Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 81

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 81
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 diversification requirements.

The annual distribution requirement for a RIC
will be satisfied if we distribute dividends to our stockholders each tax year of an amount generally at least equal to 90% of the sum
of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. Because
we use debt financing, we are subject to certain asset coverage requirements under the 1940 Act and may be subject to financial covenants
that could, under certain circumstances, restrict us from making distributions necessary to satisfy the distribution requirement. If we
are unable to obtain cash from other sources, we could fail to qualify for RIC tax treatment and thus become subject to corporate-level
income tax.

The qualifying income requirement is generally
satisfied if we obtain at least 90% of our income for each tax year from dividends, interest, gains from the sale of our securities, or
similar sources.

| 52 |

The asset diversification requirement will
be satisfied if we meet certain asset composition requirements at the end of each quarter of our tax year. We intend to take certain
positions regarding the qualification of CLO securities under the asset diversification requirement for which there is a lack of guidance.
If the Internal Revenue Service, or the “IRS”, disagrees with any of the positions we take regarding the identity of the
issuers of these securities or how CLO securities are tested under the asset diversification requirement, it could result in the failure
by the Company to diversify its investments in a manner necessary to satisfy the diversification requirement. Failure to meet those requirements
may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments
are expected to be in CLO securities for which there will likely be no active public market, any such dispositions could be made at disadvantageous
prices and could result in substantial losses.

If we fail to qualify for RIC tax treatment for
any reason and remain or become subject to corporate income tax, the resulting corporate taxes could substantially reduce our net assets,
the amount of income available for distribution, and the amount of our distributions.

We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.

For federal income tax purposes, we will include
in income certain amounts that we have not yet received in cash, which may arise if we acquire a debt security at a significant discount
to par. We also may be required to include