AGL Private Credit Income Fund 10-Q2024 Q3 Quarterly report

CERTAIN DEFINITIONS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements about our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “project,” “estimate,” “believe,” “continue” or the negatives thereof or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward- looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forward- looking statements. In light of the significant uncertainties inherent in these forward looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved.

You should carefully review the “Item 1A. Risk Factors” section of the Registration Statement for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

We have based the forward-looking statements included in this report on information available to us on the date of the filing of this report. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. You are advised to consult any additional disclosures that we make directly to you or through reports that we in the future file with the Securities and Exchange Commission, or SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. This report contains statistics and other data that have been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data.

Because we are an investment company, the forward-looking statements and projections contained in this report are excluded from the safe harbor protection provided by Section 21E of the U.S. Securities Exchange Act of 1934 Act, as amended (the “1934 Act”).

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

AGL Private Credit Income Fund

Statement of Assets and Liabilities (Unaudited)

The accompanying notes are an integral part of these financial statements.

AGL Private Credit Income Fund

Statements of Operations (Unaudited)

The accompanying notes are an integral part of these financial statements

AGL Private Credit Income Fund

Notes to Financial Statements (Unaudited)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information contained in this section should be read in conjunction with “Item 1. Financial Statements.” This discussion contains forward-looking statements, which relate to future events, our future performance or financial condition and involves numerous risks, uncertainties and other factors outside of our control including, but not limited to, those set forth herein under “Risk Factors” in Item 1A of the Registration Statement. Actual results could differ materially from those implied or expressed in any forward-looking statements.

Overview

AGL Private Credit Income Fund, which was originally established as a Delaware limited partnership named AGL Private Credit Income Fund LP on January 18, 2024, was converted to a Delaware statutory trust on September 12, 2024. The Company also intends to elect to be treated and intends to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code. We intend to be a private, perpetual-life BDC, which is a BDC whose common shares are not listed for trading on a stock exchange or other securities market. The Company is an investment vehicle of indefinite duration whose Common Shares are intended to be sold by the Company on a continuous basis at a price generally equal to the Company’s NAV per Common Share. Subject to the approval of the Board, the Company may convert into a non-traded or continuously offered BDC and upon such conversion would apply for exemptive relief to introduce multiple share classes and could, in its discretion, market to retail investors.

Our investment objective is to generate attractive risk-adjusted returns, primarily through current investment income and, to a lesser extent, capital appreciation, while limiting volatility. We intend to deploy sophisticated investment and risk management techniques to minimize interest rate, macroeconomic, concentration and other risks, while generating predictable yield and consistent credit performance across economic cycles.

Our principal investment strategy focuses on creating well-balanced portfolios of directly originated, floating rate senior secured investments in U.S. companies, including primarily first lien senior secured and unitranche loans. As deemed appropriate by our Adviser, we may also invest in second lien loans, unsecured debt, subordinated debt and other investments (which may include certain equity investments or investments in more liquid instruments). We believe the Private Credit markets offer a sound backdrop for investing success, with secular growth in demand from borrowers, a structural illiquidity premium benefiting lenders and sufficient market depth to permit effective selection of assets across economic cycles. Generally, we expect to originate our investments to large borrowers, where we consider the balance of investment opportunities and risk-adjusted returns to be most favorable over time.

AGL has entered into the Barclays Cooperation Agreement. Under the Barclays Cooperation Agreement, AGL, the Adviser and Barclays have agreed to make available to Barclays’ existing and prospective client base AGL’s Private Credit solutions, through the Company and Other AGL Accounts, alongside Barclays’ large and highly capable investment banking platform offerings.

Through the Adviser, we have access to the extensive resources, expertise and investment capabilities in senior secured credit investing of the AGL platform, including AGL’s dedicated Private Credit team. In addition, we and the Other AGL Accounts benefit from the market access and deep relationships of Barclays’ network through the Barclays Cooperation Agreement.

We deploy a rigorous, systematic and consistent investment process when evaluating potential Private Credit opportunities. We utilize a number of frameworks and methods throughout the underwriting and portfolio construction processes, AGL’s proprietary 10-D Portfolio Construction Framework to build competitively advantaged investment portfolios. In addition, we utilize highly sophisticated risk management approaches, focused on creating portfolios that are well-balanced across a variety of standard and non-standard risk factors. Our investment process and risk management approaches are informed by the decades of collective credit investing experience of our senior management, which we believe differentiate the AGL platform from its competitors.

Initial Investments

The Company entered into multiple purchase agreements (as amended, the “Purchase Agreements”) with each of Barclays Bank PLC and Cliffwater Corporate Lending Fund (together, the “Financing Providers”) and an affiliate of the Adviser, whereby we have agreed, subject to certain conditions, to purchase certain assets from the Financing Providers as described below (collectively, the “Launch Transactions”). The Launch Transactions are designed to provide the Company with a ramp-up period to build diversification and accelerate the ramp in the size of our investments to match our investment strategy.

Under the Purchase Agreements, the Company has entered into a forward obligation to purchase certain investments (the “Initial Investments”) from the Financing Providers, and each Financing Provider is obligated to settle the sale of such investments to the Company. The obligations of the Company and the Financing Providers under the Purchase Agreements are subject to the following conditions: (a) the Company must receive aggregate subscriptions of at least $1.350 billion and receive cash funding from subscriptions deposited from escrow and from debt financing in an aggregate amount for all such cash funding of at least $1.0 billion, and (b) that the Board must have approved the purchase of the specific Initial Investments (collectively, the “Purchase Conditions”). Prior to the satisfaction of the Purchase Conditions, no affiliate of the Company or the Adviser is obligated under the Purchase Agreement to purchase assets acquired by the Financing Providers, and the Company’s obligations to the Financing Providers under the Purchase Agreements are not guaranteed by any affiliate of the Adviser. It is intended that the Initial Investments will consist primarily of directly originated, first lien senior secured and unitranche floating rate debt instruments of companies located in the United States.

After we meet the Purchase Conditions, we will be obligated to purchase the Initial Investments from the Financing Providers at the price determined under the Purchase Agreements. As a general matter, the price we pay to purchase any Initial Investment will equal the price paid by the Financing Providers for the Initial Investments, subject to an increase for a financing fee to be paid by the Company to the Financing Providers. The price at which the Company ultimately purchases the Initial Investments may be greater than, or less than the fair value of such Initial Investments at the time of purchase. In addition, the Financing Providers will retain any interest and fees they receive prior to the Company’s purchase of the Initial Investments.

The Financing Providers have agreed to purchase the Initial Investments pursuant to requests we make prior to the satisfaction of the Purchase Conditions. The Financing Providers will retain full discretion whether to purchase the Initial Investments in accordance with our requests. After we meet the Purchase Conditions, (i) we will not enter into any additional Launch Transactions pursuant to the Purchase Agreements; (ii) we will purchase the then-existing Initial Investments from the Financing Providers only to the extent that we have sufficient assets to purchase all of the Initial Investments in whole (i.e., not on a serial basis); (iii) we will impose on ourselves a requirement, not an option (subject to Board approval, as set forth in the Purchase Agreements), to purchase the then-existing Initial Investments from the Financing Providers at such time as we have sufficient assets to purchase all of the Initial Investments in whole and meet all of the conditions for such purchase; and (iv) we will comply with the requirements of Rule 18f-4 under the 1940 Act with respect to our obligation to purchase the Initial Investments when triggered.

As of September 30, 2024, the Financing Providers have entered into approximately 22 investments across 9 portfolio companies, with an aggregate cost of $178,736,102 and an aggregate fair value of $178,736,102 that we intend to purchase from the Financing Providers once the Purchase Conditions have been met. Details with respect to the Investments are set forth in the following table:

*The price we pay to purchase any Initial Investment will equal the price paid by the Financing Providers for the Initial Investments, subject to an increase for a financing fee to be paid by the Company to the Financing Providers. The "Cost" set forth in the table above reflects the price paid by the Financing Providers.

Although there can be no assurances, we may in the future enter into additional purchase agreements, from time to time, with other third parties, subject to compliance with the 1940 Act.

Revenues

We expect to generate revenue in the form of interest and fee income on debt investments, capital gains, and dividend income from our equity investments in our portfolio companies. Our senior and subordinated debt investments bear interest at a fixed or floating rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid PIK interest generally become due at the maturity date. In addition, we may generate revenue from various fees in the ordinary course of business such as in the form of structuring, consent, waiver, amendment, syndication and other miscellaneous fees. Original issue discounts and market discounts or premiums are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans and debt securities as interest income. Dividend income, if any, is recognized on an accrual basis to the extent that we expect to collect such amounts.

As of September 30, 2024, we had not commenced operations.

Expenses

We do not currently have any employees and do not expect to have any employees. Prior to the Commencement of Operations, our Adviser or its affiliates will bear all organization and offering expenses in connection with the formation of us and the initial closing of the private offering. Following the Commencement of Operations, we will reimburse the Adviser or its affiliates for all such expenses that it incurs on our behalf up to a maximum aggregate amount of $5.0 million in connection with our formation and the initial closing of the private offering, and the Adviser has agreed to bear all such organization and offering expenses that were incurred prior to the Commencement of Operations in excess of $5.0 million. Our day-to-day investment operations are managed by the Adviser, pursuant to the terms of the Investment Advisory Agreement. The services necessary for our business, including the origination and administration of our investment portfolio, are provided by individuals who are employees of AGL, pursuant to the terms of the Administration Agreement. All investment professionals of the Adviser, when and to the extent engaged in providing investment advisory and management services under the Investment Advisory Agreement, and the compensation and routine compensation-related overhead expenses of such personnel allocable to such services, are provided and paid for by the Adviser and not by the Company. We bear all other costs and expenses of the Company’s operations and transactions, including those listed in the Registration Statement.

From time to time, the Adviser or its affiliates may pay third-party providers of goods or services. We reimburse the Adviser or such affiliates thereof for any such amounts paid on our behalf. All of the foregoing expenses are ultimately borne by our shareholders.

We have entered into an Expense Support and Conditional Reimbursement Agreement (the “Expense Support Agreement”) with the Adviser, under which the Adviser has contractually agreed to pay, on a quarterly basis, certain operating expenses of the Company on the Company’s behalf, such that these expenses do not exceed 1.50% (on an annualized basis) of the Company’s net asset value as described in “Item 1. Financial Statements—Notes to Financial Statements—Note 3. Agreements and Related Party Transactions.”

Results of Operations

As of September 30, 2024, we had not commenced operations.

Investment Advisory Agreement

The Company is externally managed by the Adviser pursuant to an Investment Advisory Agreement between the Company and the Adviser. Subject to the overall supervision of the Board, the Adviser is responsible for the overall management and affairs of the Company and has full discretion to invest the assets of the Company in a manner consistent with the Company’s investment objectives.

Under the Investment Advisory Agreement, the Company will pay the Adviser (i) a Management Fee (as defined below) and (ii) an Incentive Fee (as defined below) as compensation for the investment advisory and management services it will provide to the Company thereunder. The fees that are payable under the Investment Advisory Agreement for any partial period are appropriately prorated.

Management fee

The Base Management Fee is calculated at an annual rate of 1.25% of the average value of the Company’s net assets at the end of the two most recently completed calendar quarters. The Adviser may, in its discretion, defer payment of the Base Management Fee, without interest, to any subsequent quarter. Base Management Fees for any partial quarter will be prorated based on the number of days in the quarter.

Incentive fee

The Company will pay the Adviser an Incentive Fee consisting of two parts, which are described below:

Incentive Fee on Income

The Incentive Fee on Income is calculated and payable quarterly in arrears based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding quarter.

“Pre-Incentive Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees, other than fees for providing managerial assistance, such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses for the quarter (including the Management Fee, expenses payable under the Administration Agreement and any interest expense and dividends paid on any issued and outstanding preferred shares, but excluding the incentive fee and any servicing fees and/or distribution fees paid to broker dealers). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount (“OID”) debt instruments with payment-in-kind (“PIK”) interest and zero-coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For the purposes of computing the Company’s Pre-Incentive Fee Net Investment Income, the calculation methodology looks through total return swaps as if the Company owned the referenced assets directly.

The incentive fee on income for each quarter is calculated as follows:

Incentive Fee on Capital Gains

The Company shall pay the Adviser an Incentive Fee on Capital Gains calculated and payable in arrears in cash as of the end of each calendar year or upon the termination of the Investment Advisory Agreement in an amount equal to 12.50% of the Company’s realized capital gains, if any, on a cumulative basis from the date of its election to be regulated as a BDC through the end of a given calendar year or upon the termination of the Investment Advisory Agreement, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains.

Administration Agreement

The Company entered into the Administration Agreement with AGL US DL Administrator LLC, a Delaware limited liability company (the “Administrator”). Under the Administration Agreement, the Administrator provides the Company with certain administrative services necessary for the Company to conduct its business. The Company has agreed to reimburse the Administrator for all reasonable costs and expenses and the Company’s allocable portion of compensation of certain of the Administrator’s personnel and the Administrator’s overhead (including rent, office equipment and utilities) and other expenses incurred by the Administrator in providing non-advisory services, facilities and personnel and performing its administrative obligations, as provided by the Administration Agreement. In addition, subject to the approval of the Board, the Administrator may delegate its duties under the Administration Agreement to affiliates or third parties, and the Company will reimburse the expenses of these parties incurred directly and/or reimburse such expenses if paid by the Administrator on the Company’s behalf.

Expense Support and Conditional Reimbursement Agreement

The Company has entered into the Expense Support and Conditional Reimbursement Agreement (the “Expense Support Agreement”) with the Adviser, pursuant to which the Adviser shall pay, on a quarterly basis Other Operating Expenses (as defined below) of the Company on the Company’s behalf (each such payment, a “Required Expense Payment” such that Other Operating Expenses of the Company do not exceed 1.50% on annualized basis) of the Company’s net asset value. “Other Operating Expenses” means the Company’s organization and offering expenses, professional fees, trustee fees, administration fees, and other general and administrative expenses (including the Company’s allocable portion of compensation, overhead (including rent, office equipment and utilities)) and other expenses incurred by the Administrator in performing its administrative obligations under the Administration Agreement, excluding the Company’s Management Fees and Incentive Fees owed to the Adviser, financing fees and costs, brokerage commissions, extraordinary expenses and any interest expenses owed by the Company, all as determined in accordance with US GAAP.

The Adviser may elect to pay certain additional expenses of the Company on the Company’s behalf (each such payment, a “Voluntary Expense Payment” and together with a Required Expense Payment, the “Expense Payments”). In making a Voluntary Expense Payment, the Adviser will designate, as it deems necessary or advisable, what type of expense it is paying (including, whether it is paying organizational or offering expenses); provided that no portion of a Voluntary Expense Payment will be used to pay any interest expense or shareholder servicing and/or distribution fees of the Company.

Following any fiscal quarter in which Available Operating Funds (as defined below) exceed the cumulative distributions accrued to the Company’s shareholders based on distributions declared with respect to record dates occurring in such fiscal quarter (the amount of such excess being hereinafter referred to as “Excess Operating Funds”), the Company shall pay such Excess Operating Funds, or a portion thereof, to the Adviser until such time as all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such fiscal quarter have been reimbursed. As a result, no waived amounts will be reimbursed after three years from the date of the respective waiver. Any payments required to be made by the Company shall be referred to herein as a “Reimbursement Payment.” “Available Operating Funds” means the sum of (i) the Company’s net investment company taxable income (including net short-term capital gains reduced by net long-term capital losses), (ii) the Company’s net capital gains (including the excess of net long-term capital gains over net short-term capital losses) and (iii) dividends and other distributions paid to the Company on account of investments in portfolio companies (to the extent such amounts listed in clause (iii) are not included under clauses (i) and (ii) above).

The amount of the Reimbursement Payment for any fiscal quarter will equal the lesser of (i) the Excess Operating Funds in such quarter and (ii) the aggregate amount of all Expense Payments made by the Adviser to the Company within three years prior to the last business day of such fiscal quarter that have not been previously reimbursed by the Company to the Adviser; provided that the Adviser may waive its right to receive all or a portion of any Reimbursement Payment in any particular fiscal quarter, in which case such waived amount will remain unreimbursed Expense Payments reimbursable in future quarters pursuant to the terms of the Expense Support Agreement.

No Reimbursement Payment for any quarter shall be made if: (i) the Effective Rate of Distributions Per Share declared by the Company at the time of such Reimbursement Payment is less than the Effective Rate of Distributions Per Share at the time the Expense Payment was made to which such Reimbursement Payment relates, (ii) the Company’s Operating Expense Ratio at the time of such Reimbursement Payment is greater than the Operating Expense Ratio at the time the Expense Payment was made to which such Reimbursement Payment relate, or (iii) the Company’s Other Operating Expenses at the time of such Reimbursement Payment exceeds 1.50% of the Company’s net asset value. For purposes of the Agreement, “Effective Rate of Distributions Per Share” means the annualized rate (based on a 365 day year) of regular cash distributions per share exclusive of returns of capital, distribution rate reductions due to distribution and shareholder servicing fees, and declared special dividends or special distributions, if any. The “Operating Expense Ratio” is calculated by dividing Operating Expenses, less organizational and offering expenses, base management and incentive fees owed to the Adviser, shareholder servicing and/or distribution fees, and interest expense, by the Company’s net assets. “Operating Expenses” means all of the Company’s operating costs and expenses incurred, as determined in accordance with generally accepted accounting principles for investment companies.

The Company’s obligation to make a Reimbursement Payment shall automatically become a liability of the Company on the last business day of the applicable fiscal quarter, except to the extent the Adviser has waived its right to receive such payment for the applicable quarter.

Resource Sharing Agreement

The Adviser has entered into a Resource Sharing Agreement (the “Resource Sharing Agreement”) with AGL, pursuant to which AGL provides the Adviser with experienced investment professionals and access to the resources of AGL so as to enable the Adviser to fulfill its obligations under the Investment Advisory Agreement. Through the Resource Sharing Agreement, the Adviser intends to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of AGL’s investment professionals.

Commitments and Contingencies

In the normal course of business, the Company may enter into contracts that provide a variety of general indemnifications. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise, and accordingly, the Company has not accrued any liability in connection with such indemnifications.

The Adviser has agreed to reimburse all of the Company’s organizational, professional, trustees’ fees and other expenses for the three months ended September 30, 2024, and for the period January 18, 2024 (date of inception) through September 30, 2024, amounting to $735,683 and $4,274,809 under the Expense Support Agreement. The Company may be obligated to make a Reimbursement Payment to the Adviser for such expenses through September 30, 2027, in accordance with the Expense Support and Conditional Reimbursement Agreement, however as of September 30, 2024, the Company does not consider the Reimbursement Payment to be probable and estimable.

Further, as discussed above, on April 22, 2024, the Company entered into the Purchase Agreements with the Financing Providers, whereby the Company has agreed, subject to certain conditions, to purchase certain assets from the Financing Providers under certain conditions. For more information regarding the Initial Investments see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations —Initial Investments.”

Financial Condition, Liquidity and Capital Resources

As of September 30, 2024, we had not commenced operations and had not entered into any investments. We expect to generate cash primarily from (i) the net proceeds of the Offering, (ii) cash flows from our operations, (iii) any financing arrangements we may enter into in the future and (iv) any future offerings of our equity or debt securities. Our primary uses of cash will be for (i) investments in accordance with the Company’s investment objective and strategy; (ii) general corporate purposes; and (iii) payment of operating expenses, including management and administrative services fees and other expenses such as due diligence expenses relating to potential new investments.

From time to time, we may enter into credit facilities, increase the size of our existing credit facilities and/or issue debt securities, including unsecured notes. In accordance with the 1940 Act, with certain limited exceptions, upon Commence of Operations, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. We seek to carefully consider our unfunded commitments for the purpose of planning our ongoing financial leverage.

Equity Activity

On May 29, 2024, AGL contributed $10,000 ($25 per share) of capital to the Company in exchange for 400 shares of the Company’s Common Shares. Also, as of September 30, 2024, the Company has executed subscription agreements with third-party investors for $1,003,550,000 of capital commitments.

Share Repurchase Program

Beginning no later than the fourth anniversary of the Initial Closing, and at the discretion of the Board, we intend to commence a share repurchase program (the “Share Repurchase Program”) in which we intend to offer to repurchase, in each quarter, up to 5% of our Common Shares outstanding (either by number of shares or aggregate NAV, as determined by the Board) as of the close of the previous calendar quarter. The Board may amend or suspend the Share Repurchase Program at any time if in its reasonable judgment it deems such action to be in our best interest and the best interest of our shareholders, such as when a repurchase offer would place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on the Company that would outweigh the benefit of the repurchase offer. As a result, share repurchases may not be available each quarter. The Company intends to conduct such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Exchange Act and the 1940 Act. All shares purchased by us pursuant to the terms of each repurchase offer will be retired and thereafter will be authorized and unissued shares.

Under the Share Repurchase Program, to the extent we offer to repurchase shares in any particular quarter, we expect to repurchase shares pursuant to quarterly share repurchases using a purchase price equal to the NAV per share as of the last calendar day of the immediately prior quarter (the “Valuation Date”). Shareholders should keep in mind that if they tender Common Shares in a repurchase offer with a Valuation Date that is within the 12-month period following the initial issue date of their tendered Common Shares, the Company may repurchase such Common Shares subject to an “early repurchase deduction” of 2% of the aggregate NAV of the Common Shares repurchased (an “Early Repurchase Deduction”). The Early Repurchase Deduction will be retained by the Company for the benefit of remaining holders of Common Shares. This Early Repurchase Deduction will also generally apply to minimum account repurchases.

In the event the amount of Common Shares tendered for repurchase exceeds the repurchase offer amount, Common Shares will be repurchased on a pro rata basis. All unsatisfied repurchase requests must be resubmitted in the next quarterly repurchase offer, or upon the recommencement of the Share Repurchase Program, as applicable. We have not commenced the Share Repurchase Program.

Distributions

Our Board intends to declare and pay distributions on a quarterly basis.

Distribution Reinvestment Plan

We have adopted an “opt out” Dividend Reinvestment Plan (“DRIP”) pursuant to which shareholders can elect to “opt out” in their Subscription Agreements (subject to limitations that may apply in certain U.S. states and other jurisdictions which either do not permit automatic enrollment in DRIPs absent affirmative enrollment and other U.S. states and jurisdictions in which investors must receive their distributions in cash). We will reinvest all distributions declared by our Board on behalf of shareholders who do not elect to receive their distributions in cash (the “Participants”). As a result, if our Board declares a distribution, then shareholders who have not elected to “opt out” of the DRIP will have their distributions automatically reinvested in additional Common Shares. The timing and amount of any future distributions to shareholders are subject to applicable legal restrictions and the sole discretion of the Board.

Related-Party Transactions

We expect to enter into a number of business relationships with affiliated or related parties, including the Investment Advisory Agreement, Administration Agreement, Expense Support and Conditional Reimbursement Agreement and Resource Sharing Agreement.

In addition to the aforementioned agreements, The Company and the Adviser have applied for, but not yet obtained, an exemptive order from the SEC that would permit us, among other things, to co-invest with certain other persons, including certain affiliates of the Adviser and certain funds managed and controlled by the Adviser and its affiliates, in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors.

Recent Developments

Commencement of Operations

On October 11, 2024, the Company elected to be regulated as a BDC and commenced operations (“Commencement of Operations”). The Board approved the Company’s purchase of the assets that were subject to the Launch Transactions, which approval included the waiver by the Company of any conditions precedent to such purchase. As a result, on October 21, 2024, the Company purchased $176.0 million of assets pursuant to purchase agreements with each of the Financing Providers.

Financing Arrangements

Capital Call Credit Agreement

On October 18, 2024 (the “Effective Date”), the Company entered into a revolving credit facility (the “Capital Call Credit Agreement”), among, inter alios, the Company, as borrower, the lenders from time to time party thereto and Société Générale, as administrative agent, sole lead arranger and letter of credit issuer (in such capacity, the “Administrative Agent”).

The Capital Call Credit Agreement provides for borrowings in U.S. dollars, Euro, Sterling, Canadian dollars and such other currencies to be mutually agreed in an initial aggregate amount of up to $250.0 million with an option for the Company to request, at one or more times, that existing and/or new lenders, at their election, provide up to $500.0 million.

Availability under the Capital Call Credit Agreement will terminate on the earlier of October 17, 2025 (the “Stated Maturity Date”), which may be extended for an additional period of up to 364 days, subject to the consent of the Administrative Agent and extending lenders, and the date of termination of the revolving commitments thereunder.

Loan Facility with Société Générale

On October 18, 2024, PCIF Vigilant Funding LLC (“SPV”), a direct wholly-owned subsidiary of the Company, as borrower, and the Company, as equity holder and servicer, entered into a loan facility (the “Loan Facility”) for revolving and term loans pursuant to a Loan and Servicing Agreement (the “Loan Agreement”), with the lenders from time to time party thereto, Société Générale, as agent (the “Agent”), U.S. Bank, National Association, as collateral agent (“Collateral Agent”), collateral administrator, and document custodian. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.

The initial maximum principal amount under the Loan Agreement is $300.0 million and the Loan Agreement includes an accordion provision to permit increases to the total facility amount up to a maximum of $500.0 million, subject in each case to the satisfaction of certain conditions. Proceeds from loans made under the Loan Facility may be used for SPV’s general corporate purposes, to fund collateral obligations acquired by SPV, to pay certain fees and expenses and to make distributions to the Company, subject to certain conditions set forth in the Loan Agreement.

Revolving loans borrowed under the Loan Facility may be repaid and reborrowed until the end of the Revolving Period, which can occur no later than October 18, 2027 (unless extended), and all amounts outstanding under the Loan Facility must be repaid by the earlier of (i) October 18, 2029 or (ii) the occurrence of an event of default.

The Loan Facility is secured by all of the assets held by SPV. The Loan Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for loan facilities of this nature.

Unregistered Sales of Common Stock

On October 21, 2024, the Company sold and issued approximately 4,000,000 Common Shares for an aggregate consideration of approximately $100.0 million at a price of $25.00 per Common Share.

Appointment of CFO

Effective October 8, 2024, in connection with Wynne Comer resigning from her position as the interim Chief Financial Officer of the Company, Ted Gilpin was appointed to serve as the Company’s Chief Financial Officer. Ms. Comer will remain a trustee of the Company.

Critical Accounting Policies

There have been no material changes to our critical accounting policies discussed in the Registration Statement. Our critical accounting policies should be read in connection with the risk factors described in the Registration Statement.

The preparation of the financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies should be read in connection with our risk factors as described in “Item 1A. – Risk Factors” of the Registration Statement.

Contractual Obligations

The Company is required to report its investments for which current market values are not readily available at fair value. The Company will value its investments in accordance with ASC 820, Fair Value Measurement, which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date. ASC 820 prioritizes the use of observable market prices derived from such prices over entity-specific inputs. Due to the inherent uncertainties of valuation, certain estimated fair values may differ significantly from the values that would have been realized had a ready market for these investments existed, and these differences could be material.

We entered into the Investment Advisory Agreement with the Adviser to provide us with investment advisory services and the Administration Agreement with the Administrator to provide us with administrative services. We have entered into the Expense Support Agreement with the Adviser to provide us with support with respect to certain expenses and subject to reimbursement. Payments for investment advisory services under the Investment Advisory Agreements and reimbursements under the Administration Agreement are described in Item 1. Financial Statements—Notes to Financial Statements—Note 3. Agreements and Related Party Transactions.”

We may establish one or more additional credit facilities or enter into other financing arrangements from time to time to facilitate investments and the timely payment of our expenses. It is anticipated that any such credit facilities will bear interest at floating rates at to-be-determined spreads over Secured Overnight Financing Rate (“SOFR”) (or other applicable reference rate). We cannot assure shareholders that we will be able to enter into a credit facility on favorable terms or at all. In connection with a credit facility or other borrowings, lenders may require us to pledge assets, commitments and/or drawdowns (and the ability to enforce the payment thereof) and may ask to comply with positive or negative covenants that could have an effect on our operations.

Off-Balance Sheet Arrangements

Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not expect to have any off-balance sheet financing or liabilities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We will be subject to financial market risks, including changes in interest rates. A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to the variable rate investments we may hold and to declines in the value of any fixed rate investments we may hold. A rise in interest rates would also be expected to lead to higher cost on our floating rate borrowings. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations.

We plan to invest primarily in illiquid debt securities of private companies. Most of our investments will not have a readily available market price, and we will value these investments at fair value as determined in good faith pursuant to procedures adopted by, and under the oversight of, the Board in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make.

Item 4. Controls and Procedures.

As of September 30, 2024 (the end of the period covered by this report), in accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) and determined that our disclosure controls and procedures are effective as of the end of the period covered by the Quarterly Report on Form 10-Q and provide reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

There have been no changes in our internal control over financial reporting that occurred during our fiscal quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently subject to any material pending legal proceedings. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us.

Item 1A. Risk Factors.

For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed under the heading “Risk Factors” in the Registration Statement, as may be amended and supplemented from time to time. There have been no material changes to the risk factors previously disclosed in the Registration Statement. Additional risks and uncertainties are not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition and/or operating results. During the fiscal quarter ended September 30, 2024, there were no material changes from the risk factors set forth in our Registration Statement.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On May 29, 2024, AGL purchased $10,000 of Common Shares of the Company at a price of $25 per Common Share as the Company’s initial capital. On October 21, 2024, the Company sold and issued approximately 4,000,000 Common Shares for an aggregate consideration of approximately $100.0 million at a price of $25.00 per Common Share. These Common Shares were issued and sold in reliance upon Section 4(a)(2) of the Securities Act, which provides an exemption from the registration requirements of the Securities Act.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the three months ended September 30, 2024 (and are numbered in accordance with Item 601 of Regulation S-K under the Securities Act).

* Attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.