What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-04 compared with 2021-05-05 · 472 added, 430 removed, 1080 unchanged (46% of the section changed)

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NMFC is also registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the "Advisers Act").

Since our IPO, and through March 31, 2021, we raised approximately $893.2 million in net proceeds from additional offerings of our common stock.

Since our IPO, and through June 30, 2021, we raised approximately $893.2 million in net proceeds from additional offerings of our common stock.

The Investment Adviser is a wholly-owned subsidiary of New Mountain Capital.

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The Investment Adviser manages our day-to-day

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operations and provides us with investment advisory and management services.

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Our portfolio may be concentrated in a limited number of industries.

As of March 31, 2021, our top five industry concentrations were software, business services, healthcare services, education and investment funds (which includes our investments in our joint ventures).

As of March 31, 2021, our net asset value was approximately $1,244.3 million and our portfolio had a fair value of approximately $3,018.6 million in 102 portfolio companies, with a weighted average yield to maturity at cost for income producing investments ("YTM at Cost") of approximately 8.8% and a weighted average yield to maturity at cost for all investments ("YTM at Cost for Investments") of approximately 8.2%.

As of June 30, 2021, our top five industry concentrations were software, business services, healthcare services, education and investment funds (which includes our investments in our joint ventures).

As of June 30, 2021, our net asset value was approximately $1,292.1 million and our portfolio had a fair value of approximately $3,088.9 million in 102 portfolio companies, with a weighted average yield to maturity at cost for income producing investments ("YTM at Cost") of approximately 8.8% and a weighted average yield to maturity at cost for all investments ("YTM at Cost for Investments") of approximately 8.2%.

The YTM at Cost calculation assumes that all investments, including secured collateralized agreements, not on non-accrual are purchased at cost on the quarter end date and held until their respective maturities with no prepayments or losses and exited at par at maturity.

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The actual yield to maturity may be higher or lower due to the future selection of the LIBOR contracts by the individual companies in our portfolio or other factors.

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Recent Developments

Holdings Credit Facility Amendment

On April 20, 2021, we entered into the Fifth Amendment to Loan and Security Agreement (the “Fifth Amendment”), which amended the Holdings Credit Facility.

Pursuant to the Fifth Amendment, the revolving period was extended from September 30, 2021 to April 20, 2024.

The Holdings Credit Facility continues to mature two years after the end of the revolving period.

With the extension of the revolving period, the Holdings Credit Facility will now mature on April 20, 2026.

As of the date of the Fifth Amendment, the aggregate commitments of the lenders to the Holding Credit Facility equaled $730.0 million.

The Fifth Amendment made a number of other modifications, including, but not limited to, the following.

The applicable spread used to determine the per annum interest rate payable under the Holdings Credit Facility was modified to be the higher of (a) 1.85% (reduced from 2.25%) and (b) the pro rata portion of the facility secured by assets that are First Lien Loans that are also Broadly Syndicated Loans (as each such term is defined under the Holdings Credit Facility) multiplied by 1.60% (reduced from 2.00%), plus the pro rata portion of the facility secured by assets that are not First Lien Loans that are Broadly Syndicated Loans multiplied by 2.10% (reduced from 2.50%).

The Fifth Amendment also modified the applicable spread that would be effective during an Event of Default or a Curable BDC Asset Coverage Event (as each such term is defined under the Holdings Credit Facility) by reducing such applicable spread from 3.75% to 3.25%.

NMFC Senior Loan Program IV LLC

On May 5, 2021, NMFC and SkyKnight Income Alpha, LLC ("SkyKnight Alpha") entered into a limited liability company agreement to establish a joint venture, NMFC Senior Loan Program IV LLC ("SLP IV").

NMFC and SkyKnight Alpha have transferred and contributed 100% of their membership interest in SLP I and SLP II to SLP IV, pursuant to contribution agreements.

The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals.

All investment decisions must be unanimously approved by the investment committee of SLP IV, which has equal representations from NMFC and SkyKnight Alpha.

On May 5, 2021, SLP IV entered into a $370.0 million revolving credit facility with Wells Fargo Bank, National Association which matures on May 5, 2026 and bears interest at a rate of LIBOR plus 1.60% per annum.

Management Fee Waiver

On May 4, 2021, we and the Investment Adviser entered into a Fee Waiver Agreement (the “Fee Wavier Agreement”).

Pursuant to the Fee Waiver Agreement, the Investment Adviser agreed to voluntarily reduce the base management fees payable to the Investment Adviser by us under the Investment Management Agreement.

Effective as of and for the quarter ended March 31, 2021 through the quarter ending December 31, 2022, the Investment Adviser agreed to waive a portion of the base management fee payable under the Investment Management Agreement such that the base management fee payable would not exceed 1.25% of our gross assets (the “Reduced Base Management Fee”).

If, for any quarterly period during the term of the Fee Wavier Agreement, the Reduced Base Management Fee would be greater than the base management fee calculated under the terms of the Investment Management Agreement, the Investment Adviser shall only be entitled to the lesser of those two amounts.

Distributions

On April 30, 2021, our board of directors declared a second quarter 2021 distribution of $0.30 per share payable on June 30, 2021 to holders of record as of June 16, 2021.

We will, subject to extraordinary circumstances, pay quarterly distributions to our common stockholders of at least thirty cents ($0.30) per quarter over the next seven quarters beginning with the second quarter distribution to be paid on June 30, 2021 and ending in the fourth quarter of 2022, subject to any possible extensions.

The declaration of any such future distributions will be subject to the availability of legally distributable funds and the discretion and approval of our board of directors.

The Investment Adviser has informed us that, to the extent necessary, it will waive incentive fees payable to the Investment Adviser in the event that there is an insufficient amount of legally distributable funds available to us to make the thirty cent ($0.30) distributions through the periods described above.

On July 29, 2021, our board of directors declared a third quarter 2021 distribution of $0.30 per share payable on September 30, 2021 to holders of record as of September 16, 2021.

COVID-19 Developments

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These surges have led to the re-introduction of such restrictions and business shutdowns in certain states in the United States and globally and could continue to lead to the re-introduction of such restrictions elsewhere.

Health advisors warn that recurring COVID-19 outbreaks will continue if reopening

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is pursued too soon or in the wrong manner, which may lead to the re-introduction or continuation of certain public health restrictions (such as instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues).

Health advisors warn that recurring COVID-19 outbreaks will continue if reopening is pursued too soon or in the wrong manner, which may lead to the re-introduction or continuation of certain public health restrictions (such as instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues).

Additionally, travelers from the United States are restricted from visiting many countries including countries in Europe, Asia, Africa and South America.

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These potential impacts, while uncertain, could adversely affect our and our portfolio companies’ operating results.

An increase in unrealized depreciation of our investment portfolio due to decreases in fair value of investments attributable to the COVID-19 pandemic has resulted in a significant reduction in our net asset value from the period of March 31, 2020 through December 31, 2020 as compared to its net asset value as of December 31, 2019.

As of the three months ended March 31, 2021, our net asset value has experienced a recovery from that of the three months ended March 31, 2020.

As of March 31, 2021, we were in compliance with our asset coverage requirements under the 1940 Act.

In addition, we are not in default of any of the asset coverage requirements under any of our credit facilities as of March 31, 2021.

An increase in unrealized depreciation of our investment portfolio due to decreases in fair value of investments attributable to the COVID-19 pandemic had resulted in a significant reduction in our net asset value from the period of March 31, 2020 through December 31, 2020 as compared to our net asset value as of December 31, 2019.

As of the three and six months ended June 30, 2021, our net asset value has experienced a recovery from that of the three and six months ended June 30, 2020.

As of June 30, 2021, we were in compliance with our asset coverage requirements under the 1940 Act.

In addition, we are not in default of any of the asset coverage requirements under any of our credit facilities as of June 30, 2021.

For additional discussion on the impact of COVID-19 on our portfolio companies, see “Monitoring of Portfolio Investments”.

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(1) Investments for which market quotations are readily available on an exchange are valued at such market quotations based on the closing price indicated from independent pricing services.

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(2) Investments for which indicative prices are obtained from various pricing services and/or brokers or dealers are valued through a multi-step valuation process, as described below, to determine whether the quote(s) obtained is representative of fair value in accordance with GAAP.

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As a result, the purchase of a commitment not completely funded may result in a negative fair value until it is called and funded.

The values assigned to investments are based upon available information and do not necessarily represent amounts which might ultimately be realized, since such amounts depend on future circumstances and cannot be reasonably determined until the individual positions are liquidated.

until the individual positions are liquidated.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period and the fluctuations could be material.

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As required by Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), we, to the extent that we hold such investments, do not adjust the quoted price for these investments, even in situations where we hold a large position and a sale could reasonably impact the quoted price.

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Level II—Pricing inputs are observable for the investments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level I.

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Changes in the observability of valuation inputs may result in the transfer of certain investments within the fair value hierarchy from period to period.

The following table summarizes the levels in the fair value hierarchy that our portfolio investments fall into as of March 31, 2021:

The following table summarizes the levels in the fair value hierarchy that our portfolio investments fall into as of June 30, 2021:

(in thousands) Total Level I Level II Level III

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We also attempt to identify and subsequently track any developments at the portfolio company, within its customer or vendor base or within the industry or the macroeconomic environment, generally, that may alter any material element of our original investment thesis.

This analysis is specific to each portfolio company.

This analysis is

specific to each portfolio company.

We leverage the knowledge gained from our original due diligence process, augmented by this subsequent monitoring, to continually refine our outlook for each of our portfolio companies and ultimately form the valuation of our investment in each portfolio company.

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After enterprise value coverage is demonstrated for our debt investments through the method(s) above, the Income Based Approach (as described below) may be employed to estimate the fair value of the investment.

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Market Based Approach:

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Significant increases or decreases in the EBITDA multiple will result in an increase or decrease in enterprise value, which may result in an increase or decrease in the fair value estimate of the investment.

In applying the market based approach as of March 31, 2021, we used the relevant EBITDA multiple ranges set forth in the table below to determine the enterprise value of our portfolio companies.

In applying the market based approach as of June 30, 2021, we used the relevant EBITDA multiple ranges set forth in the table below to determine the enterprise value of our portfolio companies.

We believe these were reasonable ranges in light of current comparable company trading levels and the specific portfolio companies involved.

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Significant increases or decreases in the discount rate would result in a decrease or increase in the fair value measurement.

In applying the income based approach as of March 31, 2021, we used the discount ranges set forth in the table below to value investments in our portfolio companies.

The unobservable inputs used in the fair value measurement of our Level III investments as of March 31, 2021 were as follows:

In applying the income based approach as of June 30, 2021, we used the discount ranges set forth in the table below to value investments in our portfolio companies.

The unobservable inputs used in the fair value measurement of our Level III investments as of June 30, 2021 were as follows:

(in thousands) Range

Type Fair Value as of March 31, 2021 Approach Unobservable Input Low High Weighted

Type Fair Value as of June 30, 2021 Approach Unobservable Input Low High Weighted

First lien $ 1,271,431 Market & income approach EBITDA multiple 4.5x 32.0x 14.8x

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40,538 Market quote Broker quote N/A N/A N/A

20,262 Other N/A(1) N/A N/A N/A

Subordinated 37,982 Market & income approach EBITDA multiple 8.0x 16.5x 12.0x

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Equity and other 788,082 Market & income approach EBITDA multiple 5.0x 26.5x 13.8x

Revenue multiple 5.0x 19.5x 16.5x

Discount rate 4.4 % 33.8 % 11.3 %

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(1) Fair value was determined based on transaction pricing or recent acquisition or sale as the best measure of fair value with no material changes in operations of the related portfolio company since the transaction date.

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NMFC Senior Loan Program I LLC

NMFC Senior Loan Program I LLC (“SLP I”) was formed as a Delaware limited liability company on May 27, 2014 and commenced operations on June 10, 2014.

SLP I is a portfolio company held by us.

SLP I was structured as a private investment fund, in which all of the investors were "qualified purchasers", as such term is defined in section 2(a)(51) of the 1940 Act.

Transfer of interests in SLP I are subject to restrictions and, as a result, interests are not readily marketable.

SLP I operates under a limited liability company agreement (the "SLP I Agreement") and will continue in existence until August 31, 2022, subject to earlier termination pursuant to certain terms of the SLP I Agreement.

The term may be extended pursuant to certain terms of the SLP I Agreement.

SLP I invests in senior secured loans issued by companies within our core industry verticals.

These investments are typically broadly syndicated first lien loans.

SLP I's re-investment period ended on August 31, 2020.

As of this date, the fund ceased new investment activity and any principal repayments from investments were used to repay SLP I's revolving credit facility.

Due to the expiration of the investment period, a member expressed an interest to withdraw from the fund.

Effective December 11, 2020, this member, with the consent of the other members pursuant to the Withdrawal and Distribution Agreement dated as of December 11, 2020, fully withdrew as a member of SLP I through an in-kind distribution.

Immediately following the effectiveness of this withdrawal, the remaining members of SLP I entered into the First Amended and Restated Limited Liability Company Agreement (the “Restated SLP I Agreement”), which among other matters, removed us as the managing member of SLP I and made other changes to its governance and management.

Under the Restated SLP I Agreement, SLP I is managed and all investment decisions are made by a board of members, which has equal representation from all investors.

No revisions were made to the term of SLP I or the reinvestment period end date.

As of March 31, 2021, SLP I had total investments with an aggregate fair value of approximately $125.9 million, debt outstanding of $88.6 million and capital that had been called and funded of $43.0 million.

SLP I was structured as a private investment fund and was a portfolio company held by the Company.

SLP I operated under a limited liability company agreement (the “SLP I Agreement”) and invested in senior secured loans issued by companies within our core industry verticals.

These investments were typically broadly syndicated first lien loans.

Effective May 5, 2021, us and SkyKnight Income III, LLC (“SkyKnight Income III”) entered into a Contribution Agreement in which 100% of both of our respective membership interests in SLP I were transferred and contributed to NMFC Senior Loan Program IV LLC ("SLP IV"), a Delaware limited liability company, structured as a private joint venture investment fund between the Company and SkyKnight Income Alpha, LLC ("SkyKnight Alpha").

On May 5, 2021, SLP I entered into Amendment 1 to the First Amended and Restated Limited Liability Company Agreement (the “Amended Restated SLP I Agreement”), which admitted SLP IV as the sole member of SLP I.

As of May 5, 2021, SLP I is a wholly-owned subsidiary of SLP IV.

As of May 4, 2021, SLP I had total investments with an aggregate fair value of approximately $119.6 million, debt outstanding of $79.5 million and capital that had been called and funded of $43.0 million.

As of December 31, 2020, SLP I had total investments with an aggregate fair value of approximately $124.7 million, debt outstanding of $188.9 million and capital that had been called and funded of $43.0 million.

Our investment in SLP I is disclosed on our Consolidated Schedule of Investments as of March 31, 2021 and December 31, 2020.

Below is a summary of SLP I's portfolio, along with a listing of the individual investments in SLP I's portfolio as of March 31, 2021 and December 31, 2020:

March 31, 2021 December 31, 2020

Our investment in SLP I is disclosed on our Consolidated Schedule of Investments as of December 31, 2020.

Below is a summary of SLP I's portfolio, along with a listing of the individual investments in SLP I's portfolio as of December 31, 2020.

As of May 5, 2021 all investments in the SLP I portfolio are included in the consolidated portfolio of SLP IV.

(in thousands) December 31, 2020

First lien investments (1) $ 127,660

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(2) Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

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The following table is a listing of the individual investments in SLP I's portfolio as of March 31, 2021:

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

Funded Investments - First lien (in thousands) (in thousands) (in thousands)

Access CIG, LLC Business Services 3.87% (L + 3.75%) 2/27/2025 $ 3,669 $ 3,692 $ 3,648

Advisor Group Holdings, Inc.

Consumer Services 4.61% (L + 4.50%) 7/31/2026 6,849 6,794 6,852

Affordable Care Holding Corp.

Healthcare Services 5.75% (L + 4.75%) 10/24/2022 6,596 6,565 6,497

ASG Technologies Group, Inc.

Software 4.50% (L + 3.50%) 7/31/2024 651 649 643

Education 5.00% (L + 4.00%) 12/1/2023 5,980 5,965 5,920

Bearcat Buyer, Inc.

Healthcare Services 5.25% (L + 4.25%) 7/9/2026 130 130 130

Bearcat Buyer, Inc.

Healthcare Services 5.25% (L + 4.25%) 7/9/2026 629 627 629

Bracket Intermediate Holding Corp.

Healthcare Services 4.49% (L + 4.25%) 9/5/2025 4,508 4,493 4,502

Certara Holdco, Inc.

Healthcare Information Technology 3.70% (L + 3.50%) 8/15/2024 5,125 5,121 5,125

CHA Holdings, Inc.

Business Services 5.50% (L + 4.50%) 4/10/2025 451 451 421

Software 3.90% (L + 3.75%) 11/29/2024 6,727 6,716 6,574

Dealer Tire, LLC Distribution & Logistics 4.36% (L + 4.25%) 12/12/2025 3,424 3,417 3,434

Drilling Info Holdings, Inc.

Business Services 4.36% (L + 4.25%) 7/30/2025 6,088 6,070 5,996

Emerald 2 Limited Business Services 3.61% (L + 3.50%) 7/10/2026 447 447 445

eResearchTechnology, Inc.

Healthcare Services 5.50% (L + 4.50%) 2/4/2027 1,342 1,331 1,345

Fastlane Parent Company, Inc.

Distribution & Logistics 4.61% (L + 4.50%) 2/4/2026 1,359 1,339 1,359

Greenway Health, LLC Software 4.75% (L + 3.75%) 2/16/2024 6,675 6,660 6,383

Heartland Dental, LLC Healthcare Services 3.61% (L + 3.50%) 4/30/2025 3,600 3,589 3,549

Help/Systems Holdings, Inc.

Software 5.75% (L + 4.75%) 11/19/2026 137 137 138

LSCS Holdings, Inc.

Healthcare Services 4.51% (L + 4.25%) 3/17/2025 1,368 1,364 1,355

LSCS Holdings, Inc.

Healthcare Services 4.51% (L + 4.25%) 3/17/2025 5,301 5,285 5,248

Market Track, LLC Business Services 5.25% (L + 4.25%) 6/5/2024 779 781 779

Medical Solutions Holdings, Inc.

Healthcare Services 5.50% (L + 4.50%) 6/14/2024 2,243 2,240 2,247

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 4,863 4,856 4,850

National Intergovernmental Purchasing Alliance Company Business Services 3.95% (L + 3.75%) 5/23/2025 1,349 1,350 1,346

Pelican Products, Inc.

Business Products 4.50% (L + 3.50%) 5/1/2025 2,248 2,244 2,227

Premise Health Holding Corp.

Healthcare Services 3.70% (L + 3.50%) 7/10/2025 627 624 624

Project Accelerate Parent, LLC Business Services 5.25% (L + 4.25%) 1/2/2025 4,164 4,149 4,015

PSC Industrial Holdings Corp.

Industrial Services 4.75% (L + 3.75%) 10/11/2024 3,896 3,875 3,815

Salient CRGT Inc.

Federal Services 7.50% (L + 6.50%) 2/28/2022 6,731 6,717 6,731

Sierra Enterprises, LLC Food & Beverage 5.00% (L + 4.00%) 11/11/2024 4,249 4,233 4,195

Wirepath LLC Distribution & Logistics 4.20% (L + 4.00%) 8/5/2024 6,762 6,762 6,661

WP CityMD Bidco LLC Healthcare Services 4.50% (L + 3.75%) 8/13/2026 6,133 6,083 6,132

Wrench Group LLC Consumer Services 4.20% (L + 4.00%) 4/30/2026 2,734 2,712 2,734

YI, LLC Healthcare Services 5.00% (L + 4.00%) 11/7/2024 7,778 7,771 7,564

Zelis Cost Management Buyer, Inc.

Healthcare Information Technology 3.62% (L + 3.50%) 9/30/2026 1,754 1,739 1,748

Total Funded Investments $ 127,366 $ 126,978 $ 125,861

(1) All interest is payable in cash unless otherwise indicated.

A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L), the Prime Rate (P) and the alternative base rate (Base).

For each investment, the current interest rate provided reflects the rate in effect as of March 31, 2021.

(2) Represents the fair value in accordance with Accounting Standards Codification Topic 820, Fair Value Measurement and Disclosures ("ASC 820").

Our board of directors does not determine the fair value of the investments held by SLP I.

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The following table is a listing of the individual investments in SLP I's portfolio as of December 31, 2020:

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For each investment, the current interest rate provided reflects the rate in effect as of December 31, 2020.

(2) Represents the fair value in accordance with ASC 820.

(2) Represents the fair value in accordance with Accounting Standards Codification Topic 820, Fair Value Measurement and Disclosures ("ASC 820").

Our board of directors does not determine the fair value of the investments held by SLP I.

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Below is certain summarized financial information for SLP I as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and March 31, 2020:

Below is certain summarized financial information for SLP I as of May 4, 2021 and December 31, 2020 and for the periods from April 1, 2021 through May 4, 2021 and January 1, 2021 through May 4, 2021 and the three and six months ended June 30, 2020:

Selected Balance Sheet Information:

March 31, 2021 December 31, 2020

May 4, 2021 December 31, 2020

(in thousands) (in thousands)

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Total liabilities and members' capital $ 121,921 $ 233,186

Three Months Ended

Three Months Ended Six Months Ended

Selected Statement of Operations Information:

March 31, 2021 March 31, 2020

(in thousands) (in thousands)

May 4, 2021(1) June 30, 2020 May 4, 2021(2) June 30, 2020

(in thousands) (in thousands) (in thousands) (in thousands)

Interest income $ 589 $ 4,387 $ 2,555 $ 9,509

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Net investment income 158 2,704 1,125 5,569

Net realized gains on investments 1 45

Net change in unrealized appreciation (depreciation) of investments 1,465 (39,060)

Net increase (decrease) in members' capital $ 2,433 $ (36,150)

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Pursuant to the Restated SLP I Agreement, the Company is no longer entitled to, and SLP I no longer pays management fees for investment management services provided to SLP I.

For the three months ended March 31, 2021 and March 31, 2020, we earned approximately $0.0 million and $0.3 million, respectively, in management fees related to SLP I, which is included in other income.

As of March 31, 2021 and December 31, 2020, approximately $0.0 million and $0.1 million, respectively, of management fees related to SLP I was included in receivable from affiliates.

For the three months ended March 31, 2021 and March 31, 2020, we earned approximately $0.6 million and $0.7 million, respectively, of dividend income related to SLP I, which is included in dividend income.

As of March 31, 2021 and December 31, 2020, approximately $0.6 million and $0.7 million, respectively, of dividend income related to SLP I was included in interest and dividend receivable.

We have determined that SLP I is an investment company under ASC 946;

however, in accordance with such guidance we will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary.

Furthermore, Accounting Standards Codification Topic 810, Consolidation ("ASC 810"), concludes that in an investment fund where all members have equal decision making authority, it is not appropriate for one member to consolidate since neither has control.

Accordingly, we do not consolidate SLP I.

Net realized (losses) gains on investments — (342) 1 (297)

Net change in unrealized (depreciation) appreciation of investments (163) 22,816 1,302 (16,244)

Net (decrease) increase in members' capital $ (5) $ 25,178 $ 2,428 $ (10,972)

(1) Reflects the results of operations for the period from April 1, 2021 through May 4, 2021.

(2) Reflects the results of operations for the period from January 1, 2021 through May 4, 2021.

Pursuant to the First Amended and Restated Limited Liability Company Agreement effective December 11, 2020 (the “Restated SLP I Agreement”), we are no longer entitled to, and SLP I no longer paid management fees for investment management services provided to SLP I.

For the periods from April 1, 2021 through May 4, 2021 and January 1, 2021 through May 4, 2021, we did not earn management fees related to SLP I.

For the three and six months ended June 30, 2020, we earned approximately $0.2 million and $0.5 million, respectively, in management fees related to SLP I, which is included in other income.

As of May 4, 2021 and December 31, 2020, approximately $0.0 million and $0.1 million, respectively, of management fees related to SLP I was included in receivable from affiliates.

For the periods from April 1, 2021 through May 4, 2021 and January 1, 2021 through May 4, 2021, we earned approximately $0.1 million and $0.7 million, respectively, of dividend income related to SLP I, which is included in dividend income.

For the three and six months ended June 30, 2020, we earned approximately $0.7 million and $1.4 million, respectively, of dividend income related to SLP I, which is included in dividend income.

As of May 4, 2021 and December 31, 2020, approximately $0.1 million and $0.7 million, respectively, of dividend income related to SLP I was included in interest and dividend receivable.

NMFC Senior Loan Program II LLC

NMFC Senior Loan Program II LLC ("SLP II") was formed as a Delaware limited liability company on March 9, 2016 and commenced operations on April 12, 2016.

SLP II is structured as a private joint venture investment fund between us and SkyKnight Income, LLC (“SkyKnight”) and operates under a limited liability company agreement (the "SLP II Agreement").

The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals.

These investments are typically broadly syndicated first lien loans.

All investment decisions must be unanimously approved by the board of managers of SLP II, which has equal representation from us and SkyKnight.

SLP II's investment period ended on April 12, 2020 and SLP II will continue in existence until April 12, 2022.

The term may be extended for up to one year pursuant to certain terms of the SLP II Agreement.

SLP II is capitalized with equity contributions which were called from its members, on a pro-rata basis based on their equity commitments, as transactions are completed.

Any decision by SLP II to call down on capital commitments requires approval by the board of managers of SLP II.

As of March 31, 2021, we and SkyKnight have committed and contributed $79.4 million and $20.6 million, respectively, of equity to SLP II.

Our investment in SLP II is disclosed on our Consolidated Schedule of Investments as of March 31, 2021 and December 31, 2020.

On April 12, 2016, SLP II entered into its revolving credit facility with Wells Fargo Bank, National Association, which matures on April 12, 2022 and bears interest at a rate of the LIBOR plus 1.60% per annum.

As of March 31, 2021 and December 31, 2020, SLP II had total investments with an aggregate fair value of approximately $250.9 million and $271.1 million, respectively, and debt outstanding under its credit facility of $160.7 million and $184.0 million, respectively.

As of March 31, 2021 and December 31, 2020, none of SLP II's investments were on non-accrual.

Below is a summary of SLP II's portfolio, along with a listing of the individual investments in SLP II's portfolio as of March 31, 2021 and December 31, 2020:

(in thousands) March 31, 2021 December 31, 2020

SLP II was structured as a private joint venture investment fund between us and SkyKnight Income, LLC (“SkyKnight”) and operated under a limited liability company agreement (the "SLP II Agreement").

The purpose of the joint venture was to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals.

These investments were typically broadly syndicated first lien loans.

All investment decisions had to be unanimously approved by the board of managers of SLP II, which had equal representation from us and SkyKnight.

Effective May 5, 2021, us and SkyKnight entered into a Contribution Agreement in which 100% of both of our membership interests in SLP II were transferred and contributed to SLP IV.

Effective May 5, 2021, SLP II entered into Amendment 1 to the Limited Liability Company Agreement (the “Amended SLP II Agreement”), which admitted SLP IV as the sole member of SLP II.

As of May 5, 2021, SLP II is a wholly-owned subsidiary of SLP IV.

As of May 4, 2021 and December 31, 2020, SLP II had total investments with an aggregate fair value of approximately $250.3 million and $271.1 million, respectively, and debt outstanding under its credit facility of $158.5 million and $184.0 million, respectively.

As of May 4, 2021 and December 31, 2020, none of SLP II's investments were on non-accrual.

Below is a summary of SLP II's portfolio, along with a listing of the individual investments in SLP II's portfolio as of December 31, 2020.

As of May 5, 2021, all investments in the SLP II portfolio are included in the consolidated portfolio of SLP IV.

(in thousands) December 31, 2020

First lien investments (1) $ 279,678

5 unchanged sentences

(2) Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

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The following table is a listing of the individual investments in SLP II's portfolio as of March 31, 2021:

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

Funded Investments - First lien:

(in thousands) (in thousands) (in thousands)

Access CIG, LLC Business Services 3.87% (L + 3.75%) 2/27/2025 $ 4,601 $ 4,587 $ 4,575

ADG, LLC Healthcare Services 6.25 % (L + 4.75% + 0.50% PIK) 9/28/2023 16,501 16,436 15,939

Advisor Group Holdings, Inc.

Consumer Services 4.61% (L + 4.50%) 7/31/2026 4,938 4,898 4,940

Bearcat Buyer, Inc.

Healthcare Services 5.25% (L + 4.25%) 7/9/2026 282 281 282

Bearcat Buyer, Inc.

Healthcare Services 5.25% (L + 4.25%) 7/9/2026 1,361 1,356 1,361

Bleriot US Bidco Inc.

Federal Services 4.20% (L + 4.00%) 10/30/2026 9,900 9,817 9,888

Brave Parent Holdings, Inc.

Software 4.11% (L + 4.00%) 4/18/2025 3,643 3,634 3,646

CentralSquare Technologies, LLC Software 3.95% (L + 3.75%) 8/29/2025 14,663 14,638 14,069

CHA Holdings, Inc.

Business Services 5.50% (L + 4.50%) 4/10/2025 2,021 2,014 1,890

CHA Holdings, Inc.

Business Services 5.50% (L + 4.50%) 4/10/2025 10,561 10,531 9,874

Dealer Tire, LLC Distribution & Logistics 4.36% (L + 4.25%) 12/12/2025 7,406 7,391 7,428

Drilling Info Holdings, Inc.

Business Services 4.36% (L + 4.25%) 7/30/2025 14,571 14,528 14,352

Edgewood Partners Holdings LLC (EPIC) Business Services 5.25% (L + 4.25%) 9/6/2024 7,337 7,289 7,264

eResearchTechnology, Inc.

Healthcare Services 5.50% (L + 4.50%) 2/4/2027 3,121 3,094 3,128

Fastlane Parent Company, Inc.

Distribution & Logistics 4.61% (L + 4.50%) 2/4/2026 3,430 3,380 3,428

Greenway Health, LLC Software 4.75% (L + 3.75%) 2/16/2024 14,438 14,404 13,806

Help/Systems Holdings, Inc.

Software 5.75% (L + 4.75%) 11/19/2026 4,400 4,363 4,432

Keystone Acquisition Corp.

Healthcare Services 6.25% (L + 5.25%) 5/1/2024 5,211 5,185 5,028

LSCS Holdings, Inc.

Healthcare Services 4.51% (L + 4.25%) 3/17/2025 1,860 1,859 1,842

LSCS Holdings, Inc.

Healthcare Services 4.51% (L + 4.25%) 3/17/2025 7,206 7,201 7,134

Market Track, LLC Business Services 5.25% (L + 4.25%) 6/5/2024 11,550 11,521 11,550

Medical Solutions Holdings, Inc.

Healthcare Services 5.50% (L + 4.50%) 6/14/2024 2,760 2,753 2,765

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 2,068 2,064 2,062

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 869 867 866

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 12,003 11,983 11,969

Premise Health Holding Corp.

Healthcare Services 3.70% (L + 3.50%) 7/10/2025 1,355 1,350 1,346

Project Accelerate Parent, LLC Business Services 5.25% (L + 4.25%) 1/2/2025 12,386 12,349 11,942

PSC Industrial Holdings Corp.

Industrial Services 4.75% (L + 3.75%) 10/11/2024 3,021 3,004 2,958

Quest Software US Holdings Inc.

Software 4.46% (L + 4.25%) 5/16/2025 14,663 14,616 14,678

Salient CRGT Inc.

Federal Services 7.50% (L + 6.50%) 2/28/2022 12,478 12,451 12,478

Wirepath LLC Distribution & Logistics 4.20% (L + 4.00%) 8/5/2024 14,625 14,625 14,406

WP CityMD Bidco LLC Healthcare Services 4.50% (L + 3.75%) 8/13/2026 5,404 5,361 5,404

Wrench Group LLC Consumer Services 4.20% (L + 4.00%) 4/30/2026 5,913 5,866 5,913

YI, LLC Healthcare Services 5.00% (L + 4.00%) 11/7/2024 14,611 14,604 14,209

Zelis Cost Management Buyer, Inc.

Healthcare Information Technology 3.62% (L + 3.50%) 9/30/2026 4,078 4,044 4,065

Total Funded Investments $ 255,235 $ 254,344 $ 250,917

(1) All interest is payable in cash unless otherwise indicated.

A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L), the Prime Rate (P) and the alternative base rate (Base).

For each investment, the current interest rate provided reflects the rate in effect as of March 31, 2021.

(2) Represents the fair value in accordance with ASC 820.

Our board of directors does not determine the fair value of the investments held by SLP II.

Table o f Contents

The following table is a listing of the individual investments in SLP II's portfolio as of December 31, 2020:

68 unchanged sentences

Our board of directors does not determine the fair value of the investments held by SLP II.

Table o f Contents

Below is certain summarized financial information for SLP II as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and March 31, 2020:

Below is certain summarized financial information for SLP II as of May 4, 2021 and December 31, 2020 and for the periods from April 1, 2021 through May 4, 2021 and January 1, 2021 through May 4, 2021 and the three and six months ended June 30, 2020:

Selected Balance Sheet Information:

March 31, 2021 December 31, 2020

May 4, 2021 December 31, 2020

(in thousands) (in thousands)

9 unchanged sentences

Total liabilities and members' capital $ 255,981 $ 279,908

Three Months Ended

Three Months Ended Six Months Ended

Selected Statement of Operations Information:

March 31, 2021 March 31, 2020

(in thousands) (in thousands)

May 4, 2021(1) June 30, 2020 May 4, 2021(2) June 30, 2020

(in thousands) (in thousands) (in thousands) (in thousands)

Interest income $ 1,210 $ 4,532 $ 4,744 $ 9,979

4 unchanged sentences

Total expenses 621 1,491 1,708 3,768

expenses waived and reimbursed — — — —

Net expenses 621 1,491 1,708 3,768

Net investment income 589 3,058 3,036 6,281

Net realized gains on investments 2 56

Net change in unrealized appreciation (depreciation) of investments 4,019 (34,801)

Net realized gains (losses) on investments 1 (862) 3 (806)

Net change in unrealized (depreciation) appreciation of investments (422) 21,752 3,597 (13,049)

Net increase (decrease) in members' capital $ 168 $ 23,948 $ 6,636 $ (7,574)

For the three months ended March 31, 2021 and March 31, 2020, we earned approximately $2.0 million and $2.6 million, respectively, of dividend income related to SLP II, which is included in dividend income.

As of March 31, 2021 and December 31, 2020, approximately $2.0 million and $2.0 million, respectively, of dividend income related to SLP II was included in interest and dividend receivable.

We have determined that SLP II is an investment company under ASC 946;

however, in accordance with such guidance we will generally not consolidate our investment in a company other than a wholly-owned investment company subsidiary.

Furthermore, ASC 810, concludes that in a joint venture where both members have equal decision making authority, it is not appropriate for one member to consolidate the joint venture since neither has control.

Accordingly, we do not consolidate SLP II.

(1) Reflects the results of operations for the period from April 1, 2021 through May 4, 2021.

(2) Reflects the results of operations for the period from January 1, 2021 through May 4, 2021.

For the period from April 1, 2021 through May 4, 2021 and January 1, 2021 through May 4, 2021, we earned approximately $0.4 million and $2.4 million, respectively, of dividend income related to SLP II, which is included in dividend income.

For the three and six months ended June 30, 2020, we earned approximately $2.1 million and $4.7 million, respectively, of dividend income related to SLP II, which is included in dividend income.

As of May 4, 2021 and December 31, 2020, approximately $0.4 million and $2.0 million, respectively, of dividend income related to SLP II was included in interest and dividend receivable.

NMFC Senior Loan Program III LLC

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The investment period may be extended for up to one year pursuant to certain terms of the SLP III Agreement.

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SLP III is capitalized with equity contributions which are called from its members, on a pro-rata basis based on their equity commitments, as transactions are completed.

Any decision by SLP III to call down on capital commitments requires approval by the board of managers of SLP III.

As of March 31, 2021, we and SkyKnight II have committed $140.0 million and $35.0 million, respectively, of equity to SLP III.

As of March 31, 2021, we and SkyKnight II have contributed $130.0 million and $32.5 million, respectively, of equity to SLP III.

Our investment in SLP III is disclosed on our Consolidated Schedule of Investments as of March 31, 2021 and December 31, 2020.

As of June 30, 2021, we and SkyKnight II have committed $140.0 million and $35.0 million, respectively, of equity to SLP III.

As of June 30, 2021, we and SkyKnight II have contributed $140.0 million and $35.0 million, respectively, of equity to SLP III.

Our investment in SLP III is disclosed on our Consolidated Schedule of Investments as of June 30, 2021 and December 31, 2020.

On May 2, 2018, SLP III entered into its revolving credit facility with Citibank, N.A., which matures on May 2, 2023 and bears interest at a rate of LIBOR plus 1.70% per annum.

Effective February 13, 2020, SLP III's revolving credit facility has a maximum borrowing capacity of $525.0 million.

As of March 31, 2021 and December 31, 2020, SLP III had total investments with an aggregate fair value of approximately $666.6 million and $610.0 million, respectively, and debt outstanding under its credit facility of $474.2 million and $424.2 million, respectively.

As of March 31, 2021 and December 31, 2020, none of SLP III's investments were on non-accrual.

Additionally, as of March 31, 2021 and December 31, 2020, SLP III had unfunded commitments in the form of delayed draws of $15.1 million and $7.8 million, respectively.

Below is a summary of SLP III's portfolio, along with a listing of the individual investments in SLP III's portfolio as of March 31, 2021 and December 31, 2020:

(in thousands) March 31, 2021 December 31, 2020

As of June 30, 2021 and December 31, 2020, SLP III had total investments with an aggregate fair value of approximately $680.9 million and $610.0 million, respectively, and debt outstanding under its credit facility of $518.2 million and $424.2 million, respectively.

As of June 30, 2021 and December 31, 2020, none of SLP III's investments were on non-accrual.

Additionally, as of June 30, 2021 and December 31, 2020, SLP III had unfunded commitments in the form of delayed draws of $11.0 million and $7.8 million, respectively.

Below is a summary of SLP III's portfolio, along with a listing of the individual investments in SLP III's portfolio as of June 30, 2021 and December 31, 2020:

(in thousands) June 30, 2021 December 31, 2020

First lien investments (1) $ 695,451 $ 626,985

5 unchanged sentences

(2) Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

Table o f Contents

The following table is a listing of the individual investments in SLP III's portfolio as of March 31, 2021:

The following table is a listing of the individual investments in SLP III's portfolio as of June 30, 2021:

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

1 unchanged sentence

Access CIG, LLC Business Services 3.84% (L + 3.75%) 2/27/2025 $ 863 $ 863 $ 859

(aka Aspen Dental) Healthcare Services 4.25% (L + 3.75%) 12/23/2027 2,431 2,418 2,430

Advisor Group Holdings, Inc.

Consumer Services 4.60% (L + 4.50%) 7/31/2026 9,850 9,812 9,884

Affordable Care Holding Corp.

Healthcare Services 5.75% (L + 4.75%) 10/24/2022 5,885 5,841 5,797

AG Parent Holdings, LLC Healthcare Services 5.10% (L + 5.00%) 7/31/2026 12,313 12,265 12,266

Ascensus Specialties LLC Specialty Chemicals & Materials 4.87% (L + 4.75%) 9/24/2026 9,875 9,835 9,986

Artera Services, LLC Distribution & Logistics 4.50% (L + 3.50%) 3/6/2025 6,942 6,890 6,920

Aston FinCo S.a.r.l.

8 unchanged sentences

Healthcare Services 5.25% (L + 4.25%) 7/9/2026 4,054 4,036 4,054

Bella Holding Company, LLC Healthcare Services 4.50% (L + 3.75%) 5/10/2028 4,039 4,000 4,046

Bleriot US Bidco Inc.

9 unchanged sentences

CentralSquare Technologies, LLC Software 3.90% (L + 3.75%) 8/29/2025 14,625 14,602 13,726

Certara Holdco, Inc.

Healthcare Information Technology 3.70% (L + 3.50%) 8/15/2024 1,242 1,245 1,242

CHA Holdings, Inc.

2 unchanged sentences

Software 4.75% (L + 4.00%) 12/29/2027 5,804 5,777 5,826

Community Brands ParentCo, LLC (f.k.a Ministry Brands, LLC) Software 5.00% (L + 4.00%) 12/2/2022 3,000 2,975 3,000

Community Brands ParentCo, LLC (f.k.a Ministry Brands, LLC) Software 5.00% (L + 4.00%) 12/2/2022 4,478 4,471 4,478

Community Brands ParentCo, LLC (f.k.a Ministry Brands, LLC) Software 5.00% (L + 4.00%) 12/2/2022 867 865 867

Confluent Health, LLC Healthcare Services 5.10% (L + 5.00%) 6/24/2026 4,376 4,332 4,414

CoolSys, Inc.

Industrial Services 7.00% (L + 6.00%) 11/20/2026 5,000 4,975 4,988

Covenant Surgical Partners, Inc.

Healthcare Services 4.08% (L + 4.00%) 7/1/2026 9,826 9,753 9,765

Covenant Surgical Partners, Inc.

Healthcare Services 4.10% (L + 4.00%) 7/1/2026 2,000 1,980 1,988

CRCI Longhorn Holdings, Inc.

1 unchanged sentence

Dealer Tire, LLC Distribution & Logistics 4.35% (L + 4.25%) 12/12/2025 9,850 9,831 9,871

Dentalcorp Health Services ULC (fka Dentalcorp Perfect Smile ULC) Healthcare Services 4.75% (L + 3.75%) 6/6/2025 16,842 16,797 16,737

DG Investment Intermediate Holdings 2, Inc.

5 unchanged sentences

Business Services 4.35% (L + 4.25%) 7/30/2025 18,481 18,423 18,066

EAB Global, Inc.

Education 4.00% (L + 3.50%) 6/28/2028 4,250 4,229 4,234

Edgewood Partners Holdings LLC Business Services 5.25% (L + 4.25%) 9/6/2024 9,812 9,754 9,763

3 unchanged sentences

Frontline Technologies Intermediate Holdings, LLC Software 6.75% (L + 5.75%) 9/18/2023 6,481 6,481 6,481

Greenway Health, LLC Software 4.75% (L + 3.75%) 2/16/2024 14,482 14,488 13,849

Frontline Technologies Intermediate Holdings, LLC Software 6.75% (L + 5.75%) 9/18/2023 2,023 2,023 2,023

Greenway Health, LLC Healthcare I.T.

4.75% (L + 3.75%) 2/16/2024 14,445 14,450 13,686

Heartland Dental, LLC Healthcare Services 3.60% (L + 3.50%) 4/30/2025 18,445 18,390 18,262

3 unchanged sentences

Financial Services 6.50% (L + 5.75%) 11/25/2026 7,169 7,120 7,313

HighTower Holding, LLC Business Services 4.75% (L + 4.00%) 4/21/2028 3,862 3,824 3,876

Software 4.50% (L + 3.75%) 3/2/2028 16,044 16,030 16,062

IG Investments Holdings, LLC (aka Insight Global) Business Services 4.75% (L + 3.75%) 5/23/2025 7,232 7,196 7,255

Kestra Advisor Services Holdings A, Inc.

6 unchanged sentences

Healthcare Services 4.42% (L + 4.25%) 3/17/2025 675 671 668

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

Maravai Intermediate Holdings, LLC Specialty Chemicals & Materials 4.75% (L + 3.75%) 10/19/2027 $ 2,956 $ 2,930 $ 2,969

Market Track, LLC Business Services 5.25% (L + 4.25%) 6/5/2024 6,129 6,062 6,129

MED ParentCo, LP Healthcare Services 4.36% (L + 4.25%) 8/31/2026 10,246 10,169 10,172

Market Track, LLC Business Services 6.50% (P + 3.25%) 6/5/2024 6,114 6,052 6,114

Maverick Bidco Inc.

Software 4.50% (L + 3.75%) 5/18/2028 4,000 3,980 4,007

Mavis Tire Express Services Topco Corp.

Retail 4.75% (L + 4.00%) 5/4/2028 4,237 4,217 4,258

MED ParentCo, LP Healthcare Services 4.35% (L + 4.25%) 8/31/2026 12,783 12,689 12,813

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 4,490 4,481 4,478

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 869 867 866

National Intergovernmental Purchasing Alliance Company Business Services 3.65% (L + 3.50%) 5/23/2025 8,540 8,537 8,500

1 unchanged sentence

Software 3.36% (L + 3.25%) 9/5/2025 18,115 17,998 17,982

Table o f Contents

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

Newport Group Holdings II, Inc.

Business Services 3.65% (L + 3.50%) 9/12/2025 4,863 4,847 4,840

Orion Advisor Solutions, Inc.

Business Services 4.50% (L + 3.75%) 9/24/2027 5,237 5,188 5,234

Outcomes Group Holdings, Inc.

23 unchanged sentences

(fka SSH Group Holdings, Inc.) Education 4.40% (L + 4.25%) 7/30/2025 12,120 12,101 11,711

Storable, Inc Software 3.75% (L + 3.25%) 2/26/2028 3,862 3,852 3,833

Storable, Inc.

Software 3.75% (L + 3.25%) 4/17/2028 3,862 3,853 3,852

Symplr Software, Inc.(fka Caliper Software, Inc.) Healthcare I.T.

1 unchanged sentence

Syndigo LLC Software 5.25% (L + 4.50%) 12/15/2027 14,963 14,857 14,850

Therapy Brands Holdings LLC Healthcare I.T.

4.75% (L + 4.00%) 5/18/2028 3,408 3,392 3,408

TIBCO Software Inc.

10 unchanged sentences

Unfunded Investments - First lien

Cano Health, LLC Healthcare Services — 11/23/2021 $ 2,300 $ (23) $ 2

Covenant Surgical Partners, Inc.

Healthcare Services — 7/1/2021 2,000 (20) (43)

DG Investment Intermediate Holdings 2, Inc.

2 unchanged sentences

Financial Services — 11/25/2022 2,023 (15) 40

Peraton Corp.

Federal Services — 2/1/2028 7,971 (40) 3

HighTower Holding, LLC Business Services — 4/21/2022 976 — 3

Therapy Brands Holdings LLC Healthcare I.T.

— 5/18/2023 735 — —

VetCor Professional Practices LLC Consumer Services — 5/20/2023 7,000 (70) (67)

Total Unfunded Investments $ 11,046 $ (85) $ (23)

2 unchanged sentences

A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L), the Prime Rate (P) and the alternative base rate (Base).

For each investment, the current interest rate provided reflects the rate in effect as of March 31, 2021.

For each investment, the current interest rate provided reflects the rate in effect as of June 30, 2021.

(2) Represents the fair value in accordance with ASC 820.

Our board of directors does not determine the fair value of the investments held by SLP III.

Table o f Contents

The following table is a listing of the individual investments in SLP III's portfolio as of December 31, 2020:

79 unchanged sentences

National Intergovernmental Purchasing Alliance Company Business Services 4.00% (L + 3.75%) 5/23/2025 8,701 8,698 8,658

Table o f Contents

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

58 unchanged sentences

Our board of directors does not determine the fair value of the investments held by SLP III.

Table o f Contents

Below is certain summarized financial information for SLP III as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and March 31, 2020:

Below is certain summarized financial information for SLP III as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and June 30, 2020:

Selected Balance Sheet Information:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in thousands) (in thousands)

11 unchanged sentences

Total liabilities and members' capital $ 736,305 $ 620,137

Three Months Ended

Three Months Ended Six Months Ended

Selected Statement of Operations Information:

March 31, 2021 March 31, 2020

(in thousands) (in thousands)

June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

(in thousands) (in thousands) (in thousands) (in thousands)

Interest income $ 7,826 $ 6,929 $ 15,197 $ 14,336

4 unchanged sentences

Total expenses 2,888 3,545 5,643 7,398

expenses waived and reimbursed — — — —

Net expenses 2,888 3,545 5,643 7,398

Net investment income 5,141 3,448 9,860 7,183

Net realized gains (losses) on investments 212 (2)

Net realized gains on investments 359 6 571 4

Net change in unrealized appreciation (depreciation) of investments 743 38,194 5,552 (25,154)

Net increase (decrease) in members' capital $ 6,243 $ 41,648 $ 15,983 $ (17,967)

For the three months ended March 31, 2021 and March 31, 2020, we earned approximately $4.5 million and $2.9 million of dividend income related to SLP III, which is included in dividend income.

As of March 31, 2021 and December 31, 2020, approximately $4.5 million and $3.0 million, respectively, of dividend income related to SLP III was included in interest and dividend receivable.

For the three and six months ended June 30, 2021, we earned approximately $4.5 million and $9.0 million, respectively, of dividend income related to SLP III, which is included in dividend income.

For the three and six months ended June 30, 2020, we earned approximately $2.7 million and $5.6 million, respectively, of dividend income related to SLP III, which is included in dividend income.

As of June 30, 2021 and December 31, 2020, approximately $4.5 million and $3.0 million, respectively, of dividend income related to SLP III was included in interest and dividend receivable.

We have determined that SLP III is an investment company under ASC 946;

2 unchanged sentences

Accordingly, we do not consolidate SLP III.

NMFC Senior Loan Program IV LLC

SLP IV was formed as a Delaware limited liability company on April 6, 2021, and commenced operations on May 5, 2021.

SLP IV is structured as a private joint venture investment fund between us and SkyKnight Alpha and operates under the First Amended and Restated Limited Liability Company Agreement of NMFC Senior Loan Program IV LLC (the "SLP IV Agreement").

Upon the effectiveness of the SLP IV Agreement dated May 5, 2021, the members contributed their respective membership interests in SLP I and SLP II to SLP IV.

Immediately following the contribution of their membership interests, SLP I and SLP II became wholly-owned subsidiaries of SLP IV.

The purpose of the joint venture is to invest primarily in senior secured loans issued by portfolio companies within our core industry verticals.

These investments are typically broadly syndicated first lien loans.

All investment decisions must be unanimously approved by the board of managers of SLP IV, which has equal representation from us and SkyKnight Alpha.

SLP IV has a five year investment period and will continue in existence until May 5, 2026.

The investment period may be extended for up to one year pursuant to certain terms of the SLP IV Agreement.

SLP IV is capitalized with equity contributions which were transferred and contributed from its members.

As of June 30, 2021, we and SkyKnight Alpha have transferred and contributed $112.4 million and $30.6 million, respectively, of their membership interests in SLP I and SLP II to SLP IV.

Our investment in SLP IV is disclosed on our Consolidated Schedule of Investments as of June 30, 2021.

As of June 30, 2021, SLP IV had total investments with an aggregate fair value of approximately $477.3 million and debt outstanding under its credit facility of $310.1 million.

As of June 30, 2021, none of SLP IV’s investments were on non-accrual.

Additionally, as of June 30, 2021, SLP IV had unfunded commitments in the form of delayed draws of $11.5 million.

Below is a summary of SLP IV's consolidated portfolio, along with a listing of the individual investments in SLP IV's consolidated portfolio as of June 30, 2021:

(in thousands) June 30, 2021

First lien investments (1) $ 493,512

Weighted average interest rate on first lien investments (2) 4.82 %

Number of portfolio companies in SLP IV 57

Largest portfolio company investment (1) $ 22,331

Total of five largest portfolio company investments (1) $ 105,078

(1) Reflects principal amount or par value of investment.

(2) Computed as the all in interest rate in effect on accruing investments divided by the total principal amount of investments.

The following table is a listing of the individual investments in SLP IV's consolidated portfolio as of June 30, 2021:

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

Funded Investments - First lien (in thousands) (in thousands) (in thousands)

Access CIG, LLC Business Services 3.84% (L + 3.75%) 2/27/2025 $ 8,249 $ 8,260 $ 8,209

ADG, LLC Healthcare Services 6.25% (L + 4.75% + 0.50% PIK) 9/28/2023 16,522 16,463 16,522

(aka Aspen Dental) Healthcare Services 4.25% (L + 3.75%) 12/23/2027 1,875 1,866 1,875

Advisor Group Holdings, Inc.

Consumer Services 4.60% (L + 4.50%) 7/31/2026 11,757 11,666 11,797

AqGen Island Holdings, Inc Financial Services 4.00% (L + 3.50%) 5/19/2028 6,250 6,219 6,254

Artera Services, LLC Distribution & Logistics 4.50% (L + 3.50%) 3/6/2025 5,355 5,315 5,339

Bayou Intermediate II, LLC Healthcare Products 5.25% (L + 4.50%) 5/13/2028 8,693 8,650 8,737

Bearcat Buyer, Inc.

Healthcare Services 5.25% (L + 4.25%) 7/9/2026 1,986 1,978 1,986

Bearcat Buyer, Inc.

Healthcare Services 5.25% (L + 4.25%) 7/9/2026 412 410 412

Bella Holding Company, LLC Healthcare Services 4.50% (L + 3.75%) 5/10/2028 3,000 2,989 3,005

Bleriot US Bidco Inc.

Federal Services 4.15% (L + 4.00%) 10/30/2026 3,890 3,871 3,896

Bracket Intermediate Holding Corp.

Healthcare Services 4.44% (L + 4.25%) 9/5/2025 4,497 4,482 4,498

Brave Parent Holdings, Inc.

Software 4.10% (L + 4.00%) 4/18/2025 3,633 3,625 3,634

Cano Health, LLC Healthcare Services 5.25% (L + 4.50%) 11/23/2027 2,820 2,813 2,829

CentralSquare Technologies, LLC Software 3.90% (L + 3.75%) 8/29/2025 14,625 14,602 13,726

Certara Holdco, Inc.

Healthcare Information Technology 3.60% (L + 3.50%) 8/15/2026 3,959 3,950 3,969

CHA Holdings, Inc.

Business Services 5.50% (L + 4.50%) 4/10/2025 10,984 10,955 10,434

CHA Holdings, Inc.

Business Services 5.50% (L + 4.50%) 4/10/2025 2,016 2,009 1,915

Software 3.85% (L + 3.75%) 11/29/2024 6,710 6,699 6,635

Dealer Tire, LLC Distribution & Logistics 4.35% (L + 4.25%) 12/12/2025 10,803 10,782 10,826

Drilling Info Holdings, Inc.

Business Services 4.35% (L + 4.25%) 7/30/2025 20,606 20,548 20,142

EAB Global, Inc.

Education 4.00% (L + 3.50%) 6/28/2028 10,000 9,950 9,963

Edgewood Partners Holdings LLC (EPIC) Business Services 5.25% (L + 4.25%) 9/6/2024 9,812 9,754 9,763

Emerald 2 Limited Business Services 3.65% (L + 3.50%) 7/10/2026 446 445 446

eResearchTechnology, Inc.

Healthcare Services 5.50% (L + 4.50%) 2/4/2027 4,452 4,415 4,478

Greenway Health, LLC Healthcare Information Technology 4.75% (L + 3.75%) 2/16/2024 21,058 21,014 19,953

Heartland Dental, LLC Healthcare Services 3.60% (L + 3.50%) 4/30/2025 3,591 3,580 3,555

Heartland Dental, LLC Healthcare Services 4.07% (L + 4.00%) 4/30/2025 6,300 6,269 6,295

Help/Systems Holdings, Inc.

Software 4.75% (L + 4.00%) 11/19/2026 9,969 9,934 10,013

Software 4.50% (L + 3.75%) 3/2/2028 9,365 9,286 9,376

IG Investments Holdings, LLC (aka Insight Global) Business Services 4.75% (L + 3.75%) 5/23/2025 9,975 9,926 10,007

Keystone Acquisition Corp.

Healthcare Services 6.25% (L + 5.25%) 5/1/2024 5,198 5,173 5,132

LSCS Holdings, Inc.

Healthcare Services 4.42% (L + 4.25%) 3/17/2025 12,476 12,455 12,351

LSCS Holdings, Inc.

Healthcare Services 4.42% (L + 4.25%) 3/17/2025 3,220 3,215 3,188

Market Track, LLC Business Services 6.50% (P + 3.25%) 6/5/2024 12,297 12,272 12,297

Maverick Bidco Inc.

Software 4.50% (L + 3.75%) 5/18/2028 8,000 7,961 8,014

Mavis Tire Express Services Topco Corp.

Retail 4.75% (L + 4.00%) 5/4/2028 8,475 8,433 8,516

Medical Solutions Holdings, Inc.

Healthcare Services 5.50% (L + 4.50%) 6/14/2024 4,990 4,981 5,011

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 16,822 16,798 16,822

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 2,062 2,059 2,062

Ministry Brands, LLC Software 5.00% (L + 4.00%) 12/2/2022 867 865 867

National Intergovernmental Purchasing Alliance Company Business Services 3.65% (L + 3.50%) 5/23/2025 1,327 1,329 1,321

Pelican Products, Inc.

Business Products 4.50% (L + 3.50%) 5/1/2025 2,242 2,239 2,228

Premise Health Holding Corp.

Healthcare Services 3.65% (L + 3.50%) 7/10/2025 1,976 1,970 1,966

Project Accelerate Parent, LLC Business Services 5.25% (L + 4.25%) 1/2/2025 16,507 16,459 16,290

Project Boost Purchaser, LLC Business Services 4.25% (L + 3.75%) 5/30/2026 2,500 2,494 2,500

PSC Industrial Holdings Corp.

Industrial Services 4.75% (L + 3.75%) 10/11/2024 6,899 6,864 6,850

Quest Software US Holdings Inc.

Software 4.44% (L + 4.25%) 5/16/2025 14,625 14,581 14,628

RealPage, Inc.

Business Services 3.75% (L + 3.25%) 4/24/2028 5,000 4,981 4,992

Salient CRGT Inc.

Federal Services 7.50% (L + 6.50%) 2/28/2022 18,920 18,891 18,778

Sierra Enterprises, LLC Food & Beverage 5.00% (L + 4.00%) 11/11/2024 4,238 4,223 4,174

Portfolio Company and Type of Investment Industry Interest Rate (1) Maturity Date Principal Amount or Par Value Cost Fair

Sovos Brands Intermediate, Inc.

Food & Beverage 5.00% (L + 4.25%) 6/8/2028 $ 10,000 $ 9,975 $ 10,037

Storable, Inc.

Software 3.75% (L + 3.25%) 4/17/2028 4,000 3,975 3,990

Syndigo LLC Software 5.25% (L + 4.50%) 12/15/2027 7,878 7,873 7,819

Therapy Brands Holdings LLC Healthcare Information Technology 4.75% (L + 4.00%) 5/18/2028 4,621 4,598 4,621

TIBCO Software Inc.

Software 3.86% (L + 3.75%) 6/30/2026 2,993 2,974 2,986

Unified Women's Healthcare, LP Healthcare Services 5.00% (L + 4.25%) 12/20/2027 4,500 4,478 4,507

USIC Holdings, Inc.

Consumer Services 4.25% (L + 3.50%) 5/12/2028 3,849 3,833 3,848

Wirepath LLC Distribution & Logistics 4.15% (L + 4.00%) 8/5/2024 21,332 21,332 20,906

WP CityMD Bidco LLC Healthcare Services 4.50% (L + 3.75%) 8/13/2026 9,673 9,602 9,707

Wrench Group LLC Consumer Services 4.15% (L + 4.00%) 4/30/2026 8,614 8,549 8,613

YI, LLC Healthcare Services 5.00% (L + 4.00%) 11/7/2024 22,331 22,318 21,885

Total Funded Investments $ 482,042 $ 480,475 $ 477,395

Unfunded Investments - First lien

Therapy Brands Holdings LLC Healthcare Information Technology — 5/18/2023 $ 1,470 $ — $ —

VetCor Professional Practices LLC Consumer Services — 5/20/2023 10,000 (100) (96)

Total Unfunded Investments $ 11,470 $ (100) $ (96)

Total Investments $ 493,512 $ 480,375 $ 477,299

(1) All interest is payable in cash unless otherwise indicated.

A majority of the variable rate debt investments bear interest at a rate that may be determined by reference to the LIBOR (L), the Prime Rate (P) and the alternative base rate (Base).

For each investment, the current interest rate provided reflects the rate in effect as of June 30, 2021.

(2) Represents the fair value in accordance with ASC 820.

Our board of directors does not determine the fair value of the investments held by SLP IV.

Below is certain summarized consolidated financial information for SLP IV as of June 30, 2021 and for the three and six months ended June 30, 2021:

Selected Consolidated Balance Sheet Information:

June 30, 2021

(in thousands)

Investments at fair value (cost of $480,375) $ 477,299

Receivable from unsettled securities sold 24,991

Cash and other assets 19,039

Total assets $ 521,329

Credit facility $ 310,137

Deferred financing costs (2,912)

Payable for unsettled securities purchased 68,871

Distribution payable 3,933

Other liabilities 1,742

Total liabilities 381,771

Members' capital $ 139,558

Total liabilities and members' capital $ 521,329

Selected Consolidated Statement of Operations Information:

Three Months Ended Six Months Ended

June 30, 2021(1) June 30, 2021(1)

(in thousands) (in thousands)

Interest income $ 3,227 $ 3,227

Other income 14 14

Total investment income 3,241 3,241

Interest and other financing expenses 874 874

Other expenses 269 269

Total expenses 1,143 1,143

Net investment income 2,098 2,098

Net realized gains on investments 224 224

Net change in unrealized appreciation of investments 2,052 2,052

Net increase in members' capital $ 4,374 $ 4,374

(1) Reflects the results of operations for the period from May 5, 2021 through June 30, 2021.

For the period from May 5, 2021 through June 30, 2021, we earned approximately $2.4 million of dividend income related to SLP IV, which is included in dividend income.

As of June 30, 2021, approximately $2.4 million of dividend income related to SLP IV was included in interest and dividend receivable.

We have determined that SLP IV is an investment company under ASC 946;

however, in accordance with such guidance we will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary.

Furthermore, ASC 810 concludes that in a joint venture where both members have equal decision making authority, it is not appropriate for one member to consolidate the joint venture since neither has control.

Accordingly, we do not consolidate SLP IV.

New Mountain Net Lease Corporation

NMNLC was formed to acquire commercial real estate properties that are subject to "triple net" leases.

NMNLC's investments are disclosed on our Consolidated Schedule of Investments as of March 31, 2021.

On March 30, 2020, an affiliate of the Investment Adviser purchased directly from NMNLC 105,030 shares of NMNLC’s common stock at a price of $107.73 per share, which represented the net asset value per share of NMNLC at the

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date of purchase, for an aggregate purchase price of approximately $11.3 million.

NMNLC's investments are disclosed on our Consolidated Schedule of Investments as of June 30, 2021.

Immediately thereafter, NMNLC redeemed 105,030 shares of its common stock held by NMFC in exchange for a promissory note with a principal amount of $11.3 million and a 7.0% interest rate, which was repaid by NMNLC to NMFC on March 31, 2020.

Below is certain summarized property information for NMNLC as of March 31, 2021:

Below is certain summarized property information for NMNLC as of June 30, 2021:

Lease Total Fair Value as of

Portfolio Company Tenant Expiration Date Location Square Feet March 31, 2021

Portfolio Company Tenant Expiration Date Location Square Feet June 30, 2021

(in thousands) (in thousands)

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NM APP US LLC Plasman Corp, LLC / A-Brite LP 9/30/2033 AL / OH 261 8,781

NM DRVT LLC FMH Conveyors, LLC 10/31/2031 AR 195 7,194

NM YI, LLC Young Innovations, Inc.

10/31/2039 IL / MO 212 8,065

NM DRVT LLC FMH Conveyors, LLC 10/31/2031 AR 195 7,349

NM JRA LLC J.R.

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Interest on collateralized agreements is accrued and recognized over the life of the transaction and included in interest income.

As of March 31, 2021 and December 31, 2020, we held one collateralized agreement to resell with a cost basis of $30.0 million and $30.0 million, respectively, and a fair value of $21.4 million and $21.4 million, respectively.

As of June 30, 2021 and December 31, 2020, we held one collateralized agreement to resell with a cost basis of $30.0 million and $30.0 million, respectively, and a fair value of $21.4 million and $21.4 million, respectively.

The collateralized agreement to resell is on non-accrual.

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In August 2017, a trustee (the “Trustee”) for Black Elk informed us that the Trustee intended to assert a fraudulent conveyance claim (the “Claim”) against us and one of its affiliates seeking the return of the $20.5 million repayment.

Black Elk filed a Chapter 11 bankruptcy petition pursuant to the United States Bankruptcy Code in August 2015.

filed a Chapter 11 bankruptcy petition pursuant to the United States Bankruptcy Code in August 2015.

The Trustee alleged that individuals affiliated with the private hedge fund conspired with Black Elk and others to improperly use proceeds from the sale of certain Black Elk assets to repay, in August 2014, the private hedge fund’s obligation to us under the SPP Agreement.

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The private hedge fund is currently in liquidation under the laws of the Cayman Islands.

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On December 22, 2017, we settled the Trustee’s $20.5 million Claim for $16.0 million and filed a claim with the Cayman Islands joint official liquidators of the private hedge fund for $16.0 million that is owed to us under the SPP Agreement.

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During the year ended December 31, 2018, we received a $1.5 million payment from our insurance carrier in respect to the settlement.

As of March 31, 2021 and December 31, 2020, the SPP Agreement has a cost basis of $14.5 million and $14.5 million, respectively, and a fair value of $10.4 million and $10.4 million, respectively, which is reflective of the higher inherent risk in this transaction.

As of June 30, 2021 and December 31, 2020, the SPP Agreement has a cost basis of $14.5 million and $14.5 million, respectively, and a fair value of $10.4 million and $10.4 million, respectively, which is reflective of the higher inherent risk in this transaction.

Revenue Recognition

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The PIK interest and dividends are added to the principal or share balances on the capitalization dates and are generally due at maturity or when redeemed by the issuer.

For the three months ended March 31, 2021 and March 31, 2020, we recognized PIK and non-cash interest from investments of approximately $5.8 million and $3.5 million, respectively, and PIK and non-cash dividends from investments of approximately $5.2 million and $1.6 million, respectively.

For the three and six months ended June 30, 2021, we recognized PIK and non-cash interest from investments of approximately $5.6 million and $11.4 million, respectively, and PIK and non-cash dividends from investments of approximately $5.8 million and $11.0 million, respectively.

For the three and six months ended June 30, 2020, we recognized PIK and non-cash interest from investments of approximately $3.2 million and $6.7 million, respectively, and PIK and non-cash dividends from investments of approximately $3.8 million and $5.4 million, respectively.

Dividend income on common equity is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.

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There is meaningful possibility that we will not recoup our original cost basis in the investment and may realize a substantial loss upon exit.

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The following table shows the distribution of our investments and securities purchased under collateralized agreements to resell on the 1 to 4 investment rating scale at fair value as of March 31, 2021:

(in millions) As of March 31, 2021

(in millions) As of June 30, 2021

Investment Rating Cost Percent Fair Value Percent

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$ 3,079.8 100.0 % $ 3,110.3 100.0 %

As of March 31, 2021, all investments in our portfolio had an Investment Rating of 1 or 2 with the exception of six portfolio companies that had an Investment Rating of 3 and four portfolio companies that had an Investment Rating of 4.

As of June 30, 2021, all investments in our portfolio had an Investment Rating of 1 or 2 with the exception of seven portfolio companies that had an Investment Rating of 3 and four portfolio companies that had an Investment Rating of 4.

During the first quarter of 2020, we placed our investment in our junior preferred shares of UniTek Global Services, Inc.

("UniTek") on non-accrual status and the investment had a rating of 4.

As of March 31, 2021, our junior preferred shares of UniTek had an aggregate cost basis of $34.4 million, an aggregate fair value of $0.0 million and total unearned dividend income of $1.4 million for the three months then ended.

As of June 30, 2021, our junior preferred shares of UniTek had an aggregate cost basis of $34.4 million, an aggregate fair value of $0.0 million and total unearned dividend income of $1.4 million and $2.8 million for the three and six months then ended, respectively.

During the fourth quarter of 2020, we placed an aggregate principal amount of $9.9 million of our investment in our senior preferred shares of UniTek on non-accrual status and the investment had a rating of 4.

As of March 31, 2021, our senior preferred shares of UniTek on non-accrual had an aggregate cost basis of $9.7 million, an aggregate fair value of approximately $4.0 million and total unearned dividend income of approximately $0.5 million for the three months then ended.

As of June 30, 2021, our senior preferred shares of UniTek on non-accrual had an aggregate cost basis of $9.9 million, an aggregate fair value of approximately $2.4 million and total unearned dividend income of approximately $0.4 million and $0.9 million for the three and six months then ended, respectively.

During the first quarter of 2018, we placed our first lien positions in Education Management II LLC on non-accrual status as the portfolio company announced its intention to wind down and liquidate the business.

Our first lien positions and our preferred and common shares in Education Management Corporation ("EDMC") have an investment rating of 4.

As of March 31, 2021, our investment in EDMC, with an Investment Rating of 4 had an aggregate cost basis of $1.4 million, an aggregate fair value of $0.0 million and total unearned interest income of $0.0 million for the three months then ended.

As of June 30, 2021, our investment in EDMC, with an Investment Rating of 4 had an aggregate cost basis of $1.4 million, an aggregate fair value of $0.0 million and total unearned interest income of $0.0 million for the three and six months then ended, respectively.

Since March 31, 2020, our investment in NM KRLN LLC had an investment rating of 4 and had an aggregate cost basis of $9.0 million and an aggregate fair value of $0.6 million.

Since December 31, 2019, our subordinated position in PPVA Black Elk (Equity) LLC had an investment rating of 4.

As of March 31, 2021, our investment in this security had an aggregate cost basis of $14.5 million and an aggregate fair value of approximately $10.4 million.

As of June 30, 2021, our investment in this security had an aggregate cost basis of $14.5 million and an aggregate fair value of approximately $10.4 million.

During the year ended December 31, 2019, our security purchased under collateralized agreements to resell was placed on non-accrual and the investment had an Investment Rating of 4.

As of March 31, 2021, our investment in this security had an aggregate cost basis of $30.0 million and an aggregate fair value of approximately $21.4 million.

As of June 30, 2021, our investment in this security had an aggregate cost basis of $30.0 million and an aggregate fair value of approximately $21.4 million.

In response to the continuing impact of the outbreak of the COVID-19 pandemic and its impact on the overall market environment and the health of our portfolio companies, we performed a company-by-company evaluation of the anticipated impact of the COVID-19 pandemic.

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We will continue to monitor our portfolio companies and provide support to their management teams where possible.

The following table shows the Risk Rating of our portfolio companies as of March 31, 2021:

(in millions) As of March 31, 2021

The following table shows the Risk Rating of our portfolio companies as of June 30, 2021:

(in millions) As of June 30, 2021

Risk Rating Cost Percent Fair Value Percent

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$ 3,079.8 100.0 % $ 3,110.3 100.0 %

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Portfolio and Investment Activity

The fair value of our investments was approximately $3,018.6 million in 102 portfolio companies at March 31, 2021 and approximately $2,953.5 million in 104 portfolio companies at December 31, 2020.

The following table shows our portfolio and investment activity for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

(in millions) March 31, 2021 March 31, 2020

The fair value of our investments was approximately $3,088.9 million in 102 portfolio companies at June 30, 2021 and approximately $2,953.5 million in 104 portfolio companies at December 31, 2020.

The following table shows our portfolio and investment activity for the six months ended June 30, 2021 and June 30, 2020:

Six Months Ended

(in millions) June 30, 2021 June 30, 2020

New investments in 22 and 21 portfolio companies, respectively $ 300.0 $ 229.1

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Recent Accounting Standards for details on recent accounting standards updates.

Results of Operations for the Three Months Ended March 31, 2021 and March 31, 2020

Results of Operations for the Three Months Ended June 30, 2021 and June 30, 2020

Three Months Ended

(in thousands) March 31, 2021 March 31, 2020

(in thousands) June 30, 2021 June 30, 2020

Total interest income $ 47,081 $ 51,363

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Total investment income $ 66,561 $ 65,967

Our total investment income decreased by approximately $6.4 million, or (9)%, for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

For the three months ended March 31, 2021, total investment income of approximately $67.7 million consisted of approximately $38.8 million in cash interest from investments, approximately $5.8 million in PIK and non-cash interest from investments, approximately $0.4 million in prepayment fees, net amortization of purchase premiums and discounts of approximately $2.0 million, approximately $10.5 million in cash dividends from investments, approximately $5.2 million in PIK and non-cash dividends from investments and approximately $5.0 million in other income.

The decrease in interest income of approximately $14.6 million during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020 was primarily due to lower LIBOR rates on smaller invested balances.

Our total investment income increased by approximately $0.6 million, or 1%, for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

For the three months ended June 30, 2021, total investment income of approximately $66.6 million consisted of approximately $39.4 million in cash interest from investments, approximately $5.6 million in PIK and non-cash interest from investments, approximately $0.5 million in prepayment fees, net amortization of purchase premiums and discounts of approximately $1.6 million, approximately $11.1 million in cash dividends from investments, approximately $5.8 million in PIK and non-cash dividends from investments and approximately $2.6 million in other income.

The decrease in interest income of approximately $4.3 million during the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 was primarily due to lower LIBOR rates on smaller invested balances.

Our smaller invested balances were driven by the repayments of our revolving credit facilities due to asset sales and repayments greater than asset originations during 2020.

The increase in dividend income for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020 was primarily due to the reversal of approximately $3.4 million of previously recorded PIK dividends related to our preferred shares in Permian Holdco 1, Inc., which was deemed to no longer be collectible for the three months ended March 31, 2020.

Other income during the three months ended March 31, 2021, which represents fees that are generally non-recurring in nature, was primarily attributable to upfront, consent and amendment fees received from 19 different portfolio companies.

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The increase in dividend income for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 was primarily due to an increase in cash dividends from our investment in SLP III and PIK dividends related to new investments.

Other income during the three months ended June 30, 2021, which represents fees that are generally non-recurring in nature, was primarily attributable to upfront, consent and amendment fees received from 17 different portfolio companies.

Operating Expenses

Three Months Ended

(in thousands) March 31, 2021 March 31, 2020

(in thousands) June 30, 2021 June 30, 2020

Management fee $ 13,725 $ 13,134

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Total expenses 37,349 38,726

Income tax expense 1 —

expenses waived and reimbursed — (335)

Net expenses before income taxes 37,349 38,391

Income tax expense (benefit) 22 (7)

Net expenses after income taxes $ 37,371 $ 38,384

Our total net operating expenses decreased by approximately $4.1 million for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

Our management fee decreased by approximately $0.5 million, net of a management fee waiver, and our incentive fee decreased by approximately $0.6 million for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

The decrease in management and incentive fees was attributable to smaller invested balances, driven by the repayments of our revolving credit facilities due to asset sales and repayments greater than asset originations during 2020.

Interest and other financing expenses decreased by approximately $2.8 million during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020, primarily due to lower LIBOR rates on our floating rate borrowings and lower drawn balances on our revolving credit facilities.

Our total professional fees, administrative expenses and total other general and administrative expenses for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020 remained relatively flat.

Our total net operating expenses decreased by approximately $1.0 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

Our management fee, net of a management fee waiver, remained relatively flat for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 due to the fee waiver agreement (as defined below) in which the Investment Adviser has agreed to waive base management fees in order to reach a target base management fee of 1.25% on gross assets.

Our incentive fee increased by approximately $0.4 million for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 which was attributable to higher net investment income as compared to 2020 due to the reversal of $2.0 million of previously recorded PIK interest related to our subordinated notes in Permian Holdco 3, Inc., which was deemed to no longer be collectible in 2020.

Interest and other financing expenses decreased by approximately $1.4 million during the three months ended June 30, 2021 as compared to the three months ended June 30, 2020, primarily due to lower LIBOR rates on our floating rate borrowings, lower borrowings on our revolving facilities and lower interest expense on our 2021A Unsecured Notes issued in the first quarter as compared to our 2016 Unsecured Notes and 5.75% Unsecured Notes, which were repaid with these proceeds in the first quarter of 2021.

Our total professional fees, administrative expenses and total other general and administrative expenses for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 remained relatively flat.

Net Realized Gains (Losses) and Net Change in Unrealized Appreciation (Depreciation)

Three Months Ended

(in thousands) March 31, 2021 March 31, 2020

Net realized (losses) gains on investments $ (10,496) $ 114

(in thousands) June 30, 2021 June 30, 2020

Net realized gains (losses) on investments $ 180 $ (3,756)

Net change in unrealized appreciation (depreciation) of investments 49,808 53,282

Provision for taxes — (377)

Net realized and unrealized gains $ 49,988 $ 49,149

Our net realized and unrealized gains resulted in a net gain of approximately $50.0 million for the three months ended June 30, 2021 compared to net realized losses and unrealized gains resulting in a net gain of approximately $49.1 million for the same period in 2020.

As movement in unrealized appreciation or depreciation can be the result of realizations, we look at net realized and unrealized gains or losses together.

The net gain for the three months ended June 30, 2021 was primarily driven by unrealized appreciation on our investments in TVG-Edmentum Ultimate Holdings, LLC ("Edmentum"), NM CLFX LP and NM GLCR LP.

The provision for income taxes was attributable to equity investments that are held as of June 30, 2021 in four of our corporate subsidiaries.

The net gain for the three months ended June 30, 2020 was primarily driven by the overall increase in market prices of our investments during the period due to the partial recovery of the market from the impact of the COVID-19 pandemic.

See Monitoring of Portfolio Investments above for more details regarding the continuing impact of the COVID-19 pandemic on the health of our portfolio companies.

Results of Operations for the Six Months Ended June 30, 2021 and June 30, 2020

Six Months Ended

(in thousands) June 30, 2021 June 30, 2020

Total interest income $ 94,090 $ 112,999

Total dividend income 32,625 22,709

Other income 7,554 4,343

Total investment income $ 134,269 $ 140,051

Our total investment income decreased by approximately $5.8 million, or (4)%, for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

For the six months ended June 30, 2021, total investment income of approximately $134.3 million consisted of approximately $78.2 million in cash interest from investments, approximately $11.4 million in PIK and non-cash interest from investments, approximately $0.9 million in prepayment fees, net amortization of purchase premiums and discounts of approximately $3.6 million, approximately $21.6 million in cash dividends from investments, approximately $11.0 million in PIK and non-cash dividends from investments and approximately $7.6 million in other income.

The decrease in interest income of approximately $18.9 million during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 was primarily due to lower LIBOR rates on smaller invested balances.

Our smaller invested balances were driven by the repayments of our revolving credit facilities due to asset sales and repayments greater than asset originations during 2020.

The increase in dividend income for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 was primarily due to the an increase in cash dividends from our investment in SLP III and PIK dividends related to new investments.

In addition, total dividend income for the six months ended June 30, 2020 included a reversal of $3.4 million of previously recorded PIK dividends related to our preferred shares in Permian Holdco 1, Inc., which was deemed to no longer be collectible.

Other income during the six months ended June 30, 2021, which represents fees that are generally non-recurring in nature, was primarily attributable to upfront, consent and amendment fees received from 29 different portfolio companies.

Operating Expenses

Six Months Ended

(in thousands) June 30, 2021 June 30, 2020

Management fee $ 27,145 $ 26,992

management fee waiver (7,441) (6,726)

Total management fee 19,704 20,266

Incentive fee 14,546 14,722

Interest and other financing expenses 37,256 41,423

Administrative expenses 2,158 2,279

Professional fees 1,490 1,874

Other general and administrative expenses 908 941

Total expenses 76,062 81,505

expenses waived and reimbursed — (335)

Net expenses before income taxes 76,062 81,170

Income tax expense 23 (7)

Net expenses after income taxes $ 76,085 $ 81,163

Our total net operating expenses decreased by approximately $5.1 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

Our management fee decreased by approximately $0.6 million, net of a management fee waiver, and our incentive fee decreased by approximately $0.2 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

The decrease in management fees was attributable to an increase in the management fee waiver as a result of the fee waiver agreement (as defined below) in which the Investment Adviser has agreed to waive base management fees in order to reach a target base management fee of 1.25% on gross assets.

Interest and other financing expenses decreased by approximately $4.2 million during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily due to lower LIBOR rates on our floating rate borrowings, lower borrowings on our revolving facilities and lower interest expense on our 2021A Unsecured Notes issued in the first quarter as compared to our 2016 Unsecured Notes and 5.75% Unsecured Notes, which were repaid with these proceeds in the first quarter of 2021.

Our total professional fees, administrative expenses and total other general and administrative expenses for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 remained relatively flat.

Net Realized Gains (Losses) and Net Change in Unrealized Appreciation (Depreciation)

Six Months Ended

(in thousands) June 30, 2021 June 30, 2020

Net realized losses on investments $ (10,316) $ (3,642)

Net change in unrealized appreciation (depreciation) of investments 83,280 (151,457)

(Provision) benefit for taxes (115) 521

Net realized and unrealized gains (losses) $ 72,849 $ (154,578)

Our net realized losses and unrealized gains resulted in a net gain of approximately $22.9 million for the three months ended March 31, 2021 compared to net realized gains and unrealized losses resulting in a net loss of approximately $203.7 million for the same period in 2020.

Our net realized losses and unrealized gains resulted in a net gain of approximately $72.8 million for the six months ended June 30, 2021 compared to net realized and unrealized losses resulting in a net loss of approximately $154.6 million for the same period in 2020.

As movement in unrealized appreciation or depreciation can be the result of realizations, we look at net realized and unrealized gains or losses together.

The net gain for the three months ended March 31, 2021 was primarily driven by the overall increase in market prices of our investments during the period.

The provision for income taxes was attributable to equity investments that are held as of March 31, 2021 in four of our corporate subsidiaries.

The net loss for the three months ended March 31, 2020 was primarily driven by the overall decrease in market prices of our investments during the period due to the impact of the COVID-19 pandemic.

The net gain for the six months ended June 30, 2021 was primarily driven by unrealized appreciation on our investments in Edmentum, NM CLFX LP and NM GLCR LP.

The provision for income taxes was attributable to equity investments that are held as of June 30, 2021 in four of our corporate subsidiaries.

The net loss for the six months ended June 30, 2020 was primarily driven by the overall decrease in market prices of our investments during the period due to the impact of the COVID-19 pandemic.

See Monitoring of Portfolio Investments above for more details regarding the continuing impact of the COVID-19 pandemic on the health of our portfolio companies.

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Liquidity and Capital Resources

The primary use of existing funds and any funds raised in the future is expected to be for repayment of indebtedness, investments in portfolio companies, cash distributions to our stockholders or for other general corporate purposes.

Since our IPO, and through March 31, 2021, we raised approximately $893.2 million in net proceeds from additional offerings of common stock.

Since our IPO, and through June 30, 2021, we raised approximately $893.2 million in net proceeds from additional offerings of common stock.

Our liquidity is generated and generally available through advances from the revolving credit facilities, from cash flows from operations, and, we expect, through periodic follow-on equity offerings.

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The agreements governing the NMFC Credit Facility, the Convertible Notes and the Unsecured Notes (as defined below) contain certain covenants and terms, including a requirement that we not exceed a debt-to-equity ratio of 1.65 to 1.00 at the time of incurring additional indebtedness and a requirement that we not exceed a secured debt ratio of 0.70 to 1.00 at any time.

As of March 31, 2021, our asset coverage ratio was 184.6%.

At March 31, 2021 and December 31, 2020, we had cash and cash equivalents of approximately $47.3 million and $79.0 million, respectively.

Our cash provided by (used in) operating activities during the three months ended March 31, 2021 and March 31, 2020 was approximately $44.3 million and $(13.5) million, respectively.

As of June 30, 2021, our asset coverage ratio was 183.9%.

At June 30, 2021 and December 31, 2020, we had cash and cash equivalents of approximately $27.8 million and $79.0 million, respectively.

Our cash (used in) provided by operating activities during the six months ended June 30, 2021 and June 30, 2020 was approximately $(9.3) million and $283.9 million, respectively.

We expect that all current liquidity needs will be met with cash flows from operations and other activities.

Holdings Credit Facility —On October 24, 2017, we entered into the Third Amended and Restated Loan and Security Agreement among us, as the Collateral Manager, NMF Holdings, as the Borrower, Wells Fargo Securities, LLC, as the Administrative Agent and Wells Fargo Bank, National Association, as the Lender and Collateral Custodian (as amended from time to time, the "Holdings Credit Facility").

As of the most recent amendment on September 30, 2020, the maturity date of the Holdings Credit Facility is September 30, 2023, and the maximum facility amount is the lesser of $800.0 million and the actual commitments of the lenders to make advances as of such date.

As of March 31, 2021, the maximum amount of revolving borrowings available under the Holdings Credit Facility is $745.0 million.

As of the most recent amendment on April 20, 2021, the maturity date of the Holdings Credit Facility is April 20, 2026, and the maximum facility amount is the lesser of $800.0 million and the actual commitments of the lenders to make advances as of such date.

As of June 30, 2021, the maximum amount of revolving borrowings available under the Holdings Credit Facility is $730.0 million.

Under the Holdings Credit Facility, NMF Holdings is permitted to borrow up to 25.0%, 45.0%, 67.5% or 70.0% of the purchase price of pledged assets, subject to approval by Wells Fargo Bank, National Association.

The Holdings Credit Facility is non-recourse to us and is collateralized by all of the investments of NMF Holdings on an investment by investment basis.

All fees associated with the origination or upsizing of the Holdings Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the Holdings Credit Facility.

All fees associated with the origination, amending or upsizing of the Holdings Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the Holdings Credit Facility.

The Holdings Credit Facility contains certain customary affirmative and negative covenants and events of default.

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The covenants are generally not tied to mark to market fluctuations in the prices of NMF Holdings investments, but rather to the performance of the underlying portfolio companies.

As of the most recent amendment on September 30, 2020, the Holdings Credit Facility bears interest at a rate of LIBOR plus 2.00% per annum for Broadly Syndicated Loans (as defined in the Third Amended and Restated Loan and Security Agreement) and LIBOR plus 2.50% per annum for all other investments.

Previously the Holdings Credit Facility bore interest at a rate of LIBOR plus 1.75% per annum for Broadly Syndicated Loans (as defined in the Second Amended and Restated Loan and Security Agreement) and LIBOR plus 2.25% per annum for all other investments.

As of the most recent amendment on April 20, 2021, the Holdings Credit Facility bears interest at a rate of LIBOR plus 1.60% per annum for Broadly Syndicated Loans (as defined in the Fifth Amendment Loan and Security Agreement) and LIBOR plus 2.10% per annum for all other investments.

From September 30, 2020 to April 19, 2021 the Holdings Credit Facility bore interest at a rate of LIBOR plus 2.00% per annum for Broadly Syndicated Loans (as defined in the Fourth Amendment Loan and Security Agreement) and LIBOR plus 2.50% per annum for all other investments.

Prior to September 30, 2020 the Holdings Credit Facility bore interest at a rate of LIBOR plus 1.75% per annum for Broadly Syndicated Loans (as defined in the Second Amended and Restated Loan and Security Agreement) and LIBOR plus 2.25% per annum for all other investments.

The Holdings Credit Facility also charges a non-usage fee, based on the unused facility amount multiplied by the Non-Usage Fee Rate (as defined in the Third Amended and Restated Loan and Security Agreement).

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The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the Holdings Credit Facility for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

(in millions) March 31, 2021 March 31, 2020

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the Holdings Credit Facility for the three and six months ended June 30, 2021 and June 30, 2020:

Three Months Ended Six Months Ended

(in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest expense $ 2.5 $ 3.2 $ 5.2 $ 8.6

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Average debt outstanding $ 469.1 $ 535.5 $ 459.7 $ 582.5

As of March 31, 2021 and December 31, 2020, the outstanding balance on the Holdings Credit Facility was $450.2 million and $450.2 million, respectively, and NMF Holdings was in compliance with the applicable covenants in the Holdings Credit Facility on such dates.

NMFC Credit Facility —The Senior Secured Revolving Credit Agreement, (as amended from time to time, and together with the related guarantee and security agreement, the "NMFC Credit Facility"), dated June 4, 2014, among us, as the Borrower, Goldman Sachs Bank USA, as the Administrative Agent and Collateral Agent, and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Stifel Bank & Trust and MUFG Union Bank, N.A., as Lenders, is structured as a senior secured revolving credit facility.

As of June 30, 2021 and December 31, 2020, the outstanding balance on the Holdings Credit Facility was $505.2 million and $450.2 million, respectively, and NMF Holdings was in compliance with the applicable covenants in the Holdings Credit Facility on such dates.

NMFC Credit Facility —The Amended and Restated Senior Secured Revolving Credit Agreement, (as amended from time to time, and together with the related guarantee and security agreement, the "NMFC Credit Facility"), dated June 4, 2021, among us, as the Borrower, Goldman Sachs Bank USA, as the Administrative Agent and Collateral Agent, and Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Stifel Bank & Trust and MUFG Union Bank, N.A., as Lenders, is structured as a senior secured revolving credit facility.

The NMFC Credit Facility is guaranteed by certain of our domestic subsidiaries and proceeds from the NMFC Credit Facility may be used for general corporate purposes, including the funding of portfolio investments.

The maturity date of the NMFC Credit Facility is June 4, 2022.

As of March 31, 2021, the maximum amount of revolving borrowings available under the NMFC Credit Facility was $188.5 million.

As of the most recent amendment on June 4, 2021, the maturity date of the NMFC Credit Facility is June 4, 2026.

As of June 30, 2021, the maximum amount of revolving borrowings available under the NMFC Credit Facility was $188.5 million.

We are permitted to borrow at various advance rates depending on the type of portfolio investment as outlined in the related Senior Secured Revolving Credit Agreement.

All fees associated with the origination of the NMFC Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the NMFC Credit Facility.

All fees associated with the origination and amending of the NMFC Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the NMFC Credit Facility.

The NMFC Credit Facility contains certain customary affirmative and negative covenants and events of default, including certain financial covenants related to the asset coverage and liquidity and other maintenance covenants.

The NMFC Credit Facility generally bears interest at a rate of LIBOR plus 2.50% per annum or the prime rate plus 1.50% per annum, and charges a commitment fee, based on the unused facility amount multiplied by 0.375% per annum (as defined in the Senior Secured Revolving Credit Agreement).

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the NMFC Credit Facility for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

(in millions) March 31, 2021 March 31, 2020

As of the most recent amendment on June 4, 2021, the NMFC Credit Facility generally bears interest at a rate of LIBOR plus 2.10% per annum or the prime rate plus 1.10% per annum, and charges a commitment fee, based on the unused facility amount multiplied by 0.375% per annum (as defined in the Amended and Restated Senior Secured Revolving Credit Agreement).

Prior to June 4, 2021 the NMFC Credit Facility bore interest at a rate of LIBOR plus 2.50% per annum or the prime rate plus 1.50% per annum, and charged a commitment fee based on the unused facility amount multiplied by 0.375% per annum (as defined in the Senior Secured Revolving Credit Agreement).

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the NMFC Credit Facility for the three and six months ended June 30, 2021 and June 30, 2020:

Three Months Ended Six Months Ended

(in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest expense $ 0.9 $ 1.2 $ 1.6 $ 3.1

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Average debt outstanding $ 145.9 $ 144.9 $ 125.3 $ 166.7

(1) For the three months ended March 31, 2021 and March 31, 2020, the total amortization of financing costs were less than $50.0 thousand.

As of March 31, 2021 and December 31, 2020, the outstanding balance on the NMFC Credit Facility was $107.0 million and $165.5 million, respectively, and NMFC was in compliance with the applicable covenants in the NMFC Credit Facility on such dates.

(1) For the three months ended June 30, 2021 and the three and six months ended June 30, 2020, the total non-usage fees were less than $50.0 thousand.

(2) For the three months ended June 30, 2020, the total amortization of financing costs were less than $50.0 thousand.

As of June 30, 2021 and December 31, 2020, the outstanding balance on the NMFC Credit Facility was $98.0 million and $165.5 million, respectively, and NMFC was in compliance with the applicable covenants in the NMFC Credit Facility on such dates.

DB Credit Facility —The Loan Financing and Servicing Agreement (the "DB Credit Facility") dated December 14, 2018 and as amended from time to time, among NMFDB as the borrower, Deutsche Bank AG, New York Branch ("Deutsche Bank") as the facility agent, Lender and other agent from time to time party thereto and U.S.

Bank National Association, as collateral agent and collateral custodian, is structured as a secured revolving credit facility and matures on March 25, 2026.

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As of March 31, 2021, the maximum amount of revolving borrowings available under the DB Credit Facility was $280.0 million.

As of June 30, 2021, the maximum amount of revolving borrowings available under the DB Credit Facility was $280.0 million.

We are permitted to borrow at various advance rates depending on the type of portfolio investment, as outlined in the Loan Financing and Servicing Agreement.

The DB Credit Facility is non-recourse to us and is collateralized by all of the investments of NMFDB on an investment by investment basis.

All fees associated with the origination of the DB Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the DB Credit Facility.

All fees associated with the origination and amending of the DB Credit Facility are capitalized on our Consolidated Statement of Assets and Liabilities and charged against income as other financing expenses over the life of the DB Credit Facility.

The DB Credit Facility contains certain customary affirmative and negative covenants and events of default.

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We are also charged a non-usage fee, based on the unused facility amount multiplied by the Undrawn Fee Rate (as defined in the Loan Financing and Servicing Agreement) and a facility agent fee of 0.25% per annum on the total facility amount.

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the DB Credit Facility for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

(in millions) March 31, 2021 March 31, 2020

The following table summarizes the interest expense, non-usage fees and amortization of financing costs incurred on the DB Credit Facility for the three and six months ended June 30, 2021 and June 30, 2020:

Three Months Ended Six Months Ended

(in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest expense(1) $ 1.4 $ 2.3 $ 3.1 $ 4.9

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(1) Interest expense includes the portion of the facility agent fee applicable to the drawn portion of the DB Credit Facility and non-usage fee includes the portion of the facility agent fee applicable to the undrawn portion of the DB Credit Facility.

As of March 31, 2021 and December 31, 2020, the outstanding balance on the DB Credit Facility was $201.0 million and $244.0 million, respectively, and NMFDB was in compliance with the applicable covenants in the DB Credit Facility on such date.

(2) For the three months ended June 30, 2020, the total non-usage fees were less than $50.0 thousand.

As of June 30, 2021 and December 31, 2020, the outstanding balance on the DB Credit Facility was $223.5 million and $244.0 million, respectively, and NMFDB was in compliance with the applicable covenants in the DB Credit Facility on such date.

Unsecured Management Company Revolver —The Uncommitted Revolving Loan Agreement, (the "Unsecured Management Company Revolver"), dated March 30, 2020, by and between us, as the Borrower, and NMF Investments III, L.L.C., as Lender, an affiliate of the Investment Adviser, is structured as a discretionary unsecured revolving credit facility.

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On May 4, 2020, we entered into an Amended and Restated Uncommitted Revolving Loan Agreement with NMF Investments III, L.L.C., which increased the maximum amounts of revolving borrowings available thereunder from $30.0 million to $50.0 million.

As of March 31, 2021, the maximum amount of revolving borrowings available under the Unsecured Management Company Revolver was $50.0 million and no borrowings were outstanding.

For the three months ended March 31, 2021 and March 31, 2020, amortization of financing costs were each less than $50.0 thousand, respectively.

As of June 30, 2021, the maximum amount of revolving borrowings available under the Unsecured Management Company Revolver was $50.0 million and no borrowings were outstanding.

For the three and six months ended June 30, 2021 and June 30, 2020, amortization of financing costs were each less than $50.0 thousand, respectively.

NMNLC Credit Facilities —The Revolving Credit Agreement (together with the related guarantee and security agreement, the “NMNLC Credit Facility”), dated September 21, 2018, by and between NMNLC, as the Borrower, and KeyBank National Association, as the Administrative Agent and Lender, was structured as a senior secured revolving credit facility and matured on September 23, 2020.

The NMNLC Credit Facility was guaranteed by us and proceeds from the NMNLC Credit Facility were able to be used for funding of additional acquisition properties.

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The NMNLC Credit Facility bore interest at a rate of LIBOR plus 2.50% per annum or the prime rate plus 1.50% per annum, and charged a commitment fee, based on the unused facility amount multiplied by 0.15% per annum (as defined in the Revolving Credit Agreement).

For the three months ended March 31, 2020, interest expense, non-usage fees and amortization of financing costs were each less than $50.0 thousand.

For the three and six months ended June 30, 2020, interest expense, non-usage fees and amortization of financing costs were each less than $50.0 thousand.

The Credit Agreement (together with the related guarantee and security agreement, "the NMNLC Credit Facility II"), dated February 26, 2021, by and between NMNLC, as the Borrower, and City National Bank, as the Lender, is structured as a senior secured revolving credit facility and matures on February 25, 2022.

The NMNLC Credit Facility II is guaranteed by us and proceeds from the NMNLC Credit Facility II are able to be used for funding of additional acquisition properties.

As of March 31, 2021, the maximum amount of revolving borrowings available under the NMNLC Credit Facility II is $10.0 million.

As of June 30, 2021, the maximum amount of revolving borrowings available under the NMNLC Credit Facility II is $10.0 million.

The NMNLC Credit Facility II bears interest at a rate of LIBOR plus 2.75% per annum, and charges a commitment fee, based on the unused facility amount multiplied by 0.05% per annum (as defined in the Credit Agreement).

For the three months ended March 31, 2021, interest expense, non-usage fees and amortization of financing costs were each less than $50.0 thousand.

As of March 31, 2021, the outstanding balance on the NMNLC Credit Facility II was $0 million and NMNLC was in compliance with the applicable covenants in the NMNLC Credit Facility II on such date.

Convertible Notes —On August 20, 2018, we closed a registered public offering of $100.0 million aggregate principal amount of unsecured convertible notes (the “2018 Convertible Notes” and together with the 2014 Convertible Notes, the "Convertible Notes"), pursuant to an indenture, dated August 20, 2018, as supplemented by a first supplemental indenture thereto, dated August 20, 2018 (together the “2018A Indenture”).

For the three and six months ended June 30, 2021, interest expense, non-usage fees and amortization of financing costs were each less than $50.0 thousand.

As of June 30, 2021, the outstanding balance on the NMNLC Credit Facility II was $0 million and NMNLC was in compliance with the applicable covenants in the NMNLC Credit Facility II on such date.

Convertible Notes —On August 20, 2018, we closed a registered public offering of $100.0 million aggregate principal amount of unsecured convertible notes ( the "Convertible Notes"), pursuant to an indenture, dated August 20, 2018, as supplemented by a first supplemental indenture thereto, dated August 20, 2018 (together the “2018A Indenture”).

On August 30, 2018, in connection with the registered public offering, we issued an additional $15.0 million aggregate principal amount of the Convertible Notes pursuant to the exercise of an overallotment option by the underwriter of the Convertible Notes.

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These covenants are subject to limitations and exceptions that are described in the 2018A Indenture.

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The following table summarizes certain key terms related to the convertible features of our 2018 Convertible Notes as of March 31, 2021:

The following table summarizes certain key terms related to the convertible features of our Convertible Notes as of June 30, 2021:

Convertible Notes

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Initial conversion price $ 15.18

Conversion premium at March 31, 2021 10.0 %

Conversion rate at March 31, 2021(1)(2) 65.8762

Conversion price at March 31, 2021(2)(3) $ 15.18

Conversion premium at June 30, 2021 10.0 %

Conversion rate at June 30, 2021(1)(2) 65.8762

Conversion price at June 30, 2021(2)(3) $ 15.18

Last conversion price calculation date August 20, 2020

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(2) Represents conversion rate and conversion price, as applicable, taking into account certain de minimis adjustments that will be made on the conversion date.

(3) The conversion price in effect at March 31, 2021 was calculated on the last anniversary of the issuance and will be calculated again on the next anniversary, unless the exercise price shall have changed by more than 1.0% before the anniversary.

(3) The conversion price in effect at June 30, 2021 was calculated on the last anniversary of the issuance and will be calculated again on the next anniversary, unless the exercise price shall have changed by more than 1.0% before the anniversary.

The conversion rate will be subject to adjustment upon certain events, such as stock splits and combinations, mergers, spin-offs, increases in dividends in excess of $0.34 per share per quarter and certain changes in control.

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Earnings Per Share , the issuance is considered part of the if-converted method for calculation of diluted earnings per share.

The following table summarizes the interest expense, amortization of financing costs and amortization of premium incurred on the 2018 Convertible Notes for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

(in millions) March 31, 2021 March 31, 2020

The following table summarizes the interest expense, amortization of financing costs and amortization of premium incurred on the Convertible Notes for the three and six months ended June 30, 2021 and June 30, 2020:

Three Months Ended Six Months Ended

(in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest expense $ 2.9 $ 2.9 $ 5.8 $ 5.8

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Average debt outstanding $ 201.3 $ 201.3 $ 201.3 $ 201.3

(1) For the three months ended March 31, 2021 and March 31, 2020, the amortization of premium was less than $50.0 thousand.

As of March 31, 2021 and December 31, 2020, the outstanding balance on the 2018 Convertible Notes was $201.2 million and $201.2 million, respectively, and NMFC was in compliance with the terms of the 2018A Indenture on such date.

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(1) For the three months ended June 30, 2020, the amortization of premium was less than $50.0 thousand.

As of June 30, 2021 and December 31, 2020, the outstanding balance on the Convertible Notes was $201.2 million and $201.2 million, respectively, and NMFC was in compliance with the terms of the 2018A Indenture on such date.

Unsecured Notes

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On September 14, 2020, the 5.75% Unsecured Notes began trading on the NASDAQ Global Select Market (the "NASDAQ") under the ticker symbol "NMFCL", until redeemed on March 8, 2021.

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The Unsecured Notes are unsecured obligations and rank senior in right of payment to our existing and future indebtedness, if any, that is expressly subordinated in right of payment to the Unsecured Notes;

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and structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries and financing vehicles.

The following table summarizes the interest expense and amortization of financing costs incurred on the Unsecured Notes for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

(in millions) March 31, 2021 March 31, 2020

The following table summarizes the interest expense and amortization of financing costs incurred on the Unsecured Notes for the three and six months ended June 30, 2021 and June 30, 2020:

Three Months Ended Six Months Ended

(in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest expense $ 6.0 $ 5.9 $ 12.5 $ 11.9

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Average debt outstanding $ 511.5 $ 453.3 $ 521.8 $ 453.3

As of March 31, 2021 and December 31, 2020, the outstanding balance on the Unsecured Notes was $511.5 million and $453.3 million, respectively, and we were in compliance with the terms of the NPA and the 2018B Indenture as of such dates, as applicable.

As of June 30, 2021 and December 31, 2020, the outstanding balance on the Unsecured Notes was $511.5 million and $453.3 million, respectively, and we were in compliance with the terms of the NPA and the 2018B Indenture as of such dates, as applicable.

SBA-guaranteed debentures —On August 1, 2014 and August 25, 2017, respectively, SBIC I and SBIC II received SBIC licenses from the SBA to operate as SBICs.

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In June 2018, legislation amended the 1958 Act by increasing the individual leverage limit from $150.0 million to $175.0 million, subject to SBA approvals.

As of March 31, 2021 and December 31, 2020, SBIC I had regulatory capital of $75.0 million and $75.0 million, respectively, and SBA-guaranteed debentures outstanding of $150.0 million and $150.0 million, respectively.

As of March 31, 2021 and December 31, 2020, SBIC II had regulatory capital of $75.0 million and $75.0 million, respectively, and $150.0 million and $150.0 million, respectively, of SBA-guaranteed debentures outstanding.

As of June 30, 2021 and December 31, 2020, SBIC I had regulatory capital of $75.0 million and $75.0 million, respectively, and SBA-guaranteed debentures outstanding of $150.0 million and $150.0 million, respectively.

As of June 30, 2021 and December 31, 2020, SBIC II had regulatory capital of $75.0 million and $75.0 million, respectively, and $150.0 million and $150.0 million, respectively, of SBA-guaranteed debentures outstanding.

The SBA-guaranteed debentures incur upfront fees of 3.435%, which consists of a 1.00% commitment fee and a 2.435% issuance discount, which are amortized over the life of the SBA-guaranteed debentures.

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The following table summarizes our SBA-guaranteed debentures as of March 31, 2021:

The following table summarizes our SBA-guaranteed debentures as of June 30, 2021:

(in millions)

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Once pooled, which occurs in March and September each year, the SBA-guaranteed debentures bear interest at a fixed rate that is set to the current 10-year treasury rate plus a spread at each pooling date.

The following table summarizes the interest expense and amortization of financing costs incurred on the SBA-guaranteed debentures for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

(in millions) March 31, 2021 March 31, 2020

The following table summarizes the interest expense and amortization of financing costs incurred on the SBA-guaranteed debentures for the three and six months ended June 30, 2021 and June 30, 2020:

Three Months Ended Six Months Ended

(in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

Interest expense $ 2.0 $ 2.1 $ 4.0 $ 3.9

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SBICs are subject to an annual periodic examination by an SBA examiner to determine the SBIC's compliance with the relevant SBA regulations and an annual financial audit of its financial statements that are prepared on a basis of accounting other than GAAP (such as ASC 820) by an independent auditor.

As of March 31, 2021 and December 31, 2020, SBIC I and SBIC II were in compliance with SBA regulatory requirements.

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As of June 30, 2021 and December 31, 2020, SBIC I and SBIC II were in compliance with SBA regulatory requirements.

Off-Balance Sheet Arrangements

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These instruments may include commitments to extend credit and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the balance sheet.

As of March 31, 2021 and December 31, 2020, we had outstanding commitments to third parties to fund investments totaling $100.3 million and $73.1 million, respectively, under various undrawn revolving credit facilities, delayed draw commitments or other future funding commitments.

As of June 30, 2021 and December 31, 2020, we had outstanding commitments to third parties to fund investments totaling $106.1 million and $73.1 million, respectively, under various undrawn revolving credit facilities, delayed draw commitments or other future funding commitments.

We may from time to time enter into financing commitment letters or bridge financing commitments, which could require funding in the future.

As of March 31, 2021 and December 31, 2020, we had commitment letters to purchase investments in an aggregate par amount of $0 and $44.9 million, respectively.

As of March 31, 2021 and December 31, 2020, we had not entered into any bridge financing commitments which could require funding in the future.

As of March 31, 2021, we had unfunded commitments related to an equity investment in SLP III of $10.0 million, which may be funded at our discretion.

As of June 30, 2021 and December 31, 2020, we had commitment letters to purchase investments in an aggregate par amount of $33.5 million and $44.9 million, respectively.

As of June 30, 2021 and December 31, 2020, we had not entered into any bridge financing commitments which could require funding in the future.

Contractual Obligations

A summary of our significant contractual payment obligations as of March 31, 2021 is as follows:

A summary of our significant contractual payment obligations as of June 30, 2021 is as follows:

Contractual Obligations Payments Due by Period

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Total Contractual Obligations $ 1,839.4 $ — $ 512.7 $ 1,144.4 $ 182.3

(1) Under the terms of the $745.0 million Holdings Credit Facility, all outstanding borrowings under that facility ($450.2 million as of March 31, 2021) must be repaid on or before September 30, 2023.

As of March 31, 2021, there was approximately $294.8 million of possible capacity remaining under the Holdings Credit Facility.

(1) Under the terms of the $730.0 million Holdings Credit Facility, all outstanding borrowings under that facility ($505.2 million as of June 30, 2021) must be repaid on or before April 20, 2026.

As of June 30, 2021, there was approximately $224.8 million of possible capacity remaining under the Holdings Credit Facility.

(2) $55.0 million of the 2017A Unsecured Notes will mature on July 15, 2022 unless earlier repurchased, $90.0 million of the 2018A Unsecured Notes will mature on January 30, 2023 unless earlier repurchased, $50.0 million of the 2018B Unsecured Notes will mature on June 28, 2023 unless earlier repurchased, $116.5 million of the 2019A Unsecured Notes will mature on April 30, 2024 unless earlier repurchased and $200.0 million of the 2021A Unsecured Notes will mature on January 29, 2026 unless earlier repurchased.

(3) Our SBA-guaranteed debentures will begin to mature on March 1, 2025.

(4) Under the terms of the $280.0 million DB Credit Facility, all outstanding borrowings under that facility ($201.0 million as of March 31, 2021) must be repaid on or before March 25, 2026.

As of March 31, 2021, there was approximately $79.0 million of possible capacity remaining under the DB Credit Facility.

(4) Under the terms of the $280.0 million DB Credit Facility, all outstanding borrowings under that facility ($223.5 million as of June 30, 2021) must be repaid on or before March 25, 2026.

As of June 30, 2021, there was approximately $56.5 million of possible capacity remaining under the DB Credit Facility.

(5) The Convertible Notes will mature on August 15, 2023 unless earlier converted or repurchased at the holder's option or redeemed by us.

(6) Under the terms of the $188.5 million NMFC Credit Facility, all outstanding borrowings under that facility ($107.0 million as of March 31, 2021) must be repaid on or before June 4, 2022.

As of March 31, 2021, there was approximately $81.5 million of available capacity remaining under the NMFC Credit Facility.

(6) Under the terms of the $188.5 million NMFC Credit Facility, all outstanding borrowings under that facility ($98.0 million as of June 30, 2021) must be repaid on or before June 4, 2026.

As of June 30, 2021, there was approximately $90.5 million of available capacity remaining under the NMFC Credit Facility.

We have entered into an investment management and advisory agreement (the "Investment Management Agreement") with the Investment Adviser in accordance with the 1940 Act.

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We have also entered into the administration agreement, as amended and restated (the "Administration Agreement") with the Administrator.

Under the Administration Agreement, the Administrator has agreed to arrange office space for us and provide office equipment and clerical, bookkeeping and record keeping services and other administrative services necessary to

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conduct our respective day-to-day operations.

The Administrator has also agreed to maintain, or oversee the maintenance of, our financial records, our reports to stockholders and reports filed with the SEC.

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Distributions and Dividends

Distributions declared and paid to stockholders for the three months ended March 31, 2021 totaled approximately $29.0 million.

Distributions declared and paid to stockholders for the six months ended June 30, 2021 totaled approximately $58.1 million.

The following table reflects cash distributions, including dividends and returns of capital, if any, per share that have been declared by our board of directors for the two most recent fiscal years and the current fiscal year to date:

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December 31, 2021

Second Quarter April 30, 2021 June 16, 2021 June 30, 2021 $ 0.30

First Quarter February 17, 2021 March 17, 2021 March 31, 2021 0.30

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Therefore, New Mountain Capital is entitled to any profits earned by the Investment Adviser, which includes any fees payable to the Investment Adviser under the terms of the Investment Management Agreement, less expenses incurred by the Investment Adviser in performing its services under the Investment Management Agreement.

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• We have entered into a fee waiver agreement (the "Fee Waiver Agreement") with the Investment Adviser, pursuant to which the Investment Adviser agreed to voluntarily reduce the base management fees payable to the Investment Adviser by us under the Investment Management Agreement beginning with the quarter ended March

31, 2021 through the quarter ending December 31, 2022.

See Item 1— Financial Statements—Note 5.

Agreements for details.

• We have entered into the Administration Agreement with the Administrator, a wholly-owned subsidiary of New Mountain Capital.

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The Administrator cannot recoup any expenses that the Administrator has previously waived.

For the three months ended March 31, 2021 approximately $0.8 million of indirect administrative expenses were included in administrative expenses, of which approximately $0.0 million were waived by the Administrator.

As of March 31, 2021, approximately $1.5 million of indirect administrative expenses were included in payable to affiliates.

For the three months ended March 31, 2021, the reimbursement to the Administrator represented approximately 0.02% of our gross assets.

For the three and six months ended June 30, 2021 approximately $0.6 million and $1.4 million, respectively, of indirect administrative expenses were included in administrative expenses, of which approximately $0.0 million and $0.0 million, respectively, were waived by the Administrator.

As of June 30, 2021, approximately $0.6 million of indirect administrative expenses were included in payable to affiliates.

For the three and six months ended June 30, 2021, the reimbursement to the Administrator represented approximately 0.02% and 0.04%, respectively, of our gross assets.

• We, the Investment Adviser and the Administrator have entered into a royalty-free Trademark License Agreement, as amended, with New Mountain Capital, pursuant to which New Mountain Capital has agreed to grant us, the Investment Adviser and the Administrator a non-exclusive, royalty-free license to use the name "New Mountain" and "New Mountain Finance".

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On March 30, 2020, we entered into the Unsecured Management Company Revolver with NMF Investments III, L.L.C., an affiliate of the Investment Adviser, with a $30.0 million maximum amount of revolver borrowings available and a maturity date of December 31, 2022.

On May 4, 2020, we entered into an Amended and Restated Uncommitted Revolving Loan Agreement with NMF Investments III, L.L.C., which increased the maximum amounts of revolving borrowings available

thereunder from $30.0 million to $50.0 million.

Refer to Borrowings for discussion of the Unsecured Management Company Revolver.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis