Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 209

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 209
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swap transactions for certain entities, which may include the Company. In the event the Company is required to post collateral in the
form of initial margin in respect of its uncleared swap transactions, all such collateral will be posted with a third-party custodian
pursuant to a triparty custody agreement between the Company, its dealer counterparty and an unaffiliated custodian.

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Although the Dodd-Frank Act
requires many OTC derivative transactions previously entered into on a principal-to-principal basis to be submitted for clearing by a
regulated clearinghouse, certain of the derivatives that may be traded by the Company may remain principal-to-principal or OTC contracts
between the Company and third parties. The risk of counterparty non-performance can be significant in the case of these OTC instruments,
and "bid-ask" spreads may be unusually wide in these markets. To the extent not mitigated by implementation of the Dodd-Frank
Act, if at all, the risks posed by such instruments and techniques, which can be complex, may include: (1) credit risks (the exposure
to the possibility of loss resulting from a counterparty's failure to meet its financial obligations), as further discussed below; (2)
market risk (adverse movements in the price of a financial asset or commodity); (3) legal risks (the characterization of a transaction
or a party's legal capacity to enter into it could render the transaction unenforceable, and the insolvency or bankruptcy of a counterparty
could pre-empt otherwise enforceable contract rights); (4) operational risk (inadequate controls, deficient procedures, human error, system
failure or fraud); (5) documentation risk (exposure to losses resulting from inadequate documentation); (6) liquidity risk (exposure to
losses created by inability to prematurely terminate derivative transactions); (7) systemic risk (the risk that financial difficulties
in one institution or a major market disruption will cause uncontrollable financial harm to the financial system); (8) concentration risk
(exposure to losses from the concentration of closely related risks such as exposure to a particular industry or exposure linked to a
particular entity); and (9) settlement risk (the risk faced when one party to a transaction has performed its obligations under a contract
but has not yet received value from its counterparty).

Swap dealers and major swap
participants that are registered with the CFTC and with whom the Company may trade are subject to minimum capital and margin requirements.
These requirements may apply