New Mountain Finance Corporation is a Business Development Company specializing in investments in middle market companies and debt securities at various levels of the capital structure, including first and second lien debt, unsecured notes, bonds, and mezzanine securities. It invests in various industries that include software, education, business services, distribution and logistics, federal services, healthcare services and products, healthcare facilities, energy, media, consumer and industrial services, healthcare Information Technology, Information Technology and services, specialty chemicals and materials, telecommunication, retail, and power generation. It seeks to invest in United States. It typically invests between $10 million and $50 million. Within middle market it seeks to invest in companies having EBITDA between $20 million and $200 million. It prefers to invest in equity interests, such as preferred stock, common stock, warrants, or options received in connection with its debt investments and directly in the equity of private companies. The fund makes investments through both primary originations and open-market secondary purchases. It invests primarily in debt securities that are rated below investment grade and have contractual unlevered returns of 10% to 15%. The firm may also invest in distressed debt and related opportunities and prefers to invest in targets having private equity sponsorship. It seeks to hold its investments between five years and ten years. The fund prefer to have majority stake in companies.
New Mountain Finance Corporation (the “Company”) (NMFC) announced today that it has commenced an underwritten offering of 8,000,000 shares of its common stock. Certain of the Company’s officers and interested directors have submitted a non-binding indication of interest to purchase an aggregate 400,000 shares in this offering at the public offering price. In connection with the proposed offering, the Company intends to grant the underwriters for the offering an option to purchase up to an additional 1,200,000 shares of the Company’s common stock. The Company intends to use the net proceeds from the offering primarily for new investments in portfolio companies in accordance with its investment objective and strategies. The Company may also use a portion of such net proceeds for other general corporate purposes, including to temporarily repay indebtedness (which will be subject to re-borrowing), and other working capital needs. https://finance.yahoo.com/news/mountain-finance-corporation-commences-offering-200800293.html
The market expects New Mountain Finance (NMFC) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2019. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on November 6, 2019, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. https://finance.yahoo.com/news/mountain-finance-nmfc-earnings-expected-143302969.html
New Mountain Finance Corporation Issues Letter to Stakeholders Dear Fellow Stakeholders: As the COVID-19 pandemic continues and as we now have finished our first quarter end during this crisis, we are writing to keep you informed about New Mountain Finance Corporation (“NMFC”, the “Company”, “we”, “us”, or “our”) and its progress. Before we do, we want to begin by recognizing the human toll of the COVID-19 crisis and want to wish good health and safety to all of you and your families. We sincerely hope you stay well throughout this dangerous time. Turning to business, New Mountain has long sought to emphasize "defensive growth" industries in both its private equity and credit efforts. As a result, NMFC has had an annualized realized default rate from the time of our 2011 IPO until now of under 50 basis points, while paying over $700 million of cash dividends, equivalent to $12.33 per share. We, as the managers of NMFC, are the company’s largest shareholder and own approximately 12% of NMFC's stock personally and have continued to add shares during open window periods when allowable. Our objective is to continue to manage NMFC safely through the crisis, and to resume our normal operations as the crisis ends. It is too soon for us to formally report on the quarter ended March 31, 2020, but we believe we can now make the following observations: Portfolio: Every one of NMFC's borrowers paid interest for the first quarter of 2020, except for two. One, representing under 1% of total assets, has paid 50% of its cash interest and has agreed to pay the balance within days. The second, which we still hope may pay interest soon, accounts for just over 1% of our total assets. We estimate that approximately 1% of our total portfolio, in aggregate, is in the areas of restaurants, gyms, hospitality, leisure, commercial aviation, automotive manufacturing, home building and discretionary consumer products. Less than 2% of our assets are in companies that are exposed to oil and gas. Our largest area of lending has been to software companies, which typically have large installed bases of repeat users, and with on average about 50% of the capital structure junior to our loans at the time our loan was made. Our most impacted loans – about 11% of assets – are in the dental practice, dermatology and eye care industries, which we expect will be necessary services again when the pandemic is contained. New Mountain has extensive ownership experience in the dental practice and optical supply industries through its private equity efforts. Our portfolio is well diversified overall; as of December 31, 2019, our largest individual position was 2.7% in fair value and our top 15 positions accounted for 31.7% of fair value. Over 66% of our portfolio is in the senior securities of the borrower, rather than in the second lien, preferred equity or common equity. Valuation and Leverage: While we are in the early stages of determining our March 31st investment values, based on observable 3/31 marks, comparable 3/31 yields, third party draft valuations and the current condition of our portfolio articulated above, we expect to be well within our statutory leverage requirements. As always, our board of directors, including independent board members, will have the final approval of the fair value of our portfolio. We currently have approximately $1,028 million outstanding under our three secured credit facilities, $655 million outstanding under various unsecured notes, and $300 million under the SBA program. Note: SBA-guaranteed debentures are not included in the calculation of statutory leverage under the Investment Company Act of 1940. We have an active and constructive dialogue with our lenders, with whom we have deep and longstanding institutional relationships. Liquidity: Based on currently known funding requirements and fund inflows, we expect to have approximately $150 million of cash and immediately available other liquidity during the current quarter to handle incremental needs from borrowers or lenders. We are monitoring the potential needs of our portfolio companies and any impacts on our secured credit facility borrowing bases on a daily basis. We have approximately $50 million of undrawn revolver commitments across more than 30 borrowers. We went into this crisis with approximately $75 million undrawn so we have seen a draw rate of approximately 30%. Based on conversations with the borrowers, we would currently expect some portion, but not the majority, of the remaining $50 million to be drawn in the weeks ahead. We have approximately $100 million of undrawn delayed draw term loan exposure outstanding across more than 15 borrowers. We have seen limited draws on these facilities in recent weeks as the significant majority of this exposure can only be drawn for certain defined purposes (typically to fund acquisitions) which have been limited in the current environment. Our loan assets generate over $60 million of cash interest income per quarter while our borrowings require modestly over $20 million quarterly to service, so we generate approximately $40 million of cash net interest margin per quarter (before the impact of any potential future borrower payment defaults). http://ir.newmountainfinance.com/File/Index?KeyFile=403540877
New Mountain Finance (NMFC) Q1 Earnings Beat Estimates New Mountain Finance (NMFC) came out with quarterly earnings of $0.34 per share, beating the Zacks Consensus Estimate of $0.33 per share. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 3.03%. A quarter ago, it was expected that this business development company would post earnings of $0.35 per share when it actually produced earnings of $0.32, delivering a surprise of -8.57%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. New Mountain, which belongs to the Zacks Financial - SBIC & Commercial Industry industry, posted revenues of $74.08 million for the quarter ended March 2020, missing the Zacks Consensus Estimate by 4.67%. This compares to year-ago revenues of $64.19 million. The company has topped consensus revenue estimates two times over the last four quarters. https://finance.yahoo.com/news/mountain-finance-nmfc-q1-earnings-225510877.html
