SecProbe.io

CORRESP
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June 25, 2014

VIA EDGAR

David Joire, Esq.

Senior Counsel, Division of Investment Management

U. S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549-4720

Re:                             New Mountain Finance Corporation, et. al., 812-14279

On behalf of New Mountain Finance Corporation and the additional applicants (the “Applicants “), please find a copy of the above-referenced First Amended and Restated  Application for an Order under Section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), for an exemption from Sections 18(a) and 61(a) of the 1940 Act (the “Amended and Restated Application”), which is marked to indicate changes made to the Application that was filed on February 18, 2014.

The Amended and Restated Application reflects changes made in response to the comments in your letter dated June 17, 2014 (the “Letter”), which sets forth the comments provided by the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the “Commission”), as well as further discussions with Staff. The comments from the Letter are set forth below and each is followed by the Company’s response.

Terms used but not defined herein have the meaning ascribed to them in the Amended and Restated Application.

1.                                      Following the NMF Corp annual meeting on May 6, 2014: the Operating Company filed a Form N-54C and thereby de-elected BDC status; NMF Corp entered into an advisory agreement with the Adviser; and the operating company terminated its advisory contract with the adviser. Please modify the application to reflect these developments. In particular, please delete the Operating Company as a named applicant and define “Company’’ as NMF Corp rather than as the Operating Company “together with NMF Corp.”

Response:                                        Applicants have revised the Amended and Restated Application in response to the Staff’s comment.

ATLANTA

AUSTIN

HOUSTON

NEW YORK

SACRAMENTO

WASHINGTON DC

2.                                      On page 1, in the first sentence, please replace “New Mountain Finance Holdings, L.L.C., a Delaware limited company” with “New Mountain Finance Holdings, L.L.C., a Delaware limited liability company (emphasis added).” In the caption, please replace “812” with “812-14279.”

Response:                                        Applicants have revised the Amended and Restated Application in response to the Staff’s comment. Applicants have deleted the reference to New Mountain Finance Holdings, L.L.C. in response to the first comment of the Staff’s Letter.

3.                                      On page 2, in the carryover paragraph at the top of the page, the application states that the requested relief would apply to SBIC Subsidiaries formed in the future. We understand that the SBA’s funding limit is $225 million for two or more SBICs under common control, and that two SBIC Subsidiaries are sufficient to reach the SBA’s funding limit. Please explain the reasons for forming additional SBIC Subsidiaries and state whether you anticipate any of the SBIC Subsidiaries operating without SBA funding or guarantees. Also, please state that the financial statements of all SBIC Subsidiaries will be consolidated with NMF Corp’s financial statements.

Response:                                        Applicants have revised the Amended and Restated Application in response to the Staff’s comment on page 4 in Section I.D.

4.                                      On page 2, in the third sentence of the bottom carryover paragraph at the bottom of the page, please use the term “Commission,” as defined earlier in the application, instead of the term “SEC.”  Please make any applicable conforming changes throughout the application. In the fourth sentence, please remove the word “in” immediately following the phrase “common stock offered.”

Response:                                        Applicants have revised the Amended and Restated Application in response to the Staff’s comment.  Applicants note that they have deleted the fourth sentence in response to the first comment of the Staff’s Letter.

5.                                      On page 3, footnote 3, please modify the text to indicate that the structure prior to the Proposed Restructuring was pursuant to New Mountain finance Corporation (pub. avail. April 27. 201 1) available at http:/www.sec.gov/divisions/mvestment/noaction/2011 /newmountain042711-55a.htm.

Response:                                        Because Applicants have deleted the reference to the Operating Company in response to the first comment of the Staff’s Letter, Applicants have also deleted the reference to the Proposed Restructuring.

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6.                                      On page 5, please modify the beginning of the first sentence in the fourth paragraph as follows:

As an SBIC, New Mountain SBIC and any future SBIC Subsidiary, will be examined ...

Response:                                        Applicants have revised the Amended and Restated Application in response to the Staff’s comment.

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Please call me at (202) 383-0176 if you have any questions or wish to discuss our responses.

Sincerely,

/s/ Steven B. Boehm

Steven B. Boehm

cc:                                Jim Curtis, Branch Chief

Robert A. Hamwee, New Mountain Finance Corporation

Cynthia M. Krus, Esq., Sutherland Asbill & Brennan LLP

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File No. 812-14279

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FIRST AMENDED AND RESTATED APPLICATION FOR AN ORDER PURSUANT TO SECTION 6(c) OF THE INVESTMENT COMPANY ACT OF 1940 (“1940 ACT”) GRANTING EXEMPTIONS FROM SECTIONS 18(a) AND 61(a) OF THE 1940 ACT

NEW MOUNTAIN FINANCE CORPORATION

NEW MOUNTAIN FINANCE HOLDINGS, L.L.C.

NEW MOUNTAIN FINANCE ADVISERS BDC, L.L.C.

NEW MOUNTAIN FINANCE SBIC, L.P.

AND

NEW MOUNTAIN FINANCE SBIC G.P., L.L.C.

787 SEVENTH AVENUE, 48TH FLOOR

NEW YORK, NY 10019

(212) 720-0300

All Communications, Notices and Orders to:

Robert A. Hamwee

President and Chief Executive Officer

New Mountain Finance Corporation

787 Seventh Avenue, 48th Floor

New York, NY 10019

(212) 720-0300

Copies to:

Steven B. Boehm, Esq.

Cynthia M. Krus, Esq.

Sutherland Asbill & Brennan LLP

700 Sixth Street, NW

Washington, DC 20001

(202) 383-0100

February 18June 25, 2014

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

In   the Matter of:

)

)

NEW   MOUNTAIN FINANCE

)

CORPORATION

)

)

NEW   MOUNTAIN FINANCE HOLDINGS,

)

L.L.C.

)

)

FIRST   AMENDED AND RESTATED APPLICATION FOR AN ORDER PURSUANT TO   SECTION 6(c) OF THE INVESTMENT COMPANY ACT OF 1940 (“1940 Act”) GRANTING   EXEMPTIONS FROM SECTIONS 18(a) AND 61(a) OF THE 1940 ACT

NEW   MOUNTAIN FINANCE ADVISERS

)

BDC,   L.L.C.

)

)

NEW   MOUNTAIN FINANCE SBIC, L.P.

)

)

And

)

)

NEW   MOUNTAIN FINANCE SBIC G.P.,

)

L.L.C.

787   Seventh Avenue, 48th Floor
   New York, NY 10019

File   No. 812-14279

Investment   Company Act of 1940

New Mountain Finance Corporation, a Delaware corporation (the “NMF Corp”), New Mountain Finance Holdings, L.L.C., a Delaware limited company (the “Operating Company” and, together with NMF Corp, the “Company”), New Mountain Finance Adviser BDC, L.L.C., a Delaware limited liability company (the “Adviser”), New Mountain Finance SBIC, L.P. (“New Mountain SBIC”) and New Mountain Finance SBIC G.P., L.L.C. (“General Partner”) (collectively the “Applicants”), respectfully request an order (the “Order”) of the U.S. Securities and Exchange Commission (the “Commission”) pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”),(1) granting exemptions from Sections 18(a)

(1)  Unless otherwise indicated, all section references herein are to the 1940 Act.

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and 61(a) thereunder.  The relief requested in this application (the “Application”) would permit the Company to adhere to a modified asset coverage requirement under Section 61 of the 1940 Act with respect to any direct or indirect wholly owned subsidiary of the Company that is licensed by the Small Business Administration (“SBA”) to operate under the Small Business Investment Act of 1958 (“SBA Act”) as a small business investment company (“SBIC”) and relies on Section 3(c)(7) for an exemption from the definition of “investment company” under the 1940 Act (each, an “SBIC Subsidiary” and, collectively, the “SBIC Subsidiaries”).

All existing entities that currently intend to rely on the Order have been named as Applicants, and any other existing or future entities that may rely on the Order in the future would comply with the terms and condition of the Application.

I.                STATEMENT OF FACTS AND BACKGROUND

A.            The Company

NMF CorpThe Company, a Delaware corporation organized in June 2010, is a holding company with no direct operations of its own, and its only business and sole assets are its ownership of common membership units of the Operating Company.  The Operating Company is an externally managed, closed-end, non-diversified business development company(2) (“BDC”) managed by the Adviser and is the operating company for NMF Corp’s business.  On May 19, 2011 each of NMF Corp and the Operating Company filed a FormsForm N-54A with the SECCommission, electing to be treated as BDCsa BDC under the 1940 Act. The Operating Company, which was organized in Delaware in October 2008, is deemed the co-issuer of the shares of common stock offered in by NMF Corp in its initial public offering of shares of common stock (the “IPO”).  NMF Corp used the gross proceeds of the IPO to acquire common

(2)  Section 2(a)(48) defines a BDC to be any closed-end investment company that operates for the purpose of making investments in securities described in section 55(a)(1) through 55(a)(3) and makes available significant managerial assistance with respect to the issuers of such securities.

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membership units in the Operating Company.(3)  The number of common membership units issued to NMF Corp in exchange for the gross proceeds equaled the number of shares of common stock issued by NMF Corp in the IPO.  At all times, one common membership unit in the Operating Company is and will remain the economic equivalent of one share of NMF Corp common stock.

The Company is externally managed and advised by the Adviser.  The Company’s principal place of business is 787 7th Avenue, 48th Floor, New York, NY 10019.

As discussed above, and in connection with its IPO, on July 22, 2010 NMF Corpthe Company filed a registration statement on Form N-2 (File No. 333-168280) (the “N-2”) and on May 19, 2011 filed a notice under Form N-54A of its election to be regulated as a BDC within the meaning of Section 2(a)(48) of the 1940 Act.  The N-2 was declared effective on May 19, 2011. On May 19, 2011, NMF Corpthe Company filed a registration statement on Form 8-A to register its common stock under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Accordingly, NMF Corpthe Company is subject to the periodic reporting requirements under Section 13(a) of the Exchange Act.  On May 25, 2011, NMF Corpthe Company completed its IPO.  The Company’s common stock is traded on the New York Stock Exchange under the symbol “NMFC.”

 The Operating Company’s investment objective is to generate current income and capital appreciation through the sourcing and origination of debt securities at all levels of the capital structure, including first and second lien debt, notes, bonds and mezzanine securities. In some cases, the Operating Company’s investments may also include small equity interests. The primary focus is in the debt of defensive growth companies, which are defined as generally exhibiting the following characteristics: (i) sustainable secular growth drivers, (ii) high barriers

(3) This structure was entirely tax driven.

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to competitive entry, (iii) high free cash flow after capital expenditure and working capital needs, (iv) high returns on assets and (v) niche market dominance.

The Company’s board of directors (the “Board”) consists of seven members, four of whom are not “interested persons” of the Company within the meaning of Section 2(a)(19) of the 1940 Act.

NMF Corp currently owns all of the outstanding common membership units of the Operating Company.  Subject to the necessary board and stockholder approvals, the Operating Company intends to withdraw its BDC election and assign its investment advisory agreement with the Adviser to NMF Corp (the “Proposed Restructuring”).  Following completion of the Proposed Restructuring, NMF Corp will remain a publicly traded company and replace the Operating Company as a party to the investment advisory agreement with the Adviser.  As a result, at that time, the SBIC and the General Partner will become direct subsidiaries of NMF Corp as opposed to indirect subsidiaries of NMF Corp, which is the structure currently proposed.

B.            The Adviser

The Adviser serves as the external investment adviser to the Company.  The Adviser was formed in 2010. The Adviser is registered as an investment adviser under the Investment Advisers Act of 1940.  The Adviser manages the Company’s investment activities pursuant to an investment advisory agreement with the Company that satisfies the requirements of Sections 15(a) and (c) of the 1940 Act. Subject to the overall supervision of the Board, the Adviser will serve as the investment manager to New Mountain SBIC and the investment and exit decisions and day-to-day investment activities of New Mountain SBIC will be managed by members of the Adviser’s senior management.

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C.            General Partner

The General Partner was organized as a limited liability company under the laws of the state of Delaware on January 24, 2014.  The General Partner is the sole general partner of New Mountain SBIC and the Operating Company is the sole member of the General Partner. (4)  The General Partner may serve as the general partner of future SBIC Subsidiaries.

D.            New Mountain SBIC

New Mountain SBIC formally submitted an application to the SBA for a license to operate as an SBIC on January 29, 2014 and the application was accepted for filing on February 18, 2014.  New Mountain SBIC was organized as a limited partnership under the laws of the state of Delaware on January 24, 2014.

The Operating Company will beis the sole limited partner of the SBIC.  (5)  New Mountain SBIC is not registered under the 1940 Act as it relies on the exclusion from the definition of investment company contained in Section 3(c)(7) of the 1940 Act.  The Company’s primary focus is on investments in defensive growth companies and industries, as defined above.  New Mountain SBIC will employ the same strategy and philosophy.

Due in part to the increase in the maximum amount of SBIC leverage available to associated(3) SBIC funds, the Company may form a second SBIC Subsidiary to fully utilize maximum available funding. Additionally, if future legislation or SBA regulations increase the current $225 million funding limit for two or more SBICs under common control, it may again

(4) Following the Proposed Restructuring, as discussed above, the General Partner will become a direct subsidiary of NMF Corp as opposed to an indirect subsidiary of NMF Corp, which is the structure currently proposed.

(5) Following the Proposed Restructuring, as discussed above, the SBIC will become a direct subsidiary of NMF Corp as opposed to an indirect subsidiary of NMF Corp, which is the structure currently proposed.

(3) The SBA defines “associate” as “any Person that directly or indirectly Controls, or is Controlled by, or under ommon Control with, a licensee.” 13 C.F.R § 120.10 (2013).

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be necessary or advisable to establish more than two SBIC Subsidiaries to fully utilize available f