Open report — full analysis, no account required.
Sign up to generate reports and read filings that aren't on the open list.
Get notified when SAR files again. Create a free account and we'll email you the moment its next filing is analyzed.
Get filing alertsRed Flags Detected
- Nav Decline of 4.9% In Single Quarter (new) — Sharp sequential NAV erosion driven by concentrated portfolio markdowns signals credit deterioration in the underlying portfolio.
- Three Credits Account For $8.8m (58%) of Core Portfolio Depreciation (new) — Pepper Palace written to zero, Exigo down $3.4M, and Chronus down $1.5M reflect company-specific performance problems, not just market moves.
- Nii Declined 25% Yoy While Dividend Maintained At $0.75/share (new) — Adjusted NII of $0.47/share under-earns the $0.75 dividend by $0.28/share, contributing to NAV erosion and raising sustainability questions.
Saratoga Investment NAV falls 4.9% on $15.2M portfolio markdowns; NII down 25% YoY
Filed July 7, 2026 · Period ending July 7, 2026 · ~1 min read
Key Changes
-
high
NAV per share declined 4.9% to $23.23 from $24.42, driven by $15.2M in portfolio markdowns. Pepper Palace written to zero ($3.9M), Exigo down $3.4M, and Chronus down $1.5M due to company performance issues. Additional $6.0M in markdowns from market multiple adjustments on equity positions.
Exhibit 99.1 view on EDGAR → -
high
Adjusted NII fell 25.1% YoY to $7.6M ($0.47/share), primarily from higher interest expense on February 2026 refinancing that replaced $175M at 4.375% with $150M at 7.25%-7.5%. Earnings per share were negative $0.42 due to portfolio markdowns.
Exhibit 99.1 view on EDGAR → -
medium
AUM grew 1.6% QoQ to $1.126B on net originations of ~$31M. Deployed $79.2M in new investments (two new portfolio companies, ten follow-ons) and received $48.4M in repayments.
Exhibit 99.1 view on EDGAR → -
medium
Issued $25M of 7.25% fixed-rate notes due 2029 for net proceeds of $24.5M. Notes are callable at par starting April 2027; company may issue up to an additional $25M by July 2026.
Exhibit 99.1 view on EDGAR → -
medium
Board declared $0.75/share quarterly dividend for Q2 FY2027, payable in three monthly $0.25 installments, maintaining the base dividend level.
Exhibit 99.1 view on EDGAR →
Summary
Saratoga Investment reported a difficult first quarter of fiscal 2027, with NAV per share falling 4.9% to $23.23 on $15.2 million in portfolio markdowns. Three credits drove the majority of the damage: Pepper Palace was written to zero ($3.9M), Exigo declined $3.4M, and Chronus fell $1.5M, all reflecting company-specific performance deterioration rather than market-wide moves.
An additional $6.0 million in markdowns came from market multiple compression on equity positions. The company now has two credits on non-accrual, representing 1.2% of cost. Adjusted net investment income fell 25% year-over-year to $7.6 million ($0.47 per share), primarily due to higher interest expense from the February 2026 refinancing that replaced a $175 million 4.375% bond with $150 million at 7.25%-7.5%.
The $0.47 NII under-earned the $0.75 quarterly dividend by $0.28 per share, contributing to the NAV decline and raising questions about dividend sustainability if portfolio performance does not improve. Despite the credit issues, AUM grew 1.6% to $1.126 billion on net originations of approximately $31 million, and the company issued $25 million of 7.25% notes due 2029 to support further deployment. The Board maintained the $0.75 quarterly dividend for Q2 FY2027.
Section-by-Section Diff
Event · Exhibit 99.1
Saratoga Investment reports Q1 FY2027 results: NAV fell 4.9% to $23.23/share on $15.2M portfolio markdowns; NII $0.47/share; AUM grew 1.6% to $1.126B.
Added in current filing · view on EDGAR →
Sequential quarter NAV per share is down by 4.9% from $24.42 per share to $23.23 per share. Of the $1.19 per share reduction this quarter, $0.93 was due to the unrealized depreciation on investments discussed below, including both credit and equity investments, and $0.28 was due to the under-earning of the dividend. ... Our total $1.126 billion portfolio was marked down $15.2 million during the quarter, including net depreciation of $18.3 million in the non-CLO core portfolio, partially offset by a write-up of $2.9 million in the JV and $0.3 million in the BB and BBB CLO debt portfolio. Of the non-CLO core portfolio depreciation, Pepper Palace, which has been written down to zero ($3.9 million), together with a handful of credits, primarily Exigo ($3.4 million) and Chronus ($1.5 million), represented $9.9 million, or 54% of the total reduction, reflecting company performance adjustments, with a further $6.0 million, or 33%, reflecting a broad market adjustment to comparable market multiples across many industries on equity positions held at or above cost, and the remaining 13% reflecting the impact of changes in market spreads across valuations.
NAV per share fell 4.9% quarter-over-quarter to $23.23, driven primarily by $15.2 million in portfolio markdowns. The largest write-downs were Pepper Palace (written to zero, $3.9M), Exigo ($3.4M), and Chronus ($1.5M), reflecting company-specific performance issues. An additional $6.0 million in markdowns came from market multiple adjustments on equity positions, and the remainder from spread changes. Two credits are now on non-accrual: Pepper Palace (fully written off) and the CLO F-note, together representing 0.0% of fair value and 1.2% of cost.
Added in current filing · view on EDGAR →
Adjusted NII for the quarter ended May 31, 2026, was $7.6 million, a decrease of $2.5 million, or 25.1%, from $10.1 million in the quarter ended May 31, 2025, and a decrease of $0.9 million, or 11.0% from $8.5 million in the quarter ended February 28, 2026. The decrease from comparable quarters, in addition to the abovementioned interest income and operating expense changes, primarily reflects the full-period impact of the additional interest expense on the $50 million 7.25% private bond and the $100 million 7.5% public baby bond that was issued last quarter used to repay the $175 million 4.375% institutional bond at the end of February 2026. ... WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE $ (0.42 )
Adjusted net investment income was $7.6 million ($0.47 per share), down 25.1% year-over-year and 11.0% quarter-over-quarter, primarily due to higher interest expense from refinancing completed in February 2026 (replacing a $175M 4.375% bond with $50M at 7.25% and $100M at 7.5%). Earnings per share were negative $0.42, reflecting the portfolio markdowns. Total investment income declined slightly to $30.8 million, as lower interest rates and tighter spreads on new originations offset AUM growth.
Added in current filing · view on EDGAR →
AUM at fair value as of May 31, 2026 was $1.126 billion, an increase of 1.6% from $1.109 billion as of February 28, 2026, and an increase of 16.3% from $968.3 million as of May 31, 2025. ... Cost of investments made during the quarter ended May 31, 2026 were $79.2 million, including two investments in new portfolio companies and ten follow-on investments. ... Principal repayments during the quarter ended May 31, 2026, were $48.4 million, including one full debt repayment, four partial repayments, plus amortization.
Assets under management grew 1.6% quarter-over-quarter to $1.126 billion, driven by net originations of approximately $31 million. The company deployed $79.2 million in new investments (two new portfolio companies and ten follow-ons, including $11.0 million in CLO debt) and received $48.4 million in repayments. Year-over-year AUM increased 16.3%.
Thanks — your feedback helps us improve report quality.
Figures/quotes linked to EDGAR · Narrative written by AI · Jul 9, 2026 · How we verify