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Solar Senior Capital Ltd. Announces Quarter Ended June 30, 2018 Financial Results; Declares Monthly Distribution of $0.1175 Per Share for August 2018

August 6, 2018

NEW YORK, Aug. 06, 2018 (GLOBE NEWSWIRE) -- Solar Senior Capital Ltd. (NASDAQ: SUNS) (the “Company” “Solar Senior” or “SUNS”), today reported net investment income of $5.7 million, or $0.35 per average share, for the quarter ended June 30, 2018.

At June 30, 2018, net asset value (NAV) was $16.83 per share.

The Company’s Board of Directors declared a monthly distribution for August of $0.1175 per share payable on August 31, 2018 to stockholders of record on August 23, 2018. Tax characteristics of all distributions will be reported to shareholders on Form 1099 after the end of the calendar year.

HIGHLIGHTS:

At June 30, 2018:

Comprehensive Investment portfolio* fair value: $704.8 million

Number of portfolio companies*: 171

Net assets: $269.9 million

Net asset value per share: $16.83

Comprehensive Portfolio Activity** for the Quarter Ended June 30, 2018

Investments made during the quarter: $77.8 million

Investments prepaid or sold during the quarter: $44.8 million

Operating Results for the Quarter Ended June 30, 2018

Net investment income: $5.7 million

Net investment income per share: $0.35

Net realized and unrealized loss: $0.1 million

Net increase in net assets from operations: $5.5 million

Earnings per share: $0.34

* The Comprehensive Investment Portfolio is comprised of Solar Senior Capital Ltd.’s investment portfolio, Gemino Healthcare Finance’s (“Gemino”) full portfolio, North Mill Capital LLC’s (“NorthMill”) full portfolio, and the senior secured loans held by the First Lien Loan Program (“FLLP”) attributable to the Company and excludes the Company’s fair value of its equity interest in Gemino, NorthMill, and FLLP.

** Includes investment activity through Gemino, NorthMill, and FLLP, attributable to the Company.

“We are pleased with Solar Senior Capital’s portfolio growth and operating performance in Q2 2018. Overall, the financial health of our portfolio companies remains sound,” said Michael Gross, Chairman and CEO of Solar Senior Capital Ltd. “Solar Senior’s comprehensive portfolio is predominantly comprised of first lien senior secured loans with floating rate coupons. We believe the Company is well positioned for the current environment and has the sourcing engines across cash flow and asset-based lending niches to drive additional portfolio growth and generate increased investment income.”

Conference Call and Webcast

The Company will host an earnings conference call and audio webcast at 11:00 a.m. (Eastern Time) on Tuesday, August 7, 2018. All interested parties may participate in the conference call by dialing (844) 889-7785 approximately 5-10 minutes prior to the call, international callers should dial (661) 378-9929. Participants should reference Solar Senior Capital Ltd. and the participant passcode of 4889887 when prompted. A telephone replay will be available until August 21, 2018 and can be accessed by dialing (855) 859-2056 and using the passcode 4889887. International callers should dial (404) 537-3406. This conference call will also be broadcast live over the Internet and can be accessed by all interested parties through Solar Senior Capital’s website, www.solarseniorcap.com. To listen to the webcast, please go to the Company’s website prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay of the webcast will be available soon after the call.

Comprehensive Investment Portfolio

Investment Activity

During the quarter ended June 30, 2018, Solar Senior Capital had total originations of $77.8 million and repayments of $44.8 million across the Company’s core businesses comprised of senior secured cash flow, traditional asset-based lending and healthcare asset-based lending, resulting in net comprehensive portfolio growth of ~$33.0 million, or approximately 5% over the prior quarter.

The investment activity of our Comprehensive Investment Portfolio for the quarter ended June 30, 2018 was as follows:

Total Portfolio Activity(1) – Q2 2018 (in millions) --------------------------------------------------------------------- Asset Cash Flow Asset-based Asset-based Total Portfolio Classes Loans(2) Loans Healthcare Loans Activity NorthMill(3) Gemino(4) ------------- --------- ------------ ---------------- --------------- Originations $66.5 $5.7 $5.6 $77.8 Repayments / $37.7 $5.5 $1.6 $44.8 Amortization ------------- --------- ------------ ---------------- --------------- Net Portfolio $28.8 $0.2 $4.0 $33.0 Activity ------------- --------- ------------ ---------------- ---------------

(1) Total Portfolio Activity includes gross originations/repayments across each business unit, attributable to Solar Senior.(2) Includes cash flow 1st lien senior secured loans on the Company’s balance sheet and in FLLP.(3) Includes asset-based 1st lien senior secured loans at NorthMill.(4) Includes healthcare asset-based 1st lien senior secured loans at Gemino.

Portfolio Composition

Our Comprehensive Investment Portfolio composition by business unit at June 30, 2018 was as follows:

Amount Weighte Comprehensive Investment Portfolio d Composition Average (at fair value) ($mm) % Asset-l evel Yield -------------------------------------------------------------------- ------ ------ ------ First Lien Senior Secured Loans Cash Flow 1st Lien Senior Secured Loans(1) $417.2 59.2 % 7.8 % Traditional Asset-Based 1st Lien Senior Secured Loans(2) (NorthMill) $163.0 23.1 % 13.3 % Healthcare Asset-Based 1st Lien Senior Secured Loans(3) (Gemino) $111.3 15.8 % 10.7 % -------------------------------------------------------------------- ------ ---- - Total First Lien Senior Secured Loans $691.5 98.1 % Cash Flow 2nd Lien Senior Secured Loans $13.2 1.9 % Equity and Equity-like Securities(4) $0.1 <0.1 % -------------------------------------------------------------------- ------ ---- - ------ Total Comprehensive Investment Portfolio $704.8 100 % 9.6 % -------------------------------------------------------------------- ------ ---- - ---- - Floating Rate Investments(5) $661.3 93.8 %

(1) Includes 1st lien senior secured cash flow loans on the Company’s balance sheet and in FLLP.(2) Includes NorthMill’s full asset-based funded loan portfolio, all of which are 1st lien senior secured loans.(3) Includes Gemino’s full healthcare asset-based funded loan portfolio, all of which are 1st lien senior secured loans.(4) Excludes the Company’s equity investments in NorthMill, Gemino and FLLP, which distribute quarterly dividends to the Company.(5) Floating rate investments calculated as a percent of the Company’s Comprehensive Investment Portfolio (excludes equity)

The Comprehensive Investment Portfolio is diversified across 171 unique borrowers with average issuer exposure of $4.1 million, or 0.6% of the comprehensive portfolio at June 30, 2018.

Over 98.0% of the Comprehensive Investment Portfolio is invested in first lien senior secured cash flow and asset-based loans. Second lien senior secured cash flow loans have been reduced to 1.9% of the portfolio.

Solar Senior Capital Ltd. Portfolio

Asset Quality

At June 30, 2018, 1.7% of Solar Senior’s portfolio at cost and 1.5% at fair value was on non-accrual status.

The Company puts its largest emphasis on risk control and credit performance. On a quarterly basis, or more frequently if deemed necessary, the Company formally rates each portfolio investment on a scale of one to four, with one representing the least amount of risk.

As of June 30, 2018, the composition of our portfolio, on a risk ratings basis, was as follows:

Internal Investment Rating Investments at Fair Value % of Total Portfolio -------------------------- ------------------------- -------------------- 1 $96.1 20.4% -------------------------- ------------------------- -------------------- 2 $356.9 75.9% -------------------------- ------------------------- -------------------- 3 $17.2 3.6% -------------------------- ------------------------- -------------------- 4 $0.1 <0.0% -------------------------- ------------------------- --------------------

Solar Senior Capital Ltd.’s Results of Operations for the Quarter Ended June 30, 2018 compared to the Quarter Ended June 30, 2017:

Investment Income

For the quarters ended June 30, 2018 and 2017, gross investment income totaled $9.5 million and $7.7 million, respectively. The increase in gross investment income was primarily due to portfolio growth, including from our investment in NorthMill, as well as our portfolio yield increasing year over year.

Our gross investment income by business unit is broken out below.

Investment Income Contribution by Business Unit(1) (in millions) -------------------------------------------------------------- For the Cash Flow Asset-based Asset-based Quarter Healthcare Lending Total Ended: Lending Lending (NorthMill) (Gemino) -------------- --------- ----------- ------------------ ------ 6/30/2018 $7.2 $1.4 $0.9 $9.5 % Contribution 75.8% 14.7% 9.5% 100.0%

(1) Includes income/fees from cash flow loans on balance sheet and distributions from FLLP, and distributions from NorthMill Capital and Gemino Healthcare Finance.

Expenses

Net expenses totaled $3.8 million and $2.0 million, respectively, for the quarters ended June 30, 2018 and 2017. For the fiscal quarters ended June 30, 2018 and June 30, 2017, $0.4 million of performance based incentive fees and $0.8 million, respectively, of management and performance-based incentive fees were voluntarily waived by the Company’s investment manager.

Net Investment Income

Net investment income totaled $5.7 million and $5.7 million, or $0.35 and $0.35 per average share, respectively, for the quarters ended June 30, 2018 and 2017.

Net Realized and Unrealized Gain (Loss)

Net realized and unrealized gain (loss) for the quarters ended June 30, 2018 and 2017 totaled approximately ($0.1) million and ($0.4) million, respectively.

Net Increase in Net Assets Resulting From Operations

For the quarters ended June 30, 2018 and 2017, the Company had a net increase in net assets resulting from operations of $5.5 million and $5.2 million, respectively. For the quarters ended June 30, 2018 and 2017, earnings per average share were $0.34 and $0.33, respectively.

Liquidity and Capital Resources

On June 1, 2018, the Company’s revolving credit facility was refinanced by way of amendment, allowing for greater investment flexibility and the extension of the maturity date to June 1, 2023, among other changes.

On July 13, 2018, the revolving credit commitments under the Company’s revolving credit facility were expanded by $25 million to $225 million.

As of June 30, 2018, and including the $25 million upsize post quarter end, the Company had a total of $39.1 million of unused borrowing capacity under the Company’s revolving credit facility, subject to borrowing base limits. When including FLLP, NorthMill and Gemino, the Company had approximately $160 million of unused borrowing capacity under its revolving credit facilities, subject to borrowing base limits at June 30, 2018.

Subsequent Event

On August 2, 2018, our Board approved a reduction in the minimum asset coverage ratio from 200% to 150%. This reduction will automatically apply to the Company effective as of August 2, 2019, unless approved earlier by the Company’s stockholders.

SOLAR SENIOR CAPITAL LTD.CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES(in thousands, except share amounts)

June 30, 2018 (unaudited) December 31, 2017 ----------- ----------- Assets Investments at fair value: Companies less than 5% owned (cost: $345,598 and $289,848, respectively) $ 342,240 $ 283,983 Companies 5% to 25% owned (cost: $3,866 and $3,625, respectively) 2,727 2,213 Companies more than 25% owned (cost: $122,448 and $121,298, respectively) 125,234 121,885 Cash 11,096 3,726 Cash equivalents (cost: $59,932 and $104,874, respectively) 59,932 104,874 Dividends receivable 2,877 2,723 Interest receivable 1,358 1,732 Other receivable 18 20 Receivable for investments sold — 508 Prepaid expenses and other assets 187 277 - ------- - - ------- - Total assets $ 545,669 $ 521,941 - ------- - - ------- - Liabilities Credit facility ($185,900 and $124,200 face amounts, respectively, reported net of 184,163 124,200 unamortized debt issuance costs of $1,737 and $0, respectively) $ $ Payable for investments and cash equivalents purchased 86,028 122,110 Distributions payable 1,885 1,884 Management fee payable 1,145 999 Performance-based incentive fee payable 54 374 Interest payable 652 401 Administrative services expense payable 467 944 Other liabilities and accrued expenses 1,351 898 - ------- - - ------- - Total liabilities. $ 275,745 $ 251,810 - ------- - - ------- - Net Assets Common stock, par value $0.01 per share, 200,000,000 and 200,000,000 common shares authorized, respectively, and 16,040,485 and 16,036,730 issued and outstanding, 160 160 respectively $ $ Paid-in capital in excess of par 287,906 287,841 Distributions in excess of net investment income (5,336 ) (5,336 ) Accumulated net realized loss (11,095 ) (5,844 ) Net unrealized depreciation (1,711 ) (6,690 ) - ------- - - ------- - Total net assets. $ 269,924 $ 270,131 - ------- - - ------- - Net Asset Value Per Share $ 16.83 $ 16.84 - ------- - - ------- -

SOLAR SENIOR CAPITAL LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)(in thousands, except share amounts)

Three months ended --------------------- June 30, June 30, 2018 2017 ---------- --------- INVESTMENT INCOME: Interest: Companies less than 5% owned $ 6,012 $ 5,610 Companies 5% to 25% owned 90 52 Dividends: Companies more than 25% owned 3,250 1,923 Other income: Companies less than 5% owned 78 54 Companies 5% to 25% owned 23 — Companies more than 25% owned 18 19 - ------ - - ----- - Total investment income 9,471 7,658 - ------ - - ----- - EXPENSES: Management fees $ 1,145 $ 959 Performance-based incentive fees 491 122 Interest and other credit facility expenses 1,806 896 Administrative services expense 387 367 Other general and administrative expenses 425 477 - ------ - - ----- - Total expenses 4,254 2,821 - ------ - - ----- - Management fees waived — (692 ) Performance-based incentive fees waived (437 ) (122 ) - ------ - - ----- - Net expenses 3,817 2,007 - ------ - - ----- - Net investment income $ 5,654 $ 5,651 - ------ - - ----- - REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND CASH EQUIVALENTS: Net realized gain (loss) on investments and cash equivalents (companies less than 5% owned) $ (5,244 ) $ 38 - ------ - - ----- - Net change in unrealized gain (loss) on investments and cash equivalents: Companies less than 5% owned 3,948 21 Companies 5% to 25% owned 166 — Companies more than 25% owned 995 (481 ) - ------ - - ----- - Net change in unrealized gain (loss) on investments and cash equivalents 5,109 (460 ) - ------ - - ----- - Net realized and unrealized loss on investments and cash equivalents (135 ) (422 ) - ------ - - ----- - NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,519 $ 5,229 - ------ - - ----- - EARNINGS PER SHARE $ 0.34 $ 0.33 - ------ - - ----- -

About Solar Senior Capital Ltd.

Solar Senior Capital Ltd. is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. A specialty finance company with expertise in several niche markets, the Company primarily invests directly and indirectly in leveraged, U. S. middle market companies primarily in the form of cash flow first lien senior secured debt instruments and asset-based loans including senior secured loans collateralized on a first lien basis primarily by current assets.

Forward-Looking Statements

Statements included herein may constitute “forward-looking statements,” which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission. Solar Senior Capital Ltd. undertakes no duty to update any forward-looking statements made herein.

ContactInvestor Relations(646) 308-8770

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