Gresham Capital CLO IV B.V. - Irish Stock Exchange

Investment and Repayment of Payments under the Class A1A Notes
During the Ramp-Up Period and the Reinvestment Period, provided that the conditions to funding are met,
the Issuer (acting through the Collateral Manager) may draw on the Class A1A Notes and invest the proceeds in
the acquisition of Additional Collateral Debt Securities which satisfy the Eligibility Criteria and in accordance
with the Reinvestment Criteria.
To the extent the Principal Proceeds remain uninvested during the Reinvestment Period, such amount may
be used to repay outstanding fundings under the Class A1A Notes as set out in the Priorities of Payment. The
ability to draw upon the Class A1A Notes may be cancelled in certain situations (see “Description of the Class
A1A Note Purchase Agreement” below), in which event the principal so repaid will cease to be available for
reinvestment. The impact of the cancellation of the ability to draw under the Class A1A Notes may adversely
impact the holders of the Class N Notes due to the leveraged nature of the Class N Notes.
The Issuer will be exposed to credit risk in respect of the Class A1A Noteholders with respect to any
Drawing required to be made to the Issuer by the Class A1A Noteholders. The Issuer will depend upon each
Class A1A Noteholder to perform its obligations pursuant to the terms of the Class A1A Notes. If a Class A1A
Noteholder defaults or becomes unable to perform its obligations pursuant to the terms and conditions of the
Class A1A Notes, due to insolvency or otherwise, the Issuer may not receive funding to which it would
otherwise be entitled, which may in turn affect the ability of the Issuer to invest in further Collateral Debt
Securities which could in turn impact on the ability of the Issuer to repay the Notes.
The entitlement of the Noteholders in respect of the exercise of remedies under the terms and conditions of
the Notes if an Issuer Event of Default occurs thereunder and the exercise of certain other voting rights will be
determined by reference to the aggregate principal amount of the Notes Outstanding. For the purposes of
calculating the voting rights of the Class A1A Noteholders, it will be by reference to the Total Commitments
rather than the Total Outstandings.
Each Class A1A Noteholder or its guarantor, as applicable, will be required to meet the Rating Requirement
on the Issue Date. There can be no assurance that any Class A1A Noteholder or its guarantor, as applicable, will
maintain the Rating Requirement. If at any time the Class A1A Noteholder or its guarantor, as applicable, fails
to maintain the Rating Requirement, it is required to take remedial action pursuant to the Class A1A Note
Purchase Agreement.
Pursuant to the Class A1A Note Purchase Agreement, the Class A1A Notes are also subject to additional
transfer restrictions which will not apply to the other Notes, e.g. transferees of the Class A1A Notes will be
required to meet with the Rating Requirement. Such restrictions are more particularly described in the Class
A1A Note Purchase Agreement.
Concentration Risk
Payments in respect of the Notes could be impacted by the concentration of the Collateral Debt Securities in
the Portfolio in any one area, country, obligor or industry with respect to collateral defaults. The obligors under
certain Collateral Debt Securities in the Portfolio may be incorporated or operating in jurisdictions other than
those which have adopted the Euro as their currency. Changes in the exchange rate between foreign currencies
and the Euro and changes in the economies of the European jurisdictions which have adopted the Euro and other
jurisdictions (including non-European jurisdictions) may therefore affect defaults on such Collateral Debt
Securities disproportionately. In addition, although Synthetic Securities must be denominated in Euro or
Sterling, the Reference Obligations underlying Synthetic Securities may be denominated in a currency other
than Euro or Sterling. As such, the value of such Synthetic Securities may be adversely affected by fluctuations
and devaluations of the currency in which the Reference Obligation is denominated.
Illiquidity of Collateral Debt Securities
Many of the Collateral Debt Securities purchased by the Collateral Manager, on behalf of the Issuer will
have no, or only a limited, trading market. The Issuer’s investment in illiquid Collateral Debt Securities may
restrict its ability to dispose of investments in a timely fashion and at a market price which is at or above par as
well as its ability to take advantage of market opportunities, although the Issuer is generally prohibited by the
Collateral Management Agreement from selling Collateral Debt Securities, except under certain limited
circumstances described under “Description of the Portfolio—Sale of Collateral Debt Securities and
Reinvestment Criteria”. Illiquid Collateral Debt Securities may trade at a discount from comparable, more
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