Financial Data and Key Metrics Changes - For Q3 2025, the company reported invested income of $5.4 million or $0.80 per share, a slight decrease from $5.5 million in the prior quarter [15] - Total expenses remained stable at $2.4 million or $0.35 per share, consistent with the previous quarter [15] - The company recorded net unrealized losses on investments of $6.9 million or $1.02 per share, alongside a modest net realized loss of $424,000, resulting in a net loss of $4.3 million or $0.64 per share [15] - Recurring cash flows from the CLO portfolio totaled $8.7 million or $1.28 per share, exceeding distributions and expenses by $0.26 per share, up from $8 million or $1.18 per share in the prior quarter [15][16] Business Line Data and Key Metrics Changes - The portfolio's average junior OC cushion stands at 4.5%, with deals exposed to First Brands having a slightly higher cushion of 4.6% [6] - The weighted average gap yield of the portfolio increased from 12.75% to 13.07% due to refinancing activities [10] Market Data and Key Metrics Changes - The broader CLO equity market faced headwinds, primarily due to spread tightening in the broadly syndicated loans market [5] - The company noted a significant uptick in leveraged buyout (LBO) activity, with approximately $200 billion in deals announced during the first three quarters of 2025, surpassing the $164 billion recorded for all of 2024 [9] Company Strategy and Development Direction - The company remains focused on disciplined portfolio management and long-term total return, viewing market dislocations as opportunities [5][9] - The investment platform combines machine learning and natural language processing with traditional credit analysis, providing a competitive advantage in sourcing opportunities [11][12] Management's Comments on Operating Environment and Future Outlook - Management views the current environment as broadly positive for CLO equity, especially with anticipated rate cuts leading to improved corporate refinancing conditions [9] - The company believes that CLOs provide an efficient way to access senior secured corporate loans and can offer an attractive risk-return profile across various credit cycles [19] Other Important Information - As of September 30, 2025, total assets were $157.5 million, with total net assets of $114.9 million, resulting in a net asset value per share of $16.89 [16] - The company distributed dividends of $0.22 per common share in July, August, September, and October, with plans for the same in the following months, representing an annualized dividend yield of approximately 16% [17] Q&A Session Summary Question: Insights on the primary CLO market and investment opportunities - Management indicated that arbitrage returns in the primary CLO equity market are currently not adequate for large-scale participation, with more attractive opportunities in the secondary CLO equity markets [22][23] Question: Impact of resets and refinancings on expected yields - Management preferred not to comment on intra-quarter activities but noted that previous resets and refinancings contributed significantly to yield improvements [24][25] Question: Mix of opportunities between U.S. and European CLOs - The majority of the portfolio is focused on the U.S. CLO market, with occasional consideration for European CLOs, particularly single B positions that can provide stronger NAV protection [29] Question: Future ATM issuance versus share repurchase - Management is evaluating both options but believes it is too early to consider share repurchase as a viable option at this stage [31] Question: Potential portfolio growth and leverage management - Management will add leverage when costs are attractive, and they continue to monitor conditions to modulate leverage levels as needed [32][33]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported invested income of $5.4 million or $0.80 per share, a slight decrease from $5.5 million in the previous quarter [15] - Total expenses remained stable at $2.4 million or $0.35 per share, consistent with the prior quarter [15] - The company recorded net unrealized losses on investments of $6.9 million or $1.02 per share, alongside a modest net realized loss of $424,000, resulting in a net loss of $4.3 million or $0.64 per share [15] - Recurring cash flows from the CLO portfolio totaled $8.7 million or $1.28 per share, an increase from $8 million or $1.18 per share in the previous quarter [15][16] - Total assets as of September 30, 2025, were $157.5 million, down from $166.1 million as of June 30, 2025 [16] Business Line Data and Key Metrics Changes - The portfolio's average junior OC cushion stands at 4.5%, with deals exposed to First Brands having a slightly higher cushion of 4.6% [6] - The weighted average gap yield of the portfolio increased from 12.75% to 13.07% due to refinancing activities [10] Market Data and Key Metrics Changes - The broader CLO equity market faced headwinds, primarily due to spread tightening in the broadly syndicated loans market [5] - The company noted a significant uptick in leveraged buyout (LBO) activity, with approximately $200 billion in deals announced during the first three quarters of 2025, surpassing the $164 billion recorded for all of 2024 [9] Company Strategy and Development Direction - The company remains focused on disciplined portfolio management and long-term total return, viewing market dislocations as opportunities [5][9] - The investment platform combines machine learning and natural language processing with traditional credit analysis, providing a competitive advantage in sourcing opportunities [11][12] - The company plans to utilize leverage opportunistically when attractive investment opportunities arise [16] Management's Comments on Operating Environment and Future Outlook - Management views the current environment as presenting opportunities in the CLO market, with expectations of a constructive outlook for CLO equity performance in a gradually easing monetary environment [10][19] - The company believes that CLOs provide an efficient way to access senior secured corporate loans and can offer an attractive risk-return profile across various credit cycles [19] Other Important Information - The company has started to tap its at-the-market equity issuance program, issuing approximately 26,600 shares for net proceeds of approximately $0.4 million [17] - Dividends of $0.22 per common share were distributed in July, August, September, and October, with plans for the same in November, December, and January, representing an annualized dividend yield of approximately 16% [17] Q&A Session Summary Question: Insights on the primary CLO market and investment opportunities - Management indicated that arbitrage returns in the primary CLO equity market are currently not adequate for large-scale participation, with more attractive opportunities in the secondary CLO equity markets [21][22][23] Question: Impact of resets and refinancings on expected yields - Management preferred not to comment on intra-quarter activities but noted that previous resets and refinancings contributed significantly to yield improvements [24][25] Question: Mix of opportunities between U.S. and European CLOs - The majority of the portfolio is focused on the U.S. CLO market, with occasional consideration of European CLOs, particularly single B positions that can provide stronger NAV protection [29] Question: Future ATM issuance versus share repurchase - Management is evaluating both ATM issuance and share repurchase options but considers it too early to prioritize one over the other [31] Question: Potential portfolio growth and leverage management - Management stated that portfolio growth will depend on the attractiveness of leverage costs and will continue to monitor conditions as they evolve [32][33]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported invested income of $5.4 million or $0.80 per share, a slight decrease from $5.5 million in the prior quarter [14] - Total expenses remained stable at $2.4 million or $0.35 per share, consistent with the previous quarter [14] - The net unrealized losses on investments were $6.9 million or $1.02 per share, alongside a modest net realized loss of $424,000, leading to a net loss of $4.3 million or $0.64 per share [14] - Recurring cash flows from the CLO portfolio totaled $8.7 million or $1.28 per share, exceeding distributions and expenses by $0.26 per share, up from $8 million or $1.18 per share in the prior quarter [14][15] Business Line Data and Key Metrics Changes - The portfolio's average junior OC cushion stands at 4.5%, with deals exposed to First Brands having a slightly higher cushion of 4.6% [6] - The weighted average gap yield of the portfolio increased from 12.75% to 13.07% due to refinancing activities [10] Market Data and Key Metrics Changes - The broader CLO equity market faced headwinds, primarily due to spread tightening in the broadly syndicated loans market [5] - The company noted a significant uptick in leveraged buyout (LBO) activity, with approximately $200 billion in deals announced during the first three quarters of 2025, surpassing the $164 billion recorded for all of 2024 [9] Company Strategy and Development Direction - The company remains focused on disciplined portfolio management and long-term total return, viewing market dislocations as opportunities [5][10] - The investment platform combines machine learning and natural language processing with traditional credit analysis, providing a competitive advantage in sourcing opportunities and managing the portfolio [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook for CLO equity performance in a gradually easing monetary environment, anticipating that lower rates will stimulate LBO activity and enhance portfolio diversification [9][19] - The company believes that CLOs provide an efficient way to access senior secured corporate loans and can offer an attractive risk-return profile across various credit cycles [19] Other Important Information - As of September 30, 2025, total assets were $157.5 million, and total net assets were $114.9 million, resulting in a net asset value per share of $16.89 [15][16] - The company has started to utilize its at-the-market equity issuance program, issuing approximately 26,600 shares for net proceeds of approximately $0.4 million [16][17] Q&A Session Summary Question: Insights on the primary CLO market and investment opportunities - Management indicated that current arbitrage returns in the primary CLO equity market are not adequate for large-scale participation, with expected returns in the 10%-12% range, while secondary CLO markets offer more attractive opportunities [21][22] Question: Impact of resets and refinancings on expected yields - Management preferred not to comment on intra-quarter activities but confirmed that recent resets and refinancings contributed significantly to yield improvements [23][24] Question: Mix of opportunities between U.S. and European CLOs - The majority of the portfolio is focused on the U.S. CLO market, with occasional consideration of European CLOs, particularly single B positions that can provide stronger NAV protection [29] Question: Future ATM issuance versus share repurchase - Management is evaluating both ATM issuance and share repurchase options but considers it too early to prioritize one over the other [30] Question: Potential portfolio growth and leverage management - Management stated that leverage levels will be modulated based on market conditions, with ongoing monitoring of opportunities to increase leverage when costs are attractive [31][32]

Pearl Diver Credit Company (NYSE:PDCC) Q3 2025 Earnings Call November 18, 2025 11:00 AM ET Speaker0Morning, and welcome to the Pearl Diver Credit Company Third Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Emma Little, Investor Relations.Thank you. You may begin.Speaker1Good day, ladie ...

Pearl Diver Credit Company Inc. (NYSE: PDCC, PDPA) 2025 Q3 Earnings Presentation November 18, 2025 1 Disclaimer This presentation and the information and views included herein do not constitute investment advice, or a recommendation or an offer to enter into any transaction with Pearl Diver Credit Company Inc. ("PDCC" or the "Company") or any of its affiliates. This presentation is provided for informational purposes only, does not constitute an offer to sell securities of the Company or a solicitation of a ...

Group 1 - The CLO market is considered interesting, but there is a preference for securities higher up in the capital stack over CLO equity investments [1] - Pearl Diver Credit Company (PDCC) specializes in CLO equity investments [1] - The Investment Doctor emphasizes a mixed portfolio of dividend and growth stocks, focusing on European small-caps with a 5-7 year investment horizon [1] Group 2 - The investment group European Small Cap Ideas provides exclusive access to actionable research on European investment opportunities [1] - The focus is on high-quality small-cap ideas, emphasizing capital gains and dividend income for continuous cash flow [1] - Features of the investment group include two model portfolios, weekly updates, educational content, and an active chat room for discussions [1]

Core Points - Pearl Diver Credit Company Inc. will release its third quarter 2025 financial results on November 18, 2025, before market open [1] - A conference call to discuss the financial results is scheduled for the same day at 11:00 am Eastern Time / 4:00 pm UK Time [1][2] - The company is externally managed and focuses on maximizing total return and generating high current income through investments in equity and junior debt tranches of CLOs [4] Company Overview - Pearl Diver Credit Company Inc. is a non-diversified, closed-end management investment company listed on NYSE under the symbols PDCC and PDPA [4] - The company primarily invests in sub-investment grade, senior secured floating-rate debt issued by various US companies across multiple sectors [4] - As of September 30, 2025, Pearl Diver Capital manages approximately $2.9 billion in assets across multiple private funds backed by institutional investors [6] Management and Strategy - Pearl Diver Capital LLP, founded in 2008, specializes in CLO investing and employs advanced analytics to identify investment opportunities [5] - The firm has established relationships with over 80 CLO managers, providing access to critical credit information while avoiding conflicts of interest [6]

Financial Data and Key Metrics Changes - For the quarter ended June 30, 2025, the company reported investment income of $5.5 million or $0.81 per share, down from $6 million in the prior quarter due to decreased yield on CLO equity investments caused by market-wide loan spread compression [15] - Total expenses for the quarter were $2.4 million or $0.35 per share, resulting in net investment income of $3.1 million or $0.46 per share [15] - The net income for the quarter was $3.5 million or $0.52 per share, with recurring cash flows totaling $8 million or $1.18 per share, exceeding distributions and expenses by $0.16 per share [15][16] - As of June 30, 2025, total assets were $166.1 million and total net assets were $123.6 million, leading to a net asset value (NAV) per share of $18.19, which increased to $18.48 by July 31, 2025 [16] Business Line Data and Key Metrics Changes - The company recorded an unrealized gain on investments of $500,000 and a modest net realized loss of $70,000 during the quarter [15] - The weighted average GAAP yield on the portfolio decreased to 12.75% as of June 30, down from 15.57% as of March 31, primarily due to market-wide loan spread compression [7][8] Market Data and Key Metrics Changes - The CLO market remained resilient during a period of macro uncertainty and has since rebounded, with loan fundamentals remaining strong [6] - The trailing twelve-month payment default rate rose to approximately 1.1% as of June 30, 2025, up from 0.91% as of December 2024, but still below the post-pandemic peak of 1.75% [39] Company Strategy and Development Direction - The company emphasizes a data-driven investment approach utilizing machine learning technology and proprietary algorithms to maintain agility and seek relative value in the CLO space [8][9] - The portfolio is diversified across 52 unique CLO positions managed by 31 distinct CLO manager platforms, with no significant concentration in any single CLO [11][12] - The company plans to continue leveraging its unique infrastructure to identify mispricings and attractive investment opportunities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term resilience of the CLO asset class despite macro uncertainties, highlighting the efficient access to senior secured corporate loans [19] - The company anticipates continued refinancing and reset activity into 2025, with five minority positions already successfully reset or refinanced in Q3 [34] Other Important Information - The company distributed dividends of $0.22 per common share in April, May, June, and July, with plans for similar distributions in the following months, representing an annualized dividend yield of approximately 14.7% [17] Q&A Session Summary Question: Inquiry about recurring cash flow for comparative purposes - Management confirmed that recurring cash flow for Q1 was $7.7 million [21][24] Question: Thoughts on increasing leverage - Management stated that leverage levels will vary over time and will be utilized opportunistically based on investment opportunities and cost of leverage [22][24] Question: Composition of current pipeline regarding primary vs secondary opportunities and U.S. vs European CLO positions - Management indicated that the primary market currently presents interesting opportunities, while the secondary market has provided better relative value recently [25][29] Question: Quantification of opportunities for resets and refinancings within the portfolio - Management expects refinancing and reset activity to continue, with five minority positions already reset or refinanced in Q3 [33][34] Question: NAV reaction to the credit environment after the sell-off in April - Management noted that NAV increased post-sell-off due to strong loan fundamentals and significant refinancing activity [38][39]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported investment income of $5.5 million or $0.81 per share, down from $6 million in the prior quarter due to decreased yield on CLO equity investments caused by market-wide loan spread compression [15] - Total expenses for the quarter were $2.4 million or $0.35 per share, resulting in net investment income of $3.1 million or $0.46 per share [15] - The net income for the quarter was $3.5 million or $0.52 per share, with recurring cash flows totaling $8 million or $1.18 per share, exceeding distributions and expenses by $0.16 per share [16][18] - As of June 30, total assets were $166.1 million and total net assets were $123.6 million, leading to a net asset value (NAV) per share of $18.19, which increased to $18.48 by July 31 [17] Business Line Data and Key Metrics Changes - The weighted average GAAP yield on the portfolio decreased to 12.75% as of June 30 from 15.57% as of March 31, primarily due to market-wide loan spread compression [7][8] - The company maintained a diversified portfolio with 52 unique CLO positions managed by 31 distinct CLO manager platforms, consisting of approximately 1,800 unique loans across over 30 industry sectors [12][13] Market Data and Key Metrics Changes - The CLO market showed resilience during macroeconomic uncertainty, with loan fundamentals remaining strong and managers adapting quickly to market conditions [6] - The trailing twelve-month payment default rate rose to approximately 1.1% as of June, up from 0.91% as of December 2024, but still below the post-pandemic peak of 1.75% [40] Company Strategy and Development Direction - The company emphasized its data-driven investment approach, utilizing machine learning and proprietary algorithms to maintain a competitive edge in the CLO market [9][10] - The management plans to continue leveraging its unique infrastructure to identify mispricings and attractive investment opportunities, with a focus on both primary and secondary market opportunities [10][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term resilience of the CLO asset class despite macro uncertainties, highlighting the efficient access to senior secured corporate loans [20] - The company anticipates continued refinancing and reset activity into 2025, with five minority positions successfully reset or refinanced in Q3 [35] Other Important Information - The company distributed dividends of $0.22 per common share in April, May, June, and July, with plans to continue this distribution in August, September, and October, representing an annualized dividend yield of approximately 14.7% [18] Q&A Session Summary Question: Recurring cash flow comparison with the prior quarter - Management confirmed that recurring cash flow for Q1 was $7.7 million, similar to the current quarter's level [22][24] Question: Thoughts on increasing leverage - Management stated that leverage levels will vary over time, and they evaluate investment opportunities daily, considering the cost of leverage compared to expected returns [23][24] Question: Composition of current pipeline in terms of primary vs secondary opportunities and U.S. vs European CLO positions - Management indicated that the relative value of opportunities drives their decisions, noting interesting opportunities in the primary market while the secondary market has provided better relative value recently [25][28] Question: Quantifying opportunities for resets and refinancings - Management expects refinancing and reset activity to continue, with five minority positions successfully reset or refinanced in Q3 [35] Question: NAV reaction to the credit environment post-sell off - Management noted that NAV increased post-sell off due to strong loan technicals and significant refinancing activity, with credit fundamentals remaining stable [39]

Core Viewpoint - Pearl Diver Credit Company Inc. reported solid financial results for the second quarter of 2025, maintaining net asset value per share and leveraging a machine learning approach to CLO equity investing to enhance portfolio returns [2][5]. Financial Performance - Net asset value per share was $18.19 as of June 30, 2025, down from $18.33 as of March 31, 2025 [5]. - GAAP net income for the quarter was $3.5 million, or $0.52 per share [5]. - Net investment income for the quarter was $3.1 million, or $0.46 per share [5]. - Investment income for the quarter totaled $5.5 million, or $0.81 per share [5]. - Total expenses for the quarter were $2.4 million, or $0.35 per share [5]. - The net change in unrealized appreciation on investments was $0.5 million, or $0.07 per share, compared to unrealized depreciation of $9.6 million, or $1.41 per share, in the previous quarter [5]. - Recurring cash flows from CLO investments for the quarter were $8.0 million, or $1.18 per share [5]. Portfolio and Investment Strategy - The Company had leverage of $40.4 million, representing 24.3% of total assets as of June 30, 2025, compared to 23.2% as of March 31, 2025 [5]. - The weighted average effective yield of the CLO portfolio was 12.75%, down from 15.57% as of March 31, 2025, due to market-wide loan spread compression [5]. - 95% of CLOs in the portfolio have reinvestment end dates from 2026 through 2030, indicating potential for favorable reinvestment opportunities [5]. - The Company had indirect exposure to approximately 1,285 unique corporate obligors and over 1,800 underlying loans, totaling $24.4 billion [5]. - The largest look-through obligor represented 0.7% of the loans in the CLO equity portfolio, while the top ten largest obligors represented 4.7% [5]. Dividends and Future Outlook - Net asset value per share increased to $18.48 as of July 31, 2025, a 1.6% increase from June 30, 2025 [5]. - The Company declared monthly dividends of $0.22 per share for August, September, and October 2025 [5].