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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 March 31, 2018
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 (the "Exchange Act") 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, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ý
 
Accelerated filer o
 
 
Non-accelerated filer o (Do not check if a smaller reporting company)
 
Smaller reporting company o
 
 
Emerging growth company o
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 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 7, 2018
Common stock, par value $0.01 per share
 
75,935,093
 


Table of Contents

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2018
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, 2018
 
December 31, 2017
Assets
 

 
 

Investments at fair value
 

 
 

Non-controlled/non-affiliated investments (cost of $1,563,275 and $1,438,889, respectively)
$
1,583,047

 
$
1,462,182

Non-controlled/affiliated investments (cost of $152,521 and $180,380, respectively)
155,729

 
178,076

Controlled investments (cost of $229,862 and $171,958, respectively)
239,147

 
185,402

Total investments at fair value (cost of $1,945,658 and $1,791,227, respectively)
1,977,923

 
1,825,660

Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000 respectively)
25,200

 
25,212

Cash and cash equivalents
29,636

 
34,936

Interest and dividend receivable
36,767

 
31,844

Receivable from affiliates
651

 
343

Other assets
8,242

 
10,023

Total assets
$
2,078,419

 
$
1,928,018

Liabilities
 

 
 

Borrowings
 
 
 
     Holdings Credit Facility
$
355,663

 
$
312,363

     Unsecured Notes
235,000

 
145,000

     Convertible Notes
155,385

 
155,412

     SBA-guaranteed debentures
150,000

 
150,000

     NMFC Credit Facility
95,000

 
122,500

     Deferred financing costs (net of accumulated amortization of $17,885 and $16,578, respectively)
(16,012
)
 
(15,777
)
Net borrowings
975,036

 
869,498

Payable for unsettled securities purchased
29,841

 

Management fee payable
14,435

 
7,065

Incentive fee payable
13,105

 
6,671

Interest payable
7,201

 
5,107

Payable to affiliates
2,076

 
863

Deferred tax liability
812

 
894

Other liabilities
2,912

 
2,945

Total liabilities
1,045,418

 
893,043

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, 75,935,093 and 75,935,903 shares issued and outstanding, respectively
759

 
759

Paid in capital in excess of par
1,053,468

 
1,053,468

Accumulated undistributed net investment income
39,083

 
39,165

Accumulated undistributed net realized losses on investments
(76,475
)
 
(76,681
)
Net unrealized appreciation (depreciation) (net of provision for taxes of $812 and $894, respectively)
16,166

 
18,264

Total net assets
$
1,033,001

 
$
1,034,975

Total liabilities and net assets
$
2,078,419

 
$
1,928,018

Number of shares outstanding
75,935,093

 
75,935,093

Net asset value per share
$
13.60

 
$
13.63


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, 2018
 
March 31, 2017
Investment income
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
Interest income
$
35,436

 
$
32,876

Dividend income
486

 
39

Non-cash dividend income
1,324

 
12

Other income
2,868

 
2,265

From non-controlled/affiliated investments:
 
 
 
Interest income
102

 
647

Dividend income
845

 
1,004

Non-cash dividend income
4,009

 
644

Other income
302

 
298

From controlled investments:
 
 
 
Interest income
1,201

 
475

Dividend income
4,239

 
4,213

Non-cash dividend income
1,454

 
821

Other income
623

 
13

Total investment income
52,889

 
43,307

Expenses
 
 
 
Incentive fee
6,434

 
5,408

Management fee
8,692

 
7,614

Interest and other financing expenses
11,290

 
8,376

Professional fees
694

 
850

Administrative expenses
939

 
708

Other general and administrative expenses
410

 
466

Total expenses
28,459

 
23,422

Less: management and incentive fees waived (See Note 5)
(1,322
)
 
(3,156
)
Less: expenses waived and reimbursed (See Note 5)

 
(470
)
Net expenses
27,137

 
19,796

Net investment income before income taxes
25,752

 
23,511

Income tax expense
16

 
80

Net investment income
25,736

 
23,431

Net realized gains (losses):
 
 
 
Non-controlled/non-affiliated investments
206

 
826

Net change in unrealized appreciation (depreciation):
 
 
 
Non-controlled/non-affiliated investments
(3,521
)
 
7,979

Non-controlled/affiliated investments
1,809

 
(296
)
Controlled investments
(456
)
 
(1,478
)
Securities purchased under collateralized agreements to resell
(12
)
 
(800
)
Benefit for taxes
82

 
755

Net realized and unrealized gains (losses)
(1,892
)
 
6,986

Net increase in net assets resulting from operations
$
23,844

 
$
30,417

Basic earnings per share
$
0.31

 
$
0.44

Weighted average shares of common stock outstanding - basic (See Note 11)
75,935,093

 
69,718,968

Diluted earnings per share
$
0.30

 
$
0.40

Weighted average shares of common stock outstanding - diluted (See Note 11)
85,759,220

 
79,543,095

Distributions 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, 2018
 
March 31, 2017
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income
$
25,736

 
$
23,431

Net realized gains on investments
206

 
826

Net change in unrealized (depreciation) appreciation of investments
(2,168
)
 
6,205

Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell
(12
)
 
(800
)
Benefit for taxes
82

 
755

Net increase in net assets resulting from operations
23,844

 
30,417

Capital transactions
 
 
 
Distributions declared to stockholders from net investment income
(25,818
)
 
(23,704
)
Reinvestment of distributions

 
1,548

Other

 
(81
)
Total net decrease in net assets resulting from capital transactions
(25,818
)
 
(22,237
)
Net (decrease) increase in net assets
(1,974
)
 
8,180

Net assets at the beginning of the period
1,034,975

 
938,562

Net assets at the end of the period
$
1,033,001

 
$
946,742

 
 
 
 
Capital share activity
 
 
 
Shares issued from the reinvestment of distributions

 
66,306

Shares reissued from repurchase program in connection with the reinvestment of distributions

 
37,573

Net increase in shares outstanding

 
103,879




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, 2018
 
March 31, 2017
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
23,844

 
$
30,417

Adjustments to reconcile net (increase) decrease in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Net realized gains on investments
(206
)
 
(826
)
Net change in unrealized depreciation (appreciation) of investments
2,168

 
(6,205
)
Net change in unrealized depreciation (appreciation) of securities purchased under collateralized agreements to resell
12

 
800

Amortization of purchase discount
(926
)
 
(747
)
Amortization of deferred financing costs
1,307

 
988

Amortization of premium on Convertible Notes
(27
)
 
(27
)
Non-cash investment income
(4,292
)
 
(1,933
)
(Increase) decrease in operating assets:
 
 
 
Purchase of investments and delayed draw facilities
(237,846
)
 
(349,477
)
Proceeds from sales and paydowns of investments
87,141

 
133,801

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities
29

 
120

Cash paid on drawn revolvers
(5,423
)
 
(3,970
)
Cash repayments on drawn revolvers
7,092

 
1,159

Interest and dividend receivable
(4,923
)
 
(3,881
)
Receivable from unsettled securities sold

 
(691
)
Receivable from affiliates
(308
)
 
(369
)
Other assets
1,781

 
(967
)
Increase (decrease) in operating liabilities:
 
 
 
Payable for unsettled securities purchased
29,841

 
47,811

Management fee payable
7,370

 
6,258

Incentive fee payable
6,434

 
3,608

Interest payable
2,094

 
2,478

Payable to affiliates
1,213

 
276

Deferred tax liability
(82
)
 
(755
)
Other liabilities
(101
)
 
298

Net cash flows used in operating activities
(83,808
)
 
(141,834
)
Cash flows from financing activities
 
 
 
Distributions paid
(25,818
)
 
(22,156
)
Offering costs paid

 
(58
)
Proceeds from Holdings Credit Facility
94,500

 
165,600

Repayment of Holdings Credit Facility
(51,200
)
 
(122,200
)
Proceeds from Unsecured Notes
90,000

 

Proceeds from NMFC Credit Facility
65,000

 
122,500

Repayment of NMFC Credit Facility
(92,500
)
 
(10,000
)
Other

 
(81
)
Deferred financing costs paid
(1,474
)
 
(36
)
Net cash flows provided by financing activities
78,508

 
133,569

Net decrease in cash and cash equivalents
(5,300
)
 
(8,265
)
Cash and cash equivalents at the beginning of the period
34,936

 
45,928

Cash and cash equivalents at the end of the period
$
29,636

 
$
37,663

Supplemental disclosure of cash flow information
 
 
 
Cash interest paid
$
7,577

 
$
4,570

Income taxes paid
3

 
12

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

 
$
988

Value of shares reissued from repurchase program in connection with the distribution reinvestment plan

 
560

Accrual for offering costs
944

 
540

Accrual for deferred financing costs
171

 
63



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, 2018
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shine Acquisition Co. S.à.r.l. / Boing US Holdco Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
Second lien (3)
 
9.29% (L + 7.50%/Q)
 
9/25/2017
 
10/3/2025
 
$
40,353

 
$
40,064

 
$
40,480

 
3.92
 %
Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)
 
11.37% (L + 9.50%/Q)
 
1/30/2015
 
1/31/2023
 
40,000

 
39,068

 
39,600

 
3.83
 %
Total Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
$
80,353

 
$
79,132

 
$
80,080

 
7.75
 %
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benevis Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)
 
8.50% (L + 6.32%/Q)
 
3/15/2018
 
3/15/2024
 
$
58,824

 
$
58,824

 
$
58,824

 
 
 
 
First lien (3)
 
8.50% (L + 6.32%/Q)
 
3/15/2018
 
3/15/2024
 
20,691

 
20,691

 
20,691

 
 
 
 
 
 
 
 
 
 
 
 
79,515

 
79,515

 
79,515

 
7.70
 %
AmWINS Group, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
8.63% (L + 6.75%/Q)
 
1/19/2017
 
1/25/2025
 
57,000

 
56,810

 
57,570

 
5.57
 %
Alegeus Technologies, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)(10)
 
10.80% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
23,500

 
23,500

 
23,500

 
 
 
 
Second lien (4)(10)
 
10.80% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
22,500

 
22,500

 
22,500

 
 
 
 
 
 
 
 
 
 
 
 
46,000

 
46,000

 
46,000

 
4.45
 %
Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)
 
7.56% (L + 5.75%/Q)
 
10/9/2015
 
10/31/2022
 
34,784

 
34,525

 
34,784

 
 
 
 
Second lien (3)
 
11.02% (L + 9.25%/Q)
 
10/9/2015
 
10/30/2023
 
10,000

 
9,922

 
9,800

 
 
 
 
 
 
 
 
 
 
 
 
44,784

 
44,447

 
44,584

 
4.32
 %
Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (4)(10)
 
10.63% (L + 8.75%/M)
 
7/31/2015
 
7/29/2022
 
15,000

 
14,896

 
15,000

 
 
 
 
Second lien (3)(10)
 
10.63% (L + 8.75%/M)
 
2/1/2017
 
7/29/2022
 
14,518

 
14,368

 
14,518

 
 
 
 
Second lien (4)(10)
 
10.63% (L + 8.75%/M)
 
11/5/2015
 
7/29/2022
 
4,154

 
4,124

 
4,154

 
 
 
 
Second lien (4)(10)
 
11.13% (L + 9.25%/M)
 
2/1/2016
 
7/29/2022
 
3,273

 
3,249

 
3,273

 
 
 
 
Second lien (3)(10)
 
10.88% (L + 9.00%/M)
 
10/14/2016
 
7/29/2022
 
2,361

 
2,342

 
2,361

 
 
 
 
Second lien (3)(10)
 
11.13% (L + 9.25%/M)
 
8/8/2016
 
7/29/2022
 
1,825

 
1,810

 
1,825

 
 
 
 
Second lien (4)(10)
 
11.13% (L + 9.25%/M)
 
8/8/2016
 
7/29/2022
 
300

 
298

 
300

 
 
 
 
 
 
 
 
 
 
 
 
41,431

 
41,087

 
41,431

 
4.01
 %
Salient CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (2)
 
7.63% (L + 5.75%/M)
 
1/6/2015
 
2/28/2022
 
39,882

 
39,445

 
40,380

 
3.91
 %
Tenawa Resource Holdings LLC (13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenawa Resource Management LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
First lien (3)(10)
 
10.50% (Base + 8.00%/Q)
 
5/12/2014
 
10/30/2024
 
39,800

 
39,737


39,800

 
3.85
 %
VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
First lien (4)
 
8.56% (L + 6.25%/Q)
 
5/15/2015
 
4/20/2021
 
19,062

 
18,955

 
19,085

 
 
 
 
First lien (2)
 
8.56% (L + 6.25%/Q)
 
5/15/2015
 
4/20/2021
 
7,694

 
7,591

 
7,704

 
 
 
 
First lien (3)(11) - Drawn
 
8.56% (L + 6.25%/Q)
 
2/24/2017
 
4/20/2021
 
5,990

 
5,884

 
5,998

 
 
 
 
First lien (4)
 
8.56% (L + 6.25%/Q)
 
5/15/2015
 
4/20/2021
 
2,644

 
2,627

 
2,647

 
 
 
 
First lien (3)(11) - Drawn
 
8.56% (L + 6.25%/Q)
 
6/24/2016
 
4/20/2021
 
1,881

 
1,865

 
1,884

 
 
 
 
First lien (2)
 
8.56% (L + 6.25%/Q)
 
3/31/2016
 
4/20/2021
 
1,628

 
1,603

 
1,630

 
 
 
 
First lien (4)
 
8.56% (L + 6.25%/Q)
 
5/15/2015
 
4/20/2021
 
494

 
487

 
494

 
 
 
 
 
 
 
 
 
 
 
 
39,393

 
39,012

 
39,442

 
3.82
 %

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, 2018
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Frontline Technologies Group Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (2)(10)
 
8.38% (L + 6.50%/M)
 
9/18/2017
 
9/18/2023
 
$
16,708

 
$
16,592

 
$
16,583

 
 
 
 
First lien (4)(10)
 
8.38% (L + 6.50%/M)
 
9/18/2017
 
9/18/2023
 
22,557

 
22,400

 
22,388

 
 
 
 
 
 
 
 
 
 
 
 
39,265

 
38,992

 
38,971

 
3.77
 %
NM GRC Holdco, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.80% (L + 5.50%/Q)
 
2/9/2018
 
2/9/2024
 
38,930

 
38,739

 
38,735

 
3.75
 %
Kronos Incorporated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (2)
 
10.02% (L + 8.25%/Q)
 
10/26/2012
 
11/1/2024
 
36,000

 
35,520

 
37,425

 
3.62
 %
Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.14% (L + 6.25%/M)
 
9/24/2015
 
9/24/2021
 
29,250

 
29,018

 
29,250

 
 
 
 
First lien (2)(10)
 
8.14% (L + 6.25%/M)
 
7/27/2017
 
9/24/2021
 
3,722

 
3,690

 
3,722

 
 
 
 
First lien (3)(10)(11) - Drawn
 
8.89% (L + 7.00%/M)
 
9/24/2015
 
9/24/2021
 
600

 
593

 
600

 
 
 
 
 
 
 
 
 
 
 
 
33,572

 
33,301

 
33,572

 
3.25
 %
Navicure, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)
 
9.38% (L + 7.50%/M)
 
10/23/2017
 
10/31/2025
 
31,470

 
31,385

 
31,627

 
3.06
 %
Evo Payments International, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (2)
 
10.88% (L + 9.00%/M)
 
12/8/2016
 
12/23/2024
 
25,000

 
24,827

 
25,250

 
 
 
 
Second lien (3)
 
10.88% (L + 9.00%/M)
 
12/8/2016
 
12/23/2024
 
5,000

 
5,052

 
5,050

 
 
 
 
 
 
 
 
 
 
 
 
30,000

 
29,879

 
30,300

 
2.93
 %
Wirepath LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (2)
 
6.80% (L + 4.50%/Q)
 
7/31/2017
 
8/5/2024
 
27,661

 
27,533

 
27,895

 
2.70
 %
Ansira Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)
 
8.80% (L + 6.50%/Q)
 
12/19/2016
 
12/20/2022
 
25,855

 
25,748

 
25,790

 
 
 
 
First lien (3)(11) - Drawn
 
8.80% (L + 6.50%/Q)
 
12/19/2016
 
12/20/2022
 
2,102

 
2,093

 
2,097

 
 
 
 
 
 
 
 
 
 
 
 
27,957

 
27,841

 
27,887

 
2.70
 %
Trader Interactive, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.85% (L + 6.00%/M)
 
6/15/2017
 
6/17/2024
 
27,122

 
26,937

 
26,919

 
2.61
 %
TW-NHME Holdings Corp. (20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (4)(10)
 
11.55% (L + 9.25%/Q)
 
7/14/2015
 
7/14/2022
 
21,500

 
21,309

 
20,702

 
 
 
 
Second lien (3)(10)
 
11.55% (L + 9.25%/Q)
 
7/14/2015
 
7/14/2022
 
5,800

 
5,740

 
5,585

 
 
 
 
 
 
 
 
 
 
 
 
27,300

 
27,049

 
26,287

 
2.54
 %
Keystone Acquisition Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)
 
7.55% (L + 5.25%/Q)
 
5/10/2017
 
5/1/2024
 
19,900

 
19,720

 
20,024

 
 
 
 
Second lien (3)
 
11.55% (L + 9.25%/Q)
 
5/10/2017
 
5/1/2025
 
4,500

 
4,458

 
4,556

 
 
 
 
 
 
 
 
 
 
 
 
24,400

 
24,178

 
24,580

 
2.38
 %
iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (4)(10)
 
9.14% (L + 7.25%/M)
 
8/4/2015
 
8/4/2022
 
17,550

 
17,430

 
17,550

 
 
 
 
First lien (4)(10)
 
8.06% (L + 6.25%/M)
 
6/16/2017
 
8/4/2022
 
4,566

 
4,546

 
4,543

 
 
 
 
First lien (2)(10)
 
8.04% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
1,158

 
1,153

 
1,152

 
 
 
 
First lien (4)(10)
 
8.04% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
509

 
507

 
507

 
 
 
 
 
 
 
 
 
 
 
 
23,783

 
23,636

 
23,752

 
2.30
 %

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, 2018
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (2)(10)
 
9.92% (L + 8.25%/M)
 
9/30/2015
 
9/30/2020
 
$
22,971

 
$
22,781

 
$
22,971

 
2.22
 %
TWDiamondback Holdings Corp. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diamondback Drugs of Delaware, L.L.C. (TWDiamondback II Holdings LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (4)(10)
 
11.22% (L + 8.75%/Q)
 
11/19/2014
 
11/19/2019
 
19,895

 
19,895

 
19,895

 
 
 
 
First lien (3)(10)
 
10.79% (L + 8.75%/Q)
 
11/19/2014
 
11/19/2019
 
2,158

 
2,158

 
2,158

 
 
 
 
First lien (4)(10)
 
10.79% (L + 8.75%/Q)
 
11/19/2014
 
11/19/2019
 
605

 
605

 
605

 
 
 
 
 
 
 
 
 
 
 
 
22,658

 
22,658

 
22,658

 
2.19
 %
EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.30% (L + 6.00%/Q)
 
7/30/2015
 
6/30/2021
 
20,839

 
20,715

 
20,839

 
 
 
 
First lien (2)(10)
 
8.30% (L + 6.00%/Q)
 
7/30/2015
 
6/30/2021
 
1,205

 
1,197

 
1,205

 
 
 
 
 
 
 
 
 
 
 
 
22,044

 
21,912

 
22,044

 
2.13
 %
Avatar Topco, Inc. (23)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EAB Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Second lien (3)
 
9.23% (L + 7.50%/Q)
 
11/17/2017
 
11/17/2025
 
21,450

 
21,139

 
21,450

 
2.08
 %
DigiCert Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
 9.77% (L + 8.00%/M)
 
9/20/2017
 
10/31/2025
 
20,176

 
20,079

 
20,378

 
1.97
 %
OEConnection LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
10.46% (L + 8.00%/Q)
 
11/22/2017
 
11/22/2025
 
20,213

 
19,943

 
20,213

 
1.96
 %
Help/Systems Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (5)
 
10.05% (L+ 7.75%/Q)
 
3/23/2018
 
3/27/2026
 
20,231

 
20,130

 
20,130

 
1.95
 %
DiversiTech Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
Second lien (3)
 
9.81% (L + 7.50%/Q)
 
5/18/2017
 
6/2/2025
 
19,500

 
19,319

 
19,744

 
1.91
 %
ABILITY Network Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Information Technology
 
Second lien (3)
 
9.54% (L + 7.75%/M)
 
12/11/2017
 
12/12/2025
 
18,851

 
18,839

 
18,933

 
1.83
 %
AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (2)(10)
 
10.13% (L + 8.25%/M)
 
7/23/2014
 
7/23/2020
 
18,500

 
18,417

 
18,500

 
1.79
 %
KeyPoint Government Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (2)(10)
 
7.73% (L + 6.00%/M)
 
4/18/2017
 
4/18/2024
 
18,173

 
18,012

 
18,355

 
1.78
 %
BackOffice Associates Holdings, L.L.C.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
9.38% (L + 7.50%/M)
 
8/25/2017
 
8/25/2023
 
18,502

 
18,354

 
18,341

 
1.78
 %
SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (4)(10)
 
11.05% (L + 8.75%/Q)
 
6/30/2015
 
12/30/2021
 
18,161

 
18,030

 
18,260

 
1.77
 %
VF Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)(10)
 
10.88% (L + 9.00%/M)
 
7/7/2016
 
6/28/2024
 
17,086

 
17,387

 
17,427

 
1.69
 %
DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)(10)
 
7.56% (L + 5.25%/Q)
 
7/2/2015
 
7/2/2021
 
17,408

 
17,306

 
17,408

 
1.69
 %
TIBCO Software Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Subordinated (3)
 
11.38%/S
 
11/24/2014
 
12/1/2021
 
15,000

 
14,729

 
16,359

 
1.58
 %
Hill International, Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.63% (L + 5.75%/M)
 
6/21/2017
 
6/21/2023
 
15,682

 
15,611

 
15,603

 
1.51
 %
FR Arsenal Holdings II Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
9.31% (L + 7.25%/Q)
 
9/29/2016
 
9/8/2022
 
15,317

 
15,189

 
15,348

 
1.49
 %
Netsmart Inc. / Netsmart Technologies, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Information Technology
 
Second lien (2)
 
11.38% (L + 9.50%/Q)
 
4/18/2016
 
10/19/2023
 
15,000

 
14,695

 
15,075

 
1.46
 %
Xactly Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (4)(10)
 
9.14% (L + 7.25%/M)
 
7/31/2017
 
7/29/2022
 
14,690

 
14,557

 
14,543

 
1.41
 %

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, 2018
(in thousands, except shares)
(unaudited)

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Transcendia Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Packaging
 
Second lien (3)
 
9.88% (L + 8.00%/M)
 
6/28/2017
 
5/30/2025
 
$
14,500

 
$
14,313

 
$
14,391

 
1.39
 %
Peraton Holding Corp. (fka MHVC Acquisition Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (2)
 
7.56% (L + 5.25%/Q)
 
4/25/2017
 
4/29/2024
 
13,994

 
13,953

 
14,099

 
1.36
 %
Ministry Brands, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)
 
6.88% (L + 5.00%/M)
 
12/7/2016
 
12/2/2022
 
2,985

 
2,973

 
2,985

 
 
 
 
Second lien (3)(10)
 
11.13% (L + 9.25%/M)
 
12/7/2016
 
6/2/2023
 
7,840

 
7,790

 
7,840

 
 
 
 
Second lien (3)(10)
 
11.13% (L + 9.25%/M)
 
12/7/2016
 
6/2/2023
 
2,160

 
2,146

 
2,160

 
 
 
 
First lien (3)(10)(11) - Drawn
 
6.78% (L + 5.00%/Q)
 
12/7/2016
 
12/2/2022
 
600

 
597

 
600

 
 
 
 
 
 
 
 
 
 
 
 
13,585

 
13,506

 
13,585

 
1.32
 %
Project Accelerate Parent, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)(10)
 
10.19% (L + 8.50%/Q)
 
1/2/2018
 
1/2/2026
 
13,473

 
13,308

 
13,305

 
1.29
 %
American Tire Distributors, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
Subordinated (3)
 
10.25%/S
 
2/10/2015
 
3/1/2022
 
12,520

 
12,279

 
12,849

 
1.24
 %
nThrive, Inc. (fka Precyse Acquisition Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (2)(10)
 
11.63% (L + 9.75%/M)
 
4/19/2016
 
4/20/2023
 
13,000

 
12,820

 
12,574

 
1.22
 %
SSH Group Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (2)(10)
 
7.45% (L + 5.00%/Q)
 
10/13/2017
 
10/2/2024
 
8,386

 
8,346

 
8,344

 
 
 
 
Second lien (3)(10)
 
11.45% (L + 9.00%/Q)
 
10/13/2017
 
10/2/2025
 
3,363

 
3,330

 
3,329

 
 
 
 
 
 
 
 
 
 
 
 
11,749

 
11,676

 
11,673

 
1.13
 %
ProQuest LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
10.88% (L + 9.00%/M)
 
12/14/2015
 
12/15/2022
 
11,620

 
11,447

 
11,620

 
1.12
 %
Zywave, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (4)(10)
 
 10.87% (L + 9.00%/Q)
 
11/22/2016
 
11/17/2023
 
11,000

 
10,929

 
11,022

 
 
 
 
First lien (3)(10)(11) - Drawn
 
6.57% (L + 5.00%/Q)
 
11/22/2016
 
11/17/2022
 
500

 
496

 
500

 
 
 
 
 
 
 
 
 
 
 
 
11,500

 
11,425

 
11,522

 
1.12
 %
Amerijet Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (4)(10)
 
9.65% (L + 8.00%/M)
 
7/15/2016
 
7/15/2021
 
9,455

 
9,405

 
9,494

 
 
 
 
First lien (4)(10)
 
9.65% (L + 8.00%/M)
 
7/15/2016