Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 44

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 44
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of the Adviser as well as indirectly bearing the management and performance fees charged by the underlying CLO advisor.

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In the course of our investing activities, we
will pay management and incentive fees to the Adviser and reimburse the Adviser for certain expenses it incurs. As a result, investors
in our securities invest on a “gross” basis and receive distributions on a “net” basis after expenses, potentially
resulting in a lower rate of return than an investor might achieve through direct investments.

Our investments in CLO securities may be less transparent to us and our stockholders than direct investments in the collateral.

We invest primarily in equity tranches of CLOs
and other related investments, including junior and senior debt tranches of CLOs. Generally, there may be less information available to
us regarding the collateral held by such CLOs than if we had invested directly in the debt of the underlying obligors. As a result, our
stockholders will not know the details of the collateral of the CLOs in which we invest or receive the reports issued with respect to
such CLO. In addition, none of the information contained in certain monthly reports nor any other financial information furnished to us
as an investor in a CLO is audited and reported upon, nor is an opinion expressed, by an independent public accountant. Our CLO investments
are also subject to the risk of leverage associated with the debt issued by such CLOs and the repayment priority of equity holders in
such CLOs.

CLO investments involve complex documentation and accounting considerations.

CLOs and other structured finance securities in
which we intend to invest are often governed by a complex series of legal documents and contracts. As a result, the risk of dispute over
interpretation or enforceability of the documentation may be higher relative to other types of investments.

The accounting and tax implications of the CLO
investments that we intend to make are complicated. In particular, reported earnings from CLO equity securities are recorded under U.S.
generally accepted accounting principles, or “GAAP”, based upon an effective yield calculation. Current taxable earnings on
certain of these investments, however, will generally not be determinable until after the end of the fiscal year of each individual CLO
that ends within our fiscal year, even though the investments are generating cashflow throughout the fiscal year. The tax treatment of
certain of these investments may result in higher distributable earnings in the early years and a capital