NMFC New Mountain Finance Corporation

Convertible Notes Offering

On March 8, 2023, New Mountain Finance Corporation (the “Company”) entered into private placement purchase agreements (the “Purchase Agreements”) with the several purchasers, each of whom is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), or a “qualified institutional buyer” within the meaning of Rule 144A promulgated under the Securities Act (the “Purchasers”), for the sale of an additional $60 million in aggregate principal amount of the Company’s 7.50% convertible notes due 2025 (the “Notes”). The Notes are being issued at 100.5% of the principal amount per note.

The Notes are an additional issuance of the 7.50% convertible notes due 2025 that the Company issued on November 2, 2022 in an aggregate principal amount of $200,000,000 (the “Existing Notes”). Subject to the terms and conditions of an indenture, dated as of August 20, 2018, as supplemented by the third supplemental indenture, dated November 2, 2022, by and between the Company and U.S. Bank National Association (as successor in interest to U.S. Bank National Association) governing the Notes (together, the “Indenture”), the Notes will be convertible into shares of the Company’s common stock (together with cash in lieu of fractional shares) at a conversion rate of 70.5365 shares of the Company’s common stock per $1,000 principal amount of Notes (subject to adjustments by the Company as provided in the Indenture), which is equal to a conversion price of approximately $14.18 per share of our common stock. This conversion rate and conversion price reflect an adjustment to the initial conversion rate of 70.4225 and resulting conversion price of $14.20 as a result of the Company’s fourth quarter dividend to stockholders of record as of December 16, 2022 in the amount of $0.32 per share. A holder may convert its Notes in whole or in part any time prior to the close of business on the scheduled business day immediately preceding the maturity date of October 15, 2025. The Notes will accrue interest at an annual rate of 7.50%, and will be payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2023. The Notes will be treated as a single series with the Existing Notes under the Indenture and will have the same terms as the Existing Notes. The Notes will have the same CUSIP number and will be fungible and rank equally with the Existing Notes. Upon the issuance of the Notes, the outstanding aggregate principal amount of the Company’s 7.50% convertible notes due 2025 will be $260 million.

The offering was made to the Purchasers in a private placement in reliance on Section 4(a)(2) of the Securities Act. The Purchase Agreements also include customary representations, warranties and covenants by the Company. The Notes, along with the shares of common stock underlying the Notes, will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

The closing of the private placement is expected to occur on March 14, 2023, subject to customary closing conditions. The Company intends to use the net proceeds from the Notes to repay outstanding indebtedness and for general corporate purposes.

The description above is only a summary of the material provisions of the Purchase Agreement and is qualified in its entirety by reference to the copy of the form of Purchase Agreement which is filed as Exhibit 10.1 to this current report on Form 8-K and is incorporated herein by reference thereto.