Home News New Mountain Finance Corporation Has Concluded Its Offering of $200 Million in Convertible Notes at a Rate of 7.50 Percent

New Mountain Finance Corporation Has Concluded Its Offering of $200 Million in Convertible Notes at a Rate of 7.50 Percent

New Mountain Finance Corporation Has Concluded Its Offering of $200 Million in Convertible Notes at a Rate of 7.50 Percent

New Mountain Finance Corporation (the “Company”) (NASDAQ: NMFC) announced today the completion of an offering of $200.0 million in aggregate principal amount of its 7.50% convertible notes due 2025 (the “Notes”). The offering was consummated pursuant to the terms of a private placement purchase agreement (the “Purchase Agreement”) with several 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, commented, “We appreciate the strong support from both existing and new investors for this offering, which will address near-term debt maturities with unsecured term financing. Additionally, we are improving our capital base and fortifying our balance sheet. Management is confident that the increased flexibility this financing provides will position us to capitalize on 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 shares of the Company’s common stock (together with cash in lieu of fractional shares) at an initial conversion rate of 70.4225 shares of the Company’s common stock per $1,000 principal amount of Notes (subject to adjustments by the Company as provided in the indenture), which is equal to an initial conversion price of approximately $14.20 per share of the Company’s common stock. The initial conversion price represents a 14.7% conversion premium over the last reported sale price of the Company’s common stock on October 27, 2022, which was $12.38 per share. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. A holder may convert its Notes in whole or in part 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 equally in right of payment, with all outstanding and future unsecured, unsubordinated indebtedness issued by the Company.

The Notes will mature on October 15, 2025, unless earlier converted, redeemed or repurchased in accordance with their terms. The Notes will accrue interest at an 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 launch a tender offer for the Company’s existing 5.75% Convertible Notes due 2023 and then, to the extent any net proceeds remain, to repay other outstanding indebtedness and for general corporate purposes. The Notes have no restrictions related to the type and security of assets in which the Company might invest.

The Notes and the shares of the Company’s common stock underlying the Notes have not been registered under the Securities Act or any applicable state securities laws. 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 the placement agent for the offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any 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.

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