Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 53

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 53
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 the global financial crisis, the
COVID-19 global pandemic and the conflict in Ukraine, countries around the world have injected trillions of dollars into the economy in
an effort to prevent more severe economic turbulence. This unprecedented amount of government funding and support, has given rise to significant
increases in government spending and (in many instances) significant increases to the amount of debt issued by governments in the international
bond markets. There can be no assurance that governments will be able to repay all of this debt in a timely way, or at all. Government
default on debt would have negative consequences for our portfolio, disrupting financial markets generally and potentially impacting the
credit risk of our investments and also of certain assets that provide the credit support for our investments. In addition, the United
States and other countries have experienced, and may in the future experience, supply chain disruptions for a number of goods in the marketplace.
This potential disruption in supply of goods, combined with unprecedented levels of such government spending and monetary policy, has
materially increased inflation of the US dollar and other currencies. Inflation and rapid fluctuations in inflation rates have had in
the past, and in the future may have, negative effects on economic and financial markets, which may consequently have a materially adverse
impact on our investment performance.

Deflation risk is the risk that prices throughout
the economy decline over time—the opposite of inflation. Deflation may have an adverse effect on the creditworthiness of obligors
and may make obligor defaults more likely, which may result in a decline in the value of the portfolio investments. Moreover, if deflation
was to persist and interest rates were to decline, obligors might refinance their obligations in relation to CLO Collateral at lower interest
rates which could shorten the average life of the CLOs.

Our investments are subject to credit risk.

The CLOs in which we invest, and the loans underlying
such CLOs, are subject to the risk of an issuer's, or debtor’s, ability to meet principal and interest payments on the obligation
(known as "credit risk") and may also be subject to price volatility due to such factors as interest rate sensitivity, market
perception of the creditworthiness of the issuer and general market liquidity (known as "market risk"). Lower-rated or unrated
(i.e., junk) securities are more likely to react to developments affecting market and credit risk than are more highly rated securities,
which primarily react to movements in the general level of interest rates. Yields