Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 61

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 61
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 times experienced significant and rapid decline when a substantial number of holders (or a few holders of a significantly large
“block” of the securities) decided to sell. In addition, we (or the CLOs in which we invest) may have difficulty disposing
of certain high-yield investments because there may be a thin trading market for such securities. To the extent that a secondary trading
market for non-investment grade high-yield investments does exist, it would not be as liquid as the secondary market for highly rated
investments. Reduced secondary market liquidity would have an adverse impact on the fair value of the securities and on our direct or
indirect ability to dispose of particular securities in response to a specific economic event, such as deterioration in the creditworthiness
of the issuer of such securities.

As secondary market trading volumes increase,
new loans frequently contain standardized documentation to facilitate loan trading that may improve market liquidity. There can be no
assurance, however, that future levels of supply and demand in loan trading will provide an adequate degree of liquidity or that the current
level of liquidity will continue. Because holders of such loans are offered confidential information relating to the borrower, the unique
and customized nature of the loan agreement, and the private syndication of the loan, loans are not purchased or sold as easily as publicly
traded securities are purchased or sold. Although a secondary market may exist, risks similar to those described above in connection with
an investment in high-yield debt investments are also applicable to investments in lower rated loans.

The securities issued by CLOs generally offer
less liquidity than other investment grade or high-yield corporate debt, and are subject to certain transfer restrictions that impose
certain financial and other eligibility requirements on prospective transferees. Other investments that we may purchase in privately negotiated
transactions may also be illiquid or subject to legal restrictions on their transfer. As a result of this illiquidity, our ability to
sell certain investments quickly, or at all, in response to changes in economic and other conditions and to receive a fair price when
selling such investments, may be limited, which could prevent us from making sales to mitigate losses on such investments. In addition,
CLOs are subject to the possibility of liquidation upon an event of default, which could result in full loss of value to the CLO equity
and junior debt investors. CLO equity tranches are the most likely tranche to suffer a loss of all of their value in these circumstances.

We may be exposed to