1 unchanged sentence
We are subject to financial market risks, including changes in interest rates.
−Removed: 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
−Removed: 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.
+Added: Uncertainty with respect to the rising interest rates, inflationary pressures, risks in respect of a failure to increase the U.S.
+Added: debt ceiling, the war between Ukraine and Russia and health epidemics and pandemics introduced significant volatility in the financial markets, and the effects of this volatility has materially impacted and could continue to materially impact our market risks.
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.
1 unchanged sentence
In a low interest rate environment, including a reduction of LIBOR and SOFR to zero, 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.
−Removed: Conversely, in a rising interest rate environment, such difference could potentially increase thereby increasing our net investment income.
−Removed: During the nine months ended September 30, 2022, certain investments in our comprehensive investment portfolio had floating interest rates.
+Added: Conversely, in a rising interest rate environment, such as the current economic environment, such difference could potentially increase thereby increasing our net investment income.
+Added: During the three months ended March 31, 2023, certain investments in our comprehensive investment portfolio had floating interest rates.
These floating rate investments were primarily based on floating LIBOR or SOFR and typically have durations of one to three months after which they reset to current market interest rates.
Additionally, some of these investments have floors.
−Removed: The Company also has revolving credit facilities that are generally based on floating LIBOR or SOFR.
−Removed: Assuming no changes to our balance sheet as of September 30, 2022 and no new defaults by portfolio companies, a hypothetical one percent decrease in LIBOR and SOFR on our comprehensive floating rate assets and liabilities would decrease our net investment income by eleven cents per average share over the next twelve months.
−Removed: Assuming no changes to our balance sheet as of September 30, 2022 and no new defaults by portfolio companies, a hypothetical one percent increase in LIBOR and SOFR on our comprehensive floating rate assets and liabilities would increase our net investment income by approximately twelve cents per average share over the next twelve months.
−Removed: However, we may hedge against interest rate fluctuations from time-to-time
−Removed: by using standard hedging instruments such as futures, options, swaps and forward contracts subject to the requirements of the 1940 Act.
+Added: The Company also has revolving credit facilities that are generally based on floating SOFR.
+Added: Assuming no changes to our balance sheet as of March 31, 2023 and no new defaults by portfolio companies, a hypothetical one percent decrease in LIBOR and SOFR on our comprehensive floating rate assets and liabilities would decrease our net investment income by nine cents per average share over the next twelve months.
+Added: Assuming no changes to our balance sheet as of March 31, 2023 and no new defaults by portfolio companies, a hypothetical one percent increase in LIBOR and SOFR on our comprehensive floating rate assets and liabilities would increase our net investment income by approximately ten cents per average share over the next twelve months.
+Added: However, we may hedge against interest rate fluctuations from time to time by using standard hedging instruments such as futures, options, swaps and forward contracts subject to the requirements of the 1940 Act.
While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in any benefits of certain changes in interest rates with respect to our portfolio of investments.
−Removed: At September 30, 2022, we have no interest rate hedging instruments outstanding on our balance sheet.
+Added: At March 31, 2023, we have no interest rate hedging instruments outstanding on our balance sheet.
Increase (Decrease) in LIBOR and SOFR
3 unchanged sentences
dollars at the balance sheet date, exposing us to movements in foreign exchange rates.
−Removed: In order to reduce our exposure to fluctuations in foreign exchange rates, we may borrow from time-to-time
−Removed: in such currencies under our multi-currency revolving credit facility or enter into forward currency or similar contracts.
+Added: In order to reduce our exposure to fluctuations in foreign exchange rates, we may borrow from time to time in such currencies under our multi-currency revolving credit facility or enter into forward currency or similar contracts.
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.