Saratoga Investment Corp 8125 (SAY) delivered a solid QQ2 2026 performance characterized byNAV growth and earnings power supported by a high-quality core BDC portfolio. End-quarter NAV stood at $410.5 million with NAV per share of $25.61, up 3.6% versus the prior quarter and 10.3% year-over-year. The company maintained a strong liquidity position (roughly $407 million of investment capacity and $201 million in quarter-end cash) with dry powder of $406.8 million to deploy into accretive opportunities, and a balance sheet structured to weather rate volatility without requiring near-term external financing. SAY reaffirmed a disciplined underwriting stance, evidenced by just one nonaccrual exposure (Pepper Palace) representing about 0.2% of fair value, and 84.3% of portfolio in first-lien debt. Portfolio yields on core BDC assets remained resilient at 11.3%, with CLO-related yields at 11.8%, reflecting ongoing diversification into CLO debt securities and a favorable yield profile despite lower-for-longer rate dynamics.
Adjusted NII was $9.1 million for the quarter, or $0.58 per share, down meaningfully versus the prior year and prior quarter, driven by lower AUM and lower base rates, plus the timing of repayments and modest dilution from ATM/DRIP activity. The Q2 base dividend of $0.25 per share per month ($0.75 annualized) remains intact, yielding 12.3% on the October 2025 stock price, underscoring the attractive current income profile of SAY’s portfolio value. Management highlighted a robust deal pipeline and continued deployment capability—up to a 41% potential asset growth without external financing—and stressed the company’s focus on maintaining credit discipline as macro conditions remain uncertain. The near-term outlook centers on deploying capital into high-quality opportunities, benefiting from a still-fragmented lower-middle market, while preserving NAV and liquidity amid ongoing rate resets and M&A cyclicality.