Company: PDCC
Filing Date: 2025-07-18
Form Type: N-2
Source: 0001214659-25-010613
Chunk: 91

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-07-18
Form: N-2
Chunk 91
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 its investment position and the underlying assets, and that procedures are established
for such activities to be monitored on an on-going basis. There are material differences between the Securitization Regulation and the
prior EU risk retention requirements, particularly with respect to transaction transparency, reporting and diligence requirements and
the imposition of a direct compliance obligation on the “sponsor”, “originator” or “original lender”
of a securitization where such entity is established in the EU.

CLOs issued in Europe are generally
structured in compliance with the Securitization Regulation so that prospective investors subject to the Securitization laws can invest
in compliance with such requirements. To the extent a CLO is structured in compliance with the EU Securitization laws, our ability to
invest in the residual tranches of such CLOs could be limited, or we could be required to hold our investment for the life of the CLO.
If a CLO has not been structured to comply with the Securitization Regulation, it will limit the ability of EEA-regulated institutional
investors to purchase CLO securities, which may adversely affect the price and liquidity of the securities (including the residual tranche)
in the secondary market. Additionally, the Securitization Regulation and any regulatory uncertainty in relation thereto may reduce the
issuance of new CLOs and reduce the liquidity provided by CLOs to the leveraged loan market generally. Reduced liquidity in the loan market
could reduce investment opportunities for collateral managers, which could negatively affect the return of our investments. Any reduction
in the volume and liquidity provided by CLOs to the leveraged loan market could also reduce opportunities to redeem or refinance the securities
comprising a CLO in an optional redemption or refinancing and could negatively affect the ability of obligors to refinance of their collateral
obligations, either of which developments could increase defaulted obligations above historic levels.

The SEC staff could modify its position on certain non-traditional investments, including investments in CLO securities.

The staff of the SEC from time to time has undertaken
a broad review of the potential risks associated with different asset management activities, focusing on, among other things, liquidity
risk and leverage risk. The staff of the Division of Investment Management of the SEC has, in correspondence with registered management
investment companies, previously raised questions about the level of, and special risks associated with, investments in CLO securities.
While it is not possible to predict what conclusions, if any