New Mountain Finance (NMFC) Prices $35M Conv. Notes Offering

September 27, 2016 7:07 AM EDT

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New Mountain Finance Corporation (NYSE: NMFC) announced the pricing of $35 million in aggregate principal amount of additional 5.00% unsecured convertible notes due 2019 (the “Notes”). In addition, the Company has granted the underwriters of the Notes an option to purchase up to an additional $5.25 million in aggregate principal amount of the Notes. The closing of the offering is subject to customary closing conditions and is expected to take place on September 30, 2016. The Notes constitute a further issuance of, rank equally in right of payment with, and form a single series with the $115 million in aggregate principal amount of the 5.00% unsecured convertible notes due 2019 that the Company issued on June 3, 2014. The Notes were priced at 100.75% of par value, plus accrued interest from June 15, 2016.

The Notes will be convertible into shares of the Company’s common stock based on an initial conversion rate of 63.2794 shares of the Company’s common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $15.80 per share of common stock, representing a 14.4% conversion premium over the last reported sale price of the Company’s common stock on September 26, 2016, which was $13.81 per share. The conversion price for the Notes will not be reduced for quarterly cash dividends paid to holders of the Company's common stock at or below the rate of $0.34 per share, subject to anti-dilution and other adjustments.

The Notes will mature on June 15, 2019, unless previously converted in accordance with their terms. Interest on the Notes will be payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2016. The Notes will be general unsecured obligations of the Company, rank equally in right of payment with the Company’s existing and future senior unsecured debt, and rank senior in right of payment to any potential subordinated debt, should any be issued in the future.

The Company intends to use the net proceeds from the sale of the Notes to repay outstanding indebtedness under its credit facilities. However, through re-borrowing under such credit facilities, the Company intends to make new investments in accordance with its investment objective and strategies and use available capital for other general corporate purposes, including working capital requirements. The Notes have no restrictions related to the type and security of assets in which the Company might invest.

Wells Fargo Securities, LLC, Goldman, Sachs & Co. and Morgan Stanley & Co. LLC are serving as joint book-running managers for the offering.

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