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Guggenheim Credit Income Fund 2019

GCIF is a non-traded BDC that seeks to invest primarily in large, privately-negotiated loans to private middle market U.S. companies, with a focus on senior secured debt investments. GCIF is advised by Guggenheim Partners Investment Management, LLC ("Guggenheim Investments"), an affiliate of Guggenheim Partners, LLC ("Guggenheim Partners"). For more information, please visit https://www.guggenheimCIF.com

Company profile

Employees
Location
Fiscal year end
Former names
Carey Credit Income Fund - I, CAREY CREDIT INCOME FUND - I, Carey Credit Income Fund 2015 A, Carey Credit Income Fund Series 2015-A, GUGGENHEIM CREDIT INCOME FUND - I
SEC CIK
IRS number
472009064

Calendar

12 Aug 21
17 Oct 21
31 Dec 21

Financial report summary

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Risks
  • RISKS RELATED TO OUR BUSINESS
  • Our ability to achieve our investment objectives depends on the Advisor’s ability to manage and support our investment process. If the Advisor were to lose a significant number of its key professionals, or terminate the Investment Advisory Agreement, our ability to achieve our investment objectives could be significantly harmed.
  • Because our business model depends to a significant extent upon relationships with corporations, financial institutions and investment firms, the inability of the Advisor to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.
  • We may face increasing competition for investment opportunities, which could delay further deployment of our capital, reduce returns and result in losses.
  • The amount of any distributions we may make is uncertain. We may not be able to pay distributions or be able to sustain distributions at any particular level, and our distributions per share may not grow over time or may decline. We have not established any limit on the extent to which we may use borrowings, if any, or offering proceeds to fund distributions (which may reduce the amount of capital we ultimately invest in portfolio companies).
  • Our distributions may exceed our taxable earnings and profits, particularly during the period before we have substantially invested the net proceeds from our securities offering. Therefore, portions of the distributions that we pay may represent a return of capital to you, which will lower your tax basis in your Shares, which may cause you to experience increases in capital gains in subsequent sales of your Shares, and reduce the amount of funds we have for investment in portfolio companies.
  • A significant portion of our investment portfolio will be recorded at fair value as determined in good faith in accordance with procedures established by our Board of Trustees and, as a result, there is and will be uncertainty as to the value of our portfolio investments.
  • We are dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect our liquidity, financial condition or results of operations.
  • Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, results of operations or financial condition.
  • Any unrealized losses we experience on our portfolio may be an indication of future realized losses, which could reduce our income available for distribution.
  • We are exposed to risks resulting from the current low interest rate environment.
  • Our Board of Trustees may change our operating policies and strategies without prior notice or shareholder approval, the effects of which may be adverse to our shareholders.
  • Certain investment analysis and decisions by the Advisor may be undertaken with limited information.
  • Changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy.
  • We may experience fluctuations in our quarterly results.
  • RISKS RELATED TO OUR INVESTMENTS
  • We are a non-diversified investment company within the meaning of the 1940 Act and therefore we are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer.
  • Global capital markets could enter a period of severe disruption and instability. These conditions have historically affected and could again materially and adversely affect debt and equity capital markets in the United States and around the world and could negatively impact our business, financial condition and results of operations.
  • Our investments in portfolio companies may be risky and we could lose all or part of our investment.
  • Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.
  • Subordinated liens on collateral securing debt investments that we will make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay both the first priority creditors and us in full.
  • There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.
  • We generally will not control the business operations of our portfolio companies and, due to the illiquid nature of our holdings in our portfolio companies, may not be able to dispose of our interest in our portfolio companies.
  • We will be exposed to risks associated with changes in interest rates.
  • An increase or decrease in commodity pricing may adversely affect our business.
  • We may continue to be subject to certain contingent liabilities arising from the sale or other disposition of our investments.
  • International investments create additional risks.
  • To the extent OID and PIK interest income constitute a portion of our income, we will be exposed to risks associated with the deferred receipt of cash representing such income.
  • Our investments in private investment funds, including hedge funds, private equity funds, limited liability companies and other business entities, subject us indirectly to the underlying risks of such private investment funds and additional fees and expenses.
  • We may acquire various structured financial instruments for purposes of “hedging” or reducing our risks, which may be costly and ineffective and could reduce our cash available for distribution to our shareholders.
  • Defaults by our portfolio companies will harm our operating results.
  • The lack of liquidity in our investments may adversely affect our business.
  • We may not have the funds or ability to make additional investments in our portfolio companies or to fund our unfunded commitments.
  • Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity.
  • To the extent that we borrow money at the Master Fund, the potential for gain or loss on amounts invested in us will be magnified and may increase the risk of investing in us. Borrowed money may also adversely affect the return on our assets, reduce cash available to service our debt or for distribution to our shareholders, and result in losses.
  • The agreements governing our financing arrangements contain various covenants which, if not complied with, could accelerate repayment under the applicable arrangement, thereby materially and adversely affecting our liquidity, financial condition, results of operations and our ability to pay distributions to our shareholders.
  • Recent legislation may allow us to incur additional leverage.
  • Economic recessions or downturns could impair our portfolio companies and harm our operating results.
  • The Advisor's decision to securitize loans may impact the Feeder Funds.
  • RISKS RELATED TO OUR ADVISOR AND ITS AFFILIATES
  • The Advisor and its affiliates, including our officers and some of our Trustees, may face conflicts of interest caused by compensation arrangements with us and our affiliates, which could result in increased risk-taking by us.
  • The time and resources that individuals associated with the Advisor devote to us may be diverted, and we may face additional competition due to the fact that Guggenheim is not prohibited from raising money for or managing another entity that makes the same types of investments that we target.
  • The Advisor will experience conflicts of interest in connection with the management of our business affairs.
  • The Advisor may face conflicts of interest with respect to services performed for issuers in which we invest.
  • The Advisor has incentives to favor its other accounts and clients over us, which may result in conflicts of interest that could be harmful to us.
  • The Advisor is not restricted from entering into other investment advisory relationships; the Advisor’s actions on behalf of its other accounts and clients may be adverse to us and our investments.
  • Our Advisor will face restrictions on its use of inside information about existing or potential investments that it acquires through its relationships with other advisory clients, and those restrictions may limit the freedom of our Advisor to enter into or exit from investments for us, which could have an adverse effect on our results of operations.
  • We may be obligated to pay our Advisor incentive fees even if we incur a net loss due to a decline in the value of our portfolio and even if our earned interest income is not payable in cash.
  • Our incentive fee may induce our Advisor to make speculative investments.
  • Our ability to enter into transactions with our affiliates will be restricted.
  • We may make investments that could give rise to a conflict of interest.
  • The recommendations given to us by the Advisor may differ from those rendered to its other clients.
  • Our Advisor’s liability is limited under the Investment Advisory Agreement, and we are required to indemnify our Advisor against certain liabilities, which may lead our Advisor to act in a riskier manner on our behalf than it would when acting for its own account.
  • Our Advisor is party to a settlement agreement with the SEC and is subject to remedial sanctions and a cease-and-desist order.
  • RISKS GENERALLY RELATED TO BUSINESS DEVELOPMENT COMPANIES
  • The requirement that we invest a sufficient portion of our assets in qualifying assets could preclude us from investing in accordance with our current business strategy; conversely, the failure to invest a sufficient portion of our assets in qualifying assets could result in our failure to maintain our status as a BDC.
  • Failure to maintain our status as a BDC would reduce our operating flexibility.
  • Regulations governing our operation as a BDC and RIC will affect our ability to raise capital and the way in which we raise additional capital or borrow for investment purposes, which may have a negative effect on our growth. As a BDC, the necessity of raising additional capital may expose us to risks, including risks associated with leverage.
  • If we cannot obtain debt financing or equity capital on acceptable terms, our ability to acquire investments and to expand our operations will be adversely affected.
  • RISKS RELATED TO AN INVESTMENT IN OUR SHARES
  • Investing in our Shares involves a high degree of risk.
  • We intend, but are not required, to offer to repurchase your Shares on a quarterly basis. As a result you will have limited opportunities to sell your Shares.
  • Our Shares are not listed on a securities exchange and our shareholders have limited liquidity. In addition, the timing of our repurchase offers pursuant to our share repurchase program may be at a time that is disadvantageous to our shareholders, and to the extent you are able to sell your Shares under the share repurchase program, you may not be able to recover the amount of your investment in our Shares.
  • We have a finite term and the timing of our liquidation may be at a time that is disadvantageous to our shareholders and the proceeds you receive may be less than your investment in our Shares.
  • GCIF 2016T also has a finite term and the timing of its liquidation will likely occur before any liquidation that we may have. GCIF 2016T's liquidation may be at a time that is disadvantageous to the Master Fund and our shareholders.
  • We may be unable to invest a significant portion of the net proceeds of this offering on acceptable terms in an acceptable timeframe.
  • Your interest in us may be diluted if we issue additional Shares, which could reduce the overall value of an investment in us.
  • If a Liquidity Event were to be in the form of listing of the Master Fund’s shares on a national securities exchange, the price at which the shares of the Master Fund trade from time to time may be below the Master Fund’s then current Net Asset value.
  • Certain provisions of our Declaration of Trust and actions of the Board of Trustees could deter takeover attempts and have an adverse impact on the value of our Shares.
  • The net asset value of our Shares may fluctuate significantly.
  • There are special considerations for pension or profit-sharing trusts, Keoghs or IRAs.
  • We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC under Subchapter M of the Code, if the Master Fund is unable to maintain its qualification as a RIC under Subchapter M of the Code or if we make investments through taxable subsidiaries.
  • We may invest in certain debt and equity investments through taxable subsidiaries and the net taxable income of these taxable subsidiaries will be subject to federal and state corporate income taxes.
  • We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.
  • Portfolio investments held by the Master Fund may present special tax issues.
Management Discussion
  • Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
  • The information contained in this item should be read in conjunction with our financial statements and related notes thereto appearing elsewhere in this Report. Unless otherwise noted, the terms "we," "us," "our" and the "Company" refer to Guggenheim Credit Income Fund 2019. The Term "Master Fund" refers to Guggenheim Credit Income Fund. Capitalized terms used in this Item 2 have the same meaning as in the accompanying financial statements presented in Part I. Item 1. Financial Statements (Unaudited), unless otherwise defined herein.
  • We are a feeder fund and we are affiliated with the Master Fund, which is a specialty finance investment company that has elected to be treated as a BDC under the 1940 Act. The Master Fund is externally managed by Guggenheim, which is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments, determining the securities and other assets that we will purchase, retain or sell and monitoring the Master Fund's portfolio on an ongoing basis. The Master Fund's management discussion and analysis of financial condition and results of operations as presented in its quarterly report should be read in its entirety.
Content analysis
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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior Avg
Removed: conform, description, maximum, presentation, reclassified

Proxies

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