10-Q

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
ý      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer ý
 
Accelerated filer o
 
Non-accelerated filer o
 
Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock.
Description
 
Shares as of November 4, 2015
Common stock, $0.01 par value
 
64,005,387
 


Table of Contents

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2015
TABLE OF CONTENTS
 
PAGE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.
Financial Statements
New Mountain Finance Corporation
 
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)
(unaudited)
 
September 30, 2015
 
December 31, 2014
Assets
 

 
 

Investments at fair value
 

 
 

Non-controlled/non-affiliated investments (cost of $1,361,806 and $1,422,891, respectively)
$
1,343,861

 
$
1,402,210

Non-controlled/affiliated investments (cost $88,532 and $23,000, respectively)
88,446

 
22,461

Controlled investments (cost $41,129 and $0, respectively)
45,673

 

Total investments at fair value (cost $1,491,467 and $1,445,891, respectively)
1,477,980

 
1,424,671

Securities purchased under collateralized agreements to resell
30,000

 
30,000

Cash and cash equivalents
24,612

 
23,445

Interest and dividend receivable
15,900

 
11,744

Deferred financing costs (net of accumulated amortization of $8,047 and $5,867, respectively)
14,429

 
14,052

Receivable from unsettled securities sold
4,669

 
8,912

Receivable from affiliates
371

 
490

Other assets
2,014

 
1,606

Total assets
$
1,569,975

 
$
1,514,920

Liabilities
 

 
 

Holdings Credit Facility
$
385,538

 
$
468,108

Convertible Notes
115,000

 
115,000

SBA-guaranteed debentures
103,795

 
37,500

NMFC Credit Facility
67,500

 
50,000

Management fee payable
5,136

 
5,144

Incentive fee payable
5,034

 
4,803

Interest payable
2,719

 
1,352

Payable for unsettled securities purchased
2,428

 
26,460

Deferred tax liability
1,710

 
493

Payable to affiliates
134

 
822

Other liabilities
2,284

 
3,068

Total liabilities
691,278

 
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 64,005,387 and 57,997,890 shares issued and outstanding, respectively
640

 
580

Paid in capital in excess of par
899,854

 
817,129

Accumulated undistributed net investment income
3,264

 
2,530

Accumulated undistributed net realized gains on investments
623

 
14,131

Net unrealized (depreciation) appreciation on investments (net of provision for taxes of $1,710 and $493, respectively)
(25,684
)
 
(32,200
)
Total net assets
$
878,697

 
$
802,170

Total liabilities and net assets
$
1,569,975

 
$
1,514,920

Number of shares outstanding
64,005,387

 
57,997,890

Net asset value per share
$
13.73

 
$
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
 
Nine Months Ended
 
September 30, 2015
 
September 30, 2014
 
September 30, 2015
 
September 30, 2014
Investment income(1)
 
 
 
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
31,628

 
$
32,353

 
$
97,249

 
$
51,141

Dividend income
(509
)
 
214

 
(407
)
 
1,186

Other income
1,619

 
1,667

 
3,496

 
2,372

From non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
1,594

 

 
3,820

 

Dividend income
892

 
297

 
2,701

 
297

Other income
1,020

 
175

 
1,642

 
179

From controlled investments:
 
 
 
 
 
 
 
Interest income
517

 

 
1,487

 

Dividend income
673

 

 
1,864

 

Other income
13

 

 
36

 

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

 

 

 
40,515

Dividend income

 

 

 
2,368

Other income

 

 

 
795

Total investment income
37,447

 
34,706

 
111,888

 
98,853

Expenses
 
 
 
 
 
 
 
Incentive fee(1)
5,034

 
4,520

 
14,969

 
7,267

Capital gains incentive fee(1)
(490
)
 
(2,667
)
 

 
(1,904
)
Total incentive fees(1)
4,544

 
1,853

 
14,969

 
5,363

Management fee(1)
6,373

 
5,021

 
19,039

 
7,763

Interest and other financing expenses(1)
5,788

 
5,237

 
16,863

 
7,796

Professional fees(1)
808

 
890

 
2,456

 
1,530

Administrative expenses(1)
647

 
549

 
1,804

 
909

Other general and administrative expenses(1)
370

 
448

 
1,252

 
687

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

 

 

 
20,808

Total expenses
18,530

 
13,998

 
56,383

 
44,856

Less: management fee waived (see Note 5) (1)
(1,237
)
 

 
(3,866
)
 

Less: expenses waived and reimbursed (see Note 5) (1)
(333
)
 
(322
)
 
(733
)
 
(380
)
Net expenses
16,960

 
13,676

 
51,784

 
44,476

Net investment income before income taxes
20,487

 
21,030

 
60,104

 
54,377

Income tax (benefit) expense(1)
(172
)
 
230

 
130

 
230

Net investment income
20,659

 
20,800

 
59,974

 
54,147

Net realized (losses) gains:
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments(1)
(37
)
 
768

 
(13,508
)
 
(299
)
Investments allocated from New Mountain Finance Holdings, L.L.C. (2)

 

 

 
8,568

Net change in unrealized (depreciation) appreciation:
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments(1)
(8,360
)
 
(14,220
)
 
2,148

 
(8,512
)
Non-controlled/affiliated investments(1)
313

 
(52
)
 
1,041

 
(52
)
Controlled investments(1)
(2,190
)
 

 
4,544

 

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

 

 

 
940

(Provision) benefit for taxes(1)
(581
)
 
115

 
(1,217
)
 
(271
)
Net increase in net assets resulting from operations
9,804

 
7,411

 
52,982

 
54,521

Basic earnings per share
$
0.17

 
$
0.14

 
$
0.91

 
$
1.09

Weighted average shares of common stock outstanding - basic (See Note 11)
58,725,338

 
52,071,071

 
58,269,543

 
50,262,656

Diluted earnings per share
$
0.17

 
$
0.14

 
$
0.86

 
$
1.05

Weighted average shares of common stock outstanding - diluted (See Note 11)
66,002,469

 
59,290,154

 
65,514,142

 
53,594,541

Dividends declared and paid per share
$
0.34

 
$
0.46

 
$
1.02

 
$
1.14

 
(1)
For the nine months ended September 30, 2014, the amounts reported relate to the period from May 8, 2014 to September 30, 2014.
(2)
For the nine months ended September 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.
4

Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Changes in Net Assets
(in thousands)
(unaudited)
 
Nine Months Ended
 
September 30, 2015
 
September 30, 2014
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income(1)
$
59,974

 
$
31,277

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

 
22,870

Net realized losses on investments(1)
(13,508
)
 
(299
)
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)
7,733

 
(8,564
)
Net change in unrealized appreciation (depreciation) of investments allocated from New Mountain Finance Holdings, L.L.C.(2)

 
940

Provision for taxes(1)
(1,217
)
 
(271
)
Net increase in net assets resulting from operations
52,982

 
54,521

Capital transactions
 
 
 
Net proceeds from shares sold
79,415

 
58,644

Deferred offering costs(1)
(285
)
 
(126
)
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
(59,240
)
 
(51,673
)
Dividends declared to stockholders from net realized gains

 
(6,247
)
Reinvestment of dividends
3,655

 
3,641

Total net increase in net assets resulting from capital transactions
23,545

 
42,829

Net increase in net assets
76,527

 
97,350

Net assets at the beginning of the period
802,170

 
650,107

Net assets at the end of the period
$
878,697

 
$
747,457

 
(1)
For the nine months ended September 30, 2014, the amounts reported relate to the period from May 8, 2014 to September 30, 2014.
(2)
For the nine months ended September 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)
 
Nine Months Ended
 
September 30, 2015
 
September 30, 2014
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
52,982

 
$
54,521

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.(2)

 
(22,870
)
Net realized losses on investments(1)
13,508

 
299

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)
(7,733
)
 
8,564

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

 
(940
)
Amortization of purchase discount(1)
(1,787
)
 
(1,073
)
Amortization of deferred financing costs(1)
2,180

 
1,029

Non-cash investment income(1)
(4,374
)
 
(1,029
)
(Increase) decrease in operating assets:
 
 
 
Cash and cash equivalents from New Mountain Finance Holdings, L.L.C.(3)

 
957

Restricted cash and cash equivalents(1)

 
(1,784
)
Purchase of investments and delayed draw facilities(1)
(397,745
)
 
(325,038
)
Proceeds from sales and paydowns of investments(1)
344,753

 
159,792

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities(1)
157

 
29

Cash paid for purchase of drawn portion of revolving credit facilities(1)
(3,227
)
 
(2,548
)
Cash paid on drawn revolvers(1)
(1,160
)
 

Cash repayments on drawn revolvers(1)
4,299

 
380

Interest and dividend receivable(1)
(4,156
)
 
(1,934
)
Receivable from unsettled securities sold(1)
4,243

 

Receivable from affiliates(1)
119

 
201

Other assets(1)
(329
)
 
(167
)
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:
 
 
 
Management fee payable(1)
(8
)
 
(1,034
)
Incentive fee payable(1)
231

 
(1,805
)
Interest payable(1)
1,367

 
2,690

Payable for unsettled securities purchased(1)
(24,032
)
 
15,816

Deferred tax liability(1)
1,217

 
271

Payable to affiliates(1)
(688
)
 
21

Capital gains incentive fee payable(1)

 
(1,904
)
Other liabilities(1)
(735
)
 
1,859

Net cash flows used in operating activities
(20,918
)
 
(167,662
)
Cash flows from financing activities
 
 
 
Net proceeds from shares sold
79,415

 
58,644

Dividends paid
(55,585
)
 
(54,279
)
Offering costs paid(1)
(141
)
 
(264
)
Proceeds from Holdings Credit Facility(1)
246,330

 
247,830

Repayment of Holdings Credit Facility(1)
(328,900
)
 
(188,100
)
Proceeds from Convertible Notes(1)

 
115,000

Proceeds from SBA-guaranteed debentures(1)
66,295

 

Proceeds from NMFC Credit Facility(1)
101,300

 
22,000

Repayment of NMFC Credit Facility(1)
(83,800
)
 

Proceeds from SLF Credit Facility

 
19,867

Repayment of SLF Credit Facility

 
(30,000
)
Deferred financing costs paid(1)
(2,829
)
 
(5,179
)
Net cash flows provided by financing activities
22,085

 
185,519

Net increase in cash and cash equivalents
1,167

 
17,857

Cash and cash equivalents at the beginning of the period
23,445

 

Cash and cash equivalents at the end of the period
$
24,612

 
$
17,857

Supplemental disclosure of cash flow information
 
 
 
Cash interest paid
$
12,764

 
$
3,866

Income taxes paid
151

 

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
3,655

 
3,641

Accrual for offering costs(1)
739

 
729

Accrual for deferred financing costs(1)
103

 
576

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

 
(250
)
 
(1)
For the nine months ended September 30, 2014, the amounts reported relate to the period from May 8, 2014 to September 30, 2014.
(2)
For the nine months ended September 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
September 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
 
$
11,689

 
$
11,634

 
$
11,733

 
1.34
 %
Total Funded Debt Investments - Australia
 
 
 
 
 
 
 
$
11,689

 
$
11,634

 
$
11,733

 
1.34
 %
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

 
$
24,333

 
$
22,044

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

 
8,323

 
7,342

 
 
 
 
 
 
 
 
 
 
32,834

 
32,656

 
29,386

 
3.34
 %
Total Funded Debt Investments - Luxembourg
 
 
 
 
 
 
 
$
32,834

 
$
32,656

 
$
29,386

 
3.34
 %
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

 
$
9,286

 
$
9,050

 
1.03
 %
Total Funded Debt Investments - Netherlands
 
 
 
 
 
 
 
$
10,000

 
$
9,286

 
$
9,050

 
1.03
 %
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
10.50% (Base Rate + 9.50%)
 
1/31/2023
 
$
32,500

 
$
31,718

 
$
31,525

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

 
$
31,718

 
$
31,525

 
3.59
 %
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   TIBCO Software Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
6.50% (Base Rate + 5.50%)
 
12/4/2020
 
$
29,850

 
$
28,525

 
$
29,794

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

 
14,600

 
15,019

 
 
 
 
 
 
 
 
 
 
44,850

 
43,125

 
44,813

 
5.10
 %
   Deltek, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
9.50% (Base Rate + 8.50%)
 
6/26/2023
 
21,000

 
20,967

 
21,114

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

 
19,615

 
20,108

 
 
 
 
 
 
 
 
 
 
41,000

 
40,582

 
41,222

 
4.69
 %
   Kronos Incorporated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
9.75% (Base Rate + 8.50%)
 
4/30/2020
 
32,641

 
32,434

 
33,518

 
 
 
 
Second lien (3)
 
9.75% (Base Rate + 8.50%)
 
4/30/2020
 
5,000

 
4,959

 
5,134

 
 
 
 
 
 
 
 
 
 
37,641

 
37,393

 
38,652

 
4.40
 %
   Tolt Solutions, Inc. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.00% (Base Rate + 6.00%)
 
3/7/2019
 
18,255

 
18,255

 
18,255

 
 
 
 
First lien (2)
 
12.00% (Base Rate + 11.00%)
 
3/7/2019
 
18,800

 
18,800

 
18,800

 
 
 
 
 
 
 
 
 
 
37,055

 
37,055

 
37,055

 
4.22
 %
   Hill International, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.75% (Base Rate + 6.75%)
 
9/28/2020
 
34,650

 
34,351

 
34,433

 
3.92
 %
   CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
7.50% (Base Rate + 6.50%)
 
12/19/2020
 
33,474

 
33,232

 
33,390

 
3.80
 %
   SRA International, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
6.50% (Base Rate + 5.25%)
 
7/20/2018
 
31,765

 
31,196

 
31,884

 
3.63
 %

The accompanying notes are an integral part of these consolidated financial statements.
7

New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
September 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
   TASC, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
7.00% (Base Rate + 6.00%)
 
5/22/2020
 
$
29,323

 
$
28,983

 
$
29,433

 
 
 
 
Second lien (3)
 
12.00%
 
5/21/2021
 
2,000

 
1,963

 
2,070

 
 
 
 
 
 
 
 
 
 
31,323

 
30,946

 
31,503

 
3.59
 %
   Navex Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
5.75% (Base Rate + 4.75%)
 
11/19/2021
 
10,468

 
10,373

 
10,363

 
 
 
 
First lien (2)
 
5.75% (Base Rate + 4.75%)
 
11/19/2021
 
4,420

 
4,380

 
4,376

 
 
 
 
Second lien (4)
 
9.75% (Base Rate + 8.75%)
 
11/18/2022
 
11,953

 
11,842

 
11,774

 
 
 
 
Second lien (3)
 
9.75% (Base Rate + 8.75%)
 
11/18/2022
 
5,047

 
5,000

 
4,971

 
 
 
 
 
 
 
 
 
 
31,888

 
31,595

 
31,484

 
3.58
 %
   Rocket Software, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
10.25% (Base Rate + 8.75%)
 
2/8/2019
 
30,875

 
30,774

 
30,901

 
3.52
 %
   Physio-Control International, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Products
 
Second lien (2)
 
10.00% (Base Rate + 9.00%)
 
6/5/2023
 
30,000

 
29,415

 
29,962

 
3.41
 %
   Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
8.00% (Base Rate + 7.00%)
 
9/24/2021
 
30,000

 
29,626

 
29,625

 
3.37
 %
   Aderant North America, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
10.00% (Base Rate + 8.75%)
 
6/20/2019
 
24,000

 
23,785

 
23,970

 
 
 
 
Second lien (3)
 
10.00% (Base Rate + 8.75%)
 
6/20/2019
 
5,000

 
5,074

 
4,994

 
 
 
 
 
 
 
 
 
 
29,000

 
28,859

 
28,964

 
3.30
 %
   Ascend Learning, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Second lien (3)
 
9.50% (Base Rate + 8.50%)
 
11/30/2020
 
29,000

 
28,892

 
28,782

 
3.27
 %
   CompassLearning, Inc. (14)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
8.00% (Base Rate + 6.75%)
 
11/26/2018
 
30,000

 
29,494

 
28,528

 
3.25
 %
   Transtar Holding Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (2)
 
10.00% (Base Rate + 8.75%)
 
10/9/2019
 
28,300

 
27,957

 
27,451

 
3.12
 %
   Ryan, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
6.75% (Base Rate + 5.75%)
 
8/7/2020
 
27,650

 
27,245

 
27,408

 
3.12
 %
   McGraw-Hill Global Education Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)(9)
 
9.75%
 
4/1/2021
 
24,500

 
24,374

 
26,889

 
3.06
 %
   KeyPoint Government Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
7.75% (Base Rate + 6.50%)
 
11/13/2017
 
26,743

 
26,463

 
26,609

 
3.03
 %
   Pelican Products, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Products
 
Second lien (3)
 
9.25% (Base Rate + 8.25%)
 
4/9/2021
 
15,500

 
15,522

 
15,423

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

 
10,117

 
9,950

 
 
 
 
 
 
 
 
 
 
25,500

 
25,639

 
25,373

 
2.89
 %
   AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
8.25% (Base Rate + 7.25%)
 
9/30/2020
 
25,000

 
24,625

 
24,625

 
2.80
 %
   Confie Seguros Holding II Co.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (2)
 
10.25% (Base Rate + 9.00%)
 
5/8/2019
 
18,886

 
18,788

 
18,791

 
 
 
 
Second lien (3)
 
10.25% (Base Rate + 9.00%)
 
5/8/2019
 
5,571

 
5,648

 
5,543

 
 
 
 
 
 
 
 
 
 
24,457

 
24,436

 
24,334

 
2.77
 %
   PetVet Care Centers LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (3)
 
9.75% (Base Rate + 8.75%)
 
6/17/2021
 
24,000

 
23,782

 
23,760

 
2.70
 %
   Aricent Technologies
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
9.50% (Base Rate + 8.50%)
 
4/14/2022
 
20,000

 
19,879

 
19,700

 
 
 
 
Second lien (3)
 
9.50% (Base Rate + 8.50%)
 
4/14/2022
 
2,550

 
2,557

 
2,512

 
 
 
 
 
 
 
 
 
 
22,550

 
22,436

 
22,212

 
2.53
 %

The accompanying notes are an integral part of these consolidated financial statements.
8

New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
September 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
   McGraw-Hill School Education Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
6.25% (Base Rate + 5.00%)
 
12/18/2019
 
$
21,615

 
$
21,455

 
$
21,683

 
2.47
 %
   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
 
21,374

 
21,197

 
21,214

 
2.41
 %
   EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.00% (Base Rate + 6.00%)
 
6/30/2021
 
21,375

 
21,166

 
21,161

 
2.41
 %
   Weston Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Subordinated (4)
 
16.00%
 
7/3/2019
 
20,000

 
20,000

 
20,014

 
2.28
 %
   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

 
2.26
 %
   American Pacific Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Specialty Chemicals and Materials
 
First lien (2)
 
7.00% (Base Rate + 6.00%)
 
2/27/2019
 
19,700

 
19,594

 
19,733

 
2.25
 %
   VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (4)
 
7.00% (Base Rate + 6.00%)
 
4/20/2021
 
19,551

 
19,366

 
19,499

 
 
 
 
First lien (3)(11) - Drawn
 
7.00% (Base Rate + 6.00%)
 
4/20/2021
 
90

 
90

 
90

 
 
 
 
 
 
 
 
 
 
19,641

 
19,456

 
19,589

 
2.23
 %
   First American Payment Systems, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
10.75% (Base Rate + 9.50%)
 
4/12/2019
 
18,643

 
18,409

 
18,550

 
2.11
 %
   Sierra Hamilton LLC / Sierra Hamilton Finance, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (2)
 
12.25%
 
12/15/2018
 
25,000

 
25,000

 
16,500

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

 
2,029

 
1,755

 
 
 
 
 
 
 
 
 
 
27,660

 
27,029

 
18,255

 
2.08
 %
   iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)
 
8.25% (Base Rate + 7.25%)
 
8/4/2022
 
18,000

 
17,823

 
17,820

 
2.03
 %
   DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
6.25% (Base Rate + 5.25%)
 
7/2/2021
 
17,855

 
17,683

 
17,677

 
2.01
 %
   AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
 9.25% (Base Rate + 8.25%)
 
7/23/2020
 
18,500

 
18,344

 
17,566

 
2.00
 %
   Vertafore, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
9.75% (Base Rate + 8.25%)
 
10/27/2017
 
13,855

 
13,849

 
13,962

 
 
 
 
Second lien (3)
 
9.75% (Base Rate + 8.25%)
 
10/27/2017
 
2,000

 
2,016

 
2,016

 
 
 
 
 
 
 
 
 
 
15,855

 
15,865

 
15,978

 
1.82
 %
   MailSouth, Inc. (d/b/a Mspark)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Media
 
First lien (2)
 
6.75% (Base Rate + 5.00%)
 
12/14/2016
 
15,512

 
15,170

 
15,201

 
1.73
 %
   Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (4)
 
9.25% (Base Rate + 8.25%)
 
7/29/2022
 
15,000

 
14,853

 
14,850

 
1.69
 %
   GSDM Holdings Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Subordinated (4)
 
10.00%
 
6/23/2020
 
15,000

 
14,875

 
14,643

 
1.67
 %
   Vision Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
9.50% (Base Rate + 8.00%)
 
7/23/2017
 
14,000

 
13,975

 
14,000

 
1.59
 %
   Permian Tank & Manufacturing, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (2)
 
10.50%
 
1/15/2018
 
24,357

 
24,509

 
13,640

 
1.55
 %

The accompanying notes are an integral part of these consolidated financial statements.
9

New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
September 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
   TW-NHME Holdings Corp. (23):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (4)
 
10.25% (Base Rate + 9.25%)
 
7/14/2022
 
$
14,000

 
$
13,829

 
$
13,472

 
1.53
 %
   SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (4)
 
9.75% (Base Rate + 8.75%)
 
12/30/2021
 
13,500

 
13,369

 
13,155

 
1.50
 %
   Poseidon Intermediate, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
9.50% (Base Rate + 8.50%)
 
8/15/2023
 
13,000

 
12,807

 
12,805

 
1.46
 %
   American Tire Distributors, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Subordinated (3)
 
10.25%
 
3/1/2022
 
10,000

 
10,000

 
10,250

 
1.17
 %
   PowerPlan Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
10.75% (Base Rate + 9.75%)
 
2/23/2023
 
10,000

 
9,905

 
9,970

 
1.13
 %
   Novitex Acquisition, LLC (fka ARSloane Acquisition, LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.50% (Base Rate + 6.25%)
 
7/7/2020
 
9,788

 
9,577

 
9,201

 
1.05
 %
   Harley Marine Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (2)
 
10.50% (Base Rate + 9.25%)
 
12/20/2019
 
9,000

 
8,862

 
8,910

 
1.01
 %
   Vitera Healthcare Solutions, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
6.00% (Base Rate + 5.00%)
 
11/4/2020
 
1,965

 
1,950

 
1,951

 
 
 
 
Second lien (2)
 
9.25% (Base Rate + 8.25%)
 
11/4/2021
 
7,000

 
6,914

 
6,825

 
 
 
 
 
 
 
 
 
 
8,965

 
8,864

 
8,776

 
1.00
 %
   Smile Brands Group Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
8.50% (Base Rate + 5.25%)
 
8/16/2019
 
12,220

 
12,100

 
8,625

 
0.98
 %
   QC McKissock Investment, LLC (17):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   McKissock, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
7.50% (Base Rate + 6.50%)
 
8/5/2019
 
4,887

 
4,848

 
4,747

 
 
 
 
First lien (2)
 
7.50% (Base Rate + 6.50%)
 
8/5/2019
 
3,155

 
3,130

 
3,065

 
 
 
 
First lien (2)(11) - Drawn
 
7.50% (Base Rate + 6.50%)