New Mountain Finance Corp

Previous wording

•the impact of interest rate volatility, including the replacement of LIBOR with alternative reference rates and rising interest rates, on our business and our portfolio companies;

Current wording

•the impact of interest rate volatility on our business and our portfolio companies;

Previous wording

•New Mountain Finance Holdings, L.L.C. ("NMF Holdings") and New Mountain Finance DB, L.L.C. ("NMFDB"), whose assets are used to secure NMF Holdings’ credit facility and were used to secured NMFDB’s credit facility, until its termination on September 30, 2024, respectively;

Current wording

•New Mountain Finance Holdings, L.L.C. ("NMF Holdings") and New Mountain Finance DB, L.L.C. ("NMFDB"), whose assets are used to secure NMF Holdings’ credit facility and were used to secure NMFDB’s credit facility, until its termination on September 30, 2024, respectively;

Previous wording

Similar to us, the investment objective of SBIC I and SBIC II is to generate current income and capital appreciation under the investment criteria we use. However, SBIC I and SBIC II investments must be in SBA eligible small businesses. Our portfolio may be concentrated in a limited number of industries. As of September 30, 2024, our top five industry concentrations were software, business services, healthcare, investment funds (which includes our investments in our joint ventures) and consumer services.

Current wording

Similar to us, the investment objective of SBIC I and SBIC II is to generate current income and capital appreciation under the investment criteria we use. However, SBIC I and SBIC II investments must be in SBA eligible small businesses. Our portfolio may be concentrated in a limited number of industries. As of March 31, 2025, our top five industry concentrations were software, healthcare, business services, investment funds (which includes our investments in our joint ventures) and consumer services.

Previous wording

As of September 30, 2024, our net asset value was approximately $1,361.3 million and our portfolio had a fair value, as determined in good faith by the board of directors, of approximately $3,265.3 million in 127 portfolio companies, with a weighted average yield to maturity at cost for income producing investments ("YTM at Cost") of approximately 10.5% and a weighted average yield to maturity at cost for all investments ("YTM at Cost for Investments") of approximately 9.5%. The YTM at Cost calculation assumes that all investments, including secured collateralized agreements, not on non-accrual are purchased at cost on the quarter end date and held until their respective maturities with no prepayments or losses and exited at par at maturity. The YTM at Cost for Investments calculation assumes that all investments, including secured collateralized agreements, are purchased at cost on the quarter end date and held until their respective maturities with no prepayments or losses and exited at par at maturity. YTM at Cost and YTM at Cost for Investments calculations exclude the impact of existing leverage. YTM at Cost and YTM at Cost for Investments use Sterling Overnight Interbank Average Rate ("SONIA"), Secured Overnight Financing Rate ("SOFR") and Euro Interbank Offered Rate ("EURIBOR") curves at each quarter's end date. The actual yield to maturity may be higher or lower due to the future selection of the SONIA, SOFR and EURIBOR contracts by the individual companies in our portfolio or other factors.

Current wording

As of March 31, 2025, our net asset value was approximately $1,342.2 million and our portfolio had a fair value, as determined in good faith by the board of directors, of approximately $3,034.2 million in 118 portfolio companies, with a weighted average yield to maturity at cost for income producing investments ("YTM at Cost") of approximately 10.7% and a weighted average yield to maturity at cost for all investments ("YTM at Cost for Investments") of approximately 10.2%. The YTM at Cost calculation assumes that all investments, including secured collateralized agreements, not on non-accrual are purchased at cost on the quarter end date and held until their respective maturities with no prepayments or losses and exited at par at maturity. The YTM at Cost for Investments calculation assumes that all investments, including secured collateralized agreements, are purchased at cost on the quarter end date and held until their respective maturities with no prepayments or losses and exited at par at maturity. YTM at Cost and YTM at Cost for Investments calculations exclude the impact of existing leverage. YTM at Cost and YTM at Cost for Investments use Sterling Overnight Interbank Average Rate ("SONIA"), Secured Overnight Financing Rate ("SOFR") and Euro Interbank Offered Rate ("EURIBOR") curves at each quarter's end date. The actual yield to maturity may be higher or lower due to the future selection of the SONIA, SOFR and EURIBOR contracts by the individual companies in our portfolio or other factors.

Previous wording

On October 23, 2024, our board of directors declared a fourth quarter 2024 distribution of $0.32 per share and a supplemental distribution related to third quarter earnings of $0.01 per share, each payable on December 31, 2024 to holders of record as of December 17, 2024.

Current wording

On April 22, 2025, our board of directors declared a second quarter 2025 distribution of $0.32 per share payable on June 30, 2025 to holders of record as of June 16, 2025.

Previous wording

On May 2, 2018, SLP III entered into its revolving credit facility with Citibank, N.A. As of the amendment on July 3, 2024, the maturity date of SLP III's revolving credit facility was extended from January 8, 2026 to January 8, 2029, and the reinvestment period was extended from July 8, 2026 to July 8, 2027. As of the amendment on July 3, 2024, during the reinvestment period, the credit facility bears interest at a rate of the Secured Overnight Financing Rate ("SOFR") plus 1.65%, and after the reinvestment period it will bear interest at a rate of SOFR plus 1.95%. From June 23, 2023 to July 3, 2024, during the reinvestment period, the credit facility bore interest at a rate of SOFR plus 1.80%, and after the reinvestment period it bore interest at a rate of SOFR plus 2.10%. Prior to the amendment on June 23, 2023, the facility bore interest at a rate of LIBOR plus 1.60% per annum during the reinvestment period and LIBOR plus 1.90% per annum after the reinvestment period. As of September 30, 2024, SLP III's revolving credit facility has a maximum borrowing capacity of $600.0 million. As of September 30, 2024 and December 31, 2023, SLP III had total investments with an aggregate fair value of approximately $680.7 million and $636.6 million, respectively, and debt outstanding under its credit facility of $473.2 million and $453.2 million, respectively. As of September 30, 2024 and December 31, 2023, none of SLP III's investments were on non-accrual. Additionally, as of September 30, 2024 and December 31, 2023, SLP III had unfunded commitments in the form of delayed draws of $1.8 million and $1.1 million, respectively.

Current wording

On May 2, 2018, SLP III entered into its revolving credit facility with Citibank, N.A. As of the amendment on July 3, 2024, the maturity date of SLP III's revolving credit facility was extended from January 8, 2026 to January 8, 2029, and the reinvestment period was extended from July 8, 2026 to July 8, 2027. As of the amendment on July 3, 2024, during the reinvestment period, the credit facility bears interest at a rate of the Secured Overnight Financing Rate ("SOFR") plus 1.65%, and after the reinvestment period it will bear interest at a rate of SOFR plus 1.95%. From June 23, 2023 to July 3, 2024, during the reinvestment period, the credit facility bore interest at a rate of SOFR plus 1.80%, and after the reinvestment period it bore interest at a rate of SOFR plus 2.10%. As of March 31, 2025, SLP III's revolving credit facility had a maximum borrowing capacity of $600.0 million. As of March 31, 2025 and December 31, 2024, SLP III had total investments with an aggregate fair value of approximately $688.2 million and $715.1 million, respectively, and debt outstanding under its credit facility of $477.7 million and $511.2 million, respectively. As of March 31, 2025 and December 31, 2024, none of SLP III's investments were on non-accrual. Additionally, as of March 31, 2025 and December 31, 2024, SLP III had unfunded commitments in the form of delayed draws of $4.9 million and $2.7 million, respectively.

Previous wording

See Item 1.—Financial Statements and Supplementary Data—Note 3. Investmentsin this Quarterly Report on Form 10-Q for a listing of the individual investments in SLP III's portfolio as of September 30, 2024 and December 31, 2023 and additional information on certain summarized financial information for SLP III as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and September 30, 2023.

Current wording

See Item 1.—Financial Statements and Supplementary Data—Note 3. Investmentsin this Quarterly Report on Form 10-Q for a listing of the individual investments in SLP III's portfolio as of March 31, 2025 and December 31, 2024 and additional information on certain summarized financial information for SLP III as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and March 31, 2024.

Previous wording

On May 5, 2021, SLP IV entered into a $370.0 million revolving credit facility with Wells Fargo Bank, National Association which matures on March 27, 2029. As of the amendment on March 27, 2024, the facility bears interest at a rate of SOFR plus 1.90%. From April 28, 2023 to March 27, 2024, the facility bore interest at a rate of SOFR plus 1.70%. Prior to the amendment on April 28, 2023, the facility bore interest at a rate of LIBOR plus 1.60% per annum. As of September 30, 2024 and December 31, 2023, SLP IV had total investments with an aggregate fair value of approximately $466.3 million and $467.9 million, respectively, and debt outstanding under its credit facility of $341.9 million and $306.5 million, respectively. As of September 30, 2024 and December 31, 2023, none of SLP IV’s investments were on non-accrual. Additionally, as of September 30, 2024 and December 31, 2023, SLP IV had unfunded commitments in the form of delayed draws of $0.8 million and $0.8 million, respectively.

Current wording

On May 5, 2021, SLP IV entered into a $370.0 million revolving credit facility with Wells Fargo Bank, National Association which matures on March 27, 2029. As of the amendment on December 20, 2024, the facility bears interest at a rate of SOFR plus 1.50%. From March 27, 2024 to December 20, 2024, the facility bore interest at a rate of SOFR plus 1.90%. From April 28, 2023 to March 27, 2024, the facility bore interest at a rate of SOFR plus 1.70%. As of March 31, 2025 and December 31, 2024, SLP IV had total investments with an aggregate fair value of approximately $451.1 million and $469.3 million, respectively, and debt outstanding under its credit facility of $323.4 million and $334.4 million, respectively. As of March 31, 2025 and December 31, 2024, none of SLP IV’s investments were on non-accrual. Additionally, as of March 31, 2025 and December 31, 2024, SLP IV had unfunded commitments in the form of delayed draws of $2.8 million and $1.2 million, respectively.

Previous wording

See Item 1.—Financial Statements and Supplementary Data—Note 3. Investmentsin this Quarterly Report on Form 10-Q for a listing of the individual investments in SLP IV's consolidated portfolio as of September 30, 2024 and December 31, 2023 and additional information on certain summarized financial information for SLP IV as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and September 30, 2023.

Current wording

See Item 1.—Financial Statements and Supplementary Data—Note 3. Investmentsin this Quarterly Report on Form 10-Q for a listing of the individual investments in SLP IV's consolidated portfolio as of March 31, 2025 and December 31, 2024 and additional information on certain summarized financial information for SLP IV as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and March 31, 2024.

Previous wording

We follow the guidance in Accounting Standards Codification Topic 860, Transfers and Servicing—Secured Borrowing and Collateral ("ASC 860") when accounting for transactions involving the purchases of securities under collateralized agreements to resell (resale agreements). These transactions are treated as collateralized financing transactions and are recorded at their contracted resale or repurchase amounts, as specified in the respective agreements. Interest on collateralized agreements is accrued and recognized over the life of the transaction and included in interest income. As of September 30, 2024 and December 31, 2023, we held one collateralized agreement to resell with a cost basis of $30.0 million and $30.0 million, respectively, and a fair value of $13.5 million and $16.5 million, respectively. The collateralized agreement to resell is on non-accrual. The collateralized agreement to resell is guaranteed by a private hedge fund, PPVA Fund, L.P. The private hedge fund is currently in liquidation under the laws of the Cayman Islands. Pursuant to the terms of the collateralized agreement, the private hedge fund was obligated to repurchase the collateral from us at the par value of the collateralized agreement. The private hedge fund has breached its agreement to repurchase the collateral under the collateralized agreement. The default by the private hedge fund did not release the collateral to us, therefore, we do not have full rights and title to the collateral. A claim has been filed with the Cayman Islands joint official liquidators to resolve this matter. The joint official liquidators have recognized our contractual rights under the collateralized agreement. We continue to exercise our rights under the collateralized agreement and continue to monitor the liquidation process of the private hedge fund. The fair value of the collateralized agreement to resell is reflective of the increased risk of the position.

Current wording

We follow the guidance in Accounting Standards Codification Topic 860, Transfers and Servicing—Secured Borrowing and Collateral ("ASC 860") when accounting for transactions involving the purchases of securities under collateralized agreements to resell (resale agreements). These transactions are treated as collateralized financing transactions and are recorded at their contracted resale or repurchase amounts, as specified in the respective agreements. Interest on collateralized agreements is accrued and recognized over the life of the transaction and included in interest income. As of March 31, 2025 and December 31, 2024, we held one collateralized agreement to resell with a cost basis of $30.0 million and $30.0 million, respectively, and a fair value of $13.5 million and $13.5 million, respectively. The collateralized agreement to resell is on non-accrual. The collateralized agreement to resell is guaranteed by a private hedge fund, PPVA Fund, L.P. The private hedge fund is currently in liquidation under the laws of the Cayman Islands. Pursuant to the terms of the collateralized agreement, the private hedge fund was obligated to repurchase the collateral from us at the par value of the collateralized agreement. The private hedge fund has breached its agreement to repurchase the collateral under the collateralized agreement. The default by the private hedge fund did not release the collateral to us, therefore, we do not have full rights and title to the collateral. A claim has been filed with the Cayman Islands joint official liquidators to resolve this matter. The joint official liquidators have recognized our contractual rights under the collateralized agreement. We continue to exercise our rights under the collateralized agreement and continue to monitor the liquidation process of the private hedge fund. The fair value of the collateralized agreement to resell is reflective of the increased risk of the position.

Previous wording

On December 22, 2017, we settled the Trustee’s $20.5 million Claim for $16.0 million and filed a claim with the Cayman Islands joint official liquidators of the private hedge fund for $16.0 million that is owed to us under the SPP Agreement. The SPP Agreement was restored and is in effect since repayment has not been made. We continue to exercise our rights under the SPP Agreement and continue to monitor the liquidation process of the private hedge fund. During the year ended December 31, 2018, we received a $1.5 million payment from our insurance carrier in respect to the settlement. As of September 30, 2024 and December 31, 2023, the SPP Agreement had a cost basis of $14.5 million and $14.5 million, respectively, and a fair value of $6.5 million and $8.0 million, respectively, which is reflective of the higher inherent risk in this transaction.

Current wording

On December 22, 2017, we settled the Trustee’s $20.5 million Claim for $16.0 million and filed a claim with the Cayman Islands joint official liquidators of the private hedge fund for $16.0 million that is owed to us under the SPP Agreement. The SPP Agreement was restored and is in effect since repayment has not been made. We continue to exercise our rights under the SPP Agreement and continue to monitor the liquidation process of the private hedge fund. During the year ended December 31, 2018, we received a $1.5 million payment from our insurance carrier in respect to the settlement. As of March 31, 2025 and December 31, 2024, the SPP Agreement had a cost basis of $14.5 million and $14.5 million, respectively, and a fair value of $6.5 million and $6.5 million, respectively, which is reflective of the higher inherent risk in this transaction.

Previous wording

Interest and dividend income: Interest income, including amortization of premium and discount using the effective interest method, is recorded on the accrual basis and periodically assessed for collectability. Interest income also includes interest earned from cash on hand. Upon the prepayment of a loan or debt security, any prepayment penalties are recorded as part of interest income. We have loans and certain preferred equity investments in the portfolio that contain a payment-in-kind (“PIK”) interest or dividend provision. PIK interest and dividends are accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest and dividends are added to the principal or share balances on the capitalization dates and are generally due at maturity or when redeemed by the issuer. For the three and nine months ended September 30, 2024 we recognized PIK and non-cash interest from investments of approximately $9.1 million and $27.7 million, respectively, and PIK and non-cash dividends from investments of approximately $8.3 million and $23.5 million, respectively. For the three and nine months ended September 30, 2023, we recognized PIK and non-cash interest from investments of approximately $7.9 million and $24.8 million, respectively, and PIK and non-cash dividends from investments of approximately $7.0 million and $20.2 million, respectively.

Current wording

Interest and dividend income: Interest income, including amortization of premium and discount using the effective interest method, is recorded on the accrual basis and periodically assessed for collectability. Interest income also includes interest earned from cash on hand. Upon the prepayment of a loan or debt security, any prepayment penalties are recorded as part of interest income. We have loans and certain preferred equity investments in the portfolio that contain a payment-in-kind (“PIK”) interest or dividend provision. PIK interest and dividends are accrued and recorded as income at the contractual rates, if deemed collectible. The PIK interest and dividends are added to the principal or share balances on the capitalization dates and are generally due at maturity or when redeemed by the issuer. For the three months ended March 31, 2025 and March 31, 2024 we recognized PIK and non-cash interest from investments of approximately $7.6 million and $9.7 million, respectively, and PIK and non-cash dividends from investments of approximately $8.2 million and $7.4 million, respectively.

Previous wording

As of September 30, 2024, all investments in our portfolio had a Green Risk Rating with the exception of four portfolio companies that had a Yellow Risk Rating, and six portfolio companies that had an Orange Risk Rating. As of September 30, 2024, no portfolio companies had a Red Risk Rating.

Current wording

As of March 31, 2025, all investments in our portfolio had a Green Risk Rating with the exception of five portfolio companies that had a Yellow Risk Rating and six portfolio companies that had an Orange Risk Rating. As of March 31, 2025, no portfolio companies had a Red Risk Rating.

Previous wording

During the second quarter of 2022, we placed our second lien positions in National HME, Inc. ("National HME") on non-accrual status. As of September 30, 2024, our second lien position in National HME had an aggregate cost basis of $7.9 million, an aggregate fair value of $3.0 million and total unearned interest income of $0.5 million and $1.5 million, respectively, for the three and nine months then ended. As of September 30, 2024, our investment in National HME had an Orange Risk Rating.

Current wording

During the second quarter of 2022, we placed our second lien positions in National HME, Inc. ("National HME") on non-accrual status. As of March 31, 2025, our second lien position in National HME had an aggregate cost basis of $7.9 million, an aggregate fair value of $3.0 million and total unearned interest income of $0.5 million for the three months then ended. As of March 31, 2025, our investment in National HME had an Orange Risk Rating.

Previous wording

As of September 30, 2024, our aggregate principal amount of our subordinated position and first lien term loans in American Achievement Corporation ("AAC") was $5.2 million and $31.4 million, respectively. During the first quarter of 2021, we placed an aggregate principal amount of $5.2 million of our subordinated position on non-accrual status. During the third quarter of 2021, we placed an aggregate principal amount of $13.5 million of our first lien term loans on non-accrual status. During the third quarter of 2023, we placed the remaining aggregate principal amount of $17.9 million of our first lien term loans on non-accrual status. As of September 30, 2024, our positions in AAC on non-accrual status had an aggregate cost basis of $31.4 million, an aggregate fair value of $18.0 million and total unearned interest income of $1.3 million and $3.7 million, for the three and nine months then ended. As of September 30, 2024, our investment in AAC had an Orange Risk Rating.

Current wording

As of March 31, 2025, our aggregate principal amount of our subordinated position and first lien term loans in American Achievement Corporation ("AAC") was $5.2 million and $31.4 million, respectively. During the first quarter of 2021, we placed an aggregate principal amount of $5.2 million of our subordinated position on non-accrual status. During the third quarter of 2021, we placed an aggregate principal amount of $13.5 million of our first lien term loans on non-accrual status. During the third quarter of 2023, we placed the remaining aggregate principal amount of $17.9 million of our first lien term loans on non-accrual status. As of March 31, 2025, our positions in AAC on non-accrual status had an aggregate cost basis of $31.4 million, an aggregate fair value of $18.0 million and total unearned interest income of $1.3 million for the three months then ended. As of March 31, 2025, our investment in AAC had an Orange Risk Rating.

Previous wording

During the second quarter of 2024, we placed our investment in our junior preferred shares in Eclipse Topco Holdings, Inc. (fka Transcendia Holdings, Inc.) ("Transcendia") on non-accrual status. As of September 30, 2024, our junior preferred shares in Transcendia had an aggregate cost basis of $2.6 million, an aggregate fair value of $2.7 million and total unearned income of $0.1 million and $0.1 million, respectively, for the three and nine months then ended. As of September 30, 2024, our investment in Transcendia had a Green Risk Rating.

Current wording

During the second quarter of 2024, we placed our investment in our junior preferred shares in Eclipse Topco Holdings, Inc. (fka Transcendia Holdings, Inc.) ("Transcendia") on non-accrual status. As of March 31, 2025, our junior preferred shares in Transcendia had an aggregate cost basis of $2.6 million, an aggregate fair value of $2.7 million and total unearned income of $0.1 million for the three months then ended. As of March 31, 2025, our investment in Transcendia had a Green Risk Rating.

Previous wording

The fair value of our investments, as determined in good faith by our board of directors, was approximately $3,265.3 million in 127 portfolio companies at September 30, 2024 and approximately $3,011.3 million in 110 portfolio companies at December 31, 2023.

Current wording

The fair value of our investments, as determined in good faith by our board of directors, was approximately $3,034.2 million in 118 portfolio companies at March 31, 2025 and approximately $3,091.0 million in 120 portfolio companies at December 31, 2024.

Previous wording

The following table shows our portfolio and investment activity for the nine months ended September 30, 2024 and September 30, 2023:

Current wording

The following table shows our portfolio and investment activity for the three months ended March 31, 2025 and March 31, 2024:

Previous wording

Our total investment income increased by approximately $1.0 million, or 1%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. For the three months ended September 30, 2024, total investment income of approximately $95.3 million consisted of approximately $61.9 million in cash interest from investments, approximately $9.0 million in PIK and non-cash interest from investments, approximately $0.1 million in prepayment fees, net amortization of purchase premiums and discounts of approximately $1.7 million, approximately $12.0 million in cash dividends from investments, approximately $8.4 million in PIK and non-cash dividends from investments and approximately $2.2 million in other income. The decrease in interest income of approximately $1.2 million during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was primarily due to the decrease in total coupon rates on our floating rate investments, partially offset by a larger invested balance. The increase in dividend income of approximately $2.2 million during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was primarily due to an increase in cash dividends from SLP III and an increase in PIK dividends on our preferred equity investments. Other income during the three months ended September 30, 2024, which represents fees that are generally non-recurring in nature, was primarily attributable to upfront and amendment fees received from 19 different portfolio companies.

Current wording

Our total investment income decreased by approximately $4.9 million, or 5%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. For the three months ended March 31, 2025, total investment income of approximately $85.7 million consisted of approximately $52.2 million in cash interest from investments, approximately $7.6 million in PIK and non-cash interest from investments, approximately $0.1 million in prepayment fees, net amortization of purchase premiums and discounts of approximately $1.6 million, approximately $12.8 million in cash dividends from investments, approximately $8.2 million in PIK and non-cash dividends from investments and approximately $3.2 million in other income. The decrease in interest income of approximately $6.1 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 was primarily due to the slightly lower yields on the portfolio. Dividend income remained relatively flat for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Other income during the three months ended March 31, 2025, which represents fees that are generally non-recurring in nature, was primarily attributable to upfront and amendment fees received from 10 different portfolio companies.

Previous wording

Our total net operating expenses increased by approximately $6.3 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Our management fee, net of a management fee waiver, remained relatively flat for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Our incentive fee decreased by approximately $1.3 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The decrease in incentives fees was attributable to a decrease in net investment income. Interest and other financing expenses increased by approximately $6.2 million during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 as a result of the acceleration of financing costs upon termination of the DB Credit Facility, an increase in our cost of borrowings due to higher SOFR rates on our floating rate facilities, our 8.250% Unsecured Notes, issued on November 13, 2023 and our 6.875% Unsecured Notes, issued on February 1, 2024, partially offset by the repayment of our 2019A Unsecured Notes on February 5, 2024. Our total professional fees, administrative expenses and total other general and administrative expenses for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 remained relatively flat.

Current wording

Our total net operating expenses decreased by approximately $2.0 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Our management fee, net of a management fee waiver, remained relatively flat for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Our incentive fee, net of an incentive fee waiver, decreased by approximately $2.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The decrease in incentives fees was primarily attributable to an incentive fee waiver by the Investment Advisor along with a decrease in net investment income. Interest and other financing expenses remained relatively flat during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Our total professional fees, administrative expenses and total other general and administrative expenses for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 remained relatively flat.

Previous wording

Our net realized losses and unrealized gains and losses resulted in a net loss of approximately $11.5 million for the three months ended September 30, 2024 compared to net realized gains and unrealized losses resulting in a net loss of approximately $12.0 million for the same period in 2023. As movement in unrealized appreciation or depreciation can be the result of realizations, we look at net realized and unrealized gains or losses together. The net loss for the three months ended September 30, 2024 was primarily driven by unrealized depreciation in New Permian Holdco, Inc., TVG-Edmentum Holdings, LLC ("Edmentum") and AAC, partially offset by unrealized appreciation in HB Wealth Management, LLC ("Homrich"), NM NL Holdings, L.P. and NM YI, LLC. The provision for income taxes was attributable to equity investments that are held as of September 30, 2024 in eight of our corporate subsidiaries. The net loss for the three months ended September 30, 2023 was primarily driven by unrealized depreciation in Edmentum and UniTek, partially offset by realized gains in Haven Midstream Holdings LLC and unrealized appreciation in Vectra Co. and TMK Hawk Parent, Corp. See Monitoring of Portfolio Investments above for more details regarding the health of our portfolio companies.

Current wording

Our net realized losses and unrealized gains and losses resulted in a net loss of approximately $11.1 million for the three months ended March 31, 2025 compared to net realized losses and unrealized gains and losses resulting in a net loss of approximately $9.5 million for the same period in 2024. As movement in unrealized appreciation or depreciation can be the result of realizations, we look at net realized and unrealized gains or losses together. The net loss for the three months ended March 31, 2025 was primarily driven by unrealized depreciation in UniTek Global Services, Inc. ("UniTek"), TVG-Edmentum Holdings, LLC ("Edmentum") and New Permian Holdco, Inc., partially offset by unrealized appreciation in OA Buyer and HS Purchaser, LLC. The provision for income taxes was attributable to equity investments that are held as of March 31, 2025 in eight of our corporate subsidiaries. The net loss for the three months ended March 31, 2024 was primarily driven by a realized loss in TMK Hawk Parent, Corp. and unrealized depreciation in Edmentum and New Benevis Topco, LLC, partially offset by unrealized appreciation in NM GP Holdco, LLC, UniTek and CentralSquare Technologies, LLC. The provision for income taxes was attributable to equity investments that are held as of March 31, 2024 in eight of our corporate subsidiaries. See Monitoring of Portfolio Investments above for more details regarding the health of our portfolio companies.

Previous wording

Our liquidity is generated and generally available through advances from the revolving credit facilities, from cash flows from operations, and, we expect, through periodic follow-on equity offerings. In addition, we may from time to time enter into additional debt facilities, increase the size of existing facilities or issue additional debt securities, including unsecured debt and/or debt securities convertible into common stock. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. On June 8, 2018 our shareholders approved the application of the modified asset coverage requirements set forth in Section 61(a) of the 1940 Act, which resulted in the reduction of the minimum asset coverage ratio applicable to us from 200.0% to 150.0% as of June 9, 2018. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, is at least 150.0% after such borrowing (which means we can borrow $2 for every $1 of our equity). As a result of our exemptive relief received on November 5, 2014, we are permitted to exclude the SBA-guaranteed debentures held by SBIC I and SBIC II from the 150.0% asset coverage ratio that we are required to maintain under the 1940 Act. The agreements governing the NMFC Credit Facility, the Convertible Notes and certain of the Unsecured Notes (as defined in Item 1— Financial Statements—Note 7. Borrowings) contain certain covenants and terms, including a requirement that we not exceed a debt-to-equity ratio of 1.65 to 1.00 at the time of incurring additional indebtedness and a requirement that we not exceed a secured debt ratio of 0.70 to 1.00 at any time. As of September 30, 2024, our asset coverage ratio was 179.2%.

Current wording

Our liquidity is generated and generally available through advances from the revolving credit facilities, from cash flows from operations, and, we expect, through periodic follow-on equity offerings. In addition, we may from time to time enter into additional debt facilities, increase the size of existing facilities or issue additional debt securities, including unsecured debt and/or debt securities convertible into common stock. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors. On June 8, 2018 our shareholders approved the application of the modified asset coverage requirements set forth in Section 61(a) of the 1940 Act, which resulted in the reduction of the minimum asset coverage ratio applicable to us from 200.0% to 150.0% as of June 9, 2018. In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, is at least 150.0% after such borrowing (which means we can borrow $2 for every $1 of our equity). As a result of our exemptive relief received on November 5, 2014, we are permitted to exclude the SBA-guaranteed debentures of SBIC I and SBIC II from the definition of "senior securities" in the asset coverage requirement applicable to us under the 1940 Act. The agreements governing the NMFC Credit Facility, the 2022 Convertible Notes and certain of the Unsecured Notes (as defined in Item 1— Financial Statements—Note 7. Borrowingsin this Quarterly Report on Form 10-Q) contain certain covenants and terms, including a requirement that we not exceed a debt-to-equity ratio of 1.65 to 1.00 at the time of incurring additional indebtedness and a requirement that we not exceed a secured debt ratio of 0.70 to 1.00 at any time. As of March 31, 2025, our asset coverage ratio was 187.0%.

Previous wording

As of September 30, 2024 and December 31, 2023, our borrowings consisted of the 2019A Unsecured Notes (repaid on February 5, 2024), 2021A Unsecured Notes, 2022A Unsecured Notes, 8.250% Unsecured Notes, 6.875% Unsecured Notes (issued on February 1, 2024), SBA-guaranteed debentures, Holdings Credit Facility, 2022 Convertible Notes, DB Credit Facility (repaid and terminated on September 30, 2024), NMFC Credit Facility, NMNLC Credit Facility II and Unsecured Management Company Revolver. See Item 1—Financial Statements —Note 7. Borrowings in this Quarterly Report on Form 10-Q for additional information.

Current wording

As of March 31, 2025 and December 31, 2024, our borrowings consisted of the 2021A Unsecured Notes, 2022A Unsecured Notes, 8.250% Unsecured Notes, 6.875% Unsecured Notes, 6.200% Unsecured Notes, Holdings Credit Facility, SBA-guaranteed debentures, 2022 Convertible Notes, NMFC Credit Facility and Unsecured Management Company Revolver. See Item 1—Financial Statements —Note 7. Borrowings in this Quarterly Report on Form 10-Q for additional information.

Previous wording

At September 30, 2024 and December 31, 2023, we had cash and cash equivalents of approximately $61.9 million and $70.1 million, respectively. Our cash (used in) provided by operating activities during the nine months ended September 30, 2024 and September 30, 2023 was approximately $(153.2) million and $207.0 million, respectively. We expect that all current liquidity needs will be met with cash flows from operations and other activities.

Current wording

At March 31, 2025 and December 31, 2024, we had cash and cash equivalents of approximately $85.5 million and $80.3 million, respectively. Our cash provided by operating activities during the three months ended March 31, 2025 and March 31, 2024 was approximately $103.9 million and $68.3 million, respectively. We expect that all current liquidity needs will be met with cash flows from operations and other activities.

Previous wording

On November 3, 2021, we entered into an equity distribution agreement, as amended on May 18, 2023, August 23, 2023, June 27, 2024 and August 1, 2024 (the “Distribution Agreement”) with B. Riley Securities, Inc. and Raymond James & Associates, Inc. (collectively, the “Agents”). The Distribution Agreement originally provided that we may issue and sell our shares from time to time through the Agents, up to $250.0 million worth of our common stock by means of at-the-market ("ATM") offerings. As of the amendment on June 27, 2024, we increased the maximum amount of shares to be sold through the ATM program from $250.0 million to $400.0 million.

Current wording

On November 3, 2021, we entered into an equity distribution agreement, as amended on May 18, 2023, August 23, 2023, June 27, 2024 and August 1, 2024 (the “Distribution Agreement”) with B. Riley Securities, Inc. and Raymond James & Associates, Inc. On August 1, 2024, the Company entered into Amendment No. 4 to the Distribution Agreement with B. Riley Securities, Inc., Raymond James & Associates, Inc., and Citizens JMP Securities, LLC (collectively, the "Agents") for the purpose of adding Citizens JMP Securities, LLC as an Agent. The Distribution Agreement originally provided that we may issue and sell our shares from time to time through the Agents, up to $250.0 million worth of our common stock by means of at-the-market ("ATM") offerings. As of the amendment on June 27, 2024, we increased the maximum amount of shares to be sold through the ATM program from $250.0 million to $400.0 million.

Previous wording

For the three months ended September 30, 2024, we did not sell any shares of common stock under the Distribution Agreement. For the nine months ended September 30, 2024, we sold 5,292,556 shares of common stock under the Distribution Agreement and received total accumulated net proceeds of approximately $67.7 million, including $0.0 million of offering expenses, from these sales. For the three and nine months ended September 30, 2023, we sold 502,623 and 502,623 shares, respectively, of common stock, under the Distribution Agreement and received total accumulated net proceeds of approximately $6.6 million and $6.6 million, respectively, including $0.0 million and $0.0 million, respectively, of offering expenses, from these sales.

Current wording

For the three months ended March 31, 2025, we did not sell any shares of common stock under the Distribution Agreement. For the three months ended March 31, 2024, we sold 3,730,434 shares of common stock under the Distribution Agreement and received total accumulated net proceeds of approximately $47.9 million including $0.0 million of offering expenses, from these sales.

Previous wording

We may become a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of September 30, 2024 and December 31, 2023, we had outstanding commitments to third parties to fund investments totaling $277.4 million and $156.8 million, respectively, under various undrawn revolving credit facilities, delayed draw commitments or other future funding commitments.

Current wording

We may become a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet. As of March 31, 2025 and December 31, 2024, we had outstanding commitments to third parties to fund investments totaling $250.4 million and $243.7 million, respectively, under various undrawn revolving credit facilities, delayed draw commitments or other future funding commitments.

Previous wording

We may from time to time enter into financing commitment letters or bridge financing commitments, which could require funding in the future. As of September 30, 2024 and December 31, 2023, we had commitment letters to purchase investments in an aggregate par amount of $87.6 million and $11.1 million, respectively. As of September 30, 2024 and December 31, 2023, we had not entered into any bridge financing commitments which could require funding in the future.

Current wording

We may from time to time enter into financing commitment letters or bridge financing commitments, which could require funding in the future. As of March 31, 2025 and December 31, 2024, we had commitment letters to purchase investments in an aggregate par amount of $4.7 million and $83.6 million, respectively. As of March 31, 2025 and December 31, 2024, we had not entered into any bridge financing commitments which could require funding in the future.

Previous wording

(2)Under the terms of the $730.0 million Holdings Credit Facility, all outstanding borrowings under that facility ($407.6 million as of September 30, 2024) must be repaid on or before October 26, 2028. As of September 30, 2024, there was approximately $322.4 million of available capacity remaining, subject to borrowing base limitations, under the Holdings Credit Facility.

Current wording

(2)Under the terms of the $730.0 million Holdings Credit Facility, all outstanding borrowings under that facility ($270.6 million as of March 31, 2025) must be repaid on or before March 28, 2030. As of March 31, 2025, there was approximately $459.4 million of available capacity remaining, subject to borrowing base limitations, under the Holdings Credit Facility.

Previous wording

(3)The SBA-guaranteed debentures held by SBIC I and SBIC II will begin to mature on March 1, 2025.

Current wording

(3)The SBA-guaranteed debentures held by SBIC I and SBIC II began to mature on March 1, 2025. On February 28, 2025, SBIC I repaid $37.5 million of guaranteed debentures that were due on March 1, 2025.

Previous wording

(5)Under the terms of the $638.5 million NMFC Credit Facility, all outstanding borrowings under that facility ($55.0 million, which included £26.7 million denominated in GBP and €17.4 million denominated in EUR that have been converted to U.S. dollars as of September 30, 2024) must be repaid on or before June 4, 2026 for Non-Extending Lenders and on or before September 28, 2029 for Extending Lenders. As of September 30, 2024, there was approximately $583.5 million of available capacity remaining, subject to borrowing base limitations, under the NMFC Credit Facility.

Current wording

(5)Under the terms of the $638.5 million NMFC Credit Facility, all outstanding borrowings under that facility ($29.1 million, which included €16.5 million denominated in EUR and £8.7 million denominated in GBP that have been converted to U.S. dollars as of March 31, 2025) must be repaid on or before June 4, 2026 for Non-Extending Lenders and on or before September 28, 2029 for Extending Lenders. As of March 31, 2025, there was approximately $609.4 million of available capacity remaining, subject to borrowing base limitations, under the NMFC Credit Facility.

Previous wording

(7)Under the terms of the $100.0 million Unsecured Management Company Revolver, all outstanding borrowings under that facility must be repaid on or before December 31, 2027. As of September 30, 2024, there were no borrowings outstanding.

Current wording

(6)Under the terms of the $100.0 million Unsecured Management Company Revolver, all outstanding borrowings under that facility must be repaid on or before December 31, 2027. As of March 31, 2025, there were no borrowings outstanding.

Previous wording

Distributions declared and paid to stockholders for the nine months ended September 30, 2024 totaled approximately $111.6 million.

Current wording

Distributions declared and paid to stockholders for the three months ended March 31, 2025 totaled approximately $34.5 million.

Previous wording

(1)Tax characteristics of all distributions paid are reported to stockholders on Form 1099 after the end of the calendar year. For the years ended December 31, 2023 and December 31, 2022, total distributions were $150.7 million and $122.4 million, respectively, of which the distributions were comprised of approximately 93.14% and 70.59%, respectively, of ordinary income, 6.86% and 0.00%, respectively, of qualified income, 0.00% and 20.79%, respectively, of long-term capital gains and approximately 0.00% and 8.62%, respectively, of a return of capital. Future quarterly distributions, if any, will be determined by our board of directors.

Current wording

(1)Tax characteristics of all distributions paid are reported to stockholders on Form 1099 after the end of the calendar year. For the years ended December 31, 2024 and December 31, 2023, total distributions were $147.2 million and $150.7 million, respectively, of which the distributions were comprised of approximately 75.68% and 93.14%, respectively, of ordinary income, 0.00% and 6.86%, respectively, of qualified income, 0.00% and 0.00%, respectively, of long-term capital gains and approximately 24.32% and 0.00%, respectively, of a return of capital. Future quarterly distributions, if any, will be determined by our board of directors.

Previous wording

(5)Special distribution of excess undistributed taxable income, driven primarily from the gain realized on our investment in Haven Midstream Holdings LLC.

Current wording

(3)Special distribution of excess undistributed taxable income, driven primarily from the gain realized on our investment in Haven Midstream Holdings LLC.

Previous wording

•We have entered into a fee waiver agreement (the "Fee Waiver Agreement") with the Investment Adviser, pursuant to which the Investment Adviser agreed to voluntarily reduce the base management fees payable to the Investment Adviser by us under the Investment Management Agreement beginning with the quarter ended March 31, 2021 through the quarter ending December 31, 2024. See Item 1— Financial Statements—Note 5. Agreements in this Quarterly Report on Form 10-Q for details.

Current wording

•We have entered into a fee waiver agreement (the "Fee Waiver Agreement") with the Investment Adviser, pursuant to which the Investment Adviser agreed to voluntarily reduce the base management fees payable to the Investment Adviser by us under the Investment Management Agreement beginning with the quarter ended March 31, 2021 through the quarter ended December 31, 2024. Following the expiration of the Fee Waiver Agreement, the Investment Adviser agreed to waive an amount of the base management fee that it may have been entitled to under the Investment Advisory Agreement for the period of January 1, 2025 through January 28, 2025, that would be in excess of an annual rate of 1.25% of our gross assets. See Item 1— Financial Statements—Note 5. Agreements in this Quarterly Report on Form 10-Q for details.

Previous wording

•We have entered into the Administration Agreement with the Administrator, a wholly-owned subsidiary of New Mountain Capital. The Administrator arranges our office space and provides office equipment and administrative services necessary to conduct our respective day-to-day operations pursuant to the Administration Agreement. We reimburse the Administrator for the allocable portion of overhead and other expenses incurred by it in performing its obligations to us under the Administration Agreement, which includes the fees and expenses associated with performing administrative, finance, and compliance functions, and the compensation of our chief financial officer and chief compliance officer and their respective staffs. Pursuant to the Administration Agreement and further restricted by us, the Administrator may, in its own discretion, submit to us for reimbursement some or all of the expenses that the Administrator has incurred on our behalf during any quarterly period. As a result, the amount of expenses for which we will have to reimburse the Administrator may fluctuate in future quarterly periods and there can be no assurance given as to when, or if, the Administrator may determine to limit the expenses that the Administrator submits to us for reimbursement in the future. However, it is expected that the Administrator will continue to support part of our expense burden in the near future and may decide to not calculate and charge through certain overhead related amounts as well as continue to cover some of the indirect costs. The Administrator cannot recoup any expenses that the Administrator has previously waived. For the three and nine months ended September 30, 2024 approximately $0.6 million and $1.8 million, respectively, of indirect administrative expenses were included in administrative expenses, of which no expenses were waived by the Administrator. As of September 30, 2024, approximately $0.6 million of indirect administrative expenses were included in payable to affiliates. For the three and nine months ended September 30, 2024, the reimbursement to the Administrator represented approximately 0.02% and 0.05%, respectively, of our gross assets.

Current wording

•We have entered into the Administration Agreement with the Administrator, a wholly-owned subsidiary of New Mountain Capital. The Administrator arranges our office space and provides office equipment and administrative services necessary to conduct our respective day-to-day operations pursuant to the Administration Agreement. We reimburse the Administrator for the allocable portion of overhead and other expenses incurred by it in performing its obligations to us under the Administration Agreement, which includes the fees and expenses associated with performing administrative, finance, and compliance functions, and the compensation of our chief financial officer and chief compliance officer and their respective staffs. Pursuant to the Administration Agreement and further restricted by us, the Administrator may, in its own discretion, submit to us for reimbursement some or all of the expenses that the Administrator has incurred on our behalf during any quarterly period. As a result, the amount of expenses for which we will have to reimburse the Administrator may fluctuate in future quarterly periods and there can be no assurance given as to when, or if, the Administrator may determine to limit the expenses that the Administrator submits to us for reimbursement in the future. However, it is expected that the Administrator will continue to support part of our expense burden in the near future and may decide to not calculate and charge through certain overhead related amounts as well as continue to cover some of the indirect costs. The Administrator cannot recoup any expenses that the Administrator has previously waived. For the three months ended March 31, 2025 approximately $0.6 million of indirect administrative expenses were included in administrative expenses, of which no expenses were waived by the Administrator. As of March 31, 2025, approximately $0.6 million of indirect administrative expenses were included in payable to affiliates. For the three months ended March 31, 2025, the reimbursement to the Administrator represented approximately 0.02% of our gross assets.