Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 54

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 54
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 and market values of lower rated securities will fluctuate
over time, reflecting not only changing interest rates but also the market's perception of credit quality and the outlook for economic
growth. When economic conditions appear to be deteriorating, medium- to lower-rated securities may decline in value due to heightened
concern over credit quality, regardless of prevailing interest rates. Investors should carefully consider the relative risks of investing
in lower rated tranches of CLOs and understand that such securities are not generally meant for short-term investing.

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Adverse economic developments can disrupt the
market for CLO securities and severely affect the ability of issuers, especially highly leveraged issuers (such as certain CLOs), to service
their debt obligations or to repay their obligations upon maturity, which may lead to a higher incidence of default on such securities.
In addition, the secondary market for CLO securities is not as liquid as the secondary market for other types of equity or fixed-income
securities. As a result, it may be more difficult for us to sell these securities, or we may only be able to sell the securities at prices
lower than if such securities were highly liquid. Furthermore, we may experience difficulty in valuing certain CLO securities at certain
times. Under these circumstances, prices realized upon the sale of such securities may be less than the prices used in calculating the
Company's NAV. Prices for CLO securities may also be affected by legislative and regulatory developments.

Lower-rated tranches of CLOs also present risks
based on payment expectations. If an issuer calls the obligations for redemption or if the underlying loans are paid faster than expected,
we may have to replace the security with a lower-yielding security, resulting in a decreased return for investors.

Additionally, we may have indirect exposure to
covenant lite loans through out investments in CLOs. Covenant lite loans are loans that have fewer financial maintenance and reporting
covenants. Such loans may comprise a significant portion of the senior secured loans underlying the CLOs in which we invest. Accordingly,
to the extent that the CLOs in which we invest hold covenant lite loans, the CLOs may have fewer rights against a borrower and may have
greater risk of loss on such investments as compared to investments in loans with more robust maintenance and reporting covenants.

Our investments are subject to prepayment risk.

Although the Adviser’s valuations and projections
take into account certain expected levels of prepayments, the collateral of a CLO may be