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 30, 2017~~March 31, 2021

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,~~1633 Broadway, 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

The NASDAQ Global Select Market

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 (or for such shorter period that the registrant was required to file such reports), 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 7, 2017~~May 5, 2021
Common stock, par value $0.01 per share						~~75,805,019~~96,827,342

Table of Contents

FORM 10-Q FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2021

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 30, 2017~~March 31, 2021 (unaudited) and December 31, ~~2016~~2020 (unaudited)	3
			Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 (unaudited) and ~~September 30, 2016~~March 31, 2020 (unaudited)	4
			Consolidated Statements of Changes in Net Assets for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 (unaudited) and ~~September 30, 2016~~March 31, 2020 (unaudited)	5
			Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 (unaudited) and ~~September 30, 2016~~March 31, 2020 (unaudited)	6
			Consolidated Schedule of Investments as of ~~September 30, 2017~~March 31, 2021 (unaudited)	7
			Consolidated Schedule of Investments as of December 31, ~~2016~~2020	1927

	Notes to the Consolidated Financial Statements of New Mountain Finance Corporation (unaudited)	3046

	Report of Independent Registered Public Accounting Firm	6391

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	6492
Item 3.			Quantitative and Qualitative Disclosures About Market Risk	91129
Item 4.			Controls and Procedures	92130

PART II. OTHER INFORMATION				93131

Item 1.			Legal Proceedings	93131
Item 1A.			Risk Factors	93131
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	93133
Item 3.			Defaults Upon Senior Securities	93133
Item 4.			Mine Safety Disclosures	94133
Item 5.			Other Information	94133
Item 6.			Exhibits	95134
			Signatures	96135

Table of Contents

PART I. FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements~~

Item 1. Financial Statements

New Mountain Finance Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data)

(unaudited)


	March 31, 2021		December 31, 2020
Assets
Investments at fair value
Non-controlled/non-affiliated investments (cost of $2,275,442 and $2,281,184, respectively)	$	2,252,144	$	2,249,615
Non-controlled/affiliated investments (cost of $104,959 and $115,543, respectively)	121,470		103,012
Controlled investments (cost of $648,906 and $600,942, respectively)	644,998		600,875
Total investments at fair value (cost of $3,029,307 and $2,997,669, respectively)	3,018,612		2,953,502
Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively)	21,422		21,422
Cash and cash equivalents	47,299		78,966
Interest and dividend receivable	32,927		28,411
Receivable from unsettled securities sold	—		9,019
Receivable from affiliates	—		117
Deferred tax asset	—		101
Other assets	8,075		5,981
Total assets	$	3,128,335	$	3,097,519
Liabilities
Borrowings
Unsecured Notes	$	511,500	$	453,250
Holdings Credit Facility	450,163		450,163
SBA-guaranteed debentures	300,000		300,000
Convertible Notes	201,494		201,520
DB Credit Facility	201,000		244,000
NMFC Credit Facility	107,000		165,500

Deferred financing costs (net of accumulated amortization of $35,513 and $33,325, respectively)	(18,270)		(16,839)
Net borrowings	1,752,887		1,797,594
Payable for unsettled securities purchased	62,863		26,842
Management fee payable	20,202		10,419
Incentive fee payable	14,602		7,354
Interest payable	9,826		15,587
Payable to affiliates	1,538		867
Deferred tax liability	14		—
Other liabilities	3,605		1,967
Total liabilities	1,865,537		1,860,630
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, 200,000,000 shares authorized, and 96,827,342 and 96,827,342 shares issued and outstanding, respectively	968		968
Paid in capital in excess of par	1,269,671		1,269,671

Accumulated overdistributed earnings	(26,322)		(48,764)
Total net assets of New Mountain Finance Corporation	$	1,244,317	$	1,221,875
Non-controlling interest in New Mountain Net Lease Corporation	18,481		15,014
Total net assets	$	1,262,798	$	1,236,889
Total liabilities and net assets	$	3,128,335	$	3,097,519
Number of shares outstanding	96,827,342		96,827,342
Net asset value per share of New Mountain Finance Corporation	$	12.85	$	12.62

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

September 30, 2017 December 31, 2016
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
Cash and cash equivalents 39,646
45,928
Interest and dividend receivable 27,800
17,833
Receivable from unsettled securities sold 3,496
990
Receivable from affiliates 339
346
Other assets 6,455
2,886
Total assets $ 1,950,615
$ 1,656,018
Liabilities

Borrowings
     Holdings Credit Facility $ 376,163
$ 333,513
     Convertible Notes 155,440
155,523
     Unsecured Notes 145,000
90,000
     SBA-guaranteed debentures 144,000
121,745
     NMFC Credit Facility 19,000
10,000
     Deferred financing costs (net of accumulated amortization of $15,333 and $12,279, respectively) (12,502 ) (14,041 )
Net borrowings 827,101
696,740
Payable for unsettled securities purchased 67,499
2,740
Management fee payable 6,939
5,852
Incentive fee payable 6,573
5,745
Interest payable 6,098
3,172
Payable to affiliates 786
136
Deferred tax liability 509
1,034
Other liabilities 3,027
2,037
Total liabilities 918,532
717,456
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
Paid in capital in excess of par 1,087,474
1,001,862
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 )
Total net assets $ 1,032,083
$ 938,562
Total liabilities and net assets $ 1,950,615
$ 1,656,018
Number of shares outstanding 75,805,019
69,717,814
Net asset value per share $ 13.61
$ 13.46

Table of Contents

New Mountain Finance Corporation

Consolidated Statements of Operations

(in thousands, except shares and per share data)

(unaudited)


	Three Months Ended
		March 31, 2021		March 31, 2020
Investment income
From non-controlled/non-affiliated investments:
Interest income (excluding Payment-in-kind ("PIK") interest income)		$	39,560	$	56,560
PIK interest income		2,534		1,026

Non-cash dividend income		2,401		2,324
Other income		2,824		1,471
From non-controlled/affiliated investments:
Interest income (excluding PIK interest income)		463		612
PIK interest income		—		457
Dividend income		—		720
Non-cash dividend income		1,505		(3,418)
Other income		102		291
From controlled investments:
Interest income (excluding PIK interest income)		1,148		974
PIK interest income		3,304		2,007
Dividend income		10,475		8,229
Non-cash dividend income		1,281		2,638
Other income		2,111		193
Total investment income		67,708		74,084
Expenses
Incentive fee		7,248		7,826
Management fee		13,420		13,858
Interest and other financing expenses		19,385		22,194
Administrative expenses		1,129		1,040
Professional fees		726		905
Other general and administrative expenses		442		499
Total expenses		42,350		46,322
Less: management fee waived (See Note 5)		(3,637)		(3,543)

Net expenses		38,713		42,779
Net investment income before income taxes		28,995		31,305
Income tax expense		1		—
Net investment income		28,994		31,305
Net realized (losses) gains:
Non-controlled/non-affiliated investments		181		(702)
Non-controlled/affiliated investments		(12,212)		—
Controlled investments		1,535		4
New Mountain Net Lease Corporation		—		812
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments		8,271		(140,283)
Non-controlled/affiliated investments		29,042		(10,836)
Controlled investments		(3,841)		(52,808)

New Mountain Net Lease Corporation		—		(812)
(Provision) benefit for taxes		(115)		898
Net realized and unrealized gains (losses)		22,861		(203,727)
Net increase (decrease) in net assets resulting from operations		51,855		(172,422)
Less: Net (increase) decrease in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation		(365)		65
Net increase (decrease) in net assets resulting from operations related to New Mountain Finance Corporation		$	51,490	$	(172,357)
Basic earnings (loss) per share		$	0.53	$	(1.78)
Weighted average shares of common stock outstanding - basic (See Note 11)		96,827,342		96,827,342
Diluted earnings (loss) per share		$	0.49	$	(1.78)
Weighted average shares of common stock outstanding - diluted (See Note 11)		110,084,927		110,084,927
Distributions declared and paid per share		$	0.30	$	0.34

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

Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Investment income
From non-controlled/non-affiliated investments:
Interest income $ 38,511
$ 34,735
$ 107,905
$ 106,743
Dividend income —
83
159
175
Non-cash dividend income 59
—
72
—
Other income 1,196
2,557
5,545
4,776
From non-controlled/affiliated investments:
Interest income 718
720
2,077
3,929
Dividend income 816
1,061
2,662
2,868
Non-cash dividend income 3,994
—
8,625
—
Other income 294
284
888
902
From controlled investments:
Interest income 409
462
1,293
1,447
Dividend income 3,659
1,151
11,739
1,151
Non-cash dividend income 1,342
768
3,016
2,229
Other income 238
13
581
80
Total investment income 51,236
41,834
144,562
124,300
Expenses
Incentive fee 6,573
5,432
18,430
16,266
Management fee 8,422
6,883
24,311
20,537
Interest and other financing expenses 9,509
7,171
26,930
20,544
Professional fees 819
723
2,391
2,461
Administrative expenses 652
586
2,022
2,054
Other general and administrative expenses 346
390
1,214
1,206
Total expenses 26,321
21,185
75,298
63,068
Less: management and incentive fees waived (See Note 5) (1,483 ) (1,102 ) (6,124 ) (3,662 )
Less: expenses waived and reimbursed (See Note 5) —
—
(474 ) (347 )
Net expenses 24,838
20,083
68,700
59,059
Net investment income before income taxes 26,398
21,751
75,862
65,241
Income tax expense 106
22
341
113
Net investment income 26,292
21,729
75,521
65,128
Net realized (losses) gains:
Non-controlled/non-affiliated investments (14,216 ) 1,150
(39,843 ) 2,191
Net change in unrealized appreciation (depreciation):
Non-controlled/non-affiliated investments 19,755
3,837
54,365
2,955
Non-controlled/affiliated investments (3,807 ) 109
(4,401 ) 84
Controlled investments (1,305 ) (800 ) (1,264 ) 7,677
Securities purchased under collateralized agreements to resell (1,549 ) (957 ) (2,382 ) (1,031 )
(Provision) benefit for taxes (394 ) 11
525
819
Net realized and unrealized gains (losses) (1,516 ) 3,350
7,000
12,695
Net increase in net assets resulting from operations $ 24,776
$ 25,079
$ 82,521
$ 77,823
Basic earnings per share $ 0.33
$ 0.39
$ 1.12
$ 1.22
Weighted average shares of common stock outstanding - basic (See Note 11) 75,688,429
63,758,062
73,618,794
63,843,730
Diluted earnings per share $ 0.31
$ 0.37
$ 1.04
$ 1.14
Weighted average shares of common stock outstanding - diluted (See Note 11) 85,512,556
71,145,932
83,442,921
71,158,044
Distributions declared and paid per share $ 0.34
$ 0.34
$ 1.02
$ 1.02

Table of Contents

New Mountain Finance Corporation

Consolidated Statements of Changes in Net Assets

(in thousands, except shares and per share data)

(unaudited)


	Three Months Ended
		March 31, 2021		March 31, 2020
Increase (decrease) in net assets resulting from operations:
Net investment income		$	28,994	$	31,305
Net realized (losses) gains on investments and New Mountain Net Lease Corporation ("NMNLC")		(10,496)		114
Net change in unrealized appreciation (depreciation) of investments and NMNLC		33,472		(204,739)

(Provision) benefit for taxes		(115)		898
Net increase (decrease) in net assets resulting from operations		51,855		(172,422)
Less: Net (increase) decrease in net assets resulting from operations related to non-controlling interest in NMNLC		(365)		65
Net increase (decrease) in net assets resulting from operations related to New Mountain Finance Corporation		51,490		(172,357)
Capital transactions


Distributions declared to stockholders from net investment income		(29,048)		(32,921)



Total net decrease in net assets resulting from capital transactions		(29,048)		(32,921)
Net increase (decrease) in net assets		22,442		(205,278)
New Mountain Finance Corporation net assets at the beginning of the period		1,221,875		1,283,468
New Mountain Finance Corporation net assets at the end of the period		1,244,317		1,078,190
Non-controlling interest in NMNLC		18,481		11,250
Net assets at the end of the period		$	1,262,798	$	1,089,440

Capital share activity

Shares issued from the reinvestment of distributions		—		—


Net increase in shares outstanding		—		—

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

Nine Months Ended
September 30, 2017 September 30, 2016
Increase (decrease) in net assets resulting from operations:
Net investment income $ 75,521
$ 65,128
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 increase in net assets resulting from operations 82,521
77,823
Capital transactions
Net proceeds from shares sold 81,478
—
Deferred offering costs (172 ) 38
Distributions declared to stockholders from net investment income (75,132 ) (65,095 )
Reinvestment of distributions 4,907
1,486
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 )
Net increase in net assets 93,521
11,304
Net assets at the beginning of the period 938,562
836,908
Net assets at the end of the period $ 1,032,083
$ 848,212

Capital share activity
Shares sold 5,750,000
—
Shares issued from the reinvestment of distributions 299,632
—
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 )

Table of Contents

New Mountain Finance Corporation

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Three Months Ended
	March 31, 2021		March 31, 2020
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations	$	51,855	$	(172,422)
Adjustments to reconcile net decrease (increase) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized losses (gains) on investments and New Mountain Net Lease Corporation ("NMNLC")	10,496		(114)
Net change in unrealized (appreciation) depreciation of investments and NMNLC	(33,472)		204,739

Amortization of purchase discount	(1,978)		(3,528)
Amortization of deferred financing costs	2,315		1,152
Amortization of premium on Convertible Notes	(26)		(26)
Non-cash investment income	(11,091)		(5,131)
(Increase) decrease in operating assets:
Proceeds from sale of non-controlling interest in NMNLC	—		11,315
Purchase of investments and delayed draw facilities	(222,985)		(172,921)
Proceeds from sales and paydowns of investments	197,671		178,722
Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities	36		211
Cash paid for purchase of drawn portion of revolving credit facilities	(483)		(8,996)
Cash paid on drawn revolvers	(13,806)		(33,639)
Cash repayments on drawn revolvers	10,502		9,620
Deferred tax asset	101		—
Interest and dividend receivable	(4,516)		(850)
Receivable from unsettled securities sold	9,019		(30,964)
Receivable from affiliates	117		(268)
Other assets	(2,094)		(802)
Increase (decrease) in operating liabilities:
Management fee payable	9,783		10,315
Incentive fee payable	7,248		7,826
Payable for unsettled securities purchased	36,021		(1,780)
Payable to affiliates	671		352
Interest payable	(5,761)		(5,519)
Deferred tax liability	14		(898)
Other liabilities	1,550		74
Contributions related to non-controlling interest in NMNLC	3,102		—
Net cash flows provided by (used in) operating activities	44,289		(13,532)
Cash flows from financing activities

Distributions paid	(29,048)		(32,921)

Proceeds from Holdings Credit Facility	—		16,000
Repayment of Holdings Credit Facility	—		(108,400)


Proceeds from Unsecured Notes	200,000		—
Repayment of Unsecured Notes	(141,750)		—
Proceeds from SBA-guaranteed debentures	—		75,000
Proceeds from NMFC Credit Facility	157,000		—
Repayment of NMFC Credit Facility	(215,500)		—
Proceeds from DB Credit Facility	40,000		40,000
Repayment of DB Credit Facility	(83,000)		—



Deferred financing costs paid	(3,658)		(2,613)

Net cash flows used in by financing activities	(75,956)		(12,934)
Net decrease in cash and cash equivalents	(31,667)		(26,466)
Cash and cash equivalents at the beginning of the period	78,966		48,574
Cash and cash equivalents at the end of the period	$	47,299	$	22,108
Supplemental disclosure of cash flow information
Cash interest paid	$	22,245	$	26,301
Income taxes paid	1		—


Non-cash financing activities:


Accrual for offering costs	$	—	$	86
Accrual for deferred financing costs	88		4

Nine Months Ended
September 30, 2017 September 30, 2016
Cash flows from operating activities
Net increase in net assets resulting from operations $ 82,521
$ 77,823
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
Amortization of purchase discount (6,458 ) (2,342 )
Amortization of deferred financing costs 3,054
2,446
Amortization of premium on Convertible Notes (83 ) —
Non-cash investment income (6,236 ) (5,101 )
(Increase) decrease in operating assets:
Purchase of investments and delayed draw facilities (810,119 ) (336,310 )
Proceeds from sales and paydowns of investments 542,563
352,607
Cash received for purchase of undrawn portion of revolving credit or delayed draw facilities 339
86
Cash paid on drawn revolvers (11,387 ) (10,899 )
Cash repayments on drawn revolvers 12,929
8,111
Interest and dividend receivable (9,967 ) (2,822 )
Receivable from unsettled securities sold (2,506 ) —
Receivable from affiliates 7
(485 )
Other assets (2,954 ) (299 )
Increase (decrease) in operating liabilities:
Payable for unsettled securities purchased 64,759
40,249
Management fee payable 1,087
315
Incentive fee payable 828
(190 )
Interest payable 2,926
2,027
Payable to affiliates 650
3
Deferred tax liability (525 ) (819 )
Other liabilities 585
311
Net cash flows (used in) provided by operating activities (144,462 ) 112,835
Cash flows from financing activities
Net proceeds from shares sold 81,478
—
Distributions paid (70,225 ) (63,609 )
Offering costs paid (441 ) (155 )
Proceeds from Holdings Credit Facility 435,750
128,500
Repayment of Holdings Credit Facility (393,100 ) (238,900 )
Proceeds from Convertible Notes —
40,552
Proceeds from Unsecured Notes 55,000
90,000
Proceeds from SBA-guaranteed debentures 22,255
4,000
Proceeds from NMFC Credit Facility 251,100
156,500
Repayment of NMFC Credit Facility (242,100 ) (204,000 )
Other (81 ) —
Deferred financing costs paid (1,456 ) (3,083 )
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
Cash and cash equivalents at the beginning of the period 45,928
30,102
Cash and cash equivalents at the end of the period $ 39,646
$ 49,794
Supplemental disclosure of cash flow information
Cash interest paid $ 20,064
$ 15,975
Income taxes paid 175
11
Non-cash operating activities:
Non-cash activity on investments $ 12,858
$ 167
Non-cash financing activities:
Value of shares issued in connection with the distribution reinvestment plan $ 4,347
$ —
Value of shares reissued from repurchase program in connection with the distribution reinvestment plan 560
1,486
Accrual for offering costs 944
576
Accrual for deferred financing costs 158
371

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

Table of Contents

New Mountain Finance Corporation

Consolidated Schedule of Investments

~~September 30, 2017~~March 31, 2021

(in thousands, except shares)

(unaudited)


Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (13)	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 Health Services ULC (fka Dentalcorp Perfect Smile ULC)**
Healthcare Services	Second lien (3)	8.50% (L + 7.50%/M)	6/1/2018	6/8/2026	$	28,613	$	28,425	$	28,648
	Second lien (8)	8.50% (L + 7.50%/M)	6/1/2018	6/8/2026	7,500		7,453		7,509
					36,113		35,878		36,157		2.86	%
Total Funded Debt Investments - Canada					$	36,113	$	35,878	$	36,157	2.86	%
Funded Debt Investments - United Arab Emirates
GEMS Menasa (Cayman) Limited**
Education	First lien (8)	6.00% (L + 5.00%/S)	7/30/2019	7/31/2026	$	15,638	$	15,574	$	15,619	1.24	%
Total Funded Debt Investments - United Arab Emirates					$	15,638	$	15,574	$	15,619	1.24	%
Funded Debt Investments - United Kingdom
Aston FinCo S.a r.l. / Aston US Finco, LLC**
Software	Second lien (8)(11)	8.36% (L + 8.25%/M)	10/8/2019	10/8/2027	$	34,459	$	34,220	$	34,804	2.76	%
Total Funded Debt Investments - United Kingdom					$	34,459	$	34,220	$	34,804	2.76	%
Funded Debt Investments - United States
GS Acquisitionco, Inc.
Software	First lien (2)(11)	6.75% (L + 5.75%/Q)	8/7/2019	5/24/2024	$	26,571	$	26,457	$	26,570
	First lien (2)(11)	6.75% (L + 5.75%/S)	8/7/2019	5/24/2024	25,885		25,762		25,885
	First lien (5)(11)	6.75% (L + 5.75%/Q)	8/7/2019	5/24/2024	22,137		22,041		22,137
	First lien (2)(11)	6.75% (L + 5.75%/S)	8/7/2019	5/24/2024	12,618		12,551		12,618
	First lien (3)(11)(12) - Drawn	6.75% (L + 5.75%/S)	8/7/2019	5/24/2024	2,438		2,423		2,438
					89,649		89,234		89,648		7.11	%
Associations, Inc.
Business Services	First lien (2)(11)	8.00% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	52,963		52,776		52,963
	First lien (8)(11)	8.00% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	5,314		5,295		5,314
	First lien (2)(11)(12) - Drawn	8.00% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	10,500		10,456		10,500
	First lien (2)(11)(12) - Drawn	7.00% (L + 6.00%/Q)	7/30/2018	7/30/2024	2,033		2,020		2,033
					70,810		70,547		70,810		5.61	%
PhyNet Dermatology LLC
Healthcare Services	First lien (2)(11)	7.50% (L + 5.50% + 1.00% PIK/M)*	9/17/2018	8/16/2024	49,744		49,437		49,169
	First lien (3)(11)	7.50% (L + 5.50% + 1.00% PIK/M)*	9/17/2018	8/16/2024	19,080		18,929		18,859
					68,824		68,366		68,028		5.39	%

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.


~~(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.

(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.

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The unobservable inputs used in the fair value measurement of the Company's Level III investments as of December 31, ~~2016~~2020 were as follows:

Range

Type

Fair Value as of December 31, 2020

Approach

Unobservable Input

Low

High

Weighted
Average

First lien

1,401,169

Market & income approach

EBITDA multiple

5.0x

35.0x

14.5x

Revenue multiple

4.0x

11.0x

6.2x

Discount rate

4.4

18.6

7.6

82,198

Market quote

Broker quote

N/A

Second lien

474,956

Market & income approach

EBITDA multiple

6.5x

32.0x

14.9x

Discount rate

6.9

22.6

9.5

52,374

Market quote

Broker quote

N/A

42,703

Other

N/A(1)

N/A

Subordinated

36,939

Market & income approach

EBITDA multiple

8.0x

13.5x

10.0x

Discount rate

11.7

13.6

12.5

Equity and other

647,360

Market & income approach(2)

EBITDA multiple

5.0x

19.5x

11.9x

Discount rate

5.8

40.9

11.6

158

Other

N/A(1)

N/A

2,737,857

Range
Type Fair Value as of December 31, 2016 Approach Unobservable Input Low High
Weighted
Average
First lien $ 417,464
Market & income approach EBITDA multiple 2.0x
15.0x
10.2x

Revenue multiple 0.5x
8.0x
3.0x
Discount rate 7.2 % 12.3 % 9.7 %
86,801
Market quote Broker quote N/A
N/A
N/A
26,336
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

Discount rate 8.7 % 13.0 % 11.3 %
96,315
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

Revenue multiple 0.5x
1.0x
0.8x

Discount rate 8.7 % 15.8 % 13.6 %
Equity and other 158,947
Market & income approach EBITDA multiple 2.5x
13.0x
5.9x

Revenue multiple 0.5x
1.0x
0.8x
Discount rate 8.0 % 18.9 % 14.5 %
1,498
Black Scholes analysis Expected life in years 8.8
9.3
9.1

Volatility 32.2 % 43.8 % 36.4 %

Discount rate 2.5 % 2.5 % 2.5 %
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.

(2)Since December 31, 2019, there were changes in valuation techniques within Level III that did not have a material impact on the valuation of these investments. Certain investments that were previously valued using Black Scholes analysis are now valued based on Market & income approach as these methods are better indicators of the fair value measurement.

Based on a comparison to similar BDC credit facilities, the terms and conditions of the Holdings Credit Facility, ~~and~~ the NMFC Credit Facility ~~(as defined in Note 7.~~ ~~Borrowings~~)and the DB Credit Facility 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 30, 2017,~~March 31, 2021, as the facilities are continually monitored and examined by both the borrower and the ~~lender.~~lender and are considered Level III. See Note 7. Borrowings, for details. The carrying value of the SBA-guaranteed debentures, ~~and~~the 2017A Unsecured Notes, ~~(as defined in Note 7.~~ ~~Borrowings~~)the 2018A Unsecured Notes, the 2018B Unsecured Notes, the 2019A Unsecured Notes and the 2021A Unsecured Notes approximate fair value as of ~~September 30, 2017~~March 31, 2021 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 ~~(as defined in Note 7.~~ ~~Borrowings~~) as of ~~September 30, 2017~~March 31, 2021 was ~~$160,684,~~$210,819 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 30, 2017~~March 31, 2021 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, political and ~~political~~public health conditions (including the COVID-19 pandemic), 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.~~17, 2021 at a virtual meeting. Our board of directors held such meeting by virtual means in reliance on relief provided

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by the U.S. Securities and Exchange Commission (the "SEC") in response to the COVID-19 pandemic. 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~~as amended and restated on October 25, 2017. See Note 7. Borrowings). for details. 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~~continued 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~~Facility. Effective as of ~~September 30, 2017~~ and ~~September 30, 2016 approximated $321,390~~for the quarter ended March 31, 2021 through the quarter ending December 31, 2022, the Investment Adviser has entered into a fee waiver agreement pursuant to which the Investment Adviser will waive base management fees in order to reach a target base management fee of 1.25% on gross assets (the “Reduced Base Management Fee”) as opposed to the Company’s current base management fee of 1.75% on gross assets less the borrowings under the SLF Credit Facility and ~~$234,048, respectively.~~less cash and cash equivalents (the “Base Management Fee”). If, for any quarterly period during the term of the fee waiver agreement, the Reduced Base Management Fee would be greater than the Base Management Fee calculated under the terms of the Investment Management Agreement, the Investment Adviser shall only be entitled to the lesser of those two amounts. The Investment Adviser cannot recoup management fees that the Investment Adviser has previously waived. For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and March 31, 2020, management fees waived were approximately ~~$1,483~~$3,637 and ~~$4,324, respectively. For the three and nine months ended September 30, 2016, management fees waived were approximately $1,102 and $3,662,~~$3,543, 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 30, 2017)~~March 31, 2021), 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~~Pre-

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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~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~September 30, 2016.~~March 31, 2020:

Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Management fee $ 8,422
$ 6,883
$ 24,311
$ 20,537
Less: management fee waiver (1,483 ) (1,102 ) (4,324 ) (3,662 )
Total management fee 6,939
5,781
19,987
16,875
Incentive fee, excluding accrued capital gains incentive fees $ 6,573
$ 5,432
$ 18,430
$ 16,266
Less: incentive fee waiver —
—
(1,800 ) —
Total incentive fee 6,573
5,432
16,630
16,266
Accrued capital gains incentive fees(1) $ —
$ —
$ —
$ —


	Three Months Ended
		March 31, 2021		March 31, 2020
Management fee		$	13,420	$	13,858
Less: management fee waiver		(3,637)		(3,543)
Total management fee		9,783		10,315
Incentive fee, excluding accrued capital gains incentive fees		$	7,248	$	7,826


Accrued capital gains incentive fees(1)		$	—	$	—


~~(1)~~	As of September 30, 2017 and September 30, 2016, no actual capital gains incentive fee was owed under the Investment Management Agreement by the Company, as cumulative net Adjusted 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 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~~(1)As of ~~Operations for~~March 31, 2021 and March 31, 2020, no actual capital gains incentive fee was owed under the ~~three and nine months ended September 30, 2016 is adjusted to reflect this step-up to fair market value.~~Investment Management Agreement by the Company, as cumulative net realized capital gains did not exceed cumulative unrealized capital depreciation.

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.

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 ~~Securities and Exchange Commission (the "SEC"),~~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~~ months ended ~~September 30, 2017,~~March 31, 2021 and March 31, 2020, approximately ~~$361~~$754 and ~~$1,144,~~$655, respectively, of indirect administrative expenses were included in administrative expenses of which $0 and ~~$416,~~$0, respectively, of indirect administrative expenses were waived by the Administrator. For the three and nine months ended September 30, 2016, approximately $332 and $1,263, respectively, of indirect administrative expenses were included in administrative expenses of which $0 and $347, respectively, of indirect administrative expenses were waived by the Administrator. As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, approximately ~~$361~~$1,491 and ~~$0,~~$738, respectively, of indirect administrative expenses were included in payable to affiliates.

For the three months ended March 31, 2021 and March 31, 2020, the reimbursement to the Administrator represented approximately 0.02% and 0.02%, respectively, of the Company's gross assets.

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

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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 and the Delaware General Corporation ~~Law and the Delaware Limited Liability Company Act.~~Law.

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, 2017,~~October 8, 2019, the SEC issued an exemptive order (the “Exemptive Order”), which superseded a prior order issued on December 18, 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.

On March 30, 2020, an affiliate of the Investment Adviser purchased directly from NMNLC 105,030 shares of NMNLC’s common stock at a price of $107.63 per share, which represented the net asset value per share of NMNLC at the date of purchase, for an aggregate purchase price of approximately $11,315. Immediately thereafter, NMNLC redeemed 105,030 shares of its common stock held by the Company in exchange for a promissory note with a principal amount of $11,315 and a 7.0% interest rate, which was repaid by NMNLC to the Company on March 31, 2020.

On March 30, 2020, the Company entered into an unsecured revolving credit facility with NMF Investments III, L.L.C., an affiliate of the Investment Adviser, with a $30,000 maximum amount of revolver borrowings available and a maturity date of December 31, 2022. On May 4, 2020, the Company entered into an Amended and Restated Uncommitted Revolving Loan Agreement with NMF Investments III, L.L.C., which increased the maximum amounts of revolving borrowings available thereunder from $30,000 to $50,000. Refer to Note 7. Borrowings for discussion of the Unsecured Management Company Revolver (defined below).

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Note 7. Borrowings

On June 8, 2018 the Company's shareholders approved the application of the modified asset coverage requirements set forth in Section 61(a) of the 1940 Act, 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 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 March 31, 2021, the Company’s asset coverage ratio was 184.6%.

Holdings Credit Facility—On ~~December 18, 2014,~~October 24, 2017, the Company entered into the ~~Second~~Third 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 September 30, 2020, the maturity date of the Holdings Credit Facility is ~~structured~~September 30, 2023, 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 March 31, 2021, the maximum amount of revolving borrowings available under the Holdings Credit Facility is ~~$495,000.~~$745,000. Under the Holdings Credit Facility, NMF Holdings is permitted to borrow up to 25.0%, 45.0%, 67.5% 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 1, 2016,~~ As of the most recent amendment on September 30, 2020, the Holdings Credit Facility bears interest at a rate of LIBOR plus 2.00% per annum for Broadly Syndicated Loans (as defined in the Third Amended and Restated Loan and Security Agreement) and LIBOR plus 2.50% per annum for all other investments. Previously the Holdings Credit Facility bore interest at a rate of LIBOR plus 1.75% per annum for Broadly Syndicated Loans (as defined in the Second Amendment to 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 Third Amended and Restated 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~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~September 30, 2016.~~March 31, 2020:


	Three Months Ended						Nine Months Ended							Three Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016					March 31, 2021			March 31, 2020
Interest expense	$	3,081		$	2,243		$	8,684		$	7,237		Interest expense		$	2,714		$	5,421
Non-usage fee	$	179		$	223		$	536		$	531		Non-usage fee		$	363		$	212
Amortization of financing costs	$	406		$	406		$	1,204		$	1,209		Amortization of financing costs		$	503		$	329
Weighted average interest rate	3.4		%	2.8		%	3.3		%	2.7		%	Weighted average interest rate		2.4		%	3.5		%
Effective interest rate	4.1		%	3.6		%	4.0		%	3.4		%	Effective interest rate		3.2		%	3.8		%
Average debt outstanding	$	352,372		$	318,368		$	351,594		$	353,577		Average debt outstanding		$	450,163		$	629,542

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the outstanding balance on the Holdings Credit Facility was ~~$376,163~~$450,163 and ~~$333,513,~~$450,163, 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 and MUFG Union Bank, N.A., 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. The maturity date of the NMFC Credit Facility is June 4, 2022.

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As of ~~September 30, 2017,~~March 31, 2021, the maximum amount of revolving borrowings available under the NMFC Credit Facility was ~~$122,500.~~$188,500. 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~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~September 30, 2016.~~March 31, 2020:


	Three Months Ended						Nine Months Ended							Three Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016					March 31, 2021			March 31, 2020
Interest expense	$	205		$	684		$	1,278		$	1,911		Interest expense		$	685		$	1,940
Non-usage fee	$	97		$	32		$	212		$	78		Non-usage fee		$	79		$	—
Amortization of financing costs	$	99		$	98		$	293		$	279		Amortization of financing costs		$	34		$	34
Weighted average interest rate	3.6		%	3.0		%	3.5		%	3.0		%	Weighted average interest rate		2.7		%	4.1		%
Effective interest rate	7.3		%	3.6		%	5.0		%	3.6		%	Effective interest rate		3.1		%	4.2		%
Average debt outstanding	$	21,670		$	89,375		$	48,030		$	84,996		Average debt outstanding		$	104,456		$	188,500

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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,~~April 30, 2021, the Company’s board of directors declared a ~~fourth~~second quarter ~~2017~~2021 distribution of ~~$0.34~~$0.30 per share payable on ~~December 28, 2017~~June 30, 2021 to holders of record as of ~~December 15, 2017.~~

June 16, 2021.

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			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 30, 2017,~~March 31, 2021, 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, and cash flows for the ~~nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016. These~~2020, 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, 2020, 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 24, 2021, 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, 2020, 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

~~November 7, 2017~~May 5, 2021


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

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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~~the COVID-19 pandemic on the industries in which we invest;

•our future operating results, our business prospects, ~~and~~ the adequacy of our cash resources and working ~~capital;~~capital, and the impact of the COVID-19 pandemic thereon;

•the ability of our portfolio companies to achieve their ~~objectives;~~objectives and the impact of the COVID-19 pandemic thereon;

•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.~~2020 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.~~2020 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 ("U.S.") 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 30, 2017,~~March 31, 2021, we raised approximately ~~$614.6~~$893.2 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

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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;

•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;

•NMF Ancora Holdings Inc. (“("NMF ~~Ancora”~~Ancora"), NMF QID ~~NGL~~ Holdings, Inc. (“("NMF ~~QID”~~QID") ~~and~~ NMF YP Holdings Inc. (“("NMF ~~YP”~~YP") and NMF Permian Holdings LLC ("NMF Permian"), ~~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"), is a ~~Maryland corporation, was formed to acquire~~majority-owned consolidated subsidiary of ours, which acquires commercial real estate properties that are subject to ~~"triple net"~~‘‘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.

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.~~SBA-eligible small businesses. Our portfolio may be concentrated in a limited number of industries. As of ~~September 30, 2017,~~March 31, 2021, our top five industry concentrations were software, business services, ~~software,~~ healthcare services, ~~consumer services~~education and ~~distribution & logistics.~~investment funds (which includes our investments in our joint ventures).

As of ~~September 30, 2017,~~March 31, 2021, our net asset value was ~~$1,032.1~~approximately $1,244.3 million and our portfolio had a fair value of approximately ~~$1,846.0~~$3,018.6 million in 82102 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%~~8.8% and a weighted average yield to maturity at cost for all investments ("YTM at Cost for Investments") of approximately 8.2%. ~~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.

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Recent Developments

Holdings Credit Facility Amendment

On ~~October 24, 2017,~~April 20, 2021, we entered into the ~~Third Amended and Restated~~Fifth Amendment to Loan and Security Agreement ~~(together with~~(the “Fifth Amendment”), which amended the ~~exhibits and schedules thereto, the “New~~ Holdings Credit ~~Facility”~~Facility. Pursuant to the Fifth Amendment, the revolving period was extended from September 30, 2021 to April 20, 2024. The Holdings Credit Facility continues to mature two years after the end of the revolving period. With the extension of the revolving period, the Holdings Credit Facility will now mature on April 20, 2026. As of the date of the Fifth Amendment, the aggregate commitments of the lenders to the Holding Credit Facility equaled $730.0 million.

The Fifth Amendment made a number of other modifications, including, but not limited to, the following. The applicable spread used to determine the per annum interest rate payable under the Holdings Credit Facility was modified to be the higher of (a) 1.85% (reduced from 2.25%) and (b) the pro rata portion of the facility secured by assets that are First Lien Loans that are also Broadly Syndicated Loans (as each such term is defined under the Holdings Credit Facility) multiplied by 1.60% (reduced from 2.00%), plus the pro rata portion of the facility secured by assets that are not First Lien Loans that are Broadly Syndicated Loans multiplied by 2.10% (reduced from 2.50%). The Fifth Amendment also modified the applicable spread that would be effective during an Event of Default or a Curable BDC Asset Coverage Event (as each such term is defined under the Holdings Credit Facility) by reducing such applicable spread from 3.75% to 3.25%.

NMFC Senior Loan Program IV LLC

On May 5, 2021, NMFC and ~~among us, as~~SkyKnight Income Alpha, LLC ("SkyKnight Alpha") entered into a limited liability company agreement to establish a joint venture, NMFC Senior Loan Program IV LLC ("SLP IV"). NMFC and SkyKnight Alpha have transferred and contributed 100% of their membership interest in SLP I and SLP II to SLP IV, pursuant to contribution agreements. The purpose of the ~~collateral manager, NMF Holdings, as~~joint venture is to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals. All investment decisions must be unanimously approved by the ~~borrower,~~investment committee of SLP IV, which has equal representations from NMFC and SkyKnight Alpha. On May 5, 2021, SLP IV entered into a $370.0 million revolving credit facility with 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 andwhich matures on ~~October 24, 2022. With~~May 5, 2026 and bears interest at a rate of LIBOR plus 1.60% per annum.

Management Fee Waiver

On May 4, 2021, we and the ~~closing~~Investment Adviser entered into a Fee Waiver Agreement (the “Fee Wavier Agreement”). Pursuant to the Fee Waiver Agreement, the Investment Adviser agreed to voluntarily reduce the base management fees payable to the Investment Adviser by us under the Investment Management Agreement. Effective as of and for the quarter ended March 31, 2021 through the quarter ending December 31, 2022, the Investment Adviser agreed to waive a portion 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 availablebase management fee payable under the ~~New Holdings Credit Facility remains $495.0 million.~~Investment Management Agreement such that the base management fee payable would not exceed 1.25% of our gross assets (the “Reduced Base Management Fee”). If, for any quarterly period during the term of the Fee Wavier Agreement, the Reduced Base Management Fee would be greater than the base management fee calculated under the terms of the Investment Management Agreement, the Investment Adviser shall only be entitled to the lesser of those two amounts.

Distributions

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,~~April 30, 2021, our board of directors declared a ~~fourth~~second quarter ~~2017~~2021 distribution of ~~$0.34~~$0.30 per share payable on ~~December 28, 2017~~June 30, 2021 to holders of record as of June 16, 2021.

We will, subject to extraordinary circumstances, pay quarterly distributions to our common stockholders of at least thirty cents ($0.30) per quarter over the next seven quarters beginning with the second quarter distribution to be paid on June 30, 2021 and ending in the fourth quarter of 2022, subject to any possible extensions. The declaration of any such future distributions will be subject to the availability of legally distributable funds and the discretion and approval of our board of directors. The Investment Adviser has informed us that, to the extent necessary, it will waive incentive fees payable to the Investment Adviser in the event that there is an insufficient amount of legally distributable funds available to us to make the thirty cent ($0.30) distributions through the periods described above.

COVID-19 Developments

Our operating results and portfolio companies may be negatively impacted by the COVID-19 pandemic. While several countries, as well as certain states, counties and cities in the United States, have relaxed initial public health restrictions with the view to partially or fully reopening their economies, many cities have since experienced a surge in the reported number of cases, hospitalizations and deaths related to the COVID-19 pandemic. These surges have led to the re-introduction of such restrictions and business shutdowns in certain states in the United States and globally and could continue to lead to the re-introduction of such restrictions elsewhere. Health advisors warn that recurring COVID-19 outbreaks will continue if reopening

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is pursued too soon or in the wrong manner, which may lead to the re-introduction or continuation of certain public health restrictions (such as instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues). Additionally, travelers from the United States are restricted from visiting many countries including countries in Europe, Asia, Africa and South America. These continued travel restrictions may prolong the global economic downturn. In addition, although the Federal Food and Drug Administration authorized vaccines beginning in December ~~15, 2017.~~2020 and a significant portion of the U.S. population have been vaccinated, and it remains unclear how quickly the vaccines will continue to be distributed nationwide and globally, or when “herd immunity” will be achieved and the restrictions that were imposed to slow the spread of the virus will be lifted entirely. Any delay in distributing the vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. Even after the COVID-19 pandemic subsides, the U.S. economy and most other major global economies may continue to experience a recession, and we anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States and other major markets.

This outbreak is having, and any future outbreaks could have, an adverse impact on the markets and the economy in general, which could have a material adverse impact on, among other things, the ability of lenders to originate loans, the volume and type of loans originated, and the volume and type of amendments and waivers granted to borrowers and remedial actions taken in the event of a borrower default, each of which could negatively impact the amount and quality of loans available for investment by us and returns to us, among other things. As of the date of this quarterly report on Form 10-Q, it is impossible to determine the scope of this outbreak, or any future outbreaks, how long any such outbreak, market disruption or uncertainties may last, the effect any governmental actions will have or the full potential impact on us and our portfolio companies. Any potential impact to our results of operations will depend to a large extent on future developments and new information that could emerge regarding the duration and severity of COVID-19 and the actions taken by authorities and other entities to contain COVID-19 or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could adversely affect our and our portfolio companies’ operating results.

An increase in unrealized depreciation of our investment portfolio due to decreases in fair value of investments attributable to the COVID-19 pandemic has resulted in a significant reduction in our net asset value from the period of March 31, 2020 through December 31, 2020 as compared to its net asset value as of December 31, 2019. As of the three months ended March 31, 2021, our net asset value has experienced a recovery from that of the three months ended March 31, 2020. As of March 31, 2021, we were in compliance with our asset coverage requirements under the 1940 Act. In addition, we are not in default of any of the asset coverage requirements under any of our credit facilities as of March 31, 2021. For additional discussion on the impact of COVID-19 on our portfolio companies, see “Monitoring of Portfolio Investments”.

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, NMF YP and NMF ~~YP.~~Permian and our majority-owned consolidated subsidiary, NMNLC. 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

(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.


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.

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(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.

a.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. We will evaluate the reasonableness of the quote, and if the quote is determined to not be representative of fair value, we will use one or more of the methodologies outlined below to determine fair value;

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.

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 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.

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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.

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 30, 2017:~~March 31, 2021:


(in thousands)	Total		Level I		Level II		Level III
First lien	$	1,576,600	$	—	$	76,750	$	1,499,850
Second lien	696,209		—		301,291		394,918
Subordinated	37,295		—		—		37,295
Equity and other	708,508		—		—		708,508
Total investments	$	3,018,612	$	—	$	378,041	$	2,640,571

(in thousands) Total Level I Level II Level III
First lien $ 770,238
$ —
$ 235,351
$ 534,887
Second lien 679,893
—
305,125
374,768
Subordinated 69,202
—
43,494
25,708
Equity and other 326,710
23
—
326,687
Total investments $ 1,846,043
$ 23
$ 583,970
$ 1,262,050

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.

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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 30, 2017,~~March 31, 2021, 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 combination of a yield calibration approach ~~which~~and a comparable investment approach. The yield calibration approach 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. The comparable investment approach utilizes an average yield-to maturity of a selected set of high-quality, liquid investments to determine a comparable investment discount rate. 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 30, 2017,~~March 31, 2021, 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 30, 2017~~March 31, 2021 were as follows:

(in thousands)

Range

Type

Fair Value as of March 31, 2021

Approach

Unobservable Input

Low

High

Weighted
Average

First lien

1,356,548

Market & income approach

EBITDA multiple

5.0x

35.0x

14.8x

Revenue multiple

5.0x

11.0x

7.1x

Discount rate

4.8

18.4

7.8

99,862

Market quote

Broker quote

N/A

43,440

Other

N/A(1)

N/A

Second lien

279,853

Market & income approach

EBITDA multiple

7.5x

32.0x

15.0x

Discount rate

6.2

24.7

10.3

94,803

Market quote

Broker quote

N/A

20,262

Other

N/A(1)

N/A

Subordinated

37,295

Market & income approach

EBITDA multiple

8.0x

13.5x

10.0x

Discount rate

11.5

17.3

13.6

Equity and other

708,350

Market & income approach

EBITDA multiple

5.0x

19.5x

11.4x

Discount rate

5.8

35.2

11.2

158

Other

N/A(1)

N/A

2,640,571

(in thousands) Range
Type Fair Value as of September 30, 2017 Approach Unobservable Input Low High Weighted
Average
First lien $ 467,260
Market & income approach EBITDA multiple 2.0x
17.0x
10.8x

Revenue multiple 0.8x
8.0x
3.9x

Discount rate 6.0 % 11.9 % 8.7 %
24,264
Market quote Broker quote N/A
N/A
N/A

43,363
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

Revenue multiple 5.3x
6.2x
5.8x

Discount rate 9.4 % 12.5 % 10.4 %
125,549
Market quote Broker quote N/A
N/A
N/A

Subordinated 25,708
Market & income approach EBITDA multiple 4.0x
10.5x
8.7x

Revenue multiple 0.5x
1.0x
0.8x

Discount rate 9.1 % 15.0 % 12.1 %
Equity and other 320,072
Market & income approach EBITDA multiple 2.5x
15.0x
10.4x

Revenue multiple 0.5x
1.0x
0.7x

Discount rate 7.3 % 23.9 % 12.8 %
895
Black Scholes analysis Expected life in years 8.5
8.5
8.5

Volatility 39.4 % 39.4 % 39.4 %

Discount rate 2.1 % 2.1 % 2.1 %
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.

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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 iswas structured as a private investment fund, in which all of the investors ~~are qualified purchasers,~~were "qualified purchasers", as such term is defined ~~under~~in section 2(a)(51) of 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, 2022, 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 re-investment period was extended for one additional year.~~ 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's re-investment period ended on August 31, 2020. As of this date, the fund ceased new investment activity and any principal repayments from investments were used to repay SLP I's revolving credit facility. Due to the expiration of the investment period, a member expressed an interest to withdraw from the fund. Effective December 11, 2020, this member, with the consent of the other members pursuant to the Withdrawal and Distribution Agreement dated as of December 11, 2020, fully withdrew as a member of SLP I through an in-kind distribution. Immediately following the effectiveness of this withdrawal, the remaining members of SLP I entered into the First Amended and Restated Limited Liability Company Agreement (the “Restated SLP I Agreement”), which among other matters, removed us as the managing member of SLP I and made other changes to its governance and management. Under the Restated SLP I Agreement, SLP I is ~~capitalized with $93.0 million~~managed and all investment decisions are made by a board of ~~capital commitments and $265.0 million~~members, which has equal representation from all investors. No revisions were made to the term 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~~SLP I or the ~~remaining capital commitments.~~ reinvestment period end date.

As of ~~September 30, 2017,~~March 31, 2021, SLP I had total investments with an aggregate fair value of approximately ~~$336.7~~$125.9 million, debt outstanding of ~~$244.2~~$88.6 million and capital that had been called and funded of ~~$93.0~~$43.0 million. As of December 31, ~~2016,~~2020, SLP I had total investments with an aggregate fair value of approximately ~~$348.7~~$124.7 million, debt outstanding of ~~$256.5~~$188.9 million and capital that had been called and funded of ~~$93.0~~$43.0 million. Our investment in SLP I is disclosed on our Consolidated Schedule of Investments as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020.

Below is a summary of SLP I's portfolio, along with a listing of the individual investments in SLP I's portfolio as of March 31, 2021 and December 31, 2020:


	March 31, 2021			December 31, 2020
First lien investments (1)	$	127,366		$	127,660
Weighted average interest rate on first lien investments (2)	4.74		%	4.85		%
Number of portfolio companies in SLP I	34			34
Largest portfolio company investment (1)	$	7,778		$	7,797
Total of five largest portfolio company investments (1)	$	34,847		$	34,918

~~We, as an investment adviser registered under the Advisers Act, act~~

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

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

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The following table is a listing of the individual investments in SLP I's portfolio as of March 31, 2021:


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	3.87% (L + 3.75%)	2/27/2025	$	3,669	$	3,692	$	3,648
Advisor Group Holdings, Inc.	Consumer Services	4.61% (L + 4.50%)	7/31/2026	6,849		6,794		6,852
Affordable Care Holding Corp.	Healthcare Services	5.75% (L + 4.75%)	10/24/2022	6,596		6,565		6,497
ASG Technologies Group, Inc.	Software	4.50% (L + 3.50%)	7/31/2024	651		649		643
BarBri, Inc.	Education	5.00% (L + 4.00%)	12/1/2023	5,980		5,965		5,920
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	130		130		130
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	629		627		629
Bracket Intermediate Holding Corp.	Healthcare Services	4.49% (L + 4.25%)	9/5/2025	4,508		4,493		4,502
Certara Holdco, Inc.	Healthcare Information Technology	3.70% (L + 3.50%)	8/15/2024	5,125		5,121		5,125
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	451		451		421
Cvent, Inc.	Software	3.90% (L + 3.75%)	11/29/2024	6,727		6,716		6,574
Dealer Tire, LLC	Distribution & Logistics	4.36% (L + 4.25%)	12/12/2025	3,424		3,417		3,434
Drilling Info Holdings, Inc.	Business Services	4.36% (L + 4.25%)	7/30/2025	6,088		6,070		5,996
Emerald 2 Limited	Business Services	3.61% (L + 3.50%)	7/10/2026	447		447		445
eResearchTechnology, Inc.	Healthcare Services	5.50% (L + 4.50%)	2/4/2027	1,342		1,331		1,345
Fastlane Parent Company, Inc.	Distribution & Logistics	4.61% (L + 4.50%)	2/4/2026	1,359		1,339		1,359
Greenway Health, LLC	Software	4.75% (L + 3.75%)	2/16/2024	6,675		6,660		6,383
Heartland Dental, LLC	Healthcare Services	3.61% (L + 3.50%)	4/30/2025	3,600		3,589		3,549
Help/Systems Holdings, Inc.	Software	5.75% (L + 4.75%)	11/19/2026	137		137		138
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	1,368		1,364		1,355
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	5,301		5,285		5,248
Market Track, LLC	Business Services	5.25% (L + 4.25%)	6/5/2024	779		781		779
Medical Solutions Holdings, Inc.	Healthcare Services	5.50% (L + 4.50%)	6/14/2024	2,243		2,240		2,247
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	4,863		4,856		4,850
National Intergovernmental Purchasing Alliance Company	Business Services	3.95% (L + 3.75%)	5/23/2025	1,349		1,350		1,346
Pelican Products, Inc.	Business Products	4.50% (L + 3.50%)	5/1/2025	2,248		2,244		2,227
Premise Health Holding Corp.	Healthcare Services	3.70% (L + 3.50%)	7/10/2025	627		624		624
Project Accelerate Parent, LLC	Business Services	5.25% (L + 4.25%)	1/2/2025	4,164		4,149		4,015
PSC Industrial Holdings Corp.	Industrial Services	4.75% (L + 3.75%)	10/11/2024	3,896		3,875		3,815
Salient CRGT Inc.	Federal Services	7.50% (L + 6.50%)	2/28/2022	6,731		6,717		6,731
Sierra Enterprises, LLC	Food & Beverage	5.00% (L + 4.00%)	11/11/2024	4,249		4,233		4,195
Wirepath LLC	Distribution & Logistics	4.20% (L + 4.00%)	8/5/2024	6,762		6,762		6,661
WP CityMD Bidco LLC	Healthcare Services	4.50% (L + 3.75%)	8/13/2026	6,133		6,083		6,132
Wrench Group LLC	Consumer Services	4.20% (L + 4.00%)	4/30/2026	2,734		2,712		2,734
YI, LLC	Healthcare Services	5.00% (L + 4.00%)	11/7/2024	7,778		7,771		7,564
Zelis Cost Management Buyer, Inc.	Healthcare Information Technology	3.62% (L + 3.50%)	9/30/2026	1,754		1,739		1,748


Total Funded Investments				$	127,366	$	126,978	$	125,861

(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 March 31, 2021.

(2)Represents the fair value in accordance with Accounting Standards Codification Topic 820, Fair Value Measurement and Disclosures ("ASC 820"). Our board of directors does not determine the fair value of the investments held by SLP I.

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The following table is a listing of the individual investments in SLP I's portfolio as of December 31, 2020:


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	3.98% (L + 3.75%)	2/27/2025	$	3,678	$	3,701	$	3,649
Advisor Group Holdings, Inc.	Consumer Services	5.15% (L + 5.00%)	7/31/2026	6,866		6,809		6,836
Affordable Care Holding Corp.	Healthcare Services	5.75% (L + 4.75%)	10/24/2022	6,614		6,578		6,531
ASG Technologies Group, Inc.	Software	4.50% (L + 3.50%)	7/31/2024	653		651		636
BarBri, Inc.	Education	5.00% (L + 4.00%)	12/1/2023	5,980		5,964		5,980
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	131		130		131
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	631		628		631
Bracket Intermediate Holding Corp.	Healthcare Services	4.48% (L + 4.25%)	9/5/2025	4,520		4,504		4,474
Certara Holdco, Inc.	Healthcare Information Technology	3.75% (L + 3.50%)	8/15/2024	5,138		5,134		5,145
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	452		452		423
Cvent, Inc.	Software	3.90% (L + 3.75%)	11/29/2024	6,745		6,732		6,479
Dealer Tire, LLC	Distribution & Logistics	4.40% (L + 4.25%)	12/12/2025	3,433		3,426		3,419
Drilling Info Holdings, Inc.	Business Services	4.40% (L + 4.25%)	7/30/2025	6,103		6,084		5,925
Emerald 2 Limited	Business Services	3.50% (L + 3.25%)	7/10/2026	449		448		445
eResearchTechnology, Inc.	Healthcare Services	5.50% (L + 4.50%)	2/4/2027	1,345		1,333		1,336
Fastlane Parent Company, Inc.	Distribution & Logistics	4.65% (L + 4.50%)	2/4/2026	1,363		1,342		1,355
Greenway Health, LLC	Software	4.75% (L + 3.75%)	2/16/2024	6,693		6,677		6,141
Heartland Dental, LLC	Healthcare Services	3.65% (L + 3.50%)	4/30/2025	3,609		3,597		3,524
HS Purchaser, LLC / Help/Systems Holdings, Inc.	Software	5.75% (L + 4.75%)	11/19/2026	138		137		138
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	1,372		1,367		1,344
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	5,314		5,297		5,208
Market Track, LLC	Business Services	5.25% (L + 4.25%)	6/5/2024	781		783		767
Medical Solutions Holdings, Inc.	Healthcare Services	5.50% (L + 4.50%)	6/14/2024	2,249		2,245		2,237
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	4,876		4,868		4,852
National Intergovernmental Purchasing Alliance Company	Business Services	4.00% (L + 3.75%)	5/23/2025	1,352		1,354		1,346
Pelican Products, Inc.	Business Products	4.50% (L + 3.50%)	5/1/2025	2,254		2,250		2,217
Premise Health Holding Corp.	Healthcare Services	3.75% (L + 3.50%)	7/10/2025	628		626		614
Project Accelerate Parent, LLC	Business Services	5.25% (L + 4.25%)	1/2/2025	4,175		4,159		3,799
PSC Industrial Holdings Corp.	Industrial Services	4.75% (L + 3.75%)	10/11/2024	3,906		3,883		3,799
Salient CRGT Inc.	Federal Services	7.50% (L + 6.50%)	2/28/2022	6,731		6,713		6,731
Sierra Enterprises, LLC	Food & Beverage	5.00% (L + 4.00%)	11/11/2024	4,260		4,243		4,192
Wirepath LLC	Distribution & Logistics	4.25% (L + 4.00%)	8/5/2024	6,779		6,779		6,542
WP CityMD Bidco LLC	Healthcare Services	5.50% (L + 4.50%)	8/13/2026	6,148		6,096		6,162
Wrench Group LLC	Consumer Services	4.25% (L + 4.00%)	4/30/2026	2,739		2,716		2,712
YI, LLC	Healthcare Services	5.00% (L + 4.00%)	11/7/2024	7,797		7,792		7,174
Zelis Cost Management Buyer, Inc.	Healthcare Information Technology	4.90% (L + 4.75%)	9/30/2026	1,758		1,743		1,765


Total Funded Investments				$	127,660	$	127,241	$	124,659

(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 I.

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Below is certain summarized financial information for SLP I as of March 31, 2021 and ~~are~~December 31, 2020 and for the three months ended March 31, 2021 and March 31, 2020:


Selected Balance Sheet Information:	March 31, 2021		December 31, 2020
	(in thousands)		(in thousands)
Investments at fair value (cost of $126,978 and $127,241, respectively)	$	125,861	$	124,659
Receivable from in-kind distributions	—		100,404
Receivable from unsettled securities sold	—		1,662
Cash and other assets	6,308		6,461
Total assets	$	132,169	$	233,186

Credit facility	$	88,567	$	188,867
Deferred financing costs	(233)		(296)
Distribution payable	1,075		2,538

Other liabilities	689		1,364
Total liabilities	90,098		192,473

Members' capital	$	42,071	$	40,713
Total liabilities and members' capital	$	132,169	$	233,186


	Three Months Ended
Selected Statement of Operations Information:		March 31, 2021		March 31, 2020
		(in thousands)		(in thousands)
Interest income		$	1,966	$	5,122
Other income		11		39
Total investment income		1,977		5,161

Interest and other financing expenses		471		1,954
Other expenses		539		398
Total expenses		1,010		2,352
Less: expenses waived and reimbursed		—		(56)
Net expenses		1,010		2,296
Net investment income		967		2,865

Net realized gains on investments		1		45
Net change in unrealized appreciation (depreciation) of investments		1,465		(39,060)
Net increase (decrease) in members' capital		$	2,433	$	(36,150)

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Pursuant to the Restated SLP I Agreement, the Company is no longer entitled to, ~~receive a management fee for our investment management services provided to SLP I. As a result,~~and SLP I ~~is classified as our affiliate. No~~no longer pays management ~~fee is charged on our~~fees for investment ~~in SLP I in connection with the administrative~~management services provided to SLP I. For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and March 31, 2020, we earned approximately ~~$0.3~~$0.0 million and ~~$0.9 million, respectively, in management fees related to SLP I, which is included in other income. For the three and nine months ended September 30, 2016, we earned approximately~~ $0.3 ~~million and $0.9~~ million, respectively, in management fees related to SLP I, which is included in other income. As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, approximately ~~$0.3~~$0.0 million and ~~$0.3~~$0.1 million, respectively, of management fees related to SLP I was included in receivable from affiliates. For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and March 31, 2020, we earned approximately ~~$0.8~~$0.6 million and $2.7 million, respectively, of dividend income related to SLP I, which is included in dividend income. For the three and nine months ended September 30, 2016, we earned approximately $1.1 million and $2.9$0.7 million, respectively, of dividend income related to SLP I, which is included in dividend income. As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, approximately ~~$0.8~~$0.6 million and ~~$0.9~~$0.7 million, respectively, of dividend income related to SLP I was included in interest and dividend receivable.

We have determined that SLP I is an investment company under ASC 946; however, in accordance with such guidance we 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 an investment fund where all members have equal decision making authority, it is not appropriate for one member to consolidate since neither has control. Accordingly, we do not consolidate SLP I.

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 ended on 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 30, 2017,~~March 31, 2021, 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 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020.

On April 12, 2016, SLP II ~~closed~~entered into 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 the LIBOR plus ~~1.75%~~1.60% per annum. As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, SLP II had total investments with an aggregate fair value of approximately ~~$359.3~~$250.9 million and ~~$361.7~~$271.1 million, respectively, and debt outstanding under its credit facility of ~~$229.5~~$160.7 million and ~~$250.0~~$184.0 million, respectively. As of March 31, 2021 and December 31, 2020, none of SLP II's investments were on non-accrual.

Below is a summary of SLP II's portfolio, along with a listing of the individual investments in SLP II's portfolio as of March 31, 2021 and December 31, 2020:


(in thousands)	March 31, 2021			December 31, 2020
First lien investments (1)	$	255,235		$	279,678
Weighted average interest rate on first lien investments (2)	4.95		%	5.07		%
Number of portfolio companies in SLP II	30			32
Largest portfolio company investment (1)	$	16,501		$	16,481
Total of five largest portfolio company investments (1)	$	75,392		$	75,522

(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.

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The following table is a listing of the individual ~~loans~~investments in SLP II's portfolio as of ~~September 30, 2017:~~March 31, 2021:

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	3.87% (L + 3.75%)	2/27/2025	$	4,601	$	4,587	$	4,575
ADG, LLC	Healthcare Services	6.25 % (L + 4.75% + 0.50% PIK)	9/28/2023	16,501		16,436		15,939
Advisor Group Holdings, Inc.	Consumer Services	4.61% (L + 4.50%)	7/31/2026	4,938		4,898		4,940
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	282		281		282
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	1,361		1,356		1,361
Bleriot US Bidco Inc.	Federal Services	4.20% (L + 4.00%)	10/30/2026	9,900		9,817		9,888
Brave Parent Holdings, Inc.	Software	4.11% (L + 4.00%)	4/18/2025	3,643		3,634		3,646
CentralSquare Technologies, LLC	Software	3.95% (L + 3.75%)	8/29/2025	14,663		14,638		14,069
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	2,021		2,014		1,890
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	10,561		10,531		9,874
Dealer Tire, LLC	Distribution & Logistics	4.36% (L + 4.25%)	12/12/2025	7,406		7,391		7,428
Drilling Info Holdings, Inc.	Business Services	4.36% (L + 4.25%)	7/30/2025	14,571		14,528		14,352
Edgewood Partners Holdings LLC (EPIC)	Business Services	5.25% (L + 4.25%)	9/6/2024	7,337		7,289		7,264
eResearchTechnology, Inc.	Healthcare Services	5.50% (L + 4.50%)	2/4/2027	3,121		3,094		3,128
Fastlane Parent Company, Inc.	Distribution & Logistics	4.61% (L + 4.50%)	2/4/2026	3,430		3,380		3,428
Greenway Health, LLC	Software	4.75% (L + 3.75%)	2/16/2024	14,438		14,404		13,806
Help/Systems Holdings, Inc.	Software	5.75% (L + 4.75%)	11/19/2026	4,400		4,363		4,432
Keystone Acquisition Corp.	Healthcare Services	6.25% (L + 5.25%)	5/1/2024	5,211		5,185		5,028
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	1,860		1,859		1,842
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	7,206		7,201		7,134
Market Track, LLC	Business Services	5.25% (L + 4.25%)	6/5/2024	11,550		11,521		11,550
Medical Solutions Holdings, Inc.	Healthcare Services	5.50% (L + 4.50%)	6/14/2024	2,760		2,753		2,765
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	2,068		2,064		2,062
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	869		867		866
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	12,003		11,983		11,969
Premise Health Holding Corp.	Healthcare Services	3.70% (L + 3.50%)	7/10/2025	1,355		1,350		1,346
Project Accelerate Parent, LLC	Business Services	5.25% (L + 4.25%)	1/2/2025	12,386		12,349		11,942
PSC Industrial Holdings Corp.	Industrial Services	4.75% (L + 3.75%)	10/11/2024	3,021		3,004		2,958
Quest Software US Holdings Inc.	Software	4.46% (L + 4.25%)	5/16/2025	14,663		14,616		14,678
Salient CRGT Inc.	Federal Services	7.50% (L + 6.50%)	2/28/2022	12,478		12,451		12,478
Wirepath LLC	Distribution & Logistics	4.20% (L + 4.00%)	8/5/2024	14,625		14,625		14,406
WP CityMD Bidco LLC	Healthcare Services	4.50% (L + 3.75%)	8/13/2026	5,404		5,361		5,404
Wrench Group LLC	Consumer Services	4.20% (L + 4.00%)	4/30/2026	5,913		5,866		5,913
YI, LLC	Healthcare Services	5.00% (L + 4.00%)	11/7/2024	14,611		14,604		14,209
Zelis Cost Management Buyer, Inc.	Healthcare Information Technology	3.62% (L + 3.50%)	9/30/2026	4,078		4,044		4,065









Total Funded Investments				$	255,235	$	254,344	$	250,917


~~(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.~~

(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.

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The following table is a listing of the individual ~~loans~~investments in SLP II's portfolio as of December 31, ~~2016:~~2020:

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


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	3.98% (L + 3.75%)	2/27/2025	$	4,613	$	4,598	$	4,577
ADG, LLC	Healthcare Services	6.25 % (L + 4.75% + 0.50% PIK)	9/28/2023	16,481		16,410		15,612
Advisor Group Holdings, Inc.	Consumer Services	5.15% (L + 5.00%)	7/31/2026	4,950		4,909		4,928
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	283		282		283
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	1,365		1,359		1,365
Bleriot US Bidco Inc.	Federal Services	5.00% (L + 4.75%)	10/31/2026	1,341		1,329		1,341
Bleriot US Bidco Inc.	Federal Services	5.00% (L + 4.75%)	10/30/2026	8,584		8,509		8,584
Brave Parent Holdings, Inc.	Software	4.15% (L + 4.00%)	4/18/2025	3,652		3,643		3,630
CentralSquare Technologies, LLC	Software	4.00% (L + 3.75%)	8/29/2025	14,700		14,674		13,745
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	2,026		2,019		1,895
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	10,588		10,556		9,900
Dealer Tire, LLC	Distribution & Logistics	4.40% (L + 4.25%)	12/12/2025	7,425		7,409		7,394
Drilling Info Holdings, Inc.	Business Services	4.40% (L + 4.25%)	7/30/2025	14,608		14,563		14,182
Edgewood Partners Holdings LLC (EPIC)	Business Services	5.25% (L + 4.25%)	9/6/2024	7,356		7,304		7,301
eResearchTechnology, Inc.	Healthcare Services	5.50% (L + 4.50%)	2/4/2027	3,129		3,101		3,106
Fastlane Parent Company, Inc.	Distribution & Logistics	4.65% (L + 4.50%)	2/4/2026	3,439		3,386		3,419
Greenway Health, LLC	Software	4.75% (L + 3.75%)	2/16/2024	14,475		14,439		13,281
HS Purchaser, LLC / Help/Systems Holdings, Inc.	Software	5.75% (L + 4.75%)	11/19/2026	4,411		4,373		4,411
Institutional Shareholder Services Inc.	Business Services	4.75% (L + 4.50%)	3/5/2026	13,755		13,648		13,600
Keystone Acquisition Corp.	Healthcare Services	6.25% (L + 5.25%)	5/1/2024	5,225		5,196		4,937
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	1,865		1,863		1,828
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	7,225		7,219		7,080
Market Track, LLC	Business Services	5.25% (L + 4.25%)	6/5/2024	11,580		11,549		11,376
Medical Solutions Holdings, Inc.	Healthcare Services	5.50% (L + 4.50%)	6/14/2024	2,767		2,760		2,753
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	2,073		2,069		2,063
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	871		869		867
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	12,034		12,011		11,975
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	6.25% (L + 5.25%)	4/29/2024	10,133		10,105		10,158
Premise Health Holding Corp.	Healthcare Services	3.75% (L + 3.50%)	7/10/2025	1,358		1,354		1,328
Project Accelerate Parent, LLC	Business Services	5.25% (L + 4.25%)	1/2/2025	12,418		12,379		11,300
PSC Industrial Holdings Corp.	Industrial Services	4.75% (L + 3.75%)	10/11/2024	3,028		3,011		2,945
Quest Software US Holdings Inc.	Software	4.46% (L + 4.25%)	5/16/2025	14,700		14,650		14,480
Salient CRGT Inc.	Federal Services	7.50% (L + 6.50%)	2/28/2022	12,478		12,445		12,478
Wirepath LLC	Distribution & Logistics	4.25% (L + 4.00%)	8/5/2024	14,663		14,663		14,149
WP CityMD Bidco LLC	Healthcare Services	5.50% (L + 4.50%)	8/13/2026	5,418		5,372		5,431
Wrench Group LLC	Consumer Services	4.25% (L + 4.00%)	4/30/2026	5,924		5,875		5,865
YI, LLC	Healthcare Services	5.00% (L + 4.00%)	11/7/2024	14,649		14,641		13,477
Zelis Cost Management Buyer, Inc.	Healthcare Information Technology	4.90% (L + 4.75%)	9/30/2026	4,088		4,053		4,105
Total Funded Investments				$	279,678	$	278,595	$	271,149


~~(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.


~~(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.~~

(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.

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Below is certain summarized financial information for SLP II as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 and for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~September 30, 2016:~~March 31, 2020:


Selected Balance Sheet Information:	March 31, 2021		December 31, 2020
	(in thousands)		(in thousands)
Investments at fair value (cost of $254,344 and $278,595, respectively)	$	250,917	$	271,149

Cash and other assets	9,724		8,759
Total assets	$	260,641	$	279,908

Credit facility	$	160,670	$	183,970
Deferred financing costs	(315)		(534)
Distribution payable	2,500		2,500

Other liabilities	904		1,058
Total liabilities	163,759		186,994

Members' capital	$	96,882	$	92,914
Total liabilities and members' capital	$	260,641	$	279,908

Selected Balance Sheet Information: September 30, 2017 December 31, 2016
(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
Cash and other assets 6,838
10,138
Total assets $ 366,103
$ 372,864

Credit facility $ 229,460
$ 249,960
Deferred financing costs (2,117 ) (2,565 )
Payable for unsettled securities purchased 28,080
24,862
Distribution payable 3,800
3,000
Other liabilities 2,792
3,350
Total liabilities 262,015
278,607

Members' capital $ 104,088
$ 94,257
Total liabilities and members' capital $ 366,103
$ 372,864


	Three Months Ended
Selected Statement of Operations Information:		March 31, 2021		March 31, 2020
		(in thousands)		(in thousands)
Interest income		$	3,534	$	5,447
Other income		—		53
Total investment income		3,534		5,500

Interest and other financing expenses		980		2,145
Other expenses		107		132
Total expenses		1,087		2,277


Net investment income		2,447		3,223

Net realized gains on investments		2		56
Net change in unrealized appreciation (depreciation) of investments		4,019		(34,801)
Net increase (decrease) in members' capital		$	6,468	$	(31,522)

Three Months Ended Nine Months Ended
Selected Statement of Operations Information: September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016(1)
(in thousands) (in thousands) (in thousands) (in thousands)
Interest income $ 5,858
$ 2,698
$ 16,661
$ 3,326
Other income 27
114
343
163
Total investment income 5,885
2,812
17,004
3,489

Interest and other financing expenses 2,185
1,398
6,108
1,931
Other expenses 159
134
533
463
Total expenses 2,344
1,532
6,641
2,394
Net investment income 3,541
1,280
10,363
1,095

Net realized gains on investments 223
229
2,145
263
Net change in unrealized appreciation (depreciation) of investments 88
1,863
(553 ) 1,978
Net increase in members' capital $ 3,852
$ 3,372
$ 11,955
$ 3,336


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

For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and March 31, 2020, we earned approximately ~~$3.0~~$2.0 million and $9.6 million, respectively, of dividend income related to SLP II, which is included in dividend income. For the three and nine months ended September 30, 2016, we earned approximately $1.2 million and $1.2$2.6 million, respectively, of dividend income related to SLP II, which is included in dividend income. As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, approximately ~~$3.0~~$2.0 million and ~~$2.4~~$2.0 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~~ASC 810,~~Consolidation~~, 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

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 us 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 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.

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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 March 31, 2021, we and SkyKnight II have committed $140.0 million and $35.0 million, respectively, of equity to SLP III. As of March 31, 2021, we and SkyKnight II have contributed $130.0 million and $32.5 million, respectively, of equity to SLP III. Our investment in SLP III is disclosed on our Consolidated Schedule of Investments as of March 31, 2021 and December 31, 2020.

On May 2, 2018, SLP III entered into 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 February 13, 2020, SLP III's revolving credit facility has a maximum borrowing capacity of $525.0 million. As of March 31, 2021 and December 31, 2020, SLP III had total investments with an aggregate fair value of approximately $666.6 million and $610.0 million, respectively, and debt outstanding under its credit facility of $474.2 million and $424.2 million, respectively. As of March 31, 2021 and December 31, 2020, none of SLP III's investments were on non-accrual. Additionally, as of March 31, 2021 and December 31, 2020, SLP III had unfunded commitments in the form of delayed draws of $15.1 million and $7.8 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 March 31, 2021 and December 31, 2020:


(in thousands)	March 31, 2021			December 31, 2020
First lien investments (1)	$	686,095		$	626,985
Weighted average interest rate on first lien investments (2)	4.57		%	4.72		%
Number of portfolio companies in SLP III	71			69
Largest portfolio company investment (1)	$	23,668		$	23,735
Total of five largest portfolio company investments (1)	$	98,902		$	99,159

(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.

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The following table is a listing of the individual investments in SLP III's portfolio as of March 31, 2021:


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	3.87% (L + 3.75%)	2/27/2025	$	865	$	865	$	860
Advisor Group Holdings, Inc.	Consumer Services	4.61% (L + 4.50%)	7/31/2026	9,875		9,835		9,880
Affordable Care Holding Corp.	Healthcare Services	5.75% (L + 4.75%)	10/24/2022	5,885		5,841		5,797
AG Parent Holdings, LLC	Healthcare Services	5.11% (L + 5.00%)	7/31/2026	12,344		12,294		12,297
Ascensus Specialties LLC	Specialty Chemicals & Materials	4.87% (L + 4.75%)	9/24/2026	9,875		9,835		9,986
Aston FinCo S.a.r.l. / Aston US Finco, LLC	Software	4.36% (L + 4.25%)	10/9/2026	5,940		5,891		5,918
Astra Acquisition Corp.	Software	5.50% (L + 4.75%)	3/1/2027	16,490		16,415		16,614
BCPE Empire Holdings, Inc.	Distribution & Logistics	4.11% (L + 4.00%)	6/11/2026	10,842		10,756		10,801
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	19,604		19,527		19,604
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	4,064		4,046		4,064
Bleriot US Bidco Inc.	Federal Services	4.20% (L + 4.00%)	10/31/2026	4,950		4,907		4,944
Bluefin Holding, LLC	Software	4.11% (L + 4.00%)	9/4/2026	9,875		9,755		9,875
Bracket Intermediate Holding Corp.	Healthcare Services	4.49% (L + 4.25%)	9/5/2025	14,625		14,575		14,607
Brave Parent Holdings, Inc.	Software	4.11% (L + 4.00%)	4/18/2025	11,188		11,163		11,197
Cano Health, LLC	Healthcare Services	5.50% (L + 4.75%)	11/23/2027	6,291		6,231		6,298
Cardinal Parent, Inc.	Software	5.25% (L + 4.50%)	11/12/2027	7,037		6,935		7,077
CentralSquare Technologies, LLC	Software	3.95% (L + 3.75%)	8/29/2025	14,662		14,638		14,069
Certara Holdco, Inc.	Healthcare Information Technology	3.70% (L + 3.50%)	8/15/2024	1,242		1,245		1,242
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	975		975		912
CommerceHub, Inc.	Software	4.75% (L + 4.00%)	12/29/2027	5,819		5,790		5,833
Confluent Health, LLC	Healthcare Services	5.11% (L + 5.00%)	6/24/2026	4,387		4,345		4,387
Covenant Surgical Partners, Inc.	Healthcare Services	4.11% (L + 4.00%)	7/1/2026	9,851		9,774		9,642
CRCI Longhorn Holdings, Inc.	Business Services	3.61% (L + 3.50%)	8/8/2025	14,625		14,577		14,399
Dealer Tire, LLC	Distribution & Logistics	4.36% (L + 4.25%)	12/12/2025	9,875		9,855		9,904
Dentalcorp Health Services ULC (fka Dentalcorp Perfect Smile ULC)	Healthcare Services	4.75% (L + 3.75%)	6/6/2025	16,842		16,797		16,737
DG Investment Intermediate Holdings 2, Inc.	Business Services	4.50% (L + 3.75%)	3/31/2028	6,201		6,170		6,174
DG Investment Intermediate Holdings 2, Inc.	Business Services	4.50% (L + 3.75%)	3/31/2028	500		500		498
Dispatch Acquisition Holdings, LLC	Industrial Services	5.00% (L + 4.25%)	3/25/2028	4,179		4,137		4,171
Drilling Info Holdings, Inc.	Business Services	4.36% (L + 4.25%)	7/30/2025	18,529		18,467		18,251
Edgewood Partners Holdings LLC	Business Services	5.25% (L + 4.25%)	9/6/2024	7,337		7,289		7,264
eResearchTechnology, Inc.	Healthcare Services	5.50% (L + 4.50%)	2/4/2027	7,393		7,359		7,408
EyeCare Partners, LLC	Healthcare Services	3.86% (L + 3.75%)	2/18/2027	14,872		14,855		14,737
Frontline Technologies Intermediate Holdings, LLC	Software	6.75% (L + 5.75%)	9/18/2023	6,497		6,497		6,497
Greenway Health, LLC	Software	4.75% (L + 3.75%)	2/16/2024	14,482		14,488		13,849
Heartland Dental, LLC	Healthcare Services	3.61% (L + 3.50%)	4/30/2025	18,493		18,434		18,228
Help/Systems Holdings, Inc.	Software	5.75% (L + 4.75%)	11/19/2026	18,394		18,231		18,526
Higginbotham Insurance Agency, Inc.	Financial Services	6.50% (L + 5.75%)	11/25/2026	7,187		7,136		7,331
Idera, Inc.	Software	4.50% (L + 3.75%)	3/2/2028	16,085		16,070		16,004
Kestra Advisor Services Holdings A, Inc.	Business Services	4.36% (L + 4.25%)	6/3/2026	12,150		12,083		12,120
LI Group Holdings, Inc.	Software	4.50% (L + 3.75%)	3/11/2028	4,655		4,643		4,672
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	2,621		2,606		2,594
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	676		673		670
Maravai Intermediate Holdings, LLC	Specialty Chemicals & Materials	5.25% (L + 4.25%)	10/19/2027	4,114		4,075		4,132
Market Track, LLC	Business Services	5.25% (L + 4.25%)	6/5/2024	6,129		6,062		6,129
MED ParentCo, LP	Healthcare Services	4.36% (L + 4.25%)	8/31/2026	10,246		10,169		10,172
MED ParentCo, LP	Healthcare Services	4.36% (L + 4.25%)	8/31/2026	2,570		2,548		2,551
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	4,490		4,481		4,478
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	869		867		866
National Intergovernmental Purchasing Alliance Company	Business Services	3.95% (L + 3.75%)	5/23/2025	8,679		8,676		8,657
Navex Topco, Inc.	Software	3.36% (L + 3.25%)	9/5/2025	18,162		18,038		18,048

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Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost		Fair Value (2)
Newport Group Holdings II, Inc.	Business Services	3.70% (L + 3.50%)	9/12/2025	$	4,875	$	4,859	$	4,851
Orion Advisor Solutions, Inc.	Business Services	4.50% (L + 3.75%)	9/24/2027	5,237		5,188		5,234
Outcomes Group Holdings, Inc.	Healthcare Services	3.45% (L + 3.25%)	10/24/2025	3,392		3,386		3,358
Pelican Products, Inc.	Business Products	4.50% (L + 3.50%)	5/1/2025	4,863		4,855		4,817
Peraton Corp.	Federal Services	4.50% (L + 3.75%)	2/1/2028	4,529		4,507		4,531
PetVet Care Centers, LLC (fka Pearl Intermediate Parent LLC)	Consumer Services	4.25% (L + 3.50%)	2/14/2025	4,506		4,506		4,502
Planview Parent, Inc.	Software	4.75% (L + 4.00%)	12/17/2027	7,979		7,901		7,994
Premise Health Holding Corp.	Healthcare Services	3.70% (L + 3.50%)	7/10/2025	13,550		13,505		13,465
Project Accelerate Parent, LLC	Business Services	5.25% (L + 4.25%)	1/2/2025	9,798		9,763		9,447
Project Boost Purchaser, LLC	Business Services	5.00% (L + 4.25%)	6/1/2026	1,990		1,971		1,991
Project Ruby Ultimate Parent Corp. (Mediware)	Healthcare I.T.	4.00% (L + 3.25%)	3/10/2028	14,000		13,930		13,959
Quest Software US Holdings Inc.	Software	4.46% (L + 4.25%)	5/16/2025	14,662		14,616		14,678
RealPage, Inc.	Business Services	3.75% (L + 3.25%)	4/24/2028	14,000		13,965		13,950
Sierra Enterprises, LLC	Food & Beverage	5.00% (L + 4.00%)	11/11/2024	2,425		2,423		2,395
Sovos Brands Intermediate, Inc.	Food & Beverage	4.98% (L + 4.75%)	11/20/2025	3,582		3,573		3,600
Spring Education Group, Inc. (fka SSH Group Holdings, Inc.)	Education	4.45% (L + 4.25%)	7/30/2025	12,152		12,131		11,632
Storable, Inc	Software	3.75% (L + 3.25%)	2/26/2028	3,862		3,852		3,833
Symplr Software, Inc.(fka Caliper Software, Inc.)	Healthcare I.T.	5.25% (L + 4.50%)	12/22/2027	16,000		15,854		16,072
Syndigo LLC	Software	5.25% (L + 4.50%)	12/15/2027	15,000		14,891		14,888
TIBCO Software Inc.	Software	3.86% (L + 3.75%)	6/30/2026	7,635		7,618		7,568
Unified Women’s Healthcare, LP	Healthcare Services	5.00% (L + 4.25%)	12/20/2027	9,975		9,900		10,008
Waystar Technologies, Inc.	Healthcare Services	4.11% (L + 4.00%)	10/22/2026	4,097		4,088		4,107
Wirepath LLC	Distribution & Logistics	4.20% (L + 4.00%)	8/5/2024	17,083		17,083		16,827
WP CityMD Bidco LLC	Healthcare Services	4.50% (L + 3.75%)	8/13/2026	19,818		19,658		19,817
VT Topco, Inc.	Business Services	3.61% (L + 3.50%)	8/1/2025	2,788		2,788		2,754
YI, LLC	Healthcare Services	5.00% (L + 4.00%)	11/7/2024	9,666		9,660		9,400
Total Funded Investments				$	671,002	$	667,892	$	666,649

Unfunded Investments - First lien
Cano Health, LLC	Healthcare Services	—	11/23/2021	$	2,300	$	(23)	$	2
Covenant Surgical Partners, Inc.	Healthcare Services	—	7/1/2021	2,000		(20)		(43)
DG Investment Intermediate Holdings 2, Inc.	Business Services	—	3/31/2023	799		—		(3)
Higginbotham Insurance Agency, Inc.	Financial Services	—	11/25/2022	2,023		(15)		40
Peraton Corp.	Federal Services	—	2/1/2028	7,971		(40)		3
Total Unfunded Investments				$	15,093	$	(98)	$	(1)
Total Investments				$	686,095	$	667,794	$	666,648

(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.

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The following table is a listing of the individual investments in SLP III's portfolio as of December 31, 2020:


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	3.98% (L + 3.75%)	2/27/2025	$	868	$	868	$	861
Advisor Group Holdings, Inc.	Consumer Services	5.15% (L + 5.00%)	7/31/2026	4,950		4,909		4,928
Affordable Care Holding Corp.	Healthcare Services	5.75% (L + 4.75%)	10/24/2022	5,901		5,850		5,827
AG Parent Holdings, LLC	Healthcare Services	5.15% (L + 5.00%)	7/31/2026	12,375		12,323		12,251
Ascensus Specialties LLC	Specialty Chemicals & Materials	4.90% (L + 4.75%)	9/24/2026	9,900		9,858		9,931
Aston FinCo S.a.r.l. / Aston US Finco, LLC	Software	4.40% (L + 4.25%)	10/9/2026	5,955		5,904		5,900
Astra Acquisition Corp.	Software	6.50% (L + 5.50%)	3/1/2027	11,490		11,412		11,605
BCPE Empire Holdings, Inc.	Distribution & Logistics	4.15% (L + 4.00%)	6/11/2026	10,869		10,780		10,801
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	19,654		19,573		19,654
Bearcat Buyer, Inc.	Healthcare Services	5.25% (L + 4.25%)	7/9/2026	4,081		4,062		4,081
Bleriot US Bidco Inc.	Federal Services	5.00% (L + 4.75%)	10/31/2026	4,292		4,254		4,292
Bleriot US Bidco Inc.	Federal Services	5.00% (L + 4.75%)	10/31/2026	671		665		671
Bluefin Holding, LLC	Software	4.15% (L + 4.00%)	9/4/2026	9,900		9,775		9,900
Bracket Intermediate Holding Corp.	Healthcare Services	4.48% (L + 4.25%)	9/5/2025	14,663		14,610		14,516
Brave Parent Holdings, Inc.	Software	4.15% (L + 4.00%)	4/18/2025	11,217		11,190		11,147
Cano Health, LLC	Healthcare Services	5.50% (L + 4.75%)	11/23/2027	6,308		6,244		6,244
Cardinal Parent, Inc.	Software	5.25% (L + 4.50%)	11/12/2027	7,038		6,932		6,967
CentralSquare Technologies, LLC	Software	4.00% (L + 3.75%)	8/29/2025	14,700		14,674		13,745
Certara Holdco, Inc.	Healthcare I.T.	3.75% (L + 3.50%)	8/15/2024	1,246		1,248		1,247
CHA Holdings, Inc.	Business Services	5.50% (L + 4.50%)	4/10/2025	977		977		914
CommerceHub, Inc.	Software	4.75% (L + 4.00%)	12/29/2027	5,833		5,804		5,833
Confluent Health, LLC	Healthcare Services	5.15% (L + 5.00%)	6/24/2026	4,398		4,354		4,348
Covenant Surgical Partners, Inc.	Healthcare Services	4.15% (L + 4.00%)	7/1/2026	9,876		9,795		9,678
CRCI Longhorn Holdings, Inc.	Business Services	3.65% (L + 3.50%)	8/8/2025	14,663		14,611		14,498
Dealer Tire, LLC	Distribution & Logistics	4.40% (L + 4.25%)	12/12/2025	9,900		9,879		9,859
Dentalcorp Health Services ULC (fka Dentalcorp Perfect Smile ULC)	Healthcare Services	4.75% (L + 3.75%)	6/6/2025	14,636		14,611		14,421
Drilling Info Holdings, Inc.	Business Services	4.40% (L + 4.25%)	7/30/2025	18,576		18,511		18,035
Edgewood Partners Holdings LLC	Business Services	5.25% (L + 4.25%)	9/6/2024	7,356		7,304		7,301
eResearchTechnology, Inc.	Healthcare Services	5.50% (L + 4.50%)	2/4/2027	3,911		3,876		3,883
EyeCare Partners, LLC	Healthcare Services	3.90% (L + 3.75%)	2/18/2027	12,071		12,057		11,796
EyeCare Partners, LLC	Healthcare Services	3.90% (L + 3.75%)	2/18/2027	2,838		2,834		2,773
Fastlane Parent Company, Inc.	Distribution & Logistics	4.65% (L + 4.50%)	2/4/2026	3,439		3,386		3,419
Frontline Technologies Intermediate Holdings, LLC	Software	6.75% (L + 5.75%)	9/18/2023	6,513		6,513		6,513
Greenway Health, LLC	Software	4.75% (L + 3.75%)	2/16/2024	14,520		14,527		13,322
Heartland Dental, LLC	Healthcare Services	3.65% (L + 3.50%)	4/30/2025	18,540		18,478		18,104
HS Purchaser, LLC / Help/Systems Holdings, Inc.	Software	5.75% (L + 4.75%)	11/19/2026	18,440		18,270		18,440
Higginbotham Insurance Agency, Inc.	Financial Services	6.50% (L + 5.75%)	11/25/2026	7,187		7,134		7,331
Idera, Inc.	Software	5.00% (L + 4.00%)	6/28/2024	9,435		9,406		9,435
Institutional Shareholder Services Inc.	Business Services	4.75% (L + 4.50%)	3/5/2026	983		975		971
Kestra Advisor Services Holdings A, Inc.	Business Services	4.40% (L + 4.25%)	6/3/2026	9,381		9,318		9,241
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	2,627		2,612		2,575
LSCS Holdings, Inc.	Healthcare Services	4.51% (L + 4.25%)	3/17/2025	678		674		665
Maravai Intermediate Holdings, LLC	Specialty Chemicals & Materials	5.25% (L + 4.25%)	10/19/2027	4,125		4,085		4,148
Market Track, LLC	Business Services	5.25% (L + 4.25%)	6/5/2024	4,729		4,725		4,645
Mavis Tire Express Services Corp.	Retail	5.00% (L + 4.00%)	3/20/2025	4,828		4,733		4,846
MED ParentCo, LP	Healthcare Services	4.40% (L + 4.25%)	8/31/2026	10,272		10,191		10,148
MED ParentCo, LP	Healthcare Services	4.40% (L + 4.25%)	8/31/2026	2,576		2,554		2,545
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	4,502		4,492		4,480
Ministry Brands, LLC	Software	5.00% (L + 4.00%)	12/2/2022	871		869		867
National Intergovernmental Purchasing Alliance Company	Business Services	4.00% (L + 3.75%)	5/23/2025	8,701		8,698		8,658

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Portfolio Company and Type of Investment	Industry	Interest Rate (1)	Maturity Date	Principal Amount or Par Value		Cost		Fair Value (2)
National Mentor Holdings, Inc. (aka Civitas Solutions, Inc.)	Healthcare Services	4.43% (L + 4.25%)	3/9/2026	$	8,887	$	8,887	$	8,897
National Mentor Holdings, Inc. (aka Civitas Solutions, Inc.)	Healthcare Services	4.51% (L + 4.25%)	3/9/2026	398		398		398
Navex Topco, Inc.	Software	3.40% (L + 3.25%)	9/5/2025	18,208		18,079		17,929
Navicure, Inc.	Healthcare Services	4.75% (L + 4.00%)	10/22/2026	4,107		4,097		4,110
Newport Group Holdings II, Inc.	Business Services	3.75% (L + 3.50%)	9/12/2025	4,888		4,870		4,851
Orion Advisor Solutions, Inc.	Business Services	5.00% (L + 4.00%)	9/24/2027	5,237		5,186		5,260
Outcomes Group Holdings, Inc.	Healthcare Services	3.50% (L + 3.25%)	10/24/2025	3,400		3,394		3,349
Pelican Products, Inc.	Business Products	4.50% (L + 3.50%)	5/1/2025	4,875		4,867		4,796
Peraton Corp. (fka MHVC Acquisition Corp.)	Federal Services	6.25% (L + 5.25%)	4/29/2024	15,272		15,225		15,310
Planview Parent, Inc.	Software	4.75% (L + 4.00%)	12/17/2027	6,484		6,419		6,496
Premise Health Holding Corp.	Healthcare Services	3.75% (L + 3.50%)	7/10/2025	13,583		13,538		13,279
Project Accelerate Parent, LLC	Business Services	5.25% (L + 4.25%)	1/2/2025	9,822		9,786		8,939
Project Boost Purchaser, LLC	Business Services	5.00% (L + 4.25%)	6/1/2026	1,995		1,975		2,002
Quest Software US Holdings Inc.	Software	4.46% (L + 4.25%)	5/16/2025	14,700		14,650		14,480
Ryan Specialty Group, LLC	Business Services	4.00% (L + 3.25%)	9/1/2027	3,491		3,441		3,491
Sierra Enterprises, LLC	Food & Beverage	5.00% (L + 4.00%)	11/11/2024	2,431		2,429		2,393
Sovos Brands Intermediate, Inc.	Food & Beverage	4.96% (L + 4.75%)	11/20/2025	3,591		3,582		3,609
Spring Education Group, Inc. (fka SSH Group Holdings, Inc.)	Education	4.50% (L + 4.25%)	7/30/2025	12,183		12,161		11,665
Symplr Software, Inc.(fka Caliper Software, Inc.)	Healthcare I.T.	5.25% (L + 4.50%)	12/22/2027	10,000		9,850		9,913
Syndigo LLC	Software	5.25% (L + 4.50%)	12/15/2027	15,000		14,888		14,888
TIBCO Software Inc.	Software	3.90% (L + 3.75%)	6/30/2026	7,654		7,637		7,572
Unified Women’s Healthcare, LP	Healthcare Services	5.00% (L + 4.25%)	12/20/2027	10,000		9,923		9,975
Wirepath LLC	Distribution & Logistics	4.25% (L + 4.00%)	8/5/2024	17,127		17,127		16,527
WP CityMD Bidco LLC	Healthcare Services	5.50% (L + 4.50%)	8/13/2026	19,868		19,701		19,914
VT Topco, Inc.	Business Services	3.65% (L + 3.50%)	8/1/2025	2,795		2,795		2,763
YI, LLC	Healthcare Services	5.00% (L + 4.00%)	11/7/2024	9,691		9,685		8,915
Total Funded Investments				$	619,147	$	615,974	$	609,981
Unfunded Investments - First lien
Cano Health, LLC	Healthcare Services	—	11/23/2021	$	2,300	$	(23)	$	(23)
Covenant Surgical Partners, Inc.	Healthcare Services	—	7/1/2021	2,000		(20)		(40)
Higginbotham Insurance Agency, Inc.	Financial Services	—	11/25/2022	2,023		(15)		40
Planview Parent, Inc.	Software	—	3/31/2021	1,515		—		3



Total Unfunded Investments				$	7,838	$	(58)	$	(20)
Total Investments				$	626,985	$	615,916	$	609,961

(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.

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Below is certain summarized financial information for SLP III as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and March 31, 2020:


Selected Balance Sheet Information:	March 31, 2021		December 31, 2020
	(in thousands)		(in thousands)
Investments at fair value (cost of $667,794 and $615,916)	$	666,648	$	609,961
Cash and other assets	20,507		10,176
Receivable from unsettled securities sold	4,828		—
Total assets	$	691,983	$	620,137

Credit facility	$	474,200	$	424,200
Deferred financing costs	(2,210)		(2,471)
Payable for unsettled securities purchased	50,333		47,192
Distribution payable	5,658		3,800
Other liabilities	2,505		2,501
Total liabilities	530,486		475,222

Members' capital	$	161,497	$	144,915
Total liabilities and members' capital	$	691,983	$	620,137


	Three Months Ended
Selected Statement of Operations Information:		March 31, 2021		March 31, 2020
		(in thousands)		(in thousands)
Interest income		$	7,371	$	7,407
Other income		103		181
Total investment income		7,474		7,588

Interest and other financing expenses		2,584		3,696
Other expenses		171		157
Total expenses		2,755		3,853


Net investment income		4,719		3,735

Net realized gains (losses) on investments		212		(2)
Net change in unrealized appreciation (depreciation) of investments		4,809		(63,348)
Net increase (decrease) in members' capital		$	9,740	$	(59,615)

For the three months ended March 31, 2021 and March 31, 2020, we earned approximately $4.5 million and $2.9 million of dividend income related to SLP III, which is included in dividend income. As of March 31, 2021 and December 31, 2020, approximately $4.5 million and $3.0 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~~March 31, 2021.

On March 30, ~~2017.~~2020, an affiliate of the Investment Adviser purchased directly from NMNLC 105,030 shares of NMNLC’s common stock at a price of $107.73 per share, which represented the net asset value per share of NMNLC at the

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date of purchase, for an aggregate purchase price of approximately $11.3 million. Immediately thereafter, NMNLC redeemed 105,030 shares of its common stock held by NMFC in exchange for a promissory note with a principal amount of $11.3 million and a 7.0% interest rate, which was repaid by NMNLC to NMFC on March 31, 2020.

Below is certain summarized property information for NMNLC as of ~~September 30, 2017:~~March 31, 2021:

Lease

Total

Fair Value as of

Lease

Total

Fair Value as of

Portfolio Company

Tenant

Expiration Date

Location

Square Feet

September 30, 2017

Portfolio Company

Tenant

Expiration Date

Location

Square Feet

March 31, 2021

(in thousands)

NM APP Canada Corp.

A.P. Plasman, Inc.

9/30/2031

Ontario, Canada

436

7,685

NM NL Holdings LP / NM GP Holdco LLC

Various

102,635

NM GLCR LP

Arctic Glacier U.S.A.

2/28/2038

214

29,463

NM CLFX LP

Victor Equipment Company

8/31/2033

423

14,896

NM APP Canada, Corp.

A.P. Plasman, Inc.

9/30/2031

Canada

436

12,488

NM APP US LLC

Plasman Corp, LLC / A-Brite LP

9/30/2033

Fort Payne, AL

261

5,119

NM APP US LLC

Plasman Corp, LLC / A-Brite LP

9/30/2033

AL / OH

261

7,525

Cleveland, OH

NM DRVT LLC

FMH Conveyors, LLC

10/31/2031

Jonesboro, AR

195

5,152

NM DRVT LLC

FMH Conveyors, LLC

10/31/2031

195

7,194

NM YI, LLC

Young Innovations, Inc.

10/31/2039

IL / MO

212

6,866

NM JRA LLC

J.R. Automation Technologies, LLC

1/31/2031

Holland, MI

2,161

NM JRA LLC

J.R. Automation Technologies, LLC

1/31/2031

3,861

NM KRLN LLC

Kirlin Group, LLC

6/30/2029

Rockville, MD

7,510

NM KRLN LLC

None

N/A

717

27,627

185,645

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 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, 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~~$21.4 million and ~~$29.2~~$21.4 million, respectively. The collateralized agreement to resell is on non-accrual. The collateralized agreement to resell is guaranteed by a private hedge ~~fund.~~fund, PPVA Fund, L.P. 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, PPVA Black Elk (Equity) LLC, 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 alleged 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.

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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. During the year ended December 31, 2018, we received a $1.5 million payment from our insurance carrier in respect to the settlement. As of March 31, 2021 and December 31, 2020, the SPP Agreement has a cost basis of $14.5 million and $14.5 million, respectively, and a fair value of $10.4 million and $10.4 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 months ended March 31, 2021 and March 31, 2020, we recognized PIK and non-cash interest from investments of approximately $5.8 million and $3.5 million, respectively, and PIK and non-cash dividends from investments of approximately $5.2 million and $1.6 million, 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. 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.

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The following table shows the distribution of our investments and securities purchased under collateralized agreements to resell on the 1 to 4 investment rating scale at fair value as of ~~September 30, 2017:~~March 31, 2021:


(in millions)	As of March 31, 2021
Investment Rating		Cost		Percent		Fair Value		Percent
Investment Rating 1		$	466.1	15.2	%	$	494.4	16.3	%
Investment Rating 2		2,342.9		76.6	%	2,397.1		78.8	%
Investment Rating 3		151.4		5.0	%	112.0		3.7	%
Investment Rating 4		98.9		3.2	%	36.5		1.2	%
		$	3,059.3	100.0	%	$	3,040.0	100.0	%

(in millions) As of September 30, 2017
Investment Rating Par Value(1) Percent Fair Value Percent
Investment Rating 1 $ 134.5
8.4 % $ 139.1
7.5 %
Investment Rating 2 1,461.5
91.6 % 1,706.5
92.5 %
Investment Rating 3 —
— % —
— %
Investment Rating 4 —
— % 0.4
— %
$ 1,596.0
100.0 % $ 1,846.0
100.0 %


~~(1)~~	~~Excludes shares and warrants.~~

As of ~~September 30, 2017,~~March 31, 2021, all investments in our portfolio had an Investment Rating of 1 or 2 with the exception of ~~one~~six portfolio ~~company~~companies that had an Investment Rating of 3 and four portfolio companies that had an Investment Rating of 4.

During the first quarter of ~~2017,~~2020, we placed our ~~entire first lien notes position~~investment in ~~Sierra Hamilton LLC / Sierra Hamilton Finance,~~our junior preferred shares of UniTek Global Services, Inc. ("~~Sierra"~~UniTek") on non-accrual status ~~due to its ongoing restructuring.~~and the investment had a rating of 4. As of ~~June 30, 2017,~~March 31, 2021, our ~~investment in Sierra placed on non-accrual status represented~~junior preferred shares of UniTek had an aggregate cost basis of ~~$27.2~~$34.4 million, an aggregate fair value of ~~$12.7~~$0.0 million and total unearned dividend income of $1.4 million for the three months then ended. During the fourth quarter of 2020, we placed an aggregate principal amount of $9.7 million of our investment in our senior preferred shares of UniTek on non-accrual status and the investment had a rating of 4. As of March 31, 2021, our senior preferred shares of UniTek on non-accrual had an aggregate cost basis of $9.7 million, an aggregate fair value of approximately $4.0 million and total unearned dividend income of approximately $0.5 million for the three months then ended.

During the first quarter of 2018, we placed our first lien positions in Education Management II LLC on non-accrual status as the portfolio company announced its intention to 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 March 31, 2021, our investment in EDMC, with an Investment Rating of 4 had an aggregate cost basis of $1.4 million, an aggregate fair value of $0.0 million and total unearned interest income of ~~$1.4~~$0.0 million for the ~~six~~three months then ended. ~~In July 2017, Sierra completed a restructuring which resulted in a material modification of the original terms and an extinguishment of~~

Since March 31, 2020, our ~~original~~ investment in ~~Sierra. Prior to the extinguishment in July 2017, our original investment in Sierra~~NM KRLN LLC had an ~~aggregate cost~~investment rating of ~~$27.3 million, an aggregate fair value of $12.9 million~~4 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~~$8.9 million and an aggregate fair value of ~~$12.1~~$0.7 million.

~~During the third quarter of 2016, we placed~~ Since December 31, 2019, our ~~entire second lien~~subordinated position in ~~Transtar Holding Company (“Transtar”) on non-accrual status due to its ongoing restructuring.~~PPVA Black Elk (Equity) LLC had an investment rating of 4. As of March 31, ~~2017,~~2021, our investment in ~~Transtar~~this security had an aggregate cost basis of $31.2 million, an aggregate fair value of $3.6 million and total unearned interest income of approximately $1.8 million for the three 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$14.5 million and an aggregate fair value of ~~$12.0~~approximately $10.4 million.

During the ~~third quarter~~year ended December 31, 2019, our security purchased under collateralized agreements to resell was placed on non-accrual and the investment had an Investment Rating 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").~~4. As of ~~June 30, 2016,~~March 31, 2021, our ~~first lien positions~~investment in ~~ATI~~this security had an aggregate cost basis of ~~$1.5~~$30.0 million and an aggregate fair value of $0approximately $21.4 million.

In response to the continuing impact of the outbreak of the COVID-19 pandemic and ~~no unearned interest income~~its impact on the overall market environment and the health of our portfolio companies, we performed a company-by-company evaluation of the anticipated impact of the COVID-19 pandemic. The evaluation process consisted of dialogue with sponsors and portfolio companies to understand the COVID-19 pandemic's impact on each portfolio company, the portfolio company’s response to any disruption, the level of sponsor support, and the current and projected financial and liquidity position of the portfolio company. Based on this evaluation, we assigned each portfolio company a “Risk Rating” of red, orange, yellow and green, with red reflecting a portfolio company with the potential for the ~~period then ended.~~most severe impact, due to the COVID-19 pandemic, and green reflecting the least. We ~~wrote off~~will continue to monitor our ~~first lien positions in ATI~~portfolio companies and ~~recognized an aggregate realized loss of $1.5 million during~~provide support to their management teams where possible.

The following table shows 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~~Risk Rating of our ~~first lien positions in ATI, had an aggregate cost basis~~portfolio companies as of ~~$0.1 million and an aggregate fair value of $0.4 million.~~March 31, 2021:


(in millions)	As of March 31, 2021
Risk Rating		Cost		Percent		Fair Value		Percent
Red		$	87.1	2.8	%	$	67.2	2.2	%
Orange		163.0		5.3	%	154.1		5.1	%
Yellow		249.9		8.2	%	190.9		6.3	%
Green		2,559.3		83.7	%	2,627.8		86.4	%
		$	3,059.3	100.0	%	$	3,040.0	100.0	%

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Portfolio and Investment Activity

The fair value of our investments was approximately ~~$1,846.0~~$3,018.6 million in 82102 portfolio companies at ~~September 30, 2017~~March 31, 2021 and approximately ~~$1,558.8~~$2,953.5 million in 78104 portfolio companies at December 31, ~~2016.~~2020.

The following table shows our portfolio and investment activity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~September 30, 2016:~~March 31, 2020:


	Three Months Ended
(in millions)	March 31, 2021		March 31, 2020
New investments in 13 and 17 portfolio companies, respectively	$	223.4	$	181.7
Debt repayments in existing portfolio companies	190.7		151.5
Sales of securities in 2 and 3 portfolio companies, respectively	7.0		38.6
Change in unrealized appreciation on 47 and 6 portfolio companies, respectively	45.6		1.0
Change in unrealized depreciation on 55 and 112 portfolio companies, respectively	(12.1)		(205.7)

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.~~

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 March 31, 2021 and March 31, 2020

~~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)	March 31, 2021		March 31, 2020
Total interest income	$	47,009	$	61,636
Total dividend income	15,662		10,493
Other income	5,037		1,955
Total investment income	$	67,708	$	74,084

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~~decreased by approximately $6.4 million, or (9)%, for the three months ended ~~September 30, 2017 is adjusted~~March 31, 2021 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 March 31, 2020. For the three months ended ~~September 30, 2017,~~March 31, 2021, total investment income of ~~$51.2~~approximately $67.7 million consisted of approximately ~~$32.5~~$38.8 million in cash interest from investments, approximately ~~$1.5~~$5.8 million in PIK and non-cash interest from investments, approximately ~~$1.6~~$0.4 million in prepayment fees, net amortization of purchase premiums and discounts of approximately ~~$4.0~~$2.0 million, approximately ~~$4.5~~$10.5 million in cash dividends from investments, ~~$5.4~~approximately $5.2 million in PIK and non-cash dividends from investments and approximately ~~$1.7~~$5.0 million in other income. ~~Our Adjusted Net Investment Income was $26.3~~The decrease in interest income of approximately $14.6 million ~~for~~during the three months ended ~~September 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~~March 31, 2021 as compared to the three months ended ~~September 30, 2016.~~March 31, 2020 was primarily due to lower LIBOR rates on smaller invested balances. Our smaller invested balances were driven by the repayments of our revolving credit facilities due to asset sales and repayments greater than asset originations during 2020. The ~~22%~~ increase in ~~total investment~~dividend income ~~primarily results from an increase in interest income of approximately $3.7 million~~ for the three months ended ~~September 30, 2017~~March 31, 2021 as compared to the three months ended ~~September 30, 2016, which is attributable~~March 31, 2020 was primarily due to ~~larger invested balances and prepayment fees received associated with~~ the early repayment of four different portfolio companies. Our larger invested balances were driven by the proceeds from the October 2016 and April 2017 primary offering of our common stock and June 2017 unsecured notes issuances to originate new investments. The increase was also attributable to an increase of dividend incomereversal of approximately ~~$6.8~~$3.4 million ~~during~~of previously recorded PIK dividends related to our preferred shares in Permian Holdco 1, Inc., which was deemed to no longer be collectible for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016. The increase is primarily due to distributions from our investments in SLP II and NMNLC and PIK and non-cash dividend income from four equity positions.March 31, 2020. Other income during the three months ended ~~September 30, 2017,~~March 31, 2021, which represents fees that are generally non-recurring in nature, was primarily attributable to ~~structuring,~~ upfront, ~~amendment,~~ consent ~~bridge~~ and ~~commitment~~amendment fees received from ~~eleven~~19 different portfolio ~~companies and management fees from a non-controlled affiliated portfolio company.~~companies.

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Operating Expenses


	Three Months Ended
(in thousands)	March 31, 2021		March 31, 2020
Management fee	$	13,420	$	13,858
Less: management fee waiver	(3,637)		(3,543)
Total management fee	9,783		10,315
Incentive fee	7,248		7,826



Interest and other financing expenses	19,385		22,194
Administrative expenses	1,129		1,040
Professional fees	726		905
Other general and administrative expenses	442		499
Total expenses	38,713		42,779


Income tax expense	1		—
Net expenses after income taxes	$	38,714	$	42,779

Three Months Ended
(in thousands) September 30, 2017 September 30, 2016
Management fee $ 8,422
$ 6,883
Less: management fee waiver (1,483 ) (1,102 )
Total management fee 6,939
5,781
Incentive fee 6,573
5,432
Capital gains incentive fee(1) —
—
Interest and other financing expenses 9,509
7,171
Professional fees 819
723
Administrative expenses 652
586
Other general and administrative expenses 346
390
Total expenses 24,838
20,083
Less: expenses waived and reimbursed —
—
Net expenses before income taxes 24,838
20,083
Income tax expense 106
22
Net expenses after income taxes $ 24,944
$ 20,105


~~(1)~~	~~Capital gains incentive fee accrual assumes a hypothetical liquidation basis.~~

Our total net operating expenses ~~increased~~decreased by approximately ~~$4.8~~$4.1 million for the three months ended ~~September 30, 2017~~March 31, 2021 as compared to the three months ended ~~September 30, 2016.~~March 31, 2020. Our management fee ~~increased~~decreased by approximately ~~$1.2~~$0.5 million, net of a management fee waiver, and our incentive ~~fees increased~~fee decreased by approximately ~~$1.1~~$0.6 million for the three months ended ~~September 30, 2017~~March 31, 2021 as compared to the three months ended ~~September 30, 2016.~~March 31, 2020. The ~~increase~~decrease 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~~smaller invested balances, driven by the ~~October 2016 and April 2017 primary offerings~~repayments of ~~our common stock, our September 2016 and June 2017 unsecured notes issuance and our September 2016 convertible notes issuance and our use of leverage from~~ our revolving credit facilities due to asset sales and ~~SBA-guaranteed debentures to originate new investments.~~repayments greater than asset originations during 2020.

Interest and other financing expenses ~~increased~~decreased by approximately ~~$2.3~~$2.8 million during the three months ended ~~September 30, 2017~~March 31, 2021 as compared to the three months ended ~~September 30, 2016,~~March 31, 2020, primarily due to lower LIBOR rates on our ~~issuance of our unsecured notes~~floating rate borrowings and ~~additional issuance of our convertible notes and higher~~lower drawn balances on our ~~SBA-guaranteed debentures and Holdings Credit Facility (as defined below).~~revolving credit facilities. Our total professional fees, ~~total~~ administrative expenses and total other general and administrative expenses ~~remained relatively flat~~ for the three months ended ~~September 30, 2017~~March 31, 2021 as compared to the three months ended ~~September 30, 2016.~~March 31, 2020 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

Our net realized losses and unrealized gains resulted in a net loss of approximately $(1.5) million for the three months ended September 30, 2017 compared to net realized and unrealized gains resulting in a net gain of approximately $3.4 million for the same period in 2016. 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 30, 2017 was primarily driven by unrealized depreciation on 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 realized during the three months ended September 30, 2017. The provision for income taxes was attributable to equity investments that are held as of September 30, 2017 in three of our corporate subsidiaries. The net gain for the three months ended September 30, 2016 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 our investment in one portfolio company that was placed on non-accrual.


	Three Months Ended
(in thousands)	March 31, 2021		March 31, 2020
Net realized (losses) gains on investments	$	(10,496)	$	114
Net change in unrealized appreciation (depreciation) of investments	33,472		(204,739)

(Provision) benefit for taxes	(115)		898
Net realized and unrealized gains (losses)	$	22,861	$	(203,727)

~~Results of Operations for the Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Revenue~~

Nine Months Ended
(in thousands) September 30, 2017 September 30, 2016
Interest income $ 111,275
$ 112,119
Total dividend income 26,273
6,423
Other income 7,014
5,758
Total investment income $ 144,562
$ 124,300

Our total investment income increased by approximately $20.3 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The 16% increase in total investment income primarily results from an increase in dividend income of approximately $19.9 million during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The increase is primarily due to distributions from our investments in SLP II and NMNLC and PIK and non-cash dividend income from four equity positions. Other income during the nine months ended September 30, 2017, which represents fees that are generally non-recurring in nature, was primarily attributable to structuring, upfront, amendment, consent, bridge and commitment fees received from thirty-two 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
(in thousands) September 30, 2017 September 30, 2016
Management fee $ 24,311
$ 20,537
Less: management fee waiver (4,324 ) (3,662 )
Total management fee 19,987
16,875
Incentive fee 18,430
16,266
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
Professional fees 2,391
2,461
Administrative expenses 2,022
2,054
Other general and administrative expenses 1,214
1,206
Total expenses 69,174
59,406
Less: expenses waived and reimbursed (474 ) (347 )
Net expenses before income taxes 68,700
59,059
Income tax expense 341
113
Net expenses after income taxes $ 69,041
$ 59,172


~~(1)~~	~~Capital gains incentive fee accrual assumes a hypothetical liquidation basis.~~

Our total net operating expenses increased by approximately $9.9 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. Our management fee increased by approximately $3.1 million, net of a management fee waiver, for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. The increase in management 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 our common stock, our September 2016 and June 2017 unsecured notes issuance and our September 2016 convertible notes issuance and our use of leverage from our revolving credit facilities and SBA-guaranteed debentures 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 million during the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016, primarily due to our issuance of our 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). Our total professional fees, total administrative expenses and total other general and administrative expenses remained relatively flat for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016.

~~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

Our net realized losses and unrealized gains resulted in a net gain of approximately ~~$7.0~~$22.9 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to net realized gains and unrealized ~~gains~~losses resulting in a net ~~gain~~loss of approximately ~~$12.7~~$203.7 million for the same period in ~~2016.~~2020. 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~~three months ended ~~September 30, 2017~~March 31, 2021 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 30, 2017~~March 31, 2021 in ~~three~~four of our corporate subsidiaries. The net ~~gain~~loss for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2020 was primarily driven by the overall ~~increase~~decrease in ~~the~~ market prices of our investments during the period ~~but also included a further mark down~~due to the impact of the COVID-19 pandemic. See Monitoring of Portfolio Investments above for more details regarding the continuing impact of the COVID-19 pandemic on the health of our ~~investment in one~~ portfolio ~~company that was placed on non-accrual.~~companies.

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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.

Since our IPO, and through ~~September 30, 2017,~~March 31, 2021, we raised approximately ~~$614.6~~$893.2 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. On June 8, 2018 our shareholders approved the application of the modified asset coverage requirements set forth in Section 61(a) of the 1940 Act, 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 March 31, 2021, our asset coverage ratio was 184.6%.

At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, we had cash and cash equivalents of approximately ~~$39.6~~$47.3 million and ~~$45.9~~$79.0 million, respectively. Our cash provided by (used in) ~~provided by~~ operating activities during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~September 30, 2016~~March 31, 2020 was approximately ~~$(144.5)~~$44.3 million and ~~$112.8~~$(13.5) 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,~~October 24, 2017, we entered into the ~~Second~~Third 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 September 30, 2020, the maturity date of the Holdings Credit Facility is ~~structured~~September 30, 2023, 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 March 31, 2021, the maximum amount of revolving borrowings available under the Holdings Credit Facility is ~~$495.0~~$745.0 million. Under the Holdings Credit Facility, NMF Holdings is permitted to borrow up to 25.0%, 45.0%, 67.5% 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.

~~Effective January 1, 2016,~~ As of the most recent amendment on September 30, 2020, the Holdings Credit Facility bears interest at a rate of LIBOR plus 2.00% per annum for Broadly Syndicated Loans (as defined in the Third Amended and Restated Loan and Security Agreement) and LIBOR plus 2.50% per annum for all other investments. Previously the Holdings Credit Facility bore interest at a rate of LIBOR plus 1.75% per annum for Broadly Syndicated Loans (as defined in the Second Amended and Restated 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 Third Amended and Restated Loan and Security Agreement).

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	Three Months Ended						Nine Months Ended							Three Months Ended
(in millions)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016			(in millions)		March 31, 2021			March 31, 2020
Interest expense	$	3.1		$	2.2		$	8.7		$	7.2		Interest expense		$	2.7		$	5.4
Non-usage fee	$	0.1		$	0.2		$	0.5		$	0.5		Non-usage fee		$	0.4		$	0.2
Amortization of financing costs	$	0.4		$	0.4		$	1.2		$	1.2		Amortization of financing costs		$	0.5		$	0.3
Weighted average interest rate	3.4		%	2.8		%	3.3		%	2.7		%	Weighted average interest rate		2.4		%	3.5		%
Effective interest rate	4.1		%	3.6		%	4.0		%	3.4		%	Effective interest rate		3.2		%	3.8		%
Average debt outstanding	$	352.4		$	318.4		$	351.6		$	353.6		Average debt outstanding		$	450.2		$	629.5



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	First lien (2)(10)	7.33% (L + 6.00%/Q)	6/8/2023	$	34,613	$	34,491	$	34,486
	First lien (3)(10)(11) - Drawn	7.32% (L + 6.00%/Q)	6/8/2023	5,813		5,792		5,792
	First lien (3)(10)(11) - Drawn	7.27% (L + 6.00%/Q)	6/8/2023	605		603		603
				41,031		40,886		40,881		3.96	%
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 (4)	7.82% (L+ 6.50%Q)	9/18/2023	22,670		22,501		22,500
				39,462		39,168		39,166		3.79	%
Kronos Incorporated
Software	Second lien (2)	9.56% (L + 8.25%/Q)	11/1/2024	36,000		35,495		37,233		3.61	%
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
	First lien (3)(10)(11) - Drawn	7.33% (L + 6.00%/Q)	4/20/2021	2,721		2,669		2,721
	First lien (4)(10)	7.33% (L + 6.00%/Q)	4/20/2021	2,657		2,638		2,657
	First lien (2)(10)	7.33% (L + 6.00%/Q)	4/20/2021	1,636		1,608		1,636
	First lien (4)(10)	7.33% (L + 6.00%/Q)	4/20/2021	496		488		496
	First lien (3)(10)(11) - Drawn	7.33% (L + 6.00%/Q)	4/20/2021	180		178		180
				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
Distribution & Logistics	First lien (2)	6.56% (L + 5.25%/Q)	8/5/2024	27,800		27,663		27,948		2.71	%


Portfolio Company, Location and Industry (1)	Type of Investment	Interest Rate (13)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets

ConnectWise, LLC
Software	First lien (2)(11)	6.25% (L + 5.25%/Q)	11/26/2019	2/28/2025	$	54,914	$	54,648	$	54,914
	First lien (3)(11)(12) - Drawn	6.25% (L + 5.25%/M)	11/26/2019	2/28/2025	265		264		265
					55,179		54,912		55,179		4.38	%
CentralSquare Technologies, LLC
Software	Second lien (3)	7.70% (L + 7.50%/Q)	8/15/2018	8/31/2026	47,838		47,377		46,283
	Second lien (8)	7.70% (L + 7.50%/Q)	8/15/2018	8/31/2026	7,500		7,428		7,256
					55,338		54,805		53,539		4.24	%
iCIMS, Inc.
Software	First lien (8)(11)	7.50% (L + 6.50%/S)	9/12/2018	9/12/2024	41,636		41,358		41,857
	First lien (8)(11)	7.50% (L + 6.50%/S)	6/14/2019	9/12/2024	8,667		8,606		8,713
	First lien (3)(11)(12) - Drawn	7.50% (L + 6.50%/S)	9/12/2018	9/12/2024	2,915		2,886		2,915
					53,218		52,850		53,485		4.24	%
Salient CRGT Inc.
Federal Services	First lien (2)(11)	7.50% (L + 6.50%/S)	1/6/2015	2/28/2022	37,348		37,238		37,348
	First lien (8)(11)	7.50% (L + 6.50%/S)	6/6/2019	2/28/2022	12,762		12,576		12,762
					50,110		49,814		50,110		3.97	%
Integro Parent Inc.
Business Services	First lien (2)(11)	6.75% (L + 5.75%/M)	10/9/2015	10/31/2022	34,364		34,290		34,364
	First lien (3)(11)(12) - Drawn	4.36% (L + 4.25%/M)	6/8/2018	4/30/2022	3,938		3,918		3,938
	Second lien (8)(11)	10.25% (L + 9.25%/M)	10/9/2015	10/30/2023	10,000		9,958		10,000
					48,302		48,166		48,302		3.82	%
NM GRC Holdco, LLC
Business Services	First lien (2)(11)	8.50% (L + 6.00% + 1.50% PIK/Q)*	2/9/2018	2/9/2024	38,414		38,313		37,719
	First lien (2)(11)	8.50% (L + 6.00% + 1.50% PIK/Q)*	2/9/2018	2/9/2024	10,677		10,647		10,484
					49,091		48,960		48,203		3.82	%
Frontline Technologies Group Holdings, LLC
Software	First lien (4)(11)	6.75% (L + 5.75%/Q)	9/18/2017	9/18/2023	21,884		21,808		21,884
	First lien (2)(11)	6.75% (L + 5.75%/Q)	9/18/2017	9/18/2023	18,443		18,404		18,443
	First lien (2)(11)	6.75% (L + 5.75%/M)	9/18/2017	9/18/2023	7,613		7,578		7,613
					47,940		47,790		47,940		3.80	%
Brave Parent Holdings, Inc.
Software	Second lien (5)	7.61% (L + 7.50%/M)	4/17/2018	4/17/2026	22,500		22,420		22,500
	Second lien (2)	7.61% (L + 7.50%/M)	4/17/2018	4/17/2026	16,624		16,503		16,624
	Second lien (8)	7.61% (L + 7.50%/M)	4/17/2018	4/17/2026	6,000		5,956		6,000
					45,124		44,879		45,124		3.57	%



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 (13)	Acquisition Date	Maturity / Expiration Date	Principal Amount, Par Value or Shares		Cost		Fair Value		Percent of Net Assets

Quest Software US Holdings Inc.
Software	Second lien (2)	8.46% (L + 8.25%/Q)	5/17/2018	5/18/2026	$	43,697	$	43,379	$	43,685	3.46	%
Tenawa Resource Holdings LLC (15)
Tenawa Resource Management LLC
Specialty Chemicals & Materials	First lien (3)(11)	10.50% (Base + 8.00%/Q)	5/12/2014	10/30/2024	38,500		38,461		38,309		3.03	%
Affinity Dental Management, Inc.
Healthcare Services	First lien (2)(11)	7.00% (L + 6.00%/S)	9/15/2017	9/15/2023	26,153		26,117		26,153
	First lien (4)(11)	7.00% (L + 6.00%/S)	9/17/2019	9/15/2023	10,564		10,564		10,564
	First lien (3)(11)(12) - Drawn	7.00% (L + 6.00%/S)	9/15/2017	3/15/2023	1,738		1,720		1,738
					38,455		38,401		38,455		3.05	%
KAMC Holdings, Inc
Business Services	Second lien (2)(11)	8.20% (L + 8.00%/Q)	8/14/2019	8/13/2027	18,750		18,630		18,655
	Second lien (8)(11)	8.20% (L + 8.00%/Q)	8/14/2019	8/13/2027	18,750		18,630		18,656
					37,500		37,260		37,311		2.95	%
CoolSys, Inc.
Industrial Services	First lien (5)	7.00% (L + 6.00%/Q)	11/20/2019	11/20/2026	22,219		22,124		22,219
	First lien (2)	7.00% (L + 6.00%/Q)	11/20/2019	11/20/2026	10,270		10,226		10,270
	First lien (3)	7.00% (L + 6.00%/Q)	11/20/2019	11/20/2026	4,163		4,144		4,163
					36,652		36,494		36,652		2.90	%
Trader Interactive, LLC
Business Services	First lien (2)(11)	7.25% (L + 6.25%/Q)	6/15/2017	6/17/2024	31,524		31,408		31,524
	First lien (8)(11)	7.25% (L + 6.25%/Q)	6/15/2017	6/17/2024	4,886		4,868		4,886
	First lien (3)(11)(12) - Drawn	7.25% (L + 6.25%/M)	6/15/2017	6/15/2023	112		111		112
					36,522		36,387		36,522		2.89	%
GC Waves Holdings, Inc.**
Business Services	First lien (5)(11)	6.75% (L + 5.75%/Q)	10/31/2019	10/31/2025	22,275		22,141		22,397
	First lien (3)(11)	6.75% (L + 5.75%/Q)	10/31/2019	10/31/2025	9,810		9,721		9,864
	First lien (2)(11)	6.75% (L + 5.75%/Q)	10/31/2019	10/31/2025	3,636		3,614		3,656
					35,721		35,476		35,917		2.84	%
Definitive Healthcare Holdings, LLC
Healthcare Information Technology	First lien (8)(11)	6.50% (L + 5.50%/Q)	8/7/2019	7/16/2026	33,532		33,400		33,531
	First lien (3)(11)(12) - Drawn	6.50% (L + 5.50%/Q)	8/7/2019	7/16/2026	1,324		1,318		1,324
					34,856		34,718		34,855		2.76	%



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	%



	September 30, 2017			December 31, 2016
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
Cash and cash equivalents	39,646			45,928
Interest and dividend receivable	27,800			17,833
Receivable from unsettled securities sold	3,496			990
Receivable from affiliates	339			346
Other assets	6,455			2,886
Total assets	$	1,950,615		$	1,656,018
Liabilities
Borrowings
Holdings Credit Facility	$	376,163		$	333,513
Convertible Notes	155,440			155,523
Unsecured Notes	145,000			90,000
SBA-guaranteed debentures	144,000			121,745
NMFC Credit Facility	19,000			10,000
Deferred financing costs (net of accumulated amortization of $15,333 and $12,279, respectively)	(12,502		)	(14,041		)
Net borrowings	827,101			696,740
Payable for unsettled securities purchased	67,499			2,740
Management fee payable	6,939			5,852
Incentive fee payable	6,573			5,745
Interest payable	6,098			3,172
Payable to affiliates	786			136
Deferred tax liability	509			1,034
Other liabilities	3,027			2,037
Total liabilities	918,532			717,456
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
Paid in capital in excess of par	1,087,474			1,001,862
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		)
Total net assets	$	1,032,083		$	938,562
Total liabilities and net assets	$	1,950,615		$	1,656,018
Number of shares outstanding	75,805,019			69,717,814
Net asset value per share	$	13.61		$	13.46


~~(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 and Collateral Custodian. See Note 7. ~~Borrowings, for details.~~


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


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


~~(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.


~~(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) and holds a first lien investment in Tenawa Resource Management LLC, a wholly-owned subsidiary of Tenawa Resource 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 in Edmentum Ultimate Holdings, LLC and holds a second lien revolver in Edmentum, Inc. and Archipelago Learning, Inc., which are wholly-owned subsidiaries of Edmentum Ultimate Holdings, LLC.


~~(17)~~	~~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)~~	~~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)~~	~~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.~~


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



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
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
Permian Holdco 1, Inc. / Permian Holdco 2, Inc.	11,193		901		—			—		(94		)	12,000		190		708		23
Sierra Hamilton Holdings Corporation	—		12,782		—			—		(655		)	12,127		—		—		—
Total Non-Controlled/Affiliated Investments	$	57,440	$	125,961	$	(5,381	)	$	—	$	(4,401	)	$	173,619	$	2,077	$	11,287	$	888


~~(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.


~~(24)~~	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 30, 2017 and December 31, 2016, along with transactions during the nine months ended September 30, 2017 in which the issuer was a controlled investment, is as follows:


**	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 30, 2017, 14.9% of the Company’s total investments were non-qualifying assets.



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



	~~September 30, 2017~~
~~Industry Type~~	~~Percent of Total~~ ~~Investments at Fair Value~~
~~Business Services~~	~~33.41~~	%
~~Software~~	~~21.12~~	%
~~Healthcare Services~~	~~8.76~~	%
~~Consumer Services~~	~~7.85~~	%
~~Distribution & Logistics~~	~~6.13~~	%
~~Investment Fund~~	~~5.55~~	%
~~Education~~	~~5.50~~	%
~~Federal Services~~	~~4.18~~	%
~~Energy~~	~~3.89~~	%
~~Net Lease~~	~~1.50~~	%
~~Healthcare Information Technology~~	~~0.82~~	%
~~Packaging~~	~~0.78~~	%
~~Business Products~~	~~0.51~~	%
~~Total investments~~	~~100.00~~	%



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



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	%


Portfolio Company	Fair Value at December 31, 2020		Gross Additions (A)		Gross Redemptions (B)		Net Realized Gains (Losses)		Net Change In Unrealized Appreciation (Depreciation)		Fair Value at March 31, 2021		Interest Income		Dividend Income		Other Income
Permian Holdco 1, Inc. / Permian Holdco 2, Inc. / Permian Holdco 3, Inc. / Permian Trust	$	—	$	225	$	(12,213)	$	(12,213)	$	11,988	$	—	$	—	$	—	$	—
Sierra Hamilton Holdings Corporation	4,776		1		(106)		1		(17)		4,654		46		—		8
TVG-Edmentum Holdings, LLC / Edmentum Ultimate Holdings, LLC	98,236		1,509		—		—		17,071		116,816		417		1,505		94
Total Non-Controlled/Affiliated Investments	$	103,012	$	1,735	$	(12,319)	$	(12,212)	$	29,042	$	121,470	$	463	$	1,505	$	102


	March 31, 2021
Investment Type	Percent of Total Investments at Fair Value
First lien	52.23	%
Second lien	23.06	%
Subordinated	1.24	%
Equity and other	23.47	%
Total investments	100.00	%


	March 31, 2021
Industry Type	Percent of Total Investments at Fair Value
Software	28.71	%
Business Services	21.47	%
Healthcare Services	16.49	%
Education	8.60	%
Investment Funds (includes investments in joint ventures)	7.70	%
Net Lease	6.15	%
Federal Services	2.16	%
Distribution & Logistics	2.02	%
Specialty Chemicals & Materials	1.91	%
Healthcare Information Technology	1.60	%
Industrial Services	1.21	%
Energy	1.19	%
Packaging	0.43	%
Business Products	0.36	%
Total investments	100.00	%


	March 31, 2021
Interest Rate Type	Percent of Total Investments at Fair Value
Floating rates	93.25	%
Fixed rates	6.75	%
Total investments	100.00	%


Portfolio Company, Location and Industry(1)	Type of Investment	Interest Rate (12)	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 Health Services ULC (fka Dentalcorp Perfect Smile ULC)**
Healthcare Services	Second lien (3)	8.50% (L + 7.50%/M)	6/1/2018	6/8/2026	$	28,612	$	28,417	$	28,612
	Second lien (8)	8.50% (L + 7.50%/M)	6/1/2018	6/8/2026	7,500		7,452		7,500
					36,112		35,869		36,112		2.92	%
Total Funded Debt Investments - Canada					$	36,112	$	35,869	$	36,112	2.92	%
Funded Debt Investments - United Arab Emirates
GEMS Menasa (Cayman) Limited**
Education	First lien (8)	6.00% (L + 5.00%/S)	7/30/2019	7/31/2026	$	15,678	$	15,614	$	15,658	1.27	%
Total Funded Debt Investments - United Arab Emirates					$	15,678	$	15,614	$	15,658	1.27	%
Funded Debt Investments - United Kingdom
Shine Acquisition Co. S.à.r.l / Boing US Holdco Inc.**
Consumer Services	Second lien (2)(10)	8.50% (L + 7.50%/M)	9/25/2017	10/3/2025	$	37,853	$	37,697	$	37,853
	Second lien (8)(10)	8.50% (L + 7.50%/M)	9/25/2017	10/3/2025	6,000		5,975		6,000
					43,853		43,672		43,853		3.54	%
Aston FinCo S.a r.l. / Aston US Finco, LLC**
Software	Second lien (8)(10)	8.40% (L + 8.25%/M)	10/8/2019	10/8/2027	34,459		34,213		34,459		2.79	%
Total Funded Debt Investments - United Kingdom					$	78,312	$	77,885	$	78,312	6.33	%
Funded Debt Investments - United States
GS Acquisitionco, Inc.
Software	First lien (2)(10)	6.75% (L + 5.75%/S)	8/7/2019	5/24/2024	$	26,639	$	26,517	$	26,639
	First lien (2)(10)	6.75% (L + 5.75%/S)	8/7/2019	5/24/2024	25,950		25,818		25,950
	First lien (5)(10)	6.75% (L + 5.75%/S)	8/7/2019	5/24/2024	22,193		22,091		22,193
	First lien (2)(10)	6.75% (L + 5.75%/S)	8/7/2019	5/24/2024	12,649		12,578		12,649
					87,431		87,004		87,431		7.07	%
PhyNet Dermatology LLC
Healthcare Services	First lien (2)(10)	6.50% (L + 5.50%/M)	9/17/2018	8/16/2024	49,857		49,528		48,844
	First lien (3)(10)	6.50% (L + 5.50%/M)	9/17/2018	8/16/2024	27,857		27,623		27,291
					77,714		77,151		76,135		6.15	%
Associations, Inc.
Business Services	First lien (2)(10)	8.00% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	45,932		45,751		45,932
	First lien (8)(10)	8.00% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	5,272		5,252		5,272
	First lien (2)(10)(11) - Drawn	8.00% (L + 4.00% + 3.00% PIK/Q)*	7/30/2018	7/30/2024	10,419		10,371		10,419
	First lien (2)(10)(11) - Drawn	7.00% (L + 6.00%/Q)	7/30/2018	7/30/2024	2,033		2,020		2,033
					63,656		63,394		63,656		5.14	%