New Mountain Finance NAV Slips to $10.67 as Q3 Originations Shrink

New Mountain Finance's net asset value fell to $10.67 a share at the end of September from $10.89 three months earlier, the business development company said Monday, Nov. 2, in third-quarter results filed with the SEC after the market closed. New lending slowed sharply: it originated $10.3 million of investments, down from $73.3 million in the second quarter.

New Mountain Finance (NASDAQ: NMFC) lends mainly to upper middle market companies backed by private equity sponsors. It reported adjusted net investment income of $24.1 million, or $0.26 a share, the same per-share figure as in the second quarter and down from $0.32 a year earlier. It declared a fourth-quarter distribution of $0.25 a share, payable Dec. 31 to holders of record on Dec. 17, unchanged from the third quarter.

Why did New Mountain Finance's NAV fall?

Because of markdowns. The company booked $20.0 million of net realized and unrealized losses in the quarter, most of it from $14.4 million of unrealized depreciation on non-controlled, non-affiliated investments. The net increase in net assets from operations was $3.5 million, or $0.04 a share, against $12.2 million, or $0.11, a year earlier. Total NAV was $1.01 billion, down from $1.03 billion on June 30.

Measure	Sept. 30, 2026	June 30, 2026
NAV per share	$10.67	$10.89
Portfolio at fair value	$2.27 billion	$2.30 billion
Portfolio companies	110	113
Yield to maturity at cost	about 12.0%	about 11.1%
Statutory debt to equity	1.19x	1.16x

Source: New Mountain Finance earnings releases, Aug. 3 and Nov. 2, 2026.

Credit was mixed. The company said 86% of the portfolio by fair value was rated green on its internal heatmap, against about 88% three months earlier. Seventeen companies were rated yellow, six orange and one red. The 10-Q says it put its first-lien term loan to LogRhythm Inc. on non-accrual in the third quarter, joining earlier non-accruals including Convey Health Solutions and American Achievement.

Total investment income fell 25% from a year earlier to $60.4 million. Interest and other financing costs fell to $22.9 million from $31.7 million.

How is New Mountain Finance funding itself?

With more unsecured debt and a smaller bank line. On Oct. 1 it funded a $150 million private placement of unsecured notes: $40 million at a fixed 7.28% due October 2028, $35 million at 7.76% due October 2031, and $75 million of floating-rate notes due October 2031 at SOFR plus 3.66%, the 10-Q says. On Oct. 2 it cut the commitment on its Holdings Credit Facility to $350 million from $450 million. That facility charges SOFR plus 1.85%. For current SOFR and prime levels, see hard money and private lending rates today.

Our warehouse line of credit guide explains how secured credit facilities like this one fund a lender's loans. The company also said its first small business investment company subsidiary repaid all its SBA-guaranteed debentures, and the SBA approved surrendering that license on Oct. 20.

"Our objective is to reinvest proceeds into first-lien, cash-paying assets to improve portfolio diversification and enhance income quality," CEO John R. Kline said in the release. The results follow Saratoga Investment's NAV drop in October. The company will hold its earnings call at 10 a.m. ET on Tuesday, Nov. 3.