Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 220

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 220
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 the Company, loss of the premium paid may be offset by an increase in the value
of the Company’s securities or by a decrease in the cost of the acquisition of securities by the Company.

The Company may write (i.e.,
sell) “covered” call options on securities for any lawful purpose, including as a means of increasing the yield on its assets
and as a means of providing limited protection against decreases in its market value. The Company may engage in a covered call option
writing (selling) program in an attempt to generate additional income or provide a partial hedge to another position of the Company. A
call option is “covered” if the Company either owns the underlying instrument or has an absolute and immediate right (such
as a call with the same or a later expiration date) to acquire that instrument. The underlying instruments of such covered call options
may consist of individual equity securities, pools of equity securities, ETFs or indexes.

The writing of covered call
options is a more conservative investment technique than writing of naked or uncovered options, but capable of enhancing the Company’s
total return. When the Company writes a covered call option, it profits from the premium paid by the buyer but gives up the opportunity
to profit from an increase in the value of the underlying security above the exercise price. At the same time, the Company retains the
risk of loss from a decline in the value of the underlying security during the option period. Although the Company may terminate its obligation
by executing a closing purchase transaction, the cost of effecting such a transaction may be greater than the premium received upon its
sale, resulting in a loss to the Company. If such an option expires unexercised, the Company realizes a gain equal to the premium received.
Such a gain may be offset or exceeded by a decline in the market value of the underlying security during the option period. If an option
is exercised, the exercise price, the premium received and the market value of the underlying security determine the gain or loss realized
by the Company.

When the Company writes an
option, if the underlying securities do not increase or decrease, as applicable, to a price level that would make the exercise of the
option profitable to the holder thereof, the option will generally expire without being exercised and the Company will realize as profit
the premium received for such option. When a call option of which the Company is the writer is exercised, the Company will be required
to sell the underlying securities to the option holder at the strike price and will not