Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 42

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 42
---
 obligations that will satisfy specified concentration limitations and allow the CLO to reach the target initial par amount
of collateral prior to the effective date. An inability or delay in reaching the target initial par amount of collateral may adversely
affect the timing and amount of distributions on the CLO equity securities and the timing and amount of interest or principal payments
received by holders of the CLO debt securities and could result in early redemptions, which may cause CLO equity and debt investors to
receive less than face value of their investment.

Our portfolio of investments may lack diversification among CLO securities which may subject us to a risk of significant loss if one or more of these CLO securities experience a high level of defaults on collateral.

Our portfolio may hold investments in a limited
number of CLO securities. As our portfolio may be less diversified than the portfolios of some larger funds, we are more susceptible to
failure if one or more of the CLOs in which we are invested experiences a high level of defaults on its collateral. Similarly, the aggregate
returns we realize may be significantly adversely affected if a small number of investments perform poorly or if we need to write down
the value of any one investment. We may also invest in multiple CLOs managed by the same CLO collateral manager, thereby increasing our
risk of loss in the event the CLO collateral manager were to fail, experience the loss of key portfolio management employees or sell its
business.

| 28 |

Failure to maintain adequate diversification of underlying obligors across the CLOs in which we invest would make us more vulnerable to defaults.

Even if we maintain adequate diversification across
different CLO issuers, we may still be subject to concentration risk since CLO portfolios tend to have a certain amount of overlap across
underlying obligors. This trend is generally exacerbated when demand for bank loans by CLO issuers outpaces supply. Market analysts have
noted that the overlap of obligor names among CLO issuers has increased recently, and is particularly evident across CLOs of the same
year of origination, as well as with CLOs managed by the same asset manager. To the extent we invest in CLOs that have a high percentage
of overlap, this may increase the likelihood of defaults on our CLO investments occurring at the same time.

Our portfolio is focused on CLO securities, and the CLO securities in which we invest may hold loans that are concentrated in a limited number of industries.

Our portfolio is focused on