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 June 30, 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 August 5, 2015

Common stock, $0.01 par value

 

58,161,821

 

 

 



Table of Contents

 

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 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 June 30, 2015 (unaudited) and December 31, 2014 (unaudited)

3

 

Consolidated Statements of Operations for the three months and six months ended June 30, 2015 (unaudited) and June 30, 2014 (unaudited)

4

 

Consolidated Statements of Changes in Net Assets for the six months ended June 30, 2015 (unaudited) and June 30, 2014 (unaudited)

5

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2015 (unaudited) and June 30, 2014 (unaudited)

6

 

Consolidated Schedule of Investments as of June 30, 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

55

 

 

 

Item 2.

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

56

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

84

Item 4.

Controls and Procedures

85

 

 

PART II. OTHER INFORMATION

86

 

 

Item 1.

Legal Proceedings

86

Item 1A.

Risk Factors

86

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

86

Item 3.

Defaults Upon Senior Securities

86

Item 4.

Mine Safety Disclosures

86

Item 5.

Other Information

86

Item 6.

Exhibits

87

 

Signatures

89

 

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, 2015

 

December 31, 2014

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Investments at fair value

 

 

 

 

 

Non-controlled/non-affiliated investments (cost of $1,181,684 and $1,422,891, respectively)

 

$

1,172,100

 

$

1,402,210

 

Non-controlled/affiliated investments (cost $90,001 and $23,000, respectively)

 

89,601

 

22,461

 

Controlled investments (cost $40,437 and $0, respectively)

 

47,171

 

 

Total investments at fair value (cost $1,312,122 and $1,445,891, respectively)

 

1,308,872

 

1,424,671

 

Securities purchased under collateralized agreements to resell

 

30,000

 

30,000

 

Cash and cash equivalents

 

24,226

 

23,445

 

Deferred financing costs (net of accumulated amortization of $7,286 and $5,867, respectively)

 

13,994

 

14,052

 

Interest and dividend receivable

 

11,456

 

11,744

 

Receivable from affiliates

 

362

 

490

 

Receivable from unsettled securities sold

 

 

8,912

 

Other assets

 

3,191

 

1,606

 

Total assets

 

$

1,392,101

 

$

1,514,920

 

Liabilities

 

 

 

 

 

Holdings Credit Facility

 

$

359,858

 

$

468,108

 

Convertible Notes

 

115,000

 

115,000

 

SBA-guaranteed debentures

 

55,000

 

37,500

 

NMFC Credit Facility

 

38,000

 

50,000

 

Incentive fee payable

 

5,057

 

4,803

 

Management fee payable

 

4,951

 

5,144

 

Interest payable

 

1,360

 

1,352

 

Deferred tax liability

 

1,129

 

493

 

Capital gains incentive fee payable

 

490

 

 

Payable to affiliates

 

460

 

822

 

Payable for unsettled securities purchased

 

 

26,460

 

Other liabilities

 

2,470

 

3,068

 

Total liabilities

 

583,775

 

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 58,161,821 and 57,997,890 shares issued and outstanding, respectively

 

582

 

580

 

Paid in capital in excess of par

 

819,570

 

817,129

 

Accumulated undistributed net investment income

 

2,380

 

2,530

 

Accumulated undistributed net realized gains on investments

 

660

 

14,131

 

Net unrealized (depreciation) appreciation of investments (net of provision for taxes of $1,129 and $493, respectively)

 

(14,866

)

(32,200

)

Total net assets

 

$

808,326

 

$

802,170

 

Total liabilities and net assets

 

$

1,392,101

 

$

1,514,920

 

Number of shares outstanding

 

58,161,821

 

57,997,890

 

Net asset value per share

 

$

13.90

 

$

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

 

Six months ended

 

 

 

June 30, 2015

 

June 30, 2014

 

June 30, 2015

 

June 30, 2014

 

Investment income(1)

 

 

 

 

 

 

 

 

 

From non-controlled/non-affiliated investments:

 

 

 

 

 

 

 

 

 

Interest income

 

$

33,767

 

$

18,788

 

$

65,621

 

$

18,788

 

Dividend income

 

201

 

972

 

102

 

972

 

Other income

 

320

 

705

 

1,877

 

705

 

From non-controlled/affiliated investments:

 

 

 

 

 

 

 

 

 

Interest income

 

1,183

 

 

2,226

 

 

Dividend income

 

951

 

 

1,809

 

 

Other income

 

308

 

4

 

622

 

4

 

From controlled investments:

 

 

 

 

 

 

 

 

 

Interest income

 

520

 

 

970

 

 

Dividend income

 

643

 

 

1,191

 

 

Other income

 

12

 

 

23

 

 

Investment income allocated from New Mountain Finance Holdings, L.L.C.(2)

 

 

 

 

 

 

 

 

 

Interest income

 

 

12,847

 

 

40,515

 

Dividend income

 

 

279

 

 

2,368

 

Other income

 

 

113

 

 

795

 

Total investment income

 

37,905

 

33,708

 

74,441

 

64,147

 

Expenses

 

 

 

 

 

 

 

 

 

Incentive fee(1)

 

5,057

 

2,747

 

9,935

 

2,747

 

Capital gains incentive fee(1)

 

9

 

763

 

490

 

763

 

Total incentive fees(1)

 

5,066

 

3,510

 

10,425

 

3,510

 

Management fee(1)

 

6,198

 

2,742

 

12,666

 

2,742

 

Interest and other financing expenses(1)

 

5,598

 

2,559

 

11,075

 

2,559

 

Professional fees(1)

 

909

 

640

 

1,648

 

640

 

Administrative expenses(1)

 

522

 

360

 

1,157

 

360

 

Other general and administrative expenses(1)

 

453

 

239

 

882

 

239

 

Net expenses allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

6,427

 

 

20,808

 

Total expenses

 

18,746

 

16,477

 

37,853

 

30,858

 

Less: management fee waived (see Note 5) (1)

 

(1,247

)

 

(2,629

)

 

Less: expenses waived and reimbursed (see Note 5) (1)

 

 

(58

)

(400

)

(58

)

Net expenses

 

17,499

 

16,419

 

34,824

 

30,800

 

Net investment income before income taxes

 

20,406

 

17,289

 

39,617

 

33,347

 

Income tax expense(1)

 

153

 

 

302

 

 

Net investment income

 

20,253

 

17,289

 

39,315

 

33,347

 

Net realized (losses) gains:

 

 

 

 

 

 

 

 

 

Non-controlled/non-affiliated investments(1)

 

(13,338

)

(1,067

)

(13,471

)

(1,067

)

Investments allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

5,860

 

 

8,568

 

Net change in unrealized appreciation (depreciation):

 

 

 

 

 

 

 

 

 

Non-controlled/non-affiliated investments(1)

 

11,970

 

5,708

 

10,508

 

5,708

 

Non-controlled/affiliated investments(1)

 

1,600

 

 

728

 

 

Controlled investments(1)

 

(86

)

 

6,734

 

 

Investments allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

(3,742

)

 

940

 

Provision for taxes(1)

 

(135

)

(386

)

(636

)

(386

)

Net increase in net assets resulting from operations

 

20,264

 

23,662

 

43,178

 

47,110

 

Basic earnings per share

 

$

0.35

 

$

0.46

 

$

0.74

 

$

0.95

 

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

 

58,076,552

 

51,595,684

 

58,037,868

 

49,343,462

 

Diluted earnings per share

 

$

0.33

 

$

0.44

 

$

0.70

 

$

0.94

 

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

 

65,313,497

 

54,292,924

 

65,265,931

 

50,699,533

 

Dividends declared and paid per share

 

$

0.34

 

$

0.34

 

$

0.68

 

$

0.68

 

 


(1)         For the three and six months ended June 30, 2014, the amounts reported relate to the period from May 8, 2014 to June 30, 2014.

(2)         For the three and six months ended June 30, 2014, the amounts reported relate to the period from April 1, 2014 to May 7, 2014 and January 1, 2014 to May 7, 2014, respectively.

 

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)

 

 

 

Six months ended

 

 

 

June 30, 2015

 

June 30, 2014

 

Increase (decrease) in net assets resulting from operations:

 

 

 

 

 

Net investment income(1)

 

$

39,315

 

$

10,477

 

Net investment income allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

22,870

 

Net realized losses on investments(1)

 

(13,471

)

(1,067

)

Net realized gains on investments allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

8,568

 

Net change in unrealized appreciation (depreciation) of investments(1)

 

17,970

 

5,708

 

Net change in unrealized appreciation (depreciation) of investments allocated from New Mountain Finance Holdings, L.L.C.(2)

 

 

940

 

Provision for taxes(1)

 

(636

)

(386

)

Net increase in net assets resulting from operations

 

43,178

 

47,110

 

Capital transactions

 

 

 

 

 

Net proceeds from shares sold

 

 

58,644

 

Deferred offering costs(1)

 

59

 

 

Deferred offering costs allocated from New Mountain Finance Holdings, L.L.C.(2)

 

 

(250

)

Value of shares issued for exchanged units

 

 

38,840

 

Dividends declared to stockholders from net investment income

 

(39,465

)

(33,347

)

Dividends declared to stockholders from net realized gains

 

 

(615

)

Reinvestment of dividends

 

2,384

 

2,066

 

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

 

(37,022

)

65,338

 

Net increase in net assets

 

6,156

 

112,448

 

Net assets at the beginning of the period

 

802,170

 

650,107

 

Net assets at the end of the period

 

$

808,326

 

$

762,555

 

 


(1)         For the six months ended June 30, 2014, the amounts reported relate to the period from May 8, 2014 to June 30, 2014.

(2)         For the six months ended June 30, 2014, the amounts reported relate to the period from January 1, 2014 to May 7, 2014.

 

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, 2015

 

June 30, 2014

 

Cash flows from operating activities

 

 

 

 

 

Net increase in net assets resulting from operations

 

$

43,178

 

$

47,110

 

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

 

 

 

 

 

Net investment income allocated from New Mountain Finance Holdings, L.L.C.(2)

 

 

(22,870

)

Net realized losses on investments(1)

 

13,471

 

1,067

 

Net realized gains on investments allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

(8,568

)

Net change in unrealized (appreciation) depreciation of investments(1)

 

(17,970

)

(5,708

)

Net change in unrealized (appreciation) depreciation of investments allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

(940

)

Amortization of purchase discount(1)

 

(1,176

)

(405

)

Amortization of deferred financing costs(1)

 

1,419

 

336

 

Non-cash investment income(1)

 

(3,209

)

(261

)

(Increase) decrease in operating assets:

 

 

 

 

 

Cash and cash equivalents from New Mountain Finance Holdings, L.L.C.(3)

 

 

957

 

Purchase of investments and delayed draw facilities(1)

 

(187,045

)

(128,598

)

Proceeds from sales and paydowns of investments(1)

 

315,219

 

15,698

 

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities(1)

 

54

 

 

Cash paid for purchase of drawn portion of revolving credit facilities(1)

 

(3,050

)

 

Cash paid on drawn revolvers(1)

 

(970

)

 

Cash repayments on drawn revolvers(1)

 

475

 

380

 

Interest and dividend receivable(1)

 

288

 

(1,381

)

Receivable from affiliates(1)

 

128

 

378

 

Receivable from unsettled securities sold(1)

 

8,912

 

 

Other assets(1)

 

(1,162

)

(1,112

)

Purchase of investment in New Mountain Finance Holdings, L.L.C.(2)

 

 

(58,644

)

Distributions from New Mountain Finance Holdings, L.L.C.(2)

 

 

15,247

 

Increase (decrease) in operating liabilities:

 

 

 

 

 

Incentive fee payable(1)

 

254

 

(1,695

)

Management fee payable(1)

 

(193

)

(1,434

)

Interest payable(1)

 

8

 

1,195

 

Deferred tax liability(1)

 

636

 

386

 

Capital gains incentive fee payable(1)

 

490

 

763

 

Payable to affiliates(1)

 

(362

)

269

 

Payable for unsettled securities purchased(1)

 

(26,460

)

(6,428

)

Other liabilities(1)

 

(658

)

(306

)

Net cash flows provided by (used in) operating activities

 

142,277

 

(154,564

)

Cash flows from financing activities

 

 

 

 

 

Net proceeds from shares sold

 

 

58,644

 

Dividends paid

 

(37,081

)

(31,896

)

Offering costs paid(1)

 

(56

)

(166

)

Proceeds from Holdings Credit Facility(1)

 

138,750

 

108,469

 

Repayment of Holdings Credit Facility(1)

 

(247,000

)

(69,600

)

Proceeds from NMFC Credit Facility(1)

 

51,300

 

 

Repayment of NMFC Credit Facility(1)

 

(63,300

)

 

Proceeds from Convertible Notes(1)

 

 

115,000

 

Proceeds from SBA-guaranteed debentures(1)

 

17,500

 

 

Deferred financing costs paid(1)

 

(1,609

)

(4,222

)

Net cash flows (used in) provided by financing activities

 

(141,496

)

176,229

 

Net increase (decrease) in cash and cash equivalents

 

781

 

21,665

 

Cash and cash equivalents at the beginning of the period

 

23,445

 

 

Cash and cash equivalents at the end of the period

 

$

24,226

 

$

21,665

 

Supplemental disclosure of cash flow information

 

 

 

 

 

Cash interest paid

 

$

9,303

 

$

965

 

Income taxes paid

 

143

 

 

Non-cash operating activities:

 

 

 

 

 

Non-cash activity on investments

 

$

60,652

 

$

 

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

 

2,384

 

2,066

 

Accrual for offering costs(1)

 

824

 

1,293

 

Accrual for deferred financing costs(1)

 

127

 

776

 

Deferred offering costs allocated from New Mountain Finance Holdings, L.L.C.(2)

 

 

(250

)

 


(1)         For the six months ended June 30, 2014, the amounts reported relate to the period from May 8, 2014 to June 30, 2014.

(2)         For the six months ended June 30, 2014, the amounts reported relate to the period from January 1, 2014 to May 7, 2014.

(3)         Represents the cash and cash equivalent balance of New Mountain Finance Holdings, L.L.C.’s at the date of restructuring. See Note 1, Formation and Business Purpose.

 

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, 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

 

$

13,244

 

$

13,180

 

$

13,360

 

1.65

%

Total Funded Debt Investments—Australia

 

 

 

 

 

 

 

$

13,244

 

$

13,180

 

$

13,360

 

1.65

%

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

 

$

24,329

 

$

22,659

 

 

 

 

 

Second lien(3)

 

10.50% (Base Rate + 9.25%)

 

7/30/2020

 

8,204

 

8,321

 

7,547

 

 

 

 

 

 

 

 

 

 

 

32,834

 

32,650

 

30,206

 

3.74

%

Total Funded Debt Investments—Luxembourg

 

 

 

 

 

 

 

$

32,834

 

$

32,650

 

$

30,206

 

3.74

%

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

 

$

9,271

 

$

9,050

 

1.12

%

Total Funded Debt Investments—Netherlands

 

 

 

 

 

 

 

$

10,000

 

$

9,271

 

$

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

 

$

29,266

 

$

28,650

 

3.54

%

Total Funded Debt Investments—United Kingdom

 

 

 

 

 

 

 

$

30,000

 

$

29,266

 

$

28,650

 

3.54

%

Funded Debt Investments—United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TIBCO Software Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien(2)

 

6.50% (Base Rate + 5.50%)

 

12/4/2020

 

$

29,925

 

$

28,543

 

$

29,939

 

 

 

 

 

Subordinated(3)

 

11.38%

 

12/1/2021

 

15,000

 

14,589

 

14,963

 

 

 

 

 

 

 

 

 

 

 

44,925

 

43,132

 

44,902

 

5.56

%

Deltek, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(3)

 

9.50% (Base Rate + 8.50%)

 

6/26/2023

 

21,000

 

20,962

 

21,210

 

 

 

 

 

Second lien(2)

 

9.50% (Base Rate + 8.50%)

 

6/26/2023

 

20,000

 

19,610

 

20,200

 

 

 

 

 

 

 

 

 

 

 

41,000

 

40,572

 

41,410

 

5.12

%

Ascend Learning, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

5.50% (Base Rate + 4.50%)

 

7/31/2019

 

10,795

 

10,753

 

10,822

 

 

 

 

 

Second lien(3)

 

9.50% (Base Rate + 8.50%)

 

11/30/2020

 

29,000

 

28,888

 

28,946

 

 

 

 

 

 

 

 

 

 

 

39,795

 

39,641

 

39,768

 

4.92

%

Kronos Incorporated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

9.75% (Base Rate + 8.50%)

 

4/30/2020

 

32,641

 

32,424

 

33,641

 

 

 

 

 

Second lien(3)

 

9.75% (Base Rate + 8.50%)

 

4/30/2020

 

5,000

 

4,958

 

5,152

 

 

 

 

 

 

 

 

 

 

 

37,641

 

37,382

 

38,793

 

4.80

%

Tolt Solutions, Inc.(15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien(2)

 

7.00% (Base Rate + 6.00%)

 

3/7/2019

 

18,349

 

18,349

 

17,866

 

 

 

 

 

First lien(2)

 

12.00% (Base Rate + 11.00%)

 

3/7/2019

 

18,800

 

18,800

 

18,297

 

 

 

 

 

 

 

 

 

 

 

37,149

 

37,149

 

36,163

 

4.47

%

Hill International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien(2)

 

7.75% (Base Rate + 6.75%)

 

9/26/2020

 

34,738

 

34,425

 

34,520

 

4.27

%

TASC, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

7.00% (Base Rate + 6.00%)

 

5/22/2020

 

30,705

 

30,333

 

31,076

 

 

 

 

 

Second lien(3)

 

12.00%

 

5/21/2021

 

2,000

 

1,960

 

2,113

 

 

 

 

 

 

 

 

 

 

 

32,705

 

32,293

 

33,189

 

4.11

%

SRA International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

6.50% (Base Rate + 5.25%)

 

7/20/2018

 

31,765

 

31,149

 

31,884

 

3.94

%

Navex Global, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien(4)

 

5.75% (Base Rate + 4.75%)

 

11/19/2021

 

10,494

 

10,397

 

10,468

 

 

 

 

 

First lien(2)

 

5.75% (Base Rate + 4.75%)

 

11/19/2021

 

4,431

 

4,389

 

4,420

 

 

 

 

 

Second lien(4)

 

9.75% (Base Rate + 8.75%)

 

11/18/2022

 

11,953

 

11,840

 

11,834

 

 

 

 

 

Second lien(3)

 

9.75% (Base Rate + 8.75%)

 

11/18/2022

 

5,047

 

4,999

 

4,996

 

 

 

 

 

 

 

 

 

 

 

31,925

 

31,625

 

31,718

 

3.92

%

Rocket Software, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.25% (Base Rate + 8.75%)

 

2/8/2019

 

30,875

 

30,768

 

31,094

 

3.85

%

Physio-Control International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien(2)

 

10.00% (Base Rate + 9.00%)

 

6/5/2023

 

30,000

 

29,402

 

29,850

 

3.69

%

CompassLearning, Inc.(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

8.00% (Base Rate + 6.75%)

 

11/26/2018

 

30,000

 

29,459

 

29,061

 

3.60

%

Aderant North America, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.00% (Base Rate + 8.75%)

 

6/20/2019

 

24,000

 

23,779

 

24,000

 

 

 

 

 

Second lien(3)

 

10.00% (Base Rate + 8.75%)

 

6/20/2019

 

5,000

 

5,072

 

5,000

 

 

 

 

 

 

 

 

 

 

 

29,000

 

28,851

 

29,000

 

3.59

%

Transtar Holding Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Second lien(2)

 

10.00% (Base Rate + 8.75%)

 

10/9/2019

 

28,300

 

27,939

 

27,734

 

3.43

%

 

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, 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

 

KeyPoint Government Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

7.75% (Base Rate + 6.50%)

 

11/13/2017

 

$

27,609

 

$

27,289

 

$

27,607

 

3.42

%

McGraw-Hill Global Education Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)(9)

 

9.75%

 

4/1/2021

 

24,500

 

24,370

 

27,073

 

3.35

%

Pelican Products, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Products

 

Second lien(3)

 

9.25% (Base Rate + 8.25%)

 

4/9/2021

 

15,500

 

15,525

 

15,423

 

 

 

 

 

Second lien(2)

 

9.25% (Base Rate + 8.25%)

 

4/9/2021

 

10,000

 

10,119

 

9,950

 

 

 

 

 

 

 

 

 

 

 

25,500

 

25,644

 

25,373

 

3.14

%

Confie Seguros Holding II Co.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Second lien(2)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

18,886

 

18,787

 

18,815

 

 

 

 

 

Second lien(3)

 

10.25% (Base Rate + 9.00%)

 

5/8/2019

 

5,571

 

5,648

 

5,550

 

 

 

 

 

 

 

 

 

 

 

24,457

 

24,435

 

24,365

 

3.02

%

CRGT Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

7.50% (Base Rate + 6.50%)

 

12/19/2020

 

24,688

 

24,457

 

24,286

 

3.00

%

YP Holdings LLC/Print Media Holdings LLC(10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YP LLC/Print Media LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien(2)

 

8.00% (Base Rate + 6.75%)

 

6/4/2018

 

23,664

 

23,451

 

23,901

 

2.96

%

PetVet Care Centers LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

Second lien(3)

 

9.75% (Base Rate + 8.75%)

 

6/17/2021

 

24,000

 

23,775

 

23,760

 

2.94

%

Aricent Technologies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(2)

 

9.50% (Base Rate + 8.50%)

 

4/14/2022

 

20,000

 

19,876

 

20,100

 

 

 

 

 

Second lien(3)

 

9.50% (Base Rate + 8.50%)

 

4/14/2022

 

2,550

 

2,557

 

2,563

 

 

 

 

 

 

 

 

 

 

 

22,550

 

22,433

 

22,663

 

2.80

%

McGraw-Hill School Education Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

6.25% (Base Rate + 5.00%)

 

12/18/2019

 

21,670

 

21,500

 

21,801

 

2.70

%

Weston Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated(4)

 

16.00% (11.50% + 4.50% PIK)*

 

7/3/2019

 

20,923

 

20,923

 

21,194

 

2.62

%

American Pacific Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Chemicals and Materials

 

First lien(2)

 

7.00% (Base Rate + 6.00%)

 

2/27/2019

 

19,750

 

19,636

 

19,972

 

2.47

%

TWDiamondback Holdings Corp.(18)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

2.46

%

VetCor Professional Practices LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Services

 

First lien(4)

 

7.00% (Base Rate + 6.00%)

 

4/20/2021

 

19,600

 

19,407

 

19,404

 

 

 

 

 

First lien(3)(11) - Drawn

 

7.00% (Base Rate + 6.00%)

 

4/20/2021

 

495

 

495

 

490

 

 

 

 

 

 

 

 

 

 

 

20,095

 

19,902

 

19,894

 

2.46

%

Sierra Hamilton LLC / Sierra Hamilton Finance, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien(2)

 

12.25%

 

12/15/2018

 

25,000

 

25,000

 

17,750

 

 

 

 

 

First lien(3)

 

12.25%

 

12/15/2018

 

2,660

 

1,994

 

1,889

 

 

 

 

 

 

 

 

 

 

 

27,660

 

26,994

 

19,639

 

2.43

%

Novitex Acquisition, LLC (fka ARSloane Acquisition, LLC)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

First lien(2)

 

7.50% (Base Rate + 6.25%)

 

7/7/2020

 

19,850

 

19,512

 

18,858

 

2.33

%

First American Payment Systems, L.P.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(2)

 

10.75% (Base Rate + 9.50%)

 

4/12/2019

 

18,643

 

18,396

 

18,549

 

2.29

%

AgKnowledge Holdings Company, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(2)

 

9.25% (Base Rate + 8.25%)

 

7/23/2020

 

18,500

 

18,338

 

17,792

 

2.20

%

Vertafore, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

9.75% (Base Rate + 8.25%)

 

10/27/2017

 

13,855

 

13,850

 

14,045

 

 

 

 

 

Second lien(3)

 

9.75% (Base Rate + 8.25%)

 

10/27/2017

 

2,000

 

2,016

 

2,028

 

 

 

 

 

 

 

 

 

 

 

15,855

 

15,866

 

16,073

 

1.99

%

Permian Tank & Manufacturing, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

First lien(2)

 

10.50%

 

1/15/2018

 

24,357

 

24,525

 

15,710

 

1.94

%

MailSouth, Inc. (d/b/a Mspark)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Media

 

First lien(2)

 

6.75% (Base Rate + 5.00%)

 

12/14/2016

 

15,956

 

15,533

 

15,079

 

1.87

%

GSDM Holdings Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Subordinated(4)

 

10.00%

 

6/23/2020

 

15,000

 

14,869

 

14,710

 

1.82

%

Vision Solutions, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

9.50% (Base Rate + 8.00%)

 

7/23/2017

 

14,000

 

13,972

 

14,000

 

1.73

%

SW Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(4)

 

9.75% (Base Rate + 8.75%)

 

12/30/2021

 

13,500

 

13,365

 

13,365

 

1.65

%

American Tire Distributors, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Subordinated(3)

 

10.25%

 

3/1/2022

 

10,000

 

10,000

 

10,725

 

1.33

%

 

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, 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

 

PowerPlan Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Second lien(2)

 

10.75% (Base Rate + 9.75%)

 

2/23/2023

 

$

10,000

 

$

9,903

 

$

9,900

 

1.22

%

Smile Brands Group Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

First lien(2)

 

7.50% (Base Rate + 6.25%)

 

8/16/2019

 

12,251

 

12,125

 

9,382

 

1.16

%

Harley Marine Services, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution & Logistics

 

Second lien(2)

 

10.50% (Base Rate + 9.25%)

 

12/20/2019

 

9,000

 

8,856

 

8,910

 

1.10

%

Vitera Healthcare Solutions, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

First lien(2)

 

6.00% (Base Rate + 5.00%)

 

11/4/2020

 

1,970

 

1,954

 

1,976

 

 

 

 

 

Second lien(2)

 

9.25% (Base Rate + 8.25%)

 

11/4/2021

 

7,000

 

6,911

 

6,895

 

 

 

 

 

 

 

 

 

 

 

8,970

 

8,865

 

8,871

 

1.10

%

QC McKissock Investment, LLC(17)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McKissock, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

7.50% (Base Rate + 6.50%)

 

8/5/2019

 

4,899

 

4,857

 

4,795

 

 

 

 

 

First lien(2)

 

7.50% (Base Rate + 6.50%)

 

8/5/2019

 

3,163

 

3,136

 

3,096

 

 

 

 

 

First lien(2)(11)—Drawn

 

7.50% (Base Rate + 6.50%)

 

8/5/2019

 

576

 

571

 

564

 

 

 

 

 

 

 

 

 

 

 

8,638

 

8,564

 

8,455

 

1.05

%

TTM Technologies, Inc.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Products

 

First lien(2)

 

6.00% (Base Rate + 5.00%)

 

5/31/2021

 

8,000

 

7,723

 

7,970

 

0.99

%

Brock Holdings III, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Services

 

Second lien(2)

 

10.00% (Base Rate + 8.25%)

 

3/16/2018

 

7,000

 

6,943

 

6,790

 

0.84

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Services

 

First lien(2)

 

9.00% (Base Rate + 7.50%)

 

4/21/2017

 

6,909

 

6,867

 

6,426

 

0.79

%

Immucor, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Subordinated(2)(9)

 

11.13%

 

8/15/2019

 

5,000

 

4,959

 

5,325

 

0.66

%

Packaging Coordinators, Inc.(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Products

 

Second lien(3)

 

9.00% (Base Rate + 8.00%)

 

8/1/2022

 

5,000

 

4,955

 

4,950

 

0.61

%

GCA Services Group, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Second lien(3)

 

9.25% (Base Rate + 8.00%)

 

11/1/2020

 

4,000

 

3,970

 

3,985

 

0.49

%

Sophia Holding Finance LP / Sophia Holding Finance Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Software

 

Subordinated(3)

 

9.63%

 

12/1/2018

 

3,500

 

3,502

 

3,557

 

0.44

%

York Risk Services Holding Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Services

 

Subordinated(3)

 

8.50%

 

10/1/2022

 

3,000

 

3,000

 

2,654

 

0.33

%

Synarc-Biocore Holdings, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Services

 

Second lien(3)

 

9.25% (Base Rate + 8.25%)

 

3/10/2022

 

2,500

 

2,478

 

2,313

 

0.29

%

Education Management Corporation(22)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education Management II LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Education

 

First lien(2)

 

5.50% (Base Rate + 4.50%)