Company: FCRX
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023153
Chunk: 83

Company: Crescent Capital BDC, Inc.
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1
Chunk 83
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 met, borrowers on such securities could still default when our actual collection is expected to occur at the maturity of the obligation; •OID and PIK create the risk that incentive fees will be paid to the Adviser based on •non-cash accruals that ultimately may not be realized, which the Adviser will be under no obligation to reimburse us or these fees; and PIK interest has the effect of generating investment income and increasing the incentive fees payable at a compounding rate. In addition, the deferral of PIK interest also reduces the loan-to-value ratio at a compounding rate.

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Stockholders may be required to pay tax in excess of the cash they receive. Under our dividend reinvestment plan, if a stockholder owns shares of our common stock, the stockholder will have all cash distributions automatically reinvested in additional shares of our common stock unless such stockholder, or his, her or its nominee on such stockholder’s behalf, specifically “opts out” of the dividend reinvestment plan by delivering a written notice to the plan administrator prior to the record date of the next distribution. If a stockholder does not “opt out” of the dividend reinvestment plan, that stockholder will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in our common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, a stockholder may have to use funds from other sources to pay U.S. federal income tax liability on the value of the common stock received. Even if a stockholder chooses to “opt out” of the dividend reinvestment plan, we will have the ability to declare a large portion of a dividend in shares of our common stock instead of in cash in order to satisfy the Annual Distribution Requirement (as defined herein under the heading “Item 1(c). Description of Business—Regulation as a Business Development Company—Election to Be Taxed as a RIC”). As long as a sufficient portion of this dividend is available to be paid in cash (generally 20%) and certain requirements are met, the entire distribution will be treated as a dividend for U.S. federal income tax purposes. As a result, a stockholder generally will be subject to tax on 100% of the fair market value of the dividend on the date the dividend is received by the stockholder in the same manner as a cash dividend, even though most of the dividend was paid in shares of common