Use of Leverage. May Reduce The Partnership's Profitability Or Cause Losses Through Liquidation. The Partnership may borrow funds for the purpose of making Mortgage Investments or for any other proper partnership purpose on any terms commercially available and may assign all or a portion of its Mortgage Investment portfolio as security for such loans. The maximum aggregate indebtedness which may be incurred by the Partnership is fifty percent (50%) of the value of the Mortgage Investment portfolio. The Partnership has obtained from a commercial bank a line of credit in the amount of $3,000,000. As of June 30, 1996 the Partnership has borrowed $2,892,000 which represents 20.37% of the outstanding principal balance of the Mortgage Investment portfolio. The General Partners anticipate engaging in such borrowing when the interest rate at which the Partnership can borrow funds is somewhat less than the rate that can be earned by the Partnership on its Mortgage Investments (See "INVESTMENT OBJECTIVES AND CRITERIA - Borrowing"). Interest rate fluctuations may have a particularly adverse effect on the Partnership if it is using such borrowed money to fund Mortgage Investments. Such borrowed money will bear interest at a variable rate, whereas the Partnership may be making fixed rate loans. Therefore, if prevailing interest rates rise, the Partnership's cost of money could exceed the income earned from that money, thus reducing the Partnership's profitability or causing losses through liquidation of Mortgage Investments in order to repay the debt on the borrowed money or default if the Partnership cannot cover the debt on the borrowed money.
Use of Leverage. May Reduce The Partnership's Profitability Or Cause Losses Through Liquidation......................................................... 13 Fluctuations In Interest Rates May Effect Return On Investment.............. 13
Use of Leverage. As provided in the 1940 Act and subject to certain exceptions, the Fund may issue debt with the condition that immediately after issuance the value of its total assets, less certain ordinary course liabilities, exceeds 300% of the amount of the debt outstanding. Thus, as noted above, the Fund may use leverage in the form of borrowings in an amount up to 33 1/3% of the Fund’s total assets (including the proceeds of such leverage). The total leverage of the Fund is currently expected to range between 25% and 32% of the Fund’s total assets. The Fund seeks a leverage ratio, based on a variety of factors including market conditions and the Investment Adviser’s market outlook, for which the rate of return, net of applicable Fund expenses, on the Fund’s investment portfolio investments purchased with leverage exceeds the costs associated with such leverage. The Fund does not currently intend to issue or register preferred shares or commercial paper. At October 31, 2014, the Fund had loans outstanding under the Fund’s Credit Agreement with State Street of $144,000,000. During the fiscal year ended October 31, 2014, the Fund had borrowings under the Credit Agreement as follows: Average Daily Loan Balance Weighted Average Interest Rate% Maximum Daily Loan Outstanding $141,578,082 1.300% $148,000,000 The Fund’s borrowings under its credit facility at October 31, 2014 equaled approximately 32% of the Fund’s total assets (including the proceeds of such leverage). The Fund’s asset coverage ratio as of October 31, 2014 was 310%. See “Risks and Special Considerations—Leverage Risk” for a brief description of the Fund’s Credit Agreement with State Street. Assuming the utilization of leverage in the amount of 32% of the Fund’s total assets and an annual interest rate of 1.300% payable on such leverage based on market rates as of the date of this prospectus, the additional income that the Fund must earn (net of expenses) in order to cover such leverage is approximately $1,924,000. Actual costs of leverage may be higher or lower than that assumed in the previous example. Following the completion of an offering, the Fund may increase the amount of leverage outstanding. The Fund may engage in additional borrowings in order to maintain the Fund’s desired leverage ratio. Leverage creates a greater risk of loss, as well as a potential for more gain, for the common shares than if leverage were not used. Interest on borrowings may be at a fixed or floating rate and generally will be...
Use of Leverage. Leverage is an integral part of the investment strategy of certain types of nontraditional investment funds. Leverage should be viewed as an overlay used to optimise the tradeoff between risk and return. Hence leverage is mainly associated with those styles that have relatively low exposure to market or duration risk, principally involv- ing the use of arbitrage techniques. Leverage cannot be viewed in isolation, but has to be considered in conjunction with all the risks inherent in a transaction. Consequently, in relatively higher risk styles such as “emerging markets” where there is less opportunity to lay off risk through the futures markets or short selling, leverage, if used, is normally used sparingly. Xxxxxxxx therefore has to be evaluated relative to the investment style and the steps that a manager is taking to lay off various risks. Excessive leverage relative to the investment style should be avoided. Overall, the leverage of a fund has to be tightly monitored because of the influence it has on the rapidity with which changes in market, credit and liquidity risk can feed through to the value of a fund.
Use of Leverage. . . . . . . . . . The Fund may implement various temporary “defensive” strategies at times when Credit Suisse determines that conditions in the markets make pursuing the Fund’s basic investment strategy inconsistent with the best interests of shareholders. These strategies may include investing less than 80% of its total assets in lower grade income securities by investing in higher quality debt and/or money market instruments. See “Investment Policies.” The Fund invests primarily in bonds, debentures, notes, senior loans, other debt instruments, convertible bonds and preferred stocks. The Fund’s portfolio securities may have fixed or variable rates of interest and may include zero coupon securities, payment-in-kind securities or other deferred payment securities, preferred stock, convertible debt obligations and convertible preferred stock, units consisting of debt or preferred stock with warrants or other equity features, secured floating rate loans and loan participations, government securities, stripped securities, commercial paper and other short-term debt obligations. The issuers of the Fund’s portfolio securities may include domestic and foreign corporations, partnerships, trusts or similar entities, and governmental entities or their political subdivisions, agencies or instrumentalities. The Fund may invest in companies in, or governments of, developing countries. In connection with its investments in corporate debt securities, or restructuring of investments owned by the Fund, the Fund may receive warrants or other non-income producing equity securities. The Fund may retain such securities, including equity shares received upon conversion of convertible securities, until Credit Suisse determines it is appropriate in light of current market conditions to dispose of such securities. The Fund has certain investment restrictions that may not be changed without approval by a majority of the Fund’s outstanding voting securities. These restrictions concern issuance of senior securities, borrowing, lending, concentration, diversification and other matters. See “Investment Restrictions.” As provided in the Investment Company Act of 1940, as amended (the “1940 Act”), and subject to certain exceptions, the Fund may issue debt with the condition that immediately after issuance the value of its total assets, less ordinary course liabilities, exceeds 300% of the amount of the debt outstanding. Thus, as noted above, the Fund may use leverage in the form of borro...
Use of Leverage. We currently engage in leverage and may borrow money or issue additional debt securities, and/or issue additional preferred stock, to provide us with additional funds to invest. The borrowing of money and the issuance of preferred stock and debt securities represents the leveraging of our common stock. The issuance of additional common stock may enable us to increase the aggregate amount of our leverage or to maintain existing leverage. We reserve the right at any time to use financial leverage to the extent permitted by the 1940 Act (50% of total assets for preferred stock and 33 1/3% of total assets for debt securities) or we may elect to reduce the use of leverage or use no leverage at all. Our policy is to utilize leverage in an amount that on average represents approximately 25% of our total assets. We consider market conditions at the time leverage is incurred and monitor for asset coverage ratios relative to 1940 Act requirements and our financial covenants on an ongoing basis. Leverage as a percent of total assets will vary depending on market conditions, but will normally range between 20% and 30%. We generally will not use leverage unless we believe that leverage will serve the best interests of our stockholders. The principal factor used in making this determination is whether the potential return is likely to exceed the cost of leverage. We will not issue additional leverage where the estimated costs of issuing such leverage and the on-going cost of servicing the payment obligations on such leverage exceed the estimated return on the proceeds of such leverage. We note, however, that in making the determination of whether to issue leverage, we must rely on estimates of leverage costs and expected returns. Actual costs of leverage vary over time depending on interest rates and other factors. Actual returns vary, of course, depending on many factors. Additionally, the percentage of our assets attributable to leverage may vary significantly during periods of extreme market volatility and will increase during periods of declining market prices of our portfolio holdings. Our Board also will consider other factors, including whether the current investment opportunities will help us achieve our investment objective and strategies. We have established an unsecured credit facility with U.S. Bank N.A. serving as a lender and the lending syndicate agent on behalf of other lenders participating in the credit facility, which currently allows us to borrow up ...
Use of Leverage. (a) The Partnership may borrow money from any Person, make guarantees to any Person or incur any other obligation in connection with the Partnership’s investment activities, or the activities of any Person in which the Partnership acquires, directly or indirectly, or proposes to acquire, an Investment (or to any subsidiary thereof), for any purpose including, without limitation, to make, hold or dispose of any Investment, provide permanent financing or refinancing, provide cash collateral to secure outstanding letters of credit or provide interim financing to the extent necessary to consummate the acquisition of Investments prior to the completion of permanent debt financing therefor or prior to the receipt of Funded Contributions. Except to the extent otherwise limited in the Confidential Memorandum, the amount of leverage used from time to time will be determined by the General Partner in its sole discretion. The General Partner, on behalf of the Partnership, may pledge to a lender Investments or the Unfunded Commitments of Limited Partners as security for any borrowing.
Use of Leverage. The Partnership has the authority to borrow money for cash management purposes. The Partnership shall not borrow money for investment purposes. For greater certainty, no provision herein shall prohibit the Partnership’s indirect exposure to the use of leverage (in any amounts and for any reason or purpose whatsoever) through its underlying investments, including but not limited to, its direct and indirect investments in the StepStone Cayman Fund and the Underlying Partnerships.
Use of Leverage. Leverage is not allowed for Retail Clients. Leverage shall not be used in the Balanced Strategy. Leverage is allowed for Non-retail Clients (i.e. Professional Clients and Eligible Counterparties). Leverage will be used in the Capital Growth Strategy and the Speculative Strategy. Where leverage is permitted in the strategy, the Investment Manager is fully authorized and granted powers by the Client to invest in financial products and/or instruments in its sole discretion and with use of leverage of up to 1 : 3 of total value of Client’s Portfolio. The use of leverage may be applied to an individual financial product and/or instrument as well as to the whole value of Client’s Portfolio. Where leverage is permitted in the strategy, the Client hereby acknowledges and confirms his/her understanding that any investments made by the Investment Manager for the Client in the above-mentioned financial products and/or instruments carry an investment risk and may result in potential losses. The risk disclosures are extensively provided in the Portfolio Management Agreement and in the Risk Disclosure Statement which forms an integral part thereof. Any projections as to potential losses are estimates only and may not be realized in the future. Likewise, any information on past performance, where given, is not necessarily a guide to future performance.
Use of Leverage. The Fund may borrow money and/or issue Preferred Shares, notes or debt securities for investment purposes. These practices are known as leveraging. The Adviser determines whether or not to engage in leverage based on its assessment of conditions in the debt and credit markets. On December 16, 2016, the Fund entered into a $75,000,000 secured, revolving, evergreen credit facility with U.S. Bank National Association (the “USB Facility”). The borrowing rate under the USB Facility is equal to one-month LIBOR plus 0.95%. The average principal balance and interest rate for the fiscal year ended June 30, 2021 was approximately $38,205,479 and 1.13%, respectively. As of June 30, 2021, the principal amount of borrowings under the USB Facility was $21,000,000, representing approximately 6.87% of the Fund’s Managed Assets. As of June 30, 2021, total annual interest rate, including the commitment fee rate, was 1.14% of the principal amount outstanding or 0.21% of the Fund’s net assets attributable to Common Shares. As of June 30, 2021, the Fund had $54,000,000 in unutilized funds available for borrowing under the USB Facility. In addition, as of June 30, 2021, the Fund had outstanding 2,400,000 shares of 4.375% Series A Preferred Stock. As of the same date, the average liquidation preference since the issuance of such Series A Preferred Stock was approximately $25.00. The Series A Preferred Stock ranks senior in right of payment to the Common Shares and is subordinated in right of payment to borrowings under the USB Facility. As of June 30, 2021, the Fund’s leverage from borrowings and its issuance of Series A Preferred Stock was approximately 25% of its Managed Assets. The Fund’s Common Shares are junior in liquidation and distribution rights to amounts owed pursuant to the USB Facility. See “Summary of Fund Expenses” and “Use of Leverage—Effects of Leverage.” The Fund currently anticipates that it could also obtain leverage through the use of reverse repurchase agreements. Pursuant to the provisions of the 1940 Act, the Fund may borrow or issue notes or debt securities in an amount up to 33 1/3% of its total assets and may issue Preferred Shares in an amount up to 50% of its total assets (including the proceeds from leverage). The Underlying Funds that the Fund invests in may also use leverage. Notwithstanding the limits discussed above, the Fund may enter into derivatives or other transactions (e.g., reverse repurchase agreements and total return swaps) that may pr...
