Table of Contents

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


 

x      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the Quarter Ended March 31, 2015

 

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 x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 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 x

 

Accelerated filer ¨

 

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 x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock.

 

Description

 

Shares as of May 5, 2015

Common stock, $0.01 par value

 

58,075,605

 

 

 



Table of Contents

 

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2015

TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

PART I. FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements

3

 

 

 

 

New Mountain Finance Corporation

 

 

Consolidated Statements of Assets and Liabilities as of March 31, 2015 (unaudited) and December 31, 2014 (unaudited)

3

 

Consolidated Statements of Operations for the three months ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)

4

 

Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)

5

 

Consolidated Statements of Cash Flows for the three months ended March 31, 2015 (unaudited) and March 31, 2014 (unaudited)

6

 

Consolidated Schedule of Investments as of March 31, 2015 (unaudited)

7

 

Consolidated Schedule of Investments as of December 31, 2014

15

 

 

 

 

Notes to the Consolidated Financial Statements of New Mountain Finance Corporation

23

 

 

 

 

Report of Independent Registered Public Accounting Firm

50

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

51

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

73

Item 4.

Controls and Procedures

74

 

 

 

PART II. OTHER INFORMATION

75

 

 

 

Item 1.

Legal Proceedings

75

Item 1A.

Risk Factors

75

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

75

Item 3.

Defaults Upon Senior Securities

75

Item 4.

Mine Safety Disclosures

75

Item 5.

Other Information

75

Item 6.

Exhibits

76

 

Signatures

78

 

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, 2015

 

December 31, 2014

 

Assets

 

 

 

 

 

Investments at fair value

 

 

 

 

 

Non-controlled/non-affiliated investments (cost of $1,314,123 and $1,422,891, respectively)

 

$

1,292,569

 

$

1,402,210

 

Non-controlled/affiliated investments (cost $66,846 and $23,000, respectively)

 

64,846

 

22,461

 

Controlled investments (cost $40,519 and $0, respectively)

 

47,339

 

 

Total investments at fair value (cost $1,421,488 and $1,445,891, respectively)

 

1,404,754

 

1,424,671

 

Securities purchased under collateralized agreements to resell

 

30,000

 

30,000

 

Cash and cash equivalents

 

22,152

 

23,445

 

Interest and dividend receivable

 

14,489

 

11,744

 

Deferred financing costs (net of accumulated amortization of $6,539 and $5,867, respectively)

 

13,390

 

14,052

 

Receivable from affiliates

 

631

 

490

 

Receivable from unsettled securities sold

 

 

8,912

 

Other assets

 

2,166

 

1,606

 

Total assets

 

$

1,487,582

 

$

1,514,920

 

Liabilities

 

 

 

 

 

Holdings Credit Facility

 

$

442,608

 

$

468,108

 

Convertible Notes

 

115,000

 

115,000

 

NMFC Credit Facility

 

68,800

 

50,000

 

SBA-guaranteed debentures

 

37,500

 

37,500

 

Management fee payable

 

5,086

 

5,144

 

Incentive fee payable

 

4,878

 

4,803

 

Interest payable

 

2,707

 

1,352

 

Deferred tax liability

 

994

 

493

 

Capital gains incentive fee payable

 

481

 

 

Payable to affiliates

 

241

 

822

 

Payable for unsettled securities purchased

 

 

26,460

 

Other liabilities

 

2,788

 

3,068

 

Total liabilities

 

681,083

 

712,750

 

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, and 58,075,605 and 57,997,890 shares issued and outstanding, respectively

 

581

 

580

 

Paid in capital in excess of par

 

818,262

 

817,129

 

Accumulated undistributed net investment income

 

1,873

 

2,530

 

Accumulated undistributed net realized gains on investments

 

13,998

 

14,131

 

Net unrealized (depreciation) appreciation of investments (net of provision for taxes of $994 and $493, respectively)

 

(28,215

)

(32,200

)

Total net assets

 

$

806,499

 

$

802,170

 

Total liabilities and net assets

 

$

1,487,582

 

$

1,514,920

 

Number of shares outstanding

 

58,075,605

 

57,997,890

 

Net asset value per share

 

$

13.89

 

$

13.83

 

 

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, 2015

 

March 31, 2014

 

Investment income

 

 

 

 

 

From non-controlled/non-affiliated investments:

 

 

 

 

 

Interest income

 

$

31,854

 

$

 

Dividend income

 

(99

)

 

Other income

 

1,557

 

 

From non-controlled/affiliated investments:

 

 

 

 

 

Interest income

 

1,043

 

 

Dividend income

 

858

 

 

Other income

 

314

 

 

From controlled investments:

 

 

 

 

 

Interest income

 

450

 

 

Dividend income

 

548

 

 

Other income

 

11

 

 

Investment income allocated from New Mountain Finance Holdings, L.L.C.

 

 

 

 

 

Interest income

 

 

27,668

 

Dividend income

 

 

2,089

 

Other income

 

 

682

 

Total investment income

 

36,536

 

30,439

 

Expenses

 

 

 

 

 

Incentive fee

 

4,878

 

 

Capital gains incentive fee

 

481

 

 

Total incentive fees

 

5,359

 

 

Management fee

 

6,468

 

 

Interest and other financing expenses

 

5,477

 

 

Professional fees

 

739

 

 

Administrative expenses

 

635

 

 

Other general and administrative expenses

 

429

 

 

Net expenses allocated from New Mountain Finance Holdings, L.L.C.

 

 

14,381

 

Total expenses

 

19,107

 

14,381

 

Less: management fee waived (see Note 5)

 

(1,382

)

 

Less: expenses waived and reimbursed (see Note 5)

 

(400

)

 

Net expenses

 

17,325

 

14,381

 

Net investment income before income taxes

 

19,211

 

16,058

 

Income tax expense

 

149

 

 

Net investment income

 

19,062

 

16,058

 

Net realized (losses) gains:

 

 

 

 

 

Non-controlled/non-affiliated investments

 

(133

)

 

Investments allocated from New Mountain Finance Holdings, L.L.C.

 

 

2,708

 

Net change in unrealized (depreciation) appreciation:

 

 

 

 

 

Non-controlled/non-affiliated investments

 

(1,462

)

 

Non-controlled/affiliated investments

 

(872

)

 

Controlled investments

 

6,820

 

 

Investments allocated from New Mountain Finance Holdings, L.L.C.

 

 

4,682

 

Provision for taxes

 

(501

)

 

Net increase in net assets resulting from operations

 

22,914

 

23,448

 

Basic earnings per share

 

$

0.40

 

$

0.50

 

Weighted average shares of common stock outstanding—basic (see Note 11)

 

57,998,754

 

47,066,216

 

Diluted earnings per share

 

$

0.37

 

$

0.50

 

Weighted average shares of common stock outstanding—diluted (see Note 11)

 

65,217,837

 

47,066,216

 

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)

(unaudited)

 

 

 

Three months ended

 

 

 

March 31, 2015

 

March 31, 2014

 

Increase (decrease) in net assets resulting from operations:

 

 

 

 

 

Net investment income

 

$

19,062

 

$

 

Net investment income allocated from New Mountain Finance Holdings, L.L.C.

 

 

16,058

 

Net realized losses on investments

 

(133

)

 

Net realized gains on investments allocated from New Mountain Finance Holdings, L.L.C.

 

 

2,708

 

Net change in unrealized appreciation (depreciation) of investments

 

4,486

 

 

Net change in unrealized appreciation (depreciation) of investments allocated from New Mountain Finance Holdings, L.L.C.

 

 

4,682

 

Provision for taxes

 

(501

)

 

Net increase in net assets resulting from operations

 

22,914

 

23,448

 

Capital transactions

 

 

 

 

 

Value of shares issued for exchanged units

 

 

38,840

 

Dividends declared to stockholders from net investment income

 

(19,719

)

(16,058

)

Dividends declared to stockholders from net realized gains

 

 

(227

)

Reinvestment of dividends

 

1,134

 

1,038

 

Total net (decrease) increase in net assets resulting from capital transactions

 

(18,585

)

23,593

 

Net increase in net assets

 

4,329

 

47,041

 

Net assets at the beginning of the period

 

802,170

 

650,107

 

Net assets at the end of the period

 

$

806,499

 

$

697,148

 

 

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, 2015

 

March 31, 2014

 

Cash flows from operating activities

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

22,914

 

$

23,448

 

Adjustments to reconcile net (increase) decrease in net assets resulting from operations to net cash (used in) provided by operating activities:

 

 

 

 

 

Net investment income allocated from New Mountain Finance Holdings, L.L.C.

 

 

(16,058

)

Net realized losses on investments

 

133

 

 

Net realized gains on investments allocated from New Mountain Finance Holdings, L.L.C.

 

 

(2,708

)

Net change in unrealized (appreciation) depreciation of investments

 

(4,486

)

 

Net change in unrealized (appreciation) depreciation of investments allocated from New Mountain Finance Holdings, L.L.C.

 

 

(4,682

)

Amortization of purchase discount

 

(596

)

 

Amortization of deferred financing costs

 

672

 

 

Non-cash investment income

 

(1,178

)

 

(Increase) decrease in operating assets:

 

 

 

 

 

Purchase of investments and delayed draw facilities

 

(67,236

)

 

Proceeds from sales and paydowns of investments

 

93,280

 

 

Cash paid on drawn revolvers

 

(190

)

 

Cash repayments on drawn revolvers

 

190

 

 

Interest and dividend receivable

 

(2,745

)

 

Receivable from affiliates

 

(141

)

 

Receivable from unsettled securities sold

 

8,912

 

 

Other assets

 

(560

)

 

Distributions from New Mountain Finance Holdings, L.L.C.

 

 

15,247

 

Increase (decrease) in operating liabilities:

 

 

 

 

 

Management fee payable

 

(58

)

 

Incentive fee payable

 

75

 

 

Interest payable

 

1,355

 

 

Deferred tax liability

 

501

 

 

Capital gains incentive fee payable

 

481

 

 

Payable to affiliates

 

(581

)

 

Payable for unsettled securities purchased

 

(26,460

)

 

Other liabilities

 

(11

)

 

Net cash flows provided by (used in) operating activities

 

24,271

 

15,247

 

Cash flows from financing activities

 

 

 

 

 

Dividends paid

 

(18,585

)

(15,247

)

Offering costs paid

 

(20

)

 

Proceeds from Holdings Credit Facility

 

49,100

 

 

Repayment of Holdings Credit Facility

 

(74,600

)

 

Proceeds from NMFC Credit Facility

 

51,300

 

 

Repayment of NMFC Credit Facility

 

(32,500

)

 

Deferred financing costs paid

 

(259

)

 

Net cash flows (used in) provided by financing activities

 

(25,564

)

(15,247

)

Net (decrease) increase in cash and cash equivalents

 

(1,293

)

 

Cash and cash equivalents at the beginning of the period

 

23,445

 

 

Cash and cash equivalents at the end of the period

 

$

22,152

 

$

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Cash interest paid

 

$

3,308

 

$

 

Income taxes paid

 

3

 

 

Non-cash operating activities:

 

 

 

 

 

Non-cash activity on investments

 

$

41,275

 

$

 

Non-cash financing activities:

 

 

 

 

 

New Mountain Finance AIV Holdings Corporation exchange of New Mountain Finance Holdings, L.L.C. units for shares

 

$

 

$

38,840

 

Value of shares issued in connection with dividend reinvestment plan

 

1,134

 

1,038

 

Accrual for offering costs

 

496

 

 

Accrual for deferred financing costs

 

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, 2015
(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and
Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par
Value
or Shares

 

Cost

 

Fair
Value

 

Percent
of
Net
Assets

 

Non-Controlled/Non-Affiliated Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funded Debt Investments—Australia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Project Sunshine IV Pty Ltd**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien(2)

 

8.00% (Base Rate + 7.00%)

 

9/23/2019

 

$

15,689

 

$

15,608

 

$

15,866

 

1.97

%

Total Funded Debt Investments—Australia

 

 

 

 

 

 

 

$

15,689

 

$

15,608

 

$

15,866

 

1.97

%

Funded Debt Investments—Luxembourg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pinnacle Holdco S.à.r.l. / Pinnacle (US) Acquisition Co Limited**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.50% (Base Rate + 9.25%)

 

7/30/2020

 

$

24,630

 

$

24,324

 

$

21,879

 

 

 

 

 

Second lien(3)

 

10.50% (Base Rate + 9.25%)

 

7/30/2020

 

8,204

 

8,319

 

7,288

 

 

 

 

 

 

 

 

 

 

 

32,834

 

32,643

 

29,167

 

3.62

%

Evergreen Skills Lux S.À.R.L.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Second lien(3)

 

9.25% (Base Rate + 8.25%)

 

4/28/2022

 

3,000

 

2,928

 

2,830

 

0.35

%

Total Funded Debt Investments—Luxembourg

 

 

 

 

 

 

 

$

35,834

 

$

35,571

 

$

31,997

 

3.97

%

Funded Debt Investments—Netherlands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eiger Acquisition B.V. (Eiger Co-Borrower, LLC)**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(3)

 

10.13% (Base Rate + 9.13%)

 

2/17/2023

 

$

10,000

 

$

9,257

 

$

9,050

 

1.12

%

Total Funded Debt Investments—Netherlands

 

 

 

 

 

 

 

$

10,000

 

$

9,257

 

$

9,050

 

1.12

%

Funded Debt Investments—United Kingdom

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Air Newco LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(3)

 

10.50% (Base Rate + 9.50%)

 

1/31/2023

 

$

30,000

 

$

29,251

 

$

28,650

 

3.55

%

Total Funded Debt Investments—United Kingdom

 

 

 

 

 

 

 

$

30,000

 

$

29,251

 

$

28,650

 

3.55

%

Funded Debt Investments—United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TIBCO Software Inc.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien(2)

 

6.50% (Base Rate + 5.50%)

 

12/4/2020

 

$

30,000

 

$

28,563

 

$

30,050

 

 

 

 

 

Subordinated(3)

 

11.38%

 

12/1/2021

 

15,000

 

14,577

 

15,244

 

 

 

 

 

 

 

 

 

 

 

45,000

 

43,140

 

45,294

 

5.62

%

Deltek, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.00% (Base Rate + 8.75%)

 

10/10/2019

 

40,000

 

39,991

 

40,450

 

 

 

 

 

Second lien(3)

 

10.00% (Base Rate + 8.75%)

 

10/10/2019

 

1,000

 

990

 

1,011

 

 

 

 

 

 

 

 

 

 

 

41,000

 

40,981

 

41,461

 

5.14

%

Ascend Learning, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

6.00% (Base Rate + 5.00%)

 

7/31/2019

 

10,823

 

10,780

 

10,869

 

 

 

 

 

Second lien(3)

 

9.50% (Base Rate + 8.50%)

 

11/30/2020

 

29,000

 

28,884

 

28,927

 

 

 

 

 

 

 

 

 

 

 

39,823

 

39,664

 

39,796

 

4.94

%

Kronos Incorporated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

9.75% (Base Rate + 8.50%)

 

4/30/2020

 

32,641

 

32,415

 

33,539

 

 

 

 

 

Second lien(3)

 

9.75% (Base Rate + 8.50%)

 

4/30/2020

 

5,000

 

4,956

 

5,138

 

 

 

 

 

 

 

 

 

 

 

37,641

 

37,371

 

38,677

 

4.80

%

McGraw-Hill Global Education Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)(9)

 

9.75%

 

4/1/2021

 

24,500

 

24,366

 

27,195

 

 

 

 

 

First lien(2)

 

5.75% (Base Rate + 4.75%)

 

3/22/2019

 

9,838

 

9,628

 

9,939

 

 

 

 

 

 

 

 

 

 

 

34,338

 

33,994

 

37,134

 

4.60

%

Envision Acquisition Company, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Second lien(2)

 

9.75% (Base Rate + 8.75%)

 

11/4/2021

 

26,000

 

25,609

 

26,893

 

 

 

 

 

Second lien(3)

 

9.75% (Base Rate + 8.75%)

 

11/4/2021

 

9,250

 

9,307

 

9,568

 

 

 

 

 

 

 

 

 

 

 

35,250

 

34,916

 

36,461

 

4.52

%

Tolt Solutions, Inc.(15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien(2)

 

7.00% (Base Rate + 6.00%)

 

3/7/2019

 

18,443

 

18,443

 

17,965

 

 

 

 

 

First lien(2)

 

12.00% (Base Rate + 11.00%)

 

3/7/2019

 

18,800

 

18,800

 

18,344

 

 

 

 

 

 

 

 

 

 

 

37,243

 

37,243

 

36,309

 

4.50

%

Acrisure, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(2)

 

11.50% (Base Rate + 10.50%)

 

3/31/2020

 

35,175

 

34,859

 

35,602

 

4.41

%

 

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, 2015
(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and
Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par
Value
or Shares

 

Cost

 

Fair
Value

 

Percent
of
Net
Assets

 

Hill International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien(2)

 

7.75% (Base Rate + 6.75%)

 

9/26/2020

 

$

34,825

 

$

34,500

 

$

34,216

 

4.24

%

Meritas Schools Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

7.00% (Base Rate + 5.75%)

 

6/25/2019

 

21,603

 

21,441

 

21,711

 

 

 

 

 

Second lien(2)

 

10.00% (Base Rate + 9.00%)

 

1/23/2021

 

12,000

 

11,946

 

12,090

 

 

 

 

 

 

 

 

 

 

 

33,603

 

33,387

 

33,801

 

4.19

%

TASC, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

7.00% (Base Rate + 6.00%)

 

5/22/2020

 

30,782

 

30,393

 

31,244

 

 

 

 

 

Second lien(3)

 

12.00%

 

5/21/2021

 

2,000

 

1,961

 

2,120

 

 

 

 

 

 

 

 

 

 

 

32,782

 

32,354

 

33,364

 

4.14

%

SRA International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

31,765

 

31,103

 

31,953

 

3.96

%

Navex Global, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien(4)

 

5.75% (Base Rate + 4.75%)

 

11/19/2021

 

10,521

 

10,419

 

10,494

 

 

 

 

 

First lien(2)

 

5.75% (Base Rate + 4.75%)

 

11/19/2021

 

4,442

 

4,399

 

4,431

 

 

 

 

 

Second lien(4)

 

9.75% (Base Rate + 8.75%)

 

11/18/2022

 

11,953

 

11,836

 

11,834

 

 

 

 

 

Second lien(3)

 

9.75% (Base Rate + 8.75%)

 

11/18/2022

 

5,047

 

4,998

 

4,996

 

 

 

 

 

 

 

 

 

 

 

31,963

 

31,652

 

31,755

 

3.94

%

Rocket Software, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.25% (Base Rate + 8.75%)

 

2/8/2019

 

30,875

 

30,762

 

30,991

 

3.84

%

CompassLearning, Inc.(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

8.00% (Base Rate + 6.75%)

 

11/26/2018

 

30,000

 

29,424

 

29,088

 

3.61

%

Aderant North America, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.00% (Base Rate + 8.75%)

 

6/20/2019

 

24,000

 

23,773

 

24,060

 

 

 

 

 

Second lien(3)

 

10.00% (Base Rate + 8.75%)

 

6/20/2019

 

5,000

 

5,071

 

5,013

 

 

 

 

 

 

 

 

 

 

 

29,000

 

28,844

 

29,073

 

3.60

%

KeyPoint Government Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

7.75% (Base Rate + 6.50%)

 

11/13/2017

 

28,475

 

28,113

 

28,333

 

3.51

%

Transtar Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Second lien(2)

 

10.00% (Base Rate + 8.75%)

 

10/9/2019

 

28,300

 

27,922

 

27,805

 

3.45

%

Pelican Products, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Products

 

Second lien(3)

 

9.25% (Base Rate + 8.25%)

 

4/9/2021

 

15,500

 

15,528

 

15,423

 

 

 

 

 

Second lien(2)

 

9.25% (Base Rate + 8.25%)

 

4/9/2021

 

10,000

 

10,121

 

9,950

 

 

 

 

 

 

 

 

 

 

 

25,500

 

25,649

 

25,373

 

3.15

%

YP Holdings LLC(10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien(2)

 

8.00% (Base Rate + 6.75%)

 

6/4/2018

 

24,173

 

23,939

 

24,535

 

3.04

%

CRGT Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

7.50% (Base Rate + 6.50%)

 

12/19/2020

 

24,844

 

24,603

 

24,440

 

3.03

%

Confie Seguros Holding II Co.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Second lien(2)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

18,886

 

18,786

 

18,862

 

 

 

 

 

Second lien(3)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

5,571

 

5,647

 

5,564

 

 

 

 

 

 

 

 

 

 

 

24,457

 

24,433

 

24,426

 

3.03

%

PetVet Care Centers LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Second lien(3)

 

9.75% (Base Rate + 8.75%)

 

6/17/2021

 

24,000

 

23,768

 

23,760

 

2.95

%

Aricent Technologies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(2)

 

9.50% (Base Rate + 8.50%)

 

4/14/2022

 

20,000

 

19,872

 

20,200

 

 

 

 

 

Second lien(3)

 

9.50% (Base Rate + 8.50%)

 

4/14/2022

 

2,550

 

2,558

 

2,576

 

 

 

 

 

 

 

 

 

 

 

22,550

 

22,430

 

22,776

 

2.82

%

McGraw-Hill School Education Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

6.25% (Base Rate + 5.00%)

 

12/18/2019

 

21,725

 

21,547

 

21,814

 

2.70

%

Weston Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated(4)

 

16.00% (11.50% + 4.50% PIK)*

 

7/3/2019

 

20,688

 

20,688

 

21,080

 

2.61

%

Aspen Dental Management, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien(2)

 

7.00% (Base Rate + 5.50%)

 

10/6/2016

 

20,808

 

20,666

 

20,860

 

2.59

%

American Pacific Corporation**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Chemicals and Materials

 

First lien(2)

 

7.00% (Base Rate + 6.00%)

 

2/27/2019

 

19,800

 

19,679

 

19,940

 

2.47

%

TWDiamondback Holdings Corp.(8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diamondback Drugs of Delaware, L.L.C.(TWDiamondback II Holdings LLC)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

First lien(4)

 

9.75% (Base Rate + 8.75%)

 

11/19/2019

 

19,895

 

19,895

 

19,895

 

2.47

%

 

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, 2015
(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and
Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par
Value
or Shares

 

Cost

 

Fair
Value

 

Percent
of
Net
Assets

 

Sierra Hamilton LLC / Sierra Hamilton Finance, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien(2)

 

12.25%

 

12/15/2018

 

$

25,000

 

$

25,000

 

$

19,375

 

2.40

%

Novitex Acquisition, LLC (fka ARSloane Acquisition, LLC)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien(2)

 

7.50% (Base Rate + 6.25%)

 

7/7/2020

 

19,900

 

19,551

 

18,905

 

2.34

%

First American Payment Systems, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(2)

 

10.75% (Base Rate + 9.50%)

 

4/12/2019

 

18,643

 

18,382

 

18,504

 

2.29

%

AgKnowledge Holdings Company, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(2)

 

9.25% (Base Rate + 8.25%)

 

7/23/2020

 

18,500

 

18,332

 

17,899

 

2.22

%

Vertafore, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

9.75% (Base Rate + 8.25%)

 

10/27/2017

 

13,855

 

13,851

 

13,980

 

 

 

 

 

Second lien(3)

 

9.75% (Base Rate + 8.25%)

 

10/27/2017

 

2,000

 

2,017

 

2,018

 

 

 

 

 

 

 

 

 

 

 

15,855

 

15,868

 

15,998

 

1.98

%

MailSouth, Inc. (d/b/a Mspark)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien(2)

 

6.75% (Base Rate + 4.99%)

 

12/14/2016

 

16,778

 

16,261

 

15,855

 

1.97

%

Edmentum, Inc. (fka Plato, Inc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

Second lien(2)

 

11.25% (Base Rate + 9.75%)(7)

 

5/17/2019

 

25,000

 

24,728

 

12,500

 

 

 

 

 

Second lien(3)

 

11.25% (Base Rate + 9.75%)(7)

 

5/17/2019

 

6,150

 

6,043

 

3,075

 

 

 

 

 

 

 

 

 

 

 

31,150

 

30,771

 

15,575

 

1.93

%

GSDM Holdings Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Subordinated(4)

 

10.00%

 

6/23/2020

 

15,000

 

14,865

 

14,782

 

1.83

%

eResearchTechnology, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien(2)

 

6.00% (Base Rate + 4.75%)

 

5/2/2018

 

14,059

 

13,690

 

14,059

 

1.74

%

Vision Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

9.50% (Base Rate + 8.00%)

 

7/23/2017

 

14,000

 

13,969

 

13,930

 

1.73

%

Permian Tank & Manufacturing, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien(2)

 

10.50%

 

1/15/2018

 

24,357

 

24,540

 

13,640

 

1.69

%

Smile Brands Group Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien(2)

 

7.50% (Base Rate + 6.25%)

 

8/16/2019

 

14,283

 

14,126

 

13,033

 

1.62

%

American Tire Distributors, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Subordinated(3)

 

10.25%

 

3/1/2022

 

10,000

 

10,000

 

10,450

 

1.30

%

PowerPlan Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.75% (Base Rate + 9.75%)

 

2/23/2023

 

10,000

 

9,901

 

9,900

 

1.23

%

Harley Marine Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Second lien(2)

 

10.50% (Base Rate + 9.25%)

 

12/20/2019

 

9,000

 

8,849

 

8,910

 

1.11

%

Vitera Healthcare Solutions, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien(2)

 

6.00% (Base Rate + 5.00%)

 

11/4/2020

 

1,975

 

1,959

 

1,982

 

 

 

 

 

Second lien(2)

 

9.25% (Base Rate + 8.25%)

 

11/4/2021

 

7,000

 

6,908

 

6,878

 

 

 

 

 

 

 

 

 

 

 

8,975

 

8,867

 

8,860

 

1.10

%

McKissock, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

QC McKissock Investment, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

7.50% (Base Rate + 6.50%)

 

8/5/2019

 

4,911

 

4,867

 

4,811

 

 

 

 

 

First lien(2)

 

7.50% (Base Rate + 6.50%)

 

8/5/2019

 

3,171

 

3,142

 

3,106

 

 

 

 

 

First lien(2)(11)—Drawn

 

7.50% (Base Rate + 6.50%)

 

8/5/2019

 

576

 

571

 

564

 

 

 

 

 

 

 

 

 

 

 

8,658

 

8,580

 

8,481

 

1.05

%

Physio-Control International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

First lien(2)

 

9.88%

 

1/15/2019

 

6,651

 

6,651

 

7,100

 

0.88

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

9.00% (Base Rate + 7.50%)

 

4/21/2017

 

7,419

 

7,368

 

6,603

 

0.82

%

Brock Holdings III, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Services

 

Second lien(2)

 

10.00% (Base Rate + 8.25%)

 

3/16/2018

 

7,000

 

6,939

 

6,580

 

0.82

%

Immucor, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Subordinated(2)(9)

 

11.13%

 

8/15/2019

 

5,000

 

4,958

 

5,394

 

0.67

%

Virtual Radiologic Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Information Technology

 

First lien(2)

 

7.25% (Base Rate + 5.50%)

 

12/22/2016

 

5,947

 

5,919

 

5,026

 

0.62

%

Packaging Coordinators, Inc.(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien(3)

 

9.00% (Base Rate + 8.00%)

 

8/1/2022

 

5,000

 

4,953

 

4,925

 

0.61

%

Learning Care Group (US) Inc.(17)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Learning Care Group (US) No. 2 Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

5.50% (Base Rate + 4.50%)

 

5/5/2021

 

4,454

 

4,414

 

4,482

 

0.56

%

 

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, 2015
(in thousands, except shares)

(unaudited)

 

Portfolio Company, Location and Industry(1)

 

Type of
Investment

 

Interest Rate

 

Maturity
Date

 

Principal
Amount,
Par Value
or Shares

 

Cost

 

Fair Value

 

Percent

of
Net
Assets

 

GCA Services Group, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(3)

 

9.25% (Base Rate + 8.00%)

 

11/1/2020

 

$

4,000

 

$

3,969

 

$

3,984

 

0.49

%

Sophia Holding Finance LP / Sophia Holding Finance Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Subordinated(3)

 

9.63%

 

12/1/2018

 

3,500

 

3,502

 

3,548

 

0.44

%

York Risk Services Holding Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated(3)

 

8.50%

 

10/1/2022

 

3,000

 

3,000

 

2,846

 

0.35

%

Synarc-Biocore Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Second lien(3)

 

9.25% (Base Rate + 8.25%)

 

3/10/2022

 

2,500

 

2,477

 

2,313

 

0.29

%

Education Management II LLC**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

5.50% (Base Rate + 4.50%)

 

7/2/2020