Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 169

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 169
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, therefore, affect the character,
amount and timing of distributions to stockholders. These provisions also (a) will require us to mark-to-market certain types of the positions
in our portfolio (i.e., treat them as if they were closed out), and (b) may cause us to recognize income without receiving cash
with which to make distributions in amounts necessary to satisfy the Distribution Requirement for qualifying to be taxed as a RIC or the
Excise Tax Distribution Requirement. We intend to monitor our transactions, intent to make the appropriate tax elections and intend to
make the appropriate entries in our books and records when we acquire any futures contract, option or hedged investment in order to mitigate
the effect of these rules and prevent our disqualification from being taxed as a RIC.

Generally, our hedging transactions (including
certain covered call options) may result in “straddles” for U.S. federal income tax purposes. The straddle rules may affect
the character of our realized gains (or losses). In addition, our realized losses on positions that are part of a straddle may be deferred
under the straddle rules, rather than being taken into account in calculating the taxable income for the taxable year in which the losses
are realized. Hedging transactions may increase the amount of our realized short-term capital gain which is taxed as ordinary income when
distributed to shareholders.

We may make one or more of the elections available
under the Code which are applicable to straddles. If we make any of the elections, the amount, character and timing of the recognition
of gains or losses from the affected straddle positions will be determined under rules that vary according to the election(s) made. The
rules applicable under certain of the elections may operate to accelerate the recognition of gains or losses from the affected straddle
positions.

Because the straddle rules may affect the character
of gains or losses, defer losses and/or accelerate the recognition of gains or losses from the affected straddle positions, the amount
which may be distributed to shareholders, and which will be taxed to them as ordinary income or long-term capital gain, may be increased
or decreased as compared to a fund that did not engage in such hedging transactions.

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Certain of our investment practices are subject
to special and complex U.S. federal income tax provisions that may, among other things, (i) convert dividends that would otherwise constitute
qualified dividend income into ordinary income, (ii) treat dividends that would otherwise be eligible for deductions