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Saratoga Investment Corp. Message Board

  • scioslurker scioslurker Jul 17, 2012 11:14 AM Flag

    Conference call highlights.

    Listened to the conference call. Very short and not very informative. They have started to make SBIC loans and hope to deploy the funds quickly.

    No mention of and no questions about dividend policy. Will they ever pay one?

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    • I am not adding here although I am holding.

      Why not add?

      First, they are still below critical mass and have an expense structure that is too high. That said, if you back out the incentive fee expense, assume they can max out the SBIC debentures, and refi the Dearborn revolver at some point you can get to maybe 55 cents of NII, which could support a dividend.

      But second, they still appear to me to be a year or more away from a regular dividend because of point one.

      Third, I do not think the environment for a significant expansion of the loan book is that great right now. They said as much on the call. Both absolute rates and spreads have come in for subordinated loans.

      Fourth, I still think we will have more 10% or so pullback in the broader market ahead of us.

      Put it all together and I would like to buy at $15 or so rather than the current $17.

17.85+0.33(+1.88%)Sep 30 4:00 PMEDT