Davis Polk & Wardwell LLP is advising GSC Investment Corp. (the Company) on its $15 million sale of a minority stake in the Company to Saratoga Investment Advisors, LLC and CLO Partners LLC. The sale is part of GSC Investment Corp.’s $55 million recapitalization plan, which also includes a commitment from Madison Capital Funding LLC to provide the Company with a $40 million senior secured revolving credit facility. The Company will use funds available under this new facility, as well as the $15 million equity investment, to repay the full amount of the Company's existing debt and to provide the Company with working capital thereafter.

Under the terms of the agreement and subject to approval by the Company's stockholders, Saratoga will replace GSC Group, an affiliate of GSC Investment Corp., as the Company's external investment manager and administrator. The transaction is subject to certain closing conditions, including the approval of certain other elements of the transaction by the Company's stockholders.

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.”

The Davis Polk corporate team includes partner John J. McCarthy Jr. and associates David M. Hutchins and Christina Henderson (not yet admitted). Partner Danforth Townley and associate Stephen P. Forster are providing investment management and ’40 Act advice. The tax team includes partner Mary Conway. Partner Juliet Cain and associate Boyoon Choi are providing credit advice. Partner Richard A. Drucker and associate Christopher R. Bornhorst are providing securities advice. All members of the Davis Polk team are based in the New York office.