Saratoga Investment (SAR) 8-K GSC Investment Corp. Announces Second Quarter 2009 Financial Results

Exhibit 99.1

  Contacts:    Carl J. Crosetto               GSC Group              212-884-6192
Michael H. Yip GSC Group 212-884-6216

GSC Investment Corp. Announces Second Quarter 2009 Financial Results

__________________________________________

NEW YORK, October 14, 2008 – GSC Investment Corp. (NYSE:GNV), a business development company, today announced results for the second quarter ended August 31, 2008.

Second Quarter 2009 Highlights

·   Net investment income of $3.5 million or $0.42 per share

·   Declared regular dividend of $0.39 per share

·   Net asset value of $11.05 per share

Operating Results

For the quarter ended August 31, 2008, GSC Investment Corp. reported net investment income of $3.5 million or $0.42 per share for the quarter.  Net investment income was offset by a net loss on investments of $6.0 million or $0.73 per share, resulting in a net decrease in net assets resulting from operations of $2.6 million or $0.31 per share for the quarter.  Net asset value was $11.05 per share as of August 31, 2008.

“While we are disappointed by the unrealized losses in the portfolio, it is a testament to the fundamental strength of our strategy that, in the midst of unprecedented price declines and illiquidity in the corporate debt market, we were able to fully support our quarterly dividend of $0.39 per share out of net investment income,” said CEO Seth M. Katzenstein.

“We are mindful of the continued stress in the economy and have worked to diversify our investment portfolio to insulate it from credit events associated with any single company or industry,” said Mr. Katzenstein.  “And we continue to closely monitor the performance of all our portfolio companies.”

Portfolio and Investment Activity

As of August 31, 2008, the value of the Company’s investment portfolio was $153.8 million.  The overall portfolio composition consisted of 17.2% first lien term loans,

32.3% second lien term loans, 19.8% senior secured notes, 13.7% unsecured notes, 16.7% subordinated notes of GSCIC CLO and 0.3% equity/limited partnership interests.

The Company had one portfolio investment that was being accounted for on a non-accrual basis as a result of filing for bankruptcy during the quarter.  All other portfolio investments were performing.

During the second quarter, GSC Investment Corp. made four investments in an aggregate amount of $9.2 million consisting of $6.4 million in new portfolio companies and $2.8 million in existing portfolio companies.  For the quarter, the Company had $6.0 million in aggregate amount of exits and repayments, resulting in net investments of $3.2 million in aggregate amount.

“In today's challenging environment, we will continue to be selective and only pursue investments that are high in the capital structure and offer an attractive risk-adjusted return,” said Mr. Katzenstein.

As of August 31, 2008, the weighted average current yield on the Company’s first lien term loans, second lien term loans, senior secured notes, unsecured notes and the GSCIC CLO subordinated notes were 7.8%, 9.9%, 11.6% , 12.2% and 20.2%, respectively, which results in an aggregate weighted average current yield of 11.9%.

As of August 31, 2008, 42%, or $53.7 million, of the Company’s interest-bearing portfolio was fixed rate debt with a weighted average current coupon of 11.6% and 58%, or $74.1 million, of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 5.7%.

Liquidity and Capital Resources

As of August 31, 2008, the Company had $66.3 million in borrowings under its $100 million revolving credit facility.  Based on the fair value and characteristics of the pledged collateral, the facility had limited availability remaining.  The Company’s asset coverage ratio was 238%.

Dividend

On August 19, 2008, GSC Investment Corp. declared a first quarter dividend of $0.39 per share payable on September 15, 2008, to common shareholders of record on August 19, 2008.

2009 Second Quarter Conference Call/Webcast Information

When: Wednesday, October 15, 2008, 10:00 a.m. Eastern Time (ET)

Call:Interested parties may participate by dialing (877) 627-6590 (U.S. and Canada) or (719) 325-4852 (outside U.S. and Canada).

A replay of the call will be available from 1:00 p.m. ET on Wednesday, October 15, 2008 through midnight Wednesday, October 29, 2008 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (outside U.S. and Canada), passcode for both replay numbers: 9618747.

Webcast: Interested parties may also access a simultaneous webcast of the call by going to http://ir.gscinvestmentcorp.com/events.cfm. A replay of the webcast will be available from 1:00 p.m. ET on Wednesday, October 15, 2008 through midnight Wednesday, November 5, 2008.

About GSC Investment Corp.

GSC Investment Corp. is a specialty finance company that invests primarily in leveraged loans and mezzanine debt issued by U.S. middle-market companies, high yield bonds and collateralized loan obligations. It has elected to be treated as a business development company under the Investment Company Act of 1940. The Company may also opportunistically invest in distressed debt, debt issued by non-middle market companies, and equity securities issued by middle and non-middle market companies. The Company draws upon the support and investment advice of its external manager, GSC Group, an alternative asset investment manager that focuses on complex, credit-driven strategies. GSC Investment Corp. is traded on the New York Stock Exchange under the symbol “GNV.”

GSC Investment Corp.’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available on its website at www.gscinvestmentcorp.com.

Forward Looking Statements

Information provided in this press release, including valuation of certain of our investments, may contain statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking statements.  These forward-looking statements generally relate to GSC Investment Corp.’s plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends.  Actual future results may differ materially from those projected as a result of certain risks and uncertainties.  For a discussion of such risks and uncertainties, see “Note About Forward-Looking Statements” included in the Company’s 10-Q which has been filed with the U.S. Securities and Exchange Commission.  These forward-looking statements are made only as of the date hereof, and GSC Investment Corp. undertakes no obligation to update or revise the forward-looking statements, whether as a result of the new information, future events or otherwise.

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GSC Investment Corp.
Consolidated Balance Sheets
	As of
	August 31, 2008			February 29, 2008
	(unaudited)
ASSETS
Investments at fair value
Non-control/non-affiliate investments (amortized cost of $150,104,717 and $162,888,724, respectively)	$	127,857,819		$	143,745,269
Control investments (amortized cost of $30,000,000 and $30,000,000, respectively)		25,899,553			29,075,299
Affiliate investments (amortized cost of $0 and $0, respectively)		16,233			16,233
Total investments at fair value (amortized cost of $180,104,717 and $192,888,724, respectively)		153,773,605			172,836,801
Cash and cash equivalents		4,858,988			1,072,641
Cash and cash equivalents, securitization accounts		6,264,386			14,580,973
Outstanding interest rate cap at fair value (cost of $131,000 and $131,000, respectively)		48,408			76,734
Interest receivable		2,885,148			2,355,122
Due from manager		-			940,903
Deferred credit facility financing costs, net		634,337			723,231
Management fee receivable		229,736			215,914
Other assets		135,050			39,349
Total assets	$	168,829,658		$	192,841,668
LIABILITIES
Revolving credit facility	$	66,250,000		$	78,450,000
Payable for unsettled trades		4,667,738			11,329,150
Dividend payable		3,233,640			3,233,640
Management and incentive fees payable		2,008,875			943,061
Accounts payable and accrued expenses		821,626			713,422
Interest and credit facility fees payable		198,210			292,307
Due to manager		3,982			11,048
Total liabilities	$	77,184,071		$	94,972,628
STOCKHOLDERS' EQUITY
Common stock, par value $.0001 per share, 100,000,000 common shares
authorized, 8,291,384 and 8,291,384 common shares issued and outstanding, respectively		829			829
Capital in excess of par value		116,218,966			116,218,966
Accumulated undistributed net investment income		639,002			455,576
Accumulated undistributed net realized gain from investments and derivatives		1,200,493			1,299,858
Net unrealized depreciation on investments and derivatives		(26,413,703	)		(20,106,189	)
Total stockholders' equity		91,645,587			97,869,040
Total liabilities and stockholders' equity	$	168,829,658		$	192,841,668
NET ASSET VALUE PER SHARE	$	11.05		$	11.80

GSC Investment Corp.
Consolidated Statement of Operations
	For the three months ended August 31						For the six months ended August 31
	2008			2007			2008			2007
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
INVESTMENT INCOME
Interest from investments
Non-Control/Non-Affiliate investments	$	4,144,437		$	5,725,983		$	8,603,561		$	9,406,828
Control investments		1,111,003			-			1,746,389			-
Total interest income		5,255,440			5,725,983			10,349,950			9,406,828
Interest from cash and cash equivalents		36,008			154,946			102,697			175,997
Management fee income		489,148			-			1,011,887			383,562
Other income		54,279			695			82,494			17,298
Total investment income		5,834,875			5,881,624			11,547,028			9,983,685
EXPENSES
Interest and credit facility financing expenses		623,611			1,450,870			1,456,809			2,171,635
Base management fees		705,532			918,157			1,454,031			1,278,645
Professional fees		315,130			321,678			660,589			864,294
Administrator expenses		260,946			-			509,344			-
Incentive management fees		407,027			(18,546	)		747,134			340,822
Insurance		177,162			157,388			344,648			275,429
Directors fees		73,276			82,750			139,885			178,840
General & administrative		77,904			130,213			142,941			175,905
Cost of acquiring management contract		-			-			-			144,000
Organizational expense		-			-			-			22,868
Expenses before manager expense waiver and reimbursement		2,640,588			3,042,510			5,455,381			5,452,438
Expense reimbursement		(260,946	)		(317,676	)		(559,059	)		(583,442	)
Total expenses net of expense waiver and reimbursement		2,379,642			2,724,834			4,896,322			4,868,996
NET INVESTMENT INCOME		3,455,233			3,156,790			6,650,706			5,114,689
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain/(loss) from investments		173,681			424,187			(129,819	)		1,445,255
Net realized gain from derivatives		14,364			-			30,454			-
Net unrealized depreciation on investments		(6,194,371	)		(4,369,060	)		(6,279,188	)		(3,618,259	)
Net unrealized appreciation/(depreciation) on derivatives		(16,328	)		5,973			(28,326	)		(44,047	)
Net loss on investments		(6,022,654	)		(3,938,900	)		(6,406,879	)		(2,217,051	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(2,567,421	)	$	(782,110	)	$	243,827		$	2,897,638
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE	$	(0.31	)	$	(0.09	)	$	0.03		$	0.37
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED		8,291,384			8,291,384			8,291,384			7,938,438