Saratoga Investment Corp 8125 (SAY) reported a constructive QQ3 2026, with NAV continuing to exhibit growth versus prior periods and NII per share increasing meaningfully on a sequential basis. Management highlighted a quarterly NII of $0.61 per share, up $0.03 QoQ, and a base monthly dividend of $0.25 per share (aggregate $0.75 for Q4 2026), implying a ~12.9% annualized yield at the referenced price. The quarter showcased solid originations and a resilient core BDC portfolio amid a volatile macro backdrop. The company also reaffirmed capital formation capability and liquidity depth, with substantial dry powder and an expanded financing toolkit, while maintaining a strong credit profile (nonaccruals at historically low levels). In parallel, SAY underscored its advantaged positioning in the lower-middle market, supported by SBIC licensing, a diversified 83.9% first-lien portfolio, and a track record of outperforming industry ROEs.
Key takeaways include a stable NAV per share trajectory despite a positive NAV delta, continued leverage management, and a robust pipeline that supported $17.2 million of net originations in the quarter (3 new investments, 9 follow-ons). The management team stressed disciplined underwriting, high portfolio quality, and the ability to redeploy cash accretively, signaling a constructive outlook for NII expansion through deployment of the available liquidity as market conditions normalize. The upside hinges on continued M&A momentum in the lower-middle market, favorable spreads on new originations, and the ability to translate higher deal flow into accretive earnings while preserving NAV and liquidity.)