Company: PDCC
Filing Date: 2025-03-11
Form Type: N-CSR
Source: 0001398344-25-005419
Chunk: 21

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-03-11
Form: N-CSR
Chunk 21
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 positions.

Market Risk

Political, regulatory, economic and social developments,
and developments that impact specific economic sectors, industries or segments of the market, can affect the value of the Company’s
investments. A disruption or downturn in the capital markets and the credit markets could impair the Company’s ability to raise
capital, reduce the availability of suitable investment opportunities for the Company, or adversely and materially affect the value of
the Company’s investments, any of which would negatively affect the Company’s business. These risks may be magnified if certain
events or developments adversely interrupt the global supply chain and could affect companies worldwide.

Loan Accumulation Facility Investment Risk

The Company may invest in loan accumulation facilities,
which are short to medium term facilities often provided by the bank that will serve as placement agent or arranger on a CLO transaction
and which acquire loans on an interim basis which are expected to form part of the portfolio of a future CLO. Investments in loan accumulation
facilities have risks similar to those applicable to investments in CLOs. Leverage is typically utilized in such a facility and as such
the potential risk of loss will be increased for such facilities employing leverage. In the event a planned CLO is not consummated, or
the loans are not eligible for purchase by the CLO, the Company may be responsible for either holding or disposing of the loans. This
could expose the Company to credit and/or mark-to-market losses, and other risks.

Reinvestment Risk

CLOs will typically generate cash from asset repayments
and sales that may be reinvested in substitute assets, subject to compliance with applicable investment tests. If the CLO collateral manager
causes the CLO to purchase substitute assets at a lower yield than those initially acquired or sale proceeds are maintained temporarily
in cash, it would reduce the excess interest-related cash flow, thereby having a negative effect on the fair value of the Company’s
assets. In addition, the reinvestment period for a CLO may terminate early, which would cause the holders of the CLO’s securities
to receive principal payments earlier than anticipated. There can be no assurance that the Company will be able to reinvest such amounts
in an alternative investment that provides a comparable return relative to the credit risk assumed.

Interest Rate Risk

The price of certain of the Company’s investments
may be significantly affected by changes in interest rates, including recent increases in interest rates. Although senior secured loans
are generally floating rate instruments, the Company’s investments in senior secured loans through