Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 12

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 12
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 established platform consisting of investment management and operations
/ business management, provides the Adviser with a competitive advantage in its CLO-focused investment strategy. See “The Adviser and the Administrator — Portfolio Managers.”

In addition to managing our investments, the
Adviser’s affiliates and the members of the Investment Team manage investment accounts for other clients, including certain private
investment vehicles. Many of these accounts pursue an investment strategy that may overlap with the strategy that we intend to pursue.

<div align='center'>CLO Overview</div>

CLO Structure

We intend to pursue an investment strategy focused
on investing primarily in (i) positions in CLO equity tranches acquired in both primary and secondary market transactions; (ii) CLO debt
tranches; and (iii) other related investments. CLOs are securitization vehicles backed by diversified pools of mostly broadly syndicated
senior secured sub-investment grade corporate loans, otherwise known as leveraged loans. Such pools of underlying assets are often referred
to as CLO “collateral.” While portfolios of most CLOs consist of broadly syndicated senior secured loans, many CLOs enable
the CLO collateral manager to invest up to 10% of the portfolio in second lien loans, unsecured loans, senior secured bonds, and senior
unsecured bonds.

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CLOs fund the purchase of their portfolios through
the issuance of equity and debt securities in the form of multiple, primarily floating rate, debt tranches. The CLO debt tranches typically
are rated “AAA” (or its equivalent) at the most senior level down to “BB” or “B” (or its equivalent),
which is below-investment grade, at the junior level by a nationally-recognized rating agency. The interest rate on the CLO debt tranches
is the lowest at the AAA-level and generally increases at each level down the rating scale. The CLO equity tranche is unrated and typically
represents approximately 7% to 10% of a CLO’s capital structure. Below is an illustration to reflect a typical CLO in the market.

CLOs have two priority-of-payment schedules (commonly
called “waterfalls”), which are detailed in a CLO’s indenture and which govern how cash generated from a CLO’s
underlying collateral is distributed to the CLO’s debt and equity investors. One waterfall (the interest waterfall) applies to interest
payments received on a CLO’s underlying collateral.