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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, 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
November 12, 2013

 

New Mountain Finance Holdings, L.L.C.

 

Common membership units

 

47,831,859

 

New Mountain Finance Corporation

 

Common stock, $0.01 par value

 

45,159,921

 

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, 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 September 30, 2013 (unaudited) and December 31, 2012

3

 

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

4

 

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

5

 

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

6

 

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

7

 

Consolidated Schedule of Investments as of December 31, 2012

13

 

New Mountain Finance Corporation

 

 

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

19

 

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

20

 

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

21

 

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

22

 

New Mountain Finance AIV Holdings Corporation

 

 

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

23

 

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

24

 

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

25

 

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

26

 

 

 

 

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

27

 

 

 

 

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

71

Item 4.

Controls and Procedures

72

 

 

 

PART II. OTHER INFORMATION

73

 

 

 

Item 1.

Legal Proceedings

73

Item 1A.

Risk Factors

73

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

73

Item 3.

Defaults Upon Senior Securities

73

Item 4.

Mine Safety Disclosures

73

Item 5.

Other Information

73

Item 6.

Exhibits

73

 

Signatures

78

 

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)

 

 

 

September 30, 2013

 

December 31, 2012

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Investments at fair value (cost of $1,025,337 and $976,243, respectively)

 

$

1,041,432

 

$

989,820

 

Cash and cash equivalents

 

17,629

 

12,752

 

Interest and dividend receivable

 

11,097

 

6,340

 

Deferred credit facility costs (net of accumulated amortization of $3,147 and $2,016, respectively)

 

4,838

 

5,490

 

Receivable from affiliate

 

317

 

534

 

Receivable from unsettled securities sold

 

 

9,962

 

Other assets

 

1,981

 

666

 

Total assets

 

$

1,077,294

 

$

1,025,564

 

Liabilities

 

 

 

 

 

SLF Credit Facility

 

215,000

 

214,262

 

Holdings Credit Facility

 

159,091

 

206,938

 

Payable for unsettled securities purchased

 

43,400

 

9,700

 

Capital gains incentive fee payable

 

6,974

 

4,407

 

Incentive fee payable

 

3,534

 

3,390

 

Management fee payable

 

3,754

 

3,222

 

Interest payable

 

755

 

712

 

Payable to affiliate

 

3

 

 

Dividends payable

 

 

11,192

 

Other liabilities

 

2,978

 

1,802

 

Total liabilities

 

435,489

 

455,625

 

Members’ Capital

 

641,805

 

569,939

 

Total liabilities and members’ capital

 

$

1,077,294

 

$

1,025,564

 

Outstanding common membership units

 

44,831,859

 

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

 

Nine months ended

 

 

 

September 30, 2013

 

September 30, 2012

 

September 30, 2013

 

September 30, 2012

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

27,175

 

$

21,362

 

$

79,539

 

$

60,087

 

Dividend income

 

(1,631

)

215

 

4,802

 

215

 

Other income

 

249

 

175

 

1,926

 

771

 

Total investment income

 

25,793

 

21,752

 

86,267

 

61,073

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive fee

 

3,533

 

2,978

 

12,398

 

8,147

 

Capital gains incentive fee

 

1,587

 

2,583

 

2,568

 

3,547

 

Total incentive fee

 

5,120

 

5,561

 

14,966

 

11,694

 

Management fee

 

3,754

 

2,768

 

11,049

 

7,887

 

Interest and other credit facility expenses

 

3,190

 

2,402

 

9,379

 

7,286

 

Administrative expenses

 

743

 

544

 

2,441

 

1,604

 

Professional fees

 

549

 

405

 

1,684

 

1,279

 

Other general and administrative expenses

 

378

 

375

 

1,184

 

1,015

 

Total expenses

 

13,734

 

12,055

 

40,703

 

30,765

 

Less: expenses waived and reimbursed (See Note 5)

 

(600

)

(439

)

(2,265

)

(1,387

)

Net expenses

 

13,134

 

11,616

 

38,438

 

29,378

 

Net investment income

 

12,659

 

10,136

 

47,829

 

31,695

 

 

 

 

 

 

 

 

 

 

 

Net realized gains on investments

 

5,160

 

1,615

 

9,516

 

14,591

 

Net change in unrealized appreciation (depreciation) of investments

 

2,659

 

10,494

 

2,518

 

10,710

 

Net increase in members’ capital resulting from operations

 

$

20,478

 

$

22,245

 

$

59,863

 

$

56,996

 

 

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)

 

 

 

Nine months ended

 

 

 

September 30, 2013

 

September 30, 2012

 

Increase in members’ capital resulting from operations:

 

 

 

 

 

Net investment income

 

$

47,829

 

$

31,695

 

Net realized gains on investments

 

9,516

 

14,591

 

Net change in unrealized appreciation (depreciation) of investments

 

2,518

 

10,710

 

Net increase in members’ capital resulting from operations

 

59,863

 

56,996

 

Net contributions

 

57,020

 

82,300

 

Dividends declared

 

(48,877

)

(40,046

)

Offering costs

 

(249

)

(377

)

Reinvestment of dividends

 

4,109

 

980

 

Net increase in members’ capital

 

71,866

 

99,853

 

Members’ capital at beginning of period

 

569,939

 

420,502

 

Members’ capital at end of period

 

$

641,805

 

$

520,355

 

 

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)

 

 

 

Nine months ended

 

 

 

September 30, 2013

 

September 30, 2012

 

Cash flows from operating activities

 

 

 

 

 

Net increase in members’ capital resulting from operations

 

$

59,863

 

$

56,996

 

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

 

(9,516

)

(14,591

)

Net change in unrealized (appreciation) depreciation of investments

 

(2,518

)

(10,710

)

Amortization of purchase discount

 

(2,671

)

(4,549

)

Amortization of deferred credit facility costs

 

1,131

 

825

 

Non-cash interest income

 

(2,697

)

(888

)

(Increase) decrease in operating assets:

 

 

 

 

 

Purchase of investments

 

(349,349

)

(392,162

)

Proceeds from sales and paydowns of investments

 

315,139

 

268,369

 

Cash paid for drawn revolvers

 

 

(10,710

)

Cash repayments on drawn revolvers

 

 

9,870

 

Interest and dividend receivable

 

(4,757

)

(1,272

)

Receivable from affiliate

 

217

 

198

 

Receivable from unsettled securities sold

 

9,962

 

 

Other assets

 

(302

)

(642

)

Increase (decrease) in operating liabilities:

 

 

 

 

 

Payable for unsettled securities purchased

 

33,700

 

12,195

 

Capital gains incentive fee payable

 

2,567

 

3,547

 

Incentive fee payable

 

144

 

661

 

Management fee payable

 

532

 

567

 

Interest payable

 

43

 

(1,166

)

Payable to affiliate

 

3

 

23

 

Other liabilities

 

590

 

(322

)

Net cash flows provided by (used in) operating activities

 

52,081

 

(83,761

)

Cash flows from financing activities

 

 

 

 

 

Net contributions

 

57,020

 

82,300

 

Dividends paid

 

(55,961

)

(39,066

)

Offering costs paid

 

(656

)

(259

)

Proceeds from Holdings Credit Facility

 

246,923

 

311,326

 

Repayment of Holdings Credit Facility

 

(294,770

)

(304,699

)

Proceeds from SLF Credit Facility

 

11,138

 

89,031

 

Repayment of SLF Credit Facility

 

(10,400

)

(54,959

)

Deferred credit facility costs paid

 

(498

)

(2,561

)

Net cash flows (used in) provided by financing activities

 

(47,204

)

81,113

 

Net increase (decrease) in cash and cash equivalents

 

4,877

 

(2,648

)

Cash and cash equivalents at the beginning of the period

 

12,752

 

15,319

 

Cash and cash equivalents at the end of the period

 

$

17,629

 

$

12,671

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Interest paid

 

$

7,938

 

$

7,185

 

Non-cash operating activities:

 

 

 

 

 

 

 

Non-cash activity on investments

 

$

1,986

 

$

 

Non-cash financing activities:

 

 

 

 

 

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

 

$

4,109

 

$

980

 

Accrual for offering costs

 

1,162

 

326

 

Accrual for deferred credit facility costs

 

25

 

59

 

 

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

 

September 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

 

$

6,305

 

$

6,513

 

1.01

%

Total Funded Debt Investments - Bermuda

 

 

 

 

 

 

 

$

6,497

 

$

6,305

 

$

6,513

 

1.01

%

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

 

$

29,458

 

$

30,394

 

4.74

%

Total Funded Debt Investments - Cayman Islands

 

 

 

 

 

 

 

$

30,000

 

$

29,458

 

$

30,394

 

4.74

%

Funded Debt Investments - United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McGraw-Hill Global Education Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (2)

 

9.75%

 

4/1/2021

 

$

24,500

 

$

24,345

 

$

26,093

 

 

 

 

 

First lien (3)

 

9.00% (Base Rate + 7.75%)

 

3/22/2019

 

19,900

 

19,342

 

20,174

 

 

 

 

 

 

 

 

 

 

 

44,400

 

43,687

 

46,267

 

7.21

%

UniTek Global Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

15.00% (Base Rate + 9.50% + 4.00% PIK)*

 

4/15/2018

 

26,176

 

25,265

 

25,543

 

 

 

 

 

First lien (2)

 

15.00% (Base Rate + 9.50% + 4.00% PIK)*

 

4/15/2018

 

6,337

 

6,117

 

6,184

 

 

 

 

 

First lien (2)

 

15.00% (Base Rate + 9.50% + 4.00% PIK)*

 

4/15/2018

 

5,268

 

5,084

 

5,140

 

 

 

 

 

 

 

 

 

 

 

37,781

 

36,466

 

36,867

 

5.74

%

Edmentum, Inc.(fka Plato, Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

6.00% (Base Rate + 4.75%)

 

5/17/2018

 

6,449

 

6,291

 

6,486

 

 

 

 

 

Second lien (2)

 

11.25% (Base Rate + 9.75%)

 

5/17/2019

 

29,150

 

28,649

 

29,405

 

 

 

 

 

 

 

 

 

 

 

35,599

 

34,940

 

35,891

 

5.59

%

SRA International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

34,750

 

33,739

 

34,533

 

5.38

%

Rocket Software, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.25% (Base Rate + 8.75%)

 

2/8/2019

 

30,875

 

30,726

 

30,921

 

4.82

%

Global Knowledge Training LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

6.51% (Base Rate + 4.99%)

 

4/21/2017

 

4,624

 

4,575

 

4,624

 

 

 

 

 

First lien (3)

 

6.51% (Base Rate + 4.99%)

 

4/21/2017

 

1,159

 

1,147

 

1,159

 

 

 

 

 

Second lien (2)

 

11.50% (Base Rate + 9.75%)

 

10/21/2018

 

24,250

 

23,855

 

24,643

 

 

 

 

 

 

 

 

 

 

 

30,033

 

29,577

 

30,426

 

4.74

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 5.75%)

 

11/22/2017

 

7,158

 

7,044

 

7,195

 

 

 

 

 

Second lien (2)

 

11.00% (Base Rate + 9.50%)

 

11/22/2018

 

23,353

 

22,758

 

23,090

 

 

 

 

 

 

 

 

 

 

 

30,511

 

29,802

 

30,285

 

4.72

%

Deltek, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.00% (Base Rate + 8.75%)

 

10/10/2019

 

30,000

 

29,709

 

30,275

 

4.72

%

JHCI Acquisition, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

7/11/2019

 

19,950

 

19,658

 

20,000

 

 

 

 

 

Second lien (2)

 

11.00% (Base Rate + 9.75%)

 

7/11/2020

 

10,000

 

9,707

 

9,700

 

 

 

 

 

 

 

 

 

 

 

29,950

 

29,365

 

29,700

 

4.63

%

Transtar Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Second lien (2)

 

9.75% (Base Rate + 8.50%)

 

10/9/2019

 

28,300

 

27,828

 

28,866

 

4.50

%

KeyPoint Government Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

11/13/2017

 

17,392

 

17,023

 

17,218

 

 

 

 

 

First lien (2)

 

7.25% ( Base Rate + 6.00%)

 

11/13/2017

 

10,483

 

10,303

 

10,378

 

 

 

 

 

 

 

 

 

 

 

27,875

 

27,326

 

27,596

 

4.30

%

YP Holdings LLC (8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (2)

 

8.06% (Base Rate + 6.69%)

 

6/4/2018

 

27,120

 

26,476

 

26,984

 

4.20

%

Meritas Schools Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

6/25/2019

 

18,953

 

18,769

 

18,988

 

 

 

 

 

First lien (2)

 

7.00% ( Base Rate + 5.75%)

 

6/25/2019

 

6,983

 

6,915

 

6,996

 

 

 

 

 

 

 

 

 

 

 

25,936

 

25,684

 

25,984

 

4.05

%

Kronos Incorporated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.75% (Base Rate + 8.50%)

 

4/30/2020

 

25,000

 

24,771

 

25,953

 

4.04

%

Permian Tank & Manufacturing, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien (2)

 

10.50%

 

1/15/2018

 

24,500

 

24,770

 

24,010

 

3.74

%

 

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, 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

 

Aderant North America, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

10.00% (Base Rate + 8.75%)

 

6/20/2019

 

$

22,500

 

$

22,191

 

$

23,119

 

3.60

%

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

 

19,724

 

20,333

 

3.17

%

Merrill Communications LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (3)

 

7.31% (Base Rate + 6.20%)

 

3/8/2018

 

19,900

 

19,708

 

20,033

 

3.12

%

First American Payment Systems, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

10.75% (Base Rate + 9.50%)

 

4/12/2019

 

20,000

 

19,642

 

19,988

 

3.11

%

Six3 Systems, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.00% (Base Rate + 5.75%)

 

10/4/2019

 

19,850

 

19,674

 

19,974

 

3.11

%

eResearchTechnology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

6.00% (Base Rate + 4.75%)

 

5/2/2018

 

19,800

 

19,061

 

19,899

 

3.10

%

Distribution International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

First lien (2)

 

7.50% (Base Rate + 6.50%)

 

7/16/2019

 

19,950

 

19,562

 

19,862

 

3.09

%

ARSloane Acquisition, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (2)

 

7.50% (Base Rate + 6.25%)

 

10/1/2019

 

20,000

 

19,800

 

19,800

 

3.09

%

Envision Acquisition Company, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Second lien (2)

 

9.75% (Base Rate + 8.75%)

 

11/4/2021

 

20,000

 

19,600

 

19,600

 

3.05

%

Insight Pharmaceuticals LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien (3)

 

13.25% (Base Rate + 11.75%)

 

8/25/2017

 

19,310

 

18,738

 

19,214

 

2.99

%

St. George’s University Scholastic Services LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

8.50% (Base Rate + 7.00%)

 

12/20/2017

 

11,947

 

11,733

 

12,052

 

 

 

 

 

First lien (2)

 

8.50% (Base Rate + 7.00%)

 

12/20/2017

 

6,391

 

6,280

 

6,447

 

 

 

 

 

 

 

 

 

 

 

18,338

 

18,013

 

18,499

 

2.88

%

PODS, Inc. (6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PODS Funding Corp. II

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

11/29/2016

 

12,575

 

12,323

 

12,606

 

 

 

Storapod Holding Company, Inc.

 

Subordinated (2)

 

21.00% PIK*

 

11/29/2017

 

5,460

 

5,334

 

5,460

 

 

 

 

 

 

 

 

 

 

 

18,035

 

17,657

 

18,066

 

2.82

%

Ascensus, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien (3)

 

8.00% (Base Rate + 6.75%)

 

12/21/2018

 

16,873

 

16,568

 

17,125

 

2.67

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (3)

 

7.50% (Base Rate + 6.00%)

 

4/21/2017

 

18,527

 

18,323

 

16,674

 

2.60

%

IG Investments Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

10.25% (Base Rate + 9.00%)

 

10/31/2020

 

15,000

 

14,861

 

15,075

 

2.35

%

Confie Seguros Holding II Co.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Second lien (3)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

8,906

 

8,769

 

8,970

 

 

 

 

 

Second lien (2)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

5,979

 

5,988

 

6,021

 

 

 

 

 

 

 

 

 

 

 

14,885

 

14,757

 

14,991

 

2.34

%

OpenLink International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.75% (Base Rate + 6.25%)

 

10/30/2017

 

14,738

 

14,522

 

14,793

 

2.31

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Subordinated (2)

 

11.75% (10.25% + 1.50% PIK)*

 

4/16/2019

 

14,802

 

14,539

 

14,576

 

2.27

%

Smile Brands Group Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (2)

 

7.50% (Base Rate + 6.25%)

 

8/16/2019

 

14,500

 

14,297

 

14,337

 

2.23

%

Aspen Dental Management, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien (3)

 

7.00% (Base Rate + 5.50%)

 

10/6/2016

 

14,757

 

14,500

 

14,241

 

2.22

%

Brock Holdings III, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Services

 

Second lien (2)

 

10.00% (Base Rate + 8.25%)

 

3/16/2018

 

14,000

 

13,850

 

14,222

 

2.22

%

Packaging Coordinators, Inc. (10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien (2)

 

9.50% (Base Rate + 8.25%)

 

11/10/2020

 

14,000

 

13,865

 

14,000

 

2.18

%

Lonestar Intermediate Super Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated (2)

 

11.00% (Base Rate + 9.50%)

 

9/2/2019

 

12,000

 

11,692

 

12,570

 

1.96

%

Van Wagner Communications, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (2)

 

6.25% (Base Rate + 5.00%)

 

8/3/2018

 

11,821

 

11,633

 

12,087

 

1.88

%

Vision Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.50% (Base Rate + 8.00%)

 

7/23/2017

 

12,000

 

11,927

 

11,850

 

1.85

%

Vertafore, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien (2)

 

9.75% (Base Rate + 8.25%)

 

10/29/2017

 

10,000

 

9,933

 

10,215

 

1.59

%

TransFirst Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (3)

 

11.00% (Base Rate + 9.75%)

 

6/27/2018

 

10,000

 

9,731

 

10,163

 

1.58

%

 

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, 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

 

Mailsouth, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien (3)

 

6.75% (Base Rate + 5.00%)

 

12/14/2016

 

$

9,792

 

$

9,705

 

$

9,450

 

1.47

%

Virtual Radiologic Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Information Technology

 

First lien (3)

 

7.25% (Base Rate + 5.50%)

 

12/22/2016

 

13,598

 

13,481

 

8,838

 

1.38

%

Consona Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien (3)

 

7.25% (Base Rate + 6.00%)

 

8/6/2018

 

8,415

 

8,345

 

8,436

 

1.32

%

Physio-Control International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

First lien (2)

 

9.88%

 

1/15/2019

 

6,651

 

6,651

 

7,482

 

1.17

%

Alion Science and Technology Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien (2)(7)

 

12.00% (10.00% + 2.00% PIK)*

 

11/1/2014

 

6,383

 

6,271

 

6,426

 

1.00

%

Immucor, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Subordinated (2)(7)

 

11.13%

 

8/15/2019

 

5,000

 

4,948

 

5,525

 

0.86

%

GCA Services Group, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien (2)

 

9.25% (Base Rate + 8.00%)

 

11/1/2020

 

5,000

 

4,954

 

5,096

 

0.79

%

Education Management LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien (3)

 

8.25% (Base Rate + 7.00%)

 

3/30/2018

 

5,017

 

4,896

 

4,930

 

0.77

%

Learning Care Group (US), Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Subordinated (2)

 

15.00% PIK*

 

5/8/2020

 

4,066

 

3,944

 

4,066

 

 

 

 

 

Subordinated (2)

 

15.00% PIK*

 

5/8/2020

 

744

 

689

 

744

 

 

 

 

 

 

 

 

 

 

 

4,810

 

4,633

 

4,810

 

0.75

%

Brickman Group Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated (2)

 

9.13%

 

11/1/2018

 

3,650

 

3,371

 

3,924

 

0.61

%

ATI Acquisition Company (fka Ability Acquisition, Inc.) (11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

1,434

 

233

 

 

 

 

 

First lien (2)

 

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

 

6/30/2012 - Past Due

 

103

 

94

 

103

 

 

 

 

 

 

 

 

 

 

 

6,200

 

5,834

 

336

 

0.05

%

Total Funded Debt Investments - United States

 

 

 

 

 

 

 

$

982,732

 

$

966,323

 

$

975,117

 

151.93

%

Total Funded Debt Investments

 

 

 

 

 

 

 

$

1,019,229

 

$

1,002,086

 

$

1,012,024

 

157.68

%

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

 

3.11

%

Global Knowledge Training LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Ordinary shares (2)

 

 

 

2

 

2

 

3

 

 

 

 

 

Preferred shares (2)

 

 

 

2,423

 

1,193

 

3,039

 

 

 

 

 

 

 

 

 

 

 

 

 

1,195

 

3,042

 

0.48

%

Packaging Coordinators, Inc. (10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Packaging Coordinators Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Ordinary shares (2)

 

 

 

19,427

 

1,000

 

1,000

 

0.16

%

Ancora Acquisition LLC (11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Preferred shares (2)

 

 

 

372

 

83

 

83

 

0.01

%

Total Shares - United States

 

 

 

 

 

 

 

 

 

$

22,278

 

$

24,125

 

3.76

%

Total Shares

 

 

 

 

 

 

 

 

 

$

22,358

 

$

24,156

 

3.77

%

 

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

 

9



Table of Contents

 

New Mountain Finance Holdings, L.L.C.

 

Consolidated Schedule of Investments (Continued)

 

September 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

 

Warrants - United States