Dividend and Taxation - The company has adopted a dividend reinvestment plan allowing stockholders to reinvest dividends in additional shares of common stock[66]. - The company has elected to be treated as a Regulated Investment Company (RIC) for U.S. federal income tax purposes, which allows it to avoid corporate-level income taxes on distributed income[94]. - To maintain RIC status, the company must distribute at least 90% of its investment company taxable income annually[95]. - The company must derive at least 90% of its gross income from specific sources to qualify as a RIC, including dividends and interest[97]. - The company is subject to a 4% nondeductible federal excise tax on certain undistributed income unless it meets specific distribution requirements[96]. Regulatory Compliance - The company is regulated as a Business Development Company (BDC) under the 1940 Act, primarily investing in private companies[69]. - The company must maintain an asset coverage ratio of at least 150% after borrowing, limiting its ability to use debt[72]. - The company is permitted to invest up to 30% of its portfolio in "non-qualifying assets" under the 1940 Act[75]. - The company is required to provide significant managerial assistance to portfolio companies to count securities as qualifying assets[77]. - The company must adhere to certain regulatory requirements, including having a majority of independent directors[71]. - The company is subject to periodic examinations by the SEC for compliance with the 1940 Act[74]. - The company must disclose its internal control effectiveness and any significant changes in its internal controls over financial reporting[90]. - The company has adopted compliance policies and procedures to prevent violations of federal securities laws[83]. - The company is required to furnish stockholders with annual reports containing audited financial statements and quarterly reports[92]. Financial Performance and Risk Management - As of December 31, 2024, 97.3% of the investments at fair value in the company's portfolio were at variable rates, subject to interest rate floors[395]. - A hypothetical 100 basis point increase in interest rates would result in an increase of 5.9 million in interest expense, leading to a net interest income of 44.8 million, and SEK 11.6 million notional exposure to foreign currency forward contracts related to investments totaling £17.2 million, €18.3 million, AUD $29.5 million, and SEK 11.6 million at par[399]. - The company may be required to recognize taxable income without receiving cash, particularly in cases involving Original Issue Discount (OID) on debt obligations[98]. - The company is subject to asset coverage ratio requirements under the 1940 Act, which could restrict its ability to make necessary distributions[99]. - The company may utilize hedging instruments to mitigate interest rate fluctuations, but such strategies may also limit benefits from lower interest rates[398].
Crescent Capital BDC(CCAP) - 2024 Q4 - Annual Report