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 June 30, 2018
o         Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Commission
File Number
 
Exact name of registrant as specified in its charter, address of principal executive
offices, telephone numbers and states or other jurisdictions of incorporation or organization
 
I.R.S. Employer
Identification Number
814-00832
 
New Mountain Finance Corporation
 
27-2978010
 
 
787 Seventh Avenue, 48th Floor
New York, New York 10019
Telephone: (212) 720-0300
State of Incorporation: Delaware
 
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ý
 
Accelerated filer o
 
 
Non-accelerated filer o (Do not check if a smaller reporting company)
 
Smaller reporting company o
 
 
Emerging growth company o
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock.
Description
 
Shares as of August 7, 2018
Common stock, par value $0.01 per share
 
76,106,372
 

Table of Contents

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2018
TABLE OF CONTENTS
 
PAGE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2
Table of Contents

PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
New Mountain Finance Corporation
 
Consolidated Statements of Assets and Liabilities
(in thousands, except shares and per share data)
(unaudited)
 
June 30, 2018
 
December 31, 2017
Assets
 

 
 

Investments at fair value
 

 
 

Non-controlled/non-affiliated investments (cost of $1,579,140 and $1,438,889, respectively)
$
1,584,412

 
$
1,462,182

Non-controlled/affiliated investments (cost of $172,898 and $180,380, respectively)
184,376

 
178,076

Controlled investments (cost of $308,628 and $171,958, respectively)
329,230

 
185,402

Total investments at fair value (cost of $2,060,666 and $1,791,227, respectively)
2,098,018

 
1,825,660

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

 
25,212

Cash and cash equivalents
33,948

 
34,936

Interest and dividend receivable
42,397

 
31,844

Receivable from affiliates
952

 
343

Other assets
5,426

 
10,023

Total assets
$
2,205,941

 
$
1,928,018

Liabilities
 

 
 

Borrowings
 
 
 
     Holdings Credit Facility
$
390,463

 
$
312,363

     Unsecured Notes
235,000

 
145,000

     SBA-guaranteed debentures
163,000

 
150,000

     Convertible Notes
155,357

 
155,412

     NMFC Credit Facility
150,000

 
122,500

     Deferred financing costs (net of accumulated amortization of $19,229 and $16,578, respectively)
(15,109
)
 
(15,777
)
Net borrowings
1,078,711

 
869,498

Payable for unsettled securities purchased
29,903

 
—

Management fee payable
22,240

 
7,065

Incentive fee payable
19,535

 
6,671

Interest payable
7,099

 
5,107

Payable to affiliates
2,488

 
863

Deferred tax liability
1,878

 
894

Other liabilities
11,441

 
2,945

Total liabilities
1,173,295

 
893,043

Commitments and contingencies (See Note 9)
 

 
 

Net assets
 

 
 

Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued
—

 
—

Common stock, par value $0.01 per share, 100,000,000 shares authorized, 76,106,372 and 75,935,903 shares issued and outstanding, respectively
761

 
759

Paid in capital in excess of par
1,055,796

 
1,053,468

Accumulated undistributed net investment income
38,986

 
39,165

Accumulated undistributed net realized losses on investments
(83,084
)
 
(76,681
)
Net unrealized appreciation (depreciation) (net of provision for taxes of $1,878 and $894, respectively)
20,187

 
18,264

Total net assets
$
1,032,646

 
$
1,034,975

Total liabilities and net assets
$
2,205,941

 
$
1,928,018

Number of shares outstanding
76,106,372

 
75,935,093

Net asset value per share
$
13.57

 
$
13.63


The accompanying notes are an integral part of these consolidated financial statements.
3
Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Operations
(in thousands, except shares and per share data)
(unaudited)
 
Three Months Ended
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
 
June 30, 2018
 
June 30, 2017
Investment income
 
 
 
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
38,510

 
$
36,518

 
$
73,946

 
$
69,394

Dividend income
—

 
120

 
486

 
159

Non-cash dividend income
1,439

 
1

 
2,763

 
13

Other income
1,013

 
2,084

 
3,881

 
4,349

From non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
210

 
712

 
312

 
1,359

Dividend income
791

 
842

 
1,636

 
1,846

Non-cash dividend income
4,017

 
3,987

 
8,026

 
4,631

Other income
912

 
296

 
1,214

 
594

From controlled investments:
 
 
 
 
 
 
 
Interest income
1,370

 
409

 
2,571

 
884

Dividend income
4,591

 
3,867

 
8,830

 
8,080

Non-cash dividend income
1,508

 
853

 
2,962

 
1,674

Other income
237

 
330

 
860

 
343

Total investment income
54,598

 
50,019

 
107,487

 
93,326

Expenses
 
 
 
 
 
 
 
Incentive fee
6,430

 
6,449

 
12,864

 
11,857

Management fee
9,301

 
8,275

 
17,993

 
15,889

Interest and other financing expenses
12,824

 
9,045

 
24,114

 
17,421

Professional fees
708

 
722

 
1,402

 
1,572

Administrative expenses
822

 
662

 
1,761

 
1,370

Other general and administrative expenses
518

 
402

 
928

 
868

Total expenses
30,603

 
25,555

 
59,062

 
48,977

Less: management and incentive fees waived (See Note 5)
(1,495
)
 
(1,485
)
 
(2,817
)
 
(4,641
)
Less: expenses waived and reimbursed (See Note 5)
(276
)
 
(4
)
 
(276
)
 
(474
)
Net expenses
28,832

 
24,066

 
55,969

 
43,862

Net investment income before income taxes
25,766

 
25,953

 
51,518

 
49,464

Income tax expense
45

 
155

 
61

 
235

Net investment income
25,721

 
25,798

 
51,457

 
49,229

Net realized (losses) gains:
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
(6,609
)
 
(26,453
)
 
(6,403
)
 
(25,627
)
Net change in unrealized appreciation (depreciation):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
(14,500
)
 
26,631

 
(18,021
)
 
34,610

Non-controlled/affiliated investments
8,270

 
(298
)
 
10,079

 
(594
)
Controlled investments
11,317

 
1,519

 
10,861

 
41

Securities purchased under collateralized agreements to resell
—

 
(33
)
 
(12
)
 
(833
)
(Provision) benefit for taxes
(1,066
)
 
164

 
(984
)
 
919

Net realized and unrealized gains (losses)
(2,588
)
 
1,530

 
(4,480
)
 
8,516

Net increase in net assets resulting from operations
$
23,133

 
$
27,328

 
$
46,977

 
$
57,745

Basic earnings per share
$
0.30

 
$
0.36

 
$
0.62

 
$
0.80

Weighted average shares of common stock outstanding - basic (See Note 11)
75,938,857

 
75,383,387

 
75,936,986

 
72,566,825

Diluted earnings per share
$
0.29

 
$
0.34

 
$
0.58

 
$
0.74

Weighted average shares of common stock outstanding - diluted (See Note 11)
85,762,984

 
85,207,514

 
85,761,113

 
82,390,952

Distributions declared and paid per share
$
0.34

 
$
0.34

 
$
0.68

 
$
0.68


The accompanying notes are an integral part of these consolidated financial statements.
4
Table of Contents

New Mountain Finance Corporation
 
Consolidated Statements of Changes in Net Assets
(in thousands, except shares and per share data)
(unaudited)
 
Six Months Ended
 
June 30, 2018
 
June 30, 2017
Increase (decrease) in net assets resulting from operations:
 
 
 
Net investment income
$
51,457

 
$
49,229

Net realized losses on investments
(6,403
)
 
(25,627
)
Net change in unrealized appreciation of investments
2,919

 
34,057

Net change in unrealized depreciation of securities purchased under collateralized agreements to resell
(12
)
 
(833
)
(Provision) benefit for taxes
(984
)
 
919

Net increase in net assets resulting from operations
46,977

 
57,745

Capital transactions
 
 
 
Net proceeds from shares sold
—

 
81,478

Deferred offering costs
—

 
(172
)
Distributions declared to stockholders from net investment income
(51,636
)
 
(49,398
)
Reinvestment of distributions
2,330

 
3,208

Other
—

 
(81
)
Total net (decrease) increase in net assets resulting from capital transactions
(49,306
)
 
35,035

Net (decrease) increase in net assets
(2,329
)
 
92,780

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

 
938,562

Net assets at the end of the period
$
1,032,646

 
$
1,031,342

 
 
 
 
Capital share activity
 
 
 
Shares sold
—

 
5,750,000

Shares issued from the reinvestment of distributions
171,279

 
180,451

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

 
37,573

Net increase in shares outstanding
171,279

 
5,968,024




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, 2018
 
June 30, 2017
Cash flows from operating activities
 
 
 
Net increase in net assets resulting from operations
$
46,977

 
$
57,745

Adjustments to reconcile net (increase) decrease in net assets resulting from operations to net cash provided by (used in) operating activities:
 
 
 
Net realized losses on investments
6,403

 
25,627

Net change in unrealized appreciation of investments
(2,919
)
 
(34,057
)
Net change in unrealized depreciation of securities purchased under collateralized agreements to resell
12

 
833

Amortization of purchase discount
(2,592
)
 
(2,495
)
Amortization of deferred financing costs
2,651

 
1,991

Amortization of premium on Convertible Notes
(55
)
 
(55
)
Non-cash investment income
(8,559
)
 
(3,864
)
(Increase) decrease in operating assets:
 
 
 
Purchase of investments and delayed draw facilities
(549,417
)
 
(607,755
)
Proceeds from sales and paydowns of investments
296,835

 
330,586

Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities
588

 
189

Cash paid for purchase of drawn portion of revolving credit facilities
(11,631
)
 
—

Cash paid on drawn revolvers
(11,004
)
 
(7,344
)
Cash repayments on drawn revolvers
9,938

 
2,897

Interest and dividend receivable
(10,553
)
 
(6,822
)
Receivable from unsettled securities sold
—

 
990

Receivable from affiliates
(609
)
 
(32
)
Other assets
4,597

 
(1,543
)
Increase (decrease) in operating liabilities:
 
 
 
Payable for unsettled securities purchased
29,903

 
21,411

Management fee payable
15,175

 
7,196

Incentive fee payable
12,864

 
4,312

Interest payable
1,992

 
229

Payable to affiliates
1,625

 
525

Deferred tax liability
984

 
(919
)
Other liabilities
8,469

 
(845
)
Net cash flows used in operating activities
(158,326
)
 
(211,200
)
Cash flows from financing activities
 
 
 
Net proceeds from shares sold
—

 
81,478

Distributions paid
(49,306
)
 
(46,190
)
Offering costs paid
(40
)
 
(289
)
Proceeds from Holdings Credit Facility
152,500

 
278,200

Repayment of Holdings Credit Facility
(74,400
)
 
(283,000
)
Proceeds from Unsecured Notes
90,000

 
55,000

Proceeds from SBA-guaranteed debentures
13,000

 
5,000

Proceeds from NMFC Credit Facility
120,000

 
232,100

Repayment of NMFC Credit Facility
(92,500
)
 
(119,600
)
Deferred financing costs paid
(1,916
)
 
(1,009
)
Other
—

 
(81
)
Net cash flows provided by financing activities
157,338

 
201,609

Net decrease in cash and cash equivalents
(988
)
 
(9,591
)
Cash and cash equivalents at the beginning of the period
34,936

 
45,928

Cash and cash equivalents at the end of the period
$
33,948

 
$
36,337

Supplemental disclosure of cash flow information
 
 
 
Cash interest paid
$
18,871

 
$
14,567

Income taxes paid
216

 
175

Non-cash operating activities:
 
 
 
Non-cash activity on investments
$
1,346

 
$
—

Non-cash financing activities:
 
 
 
Value of shares issued in connection with the distribution reinvestment plan
$
2,330

 
$
2,648

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

 
560

Accrual for offering costs
904

 
1,095

Accrual for deferred financing costs
170

 
128



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

Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - Canada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dentalcorp Perfect Smile ULC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)
 
9.59% (L+ 7.50%/M)
 
6/1/2018
 
6/8/2026
 
$
18,000

 
$
17,820

 
$
17,820

 
1.73
 %
Total Funded Debt Investments - Canada
 
 
 
 
 
 
 
 
 
$
18,000

 
$
17,820

 
$
17,820

 
1.73
 %
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shine Acquisition Co. S.à.r.l / Boing US Holdco Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
Second lien (3)
 
9.86% (L + 7.50%/Q)
 
9/25/2017
 
10/3/2025
 
$
43,853

 
$
43,604

 
$
43,990

 
4.26
 %
Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (2)
 
6.78% (L + 4.75%/M)
 
5/25/2018
 
5/31/2024
 
20,176

 
20,125

 
20,276

 
1.96
 %
Total Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
$
64,029

 
$
63,729

 
$
64,266

 
6.22
 %
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benevis Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)(10)
 
8.66% (L + 6.32%/Q)
 
3/15/2018
 
3/15/2024
 
$
58,676

 
$
58,676

 
$
58,676

 
 
 
 
First lien (3)(10)
 
8.66% (L + 6.32%/Q)
 
3/15/2018
 
3/15/2024
 
20,639

 
20,639

 
20,639

 
 
 
 
 
 
 
 
 
 
 
 
79,315

 
79,315

 
79,315

 
7.68
 %
Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)
 
8.06% (L + 5.75%/Q)
 
10/9/2015
 
10/31/2022
 
51,509

 
51,181

 
51,251

 
 
 
 
Second lien (3)
 
11.56% (L + 9.25%/Q)
 
10/9/2015
 
10/30/2023
 
10,000

 
9,925

 
9,950

 
 
 
 
 
 
 
 
 
 
 
 
61,509

 
61,106

 
61,201

 
5.93
 %
AmWINS Group, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
8.84% (L + 6.75%/M)
 
1/19/2017
 
1/25/2025
 
57,000

 
56,815

 
57,570

 
5.57
 %
Alegeus Technologies, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)(10)
 
10.83% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
23,500

 
23,500

 
23,500

 
 
 
 
Second lien (4)(10)
 
10.83% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
22,500

 
22,500

 
22,500

 
 
 
 
 
 
 
 
 
 
 
 
46,000

 
46,000

 
46,000

 
4.45
 %
Quest Software US Holdings Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (2)
 
10.58% (L + 8.25%/Q)
 
5/17/2018
 
5/18/2026
 
43,697

 
43,263

 
43,806

 
4.24
 %
VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
First lien (4)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
19,013

 
18,914

 
19,013

 
 
 
 
First lien (2)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
7,674

 
7,579

 
7,674

 
 
 
 
First lien (3)
 
10.25% (P + 5.25%/M)
 
2/24/2017
 
4/20/2021
 
5,975

 
5,877

 
5,975

 
 
 
 
First lien (4)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
2,637

 
2,622

 
2,637

 
 
 
 
First lien (3)(11) - Drawn
 
10.25% (P + 5.25%/M)
 
6/24/2016
 
4/20/2021
 
1,877

 
1,862

 
1,877

 
 
 
 
First lien (2)
 
10.25% (P + 5.25%/M)
 
3/31/2016
 
4/20/2021
 
1,623

 
1,601

 
1,623

 
 
 
 
First lien (3)(11) - Drawn
 
10.25% (P + 5.25%/M)
 
12/29/2017
 
4/20/2021
 
1,395

 
1,381

 
1,395

 
 
 
 
First lien (4)
 
10.25% (P + 5.25%/M)
 
5/15/2015
 
4/20/2021
 
493

 
486

 
493

 
 
 
 
 
 
 
 
 
 
 
 
40,687

 
40,322

 
40,687

 
3.94
 %
Salient CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (2)
 
7.84% (L + 5.75%/M)
 
1/6/2015
 
2/28/2022
 
39,616

 
39,206

 
40,210

 
3.89
 %

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


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Tenawa Resource Holdings LLC (13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenawa Resource Management LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
First lien (3)(10)
 
10.50% (Base + 8.00%/Q)
 
5/12/2014
 
10/30/2024
 
$
39,700

 
$
39,639

 
$
39,700

 
3.84
 %
NM GRC Holdco, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.83% (L + 5.50%/Q)
 
2/9/2018
 
2/9/2024
 
38,930

 
38,746

 
38,735

 
3.75
 %
Frontline Technologies Group Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (4)(10)
 
8.59% (L + 6.50%/M)
 
9/18/2017
 
9/18/2023
 
22,500

 
22,349

 
22,185

 
 
 
 
First lien (2)(10)
 
8.59% (L + 6.50%/M)
 
9/18/2017
 
9/18/2023
 
16,666

 
16,555

 
16,433

 
 
 
 
 
 
 
 
 
 
 
 
39,166

 
38,904

 
38,618

 
3.74
 %
Kronos Incorporated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (2)
 
10.61% (L + 8.25%/Q)
 
10/26/2012
 
11/1/2024
 
36,000

 
35,533

 
37,305

 
3.61
 %
Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.34% (L + 6.25%/M)
 
9/24/2015
 
9/24/2021
 
29,175

 
28,958

 
29,175

 
 
 
 
First lien (2)(10)
 
8.34% (L + 6.25%/M)
 
7/27/2017
 
9/24/2021
 
3,713

 
3,683

 
3,713

 
 
 
 
First lien (3)(10)(11) - Drawn
 
9.09% (L + 7.00%/M)
 
9/24/2015
 
9/24/2021
 
1,350

 
1,333

 
1,350

 
 
 
 
 
 
 
 
 
 
 
 
34,238

 
33,974

 
34,238

 
3.32
 %
Navicure, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)
 
9.59% (L + 7.50%/M)
 
10/23/2017
 
10/31/2025
 
31,470

 
31,386

 
31,627

 
3.06
 %
Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)(10)
 
11.11% (L + 8.75%/Q)
 
2/1/2017
 
7/29/2022
 
14,518

 
14,375

 
14,663

 
 
 
 
Second lien (4)(10)
 
11.11% (L + 8.75%/Q)
 
7/31/2015
 
7/29/2022
 
5,000

 
4,967

 
5,000

 
 
 
 
Second lien (4)(10)
 
11.11% (L + 8.75%/Q)
 
11/5/2015
 
7/29/2022
 
4,154

 
4,126

 
4,154

 
 
 
 
Second lien (4)(10)
 
11.61% (L + 9.25%/Q)
 
2/1/2016
 
7/29/2022
 
3,273

 
3,250

 
3,273

 
 
 
 
Second lien (3)(10)
 
11.36% (L + 9.00%/Q)
 
10/14/2016
 
7/29/2022
 
2,361

 
2,343

 
2,361

 
 
 
 
Second lien (3)(10)
 
11.61% (L + 9.25%/Q)
 
8/8/2016
 
7/29/2022
 
1,825

 
1,811

 
1,825

 
 
 
 
Second lien (4)(10)
 
11.61% (L + 9.25%/Q)
 
8/8/2016
 
7/29/2022
 
300

 
298

 
300

 
 
 
 
 
 
 
 
 
 
 
 
31,431

 
31,170

 
31,576

 
3.06
 %
TDG Group Holding Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
First lien (2)(10)
 
7.83% (L + 5.50%/Q)
 
5/22/2018
 
5/31/2024
 
30,263

 
30,114

 
30,112

 
 
 
 
First lien (3)(10)(11) - Drawn
 
7.59% (L + 5.50%/M)
 
5/22/2018
 
5/31/2024
 
504

 
502

 
502

 
 
 
 
 
 
 
 
 
 
 
 
30,767

 
30,616

 
30,614

 
2.96
 %
Ansira Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)
 
7.86% (L + 5.75%/M)
 
12/19/2016
 
12/20/2022
 
25,790

 
25,688

 
25,725

 
 
 
 
First lien (3)
 
7.86% (L + 5.75%/M)
 
4/16/2018
 
12/20/2022
 
2,097

 
2,088

 
2,092

 
 
 
 
First lien (3)(11) - Drawn
 
7.73% (L + 5.75%/M)
 
12/19/2016
 
12/20/2022
 
826

 
823

 
824

 
 
 
 
 
 
 
 
 
 
 
 
28,713

 
28,599

 
28,641

 
2.77
 %
Wirepath LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (2)
 
6.83% (L + 4.50%/Q)
 
7/31/2017
 
8/5/2024
 
27,592

 
27,468

 
27,747

 
2.69
 %
Trader Interactive, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.84% (L + 5.75%/M)
 
6/15/2017
 
6/17/2024
 
27,054

 
26,875

 
27,054

 
2.62
 %

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


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (4)(10)
 
11.08% (L + 8.75%/Q)
 
6/30/2015
 
12/30/2021
 
$
18,161

 
$
18,037

 
$
18,210

 
 
 
 
Second lien (3)(10)
 
11.08% (L + 8.75%/Q)
 
4/16/2018
 
12/30/2021
 
6,181

 
6,122

 
6,198

 
 
 
 
 
 
 
 
 
 
 
 
24,342

 
24,159

 
24,408

 
2.36
 %
Keystone Acquisition Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)
 
7.58% (L + 5.25%/Q)
 
5/10/2017
 
5/1/2024
 
19,850

 
19,677

 
19,838

 
 
 
 
Second lien (3)
 
11.58% (L + 9.25%/Q)
 
5/10/2017
 
5/1/2025
 
4,500

 
4,458

 
4,534

 
 
 
 
 
 
 
 
 
 
 
 
24,350

 
24,135

 
24,372

 
2.36
 %
iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (4)(10)
 
9.35% (L + 7.25%/M)
 
8/4/2015
 
8/4/2022
 
17,451

 
17,337

 
17,451

 
 
 
 
First lien (4)(10)
 
8.34% (L + 6.25%/M)
 
6/16/2017
 
8/4/2022
 
4,554

 
4,535

 
4,554

 
 
 
 
First lien (2)(10)
 
8.34% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
1,155

 
1,150

 
1,155

 
 
 
 
First lien (4)(10)
 
8.34% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
508

 
506

 
508

 
 
 
 
 
 
 
 
 
 
 
 
23,668

 
23,528

 
23,668

 
2.29
 %
AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (2)(10)
 
10.24% (L + 8.25%/M)
 
9/30/2015
 
9/30/2020
 
22,782

 
22,611

 
22,782

 
2.21
 %
EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.09% (L + 6.00%/M)
 
7/30/2015
 
6/30/2021
 
20,786

 
20,670

 
20,786

 
 
 
 
First lien (2)(10)
 
8.09% (L + 6.00%/M)
 
7/30/2015
 
6/30/2021
 
1,202

 
1,195

 
1,202

 
 
 
 
 
 
 
 
 
 
 
 
21,988

 
21,865

 
21,988

 
2.13
 %
Avatar Topco, Inc. (23)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EAB Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Second lien (3)
 
10.00% (L + 7.50%/Q)
 
11/17/2017
 
11/17/2025
 
21,450

 
21,146

 
21,021

 
2.04
 %
Brave Parent Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (5)
 
9.83% (L + 7.50%/Q)
 
4/17/2018
 
4/17/2026
 
20,231

 
20,132

 
20,332

 
1.97
 %
Help/Systems Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (5)
 
9.84% (L + 7.75%/M)
 
3/23/2018
 
3/27/2026
 
20,231

 
20,132

 
20,244

 
1.96
 %
TWDiamondback Holdings Corp. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diamondback Drugs of Delaware, L.L.C. (TWDiamondback II Holdings LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (4)(10)
 
10.84% (L + 8.75%/M)
 
11/19/2014
 
11/19/2019
 
17,891

 
17,891

 
17,891

 
 
 
 
First lien (3)(10)
 
10.84% (L + 8.75%/M)
 
11/19/2014
 
11/19/2019
 
1,491

 
1,491

 
1,491

 
 
 
 
First lien (4)(10)
 
10.84% (L + 8.75%/M)
 
11/19/2014
 
11/19/2019
 
418

 
418

 
418

 
 
 
 
 
 
 
 
 
 
 
 
19,800

 
19,800

 
19,800

 
1.92
 %
DiversiTech Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
Second lien (3)
 
9.84% (L + 7.50%/Q)
 
5/18/2017
 
6/2/2025
 
19,500

 
19,324

 
19,793

 
1.92
 %
AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (2)(10)
 
10.35% (L + 8.25%/M)
 
7/23/2014
 
7/23/2020
 
18,500

 
18,425

 
18,500

 
1.79
 %
DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)(10)
 
7.58% (L + 5.25%/Q)
 
7/2/2015
 
7/2/2021
 
17,363

 
17,269

 
17,363

 
 
 
 
First lien (3)(10)(11) - Drawn
 
7.58% (L + 5.25%/Q)
 
12/20/2017
 
7/2/2021
 
505

 
387

 
505

 
 
 
 
 
 
 
 
 
 
 
 
17,868

 
17,656

 
17,868

 
1.73
 %
BackOffice Associates Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
9.60% (L + 7.50%/M)
 
8/25/2017
 
8/25/2023
 
18,445

 
18,302

 
17,578

 
1.70
 %

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)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
VF Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)(10)
 
11.09% (L + 9.00%/M)
 
7/7/2016
 
6/28/2024
 
$
17,086

 
$
17,377

 
$
17,427

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

 
14,744

 
16,219

 
1.57
 %
Hill International, Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.08% (L + 5.75%/Q)
 
6/21/2017
 
6/21/2023
 
15,642

 
15,575

 
15,642

 
1.52
 %
FR Arsenal Holdings II Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
9.63% (L + 7.25%/Q)
 
9/29/2016
 
9/8/2022
 
15,278

 
15,156

 
15,306

 
1.48
 %
OEConnection LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
10.10% (L + 8.00%/M)
 
11/22/2017
 
11/22/2025
 
15,160

 
14,962

 
15,160

 
1.47
 %
Netsmart Inc. / Netsmart Technologies, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Information Technology
 
Second lien (2)
 
11.57% (L + 9.50%/M)
 
4/18/2016
 
10/19/2023
 
15,000

 
14,705

 
15,075

 
1.46
 %
Xactly Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (4)(10)
 
9.35% (L + 7.25%/M)
 
7/31/2017
 
7/29/2022
 
14,690

 
14,563

 
14,543

 
1.41
 %
Transcendia Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Packaging
 
Second lien (3)
 
10.09% (L + 8.00%/M)
 
6/28/2017
 
5/30/2025
 
14,500

 
14,318

 
14,391

 
1.39
 %
Peraton Holding Corp. (fka MHVC Acquisition Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (2)
 
7.59% (L + 5.25%/Q)
 
4/25/2017
 
4/29/2024
 
13,959

 
13,919

 
14,064

 
1.36
 %
NorthStar Financial Services Group, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (5)
 
9.59% (L + 7.50%/M)
 
5/23/2018
 
5/25/2026
 
13,450

 
13,417

 
13,652

 
1.32
 %
TW-NHME Holdings Corp. (20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)(10)
 
11.55% (L + 9.25%/Q)(24)
 
7/14/2015
 
7/14/2022
 
27,300

 
27,061

 
13,650

 
1.32
 %
Castle Management Borrower LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
8.85% (L + 6.50%/Q)
 
5/31/2018
 
2/15/2024
 
13,413

 
13,346

 
13,346

 
1.29
 %
Project Accelerate Parent, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)(10)
 
10.50% (L + 8.50%/M)
 
1/2/2018
 
1/2/2026
 
13,473

 
13,311

 
13,305

 
1.29
 %
Ministry Brands, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)(10)
 
11.75% (L + 9.25%/Q)
 
12/7/2016
 
6/2/2023
 
7,840

 
7,792

 
7,840

 
 
 
 
First lien (3)
 
6.10% (L + 4.00%/M)
 
12/7/2016
 
12/2/2022
 
2,978

 
2,966

 
2,978

 
 
 
 
Second lien (3)(10)
 
11.75% (L + 9.25%/Q)
 
12/7/2016
 
6/2/2023
 
2,160

 
2,147

 
2,160

 
 
 
 
First lien (3)(10)(11) - Drawn
 
7.10% (L + 5.00%/M)
 
12/7/2016
 
12/2/2022
 
300

 
299

 
300

 
 
 
 
 
 
 
 
 
 
 
 
13,278

 
13,204

 
13,278

 
1.29
 %
PPVA Black Elk (Equity) LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Subordinated (3)(10)
 
—
 
5/3/2013
 
—
 
14,500

 
14,500

 
12,180

 
1.18
 %
SSH Group Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (2)(10)
 
7.45% (L + 5.00%/Q)
 
10/13/2017
 
10/2/2024
 
8,365

 
8,326

 
8,365

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

 
3,331

 
3,430

 
 
 
 
 
 
 
 
 
 
 
 
11,728

 
11,657

 
11,795

 
1.14
 %

The accompanying notes are an integral part of these consolidated financial statements.
10
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
CHA Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (4)
 
10.84% (L + 8.75%/Q)
 
4/3/2018
 
4/10/2026
 
$
7,012

 
$
6,943

 
$
7,047

 
 
 
 
Second lien (3)
 
10.84% (L + 8.75%/Q)
 
4/3/2018
 
4/10/2026
 
4,453

 
4,409

 
4,475

 
 
 
 
 
 
 
 
 
 
 
 
11,465

 
11,352

 
11,522

 
1.12
 %
Zywave, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (4)(10)
 
11.33% (L + 9.00%/Q)
 
11/22/2016
 
11/17/2023
 
11,000

 
10,932

 
11,006

 
 
 
 
First lien (3)(10)(11) - Drawn
 
7.09% (L + 5.00%/M)
 
11/22/2016
 
11/17/2022
 
470

 
466

 
470

 
 
 
 
 
 
 
 
 
 
 
 
11,470

 
11,398

 
11,476

 
1.11
 %
QC McKissock Investment, LLC (14)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
McKissock, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (2)(10)
 
8.08% (L + 5.75%/Q)
 
8/6/2014
 
8/5/2021
 
6,383

 
6,358

 
6,383

 
 
 
 
First lien (2)(10)
 
8.08% (L + 5.75%/Q)
 
8/6/2014
 
8/5/2021
 
3,043

 
3,033

 
3,043

 
 
 
 
First lien (2)(10)
 
8.08% (L + 5.75%/Q)
 
8/6/2014
 
8/5/2021
 
982

 
978

 
982

 
 
 
 
First lien (2)(10)
 
8.08% (L + 5.75%/Q)
 
5/23/2018
 
8/5/2021
 
575

 
565

 
575

 
 
 
 
 
 
 
 
 
 
 
 
10,983

 
10,934

 
10,983

 
1.06
 %
Amerijet Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
First lien (4)(10)
 
10.10% (L + 8.00%/M)
 
7/15/2016
 
7/15/2021
 
9,294

 
9,248

 
9,326

 
 
 
 
First lien (4)(10)
 
10.10% (L + 8.00%/M)
 
7/15/2016
 
7/15/2021
 
1,549

 
1,541

 
1,554

 
 
 
 
 
 
 
 
 
 
 
 
10,843

 
10,789

 
10,880

 
1.05
 %
Vectra Co.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Products
 
Second lien (3)
 
9.34% (L + 7.25%/M)
 
2/23/2018
 
3/8/2026
 
10,788

 
10,749

 
10,829

 
1.05
 %
Masergy Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (2)
 
9.83% (L + 7.50%/Q)
 
12/14/2016
 
12/16/2024
 
10,500

 
10,449

 
10,561

 
1.02
 %
Idera, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (4)
 
11.10% (L + 9.00%/M)
 
6/27/2017
 
6/27/2025
 
10,000

 
9,862

 
10,150

 
0.98
 %
FPC Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
Second lien (3)
 
11.09% (L + 9.00%/M)
 
3/28/2018
 
5/19/2023
 
10,116

 
9,725

 
10,103

 
0.98
 %
WD Wolverine Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)
 
7.59% (L + 5.50%/M)
 
2/22/2017
 
8/16/2022
 
9,663

 
9,414

 
9,566

 
0.93
 %
J.D. Power (fka J.D. Power and Associates)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
10.59% (L + 8.50%/M)
 
6/9/2016
 
9/7/2024
 
9,333

 
9,235

 
9,462

 
0.92
 %
JAMF Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)(10)
 
10.36% (L + 8.00%/Q)
 
11/13/2017
 
11/11/2022
 
8,757

 
8,679

 
8,670

 
0.84
 %
Pathway Vet Alliance LLC (fka Pathway Partners Vet Management Company LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
Second lien (4)
 
10.09% (L + 8.00%/M)
 
10/4/2017
 
10/10/2025
 
7,597

 
7,561

 
7,559

 
 
 
 
Second lien (4)
 
10.09% (L + 8.00%/M)
 
10/4/2017
 
10/10/2025
 
403

 
401

 
401

 
 
 
 
 
 
 
 
 
 
 
 
8,000

 
7,962

 
7,960

 
0.77
 %
Affinity Dental Management, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (2)(10)
 
8.30% (L + 6.00%/Q)
 
9/15/2017
 
9/15/2023
 
4,344

 
4,305

 
4,301

 
 
 
 
First lien (3)(10)(11) - Drawn
 
8.50% (L + 6.00%/Q)
 
9/15/2017
 
9/15/2023
 
3,265

 
3,241

 
3,240

 
 
 
 
 
 
 
 
 
 
 
 
7,609

 
7,546

 
7,541

 
0.73
 %

The accompanying notes are an integral part of these consolidated financial statements.
11
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Autodata, Inc. (Autodata Solutions, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
9.34% (L + 7.25%/M)
 
12/12/2017
 
12/12/2025
 
$
7,406

 
$
7,388

 
$
7,503

 
0.73
 %
MH Sub I, LLC (Micro Holding Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)
 
9.59% (L + 7.50%/M)
 
8/16/2017
 
9/15/2025
 
7,000

 
6,935

 
7,053

 
0.68
 %
DG Investment Intermediate Holdings 2, Inc. (aka Convergint Technologies Holdings, LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
9.08% (L + 6.75%/Q)
 
1/29/2018
 
2/2/2026
 
6,732

 
6,700

 
6,817

 
0.66
 %
DigiCert Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
10.09% (L + 8.00%/M)
 
9/20/2017
 
10/31/2025
 
6,898

 
6,865

 
6,790

 
0.66
 %
CP VI Bella Midco, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)
 
8.84% (L + 6.75%/M)
 
1/25/2018
 
12/29/2025
 
6,732

 
6,700

 
6,716

 
0.65
 %
First American Payment Systems, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)
 
6.76% (L + 4.75%/M)
 
1/3/2017
 
1/5/2024
 
6,625

 
6,570

 
6,683

 
0.65
 %
DealerSocket, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (2)
 
6.84% (L + 4.75%/M)
 
4/16/2018
 
4/26/2023
 
6,711

 
6,662

 
6,644

 
0.64
 %
ProQuest LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Second lien (3)
 
11.09% (L + 9.00%/M)
 
12/14/2015
 
12/15/2022
 
6,020

 
5,934

 
6,020

 
0.58
 %
Solera LLC / Solera Finance, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Subordinated (3)
 
10.50%/S
 
2/29/2016
 
3/1/2024
 
5,000

 
4,803

 
5,578

 
0.54
 %
Applied Systems, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Second lien (3)
 
9.33% (L + 7.00%/Q)
 
9/14/2017
 
9/19/2025
 
4,923

 
4,923

 
5,093

 
0.49
 %
ADG, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)(10)
 
11.09% (L + 9.00%/M)
 
10/3/2016
 
3/28/2024
 
5,000

 
4,938

 
4,842

 
0.47
 %
York Risk Services Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Subordinated (3)
 
8.50%/S
 
9/17/2014
 
10/1/2022
 
3,000

 
3,000

 
2,768

 
0.28
 %
Ensemble S Merger Sub, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
Subordinated (3)
 
9.00%/S
 
9/21/2015
 
9/30/2023
 
2,000

 
1,950

 
2,110

 
0.21
 %
Education Management Corporation (12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education Management II LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First Lien (2)
 
10.50% (P + 5.50%/Q) (24)
 
1/5/2015
 
7/2/2020
 
211

 
205

 
45

 
 
 
 
First Lien (3)
 
10.50% (P + 5.50%/Q) (24)
 
1/5/2015
 
7/2/2020
 
119

 
116

 
25

 
 
 
 
First Lien (2)
 
13.50% (P + 8.50%/Q) (24)
 
1/5/2015
 
7/2/2020
 
475

 
437

 
4

 
 
 
 
First Lien (3)
 
13.50% (P + 8.50%/Q) (24)
 
1/5/2015
 
7/2/2020
 
268

 
246

 
2

 
 
 
 
 
 
 
 
 
 
 
 
1,073

 
1,004

 
76

 
0.01
 %
Total Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
1,454,144

 
$
1,444,433

 
$
1,440,427

 
139.49
 %
Total Funded Debt Investments
 
 
 
 
 
 
 
 
 
$
1,536,173

 
$
1,525,982

 
$
1,522,513

 
147.44
 %
Equity - Hong Kong
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bach Special Limited (Bach Preference Limited)**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Preferred shares (3)(10)(22)
 
—
 
9/1/2017
 
—
 
62,591

 
$
6,179

 
$
6,173

 
0.60
 %
Total Shares - Hong Kong
 
 
 
 
 
 
 
 
 
 
 
$
6,179

 
$
6,173

 
0.60
 %

The accompanying notes are an integral part of these consolidated financial statements.
12
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Equity - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Avatar Topco, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Preferred shares (3)(10)(23)
 
—
 
11/17/2017
 
—
 
35,750

 
$
37,618

 
$
37,530

 
3.63
 %
Tenawa Resource Holdings LLC (13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QID NGL LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
Ordinary shares (7)(10)
 
—
 
5/12/2014
 
—
 
5,290,997

 
5,291

 
12,281

 
 
 
 
Preferred shares (7)(10)
 
—
 
10/30/2017
 
—
 
1,002,679

 
1,003

 
1,517

 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,294

 
13,798

 
1.34
 %
TWDiamondback Holdings Corp. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distribution & Logistics
 
Preferred shares (4)(10)
 
—
 
11/19/2014
 
—
 
200

 
2,000

 
4,600

 
0.45
 %
Ancora Acquisition LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Preferred shares (6)(10)
 
—
 
8/12/2013
 
—
 
372

 
83

 
393

 
0.03
 %
Education Management Corporation (12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Preferred shares (2)
 
—
 
1/5/2015
 
—
 
3,331

 
200

 
—

 
 
 
 
Preferred shares (3)
 
—
 
1/5/2015
 
—
 
1,879

 
113

 
—

 
 
 
 
Ordinary shares (2)
 
—
 
1/5/2015
 
—
 
2,994,065

 
100

 
9

 
 
 
 
Ordinary shares (3)
 
—
 
1/5/2015
 
—
 
1,688,976

 
56

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
469

 
14

 
—
 %
TW-NHME Holdings Corp. (20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Preferred shares (3)(10)
 
—
 
7/14/2015
 
—
 
100

 
1,000

 
—

 
 
 
 
Preferred shares (3)(10)
 
—
 
1/5/2016
 
—
 
16

 
158

 
—

 
 
 
 
Preferred shares (3)(10)
 
—
 
6/30/2016
 
—
 
6

 
68

 
—

 
 
 
 
Preferred shares (3)(10)
 
—
 
3/29/2018
 
—
 
40

 
162

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,388

 
—

 
—
 %
Total Shares - United States
 
 
 
 
 
 
 
 
 
 
 
$
47,852

 
$
56,335

 
5.45
 %
Total Shares
 
 
 
 
 
 
 
 
 
 
 
$
54,031

 
$
62,508

 
6.05
 %
Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASP LCG Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Warrants (3)(10)
 
—
 
5/5/2014
 
5/5/2026
 
622

 
$
37

 
$
495

 
0.05
 %
Ancora Acquisition LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Warrants (6)(10)
 
—
 
8/12/2013
 
8/12/2020
 
20

 
—

 
—

 
—
 %
Total Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
$
37

 
$
495

 
0.05
 %
Total Funded Investments
 
 
 
 
 
 
 
 
 
 
 
$
1,580,050

 
$
1,585,516

 
153.54
 %
Unfunded Debt Investments - Canada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dentalcorp Perfect Smile ULC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
Second lien (3)(11) - Undrawn
 
—
 
6/1/2018
 
6/6/2020
 
$
4,500

 
$
—

 
$
—

 
—
 %
Total Unfunded Debt Investments - Canada
 
 
 
 
 
 
 
 
 
$
4,500

 
$
—

 
$
—

 
—
 %

The accompanying notes are an integral part of these consolidated financial statements.
13
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
First lien (3)(11) - Undrawn
 
—
 
5/15/2015
 
4/20/2021
 
$
1,305

 
$
(13
)
 
$
—

 
 
 
 
First lien (3)(11) - Undrawn
 
—
 
12/29/2017
 
12/29/2019
 
6,670

 
(58
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
7,975

 
(71
)
 
—

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
7/2/2015
 
7/2/2021
 
2,100

 
(21
)
 
—

 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
12/20/2017
 
12/20/2019
 
12,960

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
15,060

 
(21
)
 
—

 
—
 %
iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
8/4/2015
 
8/4/2021
 
1,000

 
(10
)
 
—

 
—
 %
Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/24/2015
 
9/24/2021
 
2,400

 
(30
)
 
—

 
—
 %
Ministry Brands, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
12/7/2016
 
12/2/2022
 
700

 
(4
)
 
—

 
—
 %
Zywave, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
11/22/2016
 
11/17/2022
 
1,530

 
(11
)
 
—

 
—
 %
Trader Interactive, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
6/15/2017
 
6/15/2023
 
1,673

 
(13
)
 
—

 
—
 %
DealerSocket, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)(11) - Undrawn
 
—
 
4/16/2018
 
4/26/2023
 
560

 
(4
)
 
(6
)
 
—
 %
JAMF Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
11/13/2017
 
11/11/2022
 
750

 
(8
)
 
(8
)
 
—
 %
Xactly Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
7/31/2017
 
7/29/2022
 
992

 
(10
)
 
(10
)
 
—
 %
Ansira Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (3)(11) - Undrawn
 
—
 
12/19/2016
 
4/16/2020
 
6,403

 
(20
)
 
(16
)
 
—
 %
NM GRC Holdco, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
2/9/2018
 
2/9/2024
 
11,563

 
(29
)
 
(29
)
 
—
 %
Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (3)(11) - Undrawn
 
—
 
6/8/2018
 
10/30/2021
 
6,743

 
(34
)
 
(34
)
 
—
 %
TDG Group Holding Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
5/22/2018
 
5/29/2020
 
3,363

 
—

 
(17
)
 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
5/22/2018
 
5/31/2024
 
4,539

 
(23
)
 
(23
)
 
 
 
 
 
 
 
 
 
 
 
 
7,902

 
(23
)
 
(40
)
 
(0.01
)%

The accompanying notes are an integral part of these consolidated financial statements.
14
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Affinity Dental Management, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Healthcare Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/15/2017
 
3/15/2019
 
$
8,319

 
$
(21
)
 
$
(62
)
 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/15/2017
 
3/15/2023
 
1,737

 
(17
)
 
(17
)
 
 
 
 
 
 
 
 
 
 
 
 
10,056

 
(38
)
 
(79
)
 
(0.01
)%
Frontline Technologies Group Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/18/2017
 
9/18/2019
 
7,738

 
(58
)
 
(108
)
 
(0.01
)%
BackOffice Associates Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
8/25/2017
 
8/24/2018
 
3,448

 
(13
)
 
(162
)
 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
8/25/2017
 
8/25/2023
 
2,586

 
(23
)
 
(122
)
 
 
 
 
 
 
 
 
 
 
 
 
6,034

 
(36
)
 
(284
)
 
(0.03
)%
Salient CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Services
 
First lien (3)(11) - Undrawn
 
—
 
6/26/2018
 
11/29/2021
 
6,125

 
(490
)
 
(490
)
 
(0.05
)%
Total Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
95,204

 
$
(910
)
 
$
(1,104
)
 
(0.11
)%
Total Unfunded Debt Investments
 
 
 
 
 
 
 
 
 
$
99,704

 
$
(910
)
 
$
(1,104
)
 
(0.11
)%
Total Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
$
1,579,140

 
$
1,584,412

 
153.43
 %
Non-Controlled/Affiliated Investments (25)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Permian Holdco 1, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Permian Holdco 2, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Permian Holdco 3, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
First lien (3)(10)(11) - Drawn
 
8.56% (L + 6.50%/Q)
 
6/14/2018
 
6/30/2022
 
$
10,000

 
$
10,000

 
$
10,000

 
 
 
 
First lien (3)(10)
 
12.56% (L + 10.50%/Q)
 
6/14/2018
 
6/30/2022
 
10,000

 
10,000

 
10,000

 
 
 
 
Subordinated (3)(10)
 
14.00% PIK/Q*
 
10/31/2016
 
10/15/2021
 
2,149

 
2,149

 
2,149

 
 
 
 
Subordinated (3)(10)
 
14.00% PIK/Q*
 
10/31/2016
 
10/15/2021
 
1,107

 
1,107

 
1,107

 
 
 
 
 
 
 
 
 
 
 
 
23,256

 
23,256

 
23,256

 
2.25
 %
Total Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
23,256

 
$
23,256

 
$
23,256

 
2.25
 %
Equity - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HI Technology Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Preferred shares (3)(10)(21)
 
—
 
3/21/2017
 
—
 
2,768,000

 
$
105,155

 
$
115,830

 
11.22
 %
NMFC Senior Loan Program I LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Fund
 
Membership interest (3)(10)
 
—
 
6/13/2014
 
—
 
—

 
23,000

 
23,000

 
2.23
 %
Sierra Hamilton Holdings Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
Ordinary shares (2)(10)
 
—
 
7/31/2017
 
—
 
25,000,000

 
11,501

 
11,271

 
 
 
 
Ordinary shares (3)(10)
 
—
 
7/31/2017
 
—
 
2,768,000

 
1,281

 
1,256

 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,782

 
12,527

 
1.21
 %

The accompanying notes are an integral part of these consolidated financial statements.
15
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Permian Holdco 1, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
Preferred shares (3)(10)(17)
 
—
 
10/31/2016
 
—
 
1,664,791

 
$
7,355

 
$
9,156

 
 
 
 
Ordinary shares (3)(10)
 
—
 
10/31/2016
 
—
 
1,366,452

 
1,350

 
607

 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,705

 
9,763

 
0.95
 %
Total Shares - United States
 
 
 
 
 
 
 
 
 
 
 
$
149,642

 
$
161,120

 
15.61
 %
Total Funded Investments
 
 
 
 
 
 
 
 
 
 
 
$
172,898

 
$
184,376

 
17.86
 %
Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Permian Holdco 3, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy
 
First lien (3)(10)(11) - Undrawn
 
—
 
6/14/2018
 
6/30/2022
 
$
10,000

 
$
—

 
$
—

 
—
 %
Total Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
10,000

 
$
—

 
$
—

 
—
 %
Total Non-Controlled/Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
$
172,898

 
$
184,376

 
17.86
 %
Controlled Investments (26)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Edmentum Ultimate Holdings, LLC (16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Second lien (3)(10)
 
7.00% PIK/Q*
 
2/23/2018
 
12/9/2021
 
$
10,794

 
$
10,087

 
$
9,986

 
 
 
 
Second lien (3)(10)(11) - Drawn
 
5.00% PIK/Q*
 
6/9/2015
 
12/9/2021
 
6,995

 
6,995

 
6,995

 
 
 
 
Subordinated (2)(10)
 
10.00% PIK/Q*
 
6/9/2015
 
6/9/2020
 
17,613

 
17,613

 
14,091

 
 
 
 
Subordinated (3)(10)
 
8.50% PIK/Q*
 
6/9/2015
 
6/9/2020
 
4,685

 
4,681

 
4,685

 
 
 
 
Subordinated (3)(10)
 
10.00% PIK/Q*
 
6/9/2015
 
6/9/2020
 
4,333

 
4,333

 
3,466

 
 
 
 
 
 
 
 
 
 
 
 
44,420

 
43,709

 
39,223

 
3.80
 %
UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (2)(10)
 
7.59% (L + 5.50%/M)
 
6/29/2018
 
6/29/2023
 
12,573

 
12,573

 
12,573

 
 
 
 
First lien (2)(10)
 
10.60% (L + 8.50%/M)
 
1/13/2015
 
1/13/2019
 
10,253

 
10,253

 
10,253

 
 
 
 
Subordinated (2)(10)
 
15.00% PIK/Q*
 
1/13/2015
 
7/13/2019
 
2,157

 
2,157

 
2,157

 
 
 
 
Subordinated (3)(10)
 
15.00% PIK/Q*
 
1/13/2015
 
7/13/2019
 
1,291

 
1,291

 
1,291

 
 
 
 
 
 
 
 
 
 
 
 
26,274

 
26,274

 
26,274

 
2.54
 %
Total Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
70,694

 
$
69,983

 
$
65,497

 
6.34
 %
Equity - Canada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NM APP Canada Corp.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
9/13/2016
 
—
 
—

 
$
7,345

 
$
8,475

 
0.82
 %
Total Shares - Canada
 
 
 
 
 
 
 
 
 
 
 
$
7,345

 
$
8,475

 
0.82
 %
Equity - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NMFC Senior Loan Program II LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Fund
 
Membership interest (3)(10)
 
—
 
5/3/2016
 
—
 
—

 
$
79,400

 
$
79,400

 
7.69
 %

The accompanying notes are an integral part of these consolidated financial statements.
16
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Preferred shares (2)(10)(18)
 
—
 
1/13/2015
 
—
 
23,246,214

 
$
20,866

 
$
21,514

 
 
 
 
Preferred shares (3)(10)(18)
 
—
 
6/30/2017
 
—
 
6,424,148

 
5,766

 
5,946

 
 
 
 
Preferred shares (3)(10)(19)
 
—
 
1/13/2015
 
—
 
11,920,134

 
11,920

 
11,920

 
 
 
 
Ordinary shares (2)(10)
 
—
 
1/13/2015
 
—
 
2,096,477

 
1,925

 
12,175

 
 
 
 
Ordinary shares (3)(10)
 
—
 
1/13/2015
 
—
 
1,993,749

 
532

 
11,578

 
 
 
 
 
 
 
 
 
 
 
 
 
 
41,009

 
63,133

 
6.11
 %
NMFC Senior Loan Program III LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Fund
 
Membership interest (3)(10)
 
—
 
5/4/2018
 
—
 
—

 
42,800

 
42,800

 
4.15
 %
NM NL Holdings, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
6/20/2018
 
—
 
—

 
20,229

 
20,229

 
1.96
 %
NM GLCR LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
2/1/2018
 
—
 
—

 
14,750

 
14,750

 
1.43
 %
NM CLFX LP
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
10/6/2017
 
—
 
—

 
12,538

 
12,538

 
1.21
 %
NM KRLN LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
11/15/2016
 
—
 
—

 
7,510

 
8,462

 
0.82
 %
NM DRVT LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
11/18/2016
 
—
 
—

 
5,152

 
5,507

 
0.53
 %
NM APP US LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
9/13/2016
 
—
 
—

 
5,080

 
5,274

 
0.51
 %
NM JRA LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Lease
 
Membership interest (8)(10)
 
—
 
8/12/2016
 
—
 
—

 
2,043

 
2,240

 
0.22
 %
Edmentum Ultimate Holdings, LLC (16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Ordinary shares (3)(10)
 
—
 
6/9/2015
 
—
 
123,968

 
11

 
84

 
 
 
 
Ordinary shares (2)(10)
 
—
 
6/9/2015
 
—
 
107,143

 
9

 
72

 
 
 
 
 
 
 
 
 
 
 
 
 
 
20

 
156

 
0.02
 %
Total Shares - United States
 
 
 
 
 
 
 
 
 
 
 
$
230,531

 
$
254,489

 
24.65
 %
Total Shares
 
 
 
 
 
 
 
 
 
 
 
$
237,876

 
$
262,964

 
25.47
 %
Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Edmentum Ultimate Holdings, LLC (16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Warrants (3)(10)
 
—
 
2/23/2018
 
5/5/2026
 
1,141,846

 
$
769

 
$
769

 
0.07
 %
UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
Warrants (3)(10)
 
—
 
6/30/2017
 
12/31/2018
 
526,925

 
—

 
—

 
—
 %
Total Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
$
769

 
$
769

 
0.07
 %
Total Funded Investments
 
 
 
 
 
 
 
 
 
 
 
$
308,628

 
$
329,230

 
31.88
 %

The accompanying notes are an integral part of these consolidated financial statements.
17
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


Portfolio Company, Location and Industry (1)
 
Type of Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity / Expiration Date
 
 Principal
 Amount,
 Par Value
 or Shares
 
 Cost
 
 Fair
 Value
 
Percent of Net
Assets
Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
6/29/2018
 
6/29/2023
 
$
2,515

 
$
—

 
$
—

 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
1/13/2015
 
1/13/2019
 
2,048

 
—

 
—

 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
1/13/2015
 
1/13/2019
 
758

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
5,321

 
—

 
—

 
—
 %
Edmentum Ultimate Holdings, LLC (16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Education
 
Second lien (3)(10)(11) - Undrawn
 
—
 
6/9/2015
 
12/9/2021
 
514

 
—

 
—

 
—
 %
Total Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
5,835

 
$
—

 
$
—

 
—
 %
Total Controlled Investments
 
 
 
 
 
 
 
 
 
 
 
$
308,628

 
$
329,230

 
31.88
 %
Total Investments
 
 
 
 
 
 
 
 
 
 
 
$
2,060,666

 
$
2,098,018

 
203.17
 %
 
(1)
New Mountain Finance Corporation (the “Company”) generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). These investments are generally subject to certain limitations on resale, and may be deemed to be “restricted securities” under the Securities Act.
(2)
Investment is pledged as collateral for the Holdings Credit Facility, a revolving credit facility among the Company as Collateral Manager, New Mountain Finance Holdings, L.L.C. (“NMF Holdings”) as the Borrower, Wells Fargo Securities, LLC as the Administrative Agent, and Wells Fargo Bank, National Association, as the Lender and Collateral Custodian. See Note 7. Borrowings, for details.
(3)
Investment is pledged as collateral for the NMFC Credit Facility, a revolving credit facility among the Company as the Borrower and Goldman Sachs Bank USA as the Administrative Agent and the Collateral Agent and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A. and Stifel Bank & Trust as Lenders. See Note 7. Borrowings, for details.
(4)
Investment is held in New Mountain Finance SBIC, L.P.
(5)
Investment is held in New Mountain Finance SBIC II, L.P.
(6)
Investment is held in NMF Ancora Holdings, Inc.
(7)
Investment is held in NMF QID NGL Holdings, Inc.
(8)
Investment is held in New Mountain Net Lease Corporation.
(9)
All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (L), the Prime Rate (P) and the alternative base rate (Base) and which resets monthly (M), quarterly (Q), semi-annually (S) or annually (A). For each investment the current interest rate provided reflects the rate in effect as of June 30, 2018.
(10)
The fair value of the Company's investment is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 4. Fair Value, for details.
(11)
Par Value amounts represent the drawn or undrawn (as indicated in type of investment) portion of revolving credit facilities or delayed draws. Cost amounts represent the cash received at settlement date net of the impact of paydowns and cash paid for drawn revolvers or delayed draws.
(12)
The Company holds investments in Education Management Corporation and one related entity of Education Management Corporation. The Company holds series A-1 convertible preferred stock and common stock in Education Management Corporation and holds a tranche A first lien term loan and a tranche B first lien term loan in Education Management II LLC, which is an indirect subsidiary of Education Management Corporation.
(13)
The Company holds investments in two related entities of Tenawa Resource Holdings LLC. The Company holds 4.77% of the common units in QID NGL LLC (which at closing represented 98.1% of the ownership in the common units in Tenawa Resource Holdings LLC), class A preferred units in QID NGL LLC and a first lien investment in Tenawa Resource Management LLC, a wholly-owned subsidiary of Tenawa Resource Holdings LLC.
(14)
The Company holds investments in QC McKissock Investment, LLC and one related entity of QC McKissock Investment, LLC. The Company holds a first lien term loan in QC McKissock Investment, LLC (which at closing represented 71.1% of the ownership in the Series A common units of McKissock Investment Holdings, LLC) and holds first lien term loans and a delayed draw term loan in McKissock, LLC, a wholly-owned subsidiary of McKissock Investment Holdings, LLC.
(15)
The Company holds investments in TWDiamondback Holdings Corp. and one related entity of TWDiamondback Holdings Corp. The Company holds preferred equity in TWDiamondback Holdings Corp. and holds a first lien last out term loan and a delayed draw term loan in Diamondback Drugs of Delaware LLC, a wholly-owned subsidiary of TWDiamondback Holdings Corp.

The accompanying notes are an integral part of these consolidated financial statements.
18
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


(16)
The Company holds investments in Edmentum Ultimate Holdings, LLC and its related entities. The Company holds subordinated notes, ordinary equity, and warrants in Edmentum Ultimate Holdings, LLC and holds a second lien revolver and a second lien term loan in Edmentum, Inc. and Archipelago Learning, Inc., which are wholly-owned subsidiaries of Edmentum Ultimate Holdings, LLC.
(17)
The Company holds preferred equity in Permian Holdco 1, Inc. that is entitled to receive cumulative preferential dividends at a rate of 12.0% per annum payable in additional shares.
(18)
The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 13.5% per annum payable in additional shares.
(19)
The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 19.0% per annum payable in additional shares.
(20)
The Company holds equity investments in TW-NHME Holdings Corp., and holds a second lien term loan investment in National HME, Inc., a wholly-owned subsidiary of TW-NHME Holdings Corp.
(21)
The Company holds convertible preferred equity in HI Technology Corp that is accruing dividends at a rate of 15.0% per annum.
(22)
The Company holds preferred equity in Bach Special Limited (Bach Preference Limited) that is entitled to receive cumulative preferential dividends at a rate of 12.25% per annum payable in additional shares.
(23)
The Company holds preferred equity in Avatar Topco, Inc., and holds a second lien term loan investment in EAB Global, Inc., a wholly-owned subsidiary of Avatar Topco, Inc. The preferred equity is entitled to receive cumulative preferential dividends at a rate of L + 11.00% per annum.
(24)
Investment or a portion of the investment is on non-accrual status. See Note 3. Investments, for details.
(25)
Denotes investments in which the Company is an “Affiliated Person”, as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), due to owning or holding the power to vote 5.0% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of June 30, 2018 and December 31, 2017, along with transactions during the six months ended June 30, 2018 in which the issuer was a non-controlled/affiliated investment, is as follows:
Portfolio Company
 
Fair Value at
December 31, 2017
 
Gross
Additions
(A)
 
Gross
Redemptions
(B)
 
Net
Realized
Gains
(Losses)
 
Net Change In
Unrealized
Appreciation
(Depreciation)
 
Fair Value at
June 30, 2018
 
Interest
Income
 
Dividend
Income
 
Other
Income
Edmentum Ultimate Holdings, LLC/Edmentum Inc.
 
$
24,858

 
$
—

 
$
(24,858
)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

HI Technology Corp.
 
105,155

 
—

 
—

 
—

 
10,675

 
115,830

 
—

 
7,500

 
—

NMFC Senior Loan Program I LLC
 
23,000

 
—

 
—

 
—

 
—

 
23,000

 
—

 
1,636

 
596

Permian Holdco 1, Inc. / Permian Holdco 2, Inc. / Permian Holdco 3, Inc.
 
12,733

 
21,079

 
—

 
—

 
(793
)
 
33,019

 
312

 
526

 
618

Sierra Hamilton Holdings Corporation
 
12,330

 
—

 
—

 
—

 
197

 
12,527

 
—

 
—

 
—

Total Non-Controlled/Affiliated Investments
 
$
178,076

 
$
21,079

 
$
(24,858
)
 
$
—

 
$
10,079

 
$
184,376

 
$
312

 
$
9,662

 
$
1,214

 
(A)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, payment-in-kind ("PIK") interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement of an existing portfolio company into this category from a different category.
(B)
Gross redemptions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.














The accompanying notes are an integral part of these consolidated financial statements.
19
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


(26)
Denotes investments in which the Company is in “Control”, as defined in the 1940 Act, due to owning or holding the power to vote 25.0% or more of the outstanding voting securities of the investment. Fair value as of June 30, 2018 and December 31, 2017, along with transactions during the six months ended June 30, 2018 in which the issuer was a controlled investment, is as follows:
Portfolio Company
 
Fair Value at
December 31, 2017
 
Gross
Additions
(A)
 
Gross
Redemptions
(B)
 
Net 
Realized
Gains
(Losses)
 
Net Change In
Unrealized
Appreciation
(Depreciation)
 
Fair Value at
June 30, 2018
 
Interest
Income
 
Dividend
Income
 
Other
Income
Edmentum Ultimate Holdings, LLC/Edmentum Inc.
 
$
—

 
$
40,796

 
$
—

 
$
—

 
$
(648
)
 
$
40,148

 
$
1,736

 
$
—

 
$
385

NM APP CANADA CORP
 
7,962

 
—

 
—

 
—

 
513

 
8,475

 
—

 
405

 
—

NM APP US LLC
 
5,138

 
—

 
—

 
—

 
136

 
5,274

 
—

 
283

 
—

NM CLFX LP
 
12,538

 
—

 
—

 
—

 
—

 
12,538

 
—

 
806

 
—

NM DRVT LLC
 
5,385

 
—

 
—

 
—

 
122

 
5,507

 
—

 
263

 
—

NM JRA LLC
 
2,191

 
—

 
—

 
—

 
49

 
2,240

 
—

 
110

 
—

NM GLCR LLC
 
—

 
14,750

 
—

 
—

 
—

 
14,750

 
—

 
785

 
—

NM KRLN LLC
 
8,195

 
—

 
—

 
—

 
267

 
8,462

 
—

 
414

 
—

NM NL Holdings, L.P.
 
—

 
20,229

 
—

 
—

 
—

 
20,229

 
—

 
—

 
—

NMFC Senior Loan Program II LLC
 
79,400

 
—

 
—

 
—

 
—

 
79,400

 
—

 
5,764

 
—

NMFC Senior Loan Program III LLC
 
—

 
42,800

 
—

 
—

 
—

 
42,800

 
—

 
—

 
—

UniTek Global Services, Inc.
 
64,593

 
15,784

 
(1,392
)
 
—

 
10,422

 
89,407

 
835

 
2,962

 
475

Total Controlled Investments
 
$
185,402

 
$
134,359

 
$
(1,392
)
 
$
—

 
$
10,861

 
$
329,230

 
$
2,571

 
$
11,792

 
$
860

 
(A)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement of an existing portfolio company into this category from a different category.
(B)
Gross redemptions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.
*
All or a portion of interest contains PIK interest.
**
Indicates assets that the Company deems to be “non-qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of June 30, 2018, 11.7% of the Company’s total investments were non-qualifying assets.

The accompanying notes are an integral part of these consolidated financial statements.
20
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
June 30, 2018
(in thousands, except shares)
(unaudited)


 
 
June 30, 2018
Investment Type
 
Percent of Total
Investments at Fair Value
First lien
 
39.49
%
Second lien
 
34.03
%
Subordinated
 
3.23
%
Equity and other
 
23.25
%
Total investments
 
100.00
%
 
 
 
June 30, 2018
Industry Type
 
Percent of Total
Investments at Fair Value
Business Services
 
32.78
%
Software
 
15.69
%
Healthcare Services
 
12.36
%
Education
 
9.05
%
Investment Fund
 
6.92
%
Consumer Services
 
5.87
%
Energy
 
4.72
%
Distribution & Logistics
 
4.43
%
Net Lease
 
3.69
%
Federal Services
 
2.56
%
Healthcare Information Technology
 
0.72
%
Packaging
 
0.69
%
Business Products
 
0.52
%
Total investments
 
100.00
%
 
 
 
June 30, 2018
Interest Rate Type
 
Percent of Total
Investments at Fair Value
Floating rates
 
87.83
%
Fixed rates
 
12.17
%
Total investments
 
100.00
%


The accompanying notes are an integral part of these consolidated financial statements.
21
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments
 December 31, 2017
(in thousands, except shares)

Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Air Newco LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
10.94% (L + 9.50%/Q)
 
1/30/2015
 
1/31/2023
 
$
40,000

 
$
39,033

 
$
39,000

 
3.77
 %
   Shine Acquisition Co. S.à.r.l / Boing US Holdco Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (3)
 
8.88% (L + 7.50%/Q)
 
9/25/2017
 
10/3/2025
 
40,353

 
40,056

 
40,656

 
3.93
 %
Total Funded Debt Investments - United Kingdom
 
 
 
 
 
 
 
 
 
$
80,353

 
$
79,089

 
$
79,656

 
7.70
 %
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   AmWINS Group, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
8.32% (L + 6.75%/M)
 
1/19/2017
 
1/25/2025
 
$
57,000

 
$
56,804

 
$
57,606

 
5.57
 %
   Alegeus Technologies, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (3)(10)
 
10.19% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
23,500

 
23,500

 
23,500

 
 
 
 
Second lien (4)(10)
 
10.19% (L + 8.50%/Q)
 
4/28/2017
 
10/30/2023
 
22,500

 
22,500

 
22,500

 
 
 
 
 
 
 
 
 
 
 
 
46,000

 
46,000

 
46,000

 
4.44
 %
   PetVet Care Centers LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (2)(10)
 
7.69% (L + 6.00%/Q)
 
6/8/2017
 
6/8/2023
 
34,527

 
34,409

 
34,872

 
 
 
 
First lien (3)(10)(11) - Drawn
 
7.55% (L + 6.00%/Q)
 
6/8/2017
 
6/8/2023
 
8,646

 
8,616

 
8,733

 
 
 
 
First lien (3)(10)(11) - Drawn
 
9.50% (P + 5.00%/Q)
 
6/8/2017
 
6/8/2023
 
2,200

 
2,192

 
2,200

 
 
 
 
 
 
 
 
 
 
 
 
45,373

 
45,217

 
45,805

 
4.43
 %
   Integro Parent Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.16% (L + 5.75%/Q)
 
10/9/2015
 
10/31/2022
 
34,873

 
34,601

 
34,786

 
 
 
 
Second lien (3)
 
10.63% (L + 9.25%/Q)
 
10/9/2015
 
10/30/2023
 
10,000

 
9,920

 
9,800

 
 
 
 
 
 
 
 
 
 
 
 
44,873

 
44,521

 
44,586

 
4.31
 %
   Severin Acquisition, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (4)(10)
 
10.32% (L + 8.75%/M)
 
7/31/2015
 
7/29/2022
 
15,000

 
14,891

 
15,000

 
 
 
 
Second lien (3)(10)
 
10.32% (L + 8.75%/M)
 
2/1/2017
 
7/29/2022
 
14,518

 
14,361

 
14,518

 
 
 
 
Second lien (4)(10)
 
10.32% (L + 8.75%/M)
 
11/5/2015
 
7/29/2022
 
4,154

 
4,123

 
4,154

 
 
 
 
Second lien (4)(10)
 
10.82% (L + 9.25%/M)
 
2/1/2016
 
7/29/2022
 
3,273

 
3,248

 
3,273

 
 
 
 
Second lien (3)(10)
 
10.57% (L + 9.00%/M)
 
10/14/2016
 
7/29/2022
 
2,361

 
2,341

 
2,361

 
 
 
 
Second lien (3)(10)
 
10.82% (L + 9.25%/M)
 
8/8/2016
 
7/29/2022
 
1,825

 
1,810

 
1,825

 
 
 
 
Second lien (4)(10)
 
10.82% (L + 9.25%/M)
 
8/8/2016
 
7/29/2022
 
300

 
298

 
300

 
 
 
 
 
 
 
 
 
 
 
 
41,431

 
41,072

 
41,431

 
4.00
 %
   Salient CRGT Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
7.32% (L + 5.75%/M)
 
1/6/2015
 
2/28/2022
 
40,894

 
40,421

 
41,251

 
3.99
 %
   Tenawa Resource Holdings LLC (13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Tenawa Resource Management LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
First lien (3)(10)
 
10.50% (Base + 8.00%/Q)
 
5/12/2014
 
10/30/2024
 
39,900

 
39,835

 
39,900

 
3.86
 %

The accompanying notes are an integral part of these consolidated financial statements.
22
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
   VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (4)
 
7.69% (L + 6.00%/Q)
 
5/15/2015
 
4/20/2021
 
$
19,111

 
$
18,996

 
$
19,134

 
 
 
 
First lien (2)
 
7.69% (L + 6.00%/Q)
 
5/15/2015
 
4/20/2021
 
7,714

 
7,603

 
7,724

 
 
 
 
First lien (3)(11) - Drawn
 
7.69% (L + 6.00%/Q)
 
2/24/2017
 
4/20/2021
 
6,005

 
5,891

 
6,013

 
 
 
 
First lien (4)
 
7.69% (L + 6.00%/Q)
 
5/15/2015
 
4/20/2021
 
2,650

 
2,632

 
2,654

 
 
 
 
First lien (2)
 
7.69% (L + 6.00%/Q)
 
6/24/2016
 
4/20/2021
 
1,632

 
1,606

 
1,634

 
 
 
 
First lien (4)
 
7.69% (L + 6.00%/Q)
 
3/31/2016
 
4/20/2021
 
495

 
487

 
496

 
 
 
 
First lien (3)(11) - Drawn
 
7.69% (L + 6.00%/Q)
 
5/15/2015
 
4/20/2021
 
1,426

 
1,412

 
1,428

 
 
 
 
 
 
 
 
 
 
 
 
39,033

 
38,627

 
39,083

 
3.78
 %
   Frontline Technologies Group Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)(10)
 
8.09% (L + 6.50%/Q)
 
9/18/2017
 
9/18/2023
 
16,750

 
16,629

 
16,625

 
 
 
 
First lien (4)(10)
 
8.09% (L + 6.50%/Q)
 
9/18/2017
 
9/18/2023
 
22,613

 
22,450

 
22,444

 
 
 
 
 
 
 
 
 
 
 
 
39,363

 
39,079

 
39,069

 
3.77
 %
   Kronos Incorporated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)
 
9.63% (L + 8.25%/Q)
 
10/26/2012
 
11/1/2024
 
36,000

 
35,508

 
37,449

 
3.62
 %
   Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)(10)
 
8.57% (L + 7.00%/M)
 
9/24/2015
 
9/24/2021
 
29,325

 
29,078

 
29,325

 
 
 
 
First lien (2)(10)
 
8.57% (L + 7.00%/M)
 
7/27/2017
 
9/24/2021
 
3,731

 
3,697

 
3,731

 
 
 
 
 
 
 
 
 
 
 
 
33,056

 
32,775

 
33,056

 
3.19
 %
   Evo Payments International, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
10.57% (L + 9.00%/M)
 
12/8/2016
 
12/23/2024
 
25,000

 
24,824

 
25,250

 
 
 
 
Second lien (3)
 
10.57% (L + 9.00%/M)
 
12/8/2016
 
12/23/2024
 
5,000

 
5,052

 
5,050

 
 
 
 
 
 
 
 
 
 
 
 
30,000

 
29,876

 
30,300

 
2.93
 %
   Wirepath LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
First lien (2)
 
6.87% (L + 5.25%/Q)
 
7/31/2017
 
8/5/2024
 
27,731

 
27,598

 
28,112

 
2.72
 %
   Ansira Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
8.19% (L + 6.50%/Q)
 
12/19/2016
 
12/20/2022
 
25,920

 
25,809

 
25,855

 
 
 
 
First lien (3)(11) - Drawn
 
8.19% (L + 6.50%/Q)
 
12/19/2016
 
12/20/2022
 
2,107

 
2,097

 
2,102

 
 
 
 
 
 
 
 
 
 
 
 
28,027

 
27,906

 
27,957

 
2.70
 %
   TW-NHME Holdings Corp. (20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   National HME, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (4)(10)
 
10.95% (L + 9.25%/Q)
 
7/14/2015
 
7/14/2022
 
21,500

 
21,301

 
21,646

 
 
 
 
Second lien (3)(10)
 
10.95% (L + 9.25%/Q)
 
7/14/2015
 
7/14/2022
 
5,800

 
5,737

 
5,839

 
 
 
 
 
 
 
 
 
 
 
 
27,300

 
27,038

 
27,485

 
2.66
 %
   Navicure, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (3)
 
8.86% (L + 7.50%/M)
 
10/23/2017
 
10/31/2025
 
26,952

 
26,819

 
27,154

 
2.62
 %
   Trader Interactive, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)(10)
 
7.50% (L + 6.00%/M)
 
6/15/2017
 
6/17/2024
 
27,190

 
26,999

 
26,986

 
2.61
 %
   Marketo, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)(10)
 
11.19% (L + 9.50%/Q)
 
8/16/2016
 
8/16/2021
 
26,820

 
26,509

 
26,820

 
2.59
 %
   Keystone Acquisition Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
6.94% (L + 5.25%/Q)
 
5/10/2017
 
5/1/2024
 
19,950

 
19,764

 
20,087

 
 
 
 
Second lien (3)
 
10.94% (L + 9.25%/Q)
 
5/10/2017
 
5/1/2025
 
4,500

 
4,457

 
4,511

 
 
 
 
 
 
 
 
 
 
 
 
24,450

 
24,221

 
24,598

 
2.38
 %

The accompanying notes are an integral part of these consolidated financial statements.
23
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
   iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)(10)
 
8.82% (L + 7.25%/M)
 
8/4/2015
 
8/4/2022
 
$
17,589

 
$
17,464

 
$
17,589

 
 
 
 
First lien (4)(10)
 
7.74% (L + 6.25%/M)
 
6/16/2017
 
8/4/2022
 
4,577

 
4,556

 
4,554

 
 
 
 
First lien (2)(10)
 
7.74% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
1,161

 
1,155

 
1,155

 
 
 
 
First lien (4)(10)
 
7.74% (L + 6.25%/M)
 
9/25/2017
 
8/4/2022
 
511

 
508

 
508

 
 
 
 
 
 
 
 
 
 
 
 
23,838

 
23,683

 
23,806

 
2.30
 %
   AAC Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)(10)
 
9.62% (L + 8.25%/M)
 
9/30/2015
 
9/30/2020
 
23,161

 
22,953

 
23,161

 
2.24
 %
   BackOffice Associates Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)(10)
 
8.06% (L + 6.50%/M)
 
8/25/2017
 
8/25/2023
 
22,869

 
22,679

 
22,669

 
2.19
 %
   TWDiamondback Holdings Corp. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Diamondback Drugs of Delaware, L.L.C. (TWDiamondback II Holdings LLC)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
First lien (4)(10)
 
10.49% (L + 8.75%/Q)
 
11/19/2014
 
11/19/2019
 
19,895

 
19,895

 
19,895

 
 
 
 
First lien (3)(10)
 
10.44% (L + 8.75%/Q)
 
11/19/2014
 
11/19/2019
 
2,158

 
2,158

 
2,158

 
 
 
 
First lien (4)(10)
 
10.44% (L + 8.75%/Q)
 
11/19/2014
 
11/19/2019
 
605

 
605

 
605

 
 
 
 
 
 
 
 
 
 
 
 
22,658

 
22,658

 
22,658

 
2.19
 %
   EN Engineering, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)(10)
 
7.69% (L + 6.00%/Q)
 
7/30/2015
 
6/30/2021
 
20,893

 
20,760

 
20,893

 
 
 
 
First lien (2)(10)
 
7.69% (L + 6.00%/Q)
 
7/30/2015
 
6/30/2021
 
1,208

 
1,200

 
1,208

 
 
 
 
 
 
 
 
 
 
 
 
22,101

 
21,960

 
22,101

 
2.14
 %
   Avatar Topco, Inc (23)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   EAB Global, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Second lien (3)
 
8.99% (L + 7.50%/M)
 
11/17/2017
 
11/17/2025
 
21,450

 
21,132

 
21,236

 
2.05
 %
   DigiCert Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
9.38% (L + 8.00%/Q)
 
9/20/2017
 
10/31/2025
 
20,176

 
20,077

 
20,347

 
1.97
 %
   DiversiTech Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (3)
 
9.20% (L + 7.50%/Q)
 
5/18/2017
 
6/2/2025
 
19,500

 
19,315

 
19,744

 
1.91
 %
   ABILITY Network Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Information Technology
 
Second lien (3)
 
9.21% (L + 7.75%/M)
 
12/11/2017
 
12/12/2025
 
18,851

 
18,839

 
18,945

 
1.83
 %
   KeyPoint Government Solutions, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)(10)
 
7.35% (L + 6.00%/Q)
 
4/18/2017
 
4/18/2024
 
18,413

 
18,243

 
18,597

 
1.80
 %
   AgKnowledge Holdings Company, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)(10)
 
9.82% (L + 8.25%/M)
 
7/23/2014
 
7/23/2020
 
18,500

 
18,409

 
18,500

 
1.79
 %
   VF Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)(10)
 
10.57% (L + 9.00%/M)
 
7/7/2016
 
6/28/2024
 
17,086

 
17,396

 
17,598

 
1.70
 %
   DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)(10)
 
6.94% (L + 5.25%/Q)
 
7/2/2015
 
7/2/2021
 
17,453

 
17,344

 
17,453

 
1.69
 %
   OEConnection LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
9.69% (L + 8.00%/Q)
 
11/22/2017
 
11/22/2025
 
16,841

 
16,548

 
16,841

 
1.63
 %
   TIBCO Software Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       Software
 
Subordinated (3)
 
11.38%/S
 
11/24/2014
 
12/1/2021
 
15,000

 
14,714

 
16,378

 
1.58
 %
   American Tire Distributors, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Subordinated (3)
 
10.25%/S
 
2/10/2015
 
3/1/2022
 
15,520

 
15,267

 
16,063

 
1.55
 %
   Hill International, Inc.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)(10)
 
7.32% (L + 5.75%/M)
 
6/21/2017
 
6/21/2023
 
15,721

 
15,648

 
15,642

 
1.51
 %

The accompanying notes are an integral part of these consolidated financial statements.
24
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
   Netsmart Inc. / Netsmart Technologies, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Information Technology
 
Second lien (2)
 
10.98% (L + 9.50%/Q)
 
4/18/2016
 
10/19/2023
 
$
15,000

 
$
14,686

 
$
15,075

 
1.46
 %
   Transcendia Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       Packaging
 
Second lien (3)
 
9.57% (L + 8.00%/M)
 
6/28/2017
 
5/30/2025
 
14,500

 
14,309

 
14,391

 
1.39
 %
   SW Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (4)(10)
 
10.44% (L + 8.75%/Q)
 
6/30/2015
 
12/30/2021
 
14,265

 
14,167

 
14,331

 
1.38
 %
   Peraton Holding Corp. (fka MHVC Acquisition Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
First lien (2)
 
6.95% (L + 5.25%/Q)
 
4/25/2017
 
4/29/2024
 
14,030

 
13,987

 
14,135

 
1.37
 %
   Ministry Brands, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)
 
6.38% (L + 5.00%/Q)
 
12/7/2016
 
12/2/2022
 
2,993

 
2,980

 
2,993

 
 
 
 
First lien (3)(10)(11) - Drawn
 
6.57% (L + 5.00%/M)
 
12/7/2016
 
12/2/2022
 
1,000

 
995

 
1,000

 
 
 
 
Second lien (3)(10)
 
10.63% (L + 9.25%/Q)
 
12/7/2016
 
6/2/2023
 
7,840

 
7,788

 
7,840

 
 
 
 
Second lien (3)(10)
 
10.63% (L + 9.25%/Q)
 
12/7/2016
 
6/2/2023
 
2,160

 
2,146

 
2,160

 
 
 
 
 
 
 
 
 
 
 
 
13,993

 
13,909

 
13,993

 
1.35
 %
   nThrive, Inc. (fka Precyse Acquisition Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (2)(10)
 
11.32% (L + 9.75%/M)
 
4/19/2016
 
4/20/2023
 
13,000

 
12,813

 
12,702

 
1.23
 %
   FR Arsenal Holdings II Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)(10)
 
8.81% (L + 7.25%/Q)
 
9/29/2016
 
9/8/2022
 
12,356

 
12,252

 
12,373

 
1.19
 %
   Amerijet Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Distribution & Logistics
 
First lien (4)(10)
 
9.57% (L + 8.00%/M)
 
7/15/2016
 
7/15/2021
 
10,403

 
10,344

 
10,458

 
 
 
 
First lien (4)(10)
 
9.57% (L + 8.00%/M)
 
7/15/2016
 
7/15/2021
 
1,734

 
1,724

 
1,743

 
 
 
 
 
 
 
 
 
 
 
 
12,137

 
12,068

 
12,201

 
1.18
 %
   SSH Group Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)(10)
 
6.69% (L + 5.00%/Q)
 
10/13/2017
 
10/2/2024
 
8,407

 
8,366

 
8,365

 
 
 
 
Second lien (3)(10)
 
10.69% (L + 9.00%/Q)
 
10/13/2017
 
10/2/2025
 
3,363

 
3,330

 
3,329

 
 
 
 
 
 
 
 
 
 
 
 
11,770

 
11,696

 
11,694

 
1.13
 %
   ProQuest LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
10.55% (L + 9.00%/M)
 
12/14/2015
 
12/15/2022
 
11,620

 
11,440

 
11,620

 
1.12
 %
   Xactly Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (4)(10)
 
8.82% (L + 7.25%/M)
 
7/31/2017
 
7/29/2022
 
11,600

 
11,492

 
11,484

 
1.11
 %
   Zywave, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (4)(10)
 
10.42% (L + 9.00%/Q)
 
11/22/2016
 
11/17/2023
 
11,000

 
10,927

 
11,011

 
 
 
 
First lien (3)(10)(11) - Drawn
 
8.50% (P + 4.00%/Q)
 
11/22/2016
 
11/17/2022
 
200

 
199

 
200

 
 
 
 
First lien (3)(10)(11) - Drawn
 
6.57% (L + 5.00%/Q)
 
11/22/2016
 
11/17/2022
 
250

 
248

 
250

 
 
 
 
 
 
 
 
 
 
 
 
11,450

 
11,374

 
11,461

 
1.11
 %
   QC McKissock Investment, LLC (14)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   McKissock, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)(10)
 
7.94% (L + 6.25%/Q)
 
8/6/2014
 
8/5/2021
 
6,415

 
6,386

 
6,415

 
 
 
 
First lien (2)(10)
 
7.94% (L + 6.25%/Q)
 
8/6/2014
 
8/5/2021
 
3,058

 
3,046

 
3,058

 
 
 
 
First lien (2)(10)
 
7.94% (L + 6.25%/Q)
 
8/6/2014
 
8/5/2021
 
987

 
983

 
987

 
 
 
 
 
 
 
 
 
 
 
 
10,460

 
10,415

 
10,460

 
1.01
 %
   Masergy Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (2)
 
10.19% (L + 8.50%/Q)
 
12/14/2016
 
12/16/2024
 
10,000

 
9,943

 
10,144

 
0.98
 %
   Idera, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (4)
 
10.57% (L + 9.00%/M)
 
6/27/2017
 
6/27/2025
 
10,000

 
9,856

 
10,100

 
0.97
 %

The accompanying notes are an integral part of these consolidated financial statements.
25
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
   Quest Software US Holdings Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (2)
 
6.92% (L + 5.50%/Q)
 
10/31/2016
 
10/31/2022
 
$
9,899

 
$
9,775

 
$
10,071

 
0.97
 %
   PowerPlan Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (2)(10)
 
10.57% (L + 9.00%/M)
 
2/23/2015
 
2/23/2023
 
10,000

 
9,927

 
10,000

 
0.97
 %
   WD Wolverine Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)
 
7.07% (L + 5.50%/M)
 
2/22/2017
 
8/16/2022
 
9,813

 
9,534

 
9,512

 
0.92
 %
   Pelican Products, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Products
 
Second lien (2)
 
9.94% (L + 8.25%/Q)
 
4/9/2014
 
4/9/2021
 
9,500

 
9,533

 
9,500

 
0.92
 %
   J.D. Power (fka J.D. Power and Associates)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
10.19% (L + 8.50%/Q)
 
6/9/2016
 
9/7/2024
 
9,333

 
9,230

 
9,473

 
0.91
 %
   Harley Marine Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Second lien (2)
 
10.63% (L + 9.25%/Q)
 
12/18/2013
 
12/20/2019
 
9,000

 
8,929

 
8,955

 
0.86
 %
   JAMF Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)(10)
 
9.41% (L + 8.00%/Q)
 
11/13/2017
 
11/11/2022
 
8,757

 
8,672

 
8,670

 
0.84
 %
   Autodata, Inc. (Autodata Solutions, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Second lien (3)
 
8.82% (L + 7.25%/Q)
 
12/12/2017
 
12/12/2025
 
7,406

 
7,387

 
7,387

 
0.71
 %
   MH Sub I, LLC (Micro Holding Corp.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
9.09% (L + 7.50%/Q)
 
8/16/2017
 
9/15/2025
 
7,000

 
6,932

 
7,048

 
0.68
 %
   First American Payment Systems, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)
 
7.14% (L + 5.75%/M)
 
1/3/2017
 
1/5/2024
 
6,844

 
6,783

 
6,880

 
0.66
 %
   Solera LLC / Solera Finance, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Subordinated (3)
 
10.50%/S
 
2/29/2016
 
3/1/2024
 
5,000

 
4,791

 
5,650

 
0.55
 %
   Pathway Partners Vet Management Company LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (4)
 
9.57% (L + 8.00%/M)
 
10/4/2017
 
10/10/2025
 
5,556

 
5,527

 
5,527

 
0.53
 %
   Applied Systems, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Second lien (3)
 
8.69% (L + 7.00%/Q)
 
9/14/2017
 
9/19/2025
 
4,923

 
4,923

 
5,106

 
0.49
 %
   ADG, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Second lien (3)(10)
 
10.57% (L + 9.00%/M)
 
10/3/2016
 
3/28/2024
 
5,000

 
4,934

 
5,038

 
0.49
 %
   Vencore, Inc. (fka The SI Organization Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Federal Services
 
Second lien (3)
 
10.44% (L + 8.75%/Q)
 
6/14/2016
 
5/23/2020
 
4,400

 
4,350

 
4,450

 
0.43
 %
   Affinity Dental Management, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (2)(10)
 
7.59% (L + 6.00%/Q)
 
9/15/2017
 
9/15/2023
 
4,344

 
4,302

 
4,301

 
0.41
 %
   York Risk Services Holding Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Subordinated (3)
 
8.50%/S
 
9/17/2014
 
10/1/2022
 
3,000

 
3,000

 
2,940

 
0.28
 %
   Ensemble S Merger Sub, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
Subordinated (3)
 
9.00%/S
 
9/21/2015
 
9/30/2023
 
2,000

 
1,946

 
2,125

 
0.20
 %
   Education Management Corporation (12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Education Management II LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (2)
 
5.85% (L + 4.50%/Q)
 
1/5/2015
 
7/2/2020
 
211

 
205

 
82

 
 
 
 
First lien (3)
 
5.85% (L + 4.50%/Q)
 
1/5/2015
 
7/2/2020
 
119

 
116

 
46

 
 
 
 
First lien (2)
 
8.85% (L + 7.50%/Q)
 
1/5/2015
 
7/2/2020
 
475

 
437

 
10

 
 
 
 
First lien (3)
 
8.85% (L + 7.50%/Q)
 
1/5/2015
 
7/2/2020
 
268

 
247

 
6

 
 
 
 
 
 
 
 
 
 
 
 
1,073

 
1,005

 
144

 
0.01
 %
Total Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
1,319,560

 
$
1,309,577

 
$
1,325,328

 
128.05
 %
Total Funded Debt Investments
 
 
 
 
 
 
 
 
 
$
1,399,913

 
$
1,388,666

 
$
1,404,984

 
135.75
 %

The accompanying notes are an integral part of these consolidated financial statements.
26
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
Equity - Hong Kong
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Bach Special Limited (Bach Preference Limited)**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Preferred shares (3)(10)(22)
 
—
 
9/1/2017
 
—
 
58,868

 
$
5,807

 
$
5,806

 
0.56
 %
Total Shares - Hong Kong
 
 
 
 
 
 
 
 
 
 
 
$
5,807

 
$
5,806

 
0.56
 %
Equity - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Avatar Topco, Inc. (23)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Preferred shares (3)(10)(23)
 
—
 
11/17/2017
 
—
 
35,750

 
$
35,220

 
$
35,204

 
3.40
 %
   Tenawa Resource Holdings LLC (13)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   QID NGL LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
Ordinary shares (7)(10)
 
—
 
5/12/2014
 
—
 
5,290,997

 
5,291

 
8,154

 
 
 
 
Preferred shares (7)(10)
 
—
 
10/30/2017
 
—
 
620,706

 
621

 
1,007

 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,912

 
9,161

 
0.88
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   TWDiamondback Holdings Corp. (15)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Distribution & Logistics
 
Preferred shares (4)(10)
 
—
 
11/19/2014
 
—
 
200

 
2,000

 
4,508

 
0.44
 %
   TW-NHME Holdings Corp. (20)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
Preferred shares (4)(10)
 
—
 
7/14/2015
 
—
 
100

 
1,000

 
944

 
 
 
 
Preferred shares (4)(10)
 
—
 
1/5/2016
 
—
 
16

 
158

 
149

 
 
 
 
Preferred shares (4)(10)
 
—
 
6/30/2016
 
—
 
6

 
68

 
58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,226

 
1,151

 
0.11
 %
   Ancora Acquisition LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Preferred shares (6)(10)
 
—
 
8/12/2013
 
—
 
372

 
83

 
393

 
0.04
 %
   Education Management Corporation (12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Preferred shares (2)
 
—
 
1/5/2015
 
—
 
3,331

 
200

 
—

 
 
 
 
Preferred shares (3)
 
—
 
1/5/2015
 
—
 
1,879

 
113

 
—

 
 
 
 
Ordinary shares (2)
 
—
 
1/5/2015
 
—
 
2,994,065

 
100

 
10

 
 
 
 
Ordinary shares (3)
 
—
 
1/5/2015
 
—
 
1,688,976

 
56

 
6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
469

 
16

 
0.00
 %
Total Shares - United States
 
 
 
 
 
 
 
 
 
 
 
$
44,910

 
$
50,433

 
4.87
 %
Total Shares
 
 
 
 
 
 
 
 
 
 
 
$
50,717

 
$
56,239

 
5.43
 %
Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   ASP LCG Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Warrants (3)(10)
 
—
 
5/5/2014
 
5/5/2026
 
622

 
$
37

 
$
1,089

 
0.11
 %
   Ancora Acquisition LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Warrants (6)(10)
 
—
 
8/12/2013
 
8/12/2020
 
20

 
—

 
—

 
—
 %
   YP Equity Investors, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Media
 
Warrants (5)(10)
 
—
 
5/3/2012
 
5/8/2022
 
5

 
—

 
—

 
—
 %
Total Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
$
37

 
$
1,089

 
0.11
 %
Total Funded Investments
 
 
 
 
 
 
 
 
 
 
 
$
1,439,420

 
$
1,462,312

 
141.29
 %

The accompanying notes are an integral part of these consolidated financial statements.
27
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   PetVet Care Centers LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
6/8/2017
 
6/8/2019
 
$
4,439

 
$
(16
)
 
$
44

 
0.00
 %
   VetCor Professional Practices LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
First lien (3)(11) - Undrawn
 
—
 
5/15/2015
 
4/20/2021
 
1,274

 
(13
)
 
2

 
 
 
 
First lien (3)(11) - Undrawn
 
—
 
12/29/2017
 
12/29/2019
 
8,552

 
(75
)
 
11

 
 
 
 
 
 
 
 
 
 
 
 
9,826

 
(88
)
 
13

 
0.00
 %
   DCA Investment Holding, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
7/2/2015
 
7/2/2021
 
2,100

 
(21
)
 
—

 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
12/20/2017
 
12/20/2019
 
13,465

 
(118
)
 
—

 
 
 
 
 
 
 
 
 
 
 
 
15,565

 
(139
)
 
—

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   iPipeline, Inc. (Internet Pipeline, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
8/4/2015
 
8/4/2021
 
1,000

 
(10
)
 
—

 
—
 %
   Valet Waste Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/24/2015
 
9/24/2021
 
3,750

 
(47
)
 
—

 
—
 %
   Zywave, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
11/22/2016
 
11/17/2022
 
1,550

 
(12
)
 
—

 
—
 %
   Marketo, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
8/16/2016
 
8/16/2021
 
1,788

 
(27
)
 
—

 
—
 %
   Ansira Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (3)(11) - Undrawn
 
—
 
12/19/2016
 
12/20/2018
 
1,700

 
(9
)
 
(4
)
 
(0.00
)%
   JAMF Holdings, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
11/13/2017
 
11/11/2022
 
750

 
(8
)
 
(8
)
 
(0.00
)%
   Xactly Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Software
 
First lien (3)(10)(11) - Undrawn
 
—
 
7/31/2017
 
7/29/2022
 
992

 
(10
)
 
(10
)
 
(0.00
)%
   Pathway Partners Vet Management Company LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Consumer Services
 
Second lien (4)(11) - Undrawn
 
—
 
10/4/2017
 
10/10/2019
 
2,444

 
(12
)
 
(12
)
 
(0.00
)%
   Trader Interactive, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
6/15/2017
 
6/15/2023
 
1,673

 
(13
)
 
(13
)
 
(0.00
)%
   BackOffice Associates Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
8/25/2017
 
8/24/2018
 
3,448

 
(13
)
 
(13
)
 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
8/25/2017
 
8/25/2023
 
2,586

 
(23
)
 
(23
)
 
 
 
 
 
 
 
 
 
 
 
 
6,034

 
(36
)
 
(36
)
 
(0.00
)%

The accompanying notes are an integral part of these consolidated financial statements.
28
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
   Affinity Dental Management, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Healthcare Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/15/2017
 
3/15/2019
 
$
11,584

 
$
(29
)
 
$
(29
)
 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/15/2017
 
3/15/2023
 
1,738

 
(17
)
 
(17
)
 
 
 
 
 
 
 
 
 
 
 
 
13,322

 
(46
)
 
(46
)
 
(0.00
)%
   Frontline Technologies Group Holdings, LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
First lien (3)(10)(11) - Undrawn
 
—
 
9/18/2017
 
9/18/2019
 
7,738

 
(58
)
 
(58
)
 
(0.01
)%
Total Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
72,571

 
$
(531
)
 
$
(130
)
 
(0.01
)%
Total Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
$
1,438,889

 
$
1,462,182

 
141.28
 %
Non-Controlled/Affiliated Investments(24)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Edmentum Ultimate Holdings, LLC (16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Second lien (3)(10)(11) - Drawn
 
5.00%/M
 
6/9/2015
 
6/9/2020
 
$
3,172

 
$
3,172

 
$
3,172

 
 
 
 
Subordinated (3)(10)
 
8.50% PIK/Q*
 
6/9/2015
 
6/9/2020
 
4,491

 
4,486

 
4,491

 
 
 
 
Subordinated (2)(10)
 
10.00% PIK/Q*
 
6/9/2015
 
6/9/2020
 
16,760

 
16,760

 
13,408

 
 
 
 
Subordinated (3)(10)
 
10.00% PIK/Q*
 
6/9/2015
 
6/9/2020
 
4,123

 
4,123

 
3,298

 
 
 
 
 
 
 
 
 
 
 
 
28,546

 
28,541

 
24,369

 
2.36
 %
   Permian Holdco 1, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Permian Holdco 2, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
Subordinated (3)(10)
 
14.00% PIK/Q*
 
10/31/2016
 
10/15/2021
 
2,007

 
2,007

 
2,007

 
 
 
 
Subordinated (3)(10)(11) - Drawn
 
14.00% PIK/Q*
 
10/31/2016
 
10/15/2021
 
696

 
696

 
696

 
 
 
 
 
 
 
 
 
 
 
 
2,703

 
2,703

 
2,703

 
0.26
 %
Total Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
31,249

 
$
31,244

 
$
27,072

 
2.62
 %
Equity - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   HI Technology Corp.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Preferred shares (3)(10)(21)
 
—
 
3/21/2017
 
—
 
2,768,000

 
$
105,155

 
$
105,155

 
10.16
 %
   NMFC Senior Loan Program I LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Investment Fund
 
Membership interest (3)(10)
 
—
 
6/13/2014
 
—
 
—

 
23,000

 
23,000

 
2.22
 %
   Sierra Hamilton Holdings Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
Ordinary shares (2)(10)
 
—
 
7/31/2017
 
—
 
25,000,000

 
11,501

 
11,094

 
 
 
 
Ordinary shares (3)(10)
 
—
 
7/31/2017
 
—
 
2,786,000

 
1,281

 
1,236

 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,782

 
12,330

 
1.19
 %
   Permian Holdco 1, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
Preferred shares (3)(10)(17)
 
—
 
10/31/2016
 
—
 
1,569,226

 
6,829

 
8,631

 
 
 
 
Ordinary shares (3)(10)
 
—
 
10/31/2016
 
—
 
1,366,452

 
1,350

 
1,399

 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,179

 
10,030

 
0.97
 %

The accompanying notes are an integral part of these consolidated financial statements.
29
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
   Edmentum Ultimate Holdings, LLC (16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Ordinary shares (3)(10)
 
—
 
6/9/2015
 
—
 
123,968

 
$
11

 
$
262

 
 
 
 
Ordinary shares (2)(10)
 
—
 
6/9/2015
 
—
 
107,143

 
9

 
227

 
 
 
 
 
 
 
 
 
 
 
 
 
 
20

 
489

 
0.05
 %
Total Shares - United States
 
 
 
 
 
 
 
 
 
 
 
$
149,136

 
$
151,004

 
14.59
 %
Total Funded Investments
 
 
 
 
 
 
 
 
 
 
 
$
180,380

 
$
178,076

 
17.21
 %
Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Edmentum Ultimate Holdings, LLC (16)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Education
 
Second lien (3)(10)(11) - Undrawn
 
—
 
6/9/2015
 
6/9/2020
 
$
1,709

 
$
—

 
$
—

 
—
 %
   Permian Holdco 1, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Permian Holdco 2, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Energy
 
Subordinated (3)(10)(11) - Undrawn
 
—
 
10/31/2016
 
10/15/2021
 
342

 
—

 
—

 
—
 %
Total Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
2,051

 
$
—

 
$
—

 
—
 %
Total Non-Controlled/Affiliated Investments
 
 
 
 
 
 
 
 
 
 
 
$
180,380

 
$
178,076

 
17.21
 %
Controlled Investments(25)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (2)(10)
 
10.20% (L + 8.50%/Q)
 
1/13/2015
 
1/13/2019
 
$
10,846

 
$
10,846

 
$
10,846

 
 
 
 
First lien (2)(10)
 
9.84% (L + 7.50% + 1.00% PIK/Q)*
 
1/13/2015
 
1/13/2019
 
797

 
797

 
797

 
 
 
 
Subordinated (2)(10)
 
15.00% PIK/Q*
 
1/13/2015
 
7/13/2019
 
2,003

 
2,003

 
2,003

 
 
 
 
Subordinated (3)(10)
 
15.00% PIK/Q*
 
1/13/2015
 
7/13/2019
 
1,198

 
1,198

 
1,198

 
 
 
 
 
 
 
 
 
 
 
 
14,844

 
14,844

 
14,844

 
1.43
 %
Total Funded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
14,844

 
$
14,844

 
$
14,844

 
1.43
 %
Equity - Canada
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  NM APP Canada Corp.**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Net Lease
 
Membership interest (8)(10)
 
—
 
9/13/2016
 
—
 
—

 
$
7,345

 
$
7,962

 
0.77
 %
Total Shares - Canada
 
 
 
 
 
 
 
 
 
 
 
$
7,345

 
$
7,962

 
0.77
 %
Equity - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   NMFC Senior Loan Program II LLC**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Investment Fund
 
Membership interest (3)(10)
 
—
 
5/3/2016
 
—
 
—

 
$
79,400

 
$
79,400

 
7.67
 %

The accompanying notes are an integral part of these consolidated financial statements.
30
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


Portfolio Company, Location and Industry(1)
 
Type of
Investment
 
Interest Rate(9)
 
Acquisition Date
 
Maturity/Expiration
Date
 
Principal
Amount,
Par Value
or Shares
 
Cost
 
Fair Value
 
Percent of
Net
Assets
   UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Preferred shares (2)(10)(18)
 
—
 
1/13/2015
 
—
 
21,753,102

 
$
19,373

 
$
19,288

 
 
 
 
Preferred shares (3)(10)(18)
 
—
 
1/13/2015
 
—
 
6,011,522

 
5,353

 
5,330

 
 
 
 
Preferred shares (3)(10)(19)
 
—
 
6/30/2017
 
—
 
10,863,583

 
10,864

 
10,864

 
 
 
 
Ordinary shares (2)(10)
 
—
 
1/13/2015
 
—
 
2,096,477

 
1,925

 
7,313

 
 
 
 
Ordinary shares (3)(10)
 
—
 
1/13/2015
 
—
 
1,993,749

 
531

 
6,954

 
 
 
 
 
 
 
 
 
 
 
 
 
 
38,046

 
49,749

 
4.81
 %
   NM CLFX LP
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Net Lease
 
Membership interest (8)(10)
 
—
 
10/6/2017
 
—
 
—

 
12,538

 
12,538

 
1.21
 %
   NM KRLN LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Net Lease
 
Membership interest (8)(10)
 
—
 
11/15/2016
 
—
 
—

 
7,510

 
8,195

 
0.79
 %
   NM DRVT LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Net Lease
 
Membership interest (8)(10)
 
—
 
11/18/2016
 
—
 
—

 
5,152

 
5,385

 
0.52
 %
   NM APP US LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Net Lease
 
Membership interest (8)(10)
 
—
 
9/13/2016
 
—
 
—

 
5,080

 
5,138

 
0.50
 %
   NM JRA LLC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Net Lease
 
Membership interest (8)(10)
 
—
 
8/12/2016
 
—
 
—

 
2,043

 
2,191

 
0.21
 %
Total Shares - United States
 
 
 
 
 
 
 
 
 
 
 
$
149,769

 
$
162,596

 
15.71
 %
Total Shares
 
 
 
 
 
 
 
 
 
 
 
$
157,114

 
$
170,558

 
16.48
 %
Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
Warrants (3)(10)
 
—
 
6/30/2017
 
12/31/2018
 
526,925

 
$
—

 
$
—

 
—
 %
Total Warrants - United States
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
—

 
—
 %
Total Funded Investments
 
 
 
 
 
 
 
 
 
 
 
$
171,958

 
$
185,402

 
17.91
 %
Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   UniTek Global Services, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Business Services
 
First lien (3)(10)(11) - Undrawn
 
—
 
1/13/2015
 
1/13/2019
 
$
2,048

 
$
—

 
$
—

 
 
 
 
First lien (3)(10)(11) - Undrawn
 
—
 
1/13/2015
 
1/13/2019
 
758

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
2,806

 
—

 
—

 
—
 %
Total Unfunded Debt Investments - United States
 
 
 
 
 
 
 
 
 
$
2,806

 
$
—

 
$
—

 
—
 %
Total Controlled Investments
 
 
 
 
 
 
 
 
 
 
 
$
171,958

 
$
185,402

 
17.91
 %
Total Investments
 
 
 
 
 
 
 
 
 
 
 
$
1,791,227

 
$
1,825,660

 
176.4
 %
_______________________________________________________________________________
(1)
New Mountain Finance Corporation (the "Company") generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed to be "restricted securities" under the Securities Act.
(2)
Investment is pledged as collateral for the Holdings Credit Facility, a revolving credit facility among the Company as Collateral Manager, New Mountain Finance Holdings, L.L.C. ("NMF Holdings") as the Borrower, Wells Fargo Securities, LLC as the Administrative Agent, and Wells Fargo Bank, National Association, as the Lender and Collateral Custodian. See Note 7. Borrowings, for details.

The accompanying notes are an integral part of these consolidated financial statements.
31
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


(3)
Investment is pledged as collateral for the NMFC Credit Facility, a revolving credit facility among the Company as the Borrower and Goldman Sachs Bank USA as the Administrative Agent and the Collateral Agent and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A. and Stifel Bank & Trust as Lenders. See Note 7. Borrowings, for details.
(4)
Investment is held in New Mountain Finance SBIC, L.P.
(5)
Investment is held in NMF YP Holdings, Inc.
(6)
Investment is held in NMF Ancora Holdings, Inc.
(7)
Investment is held in NMF QID NGL Holdings, Inc.
(8)
Investment is held in New Mountain Net Lease Corporation.
(9)
All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (L), the Prime Rate (P) and the alternative base rate (Base) and which resets monthly (M), quarterly (Q), semi-annually (S) or annually (A). For each investment the current interest rate provided reflects the rate in effect as of December 31, 2017.
(10)
The fair value of the Company's investment is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 4. Fair Value, for details.
(11)
Par Value amounts represent the drawn or undrawn (as indicated in type of investment) portion of revolving credit facilities or delayed draws. Cost amounts represent the cash received at settlement date net the impact of paydowns and cash paid for drawn revolvers or delayed draws.
(12)
The Company holds investments in Education Management Corporation and one related entity of Education Management Corporation. The Company holds series A-1 convertible preferred stock and common stock in Education Management Corporation and holds a tranche A first lien term loan and a tranche B first lien term loan in Education Management II LLC, which is an indirect subsidiary of Education Management Corporation.
(13)
The Company holds investments in three related entities of Tenawa Resource Holdings LLC. The Company holds 4.77% of the common units in QID NGL LLC (which at closing represented 98.1% of the ownership in the common units in Tenawa Resource Holdings LLC), class A preferred units in QID NGL LLC and a first lien investment in Tenawa Resource Management LLC, a wholly-owned subsidiary of Tenawa Resource Holdings LLC.
(14)
The Company holds investments in QC McKissock Investment, LLC and one related entity of QC McKissock Investment, LLC. The Company holds a first lien term loan in QC McKissock Investment, LLC (which at closing represented 71.1% of the ownership in the Series A common units of McKissock Investment Holdings, LLC) and holds a first lien term loan and a delayed draw term loan in McKissock, LLC, a wholly-owned subsidiary of McKissock Investment Holdings, LLC.
(15)
The Company holds investments in TWDiamondback Holdings Corp. and one related entity of TWDiamondback Holdings Corp. The Company holds preferred equity in TWDiamondback Holdings Corp. and holds a first lien last out term loan and a delayed draw term loan in Diamondback Drugs of Delaware LLC, a wholly-owned subsidiary of TWDiamondback Holdings Corp.
(16)
The Company holds investments in Edmentum Ultimate Holdings, LLC and its related entities. The Company holds subordinated notes and ordinary equity in Edmentum Ultimate Holdings, LLC and holds a second lien revolver in Edmentum, Inc. and Archipelago Learning, Inc., which are wholly-owned subsidiaries of Edmentum Ultimate Holdings, LLC.
(17)
The Company holds preferred equity in Permian Holdco 1, Inc. that is entitled to receive cumulative preferential dividends at a rate of 12.0% per annum payable in additional shares.
(18)
The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 13.5% per annum payable in additional shares.
(19)
The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 19.0% per annum payable in additional shares.
(20)
The Company holds equity investments in TW-NHME Holdings Corp., and holds a second lien term loan investment in National HME, Inc., a wholly-owned subsidiary of TW-NHME Holdings Corp.
(21)
The Company holds convertible preferred equity in HI Technology Corp that is accruing dividends at a rate of 15.0% per annum.
(22)
The Company holds preferred equity in Bach Special Limited (Bach Preference Limited) that is entitled to receive cumulative preferential dividends at a rate of 12.25% per annum payable in additional shares.
(23)
The Company holds preferred equity in Avatar Topco, Inc., and holds a second lien term loan investment in EAB Global, Inc., a wholly-owned subsidiary of Avatar Topco, Inc. The preferred equity is entitled to receive cumulative preferential dividends at a rate of L + 11.00% per annum.

The accompanying notes are an integral part of these consolidated financial statements.
32
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)


(24)
Denotes investments in which the Company is an “Affiliated Person”, as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), due to owning or holding the power to vote 5.0% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of December 31, 2017 and December 31, 2016 along with transactions during the year ended December 31, 2017 in which the issuer was a non-controlled/affiliated investment is as follows:
Portfolio Company
 
Fair Value at December 31, 2016
 
Gross
Additions (A)
 
Gross
Redemptions
(B)
 
Net
Realized
Gains
(Losses)
 
Net Change In
Unrealized
Appreciation
(Depreciation)
 
Fair Value at December 31, 2017
 
Interest
Income
 
Dividend
Income
 
Other
Income
Edmentum Ultimate Holdings, LLC/Edmentum Inc.
 
$
23,247

 
$
10,912

 
$
(5,381
)
 
$
—

 
$
(3,920
)
 
$
24,858

 
$
2,538

 
$
—

 
$
—

HI Technology Corp.
 
—

 
105,155

 
—

 
—

 
—

 
105,155

 
—

 
11,667

 
—

NMFC Senior Loan Program I LLC
 
23,000

 
—

 
—

 
—

 
—

 
23,000

 
—

 
3,498

 
1,156

Permian Holdco 1, Inc. / Permian Holdco 2, Inc.
 
11,193

 
1,916

 
—

 
—

 
(376
)
 
12,733

 
270

 
960

 
30

Sierra Hamilton Holdings Corporation
 
—

 
12,782

 
—

 
—

 
(452
)
 
12,330

 
—

 
—

 
—

Total Non-Controlled/Affiliated Investments
 
$
57,440

 
$
130,765

 
$
(5,381
)
 
$
—

 
$
(4,748
)
 
$
178,076

 
$
2,808

 
$
16,125

 
$
1,186

_______________________________________________________________________________
(A)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, payment-in-kind (“PIK”) interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement at fair value of an existing portfolio company into this category from a different category.
(B)
Gross redemptions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.
(25)
Denotes investments in which the Company is in “Control”, as defined in the 1940 Act, due to owning or holding the power to vote 25.0% or more of the outstanding voting securities of the investment. Fair value as of December 31, 2017 and December 31, 2016 along with transactions during the year ended December 31, 2017 in which the issuer was a controlled investment, is as follows:
Portfolio Company
 
Fair Value at
December 31, 2016
 
Gross
Additions
(A)
 
Gross
Redemptions
(B)
 
Net 
Realized
Gains
(Losses)
 
Net Change In
Unrealized
Appreciation
(Depreciation)
 
Fair Value at December 31, 2017
 
Interest
Income
 
Dividend
Income
 
Other
Income
New Mountain Net Lease Corporation
 
$
27,000

 
$
—

 
$
(27,000
)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

NM APP CANADA CORP
 
—

 
7,345

 
—

 
—

 
617

 
7,962

 
—

 
911

 
—

NM APP US LLC
 
—

 
5,080

 
—

 
—

 
58

 
5,138

 
—

 
594

 
—

NM CLFX LP
 
—

 
12,538

 
—

 
—

 
—

 
12,538

 
—

 
341

 
—

NM DRVT LLC
 
—

 
5,152

 
—

 
—

 
233

 
5,385

 
—

 
520

 
—

NM JRA LLC
 
—

 
2,043

 
—

 
—

 
148

 
2,191

 
—

 
232

 
—

NM KRLN LLC
 
—

 
7,510

 
—

 
—

 
685

 
8,195

 
—

 
736

 
—

NMFC Senior Loan Program II LLC
 
71,460

 
7,940

 
—

 
—

 
—

 
79,400

 
—

 
12,406

 
—

UniTek Global Services, Inc.
 
56,361

 
14,777

 
(4,006
)
 
—

 
(2,539
)
 
64,593

 
1,709

 
4,415

 
819

Total Controlled Investments
 
$
154,821

 
$
62,385

 
$
(31,006
)
 
$
—

 
$
(798
)
 
$
185,402

 
$
1,709

 
$
20,155

 
$
819

_______________________________________________________________________________
(A)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement at fair value of an existing portfolio company into this category from a different category.
(B)
Gross redemptions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.
*
All or a portion of interest contains PIK interest.
**
Indicates assets that the Company deems to be “non-qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of December 31, 2017, 11.0% of the Company’s total investments were non-qualifying assets.
 


The accompanying notes are an integral part of these consolidated financial statements.
33
Table of Contents
New Mountain Finance Corporation
 
Consolidated Schedule of Investments (Continued)
 December 31, 2017
(in thousands, except shares)




 
 
December 31, 2017
Investment Type
 
Percent of Total
Investments at Fair Value
First lien
 
37.99
%
Second lien
 
37.41
%
Subordinated
 
3.85
%
Equity and other
 
20.75
%
Total investments
 
100.00
%
 
 
 
December 31, 2017
Industry Type
 
Percent of Total
Investments at Fair Value
Business Services
 
31.85
%
Software
 
16.33
%
Healthcare Services
 
9.60
%
Education
 
9.48
%
Consumer Services
 
7.18
%
Distribution & Logistics
 
6.15
%
Investment Fund
 
5.61
%
Federal Services
 
4.30
%
Energy
 
4.06
%
Net Lease
 
2.27
%
Healthcare Information Technology
 
1.86
%
Packaging
 
0.79
%
Business Products
 
0.52
%
Total investments
 
100.00
%
 
 
 
December 31, 2017
Interest Rate Type
 
Percent of Total
Investments at Fair Value
Floating rates
 
87.48
%
Fixed rates
 
12.52
%
Total investments
 
100.00
%


The accompanying notes are an integral part of these consolidated financial statements.
34
Table of Contents


Notes to the Consolidated Financial Statements of
New Mountain Finance Corporation
 
June 30, 2018
(in thousands, except share data)
(unaudited)
Note 1. Formation and Business Purpose
New Mountain Finance Corporation (“NMFC” or the “Company”) is a Delaware corporation that was originally incorporated on June 29, 2010 and completed its initial public offering ("IPO") on May 19, 2011. NMFC is a closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). As such, NMFC is obligated to comply with certain regulatory requirements. NMFC has elected to be treated, and intends to comply with the requirements to continue to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). NMFC is also registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Since NMFC’s IPO, and through June 30, 2018, NMFC raised approximately $614,581 in net proceeds from additional offerings of its common stock.
New Mountain Finance Advisers BDC, L.L.C. (the “Investment Adviser”) is a wholly-owned subsidiary of New Mountain Capital, L.L.C. ("New Mountain Capital", defined as New Mountain Capital Group, L.L.C. and its affiliates). New Mountain Capital is a firm with a track record of investing in the middle market. New Mountain Capital focuses on investing in defensive growth companies across its private equity, public equity and credit investment vehicles. The Investment Adviser manages the Company's day-to-day operations and provides it with investment advisory and management services. New Mountain Finance Administration, L.L.C. (the "Administrator”), a wholly-owned subsidiary of New Mountain Capital, provides the administrative services necessary to conduct the Company's day-to-day operations.
The Company’s wholly-owned subsidiary, New Mountain Finance Holdings, L.L.C. (“NMF Holdings”), is a Delaware limited liability company whose assets are used to secure NMF Holdings’ credit facility. NMF Ancora Holdings Inc. (“NMF Ancora”), NMF QID NGL Holdings, Inc. (“NMF QID”) and NMF YP Holdings Inc. (“NMF YP”), the Company's wholly-owned subsidiaries, are structured as Delaware entities that serve as tax blocker corporations which hold equity or equity-like investments in portfolio companies organized as limited liability companies (or other forms of pass-through entities). The Company consolidates its tax blocker corporations for accounting purposes. The tax blocker corporations are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of portfolio companies. Additionally, the Company has a wholly-owned subsidiary, New Mountain Finance Servicing, L.L.C. (“NMF Servicing”), that serves as the administrative agent on certain investment transactions. New Mountain Finance SBIC, L.P. (“SBIC I”) and its general partner, New Mountain Finance SBIC G.P., L.L.C. (“SBIC I GP”), were organized in Delaware as a limited partnership and limited liability company, respectively. New Mountain Finance SBIC II, L.P. (“SBIC II”) and its general partner, New Mountain Finance SBIC II G.P., L.L.C. (“SBIC II GP”), were also organized in Delaware as a limited partnership and limited liability company, respectively. SBIC I, SBIC I GP, SBIC II and SBIC II GP are consolidated wholly-owned direct and indirect subsidiaries of the Company. SBIC I and SBIC II received a license from the United States ("U.S.") Small Business Administration (the “SBA”) to operate as small business investment companies (“SBICs”) under Section 301(c) of the Small Business Investment Act of 1958, as amended (the “1958 Act”). The Company's wholly-owned subsidiary, New Mountain Net Lease Corporation ("NMNLC"), a Maryland corporation, was formed to acquire commercial real properties that are subject to "triple net" leases and has qualified and intends to continue to qualify as a real estate investment trust, or REIT, within the meaning of Section 856(a) of the Code.
The Company’s investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. The first lien debt may include traditional first lien senior secured loans or unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and subordinated loans. Unitranche loans will expose the Company to the risks associated with second lien and subordinated loans to the extent the Company invests in the “last out” tranche. In some cases, the Company’s investments may also include equity interests. The primary focus is in the debt of defensive growth companies, which are defined as generally exhibiting the following characteristics: (i) sustainable secular growth drivers, (ii) high barriers to competitive entry, (iii) high free cash flow after capital expenditure and working capital needs, (iv) high returns on assets and (v) niche market dominance. Similar to the Company, SBIC I's and SBIC II's investment objectives are to generate current income and capital appreciation under the investment criteria used by the Company. However, SBIC I and SBIC II investments must be in SBA eligible small businesses. The Company’s portfolio may be concentrated in a limited number of industries. As of June 30, 2018, the Company’s top five industry concentrations were business services, software, healthcare services, education and investment funds.

35
Table of Contents

Note 2. Summary of Significant Accounting Policies
Basis of accounting—The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification Topic 946, Financial Services—Investment Companies, (“ASC 946”). NMFC consolidates its wholly-owned direct and indirect subsidiaries: NMF Holdings, NMF Servicing, NMNLC, SBIC I, SBIC I GP, SBIC II, SBIC II GP, NMF Ancora, NMF QID and NMF YP.
The Company’s consolidated financial statements reflect all adjustments and reclassifications which, in the opinion of management, are necessary for the fair presentation of the results of operations and financial condition for all periods presented. All intercompany transactions have been eliminated. Revenues are recognized when earned and expenses when incurred. The financial results of the Company’s portfolio investments are not consolidated in the financial statements.
The Company’s interim consolidated financial statements are prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 6 or 10 of Regulation S-X. Accordingly, the Company’s interim consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the interim period, have been included. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, 2018.
Investments—The Company applies fair value accounting in accordance with GAAP. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments are reflected on the Company’s Consolidated Statements of Assets and Liabilities at fair value, with changes in unrealized gains and losses resulting from changes in fair value reflected in the Company’s Consolidated Statements of Operations as “Net change in unrealized appreciation (depreciation) of investments” and realizations on portfolio investments reflected in the Company’s Consolidated Statements of Operations as “Net realized gains (losses) on investments”.
The Company values its assets on a quarterly basis, or more frequently if required under the 1940 Act. In all cases, the Company’s board of directors is ultimately and solely responsible for determining the fair value of the portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded, those whose market prices are not readily available and any other situation where its portfolio investments require a fair value determination. Security transactions are accounted for on a trade date basis. The Company’s quarterly valuation procedures are set forth in more detail below:
(1)
Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.
(2)
Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.
a.
Bond quotes are obtained through independent pricing services. Internal reviews are performed by the investment professionals of the Investment Adviser to ensure that the quote obtained is representative of fair value in accordance with GAAP and, if so, the quote is used. If the Investment Adviser is unable to sufficiently validate the quote(s) internally and if the investment’s par value or its fair value exceeds the materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below); and
b.
For investments other than bonds, the Company looks at the number of quotes readily available and performs the following procedures:
i.
Investments for which two or more quotes are received from a pricing service are valued using the mean of the mean of the bid and ask of the quotes obtained.
ii.
Investments for which one quote is received from a pricing service are validated internally. The investment professionals of the Investment Adviser analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. If the Investment Adviser is unable to sufficiently validate the quote internally and if the investment’s par value or its fair value exceeds the materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).
(3)
Investments for which quotations are not readily available through exchanges, pricing services, brokers, or dealers are valued through a multi-step valuation process:

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a.
Each portfolio company or investment is initially valued by the investment professionals of the Investment Adviser responsible for the credit monitoring;
b.
Preliminary valuation conclusions will then be documented and discussed with the Company’s senior management;
c.
If an investment falls into (3) above for four consecutive quarters and if the investment’s par value or its fair value exceeds the materiality threshold, then at least once each fiscal year, the valuation for each portfolio investment for which the Company does not have a readily available market quotation will be reviewed by an independent valuation firm engaged by the Company’s board of directors; and
d.
When deemed appropriate by the Company’s management, an independent valuation firm may be engaged to review and value investment(s) of a portfolio company, without any preliminary valuation being performed by the Investment Adviser. The investment professionals of the Investment Adviser will review and validate the value provided.
For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of a commitment not completely funded may result in a negative fair value until it is called and funded.
The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period and the fluctuations could be material.
See Note 3. Investments, for further discussion relating to investments.
New Mountain Net Lease Corporation
NMNLC was formed to acquire commercial real properties that are subject to "triple net" leases. NMNLC's investments are disclosed on the Company's Consolidated Schedule of Investments as of June 30, 2018.
Below is certain summarized property information for NMNLC as of June 30, 2018:
 
 
 
 
Lease
 
 
 
Total
 
Fair Value as of
Portfolio Company
 
Tenant
 
Expiration Date
 
Location
 
Square Feet
 
June 30, 2018
NM NL Holdings, L.P.
 
FXI Inc.
 
6/30/2038
 
IN / MS / NM / OR / PA / Mexico
 
2,122
 
$
20,229

NM GLCR LP
 
Arctic Glacier U.S.A.
 
2/28/2038
 
CA
 
214
 
14,750

NM CLFX LP
 
Victor Equipment Company
 
8/31/2033
 
TX
 
423
 
12,538

NM APP Canada Corp.
 
A.P. Plasman, Inc.
 
9/30/2031
 
Canada
 
436
 
8,475

NM KRLN LLC
 
Kirlin Group, LLC
 
6/30/2029
 
MD
 
95
 
8,462

NM DRVT LLC
 
FMH Conveyors, LLC
 
10/31/2031
 
AR
 
195
 
5,507

NM APP US LLC
 
Plasman Corp, LLC / A-Brite LP
 
9/30/2033
 
AL / OH
 
261
 
5,274

NM JRA LLC
 
J.R. Automation Technologies, LLC
 
1/31/2031
 
MI
 
88
 
2,240

 
 
 
 
 
 
 
 
 
 
$
77,475

Collateralized agreements or repurchase financings—The Company follows the guidance in Accounting Standards Codification Topic 860, Transfers and Servicing—Secured Borrowing and Collateral, (“ASC 860”) when accounting for transactions involving the purchases of securities under collateralized agreements to resell (resale agreements). These transactions are treated as collateralized financing transactions and are recorded at their contracted resale or repurchase amounts, as specified in the respective agreements. Interest on collateralized agreements is accrued and recognized over the life of the transaction and included in interest income. As of June 30, 2018 and December 31, 2017, the Company held one collateralized agreement to resell with a cost basis of $30,000 and $30,000, respectively, and a fair value of $25,200 and $25,212, respectively. The collateralized agreement to resell is guaranteed by a private hedge fund. The private hedge fund is currently in liquidation under the laws of the Cayman Islands. Pursuant to the terms of the collateralized agreement, the private hedge fund was obligated to repurchase the collateral from the Company at the par value of the collateralized agreement. The

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private hedge fund has breached its agreement to repurchase the collateral under the collateralized agreement. The default by the private hedge fund did not release the collateral to the Company, and therefore, the Company does not have full rights and title to the collateral. A claim has been filed with the Cayman Islands joint official liquidators to resolve this matter. The joint official liquidators have recognized the Company’s contractual rights under the collateralized agreement. The Company continues to exercise its rights under the collateralized agreement and continues to monitor the liquidation process of the private hedge fund. The fair value of the collateralized agreement to resell is reflective of the increased risk of the position.
Cash and cash equivalents—Cash and cash equivalents include cash and short-term, highly liquid investments. The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and so near maturity that there is insignificant risk of changes in value. These securities have original maturities of three months or less. The Company did not hold any cash equivalents as of June 30, 2018 and December 31, 2017.
Revenue recognition
Sales and paydowns of investments:  Realized gains and losses on investments are determined on the specific identification method.
Interest and dividend income:  Interest income, including amortization of premium and discount using the effective interest method, is recorded on the accrual basis and periodically assessed for collectability. Interest income also includes interest earned from cash on hand. Upon the prepayment of a loan or debt security, any prepayment penalties are recorded as part of interest income. The Company has loans and certain preferred equity investments in the portfolio that contain a payment-in-kind (“PIK”) interest or dividend provision. PIK interest and dividends are accrued and recorded as income at the contractual rates, if deemed collectible.  The PIK interest and dividends are added to the principal or share balances on the capitalization dates and are generally due at maturity or when redeemed by the issuer. For the three and six months ended June 30, 2018, the Company recognized PIK and non-cash interest from investments of $1,938 and $3,612, respectively, and PIK and non-cash dividends from investments of $6,964 and $13,751, respectively. For the three and six months ended June 30, 2017, the Company recognized PIK and non-cash interest from investments of $873 and $1,741, respectively, and PIK and non-cash dividends from investments of $4,841 and $6,318, respectively.
Dividend income on common equity is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Dividend income on preferred securities is recorded as dividend income on an accrual basis to the extent that such amounts are deemed collectible.
Non-accrual income:  Investments are placed on non-accrual status when principal or interest payments are past due for 30 days or more and when there is reasonable doubt that principal or interest will be collected. Accrued cash and un-capitalized PIK interest or dividends are reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest or dividends are not reversed when an investment is placed on non-accrual status. Interest or dividend payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment of the ultimate outcome. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.
Other income:  Other income represents delayed compensation, consent or amendment fees, revolver fees, structuring fees, upfront fees, management fees from a non-controlled/affiliated investment and other miscellaneous fees received and are typically non-recurring in nature. Delayed compensation is income earned from counterparties on trades that do not settle within a set number of business days after trade date. Other income may also include fees from bridge loans. The Company may from time to time enter into bridge financing commitments, an obligation to provide interim financing to a counterparty until permanent credit can be obtained. These commitments are short-term in nature and may expire unfunded. A fee is received by the Company for providing such commitments. Structuring fees and upfront fees are recognized as income when earned, usually when paid at the closing of the investment, and are non-refundable.
Interest and other financing expenses—Interest and other financing fees are recorded on an accrual basis by the Company. See Note 7. Borrowings, for details.
Deferred financing costs—The deferred financing costs of the Company consists of capitalized expenses related to the origination and amending of the Company’s borrowings. The Company amortizes these costs into expense over the stated life of the related borrowing. See Note 7. Borrowings, for details.
Deferred offering costs—The Company's deferred offering costs consists of fees and expenses incurred in connection with equity offerings and the filing of shelf registration statements. Upon the issuance of shares, offering costs are charged as a direct reduction to net assets. Deferred offering costs are included in other assets on the Company's Consolidated Statements of Assets and Liabilities.

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Income taxes—The Company has elected to be treated, and intends to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code. As a RIC, the Company is not subject to U.S. federal income tax on the portion of taxable income and gains timely distributed to its stockholders.
To continue to qualify and be subject to tax as a RIC, the Company is required to meet certain income and asset diversification tests in addition to distributing at least 90.0% of its investment company taxable income, as defined by the Code. Since U.S. federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes.
Differences between taxable income and the results of operations for financial reporting purposes may be permanent or temporary in nature. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.
For U.S. federal income tax purposes, distributions paid to stockholders of the Company are reported as ordinary income, return of capital, long term capital gains or a combination thereof.
The Company will be subject to a 4.0% nondeductible federal excise tax on certain undistributed income unless the Company distributes, in a timely manner as required by the Code, an amount at least equal to the sum of (1) 98.0% of its respective net ordinary income earned for the calendar year and (2) 98.2% of its respective capital gain net income for the one-year period ending October 31 in the calendar year.
Certain consolidated subsidiaries of the Company are subject to U.S. federal and state income taxes. These taxable entities are not consolidated for income tax purposes and may generate income tax liabilities or assets from permanent and temporary differences in the recognition of items for financial reporting and income tax purposes.
For the three and six months ended June 30, 2018, the Company recognized a total income tax provision of approximately $1,111 and $1,045, respectively, for the Company’s consolidated subsidiaries. For the three and six months ended June 30, 2018, the Company recorded current income tax expense of approximately $45 and $61, respectively, and deferred income tax provision of approximately $1,066 and $984, respectively. For the three and six months ended June 30, 2017, the Company recognized a total income tax benefit of approximately $9 and $684, respectively, for the Company’s consolidated subsidiaries.  For the three and six months ended June 30, 2017, the Company recorded current income tax expense of approximately $155 and $235, respectively, and deferred income tax benefit of approximately $164 and $919, respectively.
As of June 30, 2018 and December 31, 2017, the Company had $1,878 and $894, respectively, of deferred tax liabilities primarily relating to deferred taxes attributable to certain differences between the computation of income for U.S. federal income tax purposes as compared to GAAP.
The Company has adopted the Income Taxes topic of the Accounting Standards Codification Topic 740 (“ASC 740”). ASC 740 provides guidance for income taxes, including how uncertain income tax positions should be recognized, measured, and disclosed in the financial statements. Based on its analysis, the Company has determined that there were no uncertain income tax positions that do not meet the more likely than not threshold through December 31, 2017. The 2014 through 2017 tax years remain subject to examination by the U.S. federal, state, and local tax authorities.
Distributions—Distributions to common stockholders of the Company are recorded on the record date as set by the board of directors. The Company intends to make distributions to its stockholders that will be sufficient to enable the Company to maintain its status as a RIC. The Company intends to distribute approximately all of its net investment income on a quarterly basis and substantially all of its taxable income on an annual basis, except that the Company may retain certain net capital gains for reinvestment.
The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions declared on behalf of its stockholders, unless a stockholder elects to receive cash.
The Company applies the following in implementing the dividend reinvestment plan. If the price at which newly issued shares are to be credited to stockholders’ accounts is equal to or greater than 110.0% of the last determined net asset value of the shares, the Company will use only newly issued shares to implement its dividend reinvestment plan. Under such circumstances, the number of shares to be issued to a stockholder is determined by dividing the total dollar amount of the distribution payable to such stockholder by the market price per share of the Company’s common stock on the New York Stock Exchange (“NYSE”) on the distribution payment date. Market price per share on that date will be the closing price for such shares on the NYSE or, if no sale is reported for such day, the average of their electronically reported bid and ask prices.
If the price at which newly issued shares are to be credited to stockholders’ accounts is less than 110.0% of the last determined net asset value of the shares, the Company will either issue new shares or instruct the plan administrator to purchase shares in the open market to satisfy the additional shares required. Shares purchased in open market transactions by the plan

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administrator will be allocated to a stockholder based on the average purchase price, excluding any brokerage charges or other charges, of all shares of common stock purchased in the open market. The number of shares of the Company’s common stock to be outstanding after giving effect to payment of the distribution cannot be established until the value per share at which additional shares will be issued has been determined and elections of the Company’s stockholders have been tabulated.
Share repurchase program—On February 4, 2016, the Company's board of directors authorized a program for the purpose of repurchasing up to $50,000 worth of the Company's common stock. Under the repurchase program, the Company was permitted, but was not obligated, to repurchase its outstanding common stock in the open market from time to time provided that it complied with the Company's code of ethics and the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act), including certain price, market volume and timing constraints. In addition, any repurchases were conducted in accordance with the 1940 Act. On December 29, 2017, the Company's board of directors extended the Company's repurchase program and the Company expects the repurchase program to be in place until the earlier of December 31, 2018 or until $50,000 of its outstanding shares of common stock have been repurchased. During the three and six months ended June 30, 2018 and June 30, 2017, the Company did not repurchase any shares of the Company's common stock. The Company previously repurchased $2,948 of its common stock under the share repurchase program.
Earnings per share—The Company’s earnings per share (“EPS”) amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. Basic EPS is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average number of shares of common stock outstanding during the period of computation. Diluted EPS is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average number of shares of common stock assuming all potential shares had been issued, and its related net impact to net assets accounted for, and the additional shares of common stock were dilutive. Diluted EPS reflects the potential dilution, using the as-if-converted method for convertible debt, which could occur if all potentially dilutive securities were exercised.
Foreign securities—The accounting records of the Company are maintained in U.S. dollars. Investment securities denominated in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies on the respective dates of the transactions. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with “Net change in unrealized appreciation (depreciation) of investments” and “Net realized gains (losses) on investments” in the Company’s Consolidated Statements of Operations.
Investments denominated in foreign currencies may be negatively affected by movements in the rate of exchange between the U.S. dollar and such foreign currencies. This movement is beyond the control of the Company and cannot be predicted.
Use of estimates—The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Company’s consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Changes in the economic environment, financial markets, and other metrics used in determining these estimates could cause actual results to differ from the estimates used, and the differences could be material.
Dividend income recorded related to distributions received from flow-through investments is an accounting estimate based on the most recent estimate of the tax treatment of the distribution.

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Note 3. Investments
At June 30, 2018, the Company’s investments consisted of the following:
Investment Cost and Fair Value by Type
 
Cost
 
Fair Value
First lien
$
826,539

 
$
828,387

Second lien
719,444

 
713,974

Subordinated
72,328

 
67,801

Equity and other
442,355

 
487,856

Total investments
$
2,060,666

 
$
2,098,018

Investment Cost and Fair Value by Industry
 
Cost
 
Fair Value
Business Services
$
655,485

 
$
687,852

Software
322,353

 
329,076

Healthcare Services
273,300

 
259,238

Education
195,082

 
189,920

Investment Fund
145,200

 
145,200

Consumer Services
122,410

 
123,211

Energy
90,676

 
99,044

Distribution & Logistics
89,106

 
92,923

Net Lease
74,647

 
77,475

Federal Services
52,635

 
53,784

Healthcare Information Technology
14,705

 
15,075

Packaging
14,318

 
14,391

Business Products
10,749

 
10,829

Total investments
$
2,060,666

 
$
2,098,018


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At December 31, 2017, the Company’s investments consisted of the following:
Investment Cost and Fair Value by Type
 
Cost
 
Fair Value
First lien
$
688,696

 
$
693,563

Second lien
674,536

 
682,950

Subordinated
70,991

 
70,257

Equity and other
357,004

 
378,890

Total investments
$
1,791,227

 
$
1,825,660

Investment Cost and Fair Value by Industry
 
Cost
 
Fair Value
Business Services
$
566,344

 
$
581,434

Software
291,445

 
298,172

Healthcare Services
174,046

 
175,348

Education
176,399

 
173,072

Consumer Services
129,311

 
131,116

Distribution & Logistics
107,835

 
112,241

Investment Fund
102,400

 
102,400

Federal Services
77,001

 
78,433

Energy
69,411

 
74,124

Net Lease
39,668

 
41,409

Healthcare Information Technology
33,525

 
34,020

Packaging
14,309

 
14,391

Business Products
9,533

 
9,500

Total investments
$
1,791,227

 
$
1,825,660

    
During the first quarter of 2018, the Company placed its first lien positions in Education Management II LLC ("EDMC") on non-accrual status as EDMC announced its intention to wind down and liquidate the business. As of June 30, 2018, the Company's investment in EDMC placed on non-accrual status represented an aggregate cost basis of $1,004, an aggregate fair value of $76 and total unearned interest income of $22 and $89, respectively, for the three and six months then ended.
During the second quarter of 2018, the Company placed a portion of its second lien position in National HME, Inc. on non-accrual status and wrote down the aggregate fair value of its preferred shares in TW-NHME Holdings Corp. (together with the Company's second lien position, "NHME") to $0. As of June 30, 2018, the Company's investments in NHME had an aggregate cost basis of $28,448, an aggregate fair value of $13,650 and total unearned interest income of $407 and $407, respectively, for the three and six months then ended.
During the first quarter of 2017, the Company placed its entire first lien notes position in Sierra Hamilton LLC / Sierra Hamilton Finance, Inc. ("Sierra") on non-accrual status due to its ongoing restructuring. As of June 30, 2017, the Company's investment in Sierra placed on non-accrual status represented an aggregate cost basis of $27,231, an aggregate fair value of $12,725 and total unearned interest income of $1,388 for the six months then ended. In July 2017, Sierra completed a restructuring which resulted in a material modification of the original terms and an extinguishment of the Company’s original investment in Sierra. Prior to the extinguishment in July 2017, the Company’s original investment in Sierra had an aggregate cost of $27,307, an aggregate fair value of $12,858 and total unearned interest income of $1,687. The extinguishment resulted in a realized loss of $14,449. As a result of the restructuring, the Company received common shares in Sierra Hamilton Holding Corporation. As of June 30, 2018, the Company’s investment has an aggregate cost basis of $12,782 and an aggregate fair value of $12,527.
As of June 30, 2018, the Company had unfunded commitments on revolving credit facilities and bridge facilities of $48,060 and $0, respectively. As of June 30, 2018, the Company had unfunded commitments in the form of delayed draws or other future funding commitments of $67,479. The unfunded commitments on revolving credit facilities and delayed draws are disclosed on the Company’s Consolidated Schedule of Investments as of June 30, 2018.

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As of December 31, 2017, the Company had unfunded commitments on revolving credit facilities and bridge facilities of $23,716 and $0, respectively. As of December 31, 2017, the Company had unfunded commitments in the form of delayed draws or other future funding commitments of $53,712. The unfunded commitments on revolving credit facilities and delayed draws are disclosed on the Company’s Consolidated Schedule of Investments as of December 31, 2017.
PPVA Black Elk (Equity) LLC
On May 3, 2013, the Company entered into a collateralized securities purchase and put agreement (the “SPP Agreement”) with a private hedge fund. Under the SPP Agreement, the Company purchased twenty million Class E Preferred Units of Black Elk Energy Offshore Operations, LLC (“Black Elk”) for $20,000 with a corresponding obligation of the private hedge fund to repurchase the preferred units for $20,000 plus other amounts due under the SPP Agreement. The majority owner of Black Elk was the private hedge fund. In August 2014, the Company received a payment of $20,540, the full amount due under the SPP Agreement.
In August 2017, a trustee (the “Trustee”) for Black Elk informed the Company that the Trustee intended to assert a fraudulent conveyance claim (the “Claim”) against the Company and one of its affiliates seeking the return of the $20,540 repayment. Black Elk filed a Chapter 11 bankruptcy petition pursuant to the United States Bankruptcy Code in August 2015. The Trustee alleges that individuals affiliated with the private hedge fund conspired with Black Elk and others to improperly use proceeds from the sale of certain Black Elk assets to repay, in August 2014, the private hedge fund’s obligation to the Company under the SPP Agreement. The Company was unaware of these claims at the time the repayment was received. The private hedge fund is currently in liquidation under the laws of the Cayman Islands.
On December 22, 2017, the Company settled the Trustee’s $20,540 Claim for $16,000 and filed a claim with the Cayman Islands joint official liquidators of the private hedge fund for $16,000 that is owed to the Company under the SPP Agreement. The SPP Agreement was restored and is in effect since repayment has not been made. The Company continues to exercise its rights under the SPP Agreement and continues to monitor the liquidation process of the private hedge fund. During the six months ended June 30, 2018, the Company received a $1,500 payment from its insurance carrier in respect to the settlement. As of June 30, 2018, the SPP Agreement has a cost basis of $14,500 and a fair value of $12,180, which is reflective of the higher inherent risk in this transaction.
NMFC Senior Loan Program I LLC
NMFC Senior Loan Program I LLC (“SLP I”) was formed as a Delaware limited liability company on May 27, 2014 and commenced operations on June 10, 2014. SLP I is a portfolio company held by the Company. SLP I is structured as a private investment fund, in which all of the investors are qualified purchasers, as such term is defined under the 1940 Act. Transfer of interests in SLP I is subject to restrictions and, as a result, such interests are not readily marketable. SLP I operates under a limited liability company agreement (the “SLP I Agreement”) and will continue in existence until July 31, 2020, subject to earlier termination pursuant to certain terms of the SLP I Agreement. The term may be extended pursuant to certain terms of the SLP I Agreement and SLP I's re-investment period is through July 31, 2018. SLP I invests in senior secured loans issued by companies within the Company’s core industry verticals. These investments are typically broadly syndicated first lien loans.
SLP I is capitalized with $93,000 of capital commitments and $265,000 of debt from a revolving credit facility and is managed by the Company. The Company’s capital commitment is $23,000, representing less than 25.0% ownership, with third party investors representing the remaining capital commitments. As of June 30, 2018, SLP I had total investments with an aggregate fair value of approximately $347,230, debt outstanding of $251,567 and capital that had been called and funded of $93,000. As of December 31, 2017, SLP I had total investments with an aggregate fair value of approximately $348,652, debt outstanding of $223,667 and capital that had been called and funded of $93,000. The Company’s investment in SLP I is disclosed on the Company’s Consolidated Schedule of Investments as of June 30, 2018 and December 31, 2017.
The Company, as an investment adviser registered under the Advisers Act, acts as the collateral manager to SLP I and is entitled to receive a management fee for its investment management services provided to SLP I. As a result, SLP I is classified as an affiliate of the Company. No management fee is charged on the Company's investment in SLP I in connection with the administrative services provided to SLP I. For the three and six months ended June 30, 2018, the Company earned approximately $301 and $596, respectively, in management fees related to SLP I, which is included in other income. For the three and six months ended June 30, 2017, the Company earned approximately $289 and $579, respectively, in management fees related to SLP I, which is included in other income. As of June 30, 2018 and December 31, 2017, approximately $887 and $291, respectively, of management fees related to SLP I was included in receivable from affiliates. For the three and six months ended June 30, 2018, the Company earned approximately $791 and $1,636, respectively, of dividend income related to SLP I, which is included in dividend income. For the three and six months ended June 30, 2017, the Company earned approximately $842 and $1,846, respectively, of dividend income related to SLP I, which is included in dividend income. As of June 30, 2018 and December 31, 2017, approximately $981 and $836, respectively, of dividend income related to SLP I was included in interest and dividend receivable.

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NMFC Senior Loan Program II LLC
NMFC Senior Loan Program II LLC ("SLP II") was formed as a Delaware limited liability company on March 9, 2016 and commenced operations on April 12, 2016. SLP II is structured as a private joint venture investment fund between the Company and SkyKnight Income, LLC (“SkyKnight”) and operates under a limited liability company agreement (the "SLP II Agreement"). The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within the Company's core industry verticals. These investments are typically broadly syndicated first lien loans. All investment decisions must be unanimously approved by the board of managers of SLP II, which has equal representation from the Company and SkyKnight. SLP II has a three year investment period and will continue in existence until April 12, 2021. The term may be extended for up to one year pursuant to certain terms of the SLP II Agreement.
SLP II is capitalized with equity contributions which are called from its members, on a pro-rata basis based on their equity commitments, as transactions are completed. Any decision by SLP II to call down on capital commitments requires approval by the board of managers of SLP II. As of June 30, 2018, the Company and SkyKnight have committed and contributed $79,400 and $20,600, respectively, of equity to SLP II. The Company’s investment in SLP II is disclosed on the Company’s Consolidated Schedule of Investments as of June 30, 2018 and December 31, 2017.
On April 12, 2016, SLP II closed its $275,000 revolving credit facility with Wells Fargo Bank, National Association, which matures on April 12, 2021 and bears interest at a rate of the London Interbank Offered Rate ("LIBOR") plus 1.75% per annum. Effective April 1, 2018, SLP II's revolving credit facility bears interest at a rate of LIBOR plus 1.60% per annum. As of June 30, 2018 and December 31, 2017, SLP II had total investments with an aggregate fair value of approximately $368,920 and $382,534, respectively, and debt outstanding under its credit facility of $267,870 and $266,270, respectively. As of June 30, 2018 and December 31, 2017, none of SLP II's investments were on non-accrual. Additionally, as of June 30, 2018 and December 31, 2017, SLP II had unfunded commitments in the form of delayed draws of $7,032 and $4,863, respectively. Below is a summary of SLP II's portfolio, along with a listing of the individual investments in SLP II's portfolio as of June 30, 2018 and December 31, 2017:
 
 
June 30, 2018
 
December 31, 2017
First lien investments (1)
 
374,972

 
386,100

Weighted average interest rate on first lien investments (2)
 
6.51
%
 
6.05
%
Number of portfolio companies in SLP II
 
33

 
35

Largest portfolio company investment (1)
 
17,183

 
17,369

Total of five largest portfolio company investments (1)
 
80,614

 
81,728

 
(1)
Reflects principal amount or par value of investment.
(2)
Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

44
Table of Contents

The following table is a listing of the individual investments in SLP II's portfolio as of June 30, 2018:
Portfolio Company and Type of Investment
 
Industry
 
Interest Rate (1)
 
Maturity Date
 
 Principal Amount or Par Value
 
 Cost
 
Fair
Value (2)
Funded Investments - First lien:
 
 
 
 
 
 
 
 
 
 
 
 
Access CIG, LLC
 
Business Services
 
 5.84% (L + 3.75%)
 
2/27/2025
 
$
8,870

 
$
8,827

 
$
8,898

ADG, LLC
 
Healthcare Services
 
 6.84% (L + 4.75%)
 
9/28/2023
 
16,948

 
16,815

 
16,694

ASG Technologies Group, Inc.
 
Software
 
 5.59% (L + 3.50%)
 
7/31/2024
 
5,449

 
5,424

 
5,427

Beaver-Visitec International Holdings, Inc.
 
Healthcare Products
 
 7.09% (L + 5.00%)
 
8/21/2023
 
14,738

 
14,622

 
14,756

Brave Parent Holdings, Inc.
 
Software
 
 6.33% (L + 4.00%)
 
4/18/2025
 
8,500

 
8,479

 
8,543

CHA Holdings, Inc.
 
Business Services
 
 6.58% (L + 4.50%)
 
4/10/2025
 
9,857

 
9,808

 
9,931

CommerceHub, Inc.
 
Software
 
 5.86% (L + 3.75%)
 
5/21/2025
 
2,500

 
2,487

 
2,512

DigiCert, Inc.
 
Business Services
 
 6.84% (L + 4.75%)
 
10/31/2024
 
9,975

 
9,929

 
9,977

FPC Holdings, Inc.
 
Distribution & Logistics
 
 6.59% (L + 4.50%)
 
11/18/2022
 
14,963

 
14,532

 
15,084

Globallogic Holdings Inc.
 
Business Services
 
 6.08% (L + 3.75%)
 
6/20/2022
 
4,665

 
4,637

 
4,677

Greenway Health, LLC
 
Software
 
 6.08% (L + 3.75%)
 
2/16/2024
 
14,849

 
14,788

 
14,869

Idera, Inc.
 
Software
 
 6.60% (L + 4.50%)
 
6/28/2024
 
12,555

 
12,443

 
12,750

J.D. Power (fka J.D. Power and Associates)
 
Business Services
 
 6.34% (L + 4.25%)
 
9/7/2023
 
13,290

 
13,244

 
13,340

Keystone Acquisition Corp.
 
Healthcare Services
 
 7.58% (L + 5.25%)
 
5/1/2024
 
5,360

 
5,313

 
5,356

LSCS Holdings, Inc.
 
Healthcare Services
 
 6.52% (L + 4.25%)
 
3/17/2025
 
6,384

 
6,373

 
6,384

LSCS Holdings, Inc.
 
Healthcare Services
 
 6.34% (L + 4.25%)
 
3/17/2025
 
1,264

 
1,263

 
1,264

Market Track, LLC
 
Business Services
 
 6.58% (L + 4.25%)
 
6/5/2024
 
11,880

 
11,828

 
11,880

Medical Solutions Holdings, Inc.
 
Healthcare Services
 
 5.84% (L + 3.75%)
 
6/14/2024
 
4,454

 
4,434

 
4,457

Ministry Brands, LLC
 
Software
 
 6.10% (L + 4.00%)
 
12/2/2022
 
2,127

 
2,118

 
2,127

Ministry Brands, LLC
 
Software
 
 6.10% (L + 4.00%)
 
12/2/2022
 
12,348

 
12,295

 
12,348

Navex Global, Inc.
 
Software
 
 6.34% (L + 4.25%)
 
11/19/2021
 
14,820

 
14,668

 
14,885

Navicure, Inc.
 
Healthcare Services
 
 5.84% (L + 3.75%)
 
11/1/2024
 
10,935

 
10,885

 
10,935

NorthStar Financial Services Group, LLC
 
Software
 
 5.59% (L + 3.50%)
 
5/25/2025
 
7,500

 
7,463

 
7,519

Pathway Vet Alliance LLC (fka Pathway Partners Vet Management Company LLC)
 
Consumer Services
 
 6.34% (L + 4.25%)
 
10/10/2024
 
286

 
285

 
287

Pathway Vet Alliance LLC (fka Pathway Partners Vet Management Company LLC)
 
Consumer Services
 
 6.34% (L + 4.25%)
 
10/10/2024
 
9,654

 
9,609

 
9,678

Peraton Corp. (fka MHVC Acquisition Corp.)
 
Federal Services
 
 7.59% (L + 5.25%)
 
4/29/2024
 
10,395

 
10,350

 
10,473

Poseidon Intermediate, LLC
 
Software
 
 6.35% (L + 4.25%)
 
8/15/2022
 
14,805

 
14,802

 
14,879

Project Accelerate Parent, LLC
 
Business Services
 
 6.25% (L + 4.25%)
 
1/2/2025
 
14,963

 
14,892

 
15,037

PSC Industrial Holdings Corp.
 
Industrial Services
 
 5.84% (L + 3.75%)
 
10/11/2024
 
10,448

 
10,352

 
10,448

Quest Software US Holdings Inc.
 
Software
 
 6.58% (L + 4.25%)
 
5/16/2025
 
15,000

 
14,926

 
14,994

Salient CRGT Inc.
 
Federal Services
 
 7.84% (L + 5.75%)
 
2/28/2022
 
13,982

 
13,875

 
14,192

Severin Acquisition, LLC
 
Software
 
 7.11% (L + 4.75%)
 
7/30/2021
 
14,812

 
14,760

 
14,868

Sierra Acquisition, Inc.
 
Food & Beverage
 
 5.59% (L + 3.50%)
 
11/11/2024
 
3,731

 
3,714

 
3,750

WP CityMD Bidco LLC
 
Healthcare Services
 
 5.83% (L + 3.50%)
 
6/7/2024
 
14,887

 
14,855

 
14,822

YI, LLC
 
Healthcare Services
 
 6.33% (L + 4.00%)
 
11/7/2024
 
1,464

 
1,470

 
1,475

YI, LLC
 
Healthcare Services
 
 6.33% (L + 4.00%)
 
11/7/2024
 
12,099

 
12,089

 
12,190

Zywave, Inc.
 
Software
 
 7.34% (L + 5.00%)
 
11/17/2022
 
17,183

 
17,117

 
17,183

Total Funded Investments
 
 
 
 
 
 
 
$
367,940

 
$
365,771

 
$
368,889

Unfunded Investments - First lien:
 
 
 
 
 
 
 
 
 
 
 
 
Access CIG, LLC
 
Business Services
 
—
 
8/27/2018
 
$
1,108

 
$
—

 
$
3

CHA Holdings, Inc.
 
Business Services
 
—
 
10/10/2019
 
2,143

 
(11
)
 
16

LSCS Holdings, Inc.
 
Healthcare Services
 
—
 
9/17/2018
 
336

 
(2
)
 
—

Ministry Brands, LLC
 
Software
 
—
 
10/18/2019
 
1,869

 
(9
)
 
—

YI, LLC
 
Healthcare Services
 
—
 
11/7/2018
 
1,576

 
(8
)
 
12

Total Unfunded Investments
 
 
 
 
 
 
 
$
7,032

 
$
(30
)
 
$
31

Total Investments
 
 
 
 
 
 
 
$
374,972

 
$
365,741

 
$
368,920

 
(1)
All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L), the Prime Rate (P) and the alternative base rate (Base). For each investment, the current interest rate provided reflects the rate in effect as of June 30, 2018.
(2)
Represents the fair value in accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). The Company's board of directors does not determine the fair value of the investments held by SLP II.


45
Table of Contents

The following table is a listing of the individual investments in SLP II's portfolio as of December 31, 2017:
Portfolio Company and Type of Investment
 
Industry
 
Interest Rate (1)
 
Maturity Date
 
 Principal Amount or Par Value
 
 Cost
 
Fair
Value (2)
Funded Investments - First lien
 
 
 
 
 
 
 
 
 
 
 
 
ADG, LLC
 
Healthcare Services
 
 6.32% (L + 4.75%)
 
9/28/2023
 
$
17,034

 
$
16,890

 
$
16,779

ASG Technologies Group, Inc.
 
Software
 
 6.32% (L + 4.75%)
 
7/31/2024
 
7,481

 
7,446

 
7,547

Beaver-Visitec International Holdings, Inc.
 
Healthcare Products
 
 6.69% (L + 5.00%)
 
8/21/2023
 
14,812

 
14,688

 
14,813

DigiCert, Inc.
 
Business Services
 
 6.13% (L + 4.75%)
 
10/31/2024
 
10,000

 
9,951

 
10,141

Emerald 2 Limited
 
Business Services
 
 5.69% (L + 4.00%)
 
5/14/2021
 
1,266

 
1,211

 
1,267

Evo Payments International, LLC
 
Business Services
 
 5.57% (L + 4.00%)
 
12/22/2023
 
17,369

 
17,292

 
17,492

Explorer Holdings, Inc.
 
Healthcare Services
 
 5.13% (L + 3.75%)
 
5/2/2023
 
2,940

 
2,917

 
2,973

Globallogic Holdings Inc.
 
Business Services
 
 6.19% (L + 4.50%)
 
6/20/2022
 
9,677

 
9,611

 
9,755

Greenway Health, LLC
 
Software
 
 5.94% (L + 4.25%)
 
2/16/2024
 
14,925

 
14,858

 
15,074

Idera, Inc.
 
Software
 
 6.57% (L + 5.00%)
 
6/28/2024
 
12,619

 
12,499

 
12,556

J.D. Power (fka J.D. Power and Associates)
 
Business Services
 
 5.94% (L + 4.25%)
 
9/7/2023
 
13,357

 
13,308

 
13,407

Keystone Acquisition Corp.
 
Healthcare Services
 
 6.94% (L + 5.25%)
 
5/1/2024
 
5,386

 
5,336

 
5,424

Market Track, LLC
 
Business Services
 
 5.94% (L + 4.25%)
 
6/5/2024
 
11,940

 
11,884

 
11,940

McGraw-Hill Global Education Holdings, LLC
 
Education
 
 5.57% (L + 4.00%)
 
5/4/2022
 
9,850

 
9,813

 
9,844

Medical Solutions Holdings, Inc.
 
Healthcare Services
 
 5.82% (L + 4.25%)
 
6/14/2024
 
6,965

 
6,932

 
7,043

Ministry Brands, LLC
 
Software
 
 6.38% (L + 5.00%)
 
12/2/2022
 
2,138

 
2,128

 
2,138

Ministry Brands, LLC
 
Software
 
 6.38% (L + 5.00%)
 
12/2/2022
 
7,768

 
7,735

 
7,768

Navex Global, Inc.
 
Software
 
 5.82% (L + 4.25%)
 
11/19/2021
 
14,897

 
14,724

 
14,971

Navicure, Inc.
 
Healthcare Services
 
 5.11% (L + 3.75%)
 
11/1/2024
 
15,000

 
14,926

 
15,000

OEConnection LLC
 
Business Services
 
 5.69% (L + 4.00%)
 
11/22/2024
 
15,000

 
14,925

 
14,981

Pathway Partners Vet Management Company LLC
 
Consumer Services
 
 5.82% (L + 4.25%)
 
10/10/2024
 
6,963

 
6,929

 
6,980

Pathway Partners Vet Management Company LLC
 
Consumer Services
 
 5.82% (L + 4.25%)
 
10/10/2024
 
291

 
290

 
292

Peraton Corp. (fka MHVC Acquisition Corp.)
 
Federal Services
 
 6.95% (L + 5.25%)
 
4/29/2024
 
10,448

 
10,399

 
10,526

Poseidon Intermediate, LLC
 
Software
 
 5.82% (L + 4.25%)
 
8/15/2022
 
14,881

 
14,877

 
14,955

Project Accelerate Parent, LLC
 
Business Services
 
 5.94% (L + 4.25%)
 
1/2/2025
 
15,000

 
14,925

 
15,038

PSC Industrial Holdings Corp.
 
Industrial Services
 
 5.71% (L + 4.25%)
 
10/11/2024
 
10,500

 
10,398

 
10,500

Quest Software US Holdings Inc.
 
Software
 
 6.92% (L + 5.50%)
 
10/31/2022
 
9,899

 
9,775

 
10,071

Salient CRGT Inc.
 
Federal Services
 
 7.32% (L + 5.75%)
 
2/28/2022
 
14,433

 
14,310

 
14,559

Severin Acquisition, LLC
 
Software
 
 6.32% (L + 4.75%)
 
7/30/2021
 
14,888

 
14,827

 
14,813

Shine Acquisitoin Co. S.à.r.l / Boing US Holdco Inc.
 
Consumer Services
 
 4.88% (L + 3.50%)
 
10/3/2024
 
15,000

 
14,964

 
15,108

Sierra Acquisition, Inc.
 
Food & Beverage
 
 5.68% (L + 4.25%)
 
11/11/2024
 
3,750

 
3,731

 
3,789

TMK Hawk Parent, Corp.
 
Distribution & Logistics
 
 4.88% (L + 3.50%)
 
8/28/2024
 
1,671

 
1,667

 
1,686

University Support Services LLC (St. George's University Scholastic Services LLC)
 
Education
 
 5.82% (L + 4.25%)
 
7/6/2022
 
1,875

 
1,875

 
1,900

Vencore, Inc. (fka SI Organization, Inc., The)
 
Federal Services
 
 6.44% (L + 4.75%)
 
11/23/2019
 
10,686

 
10,673

 
10,835

WP CityMD Bidco LLC
 
Healthcare Services
 
 5.69% (L + 4.00%)
 
6/7/2024
 
14,963

 
14,928

 
15,009

YI, LLC
 
Healthcare Services
 
 5.69% (L + 4.00%)
 
11/7/2024
 
8,240

 
8,204

 
8,230

Zywave, Inc.
 
Software
 
 6.61% (L + 5.00%)
 
11/17/2022
 
17,325

 
17,252

 
17,325

Total Funded Investments
 
 
 
 
 
 
 
$
381,237

 
$
379,098

 
$
382,529

Unfunded Investments - First lien
 
 
 
 
 
 
 
 
 
 
 
 
Pathway Partners Vet Management Company LLC
 
Consumer Services
 
—
 
10/10/2019
 
$
2,728

 
$
(14
)
 
$
7

TMK Hawk Parent, Corp.
 
Distribution & Logistics
 
—
 
3/28/2018
 
75

 
—

 
1

YI, LLC
 
Healthcare Services
 
—
 
11/7/2018
 
2,060

 
(9
)
 
(3
)
Total Unfunded Investments
 
 
 
 
 
 
 
$
4,863

 
$
(23
)
 
$
5

Total Investments
 
 
 
 
 
 
 
$
386,100

 
$
379,075

 
$
382,534

 
(1)
All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L), the Prime Rate (P) and the alternative base rate (Base). For each investment, the current interest rate provided reflects the rate in effect as of December 31, 2017.
(2)
Represents the fair value in accordance with ASC 820. The Company's board of directors does not determine the fair value of the investments held by SLP II.


46
Table of Contents

    
Below is certain summarized financial information for SLP II as of June 30, 2018 and December 31, 2017 and for the three and six months ended June 30, 2018 and June 30, 2017:
Selected Balance Sheet Information:
June 30, 2018
 
December 31, 2017
Investments at fair value (cost of $365,741 and $379,075, respectively)
$
368,920

 
$
382,534

Cash and other assets
7,581

 
8,065

Total assets
$
376,501

 
$
390,599

 
 
 
 
Credit facility
$
267,870

 
$
266,270

Deferred financing costs
(1,678
)
 
(1,966
)
Payable for unsettled securities purchased
—

 
15,964

Distribution payable
3,960

 
3,500

Other liabilities
2,838