Company: PDCC
Filing Date: 2025-03-11
Form Type: N-CSR
Source: 0001398344-25-005419
Chunk: 14

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-03-11
Form: N-CSR
Chunk 14
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 transferred to the contemplated CLO transaction
at original cost plus accrued interest. In such situations, because the loan accumulation facilities will receive its full cost basis
in the underlying loan assets and the accrued interest thereon upon the consummation of the CLO transaction, the Adviser determines the
fair value of the loan accumulation facilities as the cost of the Company’s investment (i.e., the principal amount invested). The
Adviser categorizes loan accumulation facilities as Level 3 investments. There is no active market and prices are unobservable.

Reverse Repurchase Agreements

The Company may enter into reverse repurchase transactions
for short term cash borrowing. The Company agrees to transfer securities to the Royal Bank of Canada (“RBC” or the “Buyer”)
against the transfer of funds back to the Company, with a simultaneous agreement by the Buyer to transfer to the Company such securities
at a date certain or on demand, against the transfer of funds by Company. Outstanding borrowings are valued at cost of the transferred
funds on the statement of assets and liabilities since the arrangement is short term in nature.

Fair Value – Valuation Processes

The Adviser establishes valuation processes and procedures
to ensure that the valuation techniques for investments are fair, consistent, and verifiable. The Adviser designates a Valuation Committee
(the “Committee”) to oversee the entire valuation process of the Company’s investments. The Committee is responsible
for developing the Company’s written valuation processes and procedures, conducting periodic reviews of the valuation policies,
and evaluating the overall fairness and consistent application of the valuation policies.

The Committee meets on a monthly basis, or more frequently
as needed, to determine the valuations of the Company’s investments. Valuations determined by the Committee are required to be supported
by market data, third-party pricing sources, industry accepted pricing models, counterparty prices, or other methods the Committee deems
to be appropriate, including the use of internal proprietary pricing models.

Investment Transactions and Related Investment Income

Income from securitization vehicles and investments

Investment transactions are accounted for on a trade-date
basis. Realized gains and losses on investments are calculated as the difference between the proceeds received upon disposition of an
investment and the amortized cost of that investment at the time of disposition. Dividends from investments are recorded on the ex-dividend
date and interest is recognized on an accrual basis. Premiums and discounts are amortized using the effective interest method over the
lives of the respective investments.