New Mountain Finance Corporation (NYSE:NMFC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On November19, 2018, New Mountain Finance Corporation (the “Company”) entered into the Second Amendment to Loan and Security Agreement (the “Second Amendment”), which amended the Third Amended and Restated Loan and Security Agreement, as amended by the First Amendment thereto, dated as of March30, 2018 and effective as of April1, 2018 (together with the exhibits and schedules thereto, the “Holdings Credit Facility”), by and among the Company, as the collateral manager, New Mountain Finance Holdings, L.L.C., as the borrower (the “Borrower”), Wells Fargo Bank, National Association (“Wells Fargo Bank”), as the administrative agent (the “Administrative Agent”), the lenders party thereto (the “Lenders”), and Wells Fargo Bank, as collateral custodian.
The Second Amendment increased the maximum facility amount from $495,000,000 to $695,000,000. The facility amount is the lesser of such amount and the actual commitments of the Lenders to make advances as of such date (the “Commitments”). On the date of the Second Amendment, certain Lenders increased their Commitments such that, as of the date of the Second Amendment, the aggregate Commitments of the Lenders equals $575,000,000. The Second Amendment makes certain technical changes to facilitate further increases in the Commitments should any new or existing Lender and the Borrower mutually agree to do so. In addition, certain eligibility criteria and concentration limits for loans acquired by the Borrower, to the extent based upon a dollar limit, and the required minimum equity amount with respect to the Company’s investment in the Borrower, were modified based upon a grid, attached as Annex C to the Second Amendment, that expands the size of the applicable basket or requirement (as the case may be) as Commitments under the Holdings Credit Facility are increased. If for any reason the Commitments are reduced below $570,000,000, the amount of the applicable basket or requirement will be agreed to by the Borrower, the Administrative Agent and the Required Lenders at such time.
The following summarizes additional changes made to the Second Amendment. The concentration limit for non-first lien loans was lowered from 50% to 35%. The minimum asset coverage ratio for the Company and its consolidated subsidiaries was changed from 2:1 to 1.5:1, and the cure level was changed to 1.75:1. The default basket for tax liens and other governmental liens was changed from $50,000 to $250,000. The Second Amendment also makes certain changes requested by the Administrative Agent or certain Lenders, namely, (i)changes to address the implementation of two new accounting standards,IFRS 15/ASC 606 (revenue recognition) and IFRS 16/ASC 842 (leases), (ii)a change that expands the definition of “Person” to include certain additional types of entities, (iii)a restriction on the Borrower dividing itself to the Limited Liability Company Act of the State of Delaware and (iv)changes that modify or add provisions relating to compliance with regulations relating to anti-money laundering, sanctions, anti-corruption, “know-your-customer” and similar laws, which changes are currently customarily required by banking institutions in new or amended credit facilities. No other terms of the Holdings Credit Facility were modified to the Second Amendment.
The Holdings Credit Facility continues to have a revolving period ending on October24, 2020 and will still mature on October24, 2022.
The lender group under the Holdings Credit Facility, includes Wells Fargo Bank, Raymond James Bank, N.A., State Street Bank and Trust Company, NBH Bank, CIT Bank, N.A., and State Bank and Trust Company.
The description above is qualified in its entirety by reference to the copy of the Third Amended and Restated Loan and Security Agreement, conformed through Amendment No. 2, which is filed as Exhibit10.1 to this current report on Form8-K and is incorporated herein by reference thereto.
