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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 September 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 November 8, 2016
Common stock, par value $0.01 per share
 
69,614,858
 


Table of Contents

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

 
 

Investments at fair value
 

 
 

Non-controlled/non-affiliated investments (cost of $1,413,930 and $1,438,415, respectively)
$
1,353,097

 
$
1,377,515

Non-controlled/affiliated investments (cost of $45,472 and $89,047, respectively)
46,684

 
87,287

Controlled investments (cost of $105,353 and $41,254, respectively)
119,198

 
47,422

Total investments at fair value (cost of $1,564,755 and $1,568,716, respectively)
1,518,979

 
1,512,224

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)
28,673

 
29,704

Cash and cash equivalents
49,794

 
30,102

Interest and dividend receivable
16,654

 
13,832

Receivable from affiliates
845

 
360

Other assets
2,235

 
1,924

Total assets
$
1,617,180

 
$
1,588,146

Liabilities
 

 
 

Borrowings
 
 
 
     Holdings Credit Facility
$
308,913

 
$
419,313

     Convertible Notes
155,552

 
115,000

     SBA-guaranteed debentures
121,745

 
117,745

     Unsecured Notes
90,000

 

     NMFC Credit Facility
42,500

 
90,000

     Deferred financing costs (net of accumulated amortization of $11,268 and $8,822, respectively)
(15,038
)
 
(13,992
)
Net borrowings
703,672

 
728,066

Payable for unsettled securities purchased
45,690

 
5,441

Management fee payable
5,781

 
5,466

Incentive fee payable
5,432

 
5,622

Interest payable
4,370

 
2,343

Deferred tax liability
857

 
1,676

Payable to affiliates
567

 
564

Other liabilities
2,599

 
2,060

Total liabilities
768,968

 
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 63,864,858 and 64,005,387 shares outstanding, respectively
640

 
640

Paid in capital in excess of par
899,996

 
899,713

Treasury stock at cost, 140,529 and 0 shares held, respectively
(1,707
)
 

Accumulated undistributed net investment income
4,197

 
4,164

Accumulated undistributed net realized gains on investments
3,533

 
1,342

Net unrealized (depreciation) appreciation (net of provision for taxes of $857 and $1,676, respectively)
(58,447
)
 
(68,951
)
Total net assets
$
848,212

 
$
836,908

Total liabilities and net assets
$
1,617,180

 
$
1,588,146

Number of shares outstanding
63,864,858

 
64,005,387

Net asset value per share
$
13.28

 
$
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
 
Nine Months Ended
 
September 30, 2016
 
September 30, 2015
 
September 30, 2016
 
September 30, 2015
Investment income
 
 
 
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
34,735

 
$
31,628

 
$
106,743

 
$
97,249

Dividend income
83

 
(509
)
 
175

 
(407
)
Other income
2,557

 
1,619

 
4,776

 
3,496

From non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
720

 
1,594

 
3,929

 
3,820

Dividend income
1,061

 
892

 
2,868

 
2,701

Other income
284

 
1,020

 
902

 
1,642

From controlled investments:
 
 
 
 
 
 
 
Interest income
462

 
517

 
1,447

 
1,487

Dividend income
1,919

 
673

 
3,380

 
1,864

Other income
13

 
13

 
80

 
36

Total investment income
41,834

 
37,447

 
124,300

 
111,888

Expenses
 
 
 
 
 
 
 
Incentive fee
5,432

 
5,034

 
16,266

 
14,969

Capital gains incentive fee

 
(490
)
 

 

Total incentive fees
5,432

 
4,544

 
16,266

 
14,969

Management fee
6,883

 
6,373

 
20,537

 
19,039

Interest and other financing expenses
7,171

 
5,788

 
20,544

 
16,863

Professional fees
723

 
808

 
2,461

 
2,456

Administrative expenses
586

 
647

 
2,054

 
1,804

Other general and administrative expenses
390

 
370

 
1,206

 
1,252

Total expenses
21,185

 
18,530

 
63,068

 
56,383

Less: management fee waived (See Note 5)
(1,102
)
 
(1,237
)
 
(3,662
)
 
(3,866
)
Less: expenses waived and reimbursed (See Note 5)

 
(333
)
 
(347
)
 
(733
)
Net expenses
20,083

 
16,960

 
59,059

 
51,784

Net investment income before income taxes
21,751

 
20,487

 
65,241

 
60,104

Income tax expense (benefit)
22

 
(172
)
 
113

 
130

Net investment income
21,729

 
20,659

 
65,128

 
59,974

Net realized gains (losses):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
1,150

 
(37
)
 
2,191

 
(13,508
)
Net change in unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
3,837

 
(8,360
)
 
2,955

 
2,148

Non-controlled/affiliated investments
109

 
313

 
84

 
1,041

Controlled investments
(800
)
 
(2,190
)
 
7,677

 
4,544

Securities purchased under collateralized agreements to resell
(957
)
 

 
(1,031
)
 

Benefit (provision) for taxes
11

 
(581
)
 
819

 
(1,217
)
Net realized and unrealized gains (losses)
3,350

 
(10,855
)
 
12,695

 
(6,992
)
Net increase in net assets resulting from operations
$
25,079

 
$
9,804

 
$
77,823

 
$
52,982

Basic earnings per share
$
0.39

 
$
0.17

 
$
1.22

 
$
0.91

Weighted average shares of common stock outstanding - basic (See Note 11)
63,758,062

 
58,725,338

 
63,843,730

 
58,269,543

Diluted earnings per share
$
0.37

 
$
0.17

 
$
1.14

 
$
0.86

Weighted average shares of common stock outstanding - diluted (See Note 11)
71,145,932

 
66,002,469

 
71,158,044

 
65,514,142

Dividends declared and paid per share
$
0.34

 
$
0.34

 
$
1.02

 
$
1.02


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)
 
Nine Months Ended
 
September 30, 2016
 
September 30, 2015
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income
$
65,128

 
$
59,974

Net realized gains (losses) on investments
2,191

 
(13,508
)
Net change in unrealized appreciation (depreciation) of investments
10,716

 
7,733

Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell
(1,031
)
 

Benefit (provision) for taxes
819

 
(1,217
)
Net increase in net assets resulting from operations
77,823

 
52,982

Capital transactions
 
 
 
Net proceeds from shares sold

 
79,415

Deferred offering costs
38

 
(285
)
Dividends declared to stockholders from net investment income
(65,095
)
 
(59,240
)
Reinvestment of dividends
1,486

 
3,655

Repurchase of shares under repurchase program
(2,948
)
 

Total net (decrease) increase in net assets resulting from capital transactions
(66,519
)
 
23,545

Net increase in net assets
11,304

 
76,527

Net assets at the beginning of the period
836,908

 
802,170

Net assets at the end of the period
$
848,212

 
$
878,697

 
 
 
 
Capital share activity
 
 
 
Shares sold

 
5,750,000

Shares issued from reinvestment of dividends

 
257,497

Shares reissued from repurchase program in connection with reinvestment of dividends
107,970

 

Shares repurchased under repurchase program
(248,499
)
 

Net (decrease) increase in shares outstanding
(140,529
)
 
6,007,497




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)
 
Nine Months Ended
 
September 30, 2016
 
September 30, 2015
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
77,823

 
$
52,982

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
(2,191
)
 
13,508

Net change in unrealized (appreciation) depreciation of investments
(10,716
)
 
(7,733
)
Net change in unrealized depreciation (appreciation) of securities purchased under collateralized agreements to resell
1,031

 

Amortization of purchase discount
(2,342
)
 
(1,787
)
Amortization of deferred financing costs
2,446

 
2,180

Non-cash investment income
(5,101
)
 
(4,374
)
(Increase) decrease in operating assets:
 
 
 
Purchase of investments and delayed draw facilities
(336,310
)
 
(397,745
)
Proceeds from sales and paydowns of investments
352,607

 
344,753

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities
86

 
157

Cash paid for purchase of drawn portion of revolving credit facilities

 
(3,227
)
Cash paid on drawn revolvers
(10,899
)
 
(1,160
)
Cash repayments on drawn revolvers
8,111

 
4,299

Interest and dividend receivable
(2,822
)
 
(4,156
)
Receivable from affiliates
(485
)
 
119

Receivable from unsettled securities sold

 
4,243

Other assets
(299
)
 
(329
)
Increase (decrease) in operating liabilities:
 
 
 
Payable for unsettled securities purchased
40,249

 
(24,032
)
Management fee payable
315

 
(8
)
Incentive fee payable
(190
)
 
231

Interest payable
2,027

 
1,367

Deferred tax liability
(819
)
 
1,217

Payable to affiliates
3

 
(688
)
Other liabilities
311

 
(735
)
Net cash flows provided by (used in) operating activities
112,835

 
(20,918
)
Cash flows from financing activities
 
 
 
Net proceeds from shares sold

 
79,415

Dividends paid
(63,609
)
 
(55,585
)
Offering costs paid
(155
)
 
(141
)
Proceeds from Holdings Credit Facility
128,500

 
246,330

Repayment of Holdings Credit Facility
(238,900
)
 
(328,900
)
Proceeds from Convertible Notes
40,552

 

Proceeds from SBA-guaranteed debentures
4,000

 
66,295

Proceeds from Unsecured Notes
90,000

 

Proceeds from NMFC Credit Facility
156,500

 
101,300

Repayment of NMFC Credit Facility
(204,000
)
 
(83,800
)
Deferred financing costs paid
(3,083
)
 
(2,829
)
Repurchase of shares under repurchase program
(2,948
)
 

Net cash flows (used in) provided by financing activities
(93,143
)
 
22,085

Net increase in cash and cash equivalents
19,692

 
1,167

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

 
23,445

Cash and cash equivalents at the end of the period
$
49,794

 
$
24,612

Supplemental disclosure of cash flow information
 
 
 
Cash interest paid
$
15,975

 
$
12,764

Income taxes paid
11

 
151

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

 
$
60,652

Non-cash financing activities:
 
 
 
Value of shares reissued from repurchase program in connection with dividend reinvestment plan
$
1,486

 
$

Value of shares issued in connection with dividend reinvestment plan

 
3,655

Accrual for offering costs
576

 
739

Accrual for deferred financing costs
371

 
103



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

Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments
September 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
 
$
6,826

 
$
6,801

 
$
6,732

 
0.79
%
Total Funded Debt Investments - Australia
 
 
 
 
 
 
 
$
6,826

 
$
6,801

 
$
6,732

 
0.79
%
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

 
$
24,356

 
$
18,349

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

 
8,330

 
6,112

 
 
 
 
 
 
 
 
 
 
32,834

 
32,686

 
24,461

 
2.88
%
Total Funded Debt Investments - Luxembourg
 
 
 
 
 
 
 
$
32,834

 
$
32,686

 
$
24,461

 
2.88
%
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

 
$
9,353

 
$
9,550

 
1.13
%
Total Funded Debt Investments - Netherlands
 
 
 
 
 
 
 
$
10,000

 
$
9,353

 
$
9,550

 
1.13
%
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
10.50% (L + 9.50%/Q)
 
1/31/2023
 
$
32,500

 
$
31,793

 
$
30,265

 
3.57
%
Total Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
$
32,500

 
$
31,793

 
$
30,265

 
3.57
%
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   TIBCO Software Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
6.50% (L + 5.50%/M)
 
12/4/2020
 
$
29,550

 
$
28,459

 
$
29,221

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

 
14,647

 
13,425

 
 
 
 
 
 
 
 
 
 
44,550

 
43,106

 
42,646

 
5.03
%
   Hill International, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.75% (L + 6.75%/M)
 
9/28/2020
 
41,650

 
41,233

 
41,650

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

 
20,987

 
21,289

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

 
19,634

 
20,275

 
 
 
 
 
 
 
 
 
 
41,000

 
40,621

 
41,564

 
4.90
%
   AssuredPartners, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
10.00% (L + 9.00%/M)
 
10/20/2023
 
20,000

 
19,263

 
19,925

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

 
19,462

 
20,124

 
 
 
 
 
 
 
 
 
 
40,200

 
38,725

 
40,049

 
4.72
%
   Navex Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
5.98% (L + 4.75%/Q)
 
11/19/2021
 
4,574

 
4,539

 
4,505

 
 
 
 
First lien (2)
 
5.98% (L + 4.75%/Q)
 
11/19/2021
 
2,589

 
2,568

 
2,550

 
 
 
 
Second lien (4)
 
10.30% (L + 8.75%/Q)
 
11/18/2022
 
18,187

 
17,978

 
17,642

 
 
 
 
Second lien (3)
 
10.30% (L + 8.75%/Q)
 
11/18/2022
 
15,313

 
14,845

 
14,853

 
 
 
 
 
 
 
 
 
 
40,663

 
39,930

 
39,550

 
4.66
%

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

 
$
32,464

 
$
33,350

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

 
4,964

 
5,109

 
 
 
 
 
 
 
 
 
 
37,631

 
37,428

 
38,459

 
4.53
%
   Tenawa Resource Holdings LLC (13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Tenawa Resource Management LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (3)
 
10.50% (Base + 8.00%/Q)
 
5/12/2019
 
40,000

 
39,894

 
38,175

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

 
34,357

 
35,000

 
4.13
%
   Ascend Learning, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Second lien (3)
 
9.50% (L + 8.50%/Q)
 
11/30/2020
 
35,227

 
34,877

 
34,875

 
4.11
%
   Redbox Automated Retail, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (2)
 
8.50% (L + 7.50%/Q)
 
9/27/2021
 
35,000

 
34,475

 
34,475

 
4.06
%
   Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
8.00% (L + 7.00%/Q)
 
9/24/2021
 
29,700

 
29,381

 
29,700

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

 
2,222

 
2,250

 
 
 
 
 
 
 
 
 
 
31,950

 
31,603

 
31,950

 
3.77
%
   PetVet Care Centers LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (3)
 
10.25% (L + 9.25%/Q)
 
6/17/2021
 
24,000

 
23,812

 
24,000

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

 
6,441

 
6,561

 
 
 
 
 
 
 
 
 
 
30,500

 
30,253

 
30,561

 
3.60
%
   VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (4)
 
7.25% (L + 6.25%/Q)
 
4/20/2021
 
19,355

 
19,200

 
19,355

 
 
 
 
First lien (2)
 
7.25% (L + 6.25%/Q)
 
4/20/2021
 
7,813

 
7,664

 
7,813

 
 
 
 
First lien (4)(11) - Drawn
 
7.25% (L + 6.25%/Q)
 
4/20/2021
 
2,684

 
2,660

 
2,684

 
 
 
 
First lien (4)(11) - Drawn
 
7.25% (L + 6.25%/Q)
 
4/20/2021
 
113

 
111

 
113

 
 
 
 
 
 
 
 
 
 
29,965

 
29,635

 
29,965

 
3.53
%
   CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
7.50% (L + 6.50%/Q)
 
12/19/2020
 
29,720

 
29,541

 
29,795

 
3.51
%
   Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
6.75% (L + 5.75%/Q)
 
10/31/2022
 
19,856

 
19,500

 
19,557

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

 
9,908

 
9,650

 
 
 
 
 
 
 
 
 
 
29,856

 
29,408

 
29,207

 
3.45
%
   Marketo, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)
 
10.50% (L + 9.50%/Q)
 
8/16/2021
 
26,820

 
26,426

 
26,418

 
3.12
%
   Ryan, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
6.75% (L + 5.75%/M)
 
8/7/2020
 
26,250

 
25,935

 
26,046

 
3.07
%
   DigiCert Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
6.00% (L + 5.00%/Q)
 
10/21/2021
 
24,813

 
24,167

 
24,750

 
2.92
%
   Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (4)
 
9.75% (L + 8.75%/Q)
 
7/29/2022
 
15,000

 
14,869

 
15,000

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

 
4,116

 
4,154

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

 
3,242

 
3,305

 
 
 
 
Second lien (3)
 
10.25% (L + 9.25%/Q)
 
7/29/2022
 
1,825

 
1,807

 
1,843

 
 
 
 
Second lien (4)
 
10.25% (L + 9.25%/Q)
 
7/29/2022
 
300

 
297

 
303

 
 
 
 
 
 
 
 
 
 
24,552

 
24,331

 
24,605

 
2.90
%

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)
September 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
   nThrive, Inc. (fka Precyse Acquisition Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (2)
 
10.75% (L + 9.75%/M)
 
4/20/2023
 
$
25,000

 
$
24,580

 
$
24,562

 
2.90
%
   AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
8.25% (L + 7.25%/M)
 
9/30/2020
 
24,432

 
24,128

 
24,188

 
2.85
%
   Pelican Products, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Products
 
Second lien (3)
 
9.25% (L + 8.25%/Q)
 
4/9/2021
 
15,500

 
15,509

 
14,648

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

 
10,109

 
9,450

 
 
 
 
 
 
 
 
 
 
25,500

 
25,618

 
24,098

 
2.84
%
   EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.00% (L + 6.00%/Q)
 
6/30/2021
 
21,161

 
20,985

 
21,161

 
 
 
 
First lien (2)(11) - Drawn
 
7.67% (Base + 5.55%/Q)
 
6/30/2021
 
2,194

 
2,174

 
2,194

 
 
 
 
 
 
 
 
 
 
23,355

 
23,159

 
23,355

 
2.75
%
   KeyPoint Government Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
7.75% (L + 6.50%/Q)
 
11/13/2017
 
23,277

 
23,145

 
23,160

 
2.73
%
   TWDiamondback Holdings Corp. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   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

 
19,895

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

 
2,158

 
2,158

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

 
605

 
605

 
 
 
 
 
 
 
 
 
 
22,658

 
22,658

 
22,658

 
2.67
%
   Vision Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
7.50% (L + 6.50%/Q)
 
6/16/2022
 
22,500

 
22,284

 
22,388

 
2.64
%
   TW-NHME Holdings Corp. (20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (4)
 
10.25% (L + 9.25%/Q)
 
7/14/2022
 
21,500

 
21,260

 
21,500

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

 
494

 
500

 
 
 
 
 
 
 
 
 
 
22,000

 
21,754

 
22,000

 
2.59
%
   Weston Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Subordinated (4)
 
16.00%/Q
 
7/3/2019
 
20,000

 
20,000

 
20,600

 
2.43
%
   IT'SUGAR LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Retail
 
First lien (4)
 
10.50% (L + 9.50%/Q)
 
10/23/2019
 
20,843

 
20,193

 
20,032

 
2.36
%
   Sierra Hamilton LLC / Sierra Hamilton Finance, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (2)
 
12.25%/S
 
12/15/2018
 
25,000

 
25,000

 
18,040

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

 
2,186

 
1,919

 
 
 
 
 
 
 
 
 
 
27,660

 
27,186

 
19,959

 
2.35
%
   DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
6.25% (L + 5.25%/Q)
 
7/2/2021
 
17,676

 
17,531

 
17,676

 
 
 
 
First lien (3)(11) - Drawn
 
7.75% (P + 4.25%/Q)
 
7/2/2021
 
2,091

 
2,070

 
2,091

 
 
 
 
 
 
 
 
 
 
19,767

 
19,601

 
19,767

 
2.33
%
   Aricent Technologies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
9.50% (L + 8.50%/Q)
 
4/14/2022
 
20,000

 
19,922

 
16,250

 
 
 
 
Second lien (3)
 
9.50% (L + 8.50%/Q)
 
4/14/2022
 
2,500

 
2,234

 
2,031

 
 
 
 
 
 
 
 
 
 
22,500

 
22,156

 
18,281

 
2.16
%
   First American Payment Systems, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
10.75% (L + 9.50%/M)
 
4/12/2019
 
18,643

 
18,468

 
18,037

 
2.13
%

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)
September 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
   Project Alpha Intermediate Holding, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
9.25% (L + 8.25%/Q)
 
8/22/2022
 
$
18,000

 
$
17,823

 
$
17,820

 
2.10
%
   iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
8.25% (L + 7.25%/Q)
 
8/4/2022
 
17,820

 
17,665

 
17,820

 
2.10
%
   AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
9.25% (L + 8.25%/M)
 
7/23/2020
 
18,500

 
18,372

 
17,726

 
2.09
%
   Confie Seguros Holding II Co.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (2)
 
11.50% (P + 8.00%/Q)
 
5/8/2019
 
17,457

 
17,445

 
17,340

 
2.05
%
   YP Holdings LLC / Print Media Holdings LLC (12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   YP LLC / Print Media LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Media
 
First lien (2)
 
12.25% (L + 11.00%/M)
 
6/4/2018
 
16,285

 
16,198

 
15,959

 
1.88
%
   Greenway Health, LLC (fka Vitera Healthcare Solutions, LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
6.00% (L + 5.00%/Q)
 
11/4/2020
 
1,945

 
1,933

 
1,890

 
 
 
 
Second lien (2)
 
9.25% (L + 8.25%/Q)
 
11/4/2021
 
14,000

 
13,427

 
13,230

 
 
 
 
 
 
 
 
 
 
15,945

 
15,360

 
15,120

 
1.78
%
   Netsmart Inc. / Netsmart Technologies, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Information Technology
 
Second lien (2)
 
10.50% (L + 9.50%/M)
 
10/19/2023
 
15,000

 
14,639

 
14,850

 
1.75
%
   Amerijet Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
First lien (4)
 
9.00% (L + 8.00%/M)
 
7/15/2021
 
12,696

 
12,604

 
12,602

 
 
 
 
First lien (4)
 
9.00% (L + 8.00%/M)
 
7/15/2021
 
2,116

 
2,101

 
2,100

 
 
 
 
 
 
 
 
 
 
14,812

 
14,705

 
14,702

 
1.73
%
   SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (4)
 
9.75% (L + 8.75%/Q)
 
12/30/2021
 
14,265

 
14,143

 
14,265

 
1.68
%
   Poseidon Intermediate, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
9.50% (L + 8.50%/Q)
 
8/15/2023
 
13,000

 
12,824

 
13,000

 
1.53
%
   QC McKissock Investment, LLC (14)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   McKissock, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
7.50% (L + 6.50%/Q)
 
8/5/2019
 
6,479

 
6,434

 
6,479

 
 
 
 
First lien (2)
 
7.50% (L + 6.50%/Q)
 
8/5/2019
 
3,089

 
3,070

 
3,089

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