Content analysis
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H.S. senior Avg
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New words:
AAAsf, absent, Bird, blue, Cruise, Del, Depositor, eliminated, Excursion, Gallery, holder, indenture, indirectly, intercompany, irrevocably, joint, Naviga, newly, overallotment, preliminary, redeemed, Scooter, separate, sky, Sorenson, Stat, supposed, underperformance, unpaid
Removed:
Aerospace, alternative, AVAD, Bolthouse, Carbon, CARE, Comfort, Crown, dominant, Education, EURIBOR, Fertility, Glacier, impacted, inflation, Interbank, introduced, LIBOR, listed, London, Media, Miller, NFA, outbreak, pandemic, Parent, phase, phased, potential, priced, Project, replacement, response, Russia, Safety, SPE, spread, transition, Trench, Ukraine, war, Wm
Financial report summary
?Risks
- The current outbreak of the novel coronavirus, or COVID-19, has caused severe disruptions in the U.S. and global economy and is expected to have a materially adverse impact on our financial condition and results of operations.
- Changes in interest rates may adversely affect the value of our portfolio investments which could have an adverse effect on our business, financial condition and results of operations.
- Capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which may have a negative impact on our business and operations.
- Volatility in the global financial markets resulting from relapse of the Eurozone crisis, geopolitical developments in Eastern Europe, turbulence in the Chinese stock markets and global commodity markets, the United Kingdom’s vote to leave the European Union or otherwise could have a material adverse effect on our business, financial condition and results of operations.
- Changes in existing laws or regulations, the interpretations thereof or newly enacted laws or regulations may negatively impact our business.
- The interest rates of some of our floating-rate loans to our portfolio companies may be priced using a spread over LIBOR, which is being phased out.
- If AIC can no longer claim exemption from being deemed a “commodity pool operator” pursuant to Commodity Futures Trading Commission (the “CFTC”) rules, AIC and AIM could be subject to additional regulatory requirements.
- The continued uncertainty relating to the U.S. and global economy could have a negative impact on our business.
- The Russian invasion of Ukraine may have a material adverse impact on us and our portfolio companies.
- We may suffer credit losses.
- We are dependent upon Apollo Investment Management’s key personnel for our future success and upon their access to AGM’s investment professionals and partners.
- Our financial condition and results of operations depend on our ability to manage future growth effectively.
- We operate in a highly competitive market for investment opportunities.
- Any failure on our part to maintain our status as a BDC would reduce our operating flexibility.
- We will be subject to corporate-level income tax if we are unable to maintain our status as a RIC.
- We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.
- Regulations governing our operation as a BDC affect our ability to raise, and the way in which we raise, additional capital.
- We currently use borrowed funds to make investments and are exposed to the typical risks associated with leverage.
- We fund a portion of our investments with borrowed money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.
- Effective April 4, 2019, our asset coverage requirement was reduced from 200% to 150%, which may increase the risk of investing with us.
- We may in the future determine to fund a portion of our investments with preferred stock, which would magnify the potential for gain or loss and the risks of investing in us in the same way as our borrowings.
- Changes in interest rates may affect our cost of capital and net investment income.
- Our business requires a substantial amount of capital to grow because we must distribute most of our income.
- Many of our portfolio investments are recorded at fair value as determined in good faith by or under the direction of our Board of Directors and, as a result, there is uncertainty as to the value of our portfolio investments.
- The lack of liquidity in our investments may adversely affect our business.
- We may experience fluctuations in our periodic results.
- Our ability to enter into transactions with our affiliates is restricted.
- There are significant potential conflicts of interest which could adversely affect our investment returns.
- In the past following periods of volatility in the market price of a company’s securities, securities class action litigation has, from time to time, been brought against that company.
- To the extent OID and PIK interest constitute a portion of our income, we will be exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash representing such income.
- Changes in the laws or regulations governing our business or the businesses of our portfolio companies and any failure by us or our portfolio companies to comply with these laws or regulations, could negatively affect the profitability of our operations or of our portfolio companies.
- We may choose to pay dividends in our own common stock, in which case you may be required to pay federal income taxes in excess of the cash dividends you receive.
- If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.
- The failure in cyber security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning could impair our ability to conduct business effectively.
- We are dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay dividends.
- The effect of global climate change may impact the operations of our portfolio companies.
- Our Investment Adviser and Administrator have the right to resign on 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our business, financial condition and results of operations.
- Our investments in portfolio companies are risky, and we could lose all or part of our investment.
- Investments in the energy sector are subject to many risks.
- Crude oil and natural gas prices are volatile. A substantial and/or extended decline in crude oil and natural gas prices could have a material adverse effect on some of our portfolio companies in the energy sector.
- Cyclicality within the energy sector may adversely affect our business.
- A prolonged continuation of depressed oil and natural gas prices could negatively impact the energy and power industry and energy-related investments within our investment portfolio.
- Commodities are subject to many risks that may adversely affect some of our portfolio companies.
- Economic recessions or downturns could impair our portfolio companies and harm our operating results.
- Our portfolio companies may be highly leveraged and a covenant breach by our portfolio companies may harm our operating results.
- If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.
- Our portfolio contains a limited number of portfolio companies, which subjects us to a greater risk of significant loss if any of these companies defaults on its obligations under any of its debt securities.
- Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.
- When we do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.
- An investment strategy focused primarily on privately-held companies presents certain challenges, including the lack of available information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel and a greater vulnerability to economic downturns.
- Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.
- Our incentive fee may induce AIM to make certain investments, including speculative investments.
- Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.
- Hedging transactions may expose us to additional risks.
- New market structure requirements applicable to derivatives could significantly increase the costs of utilizing over-the-counter (“OTC”) derivatives.
- Our ability to enter into transactions involving derivatives and financial commitment transactions may be limited.
- Proposed position aggregation requirements may restrict the swap positions that AIM may enter into.
- The effects of various environmental regulations may negatively affect the aviation industry and some of our portfolio companies.
- Our investments in the healthcare and pharmaceutical services industry sector are subject to extensive government regulation and certain other risks particular to that industry.
- Our senior secured credit facility begins amortizing in December 2024 and any inability to renew, extend or replace the facility could adversely impact our liquidity and ability to find new investments or maintain distributions to our stockholders.
- Our unsecured notes mature in 2025 and in 2026, and any inability to replace or repay our unsecured notes could adversely impact our liquidity and ability to fund new investments or maintain distributions to our stockholders.
- The trading market or market value of our debt securities may fluctuate.
- Terms relating to redemption may materially adversely affect your return on any debt securities that we may issue.
- Our credit ratings may not reflect all risks of an investment in our debt securities.
- Investing in our securities involves a high degree of risk and is highly speculative.
- There is a risk that investors in our equity securities may not receive distributions or that our distributions may not grow over time and that investors in our debt securities may not receive all of the interest income to which they are entitled.
- Our shares may trade at discounts from net asset value or at premiums that are unsustainable over the long term.
- We may be unable to invest the net proceeds raised from offerings on acceptable terms, which would harm our financial condition and operating results.
- Sales of substantial amounts of our securities may have an adverse effect on the market price of our securities.
- If you do not fully exercise your subscription rights in any rights offering of our common stock, your interest in us may be diluted and, if the subscription price is less than our net asset value per share, you may experience an immediate dilution of the aggregate net asset value of your shares.
- Stockholders may experience dilution in their ownership percentage if they do not participate in our dividend reinvestment plan.
- If we issue preferred stock, the net asset value and market value of our common stock may become more volatile.
- Holders of any preferred stock we might issue would have the right to elect members of the Board of Directors and class voting rights on certain matters.
Management Discussion
- Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- •the timing of cash flows, if any, from the operations of our portfolio companies.
- We generally use words such as “anticipates,” “believes,” “expects,” “intends” and similar expressions to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason, including any factors set forth in “Risk Factors” and elsewhere in this report.