New Mountain Finance Corporation (NYSE:NMFC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
Unsecured Notes Offering
On July5, 2018, New Mountain Finance Corporation (the “Company”) entered into a third supplement (the “Supplement”) to its Amended and Restated Note Purchase Agreement dated September30, 2016 (the “Note Purchase Agreement”). to the Supplement, on July5, 2018, the Company issued to an institutional investor identified therein, in a private placement, $50,000,000 in aggregate principal amount of 5.36% Series2018B Senior Notes due June28, 2023 (the “Notes”) as an additional series of notes under the Note Purchase Agreement. Except as set forth in the Supplement, the Notes have the same terms as the $90,000,000 in aggregate principal amount of the 5.313% Senior Notes due May15, 2021, the $55,000,000 in aggregate principal amount of the 4.76% Series2017A Senior Notes due July15, 2022, and the $90,000,000 in aggregate principal amount of the 4.87% Series2018A Senior Notes due January30, 2023 (collectively, the “Prior Notes”) that the Company previously issued to the Note Purchase Agreement, and the first supplement and the second supplement thereto, respectively. The Supplement includes certain additional covenants and terms, including, without limitation, a requirement that the Company not exceed a debt-to-equity ratio of 1.65 to 1.00 at the time of incurring additional indebtedness and a requirement that the Company not exceed a secured debt ratio of 0.70 to 1.00 at any time.
The Notes will rank equal in priority with the Company’s other unsecured indebtedness, including the Prior Notes. Interest on the Notes will be payable semi-annually in arrears on January15 and July15 of each year, commencing January15, 2019. This interest rate is subject to increase in the event that: (i)subject to certain exceptions, the Notes or the Company cease to have an investment grade rating or (ii)the aggregate amount of the Company’s unsecured debt falls below $150,000,000. In each such event, the Company also has the option to offer to prepay the Notes at par, in which case the holders of the Notes who accept the offer would not receive the increased interest rate. In addition, the Company is obligated to offer to prepay the Notes at par if the Company’s investment adviser, New Mountain Finance Adviser BDC, L.L.C. (the “Investment Adviser”), or an affiliate thereof, ceases to be the Company’s investment adviser or if certain change in control events occur with respect to the Investment Adviser. The Note Purchase Agreement also contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company under the Investment Company Act of 1940, as amended, and a regulated investment company under the Subchapter M of the Internal Revenue Code of 1986, as amended, minimum stockholders’ equity, minimum asset coverage ratio, and prohibitions on certain fundamental changes at the Company or any subsidiary guarantor, as well as customary events of default with customary cure and notice, including, without limitation, nonpayment, misrepresentation in a material respect, breach of covenant, cross-default under other indebtedness of the Company or certain subsidiaries, certain judgments and orders, and certain events of bankruptcy.
The description above is only a summary of the material provisions of the Supplement and is qualified in its entirety by reference to the copy of the Supplement which is filed as Exhibit10.1 to this current report on Form8-K and is incorporated herein by reference thereto.
NMFC Credit Facility Amendment
On July5, 2018, the Company entered into Amendment No.4 (the “Amendment”) to the Company’s existing senior secured revolving credit facility provided by Goldman Sachs Bank USA, as the administrative agent, and the lenders party thereto, including Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., and Stifel Bank& Trust (the “NMFC Credit Facility”). The Amendment reduces the minimum asset coverage ratio that the Company must maintain at the time of any borrowing under the NMFC Credit Facility and as of each quarter end from 2.00 to 1 to 1.50 to 1. The Amendment also includes a requirement that the Company not exceed a debt-to-equity ratio of 1.65 to 1.00 at the time of incurring additional indebtedness and a requirement that the Company not exceed a secured debt ratio of 0.70 to 1.00 at any time.
Goldman, Sachs& Co., an affiliate of Goldman Sachs Bank USA, served as the Company’s placement agent in connection with the offering of the Notes. In addition, the lenders under the NMFC Credit Facility, and their respective affiliates, may from time to time receive customary fees and expenses in the performance of investment banking, financial advisory, or other services for the Company.
The description above is only a summary of the material provisions of the Amendment and is qualified in its entirety by reference to the copy of the Amendment which is filed as Exhibit10.2 to this current report on Form8-K and is incorporated herein by reference thereto
Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth above under Item 1.01 is incorporated by reference herein.
Item 1.01 Financial Statements and Exhibits
Third Supplement to Amended and Restated Note Purchase Agreement, dated July5, 2018, by and between New Mountain Finance Corporation and the purchaser party thereto.
Amendment No.4, dated as of July5, 2018, to the Senior Secured Revolving Credit Agreement dated June4, 2014, by and among New Mountain Finance Corporation, as borrower, Goldman Sachs Bank USA, as administrative agent, and the lenders party thereto.
New Mountain Finance Corp ExhibitEX-10.1 2 a18-17017_1ex10d1.htm EX-10.1 Exhibit 10.1 THIRD SUPPLEMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT NEW MOUNTAIN FINANCE CORPORATION Dated as of July 5,…To view the full exhibit click
About New Mountain Finance Corporation (NYSE:NMFC)
New Mountain Finance Corporation is a closed-end, non-diversified management investment company. 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. Its investments may also include equity interests, such as preferred stock, common stock, warrants or options received in connection with its debt investments, or may include a direct investment in the equity of private companies. It makes investments through both primary originations and open-market secondary purchases. Its portfolio includes investments in various sectors, such as software, business services, education, distribution and logistics, federal services, consumer services, healthcare services, media and healthcare products. New Mountain Finance Advisers BDC, L.L.C. is the investment advisor of the Company.
An ad to help with our costs