New Mountain Finance Corporation (the “Company”) (NASDAQ: NMFC) today announced that it has completed an offering of $200.0 million in aggregate principal amount of its 7.50% convertible bonds due 2025 (the “Bonds”). The offering was made pursuant to the terms of a private placement purchase agreement (the “Purchase Agreement”) with the various purchasers, each of whom is an “accredited investor” as defined in Rule 501 (a ) of Regulation D under the Securities Act. of 1933, as amended (the “Securities Act”) or a “qualified institutional buyer” within the meaning of Rule 144A promulgated under the Securities Act.
John R. Kline, President of New Mountain Finance Corporation, said, “We appreciate the strong support from existing and new investors for this offering, which will address short-term debt maturities with unsecured term financing. In addition, we are improving our capital base and strengthening our balance sheet. Management is confident that the increased flexibility offered by this financing will allow us to take advantage of an attractive environment for direct lending. »
Subject to the terms and conditions of an indenture governing the Notes entered into on November 2, 2022 in connection with the closing of the offering, the Notes will be convertible into common shares of the Company (as well as cash in lieu of fractional shares) at an initial conversion rate of 70.4225 common shares of the Company for each $1,000 principal amount of Notes (subject to adjustments by the Company pursuant to the Indenture), which is equivalent to an initial conversion price of approximately $14.20 per common share of Stock Company. The initial conversion price represents a conversion premium of 14.7% over the last published sale price of the common shares of the Company on October 27, 2022, which was $12.38 per share. The conversion rate and the conversion price will be subject to adjustment in the event of the occurrence of certain events. A Holder may convert his or her Notes in whole or in part at any time prior to the close of business on the scheduled business day immediately preceding the Maturity Date of October 15, 2025. The Notes will rank pari passu, or equal in right of payment, with all current and future unsecured and unsubordinated debt issued by the Company.
The Notes will mature on October 15, 2025, unless earlier converted, redeemed or redeemed in accordance with their terms. The Notes will bear interest at the annual rate of 7.50%, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2023.
The Company intends to use the net proceeds from the sale of the Notes to initiate a tender offer for the existing 5.75% Convertible Notes due 2023 and then, to the extent that any net proceeds remain , to pay other outstanding debts and for general corporate purposes. . The Securities do not contain any restrictions as to the type and security of the assets in which the Company may invest.
The Notes and the common shares of the Company underlying the Notes have not been registered under securities law or any applicable state securities law. Unless so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.
Oppenheimer & Co. Inc. served as placement agent for the offering.
This press release will not constitute an offer to sell or the solicitation of an offer to buy the Securities, and there will be no sale of these securities, in any State in which such offer, solicitation or sale would be unlawful. prior to registration or qualification. under the securities laws of any state.
ABOUT NEW MOUNTAIN FINANCIAL CORPORATION
New Mountain Finance Corporation is an externally managed, non-diversified, closed-end investment company that has elected to be regulated as a business development company under the Investment Companies Act of 1940, as than modified. 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 prime and second rank, notes, bonds and mezzanine securities. The Company’s senior debt may include traditional senior secured loans or unitranche loans. Unitranche loans combine the features of traditional senior secured loans as well as second lien and subordinated loans. Unitranche loans will expose the Company to the risks associated with second lien and subordinated loans to the extent that it invests in the “last out” tranche. In some cases, investments may also include small holdings. The Company’s investment activities are managed by its investment adviser, New Mountain Finance Advisers BDC, LLC, which is a registered investment adviser under the Investment Advisers Act of 1940, as amended.
ABOUT THE NEW MOUNTAIN CAPITAL
New Mountain Capital is a New York-based investment firm that emphasizes business development and growth rather than debt as it seeks long-term capital appreciation. The firm currently manages private equity, credit and net leasing investment strategies with over $37 billion in assets under management. New Mountain seeks out what it considers to be the highest quality growth leaders in carefully selected industry sectors, then works intensively with management to create the value of these companies.
FORWARD-LOOKING STATEMENTS
Statements included herein may contain “forward-looking statements” that relate to the future operations of the Company, its future performance or the financial condition of the Company. Forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties, including the impact of COVID-19, the ongoing conflict between Russia and Ukraine, and related changes in base interest rates and significant volatility to the Company’s business, portfolio companies, the Company’s industry and the global economy. Actual results and results may differ materially from those anticipated in the forward-looking statements due to a variety of factors, including those described from time to time in the Company’s filings with the Securities and Exchange Commission or factors beyond the control of of the society. . The Company undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as required by law. All forward-looking statements speak only as of the time of this press release.
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