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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 June 30, 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 August 7, 2013

 

New Mountain Finance Holdings, L.L.C.

 

Common membership units

 

44,720,486

 

New Mountain Finance Corporation

 

Common stock, $0.01 par value

 

38,148,548

 

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 JUNE 30, 2013

TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

PART I. FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

New Mountain Finance Holdings, L.L.C.

 

 

Consolidated Statements of Assets, Liabilities and Members’ Capital as of June 30, 2013 (unaudited) and December 31, 2012

3

 

Consolidated Statements of Operations for the three months and six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

4

 

Consolidated Statements of Changes in Members’ Capital for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

5

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

6

 

Consolidated Schedule of Investments as of June 30, 2013 (unaudited)

7

 

Consolidated Schedule of Investments as of December 31, 2012

12

 

New Mountain Finance Corporation

 

 

Statements of Assets and Liabilities as of June 30, 2013 (unaudited) and December 31, 2012

18

 

Statements of Operations for the three months and six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

19

 

Statements of Changes in Net Assets for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

20

 

Statements of Cash Flows for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

21

 

New Mountain Finance AIV Holdings Corporation

 

 

Statements of Assets and Liabilities as of June 30, 2013 (unaudited) and December 31, 2012

22

 

Statements of Operations for the three months and six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

23

 

Statements of Changes in Net Assets for the six months ended June 30, 2013 (unaudited) and June 30, 2012 (unaudited)

24

 

Statements of Cash Flows for the six months ended June 30, 2013 (unaudited) and June 30, 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

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

70

Item 4.

Controls and Procedures

71

 

 

 

PART II. OTHER INFORMATION

72

 

 

 

Item 1.

Legal Proceedings

72

Item 1A.

Risk Factors

72

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

72

Item 3.

Defaults Upon Senior Securities

72

Item 4.

Mine Safety Disclosures

72

Item 5.

Other Information

72

Item 6.

Exhibits

72

 

Signatures

77

 

2



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)

 

 

 

June 30, 2013

 

December 31, 2012 

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Investments at fair value (cost of $1,045,565 and $976,243, respectively)

 

$

1,059,001

 

$

989,820

 

Cash and cash equivalents

 

15,946

 

12,752

 

Interest and dividend receivable

 

11,202

 

6,340

 

Deferred credit facility costs (net of accumulated amortization of $2,751 and $2,016, respectively)

 

5,232

 

5,490

 

Receivable from affiliate

 

648

 

534

 

Receivable from unsettled securities sold

 

 

9,962

 

Other assets

 

2,394

 

666

 

Total assets

 

$

1,094,423

 

$

1,025,564

 

Liabilities

 

 

 

 

 

Holdings Credit Facility

 

209,436

 

206,938

 

SLF Credit Facility

 

207,100

 

214,262

 

Payable for unsettled securities purchased

 

19,600

 

9,700

 

Incentive fee payable

 

5,407

 

3,390

 

Capital gains incentive fee payable

 

5,388

 

4,407

 

Management fee payable

 

3,727

 

3,222

 

Interest payable

 

757

 

712

 

Payable to affiliate

 

46

 

 

Dividends payable

 

 

11,192

 

Other liabilities

 

2,667

 

1,802

 

Total liabilities

 

454,128

 

455,625

 

Members’ Capital

 

640,295

 

569,939

 

Total liabilities and members’ capital

 

$

1,094,423

 

$

1,025,564

 

Outstanding common membership units

 

44,720,486

 

40,548,189

 

Capital per unit

 

$

14.32

 

$

14.06

 

 

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 Operations

(in thousands)

(unaudited)

 

 

 

Three months ended

 

Six months ended

 

 

 

June 30, 2013

 

June 30, 2012 

 

June 30, 2013

 

June 30, 2012 

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

27,321

 

$

20,124

 

$

52,364

 

$

38,725

 

Dividend income

 

6,436

 

 

6,433

 

 

Other income

 

1,399

 

175

 

1,677

 

596

 

Total investment income

 

35,156

 

20,299

 

60,474

 

39,321

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive fee

 

5,407

 

2,718

 

8,865

 

5,169

 

Capital gains incentive fee

 

(1,701

)

53

 

981

 

964

 

Total incentive fee

 

3,706

 

2,771

 

9,846

 

6,133

 

Management fee

 

3,727

 

2,606

 

7,295

 

5,120

 

Interest and other credit facility expenses

 

3,118

 

2,401

 

6,189

 

4,884

 

Administrative expenses

 

939

 

504

 

1,698

 

1,060

 

Professional fees

 

563

 

426

 

1,135

 

874

 

Other general and administrative expenses

 

396

 

343

 

806

 

639

 

Total expenses

 

12,449

 

9,051

 

26,969

 

18,710

 

Less: expenses waived and reimbursed (See Note 5)

 

(836

)

(398

)

(1,665

)

(948

)

Net expenses

 

11,613

 

8,653

 

25,304

 

17,762

 

Net investment income

 

23,543

 

11,646

 

35,170

 

21,559

 

 

 

 

 

 

 

 

 

 

 

Net realized gains on investments

 

3,312

 

11,968

 

4,356

 

12,976

 

Net change in unrealized (depreciation) appreciation of investments

 

(12,031

)

(12,529

)

(141

)

216

 

Net increase in members’ capital resulting from operations

 

$

14,824

 

$

11,085

 

$

39,385

 

$

34,751

 

 

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 Changes in Members’ Capital

(in thousands)

(unaudited)

 

 

 

Six months ended

 

 

 

June 30, 2013

 

June 30, 2012

 

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

 

 

 

 

 

Net investment income

 

$

35,170

 

$

21,559

 

Net realized gains on investments

 

4,356

 

12,976

 

Net change in unrealized (depreciation) appreciation of investments

 

(141

)

216

 

Net increase in members’ capital resulting from operations

 

39,385

 

34,751

 

Net contributions

 

57,020

 

 

Dividends declared

 

(28,296

)

(27,518

)

Offering costs

 

(249

)

 

Reinvestment of dividends

 

2,496

 

 

Net increase in members’ capital

 

70,356

 

7,233

 

Members’ capital at beginning of period

 

569,939

 

420,502

 

Members’ capital at end of period

 

$

640,295

 

$

427,735

 

 

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

 

5



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Six months ended

 

 

 

June 30, 2013

 

June 30, 2012 

 

Cash flows from operating activities

 

 

 

 

 

Net increase in members’ capital resulting from operations

 

$

39,385

 

$

34,751

 

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

 

(4,356

)

(12,976

)

Net change in unrealized depreciation (appreciation) of investments

 

141

 

(216

)

Amortization of purchase discount

 

(1,923

)

(3,006

)

Amortization of deferred credit facility costs

 

735

 

511

 

Non-cash interest income

 

(2,177

)

(715

)

(Increase) decrease in operating assets:

 

 

 

 

 

Purchase of investments

 

(262,254

)

(233,117

)

Proceeds from sales and paydowns of investments

 

201,388

 

203,830

 

Cash paid for drawn revolvers

 

 

(7,665

)

Cash repayments on drawn revolvers

 

 

6,300

 

Interest and dividend receivable

 

(4,862

)

261

 

Receivable from unsettled securities sold

 

9,962

 

 

Receivable from affiliate

 

(114

)

250

 

Other assets

 

(715

)

(439

)

Increase (decrease) in operating liabilities:

 

 

 

 

 

Payable for unsettled securities purchased

 

9,900

 

11,595

 

Incentive fee payable

 

2,017

 

401

 

Capital gains incentive fee payable

 

981

 

964

 

Management fee payable

 

505

 

405

 

Interest payable

 

45

 

(1,176

)

Payable to affiliate

 

46

 

 

Other liabilities

 

166

 

(61

)

Net cash flows used in operating activities

 

(11,130

)

(103

)

Cash flows from financing activities

 

 

 

 

 

Net contributions

 

57,020

 

 

Dividends paid

 

(36,992

)

(20,643

)

Offering costs paid

 

(542

)

(101

)

Proceeds from Holdings Credit Facility

 

171,818

 

177,618

 

Repayment of Holdings Credit Facility

 

(169,320

)

(167,899

)

Proceeds from SLF Credit Facility

 

3,238

 

46,943

 

Repayment of SLF Credit Facility

 

(10,400

)

(39,759

)

Deferred credit facility costs paid

 

(498

)

(1,867

)

Net cash flows provided by (used in) financing activities

 

14,324

 

(5,708

)

Net increase (decrease) in cash and cash equivalents

 

3,194

 

(5,811

)

Cash and cash equivalents at the beginning of the period

 

12,752

 

15,319

 

Cash and cash equivalents at the end of the period

 

$

15,946

 

$

9,508

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Interest paid

 

$

5,256

 

$

5,324

 

Non-cash financing activities:

 

 

 

 

 

Dividends declared and payable

 

$

 

$

6,875

 

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

 

2,496

 

 

Accrual for offering costs

 

1,276

 

86

 

Accrual for deferred credit facility costs

 

25

 

61

 

 

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

 

June 30, 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

 

$

6,497

 

$

6,265

 

$

6,562

 

1.03

%

Total Funded Debt Investments - Bermuda

 

 

 

 

 

 

 

$

6,497

 

$

6,265

 

$

6,562

 

1.03

%

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

 

$

29,445

 

$

30,350

 

4.74

%

Total Funded Debt Investments - Cayman Islands

 

 

 

 

 

 

 

$

30,000

 

$

29,445

 

$

30,350

 

4.74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funded Debt Investments - United Kingdom

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Magic Newco, LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

12/12/2018

 

$

14,887

 

$

14,499

 

$

14,994

 

2.34

%

Total Funded Debt Investments — United Kingdom

 

 

 

 

 

 

 

$

14,887

 

$

14,499

 

$

14,994

 

2.34

%

Funded Debt Investments - United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McGraw-Hill Global Education Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

9.75%

 

4/1/2021

 

$

24,500

 

$

24,341

 

$

25,174

 

 

 

 

 

First lien (2)

 

9.00% (Base Rate + 7.75%)

 

3/22/2019

 

19,950

 

19,372

 

19,706

 

 

 

 

 

 

 

 

 

 

 

44,450

 

43,713

 

44,880

 

7.01

%

Edmentum, Inc.(fka Plato, Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

6.00% (Base Rate + 4.75%)

 

5/17/2018

 

6,533

 

6,366

 

6,565

 

 

 

 

 

Second lien (2)

 

11.25% (Base Rate + 9.75%)

 

5/17/2019

 

29,150

 

28,633

 

29,150

 

 

 

 

 

 

 

 

 

 

 

35,683

 

34,999

 

35,715

 

5.58

%

SRA International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

20,436

 

19,792

 

20,351

 

 

 

 

 

First lien (2)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

14,314

 

13,905

 

14,254

 

 

 

 

 

 

 

 

 

 

 

34,750

 

33,697

 

34,605

 

5.40

%

Pharmaceutical Research Associates, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Second lien (2)

 

10.50% (Base Rate + 9.25%)

 

6/10/2019

 

33,988

 

33,422

 

34,432

 

5.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UniTek Global Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

11.75% (Base Rate + 6.50% + 2.00% PIK)*

 

4/16/2018

 

25,532

 

24,761

 

23,618

 

 

 

 

 

First lien (2)

 

11.75% (Base Rate + 6.50% + 2.00% PIK)*

 

4/16/2018

 

6,181

 

6,023

 

5,717

 

 

 

 

 

First lien (2)

 

11.75% (Base Rate + 6.50% + 2.00% PIK)*

 

4/16/2018

 

5,138

 

4,970

 

4,752

 

 

 

 

 

 

 

 

 

 

 

36,851

 

35,754

 

34,087

 

5.32

%

YP Holdings LLC (8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (2)

 

8.05% (Base Rate + 6.70%)

 

6/4/2018

 

31,920

 

31,129

 

31,574

 

4.93

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.27% (Base Rate + 5.72%)

 

11/22/2017

 

7,400

 

7,277

 

7,434

 

 

 

 

 

Second lien (2)

 

11.00% (Base Rate + 9.50%)

 

11/22/2018

 

24,000

 

23,367

 

24,054

 

 

 

 

 

 

 

 

 

 

 

31,400

 

30,644

 

31,488

 

4.92

%

Rocket Software, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.25% (Base Rate + 8.75%)

 

2/8/2019

 

30,875

 

30,721

 

30,888

 

4.82

%

Global Knowledge Training LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

6.51% (Base Rate + 4.98%)

 

4/21/2017

 

4,685

 

4,633

 

4,685

 

 

 

 

 

First lien (3)

 

6.50% (Base Rate + 5.00%)

 

4/21/2017

 

1,174

 

1,161

 

1,174

 

 

 

 

 

Second lien (2)

 

11.50% (Base Rate + 9.75%)

 

10/21/2018

 

24,250

 

23,841

 

24,667

 

 

 

 

 

 

 

 

 

 

 

30,109

 

29,635

 

30,526

 

4.77

%

Deltek, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.00% (Base Rate + 8.75%)

 

10/10/2019

 

30,000

 

29,700

 

29,700

 

4.64

%

KeyPoint Government Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)

 

7.25% (Base Rate + 6.00%)

 

11/13/2017

 

29,250

 

28,640

 

29,250

 

4.57

%

Transtar Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Second lien (2)

 

9.75% (Base Rate + 8.50%)

 

10/9/2019

 

28,300

 

27,814

 

29,043

 

4.54

%

Kronos Incorporated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.75% (Base Rate + 8.50%)

 

4/30/2020

 

25,000

 

24,765

 

25,938

 

4.05

%

Meritas Schools Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

7.00% (Base Rate + 5.75%)

 

6/25/2019

 

17,000

 

16,830

 

16,830

 

 

 

 

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

6/25/2019

 

9,000

 

8,910

 

8,910

 

 

 

 

 

 

 

 

 

 

 

26,000

 

25,740

 

25,740

 

4.02

%

Permian Tank & Manufacturing, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien (2)

 

10.50%

 

1/15/2018

 

24,500

 

24,783

 

23,887

 

3.73

%

Aderant North America, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.00% (Base Rate + 8.75%)

 

6/20/2019

 

22,500

 

22,181

 

23,147

 

3.62

%

 

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)

 

June 30, 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 (3)

 

8.50% (Base Rate + 7.00%)

 

12/20/2017

 

$

13,154

 

$

12,905

 

$

13,236

 

 

 

 

 

First lien (2)

 

8.50% (Base Rate + 7.00%)

 

12/20/2017

 

9,646

 

9,469

 

9,707

 

 

 

 

 

 

 

 

 

 

 

22,800

 

22,374

 

22,943

 

3.58

%

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

 

19,717

 

20,263

 

3.16

%

First American Payment Systems, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

10.75% (Base Rate + 9.50%)

 

4/12/2019

 

20,000

 

19,631

 

20,188

 

3.15

%

Merrill Communications LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

7.25% (Base Rate + 6.25%)

 

3/8/2018

 

19,950

 

19,760

 

20,033

 

3.13

%

Six3 Systems, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

10/4/2019

 

19,900

 

19,717

 

20,024

 

3.13

%

eResearchTechnology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

6.00% (Base Rate + 4.75%)

 

5/2/2018

 

19,850

 

19,077

 

19,951

 

3.12

%

Distribution International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

First lien (2)

 

8.75% (Base Rate + 5.50%)

 

7/16/2019

 

20,000

 

19,600

 

19,600

 

3.06

%

Insight Pharmaceuticals LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien (3)

 

13.25% (Base Rate + 11.75%)

 

8/25/2017

 

19,310

 

18,569

 

19,503

 

3.05

%

Smile Brands Group Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

7.00% (Base Rate + 5.25%)

 

12/21/2017

 

19,758

 

19,520

 

19,289

 

3.01

%

PODS, Inc. (6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PODS Funding Corp. II

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

11/29/2016

 

13,175

 

12,892

 

13,208

 

 

 

Storapod Holding Company, Inc.

 

Subordinated (2)

 

21.00% PIK*

 

11/29/2017

 

5,460

 

5,329

 

5,460

 

 

 

 

 

 

 

 

 

 

 

18,635

 

18,221

 

18,668

 

2.92

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.50% (Base Rate + 6.00%)

 

4/21/2017

 

19,360

 

19,135

 

17,424

 

2.72

%

Ascensus, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (3)

 

8.00% (Base Rate + 6.75%)

 

12/21/2018

 

16,915

 

16,599

 

16,978

 

2.65

%

IG Investments Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

10.25% (Base Rate + 9.00%)

 

10/31/2020

 

15,000

 

14,858

 

15,113

 

2.36

%

OpenLink International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.75% (Base Rate + 6.25%)

 

10/30/2017

 

14,775

 

14,548

 

14,803

 

2.31

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Subordinated (2)

 

11.75% (10.25% + 1.50% PIK)*

 

4/16/2019

 

14,747

 

14,477

 

14,411

 

2.25

%

Aspen Dental Management, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

7.00% (Base Rate + 5.50%)

 

10/6/2016

 

14,795

 

14,517

 

14,351

 

2.24

%

Landslide Holdings, Inc. (Crimson Acquisition Corp.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

6/19/2018

 

14,250

 

14,005

 

14,292

 

2.23

%

Brock Holdings III, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Services

 

Second lien (2)

 

10.00% (Base Rate + 8.25%)

 

3/16/2018

 

14,000

 

13,842

 

14,245

 

2.22

%

Packaging Coordinators, Inc. (10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien (2)

 

9.50% (Base Rate + 8.25%)

 

11/10/2020

 

14,000

 

13,862

 

13,860

 

2.16

%

Lonestar Intermediate Super Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated (2)

 

11.00% (Base Rate + 9.50%)

 

9/2/2019

 

12,000

 

11,683

 

12,600

 

1.97

%

Van Wagner Communications, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (2)

 

8.25% (Base Rate + 7.00%)

 

8/3/2018

 

11,880

 

11,671

 

12,073

 

1.89

%

Vision Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.50% (Base Rate + 8.00%)

 

7/23/2017

 

12,000

 

11,922

 

11,850

 

1.85

%

Confie Seguros Holding II Co.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Second lien (3)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

8,907

 

8,764

 

8,906

 

 

 

 

 

Second lien (2)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

1,979

 

1,989

 

1,980

 

 

 

 

 

 

 

 

 

 

 

10,886

 

10,753

 

10,886

 

1.70

%

Vertafore, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.75% (Base Rate + 8.25%)

 

10/29/2017

 

10,000

 

9,930

 

10,206

 

1.59

%

TransFirst Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

11.00% (Base Rate + 9.75%)

 

6/27/2018

 

10,000

 

9,720

 

10,200

 

1.59

%

Mailsouth, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (3)

 

6.75% (Base Rate + 5.00%)

 

12/14/2016

 

9,792

 

9,699

 

9,743

 

1.52

%

Virtual Radiologic Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Information Technology

 

First lien (3)

 

7.75% (Base Rate + 4.50%)

 

12/22/2016

 

13,667

 

13,542

 

8,884

 

1.39

%

Consona Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

8/6/2018

 

8,436

 

8,362

 

8,447

 

1.32

%

Triple Point Technology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

6.25% (Base Rate + 5.00%)

 

10/27/2017

 

7,928

 

7,701

 

7,947

 

1.24

%

Physio-Control International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

First lien (2)

 

9.88%

 

1/15/2019

 

7,000

 

7,000

 

7,735

 

1.21

%

Research Pharmaceutical Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

6.76% (Base Rate + 5.24%)

 

2/18/2017

 

6,938

 

6,869

 

6,937

 

1.08

%

Alion Science and Technology Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)(7)

 

12.00% (10.00% + 2.00% PIK)*

 

11/1/2014

 

6,383

 

6,245

 

6,506

 

1.02

%

 

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)

 

June 30, 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

 

Immucor, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Subordinated (2)(7)

 

11.13%

 

8/15/2019

 

$

5,000

 

$

4,946

 

$

5,450

 

0.85

%

GCA Services Group, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (2)

 

9.25% (Base Rate + 8.00)%

 

11/1/2020

 

5,000

 

4,953

 

5,096

 

0.80

%

Learning Care Group (US), Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Subordinated (2)

 

15.00% PIK*

 

5/8/2020

 

4,066

 

3,939

 

4,066

 

 

 

 

 

Subordinated (2)

 

15.00% PIK*

 

5/8/2020

 

744

 

688

 

744

 

 

 

 

 

 

 

 

 

 

 

4,810

 

4,627

 

4,810

 

0.75

%

Education Management LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

8.25% (Base Rate + 7.00)%

 

3/30/2018

 

5,031

 

4,904

 

4,650

 

0.73

%

Brickman Group Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated (2)

 

9.13%

 

11/1/2018

 

3,650

 

3,361

 

3,923

 

0.61

%

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% + 4.00% PIK) (5)*

 

6/30/2012 - Past Due

 

1,665

 

1,517

 

316

 

 

 

 

 

First lien (2)

 

17.25% (Base Rate + 10.00% + 4.00% PIK) (5)*

 

6/30/2012 - Past Due

 

103

 

94

 

103

 

 

 

 

 

 

 

 

 

 

 

6,200

 

5,917

 

419

 

0.07

%

Total Funded Debt Investments - United States

 

 

 

 

 

 

 

$

990,222

 

$

973,171

 

$

979,201

 

152.93

%

Total Funded Debt Investments

 

 

 

 

 

 

 

$

1,041,606

 

$

1,023,380

 

$

1,031,107

 

161.04

%

Equity - Bermuda

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stratus Technologies Bermuda Holdings Ltd.(4)**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Information Technology

 

Ordinary shares (2)

 

 

 

156,247

 

$

65

 

$

25

 

 

 

 

 

Preferred shares (2)

 

 

 

35,558

 

15

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

80

 

31

 

0.01

%

Total Shares - Bermuda

 

 

 

 

 

 

 

 

 

$

80

 

$

31

 

0.01

%

Equity - United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Black Elk Energy Offshore Operations, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

Preferred shares (2)

 

17.00%

 

 

20,000,000

 

$

20,000

 

$

20,000

 

3.12

%

Global Knowledge Training LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Ordinary shares (2)

 

 

 

2

 

2

 

3

 

 

 

 

 

Preferred shares (2)

 

 

 

2,423

 

1,193

 

3,018

 

 

 

 

 

 

 

 

 

 

 

 

 

1,195

 

3,021

 

0.47

%

Packaging Coordinators, Inc. (10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Packaging Coordinators Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Ordinary shares (2)

 

 

 

19,427

 

1,000

 

1,000

 

0.16

%

Total Shares - United States

 

 

 

 

 

 

 

 

 

$

22,195

 

$

24,021

 

3.75

%

Total Shares

 

 

 

 

 

 

 

 

 

$

22,275

 

$