Q2 Private Credit Dental Restructurings, Affordable Care and Dental Care Alliance, Result in 45%-65% 1L Debt Reduction, 70%-90% 1L Recoveries According to BDC Filings

Credit Research: Mark Fischer Relevant Items:New Mountain Finance Corp. Q1’26 10-QNew Mountain Finance Corp. Q2’26 10-QOctus’ BDC Database According to New Mountain Finance Corp.’s second-quarter financial filings, loans to dental service providers, Affordable Care Group (ACI Group) and Dental Care Alliance (DCA Investments), restructured during the second quarter, resulted in approximately 45% to 65% debt reduction and three-year maturity extensions to first lien lenders. Recoveries to first lien lenders ranged from 70% to 90% and were generally in line to slightly higher than where positions were marked in the prior quarter. Both companies were owned by Harvest Partners. However, it is unclear if Harvest Partners retained any equity stakes in the restructured companies. Dental Care Alliance announced that it completed the debt restructuring in June, saying that it reduced debt by $1.1 billion and secured $95 million in new capital, though the announcement doesn’t specify whether this capital came in the form of equity, new debt, or some other structure. However, based on New Mountain Finance’s reports, it does not appear that the new capital affected our recovery or debt reduction calculations. Similarly, Affordable Care’s restructuring was reported in May, signaling the two-tiered capital structure, discussed below. The report also suggested a new $75 million capital facility.[...]