Saratoga Investment Secures BBB+ Rating, Refinances Debt in Strategic Move

NEW YORK, NY – January 29, 2026 – Saratoga Investment Corp. (NYSE: SAR) today announced a significant dual-pronged financial maneuver, launching a public offering of new unsecured notes while simultaneously revealing a new investment-grade credit rating. The moves are part of a strategic plan to refinance existing debt, extend its maturity profile, and solidify its position as a key capital provider for U.S. middle-market businesses.

The specialty finance company, which operates as a business development company (BDC), received a “BBB+” investment grade rating from Egan-Jones Ratings Company, a Nationally Recognized Statistical Rating Organization (NRSRO). This new rating, combined with the new debt offering, signals a proactive approach to capital management that has been met with a positive initial reaction from the market.

A Strategic Financial Overhaul

At the heart of the announcement is a registered public offering of unsecured notes, which are expected to trade on the New York Stock Exchange under the ticker symbol “SAV” within 30 days. The primary purpose of this new capital raise is to orchestrate a comprehensive refinancing of the company's outstanding 4.375% notes, which total $175 million and are scheduled to mature in February 2026.

By redeeming these notes well ahead of their maturity date, Saratoga is effectively swapping near-term obligations for longer-term debt. The new notes from the public offering are expected to be due in 2031, significantly pushing out its debt wall. This move follows a separate, recently reported private placement of $50 million in 7.25% Senior Unsecured Notes due in 2030, the proceeds of which are also earmarked for the redemption of the 2026 notes.

While the interest rates on the new debt reflect the higher-rate environment of 2026 compared to when the 4.375% notes were issued, the strategic benefit lies in the extension of the company's debt maturity profile. This proactive refinancing reduces near-term risk and provides greater financial stability and predictability, allowing management to focus on its core investment activities rather than impending debt obligations. The new notes will rank pari passu, or equally, with Saratoga’s other senior unsecured debt, maintaining a clear and stable capital structure.

A robust syndicate of investment banks, led by joint book-running managers Lucid Capital Markets, LLC and Oppenheimer & Co. Inc., is managing the offering, indicating strong institutional support for the transaction.

The Significance of an Investment-Grade Stamp

The simultaneous announcement of a “BBB+” investment-grade rating from Egan-Jones is a critical component of Saratoga's strategy. While Egan-Jones is smaller than the “Big Three” rating agencies, it is fully recognized by the SEC, the National Association of Insurance Commissioners (NAIC), and the European Securities and Markets Authority (ESMA). This validation provides an independent assessment of Saratoga's creditworthiness.

A “BBB+” rating signifies that the agency believes Saratoga has an adequate capacity to meet its financial commitments. For Saratoga, achieving this status is a powerful endorsement that can unlock significant advantages. Most importantly, it broadens the company's appeal to a larger pool of institutional investors, many of whom are restricted by mandates to only purchase securities that carry an investment-grade rating.

This expanded investor base can increase demand for the company's debt, which may lead to more favorable borrowing costs on future offerings. The rating enhances the company's credibility and provides a competitive edge within the BDC landscape, differentiating it as a more durable and lower-risk entity in the eyes of debt investors. This external validation serves as a testament to the company's conservative balance sheet management and long-term financial planning.

Fueling the Engine for Middle-Market Growth

Ultimately, these sophisticated financial maneuvers are designed to strengthen Saratoga's ability to execute its primary mission: providing customized financing solutions to U.S. middle-market businesses. This segment of the economy, often too large for community banks but too small for major investment banks, relies heavily on capital from BDCs like Saratoga to fund growth, acquisitions, and recapitalizations.

With a more secure and flexible balance sheet, Saratoga is better positioned to act as a reliable partner to these businesses. A longer debt runway and an enhanced credit profile increase its capacity to lend. This allows the company to offer more competitive and flexible financing solutions, thereby fostering innovation and job creation within the vital middle market.

By optimizing its own capital structure, Saratoga ensures it has the durable capital base necessary to support its portfolio companies through various economic cycles. This stability is crucial for the business owners, management teams, and financial sponsors who depend on Saratoga's capital to achieve their strategic objectives.

Market Reacts Favorably Amid Broader Industry Trends

Investors appear to view the company's strategic foresight favorably. On the day of the announcement, Saratoga's stock (NYSE: SAR) saw a positive response, closing up 1.54% at $23.70. This uptick suggests that shareholders approve of the move to de-risk the balance sheet and enhance the company's credit profile.

Saratoga's actions are reflective of a broader trend within the BDC industry, where sophisticated players are actively managing their liabilities to navigate a dynamic interest rate environment. Proactively addressing debt maturities and seeking credit ratings are hallmarks of mature, forward-thinking management teams aiming to build resilient enterprises.

By successfully executing this dual strategy of refinancing and securing an investment-grade rating, Saratoga Investment Corp. not only strengthens its own financial foundation but also reinforces its capacity to power the growth of American businesses for years to come. The move is a clear statement of financial prudence and strategic ambition, long-term vision.