Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 51

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 51
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OR settings immediately after
December 31, 2021 and ceased for the remaining U.S. dollar LIBOR settings immediately after June 30, 2023. The U.S. Federal Reserve,
based on the recommendations of the New York Federal Reserve’s Alternative Reference Rate Committee (comprised of major derivative
market participants and their regulators), has begun publishing SOFR, which has generally replaced U.S. dollar LIBOR as the reference
rate of choice for CLOs as well as for a significant portion of the broadly syndicated secured loan market in which CLOs invest. Alternative
reference rates for other currencies have also been announced or have already begun publication. There is no assurance that the composition
or characteristics of SOFR, or any other alternative reference rate, will be similar to or produce the same value or economic equivalence
as LIBOR or that it will have the same volume or liquidity as did LIBOR prior to its discontinuance or unavailability. This, in turn,
may affect the value or liquidity or return on our investments, result in costs incurred in connection with closing out positions and
entering into new trades and reduce the effectiveness of related fund transactions such as hedges. These risks may also apply with respect
to potential changes in connection with other interbank offering rates (e.g., Euribor) and other indexes, rates and values that
may be used as “benchmarks” and are the subject of recent regulatory reform. The replacement of LIBOR with SOFR as the preferred
refence rate for CLOs and their underlying investments could have a significant impact on our investments and the market for CLO securities
generally. Accordingly, it is difficult to predict the full impact of the transition away from LIBOR on the Company until new reference
rates and fallbacks for both legacy and new products, instruments and contracts have a longer term track record.

Interest Rate Mismatch. Many
underlying corporate borrowers can elect to pay interest based on various reference rates (such as 1-month term SOFR or 3-month term SOFR)
in respect of the loans held by CLOs in which we intend to invest, in each case plus an applicable spread, whereas CLOs generally pay
interest to holders of the CLO’s debt tranches based on 3-month term SOFR plus a spread. Because SOFR was developed relatively recently,
there is little historical information regarding the spread between its various terms. The development of a material mismatch in the rate
at which CLO