June 3,
2022
Rajib Chanda, Esq.
Nathan Somogie, Esq.
Simpson Thacher & Bartlett LLP
900 G Street, N.W.
Washington, D.C. 20001
Re: New Mountain Guardian IV BDC, L.L.C.
File Nos. 000-56437; 814-01528
Dear Messrs. Chanda and Somogie:
On May 6, 2022, you filed a registration statement on Form 10 on behalf
of New
Mountain Guardian IV BDC, L.L.C. (the Fund ), in connection with the
registration of
the Fund s common stock under Section 12(g) of the Securities Exchange Act of
1934
(the Exchange Act ). We have reviewed the registration statement, and have
provided
our comments below. For convenience, we generally organized our comments using
headings, defined terms, and page numbers from the registration statement.
Where a
comment is made in one location, it is applicable to all similar disclosure
appearing
elsewhere in the registration statement.
Please respond to this letter within ten (10) business days by either
amending the
filing, providing the requested information, or advising us when you will
provide the
requested information. We may have additional comments after reviewing your
responses to the following comments, or any amendment to the filing.
We note that the Fund is voluntarily registering shares of its common
stock under
Section 12(g) of the Exchange Act. Please note that a filing on Form 10 goes
effective
automatically by lapse of time 60 days after the original filing date, pursuant
to Section
12(g)(1) of the Exchange Act. If our comments are not satisfactorily addressed
within
this 60-day time period, you should consider withdrawing the Fund s Form 10
prior to its
effectiveness, and re-filing a revised Form 10 that includes changes responsive
to our
comments. If the Fund chooses not to withdraw its Form 10 registration
statement, it will
be subject to the reporting requirements of Section 13(a) of the Exchange Act.
Additionally, we will continue to review the filing until all of our comments
have been
satisfactorily addressed.
Rajib Chanda, Esq.
Nathan Somogie, Esq.
June 3, 2022
Page 2
EXPLANATORY NOTE
1. In this section and later in the registration statement, the disclosure says
the Fund
intends to elect BDC status. Please revise to reflect that the Fund has
elected BDC
status.
2. Please add the following bullets to the prospective investors list:
a. Investment in the Fund is suitable only for sophisticated investors
and requires
the financial ability and willingness to accept the high risks and
lack of
liquidity inherent in an investment in the Fund.
b. The Fund intends to invest primarily in privately-held companies for
which
very little public information exists. Such companies are also
generally more
vulnerable to economic downturns and may experience substantial
variations
in operating results.
c. The privately-held companies and below-investment-grade securities in
which
the Fund will invest will be difficult to value and are illiquid.
d. The Fund will elect to be regulated as a BDC under the Investment
Company
Act of 1940 ( 1940 Act ), which imposes numerous restrictions on
the
activities of the Fund, including restrictions on leverage and on the
nature of
its investments.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
3. In the last paragraph, please revise the last sentence as follows: The
safe harbor
provisions of Section 21E of the 1934 Act and section 27A of the Securities
Act of
1933, which preclude civil liability for certain forward-looking statements,
do not
apply to the forward looking statements in this Registration Statement
because we are
an investment company.
REGISTRATION STATEMENT
Item 1. Business
Background (Page 2-3)
4. Under the paragraph, About New Mountain, there is a reference to
acyclical
industries. Please include a definition or example of what is meant by
non-cyclical
industries or acyclical industries.
Rajib Chanda, Esq.
Nathan Somogie, Esq.
June 3, 2022
Page 3
5. Under the paragraph, The Adviser, disclosure says that the Advisers
owners include
Steven Klinsky and related and other vehicles. Please disclose the
related and other
vehicles.
Investment Committee (Page 6)
6. Please clarify Kyle Peterson s role with respect to the Investment
Committee. For
example, is Mr. Peterson the rotating New Mountain Capital Managing Director
who
holds the position on the Investment Committee on an annual rotating basis?
Investment Structure (page 6-7)
7. Please provide additional disclosure as to the types of loans (e.g.,
secured, unsecured,
first lien, second lien, unitranche, mezzanine etc.) and types of equity
that the Fund
will principally invest in. Disclose credit quality and maturity policy with
respect to
the Fund s investments in loans. Disclose market cap policy with respect
to the
Fund s investments in equities. Please also add appropriate corresponding
risk
disclosure.
8. Please disclose any targeted allocation between loans and equity
investments.
9. Disclosure says that the Fund would look through any subsidiary to
determine
compliance with investment policies. Please disclose that debt of a
wholly-owned
subsidiary will be treated as debt of the BDC for asset coverage purposes.
Exit Strategies/Refinancing (page 8)
10. This section references Guardian IV multiple times. Please define and
clarify who
is Guardian IV.
Management and Incentive Fees (page 13)
11. Please include numeric examples for both income and capital gains incentive
fees.
The Administration Agreement (page 15)
12. Disclosure in this section says that the Administrator will provide
environmental,
social and governance services. Please disclose what kind of services
the
Administrator will do with respect to environmental, social and governance
services.
Expenses (page 15-18)
13. Under the paragraph Organization and Offering Expenses, the paragraph
includes
entertainment expenses while other similar disclosure throughout the
registration
Rajib Chanda, Esq.
Nathan Somogie, Esq.
June 3, 2022
Page 4
statement only refer to travel and meal expenses. Please reconcile and
clarify
which expenses the Fund will pay so an investor is on notice.
14. Please include a fee table in this section that conforms to the
requirements of Item 3.1
of Form N-2; the staff believes that such disclosure would be helpful to
investors.
15. Disclosure says that the Adviser may recapture a Specified Expense in any
year
within the thirty-six month period after the Adviser bears the expense.
Please
disclose that any such repayment will not cause the Fund s expense ratio
(after the
repayment is taken into account) to exceed both (1) the expense cap in
effect at the
time of waiver, and (2) the expense cap in effect at the time of recapture.
Indebtedness and Senior Securities (page 21)
16. Please delete or emergency, from the second to last sentence of this
section, which
says, we may also borrow amounts up to 5% of the value of our total
assets for
temporary or emergency purposes . See Section 18(g) of the 1940 Act.
Code of Ethics (page 21)
17. Please revise the link to the Fund s code of ethics so investors are not
directed to the
SEC s website generally.
Proxy Voting Policies and Procedures (page 21)
18. Please discuss how the Fund will approach relevant ESG proxy issues for any
portfolio investments, such as common stock.
Derivatives (page 27)
19. Disclosure on page 22 says that the Fund does not expect derivatives to be
a
significant component of the investment strategy. On page 27, under the
heading
Nature of the Fund s Investments, the disclosure refers to the Fund
s derivatives
transactions. Please reconcile the disclosure.
Below Investment Grade Instruments (page 28)
20. When referencing below investment grade instruments, please include term
junk
bonds.
Preferred Stock or Borrowings (page 29)
21. Please disclose if the Fund intends to issue preferred stock.
Rajib Chanda, Esq.
Nathan Somogie, Esq.
June 3, 2022
Page 5
Item 1A. Risk Factors
Summary Risk Factors
22. The summary of the risks is not inclusive of all the risk factors. Please
include a
summary of all risks presented. For example, the following are missing:
a. Capital Structure: The Fund can invest in Portfolio Companies at all
levels of
the capital structure. The Fund s Portfolio Companies may have, or
may be
permitted to incur, other debt that ranks equally with, or senior to,
the debt in
which the Fund invests.
b. Influence over management: Although the Fund will primarily make debt
and
non-control equity investments, the Fund may make investments that
allow
the Fund to exercise certain influence over management and the
strategic
direction of a Portfolio Company, subject to the restrictions under
the 1940
Act. The exercise of influence over an investment could expose the
assets of
the Fund to claims by such Portfolio Companies, their shareholders
and their
creditors.
c. Illiquid and long-term investments: Investment in the Fund requires a
long-
term commitment with no certainty of return. Many of the Fund s
Portfolio
Investments will be highly illiquid, and the Fund may not be able to
realize on
such Portfolio Investments in a timely manner.
d. Investment in Restructurings: The Fund may, either alone or in
conjunction
with one or more partners or co-venturers, make Portfolio Investments
in
restructurings, or partner with another company to make Portfolio
Investments
in restructurings, which involve Portfolio Companies that are
experiencing or
are expected to experience severe financial difficulties.
e. Debt and Mezzanine Investments: The Fund s investments are almost
entirely
rated below investment grade or may be unrated, which are often
referred to
as leveraged loans , high yield or junk securities,
and may be considered
high risk compared to debt instruments that are rated
investment grade. The
holders of obligations secured by the first priority liens on the
collateral will
generally control the liquidation of and be entitled to receive
proceeds from
any realization of the collateral to repay their obligations in full
before the
Fund.
Fund-Level Borrowings (page 40-41)
23. The disclosure says, Leverage Arrangements may also include a change of
control
provision that accelerates the indebtedness under the facility in the event
of certain
Rajib Chanda, Esq.
Nathan Somogie, Esq.
June 3, 2022
Page 6
change of control events. Please disclose with whom the leverage
arrangements will
be made.
Corporate Social Responsibility
24. The disclosure refers to an ESG exclusion policy. Please enhance the
disclosure to
discuss what types of investments would be excluded under the policy. For
example,
are companies in certain industries excluded, and/or are companies that
derive a
certain percentage of revenue from certain activities excluded?
Item 5. Directors and Executive Officers
Executive Officers Who Are Not Directors
25. Please state the nature of any family relationship between a director and
executive
officer and any other directorships held by director. The requirements are
similar to
those found in item 18.1 of Form N-2.
Portfolio Management
26. Please disclose if the portfolio managers are jointly AND primarily
responsible for
the day-to-day management of the portfolio. If the Team or Committee is
jointly and
primarily responsible for the day-to-day management of the portfolio, make
that clear
and provide a brief description of each person s role on the Team or
Committee. See
Instruction to Item 9 c. of Form N-2.
GENERAL COMMENTS
27. Please tell us if you have presented any test the waters materials to
potential investors
in connection with this offering. If so, we may have additional comments.
28. We note that portions of the filing, including the Fund s financial
statements, are
incomplete. We may have additional comments on such portions when you
complete
them in a pre-effective amendment, on disclosures made in response to this
letter, on
information supplied supplementally, or on exhibits added in any
amendments.
29. If applicable, please confirm in your response letter that FINRA has
reviewed the
proposed distribution arrangements for the offering described in the
registration
statement and that FINRA has issued a statement expressing no objections to
the
arrangements of the offering.
30. Responses to this letter should be in the form of either (i) an amended
draft
registration statement submitted pursuant to the JOBS Act, or (ii) a
pre-effective
amendment filed pursuant to Rule 472 under the Securities Act of 1933. The
Rajib Chanda, Esq.
Nathan Somogie, Esq.
June 3, 2022
Page 7
amendment filing should be accompanied by a supplemental letter that
includes your
responses to each of these comments. Where no change will be made in the
filing in
response to a comment, please indicate this fact in your supplemental
letter and
briefly state the basis for your position.
31. Please advise us if you have submitted, or expect to submit, any exemptive
application or no-action request in connection with the registration
statement.
We remind you that the Fund and its management are responsible for the accuracy
and
adequacy of their disclosures, notwithstanding any review, comments, action or
absence
of action by the staff.
*******
If you have any questions prior to filing a pre-effective amendment,
please call
me at (202) 551-6478.
Sincerely,
/s/ Ashley
Vroman-Lee
Ashley Vroman-Lee
Senior Counsel
cc: Michael J. Spratt, Assistant Director
Chad Eskildsen, Staff Accountant