What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-14 compared with 2023-03-16 · 81 added, 86 removed, 370 unchanged (31% of the section changed)

3 unchanged sentences

Amounts and percentages presented herein may have been rounded for presentation and all dollar amounts, excluding share and per share amounts, are presented in thousands unless otherwise noted.

In addition, all share and per share amounts have been retroactively adjusted to reflect the Reverse Stock Split, which became effective on September 21, 2021.

In addition, all share and per share amounts for 2021 have been retroactively adjusted to reflect the Reverse Stock Split, which became effective on September 21, 2021.

We were incorporated under the general corporation laws of the State of Maryland on August 9, 2011 and commenced operations on December 17, 2012 upon raising proceeds of $2,500 from persons not affiliated with us, CIM or its affiliates.

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The Listing accomplished our goal of providing our shareholders with greatly enhanced liquidity.

On February 26, 2023, our shares of common stock also listed and commenced trading on the TASE under the ticker symbol “CION”.

On February 26, 2023, our shares of common stock and our Series A Notes listed and commenced trading in Israel on the TASE under the ticker symbol “CION” and "CION B1", respectively.

We are managed by CIM, our affiliate and a registered investment adviser.

Pursuant to an investment advisory agreement with us, CIM oversees the management of our activities and is responsible for making investment decisions for our portfolio.

On April 5, 2021, our board of directors, including a majority of directors who are not interested persons, approved the amended and restated investment advisory agreement with CIM for a period of twenty four months, which was subsequently approved by shareholders on August 9, 2021 (as described in further detail below).

On August 7, 2023, our board of directors, including a majority of the board of directors who are not interested persons, approved the renewal of the second amended and restated investment advisory agreement with CIM for a period of twelve months, commencing August 9, 2023.

We have also entered into an administration agreement with CIM to provide us with administrative services necessary for us to operate.

We and CIM previously engaged AIM to act as our investment sub-adviser.

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All of our investment decisions are the sole responsibility of, and are made at the sole discretion of, CIM's investment committee, which consists entirely of CIG senior personnel.

The amended and restated investment advisory agreement was approved by shareholders on August 9, 2021 at our reconvened 2021 annual meeting of shareholders.

As a result, on August 10, 2021, we and CIM entered into the amended and restated investment advisory agreement in order to implement the change to the calculation of the subordinated incentive fee payable from us to CIM that expresses the hurdle rate required for CIM to earn, and be paid, the incentive fee as a percentage of our net assets rather than adjusted capital.

Upon the occurrence of the Listing on October 5, 2021, we and CIM entered into the second amended and restated investment advisory agreement in order to implement the changes to the advisory fees payable from us to CIM that (i) reduced the annual base management fee, (ii) amended the structure of the subordinated incentive fee on income payable from us to CIM and reduced the hurdle and incentive fee rates, and (iii) reduced the incentive fee on capital gains payable from us to CIM (as described in further detail in Notes 2 and 4 to our consolidated financial statements included in this report).

17 unchanged sentences

Recent Developments

Series A Notes

On February 28, 2023, we entered into the Deed of Trust with Mishmeret Trust Company Ltd., as trustee, under which we issued approximately $80.7 million in aggregate principal amount of our Series A Notes.

The Series A Notes offering in Israel closed on February 28, 2023 and the Series A Notes listed and commenced trading on the TASE on February 28, 2023.

After the deduction of fees and other offering expenses, we received net proceeds of approximately $77.9 million, which we intend to use to make investments in portfolio companies in accordance with our investment objectives and for working capital and general corporate purposes.

The Series A Notes are rated A1.il by Midroog Ltd., an affiliate of Moody’s.

The Series A Notes will mature on August 31, 2026 and may be redeemed in whole or in part at our option at par plus a “make-whole” premium, if applicable, as set forth in the Deed of Trust.

The Series A Notes bear interest at a rate equal to SOFR plus a credit spread of 3.82% per year, which will be paid quarterly on February 28, May 31, August 31, and November 30 of each year, commencing on May 31, 2023.

The Series A Notes are our general unsecured obligations that rank senior in right of payment to all of our existing and future indebtedness that is expressly subordinated in right of payment to the Series A Notes, rank pari passu with all our existing and future unsecured unsubordinated indebtedness, rank effectively junior to any of our secured indebtedness (including unsecured indebtedness that we later secure) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by our subsidiaries, financing vehicles or similar facilities.

The Deed of Trust contains other terms and conditions, including, without limitation, affirmative and negative covenants such as (i) information reporting, (ii) maintenance of our status as a business development company within the meaning of the 1940 Act, (iii) minimum shareholders’ equity of $525 million, (iv) a minimum asset coverage ratio of not less than 150%, and (v) an unencumbered asset coverage ratio of 1.25 to 1.00.

In addition, the Deed of Trust contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under our other indebtedness in an outstanding aggregate principal amount of at least $50 million, certain judgments and orders, and certain events of bankruptcy.

Q1 2024 Regular Distribution

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Floating interest rate investments $ 1,521,848 $ 1,475,126 80.1 % $ 1,539,214 $ 1,477,630 84.5 %

Fixed interest rate investments 166,297 157,006 9.0 % 176,326 172,162 10.3 %

Non-income producing investments 154,419 184,175 10.0 % 76,061 104,619 6.0 %

Fixed interest rate investments 155,244 131,533 7.2 % 166,297 157,006 9.0 %

Other income producing investments 30,673 49,990 2.7 % 11,168 9,906 0.5 %

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Diversified & Production 135,037 7.3 % 134,927 7.7 %

Consumer 115,849 6.6 % 119,365 7.2 %

Advertising, Printing & Publishing 105,375 6.0 % 94,610 5.7 %

Diversified Financials 99,819 5.7 % 101,032 6.1 %

Retail 135,000 7.3 % 74,718 4.3 %

Advertising, Printing & Publishing 116,100 6.3 % 105,375 6.0 %

Consumer 107,195 5.8 % 115,849 6.6 %

Oil & Gas 104,893 5.7 % 68,756 3.9 %

Construction & Building 104,727 5.7 % 46,007 2.6 %

Diversified Financials 85,733 4.7 % 99,819 5.7 %

Chemicals, Plastics & Rubber 82,597 4.5 % 66,753 3.8 %

Beverage, Food & Tobacco 68,780 3.7 % 45,396 2.6 %

Consumer Goods:

Durable 59,955 3.3 % 60,735 3.5 %

High Tech Industries 56,501 3.2 % 65,544 3.9 %

Consumer Goods:

Non-Durable 47,886 2.8 % 45,682 2.7 %

Hotel, Gaming & Leisure 46,739 2.7 % 50,855 3.0 %

Construction & Building 46,007 2.6 % 27,585 1.7 %

Beverage, Food & Tobacco 45,396 2.6 % 49,054 2.9 %

Banking, Finance, Insurance & Real Estate 52,272 2.8 % 43,836 2.5 %

Hotel, Gaming & Leisure 50,906 2.8 % 46,739 2.7 %

Capital Equipment 49,571 2.7 % 41,580 2.4 %

Aerospace & Defense 38,842 2.2 % 38,279 2.3 %

Consumer Goods:

Non-Durable 42,381 2.3 % 47,886 2.8 %

High Tech Industries 22,671 1.2 % 56,501 3.2 %

Containers, Packaging & Glass 18,480 1.0 % 19,551 1.1 %

Telecommunications 17,768 1.0 % 18,302 1.1 %

Automotive 16,255 0.9 % 14,367 0.9 %

Environmental Industries 15,336 0.8 % — —

Metals & Mining 13,957 0.8 % 15,780 0.9 %

Automotive 12,403 0.7 % 16,255 0.9 %

Transportation:

Cargo 12,201 0.7 % 12,417 0.7 %

Aerospace & Defense 12,000 0.6 % 38,842 2.2 %

Subtotal/total percentage 1,840,824 100.0 % 1,749,161 100.0 %

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Net investment income after taxes 105,022 88,205

Net realized (loss) gain on investments and foreign currency (32,750) 840

Net change in unrealized (depreciation) appreciation on investments (5,314) 43,617

Net realized loss on investments and foreign currency (31,927) (32,750)

Net change in unrealized appreciation (depreciation) on investments 22,219 (5,314)

Net increase in net assets resulting from operations $ 95,314 $ 50,141

1 unchanged sentence

For the years ended December 31, 2023 and 2022, we generated investment income of $251,010 and $194,898, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 113 and 128 portfolio companies held during each respective period.

Our average investment portfolio size, excluding our short term investments, increased $126,694, from $1,580,948 for the year ended December 31, 2021 to $1,707,642 for the year ended December 31, 2022.

In addition, higher LIBOR and SOFR rates during the year ended December 31, 2022 compared to the year ended December 31, 2021 also contributed to the increase in interest income generated on our investments.

Higher LIBOR and SOFR rates during the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily contributed to the increase in interest income generated on our investments.

In addition, certain of our equity investments paid large dividends during the year ended December 31, 2023, increasing dividend income to $8,406 from $1,457 during the year ended December 31, 2022.

Operating Expenses and Income Taxes

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Interest expense 85,556 49,624

Income tax expense, including excise tax 372 342

Income tax (benefit) expense, including excise tax (54) 372

Total operating expenses and income taxes $ 145,988 $ 106,693

The increase in interest expense was primarily the result of (a) higher average borrowings under our financing arrangements during the year ended December 31, 2022 compared to the year ended December 31, 2021, and (b) higher LIBOR and SOFR rates during the year ended December 31, 2022 compared to the year ended December 31, 2021.

The increase in subordinated incentive fee on income was primarily the result of entering into (i) the amended and restated investment advisory agreement in August 2021, which changed the calculation of the subordinated incentive fee to express the hurdle rate required for CIM to earn, and be paid, the incentive fee as a percentage of our net assets rather than adjusted capital, and (ii) the second amended and restated investment advisory agreement in October 2021, which reduced the hurdle rate applicable to the subordinated incentive fee.

The decrease in management fees was also primarily due to entering into the second amended and restated investment advisory agreement in October 2021, which among other things, reduced the annual rate from 2.0% to 1.5%, and further to 1.0% of our average gross assets purchased with leverage resulting in our asset coverage ratio dropping below 200%.

The increase in interest expense was primarily the result of (a) higher LIBOR and SOFR rates during the year ended December 31, 2023 compared to the year ended December 31, 2022, and (b) higher average borrowings under our financing arrangements during the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase in subordinated incentive fee on income was primarily the result of the increase in investment income during the year ended December 31, 2023 compared to the year ended December 31, 2022, which was partially offset by the increase in interest expense during the year ended December 31, 2023 compared to the year ended December 31, 2022.

The composition of our general and administrative expenses for the years ended December 31, 2023 and 2022 was as follows:

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Transfer agent expense 911 1,124

Insurance expense 833 612

Valuation expense 853 821

Dues and subscriptions 800 791

Printing and marketing expense 708 990

Director fees and expenses 696 632

Insurance expense 675 833

Accounting and administrative costs 637 524

Printing and marketing expense 351 708

Other expenses 281 67

Total general and administrative expense $ 7,382 $ 7,278

The decrease in general and administrative expenses was primarily the result of lower nonrecurring professional fees incurred during the year ended December 31, 2021 associated with the Listing.

Net Investment Income After Taxes

Our net investment income after taxes totaled $105,022 and $88,205 for the years ended December 31, 2023 and 2022, respectively.

The increase in net investment income was a result of an increase in our investment income during the year ended December 31, 2022 as compared to the year ended December 31, 2021, which was partially offset by an increase in our operating expenses during the same period, which was driven primarily by increases in the subordinated incentive fee on income and interest expense.

Net Realized (Loss) Gain on Investments and Foreign Currency

Our net realized (loss) gain on investments and foreign currency totaled $(32,750) and $840 for the years ended December 31, 2022 and 2021, respectively.

This change was driven primarily by the write-off of certain investments during the year ended December 31, 2022 as compared to fewer investment write-offs during the year ended December 31, 2021.

Net Change in Unrealized (Depreciation) Appreciation on Investments

The net change in unrealized (depreciation) appreciation on our investments totaled $(5,314) and $43,617 for the years ended December 31, 2022 and 2021, respectively.

This change was driven primarily by the underperformance of certain investments during the year ended December 31, 2022, which was partially offset by the realization of previously unrealized losses due to the write-off of certain investments.

This is compared to tightening credit spreads and increased multiples in equity markets during the year ended December 31, 2021 that positively impacted the fair value of certain of our investments.

The increase in net investment income was a result of an increase in our investment income during the year ended December 31, 2023 as compared to the year ended December 31, 2022, which was partially offset by an increase in our operating expenses during the same period, which was driven primarily by increases in interest expense and the subordinated incentive fee on income.

Net Realized Loss on Investments and Foreign Currency

Our net realized loss on investments and foreign currency totaled $(31,927) and $(32,750) for the years ended December 31, 2023 and 2022, respectively.

During the year ended December 31, 2023, net realized losses were driven primarily by the restructure of certain investments while net realized losses during the year ended December 31, 2022 were driven primarily by the write-off of certain investments.

Net Change in Unrealized Appreciation (Depreciation) on Investments

The net change in unrealized appreciation (depreciation) on our investments totaled $22,219 and $(5,314) for the years ended December 31, 2023 and 2022, respectively.

This change was driven primarily by mark-to-market price changes on certain investments during the year ended December 31, 2023.

During the year ended December 31, 2022, unrealized depreciation was driven primarily by the underperformance of certain investments, which was partially offset by the realization of previously unrealized losses due to the write-off of certain investments.

Net Increase in Net Assets Resulting from Operations

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Net investment income after taxes 88,205 74,307

Net realized gain (loss) on investments and foreign currency 840 (69,872)

Net change in unrealized appreciation (depreciation) on investments 43,617 (19,878)

Net increase (decrease) in net assets resulting from operations $ 118,764 $ (11,022)

Net realized (loss) gain on investments and foreign currency (32,750) 840

Net change in unrealized (depreciation) appreciation on investments (5,314) 43,617

Net increase in net assets resulting from operations $ 50,141 $ 118,764

Investment Income

For the years ended December 31, 2022 and 2021, we generated investment income of $194,898 and $157,348, respectively, consisting primarily of interest income on investments in senior secured debt, collateralized securities and structured products, and unsecured debt of 128 and 153 portfolio companies held during each respective period.

Our average investment portfolio size, excluding our short term investments, decreased $34,712, from $1,615,660 during the year ended December 31, 2020 to $1,580,948 during the year ended December 31, 2021.

Additionally, the higher average LIBOR during the year ended December 31, 2020 as compared to the year ended December 31, 2021 also contributed to the decrease in interest income.

Our average investment portfolio size, excluding our short term investments, increased $126,694, from $1,580,948 during the year ended December 31, 2021 to $1,707,642 during the year ended December 31, 2022.

Operating Expenses and Income Taxes

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Total operating expenses and income taxes $ 106,693 $ 83,041

The decrease in interest expense was primarily the result of lower borrowing costs incurred on our financing arrangements during the year ended December 31, 2021 as compared to the year ended December 31, 2020.

The composition of our general and administrative expenses for the years ended December 31, 2022 and 2021 was as follows:

2 unchanged sentences

Transfer agent expense 1,124 1,290

Printing and marketing expense 990 378

Valuation expense 904 999

Accounting and administrative costs 759 680

Insurance expense 833 612

Director fees and expenses 516 450

Valuation expense 821 904

Dues and subscriptions 791 411

Printing and marketing expense 708 990

Director fees and expenses 632 516

Accounting and administrative costs 524 759

Other expenses 67 109

Total general and administrative expense $ 7,278 $ 9,805

The increase in general and administrative expenses was primarily the result of higher nonrecurring professional fees incurred during the year ended December 31, 2021 associated with the Listing.

The decrease in general and administrative expenses was primarily the result of higher nonrecurring professional fees incurred during the year ended December 31, 2021 associated with the Listing.

Net Investment Income After Taxes

Our net investment income after taxes totaled $88,205 and $74,307 for the years ended December 31, 2022 and 2021, respectively.

The decrease in net investment income after taxes was primarily due to a decrease in our investment income during the year ended December 31, 2021 as compared to the year ended December 31, 2020, which was partially offset by a decrease in operating expenses during the year ended December 31, 2021.

Net Realized Gain (Loss) on Investments and Foreign Currency

Our net realized gain (loss) on investments and foreign currency totaled $840 and $(69,872) for the years ended December 31, 2021 and 2020, respectively.

This change was driven primarily by fewer restructurings of our investments during the year ended December 31, 2021 as compared to the year ended December 31, 2020.

Net Change in Unrealized Appreciation (Depreciation) on Investments

The net change in unrealized appreciation (depreciation) on our investments totaled $43,617 and $(19,878) for the years ended December 31, 2021 and 2020, respectively.

This change was driven primarily by tightening credit spreads and increased multiples in equity markets during the year ended December 31, 2021 that positively impacted the fair value of certain of our investments, as compared to the outbreak and spread of COVID-19 around the world during the year ended December 31, 2020, which caused significant uncertainty and volatility in the U.S.

and global economies as well as in the financial and credit markets and negatively impacted the fair value of certain of our investments.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the year ended December 31, 2021, we recorded a net increase in net assets resulting from operations of $118,764 as compared to a net decrease in net assets resulting from operations of $(11,022) for the year ended December 31, 2020 as a result of our operating activity for the respective periods.

The increase in net investment income was a result of an increase in our investment income during the year ended December 31, 2022 as compared to the year ended December 31, 2021, which was partially offset by an increase in our operating expenses during the same period that was driven primarily by increases in the subordinated incentive fee on income and interest expense.

Net Realized (Loss) Gain on Investments and Foreign Currency

Our net realized (loss) gain on investments and foreign currency totaled $(32,750) and $840 for the years ended December 31, 2022 and 2021, respectively.

This change was driven primarily by the write-off of certain investments during the year ended December 31, 2022 as compared to fewer investment write-offs during the year ended December 31, 2021.

Net Change in Unrealized (Depreciation) Appreciation on Investments

The net change in unrealized (depreciation) appreciation on our investments totaled $(5,314) and $43,617 for the years ended December 31, 2022 and 2021, respectively.

In contrast, during the year ended December 31, 2021, tightening credit spreads and increased multiples in equity markets positively impacted the fair value of certain of our investments.

Net Increase in Net Assets Resulting from Operations

For the years ended December 31, 2022 and 2021, we recorded a net increase in net assets resulting from operations of $50,141 and $118,764, respectively, as a result of our operating activity for the respective periods.

Financial Condition, Liquidity and Capital Resources

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As a result, we also generate cash from our existing financing arrangements and may generate cash from future borrowings, as well as future offerings of securities including public and/or private issuances of debt and/or equity securities.

We use cash primarily to (i) purchase investments in new and existing portfolio companies, (ii) pay for the cost of operations (including paying or reimbursing CIM), (iii) make debt service payments related to any of our financing arrangements and (iv) pay cash distributions to the holders of our shares.

We use cash primarily to (i) purchase investments in new and existing portfolio companies, (ii) pay for the cost of operations (including paying advisory fees to and reimbursing CIM), (iii) make debt service payments related to any of our financing arrangements and (iv) pay cash distributions to the holders of our shares.

On March 23, 2018, an amendment to Section 61(a) of the 1940 Act was signed into law to permit BDCs to reduce the minimum “asset coverage” ratio from 200% to 150% and, as a result, to potentially increase the ratio of a BDC’s debt to equity from a maximum of 1-to-1 to a maximum of 2-to-1, so long as certain approval and disclosure requirements are satisfied.

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As of December 31, 2023 and 2022, our asset coverage ratio was 1.81 and 1.92, respectively.

We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage.

We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage and liquidity requirements.

On September 15, 2023, our shareholders authorized us to issue shares of our common stock at prices below the then current NAV per share in one or more offerings for a 12-month period following such shareholder approval.

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Cash and short term investments as of December 31, 2023, taken together with our available debt, is expected to be sufficient for our investing activities and to conduct our operations in the near term.

As of December 31, 2022, we had $72 million available under our financing arrangements.

As of December 31, 2023, we had $153 million available under our secured financing arrangements.

Our short-term cash needs include the funding of additional portfolio investments, the payment of operating expenses including interest expense, management fees, incentive fees, administrative services expense and general and administrative expenses, as well as paying distributions to our shareholders.

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The policy may be suspended or discontinued at any time and does not obligate us to acquire any specific number of shares of our common stock.

On August 16, 2022, as part of the share repurchase policy, we entered into a trading plan with an independent broker, Wells Fargo, in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, based in part on historical trading data with respect to our shares.

On August 29, 2023, as part of the share repurchase policy, we entered into a new trading plan with an independent broker, Wells Fargo, in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, based in part on historical trading data with respect to our shares.

The 10b5-1 trading plan permits common stock to be repurchased at a time that we might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions.

The 10b5-1 trading plan is subject to price, market volume and timing restrictions.

The 10b5-1 trading plan expires on August 29, 2024, and is subject to price, market volume and timing restrictions.

During the year ended December 31, 2023, we repurchased an aggregate of 1,114,848 shares under the 10b5-1 trading plan for an aggregate purchase price of $11,518, or an average purchase price of $10.33 per share.

From January 1, 2024 to March 6, 2024, we repurchased an aggregate of 340,505 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $3,750, or an average purchase price of $11.01 per share.

From the inception of the initial 10b5-1 trading plan in August 2022 through March 6, 2024, we repurchased an aggregate of 3,114,318 shares of common stock under the 10b5-1 trading plan for an aggregate purchase price of $30,714, or an average purchase price of $9.86 per share.

RIC Status and Distributions

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For an additional discussion of our RIC status and distributions, refer to Note 2 and Note 5, respectively, of our consolidated financial statements included in this report.

For an additional discussion of our RIC status, refer to Note 2 of our consolidated financial statements included in this report.

We intend to make distributions in an amount sufficient to maintain RIC status each year and to avoid any federal income taxes on income.

Therefore, subject to applicable legal restrictions and the sole discretion of our board of directors, we intend to authorize, declare, and pay regular distributions on a quarterly basis.

Regular and special distributions in respect of future periods will be evaluated by management and our board of directors based on circumstances and expectations existing at the time of consideration.

Regular and any supplemental and/or special distributions in respect of future periods will be evaluated by management and our board of directors based on circumstances and expectations existing at the time of consideration.

The following table presents distributions per share that were declared during the years ended December 31, 2023, 2022 and 2021:

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Three Months Ended Per Share(1) Amount

March 31, 2020 (thirteen record dates) $ 0.3657 $ 20,793

June 30, 2020 (no record dates) — —

September 30, 2020 (two record dates) 0.1765 10,011

December 31, 2020 (four record dates) 0.5684 32,479

Total distributions for the year ended December 31, 2020 $ 1.1106 $ 63,283

March 31, 2021 (three record dates) $ 0.2648 $ 15,029

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Total distributions for the year ended December 31, 2022 $ 1.4500 $ 81,575

(1) The per share distribution amount has been retroactively adjusted to reflect the Reverse Stock Split as discussed in Note 3 to the consolidated financial statements included in this report.

March 31, 2023 (one record date) $ 0.3400 $ 18,687

June 30, 2023 (one record date) 0.3400 18,614

September 30, 2023 (two record dates) 0.3900 21,276

December 31, 2023 (three record dates) 0.5400 29,290

Total distributions for the year ended December 31, 2023 $ 1.6100 $ 87,867

(1) The per share distribution amount for 2021 has been retroactively adjusted to reflect the Reverse Stock Split as discussed in Note 3 to the consolidated financial statements included in this report.

On March 11, 2024, our co-chief executive officers declared a regular quarterly distribution of $0.34 per share for the first quarter of 2024 payable on March 28, 2024 to shareholders of record as of March 22, 2024.

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JPM Credit Facility

As of December 31, 2022 and March 8, 2023, our aggregate outstanding borrowings under the JPM Credit Facility were $610,000 and $600,000, respectively, and the aggregate unfunded principal amount in connection with the JPM Credit Facility was $65,000 and $75,000, respectively.

As of December 31, 2023 and March 6, 2024, our aggregate outstanding borrowings under the JPM Credit Facility were $550,000 and the aggregate unfunded principal amount in connection with the JPM Credit Facility was $125,000.

For a detailed discussion of our JPM Credit Facility, refer to Note 8 to our consolidated financial statements included in this report.

As of December 31, 2022 and March 8, 2023, our outstanding borrowings under the Amended UBS Facility were $142,500 and $125,000, respectively, and the aggregate unfunded principal amount in connection with the Amended UBS Facility was $7,500 and $25,000, respectively.

As of December 31, 2023 and March 6, 2024, our outstanding borrowings under the Amended UBS Facility were $122,500 and the aggregate unfunded principal amount in connection with the Amended UBS Facility was $27,500.

For a detailed discussion of our Amended UBS Facility, refer to Note 8 to our consolidated financial statements included in this report.

8 unchanged sentences

Series A Notes

As of March 8, 2023, we had approximately $80,700 in aggregate principal amount of Series A Notes outstanding and there was no unfunded principal amount in connection with the Series A Notes.

As of December 31, 2023 and March 6, 2024, we had approximately $114,844 in aggregate principal amount of Series A Notes outstanding and there was no unfunded principal amount in connection with the Series A Notes.

For a detailed discussion of our Series A Notes, refer to Note 8 to our consolidated financial statements included in this report.

As of December 31, 2023 and March 6, 2024, we had $100,000 in aggregate principal amount of 2027 Notes outstanding and there was no unfunded principal amount in connection with the 2027 Notes.

For a detailed discussion of our 2027 Notes, refer to Note 8 to our consolidated financial statements included in this report.

Unfunded Commitments

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We shall promptly (but no later than five business days after we become aware) report to our board of directors in writing on the occurrence of matters that materially affect the fair value of the designated portfolio of investments.

Material matters in this instance include a significant deficiency or material weakness in the design or effectiveness of CIM’s fair value determination process resulting in a material error in the calculation of net asset value of $0.01 per share or greater.

In addition to the foregoing, certain investments for which a market price is not readily available are evaluated on a quarterly basis by an independent valuation firm and certain other investments are on a rotational basis reviewed by an independent valuation firm.

7 unchanged sentences

For a discussion of our relationship with related parties including CIM, CIG, and AIA and amounts incurred under agreements with such related parties, refer to Note 4 to our consolidated financial statements included in this report.

For a discussion of our relationship with CION/EagleTree, refer to Note 7 to our consolidated financial statements included in this report.

Contractual Obligations

On August 26, 2016, 34th Street entered into the JPM Credit Facility with JPM, as amended and restated on September 30, 2016, July 11, 2017, November 28, 2017, May 23, 2018, May 15, 2020, February 26, 2021 and March 28, 2022.

See Note 8 to our consolidated financial statements for a more detailed description of the JPM Credit Facility.

On May 19, 2017, Murray Hill Funding II entered into the UBS Facility with UBS, as amended on December 1, 2017, May 19, 2020, November 12, 2020 and December 17, 2020.

On May 19, 2017, Murray Hill Funding II entered into the UBS Facility with UBS, as amended on December 1, 2017, May 19, 2020, November 12, 2020, December 17, 2020 and June 14, 2023.

See Note 8 to our consolidated financial statements for a more detailed description of the UBS Facility.

7 unchanged sentences

See Note 8 to our consolidated financial statements for a more detailed description of the Deed of Trust and the Series A Notes.

On November 8, 2023, we entered into the 2027 Note Purchase Agreement with purchasers of the 2027 Notes.

See Note 8 to our consolidated financial statements for a more detailed description of the 2027 Notes.

Commitments and Contingencies

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis