,220 | | 497,427 | ||||||||||||
Professional fees |
37,967 | 136,219 | 250,679 | 249,665 | ||||||||||||
Trustee expenses |
56,810 | 15,396 | 194,825 | 76,092 | ||||||||||||
Miscellaneous fee expense |
(1,606 | ) | 6,885 | 42,128 | 36,692 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
8,859,187 | 5,511,651 | 23,680,225 | 14,916,577 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INVESTMENT INCOME (LOSS) |
(712,398 | ) | 472,125 | 1,189,534 | 1,137,698 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: |
||||||||||||||||
Net realized gain (loss) on investments |
| 11,948 | (2,162,298 | ) | (1,143,744 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(7,516,752 | ) | (4,467,273 | ) | (11,896,807 | ) | (5,017,702 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net realized and unrealized gain (loss) on investments |
(7,516,752 | ) | (4,455,325 | ) | (14,059,105 | ) | (6,161,446 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ | (8,229,150 | ) | $ | (3,983,200 | ) | $ | (12,869,571 | ) | $ | (5,023,748 | ) | ||||
|
|
|
|
|
|
|
|
23
Saratoga Investment Corp. CLO 2013-1, Ltd.
Schedule of Investments
November 30, 2019
(unaudited)
Issuer Name |
Industry |
Asset Name |
Asset Type |
Reference Rate/Spread | LIBOR Floor |
Current Rate (All In) |
Maturity Date |
Principal/ Number of Shares |
Cost | Fair Value | ||||||||||||||||||||||||||||||
Education Management II LLC |
Services: Consumer | Education Management II A-2 Preferred Shares | Equity | | 0.00 | % | 0.00 | % | 0.00 | % | | 1,897,538 | $ | 1,897,538 | $ | 17 | ||||||||||||||||||||||||
Education Management II LLC |
Services: Consumer | Education Management II A-1 Preferred Shares | Equity | | 0.00 | % | 0.00 | % | 0.00 | % | | 6,692 | 669,214 | 134 | ||||||||||||||||||||||||||
1011778 B.C. Unlimited Liability Company |
Beverage Food & Tobacco | Term Loan B4 | Loan | 1M USD LIBOR+ | 1.75 | % | 0.00 | % | 3.45 | % | 11/19/2026 | $ | 500,000 | 498,750 | 499,750 | |||||||||||||||||||||||||
24 Hour Fitness Worldwide Inc. |
Services: Consumer | Term Loan (5/18) | Loan | 1M USD LIBOR+ | 3.50 | % | 0.00 | % | 5.20 | % | 5/30/2025 | 2,967,462 | 2,956,896 | 2,192,213 | ||||||||||||||||||||||||||
ABB Con-Cise Optical Group LLC |
Consumer goods: Non-durable | Term Loan B | Loan | 6M USD LIBOR+ | 5.00 | % | 1.00 | % | 6.89 | % | 6/15/2023 | 2,087,306 | 2,066,066 | 1,967,286 | ||||||||||||||||||||||||||
Acosta Inc. (a) |
Media: Advertising Printing & Publishing | Term Loan B (1st Lien) | Loan | Prime+ | 0.00 | % | 0.00 | % | 4.75 | % | 9/27/2021 | 1,905,425 | 1,900,726 | 336,422 | ||||||||||||||||||||||||||
ADMI Corp. |
Services: Consumer | Term Loan B | Loan | 1M USD LIBOR+ | 2.75 | % | 0.00 | % | 4.45 | % | 4/30/2025 | 1,975,000 | 1,966,906 | 1,952,781 | ||||||||||||||||||||||||||
Advantage Sales & Marketing Inc. |
Services: Business | First Lien Term Loan | Loan | 1M USD LIBOR+ | 3.25 | % | 1.00 | % | 4.95 | % | 7/23/2021 | 2,377,387 | 2,376,188 | 2,238,310 | ||||||||||||||||||||||||||
Advantage Sales & Marketing Inc. |
Services: Business | Term Loan B Incremental | Loan | 1M USD LIBOR+ | 3.25 | % | 1.00 | % | 4.95 | % | 7/23/2021 | 491,206 | 486,073 | 461,940 | ||||||||||||||||||||||||||
Aegis Toxicology Sciences Corporation |
Healthcare & Pharmaceuticals | Term Loan | Loan | 3M USD LIBOR+ | 5.50 | % | 1.00 | % | 7.41 | % | 5/9/2025 | 3,960,000 | 3,928,328 | 3,766,950 | ||||||||||||||||||||||||||
Agiliti Health Inc. |
Healthcare & Pharmaceuticals | Term Loan (1/19) | Loan | 1M USD LIBOR+ | 3.00 | % | 0.00 | % | 4.70 | % | 1/5/2026 | 497,500 | 497,503 | 496,256 | ||||||||||||||||||||||||||
Agrofresh Inc. |
Beverage Food & Tobacco | Term Loan | Loan | 1M USD LIBOR+ | 4.75 | % | 1.00 | % | 6.45 | % | 7/30/2021 | 2,897,051 | 2,893,850 | 2,513,192 | ||||||||||||||||||||||||||
AI Mistral (Luxembourg) Subco Sarl |
High Tech Industries | Term Loan | Loan | 1M USD LIBOR+ | 3.00 | % | 1.00 | % | 4.70 | % | 3/11/2024 | 487,500 | 487,500 | 382,995 | ||||||||||||||||||||||||||
AIS Holdco LLC |
Services: Business | Term Loan | Loan | 3M USD LIBOR+ | 5.00 | % | 0.00 | % | 6.91 | % | 8/15/2025 | 2,437,500 | 2,426,780 | 2,291,250 | ||||||||||||||||||||||||||
Albertsons LLC |
Retail | Term Loan B7 (08/19) | Loan | 1M USD LIBOR+ | 2.75 | % | 0.75 | % | 4.45 | % | 11/17/2025 | 1,572,385 | 1,565,059 | 1,582,778 | ||||||||||||||||||||||||||
Alchemy US Holdco 1 LLC |
Metals & Mining | Term Loan | Loan | 1M USD LIBOR+ | 5.50 | % | 0.00 | % | 7.20 | % | 10/10/2025 | 1,962,500 | 1,936,691 | 1,929,393 | ||||||||||||||||||||||||||
Alera Group Intermediate Holdings Inc. |
Banking Finance Insurance & Real Estate | Term Loan B | Loan | 1M USD LIBOR+ | 4.50 | % | 0.00 | % | 6.20 | % | 8/1/2025 | 495,000 | 493,961 | 496,237 | ||||||||||||||||||||||||||
Alion Science and Technology Corporation |
Aerospace & Defense | Term Loan B (1st Lien) | Loan | 1M USD LIBOR+ | 4.50 | % | 1.00 | % | 6.20 | % | 8/19/2021 | 3,607,276 | 3,602,472 | 3,607,276 | ||||||||||||||||||||||||||
Allen Media LLC |
Media: Diversified & Production | Term Loan B | Loan | 3M USD LIBOR+ | 6.50 | % | 1.00 | % | 8.41 | % | 8/30/2023 | 2,885,693 | 2,828,522 | 2,755,837 | ||||||||||||||||||||||||||
Altisource S.a r.l. |
Banking Finance Insurance & Real Estate | Term Loan B (03/18) | Loan | 3M USD LIBOR+ | 4.00 | % | 1.00 | % | 5.91 | % | 4/3/2024 | 1,454,005 | 1,445,993 | 1,377,670 | ||||||||||||||||||||||||||
Altra Industrial Motion Corp. |
Capital Equipment | Term Loan | Loan | 1M USD LIBOR+ | 2.00 | % | 0.00 | % | 3.70 | % | 10/1/2025 | 1,805,969 | 1,801,994 | 1,800,894 | ||||||||||||||||||||||||||
American Dental Partners Inc. |
Healthcare & Pharmaceuticals | Term Loan B | Loan | 3M USD LIBOR+ | 4.25 | % | 1.00 | % | 6.16 | % | 3/24/2023 | 992,500 | 983,902 | 977,613 | ||||||||||||||||||||||||||
American Greetings Corporation |
Media: Advertising Printing & Publishing | Term Loan | Loan | 1M USD LIBOR+ | 4.50 | % | 1.00 | % | 6.20 | % | 4/5/2024 | 4,944,799 | 4,941,922 | 4,774,846 | ||||||||||||||||||||||||||
American Residential Services LLC |
Services: Consumer | Term Loan B | Loan | 1M USD LIBOR+ | 4.00 | % | 1.00 | % | 5.70 | % | 6/30/2022 | 3,936,046 | 3,925,777 | 3,827,805 | ||||||||||||||||||||||||||
Amynta Agency Borrower Inc. |
Banking Finance Insurance & Real Estate | Term Loan | Loan | 1M USD LIBOR+ | 4.50 | % | 0.00 | % | 6.20 | % | 2/28/2025 | 3,471,143 | 3,432,963 | 3,228,163 | ||||||||||||||||||||||||||
Anastasia Parent LLC |
Consumer goods: Non-durable | Term Loan | Loan | 1M USD LIBOR+ | 3.75 | % | 0.00 | % | 5.45 | % | 8/11/2025 | 990,000 | 985,752 | 805,197 | ||||||||||||||||||||||||||
Anchor Glass Container Corporation |
Containers Packaging & Glass | Term Loan (07/17) | Loan | 1M USD LIBOR+ | 2.75 | % | 1.00 | % | 4.45 | % | 12/7/2023 | 486,306 | 484,707 | 336,310 | ||||||||||||||||||||||||||
Api Group DE Inc |
Services: Business | Term Loan B | Loan | 1M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.20 | % | 10/1/2026 | 1,000,000 | 995,052 | 1,004,380 | ||||||||||||||||||||||||||
Arctic Glacier U.S.A. Inc. |
Beverage Food & Tobacco | Term Loan (3/18) | Loan | 1M USD LIBOR+ | 3.50 | % | 1.00 | % | 5.20 | % | 3/20/2024 | 3,350,967 | 3,331,589 | 3,163,883 | ||||||||||||||||||||||||||
Aretec Group Inc. |
Banking Finance Insurance & Real Estate | Term Loan (10/18) | Loan | 1M USD LIBOR+ | 4.25 | % | 0.00 | % | 5.95 | % | 10/1/2025 | 1,985,000 | 1,980,601 | 1,877,076 | ||||||||||||||||||||||||||
Arnotts Biscuits Limited |
Beverage Food & Tobacco | Term Loan | Loan | 3M USD LIBOR+ | 4.00 | % | 0.00 | % | 5.91 | % | 10/16/2026 | 1,000,000 | 990,000 | 998,130 | ||||||||||||||||||||||||||
ASG Technologies Group Inc. |
High Tech Industries | Term Loan | Loan | 1M USD LIBOR+ | 3.50 | % | 1.00 | % | 5.20 | % | 7/31/2024 | 490,022 | 488,249 | 483,284 | ||||||||||||||||||||||||||
AssetMark Financial Holdings Inc. |
Banking Finance Insurance & Real Estate | Term Loan | Loan | 3M USD LIBOR+ | 3.25 | % | 0.00 | % | 5.16 | % | 11/14/2025 | 1,237,500 | 1,235,491 | 1,243,688 | ||||||||||||||||||||||||||
Astoria Energy LLC |
Energy: Electricity | Term Loan | Loan | 1M USD LIBOR+ | 4.00 | % | 1.00 | % | 5.70 | % | 12/24/2021 | 1,394,701 | 1,388,193 | 1,393,390 | ||||||||||||||||||||||||||
Asurion LLC |
Banking Finance Insurance & Real Estate | Term Loan B-4 (Replacement) | Loan | 1M USD LIBOR+ | 3.00 | % | 0.00 | % | 4.70 | % | 8/4/2022 | 1,882,889 | 1,877,550 | 1,886,033 | ||||||||||||||||||||||||||
Asurion LLC |
Banking Finance Insurance & Real Estate | Term Loan B6 | Loan | 1M USD LIBOR+ | 3.00 | % | 0.00 | % | 4.70 | % | 11/3/2023 | 494,068 | 490,915 | 494,607 | ||||||||||||||||||||||||||
Athenahealth Inc. |
Healthcare & Pharmaceuticals | Term Loan B | Loan | 3M USD LIBOR+ | 4.50 | % | 0.00 | % | 6.41 | % | 2/11/2026 | 1,990,000 | 1,953,563 | 1,986,020 | ||||||||||||||||||||||||||
Avaya Inc. |
Telecommunications | Term Loan B | Loan | 1M USD LIBOR+ | 4.25 | % | 0.00 | % | 5.95 | % | 12/16/2024 | 3,169,156 | 3,137,037 | 3,010,698 | ||||||||||||||||||||||||||
Avison Young (Canada) Inc. |
Services: Business | Term Loan | Loan | 3M USD LIBOR+ | 5.00 | % | 0.00 | % | 6.91 | % | 1/30/2026 | 3,485,000 | 3,425,613 | 3,412,407 | ||||||||||||||||||||||||||
B&G Foods Inc. |
Beverage Food & Tobacco | Term Loan | Loan | 1M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.20 | % | 10/10/2026 | 250,000 | 248,767 | 251,458 | ||||||||||||||||||||||||||
Ball Metalpack Finco LLC |
Containers Packaging & Glass | Term Loan | Loan | 3M USD LIBOR+ | 4.50 | % | 0.00 | % | 6.41 | % | 7/31/2025 | 3,954,950 | 3,937,748 | 3,355,103 | ||||||||||||||||||||||||||
Bausch Health Companies Inc. |
Healthcare & Pharmaceuticals | Term Loan B (05/18) | Loan | 1M USD LIBOR+ | 3.00 | % | 0.00 | % | 4.70 | % | 6/2/2025 | 25,765 | 25,677 | 25,872 | ||||||||||||||||||||||||||
Berry Global Inc. |
Chemicals Plastics & Rubber | Term Loan U | Loan | 1M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.20 | % | 7/1/2026 | 4,987,500 | 4,975,486 | 5,007,749 | ||||||||||||||||||||||||||
Blount International Inc. |
Forest Products & Paper | Term Loan B (09/18) | Loan | 6M USD LIBOR+ | 3.75 | % | 1.00 | % | 5.64 | % | 4/12/2023 | 3,462,525 | 3,459,415 | 3,461,452 | ||||||||||||||||||||||||||
Blucora Inc. |
Services: Consumer | Term Loan (11/17) | Loan | 1M USD LIBOR+ | 3.00 | % | 1.00 | % | 4.70 | % | 5/22/2024 | 956,667 | 954,009 | 957,862 | ||||||||||||||||||||||||||
Bombardier Recreational Products Inc. |
Consumer goods: Durable | Incremental Term Loan B2 | Loan | 1M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.20 | % | 5/23/2025 | 997,500 | 987,909 | 998,498 | ||||||||||||||||||||||||||
Boxer Parent Company Inc. |
Services: Business | Term Loan | Loan | 1M USD LIBOR+ | 4.25 | % | 0.00 | % | 5.95 | % | 10/2/2025 | 2,481,250 | 2,459,852 | 2,382,000 | ||||||||||||||||||||||||||
Bracket Intermediate Holding Corp. |
Healthcare & Pharmaceuticals | Term Loan | Loan | 3M USD LIBOR+ | 4.25 | % | 0.00 | % | 6.16 | % | 9/5/2025 | 990,000 | 985,761 | 972,675 | ||||||||||||||||||||||||||
Broadstreet Partners Inc. |
Banking Finance Insurance & Real Estate | Term Loan B2 | Loan | 1M USD LIBOR+ | 3.25 | % | 1.00 | % | 4.95 | % | 11/8/2023 | 1,027,255 | 1,025,361 | 1,025,971 | ||||||||||||||||||||||||||
Brookfield WEC Holdings Inc. |
Energy: Electricity | Term Loan | Loan | 1M USD LIBOR+ | 3.50 | % | 0.75 | % | 5.20 | % | 8/1/2025 | 498,744 | 497,531 | 499,058 | ||||||||||||||||||||||||||
Buckeye Partners L.P. |
Utilities: Oil & Gas | Term Loan | Loan | 1M USD LIBOR+ | 2.75 | % | 0.00 | % | 4.45 | % | 11/2/2026 | 1,000,000 | 995,080 | 1,007,500 | ||||||||||||||||||||||||||
BW Gas & Convenience Holdings LLC |
Beverage Food & Tobacco | Term Loan | Loan | 1M USD LIBOR+ | 6.25 | % | 0.00 | % | 7.95 | % | 11/18/2024 | 3,000,000 | 2,880,000 | 2,917,500 | ||||||||||||||||||||||||||
Cable & Wireless Communications Limited |
Telecommunications | Term Loan B4 | Loan | 1M USD LIBOR+ | 3.25 | % | 0.00 | % | 4.95 | % | 1/30/2026 | 2,186,667 | 2,184,527 | 2,190,778 | ||||||||||||||||||||||||||
Calceus Acquisition Inc. |
Consumer goods: Non-durable | Term Loan B | Loan | 1M USD LIBOR+ | 5.50 | % | 0.00 | % | 7.20 | % | 2/12/2025 | 981,250 | 970,154 | 978,797 | ||||||||||||||||||||||||||
Callaway Golf Company |
Retail | Term Loan B | Loan | 1M USD LIBOR+ | 4.50 | % | 0.00 | % | 6.20 | % | 1/2/2026 | 699,375 | 686,170 | 705,495 | ||||||||||||||||||||||||||
Canyon Valor Companies Inc. |
Media: Advertising Printing & Publishing | Term Loan B | Loan | 3M USD LIBOR+ | 2.75 | % | 0.00 | % | 4.66 | % | 6/16/2023 | 931,691 | 929,520 | 932,045 | ||||||||||||||||||||||||||
CareerBuilder LLC |
Services: Business | Term Loan | Loan | 3M USD LIBOR+ | 6.75 | % | 1.00 | % | 8.66 | % | 7/31/2023 | 2,266,211 | 2,229,942 | 2,246,382 | ||||||||||||||||||||||||||
CareStream Health Inc. |
High Tech Industries | Term Loan | Loan | 1M USD LIBOR+ | 5.50 | % | 1.00 | % | 7.20 | % | 2/28/2021 | 2,369,831 | 2,362,759 | 2,297,266 | ||||||||||||||||||||||||||
Casa Systems Inc. |
Telecommunications | Term Loan | Loan | 1M USD LIBOR+ | 4.00 | % | 1.00 | % | 5.70 | % | 12/20/2023 | 1,458,750 | 1,449,364 | 1,152,413 | ||||||||||||||||||||||||||
CCS-CMGC Holdings Inc. |
Healthcare & Pharmaceuticals | Term Loan | Loan | 3M USD LIBOR+ | 5.50 | % | 0.00 | % | 7.41 | % | 10/1/2025 | 2,481,250 | 2,459,195 | 2,378,898 | ||||||||||||||||||||||||||
Cengage Learning Inc. |
Media: Advertising Printing & Publishing | Term Loan | Loan | 1M USD LIBOR+ | 4.25 | % | 1.00 | % | 5.95 | % | 6/7/2023 | 1,451,208 | 1,438,133 | 1,326,448 | ||||||||||||||||||||||||||
CenturyLink Inc. |
Telecommunications | Term Loan B | Loan | 1M USD LIBOR+ | 2.75 | % | 0.00 | % | 4.45 | % | 1/31/2025 | 3,939,924 | 3,919,349 | 3,939,373 | ||||||||||||||||||||||||||
Citadel Securities LP |
Banking Finance Insurance & Real Estate | Term Loan B | Loan | 1M USD LIBOR+ | 3.50 | % | 0.00 | % | 5.20 | % | 2/27/2026 | 995,000 | 993,778 | 998,731 | ||||||||||||||||||||||||||
Clarios Global LP |
Automotive | Term Loan B | Loan | 1M USD LIBOR+ | 3.50 | % | 0.00 | % | 5.20 | % | 4/30/2026 | 1,500,000 | 1,485,484 | 1,499,070 | ||||||||||||||||||||||||||
Compass Power Generation L.L.C. |
Utilities: Electric | Term Loan B (08/18) | Loan | 1M USD LIBOR+ | 3.50 | % | 1.00 | % | 5.20 | % | 12/20/2024 | 1,938,014 | 1,933,301 | 1,936,405 | ||||||||||||||||||||||||||
Compuware Corporation |
High Tech Industries | Term Loan (08/18) | Loan | 1M USD LIBOR+ | 4.00 | % | 0.00 | % | 5.70 | % | 8/22/2025 | 496,250 | 495,170 | 498,111 | ||||||||||||||||||||||||||
Concentra Inc. |
Healthcare & Pharmaceuticals | Term Loan B-1 | Loan | 6M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.39 | % | 6/1/2022 | 250,000 | 248,839 | 249,895 | ||||||||||||||||||||||||||
Concordia International Corp. |
Healthcare & Pharmaceuticals | Term Loan | Loan | |
1W USD LIBOR+ |
|
5.50 | % | 1.00 | % | 7.03 | % | 9/6/2024 | 1,189,720 | 1,134,822 | 1,102,573 | ||||||||||||||||||||||||
Connect US Finco LLC |
Telecommunications | Term Loan B | Loan | 3M USD LIBOR+ | 4.50 | % | 1.00 | % | 6.41 | % | 9/23/2026 | 2,000,000 | 1,960,000 | 1,991,260 | ||||||||||||||||||||||||||
Consolidated Aerospace Manufacturing LLC |
Aerospace & Defense | Term Loan (1st Lien) | Loan | 1M USD LIBOR+ | 3.75 | % | 1.00 | % | 5.45 | % | 8/11/2022 | 2,414,796 | 2,409,385 | 2,399,703 | ||||||||||||||||||||||||||
Consolidated Communications Inc. |
Telecommunications | Term Loan B | Loan | 1M USD LIBOR+ | 3.00 | % | 1.00 | % | 4.70 | % | 10/5/2023 | 1,479,196 | 1,467,949 | 1,364,100 | ||||||||||||||||||||||||||
Covia Holdings Corporation |
Metals & Mining | Term Loan | Loan | 3M USD LIBOR+ | 4.00 | % | 1.00 | % | 5.91 | % | 6/2/2025 | 987,500 | 987,500 | 691,477 | ||||||||||||||||||||||||||
CPI Acquisition Inc. |
Banking Finance Insurance & Real Estate | Term Loan B (1st Lien) | Loan | 3M USD LIBOR+ | 4.50 | % | 1.00 | % | 6.41 | % | 8/17/2022 | 1,436,782 | 1,426,941 | 1,081,580 | ||||||||||||||||||||||||||
Crown Subsea Communications Holding Inc |
Construction & Building | Term Loan | Loan | 1M USD LIBOR+ | 6.00 | % | 0.00 | % | 7.70 | % | 11/3/2025 | 2,231,270 | 2,209,380 | 2,222,902 | ||||||||||||||||||||||||||
CSC Holdings LLC |
Media: Broadcasting & Subscription | Term Loan B (03/17) | Loan | 1M USD LIBOR+ | 2.25 | % | 0.00 | % | 3.95 | % | 7/17/2025 | 1,979,696 | 1,956,428 | 1,972,549 | ||||||||||||||||||||||||||
CSC Holdings LLC |
Media: Broadcasting & Subscription | Term Loan B-5 | Loan | 1M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.20 | % | 4/15/2027 | 500,000 | 500,000 | 500,250 | ||||||||||||||||||||||||||
CSC Holdings LLC |
Media: Broadcasting & Subscription | Term Loan B | Loan | 1M USD LIBOR+ | 2.25 | % | 0.00 | % | 3.95 | % | 1/15/2026 | 496,250 | 495,163 | 494,761 | ||||||||||||||||||||||||||
CT Technologies Intermediate Hldgs Inc. |
Healthcare & Pharmaceuticals | New Term Loan | Loan | 1M USD LIBOR+ | 4.25 | % | 1.00 | % | 5.95 | % | 12/1/2021 | 1,429,069 | 1,424,005 | 1,321,889 | ||||||||||||||||||||||||||
Daseke Companies Inc. |
Transportation: Cargo | Replacement Term Loan | Loan | 1M USD LIBOR+ | 5.00 | % | 1.00 | % | 6.70 | % | 2/27/2024 | 1,960,683 | 1,951,299 | 1,833,239 | ||||||||||||||||||||||||||
DaVita Inc. |
High Tech Industries | Term Loan B | Loan | 1M USD LIBOR+ | 2.25 | % | 0.00 | % | 3.95 | % | 8/12/2026 | 1,000,000 | 997,535 | 1,004,730 | ||||||||||||||||||||||||||
DCert Buyer Inc. |
High Tech Industries | Term Loan | Loan | 1M USD LIBOR+ | 4.00 | % | 0.00 | % | 5.70 | % | 10/16/2026 | 1,500,000 | 1,496,274 | 1,491,000 | ||||||||||||||||||||||||||
Dealer Tire LLC |
Automotive | Term Loan B | Loan | 1M USD LIBOR+ | 5.50 | % | 0.00 | % | 7.20 | % | 12/12/2025 | 2,985,000 | 2,880,466 | 2,981,269 | ||||||||||||||||||||||||||
Delek US Holdings Inc. |
Utilities: Oil & Gas | Term Loan B | Loan | 1M USD LIBOR+ | 2.25 | % | 0.00 | % | 3.95 | % | 3/31/2025 | 6,462,334 | 6,392,397 | 6,371,861 | ||||||||||||||||||||||||||
Dell International L.L.C. |
High Tech Industries | Term Loan B-1 | Loan | 1M USD LIBOR+ | 2.00 | % | 0.75 | % | 3.70 | % | 9/19/2025 | 3,823,990 | 3,819,277 | 3,844,066 | ||||||||||||||||||||||||||
Delta 2 (Lux) SARL |
Hotel Gaming & Leisure | Term Loan B | Loan | 1M USD LIBOR+ | 2.50 | % | 1.00 | % | 4.20 | % | 2/1/2024 | 1,318,289 | 1,315,764 | 1,310,050 | ||||||||||||||||||||||||||
DHX Media Ltd. |
Media: Broadcasting & Subscription | Term Loan | Loan | 1M USD LIBOR+ | 4.25 | % | 1.00 | % | 5.95 | % | 12/29/2023 | 279,282 | 277,960 | 274,627 | ||||||||||||||||||||||||||
Diamond Sports Group LLC |
Media: Broadcasting & Subscription | Term Loan | Loan | 1M USD LIBOR+ | 3.25 | % | 0.00 | % | 4.95 | % | 8/24/2026 | 1,000,000 | 995,125 | 996,560 | ||||||||||||||||||||||||||
Digital Room Holdings Inc. |
Media: Advertising Printing & Publishing | Term Loan | Loan | 1M USD LIBOR+ | 5.00 | % | 0.00 | % | 6.70 | % | 5/21/2026 | 2,992,500 | 2,950,572 | 2,693,250 | ||||||||||||||||||||||||||
Dole Food Company Inc. |
Beverage Food & Tobacco | Term Loan B | Loan | 1M USD LIBOR+ | 2.75 | % | 1.00 | % | 4.45 | % | 4/8/2024 | 471,875 | 470,357 | 465,844 | ||||||||||||||||||||||||||
DRW Holdings LLC |
Banking Finance Insurance & Real Estate | Term Loan B | Loan | 1M USD LIBOR+ | 4.25 | % | 0.00 | % | 5.95 | % | 11/27/2026 | 5,000,000 | 4,950,000 | 4,962,500 | ||||||||||||||||||||||||||
DTZ U.S. Borrower LLC |
Construction & Building | Term Loan B | Loan | 1M USD LIBOR+ | 3.25 | % | 0.00 | % | 4.95 | % | 8/21/2025 | 3,955,038 | 3,938,212 | 3,959,981 | ||||||||||||||||||||||||||
DynCorp International Inc. |
Aerospace & Defense | Term Loan B | Loan | 1M USD LIBOR+ | 6.00 | % | 1.00 | % | 7.70 | % | 8/18/2025 | 3,000,000 | 2,912,737 | 2,970,000 | ||||||||||||||||||||||||||
Eagletree-Carbide Acquisition Corp. |
Consumer goods: Durable | Term Loan | Loan | 3M USD LIBOR+ | 4.25 | % | 1.00 | % | 6.16 | % | 8/28/2024 | 3,937,408 | 3,920,581 | 3,838,973 | ||||||||||||||||||||||||||
EIG Investors Corp. |
High Tech Industries | Term Loan (06/18) | Loan | 3M USD LIBOR+ | 3.75 | % | 1.00 | % | 5.66 | % | 2/9/2023 | 2,290,552 | 2,276,129 | 2,151,698 | ||||||||||||||||||||||||||
Encapsys LLC |
Chemicals Plastics & Rubber | Term Loan | Loan | 1M USD LIBOR+ | 3.50 | % | 1.00 | % | 5.20 | % | 11/7/2024 | 498,714 | 493,972 | 499,547 | ||||||||||||||||||||||||||
Endo Luxembourg Finance Company I S.a.r.l. |
Healthcare & Pharmaceuticals | Term Loan B (4/17) | Loan | 1M USD LIBOR+ | 4.25 | % | 0.75 | % | 5.95 | % | 4/29/2024 | 3,947,120 | 3,924,139 | 3,618,049 | ||||||||||||||||||||||||||
Energy Acquisition LP |
Capital Equipment | Term Loan (6/18) | Loan | 3M USD LIBOR+ | 4.25 | % | 0.00 | % | 6.16 | % | 6/26/2025 | 1,975,000 | 1,960,754 | 1,738,000 | ||||||||||||||||||||||||||
Envision Healthcare Corporation |
Healthcare & Pharmaceuticals | Term Loan B (06/18) | Loan | 1M USD LIBOR+ | 3.75 | % | 0.00 | % | 5.45 | % | 10/10/2025 | 4,962,500 | 4,951,919 | 3,877,648 | ||||||||||||||||||||||||||
FinCo I LLC |
Banking Finance Insurance & Real Estate | 2018 Term Loan B | Loan | 1M USD LIBOR+ | 2.00 | % | 0.00 | % | 3.70 | % | 12/27/2022 | 360,538 | 359,875 | 361,338 | ||||||||||||||||||||||||||
First Eagle Holdings Inc. |
Banking Finance Insurance & Real Estate | Term Loan B (10/18) | Loan | 3M USD LIBOR+ | 2.75 | % | 0.00 | % | 4.66 | % | 12/2/2024 | 4,962,500 | 4,938,670 | 4,953,220 | ||||||||||||||||||||||||||
Fitness International LLC |
Services: Consumer | Term Loan B (4/18) | Loan | 1M USD LIBOR+ | 3.25 | % | 0.00 | % | 4.95 | % | 4/18/2025 | 2,205,656 | 2,193,336 | 2,185,673 | ||||||||||||||||||||||||||
Franklin Square Holdings L.P. |
Banking Finance Insurance & Real Estate | Term Loan | Loan | 1M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.20 | % | 8/1/2025 | 4,455,000 | 4,424,012 | 4,474,513 | ||||||||||||||||||||||||||
Fusion Connect |
Telecommunications | Non-Consenting Term Loan B | Loan | Prime+ | 4.75 | % | 0.00 | % | 5.75 | % | 10/3/2019 | 2,031,731 | 1,975,959 | 1,069,688 | ||||||||||||||||||||||||||
Fusion Connect Inc. |
Telecommunications | Term Loan | Loan | 1M USD LIBOR+ | 10.00 | % | 0.00 | % | 11.70 | % | 10/3/2019 | 132,539 | 132,059 | 130,551 | ||||||||||||||||||||||||||
GBT Group Services B.V. |
Hotel Gaming & Leisure | Term Loan | Loan | 3M USD LIBOR+ | 2.50 | % | 0.00 | % | 4.41 | % | 8/13/2025 | 4,455,000 | 4,453,928 | 4,466,138 | ||||||||||||||||||||||||||
GC EOS Buyer Inc. |
Automotive | Term Loan B (06/18) | Loan | 1M USD LIBOR+ | 4.50 | % | 0.00 | % | 6.20 | % | 8/1/2025 | 2,970,000 | 2,947,515 | 2,871,634 | ||||||||||||||||||||||||||
General Nutrition Centers Inc. |
Retail | Term Loan B2 | Loan | 2M USD LIBOR+ | 8.75 | % | 0.75 | % | 10.57 | % | 3/4/2021 | 930,446 | 928,627 | 885,673 | ||||||||||||||||||||||||||
General Nutrition Centers Inc. |
Retail | FILO Term Loan | Loan | 1M USD LIBOR+ | 7.00 | % | 0.00 | % | 8.70 | % | 1/3/2023 | 585,849 | 584,624 | 584,220 | ||||||||||||||||||||||||||
Genesee & Wyoming Inc. |
Transportation: Cargo | Term Loan | Loan | 3M USD LIBOR+ | 2.00 | % | 0.00 | % | 3.91 | % | 11/6/2026 | 1,500,000 | 1,492,500 | 1,509,915 | ||||||||||||||||||||||||||
GI Chill Acquisition LLC |
Services: Business | Term Loan | Loan | 3M USD LIBOR+ | 4.00 | % | 0.00 | % | 5.91 | % | 8/6/2025 | 2,475,000 | 2,464,298 | 2,437,875 | ||||||||||||||||||||||||||
GI Revelation Acquisition LLC |
Services: Business | Term Loan | Loan | 1M USD LIBOR+ | 5.00 | % | 0.00 | % | 6.70 | % | 4/16/2025 | 1,234,994 | 1,229,701 | 1,148,544 | ||||||||||||||||||||||||||
Gigamon Inc. |
Services: Business | Term Loan B | Loan | 1M USD LIBOR+ | 4.25 | % | 1.00 | % | 5.95 | % | 12/27/2024 | 1,965,000 | 1,949,434 | 1,940,438 | ||||||||||||||||||||||||||
Global Tel*Link Corporation |
Telecommunications | Term Loan B | Loan | 1M USD LIBOR+ | 4.25 | % | 0.00 | % | 5.95 | % | 11/28/2025 | 3,047,426 | 3,047,426 | 2,590,312 | ||||||||||||||||||||||||||
Go Wireless Inc. |
Telecommunications | Term Loan | Loan | 1M USD LIBOR+ | 6.50 | % | 1.00 | % | 8.20 | % | 12/22/2024 | 3,247,078 | 3,203,537 | 3,117,195 | ||||||||||||||||||||||||||
Goodyear Tire & Rubber Company The |
Chemicals Plastics & Rubber | Second Lien Term Loan | Loan | 3M USD LIBOR+ | 2.00 | % | 0.00 | % | 3.91 | % | 3/7/2025 | 2,000,000 | 2,000,000 | 1,985,000 | ||||||||||||||||||||||||||
Greenhill & Co. Inc. |
Banking Finance Insurance & Real Estate | Term Loan B | Loan | 1M USD LIBOR+ | 3.25 | % | 0.00 | % | 4.95 | % | 4/12/2024 | 3,825,000 | 3,784,189 | 3,691,125 | ||||||||||||||||||||||||||
Grosvenor Capital Management Holdings LLLP |
Banking Finance Insurance & Real Estate | Term Loan B | Loan | 1M USD LIBOR+ | 2.75 | % | 1.00 | % | 4.45 | % | 3/28/2025 | 898,530 | 894,749 | 901,342 | ||||||||||||||||||||||||||
Guidehouse LLP |
Aerospace & Defense | Term Loan | Loan | 1M USD LIBOR+ | 4.50 | % | 0.00 | % | 6.20 | % | 5/1/2025 | 3,975,000 | 3,951,121 | 3,890,531 | ||||||||||||||||||||||||||
Harland Clarke Holdings Corp. |
Media: Advertising Printing & Publishing | Term Loan | Loan | 3M USD LIBOR+ | 4.75 | % | 1.00 | % | 6.66 | % | 11/3/2023 | 1,750,615 | 1,742,814 | 1,304,208 | ||||||||||||||||||||||||||
HD Supply Waterworks Ltd. |
Construction & Building | Term Loan | Loan | 3M USD LIBOR+ | 2.75 | % | 1.00 | % | 4.66 | % | 8/1/2024 | 490,000 | 489,045 | 483,263 | ||||||||||||||||||||||||||
Helix Acquisition Holdings Inc. |
Capital Equipment | Term Loan (2019 Incremental) | Loan | 3M USD LIBOR+ | 3.75 | % | 0.00 | % | 5.66 | % | 9/30/2024 | 2,985,000 | 2,930,173 | 2,790,975 | ||||||||||||||||||||||||||
Helix Gen Funding LLC |
Energy: Electricity | Term Loan B (02/17) | Loan | 1M USD LIBOR+ | 3.75 | % | 1.00 | % | 5.45 | % | 6/3/2024 | 264,030 | 263,663 | 252,550 | ||||||||||||||||||||||||||
HLF Financing SaRL LLC |
Consumer goods: Non-durable | Term Loan B (08/18) | Loan | 1M USD LIBOR+ | 3.25 | % | 0.00 | % | 4.95 | % | 8/18/2025 | 3,960,000 | 3,944,544 | 3,973,187 | ||||||||||||||||||||||||||
Holley Purchaser Inc. |
Automotive | Term Loan B | Loan | 3M USD LIBOR+ | 5.00 | % | 0.00 | % | 6.91 | % | 10/24/2025 | 2,481,250 | 2,459,539 | 2,344,781 | ||||||||||||||||||||||||||
Hudson River Trading LLC |
Banking Finance Insurance & Real Estate | Term Loan B (10/18) | Loan | 1M USD LIBOR+ | 3.50 | % | 0.00 | % | 5.20 | % | 4/3/2025 | 4,447,587 | 4,426,283 | 4,444,830 | ||||||||||||||||||||||||||
Hyperion Refinance S.a.r.l. |
Banking Finance Insurance & Real Estate | Tem Loan (12/17) | Loan | 1M USD LIBOR+ | 3.50 | % | 1.00 | % | 5.20 | % | 12/20/2024 | 1,714,143 | 1,705,912 | 1,713,183 | ||||||||||||||||||||||||||
Idera Inc. |
High Tech Industries | Term Loan B | Loan | 1M USD LIBOR+ | 4.50 | % | 1.00 | % | 6.20 | % | 6/28/2024 | 2,947,277 | 2,926,110 | 2,933,779 | ||||||||||||||||||||||||||
IG Investments Holdings LLC |
Services: Business | Term Loan | Loan | 1M USD LIBOR+ | 4.00 | % | 1.00 | % | 5.70 | % | 5/23/2025 | 1,382,717 | 1,376,723 | 1,361,396 | ||||||||||||||||||||||||||
Inmar Inc. |
Services: Business | Term Loan B | Loan | 3M USD LIBOR+ | 4.00 | % | 1.00 | % | 5.91 | % | 5/1/2024 | 3,465,907 | 3,382,305 | 3,280,689 | ||||||||||||||||||||||||||
ION Media Networks Inc. |
Media: Broadcasting & Subscription | Term Loan B | Loan | 1M USD LIBOR+ | 3.00 | % | 0.00 | % | 4.70 | % | 12/18/2024 | 1,000,000 | 995,154 | 999,060 | ||||||||||||||||||||||||||