Business development company Saratoga Investment Corp. (NYSE:SAR) has priced their new baby bonds with a coupon of 6.25%–a bit disappointing to us, but it seems we are always disappointed–we always want more. We will have to let the marketplace speak as to the pricing. We suspect the bonds will have plenty of demand as it is a smaller issue of 1,400,000 shares with another 200,000 reserved for overallotment, but likely will have a limited upside to the price once trading commences.
The new bonds will trade on the NYSE with a permanent ticker of SAF. There will not be trading on the OTC Grey market of this issue prior to permanent trading on the NYSE.
The new notes will have a maturity date of 8/31/2025. The normal terms apply–quarterly payments, non qualified interest will be paid and an early redemption period beginning 8/31/2021.
Saratoga Investment currently has 1 other baby bonds outstanding and the information on that particular issue (which carries a 6.75% coupon) can be found here.
Even though we are not impressed with the coupon on this issue we may well take a small 200 share position in the Medium Duration Income Portfolio which has about a 7% cash position so could invest with cash on hand.