What changed in this filing

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Item 1. Business

2023-03-09 compared with 2022-03-10 · 61 added, 45 removed, 448 unchanged (19% of the section changed)

We were formed on March 13, 2018, as a limited liability company under the laws of the State of Delaware and we converted into a corporation incorporated under the laws of the State of Maryland on June 18, 2019.

We are a specialty finance company organized to maximize the total return to our shareholders primarily in the form of current income achieved through investing in senior secured loans to private equity-owned U.S.

We are a specialty finance company organized to maximize the total return to our shareholders primarily in the form of current income achieved through primarily investing in senior secured loans to private equity-owned U.S.

middle market companies.

Effective June 1, 2020, we changed our name from “Nuveen Churchill BDC, Inc.” to “Nuveen Churchill Direct Lending Corp.”

We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”).

In addition, we have elected, and intend to qualify annually thereafter, to be treated for U.S.

federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).

Immediately prior to our election to be regulated as a BDC, Nuveen Churchill BDC SPV I LLC, a wholly-owned subsidiary of the Company (“SPV I”), acquired all of the economic equity interests (the “Merger”) of the Predecessor Entity, a Cayman exempt limited liability company managed as a collateralized loan obligation (“CLO”) vehicle that was managed by Nuveen Alternatives Advisors LLC and sub-advised by Churchill.

Immediately prior to our election to be regulated as a BDC, Nuveen Churchill BDC SPV I LLC, a wholly owned subsidiary of the Company (“SPV I”), merged with with Churchill Middle Market CLO V Ltd.

(the “Predecessor Entity”), with SPV I as the surviving entity in the merger ("Merger").

SPV I is a Delaware limited liability company that was formed on November 13, 2019.

SPV I had no assets or operations prior to completion of the Merger and, as a result, the historical books and records of the Predecessor Entity became the books and records of SPV I, the surviving entity in the Merger.

The Predecessor Entity was a Cayman exempt limited company and was formed under the laws of the Cayman Islands on November 14, 2017 and commenced operations on January 12, 2018.

The Predecessor Entity and SPV I were entities under common control prior to the Merger.

On May 20, 2022, SPV I completed a term debt securitization and, in connection therewith, changed its name to Churchill NCDLC CLO-I, LLC (“CLO-I”).

CLO-I is a wholly owned subsidiary of the Company and is consolidated in our consolidated financial statements commencing from the date of its formation.

Nuveen Churchill BDC SPV II, LLC (“SPV II”) and Nuveen Churchill BDC SPV III, LLC ("SPV III"), both Delaware limited liability companies, were formed on March 19, 2020 and commenced operations on September 21, 2020, the date of their first investment transaction.

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Our portfolio primarily consists of first-lien senior secured debt and unitranche loans (other than last-out positions in unitranche loans) (collectively “Senior Loans”).

We also opportunistically invest in junior capital opportunities (second-lien loans, subordinated debt, last-out positions in unitranche loans and equity-related securities) (collectively “Junior Capital Investments”).

Each of the Advisers is a limited liability company organized under the laws of the state of Delaware, is an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and is an indirect, majority- or wholly-owned subsidiary of Nuveen, LLC (“Nuveen”).

We also opportunistically invest in junior capital opportunities (second-lien loans, subordinated debt, last-out positions in unitranche loans and equity co-investments, and similar equity-related securities) (collectively “Junior Capital Investments”).

Nuveen is the investment management arm of Teachers Insurance and Annuity Association of America (“TIAA”), a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and the companion organization of College Retirement Equities Fund.

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Churchill serves as a sub-adviser to the Company pursuant to the Sub-Advisory Agreement.

As of December 31, 2021, Churchill manages (directly or as a sub-adviser) $36.6 billion of committed capital in BDCs, separate accounts, collateralized loan obligation vehicles (“CLOs”) and private funds investing in private middle-market leveraged loans, subordinated debt, private equity and related strategies.

In addition to serving as a sub-adviser to the Company, Churchill manages other middle-market investment strategies for affiliated entities such as TIAA, its ultimate parent company, as well as for third-party institutional investors, private funds, collateralized loan obligation vehicles ("CLOs") and separate accounts, Nuveen Churchill Private Capital Income Fund, a BDC, and NC SLF Inc., a closed-end fund registered under the 1940 Act.

As of December 31, 2022, Churchill manages (directly or as a sub-adviser) $45.5 billion of committed capital in BDCs, a registered closed-end fund, separate accounts, CLOs, and private funds investing in private middle-market leveraged loans, subordinated debt, equity related securities, private equity, limited partner commitments, and related strategies.

The investment advice that Churchill provides through its team of investment professionals dedicated to Senior Loan investment opportunities (the “Senior Loan Investment Team”) is limited primarily to investments in first-lien secured and unitranche loans made principally to private U.S.

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The Senior Loan Investment Committee is currently comprised of Ken Kencel, Randy Schwimmer, Shai Vichness, Chris Cox and Mat Linett.

The Junior Capital Investment Committee is currently comprised of Ken Kencel, Jason Strife, Derek Fricke and Anne Philpott.

The Junior Capital Investment Committee is currently comprised of Ken Kencel, Jason Strife, Derek Fricke, Anne Philpott, and Nicholas Lawler.

Investment Advisory Agreement

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an experienced and deep management team with substantial middle market finance experience;

the benefits of alignment with TIAA, its ultimate parent company and largest client;

and a cycle-tested track record.

the benefits of alignment with Nuveen and TIAA, its ultimate parent company and largest client.

• Strong relationships with private equity firms combined with meaningful private equity fund investments

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• Experienced and deep management

Churchill is led by industry veterans who bring an average of over 27 years’ experience in middle market investing.

Churchill is led by industry veterans who bring an average of more than 27 years’ experience in middle market investing.

Senior management and the Investment Teams have a long history of working together focused exclusively on originating, underwriting, and monitoring middle market investments.

The predecessor company managed by Churchill’s senior management team, Churchill Financial, LLC (“Churchill Financial”), was founded in 2006 by current senior management team members Kenneth Kencel, Randy Schwimmer and Christopher Cox (the “Churchill Financial Founders”).

The Churchill Financial Founders have together unanimously approved all of the 740+ loans made by Churchill Financial and Churchill since 2006.

The Churchill Financial Founders have together unanimously approved all of the approximately 800 loans made by Churchill Financial and Churchill since 2006.

This core management team has been strengthened with the additions of David Heilbrunn, an original Churchill Financial team member, as Head of Product Development and Capital Raising in 2016, Shai Vichness as Chief Financial Officer in 2018 (solidifying the significant role he had in launching Churchill as a part of TIAA’s asset management division (now doing business as Nuveen) in 2015);

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As a result of this combination, Churchill provides investors with a focused strategy for capitalizing on opportunities in the middle market, extensive market knowledge and a differentiated platform.

The team includes over 100 professionals in New York, Charlotte and Chicago investing over $9 billion annually and overseeing nearly $20 billion in committed capital across multiple investment vehicles and limited partner commitments.

The team includes over 140 professionals in New York, Charlotte, Chicago, Los Angeles, and Dallas investing $11 billion annually and overseeing nearly $46 billion in committed capital across multiple investment vehicles and limited partner commitments.

In connection with this combination, Jason Strife joined the Churchill Financial Founders and Messrs.

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• Benefits of alignment with Nuveen and TIAA

Churchill benefits substantially from the scale and resources of its parent company, Nuveen, and Nuveen’s parent company, TIAA.

Churchill benefits substantially from the scale and resources of its ultimate parent company, Nuveen, and Nuveen’s parent company, TIAA.

Nuveen is a $1.1 trillion asset manager with approximately $89 billion of assets invested in private capital, in each case as of December 31, 2022.

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This alignment ensures that Churchill consistently thinks and acts like a long-term investor in the asset class.

• Cycle tested track record

Churchill is differentiated by the success and length of its track record.

The Senior Loan Investment Team has a demonstrated ability to effectively invest across market cycles.

Investment Strategy

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Target Portfolio Companies will typically exhibit some or all of the following characteristics:

• annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $10 million - $100 million, with a focus on EBITDA of $10 million - $50 million;

• annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $10 million - $100 million, adjusted by certain add-backs per investment, with a focus on adjusted EBITDA of $10 million - $50 million;

• significant cash equity capitalization supported by a private equity sponsor;

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High Tech Industries 9.14 % 10.21 %

Hotel, Gaming & Leisure — 0.8

Advertising, Printing & Publishing 1.25 % 0.44 %

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Consumer 4.47 % 1.50 %

Sovereign & Public Finance 0.85 % — %

Telecommunications 4.09 % 5.74 %

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The Investment Teams will rate each investment based on our “Internal Risk Ratings”.

For more information on the Internal Risk Ratings of our portfolio, see Part II, Item 7 of this Form 10-K “M anagement’s Discussion and Analysis of Financial Condition and Results of Operations—Portfolio and Investment Activity.”

For more information on the Internal Risk Ratings of our portfolio, see Part II, Item 7 of this Form 10-K “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Portfolio and Investment Activity.”

The Investment Teams monitor and, when appropriate, change the investment ratings assigned to each investment in the Company’s portfolio.

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Churchill is focused on delivering attractive risk-adjusted returns to its clients, including the Company, while upholding the highest ethical standards, including certain ESG factors, throughout its origination, underwriting and portfolio management processes.

Churchill's ESG policy requires that it evaluate ESG-related risks that have the potential to damage a company’s operations and reputation, and perform an analysis of the issuer’s operating history to determine whether such risks are managed to minimize defaults that could give rise to investment losses.

Pursuant to the ESG policy, Churchill’s investment teams apply a set of criteria against each investment opportunity through the use of an ESG rating template, the output of which is included in the materials presented to and reviewed by the applicable investment committee underwriting the investment opportunity.

The ESG rating template used by Churchill requires an assessment of the materiality of ESG-related risks, review of ‘high-risk’ business activities that may violate applicable underwriting standards, and a management assessment.

Using a proprietary ESG methodology, the template rates individual issuers based on its perceived management of ESG risk relative to peers.

Post-investment, the ESG policy requires the relevant investment teams to conduct reviews with company management to discuss any ESG-related issues that have arisen.

Any such issues are discussed and considered by the Churchill investment teams during periodic portfolio review meetings in order to perform an ongoing risk assessment.

Churchill’s ESG policy is updated as needed to reflect changing practices and industry standards.

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We are an emerging growth company as defined in the JOBS Act and we are eligible to take advantage of certain specified reduced disclosure and other requirements that are otherwise generally applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

We expect to remain an emerging growth company for up to five years following the completion of our initial public offering (“IPO”) or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues equals or exceeds $1.07 billion, (ii) December 31 of the fiscal year that we become a “large accelerated filer” as defined in Rule 12b-2 under the 1934 Act which would occur if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding three-year period.

In addition, we will take advantage of the extended transition period provided in Section 7(a)(2)(B) of the 1933 Act for complying with new or revised accounting standards.

We expect to remain an emerging growth company for up to five years following the completion of our initial public offering (“IPO”) or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues equals or exceeds $1.07 billion, (ii) December 31 of the fiscal year that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") which would occur if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least 12 months or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the preceding three-year period.

In addition, we will take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act") for complying with new or revised accounting standards.

The Private Offering

Pursuant to a private offering of our shares of common stock (the "Private Offering"), we are offering shares of our common stock to “accredited investors” as defined in Rule 501(a) of Regulation D promulgated under the 1933 Act in reliance on exemptions from the registration requirements of the 1933 Act.

There will be no limit on the number of shares or the amount of capital raised in connection with the Private Offering.

Pursuant to a private offering of our shares of common stock (the "Private Offering"), we are offering shares of our common stock to “accredited investors” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act in reliance on exemptions from the registration requirements of the Securities Act.

There is no limit on the number of shares or the amount of capital raised in connection with the Private Offering.

Each investor will make a capital commitment to purchase shares of our common stock pursuant to a subscription agreement entered into with us.

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As a result of the foregoing, we extended the period during which we may hold Subsequent Closings from September 13, 2021 to March 13, 2022 (the “Fundraising Period”).

On March 8, 2022, our Board determined to conduct a follow-on private offering of our shares of common stock following the end of the current Fundraising Period (the “Follow-on Offering”).

The initial closing of the Follow-on Offering may occur at any time on or after March 14, 2022 (the “Initial Closing”) and the Company expects to hold additional closings until the conclusion of the fiscal quarter ending June 30, 2022.

The Board may, in its sole discretion, extend the Follow-on Offering.

On March 8, 2022, our Board determined to conduct a follow-on private offering of our shares of common stock following the end of the Fundraising Period, which ended on March 13, 2022 (the “Follow-on Offering”).

We held our final closing of the Follow-on Offering on June 15, 2022.

If we are unable to list our shares on a national securities exchange (an "Exchange Listing") or effectuate another permissible liquidity event (as described in our offering documents) within five years of the Initial Closing, subject to up to two one-year extensions at the discretion of the Board, then we will use its best efforts to wind down and/or liquidate and dissolve.

Potential Liquidity Options

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Qualifying Assets.

Under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as “qualifying assets,” unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets.

The principal categories of qualifying assets relevant to the Company’s business are any of the following:

(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC.

An eligible portfolio company is defined in the 1940 Act as any issuer which:

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The Company is generally permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our shares if our asset coverage, as defined in the 1940 Act, is at least equal to 150% (i.e., we can borrow $2 for every $1 of equity), if certain requirements are met.

In connection with the organization of the Company, the Board and TIAA (as the Company’s initial shareholder) authorized the Company to adopt the 150% Asset Coverage Ratio.

In addition, while certain types of senior securities remain outstanding, the Company will be required to make provisions to prohibit the payment of any dividend distribution to our shareholders or the repurchase of such Shares unless we meet the applicable Asset Coverage Ratio at the time of the dividend distribution or repurchase.

In connection with the organization of the Company, the Board and TIAA (as the Company’s initial shareholder) authorized the Company to adopt the 150% asset coverage ratio requirement.

In addition, while certain types of senior securities remain outstanding, the Company will be required to make provisions to prohibit the payment of any dividend distribution to our shareholders or the repurchase of such shares unless we meet the asset coverage ratio requirement at the time of the dividend distribution or repurchase.

The Company will also be permitted to borrow amounts up to 5% of the value of our total assets for temporary purposes, which borrowings would not be considered senior securities.

The Company’s borrowings, whether for temporary purposes or otherwise, are subject to the asset coverage requirements of Section 61(a)(2) of the 1940 Act.

We currently have in place a revolving credit facility (the “Subscription Facility”) and two special purpose vehicle asset credit facilities (the “SPV I Financing Facility,” and the “SPV II Financing Facility,” respectively), and in the future may enter into additional credit facilities.

For more information on our credit facilities see Note 5 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.

We currently have in place a revolving credit facility (the “Subscription Facility”), two special purpose vehicle asset credit facilities (the “Wells Fargo Financing Facility,” and the “SMBC Financing Financing Facility,” respectively), and a term debt securitization (the "2022 Debt Securitization"),and in the future may enter into additional credit facilities and term debt securitizations.

For more information on our credit facilities and the 2022 Debt Securitization, see Note 5 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.

Code of Ethics.

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The Board will regularly review the allocation policy of Churchill.

The Company will be periodically examined by the SEC for compliance with the 1940 Act, and be subject to the periodic reporting and related requirements of the 1934 Act.

In addition, pursuant to an exemptive order issued by the SEC on April 8, 2020 and applicable to all BDCs through December 31, 2020 (the “Temporary Relief”), the Company was permitted, subject to the satisfaction of certain conditions, to complete follow-on investments in our existing portfolio companies with certain affiliates that are private funds if such private funds did not hold an investment in such existing portfolio company.

Without the Temporary Relief, such private funds would not be able to participate in such follow-on investments with us unless the private funds had previously acquired securities of the portfolio company in a co-investment transaction with the Company.

Although the Temporary Relief expired on December 31, 2020, the SEC’s Division of Investment Management had indicated that until March 31, 2022, it would not recommend enforcement action, to the extent that any BDC with an existing co-investment order continues to engage in certain transactions described in the Temporary Relief, pursuant to the same terms and conditions described therein.

The conditional exemptive order is no longer effective;

however, on October 14, 2022, the SEC granted the Company’s request to amend the Order to make the Temporary Relief permanent for the Company and permit the Company to continue to complete follow-on investments in its existing portfolio companies with certain affiliates that are private funds if such private funds did not hold an investment in such existing portfolio company.

The Company will be periodically examined by the SEC for compliance with the 1940 Act, and be subject to the periodic reporting and related requirements of the Exchange Act.

The Company is also required to provide and maintain a bond issued by a reputable fidelity insurance company to insure against larceny and embezzlement.

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The following information is provided to help investors understand what personal information the Company collects, how the Company protects that information and why, in certain cases, the Company may share information with select other parties.

In order to provide you with individualized service, the Company collects certain nonpublic personal information about you from information you provide on your subscription agreement or other forms (such as your address and social security number), and information about your account transactions with the Company (such as purchases of Shares and account balances).

The Company may also collect such information through your account inquiries by mail, email, telephone, or web site.

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These companies will use this information only for the services for which they have been hired, and are not permitted to use or share this information for any other purpose.

We will continue to adhere to the privacy policies and practices described in this notice if you no longer hold Shares of the Company.

We will continue to adhere to the privacy policies and practices described in this notice if you no longer hold our shares of the Company.

The Company and the Advisers maintain internal security procedures to restrict access to your personal and account information to those officers and employees who need to know that information to service your account.

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We furnish our shareholders with annual reports containing audited financial statements, quarterly reports, and such other periodic reports as we determine to be appropriate or as may be required by law.

We are required to comply with all periodic reporting, proxy solicitation and other applicable requirements under the 1934 Act.

We are required to comply with all periodic reporting, proxy solicitation and other applicable requirements under the Exchange Act.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, as well as reports on Forms 3, 4 and 5 regarding directors, officers or 10% beneficial owners of us, filed or furnished pursuant to section 13(a), 15(d) or 16(a) of the Exchange Act, are available free of charge by contacting the Adviser at:

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To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below).

In addition, to be eligible to be taxed as a RIC, we must timely distribute to our shareholders, for each taxable year, at least 90.0% of our “investment company taxable income,” which is generally our net ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses (the “Annual Distribution Requirement”).

In addition, to be eligible to be taxed as a RIC, we generally must timely distribute to our shareholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess of realized net short-term capital gains over realized net long-term capital losses (the “Annual Distribution Requirement”).

The following discussion assumes that we qualify as a RIC and have satisfied the Annual Distribution Requirement.

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then we will not be subject to U.S.

federal income tax on the portion of our income that is timely distributed (or is deemed to be timely distributed) to our shareholders.

If we fail to qualify as a RIC, we will be subject to U.S.

federal income tax at regular corporate rates on our income and capital gains not distributed (or deemed distributed) to our shareholders.

federal income tax on the portion of our income that is timely distributed (or is deemed to be timely distributed) to our shareholders as dividends.

We will be subject to U.S.

federal income tax at corporate rates on the portion of our income that is not timely distributed (or deemed distributed) to our shareholders..

We will be subject to a 4% nondeductible U.S.

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federal income tax purposes, the Company may be required to include in our taxable income certain amounts that we have not yet received in cash.

For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or issued with warrants), it must include in its taxable income in each year the portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by the Company in the same taxable year.

For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount ("OID") (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or issued with warrants), it must include in its taxable income in each year the portion of the OID that accrues over the life of the obligation, regardless of whether cash representing such income is received by the Company in the same taxable year.

The Company may also have to include in its taxable income other amounts that it has not yet received in cash, such as accruals on a contingent payment debt instrument or deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock.

Because original issue discount or other amounts accrued will be included in the Company’s investment company taxable income for the year of accrual and before the Company receives any corresponding cash payments, it may be required to make a distribution to shareholders in order to satisfy the Annual Distribution Requirement, even though it would not have received any corresponding cash payment.

Because OID or other amounts accrued will be included in the Company’s investment company taxable income for the year of accrual and before the Company receives any corresponding cash payments, it may be required to make a distribution to shareholders in order to satisfy the Annual Distribution Requirement, even though it would not have received any corresponding cash payment.

Accordingly, to enable us to satisfy the Annual Distribution Requirement, we may need to sell some of our assets at times and/or at prices that we would not consider advantageous, we may need to raise additional equity or debt capital or we may need to forego new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business).

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In any taxable year that we do not qualify as a RIC, distributions would not be required and, if distributions were made, any such distributions would be taxable to our shareholders as ordinary dividend income to the extent of our current and accumulated earnings and profits.

Subject to certain limitations under the Code, any such distributions would be eligible for the 20.0% maximum rate applicable to non-corporate taxpayers, and corporate distributees would be eligible for the dividends-received deduction.

Subject to certain holding period requirements and other limitations under the Code, any such distributions to non-corporate shareholders may qualify as "qualified dividends" that are subject to U.S.

federal income tax at a rate of 20%, and corporate distributees may be eligible for the dividends-received deduction.

Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the shareholder’s adjusted tax basis, and any remaining distributions would be treated as a capital gain.

The term “return of capital” merely means distributions in excess of our earnings and as such may constitute a return on an investor's individual investments and does not mean a return on capital..

Subject to a limited exception applicable to RICs that qualified as such under Subchapter M of the Code for at least one year prior to disqualification and that requalify as a RIC no later than the second year following the non-qualifying year, we could be subject to tax on any unrealized net built-in gains in the assets held by us during the period in which we failed to qualify as a RIC that are recognized during the five-year period after our requalification as a RIC, unless we made a special election to pay U.S.

federal income tax on any unrealized net built-in gains in the assets held by us during the period in which we failed to qualify as a RIC that are recognized during the five-year period after our requalification as a RIC, unless we made a special election to pay U.S.

federal income tax at corporate rates on such built-in gain at the time of our qualification or requalification as a RIC.

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 1. Business