New Mountain Capital fund sees discounted loan gain value

8 articles · Updated · Bloomberg · May 5

On a first-quarter earnings call, managers said a loan bought weeks ago at about 65 cents on the dollar now trades roughly 10 cents higher.
The publicly traded New Mountain Finance Corp. said the gain supports a strategy of using cash from discounted asset sales to buy beaten-down debt.
Earlier this year, the fund sold nearly $500 million of assets at a discount and repurchased about $57 million of its own shares.

With defaults projected to soar, is New Mountain's distressed debt strategy a masterstroke or a dangerous gamble on market timing?

The firm reports quick profits yet cuts its dividend. What does this reveal about the underlying health of the private credit market?

After selling assets at a loss to buy distressed loans, how does this counterintuitive strategy create sustainable value for investors?