Goldman Sachs BDC (GSBD) risk factors, 2026 10-K

Other

1. 01Political, social and economic uncertainties may create and exacerbate risks100% rewritten
2. 02Our operation as a BDC imposes numerous constraints on us and significantly reduces our operating flexibility. In addition, if we fail to maintain our status as a BDC, we might be regulated as a registered closed-end investment company, which would subject us to additional regulatory restrictions94% rewritten
3. 03We operate in a highly competitive market for investment opportunities
4. 04We borrow money, which may magnify the potential for gain or loss and may increase the risk of investing in us
5. 05We are exposed to risks associated with changes in interest rates
6. 06The lack of liquidity in our investments may adversely affect our business
7. 07Our stockholders that do not opt out of our DRIP should generally expect to have current tax liabilities without receiving cash to pay such liabilities100% rewritten
8. 08Purchases of our common stock pursuant to any 10b5-1 plan or otherwise may result in dilution to our NAV per sharenew

Risks Relating to Market Developments and General Business Environment

1. 09The capital markets may experience periods of disruption and instability. Such market conditions may have materially and adversely affected debt and equity capital markets, which may have a negative impact on our business and operations

Risks Relating to Legal and Regulatory Matters

1. 10Our operation as a BDC imposes numerous constraints on us and significantly reduces our operating flexibility. In addition, if we fail to maintain our status as a BDC, we might be regulated as a registered closed-end investment company, which would subject us to additional regulatory restrictionsnew
2. 11Regulations governing our operations as a BDC affect our ability to, and the way in which we, raise additional capital. These constraints may hinder our Investment Adviser’s ability to take advantage of attractive investment opportunities and to achieve our investment objective
3. 12We incur significant costs as a result of being subject to the reporting requirements under the Exchange Act
4. 13Efforts to comply with Section 404 of the Sarbanes-Oxley Act involve significant expenditures, and noncompliance with Section 404 of the Sarbanes-Oxley Act may adversely affect us and the market price of our securities
5. 14We cannot predict how new tax legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business
6. 15Our ability to enter into transactions with our affiliates is restricted71% rewritten
7. 16Our activities may be limited as a result of potentially being deemed to be controlled by GS Group Inc., a bank holding company100% rewritten
8. 17CFTC rules may have a negative impact on us and our Investment Adviser
9. 18Our ability to enter into transactions involving derivatives and financial commitment transactions may be limited
10. 19Certain investors are limited in their ability to make significant investments in us

Risks Relating to Competition

1. 20We depend upon management personnel of our Investment Adviser for our future success

Risks Relating to Our Operations

1. 21We are dependent on information systems, and systems failures or cybersecurity incidents, as well as operating failures, could significantly disrupt our business, which may, in turn, negatively affect our liquidity, financial condition or results of operations
2. 22These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our securities and our ability to pay distributions to our stockholders
3. 23We are subject to risks associated with artificial intelligence and machine learning technologynew

Risks Relating to Our Business and Structure

1. 24Our Investment Adviser, its principals, investment professionals and employees and the members of its Private Credit Investment Committee may have certain conflicts of interest
2. 25Subject to applicable law, we may invest alongside Goldman Sachs and other Accounts
3. 26Goldman Sachs’ financial and other interests may incentivize our Investment Adviser to favor other Accounts
4. 27Our financial condition and results of operations depend on our Investment Adviser’s ability to manage our future growth effectively
5. 28Our ability to grow depends on our access to adequate capital
6. 29In addition, we may be unable to obtain our desired leverage, which would, in turn, affect a stockholder’s return on investment56% rewritten
7. 30The Management Fee is payable even in the event the value of a stockholder’s investment declines
8. 31The Incentive Fee based on income takes into account our past performance
9. 32Potential conflicts of interest with other businesses of Goldman Sachs could impact our investment returns
10. 33Goldman Sachs has influence, and may continue to exert influence, over our management and affairs and over most votes requiring stockholder approval
11. 34Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval
12. 35Our Investment Adviser can resign on 60 days’ notice. We may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations
13. 36Our Investment Adviser’s responsibilities and its liability to us are limited under the Investment Management Agreement, which may lead our Investment Adviser to act in a riskier manner on our behalf than it would when acting for its own account
14. 37We may experience fluctuations in our quarterly results
15. 38Our business faces increasing public scrutiny related to ESG activities, which are increasingly considered to contribute to the long-term sustainability of a company’s performance. A variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicizednew
16. 39The effect of global climate change may impact the operations of our portfolio companies

Risks Relating to Our Investments

1. 40Our investments are very risky and highly speculative21% rewritten
2. 41Revolving Credit Facilities. From time to time, we may acquire or originate revolving credit facilities in connection with our investments in other assets, which may result in our holding unemployed funds, negatively impacting our returns
3. 42Investing in middle-market companies involves a number of significant risks
4. 43We have exposure to credit risk and other risks related to credit investments
5. 44Changes in inflation may adversely affect the business, results of operations and financial condition of our portfolio companies
6. 45Many of our portfolio securities do not have a readily available market price, and we value these securities at fair value as determined in good faith in accordance with the Investment Company Act, which valuation is inherently subjective and may not reflect what we may actually realize for the sale of the investment40% rewritten
7. 46the fair value determinations. In accordance with this rule and as discussed above, our Board of Directors has designated our Investment Adviser, as the Valuation Designee primarily responsible for the valuation of our assets, subject to the oversight of the Board of Directors, and we are in compliance with Rule 2a-5new
8. 47Our portfolio may be focused in a limited number of portfolio companies, which will subject us to a risk of significant loss if any of these companies default on their obligations under any of its debt instruments or if there is a downturn in a particular industry
9. 48We may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments
10. 49We may be subject to risks associated with subordinated debt
11. 50We may be subject to risks associated with unsecured debt
12. 51We may be subject to risks arising from revolving credit facilities
13. 52We may be subject to risks arising from purchases of secondary debt
14. 53We may be subject to risks arising from assignments and participationsnew
15. 54We may have difficulty sourcing investment opportunities
16. 55Our failure or inability to make follow-on investments in our portfolio companies could impair the value of our portfolio
17. 56We may elect not to, or be unable to, make follow-on investments or may lack sufficient funds to make those investments
18. 57Our portfolio companies may prepay loans, which may reduce stated yields in the future if the capital returned cannot be invested in transactions with equal or greater expected yields
19. 58Investments in common and preferred equity securities, many of which are illiquid with no readily available market, involve a substantial degree of risk
20. 59in some cases, equity securities in which we invest will not pay current dividends, and our ability to realize a return on our investment, as well as to recover our investment, will be dependent on the success of the portfolio company
21. 60generally, preferred security holders have no voting rights with respect to the issuing company, subject to limited exceptions
22. 61By originating loans to companies that are experiencing significant financial or business difficulties, we may be exposed to distressed lending risks
23. 62We may be exposed to special risks associated with bankruptcy cases
24. 63We may be subject to risks related to exit financingsnew
25. 64Declines in market prices and liquidity in the corporate debt markets can result in significant net unrealized depreciation of our portfolio, which in turn would affect our results of operations
26. 65Economic recessions or downturns could impair our portfolio companies and harm our operating results
27. 66Our portfolio companies may have incurred or issued, or may in the future incur or issue, debt or equity securities that rank equally with, or senior to, our investments in such companies, which could have an adverse effect on us in any liquidation of the portfolio company
28. 67Our portfolio companies may be highly leveraged39% rewritten
29. 68contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. These risks are likely to be more pronounced for investments in companies located in emerging markets and particularly for middle-market companies in these economiesnew
30. 69We may expose ourselves to risks if we engage in hedging transactions
31. 70We may form one or more CLOs, which may subject us to certain structured financing risks

Risks Relating to Our Securities

1. 71Investing in our securities involves an above-average degree of risk
2. 72The market price of our securities may fluctuate significantly
3. 73loss of a major funding source71% rewritten
4. 74Shares of closed-end investment companies, including BDCs, frequently trade at a discount to their NAV per share100% rewritten
5. 75Sales of substantial amounts of our common stock in the public market may have a material adverse effect on the market price of our common stock29% rewritten
6. 76Our stockholders will experience dilution in their ownership percentage if they opt out of our DRIP32% rewritten
7. 77We may in the future determine to issue preferred stock, which could adversely affect the market value of our common stock
8. 78Certain provisions of our certificate of incorporation and bylaws and the DGCL, as well as other aspects of our structure, including the substantial ownership interest of GS Group Inc., could deter takeover attempts and have an adverse impact on the price of our common stock
9. 79require stockholders to provide advance notice of new business proposals and director nominations under specific procedures
10. 80The tax treatment of a non-U.S. stockholder in its jurisdiction of tax residence will depend entirely on the laws of such jurisdiction, and may vary considerably from jurisdiction to jurisdiction
11. 81We may have difficulty paying our required distributions if we recognize taxable income before or without receiving cash representing such income
12. 82Our stockholders may receive shares of our common stock or preferred stock as distributions, which could result in adverse tax consequences to them
13. 83If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, U.S. stockholders that are individuals, trusts or estates will be taxed as though they received a distribution of some of our expenses
14. 84Purchases of our common stock pursuant to any 10b5-1 plan or otherwise may result in the price of our common stock being higher than the price that otherwise might exist in the open market58% rewritten
15. 85Purchases of our common stock by us under any 10b5-1 plan or otherwise may result in dilution to our NAV per share100% rewritten
16. 86To the extent OID and PIK interest constitute a portion of our income, we will be exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash representing such income
17. 87OID and PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. OID and PIK income may also create uncertainty about the source of our cash distributions
18. 88Terms relating to redemption may materially adversely affect an investor’s return on any debt securities that we may issue
19. 89Our credit ratings may not reflect all risks of an investment in our debt securities
20. 90Holders of any preferred stock we might issue would have the right to elect members of the board of directors and class voting rights on certain matters
21. 91There is a risk that investors in our equity securities may not receive distributions or that our distributions may not grow over time and that investors in our debt securities may not receive all of the interest income to which they are entitled