New Mountain talks $100 million five-year convertible notes with coupon of 5.5%-5.75%, up 10%

By Abigail W. Adams

Portland, Me., Aug. 15 – New Mountain Finance Corp. plans to price $100 million of five-year convertible notes after the market close on Wednesday with a coupon of 5.5% to 5.75% and fixed initial conversion premium of 10%, according to a market source.

Wells Fargo Securities LLC is the bookrunner for the registered deal, which carries a greenshoe of $15 million.

The notes are non-callable until May 15, 2023 and then are freely callable at par with a make-whole. There is takeover and dividend protection.

The notes are subject to a debt-to-equity ratio covenant and a secured debt ratio covenant, according to a 497 filing with the Securities and Exchange Commission.

The company’s debt to equity ratio may be no more than 1.65 to 1.00, and the secured debt ratio may be no more than 0.70 to 1.00.

Proceeds will be used to repay debt and make new investments.

New Mountain Finance is a New York-based closed-end, non-diversified management investment company regulated as a business development company.

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