UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended ~~September~~June 30, ~~2017~~2019

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



Commission File Number	Exact name of registrant as specified in its charter, address of principal executive offices, telephone numbers and states or other jurisdictions of incorporation or organization	I.R.S. Employer Identification Number
814-00832	New Mountain Finance Corporation	27-2978010
	787 Seventh Avenue, 48th Floor New York, New York 10019 Telephone: (212) 720-0300 State of Incorporation: Delaware

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	NMFC	New York Stock Exchange
5.75% Notes due 2023	NMFX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



	Large accelerated filer ý		Accelerated filer o
	Non-accelerated filer o~~(Do not check if a smaller reporting company)~~		Smaller reporting company o
	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock.



Description		Shares as of ~~November~~August 7, ~~2017~~2019
Common stock, par value $0.01 per share		~~75,805,019~~87,510,302

Table of Contents

FORM 10-Q FOR THE QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2019

TABLE OF CONTENTS



		PAGE

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	New Mountain Finance Corporation
	Consolidated Statements of Assets and Liabilities as of ~~September~~June 30, ~~2017~~2019 (unaudited) and December 31, ~~2016~~2018 (unaudited)	34
	Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 (unaudited) and ~~September~~June 30, ~~2016~~2018 (unaudited)	45
	Consolidated Statements of Changes in Net Assets for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2019 (unaudited) and ~~September~~June 30, ~~2016~~2018 (unaudited)	56
	Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 (unaudited) and ~~September~~June 30, ~~2016 (unaudited)~~	6
	~~Consolidated Schedule of Investments as of September 30, 2017~~2018 (unaudited)	7
	Consolidated Schedule of Investments as of ~~December 31, 2016~~June 30, 2019 (unaudited)	198
	Consolidated Schedule of Investments as of December 31, 2018	24
	Notes to the Consolidated Financial Statements of New Mountain Finance Corporation (unaudited)	3039

	Report of Independent Registered Public Accounting Firm	6378

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6479
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	91111
Item 4.	Controls and Procedures	92112

PART II. OTHER INFORMATION		93113

Item 1.	Legal Proceedings	93113
Item 1A.	Risk Factors	93113
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	93113
Item 3.	Defaults Upon Senior Securities	93114
Item 4.	Mine Safety Disclosures	94114
Item 5.	Other Information	94114
Item 6.	Exhibits	95115
	Signatures	96116

PART I. FINANCIAL INFORMATION


Item 1.	Financial Statements

New Mountain Finance Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data)

(unaudited)


	September 30, 2017			December 31, 2016			June 30, 2019			December 31, 2018
Assets
Investments at fair value
Non-controlled/non-affiliated investments (cost of $1,480,226 and $1,379,603, respectively)	$	1,501,544		$	1,346,556
Non-controlled/affiliated investments (cost of $175,576 and $54,996, respectively)	173,619			57,440
Controlled investments (cost of $157,902 and $140,579, respectively)	170,880			154,821
Total investments at fair value (cost of $1,813,704 and $1,575,178, respectively)	1,846,043			1,558,817
Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000 respectively)	26,836			29,218
Non-controlled/non-affiliated investments (cost of $2,139,158 and $1,868,785, respectively)							$	2,144,134		$	1,861,323
Non-controlled/affiliated investments (cost of $80,065 and $78,438, respectively)							76,592			77,493
Controlled investments (cost of $399,317 and $382,503, respectively)							422,370			403,137
Total investments at fair value (cost of $2,618,540 and $2,329,726, respectively)							2,643,096			2,341,953
Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)							23,508			23,508
Cash and cash equivalents	39,646			45,928			87,161			49,664
Interest and dividend receivable	27,800			17,833			33,385			30,081
Receivable from unsettled securities sold	3,496			990
Receivable from affiliates	339			346			297			288
Other assets	6,455			2,886			3,869			3,172
Total assets	$	1,950,615		$	1,656,018		$	2,791,316		$	2,448,666
Liabilities
Borrowings
Holdings Credit Facility	$	376,163		$	333,513		$	549,063		$	512,563
Unsecured Notes							453,250			336,750
Convertible Notes	155,440			155,523			201,674			270,301
Unsecured Notes	145,000			90,000
SBA-guaranteed debentures	144,000			121,745			165,000			165,000
NMFC Credit Facility	19,000			10,000			135,000			60,000
Deferred financing costs (net of accumulated amortization of $15,333 and $12,279, respectively)	(12,502		)	(14,041		)
DB Credit Facility							100,000			57,000
Deferred financing costs (net of accumulated amortization of $25,481 and $22,234, respectively)							(16,469		)	(17,515		)
Net borrowings	827,101			696,740			1,587,518			1,384,099
Payable for unsettled securities purchased	67,499			2,740			84,930			20,147
Interest payable							15,501			12,397
Management fee payable	6,939			5,852			8,817			8,392
Incentive fee payable	6,573			5,745			6,987			6,864
Interest payable	6,098			3,172
Deferred tax liability							1,166			1,006
Payable to affiliates	786			136			451			1,021
Deferred tax liability	509			1,034
Other liabilities	3,027			2,037			5,029			8,471
Total liabilities	918,532			717,456			1,710,399			1,442,397
Commitments and contingencies (See Note 9)
Net assets
Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued	—			—			—			—
Common stock, par value $0.01 per share, 100,000,000 shares authorized, 75,805,019 and 69,755,387 shares issued, respectively, and 75,805,019 and 69,717,814 shares outstanding, respectively	758			698
Common stock, par value $0.01 per share, 200,000,000 and 100,000,000 shares authorized, respectively, and 80,610,302 and 76,106,372 shares issued and outstanding, respectively							806			761
Paid in capital in excess of par	1,087,474			1,001,862			1,097,286			1,035,629
Treasury stock at cost, 0 and 37,573 shares held, respectively	—			(460		)
Accumulated undistributed net investment income	2,462			2,073
Accumulated undistributed net realized losses on investments	(76,790		)	(36,947		)
Net unrealized appreciation (depreciation) (net of provision for taxes of $509 and $1,034, respectively)	18,179			(28,664		)
Accumulated overdistributed earnings							(17,175		)	(30,121		)
Total net assets	$	1,032,083		$	938,562		$	1,080,917		$	1,006,269
Total liabilities and net assets	$	1,950,615		$	1,656,018		$	2,791,316		$	2,448,666
Number of shares outstanding	75,805,019			69,717,814			80,610,302			76,106,372
Net asset value per share	$	13.61		$	13.46		$	13.41		$	13.22

New Mountain Finance Corporation

Consolidated Statements of Operations

(in thousands, except shares and per share data)

(unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Investment income
From non-controlled/non-affiliated investments:
Interest income	$	38,511		$	34,735		$	107,905		$	106,743		$	48,018		$	38,510		$	92,475		$	73,946
Dividend income	—			83			159			175			—			—			—			486
Non-cash dividend income	59			—			72			—			2,069			1,439			4,043			2,763
Other income	1,196			2,557			5,545			4,776			1,841			1,013			4,095			3,881
From non-controlled/affiliated investments:
Interest income	718			720			2,077			3,929			1,033			210			2,037			312
Dividend income	816			1,061			2,662			2,868			812			791			1,538			1,636
Non-cash dividend income	3,994			—			8,625			—			301			4,017			592			8,026
Other income	294			284			888			902			301			912			592			1,214
From controlled investments:
Interest income	409			462			1,293			1,447			2,584			1,370			5,047			2,571
Dividend income	3,659			1,151			11,739			1,151			7,265			4,591			15,722			8,830
Non-cash dividend income	1,342			768			3,016			2,229			2,128			1,508			4,173			2,962
Other income	238			13			581			80			113			237			342			860
Total investment income	51,236			41,834			144,562			124,300			66,465			54,598			130,656			107,487
Expenses
Incentive fee	6,573			5,432			18,430			16,266			6,987			6,430			13,850			12,864
Management fee	8,422			6,883			24,311			20,537			11,640			9,301			22,615			17,993
Interest and other financing expenses	9,509			7,171			26,930			20,544			20,719			12,824			39,865			24,114
Professional fees	819			723			2,391			2,461			886			708			1,652			1,402
Administrative expenses	652			586			2,022			2,054			1,049			822			2,144			1,761
Other general and administrative expenses	346			390			1,214			1,206			398			518			810			928
Total expenses	26,321			21,185			75,298			63,068			41,679			30,603			80,936			59,062
Less: management and incentive fees waived (See Note 5)	(1,483		)	(1,102		)	(6,124		)	(3,662		)
Less: management fees waived (See Note 5)													(2,823		)	(1,495		)	(5,356		)	(2,817		)
Less: expenses waived and reimbursed (See Note 5)	—			—			(474		)	(347		)	(335		)	(276		)	(335		)	(276		)
Net expenses	24,838			20,083			68,700			59,059			38,521			28,832			75,245			55,969
Net investment income before income taxes	26,398			21,751			75,862			65,241			27,944			25,766			55,411			51,518
Income tax expense	106			22			341			113			(4		)	45			13			61
Net investment income	26,292			21,729			75,521			65,128			27,948			25,721			55,398			51,457
Net realized (losses) gains:
Net realized gains (losses):
Non-controlled/non-affiliated investments	(14,216		)	1,150			(39,843		)	2,191			47			(6,609		)	90			(6,403		)
Controlled investments													5			—			8			—
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments	19,755			3,837			54,365			2,955			2,677			(14,500		)	12,440			(18,021		)
Non-controlled/affiliated investments	(3,807		)	109			(4,401		)	84			(1,637		)	8,270			(2,528		)	10,079
Controlled investments	(1,305		)	(800		)	(1,264		)	7,677			(5,025		)	11,317			2,417			10,861
Securities purchased under collateralized agreements to resell	(1,549		)	(957		)	(2,382		)	(1,031		)	—			—			—			(12		)
(Provision) benefit for taxes	(394		)	11			525			819
Provision for taxes													(270		)	(1,066		)	(160		)	(984		)
Net realized and unrealized gains (losses)	(1,516		)	3,350			7,000			12,695			(4,203		)	(2,588		)	12,267			(4,480		)
Net increase in net assets resulting from operations	$	24,776		$	25,079		$	82,521		$	77,823		$	23,745		$	23,133		$	67,665		$	46,977
Basic earnings per share	$	0.33		$	0.39		$	1.12		$	1.22		$	0.29		$	0.30		$	0.85		$	0.62
Weighted average shares of common stock outstanding - basic (See Note 11)	75,688,429			63,758,062			73,618,794			63,843,730			80,522,426			75,938,857			79,495,737			75,936,986
Diluted earnings per share	$	0.31		$	0.37		$	1.04		$	1.14		$	0.27		$	0.29		$	0.76		$	0.58
Weighted average shares of common stock outstanding - diluted (See Note 11)	85,512,556			71,145,932			83,442,921			71,158,044			97,693,499			85,762,984			96,780,587			85,761,113
Distributions declared and paid per share	$	0.34		$	0.34		$	1.02		$	1.02		$	0.34		$	0.34		$	0.68		$	0.68

New Mountain Finance Corporation

Consolidated Statements of Changes in Net Assets

(in thousands, except shares and per share data)

(unaudited)


	Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Increase (decrease) in net assets resulting from operations:
Net investment income	$	75,521		$	65,128		$	27,948		$	25,721		$	55,398		$	51,457
Net realized (losses) gains on investments	(39,843		)	2,191
Net change in unrealized appreciation (depreciation) of investments	48,700			10,716
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell	(2,382		)	(1,031		)
Benefit for taxes	525			819
Net realized gains (losses) on investments							52			(6,609		)	98			(6,403		)
Net change in unrealized (depreciation) appreciation of investments							(3,985		)	5,087			12,329			2,919
Net change in unrealized depreciation of securities purchased under collateralized agreements to resell							—			—			—			(12		)
Provision for taxes							(270		)	(1,066		)	(160		)	(984		)
Net increase in net assets resulting from operations	82,521			77,823			23,745			23,133			67,665			46,977
Capital transactions
Net proceeds from shares sold	81,478			—			—			—			59,297			—
Deferred offering costs	(172		)	38			—			—			(229		)	—
Distributions declared to stockholders from net investment income	(75,132		)	(65,095		)	(27,377		)	(25,818		)	(54,719		)	(51,636		)
Reinvestment of distributions	4,907			1,486			1,270			2,330			2,634			2,330
Repurchase of shares under repurchase program	—			(2,948		)
Other	(81		)	—
Total net increase (decrease) in net assets resulting from capital transactions	11,000			(66,519		)	(26,107		)	(23,488		)	6,983			(49,306		)
Net increase in net assets	93,521			11,304
Net increase (decrease) in net assets							(2,362		)	(355		)	74,648			(2,329		)
Net assets at the beginning of the period	938,562			836,908			1,083,279			1,033,001			1,006,269			1,034,975
Net assets at the end of the period	$	1,032,083		$	848,212		$	1,080,917		$	1,032,646		$	1,080,917		$	1,032,646

Capital share activity
Shares sold	5,750,000			—			—			—			4,312,500			—
Shares issued from the reinvestment of distributions	299,632			—			90,872			171,279			191,430			171,279
Shares reissued from repurchase program in connection with the reinvestment of distributions	37,573			107,970
Shares repurchased under repurchase program	—			(248,499		)
Net increase (decrease) in shares outstanding	6,087,205			(140,529		)
Net increase in shares outstanding							90,872			171,279			4,503,930			171,279

New Mountain Finance Corporation

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Nine Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018
Cash flows from operating activities
Net increase in net assets resulting from operations	$	82,521		$	77,823		$	67,665		$	46,977
Adjustments to reconcile net (increase) decrease in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized losses (gains) on investments	39,843			(2,191		)
Net change in unrealized (appreciation) depreciation of investments	(48,700		)	(10,716		)
Net change in unrealized depreciation (appreciation) of securities purchased under collateralized agreements to resell	2,382			1,031
Net realized (gains) losses on investments							(98		)	6,403
Net change in unrealized appreciation of investments							(12,329		)	(2,919		)
Net change in unrealized depreciation of securities purchased under collateralized agreements to resell							—			12
Amortization of purchase discount	(6,458		)	(2,342		)	(2,205		)	(2,592		)
Amortization of deferred financing costs	3,054			2,446			3,247			2,651
Amortization of premium on Convertible Notes	(83		)	—			(57		)	(55		)
Non-cash investment income	(6,236		)	(5,101		)	(14,274		)	(8,559		)
(Increase) decrease in operating assets:
Purchase of investments and delayed draw facilities	(810,119		)	(336,310		)	(341,402		)	(549,417		)
Proceeds from sales and paydowns of investments	542,563			352,607			74,268			296,835
Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities	339			86			88			588
Cash paid for purchase of drawn portion of revolving credit facilities							(338		)	(11,631		)
Cash paid on drawn revolvers	(11,387		)	(10,899		)	(13,181		)	(11,004		)
Cash repayments on drawn revolvers	12,929			8,111			8,328			9,938
Interest and dividend receivable	(9,967		)	(2,822		)	(3,304		)	(10,553		)
Receivable from unsettled securities sold	(2,506		)	—
Receivable from affiliates	7			(485		)	(9		)	(609		)
Other assets	(2,954		)	(299		)	(802		)	4,597
Increase (decrease) in operating liabilities:
Payable for unsettled securities purchased	64,759			40,249			64,783			29,903
Interest payable							3,104			1,992
Management fee payable	1,087			315			425			15,175
Incentive fee payable	828			(190		)	123			12,864
Interest payable	2,926			2,027
Deferred tax liability							160			984
Payable to affiliates	650			3			(570		)	1,625
Deferred tax liability	(525		)	(819		)
Other liabilities	585			311			(3,360		)	8,469
Net cash flows (used in) provided by operating activities	(144,462		)	112,835
Net cash flows used in operating activities							(169,738		)	(158,326		)
Cash flows from financing activities
Net proceeds from shares sold	81,478			—			59,297			—
Distributions paid	(70,225		)	(63,609		)	(52,085		)	(49,306		)
Offering costs paid	(441		)	(155		)	(380		)	(40		)
Proceeds from Holdings Credit Facility	435,750			128,500			119,500			152,500
Repayment of Holdings Credit Facility	(393,100		)	(238,900		)	(83,000		)	(74,400		)
Proceeds from Convertible Notes	—			40,552			86,681			—
Repayments from Convertible Notes							(155,250		)	—
Proceeds from Unsecured Notes	55,000			90,000			116,500			90,000
Proceeds from SBA-guaranteed debentures	22,255			4,000			—			13,000
Proceeds from NMFC Credit Facility	251,100			156,500			245,000			120,000
Repayment of NMFC Credit Facility	(242,100		)	(204,000		)	(170,000		)	(92,500		)
Other	(81		)	—
Proceeds from DB Credit Facility							95,000			—
Repayment of DB Credit Facility							(52,000		)	—
Deferred financing costs paid	(1,456		)	(3,083		)	(2,028		)	(1,916		)
Repurchase of shares under repurchase program	—			(2,948		)
Net cash flows provided by (used in) financing activities	138,180			(93,143		)
Net (decrease) increase in cash and cash equivalents	(6,282		)	19,692
Net cash flows provided by financing activities							207,235			157,338
Net increase (decrease) in cash and cash equivalents							37,497			(988		)
Cash and cash equivalents at the beginning of the period	45,928			30,102			49,664			34,936
Cash and cash equivalents at the end of the period	$	39,646		$	49,794		$	87,161		$	33,948
Supplemental disclosure of cash flow information
Cash interest paid	$	20,064		$	15,975		$	34,452		$	18,871
Income taxes paid	175			11			10			216
Non-cash operating activities:
Non-cash activity on investments	$	12,858		$	167		$	—		$	1,346
Non-cash financing activities:
Value of shares issued in connection with the distribution reinvestment plan	$	4,347		$	—		$	2,634		$	2,330
Value of shares reissued from repurchase program in connection with the distribution reinvestment plan	560			1,486
Accrual for offering costs	944			576			40			904
Accrual for deferred financing costs	158			371			336			170

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
Non-Controlled/Non-Affiliated Investments
Funded Debt Investments - Luxembourg
Pinnacle Holdco S.à.r.l. / Pinnacle (US) Acquisition Co Limited**
Software First lien (2) 6.84% (L + 3.50% + 2.00% PIK/Q)* 7/30/2019 $ 2,984
$ 2,616
$ 2,955

First lien (3) 6.84% (L + 3.50% + 2.00% PIK/Q)* 7/30/2019 1,719
1,515
1,702

Second lien (2) 10.58% (L + 9.25%/Q) 7/30/2020 24,630
24,381
23,275

Second lien (3) 10.58% (L + 9.25%/Q) 7/30/2020 8,204
8,338
7,753

37,537
36,850
35,685
3.46 %
Total Funded Debt Investments - Luxembourg $ 37,537
$ 36,850
$ 35,685
3.46 %
Funded Debt Investments - Netherlands
Eiger Acquisition B.V. (Eiger Co-Borrower, LLC)**
Software First lien (2) 6.52% (L + 5.25%/Q) 2/18/2022 $ 14,274
$ 14,282
$ 14,372

Second lien (3) 10.40% (L + 9.13%/Q) 2/17/2023 29,227
28,689
29,080

43,501
42,971
43,452
4.21 %
Total Funded Debt Investments - Netherlands $ 43,501
$ 42,971
$ 43,452
4.21 %
Funded Debt Investments - United Kingdom
Air Newco LLC**
Software Second lien (3) 10.81% (L + 9.50%/Q) 1/31/2023 $ 40,000
$ 38,998
$ 39,000
3.78 %
Shine Acquisition Co. S.à.r.l. / Boing US Holdco Inc.**
Consumer Services Second lien (3) 8.73% (L+7.50%/M) 10/3/2025 40,353
40,050
40,050
3.88 %
Total Funded Debt Investments - United Kingdom $ 80,353
$ 79,048
$ 79,050
7.66 %
Funded Debt Investments - United States
AmWINS Group, Inc.
Business Services Second lien (3) 7.99% (L + 6.75%/M) 1/25/2025 $ 57,000
$ 56,800
$ 58,378
5.66 %
DigiCert Holdings, Inc.
Business Services First lien (2) 6.24% (L + 5.00%/M) 10/21/2021 34,374
33,873
34,589

Second lien (3) 9.24% (L + 8.00%/M) 10/31/2025 20,176
20,076
20,403

54,550
53,949
54,992
5.33 %
Alegeus Technologies, LLC
Healthcare Services Second lien (3)(10) 9.83% (L + 8.50%/Q) 10/30/2023 23,500
23,500
23,500

Second lien (4)(10) 9.83% (L + 8.50%/Q) 10/30/2023 22,500
22,500
22,500

46,000
46,000
46,000
4.46 %
Salient CRGT Inc.
Federal Services First lien (2) 6.99% (L + 5.75%/M) 2/28/2022 41,766
41,258
41,662
4.04 %
Severin Acquisition, LLC
Software Second lien (4)(10) 9.99% (L + 8.75%/M) 7/29/2022 15,000
14,887
15,000

Second lien (3)(10) 9.99% (L + 8.75%/M) 7/29/2022 14,518
14,354
14,518

Second lien (4)(10) 9.99% (L + 8.75%/M) 7/29/2022 4,154
4,122
4,154

Second lien (4)(10) 10.49% (L + 9.25%/M) 7/29/2022 3,273
3,246
3,273

Second lien (3)(10) 10.24% (L + 9.00%/M) 7/29/2022 2,361
2,340
2,361

Second lien (3)(10) 10.49% (L + 9.25%/M) 7/29/2022 1,825
1,809
1,825

Second lien (4)(10) 10.49% (L + 9.25%/M) 7/29/2022 300
297
300

41,431
41,055
41,431
4.01 %

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~September 30, 2017~~

~~(in thousands, except shares)~~

~~(unaudited)~~


Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate(9)	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets		Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
PetVet Care Centers LLC
Non-Controlled/Non-Affiliated Investments
Funded Debt Investments - Canada
Dentalcorp Health Services ULC (fka Dentalcorp Perfect Smile ULC)**
Healthcare Services												Second lien (3)	9.90% (L + 7.50%/M)	6/1/2018	6/8/2026	$	28,613	$	28,377	$	28,040
												Second lien (8)	9.90% (L + 7.50%/M)	6/1/2018	6/8/2026	7,500		7,442		7,350
																36,113		35,819		35,390		3.27	%
Wolfpack IP Co.**
Software												First lien (2)	8.90% (L + 6.50%/M)	6/14/2019	6/13/2025	9,091		9,001		9,000		0.83	%
Total Funded Debt Investments - Canada																$	45,204	$	44,820	$	44,390	4.10	%
Funded Debt Investments - United Kingdom
Shine Acquisition Co. S.à.r.l / Boing US Holdco Inc.**
Consumer Services	First lien (2)(10)	7.33% (L + 6.00%/Q)	6/8/2023	$	34,613	$	34,491	$	34,486			Second lien (2)	9.92% (L + 7.50%/M)	9/25/2017	10/3/2025	$	37,853	$	37,659	$	37,664
	First lien (3)(10)(11) - Drawn	7.32% (L + 6.00%/Q)	6/8/2023	5,813		5,792		5,792				Second lien (8)	9.92% (L + 7.50%/M)	9/25/2017	10/3/2025	6,000		5,969		5,970
	First lien (3)(10)(11) - Drawn	7.27% (L + 6.00%/Q)	6/8/2023	605		603		603								43,853		43,628		43,634		4.04	%
Air Newco LLC**
Software												First lien (2)	7.16% (L + 4.75%/M)	5/25/2018	5/31/2024	20,024		19,982		20,024		1.85	%
Total Funded Debt Investments - United Kingdom																$	63,877	$	63,610	$	63,658	5.89	%
Funded Debt Investments - United States
Benevis Holding Corp.
Healthcare Services												First lien (2)(9)	8.90% (L + 6.32%/Q)	3/15/2018	3/15/2024	$	63,051	$	63,051	$	63,051
				41,031		40,886		40,881		3.96	%	First lien (8)(9)	8.90% (L + 6.32%/Q)	3/15/2018	3/15/2024	15,470		15,470		15,470
Tenawa Resource Holdings LLC (13)
Tenawa Resource Management LLC
Energy	First lien (3)(10)	10.50% (Base + 8.00%/Q)	5/12/2019	39,900		39,831		39,900		3.87	%
Frontline Technologies Group Holdings, LLC
Education	First lien (2)	7.82% (L+ 6.50%Q)	9/18/2023	16,792		16,667		16,666
												First lien (3)(9)(10) - Drawn	8.91% (L + 6.32%/Q)	3/29/2019	3/15/2024	626		626		626
																79,147		79,147		79,147		7.32	%
Integro Parent Inc.
Business Services												First lien (2)(9)	8.24% (L + 5.75%/Q)	10/9/2015	10/31/2022	50,981		50,723		50,980
	First lien (4)	7.82% (L+ 6.50%Q)	9/18/2023	22,670		22,501		22,500				Second lien (8)(9)	11.76% (L + 9.25%/Q)	10/9/2015	10/30/2023	10,000		9,936		10,000
				39,462		39,168		39,166		3.79	%					60,981		60,659		60,980		5.64	%
Kronos Incorporated
Software	Second lien (2)	9.56% (L + 8.25%/Q)	11/1/2024	36,000		35,495		37,233		3.61	%	Second lien (2)	10.83% (L + 8.25%/Q)	10/26/2012	11/1/2024	46,000		45,587		47,629
VetCor Professional Practices LLC
Consumer Services	First lien (4)(10)	7.33% (L + 6.00%/Q)	4/20/2021	19,160		19,036		19,160
	First lien (2)(10)	7.33% (L + 6.00%/Q)	4/20/2021	7,734		7,615		7,733				Second lien (8)	10.83% (L + 8.25%/Q)	10/26/2012	11/1/2024	11,147		11,147		11,541
	First lien (3)(10)(11) - Drawn	7.33% (L + 6.00%/Q)	4/20/2021	2,721		2,669		2,721								57,147		56,734		59,170		5.47	%
Nomad Buyer, Inc.
Healthcare Services												First lien (2)	7.41% (L + 5.00%/M)	8/3/2018	8/1/2025	58,730		56,975		58,436		5.41	%
PhyNet Dermatology LLC
Healthcare Services												First lien (2)(9)	7.90% (L + 5.50%/M)	9/17/2018	8/16/2024	50,624		50,173		50,117
	First lien (4)(10)	7.33% (L + 6.00%/Q)	4/20/2021	2,657		2,638		2,657				First lien (3)(9)(10) - Drawn	7.90% (L + 5.50%/M)	9/17/2018	8/16/2024	6,970		6,937		6,935
	First lien (2)(10)	7.33% (L + 6.00%/Q)	4/20/2021	1,636		1,608		1,636								57,594		57,110		57,052		5.28	%
CentralSquare Technologies, LLC
Software												Second lien (3)	9.90% (L + 7.50%/M)	8/15/2018	8/31/2026	47,839		47,268		47,360
	First lien (4)(10)	7.33% (L + 6.00%/Q)	4/20/2021	496		488		496				Second lien (8)	9.90% (L + 7.50%/M)	8/15/2018	8/31/2026	7,500		7,411		7,425
	First lien (3)(10)(11) - Drawn	7.33% (L + 6.00%/Q)	4/20/2021	180		178		180								55,339		54,679		54,785		5.07	%
				34,584		34,232		34,583		3.35	%
Weston Solutions, Inc.
Business Services	First lien (2)(10)	10.74% (L + 9.50%/M)	12/31/2020	33,214		33,214		34,211		3.31	%
Valet Waste Holdings, Inc.
Business Services	First lien (2)(10)	8.24% (L + 7.00%/M)	9/24/2021	29,400		29,138		29,400
	First lien (2)(10)	8.24% (L + 7.00%/M)	9/24/2021	3,741		3,705		3,741
				33,141		32,843		33,141		3.21	%
Evo Payments International, LLC
Business Services	Second lien (2)	10.24% (L + 9.00%/M)	12/23/2024	25,000		24,821		25,218
	Second lien (3)	10.24% (L + 9.00%/M)	12/23/2024	5,000		5,052		5,044
				30,000		29,873		30,262		2.93	%
Redbox Automated Retail, LLC
Consumer Services	First lien (2)	8.74% (L + 7.50%/M)	9/27/2021	29,258		28,963		29,441		2.85	%
Integro Parent Inc.
Business Services	First lien (2)	7.06% (L + 5.75%/Q)	10/31/2022	19,656		19,353		19,607
	Second lien (3)	10.56% (L + 9.25%/Q)	10/30/2023	10,000		9,917		9,800
				29,656		29,270		29,407		2.85	%
Ansira Holdings, Inc.
Business Services	First lien (2)	7.83% (L + 6.50%/Q)	12/20/2022	25,985		25,869		25,920
	First lien (3)(11) - Drawn	7.82% (L + 6.50%/Q)	12/20/2022	2,113		2,102		2,107
				28,098		27,971		28,027		2.72	%
Wirepath LLC
Dealer Tire, LLC
Distribution & Logistics	First lien (2)	6.56% (L + 5.25%/Q)	8/5/2024	27,800		27,663		27,948		2.71	%	First lien (2)	7.87% (L + 5.50%/M)	12/4/2018	12/12/2025	53,649		52,386		53,716		4.97	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
TW-NHME Holdings Corp. (20)
National HME, Inc.
Healthcare Services Second lien (4)(10) 10.59% (L + 9.25%/Q) 7/14/2022 $ 21,500
$ 21,292
$ 21,690

Second lien (3)(10) 10.59% (L + 9.25%/Q) 7/14/2022 5,800
5,734
5,852

27,300
27,026
27,542
2.67 %
Trader Interactive, LLC
Business Services First lien (2)(10) 7.48% (L + 6.25%/M) 6/17/2024 27,259
27,061
27,054
2.62 %
Marketo, Inc.
Software First lien (3)(10) 10.83% (L + 9.50%/Q) 8/16/2021 26,820
26,491
26,820
2.60 %
nThrive, Inc. (fka Precyse Acquisition Corp.)
Healthcare Services Second lien (2)(10) 10.99% (L + 9.75%/M) 4/20/2023 25,000
24,628
24,808
2.40 %
Keystone Acquisition Corp.
Healthcare Services First lien (2) 6.58% (L + 5.25%/Q) 5/1/2024 20,000
19,808
20,017

Second lien (3) 10.58% (L + 9.25%/Q) 5/1/2025 4,500
4,456
4,469

24,500
24,264
24,486
2.37 %
iPipeline, Inc. (Internet Pipeline, Inc.)
Software First lien (4)(10) 8.49% (L + 7.25%/M) 8/4/2022 17,589
17,458
17,589

First lien (4)(10) 7.48% (L + 6.25%/M) 8/4/2022 4,589
4,567
4,566

First lien (2)(10) 7.48% (L + 6.25%/M) 8/4/2022 1,164
1,158
1,158

First lien (4)(10) 7.48% (L + 6.25%/M) 8/4/2022 512
510
509

23,854
23,693
23,822
2.31 %
AAC Holding Corp.
Education First lien (2)(10) 9.49% (L + 8.25%/M) 9/30/2020 23,350
23,123
23,350
2.26 %
TWDiamondback Holdings Corp. (15)
Diamondback Drugs of Delaware, L.L.C. (TWDiamondback II Holdings LLC)
Distribution & Logistics First lien (4)(10) 10.30% (L + 8.75%/Q) 11/19/2019 19,895
19,895
20,094

First lien (3)(10) 10.09% (L + 8.75%/Q) 11/19/2019 2,158
2,158
2,180

First lien (4)(10) 10.09% (L + 8.75%/Q) 11/19/2019 605
605
611

22,658
22,658
22,885
2.22 %
BackOffice Associates Holdings, L.L.C.
Business Services First lien (2)(10) 7.74% (L + 6.50%/M) 8/25/2023 22,927
22,729
22,726
2.20 %
EN Engineering, LLC
Business Services First lien (2)(10) 7.33% (L + 6.00%/Q) 6/30/2021 20,946
20,805
20,946

First lien (2)(10) 7.33% (L + 6.00%/Q) 6/30/2021 1,211
1,202
1,211

22,157
22,007
22,157
2.15 %
DiversiTech Holdings, Inc.
Distribution & Logistics Second lien (3) 8.84% (L + 7.50%/Q) 6/2/2025 19,500
19,310
19,817
1.92 %
DCA Investment Holding, LLC
Healthcare Services First lien (2)(10) 6.58% (L + 5.25%/Q) 7/2/2021 17,498
17,381
17,498

First lien (3)(10)(11) - Drawn 8.50% (P + 4.25%/Q) 7/2/2021 1,025
1,015
1,025

18,523
18,396
18,523
1.79 %
KeyPoint Government Solutions, Inc.
Federal Services First lien (2)(10) 7.30% (L + 6.00%/Q) 4/18/2024 18,652
18,475
18,465
1.79 %
AgKnowledge Holdings Company, Inc.
Business Services Second lien (2)(10) 9.49% (L + 8.25%/M) 7/23/2020 18,500
18,401
18,315
1.77 %
VF Holding Corp.
Software Second lien (3)(10) 10.24% (L + 9.00%/M) 6/28/2024 17,086
17,404
17,598
1.71 %



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Salient CRGT Inc.
Federal Services	First lien (2)	8.40% (L + 6.00%/M)	1/6/2015	2/28/2022	$	39,873	$	39,550	$	38,279
	First lien (8)	8.40% (L + 6.00%/M)	6/6/2019	2/28/2022	13,625		13,080		13,080
					53,498		52,630		51,359		4.75	%
NM GRC Holdco, LLC
Business Services	First lien (2)(9)	8.33% (L + 6.00%/Q)	2/9/2018	2/9/2024	38,541		38,385		38,541
	First lien (2)(9)(10) - Drawn	8.33% (L + 6.00%/Q)	2/9/2018	2/9/2024	10,712		10,665		10,712
					49,253		49,050		49,253		4.56	%
Associations, Inc.
Business Services	First lien (2)(9)	9.60% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	36,439		36,243		36,211
	First lien (8)(9)	9.60% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	5,038		5,010		5,006
	First lien (3)(9)(10) - Drawn	9.59% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	5,943		5,910		5,906
					47,420		47,163		47,123		4.36	%
Brave Parent Holdings, Inc.
Software	Second lien (5)	10.08% (L + 7.50%/Q)	4/17/2018	4/17/2026	22,500		22,399		22,416
	Second lien (2)	10.08% (L + 7.50%/Q)	4/17/2018	4/17/2026	16,624		16,471		16,562
	Second lien (8)	10.08% (L + 7.50%/Q)	4/17/2018	4/17/2026	6,000		5,945		5,978
					45,124		44,815		44,956		4.16	%
Quest Software US Holdings Inc.
Software	Second lien (2)	10.83% (L + 8.25%/Q)	5/17/2018	5/18/2026	43,697		43,300		43,005		3.98	%
Frontline Technologies Group Holdings, LLC
Education	First lien (4)(9)	8.83% (L + 6.50%/Q)	9/18/2017	9/18/2023	22,273		22,148		22,273
	First lien (2)(9)	8.83% (L + 6.50%/Q)	9/18/2017	9/18/2023	16,499		16,404		16,499
	First lien (3)(9)(10) - Drawn	8.83% (L + 6.50%/Q)	9/18/2017	9/18/2023	1,717		1,705		1,717
					40,489		40,257		40,489		3.75	%
Symplr Software Intermediate Holdings, Inc. (23)
Symplr Software, Inc. (fka Caliper Software, Inc.)
Healthcare Information Technology	First lien (2)(9)	8.33% (L + 6.00%/Q)	11/30/2018	11/28/2025	25,690		25,504		25,497
	First lien (4)(9)	8.33% (L + 6.00%/Q)	11/30/2018	11/28/2025	14,925		14,820		14,813
					40,615		40,324		40,310		3.73	%
iCIMS, Inc.
Software	First lien (8)(9)	8.90% (L + 6.50%/M)	9/12/2018	9/12/2024	31,636		31,353		31,320
	First lien (8)(9)	8.90% (L + 6.50%/M)	6/14/2019	9/12/2024	8,667		8,580		8,580
					40,303		39,933		39,900		3.69	%
Tenawa Resource Holdings LLC (13)
Tenawa Resource Management LLC
Energy	First lien (3)(9)	10.90% (Base + 8.50%/Q)	5/12/2014	10/30/2024	39,300		39,246		39,300		3.64	%
Trader Interactive, LLC
Business Services	First lien (2)(9)	8.90% (L + 6.50%/M)	6/15/2017	6/17/2024	32,095		31,924		32,095
	First lien (8)(9)	8.90% (L + 6.50%/M)	6/15/2017	6/17/2024	4,975		4,948		4,975
					37,070		36,872		37,070		3.43	%
Peraton Holding Corp. (fka MHVC Acquisition Corp.)
Federal Services	First lien (2)	7.66% (L + 5.25%/M)	4/25/2017	4/29/2024	37,096		36,957		36,864		3.41	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
ProQuest LLC
Business Services Second lien (3) 10.24% (L + 9.00%/M) 12/15/2022 $ 17,220
$ 16,942
$ 17,220
1.67 %
TIBCO Software Inc.
Software Subordinated (3) 11.38%/S 12/1/2021 15,000
14,700
16,463
1.60 %
American Tire Distributors, Inc.
Distribution & Logistics Subordinated (3) 10.25%/S 3/1/2022 15,520
15,257
16,261
1.58 %
Hill International, Inc.**
Business Services First lien (2)(10) 6.99% (L + 5.75%/M) 6/21/2023 15,761
15,685
15,682
1.52 %
Netsmart Inc. / Netsmart Technologies, Inc.
Healthcare Information Technology Second lien (2) 10.82% (L + 9.50%/Q) 10/19/2023 15,000
14,676
15,075
1.46 %
Transcendia Holdings, Inc.
Packaging Second lien (3) 9.24% (L + 8.00%/M) 5/30/2025 14,500
14,304
14,391
1.39 %
SW Holdings, LLC
Business Services Second lien (4)(10) 10.08% (L + 8.75%/Q) 12/30/2021 14,265
14,162
14,368
1.39 %
Amerijet Holdings, Inc.
Distribution & Logistics First lien (4)(10) 9.24% (L + 8.00%/M) 7/15/2021 12,054
11,982
12,120

First lien (4)(10) 9.24% (L + 8.00%/M) 7/15/2021 2,009
1,997
2,020

14,063
13,979
14,140
1.37 %
Poseidon Intermediate, LLC
Software Second lien (2)(10) 9.81% (L + 8.50%/Q) 8/15/2023 13,000
12,844
13,130
1.27 %
Ministry Brands, LLC
Software First lien (3)(10) 6.24% (L + 5.00%/M) 12/2/2022 3,000
2,987
3,028

Second lien (3)(10) 10.49% (L + 9.25%/M) 6/2/2023 7,840
7,787
7,841

Second lien (3)(10) 10.49% (L + 9.25%/M) 6/2/2023 2,160
2,145
2,160

13,000
12,919
13,029
1.26 %
Peraton Holding Corp. (fka MHVC Acquisition Corp.)
Federal Services First lien (2) 6.49% (L + 5.25%/M) 4/29/2024 12,569
12,509
12,662
1.23 %
FR Arsenal Holdings II Corp.
Business Services First lien (2)(10) 8.63% (L + 7.25%/Q) 9/8/2022 12,388
12,279
12,388
1.20 %
Xactly Corporation
Software First lien (4)(10) 8.49% (L + 7.25%/M) 7/29/2022 11,600
11,487
11,484
1.11 %
Zywave, Inc.
Software Second lien (4)(10) 10.31% (L + 9.00%/Q) 11/17/2023 11,000
10,925
11,026
1.07 %
QC McKissock Investment, LLC (14)
McKissock, LLC
Education First lien (2)(10) 7.58% (L + 6.25%/Q) 8/5/2021 6,431
6,401
6,431

First lien (2)(10) 7.58% (L + 6.25%/Q) 8/5/2021 3,066
3,053
3,066

First lien (2)(10) 7.58% (L + 6.25%/Q) 8/5/2021 989
985
989

10,486
10,439
10,486
1.02 %
Masergy Holdings, Inc.
Business Services Second lien (2) 9.83% (L + 8.50%/Q) 12/16/2024 10,000
9,942
10,125
0.98 %
Quest Software US Holdings Inc.
Software First lien (2) 7.24% (L + 6.00%/M) 10/31/2022 9,924
9,794
10,069
0.98 %
PowerPlan Holdings, Inc.
Software Second lien (2)(10) 10.24% (L + 9.00%/M) 2/23/2023 10,000
9,924
10,000
0.97 %
Cvent, Inc.
Software Second lien (3)(10) 11.24% (L + 10.00%/M) 5/29/2024 10,000
9,861
9,953
0.96 %



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
TDG Group Holding Company
Consumer Services	First lien (2)(9)	7.83% (L + 5.50%/Q)	5/22/2018	5/31/2024	$	24,986	$	24,880	$	24,986
	First lien (8)(9)	7.83% (L + 5.50%/Q)	5/22/2018	5/31/2024	4,975		4,954		4,975
	First lien (2)(9)	7.83% (L + 5.50%/Q)	5/22/2018	5/31/2024	3,337		3,323		3,337
	First lien (3)(9)(10) - Drawn	7.94% (L + 5.50%/Q)	5/22/2018	5/31/2024	1,387		1,380		1,387
					34,685		34,537		34,685		3.21	%
Geo Parent Corporation
Business Services	First lien (2)	7.83% (L + 5.50%/Q)	12/13/2018	12/19/2025	33,494		33,336		33,452		3.09	%
Apptio, Inc.
Software	First lien (8)(9)	9.67% (L + 7.25%/M)	1/10/2019	1/10/2025	34,076		33,426		33,394		3.09	%
Finalsite Holdings, Inc.
Software	First lien (4)(9)	8.09% (L + 5.50%/Q)	9/28/2018	9/25/2024	22,331		22,181		22,164
	First lien (2)(9)	8.09% (L + 5.50%/Q)	9/28/2018	9/25/2024	11,030		10,955		10,947
					33,361		33,136		33,111		3.06	%
Idera, Inc.
Software	Second lien (4)	11.41% (L + 9.00%/M)	6/27/2019	6/28/2027	22,500		22,331		22,331
	Second lien (2)	11.41% (L + 9.00%/M)	6/27/2019	6/28/2027	9,500		9,429		9,429
					32,000		31,760		31,760		2.94	%
Ansira Holdings, Inc.
Business Services	First lien (8)	8.15% (L + 5.75%/M)	12/19/2016	12/20/2022	28,600		28,511		27,170
	First lien (3)(10) - Drawn	8.16% (L + 5.75%/M)	12/19/2016	12/20/2022	4,767		4,757		4,529
					33,367		33,268		31,699		2.93	%
Navicure, Inc.
Healthcare Services	Second lien (2)	9.90% (L + 7.50%/M)	10/23/2017	10/31/2025	25,970		25,910		25,710
	Second lien (8)	9.90% (L + 7.50%/M)	10/23/2017	10/31/2025	6,000		5,986		5,940
					31,970		31,896		31,650		2.93	%
Keystone Acquisition Corp.
Healthcare Services	First lien (2)	7.58% (L + 5.25%/Q)	5/10/2017	5/1/2024	24,607		24,483		24,084
	Second lien (2)	11.58% (L + 9.25%/Q)	5/10/2017	5/1/2025	4,500		4,463		4,399
					29,107		28,946		28,483		2.64	%
Sovos Brands Intermediate, Inc.
Food & Beverage	First lien (2)	7.20% (L + 5.00%/Q)	11/16/2018	11/20/2025	28,098		27,966		27,817		2.57	%
Confluent Health, LLC
Healthcare Services	First lien (2)	7.40% (L + 5.00%/Q)	6/21/2019	6/24/2026	27,500		27,363		27,363		2.53	%
DCA Investment Holding, LLC
Healthcare Services	First lien (2)(9)	7.58% (L + 5.25%/Q)	7/2/2015	7/2/2021	17,185		17,120		17,185
	First lien (3)(9)(10) - Drawn	7.58% (L + 5.25%/Q)	12/20/2017	7/2/2021	5,572		5,530		5,572
	First lien (2)(9)	7.58% (L + 5.25%/Q)	12/20/2017	7/2/2021	4,205		4,177		4,205
	First lien (3)(9)(10) - Drawn	9.75% (P + 4.25%/Q)	7/2/2015	7/2/2021	342		338		342
					27,304		27,165		27,304		2.53	%
Kaseya Traverse Inc.
Software	First lien (8)(9)	8.94% (L + 5.50% + 1.00% PIK/M)*	5/9/2019	5/2/2025	27,432		27,163		27,157		2.51	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
Idera, Inc.
Software Second lien (4) 10.24% (L + 9.00%/M) 6/27/2025 $ 10,000
$ 9,853
$ 9,913
0.96 %
Pelican Products, Inc.
Business Products Second lien (2) 9.58% (L + 8.25%/Q) 4/9/2021 9,500
9,535
9,500
0.92 %
WD Wolverine Holdings, LLC
Healthcare Services First lien (2) 6.83% (L + 5.50%/Q) 8/16/2022 9,875
9,582
9,474
0.92 %
J.D. Power and Associates
Business Services Second lien (3) 9.83% (L + 8.50%/Q) 9/7/2024 9,333
9,227
9,473
0.92 %
Harley Marine Services, Inc.
Distribution & Logistics Second lien (2) 10.50% (L + 9.25%/M) 12/20/2019 9,000
8,920
8,955
0.87 %
MH Sub I, LLC (Micro Holding Corp.)
Software Second lien (3) 8.82% (L + 7.50%/Q) 9/15/2025 7,000
6,930
6,987
0.67 %
First American Payment Systems, L.P.
Business Services First lien (2) 6.98% (L + 5.75%/M) 1/5/2024 6,906
6,843
6,912
0.67 %
Solera LLC / Solera Finance, Inc.
Software Subordinated (3) 10.50%/S 3/1/2024 5,000
4,785
5,717
0.55 %
Applied Systems, Inc.
Software Second lien (3) 8.32% (L + 7.00%/Q) 9/19/2025 4,923
4,923
5,065
0.49 %
ADG, LLC
Healthcare Services Second lien (3)(10) 10.25% (L + 9.00%/M) 3/28/2024 5,000
4,932
5,047
0.49 %
Vencore, Inc. (fka The SI Organization Inc.)
Federal Services Second lien (3) 10.08% (L + 8.75%/Q) 5/23/2020 4,400
4,345
4,450
0.43 %
Affinity Dental Management, Inc.
Healthcare Services First lien (2) 7.32% (L + 6.00%/Q) 9/15/2023 4,344
4,301
4,301
0.41 %
York Risk Services Holding Corp.
Business Services Subordinated (3) 8.50%/S 10/1/2022 3,000
3,000
2,970
0.29 %
Ensemble S Merger Sub, Inc.
Software Subordinated (3) 9.00%/S 9/30/2023 2,000
1,944
2,083
0.20 %
Education Management Corporation (12)
Education Management II LLC
Education First lien (2) 5.80% (L + 4.50%/Q) 7/2/2020 250
242
106

First lien (3) 5.80% (L + 4.50%/Q) 7/2/2020 141
137
60

First lien (2) 8.80% (L + 7.50%/Q) 7/2/2020 475
433
10

First lien (3) 8.80% (L + 7.50%/Q) 7/2/2020 268
245
6

1,134
1,057
182
0.02 %
Total Funded Debt Investments - United States $ 1,317,688
$ 1,306,942
$ 1,324,012
128.28 %
Total Funded Debt Investments $ 1,479,079
$ 1,465,811
$ 1,482,199
143.61 %
Equity - Hong Kong
Bach Special Limited (Bach Preference Limited)**
Education Preferred shares (3)(22) — — 58,000
$ 5,720
$ 5,720
0.56 %
Total Shares - Hong Kong $ 5,720
$ 5,720
0.56 %
Equity - United States
Tenawa Resource Holdings LLC (13)
QID NGL LLC
Energy Ordinary shares (7)(10) — — 5,290,997
$ 5,291
$ 7,759
0.75 %



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Conservice, LLC
Business Services	First lien (2)(9)	7.58% (L + 5.25%/Q)	1/3/2019	11/29/2024	$	25,438	$	25,319	$	25,311
	First lien (3)(9)(10) - Drawn	7.58% (L + 5.25%/Q)	1/3/2019	11/29/2024	1,074		1,069		1,069
					26,512		26,388		26,380		2.44	%
EN Engineering, LLC
Business Services	First lien (2)(9)	6.83% (L + 4.50%/Q)	7/30/2015	6/30/2021	23,226		23,128		23,226
	First lien (2)(9)	6.83% (L + 4.50%/Q)	7/30/2015	6/30/2021	1,344		1,337		1,344
					24,570		24,465		24,570		2.27	%
AAC Holding Corp.
Education	First lien (2)(9)	10.69% (L + 8.25%/M)	9/30/2015	9/30/2022	24,754		24,650		23,509		2.17	%
iPipeline, Inc. (Internet Pipeline, Inc.)
Software	First lien (4)(9)	7.16% (L + 4.75%/M)	8/4/2015	8/4/2022	17,325		17,237		17,325
	First lien (4)(9)	7.16% (L + 4.75%/M)	6/16/2017	8/4/2022	4,508		4,493		4,508
	First lien (2)(9)	7.16% (L + 4.75%/M)	9/25/2017	8/4/2022	1,144		1,140		1,144
	First lien (4)(9)	7.16% (L + 4.75%/M)	9/25/2017	8/4/2022	503		501		503
					23,480		23,371		23,480		2.17	%
Spring Education Group, Inc. (fka SSH Group Holdings, Inc.)
Education	Second lien (2)	10.83% (L + 8.25%/Q)	7/26/2018	7/30/2026	22,533		22,458		22,477		2.08	%
CRCI Longhorn Holdings, Inc.
Business Services	Second lien (3)	9.66% (L + 7.25%/M)	8/2/2018	8/10/2026	14,349		14,298		14,205
	Second lien (8)	9.66% (L + 7.25%/M)	8/2/2018	8/10/2026	7,500		7,474		7,425
					21,849		21,772		21,630		2.00	%
Avatar Topco, Inc. (22)
EAB Global, Inc.
Education	Second lien (3)	10.13% (L + 7.50%/Q)	11/17/2017	11/17/2025	13,950		13,771		13,811
	Second lien (8)	10.13% (L + 7.50%/Q)	11/17/2017	11/17/2025	7,500		7,404		7,425
					21,450		21,175		21,236		1.96	%
National Mentor Holdings, Inc. (aka Civitas Solutions, Inc.)
Healthcare Services	Second lien (2)	10.91% (L + 8.50%/M)	2/5/2019	3/8/2027	21,051		20,589		20,999		1.94	%
Institutional Shareholder Services, Inc.
Business Services	Second lien (3)	10.83% (L + 8.50%/Q)	3/5/2019	3/5/2027	20,372		20,074		20,321		1.88	%
Help/Systems Holdings, Inc.
Software	Second lien (5)	10.08% (L + 7.75%/Q)	3/23/2018	3/27/2026	20,231		20,141		20,155		1.86	%
DiversiTech Holdings, Inc.
Distribution & Logistics	Second lien (2)	9.83% (L + 7.50%/Q)	5/18/2017	6/2/2025	12,000		11,903		11,835
	Second lien (8)	9.83% (L + 7.50%/Q)	5/18/2017	6/2/2025	7,500		7,439		7,397
					19,500		19,342		19,232		1.78	%
Xactly Corporation
Software	First lien (4)(9)	9.66% (L + 7.25%/M)	7/31/2017	7/29/2022	19,047		18,904		19,047		1.76	%
Integral Ad Science, Inc.
Software	First lien (8)(9)	9.66% (L + 6.00% + 1.25% PIK/M)*	7/19/2018	7/19/2024	18,794		18,632		18,606		1.72	%
FR Arsenal Holdings II Corp.
Business Services	First lien (2)(9)	9.75% (L + 7.25%/Q)	9/29/2016	9/8/2022	18,450		18,326		18,450		1.71	%
The Kleinfelder Group, Inc.
Business Services	First lien (4)(9)	7.12% (L + 4.75%/W)	12/18/2018	11/29/2024	17,413		17,332		17,325		1.60	%
Navex Topco, Inc.
Software	Second lien (2)	9.41% (L + 7.00%/M)	8/9/2018	9/4/2026	16,807		16,728		16,681		1.54	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
TWDiamondback Holdings Corp. (15)
Distribution & Logistics Preferred shares (4)(10) — — 200
$ 2,000
$ 3,142
0.30 %
TW-NHME Holdings Corp. (20)
Healthcare Services Preferred shares (4)(10) — — 100
1,000
1,336

Preferred shares (4)(10) — — 16
158
211

Preferred shares (4)(10) — — 6
68
81

1,226
1,628
0.16 %
Ancora Acquisition LLC
Education Preferred shares (6)(10) — — 372
83
393
0.04 %
Education Management Corporation (12)
Education Preferred shares (2) — — 3,331
200

Preferred shares (3) — — 1,879
113

Ordinary shares (2) — — 2,994,065
100
15

Ordinary shares (3) — — 1,688,976
56
8

469
23
— %
Total Shares - United States $ 9,069
$ 12,945
1.25 %
Total Shares $ 14,789
$ 18,665
1.81 %
Warrants - United States
ASP LCG Holdings, Inc.
Education Warrants (3)(10) — 5/5/2026 622
$ 37
$ 895
0.09 %
Ancora Acquisition LLC
Education Warrants (6)(10) — 8/12/2020 20
—
—
— %
YP Equity Investors, LLC
Media Warrants (5)(10) — 5/8/2022 5
—
—
— %
Total Warrants - United States $ 37
$ 895
0.09 %
Total Funded Investments $ 1,480,637
$ 1,501,759
145.51 %
Unfunded Debt Investments - United States
VetCor Professional Practices LLC
Consumer Services First lien (3)(10)(11) - Undrawn — 4/20/2021 $ 2,520
$ (25 ) $ —

First lien (3)(10)(11) - Undrawn — 2/24/2019 3,291
(66 ) —

5,811
(91 ) —
— %
DCA Investment Holding, LLC
Healthcare Services First lien (3)(10)(11) - Undrawn — 7/2/2021 1,075
(11 ) —
— %
iPipeline, Inc. (Internet Pipeline, Inc.)
Software First lien (3)(10)(11) - Undrawn — 8/4/2021 1,000
(10 ) —
— %
Valet Waste Holdings, Inc.
Business Services First lien (3)(10)(11) - Undrawn — 9/24/2021 3,750
(47 ) —
— %
Marketo, Inc.
Software First lien (3)(10)(11) - Undrawn — 8/16/2021 1,788
(27 ) —
— %
Ministry Brands, LLC
Software First lien (3)(10)(11) - Undrawn — 12/2/2022 1,000
(5 ) —
— %



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
TIBCO Software Inc.
Software	Subordinated (3)	11.38%/S	11/24/2014	12/1/2021	$	15,000	$	14,809	$	15,947	1.48	%
Hill International, Inc.**
Business Services	First lien (2)(9)	8.08% (L + 5.75%/Q)	6/21/2017	6/21/2023	15,484		15,429		15,484		1.43	%
OEConnection LLC
Business Services	Second lien (3)	10.41% (L + 8.00%/M)	11/22/2017	11/22/2025	7,660		7,569		7,583
	Second lien (8)	10.41% (L + 8.00%/M)	11/22/2017	11/22/2025	7,500		7,411		7,425
					15,160		14,980		15,008		1.39	%
Netsmart Inc. / Netsmart Technologies, Inc.
Healthcare Information Technology	Second lien (2)	9.90% (L + 7.50%/M)	4/18/2016	10/19/2023	15,000		14,750		15,000		1.39	%
Transcendia Holdings, Inc.
Packaging	Second lien (8)(9)	10.40% (L + 8.00%/M)	6/28/2017	5/30/2025	14,500		14,337		14,109		1.31	%
BackOffice Associates Holdings, LLC
Business Services	First lien (2)(9)	13.09% (L + 7.50% + 3.00% PIK/Q)*	8/25/2017	8/25/2023	13,280		13,196		12,647
	First lien (3)(9)(10) - Drawn	13.07% (L + 7.50% + 3.00% PIK/Q)*	8/25/2017	8/25/2023	829		822		790
					14,109		14,018		13,437		1.24	%
Alegeus Technologies Holding Corp.
Healthcare Services	First lien (8)(9)	8.84% (L + 6.25%/Q)	9/5/2018	9/5/2024	13,444		13,383		13,376		1.24	%
Castle Management Borrower LLC
Business Services	First lien (2)(9)	8.77% (L + 6.25%/Q)	5/31/2018	2/15/2024	13,282		13,226		13,282		1.23	%
Ministry Brands, LLC
Software	First lien (2)	6.33% (L + 4.00%/Q)	12/7/2016	12/2/2022	2,947		2,938		2,947
	First lien (3)(9)(10) - Drawn	7.33% (L + 5.00%/Q)	12/7/2016	12/2/2022	200		199		200
	Second lien (8)(9)	11.58% (L + 9.25%/Q)	12/7/2016	6/2/2023	7,840		7,800		7,840
	Second lien (3)(9)	11.58% (L + 9.25%/Q)	12/7/2016	6/2/2023	2,160		2,149		2,160
					13,147		13,086		13,147		1.22	%
Affinity Dental Management, Inc.
Healthcare Services	First lien (2)(9)	8.68% (L + 6.00%/Q)	9/15/2017	9/15/2023	6,646		6,614		6,646
	First lien (3)(9)	8.52% (L + 6.00%/Q)	9/15/2017	9/15/2023	5,250		5,217		5,250
					11,896		11,831		11,896		1.10	%
CHA Holdings, Inc.
Business Services	Second lien (4)	11.08% (L + 8.75%/Q)	4/3/2018	4/10/2026	7,012		6,949		7,117
	Second lien (3)	11.08% (L + 8.75%/Q)	4/3/2018	4/10/2026	4,453		4,413		4,519
					11,465		11,362		11,636		1.08	%
PPVA Black Elk (Equity) LLC
Business Services	Subordinated (3)(9)	—	5/3/2013	—	14,500		14,500		11,362		1.05	%
NorthStar Financial Services Group, LLC
Software	Second lien (5)	9.85% (L + 7.50%/Q)	5/23/2018	5/25/2026	10,607		10,583		10,501		0.97	%
Vectra Co.
Business Products	Second lien (8)	9.65% (L + 7.25%/M)	2/23/2018	3/8/2026	10,788		10,752		10,438		0.97	%
Masergy Holdings, Inc.
Business Services	Second lien (2)	9.83% (L + 7.50%/Q)	12/14/2016	12/16/2024	10,500		10,455		10,342		0.96	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
Weston Solutions, Inc.
Business Services First lien (3)(10)(11) - Undrawn — 12/31/2020 $ 10,000
$ —
$ —
— %
Ansira Holdings, Inc.
Business Services First lien (3)(11) - Undrawn — 12/20/2018 1,700
(9 ) (4 ) — %
Xactly Corporation
Software First lien (3)(10)(11) - Undrawn — 7/29/2022 992
(10 ) (10 ) — %
Trader Interactive, LLC
Business Services First lien (3)(10)(11) - Undrawn — 6/15/2023 1,673
(13 ) (13 ) — %
Zywave, Inc.
Software First lien (3)(10)(11) - Undrawn — 11/17/2022 2,000
(15 ) (15 ) — %
PetVet Care Centers LLC
Consumer Services First lien (3)(10)(11) - Undrawn — 6/8/2019 7,287
(27 ) (27 )
First lien (3)(10)(11) - Undrawn — 6/8/2023 1,595
(6 ) (6 )
8,882
(33 ) (33 ) — %
BackOffice Associates Holdings, LLC
Business Services First lien (3)(10)(11) - Undrawn — 8/24/2018 3,447
(13 ) (13 )
First lien (3)(10)(11) - Undrawn — 8/25/2023 2,586
(23 ) (23 )
6,033
(36 ) (36 ) — %
Affinity Dental Management, Inc.
Healthcare Services First lien (3)(11) - Undrawn — 3/15/2019 11,584
(29 ) (29 )
First lien (3)(11) - Undrawn — 3/15/2023 1,737
(17 ) (17 )
13,321
(46 ) (46 ) (0.01 )%
Frontline Technologies Group Holdings, LLC
Education First lien (3)(11) - Undrawn — 9/18/2019 7,738
(58 ) (58 ) (0.01 )%
Total Unfunded Debt Investments - United States $ 66,763
$ (411 ) $ (215 ) (0.02 )%
Total Non-Controlled/Non-Affiliated Investments $ 1,480,226
$ 1,501,544
145.49 %
Non-Controlled/Affiliated Investments (23)
Funded Debt Investments - United States
Edmentum Ultimate Holdings, LLC (16)
Education Subordinated (3)(10) 8.50% PIK/Q* 6/9/2020 $ 4,395
$ 4,390
$ 4,395

Subordinated (2)(10) 10.00% PIK/Q* 6/9/2020 16,342
16,342
13,075

Subordinated (3)(10) 10.00% PIK/Q* 6/9/2020 4,020
4,020
3,216

24,757
24,752
20,686
2.00 %
Permian Holdco 1, Inc.
Permian Holdco 2, Inc.
Energy Subordinated (3)(10) 14.00% PIK/Q* 10/15/2021 1,939
1,939
1,939
0.19 %
Total Funded Debt Investments - United States $ 26,696
$ 26,691
$ 22,625
2.19 %



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Amerijet Holdings, Inc.
Distribution & Logistics	First lien (4)(9)	10.40% (L + 8.00%/M)	7/15/2016	7/15/2021	$	8,651	$	8,621	$	8,651
	First lien (4)(9)	10.40% (L + 8.00%/M)	7/15/2016	7/15/2021	1,442		1,437		1,442
					10,093		10,058		10,093		0.93	%
Quartz Holding Company
Software	Second lien (3)	10.44% (L + 8.00%/M)	4/2/2019	4/2/2027	10,000		9,804		10,050		0.93	%
VT Topco, Inc.
Business Services	Second lien (4)	9.33% (L + 7.00%/Q)	8/14/2018	7/31/2026	10,000		9,977		10,037		0.93	%
Stats Intermediate Holdings, LLC
Business Services	First lien (2)	7.62% (L + 5.25%/M)	5/22/2019	7/10/2026	10,000		9,875		9,825		0.91	%
Affordable Care Holding Corp.
Healthcare Services	First lien (2)	7.23% (L + 4.75%/M)	3/18/2019	10/24/2022	9,948		9,763		9,700		0.90	%
AgKnowledge Holdings Company, Inc.
Business Services	First Lien (4)	7.15% (L + 4.75%/M)	11/30/2018	7/23/2023	9,403		9,361		9,379		0.87	%
JAMF Holdings, Inc.
Software	First lien (8)(9)	9.53% (L + 7.00%/Q)	11/13/2017	11/11/2022	8,757		8,694		8,757
	First lien (3)(9)(10) - Drawn	9.41% (L + 7.00%/M)	11/13/2017	11/11/2022	500		495		500
					9,257		9,189		9,257		0.86	%
WD Wolverine Holdings, LLC
Healthcare Services	First lien (2)	7.90% (L + 5.50%/M)	2/22/2017	8/16/2022	9,239		9,052		9,170		0.85	%
Wrike, Inc.
Software	First lien (8)(9)	9.16% (L + 6.75%/M)	12/31/2018	12/31/2024	9,067		8,982		8,976		0.83	%
Alert Holding Company, Inc. (14)
Appriss Holdings, Inc.
Business Services	First lien (8)	7.83% (L + 5.50%/Q)	5/24/2019	5/29/2026	8,000		7,921		7,880		0.73	%
Zywave, Inc.
Software	Second lien (4)(9)	11.59% (L + 9.00%/Q)	11/22/2016	11/17/2023	6,980		6,943		6,980
	First lien (3)(9)(10) - Drawn	7.39% (L + 5.00%/Q)	11/22/2016	11/17/2022	670		665		670
					7,650		7,608		7,650		0.71	%
J.D. Power (fka J.D. Power and Associates)
Business Services	Second lien (3)	10.90% (L + 8.50%/M)	6/9/2016	9/7/2024	7,583		7,513		7,507		0.69	%
MH Sub I, LLC (Micro Holding Corp.)
Software	Second lien (2)	9.90% (L + 7.50%/M)	8/16/2017	9/15/2025	7,000		6,941		7,035		0.65	%
Restaurant Technologies, Inc.
Business Services	Second lien (4)	8.90% (L + 6.50%/M)	9/24/2018	10/1/2026	6,722		6,706		6,747		0.62	%
CP VI Bella Midco, LLC
Healthcare Services	Second lien (3)	9.15% (L + 6.75%/M)	1/25/2018	12/29/2025	6,732		6,703		6,615		0.61	%
DealerSocket, Inc.
Software	First lien (2)	7.15% (L + 4.75%/M)	4/16/2018	4/26/2023	6,644		6,604		6,577		0.61	%
DG Investment Intermediate Holdings 2, Inc. (aka Convergint Technologies Holdings, LLC)
Business Services	Second lien (3)	9.15% (L + 6.75%/M)	1/29/2018	2/2/2026	6,732		6,703		6,564		0.61	%
First American Payment Systems, L.P.
Business Services	First lien (2)	7.35% (L + 4.75%/Q)	1/3/2017	1/5/2024	6,344		6,299		6,344		0.59	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
Equity - United States
HI Technology Corp.
Business Services Preferred shares (3)(10)(21) — — 2,768,000
$ 105,155
$ 105,155
10.19 %
NMFC Senior Loan Program I LLC**
Investment Fund Membership interest (3)(10) — — —
23,000
23,000
2.23 %
Sierra Hamilton Holdings Corporation
Energy Ordinary shares (2)(10) — — 25,000,000
11,501
10,911

Ordinary shares (3)(10) — — 2,786,000
1,281
1,216

12,782
12,127
1.18 %
Permian Holdco 1, Inc. ��
Energy Preferred shares (3)(10)(17) — — 1,523,520
6,578
8,379

Ordinary shares (3)(10) — — 1,366,452
1,350
1,682

7,928
10,061
0.97 %
Edmentum Ultimate Holdings, LLC (16)
Education Ordinary shares (3)(10) — — 123,968
11
349

Ordinary shares (2)(10) — — 107,143
9
302

20
651
0.06 %
Total Shares - United States $ 148,885
$ 150,994
14.63 %
Total Funded Investments $ 175,576
$ 173,619
16.82 %
Unfunded Debt Investments - United States
Edmentum Ultimate Holdings, LLC (16)
Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
Education Second lien (3)(10)(11) - Undrawn — 6/9/2020 $ 4,881
$ —
$ —
— %
Permian Holdco 1, Inc.
Permian Holdco 2, Inc.
Energy Subordinated (3)(10)(11) - Undrawn — 10/15/2021 1,025
—
—
— %
Total Unfunded Debt Investments - United States $ 5,906
$ —
$ —
— %
Total Non-Controlled/Affiliated Investments $ 175,576
$ 173,619
16.82 %
Controlled Investments (24)
Funded Debt Investments - United States
UniTek Global Services, Inc.
Business Services First lien (2)(10) 9.84% (L + 8.50%/Q) 1/13/2019 $ 10,846
$ 10,846
$ 10,846

First lien (2)(10) 9.84% (L + 7.50% + 1.00% PIK/Q)* 1/13/2019 795
795
795

Subordinated (2)(10) 15.00% PIK/Q* 7/13/2019 1,929
1,929
1,929

Subordinated (3)(10) 15.00% PIK/Q* 7/13/2019 1,154
1,154
1,154

14,724
14,724
14,724
1.43 %
Total Funded Debt Investments - United States $ 14,724
$ 14,724
$ 14,724
1.43 %
Equity - Canada
NM APP Canada Corp.**
Net Lease Membership interest (8)(10) — — —
$ 7,345
$ 7,685
0.74 %
Total Shares - Canada $ 7,345
$ 7,685
0.74 %



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Solera LLC / Solera Finance, Inc.
Software	Subordinated (3)	10.50%/S	2/29/2016	3/1/2024	$	5,000	$	4,829	$	5,431	0.50	%
ADG, LLC
Healthcare Services	Second lien (3)(9)	12.20% (L + 10.00%/S)	10/3/2016	3/28/2024	5,087		5,033		4,794		0.44	%
York Risk Services Holding Corp.
Business Services	Subordinated (3)	8.50%/S	9/17/2014	10/1/2022	3,000		3,000		2,483		0.23	%
Ensemble S Merger Sub, Inc.
Software	Subordinated (3)	9.00%/S	9/21/2015	9/30/2023	2,000		1,957		2,073		0.19	%
Diligent Corporation
Software	First lien (3)(9)(10) - Drawn	8.35% (L + 5.50%/S)	12/19/2018	4/14/2022	2,077		2,065		2,064		0.19	%
TMK Hawk Parent, Corp.
Distribution & Logistics	First lien (3)	5.70% (L + 3.50%/Q)	6/24/2019	8/28/2024	1,995		1,666		1,666		0.15	%
Education Management Corporation (12)
Education Management II LLC
Education	First Lien (2)	11.00% (P + 5.50%/Q)(24)	1/5/2015	7/2/2020	211		205		7
	First Lien (3)	11.00% (P + 5.50%/Q)(24)	1/5/2015	7/2/2020	119		116		4
	First Lien (2)	14.00% (P + 8.50%/M)(24)	1/5/2015	7/2/2020	300		292		1
	First Lien (3)	14.00% (P + 8.50%/M)(24)	1/5/2015	7/2/2020	169		165		—
	First Lien (2)	14.00% (P + 8.50%/M)(24)	1/5/2015	7/2/2020	170		141		—
	First Lien (2)	14.00% (P + 8.50%/M)(24)	1/5/2015	7/2/2020	5		4		—
	First Lien (3)	14.00% (P + 8.50%/M)(24)	1/5/2015	7/2/2020	96		79		—
	First Lien (3)	14.00% (P + 8.50%/M)(24)	1/5/2015	7/2/2020	3		2		—
					1,073		1,004		12		0.00	%
PPVA Fund, L.P.
Business Services	Collateralized Financing (25)	—	11/7/2014	—	—		—		—		—	%
Total Funded Debt Investments - United States					$	1,975,187	$	1,958,660	$	1,957,782	181.12	%
Total Funded Debt Investments					$	2,084,268	$	2,067,090	$	2,065,830	191.11	%
Equity - Hong Kong
Bach Special Limited (Bach Preference Limited)**
Education	Preferred shares (3)(9)(21)	—	9/1/2017	—	70,712		$	6,991	$	7,071	0.65	%
Total Shares - Hong Kong							$	6,991	$	7,071	0.65	%
Equity - United States
Avatar Topco, Inc.
Education	Preferred shares (3)(9)(22)	—	11/17/2017	—	35,750		$	43,125	$	43,362	4.01	%
Tenawa Resource Holdings LLC (13)
QID NGL LLC	Preferred shares (6)(9)	—	10/30/2017	—	1,623,385		1,624		2,989
Energy	Ordinary shares (6)(9)	—	5/12/2014	—	5,290,997		5,291		9,256
							6,915		12,245		1.13	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(in thousands, except shares)

(unaudited)

Portfolio Company, Location and Industry (1) Type of Investment Interest Rate(9) Maturity / Expiration Date
Principal
Amount,
Par Value
or Shares
Cost
Fair
Value

Percent of Net
Assets
Equity - United States
NMFC Senior Loan Program II LLC**
Investment Fund Membership interest (3)(10) — — —
$ 79,400
$ 79,400
7.69 %
UniTek Global Services, Inc.
Business Services Preferred shares (2)(10)(18) — — 21,042,904
18,663
18,228

Preferred shares (3)(10)(18) — — 5,815,258
5,158
5,038

Preferred shares (3)(10)(19) — — 10,370,962
10,371
10,371

Ordinary shares (2)(10) — — 2,096,477
1,925
7,940

Ordinary shares (3)(10) — — 1,993,749
531
7,552

36,648
49,129
4.76 %
NM KRLN LLC
Net Lease Membership interest (8)(10) — — —
7,510
7,510
0.73 %
NM DRVT LLC
Net Lease Membership interest (8)(10) — — —
5,152
5,152
0.50 %
NM APP US LLC
Net Lease Membership interest (8)(10) — — —
5,080
5,119
0.50 %
NM JRA LLC
Net Lease Membership interest (8)(10) — — —
2,043
2,161
0.21 %
Total Shares - United States $ 135,833
$ 148,471
14.39 %
Total Shares $ 143,178
$ 156,156
15.13 %
Warrants - United States
UniTek Global Services, Inc.
Business Services Warrants (3)(10) — 12/31/2018 526,925
$ —
$ —
— %
Total Warrants - United States $ —
$ —
— %
Total Funded Investments $ 157,902
$ 170,880
16.56 %
Unfunded Debt Investments - United States
UniTek Global Services, Inc.
Business Services First lien (3)(10)(11) - Undrawn — 1/13/2019 $ 2,048
$ —
$ —

First lien (3)(10)(11) - Undrawn — 1/13/2019 758
—
—

2,806
—
—
— %
Total Unfunded Debt Investments - United States $ 2,806
$ —
$ —
— %
Total Controlled Investments $ 157,902
$ 170,880
16.56 %
Total Investments $ 1,813,704
$ 1,846,043
178.87 %



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost			Fair Value			Percent of Net Assets
Symplr Software Intermediate Holdings, Inc. (23)
Healthcare Information Technology	Preferred Shares (4)(9)	—	11/30/2018	—	7,500		$	7,979		$	7,970
	Preferred Shares (3)(9)	—	11/30/2018	—	2,586		2,751			2,748
							10,730			10,718			0.99	%
Alert Holding Company, Inc. (14)
Alert Intermediate Holdings I, Inc.
Business Services	Preferred shares (3)(9)	—	5/31/2019	—	5,000		4,977			4,976			0.47	%
Education Management Corporation(12)
Education	Preferred shares (2)	—	1/5/2015	—	3,331		200			—
	Preferred shares (3)	—	1/5/2015	—	1,879		113			—
	Ordinary shares (2)	—	1/5/2015	—	2,994,065		100			—
	Ordinary shares (3)	—	1/5/2015	—	1,688,976		56			—
							469			—			—	%
Total Shares - United States							$	66,216		$	71,301		6.60	%
Total Shares							$	73,207		$	78,372		7.25	%
Warrants - United States							.
ASP LCG Holdings, Inc.
Education	Warrants (3)(9)	—	5/5/2014	5/5/2026	622		$	37		$	827		0.08	%
Total Warrants - United States							$	37		$	827		0.08	%
Total Funded Investments							$	2,140,334		$	2,145,029		198.44	%
Unfunded Debt Investments - Canada
Wolfpack IP Co.**
Software	First lien (3)(10) - Undrawn	—	6/14/2019	6/13/2025	$	909	$	(9	)	$	(9	)	(0.00	)%
Total Unfunded Debt Investments - Canada					$	909	$	(9	)	$	(9	)	(0.00	)%
Unfunded Debt Investments - United States							`
DCA Investment Holding, LLC
Healthcare Services	First lien (3)(9)(10) - Undrawn	—	4/16/2019	4/16/2021	$	20,426	$	—		$	—
	First lien (3)(9)(10) - Undrawn	—	12/20/2017	12/20/2019	3,645		(32		)	—
	First lien (3)(9)(10) - Undrawn	—	7/2/2015	7/2/2021	1,758		(18		)	—
					25,829		(50		)	—			—	%
iPipeline, Inc. (Internet Pipeline, Inc.)
Software	First lien (3)(9)(10) - Undrawn	—	8/4/2015	8/4/2021	1,000		(10		)	—			—	%
Ministry Brands, LLC
Software	First lien (3)(9)(10) - Undrawn	—	12/7/2016	12/2/2022	800		(4		)	—			—	%
Zywave, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	11/22/2016	11/17/2022	1,330		(10		)	—			—	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

June 30, 2019

(in thousands, except shares)

(unaudited)



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost			Fair Value			Percent of Net Assets
Benevis Holding Corp.
Healthcare Services	First lien (3)(9)(10) - Undrawn	—	3/29/2019	4/17/2020	$	7,195	$	—		$	—		—	%
Trader Interactive, LLC
Business Services	First lien (3)(9)(10) - Undrawn	—	6/15/2017	6/15/2023	1,673		(13		)	—			—	%
Xactly Corporation
Software	First lien (3)(9)(10) - Undrawn	—	7/31/2017	7/29/2022	992		(10		)	—			—	%
Integro Parent Inc.
Business Services	First lien (3)(9)(10) - Undrawn	—	6/8/2018	10/30/2021	6,743		(34		)	—			—	%
Affinity Dental Management, Inc.
Healthcare Services	First lien (3)(9)(10) - Undrawn	—	9/15/2017	3/15/2023	1,738		(17		)	—			—	%
Frontline Technologies Group Holdings, LLC
Education	First lien (3)(9)(10) - Undrawn	—	9/18/2017	9/18/2019	6,016		(45		)	—			—	%
JAMF Holdings, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	11/13/2017	11/11/2022	250		(2		)	—			—	%
NM GRC Holdco, LLC
Business Services	First lien (2)(9)(10) - Undrawn	—	2/9/2018	2/9/2020	771		(2		)	—			—	%
TDG Group Holding Company
Consumer Services	First lien (3)(9)(10) - Undrawn	—	5/22/2018	5/31/2024	3,657		(18		)	—			—	%
AgKnowledge Holdings Company, Inc.
Business Services	First lien (3)(10) - Undrawn	—	11/30/2018	7/23/2023	526		(3		)	(1		)	(0.00	)%
BackOffice Associates Holdings, LLC
Business Services	First lien (3)(9)(10) - Undrawn	—	8/25/2017	8/25/2023	52		—			(2		)	(0.00	)%
DealerSocket, Inc.
Software	First lien (3)(10) - Undrawn	—	4/16/2018	4/26/2023	560		(4		)	(6		)	(0.00	)%
Wrike, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	12/31/2018	12/31/2024	933		(9		)	(9		)	(0.00	)%
Alert Holding Company, Inc. (14)
Appriss Holdings, Inc.
Business Services	First lien (3)(10) - Undrawn	—	5/24/2019	5/30/2025	930		(9		)	(14		)	(0.00	)%
Integral Ad Science, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	7/19/2018	7/19/2023	1,429		(14		)	(14		)	(0.00	)%
Finalsite Holdings, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	9/25/2018	9/25/2024	2,521		(19		)	(19		)	(0.00	)%
iCIMS, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	9/12/2018	9/12/2024	1,977		(20		)	(20		)	(0.00	)%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

June 30, 2019

(in thousands, except shares)

(unaudited)



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost			Fair Value			Percent of Net Assets
Conservice, LLC
Business Services	First lien (3)(9)(10) - Undrawn	—	1/3/2019	11/29/2024	$	1,360	$	(7	)	$	(7	)
	First lien (3)(9)(10) - Undrawn	—	1/3/2019	6/30/2020	5,641		—			(27		)
					7,001		(7		)	(34		)	(0.00	)%
Associations, Inc.
Business Services	First lien (3)(9)(10) - Undrawn	—	7/30/2018	7/30/2021	4,300		(27		)	(27		)
	First lien (3)(9)(10) - Undrawn	—	7/30/2018	7/30/2024	2,033		(13		)	(13		)
					6,333		(40		)	(40		)	(0.00	)%
Apptio, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	1/10/2019	1/10/2025	2,066		(41		)	(41		)	(0.01	)%
Kaseya Traverse Inc.
Software	First lien (3)(9)(10) - Undrawn	—	5/9/2019	5/3/2021	3,302		—			(33		)
	First lien (3)(9)(10) - Undrawn	—	5/9/2019	5/2/2025	2,312		(23		)	(23		)
					5,614		(23		)	(56		)	(0.01	)%
Diligent Corporation
Software	First lien (3)(9)(10) - Undrawn	—	12/19/2018	12/19/2020	11,349		(71		)	(71		)	(0.01	)%
Ansira Holdings, Inc.
Business Services	First lien (3)(10) - Undrawn	—	12/19/2016	4/16/2020	2,437		(10		)	(122		)	(0.01	)%
PhyNet Dermatology LLC
Healthcare Services	First lien (3)(9)(10) - Undrawn	—	9/17/2018	8/16/2020	38,335		(192		)	(192		)	(0.02	)%
Salient CRGT Inc.
Federal Services	First lien (3)(10) - Undrawn	—	6/26/2018	11/29/2021	6,125		(490		)	(245		)	(0.02	)%
Total Unfunded Debt Investments - United States					$	146,182	$	(1,167	)	$	(886	)	(0.08	)%
Total Unfunded Debt Investments					$	147,091	$	(1,176	)	$	(895	)	(0.08	)%
Total Non-Controlled/Non-Affiliated Investments							$	2,139,158		$	2,144,134		198.36	%
Non-Controlled/Affiliated Investments (26)
Funded Debt Investments - United States
Permian Holdco 1, Inc.
Permian Holdco 2, Inc.
Permian Holdco 3, Inc.
Energy	First lien (3)(9)	14.94% (L + 7.50% + 5.00% PIK/M)*	6/14/2018	6/30/2022	$	10,309	$	10,309		$	10,309
	First lien (3)(9)(10) - Drawn	8.91% (L + 6.50%/M)	6/14/2018	6/30/2022	17,750		17,750			17,750
	Subordinated (3)(9)	18.00% PIK/Q*	12/26/2018	6/30/2022	2,633		2,633			2,633
	Subordinated (3)(9)	14.00% PIK/Q*	10/31/2016	10/15/2021	2,467		2,467			2,100
	Subordinated (3)(9)	14.00% PIK/Q*	10/31/2016	10/15/2021	1,271		1,271			1,082
					34,430		34,430			33,874			3.13	%
Total Funded Debt Investments - United States					$	34,430	$	34,430		$	33,874		3.13	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

June 30, 2019

(in thousands, except shares)

(unaudited)



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Equity - United States
NMFC Senior Loan Program I LLC**
Investment Fund	Membership interest (3)(9)	—	6/13/2014	—	—		$	23,000	$	23,000	2.13	%
Sierra Hamilton Holdings Corporation
Energy	Ordinary shares (2)(9)	—	7/31/2017	—	25,000,000		11,501		9,897
	Ordinary shares (3)(9)	—	7/31/2017	—	2,786,000		1,281		1,103
							12,782		11,000		1.02	%
Permian Holdco 1, Inc.
Energy	Preferred shares (3)(9)(16)	—	10/31/2016	—	1,873,737		8,503		8,450
	Ordinary shares (3)(9)	—	10/31/2016	—	1,366,452		1,350		268
							9,853		8,718		0.81	%
Total Shares - United States							$	45,635	$	42,718	3.96	%
Total Funded Investments							$	80,065	$	76,592	7.09	%
Unfunded Debt Investments - United States
Permian Holdco 3, Inc.
Energy	First lien (3)(9)(10) - Undrawn	—	6/14/2018	6/30/2022	$	2,250	$	—	$	—	—	%
Total Unfunded Debt Investments - United States					$	2,250	$	—	$	—	—	%
Total Non-Controlled/Affiliated Investments							$	80,065	$	76,592	7.09	%
Controlled Investments (27)
Funded Debt Investments - United States
Edmentum Ultimate Holdings, LLC (15)
Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
Education	First lien (2)	11.08% (L + 4.50% + 4.00% PIK/Q)*	8/6/2018	6/9/2021	$	10,000	$	8,770	$	8,500
	Second lien (3)(9)	7.00% PIK/Q*	2/23/2018	12/9/2021	11,581		11,060		11,581
	Second lien (3)(9)(10) - Drawn	5.00% PIK/Q*	6/9/2015	12/9/2021	7,708		7,708		7,708
	Subordinated (3)(9)	8.50% PIK/Q*	6/9/2015	12/9/2021	5,102		5,099		5,102
	Subordinated (2)(9)	10.00% PIK/Q*	6/9/2015	12/9/2021	19,468		19,468		17,100
	Subordinated (3)(9)	10.00% PIK/Q*	6/9/2015	12/9/2021	4,789		4,789		4,206
					58,648		56,894		54,197		5.01	%
NHME Holdings Corp. (20)
National HME, Inc.
Healthcare Services	Second lien (3)(9)	12.00% PIK/Q*	11/27/2018	5/27/2024	15,562		11,835		11,283
	Second lien (3)(9)	12.00% PIK/Q*	11/27/2018	5/27/2024	8,600		7,674		7,525
					24,162		19,509		18,808		1.74	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

June 30, 2019

(in thousands, except shares)

(unaudited)



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
UniTek Global Services, Inc.
Business Services	First lien (2)(9)	7.83% (L + 5.50%/Q)	6/29/2018	8/20/2024	$	12,478	$	12,478	$	12,478
	First lien (2)(9)	7.83% (L + 5.50%/Q)	6/29/2018	8/20/2024	2,496		2,496		2,496
		��			14,974		14,974		14,974		1.39	%
Total Funded Debt Investments - United States					$	97,784	$	91,377	$	87,979	8.14	%
Equity - Canada
NM APP Canada Corp.**
Net Lease	Membership interest (7)(9)	—	9/13/2016	—	—		$	7,345	$	9,949	0.92	%
Total Shares - Canada							$	7,345	$	9,949	0.92	%
Equity - United States
NMFC Senior Loan Program III LLC**
Investment Fund	Membership interest (3)(9)	—	5/4/2018	—	—		$	80,000	$	80,000	7.40	%
NMFC Senior Loan Program II LLC**
Investment Fund	Membership interest (3)(9)	—	5/3/2016	—	—		79,400		79,400		7.35	%
UniTek Global Services, Inc.
Business Services	Preferred shares (2)(9)(17)	—	1/13/2015	—	26,546,931		24,167		23,852
	Preferred shares (3)(9)(17)	—	1/13/2015	—	7,336,309		6,679		6,592
	Preferred shares (3)(9)(18)	—	6/30/2017	—	14,351,499		14,351		14,304
	Preferred shares (3)(9)(19)	—	8/17/2018	—	7,795,276		7,795		7,795
	Ordinary shares (2)(9)	—	1/13/2015	—	2,096,477		1,925		5,003
	Ordinary shares (3)(9)	—	1/13/2015	—	1,993,749		532		4,758
							55,449		62,304		5.76	%
NM NL Holdings, L.P.**
Net Lease	Membership interest (7)(9)	—	6/20/2018	—	—		32,578		34,294		3.17	%
NM GLCR LP
Net Lease	Membership interest (7)(9)	—	2/1/2018	—	—		14,750		20,918		1.94	%
NM CLFX LP
Net Lease	Membership interest (7)(9)	—	10/6/2017	—	—		12,538		12,725		1.18	%
NM APP US LLC
Net Lease	Membership interest (7)(9)	—	9/13/2016	—	—		5,080		6,101		0.56	%
NM DRVT LLC
Net Lease	Membership interest (7)(9)	—	11/18/2016	—	—		5,152		5,704		0.53	%
NM KRLN LLC
Net Lease	Membership interest (7)(9)	—	11/15/2016	—	—		7,510		4,386		0.40	%
NHME Holdings Corp.(20)
Healthcare Services	Ordinary Shares (3)(9)	—	11/27/2018	—	640,000		4,000		4,000		0.37	%
NM JRA LLC
Net Lease	Membership interest (7)(9)	—	8/12/2016	—	—		2,043		3,500		0.32	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

June 30, 2019

(in thousands, except shares)

(unaudited)



Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares	Cost		Fair Value		Percent of Net Assets
Edmentum Ultimate Holdings, LLC(15)
Education	Ordinary shares (3)(9)	—	6/9/2015	—	123,968	$	11	$	884
	Ordinary shares (2)(9)	—	6/9/2015	—	107,143	9		764
						20		1,648		0.15	%
NM GP Holdco, LLC**
Net Lease	Membership interest (7)(9)	—	6/20/2018	—	—	306		317		0.03	%
Total Shares - United States						$	298,826	$	315,297	29.16	%
Total Shares						$	306,171	$	325,246	30.08	%
Warrants - United States
Edmentum Ultimate Holdings, LLC(15)
Education	Warrants (3)(9)	—	2/23/2018	5/5/2026	1,141,846	$	769	$	8,145	0.75	%
NHME Holdings Corp.(20)
Healthcare Services	Warrants (3)(9)	—	11/27/2018	—	160,000	1,000		1,000		0.09	%
Total Warrants - United States						$	1,769	$	9,145	0.84	%
Total Controlled Investments						$	399,317	$	422,370	39.07	%
Total Investments						$	2,618,540	$	2,643,096	244.52	%


(1)	New Mountain Finance Corporation (the “Company”) generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). These investments are generally subject to certain limitations on resale, and may be deemed to be “restricted securities” under the Securities Act.

(2)

Investment is pledged as collateral for the Holdings Credit Facility, a revolving credit facility among the Company as Collateral Manager, New Mountain Finance Holdings, L.L.C. (“NMF Holdings”) as the Borrower, Wells Fargo ~~Securities, LLC as the Administrative Agent, and Wells Fargo~~ Bank, National Association as the ~~Lender~~Administrative Agent, and Collateral Custodian. See Note 7. Borrowings, for details.

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~September 30, 2017~~

~~(in thousands, except shares)~~

~~(unaudited)~~


(3)	Investment is pledged as collateral for the NMFC Credit Facility, a revolving credit facility among the Company as the Borrower and Goldman Sachs Bank USA as the Administrative Agent and the Collateral Agent and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A. and Stifel Bank & Trust as Lenders. See Note 7. Borrowings, for details.


(4)	Investment is held in New Mountain Finance SBIC, L.P.


(5)	Investment is held in ~~NMF YP Holdings, Inc.~~New Mountain Finance SBIC II, L.P.


(6)	~~Investment is held in NMF Ancora Holdings, Inc.~~


~~(7)~~	Investment is held in NMF QID NGL Holdings, Inc.


~~(8)~~(7)	Investment is held in New Mountain Net Lease Corporation.


(8)	Investment is pledged as collateral for the DB Credit Facility, a revolving credit facility among New Mountain Finance DB, L.L.C as the Borrower and Deutsche Bank AG, New York Branch as the Facility Agent. See Note 7. Borrowings, for details.


(9)	The fair value of the Company's investment is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 4. Fair Value, for details.


(10)	Par Value amounts represent the drawn or undrawn (as indicated in type of investment) portion of revolving credit facilities or delayed draws. Cost amounts represent the cash received at settlement date net of the impact of paydowns and cash paid for drawn revolvers or delayed draws.

(11)

All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (L), the Prime Rate (P) and the alternative base rate (Base) and which resets daily (D), weekly (W), monthly (M), quarterly (Q), semi-annually (S) or annually (A). For each investment the current interest rate provided reflects the rate in effect as of ~~September~~June 30, ~~2017.~~


~~(10)~~	~~The fair value of the Company's investment is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 4.~~ ~~Fair Value,~~ ~~for details.~~


~~(11)~~	Par Value amounts represent the drawn or undrawn (as indicated in type of investment) portion of revolving credit facilities or delayed draws. Cost amounts represent the cash received at settlement date net of the impact of paydowns and cash paid for drawn revolvers or delayed draws.2019.

(12)

The Company holds investments in Education Management Corporation and one related entity of Education Management Corporation. The Company holds series A-1 convertible preferred stock and common stock in Education Management Corporation and holds a tranche A first lien term loan and a tranche B first lien term loan in Education Management II LLC, which is an indirect subsidiary of Education Management Corporation.

(13)

The Company holds investments in two related entities of Tenawa Resource Holdings LLC. The Company holds 4.77% of the common units in QID NGL LLC (which at closing represented 98.1% of the ownership in the common units in Tenawa Resource Holdings LLC), class A preferred units in QID NGL LLC and ~~holds~~ a first lien investment in Tenawa Resource Management LLC, a wholly-owned subsidiary of Tenawa Resource Holdings LLC.

(14)

The Company holds investments in ~~QC McKissock Investment, LLC and one related entity~~two wholly-owned subsidiaries of ~~QC McKissock Investment, LLC.~~Alert Holding Company, Inc. The Company holds a first lien term loan ~~in QC McKissock Investment, LLC (which at closing represented 71.1% of the ownership in the Series A common units of McKissock Investment Holdings, LLC)~~ and ~~holds~~ a first lien ~~term loan~~revolver in Appriss Holdings, Inc. and preferred equity in Alert Intermediate Holdings I, Inc. The preferred equity is entitled to receive preferential dividends at a ~~delayed draw term loan in McKissock, LLC, a wholly-owned subsidiary~~rate of ~~McKissock Investment Holdings, LLC.~~L + 10.0% per annum.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

June 30, 2019

(in thousands, except shares)

(unaudited)


(15)	The Company holds investments in TWDiamondback Holdings Corp. and one related entity of TWDiamondback Holdings Corp. The Company holds preferred equity in TWDiamondback Holdings Corp. and holds a first lien last out term loan and a delayed draw term loan in Diamondback Drugs of Delaware LLC, a wholly-owned subsidiary of TWDiamondback Holdings Corp.

~~(16)~~

The Company holds investments in Edmentum Ultimate Holdings, LLC and its related entities. The Company holds subordinated notes, ~~and~~ ordinary equity, and warrants in Edmentum Ultimate Holdings, LLC and holds a first lien term loan, second lien revolver and a second lien term loan in Edmentum, Inc. and Archipelago Learning, Inc., which are wholly-owned subsidiaries of Edmentum Ultimate Holdings, LLC.


~~(17)~~(16)	The Company holds preferred equity in Permian Holdco 1, Inc. that is entitled to receive cumulative preferential dividends at a rate of 12.0% per annum payable in additional shares.


~~(18)~~(17)	The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 13.5% per annum payable in additional shares.


~~(19)~~(18)	The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 19.0% per annum payable in additional shares.


(19)	The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to received cumulative preferential dividends at a rate of 20.0% per annum payable in additional shares.


(20)	The Company holds ~~equity investments~~ordinary shares and warrants in ~~TW-NHME~~NHME Holdings Corp., ~~and holds a~~as well as second lien term ~~loan investment~~loans in National HME, Inc., a wholly-owned subsidiary of ~~TW-NHME~~NHME Holdings Corp.


(21)	~~The Company holds convertible preferred equity in HI Technology Corp that is accruing dividends at a rate of 15.0% per annum.~~


~~(22)~~	The Company holds preferred equity in Bach Special Limited (Bach Preference Limited) that is entitled to receive cumulative preferential dividends at a rate of 12.25% per annum payable in additional shares.

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~September 30, 2017~~

~~(in thousands, except shares)~~

~~(unaudited)~~


(22)	The Company holds preferred equity in Avatar Topco, Inc., and holds a second lien term loan investment in EAB Global, Inc., a wholly-owned subsidiary of Avatar Topco, Inc. The preferred equity is entitled to receive cumulative preferential dividends at a rate of L + 11.00% per annum.


(23)	The Company holds preferred equity in Symplr Intermediate Holdings, Inc. and holds a first lien term loan investment in Symplr Software Inc, Inc. (fka Caliper Software, Inc.), a wholly-owned subsidiary of Symplr Software Intermediate Holdings, Inc. The preferred equity is entitled to receive preferential dividends at a rate of L + 10.50% per annum.


(24)	Investment or a portion of the investment is on non-accrual status. See Note 3. Investments, for details.


(25)	The Company holds one security purchased under a collateralized agreement to resell on its Consolidated Statement of Assets and Liabilities with a cost basis of $30,000 and a fair value of $23,508 as of June 30, 2019. See Note 2. Summary of Significant Accounting Policies, for details.

(26)

Denotes investments in which the Company is an “Affiliated Person”, as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), due to owning or holding the power to vote 5.0% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, along with transactions during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 in which the issuer was a non-controlled/affiliated investment, is as follows:


Portfolio Company	Fair Value at December 31, 2016		Gross Additions (A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)			Fair Value at September 30, 2017		Interest Income		Dividend Income		Other Income		Fair Value at December 31, 2018		Gross Additions (A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)			Fair Value at June 30, 2019		Interest Income		Dividend Income		Other Income
Edmentum Ultimate Holdings, LLC/Edmentum Inc.	$	23,247	$	7,123	$	(5,381	)	$	—	$	(3,652	)	$	21,337	$	1,887	$	—	$	—
HI Technology Corp.	—		105,155		—			—		—			105,155		—		7,917		—
NMFC Senior Loan Program I LLC	23,000		—		—			—		—			23,000		—		2,662		865		$	23,000	$	—	$	—		$	—	$	—		$	23,000	$	—	$	1,538	$	574
Permian Holdco 1, Inc. / Permian Holdco 2, Inc.	11,193		901		—			—		(94		)	12,000		190		708		23
Permian Holdco 1, Inc. / Permian Holdco 2, Inc. / Permian Holdco 3, Inc.																					41,966		1,677		(50		)	—		(1,001		)	42,592		2,037		592		18
Sierra Hamilton Holdings Corporation	—		12,782		—			—		(655		)	12,127		—		—		—		12,527		—		—			—		(1,527		)	11,000		—		—		—
Total Non-Controlled/Affiliated Investments	$	57,440	$	125,961	$	(5,381	)	$	—	$	(4,401	)	$	173,619	$	2,077	$	11,287	$	888	$	77,493	$	1,677	$	(50	)	$	—	$	(2,528	)	$	76,592	$	2,037	$	2,130	$	592


(A)	Gross additions include increases in the cost basis of investments resulting from new portfolio investments, payment-in-kind ("PIK") interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement of an existing portfolio company into this category from a different category.


(B)	Gross redemptions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

June 30, 2019

(in thousands, except shares)

(unaudited)

~~(24)~~(27)

Denotes investments in which the Company is in “Control”, as defined in the 1940 Act, due to owning or holding the power to vote 25.0% or more of the outstanding voting securities of the investment. Fair value as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, along with transactions during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 in which the issuer was a controlled investment, is as follows:


Portfolio Company	Fair Value at December 31, 2016		Gross Additions (A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)			Fair Value at September 30, 2017		Interest Income		Dividend Income		Other Income		Fair Value at December 31, 2018		Gross Additions (A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)			Fair Value at June 30, 2019		Interest Income		Dividend Income		Other Income
New Mountain Net Lease Corporation	$	27,000	$	—	$	(27,000	)	$	—	$	—		$	—	$	—	$	—	$	—
NM APP Canada Corp.	—		7,345		—			—		340			7,685		—		662		—
Edmentum Ultimate Holdings, LLC/Edmentum Inc.																					$	45,011	$	9,508	$	(67	)	$	8	$	9,538		$	63,990	$	2,757	$	—	$	4
National HME, Inc./NHME Holdings Corp.																					22,722		1,678		—			—		(592		)	23,808		1,678		—		—
NM APP CANADA CORP																					9,727		—		—			—		222			9,949		—		450		—
NM APP US LLC	—		5,080		—			—		39			5,119		—		424		—		5,912		—		—			—		189			6,101		—		263		—
NM CLFX LP																					12,770		—		—			—		(45		)	12,725		—		785		—
NM DRVT LLC	—		5,152		—			—		—			5,152		—		350		—		5,619		—		—			—		85			5,704		—		287		—
NM JRA LLC	—		2,043		—			—		118			2,161		—		150		—		2,537		—		—			—		963			3,500		—		125		—
NM GLCR LP																					20,343		—		—			—		575			20,918		—		874		—
NM KRLN LLC	—		7,510		—			—		—			7,510		—		526		—		4,205		—		—			—		181			4,386		—		420		—
NM NL Holdings, L.P.																					33,392		—		—			—		902			34,294		—		1,628		—
NM GP Holdco, LLC																					311		—		—			—		6			317		—		15		—
NMFC Senior Loan Program II LLC	71,460		7,940		—			—		—			79,400		—		9,627		—		79,400		—		—			—		—			79,400		—		5,955		—
NMFC Senior Loan Program III LLC																					78,400		1,600		—			—		—			80,000		—		4,920		—
UniTek Global Services, Inc.	56,361		13,259		(4,006		)	—		(1,761		)	63,853		1,293		3,016		581		82,788		4,172		(75		)	—		(9,607		)	77,278		612		4,173		338
Total Controlled Investments	$	154,821	$	48,329	$	(31,006	)	$	—	$	(1,264	)	$	170,880	$	1,293	$	14,755	$	581	$	403,137	$	16,958	$	(142	)	$	8	$	2,417		$	422,370	$	5,047	$	19,895	$	342


(A)	Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement of an existing portfolio company into this category from a different category.


(B)	Gross redemptions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.


*	All or a portion of interest contains PIK interest.

Indicates assets that the Company deems to be “non-qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of ~~September~~June 30, ~~2017, 14.9%~~2019, 12.81% of the Company’s total assets are represented by investments ~~were~~at fair value that are considered non-qualifying assets.

The accompanying notes are an integral part of these consolidated financial statements.

1722

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

~~September~~June 30, ~~2017~~2019

(unaudited)



	~~September~~June 30, ~~2017~~2019
Investment Type	Percent of Total Investments at Fair Value
First lien	~~41.72~~52.76	%
Second lien	~~36.83~~27.35	%
Subordinated	~~3.75~~2.63	%
Equity and other	~~17.70~~17.26	%
Total investments	100.00	%



	~~September~~June 30, ~~2017~~2019
Industry Type	Percent of Total Investments at Fair Value
Business Services	~~33.41~~23.75	%
Software	~~21.12~~22.42	%
Healthcare Services	~~8.76~~16.84	%
~~Consumer~~Education	8.44	%
Investment Fund (includes investments in joint ventures)	6.90	%
Energy	3.98	%
Net Lease	3.70	%
Federal Services	~~7.85~~3.33	%
Distribution & Logistics	~~6.13~~3.20	%
~~Investment Fund~~	~~5.55~~	%
~~Education~~	~~5.50~~	%
~~Federal~~Consumer Services	~~4.18~~	%
~~Energy~~	~~3.89~~	%
~~Net Lease~~	~~1.50~~2.96	%
Healthcare Information Technology	~~0.82~~2.50	%
Food & Beverage	1.06	%
Packaging	~~0.78~~0.53	%
Business Products	~~0.51~~0.39	%
Total investments	100.00	%



	~~September~~June 30, ~~2017~~2019
Interest Rate Type	Percent of Total Investments at Fair Value
Floating rates	~~87.97~~93.35	%
Fixed rates	~~12.03~~6.65	%
Total investments	100.00	%

The accompanying notes are an integral part of these consolidated financial statements.

1823

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments

December 31, ~~2016~~2018

(in thousands, except shares)

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
Non-Controlled/Non-Affiliated Investments

Funded Debt Investments - Australia
   Project Sunshine IV Pty Ltd**
      Media First lien (2) 8.00% (L + 7.00%/M) 9/23/2019 $ 6,012
$ 5,992
$ 6,005
0.64 %
Total Funded Debt Investments - Australia $ 6,012
$ 5,992
$ 6,005
0.64 %
Funded Debt Investments - Luxembourg
   Pinnacle Holdco S.à.r.l. / Pinnacle (US) Acquisition Co Limited**
      Software Second lien (2) 10.50% (L + 9.25%/Q) 7/30/2020 $ 24,630
$ 24,362
$ 18,103

Second lien (3) 10.50% (L + 9.25%/Q) 7/30/2020 8,204
8,332
6,030

32,834
32,694
24,133
2.57 %
Total Funded Debt Investments - Luxembourg $ 32,834
$ 32,694
$ 24,133
2.57 %
Funded Debt Investments - Netherlands
   Eiger Acquisition B.V. (Eiger Co-Borrower, LLC)**
      Software Second lien (3) 10.13% (L + 9.13%/Q) 2/17/2023 $ 10,000
$ 9,371
$ 9,799
1.04 %
Total Funded Debt Investments - Netherlands $ 10,000
$ 9,371
$ 9,799
1.04 %
Funded Debt Investments - United Kingdom
   Air Newco LLC**
      Software Second lien (3) 10.50% (L + 9.50%/Q) 1/31/2023 $ 32,500
$ 31,814
$ 29,514
3.14 %
Total Funded Debt Investments - United Kingdom $ 32,500
$ 31,814
$ 29,514
3.14 %
Funded Debt Investments - United States
   TIBCO Software Inc.
      Software First lien (2) 6.50% (L + 5.50%/M) 12/4/2020 $ 29,475
$ 28,444
$ 29,634

Subordinated (3) 11.38%/S 12/1/2021 15,000
14,659
15,038

44,475
43,103
44,672
4.76 %
   Navex Global, Inc.
      Software First lien (4) 5.99% (L + 4.75%/Q) 11/19/2021 4,563
4,530
4,540

First lien (2) 5.99% (L + 4.75%/Q) 11/19/2021 2,583
2,563
2,570

Second lien (4) 10.31% (L + 8.75%/Q) 11/18/2022 18,187
17,984
17,823

Second lien (3) 10.31% (L + 8.75%/Q) 11/18/2022 19,813
19,282
19,417

45,146
44,359
44,350
4.73 %
   Hill International, Inc.
      Business Services First lien (2)(10) 7.75% (L + 6.75%/Q) 9/28/2020 41,544
41,150
41,543
4.43 %
   AssuredPartners, Inc.
      Business Services Second lien (3) 10.00% (L + 9.00%/M) 10/20/2023 20,200
19,480
20,394

Second lien (2) 10.00% (L + 9.00%/M) 10/20/2023 20,000
19,282
20,192

40,200
38,762
40,586
4.32 %
   Tenawa Resource Holdings LLC (13)
   Tenawa Resource Management LLC
      Energy First lien (3)(10) 10.50% (Base + 8.00%/Q) 5/12/2019 40,000
39,903
39,825
4.24 %
   Kronos Incorporated
      Software Second lien (2) 9.25% (L + 8.25%/Q) 11/1/2024 36,000
35,458
37,159
3.96 %

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~December 31, 2016~~

~~(in thousands, except shares)~~

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
   PetVet Care Centers LLC
      Consumer Services Second lien (3)(10) 10.25% (L + 9.25%/Q) 6/17/2021 $ 24,000
$ 23,820
$ 24,240

Second lien (3)(10) 10.50% (L + 9.50%/Q) 6/17/2021 6,500
6,444
6,565

Second lien (3)(10) 9.50% (L + 8.50%/Q) 6/17/2021 6,000
5,910
5,910

36,500
36,174
36,715
3.91 %
   Ascend Learning, LLC
      Education Second lien (3) 9.50% (L + 8.50%/Q) 11/30/2020 35,227
34,895
34,963
3.73 %
   Weston Solutions, Inc.
      Business Services First lien (2)(10) 10.50% (L + 9.50%/M) 12/31/2020 34,821
34,821
34,821
3.71 %
   Redbox Automated Retail, LLC
      Consumer Services First lien (2) 8.50% (L + 7.50%/Q) 9/27/2021 33,469
32,987
32,601
3.47 %
   Valet Waste Holdings, Inc.
      Business Services First lien (2)(10) 8.00% (L + 7.00%/Q) 9/24/2021 29,625
29,320
29,625

First lien (3)(10)(11) - Drawn 8.00% (L + 7.00%/Q) 9/24/2021 2,250
2,222
2,250

31,875
31,542
31,875
3.40 %
   VetCor Professional Practices LLC
      Consumer Services First lien (4)(10) 7.25% (L + 6.25%/Q) 4/20/2021 19,306
19,159
19,306

First lien (2)(10) 7.25% (L + 6.25%/Q) 4/20/2021 7,793
7,652
7,793

First lien (4)(10) 7.25% (L + 6.25%/Q) 4/20/2021 2,677
2,655
2,677

First lien (4)(10)
(11) - Drawn
7.25% (L + 6.25%/Q) 4/20/2021 373
365
373

30,149
29,831
30,149
3.21 %
   Integro Parent Inc.
      Business Services First lien (2) 6.75% (L + 5.75%/Q) 10/31/2022 19,806
19,463
19,607

Second lien (3) 10.25% (L + 9.25%/Q) 10/30/2023 10,000
9,910
9,750

29,806
29,373
29,357
3.13 %
   ProQuest LLC
      Business Services Second lien (3) 10.00% (L + 9.00%/M) 12/15/2022 28,700
28,188
28,700
3.06 %
   CRGT Inc.
      Federal Services First lien (2) 7.50% (L + 6.50%/M) 12/19/2020 27,409
27,252
27,478
2.93 %
   Evo Payments International, LLC
      Business Services First lien (2) 6.00% (L + 5.00%/M) 12/22/2023 2,500
2,487
2,515

Second lien (2) 10.00% (L + 9.00%/M) 12/23/2024 25,000
24,813
24,813

27,500
27,300
27,328
2.91 %
   Severin Acquisition, LLC
      Software Second lien (4)(10) 9.75% (L + 8.75%/Q) 7/29/2022 15,000
14,873
15,000

Second lien (4)(10) 9.75% (L + 8.75%/Q) 7/29/2022 4,154
4,118
4,154

Second lien (4)(10) 10.25% (L + 9.25%/Q) 7/29/2022 3,273
3,243
3,305

Second lien (3)(10) 10.00% (L + 9.00%/Q) 7/29/2022 2,361
2,338
2,384

Second lien (3)(10) 10.25% (L + 9.25%/Q) 7/29/2022 1,825
1,807
1,843

Second lien (4)(10) 10.25% (L + 9.25%/Q) 7/29/2022 300
297
303

26,913
26,676
26,989
2.88 %
   Marketo, Inc.
      Software First lien (3)(10) 10.50% (L + 9.50%/Q) 8/16/2021 26,820
26,442
26,418
2.81 %
   Ansira Holdings, Inc.
      Business Services First lien (2) 7.50% (L + 6.50%/Q) 12/20/2022 26,182
26,051
26,051
2.78 %

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~December 31, 2016~~

~~(in thousands, except shares)~~

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
   Pelican Products, Inc.
      Business Products Second lien (3) 9.25% (L + 8.25%/Q) 4/9/2021 $ 15,500
$ 15,506
$ 15,170

Second lien (2) 9.25% (L + 8.25%/Q) 4/9/2021 10,000
10,107
9,788

25,500
25,613
24,958
2.66 %
   DigiCert Holdings, Inc.
      Software First lien (2) 6.00% (L + 5.00%/Q) 10/21/2021 24,750
24,134
24,719
2.63 %
   nThrive, Inc. (fka Precyse Acquisition Corp.)
      Healthcare Services Second lien (2)(10) 10.75% (L + 9.75%/M) 4/20/2023 25,000
24,593
24,711
2.63 %
   AAC Holding Corp.
      Education First lien (2)(10) 8.25% (L + 7.25%/M) 9/30/2020 23,918
23,637
23,918
2.55 %
   Ryan, LLC
      Business Services First lien (2) 6.75% (L + 5.75%/M) 8/7/2020 23,927
23,656
23,785
2.53 %
   EN Engineering, LLC
      Business Services First lien (2)(10) 7.00% (L + 6.00%/Q) 6/30/2021 21,107
20,940
21,107

First lien (2)(10) 7.78% (Base + 5.55%/Q) 6/30/2021 2,189
2,170
2,189

23,296
23,110
23,296
2.48 %
   TWDiamondback Holdings Corp. (15)
   Diamondback Drugs of Delaware, L.L.C. (TWDiamondback II Holdings LLC)
      Distribution & Logistics First lien (4)(10) 9.75% (L + 8.75%/Q) 11/19/2019 19,895
19,895
19,895

First lien (3)(10) 9.75% (L + 8.75%/Q) 11/19/2019 2,158
2,158
2,158

First lien (4)(10) 9.75% (L + 8.75%/Q) 11/19/2019 605
605
605

22,658
22,658
22,658
2.41 %
   Vision Solutions, Inc.
      Software First lien (2) 7.50% (Base + 6.50%/Q) 6/16/2022 22,359
22,153
22,317
2.38 %
   KeyPoint Government Solutions, Inc.
      Federal Services First lien (2) 7.75% (L + 6.50%/Q) 11/13/2017 22,411
22,312
22,299
2.38 %
   TW-NHME Holdings Corp. (20)
   National HME, Inc.
      Healthcare Services Second lien (4)(10) 10.25% (L + 9.25%/Q) 7/14/2022 21,500
21,268
21,500

Second lien (3)(10) 10.25% (L + 9.25%/Q) 7/14/2022 500
494
500

22,000
21,762
22,000
2.34 %
   IT'SUGAR LLC
      Retail First lien (4)(10) 10.50% (L + 9.50%/Q) 10/23/2019 20,790
20,189
20,467
2.18 %
   First American Payment Systems, L.P.
      Business Services Second lien (2) 10.75% (L + 9.50%/M) 4/12/2019 18,643
18,483
18,643
1.99 %
   DCA Investment Holding, LLC
      Healthcare Services First lien (2)(10) 6.25% (L + 5.25%/Q) 7/2/2021 17,632
17,493
17,632

First lien (3)(10)(11) - Drawn 8.00% (P + 4.25%/Q) 7/2/2021 752
744
752

18,384
18,237
18,384
1.96 %
   AgKnowledge Holdings Company, Inc.
      Business Services Second lien (2)(10) 9.25% (L + 8.25%/M) 7/23/2020 18,500
18,379
18,046
1.92 %
   Project Alpha Intermediate Holding, Inc.
      Software First lien (2)(10) 9.25% (L + 8.25%/M) 8/22/2022 17,955
17,784
17,775
1.89 %
   iPipeline, Inc. (Internet Pipeline, Inc.)
      Software First lien (4)(10) 8.25% (L + 7.25%/Q) 8/4/2022 17,775
17,626
17,775
1.89 %

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~December 31, 2016~~

~~(in thousands, except shares)~~

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
   Sierra Hamilton LLC / Sierra Hamilton Finance, Inc.
      Energy First lien (2)(10) 12.25%/S (8) 12/15/2018 $ 25,000
$ 25,000
$ 16,012

First lien (3)(10) 12.25%/S (8) 12/15/2018 2,660
2,231
1,704

27,660
27,231
17,716
1.89 %
   Greenway Health, LLC (fka Vitera Healthcare Solutions, LLC)
      Software First lien (2) 6.00% (L + 5.00%/Q) 11/4/2020 1,891
1,880
1,865

Second lien (2) 9.25% (L + 8.25%/Q) 11/4/2021 14,000
13,448
13,650

15,891
15,328
15,515
1.65 %
   YP Holdings LLC / Print Media Holdings LLC (12)
   YP LLC / Print Media LLC
      Media First lien (2) 12.25% (L + 11.00%/M) 6/4/2018 15,267
15,197
15,191
1.62 %
   Netsmart Inc. / Netsmart Technologies, Inc.
      Healthcare Information Technology Second lien (2) 10.50% (L + 9.50%/Q) 10/19/2023 15,000
14,648
14,944
1.59 %
   Cvent, Inc.
      Software First lien (3) 6.00% (L + 5.00%/Q) 11/29/2023 5,000
4,963
5,064

Second lien (3)(10) 11.00% (L + 10.00%/Q) 5/29/2024 10,000
9,851
9,850

15,000
14,814
14,914
1.59 %
   Amerijet Holdings, Inc.
      Distribution & Logistics First lien (4)(10) 9.00% (L + 8.00%/M) 7/15/2021 12,536
12,449
12,442

First lien (4)(10) 9.00% (L + 8.00%/M) 7/15/2021 2,089
2,075
2,074

14,625
14,524
14,516
1.55 %
   SW Holdings, LLC
      Business Services Second lien (4)(10) 9.75% (L + 8.75%/Q) 12/30/2021 14,265
14,147
14,265
1.52 %
   Poseidon Intermediate, LLC
      Software Second lien (2)(10) 9.50% (L + 8.50%/Q) 8/15/2023 13,000
12,829
13,000
1.39 %
   Zywave, Inc.
      Software Second lien (4) 10.00% (L + 9.00%/Q) 11/17/2023 11,000
10,918
10,918
1.16 %
   Aricent Technologies
      Business Services Second lien (2) 9.50% (L + 8.50%/Q) 4/14/2022 12,500
12,316
10,719
1.14 %
   QC McKissock Investment, LLC (14)
   McKissock, LLC
      Education First lien (2)(10) 7.50% (L + 6.50%/Q) 8/5/2019 6,463
6,421
6,463

First lien (2)(10) 7.50% (L + 6.50%/Q) 8/5/2019 3,081
3,064
3,081

First lien (2)(10) 7.50% (L + 6.50%/Q) 8/5/2019 994
988
994

10,538
10,473
10,538
1.12 %
   Quest Software US Holdings Inc.
      Software First lien (2) 7.00% (L + 6.00%/Q) 10/31/2022 10,000
9,854
10,152
1.08 %
   Masergy Holdings, Inc.
      Business Services Second lien (2) 9.50% (L + 8.50%/Q) 12/16/2024 10,000
9,938
10,000
1.07 %
   PowerPlan Holdings, Inc.
      Software Second lien (2)(10) 10.00% (L + 9.00%/M) 2/23/2023 10,000
9,916
10,000
1.07 %
   FR Arsenal Holdings II Corp.
      Business Services First lien (2)(10) 8.25% (L + 7.25%/Q) 9/8/2022 9,975
9,879
9,875
1.05 %
   American Tire Distributors, Inc.
      Distribution & Logistics Subordinated (3) 10.25%/S 3/1/2022 9,700
9,523
9,353
1.00 %
   Harley Marine Services, Inc.
      Distribution & Logistics Second lien (2) 10.50% (L + 9.25%/Q) 12/20/2019 9,000
8,897
8,640
0.92 %

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~December 31, 2016~~

~~(in thousands, except shares)~~

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
   Ministry Brands, LLC
      Software First lien (3)(11) - Drawn 6.00% (L + 5.00%/Q) 12/2/2022 $ 350
$ 348
$ 348

Second lien (3) 10.25% (L + 9.25%/Q) 6/2/2023 7,840
7,782
7,781

8,190
8,130
8,129
0.87 %
   Lonestar Intermediate Super Holdings, LLC
      Business Services Subordinated (3) 10.00% (L + 9.00%/M) 8/31/2021 7,000
6,934
7,210
0.77 %
   J.D. Power and Associates
      Business Services Second lien (3) 9.50% (L + 8.50%/Q) 9/7/2024 7,000
6,898
7,035
0.75 %
   Confie Seguros Holding II Co.
      Consumer Services Second lien (2) 10.25% (L + 9.00%/M) 5/8/2019 6,957
6,952
6,919
0.74 %
   Sotera Defense Solutions, Inc. (Global Defense Technology & Systems, Inc.)
      Federal Services First lien (2) 9.00% (L + 7.50%/Q) 4/21/2017 6,396
6,389
6,300
0.67 %
   Solera LLC / Solera Finance, Inc.
      Software Subordinated (3) 10.50%/S 3/1/2024 5,000
4,768
5,650
0.60 %
   VF Holding Corp.
      Software Second lien (3) 10.00% (L + 9.00%/Q) 6/28/2024 5,000
4,952
4,950
0.53 %
   ADG, LLC
      Healthcare Services Second lien (3)(10) 10.00% (L + 9.00%/Q) 3/28/2024 5,000
4,926
4,925
0.53 %
   Vencore, Inc. (fka The SI Organization Inc.)
      Federal Services Second lien (3) 9.75% (L + 8.75%/Q) 5/23/2020 4,000
3,928
4,039
0.43 %
   Transtar Holding Company
      Distribution & Logistics Second lien (3) 13.50% (P + 9.75%/Q) (8) 10/9/2019 36,112
3,155
2,167

Second lien (2) 13.50% (P + 9.75%/Q) (8) 10/9/2019 28,300
28,011
1,698

64,412
31,166
3,865
0.41 %
   York Risk Services Holding Corp.
      Business Services Subordinated (3) 8.50%/S 10/1/2022 3,000
3,000
2,520
0.27 %
   Ensemble S Merger Sub, Inc.
      Software Subordinated (3) 9.00%/S 9/30/2023 2,000
1,939
2,135
0.23 %
   Education Management Corporation (19)
   Education Management II LLC
      Education First lien (2) 5.50% (L + 4.50%/Q) 7/2/2020 250
239
61

First lien (3) 5.50% (L + 4.50%/Q) 7/2/2020 141
136
35

First lien (2) 8.50% (L + 1.00% + 6.50% PIK/Q)* 7/2/2020 467
416
22

First lien (3) 8.50% (L + 1.00% + 6.50% PIK/Q)* 7/2/2020 263
235
12

1,121
1,026
130
0.01 %
Total Funded Debt Investments - United States $ 1,339,099
$ 1,290,033
$ 1,261,394
134.41 %
Total Funded Debt Investments $ 1,420,445
$ 1,369,904
$ 1,330,845
141.80 %
Equity - United States
   Tenawa Resource Holdings LLC (13)
   QID NGL LLC
      Energy Ordinary shares (7)(10) — — 5,290,997
$ 5,291
$ 6,434
0.69 %
   TWDiamondback Holdings Corp. (15)
      Distribution & Logistics Preferred shares (4)(10) — — 200
2,000
2,664
0.28 %

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~December 31, 2016~~

~~(in thousands, except shares)~~

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
   TW-NHME Holdings Corp. (20)
      Healthcare Services Preferred shares (4)(10) — — 100
$ 1,000
$ 1,497

Preferred shares (4)(10) — — 16
158
236

Preferred shares (4)(10) — — 6
68
91

1,226
1,824
0.19 %
   Ancora Acquisition LLC
      Education Preferred shares (6)(10) — — 372
83
393
0.04 %
   Education Management Corporation (19)
      Education Preferred shares (2) — — 3,331
200
1

Preferred shares (3) — — 1,879
113
1

Ordinary shares (2) — — 2,994,065
100
18

Ordinary shares (3) — — 1,688,976
56
10

469
30
— %
Total Shares - United States $ 9,069
$ 11,345
1.20 %
Warrants - United States
   YP Holdings LLC / Print Media Holdings LLC (12)
   YP Equity Investors LLC
      Media Warrants (5)(10) — 5/8/2022 5
$ —
$ 2,966
0.32 %
   IT'SUGAR LLC
      Retail Warrants (3)(10) — 10/23/2025 94,672
817
549
0.06 %
   ASP LCG Holdings, Inc.
      Education Warrants (3)(10) — 5/5/2026 622
37
949
0.10 %
   Ancora Acquisition LLC
      Education Warrants (6)(10) — 8/12/2020 20
—
—
— %
Total Warrants - United States $ 854
$ 4,464
0.48 %
Total Funded Investments $ 1,379,827
$ 1,346,654
143.48 %
Unfunded Debt Investments - United States
   Mister Car Wash Holdings, Inc.
      Consumer Services First lien (3)(11) - Undrawn — 12/14/2017 $ 1,667
$ (13 ) $ 8
— %
   DCA Investment Holding, LLC
      Healthcare Services First lien (3)(10)(11) - Undrawn — 7/2/2021 1,348
(13 ) —
— %
   iPipeline, Inc. (Internet Pipeline, Inc.)
      Software First lien (3)(10)(11) - Undrawn — 8/4/2021 1,000
(10 ) —
— %
   Valet Waste Holdings, Inc.
      Business Services First lien (3)(10)(11) - Undrawn — 9/24/2021 1,500
(19 ) —
— %
   VetCor Professional Practices LLC
      Consumer Services First lien (3)(10)(11) - Undrawn — 4/20/2021 2,700
(27 ) —

First lien (4)(10)(11) - Undrawn — 3/30/2018 127
(3 ) —

First lien (2)(10)(11) - Undrawn — 6/22/2018 1,644
(33 ) —

4,471
(63 ) —
— %
   Weston Solutions, Inc.
      Business Services First lien (3)(10)(11) - Undrawn — 12/31/2020 10,000
—
—
— %



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Non-Controlled/Non-Affiliated Investments
Funded Debt Investments - Canada
Dentalcorp Perfect Smile ULC**
Healthcare Services	Second lien (3)	10.02% (L + 7.50%/M)	6/1/2018	6/8/2026	$	12,130	$	12,032	$	11,948
	Second lien (8)	10.02% (L + 7.50%/M)	6/1/2018	6/8/2026	7,500		7,439		7,388
	Second lien (3)(10) - Drawn	10.02% (L + 7.50%/M)	6/1/2018	6/8/2026	2,797		2,772		2,754
					22,427		22,243		22,090		2.20	%
Total Funded Debt Investments - Canada					$	22,427	$	22,243	$	22,090	2.20	%
Funded Debt Investments - United Kingdom
Shine Acquisition Co. S.à.r.l / Boing US Holdco Inc.**
Consumer Services	Second lien (2)	10.09% (L + 7.50%/Q)	9/25/2017	10/3/2025	$	37,853	$	37,648	$	36,150
	Second lien (8)	10.09% (L + 7.50%/Q)	9/25/2017	10/3/2025	6,000		5,968		5,730
					43,853		43,616		41,880		4.16	%
Air Newco LLC**
Software	First lien (2)	7.14% (L + 4.75%/M)	5/25/2018	5/31/2024	20,125		20,079		19,987		1.99	%
Total Funded Debt Investments - United Kingdom					$	63,978	$	63,695	$	61,867	6.15	%
Funded Debt Investments - United States
Benevis Holding Corp.
Healthcare Services	First lien (2)(9)	8.86% (L + 6.32%/Q)	3/15/2018	3/15/2024	$	63,370	$	63,370	$	62,261
	First lien (8)(9)	8.86% (L + 6.32%/Q)	3/15/2018	3/15/2024	8,578		8,578		8,428
	First lien (3)(9)	8.86% (L + 6.32%/Q)	3/15/2018	3/15/2024	6,970		6,970		6,848
					78,918		78,918		77,537		7.71	%
Integro Parent Inc.
Business Services	First lien (2)(9)	8.48% (L + 5.75%/Q)	10/9/2015	10/31/2022	51,245		50,952		51,245
	Second lien (8)(9)	11.97% (L + 9.25%/Q)	10/9/2015	10/30/2023	10,000		9,930		10,000
	First lien (3)(9)(10) - Drawn	7.23% (L + 4.50%/Q)	6/8/2018	10/30/2021	2,057		2,046		2,057
					63,302		62,928		63,302		6.29	%
Kronos Incorporated
Software	Second lien (2)	10.79% (L + 8.25%/Q)	10/26/2012	11/1/2024	36,000		35,560		35,657
	Second lien (3)	10.79% (L + 8.25%/Q)	10/26/2012	11/1/2024	21,147		21,145		20,945
					57,147		56,705		56,602		5.62	%
CentralSquare Technologies, LLC
Software	Second lien (3)	10.02% (L + 7.50%/M)	8/15/2018	8/31/2026	47,838		47,241		47,838
	Second lien (8)	10.02% (L + 7.50%/M)	8/15/2018	8/31/2026	7,500		7,406		7,500
					55,338		54,647		55,338		5.50	%
Dealer Tire, LLC
Distribution & Logistics	First lien (2)	8.02% (L + 5.50%/M)	12/4/2018	12/12/2025	53,784		52,444		51,296		5.10	%
PhyNet Dermatology LLC
Healthcare Services	First lien (2)(9)	8.02% (L + 5.50%/M)	9/17/2018	8/16/2024	50,879		50,391		50,371		5.01	%
NM GRC Holdco, LLC
Business Services	First lien (2)(9)	8.80% (L + 6.00%/Q)	2/9/2018	2/9/2024	38,735		38,565		38,542
	First lien (2)(9)(10) - Drawn	8.80% (L + 6.00%/Q)	2/9/2018	2/9/2024	10,766		10,715		10,739
					49,501		49,280		49,281		4.90	%
Nomad Buyer, Inc.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, ~~2016~~2018

(in thousands, except shares)

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
   Zywave, Inc.
      Software First lien (3)(11) - Undrawn — 11/17/2022 $ 2,000
$ (15 ) $ (15 ) — %
   Ansira Holdings, Inc.
      Business Services First lien (3)(11) - Undrawn — 12/20/2018 3,818
(19 ) (19 ) — %
   Marketo, Inc.
      Software First lien (3)(10)(11) - Undrawn — 8/16/2021 1,788
(27 ) (27 ) — %
   Ministry Brands, LLC
      Software First lien (3)(11) - Undrawn — 12/2/2022 650
(3 ) (3 )
First lien (3)(11) - Undrawn — 12/2/2017 5,169
(26 ) (26 )
Second lien (3)(11) - Undrawn — 12/2/2017 2,160
(16 ) (16 )
7,979
(45 ) (45 ) (0.01 )%
Total Unfunded Debt Investments - United States $ 35,571
(224 ) $ (98 ) (0.01 )%
Total Non-Controlled/Non-Affiliated Investments $ 1,379,603
$ 1,346,556
143.47 %
Non-Controlled/Affiliated Investments(22)
Funded Debt Investments - United States
   Edmentum Ultimate Holdings, LLC (16)
      Education Subordinated (3)(10) 8.50% PIK/Q* 6/9/2020 $ 4,124
$ 4,118
$ 4,124

Subordinated (2)(10) 10.00% PIK/Q* 6/9/2020 15,163
15,163
12,814

Subordinated (3)(10) 10.00% PIK/Q* 6/9/2020 3,730
3,730
3,152

23,017
23,011
20,090
2.14 %
   Permian Holdco 1, Inc. (21)
   Permian Holdco 2, Inc.
      Energy Subordinated (3)(10) 14.00% PIK/Q* 10/15/2021 1,749
1,749
1,749
0.19 %
Total Funded Debt Investments - United States $ 24,766
$ 24,760
$ 21,839
2.33 %
Equity - United States
   NMFC Senior Loan Program I LLC**
      Investment Fund Membership interest (3)(10) — — —
$ 23,000
$ 23,000
2.45 %
   Permian Holdco 1, Inc. (21)
      Energy Preferred shares (3)(10)(17) — — 1,394,237
5,866
7,668

Ordinary shares (3)(10) — — 1,366,452
1,350
1,776

7,216
9,444
1.00 %
   Edmentum Ultimate Holdings, LLC (16)
      Education Ordinary shares (3)(10) — — 123,968
11
1,693

Ordinary shares (2)(10) — — 107,143
9
1,464

20
3,157
0.34 %
Total Shares - United States $ 30,236
$ 35,601
3.79 %



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Healthcare Services	First lien (2)	7.38% (L + 5.00%/M)	8/3/2018	8/1/2025	$	48,953	$	47,538	$	46,383	4.61	%
Brave Parent Holdings, Inc.
Software	Second lien (5)	10.02% (L + 7.50%/M)	4/17/2018	4/17/2026	22,500		22,394		22,416
	Second lien (2)	10.02% (L + 7.50%/M)	7/18/2018	4/17/2026	16,624		16,464		16,562
	Second lien (8)	10.02% (L + 7.50%/M)	7/18/2018	4/17/2026	6,000		5,942		5,978
					45,124		44,800		44,956		4.47	%
Associations, Inc.
Consumer Services	First lien (2)(9)	9.40% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	40,855		40,613		40,599
	First lien (3)(9)(10) - Drawn	9.40% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	3,625		3,603		3,602
					44,480		44,216		44,201		4.39	%
Quest Software US Holdings Inc.
Software	Second lien (2)	10.78% (L + 8.25%/Q)	5/17/2018	5/18/2026	43,697		43,281		43,224		4.30	%
Tenawa Resource Holdings LLC (13)
Tenawa Resource Management LLC
Energy	First lien (3)(9)	10.90% (Base + 8.50%/Q)	5/12/2014	10/30/2024	39,500		39,442		39,500		3.93	%
Frontline Technologies Group Holdings, LLC
Education	First lien (4)(9)	9.02% (L + 6.50%/M)	9/18/2017	9/18/2023	22,387		22,248		22,387
	First lien (2)(9)	9.02% (L + 6.50%/M)	9/18/2017	9/18/2023	16,582		16,480		16,582
					38,969		38,728		38,969		3.87	%
Salient CRGT Inc.
Federal Services	First lien (2)	8.27% (L + 5.75%/M)	1/6/2015	2/28/2022	38,275		37,928		37,701		3.75	%
Trader Interactive, LLC
Business Services	First lien (2)(9)	9.02% (L + 6.50%/M)	6/15/2017	6/17/2024	37,259		37,044		37,259		3.70	%
Peraton Holding Corp. (fka MHVC Acquisition Corp.)
Federal Services	First lien (2)	8.06% (L + 5.25%/Q)	4/25/2017	4/29/2024	37,285		37,134		36,353		3.61	%
TDG Group Holding Company
Consumer Services	First lien (2)(9)	8.30% (L + 5.50%/Q)	5/22/2018	5/31/2024	30,112		29,974		29,962
	First lien (2)(9)	8.30% (L + 5.50%/Q)	5/22/2018	5/31/2024	3,354		3,338		3,337
	First lien (3)(9)(10) - Drawn	8.02% (L + 5.50%/M)	5/22/2018	5/31/2024	1,261		1,255		1,255
					34,727		34,567		34,554		3.43	%
Geo Parent Corporation
Business Services	First lien (2)	8.09% (L + 5.50%/M)	12/13/2018	12/19/2025	33,578		33,410		33,410		3.32	%
Finalsite Holdings, Inc.
Software	First lien (4)(9)	8.03% (L + 5.50%/Q)	9/28/2018	9/25/2024	22,444		22,281		22,275
	First lien (2)(9)	8.03% (L + 5.50%/Q)	9/28/2018	9/25/2024	11,085		11,005		11,002
					33,529		33,286		33,277		3.31	%
Navicure, Inc.
Healthcare Services	Second lien (2)	10.02% (L + 7.50%/M)	10/23/2017	10/31/2025	25,970		25,907		25,580
	Second lien (8)	10.02% (L + 7.50%/M)	10/23/2017	10/31/2025	6,000		5,985		5,910
					31,970		31,892		31,490		3.13	%
iCIMS, Inc.
Software	First lien (8)(9)	8.94% (L + 6.50%/M)	9/12/2018	9/12/2024	31,636		31,332		31,320		3.11	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, ~~2016~~2018

(in thousands, except shares)

Portfolio Company, Location and Industry(1)
Type of
Investment
Interest Rate(9)
Maturity/Expiration
Date

Principal
Amount,
Par Value
or Shares
Cost Fair Value
Percent of
Net
Assets
Unfunded Debt Investments - United States
   Edmentum Ultimate Holdings, LLC (16)
   Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
      Education Second lien (3)(10)(11) - Undrawn — 6/9/2020 $ 4,881
$ —
$ —
— %
   Permian Holdco 1, Inc. (21)
   Permian Holdco 2, Inc.
      Energy Subordinated (3)(10)(11) - Undrawn — 10/15/2021 1,025
—
—
— %
Total Unfunded Debt Investments - United States $ 5,906
$ —
$ —
— %
Total Non-Controlled/Affiliated Investments $ 54,996
$ 57,440
6.12 %
Controlled Investments(23)
Funded Debt Investments - United States
   UniTek Global Services, Inc.
      Business Services First lien (2)(10) 8.50% (L + 7.50%/Q) 1/13/2019 $ 10,846
$ 10,846
$ 11,063

First lien (2)(10) 9.50% (L + 7.50% + 1.00% PIK/Q)* 1/13/2019 4,784
4,784
4,879

Subordinated (2)(10) 15.00% PIK/Q* 7/13/2019 1,726
1,726
1,760

Subordinated (3)(10) 15.00% PIK/Q* 7/13/2019 1,032
1,032
1,054

18,388
18,388
18,756
2.00 %
Total Funded Debt Investments - United States $ 18,388
$ 18,388
$ 18,756
2.00 %
Equity - United States
   NMFC Senior Loan Program II LLC**
      Investment Fund Membership interest (3)(10) — — —
$ 71,460
$ 71,460
7.61 %
   UniTek Global Services, Inc.
      Business Services Preferred shares (2)(10)(18) — — 19,048,426
16,668
17,207

Preferred shares (3)(10)(18) — — 5,264,079
4,606
4,755

Ordinary shares (2)(10) — — 2,096,477
1,925
12,256

Ordinary shares (3)(10) — — 579,366
532
3,387

23,731
37,605
4.01 %
   New Mountain Net Lease Corporation
      Net Lease Ordinary shares (3)(10) — — 270,000
27,000
27,000
2.88 %
Total Shares - United States $ 122,191
$ 136,065
14.50 %
Total Funded Investments $ 140,579
$ 154,821
16.50 %
Unfunded Debt Investments - United States
   UniTek Global Services, Inc.
      Business Services First lien (3)(10)(11) - Undrawn — 1/13/2019 $ 2,048
$ —
$ —

First lien (3)(10)(11) - Undrawn — 1/13/2019 758
—
—

2,806
—
—
— %
Total Unfunded Debt Investments - United States $ 2,806
$ —
$ —
— %
Total Controlled Investments $ 140,579
$ 154,821
16.50 %
Total Investments $ 1,575,178
$ 1,558,817
166.09 %



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Ansira Holdings, Inc.
Business Services	First lien (2)	8.27% (L + 5.75%/M)	12/19/2016	12/20/2022	$	28,744	$	28,645	$	28,615
	First lien (3)(10) - Drawn	8.27% (L + 5.75%/M)	12/19/2016	12/20/2022	1,791		1,784		1,782
					30,535		30,429		30,397		3.02	%
Keystone Acquisition Corp.
Healthcare Services	First lien (2)	8.05% (L + 5.25%/Q)	5/10/2017	5/1/2024	24,732		24,597		24,238
	Second lien (2)	12.05% (L + 9.25%/Q)	5/10/2017	5/1/2025	4,500		4,461		4,444
					29,232		29,058		28,682		2.85	%
Sovos Brands Intermediate, Inc.
Food & Beverage	First lien (2)	7.64% (L + 5.00%/M)	11/16/2018	11/20/2025	28,240		28,099		27,957		2.78	%
EN Engineering, LLC
Business Services	First lien (2)(9)	7.02% (L + 4.50%/M)	7/30/2015	6/30/2021	23,347		23,226		23,347
	First lien (2)(9)	7.02% (L + 4.50%/M)	7/30/2015	6/30/2021	1,350		1,343		1,350
					24,697		24,569		24,697		2.45	%
SW Holdings, LLC
Business Services	Second lien (4)(9)	11.55% (L + 8.75%/Q)	6/30/2015	12/30/2021	18,161		18,052		18,161
	Second lien (3)(9)	11.55% (L + 8.75%/Q)	4/16/2018	12/30/2021	6,181		6,130		6,181
					24,342		24,182		24,342		2.42	%
DCA Investment Holding, LLC
Healthcare Services	First lien (2)(9)	8.05% (L + 5.25%/Q)	7/2/2015	7/2/2021	17,274		17,194		17,274
	First lien (3)(9)(10) - Drawn	7.98% (L + 5.25%/Q)	12/20/2017	7/2/2021	6,702		6,647		6,702
	First lien (3)(9)(10) - Drawn	9.75% (P + 4.25%/Q)	7/2/2015	7/2/2021	144		142		144
					24,120		23,983		24,120		2.40	%
iPipeline, Inc. (Internet Pipeline, Inc.)
Software	First lien (4)(9)	7.28% (L + 4.75%/M)	8/4/2015	8/4/2022	17,415		17,314		17,415
	First lien (4)(9)	7.28% (L + 4.75%/M)	6/16/2017	8/4/2022	4,531		4,514		4,531
	First lien (2)(9)	7.28% (L + 4.75%/M)	9/25/2017	8/4/2022	1,149		1,145		1,149
	First lien (4)(9)	7.28% (L + 4.75%/M)	9/25/2017	8/4/2022	506		504		506
					23,601		23,477		23,601		2.35	%
CRCI Longhorn Holdings, Inc.
Business Services	Second lien (3)	9.64% (L + 7.25%/M)	8/2/2018	8/10/2026	14,349		14,296		14,295
	Second lien (8)	9.64% (L + 7.25%/M)	8/2/2018	8/10/2026	7,500		7,473		7,472
					21,849		21,769		21,767		2.16	%
AAC Holding Corp.
Education	First lien (2)(9)	10.60% (L + 8.25%/M)	9/30/2015	9/30/2020	22,403		22,269		21,578		2.14	%
Avatar Topco, Inc. (22)
EAB Global, Inc.
Education	Second lien (3)	10.16% (L + 7.50%/Q)	11/17/2017	11/17/2025	13,950		13,762		13,811
	Second lien (8)	10.16% (L + 7.50%/Q)	11/17/2017	11/17/2025	7,500		7,399		7,425
					21,450		21,161		21,236		2.11	%
Help/Systems Holdings, Inc.
Software	Second lien (5)	10.27% (L + 7.75%/M)	3/23/2018	3/27/2026	20,231		20,136		20,029		1.99	%
Symplr Software Intermediate Holdings, Inc. (23)
Caliper Software, Inc.
Healthcare Information Technology	First lien (4)(9)	8.02% (L + 5.50%/M)	11/30/2018	11/28/2025	15,000		14,888		14,888
	First lien (2)(9)	8.02% (L + 5.50%/M)	11/30/2018	11/28/2025	5,171		5,133		5,132
					20,171		20,021		20,020		1.99	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, ~~2016~~2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)		Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
SSH Group Holdings, Inc.
Education	Second lien (2)	10.77% (L + 8.25%/Q)		7/26/2018	7/30/2026	$	20,116	$	20,019	$	19,960	1.98	%
DiversiTech Holdings, Inc.
Distribution & Logistics	Second lien (3)	10.30% (L + 7.50%/Q)		5/18/2017	6/2/2025	12,000		11,897		11,580
	Second lien (8)	10.30% (L + 7.50%/Q)		5/18/2017	6/2/2025	7,500		7,436		7,238
						19,500		19,333		18,818		1.87	%
FR Arsenal Holdings II Corp.
Business Services	First lien (2)(9)	10.06% (L + 7.25%/Q)		9/29/2016	9/8/2022	18,545		18,404		18,545		1.84	%
Integral Ad Science, Inc.
Software	First lien (8)(9)	9.78% (L + 6.00% + 1.25% PIK/M)*		7/19/2018	7/19/2024	18,678		18,503		18,491		1.84	%
The Kleinfelder Group, Inc.			��
Business Services	First lien (4)	7.17% (L + 4.75%/M)		12/18/2018	11/29/2024	17,500		17,413		17,413		1.73	%
Navex Topco, Inc.
Software	Second lien (2)	9.53% (L + 7.00%/M)		8/9/2018	9/4/2026	16,807		16,725		16,218		1.61	%
TIBCO Software Inc.
Software	Subordinated (3)	11.38%/S		11/24/2014	12/1/2021	15,000		14,776		15,750		1.57	%
Hill International, Inc.**
Business Services	First lien (2)(9)	8.55% (L + 5.75%/Q)		6/21/2017	6/21/2023	15,563		15,502		15,563		1.55	%
QC McKissock Investment, LLC (14)
McKissock, LLC
Education	First lien (2)(9)	8.55% (L + 5.75%/Q)		8/6/2014	8/5/2021	6,351		6,330		6,351
	First lien (2)(9)	8.55% (L + 5.75%/Q)		8/24/2018	8/5/2021	3,649		3,616		3,649
	First lien (2)(9)	8.55% (L + 5.75%/Q)		8/6/2014	8/5/2021	3,028		3,019		3,028
	First lien (2)(9)	8.55% (L + 5.75%/Q)		8/6/2014	8/5/2021	977		974		977
	First lien (2)(9)	8.55% (L + 5.75%/Q)		8/3/2018	8/5/2021	842		835		842
	First lien (2)(9)	8.55% (L + 5.75%/Q)		5/23/2018	8/5/2021	572		564		572
						15,419		15,338		15,419		1.53	%
OEConnection LLC
Business Services	Second lien (3)	10.53% (L + 8.00%/M)		11/22/2017	11/22/2025	7,660		7,564		7,602
	Second lien (8)	10.53% (L + 8.00%/M)		11/22/2017	11/22/2025	7,500		7,407		7,443
						15,160		14,971		15,045		1.49	%
Netsmart Inc. / Netsmart Technologies, Inc.
Healthcare Information Technology	Second lien (2)	10.03% (L + 7.50%/Q)		4/18/2016	10/19/2023	15,000		14,727		14,925		1.48	%
Xactly Corporation
Software	First lien (4)(9)	9.78% (L + 7.25%/M)		7/31/2017	7/29/2022	14,690		14,577		14,690		1.46	%
Transcendia Holdings, Inc.
Packaging	Second lien (8)	10.52% (L + 8.00%/M)		6/28/2017	5/30/2025	7,500		7,411		7,385
	Second lien (3)	10.52% (L + 8.00%/M)		6/28/2017	5/30/2025	7,000		6,917		6,893
						14,500		14,328		14,278		1.42	%
Alegeus Technologies Holdings Corp.
Healthcare Services	First lien (2)(9)	8.66% (L + 6.25%/Q)		9/5/2018	9/5/2024	13,444		13,378		13,376		1.33	%
NorthStar Financial Services Group, LLC
Software	Second lien (5)	10.10% (L + 7.50%/M)		5/23/2018	5/25/2026	13,450		13,418		13,316		1.32	%
Project Accelerate Parent, LLC
Business Services	Second lien (8)(9)	10.89% (L + 8.50%/M)		1/2/2018	1/2/2026	7,500		7,414		7,406
	Second lien (3)(9)	10.89% (L + 8.50%/M)		1/2/2018	1/2/2026	5,973		5,905		5,898
						13,473		13,319		13,304		1.32	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Castle Management Borrower LLC
Business Services	First lien (2)(9)	8.87% (L + 6.25%/Q)	5/31/2018	2/15/2024	$	13,347	$	13,286	$	13,281	1.32	%
Ministry Brands, LLC
Software	First lien (2)	6.52% (L + 4.00%/M)	12/7/2016	12/2/2022	2,962		2,952		2,962
	Second lien (8)(9)	11.77% (L + 9.25%/M)	12/7/2016	6/2/2023	7,840		7,796		7,840
	Second lien (3)(9)	11.77% (L + 9.25%/M)	12/7/2016	6/2/2023	2,160		2,148		2,160
					12,962		12,896		12,962		1.29	%
BackOffice Associates Holdings, LLC
Business Services	First lien (2)(9)	13.03% (L + 10.50%/M)	8/25/2017	8/25/2023	13,262		13,169		12,477
	First lien (3)(9)(10) - Drawn	13.03% (L + 7.50% + 3.00% PIK/M)*	8/25/2017	8/25/2023	17		17		16
					13,279		13,186		12,493		1.24	%
Zywave, Inc.
Software	Second lien (4)(9)	11.65% (L + 9.00%/Q)	11/22/2016	11/17/2023	11,000		10,936		11,000
	First lien (3)(9)(10) - Drawn	7.52% (L + 5.00%/M)	11/22/2016	11/17/2022	1,200		1,191		1,200
					12,200		12,127		12,200		1.21	%
CHA Holdings, Inc.
Business Services	Second lien (4)	11.55% (L + 8.75%/Q)	4/3/2018	4/10/2026	7,012		6,946		7,103
	Second lien (3)	11.55% (L + 8.75%/Q)	4/3/2018	4/10/2026	4,453		4,411		4,511
					11,465		11,357		11,614		1.15	%
PPVA Black Elk (Equity) LLC
Business Services	Subordinated (3)(9)	—	5/3/2013	—	14,500		14,500		11,362		1.13	%
Amerijet Holdings, Inc.
Distribution & Logistics	First lien (4)(9)	10.52% (L + 8.00%/M)	7/15/2016	7/15/2021	8,972		8,935		8,972
	First lien (4)(9)	10.52% (L + 8.00%/M)	7/15/2016	7/15/2021	1,495		1,489		1,495
					10,467		10,424		10,467		1.04	%
Vectra Co.
Business Products	Second lien (8)	9.77% (L + 7.25%/M)	2/23/2018	3/8/2026	10,788		10,751		10,465		1.04	%
Masergy Holdings, Inc.
Business Services	Second lien (2)	10.31% (L + 7.50%/Q)	12/14/2016	12/16/2024	10,500		10,452		10,290		1.02	%
VT Topco, Inc.
Business Services	Second lien (4)	9.80% (L + 7.00%/Q)	8/14/2018	7/31/2026	10,000		9,976		9,987		0.99	%
Affinity Dental Management, Inc.
Healthcare Services	First lien (2)(9)	8.57% (L + 6.00%/S)	9/15/2017	9/15/2023	4,344		4,308		4,344
	First lien (3)(9)(10) - Drawn	8.61% (L + 6.00%/S)	9/15/2017	9/15/2023	5,277		5,240		5,277
					9,621		9,548		9,621		0.96	%
AgKnowledge Holdings Company, Inc.
Business Services	First Lien (4)	7.27% (L + 4.75%/Q)	11/30/2018	7/23/2023	9,450		9,403		9,426		0.94	%
WD Wolverine Holdings, LLC
Healthcare Services	First lien (2)	8.02% (L + 5.50%/M)	2/22/2017	8/16/2022	9,488		9,269		9,179		0.91	%
Wrike, Inc.
Software	First lien (8)	9.28% (L + 6.75%/M)	12/31/2018	12/31/2024	9,067		8,976		8,976		0.89	%
JAMF Holdings, Inc.
Software	First lien (8)(9)	10.61% (L + 8.00%/Q)	11/13/2017	11/11/2022	8,757		8,686		8,757		0.87	%
Idera, Inc.
Software	Second lien (4)	11.53% (L + 9.00%/M)	6/27/2017	6/27/2025	8,000		7,895		8,020		0.80	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
J.D. Power (fka J.D. Power and Associates)
Business Services	Second lien (3)	11.02% (L + 8.50%/M)	6/9/2016	9/7/2024	$	7,583	$	7,508	$	7,508	0.75	%
CP VI Bella Midco, LLC
Healthcare Services	Second lien (3)	9.27% (L + 6.75%/M)	1/25/2018	12/29/2025	6,732		6,701		6,631		0.66	%
DealerSocket, Inc.
Software	First lien (2)	7.27% (L + 4.75%/M)	4/16/2018	4/26/2023	6,678		6,633		6,597		0.66	%
MH Sub I, LLC (Micro Holding Corp.)
Software	Second lien (2)	10.00% (L + 7.50%/M)	8/16/2017	9/15/2025	7,000		6,938		6,545		0.65	%
Restaurant Technologies, Inc.
Business Services	Second lien (4)	8.90% (L + 6.50%/Q)	9/24/2018	10/1/2026	6,722		6,705		6,520		0.65	%
DG Investment Intermediate Holdings 2, Inc. (aka Convergint Technologies Holdings, LLC)
Business Services	Second lien (3)	9.27% (L + 6.75%/M)	1/29/2018	2/2/2026	6,732		6,702		6,429		0.64	%
First American Payment Systems, L.P.
Business Services	First lien (2)	7.29% (L + 4.75%/Q)	1/3/2017	1/5/2024	6,391		6,342		6,359		0.63	%
Solera LLC / Solera Finance, Inc.
Software	Subordinated (3)	10.50%/S	2/29/2016	3/1/2024	5,000		4,816		5,350		0.53	%
ADG, LLC
Healthcare Services	Second lien (3)(9)	11.88% (L + 9.00%/S)	10/3/2016	3/28/2024	5,000		4,942		4,578		0.45	%
York Risk Services Holding Corp.
Business Services	Subordinated (3)	8.50%/S	9/17/2014	10/1/2022	3,000		3,000		2,100		0.20	%
Ensemble S Merger Sub, Inc.
Software	Subordinated (3)	9.00%/S	9/21/2015	9/30/2023	2,000		1,953		2,010		0.20	%
Education Management Corporation (12)
Education Management II LLC	First Lien (2)	11.00% (P + 5.50%/Q) (24)	1/5/2015	7/2/2020	211		205		15
Education	First Lien (3)	11.00% (P + 5.50%/Q) (24)	1/5/2015	7/2/2020	119		116		8
	First Lien (2)	14.00% (P + 8.50%/Q) (24)	1/5/2015	7/2/2020	475		437		19
	First Lien (3)	14.00% (P + 8.50%/Q) (24)	1/5/2015	7/2/2020	268		246		11
					1,073		1,004		53		0.01	%
PPVA Fund, L.P.
Business Services	Collateralized Financing (25)	—	11/7/2014	—	—		—		—		—	%
Total Funded Debt Investments - United States					$	1,733,369	$	1,719,771	$	1,709,641	169.89	%
Total Funded Debt Investments					$	1,819,774	$	1,805,709	$	1,793,598	178.24	%
Equity - Hong Kong
Bach Special Limited (Bach Preference Limited)**
Education	Preferred shares (3)(9)(21)	—	9/1/2017	—	66,528		$	6,573	$	6,653	0.66	%
Total Shares - Hong Kong							$	6,573	$	6,653	0.66	%
Equity - United States
Avatar Topco, Inc.
Education	Preferred shares (3)(9)(22)	—	11/17/2017	—	35,750		$	40,247	$	39,890	3.96	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost			Fair Value			Percent of Net Assets
Tenawa Resource Holdings LLC (13)
QID NGL LLC	Preferred shares (6)(9)	—	10/30/2017	—	1,623,385		$	1,623		$	2,717
Energy	Ordinary shares (6)(9)	—	5/12/2014	—	5,290,997		5,291			8,412
							6,914			11,129			1.11	%
Symplr Software Intermediate Holdings, Inc.
Healthcare Information Technology	Preferred Shares (4)(9)(23)	—	11/30/2018	—	7,500		7,470			7,469
	Preferred Shares (3)(9)(23)	—	11/30/2018	—	2,586		2,575			2,575
							10,045			10,044			1.00	%
Education Management Corporation (12)
Education	Preferred shares (2)	—	1/5/2015	—	3,331		200			—
	Preferred shares (3)	—	1/5/2015	—	1,879		113			—
	Ordinary shares (2)	—	1/5/2015	—	2,994,065		100			—
	Ordinary shares (3)	—	1/5/2015	—	1,688,976		56			—
							469			—			—	%
Total Shares - United States							$	57,675		$	61,063		6.07	%
Total Shares							$	64,248		$	67,716		6.73	%
Warrants - United States
ASP LCG Holdings, Inc.
Education	Warrants (3)(9)	—	5/5/2014	5/5/2026	622		$	37		$	664		0.07	%
Total Warrants - United States							$	37		$	664		0.07	%
Total Funded Investments							$	1,869,994		$	1,861,978		185.04	%
Unfunded Debt Investments - Canada
Dentalcorp Perfect Smile ULC**
Healthcare Services	Second lien (3)(10) - Undrawn	—	6/1/2018	6/6/2020	$	2,110	$	2		$	(32	)	(0.00	)%
Total Unfunded Debt Investments - Canada					$	2,110	$	2		$	(32	)	(0.00	)%
Unfunded Debt Investments - United States
DCA Investment Holding, LLC
Healthcare Services	First lien (3)(9)(10) - Undrawn	—	12/20/2017	12/20/2019	$	6,755	$	(59	)	$	—
	First lien (3)(9)(10) - Undrawn	—	7/2/2015	7/2/2021	1,956		(20		)	—
					8,711		(79		)	—			—	%
iPipeline, Inc. (Internet Pipeline, Inc.)
Software	First lien (3)(9)(10) - Undrawn	—	8/4/2015	8/4/2021	1,000		(10		)	—			—	%
Ministry Brands, LLC
Software	First lien (3)(10) - Undrawn	—	12/7/2016	12/2/2022	1,000		(5		)	—			—	%
Zywave, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	11/22/2016	11/17/2022	800		(6		)	—			—	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost			Fair Value			Percent of Net Assets
Trader Interactive, LLC
Business Services	First lien (3)(9)(10) - Undrawn	—	6/15/2017	6/15/2023	$	1,673	$	(13	)	$	—		—	%
Xactly Corporation
Software	First lien (3)(9)(10) - Undrawn	—	7/31/2017	7/29/2022	992		(10		)	—			—	%
Integro Parent Inc.
Business Services	First lien (3)(9)(10) - Undrawn	—	6/8/2018	10/30/2021	4,686		(23		)	—			—	%
Affinity Dental Management, Inc.
Healthcare Services	First lien (3)(9)(10) - Undrawn	—	9/15/2017	3/15/2019	6,307		(16		)	—
	First lien (3)(9)(10) - Undrawn	—	9/15/2017	3/15/2023	1,738		(17		)	—
					8,045		(33		)	—			—	%
Frontline Technologies Group Holdings, LLC
Education	First lien (3)(9)(10) - Undrawn	—	9/18/2017	9/18/2019	7,738		(58		)	—			—	%
JAMF Holdings, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	11/13/2017	11/11/2022	750		(8		)	—			—	%
AgKnowledge Holdings Company, Inc.
Business Services	First lien (3)(10) - Undrawn	—	11/30/2018	7/21/2023	526		(3		)	(1		)	(0.00	)%
NM GRC Holdco, LLC
Business Services	First lien (2)(9)(10) - Undrawn	—	2/9/2018	2/9/2020	771		(2		)	(2		)	(0.00	)%
DealerSocket, Inc.
Software	First lien (3)(10) - Undrawn	—	4/16/2018	4/26/2023	560		(4		)	(7		)	(0.00	)%
Wrike, Inc.
Software	First lien (3)(10) - Undrawn	—	12/31/2018	12/31/2024	933		(9		)	(9		)	(0.00	)%
Integral Ad Science, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	7/19/2018	7/19/2023	1,429		(14		)	(14		)	(0.00	)%
Finalsite Holdings, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	9/25/2018	9/25/2024	2,521		(19		)	(19		)	(0.00	)%
TDG Group Holding Company
Consumer Services	First lien (3)(9)(10) - Undrawn	—	5/22/2018	5/31/2024	3,783		(19		)	(19		)	(0.00	)%
iCIMS, Inc.
Software	First lien (3)(9)(10) - Undrawn	—	9/12/2018	9/12/2024	1,977		(20		)	(20		)	(0.00	)%
Ansira Holdings, Inc.
Business Services	First lien (3)(10) - Undrawn	—	12/19/2016	4/16/2020	5,433		(14		)	(24		)	(0.00	)%
BackOffice Associates Holdings, LLC
Business Services	First lien (3)(9)(10) - Undrawn	—	8/25/2017	8/25/2023	862		(7		)	(51		)	(0.01	)%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost			Fair Value			Percent of Net Assets
Associations, Inc.
Consumer Services	First lien (3)(9)(10) - Undrawn	—	7/30/2018	7/30/2021	$	6,557	$	(41	)	$	(41	)
	First lien (3)(9)(10) - Undrawn	—	7/30/2018	7/30/2024	2,033		(13		)	(13		)
					8,590		(54		)	(54		)	(0.01	)%
Diligent Corporation
Software	First lien (3)(9)(10) - Undrawn	—	12/19/2018	12/19/2020	13,431		(84		)	(84		)	(0.01	)%
Salient CRGT Inc.
Federal Services	First lien (3)(10) - Undrawn	—	6/26/2018	11/29/2021	6,125		(490		)	(92		)	(0.01	)%
PhyNet Dermatology LLC
Healthcare Services	First lien (3)(9)(10) - Undrawn	—	9/17/2018	8/16/2020	45,305		(227		)	(227		)	(0.02	)%
Total Unfunded Debt Investments - United States					$	127,641	$	(1,211	)	$	(623	)	(0.06	)%
Total Unfunded Debt Investments					$	129,751	$	(1,209	)	$	(655	)	(0.06	)%
Total Non-Controlled/Non-Affiliated Investments							$	1,868,785		$	1,861,323		184.98	%
Non-Controlled/Affiliated Investments(26)
Funded Debt Investments - United States
Permian Holdco 1, Inc.
Permian Holdco 2, Inc.
Permian Holdco 3, Inc.
Energy	First lien (3)(9)(10) - Drawn	8.87% (L + 6.50%/M)	6/14/2018	6/30/2022	$	17,750	$	17,750		$	17,750
	First lien (3)(9)	14.85% (L + 7.50% + 5.00% PIK/Q)*	6/14/2018	6/30/2022	10,101		10,101			10,101
	Subordinated (3)(9)	14.00% PIK/Q*	10/31/2016	10/15/2021	2,303		2,303			2,187
	Subordinated (3)(9)	18.00% PIK/Q*	12/26/2018	6/30/2022	2,054		2,054			2,054
	Subordinated (3)(9)	14.00% PIK/Q*	10/31/2016	10/15/2021	1,186		1,186			1,127
					33,394		33,394			33,219			3.30	%
Total Funded Debt Investments - United States					$	33,394	$	33,394		$	33,219		3.30	%
Equity - United States
NMFC Senior Loan Program I LLC**
Investment Fund	Membership interest (3)(9)	—	6/13/2014	—	—		$	23,000		$	23,000		2.29	%
Sierra Hamilton Holdings Corporation
Energy	Ordinary shares (2)(9)	—	7/31/2017	—	25,000,000		11,501			11,271
	Ordinary shares (3)(9)	—	7/31/2017	—	2,786,000		1,281			1,256
							12,782			12,527			1.24	%
Permian Holdco 1, Inc.
Energy	Preferred shares (3)(9)(16)	—	10/31/2016	—	1,766,177		7,912			8,257
	Ordinary shares (3)(9)	—	10/31/2016	—	1,366,452		1,350			490
							9,262			8,747			0.87	%
Total Shares - United States							$	45,044		$	44,274		4.40	%
Total Funded Investments							$	78,438		$	77,493		7.70	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Unfunded Debt Investments - United States
Permian Holdco 3, Inc.
Energy	First lien (3)(9)(10) - Undrawn	—	6/14/2018	6/30/2022	$	2,250	$	—	$	—	—	%
Total Unfunded Debt Investments - United States					$	2,250	$	—	$	—	—	%
Total Non-Controlled/Affiliated Investments							$	78,438	$	77,493	7.70	%
Controlled Investments(27)
Funded Debt Investments - United States
Edmentum Ultimate Holdings, LLC (15)
Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
Education	First lien (2)	11.03% (L + 4.50% + 4.00% PIK/Q)*	8/6/2018	6/9/2021	$	8,490	$	7,245	$	7,004
	Second lien (3)(9)	7.00% PIK/Q*	2/23/2018	12/9/2021	11,184		10,569		10,346
	Second lien (3)(9)(10) - Drawn	5.00% PIK/Q*	6/9/2015	12/9/2021	1,671		1,671		1,671
	Subordinated (3)(9)	8.50% PIK/Q*	6/9/2015	6/9/2020	4,891		4,889		4,891
	Subordinated (2)(9)	10.00% PIK/Q*	6/9/2015	6/9/2020	18,525		18,525		14,820
	Subordinated (3)(9)	10.00% PIK/Q*	6/9/2015	6/9/2020	4,557		4,557		3,646
					49,318		47,456		42,378		4.21	%
NHME Holdings Corp. (20)
National HME, Inc.
Healthcare Services	Second lien (3)(9)	12.00% PIK/Q*	11/27/2018	5/27/2024	14,664		10,718		10,631
	Second lien (3)(9)	12.00% PIK/Q*	11/27/2018	5/27/2024	8,104		7,115		7,091
					22,768		17,833		17,722		1.76	%
UniTek Global Services, Inc.
Business Services	First lien (2)(9)	8.02% (L + 5.50%/M)	6/29/2018	8/20/2024	12,542		12,542		12,542
	First lien (2)(9)	7.96% (L + 5.50%/M)	6/29/2018	8/20/2024	2,508		2,508		2,508
					15,050		15,050		15,050		1.50	%
Total Funded Debt Investments - United States					$	87,136	$	80,339	$	75,150	7.47	%
Equity - Canada
NM APP Canada Corp.**
Net Lease	Membership interest (7)(9)	—	9/13/2016	—	—		$	7,345	$	9,727	0.97	%
Total Shares - Canada							$	7,345	$	9,727	0.97	%
Equity - United States
NMFC Senior Loan Program II LLC**
Investment Fund	Membership interest (3)(9)	—	5/3/2016	—	—		$	79,400	$	79,400	7.89	%
NMFC Senior Loan Program III LLC**
Investment Fund	Membership interest (3)(9)	—	5/4/2018	—	—		78,400		78,400		7.79	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares	Cost		Fair Value		Percent of Net Assets
UniTek Global Services, Inc.
Business Services	Preferred shares (2)(9)(17)	—	1/13/2015	—	24,841,813	$	22,462	$	22,012
	Preferred shares (3)(9)(17)	—	1/13/2015	—	6,865,095	6,207		6,083
	Preferred shares (3)(9)(18)	—	6/30/2017	—	13,079,442	13,079		13,036
	Preferred shares (3)(9)(19)	—	8/17/2018	—	7,070,545	7,071		7,071
	Ordinary shares (2)(9)	—	1/13/2015	—	2,096,477	1,925		10,013
	Ordinary shares (3)(9)	—	1/13/2015	—	1,993,749	532		9,523
						51,276		67,738		6.73	%
NM NL Holdings, L.P.**
Net Lease	Membership interest (7)(9)	—	6/20/2018	—	—	32,575		33,392		3.32	%
NM GLCR LLC
Net Lease	Membership interest (7)(9)	—	2/1/2018	—	—	14,750		20,343		2.02	%
NM CLFX LP
Net Lease	Membership interest (7)(9)	—	10/6/2017	—	—	12,538		12,770		1.27	%
NM APP US LLC
Net Lease	Membership interest (7)(9)	—	9/13/2016	—	—	5,080		5,912		0.59	%
NM DRVT LLC
Net Lease	Membership interest (7)(9)	—	11/18/2016	—	—	5,152		5,619		0.56	%
NM KRLN LLC
Net Lease	Membership interest (7)(9)	—	11/15/2016	—	—	7,510		4,205		0.42	%
NHME Holdings Corp. (20)
Healthcare Services	Ordinary Shares (3)(9)	—	11/27/2018	—	640,000	4,000		4,000		0.40	%
NM JRA LLC
Net Lease	Membership interest (7)(9)	—	8/12/2016	—	—	2,043		2,537		0.25	%
Edmentum Ultimate Holdings, LLC (15)
Education	Ordinary shares (3)(9)	—	6/9/2015	—	123,968	11		238
	Ordinary shares (2)(9)	—	6/9/2015	—	107,143	9		205
						20		443		0.04	%
NM GP Holdco, LLC**
Net Lease	Membership interest (7)(9)	—	6/20/2018	—	—	306		311		0.03	%
Total Shares - United States						$	293,050	$	315,070	31.31	%
Total Shares						$	300,395	$	324,797	32.28	%
Warrants - United States
Edmentum Ultimate Holdings, LLC (15)
Education	Warrants (3)(9)	—	2/23/2018	5/5/2026	1,141,846	$	769	$	2,190	0.22	%
NHME Holdings Corp. (20)
Healthcare Services	Warrants (3)(9)	—	11/27/2018	—	160,000	1,000		1,000		0.10	%
Total Warrants - United States						$	1,769	$	3,190	0.32	%
Total Funded Investments						$	382,503	$	403,137	40.07	%

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)



Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (11)	Acquisition Date	Maturity/Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets
Unfunded Debt Investments - United States
Edmentum Ultimate Holdings, LLC (15)
Edmentum, Inc. (fka Plato, Inc.) (Archipelago Learning, Inc.)
Education	Second lien (3)(9)(10) - Undrawn	—	6/9/2015	12/9/2021	$	5,945	$	—	$	—	—	%
Total Unfunded Debt Investments - United States					$	5,945	$	—	$	—	—	%
Total Controlled Investments							$	382,503	$	403,137	40.07	%
Total Investments							$	2,329,726	$	2,341,953	232.75	%


(1)	New Mountain Finance Corporation (the "Company") generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed to be "restricted securities" under the Securities Act.

(2)

Investment is pledged as collateral for the Holdings Credit Facility, a revolving credit facility among the Company, as the Collateral Manager, New Mountain Finance Holdings, L.L.C. ("NMF Holdings") as the Borrower ~~Wells Fargo Securities, LLC as the Administrative Agent,~~ and Wells Fargo Bank, National Association as the ~~Lender~~Administrative Agent and Collateral Custodian. See Note 7. Borrowings, for details.


(3)	Investment is pledged as collateral for the NMFC Credit Facility, a revolving credit facility among the Company as the Borrower and Goldman Sachs Bank USA as the Administrative Agent and the Collateral Agent and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A. and Stifel Bank & Trust as Lenders. See Note 7. Borrowings, for details.


(4)	Investment is held in New Mountain Finance SBIC, L.P.


(5)	Investment is held in ~~NMF YP Holdings, Inc.~~New Mountain Finance SBIC II, L.P.


(6)	~~Investment is held in NMF Ancora Holdings, Inc.~~


~~(7)~~	Investment is held in NMF QID NGL Holdings, Inc.


(7)	Investment is held in New Mountain Net Lease Corporation.


(8)	Investment oris pledged as collateral for the DB Credit Facility, a ~~portion of~~revolving credit facility among New Mountain Finance DB, L.L.C as the ~~investment is on non-accrual status.~~Borrower and Deutsche Bank AG, New York Branch as the Facility Agent. See Note 3.7. ~~Investments~~Borrowings, for details.


(9)	The fair value of the Company's investment is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 4. Fair Value, for details.


(10)	Par Value amounts represent the drawn or undrawn (as indicated in type of investment) portion of revolving credit facilities or delayed draws. Cost amounts represent the cash received at settlement date net of the impact of paydowns and cash paid for drawn revolvers or delayed draws.

(11)

All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (L), the Prime Rate (P) and the alternative base rate (Base) and which resets monthly (M), quarterly (Q), semi-annually (S) or annually (A). For each investment the current interest rate provided reflects the rate in effect as of December 31, ~~2016.~~


~~(10)~~	~~The fair value of the Company's investment is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 4.~~ ~~Fair Value,~~ ~~for details.~~


~~(11)~~	Par Value amounts represent the drawn or undrawn (as indicated in type of investment) portion of revolving credit facilities or delayed draws. Cost amounts represent the cash received at settlement date net the impact of paydowns and cash paid for drawn revolvers or delayed draws.2018.

(12)

The Company holds investments in ~~three~~Education Management Corporation and one related ~~entities~~entity of ~~YP Holdings LLC/Print Media Holdings LLC.~~Education Management Corporation. The Company ~~directly~~ holds ~~warrants to purchase~~series A-1 convertible preferred stock and common stock in Education Management Corporation and holds a ~~4.96% membership interest of YP Equity Investors,~~tranche A first lien term loan and a tranche B first lien term loan in Education Management II LLC, ~~(which at closing represented~~which is an indirect ~~1.0% equity interest in YP Holdings LLC) and holds an investment in the Term Loan B loans issued by YP LLC and Print Media LLC, wholly-owned subsidiaries~~subsidiary of ~~YP Holdings LLC and Print Media Holdings LLC, respectively.~~Education Management Corporation.

(13)

The Company holds investments in ~~two~~three related entities of Tenawa Resource Holdings LLC. The Company holds 4.77% of the common units in QID NGL LLC (which at closing represented 98.1% of the ownership in the common units in Tenawa Resource Holdings LLC), class A preferred units in QID NGL LLC and ~~holds~~ a first lien investment in Tenawa Resource Management LLC, a wholly-owned subsidiary of Tenawa Resource Holdings LLC.

(14)

The Company holds investments in QC McKissock Investment, LLC and one related entity of QC McKissock Investment, LLC. The Company holds a first lien term loan in QC McKissock Investment, LLC (which at closing represented 71.1% of the ownership in the Series A common units of McKissock Investment Holdings, LLC) and holds a first lien term ~~loan~~loans and a delayed draw term loan in McKissock, LLC, a wholly-owned subsidiary of McKissock Investment Holdings, LLC.


(15)	The Company holds investments in TWDiamondback Holdings Corp. and one related entity of TWDiamondback Holdings Corp. The Company holds preferred equity in TWDiamondback Holdings Corp. and holds a first lien last out term loan and a delayed draw term loan in Diamondback Drugs of Delaware LLC, a wholly-owned subsidiary of TWDiamondback Holdings Corp.

~~(16)~~

~~The Company holds investments in~~ Edmentum Ultimate Holdings, LLC and its related entities. The Company holds subordinated notes, ~~and~~ ordinary equity and warrants in Edmentum Ultimate Holdings, LLC and holds a first lien term loan, second lien revolver and a second lien term loan in Edmentum, Inc. and Archipelago Learning, Inc., which are wholly-owned subsidiaries of Edmentum Ultimate Holdings, LLC.


~~(17)~~(16)	The Company holds preferred equity in Permian Holdco 1, Inc. that is entitled to receive cumulative preferential dividends at a rate of 12.0% per annum payable in additional shares.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)


(17)	The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of 13.5% per annum payable in additional shares.


(18)	The Company holds preferred equity in UniTek Global Services, Inc. that is entitled to receive cumulative preferential dividends at a rate of ~~13.5%~~19.0% per annum payable in additional shares.

(19)

The Company holds ~~investments~~preferred equity in ~~Education Management Corporation and one related entity~~UniTek Global Services, Inc. that is entitled to received cumulative preferential dividends at a rate of ~~Education Management Corporation. The Company holds series A-1 convertible preferred stock and common stock~~20.0% per annum payable in Education Management Corporation and holds a tranche A first lien term loan and a tranche B first lien term loan in Education Management II LLC, which is an indirect subsidiary of Education Management Corporation.additional shares.


(20)	The Company holds ~~an equity investment~~ordinary shares and warrants in ~~TW-NHME~~NHME Holdings Corp., ~~and holds a~~as well as second lien term ~~loan investment~~loans in National HME, Inc., a wholly-owned subsidiary of ~~TW-NHME~~NHME Holdings Corp.


(21)	The Company holds preferred ~~and common~~ equity in ~~Permian Holdco 1,~~Bach Special Limited (Bach Preference Limited) that is entitled to receive cumulative preferential dividends at a rate of 12.25% per annum payable in additional shares.


(22)	The Company holds preferred equity in Avatar Topco, Inc.~~, as well as subordinated notes~~ and holds a second lien term loan investment in ~~Permian Holdco 2,~~EAB Global, Inc., a wholly-owned subsidiary of ~~Permian Holdco 1,~~Avatar Topco, Inc. The preferred equity is entitled to receive cumulative preferential dividends at a rate of L + 11.00% per annum.

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~New Mountain Finance Corporation~~

~~Consolidated Schedule of Investments (Continued)~~

~~December 31, 2016~~

~~(in thousands, except shares)~~


~~(22)~~(23)	The Company holds preferred equity in Symplr Software Intermediate Holdings, Inc. and holds a first lien term loan investment in Caliper Software, Inc., a wholly-owned subsidiary of Symplr Software Intermediate Holdings, Inc. The preferred equity is entitled to receive cumulative preferential dividends at a rate of L + 10.50% per annum.


(24)	Investment or a portion of the investment is on non-accrual status. See Note 3. Investments, for details.


(25)	The Company holds one security purchased under a collateralized agreement to resell on its Consolidated Statement of Assets and Liabilities with a cost basis of $30,000 and a fair value of $23,508 as of December 31, 2018. See Note 2. Summary of Significant Accounting Policies, for details.

(26)

Denotes investments in which the Company is an “Affiliated Person”, as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), due to owning or holding the power to vote 5.0% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of December 31, ~~2015~~2018 and December 31, ~~2016,~~2017 along with transactions during the year ended December 31, ~~2016~~2018 in which the issuer was a non-controlled/affiliated investment is as follows:


Portfolio Company	Fair Value at December 31, 2015		Gross Additions(A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)			Fair Value at December 31, 2016		Interest Income		Dividend Income		Other Income		Fair Value at December 31, 2017		Gross Additions (A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)			Fair Value at December 31, 2018		Interest Income		Dividend Income		Other Income
Edmentum Ultimate Holdings, LLC/Edmentum Inc.	$	22,782	$	6,147	$	(4,002	)	$	—	$	(1,680	)	$	23,247	$	2,254	$	—	$	—	$	24,858	$	—	$	(24,858	)	$	—	$	—		$	—	$	—	$	—	$	—
HI Technology Corp.																					105,155		—		(105,155		)	8,387		—			—		—		14,791		—
NMFC Senior Loan Program I LLC	21,914		—		—			—		1,086			23,000		—		3,728		1,163		23,000		—		—			—		—			23,000		—		3,173		1,179
Permian Holdco 1, Inc. / Permian Holdco 2, Inc.	—		8,965		—			—		2,228			11,193		41		156		5
Tenawa Resource Holdings LLC	42,591		16		(42,288		)	—		(319		)	—		2,243		—		25
Permian Holdco 1, Inc. / Permian Holdco 2, Inc. / Permian Holdco 3, Inc.																					12,733		31,824		(50		)	—		(2,541		)	41,966		2,028		1,083		653
Sierra Hamilton Holdings Corporation																					12,330		—		—			—		197			12,527		—		—		—
Total Non-Controlled/Affiliated Investments	$	87,287	$	15,128	$	(46,290	)	$	—	$	1,315		$	57,440	$	4,538	$	3,884	$	1,193	$	178,076	$	31,824	$	(130,063	)	$	8,387	$	(2,344	)	$	77,493	$	2,028	$	19,047	$	1,832


(A)	Gross additions include increases in the cost basis of investments resulting from new portfolio investments, payment-in-kind (“PIK”) interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement at fair value of an existing portfolio company into this category from a different category.


(B)	Gross ~~redemptions~~reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, 2018

(in thousands, except shares)

~~(23)~~(27)

Denotes investments in which the Company is in “Control”, as defined in the 1940 Act, due to owning or holding the power to vote 25.0% or more of the outstanding voting securities of the investment. Fair value as of December 31, ~~2015~~2018 and December 31, ~~2016,~~2017 along with transactions during the year ended December 31, ~~2016~~2018 in which the issuer was a controlled investment, is as follows:


Portfolio Company	Fair Value at December 31, 2015		Gross Additions (A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)		Fair Value at December 31, 2016		Interest Income		Dividend Income		Other Income		Fair Value at December 31, 2017		Gross Additions (A)		Gross Redemptions (B)			Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)			Fair Value at December 31, 2018		Interest Income		Dividend Income		Other Income
New Mountain Net Lease Corporation	$	—	$	27,000	$	—		$	—	$	—	$	27,000	$	—	$	540	$	—
Edmentum Ultimate Holdings, LLC/Edmentum Inc.																				$	—	$	51,478	$	(6,937	)	$	3	$	470		$	45,011	$	4,077	$	—	$	424
National HME, Inc./NHME Holdings Corp.																				—		22,832		—			—		(110		)	22,722		306		—		—
NM APP CANADA CORP																				7,962		—		—			—		1,765			9,727		—		841		—
NM APP US LLC																				5,138		—		—			—		774			5,912		—		563		—
NM CLFX LP																				12,538		—		—			—		232			12,770		—		1,507		—
NM DRVT LLC																				5,385		—		—			—		234			5,619		—		519		—
NM JRA LLC																				2,191		—		—			—		346			2,537		—		225		—
NM GLCR LLC																				—		14,750		—			—		5,593			20,343		—		1,634		—
NM KRLN LLC																				8,195		—		—			—		(3,990		)	4,205		—		761		—
NM NL Holdings, L.P.																				—		32,575		—			—		817			33,392		—		1,506		—
NM GP Holdco, LLC																				—		306		—			—		5			311		—		11		—
NMFC Senior Loan Program II LLC	—		71,460		—			—		—		71,460		—		3,533		—		79,400		—		—			—		—			79,400		—		11,124		—
NMFC Senior Loan Program III LLC																				—		78,400		—			—		—			78,400		—		3,040		—
UniTek Global Services, Inc.	47,422		3,464		(2,599		)	—		8,074		56,361		1,904		3,023		558		64,593		28,696		(15,261		)	—		4,760			82,788		1,843		6,648		1,312
Total Controlled Investments	$	47,422	$	101,924	$	(2,599	)	$	—	$	8,074	$	154,821	$	1,904	$	7,096	$	558	$	185,402	$	229,037	$	(22,198	)	$	3	$	10,896		$	403,137	$	6,226	$	28,379	$	1,736


(A)	Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of discounts, reorganizations or restructurings and the movement ~~at fair value~~ of an existing portfolio company into this category from a different category.


(B)	Gross redemptions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, reorganizations or restructurings and the movement of an existing portfolio company out of this category into a different category.


*	All or a portion of interest contains PIK interest.


**	Indicates assets that the Company deems to be “non-qualifying assets” under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70.0% of the Company’s total assets at the time of acquisition of any additional non-qualifying assets. As of December 31, ~~2016, 9.9%~~2018, 13.5% of the Company’s total investments were non-qualifying assets.

The accompanying notes are an integral part of these consolidated financial statements.

2837

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments (Continued)

December 31, ~~2016~~2018

(in thousands, except shares)



	December 31, ~~2016~~2018
Investment Type	Percent of Total Investments at Fair Value
First lien	~~44.94~~50.11	%
Second lien	~~38.76~~28.29	%
Subordinated	~~4.27~~2.79	%
Equity and other	~~12.03~~18.81	%
Total investments	100.00	%



	December 31, ~~2016~~2018
Industry Type	Percent of Total Investments at Fair Value
Business Services	~~29.64~~23.67	%
Software	~~27.00~~20.41	%
Healthcare Services	14.80	%
Education	8.94	%
Investment Fund (includes investments in joint ventures)	7.72	%
Consumer Services	~~6.82~~	%
~~Investment Fund~~	~~6.06~~	%
~~Education~~	~~6.04~~5.15	%
Energy	~~4.82~~4.49	%
~~Healthcare Services~~Net Lease	~~4.61~~4.05	%
Distribution & Logistics	~~3.96~~3.44	%
Federal Services	~~3.86~~	%
~~Net Lease~~	~~1.73~~	%
~~Business Products~~	~~1.60~~	%
~~Media~~	~~1.55~~	%
~~Retail~~	~~1.35~~3.16	%
Healthcare Information Technology	~~0.96~~1.92	%
Food & Beverage	1.19	%
Packaging	0.61	%
Business Products	0.45	%
Total investments	100.00	%



	December 31, ~~2016~~2018
Interest Rate Type	Percent of Total Investments at Fair Value
Floating rates	~~93.16~~93.25	%
Fixed rates	~~6.84~~6.75	%
Total investments	100.00	%

Notes to the Consolidated Financial Statements of

New Mountain Finance Corporation

~~September~~June 30, ~~2017~~2019

(in thousands, except share data)

(unaudited)

Note 1. Formation and Business Purpose

New Mountain Finance Corporation (“NMFC” or the “Company”) is a Delaware corporation that was originally incorporated on June 29, 2010 and completed its initial public offering ("IPO") on May 19, 2011. NMFC is a closed-end, non-diversified management investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). ~~As such, NMFC is obligated to comply with certain regulatory requirements.~~ NMFC has elected to be treated, and intends to comply with the requirements to continue to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). NMFC is also registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Since NMFC’s IPO, and through ~~September~~June 30, ~~2017,~~2019, NMFC raised approximately ~~$614,581~~$673,878 in net proceeds from additional offerings of its common stock.

New Mountain Finance Advisers BDC, L.L.C. (the “Investment Adviser”) is a wholly-owned subsidiary of New Mountain Capital ~~L.L.C. ("New Mountain Capital", defined as~~Group, L.P. (together with New Mountain Capital, ~~Group,~~ L.L.C. and its ~~affiliates).~~affiliates, "New Mountain Capital") whose ultimate owners include Steven B. Klinsky and related and other vehicles. New Mountain Capital is a firm with a track record of investing in the middle market. New Mountain Capital focuses on investing in defensive growth companies across its private equity, public equity and credit investment vehicles. The Investment Adviser manages the Company's day-to-day operations and provides it with investment advisory and management services. The Investment Adviser also manages other funds that may have investment mandates that are similar, in whole or in part, to the Company's. New Mountain Finance Administration, L.L.C. (the "Administrator”), a wholly-owned subsidiary of New Mountain Capital, provides the administrative services necessary to conduct the Company's day-to-day operations.

The ~~Company’s~~Company has established the following wholly-owned ~~subsidiary,~~ direct and indirect subsidiaries:

New Mountain Finance Holdings, L.L.C. (“("NMF ~~Holdings”~~Holdings" or the "Predecessor Operating Company") and New Mountain Finance DB, L.L.C. ("NMFDB"), ~~is a Delaware limited liability company~~ whose assets are used to secure NMF Holdings’ credit ~~facility.~~ facility and NMFDB’s credit facility, respectively;

New Mountain Finance SBIC, L.P. ("SBIC I") and New Mountain Finance SBIC II, L.P. ("SBIC II"), who have received licenses from the United States ("U.S.") Small Business Administration ("SBA") to operate as small business investment companies ("SBICs") under Section 301(c) of the Small Business Investment Act of 1958, as amended (the "1958 Act") and their general partners, New Mountain Finance SBIC G.P., L.L.C. ("SBIC I GP") and New Mountain Finance SBIC II G.P., L.L.C. ("SBIC II GP"), respectively;

New Mountain Net Lease Corporation ("NMNLC"), which acquires commercial real properties that are subject to ‘‘triple net’’ leases has elected to be treated, and intends to comply with the requirements to continue to qualify annually, as a real estate investment trust, or REIT, within the meaning of Section 856(a) of the Code;

NMF Ancora Holdings Inc. (“("NMF ~~Ancora”~~Ancora"), NMF QID ~~NGL~~ Holdings, Inc. (“("NMF ~~QID”~~QID") and NMF YP Holdings Inc. (“("NMF ~~YP”~~YP"), ~~the Company's wholly-owned subsidiaries, are structured as Delaware entities that~~which serve as tax blocker corporations ~~which hold~~by holding equity or equity-like investments in portfolio companies organized as limited liability companies (or other forms of pass-through entities)~~. The~~; the Company consolidates ~~its~~our tax blocker corporations for accounting ~~purposes. The~~purposes but the tax blocker corporations are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of the portfolio ~~companies. Additionally, the Company has a wholly-owned subsidiary,~~ companies; and

New Mountain Finance Servicing, L.L.C. (“("NMF ~~Servicing”~~Servicing"), ~~that~~which serves as the administrative agent on certain investment transactions. New Mountain Finance SBIC, L.P. (“SBIC I”) and its general partner, New Mountain Finance SBIC G.P., L.L.C. (“SBIC I GP”), were organized in Delaware as a limited partnership and limited liability company, respectively. During the nine months ended September 30, 2017, New Mountain Finance SBIC II, L.P. (“SBIC II”) and its general partner, New Mountain Finance SBIC II G.P., L.L.C. (“SBIC II GP”), were organized in Delaware as a limited partnership and limited liability company, respectively. SBIC I, SBIC I GP, SBIC II and SBIC II GP are consolidated wholly-owned direct and indirect subsidiaries of the Company. SBIC I received a license from the United States ("U.S.") Small Business Administration (the “SBA”) to operate as a small business investment company (“SBIC”) under Section 301(c) of the Small Business Investment Act of 1958, as amended (the “1958 Act”). The Company's wholly-owned subsidiary, New Mountain Net Lease Corporation ("NMNLC"), a Maryland corporation, was formed to acquire commercial real properties that are subject to "triple net" leases and intends to qualify as a real estate investment trust, or REIT, within the meaning of Section 856(a) of the Code.

The Company’s investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. The first lien debt may include traditional first lien senior secured loans or unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and subordinated loans. Unitranche loans will expose the Company to the risks associated with second lien and subordinated loans to the extent itthe Company invests in the “last out” tranche. In some cases, the Company’s investments may also include equity interests. The Company's primary focus is in the debt of defensive growth companies, which are defined as generally exhibiting the following characteristics: (i) sustainable secular growth drivers, (ii) high barriers to competitive entry, (iii) high free cash flow after capital expenditure and working capital needs, (iv) high returns on assets and (v) niche market dominance. Similar to the Company, SBIC II's and SBIC II's investment ~~objective is~~objectives are to generate current income and capital appreciation under the

investment criteria used by the Company. However, SBIC I and SBIC II investments must be in SBA eligible ~~companies.~~small businesses. The Company’s portfolio may be concentrated in a limited number of industries. As of ~~September~~June 30, ~~2017,~~2019, the Company’s top five industry concentrations were business services, software, healthcare services, ~~consumer services~~education and ~~distribution & logistics.~~investment funds (which includes the Company's investments in its joint ventures).

Note 2. Summary of Significant Accounting Policies

Basis of accounting—The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The Company is an investment company following accounting and reporting guidance in Accounting Standards Codification Topic 946, Financial Services—Investment Companies, (“ASC 946”). NMFC consolidates its wholly-owned direct and indirect subsidiaries: NMF Holdings, NMFDB, NMF Servicing, NMNLC, SBIC I, SBIC I GP, SBIC II, SBIC II GP, NMF Ancora, NMF QID and NMF YP.

The Company’s consolidated financial statements reflect all adjustments and reclassifications which, in the opinion of management, are necessary for the fair presentation of the results of operations and financial condition for all periods presented. All intercompany transactions have been eliminated. Revenues are recognized when earned and expenses when incurred. The financial results of the Company’s portfolio investments are not consolidated in the financial statements.

The Company’s interim consolidated financial statements are prepared in accordance with GAAP and pursuant to the requirements for reporting on Form 10-Q and Article 6 or 10 of Regulation S-X. Accordingly, the Company’s interim consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments, consisting solely of normal recurring accruals considered necessary for the fair presentation of financial statements for the interim period, have been included. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, ~~2017.~~2019.

Investments—The Company applies fair value accounting in accordance with GAAP. Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments are reflected on the Company’s Consolidated Statements of Assets and Liabilities at fair value, with changes in unrealized gains and losses resulting from changes in fair value reflected in the Company’s Consolidated Statements of Operations as “Net change in unrealized appreciation (depreciation) of investments” and realizations on portfolio investments reflected in the Company’s Consolidated Statements of Operations as “Net realized gains (losses) on investments”.

The Company values its assets on a quarterly basis, or more frequently if required under the 1940 Act. In all cases, the Company’s board of directors is ultimately and solely responsible for determining the fair value of the portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded, those whose market prices are not readily available and any other situation where its portfolio investments require a fair value determination. Security transactions are accounted for on a trade date basis. The Company’s quarterly valuation procedures are set forth in more detail below:


(1)	Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.


(2)	Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

Bond quotes are obtained through independent pricing services. Internal reviews are performed by the investment professionals of the Investment Adviser to ensure that the quote obtained is representative of fair value in accordance with GAAP and, if so, the quote is used. If the Investment Adviser is unable to sufficiently validate the quote(s) internally and if the investment’s par value or its fair value exceeds the materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below); and


b.	For investments other than bonds, the Company looks at the number of quotes readily available and performs the following procedures:


i.	Investments for which two or more quotes are received from a pricing service are valued using the mean of the mean of the bid and ask of the quotes obtained.

ii.

Investments for which one quote is received from a pricing service are validated internally. The investment professionals of the Investment Adviser analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. If the Investment Adviser is unable to sufficiently validate the quote internally and if the investment’s par value or its fair value exceeds the materiality ~~threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).~~

threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).


(3)	Investments for which quotations are not readily available through exchanges, pricing services, brokers, or dealers are valued through a multi-step valuation process:


a.	Each portfolio company or investment is initially valued by the investment professionals of the Investment Adviser responsible for the credit monitoring;


b.	Preliminary valuation conclusions will then be documented and discussed with the Company’s senior management;

If an investment falls into (3) above for four consecutive quarters and if the investment’s par value or its fair value exceeds the materiality threshold, then at least once each fiscal year, the valuation for each portfolio investment for which the Company does not have a readily available market quotation will be reviewed by an independent valuation firm engaged by the Company’s board of directors; and


d.	When deemed appropriate by the Company’s management, an independent valuation firm may be engaged to review and value investment(s) of a portfolio company, without any preliminary valuation being performed by the Investment Adviser. The investment professionals of the Investment Adviser will review and validate the value provided.

For investments in revolving credit facilities and delayed draw commitments, the cost basis of the funded investments purchased is offset by any costs/netbacks received for any unfunded portion on the total balance committed. The fair value is also adjusted for the price appreciation or depreciation on the unfunded portion. As a result, the purchase of a commitment not completely funded may result in a negative fair value until it is called and funded.

The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period and the fluctuations could be material.

See Note 3. Investments, for further discussion relating to investments.

New Mountain Net Lease Corporation

NMNLC was formed to acquire commercial real estate properties that are subject to "triple net" leases. NMNLC's investments are disclosed on the Company's Consolidated Schedule of Investments as of ~~September~~June 30, ~~2017.~~2019.

Below is certain summarized property information for NMNLC as of ~~September~~June 30, ~~2017:~~

2019:

Lease

Total

Fair Value as of

Lease

Total

Fair Value as of

Portfolio Company

Tenant

Expiration Date

Location

Square Feet

September 30, 2017

Tenant

Expiration Date

Location

Square Feet

June 30, 2019

NM NL Holdings LP / NM GP Holdco LLC

Various

34,611

NM GLCR LP

Arctic Glacier U.S.A.

2/28/2038

214

20,918

NM CLFX LP

Victor Equipment Company

8/31/2033

423

12,725

NM APP Canada Corp.

A.P. Plasman, Inc.

9/30/2031

Ontario, Canada

436

7,685

A.P. Plasman, Inc.

9/30/2031

Canada

436

9,949

NM APP US LLC

Plasman Corp, LLC / A-Brite LP

9/30/2033

Fort Payne, AL

261

5,119

Plasman Corp, LLC / A-Brite LP

9/30/2033

AL / OH

261

6,101

NM DRVT LLC

FMH Conveyors, LLC

10/31/2031

195

5,704

NM KRLN LLC

Kirlin Group, LLC

6/30/2029

4,386

NM JRA LLC

J.R. Automation Technologies, LLC

1/31/2031

3,500

Cleveland, OH

97,894

NM DRVT LLC

FMH Conveyors, LLC

10/31/2031

Jonesboro, AR

195

5,152

NM JRA LLC

J.R. Automation Technologies, LLC

1/31/2031

Holland, MI

2,161

NM KRLN LLC

Kirlin Group, LLC

6/30/2029

Rockville, MD

7,510

27,627

Collateralized agreements or repurchase financings—The Company follows 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~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company held one collateralized agreement to resell with a cost basis of $30,000 and $30,000, respectively, and a ~~carrying~~fair value of ~~$26,836~~$23,508 and ~~$29,218,~~$23,508, respectively. The collateralized agreement to resell is guaranteed by a private hedge fund. 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 the Company 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 the Company, and therefore, the Company does 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 the Company’s contractual rights under the collateralized agreement. The Company continues to exercise its rights under the collateralized agreement and continues 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.

Cash and cash equivalents—Cash and cash equivalents include cash and short-term, highly liquid investments. The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and so near maturity that there is insignificant risk of changes in value. These securities have original maturities of three months or less. The Company did not hold any cash equivalents as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016.~~2018.

Revenue recognition

Sales and paydowns of investments: Realized gains and losses on investments are determined on the specific identification method.

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. The Company has 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 six months ended June 30, 2019, the Company recognized PIK and non-cash interest from investments of $3,170 and $6,130, respectively, and PIK and non-cash dividends from investments of $4,498 and $8,808, respectively. For the three and six months ended June 30, 2018, the Company recognized PIK and non-cash interest from investments of $1,938 and $3,612, respectively, and PIK and non-cash dividends from investments of $6,964 and $13,751, respectively.

Dividend income on common equity is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies. Dividend income on preferred securities is recorded as dividend income on an accrual basis to the extent that such amounts are deemed collectible.

Non-accrual income: Investments are placed on non-accrual status when principal or interest payments are past due for 30 days or more and when there is reasonable doubt that principal or interest will be collected. Accrued cash and un-capitalized PIK interest or dividends are reversed when an investment is placed on non-accrual status. Previously capitalized PIK interest or dividends are not reversed when an investment is placed on non-accrual status. Interest or dividend payments received on non-accrual investments may be recognized as income or applied to principal depending upon management’s judgment of the ultimate ~~outcome.~~collectibility. Non-accrual investments are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current.

Other income: Other income represents delayed compensation, consent or amendment fees, revolver fees, structuring fees, upfront fees, management fees from a non-controlled/affiliated investment and other miscellaneous fees received and are typically non-recurring in nature. Delayed compensation is income earned from counterparties on trades that do not settle within a set number of business days after trade date. Other income may also include fees from bridge loans. The Company may from time to time enter into bridge financing commitments, an obligation to provide interim financing to a counterparty until permanent credit can be obtained. These commitments are short-term in nature and may expire unfunded. A fee is received by the Company for providing such commitments. Structuring fees and upfront fees are recognized as income when earned, usually when paid at the closing of the investment, and are non-refundable.

Interest and other financing expenses—Interest and other financing fees are recorded on an accrual basis by the Company. See Note 7. Borrowings, for details.

Deferred financing costs—The deferred financing costs of the Company consist of capitalized expenses related to the origination and amending of the Company’s borrowings. The Company amortizes these costs into expense over the stated life of the related borrowing. See Note 7. Borrowings, for details.

Deferred offering costs—The Company's deferred offering costs consist of fees and expenses incurred in connection with equity offerings and the filing of shelf registration statements. Upon the issuance of shares, offering costs are charged as a direct reduction to net assets. Deferred offering costs are included in other assets on the Company's Consolidated Statements of Assets and Liabilities.

Income taxes—The Company has elected to be treated, and intends to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code. As a RIC, the Company is not subject to U.S. federal income tax on the portion of taxable income and gains timely distributed to its stockholders.

To continue to qualify and be subject to tax as a RIC, the Company is required to meet certain income and asset diversification tests in addition to distributing at least 90.0% of its investment company taxable income, as defined by the Code. Since U.S. federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes.

Differences between taxable income and the results of operations for financial reporting purposes may be permanent or temporary in nature. Permanent differences are reclassified among capital accounts in the financial statements to reflect their tax character. Differences in classification may also result from the treatment of short-term gains as ordinary income for tax purposes.

For U.S. federal income tax purposes, distributions paid to stockholders of the Company are reported as ordinary income, return of capital, long term capital gains or a combination thereof.

The Company will be subject to a 4.0% nondeductible federal excise tax on certain undistributed income unless the Company distributes, in a timely manner as required by the Code, an amount at least equal to the sum of (1) 98.0% of its respective net ordinary income earned for the calendar year and (2) 98.2% of its respective capital gain net income for the one-year period ending October 31 in the calendar year.

Certain consolidated subsidiaries of the Company are subject to U.S. federal and state income taxes. These taxable entities are not consolidated for income tax purposes and may generate income tax liabilities or assets from permanent and temporary differences in the recognition of items for financial reporting and income tax purposes.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, the Company recognized a total income tax ~~(provision) benefit~~provision of approximately ~~$(500)~~$266 and ~~$184,~~$173, respectively, for the Company’s consolidated subsidiaries. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, the Company recorded current income tax (benefit) expense of approximately ~~$106~~$(4) and ~~$341,~~$13, respectively, and deferred income tax ~~(provision) benefit~~provision of approximately ~~$(394)~~$270 and ~~$525,~~$160, respectively. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, the Company recognized a total income tax ~~(provision) benefit~~provision of approximately ~~$(11)~~$1,111 and ~~$706,~~$1,045, respectively, for the Company’s consolidated subsidiaries. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, the Company recorded current income tax expense of approximately ~~$22~~$45 and ~~$113,~~$61, respectively, and deferred income tax ~~benefit~~provision of approximately ~~$11~~$1,066 and ~~$819, respectively, which excluded a deferred tax (provision) benefit of $(818) and $34, respectively, attributable to one of the Company's consolidated subsidiaries.~~$984, respectively.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company had ~~$509~~$1,166 and ~~$1,034,~~$1,006, respectively, of deferred tax liabilities primarily relating to deferred taxes attributable to certain differences between the computation of income for U.S. federal income tax purposes as compared to GAAP.

The Company has adopted the Income Taxes topic of the Accounting Standards Codification Topic 740 (“ASC 740”). ASC 740 provides guidance for income taxes, including how uncertain income tax positions should be recognized, measured, and disclosed in the financial statements. Based on its analysis, the Company has determined that there were no uncertain income tax positions that do not meet the more likely than not threshold as defined by Accounting Standards Codification Topic 740 ("ASC 740") through December 31, ~~2016.~~2018. The ~~2013~~2015 through ~~2016~~2018 tax years remain subject to examination by the U.S. federal, state, and local tax authorities.

Distributions—Distributions to common stockholders of the Company are recorded on the record date as set by the board of directors. The Company intends to make distributions to its stockholders that will be sufficient to enable the Company to maintain its status as a RIC. The Company intends to distribute approximately all of its ~~adjusted~~ net investment income ~~(see Note 5.~~ ~~Agreements~~) on a quarterly basis and substantially all of its taxable income on an annual basis, except that the Company may retain certain net capital gains for reinvestment.

The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions declared on behalf of its stockholders, unless a stockholder elects to receive cash.

The Company applies the following in implementing the dividend reinvestment plan. If the price at which newly issued shares are to be credited to stockholders’ accounts is equal to or greater than 110.0% of the last determined net asset value of the shares, the Company will use only newly issued shares to implement its dividend reinvestment plan. Under such circumstances, the number of shares to be issued to a stockholder is determined by dividing the total dollar amount of the distribution payable to such stockholder by the market price per share of the Company’s common stock on the New York Stock

Exchange (“NYSE”) on the distribution payment date. Market price per share on that date will be the closing price for such shares on the NYSE or, if no sale is reported for such day, the average of their electronically reported bid and ask prices.

If the price at which newly issued shares are to be credited to stockholders’ accounts is less than 110.0% of the last determined net asset value of the shares, the Company will either issue new shares or instruct the plan administrator to purchase shares in the open market to satisfy the additional shares required. Shares purchased in open market transactions by the plan administrator will be allocated to a stockholder based on the average purchase price, excluding any brokerage charges or other charges, of all shares of common stock purchased in the open market. The number of shares of the Company’s common stock to be outstanding after giving effect to payment of the distribution cannot be established until the value per share at which additional shares will be issued has been determined and elections of the Company’s stockholders have been tabulated.

Share repurchase program—On February 4, 2016, the Company's board of directors authorized a program for the purpose of repurchasing up to $50,000 worth of the Company's common stock. Under the repurchase program, the Company was permitted, but was not obligated, to repurchase its outstanding common stock in the open market from time to time provided that it complied with the Company's code of ethics and the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange ~~Act)~~Act"), including certain price, market volume and timing constraints. In addition, any repurchases were conducted in accordance with the 1940 Act. On December ~~23, 2016,~~31, 2018, the Company's board of directors extended the Company's repurchase program and the Company expects the repurchase program to be in place until the earlier of December 31, ~~2017~~2019 or until $50,000 of its outstanding shares of common stock have been repurchased. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 and June 30, 2018, the Company did not repurchase any shares of the Company's common stock. ~~During the three and nine months ended September 30, 2016, the~~The Company previously repurchased ~~a total~~$2,948 of ~~0 and 248,499 shares, respectively, of the Company's~~its common stock inunder the ~~open market for $0 and $2,948, respectively, including commissions paid.~~share repurchase program.

Earnings per share—The Company’s earnings per share (“EPS”) amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. Basic EPS is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average number of shares of common stock outstanding during the period of computation. Diluted EPS is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average number of shares of common stock assuming all potential shares had been issued, and its related net impact to net assets accounted for, and the additional shares of common stock were dilutive. Diluted EPS reflects the potential dilution, using the as-if-converted method for convertible debt, which could occur if all potentially dilutive securities were exercised.

Foreign securities—The accounting records of the Company are maintained in U.S. dollars. Investment securities denominated in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies on the respective dates of the transactions. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with “Net change in unrealized appreciation (depreciation) of investments” and “Net realized gains (losses) on investments” in the Company’s Consolidated Statements of Operations.

Investments denominated in foreign currencies may be negatively affected by movements in the rate of exchange between the U.S. dollar and such foreign currencies. This movement is beyond the control of the Company and cannot be predicted.

Use of estimates—The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Company’s consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Changes in the economic environment, financial markets, and other metrics used in determining these estimates could cause actual results to differ from the estimates used, and the differences could be material.

Dividend income recorded related to distributions received from flow-through investments is an accounting estimate based on the most recent estimate of the tax treatment of the distribution.

Note 3. Investments

At ~~September~~June 30, ~~2017,~~2019, the Company’s investments consisted of the following:

Investment Cost and Fair Value by Type

Cost Fair Value
First lien $ 764,281
$ 770,238
Second lien 673,074
679,893
Subordinated 69,460
69,202
Equity and other 306,889
326,710
Total investments $ 1,813,704
$ 1,846,043

~~Investment Cost and Fair Value by Industry~~

Cost Fair Value
Business Services $ 598,620
$ 616,763
Software 383,779
389,935
Healthcare Services 160,298
161,763
Consumer Services 144,007
144,922
Distribution & Logistics 109,787
113,148
Investment Fund 102,400
102,400
Education 104,810
101,494
Federal Services 76,587
77,239
Energy 67,771
71,786
Net Lease 27,130
27,627
Healthcare Information Technology 14,676
15,075
Packaging 14,304
14,391
Business Products 9,535
9,500
Total investments $ 1,813,704
$ 1,846,043

~~At December 31, 2016, the Company’s investments consisted of the following:~~

~~Investment Cost and Fair Value by Type~~


	Cost		Fair Value		Cost		Fair Value
First lien	$	706,140	$	700,580	$	1,395,822	$	1,394,329
Second lien	638,347		604,203		721,077		722,940
Subordinated	68,341		66,559		74,822		69,519
Equity and other	162,350		187,475		426,819		456,308
Total investments	$	1,575,178	$	1,558,817	$	2,618,540	$	2,643,096

Investment Cost and Fair Value by Industry


	Cost		Fair Value		Cost		Fair Value
Business Services	$	446,008	$	461,997	$	625,312	$	627,611
Software	424,965		420,896		587,916		592,694
Healthcare Services					445,025		444,991
Education					217,804		222,973
Investment Fund (includes investments in joint ventures)					182,400		182,400
Energy					103,226		105,137
Net Lease					87,302		97,894
Federal Services					89,097		87,978
Distribution & Logistics					83,452		84,707
Consumer Services	105,868		106,392		78,147		78,319
Investment Fund	94,460		94,460
Education	93,651		94,168
Energy	81,390		75,168
Healthcare Services	70,731		71,844
Distribution & Logistics	88,768		61,696
Federal Services	59,881		60,116
Net Lease	27,000		27,000
Healthcare Information Technology					65,804		66,028
Food & Beverage					27,966		27,817
Packaging					14,337		14,109
Business Products	25,613		24,958		10,752		10,438
Media	21,189		24,162
Retail	21,006		21,016
Healthcare Information Technology	14,648		14,944
Total investments	$	1,575,178	$	1,558,817	$	2,618,540	$	2,643,096

At December 31, 2018, the Company’s investments consisted of the following:

Investment Cost and Fair Value by Type



	Cost		Fair Value
First lien	$	1,179,129	$	1,173,459
Second lien	666,545		662,556
Subordinated	72,559		65,297
Equity and other	411,493		440,641
Total investments	$	2,329,726	$	2,341,953

Investment Cost and Fair Value by Industry



	Cost		Fair Value
Business Services	$	541,901	$	554,404
Software	476,473		478,063
Healthcare Services	350,357		346,521
Education	214,032		209,433
Investment Fund (includes investments in joint ventures)	180,800		180,800
Consumer Services	122,326		120,562
Energy	101,794		105,122
Net Lease	87,299		94,816
Distribution & Logistics	82,201		80,581
Federal Services	74,572		73,962
Healthcare Information Technology	44,793		44,989
Food & Beverage	28,099		27,957
Packaging	14,328		14,278
Business Products	10,751		10,465
Total investments	$	2,329,726	$	2,341,953

During the first quarter of ~~2017,~~2018, the Company placed its ~~entire~~ first lien ~~notes position~~positions in ~~Sierra Hamilton~~Education Management II LLC ~~/ Sierra Hamilton Finance, Inc.~~ ("~~Sierra"~~EDMC") on non-accrual status ~~due~~as EDMC announced its intention to ~~its ongoing restructuring.~~wind down and liquidate the business. As of June 30, ~~2017,~~2019, the Company's investment in ~~Sierra~~EDMC placed on non-accrual status represented an aggregate cost basis of ~~$27,231,~~$1,004, an aggregate fair value of ~~$12,725~~$12 and total unearned interest income of ~~$1,388~~$42 and $83, respectively, for the three and six months then ended. In July 2017, Sierra completed a restructuring which resulted in a material modification of the original terms and an extinguishment of the Company’s original investment in Sierra. Prior to the extinguishment in July 2017, the Company’s original investment in Sierra had an aggregate cost of $27,307, an aggregate fair value of $12,858 and total unearned interest income of $1,687. The extinguishment resulted in a realized loss of $14,449. As a result of the restructuring, the Company received common shares in Sierra Hamilton Holding Corporation. As of September 30, 2017, the Company’s investment has an aggregate cost basis of $12,782 and an aggregate fair value of $12,127.

During the third quarter of 2016, the Company placed its entire second lien position in Transtar Holding Company (“Transtar”) on non-accrual status due to its ongoing restructuring. As of March 31, 2017, the Company's investment in Transtar had an aggregate cost basis of $31,166, an aggregate fair value of $3,621 and total unearned interest income of approximately $1,809 for the three months then ended. In April 2017, Transtar completed a restructuring which resulted in a $3,606 million repayment of the Company's second lien position. The Company recognized a realized loss of $27,560 during the nine months ended September 30, 2017 related to Transtar.

During the second quarter of 2016, the Company placed a portion of its first lien position in Permian Tank & Manufacturing, Inc. (“Permian”) on non-accrual status due to its ongoing restructuring. As of September 30, 2016, the Company’s investment in Permian had an aggregate cost basis of $24,444, an aggregate fair value of $7,064 and total unearned interest income of $1,273 for the nine months then ended. In October 2016, Permian completed a restructuring which resulted in a material modification of the original terms and an extinguishment of the Company’s original investment in Permian. Prior to the extinguishment in October 2016, the Company’s original investment in Permian had an aggregate cost of $25,047, an aggregate fair value of $7,064 and total unearned interest income of $1,422 for the year ended December 31, 2016. The extinguishment resulted in a realized loss of $17,983. Post restructuring, the Company’s investments in Permian have been restored to full accrual status. As of September 30, 2017, the Company’s investments in Permian have an aggregate cost basis of $9,867 and an aggregate fair value of $12,000.

During the third quarter of 2016, the Company received notice that there would be no recovery of the outstanding principal and interest owed on its two super priority first lien positions in ATI Acquisition Company ("ATI"). As of June 30, 2016, the Company’s first lien positions in ATI had an aggregate cost of $1,528 and an aggregate fair value of $0 and no unearned interest income for the period then ended. The Company wrote off its first lien positions in ATI and recognized an aggregate realized loss of $1,528 during the three months ended September 30, 2016. As of September 30, 2017, the Company's preferred shares and warrants in Ancora Acquisition LLC, which were received as a result of the Company's first lien positions in ATI, had an aggregate cost basis of $83 and an aggregate fair value of $393.

~~As of September 30, 2017,~~2019, the Company had unfunded commitments on revolving credit facilities and bridge facilities of ~~$38,645~~$45,924 and $0, respectively. As of ~~September~~June 30, ~~2017,~~2019, the Company had unfunded commitments in the form of delayed draws or other future funding commitments of ~~$36,830.~~$103,417. The unfunded commitments on revolving credit facilities and delayed draws are disclosed on the Company’s Consolidated Schedule of Investments as of ~~September~~June 30, ~~2017.~~2019.

As of December 31, ~~2016,~~2018, the Company had unfunded commitments on revolving credit facilities and bridge facilities of ~~$27,915~~$43,539 and $0, respectively. As of December 31, ~~2016,~~2018, the Company had unfunded commitments in the form of delayed draws or other future funding commitments of ~~$16,368.~~$94,407. The unfunded commitments on revolving credit facilities and delayed draws are disclosed on the Company’s Consolidated Schedule of Investments as of December 31, ~~2016.~~2018.

PPVA Black Elk (Equity) LLC

On May 3, 2013, the Company entered into a collateralized securities purchase and put agreement (the “SPP Agreement”) with a private hedge fund. Under the SPP Agreement, the Company purchased twenty million Class E Preferred Units of Black Elk Energy Offshore Operations, LLC (“Black Elk”) for $20,000 with a corresponding obligation of the private hedge fund to repurchase the preferred units for $20,000 plus other amounts due under the SPP Agreement. The majority owner of Black Elk was the private hedge fund. In August 2014, the Company received a payment of $20,540, the full amount due under the SPP Agreement.

In August 2017, a trustee (the “Trustee”) for Black Elk informed the Company that the Trustee intended to assert a fraudulent conveyance claim (the “Claim”) against the Company and one of its affiliates seeking the return of the $20,540 repayment. Black Elk filed a Chapter 11 bankruptcy petition pursuant to the United States Bankruptcy Code in August 2015.

The Trustee alleges that individuals affiliated with the private hedge fund conspired with Black Elk and others to improperly use proceeds from the sale of certain Black Elk assets to repay, in August 2014, the private hedge fund’s obligation to the Company under the SPP Agreement. The Company was unaware of these claims at the time the repayment was received. The private hedge fund is currently in liquidation under the laws of the Cayman Islands.

On December 22, 2017, the Company settled the Trustee’s $20,540 Claim for $16,000 and filed a claim with the Cayman Islands joint official liquidators of the private hedge fund for $16,000 that is owed to the Company under the SPP Agreement. The SPP Agreement was restored and is in effect since repayment has not been made. The Company continues to exercise its rights under the SPP Agreement and continues to monitor the liquidation process of the private hedge fund. As of June 30, 2019 and December 31, 2018, the SPP Agreement has a cost basis of $14,500 and $14,500, respectively, and a fair value of $11,362 and $11,362, respectively, which is reflective of the higher inherent risk in this transaction.

NMFC Senior Loan Program I LLC

NMFC Senior Loan Program I LLC (“SLP I”) was formed as a Delaware limited liability company on May 27, 2014 and commenced operations on June 10, 2014. SLP I is a portfolio company held by the Company. SLP I is structured as a private investment fund, in which all of the investors are qualified purchasers, as such term is defined under the 1940 Act. Transfer of interests in SLP I isare subject to restrictions and, as a result, ~~such~~ interests are not readily marketable. SLP I operates under a limited liability company agreement (the “SLP I Agreement”) and will continue in existence until ~~June 10, 2019,~~August 31, 2021, subject to earlier termination pursuant to certain terms of the SLP I Agreement. The term may be extended ~~for up to one year~~ pursuant to certain terms of the SLP I Agreement. SLP ~~I had a three year re-investment period. In June 2017, the~~I's re-investment period ~~was extended for one additional year.~~is currently until August 31, 2019. SLP I invests in senior secured loans issued by companies within the Company’s core industry verticals. These investments are typically broadly syndicated first lien loans.

SLP I is capitalized with $93,000 of capital commitments and $265,000 of debt from a revolving credit facility and is managed by the Company. The Company’s capital commitment is $23,000, representing less than 25.0% ownership, with third party investors representing the remaining capital commitments. As of ~~September~~June 30, ~~2017,~~2019, SLP I had total investments with an aggregate fair value of approximately ~~$336,725,~~$341,161, debt outstanding of ~~$244,167~~$233,367 and capital that had been called and funded of $93,000. As of December 31, ~~2016,~~2018, SLP I had total investments with an aggregate fair value of approximately ~~$348,672,~~$327,240, debt outstanding of ~~$256,517~~$242,567 and capital that had been called and funded of $93,000. The Company’s investment in SLP I is disclosed on the Company’s Consolidated Schedule of Investments as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016.~~2018.

The Company, as an investment adviser registered under the Advisers Act, acts as the collateral manager to SLP I and is entitled to receive a management fee for its investment management services provided to SLP I. As a result, SLP I is classified as an affiliate of the Company. No management fee is charged on the Company's investment in SLP I in connection with the administrative services provided to SLP I. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, the Company earned approximately ~~$286~~$291 and ~~$865,~~$574, respectively, in management fees related to SLP I, which is included in other income. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, the Company earned approximately ~~$284~~$301 and ~~$877,~~$596, respectively, in management fees related to SLP I, which is included in other income. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately ~~$286~~$291 and ~~$286,~~$288, respectively, of management fees related to SLP I was included in receivable from affiliates. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, the Company earned approximately ~~$816~~$812 and ~~$2,662,~~$1,538, respectively, of dividend income related to SLP I, which is included in dividend income. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, the Company earned approximately ~~$1,061~~$791 and ~~$2,868,~~$1,636, respectively, of dividend income related to SLP I, which is included in dividend income. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately ~~$816~~$812 and ~~$861,~~$750, respectively, of dividend income related to SLP I was included in interest and dividend receivable.

NMFC Senior Loan Program II LLC

NMFC Senior Loan Program II LLC ("SLP II") was formed as a Delaware limited liability company on March 9, 2016 and commenced operations on April 12, 2016. SLP II is structured as a private joint venture investment fund between the Company and SkyKnight Income, LLC (“SkyKnight”) and operates under a limited liability company agreement (the "SLP II Agreement"). The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within the Company's core industry verticals. These investments are typically broadly syndicated first lien loans. All investment decisions must be unanimously approved by the board of managers of SLP II, which has equal representation from the Company and SkyKnight. SLP ~~II has a three year~~II's investment period is currently until April 12, 2020 and SLP II will continue in existence until April 12, ~~2021.~~2022. The term may be extended for up to one year pursuant to certain terms of the SLP II Agreement.

SLP II is capitalized with equity contributions which ~~were~~are called from its members, on a pro-rata basis based on their equity commitments, as transactions ~~were~~are completed. Any decision by SLP II to call down on capital commitments ~~required~~requires approval by the board of managers of SLP II. As of ~~September~~June 30, ~~2017,~~2019, the Company and SkyKnight have committed and contributed $79,400 and $20,600, respectively, of equity to SLP II. The Company’s investment in SLP II is disclosed on the Company’s Consolidated Schedule of Investments as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016.~~2018.

On April 12, 2016, SLP II closed its $275,000 revolving credit facility with Wells Fargo Bank, National Association, which matures on April 12, ~~2021~~2022 and bears interest at a rate of the London Interbank Offered Rate ("LIBOR") plus ~~1.75%~~1.60% per annum. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, SLP II had total investments with an aggregate fair value of approximately ~~$359,265~~$364,281 and ~~$361,719,~~$336,869, respectively, and debt outstanding under its credit facility of ~~$229,460~~$267,670 and ~~$249,960,~~$243,170, respectively. As of June 30, 2019 and December 31, 2018, none of SLP II's investments were on non-accrual. Additionally, as of June 30, 2019 and December 31, 2018, SLP II had unfunded commitments in the form of delayed draws of $4,109 and $5,858, respectively. Below is a summary of SLP II's portfolio, along with a listing of the individual investments in SLP II's portfolio as of June 30, 2019 and December 31, 2018:



	June 30, 2019			December 31, 2018
First lien investments (1)	$	373,248		$	348,577
Weighted average interest rate on first lien investments (2)	6.67		%	6.84		%
Number of portfolio companies in SLP II	36			31
Largest portfolio company investment (1)	$	17,063		$	17,150
Total of five largest portfolio company investments (1)	$	79,559		$	80,766


(1)	Reflects principal amount or par value of investment.


(2)	Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

The following table is a listing of the individual ~~loans~~investments in SLP II's portfolio as of ~~September~~June 30, ~~2017:~~2019:


Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost		Fair Value (2)		Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Funded Investments - First lien:
Access CIG, LLC										Business Services	6.19% (L + 3.75%)	2/27/2025	$	9,883	$	9,841		$	9,840
ADG, LLC	Healthcare Services	6.00% (L + 4.75%)	9/28/2023	$	17,077	$	16,927	$	16,992	Healthcare Services	7.45% (L + 4.75% + 0.50% PIK)	9/28/2023	16,032		15,927			15,792
ASG Technologies Group, Inc.	Software	6.06% (L + 4.75%)	7/31/2024	7,500		7,463		7,594
Beaver-Visitec International Holdings, Inc.	Healthcare Products	6.33% (L + 5.00%)	8/21/2023	14,850		14,721		14,850
Cvent, Inc.	Software	5.24% (L + 4.00%)	11/29/2023	9,950		9,860		10,037
DigiCert Holdings, Inc.	Business Services	6.24% (L + 5.00%)	10/21/2021	14,739		14,666		14,831
DigiCert Holdings, Inc.	Business Services	5.98% (L + 4.75%)	10/31/2024	10,000		9,950		10,109
Eiger Acquisition B.V. (Eiger Co-Borrower, LLC)	Software	6.52% (L + 5.25%)	2/18/2022	14,886		14,753		14,988
Emerald 2 Limited	Business Services	5.33% (L + 4.00%)	5/14/2021	1,266		1,207		1,241
Evo Payments International, LLC	Business Services	6.24% (L + 5.00%)	12/22/2023	17,413		17,333		17,649
Explorer Holdings, Inc.	Healthcare Services	5.06% (L + 3.75%)	5/2/2023	2,948		2,923		2,968
Globallogic Holdings Inc.	Business Services	5.83% (L + 4.50%)	6/20/2022	9,701		9,632		9,780
Bearcat Buyer, Inc.										Healthcare Services	6.56% (L + 4.25%)	7/9/2026	1,382		1,375			1,375
Brave Parent Holdings, Inc.										Software	6.58% (L + 4.00%)	4/18/2025	15,345		15,296			15,259
CentralSquare Technologies, LLC										Software	6.15% (L + 3.75%)	8/29/2025	14,925		14,891			14,771
CHA Holdings, Inc.										Business Services	6.83% (L + 4.50%)	4/10/2025	10,751		10,709			10,738
CHA Holdings, Inc.										Business Services	6.81% (L + 4.50%)	4/10/2025	2,057		2,047			2,055
CommerceHub, Inc.										Software	6.15% (L + 3.75%)	5/21/2025	2,475		2,464			2,438
Drilling Info Holdings, Inc.										Business Services	6.65% (L + 4.25%)	7/30/2025	14,770		14,712			14,696
Edgewood Partners Holdings LLC										Business Services	6.65% (L + 4.25%)	9/6/2024	6,381		6,321			6,365
Fastlane Parent Company, Inc.										Distribution & Logistics	6.83% (L + 4.50%)	2/4/2026	3,491		3,424			3,443
GOBP Holdings, Inc.										Retail	6.14% (L + 3.75%)	10/22/2025	1,639		1,635			1,640
Greenway Health, LLC	Software	5.58% (L + 4.25%)	2/16/2024	14,963		14,893		15,025		Software	6.08% (L + 3.75%)	2/16/2024	14,700		14,648			13,046
Hyperion Insurance Group Limited	Business Services	5.25% (L + 4.00%)	4/29/2022	10,694		10,550		10,834
Idera, Inc.	Software	6.24% (L + 5.00%)	6/28/2024	12,650		12,526		12,655		Software	6.91% (L + 4.50%)	6/28/2024	14,928		14,821			14,966
J.D. Power and Associates	Business Services	5.58% (L + 4.25%)	9/7/2023	13,391		13,340		13,466
Institutional Shareholder Services Inc.										Business Services	6.83% (L + 4.50%)	3/5/2026	13,965		13,829			13,860
J.D. Power (fka J.D. Power and Associates)										Business Services	6.15% (L + 3.75%)	9/7/2023	14,885		14,847			14,848
Keystone Acquisition Corp.	Healthcare Services	6.58% (L + 5.25%)	5/1/2024	5,400		5,348		5,404		Healthcare Services	7.58% (L + 5.25%)	5/1/2024	5,306		5,266			5,194
LSCS Holdings, Inc.										Healthcare Services	6.58% (L + 4.25%)	3/17/2025	7,316		7,308			7,280
LSCS Holdings, Inc.										Healthcare Services	6.58% (L + 4.25%)	3/17/2025	1,889		1,886			1,879
Market Track, LLC	Business Services	5.58% (L + 4.25%)	6/5/2024	11,970		11,912		11,970		Business Services	6.65% (L + 4.25%)	6/5/2024	11,760		11,716			10,584
McGraw-Hill Global Education Holdings, LLC	Education	5.24% (L + 4.00%)	5/4/2022	9,875		9,836		9,716
Medical Solutions Holdings, Inc.	Healthcare Services	5.58% (L + 4.25%)	6/14/2024	6,983		6,949		7,044		Healthcare Services	6.15% (L + 3.75%)	6/14/2024	4,409		4,393			4,409
Ministry Brands, LLC	Software	6.24% (L + 5.00%)	12/2/2022	2,143		2,133		2,163		Software	6.33% (L + 4.00%)	12/2/2022	12,222		12,181			12,222
Ministry Brands, LLC	Software	6.24% (L + 5.00%)	12/2/2022	7,787		7,753		7,859		Software	6.33% (L + 4.00%)	12/2/2022	2,105		2,099			2,105
Navex Global, Inc.	Software	5.49% (L + 4.25%)	11/19/2021	14,935		14,751		14,991
Ministry Brands, LLC										Software	6.33% (L + 4.00%)	12/2/2022	884		880			884
NorthStar Financial Services Group, LLC										Software	5.60% (L + 3.25%)	5/25/2025	5,885		5,859			5,804
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	6.49% (L + 5.25%)	4/29/2024	10,474		10,424		10,552		Federal Services	7.66% (L + 5.25%)	4/29/2024	10,290		10,252			10,226
Poseidon Intermediate, LLC	Software	5.49% (L + 4.25%)	8/15/2022	14,909		14,906		14,984		Software	6.66% (L + 4.25%)	8/15/2022	14,654		14,651			14,678
Premise Health Holding Corp.										Healthcare Services	5.83% (L + 3.50%)	7/10/2025	1,379		1,373			1,371
Project Accelerate Parent, LLC										Business Services	6.66% (L + 4.25%)	1/2/2025	14,813		14,751			14,775
PSC Industrial Holdings Corp.										Industrial Services	6.14% (L + 3.75%)	10/11/2024	10,343		10,261			10,327
Quartz Holding Company										Software	6.44% (L + 4.00%)	4/2/2026	4,000		3,980			3,995
Quest Software US Holdings Inc.	Software	7.24% (L + 6.00%)	10/31/2022	9,924		9,794		10,069		Software	6.83% (L + 4.25%)	5/16/2025	14,925		14,860			14,729
Salient CRGT Inc.	Federal Services	6.99% (L + 5.75%)	2/28/2022	14,741		14,608		14,704		Federal Services	8.40% (L + 6.00%)	2/28/2022	13,321		13,244			12,789
Severin Acquisition, LLC	Software	5.99% (L + 4.75%)	7/30/2021	14,925		14,860		14,850
Shine Acquisitoin Co. S.à.r.l / Boing US Holdco Inc.	Consumer Services	4.73% (L + 3.50%)	10/3/2024	15,000		14,963		15,061
TMK Hawk Parent, Corp.	Distribution & Logistics	4.77% (L + 3.50%)	8/28/2024	1,675		1,671		1,689
University Support Services LLC (St. George's University Scholastic Services LLC)	Education	5.49% (L + 4.25%)	7/6/2022	1,928		1,928		1,936
Vencore, Inc. (fka SI Organization, Inc., The)	Federal Services	6.08% (L + 4.75%)	11/23/2019	10,715		10,700		10,877
Spring Education Group, Inc. (fka SSH Group Holdings, Inc.)										Education	6.83% (L + 4.25%)	7/30/2025	8,933		8,913			8,894
The Ultimate Software Group Inc.										Software	6.08% (L + 3.75%)	5/4/2026	5,000		4,988			5,014
Wirepath LLC										Distribution & Logistics	6.33% (L + 4.00%)	8/5/2024	14,888		14,888			14,813
WP CityMD Bidco LLC	Healthcare Services	5.33% (L + 4.00%)	6/7/2024	15,000		14,964		15,094		Healthcare Services	5.83% (L + 3.50%)	6/7/2024	10,768		10,748			10,761
Wrench Group LLC										Consumer Services	6.45% (L + 4.25%)	4/30/2026	4,500		4,456			4,500
YI, LLC										Healthcare Services	6.33% (L + 4.00%)	11/7/2024	14,877		14,866			14,858
Zywave, Inc.	Software	6.32% (L + 5.00%)	11/17/2022	17,369		17,293		17,282		Software	7.58% (L + 5.00%)	11/17/2022	17,063		17,010			17,063
Total Funded Investments				$	357,781	$	355,537	$	359,264				$	369,139	$	367,616		$	364,286
Unfunded Investments - First lien:
TMK Hawk Parent, Corp.	Distribution & Logistics	—	3/28/2018	$	75	$	—	$	1
Bearcat Buyer, Inc.										Healthcare Services	—	7/9/2021	$	284	$	(1	)	$	(1	)
CHA Holdings, Inc.										Business Services	—	10/10/2019	86		—			—
Drilling Info Holdings, Inc.										Business Services	—	7/30/2020	62		—			—
Edgewood Partners Holdings LLC										Business Services	—	7/31/2019	1,087		(11		)	(3		)
Ministry Brands, LLC										Software	—	10/18/2019	980		(5		)	—
Premise Health Holding Corp.										Healthcare Services	—	7/10/2020	110		—			(1		)
Wrench Group LLC										Consumer Services	—	4/30/2021	1,500		—			—
Total Unfunded Investments				$	75	$	—	$	1				$	4,109	$	(17	)	$	(5	)
Total Investments				$	357,856	$	355,537	$	359,265				$	373,248	$	367,599		$	364,281


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L)~~, the Prime Rate (P) and the alternative base rate (Base)~~. For each investment, the current interest rate provided reflects the rate in effect as of ~~September~~June 30, ~~2017.~~2019.


(2)	Represents the fair value in accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). The Company's board of directors does not determine the fair value of the investments held by SLP II.

The following table is a listing of the individual ~~loans~~investments in SLP II's portfolio as of December 31, ~~2016:~~2018:

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair
Value (2)
Funded Investments - First lien:
ADG, LLC Healthcare Services 5.75% (L + 4.75%) 9/28/2023 $ 17,207
$ 17,040
$ 17,121
AssuredPartners, Inc. Business Services 5.25% (L + 4.25%) 10/21/2022 11,862
11,847
12,058
Beaver-Visitec International Holdings, Inc. Healthcare Products 6.00% (L + 5.00%) 8/21/2023 14,962
14,819
14,963
Coinstar, LLC Consumer Services 5.25% (L + 4.25%) 9/27/2023 4,987
4,963
5,054
Cvent, Inc. Software 6.00% (L + 5.00%) 11/29/2023 10,000
9,901
10,125
DigiCert Holdings, Inc. Software 6.00% (L + 5.00%) 10/21/2021 14,900
14,814
14,881
Eiger Acquisition B.V. (Eiger Co-Borrower, LLC) Software 6.25% (L + 5.25%) 2/18/2022 10,507
10,350
10,402
Emerald 2 Limited Business Services 5.00% (L + 4.00%) 5/14/2021 1,277
1,206
1,174
Engility Corporation (fka TASC, Inc.) Federal Services 5.81% (Base + 4.72%) 8/14/2023 13,860
13,793
14,080
Evo Payments International, LLC Business Services 6.00% (L + 5.00%) 12/22/2023 17,500
17,413
17,602
Explorer Holdings, Inc. Healthcare Services 6.00% (L + 5.00%) 5/2/2023 4,975
4,929
5,028
Globallogic Holdings Inc. Business Services 5.50% (L + 4.50%) 6/20/2022 10,000
9,900
10,013
GOBP Holdings Inc. Retail 5.00% (L + 4.00%) 10/21/2021 14,955
14,816
14,985
Hyperion Insurance Group Limited Business Services 5.50% (L + 4.50%) 4/29/2022 14,401
14,179
14,476
J.D. Power and Associates Business Services 5.25% (L + 4.25%) 9/7/2023 9,975
9,927
10,075
Kronos Incorporated Software 5.00% (L + 4.00%) 11/1/2023 10,000
9,951
10,105
Masergy Holdings, Inc. Business Services 5.50% (L + 4.50%) 12/15/2023 7,500
7,463
7,563
McGraw-Hill Global Education Holdings, LLC Education 5.00% (L + 4.00%) 5/4/2022 9,950
9,905
9,971
Ministry Brands, LLC Software 6.00% (L + 5.00%) 12/2/2022 7,846
7,807
7,807
Mister Car Wash Holdings, Inc. Consumer Services 5.25% (L + 4.25%) 8/20/2021 8,312
8,250
8,354
Navex Global, Inc. Software 5.99% (L + 4.75%) 11/19/2021 14,933
14,718
14,858
nThrive, Inc. (fka Precyse Acquisition Corp.) Healthcare Services 6.50% (L + 5.50%) 10/20/2022 9,950
9,813
10,083
Poseidon Intermediate, LLC Software 5.25% (L + 4.25%) 8/15/2022 14,962
14,962
15,055
Quest Software US Holdings Inc. Software 7.00% (L + 6.00%) 10/31/2022 10,000
9,853
10,153
Rocket Software, Inc. Software 5.25% (L + 4.25%) 10/14/2023 14,962
14,817
15,129
SolarWinds Holdings, Inc. Software 5.50% (L + 4.50%) 2/3/2023 14,688
14,697
14,852
TTM Technologies, Inc. Business Products 5.25% (L + 4.25%) 5/31/2021 13,548
13,444
13,599
Vencore, Inc. (fka SI Organization, Inc., The) Federal Services 5.75% (L + 4.75%) 11/23/2019 10,801
10,780
10,942
Vision Solutions, Inc. Software 7.50% (Base + 6.50%) 6/16/2022 9,938
9,845
9,919
Vivid Seats LLC Business Services 6.75% (L + 5.75%) 10/12/2022 4,000
3,922
3,985
WD Wolverine Holdings, LLC Healthcare Services 6.50% (L + 5.50%) 10/17/2023 10,200
9,900
9,894
Zywave, Inc. Software 6.00% (L + 5.00%) 11/17/2022 17,500
17,414
17,413
Total Investments $ 360,458
$ 357,438
$ 361,719



Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Funded Investments - First lien
Access CIG, LLC	Business Services	6.46% (L + 3.75%)	2/27/2025	$	8,825	$	8,785		$	8,605
ADG, LLC	Healthcare Services	7.63% (L + 4.75%)	9/28/2023	16,862		16,740			16,609
Beaver-Visitec International Holdings, Inc.	Healthcare Products	6.62% (L + 4.00%)	8/21/2023	14,664		14,492			14,517
Brave Parent Holdings, Inc.	Software	6.52% (L + 4.00%)	4/18/2025	15,422		15,369			14,902
CentralSquare Technologies, LLC	Software	6.27% (L + 3.75%)	8/29/2025	15,000		14,964			14,648
CHA Holdings, Inc.	Business Services	7.30% (L + 4.50%)	4/10/2025	10,805		10,760			10,774
CommerceHub, Inc.	Software	6.27% (L + 3.75%)	5/21/2025	2,488		2,476			2,419
Drilling Info Holdings, Inc.	Business Services	6.77% (L + 4.25%)	7/30/2025	12,242		12,190			12,196
Greenway Health, LLC	Software	6.56% (L + 3.75%)	2/16/2024	14,775		14,718			14,406
GOBP Holdings, Inc.	Retail	6.55% (L + 3.75%)	10/22/2025	2,500		2,494			2,438
Idera, Inc.	Software	7.03% (L + 4.50%)	6/28/2024	12,492		12,388			12,242
J.D. Power (fka J.D. Power and Associates)	Business Services	6.27% (L + 3.75%)	9/7/2023	14,962		14,920			14,588
Keystone Acquisition Corp.	Healthcare Services	8.05% (L + 5.25%)	5/1/2024	5,332		5,289			5,226
LSCS Holdings, Inc.	Healthcare Services	6.86% (L + 4.25%)	3/17/2025	5,321		5,312			5,294
LSCS Holdings, Inc.	Healthcare Services	6.89% (L + 4.25%)	3/17/2025	1,374		1,371			1,367
Market Track, LLC	Business Services	6.87% (L + 4.25%)	6/5/2024	11,820		11,772			11,347
Medical Solutions Holdings, Inc.	Healthcare Services	6.27% (L + 3.75%)	6/14/2024	4,432		4,413			4,343
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	2,116		2,109			2,116
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	600		597			600
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	12,285		12,238			12,285
NorthStar Financial Services Group, LLC	Software	6.10% (L + 3.50%)	5/25/2025	7,463		7,428			7,313
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	8.06% (L + 5.25%)	4/29/2024	10,342		10,301			10,084
Poseidon Intermediate, LLC	Software	6.78% (L + 4.25%)	8/15/2022	14,729		14,727			14,644
Premise Health Holding Corp.	Healthcare Services	6.55% (L + 3.75%)	7/10/2025	1,386		1,380			1,369
Project Accelerate Parent, LLC	Business Services	6.64% (L + 4.25%)	1/2/2025	14,887		14,821			14,663
PSC Industrial Holdings Corp.	Industrial Services	6.21% (L + 3.75%)	10/11/2024	10,395		10,307			10,161
Quest Software US Holdings Inc.	Software	6.78% (L + 4.25%)	5/16/2025	15,000		14,930			14,535
Salient CRGT Inc.	Federal Services	8.27% (L + 5.75%)	2/28/2022	13,509		13,418			13,306
Sierra Acquisition, Inc.	Food & Beverage	6.02% (L + 3.50%)	11/11/2024	3,713		3,696			3,685
SSH Group Holdings, Inc.	Education	6.77% (L + 4.25%)	7/30/2025	8,978		8,956			8,753
Wirepath LLC	Distribution & Logistics	6.71% (L + 4.00%)	8/5/2024	14,963		14,963			14,738
WP CityMD Bidco LLC	Healthcare Services	6.30% (L + 3.50%)	6/7/2024	10,823		10,801			10,620
YI, LLC	Healthcare Services	6.80% (L + 4.00%)	11/7/2024	15,064		15,053			14,971
Zywave, Inc.	Software	7.52% (L + 5.00%)	11/17/2022	17,150		17,091			17,150
Total Funded Investments				$	342,719	$	341,269		$	336,914
Unfunded Investments - First lien
Access CIG, LLC	Business Services	—	2/27/2019	$	1,108	$	—		$	(28	)
CHA Holdings, Inc.	Business Services	—	10/10/2019	2,143		(11		)	(6		)
Drilling Info Holdings, Inc.	Business Services	—	7/30/2020	1,230		(5		)	(10		)
Ministry Brands, LLC	Software	—	10/18/2019	1,267		(6		)	—
Premise Health Holding Corp.	Healthcare Services	—	7/10/2020	110		—			(1		)
Total Unfunded Investments				$	5,858	$	(22	)	$	(45	)
Total Investments				$	348,577	$	341,247		$	336,869


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L)~~, the Prime Rate (P) and the alternative base rate (Base)~~. For each investment, the current interest rate provided reflects the rate in effect as of December 31, ~~2016.~~2018.


(2)	Represents the fair value in accordance with ASC 820. The Company's board of directors does not determine the fair value of the investments held by SLP II.

Below is certain summarized financial information for SLP II as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016~~2018 and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016:~~2018:


Selected Balance Sheet Information:	September 30, 2017			December 31, 2016			June 30, 2019			December 31, 2018
Investments at fair value (cost of $355,537 and $357,438, respectively)	$	359,265		$	361,719
Receivable from unsettled securities sold	—			1,007
Investments at fair value (cost of $367,599 and $341,247, respectively)							$	364,281		$	336,869
Cash and other assets	6,838			10,138			8,792			7,620
Total assets	$	366,103		$	372,864		$	373,073		$	344,489

Credit facility	$	229,460		$	249,960		$	267,670		$	243,170
Deferred financing costs	(2,117		)	(2,565		)	(1,852		)	(1,374		)
Distribution payable							3,500			3,250
Payable for unsettled securities purchased	28,080			24,862			3,861			—
Distribution payable	3,800			3,000
Other liabilities	2,792			3,350			2,872			2,869
Total liabilities	262,015			278,607			276,051			247,915

Members' capital	$	104,088		$	94,257		$	97,022		$	96,574
Total liabilities and members' capital	$	366,103		$	372,864		$	373,073		$	344,489


Selected Statement of	Three Months Ended				Nine Months Ended
Operations Information:	September 30, 2017		September 30, 2016		September 30, 2017			September 30, 2016(1)
Selected Statement of Operations										Three Months Ended						Six Months Ended
Information:										June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest income	$	5,858	$	2,698	$	16,661		$	3,326	$	6,345		$	6,134		$	12,568		$	11,764
Other income	27		114		343			163		32			36			58			58
Total investment income	5,885		2,812		17,004			3,489		6,377			6,170			12,626			11,822

Interest and other financing expenses	2,185		1,398		6,108			1,931		2,966			2,553			5,739			4,981
Other expenses	159		134		533			463		144			140			279			364
Total expenses	2,344		1,532		6,641			2,394		3,110			2,693			6,018			5,345
Less: expenses waived and reimbursed										(20		)	—			(20		)	—
Net expenses										3,090			2,693			5,998			5,345
Net investment income	3,541		1,280		10,363			1,095		3,287			3,477			6,628			6,477

Net realized gains on investments	223		229		2,145			263		253			180			261			633
Net change in unrealized appreciation (depreciation) of investments	88		1,863		(553		)	1,978
Net change in unrealized (depreciation) appreciation of investments										(487		)	(957		)	1,060			(280		)
Net increase in members' capital	$	3,852	$	3,372	$	11,955		$	3,336	$	3,053		$	2,700		$	7,949		$	6,830


~~(1)~~	~~SLP II commenced operations on April 12, 2016.~~

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, the Company earned approximately ~~$3,017~~$2,779 and ~~$9,627,~~$5,955, respectively, of dividend income related to SLP II, which is included in dividend income. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, the Company earned approximately ~~$1,151~~$3,144 and ~~$1,151,~~$5,764, respectively, of dividend income related to SLP II, which is included in dividend income. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately ~~$3,017~~$2,779 and ~~$2,382,~~$2,581, respectively, of dividend income related to SLP II was included in interest and dividend receivable.

The Company has determined that SLP II is an investment company under ASC 946; however, in accordance with such guidance the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary. Furthermore, Accounting Standards Codification Topic 810, Consolidation("ASC 810"), concludes that in a joint venture where both members have equal decision making authority, it is not appropriate for one member to consolidate the joint venture since neither has control. Accordingly, the Company does not consolidate SLP II.

NMFC Senior Loan Program III LLC

NMFC Senior Loan Program III LLC ("SLP III") was formed as a Delaware limited liability company and commenced operations on April 25, 2018. SLP III is structured as a private joint venture investment fund between the Company and SkyKnight Income II, LLC (“SkyKnight II”) and operates under a limited liability company agreement (the "SLP III Agreement"). The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within the Company's core industry verticals. These investments are typically broadly syndicated first lien loans. All investment decisions must be unanimously approved by the board of managers of SLP III, which has equal representation from the Company and SkyKnight II. SLP III has a five year investment period and will continue in existence until April 25, 2025. The investment period may be extended for up to one year pursuant to certain terms of the SLP III Agreement.

SLP III is capitalized with equity contributions which are called from its members, on a pro-rata basis based on their equity commitments, as transactions are completed. Any decision by SLP III to call down on capital commitments requires approval by the board of managers of SLP III. As of June 30, 2019, the Company and SkyKnight II have committed $100,000 and $25,000, respectively, of equity to SLP III. As of June 30, 2019, the Company and SkyKnight II have contributed $80,000 and $20,000, respectively, of equity to SLP III. The Company’s investment in SLP III is disclosed on the Company’s Consolidated Schedule of Investments as of June 30, 2019 and December 31, 2018.

On May 2, 2018, SLP III closed its revolving credit facility with Citibank, N.A., which matures on May 2, 2023 and bears interest at a rate of LIBOR plus 1.70% per annum. Effective June 24, 2019, SLP III's revolving credit facility has a maximum borrowing capacity of $375,000. As of June 30, 2019 and December 31, 2018, SLP III had total investments with an aggregate fair value of approximately $441,713 and $365,357, respectively, and debt outstanding under its credit facility of $288,300 and $280,300, respectively. As of June 30, 2019 and December 31, 2018, none of SLP III's investments were on non-accrual. Additionally, as of June 30, 2019 and December 31, 2018, SLP III had unfunded commitments in the form of delayed draws of $11,898 and $8,811, respectively. Below is a summary of SLP III's portfolio, along with a listing of the individual investments in SLP III's portfolio as of June 30, 2019 and December 31, 2018:



	June 30, 2019			December 31, 2018
First lien investments (1)	$	459,743		$	383,289
Weighted average interest rate on first lien investments (2)	6.36		%	6.50		%
Number of portfolio companies in SLP III	46			39
Largest portfolio company investment (1)	$	24,000		$	18,958
Total of five largest portfolio company investments (1)	$	94,581		$	85,938


(1)	Reflects principal amount or par value of investment.


(2)	Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

The following table is a listing of the individual investments in SLP III's portfolio as of June 30, 2019:



Portfolio Company and Type of Investment	Industry		Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost		Fair Value (2)
Funded Investments - First lien
Access CIG, LLC	Business Services		6.19% (L + 3.75%)	2/27/2025	$	1,210	$	1,210	$	1,204
Affordable Care Holding Corp.	Healthcare Services		7.23% (L + 4.75%)	10/24/2022	5,994		5,902		5,844
BCPE Empire Holdings, Inc.	Distribution & Logistics		6.40% (L + 4.00%)	6/10/2026	9,190		9,098		9,167
Bearcat Buyer, Inc.	Healthcare Services	��	6.56% (L + 4.25%)	7/9/2026	19,902		19,803		19,803
Bracket Intermediate Holding Corp.	Healthcare Services		6.82% (L + 4.25%)	9/5/2025	14,888		14,820		14,850
Brave Parent Holdings, Inc.	Software		6.58% (L + 4.00%)	4/18/2025	14,850		14,803		14,766
CentralSquare Technologies, LLC	Software		6.15% (L + 3.75%)	8/29/2025	14,925		14,891		14,771
Certara Holdco, Inc.	Healthcare I.T.		5.83% (L + 3.50%)	8/15/2024	1,269		1,273		1,262
CHA Holdings, Inc.	Business Services		6.83% (L + 4.50%)	4/10/2025	992		992		991
CommerceHub, Inc.	Software		6.15% (L + 3.75%)	5/21/2025	14,850		14,785		14,627
Covenant Surgical Partners, Inc.	Healthcare Services		6.40% (L + 4.25%)	7/1/2026	10,000		9,900		9,963
CRCI Longhorn Holdings, Inc.	Business Services		5.91% (L + 3.50%)	8/8/2025	14,887		14,821		14,739
Dentalcorp Health Services ULC (fka Dentalcorp Perfect Smile ULC)	Healthcare Services		6.15% (L + 3.75%)	6/6/2025	14,860		14,828		14,715
Drilling Info Holdings, Inc.	Business Services		6.65% (L + 4.25%)	7/30/2025	18,798		18,713		18,704
Edgewood Partners Holdings LLC	Business Services		6.65% (L + 4.25%)	9/6/2024	6,381		6,321		6,365
Fastlane Parent Company, Inc.	Distribution & Logistics		6.83% (L + 4.50%)	2/4/2026	3,491		3,424		3,443
Greenway Health, LLC	Software		6.08% (L + 3.75%)	2/16/2024	14,746		14,755		13,088
Heartland Dental, LLC	Healthcare Services		6.15% (L + 3.75%)	4/30/2025	18,410		18,330		17,520
Idera, Inc.	Software		6.91% (L + 4.50%)	6/28/2024	9,783		9,740		9,807
Institutional Shareholder Services Inc.	Business Services		6.83% (L + 4.50%)	3/5/2026	998		988		990
J.D. Power (fka J.D. Power and Associates)	Business Services		6.15% (L + 3.75%)	9/7/2023	5,954		5,954		5,939
Kestra Advisor Services Holdings A, Inc.	Business Services		6.78% (L + 4.25%)	6/3/2026	9,500		9,420		9,464
Market Track, LLC	Business Services		6.65% (L + 4.25%)	6/5/2024	4,802		4,797		4,322
Ministry Brands, LLC	Software		6.33% (L + 4.00%)	12/2/2022	4,572		4,555		4,572
Ministry Brands, LLC	Software		6.33% (L + 4.00%)	12/2/2022	884		880		884
National Intergovernmental Purchasing Alliance Company	Business Services		6.08% (L + 3.75%)	5/23/2025	14,850		14,838		14,664
Navex Topco, Inc.	Software		5.66% (L + 3.25%)	9/5/2025	14,887		14,819		14,620
Navicure, Inc.	Healthcare Services		6.15% (L + 3.75%)	11/1/2024	2,970		2,970		2,953
Netsmart Technologies, Inc.	Healthcare I.T.		6.15% (L + 3.75%)	4/19/2023	10,384		10,384		10,296
Newport Group Holdings II, Inc.	Business Services		6.15% (L + 3.75%)	9/12/2025	4,963		4,940		4,922
NorthStar Financial Services Group, LLC	Software		5.60% (L + 3.25%)	5/25/2025	11,770		11,719		11,609
OEConnection LLC	Business Services		6.41% (L + 4.00%)	11/22/2024	1,821		1,833		1,807
Outcomes Group Holdings, Inc.	Healthcare Services		6.02% (L + 3.50%)	10/24/2025	6,468		6,453		6,395
Pelican Products, Inc.	Business Products		5.91% (L + 3.50%)	5/1/2025	4,950		4,939		4,876
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services		7.66% (L + 5.25%)	4/29/2024	15,509		15,444		15,412
Premise Health Holding Corp.	Healthcare Services		5.83% (L + 3.50%)	7/10/2025	13,793		13,731		13,712
Project Accelerate Parent, LLC	Business Services		6.66% (L + 4.25%)	1/2/2025	9,975		9,925		9,950
Quartz Holding Company	Software		6.44% (L + 4.00%)	4/2/2026	2,000		1,990		1,998
Quest Software US Holdings Inc.	Software		6.83% (L + 4.25%)	5/16/2025	14,925		14,860		14,729
Refinitiv US Holdings Inc. (fka Financial & Risk US Holdings, Inc.)	Business Services		6.15% (L + 3.75%)	10/1/2025	7,960		7,942		7,734
Sierra Enterprises, LLC	Food & Beverage		6.40% (L + 4.00%)	11/11/2024	2,469		2,466		2,463
Spring Education Group, Inc. (fka SSH Group Holdings, Inc.)	Education		6.83% (L + 4.25%)	7/30/2025	14,887		14,854		14,822
TIBCO Software Inc.	Software		6.40% (L + 4.00%)	6/30/2026	5,500		5,473		5,515
VT Topco, Inc.	Business Services		6.08% (L + 3.75%)	8/1/2025	7,940		7,922		7,923
VT Topco, Inc.	Business Services		6.08% (L + 3.75%)	8/1/2025	1,646		1,642		1,642
Wirepath LLC	Distribution & Logistics		6.33% (L + 4.00%)	8/5/2024	17,389		17,389		17,303
WP CityMD Bidco LLC	Healthcare Services		5.83% (L + 3.50%)	6/7/2024	14,812		14,812		14,802
YI, LLC	Healthcare Services		6.33% (L + 4.00%)	11/7/2024	9,841		9,834		9,829
Total Funded Investments					$	447,845	$	446,182	$	441,776



Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Unfunded Investments - First lien
BCPE Empire Holdings, Inc.	Distribution & Logistics	—	6/11/2021	$	1,810	$	—		$	(5	)
Bearcat Buyer, Inc.	Healthcare Services	—	7/9/2021	4,097		(20		)	(20		)
Covenant Surgical Partners, Inc.	Healthcare Services	—	7/1/2021	2,000		(20		)	(7		)
Drilling Info Holdings, Inc.	Business Services	—	7/30/2020	63		—			—
Edgewood Partners Holdings LLC	Business Services	—	7/31/2019	1,087		(11		)	(3		)
Heartland Dental, LLC	Healthcare Services	—	4/30/2020	413		—			(20		)
Ministry Brands, LLC	Software	—	10/18/2019	980		(5		)	—
Premise Health Holding Corp.	Healthcare Services	—	7/10/2020	1,103		(3		)	(7		)
VT Topco, Inc.	Business Services	—	8/1/2020	345		—			(1		)
Total Unfunded Investments				$	11,898	$	(59	)	$	(63	)
Total Investments				$	459,743	$	446,123		$	441,713


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L). For each investment, the current interest rate provided reflects the rate in effect as of June 30, 2019.


(2)	Represents the fair value in accordance with ASC 820. The Company's board of directors does not determine the fair value of the investments held by SLP III.

The following table is a listing of the individual investments in SLP III's portfolio as of December 31, 2018:



Portfolio Company and Type of Investment	Industry		Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Funded Investments - First lien		��
Access CIG, LLC	Business Services		6.46% (L + 3.75%)	2/27/2025	$	1,216	$	1,216		$	1,185
Affordable Care Holding Corp.	Healthcare Services		7.25% (L + 4.75%)	10/24/2022	1,025		1,030			1,005
Bracket Intermediate Holding Corp.	Healthcare Services		7.00% (L + 4.25%)	9/5/2025	14,963		14,890			14,813
Brave Parent Holdings, Inc.	Software		6.52% (L + 4.00%)	4/18/2025	14,925		14,874			14,421
CentralSquare Technologies, LLC	Software		6.27% (L + 3.75%)	8/29/2025	15,000		14,964			14,648
Certara Holdco, Inc.	Healthcare I.T.		6.30% (L + 3.50%)	8/15/2024	1,275		1,280			1,255
CHA Holdings, Inc.	Business Services		7.30% (L + 4.50%)	4/10/2025	997		997			995
CommerceHub, Inc.	Software		6.27% (L + 3.75%)	5/21/2025	14,925		14,856			14,515
CRCI Longhorn Holdings, Inc.	Business Services		5.89% (L + 3.50%)	8/8/2025	14,963		14,891			14,588
Dentalcorp Perfect Smile ULC	Healthcare Services		6.27% (L + 3.75%)	6/6/2025	11,940		11,912			11,701
Dentalcorp Perfect Smile ULC	Healthcare Services		6.27% (L + 3.75%)	6/6/2025	1,686		1,685			1,652
Drilling Info Holdings, Inc.	Business Services		6.77% (L + 4.25%)	7/30/2025	17,591		17,507			17,525
Financial & Risk US Holdings, Inc.	Business Services		6.27% (L + 3.75%)	10/1/2025	8,000		7,980			7,512
GOBP Holdings, Inc.	Retail		6.55% (L + 3.75%)	10/22/2025	15,000		14,963			14,625
Greenway Health, LLC	Software		6.56% (L + 3.75%)	2/16/2024	14,821		14,831			14,450
Heartland Dental, LLC	Healthcare Services		6.27% (L + 3.75%)	4/30/2025	17,329		17,249			16,593
HIG Finance 2 Limited	Business Services		6.06% (L + 3.50%)	12/20/2024	1,995		1,985			1,939
Idera, Inc.	Software		7.03% (L + 4.50%)	6/28/2024	2,294		2,289			2,248
J.D. Power (fka J.D. Power and Associates)	Business Services		6.27% (L + 3.75%)	9/7/2023	5,985		5,985			5,835
Market Track, LLC	Business Services		6.87% (L + 4.25%)	6/5/2024	4,827		4,821			4,633
Ministry Brands, LLC	Software		6.52% (L + 4.00%)	12/2/2022	4,596		4,576			4,596
Ministry Brands, LLC	Software		6.52% (L + 4.00%)	12/2/2022	600		597			600
National Intergovernmental Purchasing Alliance Company	Business Services		6.55% (L + 3.75%)	5/23/2025	14,925		14,912			14,552
Navex Topco, Inc.	Software		5.78% (L + 3.25%)	9/5/2025	14,963		14,890			14,102
Navicure, Inc.	Healthcare Services		6.27% (L + 3.75%)	11/1/2024	2,985		2,985			2,925
Netsmart Technologies, Inc.	Healthcare I.T.		6.27% (L + 3.75%)	4/19/2023	10,437		10,437			10,307
Newport Group Holdings II, Inc.	Business Services		6.54% (L + 3.75%)	9/12/2025	4,988		4,963			4,875
NorthStar Financial Services Group, LLC	Software		6.10% (L + 3.50%)	5/25/2025	14,925		14,856			14,628
OEConnection LLC	Business Services		6.53% (L + 4.00%)	11/22/2024	1,830		1,843			1,789
Outcomes Group Holdings, Inc.	Healthcare Services		6.28% (L + 3.50%)	10/24/2025	6,500		6,484			6,394
Pelican Products, Inc.	Business Products		5.88% (L + 3.50%)	5/1/2025	4,975		4,963			4,726
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services		8.06% (L + 5.25%)	4/29/2024	15,588		15,517			15,199
Premise Health Holding Corp.	Healthcare Services		6.55% (L + 3.75%)	7/10/2025	13,862		13,796			13,689
Quest Software US Holdings Inc.	Software		6.78% (L + 4.25%)	5/16/2025	15,000		14,930			14,535
Sierra Enterprises, LLC	Food & Beverage		6.02% (L + 3.50%)	11/11/2024	2,481		2,478			2,463
SSH Group Holdings, Inc.	Education		6.77% (L + 4.25%)	7/30/2025	14,963		14,927			14,588
University Support Services LLC (St. George's University Scholastic Services LLC)	Education		6.03% (L + 3.50%)	7/17/2025	3,790		3,772			3,759
VT Topco, Inc.	Business Services		6.55% (L + 3.75%)	8/1/2025	7,980		7,961			7,882
VT Topco, Inc.	Business Services		6.55% (L + 3.75%)	8/1/2025	1,004		1,004			992
Wirepath LLC	Distribution & Logistics		6.71% (L + 4.00%)	8/5/2024	17,477		17,477			17,215
WP CityMD Bidco LLC	Healthcare Services		6.30% (L + 3.50%)	6/7/2024	14,887		14,887			14,608
YI, LLC	Healthcare Services		6.80% (L + 4.00%)	11/7/2024	4,965		4,983			4,935
Total Funded Investments					$	374,478	$	373,443		$	365,497
Unfunded Investments - First lien
Dentalcorp Perfect Smile ULC	Healthcare Services		—	6/6/2020	$	1,308	$	(3	)	$	(26	)
Drilling Info Holdings, Inc.	Business Services		—	7/30/2020	1,367		(7		)	(11		)
Heartland Dental, LLC	Healthcare Services		—	4/30/2020	1,586		—			(67		)
Ministry Brands, LLC	Software		—	10/18/2019	1,267		(6		)	—
Premise Health Holding Corp.	Healthcare Services		—	7/10/2020	1,103		(3		)	(14		)
University Support Services LLC (St. George's University Scholastic Services LLC)	Education		—	7/17/2019	1,187		—			(10		)
VT Topco, Inc.	Business Services		—	8/1/2020	993		(2		)	(12		)
Total Unfunded Investments					$	8,811	$	(21	)	$	(140	)
Total Investments					$	383,289	$	373,422		$	365,357


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L). For each investment, the current interest rate provided reflects the rate in effect as of December 31, 2018.


(2)	Represents the fair value in accordance with ASC 820. Our board of directors does not determine the fair value of the investments held by SLP III.

Below is certain summarized financial information for SLP III as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and June 30, 2018:



Selected Balance Sheet Information:	June 30, 2019			December 31, 2018
Investments at fair value (cost of $446,123 and $373,422)	$	441,713		$	365,357
Cash and other assets	8,912			9,138
Total assets	$	450,625		$	374,495

Credit facility	$	288,300		$	280,300
Deferred financing costs	(2,737		)	(2,831		)
Payable for unsettled securities purchased	63,615			—
Distribution payable	2,750			2,600
Other liabilities	3,463			4,456
Total liabilities	355,391			284,525

Members' capital	$	95,234		$	89,970
Total liabilities and members' capital	$	450,625		$	374,495



Selected Statement of Operations	Three Months Ended					Six Months Ended
Information:	June 30, 2019			June 30, 2018(1)		June 30, 2019			June 30, 2018(1)
Interest income	$	6,267		$	790	$	12,560		$	790
Other income	78			22		148			22
Total investment income	6,345			812		12,708			812

Interest and other financing expenses	3,350			574		6,741			574
Other expenses	165			226		303			226
Total expenses	3,515			800		7,044			800
Less: expenses waived and reimbursed	(22		)	—		(22		)	—
Net expenses	3,493			800		7,022			800
Net investment income	2,852			12		5,686			12

Net realized gains on investments	37			—		70			—
Net change in unrealized appreciation of investments	688			618		3,655			618
Net increase in members' capital	$	3,577		$	630	$	9,411		$	630


(1)	SLP III commenced operations on April 25, 2018.

For the three and six months ended June 30, 2019, the Company earned approximately $2,200 and $4,920 of dividend income related to SLP III, which is included in dividend income. For the three and six months ended June 30, 2018, the Company did not earn any dividend income related to SLP III. As of June 30, 2019 and December 31, 2018 approximately $2,200 and $2,080, respectively, of dividend income related to SLP III was included in interest and dividend receivable.

The Company has determined that SLP III is an investment company under ASC 946; however, in accordance with such guidance the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary. Furthermore, ASC 810 concludes that in a joint venture where both members have equal decision making authority, it is not appropriate for one member to consolidate the joint venture since neither has control. Accordingly, the Company does not consolidate SLP III.

Unconsolidated Significant Subsidiaries

In accordance with Regulation S-X Rule 10-01(b)(1), the Company evaluates its unconsolidated controlled portfolio companies as significant subsidiaries under this rule. As of ~~September~~June 30, ~~2017,~~2019, the Company did not have any significant unconsolidated subsidiaries under Regulation S-X Rule 10-01(b)(1).

Investment Risk Factors

First and second lien debt that the Company invests in is ~~entirely, or~~ almost entirely rated below investment grade or may be unrated. Debt investments rated below investment grade are often referred to as “leveraged loans”, “high yield” or “junk” debt investments, and may be considered “high risk” compared to debt investments that are rated investment grade. These debt investments are considered speculative because of the credit risk of the issuers. Such issuers are considered more likely than investment grade issuers to default on their payments of interest and principal, and such risk of default could reduce the net asset value and income distributions of the Company. In addition, some of the Company’s debt investments will not fully amortize during their lifetime, which could result in a loss or a substantial amount of unpaid principal and interest due upon maturity. First and second lien debt may also lose significant market value before a default occurs. Furthermore, an active trading market may not exist for these first and second lien debt investments. This illiquidity may make it more difficult to value the debt.

Subordinated debt is generally subject to similar risks as those associated with first and second lien debt, except that such debt is subordinated in payment and/or lower in lien priority. Subordinated debt is subject to the additional risk that the cash flow of the borrower and the property securing the debt, if any, may be insufficient to meet scheduled payments after giving effect to the senior secured and unsecured obligations of the borrower.

The Company may directly invest in the equity of private companies or, in some cases, equity investments could be made in connection with a debt investment. Equity investments may or may not fluctuate in value, resulting in recognized realized gains or losses upon disposition.

Note 4. Fair Value

Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that prioritizes and ranks the inputs to valuation techniques used in measuring investments at fair value. The hierarchy classifies the inputs used in measuring fair value into three levels as follows:

Level I—Quoted prices (unadjusted) are available in active markets for identical investments and the Company has the ability to access such quotes as of the reporting date. The type of investments which would generally be included in Level I include active exchange-traded equity securities and exchange-traded derivatives. As required by ASC 820, the Company, to the extent that it holds such investments, does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

Level II—Pricing inputs are observable for the investments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level I. Level II inputs include the following:

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);

Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including foreign exchange forward contracts); and

Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

Level III—Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment.

The inputs used to measure fair value may fall into different levels. In all instances when the inputs fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level of input that is significant to the fair value measurement in its entirety. As such, a Level III fair value measurement may include inputs that are both observable and unobservable. Gains and losses for such assets categorized within the Level III table below may include changes in fair value that are attributable to both observable inputs and unobservable inputs.

quarterly basis. Changes in the observability of valuation inputs may result in the transfer of certain investments within the fair value hierarchy from period to period. ~~Reclassifications impacting the fair value hierarchy are reported as transfers in/out of the respective leveling categories as of the beginning of the period in which the reclassifications occur.~~

The following table summarizes the levels in the fair value hierarchy that the Company’s portfolio investments fall into as of ~~September~~June 30, ~~2017:~~2019:


	Total		Level I		Level II		Level III		Total		Level I		Level II		Level III
First lien	$	770,238	$	—	$	235,351	$	534,887	$	1,394,329	$	—	$	196,176	$	1,198,153
Second lien	679,893		—		305,125		374,768		722,940		—		392,544		330,396
Subordinated	69,202		—		43,494		25,708		69,519		—		25,934		43,585
Equity and other	326,710		23		—		326,687		456,308		—		—		456,308
Total investments	$	1,846,043	$	23	$	583,970	$	1,262,050	$	2,643,096	$	—	$	614,654	$	2,028,442

The following table summarizes the levels in the fair value hierarchy that the Company’s portfolio investments fall into as of December 31, ~~2016:~~2018:


	Total		Level I		Level II		Level III		Total		Level I		Level II		Level III
First lien	$	700,580	$	—	$	169,979	$	530,601	$	1,173,459	$	—	$	185,931	$	987,528
Second lien	604,203		—		280,026		324,177		662,556		—		355,741		306,815
Subordinated	66,559		—		41,906		24,653		65,297		—		25,210		40,087
Equity and other	187,475		28		—		187,447		440,641		—		—		440,641
Total investments	$	1,558,817	$	28	$	491,911	$	1,066,878	$	2,341,953	$	—	$	566,882	$	1,775,071

The following table summarizes the changes in fair value of Level III portfolio investments for the three months ended ~~September~~June 30, ~~2017,~~2019, as well as the portion of appreciation (depreciation) included in income attributable to unrealized appreciation (depreciation) related to those assets and liabilities still held by the Company at ~~September~~June 30, ~~2017:~~2019:


	Total			First Lien			Second Lien			Subordinated			Equity and other			Total			First Lien			Second Lien			Subordinated		Equity and other
Fair value, June 30, 2017	$	1,240,023		$	502,263		$	402,565		$	26,677		$	308,518
Fair value, March 31, 2019																$	1,918,785		$	1,107,716		$	316,510		$	40,891	$	453,668
Total gains or losses included in earnings:
Net realized (losses) gains on investments	(14,273		)	(14,433		)	160			—			—
Net change in unrealized appreciation (depreciation)	17,054			15,910			4,825			(1,749		)	(1,932		)
Net realized gains on investments																46			24			22			—		—
Net change in unrealized (depreciation) appreciation																(4,571		)	(518		)	956			1,764		(6,773		)
Purchases, including capitalized PIK and revolver fundings ~~(1)~~	114,959			94,085			—			780			20,094			192,131			138,709			43,079			930		9,413
Proceeds from sales and paydowns of investments ~~(1)~~	(65,229		)	(26,505		)	(38,724		)	—			—			(63,213		)	(21,378		)	(41,835		)	—		—
Transfers into Level III~~(2)~~(1)	49,805			23,942			25,856			—			7			115,049			52,757			62,292			—		—
Transfers out of Level III~~(2)~~(1)	(80,289		)	(60,375		)	(19,914		)	—			—			(129,785		)	(79,157		)	(50,628		)	—		—
Fair Value, September 30, 2017	$	1,262,050		$	534,887		$	374,768		$	25,708		$	326,687
Unrealized appreciation (depreciation) for the period relating to those Level III assets that were still held by the Company at the end of the period:	$	2,394		$	1,370		$	4,705		$	(1,749	)	$	(1,932	)
Fair Value, June 30, 2019																$	2,028,442		$	1,198,153		$	330,396		$	43,585	$	456,308
Unrealized (depreciation) appreciation for the period relating to those Level III assets that were still held by the Company at the end of the period:																$	(4,571	)	$	(518	)	$	956		$	1,764	$	(6,773	)


(1)	~~Includes reorganizations and restructurings.~~


~~(2)~~	As of ~~September~~June 30, ~~2017,~~2019, portfolio investments were transferred into Level III from Level II and out of Level III into Level II at fair value as of the beginning of the period in which the reclassification occurred.

The following table summarizes the changes in fair value of Level III portfolio investments for the three months ended ~~September~~June 30, ~~2016,~~2018, as well as the portion of appreciation (depreciation) included in income attributable to unrealized appreciation (depreciation) related to those assets and liabilities still held by the Company at ~~September~~June 30, ~~2016:~~2018:

Total First Lien Second Lien Subordinated Equity and other
Fair value, June 30, 2016 $ 820,742
$ 331,531
$ 288,137
$ 41,734
$ 159,340
Total gains or losses included in earnings:

Net realized gains (losses) on investments 888
(1,122 ) 42
—
1,968
Net change in unrealized (depreciation)
appreciation

(7,697 ) (246 ) (5,245 ) 171
(2,377 )
Purchases, including capitalized PIK and revolver fundings 124,859
73,280
13,556
643
37,380
Proceeds from sales and paydowns of investments (45,409 ) (33,861 ) (9,002 ) —
(2,546 )
Transfers into Level III(1) 87,768
87,768
—
—
—
Fair Value, September 30, 2016 $ 981,151
$ 457,350
$ 287,488
$ 42,548
$ 193,765
Unrealized (depreciation) appreciation for the period relating to those Level III assets that were still held by the Company at the end of the period: $ (7,020 ) $ (1,562 ) $ (5,203 ) $ 171
$ (426 )



	Total			First Lien			Second Lien			Subordinated			Equity and other
Fair value, March 31, 2018	$	1,513,165		$	649,391		$	438,136		$	28,192		$	397,446
Total gains or losses included in earnings:
Net realized (losses) gains on investments	(1,114		)	15			(1,129		)	—			—
Net change in unrealized appreciation (depreciation)	7,675			(1,101		)	(12,572		)	(2,426		)	23,774
Purchases, including capitalized PIK and revolver fundings	228,891			108,444			36,965			16,860			66,622
Proceeds from sales and paydowns of investments	(89,363		)	(27,230		)	(60,633		)	(1,500		)	—
Transfers into Level III (1)	9,512			9,512			—			—			—
Transfers out of Level III (1)	(46,855		)	(27,953		)	(18,902		)	—			—
Fair Value, June 30, 2018	$	1,621,911		$	711,078		$	381,865		$	41,126		$	487,842
Unrealized appreciation (depreciation) for the period relating to those Level III assets that were still held by the Company at the end of the period:	$	7,695		$	(913	)	$	(12,740	)	$	(2,426	)	$	23,774


(1)	As of ~~September~~June 30, ~~2016,~~2018, portfolio investments were transferred into Level III from Level II and out of Level III into Level II at fair value as of the beginning of the period in which the reclassification occurred.

The following table summarizes the changes in fair value of Level III portfolio investments for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, as well as the portion of appreciation (depreciation) included in income attributable to unrealized appreciation (depreciation) related to those assets and liabilities still held by the Company at ~~September~~June 30, ~~2017:~~2019:


	Total			First Lien			Second Lien			Subordinated			Equity and other			Total			First Lien			Second Lien			Subordinated		Equity and other
Fair value, December 31, 2016	$	1,066,878		$	530,601		$	324,177		$	24,653		$	187,447
Fair value, December 31, 2018																$	1,775,071		$	987,528		$	306,815		$	40,087	$	440,641
Total gains or losses included in earnings:
Net realized (losses) gains on investments	(40,577		)	(13,877		)	(27,108		)	—			408
Net change in unrealized appreciation (depreciation)	42,375			12,352			36,523			(1,201		)	(5,299		)
Net realized gains on investments																84			55			29			—		—
Net change in unrealized appreciation																4,599			1,706			1,264			1,284		345
Purchases, including capitalized PIK and revolver fundings~~(1)~~	484,630			217,592			118,614			2,756			145,668			332,072			224,402			90,134			2,214		15,322
Proceeds from sales and paydowns of investments~~(1)~~	(243,879		)	(147,376		)	(94,466		)	(500		)	(1,537		)	(73,850		)	(29,158		)	(44,692		)	—		—
Transfers into Level III~~(2)~~(1)	68,484			19,608			48,876			—			—			130,098			83,383			46,715			—		—
Transfers out of Level III~~(2)~~(1)	(115,861		)	(84,013		)	(31,848		)	—			—			(139,632		)	(69,763		)	(69,869		)	—		—
Fair Value, September 30, 2017	$	1,262,050		$	534,887		$	374,768		$	25,708		$	326,687
Fair Value, June 30, 2019																$	2,028,442		$	1,198,153		$	330,396		$	43,585	$	456,308
Unrealized appreciation (depreciation) for the period relating to those Level III assets that were still held by the Company at the end of the period:	$	5,019		$	2,847		$	8,939		$	(1,201	)	$	(5,566	)	$	4,430		$	1,706		$	1,095		$	1,284	$	345


(1)	~~Includes reorganizations and restructurings.~~


~~(2)~~	As of ~~September~~June 30, ~~2017,~~2019, portfolio investments were transferred into Level III from Level II and out of Level III into Level II at fair value as of the beginning of the period in which the reclassification occurred.

The following table summarizes the changes in fair value of Level III portfolio investments for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, as well as the portion of appreciation (depreciation) included in income attributable to unrealized appreciation (depreciation) related to those assets and liabilities still held by the Company at ~~September~~June 30, ~~2016:~~2018:


	Total			First Lien			Second Lien			Subordinated			Equity and other			Total			First Lien			Second Lien			Subordinated			Equity and other
Fair value, December 31, 2015	$	699,987		$	340,890		$	182,758		$	53,459		$	122,880
Fair value, December 31, 2017																$	1,405,754		$	556,697		$	443,082		$	27,101		$	378,874
Total gains or losses included in earnings:
Net realized gains (losses) on investments	2,396			(582		)	891			119			1,968
Net realized (losses) gains on investments																(1,017		)	112			(1,129		)	—			—
Net change in unrealized appreciation (depreciation)	1,808			6,433			(10,813		)	2,104			4,084			6,121			(1,383		)	(13,581		)	(2,533		)	23,618
Purchases, including capitalized PIK and revolver fundings	266,509			112,351			84,913			1,866			67,379			427,210			242,731			81,071			18,058			85,350
Proceeds from sales and paydowns of investments	(145,166		)	(84,451		)	(43,169		)	(15,000		)	(2,546		)	(178,696		)	(116,563		)	(60,633		)	(1,500		)	—
Transfers into Level III(1)	179,931			107,023			72,908			—			—			85,549			85,549			—			—			—
Transfers out of Level III(1)	(24,314		)	(24,314		)	—			—			—			(123,010		)	(56,065		)	(66,945		)	—			—
Fair Value, September 30, 2016	$	981,151		$	457,350		$	287,488		$	42,548		$	193,765
Unrealized (depreciation) appreciation for the period relating to those Level III assets that were still held by the Company at the end of the period:	$	(1,923	)	$	3,621		$	(12,887	)	$	2,224		$	5,119
Fair Value, June 30, 2018																$	1,621,911		$	711,078		$	381,865		$	41,126		$	487,842
Unrealized appreciation (depreciation) for the period relating to those Level III assets that were still held by the Company at the end of the period:																$	6,652		$	(684	)	$	(13,749	)	$	(2,533	)	$	23,618


(1)	As of ~~September~~June 30, ~~2016,~~2018, portfolio investments were transferred into Level III from Level II and out of Level III into Level II at fair value as of the beginning of the period in which the reclassification occurred.

Except as noted in the tables above, there were no other transfers in or out of Level I, II, or III during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018. Transfers into Level III occur as quotations obtained through pricing services are deemed not ~~deemed~~ representative of fair value as of the balance sheet date and such assets are internally valued. As quotations obtained through pricing services are substantiated through additional market sources, investments are transferred out of Level III. In addition, transfers out of Level III and transfers into Level III occur based on the increase or decrease in the availability of certain observable inputs.

The Company invests in revolving credit facilities. These investments are categorized as Level III investments as these assets are not actively traded and their fair values are often implied by the term loans of the respective portfolio companies.

The Company generally uses the following framework when determining the fair value of investments where there are little, if any, market activity or observable pricing inputs. The Company typically determines the fair value of its performing debt investments utilizing an income approach. Additional consideration is given using a market based approach, as well as reviewing the overall underlying portfolio company’s performance and associated financial risks. The following outlines additional details on the approaches considered:

Company Performance, Financial Review, and Analysis: Prior to investment, as part of its due diligence process, the Company evaluates the overall performance and financial stability of the portfolio company. Post investment, the Company analyzes each portfolio company’s current operating performance and relevant financial trends versus prior year and budgeted results, including, but not limited to, factors affecting its revenue and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) growth, margin trends, liquidity position, covenant compliance and changes to its capital structure. The Company also attempts to identify and subsequently track any developments at the portfolio company, within its customer or vendor base or within the industry or the macroeconomic environment, generally, that may alter any material element of its original investment thesis. This analysis is specific to each portfolio company. The Company leverages the knowledge gained from its original due diligence process, augmented by this subsequent monitoring, to continually refine its outlook for each of its portfolio companies and ultimately form the valuation of its investment in each portfolio company. When an external event such as a purchase transaction, public offering or subsequent sale occurs, the Company will consider the pricing indicated by the external event to corroborate the private valuation.

For debt investments, the Company may employ the Market Based Approach (as described below) to assess the total enterprise value of the portfolio company, in order to evaluate the enterprise value coverage of the Company’s debt investment. For equity investments or in cases where the Market Based Approach implies a lack of enterprise value coverage for the debt investment, the Company may additionally employ a discounted cash flow analysis based on the free cash flows of the portfolio company to assess the total enterprise value.

After enterprise value coverage is demonstrated for the Company’s debt investments through the method(s) above, the Income Based Approach (as described below) may be employed to estimate the fair value of the investment.

Market Based Approach: The Company may estimate the total enterprise value of each portfolio company by utilizing market value cash flow (EBITDA) multiples of publicly traded comparable companies and comparable transactions. The Company considers numerous factors when selecting the appropriate companies whose trading multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, and relevant risk factors, as well as size, profitability and growth expectations. The Company may apply an average of various relevant comparable company EBITDA multiples to the portfolio company’s latest twelve month (“LTM”) EBITDA or projected EBITDA to calculate the enterprise value of the portfolio company. Significant increases or decreases in the EBITDA multiple will result in an increase or decrease in enterprise value, which may result in an increase or decrease in the fair value estimate of the investment. In applying the market based approach as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company used the relevant EBITDA multiple ranges set forth in the table below to determine the enterprise value of its portfolio companies. The Company believes these were reasonable ranges in light of current comparable company trading levels and the specific portfolio companies involved.

Income Based Approach: The Company also may use a discounted cash flow analysis to estimate the fair value of the investment. Projected cash flows represent the relevant security’s contractual interest, fee and principal payments plus the assumption of full principal recovery at the investment’s expected maturity date. These cash flows are discounted at a rate established utilizing a yield calibration approach, which incorporates changes in the credit quality (as measured by relevant statistics) of the portfolio company, as compared to changes in the yield associated with comparable credit quality market indices, between the date of origination and the valuation date. Significant increases or decreases in the discount rate would result in a decrease or increase in the fair value measurement. In applying the income based approach as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company used the discount ranges set forth in the table below to value investments in its portfolio companies.

The unobservable inputs used in the fair value measurement of the Company's Level III investments as of ~~September~~June 30, ~~2017~~2019 were as follows:


					Range										Range
Type	Fair Value as of September 30, 2017		Approach	Unobservable Input	Low		High		Weighted Average		Fair Value as of June 30, 2019		Approach	Unobservable Input	Low		High		Weighted Average
First lien	$	467,260	Market & income approach	EBITDA multiple	2.0x		17.0x		10.8x		$	948,912	Market & income approach	EBITDA multiple	2.0x		32.0x		12.9x
				Revenue multiple	0.8x		8.0x		3.9x					Revenue multiple	3.5x		11.0x		6.6x
				Discount rate	6.0	%	11.9	%	8.7	%				Discount rate	6.1	%	15.3	%	8.6	%
	24,264		Market quote	Broker quote	N/A		N/A		N/A		160,107		Market quote	Broker quote	N/A		N/A		N/A
	43,363		Other	N/A(1)	N/A		N/A		N/A		89,134		Other	N/A(1)	N/A		N/A		N/A
Second lien	249,219		Market & income approach	EBITDA multiple	8.5x		17.0x		11.6x		83,980		Market & income approach	EBITDA multiple	8.5x		13.5x		10.7x
				Revenue multiple	5.3x		6.2x		5.8x					Discount rate	9.9	%	20.0	%	12.6	%
				Discount rate	9.4	%	12.5	%	10.4	%	214,656		Market quote	Broker quote	N/A		N/A		N/A
	125,549		Market quote	Broker quote	N/A		N/A		N/A		31,760		Other	N/A(1)	N/A		N/A		N/A
Subordinated	25,708		Market & income approach	EBITDA multiple	4.0x		10.5x		8.7x		43,585		Market & income approach	EBITDA multiple	5.0x		12.0x		9.8x
				Revenue multiple	0.5x		1.0x		0.8x					Discount rate	11.0	%	22.0	%	16.7	%
				Discount rate	9.1	%	15.0	%	12.1	%
Equity and other	320,072		Market & income approach	EBITDA multiple	2.5x		15.0x		10.4x		455,481		Market & income approach	EBITDA multiple	0.3x		19.5x		11.0x
				Revenue multiple	0.5x		1.0x		0.7x					Discount rate	6.4	%	26.1	%	13.3	%
				Discount rate	7.3	%	23.9	%	12.8	%	827		Black Scholes analysis	Expected life in years	6.8		6.8		6.8
	895		Black Scholes analysis	Expected life in years	8.5		8.5		8.5					Volatility	29.2	%	29.2	%	29.2	%
				Volatility	39.4	%	39.4	%	39.4	%				Discount rate	2.1	%	2.1	%	2.1	%
				Discount rate	2.1	%	2.1	%	2.1	%	$	2,028,442
	5,720		Other	N/A(1)	N/A		N/A		N/A
	$	1,262,050


(1)	Fair value was determined based on transaction pricing or recent acquisition or sale as the best measure of fair value with no material changes in operations of the related portfolio company since the transaction date.

The unobservable inputs used in the fair value measurement of the Company's Level III investments as of December 31, ~~2016~~2018 were as follows:


					Range										Range
Type	Fair Value as of December 31, 2016		Approach	Unobservable Input	Low		High		Weighted Average		Fair Value as of December 31, 2018		Approach	Unobservable Input	Low		High		Weighted Average
First lien	$	417,464	Market & income approach	EBITDA multiple	2.0x		15.0x		10.2x		$	797,985	Market & income approach	EBITDA multiple	2.0x		32.0x		12.1x
				Revenue multiple	0.5x		8.0x		3.0x					Revenue multiple	3.5x		6.5x		5.8x
				Discount rate	7.2	%	12.3	%	9.7	%				Discount rate	7.0	%	15.3	%	9.6	%
	86,801		Market quote	Broker quote	N/A		N/A		N/A		129,837		Market quote	Broker quote	N/A		N/A		N/A
	26,336		Other	N/A(1)	N/A		N/A		N/A		59,706		Other	N/A(1)	N/A		N/A		N/A
Second lien	191,419		Market & income approach	EBITDA multiple	5.3x		16.0x		11.7x		102,963		Market & income approach	EBITDA multiple	8.5x		15.0x		11.1x
				Discount rate	8.7	%	13.0	%	11.3	%				Discount rate	10.0	%	19.7	%	12.8	%
	96,315		Market quote	Broker quote	N/A		N/A		N/A		203,852		Market quote	Broker quote	N/A		N/A		N/A
	36,443		Other	N/A(1)	N/A		N/A		N/A
Subordinated	24,653		Market & income approach	EBITDA multiple	4.5x		8.5x		7.1x		40,087		Market & income approach	EBITDA multiple	5.0x		13.0x		10.2x
				Revenue multiple	0.5x		1.0x		0.8x
				Discount rate	8.7	%	15.8	%	13.6	%				Discount rate	10.9	%	21.4	%	16.3	%
Equity and other	158,947		Market & income approach	EBITDA multiple	2.5x		13.0x		5.9x		439,977		Market & income approach	EBITDA multiple	0.4x		18.0x		10.3x
				Revenue multiple	0.5x		1.0x		0.8x					Discount rate	6.5	%	25.8	%	13.5	%
				Discount rate	8.0	%	18.9	%	14.5	%	664		Black Scholes analysis	Expected life in years	7.3		7.3		7.3
	1,498		Black Scholes analysis	Expected life in years	8.8		9.3		9.1					Volatility	37.9	%	37.9	%	37.9	%
				Volatility	32.2	%	43.8	%	36.4	%				Discount rate	2.9	%	2.9	%	2.9	%
				Discount rate	2.5	%	2.5	%	2.5	%	$	1,775,071
	2		Market quote	Broker quote	N/A		N/A		N/A
	27,000		Other	N/A(1)	N/A		N/A		N/A
	$	1,066,878


(1)	Fair value was determined based on transaction pricing or recent acquisition or sale as the best measure of fair value with no material changes in operations of the related portfolio company since the transaction date.

Based on a comparison to similar BDC credit facilities, the terms and conditions of the Holdings Credit Facility, the NMFC Credit Facility and the ~~NMFC~~DB Credit Facility (as defined in Note 7. Borrowings) are representative of market. The carrying values of the Holdings Credit Facility, NMFC Credit Facility and ~~NMFC~~DB Credit Facility approximate fair value as of ~~September~~June 30, ~~2017,~~2019, as the facilities are continually monitored and examined by both the borrower and the ~~lender.~~lender and are considered Level III. The carrying value of the SBA-guaranteed debentures, the 2016 Unsecured Notes, the 2017A Unsecured Notes, the 2018A Unsecured Notes, the 2018B Unsecured Notes and the 2019A Unsecured Notes (as defined in Note 7. Borrowings) approximate fair value as of ~~September~~June 30, ~~2017~~2019 based on a comparison of market interest rates for the Company’s borrowings and similar ~~entities. The fair value of the Holdings Credit Facility, NMFC Credit Facility, SBA-guaranteed debentures~~entities and ~~Unsecured Notes~~ are considered Level III. The fair value of the 2018 Convertible Notes and the 5.75% Unsecured Notes (as defined in Note 7. Borrowings) as of ~~September~~June 30, ~~2017~~2019 was ~~$160,684,~~$208,018 and $52,877, respectively, which was based on quoted prices and considered Level II. See Note 7. Borrowings, for details. The carrying value of the collateralized agreement approximates fair value as of ~~September~~June 30, ~~2017~~2019 and is considered Level III. The fair value of other financial assets and liabilities approximates their carrying value based on the short-term nature of these items.

Fair value risk factors—The Company seeks investment opportunities that offer the possibility of attaining substantial capital appreciation. Certain events particular to each industry in which the Company’s portfolio companies conduct their operations, as well as general economic and political conditions, may have a significant negative impact on the operations and profitability of the Company’s investments and/or on the fair value of the Company’s investments. The Company’s investments are subject to the risk of non-payment of scheduled interest or principal, resulting in a reduction in income to the Company and their corresponding fair valuations. Also, there may be risk associated with the concentration of investments in one geographic region or in certain industries. These events are beyond the control of the Company and cannot be predicted. Furthermore, the ability to liquidate investments and realize value is subject to uncertainties.

Note 5. Agreements

The Company entered into an investment advisory and management agreement (the “Investment Management Agreement”) with the Investment Adviser which was most recently re-approved by the Company's board of directors on February ~~8, 2017.~~6, 2019. Under the Investment Management Agreement, the Investment Adviser manages the day-to-day operations of, and provides investment advisory services to, the Company. For providing these services, the Investment Adviser receives a fee from the Company, consisting of two components—a base management fee and an incentive fee.

Pursuant to the Investment Management Agreement, the base management fee is calculated at an annual rate of 1.75% of the Company’s gross assets, which equals the Company’s total assets on the Consolidated Statements of Assets and Liabilities, less (i) the borrowings under the ~~SLF~~New Mountain Finance SPV Funding, L.L.C. Loan and Security Agreement, as amended and restated, dated October 27, 2010 (the "SLF Credit ~~Facility (as defined below)~~Facility") and (ii) cash and cash equivalents. The base management fee is payable quarterly in arrears, and is calculated based on the average value of the Company’s gross assets, which equals the Company’s total assets, as determined in accordance with GAAP, less the borrowings under the SLF Credit Facility and cash and cash equivalents at the end of each of the two most recently completed calendar quarters, and appropriately adjusted on a pro rata basis for any equity capital raises or repurchases during the current calendar quarter. The Company has not invested, and currently is not invested, in derivatives. To the extent the Company invests in derivatives in the future, the Company will use the actual value of the derivatives, as reported on the Consolidated Statements of Assets and Liabilities, for purposes of calculating its base management fee.

Since the IPO, the base management fee calculation has deducted the borrowings under the ~~New Mountain Finance SPV Funding, L.L.C. Loan and Security Agreement, as amended and restated, dated October 27, 2010 (the "SLF~~SLF Credit ~~Facility").~~Facility. The SLF Credit Facility had historically consisted of primarily lower yielding assets at higher advance rates. As part of an amendment to the Company’s existing credit facilities with Wells Fargo Bank, National Association, the SLF Credit Facility merged with the NMF Holdings Loan and Security Agreement, as amended and restated, dated May 19, 2011, and ~~into~~formed the Holdings Credit Facility on December 18, 2014 (as defined in Note 7. Borrowings). The amendment merged the credit facilities and combined the amount of borrowings previously available. Post credit facility merger and to be consistent with the methodology since the IPO, the Investment Adviser will continue to waive management fees on the leverage associated with those assets held under revolving credit facilities that share the same underlying yield characteristics with investments leveraged under the legacy SLF Credit Facility, which as of ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016 approximated $321,390~~2018 was approximately $658,499 and ~~$234,048,~~$360,288, respectively. The Investment Adviser cannot recoup management fees that the Investment Adviser has previously waived. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, management fees waived were approximately ~~$1,483~~$2,823 and ~~$4,324,~~$5,356, respectively. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, management fees waived were approximately ~~$1,102~~$1,495 and ~~$3,662,~~$2,817, respectively.

The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears and equals 20.0% of the Company’s “Pre-Incentive Fee ~~Adjusted~~ Net Investment Income” for the immediately preceding quarter, subject to a “preferred return”, or “hurdle”, and a “catch-up” feature. “Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, upfront, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under an administration agreement, as amended and restated (the “Administration Agreement”), with the Administrator, and any interest expense and distributions paid on any issued and outstanding preferred stock (of which there are none as of ~~September~~June 30, ~~2017)~~2019), but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Under GAAP, NMFC’s IPO did not step-up the cost basis of the Predecessor Operating Company’s existing investments to fair market value at the IPO date. Since the total value of the Predecessor Operating Company’s investments at the time of the IPO was greater than the investments’ cost basis, a larger amount of amortization of purchase or original issue discount, as well as different amounts in realized gain and unrealized appreciation, may be recognized under GAAP in each period than if the step-up had occurred. This will remain until such predecessor investments are sold, repaid or mature in the future. The Company tracks the transferred (or fair market) value of each of its investments as of the time of the IPO and, for purposes of the incentive fee calculation, adjusts Pre-Incentive Fee Net Investment Income to reflect the amortization of purchase or original issue discount on the Company’s investments as if each investment was purchased at the date of the IPO, or stepped up to fair market value. This is defined as “Pre-Incentive Fee Adjusted Net Investment Income”. The Company also uses the transferred (or fair market) value of each of its investments as of the time of the IPO to adjust capital gains (“Adjusted Realized Capital Gains”) or losses (“Adjusted Realized Capital Losses”) and unrealized capital appreciation (“Adjusted Unrealized Capital Appreciation”) and unrealized capital depreciation (“Adjusted Unrealized Capital Depreciation”).

~~Pre-Incentive Fee Adjusted~~ Net Investment Income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, will be compared to a “hurdle rate” of 2.0% per quarter (8.0% annualized), subject to a “catch-up” provision measured as of the end of each calendar quarter. The hurdle rate is appropriately pro-rated for any partial periods. The calculation of the Company’s incentive fee with respect to the Pre-Incentive Fee ~~Adjusted~~ Net Investment Income for each quarter is as follows:

No incentive fee is payable to the Investment Adviser in any calendar quarter in which the Company’s Pre-Incentive Fee ~~Adjusted~~ Net Investment Income does not exceed the hurdle rate of 2.0% (the “preferred return” or “hurdle”).

100.0% of the Company’s Pre-Incentive Fee ~~Adjusted~~ Net Investment Income with respect to that portion of such Pre-Incentive Fee ~~Adjusted~~ Net Investment Income, if any, that exceeds the hurdle rate but is less than or equal to 2.5% in any calendar quarter (10.0% annualized) is payable to the Investment Adviser. This portion of the Company’s Pre-Incentive Fee ~~Adjusted~~ Net Investment Income (which exceeds the hurdle rate but is less than or equal to 2.5%) is referred to as the “catch-up”. The catch-up provision is intended to provide the Investment Adviser with an incentive fee of 20.0% on all of the Company’s Pre-Incentive Fee ~~Adjusted~~ Net Investment Income as if a hurdle rate did not apply when the Company’s Pre-Incentive Fee ~~Adjusted~~ Net Investment Income exceeds 2.5% in any calendar quarter.

20.0% of the amount of the Company’s Pre-Incentive Fee ~~Adjusted~~ Net Investment Income, if any, that exceeds 2.5% in any calendar quarter (10.0% annualized) is payable to the Investment Adviser once the hurdle is reached and the catch-up is achieved.

For the three and nine months ended September 30, 2017, incentive fees waived were approximately $0 and $1,800, respectively. For the three and nine months ended September 30, 2016, no incentive fees were waived by the Investment Adviser. The Investment Adviser cannot recoup incentive fees that the Investment Adviser has previously waived.

The second part of the incentive fee iswill be determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement) and will equal 20.0% of the Company’s ~~Adjusted Realized Capital Gains,~~realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all ~~Adjusted Realized Capital Losses~~realized capital losses and ~~Adjusted Unrealized Capital Depreciation~~unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fee.

In accordance with GAAP, the Company accrues a hypothetical capital gains incentive fee based upon the cumulative net ~~Adjusted Realized Capital Gains~~realized capital gains and ~~Adjusted Realized Capital Losses~~realized capital losses and the cumulative net ~~Adjusted Unrealized Capital Appreciation~~unrealized capital appreciation and ~~Adjusted Unrealized Capital Depreciation~~unrealized capital depreciation on investments held at the end of each period. Actual amounts paid to the Investment Adviser are consistent with the Investment Management Agreement and are based only on actual ~~Adjusted Realized Capital Gains~~realized capital gains computed net of all ~~Adjusted Realized Capital Losses~~realized capital losses and ~~Adjusted Unrealized Capital Depreciation~~unrealized capital depreciation on a cumulative basis from inception through the end of each calendar year as if the entire portfolio was sold at fair value.

The following table summarizes the management fees and incentive fees incurred by the Company for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Management fee	$	8,422		$	6,883		$	24,311		$	20,537		$	11,640		$	9,301		$	22,615		$	17,993
Less: management fee waiver	(1,483		)	(1,102		)	(4,324		)	(3,662		)	(2,823		)	(1,495		)	(5,356		)	(2,817		)
Total management fee	6,939			5,781			19,987			16,875			8,817			7,806			17,259			15,176
Incentive fee, excluding accrued capital gains incentive fees	$	6,573		$	5,432		$	18,430		$	16,266		$	6,987		$	6,430		$	13,850		$	12,864
Less: incentive fee waiver	—			—			(1,800		)	—
Total incentive fee	6,573			5,432			16,630			16,266
Accrued capital gains incentive fees(1)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—


(1)	As of ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016,~~2018, no actual capital gains incentive fee was owed under the Investment Management Agreement by the Company, as cumulative net ~~Adjusted Realized Capital Gains~~realized capital gains did not exceed cumulative ~~Adjusted Unrealized Capital Depreciation.~~

~~The Company’s Consolidated Statements of Operations below are adjusted as if the step-up in cost basis to fair market value had occurred at the IPO date, May 19, 2011.~~

~~The following Consolidated Statement of Operations for the three and nine months ended September 30, 2017 is adjusted to reflect this step-up to fair market value.~~

Three Months
Ended
September 30, 2017 Stepped-up
Cost Basis
Adjustments Adjusted Three Months Ended September 30, 2017
Investment income

Interest income(1) $ 39,638
$ —
$ 39,638
Total dividend income(2) 9,870
—
9,870
Other income 1,728
—
1,728
Total investment income(3) 51,236
—
51,236
Total expenses pre-incentive fee(4) 18,371
—
18,371
Pre-Incentive Fee Net Investment Income 32,865
—
32,865
Incentive fee(5) 6,573
—
6,573
Post-Incentive Fee Net Investment Income 26,292
—
26,292
Net realized losses on investments(6) (14,216 ) —
(14,216 )
Net change in unrealized appreciation (depreciation) of investments(6) 14,643
—
14,643
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell (1,549 ) —
(1,549 )
Provision for taxes (394 ) —
(394 )
Net increase in net assets resulting from operations $ 24,776
$ 24,776


~~(1)~~	~~Includes $1,552 in PIK and non-cash interest from investments.~~


~~(2)~~	~~Includes $5,395 in PIK and non-cash dividends from investments.~~


~~(3)~~	~~Includes income from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.~~


~~(4)~~	~~Includes management fee waivers of $1,483. There were no expense waivers and reimbursements for the three months ended September 30, 2017.~~


~~(5)~~	~~For the three months ended September 30, 2017, the Company incurred total incentive fees of $6,573, of which none was related to the~~unrealized capital ~~gains incentive fee accrual on a hypothetical liquidation basis.~~


~~(6)~~	Includes net realized gains and losses on investments and net change in unrealized appreciation (depreciation) of investments from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.

Nine Months Ended
September 30, 2017 Stepped-up
Cost Basis
Adjustments Adjusted
Nine Months Ended
September 30, 2017
Investment income

Interest income(1) $ 111,275
$ —
(7) $ 111,275
Total dividend income(2) 26,273
—
26,273
Other income 7,014
—
7,014
Total investment income(3) 144,562
—
144,562
Total expenses pre-incentive fee(4) 52,411
—
52,411
Pre-Incentive Fee Net Investment Income 92,151
—
92,151
Incentive fee(5) 16,630
—
16,630
Post-Incentive Fee Net Investment Income 75,521
—
75,521
Net realized losses on investments(6) (39,843 ) —
(39,843 )
Net change in unrealized appreciation (depreciation) of investments(6) 48,700
—
(7) 48,700
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell (2,382 ) —
(2,382 )
Benefit for taxes 525
—
525
Net increase in net assets resulting from operations $ 82,521
$ 82,521


~~(1)~~	~~Includes $4,747 in PIK and non-cash interest from investments.~~


~~(2)~~	~~Includes $11,713 in PIK and non-cash dividends from investments.~~


~~(3)~~	~~Includes income from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.~~


~~(4)~~	~~Includes expense waivers and reimbursements of $474 and management fee waivers of $4,324.~~


~~(5)~~	For the nine months ended September 30, 2017, the Company incurred total incentive fees of $16,630, net of the incentive fee waiver of $1,800, of which none was related to the capital gains incentive fee accrual on a hypothetical liquidation basis.


~~(6)~~	Includes net realized gains and losses on investments and net change in unrealized appreciation (depreciation) of investments from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.


~~(7)~~	~~For the nine months ended September 30, 2017, the adjustment was less than $1.~~

~~The following Consolidated Statement of Operations for the three and nine months ended September 30, 2016 is adjusted to reflect this step-up to fair market value.~~

Three Months Ended
September 30, 2016 Stepped-up
Cost Basis
Adjustments Adjusted Three Months Ended
September 30, 2016
Investment income

Interest income(1) $ 35,917
$ (1 ) $ 35,916
Total dividend income(2) 3,063
—
3,063
Other income 2,854
—
2,854
Total investment income(3) 41,834
(1 ) 41,833
Total expenses pre-incentive fee(4) 14,673
—
14,673
Pre-Incentive Fee Net Investment Income 27,161
(1 ) 27,160
Incentive fee(5) 5,432
—
5,432
Post-Incentive Fee Net Investment Income 21,729
(1 ) 21,728
Net realized gains (losses) on investments(6) 1,150
(27 ) 1,123
Net change in unrealized appreciation (depreciation) of investments(6) 3,146
28
3,174
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell (957 ) —
(957 )
Benefit for taxes 11
—
11
Net increase in net assets resulting from operations $ 25,079
$ 25,079


~~(1)~~	~~Includes $947 in PIK interest from investments.~~


~~(2)~~	~~Includes $768 in PIK dividends from investments.~~


~~(3)~~	~~Includes income from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.~~


~~(4)~~	~~Includes management fee waivers of $1,102. There were no expense waivers and reimbursements for the three months ended September 30, 2016.~~


~~(5)~~	For the three months ended September 30, 2016, the Company incurred total incentive fees of $5,432, of which none was related to the capital gains incentive fee accrual on a hypothetical liquidation basis.


~~(6)~~	Includes net realized gains and losses on investments and net change in unrealized appreciation (depreciation) of investments from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.

Nine Months Ended
September 30, 2016 Stepped-up
Cost Basis
Adjustments Adjusted
Nine Months Ended
September 30, 2016
Investment income

Interest income(1) $ 112,119
$ (65 ) $ 112,054
Total dividend income(2) 6,423
—
6,423
Other income 5,758
—
5,758
Total investment income(3) 124,300
(65 ) 124,235
Total expenses pre-incentive fee(4) 42,906
—
42,906
Pre-Incentive Fee Net Investment Income 81,394
(65 ) 81,329
Incentive fee(5) 16,266
—
16,266
Post-Incentive Fee Net Investment Income 65,128
(65 ) 65,063
Net realized gains (losses) on investments(6) 2,191
(151 ) 2,040
Net change in unrealized appreciation (depreciation) of investments(6) 10,716
216
10,932
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell (1,031 ) —
(1,031 )
Benefit for taxes 819
—
819
Net increase in net assets resulting from operations $ 77,823
$ 77,823


~~(1)~~	~~Includes $2,850 in PIK interest from investments.~~


~~(2)~~	~~Includes $2,229 in PIK dividends from investments.~~


~~(3)~~	~~Includes income from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.~~


~~(4)~~	~~Includes expense waivers and reimbursements of $347 and management fee waivers of $3,662.~~


~~(5)~~	For the nine months ended September 30, 2016, the Company incurred total incentive fees of $16,266, of which none was related to the capital gains incentive fee accrual on a hypothetical liquidation basis.


~~(6)~~	Includes net realized gains and losses on investments and net change in unrealized appreciation (depreciation) of investments from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.depreciation.

The Company has entered into the Administration Agreement with the Administrator under which the Administrator provides administrative services. The Administrator maintains, or oversees the maintenance of, the Company’s consolidated financial records, prepares reports filed with the United States Securities and Exchange Commission (the "SEC"), generally monitors the payment of the Company’s expenses and ~~watches~~oversees the performance of administrative and professional services rendered by others. The Company will reimburse the Administrator for the Company’s allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations to the Company under the Administration Agreement. Pursuant to the Administration Agreement and further restricted by the Company, the Administrator may, in its own discretion, submit to the Company for reimbursement some or all of the expenses that the Administrator has incurred on behalf of the Company during any quarterly period. As a result, the amount of expenses for which the Company 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 the Company for reimbursement in the future. However, it is expected that the Administrator will continue to support part of the expense burden of the Company 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~~six months ended ~~September~~June 30, ~~2017,~~2019, approximately ~~$361~~$671 and ~~$1,144,~~$1,394, respectively, of indirect administrative expenses were included in administrative expenses of which $0$335 and ~~$416,~~$335, respectively, ~~of indirect administrative expenses~~ were waived by the Administrator. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, approximately ~~$332~~$551 and ~~$1,263,~~$1,210, respectively, of indirect administrative expenses were included in administrative expenses of which $0$276 and ~~$347,~~$276, respectively, ~~of indirect administrative expenses~~ were waived by the Administrator. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately ~~$361~~$362 and ~~$0,~~$681, respectively, of indirect administrative expenses were included in payable to affiliates.

The Company, the Investment Adviser and the Administrator have also entered into a Trademark License Agreement, as amended, with New Mountain Capital, pursuant to which New Mountain Capital has agreed to grant the Company, the Investment Adviser and the Administrator a non-exclusive, royalty-free license to use the “New Mountain” and the “New Mountain Finance” names. Under the Trademark License Agreement, as amended, subject to certain conditions, the Company, the Investment Adviser and the Administrator will have a right to use the “New Mountain” and “New Mountain Finance” names, for so long as the Investment Adviser or one of its affiliates remains the investment adviser of the Company. Other than with respect to this limited license, the Company, the Investment Adviser and the Administrator will have no legal right to the “New Mountain” or the “New Mountain Finance” names.

Note 6. Related Parties

The Company has entered into a number of business relationships with affiliated or related parties.

The Company has entered into the Investment Management Agreement with the Investment Adviser, a wholly-owned subsidiary of New Mountain Capital. Therefore, New Mountain Capital is entitled to any profits earned by the Investment Adviser, which includes any fees payable to the Investment Adviser under the terms of the Investment Management Agreement, less expenses incurred by the Investment Adviser in performing its services under the Investment Management Agreement.

The Company has entered into the Administration Agreement with the Administrator, a wholly-owned subsidiary of New Mountain Capital. The Administrator arranges office space for the Company and provides office equipment and administrative services necessary to conduct their respective day-to-day operations pursuant to the Administration Agreement. The Company reimburses the Administrator for the allocable portion of overhead and other expenses incurred by it in performing its obligations to the Company under the Administration Agreement, which includes the fees and expenses associated with performing administrative, finance and compliance functions, and the compensation of the Company’s chief financial officer and chief compliance officer and their respective staffs.

The Company, the Investment Adviser and the Administrator have entered into a royalty-free Trademark License Agreement, as amended, with New Mountain Capital, pursuant to which New Mountain Capital has agreed to grant the Company, the Investment Adviser and the Administrator a non-exclusive, royalty-free license to use the name “New Mountain” and “New Mountain Finance”.

The Company has adopted a formal code of ethics that governs the conduct of its officers and directors. These officers and directors also remain subject to the duties imposed by the 1940 Act, the Delaware General Corporation Law and the Delaware Limited Liability Company Act.

The Investment Adviser and its affiliates may also manage other funds in the future that may have investment mandates that are similar, in whole or in part, to the Company’s investment mandates. The Investment Adviser and its affiliates may determine that an investment is appropriate for the Company or for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, the Investment Adviser or its affiliates may determine that the Company should invest side-by-side with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff and consistent with the Investment Adviser’s allocation procedures. On ~~June 5,~~December 18, 2017, the SEC issued an exemptive order (the “Exemptive Order”), which superseded a prior order issued on June 5, 2017, which permits the Company to co-invest in portfolio companies with certain funds or entities managed by the Investment Adviser or its affiliates in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act, subject to the conditions of the Exemptive Order. Pursuant to the Exemptive Order, the Company is permitted to co-invest with its affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company's independent directors make certain conclusions in connection with a co-investment transaction, including, but not limited to, that (1) the terms of the potential co-investment transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching in respect of the Company or its stockholders on the part of any person concerned, and (2) the potential co-investment transaction is consistent with the interests of the Company's stockholders and is consistent with its then-current investment objective and strategies.

Note 7. Borrowings

As permitted by the Small Business Credit Availability Act (the “SBCA”) on June 8, 2018 the Company's shareholders approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCA, which resulted in the reduction from 200.0% to 150.0% of the minimum asset coverage ratio applicable to the Company as of June 9, 2018 (which means the Company can borrow $2 for every $1 of its equity). As a result of the Company's exemptive relief received on November 5, 2014, the Company is permitted to exclude its SBA-guaranteed debentures from the 150.0% asset coverage ratio that the Company is required to maintain under the 1940 Act. The agreements governing the NMFC Credit Facility, the 2018 Convertible Notes and the Unsecured Notes (as defined below) contain certain covenants and terms, including 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. As of June 30, 2019, the Company’s asset coverage ratio was 175.1%.

Holdings Credit Facility—On December 18, 2014, the Company entered into the Second Amended and Restated Loan and Security Agreement ~~(the “Holdings Credit Facility”),~~ among the Company, as the Collateral Manager, NMF Holdings, as the Borrower, Wells Fargo Securities, LLC, as the Administrative Agent and Wells Fargo Bank, National Association, as the Lender and Collateral Custodian ~~which~~(as amended from time to time, the "Holdings Credit Facility"). As of the most recent amendment on May 7, 2019, the maturity date of the Holdings Credit Facility is ~~structured~~October 24, 2022, and the maximum facility amount is the lesser of $800,000 and the actual commitments of the lenders to make advances as ~~a revolving credit facility and matures on December 18, 2019.~~of such date.

~~The~~As of June 30, 2019, the maximum amount of revolving borrowings available under the Holdings Credit Facility is ~~$495,000.~~$720,000. Under the Holdings Credit Facility, NMF Holdings is permitted to borrow up to 25.0%, 45.0% or 70.0% of the purchase price of pledged assets, subject to approval by Wells Fargo ~~Securities, LLC.~~Bank, National Association. The Holdings Credit Facility is non-recourse to the Company and is collateralized by all of the investments of NMF Holdings on an investment by investment basis. All fees associated with the origination or upsizing of the Holdings Credit Facility are capitalized on the Company’s Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the Holdings Credit Facility. The Holdings Credit Facility contains certain customary affirmative and negative covenants and events of default. In addition, the Holdings Credit Facility requires the Company to maintain a minimum asset coverage ~~ratio.~~ratio of 150.0%. The covenants are generally not tied to mark to market fluctuations in the prices of NMF Holdings investments, but rather to the performance of the underlying portfolio companies.

~~Effective January~~As of the amendment entered into on April 1, ~~2016,~~2018, the Holdings Credit Facility bears interest at a rate of LIBOR plus 1.75% per annum for Broadly Syndicated Loans (as defined in the Loan and Security Agreement) and LIBOR plus ~~2.50%~~2.25% per annum for all other investments. The Holdings Credit Facility also charges a non-usage fee, based on the unused facility amount multiplied by the Non-Usage Fee Rate (as defined in the Loan and Security Agreement).

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the Holdings Credit Facility for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	3,081		$	2,243		$	8,684		$	7,237		$	6,352		$	3,591		$	12,690		$	6,717
Non-usage fee	$	179		$	223		$	536		$	531		$	169		$	179		$	286		$	391
Amortization of financing costs	$	406		$	406		$	1,204		$	1,209		$	702		$	624		$	1,381		$	1,240
Weighted average interest rate	3.4		%	2.8		%	3.3		%	2.7		%	4.5		%	4.1		%	4.5		%	4.0		%
Effective interest rate	4.1		%	3.6		%	4.0		%	3.4		%	5.1		%	5.0		%	5.1		%	5.0		%
Average debt outstanding	$	352,372		$	318,368		$	351,594		$	353,577		$	565,942		$	351,466		$	566,139		$	337,283

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the Holdings Credit Facility was ~~$376,163~~$549,063 and ~~$333,513,~~$512,563, respectively, and NMF Holdings was in compliance with the applicable covenants in the Holdings Credit Facility on such dates.

NMFC Credit Facility—The Senior Secured Revolving Credit Agreement, as(as amended ~~dated June 4, 2014 (together~~from time to time, and together with the related guarantee and security agreement, the ~~“NMFC~~"NMFC Credit ~~Facility”~~Facility"), dated June 4, 2014, among the Company, as the Borrower, Goldman Sachs Bank USA, as the Administrative Agent and Collateral Agent, and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A. and Stifel Bank & Trust, as Lenders, is structured as a senior secured revolving credit ~~facility and matures on June 4, 2019.~~facility. The NMFC Credit Facility is guaranteed by certain ~~domestic subsidiaries~~ of the ~~Company~~Company's domestic subsidiaries and proceeds from the NMFC Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. As of the most recent amendment on July 5, 2018, the maturity date of the NMFC Credit Facility is June 4, 2022 and the NMFC Credit Facility includes the financial covenants related to the asset coverage discussed above.

As of ~~September~~June 30, ~~2017,~~2019, the maximum amount of revolving borrowings available under the NMFC Credit Facility was ~~$122,500.~~$135,000. The Company is permitted to borrow at various advance rates depending on the type of portfolio investment, as outlined in the Senior Secured Revolving Credit Agreement. All fees associated with the origination of the NMFC Credit Facility are capitalized on the Company’s Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the NMFC Credit Facility. The NMFC Credit Facility contains certain customary affirmative and negative covenants and events of default, including certain financial covenants related to asset coverage and liquidity and other maintenance covenants.

The NMFC Credit Facility generally bears interest at a rate of LIBOR plus 2.50% per annum or the prime rate plus 1.50% per annum, and charges a commitment fee, based on the unused facility amount multiplied by 0.375% per annum (as defined in the Senior Secured Revolving Credit Agreement).

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the NMFC Credit Facility for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	205		$	684		$	1,278		$	1,911		$	1,159		$	1,519		$	2,178		$	2,371
Non-usage fee	$	97		$	32		$	212		$	78		$	40		$	14		$	90		$	71
Amortization of financing costs	$	99		$	98		$	293		$	279		$	97		$	121		$	219		$	233
Weighted average interest rate	3.6		%	3.0		%	3.5		%	3.0		%	5.0		%	4.5		%	5.0		%	4.4		%
Effective interest rate	7.3		%	3.6		%	5.0		%	3.6		%	5.6		%	4.9		%	5.8		%	5.0		%
Average debt outstanding	$	21,670		$	89,375		$	48,030		$	84,996		$	92,473		$	135,769		$	87,017		$	108,881

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the NMFC Credit Facility was ~~$19,000~~$135,000 and ~~$10,000,~~$60,000, respectively, and NMFC was in compliance with the applicable covenants in the NMFC Credit Facility on such dates.

DB Credit Facility—The Loan Financing and Servicing Agreement (the "DB Credit Facility") dated December 14, 2018 and as amended from time to time, among NMFDB as the borrower, Deutsche Bank AG, New York Branch ("Deutsche Bank") as the facility agent, Lender and other agent from time to time party thereto and U.S. Bank National Association, as collateral agent and collateral custodian, is structured as a secured revolving credit facility and matures on December 14, 2023.

As of June 30, 2019, the maximum amount of revolving borrowings available under the DB Credit Facility was $150,000. The Company is permitted to borrow at various advance rates depending on the type of portfolio investment, as outlined in the Loan Financing and Servicing Agreement. The DB Credit Facility is non-recourse to the Company and is collateralized by all of the investments of NMFDB on an investment by investment basis. All fees associated with the origination of the DB Credit Facility are capitalized on the Company's Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the DB Credit Facility. The DB Credit Facility contains certain customary affirmative and negative covenants and events of default. The covenants are generally not tied to mark to market fluctuations in the prices of NMFDB investments, but rather to the performance of the underlying portfolio companies.

The advances under the DB Credit Facility accrue interest at a per annum rate equal to the Applicable Margin plus the lender's Cost of Funds Rate. Prior to June 28, 2019, the "Applicable Margin" was equal to 2.85% during the Revolving Period and then increases by 0.20% during an Event of Default. Effective June 28, 2019, the Applicable Margin is equal to 2.60% during the Revolving Period and then increases by 0.20% during an Event of Default. The "Cost of Funds Rate" for a conduit lender is the lower of its commercial paper rate and the Base Rate plus 0.50%, and for any other lender is the Base Rate. The "Base Rate" is the three-months LIBOR Rate but may become an alternative base rate based on Deutsche Bank's base lending rate if certain LIBOR disruption events occur. The Company is also charged a non-usage fee, based on the unused facility amount multiplied by the Undrawn Fee Rate (as defined in the Loan Financing and Servicing Agreement) and a facility agent fee of 0.25% per annum on the total facility amount.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the DB Credit Facility for the three and six months ended June 30, 2019 and June 30, 2018.



	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018(1)			June 30, 2019			June 30, 2018(1)
Interest expense(2)	$	912		$	—		$	1,447		$	—
Non-usage fee(2)	$	44		$	—		$	121		$	—
Amortization of financing costs	$	91		$	—		$	156		$	—
Weighted average interest rate	5.5		%	—		%	5.5		%	—		%
Effective interest rate	6.3		%	—		%	6.6		%	—		%
Average debt outstanding	$	66,868		$	—		$	52,740		$	—


(1)	Not applicable as the DB Credit Facility commenced on December 14, 2018.


(2)	Interest expense includes the portion of the facility agent fee applicable to the drawn portion of the DB Credit Facility and non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the DB Credit Facility.

As of June 30, 2019 and December 31, 2018, the outstanding balance on the DB Credit Facility was $100,000 and $57,000, respectively, and NMFDB was in compliance with the applicable covenants in the DB Credit Facility on such dates.

NMNLC Credit Facility—The Revolving Credit Agreement (together with the related guarantee and security agreement, the “NMNLC Credit Facility”), dated September 21, 2018, among NMNLC, as the Borrower, and KeyBank National Association, as the Administrative Agent and Lender, is structured as a senior secured revolving credit facility and matures on September 23, 2019. The NMNLC Credit Facility is guaranteed by the Company and proceeds from the NMNLC Credit Facility may be used for funding of additional acquisition properties.

The NMNLC Credit Facility generally bears interest at a rate of LIBOR plus 2.50% per annum or the prime rate plus 1.50% per annum, and charges a commitment fee, based on the unused facility amount multiplied by 0.15% per annum (as defined in the Revolving Credit Agreement).

As of June 30, 2019, the maximum amount of revolving borrowings available under the NMNLC Credit Facility was $30,000. For the three months ended June 30, 2019, interest expense, non-usage fees and amortization of financing costs were $0, $12 and $28, respectively. For the six months ended June 30, 2019, interest expense, non-usage fees and amortization of financing costs were $0, $23 and $56, respectively. As of June 30, 2019 and December 31, 2018, the outstanding balance on the NMNLC Credit Facility was $0 and NMNLC was in compliance with the applicable covenants in the NMNLC Credit Facility on such dates.

Convertible Notes

2014 Convertible Notes—On June 3, 2014, the Company closed a private offering of $115,000 aggregate principal amount of unsecured convertible notes (the ~~“Convertible~~“2014 Convertible Notes”), pursuant to an indenture, dated June 3, 2014 (the ~~“Indenture”~~“2014 Indenture”). The 2014 Convertible Notes were issued in a private placement only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). As of June 3, 2015, the restrictions under Rule 144A under the Securities Act were removed, allowing the 2014 Convertible Notes to be eligible and freely tradable without restrictions for resale pursuant to Rule 144(b)(1) under the Securities Act. On September 30, 2016, the Company closed a public offering of an additional $40,250 aggregate principal amount of the 2014 Convertible Notes. These additional 2014 Convertible Notes ~~constitute~~constituted a further issuance of, ~~rank~~ranked equally in right of payment with, and ~~form~~formed a single series with the $115,000 aggregate principal amount of 2014 Convertible Notes that the Company issued on June 3, 2014.

The 2014 Convertible Notes ~~bear~~bore interest at an annual rate of 5.0%, payable semi-annually in arrears on June 15 and December 15 of each year, which commenced on December 15, 2014. The 2014 Convertible Notes matured on June 15, 2019.

On June 15, 2019, the Company's $155,250 aggregate principal amount of 2014 Convertible Notes matured and the Company repaid the outstanding principal and accrued but unpaid interest in cash.

2018 Convertible Notes—On August 20, 2018, the Company closed a registered public offering of $100,000 aggregate principal amount of unsecured convertible notes (the “2018 Convertible Notes”, and together with the 2014 Convertible Notes, the "Convertible Notes"), pursuant to an indenture, dated August 20, 2018, as supplemented by a first supplemental indenture thereto, dated August 20, 2018 (together the “2018A Indenture”). On August 30, 2018, in connection with the registered public offering, the Company issued an additional $15,000 aggregate principal amount of the 2018

Convertible Notes pursuant to the exercise of an overallotment option by the underwriter of the 2018 Convertible Notes. On June 7, 2019, the Company closed a registered public offering of an additional $86,250 aggregate principal amount of the 2018 Convertible Notes. These additional 2018 Convertible Notes constitute a further issuance of, rank equally in right of payment with, and form a single series with the $115,000 aggregate principal amount of 2018 Convertible Notes that the Company issued in August 2018.

The 2018 Convertible Notes bear interest at an annual rate of 5.75%, payable semi-annually in arrears on February 15 and August 15 of each year, which commenced on February 15, 2019. The 2018 Convertible Notes will mature on ~~June~~August 15, ~~2019~~2023 unless earlier converted, repurchased or redeemed pursuant to the terms of the 2018A Indenture. The Company may not redeem the 2018 Convertible Notes prior to May 15, 2023. On or after May 15, 2023, the Company may redeem the 2018 Convertible Notes for cash, in whole or from time to time in part, at its option at a redemption price, subject to an exception for redemption dates occurring after a record date but on or prior to the interest payment date, equal to the sum of (i) 100% of the principal amount of the 2018 Convertible Notes to be redeemed, (ii) accrued and unpaid interest thereon to, but excluding, the redemption date and (iii) a make-whole premium.

No sinking fund is provided for the 2018 Convertible Notes. Holders of 2018 Convertible Notes may, at their option, convert their 2018 Convertible Notes into shares of the Company’s common stock at any time on or prior to the close of business on the business day immediately preceding the maturity date of the 2018 Convertible Notes. In addition, if certain corporate events occur, holders of the 2018 Convertible Notes may require the Company to repurchase for cash all or part of their 2018 Convertible Notes at a repurchase price equal to 100.0% of the principal amount of the 2018 Convertible Notes to be repurchased, atplus accrued and unpaid interest through, but excluding, the ~~holder’s option.~~repurchase date.

The 2018A Indenture contains certain covenants, including covenants requiring the Company to provide certain financial information to the holders of the 2018 Convertible Notes and the trustee if the Company ceases to be subject to the reporting requirements of the Exchange Act. The 2018A Indenture also includes additional financial covenants related to asset coverage. These covenants are subject to limitations and exceptions that are described in the 2018A Indenture.

The following table summarizes certain key terms related to the convertible features of the Company’s 2018 Convertible Notes as of ~~September~~June 30, ~~2017.~~2019.


	September 30, 2017			2018 Convertible Notes
Initial conversion premium	12.5		%	10.0		%
Initial conversion rate(1)	62.7746			65.8762
Initial conversion price	$	15.93		$	15.18
Conversion premium at September 30, 2017	11.7		%
Conversion rate at September 30, 2017(1)(2)	63.2794
Conversion price at September 30, 2017(2)(3)	$	15.80
Conversion premium at June 30, 2019				10.0		%
Conversion rate at June 30, 2019(1)(2)				65.8762
Conversion price at June 30, 2019(2)(3)				$	15.18
Last conversion price calculation date	June 3, 2017			August 20, 2018


(1)	Conversion rates denominated in shares of common stock per $1 principal amount of the 2018 Convertible Notes converted.


(2)	Represents conversion rate and conversion price, as applicable, taking into account certain de minimis adjustments that will be made on the conversion date.


(3)	The conversion price in effect at ~~September~~June 30, ~~2017~~2019 was calculated on the last anniversary of the issuance and will be calculated again on the next anniversary, unless the exercise price shall have changed by more than 1.0% before the anniversary.

The conversion rate will be subject to adjustment upon certain events, such as stock splits and combinations, mergers, spin-offs, increases in ~~distributions~~dividends in excess of $0.34 per share per quarter and certain changes in control. Certain of these adjustments, including adjustments for increases in ~~distributions,~~dividends, are subject to a conversion price floor of ~~$14.05~~$13.80 per share. In no event will the total number of shares of common stock issuable upon conversion exceed ~~71.1893~~72.4637 per $1 principal ~~amount of the Convertible Notes.~~amount. The Company has determined that the embedded conversion option in the 2018 Convertible Notes is not required to be separately accounted for as a derivative under GAAP.

The 2018 Convertible Notes are unsecured obligations and rank senior in right of payment to the Company’s existing and future indebtedness, if any, that is expressly subordinated in right of payment to the 2018 Convertible Notes; equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future

indebtedness (including trade payables) incurred by the Company’s subsidiaries and financing vehicles. As reflected in Note 11. Earnings Per Share, the issuance is considered part of the if-converted method for calculation of diluted earnings per share.

The Company may not redeem the Convertible Notes prior to maturity. No sinking fund is provided for the Convertible Notes. In addition, if certain corporate events occur, holders of the Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100.0% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the repurchase date.

The Indenture contains certain covenants, including covenants requiring the Company to provide financial information to the holders of the Convertible Note and the Trustee if the Company ceases to be subject to the reporting requirements of the Exchange Act. These covenants are subject to limitations and exceptions that are described in the Indenture.

~~The~~ following table summarizes the interest expense, amortization of financing costs and amortization of premium incurred on the Convertible Notes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	1,941		$	1,443		$	5,822		$	4,318		$	3,579		$	1,940		$	7,173		$	3,881
Amortization of financing costs	$	300		$	188		$	890		$	559		$	251		$	297		$	597		$	590
Amortization of premium	$	(28	)	$	—		$	(83	)	$	—		$	(30	)	$	(28	)	$	(57	)	$	(55	)
Weighted average interest rate													5.4		%	5.0		%	5.4		%	5.0		%
Effective interest rate	5.7		%	5.6		%	5.7		%	5.7		%	5.7		%	5.7		%	5.8		%	5.7		%
Average debt outstanding	$	155,250		$	155,438		$	155,250		$	115,147		$	265,701		$	155,250		$	267,963		$	155,250

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the Convertible Notes was ~~$155,250~~$201,250 and ~~$155,250,~~$270,250, respectively, and NMFC was in compliance with the terms of the 2018A Indenture on such ~~dates.~~date.

Unsecured Notes—

On May 6, 2016, the Company issued $50,000 in aggregate principal amount of five-year unsecured notes that mature on May 15, 2021 (the “2016 Unsecured Notes”), pursuant to a note purchase agreement, dated May 4, 2016, to an institutional investor in a private placement. On September 30, 2016, the Company entered into an amended and restated note purchase agreement (the "NPA") and issued an additional $40,000 in aggregate principal amount of 2016 Unsecured Notes to institutional investors in a private placement. On June 30, 2017, the Company issued ~~$55.0 million~~$55,000 in aggregate principal amount of five-year unsecured notes that mature on July 15, 2022 (the "2017A Unsecured Notes" ~~and together with the 2016 Unsecured Notes, the "Unsecured Notes"~~), pursuant to the NPA and a supplement to the NPA. On January 30, 2018, the Company issued $90,000 in aggregate principal amount of five year unsecured notes that mature on January 30, 2023 (the "2018A Unsecured Notes") pursuant to the NPA and a second supplement to the NPA. On July 5, 2018, the Company issued $50,000 in aggregate principal amount of five year unsecured notes that mature on June 28, 2023 (the "2018B Unsecured Notes") pursuant to the NPA and a third supplement to the NPA (the "Third Supplement"). On April 30, 2019, the Company issued $116,500 in aggregate principal amount of five year unsecured notes that mature on April 30, 2024 (the "2019A Unsecured Notes") pursuant to the NPA and a fourth supplement to the NPA. The NPA provides for future issuances of ~~Unsecured Notes~~unsecured notes in separate series or tranches. ~~The Unsecured Notes are equal in priority with the Company’s other unsecured indebtedness, including the Company’s Convertible Notes.~~

The 2016 Unsecured Notes bear interest at an annual rate of 5.313%, payable semi-annually on May 15 and November 15 of each year, which commenced on November 15, 2016. The 2017A Unsecured Notes bear interest at an annual rate of 4.760%, payable semi-annually on January 15 and July 15 of each year, which ~~commences~~commenced on January 15, 2018. The 2018A Unsecured Notes bear interest at an annual rate of 4.870%, payable semi-annually on February 15 and August 15 of each year, which commenced on August 15, 2018. The 2018B Unsecured Notes bear interest at an annual rate of 5.360%, payable semi-annually on January 15 and July 15 of each year, which commenced on January 15, 2019. The 2019A Unsecured Notes bear interest at an annual rate of 5.494%, payable semi-annually on April 15 and October 15 of each year, commencing on October 15, 2019. These interest rates are subject to increase in the event that: (i) subject to certain exceptions, the ~~Unsecured Notes~~underlying unsecured notes or the Company ~~cease~~ceases to have an investment grade rating or (ii) the aggregate amount of the Company’s unsecured debt falls below $150,000. In each such event, the Company has the option to offer to prepay the ~~Unsecured Notes~~underlying unsecured notes at par, in which case holders of the ~~Unsecured Notes~~underlying unsecured notes who accept the offer would not receive the increased interest rate. In addition, the Company is obligated to offer to prepay the ~~Unsecured Notes~~underlying unsecured notes at par if 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 NPA contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, an option to offer to prepay all or a portion of the ~~Unsecured Notes~~unsecured notes under its governance at par (plus a make-whole amount, if applicable), affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC under the 1940 Act and a RIC under the Code, 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 significant subsidiaries, certain judgments and orders, and certain events of bankruptcy. The Third Supplement includes additional financial covenants related to asset coverage as well as other terms.

On September 25, 2018, the Company closed a registered public offering of $50,000 in aggregate principal amount of five-year unsecured notes that mature on October 1, 2023 (the "5.75% Unsecured Notes" and together with the 2016 Unsecured Notes, 2017A Unsecured Notes, 2018A Unsecured Notes, 2018B Unsecured Notes and 2019A Unsecured Notes, the "Unsecured Notes") pursuant to an indenture, dated August 20, 2018, as supplemented by a second supplemental indenture thereto, dated September 25, 2018 (together, the "2018B Indenture"). On October 17, 2018, in connection with the registered public offering, the Company issued an additional $1,750 aggregate principal amount of the 5.75% Unsecured Notes pursuant to the exercise of an overallotment option by the underwriters of the 5.75% Unsecured Notes.

The 5.75% Unsecured Notes bear interest at an annual rate of 5.75%, payable quarterly on January 1, April 1, July 1 and October 1 of each year, which commenced on January 1, 2019. The 5.75% Unsecured Notes will mature on October 1, 2023 unless earlier redeemed. The 5.75% Unsecured Notes are listed on the New York Stock Exchange and trade under the trading symbol “NMFX.”

The Company may redeem the 5.75% Unsecured Notes, in whole or in part, at any time, or from time to time, at its option on or after October 1, 2020, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price of 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to but not including the date fixed for redemption.

No sinking fund is provided for the 5.75% Unsecured Notes and holders of the 5.75% Unsecured Notes have no option to have their 5.75% Unsecured Notes repaid prior to the stated maturity date.

The 2018B Indenture contains certain covenants, including covenants requiring the Company to (i) comply with the asset coverage requirements set forth in Section 18(a)(1)(A) of the 1940 Act as modified by Section 61(a) of the 1940 Act as may be applicable to the Company from time to time or any successor provisions, whether or not the Company continues to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to the Company by the SEC and (ii) provide certain financial information to the holders of the 5.75% Unsecured Notes and the trustee if the Company ceases to be subject to the reporting requirements of the Exchange Act. The 2018B Indenture also includes additional financial covenants related to asset coverage. These covenants are subject to limitations and exceptions that are described in the 2018B Indenture.

The 2018B Indenture provides for customary events of default and further provides that the trustee or the holders of 25% in aggregate principal amount of the outstanding 5.75% Unsecured Notes may declare such 5.75% Unsecured Notes immediately due and payable upon the occurrence of any event of default after expiration of any applicable grace period.

The Unsecured Notes are unsecured obligations and rank senior in right of payment to the Company’s existing and future indebtedness, if any, that is expressly subordinated in right of payment to the Unsecured Notes; equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries and financing vehicles.

The following table summarizes the interest expense and amortization of financing costs incurred on the Unsecured Notes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016(1)			June 30, 2019(1)			June 30, 2018(2)			June 30, 2019(1)			June 30, 2018(2)
Interest expense	$	1,850		$	670		$	4,248		$	1,076		$	5,444		$	2,946		$	9,804		$	5,538
Amortization of financing costs	$	145		$	62		$	349		$	99		$	291		$	174		$	566		$	336
Weighted average interest rate													5.2		%	5.0		%	5.2		%	5.1		%
Effective interest rate	5.5		%	5.8		%	5.7		%	5.8		%	5.5		%	5.3		%	5.6		%	5.4		%
Average debt outstanding	$	145,000		$	50,435		$	108,736		$	50,270		$	416,124		$	235,000		$	376,656		$	220,580


(1)	For the ~~nine~~three and six months ended ~~September~~June 30, ~~2016,~~2019, amounts reported ~~relate~~include interest and amortization of financing costs related to the 2019A Unsecured Notes for the period from ~~May 6, 2016~~April 30, 2019 (issuance date of the 2019A Unsecured Notes) to ~~September~~June 30, ~~2016.~~2019.


(2)	For the three and six months ended June 30, 2018, amounts reported include interest and amortization of financing costs related to the 2018A Unsecured Notes for the period from January 30, 2018 (issuance date of the 2018A Unsecured Notes) to June 30, 2018.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the Unsecured Notes was ~~$145,000~~$453,250 and ~~$90,000,~~$336,750, respectively, and the Company was in compliance with the terms of the ~~NPA.~~NPA and the 2018B Indenture as of such dates, as applicable.

SBA-guaranteed debentures—On August 1, 2014 and August 25, 2017, respectively, SBIC I and SBIC II received ~~an SBIC license~~licenses from the ~~SBA.~~SBA to operate as SBICs.

The SBIC ~~license allows SBIC I~~licenses allow SBICs to obtain leverage by issuing SBA-guaranteed debentures, subject to the issuance of a capital commitment by the SBA and other customary procedures. SBA-guaranteed debentures are non-recourse to the Company, interest only debentures with interest payable semi-annually and have a ten year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis at a market-driven spread over U.S. Treasury Notes with ten year maturities. The SBA, as a creditor, will have a superior claim to the assets of SBIC I and SBIC II over the Company’s stockholders in the event SBIC I isand SBIC II are liquidated or the SBA exercises remedies upon an event of default.

The maximum amount of borrowings available under current SBA regulations for a single licensee is $150,000 as long as the licensee has at least $75,000 in regulatory capital, receives a capital commitment from the SBA and has been through an examination by the SBA subsequent to licensing. In June 2018, legislation amended the 1958 Act by increasing the individual leverage limit from $150,000 to $175,000, subject to SBA approvals.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, SBIC I had regulatory capital of ~~approximately~~ $75,000 and $75,000, respectively, and SBA-guaranteed debentures outstanding of ~~$144,000~~$150,000 and ~~$121,745,~~$150,000, respectively. As of June 30, 2019 and December 31, 2018, SBIC II had regulatory capital of $42,500 and $42,500, respectively, and $15,000 and $15,000, respectively, of SBA-guaranteed debentures outstanding. The SBA-guaranteed debentures incur upfront fees of 3.425%, which consists of a 1.00% commitment fee and a 2.425% issuance discount, which are amortized over the life of the SBA-guaranteed debentures. The following table summarizes ~~SBIC I’s~~the Company’s SBA-guaranteed debentures as of ~~September~~June 30, ~~2017.~~2019.


Issuance Date	Maturity Date	Debenture Amount		Interest Rate		SBA Annual Charge		Maturity Date	Debenture Amount		Interest Rate		SBA Annual Charge
Fixed SBA-guaranteed debentures:
Fixed SBA-guaranteed debentures(1):
March 25, 2015	March 1, 2025	$	37,500	2.517	%	0.355	%	March 1, 2025	$	37,500	2.517	%	0.355	%
September 23, 2015	September 1, 2025	37,500		2.829	%	0.355	%	September 1, 2025	37,500		2.829	%	0.355	%
September 23, 2015	September 1, 2025	28,795		2.829	%	0.742	%	September 1, 2025	28,795		2.829	%	0.742	%
March 23, 2016	March 1, 2026	13,950		2.507	%	0.742	%	March 1, 2026	13,950		2.507	%	0.742	%
September 21, 2016	September 1, 2026	4,000		2.051	%	0.742	%	September 1, 2026	4,000		2.051	%	0.742	%
September 20, 2017	September 1, 2027	13,000		2.518	%	0.742	%	September 1, 2027	13,000		2.518	%	0.742	%
Interim SBA-guaranteed debentures:
	March 1, 2028(1)	9,255		1.769	%	0.742	%
March 21, 2018								March 1, 2028	15,255		3.187	%	0.742	%
Fixed SBA-guaranteed debentures(2):
September 19, 2018								September 1, 2028	15,000		3.548	%	0.222	%
Total SBA-guaranteed debentures		$	144,000						$	165,000


(1)	~~Estimated maturity date as interim~~ SBA-guaranteed debentures are ~~expected to pool~~held in ~~March 2018.~~SBIC I.


(2)	SBA-guaranteed debentures are held in SBIC II.

Prior to pooling, the SBA-guaranteed debentures bear interest at an interim floating rate of LIBOR plus 0.30%. Once pooled, which occurs in March and September each year, the SBA-guaranteed debentures bear interest at a fixed rate that is set to the current 10-year treasury rate plus a spread at each pooling date.

The following table summarizes the interest expense and amortization of financing costs incurred on the SBA-guaranteed debentures for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	1,056		$	964		$	2,988		$	2,784		$	1,359		$	1,249		$	2,704		$	2,409
Amortization of financing costs	$	114		$	103		$	319		$	300		$	138		$	128		$	274		$	252
Weighted average interest rate	3.1		%	3.1		%	3.1		%	3.1		%	3.3		%	3.2		%	3.3		%	3.2		%
Effective interest rate	3.4		%	3.5		%	3.5		%	3.5		%	3.6		%	3.6		%	3.6		%	3.5		%
Average debt outstanding	$	134,890		$	121,745		$	127,028		$	119,172		$	165,000		$	154,286		$	165,000		$	152,155

The SBIC program is designed to stimulate the flow of private investor capital into eligible ~~small~~smaller businesses, as defined by the SBA. Under SBA regulations, ~~SBIC I is~~SBICs are subject to regulatory requirements, including making investments in SBA-eligible businesses, investing at least 25.0% of its investment capital in eligible smaller businesses, as defined under the 1958 Act, placing certain limitations on the financing terms of investments, regulating the types of financing, prohibiting investments in ~~small~~smaller businesses with certain characteristics or in certain industries and requiring capitalization thresholds that limit distributions to the Company. ~~SBIC I is~~SBICs are subject to an annual periodic examination by an SBA examiner to determine ~~SBIC I’s~~the SBIC’s compliance with the relevant SBA regulations and an annual financial audit of its financial statements that are prepared on a basis of accounting other than GAAP (such as ASC 820) by an independent auditor. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, SBIC I ~~was~~and SBIC II were in compliance with SBA regulatory requirements.

Leverage risk factors—The Company utilizes and may utilize leverage to the maximum extent permitted by the law for investment and other general business purposes. The ~~Company’s~~Company's lenders will have fixed dollar claims on certain assets that are superior to the claims of the ~~Company’s~~Company's common stockholders, and the Company would expect such lenders to seek recovery against these assets in the event of a default. The use of leverage also magnifies the potential for gain or loss on amounts invested. Leverage may magnify interest rate risk (particularly on the ~~Company’s~~Company's fixed-rate investments), which is the risk that the prices of portfolio investments will fall or rise if market interest rates for those types of securities rise or fall. As a result, leverage may cause greater changes in the ~~Company’s~~Company's net asset value. Similarly, leverage may cause a sharper decline in the ~~Company’s~~Company's income than if the Company had not borrowed. Such a decline could negatively affect the ~~Company’s~~Company's ability to make distributions to its stockholders. Leverage is generally considered a speculative investment technique. The ~~Company’s~~Company's ability to service any debt incurred will depend largely on financial performance and will be subject to prevailing economic conditions and competitive pressures.

Note 8. Regulation

The Company has elected to be treated, and intends to comply with the requirements to continue to qualify annually, as a RIC under Subchapter M of the Code. In order to continue to qualify and be subject to tax as a RIC, among other things, the Company is required to timely distribute to its stockholders at least 90.0% of investment company taxable income, as defined by the Code, for each year. The Company, among other things, intends to make and will continue to make the requisite distributions to its stockholders, which will generally relieve the Company from U.S. federal, state, and local income taxes (excluding excise taxes which may be imposed under the Code).

Additionally, as a BDC, the Company must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70.0% of its total assets are qualifying assets (with certain limited exceptions). In addition, the Company must offer to make available to all eligible portfolio companies managerial assistance.

Note 9. Commitments and Contingencies

In the normal course of business, the Company may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company may also enter into future funding commitments such as revolving credit facilities, bridge financing commitments or delayed draw commitments. As of ~~September~~June 30, ~~2017,~~2019, the Company had unfunded commitments on revolving credit facilities of ~~$38,645,~~$45,924, no outstanding bridge financing commitments and other future funding commitments of ~~$36,830.~~$103,417. As of December 31, ~~2016,~~2018, the Company had unfunded commitments on revolving credit facilities of ~~$27,915,~~$43,539, no outstanding bridge financing commitments and other future funding commitments of ~~$16,368.~~$94,407. The unfunded commitments on revolving credit facilities and delayed draws are disclosed on the Company’s ~~respective~~ Consolidated Schedule of Investments.

The Company also has revolving borrowings available under the Holdings Credit Facility, the DB Credit Facility and the ~~NMFC~~NMNLC Credit Facility as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016.~~2018. See Note 7. Borrowings, for details.

The Company may from time to time enter into financing commitment letters. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company had commitment letters to purchase investments in the aggregate par amount of ~~$57,200~~$100,000 and ~~$14,818,~~$27,536, respectively, which could require funding in the future.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the Company owed $3,000 and $6,000, respectively, related to a settlement agreement with a trustee of Black Elk Energy Offshore Operations, LLC. The Company began to make semi-annual payments of $3,000 in June 2018 with the final payment due in December 2019.

As of June 30, 2019, the Company had unfunded commitments related to an equity investment in SLP IIIII of ~~$0 and $7,940, respectively,~~$20,000, which ~~was~~may be funded at the Company's discretion.

Note 10. Net Assets

The table below illustrates the effect of certain transactions on the net asset accounts of the ~~Company:~~Company for the three and six months ended June 30, 2019:


	Common Stock			Treasury Stock			Paid in Capital in			Accumulated Undistributed Net Investment			Accumulated Undistributed Net Realized			Net Unrealized (Depreciation)			Total									Accumulated Overdistributed Earnings
	Shares	Par Amount		at Cost			Excess of Par			Income			(Losses) Gains			Appreciation			Net Assets			Common Stock			Paid in Capital in			Accumulated Net Investment			Accumulated Net Realized			Net Unrealized Appreciation			Total
Balance at December 31, 2016	69,717,814	$	698	$	(460	)	$	1,001,862		$	2,073		$	(36,947	)	$	(28,664	)	$	938,562
																						Shares	Par Amount		Excess of Par			Income			(Losses) Gains			(Depreciation)			Net Assets
Net assets at December 31, 2018																						76,106,372	$	761	$	1,035,629		$	61,975		$	(86,338	)	$	(5,758	)	$	1,006,269
Issuances of common stock	6,049,632	60		—			85,765			—			—			—			85,825			4,413,058	44		60,617			—			—			—			60,661
Reissuance of common stock	37,573	—		460			100			—			—			—			560
Deferred offering costs	—	—		—			(172		)	—			—			—			(172		)	—	—		(229		)	—			—			—			(229		)
Other	—	—		—			(81		)	—			—			—			(81		)
Distributions declared	—	—		—			—			(75,132		)	—			—			(75,132		)	—	—		—			(27,342		)	—			—			(27,342		)
Net increase (decrease) in net assets resulting from operations	—	—		—			—			75,521			(39,843		)	46,843			82,521			—	—		—			27,450			46			16,424			43,920
Balance at September 30, 2017	75,805,019	$	758	$	—		$	1,087,474		$	2,462		$	(76,790	)	$	18,179		$	1,032,083
Net assets at March 31, 2019																						80,519,430	$	805	$	1,096,017		$	62,083		$	(86,292	)	$	10,666		$	1,083,279
Issuances of common stock																						90,872	1		1,269			—			—			—			1,270
Distributions declared																						—	—		—			(27,377		)	—			—			(27,377		)
Net increase (decrease) in net assets resulting from operations																						—	—		—			27,948			52			(4,255		)	23,745
Net assets at June 30, 2019																						80,610,302	$	806	$	1,097,286		$	62,654		$	(86,240	)	$	6,411		$	1,080,917

The table below illustrates the effect of certain transactions on the net asset accounts of the Company for the three and six months ended June 30, 2018:



						Accumulated Overdistributed Earnings
	Common Stock			Paid in Capital in		Accumulated Net Investment			Accumulated Net Realized			Net Unrealized Appreciation			Total
	Shares	Par Amount		Excess of Par		Income			(Losses) Gains			(Depreciation)			Net Assets
Net assets at December 31, 2017	75,935,093	$	759	$	1,053,468	$	39,165		$	(76,681	)	$	18,264		$	1,034,975
Distributions declared	—	—		—		(25,818		)	—			—			(25,818		)
Net increase (decrease) in net assets resulting from operations	—	—		—		25,736			206			(2,098		)	23,844
Net assets at March 31, 2018	75,935,093	$	759	$	1,053,468	$	39,083		$	(76,475	)	$	16,166		$	1,033,001
Issuances of common stock	171,279	2		2,328		—			—			—			2,330
Distributions declared	—	—		—		(25,818		)	—			—			(25,818		)
Net increase (decrease) in net assets resulting from operations	—	—		—		25,721			(6,609		)	4,021			23,133
Net assets at June 30, 2018	76,106,372	$	761	$	1,055,796	$	38,986		$	(83,084	)	$	20,187		$	1,032,646

Note 11. Earnings Per Share

The following information sets forth the computation of basic and diluted net increase in the Company’s net assets per share resulting from operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016:~~2018:


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016		June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Earnings per share—basic
Numerator for basic earnings per share:	$	24,776	$	25,079	$	82,521	$	77,823	$	23,745	$	23,133	$	67,665	$	46,977
Denominator for basic weighted average share:	75,688,429		63,758,062		73,618,794		63,843,730		80,522,426		75,938,857		79,495,737		75,936,986
Basic earnings per share:	$	0.33	$	0.39	$	1.12	$	1.22	$	0.29	$	0.30	$	0.85	$	0.62
Earnings per share—diluted(1)
Numerator for increase in net assets per share	$	24,776	$	25,079	$	82,521	$	77,823	$	23,745	$	23,133	$	67,665	$	46,977
Adjustment for interest on Convertible Notes and incentive fees, net	1,553		1,154		4,658		3,454		2,863		1,553		5,738		3,105
Numerator for diluted earnings per share:	$	26,329	$	26,233	$	87,179	$	81,277	$	26,608	$	24,686	$	73,403	$	50,082
Denominator for basic weighted average share	75,688,429		63,758,062		73,618,794		63,843,730		80,522,426		75,938,857		79,495,737		75,936,986
Adjustment for dilutive effect of Convertible Notes	9,824,127		7,387,870		9,824,127		7,314,314		17,171,073		9,824,127		17,284,850		9,824,127
Denominator for diluted weighted average share	85,512,556		71,145,932		83,442,921		71,158,044		97,693,499		85,762,984		96,780,587		85,761,113
Diluted earnings per share	$	0.31	$	0.37	$	1.04	$	1.14	$	0.27	$	0.29	$	0.76	$	0.58


(1)	In applying the if-converted method, conversion is not assumed for purposes of computing diluted earnings per share if the effect would be anti-dilutive.

Note 12. Financial Highlights

The following information sets forth the Company's financial highlights for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Nine Months Ended						Six Months Ended
	September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018
Per share data(1):
Net asset value, January 1, 2017 and January 1, 2016, respectively	$	13.46		$	13.08
Net asset value, January 1, 2019 and January 1, 2018, respectively							$	13.22		$	13.63
Net investment income	1.03			1.02			0.70			0.68
Net realized and unrealized gains (losses)(2)	0.14			0.20			0.17			(0.06		)
Total net increase	1.17			1.22			0.87			0.62
Distributions declared to stockholders from net investment income	(1.02		)	(1.02		)	(0.68		)	(0.68		)
Net asset value, September 30, 2017 and September 30, 2016, respectively	$	13.61		$	13.28
Per share market value, September 30, 2017 and September 30, 2016, respectively	$	14.25		$	13.76
Net asset value, June 30, 2019 and June 30, 2018, respectively							$	13.41		$	13.57
Per share market value, June 30, 2019 and June 30, 2018, respectively							$	13.97		$	13.60
Total return based on market value(3)	8.31		%	14.07		%	16.60		%	5.52		%
Total return based on net asset value(4)	8.91		%	9.68		%	6.63		%	4.59		%
Shares outstanding at end of period	75,805,019			63,864,858			80,610,302			76,106,372
Average weighted shares outstanding for the period	73,618,794			63,843,730			79,495,737			75,936,986
Average net assets for the period	$	1,003,672		$	837,887		$	1,081,666		$	1,032,833
Ratio to average net assets:
Net investment income	10.06		%	10.38		%	10.33		%	10.05		%
Total expenses, before waivers/reimbursements	10.08		%	10.07		%	15.09		%	11.54		%
Total expenses, net of waivers/reimbursements	9.20		%	9.43		%	14.03		%	10.94		%
Average debt outstanding—Holdings Credit Facility	$	351,594		$	353,577		$	566,139		$	337,283
Average debt outstanding—Unsecured Notes							376,656			220,580
Average debt outstanding—Convertible Notes	155,250			115,147			267,963			155,250
Average debt outstanding—SBA-guaranteed debentures	127,028			119,172			165,000			152,155
Average debt outstanding—Unsecured Notes(5)	108,736			50,270
Average debt outstanding—NMFC Credit Facility	48,030			84,996			87,017			108,881
Asset coverage ratio(6)	248.37		%	242.09		%
Average debt outstanding—DB Credit Facility							52,740			—
Average debt outstanding—NMNLC Credit Facility							—			—
Asset coverage ratio(5)							175.12		%	210.94		%
Portfolio turnover	29.67		%	22.38		%	2.88		%	14.57		%


(1)	Per share data is based on weighted average shares outstanding for the respective period (except for distributions declared to stockholders, which is based on actual rate per share).


(2)	Includes the accretive effect of common stock issuances per share, which for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016~~2018 were ~~$0.05~~$0.02 and $0.00, respectively.


(3)	Total return is calculated assuming a purchase of common stock at the opening of the first day of the year and a sale on the closing of the last business day of the period. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Company’s dividend reinvestment plan.


(4)	Total return is calculated assuming a purchase at net asset value on the opening of the first day of the year and a sale at net asset value on the last day of the period. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at the net asset value on the last day of the respective quarter.


(5)	~~For the nine months ended September 30, 2016, average debt outstanding represents the period from May 6, 2016 (issuance of the Unsecured Notes) to September 30, 2016.~~


~~(6)~~	On November 5, 2014, the Company received exemptive relief from the SEC allowing the Company to modify the asset coverage requirement to exclude the SBA-guaranteed debentures from this calculation.

Note 13. Recent Accounting Standards Updates

In ~~January 2016,~~August 2018, the FASB issued Accounting Standards Update No. ~~2016-01,~~2018-13, ~~Financial Instruments—Overall Subtopic 825-10—Recognition and~~Fair Value Measurement ~~of Financial Assets and Financial Liabilities~~(Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“("ASU ~~2016-01”~~2018-13"). The standard will modify the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. ASU ~~2016-01 amends certain aspects of recognition, measurement, presentation and disclosure of financial assets and liabilities. ASU 2016-01~~2018-13 is effective for ~~financial statements issued for fiscal years~~annual reporting periods beginning after December 15, ~~2017, and~~2019, including interim periods within those fiscal years. The new guidance must be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that ~~exist as of the date of adoption of ASU 2016-01.~~reporting period. The Company is inpermitted to early adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the ~~process~~additional disclosures until their effective date. The Company has elected to early adopt ASU 2018-13 as of ~~evaluating the impact that this guidance will have on the Company’s consolidated financial statements and disclosures.~~December 31, 2018.

Note 14. Subsequent Events

On ~~October 24, 2017,~~July 11, 2019, the Company ~~entered into~~completed a public offering of 6,900,000 shares of the ~~Third Amended and Restated Loan and Security Agreement (together with~~Company's common stock at a public offering price of $13.68 per share. The Investment Adviser paid a $0.39 per share portion of the ~~exhibits and schedules thereto, the “New Holdings Credit Facility”), by and among~~$0.42 per share underwriters' sales load such that the Company asreceived net proceeds of $13.65 per share in this offering. All payments made by the ~~collateral manager, NMF Holdings, as~~Investment Adviser are not subject to reimbursement by the ~~borrower, Wells Fargo Bank, National Association, as the administrative agent, the lenders party thereto, and Wells Fargo Bank, as collateral custodian.~~ Company. The New Holdings Credit Facility effectively amends and restates the Holdings Credit Facility. The New Holdings Credit Facility has a revolving period ending on October 24, 2020 and matures on October 24, 2022. With the closingCompany received total net proceeds of ~~the New Holdings Credit Facility, the Company broadened its lender group,~~approximately $94,185 in connection with Raymond James Bank, N.A., State Street Bank and Trust Company, NBH Bank, and State Bank and Trust Company joining the facility, making commitments and advances aggregating $85,000. The maximum amount of revolving borrowing available under the New Holdings Credit Facility remains $495,000.this offering.

On October 31, 2017, the Company announced that its wholly owned subsidiary, SBIC II, received approval for a license from the SBA to operate as an SBIC. This is the second SBIC license granted to the Company through its SBIC subsidiaries. As an SBIC, SBIC II will be subject to a variety of regulations and oversight by the SBA concerning, among other things, the size and nature of the companies in which it may invest as well as the structure of those investments.

~~On November 2, 2017,~~August 1, 2019, the Company’s board of directors declared a ~~fourth~~third quarter ~~2017~~2019 distribution of $0.34 per share payable on ~~December 28, 2017~~September 27, 2019 to holders of record as of ~~December 15, 2017.~~September 13, 2019.



	Deloitte & Touche LLP 30 Rockefeller Plaza New York, NY 10112 USA Tel: 212 ~~436 2000~~492 4000 Fax: 212 ~~436 5000~~489 1687 www.deloitte.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the ~~Board~~shareholders and the board of ~~Directors~~directors of

New Mountain Finance Corporation

~~New York, New York~~

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated statement of assets and liabilities of New Mountain Finance Corporation and subsidiaries (the “Company”), including the consolidated schedule of investments, as of ~~September~~June 30, ~~2017,~~2019, and the related consolidated statements of operations ~~for the three-month and nine-month periods ended September 30, 2017 and 2016,~~ and changes in net assets for the three-month and six-month periods ended June 30, 2019 and 2018, and cash flows for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2017~~2019 and ~~2016. These~~2018, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial ~~statements are~~information for it to be in conformity with accounting principles generally accepted in the ~~responsibility~~United States of ~~the Company's management.~~

America.

We ~~conducted our reviews~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated statement of assets and liabilities of the Company, including the consolidated schedule of investments, as of December 31, 2018, and the related consolidated statements of operations, changes in net assets and cash flows for the year then ended (not presented herein); and in our report dated February 27, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities as of December 31, 2018, is fairly stated, in all material respects, in relation to the consolidated statement of assets and liabilities from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of assets and liabilities of New Mountain Finance Corporation and subsidiaries as of December 31, 2016, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (not presented herein); and in our report dated February 28, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities as of December 31, 2016 is fairly stated, in all material respects, in relation to the consolidated statement of assets and liabilities from which it has been derived.

/s/DELOITTE & TOUCHE LLP

August 7, 2019

~~November 7, 2017~~


Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information in management's discussion and analysis of financial condition and results of operations relates to New Mountain Finance Corporation, including its wholly-owned direct and indirect subsidiaries (collectively, "we", "us", "our", "NMFC" or the "Company").

Forward-Looking Statements

The information contained in this section should be read in conjunction with the financial data and consolidated financial statements and notes thereto appearing elsewhere in this report. Some of the statements in this report (including in the following discussion) constitute forward-looking statements, which relate to future events or our future performance or our financial condition. The forward-looking statements contained in this section involve a number of risks and uncertainties, including:

statements concerning the impact of a protracted decline in the liquidity of credit markets;

the general economy, including interest and inflation rates, and its impact on the industries in which we invest;

our future operating results, our business prospects and the adequacy of our cash resources and working capital;

the ability of our portfolio companies to achieve their objectives;

our ability to make investments consistent with our investment objectives, including with respect to the size, nature and terms of our investments;

the ability of New Mountain Finance Advisers BDC, L.L.C. (the "Investment Adviser") or its affiliates to attract and retain highly talented professionals;

actual and potential conflicts of interest with the Investment Adviser and New Mountain Capital ~~L.L.C. ("New Mountain Capital", defined as~~Group, L.P. (together with New Mountain Capital, ~~Group,~~ L.L.C. and its ~~affiliates);~~affiliates, "New Mountain Capital") whose ultimate owners include Steven B. Klinsky and related and other vehicles; and

the risk factors set forth in Item 1A.—Risk Factors contained in our annual report on Form 10-K for the year ended December 31, ~~2016.~~2018 and in this quarterly report on Form 10-Q.

Forward-looking statements are identified by their use of such terms and phrases such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “project”, “seek”, “should”, “target”, “will”, “would” or similar expressions. Actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors set forth in Item 1A.—Risk Factors contained in our annual report on Form 10-K for the year ended December 31, ~~2016.~~2018 and in this quarterly report on Form 10-Q.

We have based the forward-looking statements included in this report on information available to us on the date of this report. We assume no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Although we undertake no obligation to revise or update any forward-looking statements, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the United States Securities and Exchange Commission (the "SEC"), including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.

Overview

We are a Delaware corporation that was originally incorporated on June 29, 2010 and completed our initial public offering ("IPO") on May 19, 2011. We are a closed-end, non-diversified management investment company that has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). ~~As such, we are obligated to comply with certain regulatory requirements.~~ We have elected to be treated, and intend to comply with the requirements to continue to qualify annually, as a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). NMFC is also registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act"). Since our IPO, and through ~~September~~June 30, ~~2017,~~2019, we raised approximately ~~$614.6~~$673.9 million in net proceeds from additional offerings of our common stock.

The Investment Adviser is a wholly-owned subsidiary of New Mountain Capital. New Mountain Capital is a firm with a track record of investing in the middle market. New Mountain Capital focuses on investing in defensive growth companies across its private equity, public equity and credit investment vehicles. The Investment Adviser manages our day-to-day operations and provides us with investment advisory and management services. The Investment Adviser also manages other funds that may have investment mandates that are similar, in whole or in part, to ours. New Mountain Finance Administration,

L.L.C. (the "Administrator”), a wholly-owned subsidiary of New Mountain Capital, provides the administrative services necessary to conduct our day-to-day operations.

We have established the following wholly-owned direct and indirect subsidiaries:

~~Our wholly-owned subsidiary,~~ New Mountain Finance Holdings, L.L.C. (“("NMF ~~Holdings”~~Holdings" or the "Predecessor Operating Company") and New Mountain Finance DB, L.L.C. ("NMFDB"), ~~is a Delaware limited liability company~~ whose assets are used to secure NMF Holdings’ credit ~~facility.~~ facility and NMFDB’s credit facility, respectively;

NMF Ancora Holdings Inc. (“("NMF ~~Ancora”~~Ancora"), NMF QID ~~NGL~~ Holdings, Inc. (“("NMF ~~QID”~~QID") and NMF YP Holdings Inc. (“("NMF ~~YP”~~YP"), ~~our wholly-owned subsidiaries, are structured as Delaware entities that~~which serve as tax blocker corporations ~~which hold~~by holding equity or equity-like investments in portfolio companies organized as limited liability companies (or other forms of pass-through entities)~~. We~~; we consolidate our tax blocker corporations for accounting ~~purposes. The~~purposes but the tax blocker corporations are not consolidated for income tax purposes and may incur income tax expense as a result of their ownership of the portfolio ~~companies. Additionally, our wholly-owned subsidiary,~~ companies; and

New Mountain Finance Servicing, L.L.C. (“("NMF ~~Servicing”~~Servicing"), which serves as the administrative agent on certain investment transactions. New Mountain Finance SBIC, L.P. (“SBIC I”) and its general partner, New Mountain Finance SBIC G.P., L.L.C. (“SBIC I GP”), were organized in Delaware as a limited partnership and limited liability company, respectively. During the nine months ended September 30, 2017, New Mountain Finance SBIC II, L.P. (“SBIC II”) and its general partner, New Mountain Finance SBIC II G.P., L.L.C. (“SBIC II GP”), were organized in Delaware as a limited partnership and limited liability company, respectively. SBIC I, SBIC I GP, SBIC II and SBIC II GP are our consolidated wholly-owned direct and indirect subsidiaries. SBIC I received a license from the United States ("U.S.") Small Business Administration (the “SBA”) to operate as a small business investment company (“SBIC”) under Section 301(c) of the Small Business Investment Act of 1958, as amended (the “1958 Act”). Our wholly-owned subsidiary, New Mountain Net Lease Corporation ("NMNLC"), a Maryland corporation, was formed to acquire commercial real properties that are subject to "triple net" leases and intends to qualify as a real estate investment trust, or REIT, within the meaning of Section 856(a) of the Code.

Our investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. ~~Our~~The first lien debt may include traditional first lien senior secured loans or unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and subordinated loans. Unitranche loans will expose us to the risks associated with second lien and subordinated loans to the extent we invest in the “last out” tranche. In some cases, our investments may also include equity interests.

Our primary focus is in the debt of defensive growth companies, which are defined as generally exhibiting the following characteristics: (i) sustainable secular growth drivers, (ii) high barriers to competitive entry, (iii) high free cash flow after capital expenditure and working capital needs, (iv) high returns on assets and (v) niche market dominance. Similar to us, SBIC II's and SBIC II's investment ~~objective is~~objectives are to generate current income and capital appreciation under our investment criteria. However, SBIC II's and SBIC II's investments must be in SBA eligible ~~companies.~~small businesses. Our portfolio may be concentrated in a limited number of industries. As of ~~September~~June 30, ~~2017,~~2019, our top five industry concentrations were business services, software, healthcare services, ~~consumer services~~education and ~~distribution & logistics.~~investment funds (which includes our investments in our joint ventures).

As of ~~September~~June 30, ~~2017,~~2019, our net asset value was ~~$1,032.1~~approximately $1,080.9 million and our portfolio had a fair value of approximately ~~$1,846.0~~$2,643.1 million in 82101 portfolio companies, with a weighted average yield to maturity at cost for income producing investments ("~~Yield to Maturity~~YTM at Cost") of approximately ~~10.6%~~9.4% and a weighted average yield to maturity at cost for all investments ("YTM at Cost for Investments") of approximately 9.4%. ~~This Yield to Maturity~~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. ~~This~~The YTM at Cost for Investments calculation ~~excludes~~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. ~~Yield to Maturity~~YTM at Cost ~~uses~~and YTM at Cost for Investments use the London Interbank Offered Rate ("LIBOR") curves at each quarter's end date. The actual yield to maturity may be higher or lower due to the future selection of the LIBOR contracts by the individual companies in our portfolio or other factors.

Recent Developments

On ~~October 24, 2017,~~July 11, 2019, we ~~entered into~~completed a public offering of 6,900,000 shares of our common stock at a public offering price of $13.68 per share. Our Investment Adviser paid a $0.39 per share portion of the ~~Third Amended~~$0.42 per share underwriters' sales load such that we received net proceeds of $13.65 per share in this offering. All payments made by our Investment Adviser are not subject to reimbursement by us. We received total net proceeds of approximately $94.2 million in connection with this offering.

Due to the untimely death of Kurt J. Wolfgruber on June 17, 2019, as of June 30, 2019, our Board of Directors does not consist of a majority of non-interested persons, as such term is defined in Section 2(a)(19) of the 1940 Act. However, in

accordance with Section 56(b) of the 1940 Act, the requirement to have a majority of non-interested persons on our Board of Directors is suspended for 90 days. We are actively searching for a new non-interested person to add to our Board of Directors and ~~Restated Loan and Security Agreement (together with~~expect to have a Board of Directors that consists of a majority of non-interested persons within the ~~exhibits and schedules thereto,~~time period prescribed by the ~~“New Holdings Credit Facility”), by and among us,~~1940 Act. Moreover, Rome G. Arnold replaced Mr. Wolfgruber as the collateral manager, NMF Holdings, as the borrower, Wells Fargo Bank, National Association, as the administrative agent, the lenders party thereto, and Wells Fargo Bank, as collateral custodian. The New Holdings Credit Facility effectively amends and restates the Holdings Credit Facility. The New Holdings Credit Facility has a revolving period ending on October 24, 2020 and matures on October 24, 2022. With the closingChairman of ~~the New Holdings Credit Facility, we broadened~~ our lender group, with Raymond James Bank, N.A., State Street Bank and Trust Company, NBH Bank, and State Bank and Trust Company joining the facility, making commitments and advances aggregating $85.0 million. The maximum amount of revolving borrowing available under the New Holdings Credit Facility remains $495.0 million.Audit Committee.

On October 31, 2017, we announced that our wholly owned subsidiary, SBIC II, received approval for a license from the SBA to operate as a SBIC. This is the second SBIC license granted to us through our SBIC subsidiaries. As an SBIC, SBIC II will be subject to a variety of regulations and oversight by the SBA concerning, among other things, the size and nature of the companies in which it may invest as well as the structure of those investments.

~~On November 2, 2017,~~August 1, 2019, our board of directors declared a ~~fourth~~third quarter ~~2017~~2019 distribution of $0.34 per share payable on ~~December 28, 2017~~September 27, 2019 to holders of record as of ~~December 15, 2017.~~September 13, 2019.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies.

Basis of Accounting

We consolidate our wholly-owned direct and indirect subsidiaries: NMF Holdings, NMF Servicing, NMNLC, NMFDB, SBIC I, SBIC I GP, SBIC II, SBIC II GP, NMF Ancora, NMF QID and NMF YP. We are an investment company following accounting and reporting guidance as described in Accounting Standards Codification Topic 946, Financial Services—Investment Companies, ("ASC 946").

Valuation and Leveling of Portfolio Investments

At all times consistent with GAAP and the 1940 Act, we conduct a valuation of assets, which impacts our net asset value.

We value our assets on a quarterly basis, or more frequently if required under the 1940 Act. In all cases, our board of directors is ultimately and solely responsible for determining the fair value of our portfolio investments on a quarterly basis in good faith, including investments that are not publicly traded, those whose market prices are not readily available and any other situation where our portfolio investments require a fair value determination. Security transactions are accounted for on a trade date basis. Our quarterly valuation procedures are set forth in more detail below:


(1)	Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.


(2)	Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

Bond quotes are obtained through independent pricing services. Internal reviews are performed by the investment professionals of the Investment Adviser to ensure that the quote obtained is representative of fair value in accordance with GAAP and, if so, the quote is used. If the Investment Adviser is unable to sufficiently validate the quote(s) internally and if the investment's par value or its fair value exceeds the materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below); and


b.	For investments other than bonds, we look at the number of quotes readily available and perform the following procedures:


i.	Investments for which two or more quotes are received from a pricing service are valued using the mean of the mean of the bid and ask of the quotes obtained;

ii.

Investments for which one quote is received from a pricing service are validated internally. The investment professionals of the Investment Adviser analyze the market quotes obtained using an array of valuation methods (further described below) to validate the fair value. If the Investment Adviser is unable to sufficiently validate the quote internally and if the investment's par value or its fair value exceeds the materiality threshold, the investment is valued similarly to those assets with no readily available quotes (see (3) below).


(3)	Investments for which quotations are not readily available through exchanges, pricing services, brokers, or dealers are valued through a multi-step valuation process:


a.	Each portfolio company or investment is initially valued by the investment professionals of the Investment Adviser responsible for the credit monitoring;


b.	Preliminary valuation conclusions will then be documented and discussed with our senior management;


c.	If an investment falls into (3) above for four consecutive quarters and if the investment's par value or its fair value exceeds the materiality threshold, then at least once each fiscal year, the valuation for each portfolio investment for which we do not have a readily available market quotation will be reviewed by an independent valuation firm engaged by our board of directors; and


d.	When deemed appropriate by our management, an independent valuation firm may be engaged to review and value investment(s) of a portfolio company, without any preliminary valuation being performed by the Investment Adviser. The investment professionals of the Investment Adviser will review and validate the value provided.

The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period and the fluctuations could be material.

GAAP fair value measurement guidance classifies the inputs used in measuring fair value into three levels as follows:

Level I—Quoted prices (unadjusted) are available in active markets for identical investments and we have the ability to access such quotes as of the reporting date. The type of investments which would generally be included in Level I include active exchange-traded equity securities and exchange-traded derivatives. As required by Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), we, to the extent that we hold such investments, do not adjust the quoted price for these investments, even in situations where we hold a large position and a sale could reasonably impact the quoted price.

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);

Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

Level III—Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment.

The inputs into the determination of fair value require significant judgment or estimation by management and consideration of factors specific to each investment. A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in the transfer of certain investments within the fair value hierarchy from period to period. ~~Reclassifications impacting the fair value hierarchy are reported as transfers in/out of the respective leveling categories as of the beginning of the period in which the reclassifications occur.~~

The following table summarizes the levels in the fair value hierarchy that our portfolio investments fall into as of ~~September~~June 30, ~~2017:~~2019:


(in thousands)	Total		Level I		Level II		Level III		Total		Level I		Level II		Level III
First lien	$	770,238	$	—	$	235,351	$	534,887	$	1,394,329	$	—	$	196,176	$	1,198,153
Second lien	679,893		—		305,125		374,768		722,940		—		392,544		330,396
Subordinated	69,202		—		43,494		25,708		69,519		—		25,934		43,585
Equity and other	326,710		23		—		326,687		456,308		—		—		456,308
Total investments	$	1,846,043	$	23	$	583,970	$	1,262,050	$	2,643,096	$	—	$	614,654	$	2,028,442

We generally use the following framework when determining the fair value of investments where there are little, if any, market activity or observable pricing inputs. We typically determine the fair value of our performing debt investments utilizing an income approach. Additional consideration is given using a market based approach, as well as reviewing the overall underlying portfolio company's performance and associated financial risks. The following outlines additional details on the approaches considered:

Company Performance, Financial Review, and Analysis: Prior to investment, as part of our due diligence process, we evaluate the overall performance and financial stability of the portfolio company. Post investment, we analyze each portfolio company's current operating performance and relevant financial trends versus prior year and budgeted results, including, but not limited to, factors affecting its revenue and earnings before interest, taxes, depreciation, and amortization ("EBITDA") growth, margin trends, liquidity position, covenant compliance and changes to its capital structure. We also attempt to identify and subsequently track any developments at the portfolio company, within its customer or vendor base or within the industry or the macroeconomic environment, generally, that may alter any material element of our original investment thesis. This analysis is specific to each portfolio company. We leverage the knowledge gained from our original due diligence process, augmented by this subsequent monitoring, to continually refine our outlook for each of our portfolio companies and ultimately form the valuation of our investment in each portfolio company. When an external event such as a purchase transaction, public offering or subsequent sale occurs, we will consider the pricing indicated by the external event to corroborate the private valuation.

For debt investments, we may employ the Market Based Approach (as described below) to assess the total enterprise value of the portfolio company, in order to evaluate the enterprise value coverage of our debt investment. For equity investments or in cases where the Market Based Approach implies a lack of enterprise value coverage for the debt investment, we may additionally employ a discounted cash flow analysis based on the free cash flows of the portfolio company to assess the total enterprise value.

After enterprise value coverage is demonstrated for our debt investments through the method(s) above, the Income Based Approach (as described below) may be employed to estimate the fair value of the investment.

Market Based Approach: We may estimate the total enterprise value of each portfolio company by utilizing market value cash flow (EBITDA) multiples of publicly traded comparable companies and comparable transactions. We consider numerous factors when selecting the appropriate companies whose trading multiples are used to value our portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, and relevant risk factors, as well as size, profitability and growth expectations. We may apply an average of various relevant comparable company EBITDA multiples to the portfolio company's latest twelve month ("LTM") EBITDA or projected EBITDA to calculate the enterprise value of the portfolio company. Significant increases or decreases in the EBITDA multiple will result in an increase or decrease in enterprise value, which may result in an increase or decrease in the fair value estimate of the investment. In applying the market based approach as of ~~September~~June 30, ~~2017,~~2019, we used the relevant EBITDA multiple ranges set forth in the table below to determine the enterprise value of our portfolio companies. We believe these were reasonable ranges in light of current comparable company trading levels and the specific portfolio companies involved.

Income Based Approach: We also may use a discounted cash flow analysis to estimate the fair value of the investment. Projected cash flows represent the relevant security's contractual interest, fee and principal payments plus the assumption of full principal recovery at the investment's expected maturity date. These cash flows are discounted at a rate established utilizing a yield calibration approach, which incorporates changes in the credit quality (as measured by relevant statistics) of the portfolio company, as compared to changes in the yield associated with comparable credit quality market indices, between the date of origination and the valuation date. Significant increases or decreases in the discount rate would result in a decrease or increase in the fair value measurement. In applying the income based approach as of ~~September~~June 30, ~~2017,~~2019, we used the discount ranges set forth in the table below to value investments in our portfolio companies.

The unobservable inputs used in the fair value measurement of our Level III investments as of ~~September~~June 30, ~~2017~~2019 were as follows:


(in thousands)					Range										Range
Type	Fair Value as of September 30, 2017		Approach	Unobservable Input	Low		High		Weighted Average		Fair Value as of June 30, 2019		Approach	Unobservable Input	Low		High		Weighted Average
First lien	$	467,260	Market & income approach	EBITDA multiple	2.0x		17.0x		10.8x		$	948,912	Market & income approach	EBITDA multiple	2.0x		32.0x		12.9x
				Revenue multiple	0.8x		8.0x		3.9x					Revenue multiple	3.5x		11.0x		6.6x
				Discount rate	6.0	%	11.9	%	8.7	%				Discount rate	6.1	%	15.3	%	8.6	%
	24,264		Market quote	Broker quote	N/A		N/A		N/A		160,107		Market quote	Broker quote	N/A		N/A		N/A
	43,363		Other	N/A(1)	N/A		N/A		N/A		89,134		Other	N/A(1)	N/A		N/A		N/A
Second lien	249,219		Market & income approach	EBITDA multiple	8.5x		17.0x		11.6x		83,980		Market & income approach	EBITDA multiple	8.5x		13.5x		10.7x
				Revenue multiple	5.3x		6.2x		5.8x					Discount rate	9.9	%	20.0	%	12.6	%
				Discount rate	9.4	%	12.5	%	10.4	%	214,656		Market quote	Broker quote	N/A		N/A		N/A
	125,549		Market quote	Broker quote	N/A		N/A		N/A		31,760		Other	N/A(1)	N/A		N/A		N/A
Subordinated	25,708		Market & income approach	EBITDA multiple	4.0x		10.5x		8.7x		43,585		Market & income approach	EBITDA multiple	5.0x		12.0x		9.8x
				Revenue multiple	0.5x		1.0x		0.8x					Discount rate	11.0	%	22.0	%	16.7	%
				Discount rate	9.1	%	15.0	%	12.1	%
Equity and other	320,072		Market & income approach	EBITDA multiple	2.5x		15.0x		10.4x		455,481		Market & income approach	EBITDA multiple	0.3x		19.5x		11.0x
				Revenue multiple	0.5x		1.0x		0.7x					Discount rate	6.4	%	26.1	%	13.3	%
				Discount rate	7.3	%	23.9	%	12.8	%	827		Black Scholes analysis	Expected life in years	6.8		6.8		6.8
	895		Black Scholes analysis	Expected life in years	8.5		8.5		8.5					Volatility	29.2	%	29.2	%	29.2	%
				Volatility	39.4	%	39.4	%	39.4	%				Discount rate	2.1	%	2.1	%	2.1	%
				Discount rate	2.1	%	2.1	%	2.1	%	$	2,028,442
	5,720		Other	N/A(1)	N/A		N/A		N/A
	$	1,262,050


(1)	Fair value was determined based on transaction pricing or recent acquisition or sale as the best measure of fair value with no material changes in operations of the related portfolio company since the transaction date.

NMFC Senior Loan Program I LLC

NMFC Senior Loan Program I LLC ("SLP I") was formed as a Delaware limited liability company on May 27, 2014 and commenced operations on June 10, 2014. SLP I is a portfolio company held by us. SLP I is structured as a private investment fund, in which all of the investors are qualified purchasers, as such term is defined under the 1940 Act. Transfer of interests in SLP I is subject to restrictions and, as a result, such interests are not readily marketable. SLP I operates under a limited liability company agreement (the "SLP I Agreement") and will continue in existence until ~~June 10, 2019,~~August 31, 2021, subject to earlier termination pursuant to certain terms of the SLP I Agreement. The term may be extended ~~for up to one year~~ pursuant to certain terms of the SLP I Agreement. SLP ~~I had a three year re-investment period. In June 2017, the~~I's re-investment period ~~was extended for one additional year.~~is currently until August 31, 2019. SLP I invests in senior secured loans issued by companies within our core industry verticals. These investments are typically broadly syndicated first lien loans.

SLP I is capitalized with $93.0 million of capital commitments and $265.0 million of debt from a revolving credit facility and is managed by us. Our capital commitment is $23.0 million, representing less than 25.0% ownership, with third party investors representing the remaining capital commitments. As of ~~September~~June 30, ~~2017,~~2019, SLP I had total investments with an aggregate fair value of approximately ~~$336.7~~$341.2 million, debt outstanding of ~~$244.2~~$233.4 million and capital that had been called and funded of $93.0 million. As of December 31, ~~2016,~~2018, SLP I had total investments with an aggregate fair value of approximately ~~$348.7~~$327.2 million, debt outstanding of ~~$256.5~~$242.6 million and capital that had been called and funded of $93.0 million. Our investment in SLP I is disclosed on our Consolidated Schedule of Investments as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016.~~

2018.

We, as an investment adviser registered under the Advisers Act, act as the collateral manager to SLP I and are entitled to receive a management fee for our investment management services provided to SLP I. As a result, SLP I is classified as our affiliate. No management fee is charged on our investment in SLP I in connection with the administrative services provided to SLP I. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, we earned approximately $0.3 million and ~~$0.9~~$0.6 million, respectively, in management fees related to SLP I, which is included in other income. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, we earned approximately $0.3 million and ~~$0.9~~$0.6 million, respectively, in management fees related to SLP I, which is included in other income. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately $0.3 million and $0.3 million, respectively, of management fees related to SLP I was included in receivable from affiliates. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, we earned approximately $0.8 million and ~~$2.7~~$1.5 million, respectively, of dividend income related to SLP I, which is included in

dividend income. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, we earned approximately ~~$1.1~~$0.8 million and ~~$2.9~~$1.6 million, respectively, of dividend income related to SLP I, which is included in dividend income. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately $0.8 million and ~~$0.9~~$0.8 million, respectively, of dividend income related to SLP I was included in interest and dividend receivable.

NMFC Senior Loan Program II LLC

NMFC Senior Loan Program II LLC ("SLP II") was formed as a Delaware limited liability company on March 9, 2016 and commenced operations on April 12, 2016. SLP II is structured as a private joint venture investment fund between us and SkyKnight Income, LLC (“SkyKnight”) and operates under a limited liability company agreement (the "SLP II Agreement"). The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals. These investments are typically broadly syndicated first lien loans. All investment decisions must be unanimously approved by the board of managers of SLP II, which has equal representation from us and SkyKnight. SLP ~~II has a three year~~II's investment period is currently until April 12, 2020 and SLP II will continue in existence until April 12, ~~2021.~~2022. The term may be extended for up to one year pursuant to certain terms of the SLP II Agreement.

SLP II is capitalized with equity contributions which were called from its members, on a pro-rata basis based on their equity commitments, as transactions ~~were~~are completed. Any decision by SLP II to call down on capital commitments ~~required~~requires approval by the board of managers of SLP II. As of ~~September~~June 30, ~~2017,~~2019, we and SkyKnight have committed and contributed $79.4 million and $20.6 million, respectively, of equity to SLP II. Our investment in SLP II is disclosed on our Consolidated Schedule of Investments as of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016.~~2018.

On April 12, 2016, SLP II closed its $275.0 million revolving credit facility with Wells Fargo Bank, National Association, which matures on April 12, ~~2021~~2022 and bears interest at a rate of LIBOR plus ~~1.75%~~1.60% per annum. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, SLP II had total investments with an aggregate fair value of approximately ~~$359.3~~$364.3 million and ~~$361.7~~$336.9 million, respectively, and debt outstanding under its credit facility of ~~$229.5~~$267.7 million and ~~$250.0~~$243.2 million, respectively. As of June 30, 2019 and December 31, 2018, none of SLP II's investments were on non-accrual. Additionally, as of June 30, 2019 and December 31, 2018, SLP II had unfunded commitments in the form of delayed draws of $4.1 million and $5.9 million, respectively. Below is a summary of SLP II's portfolio, along with a listing of the individual investments in SLP II's portfolio as of June 30, 2019 and December 31, 2018:



(in thousands)	June 30, 2019			December 31, 2018
First lien investments (1)	$	373,248		$	348,577
Weighted average interest rate on first lien investments (2)	6.67		%	6.84		%
Number of portfolio companies in SLP II	36			31
Largest portfolio company investment (1)	$	17,063		$	17,150
Total of five largest portfolio company investments (1)	$	79,559		$	80,766


(1)	Reflects principal amount or par value of investments.


(2)	Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

The following table is a listing of the individual ~~loans~~investments in SLP II's portfolio as of ~~September~~June 30, ~~2017:~~2019:

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair
Value (2)
Funded Investments - First lien: (in thousands) (in thousands) (in thousands)
ADG, LLC Healthcare Services 6.00% (L + 4.75%) 9/28/2023 $ 17,077
$ 16,927
$ 16,992
ASG Technologies Group, Inc. Software 6.06% (L + 4.75%) 7/31/2024 7,500
7,463
7,594
Beaver-Visitec International Holdings, Inc. Healthcare Products 6.33% (L + 5.00%) 8/21/2023 14,850
14,721
14,850
Cvent, Inc. Software 5.24% (L + 4.00%) 11/29/2023 9,950
9,860
10,037
DigiCert Holdings, Inc. Business Services 6.24% (L + 5.00%) 10/21/2021 14,739
14,666
14,831
DigiCert Holdings, Inc. Business Services 5.98% (L + 4.75%) 10/31/2024 10,000
9,950
10,109
Eiger Acquisition B.V. (Eiger Co-Borrower, LLC) Software 6.52% (L + 5.25%) 2/18/2022 14,886
14,753
14,988
Emerald 2 Limited Business Services 5.33% (L + 4.00%) 5/14/2021 1,266
1,207
1,241
Evo Payments International, LLC Business Services 6.24% (L + 5.00%) 12/22/2023 17,413
17,333
17,649
Explorer Holdings, Inc. Healthcare Services 5.06% (L + 3.75%) 5/2/2023 2,948
2,923
2,968
Globallogic Holdings Inc. Business Services 5.83% (L + 4.50%) 6/20/2022 9,701
9,632
9,780
Greenway Health, LLC Software 5.58% (L + 4.25%) 2/16/2024 14,963
14,893
15,025
Hyperion Insurance Group Limited Business Services 5.25% (L + 4.00%) 4/29/2022 10,694
10,550
10,834
Idera, Inc. Software 6.24% (L + 5.00%) 6/28/2024 12,650
12,526
12,655
J.D. Power and Associates Business Services 5.58% (L + 4.25%) 9/7/2023 13,391
13,340
13,466
Keystone Acquisition Corp. Healthcare Services 6.58% (L + 5.25%) 5/1/2024 5,400
5,348
5,404
Market Track, LLC Business Services 5.58% (L + 4.25%) 6/5/2024 11,970
11,912
11,970
McGraw-Hill Global Education Holdings, LLC Education 5.24% (L + 4.00%) 5/4/2022 9,875
9,836
9,716
Medical Solutions Holdings, Inc. Healthcare Services 5.58% (L + 4.25%) 6/14/2024 6,983
6,949
7,044
Ministry Brands, LLC Software 6.24% (L + 5.00%) 12/2/2022 2,143
2,133
2,163
Ministry Brands, LLC Software 6.24% (L + 5.00%) 12/2/2022 7,787
7,753
7,859
Navex Global, Inc. Software 5.49% (L + 4.25%) 11/19/2021 14,935
14,751
14,991
Peraton Corp. (fka MHVC Acquisition Corp.) Federal Services 6.49% (L + 5.25%) 4/29/2024 10,474
10,424
10,552
Poseidon Intermediate, LLC Software 5.49% (L + 4.25%) 8/15/2022 14,909
14,906
14,984
Quest Software US Holdings Inc. Software 7.24% (L + 6.00%) 10/31/2022 9,924
9,794
10,069
Salient CRGT Inc. Federal Services 6.99% (L + 5.75%) 2/28/2022 14,741
14,608
14,704
Severin Acquisition, LLC Software 5.99% (L + 4.75%) 7/30/2021 14,925
14,860
14,850
Shine Acquisitoin Co. S.à.r.l / Boing US Holdco Inc. Consumer Services 4.73% (L + 3.50%) 10/3/2024 15,000
14,963
15,061
TMK Hawk Parent, Corp. Distribution & Logistics 4.77% (L + 3.50%) 8/28/2024 1,675
1,671
1,689
University Support Services LLC (St. George's University Scholastic Services LLC) Education 5.49% (L + 4.25%) 7/6/2022 1,928
1,928
1,936
Vencore, Inc. (fka SI Organization, Inc., The) Federal Services 6.08% (L + 4.75%) 11/23/2019 10,715
10,700
10,877
WP CityMD Bidco LLC Healthcare Services 5.33% (L + 4.00%) 6/7/2024 15,000
14,964
15,094
Zywave, Inc. Software 6.32% (L + 5.00%) 11/17/2022 17,369
17,293
17,282
Total Funded Investments $ 357,781
$ 355,537
$ 359,264
Unfunded Investments - First lien:
TMK Hawk Parent, Corp. Distribution & Logistics — 3/28/2018 $ 75
$ —
$ 1
Total Unfunded Investments $ 75
$ —
$ 1
$ 357,856
$ 355,537
$ 359,265



Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Funded Investments - First lien:				(in thousands)		(in thousands)			(in thousands)
Access CIG, LLC	Business Services	6.19% (L + 3.75%)	2/27/2025	$	9,883	$	9,841		$	9,840
ADG, LLC	Healthcare Services	7.45% (L + 4.75% + 0.50% PIK)	9/28/2023	16,032		15,927			15,792
Bearcat Buyer, Inc.	Healthcare Services	6.56% (L + 4.25%)	7/9/2026	1,382		1,375			1,375
Brave Parent Holdings, Inc.	Software	6.58% (L + 4.00%)	4/18/2025	15,345		15,296			15,259
CentralSquare Technologies, LLC	Software	6.15% (L + 3.75%)	8/29/2025	14,925		14,891			14,771
CHA Holdings, Inc.	Business Services	6.83% (L + 4.50%)	4/10/2025	10,751		10,709			10,738
CHA Holdings, Inc.	Business Services	6.81% (L + 4.50%)	4/10/2025	2,057		2,047			2,055
CommerceHub, Inc.	Software	6.15% (L + 3.75%)	5/21/2025	2,475		2,464			2,438
Drilling Info Holdings, Inc.	Business Services	6.65% (L + 4.25%)	7/30/2025	14,770		14,712			14,696
Edgewood Partners Holdings LLC	Business Services	6.65% (L + 4.25%)	9/6/2024	6,381		6,321			6,365
Fastlane Parent Company, Inc.	Distribution & Logistics	6.83% (L + 4.50%)	2/4/2026	3,491		3,424			3,443
GOBP Holdings, Inc.	Retail	6.14% (L + 3.75%)	10/22/2025	1,639		1,635			1,640
Greenway Health, LLC	Software	6.08% (L + 3.75%)	2/16/2024	14,700		14,648			13,046
Idera, Inc.	Software	6.91% (L + 4.50%)	6/28/2024	14,928		14,821			14,966
Institutional Shareholder Services Inc.	Business Services	6.83% (L + 4.50%)	3/5/2026	13,965		13,829			13,860
J.D. Power (fka J.D. Power and Associates)	Business Services	6.15% (L + 3.75%)	9/7/2023	14,885		14,847			14,848
Keystone Acquisition Corp.	Healthcare Services	7.58% (L + 5.25%)	5/1/2024	5,306		5,266			5,194
LSCS Holdings, Inc.	Healthcare Services	6.58% (L + 4.25%)	3/17/2025	7,316		7,308			7,280
LSCS Holdings, Inc.	Healthcare Services	6.58% (L + 4.25%)	3/17/2025	1,889		1,886			1,879
Market Track, LLC	Business Services	6.65% (L + 4.25%)	6/5/2024	11,760		11,716			10,584
Medical Solutions Holdings, Inc.	Healthcare Services	6.15% (L + 3.75%)	6/14/2024	4,409		4,393			4,409
Ministry Brands, LLC	Software	6.33% (L + 4.00%)	12/2/2022	12,222		12,181			12,222
Ministry Brands, LLC	Software	6.33% (L + 4.00%)	12/2/2022	2,105		2,099			2,105
Ministry Brands, LLC	Software	6.33% (L + 4.00%)	12/2/2022	884		880			884
NorthStar Financial Services Group, LLC	Software	5.60% (L + 3.25%)	5/25/2025	5,885		5,859			5,804
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	7.66% (L + 5.25%)	4/29/2024	10,290		10,252			10,226
Poseidon Intermediate, LLC	Software	6.66% (L + 4.25%)	8/15/2022	14,654		14,651			14,678
Premise Health Holding Corp.	Healthcare Services	5.83% (L + 3.50%)	7/10/2025	1,379		1,373			1,371
Project Accelerate Parent, LLC	Business Services	6.66% (L + 4.25%)	1/2/2025	14,813		14,751			14,775
PSC Industrial Holdings Corp.	Industrial Services	6.14% (L + 3.75%)	10/11/2024	10,343		10,261			10,327
Quartz Holding Company	Software	6.44% (L + 4.00%)	4/2/2026	4,000		3,980			3,995
Quest Software US Holdings Inc.	Software	6.83% (L + 4.25%)	5/16/2025	14,925		14,860			14,729
Salient CRGT Inc.	Federal Services	8.40% (L + 6.00%)	2/28/2022	13,321		13,244			12,789
Spring Education Group, Inc. (fka SSH Group Holdings, Inc.)	Education	6.83% (L + 4.25%)	7/30/2025	8,933		8,913			8,894
The Ultimate Software Group Inc.	Software	6.08% (L + 3.75%)	5/4/2026	5,000		4,988			5,014
Wirepath LLC	Distribution & Logistics	6.33% (L + 4.00%)	8/5/2024	14,888		14,888			14,813
WP CityMD Bidco LLC	Healthcare Services	5.83% (L + 3.50%)	6/7/2024	10,768		10,748			10,761
Wrench Group LLC	Consumer Services	6.45% (L + 4.25%)	4/30/2026	4,500		4,456			4,500
YI, LLC	Healthcare Services	6.33% (L + 4.00%)	11/7/2024	14,877		14,866			14,858
Zywave, Inc.	Software	7.58% (L + 5.00%)	11/17/2022	17,063		17,010			17,063
Total Funded Investments				$	369,139	$	367,616		$	364,286
Unfunded Investments - First lien:
Bearcat Buyer, Inc.	Healthcare Services	—	7/9/2021	$	284	$	(1	)	$	(1	)
CHA Holdings, Inc.	Business Services	—	10/10/2019	86		—			—
Drilling Info Holdings, Inc.	Business Services	—	7/30/2020	62		—			—
Edgewood Partners Holdings LLC	Business Services	—	7/31/2019	1,087		(11		)	(3		)
Ministry Brands, LLC	Software	—	10/18/2019	980		(5		)	—
Premise Health Holding Corp.	Healthcare Services	—	7/10/2020	110		—			(1		)
Wrench Group LLC	Consumer Services	—	4/30/2021	1,500		—			—
Total Unfunded Investments				$	4,109	$	(17	)	$	(5	)
Total Investments				$	373,248	$	367,599		$	364,281


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L). For each investment, the current interest rate provided reflects the rate in effect as of June 30, 2019.


(2)	Represents the fair value in accordance with ASC 820. Our board of directors does not determine the fair value of the investments held by SLP II.

The following table is a listing of the individual investments in SLP II's portfolio as of December 31, 2018:



Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Funded Investments - First lien				(in thousands)		(in thousands)			(in thousands)
Access CIG, LLC	Business Services	6.46% (L + 3.75%)	2/27/2025	$	8,825	$	8,785		$	8,605
ADG, LLC	Healthcare Services	7.63% (L + 4.75%)	9/28/2023	16,862		16,740			16,609
Beaver-Visitec International Holdings, Inc.	Healthcare Products	6.62% (L + 4.00%)	8/21/2023	14,664		14,492			14,517
Brave Parent Holdings, Inc.	Software	6.52% (L + 4.00%)	4/18/2025	15,422		15,369			14,902
CentralSquare Technologies, LLC	Software	6.27% (L + 3.75%)	8/29/2025	15,000		14,964			14,648
CHA Holdings, Inc.	Business Services	7.30% (L + 4.50%)	4/10/2025	10,805		10,760			10,774
CommerceHub, Inc.	Software	6.27% (L + 3.75%)	5/21/2025	2,488		2,476			2,419
Drilling Info Holdings, Inc.	Business Services	6.77% (L + 4.25%)	7/30/2025	12,242		12,190			12,196
Greenway Health, LLC	Software	6.56% (L + 3.75%)	2/16/2024	14,775		14,718			14,406
GOBP Holdings, Inc.	Retail	6.55% (L + 3.75%)	10/22/2025	2,500		2,494			2,438
Idera, Inc.	Software	7.03% (L + 4.50%)	6/28/2024	12,492		12,388			12,242
J.D. Power (fka J.D. Power and Associates)	Business Services	6.27% (L + 3.75%)	9/7/2023	14,962		14,920			14,588
Keystone Acquisition Corp.	Healthcare Services	8.05% (L + 5.25%)	5/1/2024	5,332		5,289			5,226
LSCS Holdings, Inc.	Healthcare Services	6.86% (L + 4.25%)	3/17/2025	5,321		5,312			5,294
LSCS Holdings, Inc.	Healthcare Services	6.89% (L + 4.25%)	3/17/2025	1,374		1,371			1,367
Market Track, LLC	Business Services	6.87% (L + 4.25%)	6/5/2024	11,820		11,772			11,347
Medical Solutions Holdings, Inc.	Healthcare Services	6.27% (L + 3.75%)	6/14/2024	4,432		4,413			4,343
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	2,116		2,109			2,116
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	600		597			600
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	12,285		12,238			12,285
NorthStar Financial Services Group, LLC	Software	6.10% (L + 3.50%)	5/25/2025	7,463		7,428			7,313
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	8.06% (L + 5.25%)	4/29/2024	10,342		10,301			10,084
Poseidon Intermediate, LLC	Software	6.78% (L + 4.25%)	8/15/2022	14,729		14,727			14,644
Premise Health Holding Corp.	Healthcare Services	6.55% (L + 3.75%)	7/10/2025	1,386		1,380			1,369
Project Accelerate Parent, LLC	Business Services	6.64% (L + 4.25%)	1/2/2025	14,887		14,821			14,663
PSC Industrial Holdings Corp.	Industrial Services	6.21% (L + 3.75%)	10/11/2024	10,395		10,307			10,161
Quest Software US Holdings Inc.	Software	6.78% (L + 4.25%)	5/16/2025	15,000		14,930			14,535
Salient CRGT Inc.	Federal Services	8.27% (L + 5.75%)	2/28/2022	13,509		13,418			13,306
Sierra Acquisition, Inc.	Food & Beverage	6.02% (L + 3.50%)	11/11/2024	3,713		3,696			3,685
SSH Group Holdings, Inc.	Education	6.77% (L + 4.25%)	7/30/2025	8,978		8,956			8,753
Wirepath LLC	Distribution & Logistics	6.71% (L + 4.00%)	8/5/2024	14,963		14,963			14,738
WP CityMD Bidco LLC	Healthcare Services	6.30% (L + 3.50%)	6/7/2024	10,823		10,801			10,620
YI, LLC	Healthcare Services	6.80% (L + 4.00%)	11/7/2024	15,064		15,053			14,971
Zywave, Inc.	Software	7.52% (L + 5.00%)	11/17/2022	17,150		17,091			17,150
Total Funded Investments				$	342,719	$	341,269		$	336,914
Unfunded Investments - First lien
Access CIG, LLC	Business Services	—	2/27/2019	$	1,108	$	—		$	(28	)
CHA Holdings, Inc.	Business Services	—	10/10/2019	2,143		(11		)	(6		)
Drilling Info Holdings, Inc.	Business Services	—	7/30/2020	1,230		(5		)	(10		)
Ministry Brands, LLC	Software	—	10/18/2019	1,267		(6		)	—
Premise Health Holding Corp.	Healthcare Services	—	7/10/2020	110		—			(1		)
Total Unfunded Investments				5,858		(22		)	(45		)
Total Investments				$	348,577	$	341,247		$	336,869


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L)~~, the Prime Rate (P) and the alternative base rate (Base). For each investment, the current interest rate provided reflects the rate in effect as of September 30, 2017.~~


~~(2)~~	~~Represents the fair value in accordance with ASC 820. Our board of directors does not determine the fair value of the investments held by SLP II.~~

~~The following table is a listing of the individual loans in SLP II's portfolio as of December 31, 2016:~~

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair
Value (2)
Funded Investments - First lien: (in thousands) (in thousands) (in thousands)
ADG, LLC Healthcare Services 5.75% (L + 4.75%) 9/28/2023 $ 17,207
$ 17,040
$ 17,121
AssuredPartners, Inc. Business Services 5.25% (L + 4.25%) 10/21/2022 11,862
11,847
12,058
Beaver-Visitec International Holdings, Inc. Healthcare Products 6.00% (L + 5.00%) 8/21/2023 14,962
14,819
14,963
Coinstar, LLC Consumer Services 5.25% (L + 4.25%) 9/27/2023 4,987
4,963
5,054
Cvent, Inc. Software 6.00% (L + 5.00%) 11/29/2023 10,000
9,901
10,125
DigiCert Holdings, Inc. Software 6.00% (L + 5.00%) 10/21/2021 14,900
14,814
14,881
Eiger Acquisition B.V. (Eiger Co-Borrower, LLC) Software 6.25% (L + 5.25%) 2/18/2022 10,507
10,350
10,402
Emerald 2 Limited Business Services 5.00% (L + 4.00%) 5/14/2021 1,277
1,206
1,174
Engility Corporation (fka TASC, Inc.) Federal Services 5.81% (Base + 4.72%) 8/14/2023 13,860
13,793
14,080
Evo Payments International, LLC Business Services 6.00% (L + 5.00%) 12/22/2023 17,500
17,413
17,602
Explorer Holdings, Inc. Healthcare Services 6.00% (L + 5.00%) 5/2/2023 4,975
4,929
5,028
Globallogic Holdings Inc. Business Services 5.50% (L + 4.50%) 6/20/2022 10,000
9,900
10,013
GOBP Holdings Inc. Retail 5.00% (L + 4.00%) 10/21/2021 14,955
14,816
14,985
Hyperion Insurance Group Limited Business Services 5.50% (L + 4.50%) 4/29/2022 14,401
14,179
14,476
J.D. Power and Associates Business Services 5.25% (L + 4.25%) 9/7/2023 9,975
9,927
10,075
Kronos Incorporated Software 5.00% (L + 4.00%) 11/1/2023 10,000
9,951
10,105
Masergy Holdings, Inc. Business Services 5.50% (L + 4.50%) 12/15/2023 7,500
7,463
7,563
McGraw-Hill Global Education Holdings, LLC Education 5.00% (L + 4.00%) 5/4/2022 9,950
9,905
9,971
Ministry Brands, LLC Software 6.00% (L + 5.00%) 12/2/2022 7,846
7,807
7,807
Mister Car Wash Holdings, Inc. Consumer Services 5.25% (L + 4.25%) 8/20/2021 8,312
8,250
8,354
Navex Global, Inc. Software 5.99% (L + 4.75%) 11/19/2021 14,933
14,718
14,858
nThrive, Inc. (fka Precyse Acquisition Corp.) Healthcare Services 6.50% (L + 5.50%) 10/20/2022 9,950
9,813
10,083
Poseidon Intermediate, LLC Software 5.25% (L + 4.25%) 8/15/2022 14,962
14,962
15,055
Quest Software US Holdings Inc. Software 7.00% (L + 6.00%) 10/31/2022 10,000
9,853
10,153
Rocket Software, Inc. Software 5.25% (L + 4.25%) 10/14/2023 14,962
14,817
15,129
SolarWinds Holdings, Inc. Software 5.50% (L + 4.50%) 2/3/2023 14,688
14,697
14,852
TTM Technologies, Inc. Business Products 5.25% (L + 4.25%) 5/31/2021 13,548
13,444
13,599
Vencore, Inc. (fka SI Organization, Inc., The) Federal Services 5.75% (L + 4.75%) 11/23/2019 10,801
10,780
10,942
Vision Solutions, Inc. Software 7.50% (Base + 6.50%) 6/16/2022 9,938
9,845
9,919
Vivid Seats LLC Business Services 6.75% (L + 5.75%) 10/12/2022 4,000
3,922
3,985
WD Wolverine Holdings, LLC Healthcare Services 6.50% (L + 5.50%) 10/17/2023 10,200
9,900
9,894
Zywave, Inc. Software 6.00% (L + 5.00%) 11/17/2022 17,500
17,414
17,413
Total Investments $ 360,458
$ 357,438
$ 361,719


~~(1)~~	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L), the Prime Rate (P) and the alternative base rate (Base). For each investment, the current interest rate provided reflects the rate in effect as of December 31, ~~2016.~~2018.


(2)	Represents the fair value in accordance with ASC 820. Our board of directors does not determine the fair value of the investments held by SLP II.


Selected Balance Sheet Information:	September 30, 2017			December 31, 2016			June 30, 2019			December 31, 2018
	(in thousands)			(in thousands)			(in thousands)			(in thousands)
Investments at fair value (cost of $355,537 and $357,438, respectively)	$	359,265		$	361,719
Receivable from unsettled securities sold	—			1,007
Investments at fair value (cost of $367,599 and $341,247, respectively)							$	364,281		$	336,869
Cash and other assets	6,838			10,138			8,792			7,620
Total assets	$	366,103		$	372,864		$	373,073		$	344,489

Credit facility	$	229,460		$	249,960		$	267,670		$	243,170
Deferred financing costs	(2,117		)	(2,565		)	(1,852		)	(1,374		)
Payable for unsettled securities purchased	28,080			24,862			3,861			—
Distribution payable	3,800			3,000			3,500			3,250
Other liabilities	2,792			3,350			2,872			2,869
Total liabilities	262,015			278,607			276,051			247,915

Members' capital	$	104,088		$	94,257		$	97,022		$	96,574
Total liabilities and members' capital	$	366,103		$	372,864		$	373,073		$	344,489


	Three Months Ended				Nine Months Ended
Selected Statement of Operations Information:	September 30, 2017		September 30, 2016		September 30, 2017			September 30, 2016(1)		Three Months Ended						Six Months Ended
										June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
	(in thousands)		(in thousands)		(in thousands)			(in thousands)		(in thousands)			(in thousands)			(in thousands)			(in thousands)
Interest income	$	5,858	$	2,698	$	16,661		$	3,326	$	6,345		$	6,134		$	12,568		$	11,764
Other income	27		114		343			163		32			36			58			58
Total investment income	5,885		2,812		17,004			3,489		6,377			6,170			12,626			11,822

Interest and other financing expenses	2,185		1,398		6,108			1,931		2,966			2,553			5,739			4,981
Other expenses	159		134		533			463		144			140			279			364
Total expenses	2,344		1,532		6,641			2,394		3,110			2,693			6,018			5,345
Less: expenses waived and reimbursed										(20		)	—			(20		)	—
Net expenses										3,090			2,693			5,998			5,345
Net investment income	3,541		1,280		10,363			1,095		3,287			3,477			6,628			6,477

Net realized gains on investments	223		229		2,145			263		253			180			261			633
Net change in unrealized appreciation (depreciation) of investments	88		1,863		(553		)	1,978
Net change in unrealized (depreciation) appreciation of investments										(487		)	(957		)	1,060			(280		)
Net increase in members' capital	$	3,852	$	3,372	$	11,955		$	3,336	$	3,053		$	2,700		$	7,949		$	6,830


~~(1)~~	~~SLP II commenced operations on April 12, 2016.~~

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, we earned approximately ~~$3.0~~$2.8 million and ~~$9.6~~$6.0 million, respectively, of dividend income related to SLP II, which is included in dividend income. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, we earned approximately ~~$1.2~~$3.2 million and ~~$1.2~~$5.8 million, respectively, of dividend income related to SLP II, which is included in dividend income. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately ~~$3.0~~$2.8 million and ~~$2.4~~$2.6 million, respectively, of dividend income related to SLP II was included in interest and dividend receivable.

We have determined that SLP II is an investment company under ASC 946; however, in accordance with such guidance we will generally not consolidate our investment in a company other than a wholly-owned investment company subsidiary. Furthermore, Accounting Standards Codification Topic 810, Consolidation("ASC 810"), concludes that in a joint venture where both members have equal decision making authority, it is not appropriate for one member to consolidate the joint venture since neither has control. Accordingly, we do not consolidate SLP II.

NMFC Senior Loan Program III LLC

Agreement"). The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals. These investments are typically broadly syndicated first lien loans. All investment decisions must be unanimously approved by the board of managers of SLP III, which has equal representation from us and SkyKnight II. SLP III has a five year investment period and will continue in existence until April 25, 2025. The investment period may be extended for up to one year pursuant to certain terms of the SLP III Agreement.

SLP III is capitalized with equity contributions which are called from its members, on a pro-rata basis based on their equity commitments, as transactions are completed. Any decision by SLP III to call down on capital commitments requires approval by the board of managers of SLP III. As of June 30, 2019, we and SkyKnight II have committed $100.0 million and $25.0 million, respectively, of equity to SLP III. As of June 30, 2019, the Company and SkyKnight II have contributed $80.0 million and $20.0 million, respectively, of equity to SLP III. Our investment in SLP III is disclosed on our Consolidated Schedule of Investments as of June 30, 2019 and December 31, 2018.

On May 2, 2018, SLP III closed its revolving credit facility with Citibank, N.A., which matures on May 2, 2023 and bears interest at a rate of LIBOR plus 1.70% per annum. Effective June 24, 2019, SLP III's revolving credit facility has a maximum borrowing capacity of $375.0 million. As of June 30, 2019 and December 31, 2018, SLP III had total investments with an aggregate fair value of approximately $441.7 million and $365.4 million, respectively, and debt outstanding under its credit facility of $288.3 million and $280.3 million, respectively. As of June 30, 2019 and December 31, 2018, none of SLP III's investments were on non-accrual. Additionally, as of June 30, 2019 and December 31, 2018, SLP III had unfunded commitments in the form of delayed draws of $11.9 million and $8.8 million, respectively. Below is a summary of SLP III's portfolio, along with a listing of the individual investments in SLP III's portfolio as of June 30, 2019 and December 31, 2018:



(in thousands)	June 30, 2019			December 31, 2018
First lien investments (1)	$	459,743		$	383,289
Weighted average interest rate on first lien investments (2)	6.36		%	6.50		%
Number of portfolio companies in SLP III	46			39
Largest portfolio company investment (1)	$	24,000		$	18,958
Total of five largest portfolio company investments (1)	$	94,581		$	85,938


(1)	Reflects principal amount or par value of investment.


(2)	Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

The following table is a listing of the individual investments in SLP III's portfolio as of June 30, 2019:



Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost		Fair Value (2)
Funded Investments - First lien				( in thousands)		( in thousands)		( in thousands)
Access CIG, LLC	Business Services	6.19% (L + 3.75%)	2/27/2025	$	1,210	$	1,210	$	1,204
Affordable Care Holding Corp.	Healthcare Services	7.23% (L + 4.75%)	10/24/2022	5,994		5,902		5,844
BCPE Empire Holdings, Inc.	Distribution & Logistics	6.40% (L + 4.00%)	6/10/2026	9,190		9,098		9,167
Bearcat Buyer, Inc.	Healthcare Services	6.56% (L + 4.25%)	7/9/2026	19,902		19,803		19,803
Bracket Intermediate Holding Corp.	Healthcare Services	6.82% (L + 4.25%)	9/5/2025	14,888		14,820		14,850
Brave Parent Holdings, Inc.	Software	6.58% (L + 4.00%)	4/18/2025	14,850		14,803		14,766
CentralSquare Technologies, LLC	Software	6.15% (L + 3.75%)	8/29/2025	14,925		14,891		14,771
Certara Holdco, Inc.	Healthcare I.T.	5.83% (L + 3.50%)	8/15/2024	1,269		1,273		1,262
CHA Holdings, Inc.	Business Services	6.83% (L + 4.50%)	4/10/2025	992		992		991
CommerceHub, Inc.	Software	6.15% (L + 3.75%)	5/21/2025	14,850		14,785		14,627
Covenant Surgical Partners, Inc.	Healthcare Services	6.40% (L + 4.25%)	7/1/2026	10,000		9,900		9,963
CRCI Longhorn Holdings, Inc.	Business Services	5.91% (L + 3.50%)	8/8/2025	14,887		14,821		14,739
Dentalcorp Health Services ULC (fka Dentalcorp Perfect Smile ULC)	Healthcare Services	6.15% (L + 3.75%)	6/6/2025	14,860		14,828		14,715
Drilling Info Holdings, Inc.	Business Services	6.65% (L + 4.25%)	7/30/2025	18,798		18,713		18,704
Edgewood Partners Holdings LLC	Business Services	6.65% (L + 4.25%)	9/6/2024	6,381		6,321		6,365
Fastlane Parent Company, Inc.	Distribution & Logistics	6.83% (L + 4.50%)	2/4/2026	3,491		3,424		3,443
Greenway Health, LLC	Software	6.08% (L + 3.75%)	2/16/2024	14,746		14,755		13,088
Heartland Dental, LLC	Healthcare Services	6.15% (L + 3.75%)	4/30/2025	18,410		18,330		17,520
Idera, Inc.	Software	6.91% (L + 4.50%)	6/28/2024	9,783		9,740		9,807
Institutional Shareholder Services Inc.	Business Services	6.83% (L + 4.50%)	3/5/2026	998		988		990
J.D. Power (fka J.D. Power and Associates)	Business Services	6.15% (L + 3.75%)	9/7/2023	5,954		5,954		5,939
Kestra Advisor Services Holdings A, Inc.	Business Services	6.78% (L + 4.25%)	6/3/2026	9,500		9,420		9,464
Market Track, LLC	Business Services	6.65% (L + 4.25%)	6/5/2024	4,802		4,797		4,322
Ministry Brands, LLC	Software	6.33% (L + 4.00%)	12/2/2022	4,572		4,555		4,572
Ministry Brands, LLC	Software	6.33% (L + 4.00%)	12/2/2022	884		880		884
National Intergovernmental Purchasing Alliance Company	Business Services	6.08% (L + 3.75%)	5/23/2025	14,850		14,838		14,664
Navex Topco, Inc.	Software	5.66% (L + 3.25%)	9/5/2025	14,887		14,819		14,620
Navicure, Inc.	Healthcare Services	6.15% (L + 3.75%)	11/1/2024	2,970		2,970		2,953
Netsmart Technologies, Inc.	Healthcare I.T.	6.15% (L + 3.75%)	4/19/2023	10,384		10,384		10,296
Newport Group Holdings II, Inc.	Business Services	6.15% (L + 3.75%)	9/12/2025	4,963		4,940		4,922
NorthStar Financial Services Group, LLC	Software	5.60% (L + 3.25%)	5/25/2025	11,770		11,719		11,609
OEConnection LLC	Business Services	6.41% (L + 4.00%)	11/22/2024	1,821		1,833		1,807
Outcomes Group Holdings, Inc.	Healthcare Services	6.02% (L + 3.50%)	10/24/2025	6,468		6,453		6,395
Pelican Products, Inc.	Business Products	5.91% (L + 3.50%)	5/1/2025	4,950		4,939		4,876
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	7.66% (L + 5.25%)	4/29/2024	15,509		15,444		15,412
Premise Health Holding Corp.	Healthcare Services	5.83% (L + 3.50%)	7/10/2025	13,793		13,731		13,712
Project Accelerate Parent, LLC	Business Services	6.66% (L + 4.25%)	1/2/2025	9,975		9,925		9,950
Quartz Holding Company	Software	6.44% (L + 4.00%)	4/2/2026	2,000		1,990		1,998
Quest Software US Holdings Inc.	Software	6.83% (L + 4.25%)	5/16/2025	14,925		14,860		14,729
Refinitiv US Holdings Inc. (fka Financial & Risk US Holdings, Inc.)	Business Services	6.15% (L + 3.75%)	10/1/2025	7,960		7,942		7,734
Sierra Enterprises, LLC	Food & Beverage	6.40% (L + 4.00%)	11/11/2024	2,469		2,466		2,463
Spring Education Group, Inc. (fka SSH Group Holdings, Inc.)	Education	6.83% (L + 4.25%)	7/30/2025	14,887		14,854		14,822
TIBCO Software Inc.	Software	6.40% (L + 4.00%)	6/30/2026	5,500		5,473		5,515
VT Topco, Inc.	Business Services	6.08% (L + 3.75%)	8/1/2025	7,940		7,922		7,923
VT Topco, Inc.	Business Services	6.08% (L + 3.75%)	8/1/2025	1,646		1,642		1,642
Wirepath LLC	Distribution & Logistics	6.33% (L + 4.00%)	8/5/2024	17,389		17,389		17,303
WP CityMD Bidco LLC	Healthcare Services	5.83% (L + 3.50%)	6/7/2024	14,812		14,812		14,802
YI, LLC	Healthcare Services	6.33% (L + 4.00%)	11/7/2024	9,841		9,834		9,829
Total Funded Investments				$	447,845	$	446,182	$	441,776



Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Unfunded Investments - First lien
BCPE Empire Holdings, Inc.	Distribution & Logistics	—	6/11/2021	$	1,810	$	—		$	(5	)
Bearcat Buyer, Inc.	Healthcare Services	—	7/9/2021	4,097		(20		)	(20		)
Covenant Surgical Partners, Inc.	Healthcare Services	—	7/1/2021	2,000		(20		)	(7		)
Drilling Info Holdings, Inc.	Business Services	—	7/30/2020	63		—			—
Edgewood Partners Holdings LLC	Business Services	—	7/31/2019	1,087		(11		)	(3		)
Heartland Dental, LLC	Healthcare Services	—	4/30/2020	413		—			(20		)
Ministry Brands, LLC	Software	—	10/18/2019	980		(5		)	—
Premise Health Holding Corp.	Healthcare Services	—	7/10/2020	1,103		(3		)	(7		)
VT Topco, Inc.	Business Services	—	8/1/2020	345		—			(1		)
Total Unfunded Investments				$	11,898	$	(59	)	$	(63	)
Total Investments				$	459,743	$	446,123		$	441,713


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L). For each investment, the current interest rate provided reflects the rate in effect as of June 30, 2019.


(2)	Represents the fair value in accordance with ASC 820. Our board of directors does not determine the fair value of the investments held by SLP III.

The following table is a listing of the individual investments in SLP III's portfolio as of December 31, 2018:



Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost			Fair Value (2)
Funded Investments - First lien				(in thousands)		(in thousands)			(in thousands)
Access CIG, LLC	Business Services	6.46% (L + 3.75%)	2/27/2025	$	1,216	$	1,216		$	1,185
Affordable Care Holding Corp.	Healthcare Services	7.25% (L + 4.75%)	10/24/2022	1,025		1,030			1,005
Bracket Intermediate Holding Corp.	Healthcare Services	7.00% (L + 4.25%)	9/5/2025	14,963		14,890			14,813
Brave Parent Holdings, Inc.	Software	6.52% (L + 4.00%)	4/18/2025	14,925		14,874			14,421
CentralSquare Technologies, LLC	Software	6.27% (L + 3.75%)	8/29/2025	15,000		14,964			14,648
Certara Holdco, Inc.	Healthcare I.T.	6.30% (L + 3.50%)	8/15/2024	1,275		1,280			1,255
CHA Holdings, Inc.	Business Services	7.30% (L + 4.50%)	4/10/2025	997		997			995
CommerceHub, Inc.	Software	6.27% (L + 3.75%)	5/21/2025	14,925		14,856			14,515
CRCI Longhorn Holdings, Inc.	Business Services	5.89% (L + 3.50%)	8/8/2025	14,963		14,891			14,588
Dentalcorp Perfect Smile ULC	Healthcare Services	6.27% (L + 3.75%)	6/6/2025	11,940		11,912			11,701
Dentalcorp Perfect Smile ULC	Healthcare Services	6.27% (L + 3.75%)	6/6/2025	1,686		1,685			1,652
Drilling Info Holdings, Inc.	Business Services	6.77% (L + 4.25%)	7/30/2025	17,591		17,507			17,525
Financial & Risk US Holdings, Inc.	Business Services	6.27% (L + 3.75%)	10/1/2025	8,000		7,980			7,512
GOBP Holdings, Inc.	Retail	6.55% (L + 3.75%)	10/22/2025	15,000		14,963			14,625
Greenway Health, LLC	Software	6.56% (L + 3.75%)	2/16/2024	14,821		14,831			14,450
Heartland Dental, LLC	Healthcare Services	6.27% (L + 3.75%)	4/30/2025	17,329		17,249			16,593
HIG Finance 2 Limited	Business Services	6.06% (L + 3.50%)	12/20/2024	1,995		1,985			1,939
Idera, Inc.	Software	7.03% (L + 4.50%)	6/28/2024	2,294		2,289			2,248
J.D. Power (fka J.D. Power and Associates)	Business Services	6.27% (L + 3.75%)	9/7/2023	5,985		5,985			5,835
Market Track, LLC	Business Services	6.87% (L + 4.25%)	6/5/2024	4,827		4,821			4,633
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	4,596		4,576			4,596
Ministry Brands, LLC	Software	6.52% (L + 4.00%)	12/2/2022	600		597			600
National Intergovernmental Purchasing Alliance Company	Business Services	6.55% (L + 3.75%)	5/23/2025	14,925		14,912			14,552
Navex Topco, Inc.	Software	5.78% (L + 3.25%)	9/5/2025	14,963		14,890			14,102
Navicure, Inc.	Healthcare Services	6.27% (L + 3.75%)	11/1/2024	2,985		2,985			2,925
Netsmart Technologies, Inc.	Healthcare I.T.	6.27% (L + 3.75%)	4/19/2023	10,437		10,437			10,307
Newport Group Holdings II, Inc.	Business Services	6.54% (L + 3.75%)	9/12/2025	4,988		4,963			4,875
NorthStar Financial Services Group, LLC	Software	6.10% (L + 3.50%)	5/25/2025	14,925		14,856			14,628
OEConnection LLC	Business Services	6.53% (L + 4.00%)	11/22/2024	1,830		1,843			1,789
Outcomes Group Holdings, Inc.	Healthcare Services	6.28% (L + 3.50%)	10/24/2025	6,500		6,484			6,394
Pelican Products, Inc.	Business Products	5.88% (L + 3.50%)	5/1/2025	4,975		4,963			4,726
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	8.06% (L + 5.25%)	4/29/2024	15,588		15,517			15,199
Premise Health Holding Corp.	Healthcare Services	6.55% (L + 3.75%)	7/10/2025	13,862		13,796			13,689
Quest Software US Holdings Inc.	Software	6.78% (L + 4.25%)	5/16/2025	15,000		14,930			14,535
Sierra Enterprises, LLC	Food & Beverage	6.02% (L + 3.50%)	11/11/2024	2,481		2,478			2,463
SSH Group Holdings, Inc.	Education	6.77% (L + 4.25%)	7/30/2025	14,963		14,927			14,588
University Support Services LLC (St. George's University Scholastic Services LLC)	Education	6.03% (L + 3.50%)	7/17/2025	3,790		3,772			3,759
VT Topco, Inc.	Business Services	6.55% (L + 3.75%)	8/1/2025	7,980		7,961			7,882
VT Topco, Inc.	Business Services	6.55% (L + 3.75%)	8/1/2025	1,004		1,004			992
Wirepath LLC	Distribution & Logistics	6.71% (L + 4.00%)	8/5/2024	17,477		17,477			17,215
WP CityMD Bidco LLC	Healthcare Services	6.30% (L + 3.50%)	6/7/2024	14,887		14,887			14,608
YI, LLC	Healthcare Services	6.80% (L + 4.00%)	11/7/2024	4,965		4,983			4,935
Total Funded Investments				$	374,478	$	373,443		$	365,497
Unfunded Investments - First lien
Dentalcorp Perfect Smile ULC	Healthcare Services	—	6/6/2020	$	1,308	$	(3	)	$	(26	)
Drilling Info Holdings, Inc.	Business Services	—	7/30/2020	1,367		(7		)	(11		)
Heartland Dental, LLC	Healthcare Services	—	4/30/2020	1,586		—			(67		)
Ministry Brands, LLC	Software	—	10/18/2019	1,267		(6		)	—
Premise Health Holding Corp.	Healthcare Services	—	7/10/2020	1,103		(3		)	(14		)
University Support Services LLC (St. George's University Scholastic Services LLC)	Education	—	7/17/2019	1,187		—			(10		)
VT Topco, Inc.	Business Services	—	8/1/2020	993		(2		)	(12		)
Total Unfunded Investments				$	8,811	$	(21	)	$	(140	)
Total Investments				$	383,289	$	373,422		$	365,357


(1)	All interest is payable in cash unless otherwise indicated. A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L). For each investment, the current interest rate provided reflects the rate in effect as of December 31, 2018.


(2)	Represents the fair value in accordance with ASC 820. Our board of directors does not determine the fair value of the investments held by SLP III.

Below is certain summarized financial information for SLP III as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and June 30, 2018:



Selected Balance Sheet Information:	June 30, 2019			December 31, 2018
	(in thousands)			(in thousands)
Investments at fair value (cost of $446,123 and $373,422)	$	441,713		$	365,357
Cash and other assets	8,912			9,138
Total assets	$	450,625		$	374,495

Credit facility	$	288,300		$	280,300
Deferred financing costs	(2,737		)	(2,831		)
Payable for unsettled securities purchased	63,615			—
Distribution payable	2,750			2,600
Other liabilities	3,463			4,456
Total liabilities	355,391			284,525

Members' capital	$	95,234		$	89,970
Total liabilities and members' capital	$	450,625		$	374,495



	Three Months Ended					Six Months Ended
Selected Statement of Operations Information:	June 30, 2019			June 30, 2018(1)		June 30, 2019			June 30, 2018(1)
	(in thousands)			(in thousands)		(in thousands)			(in thousands)
Interest income	$	6,267		$	790	$	12,560		$	790
Other income	78			22		148			22
Total investment income	6,345			812		12,708			812

Interest and other financing expenses	3,350			574		6,741			574
Other expenses	165			226		303			226
Total expenses	3,515			800		7,044			800
Less: expenses waived and reimbursed	(22		)	—		(22		)	—
Net expenses	3,493			800		7,022			800
Net investment income	2,852			12		5,686			12

Net realized gains on investments	37			—		70			—
Net change in unrealized appreciation of investments	688			618		3,655			618
Net increase in members' capital	$	3,577		$	630	$	9,411		$	630


(1)	SLP III commenced operations on April 25, 2018.

For the three and six months ended June 30, 2019, we earned approximately $2.2 million and $4.9 million of dividend income related to SLP III, which is included in dividend income. For the three and six months ended June 30, 2018, we did not earn any dividend income related to SLP III. As of June 30, 2019 and December 31, 2018 approximately $2.2 million and $2.1 million, respectively, of dividend income related to SLP III was included in interest and dividend receivable.

We have determined that SLP III is an investment company under ASC 946; however, in accordance with such guidance we will generally not consolidate our investment in a company other than a wholly-owned investment company subsidiary. Furthermore, ASC 810 concludes that in a joint venture where both members have equal decision making authority,

it is not appropriate for one member to consolidate the joint venture since neither has control. Accordingly, we do not consolidate SLP III.

New Mountain Net Lease Corporation

NMNLC was formed to acquire commercial real estate properties that are subject to "triple net" leases. NMNLC's investments are disclosed on our Consolidated Schedule of Investments as of ~~September~~June 30, ~~2017.~~2019.

Below is certain summarized property information for NMNLC as of ~~September~~June 30, ~~2017:~~2019:

Lease

Total

Fair Value as of

Lease

Total

Fair Value as of

Portfolio Company

Tenant

Expiration Date

Location

Square Feet

September 30, 2017

Tenant

Expiration Date

Location

Square Feet

June 30, 2019

(in thousands)

NM NL Holdings LP / NM GP Holdco LLC

Various

34,611

NM GLCR LP

Arctic Glacier U.S.A.

2/28/2038

214

20,918

NM CLFX LP

Victor Equipment Company

8/31/2033

423

12,725

NM APP Canada Corp.

A.P. Plasman, Inc.

9/30/2031

Ontario, Canada

436

7,685

A.P. Plasman, Inc.

9/30/2031

Canada

436

9,949

NM APP US LLC

Plasman Corp, LLC / A-Brite LP

9/30/2033

Fort Payne, AL

261

5,119

Plasman Corp, LLC / A-Brite LP

9/30/2033

AL / OH

261

6,101

NM DRVT LLC

FMH Conveyors, LLC

10/31/2031

195

5,704

NM KRLN LLC

Kirlin Group, LLC

6/30/2029

4,386

NM JRA LLC

J.R. Automation Technologies, LLC

1/31/2031

3,500

Cleveland, OH

97,894

NM DRVT LLC

FMH Conveyors, LLC

10/31/2031

Jonesboro, AR

195

5,152

NM JRA LLC

J.R. Automation Technologies, LLC

1/31/2031

Holland, MI

2,161

NM KRLN LLC

Kirlin Group, LLC

6/30/2029

Rockville, MD

7,510

27,627

Collateralized agreements or repurchase financings

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~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we held one collateralized agreement to resell with a cost basis of $30.0 million and $30.0 million, respectively, and a ~~carrying~~fair value of ~~$26.8~~$23.5 million and ~~$29.2~~$23.5 million, respectively. The collateralized agreement to resell is guaranteed by a private hedge fund. 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.

PPVA Black Elk (Equity) LLC

On May 3, 2013, we entered into a collateralized securities purchase and put agreement (the “SPP Agreement”) with a private hedge fund. Under the SPP Agreement, we purchased twenty million Class E Preferred Units of Black Elk Energy Offshore Operations, LLC (“Black Elk”) for $20.0 million with a corresponding obligation of the private hedge fund to repurchase the preferred units for $20.0 million plus other amounts due under the SPP Agreement. The majority owner of Black Elk was the private hedge fund. In August 2014, we received a payment of $20.5 million, the full amount due under the SPP Agreement.

In August 2017, a trustee (the “Trustee”) for Black Elk informed us that the Trustee intended to assert a fraudulent conveyance claim (the “Claim”) against us and one of its affiliates seeking the return of the $20.5 million repayment. Black Elk filed a Chapter 11 bankruptcy petition pursuant to the United States Bankruptcy Code in August 2015. The Trustee alleges that individuals affiliated with the private hedge fund conspired with Black Elk and others to improperly use proceeds from the sale of certain Black Elk assets to repay, in August 2014, the private hedge fund’s obligation to us under the SPP Agreement. We were unaware of these claims at the time the repayment was received. The private hedge fund is currently in liquidation under the laws of the Cayman Islands.

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. As of June 30, 2019 and December 31, 2018, the SPP Agreement had a cost basis of $14.5 million and $14.5 million, respectively, and a fair value of $11.4 million and $11.4 million, respectively, which is reflective of the higher inherent risk in this transaction.

Revenue Recognition

Sales and paydowns of investments: Realized gains and losses on investments are determined on the specific identification method.

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 six months ended June 30, 2019, we recognized PIK and non-cash interest from investments of approximately $3.1 million and $6.1 million, respectively, and PIK and non-cash dividends from investments of approximately $4.5 million and $8.8 million, respectively. For the three and six months ended June 30, 2018,we recognized PIK and non-cash interest from investments of approximately $1.9 million and $3.6 million, respectively, and PIK and non-cash dividends from investments of approximately $7.0 million and $13.8 million, respectively.

typically non-recurring in nature. Delayed compensation is income earned from counterparties on trades that do not settle within a set number of business days after trade date. Other income may also include fees from bridge loans. We may from time to time enter into bridge financing commitments, an obligation to provide interim financing to a counterparty until permanent credit can be obtained. These commitments are short-term in nature and may expire unfunded. A fee is received for providing such commitments. Structuring fees and upfront fees are recognized as income when earned, usually when paid at the closing of the investment, and are non-refundable.

Monitoring of Portfolio Investments

We monitor the performance and financial trends of our portfolio companies on at least a quarterly basis. We attempt to identify any developments within the portfolio company, the industry or the macroeconomic environment that may alter any material element of our original investment strategy.

We use an investment rating system to characterize and monitor the credit profile and expected level of returns on each investment in the portfolio. We use a four-level numeric rating scale as follows:

Investment Rating 1—Investment is performing materially above expectations;

Investment Rating 2—Investment is performing materially in-line with expectations. All new loans are rated 2 at initial purchase;

Investment Rating 3—Investment is performing materially below expectations, ~~and while significant loss is not expected,~~where the risk of loss has materially increased since the original investment; and

Investment Rating 4—Investment is performing substantially below expectations and risks have increased substantially since the original investment. Payments may be delinquent. There is meaningful possibility that we will not recoup our original cost basis in the investment and may realize a substantial loss upon exit.

The following table shows the distribution of our investments on the 1 to 4 investment rating scale at fair value as of ~~September~~June 30, ~~2017:~~2019:


(in millions)	As of September 30, 2017								As of June 30, 2019
Investment Rating	Par Value(1)		Percent		Fair Value		Percent			Cost		Percent		Fair Value		Percent
Investment Rating 1	$	134.5	8.4	%	$	139.1	7.5	%		$	187.7	7.2	%	$	190.6	7.2	%
Investment Rating 2	1,461.5		91.6	%	1,706.5		92.5	%		2,429.3		92.7	%	2,452.5		92.8	%
Investment Rating 3	—		—	%	—		—	%		—		—	%	—		—	%
Investment Rating 4	—		—	%	0.4		—	%		1.5		0.1	%	0.0		0.0	%
	$	1,596.0	100.0	%	$	1,846.0	100.0	%		$	2,618.5	100.0	%	$	2,643.1	100.0	%


~~(1)~~	~~Excludes shares and warrants.~~

As of ~~September~~June 30, ~~2017,~~2019, all investments in our portfolio had an Investment Rating of 1 or 2 with the exception of one portfolio company that had an Investment Rating of 4.

During the first quarter of ~~2017,~~2018, we placed our ~~entire~~ first lien ~~notes position~~positions in ~~Sierra Hamilton~~Education Management II LLC ~~/ Sierra Hamilton Finance, Inc. ("Sierra")~~ on non-accrual status ~~due~~as the portfolio company announced its intention to ~~its ongoing restructuring.~~wind down and liquidate the business. Our first lien positions and our preferred and common shares in Education Management Corporation ("EDMC") have an investment rating of 4. As of June 30, ~~2017,~~2019, our ~~investment~~investments in ~~Sierra placed on non-accrual status represented~~EDMC with an Investment Rating of 4 had an aggregate cost basis of ~~$27.2~~approximately $1.5 million, an aggregate fair value of $12.7 million and total unearned interest income of $1.4 million for the six months then ended. In July 2017, Sierra completed a restructuring which resulted in a material modification of the original terms and an extinguishment of our original investment in Sierra. Prior to the extinguishment in July 2017, our original investment in Sierra had an aggregate cost of $27.3 million, an aggregate fair value of $12.9 million and total unearned interest income of $1.7 million. The extinguishment resulted in a realized loss of $14.4 million. As a result of the restructuring, we received common shares in Sierra Hamilton Holding Corporation. As of September 30, 2017, our investment had an aggregate cost basis of $12.8 million and an aggregate fair value of $12.1 million.

During the third quarter of 2016, we placed our entire second lien position in Transtar Holding Company (“Transtar”) on non-accrual status due to its ongoing restructuring. As of March 31, 2017, our investment in Transtar had an aggregate cost basis of $31.2 million, an aggregate fair value of $3.6approximately less than $0.1 million and total unearned interest income of approximately ~~$1.8~~less than $0.1 million and approximately $0.1 million, respectively, for the three and six months then ended. In April 2017, Transtar completed a restructuring which resulted in a $3.6 million repayment of our second lien position. We recognized a realized loss of $27.6 million during the nine months ended September 30, 2017 related to Transtar.

During the second quarter of 2016, we placed a portion of our first lien position in Permian Tank & Manufacturing, Inc. (“Permian”) on non-accrual status due to its ongoing restructuring. As of September 30, 2016, our investment in Permian had an aggregate cost basis of $24.4 million, an aggregate fair value of $7.1 million and total unearned interest income of $1.3 million for the nine months then ended. In October 2016, Permian completed a restructuring which resulted in a material modification of the original terms and an extinguishment of our original investment in Permian. Prior to the extinguishment in October 2016, our original investment in Permian had an aggregate cost of $25.0 million, an aggregate fair value of $7.1 million and total unearned interest income of $1.4 million for the year ended December 31, 2016. The extinguishment resulted in a realized loss of $17.9 million. Post restructuring, our investments in Permian have been restored to full accrual status. As of September 30, 2017, our investments in Permian have an aggregate cost basis of $9.9 million and an aggregate fair value of $12.0 million.

During the third quarter of 2016, we received notice that there would be no recovery of the outstanding principal and interest owed on our two super priority first lien positions in ATI Acquisition Company ("ATI"). As of June 30, 2016, our first lien positions in ATI had an aggregate cost of $1.5 million and an aggregate fair value of $0 and no unearned interest income for the period then ended. We wrote off our first lien positions in ATI and recognized an aggregate realized loss of $1.5 million during the three months ended September 30, 2016. As of September 30, 2017, our preferred shares and warrants in Ancora Acquisition LLC, which were received as a result of our first lien positions in ATI, had an aggregate cost basis of $0.1 million and an aggregate fair value of $0.4 million.

Portfolio and Investment Activity

The fair value of our investments was approximately ~~$1,846.0~~$2,643.1 million in 82101 portfolio companies at ~~September~~June 30, ~~2017~~2019 and approximately ~~$1,558.8~~$2,342.0 million in 7892 portfolio companies at December 31, ~~2016.~~2018.

The following table shows our portfolio and investment activity for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016:~~2018:

Nine Months Ended
(in millions) September 30, 2017 September 30, 2016
New investments in 51 and 32 portfolio companies, respectively $ 809.8
$ 336.2
Debt repayments in existing portfolio companies 483.6
310.3
Sales of securities in 16 and 7 portfolio companies, respectively 58.9
42.3
Change in unrealized appreciation on 55 and 61 portfolio companies, respectively 61.6
50.1
Change in unrealized depreciation on 34 and 24 portfolio companies, respectively (12.9 ) (39.4 )

~~At September 30, 2017 and September 30, 2016, our weighted average Yield to Maturity at Cost was approximately 10.6% and 10.4%, respectively.~~



	Six Months Ended
(in millions)	June 30, 2019			June 30, 2018
New investments in 32 and 41 portfolio companies, respectively	$	341.7		$	560.5
Debt repayments in existing portfolio companies	74.3			238.1
Sales of securities in 0 and 6 portfolio companies, respectively	—			58.7
Change in unrealized appreciation on 43 and 34 portfolio companies, respectively	31.0			30.0
Change in unrealized depreciation on 54 and 60 portfolio companies, respectively	(18.7		)	(27.1		)

Recent Accounting Standards Updates

See Item 1.—Financial Statements—Note 13. Recent Accounting Standards for details on recent accounting standards updates.

Results of Operations for the Three Months Ended June 30, 2019 and June 30, 2018

~~Under GAAP, our IPO did not step-up the cost basis of the Predecessor Operating Company's existing investments to fair market value at the IPO date. Since the~~Revenue



	Three Months Ended
(in thousands)	June 30, 2019		June 30, 2018
Interest income	$	51,635	$	40,090
Total dividend income	12,575		12,346
Other income	2,255		2,162
Total investment income	$	66,465	$	54,598

Our total value of the Predecessor Operating Company's investments at the time of the IPO was greater than the investments' cost basis, a larger amount of amortization of purchase or original issue discount, and different amounts in realized gain and unrealized appreciation, may be recognized under GAAP in each period than if the step-up had occurred. This will remain until such predecessor investments are sold, repaid or mature in the future. We track the transferred (or fair market) value of each of the Predecessor Operating Company's investments as of the time of the IPO and, for purposes of the incentive fee calculation, adjusts income as if each investment was purchased at the date of the IPO (or stepped up to fair market value). The respective "Adjusted Net Investment Income" (defined as net investment income adjusted to reflect income as if the cost basis of investments held at the IPO date had stepped-up to fair market value as of the IPO date) is used in calculating both the incentive fee and dividend payments. See ~~Item 1.—Financial Statements—Note 5. Agreements~~ ~~for additional details.~~

~~The following table~~increased by approximately $11.9 million, or 22%, for the three months ended ~~September~~June 30, ~~2017 is adjusted~~2019 as compared to ~~reflect~~ the ~~step-up to fair market value and the allocation of the incentive fees related to hypothetical capital gains out of the adjusted post-incentive fee net investment income.~~

(in thousands) Three Months
Ended
September 30, 2017
Stepped-up
Cost Basis
Adjustments

Incentive Fee
Adjustments(1)
Adjusted Three
Month Ended
September 30, 2017
Investment income

Interest income $ 39,638
$ —
$ —
$ 39,638
Total dividend income 9,870
—
—
9,870
Other income 1,728
—
—
1,728
Total investment income(2) 51,236
—
—
51,236
Total expenses pre-incentive fee(3) 18,371
—
—
18,371
Pre-Incentive Fee Net Investment Income 32,865
—
—
32,865
Incentive fee 6,573
—
—
6,573
Post-Incentive Fee Net Investment Income 26,292
—
26,292
Net realized losses on investments(4) (14,216 ) —
—
(14,216 )
Net change in unrealized appreciation (depreciation) of investments(4) 14,643
—
—
14,643
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell (1,549 ) —
—
(1,549 )
Provision for taxes (394 ) —
—
(394 )
Capital gains incentive fees —
—
—
—
Net increase in net assets resulting from operations $ 24,776
$ 24,776


~~(1)~~	For the three months ended September 30, 2017, we incurred total incentive fees of $6.6 million, of which none was related to the capital gains incentive fee accrual on a hypothetical liquidation basis.


~~(2)~~	~~Includes income from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.~~


~~(3)~~	~~Includes management fee waivers of $1.5 million. There were no expense waivers and reimbursements for the three months ended September 30, 2017.~~


~~(4)~~	Includes net realized gains and losses on investments and net change in unrealized appreciation (depreciation) of investments from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.

three months ended June 30, 2018. For the three months ended ~~September~~June 30, ~~2017,~~2019, total investment income

of ~~$51.2~~approximately $66.5 million consisted of approximately ~~$32.5~~$47.1 million in cash interest from investments, approximately ~~$1.5~~$3.1 million in PIK and non-cash interest from investments, approximately ~~$1.6~~$0.1 million in prepayment fees, net amortization of purchase premiums and discounts of approximately ~~$4.0~~$1.4 million, approximately ~~$4.5~~$8.1 million in cash dividends from investments, ~~$5.4~~approximately $4.5 million in PIK and non-cash dividends from investments and approximately ~~$1.7~~$2.2 million in other income. ~~Our Adjusted Net Investment Income was $26.3~~The increase in interest income of approximately $11.5 million ~~for~~during the three months ended ~~September~~June 30, ~~2017.~~

In accordance with GAAP, for the three months ended September 30, 2017, we did not have an accrual for hypothetical capital gains incentive fee based upon the cumulative net Adjusted Realized Capital Gains and Adjusted Realized Capital Losses and the cumulative net Adjusted Unrealized Capital Appreciation and Adjusted Unrealized Capital Depreciation on investments held at the end of the period. Actual amounts paid to the Investment Adviser are consistent with the Investment Management Agreement and are based only on actual Adjusted Realized Capital Gains computed net of all Adjusted Realized Capital Losses and Adjusted Unrealized Capital Depreciation on a cumulative basis from inception through the end of each calendar year as if the entire portfolio was sold at fair value. As of September 30, 2017, no actual capital gains incentive fee was owed under the Investment Management Agreement, as cumulative net Adjusted Realized Gains did not exceed cumulative Adjusted Unrealized Depreciation.

The following table for the nine months ended September 30, 2017 is adjusted to reflect the step-up to fair market value and the allocation of the incentive fees related to hypothetical capital gains out of the adjusted post-incentive fee net investment income.

(in thousands) Nine Months Ended
September 30, 2017
Stepped-up
Cost Basis
Adjustments

Incentive Fee
Adjustments(1)
Adjusted Nine Months Ended
September 30, 2017
Investment income

Interest income $ 111,275
$ —
(2) $ —
$ 111,275
Total dividend income 26,273
—
—
26,273
Other income 7,014
—
—
7,014
Total investment income(3) 144,562
—
—
144,562
Total expenses pre-incentive fee(4) 52,411
—
—
52,411
Pre-Incentive Fee Net Investment Income 92,151
—
—
92,151
Incentive fee 16,630
—
—
16,630
Post-Incentive Fee Net Investment Income 75,521
—
—
75,521
Net realized losses on investments(5) (39,843 ) —
—
(39,843 )
Net change in unrealized appreciation (depreciation) of investments(5) 48,700
—
(2) —
48,700
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell (2,382 ) —
—
(2,382 )
Benefit for taxes 525
—
—
525
Capital gains incentive fees —
—
—
—
Net increase in net assets resulting from operations $ 82,521
$ 82,521


~~(1)~~	For the nine months ended September 30, 2017, we incurred total incentive fees of $16.6 million, net of the incentive fee waiver of $1.8 million, of which none was related to the capital gains incentive fee accrual on a hypothetical liquidation basis.


~~(2)~~	~~For the nine months ended September 30, 2017, the adjustment was less than $1 thousand.~~


~~(3)~~	~~Includes income from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.~~


~~(4)~~	~~Includes expense waivers and reimbursements of $0.5 million and management fee waivers of $4.3 million.~~


~~(5)~~	Includes net realized gains and losses on investments and net change in unrealized appreciation (depreciation) of investments from non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments.

For the nine months ended September 30, 2017, we had less than a $1 thousand adjustment to interest income for amortization and a less than $1 thousand adjustment to net change in unrealized appreciation to adjust for the stepped-up cost basis of the transferred investments discussed above. For the nine months ended September 30, 2017, total adjusted investment income of $144.6 million consisted of approximately $96.9 million in cash interest from investments, approximately $4.7 million in PIK and non-cash interest from investments, approximately $3.2 million in prepayment fees, net amortization of purchase premiums and discounts of approximately $6.5 million, approximately $14.6 million in cash dividends from investments, $11.7 million in PIK and non-cash dividends from investments and approximately $7.0 million in other income. Our Adjusted Net Investment Income was $75.5 million for the nine months ended September 30, 2017.

In accordance with GAAP, for the nine months ended September 30, 2017, we did not have an accrual for hypothetical capital gains incentive fee based upon the cumulative net Adjusted Realized Capital Gains and Adjusted Realized Capital Losses and the cumulative net Adjusted Unrealized Capital Appreciation and Adjusted Unrealized Capital Depreciation on investments held at the end of the period. Actual amounts paid to the Investment Adviser are consistent with the Investment Management Agreement and are based only on actual Adjusted Realized Capital Gains computed net of all Adjusted Realized Capital Losses and Adjusted Unrealized Capital Depreciation on a cumulative basis from inception through the end of each calendar year as if the entire portfolio was sold at fair value. As of September 30, 2017, no actual capital gains incentive fee was owed under the Investment Management Agreement, as cumulative net Adjusted Realized Gains did not exceed cumulative Adjusted Unrealized Depreciation.

~~Results of Operations for the Three Months Ended September 30, 2017 and September 30, 2016~~

~~Revenue~~

Three Months Ended
(in thousands) September 30, 2017 September 30, 2016
Interest income $ 39,638
$ 35,917
Total dividend income 9,870
3,063
Other income 1,728
2,854
Total investment income $ 51,236
$ 41,834

~~Our total investment income increased by approximately $9.4 million for the three months ended September 30, 2017~~2019 as compared to the three months ended ~~September~~June 30, ~~2016. The 22% increase in total investment income~~2018 was primarily ~~results from an increase in~~due to increased interest income ~~of approximately $3.7 million for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016,~~ which is attributable to larger invested balances and ~~prepayment fees received associated with the early repayment of four different portfolio companies.~~higher LIBOR rates. Our larger invested balances were driven by the proceeds from ~~the October 2016~~our August 2018 and June 2019 convertible notes issuances, proceeds from our July 2018, September 2018 and April ~~2017 primary~~2019 unsecured notes issuances, higher drawn balances on our Holdings Credit Facility (as defined below), borrowings from our DB Credit Facility (as defined below) and proceeds from the February 2019 public offering of our common stock ~~and June 2017 unsecured notes issuances~~all of which contributed to ~~originate~~the origination of new investments. ~~The~~Also contributing to the increase ~~was also attributable to an~~in total investment income is the increase ofin dividend income of approximately ~~$6.8~~$0.2 million ~~during the three months ended September 30, 2017 as compared~~which is due to ~~the three months ended September 30, 2016. The increase is primarily due to~~cash distributions from our investments in NMNLC and SLP ~~II and NMNLC~~III and PIK and non-cash dividend income from ~~four~~six portfolio companies where we hold equity positions. Other income during the three months ended ~~September~~June 30, ~~2017,~~2019, which represents fees that are generally non-recurring in nature, was primarily attributable to ~~structuring,~~ upfront, ~~amendment,~~commitment, consent ~~bridge~~ and ~~commitment~~amendment fees received from ~~eleven~~12 different portfolio companies and management fees from a non-controlled affiliated portfolio company.

Operating Expenses


	Three Months Ended						Three Months Ended
(in thousands)	September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018
Management fee	$	8,422		$	6,883		$	11,640		$	9,301
Less: management fee waiver	(1,483		)	(1,102		)	(2,823		)	(1,495		)
Total management fee	6,939			5,781			8,817			7,806
Incentive fee	6,573			5,432			6,987			6,430
Capital gains incentive fee(1)	—			—
Interest and other financing expenses	9,509			7,171			20,719			12,824
Professional fees	819			723			886			708
Administrative expenses	652			586			1,049			822
Other general and administrative expenses	346			390			398			518
Total expenses	24,838			20,083			38,856			29,108
Less: expenses waived and reimbursed	—			—			(335		)	(276		)
Net expenses before income taxes	24,838			20,083			38,521			28,832
Income tax expense	106			22			(4		)	45
Net expenses after income taxes	$	24,944		$	20,105		$	38,517		$	28,877


~~(1)~~	~~Capital gains incentive fee accrual assumes a hypothetical liquidation basis.~~

Our total net operating expenses increased by approximately ~~$4.8~~$9.6 million for the three months ended ~~September~~June 30, ~~2017~~2019 as compared to the three months ended ~~September~~June 30, ~~2016.~~2018. Our management fee increased by approximately ~~$1.2~~$1.0 million, net of a management fee waiver, and our incentive ~~fees~~fee increased by approximately ~~$1.1~~$0.6 million for the three months ended ~~September~~June 30, ~~2017~~2019 as compared to the three months ended ~~September~~June 30, ~~2016.~~2018. The increase in management ~~fees~~ and incentive fees ~~from the three months ended September 30, 2016 to the three months ended September 30, 2017~~ was attributable to larger invested balances, driven by the ~~October 2016 and April 2017 primary offerings of~~proceeds from our ~~common stock,~~convertible notes issuances, our ~~September 2016 and June 2017~~ unsecured notes ~~issuance and~~issuances, our ~~September 2016 convertible notes issuance~~February 2019 public offering of common stock and our use of leverage from our revolving credit facilities and SBA-guaranteed debentures used to originate new investments.

Interest and other financing expenses increased by approximately ~~$2.3~~$7.9 million during the three months ended ~~September~~June 30, ~~2017~~2019 as compared to the three months ended ~~September~~June 30, ~~2016,~~2018, primarily due to our ~~issuance~~issuances of ~~our~~convertible and unsecured notes, ~~and additional issuance of our convertible notes and~~ higher drawn balances on our SBA-guaranteed debentures, ~~and~~ Holdings Credit Facility ~~(as defined below).~~and DB Credit Facility and higher LIBOR rates. Our total professional fees, ~~total~~ administrative expenses and total other general and administrative expenses ~~remained relatively flat~~ for the three months ended ~~September~~June 30, ~~2017~~2019 as compared to the three months ended ~~September~~June 30, ~~2016.~~2018 remained relatively flat.

Net Realized Gains (Losses) and Net Change in Unrealized Appreciation (Depreciation)

Three Months Ended
(in thousands) September 30, 2017 September 30, 2016
Net realized (losses) gains on investments $ (14,216 ) $ 1,150
Net change in unrealized appreciation (depreciation) of investments 14,643
3,146
Net change in unrealized (depreciation) appreciation securities purchased under collateralized agreements to resell (1,549 ) (957 )
(Provision) benefit for taxes (394 ) 11
Net realized and unrealized gains (losses) $ (1,516 ) $ 3,350



	Three Months Ended
(in thousands)	June 30, 2019			June 30, 2018
Net realized gains (losses) on investments	$	52		$	(6,609	)
Net change in unrealized (depreciation) appreciation of investments	(3,985		)	5,087
Net change in unrealized depreciation securities purchased under collateralized agreements to resell	—			—
Provision for taxes	(270		)	(1,066		)
Net realized and unrealized losses	$	(4,203	)	$	(2,588	)

Our net realized ~~losses~~gains and unrealized ~~gains~~losses resulted in a net loss of approximately ~~$(1.5)~~$4.2 million for the three months ended ~~September~~June 30, ~~2017~~2019 compared to net realized losses and unrealized gains resulting in a net ~~gain~~loss of approximately ~~$3.4~~$2.6 million for the same period in ~~2016.~~2018. 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~~June 30, ~~2017~~2019 was primarily driven by ~~unrealized depreciation on~~the overall decrease in market prices of our securities purchased under collateralized agreements to resell. With the completion of the Sierra restructuring in July 2017, $14.5 million of previously recorded unrealized depreciation related to this investment was realizedinvestments during the ~~three months ended September 30, 2017.~~period. The provision for income taxes was attributable to equity investments that are held as of ~~September~~June 30, ~~2017~~2019 in three of our corporate subsidiaries. The net ~~gain~~loss for the three months ended ~~September~~June 30, ~~2016~~2018 was primarily driven by the realized loss on our investment American Tire Distributors ("ATD"), which was sold during the quarter ended June 30, 2018 due to ATD's reported loss of its largest supplier. Our realized losses were partially offset by the overall increase in the market prices of our investments during the ~~period, but also included a further mark down of our investment in one portfolio company that was placed on non-accrual.~~period.

Results of Operations for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016~~2018

Revenue


	Nine Months Ended				Six Months Ended
(in thousands)	September 30, 2017		September 30, 2016		June 30, 2019		June 30, 2018
Interest income	$	111,275	$	112,119	$	99,559	$	76,829
Total dividend income	26,273		6,423		26,068		24,703
Other income	7,014		5,758		5,029		5,955
Total investment income	$	144,562	$	124,300	$	130,656	$	107,487

Our total investment income increased by approximately ~~$20.3~~$23.2 million, or 22%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 as compared to the ~~nine~~six months ended June 30, 2018. For the six months ended June 30, 2019, total investment income of approximately $130.7 million consisted of approximately $91.1 million in cash interest from investments, approximately $6.1 million in PIK and non-cash interest from investments, approximately $0.2 million in prepayment fees, net amortization of purchase premiums and discounts of approximately $2.2 million, approximately $17.3 million in cash dividends from investments, approximately $8.8 million in PIK and non-cash dividends from investments and approximately $5.0 million in other income. The increase in interest income of approximately $22.7 million during the six months ended June 30, 2019 as compared to the six months ended June 30, 2018 was primarily due to increased interest income which is attributable to larger invested balances and higher LIBOR rates. Our larger invested balances were driven by the proceeds from our August 2018 and June 2019 convertible notes issuances, proceeds from our July 2018, September ~~30, 2016. The 16%~~2018 and April 2019 unsecured notes issuances, higher drawn balances on our Holdings Credit Facility (as defined below), borrowings from our DB Credit Facility (as defined below) and proceeds from our February 2019 public offering of our common stock all of which contributed to the origination of new investments. Also contributing to the increase in total investment income ~~primarily results from an~~is the increase in dividend income of approximately ~~$19.9~~$1.4 million ~~during the nine months ended September 30, 2017 as compared~~which is due to ~~the nine months ended September 30, 2016. The increase is primarily due to~~cash distributions from our investments in NMNLC and SLP ~~II and NMNLC~~III and PIK and non-cash dividend income from ~~four~~six portfolio companies where we hold equity positions. Other income during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, which represents fees that are generally non-recurring in nature, was primarily attributable to ~~structuring,~~ upfront, ~~amendment,~~commitment, consent ~~bridge~~ and ~~commitment~~amendment fees received from ~~thirty-two~~seventeen different portfolio companies and management fees from a non-controlled affiliated portfolio company. Interest income decreased by approximately $0.8 million from the nine months ended September 30, 2016 to the nine months ended September 30, 2017, which is attributable to lower prepayment fees received associated with the early repayment of portfolio companies held as of December 31, 2016.

Operating Expenses


	Nine Months Ended						Six Months Ended
(in thousands)	September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018
Management fee	$	24,311		$	20,537		$	22,615		$	17,993
Less: management fee waiver	(4,324		)	(3,662		)	(5,356		)	(2,817		)
Total management fee	19,987			16,875			17,259			15,176
Incentive fee	18,430			16,266			13,850			12,864
Less: incentive fee waiver	(1,800		)	—
Total incentive fee	16,630			16,266
Capital gains incentive fee(1)	—			—
Interest and other financing expenses	26,930			20,544			39,865			24,114
Professional fees	2,391			2,461			1,652			1,402
Administrative expenses	2,022			2,054			2,144			1,761
Other general and administrative expenses	1,214			1,206			810			928
Total expenses	69,174			59,406			75,580			56,245
Less: expenses waived and reimbursed	(474		)	(347		)	(335		)	(276		)
Net expenses before income taxes	68,700			59,059			75,245			55,969
Income tax expense	341			113			13			61
Net expenses after income taxes	$	69,041		$	59,172		$	75,258		$	56,030


~~(1)~~	~~Capital gains incentive fee accrual assumes a hypothetical liquidation basis.~~

Our total net operating expenses increased by approximately ~~$9.9~~$19.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2018. Our management fee increased by approximately ~~$3.1~~$2.1 million, net of a management fee waiver, and our incentive fee increased by approximately $1.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2018. The increase in management and incentive fees ~~from the nine months ended September 30, 2016 to the nine months ended September 30, 2017~~ was attributable to larger invested balances, driven by the ~~October 2016 and April 2017 primary offerings of~~proceeds from our ~~common stock,~~convertible notes issuances, our ~~September 2016 and June 2017~~ unsecured notes ~~issuance and~~issuances, our ~~September 2016 convertible notes issuance~~February 2019 public offering of common stock and our use of leverage from our revolving credit facilities and SBA-guaranteed debentures used to originate new investments. Our incentive fees decreased by approximately $0.4 million, net of an incentive fee waiver, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, which was mainly attributable to an incentive fee waiver by the Investment Adviser for the three months ended September 30, 2017 of approximately $1.8 million.

Interest and other financing expenses increased by approximately ~~$6.4~~$15.8 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018, primarily due to our ~~issuance~~issuances of ~~our~~convertible and unsecured notes, ~~and additional issuance of our convertible notes and~~ higher drawn balances on our SBA-guaranteed debentures, ~~and~~ Holdings Credit Facility ~~(as defined below).~~and DB Credit Facility and higher LIBOR rates. Our total professional fees, ~~total~~ administrative expenses and total other general and administrative expenses ~~remained relatively flat~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2018 remained relatively flat.

Net Realized Gains (Losses) and Net Change in Unrealized Appreciation (Depreciation)

Nine Months Ended
(in thousands) September 30, 2017 September 30, 2016
Net realized (losses) gains on investments $ (39,843 ) $ 2,191
Net change in unrealized appreciation (depreciation) of investments 48,700
10,716
Net change in unrealized (depreciation) appreciation securities purchased under collateralized agreements to resell (2,382 ) (1,031 )
Benefit for taxes 525
819
Net realized and unrealized gains (losses) $ 7,000
$ 12,695



	Six Months Ended
(in thousands)	June 30, 2019			June 30, 2018
Net realized gains (losses) on investments	$	98		$	(6,403	)
Net change in unrealized appreciation of investments	12,329			2,919
Net change in unrealized depreciation securities purchased under collateralized agreements to resell	—			(12		)
Provision for taxes	(160		)	(984		)
Net realized and unrealized gains (losses)	$	12,267		$	(4,480	)

Our net realized ~~losses~~ and unrealized gains resulted in a net gain of approximately ~~$7.0~~$12.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 compared to net realized losses and unrealized gains resulting in a net ~~gain~~loss of approximately ~~$12.7~~$4.5 million for the same period in ~~2016.~~2018. 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 gain for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 was primarily driven by the overall increase in ~~the~~ market prices of our investments during the period. With the completion of the Transtar and Sierra restructurings in April 2017 and July 2017, respectively, $27.6 million and $14.5 million, respectively, of previously recorded unrealized depreciation related to these investments were realized during the nine months ended September 30, 2017. The ~~benefit~~provision for income taxes was attributable to equity investments that are held as of ~~September~~June 30, ~~2017~~2019 in three of our corporate subsidiaries. The net ~~gain~~loss for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2018 was primarily driven by the ~~overall increase in the market prices of our investments during the period, but also included a further mark down of~~realized loss on our investment in ~~one portfolio company that~~ATD, which was ~~placed on non-accrual.~~sold during the quarter ended June 30, 2018 due to ATD's reported loss of its largest supplier.

Liquidity and Capital Resources

The primary use of existing funds and any funds raised in the future is expected to be for repayment of indebtedness, investments in portfolio companies, cash distributions to our stockholders or for other general corporate purposes.

On February 14, 2019, we completed a public offering of 4,312,500 shares of our common stock (including 562,500 shares of common stock that were issued pursuant to the full exercise of the overallotment option granted to the underwriters to purchase additional shares) at a public offering price of $13.57 per share. The Investment Adviser paid all of the underwriters' sales load of $0.42 per share and an additional supplemental payment of $0.18 per share to the underwriters, which reflects the difference between the public offering price of $13.57 per share and the net proceeds of $13.75 per share received by us in this offering. All payments made by the Investment Adviser are not subject to reimbursement by us. We received total net proceeds of approximately $59.3 million in connection with this offering.

Since our IPO, and through ~~September~~June 30, ~~2017,~~2019, we raised approximately ~~$614.6~~$673.9 million in net proceeds from additional offerings of our common stock.

On April 7, 2017, we completed a public offering of 5,000,000 shares of our common stock at a public offering price of $14.60 per share. On April 13, 2017, in connection with the public offering, the underwriters completed a purchase of an additional 750,000 shares of our common stock with the exercise of the overallotment option to purchase up to an additional 750,000 shares of our common stock. The Company received total net proceeds of approximately $81.5 million in connection with the offering.

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. As permitted by the Small Business Credit Availability Act (the “SBCA”) on June 8, 2018 our shareholders approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCA, which resulted in the reduction from 200.0% to 150.0% of the minimum asset coverage ratio applicable to us 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 ~~200.0%~~150.0% after such ~~borrowing.~~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 our SBA-guaranteed debentures from the 150.0% asset coverage ratio that the we are required to maintain under the 1940 Act. The agreements governing the NMFC Credit Facility, the 2018 Convertible Notes and the Unsecured Notes (as defined below) 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 June 30, 2019, our asset coverage ratio was 175.1%.

At ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we had cash and cash equivalents of approximately ~~$39.6~~$87.2 million and ~~$45.9~~$49.7 million, respectively. Our cash ~~(used in) provided by~~used in operating activities during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016~~2018 was approximately ~~$(144.5)~~$169.7 million and ~~$112.8~~$158.3 million, respectively. We expect that all current liquidity needs will be met with cash flows from operations and other activities.

Borrowings

Holdings Credit Facility—On December 18, 2014, we entered into the Second Amended and Restated Loan and Security Agreement ~~(the "Holdings Credit Facility"),~~ among us, as the Collateral Manager, NMF Holdings, as the Borrower, Wells Fargo Securities, LLC, as the Administrative Agent and Wells Fargo Bank, National Association, as the Lender and Collateral Custodian ~~which~~(as amended from time to time, the "Holdings Credit Facility"). As of the most recent amendment on May 7, 2019, the maturity date of the Holdings Credit Facility is ~~structured~~October 24, 2022, and the maximum facility amount is the lesser of $800.0 million and the actual commitments of the lenders to make advances as ~~a revolving credit facility and matures on December 18, 2019.~~of such date.

~~The~~As of June 30, 2019, the maximum amount of revolving borrowings available under the Holdings Credit Facility is ~~$495.0~~$720.0 million. Under the Holdings Credit Facility, NMF Holdings is permitted to borrow up to 25.0%, 45.0% or 70.0% of the purchase price of pledged assets, subject to approval by Wells Fargo ~~Securities, LLC.~~Bank, National Association. The Holdings Credit Facility is non-recourse to us and is collateralized by all of the investments of NMF Holdings on an investment by investment basis. All fees associated with the origination or upsizing of the Holdings Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the Holdings Credit Facility. The Holdings Credit Facility contains certain customary affirmative and negative covenants and events of default. In addition, the Holdings Credit Facility requires us to maintain a minimum asset coverage ~~ratio.~~ratio of 150.0%. The covenants are generally not tied to mark to market fluctuations in the prices of NMF Holdings investments, but rather to the performance of the underlying portfolio companies.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
(in millions)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	3.1		$	2.2		$	8.7		$	7.2		$	6.4		$	3.6		$	12.7		$	6.7
Non-usage fee	$	0.1		$	0.2		$	0.5		$	0.5		$	0.2		$	0.2		$	0.3		$	0.4
Amortization of financing costs	$	0.4		$	0.4		$	1.2		$	1.2		$	0.7		$	0.6		$	1.4		$	1.2
Weighted average interest rate	3.4		%	2.8		%	3.3		%	2.7		%	4.5		%	4.1		%	4.5		%	4.0		%
Effective interest rate	4.1		%	3.6		%	4.0		%	3.4		%	5.1		%	5.0		%	5.1		%	5.0		%
Average debt outstanding	$	352.4		$	318.4		$	351.6		$	353.6		$	565.9		$	351.5		$	566.1		$	337.3

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the Holdings Credit Facility was ~~$376.2~~$549.1 million and ~~$333.5~~$512.6 million, respectively, and NMF Holdings was in compliance with the applicable covenants in the Holdings Credit Facility on such dates.

NMFC Credit Facility—The Senior Secured Revolving Credit Agreement, as(as amended ~~dated June 4, 2014 (together~~from time to time, and together with the related guarantee and security agreement, the "NMFC Credit Facility"), dated June 4, 2014, among us, as the Borrower, Goldman Sachs Bank USA, as the Administrative Agent and Collateral Agent, and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A. and Stifel Bank & Trust, as Lenders, is structured as a senior secured revolving credit ~~facility and matures on June 4, 2019.~~facility. The NMFC Credit Facility is guaranteed by certain of our domestic subsidiaries and proceeds from the NMFC Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. As of the most recent amendment on July 5, 2018, the maturity date of the NMFC Credit Facility is June 4, 2022 and the NMFC Credit Facility includes the financial covenants related to the asset coverage discussed above.

As of ~~September~~June 30, ~~2017,~~2019, the maximum amount of revolving borrowings available under the NMFC Credit Facility was ~~$122.5~~$135.0 million. We are permitted to borrow at various advance rates depending on the type of portfolio investment as outlined in the related Senior Secured Revolving Credit Agreement. All fees associated with the origination of the NMFC Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the NMFC Credit Facility. The NMFC Credit Facility contains certain customary affirmative and negative covenants and events of default, including certain financial covenants related to the asset coverage and liquidity and other maintenance covenants.


	Three Months Ended						Nine Months Ended						Three Months Ended								Six Months Ended
(in millions)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019				June 30, 2018				June 30, 2019			June 30, 2018
Interest expense	$	0.2		$	0.7		$	1.3		$	1.9		$	1.2			$	1.5			$	2.2		$	2.4
Non-usage fee	$	0.1		$	0.1		$	0.2		$	0.1		$	—		(1)	$	—		(1)	$	0.1		$	0.1
Amortization of financing costs	$	0.1		$	0.1		$	0.3		$	0.3		$	0.1			$	0.1			$	0.2		$	0.2
Weighted average interest rate	3.6		%	3.0		%	3.5		%	3.0		%	5.0		%		4.5		%		5.0		%	4.4		%
Effective interest rate	7.3		%	3.6		%	5.0		%	3.6		%	5.6		%		4.9		%		5.8		%	5.0		%
Average debt outstanding	$	21.7		$	89.4		$	48.0		$	85.0		$	92.5			$	135.8			$	87.0		$	108.9


(1)	For the three months ended June 30, 2019 and June 30, 2018, the total non-usage fees were less than $50 thousand.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the NMFC Credit Facility was ~~$19.0~~$135.0 million and ~~$10.0~~$60.0 million, respectively, and NMFC was in compliance with the applicable covenants in the NMFC Credit Facility on such dates.

As of June 30, 2019, the maximum amount of revolving borrowings available under the DB Credit Facility was $150.0 million. We are permitted to borrow at various advance rates depending on the type of portfolio investment, as outlined in the Loan Financing and Servicing Agreement. The DB Credit Facility is non-recourse to us and is collateralized by all of the investments of NMFDB on an investment by investment basis. All fees associated with the origination of the DB Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the DB Credit Facility. The DB Credit Facility contains certain customary affirmative and negative covenants and events of default. The covenants are generally not tied to mark to market fluctuations in the prices of NMFDB investments, but rather to the performance of the underlying portfolio companies.

The advances under the DB Credit Facility accrue interest at a per annum rate equal to the Applicable Margin plus the lender's Cost of Funds Rate. Prior to June 28, 2019, the "Applicable Margin" was equal to 2.85% during the Revolving Period and then increases by 0.20% during an Event of Default. Effective June 28, 2019, the Applicable Margin is equal to 2.60% during the Revolving Period and then increases by 0.20% during an Event of Default. The "Cost of Funds Rate" for a conduit lender is the lower of its commercial paper rate and the Base Rate plus 0.50%, and for any other lender is the Base Rate. The "Base Rate" is the three-months LIBOR Rate but may become an alternative base rate based on Deutsche Bank's base lending rate if certain LIBOR disruption events occur. We are also charged a non-usage fee, based on the unused facility amount multiplied by the Undrawn Fee Rate (as defined in the Loan Financing and Servicing Agreement) and a facility agent fee of 0.25% per annum on the total facility amount.



	Three Months Ended							Six Months Ended
(in millions)	June 30, 2019				June 30, 2018(1)			June 30, 2019			June 30, 2018(1)
Interest expense(2)	$	0.9			$	—		$	1.4		$	—
Non-usage fee(2)	$	—		(3)	$	—		$	0.1		$	—
Amortization of financing costs	$	0.1			$	—		$	0.2		$	—
Weighted average interest rate	5.5		%		—		%	5.5		%	—		%
Effective interest rate	6.3		%		—		%	6.6		%	—		%
Average debt outstanding	$	66.9			$	—		$	52.7		$	—


(1)	Not applicable as the DB Credit Facility commenced on December 14, 2018.


(2)	Interest expense includes the portion of the facility agent fee applicable to the drawn portion of the DB Credit Facility and non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the DB Credit Facility.


(3)	For the three months ended June 30, 2019, the total non-usage fees were less than $50 thousand.

As of June 30, 2019 and December 31, 2018, the outstanding balance on the DB Credit Facility was $100.0 million and $57.0 million, respectively, and NMFDB was in compliance with the applicable covenants in the DB Credit Facility on such dates.

NMNLC Credit Facility—The Revolving Credit Agreement (together with the related guarantee and security agreement, the “NMNLC Credit Facility”), dated September 21, 2018, among NMNLC, as the Borrower, and KeyBank National Association, as the Administrative Agent and Lender, is structured as a senior secured revolving credit facility and matures on September 23, 2019. The NMNLC Credit Facility is guaranteed by us and proceeds from the NMNLC Credit Facility may be used for funding of additional acquisition properties.

As of June 30, 2019, the maximum amount of revolving borrowings available under the NMNLC Credit Facility was $30.0 million. For the three months ended June 30, 2019, interest expense, non-usage fees and amortization of financing costs

were each less than $50 thousand. For the six months ended June 30, 2019, interest expense and non-usage fees were each less than $50 thousand and amortization of financing costs were and $0.1 million. As of June 30, 2019 and December 31, 2018, the outstanding balance on the NMNLC Credit Facility was $0 and NMNLC was in compliance with the applicable covenants in the NMNLC Credit Facility on such dates.

Convertible Notes

2014 Convertible Notes—On June 3, 2014, we closed a private offering of $115.0 million aggregate principal amount of unsecured convertible notes (the ~~"Convertible Notes"~~“2014 Convertible Notes”), pursuant to an indenture, dated June 3, 2014 (the ~~"Indenture"~~“2014 Indenture”). The 2014 Convertible Notes were issued in a private placement only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). As of June 3, 2015, the restrictions under Rule 144A under the Securities Act were removed, allowing the 2014 Convertible Notes to be eligible and freely tradable without restrictions for resale pursuant to Rule 144(b)(1) under the Securities Act. On September 30, 2016, we closed a public offering of an additional $40.3 million aggregate principal amount of the 2014 Convertible Notes. These additional 2014 Convertible Notes constituted a further issuance of, ranked equally in right of payment with, and formed a single series with the $115.0 million aggregate principal amount of 2014 Convertible Notes that we issued on June 3, 2014.

The 2014 Convertible Notes bore interest at an annual rate of 5.0%, payable semi-annually in arrears on June 15 and December 15 of each year, which commenced on December 15, 2014. The 2014 Convertible Notes matured on June 15, 2019.

On June 15, 2019, our $155.3 million aggregate principal amount of 2014 Convertible Notes matured and we repaid the outstanding principal and accrued but unpaid interest in cash.

2018 Convertible Notes—On August 20, 2018, we closed a registered public offering of $100.0 million aggregate principal amount of unsecured convertible notes (the “2018 Convertible Notes” and together with the 2014 Convertible Notes, the "Convertible Notes"), pursuant to an indenture, dated August 20, 2018, as supplemented by a first supplemental indenture thereto, dated August 20, 2018 (together the “2018A Indenture”). On August 30, 2018, in connection with the registered public offering, we issued an additional $15.0 million aggregate principal amount of the 2018 Convertible Notes pursuant to the exercise of an overallotment option by the underwriter of the 2018 Convertible Notes. On June 7, 2019, we closed a registered public offering of an additional $86.3 million aggregate principal amount of the 2018 Convertible Notes. These additional 2018 Convertible Notes constitute a further issuance of, rank equally in right of payment with, and form a single series with the $115.0 million aggregate principal amount of 2018 Convertible Notes that we issued ~~on June 3, 2014.~~in August 2018.

The 2018 Convertible Notes bear interest at an annual rate of ~~5.0%~~5.75%, payable semi-annually in arrears on ~~June~~February 15 and ~~December~~August 15 of each year, which commenced on ~~December~~February 15, ~~2014.~~2019. The 2018 Convertible Notes will mature on ~~June~~August 15, ~~2019~~2023 unless earlier converted, repurchased or redeemed pursuant to the terms of the 2018A Indenture. We may not redeem the 2018 Convertible Notes prior to May 15, 2023. On or after May 15, 2023, we may redeem the 2018 Convertible Notes for cash, in whole or from time to time in part, at our option at a redemption price, subject to an exception for redemption dates occurring after a record date but on or prior to the interest payment date, equal to the sum of (i) 100% of the principal amount of the 2018 Convertible Notes to be redeemed, (ii) accrued and unpaid interest thereon to, but excluding, the redemption date and (iii) a make-whole premium.

No sinking fund is provided for the 2018 Convertible Notes. Holders of 2018 Convertible Notes may, at their option, convert their 2018 Convertible Notes into shares of our common stock at any time on or prior to the close of business on the business day immediately preceding the maturity date of the 2018 Convertible Notes. In addition, if certain corporate events occur, holders of the 2018 Convertible Notes may require us to repurchase for cash all or part of their 2018 Convertible Notes at a repurchase price equal to 100.0% of the principal amount of the 2018 Convertible Notes to be repurchased, atplus accrued and unpaid interest through, but excluding, the ~~holder's option.~~repurchase date.

The 2018A Indenture contains certain covenants, including covenants requiring us to provide certain financial information to the holders of the 2018 Convertible Notes and the trustee if we cease to be subject to the reporting requirements of the Exchange Act. The 2018A Indenture also includes additional financial covenants related to our asset coverage ratio. These covenants are subject to limitations and exceptions that are described in the 2018A Indenture.

The following table summarizes certain key terms related to the convertible features of our 2018 Convertible Notes as of ~~September~~June 30, ~~2017.~~2019.


	September 30, 2017			2018 Convertible Notes
Initial conversion premium	12.5		%	10.0		%
Initial conversion rate(1)	62.7746			65.8762
Initial conversion price	$	15.93		$	15.18
Conversion premium at September 30, 2017	11.7		%
Conversion rate at September 30, 2017(1)(2)	63.2794
Conversion price at September 30, 2017(2)(3)	$	15.80
Conversion premium at June 30, 2019				10.0		%
Conversion rate at June 30, 2019(1)(2)				65.8762
Conversion price at June 30, 2019(2)(3)				$	15.18
Last conversion price calculation date	June 3, 2017			August 20, 2018


(1)	Conversion rates denominated in shares of common stock per $1.0 thousand principal amount of the 2018 Convertible Notes converted.


(2)	Represents conversion rate and conversion price, as applicable, taking into account certain de minimis adjustments that will be made on the conversion date.


(3)	The conversion price in effect at ~~September~~June 30, ~~2017~~2019 was calculated on the last anniversary of the issuance and will be calculated again on the next anniversary, unless the exercise price shall have changed by more than 1.0% before the anniversary.

The conversion rate will be subject to adjustment upon certain events, such as stock splits and combinations, mergers, spin-offs, increases in distributions in excess of $0.34 per share per quarter and certain changes in control. Certain of these adjustments, including adjustments for increases in distributions, are subject to a conversion price floor of ~~$14.05~~$13.80 per share. In no event will the total number of shares of common stock issuable upon conversion exceed ~~71.1893~~72.4637 per $1.0 thousand principal ~~amount of the Convertible Notes.~~amount. We have determined that the embedded conversion option in the 2018 Convertible Notes is not required to be separately accounted for as a derivative under GAAP.

The 2018 Convertible Notes are unsecured obligations and rank senior in right of payment to our existing and future indebtedness, if any, that is expressly subordinated in right of payment to the 2018 Convertible Notes; equal in right of payment to our existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries and financing vehicles. The issuance is considered part of the if-converted method for calculation of diluted earnings per share.

We may not redeem the Convertible Notes prior to maturity. No sinking fund is provided for the Convertible Notes. In addition, if certain corporate events occur, holders of the Convertible Notes may require us to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100.0% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the repurchase date.

The Indenture contains certain covenants, including covenants requiring us to provide financial information to the holders of the Convertible Note and the Trustee if we cease to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These covenants are subject to limitations and exceptions that are described in the Indenture.

The following table summarizes the interest expense, amortization of financing costs and amortization of premium incurred on the Convertible Notes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~September~~June 30, ~~2016.~~2018.


	Three Months Ended							Nine Months Ended						Three Months Ended						Six Months Ended
(in millions)	September 30, 2017				September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	1.9			$	1.4		$	5.8		$	4.3		$	3.6		$	2.0		$	7.2		$	3.9
Amortization of financing costs	$	0.3			$	0.2		$	0.9		$	0.6		$	0.3		$	0.3		$	0.6		$	0.6
Amortization of premium	$	—		(1)	$	—		$	(0.1	)	$	—		$	(0.1	)	$	(0.1	)	$	(0.1	)	$	(0.1	)
Weighted average interest rate														5.4		%	5.0		%	5.4		%	5.0		%
Effective interest rate	5.7		%		5.6		%	5.7		%	5.7		%	5.7		%	5.7		%	5.8		%	5.7		%
Average debt outstanding	$	155.3			$	155.4		$	155.3		$	115.1		$	265.7		$	155.3		$	268.0		$	155.3


~~(1)~~	~~For the three months ended September 30, 2017, the total amortization of premium was less than $50 thousand.~~

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the Convertible Notes was ~~$155.3~~$201.2 million and ~~$155.3~~$270.3 million, respectively, and NMFC was in compliance with the terms of the 2018A Indenture on such ~~dates.~~date.

Unsecured Notes—

On May 6, 2016, we issued $50.0 million in aggregate principal amount of five-year unsecured notes that mature on May 15, 2021 (the “2016 Unsecured Notes”), pursuant to a note purchase agreement, dated May 4, 2016, to an institutional investor in a private placement. On September 30, 2016, we entered into an amended and restated note purchase agreement (the "NPA") and issued an additional $40.0 million in aggregate principal amount of 2016 Unsecured Notes to institutional investors in a private placement. On June 30, 2017, we issued $55.0 million in aggregate principal amount of five-year unsecured notes that mature on July 15, 2022 (the "2017A Unsecured Notes" ~~and together with the 2016 Unsecured Notes, the "Unsecured Notes"~~), pursuant to the NPA and a supplement to the NPA. On January

30, 2018, we issued $90.0 million in aggregate principal amount of five year unsecured notes that mature on January 30, 2023 (the "2018A Unsecured Notes") pursuant to the NPA and a second supplement to the NPA. On July 5, 2018, we issued $50.0 million in aggregate principal amount of five year unsecured notes that mature on June 28, 2023 (the "2018B Unsecured Notes") pursuant to the NPA and a third supplement to the NPA (the "Third Supplement"). On April 30, 2019, we issued $116.5 million in aggregate principal amount of five year unsecured notes that mature on April 30, 2024 (the "2019A Unsecured Notes") pursuant to the NPA and a fourth supplement to the NPA. The NPA provides for future issuances of ~~Unsecured Notes~~unsecured notes in separate series or tranches. ~~The Unsecured Notes are equal in priority with our other unsecured indebtedness, including our Convertible Notes.~~

The 2016 Unsecured Notes bear interest at an annual rate of 5.313%, payable semi-annually on May 15 and November 15 of each year, which commenced on November 15, 2016. The 2017A Unsecured Notes bear interest at an annual rate of 4.760%, payable semi-annually on January 15 and July 15 of each year, which ~~commences~~commenced on January 15, 2018. The 2018A Unsecured Notes bear interest at an annual rate of 4.870%, payable semi-annually on February 15 and August 15 of each year, which commenced on August 15, 2018. The 2018B Unsecured Notes bear interest at an annual rate of 5.360%, payable semi-annually on January 15 and July 15 of each year, which commenced on January 15, 2019. The 2019A Unsecured Notes bear interest at an annual rate of 5.494%, payable semi-annually on April 15 and October 15 of each year, commencing on October 15, 2019. These interest rates are subject to increase in the event that: (i) subject to certain exceptions, the ~~Unsecured Notes~~underlying unsecured notes or we cease to have an investment grade rating or (ii) the aggregate amount of our unsecured debt falls below $150.0 million. In each such event, we have the option to offer to prepay the ~~Unsecured Notes~~underlying unsecured notes at par, in which case holders of the ~~Unsecured Notes~~underlying unsecured notes who accept the offer would not receive the increased interest rate. In addition, we are obligated to offer to prepay the ~~Unsecured Notes~~underlying unsecured notes at par if the Investment Adviser, or an affiliate thereof, ceases to be our investment adviser or if certain change in control events occur with respect to the Investment Adviser.

The NPA contains customary terms and conditions for unsecured notes issued, ~~in a private placement,~~ including, without limitation, an option to offer to prepay all or a portion of the ~~Unsecured Notes~~unsecured notes under its governance at par (plus a make-whole amount if applicable), affirmative and negative covenants such as information reporting, maintenance of our status as a BDC under the 1940 Act and a RIC under the ~~Internal Revenue~~ Code, minimum stockholders’ equity, minimum asset coverage ratio, and prohibitions on certain fundamental changes at NMFC 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 ~~our~~ other indebtedness of NMFC or certain significant subsidiaries, certain judgments and orders, and certain events of bankruptcy. The Third Supplement includes additional financial covenants related to asset coverage as well as other terms.

On September 25, 2018, we closed a registered public offering of $50.0 million in aggregate principal amount of five-year 5.75% unsecured Notes (the "5.75% Unsecured Notes" and together with the 2016 Unsecured Notes, 2017A Unsecured Notes, 2018A Unsecured Notes, 2018B Unsecured Notes and 2019A Unsecured Notes, the "Unsecured Notes"), pursuant to an indenture, dated August 20, 2018, as supplemented by a second supplemental indenture thereto, dated September 25, 2018 (together, the "2018B Indenture"). On October 17, 2018, in connection with the registered public offering, we issued an additional $1.8 million aggregate principal amount of the 5.75% Unsecured Notes pursuant to the exercise of an overallotment option by the underwriters of the 5.75% Unsecured Notes.

We may redeem the 5.75% Unsecured Notes, in whole or in part, at any time, or from time to time, at our option on or after October 1, 2020, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption price of 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to but not including the date fixed for redemption.

No sinking fund is provided for the 5.75% Unsecured Notes and holders of the 5.75% Unsecured Notes have no option to have their 5.75% Unsecured Notes repaid prior to the stated maturity date.

The 2018B Indenture contains certain covenants, including covenants requiring us to (i) comply with the asset coverage requirements set forth in Section 18(a)(1)(A) of the 1940 Act as modified by Section 61(a) of the 1940 Act as may be applicable to us from time to time or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, but giving effect, in either case, to any exemptive relief granted to us by the SEC and (ii) provide certain financial information to the holders of the 5.75% Unsecured Notes and the trustee if we cease to be subject to the reporting requirements of the Exchange Act. The 2018B Indenture also includes additional financial covenants related to asset coverage. These covenants are subject to limitations and exceptions that are described in the 2018B Indenture.

The Unsecured Notes are unsecured obligations and rank senior in right of payment to our existing and future indebtedness, if any, that is expressly subordinated in right of payment to the Unsecured Notes; equal in right of payment to our existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries and financing vehicles.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
(in millions)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016(1)			June 30, 2019(1)			June 30, 2018(2)			June 30, 2019(1)			June 30, 2018(2)
Interest expense	$	1.8		$	0.7		$	4.2		$	1.1		$	5.4		$	2.9		$	9.8		$	5.5
Amortization of financing costs	$	0.1		$	0.1		$	0.3		$	0.1		$	0.3		$	0.1		$	0.6		$	0.3
Weighted average interest rate													5.2		%	5.0		%	5.2		%	5.1		%
Effective interest rate	5.5		%	5.8		%	5.7		%	5.8		%	5.5		%	5.3		%	5.6		%	5.4		%
Average debt outstanding	$	145.0		$	50.4		$	108.7		$	50.3		$	416.1		$	235.0		$	376.7		$	220.6


(1)	For the ~~nine~~three and six months ended ~~September~~June 30, ~~2016,~~2019, amounts reported ~~relate~~include interest and amortization of financing costs related to the 2019A Unsecured Notes for the period from ~~May 6, 2016~~April 30, 2019 (issuance date of the 2019A Unsecured Notes) to ~~September~~June 30, ~~2016.~~2019.


(2)	For the three and six months ended June 30, 2018, amounts reported include interest and amortization of financing costs related to the 2018A Unsecured Notes for the period from January 30, 2018 (issuance date of the 2018A Unsecured Notes) to June 30, 2018.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the outstanding balance on the Unsecured Notes was ~~$145.0~~$453.3 million and ~~$90.0~~$336.8 million, respectively, and we were in compliance with the terms of the ~~NPA.~~NPA and the 2018B Indenture as of such dates, as applicable.

SBA-guaranteed debentures—On August 1, 2014 and August 25, 2017, respectively, SBIC I and SBIC II received an SBIC ~~license~~licenses from the ~~SBA.~~SBA to operate as SBICs.

The SBIC license allows ~~SBIC I~~SBICs to obtain leverage by issuing SBA-guaranteed debentures, subject to the issuance of a capital commitment by the SBA and other customary procedures. SBA-guaranteed debentures are non-recourse to us, interest only debentures with interest payable semi-annually and have a ten year maturity. The principal amount of SBA-guaranteed debentures is not required to be paid prior to maturity but may be prepaid at any time without penalty. The interest rate of SBA-guaranteed debentures is fixed on a semi-annual basis at a market-driven spread over U.S. Treasury Notes with ten year maturities. The SBA, as a creditor, will have a superior claim to the assets of SBIC I and SBIC II over our stockholders in the event SBIC I isand SBIC II are liquidated or the SBA exercises remedies upon an event of default.

The maximum amount of borrowings available under current SBA regulations for a single licensee is $150.0 million as long as the licensee has at least $75.0 million in regulatory capital, receives a capital commitment from the SBA and has been through an examination by the SBA subsequent to licensing. In June 2018, legislation amended the 1958 Act by increasing the individual leverage limit from $150.0 million to $175.0 million, subject to SBA approvals.

As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, SBIC I had regulatory capital of $75.0 million and $75.0 million, respectively, and SBA-guaranteed debentures outstanding of ~~$144.0~~$150.0 million and ~~$121.7~~$150.0 million, respectively. As of June 30, 2019 and December 31, 2018, SBIC II had regulatory capital of $42.5 million and $42.5 million, respectively, and $15.0 million and $15.0 million, respectively, of SBA-guaranteed debentures outstanding. The SBA-guaranteed debentures incur upfront fees of 3.425%, which consists of a 1.00% commitment fee and a 2.425% issuance discount, which are amortized over the life of the SBA-guaranteed debentures. The following table summarizes our SBA-guaranteed debentures as of ~~September~~June 30, ~~2017.~~2019.


(in millions)
Issuance Date	Maturity Date	Debenture Amount		Interest Rate		SBA Annual Charge		Maturity Date	Debenture Amount		Interest Rate		SBA Annual Charge
Fixed SBA-guaranteed debentures:
Fixed SBA-guaranteed debentures(1):
March 25, 2015	March 1, 2025	$	37.5	2.517	%	0.355	%	March 1, 2025	$	37.5	2.517	%	0.355	%
September 23, 2015	September 1, 2025	37.5		2.829	%	0.355	%	September 1, 2025	37.5		2.829	%	0.355	%
September 23, 2015	September 1, 2025	28.8		2.829	%	0.742	%	September 1, 2025	28.8		2.829	%	0.742	%
March 23, 2016	March 1, 2026	13.9		2.507	%	0.742	%	March 1, 2026	13.9		2.507	%	0.742	%
September 21, 2016	September 1, 2026	4.0		2.051	%	0.742	%	September 1, 2026	4.0		2.051	%	0.742	%
September 20, 2017	September 1, 2027	13.0		2.518	%	0.742	%	September 1, 2027	13.0		2.518	%	0.742	%
Interim SBA-guaranteed debentures:
	March 1, 2028(1)	9.3		1.769	%	0.742	%
March 21, 2018								March 1, 2028	15.3		3.187	%	0.742	%
Fixed SBA-guaranteed debentures(2):
September 19, 2018								September 1, 2028	15.0		3.548	%	0.222	%
Total SBA-guaranteed debentures		$	144.0						$	165.0


(1)	~~Estimated maturity date as interim~~ SBA-guaranteed debentures are ~~expected to pool~~held in ~~March 2018.~~SBIC I.


(2)	SBA-guaranteed debentures are held in SBIC II.


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
(in millions)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Interest expense	$	1.1		$	1.0		$	3.0		$	2.8		$	1.4		$	1.2		$	2.7		$	2.4
Amortization of financing costs	$	0.1		$	0.1		$	0.3		$	0.3		$	0.2		$	0.2		$	0.3		$	0.3
Weighted average interest rate	3.1		%	3.1		%	3.1		%	3.1		%	3.3		%	3.2		%	3.3		%	3.2		%
Effective interest rate	3.4		%	3.5		%	3.5		%	3.5		%	3.6		%	3.6		%	3.6		%	3.5		%
Average debt outstanding	$	134.9		$	121.7		$	127.0		$	119.2		$	165.0		$	154.3		$	165.0		$	152.2

The SBIC program is designed to stimulate the flow of private investor capital into eligible ~~small~~smaller businesses, as defined by the SBA. Under SBA regulations, ~~SBIC I is~~SBICs are subject to regulatory requirements, including making investments in SBA-eligible businesses, investing at least 25.0% of its investment capital in eligible smaller businesses, as defined under the 1958 Act, placing certain limitations on the financing terms of investments, regulating the types of financing, prohibiting investments in small businesses with certain characteristics or in certain industries and requiring capitalization thresholds that limit distributions to us. ~~SBIC I is~~SBICs are subject to an annual periodic examination by an SBA examiner to determine ~~SBIC I's~~the SBIC's compliance with the relevant SBA regulations and an annual financial audit of its financial statements that are prepared on a basis of accounting other than GAAP (such as ASC 820) by an independent auditor. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, SBIC I ~~was~~and SBIC II were in compliance with SBA regulatory requirements.

Off-Balance Sheet Arrangements

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~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we had outstanding commitments to third parties to fund investments totaling ~~$75.5~~$149.3 million and ~~$44.3~~

$137.9 million, respectively, under various undrawn revolving credit facilities, delayed draw commitments or other future funding commitments.

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~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we had commitment letters to purchase investments in an aggregate par amount of ~~$57.2~~$100.0 million and ~~$14.8~~$27.5 million, respectively. As of ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we had not entered into any bridge financing commitments which could require funding in the future.

As of ~~September~~June 30, ~~2017 and December 31, 2016,~~2019, we had unfunded commitments related to ~~our~~an equity investment in SLP IIIII of ~~$0 and $7.9~~$20.0 million, ~~respectively,~~ which ~~was~~may be funded at our discretion.

Contractual Obligations

A summary of our significant contractual payment obligations as of ~~September~~June 30, ~~2017~~2019 is as follows:


	Contractual Obligations Payments Due by Period										Contractual Obligations Payments Due by Period
(in millions)	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years		Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
Holdings Credit Facility(1)	$	376.2	$	—	$	376.2	$	—	$	—	$	549.1	$	—	$	—	$	549.1	$	—
Convertible Notes(2)	155.3		—		155.3		—		—
Unsecured Notes(3)	145.0		—		—		145.0		—
SBA-guaranteed debentures(4)	144.0		—		—		—		144.0
Unsecured Notes(2)											453.3		—		90.0		363.3		—
SBA-guaranteed debentures(3)											165.0		—		—		—		165.0
Convertible Notes(4)											201.2		—		—		201.2		—
NMFC Credit Facility(5)	19.0		—		19.0		—		—		135.0		—		135.0		—		—
DB Credit Facility(6)											100.0		—		—		100.0		—
Total Contractual Obligations	$	839.5	$	—	$	550.5	$	145.0	$	144.0	$	1,603.6	$	—	$	225.0	$	1,213.6	$	165.0

(1)

Under the terms of the ~~$495.0~~$720.0 million Holdings Credit Facility, all outstanding borrowings under that facility ($~~376.2~~549.1 million as of ~~September~~June 30, ~~2017)~~2019) must be repaid on or before ~~December 18, 2019.~~October 24, 2022. As of ~~September~~June 30, ~~2017,~~2019, there was approximately ~~$118.8~~$170.9 million of possible capacity remaining under the Holdings Credit Facility.


(2)	~~The $155.3 million Convertible Notes will mature on June 15, 2019 unless earlier converted or repurchased at the holder’s option.~~

~~(3)~~

$90.0 million of the 2016 Unsecured Notes will mature on May 15, 2021 unless earlier repurchased, ~~and~~ $55.0 million of the 2017A Unsecured Notes will mature on July 15, 2022 unless earlier repurchased, $90.0 million of the 2018A Unsecured Notes will mature on January 30, 2023 unless earlier repurchased, $50.0 million of the 2018B Unsecured Notes will mature on June 28, 2023 unless earlier repurchased, $51.8 million of the 5.75% Unsecured Notes will mature on October 1, 2023 unless earlier repurchased and $116.5 million of the 2019A Unsecured Notes will mature on April 30, 2024 unless earlier repurchased.


~~(4)~~(3)	Our SBA-guaranteed debentures will begin to mature on March 1, 2025.


(4)	The 2018 Convertible Notes will mature on August 15, 2023 unless earlier converted or repurchased at the holder's option or redeemed by us.


(5)	Under the terms of the ~~$122.5~~$135.0 million NMFC Credit Facility, all outstanding borrowings under that facility ($~~19.0~~135.0 million as of ~~September~~June 30, ~~2017)~~2019) must be repaid on or before June 4, ~~2019.~~2022. As of ~~September~~June 30, ~~2017,~~2019, there was ~~approximately $103.5 million of possible~~no capacity remaining under the NMFC Credit Facility.


(6)	Under the terms of the $150.0 million DB Credit Facility, all outstanding borrowings under that facility ($100.0 million as of June 30, 2019) must be repaid on or before December 14, 2023. As of June 30, 2019, there was $50.0 million of possible capacity remaining under the DB Credit Facility.

We have entered into the ~~Investment~~investment advisory and management agreement (the "Investment Management ~~Agreement~~Agreement") with the Investment Adviser in accordance with the 1940 Act. Under the Investment Management Agreement, the Investment Adviser has agreed to provide us with investment advisory and management services. We have agreed to pay for these services (1) a management fee and (2) an incentive fee based on our performance.

We have also entered into ~~the Administration Agreement~~an administration agreement, as amended and restated (the "Administration Agreement") with the Administrator. Under the Administration Agreement, the Administrator has agreed to arrange office space for us and provide office equipment and clerical, bookkeeping and record keeping services and other administrative services necessary to conduct our respective day-to-day operations. The Administrator has also agreed to maintain, or oversee the maintenance of, our financial records, our reports to stockholders and reports filed with the SEC.

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that are entered into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under the Investment Management Agreement and the Administration Agreement.

Distributions and Dividends

Distributions declared and paid to stockholders for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 totaled approximately ~~$75.1~~$54.7 million.

The following table reflects cash distributions, including dividends and returns of capital, if any, per share that have been declared by our board of directors for the two most recent fiscal years and the current fiscal year to date:

Fiscal Year Ended

Date Declared

Record Date

Payment Date

Per Share

Amount (1)

Date Declared

Record Date

Payment Date

Per Share

Amount (1)

December 31, 2017

Third Quarter

August 4, 2017

September 15, 2017

September 29, 2017

0.34

December 31, 2019

Second Quarter

May 4, 2017

June 16, 2017

June 30, 2017

0.34

May 1, 2019

June 14, 2019

June 28, 2019

0.34

First Quarter

February 23, 2017

March 17, 2017

March 31, 2017

0.34

February 22, 2019

March 15, 2019

March 29, 2019

0.34

1.02

0.68

December 31, 2016

December 31, 2018

Fourth Quarter

November 4, 2016

December 15, 2016

December 29, 2016

0.34

November 1, 2018

December 14, 2018

December 28, 2018

0.34

Third Quarter

August 2, 2016

September 16, 2016

September 30, 2016

0.34

August 1, 2018

September 14, 2018

September 28, 2018

0.34

Second Quarter

May 3, 2016

June 16, 2016

June 30, 2016

0.34

May 2, 2018

June 15, 2018

June 29, 2018

0.34

First Quarter

February 22, 2016

March 17, 2016

March 31, 2016

0.34

February 21, 2018

March 15, 2018

March 29, 2018

0.34

1.36

December 31, 2015

December 31, 2017

Fourth Quarter

November 3, 2015

December 16, 2015

December 30, 2015

0.34

November 2, 2017

December 15, 2017

December 28, 2017

0.34

Third Quarter

August 4, 2015

September 16, 2015

September 30, 2015

0.34

August 4, 2017

September 15, 2017

September 29, 2017

0.34

Second Quarter

May 5, 2015

June 16, 2015

June 30, 2015

0.34

May 4, 2017

June 16, 2017

June 30, 2017

0.34

First Quarter

February 23, 2015

March 17, 2015

March 31, 2015

0.34

February 23, 2017

March 17, 2017

March 31, 2017

0.34

1.36

(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, ~~2016~~2018 and December 31, ~~2015,~~2017, total distributions were ~~$88.8~~$103.4 million and ~~$81.0~~$100.9 million, respectively, of which the distributions were comprised of approximately ~~89.46%~~83.74% and ~~99.96%~~71.50%, respectively, of ordinary income, 0.00% and 0.00%, respectively, of long-term capital gains and approximately ~~10.54%~~16.26% and ~~0.04%~~28.50%, respectively, of a return of capital. Future quarterly distributions, if any, will be determined by our board of directors.

We intend to pay quarterly distributions to our stockholders in amounts sufficient to maintain our status as a RIC. We intend to distribute approximately all of our ~~Adjusted Net Investment Income~~net investment income on a quarterly basis and substantially all of our taxable income on an annual basis, except that we may retain certain net capital gains for reinvestment.

We maintain an "opt out" dividend reinvestment plan on behalf of our common stockholders, pursuant to which each of our stockholders' cash distributions will be automatically reinvested in additional shares of common stock, unless the stockholder elects to receive cash. See Item 1— Financial Statements—Note 2. Summary of Significant Accounting Policies for additional details regarding our dividend reinvestment plan.

Related Parties

We have entered into a number of business relationships with affiliated or related parties, including the following:

We have entered into the Investment Management Agreement with the Investment Adviser, a wholly-owned subsidiary of New Mountain Capital. Therefore, New Mountain Capital is entitled to any profits earned by the Investment Adviser, which includes any fees payable to the Investment Adviser under the terms of the Investment Management Agreement, less expenses incurred by the Investment Adviser in performing its services under the Investment Management Agreement.

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~~six months ended ~~September~~June 30, ~~2017~~2019 approximately ~~$0.4~~$0.7 million and ~~$1.1~~$1.4 million, respectively, of indirect administrative expenses were included in administrative expenses, of which approximately $0$0.3 million and ~~$0.4~~$0.3 million, respectively, ~~of indirect administrative expenses~~ were waived by the Administrator. As of ~~September~~June 30, ~~2017,~~2019, $0.4 million of indirect administrative expenses were included in payable to affiliates.

We, the Investment Adviser and the Administrator have entered into a royalty-free Trademark License Agreement, as amended, with New Mountain Capital, pursuant to which New Mountain Capital has agreed to grant us, the Investment Adviser and the Administrator a non-exclusive, royalty-free license to use the name "New Mountain" and "New Mountain Finance".

In addition, we have adopted a formal code of ethics that governs the conduct of our officers and directors. These officers and directors also remain subject to the duties imposed by the 1940 Act, the Delaware General Corporation Law and the Delaware Limited Liability Company Act.

The Investment Adviser and its affiliates may also manage other funds in the future that may have investment mandates that are similar, in whole or in part, to our investment mandates. The Investment Adviser and its affiliates may determine that an investment is appropriate for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, the Investment Adviser or its affiliates may determine that we should invest side-by-side with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff, and consistent with the Investment Adviser's allocation procedures. On ~~June 5,~~December 18, 2017, the SEC issued an exemptive order (the “Exemptive Order”), which superseded a prior order issued on June 5, 2017, which permits us to co-invest in portfolio companies with certain funds or entities managed by the Investment Adviser or its affiliates in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act, subject to the conditions of the Exemptive Order. Pursuant to the Exemptive Order, we are permitted to co-invest with our affiliates if a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors make certain conclusions in connection with a co-investment transaction, including, but not limited to, that (1) the terms of the potential co-investment transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned, and (2) the potential co-investment transaction is consistent with the interests of our stockholders and is consistent with our then-current investment objective and strategies.


Item 3.	Quantitative and Qualitative Disclosures About Market Risk

We are subject to certain financial market risks, such as interest rate fluctuations. During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, certain of the loans held in our portfolio had floating interest rates. As of ~~September~~June 30, ~~2017,~~2019, approximately ~~86.7%~~92.4% of investments at fair value (excluding investments on non-accrual, unfunded debt investments and non-interest bearing equity investments) represent floating-rate investments with a LIBOR floor (includes investments bearing prime interest rate contracts) and approximately ~~13.3%~~7.6% of investments at fair value represent fixed-rate investments. Additionally, our senior secured revolving credit facilities are also subject to floating interest rates and are currently paid based on ~~one-month~~ floating LIBOR rates.

The following table estimates the potential changes in net cash flow generated from interest income and expenses, should interest rates increase by 100, 200 or 300 basis points, or decrease by 25 basis points. Interest income is calculated as revenue from interest generated from our portfolio of investments held on ~~September~~June 30, ~~2017.~~2019. Interest expense is calculated based on the terms of our outstanding revolving credit facilities, convertible notes and unsecured notes. For our floating rate credit facilities, we use the outstanding balance as of ~~September~~June 30, ~~2017.~~2019. Interest expense on our floating rate credit facilities is calculated using the interest rate as of ~~September~~June 30, ~~2017,~~2019, adjusted for the hypothetical changes in rates, as shown below. The base interest rate case assumes the rates on our portfolio investments remain unchanged from the actual effective interest rates as of ~~September~~June 30, ~~2017.~~2019. These hypothetical calculations are based on a model of the investments in our portfolio, held as of ~~September~~June 30, ~~2017,~~2019, and are only adjusted for assumed changes in the underlying base interest rates.

Actual results could differ significantly from those estimated in the table.

Change in Interest Rates
Estimated
Percentage
Change in Interest
Income Net of
Interest Expense (unaudited)

-25 Basis Points 0.66 % (1)
Base Interest Rate — %
+100 Basis Points 8.00 %
+200 Basis Points 16.10 %
+300 Basis Points 24.19 %


~~(1)~~Change in Interest Rates	~~Limited to the lesser~~	Estimated Percentage Change in Interest Income Net of ~~the September 30, 2017 LIBOR rates or a decrease of 25 basis points.~~ Interest Expense (unaudited)
-25 Basis Points		(2.33	)%
Base Interest Rate		—	%
+100 Basis Points		9.33	%
+200 Basis Points		18.67	%
+300 Basis Points		28.00	%


Item 4.	Controls and Procedures


(a)	Evaluation of Disclosure Controls and Procedures

As of ~~September~~June 30, ~~2017~~2019 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the ~~Securities Act of 1934, as amended).~~Exchange Act. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic United States Securities and Exchange Commission filings is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.


(b)	Changes in Internal Controls Over Financial Reporting

Management has not identified any change in our internal control over financial reporting that occurred during the quarter ended ~~September~~June 30, ~~2017~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

The terms “we”, “us”, “our” and the “Company” refers to New Mountain Finance Corporation and its consolidated subsidiaries.


Item 1.	Legal Proceedings

~~On May 3, 2013, we entered into a collateralized securities purchase~~We, and ~~put agreement (the “SPP Agreement”) with a private hedge fund. Under~~our consolidated subsidiaries, the ~~SPP Agreement, we purchased twenty million Class E Preferred Units of Black Elk Energy Offshore Operations, LLC (“Black Elk”) for $20 million with a corresponding obligation of~~Investment Adviser and the ~~private hedge fund~~Administrator are not currently subject to repurchase the preferred units for $20 million plus other amounts due under the SPP Agreement. The majority owner of Black Elk was the private hedge fund. In August 2014, we received $20.54 million, the full amount due under the SPP Agreement.

~~In August 2017, a trustee (the “Trustee”) for Black Elk informed us that the Trustee intends to assert a fraudulent conveyance claim (the “Claim”)~~any material pending legal proceedings threatened against us ~~and one~~as of our affiliates seeking the return of $20.54 million. Black Elk filed a Chapter 11 bankruptcy petition pursuant to the United States Bankruptcy Code in August 2015. The Trustee alleges that individuals affiliated with the private hedge fund conspired with Black Elk and others to improperly use proceeds from the sale of certain Black Elk assets to repay, in August 2014, the private hedge fund’s obligation to us under the SPP Agreement. The private hedge fund is currently in liquidation under the laws of the Cayman Islands.

We are in the process of evaluating the Claim as well as our recourse against the private hedge fund and certain of its principals and agents, as well as other affiliated and nonaffiliated entities and individuals. In addition, a claim has been filed with the Cayman Islands joint official liquidators of the private hedge fund in the amount sought by the Trustee.

June 30, 2019. From time to time, we may be a party to certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our business, financial condition or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2018, which could materially affect our business, financial condition and/or operating ~~results.~~results, including the Risk Factor titled "Recent legislation allows us to incur additional leverage, which could increase the risk of investing in our securities". The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. ~~There~~Other than as set forth below, there have been no material changes during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

Uncertainty relating to the LIBOR calculation process may adversely affect the value of our portfolio of LIBOR-indexed, floating-rate debt securities.

Concerns have been publicized that some of the member banks surveyed by the British Bankers’ Association, or the ‘‘BBA,’’ in connection with the calculation of LIBOR across a range of maturities and currencies may have been under-reporting or otherwise manipulating the inter-bank lending rate applicable to them in order to profit on their derivatives positions or to avoid an appearance of capital insufficiency or adverse reputational or other consequences that may have resulted from reporting inter-bank lending rates higher than those they actually submitted. A number of BBA member banks have entered into settlements with their regulators and law enforcement agencies with respect to alleged manipulation of LIBOR, and investigations by regulators and governmental authorities in various jurisdictions are ongoing.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if at that time whether or not LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large US financial institutions, is considering replacing U.S. dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by Treasury securities called the Secured Overnight Financing Rate (“SOFR”). The first publication of SOFR was released in April 2018. Whether or not SOFR attains market traction as a LIBOR replacement remains a question and future of LIBOR at this time is uncertain. If LIBOR ceases to exist, we may need to renegotiate the credit agreements extending beyond 2021 with our portfolio companies that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established, which may have an adverse effect on our results of operations. In addition, if LIBOR ceases to exist, we may need to renegotiate any LIBOR based revolving credit facilities to replace LIBOR with the new standard that is established in its place. If we are unable to do so, amounts drawn under the revolving credit facility may bear interest at a higher rate, which would increase the cost of our borrowings and, in turn, affect our results of operations.


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

We did not engage in unregistered sales of equity securities during the quarter ended ~~September~~June 30, ~~2017.~~2019.

Issuer Purchases of Equity Securities

Dividend Reinvestment Plan

During the quarter ended ~~September~~June 30, ~~2017,~~2019, we did not purchase any of our common stock in the open market in connection with our dividend reinvestment plan.

Stock Repurchase Program

On February 4, 2016, our board of directors authorized a program for the purpose of repurchasing up to $50.0 million worth of our common stock. Under the repurchase program, we were permitted, but were not obligated to, repurchase our

outstanding common stock in the open market from time to time, provided that we complied with our code of ethics and the guidelines specified in Rule 10b-18 of the Exchange Act, including certain price, market volume and timing constraints. In addition, any repurchases were conducted in accordance with the 1940 Act. On December ~~23, 2016,~~31, 2018, our board of directors extended our repurchase program and we expect the repurchase program to be in place until the earlier of December 31, ~~2017~~2019 or until $50.0 million of outstanding shares of common stock have been repurchased. We did not repurchase any shares of our common stock under the repurchase program during the quarter ended ~~September~~June 30, ~~2017.~~

2019.


Item 3.	Defaults Upon Senior Securities

None.


Item 4.	Mine Safety Disclosures

Not applicable.


Item 5.	Other Information

None.


Item 6.	Exhibits


(a)	Exhibits

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the United States Securities and Exchange Commission:



Exhibit Number			Description
3.1(a)			Amended and Restated Certificate of Incorporation of New Mountain Finance Corporation(2)

3.1(b)			Certificate of Change of Registered Agent and/or Registered Office of New Mountain Finance Corporation(3)

3.2			Amended and Restated Bylaws of New Mountain Finance Corporation(2)

3.3			Certificate of Amendment to the Amended and Restated Certificate of Incorporation New Mountain Finance Corporation(4)

4.1			Form of Stock Certificate of New Mountain Finance Corporation(1)

~~11.1~~10.1			~~Computation~~ Form of ~~Per Share Earnings for~~Third Amended and Restated Loan and Security Agreement, conformed through the Third Amendment to the Loan and Security Agreement dated as of May 7, 2019, by and among New Mountain Finance Corporation, ~~(included in~~as the ~~notes~~collateral manager, New Mountain Finance Holdings, L.L.C., as the borrower, Wells Fargo Bank, National Association, as the administrative agent, the lenders party thereto and Wells Fargo Bank, National Association, as the collateral custodian(5)

10.2			Form of Joinder Supplement, dated as of May 7, 2019, by and among Fifth Third Bank, New Mountain Finance Holdings, L.L.C., as the borrower, and Wells Fargo Bank, National Association, as the administrative agent(5)

10.3			Form of Amendment No. 2 to Loan Financing and Servicing Agreement, dated as of June 28, 2019, by and among New Mountain Finance Corporation, as the ~~financial statements contained in this report)~~equityholder, New Mountain Finance DB, L.L.C., as the borrower, U.S. Bank National Association, as the collateral Agent and collateral custodian, and Deutsche Bank AG, New York Branch, as the facility agent, agent and a lender(6)

31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended

32.1			Certification of Chief Executive Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

32.2			Certification of Chief Financial Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)


(1)	Previously filed in connection with New Mountain Finance Holdings, L.L.C.’s registration statement on Form N-2 Pre-Effective Amendment No. 3 (File Nos. 333-168280 and 333-172503) filed on May 9, 2011.


(2)	Previously filed in connection with New Mountain Finance Corporation’s quarterly report on Form 10-Q filed on August 11, 2011.


(3)	Previously filed in connection with New Mountain Finance Corporation and New Mountain Finance AIV Holdings Corporation report on Form 8-K filed on August 25, 2011.


(4)	Previously filed in connection with New Mountain Finance Corporation's report on Form 8-K filed on April 3, 2019.


(5)	Previously filed in connection with New Mountain Finance Corporation's report on Form 8-K filed on May 9, 2019.


(6)	Previously filed in connection with New Mountain Finance Corporation's report on Form 8-K filed on July 3, 2019.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on ~~November~~August 7, ~~2017~~2019.



	NEW MOUNTAIN FINANCE CORPORATION

	By:	/s/ ROBERT A. HAMWEE
		Robert A. Hamwee
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ SHIRAZ Y. KAJEE
		Shiraz Y. Kajee
		Chief Financial Officer ~~and Treasurer~~
		(Principal Financial and Accounting Officer)

96116



	Three Months Ended September 30, 2017			Stepped-up Cost Basis Adjustments		Adjusted Three Months Ended September 30, 2017
Investment income
Interest income(1)	$	39,638		$	—	$	39,638
Total dividend income(2)	9,870			—		9,870
Other income	1,728			—		1,728
Total investment income(3)	51,236			—		51,236
Total expenses pre-incentive fee(4)	18,371			—		18,371
Pre-Incentive Fee Net Investment Income	32,865			—		32,865
Incentive fee(5)	6,573			—		6,573
Post-Incentive Fee Net Investment Income	26,292			—		26,292
Net realized losses on investments(6)	(14,216		)	—		(14,216		)
Net change in unrealized appreciation (depreciation) of investments(6)	14,643			—		14,643
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell	(1,549		)	—		(1,549		)
Provision for taxes	(394		)	—		(394		)
Net increase in net assets resulting from operations	$	24,776				$	24,776



	Nine Months Ended September 30, 2017			Stepped-up Cost Basis Adjustments			Adjusted Nine Months Ended September 30, 2017
Investment income
Interest income(1)	$	111,275		$	—	(7)	$	111,275
Total dividend income(2)	26,273			—			26,273
Other income	7,014			—			7,014
Total investment income(3)	144,562			—			144,562
Total expenses pre-incentive fee(4)	52,411			—			52,411
Pre-Incentive Fee Net Investment Income	92,151			—			92,151
Incentive fee(5)	16,630			—			16,630
Post-Incentive Fee Net Investment Income	75,521			—			75,521
Net realized losses on investments(6)	(39,843		)	—			(39,843		)
Net change in unrealized appreciation (depreciation) of investments(6)	48,700			—		(7)	48,700
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell	(2,382		)	—			(2,382		)
Benefit for taxes	525			—			525
Net increase in net assets resulting from operations	$	82,521					$	82,521



	Three Months Ended September 30, 2016			Stepped-up Cost Basis Adjustments			Adjusted Three Months Ended September 30, 2016
Investment income
Interest income(1)	$	35,917		$	(1	)	$	35,916
Total dividend income(2)	3,063			—			3,063
Other income	2,854			—			2,854
Total investment income(3)	41,834			(1		)	41,833
Total expenses pre-incentive fee(4)	14,673			—			14,673
Pre-Incentive Fee Net Investment Income	27,161			(1		)	27,160
Incentive fee(5)	5,432			—			5,432
Post-Incentive Fee Net Investment Income	21,729			(1		)	21,728
Net realized gains (losses) on investments(6)	1,150			(27		)	1,123
Net change in unrealized appreciation (depreciation) of investments(6)	3,146			28			3,174
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell	(957		)	—			(957		)
Benefit for taxes	11			—			11
Net increase in net assets resulting from operations	$	25,079					$	25,079



	Nine Months Ended September 30, 2016			Stepped-up Cost Basis Adjustments			Adjusted Nine Months Ended September 30, 2016
Investment income
Interest income(1)	$	112,119		$	(65	)	$	112,054
Total dividend income(2)	6,423			—			6,423
Other income	5,758			—			5,758
Total investment income(3)	124,300			(65		)	124,235
Total expenses pre-incentive fee(4)	42,906			—			42,906
Pre-Incentive Fee Net Investment Income	81,394			(65		)	81,329
Incentive fee(5)	16,266			—			16,266
Post-Incentive Fee Net Investment Income	65,128			(65		)	65,063
Net realized gains (losses) on investments(6)	2,191			(151		)	2,040
Net change in unrealized appreciation (depreciation) of investments(6)	10,716			216			10,932
Net change in unrealized (depreciation) appreciation of securities purchased under collateralized agreements to resell	(1,031		)	—			(1,031		)
Benefit for taxes	819			—			819
Net increase in net assets resulting from operations	$	77,823					$	77,823



Change in Interest Rates	Estimated Percentage Change in Interest Income Net of Interest Expense (unaudited)
-25 Basis Points	0.66	%	(1)
Base Interest Rate	—	%
+100 Basis Points	8.00	%
+200 Basis Points	16.10	%
+300 Basis Points	24.19	%