Company: TSI
Filing Date: 2025-12-18
Form Type: N-2/A
Source: 0001193125-25-324429
Chunk: 70

Company: TCW STRATEGIC INCOME FUND INC
Filing Date: 2025-12-18
Form: N-2/A
Chunk 70
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 Collateralized Debt Obligations The risks of an investment in a CDO, including CBOs and CLOs, depend largely on the type of the collateral securities (which would have the risks described elsewhere in this Prospectus for that type of security) and the class of the CBO, CLO or other CDO in which the Fund invests. Some CBOs, CLOs and other CDOs have credit ratings, but are typically issued in various classes with various priorities. Normally, CBOs, CLOs and other CDOs are privately offered and sold (that is, not registered under the federal securities laws) and may be characterized by the Fund as illiquid securities, but an active dealer market may exist for CBOs, CLOs and other CDOs that qualify for Rule 144A transactions. In addition to the normal risks associated with fixed income securities discussed elsewhere in this Prospectus and the Fund’s SAI (e.g., interest rate, default risk, and mortgage-related and asset-backed securities risks), CBOs, CLOs and other CDOs carry additional risks, including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; and (iii) the complex structure of the security may not be fully understood at the time of investment, which may result in disputes with the issuer or produce unexpected investment results. For CBOs, CLOs and other CDOs, the cash flows from the trust are split into two or more portions, called “tranches,” varying in risk and yield. The riskiest portion is the “equity” tranche, which is the first tranche to bear losses from defaults of the underlying collateral. The Fund may invest in securities of any tranche, including equity tranches. Even to the extent the Fund invests in higher rated tranches, such tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market anticipation of defaults, as well as aversion to CBO, CLO or other CDO securities as a class. Convertible Securities Risk Convertible securities are bonds, debentures, notes, preferred stocks or other securities that may be converted into or exchanged for a specified amount of common stock of the same or a different issuer within a particular period of time at a specified price