Release Date: October 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you provide more color on why certain new investments did not meet your criteria this quarter? A: Michael Grisius, Co-Managing Partner and Chief Investment Officer, explained that the issues were unique to each credit. For example, some had customer concentration levels that were too high for comfort. Each investment had distinct elements that did not align with Saratoga's investment standards.
Q: How sensitive is the portfolio to changes in interest rates, and what impact would a 25 basis point reduction have on NII? A: Henri Steenkamp, Chief Financial Officer, stated that a 25 basis point reduction in short-term rates would impact NII by approximately $0.03 per share on a quarterly basis. This is a static view and does not account for potential refinancing of debt or new investment opportunities.
Q: In a scenario of a hard landing recession, how confident are you in managing through without risking the dividend? A: Henri Steenkamp expressed confidence in managing through such a scenario, citing the company's strong cash position and the fact that rate changes do not impact immediately due to the timing of asset resets. He emphasized that they are currently overearning the dividend significantly.
Q: What is the outlook for recovering value from the restructured investments in Zollege and Pepper Palace? A: Michael Grisius noted that while it's early in the process, Saratoga has brought in strong management teams to recapture value. The recovery will take time, but the company is optimistic about the potential for improvement in these investments.
Q: With the stock trading at a discount to NAV, why hasn't Saratoga repurchased its stock recently? A: Christian Oberbeck, Chairman and CEO, explained that while repurchasing stock is attractive, the company is focused on maintaining liquidity for potential asset growth and managing leverage prudently. They are prepared for both offensive and defensive opportunities in the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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