Company: PDCC
Filing Date: 2025-03-11
Form Type: N-CSR
Source: 0001398344-25-005419
Chunk: 13

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-03-11
Form: N-CSR
Chunk 13
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 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 into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value
hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant
to the fair value measurement.

Fair value is a market-based measure considered from
the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily
available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability
at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation.
In periods of market dislocation, the observability of prices and inputs may be reduced for many investments. This condition could cause
an investment to be reclassified to a lower level within the fair value hierarchy.

Fair Value – Valuation Techniques and Inputs

Collateralized Loan Obligations

The fair value of collateralized loan obligations
is determined by recently executed transaction, market price quotations (where observable) using the mid between bid and ask, or third-party
pricing sources. In instances where significant inputs are unobservable or when multiple quotations are unavailable, the investments may
be fair valued based on criteria such as the transaction price on entry, price of comparable securities or a discounted cash flow model
to reflect expected exit values in the investment’s principal market under current market conditions; under such circumstances,
these investments will be categorized in Level 3 of the fair value hierarchy.

Loan Accumulation Facilities

The Company may invest in loan accumulation facilities
for the purpose of holding senior secured corporate loans during the warehouse period of an impending collateralized loan obligation.
The warehouse period terminates when the collateralized loan obligation closes; at this time the underlying assets held by the loan accumulation
facilities are securitized into the collateralized loan obligation portfolio (the “Securitization Period”). As of 12/31/2024
the company did not hold any Loan Accumulation Facilities.

Pursuant to the governing document of each loan accumulation
facility, loans acquired by loan accumulation facilities are typically required to be