Item 1.01.
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Entry into a Material Definitive Agreement.
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Unsecured Notes Offering
On January 29, 2021, New Mountain Finance
Corporation (the “Company”) entered into a fifth supplement (the “Supplement”)
to its Amended and Restated Note Purchase Agreement, dated September 30, 2016 (the “Note Purchase Agreement”).
Pursuant to the Supplement, on January 29, 2021, the Company issued to institutional investors identified therein, in a private
placement, $200,000,000 in aggregate principal amount of 3.875% Series 2021A Senior Notes due January 29, 2026 (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 May 15, 2021, the $55,000,000 in aggregate
principal amount of the 4.76% Series 2017A Senior Notes due July 15, 2022, the $90,000,000 in aggregate principal amount
of the 4.87% Series 2018A Senior Notes due January 30, 2023, the $50,000,000 in aggregate principal amount of the 5.36%
Series 2018B Senior Notes due June 28, 2023 and the $116,500,000 in aggregate principal amount of the 5.494% Series 2019A
Senior Notes due April 30, 2024 (collectively, the “Prior Notes”) that the Company previously issued
pursuant to the Note Purchase Agreement, the first supplement thereto, the second supplement thereto, the third supplement thereto
and the fourth 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 fourth supplement to the Note Purchase Agreement relating to the 5.494% Series 2019A Senior Notes due April
30, 2024.
The Notes will rank equal in priority with
the Company’s other unsecured indebtedness, including the Prior Notes. Interest on the Notes will be payable semi-annually
in arrears on January 29 and July 29 of each year, commencing July 29, 2021. 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 Company’s 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 Company’s investment adviser,
New Mountain Finance Advisers BDC, L.L.C. (the “Investment Adviser”), or an affiliate thereof, ceases
to be the Company’s 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 Company’s status
as a business development company under the Investment Company Act of 1940, as amended, and a regulated investment company under 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 Company intends to use the proceeds of the offering to redeem its 5.31% Unsecured Notes due May 2021, to repay other outstanding debt
and for general corporate purposes.
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 Exhibit 10.1 to this current report on Form 8-K and is incorporated herein by reference thereto.