3906--3/2/2009--ALLIED_CAPITAL

related topics

{loan, real, estate}

{tax, income, asset}

{condition, economic, financial}

{stock, price, share}

{cost, contract, operation}

{investment, property, distribution}

{stock, price, operating}

{competitive, industry, competition}

{personnel, key, retain}

{capital, credit, financial}

{interest, director, officer}

{cost, regulation, environmental}

Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional debt and equity capital. Our credit ratings may change and may not reflect all risks of an investment in the debt securities. Risks Related to Current Economic and Market Conditions We are currently in a period of capital markets disruption and severe recession and we do not expect these conditions to improve in the near future. These market conditions have materially and adversely affected the debt and equity capital markets in the United States, which has had and could continue to have a negative impact on our business and operations. Economic recessions, including the current global recession, could impair our portfolio companies and harm our operating results. Risks Related to Asset Values Declining asset values and illiquidity in the corporate debt markets have adversely affected, and may continue to adversely affect, the fair value of our portfolio investments, reducing the value of our assets. Substantially all of our portfolio investments, which are generally illiquid, are recorded at fair value as determined in good faith by our Board of Directors and, as a result, there is uncertainty regarding the value of our portfolio investments. Risks Related to Our Portfolio Our portfolio of investments is illiquid. Investing in private companies involves a high degree of risk. Our borrowers may default on their payments, which may have a negative effect on our financial performance. We may be unable to fund our commitments to our portfolio companies as they become due, which may have a material adverse effect on our business. Our private finance investments may not produce current returns or capital gains. Our financial results could be negatively affected if a significant portfolio investment fails to perform as expected. We operate in a competitive market for investment opportunities. Risks Related to Regulation as a Business Development Company and Regulated Investment Company Loss of regulated investment company tax treatment could negatively impact our ability to service our debt and pay dividends. Failure to invest a sufficient portion of our assets in qualifying assets could preclude us from investing in accordance with our current business strategy. Changes in the law or regulations that govern us could have a material impact on us or our operations. Risks Related to Our Ability to Pay Dividends to Our Shareholders There is a risk that our common stockholders may not receive dividends or distributions. Risks Related to Changes in Interest Rates Changes in interest rates may affect our cost of capital and net investment income. Risks Related to Asset Management Activities There are potential conflicts of interest between us and the funds managed by us. Our business depends on our key personnel. Results may fluctuate and may not be indicative of future performance. Our common stock price may be volatile. The trading market or market value of our publicly issued debt securities may be volatile.

Full 10-K form ▸

3906--3/2/2009--ALLIED_CAPITAL_CORP