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Section 1: 10-Q (10-Q)

Document

 
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 June 30, 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 August 3, 2016
Common stock, par value $0.01 per share
 
63,756,888
 


Table of Contents

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 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)
 
June 30, 2016
 
December 31, 2015
Assets
 

 
 

Investments at fair value
 

 
 

Non-controlled/non-affiliated investments (cost of $1,383,739 and $1,438,415, respectively)
$
1,321,957

 
$
1,377,515

Non-controlled/affiliated investments (cost of $94,105 and $89,047, respectively)
92,320

 
87,287

Controlled investments (cost of $69,139 and $41,254, respectively)
83,784

 
47,422

Total investments at fair value (cost of $1,546,983 and $1,568,716, respectively)
1,498,061

 
1,512,224

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)
29,630

 
29,704

Cash and cash equivalents
34,467

 
30,102

Interest and dividend receivable
15,272

 
13,832

Receivable from unsettled securities sold
3,600

 

Receivable from affiliates
953

 
360

Other assets
2,618

 
1,924

Total assets
$
1,584,601

 
$
1,588,146

Liabilities
 

 
 

Borrowings
 
 
 
     Holdings Credit Facility
$
348,013

 
$
419,313

     SBA-guaranteed debentures
121,745

 
117,745

     Convertible Notes
115,000

 
115,000

     NMFC Credit Facility
87,000

 
90,000

     Unsecured Notes
50,000

 

     Deferred financing costs (net of accumulated amortization of $10,411 and $8,822, respectively)
(13,915
)
 
(13,992
)
Net borrowings
707,843

 
728,066

Payable for unsettled securities purchased
15,832

 
5,441

Management fee payable
5,577

 
5,466

Incentive fee payable
5,449

 
5,622

Interest payable
2,749

 
2,343

Deferred tax liability
868

 
1,676

Payable to affiliates
437

 
564

Other liabilities
2,521

 
2,060

Total liabilities
741,276

 
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 63,756,888 and 64,005,387 shares outstanding, respectively
640

 
640

Paid in capital in excess of par
899,751

 
899,713

Treasury stock at cost, 248,499 and 0 shares held, respectively
(2,948
)
 

Accumulated undistributed net investment income
4,146

 
4,164

Accumulated undistributed net realized gains on investments
2,383

 
1,342

Net unrealized (depreciation) appreciation (net of provision for taxes of $868 and $1,676, respectively)
(60,647
)
 
(68,951
)
Total net assets
$
843,325

 
$
836,908

Total liabilities and net assets
$
1,584,601

 
$
1,588,146

Number of shares outstanding
63,756,888

 
64,005,387

Net asset value per share
$
13.23

 
$
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
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
 
June 30, 2016
 
June 30, 2015
Investment income
 
 
 
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
36,302

 
$
33,767

 
$
72,008

 
$
65,621

Dividend income
92

 
201

 
92

 
102

Other income
997

 
320

 
2,219

 
1,877

From non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
1,627

 
1,183

 
3,209

 
2,226

Dividend income
887

 
951

 
1,807

 
1,809

Other income
305

 
308

 
618

 
622

From controlled investments:
 
 
 
 
 
 
 
Interest income
483

 
520

 
985

 
970

Dividend income
742

 
643

 
1,461

 
1,191

Other income
55

 
12

 
67

 
23

Total investment income
41,490

 
37,905

 
82,466

 
74,441

Expenses
 
 
 
 
 
 
 
Incentive fee
5,449

 
5,057

 
10,834

 
9,935

Capital gains incentive fee

 
9

 

 
490

Total incentive fees
5,449

 
5,066

 
10,834

 
10,425

Management fee
6,818

 
6,198

 
13,654

 
12,666

Interest and other financing expenses
6,771

 
5,598

 
13,373

 
11,075

Professional fees
861

 
909

 
1,738

 
1,648

Administrative expenses
629

 
522

 
1,468

 
1,157

Other general and administrative expenses
384

 
453

 
816

 
882

Total expenses
20,912

 
18,746

 
41,883

 
37,853

Less: management fee waived (See Note 5)
(1,241
)
 
(1,247
)
 
(2,560
)
 
(2,629
)
Less: expenses waived and reimbursed (See Note 5)
(63
)
 

 
(347
)
 
(400
)
Net expenses
19,608

 
17,499

 
38,976

 
34,824

Net investment income before income taxes
21,882

 
20,406

 
43,490

 
39,617

Income tax expense
50

 
153

 
91

 
302

Net investment income
21,832

 
20,253

 
43,399

 
39,315

Net realized gains (losses):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
865

 
(13,338
)
 
1,041

 
(13,471
)
Net change in unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
13,532

 
11,970

 
(882
)
 
10,508

Non-controlled/affiliated investments
1,126

 
1,600

 
(25
)
 
728

Controlled investments
7,298

 
(86
)
 
8,477

 
6,734

Securities purchased under collateralized agreements to resell
(44
)
 

 
(74
)
 

Benefit (provision) for taxes
84

 
(135
)
 
808

 
(636
)
Net realized and unrealized gains (losses)
22,861

 
11

 
9,345

 
3,863

Net increase in net assets resulting from operations
$
44,693

 
$
20,264

 
$
52,744

 
$
43,178

Basic earnings per share
$
0.70

 
$
0.35

 
$
0.83

 
$
0.74

Weighted average shares of common stock outstanding - basic (See Note 11)
63,839,920

 
58,076,552

 
63,887,036

 
58,037,868

Diluted earnings per share
$
0.64

 
$
0.33

 
$
0.77

 
$
0.70

Weighted average shares of common stock outstanding - diluted (See Note 11)
71,117,051

 
65,313,497

 
71,164,167

 
65,265,931

Dividends declared and paid per share
$
0.34

 
$
0.34

 
$
0.68

 
$
0.68


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)
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income
$
43,399

 
$
39,315

Net realized gains (losses) on investments
1,041

 
(13,471
)
Net change in unrealized appreciation (depreciation) of investments
7,570

 
17,970

Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell
(74
)
 

Benefit (provision) for taxes
808

 
(636
)
Net increase in net assets resulting from operations
52,744

 
43,178

Capital transactions
 
 
 
Deferred offering costs
38

 
59

Dividends declared to stockholders from net investment income
(43,417
)
 
(39,465
)
Reinvestment of dividends

 
2,384

Repurchase of shares under repurchase program
(2,948
)
 

Total net decrease in net assets resulting from capital transactions
(46,327
)
 
(37,022
)
Net increase in net assets
6,417

 
6,156

Net assets at the beginning of the period
836,908

 
802,170

Net assets at the end of the period
$
843,325

 
$
808,326

 
 
 
 
Capital share activity
 
 
 
Shares issued from reinvestment of dividends

 
163,931

Shares repurchased under repurchase program
(248,499
)
 

Net (decrease) increase in shares outstanding
(248,499
)
 
163,931




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)
 
Six Months Ended
 
June 30, 2016
 
June 30, 2015
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
52,744

 
$
43,178

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
(1,041
)
 
13,471

Net change in unrealized (appreciation) depreciation of investments
(7,570
)
 
(17,970
)
Net change in unrealized depreciation (appreciation) of securities purchased under collateralized agreements to resell
74

 

Amortization of purchase discount
(1,617
)
 
(1,176
)
Amortization of deferred financing costs
1,589

 
1,419

Non-cash investment income
(3,356
)
 
(3,209
)
(Increase) decrease in operating assets:
 
 
 
Purchase of investments and delayed draw facilities
(163,888
)
 
(187,045
)
Proceeds from sales and paydowns of investments
198,211

 
315,219

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities
43

 
54

Cash paid for purchase of drawn portion of revolving credit facilities

 
(3,050
)
Cash paid on drawn revolvers
(8,851
)
 
(970
)
Cash repayments on drawn revolvers
2,232

 
475

Interest and dividend receivable
(1,440
)
 
288

Receivable from unsettled securities sold
(3,600
)
 
8,912

Receivable from affiliates
(593
)
 
128

Other assets
(423
)
 
(1,162
)
Increase (decrease) in operating liabilities:
 
 
 
Payable for unsettled securities purchased
10,391

 
(26,460
)
Management fee payable
111

 
(193
)
Incentive fee payable
(173
)
 
254

Interest payable
406

 
8

Deferred tax liability
(808
)
 
636

Payable to affiliates
(127
)
 
(362
)
Capital gains incentive fee payable

 
490

Other liabilities
257

 
(658
)
Net cash flows provided by operating activities
72,571

 
142,277

Cash flows from financing activities
 
 
 
Dividends paid
(43,417
)
 
(37,081
)
Offering costs paid
(53
)
 
(56
)
Proceeds from Holdings Credit Facility
103,300

 
138,750

Repayment of Holdings Credit Facility
(174,600
)
 
(247,000
)
Proceeds from SBA-guaranteed debentures
4,000

 
17,500

Proceeds from NMFC Credit Facility
71,000

 
51,300

Repayment of NMFC Credit Facility
(74,000
)
 
(63,300
)
Proceeds from Unsecured Notes
50,000

 

Deferred financing costs paid
(1,488
)
 
(1,609
)
Repurchase of shares under repurchase program
(2,948
)
 

Net cash flows used in financing activities
(68,206
)
 
(141,496
)
Net increase in cash and cash equivalents
4,365

 
781

Cash and cash equivalents at the beginning of the period
30,102

 
23,445

Cash and cash equivalents at the end of the period
$
34,467

 
$
24,226

Supplemental disclosure of cash flow information
 
 
 
Cash interest paid
$
10,960

 
$
9,303

Income taxes paid
3

 
143

Non-cash operating activities:
 
 
 
Non-cash activity on investments
$
167

 
$
60,652

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

 
$
2,384

Accrual for offering costs
817

 
824

Accrual for deferred financing costs
106

 
127



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

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments
June 30, 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
 
$
7,755

 
$
7,725

 
$
7,523

 
0.89
%
Total Funded Debt Investments - Australia
 
 
 
 
 
 
 
$
7,755

 
$
7,725

 
$
7,523

 
0.89
%
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

 
$
24,349

 
$
17,240

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

 
8,329

 
5,743

 
 
 
 
 
 
 
 
 
 
32,834

 
32,678

 
22,983

 
2.73
%
Total Funded Debt Investments - Luxembourg
 
 
 
 
 
 
 
$
32,834

 
$
32,678

 
$
22,983

 
2.73
%
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

 
$
9,337

 
$
9,450

 
1.12
%
Total Funded Debt Investments - Netherlands
 
 
 
 
 
 
 
$
10,000

 
$
9,337

 
$
9,450

 
1.12
%
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
 10.50% (L + 9.50%/Q)
 
1/31/2023
 
$
32,500

 
$
31,774

 
$
30,265

 
3.59
%
Total Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
$
32,500

 
$
31,774

 
$
30,265

 
3.59
%
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Engility Corporation (fka TASC, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
 7.00% (L + 6.00%/Q)
 
5/22/2020
 
$
27,600

 
$
27,325

 
$
27,651

 
 
 
 
Second lien (3)
 
 12.00%/M
 
5/21/2021
 
12,500

 
12,104

 
12,552

 
 
 
 
Second lien (3)
 
 12.00%/M
 
5/21/2021
 
4,000

 
3,974

 
4,017

 
 
 
 
 
 
 
 
 
 
44,100

 
43,403

 
44,220

 
5.24
%
   Deltek, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
 9.50% (L + 8.50%/Q)
 
6/26/2023
 
21,000

 
20,982

 
21,276

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

 
19,629

 
20,263

 
 
 
 
 
 
 
 
 
 
41,000

 
40,611

 
41,539

 
4.93
%
   Hill International, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 7.75% (L + 6.75%/Q)
 
9/28/2020
 
41,756

 
41,315

 
41,443

 
4.91
%
   Navex Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
 5.75% (L + 4.75%/Q)
 
11/19/2021
 
4,574

 
4,537

 
4,545

 
 
 
 
First lien (2)
 
 5.75% (L + 4.75%/Q)
 
11/19/2021
 
2,589

 
2,568

 
2,573

 
 
 
 
Second lien (4)
 
 9.75% (L + 8.75%/Q)
 
11/18/2022
 
18,187

 
17,972

 
17,734

 
 
 
 
Second lien (3)
 
 9.75% (L + 8.75%/Q)
 
11/18/2022
 
15,313

 
14,831

 
14,930

 
 
 
 
 
 
 
 
 
 
40,663

 
39,908

 
39,782

 
4.72
%
   AssuredPartners, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 10.00% (L + 9.00%/M)
 
10/20/2023
 
20,000

 
19,246

 
19,762

 
 
 
 
Second lien (3)
 
 10.00% (L + 9.00%/M)
 
10/20/2023
 
20,200

 
19,444

 
19,960

 
 
 
 
 
 
 
 
 
 
40,200

 
38,690

 
39,722

 
4.71
%

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)
June 30, 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
   TIBCO Software Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
 6.50% (L + 5.50%/M)
 
12/4/2020
 
$
29,625

 
$
28,474

 
$
27,181

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

 
14,635

 
12,000

 
 
 
 
 
 
 
 
 
 
44,625

 
43,109

 
39,181

 
4.65
%
   Kronos Incorporated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 9.75% (L + 8.50%/Q)
 
4/30/2020
 
32,632

 
32,454

 
32,931

 
 
 
 
Second lien (3)
 
 9.75% (L + 8.50%/Q)
 
4/30/2020
 
4,999

 
4,962

 
5,044

 
 
 
 
 
 
 
 
 
 
37,631

 
37,416

 
37,975

 
4.50
%
   ProQuest LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
 10.00% (L + 9.00%/Q)
 
12/15/2022
 
35,000

 
34,337

 
35,000

 
4.15
%
   Ascend Learning, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Second lien (3)
 
 9.50% (L + 8.50%/Q)
 
11/30/2020
 
35,227

 
34,860

 
33,906

 
4.02
%
   CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
 7.50% (L + 6.50%/M)
 
12/19/2020
 
32,408

 
32,203

 
32,164

 
3.81
%
   Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 8.00% (L + 7.00%/Q)
 
9/24/2021
 
29,775

 
29,442

 
29,404

 
 
 
 
First lien (3)(11) - Drawn
 
 8.00% (L + 7.00%/Q)
 
9/24/2021
 
2,250

 
2,222

 
2,222

 
 
 
 
 
 
 
 
 
 
32,025

 
31,664

 
31,626

 
3.75
%
   PetVet Care Centers LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (3)
 
 10.25% (L + 9.25%/Q)
 
6/17/2021
 
24,000

 
23,804

 
24,329

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

 
6,438

 
6,630

 
 
 
 
 
 
 
 
 
 
30,500

 
30,242

 
30,959

 
3.67
%
   Rocket Software, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 10.25% (L + 8.75%/Q)
 
2/8/2019
 
30,875

 
30,793

 
30,810

 
3.65
%
   VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (4)
 
 7.25% (L + 6.25%/Q)
 
4/20/2021
 
19,404

 
19,241

 
19,598

 
 
 
 
First lien (2)
 
 7.25% (L + 6.25%/Q)
 
4/20/2021
 
7,832

 
7,676

 
7,911

 
 
 
 
First lien (4)(11) - Drawn
 
 7.25% (L + 6.25%/Q)
 
4/20/2021
 
2,265

 
2,244

 
2,288

 
 
 
 
First lien (3)(11) - Drawn
 
 7.25% (L + 6.25%/Q)
 
4/20/2021
 
675

 
668

 
682

 
 
 
 
 
 
 
 
 
 
30,176

 
29,829

 
30,479

 
3.61
%
   CompassLearning, Inc. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
 8.00% (L + 6.75%/Q)
 
11/26/2018
 
30,000

 
29,605

 
29,828

 
3.54
%
   Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 6.75% (L + 5.75%/Q)
 
10/31/2022
 
18,887

 
18,538

 
18,604

 
 
 
 
First lien (2)
 
 6.75% (L + 5.75%/Q)
 
10/31/2022
 
1,019

 
1,000

 
1,003

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

 
9,906

 
9,650

 
 
 
 
 
 
 
 
 
 
29,906

 
29,444

 
29,257

 
3.47
%
   Ryan, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 6.75% (L + 5.75%/M)
 
8/7/2020
 
26,600

 
26,263

 
26,069

 
3.09
%
   DigiCert Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
 6.00% (L + 5.00%/Q)
 
10/21/2021
 
24,875

 
24,200

 
24,752

 
2.94
%
   Precyse Acquisition Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (2)
 
 10.75% (L + 9.75%/Q)
 
4/20/2023
 
25,000

 
24,570

 
24,563

 
2.91
%
   AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
 8.25% (L + 7.25%/M)
 
9/30/2020
 
24,621

 
24,299

 
24,253

 
2.88
%
   KeyPoint Government Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
 7.75% (L + 6.50%/Q)
 
11/13/2017
 
24,143

 
23,977

 
24,023

 
2.85
%

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)
June 30, 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
   Pelican Products, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Products
 
Second lien (3)
 
 9.25% (L + 8.25%/Q)
 
4/9/2021
 
$
15,500

 
$
15,512

 
$
14,105

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

 
10,111

 
9,100

 
 
 
 
 
 
 
 
 
 
25,500

 
25,623

 
23,205

 
2.75
%
   EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
 7.00% (L + 6.00%/Q)
 
6/30/2021
 
21,214

 
21,030

 
21,002

 
 
 
 
First lien (2)(11) - Drawn
 
 8.50% (P + 5.00%/Q)
 
6/30/2021
 
2,197

 
2,177

 
2,175

 
 
 
 
 
 
 
 
 
 
23,411

 
23,207

 
23,177

 
2.75
%
   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

 
20,156

 
 
 
 
First lien (3)
 
 9.75% (L + 8.75%/Q)
 
11/19/2019
 
2,158

 
2,158

 
2,186

 
 
 
 
First lien (4)
 
 9.75% (L + 8.75%/Q)
 
11/19/2019
 
605

 
605

 
613

 
 
 
 
 
 
 
 
 
 
22,658

 
22,658

 
22,955

 
2.72
%
   Vision Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
 7.50% (L + 6.50%/Q)
 
6/16/2022
 
22,500

 
22,276

 
22,275

 
2.64
%
   Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (4)
 
 9.75% (L + 8.75%/Q)
 
7/29/2022
 
15,000

 
14,864

 
14,850

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

 
4,115

 
4,112

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

 
3,242

 
3,305

 
 
 
 
 
 
 
 
 
 
22,427

 
22,221

 
22,267

 
2.64
%
   TW-NHME Holdings Corp. (23)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (4)
 
 10.25% (L + 9.25%/Q)
 
7/14/2022
 
21,500

 
21,252

 
21,231

 
 
 
 
Second lien (3)
 
 10.25% (L + 9.25%/Q)
 
7/14/2022
 
500

 
494

 
494

 
 
 
 
 
 
 
 
 
 
22,000

 
21,746

 
21,725

 
2.58
%
   Sierra Hamilton LLC / Sierra Hamilton Finance, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (2)
 
 12.25%/S
 
12/15/2018
 
25,000

 
25,000

 
19,500

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

 
2,144

 
2,075

 
 
 
 
 
 
 
 
 
 
27,660

 
27,144

 
21,575

 
2.56
%
   Confie Seguros Holding II Co.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (2)
 
 10.25% (L + 9.00%/M)
 
5/8/2019
 
18,886

 
18,811

 
17,988

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

 
3,631

 
3,402

 
 
 
 
 
 
 
 
 
 
22,457

 
22,442

 
21,390

 
2.54
%
   Weston Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Subordinated (4)
 
 16.00%/Q
 
7/3/2019
 
20,000

 
20,000

 
20,311

 
2.41
%
   IT'SUGAR LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Retail
 
First lien (4)
 
 10.50% (L + 9.50%/Q)
 
10/23/2019
 
20,895

 
20,200

 
20,082

 
2.38
%
   Aricent Technologies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 9.50% (L + 8.50%/Q)
 
4/14/2022
 
20,000

 
19,887

 
16,200

 
 
 
 
Second lien (3)
 
 9.50% (L + 8.50%/Q)
 
4/14/2022
 
4,000

 
3,733

 
3,240

 
 
 
 
 
 
 
 
 
 
24,000

 
23,620

 
19,440

 
2.31
%
   DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
 6.25% (L + 5.25%/Q)
 
7/2/2021
 
17,721

 
17,569

 
17,544

 
 
 
 
First lien (3)(11) - Drawn
 
 7.75% (P + 4.25%/Q)
 
7/2/2021
 
1,244

 
1,231

 
1,231

 
 
 
 
 
 
 
 
 
 
18,965

 
18,800

 
18,775

 
2.23
%

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)
June 30, 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
   First American Payment Systems, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 10.75% (L + 9.50%/M)
 
4/12/2019
 
$
18,643

 
$
18,451

 
$
17,990

 
2.13
%
   iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
 8.25% (L + 7.25%/Q)
 
8/4/2022
 
17,865

 
17,704

 
17,686

 
2.10
%
   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

 
18,208

 
17,233

 
2.04
%
   AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 9.25% (L + 8.25%/M)
 
7/23/2020
 
18,500

 
18,365

 
17,122

 
2.03
%
   Netsmart Inc. / Netsmart Technologies, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Information Technology
 
Second lien (2)
 
10.50% (L + 9.50%/Q)
 
10/19/2023
 
15,000

 
14,631

 
14,850

 
1.76
%
   SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (4)
 
 9.75% (L + 8.75%/Q)
 
12/30/2021
 
14,265

 
14,138

 
14,122

 
1.67
%
   Poseidon Intermediate, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 9.50% (L + 8.50%/Q)
 
8/15/2023
 
13,000

 
12,820

 
12,805

 
1.52
%
   American Tire Distributors, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Subordinated (3)
 
 10.25%/S
 
3/1/2022
 
13,000

 
12,810

 
11,473

 
1.36
%
   Transtar Holding Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (2)
 
 12.00% (L + 10.75%/Q)(8)
 
10/9/2019
 
28,300

 
28,011

 
8,490

 
 
 
 
Second lien (3)
 
 12.00% (L + 10.75%/Q)(8)
 
10/9/2019
 
9,564

 
2,889

 
2,869

 
 
 
 
 
 
 
 
 
 
37,864

 
30,900

 
11,359

 
1.35
%
   Smile Brands Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
9.00% (L + 6.25% + 1.50% PIK/Q)*
 
8/16/2019
 
12,243

 
12,145

 
10,635

 
1.26
%
   PowerPlan Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
 10.75% (L + 9.75%/Q)
 
2/23/2023
 
10,000

 
9,912

 
9,908

 
1.17
%
   Harley Marine Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (2)
 
 10.50% (L + 9.25%/Q)
 
12/20/2019
 
9,000

 
8,883

 
8,955

 
1.06
%
   QC McKissock Investment, LLC (17)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   McKissock, LLC