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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 March 31, 2013

 

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 x

 

Non-accelerated filer o

Smaller reporting company o

New Mountain Finance Corporation

Large accelerated filer o

Accelerated filer x

 

Non-accelerated filer o

Smaller reporting company o

New Mountain Finance AIV Holdings Corporation

Large accelerated filer o

Accelerated filer x

 

Non-accelerated filer o

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 May 6, 2013

 

New Mountain Finance Holdings, L.L.C.

 

Common membership units

 

42,646,598

 

New Mountain Finance Corporation

 

Common stock, $0.01 par value

 

31,324,660

 

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 MARCH 31, 2013

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 March 31, 2013 (unaudited) and December 31, 2012

2

 

Consolidated Statements of Operations for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

3

 

Consolidated Statements of Changes in Members’ Capital for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

4

 

Consolidated Statements of Cash Flows for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

5

 

Consolidated Schedule of Investments as of March 31, 2013 (unaudited)

6

 

Consolidated Schedule of Investments as of December 31, 2012

12

 

New Mountain Finance Corporation

 

 

Statement of Assets and Liabilities as of March 31, 2013 (unaudited) and December 31, 2012

18

 

Statements of Operations for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

19

 

Statement of Changes in Net Assets for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

20

 

Statement of Cash Flows for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

21

 

New Mountain Finance AIV Holdings Corporation

 

 

Statement of Assets and Liabilities as of March 31, 2013 (unaudited) and December 31, 2012

22

 

Statements of Operations for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

23

 

Statement of Changes in Net Assets for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (unaudited)

24

 

Statement of Cash Flows for the three months ended March 31, 2013 (unaudited) and March 31, 2012 (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

48

 

 

 

Item 2.

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

49

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

64

Item 4.

Controls and Procedures

65

 

 

 

PART II. OTHER INFORMATION

66

 

 

 

Item 1.

Legal Proceedings

66

Item 1A.

Risk Factors

66

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

66

Item 3.

Defaults Upon Senior Securities

66

Item 4.

Mine Safety Disclosures

66

Item 5.

Other Information

66

Item 6.

Exhibits

66

 

Signatures

71

 

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

(in thousands, except units and per unit data)

 

 

 

March 31, 2013

 

December 31, 2012

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Investments at fair value (cost of $1,005,399 and $976,243, respectively)

 

$

1,030,866

 

$

989,820

 

Cash and cash equivalents

 

15,878

 

12,752

 

Interest and dividend receivable

 

9,549

 

6,340

 

Deferred credit facility costs (net of accumulated amortization of $2,373 and $2,016, respectively)

 

5,386

 

5,490

 

Receivable from affiliate

 

495

 

534

 

Receivable from unsettled securities sold

 

 

9,962

 

Other assets

 

1,244

 

666

 

Total assets

 

$

1,063,418

 

$

1,025,564

 

Liabilities

 

 

 

 

 

Holdings Credit Facility

 

215,163

 

206,938

 

SLF Credit Facility

 

215,000

 

214,262

 

Incentive fee payable

 

10,547

 

7,797

 

Management fee payable

 

3,568

 

3,222

 

Dividends payable

 

5,516

 

11,192

 

Interest payable

 

810

 

712

 

Payable to affiliate

 

5

 

 

Payable for unsettled securities purchased

 

 

9,700

 

Other liabilities

 

2,331

 

1,802

 

Total liabilities

 

452,940

 

455,625

 

Members’ Capital

 

610,478

 

569,939

 

Total liabilities and members’ capital

 

$

1,063,418

 

$

1,025,564

 

Outstanding common membership units

 

42,646,598

 

40,548,189

 

Capital per unit

 

$

14.31

 

$

14.06

 

 

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

(in thousands)

(unaudited)

 

 

 

Three months ended

 

 

 

March 31, 2013

 

March 31, 2012

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

25,043

 

$

18,601

 

Other income

 

275

 

421

 

Total investment income

 

25,318

 

19,022

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

Incentive fee

 

6,140

 

3,361

 

Management fee

 

3,568

 

2,514

 

Interest and other credit facility expenses

 

3,071

 

2,483

 

Administrative expenses (net of reimbursable expenses of $334 and $304, respectively)

 

425

 

252

 

Professional fees (net of reimbursable expenses of $495 and $246, respectively)

 

77

 

202

 

Other general and administrative expenses

 

410

 

297

 

Total expenses

 

13,691

 

9,109

 

Net investment income

 

11,627

 

9,913

 

 

 

 

 

 

 

Net realized gains on investments

 

1,044

 

1,007

 

Net change in unrealized appreciation (depreciation) of investments

 

11,890

 

12,747

 

Net increase in members’ capital resulting from operations

 

$

24,561

 

$

23,667

 

 

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

(in thousands)

(unaudited)

 

 

 

Three months ended

 

 

 

March 31, 2013

 

March 31, 2012

 

Increase in members’ capital resulting from operations:

 

 

 

 

 

Net investment income

 

$

11,627

 

$

9,913

 

Net realized gains on investments

 

1,044

 

1,007

 

Net change in unrealized appreciation (depreciation) of investments

 

11,890

 

12,747

 

Net increase in members’ capital resulting from operations

 

24,561

 

23,667

 

Net contributions

 

28,400

 

 

Dividends declared

 

(13,797

)

(9,895

)

Offering costs

 

(75

)

 

Reinvestment of dividends

 

1,450

 

 

Net increase in members’ capital

 

40,539

 

13,772

 

Members’ capital at beginning of period

 

569,939

 

420,502

 

Members’ capital at end of period

 

$

610,478

 

$

434,274

 

 

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

(in thousands)

(unaudited)

 

 

 

Three months ended

 

 

 

March 31, 2013

 

March 31, 2012

 

Cash flows from operating activities

 

 

 

 

 

Net increase in members’ capital resulting from operations

 

$

24,561

 

$

23,667

 

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

 

 

 

 

 

Net realized gains on investments

 

(1,044

)

(1,007

)

Net change in unrealized appreciation of investments

 

(11,890

)

(12,747

)

Amortization of purchase discount

 

(1,103

)

(1,539

)

Amortization of deferred credit facility costs

 

357

 

243

 

Non-cash interest income

 

(114

)

(204

)

(Increase) decrease in operating assets:

 

 

 

 

 

Purchase of investments

 

(112,005

)

(106,680

)

Proceeds from sales and paydowns of investments

 

85,110

 

71,672

 

Cash paid for drawn revolvers

 

 

(7,665

)

Cash repayments on drawn revolvers

 

 

3,465

 

Interest and dividend receivable

 

(3,209

)

(558

)

Receivable from unsettled securities sold

 

9,962

 

(4,924

)

Receivable from affiliate

 

39

 

123

 

Other assets

 

(157

)

27

 

Increase (decrease) in operating liabilities:

 

 

 

 

 

Payable for unsettled securities purchased

 

(9,700

)

4,575

 

Incentive fee payable

 

2,750

 

1,044

 

Management fee payable

 

346

 

314

 

Interest payable

 

98

 

352

 

Payable to affiliate

 

5

 

 

Other liabilities

 

238

 

(263

)

Net cash flows used in operating activities

 

(15,756

)

(30,105

)

Cash flows from financing activities

 

 

 

 

 

Net contributions

 

28,400

 

 

Dividends paid

 

(18,023

)

(3,423

)

Offering costs paid

 

(224

)

 

Proceeds from Holdings Credit Facility

 

65,425

 

93,884

 

Repayment of Holdings Credit Facility

 

(57,200

)

(70,999

)

Proceeds from SLF Credit Facility

 

3,238

 

22,131

 

Repayment of SLF Credit Facility

 

(2,500

)

(13,059

)

Deferred credit facility costs paid

 

(234

)

(192

)

Net cash flows provided by financing activities

 

18,882

 

28,342

 

Net increase (decrease) in cash and cash equivalents

 

3,126

 

(1,763

)

Cash and cash equivalents at the beginning of the period

 

12,752

 

15,319

 

Cash and cash equivalents at the end of the period

 

$

15,878

 

$

13,556

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Interest paid

 

$

2,545

 

$

1,778

 

Non-cash financing activities:

 

 

 

 

 

Dividends declared and payable

 

$

5,516

 

$

6,472

 

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

 

1,450

 

 

Accrual for offering costs

 

828

 

 

Accrual for deferred credit facility costs

 

64

 

7

 

 

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

 

March 31, 2013
(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,

Par Value
or Shares

 

Cost

 

Fair Value

 

Percent of
Members’
Capital

 

Funded Debt Investments—Bermuda

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stratus Technologies Bermuda Holdings Ltd. (4)**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stratus Technologies Bermuda Ltd. / Stratus Technologies, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information Technology

 

First lien (2)(7)

 

12.00%

 

3/29/2015

 

$

6,664

 

$

6,411

 

$

6,855

 

1.12

%

Total Funded Debt Investments—Bermuda

 

 

 

 

 

 

 

$

6,664

 

$

6,411

 

$

6,855

 

1.12

%

Funded Debt Investments—Cayman Islands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.50% (Base Rate + 9.25%)

 

7/30/2020

 

$

30,000

 

$

29,433

 

$

30,581

 

5.01

%

Total Funded Debt Investments—Cayman Islands

 

 

 

 

 

 

 

$

30,000

 

$

29,433

 

$

30,581

 

5.01

%

Funded Debt Investments—United Kingdom

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Magic Newco, LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

12/12/2018

 

$

14,925

 

$

14,521

 

$

15,196

 

2.49

%

Total Funded Debt Investments—United Kingdom

 

 

 

 

 

 

 

$

14,925

 

$

14,521

 

$

15,196

 

2.49

%

Funded Debt Investments—United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McGraw-Hill Global Education Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

9.75%

 

4/1/2021

 

$

20,000

 

$

19,889

 

$

19,900

 

 

 

 

 

Second lien (2)

 

9.00% (Base Rate + 7.75%)

 

3/22/2019

 

20,000

 

19,383

 

19,400

 

 

 

 

 

 

 

 

 

 

 

40,000

 

39,272

 

39,300

 

6.44

%

Edmentum, Inc.(fka Plato, Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

6.00% (Base Rate + 4.75%)

 

5/17/2018

 

6,616

 

6,441

 

6,666

 

 

 

 

 

Second lien (2)

 

11.25% (Base Rate + 9.75%)

 

5/17/2019

 

29,150

 

28,618

 

29,150

 

 

 

 

 

 

 

 

 

 

 

35,766

 

35,059

 

35,816

 

5.87

%

SRA International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

20,436

 

19,766

 

20,436

 

 

 

 

 

First lien (2)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

14,314

 

13,888

 

14,314

 

 

 

 

 

 

 

 

 

 

 

34,750

 

33,654

 

34,750

 

5.69

%

Pharmaceutical Research Associates, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Second lien (2)

 

10.50% (Base Rate + 9.25%)

 

6/10/2019

 

34,000

 

33,419

 

34,382

 

5.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.27% (Base Rate + 5.72%)

 

11/22/2017

 

7,550

 

7,418

 

7,640

 

 

 

 

 

Second lien (2)

 

11.00% (Base Rate + 9.50%)

 

11/22/2018

 

24,000

 

23,347

 

24,270

 

 

 

 

 

 

 

 

 

 

 

31,550

 

30,765

 

31,910

 

5.23

%

Rocket Software, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.25% (Base Rate + 8.75%)

 

2/8/2019

 

30,875

 

30,716

 

30,798

 

5.05

%

Unitek Global Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

9.00% (Base Rate + 7.50%)

 

4/16/2018

 

19,600

 

19,174

 

19,551

 

 

 

 

 

First lien (2)

 

9.00% (Base Rate + 7.50%)

 

4/16/2018

 

5,955

 

5,789

 

5,940

 

 

 

 

 

First lien (2)

 

9.00% (Base Rate + 7.50%)

 

4/16/2018

 

4,950

 

4,775

 

4,938

 

 

 

 

 

 

 

 

 

 

 

30,505

 

29,738

 

30,429

 

4.98

%

Global Knowledge Training LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

6.51% (Base Rate + 4.99%)

 

4/21/2017

 

4,746

 

4,691

 

4,675

 

 

 

 

 

First lien (3)

 

6.50% (Base Rate + 5.00%)

 

4/21/2017

 

1,174

 

1,160

 

1,156

 

 

 

 

 

Second lien (2)

 

11.50% (Base Rate + 9.75%)

 

10/21/2018

 

24,250

 

23,827

 

24,225

 

 

 

 

 

 

 

 

 

 

 

30,170

 

29,678

 

30,056

 

4.92

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KeyPoint Government Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)

 

7.25% (Base Rate + 6.00%)

 

11/13/2017

 

29,625

 

28,975

 

29,625

 

4.85

%

Transtar Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

Second lien (2)

 

9.75% (Base Rate + 8.50%)

 

10/9/2019

 

28,300

 

27,800

 

29,149

 

4.77

%

Meritas Schools Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

7.50% (Base Rate + 6.00%)

 

7/29/2017

 

7,911

 

7,849

 

7,911

 

 

 

 

 

Second lien (2)

 

11.50% (Base Rate + 10.00%)

 

1/29/2018

 

20,000

 

19,756

 

20,000

 

 

 

 

 

 

 

 

 

 

 

27,911

 

27,605

 

27,911

 

4.57

%

Kronos Incorporated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.75% (Base Rate + 8.50%)

 

4/30/2020

 

25,000

 

24,759

 

26,187

 

4.29

%

Permian Tank & Manufacturing, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien (2)

 

10.50%

 

1/15/2018

 

24,500

 

24,795

 

25,358

 

4.15

%

Managed Health Care Associates, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (2)

 

3.46% (Base Rate + 3.25%)

 

8/1/2014

 

9,756

 

8,937

 

9,756

 

 

 

 

 

Second lien (2)

 

6.71% (Base Rate + 6.50%)

 

2/1/2015

 

15,000

 

13,021

 

14,850

 

 

 

 

 

 

 

 

 

 

 

24,756

 

21,958

 

24,606

 

4.03

%

 

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)

 

March 31, 2013

(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,

Par Value
or Shares

 

Cost

 

Fair Value

 

Percent of
Members’
Capital

 

St. George’s University Scholastic Services LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

8.50% (Base Rate + 7.00%)

 

12/20/2017

 

$

19,013

 

$

18,648

 

$

19,036

 

 

 

 

 

First lien (3)

 

8.50% (Base Rate + 7.00%)

 

12/20/2017

 

4,387

 

4,303

 

4,393

 

 

 

 

 

 

 

 

 

 

 

23,400

 

22,951

 

23,429

 

3.84

%

Aderant North America, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.00% (Base Rate + 8.75%)

 

6/20/2019

 

22,500

 

22,172

 

23,006

 

3.77

%

Learning Care Group (US), Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

14.00% (12.00% + 2.00% PIK)*

 

4/27/2016

 

17,368

 

17,188

 

16,696

 

 

 

 

 

Subordinated (2)

 

15.00% PIK*

 

6/30/2016

 

3,782

 

3,649

 

3,434

 

 

 

 

 

Subordinated (2)

 

15.00% PIK*

 

6/30/2016

 

718

 

659

 

652

 

 

 

 

 

 

 

 

 

 

 

21,868

 

21,496

 

20,782

 

3.40

%

LM U.S. Member LLC (and LM U.S. Corp Acquisition Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

9.50% (Base Rate + 8.25%)

 

10/26/2020

 

20,000

 

19,710

 

20,500

 

3.36

%

First American Payment Systems, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

10.75% (Base Rate + 9.50%)

 

4/12/2019

 

20,000

 

19,620

 

20,275

 

3.32

%

eResearchTechnology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

6.00% (Base Rate + 4.75%)

 

5/2/2018

 

19,900

 

19,090

 

20,149

 

3.30

%

Merrill Communications LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

7.25% (Base Rate + 6.25%)

 

3/8/2018

 

20,000

 

19,802

 

20,100

 

3.29

%

Six3 Systems, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

10/4/2019

 

19,950

 

19,761

 

20,075

 

3.29

%

Transplace Texas, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Logistics

 

Second lien (2)

 

11.00% (Base Rate + 9.00%)

 

4/12/2017

 

20,000

 

19,605

 

19,878

 

3.26

%

Insight Pharmaceuticals LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien (3)

 

13.25% (Base Rate + 11.75%)

 

8/25/2017

 

19,310

 

18,544

 

19,504

 

3.19

%

PODS, Inc.(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PODS Funding Corp. II

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

11/29/2016

 

13,854

 

13,538

 

13,923

 

 

 

Storapod Holding Company, Inc.

 

Subordinated (2)

 

21.00% PIK*

 

11/29/2017

 

5,296

 

5,160

 

5,296

 

 

 

 

 

 

 

 

 

 

 

19,150

 

18,698

 

19,219

 

3.15

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.50% (Base Rate + 6.00%)

 

4/21/2017

 

19,413

 

19,172

 

19,024

 

3.12

%

Smile Brands Group Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

7.00% (Base Rate + 5.25%)

 

12/21/2017

 

19,809

 

19,559

 

18,917

 

3.10

%

Ascensus, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (3)

 

8.00% (Base Rate + 6.75%)

 

12/21/2018

 

16,957

 

16,630

 

17,339

 

2.84

%

IG Investments Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

10.25% (Base Rate + 9.00%)

 

10/31/2020

 

15,000

 

14,855

 

15,000

 

2.46

%

OpenLink International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.75% (Base Rate + 6.25%)

 

10/30/2017

 

14,812

 

14,574

 

14,880

 

2.44

%

Landslide Holdings, Inc. (Crimson Acquisition Corp.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

6/19/2018

 

14,438

 

14,179

 

14,523

 

2.38

%

KPLT Holdings, Inc. (Centerplate, Inc., et al.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Subordinated (2)

 

11.75% (10.25% + 1.50% PIK)*

 

4/16/2019

 

14,692

 

14,414

 

14,398

 

2.36

%

Aspen Dental Management, Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

7.00% (Base Rate + 5.50%)

 

10/6/2016

 

14,832

 

14,536

 

14,313

 

2.34

%

Brock Holdings III, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Services

 

Second lien (2)

 

10.00% (Base Rate + 8.25%)

 

3/16/2018

 

14,000

 

13,833

 

14,192

 

2.32

%

Lonestar Intermediate Super Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated (2)

 

11.00% (Base Rate + 9.50%)

 

9/2/2019

 

12,000

 

11,674

 

12,930

 

2.12

%

Van Wagner Communications LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (2)

 

8.25% (Base Rate + 7.00%)

 

8/3/2018

 

11,940

 

11,721

 

12,104

 

1.98

%

Vision Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.50% (Base Rate + 8.00%)

 

7/23/2017

 

12,000

 

11,918

 

11,850

 

1.94

%

Confie Seguros Holdings II Co.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Second lien (3)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

9,000

 

8,851

 

9,236

 

 

 

 

 

Second lien (2)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

2,000

 

2,010

 

2,053

 

 

 

 

 

 

 

 

 

 

 

11,000

 

10,861

 

11,289

 

1.85

%

TransFirst Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

11.00% (Base Rate + 9.75%)

 

6/27/2018

 

10,000

 

9,710

 

10,300

 

1.69

%

 

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)

 

March 31, 2013

(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,

Par Value
or Shares

 

Cost

 

Fair Value

 

Percent of
Members’
Capital

 

Vertafore, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.75% (Base Rate + 8.25%)

 

10/29/2017

 

$

10,000

 

$

9,927

 

$

10,300

 

1.69

%

Mailsouth, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (3)

 

6.75% (Base Rate + 5.00%)

 

12/14/2016

 

9,821

 

9,722

 

9,723

 

1.59

%

Merge Healthcare Inc.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (2)(7)

 

11.75%

 

5/1/2015

 

9,000

 

8,924

 

9,613

 

1.57

%

Virtual Radiologic Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Information Technology

 

First lien (3)

 

7.75% (Base Rate + 4.50%)

 

12/22/2016

 

13,702

 

13,569

 

9,592

 

1.57

%

Consona Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

8/6/2018

 

8,458

 

8,380

 

8,500

 

1.39

%

Triple Point Technology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

6.25% (Base Rate + 5.00%)

 

10/27/2017

 

7,948

 

7,709

 

7,981

 

1.31

%

Physio-Control International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

First lien (2)

 

9.88%

 

1/15/2019

 

7,000

 

7,000

 

7,927

 

1.30

%

Surgery Center Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

6.88% (Base Rate + 4.49%)

 

2/6/2017

 

6,816

 

6,793

 

6,816

 

1.12

%

Research Pharmaceutical Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

6.75% (Base Rate + 5.25%)

 

2/18/2017

 

7,031

 

6,958

 

6,574

 

1.08

%

Alion Science and Technology Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)(7)

 

12.00% (10.00% + 2.00% PIK)*

 

11/1/2014

 

6,320

 

6,156

 

6,441

 

1.06

%

Immucor, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Subordinated (2)(7)

 

11.13%

 

8/15/2019

 

5,000

 

4,945

 

5,725

 

0.94

%

GCA Services Group, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (2)

 

9.25% (Base Rate + 8.00%)

 

11/1/2020

 

5,000

 

4,952

 

5,025

 

0.82

%

Education Management LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

8.25% (Base Rate + 7.00%)

 

3/30/2018

 

5,045

 

4,912

 

4,379

 

0.72

%

Brickman Group Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated (2)

 

9.13%

 

11/1/2018

 

3,650

 

3,351

 

3,988

 

0.65

%

Ozburn-Hessey Holding Company LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Logistics

 

Second lien (2)

 

11.50% (Base Rate + 9.50%)

 

10/10/2016

 

4,000

 

3,951

 

3,840

 

0.63

%

YP Holdings LLC(8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP Intermediate Holdings Corp. / YP Intermediate Holdings II LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

Second lien (2)

 

15.00% (12.00% + 3.00% PIK)*

 

5/8/2017

 

1,776

 

1,671

 

1,788

 

0.29

%

Mach Gen, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Generation

 

Second lien (2)

 

7.79% PIK (Base Rate + 7.50%)*

 

2/22/2015

 

1,708

 

1,734

 

1,152

 

0.19

%

ATI Acquisition Company (fka Ability Acquisition, Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

12.25% (Base Rate + 5.00% +

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.00% PIK)(5)*

 

12/30/2014

 

4,432

 

4,306

 

 

 

 

 

 

First lien (2)

 

17.25% (Base Rate + 10.00% +

 

6/30/2012-

 

 

 

 

 

 

 

 

 

 

 

 

 

4.00% PIK)(5)*

 

Past Due

 

1,665

 

1,517

 

499

 

 

 

 

 

First lien (2)

 

17.25% (Base Rate + 10.00% +

 

6/30/2012-

 

 

 

 

 

 

 

 

 

 

 

 

 

4.00% PIK)(5)*

 

Past Due

 

103

 

94

 

103

 

 

 

 

 

 

 

 

 

 

 

6,200

 

5,917

 

602

 

0.10

%

Total Funded Debt Investments—United States

 

 

 

 

 

 

 

$

973,154

 

$

953,849

 

$

968,219

 

158.60

%

Total Funded Debt Investments

 

 

 

 

 

 

 

$

1,024,743

 

$

1,004,214

 

$

1,020,851

 

167.22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity—Bermuda

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stratus Technologies Bermuda Holdings Ltd. (4)**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information Technology

 

Ordinary shares (2)

 

 

 

144,270

 

$

65

 

$

51

 

 

 

 

 

Preferred shares (2)

 

 

 

32,830

 

15

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

80

 

62

 

0.01

%

Total Shares—Bermuda

 

 

 

 

 

 

 

 

 

$80

 

$62

 

0.01

%

Equity—United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Knowledge Training LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Ordinary shares (2)

 

 

 

2

 

$

2

 

$

2

 

 

 

 

 

Preferred shares (2)

 

 

 

2,423

 

1,193

 

2,913

 

 

 

 

 

 

 

 

 

 

 

 

 

1,195

 

2,915

 

0.48

%

Total Shares—United States

 

 

 

 

 

 

 

 

 

$1,195

 

$2,915

 

0.48

%

Total Shares

 

 

 

 

 

 

 

 

 

$1,275

 

$2,977

 

0.49

%

 

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)

 

March 31, 2013

(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,

Par Value
or Shares

 

Cost

 

Fair Value

 

Percent of
Members’
Capital

 

Warrants—United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP Holdings LLC(8)

 

 

 

 

 

 <