4 unchanged sentences
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.
−Removed: As of September 30, 2023.
−Removed: we had 15 investments with an aggregate principal balance of $456.8 million that provide for interest income at an annual rate of SOFR or Term SOFR, plus a spread, 14 of which were subject to a SOFR or Term SOFR floor.
−Removed: A decrease of 100 basis points in SOFR or Term SOFR would decrease our annual interest income by $4.5 million, and an increase of 100 basis points in SOFR or Term SOFR would increase our annual interest income by $4.6 million.
−Removed: Additionally, as of September 30, 2023, we had $27.6 million of borrowings outstanding under a mortgage loan payable that bear interest at an annual rate of Term SOFR plus a spread that is collateralized by an office building;
−Removed: $33.0 million of borrowings outstanding under another mortgage loan payable that bear interest an annual rate of Term SOFR plus a spread that is collateralized by three industrial buildings;
−Removed: a revolving line of credit with an outstanding balance of $50.4 million that bears interest at an annual rate of Term SOFR plus a spread that is collateralized by $87.5 million of first mortgages;
−Removed: a repurchase agreement with an outstanding balance of $37.5 million that bears interest at an annual rate of Term SOFR, as applicable, plus a spread that is collateralized by $51.1 million of first mortgages;
−Removed: another repurchase agreement with an outstanding balance of $75.5 million that bears interest at an annual rate of Term SOFR plus a spread that is collateralized by $141.7 million of first mortgages;
−Removed: a $37.0 million promissory note payable that bears interest at an annual rate of Term SOFR plus a spread with a combined floor;
−Removed: and a $15.0 million of term loan that bears interest at an annual rate of SOFR plus a spread with a SOFR floor.
−Removed: A decrease of 100 basis points in Term SOFR would decrease our annual interest expense by approximately $2.3 million, and an increase of 100 basis points in Term SOFR would increase our annual interest expense by approximately $2.8 million.
−Removed: We may hedge against interest rate fluctuations by using standard hedging instruments, such as futures, options and forward contracts, subject to the requirements of the 1940 Act.
+Added: The following table summarizes the aggregate principal balance of variable rate investments and indebtedness as of:
+Added: March 31, 2024
+Added: Variable rate investments $ 404,867,022
+Added: Variable rate debt $ 221,402,639
+Added: The following table summarizes estimated changes in net investment income on our variable rate investments and indebtedness as of March 31, 2024 assuming hypothetical increases or decreases in Term SOFR or SOFR:
+Added: 1.00% Decrease 1.00% Increase
+Added: Investment income from variable rate investments $ (4,175,598) $ 4,214,402
+Added: Interest expense from variable rate debt 1,558,213 (2,214,026)
+Added: Net investment income from variable rate instruments $ (2,617,385) $ 2,000,376
+Added: We may hedge against interest rate fluctuations by using standard hedging instruments, such as futures, options and forward contracts.
While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.
−Removed: For the three and nine months ended September 30, 2023 and 2022, we did not engage in interest rate hedging activities.
+Added: For the three months ended March 31, 2024 and 2023, we did not engage in interest rate hedging activities.
Prepayment Risks
2 unchanged sentences
If we do not collect a prepayment fee in connection with a prepayment or are unable to invest the proceeds of such prepayments received, the yield on the portfolio will decline.
−Removed: In addition, we may acquire assets at a discount or premium and if the asset does not repay when expected, the anticipated yield may be impacted.
+Added: In addition, we may acquire assets at a discount or premium and if the asset does not
+Added: repay when expected, the anticipated yield may be impacted.
Under certain interest rate and prepayment scenarios we may fail to recoup fully our cost of acquisition of certain loans.
1 unchanged sentence
Extension risk is the risk that our assets will be repaid at a slower rate than anticipated and generally increases when interest rates rise.
−Removed: In which case, to the extent we have financed the acquisition of an asset, we may have to finance our asset at potentially higher costs without the ability to reinvest principal into higher yielding securities because borrowers prepay their
−Removed: mortgages at a slower pace than originally expected, adversely impacting our net interest spread, and thus our net interest income.
+Added: In which case, to the extent we have financed the acquisition of an asset, we may have to finance our asset at potentially higher costs without the ability to reinvest principal into higher yielding securities because borrowers prepay their mortgages at a slower pace than originally expected, adversely impacting our net interest spread, and thus our net interest income.
Real Estate Risk
13 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.