Business
New Mountain Finance Corporation Issues Letter to Stakeholders
NEW YORK--(BUSINESS WIRE)-- New Mountain Finance Corporation (NYSE:NMFC) Dear Fellow Stakeholders: As the COVID-19 pandemic continues and as we now have
About this update from New Mountain Finance Corporation
[{"type":"text","content":" NEW YORK--(BUSINESS WIRE)--\nNew Mountain Finance Corporation (NYSE:NMFC)\n\n\nDear Fellow Stakeholders:\n\n\nAs the COVID-19 pandemic continues and as we now have finished our first quarter end during this crisis, we are writing to keep you informed about New Mountain Finance Corporation (“NMFC”, the “Company”, “we”, “us”, or “our”) and its progress.\n\n\nBefore we do, we want to begin by recognizing the human toll of the COVID-19 crisis and want to wish good health and safety to all of you and your families. We sincerely hope you stay well throughout this dangerous time.\n\n\nTurning to business, New Mountain has long sought to emphasize \"defensive growth\" industries in both its private equity and credit efforts. As a result, NMFC has had an annualized realized default rate from the time of our 2011 IPO until now of under 50 basis points, while paying over $700 million of cash dividends, equivalent to $12.33 per share. We, as the managers of NMFC, are the company’s largest shareholder and own approximately 12% of NMFC's stock personally and have continued to add shares during open window periods when allowable. Our objective is to continue to manage NMFC safely through the crisis, and to resume our normal operations as the crisis ends.\n\n\nIt is too soon for us to formally report on the quarter ended March 31, 2020, but we believe we can now make the following observations:\n\n\nPortfolio:\n\n\n\nEvery one of NMFC's borrowers paid interest for the first quarter of 2020, except for two. One, representing under 1% of total assets, has paid 50% of its cash interest and has agreed to pay the balance within days. The second, which we still hope may pay interest soon, accounts for just over 1% of our total assets.\n\n\nWe estimate that approximately 1% of our total portfolio, in aggregate, is in the areas of restaurants, gyms, hospitality, leisure, commercial aviation, automotive manufacturing, home building and discretionary consumer products. Less than 2% of our assets are in companies that are exposed to oil and gas. Our largest area of lending has been to software companies, which typically have large installed bases of repeat users, and with on average about 50% of the capital structure junior to our loans at the time our loan was made.\n\n\nOur most impacted loans – about 11% of assets – are in the dental practice, dermato...