UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarter Ended September 30, 2020

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

NMFC

The NASDAQ Global Select Market

5.75% Notes due 2023

NMFCL

The NASDAQ Global Select Market

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 every Interactive Data File required to be submitted 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 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, a 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

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 November 4, 2020
Common stock, par value $0.01 per share						96,827,342

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Table of Contents

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2020

TABLE OF CONTENTS

						PAGE
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements
			New Mountain Finance Corporation
			Consolidated Statements of Assets and Liabilities as of September 30, 2020 (unaudited) and December 31, 2019 (unaudited)			3
			Consolidated Statements of Operations for the three and nine months ended September 30, 2020 (unaudited) and September 30, 2019 (unaudited)			4
			Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2020 (unaudited) and September 30, 2019 (unaudited)			5
			Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 (unaudited) and September 30, 2019 (unaudited)			6
			Consolidated Schedule of Investments as of September 30, 2020 (unaudited)			7
			Consolidated Schedule of Investments as of December 31, 2019			28
			Notes to the Consolidated Financial Statements of New Mountain Finance Corporation (unaudited)			48
			Report of Independent Registered Public Accounting Firm			90
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			91
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			126
Item 4.			Controls and Procedures			127
PART II. OTHER INFORMATION						128
Item 1.			Legal Proceedings			128
Item 1A.			Risk Factors			128
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			133
Item 3.			Defaults Upon Senior Securities			133
Item 4.			Mine Safety Disclosures			133
Item 5.			Other Information			133
Item 6.			Exhibits			134
			Signatures			135

2

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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

New Mountain Finance Corporation

 

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data)

(unaudited)

			September 30, 2020						December 31, 2019
Assets
Investments at fair value
Non-controlled/non-affiliated investments (cost of $2,298,918 and $2,619,408, respectively)			$	2,247,848					$	2,613,801
Non-controlled/affiliated investments (cost of $79,785 and $82,825, respectively)			55,769						73,527
Controlled investments (cost of $599,584 and $449,308, respectively)			593,006						472,952
Total investments at fair value (cost of $2,978,287 and $3,151,541, respectively)			2,896,623						3,160,280
Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)			21,422						21,422
Cash and cash equivalents			68,664						48,574
Interest and dividend receivable			33,568						31,800
Receivable from unsettled securities sold			4,490						—
Receivable from affiliates			513						277
Other assets			7,211						3,702
Total assets			$	3,032,491					$	3,266,055
Liabilities
Borrowings
Holdings Credit Facility			$	459,163					$	661,563
Unsecured Notes			453,250						453,250
SBA-guaranteed debentures			300,000						225,000
DB Credit Facility			242,000						230,000
Convertible Notes			201,545						201,623
NMFC Credit Facility			150,500						188,500
Deferred financing costs (net of accumulated amortization of $31,939 and $28,390, respectively)			(18,222)						(17,640)
Net borrowings			1,788,236						1,942,296
Payable for unsettled securities purchased			—						1,780
Management fee payable			19,988						10,298
Incentive fee payable			13,531						7,646
Interest payable			10,141						16,484
Payable to affiliates			1,163						673
Deferred tax liability			134						912
Other liabilities			2,138						2,498
Total liabilities			1,835,331						1,982,587
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, 200,000,000 shares authorized, and 96,827,342 and 96,827,342 shares issued and outstanding, respectively			968						968
Paid in capital in excess of par			1,287,853						1,287,853
Accumulated overdistributed earnings			(104,057)						(5,353)
Total net assets of New Mountain Finance Corporation			1,184,764						1,283,468
Non-controlling interest in New Mountain Net Lease Corporation			12,396						—
Total net assets			$	1,197,160					$	1,283,468
Total liabilities and net assets			$	3,032,491					$	3,266,055
Number of shares outstanding			96,827,342						96,827,342
Net asset value per share of New Mountain Finance Corporation			$	12.24					$	13.26

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

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New Mountain Finance Corporation

 

Consolidated Statements of Operations

(in thousands, except shares and per share data)

(unaudited)

			Three Months Ended												Nine Months Ended
			September 30, 2020						September 30, 2019						September 30, 2020						September 30, 2019
Investment income
From non-controlled/non-affiliated investments:
Interest income (excluding Payment-in-kind ("PIK") interest income)			$	41,854					$	50,096					$	144,383					$	140,602
PIK interest income			2,547						1,356						6,464						3,325
Non-cash dividend income			2,274						2,239						6,898						6,282
Other income			1,497						3,599						4,085						7,694
From non-controlled/affiliated investments:
Interest income (excluding PIK interest income)			781						659						1,963						1,979
PIK interest income			217						392						(1,131)						1,109
Dividend income			687						788						2,096						2,326
Non-cash dividend income			—						309						(3,418)						901
Other income			427						342						1,002						934
From controlled investments:
Interest income (excluding PIK interest income)			2,011						720						4,581						2,323
PIK interest income			2,244						1,997						6,393						5,441
Dividend income			8,107						7,661						24,061						23,383
Non-cash dividend income			1,576						2,273						5,716						6,446
Other income			1,299						163						2,479						505
Total investment income			65,521						72,594						205,572						203,250
Expenses
Incentive fee			7,135						7,792						21,857						21,642
Management fee			12,877						12,687						39,869						35,302
Interest and other financing expenses			18,077						21,830						59,500						61,695
Administrative expenses			1,024						930						3,303						3,074
Professional fees			731						834						2,605						2,486
Other general and administrative expenses			442						492						1,383						1,302
Total expenses			40,286						44,565						128,517						125,501
Less: management and incentive fees waived (See Note 5)			(3,341)						(3,141)						(10,067)						(8,497)
Less: expenses waived and reimbursed (See Note 5)			(589)						—						(924)						(335)
Net expenses			36,356						41,424						117,526						116,669
Net investment income before income taxes			29,165						31,170						88,046						86,581
Income tax expense			123						—						116						13
Net investment income			29,042						31,170						87,930						86,568
Net realized gains (losses):
Non-controlled/non-affiliated investments			30						349						(4,431)						439
Non-controlled/affiliated investments			12						—						12						—
Controlled investments			5						6						12						14
New Mountain Net Lease Corporation			—						—						812						—
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments			21,410						(8,334)						(67,407)						4,106
Non-controlled/affiliated investments			(1,111)						(143)						(14,718)						(2,671)
Controlled investments			39,943						1,453						(8,278)						3,870
Securities purchased under collateralized agreements to resell			—						(1,332)						—						(1,332)
New Mountain Net Lease Corporation			—						—						(812)						—
Benefit for taxes			257						281						778						121
Net realized and unrealized gains (losses)			60,546						(7,720)						(94,032)						4,547
Net increase (decrease) in net assets resulting from operations			89,588						23,450						(6,102)						91,115
Less: Net increase in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation			(1,398)						—						(1,584)						—
Net increase (decrease) in net assets resulting from operations related to New Mountain Finance Corporation			$	88,190					$	23,450					$	(7,686)					$	91,115
Basic earnings (loss) per share			$	0.91					$	0.27					$	(0.08)					$	1.11
Weighted average shares of common stock outstanding - basic (See Note 11)			96,827,342						86,987,841						96,827,342						82,020,549
Diluted earnings (loss) per share			$	0.82					$	0.26					$	(0.08)					$	1.01
Weighted average shares of common stock outstanding - diluted (See Note 11)			110,084,927						100,245,426						110,084,927						97,948,225
Distributions declared and paid per share			$	0.30					$	0.34					$	0.94					$	1.02

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

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New Mountain Finance Corporation

 

Consolidated Statements of Changes in Net Assets

(in thousands, except shares and per share data)

(unaudited)

			Three Months Ended												Nine Months Ended
			September 30, 2020						September 30, 2019						September 30, 2020						September 30, 2019
Increase (decrease) in net assets resulting from operations:
Net investment income			$	29,042					$	31,170					$	87,930					$	86,568
Net realized gains (losses) on investments and New Mountain Net Lease Corporation			47						355						(3,595)						453
Net change in unrealized appreciation (depreciation) of investments and New Mountain Net Lease Corporation			60,242						(7,024)						(91,215)						5,305
Net change in unrealized depreciation of securities purchased under collateralized agreements to resell			—						(1,332)						—						(1,332)
Benefit for taxes			257						281						778						121
Net increase (decrease) in net assets resulting from operations			89,588						23,450						(6,102)						91,115
Less: Net increase in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation			(1,398)						—						(1,584)						—
Net increase (decrease) in net assets resulting from operations related to New Mountain Finance Corporation			88,190						23,450						(7,686)						91,115
Capital transactions
Net proceeds from shares sold			—						94,185						—						153,482
Deferred offering costs			—						(315)						—						(544)
Distributions declared to stockholders from net investment income			(29,049)						(29,753)						(91,018)						(84,472)
Reinvestment of distributions			—						795						—						3,429
Total net (decrease) increase in net assets resulting from capital transactions			(29,049)						64,912						(91,018)						71,895
Net increase (decrease) in net assets			59,141						88,362						(98,704)						163,010
New Mountain Finance Corporation net assets at the beginning of the period			1,125,623						1,080,917						1,283,468						1,006,269
New Mountain Finance Corporation net assets at the end of the period			1,184,764						1,169,279						1,184,764						1,169,279
Non-controlling interest in New Mountain Net Lease Corporation			12,396						—						12,396						—
Net assets at the end of the period			$	1,197,160					$	1,169,279					$	1,197,160					$	1,169,279
Capital share activity
Shares sold			—						6,900,000						—						11,212,500
Shares issued from the reinvestment of distributions			—						58,393						—						249,823
Net increase in shares outstanding			—						6,958,393						—						11,462,323

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

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New Mountain Finance Corporation

 

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

			Nine Months Ended
			September 30, 2020						September 30, 2019
Cash flows from operating activities
Net (decrease) increase in net assets resulting from operations			$	(6,102)					$	91,115
Adjustments to reconcile net decrease (increase) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized losses (gains) on investments and New Mountain Net Lease Corporation			3,595						(453)
Net change in unrealized depreciation (appreciation) of investments and New Mountain Net Lease Corporation			91,215						(5,305)
Net change in unrealized depreciation of securities purchased under collateralized agreements to resell			—						1,332
Amortization of purchase discount			(7,942)						(3,684)
Amortization of deferred financing costs			3,549						4,699
Amortization of premium on Convertible Notes			(78)						(83)
Non-cash investment income			(22,016)						(22,075)
(Increase) decrease in operating assets:
Proceeds from sale of non-controlling interest in New Mountain Net Lease Corporation			11,315						—
Purchase of investments and delayed draw facilities			(259,127)						(827,462)
Proceeds from sales and paydowns of investments			480,333						207,785
Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities			296						195
Cash paid for purchase of drawn portion of revolving credit facilities			(13,996)						(338)
Cash paid on drawn revolvers			(43,952)						(18,574)
Cash repayments on drawn revolvers			35,251						13,684
Interest and dividend receivable			(1,768)						(7,249)
Receivable from unsettled securities sold			(4,490)						—
Receivable from affiliates			(236)						(298)
Other assets			(3,290)						(1,054)
Increase (decrease) in operating liabilities:
Management fee payable			9,690						9,971
Incentive fee payable			5,885						7,915
Payable for unsettled securities purchased			(1,780)						79,520
Payable to affiliates			490						189
Interest payable			(6,343)						(425)
Deferred tax liability			(778)						(121)
Other liabilities			400						(2,885)
Distributions related to non-controlling interest in New Mountain Net Lease Corporation			(503)						—
Net cash flows provided by (used in) operating activities			269,618						(473,601)
Cash flows from financing activities
Net proceeds from shares sold			—						153,482
Distributions paid			(91,018)						(81,043)
Offering costs paid			(203)						(606)
Proceeds from Holdings Credit Facility			16,000						222,500
Repayment of Holdings Credit Facility			(218,400)						(97,500)
Proceeds from Convertible Notes			—						86,681
Repayment of Convertible Notes			—						(155,250)
Proceeds from Unsecured Notes			—						116,500
Proceeds from SBA-guaranteed debentures			75,000						19,000
Proceeds from NMFC Credit Facility			97,000						268,500
Repayment of NMFC Credit Facility			(135,000)						(190,000)
Proceeds from DB Credit Facility			67,000						232,000
Repayment of DB Credit Facility			(55,000)						(87,000)
Proceeds from NMNLC Credit Facility			—						10,600
Deferred financing costs paid			(4,907)						(4,112)
Net cash flows (used in) provided by financing activities			(249,528)						493,752
Net increase in cash and cash equivalents			20,090						20,151
Cash and cash equivalents at the beginning of the period			48,574						49,664
Cash and cash equivalents at the end of the period			$	68,664					$	69,815
Supplemental disclosure of cash flow information
Cash interest paid			$	60,940					$	58,037
Income taxes paid			129						10
Non-cash financing activities:
Value of shares reissued from repurchase program in connection with the distribution reinvestment plan			$	—					$	3,429
Accrual for offering costs			80						49
Accrual for deferred financing costs			11						19

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

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New Mountain Finance Corporation

 

Consolidated Schedule of Investments

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						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 Health Services ULC (fka Dentalcorp Perfect Smile ULC)**
Healthcare Services						Second lien (3)(10)						8.50% (L + 7.50%/M)						6/1/2018						6/8/2026						$	28,613					$	28,410					$	26,810
						Second lien (8)(10)						8.50% (L + 7.50%/M)						6/1/2018						6/8/2026						7,500						7,450						7,027
																														36,113						35,860						33,837						2.83		%
Wolfpack IP Co.**
Software						First lien (2)(10)						7.00% (L + 6.00%/S)						6/14/2019						6/13/2025						9,091						9,016						9,091						0.76		%
Total Funded Debt Investments - Canada																														$	45,204					$	44,876					$	42,928					3.59		%
Funded Debt Investments - United Arab Emirates
GEMS Menasa (Cayman) Limited**
Education						First lien (8)						6.00% (L + 5.00%/S)						7/30/2019						7/31/2026						$	22,451					$	22,353					$	21,806					1.82		%
Total Funded Debt Investments - United Arab Emirates																														$	22,451					$	22,353					$	21,806					1.82		%
Funded Debt Investments - United Kingdom
Shine Acquisition Co. S.à.r.l / Boing US Holdco Inc.**
Consumer Services						Second lien (2)(10)						8.50% (L + 7.50%/M)						9/25/2017						10/3/2025						$	37,853					$	37,690					$	37,853
						Second lien (8)(10)						8.50% (L + 7.50%/M)						9/25/2017						10/3/2025						6,000						5,974						6,000
																														43,853						43,664						43,853						3.66		%
Aston FinCo S.a r.l. / Aston US Finco, LLC**
Software						Second lien (8)(10)						8.40% (L + 8.25%/M)						10/8/2019						10/8/2027						34,459						34,206						34,201						2.86		%
Total Funded Debt Investments - United Kingdom																														$	78,312					$	77,870					$	78,054					6.52		%
Funded Debt Investments - United States
GS Acquisitionco, Inc.
Software						First lien (2)(10)						6.75% (L + 5.75%/S)						8/7/2019						5/24/2024						$	26,707					$	26,575					$	26,707
						First lien (2)(10)						6.75% (L + 5.75%/S)						8/7/2019						5/24/2024						26,016						25,875						26,016
						First lien (5)(10)						6.75% (L + 5.75%/S)						8/7/2019						5/24/2024						22,250						22,140						22,250
						First lien (3)(10)						6.75% (L + 5.75%/S)						8/7/2019						5/24/2024						12,681						12,605						12,681
						First lien (3)(10)(11) - Drawn						6.75% (L + 5.75%/S)						8/7/2019						5/24/2024						3,839						3,815						3,839
																														91,493						91,010						91,493						7.64		%
PhyNet Dermatology LLC
Healthcare Services						First lien (2)(10)						6.50% (L + 5.50%/M)						9/17/2018						8/16/2024						49,985						49,636						48,685
						First lien (3)(10)						6.50% (L + 5.50%/M)						9/17/2018						8/16/2024						27,927						27,678						27,201
																														77,912						77,314						75,886						6.34		%

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

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New Mountain Finance Corporation

 

Consolidated Schedule of Investments (Continued)

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						Acquisition Date						Maturity / Expiration Date						Principal Amount, Par Value or Shares						Cost						Fair Value						Percent of Net Assets
Associations, Inc.
Business Services						First lien (2)(10)						8.00% (L + 4.00% + 3.00% PIK/Q)*						7/30/2018						7/30/2024						$	45,582					$	45,390					$	45,581
						First lien (8)(10)						8.00% (L + 4.00% + 3.00% PIK/Q)*						7/30/2018						7/30/2024						5,232						5,211						5,232
						First lien (2)(10)(11) - Drawn						8.34% (L + 4.00% + 3.00% PIK/Q)*						7/30/2018						7/30/2024						10,360						10,310						10,360
						First lien (2)(10)(11) - Drawn						7.00% (L + 6.00%/Q)						7/30/2018						7/30/2024						2,033						2,020						2,033
																														63,207						62,931						63,206						5.28		%
ConnectWise, LLC
Software						First lien (2)(10)						7.00% (L + 6.00%/Q)						11/26/2019						2/28/2025						55,193						54,896						54,851						4.58		%
CentralSquare Technologies, LLC
Software						Second lien (3)(10)						7.65% (L + 7.50%/M)						8/15/2018						8/31/2026						47,838						47,345						45,049
						Second lien (8)(10)						7.65% (L + 7.50%/M)						8/15/2018						8/31/2026						7,500						7,423						7,063
																														55,338						54,768						52,112						4.35		%
iCIMS, Inc.
Software						First lien (8)(10)						7.50% (L + 6.50%/S)						9/12/2018						9/12/2024						41,636						41,323						41,656
						First lien (8)(10)						7.50% (L + 6.50%/S)						6/14/2019						9/12/2024						8,667						8,598						8,671
																														50,303						49,921						50,327						4.21		%
Salient CRGT Inc.
Federal Services						First lien (2)(10)						7.50% (L + 6.50%/S)						1/6/2015						2/28/2022						37,909						37,739						37,366
						First lien (8)(10)						7.50% (L + 6.50%/S)						6/6/2019						2/28/2022						12,954						12,666						12,769
																														50,863						50,405						50,135						4.19		%
DCA Investment Holding, LLC
Healthcare Services						First lien (8)(10)						6.29% (L + 5.25%/S)						4/16/2019						7/2/2021						20,367						20,257						19,164
						First lien (2)(10)						6.25% (L + 5.25%/S)						7/2/2015						7/2/2021						16,961						16,936						15,958
						First lien (8)(10)						6.25% (L + 5.25%/S)						12/20/2017						7/2/2021						8,823						8,795						8,302
						First lien (2)(10)						6.25% (L + 5.25%/S)						12/20/2017						7/2/2021						4,152						4,142						3,907
						First lien (3)(10)(11) - Drawn						6.25% (L + 5.25%/S)						7/2/2015						7/2/2021						2,056						2,036						1,935
																														52,359						52,166						49,266						4.12		%
Frontline Technologies Group Holdings, LLC
Software						First lien (4)(10)						6.75% (L + 5.75%/Q)						9/18/2017						9/18/2023						21,995						21,905						21,995
						First lien (2)(10)						6.75% (L + 5.75%/Q)						9/18/2017						9/18/2023						18,537						18,490						18,537
						First lien (2)(10)						6.75% (L + 5.75%/Q)						9/18/2017						9/18/2023						7,652						7,610						7,652
																														48,184						48,005						48,184						4.03		%

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

8

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Table of Contents

New Mountain Finance Corporation

 

Consolidated Schedule of Investments (Continued)

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						Acquisition Date						Maturity / Expiration Date						Principal Amount, Par Value or Shares						Cost						Fair Value						Percent of Net Assets
NM GRC Holdco, LLC
Business Services						First lien (2)(10)						8.50% (L + 6.00% + 1.50% PIK/Q)*						2/9/2018						2/9/2024						$	38,318					$	38,201					$	35,751
						First lien (2)(10)						8.50% (L + 6.00% + 1.50% PIK/Q)*						2/9/2018						2/9/2024						10,650						10,615						9,937
																														48,968						48,816						45,688						3.82		%
Brave Parent Holdings, Inc.
Software						Second lien (5)(10)						7.65% (L + 7.50%/M)						4/17/2018						4/17/2026						22,500						22,413						22,397
						Second lien (2)(10)						7.65% (L + 7.50%/M)						4/17/2018						4/17/2026						16,624						16,493						16,547
						Second lien (8)(10)						7.65% (L + 7.50%/M)						4/17/2018						4/17/2026						6,000						5,953						5,972
																														45,124						44,859						44,916						3.75		%
Integro Parent Inc.
Business Services						First lien (2)(10)						6.75% (L + 5.75%/M)						10/9/2015						10/31/2022						34,617						34,520						34,617
						Second lien (8)(10)						10.25% (L + 9.25%/M)						10/9/2015						10/30/2023						10,000						9,951						10,000
																														44,617						44,471						44,617						3.73		%
Quest Software US Holdings Inc.
Software						Second lien (2)(10)						8.51% (L + 8.25%/Q)						5/17/2018						5/18/2026						43,697						43,354						43,640						3.65		%
Tenawa Resource Holdings LLC (14)
Tenawa Resource Management LLC
Specialty Chemicals & Materials						First lien (3)(10)						10.50% (Base + 8.00%/Q)						5/12/2014						10/30/2024						38,700						38,656						38,700						3.23		%
CoolSys, Inc.
Industrial Services						First lien (5)						7.00% (L + 6.00%/Q)						11/20/2019						11/20/2026						22,331						22,230						22,387
						First lien (2)						7.00% (L + 6.00%/Q)						11/20/2019						11/20/2026						10,322						10,275						10,348
						First lien (3)						7.00% (L + 6.00%/Q)						11/20/2019						11/20/2026						4,184						4,163						4,194
																														36,837						36,668						36,929						3.09		%
Trader Interactive, LLC
Business Services						First lien (2)(10)						7.50% (L + 6.50%/S)						6/15/2017						6/17/2024						31,687						31,555						31,687
						First lien (8)(10)						7.50% (L + 6.50%/S)						6/15/2017						6/17/2024						4,911						4,891						4,911
																														36,598						36,446						36,598						3.06		%
Peraton Holding Corp. (fka MHVC Acquisition Corp.)
Federal Services						First lien (2)						6.25% (L + 5.25%/Q)						4/25/2017						4/29/2024						36,623						36,517						36,348						3.04		%
KAMC Holdings, Inc
Business Services						Second lien (2)(10)						8.26% (L + 8.00%/Q)						8/14/2019						8/13/2027						18,750						18,623						18,043
						Second lien (8)(10)						8.26% (L + 8.00%/Q)						8/14/2019						8/13/2027						18,750						18,623						18,043
																														37,500						37,246						36,086						3.01		%

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

9

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Table of Contents

New Mountain Finance Corporation

 

Consolidated Schedule of Investments (Continued)

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						Acquisition Date						Maturity / Expiration Date						Principal Amount, Par Value or Shares						Cost						Fair Value						Percent of Net Assets
Definitive Healthcare Holdings, LLC
Healthcare Information Technology						First lien (8)(10)						6.50% (L + 5.50%/M)						8/7/2019						7/16/2026						$	33,698					$	33,555					$	33,698
						First lien (3)(10)(11) - Drawn						6.50% (L + 5.50%/Q)						8/7/2019						7/16/2024						1,848						1,839						1,848
																														35,546						35,394						35,546						2.97		%
Affinity Dental Management, Inc.
Healthcare Services						First lien (2)(10)						10.25% (P + 7.00%/S)						9/15/2017						9/15/2023						26,290						26,246						23,364
						First lien (4)(10)						10.25% (P + 7.00%/S)						9/17/2019						9/15/2023						10,619						10,619						9,437
						First lien (3)(10)(11) - Drawn						10.25% (P + 7.00%/Q)						9/15/2017						3/15/2023						1,738						1,720						1,544
																														38,647						38,585						34,345						2.87		%
Finalsite Holdings, Inc.
Software						First lien (4)(10)						6.50% (L + 5.50%/Q)						9/28/2018						9/25/2024						22,050						21,932						22,050
						First lien (2)(10)						6.50% (L + 5.50%/Q)						9/28/2018						9/25/2024						10,891						10,833						10,891
																														32,941						32,765						32,941						2.75		%
TDG Group Holding Company
Consumer Services						First lien (2)(10)						5.44% (L + 5.25%/Q)						5/22/2018						5/31/2024						24,670						24,589						24,493
						First lien (8)(10)						5.44% (L + 5.25%/Q)						5/22/2018						5/31/2024						4,912						4,896						4,876
						First lien (2)(10)						5.44% (L + 5.25%/Q)						5/22/2018						5/31/2024						3,295						3,284						3,272
																														32,877						32,769						32,641						2.73		%
GC Waves Holdings, Inc.**
Business Services						First lien (5)(10)						6.75% (L + 5.75%/Q)						10/31/2019						10/31/2025						22,388						22,241						22,112
						First lien (2)(10)						6.75% (L + 5.75%/Q)						10/31/2019						10/31/2025						3,654						3,631						3,610
						First lien (3)(10)(11) - Drawn						6.75% (L + 5.75%/Q)						10/31/2019						10/31/2025						5,424						5,373						5,358
																														31,466						31,245						31,080						2.60		%
Integral Ad Science, Inc.
Software						First lien (8)(10)						8.25% (L + 6.00% + 1.25% PIK/S)*						7/19/2018						7/19/2024						27,099						26,904						27,302
						First lien (3)(10)						8.25% (L + 6.00% + 1.25% PIK/S)*						8/27/2019						7/19/2024						3,540						3,512						3,567
																														30,639						30,416						30,869						2.58		%
Kaseya Inc.
Software						First lien (8)(10)						8.09% (L + 4.00% + 3.00% PIK/S)*						5/9/2019						5/2/2025						28,011						27,789						28,291
						First lien (3)(10)(11) - Drawn						7.50% (L + 6.50%/S)						5/9/2019						5/2/2025						1,133						1,121						1,133
						First lien (3)(10)(11) - Drawn						8.06% (L + 4.00% + 3.00% PIK/S)*						5/9/2019						5/2/2025						636						630						642
																														29,780						29,540						30,066						2.51		%

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

10

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Table of Contents

New Mountain Finance Corporation

 

Consolidated Schedule of Investments (Continued)

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						Acquisition Date						Maturity / Expiration Date						Principal Amount, Par Value or Shares						Cost						Fair Value						Percent of Net Assets
Ansira Holdings, Inc.
Business Services						First lien (8)(10)						7.50% (L + 6.50% PIK/S)*						12/19/2016						12/20/2024						$	28,944					$	28,882					$	23,656
						First lien (3)(10)						7.50% (L + 6.50% PIK/S)*						12/19/2016						12/20/2024						7,311						7,298						5,975
																														36,255						36,180						29,631						2.48		%
MRI Software LLC
Software						First lien (5)(10)						6.50% (L + 5.50%/Q)						1/31/2020						2/10/2026						22,385						22,283						22,450
						First lien (3)(10)						6.50% (L + 5.50%/Q)						1/31/2020						2/10/2026						4,345						4,324						4,357
						First lien (2)(10)						6.50% (L + 5.50%/Q)						1/31/2020						2/10/2026						1,619						1,611						1,624
																														28,349						28,218						28,431						2.37		%
Keystone Acquisition Corp.
Healthcare Services						First lien (2)						6.25% (L + 5.25%/Q)						5/10/2017						5/1/2024						24,294						24,199						22,108
						Second lien (2)(10)						10.25% (L + 9.25%/Q)						5/10/2017						5/1/2025						4,500						4,470						4,495
																														28,794						28,669						26,603						2.22		%
HS Purchaser, LLC / Help/Systems Holdings, Inc.
Software						Second lien (5)						9.00% (L + 8.00%/Q)						11/14/2019						11/19/2027						22,500						22,388						22,275
						Second lien (2)						9.00% (L + 8.00%/Q)						11/14/2019						11/19/2027						4,208						4,169						4,166
																														26,708						26,557						26,441						2.21		%
Confluent Health, LLC
Healthcare Services						First lien (2)						5.15% (L + 5.00%/M)						6/21/2019						6/24/2026						27,156						27,040						26,138						2.18		%
Instructure, Inc. **
Software						First lien (8)(10)						8.00% (L + 7.00%/Q)						3/24/2020						3/24/2026						24,150						24,010						24,001						2.00		%
AAC Holding Corp.
Education						First lien (2)(10)						9.25% (L + 5.00% + 3.25% PIK/M)*						9/30/2015						9/30/2022						26,199						26,131						22,515						1.88		%
Astra Acquisition Corp.
Software						First lien (5)						6.50% (L + 5.50%/M)						2/26/2020						3/1/2027						22,388						22,230						22,499						1.88		%
Convey Health Solutions, Inc.
Healthcare Services						First lien (4)(10)						6.25% (L + 5.25%/Q)						9/9/2019						9/4/2026						22,275						22,056						22,275						1.86		%
Idera, Inc.
Software						Second lien (4)						10.00% (L + 9.00%/S)						6/27/2019						6/28/2027						22,500						22,349						22,162						1.85		%
Avatar Topco, Inc. (23)
EAB Global, Inc.
Education						Second lien (3)(10)						8.50% (L + 7.50%/Q)						11/17/2017						11/17/2025						13,950						13,799						13,950
						Second lien (8)(10)						8.50% (L + 7.50%/Q)						11/17/2017						11/17/2025						7,500						7,419						7,500
																														21,450						21,218						21,450						1.79		%
Spring Education Group, Inc (fka SSH Group Holdings, Inc.)
Education						Second lien (2)						8.47% (L + 8.25%/Q)						7/26/2018						7/30/2026						22,603						22,560						20,908						1.75		%
MED Parentco, LP
Healthcare Services						Second lien (8)(10)						8.40% (L + 8.25%/M)						8/2/2019						8/30/2027						20,857						20,714						20,501						1.71		%

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

11

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Table of Contents

New Mountain Finance Corporation

 

Consolidated Schedule of Investments (Continued)

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						Acquisition Date						Maturity / Expiration Date						Principal Amount, Par Value or Shares						Cost						Fair Value						Percent of Net Assets
Institutional Shareholder Services, Inc.
Business Services						Second lien (3)(10)						8.72% (L + 8.50%/Q)						3/5/2019						3/5/2027						$	20,372					$	20,109					$	20,372					1.70		%
YLG Holdings, Inc.
Business Services						First lien (5)(10)						7.25% (L + 6.25%/S)						11/1/2019						10/31/2025						18,275						18,195						18,351
						First lien (5)(10)(11) - Drawn						7.25% (L + 6.25%/S)						11/1/2019						10/31/2025						1,910						1,901						1,918
																														20,185						20,096						20,269						1.69		%
CRCI Longhorn Holdings, Inc.
Business Services						Second lien (3)						7.40% (L + 7.25%/M)						8/2/2018						8/10/2026						14,349						14,305						13,272
						Second lien (8)						7.40% (L + 7.25%/M)						8/2/2018						8/10/2026						7,500						7,477						6,938
																														21,849						21,782						20,210						1.69		%
TMK Hawk Parent, Corp.
Distribution & Logistics						First lien (2)						4.50% (L + 3.50%/M)						6/24/2019						8/28/2024						16,779						14,705						9,844
						First lien (8)						4.50% (L + 3.50%/M)						10/23/2019						8/28/2024						16,183						13,672						9,494
																														32,962						28,377						19,338						1.62		%
Xactly Corporation
Software						First lien (4)(10)						8.25% (L + 7.25%/S)						7/31/2017						7/29/2022						19,047						18,958						19,047						1.59		%
DiversiTech Holdings, Inc.
Distribution & Logistics						Second lien (2)						8.50% (L + 7.50%/Q)						5/18/2017						6/2/2025						12,000						11,920						11,610
						Second lien (8)						8.50% (L + 7.50%/Q)						5/18/2017						6/2/2025						7,500						7,450						7,256
																														19,500						19,370						18,866						1.58		%
Bluefin Holding, LLC
Software						Second lien (8)(10)						7.90% (L + 7.75%/M)						9/6/2019						9/6/2027						18,000						18,000						18,000						1.50		%
Bullhorn, Inc.
Software						First lien (2)(10)						6.75% (L + 5.75%/Q)						9/24/2019						9/30/2026						17,045						16,935						17,045
						First lien (3)(10)						6.75% (L + 5.75%/Q)						9/24/2019						9/30/2026						353						351						353
						First lien (3)(10)						6.75% (L + 5.75%/Q)						9/24/2019						9/30/2026						282						280						282
																														17,680						17,566						17,680						1.48		%
FR Arsenal Holdings II Corp.
Business Services						First lien (2)(10)						8.25% (L + 7.25%/S)						9/29/2016						9/8/2022						18,213						18,135						17,528						1.46		%
The Kleinfelder Group, Inc.
Business Services						First lien (4)(10)						5.75% (L + 4.75%/Q)						12/18/2018						11/29/2024						17,194						17,130						17,194						1.44		%
Kele Holdco, Inc.
Distribution & Logistics						First lien (5)(10)						7.00% (L + 6.00%/M)						2/20/2020						2/20/2026						16,152						16,077						16,394						1.37		%
Hill International, Inc.**
Business Services						First lien (2)(10)						6.75% (L + 5.75%/Q)						6/21/2017						6/21/2023						15,287						15,248						15,287						1.28		%

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

12

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Table of Contents

New Mountain Finance Corporation

 

Consolidated Schedule of Investments (Continued)

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						Acquisition Date						Maturity / Expiration Date						Principal Amount, Par Value or Shares						Cost						Fair Value						Percent of Net Assets
Symplr Software Intermediate Holdings, Inc. (24)
Symplr Software, Inc. (fka Caliper Software, Inc.)
Healthcare Information Technology						First lien (4)(10)						5.72% (L + 5.50%/Q)						11/30/2018						11/28/2025						$	14,738					$	14,651					$	14,738
						First lien (2)(10)						5.72% (L + 5.50%/Q)						11/30/2018						11/28/2025						481						478						481
																														15,219						15,129						15,219						1.27		%
Netsmart Inc. / Netsmart Technologies, Inc.
Healthcare Information Technology						Second lien (2)						9.75% (P + 6.50%/Q)						4/18/2016						10/19/2023						15,000						14,814						15,000						1.25		%
CFS Management, LLC
Healthcare Services						First lien (2)(10)						6.75% (L + 5.75%/S)						8/6/2019						7/1/2024						11,644						11,598						11,384
						First lien (3)(10)						6.75% (L + 5.75%/S)						8/6/2019						7/1/2024						3,468						3,451						3,391
																														15,112						15,049						14,775						1.23		%
Bleriot US Bidco Inc.
Federal Services						Second lien (2)						8.72% (L + 8.50%/Q)						10/24/2019						10/29/2027						15,000						14,862						14,588						1.22		%
BackOffice Associates Holdings, LLC
Business Services						First lien (2)(10)						13.50% (L + 9.50% + 3.00% PIK/Q)*						8/25/2017						8/25/2023						13,175						13,114						13,175
						First lien (3)(10)(11) - Drawn						13.50% (L + 9.50% + 3.00% PIK/Q)*						8/25/2017						8/25/2023						914						906						914
																														14,089						14,020						14,089						1.18		%
Coyote Buyer, LLC
Specialty Chemicals & Materials						First lien (5)(10)						7.00% (L + 6.00%/Q)						3/13/2020						2/6/2026						14,114						14,049						14,044						1.17		%
Ministry Brands, LLC
Software						First lien (2)(10)						5.00% (L + 4.00%/Q)						12/7/2016						12/2/2022						2,910						2,904						2,883
						Second lien (8)(10)						10.25% (L + 9.25%/S)						12/7/2016						6/2/2023						7,840						7,811						7,840
						Second lien (3)(10)						10.25% (L + 9.25%/S)						12/7/2016						6/2/2023						2,160						2,152						2,160
						First lien (3)(10)(11) - Drawn						6.00% (L + 5.00%/S)						12/7/2016						12/2/2022						575						572						570
																														13,485						13,439						13,453						1.12		%
Alegeus Technologies Holding Corp.
Healthcare Services						First lien (8)(10)						9.25% (L + 8.25%/Q)						9/5/2018						9/5/2024						13,444						13,395						13,290						1.11		%
Geo Parent Corporation
Business Services						First lien (2)(10)						5.40% (L + 5.25%/M)						12/13/2018						12/19/2025						12,967						12,916						12,967						1.08		%
PaySimple, Inc.
Software						First lien (2)						5.65% (L + 5.50%/M)						8/19/2019						8/23/2025						9,783						9,700						9,392
						First lien (2)						5.65% (L + 5.50%/M)						8/19/2019						8/23/2025						3,203						3,145						3,075
																														12,986						12,845						12,467						1.04		%
Transcendia Holdings, Inc.
Packaging						Second lien (8)(10)						9.00% (L + 8.00%/M)						6/28/2017						5/30/2025						14,500						14,365						12,231						1.02		%

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

13

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Table of Contents

New Mountain Finance Corporation

 

Consolidated Schedule of Investments (Continued)

September 30, 2020

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1)						Type of Investment						Interest Rate (12)						Acquisition Date						Maturity / Expiration Date						Principal Amount, Par Value or Shares						Cost						Fair Value						Percent of Net Assets
OEConnection LLC
Business Services						Second lien (2)(10)						8.40% (L + 8.25%/M)						9/25/2019						9/25/2027						$	12,044					$	11,934					$	11,863					0.99		%
CHA Holdings, Inc.
Business Services						Second lien (4)(10)						9.75% (L + 8.75%/Q)						4/3/2018						4/10/2026						7,012						6,957						7,012
						Second lien (3)(10)						9.75% (L + 8.75%/Q)						4/3/2018						4/10/2026						4,453						4,418						4,452
																														11,465						11,375						11,464						0.96		%
Alert Holding Company, Inc. (15)
Appriss Holdings, Inc.
Business Services						First lien (8)(10)						5.75% (L + 5.50%/M)						5/24/2019						5/29/2026						10,971						10,891						10,971
						First lien (3)(10)(11) - Drawn						5.65% (L + 5.50%/M)						5/24/2019						5/30/2025						460						455						460
																														11,431						11,346						11,431						0.95		%
Apptio, Inc.
Software						First lien (8)(10)						8.25% (L + 7.25%/S)						1/10/2019						1/10/2025						11,203						11,030						11,371						0.95		%
Castle Management Borrower LLC
Business Services						First lien (2)(10)						7.50% (L + 6.50% PIK/Q)*						5/31/2018						2/15/2024						13,731						13,689						11,109						0.93		%
Vectra Co.
Business Products						Second lien (8)(10)						7.40% (L + 7.25%/M)						2/23/2018						3/8/2026						10,788						10,758						10,672						0.89		%
Masergy Holdings, Inc.
Business Services						Second lien (2)(10)						8.50% (L + 7.50%/Q)						12/14/2016						12/16/2024						10,500						10,463						10,500						0.88		%
PPVA Black Elk (Equity) LLC
Business Services						Subordinated (3)(10)						—						5/3/2013						—						14,500						14,500						10,354						0.86		%
Quartz Holding Company
Software						Second lien (3)(10)						8.15% (L + 8.00%/M)						4/2/2019						4/2/2027						10,000						9,827						9,993						0.83		%
Stats Intermediate Holdings, LLC**
Business Services						First lien (2)						5.40% (L + 5.25%/M)						5/22/2019						7/10/2026						9,925						9,819						9,801						0.82		%
Teneo Holdings, LLC
Business Services						First lien (2)						6.25% (L + 5.25%/M)						7/15/2019						7/11/2025						9,900						9,736						9,578						0.80		%
VT Topco, Inc.