Company: PDCC
Filing Date: 2025-09-03
Form Type: N-CSRS
Source: 0001398344-25-017467
Chunk: 12

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-03
Form: N-CSRS
Chunk 12
---
 on the best information available in the circumstances.

Pursuant to Rule 2a-5 under the 1940 Act adopted by
the United States Securities and Exchange Commission (or “SEC”) in December 2020 (“Rule 2a-5”), the Board has elected
to designate the Adviser as “valuation designee” to perform fair value determinations, subject to Board oversight and certain
other conditions. In the absence of readily available market quotations, as defined by Rule 2a-5, the Adviser determines the fair value
of the Company’s investments in accordance with its written valuation policy approved by the Board. There is no single method for
determining fair value in good faith. As a result, determining fair value requires judgment be applied to the specific facts and circumstances
of each portfolio investment while employing a consistently applied valuation process for the types of investments held by the Company.
Due to the uncertainty of valuation, this estimate may differ significantly from the value that would have been used had a ready market
for the investments existed, and the differences could be material.

The fair value hierarchy is categorized into three levels based on the
inputs as follows:

● Level 1 – Valuations based on unadjusted quoted prices
in active markets for identical assets or liabilities that the Company can access.

● Level 2 – Valuations based on quoted prices in markets
that are not active or for which all significant inputs are observable, either directly or indirectly.

● Level 3 – Valuations based on inputs that are unobservable
and significant to the overall fair value measurement.

The availability of valuation techniques and observable
inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether
the investment is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent
that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires
more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of
future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may
be materially higher or lower than the values that would have been used had a ready market for the investments existed.

Accordingly, the degree of judgment exercised by the
Company in determining fair value is greatest for investments categorized in Level 3. In certain cases, the inputs used to measure fair
value may fall