Teleconferência de Resultados do 3º Trimestre de 2026 da NMFC: Rendimento da Carteira de 12%, NAV Cai para US$ 10,67

Principais Destaques

• O resultado líquido de investimentos ajustado foi de US$ 0,26 por ação, cobrindo o dividendo em dinheiro de US$ 0,25 por ação pago em 30 de setembro. O conselho de administração declarou outro dividendo de US$ 0,25 para o 4º trimestre de 2026, a ser pago em 31 de dezembro aos acionistas registrados em 17 de dezembro.
• O valor patrimonial líquido (NAV) caiu 2% em relação ao trimestre anterior, para US$ 10,67 por ação. A administração atribuiu US$ 0,12 da queda de US$ 0,22 aos movimentos mais amplos do mercado e US$ 0,10 a marcações específicas de crédito, incluindo insightsoftware, Deca Dental e LG.
• O retorno médio da carteira aumentou para 12%, refletindo em grande parte um deslocamento para cima na curva de juros futuros. A administração afirmou que os rendimentos dos novos investimentos superaram os das liquidações.
• Os ativos inadimplentes (nonaccruals) subiram 30 pontos-base, atingindo 1,8% do valor justo, após a adição de uma pequena posição. Espera-se que a saída da Convey no início do 4º trimestre reduza os ativos inadimplentes em 0,1% do valor justo e 0,6% do custo, mantidas as demais condições.
• A receita em PIK continua sendo um foco central. O PIK proveniente de ativos estruturados com PIK na originação representou 15% da receita total de investimentos, enquanto o PIK modificado respondeu por outros 5%.
• A administração afirmou que taxas de juros básicas mais altas, uma maior diferenciação nos spreads de crédito e estruturas de capital mais seguras estão melhorando as oportunidades ajustadas ao risco no crédito direto, apesar da atividade de M&A morna.

Principais Dados Financeiros

A taxa efetiva de comissão de incentivo da NMFC foi de 15% no 3º tri, refletindo uma renúncia voluntária de US$ 1,4 milhão antes da redução permanente anunciada anteriormente para 15% em 2027.

Desempenho Operacional e dos Negócios

A NMFC manteve o foco em setores defensivos e empresas com receitas recorrentes, margens estáveis e fluxo de caixa duradouro. A administração destacou um crescimento de lucros de dois dígitos em 2026 em diversas posições relevantes, incluindo Benevis, UniTek e Novus Process Systems. A UniTek e a Novus também estão se beneficiando de mercados em expansão ligados ao crescimento da rede elétrica e de data centers, segundo a empresa.

A carteira englobava 110 empresas. Aproximadamente 80% dos investimentos — incluindo ativos de primeira garantia (first-lien), programas de empréstimos sênior e investimentos em net lease — eram de natureza sênior. As posições em participações acionárias (equity) representaram cerca de 6% do portfólio. Excluindo programas de empréstimos sênior e fundos de net lease, os 10 maiores emissores responderam por 24,8% do valor justo total.

A qualidade da carteira apresentou uma ligeira desaceleração. Os investimentos com classificação verde caíram de 88% no 2º tri para 86%, enquanto a exposição com classificação amarela subiu de 10,2% para 11,7%. As posições com classificação amarela e laranja apresentaram uma marcação média ponderada de aproximadamente 70% do valor de face, o que, segundo a administração, reflete uma redução substancial de risco já capturada no NAV.

O índice empréstimo-valor (loan-to-value) da NMFC foi de 49%. Desde o seu IPO, a empresa investiu US$ 10,6 bilhões em 358 companhias e registrou cerca de US$ 101 milhões em perdas líquidas realizadas.

A liquidez permaneceu robusta. A NMFC dispunha de mais de US$ 2 bilhões em capacidade total de endividamento, incluindo cerca de US$ 760 milhões disponíveis em linhas de crédito, sujeitos a limitações da base de cálculo de empréstimo. Isso se compara a aproximadamente US$ 145 milhões em compromissos não sacados. Quase 60% da dívida em aberto vence em 2029 ou posteriormente.

Perspectivas da Administração

As prioridades estratégicas da administração são monetizar posições em ações, reduzir a receita em PIK e aumentar a diversificação da carteira. Os recursos provenientes de desinvestimentos devem ser reinvestidos em ativos de primeira garantia que paguem em dinheiro, embora o momento dependa do desempenho das empresas e de oportunidades de transação adequadas.

A empresa espera que sua recente emissão de dívida não garantida e a liquidez existente sejam suficientes para cobrir os vencimentos de 2027. A administração também prevê continuar ativa no mercado de dívida não garantida e seguir otimizando a composição do passivo para limitar descasamentos entre ativos e passivos.

A administração acredita que as condições para o crédito direto se tornaram mais atraentes. O volume de crédito direto no setor caiu aproximadamente 28% no acumulado do ano, segundo a PitchBook, mas os spreads agora variam de aproximadamente SOFR mais 475 pontos-base a SOFR mais 600 pontos-base, em comparação com um intervalo mais estreito de SOFR mais 450 a 475 pontos-base na maioria dos negócios em 2025.

Riscos e Pontos de Atenção

• Movimentos mais amplos do mercado e taxas de desconto mais elevadas responderam por mais da metade da queda trimestral do NAV.
• Desvalorizações específicas de crédito afetaram um pequeno grupo de participações, incluindo insightsoftware, Deca Dental e LG.
• A receita de PIK aumentou sua fatia no resultado de investimentos devido à capitalização de juros e à transição de um empréstimo do pagamento em dinheiro para o formato PIK.
• A administração citou a inflação persistente, a volatilidade nas cadeias de suprimentos, a menor confiança do consumidor, conflitos geopolíticos, disrupções ligadas à IA e divergências nos valuations das empresas como ventos contrários no mercado.
• A atividade de M&A permaneceu abaixo dos níveis de 2025, o que pode impactar o cronograma de monetização de ações e a rotação da carteira.
• A fraqueza do consumo concentrou-se na faixa de menor renda. A administração descreveu a exposição da NMFC nos setores de cuidados com animais de estimação e lava-rápidos como relativamente defensiva, enquanto classificou os desafios do setor odontológico como mais operacionais do que impulsionados pelo consumo.

Destaques da Sessão de Perguntas e Respostas com Analistas

Questionada se a monetização de participações acionárias exige uma recuperação mais ampla das fusões e aquisições, a administração afirmou que um mercado de transações mais forte ajudaria, mas não é indispensável. Os fatores mais determinantes são o desempenho subjacente das empresas e a identificação de oportunidades que viabilizem saídas a valores apropriados.

Em relação às exposições no setor de saúde voltado ao consumidor, a administração mencionou que os negócios de medicina veterinária e pet care contam com alguns elementos discricionários, mas geralmente apresentam receitas estáveis. Já os problemas no setor odontológico foram descritos como predominantemente operacionais, exigindo atenção minuciosa à execução.

A administração também afirmou que a melhora no desempenho de posições relevantes que geram PIK e em ações corrobora o cronograma de saída planejado e pode criar oportunidades para monetizar essas participações a valores favoráveis.

A queda trimestral na receita proveniente de programas de empréstimos sênior e veículos de net lease foi atribuída à variação normal nas realizações subjacentes e na atividade dos fundos, e não a um evento adverso específico.

Transcrição Completa da Teleconferência de Resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Good day, and welcome to the New Mountain Finance Corporation Third Quarter 2026 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to John Kline, President and CEO. Please go ahead.

John Kline

Thank you, and good morning, everyone. Welcome to New Mountain Finance Corporation's Third Quarter 2026 Earnings Call. On the line with me here today are Steve Klinsky, Chairman of NMFC and CEO of New Mountain Capital; and Laura Holson, COO and Interim CFO of NMFC. Steve is going to make some introductory remarks, but before he does, I'd like to ask Laura to make some important statements regarding today's call.

Laura Holson

Thanks, John. Good morning, everyone. Before we get into the presentation, I would like to advise everyone that today's call and webcast are being recorded. Please note that they are the property of New Mountain Finance Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our November 2 earnings press release.

I would also like to call your attention to the customary safe harbor disclosure in our press release and on Pages 2 and 3 of slide presentation regarding forward-looking statements. Today's conference call and webcast may include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from those statements and projections. We do not undertake to update our forward-looking statements or projections unless required to by law. All materials referenced during today's call, including the earnings press release, earnings presentation and Form 10-Q are available on our website at www.newmountainfinance.com.

At this time, I'd like to turn the call over to Steve Klinsky, NMFC's Chairman, who will give some highlights beginning on Page 6 of the slide presentation. Steve?

Steven Klinsky

Thanks, Laura. It's great to be able to address you all today, both as NMFC's Chairman and as a major fellow shareholder. Adjusted net investment income for the third quarter was $0.26 per share, covering our $0.25 per share dividend that was paid in cash on September 30. Looking forward to Q4, we would like to announce a $0.25 dividend payable on December 31 to shareholders of record as of December 17.

Our net asset value per share of $10.67 and declined 2% compared to Q2, largely due to mark-to-market movement on a handful of idiosyncratic credits, particularly on some of our quoted assets. Earnings in 2026 have grown at double-digit rates at some of our biggest positions, including Benevis, UniTek and the Novus Process Systems, formerly known as Permian. UniTek and Novus are also seeing new growth markets tied to the expansion of the electric grid and data centers. We think the current environment is a good time to enter the credit markets as risk-adjusted returns and direct lending appear to be attractive compared to the narrow market spreads of past years.

As discussed in past calls, we have pledged to voluntarily and permanently reduce our fees to be more shareholder friendly. Despite all these positives, and as I've said before, I believe NMFC continues to be oversold with the stock trading at approximately 65% of book value. At these trading levels, NMFC's book value would have to depreciate nearly $345 million versus our marks as of September 30, or about 15% of our portfolio at fair value to bring book value down to where the stock trades.

At Friday's closing stock price, NMFC is paying a cash yield of 14%, roughly 6 percentage points above the average yield of the high-yield bond index and we believe the dividend is sustainable. Shareholders who have been with NMFC since its public offering have received $20.95 of total cash back versus their initial price of $13.75 per share and also have the $10.67 of book value per share today. This equates to a 9.9% annualized return since NMFC's inception or 8.9% at the current depressed stock price, all at an annualized realized total net loss rate of just 6 basis points.

This 9.9% long-term return exceeds the high-yield bond index by approximately 4.5 percentage points. Long-term loyal shareholders have received all their investment back in cash, plus 103% and assuming a hypothetical sale at the current depressed stock price. Returns made by reinvesting these past cash dividends would be in addition to this amount. I and my fellow NMC executives remain the largest shareholders of NMFC stock and our ownership position has been increasing over time.

Overall, New Mountain ownership increased from approximately 14% last year to approximately 18% of total shares outstanding as of September 30. We thank you, as always, for your friendship and ownership, and we are working diligently to serve your interest in the months and years ahead.

With that, let me turn the call over to John for more details and comments.

John Kline

Thank you, Steve. I'll begin on Page 7. Our direct lending strategy focuses on defensive sectors with sustainable tailwinds and on businesses with recurring revenue stable margins and strong cash flow across economic environments. Our strategy has been built to navigate current economic challenges like persistent inflation, supply chain volatility and weaker consumer confidence. We prioritize transparency and we seek to provide more granular disclosure of our industry niches, so investors can see exactly what we own.

Page 8 shows our long-term track record of delivering consistent, enhanced yield by minimizing credit losses and distributing virtually all of our excess income to shareholders. NMFC's loan-to-value ratio is 49%, which reflects our latest view of enterprise value at each portfolio company. We recalculate loan to value every quarter, so it reflects current market conditions.

Turning to Page 9. Our strategic priorities include monetizing equity positions, reducing PIK income and increasing position diversity. As Steve mentioned, many of our equity and pick yielding positions are performing well, and we continue to see potential catalysts for exits. We're focused on the right outcome for the portfolio, which sometimes requires patients. As opportunities materialize, our objective is to redeploy proceeds into first lien cash paying investments to improve portfolio diversification and income quality. Our liability structure remains well positioned with further opportunity in 2027 to extend near-term maturities.

On Page 10, 86% of the portfolio is rated green compared to 88% last quarter. We saw an increase in the yellow category from 10.2% to 11.7% in our yellow and orange names carry a weighted average mark of approximately $0.70, reflecting meaningful derisking already captured in the current NAV. This heat Mac migration is reflective of modest stress on certain older vintage investments which we continue to work through. We expect to make progress migrating to newer names in the upcoming quarters, which should be beneficial to overall portfolio quality.

Page 11 shows the NAV bridge. Book value per share ended the quarter at $10.67, down $0.22 from $10.89 in Q2. We of approximately $0.12 of the decline reflected broader market movements driven by higher discount rates on leveraged loan assets. While the remaining $0.10 reflected credit-specific movements in a handful of positions, including insightsoftware, Deca Dental and LG. While this is not the NAV rule we want, we do see positive catalysts on certain of these names and other discounted names in the portfolio.

Page 12 covers credit performance. Nonaccruals at fair value were 1.8%, up 30 basis points from last quarter as a very small position was added to the list. On the flip side, we exited convey early in Q4, which will reduce nonaccruals next quarter by 0.1% at fair market value and 0.6% at cost all things equal. On the right side of the page is our cumulative record since IPO, where we have invested $10.6 billion across 358 companies with net realized losses of approximately $101 million. We remain focused on recovering unrealized losses through pull to par on certain loans and through equity exits I mentioned.

I will now turn the call over to Laura to discuss the credit market environment and provide more details on the quarter.

Laura Holson

Thanks, John. Turning to Page 13. M&A activity to date in 2026 remains below 2025 levels with industry-wide direct lending volume down approximately 28% year-to-date according to PitchBook. We still believe M&A activity will pick up at some point, given the backlog of private equity exits and pressure to return capital, but the current investment environment is full of cross currents. These include conflicting macroeconomic signals around inflation, consumer health, labor markets and commodity prices, ongoing geopolitical conflicts the impact of AI and the accelerating pace of technological change and persistent valuation gaps.

While we haven't seen the meaningful pickup that we've been predicting, our deal flow has been steady, particularly in the defensive growth sectors where we focus. We continue to think that direct lending offers attractive returns and compelling enhanced yield. As a floating rate asset class, our all-in return benefits from rising base rates. At the start of 2026, the forward curve was actually predicting base rate cuts. Today, base rates have remained higher for longer, and the forward curve is now pricing in rate increases over the next 12 months.

We believe this creates a tailwind. Additionally, we're seeing what we believe is a healthy bifurcation in the market around spreads. Throughout 2025, we noted on several of our earnings calls that most direct lending deals priced at SOFR plus 450 to 475 regardless of size, sponsor or asset quality. That made for a challenging investing environment and our strategy was really focused on staying safe. Today, spreads range from SOFR plus 475 on the tight end to SOFR plus 600 on the wider end Note that this is the case even in an environment where M&A remains somewhat muted.

I'd attribute this to a more balanced supply and demand dynamic. Even as deal flow is lower, less direct lending capital is available to chase deals, particularly on the heels of recent industry-wide redemptions. We've also seen this translate into more attractive capital structures with lower leverage and tighter documentation. To summarize, we think the combination of higher base rates more discerning spreads and safer capital structures provides attractive risk-adjusted returns in direct lending.

Turning to Slide 14. Origination activity was intentionally light in the quarter as we remained fully invested. We originated $10 million of investments offset by $44 million of sales and repayments. Slide 15 shows that the average yield of NMFC's portfolio increased to 12% during the quarter largely due to the upward shift in the forward curve. Although portfolio activity was modest, yields on new investments exceeded those on repayments. We continue to believe these yields are attractive for the risk.

Turning to Slide 16. Approximately 80% of the portfolio, including first lien investments, SLPs and net lease investments is senior in nature, consistent with the prior quarter. Equity positions represent approximately 6% of the portfolio with the largest positions shown on the right side of the page.

Slide 17 highlights the diversification of our portfolio across 110 companies. Excluding investments in the SLPs and net lease funds, our top 10 single name issuers represent 24.8% of total fair value. As John mentioned earlier, increasing portfolio diversification remains an important priority, and we believe we have line of sight into further progress over the coming quarters.

I will now review our financial results, beginning on Slide 18. For the third quarter, total investment income was $60 million, down 1.8% from the prior quarter. Total net expenses were approximately $36 million, down 1.4% from the prior quarter. NMFC's effective incentive fee rate for Q3 was 15%, reflecting a voluntary waiver of $1.4 million of incentive fees ahead of the previously announced permanent reduction to 15% in 2027. Adjusted net investment income for the quarter was $0.26 per share, more than covering our third quarter dividend. For the fourth quarter, our Board has declared a dividend of $0.25 per share.

Slide 19 provides additional detail on cash and PIK income. PIK income from assets structured with PIK and originations represented 15% of total investment income. Modified PIK resulting from amendments or restructurings, represented 5% of total investment income, up slightly from the prior quarter. The increase in total PIK income as a percentage of investment income reflects PIK compounding and 1 loan moving from cash pay to PIK in the quarter.

Importantly, investments generating noncash income during the quarter are marked at a weighted average fair value of approximately 94% of par and 81% of this income is generated by names rated green on our heat map. Reducing PIK income remains a strategic priority, and we continue to focus on improving the cash paying composition of our portfolio over time.

Moving to the balance sheet on Slide 20. As of September 30, the portfolio had total assets of $2.4 billion, total liabilities of $1.3 billion and net asset value of $1 billion or $10.67 per share. Our net debt-to-equity ratio was 1.15x, within our target range of 1 to 1.25x. Shortly after quarter end, we received a few sizable repayments, namely Thorne and Mercer Advisors. Pro forma for those repayments, our statutory net debt-to-equity ratio decreased to 1.09x.

On Slide 21, we highlight our diversified financing sources and leverage profile. We have more than $2 billion of total borrowing capacity, including approximately $760 million available under our credit facilities, subject to borrowing base limitations. This capacity more than covers our approximately $145 million of unfunded commitments as well as our 2027 maturities. During the second quarter, we priced a $150 million private placement with a delayed funding date, which funded on October 1. We expect to remain active in the unsecured debt market in line with our strategic priorities.

Turning to Slide 22, we show our debt maturity schedule. As mentioned, we have already covered our 2027 maturities through our recent unsecured issuance and existing liquidity. We continue to ladder our maturities with nearly 60% of outstanding debt maturing in 2029 or later.

Lastly, Slide 23 summarizes the floating and fixed state composition of our assets and liabilities. As of September 30, 88% of the NMFC loan portfolio was floating rate and 12% was fixed rate. Our liabilities were 77% floating rate and 23% fixed rate compared to 74% floating rate last quarter. This represents an important milestone as we have now exceeded our target of more than 75% floating rate liabilities. We intend to continue optimizing our liability mix to reduce potential asset liability mismatches.

With that, I will turn the call back over to John.

John Kline

Thank you, Laura. In closing, we would like to thank all of our stakeholders for the ongoing partnership, and we look forward to speaking to you again on our fourth quarter 2026 earnings call in February.

I will now turn things back to the operator to begin Q&A. Operator?

Operator

[Operator Instructions] We'll take our first question from Robert Dodd with Raymond James.

Perguntas e respostas

Robert Dodd

A couple of questions. So I mean, 1 of the things you pointed out, obviously, you're seeking monetizations on the equity, which has been a theme. And yes, it takes a while. Does -- is the market just extremely uncooperative right now? I mean, to your point, M&A activity in general is down substantially. I mean, is it -- is it realistic that we're only going to see these monetizations and rotation to income producing assets. If the market is substantively more cooperative?

Or is it just -- I mean, obviously, these are case-by-case assets, but still the market doesn't seem to be helping you out here. So is that what we need to look for that be more optimistic if the market picks up that, that monetization could actually happen otherwise sit back and be patient.

Laura Holson

I don't think it's so directly tied to the overall volume of M&A environment. Certainly, a more robust M&A environment is more constructive, of course, but it's not like there's no M&A happening right now. I think, in some of our prepared remarks, we talked about seeing steady opportunities for us in direct lending. And so I think that is a result of kind of steady M&A activity, which is not as robust as maybe we've seen in years past. I think it's most important, how the underlying companies are performing.

That's really what we've been focused on, and as Steve talked about in his remarks, we feel like those underlying companies are performing well. So I think that's a good place to start. And then we'll, obviously, as John said, I have to be a little bit patient to just find the right opportunities. But overall, we don't think that we need to wait for a prolific M&A environment in order to execute some of those strategic priorities.

Robert Dodd

Got it. Sort of related follow-on. I mean, as you point out, there's a lot of cross currents out there right now and later now seem to be on the way back up, which would be positive earnings if there's no secondary effects. When we look at the -- obviously, 1 of your larger markdowns on the credit side, this quarter was decadent. That's been a theme in the space, not just you. There's a lot of dental that's been having issues. There's a lot of veterinary and you've got exposure there as well.

Is there an issue that with how the consumer is right now mixed messages there as well. Is there an issue that there's only so much pricing power some of these businesses, be it dental or veterinary or others can pass through to a consumer but their cost structure and their interest expenses are still going through the same pressures. And so are we just going to see more and more of those kind of consumer sort of thought to be more robust businesses, but ones that have passed through the pricing power they can? Are we just going to see more and more problems on -- in that kind of segment of your and frankly other people's portfolio?

John Kline

Sure. It's a great question. And from what we see is across the consumer is a bit of weakness on the low end and strength on the higher end. In general, when we think about the consumer exposure we have in NMFC, we think it's more on the defensive side because it's not overly discretionary. When we think about PET, we have some first lien exposure to veterinarian pet and in general, we think that while there's some discretionary aspects, it's relatively stable from a top line perspective even in a weaker consumer environment. So we feel okay about that.

On the dental side, I think the issues are less consumer and more operational and so any dental exposure that we have would be very focused on making sure the operations are running as smoothly and crisply as possible. And then just more broadly, when we think about the rest of our portfolio, the only other area that I can think of where there's material consumer exposure would be car wash, which we see as being pretty low ticket, and pretty stable when we look at the best car wash platforms out there, and we think we have good exposure to that niche. So that would be the way I would answer it.

Operator

We'll move to our next question from Ethan Kaye with Lucid Capital Markets.

Ethan Kaye

You indicated there's some improving performance across some of the larger portfolio positions, which I think you just touched on. But I mean, can you kind of elaborate on that any further? And does that kind of change the pressure or like time line maybe with which you look to exit these positions?

John Kline

I would say it's supportive of the time line that we seek to exit some of these positions. So I just think, as Laura said, it's good that we have momentum in some of our larger positions, some of our pick yielding positions, some of our equity positions. And we think that will give us an opportunity to exit at a good value.

Ethan Kaye

Okay. And then I noticed there was a bit of a decline in income from the senior loan programs and the net lease. Can you just talk about maybe what drove that this quarter?

Laura Holson

Sure. Yes. I mean these vehicles generally produce pretty consistent income we find, but there is a little bit of volatility quarter-to-quarter just based on underlying realizations or activity at those funds themselves. So we would expect to see a little bit of movement quarter-over-quarter. So nothing in particular that I would call out, just normal quarter-to-quarter volatility.

Operator

[Operator Instructions] It appears there are no further questions at this time. I'd like to turn the conference back over to John for any additional or closing remarks.

John Kline

Great. Well, thank you, everyone, for joining our third quarter call, and we look forward to speaking to you again in the new year. Thank you.

Operator

This concludes today's call. Thank you again for your participation. You may now disconnect, and have a great day.