New Mountain Finance Originations Slow After a Large Secondary Sale

The Tip Desk · November 10, 2026 · 3 min read

Adjusted net investment income was $24.1 million, or $0.26 a share, as the company declared a $0.25 fourth-quarter distribution.

New Mountain Finance Corporation (NMFC) reported adjusted net investment income of $24.1 million, or $0.26 a weighted average share, for the quarter ended September 30, 2026, down from $24.7 million, or $0.26 a share, in the prior quarter. Net investment income was $23.7 million, or $0.25 a share, versus $34.0 million, or $0.32 a share, a year earlier. The company declared a fourth-quarter 2026 distribution of $0.25 a share, payable December 31, 2026, matching the third-quarter payout.

The direct lender said it covered its dividend in the third quarter. Chairman Steven B. Klinsky said the company remains undervalued and that increasing internal ownership reflects confidence in long-term value. Chief executive John R. Kline said the firm is seeing positive underlying performance in many equity and PIK-yielding positions and remains focused on monetizations, with an objective to reinvest proceeds into first-lien, cash-paying assets.

Portfolio activity slowed sharply after the first-quarter secondary sale. For the three months ended September 30, 2026, NMFC originated $10.3 million of investments, compared with $73.3 million in the three months ended June 30. Repayments were $35.8 million and sales $8.1 million. The investment portfolio had a fair value of $2,265.7 million across 110 companies, down from $2,295.5 million and 113 companies at June 30. Weighted average yield to maturity at cost rose to approximately 12.0% from approximately 11.1%.

Net asset value was $10.67 a share, or $1,008.0 million, compared with $10.89 a share, or $1,028.2 million, as of June 30, 2026. Basic earnings were $0.04 a share. Net realized and unrealized losses were $20.0 million. Total investment income was $60.4 million, versus $80.5 million a year earlier. Interest and other financing expenses were $22.9 million.

Credit quality remained concentrated in the green bucket. Eighty-six percent of the portfolio was rated green on the company’s internal heatmap. Green-rated investments were 86.1% of fair value, with 17 yellow, six orange and one red portfolio companies. First-lien investments were $1,430.9 million, or 63.2% of the portfolio. Statutory debt to equity was 1.19x, or 1.15x net of available cash, versus 1.16x and 1.11x at June 30. Cash and cash equivalents were $41.9 million. Total statutory debt outstanding was $1,199.7 million. Available capacity across the Holdings Credit Facility, NMFC Credit Facility, unsecured notes and the management-company revolver was $815.4 million.

Subsequent to quarter-end, NMFC funded a $150.0 million private placement of unsecured notes on October 1, 2026, and reduced the Holdings Credit Facility commitment from $450.0 million to $350.0 million on October 2. The company extended the $150 million stock repurchase program through December 31, 2027, with about $79.5 million remaining available. On October 20, the SBA confirmed that SBIC I had repaid all of its outstanding debentures and approved SBIC I’s request to surrender its SBIC license.