Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Saratoga Investment Corp's Fiscal Second Quarter 2015 Financial Results Conference Call. Please note that today's call is being recorded. During today's presentation all parties will be in a listen-only mode. Following management's prepared remarks we will open the lines for questions. At this time, I would like to turn the call over to Saratoga Investment Corp's Chief Financial Officer, Mr. Henri Steenkamp. Sir, please go ahead.

Thank you, operator. I would like to welcome everyone to Saratoga Investment Corp's fiscal second quarter 2015 earnings conference call. Today's conference call includes forward-looking statements and projections. We ask you to refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these forward-looking statements and projections. We do not undertake to update our forward-looking statements unless required to do so by law. Today, we will be referencing a presentation during our call. You can find our Q2 2015 presentation in the Events & Presentations section of our Investor Relations website. A link to our IR page is in the earnings press release distributed last night. A replay of this conference call will be available from 1 pm today through October 21st. Please refer to our earnings press release for details. I would now like to turn the call over to our Chief Executive Officer, Christian Oberbeck, who will be making a few introductory remarks.

Thank you, Henri and welcome everyone. Since 2010, we have been singularly focused on the strategy of increasing the quality and size of our asset base for the ultimate purpose of building Saratoga Investment Corp into a best-in-class BDC. In the fiscal second quarter of 2015, we continued on this path and further strengthened our financial foundation by expanding our assets under management of further 8% this quarter to $237 million from $219 million at the end of the fiscal first quarter 2015 and increasing them 15% year-to-date. Improving our investment quality and credit and improving our base of liquidity. Our liquidity profile continued to improve as we amended our revolving credit facility extending the maturity date through September 17, 2022 while reducing the borrowing rate by 150 basis points and lowering the annual administrative cost. In addition, since our last conference call, we have reached a number of significant milestones in the company's development including, adopting a new dividend policy to pay regular quarterly cash dividends, adopting a new dividend reinvestment plan that provides for reinvestment of dividends on behalf of shareholders, and improving an open market share repurchase plan that allows for the repurchase about to 200,000 shares of common stock at prices below net asset value. We are very excited about these accomplishments and we're going to greater detail on each during today's call. In turn, we hope to expand and diversify our investor base to these strategic improvements. We remain committed to advancing further the overall size and quality of our asset base. As you can see on slide three, the upward trend of quality and quantity of assets has continued. With $237 million in assets under management in our BDC as of August 31, 2014, we've seen an 8% increase since the last quarter and a 15% increase year-to-date, with over 88% of our loan investments holding the highest internal rating that we award. The continued increase in assets during the quarter is also reflected in some of our key performance metrics this quarter compared to the quarter ended May 31, 2014, with adjusted net investment income per share increasing 6% from $0.40 to $0.43 and adjusted net investment income yield on net asset value increasing 30 basis points from 7.4% to 7.7%. With that, I'd like to now turn the call back over to Henri, to review in greater detail our full financial results as well as the composition and performance of our portfolio.

Thank you, Chris. Looking at our key performance metrics on slide four, we see that for the quarter ended August 31, 2014, our net investment income was $2.1 million or $0.39 on a weighted average per share basis. Adjusted for the incentive fee accrual related to net unrealized capital gains in the second incentive fee calculation, our net investment income was $2.3 million or $0.43 per share. This represented an increase of $0.2 million as compared to the same period last year and $0.1 million compared to the quarter ended May 31, 2014. In the second quarter of fiscal 2015, we experienced a net gain on investments of $1.1 million or $0.19 on a weighted average per share basis resulting in a total increase in net assets from operations of $3.1 million or $0.58 per share. The net gain on investments comprised a net realized gain of $0.4 million and net unrealized depreciation of $0.7 million. Net investment income yield as a percentage of average net asset value was 7% for this quarter. Adjusted for the incentive fee accrual related to net unrealized capital gains, the net investment income yield was 7.7% up from 7.5% for the same quarter last year and up from 7.4% last quarter. Return on equity was 10.6% this quarter up from negative 0.1% for the same quarter last year and up from 6.1% last quarter. These are performance metrics that we continue to feel are important indicators of how successful we are in pursuing our strategy of growing the asset base, building scale and generating competitive yield while continuing to focus on the quality of our portfolio. Our total investment income for the fiscal second quarter 2015 was $6.5 million, an increase of $1.1 million or 20.1% compared to the same period last year and…

Thank you, Henri. I would like to take a couple of minutes to update everyone on the current market as we see it. The market dynamics I shared during the past two calls have not fundamentally changed. Conditions remain extremely competitive as there remains an abundance of capital chasing a historically low volume of new investment opportunities. Last quarter we noted that the middle market leverage now equals pre-crisis levels. As you can see on slide ten, this is still the case. Looking at slide 11, you can see that this trend continues in the broader leverage loan market. On the left, you’ll see the large leverage loans taken as a whole remain closer to historical levels. However on the right, you can see the change of control [obvious] (ph) which correlate more closely to our investment activity, continue to push the leverage on below even beyond pre-crisis levels. Against this backdrop, pricing remains under pressure as lenders compete for mandates. This broader market color however does not necessarily paint an accurate picture of the lower middle market where we compete primarily. Slide 12 gives a better look at the lower middle market defined as EBITDA below $25 million. You can see that as the year's progressed, overall leverage has contracted slightly largely at the expense of mezzanine, senior unitranche providers continue to offer compelling solution in terms of competitive pricing, ease of execution and documentation simplicity. As mentioned earlier an abundance of capital is chasing a historically low volume of new investment opportunities. Facebook data reports that the number of U.S. transactions for deal size is below $25 million, has declined to 127 deals as of September 26, 2014, a little less than half of last years 261 transactions. We remain disciplined as we continue to see a consistent…

Thank you, Mike. Since our last quarter end, we are very pleased to meet our important milestone as been a strategic goal for us since our inception, mainly to commence the payment of a regular quarterly cash dividend. As outlined on slide 15, on September 24, 2014, we announced that our Board of Directors adopted a new dividend policy to pay a regular quarterly cash dividend to our shareholders. In addition, we also adopted a new dividend reinvestment plan that provides the reinvestment of dividends on behalf of our stockholders, unless the stockholder has elected to receive dividends in cash. If Saratoga Investment declares a dividend, our stockholders who have not opted out of the reinvestment plan on the dividend record date, will have their dividend automatically reinvested into additional shares of its common stock. Effectively, this will allow the stockholders who want cash to receive their dividends in cash. However, it also provides the opportunity for many stockholders we have spoken to who are interested in reinvesting their dividends to receive additional shares of common stock. For more information, see the "Stock Information" section of the Company's Investor Relations website. As part of this new dividend policy, we’ll pay a regular quarterly dividend of $0.18 per share for the quarter ended August 31, 2014 payable on November 28, 2014 to all stockholders of record at the close of business on November 3, 2014. And then we also declared a second dividend of $0.22 per share for the quarter ended November 30, 2014 that will be payable on February 27, 2015 to all stockholders of record at the close of business on February 2, 2015. We anticipate continuing to increase the per share dividends subject to a net investment income in future quarters. On the same day of the announcement…

Thank you. (Operator Instructions) Our first question comes from the line of Casey Alexander from Gilford Securities.

Good morning.

Good morning, Casey.

Well, first of all I think you had started off the dividend policy just right. And I think you've done everything right, whether including the dividend reinvestment plan, share repurchase plan, I think it's excellent. I do see that there is a significant – there still going to be significant undistributed income. So is there still a plan to mop-up the undistributed income in a stock dividend at the end of the year?

Our current intention at this point in time is the two dividends that we have declared. So when we continue – we will be in compliance with our requirements with these two forward dividends. So there will not be – we're not planning a stock based dividend at year end.

Well that certainly makes maintaining my model a lot easier. Secondly, I think the balance on the middle market loans has come down again, was that just – are you allowing those to mature out or was something sold out of the middle market portfolio and redeployed because I think that's actually helping your yields as that draws down?

Yes, absolutely. Our objective is to let that portfolio run off by and large and redeploy that capital for the SBIC which offers much higher returns. We expect to continue to have redemptions in that middle market portfolio. It’s a little hard to anticipate those redemptions but that portfolio declining is due to redemptions that we've had in the portfolio.

Couldn’t we actually say that you have instead of 125 million in dry powder, you really have 150 million in dry powder because that's available to you to redeploy into traditional middle market loans if the deals are there to be done.

That's correct.

Absolutely. [Indiscernible] cash level, exactly.

The loan investments have been strong credit ratings - it's great, it's really, really high. It did come down about three percentage points during the quarter. Is that due to a migration of a deal or is that due to the fact that new investments are coming at a satisfactory rating and therefore that forces it down if nothing moves up?

I think all the investments we have, that have come in Casey, have been at the top rating.

Okay.

There was a small migration in a deal during the quarter that has actually subsequently been resolved. So that was the only reason for that slight down tick that you saw.

Okay. The reduction in administrative fees related to the credit facility. Do we see that reduction actually in the interest expense line, is that where we would look forward?

Correct. So it's annual fee which gets amortized over the year. So you’re going to see that annual fee will go slightly down in the interest expense line over the next year because of that reduction.

Okay. Great. All right. I think that's all the questions that I have but again I think you guys did the dividend just right, and actually I know the stock haven't gone up just yet since then but I'd tell you what, compared to the rest of the BDC universe, it's effecting very well because the rest of the BDC universe has been shellacked pretty good the last month.

Yes. Great, thanks Casey.

Thank you.

Thank you. (Operator Instructions) And I see no further questions in the phone lines.

Well, on behalf of Saratoga Investment Management Corp, we thank everyone for joining us today and we look forward to speaking with you next quarter. Thank you all.