Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 93

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 93
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a)(i) the originator, sponsor or original lender
with respect to the relevant securitization will retain, on an on-going basis, a net economic interest of not less than 5% with respect
to certain specified credit risk tranches or securitized exposures and (ii) the risk retention is disclosed to the investor in accordance
with the Securitization Regulation; and (b) such investor is able to demonstrate that it has undertaken certain due diligence with respect
to various matters, including the risk characteristics of 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