DEF 14A: New Mountain Finance Corp. to Hold Annual Stockholders Meeting on May 10, 2024

New Mountain Finance Corporation (NMFC) will hold its 2024 Annual Meeting of Stockholders virtually on May 10, 2024, to elect directors and ratify the appointment of Deloitte & Touche LLP as its independent accounting firm.

Summary

• New Mountain Finance Corporation (NMFC) is holding its Annual Meeting of Stockholders on May 10, 2024, at 11:30 a.m. Eastern Time, as a virtual meeting.
• Stockholders of record as of March 19, 2024, are eligible to vote.
• The meeting will address the election of three directors to serve for three-year terms, the ratification of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024, and any other business that may properly come before the meeting.
• Stockholders can vote online before the meeting or during the virtual meeting at www.virtualshareholdermeeting.com/NMFC2024, using a 16-digit control number.
• As of the record date, March 19, 2024, there were 106,289,293 shares of NMFC's common stock outstanding, each entitled to one vote.
• A quorum requires the presence, online or by proxy, of holders of a majority of the outstanding shares.
• The board of directors recommends voting for the election of the director nominees and for the ratification of Deloitte & Touche LLP.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, presenting neutral information about the upcoming annual meeting and proposals. The sentiment is slightly positive due to the recommendation to vote in favor of all proposals and the temporary fee waiver.

Positives

• The meeting is being held virtually, providing stockholders with the same rights and opportunities as an in-person meeting.
• The board of directors is recommending votes in favor of all proposals.
• The Investment Adviser has agreed to waive base management fees to reach a target of 1.25% on gross assets through the end of 2024.

Risks

• The company's ability to incur indebtedness is limited because its asset coverage must equal at least 150.0% immediately after it incurs indebtedness.
• The Company received exemptive relief from the SEC to permit the Company to exclude the SBA-guaranteed debentures of New Mountain Finance SBIC, L.P. and any other future small business investment company subsidiaries, including New Mountain Finance SBIC II, L.P., from the Company's 150.0% asset coverage requirement under the 1940 Act.
• As such, the Company's ratio of total consolidated assets to outstanding indebtedness may be less than 150.0%.
• This provides the Company with increased investment flexibility but also increases the Company's risks related to leverage.
• NMFC generally cannot invest in assets that are not qualifying assets under Section 55(a) of the 1940 Act unless at least 70.0% of its gross assets consist of qualifying assets immediately prior to such investment, and NMFC is not generally permitted to invest, subject to certain exceptions, in any portfolio company in which one of its affiliates currently has an investment.

Future Outlook

The company expects the 2025 Annual Meeting of Stockholders will be held in April 2025.

Management Comments

• John R. Kline, President and Chief Executive Officer, encourages stockholders to vote via the Internet to save time and processing costs.
• Joseph Hartswell, Chief Compliance Officer and Corporate Secretary, notes the importance of the meeting and encourages stockholders to vote their proxy.

Industry Context

As a business development company (BDC), NMFC's activities are subject to specific regulations and industry standards, particularly concerning asset coverage and investment limitations. The document reflects standard corporate governance practices for publicly traded companies, including the election of directors and the ratification of auditors.

Comparison to Industry Standards

• The base management fee of 1.4% of gross assets (less cash) is within the typical range for externally managed BDCs, although the temporary fee waiver to 1.25% is more favorable for investors.
• Companies like Ares Capital Corporation (ARCC) and Main Street Capital Corporation (MAIN) also operate as BDCs, but their fee structures and internal vs. external management structures differ.
• The virtual format of the annual meeting aligns with a growing trend among public companies to enhance accessibility and reduce costs.

Related Party Transactions

• NMFC has entered into an investment advisory and management agreement with New Mountain Finance Advisers BDC, L.L.C.
• NMFC has entered into an administration agreement with New Mountain Finance Administration, L.L.C.
• NMFC, the Investment Adviser and the Administrator have entered into a royalty-free Trademark License Agreement with NMC.
• NMFC Senior Loan Program IV LLC (SLP IV) is structured as a private joint venture investment fund between NMFC and SkyKnight Income Alpha, LLC (SkyKnight Alpha).

Stakeholder Impact

• Shareholders are asked to vote on key governance matters.
• The outcome of the votes will impact the composition of the board of directors and the selection of the independent auditor.
• The fee structure and waivers affect the returns to shareholders.

Next Steps

• Stockholders should review the proxy materials and vote on the proposals.
• The company will hold the Annual Meeting on May 10, 2024.
• The board of directors will consider the results of the votes and take appropriate action.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Directors, Deloitte & Touche LLP, Stockholders, Voting, New Mountain Finance Corporation, NMFC