Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 208

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 208
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 and Related Risks

The Company may utilize derivative
instruments, such as forwards, futures, options, and swaps, repurchase agreements, reverse repurchase agreements and sale-buybacks, and
a variety of special investment instruments and techniques, to hedge against various risks (such as changes in interest rates or other
factors that affect security values) or for non-hedging purposes to pursue the Company’s investment objectives, including to indirectly
invest in or gain exposure to certain asset classes. Certain of the special investment instruments and techniques that the Company may
use are speculative and involve a high degree of risk, particularly in the context of non-hedging transactions.

Derivatives. In an
attempt to reduce systemic and counterparty risks associated with over-the-counter (“OTC”) derivatives transactions, the Dodd-Frank
Wall Street Reform and Consumer protections Act (“Dodd-Frank Act”) requires that a substantial portion of OTC derivatives
be executed in regulated markets and submitted for clearing to regulated clearinghouses. The Commodities Futures Trading Commission (“CFTC”)
also requires a substantial portion of derivative transactions that have historically been executed on a bilateral basis in the OTC markets
to be executed through a regulated swap execution facility or designated contract market. The SEC is expected to eventually impose a similar
requirement with respect to security-based swaps. Such requirements could limit the ability of the Company to invest or remain invested
in derivatives and may make it more difficult and costly for investment funds, including the Company, to enter into highly tailored or
customized transactions. They may also render certain strategies in which the Company might otherwise engage impossible or so costly that
they will no longer be economical to implement.

OTC trades submitted for
clearing will be subject to minimum initial and variation margin requirements set by the relevant clearinghouse, as may be adjusted to
a higher amount by the Company's Futures Commission Merchant, as well as possible SEC- or CFTC-mandated margin requirements. With respect
to uncleared swaps, swap dealers are required to collect variation margin from the Company and may be required to collect initial margin
from the Company pursuant to the CFTC's or the Prudential Regulators' uncleared swap margin rules. Both initial and variation margin must
be in the form of eligible collateral, and may be composed of cash and/or securities, subject to applicable regulatory haircuts. These
rules also mandate that collateral in the form of initial margin be posted to cover potential future exposure attributable to uncleared