Saratoga Investment Corp (NYSE: SAR) announced that Henri Steenkamp will step down as Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary effective October 31, 2026, citing health-related reasons.

Steenkamp will transition to a consulting role to provide continuity during the leadership change. He will also retain his seat on the Board of Directors and continue serving as CFO of the company’s SBIC subsidiaries.

Leadership Appointments

The company confirmed three new appointments effective October 31, 2026:

• Christine Ramdihal is promoted to Chief Accounting Officer and Treasurer, serving as principal financial officer
• Rochelle Kracoff is promoted to Chief Compliance Officer and Secretary
• James Soltesz is appointed Investment Manager and Vice President of Capital Markets

Background on New Appointees

Ms. Ramdihal has served as Controller of Saratoga Investment and brings significant accounting, financial-reporting and audit experience to her expanded role. Prior to joining Saratoga Investment almost ten years ago, she spent seven years in external audit roles at CBIZ and BDO.

Ms. Kracoff has served as Assistant Chief Compliance Officer and Treasury Manager at Saratoga Investment since 2021, following four years with the Company as Compliance Manager. Before joining Saratoga Investment in 2017, Ms. Kracoff held legal and compliance roles at Visium Asset Management.

Mr. Soltesz is an Investment Manager of Saratoga Investment Advisors, LLC, the Company’s investment adviser. He is responsible for underwriting, trading and portfolio management activities related to the firm’s third-party CLO security business. In his expanded role, Mr. Soltesz will support the Company’s overall balance sheet management.

Executive Commentary

"On behalf of the Board and the entire Saratoga Investment team, I want to thank Henri for his significant contributions to the Company and his partnership over the years," said Christian L. Oberbeck, Chairman and Chief Executive Officer of Saratoga Investment. "We are grateful that he will remain engaged as a member of our Board, with our SBIC subsidiaries and be available in a consulting capacity ensuring a smooth transition."

Mr. Steenkamp added, "It has been a privilege to serve Saratoga Investment, our Board, our shareholders and our dedicated team. I am proud of the Company’s progress and of the strong financial, compliance and investment capabilities we have built over the years."

Saratoga Investment Corp. (NYSE: SAR) has extended a significant debt maturity to 2031, though the refinancing increases annual coupon costs and does not resolve ongoing dividend coverage gaps.

The business development company closed an $85 million offering of 8.00% unsecured notes on Aug. 26, generating net proceeds of approximately $82.0 million. Saratoga plans to combine these funds with available cash to redeem all $105.5 million of its 6.00% notes due 2027 on Sept. 18.

Refinancing Costs Rise Despite Lower Principal

The new notes mature on Aug. 31, 2031, and bear interest at 8.00% annually. On the $85 million principal, this equals $6.80 million in annual coupon interest. The redeemed 6.00% notes carried $6.33 million in annual interest on their $105.5 million principal.

While the new issue reduces principal by $20.5 million, it adds approximately $470,000 to annual stated coupon interest. This follows a prior refinancing in the quarter ended May 31, where Saratoga replaced a $175 million 4.375% bond with higher-cost securities, increasing annual stated coupon interest by roughly $3.47 million.

Dividend Coverage Remains Under Pressure

For the quarter ended May 31, Saratoga reported net investment income and Adjusted NII of $0.47 per share, while dividends totaled $0.75 per share. This results in a dividend payout ratio of 159.6% of NII. The company maintained its base quarterly dividend at $0.75, declaring three monthly payments of $0.25 per share.

What the Numbers Show

The divergence between income and payouts is visible in the NAV movement. Saratoga’s NAV fell from $24.42 to $23.23 per share, a decline of $1.19. This drop included $0.93 per share in unrealized depreciation and $0.28 per share attributed to under-earning the dividend. The $0.28 figure precisely matches the gap between the $0.75 dividend and the $0.47 NII, highlighting that current portfolio earnings do not fully support the declared payout rate.

Saratoga cited declining short-term interest rates and tighter spreads on its floating-rate asset base as pressures on earnings. Spreads on new originations were almost 50 basis points lower than those on repayments during the quarter. While the maturity extension removes a near-term refinancing hurdle, the structural question remains whether future portfolio income can close the gap with dividends given higher funding costs.