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Section 1: 10-Q (10-Q)

10-Q

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
ý      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended March 31, 2016
o         Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Commission
File Number
 
Exact name of registrant as specified in its charter, address of principal executive
offices, telephone numbers and states or other jurisdictions of incorporation or organization
 
I.R.S. Employer
Identification Number
814-00832
 
New Mountain Finance Corporation
 
27-2978010
 
 
787 Seventh Avenue, 48th Floor
New York, New York 10019
Telephone: (212) 720-0300
State of Incorporation: Delaware
 
 
 
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. Yes ý 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). 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):
 
Large accelerated filer ý
 
Accelerated filer o
 
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). Yes o No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock.
Description
 
Shares as of May 4, 2016
Common stock, par value $0.01 per share
 
63,880,437
 


Table of Contents

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2016
TABLE OF CONTENTS
 
PAGE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2

Table of Contents

PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
New Mountain Finance Corporation
 
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)
(unaudited)
 
March 31, 2016
 
December 31, 2015
Assets
 

 
 

Investments at fair value
 

 
 

Non-controlled/non-affiliated investments (cost of $1,427,717 and $1,438,415, respectively)
$
1,352,403

 
$
1,377,515

Non-controlled/affiliated investments (cost of $91,282 and $89,047, respectively)
88,371

 
87,287

Controlled investments (cost of $42,082 and $41,254, respectively)
49,429

 
47,422

Total investments at fair value (cost of $1,561,081 and $1,568,716, respectively)
1,490,203

 
1,512,224

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)
29,674

 
29,704

Cash and cash equivalents
32,683

 
30,102

Interest and dividend receivable
16,034

 
13,832

Receivable from affiliates
707

 
360

Other assets
2,965

 
1,924

Total assets
$
1,572,266

 
$
1,588,146

Liabilities
 

 
 

Borrowings
 
 
 
     Holdings Credit Facility
$
397,513

 
$
419,313

     SBA-guaranteed debentures
117,745

 
117,745

     Convertible Notes
115,000

 
115,000

     NMFC Credit Facility
96,500

 
90,000

     Deferred financing costs (net of accumulated amortization of $9,596 and $8,822, respectively)
(13,264
)
 
(13,992
)
Net borrowings
713,494

 
728,066

Incentive fee payable
11,007

 
5,622

Management fee payable
10,983

 
5,466

Payable for unsettled securities purchased
7,549

 
5,441

Interest payable
2,946

 
2,343

Payable to affiliates
959

 
564

Deferred tax liability
952

 
1,676

Other liabilities
2,531

 
2,060

Total liabilities
750,421

 
751,238

Commitments and contingencies (See Note 9)
 

 
 

Net assets
 

 
 

Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued

 

Common stock, par value $0.01 per share, 100,000,000 shares authorized, 64,005,387 and 64,005,387 shares issued, respectively, and 63,880,437 and 64,005,387 shares outstanding, respectively
640

 
640

Paid in capital in excess of par
899,751

 
899,713

Treasury stock at cost, 124,950 and 0 shares held, respectively
(1,433
)
 

Accumulated undistributed net investment income
4,012

 
4,164

Accumulated undistributed net realized gains on investments
1,518

 
1,342

Net unrealized (depreciation) appreciation (net of provision for taxes of $952 and $1,676, respectively)
(82,643
)
 
(68,951
)
Total net assets
$
821,845

 
$
836,908

Total liabilities and net assets
$
1,572,266

 
$
1,588,146

Number of shares outstanding
63,880,437

 
64,005,387

Net asset value per share
$
12.87

 
$
13.08


The accompanying notes are an integral part of these consolidated financial statements.
3

Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Operations
(in thousands, except shares and per share data)
(unaudited)
 
 
Three Months Ended
 
 
March 31, 2016
 
March 31, 2015
Investment income
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
Interest income
 
$
35,706

 
$
31,854

Dividend income
 

 
(99
)
Other income
 
1,222

 
1,557

From non-controlled/affiliated investments:
 
 
 
 
Interest income
 
1,582

 
1,043

Dividend income
 
920

 
858

Other income
 
313

 
314

From controlled investments:
 
 
 
 
Interest income
 
502

 
450

Dividend income
 
719

 
548

Other income
 
12

 
11

Total investment income
 
40,976

 
36,536

Expenses
 
 
 
 
Incentive fee
 
5,385

 
4,878

Capital gains incentive fee
 

 
481

Total incentive fees
 
5,385

 
5,359

Management fee
 
6,836

 
6,468

Interest and other financing expenses
 
6,602

 
5,477

Professional fees
 
877

 
739

Administrative expenses
 
839

 
635

Other general and administrative expenses
 
432

 
429

Total expenses
 
20,971

 
19,107

Less: management fee waived (See Note 5)
 
(1,319
)
 
(1,382
)
Less: expenses waived and reimbursed (See Note 5)
 
(284
)
 
(400
)
Net expenses
 
19,368

 
17,325

Net investment income before income taxes
 
21,608

 
19,211

Income tax expense
 
41

 
149

Net investment income
 
21,567

 
19,062

Net realized gains (losses):
 
 
 
 
Non-controlled/non-affiliated investments
 
176

 
(133
)
Net change in unrealized (depreciation) appreciation:
 
 
 
 
Non-controlled/non-affiliated investments
 
(14,414
)
 
(1,462
)
Non-controlled/affiliated investments
 
(1,151
)
 
(872
)
Controlled investments
 
1,179

 
6,820

Securities purchased under collateralized agreements to resell
 
(30
)
 

Benefit (provision) for taxes
 
724

 
(501
)
Net realized and unrealized (losses) gains
 
(13,516
)
 
3,852

Net increase in net assets resulting from operations
 
$
8,051

 
$
22,914

Basic earnings per share
 
$
0.13

 
$
0.40

Weighted average shares of common stock outstanding - basic (See Note 11)
 
63,934,151

 
57,998,754

Diluted earnings per share
 
$
0.13

 
$
0.37

Weighted average shares of common stock outstanding - diluted (See Note 11)
 
71,211,282

 
65,217,837

Dividends declared and paid per share
 
$
0.34

 
$
0.34


The accompanying notes are an integral part of these consolidated financial statements.
4

Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Changes in Net Assets
(in thousands, except shares and per share data)
(unaudited)
 
Three Months Ended
 
March 31, 2016
 
March 31, 2015
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income
$
21,567

 
$
19,062

Net realized gains (losses) on investments
176

 
(133
)
Net change in unrealized (depreciation) appreciation of investments
(14,386
)
 
4,486

Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell
(30
)
 

Benefit (provision) for taxes
724

 
(501
)
Net increase in net assets resulting from operations
8,051

 
22,914

Capital transactions
 
 
 
Deferred offering costs
38

 

Dividends declared to stockholders from net investment income
(21,719
)
 
(19,719
)
Reinvestment of dividends

 
1,134

Repurchase of shares under repurchase program
(1,433
)
 

Total net decrease in net assets resulting from capital transactions
(23,114
)
 
(18,585
)
Net (decrease) increase in net assets
(15,063
)
 
4,329

Net assets at the beginning of the period
836,908

 
802,170

Net assets at the end of the period
$
821,845

 
$
806,499

 
 
 
 
Capital share activity
 
 
 
Shares issued from reinvestment of dividends

 
77,715

Shares repurchased under repurchase program
(124,950
)
 

Net (decrease) increase in shares outstanding
(124,950
)
 
77,715




The accompanying notes are an integral part of these consolidated financial statements.
5

Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Three Months Ended
 
March 31, 2016
 
March 31, 2015
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
8,051

 
$
22,914

Adjustments to reconcile net (increase) decrease in net assets resulting from operations to net cash (used in) provided by operating activities:
 
 
 
Net realized (gains) losses on investments
(176
)
 
133

Net change in unrealized depreciation (appreciation) of investments
14,386

 
(4,486
)
Net change in unrealized depreciation (appreciation) of securities purchased under collateralized agreements to resell
30

 

Amortization of purchase discount
(769
)
 
(596
)
Amortization of deferred financing costs
774

 
672

Non-cash investment income
(1,664
)
 
(1,178
)
(Increase) decrease in operating assets:
 
 
 
Purchase of investments and delayed draw facilities
(27,591
)
 
(67,236
)
Proceeds from sales and paydowns of investments
40,188

 
93,280

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities
10

 

Cash paid on drawn revolvers
(3,806
)
 
(190
)
Cash repayments on drawn revolvers
1,443

 
190

Interest and dividend receivable
(2,202
)
 
(2,745
)
Receivable from affiliates
(347
)
 
(141
)
Receivable from unsettled securities sold

 
8,912

Other assets
(770
)
 
(560
)
Increase (decrease) in operating liabilities:
 
 
 
Incentive fee payable
5,385

 
75

Management fee payable
5,517

 
(58
)
Payable for unsettled securities purchased
2,108

 
(26,460
)
Interest payable
603

 
1,355

Payable to affiliates
395

 
(581
)
Deferred tax liability
(724
)
 
501

Capital gains incentive fee payable

 
481

Other liabilities
283

 
(11
)
Net cash flows provided by operating activities
41,124

 
24,271

Cash flows from financing activities
 
 
 
Dividends paid
(21,719
)
 
(18,585
)
Offering costs paid
(53
)
 
(20
)
Proceeds from Holdings Credit Facility
17,500

 
49,100

Repayment of Holdings Credit Facility
(39,300
)
 
(74,600
)
Proceeds from NMFC Credit Facility
10,500

 
51,300

Repayment of NMFC Credit Facility
(4,000
)
 
(32,500
)
Deferred financing costs paid
(38
)
 
(259
)
Repurchase of shares under repurchase program
(1,433
)
 

Net cash flows used in financing activities
(38,543
)
 
(25,564
)
Net increase (decrease) in cash and cash equivalents
2,581

 
(1,293
)
Cash and cash equivalents at the beginning of the period
30,102

 
23,445

Cash and cash equivalents at the end of the period
$
32,683

 
$
22,152

Supplemental disclosure of cash flow information
 
 
 
Cash interest paid
$
5,031

 
$
3,308

Income taxes paid
2

 
3

Non-cash operating activities:
 
 
 
Non-cash activity on investments
$

 
$
41,275

Non-cash financing activities:
 
 
 
Value of shares issued in connection with dividend reinvestment plan
$

 
$
1,134

Accrual for offering costs
817

 
496

Accrual for deferred financing costs
90

 
126



The accompanying notes are an integral part of these consolidated financial statements.
6

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments
March 31, 2016
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(10)
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - Australia
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Project Sunshine IV Pty Ltd**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Media
 
First lien (2)
 
 8.00% (L + 7.00%/M)
 
9/23/2019
 
$
8,944

 
$
8,907

 
$
8,475

 
1.03
 %
Total Funded Debt Investments - Australia
 
 
 
 
 
 
 
$
8,944

 
$
8,907

 
$
8,475

 
1.03
 %
Funded Debt Investments - Luxembourg
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Pinnacle Holdco S.à.r.l. / Pinnacle (US) Acquisition Co Limited**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 10.50% (L + 9.25%/Q)
 
7/30/2020
 
$
24,630

 
$
24,345

 
$
17,855

 
 
 
 
Second lien (3)
 
 10.50% (L + 9.25%/Q)
 
7/30/2020
 
8,204

 
8,326

 
5,949

 
 
 
 
 
 
 
 
 
 
32,834

 
32,671

 
23,804

 
2.90
 %
Total Funded Debt Investments - Luxembourg
 
 
 
 
 
 
 
$
32,834

 
$
32,671

 
$
23,804

 
2.90
 %
Funded Debt Investments - Netherlands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Eiger Acquisition B.V. (Eiger Co-Borrower, LLC)**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
 10.13% (L + 9.13%/Q)
 
2/17/2023
 
$
10,000

 
$
9,318

 
$
9,050

 
1.10
 %
Total Funded Debt Investments - Netherlands
 
 
 
 
 
 
 
$
10,000

 
$
9,318

 
$
9,050

 
1.10
 %
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
 10.50% (L + 9.50%/Q)
 
1/31/2023
 
$
32,500

 
$
31,755

 
$
30,063

 
3.66
 %
Total Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
$
32,500

 
$
31,755

 
$
30,063

 
3.66
 %
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   TIBCO Software Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
 6.50% (L + 5.50%/M)
 
12/4/2020
 
$
29,700

 
$
28,491

 
$
27,138

 
 
 
 
Subordinated (3)
 
 11.38%/S
 
12/1/2021
 
15,000

 
14,623

 
13,200

 
 
 
 
 
 
 
 
 
 
44,700

 
43,114

 
40,338

 
4.91
 %
   Deltek, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
 9.50% (L + 8.50%/Q)
 
6/26/2023
 
21,000

 
20,977

 
20,370

 
 
 
 
Second lien (2)
 
 9.50% (L + 8.50%/Q)
 
6/26/2023
 
20,000

 
19,624

 
19,400

 
 
 
 
 
 
 
 
 
 
41,000

 
40,601

 
39,770

 
4.84
 %
   AssuredPartners, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 10.00% (L + 9.00%/M)
 
10/20/2023
 
20,000

 
19,229

 
19,200

 
 
 
 
Second lien (3)
 
 10.00% (L + 9.00%/M)
 
10/20/2023
 
20,000

 
19,229

 
19,200

 
 
 
 
 
 
 
 
 
 
40,000

 
38,458

 
38,400

 
4.67
 %
   Kronos Incorporated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 9.75% (L + 8.50%/Q)
 
4/30/2020
 
32,632

 
32,444

 
32,560

 
 
 
 
Second lien (3)
 
 9.75% (L + 8.50%/Q)
 
4/30/2020
 
4,998

 
4,961

 
4,988

 
 
 
 
 
 
 
 
 
 
37,630

 
37,405

 
37,548

 
4.57
 %
   Hill International, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 7.75% (L + 6.75%/Q)
 
9/28/2020
 
36,962

 
36,673

 
36,685

 
4.46
 %
   Engility Corporation (fka TASC, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
 7.00% (L + 6.00%/Q)
 
5/22/2020
 
28,236

 
27,940

 
28,118

 
 
 
 
Second lien (3)
 
 12.00%/Q
 
5/21/2021
 
5,000

 
4,775

 
4,775

 
 
 
 
Second lien (3)
 
 12.00%/Q
 
5/21/2021
 
2,000

 
1,965

 
1,910

 
 
 
 
 
 
 
 
 
 
35,236

 
34,680

 
34,803

 
4.24
 %

The accompanying notes are an integral part of these consolidated financial statements.
7

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
March 31, 2016
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(10)
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
   Physio-Control International, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Products
 
Second lien (2)
 
 10.00% (L + 9.00%/Q)
 
6/5/2023
 
$
30,000

 
$
29,444

 
$
30,000

 
 
 
 
Second lien (3)
 
 10.00% (L + 9.00%/Q)
 
6/5/2023
 
4,000

 
3,706

 
4,000

 
 
 
 
 
 
 
 
 
 
34,000

 
33,150

 
34,000

 
4.14
 %
   ProQuest LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
 10.00% (L + 9.00%/M)
 
12/15/2022
 
35,000

 
34,320

 
33,950

 
4.13
 %
   Ascend Learning, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Second lien (3)
 
 9.50% (L + 8.50%/Q)
 
11/30/2020
 
34,727

 
34,362

 
32,644

 
3.97
 %
   Navex Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
 5.75% (L + 4.75%/Q)
 
11/19/2021
 
4,598

 
4,559

 
4,460

 
 
 
 
First lien (2)
 
 5.75% (L + 4.75%/Q)
 
11/19/2021
 
2,603

 
2,582

 
2,525

 
 
 
 
Second lien (4)
 
 9.75% (L + 8.75%/Q)
 
11/18/2022
 
17,879

 
17,688

 
16,359

 
 
 
 
Second lien (3)
 
 9.75% (L + 8.75%/Q)
 
11/18/2022
 
10,121

 
10,004

 
9,261

 
 
 
 
 
 
 
 
 
 
35,201

 
34,833

 
32,605

 
3.97
 %
   CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
 7.50% (L + 6.50%/Q)
 
12/19/2020
 
32,835

 
32,616

 
32,547

 
3.96
 %
   Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 8.00% (L + 7.00%/Q)
 
9/24/2021
 
29,850

 
29,503

 
29,477

 
 
 
 
First lien (3)(11) - Drawn
 
 8.00% (L + 7.00%/Q)
 
9/24/2021
 
1,500

 
1,481

 
1,481

 
 
 
 
 
 
 
 
 
 
31,350

 
30,984

 
30,958

 
3.77
 %
   Rocket Software, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 10.25% (L + 8.75%/Q)
 
2/8/2019
 
30,875

 
30,787

 
30,746

 
3.74
 %
   PetVet Care Centers LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (3)
 
 10.25% (L + 9.25%/Q)
 
6/17/2021
 
24,000

 
23,797

 
23,679

 
 
 
 
Second lien (3)
 
 10.50% (L + 9.50%/Q)
 
6/17/2021
 
6,500

 
6,436

 
6,477

 
 
 
 
 
 
 
 
 
 
30,500

 
30,233

 
30,156

 
3.67
 %
   Pittsburgh Glass Works, LLC (24)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Manufacturing
 
First lien (2)
 
 10.11% (L + 9.11%/M)
 
11/25/2021
 
30,000

 
29,857

 
30,000

 
3.65
 %
   Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 6.75% (L + 5.75%/Q)
 
10/31/2022
 
18,694

 
18,337

 
18,040

 
 
 
 
First lien (2)
 
 6.75% (L + 5.75%/Q)
 
10/31/2022
 
1,259

 
1,235

 
1,215

 
 
 
 
Second lien (3)
 
 10.25% (L + 9.25%/Q)
 
10/30/2023
 
10,000

 
9,903

 
9,550

 
 
 
 
 
 
 
 
 
 
29,953

 
29,475

 
28,805

 
3.50
 %
   CompassLearning, Inc. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
 8.00% (L + 6.75%/Q)
 
11/26/2018
 
30,000

 
29,567

 
27,721

 
3.37
 %
   McGraw-Hill Global Education Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)(9)
 
 9.75%/S
 
4/1/2021
 
24,500

 
24,382

 
26,705

 
3.25
 %
   Ryan, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 6.75% (L + 5.75%/M)
 
8/7/2020
 
26,950

 
26,590

 
26,243

 
3.19
 %
   KeyPoint Government Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
 7.75% (L + 6.50%/Q)
 
11/13/2017
 
25,010

 
24,807

 
24,885

 
3.03
 %
   AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
 8.25% (L + 7.25%/M)
 
9/30/2020
 
24,811

 
24,470

 
24,438

 
2.97
 %
   DigiCert Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
 6.00% (L + 5.00%/Q)
 
10/21/2021
 
24,937

 
24,234

 
24,314

 
2.96
 %

The accompanying notes are an integral part of these consolidated financial statements.
8

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
March 31, 2016
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(10)
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
   Confie Seguros Holding II Co.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (2)
 
 10.25% (L + 9.00%/M)
 
5/8/2019
 
$
18,886

 
$
18,790

 
$
17,328

 
 
 
 
Second lien (3)
 
 10.25% (L + 9.00%/M)
 
5/8/2019
 
5,571

 
5,648

 
5,111

 
 
 
 
 
 
 
 
 
 
24,457

 
24,438

 
22,439

 
2.73
 %
   Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (4)
 
 9.75% (L + 8.75%/Q)
 
7/29/2022
 
15,000

 
14,861

 
14,850

 
 
 
 
Second lien (4)
 
 9.75% (L + 8.75%/Q)
 
7/29/2022
 
4,154

 
4,114

 
4,112

 
 
 
 
Second lien (4)
 
 10.25% (L + 9.25%/Q)
 
7/29/2022
 
3,273

 
3,241

 
3,313

 
 
 
 
 
 
 
 
 
 
22,427

 
22,216

 
22,275

 
2.71
 %
   EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 7.00% (L + 6.00%/Q)
 
6/30/2021
 
21,268

 
21,075

 
21,055

 
 
 
 
First lien (2)(11) - Drawn
 
 8.50% (P + 5.00%/Q)
 
6/30/2021
 
1,220

 
1,208

 
1,208

 
 
 
 
 
 
 
 
 
 
22,488

 
22,283

 
22,263

 
2.71
 %
   Pelican Products, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Products
 
Second lien (3)
 
 9.25% (L + 8.25%/Q)
 
4/9/2021
 
15,500

 
15,516

 
13,098

 
 
 
 
Second lien (2)
 
 9.25% (L + 8.25%/Q)
 
4/9/2021
 
10,000

 
10,113

 
8,450

 
 
 
 
 
 
 
 
 
 
25,500

 
25,629

 
21,548

 
2.62
 %
   VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (4)
 
 7.00% (L + 6.00%/Q)
 
4/20/2021
 
19,453

 
19,282

 
19,259

 
 
 
 
First lien (4)(11) - Drawn
 
 7.00% (L + 6.00%/Q)
 
4/20/2021
 
2,271

 
2,249

 
2,248

 
 
 
 
 
 
 
 
 
 
21,724

 
21,531

 
21,507

 
2.62
 %
   McGraw-Hill School Education Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
 6.25% (L + 5.00%/M)
 
12/18/2019
 
21,505

 
21,362

 
21,452

 
2.61
 %
   IT'SUGAR LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Retail
 
First lien (4)
 
 10.50% (L + 9.50%/Q)
 
10/23/2019
 
20,947

 
20,207

 
20,133

 
2.45
 %
   Weston Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Subordinated (4)
 
 16.00%/Q
 
7/3/2019
 
20,000

 
20,000

 
20,111

 
2.45
 %
   TWDiamondback Holdings Corp. (18):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Diamondback Drugs of Delaware, L.L.C. (TWDiamondback II Holdings LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
First lien (4)
 
 9.75% (L + 8.75%/Q)
 
11/19/2019
 
19,895

 
19,895

 
19,729

 
2.40
 %
   Aricent Technologies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 9.50% (L + 8.50%/Q)
 
4/14/2022
 
20,000

 
19,884

 
17,350

 
 
 
 
Second lien (3)
 
 9.50% (L + 8.50%/Q)
 
4/14/2022
 
2,550

 
2,558

 
2,212

 
 
 
 
 
 
 
 
 
 
22,550

 
22,442

 
19,562

 
2.38
 %
   TW-NHME Holdings Corp. (23)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (4)
 
 10.25% (L + 9.25%/Q)
 
7/14/2022
 
19,000

 
18,777

 
18,762

 
2.28
 %
   DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
 6.25% (L + 5.25%/Q)
 
7/2/2021
 
17,766

 
17,607

 
17,588

 
 
 
 
First lien (3)(11) - Drawn
 
 7.75% (P + 4.25%/Q)
 
7/2/2021
 
581

 
575

 
575

 
 
 
 
 
 
 
 
 
 
18,347

 
18,182

 
18,163

 
2.21
 %
   First American Payment Systems, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 10.75% (L + 9.50%/M)
 
4/12/2019
 
18,643

 
18,438

 
17,990

 
2.19
 %

The accompanying notes are an integral part of these consolidated financial statements.
9

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
March 31, 2016
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(10)
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
   iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
 8.25% (L + 7.25%/Q)
 
8/4/2022
 
$
17,910

 
$
17,744

 
$
17,731

 
2.16
 %
   YP Holdings LLC / Print Media Holdings LLC (12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   YP LLC / Print Media LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Media
 
First lien (2)
 
 8.00% (L + 6.75%/M)
 
6/4/2018
 
18,320

 
18,195

 
17,129

 
2.08
 %
   AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 9.25% (L + 8.25%/M)
 
7/23/2020
 
18,500

 
18,358

 
17,112

 
2.08
 %
   Sierra Hamilton LLC / Sierra Hamilton Finance, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (2)
 
 12.25%/S
 
12/15/2018
 
25,000

 
25,000

 
15,000

 
 
 
 
First lien (3)
 
 12.25%/S
 
12/15/2018
 
2,660

 
2,103

 
1,596

 
 
 
 
 
 
 
 
 
 
27,660

 
27,103

 
16,596

 
2.02
 %
   Transtar Holding Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (2)
 
 10.00% (L + 8.75%/Q)
 
10/9/2019
 
28,300

 
27,992

 
11,745

 
 
 
 
Second lien (3)
 
 10.00% (L + 8.75%/Q)
 
10/9/2019
 
9,564

 
2,774

 
3,969

 
 
 
 
 
 
 
 
 
 
37,864

 
30,766

 
15,714

 
1.91
 %
   MailSouth, Inc. (d/b/a Mspark)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Media
 
First lien (2)
 
 6.75% (L + 5.00%/Q)
 
12/14/2016
 
14,998

 
14,803

 
14,998

 
 
 
 
First lien (3)(11) - Drawn
 
 7.25% (P + 3.75%/M)
 
12/14/2016
 
127

 
115

 
127

 
 
 
 
 
 
 
 
 
 
15,125

 
14,918

 
15,125

 
1.84
 %
   SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (4)
 
 9.75% (L + 8.75%/Q)
 
12/30/2021
 
13,500

 
13,377

 
13,365

 
1.63
 %
   Vision Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 9.50% (L + 8.00%/M)
 
7/23/2017
 
14,000

 
13,981

 
12,950

 
1.58
 %
   Poseidon Intermediate, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 9.50% (L + 8.50%/Q)
 
8/15/2023
 
13,000

 
12,815

 
12,805

 
1.56
 %
   American Tire Distributors, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Subordinated (3)
 
 10.25%/S
 
3/1/2022
 
13,000

 
12,804

 
11,765

 
1.43
 %
   Smile Brands Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
9.00% (L + 6.25% + 1.50% PIK/Q)*
 
8/16/2019
 
12,224

 
12,117

 
10,146

 
1.23
 %
   PowerPlan Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 10.75% (L + 9.75%/M)
 
2/23/2023
 
10,000

 
9,909

 
9,900

 
1.20
 %
   QC McKissock Investment, LLC (17)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   McKissock, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
 7.50% (L + 6.50%/Q)
 
8/5/2019
 
4,863

 
4,829

 
4,812

 
 
 
 
First lien (2)
 
 7.50% (L + 6.50%/Q)
 
8/5/2019
 
3,140

 
3,118

 
3,107

 
 
 
 
First lien (2)
 
 8.15% (Base + 6.07%/Q)
 
8/5/2019
 
1,013

 
1,005

 
1,003

 
 
 
 
 
 
 
 
 
 
9,016

 
8,952

 
8,922

 
1.09
 %
   Harley Marine Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (2)
 
 10.50% (L + 9.25%/Q)
 
12/20/2019
 
9,000

 
8,876

 
8,865

 
1.08
 %
   TTM Technologies, Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Products
 
First lien (2)
 
 6.00% (L + 5.00%/Q)
 
5/31/2021
 
9,175

 
8,798

 
8,738

 
1.06
 %
   Permian Tank & Manufacturing, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (2)
 
 10.50%/S
 
1/15/2018
 
24,357

 
24,478

 
8,647

 
1.05
 %

The accompanying notes are an integral part of these consolidated financial statements.
10

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
March 31, 2016
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(10)
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
   Greenway Health, LLC (fka Vitera Healthcare Solutions, LLC)