Saratoga Investment, a business development company, entered into a new $85 million senior secured revolving credit facility with Valley National Bank as sole lead arranger and administrative agent, together with three additional participating banks. The Valley facility replaces the company’s existing $65 million senior secured revolving credit facility with Encina Lender Finance, previously scheduled to mature in January 2026.
The Valley facility increases Saratoga Investment’s borrowing capacity by $20 million and extends maturity by two years to 2028, while significantly reducing the applicable margin. The Valley facility also expands eligible assets for the borrowing base calculation to include certain additional debt investments, providing enhanced flexibility in financing Saratoga’s diversified investment portfolio.
Approximately $32.5 million of the total $85 million Valley facility will be drawn at the time of closing, consistent with the outstanding balance under the Encina facility, with the remaining $52.5 million available to provide incremental funding.
Christian L. Oberbeck, chairman and CEO of Saratoga Investment, said, “We are pleased to announce this new facility, which meaningfully enhances our financing flexibility while lowering our cost of capital. The expanded size and improved terms reflect both the continued strong performance of our portfolio and the strength of our long-term lending relationships. This facility positions us well to continue prudently growing our platform.”
Henri Steenkamp, chief financial officer and chief compliance officer of Saratoga Investment, added, “This financing reflects a significant step forward in our ongoing capital optimization efforts. In addition to lowering our spread and cost of capital, we expanded the types of assets eligible for borrowing to include new types of debt securities currently in our portfolio. We appreciate the confidence of Valley National Bank and the participating lenders in Saratoga’s credit quality, portfolio approach and discipline and long-term strategy.”
