New Mountain Finance Corporation Prices Public Offering of $300 Million 6.875% Notes Due 2029
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Insights
The pricing of a $300 million underwritten public offering of unsecured notes by New Mountain Finance Corporation is a significant financial event. The interest rate of 6.875% is competitive in the current market, especially when compared to the average corporate bond yield. Investors will note the semi-annual interest payment structure, which is typical for such financial instruments. The use of proceeds to repay existing debt is a prudent move, potentially improving the company's leverage ratios and interest coverage metrics. However, the impact on the company's cost of capital will depend on the terms of the debt being refinanced. This offering may also affect the company's stock price as the market reacts to the changes in capital structure and future interest obligations.
Understanding the broader market implications of New Mountain Finance Corporation's note offering requires analysis of current market conditions. The choice of multiple joint book-running managers indicates a robust strategy to ensure the successful placement of the notes. The involvement of prominent financial institutions may reassure investors of the offering's credibility. The decision to repay the company's senior secured revolving credit facility and maturing unsecured notes suggests a strategic approach to managing the company's debt profile. It is essential to monitor the market's reception of the notes, as this will provide insight into investor sentiment towards corporate debt offerings in the current economic climate.
From a legal perspective, the notes offering involves complex regulatory compliance. The filing of a preliminary prospectus supplement with the SEC indicates adherence to disclosure requirements, which is crucial for investor protection. The 'make-whole' premium provision is a standard feature in corporate bonds, designed to compensate the issuer if the notes are redeemed before maturity. Investors should be aware of the legal rights and obligations associated with these notes, including redemption processes and the implications of the unsecured status, which means the notes are not backed by specific collateral and therefore may carry a higher risk compared to secured debt.
The Notes will mature on February 1, 2029, and may be redeemed in whole or in part at the Company’s option at any time prior to January 1, 2029, at par plus a “make-whole” premium, and thereafter at par plus accrued interest. The Notes will bear interest at a rate of
The offering is expected to close on February 1, 2024, subject to the satisfaction of customary closing conditions.
BofA Securities, Inc., Deutsche Bank Securities Inc., SMBC Nikko Securities America, Inc., Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and MUFG Securities Americas Inc. are serving as the joint book-running managers for this offering. Keefe, Bruyette & Woods, A Stifel Company, is acting as joint lead manager for this offering. B. Riley Securities, Inc., Citizens JMP Securities, LLC and Oppenheimer & Co. Inc. are acting as co-managers for this offering. The Company intends to use the net proceeds from this offering to repay existing indebtedness outstanding under the Company’s senior secured revolving credit facility with Wells Fargo Bank, National Association and the
Investors are advised to consider carefully the investment objective, risks and charges and expenses of the Company before investing. The preliminary prospectus supplement dated January 25, 2024, and the accompanying prospectus dated May 18, 2023, each of which has been filed with the Securities and Exchange Commission (the “SEC”), contain a description of these matters and other important information about the Company and should be read carefully before investing.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of, the Notes referred to in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction. A registration statement (File No. 333-272060) relating to the Notes was filed and has been declared effective by the SEC.
This offering is being made solely by means of a written prospectus forming part of the effective registration statement and a related preliminary prospectus supplement, which may be obtained for free by visiting the SEC’s website at www.sec.gov or from of any of the following investment banks by calling: BofA Securities, Inc. at 1-800-294-1322, Deutsche Bank Securities Inc. at 1-800-503-4611, SMBC Nikko Securities America, Inc. at 1-888-882-9822, or Wells Fargo Securities, LLC at 1-800-645-3751.
ABOUT NEW MOUNTAIN FINANCE CORPORATION
New Mountain Finance Corporation (NASDAQ: NMFC) is a leading business development company (BDC) focused on providing direct lending solutions to
ABOUT NEW MOUNTAIN CAPITAL
New Mountain Capital, LLC (New Mountain) is a
FORWARD-LOOKING STATEMENTS
Statements included herein contain certain “forward-looking statements” within the meaning of the federal securities laws, including statements with regard to the Company’s Notes offering and the anticipated use of the net proceeds of the offering. Forward-looking statements can be identified by the use of forward looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of future events and our future performance, taking into account all information currently available to us. These statements are not guarantees of future events, performance, condition or results and involve a number of risks and uncertainties, including the factors set forth in “Risk Factors” and elsewhere in our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the SEC. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including, but not limited to, changes in the economy, financial and lending markets, and the geopolitical environment; changes in the markets in which we invest; changes in the interest rate environment and its impact on our business and portfolio companies; the impact of elevated levels of inflation and its impact on our portfolio companies and the industries in which we invest; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or regulated investment companies; and other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.
Any forward-looking statement speaks only as of the date on which it is made. New Mountain Finance Corporation undertakes no duty to update any forward-looking statements made herein, whether as a result of new information, future developments or otherwise, except as required by law.
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New Mountain Finance Corporation
Investor Relations
Laura C. Holson, Authorized Representative
NMFCIR@newmountaincapital.com
(212) 220-3505
Source: New Mountain Finance Corporation
FAQ
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When will the offering of 6.875% unsecured notes due 2029 close?
What is the interest rate for the 6.875% unsecured notes due 2029?
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