MSC Income Fund (MSIF) FY2025 10-K Risk Factors: 4 New, 5 Dropped

What the changes say

MSC Income Fund added risks covering fee waivers, tariff policies, incentive compensation on losses, and stock sales.
Personnel competition risks were expanded to highlight Main Street's resource constraints relative to other funds.
Capital raising and below-NAV stock issuance authorizations were updated with new deadlines.

What changed since the prior 10-K

New

NewRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
Waivers, deferrals and reductions of fees and costs can temporarily result in higher returns to investors than they would otherwise receive if full fees and costs were charged
Waivers or deferrals of fees by the Adviser can temporarily inflate investor returns and rely on future positive performance to sustain distributions.
NewRISKS RELATED TO MSC INCOME’S INVESTMENTS
Changes to U.S. tariff, trade and economic policies may have a negative effect on MSC Income’s portfolio companies and, in turn, harm MSC Income
U.S. tariffs and trade policy changes can create market volatility, reduce global trade, and negatively impact portfolio companies.
NewRISKS RELATED TO THE ADVISER AND ITS AFFILIATES
MSC Income may be obligated to pay the Adviser incentive compensation even if MSC Income incurs a net loss due to a decline in the value of the Investment Portfolio
The Adviser can collect incentive compensation on net investment income and accrued interest even if the portfolio suffers capital losses or defaults.
NewRISKS RELATED TO MSC INCOME’S SECURITIES
Sales of substantial amounts of MSC Income’s common stock in the public market may have an adverse effect on the market price of its common stock
Sales of substantial amounts of common stock in the public market could depress the share price and impair capital-raising abilities.

Dropped

DroppedRISKS RELATED TO OUR BUSINESS AND STRUCTURE
growth opportunities. Many of the entities, including investment funds (such as private equity funds, debt funds and mezzanine funds) and traditional financial services companies, with which our Adviser competes for experienced personnel have greater resources than our Adviser
DroppedRISKS RELATED TO OUR BUSINESS AND STRUCTURE
investment portfolio may, from time to time, be comprised of assets that could permit us to qualify as a “diversified” investment company under the 1940 Act. To the extent that we operate as a non-diversified investment company, we may be subject to greater risk
DroppedRISKS RELATED TO OUR ADVISER AND ITS AFFILIATES
The Advisory Agreement entitles our Adviser to receive incentive compensation on income regardless of any capital losses. In such case, we may be required to pay our Adviser incentive compensation for a fiscal quarter even if there is a decline in the value of our portfolio or if we incur a net loss for that quarter
DroppedRISKS RELATED TO OUR SECURITIES
NAV per share of our common stock and a proportionately greater decrease in a stockholder’s interest in our earnings and assets and voting interest in us than the increase in our assets resulting from such issuance
DroppedRISKS RELATED TO OUR SECURITIES
companies. In addition, the use of AI by bad actors could heighten the sophistication and effectiveness of cyber and security attacks experienced by us, our Adviser or our portfolio companies

Reworded

86% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income’s success depends on Main Street’s ability to attract and retain qualified personnel in a competitive environment
Updated to specify that Main Street provides investment professionals and faces resource competition from larger private equity and debt funds.
Was: Our success depends on our Adviser’s ability to attract and retain qualified personnel in a competitive environment
83% rewrittenRISKS RELATED TO LEVERAGE
_____________________________
Updated financial assumptions to December 31, 2025, showing $1,381.0 million in total assets, $603.0 million in debt, and a 5.7% interest rate.
81% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Stockholders may incur dilution if MSC Income sells shares of its common stock in one or more offerings at prices below the then current NAV per share of its common stock
Extended the below-NAV stock issuance authorization expiration date from December 11, 2025, to September 9, 2026.
Was: Stockholders may incur dilution if we sell shares of our common stock in one or more offerings at prices below the then current NAV per share of our common stock or issue securities to subscribe to, convert to or purchase shares of our common stock
77% rewrittenRISKS RELATED TO THE ADVISER AND ITS AFFILIATES
The Adviser may face conflicts of interest in allocating investment opportunities between MSC Income, Main Street and the other advisory clients of the Adviser
Clarified co-investment terms under the SEC exemptive relief order for the Investment Portfolio and Main Street.
Was: Our Adviser may face conflicts of interest in allocating investment opportunities between us, Main Street and the other advisory clients of our Adviser
76% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income is a non-diversified investment company within the meaning of the 1940 Act, and therefore it is not limited with respect to the proportion of its assets that may be invested in securities of a single issuer
Replaced generic pronouns with explicit references to MSC Income as a non-diversified company.
Was: We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer
73% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income is subject to risks related to corporate social responsibility
Switched from first-person references to explicit references to MSC Income regarding environmental, social, and governance scrutiny.
Was: We are subject to risks related to corporate social responsibility
72% rewrittenRISKS RELATED TO BDCs
Regulations governing MSC Income’s operation as a BDC will affect its ability to raise, and the way in which it raises, additional capital
Modified the BDC asset coverage description to reference the one-year anniversary of Board approval.
Was: Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital
71% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Shares of closed-end investment companies, including BDCs such as MSC Income, may trade at a discount to their NAV per share
Updated cross-references and replaced first-person pronouns with explicit references to MSC Income.
Was: Shares of closed-end investment companies, including BDCs, may trade at a discount to their NAV per share
70% rewrittenRISKS RELATED TO THE ADVISER AND ITS AFFILIATES
Main Street owns approximately 3.5% of MSC Income’s common stock, which could result in Main Street’s influence over the outcome of matters submitted to the vote of MSC Income’s stockholders
Was: Main Street owns approximately 2.9% of our common stock, which could result in its influence over the outcome of matters submitted to the vote of our stockholders
67% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
The Board of Directors may change MSC Income’s investment objective, operating policies, investment criteria and strategies without prior notice or stockholder approval, the effects of which may be adverse
Was: Our Board of Directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval, the effects of which may be adverse
67% rewrittenRISKS RELATED TO LEVERAGE
Substantially all of MSC Income’s assets are subject to security interests under its senior securities, and if MSC Income defaults on its obligations under its senior securities, it may suffer adverse consequences, including foreclosure on its assets
Was: Substantially all of our assets are subject to security interests under our senior securities and if we default on our obligations under our senior securities, we may suffer adverse consequences, including foreclosure on our assets
67% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
MSC Income generally will not control its portfolio companies
Was: We generally will not control our portfolio companies
64% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Technological innovations and industry disruptions may negatively impact MSC Income
Was: Technological innovations and industry disruptions may negatively impact us
63% rewrittenRISKS RELATED TO BDCs
Failure to maintain its status as a BDC would reduce MSC Income’s operating flexibility
Was: Failure to maintain our status as a BDC would reduce our operating flexibility
61% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income’s financial condition and results of operations depends on the Adviser’s ability to effectively manage and deploy capital
Was: Our financial condition and results of operations depends on our Adviser’s ability to effectively manage and deploy capital
61% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
The lack of liquidity in MSC Income’s investments may adversely affect its business
Was: The lack of liquidity in our investments may adversely affect our business
61% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income is subject to risks associated with artificial intelligence and machine learning technology
Was: We are subject to risks associated with artificial intelligence and machine learning technology
60% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
Because the Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value of MSC Income’s portfolio investments
Was: Because our Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value of our portfolio investments
60% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income faces increasing competition for investment opportunities
Was: We face increasing competition for investment opportunities
60% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income’s business model depends to a significant extent upon strong referral relationships maintained by Main Street and the Adviser
Was: Our business model depends to a significant extent upon strong referral relationships
60% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Provisions of the Maryland General Corporation Law and MSC Income’s articles of amendment and restatement and bylaws could deter takeover attempts and have an adverse impact on the price of MSC Income’s common stock
Was: Provisions of the Maryland General Corporation Law and our articles of incorporation and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock
59% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income is dependent upon the Adviser’s key investment personnel, who are provided by Main Street, for its future success
Was: We are dependent upon our Adviser’s key investment personnel for our future success
59% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
The market price of MSC Income’s securities may be volatile and fluctuate significantly
Was: The market price of our securities may be volatile and fluctuate significantly
58% rewrittenRISKS RELATED TO THE ADVISER AND ITS AFFILIATES
The Adviser has conflicts of interest that may create an incentive for the Adviser to enter into investments that are riskier or more speculative than would otherwise be the case and the Adviser may have an incentive to increase portfolio leverage in order to earn higher management fees
Was: Our Adviser has conflicts of interest that may create an incentive for the Adviser to enter into investments that are riskier or more speculative than would otherwise be the case and our Adviser may have an incentive to increase portfolio leverage in order to earn higher management fees
58% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Common stockholders’ interest in MSC Income will be diluted if MSC Income issues additional shares of its common stock, which could reduce the overall value of their investment
Was: Our common stockholders’ interest in us will be diluted if we issue additional shares, which could reduce the overall value of their investment
57% rewrittenRISKS RELATED TO LEVERAGE
Because MSC Income borrows money, the potential for gain or loss on amounts invested in MSC Income is magnified and may increase the risk of such investment
Was: Because we borrow money, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us
57% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income may not replicate the historical results achieved by Main Street or by other advisory clients of the Adviser
Was: We may not replicate the historical results achieved by Main Street or by other advisory clients of our Adviser
56% rewrittenRISKS RELATED TO THE ADVISER AND ITS AFFILIATES
The Adviser can resign on 120 days’ notice and MSC Income may not be able to find a suitable replacement within that time, resulting in a disruption in operations that could adversely affect MSC Income’s financial condition, business and results of operations
Was: Our Adviser can resign on 120 days’ notice and 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
55% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
Prepayments of MSC Income’s debt investments by its portfolio companies could adversely impact its results of operations and reduce its return on equity
Was: Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and reduce our return on equity
55% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income’s credit ratings may not reflect all risks of an investment in its debt securities
Was: Our credit ratings may not reflect all risks of an investment in our debt securities
54% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
Any unrealized depreciation that MSC Income experiences in the Investment Portfolio may be an indication of future realized losses, which could reduce income and gains available for distribution
Was: Any unrealized depreciation that we experience in our portfolio may be an indication of future realized losses, which could reduce our income and gains available for distribution
54% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income’s bylaws include an exclusive forum selection provision, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with MSC Income’s directors, officers or other agents
Was: Our bylaws include an exclusive forum selection provision, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other agents
54% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income may experience fluctuations in its operating results
Was: We may experience fluctuations in our operating results
53% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income may not be able to pay distributions to its stockholders, its distributions may not grow over time and a portion of distributions paid to its stockholders may be a return of capital
Was: We may not be able to pay distributions to our stockholders, our distributions may not grow over time, and a portion of distributions paid to our stockholders may be a return of capital
53% rewrittenRISKS RELATED TO LEVERAGE
MSC Income is subject to risks associated with any revolving credit facility that utilizes a Structured Subsidiary as MSC Income’s interests in any Structured Subsidiary are subordinated and MSC Income could be prevented from receiving cash on its equity interests from a Structured Subsidiary
Was: We are subject to risks associated with any revolving credit facility that utilizes a Structured Subsidiary as our interests in any Structured Subsidiary are subordinated and we could be prevented from receiving cash on our equity interests from a Structured Subsidiary
53% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Legislative or regulatory tax changes could adversely affect MSC Income’s stockholders
Was: Legislative or regulatory tax changes could adversely affect our stockholders
53% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Investing in MSC Income’s securities may involve a high degree of risk
Was: Investing in our securities may involve a high degree of risk
53% rewrittenRISKS RELATED TO LEVERAGE
The ability to sell investments held by a Structured Subsidiary is limited
52% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Failure to comply with applicable laws or regulations and changes in laws or regulations governing MSC Income’s operations may adversely affect its business or cause it to alter its business strategy
Was: Failure to comply with applicable laws or regulations and changes in laws or regulations governing our operations may adversely affect our business or cause us to alter our business strategy
50% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
Economic recessions or downturns could impair MSC Income’s portfolio companies’ performance and certain material defaults by such portfolio companies could harm MSC Income’s operating results
Was: Economic recessions or downturns could impair our portfolio companies’ performance and defaults by our portfolio companies will harm our operating results
50% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Market conditions may materially and adversely affect debt and equity capital markets in the U.S. and abroad, which may have a negative impact on MSC Income’s business and operations
Was: Market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which may have a negative impact on our business and operations
50% rewrittenRISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE
MSC Income is subject to risks associated with the interest rate environment and changes in interest rates will affect its cost of capital, net investment income and the value of its investments
Was: We are subject to risks associated with the interest rate environment and changes in interest rates will affect our cost of capital, net investment income and the value of our investments
50% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
MSC Income may not realize gains from its equity investments
Was: We may not realize gains from our equity investments
49% rewrittenRISKS RELATED TO BDCs
Operating under the constraints imposed on MSC Income as a BDC and RIC may hinder the achievement of its investment objectives
Was: Operating under the constraints imposed on us as a BDC and RIC may hinder the achievement of our investment objectives
48% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
The failure in cybersecurity systems, as well as the occurrence of events unanticipated in MSC Income’s and the Adviser’s disaster recovery systems and management continuity planning could impair MSC Income’s ability to conduct business effectively
Was: The failure in cybersecurity systems, as well as the occurrence of events unanticipated in our and our Adviser’s disaster recovery systems and management continuity planning could impair our ability to conduct business effectively
47% rewrittenRISKS RELATED TO LEVERAGE
(2)In order for MSC Income to cover its annual interest payments on indebtedness, MSC Income must achieve annual returns on its December 31, 2025 total assets of at least 2.5%
Was: (2)In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our December 31, 2024 total assets of at least 3.0%
46% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
The types of portfolio companies in which MSC Income invests involve significant risks and MSC Income could lose all or part of its investment
Was: The types of portfolio companies in which we invest involve significant risks and we could lose all or part of our investment
46% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
MSC Income may not have the funds or ability to make additional investments in its portfolio companies
Was: We may not have the funds or ability to make additional investments in our portfolio companies
45% rewrittenRISKS RELATED TO LEVERAGE
MSC Income may invest in derivatives or other assets that expose it to certain risks, including market risk, liquidity risk and other risks similar to those associated with the use of leverage
Was: We may invest in derivatives or other assets that expose us to certain risks, including market risk, liquidity risk and other risks similar to those associated with the use of leverage
42% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
Rising credit spreads could affect the value of MSC Income’s investments, and rising interest rates make it more difficult for portfolio companies to make periodic payments on their loans
Was: Rising credit spreads could affect the value of our investments, and rising interest rates make it more difficult for portfolio companies to make periodic payments on their loans
42% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Uncertainty about presidential administration initiatives could negatively impact MSC Income’s business, financial condition and results of operations
Was: Uncertainty about presidential administration initiatives could negatively impact our business, financial condition and results of operations
41% rewrittenRISKS RELATED TO THE ADVISER AND ITS AFFILIATES
The Adviser’s liability is limited under the Advisory Agreement, and MSC Income has agreed to indemnify the Adviser against certain liabilities, which may lead the Adviser to act in a riskier manner on MSC Income’s behalf than it would when acting for its own account
Was: Our Adviser’s liability is limited under the Advisory Agreement, and we have agreed to indemnify our Adviser against certain liabilities, which may lead our Adviser to act in a riskier manner on our behalf than it would when acting for its own account
40% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
Inflation could adversely affect the business, results of operations and financial condition of MSC Income’s portfolio companies
Was: Inflation could adversely affect the business, results of operations and financial condition of our portfolio companies
40% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Purchases of shares of MSC Income’s common stock by MSC Income or Main Street under open-market purchase programs may result in the price per share of its common stock being higher than the price that otherwise might exist in the open market
Was: Purchases of shares of our common stock by us or Main Street under open-market purchase programs may result in the price of shares of our common stock being higher than the price that otherwise might exist in the open market
39% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income will be subject to corporate-level U.S. federal income tax if it is unable to qualify as a RIC under Subchapter M of the Code
Was: We will be subject to corporate-level U.S. federal income tax if we are unable to qualify as a RIC under Subchapter M of the Code
37% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
There may be circumstances where MSC Income’s debt investments could be subordinated to claims of other creditors or it could be subject to lender liability claims
Was: There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims
37% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income may have difficulty paying the distributions required to maintain RIC tax treatment under the Code if it recognizes income before or without receiving cash representing such income
Was: We may have difficulty paying the distributions required to maintain RIC tax treatment under the Code if we recognize income before or without receiving cash representing such income
34% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income is highly dependent on information systems and systems failures could significantly disrupt its business, which may, in turn, negatively affect the market price of its common stock and its ability to pay dividends
Was: We are highly dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay dividends
28% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
Stockholders may have current tax liability on dividends they elect to reinvest in MSC Income’s common stock but would not receive cash from such dividends to pay such tax liability
Was: Stockholders may have current tax liability on dividends they elect to reinvest in our common stock but would not receive cash from such dividends to pay such tax liability
28% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income may in the future determine to issue preferred stock, which could adversely affect the market value of its common stock
Was: We may in the future determine to issue preferred stock, which could adversely affect the market value of our common stock
25% rewrittenRISKS RELATED TO MSC INCOME’S SECURITIES
MSC Income may in the future choose to pay dividends in its own stock, in which case you may be required to pay tax in excess of the cash you receive
Was: We may in the future choose to pay dividends in our own stock, in which case you may be required to pay tax in excess of the cash you receive
25% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
Certain material defaults by its portfolio companies could harm MSC Income’s operating results
Was: Defaults by our portfolio companies will harm our operating results
23% rewrittenRISKS RELATED TO MSC INCOME’S INVESTMENTS
MSC Income may be subject to risks associated with “covenant-lite” loans
Was: We may be subject to risks associated with “covenant-lite” loans

All 70 risk factors

Headings as the filing states them, in filing order.

RISKS RELATED TO MSC INCOME’S BUSINESS AND STRUCTURE

01Because the Investment Portfolio is recorded at fair value, there is and will continue to be uncertainty as to the value of MSC Income’s portfolio investments60% rewritten
02MSC Income’s financial condition and results of operations depends on the Adviser’s ability to effectively manage and deploy capital61% rewritten
03MSC Income is subject to risks associated with the interest rate environment and changes in interest rates will affect its cost of capital, net investment income and the value of its investments50% rewritten
04MSC Income faces increasing competition for investment opportunities60% rewritten
05MSC Income is dependent upon the Adviser’s key investment personnel, who are provided by Main Street, for its future success59% rewritten
06MSC Income’s success depends on Main Street’s ability to attract and retain qualified personnel in a competitive environment86% rewritten
07MSC Income may not replicate the historical results achieved by Main Street or by other advisory clients of the Adviser57% rewritten
08MSC Income’s business model depends to a significant extent upon strong referral relationships maintained by Main Street and the Adviser60% rewritten
09The Board of Directors may change MSC Income’s investment objective, operating policies, investment criteria and strategies without prior notice or stockholder approval, the effects of which may be adverse67% rewritten
10MSC Income is a non-diversified investment company within the meaning of the 1940 Act, and therefore it is not limited with respect to the proportion of its assets that may be invested in securities of a single issuer76% rewritten
11MSC Income is subject to risks related to corporate social responsibility73% rewritten
12MSC Income’s bylaws include an exclusive forum selection provision, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with MSC Income’s directors, officers or other agents54% rewritten
13Waivers, deferrals and reductions of fees and costs can temporarily result in higher returns to investors than they would otherwise receive if full fees and costs were chargedNew

RISKS RELATED TO MSC INCOME’S INVESTMENTS

14The types of portfolio companies in which MSC Income invests involve significant risks and MSC Income could lose all or part of its investment46% rewritten
15Economic recessions or downturns could impair MSC Income’s portfolio companies’ performance and certain material defaults by such portfolio companies could harm MSC Income’s operating results50% rewritten
16Rising credit spreads could affect the value of MSC Income’s investments, and rising interest rates make it more difficult for portfolio companies to make periodic payments on their loans42% rewritten
17Inflation could adversely affect the business, results of operations and financial condition of MSC Income’s portfolio companies40% rewritten
18Changes to U.S. tariff, trade and economic policies may have a negative effect on MSC Income’s portfolio companies and, in turn, harm MSC IncomeNew
19MSC Income may be exposed to higher risks with respect to its investments that include original issue discount or PIK interest
20The lack of liquidity in MSC Income’s investments may adversely affect its business61% rewritten
21MSC Income may not have the funds or ability to make additional investments in its portfolio companies46% rewritten
22MSC Income generally will not control its portfolio companies67% rewritten
23Certain material defaults by its portfolio companies could harm MSC Income’s operating results25% rewritten
24Any unrealized depreciation that MSC Income experiences in the Investment Portfolio may be an indication of future realized losses, which could reduce income and gains available for distribution54% rewritten
25Prepayments of MSC Income’s debt investments by its portfolio companies could adversely impact its results of operations and reduce its return on equity55% rewritten
26There may be circumstances where MSC Income’s debt investments could be subordinated to claims of other creditors or it could be subject to lender liability claims37% rewritten
27MSC Income may not realize gains from its equity investments50% rewritten
28MSC Income may be subject to risks associated with “covenant-lite” loans23% rewritten
29MSC Income’s investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments

RISKS RELATED TO LEVERAGE

30Because MSC Income borrows money, the potential for gain or loss on amounts invested in MSC Income is magnified and may increase the risk of such investment57% rewritten
31_____________________________83% rewritten
32(2)In order for MSC Income to cover its annual interest payments on indebtedness, MSC Income must achieve annual returns on its December 31, 2025 total assets of at least 2.5%47% rewritten
33Substantially all of MSC Income’s assets are subject to security interests under its senior securities, and if MSC Income defaults on its obligations under its senior securities, it may suffer adverse consequences, including foreclosure on its assets67% rewritten
34MSC Income is subject to risks associated with any revolving credit facility that utilizes a Structured Subsidiary as MSC Income’s interests in any Structured Subsidiary are subordinated and MSC Income could be prevented from receiving cash on its equity interests from a Structured Subsidiary53% rewritten
35The ability to sell investments held by a Structured Subsidiary is limited53% rewritten
36MSC Income may invest in derivatives or other assets that expose it to certain risks, including market risk, liquidity risk and other risks similar to those associated with the use of leverage45% rewritten

RISKS RELATED TO THE ADVISER AND ITS AFFILIATES

37The Adviser has conflicts of interest that may create an incentive for the Adviser to enter into investments that are riskier or more speculative than would otherwise be the case and the Adviser may have an incentive to increase portfolio leverage in order to earn higher management fees58% rewritten
38MSC Income may be obligated to pay the Adviser incentive compensation even if MSC Income incurs a net loss due to a decline in the value of the Investment PortfolioNew
39The Adviser may face conflicts of interest in allocating investment opportunities between MSC Income, Main Street and the other advisory clients of the Adviser77% rewritten
40Main Street owns approximately 3.5% of MSC Income’s common stock, which could result in Main Street’s influence over the outcome of matters submitted to the vote of MSC Income’s stockholders70% rewritten
41The Adviser’s liability is limited under the Advisory Agreement, and MSC Income has agreed to indemnify the Adviser against certain liabilities, which may lead the Adviser to act in a riskier manner on MSC Income’s behalf than it would when acting for its own account41% rewritten
42The Adviser can resign on 120 days’ notice and MSC Income may not be able to find a suitable replacement within that time, resulting in a disruption in operations that could adversely affect MSC Income’s financial condition, business and results of operations56% rewritten

RISKS RELATED TO BDCs

43Operating under the constraints imposed on MSC Income as a BDC and RIC may hinder the achievement of its investment objectives49% rewritten
44Failure to maintain its status as a BDC would reduce MSC Income’s operating flexibility63% rewritten
45Regulations governing MSC Income’s operation as a BDC will affect its ability to raise, and the way in which it raises, additional capital72% rewritten

RISKS RELATED TO MSC INCOME’S SECURITIES

46Investing in MSC Income’s securities may involve a high degree of risk53% rewritten
47Shares of closed-end investment companies, including BDCs such as MSC Income, may trade at a discount to their NAV per share71% rewritten
48The market price of MSC Income’s securities may be volatile and fluctuate significantly59% rewritten
49MSC Income may not be able to pay distributions to its stockholders, its distributions may not grow over time and a portion of distributions paid to its stockholders may be a return of capital53% rewritten
50Stockholders may incur dilution if MSC Income sells shares of its common stock in one or more offerings at prices below the then current NAV per share of its common stock81% rewritten
51Common stockholders’ interest in MSC Income will be diluted if MSC Income issues additional shares of its common stock, which could reduce the overall value of their investment58% rewritten
52Purchases of shares of MSC Income’s common stock by MSC Income or Main Street under open-market purchase programs may result in the price per share of its common stock being higher than the price that otherwise might exist in the open market40% rewritten
53Provisions of the Maryland General Corporation Law and MSC Income’s articles of amendment and restatement and bylaws could deter takeover attempts and have an adverse impact on the price of MSC Income’s common stock60% rewritten
54MSC Income may in the future determine to issue preferred stock, which could adversely affect the market value of its common stock28% rewritten
55MSC Income’s credit ratings may not reflect all risks of an investment in its debt securities55% rewritten
56Sales of substantial amounts of MSC Income’s common stock in the public market may have an adverse effect on the market price of its common stockNew
57MSC Income will be subject to corporate-level U.S. federal income tax if it is unable to qualify as a RIC under Subchapter M of the Code39% rewritten
58MSC Income may have difficulty paying the distributions required to maintain RIC tax treatment under the Code if it recognizes income before or without receiving cash representing such income37% rewritten
59MSC Income may in the future choose to pay dividends in its own stock, in which case you may be required to pay tax in excess of the cash you receive25% rewritten
60Stockholders may have current tax liability on dividends they elect to reinvest in MSC Income’s common stock but would not receive cash from such dividends to pay such tax liability28% rewritten
61Legislative or regulatory tax changes could adversely affect MSC Income’s stockholders53% rewritten
62Events outside of MSC Income’s control, including public health crises, supply chain disruptions and inflation, could negatively affect MSC Income and its portfolio companies and the results of MSC Income’s operations
63Market conditions may materially and adversely affect debt and equity capital markets in the U.S. and abroad, which may have a negative impact on MSC Income’s business and operations50% rewritten
64The failure in cybersecurity systems, as well as the occurrence of events unanticipated in MSC Income’s and the Adviser’s disaster recovery systems and management continuity planning could impair MSC Income’s ability to conduct business effectively48% rewritten
65MSC Income is highly dependent on information systems and systems failures could significantly disrupt its business, which may, in turn, negatively affect the market price of its common stock and its ability to pay dividends34% rewritten
66Failure to comply with applicable laws or regulations and changes in laws or regulations governing MSC Income’s operations may adversely affect its business or cause it to alter its business strategy52% rewritten
67Uncertainty about presidential administration initiatives could negatively impact MSC Income’s business, financial condition and results of operations42% rewritten
68MSC Income may experience fluctuations in its operating results54% rewritten
69Technological innovations and industry disruptions may negatively impact MSC Income64% rewritten
70MSC Income is subject to risks associated with artificial intelligence and machine learning technology61% rewritten

Other MSC Income Fund 10-Ks

FY2024 10-K risk factors
71 risks
Portfolio investments are recorded at fair value, introducing valuation uncertainty.
Filed Mar 20, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.