New Mountain Finance Cuts Dividend as Investment Income Falls
The quarterly dividend was reduced 21.9% to $0.25 a share.
New Mountain Finance (NMFC), a business-development company, reported adjusted net investment income of $24.7 million, or $0.26 a share, for the second quarter, down from $0.32 a share a year earlier.
The decline came as the portfolio contracted and leverage increased, though credit quality improved. Non-accrual investments fell to 1.5% of portfolio fair value from 2.6% in the first quarter.
Net investment income declined 29% to $24.6 million from $34.6 million a year earlier. Basic and diluted earnings rose to $0.18 a share from $0.07 as investment losses narrowed.
Net expenses fell to $36.8 million from $48.9 million, while interest and other financing expense declined to $22.5 million from $31.1 million.
The investment portfolio shrank 1% from the prior quarter to $2.2955 billion at June 30. New Mountain originated $73.3 million of investments, while repayments and sales totaled $104.4 million, producing $31.1 million of net portfolio outflows before other activity and valuation effects.
Statutory debt-to-equity rose to 1.16 times from 1.12 times at March 31. Leverage net of available cash increased to 1.11 times from 1.08 times, while net asset value slipped $0.03 to $10.89 a share.
Net realized and unrealized losses narrowed to $7.1 million from $26.7 million a year earlier, helping net assets from operations attributable to New Mountain increase to $17.3 million from $7.8 million. The lower regular dividend aligned the payout more closely with the quarter’s reduced adjusted investment income.