Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 221

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 221
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 participate in any increase in the price of such
securities above the strike price. When a put option of which the Company is the writer is exercised, the Company will be required to
purchase the underlying securities at a price in excess of the market value of such securities.

The Company may purchase
and write options on an exchange or OTC. OTC options differ from exchange-traded options in several respects. They are transacted directly
with dealers and not with a clearing corporation or futures commission merchant, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a wider range of expiration dates and exercise prices than
are available for exchange-traded options. Because OTC options are not traded on an exchange, pricing is normally done by reference to
information from a market maker. It is the SEC’s position that OTC options are generally illiquid. The market value of an option
generally reflects the market price of an underlying security. Other principal factors affecting market value include supply and demand,
interest rates, the pricing volatility of the underlying security and the time remaining until the expiration date.

Risks.Risks associated
with options transactions include: (i) the success of a hedging strategy may depend on an ability to predict movements in the prices of
individual securities, fluctuations in markets and movements in interest rates; (ii) there may be an imperfect correlation between the
movement in prices of options and the securities underlying them; (iii) there may not be a liquid secondary market for options; and (iv)
though the Company will receive a premium when it writes covered call options, it may not participate fully in a rise in the market value
of the underlying security.

| 9 |

Swaps, Caps, Floors, Collars and Swaptions. Swaps are centrally-cleared or OTC derivative products in which two parties agree to exchange payment streams calculated
by reference to an underlying asset, such as a rate, index, instrument or securities (referred to as the “underlying”) and
a predetermined amount (referred to as the “notional amount”). The underlying for a swap may be an interest rate (fixed or
floating), a currency exchange rate, a commodity price index, a security, group of securities or a securities index, a combination of
any of these, or various other rates, securities, instruments, assets or indexes. Swap agreements generally do not involve the delivery
of the underlying or principal, and a