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We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies.
−Removed: Most of our investments will not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firm(s) engaged at the direction of our Board, and in accordance with our valuation policy.
+Added: Most of our investments do not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board, based on, among other things, the input of the Adviser, our Audit Committee and independent third-party valuation firm(s) engaged at the direction of our Board, and in accordance with our valuation policy.
There is no single standard for determining fair value.
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Interest Rate Risk
−Removed: We will be subject to financial market risks, including changes in interest rates that may result in changes to our net investment income.
+Added: We are subject to financial market risks, including changes in interest rates that may result in changes to our net investment income.
In addition, U.S.
−Removed: and global capital markets and credit markets have experienced a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of volatility across such markets and a general decline in value of the securities that we hold.
−Removed: Because we expect to fund a portion of our investments with borrowings, our net investment income is expected to be affected by the difference between the rate at which we invest and the rate at which we borrow.
+Added: and global capital markets and credit markets have experienced a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of market volatility.
+Added: Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow.
As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
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In addition, in a prolonged low interest rate environment, the difference between the total interest income earned on interest earning assets and the total interest expense incurred on interest bearing liabilities may be compressed, reducing our net interest income and potentially adversely affecting our operating results.
+Added: Conversely, in a rising interest rate environment, such difference could potentially increase thereby increasing our net income as indicated per the table below.
As of December 31, 2021, 96.42% of the loans held in our investment portfolio had floating interest rates and 3.58% of loans held in our investment portfolio had fixed interest rates.
Interest rates on the loans held within our portfolio of investments are typically based on floating LIBOR, with many of these assets also having a LIBOR floor.
−Removed: Additionally, borrowings under the SPV I Financing Facility are subject to floating interest rates and as of December 31, 2020 are paid based on a daily LIBOR, plus 2.50% per annum, borrowings under the SPV II Financing Facility bear interest at a rate of one-month LIBOR plus 2.50% per annum and borrowings under the Subscription Facility bear interest at a rate of LIBOR plus 1.75% per annum.
+Added: Additionally, borrowings under the SPV I Financing Facility are subject to floating interest rates and as of December 31, 2021 are paid based on a daily LIBOR plus 2.50% per annum.
+Added: Borrowings under the SPV II Financing Facility bear interest at a rate of one-month LIBOR plus 2.15% per annum.
+Added: Borrowings under the Subscription Facility bear interest at a rate of LIBOR plus 1.75% per annum.
The following table estimates the potential changes in net cash flow generated from interest income and expenses, should interest rates increase by 100, 200 or 300 basis points, or decrease by 25 basis points.
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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.