NEW YORK, May 21, 2026, 07:15 EDT
New Mountain Finance Corp. is coming into Thursday’s Nasdaq open after gaining 2.1%, but the stock is still trading well under its latest book value. Shares finished Wednesday at $8.12. Nasdaq’s regular session is 9:30 a.m. to 4 p.m. Eastern, and premarket starts at 4 a.m.
Discount is the main story now. NMFC last reported net asset value at $10.92 per share as of March 31, which puts the shares trading about 26% below NAV. Management has room with the buyback to create value, but investors are still pricing NMFC as a risk trade and not only for its income.
BDCs are in focus too. These publicly traded lenders to private firms are tied to a non-bank lending industry that Reuters Breakingviews says on Thursday is staring at $3.5 trillion, with defaults ticking higher and income down. The listed BDCs now face a straight question: are loan values staying solid, and what sort of yield will make investors stick around considering the risk.
New Mountain posted first-quarter adjusted net investment income of $32.2 million, or 32 cents per share. The company set its second-quarter payout at 25 cents per share, with holders of record on June 16 getting paid on June 30. New Mountain also wrapped up a portfolio sale worth around $470 million and repurchased about $66 million of stock this year through May 1.
Steven B. Klinsky, chairman of NMFC and CEO of New Mountain Capital, said the company “delivered stable earnings” and is putting sale proceeds toward paying down debt, buying back stock, and making new investments. CEO John R. Kline said NMFC has been “materially reducing PIK exposure”—payment-in-kind interest where the borrower tacks interest onto the debt instead of paying in cash. New Mountain Finance Corporation
Portfolio gets close attention. New Mountain showed a fair value of $2.32 billion spread over 115 portfolio companies as of March 31. Of that, 91.4% landed in the green tier on its own risk scale. First-lien loans accounted for 64.7% of the portfolio.
New Mountain Finance Corporation has reduced leverage. Statutory debt-to-equity is down to 1.12 times from 1.26 times at the end of the year, and net debt-to-equity is now at 1.08 times. For BDCs, which borrow to lend, lower leverage means more flexibility if loan values slip.
B. Riley bumped its NMFC price target to $8 from $7.50 on May 6 but stuck with a neutral call. Sell-side sentiment remains cautious. FactSet data via MarketScreener shows an average NMFC target of $8.54 and a Hold mean consensus. NMFC finished Wednesday near the range’s bottom.
BDCs saw fresh attention after analyst Henry Coffey told Barron’s that Ares Capital and Blue Owl Capital had “exceptional dividend durability,” putting them apart from FS KKR. FS KKR has taken more heat since Reuters said KKR was planning a $300 million support deal for its adviser as losses and non-accruals grew. Barron’s
But there’s a risk Wednesday’s move does not last. If marks on private loans keep dropping, NMFC’s discount to NAV could shift from looking like a bargain to a sign that book value is heading lower. Reuters said this month a review of 14 big BDC filings showed aggregate fair-value-to-cost ratios slipped in the first quarter, with weaker borrowers, software loans and redemption pressure drawing more attention.
Investors right now are looking at the 25-cent dividend and the bigger buyback as support. The question is if those protections are enough to offset a bigger drop in private-credit vehicles, where high yields alone aren’t cutting it anymore.
