BDC New Mountain Finance Prices New Baby Bonds

Business development company New Mountain Finance (NYSE:NMFC) has priced their new baby bonds at 5.75%.  We note that the company has recently voted to reduce their asset coverage ratio to 150% from 200% as now allowed by law.

The issue will trade under the permanent ticker of NMFX when it begins to trade in the next week or two.  There will not be OTC Grey market trading.

The issue is nice in that it has a shorter dated maturity in 2023 with early optional redemption starting in 2020.

The pricing term sheet can be found here.

We are not very familiar with NMFC, although some readers have made positive comments on the company on our site.  For now we pass, but will consider a purchase once we are able to do due diligence and have some investable cash available.



17 thoughts on “BDC New Mountain Finance Prices New Baby Bonds”

  1. Wealth Tax sounds pretty scary! You earn money, pay your taxes, save some of what’s left, then they come back and take more? Isn’t that double taxation ? Oh wait…that’s sort of we have now with social security if you have even a modest amount of investment income. When is enough ever enough ? I Hope that never comes to pass here but I’m sure some would love to see it.

    1. Retired, whats one more tax, probably wouldnt even notice…federal income, state income, social security, medicare, sales, property, utility, cell phone, personal property, inheritence, capital gains, gas….and that is just the ones that hit me off the top of my head.

  2. Hi Nomad,

    The general taxation rate in Italy on the investment income (dividends, interests, and capital gain) is of 26% for everybody. For dividends on investments abroad, there is an additional taxation at the source of 15%.For government bonds the fixed tax is 12.50%

    Concerning Preferred Shares and Baby Bonds, I can add that currently there is a lot of confusion. Some intermediaries apply full taxation (26% + 15%), while others enforce only the base rate of 26%.

    You may also want to know that on a given portfolio there is a wealth tax that amounts to 0.20% of one’s investments. For example, if you have a portfolio of 100 000 Euros you have to pay a wealth tax of 200 Euros per year.

    Baby Bonds and Preferred Shares are instruments almost unknown In Europe. I’m doing my best at spreading knowledge about these instruments.

    In Italy, we have a variable taxation rate on earned income, ranging between 23% for salaries up to 15 000 Euros and 43 % for incomes above 75 000 Euros. However, one must be aware that there are many hidden taxes in the Italian system. These may add to another sizable chunk of one’s income.

    The region where I live (Friuli Venezia Giulia, the most north eastern region of Italy, bordering with Slovenia and Austria) is rather periferal with respect to larger cities such as Milan or Rome, and the living costs are rather low.

    1. Ah Mauro you live in my favorite area of Italy. I have wonderful memories of Venice of course, but Trieste was the special surprise. In bocca al lupo with the investments.

    2. Mauro, thank you so much for your information. I have always thought about buying a ruin in an Italian wine growing region/town that I could rebuild and live my later retirement years in. The Italian wealth tax is so socialistic and I’m sure there are many ways that you as a citizen can get around many of these oppressive taxes. I currently live in a US state (by design) with no state income taxes; I think there are 7 states with no to little state income taxes in the US. I am quite young but am basically retired and trying to protect my portfolio and long retirement future. I have good friends that have moved to Panama and Costa Rica that are living like kings and queens on a modest pension/retirement income. Thank you again for your interesting reply, Nomad

  3. Thanks Qniform
    I’am resident in Italy, in Europe a share is identified by its cusip/isin, the database of the intermediaries do not recognise the symbol or ticker.

    1. Mauro, I’m curious to know what the tax rate(s) are in Italy? Do all the EU countries have differing tax rates on investment income, capital gains and earned income? Is the cost of living high in your area of Italy? Thank you in advance for your information, Nomad

      1. Nomad, after selling out at 25.37 last week, I went back in on GLIBP at 25.10 and gonna snag that div that goes exD end of week.

        1. Grid, I snagged a bit GLIBP at about a $25.07 average and plan on unloading after the EX date. VivaLaFlip, Nomad

          1. It got to 25.04, but I missed…. This issue doesnt have a trading history, so I am a little tepid playing flip game here… And I am violating a personal rule here….Being ok holding long term if it drops….Not very many 7% QDI issues on the market that are not shippers, so maybe this will keep this boat from taking on too much water.

          2. Wow, Nomad, you change your mind and decide to buy the float up today? GLIBP blew up to 25.75 though next trade will be down… I would have sold, but I bought with unsettled funds, so selling would get me in trouble.

          3. Grid, I decided to sell GLIBP at $25.78 today. I see it’s settled back down to $25.64. Friday is XD day, so I have tomorrow and Thursday to buy back – hope to do so around $25.50 or thereabouts.

          4. Im trapped until tomm. I may hold a bit. I usually have something in mind to buy when I sell. And this got me in trouble when I dumped off all my HE-U last week…No plan, so I wound up buying even more NSS at 25.70, a small few hundred add on GLP-A at 25.50 last friday, and finished up the cash buying 500 of GLIBP. Im cross pollenating here and dont like it…Meaning I moved investment grade cash into junk. I guess I will hang over exposed with NSS until I can find something of quality and decent yield to get that money back over into the other bucket.

  4. I can not find the cusip / isin for new perpetual preferred AllianzGI Convertible & Income Fund with a coupon of 5.625% NCV-A ticker OTC Grey di NZCZP.
    Thanks Tim

  5. NCV-A. New preferred paying 5.625% rated AAA by Fitch. CEF style asset coverage. I guess if you’re going to have infinite duration, this would be it.

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