New Mountain Finance Corporation (NYSE:NMFC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
Unsecured Notes Offering
On April30, 2019, New Mountain Finance Corporation (the Company) entered into a fourth supplement (the Supplement) to its Amended and Restated Note Purchase Agreement dated September30, 2016 (the Note Purchase Agreement). to the Supplement, on April30, 2019, the Company issued to institutional investors identified therein, in a private placement, $116,500,000 in aggregate principal amount of 5.494% Series2019A Senior Notes due April30, 2024 (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, the $90,000,000 in aggregate principal amount of the 4.87% Series2018A Senior Notes due January30, 2023, and the $50,000,000 in aggregate principal amount of the 5.36% Series2018B Senior Notes due June28, 2023 (collectively, the Prior Notes) that the Company previously issued to the Note Purchase Agreement, the first supplement thereto, the second supplement thereto and the third 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, which covenants were also included in the third supplement to the Note Purchase Agreement relating to the 5.36% Series2018B Senior Notes due June28, 2023.
The Notes will rank equal in priority with the Companys other unsecured indebtedness, including the Prior Notes. Interest on the Notes will be payable semi-annually in arrears on April15 and October15 of each year, commencing October15, 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 Companys 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 Companys investment adviser, New Mountain Finance Adviser BDC, L.L.C. (the Investment Adviser), or an affiliate thereof, ceases to be the Companys 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 Companys 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 form of Supplement which is filed as Exhibit10.1 to this current report on Form8-K and is incorporated herein by reference thereto.
Item 2.03. 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 9.01. Financial Statements and Exhibits.
(d)Exhibits.
