Company: NMFCZ
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001496099-25-000010
Chunk: 288

Company: New Mountain Finance Corp
Filing Date: 2025-02-26
Form: 10-K
Item: Item 8
Chunk 288
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notes 2, 3, and 4 in the consolidated financial statements 

Critical Audit Matter Description

The Company invests in debt securities, including first and second lien debt, notes, bonds, mezzanine securities, and equity interests. The Company’s determination of fair value for these investments involves subjective judgments and estimates utilizing a market approach, an income approach, or both approaches, as appropriate. These approaches require management to make judgments and estimates related to significant unobservable inputs including the selection of discount rates and EBITDA or revenue multiples based on multiples of publicly traded comparable companies and comparable transactions.

We identified the valuation of investments as a critical audit matter given the significant judgments made by management to estimate the fair value of certain debt and equity positions. This required a high degree of auditor judgment and extensive audit effort, including the need to involve internal fair value specialists who possess significant valuation experience and modeling expertise, to evaluate the appropriateness of the valuation methodologies and the significant unobservable inputs.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation methodologies and unobservable inputs used by management to estimate the fair value of investments included the following, among others: 

•We tested the operating effectiveness of controls over the valuation of investments, including those over the selection of valuation methodologies and development of unobservable inputs.

•We evaluated the reasonableness and consistency of application of the Company's valuation polices over investments, including those surrounding the selection of valuation methodologies and the derivation of valuation inputs.

•With the assistance of our internal fair value specialists, we evaluated the appropriateness of the valuation methodologies and the reasonableness of the significant unobservable inputs.

•With the assistance of our internal fair value specialists, in certain instances, we developed independent fair value estimates and compared our estimates to the Company's estimates.

•We evaluated the impact of current market events and conditions on the selected valuation methodologies and significant unobservable inputs.

/s/ DELOITTE & TOUCHE LLP

New York, New York

February 26, 2025

We have served as the Company's auditor since 2008.

87

New Mountain Finance Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except shares and per share data) December 31, 2024December 31, 2023Assets  Investments at fair value  Non-controlled/non-affiliated investments (cost of $2,298,083 and $2,283,490, respectively)$2,277,352