Company: PDCC
Filing Date: 2025-07-18
Form Type: N-2
Source: 0001214659-25-010613
Chunk: 211

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-07-18
Form: N-2
Chunk 211
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 Active
investment in currencies may subject the Company to additional risks, and the value of the Company’s investments may fluctuate in
response to broader macroeconomic risks than if the Company invested only in fixed income securities. The Company may take long and short
positions in foreign currencies in excess of the value of the Company’s assets denominated in a particular currency or when the
Company does not own assets denominated in that currency. If the Company enters into currency transactions when it does not own assets
denominated in that currency, the Company's volatility may increase and losses on such transactions will not be offset by increases in
the value of the Company's assets.

Currency hedging involves
some of the same risks and considerations as other transactions with similar instruments. Currency transactions can result in losses to
the Company if the currency being hedged fluctuates in value to a degree in a direction that is not anticipated. Furthermore, there is
a risk that the perceived linkage between various currencies may not be present or may not be present during the particular time that
the Company is engaging in proxy hedging. Suitable hedging transactions may not be available in all circumstances. Hedging transactions
may also eliminate any chance for the Company to benefit from favorable fluctuations in relevant foreign currencies.

Risks associated with entering
into forward foreign currency contracts include the possibility that the market for forward foreign currency contracts may be limited
with respect to certain currencies and, upon a contract's maturity, the inability of the Company to negotiate with the dealer to enter
into an offsetting transaction. As mentioned above, forward foreign currency contracts may be closed out only by the parties entering
into an offsetting contract. This creates settlement risk in forward foreign currency contracts, which is the risk of loss when one party
to the forward foreign currency contract delivers the currency it sold but does not receive the corresponding amount of the currency it
bought. Settlement risk arises in deliverable forward foreign currency contracts where the parties have not arranged to use a mechanism
for payment-versus-payment settlement, such as an escrow arrangement. In addition, the correlation between movements in the prices of
those contracts and movements in the price of the currency hedged or used for cover will not be perfect. There is no assurance an active
forward foreign currency contract market will always exist. These factors will restrict the Company's ability to hedge against the risk
of devaluation of currencies in which the Company holds a substantial quantity of securities and are unrelated to the qualitative rating
that may be assigned to any particular security