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]

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 ...