AB 2020 Form 10-K

• changes in accounting guidelines governing valuation of the Fund’s investments; • any shortfall in revenue or net income or any increase in losses from levels expected by investors; • departure of the Adviser or certain of its key personnel; • general economic trends and other external factors; and • loss of a major funding source. The Fund’s right to make Capital Calls may be pledged as collateral under the HSBC Credit Facility or any other future borrowing facility. The HSBC Credit Facility, and any future borrowing facility, may be backed by all or a portion of the Fund’s loans and securities on which the lenders may have a security interest. The Fund may pledge up to 100% of its assets and may grant a security interest in all of its assets under the terms of any debt instrument it enters into with lenders. The Fund expects that any security interests the Fund grants will be set forth in a pledge and security agreement and evidenced by the filing of consolidated financing statements by the agent for the lenders. In addition, the Fund expects that the custodian for its securities serving as collateral for such loan would include in its electronic systems notices indicating the existence of such security interests and, following notice of occurrence of an event of default, if any, and during its continuance, will only accept transfer instructions with respect to any such securities from the lender or its designee. If the Fund was to default under the terms of any debt instrument, the agent for the applicable lenders would be able to assume control of the timing of disposition of any or all of its assets securing such debt, which would have a material adverse effect on its business, financial condition, results of operations and cash flows. In addition, any security interests as well as negative covenants a credit facility or any other borrowing facility may provide may limit the Fund’s ability to create liens on assets to secure additional debt and may make it difficult for the Fund to restructure or refinance indebtedness at or prior to maturity or obtain additional debt or equity financing. In addition, if the Fund’s borrowing base under a credit facility or any other borrowing facility were to decrease, the Fund would be required to secure additional assets in an amount equal to any borrowing base deficiency. In the event that all of the Fund’s assets are secured at the time of such a borrowing base deficiency, the Fund could be required to repay advances under the relevant credit facility or any other borrowing facility or make deposits to a collection account, either of which could have a material adverse impact on its ability to fund future investments and to pay distributions. In addition, the Fund expects that under a credit facility it will be subject to limitations as to how borrowed funds may be used, which may include restrictions on geographic and industry concentrations, loan size, payment frequency and status, average life, collateral interests and investment ratings, as well as regulatory restrictions on leverage which may affect the amount of funding that may be obtained. There may also be certain requirements relating to portfolio performance, including required minimum portfolio yield and limitations on delinquencies and charge-offs, a violation of which could limit further advances and, in some cases, result in an event of default. An event of default under a credit facility or any other borrowing facility could result in an accelerated maturity date for all amounts outstanding thereunder, which could have a material adverse effect on the Fund’s business and financial condition. This could reduce the Fund’s revenues and, by delaying any cash payment allowed to the Fund under the relevant credit facility or any other borrowing facility until the lenders have been paid in full, reduce the Fund’s liquidity and cash flow and impair its ability to grow its business and maintain its ability to be subject to tax as a RIC. The Fund has not yet identified all of the portfolio companies it will invest in using the proceeds of the Private Offering. The Fund has not yet identified all of the potential investments for its portfolio that it will acquire with the proceeds of the Private Offering. As a result, you will be unable to evaluate any future portfolio company investments prior to purchasing the Fund’s Shares. Additionally, the Adviser will select the Fund’s investments subsequent to the Initial Closing and Subsequent Closings, and its stockholders will have no input with respect to such investment decisions. These factors increase the uncertainty, and thus the risk, of investing in the Fund’s common stock. The Fund’s failure to make follow-on investments in its portfolio companies could impair the value of its portfolio. Following an initial investment in a portfolio company, the Fund may make additional investments in that portfolio company as “follow-on” investments, in order to: (1) increase or maintain in whole or in part the Fund’s equity ownership percentage; (2) exercise warrants, options, or convertible securities that were acquired in the original or a subsequent financing; or (3) attempt to preserve or enhance the value of the Fund’s investment. However, the Fund may elect not to make follow-on investments or lack sufficient funds to make those investments. The Fund will have the discretion to make any follow-on investments, subject to the availability of capital resources. The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and the Fund’s initial investment or may result in a missed opportunity for the Fund to increase its participation in a 53