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Section 1: 10-Q (10-Q)

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


 

x

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the Quarter Ended September 30, 2012

 

o

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 


 

Commission
File Number

 

Exact name of registrants as specified in their charters, addresses of principal executive
offices, telephone numbers and states or other jurisdictions of incorporation or organization

 

I.R.S. Employer
Identification Number

814-00839

 

New Mountain Finance Holdings, L.L.C.

787 Seventh Avenue, 48th Floor
New York, New York 10019
Telephone: (212) 720-0300
State of Incorporation: Delaware

 

26-3633318

814-00832

 

New Mountain Finance Corporation

787 Seventh Avenue, 48th Floor
New York, New York 10019
Telephone: (212) 720-0300
State of Incorporation: Delaware

 

27-2978010

814-00902

 

New Mountain Finance AIV Holdings Corporation

787 Seventh Avenue, 48th Floor
New York, New York 10019
Telephone: (212) 720-0300
State of Incorporation: Delaware

 

80-0721242

 


 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

 

New Mountain Finance Holdings, L.L.C.

 

Yes x No o

 

 

New Mountain Finance Corporation

 

Yes x No o

 

 

New Mountain Finance AIV Holdings Corporation

 

Yes x No o

 

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

New Mountain Finance Holdings, L.L.C.

 

Yes o No o

 

 

New Mountain Finance Corporation

 

Yes o No o

 

 

New Mountain Finance AIV Holdings Corporation

 

Yes o No o

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

New Mountain Finance Holdings, L.L.C.

 

Large accelerated filer o

 

Accelerated filer o

 

 

Non-accelerated filer x

 

Smaller reporting company o

New Mountain Finance Corporation

 

Large accelerated filer o

 

Accelerated filer o

 

 

Non-accelerated filer x

 

Smaller reporting company o

New Mountain Finance AIV Holdings Corporation

 

Large accelerated filer o

 

Accelerated filer o

 

 

Non-accelerated filer x

 

Smaller reporting company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

New Mountain Finance Holdings, L.L.C.

 

Yes o No x

 

 

New Mountain Finance Corporation

 

Yes o No x

 

 

New Mountain Finance AIV Holdings Corporation

 

Yes o No x

 

 

 

Registrants

 

Description

 

Shares / Units as of November 6, 2012

New Mountain Finance Holdings, L.L.C.

 

Common membership units

 

36,912,573

New Mountain Finance Corporation

 

Common stock, $0.01 par value

 

20,690,635

New Mountain Finance AIV Holdings Corporation

 

Common stock, $0.01 par value

 

100

 

This combined Form 10-Q is filed separately by three registrants: New Mountain Finance Holdings, L.L.C., New Mountain Finance Corporation and New Mountain Finance AIV Holdings Corporation (collectively, the “New Mountain Finance Registrant(s)” or the “Registrant(s)”). Information contained herein relating to any New Mountain Finance Registrant is filed by such registrant solely on its own behalf. Each New Mountain Finance Registrant makes no representation as to information relating exclusively to the other registrants.

 

 

 



Table of Contents

 

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2012

TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

PART I. FINANCIAL INFORMATION

2

 

 

 

Item 1.

Financial Statements

2

 

 

 

 

New Mountain Finance Holdings, L.L.C.

 

 

Consolidated Statements of Assets, Liabilities and Members’ Capital as of September 30, 2012 (unaudited) and December 31, 2011

2

 

Consolidated Statements of Operations for the three months and nine months ended September 30, 2012 (unaudited) and September 30, 2011 (unaudited)

3

 

Consolidated Statements of Changes in Members’ Capital for the nine months ended September 30, 2012 (unaudited) and September 30, 2011 (unaudited)

4

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 (unaudited) and September 30, 2011 (unaudited)

5

 

Consolidated Schedule of Investments as of September 30, 2012 (unaudited)

6

 

Consolidated Schedule of Investments as of December 31, 2011

12

 

New Mountain Finance Corporation

 

 

Statement of Assets and Liabilities as of September 30, 2012 (unaudited) and December 31, 2011

18

 

Statements of Operations for the three months ended September 30, 2012 (unaudited) and September 30, 2011 (unaudited), the nine months ended September 30, 2012 (unaudited) and from May 19, 2011 (commencement of operations) to September 30, 2011 (unaudited)

19

 

Statement of Changes in Net Assets for the nine months ended September 30, 2012 (unaudited) and from May 19, 2011 (commencement of operations) to September 30, 2011 (unaudited)

20

 

Statement of Cash Flows for the nine months ended September 30, 2012 (unaudited) and from May 19, 2011 (commencement of operations) to September 30, 2011 (unaudited)

21

 

New Mountain Finance AIV Holdings Corporation

 

 

Statement of Assets and Liabilities as of September 30, 2012 (unaudited) and December 31, 2011

22

 

Statements of Operations for the three months ended September 30, 2012 (unaudited) and September 30, 2011 (unaudited), the nine months ended September 30, 2012 (unaudited) and from May 19, 2011 (commencement of operations) to September 30, 2011 (unaudited)

23

 

Statement of Changes in Net Assets for the nine months ended September 30, 2012 (unaudited) and from May 19, 2011 (commencement of operations) to September 30, 2011 (unaudited)

24

 

Statement of Cash Flows for the nine months ended September 30, 2012 (unaudited) and from May 19, 2011 (commencement of operations) to September 30, 2011 (unaudited)

25

 

 

 

 

Combined Notes to the Consolidated Financial Statements of New Mountain Finance Holdings, L.L.C., the Financial Statements of New Mountain Finance Corporation and the Financial Statements of New Mountain Finance AIV Holdings Corporation

26

 

 

 

 

Report of Independent Registered Public Accounting Firm

51

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

52

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

69

Item 4.

Controls and Procedures

69

 

 

 

PART II. OTHER INFORMATION

70

 

 

 

Item 1.

Legal Proceedings

70

Item 1A.

Risk Factors

70

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

70

Item 3.

Defaults upon Senior Securities

70

Item 4.

Mine Safety Disclosures

70

Item 5.

Other Information

70

Item 6.

Exhibits

71

 

Signatures

75

 

1



Table of Contents

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Statements of Assets, Liabilities and Members’ Capital

 

 

 

September 30, 2012

 

December 31, 2011

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Investments at fair value (cost of $844,524,713 and $699,864,784, respectively)

 

$

858,884,178

 

$

703,513,560

 

Cash and cash equivalents

 

12,670,690

 

15,318,811

 

Interest and dividend receivable

 

8,579,017

 

7,307,092

 

Deferred credit facility costs (net of accumulated amortization of $1,680,588 and $855,955, respectively)

 

5,317,053

 

3,713,739

 

Receivable from affiliate

 

170,909

 

369,017

 

Other assets

 

1,206,326

 

356,486

 

Total assets

 

$

886,828,173

 

$

730,578,705

 

Liabilities

 

 

 

 

 

SLF Credit Facility

 

200,000,000

 

165,928,000

 

Holdings Credit Facility

 

135,664,913

 

129,037,813

 

Payable for unsettled securities purchased

 

19,800,000

 

7,604,931

 

Incentive fee payable

 

6,525,063

 

2,317,328

 

Management fee payable

 

2,767,648

 

2,200,354

 

Interest payable

 

580,796

 

1,747,095

 

Payable to affiliate

 

22,728

 

 

Other liabilities

 

1,112,085

 

1,241,366

 

Total liabilities

 

366,473,233

 

310,076,887

 

Members’ Capital

 

520,354,940

 

420,501,818

 

Total liabilities and members’ capital

 

$

886,828,173

 

$

730,578,705

 

Outstanding common membership units

 

36,912,573

 

30,919,629

 

Capital per unit

 

$

14.10

 

$

13.60

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

2



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Statements of Operations

(unaudited)

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30, 2012

 

September 30, 2011

 

September 30, 2012

 

September 30, 2011

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

21,362,055

 

$

14,860,750

 

$

60,087,281

 

$

38,838,944

 

Dividend income

 

215,160

 

 

215,160

 

 

Other income

 

174,515

 

207,831

 

770,313

 

557,648

 

Total investment income

 

21,751,730

 

15,068,581

 

61,072,754

 

39,396,592

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive fee

 

5,561,173

 

700,610

 

11,693,825

 

1,205,003

 

Management fee

 

2,767,649

 

1,930,140

 

7,887,506

 

2,737,649

 

Interest and other credit facility expenses

 

2,401,847

 

1,686,113

 

7,286,164

 

4,767,013

 

Administrative expenses (net of reimbursable expenses of $267,973, $218,396, $850,816 and $398,651, respectively)

 

276,277

 

314,250

 

753,021

 

517,668

 

Professional fees (net of reimbursable expenses of $170,909, $816,530, $535,771 and $946,716, respectively)

 

233,561

 

55,138

 

742,934

 

624,972

 

Other general and administrative expenses

 

375,777

 

380,612

 

1,014,660

 

559,180

 

Total expenses

 

11,616,284

 

5,066,863

 

29,378,110

 

10,411,485

 

Net investment income

 

10,135,446

 

10,001,718

 

31,694,644

 

28,985,107

 

 

 

 

 

 

 

 

 

 

 

Net realized gains on investments

 

1,615,032

 

1,402,671

 

14,590,819

 

13,954,834

 

Net change in unrealized appreciation (depreciation) of investments

 

10,494,213

 

(22,657,239

)

10,710,689

 

(29,119,352

)

Net increase (decrease) in capital resulting from operations

 

$

22,244,691

 

$

(11,252,850

)

$

56,996,152

 

$

13,820,589

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Statements of Changes in Members’ Capital

(unaudited)

 

 

 

Nine months ended

 

 

 

September 30, 2012

 

September 30, 2011

 

Increase (decrease) in members’ capital resulting from operations:

 

 

 

 

 

Net investment income

 

$

31,694,644

 

$

28,985,107

 

Net realized gains on investments

 

14,590,819

 

13,954,834

 

Net change in unrealized appreciation (depreciation) of investments

 

10,710,689

 

(29,119,352

)

Net increase in members’ capital resulting from operations

 

56,996,152

 

13,820,589

 

Distributions

 

 

(10,249,155

)

Contributions

 

 

65,429,677

 

Net proceeds from issuance of members’ units

 

82,299,574

 

129,864,997

 

Dividends declared

 

(40,046,256

)

(17,314,992

)

Offering costs

 

(376,559

)

(11,557,173

)

Reinvestment of dividends

 

980,211

 

 

Net increase in members’ capital

 

99,853,122

 

169,993,943

 

Members’ capital at beginning of period

 

420,501,818

 

241,927,261

 

Members’ capital at end of period

 

$

520,354,940

 

$

411,921,204

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Statements of Cash Flows

(unaudited)

 

 

 

Nine months ended

 

 

 

September 30, 2012

 

September 30, 2011

 

Cash flows from operating activities

 

 

 

 

 

Net increase in members’ capital resulting from operations

 

$

56,996,152

 

$

13,820,589

 

Adjustments to reconcile net (increase) decrease in capital resulting from operations to net cash (used in) provided by operating activities:

 

 

 

 

 

Net realized gains on investments

 

(14,590,819

)

(13,954,834

)

Net change in unrealized (appreciation) depreciation of investments

 

(10,710,689

)

29,119,352

 

Amortization of purchase discount

 

(4,548,871

)

(5,048,033

)

Amortization of deferred credit facility costs

 

824,634

 

540,957

 

Non-cash interest income

 

(888,438

)

(957,171

)

(Increase) decrease in operating assets:

 

 

 

 

 

Purchase of investments

 

(392,161,971

)

(355,424,928

)

Proceeds from sales and paydowns of investments

 

268,370,176

 

182,264,633

 

Cash received for purchase of undrawn portion of revolving credit facility

 

 

1,260,000

 

Cash paid for drawn revolvers

 

(10,710,000

)

(535,593

)

Cash repayments on drawn revolvers

 

9,870,000

 

 

Interest and dividend receivable

 

(1,271,925

)

(3,753,482

)

Receivable from unsettled securities sold

 

 

(6,755,000

)

Receivable from affiliate

 

198,108

 

(1,003,530

)

Other assets

 

(641,517

)

(515,714

)

Increase (decrease) in operating liabilities:

 

 

 

 

 

Payable for unsettled securities purchased

 

12,195,069

 

(94,462,500

)

Incentive fee payable

 

4,207,735

 

700,610

 

Management fee payable

 

567,294

 

1,930,140

 

Interest payable

 

(1,166,299

)

416,448

 

Payable to affiliate

 

22,728

 

(202,180

)

Other liabilities

 

(322,345

)

525,198

 

Net cash flows (used in) provided by operating activities

 

(83,760,978

)

(252,035,038

)

Cash flows from financing activities

 

 

 

 

 

Contributions

 

 

65,429,677

 

Distributions

 

 

(10,249,155

)

Net proceeds from issuance of members’ units

 

82,299,574

 

129,864,997

 

Dividends paid

 

(39,066,045

)

(17,314,992

)

Offering costs paid

 

(258,516

)

(11,500,044

)

Proceeds from Holdings Credit Facility

 

311,326,025

 

205,870,450

 

Repayment of Holdings Credit Facility

 

(304,698,925

)

(207,664,263

)

Proceeds from SLF Credit Facility

 

89,031,051

 

134,361,800

 

Repayment of SLF Credit Facility

 

(54,959,051

)

(24,691,352

)

Deferred credit facility costs paid

 

(2,561,256

)

(4,377,595

)

Net cash flows provided by financing activities

 

81,112,857

 

259,729,523

 

Net (decrease) increase in cash and cash equivalents

 

(2,648,121

)

7,694,485

 

Cash and cash equivalents at the beginning of the period

 

15,318,811

 

10,744,082

 

Cash and cash equivalents at the end of the period

 

$

12,670,690

 

$

18,438,567

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Interest paid

 

$

7,184,552

 

$

3,025,253

 

Non-cash financing activities:

 

 

 

 

 

Value of members’ capital issued in connection with dividend reinvestment plan

 

$

980,211

 

$

 

Accrual for offering costs

 

326,372

 

57,129

 

Accrual for deferred credit facility costs

 

58,791

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Schedule of Investments

 

September 30, 2012

(unaudited)

 

Portfolio Company, Location and
Industry

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par Value
or Shares

 

Cost

 

Fair
Value

 

Percent of
Members’
Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funded Debt Investments - Cayman Islands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pinnacle Holdco S.à r.l. / Pinnacle (US) Acquisition Co Limited**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

6.50% (Base Rate + 5.25%)

 

7/30/2019

 

$

15,000,000

 

$

14,913,322

 

$

14,962,500

 

 

 

 

 

Second lien (2)

 

10.50% (Base Rate + 9.25%)

 

7/30/2020

 

30,000,000

 

29,407,720

 

30,450,000

 

 

 

 

 

 

 

 

 

 

 

45,000,000

 

44,321,042

 

45,412,500

 

8.73

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Funded Debt Investments - Cayman Islands

 

 

 

 

 

 

 

$

45,000,000

 

$

44,321,042

 

$

45,412,500

 

8.73

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funded Debt Investments - United Kingdom

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Magic Newco, LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

12/12/2018

 

$

15,000,000

 

$

14,566,032

 

$

15,089,070

 

2.90

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Funded Debt Investments - United Kingdom

 

 

 

 

 

 

 

$

15,000,000

 

$

14,566,032

 

$

15,089,070

 

2.90

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funded Debt Investments - United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plato, Inc. (Archipelago Learning, Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

7.50% (Base Rate + 6.00%)

 

5/17/2018

 

$

11,850,000

 

$

11,511,291

 

$

11,894,438

 

 

 

 

 

Second lien (2)

 

11.25% (Base Rate + 9.75%)

 

5/17/2019

 

29,150,000

 

28,589,575

 

28,567,000

 

 

 

 

 

 

 

 

 

 

 

41,000,000

 

40,100,866

 

40,461,438

 

7.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Novell, Inc. (fka Attachmate Corporation, NetIQ Corporation)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 5.75%)

 

11/22/2017

 

7,850,000

 

7,701,167

 

7,923,594

 

 

 

 

 

Second lien (2)

 

11.00% (Base Rate + 9.50%)

 

11/22/2018

 

24,000,000

 

23,306,638

 

23,535,000

 

 

 

 

 

 

 

 

 

 

 

31,850,000

 

31,007,805

 

31,458,594

 

6.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rocket Software, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.25% (Base Rate + 8.75%)

 

2/8/2019

 

30,875,000

 

30,706,131

 

30,836,406

 

5.92

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unitek Global Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

9.00% (Base Rate + 7.50%)

 

4/15/2018

 

19,700,000

 

19,229,669

 

19,379,875

 

 

 

 

 

First lien (2)

 

9.00% (Base Rate + 7.50%)

 

4/15/2018

 

4,975,000

 

4,786,094

 

4,894,156

 

 

 

 

 

First lien (2)

 

9.00% (Base Rate + 7.50%)

 

4/15/2018

 

5,985,000

 

5,806,242

 

5,887,744

 

 

 

 

 

 

 

 

 

 

 

30,660,000

 

29,822,005

 

30,161,775

 

5.80

%

Managed Health Care Associates, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (2)

 

3.47% (Base Rate + 3.25%)

 

8/1/2014

 

14,755,543

 

13,009,095

 

14,275,988

 

 

 

 

 

Second lien (2)

 

6.72% (Base Rate + 6.50%)

 

2/1/2015

 

15,000,000

 

12,567,838

 

14,475,000

 

 

 

 

 

 

 

 

 

 

 

29,755,543

 

25,576,933

 

28,750,988

 

5.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Knowledge Training LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

6.50% (Base Rate + 4.99%)

 

4/21/2017

 

4,806,802

 

4,745,019

 

4,734,699

 

 

 

 

 

Second lien (2)

 

11.50% (Base Rate + 9.75%)

 

10/21/2018

 

24,250,000

 

23,800,763

 

23,755,300

 

 

 

 

 

 

 

 

 

 

 

29,056,802

 

28,545,782

 

28,489,999

 

5.48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meritas Schools Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

7.50% (Base Rate + 6.00%)

 

7/29/2017

 

8,390,000

 

8,319,083

 

8,390,000

 

 

 

 

 

Second lien (2)

 

11.50% (Base Rate + 10.00%)

 

1/29/2018

 

20,000,000

 

19,738,032

 

20,050,000

 

 

 

 

 

 

 

 

 

 

 

28,390,000

 

28,057,115

 

28,440,000

 

5.47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insight Pharmaceuticals LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien (2)

 

13.25% (Base Rate + 11.75%)

 

8/25/2017

 

25,000,000

 

24,125,366

 

24,625,000

 

4.73

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SRA International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

4,315,000

 

4,222,087

 

4,288,031

 

 

 

 

 

First lien (3)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

20,436,329

 

19,715,305

 

20,308,602

 

 

 

 

 

 

 

 

 

 

 

24,751,329

 

23,937,392

 

24,596,633

 

4.73

%

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Schedule of Investments (continued)

 

September 30, 2012

(unaudited)

 

Portfolio Company, Location and
Industry

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par Value
or Shares

 

Cost

 

Fair
Value

 

Percent of
Members’
Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ipreo Holdings LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information Services

 

First lien (2)

 

8.00% (Base Rate + 6.50%)

 

8/7/2017

 

$

2,992,500

 

$

2,963,476

 

$

2,992,500

 

 

 

 

 

First lien (3)

 

8.00% (Base Rate + 6.50%)

 

8/7/2017

 

18,562,500

 

18,212,926

 

18,562,500

 

 

 

 

 

 

 

 

 

 

 

21,555,000

 

21,176,402

 

21,555,000

 

4.14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renaissance Learning, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Second lien (2)

 

12.00% (Base Rate + 10.50%)

 

10/19/2018

 

20,000,000

 

19,088,505

 

20,500,000

 

3.94

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Learning Care Group (US), Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

12.00%

 

4/27/2016

 

17,368,421

 

17,159,158

 

16,695,606

 

 

 

 

 

Subordinated (2)

 

15.00% PIK*

 

6/30/2016

 

3,518,479

 

3,364,940

 

3,194,889

 

 

 

 

 

 

 

 

 

 

 

20,886,900

 

20,524,098

 

19,890,495

 

3.82

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eResearchTechnology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

8.00% (Base Rate + 6.50%)

 

5/2/2018

 

20,000,000

 

19,223,418

 

19,837,500

 

3.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six3 Systems, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)

 

7.00% (Base Rate + 5.75%)

 

10/4/2019

 

20,000,000

 

19,800,000

 

19,800,000

 

3.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transplace Texas, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Logistics

 

Second lien (2)

 

11.00% (Base Rate + 9.00%)

 

4/12/2017

 

20,000,000

 

19,567,234

 

19,500,000

 

3.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Smile Brands Group Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

7.00% (Base Rate + 5.25%)

 

12/21/2017

 

17,409,960

 

17,264,301

 

17,464,367

 

3.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brock Holdings III, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Services

 

Second lien (2)

 

10.00% (Base Rate + 8.25%)

 

3/16/2018

 

17,000,000

 

16,769,702

 

17,042,500

 

3.28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PODS, Inc. (7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PODS Funding Corp. II

 

First lien (3)

 

8.50% (Base Rate + 7.00%)

 

11/29/2016

 

12,473,577

 

12,148,661

 

12,442,393

 

 

 

Storapod Holding Company, Inc.

 

Subordinated (2)

 

21.00% PIK*

 

11/29/2017

 

4,500,000

 

4,356,024

 

4,344,095

 

 

 

 

 

 

 

 

 

 

 

16,973,577

 

16,504,685

 

16,786,488

 

3.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sotera Defense Solutions, Inc. (Global Defense Technology & Systems, Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.00% (Base Rate + 5.50%)

 

4/21/2017

 

16,787,570

 

16,659,206

 

16,619,694

 

3.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KeyPoint Government Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)

 

10.25% (Base Rate + 7.00%)

 

12/31/2015

 

16,364,668

 

16,135,054

 

16,446,491

 

3.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEWAsurion Corporation (6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asurion, LLC (fka Asurion Corporation)

 

Second lien (2)

 

9.00% (Base Rate + 7.50%)

 

5/24/2019

 

2,229,299

 

2,220,007

 

2,310,111

 

 

 

Lonestar Intermediate Super Holdings, LLC

 

Subordinated (2)

 

11.00% (Base Rate + 9.50%)

 

9/2/2019

 

12,000,000

 

11,657,714

 

12,825,000

 

 

 

 

 

 

 

 

 

 

 

14,229,299

 

13,877,721

 

15,135,111

 

2.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OpenLink International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.75% (Base Rate + 6.25%)

 

10/30/2017

 

14,887,500

 

14,626,310

 

14,980,547

 

2.88

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Landslide Holdings, Inc. (Crimson Acquisition Corp.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

6/19/2018

 

14,812,500

 

14,526,917

 

14,886,192

 

2.86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume Services America, Inc. (Centerplate)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

First lien (2)

 

10.50% (Base Rate + 8.50%)

 

9/16/2016

 

14,737,500

 

14,448,936

 

14,737,500

 

2.83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Triple Point Technology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

8.00% (Base Rate + 6.50%)

 

10/27/2017

 

14,391,250

 

13,884,062

 

14,427,228

 

2.77

%

 

The accompanying notes are an integral part of these consolidated financial statements.

 

7



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Schedule of Investments (continued)

 

September 30, 2012

(unaudited)

 

Portfolio Company, Location and
Industry

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par Value
or Shares

 

Cost

 

Fair
Value

 

Percent of
Members’
Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sabre Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (2)

 

7.25% (Base Rate + 6.00%)

 

12/29/2017

 

$

14,000,000

 

$

13,950,842

 

$

14,128,338

 

2.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Virtual Radiologic Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Information Technology

 

First lien (3)

 

7.75% (Base Rate + 4.50%)

 

12/22/2016

 

14,777,469

 

14,616,427

 

13,299,722

 

2.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aspen Dental Management, Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

7.00% (Base Rate + 5.50%)

 

10/6/2016

 

12,902,500

 

12,670,893

 

12,870,244

 

2.47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Van Wagner Communications, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (2)

 

8.25% (Base Rate + 7.00%)

 

8/3/2018

 

12,000,000

 

11,764,551

 

12,230,004

 

2.35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supervalu Inc.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

First lien (2)

 

8.00% (Base Rate + 6.75%)

 

8/30/2018

 

11,970,000

 

11,614,165

 

12,060,709

 

2.32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vision Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.50% (Base Rate + 8.00%)

 

7/23/2017

 

12,000,000

 

11,908,205

 

12,030,000

 

2.31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TravelCLICK, Inc. (fka TravelCLICK Acquisition Co.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information Services

 

First lien (3)

 

6.50% (Base Rate + 5.00%)

 

3/16/2016

 

11,315,157

 

11,157,696

 

11,258,581

 

2.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merrill Communications LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

9.75% (Base Rate + 6.50%)

 

12/24/2012

 

11,421,788

 

11,132,749

 

11,207,630

 

2.15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mailsouth, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (3)

 

6.75% (Base Rate + 5.00%)

 

12/14/2016

 

11,164,655

 

11,039,209

 

10,997,185

 

2.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Immucor, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

5.75% (Base Rate + 4.50%)

 

8/19/2018

 

4,950,094

 

4,777,916

 

5,024,345

 

 

 

 

 

Subordinated (2)

 

11.13%

 

8/15/2019

 

5,000,000

 

4,941,655

 

5,675,000

 

 

 

 

 

 

 

 

 

 

 

9,950,094

 

9,719,571

 

10,699,345

 

2.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Permian Tank & Manufacturing, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien (3)

 

9.00% (Base Rate + 7.25%)

 

3/15/2017

 

10,657,658

 

10,414,096

 

10,657,658

 

2.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP Holdings LLC (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP Intermediate Holdings Corp. / YP Intermediate Holdings II LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

Second lien (2)

 

15.00% (12.00% + 3.00% PIK)*

 

5/18/2017

 

10,411,891

 

9,676,418

 

10,516,010

 

2.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHG Companies, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Second lien (2)

 

11.25% (Base Rate + 9.50%)

 

4/7/2017

 

10,000,000

 

9,845,241

 

10,050,000

 

1.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vertafore, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.75% (Base Rate + 8.25%)

 

10/29/2017

 

10,000,000

 

9,920,803

 

10,050,000

 

1.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premier Dental Services, Inc. (Western)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (2)

 

5.87% (Base Rate + 5.50%)

 

7/1/2013

 

9,961,832

 

9,550,010

 

9,936,928

 

1.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merge Healthcare Inc.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (2)

 

11.75%

 

5/1/2015

 

9,000,000

 

8,906,260

 

9,787,500

 

1.88

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consona Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

8/6/2018

 

8,500,000

 

8,416,300

 

8,415,000

 

1.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Physio-Control International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

First lien (2)(8)

 

9.88%

 

1/15/2019

 

7,000,000

 

7,000,000

 

7,700,000

 

1.48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Surgery Center Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

6.50% (Base Rate + 5.00%)

 

2/6/2017

 

6,851,250

 

6,825,324

 

6,851,250

 

1.32

%

 

The accompanying notes are an integral part of these consolidated financial statements.

 

8



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Schedule of Investments (continued)

 

September 30, 2012

(unaudited)

 

Portfolio Company, Location and
Industry

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par Value
or Shares

 

Cost

 

Fair
Value

 

Percent of
Members’
Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research Pharmaceutical Services, Inc.