CLOUGH GLOBAL DIVIDEND AND INCOME FUND
CLOUGH GLOBAL EQUITY FUND
CLOUGH GLOBAL OPPORTUNITIES FUND
Schedules of Investments
January 31, 2024
Clough Global Dividend and Income Fund
Schedule of Investments
January 31, 2024 (Unaudited)
See Notes to Schedules of Investments
2
Clough Global Dividend and Income Fund
Schedule of Investments
January 31, 2024 (Continued) (Unaudited)
See Notes to Schedules of Investments
3
Clough Global Dividend and Income Fund
Schedule of Investments
January 31, 2024 (Continued) (Unaudited)
See Notes to Schedules of Investments
4
Clough Global Equity Fund
Schedule of Investments
January 31, 2024 (Unaudited)
See Notes to Schedules of Investments
5
Clough Global Equity Fund
Schedule of Investments
January 31, 2024 (Continued) (Unaudited)
See Notes to Schedules of Investments
6
Clough Global Equity Fund
Schedule of Investments
January 31, 2024 (Continued) (Unaudited)
See Notes to Schedules of Investments
7
Clough Global Opportunities Fund
Schedule of Investments
January 31, 2024 (Unaudited)
See Notes to Schedules of Investments
8
Clough Global Opportunities Fund
Schedule of Investments
January 31, 2024 (Continued) (Unaudited)
See Notes to Schedules of Investments
9
Clough Global Opportunities Fund
Schedule of Investments
January 31, 2024 (Continued) (Unaudited)
See Notes to Schedules of Investments
10
Clough Global Funds
Notes to Schedules of Investments
January 31, 2024 (Unaudited)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING AND OPERATING POLICIES
Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund (each a “Fund”, collectively the “Funds”), are closed-end management investment companies registered under the Investment Company Act of 1940 (the “1940 Act”). The Funds were organized under the laws of the state of Delaware on April 27, 2004, January 25, 2005, and January 12, 2006, respectively for Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. The Funds were previously registered as non-diversified investment companies. As a result of ongoing operations, each of the Funds became a diversified company. The Funds may not resume operating in a non-diversified manner without first obtaining shareholder approval. Each Fund’s investment objective is to provide a high level of total return. Each Declaration of Trust provides that the Board of Trustees (the “Board”) may authorize separate classes of shares of beneficial interest. The common shares of Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund are listed on the NYSE American LLC and trade under the ticker symbols “GLV”, “GLQ” and “GLO” respectively.
The following is a summary of significant accounting policies followed by the Funds. These policies are in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures, including the disclosure of contingent assets and liabilities, in the financial statements during the reporting period. Management believes the estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the financial statements may differ from the value the Funds ultimately realize upon sale of the securities. Each Fund is considered an investment company for financial reporting purposes under GAAP and follows the accounting and reporting guidance applicable to investment companies as codified in Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies.
The net asset value (“NAV”) per share of each Fund is determined no less frequently than daily, on each day that the New York Stock Exchange (“NYSE” or the “Exchange”) is open for trading, as of the close of regular trading on the Exchange (normally 4:00 p.m. New York time). Trading may take place in foreign issues held by a Fund at times when the Fund is not open for business. As a result, each Fund’s NAV may change at times when it is not possible to purchase or sell shares of that Fund.
Investment Valuation – Securities and securities sold short, held by each Fund, for which exchange quotations are readily available, are valued at the last sale price, or if no sale price or if traded on the over-the-counter market, at the mean of the bid and asked prices on such day. Money market funds are valued based on the closing NAV. Most securities listed on a foreign exchange are valued at the last sale price at the close of the exchange on which the security is primarily traded. In certain countries market maker prices are used since they are the most representative of the daily trading activity. Market maker prices are usually the mean between the bid and ask prices. Certain markets are not closed at the time that the Funds price their portfolio securities. In these situations, snapshot prices are provided by the individual pricing services or other alternate sources at the close of the NYSE as appropriate. Securities not traded on a particular day are valued at the mean between the last reported bid and the asked quotes, or the last sale price when appropriate; otherwise fair value will be determined by the Board-appointed fair valuation committee. Debt securities for which the over-the-counter market is the primary market are normally valued on the basis of prices furnished by one or more pricing services or dealers at the mean between the latest available bid and asked prices. As authorized by the Board, debt securities (including short-term obligations that will mature in 60 days or less) may be valued on the basis of valuations furnished by a pricing service which determines valuations based upon market transactions for normal, institutional-size trading units of securities or a matrix method which considers yield or price of comparable bonds provided by a pricing service.
If the price of a security is unavailable, or the price of a security is unreliable, e.g., due to the occurrence of a significant event, the security may be valued at its fair value determined the valuation designee. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated the Fund's investment adviser, Clough Capital Partners L.P. ("Clough" or the "Adviser"), as the valuation designee with respect to the fair valuation of each Fund's portfolio securities, subject to oversight by and periodic reporting to the Board. For this purpose, fair value is the price that a Fund reasonably expects to receive on a current sale of the security. Due to the number of variables affecting the price of a security, however; it is possible that the fair value of a security may not accurately reflect the price that a Fund could actually receive on a sale of the security.
A three-tier hierarchy has been established to classify fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
Various inputs are used in determining the value of each Fund’s investments as of the reporting period end. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
Level 1 – Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;
Level 2 – Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 – Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date
11
Clough Global Funds
Notes to Schedules of Investments
January 31, 2024 (Continued) (Unaudited)
The following is a summary of the inputs used as of January 31, 2024, in valuing each Fund’s investments carried at value.
Clough Global Dividend and Income Fund |
||||||||||||||||
Investments in Securities at Value(a) |
Level 1 - Unadjusted Quoted Prices |
Level 2 - Other Significant Observable Inputs |
Level 3 - Significant Unobservable Inputs |
Total |
||||||||||||
Common Stocks |
$ | 83,711,031 | $ | – | $ | – | $ | 83,711,031 | ||||||||
Preferred Stocks |
1,028,864 | – | – | 1,028,864 | ||||||||||||
Corporate Bonds |
– | 8,999,560 | – | 8,999,560 | ||||||||||||
Asset-Backed Securities |
– | 19,506 | – | 19,506 | ||||||||||||
Money Market Funds |
652,933 | – | – | 652,933 | ||||||||||||
Total |
$ | 85,392,828 | $ | 9,019,066 | $ | – | $ | 94,411,894 | ||||||||
Other Financial Instruments |
||||||||||||||||
Liabilities |
||||||||||||||||
Securities Sold Short |
||||||||||||||||
Common Stocks |
(15,281,600 | ) | – | – | (15,281,600 | ) | ||||||||||
Exchange-Traded Funds |
(751,076 | ) | – | – | (751,076 | ) | ||||||||||
Total |
$ | (16,032,676 | ) | $ | – | $ | – | $ | (16,032,676 | ) | ||||||
Clough Global Equity Fund |
||||||||||||||||
Investments in Securities at Value(a) |
Level 1 - Unadjusted Quoted Prices |
Level 2 - Other Significant Observable Inputs |
Level 3 - Significant Unobservable Inputs |
Total |
||||||||||||
Common Stocks |
||||||||||||||||
Communication Services |
$ | 12,248,825 | $ | – | $ | – | $ | 12,248,825 | ||||||||
Consumer Discretionary |
25,653,412 | – | – | 25,653,412 | ||||||||||||
Consumer Staples |
3,925,187 | – | – | 3,925,187 | ||||||||||||
Energy |
8,355,997 | – | – | 8,355,997 | ||||||||||||
Financials |
10,838,229 | – | – | 10,838,229 | ||||||||||||
Health Care |
22,779,280 | – | 226,169 | 23,005,449 | ||||||||||||
Industrials |
19,592,215 | – | – | 19,592,215 | ||||||||||||
Information Technology |
45,509,469 | – | – | 45,509,469 | ||||||||||||
Materials |
6,959,930 | – | – | 6,959,930 | ||||||||||||
Real Estate |
848,960 | – | – | 848,960 | ||||||||||||
Utilities |
2,204,580 | – | – | 2,204,580 | ||||||||||||
Convertible Corporate Bonds |
– | – | 24,469 | 24,469 | ||||||||||||
Money Market Funds |
4,064,048 | – | – | 4,064,048 | ||||||||||||
Total |
$ | 162,980,132 | $ | – | $ | 250,638 | $ | 163,230,770 | ||||||||
Other Financial Instruments |
||||||||||||||||
Liabilities |
||||||||||||||||
Securities Sold Short |
||||||||||||||||
Common Stocks |
(25,735,563 | ) | – | – | (25,735,563 | ) | ||||||||||
Total |
$ | (25,735,563 | ) | $ | – | $ | – | $ | (25,735,563 | ) | ||||||
12
Clough Global Funds
Notes to Schedules of Investments
January 31, 2024 (Continued) (Unaudited)
Clough Global Opportunities Fund |
||||||||||||||||
Investments in Securities at Value(a) |
Level 1 - Unadjusted Quoted Prices |
Level 2 - Other Significant Observable Inputs |
Level 3 - Significant Unobservable Inputs |
Total |
||||||||||||
Common Stocks |
||||||||||||||||
Communication Services |
$ | 21,249,437 | $ | – | $ | – | $ | 21,249,437 | ||||||||
Consumer Discretionary |
41,610,820 | – | – | 41,610,820 | ||||||||||||
Consumer Staples |
6,606,200 | – | – | 6,606,200 | ||||||||||||
Energy |
12,852,985 | – | – | 12,852,985 | ||||||||||||
Financials |
16,843,798 | – | – | 16,843,798 | ||||||||||||
Health Care |
36,967,555 | – | 619,190 | 37,586,745 | ||||||||||||
Industrials |
33,973,497 | – | – | 33,973,497 | ||||||||||||
Information Technology |
71,618,242 | – | – | 71,618,242 | ||||||||||||
Materials |
12,167,794 | – | – | 12,167,794 | ||||||||||||
Real Estate |
1,485,680 | – | – | 1,485,680 | ||||||||||||
Utilities |
3,797,077 | – | – | 3,797,077 | ||||||||||||
Corporate Bonds |
– | 27,814,084 | – | 27,814,084 | ||||||||||||
Convertible Corporate Bonds |
– | – | 57,094 | 57,094 | ||||||||||||
Money Market Funds |
6,841,425 | – | – | 6,841,425 | ||||||||||||
Total |
$ | 266,014,510 | $ | 27,814,084 | $ | 676,284 | $ | 294,504,878 | ||||||||
Other Financial Instruments |
||||||||||||||||
Liabilities |
||||||||||||||||
Securities Sold Short |
||||||||||||||||
Common Stocks |
(46,791,431 | ) | – | – | (46,791,431 | ) | ||||||||||
Total |
$ | (46,791,431 | ) | $ | – | $ | – | $ | (46,791,431 | ) | ||||||
(a) |
For detailed descriptions and other security classifications, see the accompanying Schedule of Investments. |
In the event an independent pricing service is unable to provide an evaluated price for a security or the Adviser believes the price provided is not reliable, securities of each Fund may be valued at fair value as described above. In these instances the Adviser may seek to find an alternative independent source, such as a broker/dealer to provide a price quote, or by using evaluated pricing models similar to the techniques and models used by the independent pricing service. These fair value measurement techniques may utilize unobservable inputs (Level 3).
Foreign Securities – Each Fund may invest a portion of its assets in foreign securities. In the event that a Fund executes a foreign security transaction, the Fund will generally enter into a foreign currency spot contract to settle the foreign security transaction. Foreign securities may carry more risk than U.S. securities, such as political, market and currency risks.
The accounting records of each Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange at period end. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. Although the net assets and the values are presented at the foreign exchange rates at market close, the Funds do not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in prices of securities held.
A foreign currency spot contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. Each Fund may enter into foreign currency spot contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to a Fund include the potential inability of the counterparty to meet the terms of the contract.
Exchange Traded Funds – Each Fund may invest in Exchange Traded Funds (“ETFs”), which are funds whose shares are traded on a national exchange. ETFs may be based on underlying equity or fixed income securities, as well as commodities or currencies. ETFs do not sell individual shares directly to investors and only issue their shares in large blocks known as “creation units.” The investor purchasing a creation unit then sells the individual shares on a secondary market. Although similar diversification benefits may be achieved through an investment in another investment company, ETFs generally offer greater liquidity and lower expenses. Because an ETF incurs its own fees and expenses, shareholders of a Fund investing in an ETF will indirectly bear those costs. Such Funds will also incur brokerage commissions and related charges when purchasing or selling shares of an ETF. Unlike typical investment company shares, which are valued once daily, shares in an ETF may be purchased or sold on a securities exchange throughout the trading day at market prices that are generally close to the NAV of the ETF.
Short Sales – Each Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When a Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which a Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of the short sale.
Each Fund's obligation to replace the borrowed security will be secured by collateral deposited with the broker-dealer, usually cash, U.S. government securities or other liquid securities. Each Fund will also be required to designate on its books and records similar collateral with its custodian to the extent, if any, necessary so that the aggregate collateral value is at all times at least equal to the current value of the security sold short. Each Fund is obligated to pay interest to the broker for any debit balance of the margin account relating to short sales.
13
Clough Global Funds
Notes to Schedules of Investments
January 31, 2024 (Continued) (Unaudited)
Each Fund may also sell a security short if it owns at least an equal amount of the security sold short or another security convertible or exchangeable for an equal amount of the security sold short without payment of further compensation (a short sale against-the-box). In a short sale against-the-box, the short seller is exposed to the risk of being forced to deliver stock that it holds to close the position if the borrowed stock is called in by the lender, which would cause gain or loss to be recognized on the delivered stock. Each Fund expects normally to close its short sales against-the-box by delivering newly acquired stock.
Restricted Securities: Although the Funds will invest primarily in publicly traded securities, they may invest a portion of their assets (up to 10% of its value) in restricted securities. Restricted securities are securities that may not be sold to the public without an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act") or, if they are unregistered, may be sold only in a privately negotiated transaction or pursuant to an exemption from registration.
Restricted securities as of January 31, 2024, were as follows.
Clough Global Dividend and Income Fund |
||||||||||||||||||||
Security |
% of Net Assets |
Acquisition Date |
Principal Amount |
Cost |
Value |
|||||||||||||||
AerCap Global Aviation Trust |
1.05% | 9/14/2023 | $ | 840,000 | $ | 827,487 | $ | 835,441 | ||||||||||||
Melco Resorts Finance Ltd. |
0.29 | 9/21/2020 |
250,000 | 255,301 | 234,180 | |||||||||||||||
NGL Energy Operating LLC |
1.20 | 3/2/2023 | 940,000 | 922,376 | 957,324 | |||||||||||||||
The Hertz Corp. |
0.39 | 12/20/2023 | 390,000 | 322,257 | 308,539 | |||||||||||||||
Transocean, Inc. |
2.14 | 7/21/2023 | 1,720,000 | 1,666,692 | 1,708,356 | |||||||||||||||
TOTAL |
5.07% | $ | 4,140,000 | $ | 3,994,113 | $ | 4,043,840 | |||||||||||||
Clough Global Equity Fund |
||||||||||||||||||||
Security |
% of Net Assets |
Acquisition Date |
Principal Amount |
Cost |
Value |
|||||||||||||||
Amphivena Convertible Note PP |
0.02% | 8/27/2021 |
$ | 108,750 | $ | 108,750 | $ | 24,469 | ||||||||||||
Amphivena Therapeutics, Inc. Series C |
0.09 | 4/8/2019 | 334,425 | 1,199,997 | 128,185 | |||||||||||||||
Centrexion Therapeutics Corp. |
0.00 | 3/19/2019 | 4,336 | 48,741 | 5,979 | |||||||||||||||
Centrexion Therapeutics Corp. Series D Preferred |
0.07 | 12/18/2017 | 66,719 | 701,250 | 92,005 | |||||||||||||||
TOTAL |
0.18% | $ | 514,230 | $ | 2,058,738 | $ | 250,638 | |||||||||||||
Clough Global Opportunities Fund |
||||||||||||||||||||
Security |
% of Net Assets |
Acquisition Date |
Principal Amount |
Cost |
Value |
|||||||||||||||
AerCap Global Aviation Trust |
1.02% | 9/14/2023 | $ | 2,530,000 | $ | 2,492,312 | $ | 2,516,268 | ||||||||||||
Air Canada 2013-1 Class A Pass Through Trust |
1.44 | 5/3/2022 | 3,661,397 | 3,604,445 | 3,558,452 | |||||||||||||||
Amphivena Convertible Note PP |
0.02 | 8/27/2021 | 253,750 | 253,750 | 57,094 | |||||||||||||||
Amphivena Therapeutics, Inc. Series C |
0.12 | 4/8/2019 | 780,326 | 2,799,997 | 299,099 | |||||||||||||||
Centrexion Therapeutics Corp. |
0.01 | 3/19/2019 | 14,166 | 159,240 | 19,535 | |||||||||||||||
Centrexion Therapeutics Corp. Series D Preferred |
0.12 | 12/18/2017 | 217,952 | 2,290,759 | 300,556 | |||||||||||||||
NGL Energy Operating LLC |
1.14 | 3/2/2023 | 2,760,000 | 2,709,190 | 2,810,867 | |||||||||||||||
The Hertz Corp. |
0.38 | 12/20/2023 | 1,180,000 | 975,035 | 933,530 | |||||||||||||||
Transocean, Inc. |
2.08 | 7/21/2023 | 5,150,000 | 4,991,176 | 5,115,134 | |||||||||||||||
TOTAL |
6.33% | $ | 16,547,591 | $ | 20,275,904 | $ | 15,610,535 | |||||||||||||
Counterparty Risk: Each of the Funds run the risk that the issuer or guarantor of a fixed income security, the counterparty to an over-the-counter derivatives contract, a borrower of each Fund’s securities or the obligor of an obligation underlying an asset-backed security will be unable or unwilling to make timely principal, interest, or settlement payments or otherwise honor its obligations. In addition, to the extent that each of the Funds use over-the-counter derivatives, and/or has significant exposure to a single counterparty, this risk will be particularly pronounced for each of the Funds.
Other Risk Factors: Investing in the Funds may involve certain risks including, but not limited to, the following:
Unforeseen developments in market conditions may result in the decline of prices of, and the income generated by, the securities held by the Funds. These events may have adverse effects on the Funds such as a decline in the value and liquidity of many securities held by the Funds, and a decrease in NAV. Such unforeseen developments may limit or preclude the Funds’ ability to achieve their investment objective.
Investing in stocks may involve larger price fluctuation and greater potential for loss than other types of investments. This may result in the securities held by the Funds being subject to larger short-term declines in value compared to other types of investments.
The Funds may have elements of risk due to their investments in foreign issuers located in various countries outside the U.S. Such investments may subject the Funds to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Investments in securities of non-U.S. issuers have unique risks not present in securities of U.S. issuers, such as greater price volatility and less liquidity.
14
Clough Global Funds
Notes to Schedules of Investments
January 31, 2024 (Continued) (Unaudited)
Fixed income securities are subject to credit risk, which is the possibility that a security could have its credit rating downgraded or that the issuer of the security could fail to make timely payments or default on payments of interest or principal. Additionally, fixed income securities are subject to interest rate risk, meaning the decline in the price of debt securities that accompanies a rise in interest rates. Bonds with longer maturities are subject to greater price fluctuations than bonds with shorter maturities.
The Funds invest in bonds which are rated below investment grade. These high yield bonds may be more susceptible than higher grade bonds to real or perceived adverse economic or industry conditions. The secondary market, on which high yield bonds are traded, may also be less liquid than the market for higher grade bonds.
The economic impacts of a global pandemic may adversely impact the Funds’ ability to reach their investment objectives and may adversely affect the value and liquidity of the Funds’ investments. Because of uncertainties in valuation, values reflected in the Schedules of Investments may differ from the value received upon sales of those investments. These circumstances may continue for an extended period of time, and may adversely affect the value and liquidity of the Funds’ investments.
NOTE 2 - COMMITTED FACILITY AGREEMENT AND LENDING AGREEMENT
Each Fund entered into a financing package that includes a Committed Facility Agreement (the “Agreement”) dated January 16, 2009, as amended, between each Fund and BNP Paribas Prime Brokerage, Inc. (“BNP”) that allows each Fund to borrow funds from BNP. Each Fund entered a Special Custody and Pledge Agreement (the “Pledge Agreement”) dated December 9, 2013, as amended, between each Fund, the Funds’ custodian, and BNP. As of October 31, 2016, the Pledge Agreement was assigned from BNP to BNP Paribas Prime Brokerage International, Ltd. Per the Pledge Agreement, borrowings under the Agreement are secured by assets of each Fund that are held by the Fund’s custodian in a separate account (the “pledged collateral”). On January 31, 2024, the pledged collateral was valued at $67,679,495, $119,132,738 and $198,660,242 for the Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund, respectively. Each Fund may, with 30 days’ notice, reduce the Maximum Commitment Financing to the highest possible amount that, if fully drawn, would be in compliance with the applicable asset coverage requirement of Section 18 of the 1940 Act. Interest is charged at OBFR plus 0.80% on the amount borrowed.
The Maximum Commitment Financing allowed under the Agreement is the lower of the outstanding borrowings of each Fund or $63,300,000, $139,500,000 and $257,000,000 for the Clough Global Dividend and Income Fund, Clough Global Equity Fund and the Clough Global Opportunities Fund, respectively. As of January 31, 2024, the outstanding borrowings for Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $16,000,000, $29,000,000 and $52,000,000, respectively. The interest rate applicable to the borrowings of Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund on January 31, 2024, was 6.11%.
The Lending Agreement is a separate side-agreement between each Fund and BNP pursuant to which BNP may borrow a portion of the pledged collateral (the “Lent Securities”) in an amount not to exceed the outstanding borrowings owed by a Fund to BNP under the Agreement. The Lending Agreement is intended to permit each Fund to significantly reduce the cost of its borrowings under the Agreement. BNP has the ability to re-register the Lent Securities in its own name or in another name other than the Fund to pledge, re-pledge, sell, lend or otherwise transfer or use the collateral with all attendant rights of ownership. (It is each Fund’s understanding that BNP will perform due diligence to determine the creditworthiness of any party that borrows Lent Securities from BNP.) Each Fund may designate any security within the pledged collateral as ineligible to be a Lent Security, provided there are eligible securities within the pledged collateral in an amount equal to the outstanding borrowing owed by a Fund. During the year in which the Lent Securities are outstanding, BNP must remit payment to each Fund equal to the amount of all dividends, interest or other distributions earned or made by the Lent Securities.
Under the terms of the Lending Agreement, the Lent Securities are marked to market daily, and if the value of the Lent Securities exceeds the value of the then-outstanding borrowings owed by a Fund to BNP under the Agreement (the “Current Borrowings”), BNP must, on that day, either (1) return Lent Securities to each Fund’s custodian in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings; or (2) post cash collateral with each Fund’s custodian equal to the difference between the value of the Lent Securities and the value of the Current Borrowings. If BNP fails to perform either of these actions as required, each Fund will recall securities, as discussed below, in an amount sufficient to cause the value of the outstanding Lent Securities to equal the Current Borrowings. Each Fund can recall any of the Lent Securities and BNP shall, to the extent commercially possible, return such security or equivalent security to each Fund’s custodian no later than three business days after such request. If a Fund recalls a Lent Security pursuant to the Lending Agreement, and BNP fails to return the Lent Securities or equivalent securities in a timely fashion, BNP shall remain liable for the ultimate delivery to each Fund’s custodian of such Lent Securities, or equivalent securities, and for any buy-in costs that the executing broker for the sales transaction may impose with respect to the failure to deliver. Should the borrower of the securities fail financially, the Funds have the right to reduce the outstanding amount of the Current Borrowings against which the pledged collateral has been secured. Although risk is mitigated by the collateral, the Funds could experience a delay in recovering their securities and possible loss of income or value if the borrower fails to return the borrowed securities. Under the terms of the Lending Agreement, each Fund shall have the right to apply and set-off an amount equal to one hundred percent (100%) of the then current fair value of such Lent Securities against the Current Borrowings. As of January 31, 2024, the value of the Lent Securities for Clough Global Dividend and Income Fund, Clough Global Equity Fund and Clough Global Opportunities Fund were $13,771,191, $25,530,028, and $40,506,757, respectively.
15