Saratoga Investment Corp.

Fiscal Second Quarter 2023 Shareholder Presentation

October 5, 2022

Continued Growth and Strong Long-Term Performance

Fiscal Second Quarter 2023 Highlights:

  • Continued high quality portfolio and strong performance
    • Investment quality remains strong
      • 95.6% of loan investments with highest internal rating and only one non-accrual
    • Return on equity of 4.8% for LTM
      • Net realized gains and unrealized depreciation of $5.3 million for Q2, includes approximately $3.6 million net unrealized depreciation primarily reflecting changing market spreads and $1.2 million unrealized depreciation on the CLO and JV investments, reflecting broadly syndicated loan market price movements
      • Realized loss on extinguishment of $1.2 million from repayments of $43.1 million SAK baby bond and $18.3 million SBA debentures
    • Gross Unlevered IRR of 10.6% on total unrealized portfolio as of August 31, 2022
      • Fair value of $954.7 million is 0.1% below total cost of portfolio
      • Gross Unlevered IRR of 16.4% on $835.5 million of total realizations
  • Consistent strong long-term originations contribute to growing assets under management
    • AUM up 17% since year-end, up 7% since Q1 and up 43% year-over-year, with originations of $140.6 million in Q2, resulting from strong pipeline and healthy success in term sheets and deals executed
    • 98% of our interest earnings portfolio is floating rate
  • Base of liquidity and capital remains strong
    • Quarter-endpro forma liquidity allows growth of AUM by 15% and is mostly long-term
      • $37 million is cash or available liquidity on the credit facility
      • Application for third SBIC license approved, providing $107.0 million in additional current liquidity
  • Declared dividend of $0.54 per share for the quarter ended August 31, 2022, a 1c increase, paid on September 29, 2022
  • Key performance indicators for Q2 - Adjusted NII of $7.0 million, Adjusted NII per share of 58c, LTM ROE of 4.8% and NAV per share of $28.27

2

Continued Asset Growth and Strong Credit Quality

Asset Base Expansion Trend

Overall Credit Quality Remains Strong

$1,200

100%

$1,000

$955

$800

$818

$600

80%

94.2%

98.3%

96.8%

98.6% 99.0%

98.5%

95.6%

$554

94.1%

93.3%

$400

$486

90.5%

82.4%

$402

$200

$206 $241

$284 $293 $343

$95

$155

60%

$0

Investments at Fair Value ($ million)

Performing

Underperforming

Expected Loss of Principal

95.6% of our SAR loan

Fair value of AUM increased 43%

investments hold our highest

year-over-year, 17% since year-

internal rating, up from 95.0% last

end and 7% since last quarter

quarter; one investment on non-

Fair value of $955m at Q2 FY23 is

accrual at quarter-end*

at cost

* Excludes our investment in our CLO and our equity positions

3

3

Q2 FY23: Strong Financial Foundation and Momentum

Key Performance Metrics for the Fiscal Quarter

For the quarter ended

August 31, 2021

May 31, 2022

August 31, 2022

and as of

($ in millions except per share)

Net investment income

$6,393

$7,976

$7,698

Adjusted net investment income*

$7,003

$6,432

$6,959

Net investment income per share

$0.57

$0.66

$0.64

Adjusted net investment income per share*

$0.63

$0.53

$0.58

Net investment income yield

7.9%

9.1%

9.0%

Adjusted net investment income yield*

8.7%

7.3%

8.2%

Return on Equity - Last Twelve Months

14.4%

6.9%

4.8%

Fair value of investment portfolio

$666.1

$894.5

$954.7

Total net assets

$324.1

$345.2

$337.2

Investments in new/existing portfolio

$116.0

$97.2

$140.6

companies

Loan Investments held in "Performing" credit

93.2%

95.0%

95.6%

ratings

$10,000

$0

$8,000 $7,000 $6,000

$0.70

$0.00 $0.70

$0.00

13%

0%

13%

0%

20%

0%

$1,000

$0

$350

$300

$200

$0

100%

95%

90%

*Adjusted for accrued capital gains incentive fee expense and interest expense on SAK baby bond during the period that SAT baby bond was issued prior to repayment, reconciliation to GAAP net investment income, net investment income per share and net investment income yield

included in our fiscal second quarter 2023 earnings release.

4

Long-Term Accretive NAV and NAV Per Share Growth

Net Asset Value and NAV per Share

(FY11 to Q2FY23)

NAV: 2% decrease this quarter. 292% increase since Saratoga took over management.

NAV/Share: 1.5% decrease this quarter. 29% increase since FY17 with increases 17 of

the last 21 quarters.

(in millions)

$30

$355.8

$342.6

$345.2

$29.33

$337.2

$29

$330

$324.1$29.17

$320.3

$28.69

$304.3

$304.2

$28.97

$28

$298.2$299.9

$28.27

$282.2$27.13 $281.6

$28.70

$280

$26.68

$27.25

$27

$26.84

$230

$26.19

$224.3

$26

$25.30

$25.11

$25

$24.94

$180.9$186.8

$180

$24

$24.47

$24.06

$143.7

$23.62

$23

$130

$22.72

$125.1$127.3

$122.6

$22.96

$107.0$113.0

$22

$97.0

$21.08

$22.70

$22.06

$21.97

$86.0

$80

$21

Net Asset Value

NAV per Share

5

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Saratoga Investment Corporation published this content on 04 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 October 2022 20:21:03 UTC.