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Item 1A. Risk Factors

2025-03-13 compared with 2024-03-14 · 141 added, 87 removed, 751 unchanged (23% of the section changed)

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If any of the following risks occur, our business, financial condition and results of operations could be materially adversely affected.

In such case, our NAV and the trading price of our shares of common stock could decline, and you may lose all or part of your investment.

In such case, our NAV and the trading prices of our shares of common stock and our 2029 Notes could decline, and you may lose all or part of your investment.

Risks Relating to Our Business and Structure

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Our board of directors has the authority to modify or waive our current operating policies, investment criteria and strategies without prior notice and without shareholder approval.

We cannot predict the effect any changes to our current operating policies, investment criteria and strategies would have on our business, NAV, operating results or trading price of our common stock.

We cannot predict the effect any changes to our current operating policies, investment criteria and strategies would have on our business, NAV, operating results or trading prices of our common stock and our 2029 Notes.

However, the effects might be adverse, which could negatively impact our ability to pay shareholders distributions and cause shareholders to lose all or part of their investment.

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Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.

We and our portfolio companies are subject to regulation at the local, state and federal level.

New legislation may be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we are permitted to make, any of which could harm us and our shareholders, potentially with retroactive effect.

We and our portfolio companies are subject to laws and regulations at the local, state and federal level.

These laws and regulations, as well as their interpretation, may be changed from time to time, and new legislation may be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we are permitted to make, any of which could harm us and our shareholders, potentially with retroactive effect.

Over the past several years, there also has been increasing regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector may be subject to new regulation.

While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank lending could be materially adverse to our business, financial condition and results of operations.

Regulators are also increasing scrutiny and considering regulation of the use of artificial intelligence technologies.

We cannot predict what, if any, actions may be taken or the impact such actions may have on our business and results of operations.

In June 2024, the U.S.

Supreme Court reversed its longstanding approach under the Chevron doctrine, which provided for judicial deference to regulatory agencies.

As a result of this decision, we cannot be sure whether there will be increased challenges to existing agency regulations or how lower courts will apply the decision in the context of other regulatory schemes without more specific guidance from the U.S.

Supreme Court.

For example, the decision could significantly impact consumer protection, advertising, privacy, artificial intelligence, anti-corruption and anti-money laundering practices and other regulatory regimes with which we and our portfolio companies are or may be required to comply.

Any such regulatory developments could result in uncertainty about and changes in the ways such regulations apply to us and our portfolio companies and may require additional resources to ensure continued compliance.

We cannot predict which, if any, of these actions will be taken or, if taken, their effect on the financial stability of the United States.

Such actions could have a significant adverse effect on our business, financial condition and results of operations.

Additionally, any changes to the laws and regulations governing our operations relating to permitted investments may cause us to alter our investment strategy to avail ourselves of new or different opportunities.

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In the event that we are unable to maintain an effective system of internal controls and maintain compliance with the Sarbanes-Oxley Act and related rules, we may be adversely affected.

Due to our Listing, we are no longer a “non-accelerated filer” as defined in Rule 12b-2 of the Exchange Act and as a result, we are required to comply with the independent auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.

We are required to comply with the independent auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.

Complying with Section 404(b) requires a rigorous compliance program as well as adequate time and resources.

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Under the 1940 Act, we generally are prohibited from issuing or selling our common stock at a price per share, after deducting selling commissions and dealer manager fees, that is below our NAV per share, which may be a disadvantage as compared with other public companies.

However, in 2023 we obtained, and in 2024 we intend to again seek, the approval of our shareholders to issue shares of our common stock at prices below the then current NAV per share of our common stock in accordance with the 1940 Act.

However, in 2024 we obtained the approval of our shareholders to issue until August 27, 2025, shares of our common stock at prices below the then current NAV per share of our common stock in accordance with the 1940 Act.

We may also, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the current NAV of our common stock if our board of directors, including our independent directors, determine that such sale is in our best interests and the best interests of our shareholders, and our shareholders, as well as those shareholders that are not affiliated with us, approve such sale.

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if we cannot obtain debt or equity financing on acceptable terms, our ability to acquire investments and to expand our operations will be adversely affected.

We will need to periodically access the capital markets to raise cash to fund new investments in excess of our repayments, and we may also need to access the capital markets to refinance existing debt obligations to the extent such maturing obligations are not repaid with availability under our secured credit facilities, which include the JPM Credit Facility and the UBS Facility, or cash flows from operations.

Our working capital is used for our investment opportunities, operating expenses and for payment of various fees and expenses such as base management fees, incentive fees and other expenses.

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However, we will be subject to the diversification requirements applicable to RICs under Subchapter M of the Code.

Increasing scrutiny from stakeholders and regulators with respect to ESG matters and corporate social responsibility may impose additional costs and expose us to additional risks.

Our business (including that of our portfolio companies) faces increasing public scrutiny related to environmental, social and governance, or ESG, activities, which are increasingly considered to contribute to reducing a company’s operational risk, market risk and reputational risk, which may in turn impact the long-term sustainability of a company’s performance.

Increasing scrutiny from stakeholders and regulators with respect to ESG matters may impose additional costs and expose us to additional risks.

Our business (including that of our portfolio companies) faces increasing public scrutiny related to environmental, social and governance, or ESG, activities.

A variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicized.

In addition, investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG ratings and measures to their investment decisions.

Our brand and reputation may be negatively impacted if we fail to act responsibly in a number of areas, including, but not limited to, diversity, equity and inclusion, human rights, climate change and environmental stewardship, support for local communities, corporate governance, and transparency and consideration of ESG factors in our investment processes.

Adverse incidents with respect to ESG activities could impact the value of our brand, our relationship with existing and future portfolio companies, the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations.

However, regional and investor specific sentiment may differ in what constitutes a material positive or negative ESG corporate practice.

There is no guarantee that our ESG and sustainability practices will uniformly fit every investor’s definition of best practices for all ESG considerations across geographies and investor types.

If our ESG performance does not meet the standards set by such investors or our shareholders, they may choose to exclude our securities from their investments.

In addition, investment in funds that specialize in companies that perform well in such assessments remain popular, and major institutional investors have publicly discussed their consideration of such ESG ratings and measures in making their investment decisions.

“Anti-ESG” sentiment has gained momentum across the U.S., with a growing number of states, federal agencies, the executive branch and Congress having enacted, proposed or indicated an intent to pursue “anti-ESG” policies, legislation or issued related legal opinions and engaged in related investigations and litigation.

If investors subject to “anti-ESG” legislation view CIM’s responsible investing or ESG practices as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, such investors may not invest in us and it could negatively impact the price of our common stock.

In addition, corporate diversity, equity and inclusion, or DEI, practices have recently come under increasing scrutiny.

For example, some advocacy groups and federal and state officials have asserted that the U.S.

Supreme Court’s decision striking down race-based affirmative action in higher education in June 2023 should be analogized to private employment matters and private contract matters and several media campaigns and cases alleging discrimination based on such arguments have been initiated since the decision.

Additionally, in January 2025, President Trump signed a number of Executive Orders focused on DEI, which indicate continued scrutiny of DEI initiatives and potential related investigations of certain private entities with respect to DEI initiatives, including publicly traded companies.

If we do not successfully manage expectations across varied stakeholder interests, it could erode stakeholder trust, impact our reputation and constrain our investment opportunities.

Additionally, new regulatory initiatives related to ESG that are applicable to us and our portfolio companies could adversely affect our business.

For example, in May 2018, the European Commission adopted an “action plan on financing sustainable growth.” The action plan is, among other things, designed to define and reorient investment toward sustainability.

The action plan contemplates:

Such scrutiny of both ESG and DEI related practices could expose CIM to the risk of litigation, investigations or challenges by federal or state authorities or result in reputational harm.

Additionally, certain regulations related to ESG that are applicable to us and our portfolio companies could adversely affect our business.

For example, the European Commission's “action plan on financing sustainable growth” is, among other things, designed to define and reorient investment toward more sustainable economic activity.

The action plan contemplates, among other things:

establishing European Union, or EU, labels for green financial products;

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increasing disclosure requirements in the financial services sector around ESG and strengthening the transparency of companies on their ESG policies and introducing a ‘green supporting factor’ in the EU prudential rules for banks and insurance companies to incorporate climate risks into banks’ and insurance companies’ risk management policies.

Moreover, on January 5, 2023, the Corporate Sustainability Reporting Directive, or CSRD, came into effect.

The CSRD amends and strengthens the rules introduced on sustainability reporting for companies, banks and insurance companies under the Non-Financial Reporting Directive (2014/95/EU), or NFRD.

The CSRD requires a much broader range of companies, including non-EU companies with significant turnover and a legal presence in EU markets, to produce detailed and prescriptive reports on sustainability-related matters within their financial statements.

There can be no assurance that adverse developments with respect to CSRD will not adversely affect our assets or the returns from those assets.

One or more of our portfolio companies may fall within the scope of CSRD and this may lead to increased management burdens and costs.

There is a risk that a significant reorientation in the market following the implementation of these and further measures could be adverse to our portfolio companies if they are perceived to be less valuable as a consequence of, e.g., their carbon footprint or “greenwashing” (i.e., the holding out of a product as having green or sustainable characteristics where this is not, in fact, the case).

We and our portfolio companies are subject to the risk that similar measures might be introduced in other jurisdictions in the future .

There is also a growing regulatory interest across jurisdictions in improving transparency regarding the definition, measurement and disclosure of ESG factors in order to allow investors to validate and better understand sustainability claims.

In 2021, the SEC established an enforcement task force to look into ESG practices and disclosures by public companies and investment managers and has started to bring enforcement actions based on ESG disclosures not matching actual investment processes.

Further, in 2022, the SEC issued a proposed rule regarding the enhancement and standardization of mandatory climate-related disclosures for investors that would mandate extensive disclosure of climate-related data, risks, and opportunities for certain public companies.

In addition, the SEC has announced that it is working on proposals for mandatory disclosure of certain ESG-related matters, including with respect to board diversity and human capital management.

At this time, there is uncertainty regarding the scope of such proposals or when they would become effective (if at all).

Compliance with any new laws or regulations increases our regulatory burden and could make compliance more difficult and expensive, affect the manner in which we or our portfolio companies conduct our businesses and adversely affect our profitability .

There is also regulatory interest across jurisdictions in improving transparency regarding the definition, measurement and disclosure of ESG factors in order to allow investors to validate and better understand sustainability claims.

For example, the SEC sometimes reviews compliance with ESG commitments in examinations and has taken enforcement actions against registered investment advisers for not establishing adequate or consistently implementing ESG policies and procedures to meet ESG commitments to investors.

In March 2024, the SEC adopted rules aimed at enhancing and standardizing climate-related disclosures;

however, these rules were stayed pending the outcome of consolidated legal challenges in the Eighth Circuit Court of Appeals.

At the state level, in October 2023, California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2, and 3 greenhouse gas emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures.

Compliance with any new laws or regulations increases our regulatory burden and could result in increased legal, accounting and compliance costs, make some activities more difficult, time-consuming and costly, affect the manner in which we or our portfolio companies conduct our businesses and adversely affect our profitability .

Risks Relating to Our Investments

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Below-Investment Grade Debt Securities .

In addition, we invest in debt securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated.

In addition, we invest in debt securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated (rated lower than “Baa3” by Moody’s Investors Service, lower than “BBB-” by Fitch Ratings or lower than “BBB-” by Standard & Poor’s Ratings Services).

Debt securities rated below investment grade quality are generally regarded as having predominantly speculative characteristics and may carry a greater risk with respect to a borrower’s capacity to pay interest and repay principal.

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As a result, a portfolio company may make decisions that could decrease the value of our portfolio holdings.

Our financial condition and results of operations could be negatively affected if a significant investment fails to perform as expected.

Our investment portfolio includes investments that may be significant individually or in the aggregate.

If a significant investment in one or more companies fails to perform as expected, such a failure could have a material adverse effect on our business, financial condition and operating results, and the magnitude of such effect could be more significant than if we had further diversified our portfolio.

Our investment portfolio includes our investment in David’s Bridal, LLC, which as of December 31, 2024, represented 6.4% of our total portfolio at fair value.

In addition, for the year ended December 31, 2024, approximately 4.3% of our total investment income was earned from our investment in David’s Bridal, LLC.

For more information, see our consolidated schedules of investments as of December 31, 2024 and 2023 included in this report.

We are exposed to risks associated with changes in interest rates, including the current high interest rate environment.

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General interest rate fluctuations may have a substantial negative impact on our investments and investment returns and, accordingly, may have a material adverse effect on our ability to achieve our investment objective and our target rate of return on invested capital.

In addition, an increase in interest rates would make it more expensive to use debt for our financing needs.

In addition, an increase in interest rates or otherwise high interest rates would make it more expensive to use debt for our financing needs.

Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from our performance to the extent we are exposed to such interest rates and/or volatility.

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In an effort to combat inflation, the Federal Reserve increased the federal funds rate in 2023.

Although the Federal Reserve left its benchmark rates steady in the fourth quarter of 2023, it has indicated that additional rate increases in the future may be necessary to mitigate inflationary pressures and there can be no assurance that the Federal Reserve will not make upwards adjustments to the federal funds rate in the future.

However, there are reports that the Federal Reserve may begin to cut the benchmark rates in 2024.

Although the Federal Reserve decreased the federal funds rate for three consecutive quarters in 2024, it paused a further reduction in January for the first quarter of 2025.

Also, it has indicated that additional rate increases in the future may be necessary to mitigate inflationary pressures and there can be no assurance that the Federal Reserve will not make upwards adjustments to the federal funds rate in the future.

If general interest rates remain high, there is a risk that the portfolio companies in which we hold floating rate securities will be unable to pay high interest amounts, which could result in a default under their loan documents with us.

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Inflation has adversely affected and may continue to adversely affect the business, results of operations and financial condition of our portfolio companies .

Certain of our portfolio companies are in industries that have been impacted by inflation.

Although the U.S.

inflation rate has decreased in the fourth quarter of 2023, it remains well above the historic levels over the past several decades.

Certain of our portfolio companies are in industries that have been or may be impacted by inflation.

inflation rate has fluctuated throughout 2024 and early 2025, and it remains well above the historic levels over the past several decades.

Inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and certain of our portfolio companies’ operations.

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In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of those investments.

Any decreases in the fair value of our investments could result in future unrealized losses and therefore reduce our net assets resulting from operations.

Any decreases in the fair value of our investments could result in future realized or unrealized losses and therefore reduce our net assets resulting from operations.

While the United States and other developed economies are experiencing higher-than-normal inflation rates, it remains uncertain whether substantial inflation will be sustained over an extended period of time or have a significant effect on the U.S.

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A decrease in the general level of interest rates can be expected to lead to lower interest rates applicable to our portfolio investments and lower net investment income available for distributions to shareholders.

In addition to regulatory requirements that restrict our ability to raise capital, the JPM Credit Facility, the UBS Facility, the 2026 Notes, the More Term Loans, the Series A Notes and the 2027 Notes contain various covenants that, if not complied with, could accelerate repayment under such secured and unsecured borrowings, thereby materially and adversely affecting our liquidity, financial condition and results of operations.

The agreements governing the JPM Credit Facility, the UBS Facility, the 2026 Notes, the More Term Loans, the Series A Notes and the 2027 Notes require us to comply with certain financial and operational covenants.

In addition to regulatory requirements that restrict our ability to raise capital, the JPM Credit Facility, the 2025 UBS Credit Facility, the 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes contain various covenants that, if not complied with, could accelerate repayment under such secured and unsecured borrowings, thereby materially and adversely affecting our liquidity, financial condition and results of operations.

The agreements governing the JPM Credit Facility, the 2025 UBS Credit Facility, the 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes require us to comply with certain financial and operational covenants.

These covenants may include, among other things:

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• maintenance of a minimum level of shareholders’ equity.

As of the date of this Annual Report, we are in compliance in all material respects with the covenants of the JPM Credit Facility, the UBS Facility, the 2026 Notes, the More Term Loans, the Series A Notes and the 2027 Notes.

As of the date of this Annual Report, we are in compliance in all material respects with the covenants of the JPM Credit Facility, the 2025 UBS Credit Facility, the 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes.

However, our continued compliance with these covenants depends on many factors, some of which are beyond our control.

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Any such increase could result in our inability to comply with our obligation to restrict the level of indebtedness that we are able to incur in relation to the value of our assets or to maintain a minimum level of shareholders’ equity.

Accordingly, although we believe we will continue to be in compliance, there are no assurances that we will continue to comply with the covenants in the JPM Credit Facility, the UBS Facility, the 2026 Notes, the More Term Loans, the Series A Notes and the 2027 Notes.

Accordingly, although we believe we will continue to be in compliance, there are no assurances that we will continue to comply with the covenants in the JPM Credit Facility, the 2025 UBS Credit Facility, the 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes.

Failure to comply with these covenants could result in a default under such secured and unsecured borrowings, that, if we were unable to obtain a waiver from the lenders or holders of such indebtedness, as applicable, such lenders or holders could accelerate repayment under such indebtedness and thereby have a material adverse impact on our business, financial condition and results of operations.

The 2026 Notes, the More Term Loans, the Series A Notes and the 2027 Notes are unsecured and therefore are effectively subordinated to any secured indebtedness we have currently incurred or may incur in the future.

The 2026 Notes, the 2021 More Term Loan, the 2022 More Term Loan, the Series A Notes and the 2027 Notes are generally not secured by any of our assets or any of the assets of our subsidiaries.

As a result, the 2026 Notes, the 2021 More Term Loan, the 2022 More Term Loan, the Series A Notes and the 2027 Notes are effectively subordinated to any secured indebtedness we or our subsidiaries have currently incurred and may incur in the future (or any indebtedness that is initially unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness.

In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the 2026 Notes, the 2021 More Term Loan, the 2022 More Term Loan, the Series A Notes and the 2027 Notes.

As a result, the indebtedness under the JPM Credit Facility and the UBS Facility is therefore effectively senior in right of payment to our 2026 Notes, the 2021 More Term Loan, the 2022 More Term Loan, the Series A Notes and the 2027 Notes to the extent of the value of such assets.

The 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes are unsecured and therefore are effectively subordinated to any secured indebtedness we have currently incurred or may incur in the future.

The 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes are generally not secured by any of our assets or any of the assets of our subsidiaries.

As a result, the 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes are effectively subordinated to any secured indebtedness we or our subsidiaries have currently incurred and may incur in the future (or any indebtedness that is initially unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness.

In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes.

As a result, the indebtedness under the JPM Credit Facility and the 2025 UBS Credit Facility is therefore effectively senior in right of payment to our 2026 Notes, the 2024 and 2022 Term Loans, the Series A Notes, the 2027 Notes and the 2029 Notes to the extent of the value of such assets.

Federal Income Tax Risks

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We may not complete our analysis of our internal control over financial reporting in a timely manner, or our internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

Due to the Listing, we are required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act beginning with our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

We are required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

Complying with Section 404 requires a rigorous compliance program as well as adequate time and resources.

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If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to attest to management’s report on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on the price of our common stock.

In 2023 we obtained, and in 2024 we intend to seek, the approval of our shareholders to issue shares of our common stock at prices below the then current NAV per share of our common stock.

If we issue such shares and again receive such approval from shareholders in the future, we may issue shares of our common stock at a price below the then current NAV per share of common stock.

In 2024 we obtained the approval of our shareholders to issue until August 27, 2025, shares of our common stock at prices below the then current NAV per share of our common stock.

If we issue such shares or otherwise receive such approval from shareholders in the future, we may issue shares of our common stock at a price below the then current NAV per share of common stock.

Any such issuance could materially dilute your interest in our common stock and reduce our NAV per share and potentially the trading price of our common stock.

In September 2023, we obtained approval from our shareholders authorizing us to issue shares of our common stock at prices below the then current NAV per share of our common stock in one or more offerings for a 12-month period.

In August 2024, we obtained approval from our shareholders authorizing us to issue shares of our common stock at prices below the then current NAV per share of our common stock in one or more offerings for a 12-month period.

We have not issued any such shares as of the date of this report.

In 2024, we intend to seek to obtain from our shareholders and they may approve a proposal that again authorizes us to issue shares of our common stock at prices below the then current NAV per share of our common stock in one or more offerings for a 12-month period.

In the future, we may seek to obtain from our shareholders and they may approve a proposal that again authorizes us to issue shares of our common stock at prices below the then current NAV per share of our common stock in one or more offerings for a 12-month period.

Such approval would allow us to access the capital markets in a way that we were previously unable to do as a result of restrictions that, absent shareholder approval, apply to BDCs under the 1940 Act.

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Each shareholder is urged to consult its own tax advisors with respect to the tax and tax filing consequences, if any, in its jurisdiction of tax residence of an investment in us, as well as any other jurisdiction in which such shareholder is subject to taxation.

Risks Relating to an Investment in Our Public 2029 Notes

An active trading market for the 2029 Notes may not exist, which could limit a holder’s ability to sell the 2029 Notes or affect the market price of the 2029 Notes.

The 2029 Notes are a recent issue of debt securities.

On October 9, 2024, the 2029 Notes commenced trading on the NYSE under the ticker symbol “CICB.” Although the 2029 Notes are listed on the NYSE, we cannot provide any assurances that an active trading market will develop or be maintained for the 2029 Notes or that holders will be able to sell their 2029 Notes.

The 2029 Notes may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, the time remaining to the maturity of the 2029 Notes, the outstanding principal amount of debt securities with terms identical to the 2029 Notes, the supply of debt securities trading in the secondary market, if any, the redemption or repayment features, if any, of the 2029 Notes, general economic conditions, and our financial condition, performance, prospects and other factors.

Certain of the underwriters have advised us that they intend to make a market in the 2029 Notes, but they are not obligated to do so.

Such underwriters may discontinue any market-making in the 2029 Notes at any time at their sole discretion.

Accordingly, we cannot assure holders that a liquid trading market will develop or be maintained for the 2029 Notes, that holders will be able to sell their 2029 Notes at a particular time or that the price holders receive when they sell will be favorable.

To the extent an active trading market does not develop or is not maintained, the liquidity and trading price for the 2029 Notes may be harmed.

Accordingly, holders may be required to bear the financial risk of an investment in the 2029 Notes for an indefinite period of time.

The optional redemption provision may materially adversely affect holders’ return on the 2029 Notes.

The 2029 Notes are redeemable in whole or in part at any time or from time to time on or after December 30, 2026 at our sole option.

We may choose to redeem the 2029 Notes at times when prevailing interest rates are lower than the interest rate paid on the 2029 Notes.

In this circumstance, holders may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the 2029 Notes being redeemed.

A downgrade, suspension or withdrawal of a credit rating assigned by a rating agency to us, our unsecured debt or the 2029 Notes or a change in the debt markets could cause the liquidity or market value of the 2029 Notes to decline significantly.

Our credit ratings are an assessment by a rating agency of our ability to pay our debts when due.

Consequently, real or anticipated changes in our credit ratings will generally affect the market value of the 2029 Notes.

These credit ratings may not reflect the potential impact of risks relating to the structure or marketing of the 2029 Notes.

Credit ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion.

Neither we nor any underwriter undertakes any obligation to maintain our credit ratings or to advise holders of the 2029 Notes of any changes in our credit ratings.

There can be no assurance that our credit ratings will remain for any given period of time or that such credit ratings will not be lowered or withdrawn entirely by a rating agency if in its judgment future circumstances relating to the basis of the credit ratings, such as adverse changes in us, so warrant.

An increase in the competitive environment, inability to cover distributions, or increase in leverage could lead to a downgrade in our credit ratings and limit our access to the debt and equity markets capability impairing our ability to grow the business.

The conditions of the financial markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future, which could have an adverse effect on the market prices of the 2029 Notes.

In addition, if the 2029 Notes are no longer rated, this could impact their trading and subject them to greater price volatility.

To the extent they are rated and receive a non-investment grade rating, their price and trading activity could be negatively impacted.

Moreover, if a rating agency assigns the 2029 Notes a non-investment grade rating, the 2029 Notes may be subject to greater price volatility than securities of similar maturity without such a non-investment grade rating.

General Risk Factors

Global economic, political and market conditions may adversely affect our business, financial condition and results of operations, including our revenue growth and profitability.

Global economic, political and market conditions, including uncertainty about the financial stability of the United States, may adversely affect our business, financial condition and results of operations, including our revenue growth and profitability.

The current worldwide financial market situation, as well as various social and political tensions in the United States and around the world, have contributed and may continue to contribute to increased market volatility, may have long-term effects on the United States and worldwide financial markets, and may cause economic uncertainties or deterioration in the United States and worldwide.

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Deterioration in the economic conditions in the Eurozone and other regions or countries globally and the resulting instability in global financial markets may pose a risk to our business.

Financial markets have been affected at times by a number of global macroeconomic events, including large sovereign debts and fiscal deficits of several countries in Europe and in emerging markets jurisdictions, levels of non‑performing loans on the balance sheets of European banks, instability in the Chinese capital markets and the COVID-19 pandemic.

Global market and economic disruptions have affected, and may in the future affect, the U.S.

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In an effort to combat inflation, the Federal Reserve increased the federal funds rate in 2023.

However, there are reports that the Federal Reserve may begin to cut the benchmark rates in 2024.

Although the Federal Reserve decreased the federal funds rate for three consecutive quarters in 2024, it paused a further reduction in January for the first quarter of 2025.

The timing, number and amount of any such future interest rate changes are uncertain.

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Such events, including trade tensions between the United States and China, other uncertainties regarding actual and potential shifts in U.S.

and foreign trade, economic and other policies with other countries, the Russia-Ukraine war and more recently the Israel-Hamas war, and health epidemics and pandemics, could adversely affect our business, financial condition or results of operations.

and foreign trade, economic and other policies with other countries, the ongoing war between Russia and Ukraine and conflicts in the Middle East, and health epidemics and pandemics, could adversely affect our business, financial condition or results of operations.

These market and economic disruptions could also negatively impact the operating results of our portfolio companies.

Political, social and economic uncertainty, including uncertainty related to the Russia-Ukraine war and more recently the Israel-Hamas war , creates and exacerbates risks.

Social, political, economic and other conditions and events in the U.S., the United Kingdom, the European Union, China and elsewhere around the world (such as natural disasters, epidemics and pandemics, terrorism, military conflicts and social unrest) may occur that create uncertainty and have significant impacts on issuers, industries, governments and other systems, including the financial markets, to which companies and their investments are exposed.

The uncertainties caused by these conditions and events could result in or coincide with, among other things:

increased volatility in the financial markets for securities, derivatives, loans, credit and currency;

a decrease in the reliability of market prices and difficulty in valuing assets (including portfolio company assets);

greater fluctuations in spreads on debt investments and currency exchange rates;

increased risk of default (by both government and private obligors and issuers);

changes to governmental regulation and supervision of the loan, securities, derivatives and currency markets and market participants;

limitations on the activities of investors in the financial markets;

and substantial, and in some periods extremely high, rates of inflation, which can last many years and have substantial negative effects on credit and securities markets.

The conditions noted above could continue for an extended period and other adverse developments may occur or reoccur, including (i) the decline in value and performance of us and our portfolio companies, (ii) the ability of our borrowers to continue to meet loan covenants or repay loans provided by us on a timely basis or at all, which may require us to restructure our investments or write down the value of our investments, (iii) our ability to comply with the covenants and other terms of our debt obligations and to repay such obligations, on a timely basis or at all, (iv) our ability to comply with certain regulatory requirements, such as asset coverage requirements under the 1940 Act, (v) our ability to maintain our distributions at their current level or to pay them at all or (vi) our ability to source, manage and divest investments and achieve our investment objectives, all of which could result in significant losses to us.

We will also be negatively affected if the operations and effectiveness of any of our portfolio companies (or any of the key personnel or service providers of the foregoing) is compromised or if necessary or beneficial systems and processes are disrupted.

In addition, Russia’s invasion of Ukraine in February 2022 and corresponding events have had, and could continue to have, severe adverse effects on regional and global economic markets.

Following Russia’s actions, various governments, including the government of the United States, issued broad-ranging economic sanctions against Russia, including, among other actions, a prohibition on doing business with certain Russian companies, large financial institutions, officials and oligarchs;

a commitment by certain countries and the European Union to remove selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications, the electronic banking network that connects banks globally;

and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions.

The duration of hostilities and the vast array of sanctions and related events (including cyber incidents and espionage) cannot be predicted.

The Israel-Hamas war has created similar adverse effects on regional and global economic markets, including social unrest in the United States and around the world.

These events present material uncertainty and risk with respect to markets globally, which pose potential adverse risks to us and the performance of our investments and operations.

Any such market disruptions could affect our portfolio companies’ operations and, as a result, could have a material adverse effect on our business, financial condition and results of operations.

Additionally, as a result of the 2024 U.S.

election, the Republican Party currently controls both the executive and legislative branches of government, which increases the likelihood that legislation may be adopted that could significantly affect the regulation of U.S.

financial markets.

Regulatory changes could result in greater competition from banks and other lenders with which we compete for lending and other investment opportunities.

The United States may also potentially withdraw from or renegotiate various trade agreements and take other actions that would change current trade policies of the United States.

These market and economic disruptions could negatively impact the operating results of our portfolio companies.

This could in turn materially reduce our net asset value and distributions and adversely affect our financial prospects and condition.

The capital markets may experience periods of disruption, instability and economic uncertainty.

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and worldwide.

There can be no assurance these market conditions will not occur or worsen in the future, including as a result of the Russia-Ukraine war and more recently the Israel-Hamas war, health epidemics and pandemics, rising interest rates or renewed inflationary pressure.

There can be no assurance these market conditions will not occur or worsen in the future, including economic and political events in or affecting the world's major economies, such as the ongoing war between Russia and Ukraine and conflicts in the Middle East.

Sanctions imposed by the U.S.

and other countries in connection with hostilities between Russia and Ukraine and the tensions between China and Taiwan have caused additional financial market volatility and affected the global economy.

Concerns over future increases in inflation, economic recession, as well as interest rate volatility and fluctuations in oil and gas prices resulting from global production and demand levels, as well as geopolitical tension, have exacerbated market volatility.

Market uncertainty and volatility have also been magnified as a result of the 2024 U.S.

presidential and congressional elections and resulting uncertainties regarding actual and potential shifts in U.S.

and foreign, trade, economic and other policies, including with respect to treaties and tariffs.

Significant disruption or volatility in the capital markets may also negatively affect the valuations of our investments.

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Further, volatility and dislocation in the capital markets may make it difficult to raise equity capital, extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms and any failure to do so could have a material adverse effect on our business.

The debt capital that we have raised over the last year has generally been at higher rates than we have raised debt at in the past due to the higher interest rate environment we have been experiencing.

The debt capital that we have raised over the last few years has generally been at higher rates than we have raised debt at in the past due to the higher interest rate environment we have been experiencing.

The debt capital available to us in the future, if available at all, may bear a higher interest rate and may be available only on terms and conditions less favorable than those of our existing debt and such debt may need to be incurred in a high interest rate environment.

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Any inability to extend the maturity of or refinance our existing debt, or to obtain new debt, could have a material adverse effect on our business, financial condition or results of operations.

Terrorist attacks, acts of war, global health emergencies or natural disasters may impact the businesses in which we invest and harm our business, operating results and financial condition.

Terrorist acts, acts of war, including the Russia-Ukraine war and more recently the Israel-Hamas war , global health emergencies or natural disasters may disrupt our operations, as well as the operations of the businesses in which we invest.

Such acts have created, and continue to create, economic and political uncertainties and have contributed to global economic instability.

Future terrorist activities, military or security operations, global health emergencies or natural disasters could further weaken the domestic/global economies and create additional uncertainties, which may negatively impact the businesses in which we invest directly or indirectly and, in turn, could have a material adverse impact on our business, operating results and financial condition.

Losses from terrorist attacks, global health emergencies and natural disasters are generally uninsurable.

Changes to United States tariff and import/export regulations and trade disputes with other countries may have a negative effect on our portfolio companies and, in turn, harm us.

The United States has recently enacted and proposed to enact significant new tariffs.

Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S.

trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S.

trade policies, treaties and tariffs that could contribute to prolonged trade disputes with other countries.

There continues to exist significant uncertainty about the future relationship between the U.S.

and other countries with respect to such trade policies, treaties and tariffs.

These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S.

Any of these factors could depress economic activity and restrict our portfolio companies' access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.

We are highly dependent on the information systems of CIG and operational risks including systems failures could significantly disrupt our business, result in losses or limit our growth, which may, in turn, negatively affect the market price of our common stock and our ability to pay distributions.

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Any interruption or deterioration in the performance of these third parties or the service providers of our counterparties or failures or vulnerabilities of their respective information systems or technology could impair the quality of our operations and could impact our reputation, adversely affect our businesses and limit our ability to grow.

Finally, there has been significant evolution and developments in the use of artificial intelligence technologies, such as ChatGPT.

Finally, there has been significant evolution and developments in the use of artificial intelligence technologies, such as GPT-4o.

We cannot fully determine the impact of such evolving technology to our business at this time.

Cybersecurity failures and data security incidents could adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential, personal or other sensitive information and/or damage to our business relationships or reputation, any of which could negatively impact our business, financial condition and operating results .

The efficient operation of our business is dependent on computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, all of which are potentially vulnerable to security breaches and cyber-attacks or other security breaches, which may include intentional attacks or accidental losses, either of which may result in unauthorized access to, or corruption of, our hardware, software, or data processing systems, or to our confidential, personal, or other sensitive information.

In addition, we, CIM or its employees may be the target of fraudulent emails or other targeted attempts to gain unauthorized access to confidential, personal, or other sensitive information.

The result of any cyber-attack or other security incidents may include disrupted operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen assets or information (including personal information), fines or penalties, investigations, increased cybersecurity protection and insurance costs, litigation, or damage to our business relationships and reputation, in each case, causing our business and results of operations to suffer.

The efficient operation of our business is dependent on information systems and technology, including computer hardware and software systems, as well as data processing systems and the secure processing, storage and transmission of information, all of which are potentially vulnerable to cyber-attacks or other security breaches, which may include intentional attacks or accidental losses, either of which may result in unauthorized access to, or corruption of, our hardware, software, or data processing systems, or to our confidential, personal, or other sensitive information.

In addition, we, CIM or its employees may be the target of fraudulent emails or other targeted attempts to gain unauthorized access to confidential, personal, or other sensitive information , which are becoming more sophisticated and difficult to detect.

Cybersecurity risks are also exacerbated by the rapidly increasing volume of highly sensitive data, including our proprietary business information and intellectual property, personal information of CIM’s employees, its affiliates’ employees, our investors and others, and other sensitive information that CIG collects, processes and stores in its data centers and on its networks or those of its third-party service providers.

Many jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal information, with which we and CIG must comply in the event of a security incident or cyber-attack.

The rapid evolution and increasing prevalence of artificial intelligence technologies may also increase our and CIG’s cybersecurity risks .

The result of any cyber-attack or other security incidents may include disrupted operations, misstated or unreliable financial data, fraudulent transfers or requests for transfers of money, liability for stolen or improperly accessed assets or information (including personal information), fines or penalties, investigations, increased cybersecurity protection and insurance costs, litigation, or damage to our business relationships and reputation, in each case, causing our business and results of operations to suffer.

The rapid evolution and increasing prevalence of artificial intelligence technologies may also increase our cybersecurity risks.

Although we are not currently aware of any cyber-attacks or other incidents that, individually or in the aggregate, have materially affected, or would reasonably be expected to materially affect, our operations or financial condition, there has been an increase in the frequency and sophistication of the cyber and security threats that we face, with attacks ranging from those common to businesses generally to more advanced and persistent attacks.

Cyber-attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside or inside parties.

Although we are not currently aware of any cyber-attacks or other security incidents that, individually or in the aggregate, have materially affected, or would reasonably be expected to materially affect, our operations or financial condition, there has been an increase in the frequency and sophistication of the cyber and security threats that we face, with attacks ranging from those common to businesses generally to more advanced and persistent attacks.

Cyber-attacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside or inside parties, as well as through employee malfeasance.

We or our third-party providers may face a heightened risk of a security breach or disruption with respect to confidential, personal or other sensitive information resulting from an attack by foreign governments or cyber terrorists.

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While we rely on the cybersecurity strategy and policies implemented by CIG, which includes the performance of risk assessments on third-party providers, our reliance on them and their potential reliance on third-party providers removes certain cybersecurity functions from outside of our immediate control, and cyber-attacks on CIG, on us or on our third-party service providers could adversely affect us, our business and our reputation.

We cannot guarantee that any third-party infrastructure in CIG’s networks has not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to CIG’s information technology systems or the third-party information technology systems that support our services.

CIG’s and our ability to monitor these third parties’ information security practices are limited, and they may not have adequate information security measures in place.

The costs related to cyber-attacks or other security threats or disruptions may not be fully insured or indemnified by others, including by our third-party providers.

As our reliance on computer hardware and software systems, data processing systems, and other technology has increased, so have the risks posed to such systems, both those we or CIG control and those provided by third-party vendors.

Cyber-attacks may originate from a wide variety of sources, and while CIG has implemented processes, procedures and internal controls designed to mitigate cybersecurity risks and cyber-attacks, these measures do not guarantee that a cyber-attack will not occur or that our financial results, operations or confidential information, personal or other sensitive information will not be negatively impacted by such an incident, especially because the techniques of threat actors change frequently and are often not recognized until launched.

Cyber-attacks and other security incidents may originate from a wide variety of sources, and while CIG has implemented processes, procedures and internal controls designed to mitigate cybersecurity risks and cyber-attacks, these measures do not guarantee that a cyber-attack or other security incident will not occur or that our financial results, operations or confidential information, personal or other sensitive information will not be negatively impacted by such an incident, especially because the techniques of threat actors change frequently and are often not recognized until launched, and may be enhanced by artificial intelligence technologies.

CIG relies on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on its information systems, as well as on policies and procedures to protect against the unauthorized or unlawful disclosure of confidential, personal or other sensitive information.

Although CIG takes protective measures and endeavors to strengthen its computer systems, software, technology assets and networks to prevent and address potential cyber-attacks, there can be no assurance that any of these measures prove effective.

Although CIG takes protective measures and endeavors to strengthen its computer systems, software, technology assets and networks to prevent and address potential cyber-attacks and other security incidents, there can be no assurance that any of these measures prove effective.

CIG expects to be required to devote increasing levels of funding and resources, which may in part be allocated to us, to comply with evolving cybersecurity and privacy laws and regulations and to continually monitor and enhance its cybersecurity procedures and controls.

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and around the world.

In the latter half of 2021, the SEC brought three charges, sanctioning eight companies, all of which were registered as broker dealers, investment advisory firms or both, for deficient cybersecurity policies and procedures, and settled charges in two separate actions against public companies for deficient disclosure controls and procedures violations related to a cybersecurity vulnerability that exposed sensitive customer information.

More recently, the SEC proposed new rules related to cybersecurity risk management for registered investment advisers, registered investment companies and BDCs, as well as amendments to certain rules that govern investment adviser and fund disclosures.

In February 2022, the SEC proposed, and subsequently delayed the adoption of, new rules related to cybersecurity risk management for registered investment advisers, registered investment companies and business development companies, as well as amendments to certain rules that govern investment adviser and fund disclosures.

In July 2023, the SEC also adopted rules requiring public companies to disclose material cybersecurity incidents on Form 8-K and periodic disclosure of a registrant’s cybersecurity risk management, strategy, and governance in annual reports.

The rules became effective beginning with annual reports for fiscal years ending on or after December 15, 2023 and beginning with Form 8-Ks on December 18, 2023.

In May 2024, the SEC adopted amendments to Regulation S-P, which, beginning in December 2025, require investment companies and SEC-registered investment advisers to adopt written policies and procedures for incident response programs to address unauthorized access to, or use of, customer information, including providing notice to certain individuals affected by any such incident.

With the SEC particularly focused on cybersecurity, we expect increased scrutiny of our and CIG’s policies and systems designed to manage cybersecurity risks and related disclosures.

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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 1A. Risk Factors